IMF LOAN | Page 2 MASALA ISSUE | Page 4 It’s cheap Brics bank to food or ‘hell’ sell $500mn in Egypt rupee bond

Sunday, October 16, 2016 Muharram 15, 1438 AH GLOBAL VALUE: Page 20 Kia Motors rises to GULF TIMES 69th in Interbrand’s 2016 Best Global BUSINESS Brands report Large fi nancial buff ers seen aiding mega Qatar infrastructure projects

By Pratap John fi cation in Qatar and will continue to ing cuts, tightening liquidity conditions, expansion. BMI Research also expects Chief Business Reporter drive the country’s GDP growth over the and widespread investor uncertainty, the GCC countries to increasingly turn next decade. BMI said. to the external bond markets for fi nanc- That said, Auberty felt that growth From 2017, it expects a notable diver- ing, in order to rebalance defi cit cover- iven Qatar’s large fi nancial buff - rates would remain well below aver- gence in growth between these states, age away from foreign exchange reserves ers, main infrastructure projects age annual growth of 13% seen between with the UAE and Qatar outperforming, while easing the pressure on domestic Gin the country will carry on, a 2005 and 2014. while Saudi Arabia will be the laggard. banks. senior analyst has said. For Qatar, huge fi nancial reserves and Nearly two years after the start of the Saudi Arabia is reportedly seeking to “As such, we do not expect Qatar to still-strong revenues from the country’s collapse in global energy prices, the eco- borrow up to $8bn from international signifi cantly draw down on its reserves gas sector will ensure continued public nomic outlook for the six GCC econo- banks before the end of the year, and we or assets,” said Raphaele Auberty, Mena sector spending ahead of the FIFA World mies has clearly deteriorated. Corporate expect the country to rapidly emerge as Country Risk analyst at BMI Research. Cup in 2022. sectors across the region are facing a the preeminent debt issuer of the Mena “We do not believe that Qatar’s com- This, along with a temporary blip in much more challenging environment, region over the coming years. mitment vis-à-vis FIFA World Cup 2022 real hydrocarbon growth as phases one amid waning fi scal support to the econ- However, it said reliance on foreign are at risk, with projects fi nanced by an and two of the Barzan gas project are omy; rising fi nancing costs due to tight- debt will increase even as fi nancing con- increase in non-oil revenue –through fi nalised, will ensure that Qatar’s eco- ening liquidity conditions; higher fuel ditions across the region harden, on the the introduction of a value-added tax in nomic growth trajectory remains well and utility costs; and the new strains on back of a continued stream of down- 2018 and new fees on expatriates – and above that of other GCC states, BMI Re- consumers’ purchasing power. grades to the GCC countries credit pro- by debt issuance,” Auberty told Gulf search said. While BMI Research does not expect fi les from the major credit rating agen- Times. All six Gulf Cooperation Council any of the region’s economies to fall into cies, the Fed’s interest rate hikes, and These infrastructure-related projects, economies will record a sharp slowdown recession this year, growth will slow more modest support from local inves- he said, are crucial to economic diversi- this year and 2017, amid public spend- considerably after half a decade of rapid tors. Gulf Times 2 Sunday, October 16, 2016 BUSINESS It’s cheap food or ‘hell’ as Egypt awaits loan lifeline from IMF IMF says Egypt must still cut at Cairo-based investment bank Mul- cluding the IMF deal, Prime Minis- subsidies, address exchange rate; tiples Group. “The spike in infl ation is ter Sherif Ismail told Bloomberg on off icials worried reforms could fuel squeezing people like never before.” Thursday, without giving details. It’s unrest among poor Egypt’s infl ation rate has been 14% not there yet. Initial approval came or higher since June, levels unseen this in August but this month the fund’s Bloomberg decade. It’s partly driven by a collaps- chief, Christine Lagarde, pointedly Cairo ing currency: The dollar trades on the tied fi nal signoff to the exchange rate black market at a 75% premium to the and subsidy moves. offi cial rate. El-Shenety said that the Those may add to public dissat- hen talk-show host Amr IMF-backed measures could push in- isfaction with a government has al- Adib went on Egyptian TV fl ation above 20%. ready imposed a new value-added tax Wto beg food companies to And he said that possibility may be and raised electricity prices by almost cut prices, he sounded an apocalyp- spreading doubt among key actors in 50%. That’s where the push to lower tic note. “We must all stand together,” the Egyptian regime about the wisdom food prices comes in. Adib said. Otherwise, society falls of signing up with the IMF. “The se- The country’s biggest listed dairy apart, “hell breaks loose, the fi re will curity bodies of the state are probably and juice producer, Juhayna Food consume us all.” worried that the economic grievances Industries, cited “price surges that Egypt’s government keeps media on will merge with the political grievances Egyptians suff er from” as its motive a tight leash, so the message probably of certain groups and result in chaos,” for responding to Adib’s call with a had offi cial backing. And sure enough, El-Shenety said. 20% discount on one of its milk prod- two days later, a group of foodmakers El-Sisi hardly needs reminding how ucts. Cheese-maker Arabian Food In- announced price cuts on air. The prob- dangerous those grievances can be, dustries Co, known as Domty, gave the lem for President Abdel-Fattah El-Sisi and how real is the risk of chaos. The same reason for a similar cut on feta is that he’s under pressure to take ma- former army chief came to power in cheese. jor economic decisions that will have 2013 after massive protests against his The companies are trying to “evade exactly the opposite eff ect, pushing the Islamist predecessor. Just two years public pressure by cutting prices on cost of living sharply higher. before that, Egyptians toppled the certain basic products that don’t have The International Monetary Fund longtime ruler Hosni Mubarak, gath- a big impact on them,” said Radwa has spelled out what Egypt needs to ering in their millions in streets and El-Swaify, head of research at Pha- do to fi nalise a $12bn deal: Act on the squares across the nation to demand ros Holding. “They can’t aff ord to cut exchange rate and subsidies – code liberty, justice – and bread. A bakery worker rides a bicycle as he carries fresh bread on his head in Cairo (file). The Egyptian president has repeatedly prices across their portfolios.” So as words, economists and investors agree, The president has repeatedly in- instructed off icials to ensure that the poorest Egyptians aren’t aff ected by eff orts to trim budget deficits. Authorities have a palliative, the food-price campaign for devaluing the pound and removing structed offi cials to ensure that the been stockpiling key commodities, including fuel and sugar, to safeguard against possible price gouging. But discontent may have little impact. caps on fuel prices. El-Sisi’s govern- poorest Egyptians aren’t aff ected by remains widespread. Even if El-Sisi and Lagarde see ment presents the IMF loan as proof eff orts to trim budget defi cits. Author- things diff erently, the IMF program that Egypt’s open for business again, ities have been stockpiling key com- ed, 50, outside a government-owned The pound has been weakening on as a complement to its own lending. will probably get done. That’s because, after six years of turmoil. But anything modities, including fuel and sugar, to discount supermarket. She dismissed on the black market at an acceler- That’s been achieved, offi cials said with a population of more than 90mn, that adds to already-high infl ation safeguard against possible price goug- the eff ectiveness of eff orts like Adib’s ated pace in the past week, partly on Thursday: Egypt has the $6bn that the the country can’t be allowed to col- risks stirring yet more unrest. ing. But discontent remains wide- broadcast demand for cheaper food: expectations of an imminent devalu- fund required, with a third of it coming lapse into chaos, according to Raza “There is a general dissatisfaction spread. “These campaigns are a lie,” she said. ation. A rare public spat with Saudi from Saudi Arabia. The money is need- Agha, chief economist for the Middle with the economic performance of the “We are close to begging. our income “Prices keep going up and we don’t Arabia, which has been El-Sisi’s chief ed to bolster foreign reserves, which East and Africa at VTB Capital in Lon- government, a lot of promises have isn’t enough to complete the month know what to do.” fi nancier, raised doubts about the gov- are down by more than 40% from end- don. been made without bearing fruit,” said and we have to borrow to make ends But if the IMF-backed measures car- ernment’s ability to secure cash from 2010 levels. “Nobody wants Egypt to fail,” he Omar El-Shenety, managing director meet,” said housewife Fatma Moham- ry risks, so does delaying them. other sources that the IMF is insisting Egypt is “getting closer” to con- said. Tired of China’s seasoned grip, Saudi said to Iran confronts harsh oil reality weigh easing

Bloomberg will provide opportunities and to solve,” Moazami said. It is relationship further, hoping to reduce the military’s economic London chances for others.” unclear whether new US guide- rebuild its ancient Silk Road footprint. The tension illustrates a more lines on sanctions published trade routes to Europe. In Janu- Nowhere has this complex Chinese-Iranian relationship curbs on nuanced situation in post- October 7 will change the situ- ary, President Xi Jinping was mid the snake-infested sanctions Iran than is often ation. the fi rst world leader to visit played out more clearly than in marshlands on Iran’s presented. Many in the US, in- A “sense of being cheated” Tehran after sanctions ended, the marshes and deserts of the Aborder with Iraq, the cluding Donald Trump, portray by the West is slowly sinking in promising $600bn of trade over North and South Azadegan oil control room monitoring North Iran as the big winner from last among Iranians, according to Li 10 years. fi elds, in southwestern Iran. China National Petroleum foreign banks Azadegan oil fi eld is manned year’s nuclear sanctions deal as Guofu of the Chinese Foreign Yet the relationship has rarely entirely by Chinese technicians. European companies rush into Ministry’s Institute of Interna- been smooth. Although China Corp International took over in In central Tehran, hundreds of one of the world’s last big, un- tional Studies. “China sort of has been one of Iran’s most im- 2010, after sanctions forced Ja- Bloomberg Saudi Arabia is seeking to in- Chinese pour out at noon from tapped emerging markets. Yet knows Iran is aware they actu- portant sources of weaponry pan’s Inpex Corp to leave, a pat- Dubai crease the role of the private the telecommunications com- in Tehran, the government is at- ally don’t have a great deal of and nuclear technologies since tern repeated at several other sector in the economy to 65% of pany Huawei to its canteen. tacked for failing to deliver and options.” the 1980s, its leaders sacrifi ced big Iranian oil and gas projects. output by 2030, up from 40%, as There are now so many Chinese pandering to a still hostile West. The sanctions period was a those projects at key moments Things began well, but then audi Arabia is exploring part of an unprecedented set of expatriates here, some say they Western investors have been boon for China because other to protect relations with the US, the Chinese slowed down, es- the possibility of granting reforms driven by Deputy Crown outnumber all other nationali- slow to arrive, forcing Iran back countries forced their compa- according to a detailed account pecially at the larger southern Smore licences to foreign Prince Mohammed bin Salman. ties combined. into the arms of the Chinese. nies to leave. From trading half by John Garver of the Geor- fi eld, said Karamat Behbahani, banks and loosening restrictions The kingdom intends in part to A decade of international That’s especially true in the en- as much with Iran as the Euro- gia Institute of Technology. the Texas-educated director of on their operations as it seeks to achieve this through increased sanctions aimed at blocking ergy sector, where pressure to pean Union before sanctions, When it needed more oil, China the North Azadegan project. boost growth in the private sec- bank lending for small business- Iran’s nuclear programme has increase production is intense. China had fi ve times as much turned fi rst to Saudi Arabia, The Chinese blamed pressure tor, according to people with es and home buyers, according left China the country’s domi- Elsewhere, Western clearing Iran commerce as the EU by Iran’s bitter rival. from the US among other fac- knowledge of the matter. to details of the country’s eco- nant investor and trade part- banks still refuse to do business 2014, tailing off since due to the Iran, too, has proved ambiva- tors, he said. The Saudi Arabian Monetary nomic transformation program ner. Now, with those restric- with Iran for fear of falling foul falling price of oil. lent, as its relationship with After Rouhani replaced Ah- Agency, or SAMA as the central released in June. tions formally lifted, a more of non-nuclear US sanctions From oil to automobiles to the world’s rising superpower madinejad in 2013, the govern- bank is known, is weighing pro- Loosening restrictions on pragmatic Iranian government that remain in eff ect, meaning communications, Chinese became entangled in battles ment began to complain loudly posals that would allow foreign foreign lenders would increase has been trying to ease de- Western companies can’t raise companies moved in, often between moderates and con- of Chinese failures to deliver. banks to open more branches competition among the 25 banks pendence on China, only to project fi nance. gaining their fi rst major inter- servatives. China won many An Iranian company replaced and offer products including licensed to operate in Saudi fi nd itself stymied by hard- People including Moazami national contracts, said Majid- of its contracts under former the Chinese at a $4.7bn off - mortgages and small-business Arabia, the Middle East’s larg- line resistance and residual US are becoming frustrated. His reza Hariri, vice president of the President Mahmoud Ah- shore contract. In 2014, Oil loans in the kingdom, the peo- est economy and second most sanctions. state conglomerate wants to Iran-China Chamber of Com- madinejad, at a time when he Minister Bijan Zanganeh ple said, asking not to be iden- populous nation. The 13 interna- “China has done enough in- raise $10bn of foreign invest- merce. Mobile operator Huawei was expanding the role of the kicked the Chinese out of the tified as the information is pri- tional lenders licensed by SAMA, vestment in Iran,” said Mansour ment by the end of next year, Technologies Co, for example, Iranian Revolutionary Guard South Azadegan oil fi eld, one vate. including JPMorgan Chase & Moazami, who was deputy oil for projects from shipbuilding is building communications in- Corps throughout the economy. of the world’s largest greenfi eld The Boston Consulting Group Co, BNP Paribas and Deutsche minister until taking over as to petrochemicals. “We need frastructure in Iran, work that Now the government of Presi- projects with about 33bn bar- has prepared a report for SAMA Bank, currently face limitations chairman of the massive Indus- investment. What we expected would otherwise have gone to dent Hassan Rouhani wants to rels in place. Other Chinese in- on the proposed regulatory on what products they can off er trial Development & Renova- has not happened yet, and this Germany’s Siemens, he said. rebuild investment ties with vestments could be at risk, too, changes and their potential im- and how many branches they can tion Organisation this year. “We is what we need the Americans China now wants to take the other parts of the world and he warned. pact, the people said. open.

Turkey raises $1.5bn in 1st bond sale since Moody’s cut

Bloomberg the developed world pushed about sense for Turkey to do more now Istanbul $11tn of bonds into negative yields. and wait for the market uncertainty While Turkey’s borrowing costs have to evaporate next year before hav- fallen this year, the country is still ing to return to the international bor- Turkey has raised $1.5bn from paying a premium to peers amid rowing market,” Faergemann said. international investors, its first foray political crises that prompted its While yields on Turkey’s 2026 dollar into overseas debt markets since credit-downgrades. bond have fallen 27 basis points it received a second junk rating in “The deal was very successful as since they were sold in March, the the weeks following a failed coup they managed to up the size of the average rate for emerging-market attempt. issue and pre-issue for next year,” sovereign dollar debt has dropped The government sold $1.5bn in said Anders Faergemann, senior 70 basis points in the period to notes due October 2026 at a yield of portfolio manager at PineBridge 4.38%. That’s a 34 basis-point dis- 4.875%, compared with initial guid- Investments Europe Ltd in London, count to Turkey’s 10-year bond. ance of about 4.9%, according to a who placed an order for bonds in Moody’s downgraded the nation’s person familiar with the matter, who the off er. credit rating to junk in September, asked not to be identified because The sale comes a day after Turkey’s citing a slowdown in the economic they’re not authorised to speak lira weakened to a record low growth and risks to its ability to A money changer counts Turkish lira bills at a currency exchange publicly. The yield on the same se- against the dollar as investors gear attract foreign capital following the off ice in Istanbul. Moody’s downgraded the nation’s credit rating to curities, initially sold in March at 5%, up for the Federal Reserve to raise attempt to overthrow the govern- junk in September, citing a slowdown in the economic growth and was 4.72% in the secondary market US rates in December. The move ment. That downgrade followed S&P risks to its ability to attract foreign capital following the attempt to at 6:30pm on Friday in Istanbul. may reduce the appeal of emerging Global Ratings, which already rate overthrow the government. Emerging-market issuers are markets with the promise of improv- Turkey non-investment grade and cut benefiting from a boost in demand ing yields on dollar assets. it further five days after the putsch. March and May and $1bn through Management Report. It planned to as investors seek income-bearing “With increased talk of a potential Before the latest off ering, Turkey a sukuk, according to the govern- borrow as much as $4.5bn in the in- assets after central bank stimulus in Fed December rate hike, it makes raised $3bn in Eurobonds sold in ment’s September Public Debt ternational capital markets this year. Gulf Times Sunday, October 16, 2016 3 BUSINESS War on coal can’t stop rally built on enduring demand

Bloomberg ing to the International Energy efi ted miners including Glen- els, according to Bruno Brunetti, waning, hurting supply, as the ric tonne, according to data at Commerzbank in Frankfurt. London/Prague Agency and BHP Billiton. core and Anglo American, with a senior director of electric- world’s economies attempt to compiled by brokers. Newcastle Prices will probably fall gradu- Analysts at Commerzbank commodities stocks up 37% in ity at Pira Energy. A gigawatt is shift away from fossil fuels. The thermal coal prices for Novem- ally next year as Chinese pro- and energy consultants Nena 2016, the best performing in- enough to power 2mn European amount of planned coal-fi red ber, an Asian benchmark, are duction increases, she said, ou know the war on coal see prices holding at current dustry group in Europe’s Stoxx homes. generation capacity fell 14% this up 69% this year to the highest without providing a specifi c isn’t working when it’s up levels at least until the end of 600 index. Barclays moved its Miner BHP predicts coal use year through July as institutions since January 2014. forecast. Coal may get further Ymore than 50% this year. the year as the northern hemi- European mining industry view worldwide will continue at cur- including JPMorgan Chase & China, the biggest producer of support if supplies from ex- Prices in Europe and Asia have sphere winter will boost demand to positive last month, saying rent levels for the next two dec- Co, and Citigroup Inc pledged to the fuel, is now boosting eff orts porter Colombia are interrupted rebounded from a half-decade and France keeps some nuclear the sector could deliver gains of ades, while IEA analysts see de- scale back participation in coal to bring back some production. after a referendum rejected the of declines after China cut do- plants offl ine for safety checks. more than 20%. mand rising 0.4% a year through projects. Norway’s sovereign That’s because imposing limits peace treaty between the gov- mestic production so much that “Because of the anti-coal Demand for fossil fuel-fed 2040 in its base-case scenario. wealth fund, the world’s biggest, earlier this year to reduce a glut ernment and the Revolutionary local consumers had to step up war, investors want to diversify power is expected to increase af- In Europe, coal production fell started excluding some mines and cut pollution drove up do- Armed Forces of Colombia, or overseas purchases. Even as na- away,” said Guillaume Perret, ter Electricite de France cut out- 3.4% last year, while use of the and utilities using the fuel from mestic costs. FARC, according to Perret As- tions are shutting plants and director of Perret Associates put at some of its 58 French nu- fuel only dropped by half that its investments this year. “The supply situation in Chi- sociates. the world’s biggest wealth fund in London, which provides re- clear plants for extended safety amount even with Britain taking Coal for delivery to north- na will ease again soon, partly In Indonesia, production at is selling out of coal compa- search on the industry. “But the checks. The outages cut EDF’s steps to close all of its coal plants western Europe next year has because the government is now the world’s biggest exporter of nies, demand will remain little demand is still there.” available atomic power to 46 by 2025, BP data show. jumped about 78% from a record taking countermeasures,” said thermal coal is still below capac- changed for decades, accord- Coal’s resurgence has ben- gigawatts, 16% below usual lev- Investor support for coal is low in February to $64.75 a met- Barbara Lambrecht, an analyst ity after storms this year.

Learn from California on energy storage, say UK lawmakers

Bloomberg EU wait for US LNG may be London The UK government should learn from California and incen- tivise energy-storage technol- ogy to help move away from dirty fuels, a cross-party panel decided in China coal mines of lawmakers said. Ministers should reform the US, Chinese coal output will set to higher demand and supply bottle- Capacity Market, a subsidy US LNG exports: WoodMac; ‘Good necks, meaning a stronger call on coal programme designed to lower news’ for US LNG if China slows and next year than at any other time in the the risk of blackouts, to reward US boosts mining shale era, according to Tomnay. both energy-storage projects The nation’s coal demand will out- and power users who lower Bloomberg strip supply, including imported fuel, consumption at times of high London by about 5% next year, according to demand, Parliament’s Energy Doyle Trading Consultants, a New York and Climate Change Committee City and Grand Junction, Colorado- said in a report published on uture shipments of liquefi ed nat- based boutique energy research fi rm Saturday. ural gas from the US to northwest that specializes in the coal sector. Coal “There is an incredible oppor- FEurope may hinge on the actions generation may gain 20%, which would tunity for the UK to become a of coal miners thousands of miles away. require supply from stockpiles and world leader in these disruptive That’s according to research from higher output from Powder River Basin, technologies,” chairman Angus energy consultant Wood Mackenzie the biggest producing region, accord- MacNeil said. “Yet our current Ltd. A continued slowdown at Chi- ing to WoodMac. energy-security subsidies nese mines would extend a 54% rally in US coal production is forecast to re- favour dirty diesel generation European coal this year. That, in turn, cover in 2017 after a slump in the pre- over smart new clean-tech will force natural gas prices higher vious two years, according to the US solutions.” in the region. If this combines with a Energy Information Administration’s Britain is trying to ensure it revival in US coal, it could make Gulf Short-Term Energy Outlook published avoids power cuts as coal- Coast LNG exports competitive in Eu- in September. fired power stations and rope. The revival isn’t certain as the mar- ageing atomic reactors close “Coal might be in demise but un- ket may not be quick to respond after down. In March, the govern- derstanding the global coal market mine closures and redundancies, Tom- ment said it would begin has never been more important,” Noel nay said. That would mean an upside payments to power genera- Tomnay, head of global gas and LNG risk to US gas next year, with prices po- tors to guarantee electricity at WoodMac, said in an interview in tentially reaching $4 per million British supply in the winter of 2017 to London. “The future of US LNG over thermal units, which would be bad for 2018, a year earlier than previ- the next year will be set by the pace of US LNG exports, he said. ously planned, in an attempt response of coal markets in the US and US gas futures gained 37% this year to encourage the building of China.” to trade near $3.21 on Thursday. The new gas plants. The link between China’s mining UK premium over US gas prices nar- Ministers should aim to spur industry and the European gas market rowed to a record in August, discour- projects that store excess highlights the forces at play in global aging US LNG shipments to Europe. If power at times of low demand energy markets as governments try prices fall below $2.9, which is possible and feed it back into the grid to reduce pollution from carbon-rich in the summer, “US supply will largely when demand peaks, as well as coal. The rise of shale-gas production be called upon to meet as much Euro- those that encourage users to in the US has added another variable pean demand as possible,” according to reduce their own demand, the into the mix after the start of LNG ex- Employees unload coal from a truck at a coal mine and processing facility in Liulin, Shanxi province, China. A continued Energy Aspects Ltd’s Global LNG Out- committee said. ports from the Gulf of Mexico this year. slowdown at Chinese mines would extend a 54% rally in European coal this year. That, in turn, will force natural gas prices look. “We need to learn from That fuel hasn’t yet reached northwest higher in the region. If this combines with a revival in US coal, it could make Gulf Coast LNG exports competitive in Europe. The world’s biggest LNG buyers are California where strong public Europe, where most imports come already focusing more on coal, which is financial support and clear from Norway, Russia and Qatar. Chinese output will probably fall by oped nations, while it’s seen as a means 10% from a year earlier amid eff orts set to remain a dominant fuel in power legislation have helped develop China’s slumping coal production 8.2% to 3.4bn tonnes this year, and slip to meet surging electricity demand in to remove oversupply and promote generation globally through 2025, ac- a storage industry and integrate and rising imports are sending shock another 0.5% in 2017, according to Per- parts of the developing world. In the less-polluting fuels. As the winter ap- cording to BMI Research. Jera Co, a storage infrastructure into the waves globally, pushing European pric- ret Associates Ltd, an industry consult- UK, gas has displaced coal for most of proaches and prices soar, the govern- venture between two of Japan’s biggest grid,” MacNeil said. “Getting es to their fi rst yearly gain since 2010. ant in London. the time thanks to a minimum carbon ment is seeking to revitalise the indus- utilities, agreed to buy EDF Trading demand-side response right will That’s led to increased demand for gas, “China shifting a little bit can have a price that punishes greenhouse-gas try by relaxing mining restrictions. Ltd’s coal-trading business, which will empower consumers, reduce a rival power-plant fuel, and helped ex- bigger impact on European prices than emissions. The fuel is also starting to In the US, the world’s biggest pro- help it gain expertise for future LNG bills, ease pressure on the grid, acerbate regional supply issues to trig- you would expect,” said Matt Brown, an lose its appeal in mainland Europe. ducer after China, things also look and power trading. and lower carbon dioxide emis- ger a 34% increase in the benchmark analyst at Poeyry. China’s coal production in the fi rst gloomy, with output sliding 22% so far “We’ll be watching coal markets very sions.” UK contract this year. Coal is being shunned in some devel- eight months of 2016 fell more than this year. Gas prices are rallying thanks closely,” Tomnay said. Shell, BP hold lure of US gas rigs stage biggest comeback since ’90s on price jump higher payouts after Brexit hurts pound

Bloomberg analyst at Brewin Dolphin Ltd, which owns London shares in both Shell and BP. “It’s a fantastic time to be based in the UK, being sharehold- ers in these two companies and taking the ad- he British pound’s slump to a 30-year low ditional cash.” is handing a windfall to UK-based share- Shell is scheduled to announce it’s third- Tholders of Royal Dutch Shell and BP. quarter dividend in dollars on November 1, The currency’s decline means the two oil before setting the pound exchange rate on companies are making higher payouts to UK December 2 and making the payment on De- investors when they distribute their dol- cember 16, according to its website. BP will lar dividends in pounds. Shell and BP have announce the same day as Shell, convert to pledged to prioritize defending their divi- the UK currency in early December and pay dends through oil’s biggest downturn in a on the same day as Shell. generation. The value of Shell’s 47 cents a share sec- The companies have maintained their pay- ond-quarter dividend announced on July outs for the past two years and shareholders 28 has increased by about 8.6% from the al- who have stayed invested through crude’s most 36 pence it was worth at that time to the slump are likely to get additional cash in the equivalent of more than 38 pence. The value UK currency as the pound remains weak fol- of BP’s 10 cents a share payout has also in- lowing Britain’s June 23 decision to exit the creased more than 8% in the period. European Union. Shell is likely to pay about $15bn in divi- The potential for higher cash payouts is dends this year, higher than last year’s $12bn driving up the companies’ London-listed following the purchase of BG Group in Febru- shares. US investors get no benefi t from the ary, chief fi nancial offi cer Simon Henry said currency’s more than 17% slide against the in June. BP has paid about $6bn a year since A hydraulic fracturing (fracking) rig is seen in Weld County, Colorado, US. US natural gas drilling is coming back in a big way. The number of dollar in the period, which makes the pound 2012, according to Liberium Capital Ltd. rigs targeting gas surged almost 12% last week, the biggest percentage gain since 1993, as prices climbed, Bloomberg reported. Gas bulls are the worst performer among major currencies. Together with oil’s rise above $50 a barrel, betting that a frigid winter will send demand for the heating fuel soaring, straining supplies amid rising exports and record consumption by “In dollar terms the dividend has been fl at, the lure of extra cash has drawn investors to power plants. Dry gas production is poised for a “renaissance” in the coming months, Andy Weissman, chief executive off icer of energy analysis but in sterling terms the dividend is up quite Shell and BP’s London-listed shares, Arm- company EBW AnalyticsGroup, said in a note to clients on Friday. a bit,” said Iain Armstrong, a London-based strong said. Gulf Times 4 Sunday, October 16, 2016 BUSINESS

Court to get fi nal Brics bank planning to bids for Hanjin sell $500mn rupee bond asset by Bloomberg to double its capital base to $100bn in the mies. “Among key recommendations of Sun International, suggested the Coun- early Nov New Delhi coming years. While lending in 2016 will various working groups of Brazil, Rus- cil to do one fl agship project in all of be as much as $1.5bn, the NDB may off er sia, India, China, South Africa Busi- these suggested sectors. an additional $2.5bn next year, Kamath ness Council is the continued dialogue The need to have investment facilita- Bloomberg ew Development Bank, formed by said. It will also look to extend credit to on Brics rating agency,” Onkar Kanwar, tion agreements among the members Seoul fi ve of the world’s biggest emerg- the transport sector while continuing chairman, Brics Business Council - In- was emphasisd by Jose Rubens de La Ning markets, plans to sell as much loans to fund green energy, he said. dia Chapter, said during the meet. Rosa from the Brazil Chapter, while Xie as $500mn worth of off shore rupee bonds The market for masala bonds is pick- With a huge scope for intra-Brics Biao from the China Chapter said that South Korean court will next year as the youngest multilateral ing up from a slow start after the Reserve cooperation in infrastructure develop- if they consider Brics as one economic receive bids by November lender looks to expand its reach. Bank of India last year allowed domestic ment and fi nancing, the formation of a community, they consider a very rich Aon the sale of the market- “We look forward to raising money companies to issue off shore rupee debt group of angel investors was also one of economic development potential. ing network of Hanjin Shipping in most of our member country mar- to reduce dependence on foreign cur- the key recommendations of the Coun- South Africa emphasised that the Co’s Asia-US operations as part kets including India through a masala rencies including the US dollar. Hous- cil, he said. country should be considered as a plat- of eff orts to raise funds for the bond issue which could be $250mn- ing Development Finance Corp, India’s The Council said they looked upon form for the rest of Africa. indebted company. The shares $500mn,” NDB president KV Kamath biggest mortgage lender, was the fi rst the New Development Bank for devel- Looking to promote a vibrant en- surged 30%. said in an interview on the sidelines of issuer to sell masala securities in July oping an infrastructure project prepa- vironment for business through Brics The Seoul Central District the Brics summit in Goa, India. “The and the Canadian province of British ration facility and for a deep and vibrant Business Council, China’s Capt Xu Li- Court will receive letters of inter- Indian issue probably will be in the fi rst Columbia became the fi rst government capital market. rong said consensus on a number of is- est from potential buyers by Oc- quarter of next year.” to issue the notes. With the expansion of the Brics agen- sues was forged during the meeting. tober 28 and fi nal bids by Novem- The NDB, which began lending this Meanwhile, the Brics Business Coun- da, the Council also emphasised on the The Brics Business Council based on ber 7, Hanjin Shipping said in a year, was fl oated as an alternative to the cil, which met during the ongoing 8th need to enhance business cooperation the recommendations and viewpoints regulatory fi ling on Thursday. The Kamath: We look forward to raising Asian Development Bank and World annual summit, suggested the member in agriculture by way of sharing of best in the meeting will present its annu- court expects to sign an agree- money in most of our member country Bank by the leaders of Brazil, Russia, In- countries continue the dialogue for a practices among members. al report to the heads of the member ment on the sale by mid-Novem- markets including India. dia, China and South Africa. It’s looking new rating agency for emerging econo- Vikramjit Singh Sahney, chairman, countries on Sunday, Kanwar said. ber, a court spokesman said. Samil PricewaterhouseCoopers, the Korean member fi rm of Pricewa- terhouseCoopers that’s evaluating Hanjin, will advise on the sale, the spokesman said. Less than two months after South Korea’s biggest container line sought bankruptcy protec- tion, the court hearing the pe- tition has set the ball rolling on the asset sales after indicating last month that it would con- sider selling the entire company. The planned sale would involve employees and customers of Hanjin’s units handling Asia-US cargo as well as some vessels, the court spokesman said this week. Shares of Hanjin by the daily 30% limit to close at 1,395 won, the highest price since Au- gust 29, in Seoul. The stock has plunged 62% this year, cutting its market value to about 342bn won ($301mn). The bankruptcy fi ling in late August by Hanjin, once the world’s seventh-big- gest container carrier, roiled global supply chains ahead of the year-end holiday season as ves- sels carrying goods of companies such as Nike Inc and Samsung Electronics Co were stranded. Hanjin’s market share has shrunk as customers defected, dropping to 1.3% as of October 13 and making the company the 17th biggest container line, ac- cording to shipping data provider Alphaliner. Before Hanjin’s fi ling, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping at the bilateral talks before the Brics summit in Goa, India yesterday. it controlled 2.9% of the market.

Nuclear power sector stirs in India as Luxury vehicles are hot in liability fears ease

Bloomberg ry Compensation for Nuclear Damage – Japan, $10,000 cars are not New Delhi a global protocol on nuclear liability – in February. The nation has also issued an addendum to clarify the interpretation Bloomberg Optimism is building in India’s nuclear of the domestic liability law, and started Tokyo power industry as concerns ease that a nuclear insurance pool for operators equipment suppliers would face crip- and suppliers. pling compensation costs in the event of That’s encouraged New Delhi-based apanese consumers are raiding an accident. Bharat Heavy, India’s biggest supplier of discount stores for everything Companies such as Larsen & Toubro power plant equipment, to sharpen the Jfrom cheap shampoo to furniture. Ltd, Bharat Heavy Electricals Ltd and focus on its nuclear business. When it comes to automobiles, it’s Mumbai-based Walchandnagar Indus- “So far nuclear has seen slow growth, the Rolls-Royces and BMWs that are tries Ltd are preparing for a pickup in but now it’s set to move at a brisk pace, moving off the dealer lots. orders, after Prime Minister Narendra as most of the concerns have been Luxury imported cars costing Modi’s government took steps to blunt addressed,” said PP Yadav, head of ¥10mn ($96,500) or more surged 19% the impact of a 2010 act governing li- Bharat Heavy’s nuclear business. “As the in the fi rst nine months to 13,605 units, ability for nuclear power mishaps. sector grows, we’ll deploy more of our reaching the highest proportion of “The lull seen in this sector is almost resources to this business.” imports in a decade. At the other end over,” Walchandnagar Industries’ chief Nuclear Power Corp, the monopoly of the spectrum, deliveries of minicars executive off icer GK Pillai said in an nuclear energy producer, is discussing such as the Nissan Dayz, which starts interview. “We’d be open to making with the government if it can float bulk at about $11,000, have slumped 11 per- dedicated investments towards enhanc- orders for domestic projects, Direc- cent to 1.3mn units. ing manufacturing capacity in nuclear tor Rohit Banerjee said. That will give Premium carmakers including BMW equipment.” vendors long-term visibility and will help AG and Rolls-Royce Motor Cars Ltd are Premium carmakers including BMW and Rolls-Royce Motor are wagering the gains at the top end. The company plans to revive talks them plan for the future, he said. wagering the gains at the top end will with Russia’s Atomenergomash OJSC Challenges remain to scaling up the continue by adding dealerships with through 2020. The German carmak- 14% and Lamborghini’s are up 7%.For the dealer today if I found the model to build a joint-venture factory in India’s sector, including keeping costs down fl ashy new showrooms. Luxury sales er opened one of its largest fl agship Hideo Kumano, chief economist at I like.” By contrast, deliveries of kei western state of Gujarat that could so that nuclear-generated electricity is represent a tiny pocket of strength for stores in Tokyo this year. Dai-ichi Life Research Institute, the cars, with engines no bigger than 0.66 supply nuclear power equipment for competitive in a market dominated by Japan’s auto industry, which has grap- Rolls-Royce has added two new trend is baffl ing and diffi cult to explain. liters, may drop by about 8% this year, both Indian and export markets, Pillai coal. India’s goal is nuclear power capac- pled with a prolonged slide in interest dealerships this year and plans to His best guesses at what might might according to a forecast by the Japan said. For optimists, such developments, ity of 63 gigawatts by 2032 from about among younger consumers in own- open one next year, doubling its be driving the gains: baby boomers Automobile Manufacturers Associa- as well as progress on Westinghouse 5.8 gigawatts now, part of a push to curb ing cars. With kei cars accounting for number of outlets in Japan, accord- reaching their 70s may be buying a set tion. The optimism behind the group’s Electric Co’s plan for six reactors in India, fossil-fuel emissions and diversify the about one in three automobiles sold in ing to CEO Torsten Mueller-Oetvoes. of wheels they long desired, or newly initial projection for an 8.7% gain soon underscore ebbing liability fears. nation’s energy mix. The plan includes the country, weak demand has meant Deliveries have jumped 30% this year, rich from backing tech startups. evaporated after Prime Minister Shin- Pillai said Walchandnagar is open to using domestic pressurized heavy-water industry sales are on track to shrink for driven by the new 37mn-yen Dawn “That’s quite a unique bright spot in zo Abe postponed an increase in the discussions with Westinghouse Electric reactor technology as well as light-water a second straight year. coupe. Japan’s consumption,” Kumano said. sales tax to 2019, which was expected and Electricite de France SA for the fac- reactors sourced from overseas. “There’s wealth in the market,” Peter “We’ve put the additional dealer Hirofumi Shiraki, a 60-year-old to have encouraged consumers to buy tory if talks with the Russians fail. The South Asian nation has approved Kronschnabl, chief executive offi cer partners on stream because we’ve owner of a machinery company in new vehicles. The Civil Liability for Nuclear Damage a number of reactor projects, according of BMW’s Japan unit, said in an inter- seen the potential,” Mueller-Oetvoes western Japan’s Mie prefecture, may “Consumption by the mass mar- Act seeks to ensure compensation for to the Department of Atomic Energy. view. “The typical customers for cars said in an interview in Tokyo. “There’s be representative of the sort of buyer ket remains weak, while rich people victims of a nuclear mishap, and is a “We built huge capacities for nuclear, over 10mn is a self-employed person quite some wealth in this country and that’s been driving premium car sales. on top of the pyramid continue to be legacy of one of the world’s worst indus- but a part of that capacity has remained and they are the backbone of the Japa- for that reason we see a lot of potential While eyeing an i8 plug-in sports rich,” said Zhou Jincheng, a Nagoya- trial disasters – the 1984 Union Carbide idle as India’s nuclear program didn’t nese economy. There’s still a decent customers for Rolls-Royce.” car at BMW’s new showroom in To- based analyst at automotive market chemical accident in the central Indian provide suff icient load to the industry,” number of these businesses which are Other high-priced brands boost- kyo’s Odaiba district, Shiraki said he’s researcher Fourin Inc. “When you buy city of Bhopal that killed more than said YS Trivedi, senior vice-president at doing well.” ing sales include McLaren, which budgeting about 10 million yen for a a car at 1mn yen, price is a key factor 10,000 people. To address concerns Mumbai-based Larsen & Toubro. “Things BMW, which has nearly tripled sales has doubled registrations this year new car to add to his Audi and Lexus. and every yen counts. When you are about the implications of the act, India are looking up now and a number of of its 7-Series sedan in Japan this year, through September, according to the “Design matters most to me,” said rich enough to buy a 10mn-yen car, ratified the Convention on Supplementa- orders are in sight.” said dealers will spend about 400mn Japan Automobile Importers Associa- Shiraki, who added that his business price probably isn’t the fi rst thing you euros ($444mn) updating facilities tion. Aston Martin sales have gained was doing well. “I may just drive off consider.” Gulf Times Sunday, October 16, 2016 5 BUSINESS

China not a currency manipulator, says India’s exports grow Treasury Department

Bloomberg concern about currency manipu- Washington lation, without specifying any countries. Jacob J Lew, the current US The Treasury Department for the Treasury secretary, was deputy final time during President Barack secretary of state under Clinton 4.62% to $22.88bn Obama’s tenure declined to label when she served in the Obama China a currency manipulator, in administration. IANS $133.7bn over the same period last year, at $31.22bn, were 2.54% lower than the $6.89bn, which was 3.13% higher than oil an implicit rejection of Repub- The Treasury created a new New Delhi as per data released by the Commerce imports of $32.03bn in September 2015. imports valued at $6.68bn in the corre- lican nominee Donald Trump’s monitoring list in April after Ministry. Consequently, the trade defi cit in Sep- sponding period last year. hard-line approach to the world’s Congress passed a law requiring The government said growth in exports tember this year at $8.34bn witnessed an The trade defi cit cumulatively for second-biggest economy. closer scrutiny of foreign-ex- ignalling a clear reversal of the con- have fallen for the US, European Union 18% fall compared to the same month last April-September also declined more than The Obama administration change regimes. Treasury off icials tinuous decline in Indian exports, and China but Japan exhibited positive year at $10.17bn. 37% to $43bn against $68.55bn in the added Switzerland to a currency developed three criteria to decide Soffi cial data on Friday showed Sep- growth for July 2016, over the corre- Cumulative imports for April-Sep- same period of 2015-16. watch list that already included if countries are being unfair: an tember exports at $22.88bn grew 4.62% sponding period of the previous year, as tember were worth more than $174.41bn, As per Reserve Bank of India data on China, Japan, Germany, South economy having a trade surplus over exports recorded in the same month per latest WTO statistics. which was a 13.77% fall from $202.27bn Friday, taking merchandise and serv- Korea and Taiwan, according to with the US above $20bn; hav- last year at $21.87bn. “Non-petroleum exports in Septem- worth imports recorded for the same pe- ices together, overall trade defi cit for a semiannual report on global ing a current-account surplus However, cumulatively for the six- ber 2016 are valued at $20.33bn against riod a year ago. April-September 2016-17 is estimated foreign-exchange policies from amounting to more than 3% of its month April-September period, ex- $19.28bn in September 2015, an increase With global oil prices climbing back $161.2bn, which is more than 60% lower the Treasury. However, it found gross domestic product; and one ports were down 1.74% in dollar terms of 5.44%,” a statement here said. to $50 a barrel levels, India’s oil imports than the defi cit of $403.7bn during April- that no major trading partner met that repeatedly depreciates its at $131.4bn, as against exports of Imports during the month in question during September 2016 were valued at September 2015-16. the legal definition of a currency currency by buying foreign assets manipulator, and the US said equivalent to 2% of output over China’s recent eff orts to prop up the year. the yuan were preventing a rapid Meeting all three would trigger depreciation that would hurt the action by the president to enter global economy. discussions with the country and China was found to meet only seek potential penalties. one of three criteria used to de- China retains a significant trade termine the watch list, compared surplus with the US, and greater with two of three in April. If China transparency from the Chinese still meets only one condition government of its foreign- in the next report, it could be exchange goals would bolster the removed from the list. currency regime’s credibility, the Applying the manipulator Treasury said. But its current- label to China would represent account surplus narrowed to 2.4% a major shift from US practice of GDP for the 12 months through over more than two decades, and June, putting it below the thresh- would risk provoking retaliation. old for the watch list. The last time the US designated Rather than trying to weaken China a currency manipulator the yuan to gain an advantage, was in 1994, when Bill Clinton was China sold an estimated $570bn president. Under a 1988 law, the in foreign-exchange assets from Treasury is required to assess August 2015 to August 2016 in an whether major trading partners eff ort to prevent a rapid decline game their currencies to prevent in the currency, the Treasury said. balance-of-payments adjust- The yuan has declined about 3.5% ments or to gain an unfair trade against the dollar in 2016. advantage. Japan, Germany and South Both US presidential candi- Korea were flagged because of dates have signalled tougher their trade and current-account stances on China ahead of next surpluses. month’s election. Trump has While Japan hasn’t intervened come out more aggressively in the yen in almost five years, against the Asian nation. “They Japanese off icials have persistent- are a manipulator, grand master ly made public comments “aimed level,” he said in an economic at restraining yen appreciation,” policy speech last month. “I am the Treasury said, noting that the going to instruct my Treasury sec- dollar-yen exchange market is retary to label China a currency functioning smoothly. manipulator and to apply tariff s Germany has the largest nomi- over any country that devalues nal current-account surplus in the its currency to gain an unfair world, the Treasury said. Some advantage over the US.” of that saving could be used to Trump has also promised to boost domestic demand and impose a 45% tariff on non-oil support the rebalancing of the exports from China. global economy, according to the Democratic nominee Hillary department.The Treasury added Clinton has said she wants to Switzerland to its monitoring list prevent countries like China from because its trade with the US was abusing global trade rules by large enough to label it a major strengthening enforcement. Like trading partner as of June, and Trump, she opposes a trade deal its current-account surplus and with Pacific Rim nations signed currency intervention met the India’s non-petroleum exports in September are valued at $20.33bn against $19.28bn in September 2015, an increase of 5.44%, data released by the by Obama, and she has expressed thresholds. commerce ministry showed yesterday

Fake bank documents, AC Milan and risks in China M&A boom

Bloomberg the Mercator Institute for China Stud- The Chinese group didn’t have all Hong Kong ies. “We’re seeing a lot of deals where the fi nancing in place when it agreed to people scratch their heads and wonder purchase the Italian club, people famil- about the buyer.” iar with the matter said in September. he Chinese account statement It’s still unclear how revelations of The consortium is seeking money from had all the trappings of the real the false bank statement will impact the new partners to help meet its goal of Tthing: a red oval seal bearing Bank takeover of AC Milan, which if com- completing the deal by year-end. of Jiangsu Co’s name, a balance printed pleted would be the largest overseas European soccer targets have been a to the last decimal (852,468,304.56 soccer acquisition by a Chinese com- priority for Chinese buyers, which have yuan) and a time stamp of 4:14 pm on pany. The fi nal contract signed with announced more than $2bn of invest- April 25. Berlusconi’s Fininvest SpA didn’t end ments since the beginning of last year, Provided by a little-known Chinese up making reference to the many bank data compiled by Bloomberg show. investor group during early-stage ac- letters it received during the yearlong Should Li’s acquisition go through, Chi- quisition talks with AC Milan, the doc- talks, said the people, who asked not nese investors would control both major ument was among paperwork purport- to be identifi ed as the information is Milan soccer teams, following Suning ing to show the consortium’s ability to private. The Sino-Europe Sports con- Holdings Group Co’s June investment in buy Silvio Berlusconi’s storied Italian sortium, led by Chinese businessman cross-town rival Inter Milan. soccer club, according to people with Li Yonghong, said last month that it’s At Anbang, one of China’s biggest knowledge of the matter. committed to closing the deal. insurers and most acquisitive compa- The only problem? The statement A spokesman for Sino-Europe Sports nies, Chairman Wu Xiaohui has faced wasn’t true, according to Bank of Jiang- referred to a September 23 statement, calls for more disclosure by S&P Global su. The lender told Bloomberg News which said speculation about fake Ratings. He’s also drawn scrutiny over last month that it hadn’t issued any documents is “groundless” and that the fi rm’s unconventional dealmaking such record. The consortium, known as the consortium is considering legal ac- methods, particularly the aborted Star- Sino- Europe Sports Investment Man- tion. A Fininvest spokesman referred wood off er, which Anbang said was due agement Changxing Co, said in a Sep- to its statement dated that day, saying to “various market considerations.” tember 20 e-mail that it “does not con- the fi rm conducted checks on buyers’ Transparency concerns also came fi rm it has ever sent such a document.” fi nancial soundness using adviser as- to the fore when an obscure Chinese False bank records may be an ex- sessments and is working to complete property and investment fi rm agreed treme example of the risks from this the sale later this year. Lazard Ltd is It’s still unclear how revelations of the false bank statement will impact the takeover of AC Milan, which if completed would to buy the Chicago Stock Exchange in year’s record wave of overseas Chinese Fininvest’s sole adviser on the transac- be the largest overseas soccer acquisition by a Chinese company. February. The off er from Chongqing acquisitions, but the episode highlights tion, while Rothschild is working with Casin Enterprise Group, which has no the challenge for Western fi rms who the Chinese buyer group. French club Sochaux-Montbeliard by Of course, not all outbound Chinese Suisse Group AG. experience running a bourse, has been increasingly fi nd themselves across Rothschild started advising on the Hong Kong-listed Tech Pro Technology deals have faced problems, with more “For global sell sides, including Chi- under review by the Committee on the table from buyers with little to no acquisition after the purported bank Development Ltd - has run into trouble than $80bn of overseas takeovers get- nese buyers in the process is important Foreign Investment in the US A group international track record. First-time documents had been produced, a per- this year after the fi rm’s stock price col- ting completed so far this year. Others for ensuring maximization of value,” of American lawmakers said the deal Chinese acquirers announced a record son familiar with the matter said. Rep- lapsed and its chairman, Li Wing Sang, have encountered roadblocks beyond Gallagher said. should be blocked if Casin is found to $51.5bn of cross-border acquisitions resentatives for Rothschild and Lazard got slapped with a bankruptcy claim. the bidders’ control. The buyouts of Still, concerns persist over a lack of have close ties to the Chinese govern- through September this year, more than declined to comment. “Everyone is keen to fi nd the ‘fabled’ US-traded Chinese fi rms have come transparency at some fi rms. During the ment. double the total for the same period in The AC Milan incident adds to a Chinese buyer, but it’s very diffi cult to under pressure from regulators wary of AC Milan talks, Fininvest had to nego- Casin, described as a “privately held 2015, according to a Bloomberg analy- string of high-profi le hiccups for Chi- diff erentiate between those who have plans to re-list the companies at higher tiate with a shifting group of buyers as diversifi ed holding group” in a Febru- sis of more than 4,000 deals spanning nese dealmakers. In April, Anbang In- the wherewithal and knowhow, and valuations on domestic markets. Chi- various members of the consortium at- ary announcement from the Chicago a decade. surance Group Co abruptly backed out those who haven’t,” said Colin Banfi eld, nese foreign-exchange offi cials have tempted to outdo each other, according bourse, said in the statement that it “We’ve reached a point where Chi- of a $14bn bid for Starwood Hotels & the Hong Kong-based head of mergers also thrown up hurdles as they step up to people with knowledge of the matter. plans to “bring exciting Chinese growth nese outbound investment is in part Resorts Worldwide Inc, while at least and acquisitions for the Asia-Pacifi c scrutiny of capital outfl ows to help prop Li went from being an investor in the companies to US investors.” A spokes- driven by individuals that were never 22 buyout off ers for US-listed Chi- region at Citigroup Inc. “There’s a big up the yuan. original group to the leader of a sepa- woman for Casin declined to comment. part of the established group,” said nese companies could be in doubt after opportunity cost when you sign up Despite the challenges, sellers re- rate bid without the knowledge of some “The perception of Chinese buyers in Thilo Hanemann, a director at New regulators in Beijing tightened scrutiny with a fi rst-time buyer. We prefer not main keen to entertain off ers from Chi- consortium members, the people said, the marketplace has shifted in the last York- based research fi rm Rhodium of such transactions. Another cross- to do so if we think that party cannot na, according to Joseph Gallagher, the asking not to be identifi ed because the twelve months,” said Rhodium’s Hane- Group and a senior policy fellow at border soccer deal - the purchase of get to the fi nish line.” head of M&A for Asia Pacifi c at Credit discussions were confi dential. mann. Gulf Times 6 Sunday, October 16, 2016 BUSINESS

Indonesia insurer to explore ‘E-commerce fi rms to face $1bn sale

Bloomberg tremendous challenges’ Jakarta Bloomberg Hong Kong JB Bumiputera 1912, the century-old Indonesian Alife insurer, is exploring libaba Group Holding expects a sale of its business to an over- pure e-commerce operators to seas investor as it seeks to meet Aface ‘tremendous challenges’ as obligations of its more than the web giant seeks to tap more growth 5mn policyholders, people with from transforming China’s $4.5tn tra- knowledge of the matter said. ditional retail industry. The Jakarta-based fi rm is China’s largest e-commerce com- working with a fi nancial adviser pany plans to upgrade retail businesses to identify potential buyers, in- and improve effi ciency across product cluding international insurers, manufacturing, distribution and serv- the people said. It is restructur- ice, chief executive offi cer Daniel Zhang ing its business to separate good said in an e-mailed letter to share- and bad assets and could seek at holders on Thursday. The company is least $1bn from any sale once the working with partly-owned Suning revamp is completed, the people Commerce Group Co and Intime Retail said, asking not to be named as Group Co to integrate the online experi- the process is private. ence with brick-and-mortar shopping. Bumiputera 1912, the country’s Alibaba has highlighted trillions of fi rst national insurer owned by its dollars in Chinese household savings as customers, is reorganising as it a key driver of growth, with the com- tries to improve its fi nances and pany pledging to keep investing in busi- meet growing obligations. The ness and geographical expansion, even fi rm was able to satisfy a mini- if it drags on earnings in the short-term. mum risk-capital ratio last year The company is also looking overseas following a regulatory warning for growth, as chairman Jack Ma targets more than a year before, accord- serving 2bn consumers and supporting ing to a MetroTV report in April 10mn profi table business around the 2015 citing a regulatory offi cial. world in 20 years. The insurer has 350 branch “The most important opportunity offi ces in the country, employs on the horizon is not growing online more than 3,000 staff and has sales in isolation but rather helping tra- more than 30,000 agents, its ditional retailers upgrade into a brand website shows. Bumiputera 1912, new retail model,” Zhang wrote. “The founded by three teachers, of- consumer retail industry as a whole is fers products including savings experiencing a radical disruption driven plans, education insurance and by digital transformation.” retirement planning. While Alibaba has grown to dominate Representatives for Bumi- e-commerce in China by appealing to putera 1912 said they couldn’t younger users, 75% of them 35 or young- immediately comment. The in- er, it’s coming up against a tough macro- surer aims to complete a years- economic environment. The economy is Founder and executive chairman of Alibaba Group Jack Ma gestures during the Conversation on Entrepreneurship and Inclusive Globalisation at the Foreign Ministry in long restructuring process at deteriorating, particularly in the rust- Bangkok. China’s largest e-commerce company plans to upgrade retail businesses and improve eff iciency across product manufacturing, distribution and service, a top the end of 2016, Dumoly Pard- belt northeast, hurting the consumer off icial of the company said. ede, deputy commissioner at demand that its online stores rely on. Indonesia’s Financial Services The Hangzhou-based company is company, which is trying to counter the Zhang highlighted cloud comput- fastest-growing businesses, hosting 35% will become ubiquitous,” Zhang wrote. Authority, known as OJK, said moving into untapped rural regions, impact of a slowing Chinese economy, ing, digital marketing and cross-plat- of websites in China, while eyeing the top “Data has already become the new ‘natu- by phone last week. It has more exploring markets abroad and invest- bought Youku Tudou Inc to expand into form entertainment as other key areas spot in Japan within two years. It’s also ral resource’ that is as vital as oil and elec- than 13.5tn rupiah ($1bn) of as- ing in online media and cloud comput- online video and Lazada Group to gain a of long-term growth. The company has beefi ng up its presence in the Middle East tricity. Cloud computing is the new ‘en- sets, according to its website. ing to tap new sources of revenue. The foothold in Southeast Asia. positioned cloud computing as one of its and US. “Cloud computing and big data gine’ powering commercial operations.”

ZTO Express China merger seen challenge to giant’s oil refi ning grip eyes $1.3bn

Bloomberg 30% of the country’s total capacity. IPO in US Singapore “This is probably part of the govern- ment’s energy reform to consolidate smaller players and put them head-to- Bloomberg merger of Sinochem Group and head with the bigger state refi ners” like New York China National Chemical Corp PetroChina and Sinopec, said Suresh A would create a new oil-refining Sivanandam, a senior manager of re- challenger to established state-run fi ning research at Wood Mackenzie Ltd TO Express Inc, a Shang- behemoths that dominate the coun- in Singapore. hai-based delivery com- try’s fuel-making business. The combined company would have Zpany, aims to raise as much The prospective tie-up, combining about 50mn tonnes of annual capacity, as $1.3bn in the biggest US ini- two companies with assets of more equivalent to about 1mn barrels a day, tial public off ering by a Chinese than $100bn, would create the largest according to Wood Mackenzie Ltd That entity since its key customer oil refiner behind China Petrochemi- compares with 300mn tonnes annually Alibaba Group Holding Ltd went cal Corp and China National Petro- for Sinopec, and 195mn for PetroChina. public. leum Corp, according to data from ChemChina has crude supply deals The company is marketing Wood Mackenzie Ltd. The move sig- with Russia’s Rosneft PJSC, while Sin- 72.1mn American depository nals a new strategy by policymakers to ochem has term contracts with Middle receipts, or ADRs, for $16.50 boost competition rather than weaken Eastern producers, according to Nah at to $18.50 apiece, according to the dominant state-run companies Energy Aspects. “Chemchina, the big- a fi ling on Friday. A successful by spinning off assets, according to gest independent refi ner in terms of sale would rank No 7 among all Nevyn Nah, a Singapore-based ana- system, and Sinochem, with all its im- IPOs by Chinese companies on lyst with Energy Aspects Ltd. port and export facilities, make them a US exchange, according to data “The Chinese authorities are seri- pretty strong together,” he said. compiled by Bloomberg. ous about weakening the stranglehold ChemChina is the country’s largest Online retailer Alibaba, which that Sinopec and PetroChina have on chemical company with nine refi ner- uses ZTO Express to fulfi l orders, the oil sector,” Nah said, using the ies and more than 140,000 workers, raised $25bn in 2014 in the big- names of the publicly listed compa- according to its website. Sinochem, gest such off ering on record. nies. “For the longest time, they’ve which has about 50,000 employees and ZTO Express also counts been talking about breaking this up, assets worth about HK$301bn ($39bn) Chinese online retail giant but now they’re actually talking about in businesses spanning oil fi elds in Bra- JD.com Inc among its custom- mergers, which is going against the zil to rubber plantations in southeast ers. It handled 2.9bn packages grain of the earlier strategy.” Asia, owns China’s largest fertilizer in 2015, according to its IPO CNPC’s listed PetroChina Co in company, as well as fl uorine and seed prospectus, up 62% from a year Hong Kong closed 0.8% higher on Fri- companies. earlier. The 827.7mn packages day, while China Petroleum & Chemi- China’s state-owned enterprises ac- ZTO Express transported in cal Corp, known as Sinopec, gained A merger of Sinochem Group and China National Chemical Corp would create a new oil-refining challenger to established count for about 40 percent of the coun- the first quarter of 2016 made 1.1%. No one answered two calls to state-run behemoths that dominate the country’s fuel-making business. try’s industrial assets and 18% of total up 14% of all express parcels their respective press offices on Fri- employment, according to Bloomberg delivered in China, according day. The city’s benchmark Hang Seng and distribution dominance of Si- cided to invest in expanding its pipe- eralise the energy sector at home while Intelligence economists Fielding Chen to iResearch, cited in the com- Index rose 0.9%. nopec Group and CNPC. The govern- line network, suggesting that China also creating national champions that and Tom Orlik. Consolidating and im- pany’s deal prospectus. In response to Bloomberg’s story ment had looked at stripping them of was reorienting its efforts – a case can better compete globally. China has proving their profi tability is critical Founded in 2002, ZTO Ex- about the merger plan, representatives their oil and gas pipelines, accounting bolstered the following month when also encouraged the development of for authorities to rebalance the $10tn press plans to use the proceeds from ChemChina and Sinochem said for some 90% of the nation’s network, President Xi Jinping advocated mak- smaller independent refi ners, known economy away from debt-fuelled in- from the IPO to buy land, trucks on Friday that “there is no such thing.” to allow access to all producers and ing state-owned enterprises “bigger, as teapots. They’ve been allowed since frastructure investment and exports to and sorting equipment, build fa- China’s energy-sector reforms had distributors, Bloomberg reported in better and stronger.” last year to buy and import their own one powered more by services and con- cilities and for general corporate focused on the exploration, refining May 2015. In June this year, CNPC de- The government has sought to lib- crude oil and now account for about sumer spending. purposes. ONGC, United Energy to vie for $2bn Chevron assets in Bangladesh

Bloomberg with Chinese conglomerate Orient Group said. Energy companies have announced “Several large global oil companies are and Moulavi Bazar natural gas fields in our interests. We will only proceed if we London Inc, one of the people said. The gas fields, $43.2bn of asset sales this year after selling assets, probably because they are Bangladesh and sells all the production to can realize attractive value for Chevron.” which could fetch as much as $2bn, crude prices fell to the lowest level in facing a cash crunch at the parent level state oil company Petrobangla, according Representatives for ONGC, United Energy, have also drawn interest from Brightoil more than a decade, according to data following the sharp fall in oil and gas prices,” to its website. Its net daily production last Brightoil Petroleum, the Bangladeshi Oil & Natural Gas Corp, the largest Indian Petroleum Holdings Ltd, the people said, compiled by Bloomberg. Chevron, the Sachin Mehta, a Mumbai-based analyst at year averaged 720mn cubic feet of natu- energy ministry and Petrobangla didn’t oil and gas explorer, and Hong Kong-listed asking not to be identified because the largest US oil producer after Exxon Mobil Centrum Broking Ltd, said by phone on Fri- ral gas and 3,000 barrels of condensate. immediately respond to requests for com- United Energy Group Ltd are among information is private. The Bangladeshi Corp, is seeking buyers for Asian geother- day. Indian companies have been scouting “We can confirm that Chevron has been ment. Calls to Orient Group’s general line bidders for Bangladesh natural gas assets government has also expressed interest mal assets that could fetch as much as for deals and have strong balance sheets to in commercial discussions about our in- were unanswered. United Energy agreed being sold by Chevron Corp, people with in taking over Chevron’s holdings, accord- $3bn and is also holding talks to sell other support acquisitions, according to Mehta. terests in Bangladesh,” Chevron said in an to buy BP Plc’s exploration and produc- knowledge of the matter said. ing to the people. No final agreement has assets in Indonesia and Thailand, people Chevron, based in San Ramon, Cali- e-mailed statement on Thursday. “At this tion assets in Pakistan for $775mn in 2010, United Energy submitted a joint off er been reached with any party, the people familiar with the matter said earlier. fornia, operates the Bibiyana, Jalalabad stage, no decision has been made to sell its first venture in the country. - Gulf Times Sunday, October 16, 2016 17 BUSINESS

he Qatar Stock Exchange Trading volume decreased by QSE Index and Volume (QSE) index gained 32.63 16.8% to reach 23.9mn shares versus T points, or 0.32%, during the 28.7mn in the prior week. The number week to close at 10,389.96. Market of transactions decreased by 19.0% to capitalisation inched up by 0.3% reach 10,751 versus 13,274 in the prior to QR558.1bn versus QR556.6bn week. The banks and financial serv- at the end of the previous week. ices sector led the trading volume, Of the 44 listed companies, 19 accounting for 27.6%, followed by the ended the week higher, while 23 telecoms sector, which accounted for fell and one remained unchanged. 25.3% of the overall trading volume. Ooredoo (ORDS) was the best per- Vodafone Qatar (VFQS) was the top Weekly Market Report forming stock for the week with volume traded stock during the week a gain of 4.0% on 801,446 shares with total traded volume of 5.2mn traded. On the other hand, Qatar shares. Cinema & Film Distribution Co was Foreign institutions remained bull- the worst performing stock with ish during the week with net buying a decline of 4.8% on 2,520 shares of QR181.8mn versus net buying of Source: Qatar Exchange (QE) traded only. QR183.6mn in the prior week. Qatari Trading value during the week institutions remained bearish with decreased by 20.3% to reach net selling of QR134.3mn versus net Weekly Index Performance QR832.7mn versus QR1.0bn in the selling of QR74.8mn the week be- prior week. The banks and financial fore. Foreign retail investors turned services sector led the trading val- bullish for the week with net buy- Source: Qatar Exchange (QE) ue during the week, accounting for ing of QR5.4mn versus net selling of 32.1% of the total trading value. The QR12.2mn in the prior week. Qatari industrials sector was the second retail investors remained bearish biggest contributor to the overall with net selling of QR53.0mn versus trading value, accounting for 29.6% net selling of QR96.6mn the week of the total. Qatari Investors Group before. (QIGD) was the top value traded In 2016 year-to-date, foreign insti- stock during the week with total tutions bought (on a net basis) $1.7bn traded value of QR137.9mn. worth of Qatari equities.

Source: Bloomberg

DISCLAIMER Source: Qatar Exchange (QE)

This report expresses the views and opinions of QNB Financial Services Co WLL One Person Company (“QNBFS”) at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. Gulf Times and QNBFS hereby disclaim any responsibility or any direct or indirect claim resulting from using this report.

Qatar Stock Exchange Top Five Gainers Top Five Decliners

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

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

Technical analysis of the QSE index he Qatar Index ended another week reiterate the notion that the index requires with stability as it inched up by 0.32% a stronger move above the 10,650 to put it T10,389.96. This shallow movement back in a potential upswing. Our main sup- took place on weaker volumes, which ex- port remains at 10,000 and the expected plains why the movement was subdued. We resistance level to be at the 11,500 level.

Definitions of key terms used in technical analysis

andlestick chart – A candlestick represents one trading day) in our analy- chart is a price chart that displays sis. Cthe high, low, open, and close for a Doji candlestick pattern – A Doji candle- security. The ‘body’ of the chart is portion stick is formed when a security’s open and between the open and close price, while close are practically equal. The pattern indi- the high and low intraday movements cates indecisiveness, and based on preced- form the ‘shadow’. The candlestick may ing price actions and future confirmation, represent any time frame. We use a one- may indicate a bullish or bearish trend re- day candlestick chart (every candlestick versal. Gulf Times 18 Sunday, October 16, 2016 BUSINESS Wall Street’s wait for bond trading boost starts to pay off

Bloomberg to data compiled by fi nancial-research seen a number of the European banks erated 71% of fi xed-income trading Morgan had for the linked-quarter, he normal seasonal trends, but revenue New York fi rm Coalition. US banks have been scale back in their capital-market op- revenue in 2015, up from 66% in 2011, said in a separate telephone interview. probably will still improve from a year counting on a rebound, as European ri- erations.” according to Bloomberg Intelligence. Lake said JPMorgan benefited earlier, Gerspach told analysts. The vals such as UBS Group retreated or cut Some of the gains may be due to JPMorgan’s strong jump in fi xed- from clients who had cashed in in- past two years have seen roughly 20% all Street’s biggest banks deep to save money. Deutsche Bank’s woes, according to income revenue helped the fi rm beat vestments prior to the UK vote on drops in markets revenue, though it’s have spent years waiting for Friday’s earnings reports may bode John Gerspach, Citigroup’s chief fi - analysts’ profi t estimates, as it posted whether to leave the European Union too early to know if that will be the case Wthe end of a slump in fi xed- well for Bank of America Corp, Gold- nancial offi cer. The Frankfurt-based $6.29bn of third-quarter net income. and had to reinvest once the decision this time, he said. income trading. It’s fi nally paying off . man Sachs Group and Morgan Stanley, lender has said it’s losing out on busi- Citigroup’s $3.84bn profi t also topped was made. “December usually is a pretty light Citigroup’s fi xed-income revenue which report third-quarter results ness as it battles to retain confi dence expectations. “It was a situation where we were month,” he said. “There’s certainly surged 35% to $3.47bn in the third next week. amid mounting legal charges. At Wells Fargo & Co, where institu- fi ring on all cylinders,” Lake said. nothing to indicate right now that quarter, and JPMorgan Chase & Co Bank stocks initially climbed af- “Some of that could be related to tional trading makes up a much smaller “There were a number of catalysts in that’s going change.” posted $4.33bn from the business, $1bn ter earnings were released, with some of what’s going on at Deutsche, portion of its business and isn’t dis- the market, not just Brexit, but also In equity trading, Citigroup is aim- more than analysts’ average estimates. the KBW Bank Index up as much but more and more it’s just related closed in the same way, net income slid central-bank actions, money-market ing to climb global rankings to fi fth or Marianne Lake, JPMorgan’s chief fi - as 1.8%, before paring those gains to the fact that a lot of the European to $5.64bn, the company said. reforms, and we had good conditions sixth place, up from eighth or ninth, nancial offi cer, said on Friday that the in the wake of a report showing an banks are drawing back slightly from Wells Fargo Chief Financial Offi cer to monetise the fl ow and clients moti- gaining market share to potentially momentum continued into October. unexpected drop in US consumer the rates and currencies business,” John Shrewsberry said in a Bloomberg vated to act.” add about $1bn in annual revenue, That would be a welcome change sentiment. JPMorgan slipped 0.3% Gerspach said on Friday in a confer- Television interview that his bank had Still, trading often slows in the year’s chief executive o`ffi cer Mike Cor- from the past seven years. Revenue by the close of regular trading, and ence call. a “similar experience to JPMorgan in fi nal months, and the trend may play bat said. Investments in technology from trading fi xed-income products - Citigroup gained 0.3%. The biggest US banks have been fi xed-income trading in particular.” out again. and people to support that are now typically bonds, currencies and com- “American banks will continue to gaining market share at the expense Trading revenue for both fi xed income In Citigroup’s broader division serv- largely complete, so it’s up to the team modities - tumbled to $70bn in 2015 at push for growth where they can get it,” of European competitors for years. and equities was “strong in the quar- ing institutional clients, markets rev- to execute, he said. In May, Citigroup the world’s biggest investment banks, said Jeff Morris, head of US equities at Among the nine largest global invest- ter” and exhibited “about the same enue will likely decline in the fourth named Dan Keegan and Murray Roos about half the 2009 level, according Standard Life Investments. “You’ve ment banks, the top fi ve in the US gen- kind of period-to- period growth” JP- quarter from the third, in line with co-heads of the unit.

Traders seeking fl oor on bond slide anticipate ECB Britain’s mega bond market remarks on QE ensnared in Brexit battle Bloomberg London Bloomberg Edinburgh he October selloff in euro-area bonds is abating as traders prepare for hints Tfrom the European Central Bank he prospect of a messy divorce (ECB) about the future direction of its asset- between the UK and the Euro- purchase programme. Tpean Union threatens to over- Investors will be keen for cues from ECB whelm support for nation’s bonds offi cials when they announce policy deci- from the Bank of England’s asset sions on October 20. purchases. Speculation over when the central bank Gilts have been the worst per- may begin tapering its €1.7tn ($1.9tn) quan- formers in the developed world this titative-easing programme triggered a slide month as a sliding currency pushed in eurozone debt earlier this month. investors’ expectations for con- German 10-year bund yields, which sumer-price growth to a more than climbed to the highest level in almost one two-year high. Still, with the BoE month on October 12, rose less compared having committed in August to buy- with the previous week in a sign the selloff ing £60bn ($73bn) of bonds over six may be losing steam. months, that move pales in compari- “We may well already have seen the son to the currency’s 18% drop since bulk of the repricing” in bunds after the Brexit. recent slump, said David Schnautz, a di- Despite the BoE’s support, the rector of fixed-income strategy at Com- danger signs for gilts are mounting. merzbank in London. In the next ECB Bets that infl ation may stay the cen- meeting, “we’ll see if they’ll tinker with tral bank’s hand have seen traders re- the format of QE. We pretty much know move wagers on interest-rate cuts all that it’s just a matter of when and not if” the way through 2017. for them to do so. On top of that, should Prime Min- Benchmark German 10-year bund yields ister Theresa May’s government rose four basis points, or 0.04 percentage purse a departure from the EU that point, last week to 0.06% in London, com- deprives the country of tariff -free pared with a 14 basis-point increase the pre- access to the single market, it may vious week. create an even more toxic environ- They touched 0.074% on Wednesday, the ment for bonds, boosting prices for highest since September 14. The 0% security domestic producers while hurting due in August 2026 fell 0.373 this week, or exporters’ prospects. €3.73 per €1,000 face amount, to 99.433. With the government eyeing fis- After Greek sovereign debt, German cal stimulus to support growth, a bunds were the worst performers in the dramatic increase in funding costs euro area last week through Thursday, with may ultimately prove a more seri- holders losing 0.4% but have still made 5% ous problem than the currency’s this year, according to data compiled by weakness. Pedestrians walk past the Bank of England building in the City of London. The prospect of a messy divorce between the UK and the European Union threatens Bloomberg. “UK government bonds are among to overwhelm support for nation’s bonds from the BoE’s asset purchases. In the ECB’s last meeting, President Mario the most vulnerable assets,” said Al- Draghi tempered speculation of expanded berto Gallo, London-based head of dum. Yields touched a record-low been hit hard by Theresa May’s Now it’s the UK standing out for cies helped to widen inequality. The stimulus when he said offi cials didn’t discuss macro strategies at Algebris Invest- 0.5% in August, and were as high as comments on the likelihood of the wrong reasons, with the pound’s central bank has been buying gilts an extension to the bond-buying plan. Com- ments, which oversees $5.2bn. “They 1.99% on the last day of 2015. ‘hard Brexit’ and the lack of visibil- decline making headlines and fi lter- since August, with initial concerns merzbank’s Schnautz said the central bank are at these levels because the BoE is Gilts lost 2.3% in October through ity that this brings, plus the pros- ing through to the real economy in over potential scarcity fading as the could likely signal alterations to its plan. still buying them, but that’s an arti- Thursday, the biggest decline among pect of more fiscal stimulus.” the form of disputes between super- outlook for infl ation picked up. “So long as the programme is under way, fi cial level. sovereign markets tracked by the It’s a fall from grace for a market markets and suppliers. “If you look at break-even rates, some edges need to be trimmed,” Schnautz With sterling declining more and Bloomberg World Bond Indexes. that investors looked to as a haven Sterling’s slide versus the dollar they’ve already jumped quite a said. “The market is ready for that, so that more, the BoE will be under pressure “I get the sense that the market during the euro-area’s sovereign since the June 23 vote is also threat- bit,” said Vatsala Datta, a rates can be something that the ECB is about to from infl ation.” Algebris has a short has got fairly numb to these kind of debt crisis. ening to erode the value of the fi xed strategist at Royal Bank of Canada address probably this week.” position on gilts, Gallo said, meaning gilt moves over the last few months” Back then, investors were attract- returns on the nation’s bonds, par- in London. “One of the factors is While the ECB’s stimulus measures have a bet the assets will decline. said Mike Riddell, a London-based ed by the UK’s relative political and ticular for international investors. doubts about how prominent QE is helped keep the euro region away from defl a- The yield on UK 10-year gilts debt-fund manager at Allianz Glo- economic calm at a time when con- In addition to the infl ation out- going to be. If the market expects tion, infl ation is still below the central bank’s rose 13 basis points, or 0.13 percent- bal Investors, which oversees about cern that its neighbours’ debt loads look, doubts about BoE Governor that QE is not going to be the main goal of just below 2%. Draghi said that level age point, this week, adding to a 22 $520bn. had reached unsustainable levels was Mark Carney’s ability to extend policy tool and the baton is going should be met by early 2019 at the latest. basis-point increase in the previous “Most people are attributing it to bringing into question the existence quantitative easing were reinforced to be picked up by fiscal policy, “This is predicated on maintaining the ex- fi ve days. a lower pound and therefore high- of the euro, toppling governments at the Conservative Party confer- then technically you’d have one of traordinary support of our monetary policy,” It jumped to 1.15% on Friday, the er inflation, which I think is only and forcing some countries to seek ence, where Prime Minister Theresa the buyers of nominal gilts out of he said at a press conference on October 8. highest since the June 23 referen- partly true. Sterling and gilts have bailouts. May said ultra-loose monetary poli- the market.” Infl ation worries push UK gilt yields to highest since Brexit

Reuters expected to slow as Britain begins Their bounce also reflects a broader since the vote for Brexit has soared by London the complicated process of leaving rise in yields across bond markets as much as 400%, figures from Trax — a the EU and tries to negotiate new on the view that central banks are subsidiary of MarketAxess — showed trade deals, leaving the economy reaching the limits of their policy of earlier this week. Yields on 10-year British government facing a potentially toxic mix of a monetary easing, and that the US Sterling’s plunge has also boosted bonds on Friday hit their highest level tumbling currency, rising bond yields, Federal Reserve will hike interest rates the many internationally-focused, since June’s vote to leave the European accelerating inflation and sluggish this year. dollar-earning companies on Britain’s Union and sterling held near record growth. In contrast to gilt yields, sterling has lost blue chip FTSE 100 index, which enjoy lows as investors bet the currency’s Ten-year gilt yields rose more than 10 almost 2% against the dollar this week. a currency-related accounting lift as plunge would send inflation soaring. basis points to 1.149%, their highest It was trading down a third of a per cent those dollars are converted back into Bank of England Governor Mark Carney level since Britain’s June 23 Brexit on Friday at $1.2210 and on track for a pounds. told a public meeting he was willing to referendum. fortnightly fall of almost 6%, its biggest The FTSE 100 stands more than 11% allow inflation to run “a bit” higher than The rise in yields pushed the gap over since late June. above its pre-Brexit level, while the the central bank’s 2-percent target to benchmark German Bund yields to The pound’s fall has stoked demand more domestically-exposed FTSE 250 help employment and allow Britain’s about 107 bps — its widest since late for inflation-linked bonds, which has has gained nearly 4%. economy to grow. June. pushed real yields — nominal yields While a drop in sterling hampers British His comments were echoed by fellow “There’s been a huge increase in adjusted to remove the eff ects of mid-cap firms, which are seen as a play BoE policymaker Kristin Forbes, who inflation expectations and bond yields inflation — close to record lows. on the UK economy, they have been said inflation was already picking up, are catching up,” said Lyn Graham- “It’s a combination of the result of rising lifted by better than expected post- would accelerate and could “sharply” Taylor, fixed income strategist at yields globally, the political noises Brexit economic data, as well as the overshoot the BoE’s target over the Rabobank. about some of the negative impacts of prospect for further M&A activity as next two years. Sterling and gilt yields had until about QE, and because of a rise in inflation foreign companies seek out corporate Inflation is widely expected to rise two weeks ago moved largely in sync, expectations going forward as a result bargains in the UK. above 2% in 2017 because of a sharp following the usual developed-market of the fall in the pound,” said Insight’s As sterling fell, the FTSE 100 rose 0.9% fall in the value of the pound — a 16% model of higher market interest rates undergo a “hard Brexit”, yields have biggest weekly rise since August 2015, head of currency investment and fund on Friday. tumble to record lows in trade-weighted drawing in flows of capital. begun to reflect concerns about UK climbing 30 bps, and were on track manager Paul Lambert. The FTSE 250 was up 0.8%, terms. But since sterling’s latest lurch inflation. to end this week with a rise of about The volume and value of UK underpinned by a surge in MAN At the same time, the economy is downwards on worries Britain will Gilt yields last Friday posted their 15 bps. government bonds changing hands Group’s shares. Gulf Times Sunday, October 16, 2016 19 BUSINESS

FOCUS Bargain hunting FTSE 1OO index rises By Peter Garnry

There’s nothing of course that a trader likes better than a good bargain and a sharp plunge in a former market darling of the to record high as pound type that is hitting Samsung now, is just the thing to perk the interest of the odd contrarian or two. Such temptation should be resisted, insists Saxo Bank’s head of equities strategy Peter plumbs the depths Garnry. “There has been a lot of talk Reuters about Samsung and we had London a long trade in the summer which we got out of just as remembers its huge IPO in the controversy regarding the September 2014 will testify to. s sterling plumbs the depths, for- batteries on the Galaxy Note 7 “There’s been a setback over eign investors are withdrawing model first broke,” says Garnry, recent weeks but I’m going long Afrom British stocks and leaving speaking on the daily global Alibaba when New York opens domestic funds to push the benchmark morning call. “My current today,” says Garnry. bluechip index to record highs — for now. view on Samsung is that there The relative stability in GBP/ But some investors are growing nerv- is serious brand reputation USD spot after the flash-crash ous about how long the sterling-based damage and quality issues mayhem of last Friday might funds, insulated from the pound’s slide enveloping the South Korean have been expected to induce and drawn by healthy dividend yields, giant.” some lowering in volatility, will continue to fi ll the gap. “Institutional investors are quite but not a bit of it, it seems, The FTSE 100’s sharp recovery from wary about Samsung,” he says. according to Kresten Bechmann lows after Britons voted to leave the Eu- “If it happened once, it could from the FX Options desk in ropean Union in June stands in stark happen again.” Copenhagen. contrast to a darkening outlook for the “I don’t think this is a buying “We’re very surprised volatility pound and the domestic economy. opportunity,” the equities on one-month GBP/USD has not In sterling terms, London-listed chief adds. “If the share price traded lower as spot has been stocks have raced to their highest ever goes below 650, then there is relatively stable since the flash levels even though investment funds a football field of space to the crash,” says Bechmann. have continued to bleed money, share downside.” “The implied volatility has been valuations are near multi-year highs and Apple conversely, says going higher and the realised the outlook for earnings remains muted. Garnry, can continue to profit volatility has been going lower Data from Thomson Reuters Lipper from its rival’s woes as the and that gap should narrow shows that from June to September, UK- Galaxy Note 7 fiasco puts with an opportunity to go focused equity funds suff ered outfl ows of into perspective the sharp short.” more than £3bn ($3.73bn). criticism that came its way Bechmann sees an opportunity Much of this appears to have been after the September 7 launch to shift focus to one-month pulled by investors based in dollars or of its iPhone 7 left the market EUR/USD options. euros. a little underwhelmed. “If you think the focus is turning While the FTSE is up 9% from the EU Garnry’s focus Friday is on the away from the UK to more referendum day of June 23, the pound has three big financials — JP Morgan global issues, then selling GBP/ lost 18 and 15% respectively against their Chase, Wells Fargo and Citi USD volatility is an option which home currencies — wiping out their no- Group — which delivered their can be financed by buying EUR/ tional gains. Q3 earnings results. USD.” At its latest policy meeting, the Bank per have enjoyed net infl ows since June. Exchange-traded funds (ETFs) based less than 10% in the 1970s and 1980s, “We have a long position on JP Bechmann in particular of England noted estimates from S&P Infl ows are heavily skewed towards so- on the index, which overwhelmingly fa- and stood at around 35% at the turn of Morgan Chase as it is the best anticipates a lot of volatility in Global Market Intelligence suggesting called income funds, which aim to pay vour bigger stocks, are the only other the century. of the financials and will benefit and around the next and final that net purchases of FTSE 100 shares by their unit holders dividends, and tracker group to have seen infl ows since June. Cumberland Advisors, a Florida-based from increasing rates in the presidential debate between non-residents in July and August were funds, which passively buy stocks in a Oil majors BP and Royal Dutch Shell investment fi rm that uses mostly ETFs, US because of their very large Donald Trump and Hillary about half of the average monthly infl ows given index. and emerging markets-focused banks points out that the main UK ETF used by commercial operation,” says Clinton on October 19. last year. Nick Train’s $3bn UK equity fund, HSBC and drugs group AstraZeneca, are US investors, the iShares MSCI United Garnry. Another currency that has had Still, the FTSE 100 rose 13% from June which had a fi fth of the fund in shares of all big outperformers and have been key Kingdom ETF, has lost money this year. Wells Fargo and Citi Group are its fair share of drama these to September and is up by more than fi fth drinks group Diageo and consumer goods in lifting the broader index. A currency-hedged version is up, slated for respective year- last two weeks is Thailand’s since its lows in July following the shock giant Unilever at the end of September, Eric Moore, a portfolio manager of the though the fund’s assets under manage- on-year falls of 4% and 12% baht which, in perfect referendum result. attracted the most infl ows with more Miton UK Income fund who holds Astra- ment are considerably smaller. respectively, but Garnry has synchronicity with the local The composition of the UK index than $440mn. Zeneca shares, says the company is one Bill Witherell, chief global economist polar views on the pair. stock market and the state of along with the kind of investors active in Both Diageo and Unilever exemplify among a handful that pays out dividends at Cumberland Advisors, said a weaker “Wells Fargo is one to stay the nation’s emotions, has been the market helps to shed some light on the kinds of major stocks that investors in appreciating US dollars, making them pound is positive for UK multinational away from but Citi Group on a steady downward descent what is underpinning stocks. have increasingly gravitated to since the even more attractive to British investors. fi rms only as long as single-market ac- from a trading perspective throughout the recent illness of Dominated by large, dividend-paying, Brexit vote, drawn by their dividends, “It may be a one-off mechanical ad- cess continues. could surprise to the upside as the 88-year old king, Bhumibol global companies — many of which re- relatively low reliance on the British justment but right here, right now the “The prospect of a weaker domestic sentiment has been so negative Aulyadej. ceive a big earnings boost when they economy and the boost from off shore impact is real. economy and heightened policy uncer- for the last year, but there has The king’s death on Thursday, bring off shore revenues home thanks to revenues. It’s money in the bank,” said Moore, tainty lead us to maintain our maximum been a reversal in emerging while a source of great angst the weak pound — the FTSE 100 hit the British fund supermarket Hargreaves who adds, however, that the sustainabil- underweight of the UK in our Interna- markets with the higher oil for the nation, has conversely sweet spot in a world where yields on in- Landsdown, which caters largely to do- ity of dividends are a concern as payouts tional, Global, and Tactical Trend ETF price.” helped both the Thai stock vestments are scarce. mestic retail investors, on Thursday have grown faster than a recovery in cor- Portfolios,” said Witherell. Another Garnry likes is Gilead market and the baht recover With yields on British government posted record profi ts and assets under porate profi ts. The FTSE 100’s climb above the 7,000 Sciences. “This stock has some of their losses as a bonds near rock-bottom, this is particu- management for its latest quarter, but The view from across the Atlantic is point level has taken valuations to 16 become too cheap and we’ll perhaps the ultimate kind larly the case for domestic investors for said investors’ confi dence had fallen and less sanguine. times forward earnings, close to the be buying when the New York of certainty replaces the whom currency is less of a factor. this could weigh on future business. Off shore investors are less enthusias- highest in a decade. Stock Exchange opens.” doubt. USD/THB was down “The UK remains an attractive place Equity income funds were in demand tic about investing in UK assets due to It has brought back some uncomfort- Finally, the equities head has approximately 2% at the end for investors seeking dividends; there in a low interest rate environment, chief the growing likelihood of a “hard” Brexit able memories. Chinese e-commerce giant of the Asian session and is are 15 companies with an indicative executive Ian Gorham told Reuters. — in which Britain leaves the EU’s sin- The three instances when the index Alibaba under the microscope currently at around 35.30 from dividend yield of over 5%, which is sig- The large dividend payers are also gle market in order to impose controls was around these levels were just before and with the run in to Singles’ a high of just beneath 36 on nifi cant when compared to the 1% yield among the biggest listed fi rms in the UK on immigration, disrupting access to its the dotcom bust in 1999-2000, the col- Day on November 11 beginning Thursday. on 10-year gilts,” said Matthew Beesley, and with the FTSE 100 weighted by mar- main trading partner. lapse of the Northern Rock bank in 2007 to develop momentum, this is a portfolio manager and Head of Global ket-capitalisation, the larger a fi rm the More than half of UK stocks are held and during last year’s Greek debt crisis. a time of year when Alibaba „ Peter Garnry is head of Equities at Henderson Global Investors. more infl uence its wields on the index’s by overseas investors, according to the “After 20 years in the business, I can’t often prospers as anyone who equities strategy at Saxo Bank. Less than 10% of the roughly 600 moves. Just 10 large stocks make up near- latest data from Britain’s Offi ce for Na- help but feel a little jittery about the UK-focused equity funds tracked by Lip- ly half the market-cap of the FTSE 100. tional Statistics. Foreign holdings were FTSE around here,” said Moore. Portugal to introduce tax Wells Fargo’s new leader leaves on real estate fortunes

AFP travel within Europe’s 26-country Schengen Lisbon free trade zone without restriction. analysts unsatisfi ed in debut Portugal has issued nearly 4,000 “golden” visas that have generated investments of Bloomberg to be identifi ed because the process Portugal will introduce a tax on real estate €2.37bn since the scheme was launched at New York is confi dential. fortunes above €600,000 ($661,000) in 2017 the end of 2012, most of them to Chinese, Analysts, meantime, rattled off to help pay for pensions, the government Brazilians and Russians. the questions they want answered. has said. The Association of Lisbon Homeowners im Sloan had a rocky Wall “We can’t really ask about the in- The tax, fiercely opposed by the real estate (ALP) criticised the new tax, calling it an Street debut as Wells Fargo ternal investigation, there’s no time sector which fears it will put the breaks on “unprecedented fiscal attack against the real T& Co’s chief executive of- frame, we can’t ask who knew what foreign investment, was included in Socialist estate sector”. fi cer, announcing a drop in profi t and when,” Mike Mayo, an analyst Prime Minister Antonio Costa’s draft budget The measure will also aff ect foreign buyers and frustrating analysts hungry at CLSA, complained to Sloan about for 2017. who have flocked to Portugal to take advan- for information on the consumer an hour into the call. “We can’t ask “The taxation of large real estate fortunes tage of tax exemptions granted to European banking scandal that prompted his why it took so long to stop the prob- will enhance the sustainability of our social retirees who move for the first time to the appointment. lems. This is the fi rst time we’ve had security system and contribute to fiscal country. The scene on Friday, as the San to ask questions.” justice,” he told parliament on Friday. French nationals account for 27% of all Francisco-based bank posted third- Mayo said it was “a little frus- If the value of all real estate owned by a foreign real estate buyers, followed by Britons quarter results, left the company’s trating” that the bank didn’t know taxpayer surpasses €600,000 ($661,000), who account for 18%. stock among the worst performers whether aff ected customers are a levy of 0.3% will be applied to the amount “With this measure, the government has in the KBW Bank Index of 24 big US sticking with the lender. above this threshold, according to the draft shot itself in the foot. fi rms. It was another sign investors “Investors wanted to know a budget. Portugal can’t constantly change the rules may share concerns expressed in couple of things primarily,” Bren- The government expects the measure will of the game,” added Henrique Moser, a law- recent weeks by lawmakers, who’ve nan Hawken, a UBS Group analyst, raise €160mn ($176mn) each year. yer with the Telles law firm which specialises questioned how employees could A Wells Fargo ATM sign is seen in front of its main branch in California. The said in an interview after the call. “The taxation of real estate fortunes will in real estate. open legions of accounts without US bank’s stock fell 1% on Friday before paring losses to 0.1% in New York. “How much is this going to cost us make it possible to raise pensions,” said The government also decided to raise its customers’ permission over half a in expenses? And what is this going Catarina Martins, a lawmaker with the far-left tax on home rentals for tourists, which have decade and whether managers are who resigned to help quell a fi ve- bank’s board considered appoint- to mean for revenue? And they gave Left Block party which backs the minority up until now been lower than those applied to being held accountable. week public furore over the bank’s ing an outsider as CEO and how the very little on either.” Socialist government. long-term rentals. “Our board is conducting an in- $185mn settlement of government scandal may shape his approach to Still, tempers were higher when The threshold of 600,000 euros will spare The measure comes as home rental web- dependent investigation into our allegations that employees may have the role. He deferred most queries Stumpf appeared last month at two most beneficiaries of the country’s so-called sites such as Airbnb have seen their business retail-banking sales practices and opened millions of unauthorised about sales abuses, saying that he hearings on Capitol Hill, stumbling “golden visa” scheme, which has helped fuel soar in Lisbon and other Portuguese cities. related matters, and we’re not in a customer accounts over half a dec- wanted “to be very respectful” of over questions about when senior demand for real estate among wealthy for- The number of people who have stayed position to discuss those topics to- ade. The revelations tarnished the the board’s continuing investiga- management became aware of the eigners from outside the European Union. in accommodation in the Portuguese capital day,” Sloan, 56, said just before tak- lender’s reputation and upended a tion. Sloan said he wasn’t sure if the scandal and why the practice wasn’t Cash-strapped Portugal in October 2012 has doubled to 433,000 in 2015 from 213,000 ing questions on a conference call to successful focus on cross- selling - fi ndings would be made public. stopped earlier. started off ering “golden” visas to non-EU the previous year. discuss earnings. Several analysts the practice of pitching additional The board has always intended to Senator Elizabeth Warren, a citizens willing to invest 500,000 euros in Costa came to power in November 2015 unsuccessfully pressed for specifi cs products to legions of customers. disclose conclusions of the review, Massachusetts Democrat, accused property, make a capital transfer of one mil- after his party teamed up with the Com- about the scandal anyway. On the call, which lasted more which may yet take months to com- him at the fi rst session of “gutless lion euros or create 10 jobs. munists and Left Block to oust a centre-right Sloan took the helm at the bank than an hour-and-a-half, Sloan de- plete, a person with knowledge of leadership” for blaming low-wage The Portuguese visas allow foreigners to administration. Wednesday, replacing John Stumpf fl ected questions about whether the the plan said hours later, asking not employees and urged him to quit. Sunday, October 16, 2016 GULF TIMES BUSINESS Increasing risk of hard Brexit shocks investors, says QNB

The recent plunge of the British pound in September after falling to its lowest that the government did not seem to four freedoms — freedom of movement account for 7% of UK GDP. “On the has brought back into focus the level since end-2013 in July. be in a rush to invoke Article 50 of the of goods, services, capital and, crucially, policy side, the Bank of England negative impact of Brexit on the UK Purchasing Managers Index surveys Lisbon Treaty (the trigger for the start people. The EU does not seem willing to faces a dilemma. On the one hand, economy, QNB has said in an economic pointed to expanding manufacturing, of the off icial exit negotiations). make any exceptions. the worsening of the growth outlook commentary. services and construction sectors in However, QNB said the recent The exchange between the UK and should lead to further easing in Following a sharp deterioration in September in contrast to the broad- statements by the UK off icials have the EU may be a negotiating tactic, monetary policy in order to stimulate economic activity in the immediate based contraction registered in July. raised the odds of hard Brexit. but the increasing risk of hard Brexit the economy. aftermath of the Brexit vote, the And real GDP growth in the second The UK Prime Minister, Theresa could still take its toll on the economy. But easier policy would likely result economy has shown resilience quarter was revised up from 0.6% to May, has said that Article 50 will be Losing access to the single market is in further depreciation of the pound, throughout the summer months. This 0.7%. invoked before the end of March likely to be detrimental to UK exports, stoking future inflation,” QNB said. was probably due to expectations that a The rebound was probably related 2017. given that the EU is the largest export In summary, the rebound of the UK soft version of Brexit will prevail. Some to perceptions that Brexit could be The Prime Minister also explicitly destination. The uncertainty about the economy in the summer was due to had even hoped that the Brexit decision overturned or watered down into a ruled out the Norwegian and the future relationship between the UK expectations that a soft Brexit outcome could be overturned. “soft Brexit” version. Swiss models as bases for a future and the EU could depress investment could be reached. However, recent statements by the UK The Brexit question has always been relationship with the European further. But economic performance could government off icials have increased the about the trade-off between economics Union (EU) and highlighted that the The Bank of England’s surveys of now reverse given the government’s likelihood of “hard Brexit”, which could (having access to the European single immigration issue is a red line for her investment intentions suggest a sharp hawkish stance to limit immigration prove detrimental for the economy. market) and political choices (taking government. downturn in the summer, despite the even if it compromises access to the By choosing hard Brexit, the UK is control over UK immigration). The Indeed, the government seems overall stabilisation of data. single market. incurring economic costs to pay for its soft Brexit version favours economics insistent on controlling immigration Firms providing financial services in As a result, QNB expects UK growth political choices. over politics as it would allow free Brexit referendum. It is, therefore, even if it means losing access to the the UK are also at risk of losing their to slow to 0.7% in 2017 from 1.8% Economic activity data in the UK have movement of people in exchange not surprising that the data showed a single market. In response, the EU “passporting” rights to operate in in 2016. Given the recent plunge of rebounded following a sharp decline in for access to the European single rebound in activity when this outcome off icials have reiterated their stance the EU and may decide to move out the pound, which fell to a 30-year the immediate aftermath of the Brexit market. It does not represent a radical seemed likely. The likelihood of soft that full access to the single market can of London. This would be a blow to low against the US dollar, financial vote. Consumer confidence picked up change from the world before the Brexit was also supported by the fact only be achieved in exchange for the the economy, since financial services markets seem to agree, it said.

77.3% of Qatar SMEs post $852.3mn cumulative Kia Motors rises to 69th investments in 2015

By Peter Alagos in Interbrand 2016 Best Business Reporter

ore than 70% of Qatar’s small and medium-sized Menterprises (SMEs) have Global Brands report posted cumulative investments worth $852.3mn in 2015, the Gulf Organisa- he global value of the Kia Mo- tion for Industrial Consulting (Goic) tors brand has grown by 12% said in a report. Tover the last year, according The amount, according to Goic, to Interbrand’s exclusive list of the came from 596 SMEs or 77.3% of the 100 ‘Best Global Brands’. According total 771 manufacturing factories in to the 2016 study released recently, Qatar, and represents about 1% of the Kia moved up fi ve spots to become total industrial investments valued at the 69th most valuable brand in the around $82.4bn. world. The report also noted that for the The Korean manufacturer’s esti- same period, Qatar SMEs employed mated brand value grew from $5.7bn 35,400 workers or about 47% of the Al-Ageel: Goic has recorded 13,995 in 2015 to $6.3bn in 2016. This rep- total manufacturing industry’s labour SMEs in the GCC in 2015. resents a seven-fold (603%) increase force (75,500 workers). since 2006, the year in which the On the other hand, Goic statistics the 44.3%, Goic said 28.7% were em- brand declared design-driven man- showed that about $15bn was invested ployed by small enterprises, while the agement as a key strategy behind the in the SME sector in the Gulf Coopera- remaining 15.6% were hired by medium company’s future growth. tion Council, or 4% of the total indus- enterprises. “Despite economic uncertainty trial investments in the GCC valued at According to Goic, SMEs operate in and stagnation in the automotive $393.7bn. all industrial fi elds but are mainly fo- market across a number of regions, The report further revealed that ap- cused in the areas of construction met- this welcome rise in Kia’s brand val- proximately $6bn was invested in small als, transportation, and other indus- ue is a clear refl ection of extensive enterprises and about $9.5bn in medi- trial activities. Around 3,369 factories company-wide eff orts to ensure con- um enterprises. belong to this fi eld or about 24% of the sistent and continuous growth in our Goic secretary general Abdulaziz bin total number of SMEs. brand power. Hamad al-Ageel said Goic recorded In the manufacture of non-metallic “This result provides us with fur- 13,995 SMEs in the GCC in 2015. Of the products such as building materials, ther motivation to continue our A recently released 2016 study revealed that Kia moved up five spots to become the 69th most valuable brand in the world. total number of companies, 11,288 are Goic recorded 2,316 factories in 2015 mission to become the most desir- small businesses while 2,707 are me- (16.5% of the total SMEs); manufacture able automotive brand in the eyes of has enabled the company to empha- all-new Sportage and Optima sedan ing events have provided additional dium-sized fi rms or 82.9% of the total of rubber and plastic products (11%); consumers,” said Charles Suh, senior sise the vibrant, reliable, and distinc- both receiving infl uential ‘red dot’ momentum to the growth of the Kia 16,890 manufacturing factories in the food and beverages (10.9%), and other vice-president of the Corporate Mar- tive nature of its cars. and ‘iF’ design awards. Other new brand. Sponsorship arrangements GCC. industrial activities. keting Division, Kia Motors. According to Kia, the “most im- products and technologies further with FIFA, UEFA, NBA, LPGA and the To distribute industries into these On accumulated capital, Goic said Mike Rocha, global director of portant” achievement over the last 12 enhanced the brand’s image with the Australian Open tennis champion- categories, Goic said it relies uniformly 2015 results showed that the manufac- Brand Valuation, Interbrand, said, months is its fi rst place ranking in the company launching the Niro hybrid ship have provided the company with on the invested capital, which diff eren- ture of construction metals, transpor- “Kia’s impressive growth in brand JD Power 2016 Initial Quality Study in utility vehicle and the all-new Ca- a wealth of opportunities to engage tiates diff erent types of Gulf industries tation, and other industrial activities value in recent years can be seen as a the US. denza. with the company’s young-at-heart after a thorough review of the GCC ranked fi rst with $3.4bn worth of in- direct result of consumers’ strength- Ranked ahead of all other manu- At the 2016 Consumer Electron- target customers across the globe. manufacturing industries database. vestments (about 22% of the total in- ening attachment to the highly-de- facturers, Kia said this marks the fi rst ics Show (CES), Kia presented its vi- Interbrand’s 17th annual Best Glo- According to Goic, an enterprise is vestments in SMEs). sirable designs and features of Kia’s time in 27 years that a non-premium sion for future autonomous driving bal Brands report identifi es the 100 considered “small” if it has invest- This was followed by the manufac- product line-up, and engagement brand has taken the top spot in the technologies, and announced its new most valuable global brands, ana- ments less than $2mn, while medium ture of building materials with about with worldwide communications automotive industry’s benchmark ‘DRiVE WISE’ sub-brand, embody- lysing the many ways in which the companies have investments between $3.2bn worth of investments (21% of activities centred on developing the evaluation of new vehicle quality. ing Kia’s philosophy to realise intel- strength of a brand benefi ts organisa- $2mn and $6mn. Large companies have the total investments in SMEs), food brand’s image. Kia’s rise to the top of this year’s ligently safe vehicles with Advanced tions – from delivering on customer investments worth $6mn or more, Goic and beverages ($1.9bn or 12%), rubber Kia’s brand performance in the Eu- ranking was driven by class-leading Driver Assistance Systems (Adas). expectations to driving greater eco- further said. and plastic products ($1.7bn or 10.9%), ropean market in particular has been performances from the Sportage The expansion of the company’s nomic value. Goic data also revealed that in 2015, and remaining industrial activities. driven by a strong SUV line-up, as compact crossover and Soul urban ‘GT’ model line-up – with high- Interbrand’s methodology was the SMEs’ share of the total manufactur- On labour force, the manufacture of well as engaging experiential cus- crossover. performance turbocharged engines, fi rst ISO-certifi ed brand valuation ing factories was about 82.8% and em- construction metals, transportation, tomer communications programs, Kia was also named by JD Power sports suspensions, and perform- method. The ranking is based on a ployed 44.3% of the total labour force and other industrial activities topped on- and off -line.” as the third highest ranking brand ance-inspired design – has further combination of attributes, each con- despite the limited investments (4% of the list with about 187,000 workers or The signifi cant and sustained among all non-premium manufac- boosted the desirability and dyna- tributing to a brand’s cumulative val- the total manufacturing industries in- 25% of the total SME labour force, fol- growth is a result of company-wide turers in its Automotive Perform- mism of the Kia brand. ue: fi nancial performance of branded vestments). lowed by building materials (125,000 eff orts to strengthen the brand and ance, Execution and Layout (Apeal) To accompany the ongoing growth products and services, the role the In terms of labour force, SMEs em- workers or 17.3%), food and beverages cultivate a more emotional attach- awards for new vehicle satisfaction in the company’s product line-up, brand plays in infl uencing customer ployed around 721,399 individuals (75,000 workers or 10.4%), rubber and ment to Kia and its products among in the US. and increased capabilities of each choice, and the strength of the brand (about 44.3% of the total manufactur- plastic products (72,000 or 10%), and consumers. Since 2012, Kia’s global Kia’s excellence in design contin- vehicle, offi cial partnerships with in commanding a premium price or ing industry’s 1.6mn labour force). Of other industrial activities. brand campaign, ‘A Diff erent Beat’, ued to be recognised in 2016 with the the world’s most high-profi le sport- secure earnings for the company. Doha Bank Assurance Company recertifi ed with ISO 9001:2015 oha Bank Assurance Company, fi ed as an ISO 9001: 2008. The highest Doha bank’s insurance arm, standards of service delivery requires Dhas been “successfully recer- ongoing quality introspection, to en- tifi ed” with ISO 9001:2015, a “global able efficiencies in delivery and con- symbol for compliance with the es- venience to the customers, which we tablished standards for business ex- are committed to provide, by follow- cellence”. ing the international best practices Doha Bank Assurance Company has and standards. thus become the “fi rst Insurance com- With Doha Bank Assurance Com- pany in Qatar recertifi ed with the latest pany having obtained the latest ISO ISO 9001:2015”, a company statement 9001:2015 recertifi cation, we will con- said. tinue our journey towards providing “This certifi cation is in compliance best-in-class services.” with the successful completion of re- He said, “This achievement further certifi cation audit of all the depart- reinforces our commitment to ensure ments of Doha Bank Assurance Com- that our Customers remain the core pany as per the revised ISO 9001:2015 focus of our business, and that we standards. provide them with the best in class The certifi cation was awarded by services. one of the world’s leading inspection, The certification is a reaffirma- verifi cation and certifi cation body tion on Doha Bank’s adaptability for SGS for providing “general insurance risk-based thinking in providing the services under the regulatory frame- quality of general insurance serv- work”. ices and solutions to the entities in Doha Bank CEO Dr R Seetharaman Qatar. With the continued support said, “Doha Bank Assurance com- of our Board, we shall nurture and pany always strives to maintain global continue our drive towards business Doha Bank Assurance Company, Doha bank’s insurance arm, has been “successfully recertified” with ISO 9001:2015, a “global symbol for compliance with the standards and has been already certi- excellence”. established standards for business excellence”.