Fed Tees up March Hike As Key Policymaker Shifts Tone
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PRICE PRESSURES | Page 5 FED SIGNS | Page 12 Infl ation spike US jobless worries SE Asia claims near central banks 44-year low Friday, March 3, 2017 Jumada II 4, 1438 AH MORE DEPENDENT : Page 3 GULF TIMES Russia seen dominating European gas market BUSINESS for two more decades ‘Healthcare sector being extended and Fed tees up March hike as reformed in Qatar’ By Pratap John key policymaker shifts tone Chief Business Reporter Qatar’s healthcare sector is being extended and reformed, Reuters and the country is making eff orts to further regulate medical Boston/San Francisco devices, BMI Research has said in a report. Despite a weaker economic outlook due to the collapse of oil prices, Gulf Cooperation Council (GCC) markets dominate he Federal Reserve is setting the BMI’s MENA Medical Devices Risk/Reward Index, with the UAE stage for a US interest-rate increase being the most attractive market in the region, followed by Tlater this month, with the central Qatar. bank’s leading voice on international eco- The UAE has substantial private and public sector investment nomics saying the global economy seems plans ahead of Dubai’s Expo in 2020, and Qatar will ensure to have turned a corner, clearing the way continued public sector spending ahead of the FIFA World Cup for a hike “soon.” in 2022, BMI said. “After being an important constraint in Although the Qatar market is “small”, BMI said, it mostly the past few years, the external environ- driven by large health infrastructure projects, but per capita ment currently appears more benign than expenditure is high. Due to limited domestic production, the it has been for some time, even though market relies on imports. risks remain,” Fed governor Lael Brainard The small population, mainly urban, has been driven by non- said Wednesday in an address at Har- Qataris. The age structure is only pyramidal for the Qatari vard University. “Assuming continued population. progress, it will likely be appropriate soon The healthcare sector is being extended and reformed, and to remove additional accommodation, the country is making eff orts to further regulate medical continuing on a gradual path.” devices. The speech marks a shift from the cau- “Lower hydrocarbon prices do not present a significant threat tious, dovish tone that Brainard has used to Qatar’s fiscal sustainability but the government will seek to in many of her recent speeches, and adds tighten control over public spending, currently focused on the an important voice to the chorus of offi - FIFA World Cup in 2022,” the Fitch Group company said. cials signalling rates may rise when the Fed Islamic law is the basis of the legal system, and Qatar scores next meets in mid-March. well in terms of business transparency, it said. Several Fed speakers so far this week In terms of the wider region, BMI said Mena (Middle East and have already succeeded in boosting the North Africa) “underperforms the global scores” for industry market pricing of a March hike to 70% rewards as well as country rewards. from 20% last week. Mena is the second least attractive region in the world in Coupled with the comments of other which to commercialise a medical device. Fed offi cials in recent days, and looking On the other hand, BMI said the GCC markets off er the best ahead to remarks by Fed Chair Janet Yellen prospects, as reflected in their dominance of the top spots in today, Brainard’s comments will likely Federal Reserve board governor Lael Brainard speaks at the John F Kennedy School of Government at Harvard University in its new Medical Devices Risk/Reward Index (RRI). help cement sentiment that the Fed will Cambridge, Massachusetts on Wednesday. The speech marks a shift from the cautious, dovish tone that Brainard has used in many Iraq and Egypt, with low industry and country risks scores, raise rates in two weeks. of her recent speeches, and adds an important voice to the chorus of off icials signalling rates may rise when the Fed next meets in languish at the bottom of the regional Index. “I believe the economy is strong enough mid-March. It is a small medical device market in the global context, led that we can manage it,” Dallas Fed presi- by Saudi Arabia, the UAE and Iran. The non-GCC sub-region dent Robert Kaplan, a voting member this ley said on Tuesday that the case for a rate Policymaker forecasts after the Fed’s On Wednesday, Brainard referred to ex- is increasing its market share at the expense of the GCC year on the Fed’s policy committee, said hike has become “a lot more compelling” December 2015 rate hike pointed to four pected expansive fi scal policy as an “up- sub-region, weighted down by a slowdown in Saudi Arabia. earlier on Wednesday. “We should begin and San Francisco Fed president John Wil- more rate hikes in 2016. side” risk. The population is growing steadily but the proportion of the the process sooner so we can ensure that it liams said a rate hike would be seriously The Fed managed just one. And indeed the view among Fed policy- population aged 65 and over remains small. A significant level is gradual and patient.” considered at the March meeting and that What is different this year is that trad- makers appears to be that further policy of urbanisation off ers good prospects, it said. This week has an unusually high con- he sees no reason to delay. ers are actually falling into line with the tightening is appropriate regardless of any Mena also underperforms on industry risks and country risks, centration of Fed speeches, with four out The message from Fed offi cials, along March rate-hike view and the Fed’s cur- potential fi scal boost, as infl ation edges the BMI report said. of fi ve Federal Reserve governors - includ- with data showing stronger infl ation and rent forecast for three rate hikes this higher and the economy nears the Fed’s The healthcare system in countries such as Iraq has suff ered ing chair Janet Yellen - speaking ahead of manufacturing activity, has bolstered bets year. goal of full employment. because of the ongoing conflict. With rising healthcare costs the March 14-15 rate meeting. that the Fed would in two weeks make the The US central bank left rates un- Raising rates in March gives the Fed and lower oil prices in countries with oil wealth, private health New internal Fed rules on public com- fi rst of the three rate rises it expects this changed at its January meeting, and had room to deliver more rate hikes should expenditure is rising to stave off the erosion of state revenues. munications make today the last chance to year. not been expected to move again until May Trump’s policies bolster growth, or to Economic growth across Mena will pick up in 2017 with a few set up market expectations before the next The messaging appears to have aligned or June in part because so little is known pause should they slow the economy or notable exceptions such as Saudi Arabia, while Iran will be the Fed meeting. fi nancial markets with the Fed. That has about US President Donald Trump’s fi scal if this year’s European elections unsettle economic outperformer. New York Fed president William Dud- not happened in past years. plans. markets. Iraq February oil exports up despite Opec cuts Second tranche of QSE transition to EM from March 19: FTSE Russell By Santhosh V Perumal weight from 20% to 28% as the sum secondary emerging market index. Business Reporter of restricted shareholders is “more re- They were Aamal Company, Al Meera strictive than the offi cial foreign own- Consumer Goods Company, Barwa, ership limit”. Commercial Bank, Doha Bank, Ezdan lobal index compiler FTSE Rus- Another constituent, Qatari Inves- Holding Group, Gulf International sell has said the second 50% tors Group would retain an unchanged Services, Industries Qatar, Masraf Gtranche of Qatar Stock Ex- investable weight due to it “failing the Al Rayan, Medicare Group, Ooredoo, change-listed stocks transitioning into headroom test” (which is done on a Qatar Electricity and Water, Nakilat, emerging market (EM) will take place quarterly basis), it said. Qatar Insurance, QIIB, Qatar Islamic with eff ect from March 19. As per FTSE, Qatar, with high per Bank, QNB, Milaha, Qatari Investors “As the QSE is closed on Friday, capita income, comes under invest- Group, Salam International Invest- 17 March 2017, the March 2017 index ment grade in creditworthiness and ment, United Development Company review changes for Qatari securities has suffi cient broad market liquidity and Vodafone Qatar. within FTSE Russell indexes will be to support sizeable global investment As many as 10 stocks were classifi ed based on the closing price from Thurs- and also has “reasonable and compet- under large cap and they are: Barwa, day, March 16, 2017,” said the London itive” implicit and explicit transaction Ezdan, Industries Qatar, Masraf Al Stock Exchange group entity. costs. Rayan, Ooredoo, Qatar Electricity and Flames emerge from flare stacks at the oil fields in Basra, Iraq on January 17. Iraq’s crude exports rose 1% by In February this year, FTSE Russell Moreover, Qatar’s bourse, which Water, Nakilat, Qatar Insurance, Qatar volume in February, contrasting with a decrease in monthly shipments by Saudi Arabia after both countries had confi rmed that the second 50% follows T+3 settlement system, has Islamic Bank and QNB. agreed to Opec’s plan to cut oil production in an eff ort to prop up prices and trim a global oversupply, Bloomberg tranche of Qatar transitioning to sec- suffi cient competition in brokerage Similarly, 10 equities were classi- reported.