US SANCTIONS | Page 3 Iran’s new president is facing a slew of economic challenges

Sunday, June 20, 2021 Dhul-Qa’da 10, 1442 AH QNB REPORT : Page 12 ‘Shift ’ in consumer GULF TIMES demand expected to drive next phase of BUSINESS global recovery

Ahmed al-Jarboey QP wins stake appointed as chief operating officer of in two off shore QIC, Qatar operations

Qatar Insurance Company has appointed Ahmed al-Jarboey (pictured) as chief operating off icer, QIC, Qatar Operations. Al-Jarboey has a bachelor’s degree in Business Administration from a reputable university in exploration the UK. He joined the company in 2006 and over the course of these years, has gained experiences that crystallised from an employee in retail department, to a leading position as chief operating off icer of Qatar Operations. His new appointment comes within the framework of the group’s strategy, which blocks in aims to enable qualified and trained Qatari professionals working in the insurance sector. On the leadership appointment, Salem Khalaf al-Mannai, Group CEO, said, “Qualified national cadres are capable of production and creativity, as these QIC cadres are able to contribute to the development process witnessed by the Qatar Insurance Group in all its fields Suriname in advancing the national economy and its institutions.” consortium including Qatar Petroleum has been award- ed two off shore blocks in Suriname, under ‘production Asharing contracts’ as part of the recent Suriname off - shore bid round. The winning bids in the competitive round were announced by Suriname’s state oil company, Staatsolie. Ooredoo participates in Telecoms A consortium comprising QP (20%), TotalEnergies (Opera- tor, 40%) and Staatsolie (40%) were awarded the right to ex- plore shallow water blocks 6 and 8, which are immediately ad- World Middle East conference jacent to the prolifi c block 58 discoveries. Commenting on this occasion, HE the Minister of State for Energy Aff airs, Saad bin Sherida al-Kaabi, also the President Ooredoo was recently invited 5G core – and how IoT use cases (Business) at Ooredoo said, and CEO of QP, said, “We are pleased to be awarded explora- to take part in a keynote panel are transforming industries and “We are always delighted and tion rights in blocks 6 and 8, and this represents Qatar Petro- discussion on the Internet of connectivity, creating ground- honoured to be invited to take leum’s fi rst entry into Suriname. This successful result also Things (IoT) at the Telecoms breaking possibilities in digitising part in panel discussions such as increases our presence in the Guyana-Suriname Basin and fur- World Middle East conference. key verticals. this one with our peers. We firmly ther strengthens Qatar Petroleum’s footprint in Latin America, Fuencisla Merino, assistant The panel also shared thoughts believe a key element of progress marking yet another successful step towards realising our inter- director, IoT at Ooredoo, joined on handling mammoth data is sharing knowledge, experience national growth ambitions.” panellists from Vodafone Qatar, volumes with cloud computing, and best practice – especially Al-Kaabi added, “I would like to take this opportunity to Mobily and CSG as they discussed artificial intelligence and when it comes to innovation and thank the Surinamese authorities for a comprehensive and how IoT is gaining momentum edge computing, and how the latest technology – and take effi cient tender process, as well as our strategic partner, To- with the advance of 5G, allowing 5G provides significantly great pride in contributing to the talEnergies, for their excellent co-operation in achieving this realisation of its full potential. faster data throughput and advancement of our industry in result.” Topics covered included the low-latency communication, this way.” Located in the southern part of off shore Suriname, close to global vision of IoT – including supporting machine-type The panel discussion was the border with Guyana, the adjacent blocks 6 and 8 lie imme- A consortium including Qatar Petroleum has been the 5G enhancements required communications without any conducted by Jim Morrish, a diately south of block 58 in shallow waters, with depths ranging awarded two off shore blocks in Suriname, under for this vision, such as network human interaction. recognised analyst in IoT and between 30 and 65 metrtes. The two blocks cover a combined ‘production sharing contracts’ as part of the recent slicing, non-public networks and Thani al-Malki, executive director digital transformation. area of approximately 2,750 square kilometres. Suriname off shore bid round Qatar’s PPP law to provide greater support to private sector, foreign investments: Al-Sharqi

atar’s PPP law would signifi - nected to the Qatar’s 2030 Vision and other bodies that provide support to cantly contribute to accel- the 2022 World Cup, al-Sharqi said. SMEs,” he said. Qerating the country’s mas- According to al-Sharqi, the “in- In reply to a question about Qatar sive infrastructure development and volvement of the private sector in PPP Chamber’s priorities in the medium- providing greater support for private projects will be greater in the upcom- term in respect of new initiatives and sector and foreign investments, not- ing period, especially that the private services, he noted that the chamber ed Qatar Chamber general manager sector enjoys substantial support launched a host of services and initia- Saleh bin Hamad al-Sharqi. from the wise leadership and the Qa- tives that are of signifi cant advantage The law paves the way for the tari government.” to the interests of the private sector. launch of several investment projects He said the law enables benefi ting These include the launch of many in Qatar in various sectors includ- from the private sector’s administra- electronic services on Qatar Cham- ing healthcare, sports, tourism, and tive and technical competencies and ber’s website such as issuing certifi - education, al-Sharqi said in an inter- fi nancing capabilities in joint projects cates of origin and document attesta- view with ‘The Business Year: Qatar with the public sector. tion. 2021’. Al-Sharqi stressed that Qatar He commended the role played by The partnership between public Chamber’s interest in developing the Qatar Chamber’s sectoral committees and private sectors will help in fos- SMEs was based on its importance in through coordination with relevant tering Qatar’s position as a leading country’s economic development and bodies in the country to address is- international centre for business and job creation in the local market. sues that are related to the private investments, as well as supporting “Continuing co-ordination and sector and fi nd solutions for obstacles Saleh bin Hamad al-Sharqi, Qatar Chamber general manager. the implementation of projects con- co-operation exist with QDB and faced by its members. Gulf Times 2 Sunday, June 20, 2021 BUSINESS

Ex-central banker warns of financial instability risks in India BoJ should trim

Bloomberg between 2002 and 2009, said loan hanced stresses experienced by both ers and bankruptcy of two more over beyond the economic impact of the New Delhi growth has mostly been sluggish in lenders and borrowers, leading to the past couple of years. pandemic’s second wave as the index Covid-relief the economy despite the RBI’s recent potential financial instability.” Despite those struggles, strategists hits record highs. measures to boost flow of bank credit. His views come days before the cen- expect India’s marquee lenders to In its annual report last month, the Former Indian central banker Rakesh The only exception was credit to tral bank releases its bi-annual Finan- withstand the impact of two waves central bank flagged risks from a corporate bond Mohan warned of looming financial small- and medium-sized enterprises, cial Stability Report, which will give of virus infections on the economy widening gap between asset prices instability in India’s already struggling he wrote in a paper published by investors a clearer picture on how thanks to robust provisioning and relative to the weak real economy. banking sector, citing the growing the Centre for Social and Economic India’s banking sector is dealing with new measures that will allow them Taking into account the rally in the buying: Survey divergence between the pain in the Progress. an economic downturn. The country to hide the true extent of their bad Indian stock markets, the RBI said: real economy and the exuberance in “Hence there is a mismatch between has one of the biggest piles of soured loans through 2022. That may boost “This order of asset price inflation the capital markets. the performance of the real sector credit among major economies and the sector’s performance – which has in the context of the estimated 8% Bloomberg Mohan, who served as deputy gover- and financial markets,” Mohan said. a crisis in the shadow banking sector been middle-of-the pack this quarter contraction in GDP in 2020-21 poses Tokyo nor of the Reserve Bank of India twice “This could potentially lead to en- culminated in the rescue of two lend- – in an equity market that’s looking the risk of a bubble.”

growing number of market participants say that the Bank of Japan ought to dial back its Abuying of corporate bonds as a pandemic- relief step because companies no longer need the money and the policy distorts prices in the debt market. In a survey of 90 investors by Daiwa Securities Group Inc, 74% said the BoJ should cut back its ¥20tn ($181bn) programme to buy company debt. The central bank is already becoming less active in other markets: it didn’t buy any exchange-traded funds for the whole month of May, the fi rst time since Governor Haruhiko Kuroda kicked off his easing campaign in 2013, and it’s cut the frequen- cy of its government bond purchase operations. A reduction of corporate bond buying would be a move in the directions of other central banks as the global economy rebounds after getting pum- melled by Covid-19. The Federal Reserve is plan- ning to start selling corporate bonds it bought last year as part of an emergency lending facility, and offi cials on Wednesday sped up their expected pace of policy tightening. At the European Central Bank, tensions are emerging about how and when to discuss an end to its crisis stimulus. A cut in company note purchases would also put the brakes on the so-called BoJ trade, in which investors buy debt on expectations they may be able to sell it to the central bank later at a higher price. “Corporate bond buying was eff ective in secur- ing funding last year but money is fl owing now for the relatively large fi rms that benefi t from these schemes as markets stabilise and improve,” said Tetsuya Inoue, a former BoJ offi cial and the chief researcher for fi nancial market and digital busi- ness at Nomura Research Institute Ltd. A review of the policy may be appropriate “as distortions to market pricing may become more visible than the benefi ts,” he said. The BoJ’s corporate bond buying may blur the distinction between companies whose credit A man walks past the Reserve Bank of India (RBI) head off ice in Mumbai (file). The RBI sees Asia’s third-largest economy expanding 9.5% in the year that began April 1, slower than the 10.5% pace it premiums are rising temporarily due to the virus had forecast before a second deadly outbreak of coronavirus infections. hurting their business, and those that have high credit risks even without the Covid-19 impact, according to Hiromi Yamaoka, a former head of the bank’s fi nancial markets department.

Hydro-rich Chinese city is said to clamp down on crypto mining A Chinese city with abundant hydropower is Growth pangs gaining said to have begun a sweeping clampdown on crypto mining firms this week, following an earlier ban from the central government on such activities, reports Bloomberg. At least one bitcoin miner was told by an off icial with the Ya’an city government that the city promised the provincial authorities it would root out all bitcoin and Ether mining operations precedence for India’s within one year, said a person with knowledge of the situation. Authorities of Ya’an in the southwestern province of Sichuan pledged at a Thursday meeting to screen and “rectify” all bitcoin mining firms within its jurisdiction, blockchain news platform PANews reported. Some miners were notified by their power suppliers that all infl ation-targeting RBI power plants in their area will be closed until further notice for “self-inspections,” according Bloomberg the benchmark repurchase rate un- minutes. “The dent on economic ac- rise in fuel taxes and higher com- while saying there’s need to “sup- to the report. A person who answered a Ya’an Mumbai changed for a sixth straight meet- tivity due to the second wave of the modity prices – don’t warrant a port growth for now as the fl exible government media-inquiry line said he is not ing, even as the Reserve Bank of virus has necessitated the continu- withdrawal of the easy measures put infl ation targeting framework al- aware of the matter. India expanded its version of the ation of monetary measures to sup- in place since last year. lows temporary deviation from the The clampdown appears to be widening across he economic disruption quantitative easing programme to port the process of economic recov- Here are some excerpts from the target so long as infl ation is expect- the province. Power companies owned by the caused by the Covid-19 pan- spur economic activity. ery to make it durable.” minutes: ed to be within tolerance bands.” central and provincial governments in Sichuan Tdemic has brought growth Minutes from the MPC’s June 2-4 The RBI sees Asia’s third-largest  Michael Debabrata Patra, the  Ashima Goyal, a dovish mem- must immediately stop supplying electricity to concerns to the top of Indian mon- meeting released on Friday showed economy expanding 9.5% in the deputy governor overseeing mon- ber on the panel, said given that crypto mining projects, China Business News etary policymakers’ priority list, that policy makers agreed that the year that began April 1, slower than etary policy, said he sees the recent output gap has widened and infl a- reported Friday, citing a notice issued by the and relegated the infl ation goal to a pandemic’s second wave has neces- the 10.5% pace it had forecast before price surge as supply-side driven tion is largely predicted to remain province’s economic planning agency and secondary position, minutes of their sitated urgent policy interventions. a second deadly outbreak of corona- and lacking any persistent demand within the tolerance band, macr- energy administration. meeting show. “The second wave of Covid-19 has virus infections. The central bank pull. “The growth-infl ation trade- oeconomic policy clearly has to fur- State Grid Sichuan Electric Power Company has The pivot for growth boosts altered the near-term outlook, and expects infl ation to end up at 5.1% off and consequently, policy choices ther stimulate demand. reported 26 suspected crypto mining projects the odds that interest rates will policy support from all sides – fi scal, this year, toward the upper end of its have shifted towards increasing ac-  Jayanth R Varma, a professor at to the government, according to the report. It stay lower for longer to ensure the monetary and sectoral – is required 2%-6% target band. commodation,” he said. the Indian Institute of Management added that city-level governments have been economy’s recovery takes hold. to nurture recovery and expedite The MPC is convinced that the  Mridul Saggar, an executive di- at Ahmedabad, said the balance of asked to start checks in their areas and shut The six-member Monetary Policy return to normalcy,” governor Shak- current gains in price growth – rector at RBI, warned against pull- risk and reward continues to be in down all such projects that are found. Committee earlier this month left tikanta Das was cited as saying in the fanned by supply-side problems, a ing out policy support prematurely, favor of monetary accommodation.

Bloomberg QuickTake Q&A Why hydrogen is the hottest thing in green energy

By Vanessa Dezem purify iron ore. The byproduct is water vapour used if the carbon dioxide produced is captured goal: building electrolysers that are capable where it hopes to make hydrogen the main rather than CO2. And while batteries currently and stored; it’s counted as a low emissions fuel. of converting 40 gigawatts of renewable energy source by 2025. dominate the field of electric vehicles, some 4. What hurdles does green electricity into hydrogen by 2030. It’s made 7. How about the US? companies are betting that hydrogen-powered hydrogen face? hydrogen a central component of its Green Deal Solar panels and wind turbines can’t clean up fuel cells will be a better choice than batteries plan, envisaging as much as €470bn ($560bn) The US had 6,500 fuel cell electric cars on the everything. Making steel, for instance, calls for for heavy vehicles, such as trucks, ships and A bunch. Green hydrogen currently costs of public and private investments by 2050 in road in 2019 – the world’s largest fleet. President higher temperatures than traditional electric potentially even airplanes. between $2.50 and $4.50 a kilogram to make, the hope of kickstarting a global hydrogen Joe Biden’s administration has set a goal of furnaces can deliver. That’s why plans for 2. What is green hydrogen? according to an analysis by BloombergNEF. That market. Germany has declared that green reducing the cost of renewable hydrogen by blunting climate change now envision a big role would need to fall below $1 a kilogram to become hydrogen will play a central role in transforming 80% by 2030. Industry groups, including some for hydrogen in curbing industrial emissions Hydrogen can be made by electrolysis, a process competitive with hydrogen made from fossil fuel. the country’s industrial base as it moves to zero fossil-fuel companies, are pushing for tax credits and for powering cars, trucks and ships. So- that sends an electric current through water in a BNEF projects it will reach that level by 2030. emissions by 2045. for hydrogen production and for subsidies for called green hydrogen is essentially emissions device known as an electrolyser to split hydrogen But that hinges not only on a vast expansion of 6. What’s happening elsewhere? converting natural gas pipelines to transport free. But meeting the ambitious plans being atoms from oxygen. (In fuel cells, the process electrolyser capacity, but on a vast increase in hydrogen. made for it means building a giant industry is reversed: Hydrogen is mixed with oxygen electricity generation – at a time when the world’s China plans to have 1mn vehicles powered 8. What are businesses doing? almost from scratch. to produce water and electricity.) To count as generators and grids already will be straining by hydrogen fuel cells on its roads by the 1. What’s hydrogen’s advantage? green hydrogen, the electricity used to run the to keep up with demand from newly electrified end of 2030. The value of its hydrogen Most of the world’s energy companies and big electrolyser must come from renewable sources. vehicles. Also, as the lightest gas in the universe, production could reach 1tn yuan ($155bn) industrial groups are involved in hydrogen For one thing, it burns – hot and clean. 3. How else is hydrogen made? hydrogen must be compressed or mixed with by 2025, according to the China Hydrogen somehow. Royal Dutch Shell Plc is leading a Replacing the fossil fuels now used in furnaces natural gas to send through a pipeline or chilled Alliance. Australia will invest $214mn to speed consortium developing a project to produce that reach 1,500 degrees Celsius (2,732 degrees Nowadays, most of the hydrogen used as fuel to a liquid state to be transported by ship, adding development of four hydrogen hubs with 26 up to 10 gigawatts of green hydrogen by 2040. Fahrenheit) with hydrogen gas could make a is derived by splitting it off from molecules to its costs compared with natural gas. gigawatts of capacity. Japan, where Toyota Germany’s RWE AG, together with 26 other big dent in the 20% of global carbon dioxide of natural gas. But that requires a good deal 5. Who’s leading on green Motor Corp has invested heavily in fuel cell companies, plans to set up electrolysis units emissions that now come from industry. In of energy and also produces carbon dioxide, hydrogen? technology, is the world leader in hydrogen in the North Sea with 10 gigawatts of capacity steelmaking, hydrogen could replace the leading some to call this gray hydrogen, in refuelling stations, while South Korea is building by 2035. European’s Airbus SE is working on coal that’s now used not only for heat but to contrast to green. Blue hydrogen is the name The European Union has set the most ambitious fuelling and other infrastructure in six cities designs for hydrogen-powered aircraft. Gulf Times Sunday, June 20, 2021 3 BUSINESS

Iran’s new president faces huge economic challenges as US sanctions stay in place

Bloomberg remaining weeks in off ice, but has also said he out of the nuclear deal in May 2018, triggering a Islamic Republic. The drop in oil revenue and trade partner after the nuclear deal came into Tehran doesn’t believe it should be a central concern major slump in the rial. productivity in the sector and the scarcity of eff ect in 2016. But those plans came to an for the country. The government of President Hassan Rouhani foreign currency damaged economic growth. abrupt halt after sanctions were reinstated and With or without better ties with the world, Raisi tried to control money markets using a fixed Prior to Trump’s sanctions, the International Iran’s imports from the EU were down 80% by President-elect Ebrahim Raisi has vowed faces huge challenges as tough US sanctions exchange rate, but the policy backfired and Monetary Fund had expected Iran’s GDP to grow the last quarter of 2020. to improve Iran’s economy and raise living remain in place and Iran’s banks are isolated worsened the rout, leaving millions of ordinary by about 4% in 2019, but instead it shrank by In his campaign, Raisi emphasised building standards for families by focusing on the from much of the global economy. families struggling to make ends meet. more than 6%. trade ties and export markets with regional country’s domestic resources, trade ties with Below are three charts that show the scale of Spending power has dramatically declined as The European Union, which is leading allies and didn’t address the future possibility regional allies, and strengthening industrial Iran’s hardships and the key economic problems spiralling inflation and a much weaker currency negotiations in Vienna to revive the nuclear that Iran could restore agreements with foreign output. confronting Raisi. have battered incomes. deal, was one of Iran’s biggest trade partners companies that left the Islamic Republic after He’s said he’ll preserve the nuclear deal that Iran’s economy contracted sharply after The US eff ectively embargoed sales of Iranian before US sanctions were reimposed. sanctions were reimposed in 2018. Hardliners world powers are rushing to rescue during former US president Donald Trump reimposed crude oil by threatening other countries with Rouhani’s government was keen for the bloc to often advocate stronger ties with China and moderate President Hassan Rouhani’s sanctions on the country and pulled Washington sanctions if they purchased energy from the resume its position as the country’s top foreign Russia rather than with Europe.

Iranians ride their bicycles around the artificial Chitgar lake in Tehran (file). Prior to Trump’s sanctions, the International Monetary Fund had expected Iran’s GDP to grow by about 4% in 2019, but instead it shrank by more than 6%. Egypt holds rates to guard Aramco closes $12bn pipeline deal with China and UAE backing against global price surge Bloomberg Riyadh

Bloomberg Cairo hina’s Silk Road Fund and Hassana Investment Co, Ccontrolled by the Saudi gypt has left interest rates unchanged Arabian government, joined a for a fi fth straight meeting, seeking to group investing $12.4bn in Saudi Eguard against a possible surge in infl a- Aramco’s oil pipelines. tion caused by the spike in global commod- The consortium, led by US ity prices. fi rm EIG Global Energy Partners The central bank held the benchmark LLC, has now closed a deal to ac- deposit rate at 8.25% and the lending rate quire a 49% equity stake in Ara- An oil tanker is being loaded at Saudi Aramco’s Ras Tanura oil at 9.25%, the Monetary Policy Committee mco Oil Pipelines Co, a new sub- refinery and oil terminal (file). Aramco may look to raise money from said Thursday in a statement. All but one of sidiary, according to an e-mailed a similarly structured deal for its natural gas pipelines as part of a 10 economists surveyed by Bloomberg pre- statement. The group includes plan to sell non-core assets, people familiar with the matter have told dicted the move. Abu Dhabi sovereign wealth Bloomberg. The decision extends Egypt’s pause in fund Mubadala Investment Co monetary easing that began in December, and Samsung Asset Manage- oil transported through Ara- pipelines as part of a plan to sell after authorities cut a combined 400 basis ment. Abu Dhabi is the capital mco’s crude pipeline network. non-core assets, people famil- points throughout 2020 to tackle the pan- of the United Arab Emirates and, Aramco, the world’s biggest oil iar with the matter have told demic’s impact. Now the concern is that a along with Saudi Arabia, a key producer, will retain ownership Bloomberg. The funds would rocketing global food-import bill will accel- member of the Organization of of the other 51% of the shares. help the company maintain a erate Egyptian infl ation, putting pressure Petroleum Exporting Countries. Aramco may look to raise $75bn annual dividend, almost on consumers and trimming the country’s The subsidiary will have rights money from a similarly struc- all of which goes to the govern- highly competitive real-interest rate. to 25 years of tariff payments for tured deal for its natural gas ment. Consumer costs in urban parts of the North African nation already rose at their April crude exports slip to 10-month low fastest pace this year in May, growing an an- A woman carries bread as she leaves a bakery in Cairo (file). Consumer costs in urban nual 4.8% compared with 4.1% the month parts of Egypt already rose at their fastest pace this year in May, growing an annual 4.8% Saudi Arabia’s April crude oil exports fell to their publishes them on its website. Opec and its before. compared with 4.1% the month before. Egypt, a major wheat importer, could feel a broader lowest level since June 2020, off icial data showed allies agreed to extend most oil output cuts into Egypt, a major wheat importer, could feel impact this summer, according to analysts. on Thursday, reports Reuters. April but Saudi Arabia said it would extend its a broader impact this summer, according to Crude exports from the world’s top exporter voluntary oil output cut of 1mn bpd, and would analysts. Goldman Sachs Group Inc predicts that’s the highest of more than 50 econo- cording to Bloomberg Barclays indexes. slipped to 5.408mn barrels per day (bpd) from decide in following months when to gradually infl ation will spike at close to 6% in August mies tracked by Bloomberg. Some analysts see a chance of the cen- 5.427mn bpd in March, while crude output edged phase it out. if the government increases domestic fuel That ranking has kept the country’s lo- tral bank resuming easing in the fourth lower to 8.134mn bpd in April from 8.138mn bpd Goldman Sachs said in a research note this week prices to refl ect a global oil rally. That would cal debt attractive to foreign investors while quarter. But Mohamed Abu Basha, head of the previous month, data showed. it expected the kingdom’s oil production to rise be within authorities’ target range of 5%- tourism, a main source of foreign currency, macroeconomic research at EFG Hermes, Monthly export figures are provided by Riyadh by about 500,000 bpd to 10mn bpd by the end of 9% by the end of 2022. awaits a full recovery. Egypt’s local-curren- says such a step may not happen until 2022, and other members of the Organization of the 2021. Saudi’s domestic refinery crude throughput Leaving the benchmark untouched means cy bonds have gained 5% this year – the best “given how alarming the infl ationary risks Petroleum Exporting Countries (Opec) to the fell to 2.295mn bpd, while crude stocks rose to Egypt will maintain a real interest rate – the performer in emerging markets after debt are” and recent rate hikes in other emerging Joint Organizations Data Initiative (JODI), which 134.085mn barrels in April. diff erence between policy and infl ation – issued by Argentina and South Africa, ac- markets such as Russia, Brazil and Ukraine. Gulf Times 4 Sunday, June 20, 2021 BUSINESS

‘Witching’ sparks Investors eye pockets of value in volume bursts following near-record Europe markets market lull Bloomberg be a focus again. Astra and peer Roche London Holding AG are among equities that are Bloomberg “cheap compared to their prospects of New York growth,” Luc Filip, head of investments ith European stocks only at Syz Private Banking, said in an inter- just off record-highs, inves- view. The Stoxx 600 Health Care Index In a week when even a hawkish Wtors are having to look hard- only just regained pre-pandemic levels, Federal Reserve failed to shake er than ever to fi nd pockets of value. trailing the broader gauge’s advance of the equity-market lull, Friday Companies that can absorb an infl ation about 4%. brought some fireworks. spike are in hot demand, while many More broadly, health care may con- Stock transactions spiked think so-called value stocks are still tinue to benefi t from the resumption amid a quarterly event known cheap relative to growth, even after a of elective procedures that were held as triple witching, when options huge rally. up by the pandemic, along with easing and futures on indexes and Others see upside potential in lag- concerns around changes to US pricing equities expire. Almost 15bn gard sectors like energy and health care, regulation due to the Democrats’ nar- shares changed hands on US while the UK is a focus for many follow- row control of Congress, according to exchanges, about 40% above ing a period of underperformance ver- Piergaetano Iaccarino, head of equity the three-month average, while sus its European counterparts. solutions at Amundi. the benchmark slipped 1.3%, the A 13% advance in the Stoxx 600 In- Bargain Britain: While the UK’s most in more than five weeks. dex so far this year has raised questions vaccine rollout success has boosted its While the robust volume over how much of an expected post- equities market, predictions of a quick off ers a window of trading pandemic recovery is already priced in. economic rebound and higher interest liquidity, it can also make it hard But with European fi rms set for a strong rates have also pushed up the value of to tell whether a stock’s move is earnings rebound and the region’s the pound. That’s cut the local-cur- driven by adjustments related stocks still trading at a steep discount rency revenue from exports, leaving to option expiration or by a to US peers and off ering attractive divi- Britain’s stocks underperforming their change in business fundamen- dend yields, the foundations for further European counterparts. The FTSE 100 tals, according to Matt Tuttle, gains are in place. Identifying areas that Index is up just 8.6% this year com- chief executive off icer at Tuttle have yet to fully refl ect that potential pared with the 15% gain of the Euro Capital Management LLC. will be key. Stoxx 50. “When you get one of these “European valuations, while expen- While underperformance appears to events, you get noises around sive, are still more attractive than the be purely driven by foreign exchange, share movements,” Tuttle said US,” Seema Shah, chief global strategist Alain Zeitouni, head of multi-asset, by phone. “It messes up the at Principal Global Investors, said by EMEA at Russell Investments, says the information that we’re seeing.” email. “For investors who are interested UK remains “one of the most attractive The quarterly expiration, in the value trade, Europe is the place to equity markets worldwide.” once called “quadruple witch- focus given its very signifi cant weight- A visitor enters the Euronext Paris stock exchange in France. With European stocks only just off record-highs, investors are UK stocks off er some of the world’s ing,” usually coincides with a ing of value.” having to look harder than ever to find pockets of value. highest dividend yields and the market rebalancing of benchmarks Here are some of the areas where in- can benefi t from the nation’s economic such as the S&P 500, sparking vestors are looking for opportunities: have underperformed the rally in more tile Group, citing the consumer sector fore the year end, people start trav- recovery. single-day volumes that rank Price cushions: Infl ation, or rather, economically sensitive cyclicals. While as well as travel and leisure. elling, that the oil price could cer- Europe: Meanwhile, Europe itself among the highest of the year. expected infl ation, has been the theme banks, autos and construction have Linen servicing fi rm Elis SA is a spe- tainly have a spike,” said Alan Custis, may be seen as a pocket of value by According to an estimate from of the year so far. Companies that have outperformed this year on reopening cifi c stock that may fall into that cat- head of UK equities at Lazard Asset some. The Stoxx 600 Index has outper- Howard Silverblatt, senior index a suffi cient buff er to absorb higher bets, other value segments have lagged egory, he said. Elis shares have risen Management. Oil stocks could there- formed the S&P 500 this year, with the analyst at S&P, the rebalance costs could fare best as the recovery behind including insurance and energy, 16% year-to-date, about in line with fore start to look “incredibly cheap,” region coming back into favor among in the index alone could force progresses. and parts of personal care. the market. given the potential for capital to be investors, but some see further gains $30bn of stock trades. Guy Foster, chief strategist at Brewin “While it may seem as if value stocks Crude versus miners: Miners have returned to shareholders, Custis said ahead. Of particular interest were Dolphin, says he likes inventory dis- have had a strong six months, they have been among the stars of the stocks in an interview. “We continue to promote Europe as trillion dollars of options tied to tributors that have a proven ability to merely begun to mend the devastating rally as optimism over an economic re- Beyond vaccines: The pandemic a market poised to benefi t from higher benchmarks like the S&P 500, pass on the costs of their inventory to performance they have delivered to in- bound, particularly in China, spurred has made companies like AstraZeneca earnings growth, driven by the re- whose expiration Goldman customers. He cited Zara owner Inditex vestors in recent years,” James Inglis- demand for base metals like copper Plc, Pfi zer Inc and Moderna Inc house- opening and the region’s pro-cyclical Sachs Group Inc and Nomura SA, whose shares have risen 17% year- Jones, manager of Liontrust European that are used to make everything from hold names, thanks to their vaccine ef- sector weighting,” Grace Peters, EMEA Securities say may open the to-date, and US-focused construction Growth Fund, said by e-mail. door fi ttings to electric wiring. Energy forts. But pre-Covid-19, it was all about head of investment strategy at JPMor- door for turmoil. supplier Ferguson Plc, up 12%. Investors may look for fi rms that shares, on the other hand, may still of- oncology: Astra, for example, spent gan Private Bank, said by e-mail. “We How the dynamics work is a Value still value: So-called value, have beefed up their profi t margins via fer catch-up potential. many years transforming itself into a fi nd attractive entry opportunities in complicated process that the or cheaper, stocks is another pocket cost cutting, said James Sym, head of “There’s a real risk that if we all cancer treatment powerhouse. European mining, construction, semi- average investor may find it where investors see more upside as they European equities at River & Mercan- start flying again at some point be- As the crisis eases, oncology could conductors and fi nancials.” hard to grasp. But in the eyes of Charlie McElligott, a cross-asset strategist at Nomura, the selling of options linked to volatility has created a “long gamma” condition where options dealers Fund managers renew love for tech stocks as interest rates ease – who typically need to hedge their positions by buying or sell- ing the underlying stocks – tend Bloomberg The resilience underscores the con- Inc, which trades at 51 times projected is being bought by Advanced Micro De- chief executive offi cer Jamie Dimon to go against the prevailing New York viction among fund managers with 2021 sales, and DocuSign Inc, the elec- vices Inc in an all-stock deal. said this week he’s preparing for more market trend. long-term time horizons that the pros- tronic signature company priced at 26 Old guard, dividend-paying technol- infl ation and higher interest rates. Before Friday, the market pects for tech’s growth stocks remain times estimated sales, are both up more ogy companies – which outperformed Hedge-fund manager Paul Tudor Jones was stuck in an eerie calm. o much for that rotation into val- bright as the re-opening of the U.S. than 50% since the middle of May. this year amid a rotation into value told CNBC if he were on the investment Measured by the 20-day volatil- ue. Technology stocks are back economy continues to gain steam. The prevailing belief on Wall Street stocks – have lost some of their lustre committee of a pension fund, he would ity, the S&P 500’s price swings Son investors’ shopping lists once These companies “have strong busi- continues to be that the spike in infl a- recently. Database software company “have as many infl ation hedges on as I dwindled to levels not seen again, regardless of their valuations. ness models and the tailwind of meg- tion will be brief. Oracle Corp, which boasts a 1.7% divi- possibly could.” since the start of 2020. Just a month ago, the shares of faster- atrends from the pandemic that have A recent Bank of America survey of dend yield, tumbled this week after a Despite the recent gains for fast- The technical backdrop is growing tech companies were being only gotten stronger,” said Saira Malik, fund managers found that nearly three- disappointing earnings report. It’s now growers, many tech stocks remain perhaps why equities held pummelled amid fears that hot infl a- chief investment offi cer for global eq- quarters don’t expect elevated infl ation down 10% from a June 8 record. More cheaper than they were earlier in the steady in the face of the Fed’s tion readings would push interest rates uities at Nuveen, which has $1.2tn in to be long lasting. broadly, the Russell 1000 Value Index year thanks to improving profi ts. hawkish surprise earlier this higher. assets under management. “That’s why That is alleviating concern that ris- has lost nearly 5% in two weeks. The average price-to-earnings ra- week. While consumer prices did indeed they demand a premium.” ing interest rates would kill demand for Companies like HP Inc. are still ben- tio in the Nasdaq 100 stands at 37, “‘Equities stable on hawkish jump, interest rates actually have fallen The Fed’s acknowledgment this week tech stocks that have priced in a lot of efi ting from higher demand for per- down from a high of more than 40 in Fed guidance’ is the wrong read as investors bet that the infl ation surge of risks posed by infl ation and the sig- optimism about growth in the distant sonal computers. Still, in the long run, February. here,” McElligott wrote in a note will be short lived. That’s made expen- nal that it’s prepared to raise rates ear- future. growth at many of these more-mature For Nuveen’s Malik, there are still to clients. “Equities are stable sive but promising companies like soft- lier than expected did little to dampen “We’re clearly in a time frame where companies will cool, according to Dan- bargains to be found in higher valuation for the same reason they’ve ware makers attractive again. enthusiasm. human beings are getting paid more but iel Morgan, a senior portfolio manager stocks and she expects earnings growth been chopping for weeks: A Goldman Sachs basket of software The Nasdaq 100 Index rose to a I don’t believe that’s going to spiral up- with Synovus Trust Co. He said he’s will continue to fuel gains. She likes markets continue choking on stocks that trade for at least eight times record the day after the Fed meeting wards out of control,” said Kim Forrest, been adding to positions in companies software makers such as Salesforce. an oversupply of gamma from sales is at the highest in three months with an advance of 1.3%, though it gave chief investment offi cer at Bokeh Capi- like software-maker Adobe Inc that com and HubSpot Inc. volume sellers!” after a rally of 27% since May 13. back some of those gains on Friday. tal Partners. are poised to expand at a faster clip and “Software companies are still very Similarly, Goldman strate- Megacap favourites like Facebook Some of the stocks with the highest Forrest isn’t changing the makeup of generate higher profi ts over the long leveraged to the re-opening as com- gists including Rocky Fishman Inc, Alphabet Inc and Microsoft Corp valuations have rallied the most over her portfolio due to infl ation and likes term. panies are looking for ways to leverage blamed the long gamma posi- are back near records after gains over the past month. For example, infra- semiconductor makers like Micron Of course, not everyone is blase economic growth,” she said. “We would tioning for the dormancy. the same span. structure software company Cloudfl are Technology Inc and Xilinx Inc, which about infl ation. JPMorgan Chase & Co not count out software.” Jane Street, DRW traders make billions as virus hit markets

Bloomberg 67%, respectively, to about $1.5bn and for instance, Goldman Sachs Group Inc founder, Don Wilson, started his career in the New York $750mn, people familiar with the matter reported its highest level of fixed-income Chicago Mercantile Exchange’s eurodollar said. Jane Street and DRW didn’t respond trading revenue in nine years. trading pits before founding his eponymous to requests for comment. Founded in 2000, Jane Street transacts firm in 1992. Wilson owns between 25% and Proprietary trading shops are notoriously This adds to evidence that pandemic- on exchanges in the US, Europe and Asia, 50% of the firm, according to Securities and secretive, so when markets went topsy- induced volatility was a boon to traders and trades directly with big institutions. Exchange Commission filings. turvy in 2020, it was almost impossible to across a broad range of assets, building It’s one of a select group of firms that can DRW now counts more than 1,100 know how successful many firms were. It on public comments from big Wall Street create new shares of ETFs, working with employees with off ices in London, turns out: Very. banks. In reports, credit raters have lauded the companies that issue them. Amsterdam and Austin, Texas, and has Financial results from some of the the pandemic performance of certain prop “They’re one of the best at determin- expanded beyond trading into real estate niche’s key players are quietly making the traders such as Jane Street, without speci- ing and helping to provide liquidity for and venture capital. rounds on Wall Street as the companies fying figures. Earlier this year, preliminary fixed-income ETFs around the world,” said DRW was also an early entrant to the seek loans to fund their operations. They results from Citadel Securities also trickled Larry Tabb, an analyst at Bloomberg Intel- cryptocurrency space, setting up a divi- show extraordinary gains amid last year’s out because it was seeking a loan, show- ligence. “They have a good idea of how to sion to focus on the asset class in 2014. pandemic turmoil. ing preliminary earnings of $4.1bn in 2020 value fairly illiquid products.” Bitcoin prices more than quadrupled last Jane Street Group LLC is among them. on revenue of $6.7bn, more than doubling Jane Street was started by a group of year, driven by a surge in retail interest The major player in bond exchange-traded its 2019 results. alums from another secretive trading firm, and increased institutional acceptance. funds saw revenue jump 54% to $10.6bn “Prop firms did great in 2020 and Susquehanna International Group. Today, Jane Street is also active in cryptocur- during the year ended in March 2021, likely will in early 2021, just because of around 1,000 people work at Jane Street, rency markets. In an interview with while Ebitda, an earnings measure impor- all the flow,” said Paul Rowady, director according to LinkedIn, meaning the firm’s Bloomberg earlier this year, Wilson said tant in loans, surged 59% to $7.8bn, ac- of research for Alphacution Research 2020 earnings were almost $8mn per that rather than retreating as volatility cording to lenders who’ve been briefed on Conservatory LLC, a market-structure employee. While all trading firms use ad- increased, DRW had increased its market the New York-based company’s financials. research and advisory company. “Even if vanced algorithms and financial modelling share in products like Treasury futures. Those are smaller numbers than those in terms of trading strategies, they’re very to compete, Jane Street’s technology is Moody’s analyst Fadi Massih said that at the largest Wall Street banks, but not diff erent firms.” viewed as some of the finest in its industry. while last year created more money-mak- that far behind. That makes Jane Street Bond trading went wild in 2020 as “They are innovative, they’re light, ing opportunities for DRW and Jane Street, one of the most dominant forces in all of Covid-19 caused convulsions in the hard-to-price bonds, including Jane Street, exchanges, proved to be a lucrative niche. they’re one of the fiercest competitors,” there was potential for things to go wrong trading. economy and financial markets, prompt- which is broadly active in ETFs but especial- Jane Street was in good company in said Rowady. for them in the volatile conditions. At futures, options and cryptocurren- ing an unprecedented Federal Reserve ly so in ones holding bonds. Those funds, seizing this opportunity: Major banks saw Chicago-based DRW, on the other hand, “2020 was a key stress test, and these cies trader DRW Holdings LLC, revenue response. The mayhem created a big which track the results of corporate and fixed-income trading revenue leap early is among the largest players in derivatives companies weathered the storm very and Ebitda surged in 2020 by 50% and opportunity for firms with experience in government-issued debt but trade on stock last year. In the second quarter of 2020, markets like interest rates and equities. Its well,” he said. Gulf Times 10 Sunday, June 20, 2021 BUSINESS

QSE Index and Volume he Qatar Stock Exchange Qatar (IQCD) was the top value trad- (QSE) index increased by ed stock during the week with total T20.32 points, or 0.19% dur- traded value of QR525.4mn. ing the week, to close at 10,743.45. Trading volume declined by 17.9% Market capitalisation went down to 730.8mn shares versus 890.4mn marginally by 0.04% to QR623.9bn shares in the prior trading week. The compared to QR624.1bn at the end number of transactions declined by of the previous week. 4.4% to 44,603 transactions versus Of the 48 listed companies, 17 46,638 transactions in the prior week. ended the week higher, 29 declined, Salam International Investment Lim- Weekly Market Report while 2 remained unchanged. Qa- ited (SIIS) was the top volume traded tar General Insurance and Reinsur- stock during the week with total trad- ance Company (QGRI) was the best ed volume of 98.6mn shares. performing stock for the week, with Foreign institutions ended the a gain of 5.6%. On the other hand, week with net buying of QR73mn Source: Qatar Exchange (QE) QLM Life and Medical Insurance Co versus net selling of QR6mn in the (QLMI) was the worst performing prior week. Qatari institutions re- stock with a decline of 3.7%. mained negative with net selling Weekly Index Performance Industries Qatar (IQCD), Qatar In- of QR104mn versus net selling of ternational Islamic Bank (QIIK), Qa- QR45mn in the week before. For- Source: Qatar Exchange (QE) tar Electricity and Water Co. (QEWS) eign retail investors ended the were the primary contributors to week with net buying of QR7mn the weekly index increase. IQCD and versus net buying of QR12mn in the QIIK added 60.5 and 8.6 points to the prior week. Qatari retail investors index. QEWS added an additional 7.7 remained bullish with net buying points to the index. of QR24mn versus net buying of Trading value during the week QR38mn the week before. increased by 15.9% to reach So far YTD (as of Wednesday clos- QR2,294.8mn versus QR1,980.5mn ing), foreigners were net buyers of in the prior trading week. Industries $663.0mn. Source: Bloomberg

DISCLAIMER Source: Qatar Exchange (QE) This report expresses the views and opinions of QNB Financial Services Co WLL (QNBFS) at a given time only. It is not an off er, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. QNBFS accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. Gulf Times and QNBFS hereby disclaim any responsibility or any direct or indirect claim resulting from using this report.

Qatar Stock Exchange Top Five Gainers Top Five Decliners

Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million)

Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million)

Source: Bloomberg

Technical analysis of the QSE index or the fourth week in a row, the QSE remain to have a positive outlook on the index closed flat versus the week index. The general index remains in an Fbefore, and gained only 0.19%; it uptrend while testing its major moving closed at the 10,743.45 level. Based on averages. Our projected resistance level the current level of the index and its remains at the 11,000 points and the activity over the past few weeks, we support level at the 10,000 points.

Definitions of key terms used in technical analysis

SI (Relative Strength Index) indica- above it, it gives a positive indication. tor – RSI is a momentum oscilla- The reverse is the situation for a bear- Rtor that measures the speed and ish trend. change of price movements. The RSI Candlestick chart – A candlestick chart oscillates between 0 to 100. The index is is a price chart that displays the high, low, deemed to be overbought once the RSI open, and close for a security. The ‘body’ approaches the 70 level, indicating that of the chart is portion between the open a correction is likely. On the other hand, and close price, while the high and low if the RSI approaches 30, it is an indica- intraday movements form the ‘shadow’. tion that the index may be getting over- The candlestick may represent any time sold and therefore likely to bounce back. frame. We use a one-day candlestick MACD (Moving Average Convergence chart (every candlestick represents one Divergence) indicator – The indicator trading day) in our analysis. consists of the MACD line and a signal Doji candlestick pattern – A Doji can- line. The divergence or the convergence dlestick is formed when a security’s of the MACD line with the signal line in- open and close are practically equal. The dicates the strength in the momentum pattern indicates indecisiveness, and during the uptrend or downtrend, as the based on preceding price actions and fu- case may be. When the MACD crosses ture confirmation, may indicate a bullish the signal line from below and trades or bearish trend reversal. Gulf Times Sunday, June 20, 2021 11 BUSINESS Commodities bulls nurse their wounds but fi ght’s not over yet

Bloomberg commodities bull run has passed its elevated or go higher going forward.” of weeks traders grappled with the It’s a China story on the demand side, as they’re making money again. All the London peak or is just taking a breather. Copper: The year-long rally to a record murky outlook for demand in top with the nation’s huge imports sending more reason then, that the focus is so Either way, the direction may not be in May was sparked by surging Chinese consumer China. crop and hog futures soaring in the intense on when the market will see broad based, with each market having demand, but there are signs orders Both bulls and bears are keeping a past year. Major traders like Cargill Inc. Iranian supply return as talks with the The commodities boom has taken a its own individual levers pushing and from manufacturers are starting to close eye on China’s simultaneous goals and Viterra say crop markets are in a US continue. knock this month, and while there are pulling. wane. to contain the inflationary pressures “mini-supercycle” that could last half Gold: Bullion is more susceptible to many reasons to still bet on a so-called Copper traders need to balance a Bulls are confident that the rest of stemming from high commodity a decade, driven by increased biofuel Federal Reserve actions than perhaps supercycle, it’s unlikely to be plain short-term cooling in China with the world will pick up the slack as prices and to make its vast steel sector demand and continued Chinese buying. any other commodity. It tumbled to sailing. long-term green-energy prospects. renewable energy and electric-vehicle greener. The country’s steel output is Oil: Focus is already turning to how the lowest since early May after the US Vast amounts of stimulus, economies Oil’s dip could be limited by falling investment creates a step-change in still on track to smash another record sharply demand will recover over the central bank signalled monetary policy reopening from the pandemic and stockpiles and supply concerns, iron demand in Europe and North America. this year, which might prompt further summer. While there are signs the US is tightening could start earlier than strong Chinese demand have driven a ore is being whipsawed by Chinese Still, it could be a while before that actions from authorities to restrict leading the way as western economies expected and the dollar jumped. surge in raw-material prices this year, policies, while gold will largely be at spending makes its way to factory production and whipsaw iron ore yet reopen, the spread of the delta variant Although the precious metal is often some to record highs. the mercy of when Federal Reserve order books, and softer demand in the again. of the coronavirus, first identified in bought as a hedge against inflation, the Yet they’ve slumped in the past two tapering starts. meantime could embolden bears who Agriculture: Showers across the US India, is raising renewed concern about Fed signalled this week that higher- weeks – with some wiping out gains “I can still see a lot of inflationary say current high prices aren’t justified corn belt and uncertainty over biofuel the path for consumption in parts of than-expected inflation would not be for the year – on a more hawkish US pressures in the supply chain, and the by fundamentals. policy have helped send crop markets Asia. allowed to persist, opening up the door monetary policy tone, China’s bid to reality is that it’s going up,” said Michael Iron ore: It might be particularly hard tumbling lately, but much more rain will For now, it looks as though the market for faster stimulus tapering. cool inflation pressures and better Widmer, head of metals research to predict the trajectory for iron ore, be needed to ensure bumper harvests is going to need extra supply in the That weighs on the appeal of non- weather for crops. at Bank of America Merrill Lynch in the most volatile commodity right now. in one of the world’s top suppliers. second half of the year. The Ooec+ interest bearing gold. UBS Group AG While that’s blown away some of the London. “From a commodity-price It surged to a record, collapsed into More than a third of America’s corn and group is yet to confirm plans for forecasts prices at $1,600 an ounce speculative froth from the market, perspective, I can see the structural a bear market and then rebounded soybean area is suff ering from drought, production beyond July, while US shale by year-end, compared with about the big question is whether the latest argument still for prices to stay back into a bull market within a matter after record-breaking heatwaves. producers continue to preach discipline $1,780 now.

Buyout fi rm Infl ation risks may mulls takeover of supermarket warrant liftoff in chain Morrisons

Bloomberg rupted by the growth in on- London line grocery shopping and the German discounters Aldi and Lidl. Britain’s third layton Dubilier & Rice largest grocer, Asda, was LLC is weighing a bid recently taken over by con- 2022: Fed’s Bullard C for UK grocery chain sortium of TDR Capital and Wm Morrison Supermarkets the Issa brothers in a £6.5bn Bloomberg Plc, according to people fa- deal. New York miliar with the matter. Walmart, the US, retailer, The American buyout firm which owned Asda since is in the early stages of eval- 1999 retains a minority nfl ation risks may warrant the Fed- uating a takeover bid, said stake. eral Reserve beginning raising interest the people, who asked not The Asda transaction Irates next year, St Louis Fed President to be identified because dis- came two years after regu- James Bullard said, backing an even-ear- cussions are private. lators blocked a previous lier liftoff than pencilled in by many of his CD&R is interested in ex- attempt by Walmart to sell colleagues. panding in the grocery sec- the business to the UK gro- “I put us starting in late 2022,” Bullard tor, the people said, adding cer’s bigger rival, Sainsbury. said on Friday during a TV interview on that no final decision has Elsewhere in Europe, Carre- CNBC, referring to interest-rate projec- been made and considera- four also faced a short-lived tions published on Wednesday by the tions may not lead to a for- takeover attempt by Cana- US central bank after a two-day policy mal offer. da’s Alimentation Couche- meeting. Representatives for CD&R Tard Inc. “But you do have to have the idea that and Wm Morrison declined That effort was torpedoed these are related to what the forecast is. to comment. by the French government So, my forecast said 3% infl ation in 2021 Private equity investors which took exception to one – core PCE infl ation – and 2.5% core PCE are seeking to capitalise on of the country’s biggest su- infl ation in 2022,” he said. the improving fortunes of permarkets falling into for- “If that’s what you think is going to leading supermarket chains eign hands. happen, then by the time you get to the after lockdowns triggered a Morrison for many years end of 2022, you’d already have two years surge in in-store and online was the laggard of the four of 2.5-3% infl ation.” grocery spending. big grocers in Britain, but Bullard’s remarks are the fi rst in pub- Morrison and competing in recent years has revived lic by a Fed offi cial since Chair Jerome UK supermarkets includ- under the leadership of chief Powell concluded his post-meeting press ing Tesco and Sainsbury’s executive officer Dave Potts. conference. appear to have weathered The grocer owns most of its The Fed on Wednesday published eco- James Bullard, president and chief executive off icer of the Federal Reserve Bank of St Louis. the reopening of restau- own supermarkets meaning nomic projections showing 13 of 18 par- rants well, suggesting that it has a very valuable prop- ticipants on the policy-setting Federal While Fed offi cials have largely main- rates at that point,” he said. Powell told cussion at this past meeting and now consumer habits may have erty portfolio and also owns Open Market Committee thought it would tained that the price pressures in recent the press conference that the commit- we’ll have a chance to have more in permanently shifted in their a number of abattoirs and probably be appropriate to begin raising months are associated with the reopen- tee didn’t discuss a liftoff date during its depth discussions coming ahead,” said favour. other manufacturing facili- interest rates from their current near-zero ing of the economy and will therefore be meeting and called such an assessment Bullard, noting that it was a compli- Sky News reported ear- ties as it makes a lot of the levels by the end of 2023. transitory, forecasts for infl ation published “highly premature.” cated debate and it would take “several lier that CD&R is evaluat- food it sells. That marked an increase from just alongside the rate predictions revealed that “The focus of the committee is the cur- meetings” to iron out the various com- ing a £5.5bn ($7.6bn) bid, The potential bid comes seven participants who thought such a many offi cials see a risk that the higher in- rent state of the economy. But in terms ponents involved. citing people familiar with at a challenging time for timeline for rate hikes would be appropri- fl ation will be somewhat persistent. of our tools, it’s about asset purchases. These include deciding the timing and the matter who it didn’t the Morrison’s board, which ate back in March, the last time updated “This is very much a debate about That’s what we’re thinking about. Liftoff pace of the taper, whether it should be identify. The buyout firm suffered a stinging rebuke projections were published. what’s going to happen in 2022. Is the in- is well into the future,” Powell said. placed on an automatic pilot or be adjust- has approached banks about from shareholders over ex- In the new forecasts, seven participants fl ation that we’re seeing in 2021 going to The FOMC maintained monthly pur- ed as economic conditions shift, as well as financing the potential bid ecutive pay last week. pencilled in a 2022 liftoff – up from four in persist into 2022 or not?” Bullard said. chases of $80bn in Treasuries and $40bn the balance between Treasuries and MBS. and made a preliminary Just over 70% of the in- March. Bullard sits on the FOMC but does For those on the FOMC who don’t in mortgage-backed securities purchases, “I’m leaning a little bit toward the idea approach to the retailer’s vestors voted against the not vote on committee decisions this year. currently anticipate beginning to raise and Powell said that the debate on scaling that maybe we don’t need to be in mort- board, Sky reported. proposal – in one of the The updated forecasts followed two rates next year, “they’re most likely as- those back was getting underway. gage backed securities with a booming Britain’s grocery sector largest protest votes ever months of Labor Department reports on sociated with a forecast that says that Powell repeatedly declined to say when housing market,” Bullard said. has been beset with merger against a company’s pay re- consumer prices that showed hotter- the infl ation will go back down below 2% the taper would start but promised that “I would be a little bit concerned about activity in the last few years port – but the awards will than-expected infl ationary pressures in during that year, and then the commit- markets would be given ample warning. feeding into the housing froth that seems amid a highly competitive still be made because the April and May. tee wouldn’t be oriented toward raising “The chair officially opened the dis- to be developing.” market that has been dis- vote wasn’t binding. Passive-investing world turns upside down as active funds boom

Bloomberg “It’s almost impossible to start (ARKX) and BlackRock Inc’s $1.4bn The fund posted one of the best de- New York a small to medium hedge fund as a US Carbon Transition Readiness ETF buts in the industry’s history in March single manager,” said Nathan Miller, (LCTU), which set a record in April and currently has more than $243mn portfolio manager for New York- with the industry’s biggest-ever in assets. ot so long ago, actively man- based Emles Advisors. “So we thought launch. Hanging on: As the new-arrival aged ETFs were rare. Now why go launch another hedge fund? Roundhill Investments’ MVP ETF, count surges, the number of exiting Nthey’re being created at twice Let’s launch an actively managed which is focused on companies that funds has plunged. the rate of their passive rivals. In- ETF.” own or support professional sports So far this year, only 19 ETFs have spired by the success of Cathie Wood’s The Emles Alpha Opportunities teams, Defi ance’s Hotel Airline and liquidated or delisted, according to ARK Innovation ETF (ticker ARKK), ETF (EOPS), which packages fast- Cruise ETF (CRUZ) and Bitwise Asset data compiled by Bloomberg. That exchange-traded fund issuers have money strategies in an exchange- Management’s Crypto Industry Inno- compares with 104 in the fi rst half of this year launched 115 active products traded wrapper, is one of the more re- vators ETF (BITQ) were among other 2020, and 79 during the same period versus just 51 passive funds, according cent active arrivals. It listed less than thematic debuts. in 2019. to data compiled by Bloomberg. two weeks ago and already has about For many, the aim is to tap the boom Much of that endurance can be at- That’s the fi rst time active launches $66mn in assets. in retail investing that has seen indi- tributed to the bull market. Stocks have ever outstripped passive, and it’s Major rule changes in late 2019 viduals grow to comprise more than have been repeatedly breaking records powering the $6.5tn ETF market to- paved the way for funds like EOPS. 20% of equity trading participation, and cash has been fl owing readily ward its busiest 12 months on record. It became easier to deploy stock- according to Bloomberg Intelligence. through the market. It’s a comeback of sorts for stock picking strategies in an ETF, and “That’s really been a catalyst to help About 67% of US-listed ETFs have pickers, and in an unlikely corner of new structures evolved that would get some of these thematic ETFs off taken in cash so far in 2021, according Wall Street. Most active managers fail help keep exact investment strate- the ground quickly,” said Ben Slavin, to Bloomberg Intelligence – meaning to beat their benchmarks net of fees – gies hidden. head of ETFs for BNY Mellon Asset issuers are less likely to pull the plug. a fact that has seen passive ETFs lure Active funds remain a small slice of Servicing. “There’s generally increased opti- roughly $3tn over the past decade, the industry, and their assets make up Although not technically classifi ed mism as we come out of the pandem- while active funds gained only about just 3.4% of the overall ETF market. as a thematic fund, the retail-friend- ic, and people are more excited and $200bn. But that’s up from 2.7% a year ago. ly VanEck Vectors Social Sentiment feeling more optimistic about their But a combination of new rules and And in a sign the trend could con- Thematic boom: Firms are also sports betting. A record 22 thematic ETF (BUZZ) made waves earlier this business development,” said Amrita the enduring popularity of ETFs with tinue, several large Wall Street fi rms ramping up their thematic off erings, funds have launched since the start year when it launched with an en- Nandakumar, president of Vident In- investors means a slow but major shift who long held-out against ETFs are which invest according to compelling of the year, including Wood’s $619 dorsement from Barstool Sports Inc. vestment Advisory. “Fundraising is is underway. now embracing them. narratives like autonomous driving or million ARK Space Exploration ETF founder Dave Portnoy. easier in a bull market.” Sunday, June 20, 2021 GULF TIMES BUSINESS

WEEKLY ENERGY MARKET REVIEW Oil gains as Opec predicts slowdown in US output growth www.abhafoundation.org but essential issues remain to be about $11.70 per metric million British importer Petronet LNG sought a cargo heatwaves in California and Texas negotiated, the top Iranian negotiator thermal units (mmBtu), down 10 cents for June delivery while Indian Oil Corp that boosted local power and gas use said on Thursday. Iran and six world from the previous week, they said. is seeking a cargo for August delivery. and prices. Front-month gas futures Oil powers have been negotiating in The price for cargoes delivered in Kuwait Petroleum Corp bought a fell 3.8 cents, or 1.2%, to settle at $3.22 Oil futures rose on Friday, reversing Vienna, since April, to work out steps July was estimated to be about $11.90 commissioning cargo for its new Al per mmBtu, their lowest close since early losses, and are set for a fourth for both sides to take. Traders are per mmBtu, down 20 cents from the Zour terminal from Qatar Petroleum June 10. For the week, the front-month week of gains after Opec sources said concerned that the return of Iranian oil previous week, they added. Still, LNG at about $12.10 to $12.30 per mmBtu. was down over 2% after gaining more the producer group expected limited to the market could boost global crude prices have more than doubled since In sell tenders, Egypt’s natural gas than 13% during the prior three weeks. US oil output growth this year, despite supplies and depress prices. late February. Demand from China company (EGAS) sold a cargo for Furthermore, with European and Asian rising prices. Brent crude futures continued to be firm with Guangzhou late July loading at about $10.20 per gas prices both over $10 per mmBtu, rose 0.6% to settle at $73.51 a barrel, Gas Gas seeking a cargo for delivery in mmBtu, while Oman LNG off ered a analysts said they expect buyers while US West Texas Intermediate Spot liquefied natural gas (LNG) prices July and Shenzhen Energy buying cargo for delivery into northeast Asia around the world to keep purchasing all (WTI) crude rose 0.8% to $71.64 a in Asia slipped last week, but remained a cargo for delivery in July at about in August, traders said. Meanwhile, the LNG the United States can produce. barrel. Both benchmarks were headed at double digits as demand was firm $11.70 to $11.80 per mmBtu. India’s Chevron Corp plans to restart Train 3 for a weekly gain of about 1.1%. On globally from the power generation gas consumption is also recovering at the Gorgon LNG plant in Australia in  This article was supplied by the Wednesday, Brent settled at its highest sector, according to trade sources. The after states started to ease restrictions the “coming weeks”, after it was shut week low on Friday on forecasts for Abdullah bin Hamad Al-Attiyah price since April 2019 and WTI closed average LNG price for August delivery in the wake of a drop in coronavirus for maintenance and weld inspections. slightly less demand than previously International Foundation for Energy at its highest since October 2018. Gains into Northeast Asia was estimated at infections. The country’s top gas US natural gas futures slipped to a one- expected next week following and Sustainable Development. were capped, however, by lingering concerns about the pandemic and a stronger US dollar, which makes oil more expensive in other currencies. Off icials from Opec’s Economic Commission Board (ECB) and external presenters attended a meeting on Tuesday focused on US output, while Opec heard from more forecasters on the outlook for 2021 and 2022 at a separate meeting on Thursday. Although there was general agreement on limited US supply growth this year, an industry source said 2022’s forecasts ranged from growth of 500,000 bpd to 1.3mn bpd. US shale oil output usually responds rapidly to price signals, but US producers are still focusing on capital discipline and investor returns, rather than expanding supply, the ECB heard. The lack of a large shale rebound could make it easier for Opec and its allies, known as Opec+, to manage the market. Meanwhile, indirect talks between Tehran and Washington on reviving the 2015 Iran nuclear deal have come closer than ever to an agreement,

Qatar’s Industrial ‘Shift’ in consumer demand Production Index rises 1.7% expected to drive next phase y-on-y in April QNA chemical products” by 6.3%, Doha “manufacture of beverages” by 4.0%, and “manufacture of basic metals” by 2.5%. of global recovery, says QNB Qatar’s Industrial Production In- However, an increase record- dex (IPI) in April 2021 amounted ed in “manufacture of refined to 99.8 points, decreased petroleum products” by 15.6%, he shift in consumer demand from by 0.9% compared to the and “manufacture of rubber manufactured goods to domestic previous month (March 2021), and plastics products” by 0.8%. Tservices is expected to drive the while increased by 1.7%, when On the other hand, in terms of next phase of the recovery in the US and compared to the corresponding annual change, comparing to Euro area, according to QNB. month in 2020. April 2020, a decrease of 1.4% The Purchasing Managers Index (PMI) The Industrial Production was recorded, aff ected by the is a good and timely indicator of the global Index consists of three main following groups: “Manufacture economic recovery. The PMI is a focused components: “Mining” with a of food products” by 17.4%, survey of businesses and is published relative importance of 83.6%, “manufacture of beverages” within just a few weeks of the data being “Manufacturing” with a relative by 11.7%, and “manufacture of gathered. importance of 15.2%, “Electric- chemicals and chemical prod- Whereas, GDP is a much broader meas- ity” with a relative importance ucts” by 9.5%. ure of economic activity, which is often of 0.7%, and finally “Water” with However, an increase published months later. a relative importance of 0.5%. recorded in “manufacture of “Fortunately, the global composite PMI The Planning and Statistics cement and other non-metallic is a good indicator of global GDP growth, Authority data showed that mineral products” by 41.4%, so it is reassuring that it rose further to the “Mining” index witnessed “manufacture of basic metals” 58.4 in May, its highest level for over 15 a decrease by 0.4% compared by 23.8%, “manufacture of rub- years,” QNB said in an economic com- to the previous month (March ber and plastics products” by mentary. 2021), as a result of the decrease 16.2%, “manufacture of refined However, this global composite picture in the quantities of “crude oil petroleum products” by 8.7%. masks important diff erences between the pleasant and eff ective. Activities such as with demand. Firms would normally re- to become seriously ill from it. Indeed the petroleum and natural gas” by There was no production in manufacturing and services sectors. This home delivery services, cooking at home, spond to stronger demand by increasing number of new infections and hospitali- 0.4%, while “other mining and April 2020 for printing and re- week QNB has unpacked the global com- home-movies, video games, and video supply capacity, but much of the surge in sations are now at a low enough level for quarrying” showed an increase production of recorded media, posite PMI by comparing the recovery in conferencing have all stimulated demand consumer demand for goods is expected the US and Euro area countries to contin- by 0.4%. due to the procedure have been these two sectors in the US and Euro area. for electronics and home appliances. to soften as social distancing measures are ue to ease social distancing measures, al- When compared to the corre- taken to prevent the spread out There has clearly been a strengthening Further, concerns about spreading the eased further. lowing the reopening of their economies. sponding month of the previous of Covid-19. recovery in the manufacturing sector in virus discouraged people from using mass They have therefore held back on some Second, the return of warmer weather year (April 2020), the IPI of Min- For “Electricity” sector, an both the US and Euro area. This has been transport, in favour of travelling in private investments. will make it easier for people in the US and ing increased by 2.6 %. increase of 4.9% was noticed driven by two factors. vehicles, which stimulated demand for “We expect activity in the manufactur- Euro area to spend time outside where the The index of “Manufactur- in the production of “Electric- First, supply recovered rapidly from new cars, used cars and automotive com- ing to continue to expand, but at a slower virus spreads much less easily. ing” showed a decrease by ity” between April 2021 and the the acute phase of the pandemic in April ponents, QNB noted. pace, which implies the manufacturing Third, after so much time at home there 3.2% compared to the previous previous month (March 2021), 2020. Factories, freight transportation It said the strength of the recovery in PMIs will ease back closer to, but remain is pent-up demand to spend more time month (March 2021). The groups while no change noticed when and logistics were relatively easily able the manufacturing sector has supported above, 50. and money on domestic services, such as showed a decrease include: comparing with April 2020. to implement effective social distanc- economic activity throughout the second “In contrast, we expect the services eating out in restaurants, outdoor activi- Printing and reproduction of re- A decrease of 7.5% was no- ing, enabling a quick return to close to half of last year and the fi rst half of 2021. sector to drive the next phase of the re- ties and entertainment. corded media by 14.1%, followed ticed in the production of ‘Wa- full capacity. Indeed, the surge in demand has been so covery as an ever greater proportion of the The strength of the recovery in the US by “manufacture of cement ter’’ between April 2021 and the Second, lockdowns and stay-at-home strong that supply chains, freight trans- population in the US and, after a slower is clear with the services sector PMI in- and other non-metallic mineral previous month (March 2021). measures stimulated a temporary surge portation and production of key compo- start, the Euro area are vaccinated. We see creasing to over 70. Whilst the beginning products” by 10.6%, “manufac- Comparing with corresponding in demand for consumer goods and elec- nents became constrained. three key drivers,” QNB noted. of the recovery is observable in the Euro ture of food products” by 7.9%, month (April 2020), a decrease tronic equipment, which helped make For example, production of older com- First, vaccinated people are less likely area with the services sector PMI rising “manufacture of chemicals and of 31.4% was recorded. living and working-from-home more puter chips used in cars cannot keep up to spread the virus and much less likely above 55 in May. Doha Bank honoured with ‘humanitarian award’ at Trilateral Global Summit

The 2021 second edition of the Carmona, 5th President of Trinidad and merchandise trade volume is expected ‘Trilateral Global Summit’ through Tobago. to increase by 8% in 2021 after falling international NGO ‘World Humanitarian Dr R Seetharaman participated in 5.3% in 2020. The WTO has served as Drive’ (WHD) was hosted virtually the session “Strengthening global ‘constructed focal point’ during the by its founder, Dr Abdul Basit Syed, a economy”, which was moderated pandemic by helping countries co- renowned British Indian social activist by Robert Marsh, secretary general ordinate their policy responses. Free and entrepreneur. UPF, UK. He gave insight on global trade between countries could reduce The focus of the recent summit was scenario and said, “According to World international conflict because trade ‘Trade 4 Peace’. Bank June 2021, the Global economy forges connections between nations It focused on promoting the expected to grow by 5.6% in 2021. and gives each country an incentive to integration of the global economy and He spoke on Trade 4 Peace and said, avoid war with its trading partners.” businesses as a pathway for peace, by “Trade 4 Peace (T4P) is an imperative On recent G7 measures on sustainable inviting global leaders, royalties and initiation of WHD (World Humanitarian development, he said, “G7 will protect prominent speakers from more than 25 Drive) to build trade harmony by the planet by supporting a green countries. breaking down silos of trade to revolution that creates jobs, cuts At the event Dr R Seetharaman, innovate opportunities for establishing emissions and seeks to limit the rise in CEO, Doha Bank was given the interdisciplinary approaches on global temperatures to 1.5 degrees. ‘Global humanitarian award’ for his leveraging the multilateral trading Seetharaman highlighted how fair trade Participants at the 2021 second edition of the ‘Trilateral Global Summit’. contributions as a leader in persistently system and security to develop a fair impacts Sustainable Development serving the world and putting humanity trade cycle to strengthen our world Goals. the farmers for their crops and pay decent income they can invest in the Gender leadership schools and seed first through his noble deeds. economy and peace. He said, “The best way to eliminate a fair wage. Small Scale farmers help farms and futures. Fair trade standards funding empower women to become He received the award from Anthony On global trade, he said, “World poverty is to pay decent income to feed the world, but only if they get a should prohibit discrimination. entrepreneurs and managers.”