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Saturday, November 12, 2016 Safar 12, 1438 AH MARKETS SHRUG OFF POLL RESULT: Page 12 In wake of Trump win, GULF TIMES focus may drift back to BUSINESS Fed and infl ation Saudi sets aside $26.7bn to settle Opec points to even bigger oil delayed private sector payments

Reuters surplus in ’17 as output jumps Riyadh Saudi Arabia’s government has set Opec output as much as 1.14mn aside 100bn riyals ($26.7bn) to pay bpd above new supply target; debts that it owes to private sector points to 950,000 bpd 2017 companies after payment delays that surplus, more than IEA; Opec have lasted months, an off icial docu- notes volatile currencies after ment seen by Reuters shows. Trump win, economy forecasts To help curb a huge budget deficit steady; gap between two sets caused by low oil prices, the govern- of output data highlights risk to ment of the world’s largest oil exporter Opec deal has slashed spending and reduced or suspended payments that it owes to Reuters construction firms, medical establish- London ments and even some of the foreign consultants who helped to design its economic reforms. But the payment pec reported an increase in its delays have seriously damaged some oil production in October to a companies, slowing the economy, and Orecord high led by members earlier this week the government said hoping to be exempt from the pro- it would make all delayed payments by ducer group’s attempt to curb supply, the end of this year. weighing on prices and pointing to a Authorities have not disclosed the to- larger global surplus next year. tal size of the unpaid bills, but private The Organisation of the Petro- analysts have estimated they may leum Exporting Countries pumped total tens of billions of dollars. 33.64mn barrels per day (bpd) last The document, labelled urgent and month, according to fi gures Opec issued by the finance ministry for collects from secondary sources, up transmission to all government agen- 240,000 bpd from September, Opec cies, says a royal decree has mandated said in a monthly report. the finance minister “to take the nec- The Opec fi gures point to a bigger essary procedures to pay all delayed surplus than those of the Interna- payments by the end of the current tional Energy Agency and underline fiscal year”. Opec’s challenge in restraining sup- “Payments should not exceed 100bn plies. riyals,” the document adds, saying the Oil fell below $45 a barrel after the money will come from budget sur- report was released, having reached a pluses accumulated in previous years. 2016 high near $54 after Opec’s deal It does not say whether the government was announced in September. expects actually to pay out all of the Opec made little mention of the maximum allocation of 100bn riyals. surprise election of Donald Trump as Government agencies should register the next US president, beyond noting payment orders at a finance ministry that currency markets had seen “sig- website created for this purpose within nifi cant” volatility. three weeks, the document says. It left unchanged its 2017 forecasts Finance Minister Mohammed al- for US and world economic growth. Jadaan reiterated on Thursday that “More data over the coming months the government intended to make all will provide further insight to allow a delayed payments to the private sec- more detailed review of the US eco- tor “as soon as possible”, estimating nomic situation, particularly after the these payments could total a “signifi- most recent elections,” Opec said in cant amount of billions” of dollars. the report. The government’s original budget plan To speed up a rebalancing of the for 2016 envisaged a deficit of 326bn market, Opec agreed at a meeting in A view of the Opec headquarters in Vienna. The Opec’s latest figures point to a bigger surplus than those of the IEA, and underline Opec’s challenge in restraining supplies. riyals, after a record deficit of 367bn Algeria on September 28 to cut supply riyals in 2015. to between 32.50mn bpd and 33.0mn According to Opec’s report, Octo- This is a legacy of old disputes the accuracy of the secondary-source year, although supply growth in 2017 Local analysts have been forecast- bpd. ber’s supply boost mostly came from over how much countries were really numbers, told Opec its October is put at 230,000 bpd, little changed ing this year’s deficit, expected to be The group hopes to fi nalise further Libya, Nigeria and Iraq – members pumping. output was steady at 4.77mn bpd – from last month. With demand for announced late next month along with details at a meeting on November 30. that have sought to be exempt from Iran told Opec it produced 3.92mn 210,000mn bpd more than the sec- Opec crude in 2017 expected to aver- the 2017 budget plan, will be smaller The latest fi gures could complicate cuts due to confl ict. Iran, seeking an bpd in October, while the secondary ondary sources estimate. age 32.69mn bpd, the report indicates than the original projection by a large Opec talks on how to share out the exemption as output was held back sources put output at 3.69mn bpd. That aside, Opec’s report is the there will now be an average surplus margin. cuts. by Western sanctions, also pumped From Iran’s point of view, joining latest to show output is hitting new of 950,000 bpd if Opec keeps output A 100bn riyal payout by the end of this Opec experts meet to discuss this more. the Opec supply cut deal from the peaks. steady. year would exceed the expectations on November 25 and on November Opec uses two sets of fi gures to higher fi gure would be more favour- The October fi gure is the highest Last month’s report pointed to an of many analysts and could result in 28 will meet offi cials from non-Opec monitor its output – fi gures provid- able. since at least 2008, according to a Re- 800,000 bpd surplus. a larger deficit than they have been countries, Opec Secretary General ed by each country, and secondary Opec issued a revised report yester- uters review of past Opec reports. The 2017 surplus implied by the forecasting, perhaps around 250bn Mohammed Barkindo said on Mon- sources which include industry me- day to add Iraq’s fi gure. In the report, Opec trimmed its IEA in its latest report on Thursday is riyals or more. day. dia. Baghdad, which has questioned forecast of non-Opec supply this closer to 500,000 bpd. Once critical, Gulf executives want to do business with Trump

Gulf businesses off ers welcoming most important client base for Boeing Trump on a construction project that ber 11 terrorist attack to sue the govern- referring to its 1984 purchase of the Open Skies trade agreement with those message to Trump; some were and a number of US defence fi rms. was halted in 2008, wrote an op-ed in ment of Saudi Arabia, whose citizens New York jewellery fi rm. countries. upset over anti-Muslim comments The Gulf’s sovereign wealth funds a local newspaper in August last year accounted for 15 of the 19 hijackers. Gulf sovereign wealth funds have Some Gulf airline executives had on campaign trail; Gulf airlines wait also have hundreds of billions of dollars backing Trump for the presidency. Some Gulf fi rms reassessed their invested huge sums of cash into the previously expressed concerns that for his view on trade disagreement of US investments. But Habtoor backtracked after links with Trump at the end of last year: American economy. Trump could favour US interests at the Nevertheless, Arab business fi gures Trump’s Muslim comments and said Damac temporarily removed references Abu Dhabi Investment Authority expense of the rest of the global avia- Reuters were angry about Trump’s campaign Gulf money would quit the US if he to his name from advertising, and re- has the largest geographical weighting tion industry. Dubai calls for Muslims to be banned from en- won. gional retailer Landmark Group pulled for its estimated-$792bn portfolio in “It’s so important for our business tering the United States, following the Speaking to Arabian Business on a Trump-branded line of homeware North America at between 35 and 50%. that the liberalisation that spreads murder of 14 people in San Bernardino, Wednesday, Habtoor insisted Trump’s from its Lifestyle chain of department It owns signifi cant amounts of real through from the Clinton era of poli- ulf executives who were upset by California, allegedly by a Muslim cou- comments on Muslims “were for the stores. estate for example, including a number tics on global trade continues,” Emir- Donald Trump’s campaign trail ple in December 2015. election only” and he would now tone But a spokeswoman for Damac told of high-end hotels in major US cities. ates President Tim Clark told reporters Gcomments about Muslims took Saudi Prince Alwaleed bin Talal, head down his rhetoric, something that Reuters on Thursday that Trump- The Qatar Investment Authority said in Dubai on October 18, adding Trump a conciliatory tone following his elec- of investment fi rm Kingdom Holding would open the door to re-establishing linked projects still carried his name. in September 2015 it would help the “may go about the introduction of tion victory and said they were open for which has stakes in US fi rms includ- good relations with the Gulf. Landmark Group declined to com- Gulf state invest $35bn in the US over more constraints on global trade”. business with the United States. ing Citigroup and Twitter, called him a Political ties between the United ment. fi ve years. A spokeswoman for Emirates and In Dubai, boards displaying the pres- “disgrace not only to the GOP but to all States and the Gulf, in particular Saudi Mohammed al-Ardhi, executive Spokesmen for the QIA and ADIA spokesman for Etihad Airways declined ident-elect’s name and his support for America”. Arabia, have been strained by President chairman of alternative investment declined to comment on the election. to comment on the election result. a Damac project to build a gated com- However, the billionaire was among Barack Obama’s pursuit of a nuclear fi rm Investcorp, which has billions of Gulf airlines are waiting to see where However, Qatar Airways’ Group chief munity, spa and Trump-branded golf those wishing him well on Wednes- deal with Iran, which has led to opin- dollars in US real estate and other in- Trump stands on a disagreement with executive Akbar al-Baker, who voiced course can be seen from a road on the day, tweeting: “President elect @re- ions that America has abandoned its vestments, was complementary about US carriers. support for Trump even after his com- edge of the city. alDonaldTrump whatever the past long-term allies in favour of their re- Trump. A group including American Airlines ments about Muslims, welcomed his Gulf business links with Trump and diff erences, America has spoken, con- gional rival. “Investcorp knows that Mr Trump is and United Airlines say United Arab victory. “Our relationship goes way other US fi rms are strong. gratulations & best wishes for your Relations were also damaged by the fair because we competed against him Emirates-based Emirates and Etihad back, and I was one of the fi rst to com- The United States imported $32.4bn presidency.” US Congress’s approval in September on the Tiff any acquisition and he did Airways, and Qatar Airways, have un- mend Donald on his well-deserved new of goods including oil from the six Gulf Another billionaire businessman, of legislation which paves the way for not mind us winning that deal,” Ardhi fairly benefi ted from state subsidies, leadership position,” he said in a state- countries in 2015 and the region is the Khalaf al-Habtoor, who worked with families of the victims of the Septem- told an investor event on Wednesday, and have called for a review of the ment to Reuters. Gulf Times 2 Saturday, November 12, 2016 BUSINESS

Move is on to remove Mistry from Tata Motors and Tata Steel boards

IANS and Nusli Wadia from the two boards. The Tata Steel results – which were statement reposing faith in Mistry. and appointed Ishaat Hussain as the new manner in which he sought the support of Mumbai In one notice, the voting right of Tata declared after the closing bell – bore the Bhat is managing director of Titan chairman of the board of directors of the independent directors of Indian Hotels to Sons in Tata Motors was mentioned as signatures of Mistry as chairman. Company and had reported the second company with immediate eff ect. continue as its chairman. 26.51%, but in the other, no figure was The company’s standalone net quarter results to the stakeholders on Tata Sons, the holding company of the “Mistry conveniently forgets that he The battle over the control of Mumbai given for Tata Steel. profit stood at Rs2,495.60mn for the November 4. He is also on the board of Tata Group companies, removed Mistry, was appointed as the chairman of the House, the headquarters of the Tata Wadia of Mumbai Dyeing – on the quarter ended September 30, against several other Tata Group companies. 48, as its chairman last month and rein- Tata operating companies by virtue of Group, yesterday mainly involved two boards of both Tata Motors and Tata Steel Rs5,754.30mn for the previous quarter On Thursday, Tata Consultancy stated Ratan Tata in an interim capacity. and following his position as the chairman crown jewels of the $103bn empire – Tata as independent director – is considered and a loss of Rs2,884.80mn in the cor- Services (TCS) had also issued a special The holding arm for the group said of Tata Sons,” Tata Sons said in a nine- Motors and Tata Steel. close to Mistry. responding second quarter of last year. notice under Section 169 (read with Mistry had lost the confidence of the page statement issued on Thursday. The first salvo was fired when stock The counters of the two group Earlier in the day, Tata Chemicals Section 115) of the Companies Act, 2013, board due to several factors and that the However, following Tata Sons’ state- markets were informed that Tata Motors companies were nervous. In the midst of said Bhaskar Bhat, non-executive and and made a requisition for an extraordi- trustees were increasingly concerned ment, the independent directors of Tata and Tata Steel are in receipt of notices extremely volatile trading, the shares of non-independent director, has resigned nary general meeting of shareholders to with the growing trust deficit. Chemicals on Thursday had reposed their from Tata Sons, the holding company, Tata Motors crashed Rs26.75, or 5.01%, at from the board of the company. Bhat later consider Mistry’s removal as a director Following this, on Thursday, Tata Sons faith in chairman Mistry, while taking up seeking an extraordinary general meeting Rs507.40, while that of Tata Steel fell Rs10, said his views were not considered by of TCS. the ousted chairman should resign from the second quarter results for the current of shareholders for the removal of Mistry or 2.29% at Rs426.85. the independent directors while issuing a TCS replaced Mistry as its chairman all group companies and deplored the financial year.

Malaysia’s economy Modi: India aims to become grows 4.3%

AFP Kuala Lumpur most open economy in world

alaysia’s economy ex- IANS panded at a better- Tokyo Mthan-forecast pace in the third quarter, snapping fi ve straight quarters of slowing, the ooing Japanese investors, In- central bank said yesterday. dian Prime Minister Narendra Bank Negara said gross do- WModi yesterday said that sta- mestic product grew 4.3% in ble, predictable and transparent regula- July-September, faster than the tions are redefi ning the nature of doing 4% predicted in a Bloomberg business in India as the country aims to News poll as private domestic be the most open economy in the world. consumption off set weak gov- “All of the economic reforms that ernment spending. India is pursuing point in to the new However, it warned of fur- direction. My resolve is to make India ther economic headwinds ahead. the most open economy in the world. “Overall, while domestic condi- The impact of our eff orts is being felt tions remain resilient, uncertain- and recognised globally,” Modi said at ties in the external environment a business luncheon here, organised may pose downside risks to Ma- jointly by the Confederation of Indian laysia’s growth prospects,” the Industry (CII) and Japan business fed- central bank said. Energy-export- eration, Keidanren. ing Malaysia has the third-largest India’s Foreign Direct Investment economy in Southeast Asia, but (FDI) equity infl ows have gone up 52% has been grappling with falling oil in the last two years. Japan stands as the prices and weak overseas demand. fourth largest source of FDI into India. Growth in the second quarter According to the World Investment of this year was 4%, the slowest Report of 2015, India is fi rst among the since 2009. The country has also top 10 FDI destinations of the world. been rocked by a massive fi nancial Creating an enabling environment scandal centring on allegations for business and attracting investments that billions of dollars were sto- remains top priority for India, with e- len from a state investment fund governance and new legislation regard- overseen by Prime Minister Najib ing Goods and Services Tax (GST) set to Razak, who denies wrongdoing. simplify and ease the nature of doing In July, Malaysia unexpect- business, Modi said. edly cut interest rates for the He said ‘Made in India’ and ‘Made by fi rst time in seven years to help Japan’ combination could work towards Indian Prime Minister Narendra Modi and Japan’s Prime Minister Shinzo Abe with the members of India-Japan Business Leaders’ Forum in Tokyo yesterday. spur growth. In a 2017 budget infrastructure building. unveiled last month, Najib an- “There are futuristic infrastructure ed opportunities for the Japanese in- ue. Lower labour costs, large domestic ments and that Indian laws have been setting up commercial courts and com- nounced new cash assistance for projects of the second generation, in- dustry,” the Indian Prime Minister said. market and macro-economic stability amended for facilitating foreign inves- mercial divisions to ensure speedy dis- the poor, civil-servant pay rises cluding dedicated freight and industrial In 2015, the Indian economy grew combine to make India a very attractive tors. posal of commercial matters,” he said. to help stoke consumption, and corridors, high-speed railways, smart faster than other major economies. The investment destination, he said. “The Insolvency and Bankruptcy The arbitration proceedings will plans for more infrastructure cities, coastal zones and Metro rail World Bank and the International Mon- Modi said his government is looking Code passed recently will make it eas- now become faster as the law has been projects. projects. All of these off er unprecedent- etary Fund assess this trend will contin- at a greater infl ux of Japanese invest- ier for investors to make an exit. We are amended, he added. Bank of Korea keeps rates on hold BoJ seen holding off

Reuters fl ight, saying rising bond yields and bond largest, is on course for a recovery, but there Seoul outfl ows in October had partly been due to are headwinds. Ongoing restructuring of book-closing towards the end of the year. the country’s shipping and shipbuilding in- on easing; Trump All but one of 27 analysts polled by Reu- dustries, for example, is expected to result outh Korea’s central bank stayed its ters had forecast the central bank would in severe job losses. hand for a fi fth straight month yes- keep its reference 7-day repurchase agree- Trump’s policies have fed fears of a surge Sterday, as widely anticipated, amid an ment rate on hold, with one dissenter see- in global trade protectionism, which would upswell of global uncertainty and a political ing a cut. Lee kept the door open to possi- likely hit major Korean exporters such as win adds uncertainty scandal involving President Park Geun-hye ble further easing, saying the bank still has Samsung Electronics Co Ltd and Hyundai that may mean trouble ahead for the econ- room to move, although current monetary Motor Co particularly hard. Reuters fore expanding its already mas- Japanese government bond yield omy. policy is accommodative. This would lend a further blow to al- Tokyo sive stimulus. target. A shock win by Donald Trump in the US There was also little need to raise interest ready-battered exports, struggling to re- Five said a move at the April Six economists said the BoJ presidential election earlier this week poses rates just because the won was weakening, cover after falling for most of the past two meeting was likely, while three would increase its purchases of long-term risks the Bank of Korea (BoK) will he said. “Given growing uncertainties, the years as global demand waned. he Bank of Japan is expect- nominated the January meeting. exchange-traded funds/real es- need to monitor carefully. bank may start to talk about rate reduc- Like Park, a slim majority of analysts ed to wait until the middle One each picked the meetings tate investment trusts and four Its governor, Lee Ju-yeol, stressed the tions only early next year,” Park Hyuk-soo, polled by Reuters see another rate cut in Tof next year before adopt- in December and March. responded that it would boost its bank needs more time to assess what poli- a fi xed-income analyst at Daishin Economic early 2017, but some acknowledge further ing further stimulus measures, The majority of economists buying of commercial paper and cies were likely once Trump took offi ce, Research Institute said after the governor’s easing alone may not solve the sluggish although Donald Trump’s elec- responded to the survey before corporate bonds. although he saw the US Federal Reserve news conference ended. growth problem. tion as US president adds uncer- the result of the US presidential This question allowed multiple as likely to stay on course to hike rates in Park said the bank’s assessment of the “We reiterate our view that the BoK still tainty to the economic outlook, a election. answers. December.“If Trump’s campaign promises economy seemed to be worsening, noting has space to deliver a 25 basis point rate cut Reuters poll found yesterday. “But there is a chance that The consensus from the wider are turned into policy they will hurt trade,” that the BoK said in a statement yesterday in Q1 2017,” ANZ economists said in a note.” Nearly 90% of economists worries over the outlook will poll found the BoJ will hold the Lee said, although he noted that not all that domestic demand seems to have dete- (But) unless more structural reforms are surveyed in the past week said grow because the formal an- -0.1% interest rate it imposes on Trump’s promises were “bad”. riorated. enacted, we acknowledge that the marginal the BoJ’s next policy action nouncement of policies under a some excess bank reserves steady Lee brushed aside talk of potential capital South Korea’s economy, Asia’s fourth- eff ect of a rate cut will continue to decline.” would be to adopt further easing new administration in the US will and will also maintain its 10-year measures. come later, so we need to monitor JGB yield target of around 0% it closely,” Kato added. throughout next year. If the Fed hikes rates next Trump’s key policies are seen The BoJ is seen keeping its month, it will likely boost likely to include enhanced infra- annual pace of increase in the the US dollar and dent the structure spending, in turn lead- amount of outstanding of JGB Japanese currency which ing to higher infl ation, but there holdings at about ¥80tn, the poll traded around 106.60 per are concerns over trade policy showed, but some analysts say dollar yesterday, close and geopolitical alliances. the central bank could lower the to 3-1/2-month low, aft er In the near term, much will amount to around ¥70tn-¥75tn rising as high as 101.19 on depend on the US Federal Re- next year and may even drop a Wednesday serve, which is expected to pro- reference to the target amount in ceed with a rate hike in December its policy statement. The remainder said an un- despite the shock Trump win, a Asked whether the govern- winding of the central bank’s separate Reuters poll showed on ment should announce an ex- ultra-easy monetary policy was Wednesday. tra budget for this fi scal year to likely. If the Fed hikes next month, March, 19 out of 26 economists “Sharp spikes in the yen it will likely boost the US dollar said it should not, but some of against the dollar are unlikely to and dent the Japanese yen which those said the government was happen for a while as the Federal traded around 106.60 per dollar likely to do so. Seven analysts Reserve is seen raising rates as yesterday, close to 3-1/2-month in the poll said the government expected. low, after rising as high as 101.19 needed to spend more. This means the BoJ is expected on Wednesday as Trump’s vic- “Many countries including Ja- to stand pat,” said Izuru Kato, tory became more apparent. pan, the US, China and in Europe chief economist at Totan Re- In the poll, 19 economists said will possibly shift towards fi s- search. the central bank would cut its cal policy from monetary policy Fifteen of 25 economists who -0.1% interest rate further when as central banks are running out answered a separate timing it next decides to ease policy, and of steps to take,” said Nobuyasu question expected the BoJ to wait six predicted it would cut both Atago, chief economist at Okasan Lee: If Donald Trump’s campaign promises are turned into policy that will hurt trade. until the second half of 2017 be- the interest rate and the 10-year Securities. Gulf Times Saturday, November 12, 2016 3 BUSINESS

Brics ministers draw action plan for China’s new bank loans tie-up in ICT sector

IANS Bengaluru

The Brics Ministers of Communications, as the five-member fall sharply in October association of the emerging national economies, yesterday drew an action plan to institutionalise cooperation in infor- mation and communication technologies (ICT) arena. Reuters “The action plan envisages digital partnership to institu- Beijing tionalise cooperation in ICT through identifiable goals and objectives for developing knowledge societies in the group,” said a communique issued after the second meeting of the hinese banks extended 651.3bn yuan Brics Communications Ministers in this tech hub. ($95.56bn) in net new yuan loans in Briefing the media on the two-day meeting in which COctober, below expectations and fall- Communication Ministers of Brazil, Russia, India, China and ing sharply from September, as policymak- South Africa (Brics) participated, Union Minister of State for ers pledged to prevent asset bubbles in the Communications Manoj Sinha said the group had decided increasingly debt-fuelled economy. to take forward the theme of the Goa declaration at the 8th The People’s Bank of China has been keep- Brics summit in Panaji on October 15-16. ing policy accommodative to spur growth – “In accordance with the theme of the Goa declaration, as evident by record bank lending so far this the members have decided to adopt Building Responsive, year – but it faces an uphill battle to divert Inclusive and Collective Solutions (Brics) in the ICT arena,” money from the red-hot property market Sinha told reporters after the meeting. into the weak real economy. Endorsing the working group’s ICT development agenda “Credit growth slowed down as mortgage and the action plan, the meeting has decided to develop lending weakened, after the introduction of content in local languages and enhance digital skill sets for a series of real estate controlling polices,” participation in the digital economy. analysts at Haitong Securities said in a note. “We need to enhance the ICT research and development “Corporate fi nancing needs remain weak. (R&D) expenditure to develop multiple paths for innovation There are risks that credit may continue to and new technologies for value addition in exports and gen- shrink in the future.” erate employment for youth,” asserted Sinha, who chaired Analysts polled by Reuters had expected the summit as India heads the 8th summit this year. new lending to have fallen back to 700bn Asserting that joint eff orts in new mobile technologies yuan from September’s three-month high of off ered immense potential for the members to strengthen 1.22tn yuan. cooperation, Sinha said the world was characterised by an New bank loans totalled 10.8tn yuan in the increase in the volume of information flows, which can be fi rst 10 months of the year – an all-time high, observed in industry, commerce, finance, banking, health according to Reuters calculations based on and education and public administration. central bank data. “New technologies and applications through IoTs (Internet Lending has been driven heavily by ro- of Thins) and M2M (Machine to Machine) provide opportu- bust mortgage growth as the housing market nity for collaboration to drive programmes under various booms, with banks increasing their expo- sectors in line with the SDGs (Sustainable Development sure to the sector to off set a surge in non- Goals) and objectives of WSIS (World Summit of the Informa- performing loans in more sluggish parts of tion Society),” said Sinha. the economy. New household loans, mostly The ministers agreed to support openness of internet mortgages, fell to 433.1bn yuan in October Yuan banknotes are seen at a vendor’s cash box at a market in Beijing. Chinese banks extended 651.3bn yuan ($95.56bn) in net new yuan where businesses, citizens, and governments can innovate from 637bn yuan in September, central bank loans in October, below expectations and falling sharply from September, as policymakers pledged to prevent asset bubbles in the and develop services and applications to empower people data showed, suggesting demand for mort- increasingly debt-fuelled economy. and society. “We recognise that it is critical to develop trust gages is cooling after a spate of steps by local and security in the use of ICTs, services and applications to governments to restrict home purchases to China’s total social fi nancing (TSF), a it is not that low, so I think overall policy is 2006, the kind of surge that in other coun- enable their widespread use while protecting privacy and cool soaring prices. broad measure of credit and liquidity in the neutral. We can’t say there’s been tighten- tries has resulted in a fi nancial bust or sharp consumer rights,” the communique reiterated. The ratio of new household loans to total economy, fell sharply to 896.3bn yuan in Oc- ing,” said Ma Xiaoping, HSBC economist in economic slowdown, analysts say. Observing that the ICT framework had become a great new loans rose to 66.5% from 52% in Sep- tober from 1.72tn yuan in September. Beijing. M1 money supply, which includes cash facilitator and source of collaboration in connecting indi- tember, the data showed. TSF includes off -balance sheet forms of “There is still not a basis for tightening, as and short-term deposits, rose 23.9% in Oc- viduals, organisations and governments to translate ideas Highlighting underlying weakness in the fi nancing that exist outside the conventional the real economy is still weak. It is too early tober on-year versus September’s 24.7% and opportunities, the meeting recognised the role of ICT in broader economy, new medium- to long- bank lending system, such as initial public for tightening.” rise. improving the quality of life and governance for its citizens. term corporate loans fell sharply to 72.8bn off ers, loans from trust companies and bond China’s economy expanded at a steady A widening gap between M1 and M2 “We encourage joint eff orts toward promoting e-govern- yuan from 446.6bn yuan in September. sales. 6.7% in the third quarter and looks set to hit growth has fuelled concerns about a “liquid- ment systems among members and stress the catalytic role The central bank said this week that it will But broad M2 money supply (M2) grew Beijing’s full-year target, spurred by strong- ity trap” in the economy where companies of digital economy in all sectors, including health, education, maintain ample liquidity in the economy 11.6% from a year earlier, the strongest in er government spending and the property remain wary of investing regardless of how transport, commerce, entertainment and power,” added Sinha. while taking steps to prevent asset bubbles, four months and slightly above forecasts of frenzy that are adding to its growing pile of much stimulus policymakers pump into the Communication Ministers Andre Muller Borges of Brazil, adding that the balance between stabilising 11.4%. debt. system. The gap narrowed to 12.3 percent- Nikolay Nikiforov of Russia, Liu Lihua of China and Siyabonga growth and preventing bubbles has become “Liquidity in the interbank market has China’s overall debt has jumped to more age points in October from 13.2 percentage Cyprian Cwele of South Africa participated in the meeting. more challenging. tightened some, but looking at M2 growth than 250% of GDP from 150% at the end of points in September.

Indonesia expediting law revision to allow exports of concentrates Hong Kong’s economic Bloomberg Panjaitan said in an interview in Jakarta yesterday. Jakarta “There won’t be any problem if the law can be revised by January. We have to finish it because that’s the most elegant way.” Indonesia is expediting a revision to its mining Panjaitan reiterated that Indonesia is unlikely momentum cools in Q3 law that would allow exports of semi-processed to resume shipments of nickel ore and bauxite metals such as concentrates to continue, while because it has attracted investments in Reuters The economy grew a seasonally-adjusted fairs. Hong Kong’s benchmark index closed maintaining a ban on raw-ore shipments, said downstream metal-processing including in Hong Kong 0.6% in the third quarter, compared with a down 1.4% before the data yesterday, cap- Luhut Panjaitan, the coordinating minister for stainless and carbon steel. downwardly revised 1.5% in the June quar- ping a turbulent week in fi nancial markets in maritime aff airs . The Indonesian archipelago has abundant ter. Economists surveyed by Reuters had the wake of Donald Trump’s surprise presi- Companies that build smelters may be allowed to resources of copper, nickel and bauxite. The ong Kong’s economic growth slowed predicted growth of 0.3%. dential win at the US elections. continue shipments, and export volumes will be rules to control exports were introduced to in the third quarter from the second From a year earlier, the economy expand- The former British colony’s economy is assessed based on the pace of construction, said stop the mineral wealth disappearing overseas Hquarter as weak exports, sluggish ed 1.9% in the third quarter compared with now more vulnerable as it struggles with Panjaitan, who oversees sectors from mining to and to encourage investments in the domestic retail sales and falling tourist arrivals took 1.7% in the previous quarter and econo- weaker retail sales and a slump in cash-rich transport and energy. “We are thinking of allowing processing industry. The country was the top its toll on the former British colony. mists’ expectations of 1.6%. mainland Chinese streaming across the bor- them to export during construction,” he said. “If it supplier of nickel ore and bauxite to China before Though the government kept its full-year A marked slowdown in exports and weak- der on shopping sprees. takes three years, then only for those three years.” the moratorium. estimate for 2016 in the middle of its previ- er growth in private consumption and gov- Prospects for Hong Kong could be further Southeast Asia’s top economy is weighing While the Philippines ramped up nickel ore ous forecast range of between 1% and 2%, ernment spending combined to push down compounded by new US trade policies and changes to export rules after barring shipment production after the Indonesian ban, its mining underlying momentum slowed from the GDP in the third quarter. China’s economic performance at a time of unprocessed ores, such as nickel and bauxite, industry is now facing a raft of closures following June quarter. Hong Kong’s services sector has also been when exports are weak and economists are from 2014 and targeting a ban on ore concentrate an environmental audit that found shortcomings Looking ahead, the government expects in a prolonged slump with retail sales falling waiting to see the impact of property cool- shipments from January 2017. The government at operations across the nation. growth to remain on a modest track in the for the 19th straight month in September as ing measures imposed this month. had considered allowing exports of low-grade raw Nickel ore is used to produce nickel pig iron for near term due to a number of concerns, in- a strong local currency crimped business The government said it would raise stamp ore because the sales would fund local smelters, making stainless steel, while bauxite is turned into cluding the likely trend of rising interest activity and tourism. duties on home purchases to 15%, across the but dropped the plan because it could have alumina, the raw material for aluminium. rates in the United States and elevated geo- Slower economic growth could pile fur- board, eff ective November 5. threatened billions of dollars of investments in the Nickel rose as much as 3.4% to $11,930 a tonne on political risks elsewhere. ther pressure on Hong Kong leader Leung Some economists said the once vibrant domestic smelting industry. the London Metal Exchange yesterday, the highest “There is a need to stay alert to these risks Chun-ying ahead of an election next year city would continue to face pressure from “The law said that all of those products cannot since July 2015. The metal fell to a low of $7,550 in for their possible repercussions on the glo- and amid rising tensions with the central global economic uncertainty as well as in- be exported, and we don’t want to break the law,” February, the cheapest in more than a decade. bal fi nancial and economic situation,” it said government in China over concerns of in- creasing tensions with Beijing that could in a statement. creased meddling by Beijing in the city’s af- threaten stability and impede policymaking. Japan car makers shuffl e output, boost imports to meet US SUV demand

Reuters models to make up for the production In contrast, the balance of US ve- sales of its mainstay sedans such as the Tokyo shortfall, and Honda may do the same. hicle sales at each of Japan’s top three Sonata stagnate. “It takes time for manufacturing to automakers is roughly even, suggest- Both Honda and Toyota recently catch up to these shifts because auto- ing that while they are producing more cited a less competitive product mix as apan’s top automakers are shuffl ing makers are committing to changing vehicles, the model mix of their sales is a reason for trimming their respective their US product portfolios and re- their portfolio.It’s not something you lagging market trends. annual North American vehicle sales Jsorting to larger imports of popular can do quickly,” said Rebecca Lind- Honda is responding by expanding forecasts.Toyota will increase produc- models there as they scramble to meet land, senior analyst for automotive re- production capacity for its CR-V SUV tion capacity of its Tacoma pick-up booming demand for gas-guzzling search company Kelley Blue Book. model in the United States. truck at its plant in Mexico by more SUVs and trucks in the world’s No 2 Imports allow car makers to sell Another option is importing the CR- than 60,000 to an annual 160,000 by auto market. more cars in a region without raising V, along with the popular Civic, from 2018 while it is also looking to its up- Honda Motor Co, Japan’s third- local production capacity, but they Japan, a company spokeswoman said. coming C-HR crossover model to lift largest automaker, said it will begin also can increase foreign exchange “While maintaining our current sales in the segment. producing from early next year the risks.Historically low US gasoline overall capacity (in North America), In the meantime, total Japanese ex- Acura MDX SUV at its plant in East prices and cost-conscious consumers we’d like to also consider our produc- ports of Toyota’s popular RAV4 model to Liberty, Ohio, adding to production at seeking multi-tasking vehicles have tion options in Japan... to produce the United States rose 20% in January- its Alabama plant, which also makes boosted sales of SUVs, particularly more light trucks to respond to strong September from a year ago, even as the its Pilot SUV, Ridgeline pick-up truck smaller crossover models, and trucks, demand,” American Honda Motor Co model’s production at its plant in Can- and Odyssey minivan. denting demand for traditionally CEO Toshiaki Mikoshiba said. ada has increased by 3% over the same Honda, Toyota Motor Corp and Nis- sought-after passenger cars. The Japanese are not alone in trying period.Nissan has ramped up exports of san Motor Co are all trying to maxim- Currently, 59% of all new vehicles to adapt to the demand shifts. its Rogue crossover from Japan to North ise production effi ciency at their North sold in the US market are light trucks, South Korea’s Hyundai Motor Co America by 27% to 56,000 units in the A security agent guards a Honda Avancier SUV at a showroom in Tokyo. The Japanese American plants to squeeze out more versus 41% passenger cars, compared has been producing its Santa Fe Sport April-September period from a year ago, automaker said it will begin producing from early next year the Acura MDX SUV at its SUVs, but Toyota and Nissan have with 55% and 45%, respectively, a year model at its Alabama plant since June while it also exports a large number of plant in East Liberty, Ohio. been importing a large number of SUV ago, according to Autodata fi gures. to increase supply of the SUV while Rogues from South Korea. Gulf Times 4 Saturday, November 12, 2016 BUSINESS

China’s top SUV maker begins upscale climb with luxury brand

Bloomberg the same week as the opening of the helped propel the company to a 33% found diff icult to attract using existing ers are attempting to move upscale jointly developed with Volvo Cars. Beijing Guangzhou Auto Show, according to a sales surge last month and has posi- brands.” Great Wall’s H6, the most popular and shed a reputation for cheap rides. While Geely can tout its partnership statement from the Baoding, China- tioned Great Wall for a record year in SUV in China this year, starts at 88,800 Some startups are trying to leapfrog the with Volvo to win customers, Great Wall based company. The automaker said deliveries. yuan ($13,000), less than half the price of process altogether, with NextEV Inc and faces a tougher task trying to move up- Great Wall Motor Co said it will intro- it will release details about its model “It’s time for established local Chinese the VW Passat sedan. The automaker’s Beijing CH-Auto Technology Co both scale, according to Steve Man, a Hong duce a new premium brand to target lineup and marketing schedule when automakers to go upscale given that board secretary Xu Hui didn’t immedi- attempting to start sales with luxury Kong-based analyst with Bloomberg the high-end market, joining Zhejiang they’re finalised. they have the technology and product ately return a call seeking comment. sports cars before unveiling mass Intelligence. Geely Holding Group among Chinese Wei has built Great Wall into China’s reserves they didn’t have in the past,” Great Wall fell 1.9% to HK$7.19 in Hong market models. “It may be a taller order for Great automakers seeking to upgrade from biggest SUV maker by offering Chinese said Yale Zhang, a managing director at Kong yesterday, the lowest level since At Geely, billionaire founder Li Shufu Wall’s marketing team,” said Man. offering cheap, utilitarian cars. consumers spacious models with a researcher Autoforesight Shanghai Co. July 19, compared with the 1.3% decline last month ushered in a brand called “The automaker has yet to realize the The SUV maker led by billionaire higher ride and at cheaper prices than “With a new brand, Great Wall will be in the benchmark Hang Seng Index. Lynk & Co. The new marque, marketed potential of the Haval H8 and H9 SUVs, chairman Wei Jianjun plans to unveil its sedans made by foreign brands like able to market higher priced models to Like the Korean and Japanese car- as more premium than the namesake which have higher price points than its upscale WEY brand on November 16, Volkswagen and Buick. That strategy consumers that it would have otherwise makers before them, Chinese automak- Geely brand, will be built on technology popular H6.”

Vietnam economy will thrive Chinese shoppers spend even if TPP tanks, says billions on Singles’ Day minister AFP Kobe Bryant to pop rock band On- Shanghai eRepublic. Singer Katy Perry was also originally Reuters scheduled to perform but cancelled at Hanoi hinese shoppers unleashed a the last minute due to a family emer- record deluge of cash online for gency, she said on China’s Twitter-like CSingles Day yesterday, Alibaba Weibo. ietnam will stay competi- said, spending more than $13bn with Analysts said the event, which has tive and its economy will the e-commerce giant in the world’s gained more and more traction in the Vstill thrive if the Trans- biggest online shopping promotion. past few years, is key to Alibaba. Pacifi c Partnership (TPP) deal Singles’ Day – named for the repeat- The day’s turnover was only “a very collapses, its trade minister said, ed digit 1 in the date November 11 – was small fraction of its total annual sales”, as doubts hang over the future of created by Alibaba in 2009. independent e-commerce analyst Li a pact that was core to the Obama Now in just 24 hours it surpasses the Chengdong said, but was “a confi dence administration’s “pivot” to Asia. main US online spending spree, the fi ve index for the fi rm”. Vietnam’s manufacturing and days from Thanksgiving to Cyber Mon- “If they do well in this, it is a boost to exports-led economy is widely day. investors’ confi dence,” he told AFP. regarded as the biggest poten- Gross merchandise volume, Alibaba’s But sales growth may not match last tial benefi ciary of the TPP, but key measure of online sales, had over- year’s 60% rise, he warned, in the face the deal now looks on the rocks taken last year’s total of 91.2bn yuan of economic worries and stricter regu- following the presidential elec- ($13.4bn) by 3:20pm (0720 GMT), the lation.China’s commerce watchdog tion win of Republican Donald fi rm said – with more than $1bn spent SAIC summoned Alibaba and 14 other Trump, who during campaign- in the fi rst fi ve minutes. e-commerce companies earlier this ing took a protectionist stance Similarly, rival e-commerce giant week, banning them from making up on a deal he called a disaster and JD.com, which focuses more on elec- fake orders and lifting prices before giv- killer blow for American jobs. tronics, said its sales total – which it did ing out discounts. “It’s still very early to predict not specify – surpassed last year’s fi g- Alibaba itself has sought to downplay the future of TPP, but regardless, ure at 1:33pm. the importance of the turnover statistic. we are always ready for integra- Some shoppers stayed up until mid- “I don’t have any requirement for tion, not just because of TPP, but night to purchase discounted goods the the sales fi gure,” Alibaba quoted chair- because it is a requirement and moment Singles Day got under way. man Jack Ma as saying in a statement also a motivation of develop- Among them was Shanghai white- on Weibo, adding the day was all about ment,” Trade Minister Tran Tuan collar worker Chen Yang, 29, who tried “happiness and joy”. Anh was quoted saying by the to buy things she had her eyes on ear- Online shopping is a bright spot in government news website yes- lier and spent about 1,000 yuan on pur- Beijing’s eff orts to transform the econ- terday. “If TPP is implemented chases from shoes to shampoo. omy, growing 26.1% in the January to smoothly, our economic oppor- “I’m so happy after I fi nished my September period according to the Na- tunities and competitive sectors shopping, though I still need to pay my tional Bureau of Statistics. like textiles, seafood and shoes credit card later,” she said. “But I’m just That outstripped both overall retail will defi nitely benefi t... so looking forward to getting my pack- growth of 10.4% in the period, and of- but if not we still have world ages now.” fi cial GDP expansion of 6.7% in each of markets; these sectors will still In the US, total online sales for the fi ve the fi rst three quarters. China’s State be competitive,” Tuan Anh said. days from Thanksgiving through Cyber ries over slowing growth in China, as China’s economy expanded at its domestic consumption. Alibaba kicked Post Bureau has estimated the coun- Vietnam has been Southeast Monday last year stood at $11.1bn, ac- consumer spending has expanded while slowest rate in a quarter of a century off this year’s event with a gala in the try will handle more than 1bn packages Asia’s free-trade trailblazer, cording to Adobe Digital Index. the old industrial economy struggles last year and has eased further this southern city of Shenzhen on Thurs- during the six days from yesterday, up pursuing tariff -slashing deals Alibaba’s New York-listed stock has due to overcapacity and sluggish de- year, as Beijing tries to shift growth day night, inviting international and 35% from last year, the offi cial news with its biggest markets and been buoyant this year in spite of wor- mand. drivers from investment and exports to domestic stars from basketball player agency Xinhua reported. sources of investment, including South Korea and the European Union, as well as existing agree- ments via the Association of Southeast Asian Nations, such as an Asean-China FTA. If passed, the TPP, dubbed a Tencent gives employees over $220mn worth of shares mega-regional accord, would cover 40% of the global economy and create a trade zone worth Reuters vember 11, 1998, it said on its offi cial and chairman Pony Ma has been giv- Ma’s employees are busy counting cash” coincides with that of the festival also about $28tn among 12 countries Hong Kong WeChat account yesterday afternoon. ing away virtual “red envelopes” with – a popular joke circulated among Ten- known as “Double 11” that has become that include the United States, Ja- The giveaway accompanies an on- amounts ranging from 188 yuan to 1,888 cent employees and on Chinese Inter- a key barometer of Chinese consumer pan, Australia, Canada, Malaysia line shopping frenzy in China yesterday yuan on WeChat yesterday. net. Alibaba yesterday smashed its own sentiment. and Mexico. The deal looked set hinese tech giant Tencent Hold- with sales celebrating Singles Day led Tencent prepared 30mn yuan worth sales record 15 hours into the 24-hour Alibaba fi rst launched the event in to sail through legislatures when ings Ltd is giving its employees by Tencent rival Alibaba Group Hold- of gift money for its current and former discount shopping event that is now the 2009 to encourage consumers without it was concluded last year, but Cmore than HK$1.7bn ($220mn) ing Ltd. With Tencent stock at HK$200 employees and contractors to thank world’s largest shopping bonanza. a partner to treat themselves. the run-up to the US presidential worth of company shares to help cel- apiece – making it the most valu- them for their contribution and mark Alibaba is expected to rake in more The shares will be given to Tencent election put ratifi cation on ice in ebrate its 18th anniversary. able company listed on the Hong Kong its “coming-of-age”, according to the than $20bn in sales by the end of the employees in three equal batches in Washington and prompted other Asia’s most valuable listed company Stock Exchange – the giveaway is worth WeChat post. day after overtaking last year’s total of three years starting from next week, countries to put their legislative will give every employee 300 company HK$60,000 ($7,735) to each of the fi rm’s “(Alibaba founder) Jack Ma’s employ- $14.3bn on Friday evening. according to an internal e-mail seen by approvals on hold too. shares to mark its foundation on No- 31,557 employees. Tencent founder ees are busy sweating over-time, Pony The date of Tencent’s foundation Reuters. Beijing’s household debt a growing risk to economy

Reuters economist at China National Gold Group started issuing the data. “The rapid growth There are 100 fen in one yuan. Shanghai Corp, visiting researcher at Chongyang in outstanding (consumer) loan balances Public health insurance reaches nearly Institute for Financial Studies, Renmin has been accompanied by an increase in all of China’s 1.4bn people, but its coverage University of China. “The first issue is that NPLs (non-performing loans) across all is basic, leaving patients liable for about Single-mother Li Ying helps explain why household debt has risen too quickly, the segments of consumer debt,” the Fitch half of total healthcare spending. household debt in China may be a bigger second is that it has risen too quickly as a report said. That proportion rises further for serious risk to the giant economy than previously proportion” of GDP and disposable income, China’s central bank did not immediately or chronic diseases such as cancer. thought. said Wan. respond to a request for comment. Some economists argue that China’s Faced with expensive medical bills to Underlining these concerns, authorities Like a typical borrower, half of Li’s gross savings rate of 49% of GDP at the treat breast cancer, the 38-year-old nurse are trying to calm a property rally. 2,800 yuan in monthly earnings cover her end of 2014 suggests little risk to the econ- from Heilongjiang in northern China is In the latest move, regulators told banks mortgage payments, with 200,000 yuan omy from the buildup in household debt. struggling to repay her mortgage and to limit the issuance of home loans, the outstanding. But Michael Pettis, a professor of finance at relies on financial support from her wider Shanghai Securities Journal reported on That proportion rises to 70% though Guanghua School of Management Peking family to pay for her healthcare. Thursday. in first-tier cities, where prices have been University, said there are hidden problems. To cut household costs, she waits until The balance of retail mortgages at the rising the fastest, said Yan Yuejin, director Down payments for new homes, which the local food market is about to close be- end of the third quarter hit 16.8tn yuan of E-House China R&D Institute. are relatively high in China, are often bor- fore buying because that is when remain- ($2.5tn), more than a third higher than a But the cost of treatment for breast can- rowed from family members. ing fresh produce is sold at a discount. year earlier, China central bank data shows. cer has dramatically changed Li’s financial “We can’t simply assume there isn’t any “People say that when it’s about to close More broadly, consumer debt financed position. Since February last year, she has debt there, or that it’s family debt and mom is the time that produce is cheapest,” said by Chinese banks has grown sharply, from spent around 132,000 yuan on the treat- is never going to foreclose on you so it’s Li. “So now I go at that time.” 3.8tn yuan at the end of 2007 to 17.4tn ment and has to continue with medication OK,” said Pettis. Li’s experience show’s the vulnerability yuan at the end of last year, a compound for three years at 6,000 yuan a month just Highly indebted households also cut of Chinese consumers, who are taking on in less than 10 years. While developed na- health spend in China as a percentage of annual growth rate of 21%, Fitch Ratings for drugs. Most of the medical bills are paid their spending more in a downturn, which record amounts of debt even as income tions have higher rates of household debt, total expenditure was 32%, compared to said in a report. by her family. can make a slowdown worse, economists growth slows, adding to the challenge for Chinese families are much more leveraged 9.7% in Britain and 11% in the United States, But the growth in income has been “Things have changed, I didn’t used to say. Beijing wants consumption to help policymakers of preventing the economy because income is lower and so propor- World Health Organisation data shows. much more modest, rising 6.3% in January think money was that important,” said Li. drive future economic growth as it turns from slowing too quickly. tionately the costs of social welfare from “Household debt leverage is very alarm- to September compared with the year- “Before, if there was 1 yuan on the ground away from its traditional manufacturing China’s household debt as a proportion pensions to healthcare are much higher. ing, even though the aggregate amount earlier period, the weakest pace since 2013 I wouldn’t pick it up, now even if there is 1 base. Retail spending growth is easing of GDP has more than doubled to 40.7% At the end of 2014, the out-of-pocket is controllable,” said Wan Zhe, chief when the National Bureau of Statistics first fen I will pick it up,” she added. however. Gulf Times Saturday, November 12, 2016 5 BUSINESS

DJIA WORLD INDICES Company Name Lt Price % Chg Volume Indices Lt Price Change Dow Jones Indus. Avg 18,765.11 -42.77 Apple Inc 108.06 0.25 12,123,296 S&P 500 Index 2,158.68 -8.80 Microsoft Corp 58.67 -0.05 12,184,618 Nasdaq Composite Index 5,199.11 -9.68 Exxon Mobil Corp 85.14 -2.19 3,571,649 S&P/Tsx Composite Index 14,609.02 -135.23 Johnson & Johnson 118.33 -1.01 1,721,551 Mexico Bolsa Index 45,119.42 -104.96 General Electric Co 30.41 0.01 13,575,228 Brazil Bovespa Stock Idx 59,363.79 -1,837.17 Jpmorgan Chase & Co 76.04 -0.80 9,860,520 Ftse 100 Index 6,729.39 -98.59 Procter & Gamble Co/The 83.90 1.13 2,884,101 Cac 40 Index 4,488.20 -42.75 Wal-Mart Stores Inc 70.87 -0.73 2,397,051 Dax Index 10,664.09 +33.97 Verizon Communications Inc 46.65 -0.09 4,628,786 Ibex 35 Tr 8,647.50 -109.30 Pfizer Inc 32.31 -3.52 10,988,856 Nikkei 225 17,374.79 +30.37 Visa Inc-Class A Shares 82.36 0.60 1,913,789 Japan Topix 1,378.28 +1.93 Chevron Corp 106.00 -1.66 2,159,666 Hang Seng Index 22,531.09 -308.02 Coca-Cola Co/The 40.86 -0.19 3,882,687 All Ordinaries Indx 5,446.61 +37.72 Intel Corp 34.47 -0.09 5,292,463 Nzx All Index 1,251.91 -6.89 Merck & Co. Inc. 63.85 -1.71 3,041,540 Bse Sensex 30 Index 26,818.82 -698.86 Cisco Systems Inc 31.21 0.68 6,327,767 Nse S&P Cnx Nifty Index 8,296.30 -229.45 Home Depot Inc 129.39 0.28 1,521,554 Straits Times Index 2,814.60 -19.49 Intl Business Machines Corp 161.01 0.49 1,103,631 Karachi All Share Index 29,385.74 +147.40 Walt Disney Co/The 97.49 2.66 9,752,604 Jakarta Composite Index 5,231.97 -218.34 Unitedhealth Group Inc 147.01 0.60 1,284,151 3M Co 173.78 -0.29 411,701 Mcdonald’s Corp 114.60 0.08 883,871 Nike Inc -Cl B 50.53 0.28 1,698,594 TOKYO United Technologies Corp 107.11 -1.20 925,555 Boeing Co/The 146.93 -0.51 942,634 Company Name Lt Price % Chg Goldman Sachs Group Inc 200.82 -0.02 2,244,730 Rakuten Inc 1,130.00 -5.64 19,865,300 American Express Co 69.87 -0.34 1,372,957 Kyocera Corp 5,134.00 0.88 2,202,300 Du Pont (E.I.) De Nemours 69.00 -2.75 996,126 Nissan Motor Co Ltd 965.20 -1.84 37,092,500 Caterpillar Inc 92.88 -0.61 2,527,704 Hitachi Ltd 564.40 0.34 27,603,000 Travelers Cos Inc/The 110.24 0.57 459,195 Takeda Pharmaceutical Co Ltd 4,638.00 1.18 2,970,000 Jfe Holdings Inc 1,532.50 2.27 6,490,000 Ana Holdings Inc 294.80 0.55 21,103,000 FTSE 100 Mitsubishi Electric Corp 1,481.00 0.03 6,836,900 Sumitomo Mitsui Financial Gr 3,792.00 4.09 26,576,000 Company Name Lt Price % Chg Volume Honda Motor Co Ltd 2,998.50 0.60 7,038,200 Fast Retailing Co Ltd 37,600.00 1.92 1,329,900 A trader looks at financial data on computer screens at the London Stock Exchange. The FTSE 100 bore the brunt of a rise Wpp Plc 1,640.00 -0.79 2,359,922 Ms&Ad Insurance Group Holdin 3,217.00 2.26 2,404,500 Worldpay Group Plc 269.70 -2.00 2,093,788 in sterling above $1.26 and fell 1.4% at 6,730.43 points yesterday. Kubota Corp 1,637.50 0.96 6,174,400 Wolseley Plc 4,497.00 -1.98 664,228 Seven & I Holdings Co Ltd 4,244.00 -2.10 3,838,400 Wm Morrison Supermarkets 212.70 0.81 4,547,413 Inpex Corp 970.30 -0.49 8,587,000 Whitbread Plc 3,489.00 0.26 302,582 Resona Holdings Inc 479.60 2.39 24,192,400 Vodafone Group Plc 205.95 -0.94 42,183,809 Asahi Kasei Corp 968.70 -0.99 9,362,000 United Utilities Group Plc 879.00 1.56 2,075,506 Kirin Holdings Co Ltd 1,815.50 -2.23 3,862,400 Unilever Plc 3,164.00 -0.53 2,149,098 Marubeni Corp 577.80 3.62 19,679,200 Tui Ag-Di 1,017.00 -2.31 519,067 Mitsubishi Ufj Financial Gro 13.37 European stocks falter as 607.90 364,615,800 Travis Perkins Plc 1,406.00 -0.57 1,107,912 Mitsubishi Chemical Holdings 678.30 1.09 9,217,200 Tesco Plc 198.15 -0.68 12,319,668 Fanuc Corp 19,490.00 0.72 1,664,000 Taylor Wimpey Plc 145.70 1.67 9,781,964 Daito Trust Construct Co Ltd 16,680.00 -3.78 787,700 Standard Life Plc 364.10 0.52 4,025,181 Otsuka Holdings Co Ltd 4,784.00 1.66 1,839,900 Standard Chartered Plc 615.90 -6.54 10,890,935 Oriental Land Co Ltd 5,913.00 -1.35 1,655,000 St James’s Place Plc 938.50 -1.62 1,162,283 Trump hopes turn to fear Sekisui House Ltd 1,694.00 -0.53 3,820,300 Sse Plc 1,484.00 -0.40 3,538,681 Secom Co Ltd 7,834.00 0.26 1,394,900 Smith & Nephew Plc 1,076.00 0.09 2,960,414 Tokio Marine Holdings Inc 4,410.00 5.63 6,261,500 Sky Plc 789.00 -0.13 2,649,706 AFP further Thursday after Trump beat Thursday for the fi rst time since July Aeon Co Ltd 1,461.00 -0.98 2,876,900 Shire Plc 4,941.00 -2.79 2,255,894 Hillary Clinton to win the US presi- and it maintained most of the gains Mitsui & Co Ltd 1,496.50 2.19 15,637,200 London Severn Trent Plc 2,174.00 2.07 551,280 dency, with investors hoping for busi- heading into the weekend. Kao Corp 5,075.00 -0.70 5,994,600 Schroders Plc 2,860.00 -1.48 304,757 ness-friendly policies and measures The dollar, meanwhile, hit a new all- Dai-Ichi Life Holdings Inc 1,723.00 8.78 25,915,700 Sainsbury (J) Plc 236.40 2.56 8,286,081 Mazda Motor Corp 1,532.00 -1.98 14,091,200 uropean stock markets retreated to boost the US economy, a key driver time high at just under 21.39 pesos. Sage Group Plc/The 651.00 -2.25 2,381,582 Komatsu Ltd 2,534.00 5.01 14,289,200 yesterday while the dollar ral- of world growth. The unit — as well as the Mexican Sabmiller Plc 0.00 0.00 - West Japan Railway Co 6,376.00 -0.70 894,600 lied on the prospect of higher However, there are also worries stock market — has been hammered Rsa Insurance Group Plc 534.00 -0.93 1,798,348 E Murata Manufacturing Co Ltd 13,170.00 -0.45 1,307,000 Royal Mail Plc 481.70 -0.31 1,182,669 US interest rates, with dealers betting about his plans after saying he would by fears Trump will follow through on Kansai Electric Power Co Inc 1,034.50 -0.53 3,073,700 Royal Dutch Shell Plc-B Shs 2,044.00 -4.28 5,344,727 US president-elect Donald Trump’s tear up several trade deals while ramp- campaign pledges to renegotiate the Denso Corp 4,579.00 1.19 2,806,900 Royal Dutch Shell Plc-A Shs 1,952.50 -4.20 4,898,749 planned huge spending policies will ing up import duties. North American Free Trade Agree- Sompo Holdings Inc 3,486.00 2.44 2,944,700 Royal Bank Of Scotland Group 200.50 -1.09 15,121,900 Daiwa House Industry Co Ltd 2,992.50 1.32 3,192,300 fi re infl ation. “It’s been a Trumper-thumper of a ment, as well as pressure the country to Rolls-Royce Holdings Plc 738.50 -4.15 2,791,789 Jx Holdings Inc 410.00 1.89 19,824,800 Despite an all-time high close on couple of days in markets,” CMC Mar- pay billions of dollars for a giant border Rio Tinto Plc 3,059.00 -2.81 4,850,437 Nippon Steel & Sumitomo Meta 2,286.50 2.17 5,741,500 Wall Street on Thursday, investors kets analyst Jasper Lawler wrote in a wall. Rexam Plc 0.00 0.00 - Suzuki Motor Corp 3,838.00 -4.48 6,066,100 “The new Donald Trump vision for Relx Plc 1,295.00 -0.31 3,747,761 across Asia and most of Europe turned note to clients. Nippon Telegraph & Telephone 4,267.00 -4.20 8,035,200 Reckitt Benckiser Group Plc 6,859.00 -0.10 1,052,688 cautious on uncertainties linked to a “The Trump dump was quickly fol- America is drawing the attention of in- Ajinomoto Co Inc 2,053.00 -3.00 4,418,700 Randgold Resources Ltd 5,955.00 -6.73 1,169,930 Trump presidency, while the Mexican lowed by the Trump jump and now it ternational capital,” said Lawler. Mitsui Fudosan Co Ltd 2,506.50 1.09 8,468,000 Prudential Plc 1,476.50 -3.56 7,439,332 peso hit a fresh record dollar low. seems we’re headed into the Trump “This renewed belief in a better en- Ono Pharmaceutical Co Ltd 2,729.50 4.76 6,526,200 Provident Financial Plc 2,781.00 -2.66 150,295 Daikin Industries Ltd 10,225.00 -1.87 1,793,800 Europe’s FTSEurofi rst 300 was slump.” vironment for corporate America is at Persimmon Plc 1,692.00 0.71 841,872 Bank Of Yokohama Ltd/The 0.00 0.00 - down 0.1%, Germany’s DAX was up Expectations that Trump’s plans for the expense of Europe and especially Pearson Plc 744.50 -0.67 2,126,902 Toray Industries Inc 871.20 -2.53 13,514,000 0.4% at 10,667.95 points, while Brit- huge spending projects will fan prices emerging markets. Paddy Power Betfair Plc 8,830.00 -1.45 52,297 Astellas Pharma Inc 1,561.00 0.45 15,824,100 Old Mutual Plc 184.90 -3.60 17,156,031 ain’s FTSE 100 bore the brunt of a rise have lit a fi re under the dollar as dealers “Malaysia and Indonesia have been Bridgestone Corp 3,987.00 0.96 3,995,500 Next Plc 5,055.00 3.35 529,108 in sterling above $1.26 and fell 1.4% at bet the Federal Reserve will hike bor- caught in the eye of the emerging mar- Sony Corp 3,199.00 -0.25 8,513,800 National Grid Plc 960.80 1.79 9,135,314 6,730.43 points and Paris’ CAC 40 was rowing costs more aggressively to cap ket storm. Hoya Corp 4,309.00 -1.17 1,670,300 Mondi Plc 1,514.00 -4.84 2,243,081 down 0.9 % at 4,489.27 points. infl ation. The central banks of both nations Sumitomo Mitsui Trust Holdin 3,805.00 3.42 4,285,200 Merlin Entertainment 429.20 0.00 1,008,135 Japan Tobacco Inc 3,771.00 -2.03 6,830,100 US equities slid lower as well yester- That in turn has led to fears of large were forced to defend sliding curren- Mediclinic International Plc 764.00 -1.55 3,264,515 Osaka Gas Co Ltd 422.10 -2.52 8,923,000 day. capital outfl ows as investors go back to cies. Marks & Spencer Group Plc 329.60 4.04 9,961,929 Sumitomo Electric Industries 1,473.00 3.59 7,246,800 After an initial shock, global eq- the US for better, safer returns. Hot money has steamed across the London Stock Exchange Group 2,803.00 -2.10 508,507 Daiwa Securities Group Inc 625.30 2.34 17,778,000 Lloyds Banking Group Plc 59.25 -0.64 142,260,110 uities rocketed Wednesday and rose The greenback almost hit ¥107 on Pacifi c into US assets,” he added. Softbank Group Corp 6,547.00 -0.41 9,345,700 Legal & General Group Plc 229.30 -1.50 14,985,610 Mizuho Financial Group Inc 183.20 3.74 462,230,900 Land Securities Group Plc 985.50 1.03 992,576 Nomura Holdings Inc 564.00 5.11 78,472,200 Kingfisher Plc 358.80 -1.18 5,959,316 HONG KONG HONG KONG Daiichi Sankyo Co Ltd 2,356.00 -0.51 2,545,200 Johnson Matthey Plc 3,257.00 -1.36 223,429 Fuji Heavy Industries Ltd 3,901.00 2.52 6,440,200 Itv Plc 168.40 0.18 22,270,107 Ntt Docomo Inc 2,393.50 -3.31 10,386,500 Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume Intu Properties Plc 263.00 -0.30 2,788,493 Sumitomo Realty & Developmen 2,819.50 2.58 4,479,000 Intl Consolidated Airline-Di 443.00 1.98 7,315,111 Aluminum Corp Of China Ltd-H 3.36 0.00 91,162,196 Hong Kong & China Gas 14.62 -3.56 34,616,473 Sumitomo Metal Mining Co Ltd 1,534.50 3.72 7,039,000 Intertek Group Plc 3,086.00 -2.40 333,163 Bank Of East Asia Ltd 31.40 1.13 2,142,306 Hong Kong Exchanges & Clear 206.20 0.68 8,830,041 Orix Corp 1,709.00 1.64 12,090,700 Intercontinental Hotels Grou 3,061.00 -1.58 403,011 Bank Of China Ltd-H 3.42 -1.16 391,612,833 Hsbc Holdings Plc 61.15 1.92 88,314,560 Asahi Group Holdings Ltd 3,571.00 -2.46 2,206,800 Inmarsat Plc 739.00 2.21 1,163,111 Bank Of Communications Co-H 5.90 -1.50 53,657,840 Hutchison Whampoa Ltd 0.00 0.00 - Keyence Corp 76,060.00 -0.54 180,500 Informa Plc 641.50 -0.54 1,035,019 Belle International Holdings 4.49 -1.75 17,487,519 Ind & Comm Bk Of China-H 4.60 -1.29 258,009,297 Nidec Corp 10,060.00 -1.23 1,236,500 Imperial Brands Plc 3,441.00 1.53 3,213,049 Boc Hong Kong Holdings Ltd 28.25 2.36 26,185,697 Li & Fung Ltd 3.56 -1.39 27,068,254 Isuzu Motors Ltd 1,282.00 0.98 5,733,100 Hsbc Holdings Plc 620.00 -0.85 29,889,051 Cathay Pacific Airways 10.46 -0.57 5,302,263 Mtr Corp 41.90 -1.06 4,755,184 Unicharm Corp 2,311.50 -2.90 2,946,600 Hargreaves Lansdown Plc 1,199.00 -0.42 610,010 Ck Hutchison Holdings Ltd 93.80 -1.00 5,313,578 New World Development 8.84 -1.23 28,646,069 Shin-Etsu Chemical Co Ltd 8,242.00 -0.83 2,667,900 Hammerson Plc 550.50 1.47 1,596,008 China Coal Energy Co-H 4.35 0.69 28,938,833 Petrochina Co Ltd-H 5.19 -1.52 121,769,292 Smc Corp 32,120.00 1.68 315,300 Glencore Plc 276.70 -2.91 68,029,725 China Construction Bank-H 5.52 -1.78 317,791,095 Ping An Insurance Group Co-H 40.65 -0.73 34,420,972 Mitsubishi Corp 2,462.50 3.01 10,016,200 Glaxosmithkline Plc 1,540.00 -2.13 6,471,333 China Life Insurance Co-H 19.22 -0.72 56,940,824 Power Assets Holdings Ltd 72.35 -1.90 6,025,536 Nintendo Co Ltd 24,100.00 -1.27 1,336,600 Gkn Plc 299.60 -2.03 3,443,056 China Merchants Port Holding 19.44 -2.70 5,086,471 Sino Land Co 11.56 -2.20 3,556,138 Eisai Co Ltd 6,762.00 0.71 1,594,400 Fresnillo Plc 1,446.00 -8.25 1,406,635 China Mobile Ltd 84.25 -3.27 32,763,815 Sun Hung Kai Properties 104.60 -1.23 9,696,383 Sumitomo Corp 1,285.00 2.55 8,757,400 Experian Plc 1,402.00 -2.91 2,677,399 China Overseas Land & Invest 23.20 -2.32 19,997,383 Swire Pacific Ltd - Cl A 78.50 -3.38 2,184,701 Canon Inc 2,976.00 0.20 5,675,200 Easyjet Plc 1,062.00 2.31 2,622,404 China Petroleum & Chemical-H 5.42 -1.81 142,884,041 Tencent Holdings Ltd 200.00 -3.94 45,350,234 Japan Airlines Co Ltd 3,176.00 -0.47 3,247,800 Dixons Carphone Plc 326.50 1.43 2,578,482 China Resources Beer Holdin 16.26 -0.61 5,390,661 Wharf Holdings Ltd 54.45 -6.60 9,003,465 Direct Line Insurance Group 354.50 -1.53 1,544,641 China Resources Land Ltd 18.76 -3.20 18,440,350 China Resources Power Holdin 12.80 -2.74 11,213,476 Diageo Plc 1,977.00 -0.78 5,551,338 SENSEX Dcc Plc 6,050.00 0.17 161,580 China Shenhua Energy Co-H 17.18 0.12 41,917,405 GCC INDICES Crh Plc 2,764.00 -1.71 2,344,958 China Unicom Hong Kong Ltd 8.60 -3.91 68,595,392 Compass Group Plc 1,328.00 -0.52 4,984,107 Company Name Lt Price % Chg Citic Ltd 11.42 -0.87 16,332,384 Indices Lt Price Change Coca-Cola Hbc Ag-Di 1,642.00 -0.36 412,350 Clp Holdings Ltd 76.00 -3.06 8,721,990 Doha Securities Market Zee Entertainment Enterprise 482.15 -4.70 3,271,162 9,960.95 -13.65 Centrica Plc 204.20 -0.39 10,038,777 Cnooc Ltd 9.61 -1.84 55,168,157 Saudi Tadawul Yes Bank Ltd 1,214.90 -5.84 5,489,180 6,528.05 +148.43 Carnival Plc 3,904.00 -0.99 338,045 Cosco Shipping Ports Ltd 7.53 -2.71 5,009,696 Kuwait Stocks Exchange Wipro Ltd 442.35 -0.58 2,055,960 5,480.42 +24.83 Capita Plc 551.00 -2.04 2,602,943 Esprit Holdings Ltd 6.22 -1.11 1,078,695 Bahrain Stock Exchage Vedanta Ltd 229.80 0.22 18,725,240 1,160.94 +15.41 Burberry Group Plc 1,394.00 -3.26 2,242,136 Fih Mobile Ltd 2.47 -1.20 3,541,302 Oman Stock Market Ultratech Cement Ltd 3,634.10 -5.39 639,957 5,417.67 +11.23 Bunzl Plc 2,017.00 -3.08 705,291 Hang Lung Properties Ltd 16.62 -1.19 2,842,367 Abudhabi Stock Market Tech Mahindra Ltd 429.40 -2.91 1,246,935 4,282.46 -40.93 Bt Group Plc 360.60 3.67 20,180,709 Hang Seng Bank Ltd 142.80 0.92 1,913,216 Dubai Financial Market Tata Steel Ltd 426.50 -2.40 9,823,589 3,274.06 -4.87 British Land Co Plc 588.00 1.20 1,752,993 Henderson Land Development 42.65 -1.04 2,956,830 Tata Power Co Ltd 72.10 -3.16 4,036,365 British American Tobacco Plc 4,311.50 1.24 4,769,106 Tata Motors Ltd 507.30 -4.95 8,341,567 Bp Plc 436.55 -2.75 18,970,136 Tata Consultancy Svcs Ltd 2,101.15 -2.52 1,284,997 Bhp Billiton Plc 1,289.00 -3.59 9,517,935 Sun Pharmaceutical Indus 688.00 3.27 14,484,558 Berkeley Group Holdings/The 2,401.00 0.46 406,574 “Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The State Bank Of India 273.00 -2.95 63,823,423 Barratt Developments Plc 473.90 1.76 3,106,889 Reliance Industries Ltd 1,001.75 -0.86 3,617,523 accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended Barclays Plc 201.10 0.00 50,094,225 Punjab National Bank 155.70 -2.26 30,330,705 as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank Bae Systems Plc 589.50 -3.68 10,896,562 Power Grid Corp Of India Ltd 183.10 -2.84 5,181,914 or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on Babcock Intl Group Plc 967.50 -1.78 557,637 Oil & Natural Gas Corp Ltd 273.45 -0.92 4,665,936 this data.” Aviva Plc 450.90 -1.66 7,182,653 Ntpc Ltd 151.70 -2.00 3,122,405 Astrazeneca Plc 4,326.50 -1.77 1,995,784 Maruti Suzuki India Ltd 5,134.25 -3.65 1,176,166 Associated British Foods Plc 2,580.00 1.45 916,769 Mahindra & Mahindra Ltd 1,240.20 -6.14 2,577,718 Ashtead Group Plc 1,386.00 -2.39 1,691,844 Lupin Ltd 1,458.80 -2.35 919,837 CURRENCIES Arm Holdings Plc 0.00 0.00 - Larsen & Toubro Ltd 1,388.80 -1.65 1,748,055 DOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI KUWAITI Antofagasta Plc 701.50 -1.89 6,919,545 DINAR DINAR Kotak Mahindra Bank Ltd 815.60 -0.45 2,673,317 Anglo American Plc 1,134.00 -3.61 7,464,474 Itc Ltd 242.95 -3.23 13,115,777 Admiral Group Plc 1,887.00 -0.26 377,816 Infosys Ltd 921.55 -1.90 3,763,997 3I Group Plc 603.00 -0.25 1,709,955 Indusind Bank Ltd 1,192.35 -1.80 1,574,023 0.00 0.00 Idea Cellular Ltd 69.95 -4.24 6,734,499 Icici Bank Ltd 276.40 -5.54 34,014,416 TOKYO Housing Development Finance 1,268.35 -4.24 3,848,212 Hindustan Unilever Ltd 801.75 -2.05 1,841,790 Hindalco Industries Ltd 172.30 -1.96 14,859,443 Company Name Lt Price % Chg Volume Hero Motocorp Ltd 2,975.30 -5.41 676,611 East Japan Railway Co 9,265.00 0.74 1,354,000 Hdfc Bank Limited 1,275.80 -0.22 2,058,821 Itochu Corp 1,407.00 1.55 11,020,800 Hcl Technologies Ltd 764.10 -3.24 2,610,056 Fujifilm Holdings Corp 3,977.00 0.05 2,747,400 Grasim Industries Ltd 899.00 -2.31 2,281,056 Yamato Holdings Co Ltd 2,281.50 0.13 1,643,600 Gail India Ltd 438.25 -2.45 2,571,780 Chubu Electric Power Co Inc 1,513.50 -1.88 2,312,200 Dr. Reddy’s Laboratories 3,256.25 -0.67 349,052 Mitsubishi Estate Co Ltd 2,182.00 0.58 8,053,000 Coal India Ltd 324.05 -2.75 2,947,435 Mitsubishi Heavy Industries 471.00 3.70 41,788,000 Cipla Ltd 547.95 -2.79 1,326,528 Toshiba Corp 385.50 0.94 54,103,000 Cairn India Ltd 252.15 -0.51 2,975,002 Shiseido Co Ltd 2,775.50 1.07 2,929,400 Bosch Ltd 20,023.00 -4.04 23,258 Shionogi & Co Ltd 5,452.00 0.42 2,455,200 Bharti Airtel Ltd 301.40 -2.35 1,805,965 Tokyo Gas Co Ltd 468.90 -2.60 15,396,000 Bharat Petroleum Corp Ltd 649.60 -2.25 2,932,376 Tokyo Electron Ltd 9,802.00 0.15 1,968,700 Bharat Heavy Electricals 136.15 -3.20 12,623,378 Panasonic Corp 1,001.00 -0.20 13,010,000 Bank Of Baroda 160.50 -2.73 23,822,812 Fujitsu Ltd 625.30 -0.90 16,214,000 Bajaj Auto Ltd 2,647.60 -2.90 304,634 Central Japan Railway Co 17,405.00 0.32 615,600 Axis Bank Ltd 498.75 -1.62 7,572,450 T&D Holdings Inc 1,394.00 5.65 7,342,100 Asian Paints Ltd 962.30 -4.85 2,878,953 Toyota Motor Corp 5,952.00 1.95 14,308,200 Ambuja Cements Ltd 219.55 -4.94 3,289,790 Kddi Corp 2,804.00 -4.32 16,740,500 Adani Ports And Special Econ 276.75 -6.04 4,810,761 Nitto Denko Corp 7,755.00 6.79 3,218,200 Acc Ltd 1,400.45 -3.87 320,263 Gulf Times 6 Saturday, November 12, 2016 BUSINESS/LEISURE

Adam BMW labour chief urges CEO to accelerate e-car rollout

Bloomberg Munich

MW’s top labour representative off ered a rare pub- lic rebuke of the company’s leadership, warning Bthat the luxury-car maker risks falling behind ri- vals in the race to develop battery-powered cars. “Management has been slow to decide on investing in more electric models,” Manfred Schoch, who’s also deputy chairman of BMW’s supervisory board, said in Pooch Cafe an interview on Thursday in Nuremberg, Germany. The carmaker must expand its range to include electric ver- sions of its core lineup, including 3-, 5- and 7-Series se- dans, he said. “Anything else would be detrimental to the business.” Chief executive offi cer Harald Krueger has had a shaky start since taking up his position in 2015, with BMW set to lose its crown this year as the world’s best-selling luxury-vehicle brand to Mercedes-Benz for the fi rst time in a decade. Sales of the redesigned fl agship 7-Series have been sluggish. He’s also rarely in the public eye and suff ered an embarrassing collapse at the Frankfurt auto show a few months into his tenure. Schoch: Rare rebuke. Carmakers from Tesla Motors to Volkswagen are ag- gressively ramping up their electric line-ups in a bid to remain competitive in the future, said Schoch. BMW to win customers in a shifting market and comply with declined to comment on the demands from the works ever-tightening emissions rules. Volkswagen plans to council chief. roll out 30 battery-powered vehicles in the coming years, While worker representatives have signifi cant infl u- while Mercedes aims to introduce at least 10 such mod- ence at German companies and often air their grievances els. BMW, an early adopter of green auto technology, re- against management in public, the relationship between Garfi eld cently announced a goal to make battery-powered ver- labour leaders and executives at BMW has in the past sions of two existing models, the X3 sport utility vehicle been more restrained. and the Mini city car. In 2013, BMW was the fi rst major luxury-car maker to While BMW is set to lose its lead, profi tability has create a stand-alone sub-brand for electric vehicles with stayed within target and the company last week repeated its i3 city car, and a year later it introduced the i8 plug-in that revenue and sales this year will rise. Krueger’s strat- hybrid sports model. Limited driving range and a compar- egy will see BMW make more lucrative, high-end cars atively high price for the i3 have contributed to tepid sales, like the X7 SUV to help fi nance steep investments into forcing executives to think twice about new investments. electric and self-driving cars. The shift away from combustion engines, which have Mercedes parent Daimler AG and BMW both predict about 1,000 parts compared to just 25 components that sales in the electric segment – including plug-in hybrids make up a typical electric motor, will result in job losses and battery-only autos – will account for as much as 25% in traditional car making, Schoch said. New jobs in areas of total deliveries in about 10 years. For BMW, that’s po- including software development and mobility services tentially more than half a million cars based on 2015 sales will soften the blow. Still, about 20% of BMW workers in of 2.25mn vehicles, and compares with a 2% share of de- Germany will probably see their jobs change in coming liveries now. years, which will require additional spending on retrain- “Management must invest in electric mobility now” ing, he said.

Mall Cinema (1): Achcham ROYAL PLAZA CINEMA PALACE Bound And Gagged Yambadh Madamaiyada (Talim) (2): Andron (2D) 2pm; Trolls (2D) 2:30pm; Sahasam Swasaga Sagipo 4pm; Trenk, The Little Knight (2D) (Telegu) 5:15pm; Puli Murugan 6pm; Operation Chromite (2D) (Malayalam) 8pm ; Rock On 2 Andron (2D) 11pm. 7:30pm; Assal Abyad (Arabic) (Hindi) 11pm. Landmark Cinema (2): Trenk, 9:30pm; Operation Chromite (2D) Mall Cinema (2): Trenk, The Little The Little Knight (2D) 2:30pm; 11:30pm. Knight (2D) 2:30pm; Trenk, The Trolls (2D) 4pm; Trenk, The Little ROYAL PLAZA CINEMA PALACE Little Knight (2D) 4pm; Trolls (2D) Knight (2D) 5:45pm; Shut –In (2D) (3): Trenk, The Little Knight (2D) 5:30pm; Assal Abyad (Arabic) 7:30 7:15pm; Operation Chromite (2D) 2pm; Shut –In (2D) 3:30pm; Assal pm; Operation Chromite (2D) 9:30 9pm; Operation Chromite (2D) Abyad (Arabic) 5:30pm; Doctor & 11:30pm. 11pm. Strange (2D) 7:30pm; Andron (2D) Mall Cinema (3): Rock On 2 Landmark Cinema (3): Rock On 9:30pm; Shut –In (2D) 11:30pm. (Hindi) 2pm; Doctor Strange (2D) 2 (Hindi) 2:30pm; Puli Murugan Asian Town Cinema: Achcham 5pm; Shut –In (2D) 7:15pm; Lahore (Malayalam) 5pm; Andron (2D) Yambadh Madamaiyada (Talim) Se Aagaye (Urdu) 9pm; Andron 8pm; Rock On 2 (Hindi) 10:30pm. 1, 4, 7, 10pm & 1am; Sahasam (2D) 11:30pm. ROYAL PLAZA CINEMA PALACE Swasaga Sagipo (Telegu) Landmark Cinema (1): Shut –In (1): Rock On 2 (Hindi) 2:30pm; Puli 12:30 & 4:30pm; Puli Murugan (2D) 3pm; Assal Abyad (Arabic) Murugan (Malayalam) 5:15pm; (Malayalam) 12:30, 1:30, 3:30, 4:30, 5pm; Doctor Strange (2D) 7pm; Rock On 2 (Hindi) 8:15pm; Puli 6:30, 7:30, 9:30, 10:30pm, 12:30 & Assal Abyad (Arabic) 9pm; Murugan (Malayalam) 11pm. 1:30am.

Sudoku Cryptic Clues Quick Clues

ACROSS DOWN ACROSS DOWN 1. Strangely talented 2. Serpent used in Cleopatra’s 1. Revivify (9) 2. Stray (3) redhead in old age (6,3) plot (3) 8. Possess (3) 3. Lift (5) 8. Somewhere to stay again 3. They were taken by the left 9. Temporary (11) 4. Banished (6) not included (3) (5) 11. Outermost (7) 5. Prickles (7) 9. Instrument for checking 4. Join up in silent revolution (6) 12. Discover (5) 6. Work together (11) the amount of haunting? 5. Reveal 504 glue makers (7) 13. Lowest (6) 7. Hypocritical (9) (6,5) 6. Does it reduce friction in the 15. On land (6) 10. Unpaid (11) 11. Goes over wrong art world? (3,8) 17. Compass (5) 11. Disconcert (9) markings (7) 7. Descriptive of entertainers 18. Substitute (7) 14. Late (7) 12. Discover Labour leader having got their acts together? 20. Uninterested (11) 16. Would rather (6) has to work for money (5) (2,7) 22. Transgression (3) 19. Bit (5) 13. Stayed constant (6) 10. Working during surgery? 23. Fervently (9) 21. Nothing (3) 15. Medium sitting (6) (2,9) 17. A role on its own (5) 11. Caveats to exercise electoral 18. Another impression of rights (4,1,4) no change (7) 14. Hates semi-nude Weekly’s Solutions Sudoku is a puzzle Weekly’s Solutions 20. Footballer gets the examinations (7) based on a 9x9 grid. contents correct (6,5) 16. What the captain’s playing QUICK CRYPTIC The grid is also 22. Excessively in addition at? (6) Across: 1 Infer; 4 Surplus; 8 Across: 1 Tolls; 4 Capital; 8 divided into nine (3) 19. Some improper thoughts Paladin; 9 Crimp; 10 Obey; 11 Persian; 9 Eking; 10 Fads; 11 (3x3) boxes. You are Habitual; 13 Rare; 14 Mete; 16 Boy scout; 13 Play; 14 Grey; 16 given a selection of 23. Extremely agitated, about an Australian city (5) some beginning to have 21. Not quite very big embrace Advanced; 17 Stun; 20 Inlet; 21 China tea; 17 Thee; 20 Abase; 21 values and to com- Veranda; 22 Noticed; 23 Tacky. Abridge; 22 Stetson; 23 Means. plete the puzzle, hallucinations (3,6) (3) you must fill the Down: 1 Improvisation; 2 False; Down: 1 Top of the class; 2 grid so that every 3 Rude; 4 Syntax; 5 Reclined; 6 Lured; 3 Suit; 4 Cannon; 5 column, every row Leisure; 7 Supplementary; 12 Pressure; 6 Trilogy; 7 Light and every 3x3 box Frenetic; 13 Rivulet; 15 Fervid; 18 sleepers; 12 Palavers; 13 Private; contains the digits Tunic; 19 Grit. 15 Remain; 18 Hydra; 19 Tram. 1 to 9 and none is repeated. Gulf Times 8 Saturday, November 12, 2016 BUSINESS

Time Warner merger gives rivals chance to lean on AT&T for deals

Bloomberg Netflix CEO Reed Hastings said at a Others will bide their time, with other programmers. New York conference last month. “If it’s open since the new US administration “We anticipate that the regula- competition, we love that.” and members of Congress could tors may have some issues that Programmers have already render any lobbying now useless. they want to deal with on this,” As AT&T and Time Warner seek asked for assurances about video President elect Republican Donald Stephenson said on October 24 government approval for their streamed online, since AT&T is Trump has explicitly opposed the when the deal was announced. $85bn megadeal, some of their one of the biggest providers of merger, while Democrat Hillary “We’re convinced that these type of most important negotiations may wireless and residential internet Clinton had said it should be stud- issues can be handled with condi- take place in private conversations service and Time Warner owns ied carefully. tions.” with rival executives instead of in widely viewed cable networks like “In a deal that could take 15 Much depends on whether the the nation’s capital. HBO and TNT. months, you are not going to Federal Communications Commis- The merger off ers competitors AT&T lets subscribers to its complain to people who may not sion will have a say on the merger. and partners a rare opportunity DirecTV satellite service watch video be there,” said BTIG analyst Rich While the Justice Department will to cut more favourable deals with on mobile devices without counting Greenfield. decide whether the deal gives both companies in exchange for against their wireless data use, a Many channel owners will also AT&T too much market power and their public endorsement, which practice known in the industry as want access to valuable data that reduces competition, it’s unclear can be valuable in getting regula- “zero-rating.” The carrier plans to Time Warner would get from AT&T whether the commission, whose tors to sign off . Meanwhile, other introduce a $35-a-month web TV subscribers, said Brian Wieser, an job is to ensure mergers are good pay-TV providers and programmers service in the coming weeks that analyst with Pivotal Research. TV for the public, will have jurisdiction. will lobby to block the deal or place would work similarly. Other media programmers have tried for years Time Warner owns airwave licenses limits on an empire that would own companies will probably demand to off er the kind of targeted adver- that it would need to sell off to many of the movies and shows it that their online services, like CBS tising that Google and Facebook avoid the FCC deciding on the deal. delivers to wireless, internet and Corp’s All Access, are zero-rated too. deliver, but lacked the viewer data AT&T may want to avoid the video subscribers. “The idea that DirecTV could that pay-TV providers like AT&T and FCC, in part because the agency “The part you never see is what avoid usage caps while Netflix Comcast own. often requires companies to make the various players demand behind would run up data charges for And dozens of smaller pro- numerous promises before giving the scenes in order to support the customers is never going to fly,” grammers, especially minority- its blessing. Comcast, for example, deal in Washington,” said Craig Moff ett said. owned channels, are likely to agreed to about 150 conditions Moff ett, an analyst at Moff ettNath- Some big media companies have use the merger review as an before it got FCC approval to buy anson. “You’ll have all kinds of pro- Randall Stephenson, chairman and CEO of AT&T (left), listens while Jeff rey “Jeff ” Bewkes, chairman and CEO already expressed their concerns opportunity to get their networks NBCUniversal. They ranged from grammers essentially demanding a of Time Warner, speaks during the WSJDLive Global Technology Conference in Laguna Beach, California, on about the AT&T deal. “A transac- carried on AT&T’s DirecTV. To win airing public service announce- pound of flesh. It’s a gravy train for October 25. Stephenson said he expects regulators will place conditions on the merger deal. tion of this magnitude obviously approval to buy NBCUniversal ments about obesity to off ering everybody.” warrants very close regulatory in 2011, Comcast Corp agreed low-income internet service. A hint of that back-channel fees and greater distribution of Time Warner Cable was later “Netflix, for better or worse, will scrutiny,” Walt Disney Co said to carry such networks, leading With the FCC able to exact such dealing popped up two years ago. its channels, in exchange for not purchased by Charter Communica- end up speaking on behalf of an shortly after the acquisition was to the inclusion in its lineup of pressure, it may behoove com- Discovery Communications, owner opposing the merger. Discovery tions, with Netflix’s blessing. entire class of would-be competi- announced. Aspire, a channel launched by panies to wait to see whether the of TLC and Animal Planet, argued denied Comcast’s claim at the time. Regulators have made protect- tors,” Moff ett said. “That gives them Other programmers have been Magic Johnson, and Revolt, a agency will indeed review the deal. against Comcast Corp’s purchase Both companies declined to com- ing the online video market one of tremendous negotiating leverage silent. They may be waiting to see music-focused channel owned by “It’s way too early for us to of Time Warner Cable, saying it ment last week on that old dispute. their top priorities. They’ve used for their support of the deal.” what regulators require of the Sean “Diddy” Combs. judge on anything.” CBS CEO Leslie would use its bigger size to hurt The biggest question is whether their oversight over big mergers So far, Netflix has been condi- two companies, or what AT&T and AT&T CEO Randall Stephenson Moonves said of the deal during TV networks. In response, Com- Netflix backs the deal, Moff ett said. to win commitments from large tionally in favour of AT&T’s bid for Time Warner off er on their own. said he expects regulators will a call with analysts. “We’re sort of cast claimed that Discovery had The streaming-video giant opposed internet providers to treat content Time Warner. Some will stay mum or back the place conditions on the deal. He staying out of the fray for the mo- demanded “unwarranted business Comcast’s bid to buy Time Warner equally on their networks — includ- “We want to make sure it doesn’t deal rather than jeopardise their told Reuters last week that he’s ment until we’ve had a chance to concessions,” like higher carriage Cable, and the deal was blocked. ing competing video services. give an unfair advantage to HBO,” relationships. open to sharing subscriber data look at it further.” Gulf Times Saturday, November 12, 2016 9 BUSINESS

Asia stock markets Sensex sheds 699 points; slump again

AFP Hong Kong

he dollar soared against rupee weakens to 67.25 high-yielding currencies Tand Asian emerging mar- Bloomberg kets sank yesterday on the pros- Mumbai pect of higher US interest rates, with dealers betting Donald Trump’s planned huge spending he benchmark Sensex and Nifty policies will fi re infl ation. slid to their lowest close in nearly Despite an all-time high close Tfour and a half months, mirror- on Wall Street, investors across ing the weakness in Asian shares as Asia turned cautious on uncer- concerns that Donald Trump taking tainties linked to a Trump presi- over as US President, led to fears of dency, while the Mexican peso higher interest rates, triggering capi- fell back towards record lows on tal outfl ows from riskier bets such as worries about the fi rebrand ty- emerging markets. coon’s anti-Mexico stance. Earlier in the day, BSE’s 30-share After an initial shock, glo- Sensex fell as much as 2.69% or 740.50 bal equities rocketed on news points to 26,777.18 points, while Trump had beaten Hillary Clin- NSE’s Nifty 50-share dropped 2.82% ton, with investors hoping for or 240.80 points to 8,284.95 points. business-friendly policies and Sensex closed 2.54% or 698.86 points measures to boost the US econo- lower at 26,818.82 points, its lowest my, a key driver of world growth. close since June 29. However, there are worries Nifty shed 2.69% or 229.45 points about his plans after saying he to close at 8,296.30 points, its lowest will tear up several trade deals close since June 30. while ramping up import duties Market breadth was in favour of which would stoke infl ation. bears as losers were nearly fi ve times And expectations that the gainers on the BSE. “Risk-off trade Trump’s plans for huge spending is on,” said Ajay Bodke, chief executive projects will also fan prices have offi cer (CEO) and chief portfolio man- lit a fi re under the dollar as deal- ager, portfolio management services, at ers bet the Federal Reserve will securities house Prabhudas Lilladher, hike borrowing costs more ag- pointing to the anxiety in world mar- gressively to cap infl ation. kets over Trump’s surprise election. That in turn has led to fears of “The US bond yields have risen huge capital outfl ows from the sharply. Trump’s announcement of region as investors go back to the massive push to the US economy, has US for better, safer returns. led to fears that it will stoke infl ation in The greenback almost hit future. The dollar is strengthening and ¥107 for the fi rst time since July money is moving out of emerging as- People walk by the Bombay Stock Exchange building in Mumbai. The Sensex closed down 698.86 points to 26,818.82, its lowest close since June 29. in US trade and it maintained sets,” said Bodke. most of the gains in Asia, sitting The dollar index, which measures should start returning to India,” said sions against bad loans doubled from US assets. This would also mean that ber. According to Bloomberg estimates, at ¥106.58 — well up from the the value of the greenback relative to a Bodke. Volatility jumped with NSE’s last year. Sun Pharmaceutical Indus- FOMC is better poised to raise rates. IIP will be at 1% in September against ¥101.20 touched in the initial basket of six major currencies, was up VIX or volatility index - spiking 12.34%, tries led the gains for Sensex. FIIs being consistently on the selling 0.7% a month ago. panic of Trump’s win. 0.09%. It advanced for fi fth straight to 17.37, the level last seen on Septem- Its shares rose 3.30% after the phar- side, for most of the days since October The government will also issue It also surged against the sessions and rose 1.9% during this pe- ber 29. Consumer-focused companies maceutical maker said late on Thursday had been putting Rupee under pres- Wholesale Price Infl ation (WPI) and high-yielding units as dealers riod. led the losses on the bourses, with the its fi scal second-quarter profi t more sure, but it could regain some losses on Consumer Price Infl ation (CPI) data worry about Trump’s protec- On the domestic front, the rupee fell respective sectoral indices leading the than doubled as it received $45mn in the back of PM’s demonetisation drive”, for October on Tuesday. According tionist plans. as much as 0.9% in the day against the losses, on fears that the demonetisa- milestone payments from a partner. said Anand James, Chief Market Strat- to Bloomberg estimates, WPI will be The Indonesian rupiah US dollar at 67.22, the lowest level since tion move will hurt consumption in the Meanwhile the rupee yesterday closed egist, Geojit BNP Paribas. at 3.69% in October against 3.57% a plunged more than 5% at one August 22. “On the domestic front, near term. near 15-week low against the US dollar, “RBI is reported to have sold dol- month ago. CPI will be at 4.12% against point before halving those loss- there are understandable concerns on BSE Auto index and BSE Consumer tracking the losses in Asian currencies lars to arrest volatility, which had sof- 4.31% a month ago. es, Australia’s dollar was down the short-term impact on aggregate Discretionary Goods & Services index and global equity markets on the specu- tened the falls early in the day, but the The benchmark 10-year government 1.3% and Malaysia’s ringgit lost demand in the consumer-focused sec- led the losses with 4.53% and 4.30% lations of aggressive interest rate hike extended sell off in equities, put addi- bond yield closed at 6.726%, compared 0.8%. tors due to the demonetization move. decline respectively. Mahindra & Ma- by the Federal Reserve under the newly tional pressure on rupee, aggravating to Thursday’s close of 6.661%. Bond The South Korean won was In recent times, most portfolios had hindra fell the most among Sensex elected US president Donald Trump. weakness,” James added yields and prices move in opposite di- 1.2% lower after the country’s gravitated towards consumer-focused stocks. It closed 6.02% lower even as The rupee closed at 67.25 a dollar —a Asian currencies closed weaker. Indo- rections. central bank held interest rates companies,” added Bodke. the country’s top utility vehicle maker level last seen on July 26, down 0.92% nesian rupiah was down 1.8%, Malaysian Foreign institutional investors at record lows and warned of Among the emerging markets, In- said its net standalone profi t rose 27% from its previous close of 66.63. The ringgit 1.42%, South Korean won 1.24%, (FIIs) have sold $501.60mn in debt headwinds caused by global un- dia is one of the few economies where at Rs1,163.27 crore for quarter ended home currency opened at 67.10 against Taiwan dollar 0.84%, Philippines peso and bought $6.51bn in equity till date certainty. domestic consumption forms 70% of September. the US dollar and touched a low of 0.63%, Thai baht 0.17%. However, Japa- this year. The dollar index, which And China weakened its yuan GDP, while in case of other emerg- The country’s largest lender State 67.25. So far this year, it fell 1.6%. nese yen up 0.47%, China Off shore spot measures the US currency’s strength reference rate to beyond 6.8 ing markets, net exports are a biggest Bank of India slid 3.09% after it said its “Rupee has come under pressure 0.21%, Singapore dollar 0.08%. against major currencies, was trading against the dollar for the fi rst chunk of GDP, he pointed “Once the net profi t for the September quarter fell from outfl ows, anticipating Trump’s The government will issue Index of at 98.765, down 0.03% from its previ- time in more than six years, with semblance of sanity returns, money 34.6% from a year-ago period as provi- measures to spark asset growth in Industrial Production (IIP) for Septem- ous close of 98.785. analysts warning the unit could drop further. The unit — as well as the Mexican stock market — has been hammered by fears Trump Peso at record low as bond storm batters emerging assets will follow through on campaign pledges to renegotiate the North Reuters crisis, having plunged over 8%. Malaysia’s ringgit hit its weakest in more matching the 3 month highs hit on Russian spreads have actually snapped American Free Trade Agree- London MSCI’s main pan-EM stocks index than 12 years in forwards markets as November 4. back by 12 bps over the past week to ment, as well as pressure the has also been in the firing line and a foreign investors dumped government They hovered at this level yesterday. 224 bps though they were 7 bps wider country to pay billions of dollars 2.1% drop yesterday took its losses bonds. And as the Mexican peso swooned, on the day. for a giant border wall. Emerging markets were hit for a third since Wednesday’s election result to The Philippine peso touched a its yield spreads stood at 323 basis Other commodity-producing emerging On equities markets, skittish day running yesterday, with stocks almost 5.5%.”You are seeing an almost seven-year trough, while Indonesia’s points, the highest since March, having economies could also stand to gain investors sent Hong Kong 1.1% tumbling and Mexico’s peso slumping indiscriminate selling in emerging rupiah and South Korean won both widened almost 30 bps this week, while from Trump’s proposed infrastructure lower and Seoul 0.9% down, to a record low as Donald Trump’s US markets” said UniCredit EM FX strategist fell to their weakest in more than four in South Africa, which has been a major splurge, but fear of the unknown is while emerging market shares election win triggered a sharp jump in Kiran Kowshik. “Given that there is a lot months. driver of EM sentiment, yields jumped taking precedence for now. were battered. global borrowing costs. of uncertainty on (Trump) policy people Malaysia’s central bank governor to 300 bps. In contrast in China, the yuan hit a Taipei dived 2.1% while Ma- Yields on 10-year US Treasuries, the are just cutting positions. Muhammad Ibrahim gave markets the The South African rand was down 1.5% six-year low and after the market nila and Jakarta were each down driver of world borrowing rates, have They aren’t asking what countries will hint that it would be intervening to prop at its lowest since mid-October and close off icial data showed banks had almost 3%. But Japan’s Nikkei spiked over 40 basis points in the past be at a disadvantage and which could up the ringgit.”We don’t want to be Turkey’s lira was facing a near 3.5% loss given out fewer new yuan loans than ended up 0.2% as the weaker two days as investors scramble to be at an advantage.” dictated by factors that have nothing on the week after six falls in the last expected last month as policymakers yen boosted exporters, although readjust their positions to hedge against Asian currencies were again some of to do with the country’s fundamentals,” seven sessions have sent it to a record bid to avoid an overheating in key parts it was down from earlier highs, the uncertainty caused by Trump’s the hardest hit following campaign talk Ibrahim said. low this week. of the debt-fuelled economy.” while Shanghai and Sydney both victory. by Trump of imposing higher tariff s for Bond markets remained in retreat Russian markets, which are seen as a The drop in new lending last month put on 0.8%. Mexico’s peso, which has become a those selling into the US. Central banks too. potential beneficiary of Trump’s victory was seasonal and does not reflect a In Tokyo, the Nikkei 225 up lightning rod for market anxiety due to in Malaysia and Indonesia were seen Emerging sovereign dollar bonds if relations between Moscow and shift in broad credit growth, which 0.2% at 17,374.79 points; Hong fears about a ripping up of trade deals, intervening in their foreign exchange average yield premium to Treasuries Washington improve, were calmer with was stable in October,” Julian Evans- Kong — Hang Seng down 1.1% at was on course for its worst week since markets yesterday, as most Asian jumped 20 bps on Thursday to 350 the rouble rebounding from losses in Pritchard at Capital Economics said 22,577.96 points and Shanghai — the explosion of the 2008 financial currencies took a dive. bps on JPMorgan’s EMBI Global index, the previous session. in a note. Composite up 0.8% at 3,196.04 points at the close yesterday. Yen seen to advance to 90 per dollar by May after Trump win

Bloomberg as 3.9%, the most since June’s Brexit The yen traded at 105.58 per dollar Sakakibara says market gyrations Tokyo referendum result, after a conciliatory in Tokyo from as strong as 101.20 on caused by continued uncertainty sur- victory speech. Wednesday. It touched a 2 1/2- year rounding Trump’s presidency - such The president-elect campaigned on high of 99.02 on June 24, and is the as who will be chosen as Treasury Sec- he yen may strengthen to 90 a policy platform with protectionism best-performing developed-market retary - could delay Fed action to next per dollar within six months of at its centre, including threats to tear currency in 2016, climbing 14% against year, adding more impetus for the yen TDonald Trump’s election, Ja- up trade agreements and impose tariff s the dollar. to strengthen against the dollar. But pan’s former top currency offi cial Ei- that could slow Asian economies and Sakakibara was a rare yen bull at the even in the event of a December hike, suke Sakakibara said. send Japanese investors rushing back start of the year, when the consen- he says a muted US recovery along with “Trump’s ‘America fi rst’ stance into domestic assets. sus forecast among analysts surveyed slowing world growth will limit the means weak dollar policies,” the Even so, Trump’s proposals, includ- by Bloomberg was for the currency to potential for policy tightening. 75-year-old professor, dubbed “Mr ing pledges to cut taxes and spend as weaken to 125 by year-end. The median “Globally, we have something like Yen” for his ability to infl uence the ex- much as $500bn on infrastructure, are estimate is now 104. secular stagnation,” he said. “It’s quite change rate in the 1990s, said in an in- seen as infl ationary and could lead to Many investors and economists diffi cult to raise rates in that environ- terview on Thursday in Tokyo. “Grad- higher US rates that would support the had expected 2016 to be the year of ment.” ual dollar weakness and yen strength dollar. monetary policy divergence, as they He also expressed concern about the are going to continue.” Sakakibara doesn’t expect increased predicted the Federal Reserve would rise in anti- globalisation sentiment Sakakibara, who accurately pre- fi scal stimulus to raise the US debt lev- continue to raise rates after liftoff from that he credits for lifting Trump to the dicted the currency’s advance this year el to beyond about 120-130% of gross near-zero, while the Bank of Japan and presidency and pulling the UK away from near 120 per dollar to beyond 100 domestic product, from around 105% Currency traders work in the dealing room of a foreign exchange brokerage in others expand stimulus. Instead, the from the bloc. for the fi rst time since 2013, says the currently, limiting any potential dollar Tokyo. The yen is the best-performing developed-market currency in 2016, Fed has held fi re, with traders forecast- “In all likelihood, this trend toward yen’s decline to a three-month low re- strength. Instead, he says the yen could climbing 14% against the dollar. ing the fi rst move in a year next month. protectionism is going to continue, fl ected Trump’s toned-down rhetoric reach 100 by year-end. Japan’s central bank has shifted to tar- leading to a reduction in global trade.” rather than a change in trend. The yen “I don’t know exactly to what extent it’s going to go,” said Sakakibara, who rection for the dollar will be down. US geting bond yields from expanding the Sakakibara said. “For Japan in par- swung to a 0.5% loss against the dol- Trump will take a protectionist stance, is now a professor at Aoyama Gakuin yields aren’t going to keep going up and monetary base, stoking speculation it’s ticular, it has the potential to be ex- lar Wednesday from a surge of as much but there’s no doubt that’s the way University. “At the very least, the di- up.” reaching the limits of easing. tremely negative.” Gulf Times 10 Saturday, November 12, 2016 BUSINESS Carry trades collapse as EM yield advantage shrinks

Bloomberg the index of carry trade returns to an posure to currencies in the developing trade, sank almost 5% on Thursday. faster changes will be, the more vola- ing the Malaysian ringgit. Citigroup London 18-month high on Tuesday. The rise in world two weeks before the election, While yields in emerging markets are tility we will have to expect around the analysts said on Thursday that emerg- US Treasury yields, fuelled by expecta- Sheridan said. After Trump’s victory, still higher than those in America, the world.” ing-market government and corporate tions that Trump’s spending plans will the fi rm cut the remaining holding an- gap has been shrinking. The so-called To be sure, it hasn’t been all bad news debt could come “under a considerable dd emerging-market carry boost infl ation and swell America’s other 75%. The South African rand, a spread between JPMorgan’s GBI-EM for markets after Trump’s surprise vic- amount of pressure” as US Treasury trades to the early list of losers budget defi cit, deals another blow to popular carry-trade currency because Global Diversifi ed Composite Index tory. The Dow Jones Industrial Average yields rise. Afrom a Donald Trump presi- emerging markets already bracing for a of its high local interest rate, was the and 10-year US Treasuries narrowed to climbed to a record on Thursday, while The benchmark US 10-year note dency. wave of protectionist policies from the biggest casualty in emerging markets 4.41 percentage points on Wednesday, China’s Shanghai Composite Index yield has jumped 37 basis points to Bets on higher-yielding currencies president-elect. yesterday, slumping 2.3% against the the smallest since July 2015. entered a bull market. Russian equities 2.15% this week, while 30-year rates from Indonesia to Brazil are unwinding “The probabilities don’t look so dollar in London to the lowest level in Trump’s promises to get tough on have also rallied on speculation Trump climbed 39 basis points. Global bond at the fastest pace since 2011 as soar- good for emerging-market currencies two months. The Indonesian rupiah trade have also weighed on emerg- will improve ties with Moscow. investors have lost more than $1tn ing US Treasury yields undermine the until we get stability around Treasury dropped as much as 3% in Asian hours, ing markets. On the campaign trail, Still, strategists from JPMorgan this week through Thursday, Bank of case for riskier government debt. A yields and some reduction in uncer- before paring losses to 1.1% after the he vowed to pull America out of the Chase & Co to Citigroup and Societe America Merrill Lynch data show. Bloomberg gauge of the carry trades tainty around the new president,” said nation’s central bank stepped in to sta- Trans-Pacifi c Partnership, brand Chi- Generale have warned that uncer- “Defi nitely the steepening of the in eight developing-nation currencies Matt Sheridan, a money manager who bilise the market. na a currency manipulator and build a tainty about the path of the America’s US yield curve is one cause for the tumbled 3.8% over the past two days as helps oversee about $16.6bn at Alli- In India, state-run banks sold dol- wall along the border with Mexico. trade policy has the potential to trig- emerging-market selloff ,” said Rajeev the yield advantage on emerging-mar- anceBernstein in New York. “The po- lars on behalf of the country’s mone- “Donald Trump has not even started ger further emerging-market declines. De Mello, who oversees about $11.7bn ket bonds narrowed to a 16-month low. tential for capital to move away from tary authority, according to two Mum- yet, and the US is not an isolated econ- JPMorgan cut its recommendation on as the head of Asian fi xed income at It’s an abrupt reversal for a strategy emerging-market currencies has in- bai-based traders who asked not to be omy,” Heinz Ruettimann, an analyst at dollar-denominated bonds to “un- Schroder Investment Management in that had rewarded foreign-exchange creased.” identifi ed. The rupee dropped 0.9%. Julius Baer Group in Zurich, said in an derweight” on Wednesday and added Singapore. “I’d say it’s way too early to traders for much of 2016, pushing AllianceBernstein sold 50% of its ex- Brazil’s real, another favoured carry- e-mailed note. “The more radical and short positions in currencies, includ- think the correction is done.”

Rouble declines Russia leans on lenders as current account defl ates

Bloomberg to fuel housing binge Moscow ussia’s current-account surplus is head- ed for the lowest in almost two decades, Rleaving the rouble increasingly vulner- able to speculative fi nancial fl ows. The widest measure of trade in goods and services shrank to $16bn in the first 10 in a big economic push months of the year, down from $58.7bn in the same period a year ago, the central bank Bloomberg according to RenCap’s Robertson. said on Thursday. Russia last had a current- Moscow And unlike countries like Poland account surplus of less than $30bn in 1998, and Croatia, which have struggled to the year the government defaulted on its do- contain the fallout from mortgages mestic debt. t boomed while the rest of Rus- denominated in foreign currencies, A recovery in imports is draining the sur- sia bled. Now mortgage lending the share of non- rouble home loans plus that historically set Russia apart from Ioff ers the best chance yet of un- in Russia was at only 1.9% of the other emerging economies like Turkey and locking what may be the economy’s total on October 1, according to the Brazil, long vulnerable to shifts in global in- greatest untapped resource. central bank. vestor sentiment because of their dependence With almost half of Russians liv- The appeal is strong also because on capital infl ows to fi nance current-account ing in disintegrating Soviet housing the gap between retail loans and shortfalls. stock built before 1980, banks have mortgage rates runs at as much as Higher US Treasury yields, fuelled by ex- taken advantage of state subsidies eight percentage points, according pectations that Donald Trump’s election is to hand out mortgages with aban- Sberbank CIB, the investment arm paving the way for spending that will boost don while other consumer lending of Russia’s largest bank. infl ation and swell America’s budget defi cit, withers. As the economy stabilises “This helps explain the continued is dealing another blow to developing nations following two years of recession, the rise of mortgage volumes,” Sber- already bracing for a wave of protectionist number of people taking out home bank CIB analysts including Anton policies from the next US president. loans is set for a record in 2017 af- Stroutchenevski said in a report. “The rouble outlook becomes more depend- ter the amount has grown 29% so “We expect mortgages to continue ent on capital fl ows, which may see some dete- far this year. Mortgages as a share of growing as a comparatively more at- rioration on the back of the markets’ reaction economic output in Russia are still tractive space for prudent spending, to the Trump win,” said Dmitry Polevoy, chief at about a third the level of former which should be positive for invest- economist for Russia at ING Group in Moscow. communist states in eastern Europe. ments and negative for consump- “Its near-term future will likely remain a hos- “Where is Russia going to fi nd tion, as higher mortgage debt service tage of global trends.” growth?” Charles Robertson, glo- lowers consumer spending.” The rouble plunged 2.4% against the dollar bal chief economist at Renaissance One reason the expansion of on Thursday, joining a rout in other emerging Capital in London, said by phone. home credit has raised no objec- currencies after Trump’s victory this week. It “The housing market is one of the tions from the central bank may be traded 0.7% weaker at 65.8925 versus the US only solutions available.” that it creates little upward pressure currency in Moscow. After searching far and wide for on consumer prices. Infl ation is the Even so, it remains this year’s best emerg- an answer to its longest recession Putin: Sets sights on housing market to boost economy. keystone of policy for the Bank of ing-market carry trade after Brazil and the this century, the Russian govern- Russia, which targets price growth world’s fi fth-strongest performer with a gain ment has hit upon a solution closer months of the year reached over 1tn ing mortgages are at 5% of gross do- control three-quarters of the mar- at 4% in 2017 after overshooting its of 12% against the dollar. to home. roubles ($15.2bn), up by a third from mestic product, compared with the ket, say there’s room to expand and forecasts for a fourth year in 2015. While the price of oil, the nation’s chief ex- If the strategy works, the ripple the same period in 2015, central bank average level of 15% in central and forecast double digit growth will “If the authorities get infl ation port earner, is still 60% below its 2014 high eff ects of a mortgage boom would data show. eastern Europe, Alfa Bank estimates. continue next year as the economy down to a stable 4 to 5%, they can and a drag on its overseas revenue, Russians sweep up a slew of industries from Growth in home loans single- That compares with 2015 ratios of picks up and demand for new hous- use mortgages to kick-start growth,” are taking advantage of a stronger rouble by construction to retail, feeding ap- handedly kept Russia’s retail credit 62.9% in the US and 67.6% in the ing remains high. Robertson said. “With every mort- increasing their purchases of imported goods petite for housing and converting it from shrinking this year, with non- UK, according to the European Cov- “It’s defi nitely realistic that we gage, you’re looking at people buy- and services. into a new source of wealth in a na- mortgage lending down 8% in the ered Bond Council. grow the ratio of mortgages to GDP ing new kitchens, paying someone to The full-year current-account surplus is set tion where the World Bank estimat- fi rst eight months, according to Alfa Even though Russia’s home- in Russia to 20%, just like in east- wallpaper the bedroom and spend- to rise to $25bn to $30bn in 2016 “as exports ed every other person has less than Bank, the biggest private lender. ownership rate is among the high- ern Europe,” the head of VTB’s re- ing more money. It’s one of the few typically see a seasonal increase in Novem- 10 square meters (108 square feet) to “The mortgage market has grown est in the Group of 20, much of the tail banking unit, Mikhail Zador- domestic demand growth stories ber-December,” Sberbank CIB analysts led by themselves. throughout the recession,” Moody’s housing stock is tired, with pent-up nov, said in an interview. VTB’s 1% open for Russia.” Anton Stroutchenevski said in a report. That Cheerleading the way is President Investor Services Vice President demand from young families after delinquency rate for mortgages this The Russian economy needs a would still be the narrowest diff erence since Vladimir Putin. His message for Olga Gekht said by phone from Lon- the country last year matched its year compares with an overall share more potent treatment than mort- 1998. anyone looking for new digs? Don’t don. “Mortgages are the safest loans highest fertility rate since 1991. The of 7.1% for non-performing loans at gages, according to the European The rouble could weaken further if foreign wait. as far as the retail market is con- government gave most of the state- its parent group at end- August, he Bank for Reconstruction and Devel- investor perception of Russian risk deterio- “Whoever wants to and is ready, cerned and have naturally become a owned apartments built during the said. opment. rates and the carry trade fades or even reverses, better do it now,” he said at a meet- larger proportion of it. Demand for communist era to their residents Russia’s underdeveloped mar- Barring major structural changes, according to Sberbank CIB. ing with the head of Sberbank, Her- new and better housing will contin- after the Soviet Union collapsed a ket and banks’ insistence on large it won’t be able to grow at more than “Paradoxically, such a shift would be wel- man Gref. ue to fuel appetite.” quarter century ago. down payments should insulate the 2% a year, Sergei Guriev, the EBRD’s come as it would improve the competitiveness The message is resonating. Mort- Russia still has a long way to go to State-controlled banks Sberbank industry from the threat of a real- chief economist, said at a conference of local producers and encourage economic gage loans issued in the fi rst nine catch up with its peers. Outstand- and VTB Group, which together estate bubble fuelled by easy credit, in Moscow yesterday. development,” they said. Man or machine? Explaining copper’s extraordinary rally

By Andy Home that day at $4,649 per tonne and closed at $4,735. from producers to consumers to speculators, posi- London It has since recorded 14 consecutive days of higher tioned around that range. closes. Two weeks ago only Trump and his support- Breaches of those trading bands caused a mass ers really believed he would beat Hillary Clinton in repositioning with short positions closed out, long It will probably go down in the history books as the the race to the White House. positions put on, new short positions put on only Trump Rally. Copper is on course to record its big- The markets certainly weren’t pricing in a Trump to be closed out again as the price kept motoring gest weekly rally in 35 years. It’s a stand-out even victory. Rather, the copper market, particularly the upwards. One very public example was Goldman amid the turbulence that has rocked the broader speculative part of it, seems to have started reas- Sachs issuing a research note on Thursday saying financial universe. sessing the prevailing copper narrative of chronic it was closing out its short March 2017 copper vs Trading volumes have gone super nova. over-supply. March 2017 half unit zinc long position after reach- The London Metal Exchange (LME) has seen over There was a noticeable shift in mood during the ing a stop-loss of minus 8%. 205,000 lots trade on its benchmark three-month ensuing LME Week. Chinese demand, everyone “This was driven by losses on the copper leg contract since Monday, already an all-time weekly agreed, has been running at a much faster pace that more than off set the gains on the half unit zinc record and the week isn’t over yet. On the CME cop- than originally expected thanks to the govern- long,” the bank said.(“Metal Detector — Reflation per traded 256,017 contracts on Wednesday, also an ment’s early-year stimulus package. Rotation.” Secondly, many Commodity Trading all-time daily record. Supply disruption, conspicuous by its absence in Advisors (CTAs) plug chart technicals into their The entire global copper market, it seems, has the first half of the year, was suddenly back on the algorithms, causing a snowball eff ect as key resist- been repositioned from bear to bull territory in a agenda as the Q3 reporting season brought a series ance levels are taken out. matter of days. of production downgrades from major producers. Momentum trading funds then join the feeding And while there is no doubt the election of Don- And with LME inventory falling fast and Shanghai frenzy and high-frequency funds amplify the eff ect ald Trump as US President has acted as an accelera- Futures Exchange (ShFE) stocks low as well, there as they are programmed to pre-empt other auto- tor, there is more to this explosive price action than was little tangible sign of that much feared “wall- report in 2014. The weekly close on November 4 each break of these technical levels, a clustering of mated trading systems. as yet vaguely-defined promises of infrastructure of-copper”. Fund money started flowing into the was $4,991, the highest since April. historical resistance levels, long-term downtrend Think the copper market equivalent of Skynet, spending and reflation. copper market in ever increasing quantities. That close was right at one of those big-number lines and Fibonacci retracement points. the artificial intelligence network that takes over Copper’s extraordinary 20% (and still counting) The LME’s Commitment of Traders Report levels, $5,000 per tonne, so beloved of chart techni- Without going into the esoteric world of chart the world in the Terminator films. price surge has been as much machine-made as showed that the net money manager long position cians. Another key big-number level was at $5,100 analytics, there are two takeaways from such tech- man-made. This rally began last month. On October as of last Friday had already hit its highest level and an even hotter chart point was up at $5,400. nicals. Firstly, copper had been defined for almost a „ Andy Home is a columnist for Reuters. The views 25 to be precise. LME three-month copper opened since the exchange started publishing its weekly It’s noticeable that copper’s rally accelerated on year by range-trading with every part of the market, expressed are those of the author. Gulf Times Saturday, November 12, 2016 11 BUSINESS

Pound emerges as Indonesia central bank steps surprise winner after US election in currency, bond markets Bloomberg London

Bloomberg Governor Mirza Adityaswara told Kuala Lumpur reporters in Jakarta. nvestors’ concern about political shifts outside Indonesia’s 10-year sovereign Britain is benefi ting the pound. bond yield jumped 40 basis points, I Sterling has climbed against all of its 31 major ndonesia’s rupiah plunged to a the most since January 2014, to peers since last Friday. It’s the surprise winner during fi ve-month low, prompting the 7.88%, while the Jakarta Composite the week of Donald Trump’s electoral upset in the US Ination’s central bank to say it Index of shares sank 4%. that threw markets into turmoil as traders reappraised stepped in to stabilise the local cur- Mexico’s peso, South Korea’s populist movements and infl ation. The pound’s recent rency and bond markets. won, South Africa’s rand and Po- surge marks a reversal from last month, when it was The rupiah fell 1.1% to 13,288 land’s zloty dropped more than the worst performer, trailing behind 150 peers. per dollar in Jakarta, its biggest 1%, putting a gauge of emerging- As Britain’s currency heads for its best week in more decline since May 19, according to market currencies on course for than seven years versus the euro, investors are cooling on prices from local banks compiled its worst three-day rout since the shared currency before votes that may demonstrate by Bloomberg. 2011. the strength of anti- establishment movements in the re- It earlier dropped as much as 3%, Taiwan’s dollar and India’s ru- gion, particularly Italy’s constitutional referendum. the most on an intraday basis since pee fell at least 0.7% each and the “It’s very much about risk elsewhere: We have the September 2013, to a fi ve-month Philippine peso slid 0.6%. Italian referendum in early December, we have very low of 13,545. The prospect of increased important elections in Germany and France,” said Bank Indonesia offi cials con- spending under Trump’s presiden- Niels Christensen, chief currency strategist at Nor- fi rmed intervention after the rupi- cy propelled the Bloomberg Dol- dea Bank in Copenhagen. “Maybe approaching the ah declined with Asian currencies. lar Spot Index to the highest since US election, some people kept their long euro-ster- Sentiment toward emerging-mar- March on Thursday. ling positions, and now we see this positioning being ket assets soured on speculation The US could drop out of Trans- closed down,” he said, referring to wagers that the a Donald Trump- administration Pacifi c Partnership trade deal euro strengthens versus the pound. will lead to protectionism and within his fi rst 100 days in offi ce, Sterling climbed 0.8% to $1.2660 in London and prompt more aggressive tightening Politico reported, citing an internal was headed for its second week of gains versus the by the Federal Reserve. transition team document. greenback. It strengthened 1.2% to 85.77 pence per Malaysia’s ringgit dropped to “The rupiah fell in response euro, set for a 3.8% increase against the single cur- its weakest level since January and An employee counts rupiah banknotes at a money changer’s off ice in Jakarta. The rupiah plunged to a to declines in the region,” said rency in the week, the biggest since January 2009. India’s rupee sank to the lowest in five-month low yesterday, prompting the nation’s central bank to say it stepped in to stabilise the local currency Branko Windoe, head of treasury Traders reduced their short bets against the pound more than two months. and bond markets. at PT Bank Central Asia, Indo- as they wait for a Supreme Court hearing scheduled State-run banks sold dollars nesia’s largest bank by market for December 5-8 that potentially may result in a rul- on behalf of the Reserve Bank of moves today,” said Jeff rey Halley, a The rupiah weakened after a few deepening at the central bank, value. “We’ve seen since the US ing that delays Britain’s exit from the European Union. India, according to two Mumbai- market strategist at Oanda Asia Pa- short-term investors rushed to the said by mobile phone text mes- election, looking at the policies Short-pound positions versus the dollar, or bets based traders, who asked not to be cifi c Pte in Singapore. non-deliverable forwards market sage. The authority is ready to buy outlined during Trump’s cam- that the UK currency will fall, receded this month, identifi ed. “They’re not going to try to stand to hedge, causing the contracts to government bonds and intervene paign, people are trying to cal- after reaching a record-high level in October, accord- “It’s more a smoothing ac- in front of a freight train. We may drop signifi cantly, Nanang Hen- in the foreign-exchange market to culate the impact on Asia, espe- ing to Commodity Futures Trading Commission data tion because of the velocity of the see more of this going forward.” darsah, head of fi nancial market maintain stability, Senior Deputy cially on trade.” from the week ended November 1.

CORPORATE RESULTS Rosneft third-quarter net profit plunges 77% to $396mn

has €2.5bn available for acquisitions by the end of the year and The vast conglomerate posted an April-September net profit of any unused M&A budget could go on share buybacks, Chief ¥115.3bn ($1.08bn), well up from ¥37.3bn seen a year ago. Financial Off icer Dieter Wemmer told a media call. It also logged a ¥96.8bn operating profit, reversing a year-earlier M&A has cooled off in the insurance sector after a bumper year in loss, although it blamed a stronger Japanese currency and lower 2015, with many players saying valuations had become too high. sales of televisions and personal computers for a 4.3% decline in More asset management mergers are seen as likely, however, revenue to ¥2.58tn. after Britain’s Henderson last month announced a $6bn purchase A once-proud pillar of corporate Japan, Toshiba has been of US rival Janus Capital in the face of increasing competition besieged by problems, most notably a profit-padding scandal in from index-tracking fund firms with lower fees. which bosses for years systematically pushed subordinates to Any asset management acquisition had to fill a gap in coverage cover up weak financial results. by Allianz’s two fund managers, Pimco and Allianz Global Inves- In an intensive makeover eff ort, Toshiba has been shedding tors, Wemmer told Reuters by phone. businesses and announced the sale of its medical devices unit to He declined to comment on whether Allianz might be interested camera and off ice equipment maker Canon. in any parts of Deutsche Bank’s asset management business. Separately, China’s Midea Group has agreed to buy a little more There has been speculation that Deutsche might sell as it battles than 80% of Toshiba’s money-losing home appliances arm. a possible $14bn fine from US authorities. Japanese firms doing business abroad have also been hit by a Quarterly net profit rose from a year earlier to €1.86bn, above the sharp rally in the yen, which makes them less competitive over- average forecast of €1.58bn in a Reuters poll of banks and broker- seas and shrinks the value of repatriated profits. ages. Allianz confirmed its full-year target for operating profit of The company now expects an annual net profit of ¥145bn, up 45% €10.5bn, plus or minus €500mn. from an earlier estimate, on sales of ¥5.4tn. UBI Banca Petrobras Italy’s UBI Banca strengthened its core capital in the third quarter Brazilian state-controlled oil company Petróleo Brasileiro posted and said it was set to improve it further, although its net profit an unexpected third-quarter loss on Thursday after drastically dropped in the period on lower interest income and higher contri- reducing the value of oil fields and other assets amid a severe butions to a deposit protection scheme. downsizing and weak oil prices. Shares in UBI rose 4% yesterday bucking a 0.4% fall in Italy’s bank- Petrobras lost a net 16.458bn reais ($4.9bn) last quarter, five times ing stock index with analysts pointing to the stronger-than-expect- more than a year earlier. ed core capital ratio providing support. Italy’s fifth largest bank, UBI Despite that, operational and cash flow trends improved and, has come under the spotlight as it is expected to bid for three of without an impairment, profit could have totalled 600mn reais, four banks Italy rescued from bankruptcy in November last year. Chief Financial Off icer Ivan Monteiro told reporters. Russian oil giant Rosneft yesterday reported an unexpected col- mid-single-digit percentage returns that eclipse current interest However, the European Central Bank has asked UBI to raise fresh The numbers came as Chief Executive Off icer Pedro Parente lapse in profits in the third quarter, citing the diff icult situation on rates close to 0%. capital before carrying out the acquisition, sources have said. cleaned up a balance sheet with unrealistically priced invest- the commodity markets and export duties. Networks also require heavy expenditure on technology and The bank said the buyback of minorities to be paid for mainly in ments, whose losses were magnified by a stronger currency and The state-controlled company, which has up to now maintained eff iciency upgrades to cope with more renewable energy in the UBI shares as well as tax benefits from loan writedowns were set a rising cost of capital. The company shaved the value of assets comfortable profits despite the fall in oil prices, said that between wake of Germany’s energy shift away from fossil fuels. to add another 0.70 percentage points to the capital ratio. by 15.292bn reais and of investments by 417mn reais last quarter. July and September it made a net profit of 26bn roubles ($396mn, Innogy said that nine-month core profit (EBITDA) fell to €2.92bn Italian banks are generally viewed as undercapitalised, which “The message we want to convey is that these impairments are €366mn), 77% less than in the same period last year. ($3.18bn), partly because of a 3% rise in network investments to makes it hard for them to off load bad loans piled up during a non-recurring, and that we don’t expect them to happen, not at The figure was almost half of that predicted by analysts inter- €656mn, about 60% of its total capital expenditure. harsh recession as sales are normally carried out at a loss. least in this magnitude, in the coming future,” Monteiro said at an viewed by Interfax news agency. Between 2016 and 2018, grids will swallow 4.1bn euros of Innogy’s Net profit came in at €32.5mn ($35mn) in July-September, down event to discuss the results in Rio de Janeiro. Revenue was slightly above expectations despite being down 5% investments, nearly two thirds of the total. 14% from a year earlier. UBI’s net interest income, a measure of Petrobras, the world’s most indebted major oil firm, faces several at 1.2tn roubles ($18.7bn at the current exchange rate) due to a fall Last month’s initial public off ering (IPO), spinning off Innogy’s net- how much money a bank makes from its core lending business, hurdles including the lowest oil prices in a decade, a corruption in rouble prices partly compensated for by growth in production works, retail and renewables units, was designed to ease pressure fell as UBI cut its securities portfolio by a further €1.2bn compared scandal highlighting governance flaws and losses incurred over to 5.2mn barrels per day. on RWE’s stretched balance sheet and to benefit from Innogy’s to April-June. many years because of government-mandated fuel subsidies and The company’s head Igor Sechin was quoted as saying in a state- stable dividend. RWE’s reliance on Innogy, in which it retained However, the third-quarter marked an improvement after a first- money-losing investments. ment that “the environment on the commodity markets remained a 76.8% stake, stems largely from the struggles of core power half loss of €787mn loss triggered by loan write-downs and layoff Analysts expected on average profit of 1.517bn reais. US-traded diff icult” in the third quarter. generation operations, which have come under intense pressure charges. common shares in Petrobras slumped on the news, shedding Sechin said that the company’s profitability also suff ered from the from renewables and a steep decline in wholesale prices. Toshiba 8.7% and reaching their lowest level since June. “significant eff ect” of a time lag on export duties. However, since listing on October 7, Innogy stock has dropped by Parente’s steps to grow output in some off shore fields, cut debt Rosneft said it suff ered indirectly from a rebound in oil prices in 14%, with analysts citing falling returns on its grids, competition in Toshiba said yesterday its half-year profit tripled, owing to cost and keep expenses in check helped mitigate the company’s loss. the second quarter which led to higher tariff s being applied in the renewables and low margins at its retail unit. cuts and the sale of its home appliances business, providing a Asset sales and a sharp reduction in capital spending commit- third quarter. The company has pledged to pay out 70-80% of adjusted net boost to the firm as it tries to turn the page on an embarrassing ments also allowed Petrobras to cut gross debt by about 19% With the company chief Sechin a powerful ally of President income for dividends, which would mean a payout of €1.39-€1.58 accounting scandal. since the end of last year to 398.2bn reais. Vladimir Putin, the company in October faced down opposition per share, based on its forecast for 2016 adjusted net income of from some in the government and bought a majority stake in about €1.1bn. Bashneft oil producer which had been held by the state. Allianz Sechin in Friday’s statement said of the Bashneft acquisition that Rosneft would make its “best eff orts to maximise the synergy Europe’s largest insurer Allianz signalled it might return cash to potential from this asset integration.” shareholders after reporting forecast-beating quarterly earnings Innogy yesterday and the first positive flows into US bond fund manager Pimco in over three years. Germany’s Innogy reported a 7% fall in core profit yesterday, The performance follows strong quarterly profits from European hitting the power utility’s shares and those of struggling parent rivals Zurich and Generali as insurers adjust their strategies and RWE. Innogy’s performance represents a significant blow for investment portfolios to cope with low interest rates. RWE, which is grappling with debt of more than €28bn ($30bn) Pimco reported third-party net inflows of €4.7bn ($5.1bn) in and last month listed a minority stake in the business on which it the third quarter, advancing for the first time since the second relies for stable returns. quarter of 2013. “The most positive news...is that asset manage- Shares in Innogy were down 3.9% at €31.49 yesterday. RWE, ment and in particular Pimco has stopped net outflows,” DZ Bank meanwhile, declined 1.5% to €12.49, the third-biggest faller on analyst Thorsten Wenzel said in a note, leaving his “Buy” recom- Frankfurt’s benchmark DAX index. mendation unchanged. The shares are also coming under pressure from growing expec- Globally, mutual fund assets under management had risen 6.9% tations of higher interest rates. in the year to end-September, data from Lipper showed, with With markets now betting on a rise in global inflation after Donald most of the money — $410bn — heading into bond funds. Trump’s victory in the US presidential election, the low but stable Pimco has experienced several years of cash withdrawals in returns off ered by utilities that have a large proportion of regu- several of its main funds, including its flagship Pimco Total Return lated assets will lose their appeal to investors. Fund. Co-founder Bill Gross, known as “the Bond King” during his “We have seen a sell-off at utility shares that have lot of regulated years at Pimco, left in 2014 for Janus Capital. business,” Innogy Chief Financial Off icer Bernhard Guenther said Pimco has hired Emmanuel “Manny” Roman from Man Group, the on Friday, pointing to British peer National Grid, the shares of world’s biggest listed hedge fund, as its chief executive off icer. Ro- which fell sharply this week. man started at the bond manager only last week. “This is due to fears that interest rates will rise again.” Allianz’s shares rose more than 2% towards the top of Germany’s About two thirds of profits at Innogy, Germany’s largest energy DAX index after quarterly net profit rose 37% from a year earlier group, come from regulated gas and power grids, which off er due to strong performance across business classes. The insurer Saturday, November 12, 2016 GULF TIMES BUSINESS

QSE WEEKLY REVIEW Islamic stocks surge about 2% in an otherwise flat trajectory on bourse

By Santhosh V Perumal Ever since the initial rout, the Gulf Opening the week weak at 9,949 points, banks and financial services shrank 1.85%, Bank, Doha Bank and Qatar First Bank to QR131.76mn and transactions by 4% to Business Reporter bourses were by and large resilient, the market nevertheless saw gains for insurance (1.53%) and realty (0.06%) dur- were among the losers. 1,857. although investors have adopted a cau- the subsequent two days to reach a high ing the week. Foreign institutions’ net buying There was 15% expansion in the real tious approach, waiting for clear signals of 9,985 points on Tuesday. There was an Market capitalisation was however increased substantially to QR684.55mn estate sector’s trade volume to 7.65mn Islamic stocks surged about 2% in an oth- from Washington on its interest and oil initial plunge of more than 2% on Wednes- down 0.1% or QR52mn to QR535.8bn dur- compared to QR513.63mn the week ended shares and 19% in value to QR165.73mn erwise flat trajectory on the Qatar Stock exploration policies in the medium term. day on the US developments but managed ing the week. November 3. but on 7% fall in deals to 3,731. Exchange during the week, which saw During the week, industrials, telecom to recover much of the lost grounds but to Of the 44 stocks, as many as 23 rose, Non-Qatari individual investors’ net The insurance sector’s trade volume Gulf bourses by and large discount the US and consumer goods counters witnessed settle down marginally. while 17 fell and four were unchanged. buying strengthened to QR9.34mn against enhanced 11% to 0.89mn equities, value election results. higher than average buying interests from The continued net selling drove the Seven each of the nine consumer goods QR5.99mn the previous week. by 16% to QR49.03mn and transactions by A sustained stronger net buying by for- investors. index further down on Thursday but and the eight industrials, three of the 13 However, domestic institutions’ net 40% to 482. eign institutions notwithstanding, the lo- Trade turnover and volumes were on overall it reported about five-point gains banks and financial services, two each of profit booking strengthened considerably The market witnessed 10% increase in cal bourse managed to gain a mere 0.05% the rise during the week which witnessed during the week. The Qatari bourse has the five insurers and the four real estate, to QR679.34mn compared to QR527.5mn the industrials sector’s trade volume to during the week, which saw Donald Trump banking, industrials, telecom and real however reported year-to-date losses of and one each of the three transport and the week ended November 3. 11.26mn stocks, 7% in value to QR577.78mn emerge victorious as the US president, estate together constitute more than 88% 4.49%. the two telecom stocks settled higher Local retail investors turned net sellers and 19% in deals to 4,198. which led to an initial panic selling in the of the total volumes. Al Rayan Islamic Index had risen during the week. to the tune of QR14.73mn against net buy- However, the transport sector’s trade global bourses. However, domestic institu- In volumes, the banks and financial 1.98% and the 20-stock Total Return More than 52% of the stocks extended ers of QR7.72mn the previous week. volume plummeted 35% to 1.06mn shares, tions’ net profit booking strengthened and services constituted 26% of the total, Index by a marginal 0.05%; while All gains with major movers being Industries Total trade volume rose 17% to 46.78mn value by 38% to QR32.81mn and transac- local retail investors turned bearish during followed by industrials (24%), telecom Share Index (comprising wider constitu- Qatar, Qatari Investors Group, Aamal Com- shares, value by 14% to QR1.8bn and trans- tions by 10% to 822. the week. (19%), real estate (16%), consumer goods ents) was down mere 0.01% during the pany, Gulf International Services, Ooredoo, actions by 2% to 18,574 during the week. The consumer goods sector reported “There have been inconsistencies in (10%), transport and insurance (2% week, which saw banking and telecom Barwa, Mazaya Qatar, Masraf Al Rayan, The banks and financial services sector 19% plunge in trade volume to 4.88mn his (Trump’s) approach in his campaigns, each). stocks make faster expansion in trade Nakilat, Qatari German Company for Medi- saw 61% surge in trade volume to 12.33mn equities, 27% in value to QR278.27mn and which is leading to more uncertainties. In value, industrials’ share was 32%, volumes. cal Devices, Medicare Group, Widam Food equities, 84% in value to QR560.86mn and 37% in deals to 2,091. This rather aff ected the sentiments of es- banks and financial services (31%), con- Industrials sector saw its index surge and Islamic Holding Group. 25% in deals to 5,393. In the debt market, there was no pecially domestic institutions,” an analyst sumer goods (15%), realty (9%), telecom 3.2%, telecom (2.56%), consumer goods Nevertheless, QNB, Qatar Insurance, The telecom sector’s trade volume trading of treasury bills and government with a leading brokerage company said. (7%), insurance (3%) and transport (2%). (1.52%) and transport (0.14%); whereas Ezdan, Vodafone Qatar, QIB, Commercial surged 24% to 8.7mn stocks, value by 12% bonds during the week.

PostFinance In wake of Trump win, to charge focus may drift back millionaire deposit holders

Reuters chief executive Hansruedi Ko- Zurich eng said, reminding clients to Fed and infl ation it had paid attractive interest rates and fees for years. Reuters wiss bank PostFinance “We too are pained by the Bengaluru will start charging private fact that this is no longer pos- Scustomers for holding de- sible to the same extent due posits of more than 1mn Swiss to negative interest rates, fter Donald Trump’s un- francs ($1mn), it said yesterday, the lending prohibition and expected victory in the blaming the impact of the Swiss the costs incurred by stricter AUS presidential elec- National Bank’s negative inter- regulatory requirements,” he tion, investors may refocus in est rates policy. added. the coming week on the health Switzerland has the high- Unlike most rivals, Post- of the world economy and any est density of millionaires in Finance cannot by law make signs that years of rock-bottom the West, with nearly 10% of mortgage loans, which restricts interest rates and fi scal austerity all households having $1mn or its ability to off set the 0.75% are coming to an end. more. rate the SNB charges banks for Trump’s victory poses a major A study by consultancy excess deposits and which has challenge to the conventional Capgemini this year estimated cost PostFinance more than wisdom on the global economy, that there were 358,400 people 10mn francs this year. which for years has relied on in Switzerland with a net worth But even UBS, the world’s brisker cross-border trade and of more than $1mn. biggest wealth manager, said migration fl ows for growth. Almost all Swiss banks have in September it could pass on Apart from a nearly across- refrained so far from imposing negative interest rates to more the-board rise in sovereign bond negative rates on ordinary retail depositors if Switzerland’s cen- yields, however, the markets customers, although some do tral bank persists with sub-zero have so far mostly shrugged off for very large cash holdings by rates. the election result — despite wealthy private clients. The SNB has since January previous fears of a meltdown in But PostFinance, the bank- 2015 used negative rates and the event of victory for Trump, ing arm of the Swiss Post Of- market interventions to tame who espoused fi ercely protec- fi ce, will from the start of Feb- the Swiss franc’s exchange rate, tionist positions on trade in his ruary levy a 1% annual fee on whose strength hamstrings the campaign. The US Federal Reserve building in Washington, DC. Fed chair Janet Yellen’s testimony to Congress on Thursday may set the stage for a deposits of above 1mn francs, it export-led economy. Even the long-held view that year-end hike, despite the mild tightening in financial conditions in the past week. said on its website. The policy has come under the Federal Reserve will raise “The assets in all private and fi re from banks and pension rates next month, a year after less rate was 4.9% in October — above its levels around 1.86% lar to a preliminary reading but Crucial too for the rate trajec- savings accounts will be taken funds, but has been defended its initial step in that direction, Trump’s election promise to cut just before the US election on above recent lows. tory is the future of Janet Yellen, into account. Most private and by the SNB as necessary. hasn’t budged at all. taxes and upgrade the country’s Tuesday. The gradual rise in infl ation in appointed by President Obama business customers will remain “The SNB takes these con- Fed chair Janet Yellen’s testi- ageing infrastructure could pro- The surge has strengthened recent months will be welcome as Fed Chair. exempt from the fee on the cerns very seriously,” SNB mony to Congress on Thursday vide a big boost to both growth the dollar against the euro and news for the European Central A Reuters poll a few days ago credit balance,” it said as part chairman Thomas Jordan said may set the stage for a year-end and infl ation. yen, which would ultimately Bank which, after printing more found a majority of economists of a range of fee hikes and rate last month, but noted “gener- hike, despite the mild tighten- Offi cial US data on Thurs- help raise import costs in the eu- than a trillion euros since March expect Yellen to serve out the cuts. ous” exemptions from negative ing in fi nancial conditions in the day will likely show consumer rozone and Japan. 2015 and cutting deposit rates to remainder of her term until early “I appreciate that these rates on banks’ deposits at the past week. price index infl ation picked up If infl ation moves higher from -0.4%, is fast seen running out 2018 but don’t think she will be measures will not be very pop- SNB let them decide whether Everything is up for reassess- slightly last month, up 0.4% on here, supported by fi scal stimu- of policy tools. reappointed. ular amongst our customers. and how much to pass on nega- ment. the month and 1.6% on the same lus and rising energy prices, the The ECB’s Governing Council “What is relatively clear is Nobody likes paying fees,” tive rates to clients. “It will take time to gauge the month last year. current back-up in bond yields next meets on December 8 to de- that there will be confl icts be- global economic consequences Core infl ation, which strips across the developed world is set cide policy. tween a Trump administration of Donald Trump’s surprise vic- out food and energy, is expected to continue, possibly suggesting Economists expect it to ex- and Fed Chair Janet Yellen after tory,” JP Morgan’s chief global to hit 2.2%. an end to a three-decade trend tend its asset purchase pro- Trump had severely attacked German economy likely economist Bruce Kasman wrote That follows pre-election of falling yields. gramme beyond the planned end Yellen in his election campaign. in a note. news of a pickup in average pay It is still early days, however. date of March 2017. The bridges between both “Forthcoming policy changes growth to 2.8%, the highest Starting on Monday, it will A snap Reuters poll conducted of them appear to have been grew in Q3 despite Brexit are likely to generate growth since June 2009. become clearer how industrial- in the 24 hours after the US elec- burnt,” Jorg Kramer, chief econ- cross-currents, but they should Retail sales data due out on ised economies such as the euro tion result indicated no change omist at Commerzbank, wrote Reuters Germany’s most important reinforce the tilt toward global Tuesday are expected to have zone, Germany, Italy, and Japan at all in the expected future path to clients. Berlin export market, accounting refl ation.” Trump’s proposals lost a little steam last month. fared in the third quarter — be- for the policy rate. Britain’s Prime Minister for roughly 10% of its sales represent both a negative supply Sovereign bond markets are fore the US political earthquake. A series of Fed policymakers Theresa May is scheduled to abroad. In 2015, German shock from curbs on trade and already out of the blocks in pric- Reuters polls show growth are scheduled to speak in the travel to Berlin on November 18, The German economy likely companies sold goods worth immigration as well as a positive ing in a rise in infl ation expecta- largely held steady in the eurozone coming week and are likely to a trip in which she possibly hopes expanded moderately in €114bn to the US — mainly demand shock from new fi scal tions in the United States fol- despite a slowdown in Germany, reinforce the view that the fed to get preliminary talks underway the third quarter despite vehicles, machines and spending, he added. lowed by the rest of the world. and picked up slightly in Japan. funds rate will move up 25 basis that would help the UK smoothly the sense of uncertainty chemical products. With the US economy close The 10-year US yield rose to Infl ation was probably 0.5% in points to a range of 0.50-0.75 at navigate the process of leaving created by Britain’s vote to Germany’s Ifo institute to full employment — the job- 2.15%, almost 30 basis points October in the euro area, simi- the December 13-14 meeting. the European Union. leave the European Union estimates that more than 1mn — a sense now added to by jobs in Germany are linked Donald Trump’s victory in to those exports that could the US presidential election, shrink if Trump acts on his the Economy Ministry said protectionist words. Bankers start to question Iceland’s ballooning currency reserves yesterday. “Overall economic Recent economic data has output is expected to have painted a mixed picture of the Bloomberg imbalance can have an impact on eased when parliament approved the the economy alongside capital account increased slightly in the third German economy. While factory Reykjavik the central bank’s equity and thereby governments bill on October 21 and liberalization, the $17bn economy has quarter,” the ministry said in orders dropped unexpectedly the Treasury, indirectly,” he said in an further steps will be lifted on January 1. experienced such inflows that the krona its monthly report. and industrial output fell more interview. “The Treasury is taking an The central bank estimated that these has risen 15% since the beginning of the Industrial output steadied than forecast in September, As Iceland sets itself up for a final exit exchange rate risk with the reserves. first steps could result in outflows of year against the euro. in the three months to sentiment surveys have shown from capital controls, the nation’s There hasn’t been much discussion on 40bn kronur to 165bn kronur. “There hasn’t been much movement in September, the labour market a more rosy outlook. bankers are starting to question the costs how much exchange rate risk the central For the central bank, the benefits are the market, which is positive and in line remains robust and private Suggesting initial concerns involved. bank is allowed to have and for how clear because the reserves promote with the central bank’s expectations consumption continues to about the impact of the Brexit The central bank holds 760bn kronur long.” stability, according to spokesman Stefan that this would be a non-event,” he said. support growth in Europe’s vote may have been overdone, ($6.8bn) in foreign exchange, up by more The stockpiles it has amassed are more Stefansson. “We’re actually a bit surprised by how largest economy, which morale among company than 29% in a year and 62% from 2014. than adequate now for the bank fully “It’s the objective of the central bank little the change has been — we can should help to cushion against executives hit its highest It’s buying the inflow of currency from a dismantle capital controls, the CFO of the to maintain stability, as you know, so hardly measure any movement.” external shocks, it said. level in 2-1/2 years in October, tourism boom, in order to keep the krona country’s second-largest bank said. we have to evaluate potential gains The steps ahead now are clear, and they Brexit and the unexpected according to the latest Ifo in check and to build buff ers for when the Iceland announced in August it was against costs,” he said. “This can be include removing some “bureaucracy,” victory of protectionist business climate index. last controls are removed. For now, that’s easing restrictions on investments hard to evaluate — there’s always some according to Omarsson. Trump have jolted politicians, Last week’s purchasing costing the country money, according abroad for households and that it uncertainty.” “By year-end they’ll take another step business leaders and markets managers survey showed the Jon G Omarsson, chief financial off icer at would open up for outward direct But Omarsson said the bank could be and if that goes as well as this step, they’ll in Germany and elsewhere private sector expanded at its lender Islandsbanki. investments. overstating the problem. soon be able to take even larger steps,” around the world. second-fastest monthly rate “When reserves are this big the A slew of restrictions were also Especially since instead of outflows from he said. The United States is this year in October.