TRADE WAR | Page 2 China plans to suspend extra tariff s on US cars

Saturday, December 15, 2018 Rabia II 8, 1440 AH FRESH CHALLENGE : Page 4 New problems for GULF TIMES embattled BUSINESS Huawei in France

Ministry of Commerce and Industry wraps up workshop on trade negotiations skills

The Ministry of Commerce and Industry on the objectives of Qatar National Vision 2030 and Thursday wrapped up an advanced workshop on is considered as one of the leading negotiation trade negotiations skills, with the participation training courses off ered by the WTO to member of the Ministry of Foreign Aff airs, the Ministry of states. Municipality and Environment, the Qatar Central The workshop was attended by Dickson Yeboah, Bank and Qatar Development Bank. WTO’s Head of Intensive Trade Negotiations Skills The workshop was organised within the framework Unit, and Simon Hess, a negotiating expert at the of the ministry’s eff orts to build and develop the WTO. negotiations skills of trade negotiators and experts The speakers discussed trade negotiations across Qatar by stimulating bilateral, regional and strategies and approaches, and shed light on the multilateral trade negotiations. development stages of the trading system (from The workshop aims to prepare negotiators and GATT to today). Both speakers also provided an experts to engage in free trade negotiations with overview of the trade in services negotiations trade partners and other countries on the bilateral in addition to the support provided for the or regional level, and in multilateral negotiations at development of fisheries. the World Trade Organisation (WTO) level. They discussed ways to improve the participants’ It came as part of the training and development understanding of trade negotiations, covering plan within the framework of WTO-related all stages of the negotiations process, from agreements and is off ered in collaboration with the consultation stage to actual negotiations. the Geneva-based WTO. The workshop off ers Discussions also touched on technical concepts Participants at the Ministry of Commerce and Industry’s advanced workshop on trade negotiation skills. high quality training for employees in line with and special safeguard mechanism in agriculture.

Eurozone growth shudders on global trade worries, anti-govt protests in France

EU leaders agree on and sentiment show demand AFP Paris growth is stalling, he added. The flash reading of Germany’s composite PMI dipped by a Global trade war fears and tenth of a percentage point to disruptions caused by anti- 52.2. government protests in France Michael Hewson, chief market pushed business growth in the analyst at CMC Markets UK, specifi c budget for eurozone to a four-year low in said the survey results showed December, an influential survey the risks of a recession in the showed yesterday, raising eurozone have risen, and “have concerns the region’s economy put into sharp contrast the might stall. ECB’s decision to stop its asset The slide in IHS Markit’s purchase program at the end of composite eurozone PMI, to this month”. 51.3 points from 52.7 points The ECB announced Thursday single currency bloc in November, came just a day it would halt its purchases after the European Central of eurozone bonds later this AFP months of stop-start negotiations. weakened by anti-government protests economic situation, mentioning that Bank pulled its extraordinary month, as expected. Brussels “This comprehensive package paves back home, has hailed the plans as a there was “continuing confi dence with support that has stoked growth The scheme – also known as the way for a signifi cant strengthen- symbolic breakthrough towards a more increasing caution”. Growth was lower in the single currency area for “quantitative easing” (QE) – has ing of the European Monetary Union,” a closely-knit European Union. than before, the ECB revised down the the past three years. seen the ECB buy €2.6tn ($3tn) U leaders yesterday agreed on a statement from the leaders said. The new budget scheme has no hard growth outlook three times this year, While the reading above 50 of government and corporate series of reforms to the eurozone The proposals are meant to strength- fi gure attached and will be linked to the he said, adding wages were growing in points indicates business is debt since 2015 to ward off the Ethat includes plans for a specifi c en the fi nancial plumbing of the Euro- seven-year overall EU budget that will many countries. still expanding, IHS Markit said threat of catastrophic deflation budget for the single currency bloc, pean economy, but ignore far grander be negotiated by the 27 member states Draghi welcomed work done on deep- new business inflows almost – a crippling downward spiral of German Chancellor Angela Merkel said. visions such as designating a eurozone over the next year. er eurozone integration by eurozone stalled, job creation slipped to prices and activity. After a “controversial discussion” at fi nance minister or setting up a Euro- “The features of the budgetary in- fi nance ministers and said that a new a two-year low and business “If ECB President Mario Draghi an EU summit, leaders agreed on reform pean version of the International Mon- strument will be agreed in June 2019,” budgetary instrument, which the lead- optimism deteriorated. is correct as he said yesterday, measures that “includes a budget for the etary Fund. the statement said. ers said be to boost competitiveness and “An undercurrent of slowing that QE has been the only eurozone,” Merkel said after 27 EU lead- France considers the eurozone budget The President of the european Central convergence, was a step forward. economic growth was driver of recovery in certain ers, not including Britain, discussed the the centrepiece of the proposals, but in bank Mario Draghi told European Union But he noted that it was important exacerbated by protests in parts of the euro area, surely measure in Brussels. the fi nal decision, it is referred to as as leaders yesterday that growth was slow- that governments played by EU budget France and on-going weak you have to question the The EU heads of state and govern- a budgetary “instrument” in order to er than previously forecast and urged rules, which limit the size of budget def- demand for autos,” said the wisdom behind the decision to ment, minus Britain, were working from soothe the anxieties of fi scal hardliners them to move ahead with reforms of the icits and public debt and urged progress financial data firm. not only reduce but to end it,” proposals thrashed out by ministers dur- the Netherlands. euro zone, one offi cial said. on completing the banking union that The survey for France showed added Hewson. ing marathon talks last week, capping 18 French President Emmanuel Macron, Draghi briefed the leaders about the misses an EU deposit guarantee scheme. business there had flipped into On Thursday, the ECB trimmed reverse, as the index plunged its forecasts for eurozone to 49.3 in December from 54.2 growth, but the central bank in November. The country has still sees a modest expansion been swept by opposition to of 1.7% in each of the coming fuel taxes that have snowballed two years. into broad protests against Eurozone growth withered President Emmanuel Macron’s to 0.2% in the third quarter, pro-business agenda and his but analysts had expected it style of governing. to rebound, as the slowdown “While some of the slowdown was due in part to exceptional reflected disruptions to factors such as a drop in auto business and travel arising sales and manufacturing due from the ‘yellow vest’ protests to the introduction of new in France, the weaker picture pollution tests. also reflects growing evidence “Even though the PMI is still that the underlying rate of signalling output growth, the economic growth has slowed question is whether growth across the euro area as a has even picked up at all whole,” said IHS Markit’s Chief despite one-off s aff ecting the Business Economist Chris third-quarter reading,” said Williamson. Bert Colijn, senior eurozone “Companies are worried about economist at ING Bank. the global economic and “While the ECB was relatively political climate, with trade optimistic about the growth wars and Brexit adding to outlook yesterday, today’s PMI increased political tensions adds to the worries” about the within the euro area,” he added. eurozone economy, he added. The data point to a weak The main eurozone stock economic expansion of 0.3% in markets, which opened lower the final quarter of the year for on disappointing Chinese the eurozone, he said. economic data, shed more But December’s data alone than one percentage point in show GDP growth is slowing to morning trading. a 0.1% rate, and forward-looking Meanwhile the euro slid to German Chancellor Angela Merkel takes part in a European Union leaders summit in Brussels. EU leaders yesterday agreed on a series of reforms to the eurozone that includes information such as orders under $1.13. plans for a specific budget for the single currency bloc, Merkel said. Gulf Times 2 Saturday, December 15, 2018 BUSINESS

Asian LNG prices snap China to suspend extra three-week losing streak as winter tariff s on US cars, parts kicks in AFP Reuters Beijing Singapore

hina pressed on with its trade Asian spot prices for liquefied war truce with the United States natural gas (LNG) snapped a Cyesterday, announcing it will three-week losing streak to suspend extra tariff s added to US-made end higher this week, with the cars and auto parts for three months onset of winter expected to from January 1. boost demand for natural gas The move is another sign that the for heating. ceasefi re has not been derailed by the But gains were limited amid recent arrest in Canada of a top Chinese forecasts of warmer-than-usual telecom executive at the behest of the temperatures for most of next United States. week in Tokyo, Beijing and Beijing raised tariff s on American- Seoul, the top demand centres made cars and auto parts this summer for natural gas in Asia, and as by 25% in retaliation for US tariff s on more spot supply entered the $50bn of Chinese goods. market from the United States Halting the punitive duties brings the and Russia. tariff s back down from 40% to the 15% Spot prices for January deliv- imposed on all foreign vehicles. ery edged up about 10 cents to “Suspension of the tariff s is a con- around $8.90 per million British crete measure to implement the con- thermal units (mmBtu), with sensus reached by the two heads of cargoes trading from as low state,” said the announcement by the as $8.50 per mmBtu to as high State Council’s Tariff Commission Of- as $9.10 per mmBtu, several fi ce, noting it applied to 211 product industry sources said. codes. Prices for February delivery US President Donald Trump and also inched higher and were Chinese leader Xi Jinping agreed on the estimated at around $9.10 to sidelines of the G20 summit in Buenos $9.30 per mmBtu, keeping the Aires on December 1 to a 90-day truce price curve in contango. while they tried to fi nd a solution to the “The (spot) market has prob- escalating trade dispute. ably bottomed out with (prices) Confusion and unease over what being pretty flat and I am agreement the two sides reached in Ar- hearing of more people looking gentina has roiled stock markets. for cargoes,” said a Singapore- But top trade negotiators talked on based LNG trader. the phone this week to discuss a time- China, the world’s No 2 LNG table for the trade talks and yesterday’s importer, has ramped up both announcement confi rms a Trump tweet Imported Mercedes-Benz cars are seen next to containers at Tianjin Port, in northern China. Beijing pressed on with its trade war truce with the US yesterday, announcing it domestic gas production and from December 2 that China would act will suspend extra tariff s added to US-made cars and auto parts for three months from January 1. imports to meet rising demand on the auto tariff s. as the government switches “We hope that both sides will, in ac- work together to advance balanced and nancial offi cer, Meng Wanzhou, in Van- parts, as announced by Trump on Twit- showed Chinese consumer spending more households to gas heating cordance with the consensus reached by fair trade. We look forward to learning couver on December 1 has also angered ter shortly after the meeting, is a sign grew at its slowest pace in 15 years and this winter. the two heads of state, on the premise of more,” a spokesman for Ford said after China, raising concerns that her case that trade negotiations remain on track. factories eased up in November, rais- China’s November natural mutual respect, mutual equality, faith- Trump announced China would cut car could aff ect the trade negotiations. China on Thursday said that it would ing the prospect that Beijing could turn gas output climbed 10% to a fulness, words and actions, and intensi- tariff s earlier this month. Meng, who faces US fraud charges welcome US negotiators to visit the to fresh stimulus measures to help the record-high of 14.3bn cubic me- fy consultations in the direction of can- International automakers Daim- related to Iran sanctions violations, was country for talks as both sides focus on sputtering economy. tres (bcm), off icial data showed celling all of the extra tariff increases,” ler, maker of the Mercedez-Benz, and released Tuesday on Can$10mn (US$ a solution to thorny trade issues. China’s top offi cials on the Politburo yesterday. the State Council’s statement said. BMW have also exported American- 7.5mn) bail. Maintaining and resolving the trade said in a statement Thursday that major It has switched another The tariff suspension will benefi t US made SUVs to China. Two Canadians were detained in truce could help stabilise sentiment in economic indicators will be kept within 3.29mn households to gas carmarkers like Tesla and Ford which US exports to China fell 25% on-year China on Monday in what many experts China, where confi dence in the econo- a reasonable range next year. heating this winter, Reuters have seen their China sales tumble amid in November as the higher tariff s on say was retaliation for Canada’s arrest my has been hurt by the trade frictions “The meeting also signalled further calculations show, more than it the trade tensions. hundreds of American goods hurt de- of Meng. But the tangible move by Chi- with key trade partner the US. market opening,” economists at Trivi- added last year. “It is essential that governments mand. The arrest of Huawei’s chief fi - na to suspend tariff s on cars and auto Earlier yesterday economic data um Research wrote in a newsletter. But analysts said the increase would not necessarily boost overall consumption in the country. “Till now, China’s demand is increasing, but it has not aff ected the inventory too China consumers, factories take a beating much,” a trader familiar with the Chinese market said. With forecasts of a warmer- Reuters weigh on consumer sentiment, tapping mestic factory activity as profi t margins monthly orders to China falling, some urgency for Beijing to resolve the tariff than-usual week next week, Beijing the brakes on retail sales. narrow. With economic growth at its by double-digits. dispute with the United States. LNG buyers in China are taking Big-ticket items have been the fi rst weakest since the global fi nancial cri- Asian shares tumbled yesterday after “So, the worst is yet to come and pol- a wait-and-see approach before to be hit, with auto sales declining since sis, Chinese policymakers are ramping the weak Chinese data, fanning fresh icymakers will be very worried, partic- deciding to ramp up imports of hina’s November retail sales May. up spending, pushing banks to increase worries of a sharp slowdown in Asia’s ularly with consumption growth falling the super-chilled fuel, he said. grew at their weakest pace since Retail sales rose 8.1% in November lending and cutting taxes to shore up largest economy. off a cliff ,” said Sue Trinh, head of Asia Taiwan’s CPC Corp entered C2003 and industrial output from a year earlier, data from the Na- businesses and ward off a more damag- Chinese equities also slipped, while FX Strategy at RBC Capital Markets. the spot market to seek a cargo rose the least in nearly three years as tional Bureau of Statistics showed yes- ing slump. the yuan currency softened slightly. Indeed, even in the unlikely event for delivery in January, while the economy lost further momentum, terday, below expectations for an 8.8% The weaker November industrial A temporary 90-day trade war truce the world’s top two economies reach South Korea’s state-run Korea heaping pressure on Beijing to defuse its rise and the slowest since May 2003. output and retail sales growth num- agreed by the United States and China a durable resolution in their dispute, Gas Corp (KOGAS) is looking trade dispute with the United States. In October, sales increased 8.6%. bers showed that downward pressure early this month may have removed ebbing domestic demand, mounting for long-term supply starting The world’s second-largest economy Auto sales fell a sharp 10% from a on the economy is increasing, said Mao some of the immediate pressure on the household debt and a cooling real es- from 2025, traders said. has been losing momentum in recent year earlier, in line with industry data Shengyong, spokesman at the statistics economy. tate sector point to a further slowdown On the supply side, Cheniere quarters as a multi-year government showing sales dived 14% in November – bureau. But China is on track to hit its Both countries have heaped tariff s on in growth next year. China’s fi xed-asset Energy loaded the commis- campaign to curb shadow lending put the steepest drop in nearly seven years. 2018 economic growth target of around billions of dollars of each other’s goods investment growth quickened to 5.9% sioning cargo of LNG from its increasing fi nancial strains on compa- Industrial output rose 5.4% year-on- 6.5%, Mao told reporters. “The need for since early summer. in the January-November period, com- Corpus Christi liquefaction nies in a blow to production and invest- year in November, missing analysts’ es- cutting taxes, fees and interest rates has “China’s economy, if it’s in trouble, pared to an expected 5.8% gain and the facility in Texas, the third big ment. The stresses on broad activity timates and matching the pace seen in further increased,” said Wang Jun, chief it’s only in trouble because of me,” US 5.7% growth in January-October. LNG export terminal to enter have been compounded by a sharp es- January-February 2016. economist at Zhongyuan Bank in Bei- President Donald Trump told Fox News The year-to-date acceleration was service in the lower 48 US calation in China’s trade row with the Factory output had been expected jing. “Insuffi cient demand has become in an interview on Thursday. due to weaker expansion earlier this states. Greece this week said United States, which has threatened to to grow 5.9%, unchanged from Octo- the main problem.” The impact on China’s economy from year, according to Goldman Sachs. it would import its first US fracture global supply chains, chill in- ber’s pace. Over the weekend, China The slackening demand in China is the Sino-US trade frictions are not ap- Infrastructure investment, a major LNG carg of 150,000 cubic vestment, exports and growth. reported far softer than expected No- starting to worry its trading partners parent yet, Mao cautioned, adding that growth lever that Chinese policymak- metres on December 29 from The slowdown in Chinese industries vember exports and imports, refl ecting too. In Japan, machinery makers and the nation will face more “external” ers have pulled in past slowdowns, rose Cheniere. and the trade tensions have started to slower global demand and waning do- auto manufacturers have seen their uncertainties in 2019 – increasing the 3.7% in the fi rst 11 months.

Ex-Nissan chief Ghosn affair raises issues beyond one man, one company

Reuters frowned upon and wealth gaps are conten- At Nissan, the Ghosn aff air has exposed Smith said. Abe is keen to keep the Ghosn Tokyo tious. Ghosn’s undisclosed compensation big gaps in governance, experts agreed. “It’s aff air from giving his governance reforms a charge is also politically sensitive in France, a textbook case of poor governance,” said black eye. “As economic globalisation makes where President Emmanuel Macron has been Nicholas Benes, director of the Board Direc- rapid progress, Japan will continue to step up How big should executive pay packets be? battling anti-government protests. tor Training Institute of Japan. eff orts to make corporate governance eff ec- How widespread is lax corporate governance Japanese CEOs on average are paid just Nissan’s board has created a special com- tive,” he told reporters his week. in Japan? And what’s the future of the alliance 11% of their US counterparts, showed a report mittee to improve governance, which will Alliance woes between Nissan and France’s Renault? by Nicholas Smith, Japan strategist at CLSA. likely recommend an increase in external These are the broader issues brought into “In many cases, investors probably ought to board members and creation of a committee The crisis also reflects underlying strains focus by the indictment of ousted Nissan Mo- worry more that executives are being paid to oversee compensation. in the two-decades-old partnership between tor Co Ltd chairman Carlos Ghosn. too little and so are being underincentivised.” The lack of such a committee gave Ghosn Renault and Nissan and threatens to shake Ghosn was arrested on November 19 Ghosn’s reported pay in the latest financial huge scope to decide his own remuneration. the alliance further. charged with understating his compensation year of $16.9mn from Nissan, Renault SA and The role of outside directors has also come Some media and analysts have pos- by about half of the ¥10bn ($88mn) he was alliance member Mitsubishi Motors Corp into focus since they are supposed to provide ited that other senior Nissan figures used awarded over five years from 2010. made him among the most well-paid execu- oversight. investigations into Ghosn’s alleged financial He was re-arrested on December 10 on tives at global auto companies. More Japanese firms now have more ex- misdeeds to oust the automaker’s one-time similar suspicions for another three years. Since 2010, Japanese firms have been ternal directors than in the past, but experts saviour as a way to prevent any attempt by Nissan was indicted for filing false financial required to disclose details of executive question how much clout they have. Renault to strengthen control of the more statements. remuneration including stock options and Nissan has three – a female race car driver, profitable Nissan. Ghosn, who has been detained since his bonuses when the total exceeds ¥100mn. a former trade and industry bureaucrat and Ghosn remains chairman and CEO of arrest, has denied the allegations, public Governance lessons a retired Renault executive – but is likely to Renault but the French government is seek- broadcaster NHK has reported. increase that number. ing candidates to replace him. Nissan CEO Nissan said it will correct past financial Three years ago, Prime Minister Shinzo The governance problem is probably not Hiroto Saikawa has denied the “coup d’etat” reports. Abe introduced a corporate governance code limited to Nissan. theory but Nissan has clearly been dissatis- Nissan Motor chairman Carlos Ghosn at a press conference in Too much, not enough? setting rules on disclosure, shareholders’ Japanese firms are not required to have a fied with the unequal alliance. Renault owns Tokyo (file). Ghosn was arrested on November 19 charged with rights and independent directors as part of compensation committee and only 26% of 43.4% of Nissan, which in turn holds a 15% understating his compensation by about half of the ¥10bn Sky-high executive pay is a touchy topic his “Abenomics” economic policies. listed firms do, although the practice is more stake in its parent company but without ($88mn) he was awarded over five years from 2010. in Japan, where conspicuous consumption is But the code is not legally binding. common among bigger companies, CLSA’s voting rights. Gulf Times Saturday, December 15, 2018 3 BUSINESS

Japan Made-in-Vietnam: Vingroup exports growth to slow in unveils its fi rst smartphones Nov: Poll AFP Hanoi Reuters Tokyo ietnam’s largest private con- glomerate Vingroup unveiled its Vfi rst made-in-Vietnam mobile apan’s exports growth is ex- phones yesterday in the fast-growing pected to have cooled in No- country where it will face tough com- Jvember, a Reuters poll showed petition from tech giants like Samsung, yesterday, suggesting a dimming Oppo and Apple. economic outlook amid easing The company, run by Vietnam’s rich- global demand and a US-China est man, has built its core business in trade dispute. the real estate and retail sectors but has Exports were seen rising 1.8% branched out to include car manufac- in November from a year earlier, turing, gene decoding and now mobile slowing from a 8.2% increase in phones. October, the poll of 15 economists The company’s mobile phone sub- found. sidiary, Vinsmart, launched four phone Imports likely grew 11.5% last models yesterday, priced between $120 month from a year earlier, result- and $280. ing in a trade defi cit of ¥600.3bn “(We are) aiming to bring to our ($5.29bn). clients the opportunity to experi- “Exports lack momentum, ence high-quality, made-in-Vietnam which is likely to continue due to products,” Nguyen Viet Quang, dep- factors such as a slowdown in glo- uty chairman of Vingroup, said at the bal demand for IT-related prod- launch event in Ho Chi Minh City. ucts,” said Takumi Tsunoda, sen- The company said its factory in the ior economist at Shinkin Central port city of Hai Phong has the capac- Bank Research Institute. ity to produce 5mn phones per year and Export-led Japan, and many could expand to smart TVs and smart other economies, have come un- homes. der a cloud in the face of a bitter Vingroup acquired a 51% stake in Sino-US trade war as policy mak- Spanish consumer electronics maker ers worry about a wider impact BQ earlier this year, which will help with on global growth, investment and product development. corporate earnings. Yesterday Vinsmart announced a Koya Miyamae, senior econo- patent licensing agreement with US mist at SMBC Nikko Securities, chipmaker Qualcomm for mobile phone said given the natural disasters it’s terminals. hard to gauge any potential eff ects Vinsmart will face tough competition of the Sino-US trade friction on in fast-growing Vietnam where mid- Japan’s exports. dle-class consumers with burgeoning “It is true the pace of growth in budgets are buying Samsung and Apple Japan’s exports this year is slug- phones. Vingroup’s mobile phone subsidiary VinSmart’s chief executive off icer Tran Minh Trung presents the “Active 1+” smartphone during a launch in Ho Chi Minh city yesterday. gish compared with last year part- Several smaller Vietnamese fi rms al- Vietnam’s largest private conglomerate unveiled its first made-in-Vietnam mobile phones in the fast-growing country where it will face tough competition from tech giants ly due to China’s slowdown. ready make their own mobile phones, like Samsung, Oppo and Apple. It needs a close watch to assess but none have taken off in the country how global trade friction will af- where about a third of the country’s Apple models, and the company will One major leg up for Vinsmart will He is worth an estimated $6.7bn, ac- by exporting cheaply manufactured fect the nation’s shipments.” 93mn people are smartphone users. struggle to unseat Samsung right away, be easy access to retail space: the com- cording to Forbes. His Vingroup cradle- goods, from Nike shoes and H&M T- The fi nance ministry will an- Samsung held 37% of the market in said Kenny Liew, a telecommunications pany already has over 1,200 supermar- to-the-grave empire includes housing, shirts and, increasingly, tech products nounced the trade data at 8:50am the second quarter of this year, while analyst at Fitch Solutions. kets and convenience stores all over the resorts, farms, schools, hospitals, shop- like Samsung phones and Intel proces- on December 19. Oppo had 22% and Apple had about “We don’t think it will carve out a country. ping malls and cars. sors as it moves up the value chain. The poll also found the nation- 5%, according to Counterpoint analysis very signifi cant market share, but will Vingroup is owned by Pham Nhat Vietnam is one of Asia’s fastest grow- Around 60% of Samsung’s phones wide core consumer price index fi rm. likely be able to produce enough scale Vuong, a press-shy billionaire who ing economies, with GDP growth hit- are made in Vietnam, and last year (CPI), which includes oil products Vinsmart’s phones are unlikely to to generate a profi t on its investment,” started his career selling dried noodles ting above 5% for the past fi ve years. Samsung products accounted for about but excludes volatile fresh food be directly competing with expensive he said. in Ukraine. That growth has largely been driven 20% of Vietnam’s exports. prices, rose 1% in November from a year earlier, the same rate as Oc- tober and September. “Wages are recovering mod- estly and consumer sentiment is not necessarily worsening,” said Takeshi Minami, chief economist India’s Sumi in early-stage merger talks with Leoni at Norinchukin Research Insti- tute. “Consumer spending is seen picking up but it is not strong Reuters number of companies in recent years, succeed, the sources added. An ac- The stock has slumped more than Motherson is one of the world’s fast- enough to boost prices, while the Frankfurt/Hong Kong adding to its range of automotive inte- quisition of Leoni would add to Moth- 50% this year as demand stagnated, est growing specialised automotive upward eff ects on them from en- rior products including rearview mir- erson Sumi’s 180 facilities across 37 with Leoni citing rising global trade component manufacturers, recording ergy costs will be waning.” rors, wiring harnesses and rubber and countries and bolster overseas sales. tensions and stricter emissions rules a turnover of $10.5bn in fi scal 2017/18, With consumer infl ation re- ndian car wiring maker Motherson plastic components. Motherson Sumi, which counts for slowing business. according to Motherson Sumi’s latest maining tame, the Bank of Japan is Sumi Systems Ltd is in early talks The company, a joint venture be- several global automakers includ- Shares in Motherson Sumi rose as annual report. likely to maintain its current ultra- Iwith German peer Leoni AG over a tween India’s Samvardhana Moth- ing Daimler AG and Volkswagen AG, much as 10.8% yesterday, and was Cable and wiring system specialist easy policy. The BoJ is set to keep possible merger of the pair, two people erson Group and Japan’s Sumitomo as clients, informed the Indian stock trading up 2.3% by 0844 GMT. Leoni brought in Aldo Kamper as its its short-term interest rate at mi- close to the matter said. Wiring Systems, has been scouting for exchange yesterday that it keeps “ex- Motherson Sumi most recently ac- chief executive in September. nus 0.1% and the 10-year govern- The car industry and its suppliers, a sizeable acquisition target in Europe amining and evaluating” business op- quired Reydel Automotive, which After cutting its 2018 targets, the ment bond yield target at around facing a regulatory crackdown on die- with the help of an investment bank. portunities globally and it would make manufactures door panels and cockpit company is undertaking a comprehen- 0% at its policy meeting on De- sel emissions and a slump in China, Any deal with Leoni could be worth necessary disclosures when needed. modules, for about $200mn to help sive restructuring programme. cember 19-20, the poll showed. have issued a slew of profi t warnings more than €1bn ($1.1bn) but fi nancing Leoni declined to comment. meet its target of not having any com- Analysts at Berenberg said in August The economy shrank the most in recent months and companies are still needs to be worked out, one of the Shares in Leoni, which has a market ponent, customer or country contrib- that although Leoni had a large order in over four years in the third shaking up their businesses in order to people said. cap of $7.1bn, ended up 18% on Thurs- ute more than 15% to its business by backlog, it needed to improve its cost quarter, as a series of natural dis- adapt. The exact deal structure was still day in their biggest one-day gain in 2020. structure, with additional expenses asters disrupted factory output Motherson Sumi has snapped up a unclear, and deliberations may not nearly a decade. Parent company Samvardhana likely to hurt 2019 earnings. and distribution network. Jet Airways’ survival may rest on founder Goyal leaving the cockpit

Reuters woman said the “conjectures being implied in 10 years with its current chief Vinay Dube that of the government. Jet and Etihad ex- New Delhi with regards to the organisation’s ways of taking over in August 2017. “The airline is his ecutives also met lenders in India to discuss working” were misleading. life and he built it from nothing, you have to a rescue deal. “The airline management is a fully give him respect for that,” said one of the Senior Etihad adviser and former Jet CEO Jet Airways Ltd’s 69-year-old founder empowered team... all strategic, operational former employees. “But... the airline busi- Cramer Ball was in Mumbai last week, just Naresh Goyal, who started out as an assist- and tactical decisions are taken by the man- ness can be unforgiving.” days ahead of a meeting of the Abu Dhabi ant in a travel agency, wove together charm, agement under the advice of the company’s In 2012, Kingfisher Airlines, founded by carrier’s board on December 7 where it was persistence and consummate dealmaking board of directors,” she said. Indian businessman Vijay Mallya, went bust expected to discuss its investment in the to build India’s biggest full-service carrier. Unforgiving business for want of cash, leaving its lessors and Indian airline, two sources said. Now, his penchant for control has creditors with pending dues. The outcome of the closed-door meeting emerged as a major obstacle as the indebt- Will Horton, an independent aviation ana- After Kingfisher went down, India ratified remains unknown. ed airline tries to negotiate a rescue deal, lyst based in Hong Kong, said it was time for the Cape Town convention, an international Etihad, in an e-mail to Reuters, said it several people who have worked closely Jet to evolve beyond “one leader or family”. treaty making it easier for foreign owners to would not comment on speculation. with him or known him over the years told “A change at the top runs its course repossess aircraft when airlines default on However, the Abu Dhabi carrier, which Reuters on condition of anonymity. down. Freedom to implement a new man- payments. owns 24% of Jet, is ready to put in more “He was a visionary in his day but those agement plan is critical for strategic and That means Jet’s lessors could choose to money only if Goyal dilutes his stake, a days are behind us,” said a senior aircraft fin- financial partners, existing and potentially reclaim planes in case of a default. source aware of the matter told Reuters. ancier who has done deals with Goyal. “This new,” he said. The airline could also be dragged to Even so, Etihad’s stake will be capped is the moment of truth for Naresh Goyal.” When Goyal launched Jet Airways in court by its creditors under India’s new at 49% due to foreign ownership rules in The rising dominance of low-cost carrier Goyal: Always involved in key decisions and the airline’s CEOs often have little 1993, air travel in India was at a nascent insolvency laws. Indian airlines and if it goes past the 25% IndiGo in a price sensitive market as well as executive power and do not survive for long. stage. He kickstarted the sector’s growth Limited options ownership threshold, it would need to high oil prices, hefty fuel taxes and a weak and put the country on the map. adhere to capital markets regulations and rupee have left Jet strapped for cash and cut-throat competition and chronically low slots and a majority share in Jet’s frequent With 124 planes, Jet now flies to places Jet is committed to turning around its make an open off er to shareholders to buy a unable to pay employees and lessors on fares. flyer programme. like Hong Kong, Dubai, Paris and London, business and creating “a competitive cost further 26% stake. time. To stay afloat, Jet is cutting flights on The infusion helped Jet pare down debt besides over 45 destinations in India. structure that ensures a sustainable future If forced to do this, Etihad would risk The 25-year-old airline, which Goyal set some non-profitable routes and trying to and fight growing domestic competition. Ceding control may not be easy for for the airline and its stakeholders”, the breaching the foreign ownership restric- up with his wife at a time when state-run raise cash by monetising assets. The airline is in talks with Etihad a second Goyal. He is Jet’s chairman and holds a 51% spokeswoman said. tions and so it may have to seek a rare Air India was the only real formidable It still retains a valuable strategic position time and with Indian conglomerate Tata stake in the airline with his wife Anita still on She did not comment on any specific exemption from the markets regulator from opponent, has outstanding dues of about as the biggest operator at Mumbai airport, Sons for fresh funds or a stake sale, but the board. deals but said the airline continues to be in making an open off er. Talks with Tata are on $400mn. where all of the good slots have been taken sources have told Reuters that any rescue “It is a very mom-and-pop kind of opera- active discussions with various investors to the backburner for now but three people Jet, which has a mainly Boeing Co fleet, and a second airport is years away. would require Goyal to step down, or take a tion where nothing happens without the secure “sustainable financing”. familiar with the conglomerate’s thinking has delayed pre-delivery payments to the It also has lucrative slots at major interna- less prominent role. two of them,” said a former Jet employee, But Jet’s rescue options appear some- said they may be found waiting in the wings Seattle-based aircraft maker as well as to tional airports and code share agreements Goyal has rejected seeking funds from who describes the founder as a workaholic. what limited given its poor financial position if the Etihad deal falls through. “There is an Airbus SE, and is overdue on its repair and with more than 20 airlines. Tata if it meant him having to give up his po- Goyal is always involved in key decisions – it posted losses in the last three quarters expectation that there will be a rescue and maintenance contracts, two sources aware Jet has survived a near-death experience sition, two sources aware of the discussions and the airline’s CEOs often have little and its shares have fallen about 70% so far Goyal will find a way – he always does – but of the matter said. Although the Indian air once before; in 2013, Abu Dhabi’s Etihad Air- said. Talks with Etihad are continuing. executive power and do not survive for this year, erasing more than $900mn in there is no clarity on how much control he travel market is the world’s fastest growing, ways injected $600mn of capital for a 24% Goyal did not directly respond to long, according to two other current and market value. will have after a deal is done,” said one of at about 20% a year, it is also hobbled by stake in the airline, three London Heathrow requests for comment but a Jet spokes- former employees. Jet has had seven CEOs Goyal, is knocking on all doors, including the people who works with him. Gulf Times 4 Saturday, December 15, 2018 BUSINESS

Imran chairs meeting New problems for embattled for ease of doing business

Huawei in France, Germany Internews Islamabad Reuters Frankfurt/Paris Pakistan Prime Minister Imran Khan yesterday chaired a uawei faces fresh challenges in high-level meeting to review Europe after France’s Orange progress on improving ease of Hsaid it would not hire the Chi- doing business and creating nese firm to build its next-generation an enabling environment to network and Germany’s Deutsche facilitate conversion of interest Telekom announced it would review of the local as well foreign in- its vendor strategy. vestors into actual investments The shift by the national market in the country. leaders, both partly state owned, fol- The meeting was attended lows Huawei’s exclusion on national by Finance Minister Asad Umar, security grounds by some US allies, Law Minister Dr Farogh Na- led by Australia, from building their seem, Commerce Adviser Abdul fifth-generation (5G) mobile net- Razak Dawood, chairman BOI works. Haroon Sharif, Federal Secretar- US officials have briefed allies that ies and senior off icials. Huawei is ultimately at the beck and Chairman BOI Haroon call of the Chinese state, while warn- Sharif while briefing the Prime ing that its network equipment may Minister about the steps taken contain “back doors” that could open so far said that the Board of them up to cyber espionage. Investment would be serving as Huawei says those concerns are un- agent of change for facilitat- founded. ing business transactions, Tensions have been heightened by removing impediments in way the arrest of Huawei’s chief financial to materialisation of investors’ officer in Canada for possible extradi- interest into actual investments tion to the United States. and smooth functioning of the “We don’t foresee calling on Hua- businesses in the country. wei for 5G,” Orange CEO Stephane Ri- He also briefed the Prime chard told reporters in Paris. “We are Minister about various issues working with our traditional partners being faced by the business – they are Ericsson and Nokia.” community including taxation, Richard said he considered the se- access to finance, regulation curity concerns to be legitimate: “I and policy issues and red- absolutely understand that all of our tapism. countries, and the French authorities, Chairman said that BOI was are preoccupied. also actively working with the We are too.” provinces and relevant minis- Responding, Huawei said it was not tries for removing barriers in a supplier to Orange’s existing 4G net- the way of establishing Special work in France and would not feature Economic Zones. in the company’s 5G plans in France. A saleswoman serves customers at a Huawei shop in Beijing. The Chinese firm faces fresh challenges in Europe after France’s Orange said it would not hire the company He said that special eff orts Huawei does supply Orange’s net- to build its next-generation network and Germany’s Deutsche Telekom announced it would review its vendor strategy. were being made to bridge works outside France and expects to the gap between private and be involved in 5G there, it said. equipment from Ericsson, Nokia, Cis- latory scrutiny of its $26bn bid to take pate in the current speculation,” said wei, meaning it will be hard to rip public sector and to reach out Deutsche Telekom, Europe’s largest co and Huawei. “Nevertheless we are over Sprint Corp. Telefonica Deutschland, Germany’s out and replace its existing gear or to to the private sector to revive telecoms company, said it was review- reassessing our procurement strat- A source at one competitor said: No 3 operator that has existing rela- cope without the Chinese company, their confidence in govern- ing its vendor plans given the debate egy,” it said. “This looks like an appeasement tionships with Huawei and ZTE, an- the world’s top network supplier, in ment policies and put in place a on the security of Chinese network The shift is significant because, so strategy towards the US government other Chinese vendor. building their 5G networks. framework that facilitates busi- gear in Germany and the other Euro- far, German officials have said they over the Sprint deal.” United Internet, a potential new en- “If the Chinese companies are ex- ness community in its business pean markets where it operates. see no legal basis to exclude any ven- Other German telecoms players say, trant that is weighing bidding for a 5G cluded, this would reduce the number pursuits. “Deutsche Telekom takes the global dors from the buildout of fifth-gen- meanwhile, that they are continuing licence, said it was in talks with two of vendors – and that could drive Chairman BOI also briefed discussion about the security of net- eration networks in response to the talks with Chinese vendors as they vendors on its strategy – one of which costs higher,” said Hans Schotten of the Prime Minister about Naya work equipment from Chinese ven- warnings from Washington. draw up proposals to take part in Ger- is Chinese. A spokesman declined to the Technical University in Kaisers- Pakistan Diaspora Fund which is dors very seriously,” the company said Nearly half of the German compa- many’s auction of 5G licences in early identify the vendor but according to lautern. being set-up to promote SMEs in response to a Reuters query. ny’s revenues come, however, from its 2019. media reports it is ZTE. “For that reason, many vendors and rural development in key Telekom already pursues a multi- profitable and fast-growing US unit “We are watching the discussion Analysts say German telecoms would be reluctant to do without areas of education, health and vendor strategy, relying above all on T-Mobile, which is undergoing regu- very closely, but we will not partici- operators depend heavily on Hua- Huawei.” infrastructure development. He also apprised the Prime Minister of the Investment Framework which has been structured for attracting and materialising investment from Japan business mood steady but outlook sours: BoJ tankan UAE, KSA, China, Japan and Malaysia. It was decided during the Reuters business outlook three months ahead, a meeting that Prime Minister Tokyo sign they are only just starting to feel the would chair a review meeting pinch from global trade tensions. every month on Ease of Doing Big firms plan to raise capital spending Business in the country. onfidence among Japan’s big firms by 14.3% in the business year to March The Prime Minister directed remained unchanged from three 2019, up from 13.4% in the previous sur- chairman BOI to present a com- Cmonths ago, a closely-watched vey. That compared with analysts’ median prehensive plan, listing all the central bank survey showed, but senti- estimate of a 12.7% increase. issues in various sectors and ment on the outlook soured for the first International trade frictions, slowing their sub-sectors and how the time in three quarters as trade frictions business spending and corporate profit processes could be streamlined and global growth concerns hurt the busi- growth have raised risks to Japan’s ex- to simplify procedures related ness mood. port-led economy. to government approvals, ad- Big companies maintained their upbeat The survey will be among factors the dressing taxation issues, dis- capital expenditure plans for the current BoJ will scrutinise at its two-day rate re- pute resolution and facilitating fiscal year, the Bank of Japan’s “tankan” view next week, when it is widely expect- investors/businesses. survey for the three months to December ed to keep monetary policy steady. showed, an indication robust domestic Japan’s economy shrank an annualised demand was softening the blow from ex- 2.5% in the third quarter, suffering the ternal headwinds. worst slump in over four years, as a string Pakistan The tankan’s headline gauge of big of natural disasters cooled consumer sen- manufacturers’ sentiment stood at plus timent and disrupted factory output. gets $1bn 19, unchanged from three months ago and Many analysts expect growth to have beating a median market forecast of plus rebounded in the current quarter, though 17, the survey showed yesterday. slowing exports and heightening risks to Saudi aid The index for non-manufacturers rose the global economy cloud the outlook. to plus 24 from plus 22 in the September The tankan’s sentiment indexes are Internews survey, exceeding a market forecast of calculated by subtracting the number of Islamabad plus 21 and improving for the first time in respondents who say conditions are poor two quarters. from those who say they are good. Pedestrians cross a street in Tokyo. Confidence among Japan’s biggest manufacturers was unchanged this quarter after Both manufacturers and non-manu- A positive reading means optimists Pakistan yesterday received the slipping for three consecutive surveys, central bank data showed yesterday. facturers were more pessimistic about the outnumber pessimists. second tranche of $1bn from Saudi Arabia after which the foreign ex- change reserves stood at $8.26bn. Sources in the Ministry of Finance said Pakistan will receive the third instalment in mid-January. Last month, the State Bank of ADB unveils $7.5bn business plan for Pakistan Pakistan (SBP) had confirmed receiving the first $1bn from Saudi Arabia. Internews The Manila-based lending agency rating of the country among others. infrastructure and services, the bank has $175mn for projects on secondary edu- During Prime Minister Imran Islamabad says while the new government is in the The concessional lending includes a allocated $470mn in loan fi nancing. cation in Sindh and improving work- Khan’s visit to the Kingdom on process of establishing its development carryover of $600mn from 2018. The pipeline includes a cross-sector force readiness and skills development October 23 it was announced that priorities, it is in close dialogue with the The non-lending programme for project readiness facility for Punjab and in Punjab, and $50mn project to improve Saudi Arabia had agreed to provide he Asian Development Bank government. 2019-21 is $21.7mn, including transac- the Punjab Cities Improvement project. quality of health care services in Khyber- a $12bn package to Pakistan to (ADB) has announced its new Going forward, the bank proposed as- tion technical assistance for various In fi nance and public sector manage- Pakhtunkhwa. support its ailing economy. T‘Country Operations Business sistance pipeline for Pakistan may need pipeline projects. The bank’s non-sov- ment, the lender has allocated $2,400mn The bank will also provide technical The package included $3bn Plan for Pakistan’ covering the period to be further adjusted, particularly for ereign operations will supplement these in loan fi nancing to the fi nance and pub- assistance across sectors to help project balance of payments support and from 2019 to 2021, under which resourc- 2020 and 2021. The new plan is aligned resources. The bank will also explore co- lic sector management sectors. implementation and to generate and dis- $3bn in deferred payments on oil es would be available for sovereign lend- with the ADB’s country partnership fi nancing from other sources and seek The new business plan includes new seminate knowledge products to sup- import. ing programme amounting to $7,528mn. strategy which is completing in 2019 and fi nancing from the regional pool under projects which are: trade and competi- port policy and project development, as According to experts, the aid will These resources will be available dur- the ‘Vision-2025’. concessional resources and regular OCR tiveness programme in 2019; fi nancial well as to enhance project quality and reduce the pressure on Pakistan’s ing the three-year period in energy, The indicative resources available for regional cooperation and integration. markets development in 2020; infra- readiness. The agreement for $284mn foreign currency reserves and the transport, agriculture, natural resources during this period for sovereign opera- In the agriculture, natural resources, structure fi nancing and PPPs in 2021; as is the third tranche of a multi-tranche value of rupee might rise against and rural development, water and other tions amount to $5,712.1mn, comprising and rural development sector, the ADB well as the second phase of support for fi nancing facility (MFF) under the ADB- the US dollar. The current Pakistan urban infrastructure and services, ac- $4,290mn for regular ordinary capital has allocated $794mn in loan fi nancing. the Benazir Income Support Programme supported second power transmission Tehreek-e-Insaf (PTI) government cording to the business plan document. resources lending and $1,422mn for con- The pipeline includes the Greater Thal in 2020. investment programme. has also approached China and the Besides the new plan, ADB has signed cessional lending. Canal Irrigation project, and the Smaller The education and health sectors’ The MFF aims to develop a stronger, International Monetary Fund (IMF) a loan agreement with the government, The fi nal allocation will depend on Cholistan Water Resources Develop- pipeline includes $225mn in loan fi - smarter, greener, and more climate re- to seek packages to support the worth $284mn to improve the country’s available resources, project readiness, ment project. nancing. The bank’s re-engagement in silient power transmission system in economy. power transmission network. project performance and debt distress In the area of water and other urban education and health sectors includes Pakistan. Gulf Times Saturday, December 15, 2018 5 BUSINESS

DJIA WORLD INDICES Company Name Lt Price % Chg Volume Indices Lt Price Change Dow Jones Indus. Avg 24,156.29 -441.09 Apple Inc 166.77 -2.45 17,115,047 S&P 500 Index 2,609.14 -41.40 Microsoft Corp 107.49 -1.80 14,388,251 Nasdaq Composite Index 6,972.00 -98.34 Johnson & Johnson 134.35 -9.12 28,654,842 S&P/Tsx Composite Index 14,640.92 -109.43 Jpmorgan Chase & Co 100.69 -0.43 7,057,926 Mexico Bolsa Index 41,697.80 +185.29 Exxon Mobil Corp 75.63 -1.75 3,779,275 Brazil Bovespa Stock Idx 87,832.27 -5.32 Walmart Inc 91.80 -1.25 3,753,070 Ftse 100 Index 6,845.17 -32.33 Visa Inc-Class A Shares 135.12 -1.76 3,468,770 Cac 40 Index 4,853.70 -43.22 Unitedhealth Group Inc 264.42 -2.84 1,180,454 Dax Index 10,865.77 -58.93 Pfizer Inc 43.56 -2.27 9,091,425 Ibex 35 Tr 8,886.10 -40.20 Verizon Communications Inc 57.00 -0.17 4,804,562 Nikkei 225 21,374.83 -441.36 Chevron Corp 113.97 -1.70 1,636,044 Japan Topix 1,592.16 -24.49 Procter & Gamble Co/The 96.25 -0.25 4,799,435 Hang Seng Index 26,094.79 -429.56 Intel Corp 48.21 -0.17 7,267,169 All Ordinaries Indx 5,678.80 -56.45 Cisco Systems Inc 46.01 -3.09 8,851,372 Nzx All Index 1,516.56 -10.72 Home Depot Inc 172.92 -0.55 1,550,524 Bse Sensex 30 Index 35,962.93 +33.29 Boeing Co/The 319.80 -1.74 1,038,898 Nse S&P Cnx Nifty Index 10,805.45 +13.90 Coca-Cola Co/The 49.30 -0.34 5,435,264 Straits Times Index 3,077.09 -33.99 Merck & Co. Inc. 76.84 -2.75 5,268,557 Karachi All Share Index 28,326.96 +307.20 Walt Disney Co/The 112.67 -0.63 2,675,826 Jakarta Composite Index 6,169.84 -7.88 Mcdonald’s Corp 183.33 -1.66 1,467,992 Dowdupont Inc 53.06 -1.34 3,822,808 Nike Inc -Cl B 72.71 -0.30 2,973,128 3M Co 197.26 -2.41 900,620 TOKYO Intl Business Machines Corp 119.93 -0.66 1,704,803 United Technologies Corp 118.79 -0.39 1,128,440 Company Name Lt Price % Chg Volume American Express Co 105.32 -1.29 1,753,659 Sumitomo Realty & Developmen 4,256.00 -0.72 2,409,900 Goldman Sachs Group Inc 173.80 -1.21 2,608,076 Sumitomo Metal Mining Co Ltd 3,214.00 -1.86 2,211,500 Walgreens Boots Alliance Inc 78.74 -4.35 3,000,628 Orix Corp 1,731.50 -0.75 6,349,100 Caterpillar Inc 125.72 -0.14 1,487,205 Daiwa Securities Group Inc 612.20 -1.99 7,497,400 Traders monitor financial data inside the Frankfurt Stock Exchange. The DAX 30 closed down 0.5% to 10,865.77 points yesterday. Travelers Cos Inc/The 120.59 -0.75 649,323 Softbank Group Corp 8,496.00 -4.64 12,692,900 Mizuho Financial Group Inc 179.30 -0.88 145,567,200 Central Japan Railway Co 22,895.00 -0.17 483,500 FTSE 100 Nitori Holdings Co Ltd 14,865.00 0.30 400,500 T&D Holdings Inc 1,446.50 -2.20 3,019,500 Company Name Lt Price % Chg Volume Toyota Motor Corp 6,829.00 -0.60 8,176,500 Hoya Corp 6,878.00 -3.04 1,468,200 Wpp Plc 869.40 -0.16 2,934,645 Europe markets end lower Sumitomo Mitsui Trust Holdin 4,227.00 -2.24 1,977,100 Wood Group (John) Plc 567.80 -2.10 2,114,878 Japan Tobacco Inc 2,858.50 -0.71 6,726,900 Wm Morrison Supermarkets 225.85 -0.94 7,037,316 Osaka Gas Co Ltd 2,145.00 0.23 1,315,200 Whitbread Plc 4,498.00 -0.68 272,654 Sumitomo Electric Industries 1,514.50 -1.27 3,106,400 Vodafone Group Plc 160.68 0.12 63,267,726 Ono Pharmaceutical Co Ltd 2,654.50 -1.01 1,555,300 United Utilities Group Plc 756.20 -1.77 1,612,390 on global growth worries Ajinomoto Co Inc 1,994.50 -0.15 3,555,600 Unilever Plc 4,320.00 -0.40 1,803,074 Mitsui Fudosan Co Ltd 2,736.00 -0.56 5,841,000 Tui Ag-Di 1,169.50 -1.72 1,737,163 Daikin Industries Ltd 12,395.00 -1.98 1,720,100 The S&P 500 and the tech-heavy if you discount the impact of the yel- Tesco Plc 192.90 -2.87 22,483,579 AFP Toray Industries Inc 814.60 -2.35 6,361,600 Nasdaq were both adrift by around low vest protests, the underlying story Taylor Wimpey Plc 132.30 -2.14 11,132,848 Paris Bridgestone Corp 4,506.00 -0.09 3,114,600 Standard Life Aberdeen Plc 246.15 0.88 9,779,911 1.5%. is one of economic weakness in Eu- Sony Corp 5,855.00 -1.66 6,133,300 Standard Chartered Plc 604.70 -0.41 3,772,541 Tokyo fi nished 2% lower following rope. Astellas Pharma Inc 1,656.00 -2.04 10,216,400 St James’s Place Plc 936.20 -0.51 883,899 all Street led stock market a survey of confi dence among Japan’s “Companies are worried about the Jxtg Holdings Inc 619.60 -0.63 15,646,100 Sse Plc 1,089.50 -0.77 2,290,939 Nippon Steel & Sumitomo Meta 1,996.50 -0.97 4,041,800 falls across the globe yes- big businesses showed they remain global economic and political climate, Smurfit Kappa Group Plc 2,008.00 -0.10 525,327 Suzuki Motor Corp 5,417.00 -2.17 2,173,300 terday after data showed up cautious about the global outlook and with trade wars and Brexit adding to Smiths Group Plc 1,372.00 -2.17 886,117 W Nippon Telegraph & Telephone 4,696.00 -0.02 4,755,700 weakness in the Chinese and eurozone Hong Kong and Shanghai both lost increased political tensions within Smith & Nephew Plc 1,485.50 -0.97 2,923,553 Sompo Holdings Inc 3,988.00 -1.56 2,129,100 Shire Plc 4,673.00 0.33 5,121,905 economies, despite further indications around 1.5%. the euro area,” said IHS Markit’s chief Daiwa House Industry Co Ltd 3,559.00 -2.17 2,925,200 Severn Trent Plc 1,879.50 -0.82 608,855 Beijing and Washington may be mov- In Europe, a survey showed that business economist Chris Williamson. Komatsu Ltd 2,610.00 -1.57 5,862,800 Segro Plc 603.60 0.03 1,812,496 ing to end their trade row. global trade war fears and disruptions The euro slid back below $1.13, a day West Japan Railway Co 7,782.00 0.10 784,400 Scottish Mortgage Inv Tr Plc 488.35 -0.39 1,062,500 In London, the FTSE 100 closed caused by anti-government protests in after the European Central Bank said Murata Manufacturing Co Ltd 16,050.00 -2.34 1,181,900 Schroders Plc 2,389.00 0.17 286,977 Kansai Electric Power Co Inc 1,744.50 0.40 2,616,600 down 0.5% to 6,845.17 points; Frank- France pushed business growth in the it was ending its programme of asset Sainsbury (J) Plc 275.50 -1.57 8,904,798 Denso Corp 5,132.00 -2.02 2,330,800 furt — DAX 30 ended down 0.5% to eurozone to a four-year low in Decem- purchases which had propped up eu- Sage Group Plc/The 596.20 -1.00 2,862,657 Dai-Ichi Life Holdings Inc 1,863.00 -1.06 8,225,600 10,865.77 points and Paris — CAC 40 ber. rozone growth for the past three years, Rsa Insurance Group Plc 506.60 0.16 2,199,895 Mazda Motor Corp 1,241.00 -1.47 4,389,800 Royal Mail Plc 296.30 -1.85 5,772,841 closed down 0.9% to 4,853.70 points The slide in IHS Markit’s composite despite ECB boss Mario Draghi’s as- Mitsui & Co Ltd 1,752.00 -0.40 8,912,100 Royal Dutch Shell Plc-B Shs 2,358.00 -0.17 2,586,963 yesterday. eurozone PMI, to 51.3 points from 52.7 sessment that there were increasing Kao Corp 8,117.00 -1.34 2,952,800 Royal Dutch Shell Plc-A Shs 2,342.50 0.06 5,358,402 Signs of easing tensions had helped points in November, came just a day risks to the economy of the single cur- Sekisui House Ltd 1,658.00 -1.81 3,743,400 Royal Bank Of Scotland Group 211.60 0.33 11,789,919 rency bloc. Oriental Land Co Ltd 11,255.00 0.09 694,500 propel equities higher earlier this after the European Central Bank pulled Rolls-Royce Holdings Plc 808.60 -1.15 4,246,618 Secom Co Ltd 9,573.00 -1.69 1,434,800 week, with both China and the United its massive stimulus programme that In Europe, traders continued in vain Rio Tinto Plc 3,675.50 -1.58 3,867,153 Tokio Marine Holdings Inc 5,343.00 -1.07 3,415,500 States seeming to give key concessions, has stoked growth in the single cur- to tease out clarity on Britain’s path out Rightmove Plc 439.90 0.10 2,665,172 Aeon Co Ltd 2,669.50 -2.05 3,923,200 of the European Union as Prime Min- Rentokil Initial Plc 332.00 0.45 3,101,338 fuelling hopes they can eventually re- rency area for the past three years. Fanuc Corp 16,905.00 -3.23 2,178,700 Relx Plc 1,629.00 0.56 2,940,414 solve their diff erences. The survey for France showed busi- ister Theresa May denied reports that Daito Trust Construct Co Ltd 15,240.00 -2.12 350,300 Reckitt Benckiser Group Plc 6,264.00 -0.57 1,092,827 But data showing that the trade war ness there had fl ipped into reverse, as EU leaders had refused her plea for re- Otsuka Holdings Co Ltd 5,386.00 -2.85 2,200,200 Randgold Resources Ltd 6,942.00 -0.49 415,660 is already having an impact on China — the index plunged to 49.3 in December assurances on her Brexit plan, saying Resona Holdings Inc 552.10 -2.39 19,860,200 Prudential Plc 1,415.50 -0.77 4,302,843 Asahi Kasei Corp 1,145.00 -1.84 4,637,900 consumer spending grew at its slowest from 54.2 in November. simply that “there is work still to do”. Persimmon Plc 1,897.00 -2.69 1,189,717 Kirin Holdings Co Ltd 2,389.50 -2.79 4,682,500 pace in 15 years and factories eased up “Weak data from both China and The pound lost almost 1% against Pearson Plc 945.80 1.20 2,612,504 Mitsubishi Ufj Financial Gro 583.10 -1.40 82,188,300 in November — prompted equities in- Europe overnight provided a stark re- the dollar and the euro after European Paddy Power Betfair Plc 6,605.00 2.80 266,899 Marubeni Corp 830.00 -0.20 10,634,300 Ocado Group Plc 815.00 1.32 1,110,539 vestors there to take their gains off the minder that global growth remains leaders restated their position on ar- Mitsubishi Chemical Holdings 844.60 -0.90 6,443,200 Nmc Health Plc 3,062.00 -0.91 415,936 table. challenging to fi nd, and 2019 outlook rangements for the vexed issue of the Fast Retailing Co Ltd 60,770.00 -0.74 1,606,900 Next Plc 4,338.00 -1.94 750,893 Rosier US retail and industrial data remains faint,” said Stephen Innes, Irish border, which has caused MPs in Ms&Ad Insurance Group Holdin 3,240.00 -1.22 1,790,600 National Grid Plc 843.50 -0.87 6,724,502 could not assuage fears that growth head of Asia-Pacifi c trade at fi nancial Britain to threaten to reject the only Kubota Corp 1,750.50 -2.02 3,974,800 Mondi Plc 1,632.00 -0.03 2,098,778 Seven & I Holdings Co Ltd 4,873.00 -0.65 3,593,100 and the trade spat with Beijing will drag analysts OANDA. deal on off er. Micro Focus International 1,462.50 -1.68 1,212,661 Inpex Corp 1,135.00 -4.10 8,532,500 on sentiment and the benchmark Dow On the wider impact of recent popu- Oil prices fell, with traders also Melrose Industries Plc 159.40 0.73 14,705,556 Sumitomo Mitsui Financial Gr 3,917.00 -0.68 9,620,400 Jones Industrial Average had given up lar protests in France against President worried about the impact of slower Marks & Spencer Group Plc 263.40 -0.98 9,915,297 Ana Holdings Inc 3,945.00 -1.42 1,308,500 London Stock Exchange Group 4,040.00 0.25 640,495 1.7% some two hours into the session. Emmanuel Macron he noted that “even growth, analysts said. Mitsubishi Electric Corp 1,292.50 -2.78 10,096,900 Lloyds Banking Group Plc 52.70 -0.77 192,372,010 Honda Motor Co Ltd 3,054.00 -1.93 7,639,000 Legal & General Group Plc 229.20 -0.43 11,192,021 Tokyo Gas Co Ltd 2,919.00 0.03 1,589,000 Land Securities Group Plc 840.60 1.03 2,869,899 HONG KONG HONG KONG Tokyo Electron Ltd 13,345.00 -5.46 2,768,300 Kingfisher Plc 225.40 -2.04 7,950,924 Panasonic Corp 1,091.50 -0.82 9,752,100 Just Eat Plc 577.00 -0.52 2,146,677 Fujitsu Ltd 7,106.00 -1.24 1,702,100 Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume Johnson Matthey Plc 2,718.00 -1.88 414,107 East Japan Railway Co 10,070.00 0.20 1,180,700 Itv Plc 129.85 -0.12 8,101,064 Aluminum Corp Of China Ltd-H 2.71 -3.21 21,311,000 Hong Kong & China Gas 16.06 0.63 17,164,375 Itochu Corp 1,996.00 -0.84 6,181,900 Intl Consolidated Airline-Di 618.60 1.34 4,811,701 Bank Of East Asia Ltd 25.40 0.00 1,132,791 Hong Kong Exchanges & Clear 232.20 -0.85 2,513,495 Fujifilm Holdings Corp 4,445.00 0.34 3,520,600 Intertek Group Plc 4,635.00 -1.38 286,602 Bank Of China Ltd-H 3.31 -1.19 186,624,634 Hsbc Holdings Plc 64.10 -1.69 11,285,950 Yamato Holdings Co Ltd 3,030.00 -3.29 2,426,800 Intercontinental Hotels Grou 4,201.00 0.50 456,085 Bank Of Communications Co-H 5.81 -1.02 26,476,457 Hutchison Whampoa Ltd 0.00 0.00 - Chubu Electric Power Co Inc 1,674.00 -0.59 2,745,600 Informa Plc 649.80 -0.85 2,444,937 Belle International Holdings 0.00 0.00 - Ind & Comm Bk Of China-H 5.50 -1.61 120,069,816 Mitsubishi Estate Co Ltd 1,846.50 1.51 7,366,500 Imperial Brands Plc 2,371.50 -2.09 1,733,044 Boc Hong Kong Holdings Ltd 29.90 -0.83 8,242,602 Li & Fung Ltd 1.35 -2.88 26,546,165 Mitsubishi Heavy Industries 4,246.00 -0.12 1,570,600 Hsbc Holdings Plc 653.50 -0.37 13,287,791 Cathay Pacific Airways 10.94 0.55 545,343 Mtr Corp 41.05 0.12 4,543,959 Shiseido Co Ltd 7,164.00 -2.12 3,011,700 Hargreaves Lansdown Plc 1,831.50 -0.30 528,661 Ck Hutchison Holdings Ltd 79.20 0.38 5,156,938 New World Development 10.76 -1.10 11,884,901 Shionogi & Co Ltd 7,036.00 -1.22 2,148,000 Halma Plc 1,301.00 -0.84 720,918 China Coal Energy Co-H 3.20 -0.93 2,817,000 Petrochina Co Ltd-H 5.37 -1.47 55,653,814 Recruit Holdings Co Ltd 3,017.00 -3.27 6,797,300 Gvc Holdings Plc 721.50 9.07 3,187,736 China Construction Bank-H 6.44 -1.83 205,041,770 Ping An Insurance Group Co-H 74.05 -1.46 26,865,448 Japan Airlines Co Ltd 3,965.00 -0.05 1,551,500 Glencore Plc 289.65 -1.86 35,734,850 China Life Insurance Co-H 16.56 -1.19 32,867,084 Power Assets Holdings Ltd 54.30 0.18 2,926,888 Nitto Denko Corp 5,565.00 -4.40 1,710,600 Glaxosmithkline Plc 1,480.00 -0.15 6,602,622 China Merchants Port Holding 14.50 -0.68 2,763,620 Sino Land Co 13.78 -2.13 4,771,760 Kddi Corp 2,639.00 -0.40 9,740,500 Fresnillo Plc 833.60 -0.88 748,852 China Mobile Ltd 74.95 -3.23 22,345,558 Sun Hung Kai Properties 113.50 -1.30 3,629,346 Rakuten Inc 845.00 -3.65 9,411,600 Ferguson Plc 4,943.50 -1.35 715,800 China Overseas Land & Invest 27.20 -2.51 15,521,837 Swire Pacific Ltd - Cl A 83.55 1.27 1,475,877 Kyocera Corp 5,760.00 -2.47 2,549,700 Experian Plc 1,895.50 -0.21 1,699,537 China Petroleum & Chemical-H 6.48 -0.92 93,135,358 Tencent Holdings Ltd 308.80 -3.08 17,041,560 Nissan Motor Co Ltd 932.50 -0.48 22,273,800 Evraz Plc 464.40 -3.91 2,839,695 China Resources Beer Holding 29.10 0.34 16,450,214 Wharf Holdings Ltd 20.20 -0.74 3,779,844 Easyjet Plc 1,102.00 0.27 1,555,521 China Resources Land Ltd 31.05 -0.96 15,500,012 China Resources Power Holdin 15.12 -0.40 6,508,113 Ds Smith Plc 311.30 -1.11 3,332,669 SENSEX Direct Line Insurance Group 307.50 -0.23 3,208,704 China Shenhua Energy Co-H 18.18 -1.94 17,147,500 GCC INDICES Diageo Plc 2,825.00 -0.70 3,674,249 China Unicom Hong Kong Ltd 8.69 -1.81 17,684,327 Dcc Plc 5,960.00 -1.00 362,884 Company Name Lt Price % Chg Volume Citic Ltd 12.94 -1.07 14,160,257 Indices Lt Price Change Croda International Plc 4,691.00 -0.95 308,907 Clp Holdings Ltd 88.10 0.51 3,241,737 Doha Securities Market Zee Entertainment Enterprise 489.45 -0.86 3,821,515 10,456.14 +22.58 Crh Plc 2,037.00 -0.54 1,889,737 Cnooc Ltd 12.80 -1.99 59,130,595 Saudi Tadawul Yes Bank Ltd 180.35 3.23 87,134,069 7,914.29 +24.20 Compass Group Plc 1,683.00 -0.09 3,014,323 Cosco Shipping Ports Ltd 7.80 -0.51 3,334,000 Kuwait Stocks Exchange Wipro Ltd 333.10 -1.64 5,059,009 4,716.42 -4.08 Coca-Cola Hbc Ag-Di 2,462.00 -0.44 507,948 Esprit Holdings Ltd 1.72 -1.15 2,601,374 Bahrain Stock Exchage Vedanta Ltd 201.60 0.47 8,103,693 1,319.32 -0.90 Centrica Plc 138.00 -0.14 12,430,853 Fih Mobile Ltd 0.81 -3.57 3,215,379 Oman Stock Market Upl Ltd 764.75 -1.12 1,687,523 4,448.11 -34.35 Carnival Plc 4,371.00 0.44 680,947 Hang Lung Properties Ltd 15.90 0.89 3,516,593 Abudhabi Stock Market Ultratech Cement Ltd 4,005.05 1.42 335,674 4,861.54 +23.97 Burberry Group Plc 1,751.00 -1.52 1,115,135 Hang Seng Bank Ltd 178.20 -0.67 1,171,536 Dubai Financial Market Titan Co Ltd 931.50 -1.34 2,649,386 2,599.05 +25.60 Bunzl Plc 2,425.00 -0.49 794,268 Henderson Land Development 39.85 -0.50 1,899,491 Tech Mahindra Ltd 712.20 0.41 2,065,487 Bt Group Plc 251.55 0.04 19,666,005 Tata Steel Ltd 513.55 0.25 5,527,933 British Land Co Plc 558.20 -0.18 3,075,924 Tata Motors Ltd 166.95 0.06 11,351,360 British American Tobacco Plc 2,660.00 -1.54 4,513,594 Tata Consultancy Svcs Ltd 1,989.75 0.36 2,550,388 Bp Plc 512.70 -0.29 27,124,719 “Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The Sun Pharmaceutical Indus 420.65 -0.34 9,029,581 Bhp Billiton Plc 0.00 0.00 - State Bank Of India 289.20 0.07 13,156,620 accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended Berkeley Group Holdings/The 3,432.00 -1.89 598,747 Reliance Industries Ltd 1,112.20 0.47 7,606,301 as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank Barratt Developments Plc 440.50 -2.69 3,554,722 Power Grid Corp Of India Ltd 185.70 1.73 5,294,064 or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on Barclays Plc 158.44 -0.36 40,274,393 Oil & Natural Gas Corp Ltd 146.85 2.48 24,374,598 this data.” Bae Systems Plc 456.10 -0.46 9,328,057 Ntpc Ltd 143.50 1.74 11,768,089 Aviva Plc 377.00 -1.05 13,185,647 Maruti Suzuki India Ltd 7,662.15 -0.11 727,771 Astrazeneca Plc 6,130.00 0.46 1,550,069 Mahindra & Mahindra Ltd 757.25 -0.26 1,871,409 Associated British Foods Plc 2,180.00 0.41 1,124,484 Larsen & Toubro Ltd 1,411.40 -1.06 2,287,910 CURRENCIES Ashtead Group Plc 1,720.00 -0.89 1,959,489 Kotak Mahindra Bank Ltd 1,255.95 -0.67 2,850,971 DOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI KUWAITI Antofagasta Plc 778.00 -2.09 2,622,829 DINAR DINAR Jsw Steel Ltd 293.10 -1.66 6,200,185 Anglo American Plc 1,694.40 -1.03 3,880,329 Itc Ltd 275.75 0.16 10,201,180 Admiral Group Plc 1,980.50 0.61 583,487 Infosys Ltd 706.05 1.19 10,043,510 3I Group Plc 779.60 -0.43 1,802,834 Indusind Bank Ltd 1,603.85 -0.39 739,518 Indian Oil Corp Ltd 141.25 2.80 42,673,363 Indiabulls Housing Finance L 792.90 2.22 8,365,781 TOKYO Icici Bank Ltd 351.90 0.67 12,797,053 Housing Development Finance 1,904.10 -1.95 3,526,908 Hindustan Unilever Ltd 1,860.55 0.27 1,652,735 Company Name Lt Price % Chg Volume Hindustan Petroleum Corp 227.30 0.95 6,957,150 Hitachi Ltd 3,252.00 -0.94 3,484,600 Hindalco Industries Ltd 220.15 -0.07 5,936,741 Takeda Pharmaceutical Co Ltd 3,981.00 0.03 11,583,700 Hero Motocorp Ltd 3,314.65 -0.11 948,396 Jfe Holdings Inc 1,886.50 -1.23 2,837,700 Hdfc Bank Limited 2,095.70 -0.27 1,605,854 Sumitomo Corp 1,673.00 -0.86 5,312,000 Hcl Technologies Ltd 961.20 -1.72 2,401,691 Canon Inc 3,150.00 -0.85 6,489,600 Grasim Industries Ltd 847.20 2.15 1,867,112 Nintendo Co Ltd 31,970.00 -2.62 2,480,300 Gail India Ltd 351.25 1.39 2,224,383 Eisai Co Ltd 9,617.00 -5.02 1,757,300 Eicher Motors Ltd 23,716.15 1.76 79,450 Isuzu Motors Ltd 1,624.50 -2.14 2,914,200 Dr. Reddy’s Laboratories 2,591.70 -0.20 610,412 Unicharm Corp 3,551.00 0.23 2,004,600 Coal India Ltd 247.15 1.06 7,648,950 Shin-Etsu Chemical Co Ltd 9,047.00 -2.42 2,485,500 Cipla Ltd 521.75 -1.00 2,043,269 Smc Corp 34,840.00 -2.55 361,400 Bharti Infratel Ltd 252.05 1.14 1,845,845 Mitsubishi Corp 3,146.00 -0.32 5,558,200 Bharti Airtel Ltd 319.25 5.33 21,682,287 Asahi Group Holdings Ltd 4,494.00 -0.99 2,110,300 Bharat Petroleum Corp Ltd 345.30 3.11 3,912,059 Keyence Corp 57,440.00 -0.86 473,300 Bajaj Finserv Ltd 6,177.65 0.30 176,254 Nidec Corp 13,800.00 -1.99 823,500 Bajaj Finance Ltd 2,486.35 -0.11 1,287,783 Nomura Holdings Inc 461.20 -1.66 22,025,500 Bajaj Auto Ltd 2,823.15 -0.46 491,034 Daiichi Sankyo Co Ltd 4,166.00 -0.43 3,225,700 Axis Bank Ltd 620.25 0.19 4,559,400 Subaru Corp 2,480.50 -1.96 3,851,500 Asian Paints Ltd 1,340.95 1.57 1,965,782 Ntt Docomo Inc 2,559.00 -0.33 5,704,600 Adani Ports And Special Econ 368.60 -0.66 2,520,019

Gulf Times 8 Saturday, December 15, 2018 BUSINESS

BHP Group’s $20bn Canadian potash dilemma: To build or not?

Bloomberg to the board until it meets Melbourne capital allocation hurdles, spokeswoman Bronwyn Wilkinson said in an emailed BHP Group may be heading for statement. another clash with investors as In a webcast last month, CEO the world’s biggest miner gets Mackenzie was positive on closer to a decision on whether the outlook for potash and to build, sell or mothball its BHP’s assets. A rising global $20bn potash project. population and shrinking The Jansen mine in Canada is amount of land devoted to aimed at giving the company food production means the exposure to rising global food agricultural sector needs to demand and represents one of lift eff iciency, boosting the its few big growth prospects. long-term outlook for fertilisers, BHP has already spent about he said. BHP believes it has $2.7bn on the project, according the world’s best undeveloped to an October filing, and chief potash assets and the business Bundles of US dollar banknotes are pictured at a currency exchange shop in Mexico. UK investors seeking to buy dollar assets have seen the cost of hedging their exposure executive off icer Andrew could eventually rival its iron about double over the course of 2018. Mackenzie last month spoke ore unit in scale, Mackenzie said. enthusiastically about the Iron ore is BHP’s top earner and outlook for potash, a crop accounted for almost 40% of nutrient. underlying earnings in the 12 Yet investors and analysts months to June 30. are sceptical. The big-ticket Beyond a first stage project in the Prairie province development at Jansen, of Saskatchewan means there’s scope for three further getting into a new commodity expansions over a period of Brexit adds to UK dominated by a small handful of over more than 15 years at producers. a cost of about $4bn each, The world’s largest miners are BHP said in a November still on probation for spending presentation. Completing all decisions made during the four stages could take total last commodity boom and investment in the project to BHP has a poor record of almost $20bn. credit market stress as capital allocation, including a The company has better growth disastrous $20bn foray into options to pursue in its portfolio, shale. While BlackRock Inc and including expansions of existing others have flagged they’ll back coal to copper assets, said Andy some projects, particularly in Forster, a Sydney-based senior copper, there’s less appetite for investment off icer at Argo riskier investments. Investments Ltd, which holds new bond sales soar “There’s no case to be made BHP. where they throw good money BHP advanced 1.9% in Sydney Bloomberg market,” said Nicolas Trindade, a portfo- Should there be a general election, and two lenders as potentially having to after bad,” said Brenton trading on Thursday, as London lio manager at Axa Investment Managers should Labour win, “we will face a set of convert some AT1s into shares to boost Saunders, a Sydney-based competitor Rio Tinto Group UK Ltd in London. “In order to come to circumstances here in the UK that our fi - capital under a stress test scenario. Still, analyst at Pendal Group Ltd, jumped 2.2%. the market now, a corporate will have to nancial markets are quite likely to panic all seven UK lenders assessed in the test which holds BHP shares. After spending the better part rowing Brexit risks are magnify- off er a high premium, so some treasurers about.” passed, and the Bank of England said it While the outlook for potash of a decade in a downward ing stresses for UK credit inves- would prefer to wait.” Long bonds: Sterling investors have was reassured the sector had suffi cient has improved, Jansen “is not spiral, prices of potash have Gtors – hurting bank bonds, send- Larger borrowers are likely to be able to been fl eeing short-dated riskier debt and liquidity. a project that at this stage finally turned around. Stronger ing investors scurrying for safety and ride out a prolonged sterling market shut- shifting into longer-maturity, low-risk Leveraged consumers: Credit in- we think deserves serious demand has come just as slamming the door on new debt sales. down because they have already locked in debt. That’s boosted 30-year UK gov- vestors are getting nervous about the consideration,” he said. “It Canadian producers idle some Brexit’s been a headwind through the funding or can shift to another currency. ernment bonds and other multi-dec- borrowing habits of the UK consumer should be shelved or sold.” mines, while new capacity has year but in recent weeks it’s been joined However, smaller or higher-risk compa- ade securities. Cambridge University’s amid concerns about job losses, higher One way or the other, a decision been added at a slower pace by a sudden repricing of credit across nies more reliant on the UK may be less £300mn ($376mn) 50-year CPI-linked infl ation or even recession in the event is likely next year. BHP is than expected. Europe and the US, triggered by tighter fl exible or unable to fi nd investors. bond has gained nearly 12% this month. of no-deal Brexit. The cost of insuring nearing completion on two BHP argues Jansen would enter monetary conditions. Borrowing costs Even some large companies may en- Oxford University’s £750mn 100-year debt issued by retail bellwether Marks & 1,000-metre (3,300-feet) deep production into a tighter market have soared and there’s been a wave of counter diffi culties. S&P Global Ratings bond has rebounded during December to Spencer Plc has surged more than 40% shafts, which it has said will in the mid-2020s and that it sell-off s of riskier company debt. cited the risk of a ‘no deal’ Brexit hurting claw back about half of this year’s losses. since June. Other investments related to be a trigger to decide whether could apply techniques from Some of these bond-price drops have Jaguar Land Rover when it downgraded TwentyFour AM’s Holman wonders consumers may also get squeezed, such to press ahead with an initial the oil industry to cut operating been endured by UK companies. Debt se- parent Tata Motors Ltd this month. The if the fl ight to long-dated gilts could as asset-backed securities tied to credit- $5bn development. BHP has costs. curities of Thomas Cook Group Plc and luxury-car unit has a $700mn bond ma- reverse if Corbyn’s Labour take power. card debt or consumer loans. also been seeking a partner for “If they can present a really PizzaExpress Ltd are among those trad- turing in the next few days. However, his base case is for gilt yields to Regulatory risks: The UK leaving Jansen since at least 2013. compelling case, then we will ing at record lows. Politics: Brexit is a big event risk for only creep higher. the European Union without a deal could The company last year judge it at the time,” said Lou Brexit headlines this week are a re- the market, but it’s not the only one. The Dollar hedging: Hedging costs for harm bonds that have benefi ted from delayed plans to seek board Capparelli, manager, equities minder the outlook for the UK is diffi cult no confi dence vote in Theresa May re- companies reliant on dollar funding are Europe-wide regulatory alignment. UK approval for the project, citing at Melbourne-based UniSuper to forecast, particularly in the political minds us of the parlous state of the gov- rising. UK investors seeking to buy dollar covered bonds, for instance, could suff er a weaker market outlook. It Management Pty, which has arena. Here are some of the main issues ernment, which has survived without a assets have seen the cost of hedging their if European banks can no longer use them also followed investor criticism, about A$70bn ($50bn) under being monitored by investors in the UK parliamentary majority since June 2017. exposure about double over the course of in some liquidity coverage ratio calcula- including from activist Elliott management, and holds BHP credit market: Sterling credit will start the year with 2018. tions. European investors will also want Management Corp New shares. “There’s inherent risk No deals: There hasn’t been a sterling a large Brexit premium and so any kind of Bank CoCos: Bank bonds have been reassurance of their ability to collect York-based Elliott declined to with those projects, but that’s bond sale in the corporate market since exit deal would likely reduce that, Mark at the sharp end of this year’s sell-off in coupons or trade bonds listed in London comment on its current position the nature of what a resources TSB Bank cancelled a covered bond on Holman, chief executive of TwentyFour UK credit. Additional Tier 1 notes – the once the UK leaves the Single Market. on Jansen. company does.” November 15. Three UK-focused lev- Asset Management, wrote this week. riskiest form of bank debt – have seen However, there’s always the chance BHP is continuing to investigate Still, new potash projects are eraged-fi nance transactions were can- This might mean sterling outperform- the biggest moves. of a bounceback if there’s greater clarity “all options to enhance returns tough to justify at current celled in the past couple of weeks. ing other major credit markets, though The value of AT1s issued by Bar- over Brexit. Analysts at ABN Amro Group and improve capital eff iciency,” prices, according to Sanford C Given the high level of uncertainty in Holman said the asset manager is wary clays Plc and Lloyds Banking Group Plc NV wrote on Monday that covered bonds and won’t take the project Bernstein & Co. sterling bonds, “portfolio managers are of risk surrounding opposition party dropped sharply last month, not helped rallied in the aftermath of the June 2016 reluctant to participate in the primary leader Jeremy Corbyn grabbing power. by the Bank of England identifying the Brexit vote, and could do so again. Gulf Times Saturday, December 15, 2018 9 BUSINESS

EM stocks and currencies drop aft er China reports weak economic data The 2018 dollar-bond Reuters headed by a new governor. London Most developing-world currencies fell as the US dollar gained ahead of the Emerging-market stocks US Federal Reserve’s policy were set for their second meeting next week. consecutive week of losses The Fed is widely expected to bust in Asia got yesterday amid worries raise interest rates by 25 basis about a slowdown in China’s points, but greater focus will economy. centre on the policy outlook Currencies weakened after for 2019, over which there is four weeks of gains. more uncertainty. A string a weak economic Among the worst-hit numbers across leading currencies on the day was missed by analysts economies in the recent South Africa’s rand, which fell days, including weak PMI more than 1.3%. Bloomberg data for Europe on Friday, Russia’s rouble weakened Hong Kong added to fears about a global 0.3% ahead of its central bank slowdown. meeting, with analysts divided The MSCI index for on whether the central bank fter a blockbuster 2017, the stars developing world stocks fell might raise rates. seemed aligned for another strong more than 1%, dragged down Fifteen analysts and Ayear for Asia’s dollar-bond market by mainland China and Hong economists polled by Reuters in 2018. Then the trade-war and a record Kong shares. expect the key rate to be spate of Chinese defaults intervened, The yuan slipped 0.3%. China left at 7.50%. Twelve said contributing to the worst sell-off in a reporter retail sales grew an increase to 7.75% looked decade. at their weakest pace in possible. JPMorgan Chase & Co and Bank of November since 2003 and The central bank may also America Corp were among those at the industrial output rose the announce it will resume start of the year anticipating lower pre- least in nearly three years, foreign- exchange purchases miums for corporate debt, amid a solid putting pressure on Beijing to for state reserves, which global economic outlook and continued defuse its trade dispute with were suspended earlier this historically low interest rates. Sharper- the United States. year amid increased market than-expected hits from Federal Reserve “Our Asia strategist describes volatility. tightening and China’s deleveraging them as ugly, noting also than “The decision to resume campaign, along with the blow to senti- Chinese officials suggest the its regular FX purchases in ment from trade tensions, sent spreads impact of trade frictions is the open market should be surging 109 basis points to the highest in ‘not yet obvious’, so there consistent with a marginal about three years. may be worse to come,” easing of the policy, which “Rising US rates, weakness in the RMB Adam Cole, RBC’s global FX was also the reason behind versus the dollar, EM concerns spilling strategist, wrote in a client the shift in the market’s over and trade war tensions all contribut- note. expectations in favour of the ed to this shift in investor sentiment” for China is set to hold its annual policy rate hike,” Credit Suisse Asian high-yield bonds, Goldman Sachs Central Economic Work analyst Alexey Pogorelov Group Inc strategists including Kenneth Conference next week, where wrote in a note. Ho wrote in their 2019 outlook. “We view regulators are expected to Turkey’s lira and the BIST the key reasons for the underperform- offer stimulus measures. 100 stock index were set for ance are tighter credit conditions in Chi- Stocks also fell in India, losses, after the central bank na and rising onshore defaults.” ending a three-day rally. kept rates unchanged as Asia’s investment-grade bonds hand- The rupee lost 0.5% before a inflation slowed more than ed investors a 1.4% loss since the start of central bank board meeting expected in November. the year. That left even Goldman’s fore- cast of a zero% return looking too opti- mistic. The asset class is just one of countless that are heading for a down year, with the broadest losses in more than a century by one measure. Some 89% of assets have handed investor losses, Deutsche Bank AG calculated last month. Some, including analysts at Australia & New Zealand Banking Group Ltd and Morgan Stanley, did anticipate a more challenging environment for Asian bonds in 2018. Both those teams advised under- weighting the securities of China prop- basis points in 2018, with 25 basis points A UBS representative declined to com- fAML indexes. According to a Goldman erty companies. Borrowing costs in dol- of spread narrowing in high grade and 37 ment. Sachs spokesperson, the bank’s analysts lars for China’s high-yield issuers, most basis points of widening in high yield; BofAML: Preferred B rated securi- said in a report late last year that China of whom are property developers, almost expected a total return of 4%. ties to BB in Asia, liked China industrial property high-yield would be a top pick doubled this year to 11%, the highest in Overall spreads widened 109 basis credits and high-beta B property. B rated in 2018 due to “relative value opportuni- about four years, ICE BofAML indexes points this year to 282 basis points as of Asian dollar bonds saw a 5.7% loss, while ties” at that time. show. Tuesday, with 54 basis points of widen- BB rated names lost 3.3%. Chinese high- Morgan Stanley: Preferred Asia in- Record local defaults in China, induced ing in high-grade and 319 basis points yield real estate credits were down 4.7%, vestment grade over Asia high yield, and by a crackdown on shadow fi nancing, widening in high yield; total return has according to ICE BofAML indexes. The advised being underweight China high sent overseas investors running for cov- been a negative 2.1%, according to ICE bank declined specifi c comment on its yield. Saw spreads widening of 58 basis er as well. A jump of more than 40 ba- BofAML indexes. original 2018 call, while noting that revi- points as the base-case scenario. sis points in the benchmark 10-year US A JPMorgan strategist wasn’t immedi- sions were made during 2018. Investment grade outperformed high Treasury yield this year has also hurt re- ately available for comment. Goldman Sachs: China property high yield, and spreads widened 109 basis turns. Here is a look at what major banks UBS Group: Expected total return yield was the bank’s top pick, seen gener- points. “As the saying goes, ‘hindsight had expected for Asian dollar bonds in of 1.3% for high grade and 5.1% for high ating the highest total return in 2018. is 20/20.’ 2018 clearly marks the end of 2018 and how they actually performed. yield. Asian investment-grade bonds The sector saw a loss of 4.7%, worse the 10-year secular bull market in Asia JPMorgan: Forecast a 15 basis points handed investors a 1.4% loss while junk than the negative 2.1% return on overall credit,” the bank’s Asia credit strategist overall credit spread tightening to 212 is down 4.9%. Asian dollar bonds, according to ICE Bo- Kelvin Pang wrote in a November 25 note. Sensex and Nifty end Asia markets fall after week’s rally flat; rupee weakens AFP Hong Kong Bloomberg, Reuters as equities fell across the region. Mumbai Oil prices eased after rising over 2% the day before, but were supported sian markets fell yesterday, by hopes the market will tighten more putting the region on course Indian shares ended marginally quickly than expected. Ato end a broadly positive higher today after a volatile session, Meanwhile rupee yesterday weakened week on a sour note with China continuing their winning streak for marginally against the US dollar, showing more signs of weakness, a fourth day, amid negative cues tracking losses in its Asian peers. while traders took their profi ts off from the global markets ahead of a The rupee was trading at 71.79 a dollar, the table. RBI board meeting — the first with down 0.15% from its Thursday’s close There was also some unease af- Shaktikanta Das as the head of Reserve of 71.69. The currency opened at 71.75 ter the head of the European Cen- Bank of India. a dollar. tral Bank raised concerns about the Negative cues from global markets The 10-year government bond yield growth outlook for the eurozone and profit booking by investors after a stood at 7.409% from its previous owing to issues within and outside three-day rally kept the Sensex and the close of 7.408%. Bond yields and prices the bloc. Nifty 50 in pressure. move in opposite directions. The pound showed some resil- But gains in telecom, oil, power and The benchmark Sensex Index rose ience, even as European leaders energy sectors helped end the key 0.21% or 74.34 points to 36,003.98 refused pleas for help from Prime indices in green. Banking, pharma and points. Minister Theresa May to push their capital goods sectors led losses. Year to date, it has gained 5.5%. So Brexit deal through a fractured Brit- The BSE Sensex closed 33.29 points, or far this year, the rupee has declined ish parliament. 0.09%, up at 35,962.93 and the Nifty 50 11%, while foreign investors have sold Signs of easing tensions in the Visitors monitor share price movements at the Tokyo Stock Exchange. The Nikkei 225 closed down 2.0% to 21,374.83 ended 13.90 points, or 0.13%, higher at $4.60bn and $7.48bn in the equity and China-US trade row helped propel points yesterday. 10,805.45. debt markets, respectively. equities this week, with both sides The BSE midcap and smallcap indices Asian currencies were trading lower seeming to give key concessions, ing grew at its slowest pace in 15 don fell 0.9%, Paris shed 0.8% and The euro continued to struggle rose 0.19% and 0.03%, respectively. as weak Chinese economic data and fuelling hopes they can eventually years in November. Frankfurt gave up 1.0%. On curren- after being sold Thursday in reac- Among the sectoral indices on BSE, a warning from the European Central resolve their diff erences. Figures at the weekend also cy markets, the pound was down but tion to ECB boss Mario Draghi’s as- telecom, oil and gas, utilities and Bank damped risk sentiment before But observers noted that dealers showed imports and exports tum- mostly holding its own after May’s sessment that there were increasing energy gained, whereas healthcare, the Federal Reserve reviews interest will remain on alert for any negative bling while infl ation slowed. no-confi dence vote win, despite the risks to the eurozone. capital goods, consumer durables and rates next week. news, including further develop- Tokyo fi nished 2% lower. growing prospects of Britain leaving After announcing the end to years industrials declined.Bharti Airtel, Yes South Korean won was down 0.54%, ments in China’s detention of two A survey of confi dence among the EU without a deal. of bond-buying stimulus, Draghi Bank, ONGC, BPCL, Infosys, Indian Oil Indonesian rupiah 0.4%, China Canadians on suspicion of threats Japan’s big businesses showed they With her agreement having no warned of “persistent uncertain- and Coal India were among the major Offshore 0.16%, China renminbi 0.11%, to national security. remain cautious, with worries about chance of passing through parlia- ties relating to geopolitical factors, gainers on the key indices, whereas Philippines peso 0.1%, Malaysian That move came after a top ex- the global outlook off setting fading ment in its present form, the PM the threat of protectionism, vulner- HDFC, HCl Tech, Wipro, LT, Titan, Bajaj ringgit 0.07%, Singapore dollar 0.06%. ecutive at Chinese telecoms giant concerns about the impact of this called on her EU counterparts in a abilities in emerging markets and Auto and Sun Pharma were among the However, Japanese yen was up 0.12% Huawei was arrested in Ottawa. year’s major earthquakes and ty- Brussels summit to give her some fi nancial market volatility”. top losers. and Hong Kong dollar 0.05%. She faces extradition to the US phoons. Sydney fell 1.1%, Singapore leeway that could get her majority In Tokyo, the Nikkei 225 closed Asian stocks fell with US futures as The dollar index, which measures the over allegations the fi rm broke was 1.2% off and Seoul shed 1.3% support. down 2.0% to 21,374.83 points; caution returned to global markets as US currency’s strength against major sanctions on Iran. while Taipei 0.8% lower. But she has so far failed to win any Hong Kong — Hang Seng ended data showed continued weakness in currencies, was trading at 97.123, Hong Kong fell 1.6% and Shang- Wellington, Manila and Jakarta concessions on the main sticking down 1.6% to 26,094.79 points and China’s economy. Shares in Hong Kong up 0.06% from its previous close of hai closed down 1.5% after data were also down. point over Northern Ireland’s future Shanghai — Composite closed down and Japan bore the brunt of declines 97.064. showed Chinese consumer spend- In early European trade Lon- relationship. 1.5% to 2,593.74 points yesterday. Gulf Times 10 Saturday, December 15, 2018 BUSINESS

Asia investors are abandoning Credit Suisse to buy back pound as $1.20 comes in focus

Bloomberg Singapore stocks in next two years sian investors have a message for the UK gov- Bloomberg day that revenue from its Asia Aernment: Get your act Zurich Pacifi c markets business may be together or asset managers will 8% to 10% lower in 2018 than a stop trading the pound com- year earlier. pletely. year ago, Tidjane Thi- “Persistent challenging mar- Comedy and roller coaster am asked Credit Suisse ket conditions have not changed are some of the words fund AGroup AG shareholders our positive long-term outlook, managers in Asia have used to to stay with the bank through however we are mindful of the describe how they view Brit- its restructuring. Those that did short-term headwinds,” the ain’s messy divorce plans with may still be left wanting more. bank said. the European Union. Switzerland’s second-largest The bank continues to at- Asset managers from Syd- bank plans to buy back as much tract infl ows at a healthy clip ney to Singapore say they are as 3bn francs ($3bn) of shares in wealth management, adding increasingly giving the world’s in the next two years, while about 100bn francs since the fourth-most liquid currency increasing the dividend by at beginning of the restructuring, a wide berth as sentiment re- least 5% a year, it said in a state- according to its presentation verses almost daily on the lat- ment ahead of its investor day. on Wednesday. It now manages est sound bites from politicians While it’s on track to deliver about 785bn francs, profi ting in the UK and the continent. on a pledge to boost payouts to from global wealth which has “There’s no point in try- investors, that hasn’t stopped a nearly doubled in the past dec- ing to catch the falling knife 37% slump in the stock this year. ade. of sterling when the end point Thiam has pivoted the bank UBS chief executive offi cer for Brexit is just not clear,” said from more volatile trading in Sergio Ermotti has been sending Stephen Miller, an adviser at favour of wealth management, a similar message to investors, Grant Samuel Funds Manage- slashing thousands of jobs and pledging to drive wealth man- ment Pty in Sydney and former tapping shareholders for bil- agement profi t higher and cut head of fixed income at Black- lions of francs of funding. With costs. He’s also said he’ll return Rock Investment Management his restructuring almost over, at least 50% of net income to (Australia). he can point to private bank- shareholders and is undertaking “Whilst you might have a ing gains even as it grapples a $2bn share buyback plan. suspicion the pound is still with surprises losses and fall- Thiam, a former insurance quite cheap, I don’t think the ing trading revenue. The bank executive, has made cost cuts risk reward is there – avoid it.” is warning Asia Pacifi c markets a major pillar of his strategy, The pound slipped to the revenue will decline this year focusing the restructuring on lowest since April 2017 on and has dropped some targets trading operations in New York Wednesday after senior Tory for its global markets unit. and London where he’s cut po- official Graham Brady an- Credit Suisse rose 0.3% to Credit Suisse branch off ice in Geneva. Switzerland’s second-largest bank plans to buy back as much as $3bn of shares in the next two years, sitions and reduced capital al- nounced Prime Minister 11.08 francs in Zurich on Thurs- while increasing the dividend by at least 5% a year, it said in a statement. location to a markets division Theresa May will face a vote day. Thiam, in a Bloomberg which today focuses on equities of no confidence in her leader- Television interview, said that plans are a bit lower than ex- While Credit Suisse is far there are signs the revamp will bank. Credit Suisse is pledging and credit trading. ship. the decline in the stock repre- pected, the dividend increase from the only European lender bear fruit. Funding costs are set to pay out at least 50% of earn- The bank expects a cost base The currency had tumbled as sents a buying opportunity and in particular,” said Daniel Regli, to suff er this year, it is one of to decline after the bank bought ings to shareholders in 2019 and of 16.9bn francs for this year on much as 1.7% on Monday when that 2019 will be the bank’s fi rst an analyst at Mainfi rst Schweiz. the worst performers. The bank back expensive funding instru- 2020. The bank paid out a divi- an adjusted basis and said that May postponed a vote on her “clean” year after concluding its “The guidance for 2018 is light has abandoned some targets ments held by Saudi Arabia and dend of 0.25 francs per share for for 2019 and 2020 it sees a to- Brexit plan and vowed to step restructuring. and maybe they could have said and continues to suff er from Qatar, while it’s also set to com- 2017 and 0.70 francs the year tal cost base of between 16.5bn up preparations for a no-deal “The capital distribution more about Global markets.” surprise trading losses. Still, plete the wind-down of its bad before. It warned on Wednes- francs and 17bn francs. exit. The currency was at $1.2502 in recent London trading. “I’m staying out of it – it’s basically like trying to pick a All is not lost for Poland’s roller coaster as your commut- er,” said Damien Loh, chief in- Tencent Music sets $1.1bn IPO vestment officer at hedge fund troubled bond market Ensemble Capital in Singapore. “It’s so headline driven and at bottom as markets gyrate Bloomberg “Some of them are actively looking everyone feels they’re entitled Warsaw at other Polish issuance as well,” to give their opinion. So do I Dmuchowski said. really want to be open to the Bloomberg Meanwhile, Asian investors are vagaries of someone’s trading Hong Kong Investors from Canada and Asia attracted by strong economic opinion right now? Not really.” may offer a much-needed relief for fundamentals in a market that offers While they are largely steer- Poland’s fledgling corporate bond diversification for their portfolios. ing clear of the market them- encent Music Entertainment market, hammered by the country’s “New bonds from large issuers would selves, Asia-based fund man- Group and existing investors largest corporate default and probably be their first choice.” agers and analysts see the Traised about $1.1bn after pric- scandals that undermined trust in its Appetite from abroad can’t come at a pound as most likely extending ing a US initial public off ering at the banking watchdog. better time. declines, with the next key level bottom of a marketed range, suc- With global growth set to fizzle Trading in the secondary market has being $1.20. cumbing to the same global market amid rising trade tensions, a unit of been thin for years, with investors The currency has only traded turbulence that’s sapped enthusiasm Canada’s largest lender, Toronto- preferring to buy and hold notes to below that level on two days for stock debuts. Dominion Bank, is looking to invest maturity. since 1985. China’s largest music-streaming in Polish bonds to capitalise on the Things got worse this year, with “We think a no deal prob- service, which is backed by Tencent nation’s fast-expanding economy. demand for domestic bonds tumbling ability has risen from 10% to Holdings, and current holders sold “We have been moving to other parts as local mutual funds keep on around 40%,” Australia & New 82mn American depositary shares at of the world and are considering haemorrhaging cash at a pace last Zealand Banking Group Ltd $13 apiece, according to a statement. local bonds in various countries,” seen in the aftermath of the global senior international economist The shares were off ered at $13 to $15 said Greg Kocik, Toronto-based financial crisis. Brian Martin wrote in a report each. Tencent Music opted to price low- Tencent Holdings headquarters in Shenzhen, China. Tencent Music and managing director at TD Asset Redemptions were triggered by the Wednesday. “Preparations for a er after initially guiding fund managers existing investors raised about $1.1bn after pricing a US initial public off ering Management, who oversees C$5bn collapse of debt collector GetBack SA no deal must intensify. that orders were coming in around the at the bottom of a marketed range, succumbing to the same global market ($3.7bn) in high-yield bonds. “What earlier this year and intensified last Sterling will remain under midpoint of the marketed range. turbulence that’s sapped enthusiasm for stock debuts. attracts us most to places such as month after a corruption scandal that pressure as economic and po- Tencent Music will debut at a valu- Poland is a relatively high rate of GDP led to the resignation of the head of litical uncertainty intensify. A ation of about $21.3bn, falling short of Spotify, which is below its IPO price.” arm of China’s largest social-media growth as well as pent-up demand for the nation’s financial regulator. move towards 1.20 versus the the $23.3bn of Spotify Technology SA, The deal adds to the $8bn raised company, had been one of the year’s some services or goods which may New issuance has been dominated by dollar in coming weeks looks the Swedish peer that’s also an inves- in US fi rst-time share sales by Chi- most anticipated fi rst-time share not be as saturated as it is in some banks this year and there were only plausible.” tor in the Chinese company. Its less- nese companies this year, more than sales. Its growth in China mirrors developed markets.” a few corporate bond sales of over The ongoing ructions mean than-optimal IPO pricing doesn’t double the same period in 2017, data inroads by Spotify in the US, where Support may also come from the 100mn zloty ($26mn). there’s no rest for sterling trad- bode well for mainland companies compiled by Bloomberg show. It’s the streaming has helped music sales grow east. CTL Logistics postponed a sale of ers as it’s growing increasingly considering their own coming-out biggest year for mainland fi rms since at their fastest rate since the 1990s. Investors from Asia have for years 200mn zloty of notes, which would difficult to pick the outcome parties, and follows recent lacklustre 2014, when Alibaba Group Holding The Chinese company however has been active buyers of Poland’s have been the biggest local-currency of the struggle between the UK debuts by the likes of Mogu Inc. Ltd priced the world’s largest IPO, a more diverse business. It focuses on local-currency sovereign debt and corporate bond in the second half of and EU, Stephen Innes, head of “The pricing is primarily due to the data show. In the coming year, three main experiences: Online music some have also bought the euro- the year. Asia-Pacific trading at Oanda weak general market sentiment,” major tech Corps from Uber Tech- through products such as QQ Music denominated covered bonds issued Among deals that could take place in Corp in Singapore, wrote in a said Vey-Sern Ling, an analyst with nologies Inc to China’s ByteDance that also help users discover tunes; recently by local lenders, according the coming months, Cyfrowy Polsat note Wednesday. Bloomberg Intelligence. “The sec- Ltd are said to be considering IPOs online karaoke sites like WeSing, to Piotr Dmuchowski, head of SA favors issuing local-currency “This Brexit tennis match is ondary reason is market scepticism – both to raise capital and off er long- where people can sing virtually with institutional sales at HSBC Bank bonds to refinance 1bn zloty of making a Nadal versus Federer about music streaming platforms, standing backers an exit. friends, celebrities or strangers; and Polska SA. securities. Wimbledon final look like a due to the poor experience with Tencent Music, the online-music live-streamed performances. walk in the park,” Innes said. ECB bond reinvestments have investors guessing twist or tweak

Bloomberg might look like, with possibilities yield declines would be twice as steep. unevenly – from more than €25bn The ECB could opt to realign with in the purchase programme. That Frankfurt ranging from strategic management of Bank of America Merrill Lynch in January to as little as 5bn euros in the new capital key by allowing will prompt a slight shift away from the pot of securities to smaller tweaks recommends a French 10s30s flattening August. reinvestments in countries other than Spanish and Italian bonds and toward that could smooth market stress. trade versus bunds, with Barclays Citigroup also notes that Italy’s where the original bond was issued. It German debt”, says Jamie Murray, The biggest prize for bond investors Operation twist and Morgan Stanley preferring them spending plans and volatile politics could also switch funds between the David Powell and Maeva Cousin, when the European Central Bank makes One ambitious suggestion is to reinvest outright. could mean the ECB would be wise to public-sector and private-sector debt Bloomberg Economics. its final monetary policy decision of the proceeds of maturing debt into Morgan Stanley strategist Elaine Lin save up some purchasing power for it holds. Stock and flow the year might be a clearer plan for its longer-dated securities – reminiscent says a passive Operation Twist, while times of heightened market stress. Jurisdiction changes would be Another question is whether the new €2.6tn ($3tn) asset-purchase portfolio. of the US Federal Reserve’s “Operation anchoring the term premium after The ECB only reinvests maturing bonds “negative” on paper for Italian debt, capital key will be applied only to Despite weak economic data, policy Twist” in 2011 to sell short-dated bonds net asset purchases end could also in the country in which they were first according to Citigroup strategists led by reinvestments – the flow of purchases – makers are likely to confirm on and buy longer-dated. That would allow open some room for normalisation in purchased. Harvinder Sian, but restoring the capital or to the whole stock of bonds, and how Thursday that the quantitative-easing the ECB to keep downward pressure interest rates. Indications that a 2019 That self-imposed guideline is now key is likely to be a very long-term quickly. programme will be capped at the end of on longer-term interest rates to ensure rate hike remains in the cards could complicated by a revision to the capital goal and could create an impression Citigroup says that if the changes are this month. monetary policy stays loose. see the euro rally. key, which is used to calculate how QE that reinvestments would be used for immediately applied to the entire stock, But chief economist Peter Praet, Goldman Sachs Group says only an Reinvestment window purchases should be allocated among markets in need. than that would be bearish for Italian who writes the proposal, has said it’s “explicit” twist would move bond prices The ECB currently reinvests within eurozone member states. TD Securities European rates strategist and Spanish bonds. reasonable to expect clarity on the significantly. Should the ECB implement three months of a bond maturing. It The capital key reflects the economic Pooja Kumra sees a possibility Barclays says that whether these pledge to reinvest maturing debt “for such a strategy unannounced, it would could choose to widen that window output and population of countries. The for tweaks within private-sector diff erences are applied to the flow or an extended period of time.” shave just five basis points off German to more like six or 12 months, giving it regular review that was completed this programmes that could see a skew to the stock, “we deem the changes The Governing Council could choose 10-year yields next year, and 10 basis more flexibility. month reduced the weight of laggards toward reinvestments into corporate small enough not to have a meaningful to save that clarity for next year. Still, points off peers in weaker economies Citigroup says such an adjustment such as Italy and increased the weight debt, “providing a mild credit easing.” market eff ect, especially as we would investors and analysts are trying to such as Italy. Should the ECB announce would help to smooth out bumps of nations with faster growth such as “We expect the ECB’s new capital key expect a phase-in period toward the gauge what the reinvestment plan such a plan, Goldman estimates the next year as bonds are set to mature Germany. will be applied to maturing assets new key.” Gulf Times Saturday, December 15, 2018 11 BUSINESS The next worry for US equities: Shrinking profi t forecasts

Reuters the brakes on estimates for profi t RBC Capital Markets, BNP Paribas 6.7% in 2019, down from an October 1 widely expected to raise interest rates He said analysts also tend to over- New York growth for S&P 500 companies, which and Bank of America Merrill Lynch estimate of 11.6%. in December for a fourth time this year, estimate long-range profi t growth, so had accelerated for much of the year. have forecast 2019 earnings per share “Tech earnings will be there. but the focus is on how many rate hikes investors should not be surprised by Two months ago, 2019 profi t growth growth below the rate compiled by Re- They’re just not going to lead,” said will follow in 2019. reduced forecasts. he growing ranks of stock mar- was pegged at 10.2%; it is now seen at fi nitiv, an aggregate of estimates from Alicia Levine, chief market strategist at Another concern for stocks: compa- Semiconductor-related companies ket Eeyores now have another 8.2%, and growing ranks of doubters analysts covering individual compa- BNY Mellon Investment Management. nies have been warning for a couple of including Micron Technology, Ap- Treason to stay glum: Next year’s reckon growth could slow to half that nies. Strong earnings and economic months about rising wages eating into plied Materials and Lam Research are profi t picture is darkening fast. rate or less. “It may be more in the line Among the deepest profi t down- growth had helped stocks rebound profi t margins. the biggest drags on tech earnings es- Corporate earnings forecasts are of 3 to 4%,” said Paul Nolte, portfolio grades have been for the technology from steep drops in February and kept Some strategists did cite reduced timates for 2019, while DISH Network eroding as the tailwind from the tax cut manager at Kingsview Asset Manage- and communications sectors that had most investors optimistic about mar- profi t growth forecasts as one of the Corp is among the biggest weights on fades and as investors worry the US- ment in Chicago, adding the market carried the market higher through the ket valuations. reasons stocks sold off recently. The communication services, based on Re- China trade dispute could upend global has yet to price that in. latest stages of the bull market. At the time, earnings forecasts were S&P 500 is trading at 15.8 times for- fi nitiv data. commerce more than it already has. “The risk to that estimate is the Tech delivered third-quarter earn- rising fast as companies were ramp- ward earnings compared with 17.3 at Global demand for chips has been Even after the second correction of downside. Right now, the equity mar- ings per share growth of 29.2% from ing up buybacks and spending plans the start of October, according to Ref- slowing, and investors are concerned the year for the benchmark S&P 500 ket is focused more on trade than they a year earlier, but the latest forecasts following hefty tax cuts approved by initiv data. the US President Donald Trump could stock index, many investors wonder are earnings.” for next year’s third quarter see that Congress in late 2017. Others said earnings growth, even at enact tariff s on imports of electronics whether share prices adequately re- Morgan Stanley’s outlook warned of plunging to 2.2% and averaging just Near the end of 2018, the bond mar- a much-reduced rate, will be healthy products manufactured in China that fl ect risks of slower profi t growth. more than a 50% chance of a “modest over 4.9% for all of 2019. ket has been fl ashing warning signs enough to support the market. are made with chips from US compa- Emblematic of the recent turbu- earnings recession,” or two quarters of The recently formed communica- about a possible economic slowdown, “Where we’re getting to is a healthy, nies. lence, last week the S&P 500 slid 4.6%. year-over-year profi t declines. tion services sector, which includes while investors fret about nagging sustainable level from something that Technology and communication The previous week it notched its That last occurred when earnings such heavyweights as Facebook and trade tensions. Strategists now fear was running really very hot,” said services stocks have been among the biggest weekly gain in nearly seven declined for four straight quarters other social media companies facing the economy could slow while interest Jonathan Golub, chief US chief invest- hardest hit this quarter, with the S&P years. starting in the third quarter of 2015. increased regulatory scrutiny, is now rates are still rising. ment strategist at Credit Suisse Secu- 500 technology index down more than Wall Street analysts have slammed In recent weeks, top strategists at expected to deliver profi t growth of Federal Reserve policymakers are rities. 14% since the end of September.

JPMorgan sees global political tumult putting Russia unexpectedly a lid on mega deals

Bloomberg I’m buying two years from now.” London Still, the banker is “cautiously optimistic” about the deal- making environment going into lobal political tumult is 2019. hikes key rate before likely to dampen busi- This year is poised to be the Gnesses’ appetite for second-best ever for M&A, de- mega deals in 2019, according to spite a deceleration in trans- JPMorgan Chase & Co’s global actions in the second half and co-head for mergers and acqui- especially in the fourth quarter, sitions Hernan Cristerna. he said. On the heels of a year that’s The lion’s share of takeovers risk-loaded quarter been one of the best for deal were in the range of $1bn to makers since 2007, concerns $5bn, according to the banker, Bloomberg about a US-China trade war, and there’s going to be a “sig- Moscow Brexit and growing nationalism nifi cant fl ow” of deals in that are likely to trigger a slowdown bracket next year as business ti- in transactions that are bigger tans are “playing off ence as well ussia’s central bank unexpectedly than $10bn, Cristerna said in an as defence.” increased borrowing costs for the interview with Bloomberg Tel- Companies that are likely to Rsecond time this year and signalled evision’s Francine Lacqua and strike deals are those that want it may soon act again as infl ation acceler- Tom Keene. to reinvent themselves or dis- ates amid a tax hike and possible new US His bank ranks third glo- rupt operations, and many busi- sanctions. bally in advising on 2018’s nesses will seek to tap “what’s “In the current conditions, it’s very takeovers, with its scoresheet still cheap sources of funding,” important for us to maintain our con- including the biggest deal of he said in the interview in Lon- servative approach to assessing risks and the year: Takeda Pharmaceuti- don last week. conducting monetary policy,” central cal Co’s $62bn acquisition of Other fi rms are looking to bank governor Elvira Nabiullina said at a Shire Plc. simplify their portfolios to fo- press conference following the decision. “What CEOs and companies cus on their strengths or tap She stressed however that Russia isn’t are cautious of is engaging in synergies to prepare for a rainy in a rate hiking cycle and that tighten- a very large transaction that day, according to Cristerna. ing now is aimed at making it easier to might take a very long time to “It’s going to continue to be a resume planned easing late next year or get approved, if it’s approved at a very active market, but what’s in early 2020. all,” the banker said. going to hurt and what we’re The bank raised its key interest rate a “I know what I’m buying to- going to see less of is the $10bn quarter-point to 7.75%. The majority of day, but I just don’t know what deals,” he said. the 42 economists surveyed by Bloomb- erg had predicted a hold, with only 16 forecasting the hike. The rouble extended declines, as any impact of the tightening LSE names Experian’s Donald was off set by the announcement that the central bank will resume billions of dol- Robert as next chairman lars in foreign currency purchases from January 15 in full. Reuters over the way he handled the de- The tightening will give extra protec- London parture of former chief executive tion to the rouble as it heads into a po- Xavier Rolet. tentially tumultuous quarter after a more Robert joins LSE at a time when than 13% plunge this year. London Stock Exchange Group its clearing house LCH Group is Infl ation is edging closer to the central said yesterday chairman Donald at the centre of debates about bank’s 4% target and could spike next Brydon would be replaced by the impact of Brexit on Britain’s quarter after a value-added tax increase Donald Robert, chairman of the finance industry. kicks in. Discussion over sanctions for world’s biggest credit data firm The European Union and the Russia’s alleged interference in US elec- Nabiullina: Conservative approach to assessing risks is vital. Experian. European Central Bank have been tions is expected to resume again after a Robert, who has been Expe- pushing the clearing house to delay this year. prices are above $40 a barrel. Purchases used only if threats to fi nancial stability may reach 5.2% by the end of March, ac- rian’s chairman and a director at move to the bloc, where they can External factors such as a slowdown in were suspended in August to stem a slide arise, she said. cording to a Bloomberg survey. the Court of the Bank of England regulate it directly. global growth due to a trade war between in the rouble as concern mounted over “The rate hike is aimed at limiting the The rouble traded 0.7% weaker at for more than four years, has LSE, a 300-year-old institution, the US and China, could also hurt Russia sanctions. The recent plunge in global oil possible negative eff ect on the market 66.68 per dollar. The yield on Russia’s been appointed as a non-exec- named Goldman Sachs’ veteran next year, Nabiullina stressed. In addi- prices means the central bank will only from restarting the FX purchases,” said 10-year local-currency bonds was un- utive director and will take over David Schwimmer as chief execu- tion, oil prices could come under pres- have to buy about $201mn a day, below Tatiana Evdokimova, chief economist for changed at 8.7%. from Brydon after the company’s tive off icer earlier this year, and sure because recent output cuts agreed the 2018 average, to meet its targets, ac- Russia at Nordea Bank. “Future moves by The resumption of FX purchases “will annual general meeting in May, tasked him with the challenge of to in a deal between Opec and major oil cording to Bloomberg Economics. the central bank will be highly dependent contain any strengthening of the rouble,” LSE said. helping to navigate Brexit. producers including Russia may not be Some economists had suggested the on how the VAT increase aff ects infl ation said Vladimir Miklashevsky, a strategist Brydon’s exit comes a year Robert will relinquish his roles enough to off set rising US supply and central bank might restart the buying expectations.” at Danske Bank A/S in Helsinki. “Given after activist hedge fund TCI at Experian and the Bank of Eng- softening global demand, she said. slowly, with reduced volumes initially, Annual infl ation accelerated for a sixth the current uncertainty in external fac- unsuccessfully tried to oust him land once he joins LSE. The central bank typically buys foreign but Nabiullina said it will begin with the month to 3.9% as of December 10, the tors and the central bank’s conservatism, currency to build up reserves when oil full amounts. Future suspensions will be central bank said in today’s statement. It at least one hike in 2019 is highly likely.” Hedge funds rent a lifeline to stay afloat in EU post-Brexit

Bloomberg the so-called passport that gives them withdrawal from the EU, the Financial number is far higher if you look at funds London the right to do business in the single Conduct Authority said the largest managed by UK managers,” he said. market. asset managers are nearly finished Vittoria said Mirabella’s client base has “Brexit has been a huge benefit for setting up operations in Europe to increased to 44 managers from 32 in With Brexit threatening to lock some UK hosting firms,” said Joe Vittoria, chief avert any disruption in their business. mid-2017, and he has added 12 staff to hedge funds out of Europe, a cottage executive off icer of one such company, Smaller firms with no presence in the handle the new business. industry is growing to help keep the Mirabella Group, which has a unit in area have fewer options to hold on In an interview in his off ice in Mayfair, door open. Malta. “In this period of uncertainty, to their clients, and “may have to rely London’s traditional hedge fund hub, Call it the rental business for hedge- why buy something when you can rent on third parties for the cross-border Brooklands Fund Management’s fund management. until things become more clear?” management and marketing of their Mike Williams said his three-year-old Small hedge funds are turning to firms Under the Brexit deal that UK Prime funds,” the FCA said. platform is now considering setting up in the European Union that can handle Minister Theresa May reached with The hosting firms range from stand- a second off ice in Paris to ensure his a lot of their back-off ice operations such her counterparts, most cross-border alone firms such as KB Associates and clients can raise money from European as risk management and compliance, financial services will be based on an Privium Fund Management to units of investors going forward. enabling them to meet regulators’ arrangement known as equivalence, major corporate groups. Mirabella, for “In case of a doomsday scenario, we conditions to do business there. which involves recognition by both example, is part of ACA Compliance would open an off ice in the EU for sure,” They’re leaving the job of picking stocks sides that the other’s rules and Group, a US and UK consulting Williams said. and bonds with traders back in London. supervision are as robust as their own. business. It can typically take a few months to Battered by volatile markets, fleeing But May’s agreement on the future KB’s managing principal, Mike Kirby, get up and running on one of these investors and spiralling costs, money relationship between the UK and EU said the firm has recently seen an third-party platforms, so crunch time managers can ill aff ord to lose access still has to be ratified by Parliament, an increase in UK funds considering using starts now. to the $20tn managed by pension outcome that’s increasingly uncertain. equivalence is narrow, and it can be are asking for a solution where they KB in Dublin to support funds in Ireland. Prices for the service vary, ranging funds, insurers and other institutional The EU already has equivalence-based revoked on short notice. can carry on living in London, and And the path from London to Dublin between 8 to 20 basis points over investors in the rest of the EU. That agreements on services such as “Firms are now coming to us saying, ‘I still utilise the passports” in the single is well trodden. “Something between assets under management, with a could happen after Britain withdraws clearing with countries including the can’t build my business around this,”’ market, he said. 40 and 45% of hedge funds are yearly minimum. Others charge a flat from the bloc, and UK-based funds lose US and Japan. But market access under Vittoria said of equivalence. “They In its impact assessment of the UK’s administered in Dublin, and that fee that can run to $200,000 a year. Saturday, December 15, 2018 GULF TIMES BUSINESS

QSE WEEKLY REVIEW Bourse remains bearish on severe selling in telecom, consumer goods

By Santhosh V Perumal week which saw Qatar ruling out the market capitalisation to QR589.635bn insurance and realty gained 1.98% and However, Qataris net selling plunged to shrinkage in trade volume to 3.53mn Business Reporter introduction of value added tax in this week. The market witnessed a 0.07% respectively this week. QR14.82mn compared to QR203.69mn shares, 26% in value to QR136.9mn and 2019. total volume of 1,028 QATR (Masraf The banks and financial services the week ended November 29. 11% in deals to 3,016. Three of the five days were under profit Al Rayan sponsored exchange traded constituted 43% of the total volume, Non-Qatari individuals were net buyers The banks and financial sector’s trade Severe selling in the telecom and booking pressure this week which fund or ETF) valued at QR0.03mn trade realty (19%), industrials (11%), telecom to the tune of QR8.46mn against net volume tanked 15% to 13.4mn equities, consumer goods led to a 142-point saw no trading of treasury bills and across nine transactions and as many (10%), transport (9%), consumer goods sellers of QR19.82mn the previous week. value by 31% to QR421.61mn and decline in the Qatar Stock Exchange this sovereign bonds. as 1,671 QETF (Doha Bank sponsored (5%) and insurance (2%); while in terms Total trade volume fell 27% to 31.17mn transactions by 31% to 7,102. week which saw Doha present QR4.3bn About 82% of the stocks were in ETF) valued at QR0.17mn change hands of trade turnover, banks and financial shares, value by 30% to QR871.73mn There was 2% decline in the consumer surplus budget for 2019. the red with major losers being across seven deals this week. sector’s share was 48%, industrials and transactions by 26% to 18,359 this goods sector’s trade volume to 1.69mn Domestic institutions were increasingly Vodafone Qatar, Ooredoo, Doha Bank, The Total Return Index shed 1.34%, (16%), real estate (12%), consumer week. stocks, 26% in value to QR67.17mn and bearish and there was substantially Alijarah Holding, Salam International All Share Index by 1.14% and Al Rayan goods (8%), telecom and transport (7% The real estate sector reported 51% 19% in deals to 1,221. weakened buying interests of their Investment, Aamal Company, Mesaieed Islamic Index (Price) by 1.64% this each), and insurance (3%) this week. plunge in trade volume to 5.92mn The transport sector’s trade volume foreign counterparts this week which Petrochemical Holding, Mazaya Qatar week which saw banks and real estate Domestic funds’ net profit booking equities, 51% in value to QR102.88mn was down 2% to 2.65mn shares, value saw Qatar decide to establish a general and Milaha; even as Nakilat, Ezdan and segment together account for about increased considerably to QR48.64mn and 45% in deals to 3,347. by 6% to QR58.82mn and transactions tax authority. Qatar Insurance were among gainers 62% of total trade volume. compared to QR11.29mn the previous The telecom sector’s trade volume by 12% to 1,117. Telecom and consumer goods this week. The telecom index plummeted 4.4%, week. plummeted 37% to 3.23mn stocks and However, the insurance sector saw counters saw higher than average Islamic stocks were seen declining consumer goods (1.6%), transport Foreign institutions’ net buying declined value by 23% to QR58.41mn, while 29% surge in trade volume to 0.76mn selling pressure as the 20-stock faster than the other indices in the (1.33%), banks and financial services significantly to QR55.01mn against transactions were up 2% to 1,767. equities, value by 17% to QR25.94mn Qatar Index settled 1.34% lower this market, which saw about 1% erosion in (1.14%) and industrials (0.97%); even as QR234.67mn a week ago. The industrials sector saw 27% and deals by 36% to 789.

France plans Renault US consumer spending CEO hunt as board frays over Ghosn

Reuters would be available to resume his strengthening in boost Paris duties.” French offi cials have already begun listing possible candi- he French government is dates to replace Ghosn as CEO, seeking candidates to re- three sources close to the com- Tplace Renault’s embattled pany said. boss Carlos Ghosn, sources told Senior Toyota executive Di- to economic growth Reuters, as board members be- dier Leroy will be considered, gan to voice doubts about keep- one said. “There’s nothing of- Core retail sales increase 0.9% ing him in offi ce following his in- fi cial yet but the government is in November; October core retail dictment in Japan for suspected working on a lineup,” he said. sales rise revised up to 0.7%; overall misconduct. “They’re ready to turn the page.” retail sales gain 0.2% in November; At a meeting on Thursday, A fi nance ministry offi cial de- industrial production rises 0.6% in Renault directors were briefed clined to comment. November on an investigation by alli- The government, Renault’s ance partner Nissan that led to biggest shareholder with a 15% Reuters Ghosn’s arrest last month. stake and two board seats, typi- Washington He was charged this week over cally plays a major role in suc- the company’s failure to declare cession planning. $43mn in deferred income he “I have no comment on spec- US consumer spending gathered mo- had arranged to receive. ulation, and I am 100% con- mentum in November as households Nissan fi red Ghosn as chairman centrated on my job at Toyota,” bought furniture, electronics and a range three days after his detention, but Leroy told Reuters. of other goods, which could further al- Renault has resisted pressure to The boardroom crisis has lay fears of a signifi cant slowdown in the dismiss him, as the scandal strains shaken the Renault-Nissan- American economy even as the outlook their carmaking alliance. The Re- Mitsubishi alliance, with Nissan overseas continued to darken. nault board on Thursday stuck by CEO Hiroto Saikawa calling for The upbeat data from the Commerce its earlier decision to keep him on, changes to weaken the French Department yesterday bolstered expec- with its lead director standing in parent’s control. tations that the Federal Reserve will raise as interim chairman and deputy Renault owns 43.4% of Nis- interest rates for a fourth time this year CEO Thierry Bollore leading op- san, whose reciprocal 15% stake at its December 18-19 policy meeting, erations. in its French parent carries no despite moderating infl ation and tighter In a statement issued by Re- voting rights. fi nancial market conditions. nault after the meeting, the Nissan in turn controls Mit- It also stood in stark contrast to reports board “noted that, at this stage, subishi via a 34% holding. from China showing a dramatic fall off in it does not have information Blair’s board intervention was retail sales in the world’s second-largest concerning Carlos Ghosn’s de- echoed during the meeting by economy and from Europe where a key fence.” two other independent direc- measure of business activity expanded at During the fi ve-hour ses- tors as well as Renault staff rep- its slowest rate in four years. sion, however, several directors resentatives, two sources said The US central bank has hiked rates led by Cherie Blair, wife of the — with some also voicing mis- three times this year. British former prime minister givings over management’s han- “Today’s report shows Fed offi cials Tony Blair, began to express im- dling of the crisis. consumers just aren’t confi dent, they patience with that position, two At the risk of worsening ten- are also putting their money where the Shoppers are reflected in the window of a store at the Third Street Promenade in Santa Monica, California (file). US consumer people with knowledge of the sions, Bollore instructed Nis- mouths are and buying enough goods to spending gathered momentum in November as households bought furniture, electronics and a range of other goods, which could matter said. san to refrain from contacting keep the economy humming,” said Chris further allay fears of a significant slowdown in the American economy even as the outlook overseas continued to darken. “What she said, in eff ect, was Renault directors ahead of the Rupkey, chief economist at MUFG in that we can’t remain in this situ- meeting, Reuters reported on New York. curve had stoked fears of a recession. ber. In a second report yesterday, the Fed viously reported to have surged 0.8%. ation forever,” one source said of Tuesday, as the Japanese car- Retail sales excluding automobiles, But worries over the economy’s health said industrial production rebounded Sales at service stations tumbled 2.3% Blair. “At some point you need maker sought to share its fi nd- gasoline, building materials and food were eased on Thursday after govern- 0.6% last month after falling 0.2% in last month, the biggest drop since May to move forward and move on.” ings. Directors had also clashed services surged 0.9% last month after an ment data showed the number of Ameri- October. 2017, after rising 3.2% in October. A Renault spokesman said he with Renault managers over upwardly revised 0.7% increase in Oc- cans seeking unemployment benefi ts fell Industrial output was driven by a 3.3% Auto sales gained 0.2% after acceler- could not comment on board their right to hire independ- tober. These so-called core retail sales, back to a near 49-year low last week. surge in utilities production as an unsea- ating 1.5% in the prior month. proceedings. ent board counsel with access which correspond most closely with the Gross domestic product estimates for sonably cold November boosted demand Sales at building material stores In a statement to Reuters on to Nissan’s fi ndings, two other consumer spending component of gross the fourth quarter are around a 2.4% rate. for heating. Mining production rose 1.7% slipped 0.3%. Receipts at clothing stores Friday, Blair said she was “sad- people said. domestic product, were previously re- The economy grew a 3.5% pace in the last month, but manufacturing output dropped 0.2% after jumping 1.3% in Oc- dened that the confi dentially Company attorneys answer- ported to have gained 0.3% in October. July-September period. was unchanged. tober. The drop in clothing sales prob- of board meetings has been ing to Mouna Sepehri — who Economists polled by Reuters had Spending is being boosted by a tight- Overall retail sales, however, rose only ably refl ects deep discounting by retail- breached in particular in respect doubles as board secretary and forecast core retail sales rising 0.4% last ening labour market, which is starting to 0.2% in November as cheaper gasoline ers seeking to lure shoppers. Online and of your entirely inaccurate de- head of Ghosn’s CEO offi ce — month. November’s increase in core re- spur faster wage growth, lower taxes and undercut sales at service stations. mail-order retail sales surged 2.3%, the scription of my contribution.” have so far declined to share the tail sales and upward revisions to Octo- moderate infl ation. Gasoline prices have dropped about 40 largest gain in a year, after increasing She added: “I can confi rm that report with directors or their ber’s data suggested a brisk pace of con- The dollar hovered near a 19-month cents per gallon since October, according 0.8% in October. I, along with other members of lawyers, citing the secrecy of the sumer spending in the fourth quarter. peak against a basket of currencies. to the US Energy Information Adminis- Receipts at furniture stores rebound- the board, asked a number of investigation. Consumer spending, which accounts US Treasury prices rose, while stocks tration. ed 1.2%. Sales at electronics and appli- questions of Renault’s lawyers Under French government for more than two-thirds of the US econ- on Wall Street fell on fears of a global Oil prices have fallen by a third since ance stores increased 1.4%. Spending concerning their knowledge of pressure, Ghosn had been ex- omy, increased at a 3.6% annualised rate economic slowdown. the start of October amid concerns about at hobby, musical instrument and book the Japanese legal system, their ploring a deeper tie-up or even a in the July-September quarter. Consumer spending in the fourth oversupply and a slowing global econo- stores increased 0.4%. But sales at res- estimation as to how long Ghosn full merger between the alliance A sharp sell-off on Wall Street and quarter could also get a boost from a my. Retail sales increased by an upwardly taurants and bars fell 0.5% after rising will be held custody, and their partners, despite strong reserva- partial inversion of the US Treasury yield surge in demand for utilities in Novem- revised 1.1% in October. They were pre- 0.6% in October. best estimation of when Ghosn tions at Nissan. LVMH splashes out on luxury hotels with $3.2bn Belmond deal

Reuters The transaction follows a wave of deals in the Belmond posted earnings of $140mn before Paris luxury hotels sector, including AccorHotels’ interest, taxes, depreciation and amortisa- purchase of FRHI Holdings, the parent of the tion (EBITDA) on revenue of $572mn in the 12 Fairmont and Raffl es hotels. months to September 30. uxury goods maker LVMH has agreed to “While some investors may question the ac- Half of revenue comes from Europe and 20% buy Belmond, the owner of hotels includ- quisition, which appears to lie outside LVMH from North America. Ling Venice’s landmark Cipriani, for a total group’s core operations, we believe it is consist- LVMH shares were down 0.9% at 253.45 of $3.2bn to raise its profi le in upmarket hospi- ent with its long-term strategy focused on of- euros in a weak European stock market while tality. fering the consumer a full spectrum of luxury Belmond shares jumped 40% in New York to LVMH, the fi rm behind fashion labels Louis experience,” Berenberg analysts said in a re- $24.74. Vuitton and Christian Dior, already has hotels search note. RBC Capital Markets analysts said the price including the Cheval Blanc in the prestigious Guiony said the deal refl ected LVMH’s belief of the deal — at 5.6 times recent sales and 22.9 Courchevel ski resort in the French Alps, as well that “the future of luxury is in luxury goods and times recent EBITDA — looked “optically high”, as Bvlgari hotels. in luxury experiences”. but added: “Belmond owns a unique portfo- The Belmond deal is LVMH’s largest since it It also pushes LVMH further into new luxury lio of trophy real estate assets, that will allow spent €4.3bn in 2011 to buy Bvlgari and €6.5bn services at a time of growing concern that Chi- LVMH to increase its exposure to experiential in 2017 to gain full control of Christian Dior. nese demand for high-end fashion and hand- luxury”. It will have a limited impact of its debt and bags will start waning amid worries about the LVMH ended up paying a multiple of 19 times boost 2018 earnings per share, before synergies health of the world’s second-largest economy Belmond’s expected EBITDA for next year, ac- by just 0.1%. LVMH will “reach critical mass in and potential damage from Washington’s pro- cording to Refi nitiv data. the ultimate luxury hotel world with one single A French luxury group Louis Vuitton store is seen in Paris. LVMH has agreed to buy Belmond, the tracted trade spat with Beijing. Bigger hotel chains like Hilton and Marriott acquisition,” fi nance chief Jean-Jacques Guiony owner of hotels including Venice’s landmark Cipriani, for a total of $3.2bn to raise its profile in LVMH said it would pay $25 per Belmond International trade on forward multiples of just told analysts during a call. “The priority is to upmarket hospitality. share, a 40% premium to Thursday’s closing over 12 times. develop and improve the profi tability of these price. Belmond owns, partly owns or manages 46 exceptional brands and nurture complemen- ing the only hotel within the Machu Picchu cit- Palace in Rio de Janeiro, moving LVMH further The deal, expected to close in the fi rst half of luxury hotels, restaurants and train and river- tarity with the LVMH group brands,” he added. adel in southern Peru, Hotel Splendido in Por- into the fast-growing “experiential” high-end 2019, values Belmond’s equity at $2.6bn, and cruise properties located in exotic and distinc- The acquisition will give it properties includ- tofi no on the Italian riviera and the Copacabana travel and hospitality sector. the group, including debt, at $3.2bn. tive destinations worldwide.