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North Field Expansion project seen boosting Qatar construction sector: Dun & Bradstreet

By Pratap John Qatar’s construction sector has seen a expected to slow down as the main routes and sources of financing. led by bullish stance in the banking resumption in US-China trade talks. Business Editor “steep growth” in recent years as the construction phases of major projects Energy-price volatility is a concern. and financial, real estate and industrial On Tuesday, while crude futures price country has significantly invested in were completed. Qatar is aiming to However, Qatar has the resources, sectors. edged higher, the price of Opec daily infrastructure mega projects such as a have the bulk of its core infrastructure including through its sovereign wealth In terms of oil prices, Dun & Bradstreet basket settled lower amid global The work on North Field Expansion new port and metro, it said. ready well ahead of the 2022 FIFA fund, to inject liquidity as required. said, these declined last week after demand concerns. project, which is “expected to begin In real terms, the construction sector is World Cup, the report said. Last week, Dun & Bradstreet said, the China stated to impose new tariff s of On Wednesday, prices increased in earnest” in 2020 will provide some over 20 times its size at the start of the Construction sector growth peaked Qatar Stock Exchange index (QEI) around 5% to 10% on $75bn worth of US following release of weekly data from boost for Qatar’s construction sector, century, and has been the main driver at 34% y-o-y in 2017, slowing to 8% outperformed other GCC indices and goods and resume duties on American the Energy Information Administration researcher Dun & Bradstreet has said of economic growth in recent years. in 2018, before registering its first soared by more than 3% and settled autos. This was coupled with data from (EIA) which revealed a decline of 10mn in a report. At its peak in mid-2018, construction contraction in Q1, 2019 – shrinking by above the 10,000 point mark on the Baker Hughes which indicated that barrels in US crude inventories. Oil The North Field Expansion project comprised 24% of non-oil GDP, double 1.2% y-o-y, Dun & Bradstreet said. back of strong buying support from number of active rigs drilling in US prices continued their upward trend on should boost Qatar’s liquefied natural its level in 2013 (average of 12% in Qatar, the report noted, has largely domestic and foreign institutional declined by 19 to 916 last week. Thursday amid optimism surrounding gas (LNG) output by 43% by 2025, Dun 2000-13). overcome the economic impact of investors. The index witnessed an Prices declined marginally last US-China trade talks, Dun & Bradstreet & Bradstreet said. This “outsized” construction sector was the blockade and adopted new trade increase of 35.53% in trading volume, Monday on optimism surrounding noted.

MEEZA mission to QCB to issue unifi ed form ensure clients’ business survival in for Demand Guarantee crisis situations atar’s prominent end-to-end managed IT services and solutions provider MEEZA is planning to hold a series Qof roundtables for its existing clients this month to in- troduce them to the Recovery as a Service (RECaaS) model. RECaaS is a cloud computing and backup service that uses cloud resources to protect applications, digital assets and data Letter, says ICC Qatar from disruption caused by disaster. It gives an organisation a complete system backup that allows for business continu- he Qatar Central Bank (QCB) will ity in the event of system failure. It is done by the replication adopt and circulate a unifi ed form and hosting of physical or virtual servers in another location Tof the Demand Guarantee Letter to provide failover in the event of a man-made or natural ca- “soon,” according to the International tastrophe. Chamber of Commerce Qatar (ICC Qa- “As the leading cloud computing services provider in Qa- tar). tar and the Mena region, MEEZA is pleased to host a series of This was announced by the ICC Qatar round tables to inform our Qatar-based clients about the new- Banking Commission during a seminar ly launched Recovery as a Service solution. Business continu- held at the Qatar Chamber headquarters ity, which is an important goal of any organisation, is one of the yesterday. The seminar was attended by main features of our RECaaS solution. We value our relation- ICC Qatar Banking Commission vice ship with our clients and partners and believe that insuring chairman, Ghassan Azar, ICC Qatar di- their business continuity is a precursor for their prosperity. In rector of International Relations and line with the Qatar National Vision 2030, MEEZA will continue Chamber Aff airs, Sheikha Tamader al- to support its Qatar-based clients to achieve their potential, Thani, and representatives of banks and empowering young Qatari talents and underpinning Qatar’s local companies. journey to transform itself into a knowledge-based economy”, According to ICC Qatar, the move said, Ahmad al-Muslemani, chief sales and marketing offi cer, aims to build a unifi ed template for the MEEZA. guarantee letter consistent with the in- “MEEZA’s unique, centralised and unifi ed Business Cloud ternational regulatory standards. platform is hosted across multiple Tier III data centres based Speaking to the media on the sidelines in Qatar. Our subscription-based RECaaS solution comprises of the seminar, Sheikha Tamader said Disaster Recovery as a Service (DRaaS) with continuous real that this step is “a result of enormous time, byte-level replication, automated full or partial failover, eff orts made by the commission with a snapshot and CDP Features with multiple recovery point and view to creating a unifi ed system for the time objectives. Backup as a Service (BaaS) provides an ex- demand guarantee letter.” tremely cost-eff ective backup and archiving solution hosted She also stressed that the move would within the MEEZA local cloud” said, David Wilds, Expansion have a positive impact on the investment Operations Executive, MEEZA Expansion. climate in Qatar and attract more foreign MEEZA Expansion is a fast-growing player in cloud com- investments to the local market. “The puting services, both in regional and international markets. It form will be introduced in the very near ICC Qatar Banking Commission vice chairman Ghassan Azar delivers a presentation during a seminar on the Demand Guarantee Letter, continues to innovate and off er cost eff ective IT solutions and future,” she added. which was organised by ICC Qatar in Doha yesterday. services to help its clients focus on their core business. US, China kick off new round of tariffs in trade war

Escalation comes despite signs that ing 15% tariff s on more than $125bn in Chinese said the off icial People’s Daily of the ruling hikes on Chinese goods set to go in place yes- talks could resume in September; imports, including smart speakers, Bluetooth Communist Party. terday will not be delayed, Trump has said. move is latest in trade war that began headphones and many types of footwear. In “China’s booming economy has made China For two years, the Trump administration has more than a year ago; China targets retaliation, China started to impose additional a fertile ground for investment that foreign sought to pressure China to make sweeping US crude with tariff of 5%; Chinese tariff s on some of the US goods on a $75bn companies cannot ignore,” it said, in a com- changes to its policies on intellectual property items aff ected range from footwear to target list. mentary under the name ‘Zhong Sheng’, or protection, forced transfers of technology to audio gear Beijing did not specify the value of the goods ‘Voice of China’, which is often used to state Chinese firms, industrial subsidies and market that face higher tariff s from Sunday. its view on foreign policy issues. access. Reuters The extra tariff s of 5% and 10% were levied Last month, US President Donald Trump said China has consistently denied Washington’s Beijing on 1,717 items of a total of 5,078 products he was increasing existing and planned tariff s accusations that it engages in unfair trade originating from the US. by 5% on about $550bn worth of Chinese practices, vowing to fight back in kind and Beijing will start collecting additional tariff s on imports after Beijing announced its own retali- criticising US measures as protectionist. China and the US began imposing additional the rest from December 15. atory tariff s on US goods. China has pressed the US to cancel the tariff tariff s on each other’s goods yesterday, the Chinese state media struck a defiant note. Tariff s of 15% on cellphones, laptop comput- increase, but said last week that a September latest escalation in a bruising trade war, “The United States should learn how to be- ers, toys and clothing are to take eff ect on round of talks was being discussed between despite signs that talks would resume some have like a responsible global power and stop December 15. the two. time this month. acting as a ‘school bully’,” the off icial Xinhua The US Trade Representative’s Off ice said on The trade war further strains Beijing- A new round of tariff s took eff ect from 0401 news agency said. “As the world’s only super- Thursday it would collect public comments Washington ties, already overshadowed by This file picture taken on November 6, 2018 shows a Chinese GMT, with Beijing’s levy of 5% on US crude power, it needs to shoulder its due responsi- through September 20 on a planned tariff US freedom of navigation exercises near and US flag at a booth during the first China International Import marking the first time the fuel has been tar- bility, and join other countries in making this increase to 30% on a $250bn list of goods Chinese-occupied islands in the disputed Expo in Shanghai. China and the US began imposing additional geted since the world’s two largest economies world a better and more prosperous place. already hit with a 25% tariff . South China Sea, and US support for self-ruled tariff s on each other’s goods yesterday, the latest escalation in a started their trade war more than a year ago. Only then can America become great again.” Trade teams from China and the US continue and democratic Taiwan, which China claims bruising trade war, despite signs that talks would resume some The Trump administration will begin collect- Tariff s could not impede China’s development, to talk and will meet in September, but tariff as its own. time this month. Gulf Times 2 Monday, September 2, 2019 BUSINESS

Bloomberg QuickTake Q&A Flaring, or why so much gas is going up in flames

By Ryan Collins and 1. Why do drillers fl are? is fuelled by the use of hydraulic emissions of the oil and gas industry. In already connected to pipelines. Exco northeastern US. Landowners along the Rachel Adams-Heard fracturing — fracking — to unlock fuel addition, the practice spews particulate successfully argued that it would lose route of another Kinder Morgan line are Houston When an oil well begins to spew, from shale rock. Increased flaring in matter, soot and toxins into the air that money paying to access the network. fighting the project in court, arguing less-valuable natural gas comes up the US is concentrated in the shale have been shown to be hazardous to 5. Isn’t the gas worth against the company’s use of eminent alongside crude. Pipelines can capture oil basins known as the Eagle Ford humans. something? domain to take private property. It’s not If you take a drive along the well-worn that gas, but when they’re not available, in Texas, the Permian in Texas and 4. How does the US regulate clear whether the legal battle will aff ect highways of West Texas, orange flames producers often get rid of the gas so New Mexico, and the Bakken in North fl aring? The short answer is no, not in oil- the project, but the challenge portends will punctuate your journey. Those are they don’t have to stop pumping oil. Dakota. Permian flaring rose about dominated basins where what matters a tone shift in a historically industry- gas flares, and they’re lighting up the They do that by either igniting the 85% last year, according to data Flaring is allowed when the gas is the ability to keep pumping black friendly state. skies above West Texas oilfields like gas, in the case of flaring, or releasing from Oslo-based consultant Rystad could cause a safety concern due gold. In the Permian, local gas prices 7. Are there alternatives to never before as drillers produce crude it directly into air, known as venting. Energy. The volume flared in Texas to high pressure in a well and have gone negative multiple times this fl aring? faster than pipes can be laid to haul the Flaring is preferred because methane, by the end of 2018 was greater than when pipelines aren’t in place to year, meaning drillers were actually attendant natural gas away. Oil drillers an especially potent greenhouse gas, residential gas demand in the entire carry the fuel away. In either case, paying customers to haul their gas. Apart from transporting gas to markets say flaring is the most environmentally is burned off , though carbon dioxide is state. flaring spares drillers from having 6. Will more pipelines help? via pipeline, oil producers can use friendly way to get rid of excess gas released into the air. 3. What are the eff ects? to suspend production, a costly iton-site as an energy source or reinject they can’t sell. Environmentalists say 2. How much gas is fl ared? move that can damage a reservoir’s Yes, when prices justify the costs of it underground. Both options require that in many cases what flaring is Gas flaring globally emits more than future output. The Texas Railroad capturing the gas and transporting it to investments, however. Russia requires friendly to is oil drillers’ profits. They A lot. The World Bank estimated that 350mn tonnes of carbon dioxide in Commission, the main oil and gas markets. A new pipeline led by Kinder oil drillers to make use of 95% of think regulators in states including globally in 2018, 145bn cubic meters a year, according to the World Bank. regulator in the state, has never Morgan Inc is expected to reduce the gas they produce, while Nigeria Texas and North Dakota should be of gas was flared, about as much as That’s the equivalent of the carbon denied a request for a flaring permit. the pressure to flare. At the same prohibits flaring, yet the practice is tougher on a practice that harms air Central and South America use in a emissions from 90 coal-fired power In a controversial case, it granted one time, pipeline projects in Texas are common in both places. That suggests quality and contributes to climate year. The amount is rising because plants. In the US, flaring accounts for an August 6 to Exco Resources Inc even beginning to attract public opposition, bans may not be suff icient without change. of the oil boom in the US, which estimated 9% of the greenhouse gas though the company’s wells were a more common phenomenon in the incentives to curb flaring.

Shale drilling drops to 19-month Shell’s woeful August risks low after output hits new high run as 2nd-largest oil major Bloomberg Houston

Bloomberg Blame earnings. Shell’s net London income slid in the second quar- merican oil explorers, which are ter and was far weaker than ex- producing record volumes of crude, pected, falling short of the aver- Acut drilling to a 19-month low as ig Oil has a new contender age analyst estimate by almost they seek to show investors they can do for the No 2 spot. Chevron 30%. That was its biggest miss more with less. Working oil rigs fell by 12 BCorp has almost displaced in more than two years, and last week to 742, according to data released Royal Dutch Shell Plc as the pushed chief fi nancial offi cer on Friday by oilfi eld-services provider second-largest oil company by Jessica Uhl to acknowledge the Baker Hughes. The count has dropped by market capitalisation. company should probably fi nd a more than 140 from a November high. In It’s been a particularly grim way to better manage expecta- the Permian Basin, 5 rigs were idled, lower- month for Big Oil, as a US- tions. ing the count there to 429. China trade war dimmed the “Shell’s shares have suf- As explorers dial back spending, Bank of picture for global economic fered from an unwelcome re- America Merrill Lynch downgraded a trio growth, stymieing crude de- lapse of earnings volatility,” said of shale servicers this week, including Na- mand. The Stoxx Europe 600 Christyan Malek, head of Euro- bors Industries Ltd, owner of the world’s Oil & Gas Index was headed for pean oil and gas research at JP biggest fl eet of land drilling equipment. a 6.3% decline, among the larg- Morgan Chase & Co. “While we “For US onshore, structural changes are est monthly drops in nearly four view this as more of a bump in accelerating,” Chase Mulvehill, an analyst years, which mirrors the slide in the road, together with the oil at Bank of America Merrill Lynch, wrote Brent prices. price correction – which Shell last week in a note to investors. “Doing But Shell had it worst. Its B is more geared to – it has under- more with less remains prevalent across US shares in London have plunged performed more than others.” shale, leaving a destructive impact on US more than 12% last month, Chevron, on the other hand, onshore activity that is likely to extend well a decline not seen since the surpassed second-quarter ana- into ’20 (or beyond).” 2008 fi nancial crisis, which has lyst estimates by 21%. Its shares Despite the rig-count decline this year, knocked almost £26bn ($32bn) still fell in August, along with US crude production keeps increasing. It off its market value. That’s put the rest of the industry, but its rose to a record 12.5mn barrels a day last chief executive offi cer Ben van dip was only a third of Shell’s. week, eclipsing the previous high mark set Beurden’s dream of being No 1 It’s also traded in dollars, an ad- in late May, according data from the Energy in the industry by every measure vantage over sterling-denomi- Information Administration. even further out of reach. nated Shell B shares. The British That’s partly because producers have an Shell established itself as the currency has been pummelled ample backlog of wells that have already No 2 oil company following its by the Brexit process. been drilled in the past and can be tapped acquisition of BG Group Plc, Both companies still trail Exx- for fracking, but they are also seeking bet- narrowing its market cap gap on by a large margin. The Irving, ter technology to get more crude from each with Exxon Mobil Corp. But its Texas-based oil giant’s market Signage is displayed outside a Royal Dutch Shell gas station in Redondo Beach, California. Shell’s B shares in London have hole. Plus, it may take a few more months US competitor Chevron has now cap is almost $290bn, compared plunged more than 12% last month, a decline not seen since the 2008 financial crisis, which has knocked almost £26bn off for output from wells bored during last caught up with it again. to Chevron and Shell’s $223bn. its market value. year’s drilling peak to start declining. Qatar shares edge higher amid weakened volumes

By Santhosh V Perumal compared to QR9.48mn the previ- Business Reporter ous trading day. Total trade volume fell 33% to 61.42mn shares, value by 52% to he Qatar Stock Exchange QR157.31mn and transactions by yesterday witnessed fi ve 31% to 4,987. Tof the seven sectors under The telecom sector’s trade vol- bearish spell but overall it settled ume plummeted 67% to 2.28mn marginally higher amidst weakened equities, value by 67% to QR5.33mn volumes. and deals by 51% to 256. Non-Qatari and Gulf individuals as The banks and fi nancial services well as domestic funds were seen bull- sector saw a 59% plunge in trade ish as the 20-stock Qatar Index settled volume to 15.42mn stocks, 56% in 0.2% higher at 10,253.69 points. value to QR76.07mn and 45% in The weakened net selling pres- transactions to 1,522. sure among local retail investors The consumer goods sec- also helped the market, whose key tor’s trade volume tanked 56% to benchmark closed 0.44% lower Non-Qatari and Gulf individuals as well as domestic funds were 2.06mn shares, value by 69% to year-to-date. seen bullish as the 20-stock Qatar Index settled 0.2% higher at QR11.5mn and deals by 53% to 277. Market capitalisation saw more 10,253.69 points yesterday The transport sector reported than QR1bn, or 0.2%, addition to a 55% shrinkage in trade volume QR565.3bn mainly owing to micro- The industrials index gained QR5.07mn on August 29. to 2.6mn equities, 51% in value to cap segments. 1.17% and banks and fi nancial serv- Domestic funds were also net QR6.96mn and 48% in transac- Islamic equities were seen gain- ices (0.32%); while insurance de- buyers to the extent of QR1.59mn tions to 175. ing faster than the other indices in clined 2.49%, realty (2.3%), trans- compared with net sellers of There was a 35% decline in the the market, where foreign institu- port (0.98%), telecom (0.58%) and QR8.62mn last Thursday. insurance sector’s trade volume tions continued to be net buyers consumer goods (0.1%). Gulf individuals turned net buy- to 2.5mn stocks, 27% in value to but with lesser intensity. Major gainers included Qatar ers to the tune of QR1.13mn against QR6.9mn and 47% in deals to 192. Trade turnover and volumes Islamic Bank, Industries Qatar, net sellers of QR5.16mn the previ- The industrials sector’s trade were on the decline in the bourse, Mesaieed Petrochemical Holding, ous trading day. volume shrank 33% to 11.23mn where the real estate, banking and Qatar General Insurance and Re- Local retail investors’ net shares, value by 48% to QR28.72mn industrials sectors together ac- insurance, QNB and Dlala; even as profi t booking declined notice- and transactions by 23% to 1,364. counted for about 85% of the total Commercial Bank, QIIB, Alijarah ably to QR22.51mn compared to However, the market witnessed a volume. Holing, Medicare Group, Qatar In- QR30.82mn on August 29. 55% surge in the real estate sector’s The Total Return Index gained surance, Al Khaleej Takaful, Ezdan, However, non-Qatari institu- trade volume to 25.34mn equities, 0.2% to 18,867.65 points and the Barwa, Ooredoo, Gulf Warehousing tions’ net buying declined sig- 17% in value to QR21.82mn and Al Rayan Islamic Index (Price) by and Milaha were among the losers. nifi cantly to QR8.59mn against 40% in deals to 1,201. 0.41% to 2,311.65 points, while the Non-Qatari individuals were net QR39.59mn last Thursday. In the debt market, there was no All Share Index was down 0.01 to buyers to the tune of QR2.74mn Gulf funds’ net buying also trading of treasury bills and sover- 3,004.42 points. against net profi t takers of weakened perceptibly to QR8.45mn eign bonds. Gulf Times Monday, September 2, 2019 3 BUSINESS

Toyota car sales Manmohan blames Modi govt plunge 24% in for India’s economic slowdown India in

IANS “economic misadventures”. However, consumption growth is at an 18-month New Delhi late Arun Jaitley, who was then fi nance low. Nominal GDP growth is at a 15- August minister had countered Singh calling it year low. a “key step in a chain of important de- There is a gaping hole in tax rev- IANS ays after the finance ministry cisions taken by the government to for- enues. Bengaluru reported contraction in the malise the economy”. As for the GST, it Tax buoyancy remains elusive DGDP growth, former Indian was the brain child of the Congress. as businessmen, small and big, are prime minister Manmohan Singh Hence Singh only blamed its imple- hounded and tax terrorism continues Toyota Kirloskar Motor yesterday slammed the Narendra mentation, not the idea per say. unabated. (TKM) yesterday reported Modi government blaming its poli- Even before GST was passed mid- Investor sentiments are in the dol- a 24% annual decline in car cies for the economic slowdown in night 2017, it was Manmohan Singh drums. These are not the foundations sales for August to 10,701 the country. who had supported the GST Bills and for economic recovery,” he said. vehicles from 14,100 during “India has the potential to grow at had told Congress not to break the Highlighting the rural distress, the year-ago month due to a much faster rate, but the all-round consensus simply because the treasury Singh said: “Farmers are not receiving economic slowdown. mismanagement by the Modi govern- bench would perceive to be taking the adequate prices and rural incomes have “The consumer sentiment ment has resulted in this slowdown,” credits of it. declined. was muted in August said Singh, who is also an eminent Singh had also called the step as fa- The low infl ation rate that the Modi as customers deferred economist. vourable for the country. government likes to showcase comes purchasing. Calling the slowdown a “man-made Two years on, he criticised it but for at the cost of our farmers and their Floods across some states crisis”, Singh, in a detailed statement, its “hasty implementation”. The Con- incomes, by infl icting misery on over also hurt the demand, while primarily blamed the Modi govern- gress yesterday shared Singh’s state- 50% of India’s population.” unfavourable exchange rate ment’s decision of demonetisation and ment on its offi cial Twitter handle in- Citing RBI’s transfer of Rs 1.76 lakh didn’t help our cost,” TKM a “hastily implemented GST” for the dicating that it was the party’s position crore to the government, the former deputy managing director N current state of economy. as well. PM also accused the latter of attacking Raja said in a statement. Even last year, on second year of de- With senior party leader and former the autonomy of institutions. Export of its sedan Etios, monetisation, Singh had hit out at the Finance Minister P Chidambaram in The current economic slowdown has however, grew 75% to 843 government for the ‘wounds’ of cur- CBI custody, Manmohan Singh is the started to hurt corporates as well, with units in the month under rency ban move. “It is often said that only credible face the Congress has to many companies reporting a sharp de- review from 481 units a time is a great healer. speak on the economy. cline in revenue as well as profi t growth year ago. “We sold 11,544 But unfortunately, in the case of de- The Congress leader said more than numbers in the last quarter. cars, including export, in monetisation, the scars and wounds of 3.5 lakh jobs had been lost in the au- Meanwhile, Finance Minister Nir- August against 14,581 a year demonetisation are only getting more tomobile sector alone and he claimed mala Sitharaman once again reassured ago, registering 21% overall Singh: India has the potential to grow at a much faster rate, but the all-round visible with time,” he had said in a similar large-scale job losses in the in- the country that things are under con- annual decline,” said Raja. mismanagement by the Narendra Modi government has resulted in the economic statement. formal sector. trol and reforms are being taken to en- “Sale of Glanza vehicles have slowdown. Even then, he had called the move an “Domestic demand is depressed and sure the slowdown is arrested. shown a positive momentum despite the slowdown in the industry impacting our domestic growth,” said Raja. “The government initiative to boost the auto sector growth Sitharaman rehashes ‘consulting’ with cheaper car loans, increasing liquidity through credit expansion to state-run banks, deferring one-time remark on slowdown questions registration fee, higher depreciation for all vehicles and lifting ban on purchase IANS respond. So I will be coming back to respond decided by the GST Council. She said the of new vehicles by central Chennai to sectors, which have come to us and which measures announced in the July budget were and state governments is set want some relief from us,” she said. showing results on ground and job creations to spur demand and growth,” Earlier, the minister interacted with tax by the informal sector, the main employment he said. mid growing concern over the slow- offi cials, traders, industrialists and entrepre- generator, “remains undocumented”. The re- Stating that the latest FDI ing economy and former Indian prime neurs in the city. Concerns over cooling of cent phase of low demand across sectors and reforms will boost local Aminister Manmohan Singh slamming economy resurfaced as slowdown in manu- decline in manufacturing activity have in- manufacturing and propel the government policies for it yesterday, Fi- facturing pulled the GDP growth rate in the vited the government criticism from several growth in the industry, Raja nance Minister Nirmala Sitharaman said the fi rst quarter down to 5%, marking the fourth quarters, along with the political opposition. said, “We hope the festive government was in consultation with various successive quarter of decline. Former prime minister Singh earlier in the day cheer ushers in positive sectors and would respond to the situation as From 8% in Q1FY19 to 5%t Q1FY20, the GDP slammed the NDA government and blamed sentiments with better and when required. growth rate has fallen by 3% in barely a year. On its policies for the economic slowdown. “In- retail sales in the upcoming “The government has been in consultation the slide in auto sales, the Minister said the sec- dia has the potential to grow at a much faster months.” with several sectors. Because in some sectors, tor was facing problems due to several factors, rate, but the all-round mismanagement by TKM is a subsidiary of Toyota the inventory is piling up... There are diff erent including transition from BS-IV to BS-VI emis- the Narenrda Modi government has resulted Motor Corp of Japan for the issues for diff erent sectors. sion norms and prospective buyers were delay- in this slowdown,” said Singh. manufacture and sales of Having heard that and spent some time to ing their decision. To help revive the auto sector, Calling the slowdown a “man-made cri- Toyota cars in India. see how best we can respond, the fi rst tranche Sitharaman on August 23 had announced the sis”, Singh, an eminent economist, prima- of announcements was made on August 23,” government departments would be allowed to rily blamed the demonetisation and a “hast- Sitharaman said here yesterday. As India’s buy new vehicles, automobiles purchased till ily implemented GST” for the present state gross domestic product (GDP) growth rate March 31, 2020 would avail the benefi t of ad- of economy. Criticising the government, fell to a six-year low of 5% for the April-June ditional depreciation of 15%, with total depre- the former Prime Minister said, “I urge the quarter, apprehensions of slowdown have ciation up to 30%, and BS-IV vehicles bought government to put aside vendetta politics started getting deeper. till March 31, 2020 would remain operational and reach out to all sane voices and thinking China plans The fi nance minister who recently an- for their entire registration period. minds, to steer our economy out of this man- nounced a slew of measures to retrieve the On fears of job losses due to the recent an- made crisis.” However, reacting to Singh’s al- situation, yesterday avoided a direct answer nouncement of merger of banks, she said legation of vendetta politics, Sitharaman said, Nirmala Sitharaman, India’s finance minister, gestures as she speaks more to a query whether the economy was cooling. there won’t be any retrenchment and the gov- “Is Dr Singh saying ‘instead of indulging in during a news conference in New Delhi. Amid growing concern over “Last Friday, I made another set of an- ernment was infusing capital into the merged political vendetta they should consult sane the slowing economy and former Indian prime minister Manmohan support for nouncements. I have also said, I will come entities to strengthen the banking system. voices?’ Has he said that? All right, thank you, Singh slamming the government policies, Sitharaman said the back again when the process of consultations On changes to the goods and services tax I will take his statement on it. That is my an- government was in consultation with various sectors and would are over, and we have worked on or we can (GST) rates, Sitharaman said it would be swer.” respond to the situation as and when required. economy

Reuters Beijing Tesla raises car hina plans to provide more support for its Ceconomy, including in- vesting in infrastructure projects and regional development, while prices in China maintaining a prudent monetary policy with “reasonably” ample liquidity, the State Council said yesterday. on tariff war As the world’s second-largest economy weathers its biggest slowdown in decades, the State Bloomberg change, referring to information Council said the government Shanghai available on the company’s web- aimed to better integrate fi scal, site. Tesla is constructing a plant fi nancial and monetary policies, in China, an increasingly impor- deepen capital market reforms esla Inc raised car prices in tant market for the loss-making and further open up the fi nancial China, responding to trade company as incentives for electric sector. Ttensions that weigh on the vehicles in the US wane. “We attach great importance country’s currency and have led Tesla plans to start producing to the development of infra- to oscillating import tariff s on ve- cars at the factory near Shanghai, structure, high-tech, traditional hicles. Tesla’s fi rst outside of the US, by industrial transformation, social The price of a basic level im- the end of 2019. services and new growth re- ported Model 3 sedan went up Chief executive offi cer Elon gions,” the State Council said in a more than 2% to 363,900 yuan Musk was in China this week, statement following a meeting of ($50,900), Tesla’s website showed with his trip including a visit to the Financial Stability and De- Friday. the new Tesla site. velopment Commission (FSDC) Prices for basic level Model S He also made an appearance chaired by Vice Premier Liu He sedans and Model X sport util- at the World Artifi cial Intelli- on Saturday. ity vehicles increased by a similar gence Conference in Shanghai on China’s economy faces pres- percentage, to 793,900 yuan and Thursday. sures from a bruising trade war 809,900 yuan, respectively. At the event, Musk said he has with the United States. Tesla is among automakers never seen anything getting built The two countries began most aff ected by the US-China as fast as the Tesla facility, saying imposing additional tariff s on trade tensions, because it has no he is “astounded” by the progress each other’s goods on Sunday, local production yet and therefore at the site. “I really think China’s the latest escalation in the trade gets directly hit by any increases the future. It’s very impressive,” dispute, despite signs that talks in tariff s. he said. would resume some time this China threatened last week to A decline in the yuan reduces month. increase duties on US-made cars the value of any earnings that China’s vast manufactur- to as high as 50% in retaliation for Tesla brings back from China and ing sector shrank in August for President Donald Trump’s latest converts to dollars. the fourth month in a row, data A man cleans a Tesla Model X electric vehicle connected to a charging station outside one of the company’s showrooms in Beijing. Tesla planned levies on Chinese goods. Earlier this week, the Chinese showed on Saturday, although is among automakers most aff ected by the US-China trade tensions, because it has no local production yet and therefore gets directly A Tesla spokesperson in China currency fell to an 11-year low the services sector picked up for hit by any increases in tariff s. declined to elaborate on the price against the dollar. the fi rst time in fi ve months. Gulf Times 4 Monday, September 2, 2019 BUSINESS

State-backed fi rm in China set to pay S Korea exports tumble bondholders late again

Bloomberg Hong Kong for 9th month in August

inghai Provincial Invest- Reuters from a year earlier, the trade ministry economist at Eugene Investment and 21.3% in sales to neighbouring China $2.40bn surplus in July. The data came ment Group Co is set to Seoul data showed, exactly matching a me- Securities. South Korea is the fi rst ma- also contributed, the ministry data days after the central bank held its pol- Qpay its bondholders late dian 13.6% fall forecast in a Reuters jor exporting economy to report foreign showed. icy interest rate unchanged at 1.50% on for the second time this year, survey and marking the third month trade data each month and its compa- The ministry said in a statement ex- Friday after a 25 basis-point cut in July, indicating persistent fi nancial outh Korea’s exports tumbled in with a double-digit rate of drop in nies include some of the world’s top ports, excluding semiconductors, con- while keeping the door open for another strains at the company that’s August for a ninth consecutive exports. suppliers of chips, smartphones, cars tracted 8.7% year-on-year. reduction. considered by some as a local Smonth, on sluggish demand from That further dented growth pros- and ships, so providing an early guide to Disputes with Japan were hardly a It next reviews its policy on October government fi nancing vehicle. its biggest buyer, China, and depressed pects for South Korea and strengthened the health of the global economy. welcome development, although the 16. The Chinese state-backed prices of computer chips globally, gov- the case for an additional policy easing On Sunday, the fi nance minister eff ect has been negligible. South Korea’s economy grew 1.9% aluminium producer’s 2020 dol- ernment data showed yesterday. by the central bank, soon after a sur- also said South Korea was now likely to Japan has tightened curbs on exports during the fi rst half in annual terms lar bond trustee, Bank of New The bleak data clouded the outlook prise interest rate cut in July, for the fi rst miss this year’s growth target, just two of high-tech materials to South Korea, and private sector organisations pre- York Mellon Corp, has received for Asia’s fourth-largest economy as time in three years. months after the government down- and each has stripped the other of fast- dict full-year growth will fall to as low an overdue coupon payment on a brewing trade dispute with Japan “There’s no sign of the export mo- graded the goal to 2.4-2.5% from 2.6- track export status. as 1.4% from 2.7% last year, one of the the note, according to investors emerged as a new risk to the export- mentum gaining strength as the US- 2.7% earlier. Imports in August fell 4.2% from a worst fi gures in decades. briefed on the matter. Qinghai dependent economy on top of the pro- China trade dispute continued while The sluggish exports in August were year earlier, largely in line with a predic- On Thursday, the government pro- Provincial had failed to transfer longed confl icts between the United Japan’s export curbs and the political led by a 30.7% drop in shipments of tion of a 4% drop in the Reuters survey. posed for next year the most aggressive the funds last Friday, a day af- States and China. unrest in Hong Kong have shaken busi- semiconductor chips that account for That brought this month’s trade budget spending plan since the 2008- ter the due date, making it the Exports in August plunged 13.6% ness sentiment,” said Lee Sang-jae, an a fi fth of the total, while a decline of surplus to $1.72bn, compared with a 2009 global fi nancial crisis. second delay this year on its off - shore note payment. There’s no grace period for missed coupon on its $300mn 2020 note, according to the bond prospectus. A representative at BNY Mellon declined to com- ment citing client confi dentiality and calls to Qinghai Provincial’s offi ce responsible for securities information disclosure went un- answered. In February, the com- pany, based in the northwestern province of Qinghai, missed a semi-annual coupon before pay- ing a few days later. Qinghai Provincial’s 2020 dollar bond gave up gains to drop by 0.7 cents on the dollar at 5:58pm in Hong Kong, according to Bloomberg-compiled prices. It had risen fi ve cents earlier on Friday to post its biggest jump since January 23. The bond has dropped 18 cents so far this month amid repay- ment uncertainty, the data show. S&P Global Ratings down- graded its long-term issuer credit rating on the company to CCC- from CCC+ on Friday citing rising operational risks in the Qinghai provincial govern- ment’s co-ordination with fi - nancial and other institutions to arrange timely funding to service the company’s dollar notes. “We believe a default or distressed exchange appears to be inevita- ble in the next six months, ab- sent unanticipated signifi cantly favorable changes in QPIG’s cir- cumstances,” it said. CSCI Pengyuan Credit Rating said in July the company faced “massive pressure” to repay its debt despite the provincial gov- ernment’s backing. A shareholder of Qinghai Provincial, Xining Economic Development Zone In- vestment Holding Group, trans- ferred its 13% stake in July to avoid any adverse impact from payment risks at the aluminium producer. Ships sail in front of a gantry crane at a Hyundai Heavy Industries shipyard in Ulsan, South Korea. The country’s exports in August plunged 13.6% from a year earlier, the trade ministry data showed yesterday. Women making $4 a day could give Apple an alternative to China

Bloomberg Foxconn’s plant employs almost 15,000 There’s a long way to go: A mere Beijing workers – about 90% of them women 700,000 electronics manufacturing – and assembles phones for various jobs have been created since Make in manufacturers, including local best-seller India started, according to Mahindroo’s On a steamy summer morning, dozens Xiaomi. In recent months, workers began industry group. of buses pull up outside a cluster of low- testing and assembling Apple’s iPhone Skilled workers such as industrial de- slung, blue buildings in the south Indian X, which will be sold in India first and signers are in short supply, and there isn’t state of Andhra Pradesh. eventually exported. yet much of a supplier network providing Women dressed in colourful salwar An employee tests the camera of a crucial components such as batteries, kameezes disembark, their dupatta body mobile phone. semiconductors and processors.“India is scarves billowing as they make their A second mobile phone factory opened not there yet,” says Anshul Gupta, a senior way past hibiscus bushes and posters in 2017 in Sriperumbudur, about two research director at Gartner India.“But proclaiming, “Our aim, no accident.” hours by road from the first facility. things are beginning to fall in place. The night shift at Foxconn Technology It employs 12,000 and is partially India can bolster its manufacturing Group’s mobile phone plant in Sri City is automated.“By 2023,” Foulger says, “both capacity and help the world cut its reli- ending, and thousands of young women factories will be much larger and we’ll add ance on China.” are punching out as others stream in to two more locations.” Foxconn was integral to China’s trans- replace them. Foxconn currently ships parts in from formation into a manufacturing colossus, One of the arrivals is Jennifer Jayadas, China, but hopes one day to manufacture and Gou has told Modi that Foxconn a tall, slim 21-year-old who lives several displays and printed circuit boards locally. could help India do the same. miles away in a two-room hut with no Foulger is angling to capture a third But it took China 30 years to get running water. of the domestic smartphone market and there.“China’s advantage was its massive After gobbling down a free breakfast 10% of the global one. Eventually, he plans labour pool that could produce quite of chapatti flatbreads with a potato-and- to add other products, including Amazon cheaply, and they built on that by invest- pea curry, she dons a checked white hat, Echo speakers, to the mix.“Until now, ing heavily in logistics and transporta- apron-shirt, static-resistant footwear and India has made for India,” he says.“Soon tion,” says Andrew Polk, a founding tiny finger gloves. India will make for the world.” partner with Trivium China, a Beijing- Then Jayadas takes her place at a Seated in an off ice overlooking the based research firm. “Even as their labour testing station where she will spend the hubbub of the Sriperumbudur plant, the pool advantage is dissipating, they have next eight hours making sure the volume, strapping, bearded executive ticks off invested in processes and systems so vibration and other phone features work Employees work on an assembly line in the mobile phone plant of Rising Stars Mobile India Pvt, a unit of Foxconn India’s pluses: labour costs that are half they can produce eff iciently at scale and properly. “Smartphones used to be all Technology, in Sriperumbudur, Tamil Nadu. Foxconn’s plant employs almost 15,000 workers – about 90% of them that of China’s, a vast pool of workers get the goods to the market.” made in China,” she says. “Now, we make women – and assembles phones for various manufacturers, including local best-seller Xiaomi. including talented engineers, a govern- Catching up will require the Indian them here.” ment eager to help. government and private sector to invest Foxconn, also known as Hon Hai Preci- China, including the gadgetry Foxconn put all your eggs in a single basket,” says Arlington, before returning to India in the They have a staunch partner in Prime heavily in roads, rails, ports and other sion Industry Co, opened its first India fac- makes for Apple Inc, Amazon.com Inc and Josh Foulger, who runs Foxconn’s India mid-aughts to set up manufacturing for Minister Narendra Modi who is under infrastructure.“When China did it, global tory four years ago. It now operates two others. Employees arrive by bus for the operations. “We have to find viable and Nokia. pressure to bring down a jobless rate that supply chains were fragmented and there assembly plants, with plans to expand 6am shift. reliable alternatives. Obviously the alter- He joined Foxconn four years ago currently exceeds 6%. His government’s wasn’t another China,” Polk says. “India those and open two more. In late August, Trump ratcheted up the native location has to be competitive. to help founder Terry Gou establish as- four-year-old “Make in India” policy seeks will not only have to get it right but they India has become an important rhetoric – ordering American companies We can’t put a factory in Mexico for sembly plants in India, now the world’s to turn the country into a manufacturing have to get it right in a way to better manufacturing base as the Taipei-based to start pulling out of China and citing a manufacturing mobiles. fastest-growing smartphone market. power by off ering incentives to foreign China, and trade wars can only help at the company looks to diversify its operations national security law as justification. It might have worked 10 years ago, it Foxconn’s first India facility started in companies to open factories. “The plan is margins.” China also had the benefit of beyond China Succeeding in India has He backed off two days later, but many just won’t work today.” 2015 in Sri City, a special economic zone to expand India’s $25bn phone manufac- being able to grow without worrying too become all the more urgent since US companies have resigned themselves Workers eat breakfast in the canteen where goods can be imported and ex- turing to $400bn by 2024,” says Pankaj much about the environmental impact. President Donald Trump launched a trade to an inevitable and costly rethinking of before the start of the morning shift. ported with limited red tape and foreign Mahindroo, who heads the Indian Cellular With concern about climate change war last year and announced tariff s on their global supply chains. Foulger, 48, grew up in Chennai and companies make everything from diapers & Electronics Assn. “A substantial portion growing, “that’s not going to fly these thousands of products manufactured in “It’s a good business principle not to attended the University of Texas in to train carriages. of it will be for the export market.” days,” he says. Gulf Times Monday, September 2, 2019 5 BUSINESS

PSX closes seventh SECP fi nalises reforms agenda consecutive month in red for Pakistan capital markets Internews Karachi

Internews Islamabad The euphoria over the stunning rally in the preceding week that saw the KSE-100 index of Pakistan ollowing a series of meetings with stocks recording gains of a stag- market participants, the Securi- gering 2,585 points (9%) marking it Fties and Exchange Commission the best week in 10 years, could not of Pakistan (SECP) has fi nalised the re- sustain in the outgoing week. forms agenda for capital markets based The stocks retraced nearly 62% on demands presented by stakeholders. of the previous gains with KSE-100 SECP chairman and senior manage- index plunging 1,678 points (5.35%) ment met with the Stock Brokers As- and settling below the 30,000 level sociation (SBA) on Friday and assured at 29,672 points. them about the measures being adopted Incidentally, the benchmark in- for ease of doing business on the stock dex closed negative for the seventh exchange. consecutive month and lost 6.8% SECP chairman informed the SBA during August which also was the that reforms undertaken by the apex heaviest monthly decline this year. regulator aim to stabilise the markets, The placement of Pakistan on attract liquidity, facilitate ease of doing the ‘enhanced expedited follow up business, revitalise market develop- list’ by the Asia Pacific Group on ment and restore investor confi dence. August 23 put a dampener on the The reforms agenda has been fi nal- investor sentiment, with market ised after considering input provided closing the first trading session in by other market participants including the red. large brokers, leading corporate and fi - In addition to that, the potential nancial institutions and senior man- divestment of the 10% shares of the agement of the market infrastructure Pakistan Petroleum Ltd (PPL) and institutions. 7% shares of the Oil Gas Develop- Although the SECP has introduced ment Company (OGDC), index the Centralised Know-Your-Customer heavy weights, built further pres- Organisation (CKO) regime to facilitate sure on the index, stated analysts at investors and ensure transparency and AKD Securities. effi ciency in the process, brokers have Geo-political tensions also took raised objections against the CKO re- toll on the market. The major gime. positive for the week was govern- Despite resolving various issues re- ment’s introduction of presidential lated to biometric verifi cation of stock ordinance to waive off 50% of market investors under the CKO, the outstanding the Government Infra- regulator has placed the onus of bio- structure Development Cess over metric verifi cation on the stock brokers. dues from the CNG, power, fertiliser The brokers have asked the SECP to and industrial gas consumers, introduce central database for biomet- while allowing them the option to ric verifi cation to be executed by the Stockbrokers watch the latest share prices at the Pakistan Stock Exchange in Karachi. Following a series of meetings with market participants, the Securities and avail non-cash settlement against National Clearing Company of Pakistan Exchange Commission of Pakistan has finalised the reforms agenda for capital markets based on demands presented by stakeholders. outstanding sales tax, subsidy and Ltd (NCCPL). duty drawback receivable from the “The NCCPL has offi ces in stock ex- been revised which would now be ap- The SECP has also allowed the ‘Un- mandatory practices and recommended At the same time, the commission has government. change buildings and biometric verifi - plicable only on large exposures of bro- blocking and Pledging of Margin Fi- practices. also taken up two measures of defi ning The development was mainly cation should be conducted at one place kers whereas in order to manage risk, nancing Securities’ for meeting the The SECP has also decided to exempt ‘Minimum Brokerage Commission’ and positive, especially for fertiliser instead of verifi cation by each broker credit rating has been added while im- NCCPL margin requirements, require- applicability of International Financial release of PSX shares belonging to the sector and cushioned the overall independently,” said one PSX stock bro- plementing revised slabs. ments of tripartite agreement for mar- Reporting Standards (IFRS) 9 related to brokers that are likely to invite strong market dip. Some other positives ker based in Islamabad. Among other things, the SECP has gin fi nancing has also been removed. debts due from government to power reactions from some brokers whereas were noted as foreign exchange To enhance trading capacity of mar- introduced Murabaha Share Financing Responding to demands raised by the supply chain companies for a limited pe- others are expected to support it. reserves shored up 4% during the ket participants, the SECP has approved Regulations granting approval for lev- corporate sector, the SECP has decided riod of three years – that is up to June 30, The SECP considers that setting month and sizeable participation amendments in the NCCPL Regulations erage fi nancing in Shariah-compliant to amend the Listed Companies (Code 2021, as well as IFRS 16 to all companies, minimum commission at sale and pur- in 12-month Treasury bill indicated “for discontinuing the 10% additional securities. of Corporate Governance) Regulations, which have entered into power purchase chase of shares would encourage market market expectations of interest margins being collected from brokers The stock brokers’ complaints with 2019 to accommodate international arrangements before January 1. development and support commercial rates to have peaked out. and the 10% additional haircuts being regards to the ‘Blank Selling in Deliver- best practices and to facilitate ease of These exemptions have been made in viability of brokerage industry, while Average daily volumes clocked applied by the NCCPL on margin eligi- able Futures Contract Market’ have also doing business, considered shifting light of concerns expressed by compa- some brokers object to the move that it in at 124mn shares, down 29% ble securities.” been resolved by amending PSX Regu- from rule-based corporate governance nies regarding practical limitations in was contrary to concept of competition week-on-week while the average The slabs for liquidity margins have lations. framework towards a combination of their applicability. and free market. value traded stood at 29mn down by 23% WoW. Volume leaders were Lotte Chemical in which 53.63mn shares changed hands followed by K-Electric with volume of 34.86mn Pakistan, Iran to sign extension in IP gas line pact next week shares, Maple Leaf Cement Factory 29.68mn shares, Unity Foods 25.22mn shares and OGDC Internews amendment on the IP-GSPA. Under top offi cials of National Iranian Oil aboard, so he will now be in Istan- sign a document assuring Iranian side 21.55mn shares. Foreign buying was Islamabad the IP gas project, Pakistan was to im- Company (NIOC) and Pakistan’ Inter- bul in next week to sign the amended that Pakistan is still for IP gas line and witnessed in commercial banks at port gas of 750mmcfd which was to State Gas System (ISGS) will sign next GSPA. acknowledges the rights of Iran under $2.0mn and technology and com- increase up to 1,000mmcfd and addi- week in Istanbul (Turkey) the amended Prime Minister Imran Khan vis- GSPA. munication at $1.0mn. slamabad and Tehran have extended tional quantity of 250mmcfd was to be IP gas deal under which Pakistan will ited Tehran on April 20-21 and on the In the document to be signed next On the domestic front, major the Iran-Pakistan (IP) gas line GSPA used in Gwadar. build the said pipeline by August 26, sidelines Special Assistant to Prime week in Istanbul, Iran will withdraw selling was reported by mutual I(gas sales purchase agreement) Since Pakistan remained unable to 2024 and after that Iran will take legal Minister on Petroleum Nadeem Babar the notice it earlier served on Pakistan funds at $13.5mn, while individuals for next fi ve years till August 26, 2024 lay down 781 kilometres pipeline under course if Pakistan fails. held meeting with Iranian counter- in February 2019. bought stocks worth $8.6mn and through a mutually agreed amend- its territory from Iranian border touch- However, it all again depends if the part. The agreement was earlier signed in banks $2.6mn. ment. ing Gwadar and reaching up to Nawab- US sanctions remain very much there The Iranian side was of the view that 2009 during PPP government for 25 Sector-wise negative contribu- Under earlier GSPA, Pakistan was to shah because of failure to arrange the or these curbs are done away with dur- since Pakistan did not respond to the years, but since then the project could tions came from oil and gas explo- have a fi rst gas infl ow from Iran under required fi nancing in the wake of US ing next fi ve years. proposed addendum to the IP-GSPA not get the shape. ration companies down 519 points, IP gas line from January 1, 2015 after sanctions, Iran served legal notice on According to the document, the the only legal remedy left for Iran was Also most 10 years have elapsed since commercial banks 400 points, implementing the gas project by De- Pakistan in February 2019 for failure amendment in the IP gas deal was to to issue legal notice to Pakistan. the signing of the agreement and the oil and gas marketing companies cember 31, 2014, reveals a draft agree- in implementing the gas line project earlier get signed in Turkey by August During the particular visit, Iranian construction period for pipeline in Pa- 160 points, cement 139 points, and ment approved by cabinet which will be and getting Iranian gas from January 1, 26, but it got delayed as the name of side intended to withdraw the notice kistan territory which comprises three power generation and distribution signed by both the sides next week. 2015. Mobin Saulat, Managing Director of if the agreement on extension of IP gas years has been wasted. The Iranian au- 216 points. Scrip-wise laggards According to the copy of the draft After agreement to extend the IP- Inter-State Gas System, was Exit Con- sales purchase accord is fi nalised. thorities want Pakistan to mutually ex- were OGDC 247 points, PPL 193 agreement, French legal counsel Gide GSPA, Iran has already withdrawn legal trol List (ECL) as he is facing a NAB case A source said the federal cabinet tend this period under GSPA. Iran has points, Habib Bank Ltd 134 points, Loyrette Nouel (GIDE), Attorney Gen- notice it served on Pakistan on moving against the award of fi rst LNG terminal. meeting held last Tuesday did not already asked Pakistan to review the Bank Al Habib Ltd 79 points and eral Pakistan and Law Ministry played the arbitration court. Now Mobin Saulat has managed amend the IP gas line deal, rather gave price of gas under IP, but no talks on Pakistan State Oil 63 points. pivotal role in fi nalising the draft for As per offi cial document, now the to get one time exemption for going approval to authorities concerned to this issue have been held so far.

Bank of Japan steps up fight to stop yields from hitting all-time lows

Bloomberg reduction shows the BoJ isn’t totally The yen rose 0.1% to 106.43 per dollar. Tokyo ignoring the situation and just allowing Friday’s twin steps come as the markets to push yields lower.” sustained rally in global debt markets The BoJ is up against waning inflation saw yields in Japan continue to decline The Bank of Japan intensified its at home and a slowing global economy even after the BoJ cut purchases of eff orts to stop benchmark yields from that’s weighing on yields worldwide. five-to-10 year bonds on August 16, falling to record lows by cutting bond It will continue to face pressure from which was the first reduction in the purchases on Friday and then paving the international bond rally given zone since December. the way to reduce them further in the ongoing US-China trade tensions, Traders in Tokyo had been debating coming month. concerns about Brexit and the turmoil over what actions the BoJ could The central bank followed up on in Argentina and Hong Kong. take, with tapering bond purchases a ¥50bn ($470mn) reduction in The central bank off ered to buy considered to be the easiest option for purchases of five-to-10 year debt this ¥400bn of five-to-10 year securities the central bank. morning with a move to lower the at Friday’s regular operation – down Speculation over widening the yield buying range for this key maturity from ¥450bn previously – marking band has also been rife among market zone at its operations in September. the biggest cut to its purchases in the watchers, while some others have Speculation the BoJ would step in to tenor since starting yield-curve control indicated the possibility of the BoJ halt the slide in yields was running in 2016. putting a limit on the yield investors high as the global debt rally caused The bond-buying plan for September can off er at its buying operations, the 10-year yield to drop further out released later in the day showed eff ectively setting a floor on rates. of the central bank’s target range. it intends to buy between ¥250bn The BoJ’s policy meeting on September Having come within one basis point and ¥550bn of these notes at each 18-19 is widely expected to provide of an all-time low of minus 0.3% on operation next month. That’s versus a more insight into its thinking. Thursday, the yield rose following band of ¥300bn to ¥650bn for August. For now, the central bank’s action BoJ’s actions on Friday, with that on Japan’s 10-year yield was up 1 basis Friday should make “investors similar-maturity US Treasuries also point for the day at minus 0.28%, after wary of the minus 0.3% level,” said moving higher. rising to as high as minus 0.265% in Naoya Oshikubo, a senior economist “The BoJ showed its stance by tapping immediate response to the operation. at Sumitomo Mitsui Trust Asset the brakes when yields are falling,” said The BoJ in July 2018 said it would Management Co. The ¥50bn cut was Naomi Muguruma, a senior market target a range of about 20 basis points “aggressive” and will be “eff ective in The Bank of Japan headquarters in Tokyo. The BoJ intensified its eff orts to stop benchmark yields from falling to record economist at Mitsubishi UFJ Morgan above or below zero per cent for the slowing the pace of the yield drop,” he lows by cutting bond purchases on Friday and then paving the way to reduce them further in the coming month. Stanley Securities in Tokyo. “The yield. said. Gulf Times 6 Monday, September 2, 2019 BUSINESS

KUWAIT KUWAIT OMAN

Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume

Al-Eid Food Ksc 61.20 0.00 - Oman Packaging 0.27 0.00 - Al-Madar Finance & Invt Co 116.00 6.42 3,032,993 Qurain Petrochemical Industr 340.00 0.00 43,651 Oman Oil Marketing Company 1.07 0.00 - Gulf Petroleum Investment 23.90 0.84 163,152 Advanced Technology Co 930.00 0.00 - Oman National Engineering An 0.12 0.00 - Mabanee Co Sakc 779.00 1.17 468,583 Ekttitab Holding Co Sak 16.40 2.50 331,980 Oman Investment & Finance 0.11 0.00 - Inovest Co Bsc 66.90 0.00 100,000 Real Estate Trade Centers Co 22.20 -8.26 403 Oman Intl Marketing 0.52 0.00 - Al-Deera Holding Co 12.40 -0.80 25,100 Acico Industries Co Kscc 140.00 -0.71 120,000 Oman Flour Mills 0.66 0.00 - Mena Real Estate Co 37.60 0.53 1,895,155 Kipco Asset Management Co 92.00 0.00 - Oman Fisheries Co 0.08 0.00 - Amar Finance & Leasing Co 41.50 0.00 - National Petroleum Services 1,099.00 0.00 - Oman Europe Foods Industries 1.00 0.00 - United Projects For Aviation 440.00 0.00 - Alimtiaz Investment Group 132.00 0.76 1,537,232 Oman Education & Training In 0.23 0.00 - National Consumer Holding Co 55.00 0.00 - Ras Al Khaimah White Cement 62.50 -5.87 106,196 Oman Chromite 3.64 0.00 - QATAR Amwal International Investme 55.00 0.00 - Kuwait Reinsurance Co Ksc 158.00 0.00 - Oman Chlorine 0.36 0.00 - Equipment Holding Co K.S.C.C 18.70 0.54 1,083,984 Kuwait & Gulf Link Transport 74.40 3.33 610,873 Oman Ceramic Company 0.42 0.00 - Company Name Lt Price % Chg Volume Arkan Al Kuwait Real Estate 79.00 0.00 621,343 Humansoft Holding Co Ksc 3,230.00 0.94 37,977 Oman Cement Co 0.21 0.00 - Gfh Financial Group Bsc 74.00 1.23 1,114,628 Automated Systems Co Kscc 80.00 0.00 - Oman Cables Industry 0.81 0.00 - Energy House Holding Co Kscp 21.50 -2.27 250 Metal & Recycling Co 0.00 - Oman & Emirates Inv(Om)50% 0.00 - Zad Holding Co 13.26 -1.92 8,670 60.00 0.07 Kuwait Co For Process Plant 202.00 1.00 9,525 Gulf Franchising Holding Co 0.00 - Natl Aluminium Products 0.00 - Widam Food Co 6.14 0.33 22,757 160.00 0.22 Al Maidan Dental Clinic Co K 1,240.00 0.00 - Al-Enma’a Real Estate Co 0.22 652,548 National Real Estate Develop 0.00 - Vodafone Qatar 1.23 0.00 1,840,267 46.10 5.00 National Shooting Company 12.10 2.54 29,812 National Mobile Telecommuni 0.00 24,295 National Mineral Water 0.00 - United Development Co 1.37 0.00 206,934 717.00 0.09 Al-Ahleia Insurance Co Sakp 429.00 0.00 - Sanad Holding Co Kscc 0.00 - National Life & General Insu 0.00 - Salam International Investme 0.39 -0.26 654,550 0.00 0.31 Wethaq Takaful Insurance Co 28.00 0.00 - Unicap Investment And Financ 8.86 10 National Gas Co 0.00 - Qatar & Oman Investment Co 0.50 0.20 23,970 47.90 0.15 Salbookh Trading Co Kscp 41.10 3.01 703,235 Al Salam Group Holding Co 1.34 4,503,792 National Finance Co 0.00 - Qatar Navigation 5.94 -1.82 128,025 37.90 0.14 Aqar Real Estate Investments 79.00 0.00 - Al Aman Investment Company -1.74 55,079 National Detergent Co Saog 0.00 - Qatar National Cement Co 5.62 -1.40 66,540 56.40 0.70 Hayat Communications 60.00 0.00 - Mashaer Holding Co Ksc 2.76 2,601,377 National Biscuit Industries 0.00 - Qatar National Bank 19.21 0.31 2,054,505 74.50 3.92 Soor Fuel Marketing Co Ksc 120.00 -1.64 34,635 Manazel Holding 0.35 12 National Bank Of Oman Saog 0.00 - Qatar Islamic Insurance 6.00 0.00 12,551 28.50 0.18 Tamkeen Holding Co 5.20 0.00 - Tijara And Real Estate Inves 0.00 - Muscat Thread Mills Co 0.00 - Qatar Industrial Manufactur 3.11 0.97 88,248 42.00 0.08 Alargan International Real 129.00 -9.79 10 Jazeera Airways Co Ksc 0.00 - Muscat Insurance Co Saog 0.00 - Qatar International Islamic 7.70 -0.52 1,121,088 970.00 0.78 Burgan Co For Well Drilling 85.00 0.00 - Commercial Real Estate Co 0.00 363 Muscat Gases Company Saog 0.00 - Qatari Investors Group 1.97 0.51 306,027 93.10 0.14 Kuwait Resorts Co Kscc 60.00 -0.66 126,682 National International Co 8.94 150 Muscat Finance 0.00 - Qatar Islamic Bank 16.20 2.53 493,324 67.00 0.06 Oula Fuel Marketing Co 120.00 0.00 5,144 Taameer Real Estate Invest C 1.07 28,010 Muscat City Desalination Co 0.00 - Qatar Gas Transport(Nakilat) 2.37 -0.42 2,323,636 18.90 0.10 Palms Agro Production Co 59.00 0.00 - Gulf Cement Co -0.86 25,100 Majan Glass Company 0.00 - Qatar General Insurance & Re 3.64 1.39 99,672 57.50 0.18 Mubarrad Holding Co Ksc 62.00 1.64 112,600 Heavy Engineering And Ship B 0.00 340,971 Majan College 0.00 - Qatar German Co For Medical 0.64 0.63 506,187 407.00 0.17 Shuaiba Industrial Co 150.00 0.00 - National Real Estate Co 0.12 202,472 Hsbc Bank Oman 0.00 - Qatar Fuel Qsc 21.66 0.28 170,838 83.40 0.13 Aan Digital Services Co 16.90 3.68 3,782,964 Al Safat Energy Holding Comp 0.00 - Hotels Management Co Interna 0.00 - Qatar First Bank 0.29 -0.34 6,074,912 20.50 1.25 First Takaful Insurance Co 42.50 0.00 - Kuwait National Cinema Co -4.94 437 Gulf Stone 0.00 - Qatar Electricity & Water Co 15.08 -0.13 149,939 770.00 0.12 Kuwaiti Syrian Holding Co 40.50 -1.22 4 Danah Alsafat Foodstuff Co -0.70 55,435 Gulf Mushroom Company 0.00 - Qatar Exchange Index Etf 10.15 1.20 8,657 28.20 0.31 National Cleaning Company 58.00 -1.53 4,974 Independent Petroleum Group 0.23 11,000 Gulf Investments Services 0.00 - Qatar Cinema & Film Distrib 2.15 0.00 - 442.00 0.08 United Real Estate Company 62.00 0.00 14,000 Kuwait Real Estate Co Ksc -1.19 635,921 Gulf Invest. Serv. Pref-Shar 0.00 - Al Rayan Qatar Etf 2.32 -3.50 117,468 83.00 0.11 Agility 760.00 0.66 1,101,348 Salhia Real Estate Co Ksc 0.00 - Gulf International Chemicals 0.00 - Qatar Insurance Co 3.04 -2.88 1,726,764 336.00 0.14 Kuwait & Middle East Fin Inv 60.00 2.56 668,000 Gulf Cable & Electrical Ind 0.92 262,499 Gulf Hotels (Oman) Co Ltd 0.00 - Qatar Aluminum Manufacturing 0.76 -1.56 2,068,102 440.00 9.50 Fujairah Cement Industries 53.00 0.00 - Kuwait Finance House 0.27 5,560,518 Global Fin Investment 0.00 - Ooredoo Qpsc 6.94 -0.86 437,683 750.00 0.07 Livestock Transport & Tradng 186.00 0.00 76,510 Gulf North Africa Holding Co 0.00 - Galfar Engineering&Contract 0.00 - National Leasing 0.66 -1.49 356,197 59.00 0.08 International Resorts Co 12.60 0.00 - Hilal Cement Co 0.00 - Galfar Engineering -Prefer 0.00 - Mazaya Qatar Real Estate Dev 0.73 -0.14 338,820 96.00 0.39 National Industries Grp Hold 240.00 0.42 5,047,020 Osoul Investment Kscc 2.86 119,716 Financial Services Co. 0.00 - Mesaieed Petrochemical Holdi 2.87 1.06 4,243,750 72.00 0.18 Warba Insurance Co 62.50 -6.72 9,651 Gulf Insurance Group Ksc 0.64 10,724 Financial Corp/The 0.00 - Al Meera Consumer Goods Co 14.90 0.00 232,057 626.00 0.10 First Dubai Real Estate Deve 26.40 -2.22 39,200 Umm Al Qaiwain General Inves 2.08 14,391 Dhofar Tourism 0.00 - Medicare Group 7.82 -1.88 430,395 73.50 0.49 Al Arabi Group Holding Co 77.00 -0.13 35,000 Aayan Leasing & Investment 1.22 15,623,296 Dhofar Poultry 0.00 - Mannai Corporation Qsc 3.43 0.00 32,844 58.20 0.18 Kuwait Hotels Sak 100.00 0.00 - Alrai Media Group Co Ksc 9.68 1 Dhofar Intl Development 0.00 - Masraf Al Rayan 3.62 -0.28 2,906,030 34.00 0.30 Mobile Telecommunications Co 572.00 1.24 2,815,711 National Investments Co 0.75 112,516 Dhofar Insurance 0.00 - Al Khalij Commercial Bank 1.18 0.00 627,924 134.00 0.17 Eff ect Real Estate Co 20.50 0.00 - Commercial Facilities Co 0.51 55,000 Dhofar Generating Co Saoc 0.00 - Industries Qatar 11.12 2.21 766,999 196.00 0.19 Tamdeen Real Estate Co Ksc 308.00 0.00 - Yiaco Medical Co. K.S.C.C 0.00 - Dhofar Fisheries & Food Indu 0.00 - Islamic Holding Group 2.05 0.00 176,764 66.50 1.28 Al Mudon Intl Real Estate Co 19.00 -2.56 706,608 Dulaqan Real Estate Co 0.00 - Dhofar Cattlefeed 0.00 - Investment Holding Group 0.50 0.00 649,180 350.00 0.13 Kuwait Cement Co Ksc 274.00 0.00 - Real Estate Asset Management 0.00 - Dhofar Beverages Co 0.00 - Gulf Warehousing Company 4.70 -1.67 147,089 95.40 0.26 Sharjah Cement & Indus Devel 67.40 0.00 - Construction Materials Ind 0.00 - Gulf International Services 1.57 0.64 680,061 0.04 Kuwait Portland Cement Co 1,210.00 0.67 165,000 Computer Stationery Inds 0.00 - Ezdan Holding Group 0.61 -3.79 22,452,560 0.26 Educational Holding Group 320.00 0.00 - Bankmuscat Saog 0.22 - Doha Insurance Co 1.06 0.95 24,000 0.45 Bahrain Kuwait Insurance 200.00 0.00 - Bank Nizwa 0.00 - Doha Bank Qpsc 2.59 -0.38 430,352 0.09 Asiya Capital Investments Co 34.30 0.29 107,179 OMAN Bank Dhofar Saog 0.00 - Dlala Holding 0.70 0.72 2,114 0.15 Kuwait Investment Co 141.00 0.71 489,800 Arabia Falcon Insurance Co 0.00 - Commercial Bank Psqc 4.66 -2.10 1,149,678 Company Name Lt Price % Chg Volume 0.10 Burgan Bank 347.00 -0.29 786,691 Aloula Co 0.00 - Barwa Real Estate Co 3.35 -1.47 2,342,692 0.53 Kuwait Projects Co Holdings 223.00 0.00 632,375 Al-Omaniya Financial Service 0.09 0.00 - Al Khaleej Takaful Group 1.76 -2.76 632,702 Voltamp Energy Saog 0.18 0.00 - Al Madina For Finance And In 17.50 1.16 570,452 Al-Hassan Engineering Co 0.02 -9.09 - Al Ahli Bank 0.75 -0.53 2,208,537 Vision Insurance Saoc 0.12 0.00 - Kuwait Insurance Co 335.00 0.00 - Al-Fajar Al-Alamia Co 0.75 0.00 - United Power/Energy Co- Pref 1.00 0.00 - Al Masaken Intl Real Estate 63.10 20.88 60 Al-Anwar Ceramic Tiles Co 0.10 0.00 - United Power Co Saog 2.50 0.00 - Intl Financial Advisors 43.00 0.23 411,663 Al Suwadi Power 0.07 0.00 - United Finance Co 0.06 0.00 - KUWAIT First Investment Co Kscc 33.60 0.90 1,015,668 Al Sharqiya Invest Holding 0.08 0.00 - Ubar Hotels & Resorts 0.13 0.00 - Al Mal Investment Company 13.00 1.56 219,993 Al Maha Petroleum Products M 0.80 0.00 - Takaful Oman 0.12 0.00 - Company Name Lt Price % Chg Volume Bayan Investment Co Kscc 42.30 5.75 54,000 Al Maha Ceramics Co Saoc 0.17 0.00 - Taageer Finance 0.10 0.00 - Egypt Kuwait Holding Co Sae 450.00 0.00 - Al Madina Takaful Co Saoc 0.08 0.00 - Sultan Center Food Products 45.40 0.22 1,000 Sweets Of Oman 0.55 0.00 - Coast Investment Development 31.50 -3.67 1,570,256 Al Madina Investment Co 0.02 0.00 - Kuwait Foundry Co Sak 262.00 0.00 32,500 Sohar Power Co 0.10 0.00 - Privatization Holding Compan 53.90 0.00 - Al Kamil Power Co 0.38 0.00 - Kuwait Financial Centre Sak 98.90 1.02 498,976 Sohar International Bank 0.11 0.00 - Injazzat Real State Company 82.00 0.00 - Al Jazerah Services -Pfd 0.55 0.00 - Ajial Real Estate Entmt 125.00 0.00 - Smn Power Holding Saog 0.08 0.00 - Kuwait Cable Vision Sak 16.00 -20.00 1,584 Al Jazeera Steel Products Co 0.23 0.00 - Kuwait Finance & Investment 41.40 0.98 1,528,020 Shell Oman Marketing - Pref 1.05 0.00 - Sanam Real Estate Co Kscc 37.50 1.35 114,056 Al Jazeera Services 0.13 0.00 - National Industries Co Ksc 180.00 0.00 - Shell Oman Marketing 1.03 0.10 - Ithmaar Holding Bsc 22.30 0.00 - Al Izz Islamic Bank 0.07 0.00 - Kuwait Real Estate Holding C 27.00 -3.57 95,107 Sharqiyah Desalination Co Sa 0.29 0.00 - Aviation Lease And Finance C 261.00 -0.76 223,041 Al Buraimi Hotel 0.88 0.00 - Securities House/The 45.20 -2.16 171,713 Sembcorp Salalah Power & Wat 0.11 0.00 - Arzan Financial Group For Fi 27.00 1.12 10,609,468 Al Batinah Power 0.07 0.00 - Boubyan Petrochemicals Co 777.00 0.13 165,772 Salalah Port Services 0.60 0.00 - Ajwan Gulf Real Estate Co 13.70 2.24 3,323,634 Al Batinah Hotels 1.13 0.00 - Al Ahli Bank Of Kuwait 315.00 0.00 26,050 Salalah Mills Co 0.57 0.00 - Kuwait Business Town Real Es 41.10 0.00 - Al Batinah Dev & Inv 0.08 0.00 - Ahli United Bank (Almutahed) 336.00 0.30 81,572 Salalah Beach Resort Saog 1.38 0.00 - Future Kid Entertainment And 86.60 0.12 12,187 Al Anwar Holdings Saog 0.09 0.00 - National Bank Of Kuwait 995.00 0.30 1,451,669 Sahara Hospitality 3.09 0.00 - Specialities Group Holding C 75.50 -0.13 75,830 Al Ahlia Insurance Co Saoc 0.32 0.00 - Commercial Bank Of Kuwait 500.00 -0.20 18,474 Renaissance Services Saog 0.28 0.00 - Abyaar Real Eastate Developm 14.70 1.38 4,967,801 Ahli Bank 0.12 0.00 - Kuwait International Bank 275.00 0.36 690,495 Raysut Cement Co 0.35 0.00 - Dar Al Thuraya Real Estate C 179.00 0.00 - Acwa Power Barka Saog 0.66 0.00 - Gulf Bank 302.00 1.00 4,689,379 Phoenix Power Co Saoc 0.08 0.00 - Kgl Logistics Company Kscc 39.50 1.02 387,010 Abrasives Manufacturing Co S 0.05 0.00 - Al-Massaleh Real Estate Co 38.10 0.00 - Packaging Co Ltd 2.21 0.00 - Combined Group Contracting 243.00 1.67 2,932,166 A’saff a Foods Saog 0.60 0.00 - Al Arabiya Real Estate Co 25.80 0.00 10,500 Ooredoo 0.52 0.00 - Jiyad Holding Co Ksc 43.70 0.00 - 0Man Oil Marketing Co-Pref 0.25 0.00 - Kuwait Remal Real Estate Co 27.90 5.68 985,001 Ominvest 0.34 0.00 - Warba Capital Holding Co 65.20 -9.44 84,965 #N/A Invalid Security 0.00 0.00 - Alkout Industrial Projects C 840.00 0.00 - Oman United Insurance Co 0.17 0.00 - Gulf Investment House Ksc 50.00 -1.77 87,500 #N/A Invalid Security 0.00 0.00 - Oman Telecommunications Co 0.60 0.00 - A’ayan Real Estate Co Sak 64.20 0.94 672,026 Boubyan Bank K.S.C 577.00 1.05 602,998 Oman Refreshment Co 1.35 0.00 - Investors Holding Group Co.K 10.00 1.01 5,018,944 Ahli United Bank B.S.C 286.00 2.14 12,789,904 Oman Qatar Insurance Co 0.09 0.00 - Al-Mazaya Holding Co 53.70 1.32 3,852,992 Osos Holding Group Co 105.00 0.00 - LATEST MARKET CLOSING FIGURES

Morgan Stanley quants pick energy All-or-nothing market lurches stocks as TD sees Asia demand all around and goes nowhere Bloomberg recession is at hand or evidence the Fed- New York eral Reserve went too far. Big up sessions Bloomberg came a day later and were said to show the Singapore strength of earnings, the power of stimulus f you’re an investor convinced the and the benefi ts of an expanding economy. trade war is going to cause a reces- Thesis got drubbed today? It should be nergy companies have strug- Ision sometime soon, the market saw fi ne tomorrow. gled this year to get interest it your way in August, delivering three In the end, the bull-bear symmetry Efrom investors, but they’re separate plunges of 2.6% or more in the was near-perfect. Twenty-two August starting to get more attention from S&P 500. trading days, 10 down, 12 up. Volatil- a couple notable areas. On the other hand, if you’re sure eve- ity indexes that spent parts of the month S&P 500 Energy companies are rything’s under control, that President 50% higher than where they started set- down 0.6% year-to-date and Stoxx Donald Trump will steer the economy tled back to where they began. Prices 600 Oil & Gas has gained just 0.3%, out of trouble, the same index served up were chaotic, but locked in a range. Three while WTI crude is up about 25%. seven diff erent 1% rallies affi rming your times the S&P 500 plunged 2% or more, Energy is also the only one of 11 US view. and three times it bounced from almost industry groups that’s currently in In August equities, bone-rattling re- the exact same fl oor. the red for 2019, with the broader versals were the norm. Going by one met- Anytime markets get moving this jar- S&P 500 up 17%. ric, “all-or-nothing days” in which up or ringly, scrutiny, informed and otherwise, Those divergences have made the down share volume got to historical ex- is trained on traders using computers, sector a favourite of analysts. That’s tremes on the New York Stock Exchange, entities that get lumped under labels like also grabbed the attention of TD the month saw as much back-and-forth “the algos” but who in truth at this point Ameritrade Singapore Pte’s inves- volatility as any in four years. are everyone. Only a machine could be tors, while Morgan Stanley quanti- Naturally, despite all the tumult, shares suckered into reacting to Trump’s blovia- tative strategists on Thursday put completed the month with one of their tion so credulously, the theories go, and out a note about applying machine- smallest wire-to-wire moves of the year it’s making markets unsafe for human learning tactics to pick stocks in the – down 1.8% on the S&P 500. It was an- habitation. European oil sector. other lesson in humility for anyone trying Chris Zaccarelli, chief investment of- “Where I see our customers ac- to make sense of market swings. However fi cer for Independent Advisor Alliance: tively trading is the energy sector,” important day-to-day moves feel emo- “I think algos are responsible for quick, TD Ameritrade Singapore chief ex- tionally, they carry all the meaning of soda knee-jerk moves, but it’s harder to blame ecutive offi cer Chris Brankin said in fi zz. them for full-day losses. Using it as an an interview. “There’s a lot of focus “It was like the last nine months on excuse is as much a crutch as a retailer on the big oil equities as they’re steroids,” said Peter Mallouk, president of blaming bad sales on the weather. It’s down on the year and oil is up. Creative Planning, a wealth-management somewhat true, but it’s an exaggeration Which one is right?” fi rm with about $43bn in assets. “All of it and it’s lame.” Brankin points to companies like smashed into a few weeks,” he said. “The Nancy Tengler, chief investment strat- Exxon Mobil Corp, Chevron Corp, swings with the Fed and tariff s were just egist, Tengler Wealth Management: “It’s Halliburton Co and Schlumberger led by Martijn Rats wrote in a note. tive” on energy stocks, especially Goepfert sees a sector that has been much more signifi cant and the stakes get been driven by the fact that the algos own Ltd as those getting attention from “If the shares have underper- those in exploration & production beaten down and it “can’t generate higher as time goes on.” the court in the short term on any day. clients. He added that some energy formed recently, all the better.” They or services. Halliburton and Sch- any buying interest,” but the market Odds are, it’s a world US investors will They can have outsize infl uence in the near companies are paying relatively high noted that BP Plc met the criteria, lumberger both deal with oil-fi eld may be close to a bottom. need to get comfortable with as ques- term because the programs start selling or dividend yields. reaffi rming their overweight rating services, while Chevron and Exxon “Over the past month, an average tions about trade and global growth buying. And then when you add the fact Morgan Stanley’s analysis “sug- on the stock. Mobil are generally considered inte- day has seen nearly 15% of the stocks linger into an election year. However that half of Wall Street is on vacation, the gests that investors should scout for Of course, there are reasons en- grated oil companies. sitting at a 52-week low. That’s quickly sell-offs get unwound these market appears directionless.” majors with the highest dividend ergy stocks have suff ered. “Long term the market structure creeping up on some of the most days, markets are showing themselves For people who blame the algos, a fol- yields, low near-term expectations Integrated oil companies “can of oil has become much worse owing sustained bouts of selling pressure vulnerable to moves that two years ago low-up question could be: so what? The for free cash fl ow, a healthy degree add some portfolio ballast, but re- to the prolifi c nature of shale,” Bar- in almost 20 years,” Goepfert wrote were all but unheard of. market’s digital infrastructure is unlikely of gearing, a capex-to-dividend turn potential is modest,” according ish said in an e-mail. “So forecasting in a note on Wednesday. “The other Stitching together a narrative for Au- to be dismantled anytime soon, things ratio that is not too low, and where to Brian Barish, chief investment a correct price/earnings multiple is times this happened, the Energy Se- gust got particularly futile as the month generally get faster, and overall levels of there is a credible path to superior offi cer at Cambiar Investors LLC in diffi cult, adding to the challenge.” lect Sector SPDR Fund saw gains all wore on. Big down days were framed as a volatility aren’t any diff erent from 50 or 70 free-cash-fl ow growth,” analysts Denver. He is “not very construc- Sundial Capital Research Inc‘s Jason but twice over the next six months.” rebuke of the president’s policies, signs a years ago. Gulf Times 10 Monday, September 2, 2019 BUSINESS Could cryptocurrency dethrone the dollar?

AFP many emerging nations because their debts tend to be London denominated in dollars. The BoE chief, who steps down in January, added: “In the longer term, we need to change the game.” Bank of England governor Mark Carney has suggested Central bank role? that a virtual currency, modelled on Facebook’s Libra, could one day replace the dollar as king of the foreign The public sector, in the form of central banks, could exchange market. instead provide the best support for a new virtual The BoE chief aired vague proposals for a so-called currency, according to Carney. “Synthetic Hegemonic Currency” at the recent Jackson “It is an open question whether such a new Hole Symposium of central bankers. (cryptocurrency) would be best provided by the public Here is a brief assessment of why the greenback is sector, perhaps through a network of central bank losing its lustre and the outlook for Carney’s proposed digital currencies,” he said. new digital currency, which would be supported by Yet central bankers and world leaders alike remain major central banks around the world. anxious over the current crop of virtual currencies Why dollar dominance? because they are unregulated. US President Donald Trump himself has lashed out The dollar has been the world’s reference currency since at Bitcoin and Libra for being “based on thin air” and the Bretton Woods agreement in 1944, when various key having no standing or dependability — unlike the units were fixed to the value of the greenback. dollar. It has retained its global supremacy ever since, thanks Commentators believe Washington is unlikely to allow to the economic and political clout of the US. the greenback to lose its cherished status as the world’s “The dominant currency is always that of the world’s premier reserve currency. biggest political power,” noted Philippe Waechter, head “The United States will simply not allow it to happen of research at Ostrum Asset Management. without a fight. Nobody in its position would,” said The dollar accounted for almost 62% of global foreign Rabobank analysts. exchange reserves in the first quarter of 2019, according What about Libra? to the International Monetary Fund. The European single currency was second with 20.2%, The BoE governor meanwhile made explicit references while China’s yuan comprised only 2% despite the to Libra — a future cryptocurrency unveiled by social country’s rise to the rank of the world’s second biggest media giant Facebook in June. economy behind the US. Carney avoided all mention of Bitcoin, which is the Why is greenback losing appeal? world’s most popular digital unit but has been plagued by volatility. Although the dollar has lost its sparkle owing to Libra, which aims to launch in the first half of 2020, will globalisation and the changing world economic be backed by a basket of currency assets to avoid the order, gyrations in the US unit still impact economies wild swings of bitcoin and other cryptocurrencies. elsewhere. Yet Libra has also attracted the ire of central bankers “US developments have significant spillovers onto both owing to its origin in the private sector. the trade performance and the financial conditions of “Central banks are a little annoyed by this (Facebook) countries even with relatively limited direct exposure bid to privatise currency,” said Agnes Benassy-Quere, a to the US economy,” Carney said at the recent bankers’ researcher at the Paris School of Economics. meet in Wyoming. Whereas Bitcoin is decentralised, Libra will be co- The dollar accounted for almost 62% of global foreign exchange reserves in the fi rst quarter of 2019, according to When the greenback appreciates, so do repayments for managed by 100 partner firms including Facebook itself. the International Monetary Fund Gulf Times Monday, September 2, 2019 11 BUSINESS

Huge returns raise risk alarm at New Swedbank CEO under fi re $230bn funds in Denmark

Bloomberg Copenhagen for past ties to scandal-hit bank

Bloomberg The two biggest funds in the Stockholm world’s top performing pension market just delivered some of their best returns ever. But weden’s biggest shareholder their results may be a cause for group has criticised Swedbank concern. SAB’s choice of chief executive Part of the reason they did so offi cer, arguing the board opted for well was that virtually all asset an insider who failed to stop the bank classes in their portfolios rose in sinking into a Baltic money-laundering value in the first half of the year. scandal when he had the chance. At ATP and PFA, which oversee Jens Henriksson will take over as a combined $230bn from their CEO of the Stockholm-based bank “as headquarters in Denmark, the soon as possible,” according to a state- worry is that the near lock-step ment last week. Swedbank has been movement of bonds and stocks run by its chief fi nancial offi cer, Anders will make it hard to limit losses Karlsson, since Birgitte Bonnesen was through diversification, once fi red in March amid concerns she mis- markets turn. led the public about the severity of a Allan Polack, the chief ex- dirty-money aff air that triggered mul- ecutive off icer of Copenhagen- tiple investigations, including in the US based PFA, says that the “diver- Joacim Olsson, the CEO of the Swed- sification models that we have ish Shareholders’ Association, said all been working with – you can Henriksson has a “long and impressive question the degree to which CV, but the wrong profi le.” Jens Hen- they actually work, because this riksson Born in 1967, Henriksson comes year, bonds and equities have from a position as CEO of Swedbank’s moved in the same direction.” second-biggest shareholder, insurer He spoke after unveiling the Folksam. fund’s best half-year return rate Since 2013, he’s also been on the ever. nomination committee of the bank’s At ATP, CEO Bo Foged says board. His appointment comes after it’s a situation that demands investors voiced anger over Swedbank’s extra attention to risk manage- handling of the laundering scandal, ment. That includes “asking risk including its apparent eff orts to keep employees an extra time that them in the dark, with some arguing they’re sure about diversifica- that a new CEO must come from out- tion” and getting people to “do side the lender’s ranks. more stress testing, so that one “The bank would have needed a per- understands what the eff ect of son recruited externally,” Olsson said in this could be.” a phone interview. As a representative Last week, ATP reported an of one of Swedbank’s biggest share- adjusted rate of return of about holders, Olsson said that Henriksson A woman walks past a Swedbank branch in Riga. Sweden’s biggest shareholder group has criticised Swedbank’s choice of chief executive off icer, arguing the board opted 32% for the first six months of has had “infl uence over the appoint- for an insider who failed to stop the bank sinking into a Baltic money-laundering scandal when he had the chance. the year, roughly double what’s ment of a board that has had an inabil- normal for the fund. Foged says ity to build structures to prevent money Shareholder Losses Swedbank share- the right person.” She pointed to his gations emerged, concerns were aired with him “a strong communicative the tandem movement across laundering.” holders have seen the value of their in- close attachment to the bank during in national newspaper editorials that ability and a broad knowledge of the asset classes doesn’t bode well, Olsson pointed to Henriksson’s ties vestment plunge almost 40% this year the years when it is alleged to have po- old friendships and former career ties banking and fi nancial industry,” the especially given fears of a reces- to Swedbank and its current chair- amid allegations that the bank may tentially handled more than $100bn in may have shaped the way the Swed- chairman said. sion. “If it can go up, it can also man, Goran Persson, whom Henriks- have handled vast sums of dirty Rus- suspicious transactions tied to its Baltic bank claims were handled by people In Henriksson, Swedbank has found go down,” he said. son advised when they both worked at sian money, and after its former CEO operations. at the nexus of power in fi nance, poli- a CEO who has both “skill, experience Denmark’s pension system the fi nance ministry in the 1990s, as an failed to keep shareholders informed of “As a large owner that has been on tics and regulation in a small nation of and a strong moral compass, which is has long held the title of the example of his status as an insider. The the developments. the nomination committee,” Bratt said 10mn. For example, Henriksson has exactly what the bank needs right now,” world’s best, measured by the head of the shareholders’ association After the news of Henriksson’s ap- that Henriksson is “partly responsible career connections with the head of according to Joakim Bornold, a savings level and sustainability of the also noted that Henriksson lacks the pointment, shares fell about 1% in for what happened within the bank.” the Swedish fi nancial regulator and adviser at Soderberg & Partners. benefits it provides. Since being “thorough banking experience” that Stockholm on Thursday. The bank is She says that as the CEO of investor the head of another Swedbank share- This is a “very good decision.” Folk- included in the Melbourne such a job requires. among this year’s worst performers in Folksam, Henriksson failed to ask dif- holder, Alecta. sam, of which Henriksson has been Mercer Global Pension Index in Speaking to reporters in Stockholm the Bloomberg index of European fi - fi cult questions when he should have. Persson, who took over as chairman CEO since 2013, currently holds 7.1% of 2012, it’s ranked first in all but on Thursday, Persson acknowledged nancial stocks. Henriksson’s career includes a this year after the laundering scandal Swedbank. one year. that Swedbank’s “reputation right now At investment broker Nordnet, ad- stint at Swedbank as its global head of led to the departure of his predecessor, It beefed up its position in the bank With a trade war between isn’t exactly the best.” The people run- viser Frida Bratt said that Henriksson bank relations in 2010. Before that, he praised the new CEO as an “experi- during the global fi nancial crisis a the US and China, a potential ning the bank are “struggling with the is “of course a very competent per- worked at the International Monetary enced” leader. Henriksson, who worked decade ago, when Swedbank suff ered no-deal Brexit and the threat of issue of money laundering and need to son with a solid experience. But that Fund. as a top adviser to Persson when he was heavy losses due to credit impairments a recession all on the horizon, take the situation extremely seriously.” doesn’t automatically mean that he is After the money-laundering alle- fi nance minister in the 1990s, brings in the Baltic countries. pension funds are devoting ex- tra time to shielding portfolios from the worst. That follows years of struggling to adjust to ultra-low interest rates that have driven many funds into Peugeot workers target Brexit spoils as no-deal risk mounts increasingly exotic asset classes in an eff ort to generate extra returns. Bloomberg proposing the company’s Peugeot sites Spokesmen for PSA and Vauxhall also made in Gliwice, Poland, though Ford Motor Co said in June that its In Denmark, where the Paris in Sochaux and Mulhouse as possible declined to comment further following the location is due to focus on vans. Bridgend engine plant in Wales will central bank uses policy to keep contenders. Johnson’s latest pronouncements. Vauxhall already plans to cut more than be shuttered by September next year, the krone pegged to the euro, UK carmakers have been saying since The Paris-based group inherited 200 jobs from Ellesmere Port’s pay- though the move is part of a Europe- asset managers have lived with utoworkers in continental Eu- the 2016 referendum on Britain’s EU Vauxhall in 2017 when it bought the roll. A smaller plant in Luton, where wide retrenchment. negative rates for seven years. rope are angling to snatch Vaux- membership that a no-deal split would carmaker’s German sibling Opel from the brand is based, will benefi t from Jaguar Land Rover, Britain’s big- They’re now bracing for more, Ahall production that owner PSA be a disaster. General Motors Co, under which the an electric version of the Vivaro van gest automaker, is building the Jaguar with one prominent bank CEO Group plans to move out of the UK Production fell in July for the 14th UK business had survived intact as from 2020, increasing its capacity to I-Pace SUV, its fi rst all-electric car, in in the country recently warning if Prime Minister Boris Johnson fol- straight month as exports cratered 15%, Opel sites including Bochum were 100,000 vehicles a year and helping to Austria and shifting production of the that rates may not turn positive lows through on the threat of a no-deal according to the Society of Motor Man- closed. safeguard it against closure. Land Rover Discovery to Slovakia. At again for another eight years. Brexit. ufacturers and Traders. Tavares said in June that the next- About 80% of all cars made in the UK the same time, it’s retooling its Soli- Polack says his fund has Vauxhall’s Ellesmere Port plant near Honda Motor Co is already shut- generation Opel Astra will be made at are exported, with half of those going to hull plant to make electric versions of learned to live with the nega- Liverpool is in line to build an upgraded tering a site in Swindon that employs that brand’s main Russelsheim plant the EU, according to the SMMT. Britain top-end Range Rovers and last month tive yields, particularly after version of the Astra model, subject to a 3,500 people, and Nissan Motor Co no in Germany from 2021. The Vauxhall- accounts for about 10% of PSA’s global announced that a range of electric Jag- hedging guaranteed pension split that doesn’t wipe out profi ts with longer plans to build the X-Trail sport badged version would be built at Elles- unit sales. uars will be assembled at nearby Castle accounts. But he also says there tariff s, component delays or a weaker utility vehicle at the country’s biggest mere Port - conditional on the UK’s Where the UK’s other key auto plants Bromwich. are many unknowns ahead. pound. With the no-deal risk rising af- auto plant in Sunderland. Brexit terms and a cost-cutting labor stand: Honda shocked the industry in BMW AG starts production of an “Our headache is all these ter Johnson decided to suspend parlia- PSA chief executive offi cer Carlos agreement. February when it announced plans to electric Mini in the UK this year, and things which are up in the air,” ment, France, Spain, Germany or Por- Tavares said last month that all produc- The FO union’s Michel said French close the Swindon site, which makes has said there are no plans for any he said. These include questions tugal are poised to mop up work if an tion will be pulled from Ellesmere Port sites that also include one in Rennes Civic hatchbacks. changes to its four UK plants. around the kind of monetary accord with the European Union can’t if Brexit makes it impossible to turn a would negotiate with management The news came after Nissan ended Aston Martin Lagonda Plc, which policy Christine Lagarde might be reached. profi t at a factory that has 1,000 work- to secure the Astra, while suggesting moves to build X-Trail sport utility has lowered its full-year sales forecast embrace when she takes over “French plants could legitimately ers and made 77,000 Astras last year. lower-cost Spanish factories in Vigo, vehicles at a Sunderland plant em- in response to slowing sales in Europe, as president of the European make this vehicle if a hard Brexit hap- A plant in southern Europe has been Zaragoza and Madrid, may be better ploying more than 7,000, and said it opened a new factory in Wales this year Central Bank later this year. pens,” said Patrick Michel, a Force earmarked as an alternative location for placed. PSA has an additional plant in would stop producing upscale Infin- to make the DBX SUV touted as the big- Ouvriere union representative at PSA, the new model, he said. Mangualde, Portugal, and the Astra is iti cars there. gest driver of future sales.

SPOTLIGHT ON COMMODITIES Gold’s impressive rally spreads to silver and platinum

By Ole S Hansen strong seasonal demand. Industrial Trump, under pressure from angry discount to gold crumbling by $80 Supported by Opec production cuts metals were mixed with strong gains in farmers, would boost quotas for grain- during this time to $600. The gold- and falling US crude stocks, the market nickel being off set by losses elsewhere, based biofuels. Apart from news on silver ratio measuring the value of managed to stabilise despite China The Bloomberg Commodity Index, led in particular by zinc. the biofuel front, the next focus for the one ounce of gold in ounces of silver announcing a 5% tariff on US crude oil which tracks a basket of major Iron ore suffered one of its worst US grain market will be the upcoming dropped to 83 after topping out imports from September 1. commodities, evenly spread between months ever slumping by a quarter harvest season. recently at a multi-decade high above Brent crude oil’s attempt to recover energy, metals and agriculture, traded as supply disruptions in Brazil and Beginning September 9, the US 93. has on several occasions throughout lower for a second month in a row Australia eased while demand Department of Agriculture will release We maintain a bullish outlook for August been met with resistance during August. from Chinese mills showed signs of weekly harvest progress reports. precious metals with the outlook for around $61.50/b. Together with the This is in response to continued cooling. Gold’s impressive rally, which began global growth, the direction of short downtrend from April this is the area concerns about the outlook for global Most of the focus however was once with the collapse in global bond yields and long-term interest rates and a that needs to be broken for short- growth and with that demand for key again centred on precious and platinum back in early June initially, left other prolonged trade war between the US covering and renewed momentum commodities. Trade hostilities between group metals. metals with weaker fundamentals and China providing the necessary buying to emerge. the US and China continued to ebb After reaching a six-year high at $1555/ trailing. However, after reaching a support. Renewed dollar strength may However, while the technical outlook and flow which created a challenging oz, gold has stalled with investors six-year high and with speculative provide a challenge in the short-term has improved, we continue to see environment. looking for relative value jumping into longs hitting record levels, investors but as long as gold remains above a challenging road ahead given the Not only for commodities but also silver and platinum. have begun looking for relative value $1490/oz, we are unlikely to see any recessionary risks being signalled bonds and stocks as the market tried Two metals, which up until August had in other metals such as silver and major appetite for adjusting long through the collapse in global bond to keep up with announcements from seen their relative discount to gold, platinum during the past couple of positions. yields and the inversion of the US yield both Washington and Beijing. reached historic levels. weeks. Brent crude oil remains trapped in a curve. Crude oil traded lower despite Opec The agriculture sector, troubled by Corn sold off and following a roller- This expansion of safe-haven demand narrowing trading range as the outlook keeping production tight with future tariff s and ample supply, bore the brunt coaster ride, returned to the May low saw platinum head for its biggest for future demand remains clouded  Ole S Hansen is head of commodity demand worries more than off -setting of the selling. before bouncing back on the news that weekly gain since 2015 with the with a great deal of uncertainty. strategy at Saxo Bank. Monday, September 2, 2019 GULF TIMES BUSINESS Brent posts a monthly drop of 7.3%; WTI falls by 6%

www.abhafoundation.org slightly higher than levels agreed take advantage of low prices and under its output deal with Opec+, but as hot weather recently drew down Moscow is still aiming to comply fully inventories. Oil with the deal according to energy Demand was also firm from India, with Oil futures fell on Friday, with US minister Novak. Torrent Power and Indian Oil Corp each crude down nearly 3% ahead of a seeking a cargo for delivery in October. hurricane near the Florida coast that Gas Supply was also plentiful, as Australia’s could dampen demand. However, Asian spot prices for LNG were steady Ichthys LNG plant off ered a cargo for prices were still headed for the biggest last week as spot demand from October while Malaysia’s Petronas weekly increase since early July, Japanese buyers stockpiling ahead of closed a tender off ering a cargo from boosted by an easing of the US-China winter soaked up supply off ered from its Bintulu plant. Egyptian Natural Gas trade dispute. Brent crude futures Australia and Malaysia. Spot prices off ered three cargoes for loading in settled at $60.43 a barrel while US West for October delivery to Northeast September in a tender which was later Texas Intermediate (WTI) crude futures Asia are estimated to be about $4.70 cancelled due to low bids. settled at $55.10. per mmBtu, steady from the previous In the US, the Henry Hub strengthened increased consumption forecast also announced that Train 1 of the  This article was supplied by the Oil prices have fallen around 20% week. Japanese buyers have been towards the end of last week, and significant reduction of wind project has begun producing LNG Abdullah bin Hamad Al-Attiyah since they hit a 2019 peak in April - in seeking cargoes in the spot market closing at just below $2.29/MMBtu generation in the Southwest and with the first cargo expected later International Foundation for Energy part because of concerns that the US- for fourth quarter delivery as they on Friday. This was driven by an Western regions. Freeport LNG have this month. and Sustainable Development. China trade war could hurt the global economy and soften demand for oil. In August alone, Brent posted a monthly drop of 7.3%, and WTI fell by 6%. Last week, however, WTI gained by 1.7% and Brent by 1.8%, partially due to hopes that trade tensions between the world’s two biggest oil consumers are easing. US crude oil output fell for a second straight month in June, dropping by 33,000 barrels per day (bpd) to 12.08mn bpd, the US Energy Information Administration said in a monthly report released on Friday. In an indication of future production, US energy firms cut 12 oil rigs last week, bringing the total count down to 742. The rig count has now declined for the ninth straight month to its lowest level since January last year. Meanwhile, Opec’s oil output rose 80,000 barrels per day in August, the first monthly increase this year, despite the Opec+ agreement to reduce supply last December. Russia’s oil output in August was also

Trump aid payments to boost farm profi ts Gut check time for Treasuries this year, says USDA

Bloomberg after biggest rally since 2008 Washington he Trump administration said farm- Bloomberg the year. At play in market gyra- ers are doing better than previously New York tions and expectations for monetary Tthought, forecasting profi ts will rise policy has been an acute focus on the 5% in 2019 to the best in fi ve years because of US-China trade war, with the out- the president’s trade aid programme. he rally that swept through the look often changing on a dime. The more favourable portrait of agricultur- Treasury market in August is One day, a tweet from Trump may al fi nances comes as the administration has Tthe strongest since the depths send stocks reeling and bonds surg- faced increasing criticism from farmers over of the 2008 crisis. This insatiable de- ing, only for a more conciliatory tone losses from the president’s intensifying tariff mand for the safety of bonds faces a from either side to drive up risk as- war with China. Farmers openly challenged reality check in the days ahead. sets the next day. Agriculture Secretary Sonny Perdue earlier A roster of events may provide But while US stocks just notched last month at an event in Minnesota. insight into the strength of the US their fi rst weekly gain since July, de- The US Department of Agriculture (USDA) economy and the Federal Reserve mand for the safety of fi xed income on Friday projected net farm income this year chief’s thoughts. On Friday, the persisted, as investors continue to will reach $88bn, up from $84bn last year. monthly payrolls report is expected assess the outlook for infl ation and That’s a rosier fi nancial picture for farmers than to show continued labour market the US consumer. prior estimates, which didn’t anticipate the lev- strength. The data has been murky, at best. el of aid Trump would provide to compensate Later that day, Jerome Powell is set Measures on Friday confi rmed US for lost sales to China, said Jeff rey Hopkins, the to speak for the last time before the consumers continue to spend, but economist who supervised the forecast. Fed’s quiet period leading up to poli- confi dence metrics fell the most The last forecast, made in March, also cy makers’ next decision on rates. since 2012. didn’t include the level of aid payments farm- And don’t forget about the US- The Fed’s preferred measure of ers received for being unable to plant because China trade war. A new slate of tar- price pressures remains solidly be- of fl oods, Hopkins said. iffs on Chinese imports took effect low its 2% target. At the same time, Rob Larew, vice president of public policy yesterday. US real rates, gauged by the yield on for the National Farmers Union, the second- “There’s a lot of data to look out 10-year Treasury Infl ation-Protect- largest general farm organisation, said the for, including payrolls, with people ed Securities, have turned negative boost in profi ts “belies the economic diffi cul- also coming back from summer holi- for the fi rst time in three years. ties that most farmers are still facing” and re- days so activity should pick up quite It’s likely yields will stay close to lies entirely on aid from taxpayers. a bit,” said Alex Li, head of US rates current levels, according to Christo- “Though those payments are helpful in the strategy at Credit Agricole SA in New The US Treasury’s Pennsylvania Avenue entrance in Washington, DC. The US 30-year yields fell to an all-time low of pher Sullivan, chief investment of- short term, they ultimately are not a sustaina- York. “Powell’s speech will be closely 1.90% last week, while 10-year rates have dropped five straight weeks. fi cer at UN Federal Credit Union. ble solution to the ongoing farm crisis,” Larew monitored for any hints on monetary “Many people are expecting a re- said. “Unless the government plans to either policy in September and thereafter. Donald Trump’s tweets and off - year bonds are the most overbought ease further in 2020, predicted Li, versal in yields because it’s been such keep throwing money at these problems or And US-China trade talks will the-cuff remarks on the dispute with in years, according to Bloomberg In- who expects the 10-year Treasury a powerful rally,” said Sullivan. “But implement real solutions, farm income will also remain on the front burner for China have been a major catalyst telligence. US 30-year yields fell to yield to end 2019 at 1.45%. It sank there’s this insatiable demand for likely fall again next year.” traders.” The stakes are high with behind the rally. So was disappoint- an all-time low of 1.90% on August below that level repeatedly in recent safe yield, particularly for positive- John Newton, chief economist for the yields plumbing record lows and the ment over the Fed’s July 31 rate deci- 28, while 10-year rates have dropped days. yielding debt like Treasuries. American Farm Bureau Federation, the larg- Bloomberg Barclays US Treasury sion. Hedging was another factor. fi ve straight weeks. Fed funds futures indicate just And it’s likely that central banks est general farm group, said a 13% increase in index showing government bonds Whatever the cause, investors are The Fed will cut rates a quarter over a quarter point of easing priced will continue to be accommodative, farm bankruptcies in the 12 months through notching their best monthly return so desperate to own Treasuries that point in September and again some- in by the end of September and more with the Fed probably cutting again June and an uptick in delinquent farm loans since 2008. a measure of momentum shows 10- time in the fourth quarter, and then than a half-point cut by the end of in September.” suggest a tightening fi nancial squeeze.

BofA turns bullish on stocks, commodities

Bloomberg uity country indexes,” BofAML earlier this week, saying they war and a sell-off of risk as- London strategists including Michael expect equities to move high- sets. The decision by China’s Hartnett wrote in a note to er, starting with an uptrend in Ministry of Commerce to not clients on Friday. The reading September. immediately retaliate to esca- ore than $200bn of shows an “extremely bearish” That contrasted with UBS lating US tariff s, and the ap- equity outfl ows. That positioning from investors, Global Wealth Management, parent will of the two countries Mmay be what it took Hartnett said. which said it had gone un- to continue trade talks in Sep- for the BofAML Bull & Bear In- Investors have indeed dem- derweight on equities for the tember, provided some relief to dicator to fi nally fl ag a contrar- onstrated a dislike for equities first time since the euro-area investors’ fears. ian “buy signal,” its fi rst since this year, switching their expo- crisis, to reduce exposure to Over the longer term, the January 3. sure aggressively to bonds and trade wars and political un- BofAML strategists’ outlook Bank of America Merrill gold, according to fi gures from certainty. isn’t consistently rosy. While Lynch is bullish on risk assets fund fl ow and asset allocation September will be a crunch they show a strongly bull- The inauguration of Malabar Gold and Diamonds’ New Jersey outlet. for 2019, particularly stocks data provider EPFR. month for monetary policy. ish view for 2019, their 2020 and commodities. Investors’ As investors pulled $204bn The US Federal reserve is ex- stance tells a diff erent story. positioning, as well as dovish from stocks, fixed-income pected to cut interest rates Recession risks are mounting, Malabar Gold opens outlet in New Jersey monetary policies are giving assets attracted $325bn of further, while the European with monetary policy impo- impetus to the view. inflows, including a record Central Bank signalled it tence and a potential bubble in Malabar Gold and Diamonds, a leading jewellery retailer president (US operations); other directors, management The bank’s strategists high- $160bn in the past three may reduce borrowing costs bonds justifying their bearish globally, has opened its second outlet in the US at Iselin, team members and media were present on the occasion. lighted that the trade war has months alone, a clear sign and restart quantitative eas- view for next year: they antici- New Jersey. The jewellery retailer, with retail network of more than so far pushed interest rates of global recession fears and ing, although not all policy pate a trough in credit spreads The outlet was inaugurated by John McCormac, Mayor 250 outlets, had made its foray into the US (Chicago) in lower, rather than triggering a capitulation to the “Japani- makers agree that the out- and a peak in equity multiples of Woodbridge Township, New Jersey in the presence of 2018 by opening its 250th store globally. Its strategic recession. fication” theme, Hartnett look is weak enough to war- for 2020. M P Ahamed, chairman, Malabar Group; Dr P A Ibrahim plan includes expansion within existing markets and “The decline in the Bull & wrote. As for gold, the pre- rant the resumption of bond Since 2000, the BofAML Haji, co-chairman, Malabar Group and Shamlal Ahamed, new territories such as Bangladesh, Sri Lanka, Australia, Bear Indicator was driven by cious metal’s haven status is purchases. Bull & Bear Indicator has sent managing director (International Operations). Canada, Egypt and Turkey. In line with its 2023 global emerging-market debt and underscored by $12bn of 2019 Equities and commodities 16 “buy” signals, providing a Abdul Salam K P, Group executive director; Asher O, expansion plan, Malabar Gold and Diamonds will open 21 equity outfl ows, a rapid rally inflows. have rallied over the past two median three-month return managing director (India operations); Joseph Eapen, new stores in the coming six months. in Treasuries against corporate JPMorgan Chase & Co also days, at the end of a volatile for global stocks of 6.3%, and a bonds, and oversold MSCI eq- gave a bullish outlook on stocks month dominated by the trade hit ratio of 10 out of 16.