BOJ GOVERNOR | Page 2 RENAULT CHIEF | Page 6 Kuroda is Ghosn vows chosen for ‘irreversible’ another term Nissan ties

Saturday, February 17, 2018 Jumada II 1, 1439 AH WEAKEST 3 MONTHS SINCE APRIL 2017: Page 12 UK shoppers’ New GULF TIMES Year diets squeeze BUSINESS January retail sales Hackers stole $6mn in attack Oil edges up on equities’ on SWIFT system: Russian central bank

Reuters rebound and weak dollar Magnitogorsk, Russia Rebound in global equities producers including Russia have been supports oil; pares gains as dollar restraining production by 1.8mn bar- Unknown hackers stole 339.5mn recovers from 3-year low; soaring rels per day (bpd) to prop up prices. roubles ($6mn) in an attack on US production keeps oil under The arrangement expires at the the SWIFT international payments pressure end of 2018. However, surging US messaging system in Russia last year, production is off setting those eff orts. the Russian central bank said yesterday. Reuters US crude output hit a record The disclosure, buried at the bottom of New York 10.27mn bpd last week, the Energy a central bank report on digital thefts at Information Administration said, Russian banks, is the latest in a string of making it a bigger producer than attempted and successful cyber heists il prices edged higher yester- Saudi Arabia. using fraudulent wire-transfer requests. day as a rebound in the global A little-noticed addition to the US The central bank said it had been sent Oequities market and a weak budget deal approved last week was information about “one successful dollar supported crude’s recovery also expected to further boost US attack on the work place of a SWIFT from last week’s slide. crude production by more than tri- system operator. “The volume of Brent crude was up 57 cents, or pling a tax credit to producers for in- unsanctioned operations as a result 0.8%, at $64.90 per barrel by 11:17am jecting carbon dioxide back into the of this attack amounted to 339.5mn EST (1617 GMT). The global bench- earth to increase output. roubles,” the bank said. mark was on track to end the week up The US rig count, an early indicator The central bank declined to provide more than 3% after a decline of more of future output, last week jumped to further details. than 8% last week. its highest in three years. US West Texas Intermediate Drillers added seven oil rigs in the The disclosure is the latest crude rose 29 cents to $61.65, having week to February 16, bringing the to- in a string of attempted and touched a one-week high of $61.89. tal count up to 798, the highest level successful cyber heists using WTI was set for a weekly gain of since April 2015, General Electric fraudulent wire-transfer about 4% after losing nearly 10% last Co’s Baker Hughes energy services requests week. “Equities and the dollar are fi rm said in its closely followed report propping things up for now,” said Jim yesterday. That was the fi rst time A spokeswoman for SWIFT, whose Ritterbusch, president of Ritterbush since June that drillers added rigs for messaging system is used to transfer & Associates. four consecutive weeks. trillions of dollars each day, said the World shares were set for their best An oil platform with its flame boom lit nine miles off the Long Beach, California (file). US West Texas Intermediate crude The US rig count, an early indica- company does not comment on specific week of gains in six years after two rose 29 cents to $61.65 yesterday, having touched a one-week high of $61.89. tor of future output, is much higher entities. consecutive weeks in the red, while than a year ago when 597 rigs were “When a case of potential fraud is the dollar hit its lowest since 2014. ground to trade 0.3% higher, limiting ties. Also supporting oil prices was a aimed to draft an agreement on a long- active as energy companies have reported to us, we off er our assistance The dollar slipped to a three-year gains in the oil market. statement from the UAE energy min- term alliance by the end of the year. continued to boost spending since to the aff ected user to help secure its low against a basket of currencies A weaker dollar often boosts oil and ister late on Thursday saying oil pro- The Organisation of the Petroleum mid-2016 when crude prices began environment,” said the spokeswoman, yesterday but later regained some other dollar-denominated commodi- ducers led by Saudi Arabia and Russia Exporting Countries and some other recovering from a two-year crash. Natasha de Teran. A central bank spokesman quoted Artem Sychev, deputy head of the regulator’s security department, as saying the hackers had withdrawn US spending bill expands carbon tax credit, boosting oil producers the money and this was “a common scheme, when they take control of a Reuters years to prolong output from traditional oil more than 2bn cubic feet of carbon dioxide from initial traditional drilling, according to the computer.” Housten wells, also is being tested by Oxy and others as each day into traditional oil wells, many of US Department of Energy. Brussels-based SWIFT said late last a way to speed more oil production from shale which came online more than 75 years ago. “This legislation helps to ensure domestic year digital heists were becoming wells. The method harnesses the carbon dioxide energy security,” Vicki Hollub, Oxy’s chief increasingly prominent as hackers A little-noticed addition to the US budget President Donald Trump last week signed the produced during the extraction of oil or from executive, said in a statement. use more sophisticated tools and deal approved last week will help Occidental spending plan into law. electric-power plants, and forces it back into EOR increases a producer’s costs, but because techniques to launch new attacks. Petroleum Corp and other oil producers by It boosts for 12 years an existing tax credit the fields. EOR wells pump consistently for decades, their In December, hackers tried to steal more than tripling a tax credit for injecting to $35 per metric tonne of carbon dioxide That helps drive more oil to the surface. value over time can exceed shale wells, whose 55mn roubles from Russian state bank carbon dioxide back into the earth to increase injected underground, up from $10 per ton. The technique, one of several enhanced oil production quickly tapers off . Globex using the SWIFT system, and crude output. “This will be an economic driver for our recovery (EOR) strategies that can prolong Oxy has not published anticipated financial digital thieves made off with $81mn The tax-credit expansion, although supported nation,” said North Dakota Senator Heidi the productive life of oilfields, underpins benefits from the tax credit’s expansion, and from Bangladesh Bank in February by environmentalists and energy producers, Heitkamp, a Democrat who had pushed for more than 5% of US oil output, or about Wall Street analysts who track the company 2016. had failed to move out of Congress during the the credit’s expansion with a bipartisan group 450,000 barrels per day, according to have not off ered any estimates. SWIFT has declined to disclose the 2016 presidential election. of senators. energy consultancy Advanced Resources But partly because of its carbon operations, number of attacks or identify any Its passage now likely will further boost already ”It will hopefully push a lot of innovative International. Oxy was able to raise its dividend during the oil victims, but details on some cases have surging US oil output in a year that production technologies across a range of industries, not EOR can help firms extract between 30% and price downturn from 2014 to 2016. become public, including attacks on is forecast to hit 11mn barrels per day. just in coal or oil.” 60% of all the oil held in a reservoir. Oxy this week swung to a fourth-quarter profit Taiwan’s Far Eastern International Bank The injection process, used for more than 40 Oxy, Denbury Resources Inc and others inject That’s far more than the 10% usually recovered that met Wall Street’s expectations. and Nepal’s NIC Asia Bank.

Powell seeks to bury era of Fed ‘barons’ in tapping wider staff

Bloomberg probably a good idea.” Powell, who was Powell’s requests, either by providing formation that might infl uence mon- ter Yellen became chair, some measure Washington sworn in as chairman on February 5, is information themselves or by quickly etary policy. They also had an interest of internal dissent was even encour- by many accounts a voracious reader rounding up the right economists to in managing resources, and requests aged. of economic research. At the same meet with the boss and answer his from policy makers that circumvented In early 2014 the Fed’s internal web- erome Powell is the fi rst Federal time he lacks the academic grounding questions. their offi ces could disrupt that. In his site added an “alternative view” page, Reserve chairman in more than a of PhD economists who have recently With these steps, Powell is taking day, Truman conceded, that sometimes where individual economists can air Jdecade to have any background in led the Fed, such as Ben Bernanke and aim at the last vestiges of the Fed’s an- made for confl ict. their disagreements with offi cial staff the private sector. That could explain Janet Yellen. Perhaps in recognition of cient régime, a system that once gave “You could argue there was tension forecasts and positions. Also under changes he’s implemented in his fi rst that potential weakness, he’s keen to enormous infl uence to the directors of between division directors as gatekeep- Yellen in mid-2016, the staff created weeks on the job. engage staff on topics that grab his at- the three key economic research divi- ers and division directors as responsible and the Board of Governors had ac- Powell has made it clear within the tention. sions — monetary aff airs, research and for knowing who’s doing what,” he said. cess to an internal system known as the institution he wants more direct in- Spur-of-the-moment exchanges statistics, and international fi nance. Others have a less generous take on “data and analysis hub” where staff ers teraction with the Fed’s army of PhD between the chair and junior staff ers Even today, though it’s uttered in jest those days. To Alan Blinder, who served share data, memos and papers about economists, and on a faster and more Powell: Fast, informal. would have been largely unthinkable at as often as in fear, those directors bear a as vice chairman from 1994 to 1996, their topics of study. informal basis than sought by his pred- the Fed a generation ago. Even in recent famous nickname: the barons. the barons enforced a rigid order that Powell’s recent moves, which he ecessors, according to two Fed insiders Former Fed vice-chairman Donald years, a request for information would “That came from the head of person- over-fi ltered information, suppressed initiated even before being sworn in as familiar with the moves and who asked Kohn said he had no direct knowledge often result in a carefully vetted formal nel, who hated us,” said Edwin Truman, internal debate and frequently kept Fed chair, are aimed at nudging things fur- not to be identifi ed. of Powell’s changes, but they struck presentation that might take weeks to director of the division of international governors in the dark about important ther, creating a more relaxed and ongo- The changes are more evolution than him as positive steps that could help prepare and an hour to deliver. fi nance from 1977 to 1998, the hey-day matters. ing exchange of knowledge. revolution, the people said. They build the new chairman as he attempts to Powell, who spent a dozen years in of the barons. “He invented this term “Information is control,” Blinder Kohn, who served as both a baron on other steps taken in recent years to shepherd the US economy through an banking and private equity, has no pa- because he had so much diffi culty deal- said. “If some of the governors don’t and policy maker, said he hoped the relax a once-rigid system that strictly uncertain period of low unemploy- tience for that, the two current insiders ing with us.” know about something and the staff division directors would embrace Pow- controlled the fl ow of information ment, low infl ation and still tepid, but said. Nor does he want staff to over- The barons’ power stemmed mainly does, that’s an advantage in terms of ell’s changes. between politically appointed policy quickening economic growth. invest their time in a complex produc- from their role as unchallenged gate- moving infl uence from the governors to “The whole point is to help decision makers and the rank-and-fi le staff . “I don’t know that this is about get- tion when all he needs is a substantive keepers, overseeing the fl ow of infor- the staff .” makers come to the best possible de- Still, several former senior Fed offi cials ting alternative perspectives as much and frank discussion with just the right mation between the decision makers on Under Bernanke, the barons’ grip cisions, and staff should do whatever said, it’s a notable shift in the way it as it is about opening the funnel a bit,” expert — but right now. the Board of Governors, including the began to loosen. It became easier for seems to contribute to that outcome,” fl attens the central bank’s traditional Kohn said. “Loosening it up and also To accommodate this, division di- chair, and the staff . governors to get an economist assigned he said. “Diff erent decision mak- hierarchy and further liberalises inter- getting alternative perspectives and rectors have each designated one or two That task had a practical side. It exclusively to them to serve as an as- ers have diff erent needs. If this is Jay’s nal communication. having informal conversations, that’s lieutenants charged with responding to helped to manage the deluge of in- sistant and guide to the institution. Af- need, they should adjust to it.” Gulf Times 2 Saturday, February 17, 2018 BUSINESS

Japan’s Japan reappoints Kuroda for exports seen another term as BoJ governor rising in Reuters January Tokyo

Reuters apan reappointed central bank chief Tokyo Haruhiko Kuroda for another term Jyesterday, and chose an advocate of bolder monetary easing as one of his apan’s exports were ex- deputies in a strong signal to investors pected to rise in January that policymakers are in no rush to turn Jfor a 14th straight month, off a sweeping stimulus programme. a Reuters poll showed yester- The selection of the new BoJ leader- day, as robust overseas demand ship comes amid heightened anxiety in supports Japan’s economic re- Japanese and global fi nancial markets, covery. fuelled partly by speculation over how Exports were seen likely to quickly major central banks will wind grow 10.3% in January from a down their crisis-era policies. year ago, the poll of 20 econo- In a widely expected move, the gov- mists found, thanks to brisk ernment nominated Kuroda, a 73-year- shipments of cars and semi- old former fi nance ministry bureaucrat, conductor production equip- to serve another fi ve-year term when the ment. current one ends in April. Imports were seen rising That would make him the longest 8.3% from a year earlier, result- serving BoJ head in half a century, a sign ing in a ¥1tn ($9.46bn) trade of Premier Shinzo Abe’s confi dence in deficit, the poll found. the governor’s ability to pull Japan’s “We expect exports will con- economy out of stagnation. tinue their expansion. There Tokyo stocks rose on relief the BoJ will may be a slowdown in demand maintain its huge stimulus – a corner- for the semiconductor-related stone of the premier’s “Abenomics” re- products that boosted exports fl ationist policies – even as other major in 2017 but they will stay at central banks head towards the exit. high levels led by demand from “In the short term, the BoJ gave the China,” a Mitsubishi Research stock market relief by not derailing Institute economist said in the Kuroda’s monetary policy. survey. It sent a message to the market that “On the other hand, the US the main part of Abenomics will not administration may strengthen change,” said Norihiro Fujito, senior in- its stance on trade protection- vestment strategist at Mitsubishi UFJ ism towards the mid-term Morgan Stanley Securities. elections (in late 2018), so However, many market watchers caution will be needed over fear the BoJ’s massive money printing whether protectionism will af- project, which is about to enter its fi fth fect Japan’s auto exports.” year, is increasingly untenable, distort- Bank of Japan governor Haruhiko Kuroda attends a financial committee meeting of the lower house of the parliament in Tokyo yesterday. Japan’s government nominated The finance ministry will ing fi nancial markets and hurting the Haruhiko Kuroda for a second term as central bank governor, handing the veteran finance chief more time to battle deflation and kick-start the world’s number-three economy. publish the trade data at country’s banks. 8:50am Tokyo time on Monday. While growth in the world’s third- policy anytime soon given rises in the reliant economy. His calls for more radi- People who work with him or know While Amamiya is unlikely to rock the The poll also found the na- largest economy has improved thanks yen. cal monetary steps drew Abe’s atten- him well say Kuroda appears lively and boat, Wakatabe may resist any attempts tionwide core consumer price largely to stronger global demand, in- Contrary to market expectations, the tion and brought him to the BoJ helm in fi t for another term despite his age and to signal a future withdrawal of stimu- index (CPI), which includes oil fl ation remains far short of the BoJ’s 2% next step could be ease further if yen 2013, where he worked with Amamiya the demanding schedule, which involves lus. products but excludes volatile target. rises persist,” said Yasunari Ueno, chief to deploy a sweeping asset-buying pro- frequent overseas trips and visits to par- In an interview with the Nikkei last fresh food prices, was seen ris- The government also nominated Ma- market economist at Mizuho Securities. gramme. liament to answer lawmakers’ questions. November, Wakatabe said the BoJ needs ing 0.8% in January from a year sazumi Wakatabe, a 52-year-old Waseda “Wakatabe will tip the board’s balance A workaholic who does not play golf “He’s very lively and energetic,” said stronger measures to beat defl ation and ago, after a 0.9% gain in De- University academic and an advocate of towards more easing.” or drink much – making him a rare breed one of the people. “He seems ready to should accelerate its asset purchases. cember. aggressive easing, for BoJ deputy gover- The other deputy governor post among Japanese policy elites – Kuroda stay on.” That would require reversing a deci- Contributions to the core nor. went to BoJ executive director Masay- has proved to be a safe hand for the Kuroda will face challenges diff erent sion made in 2016 to abandon a target CPI index from the prices of The choice of Wakatabe could compli- oshi Amamiya, a veteran central banker government with his unwavering com- from fi ve years ago in his second term. for asset purchases and contradict the energy-related items such as cate Kuroda’s task of engineering a slow known for masterminding various mon- mitment to keep the money spigot wide The yen’s ascent to 15-month highs mainstream approach of BoJ offi cials, electricity and gas likely shrank but steady exit from the BoJ’s stimulus. etary policy steps. open. has drawn verbal intervention from the who believe the bank’s next move should in January from the previous All the same, it could also help the The nominations need approval by He befriended many overseas poli- fi nance minister, a sign Abe’s govern- be a withdrawal of stimulus, not an ex- month, poll respondents said. BoJ dispel market speculation it may both houses of parliament, which is a cymakers during his stint as head of the ment may pile pressure on the BoJ to pansion. The government will publish dial back stimulus earlier than expected, near certainty as Abe’s ruling coalition Asian Development Bank from 2005 to ramp up stimulus if yen rises persist. “There are two hurdles Kuroda must the nationwide and Tokyo CPI and allow it to shift gear back toward has a comfortable majority. 2013. And yet, the BoJ has little ammunition overcome before seeking an exit. data on different dates starting more easing if continued gains in the As a former top Japanese currency Former Federal Reserve chairman Ben left. With the cost of prolonged easing One is a strong yen and another this month. yen threaten Japan’s economic recovery, diplomat, Kuroda had criticised the BoJ Bernanke praised Kuroda’s eff orts dur- rising, Kuroda’s biggest task would be to is Abe’s pressure on the BoJ to con- February core consumer some analysts say. for not doing enough to ease the pain a ing a visit to Tokyo last year, saying he engineer a smooth exit from his radical tinue easy money policy,” said Ueno of prices in Tokyo are now due on “The BoJ is in no position to tighten strong yen was infl icting on an export- regretted his criticism of past BoJ policy. stimulus programme, analysts say. Mizuho. March 2.

WhatsApp to launch ‘full feature’ money transfer service in India India swings to discount as gold price jump hurts demand WhatsApp will launch a “full feature” inter-bank money Reuters rebound in buying, the World Gold Council transfer service in India, its big- Bengaluru/Mumbai (WGC) said this month. gest market, after a test involv- India’s gold imports in January dropped 37% ing a million users, National from a year ago to their lowest in 17 months. Payments Corp of India said. hysical gold was sold at a discount in In- Demand in rest of Asia picked up in the fi rst Yesterday’s statement marks dia this week for the fi rst time in three half of the week as people bought gold ahead of the de facto off icial launch of Pweeks as demand for the metal slumped Lunar New Year. WhatsApp’s new service as due to a jump in local rates, while the Lunar “It was a little bit later than expected. NPCI is the body set up by the New Year holiday capped buying at the end of But people were happy to see the demand central bank and lenders to the week elsewhere in Asia. coming in fi nally ahead of the Lunar New Year. oversee payment services. Demand was down to a quarter its usual lev- There was solid demand for restocking from WhatsApp launched a els as buyers were deterred by a recent price jewellers,” said Stephen Innes, APAC head of limited service in India, where rise, said Harshad Ajmera, the owner of JJ Gold trading at Oanda. it has more than 200mn users, House, a wholesaler in the Indian city of Kolk- “Jewellers were reporting good sales from last week. ata. Valentines Day and it stayed on for the New This uses customers’ phone In the local market, gold was trading around Year,” he said. numbers linked to bank ac- Rs30,810 per 10 grams, after hitting a 15-month Premiums in China eased to $3-$4 an ounce counts to facilitate payments high of Rs30,836 hit earlier yesterday. from about $7-$8 at beginning of the week. and marks the first global foray Dealers in India were off ering a discount of Gold prices edged higher yesterday, head- into money transfers by the up to $3 an ounce yesterday over offi cial do- ing for their biggest weekly percentage gain in Facebook-owned firm. mestic prices, compared to a premium of $1.50 nearly two years. Four banks will join United last week. Jewellers were waiting for a correc- Traders expected demand to be low going Payments Interface (UPI) – tion in prices before stocking up inventories, a forward as a week-long Lunar New Year holiday which powers the payments Mumbai-based dealer with a private bank said. started on Thursday. service – for WhatsApp, NPCI Gold demand in India was likely to remain In Japan, gold was sold in a range of par with said. In the local Indian market, gold was trading around Rs30,810 per 10 grams, after hitting a 15-month high of below its 10-year average for a third year in 2018 the benchmark and a 10 cent premium as de- At present, India’s third- Rs30,836 earlier yesterday. Dealers in India were off ering a discount of up to $3 an ounce yesterday over as higher taxes and new transparency rules on mand rose after yen strengthened in the week, biggest lender ICICI Bank off icial domestic prices, compared to a premium of $1.50 last week. purchases were expected to cap last year’s a Tokyo-based trader said. processes the fund transfers on WhatsApp, the application shows. WhatsApp’s popularity in India is likely to pose a threat Walmart in talks to buy more than 40% shares in Flipkart to established players, but it is entering a competitive market after Alphabet Inc’s Google Reuters be valued at more than the $12bn figure Jabong, and controls nearly 40% of India’s $3bn for online retailer Jet.com. In the United States, Amazon also launched a payments app last Mumbai given when Japan’s SoftBank Group online retail, ahead of Amazon, according Last month it also said it was partner- bought high-end grocer Whole Foods year to compete with local Corp’s Vision Fund took roughly a fifth of to estimates by research firm Forrester. ing with Japan’s Rakuten Inc in online Market Inc for $13.7bn last year. players. the firm last year for $2.5bn, they added. It is also looking into expanding into grocery deliveries. Former Amazon employees Sachin The country’s cashless Walmart Inc is in talks to buy a stake of A spokesman for Flipkart said the grocery deliveries. “Walmart’s expertise “As large as they are, Amazon has eaten Bansal and Binny Bansal founded Flipkart economy got a boost after more than 40% in Indian e-commerce company does not comment on rumours in selling groceries and low-cost apparel away a significant chunk of their revenues in 2007 in India’s tech hub of Bengaluru. Prime Minister Narendra Modi firm Flipkart, a direct challenge to or speculation. could help Flipkart remain ahead in India’s and I think... they view India as the largest Like Amazon’s founder Jeff Bezos, banned old high-value cur- Amazon.com Inc in Asia’s third-largest An India-based representative for e-commerce market,” said Satish Meena, market possibly for this (taking on Ama- they began by selling books, but have rency notes in late 2016, economy, two sources familiar with the Walmart declined to comment. senior analyst at Forrester. zon),” one of the sources said. diversified rapidly, including by selling leading to a surge in online matter said yesterday. A deal with Walmart would give For Bentonville, Arkansas-based Walmart has for years tried to enter smartphones such as China’s Xiaomi and payment providers such as In what would be one of its biggest Flipkart much-needed muscle in its fight Walmart, a deal would open a new front India but has remained confined to a Motorola through exclusive flash sales, homegrown player Paytm, the overseas deals, the US retailer is looking against Amazon, which has committed in its eff orts to take on Amazon, giving the ‘cash-and-carry’ wholesale business amid and now compete with Amazon on almost biggest in India. at buying new and existing shares in Flip- to investing $5bn in India as it expands world’s largest brick-and-mortar retailer tough restrictions on foreign investment. all product categories. Paytm, which is backed kart and due diligence is likely to begin as aggressively, including into online gro- access to an e-commerce market that It currently operates 21 such stores in Flipkart’s success has attracted a bevy by Alibaba and SoftBank early as next week, the sources said. cery deliveries, which analysts tip as the Morgan Stanley has estimated will rapidly India. Walmart’s push into e-commerce of deep pocketed and tech-savvy inves- expressed concerns about the They declined to be named as the talks next big battleground for the country’s grow to be worth $200bn in a decade. comes as Amazon has embraced off line tors including US hedge fund Tiger Global security of WhatsApp’s new were private. e-commerce sector. It would be part of a huge e-commerce retail, with an aff iliate of the Seattle-based Management, China’s Tencent Holdings payments service in a state- Terms under discussion were not im- Besides its own e-commerce site, push that has seen Walmart acquire a company picking up a $27.6mn stake in Ltd, online marketplace eBay Inc and ment released yesterday. mediately available, but Flipkart would Flipkart owns fashion portals Myntra and slew of start-ups including paying roughly Indian retailer Shopper’s Stop Ltd. software giant Microsoft Corp. Gulf Times Saturday, February 17, 2018 3 BUSINESS

India needs ‘clean coal’ investors: HNA Group sells part of its Global coal body stake in Deutsche Bank Reuters New Delhi Reuters Frankfurt/Shanghai India needs to do more to at- tract foreign investment in tech- nologies that can cut emissions hinese conglomerate HNA from burning coal, a global coal Group has sold part of its stake trade association said yester- Cin Deutsche Bank worth around day, given that the fuel will be a €300mn ($375mn) as it offl oads invest- main source of electricity in the ments to address a liquidity crunch. country for decades. The reduction from roughly 10% to India, the world’s second- around 8.8% is signifi cant because it biggest greenhouse gas emitter, means HNA is no longer on a par with has set ambitious targets to the Qatari royal family, now Deutsche’s raise the contribution of solar biggest shareholder. and wind power to its energy The move to trim its stake in Germa- mix, though it has also said coal ny’s largest lender, one of HNA’s high- will maintain its dominance est profi le overseas investments, comes for at least the next 30 years as the aviation-to-fi nancial services due to its abundance and cost conglomerate faces intense regulatory advantage. scrutiny following a $50bn acquisition “India needs to step up and spree over the past two years. say we need support here,” Ben- Last month, HNA told creditors it jamin Sporton, chief executive faced a potential cash shortfall of at at World Coal Association, told least 15bn yuan ($2.4bn) in the fi rst reporters in New Delhi. quarter, according to a source. “We would like to see the HNA had declined to comment. government potentially say, A spokesman for asset manager C- ‘Look coal is going to be an im- Quadrat, which handles HNA’s Deut- portant part of the economy for sche Bank shareholding, said that no decades, and we need support further reduction HNA’s holding is to be reasonably self suff icient planned. “HNA will continue to be a but also to get support for low signifi cant investor in Deutsche Bank”, emission coal technology that it said. we need to use,’” Sporton said. In Germany, the stake reduction is India has already sought likely to be greeted with relief by local foreign funds to move towards regulators, which have been alarmed by “clean coal” – which can cut HNA’s problems and opaque ownership greenhouse gases emitted structure. from burning coal by up to Financial watchdog Bafi n has been 30% – and Sporton said given conducting a probe into HNA, over India’s resurgent demand for whether it accurately reported its hold- coal imports after two years ings when building the stake, accord- of decline it needs to ask for ing to two people briefed on the mat- financial support. ter, while the Swiss Takeover Board, in Earlier this week, the chief a separate case, had said that HNA had coal analyst at Noble Resources, provided some false information. a unit of commodities trader Although the prices at which HNA Noble Group, said global ther- built its Deutsche Bank stake are not mal coal demand will outpace public, the investment has probably not supply in 2018, leading to a been a fi nancial success so far. Chinese conglomerate HNA Group has sold part of its stake in Deutsche Bank worth around €300mn ($375mn) as it off loads investments to address a liquidity crunch. strong market driven by rising Since HNA revealed an initial stake consumption from top buyers in Deutsche Bank in February 2017 the ing markets, a drop in investment bank two of its units in November, citing a This week it announced a $2bn deal cash as Beijing sought to push them to India and China. shares have lost 23% in value. revenue and a US tax reform, after a dif- “deteriorating liquidity profi le” as it for two Hong Kong land parcels. become global champions, but China Coal India, the world’s largest Deutsche Bank this month again ap- fi cult fourth quarter. faces mounting debt maturities this Sources have said it is in talks with abruptly reversed course more than a coal miner, plans to increase pealed for investors to be patient after HNA’s fi nancial woes prompted S&P year. creditors about its outstanding loans. year ago as it stepped up eff orts to con- its production to about one it posted its third consecutive annual Global Ratings to downgrade the credit To address the liquidity crunch, HNA Conglomerates like HNA once en- trol fi nancial sector risk and lower debt bn tonnes by 2022, but it has loss in 2017, taking a hit from challeng- profi le of the Hainan-based group and has been selling assets. joyed government support and cheap levels across the economy. fallen short of its annual targets leading to higher imports by the country. Sporton said it was unclear whether the government’s push for solar energy would result in sustainable projects given sharp falls in power tariff s. Pakistan IT sector advancing rapidly “It’s now getting to the point where it’s quite diff icult to make money out of investing in solar,” Internews conference to be held on February 19 and egories. Enterprise software has grown huge in the start-up world of Pakistan average. Out of 40 start-ups in which Sporton said. Karachi 20 at the Karachi Expo Centre. by 17%, marketing tech 15%, fi nancial as evidenced by the huge number of 10XC invested, only 12 closed down, Prime Minister Narendra “The event is expected to attract services 13%, consumer goods 9%, sponsors, Jafri added. said the Karachi-based investor Saif Modi’s government aims to more than 300 start-ups,” he said. retail/e-commerce 8%, professional Women entrepreneurs all around the Akhtar. raise solar power generation combination of youth and tech- Around 50 practising profession- services 8%, Internet of things/hard- world face problems in access to fi nan- Pakistani entrepreneurs don’t have capacity nearly 30 times to 100 nology has allowed Pakistan’s in- als and entrepreneurs would conduct ware 7%, healthcare 4%, media 4% and ciers and mentors and so is the situa- many opportunities which act as an gigawatts (GW) by 2022. Aformation technology (IT) exports relevant workshops and seminars on non-profi t 3%. tion in Pakistan, said Sadaf Abid, head advantage for start-ups since investors India will need at least $125bn to jump to $5bn, co-founder of 10XC, a successful start-ups and survival as an “Contrary to popular belief that of CIRCLE Pakistan, which helps build stick longer instead of quitting due to to fund its plan to increase the technology start-up accelerator and seed entrepreneur, said Syed Amir Jafri, the start-ups only emerge in Karachi, La- entrepreneurial and leadership capacity initial hurdles. share of renewable power sup- fund, Saif Akhtar, said yesterday. founder of Momentum. hore and Islamabad, start-ups from 19 of women and youth in Pakistan. Pakistan government has also started ply in the energy mix, which is “During 2016-17, Pakistan’s IT ex- Participating start-ups will be able smaller cities participated in the previ- About 60% of Pakistan’s youth is be- promoting start-ups, for example, it proving to be challenging. ports were $3.3bn, which have jumped to pitch their proposals to more than 20 ous exhibition with more expected to low 30 years of age so start-up exhibi- has given three-year exemption from A coal ministry spokesperson to $5bn and are expected to grow to $6bn investors and various representatives take part in the current one,” said Asif tions like Momentum are necessary to taxes to the start-ups and set up na- was not immediately available next year,” Akhtar said while talking on from 20 incubators during the two-day Jafri, Founding Member of Momentum. create jobs, she said. tional incubation centres in Lahore, Is- for comment. the sidelines of a press conference on event. Pakistan’s IT industry is grow- Facebook, Amazon and other giants Pakistan’s start-up sustainability lamabad, Peshawar and is now going to Momentum 18, a two-day tech start-up ing at a fast pace across diff erent cat- of IT sector are anticipating something is also higher compared to the global set up one in Karachi. Top Indian court lets lenders sell FDI in Pakistan Singhs’ pledged shares in Fortis drops by 3%: SBP

Bloomberg generic drug business to the Japanese Internews It also indicated that the highest amount of New Delhi fi rm a decade ago. Last month the Karachi $415mn was invested in coal power plant. Delhi High Court ruled the Singapore The report also shows that the construc- award is enforceable and this week tion industry still has a great potential for ndia’s Supreme Court allowed Daiichi moved the court to execute it. oreign direct investment (FDI) in Pa- foreign investments as the sector attracted lenders to sell shares of Fortis The Singhs have appealed the ruling to kistan during the fi rst seven months second largest share, amounting $385mn, IHealthcare Ltd put up as collateral the top court. Fof this fi scal year dropped 3% on a during this period. by the hospital company’s controlling Fortis shares swung between an in- year-on-year basis. Financial businesses received $178mn, shareholders, partially reversing an traday drop and an advance of about The State Bank of Pakistan (SBP) report- oil and gas exploration $120mn, trade order that barred them from disposing 5% before ending the day with a 0.7% ed yesterday that the country received a $55mn and food $24mn during this pe- the stock. gain in Mumbai. The benchmark S&P total FDI of $1,488mn during July-January riod. Since the portfolio investment has Interim orders passed last year to BSE Sensex rose 0.4%. period of 2017-18. improved, the total foreign private invest- maintain status quo on Malvinder and Daiichi had moved the top court last The FDI fell despite a healthy eco- ment (FPI) between July-June increased by Shivinder Singh’s 34% stake in Fortis year to prevent the Singhs from sell- nomic growth as reported by the ministry 23.3% to $1454mn. The outfl ow of portfolio will not apply to shares encumbered ing their Fortis shares. The Japanese of fi nance and the central bank. The SBP investment was just 34mn during this pe- before August 11, the two-judge bench company’s lawyers Arvind P. Datar and expects a 5.8% growth rate in FY18, indi- riod compared to a total outfl ow of $353mn headed by Justice Ranjan Gogoi said Krishnan Venugopal argued in court cating that domestic investment has in- in the corresponding period of FY17. Thursday. The plea was brought by Thursday that Daiichi fears it may be creased substantially to achieve about 6pc Meanwhile, the country paid $1.523bn lenders including Yes Bank Ltd and left with a “paper decree” and will have economic growth target. in external debt servicing for the second Axis Bank Ltd About 98% of the Singh nothing to recover if the brothers’ as- The Chinese investments totalled quarter of this fi scal year, the State Bank brothers’ Fortis shares are pledged or sets are allowed to be sold. $1,003.3mn constituting 67.4% of the total reported yesterday. otherwise encumbered, according to The top court’s decision Thursday FDI the country received during the period Of this, $599mn was paid as interest, regulatory fi lings for the quarter ended to allow banks to sell Fortis shares put under review suggesting that investments and $924mn as repayment of principal. December 31. up as collateral by the Singhs compli- from other countries had been declining. The overwhelming majority of these pay- The top court order is part of an on- cates both Daiichi’s attempts to collect The second largest infl ow was noted ments were on public debt, coming in at going legal battle between the Singhs on the award and the brothers’ eff orts from Malaysia, accounting for an invest- $1.227bn. and drugmaker Daiichi Sankyo Co, to monetise their assets to deal with ment of $118mn. Infl ows from UK and US Private sector debt payments stood at which has turned to India’s courts to their own debts. The borrowings at the stood at $94.3mn and $75.5mn respective- $211mn. The remaining $72mn was paid by Malvinder Singh and Shivinder Singh, the original promoters of Fortis collect about $550mn awarded to it brothers’ main holding company, RHC ly. Power sector captured the lion’s share of public sector enterprises. Healthcare. A tribunal in Singapore found the brothers had concealed by a tribunal in Singapore. The tribu- Holding Pvt, stood at about $1.5bn in foreign investment worth $542mn during The fi gures show a drop from the pre- information during the sale of their generic drug business to Japanese nal found the brothers had concealed the latest fi scal year for which there are the July-January period, pointing to the ceding quarter when the government paid firm Daiichi a decade ago. information during the sale of their public records. focus of Chinese investment in Pakistan. $2.102bn as total external debt servicing. Gulf Times 4 Saturday, February 17, 2018 BUSINESS

Indonesia Japan’s tax incentive for raising eyes lax palm oil wages may have limited appeal rules in

Reuters EU trade Tokyo deal n the surface, it looks like an at- tractive deal: Raise your work- Oers’ pay by 3% and your compa- AFP ny qualifi es for a substantial tax break. Jakarta But a closer look suggests that Japa- nese Prime Minister Shinzo Abe’s poli- cy actually raises the bar for companies alm oil giant Indonesia to get tax breaks to 3% wage increases is pressing the European from 2% – and as a result it will likely PUnion to abandon plans fail to drive up compensation. to apply strict environmental Most businesses are simply unwilling standards to the sector and si- to hike wages that much, wary of com- lence “negative” criticism about mitting to driving up ongoing costs for a the commodity, documents ob- temporary, three-year tax break. tained by AFP have revealed. Even offi cials at the Ministry of Fi- The papers, marked “not for nance are sceptical. publication” and for distribu- It only expects one fi fth of large prof- tion only on a “need to know” itable companies will take advantage basis, refl ect Jakarta’s wish list of the off er, which slashes the offi cial for a critical industry as the two corporate tax rate from 30% to 25%, a sides hammer out new rules for a ministry offi cial told Reuters. trading relationship worth $35bn He declined to be identifi ed because a year. he is not authorised to talk to the press. Indonesia is the world’s larg- Under the new scheme, the fi nance est producer of palm oil – used in ministry estimates it will lose ¥161bn everything from food to cosmet- ($1.51bn) in corporate tax revenue in ics – and vast swathes of rainfor- the fi scal year ending March 31, 2019, est have been destroyed to make down sharply from ¥318bn in tax breaks way for plantations that are the handed out in the year ended in March backbone of Southeast Asia’s 2017, which is the most recent data biggest economy. available. This annual slash-and-burn One problem is that many companies clearing threatens endangered already pay far less than a 30% tax rate species and fuels annual forest due to various deductions. fi res that plague the region. The average eff ective tax rate for Ja- Indonesia and the EU kick off pan’s largest companies is only around a fourth and possibly fi nal round 10%, while smaller fi rms paid an aver- of negotiations – covering a age of around 19%, in the fi scal year wide range of trade, investment ended March 2013, according to re- and intellectual property rules – search by Yukio Tomioka, a professor at Japan’s Prime Minister Shinzo Abe delivers a speech in Tokyo. Abe urged Japanese companies to raise workers’ pay by 3% to qualify for a substantial tax break. from Monday in the archipelago Chuo University. nation. Last year, companies hiked wages by the central bank’s 2% target. Some big certain to pass into law by April given other major strategic decisions. “There wages in response to chronic labour The documents outline a call 2.1%, and economists predict a similar companies have expressed support for the ruling coalition’s control of par- is a fundamental mismatch, because shortages. for the EU to apply Jakarta’s raise this year in annual wage negotia- Abe’s 3% mantra, but as the decision liament – is actually a revision of one the tax break is temporary but a wage Economists expect this to continue, own government sustainabil- tions with labour unions that will end looms, economists predict that the av- that’s been in place since the year that increase is close to permanent,” said but they say other industries are less ity standard – despite serious in March. erage hike will fall short of that mark. started in April 2013. Takuya Hoshino, economist at Dai- likely to benefi t because they have an concerns about its credibility – The wage hike tussle comes amid a Disappointing wage negotiations Under the existing plan, large com- Ichi Life Research Institute.”A company easier time securing workers. rather than a tougher European sustained recovery in Japan, which has could undermine Japan’s recovery and panies that raise wages by 2% can get cannot recoup what it loses by raising “Some big companies are saying they certifi cation scheme that was just posted its longest continuous ex- curb speculation that the Bank of Japan around a 1 percentage point tax break. wages with this tax code.” will raise wages, but I doubt the major- proposed in April last year. pansion since the 1980s boom. will scale back its massive asset-buying But raising the bar to 3% is too much Smaller companies with less than ity will follow through on this,” said Hi- Only a minority of Indonesian But shaking two decades of defl ation campaign. for many companies, even with the ¥100mn in capital can get a similar roaki Muto, economist at Tokai Tokyo palm oil plantations currently has been hard. “The macroeconomic impact (of higher incentive of a maximum 5 per- tax break if they raise wages by 1.5% or Research Center. even meet Jakarta’s relatively lax Abe dangled the tax break off er in an the tax cuts) will likely be small,” said centage-point reduction in the tax rate. more. “If companies don’t raise wages but standards. attempt to lure companies into a hefty Shungo Koreeda, a researcher at Daiwa The new scheme’s temporary na- Construction, retail, and shipping try to raise retail prices we end up with Separately, Indonesia and wage hike as a way to spur consumer Institute of Research. ture deters companies who rely on have benefi ted most from the current less consumer spending,” he added. neighbouring Malaysia – an- spending and lift price rises towards Abe’s new tax break bill – which is long-term planning for investment and tax breaks, because they are raising “This is the dilemma.” other major palm oil producer – have slammed the European Parliament’s move to ban the use of the commodity in biofuels from 2021. They say that the ban would Policymakers step up warnings over ‘one-sided’ yen gains devastate rural communities where many small-scale farmers survive by cultivating the crop. Reuters have been “one-sided”. The recent on an ultra-loose policy path. Some Indonesia’s trade ministry de- Tokyo global stock sell-off has increased analysts said worries over the United clined to comment on the leaked investor appetite for the yen, which States’ twin trade and budget defi cits text, which is dated June 2017. is seen as a haven in times of market amid a government spending splurge The last round of talks were apanese policymakers stepped up turmoil. and large corporate tax cuts were a in September last year, and it is warnings against a rising yen yes- The dollar fell to as low as 105.5 factor behind dollar weakness. not clear if the documents re- Jterday, saying recent moves were yen, its lowest in 15 months. “I’m not guiding currency policy fl ect Jakarta’s latest position in one-sided and they would respond “The currency market moves over with specifi c levels in mind... sta- negotiations, which began in appropriately, as worries grow that the past several days have been one- bility in the currency market is very mid-2016. the buoyant currency could damage sided despite very favourable eco- important,” Aso told reporters after a European Commission offi - the export-reliant economy. nomic fundamentals,” Asakawa told cabinet meeting. cials said they would not com- Finance Minister Taro Aso told re- reporters after a regular meeting of He reiterated that there was agree- ment on an alleged leak. porters after a cabinet meeting that offi cials from the fi nance ministry, ment among the Group of Seven However, they said any fi nal he would deal with currency mar- the Bank of Japan and fi nancial regu- and G20 nations that rapid currency deal would not come at the ex- ket moves “with a sense of urgency”, lators. Asakawa added that he was swings and disorderly moves would pense of acceptable environ- after the dollar hit a 15-month low watching currency markets more hurt economies and fi nancial mar- mental or labour standards. against the Japanese currency. carefully than ever. kets. One passage calls for the EU Aso’s comments were an appar- “I’m closely in touch with cur- “There was no change to our to legislate against “negative” ent attempt to play down remarks rency authorities in other coun- stance of ‘responding as appropriate messaging and campaigns with he made in parliament on Thurs- tries,” he said. The reappointment when necessary’. I’ll continue to deal “misleading nutrition, health day when he said he did not see the of Haruhiko Kuroda as BoJ governor with currency market moves with a and/or environmental claims”, in yen’s current moves as strong or and the nomination of BoJ executive sense of urgency,” he added. an apparent bid to head off criti- weak enough to warrant interven- director Masayoshi Amamiya and A strong yen erodes profi ts at cism about palm oil’s impact. tion. His comments yesterday were Waseda University professor Masa- Japanese manufacturers and could The industry frequently ac- echoed by top currency diplomat zumi Wakatabe as deputy governors hurt the otherwise buoyant econo- cuses rival foreign vegetable oil Japan’s Finance Minister Taro Aso at a press conference in Tokyo. Aso said after a Masatsugu Asakawa and Chief Cabi- had little impact on the yen, although my, which posted an eighth straight fi rms of working with NGOs cabinet meeting that he would deal with currency market moves ‘with a sense of net Secretary Yoshihide Suga, who the proposed leadership trio were quarter of growth in October-De- to launch “black campaigns” urgency’, after the dollar hit a 15-month low against the Japanese currency. both warned that recent yen gains seen certain to keep the central bank cember. against the sector. Lost in translation? GM plant shutdown shocks South Korea

Reuters sured they were making progress working Any undermining of the Seoul-Washing- “working with our stakeholders to restruc- GM Korea, which South Korea’s trade plant shutdown and launch of voluntary Seoul through issues, albeit slowly. ton relationship could also factor against ture and get to a viable cost structure”. ministry says directly employs nearly redundancy plans couldn’t have come at a Then came the bombshell. eff orts to pressure North Korea over its “There is deep rooted distrust about GM 16,000 workers and supports another worse time. On Tuesday morning, GM announced nuclear and missile programmes. among government off icials. Trust has col- 140,000 jobs in its supply chain, posted Many salaried South Koreans get bo- Only weeks into a new job heading General it would shut its Gunsan plant, which The government off icial and another lapsed a long time ago,” a person familiar a total of 1.9tn won ($1.8bn) in net losses nuses and gifts to celebrate Friday’s Lunar Motors Co’s international operations, Barry employs 2,000, and decide the future of source said GM informed Seoul about the with the South Korean government’s between 2014 and 2016. New Year holiday. Engle flew into a frigid South Korea in the remaining three other Korean plants decision in a phone call only the evening thinking said. A further complication is pressure from South Korean off icials are also in the January and held a series of meetings with within weeks. before its announcement. KDB believes GM Korea has not shared the administration of US President Donald middle of hosting the Winter Olympic government off icials to discuss the future “GM only talked about the diff icult situ- The sources declined to be identified suff icient information about its finances Trump to address the US trade imbalance Games and have been focused lowering of GM’s loss-making local unit. ation they were in, and asked for our help, because of the sensitive ongoing nature of or the cause of its mounting losses, this with South Korea and bring manufacturing tensions with North Korea, which sent a In what they thought were meet-and- but did not say a word about the closure the matter. person added. back to the United States. high level delegation last week. greet introductions, senior off icials agreed before. A GM Korea spokesman confirmed the The GM Korea spokesman said it will “Trump is putting pressure on GM to A Detroit-based source at GM told Reu- to work with the global automaker on It was a shock to us,” a South Korean company notified the government about explain its “transparent practice” to the shift production to US. It is Government ters the timing of the announcement was problems at GM Korea, according to South government off icial said. Gunsan closure on Monday, but said the government during upcoming discussions. Motors, not General Motors,” the person dictated by urgency of the matter as its Korean off icials with direct knowledge of The discord and lack of communica- matter had been already discussed and South Korea was for years a low-cost said. 2018 wage negotiations with South Korean the meetings. tions point to rocky negotiations ahead as approved by the board, including board export hub for GM, producing close to a However, the GM Korea spokesman workers have begun. Last week, Engle made another visit, South Korea seeks to prevent further job members nominated by KDB, last week. fifth of its global output at its peak. said: “The Gunsan plant announcement is Top management decided the time had meeting with the head of state-run Korea losses and provide support for a critical “We plan to seek full support from But the automaker’s decisions to exit related to our need to restructure our busi- come to put a lid on the losses, starting Development Bank, which owns 17% of GM part of its manufacturing sector while government and other stakeholders about other unprofitable markets have exacer- ness in South Korea,” and is not being done with closure of the Gunsan plant, the Korea. avoiding criticism for spending tax payers’ our turnaround plan,” he said. bated problems for GM Korea, which used for political reasons. person said. Bank and government off icials said money to support private industry. KDB declined to comment. to build many of the Chevrolet models GM Sources familiar with GM’s future plan- GM’s approach has prompted specula- Engle asked for financial support and in The tensions also come at a diff icult South Korea’s government said it deeply once off ered in Europe. ning say the company’s global production tion in South Korea that the automaker is return, KDB suggested an audit before time for US-South Korean relations given regretted GM’s unilateral decision and any In December 2013, GM announced its strategy is still fluid, but GM could shift seeking to maximise pressure on President it would consider committing any fresh US President Donald Trump’s determina- aid would depend on GM’s new investment decision to pull Chevrolet out of Europe. production out of Korea to an existing Moon Jae-in’s administration, which has funding. tion to renegotiate the US-Korea Free into its Korean operations. Last year, GM agreed to sell its Opel and plant in another country. touted job creation as its top economic South Korea off icials said they left reas- Trade Agreement. GM said it will invest if it is successful in Vauxhall brands in Europe to PSA Group. GM’s announcement of the Gunsan policy. Gulf Times Saturday, February 17, 2018 5 BUSINESS

DJIA WORLD INDICES Company Name Lt Price % Chg Volume Indices Lt Price Change Dow Jones Indus. Avg 25,281.74 +81.37 Apple Inc 174.23 0.72 13,397,274 S&P 500 Index 2,739.27 +8.07 Microsoft Corp 93.18 0.56 7,470,970 Nasdaq Composite Index 7,267.97 +11.54 Exxon Mobil Corp 76.34 0.17 3,629,463 S&P/Tsx Composite Index 15,434.78 +27.12 Johnson & Johnson 132.99 1.34 2,186,866 Mexico Bolsa Index 49,082.96 +274.57 General Electric Co 15.02 1.11 17,214,306 Brazil Bovespa Stock Idx 84,254.81 -35.75 Jpmorgan Chase & Co 115.43 -0.07 3,391,036 Ftse 100 Index 7,293.42 +58.61 Procter & Gamble Co/The 82.74 0.40 2,871,547 Cac 40 Index 5,278.30 +55.78 Walmart Inc 103.00 -0.23 3,284,403 Dax Index 12,439.39 +93.22 Verizon Communications Inc 50.20 0.92 3,590,448 Ibex 35 Tr 9,810.20 +95.30 Pfizer Inc 36.14 1.20 7,239,681 Nikkei 225 21,720.25 +255.27 Visa Inc-Class A Shares 122.32 0.03 1,810,657 Japan Topix 1,737.37 +18.10 Chevron Corp 112.01 -0.46 1,638,117 Hang Seng Index 31,115.43 +599.83 Coca-Cola Co/The 45.05 0.59 6,740,561 All Ordinaries Indx 6,004.78 -3.91 Intel Corp 46.38 0.99 5,367,969 Nzx All Index 1,462.27 +11.53 Merck & Co. Inc. 56.40 0.72 2,619,203 Bse Sensex 30 Index 34,010.76 -286.71 Cisco Systems Inc 44.96 2.00 13,461,938 Nse S&P Cnx Nifty Index 10,452.30 -93.20 Home Depot Inc 186.78 0.81 2,098,579 Straits Times Index 3,443.51 +40.65 Intl Business Machines Corp 156.89 0.56 916,160 Karachi All Share Index 31,456.93 +464.25 Walt Disney Co/The 105.94 0.72 1,648,004 Jakarta Composite Index 6,591.58 -2.82 Unitedhealth Group Inc 226.10 0.04 938,454 3M Co 236.26 0.59 543,754 Mcdonald’s Corp 159.01 -1.10 2,504,751 Nike Inc -Cl B 68.84 0.81 1,899,885 TOKYO United Technologies Corp 130.34 0.26 767,842 Boeing Co/The 357.79 0.37 1,636,483 Company Name Lt Price % Chg Volume Goldman Sachs Group Inc 267.97 0.11 824,136 Rakuten Inc 909.70 -1.12 13,819,600 American Express Co 96.88 0.33 770,897 Kyocera Corp 6,220.00 3.81 3,206,800 Caterpillar Inc 160.20 0.14 1,538,036 Nissan Motor Co Ltd 1,115.50 0.22 15,157,300 Travelers Cos Inc/The 140.84 -0.03 314,668 Hitachi Ltd 814.20 0.58 13,946,000 Takeda Pharmaceutical Co Ltd 5,949.00 0.10 1,507,500 Jfe Holdings Inc 2,500.00 0.66 2,812,700 Ana Holdings Inc 4,254.00 1.41 1,206,100 FTSE 100 Mitsubishi Electric Corp 1,835.00 0.52 5,110,700 Sumitomo Mitsui Financial Gr 4,746.00 0.36 4,920,500 Company Name Lt Price % Chg Volume Honda Motor Co Ltd 3,774.00 1.07 5,561,400 Fast Retailing Co Ltd 42,600.00 1.82 883,900 Wpp Plc 1,471.50 4.21 7,213,533 Ms&Ad Insurance Group Holdin 3,335.00 -0.21 2,370,300 Worldpay Group Plc 435.40 0.00 - The Euronext logo is seen on the exterior of the Paris Stock Exchange. Paris’ CAC 40 closed up 1.1% at 5,281.58 points Kubota Corp 1,961.50 -0.56 4,120,600 Wolseley Plc 0.00 0.00 - yesterday. Seven & I Holdings Co Ltd 4,424.00 -0.18 2,012,100 Wm Morrison Supermarkets 220.70 1.28 3,517,800 Inpex Corp 1,337.00 0.75 5,398,200 Whitbread Plc 3,973.00 2.56 333,410 Resona Holdings Inc 621.60 0.50 9,022,400 Vodafone Group Plc 204.30 2.22 44,565,574 Asahi Kasei Corp 1,323.50 1.77 3,231,200 United Utilities Group Plc 667.40 1.27 1,207,809 Kirin Holdings Co Ltd 2,755.50 1.25 4,372,800 Unilever Plc 3,810.50 0.81 1,397,259 Marubeni Corp 782.70 1.39 6,931,600 Tui Ag-Di 1,553.50 1.60 927,422 Mitsubishi Ufj Financial Gro 776.50 0.47 49,935,600 Travis Perkins Plc 1,427.50 1.21 517,418 Mitsubishi Chemical Holdings 2.48 World stock markets gain 1,073.50 5,199,200 Tesco Plc 204.50 0.39 19,024,652 Fanuc Corp 27,160.00 0.59 1,135,900 Taylor Wimpey Plc 187.60 0.46 3,657,289 Daito Trust Construct Co Ltd 18,085.00 0.42 311,600 Standard Life Plc 0.00 0.00 - Otsuka Holdings Co Ltd 4,966.00 1.16 1,594,200 Standard Chartered Plc 822.20 0.57 2,328,648 Oriental Land Co Ltd 10,465.00 1.21 569,800 St James’s Place Plc 1,126.50 0.85 994,092 Sekisui House Ltd 1,883.00 2.00 3,211,200 on US rate hike prospects Sse Plc 1,200.50 1.01 1,861,095 Secom Co Ltd 7,719.00 1.21 674,700 Smith & Nephew Plc 1,280.00 0.55 1,363,701 Tokio Marine Holdings Inc 5,034.00 -0.32 2,319,000 Sky Plc 1,099.00 0.92 1,946,227 AFP low against the euro and touching a drop that sent major indices down Aeon Co Ltd 1,846.50 1.46 2,150,700 Shire Plc 3,219.50 1.24 1,984,914 15-month low against the yen. more than 10% — considered correc- Mitsui & Co Ltd 1,885.00 0.21 7,204,000 Paris Severn Trent Plc 1,741.00 2.23 644,922 “European stocks are higher today tion territory. Kao Corp 7,881.00 1.73 1,260,600 Schroders Plc 3,426.00 1.51 246,816 as traders’ levels of optimism rise,” said The shock of the possibility the US Dai-Ichi Life Holdings Inc 2,188.00 0.46 5,608,900 Sainsbury (J) Plc 250.90 1.21 3,061,009 Mazda Motor Corp 1,470.50 -0.37 7,590,300 lobal stocks pushed higher yes- market analyst David Madden at CMC Federal Reserve may need to hike in- Sage Group Plc/The 700.40 0.11 2,295,231 Komatsu Ltd 3,992.00 -0.22 4,998,300 terday as investors, getting over Markets UK. terest rates faster than it previously Abi Sab Group Holding Ltd 0.00 0.00 - West Japan Railway Co 7,541.00 -0.67 1,148,700 their panic attack triggered by “The bullish momentum is growing, indicated to ward off a possible surge Rsa Insurance Group Plc 610.20 0.69 826,026 G Murata Manufacturing Co Ltd 14,910.00 -0.07 667,000 Royal Mail Plc 549.00 0.22 2,550,040 the prospect of a steep rise in US inter- and the higher equity markets rise, the in infl ation driven by rising wages may Kansai Electric Power Co Inc 1,276.50 5.89 3,881,400 Royal Dutch Shell Plc-B Shs 2,279.50 0.02 2,843,235 est rates, tentatively bought back into more it encourages other investors to also be wearing off . Denso Corp 6,181.00 -0.34 1,679,000 Royal Dutch Shell Plc-A Shs 2,256.00 -0.04 3,208,322 the market, ensuring solid gains over jump on the bandwagon.” “The impressive recovery in equi- Sompo Holdings Inc 4,110.00 2.01 1,885,800 Royal Bank Of Scotland Group 275.50 0.15 5,471,436 Daiwa House Industry Co Ltd 3,892.00 1.12 1,374,400 the week. Some, however, questioned the ties, particularly US equities, whilst Rolls-Royce Holdings Plc 831.80 -1.00 2,639,427 Jxtg Holdings Inc 665.30 2.83 14,641,500 Wall Street dipped at the opening of assumption that stock markets re- bond yields pace higher, shows that Rio Tinto Plc 4,096.00 -0.72 2,647,207 Nippon Steel & Sumitomo Meta 2,571.50 1.44 3,027,000 trading after a fi ve-day winning streak ally were back in full swing, having the market is learning to live with the Rexam Ltd 0.00 0.00 - Suzuki Motor Corp 6,004.00 0.84 1,906,700 prospect of higher infl ation and a po- Relx Plc 1,496.50 2.08 3,496,741 that saw it claw back half of the losses brushed off last week’s dizzying falls as Nippon Telegraph & Telephone 4,702.00 1.01 4,363,200 Reckitt Benckiser Group Plc 6,550.00 2.41 850,732 it suff ered the previous week of turbu- a one-off correction. tentially more aggressive Federal Re- Ajinomoto Co Inc 1,959.00 1.95 1,533,600 Randgold Resources Ltd 6,304.00 -2.17 384,809 lent trading, but had turned positive by “There is still much debate about serve,” said analysts at London Capital Mitsui Fudosan Co Ltd 2,575.00 -0.10 2,060,700 Prudential Plc 1,844.50 1.07 2,303,989 late morning in New York. whether another bout of volatility is Group. Ono Pharmaceutical Co Ltd 2,964.00 1.32 2,005,500 Provident Financial Plc 687.60 -0.72 212,713 Daikin Industries Ltd 12,815.00 2.85 1,185,800 All key European stock markets required to properly clear out vested In currency trading, the dollar began Persimmon Plc 2,427.00 0.08 416,250 Bank Of Yokohama Ltd/The 0.00 0.00 - posted gains at the closing bell. interest from such a period of protract- to rebound in European trading, but Pearson Plc 700.60 2.76 2,363,663 Toray Industries Inc 1,085.50 0.84 4,123,900 London’s FTSE 100 closed 0.8% ed complacency, and whether equities not after having struck a new three- Paddy Power Betfair Plc 8,305.00 0.67 52,285 Astellas Pharma Inc 1,486.50 1.23 7,811,100 Old Mutual Plc 246.00 -0.28 6,810,883 up at 7,294.70 points, Frankfurt’s are still overvalued even after a 10% year low of $1.2555 against the euro. Bridgestone Corp 4,974.00 2.22 2,451,600 Next Plc 4,925.00 2.05 308,267 DAX 30 up 0.9% at 12,451.96 points correction,” said Mike van Dulken, Jameel Ahmad, global head of cur- Sony Corp 5,264.00 1.76 8,102,200 National Grid Plc 750.30 1.27 4,793,709 and Paris’ CAC 40 closed up 1.1% head of research at Accendo markets. rency strategy and market research at Hoya Corp 5,438.00 0.31 709,300 Mondi Plc 1,866.50 1.41 704,325 at 5,281.58 points, while the EURO Wall Street closed higher for the fi fth FXTM, said “that the dollar has not Sumitomo Mitsui Trust Holdin 4,362.00 1.02 915,800 Merlin Entertainment 342.30 0.53 1,500,322 Japan Tobacco Inc 3,167.00 1.28 4,764,500 STOXX 50 closed 1.1% up at 3,426.80 straight session on Thursday, with the been valued this low since traders be- Mediclinic International Plc 583.60 1.07 762,116 Osaka Gas Co Ltd 2,124.00 2.44 969,200 points. S&P 500 and Dow Jones Industrial Av- gan to price in the normalisation of US Marks & Spencer Group Plc 299.40 2.18 2,418,684 Sumitomo Electric Industries 1,640.00 1.39 3,480,800 Meanwhile, the dollar rebound- erage both gaining 1.2%. interest rate policy from the Federal London Stock Exchange Group 4,065.00 1.07 368,535 Daiwa Securities Group Inc 712.10 0.95 5,345,000 Lloyds Banking Group Plc 67.83 1.12 66,205,053 ed after striking a new three-year This week’s rebound follows a sharp Reserve that began in 2015.” Softbank Group Corp 8,806.00 0.19 5,583,600 Legal & General Group Plc 256.40 1.38 9,024,939 Mizuho Financial Group Inc 198.40 1.07 104,328,000 Land Securities Group Plc 944.10 1.55 1,269,160 Nomura Holdings Inc 656.80 0.08 13,874,700 Kingfisher Plc 359.60 -0.06 4,636,254 HONG KONG HONG KONG Daiichi Sankyo Co Ltd 3,854.00 3.08 2,362,200 Johnson Matthey Plc 3,225.00 0.59 274,740 Subaru Corp 3,684.00 -0.41 3,794,200 Itv Plc 171.75 2.23 7,635,798 Ntt Docomo Inc 2,677.00 1.23 4,465,200 Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume Intu Properties Plc 209.30 1.26 1,439,947 Sumitomo Realty & Developmen 3,890.00 0.86 1,373,000 Intl Consolidated Airline-Di 610.00 1.19 4,100,666 Aluminum Corp Of China Ltd-H 4.94 3.78 19,551,166 Hong Kong & China Gas 14.80 -0.27 16,872,926 Sumitomo Metal Mining Co Ltd 5,117.00 0.51 1,900,500 Intertek Group Plc 5,000.00 0.83 157,385 Bank Of East Asia Ltd 32.85 1.55 1,566,616 Hong Kong Exchanges & Clear 280.00 2.64 8,903,961 Orix Corp 1,868.00 1.33 5,132,900 Intercontinental Hotels Grou 4,721.00 0.02 382,307 Bank Of China Ltd-H 4.40 1.15 374,398,186 Hsbc Holdings Plc 83.55 2.01 36,584,847 Asahi Group Holdings Ltd 5,691.00 4.35 2,399,500 Inmarsat Plc 448.50 3.94 1,134,706 Bank Of Communications Co-H 6.27 0.64 36,960,111 Hutchison Whampoa Ltd 0.00 0.00 - Keyence Corp 62,430.00 -1.64 412,400 Informa Plc 688.40 1.71 1,788,569 Belle International Holdings 0.00 0.00 - Ind & Comm Bk Of China-H 6.99 3.10 302,717,852 Nidec Corp 15,935.00 -3.42 2,634,200 Imperial Brands Plc 2,653.50 0.74 1,357,114 Boc Hong Kong Holdings Ltd 39.40 1.03 10,224,874 Li & Fung Ltd 3.92 -0.76 6,082,372 Isuzu Motors Ltd 1,727.50 1.35 2,863,800 Hsbc Holdings Plc 760.70 1.12 12,967,351 Cathay Pacific Airways 12.78 0.95 1,509,674 Mtr Corp 40.90 0.74 2,734,535 Unicharm Corp 2,949.50 6.06 3,297,800 Hargreaves Lansdown Plc 1,679.00 1.54 548,732 Ck Hutchison Holdings Ltd 98.95 1.12 3,716,540 New World Development 11.62 0.17 9,305,209 Shin-Etsu Chemical Co Ltd 11,225.00 0.58 1,222,700 Hammerson Plc 463.90 1.20 1,846,340 China Coal Energy Co-H 3.64 3.41 9,012,289 Petrochina Co Ltd-H 5.45 2.06 145,481,067 Smc Corp 45,540.00 1.45 255,000 Glencore Plc 387.65 -0.09 21,630,706 China Construction Bank-H 8.48 4.69 522,385,492 Ping An Insurance Group Co-H 86.85 3.21 44,049,514 Mitsubishi Corp 2,968.50 0.27 3,597,000 Glaxosmithkline Plc 1,318.00 1.35 6,111,142 China Life Insurance Co-H 23.15 1.09 36,139,325 Power Assets Holdings Ltd 66.10 0.38 2,832,361 Nintendo Co Ltd 45,840.00 0.00 2,172,200 Gkn Plc 419.60 1.16 3,376,077 China Merchants Port Holding 18.38 1.88 6,405,207 Sino Land Co 14.00 2.34 3,649,368 Eisai Co Ltd 5,575.00 1.11 1,701,300 Fresnillo Plc 1,404.50 0.97 1,019,287 China Mobile Ltd 74.20 0.68 12,506,797 Sun Hung Kai Properties 125.50 -0.40 2,921,100 Sumitomo Corp 1,770.00 -0.34 5,579,500 Experian Plc 1,560.50 0.91 793,348 China Overseas Land & Invest 28.65 2.32 17,808,435 Swire Pacific Ltd - Cl A 74.30 0.07 1,502,352 Canon Inc 3,971.00 0.43 4,446,000 Easyjet Plc 1,658.50 0.76 1,107,422 China Petroleum & Chemical-H 6.27 2.79 134,937,761 Tencent Holdings Ltd 447.00 3.09 16,354,787 Japan Airlines Co Ltd 3,977.00 1.35 1,260,000 Dixons Carphone Plc 199.50 2.10 1,113,791 China Resources Beer Holdin 29.70 1.19 2,344,474 Wharf Holdings Ltd 29.05 1.40 4,816,698 Direct Line Insurance Group 387.60 0.75 1,739,417 China Resources Land Ltd 30.20 2.55 9,259,097 China Resources Power Holdin 13.28 1.68 4,513,228 Diageo Plc 2,508.00 1.31 2,328,529 SENSEX Dcc Plc 6,730.00 0.60 99,876 China Shenhua Energy Co-H 22.25 2.06 14,783,028 GCC INDICES Crh Plc 2,495.00 0.24 1,179,997 China Unicom Hong Kong Ltd 10.20 1.19 20,258,936 Compass Group Plc 1,550.00 -0.06 1,992,510 Company Name Lt Price % Chg Volume Citic Ltd 11.14 0.54 6,776,269 Indices Lt Price Change Coca-Cola Hbc Ag-Di 2,460.00 2.84 783,238 Clp Holdings Ltd 76.00 -0.65 2,533,715 Doha Securities Market Zee Entertainment Enterprise 569.60 -0.23 1,947,347 9,027.71 -32.96 Centrica Plc 128.40 1.58 9,235,344 Cnooc Ltd 11.40 3.26 82,434,355 Saudi Tadawul Yes Bank Ltd 311.80 -2.50 19,387,428 7,510.47 +90.76 Carnival Plc 4,839.00 -0.47 621,288 Cosco Shipping Ports Ltd 7.31 0.83 3,844,445 Kuwait Stocks Exchange Wipro Ltd 291.00 -0.51 3,620,655 6,764.28 -13.10 Capita Plc 190.10 5.03 3,002,858 Esprit Holdings Ltd 3.14 0.00 8,803,954 Bahrain Stock Exchage Vedanta Ltd 319.75 -1.43 9,778,889 1,339.72 -2.67 Burberry Group Plc 1,552.00 -0.19 649,773 Fih Mobile Ltd 2.18 0.46 1,358,735 Oman Stock Market Ultratech Cement Ltd 4,166.35 -0.51 119,593 5,016.62 +10.75 Bunzl Plc 2,043.00 0.34 423,838 Hang Lung Properties Ltd 18.62 0.43 4,953,199 Abudhabi Stock Market Tech Mahindra Ltd 584.35 -3.52 3,085,350 4,577.42 -11.44 Bt Group Plc 228.85 1.42 8,833,463 Hang Seng Bank Ltd 192.30 0.42 1,756,072 Dubai Financial Market Tata Steel Ltd 689.75 -1.54 5,460,127 3,330.44 -5.68 British Land Co Plc 650.00 2.20 2,536,819 Henderson Land Development 50.10 0.70 2,274,282 Tata Power Co Ltd 86.65 0.46 4,218,717 British American Tobacco Plc 4,435.00 0.26 1,905,396 Tata Motors Ltd 370.75 -1.34 9,045,945 Bp Plc 472.65 0.62 16,259,508 Tata Consultancy Svcs Ltd 2,933.05 0.25 1,562,188 Bhp Billiton Plc 1,581.40 -1.04 5,063,768 Sun Pharmaceutical Indus 575.25 -0.09 7,290,342 Berkeley Group Holdings/The 3,821.00 0.82 228,821 “Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The State Bank Of India 271.65 -2.53 34,225,929 Barratt Developments Plc 553.40 0.84 2,127,245 Reliance Industries Ltd 921.30 -1.53 4,642,797 accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended Barclays Plc 199.60 0.55 21,410,647 Punjab National Bank 125.55 -2.11 168,419,236 as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank Bae Systems Plc 597.60 1.08 4,091,299 Power Grid Corp Of India Ltd 195.55 -1.19 3,611,872 or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on Babcock Intl Group Plc 644.40 -0.09 674,214 Oil & Natural Gas Corp Ltd 186.90 -0.74 4,391,387 this data.” Aviva Plc 496.50 0.67 4,089,174 Ntpc Ltd 162.80 -0.25 9,572,543 Astrazeneca Plc 4,745.00 0.67 1,255,955 Maruti Suzuki India Ltd 8,836.95 -2.03 705,261 Associated British Foods Plc 2,662.00 1.60 427,162 Mahindra & Mahindra Ltd 743.75 -0.75 1,362,129 Ashtead Group Plc 2,036.00 0.79 746,615 Lupin Ltd 825.10 0.34 716,672 CURRENCIES Arm Holdings Plc 0.00 0.00 - Larsen & Toubro Ltd 1,328.40 -1.63 1,529,420 DOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI KUWAITI Antofagasta Plc 913.00 -2.06 1,514,024 DINAR DINAR Kotak Mahindra Bank Ltd 1,050.20 0.77 1,724,453 Anglo American Plc 1,738.20 0.71 3,273,116 Itc Ltd 266.45 -0.62 6,548,067 Admiral Group Plc 1,903.50 0.98 259,389 Infosys Ltd 1,128.05 1.22 5,507,996 3I Group Plc 906.80 1.48 1,306,926 Indusind Bank Ltd 1,658.90 -1.62 1,301,731 #N/A 0.00 0.00 - Idea Cellular Ltd 82.05 -1.26 9,780,132 Icici Bank Ltd 321.05 -2.31 21,915,201 TOKYO Housing Development Finance 1,815.50 -0.77 2,785,825 Hindustan Unilever Ltd 1,352.10 -0.45 1,112,142 Hindalco Industries Ltd 247.65 -1.53 8,188,371 Company Name Lt Price % Chg Volume Hero Motocorp Ltd 3,494.20 -0.94 229,724 East Japan Railway Co 10,215.00 2.25 1,045,500 Hdfc Bank Limited 1,878.60 -0.18 935,542 Itochu Corp 2,005.50 0.55 3,973,400 Hcl Technologies Ltd 937.10 -0.28 3,386,758 Fujifilm Holdings Corp 4,327.00 1.55 1,561,000 Grasim Industries Ltd 1,100.05 -0.33 442,976 Yamato Holdings Co Ltd 2,696.50 0.20 2,073,600 Gail India Ltd 468.30 -1.60 1,407,527 Chubu Electric Power Co Inc 1,373.00 6.52 3,807,100 Dr. Reddy’s Laboratories 2,213.55 0.81 513,266 Mitsubishi Estate Co Ltd 1,856.50 0.08 3,931,300 Coal India Ltd 303.50 -1.49 2,079,150 Mitsubishi Heavy Industries 4,247.00 1.19 1,643,100 Cipla Ltd 611.10 0.87 976,316 Toshiba Corp 310.00 -1.59 33,896,000 Cairn India Ltd 0.00 0.00 - Shiseido Co Ltd 6,388.00 0.73 1,649,100 Bosch Ltd 19,553.60 0.26 5,671 Shionogi & Co Ltd 5,583.00 1.81 1,068,300 Bharti Airtel Ltd 419.70 -2.16 4,152,973 Tokyo Gas Co Ltd 2,634.50 2.45 1,241,700 Bharat Petroleum Corp Ltd 465.70 -1.97 2,652,251 Tokyo Electron Ltd 20,425.00 1.82 1,836,300 Bharat Heavy Electricals 94.30 -0.37 7,497,913 Panasonic Corp 1,604.00 1.74 8,705,500 Bank Of Baroda 152.40 -4.18 24,404,419 Fujitsu Ltd 649.10 -0.15 15,719,000 Bajaj Auto Ltd 3,103.90 -1.26 141,988 Central Japan Railway Co 19,625.00 0.62 247,400 Axis Bank Ltd 537.85 -1.08 4,166,213 T&D Holdings Inc 1,839.00 -0.81 1,866,500 Asian Paints Ltd 1,143.85 0.74 800,832 Toyota Motor Corp 7,208.00 0.92 7,113,800 Ambuja Cements Ltd 257.05 1.44 5,221,823 Kddi Corp 2,601.50 -0.19 8,220,200 Adani Ports And Special Econ 405.45 -1.52 1,859,545 Nitto Denko Corp 8,110.00 -0.69 1,314,000 Acc Ltd 1,650.60 1.81 542,635 Gulf Times 6 Saturday, February 17, 2018 BUSINESS/LEISURE Renault’s Ghosn pledges ‘irreversible’ alliance with Nissan

Bloomberg The shares were up 2.7% to €88.37 at that any change in the fi nancial struc- Paris 12:19am in Paris, giving Renault a mar- ture of the alliance would have to be ket value of €26.1bn. approved by both the French and Japa- France’s backing for Ghosn is a nese governments. He added that Ja- enault SA’s Carlos Ghosn turnabout from three years ago, when pan would not agree to a tighter struc- pledged to cement the French the two were at loggerheads over the ture if France remains a shareholder, Rautomaker’s partnership with state’s level of involvement in the com- underscoring comments he’s made Nissan Motor Co and Mitsubishi Mo- pany. Ghosn lost a clash with then- previously. tors Corp after agreeing to stay on as Economy Minister Emmanuel Macron “For the moment, I don’t see how chairman and chief executive offi cer over whether France and other long- the Japanese side is going to accept for the next four years. term shareholders should have double further steps,” Ghosn said. “I don’t see The companies will come up with voting rights. Ghosn argued in favour it.” a plan to “make the alliance irrevers- of one share, one vote, while Macron France raised its stake in 2015 while ible” during his new term, Ghosn said the state deserved a greater say. Macron, who is now president, was said yesterday after Renault reported His new mandate refl ects the pri- economy minister. The state currently record annual revenue and profi t. A orities of France, which owns a 15% has no plan to sell Renault shares, a new eff ort to boost effi ciency at the stake. The government supported the government offi cial said this week. three companies will be unveiled in nomination of Bollore, 54, a French Ghosn saved Nissan from near- the next few weeks, Ghosn told re- citizen who started his career with the collapse almost two decades ago and porters at the company’s headquar- tire-maker Cie Generale des Etablisse- spearheaded the globalisation drive ters near Paris. ments Michelin. that now unites carmakers across con- Ghosn’s reappointment, announced “We want to build new era of rela- tinents. He remains chairman at all late on Thursday, put to rest weeks of tions between Renault and the state,” three companies, after giving up the speculation about Renault’s leadership French Finance Minister Bruno Le CEO job at Nissan. He’s been CEO at and ensures the longtime CEO will Maire said on C-news TV. Renault since 2005, and oversees the continue to steer the company through Ghosn’s reappointment put to rest weeks of speculation about Renault’s leadership and ensures the longtime CEO will The new structure could give the three-way alliance as well. a potentially jarring technology tran- continue to steer the company through a potentially jarring technology transition. French government political cover to In the new four-year term, Ghosn sition. France, a top shareholder, had reduce its stake, ultimately making a will continue to focus on Renault’s demanded a 30% pay cut, succession freeing the busy executive to focus on Renault rose as much as 4.7% after demand for cars continues to expand full merger of Renault and Nissan “a strategic plan, called Drive the Future, planning and deeper ties with Nissan strengthening the alliance. The pro- the company reported operating prof- in Europe, the company said in a state- very real possibility,” Evercore ISI ana- aimed at guiding the carmaker through that can outlast Ghosn’s tenure. motion to chief operating offi cer puts it advanced 16% last year to €3.8bn ment. Renault’s AvtoVAZ, which sells lyst Arndt Ellinghorst said in a note industry shifts as more stringent pol- Renault named Thierry Bollore to Bollore in line to succeed his 63-year- ($4.8bn), beating analysts’ estimates. Lada cars, is also benefi ting from an this week. lution standards, electric vehicles and be second-in-command to Ghosn, old boss. Revenue jumped 15% to €58.8bn as improvement in Russia. Still, Ghosn cautioned yesterday self-driving technology take hold.

Sudoku Adam

Pooch Cafe

Sudoku is a puzzle Weekly’s Solutions based on a 9x9 grid. The grid is also divided into nine (3x3) boxes. You are given a selection of values and to complete the puzzle, you must fill the grid so that every column, every row and every 3x3 box contains the digits 1 to 9 and none is repeated.

Super Cryptic Clues Garfi eld

ACROSS DOWN 1. The nicest thing is being champion 1. Waits for the double: a man (5) Bound And Gagged (4,2,3) 2. Weapons for toy soldiers? (5-4) 6. For wrought copper, going round the 3. Fancy Nora going crazy. Mad (10) island (5) 4. A very quiet “Overwrought” that you go 9. As seen by the artist, had been attrac- along with (7) tive (5) 5. Still in the old clothes that you wore long ago 10. Call on with the money? (3,1,5) (7) 11. Promise only ham, not cooked (6,4) 6. Look out! There’s a big hole! (4) 12. She’d had a few the time after... (4) 7. I stood outside with her (5) 14. ...and called, in the outset, for a rum (7) 8. Having had no pointers, or instruction (9) 15. The feeling is a strange one; it is quite 13. Slim, becoming so wee and light (4,6) overwhelming, doctor (7) 14. Is it used for bits and pieces of laundry? (5-4) 17. An artist taking an unruly class of 16. Not well received? (3-6) scamps (7) 18. Patches up the exterior of the less modern 19. Attacked Lady Dell coming back (7) vessel (7) 20. Try to find out what to wear at the 19. Before the birds are up and about? That’s dance (4) wonderful! (7) 22. “Left” was said without thinking (7,3) 21. It’s in a bottle that’s coated (5) 25. Again gather you do, when the surface 23. The light is turned up when you give another veneer is damaged (9) knock (5) 26. Dress stand (3-2) 24. As soon as it’s over, the cruise ends (4) 27. Not any figure is to be inserted for the moment (5) 28. Possibly resent a little the insertion of a bribe (9)

Weekly’s Solutions

Across: 1 Remark; 4 Scampers; 10 Unloose; 11 Down: 1 Round one; 2 Mild flutter; 3 Rook; Air mail; 12 Daft; 13 Look across on; 16 Nougat; 5 Cracking; 6 Marionette; 7 Eva; 8 Silent; 9 17 Invests; 20 Stonily; 21 Stream; 24 Hard at Melon; 14 Net receipts; 15 Maintained; 18 work; 25 Nero; 27 Wagoner; 29 Snippet; 30 Floweret; 19 Importer; 22 Shower; 23 Cross; Rapidity; 31 Closer. 26 Will; 28 Gap.

Gulf Times 8 Saturday, February 17, 2018 BUSINESS

GKN chairman tells investors Melrose bid AT&T intensifi es battle is ‘low price, high risk’

Reuters 7.4bn pounds, which GKN swiftly London rejected. The off er consists of 1.49 new Melrose shares and 81 pence in for Time Warner by The £7.4bn ($10.4bn) hostile bid cash for each GKN share. for British engineering group Later on Thursday Melrose GKN from Melrose Industries said that Turner’s letter to GKN’s is “low price and high risk” and shareholders did not change undervalues the company, GKN Melrose’s stance on the off er. chairman Mike Turner said in a “Today’s document from GKN letter to shareholders. is another attempt to distract targeting Trump role Turner said Melrose has a from the real issue,” Melrose short-term business model that is chairman Christopher Miller Bloomberg “There’s been a lot of reporting inappropriate for GKN, criticising said in a market announcement, Washington and speculation, whether this a bid that has also attracted the adding that Melrose would not is all about CNN. And frankly, I attention of the British govern- cut corners in making necessary don’t know. But nobody should ment because of the company’s investment into GKN businesses. T&T Inc is pursuing an be surprised that the question position as a leading engineering Melrose said it would respond unprecedented strategy of keeps coming up, because we group and large employer. to GKN shareholders in detail in Ainjecting politics into the witness such an abrupt change With a market capitalisation of due course. fi ght to salvage its planned takeo- in the application of antitrust more than £7bn, GKN is a main- Melrose — the business ver of Time Warner Inc by threat- law here.” stay in the British engineering model of which is to buy engi- ening to call the head of the US Delrahim, who had served as sector, generating close to 1bn neering companies, improve Justice Department’s antitrust in the Justice Department’s an- pounds of UK sales. their margins and resell them division to testify about his deci- titrust division under President The FTSE 100 company has — already owns diversified sion to sue to block the merger. George W. Bush, commented British and US defence contracts manufacturer Nortek and the AT&T believes Trump and during a Canadian TV interview and employs more than 56,000 Brush electricity generating the head of the division, who on the Time Warner deal shortly people worldwide, including equipment business. previously worked at the White after it was announced in late about 6,000 in Britain. It has some experience of House and was appointed by 2016, saying he didn’t see it as GKN, which makes parts for aerospace after buying McKech- Trump, discussed the trans- “a major antitrust problem.” the Boeing 737 jet, Black Hawk nie, a manufacturer of aerospace action before the government Since taking the top anti- helicopter and components for components, and Dynacast, sued to block the deal in No- trust job, Delrahim has posi- Volkswagen and Ford cars, said which makes small precision vember, according to a person tioned himself as an aggressive its plan to separate its aerospace components, in 2005. familiar with the matter who enforcer who wants to bring and automotive divisions is It sold its aerospace and after- wasn’t authorised to discuss the sweeping change to the way the expected to deliver a £340mn market businesses in 2007. information publicly. agency handles mergers. One of recurring annual cash benefit Hitting back at Melrose, Turner The company is seeking com- his strongest positions is a dis- from the end of 2020. said GKN is six times the size of munications between the de- like for the traditional practice All of that benefit would be Melrose’s largest previous acquisi- partment and the White House of approving vertical mergers passed on to GKN shareholders, tion, adding that the Melrose board about the merger, and wants AT&T believes Trump and the head of the US Justice Department’s antitrust division, who previously like the Time Warner deal if the Turner added in the letter. lacks relevant experience at board to put the head of the division, worked at the White House and was appointed by Trump, discussed the company’s planned takeover of companies promise to adhere GKN pledged on Wednesday to level in several critical areas. Makan Delrahim, on its witness Time Warner Inc before the government sued to block the deal in November, according to sources. to certain conditions on how return £2.5bn to investors over the Turner reiterated GKN’s recom- list, another person said. they do business. Delrahim’s next three years, stepping up its mendation to shareholder to The move carries potential dent, because we want to stick it distribution channels with Time hearing with the judge on Mon- decision to draw that line with eff orts to fend off the hostile bid. take no action in relation to the risks and rewards. Evidence to CNN,’” Carrier said. “I see this Warner’s content. The lawsuit day and declined to comment the fi rst major cross-industry Melrose made a firm off er to Melrose off er, saying the bidder that Trump, a relentless critic as a way of kicking up some dirt.” was a surprising setback to a on what was discussed. merger pits him against an army buy GKN on January 17, valued is more focused on financial engi- of Time Warner’s CNN and an If approved, the merger deal that seemed on track for ap- AT&T and the Justice De- of well-paid AT&T lawyers and at 430.1 pence per share or neering than real engineering. opponent of the merger, pushed would reshape the media land- proval, just as Comcast Corp’s partment declined to comment a history of approval decisions the Justice Department to sue scape by uniting a telecom giant prior purchase of NBCUniversal, on Wednesday. “This is a matter that hinged on conditions. would undermine the govern- with the owner of CNN, Warn- which combined distribution to be discussed in court, not the If the Justice Department ment’s credibility. But Delrahim er Bros, TNT, TBS and HBO. and content, was cleared by the press, and as we have consist- objects to AT&T’s plan to put may welcome the chance to de- AT&T, the owner of DirecTV, is Justice Department. ently told all reporters yesterday Delrahim on the witness list, fend the case as a legitimate en- the largest pay-TV distributor, Bloomberg reported in No- and today, we will reserve com- the judge will have to decide forcement action that was fi led as well as a powerhouse in mo- vember that AT&T intended ment on it for the courtroom,” whether his testimony is rel- without political infl uence. bile phones and landlines. The to dig into whether the White Dan Petrocelli, lead trial coun- evant to the government’s claim Delrahim’s case is based on Justice Department has argued House infl uenced the decision sel for Time Warner and AT&T, that the combination will harm a strong complaint that lays that letting AT&T own the fi lms to sue the companies. The New said in a statement. competition, said Matthew out how the combination will and TV shows that fl ow down York Times earlier reported on AT&T immediately respond- Cantor, an antitrust lawyer at harm consumers, even though its pipes would harm consumers AT&T’s plan to put Delrahim on ed to the lawsuit, vowing to Constantine Cannon. “It could the lawsuit may seem politi- and competitors. the witness list. fi ght the case in court and call- be AT&T wants to make the cally motivated given Trump’s The White House and the The dispute over AT&T’s re- ing out Delrahim’s change of Justice Department argue these criticism of CNN, said Michael Justice Department have denied quests will probably become tone, pointing to comments he’s issues are irrelevant or make it A GKN Aerospace sign is seen outside the company’s stand Carrier, a law professor at Rut- Trump had any involvement in public today at a hearing in made over time on the deal. look like the Justice Department at the International Air Show in Farnborough (file). GKN said gers University who specializes the review. Delrahim says the Washington before US District “I do want to address the el- is concerned about Mr Delrahim its plan to separate its aerospace and automotive divisions is in antitrust. “I just can’t see a $85.4bn merger would raise Judge Richard Leon, who is ephant in the room here,” AT&T testifying, so even if they lose, expected to deliver a £340mn recurring annual cash benefit smoking gun where he’d say, costs for consumers and reduce overseeing the case. Lawyers for chief executive offi cer Randall they sort of win a public rela- from the end of 2020. ‘Let’s bring this case, Mr. Presi- choice by combining AT&T’s both sides held a closed-door Stephenson said at the time. tions victory,” Cantor said. Gulf Times Saturday, February 17, 2018 9 BUSINESS

Sensex sheds 287 points; rupee weakens to 64.22

Bloomberg/Reuters parties including Gitanjali Mumbai Group. Gitanjali Gems sank 20% for a second consecutive session. All but one of 19 sub-indexes ndia’s benchmark equity in- compiled by BSE declined, led by dex declined as a widening a gauge of auto makers and metal Itrade defi cit and the over- companies. hang of a fraud complaint by Meanwhile the rupee weak- Punjab National Bank weighed ened against the US dollar yes- on investor sentiment. terday after nation’s trade defi - The benchmark Sensex in- cit widened to 56-month high dex fell 0.84%, or 286.71 points, on higher oil and gold imports. to 34,010.76. So far this year, Fall in local equity market also Sensex fell 0.14%. dampened sentiment. ICICI Bank contributed the The home currency closed most to the decline, falling 2.3%. at 64.22, down 0.35% from its State Bank of India was the worst previous close of 63.91. The lo- performer, losing 2.6%. Most cal currency opened 63.89 and Asian markets are shut for Lunar touched a high and a low of 63.82 New Year holidays. and 64.23, respectively. “Imports rising faster than Trade defi cit widened to exports and concern around $16.29bn in January as compared the alleged fraud at Punjab Na- with $14.88bn from a year ago, tional Bank have overcome op- government data showed. Mer- timism that was driven by global chandise imports surged nearly cues,” said Anita Gandhi, direc- 26.1% last month year-on-year Currency traders work in the dealing room of a foreign exchange brokerage in Tokyo (file). The yen has rallied against all its developed-market peers this month as the global tor at Arihant Capital Markets. to $40.68bn. stock rout that began in early February boosted haven assets. “There’s a lack of confi dence India’s 10-year bond yield and everyone is groping in the ended at 7.579% compared to its dark to understand the tune of Thursday close of 7.573%. Bond money lost and how it will be re- yields and prices move in oppo- covered.” site directions. India’s trade gap widened the Since the beginning of this most in four years in January year, the rupee has fallen 0.54%, as imports surged and export while foreign institutional in- growth slipped, a report that vestors have bought $1.04bn came after yesterday’s market from local equity and $1.86bn in Yen bulls betting on close showed. Separately, Punjab debt markets. National Bank said earlier this Asian currencies were trading week it had detected a fraud in higher. South Korean won was its Mumbai branch. up 0.86%, Indonesian rupiah The bank dropped 2.1%, ex- 0.42%, Thai baht 0.18%, Taiwan tending its loss since Wednesday dollar 0.16%, Singapore dollar to 22%. India’s second-largest 0.11% and China off shore 0.1%. state-run lender has fi led com- However, Philippines peso was BoJ bask in stock plaints with India’s Central Bu- down 0.21% and Japanese yen reau of Investigation against fell 0.06%.

Asia markets end higher as volatility fears ease Asian stock markets climbed Japanese stocks, Sony rose yesterday in thin holiday trade, 1.75% to ¥5,264 and Toyota rout, add to wagers led by gains in Tokyo, as volatility gained 0.92% to ¥7,208. Tokyo eased after last week’s roller- Electron, a manufacturer of Bloomberg head of a dynamic investment fund at day before. It held those gains even after the Federal Open Market Committee on coaster ride. chip-making equipment, added Singapore AMP Capital in Sydney, which oversees Governor Haruhiko Kuroda took pains March 20-21. Tokyo tracked Wall Street 1.81% to ¥20,425 after a broker- about $137bn. “This is a trade with an ex- to stress the BoJ is still committed to its ‘Another Leg’: “There’s a risk that higher as investors gradually age upgraded its estimate of the cellent risk/reward on its own, as well as easing policy. the recent volatility will continue as regained confidence head- firm’s value. en bulls who were betting the an valuable hedge against my exposure in Traders betting on the yen are still markets attempt to bully the Fed chair- ing into the weekend and set On Thursday Wall Street had Bank of Japan will edge away from cyclical equity sectors.” looking to see some gains from tweaks to man around his fi rst widely expected rate aside inflation fears that had continued its rebound from a six- Ymonetary stimulus are basking in The yen has rallied against all its de- BoJ policy, though uncertainty over the hike,” AMP Capital’s Naeimi said. “I’m sparked the market meltdown day losing stretch that sent major this month’s global stock slump, which veloped-market peers this month as the composition of the board is holding them expecting another leg down in markets last week. indices down more than 10% — has propelled the currency to the strong- global stock rout that began in early Feb- back. in early March into the FOMC to set the The benchmark Nikkei 225 in- considered correction territory. est in 15 months. ruary boosted haven assets. While local media reported last week stage for a durable market rebound into dex gained 1.19%, or 255.27 points, US indices closed higher for the AMP Capital Investors’ Nader Naeimi The currency is typically supported in that Prime Minister Shinzo Abe is set to the second quarter.” to 21,720.25 while the broader fifth straight session, with the S&P this week added to his long yen positions, times of market turmoil by the fact Japan nominate Kuroda for another fi ve-year Another way funds are playing the yen Topix index was up 1.05%, or 18.10 500 and Dow Jones Industrial wagering the currency will strengthen runs a current-account surplus. The yen term, the identities of his two deputies is seeking to profi t from its increasing points, at 1,737.37. Average both gaining 1.2%. against the dollar, pound and Philippine extended gains to 106.18 per dollar on are still unknown. volatility. One-month implied volatility However, trading was generally There were also gains in Eu- peso among others. Thursday, the strongest since Novem- “One risk event now is the new BoJ for the dollar-yen currency pair, a meas- subdued in the region as many rope, though more muted. Singapore-based Kit Trading Fund, a ber 2016, as Japan’s Finance Minister leadership,” said Keith Dack, a hedge- ure of anticipated price swings based on markets, including in China, Hong As for other markets open in hedge fund, is betting the yen will ap- Taro Aso said the currency’s move wasn’t fund manager at Kit Trading Fund in options, jumped to 10.8% on February 6, Kong and South Korea, were Asia, the Australian ASX ended preciate against the US and New Zealand abrupt enough to require intervention. Singapore. “I have been in and out of the highest since April. closed for the Chinese New Year fractionally down 0.08%. dollars, while Vantage Point Asset Man- Taking pains: Many yen bulls initial- yen, but am currently short dollar-yen “The yen and yen volatility tend to break. The New Zealand market fared agement Pte favours a long position in ly entered the trade predicting the cur- and New Zealand dollar-yen.” act as a safe haven when global cross- “Risk-averse attitude will be better, closing up nearly 0.77%. dollar-yen volatility. rency would benefi t as the Bank of Japan Uncertainty surrounding the path of asset volatility increases,” said Nicholas receding gradually with a sense In Tokyo, the Nikkei 225 closed “On Tuesday, I reinstated the signifi - moves toward removing its record stim- Federal Reserve tightening may also con- Ferres, chief investment offi cer at Van- of bottoming out in US shares,” up 1.2% at 21,720.25 points. Hong cant long yen positions against the Tai- ulus. The currency jumped more than 1% tinue to roil fi nancial markets and bolster tage Point in Singapore. “Yen volatility is Okasan Online Securities said. Kong and Shanghai closed for a wan dollar, Singapore dollar, US dollar, on January 10 after the central bank cut Japan’s currency. New Chairman Jer- also negatively correlated to global busi- Among major individual public holiday. pound and Philippine peso,” said Naeimi, purchases of longer-maturity bonds the ome Powell oversees his fi rst meeting of ness sentiment.”

Asia’s biggest private equity buyer said to seek $6bn Risk appetite lifts EM equities

Bloomberg used its Gaoling Fund to make long-term Reuters Hong Kong investments in both publicly-traded and London privately-held companies. It raised $2.2bn in 2014 for its first pool Hillhouse Capital Management, the dedicated to private-equity investments. ekindled risk appetite helped emerging Chinese investment firm that last year A second such fund gathered $4.2bn in equities and currencies to strong weekly helped lead Asia’s biggest-ever buyout early 2016. Rgains, with South African markets taking deal, is targeting to raise about $6bn in An investor group including Hillhouse the limelight after Cyril Ramaphosa was sworn a new private equity fund, people with and Hopu Investment Management in as president of Africa’s most industrialised knowledge of the matter said. agreed last year to buy Singapore-based economy. Hillhouse has started gauging interest warehouse operator Global Logistic Following two weeks of hefty losses, MSCI’s from potential investors, one of the people Properties for about S$16bn ($12bn). That emerging markets index was on track for a near said, asking not to be identified because deal surpassed the 2016 takeover of 6% rise since Monday — the benchmark’s best the information is private. If successful, Qihoo 360 Technology Co as the largest- week in nearly two years. it will be the biggest dollar buyout pool ever buyout of an Asian company, data The gains refl ected a move higher across major raised by the firm, which started in compiled by Bloomberg show. bourses, with global equity indexes shrugging off 2005 with $20mn from Yale University’s Hillhouse teamed up with CDH the latest sign of increasing US infl ation this week endowment. Investments in last year’s $6.8bn buyout and Treasury yields edging towards multi-year Founder Zhang Lei parlayed that initial of Belle International Holdings, the biggest highs. capital into the more than $35bn of women’s footwear retailer in China. It’s In late January, it was faster US infl ation that assets that Hillhouse manages today. also an investor in BeiGene, the Chinese spooked bond markets and sparked a broad sell- The investment firm was an early backer cancer drug developer whose shares have off around the globe. of Tencent Holdings, which is now Asia’s more than tripled in US trading over the “The US inflation print did not derail the biggest Internet company, and Chinese past year. sentiment in core markets and — even though e-commerce operator JD.com. The firm has been beefing up its executive yields marched higher — equities were able to Hillhouse participated in more private ranks. Mervyn Chow, who was Credit shrug off those pressures...and this risk appe- equity purchases in Asia Pacific last year Suisse Group’s most senior China banker, tite definitely helped lift EM assets,” said Inan But it was South African markets that stole the closer to 8%. These levels were last seen 2-1/2 than any other investment firm, racking will join Hillhouse in a senior role in March Demir, senior emerging economist at Nomura show after Ramaphosa was sworn in as presi- years ago, weeks before the fi ring of respected fi - up $26bn of transactions, according to focusing on the private equity business, a International. dent, bringing to an end Jacob Zuma’s nine-year nance minister Pravin Gordhan, which pummeled data compiled by Bloomberg. It beat Bain person with knowledge of the matter said “Looking at the very short-term, that senti- tenure, which had been blighted by corruption investor confi dence. Capital, which was involved in $20.5bn of last month. ment may remain in place, but at some point we scandals, stagnant economic growth and policy Johannesburg’s main stock index has gained deals in the region, and KKR & Co, which Private equity funds raised a record will have to reconcile the rise in bond yields, the uncertainty. more than 6% since Monday and is on track for its announced $16bn of acquisitions, the data $453bn globally last year, as investors rise in infl ation, perhaps a repricing of the Fed rate The rand took another leg higher, strengthen- best week in nearly a decade. show. sought out higher returns than what’s hike path with the current strength of risk appe- ing 0.3% to trade at its fi rmest level in three years, Given the favourable backdrop in emerging The capital raising is still at an early stage, available from the public markets, tite,” he added. and on track for a near 4% gain over the week. markets in general, South Africa is well placed and details of Hillhouse’s plans could according to Preqin. A growing portion of The dollar continued its slide and was set for its The currency has fi rmed nearly 7% since the to enjoy its moment in the sun, said Nomura’s change, the people said. A representative money went to the largest funds, and it worst week in two years against a basket of cur- start of the year against the dollar — topping the Demir. for Hillhouse declined to comment. took managers less time to reach capital- rencies, setting the stage for emerging currencies list of best performing currencies around the “(Ramaphosa) will enjoy the benefit of the Zhang, a Yale alumnus who went on to raising targets. KKR said in June it raised to chalk up gains over the week. globe. doubt for quite some time, and markets will work at the university’s investment off ice $9.3bn for its third Asia fund, amassing the Russia’s rouble fi rmed 3.6% over the week As investors prepared to hear Ramaphosa’s tend to look at the South African develop- led by David Swensen, founded Hillhouse biggest ever pool by a private equity firm against the greenback, fi nding support from oil plans on tackling corruption and boosting growth ments in a more positive light,” he said. “But at in 2005. In its early years, Hillhouse in the region. prices and healthy economic data. Turkey’s lira in his fi rst state of the nation address due later in some point delivery rather than promises will advanced nearly 2% over the same time. the day, local 10-year benchmark yields edged be important.” Gulf Times 10 Saturday, February 17, 2018 BUSINESS US equity investors shrug off higher yields, for now

Reuters continuing to follow through on some infl ation data showing US consumer yields threaten stocks because they that should perform well during an im- ment strategist at Baird in Milwaukee. New York of the upward movement that we saw prices rose more than expected in present investment competition fol- proving economy, including fi nancials “If growth is accelerating and moving earlier in the year that is related to glo- January. “The equity markets had to lowing years of very low rates that sup- and consumer discretionary stocks. higher, then along the way we can han- bal growth,” said Tracie McMillion, reprice for this (higher yield) environ- ported equities. Increasing rates also Since October, the S&P 500 and 10- dle higher levels.” pooked one week, sanguine the head of global asset allocation strategy ment, and now the stock market is say- could indicate a tightening of econom- year Treasury yields have been posi- The biggest risk from rates is a fast next. Some stock investors are at Wells Fargo Investment Institute in ing: ‘We’re OK with this, Game On’,” ic conditions. tively correlated, moving in the same move higher in yields that catches Sdrawing optimism from the mar- Winston-Salem, North Carolina. said Jason Ware, Chief Investment Of- “I think the turnaround in the equity direction, when viewed over a mid- the market off guard, as opposed to ket’s ability to move upwards in the Rising yields spooked the stock mar- fi cer of Albion Financial in Utah, who market was more associated with an term, 60-day period, according to breaching a specifi c level, Delwiche face of loftier yields — even though ket last week, following employment said he still preferred stocks to bonds. improving economy and removing the Thomson Reuters data. said. But if the benchmark 10-year those higher yields were partly blamed data yesterday that caused concerns “It’s still a no brainer,” Ware said. focus on the yield environment,” said But the move higher came as bond tops 3%, that could cause some fear for for last week’s violent selloff . about infl ationary pressures. “The total return for equities is so Robert Pavlik, chief investment strate- yields were rising off of very low levels. stock investors, said Brian Shepardson, Those investors are optimistic about However, this week has seen a rising much more attractive than the meagre gist, senior portfolio manager at Slate- The benchmark 10-year yield hov- portfolio manager for the James Bal- economic growth, and stocks that can stock market, despite yields remaining income you get from bonds.” Stone Wealth in New York. ered on Thursday around 2.90% after anced Golden Rainbow fund, in Alpha, benefi t from that environment, al- near their four-year-high. Wednesday’s rise in stocks also came “The market switched its attention touching a more-than four year high Ohio. though they concede the overhanging Wednesday’s move up in stocks — as volatility levels had fallen, with the to, ‘OK, we have an expanding econo- during the session. “If higher rates are what caused the risk that a sharp spike in yields could including a 1.3% surge for the S&P 500 Cboe Volatility index dropping into the my, it’s not running so hot that I have “If the economy is accelerating then market to pull back, that is still a con- cause another rout. — came even as the benchmark 10- 20s after rising as high as 50 a week to be overly worried about interest we should be able to handle higher cern,” Shepardson said. “Nothing has “Even though yields are moving year Treasury’s yield rose from 2.84% earlier, and coincided with expiring rates.’” bond yields and not derail the econ- changed fundamentally within the higher, the equity market seems to be to 2.91%, following closely watched VIX futures and options. Rising bond Pavlik and McMillion favour sectors omy,” said Willie Delwiche, invest- market.” Steelmakers seek stricter EPA rule Ray Dalio raises bets to keep mercury out of plants against Europe’s top

By Pat Rizzuto can cause tremors, inability to Bloomberg Law walk, convulsions, birth de- fects, and even death, accord- ing to the EPA. Methylmercury S steelmakers want the also persists in the environment EPA to tighten a draft and accumulates up the food companies to $22bn Umercury reporting rule chain, where people are exposed to help them keep the toxic metal through eating fi sh and shellfi sh. Bloomberg out of their supply chains. Semiconductor, automobile, New York An Environmental Protection and pharmaceutical fi rms said Agency proposal would deprive the EPA’s proposed rule rightly steel makers of information they exempts some manufacturers ay Dalio, billionaire philosopher- need to prevent mercury-con- and importers from reporting. king of the world’s biggest hedge taining switches, lamps, batter- But environmental groups and Rfund, has a checklist to iden- ies, and other equipment from states are urging a focus on im- tify the best time to sell stocks: a strong getting into their scrap recycling porters as domestic manufac- economy, close to full employment and feedstocks, Eric Stuart, vice turers have already taken steps rising interest rates. president for environment and to reduce mercury use. That may explain why the fi rm he cre- energy at the Steel Manufactur- If the EPA exempts imported ated, Bridgewater Associates, has caused ers Association, told Bloomberg products containing batter- a to-do the past two weeks by quickly Environment. ies, lamps, switches, relays, or amassing an $18bn bet against Europe’s Collecting more information other components, the agency biggest companies. The fi rm’s total asset could help steel makers prevent won’t know what the US supply, pool is $150bn, according to its website. mercury from ending up in their use, and trade of mercury and Economic conditions in Europe appear manufacturing plants, where it mercury compounds is, David to fi t Dalio’s requirements. Last year, the can contaminate their products, Lennett, a senior attorney with continent’s economy grew at the fastest have to be captured from smoke the Natural Resources Defense pace in a decade, and European Central stacks, or be managed for recy- Council, told Bloomberg Envi- Bank President Mario Draghi has indi- cling, Stuart said. ronment. cated he’s on a slow path toward boosting The EPA proposed rule would Without information on mer- rates as economic slack narrows. Facto- largely exempt manufacturers cury volumes, products with ries around the world are fi nding it in- and importers of products with mercury-containing switches creasingly hard to keep up with demand, mercury-added components might not be tracked through potentially forcing them to raise prices. such as switches from reporting commerce, Terri Goldberg, ex- But Dalio is leading his fi rm down a the volume of the metal in those ecutive director of the Northeast path that few other funds care to tread. goods and the distribution of Waste Management Offi cials’ Renaissance Technologies, most re- those components in commerce, Association, told Bloomberg En- cently famous for its association with Stuart said. The EPA must fi nal- vironment. Breitbart donor Robert Mercer, is only ise the rule by June 22. Armed with information on $42mn short in Europe. Two Sigma In- The draft reporting rule switches starting in 2006, steel vestments is betting even less than that. (RIN:2070-AK22) would require makers diverted more than 7.35 Kenneth Griffi n’s Citadel has less than mining companies, pharmaceu- tonnes of mercury through a Na- $2bn in European company shorts. tical manufacturers, and metal tional Vehicle Switch Recovery So Dalio will rise or fall virtually on his smelters not historically regu- Program designed to pull out a own. Bridgewater didn’t respond to re- lated by the nation’s chemicals known type of mercury-con- quests for comment. law to report to the EPA if they taining switch automakers used, “It is not unusual to see strong econo- short positions. The initial bet was even- hairs, but the short list started including long equities positions in the US by make or import mercury, add it Stuart said. mies accompanied by falling stock and tually raised to encompass 18 fi rms and members of the Euro Stoxx 50 Index, the more than $5bn. to products, or intentionally use But an industry coalition rep- other asset prices, which is curious to nearly $3bn. eurozone’s blue-chip index. The posi- Dalio’s economic preconditions to sell, it in manufacturing processes. resentative says the agency’s people who wonder why stocks go down Bridgewater had fl ipped its portfolio tions against Stoxx 50 companies are be- or short, stocks isn’t unique to Europe. The EPA would develop a mer- proposal makes it hard to un- when the economy is strong and don’t in January to turn bearish on Western ing made roughly in proportion to their The US has seen wage gains accelerate as cury inventory and recommend derstand when reporting is re- understand how this dynamic works,” Europe stocks and also started shorting weight within the index. the jobless rate hovers near a 17-year low. what regulations or other actions quired. It’s hard to tell “who’s in Dalio wrote in a LinkedIn post this week. Japanese equities, according to a person Among the powerhouses Bridgewater Despite recent fl uctuations in the stock should be taken to further reduce and who’s out” when it comes to Bridgewater’s shorting spree started with knowledge of the matter. The hedge is shorting: Munich-based engineering market, Federal Reserve Chairman Jer- mercury exposures. Reducing reporting, said Lawrence Cul- last fall in Italy. fund signifi cantly raised its long US eq- giant Siemens AG; Airbus SE, the air- ome Powell suggested that the US cen- mercury use is the primary goal leen, an attorney in Washington With the country’s big banks accumu- uities exposure last month, the person plane and military-equipment manufac- tral bank would continue on the path of of the Minamata Convention, a with Arnold & Porter Kaye Sc- lating billions in bad debt, Bridgewater added. A Bridgewater representative did turer; French bank BNP Paribas SA and gradual interest-rate increases. And this global treaty that the US was the holer LLP, which represents the mounted a $770mn wager against Italian not reply to a call and email seeking com- Dutch bank ING Group NV; Paris-based week Dalio identifi ed a rising “risk of a fi rst nation to join in 2013. Chemical Users Coalition. fi nancial stocks. Saddled with non-per- ment outside normal working hours. entertainment and telecom company recession in the next 18-24 months.” When transformed into meth- The coalition includes elec- forming loans and under constant regula- Around the beginning of February, Vivendi; drugmaker Sanofi ; Nokia OYJ, But Bridgewater’s trades in the US ylmercury in the environment, tronic and aircraft manufactur- tory scrutiny, they made for a juicy target. Dalio was telling the World Economic the Finnish tech fi rm; and the French oil remain a mystery. The Eurozone re- the metal becomes neurotoxic. ers such as the Boeing Co, IBM Throughout the fall and into winter Forum in Davos, Switzerland, they’d behemoth Total SA. quires that investors disclose their Low doses can decrease mo- Co, Intel Corp, and Lockheed the bet against Italy represented the ma- “feel pretty stupid” for holding cash. Bridgewater’s short bets in Europe short bets once they pass a certain size. tor skills, while high exposures Martin Corp. jority of Bridgewater’s publicly disclosed Italian fi nancials remained in the cross- exceed the dollar value of its disclosed The US does not. Nickel flies on supply hits; Indonesia could ground it

By Andy Home the country upended the nickel market LME nickel stocks are “noisy” with Wood Mackenzie, will be to boost Chinese London with its ban on exports of ore, it is set to much two-way traff ic at locations such as output of NPI, the intermediate product return to the world stage, bigger and more Johor but the net outcome last year was a between ore and stainless steel on the integrated than ever before. minimal decline of 5,454 tonnes. nickel process flow-chart. Nickel has enjoyed a blistering start to Brazil’s Vale kick-started this rally with a So far this year the clear trend has been Chinese NPI production this year is 2018. On the London Metal Exchange December 6 announcement it was cutting downwards with a 27,654-tonne, 7.6% fall. expected to match the previous 2013-2014 (LME) three-month nickel has this week production by 15%, or 45,000 tonnes, in Set against such supply cuts is the peak of 480,000-500,000 tonnes. punched up through the $14,000 level for 2018 to “preserve its nickel optionality”. return of Indonesia as a major producer This, however, is no longer just a China the first time since May 2015 to hit a Thurs- It was a reminder of just how low nickel and exporter of nickel. story. Most of those receiving their export day high of $14,420 per tonne. prices have fallen in the last couple of Indonesia banned the export of all un- permits are companies that have built out It has gained 10% since the start of years but a welcome, if belated, sign of processed minerals, including nickel ore, NPI capacity in Indonesia itself. the year and has bounced 34% from its industry leadership. If Vale lit the fire, extra at the start of 2014. The aim was to force Flows to China of Indonesian intermedi- December low of $10,740 per tonne. fuel came from one of those totally un- the creation of a value-added processing ate nickel, some ferronickel but mostly Speculative money has poured into this foreseen incidents that plague commodity industry. NPI, totalled 989,000 tonnes last year. hot market, fund managers tripling their forecasting. Those plans are now starting to bear Wood Mackenzie expects Indonesia’s net long exposure to the London contract A tropical cyclone swept across the fruit and the Indonesian government is own NPI production to hit 220,000 tonnes over the course of December and January. island of Madagascar early January, rewarding investors with a relaxation on this year as ever more plants make it into Shanghai investors have been equally causing damage to the Ambatovy nickel the export rules. After a three-year hiatus production. Underpinning this domestic enthusiastic, albeit with a Chinese twist operations. Production was halted and is flows of Indonesian ore to China started industrial build-out will be a 50-percent of treating nickel as a bullish steel rebar only now ramping up again. Slowly. showing up in the Chinese trade figures lift in Indonesian nickel mine production, derivative. Nickel is basking in the electric Sumitomo Corp, now the largest from April last year. according to Wood Mackenzie. vehicle glow but the full demand impact is shareholder in the joint venture after a pig iron (NPI) producers in Shandong smelter. The aff ected 30,000 tonnes of Total imports were 3.8mn tonnes bulk If that sounds a fast rate of growth, con- still in the future. restructuring late last year, said it expects province were among the industrial sec- capacity will take around three months to weight through December. More will sider the assessment by the International Right now, rather, this is a good old- the plant to run at an average 50% utilisa- tors required to reduce operating rates for rebuild, although there is potential off set follow. The Indonesian authorities have Nickel Study Group that Indonesian output fashioned commodity story of strong tion this quarter. the winter heating season running from from other parts of the plant, reported issued permits for 20.4mn tonnes of grew by 85% to 325,000 tonnes in the first demand from the global stainless sector, Production of refined nickel will fall mid-November through mid-March. Shanghai Metals Market. exports through October this year. 11 months of 2017. falling stocks and supply hits, both expect- from 40,500 tonnes to 33,400 tonnes in Unexpected disruption came in the These supply hits, both planned and un- One producer alone, Aneka Tambang, is ed and unexpected. Indonesia, however, the year to March. Chinese supply, mean- form of a December 31 fire at Jinchuan planned, both Western and Chinese, seem planning to ship 3.9mn tonnes this year. „ Andy Home is a columnist for Reuters. is waiting in the wings. Four years after while, has also taken a double hit. Nickel Group’s giant 135,000-tonne-per year to be feeding draws on LME inventory. The result, according to analysts at The views expressed are those of the author. Gulf Times Saturday, February 17, 2018 11 BUSINESS

VTB buys $2.5bn Magnit Co-owners of Nornickel stake as founding owner quits

Bloomberg back in fi ght for control Moscow Potanin off ered to buy State-controlled VTB Group Abramovich’s stake in Nornickel; is buying 29% of Magnit from Rusal seeks injunction in London billionaire Sergey Galitskiy, who court; Nornickel shares fall said investors don’t trust his vi- sharply in Moscow sion for Russia’s second-largest food retailer after its share price Reuters plunged in the past year. Moscow/London Galitskiy will quit as chief executive off icer after selling 138bn roubles ($2.5bn) of shares power struggle over Norilsk to VTB, Magnit said in a regula- Nickel (Nornickel) resurfaced tory filing. At 4,660.91 roubles a Ayesterday as billionaire Vladimir share, that implies a discount of Potanin off ered to buy Roman Abram- almost 4% to the previous close. ovich’s stake in the mining group, and Magnit dropped as much as 7% a third businessman — Oleg Deripaska in Moscow trading yesterday, to — tried to block the deal. the lowest since 2012. The fi ght between the billionaires re- Galitskiy said he decided vives a long-running battle for control to sell because his views on of Nornickel, a $33bn mining company, running the company clashed which competes with Brazil’s Vale SA with those of portfolio inves- for the rank of the world’s top nickel tors, as the market demanded producer. fast growth and he preferred to It is also the world’s largest palladi- focus on profitability, Interfax um producer. reported. “If investors want Deripaska and Potanin, who is Nor- changes, they should get them,” nickel’s largest shareholder, have pe- he said, according to the news riodically been at loggerheads since service. He will maintain a 3% Deripaska’s aluminium group Rusal stake. bought a stake in Nornickel just before While he built Magnit from the 2008 global crash. scratch into an empire of more Rusal currently owns 27.8% of Nor- than 16,000 stores over the past nickel. two decades, generating rev- Chelsea soccer club owner Abram- enue of almost $20bn last year, ovich stepped up as a “white knight” Galitskiy struggled to manage minority shareholder, to act as a buff er the expansion as the economy between Potanin and Deripaska in 2012. slowed and he lost customers to The peace deal involved a fi ve-year The headquarters of Norilsk Nickel in Moscow. A power struggle over Nornickel resurfaced yesterday as billionaire Vladimir Potanin off ered to buy Roman Abramovich’s rivals. Magnit’s shares have lost lock-up period, during which they stake in the mining group, and a third businessman — Oleg Deripaska — tried to block the deal. more than 50% of their value could not sell most of their Nornickel over the last 12 months as the stakes. off er it to the other two participants of to delay the injunction hearing until the (possible) sale of Roman Abramovich’s spokesman Dmitry Peskov told report- pace of sales growth slowed This ended in late 2017. Potanin made the agreement. It was not clear wheth- week of March 5. The parties in the case stake after the end of the lockup period ers yesterday. “The company is devel- and the company lost market an off er to purchase a stake in Nornick- er Abramovich also off ered his stake also asked the court for a trial before is negative for sentiment, but unlikely oping dynamically and is demonstrat- leadership to billionaire Mikhail el from Abramovich and his partners, to Rusal. Abramovich and his partners June. to trigger a turnaround in the opera- ing very positive results. Fridman’s X5 Retail Group NV. Potanin’s asset manager Interros Hold- hold 4.2% in Nornickel, via rispian, A lawyer for a fi rm controlled by tional or dividend strategy of the nickel We hope that ongoing discussions, if “This story looks weird,” ing told Reuters yesterday. while their total stake is estimated at Potanin told the court that fi nancing producer.” they really are ongoing, will not aff ect Vadim Bit-Avragim, a money Potanin also received a counter of- 6.3%. Potanin, also Nornickel’s chief for the potential purchase of the Nor- Nornickel’s dividend payments have the positive dynamic of the company’s manager at Kapital Asset fer to buy the stake from Abramovich executive, has 30.4% of Nornickel. nickel stake from Abramovich was al- been important for all shareholders, es- development,” he added. Management in Moscow, said and partners, in line with a Nornickel Rusal is now seeking an injunction ready in place. pecially for Rusal in years when global A source familiar with the situa- by phone. “Many foreigners shareholder agreement, Interros also in a London court to block the possible Rusal and Nornickel declined to prices for aluminium which it produces tion said that Deripaska did not want bought Magnit because of their said. deal, Interros said. Interros also said it comment. A representative of Abram- were weak. In 2012, the peace deal be- to remain as a minority shareholder in appreciation for Galitskiy’s Interros did not disclose the size of believed Rusal’s claim against the pos- ovich also declined to comment. tween Potanin and Deripaska was bro- Nornickel if Abramovich were to sell his business acumen. With his exit, the stakes involved in the off ers. sible deal was unjustifi ed. Nornickel shares were down more kered by the Kremlin. stake, leaving Deripaska one-on-one many investors are going to Their agreement has a “right of fi rst Stephen Phillips, the judge hearing than 8% in Moscow yesterday, under- “The Kremlin cannot get involved in with Potanin. wonder about how eff ective the refusal”, which means that a sharehold- the case in the London court, said yes- performing a 0.4% decline in MICEX relationship of shareholders...We are “That is why he is trying to freeze the new owner is going to be.” er who gets an off er for his stake should terday he would allow parties involved index. Analysts at Aton said: “The following this on the news,” Kremlin process,” the source said. Chief financial off icer Khach- atur Pombukhchan will become Magnit’s new CEO, pending approval of the deal, according to VTB. Gazprom’s investments seen peaking in 2018-2020 “It is purely an investment decision,” VTB’s first deputy CEO Yuri Soloviev told reporters Reuters hopeless, sources at the producers said. ment. Gazprom did not respond. their client,” a company spokesman said, of metals and mining research at Alfa in Sochi, dismissing concerns Moscow “You can’t say no to Gazprom,” one told Severstal, which supplied a quarter of adding that it was buying steel “at a more Bank, said. about the Russian state’s grow- Reuters. Gazprom’s LDP needs in the first half of optimal price”. Apart from the large investment pro- ing presence in the economy. Gazprom’s demands for discounts con- last year, said it was continuing to make ZTZ is ramping up production at its gramme, Gazprom’s costs could be further “When we bought a stake in the Gas giant Gazprom is demanding big cern large diameter pipes (LDP), a market and deliver pipes from its factory in St plant near Moscow just as domestic under pressure from external factors, Burger King franchise, did you discounts from Russian pipeline suppliers which is currently oversupplied, one Petersburg following negotiations with demand for LDP is falling. particularly with the Nord Stream 2 which worry about the state takeover for its major projects, industry sources source at a pipe producer and a Gazprom Gazprom. Last year it dropped 19% to 1.7mn is due to run under the Baltic to Germany. of sandwiches?” told Reuters, following the emergence of source said. “We held talks and agreed the main tonnes, according to the Foundation for Denmark has passed a law that could VTB holds such investments a producer charging significantly lower “We looked at the market and decided parameters of our cooperation. Development of the Tube Industry, a lobby allow it to ban the pipeline from its waters for an average 2 years to 5 prices. that we were paying above the market We have contractual obligations, which group. and a new US law imposing more sanc- years, Soloviev said. VTB has In a move likely to shake up the pipe price. We wanted to discuss this with the meant production at our Izhora plant did In 2017 ZTZ injected 146,000 tonnes tions on Russia could also complicate the been a financial investor in and metals sectors, the Kremlin-controlled pipemakers,” the Gazprom source said. not stop,” a company spokeswoman said. of LDP into the market, while the quartet $11bn project. another Russian retailer – Lenta Gazprom is seeking the discounts — put LDP pipes — those with a diameter of Gazprom’s hand appears to have been of established producers had to run their Russian steelmakers ramped up – together with US fund TPG by the sources at 20% — as it tries to limit 5.3 metres or more — constitute over 90% further strengthened by the fact that it has factories at less than half capacity. production in 2017, making the most of Capital, first buying shares in investment spending that is due to peak in of Gazprom’s pipe purchases. already bought many of the pipes needed Demand is expected to fall a further 2% rising prices and demand after a two-year 2009 before selling down to the next two years. According to Gazprom’s report for the for Power of Siberia and TurkStream, with this year, the lobby group said, as a number downturn, expecting a further increase about 3%. It also holds a stake in Gazprom is involved in three interna- first half of 2017, it bought them almost the bulk of investment spending chan- of major projects such as the Southern in the domestic consumption this year wireless carrier Tele2 Russia. tional gas pipeline projects. entirely from four Russian firms — steel- nelled into other project costs. Corridor — a 2,500km domestic link to helped by an economic recovery. With its new investor, Magnit It is already building TurkStream to Tur- makers OMK and Severstal, plus specialist Its insistence on a diff erent deal for TurkStream — were wrapped up in 2017. If the discounts with Gazprom are final- plans to pay dividends in the key and Power of Siberia to supply China, pipemakers ChelPipe and TMK which buy the pipes it still requires for the Russian Meanwhile, ZTZ said it expects to raise ised, the pipe producers will try to reduce second half of 2018 and may and is preparing for the Nord Stream 2 in steel. domestic link to Nord Stream 2, follows production to 550,000 tonnes this year. costs to protect their margins, analysts also consider a share buyback, link to Europe. Its average annual invest- Talks are still underway between the arrival on the scene of a newcomer, ZTZ is a private company whose share- say, with the specialists likely to seek dis- part of which would be used for ments to 2035 are planned at 1tn roubles Gazprom and the LDP producers, another ZTZ, industry sources said. holders are not disclosed. counts in turn from their steel suppliers. a management incentive plan, ($17.3bn), reaching their highest point source at a pipe maker and the Gazprom ZTZ, which produced its first pipe It is headed by Denis Safin, 37. “This is For TMK, for example, Russia business the retailer said in a statement. between 2018 and 2020. source said, on condition of anonymity as only two years ago, says it has off ered a buyers’ market. If the buyer can push makes up around 15 to 20% of its core CFO Pombukhchan told inves- Trying to stand up to Gazprom, a major they were not allowed to talk to the press. prices between 13% and 30% lower than down prices by 20% ... companies will earnings (EBITDA), Nikolay Sosnovskiy, tors last month that Magnit client which has a de facto monopoly on The press departments of TMK, OMK its competitors.”Our colleagues need have to survive with a very low level of director of metals and mining at Prosper- would refrain from making Russian gas exports by pipeline, appears and ChelPipe declined requests for com- to justify their artificially high prices to profitability,” Boris Krasnojenov, head ity Capital, said. dividend payments this year.

Mining sector unloved as investors fi nd it hard to trust

Reuters ter a surge in 2016. Returns of 16 UK- lieve they will underperform compared reward their long-suff ering sharehold- London domiciled natural resources funds fell to the other sectors in which they in- ers. Rio Tinto has carried out buybacks 2% last year after a 74% increase in vest. The market capitalisation and en- and last week announced record divi- 2016. Assets under management fell to terprise value of the big miners is far be- dends, while BHP Billiton has not carried nvestors are shunning the mining £3.78bn ($5.3bn) last year from £3.81bn low the peaks of 2012 when M&A deals out a buyback since 2011, but last August sector, data from Thomson Reuters in 2016. were done at unsustainably high prices. announced a record dividend. Ishows, as they struggle to forget the “It seems that investment in min- The correction now refl ects wari- Anglo American and Glencore, string of multi-billion dollar takeovers ing companies has gone from sector- ness that another boom will lead to which scrapped dividends at the height and expensive development projects specifi c funds to generalist and more bust, as well as concerns about sus- of the crash, have reinstated them. that left them empty handed. diversifi ed funds. tainability as miners continue to see For the risk-averse there are warning A decade-long commodity boom After the good bounce in 2016 peo- profi ts in carbon-intensive coal and signs the dividends may not endure. coincided with years of economic ple may have decided to take their operate in countries of high risk. As Glencore regained confi dence growth when China took off , but when money out of sector specifi c funds,” Jonathan Miller, head of UK manager last year, it embarked on a bidding war the global economy slowed, so did the Investec Asset Management portfolio research at Morningstar, said the min- to buy coal assets and has its eye on ex- market for commodities from oil to manager Hanré Rossouw said. ers had attracted attention in the early panding its agriculture assets. copper. Rossouw said there was a general 2000s in line with interest in emerging Glencore and all the other big min- Data shows that two years after the lack of trust in mining management market growth, but were now stuck in the ers, however, promise they will not get worst of the raw materials slump is because of lingering concerns they “unloved camp” as investors bearing the carried away. over, investors are still not ready to “will just do the same as they’ve done memory of the fi nancial markets crash Rio Tinto’s chief fi nancial offi cer pour in fresh funds despite a price rally. in the previous supercycle in not re- amounts of capital developing assets February found European investors avoided the most highly cyclical stocks. Chris Lynch told Reuters the company The mining sector led the FTSE turning cash to shareholders and mak- over long periods before they generate were more overweight on cyclical sec- “The sector has been in outfl ow mode was delivering “a great shareholder higher in 2016 as it rebounded from the ing poor capital allocation decisions”. returns. In boom years, miners have tors such as autos, construction and oil for six out of the last seven years, with return story”. “I don’t think you’re previous year’s deep price crash, but it Mining more than other sectors is notoriously overpaid by billions to ac- and gas but were 24% underweight on the only positive in this period being going to find many people in my po- is still well below levels seen in 2011. prone to boom and bust because of its quire assets in bidding wars. basic resources, including mining. €1.1bn ($1.4bn) of net infl ows in 2016,” sition who are going to say we are Thomson Reuters data shows min- exposure to commodity price move- A Bank of America-Merrill Lynch Portfolio managers usually make in- he said. Miners, which will continue re- overvalued,” he added. “We are de- ing funds shrank slightly last year af- ments and its need to spend large survey of fund managers published in vestments underweight when they be- porting results next week, have started to livering through the cycle.” Saturday, February 17, 2018 GULF TIMES BUSINESS

QSE WEEKLY REVIEW Strong buying lifts index 1.51% as foreign institutions turn bullish

By Santhosh V Perumal in 2017. Buying interests was seen of insurers in Qatar. The banks and (9%), telecom (7%), transport (3%) and against net buyers of QR49.52mn the The real estate sector saw 48% Business Reporter more within small, mid and microcap financial services index expanded insurance (2%) this week which saw no previous week. shrinkage in trade volume to 5.83mn segments this week, which saw QNB 3.31%, insurance (2.92%), industrials trading of treasury bills. Local retail investors’ net selling shares, 47% in value to QR108.2mn and outline its international expansion (1.79%) and telecom (1.22%); whereas Major gainers included Masraf Al increased considerably to QR21.28mn 47% in deals to 2,452. The Qatar Stock Exchange stood strategy. consumer goods declined 0.32%, Rayan, al khaliji, QIIB, Doha Bank, Qatar compared to QR2.32mn the week The telecom sector’s trade volume above 9,000 points for three of the However, foreign funds and non-Qatari real estate (0.28%) and transport First Bank, Alijarah Holding, IQ, Qatari ended February 8. tanked 30% to 3.75mn equities, value four sessions this week as foreign individuals turned bearish and there (0.15%) this week which saw banking, Investors Group, Aamal Company, Gulf Non-Qatari individuals turned net by 45% to QR53.82mn and transactions institutions turned bullish. was increased net selling by local industrials and real estate together International Services, Qatar Insurance, profit takers to the tune of QR19.99mn by 34% to 1,285. Strong buying – especially in banking, retail investors this week which saw account for more than 82% of the total Mazaya Qatar, Barwa, Vodafone Qatar against net buyers of QR2.19mn a week There was 26% decline in the industrials insurance and industrials counters International Monetary Fund managing trading volume. and Gulf Warehousing this week. ago. sector’s trade volume to 6.73mn stocks, – lifted the 20-stock Qatar Index director Christine Lagarde say Qatar’s The banks and financial services sector Nevertheless, QNB, Mannai Total trade volume fell 30% to 36.18mn 29% in value to QR163.24mn and 28% in 1.51% this week which saw market robust non-oil growth is a testament to accounted for 48% of the total volume, Corporation, Qatar Electricity and shares, value by 37% to QR809.28mn deals to 3,349. heavyweight Industries Qatar (IQ) its successful diversification. industrials (19%), realty (16%), telecom Water, Ezdan, Ooredoo, Milaha and and transactions by 35% to 14,439. The insurance sector’s trade volume report QR3.3bn net profit in 2017. The Total Return Index soared 2.2%, (10%), consumer goods (4%), transport Salam International Investment were The consumer goods sector reported shrank 21% to 0.34mn shares, value by Islamic stocks were seen gaining faster Al Rayan Islamic Index by 3.17% and (2%) and insurance (1%) this week among the losers this week. 70% plunge in trade volume to 1.49mn 13% to QR15.62mn and transactions by than the other indices this week which All Share Index by 1.91% this week which saw a total of 42,000 sovereign Domestic institutions turned net buyers equities, 40% in value to QR74.12mn 7% to 411. saw Mesaieed Petrochemical Holdings’ which saw A M Best, a global insurance bonds valued at QR416.4mn trade to the tune of QR71.78mn compared and 40% in deals to 1,147. The market witnessed 7% fall in the 2017 net profit at QR1.1bn. rating agency, view that the economic across three deals. with net sellers of QR49.26mn a week The transport sector’s trade volume banks and financial services sector’s More than 64% of the traded scrips blockade, which is now into the ninth The banks and financial services’ share in ago. plummeted 64% to 0.79mn stocks, trade volume to 17.25mn equities, 33% extended gains this week, which saw month, is expected to have only a total trade turnover was 46%, industrials However, non-Qatari funds turned net value by 63% to QR23.28mn and in value to QR370.99mn and 28% in Ooredoo report net profit of QR1.9bn “limited” impact on the credit quality (20%), real estate (13%), consumer goods sellers to the extent of QR30.59mn transactions by 59% to 592. deals to 5,203.

Fed seen UK shoppers’ New Year diets stepping up pace of squeeze January retail sales rate hikes Sales inch up 0.1% month/month in January; surge in gym wear Bloomberg spending cancelled out by falling Washington food sales; weakest three months for retail sales since April 2017 growing number of econ- Reuters omists expect the Fed- London Aeral Reserve to step up the pace of its interest-rate increas- es this year after congressional ritish shoppers’ New Year reso- passage of a $300bn government lutions to get fi t proved less spending package that is seen Bhealthy for retailers last month, lifting US economic growth and as sales rose much less than expected infl ation. and a longer-term backdrop of ris- Lewis Alexander, chief econo- ing prices and lacklustre wages also mist at Nomura Securities In- weighed on growth. ternational Inc, and Greg Daco, Even by the standards of a normal Oxford Economics’ chief US January, demand for gym wear and economist, were among those sporting goods was unusually high who now see four Fed rate hikes — but this was not enough to off set a in 2018 instead of three, accord- chunky fall in the volume of food pur- ing to a Bloomberg survey of 29 chases, the Offi ce for National Statis- respondents conducted Feb- tics said yesterday. ruary 12-14. That brought the Overall, retail sales volumes rose survey’s median estimate for 0.1% on the month, well below fore- the upper bound of the central casts in a Reuters poll for a monthly bank’s federal funds rate target rise of 0.5%, after dropping 1.4% in to 2.5% by year-end. It is cur- December. rently at 1.5%. In year-on-year terms, sales grew by “Stronger growth and higher 1.6% — the fastest since August, but infl ation would increase the still right at the bottom end of econo- odds of four Fed rate hikes in mists’ range of forecasts.”Analysts will 2018,” Daco said in his survey no doubt be digesting these fi gures to comments. He added that the determine if this was a refl ection of recent market strains won’t pre- households setting about 2018 with vent a rate increase at the cen- the aim of shedding some pounds, or tral bank’s next policy-making merely symptomatic of the extent of meeting on March 20-21. the broader household cash squeeze In their last quarterly projec- underway,” Investec economist Victo- tion in December, Fed offi cials ria Clarke said. pencilled in three rate hikes for Britain’s economy underperformed this year, according to the me- its rivals last year as higher infl ation dian forecast in their so-called — caused by the fall in the pound since dot plot. They tacitly reiter- June 2016’s Brexit vote — hurt con- A shopper browses shoes during a sale at a department store in central London. Overall, retail sales volumes rose 0.1% in January, well below forecasts in a Reuters poll, ated that view at their January sumers’ spending power, though fore- after dropping 1.4% in December. 30-31 meeting, when they said casts for a severe downturn proved too they expected “further gradual pessimistic. est until consumers felt the benefi t of tance said. Last week the BoE forecast three months to December, marking Shoppers are also stretching their increases in the federal funds The Bank of England expects the lower infl ation. real-terms household consumption the weakest three-month period since budgets by switch to cheaper food rate.” consumer squeeze to ease in 2018 as Consumer price infl ation hit its growth would slow to 1.25% in 2018 April 2017. stores. Economists are getting more infl ation cools from near six-year highs highest in more than fi ve years in No- from 1.5% in 2017 as demand shifted The fi gures took some shine off Market research company Kantar upbeat about economic growth and wage growth ticks higher, although vember, at 3.1%, and has barely fallen towards business investment and ex- sterling, which was headed for its best Worldpanel said last week that Tesco this year and next, according to surveys of British households suggest since, though the narrower gauge used ports. weekly performance against the US was the top performer of Britain’s four the survey. They see gross do- sentiment remains subdued. for retail sales dropped to a six-month Looking at sales over the three dollar in fi ve months. largest supermarket groups over the mestic product expanding 2.9% Andrew Sentance, a senior economic low of 2.8% last month. “The fi rst half months to January, which smoothes In cash terms, spending in the three 12 weeks to the end of January, post- in 2018 and 2.5% next year. GDP adviser to accountants PwC and former of this year will continue to be a dif- out sharp moves caused by November’s months to January was 4.4% higher ing sales growth of 2.6%. All four lost has averaged a 2.2% advance BoE rate-setter, said it would take until fi cult environment for retailers and Black Friday discounts, sales inched than a year earlier, with 3.0% growth in market share to discount chains Aldi since the expansion began in the second half of the year at the earli- other consumer-facing sectors,” Sen- up just 0.1% after a rise of 0.5% in the food spending. and Lidl. mid-2009.

When Trump’s SEC punishes Wall Street, it’s often done quietly

Bloomberg release, the SEC disclosed the sanction Merrill was also tied to another case misconduct worthy of more atten- name at the agency by trying to get a the agency’s willingness to hold Wall New York in a dense legal document that was qui- that got the silent treatment: A Sep- tion. It publicised a January 2016 case bigger penalty, a splashy headline,” said Street accountable. Brown, an Ohio etly posted on the agency’s website after tember settlement with William Tir- against Goldman Sachs Group Inc that Tom Sporkin, a former SEC enforce- Democrat, said things appear to be go- US stock markets had closed. When the rell, a former Merrill executive who the involved similar allegations. ment lawyer who is now a partner at ing “the wrong way.” nder President Donald Trump, a $13mn settlement popped on December SEC said played a key role in the fi rm Chris Carofi ne, a spokesman for BuckleySandler LLP. “The environ- Clayton rejected the notion that the top fi nancial regulator isn’t em- 21, many on Wall Street were already out misusing billions of dollars in customer Clayton, declined to comment. ment is changing. Now they’re looking SEC has pulled punches, telling Brown Ubarrassing Wall Street as much of the offi ce for Christmas break. funds. The fi rms and individuals sanctioned for opportunities to point to coopera- the regulator is “vigorously” pursuing as it used to. TPG isn’t the only one. In recent by the SEC declined to comment or tion more so than bad conduct.” violations of securities laws. The SEC Take TPG Capital LP — the private- months, the SEC has opted not to hype Since Trump became president, didn’t respond to requests for com- While many SEC investigators his- chairman added that it’s too early to equity behemoth co-founded by bil- some hedge-fund and big-bank cases he’s made clear he wants to drop ment. They all settled the agency’s en- torically liked it when the media re- draw conclusions about the agency’s lionaire David Bonderman. For years, that its Trump-appointed chairman, the contentious tone that oft en forcement actions without admitting ported on their work, there’s perhaps a approach to enforcement because cases the US Securities and Exchange Com- former Wall Street lawyer Jay Clayton, fl ared up between Washington or denying any misconduct, except for more important reason why the agency take about two years to develop. mission had been investigating TPG inherited from the agency’s previous and Wall Street in the years aft er Merrill, which did admit wrongdoing has long touted its cases in press re- The SEC is still hyping some investi- and its competitors over concerns they leadership. the 2008 fi nancial crisis following the investigation into its mis- leases. When a company is shamed in gations into Wall Street. This week, the were pocketing tens of millions of dol- The muted sanctions include a De- use of customers’ money. a news article it can deter others from agency issued a press release announc- lars in fees that were largely hidden cember enforcement action in which The agency did issue a press release Since Trump became president, he’s engaging in wrongdoing. ing that Deutsche Bank AG had agreed from investors. Bank of America Corp’s Merrill Lynch in June 2016 when it announced it had made clear he wants to drop the conten- That leverages the power of the SEC’s to pay about $4.5mn to settle allega- When the agency started punish- unit agreed to pay $13mn for failing to fi led a complaint against Tirrell, and tious tone that often fl ared up between enforcement division, which can’t real- tions that it infl ated its earnings after ing fi rms over the expenses in 2015, adequately monitor millions of cus- that Merrill would pay $415mn over Washington and Wall Street in the years istically police all the securities frauds misleading clients about how much it trumpeted enforcement actions tomer accounts for money laundering the fi rm’s alleged misconduct. But after the 2008 fi nancial crisis, when taking place across the country with its bonds backed by commercial mortgag- against Blackstone Group LP, KKR & and other suspicious activity. when the SEC reached a deal with Tir- bankers bristled at being hit with billions roughly 1,400 lawyers and investigators. es were worth. Co and Apollo Global Management LLC That same month, the regulator de- rell about fi ve months ago the accord of dollars in fi nes and former president Under Clayton, it’s not just the Under Clayton’s predecessor, former as examples of the government holding cided not to publicise an enforcement wasn’t announced and his penalty was Barack Obama calling them “fat cats.” number of press releases that are drop- federal prosecutor Mary Jo White, fi - big fi nancial companies accountable. action against Nehal Chopra — a hedge signifi cantly lower than Merrill’s: $0. Clayton, the SEC chairman, has said ping, as his tenure has also seen fewer nancial executives frequently took All three paid at least $28mn, and each fund manager known for appearing at Just last month, the SEC sanctioned his priority is protecting “Mr and Ms enforcement actions and penalties. umbrage with the SEC calling them time the regulator fi led a case it shined industry conferences and securing an Industrial & Commercial Bank of China 401K.” In the more than nine months Cases fell 13% to 754 for the fi scal year out over what they considered minor a spotlight on their alleged misconduct investment from famed trader Julian Ltd without issuing a formal press re- he’s led the agency, it hasn’t hesitated that ended in September, while fi nes infractions. by issuing press releases with stern ad- Robertson. The SEC’s order, posted lease. The world’s largest lender, and to highlight enforcement actions in- against companies and individuals The private-equity cases involving monishments from SEC offi cials. discreetly on its website, said Chopra also the biggest commercial tenant in volving small-time scammers, ponzi slipped 34% to $832mn. TPG and other fi rms are good exam- But TPG’s penalty wasn’t wrapped misled her investors by telling them Manhattan’s Trump Tower, was ac- schemes, penny-stock frauds and, in- Concerns that the SEC is going soft ples. They centred on so-called moni- up until Trump took offi ce, and the her trades were based on researching cused of violating securities rules when creasingly, wrongdoing tied to crypto- on big fi nancial fi rms were raised at a toring fees that PE fi rms charge the company was treated much diff erently. stocks. In reality, a lot of her ideas came helping clients bet against stocks. In currencies. Ex-SEC offi cials say they’ve February 6 hearing when Senator Sher- companies they own for consulting and Instead of publishing a crowing press from her husband, the regulator said. the past, the SEC has considered such noticed a shift. “You used to make your rod Brown questioned Clayton about legal work.