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Monday, January 25, 2016 Rabia II 15, 1437 AH HELPING HAND: Page 16 Qatar SMEs to get GULF TIMES global exposure through QDB’s BUSINESS ‘Franchise Project’ QNCC posts 10% jump in ’15 profit to QR463.55mn

Qatar National Cement Company (QNCC) has reported 10% jump in 2015 net profit to QR463.55mn on the back of higher revenues and cost containment. The cement manufacturer, in which government has a 43% stake, has recommended a total 50% dividend (40% cash and 10% bonus stocks). Of the QR463.55mn net profit, its cement busi- ness’ profit was QR401.96mn, sand QR23.13mn and others QR38.46mn, according to its balance Dr Seetharaman and other senior Doha Bank executives at a press conference held last night to announce the lender’s financial results for 2015. sheet filed with the Qatar Stock Exchange. Revenues grew 12% to QR1.17bn, of which sales from cement stood at QR965.07mn, sand QR172.56mn and others QR33.36mn. Although cost of sales rose faster at 16% to QR696.54mn, the company’s gross profit ex- panded 6% to QR474.45mn. Other income was up 1% to QR32.3mn. A 70% surge in interest income to QR7.69mn and 42% Doha Bank posts impressive in transport income to QR6.36mn was to a great extend contained by a 53% decline in other mis- cellaneous income to QR2.51mn, 16% in rental income from investment properties to QR7.1mn and 4% in dividend income from ‘available-for- sale assets’ to QR8.63mn. Moreover, the company reported QR1.44mn as net profi t of QR1.37bn in 2015 share of profit of associates against QR0.47mn share of loss in the previous year. The associ- oha Bank has reported more than 1% strategy to adapt to changing market and eco- ates are Qatar Saudi Gypsum Industries and growth in net profi t to an “impressive” nomic dynamics through innovation, diversi- Qatar Quarries and Building Materials Company, DQR1.37bn in 2015. fi cation and capitalising on market synergies. in which QNCC has 33.33% and 20% stake The lender has recommended 30%, or QR3, The bank’s capital adequacy ratio stood at respectively. per share cash dividend to be approved by 15.7% and its non-performing loans ratio was General and administrative expenses plunged shareholders at the annual general assembly 3.26% for which there was a 109% provision 24% to QR38.33mn mainly on a 28% decline in meeting scheduled on March 7. coverage, Seetharaman said, adding the bank’s salaries and benefits to QR16mn; even as loss on “This is another outstanding result and cost-to-income ratio was 36.7% as at Decem- foreign exchange fell 55% to QR3.23mn. is clear demonstration that Doha Bank con- ber 2015. Selling and distribution expenses were however tinues to perform consistently,” Doha Bank “Despite the diffi cult market conditions, up 3% to QR6.31mn. chairman Sheikh Fahad bin Mohamad bin Ja- Doha Bank recently managed to secure a Total assets were valued at QR3.32bn compris- bor al-Thani said. $575mn syndicated unsecured loan at an at- ing current assets of QR1.02bn and non-current The bank increased its total assets by tractive pricing and was oversubscribed by assets of QR2.29bn. QR7.8bn, a growth of 10.3%, from QR75.5bn $75mn. Furthermore, Doha Bank completed Total equity stood at QR2.84bn on a capital as at December 31, 2014 to QR83.3bn as at De- its issuance of an additional Tier 1 capital in- base of QR540.11mn and earnings-per-share was cember 31, 2015. strument amounting to QR2bn,” Seetharaman QR8.58 at the end of December 31, 2015. Net loans and advances increased to said. QR55.6bn in 2015 from QR48.6bn in 2014, He said the bank is reorganising the busi- registering a growth of 14.5%. Net interest ness model in 2016 to enhance productivity margins stood at 2.61% as at December 31, and will also redefi ne asset classes in order to ‘Aramco IPO could be open 2015. optimise the balance sheet. to international markets ’ Deposits showed a year-on-year increase On raising further capital to support its ex- of 14.8% from QR45.9bn in 2014 to QR52.8bn pansion, he said it was very much on cards but An initial public off ering of Saudi Aramco, as at December 31, 2015 which is “evidence of Sheikh Fahad and Sheikh Abdul Rehman: Impressive results. will take a call at an appropriate time when the world’s biggest oil company, could be the strong liquidity position of the bank”, the conditions are conducive. on the local or international markets but lender said. increase of 17.4% compared with the previous “The bank’s core revenue streams have He said depending on the conditions and would not include Saudi energy reserves, “Overseas operation accounts for 20% of year. shown strong growth over the prior year pe- subject to approval of regulators, some of the the company’s chairman told Saudi-owned the balance sheet,” Doha Bank Group chief ex- “Through the effi cient asset allocation riod refl ecting on the bank’s intrinsic strength representative offi ces it has will be converted Al-Arabiya television. ecutive offi cer R Seethraman said, adding the model, the return on average shareholders’ towards recurring earning capacity and also into full-scale branches. “The reserves would not be sold, but the bank has consistently delivered sustainable equity is 16.1% as at December 2015 one of the on the bank’s productive operational per- In line with its international expansion company’s ability to produce from the performance. best in the industry,” he said. formance,” Sheikh Abdul Rehman said. strategy, Doha Bank inaugurated its 12th rep- reserves is being studied,” Khalid al-Falih Doha Bank managing director Sheikh Abdul The bank has achieved a very high return on Doha Bank’s solid result in this challenging resentative offi ce in South Africa, completed told the channel in an interview from Rehman bin Mohamad bin Jabor al-Thani said average assets of 1.73% as at December 2015, market scenario, portray its commitment to the amalgamation formalities of the India op- Davos, Switzerland where the annual World the lender continues to perform well with total which is a “clear demonstration of the eff ective maximising shareholder value, the bank said. erations of HSBC Bank Oman and inaugurated Economic Forum was held last week. equity, as at December 2015, at QR13.3bn, an utilisation of shareholder’s funds”, he added. This was possible largely due to the bank’s its India operations in April 2015. Oxy to ‘stay very diligent’ in Qatar and Mideast

By Pratap John Occidental also participates in the Dol- processes and technical development Chief Business Reporter phin Gas Project, the premier trans-border programmes. gas project in the Middle East, which sup- On how she assessed Dolphin Gas Project, plies natural gas produced from wells off - Hollub said, “It is a great project. It was very ccidental Petroleum (Oxy) is “very shore Qatar to customers in the UAE and well designed, very well executed, built and happy” with its core areas of opera- Oman. is running very effi ciently now. It has been a Otion in Qatar besides Abu Dhabi and Occidental has a 24.5% undivided inter- great project…generates a good cash fl ow for Oman and “wants to focus and stay very dil- est in the development and production of the owners and does a really good thing for igent” here, said Vicki A Hollub, Oxy Presi- the project in Qatar’s North Field, one of the Qatar to get their gas out and for Abu Dhabi dent and chief operating offi cer. world’s largest gas reservoirs. The Dolphin and Oman to receive it.” “We are not interested in going to Iran,” Gas Project, which became fully operational She was all praise for Qatar and Abu Dhabi replied Hollub in an exclusive interview in 2007, has had a signifi cant impact in the for cooperating and collaborating on the when Gulf Times asked whether the end region and is expected to be a steady con- Dolphin Gas Project. of Iran sanctions will open gates to energy tributor to Occidental’s fi nancial perform- “That took some regional cooperation… companies that are keen to enlarge their ance for several years. and some agreement, in collaboration be- markets. For more than two decades, Occidental tween Abu Dhabi and Qatar to make it happen. “The reason why we are not (going to Iran) has worked in close cooperation with Qatar I applaud these kinds of things when they can is because we are still very happy with our Petroleum (QP) to develop and operate off - happen, and when companies can be a part of core areas here in the Middle East – in Qatar, shore oilfi elds. that. We always feel good when we are part of Abu Dhabi and Oman,” said Hollub, who was Oxy started production in Qatar in 1994 a project that we know is going to be benefi - on a brief tour of Qatar recently. (from the fi eld it was assigned at that time) cial to an area where we operate. Because what “We still think there are opportunities at less than 20,000 bpd, Hollub said. we are always striving is to be the ‘partner of working in these core areas for us to help In less than two and a half years, produc- choice’ in all the areas where we operate and these governments, national oil companies tion was ramped up to 140,000 bpd, which the companies that partner with us.” and communities. So, this is where we really she described as a “signifi cant ramp up”. On Oxy’s relationship with Qatar Petro- want to continue our concentration,” the “After that we have been able to keep leum, Hollub said, “We have a very profes- Houston, Texas-based Hollub said. production above 100,000 bpd. Our goal is sional relationship with QP. We pride our- Oxy’s board of directors plans for Hollub to continue to keep the production above selves as being a company that does the best to succeed Stephen I Chazen as CEO of Oc- 100,000bpd,” she said. work possible for our partners. And we do cidental after a thorough transition period, After assuming operation of ISND in share our thoughts and ideas with QP.” according to the company’s website. 1994, Occidental increased production Oxy Qatar has also initiated several pro- Occidental is Qatar’s second largest off - through extensive horizontal drilling, grammes to support employee development shore oil producer, where it operates Idd El waterflooding and multilateral produc- including a “Qatarisation Succession Plan- Shargi North Dome (ISND), Idd El Shargi tion. It continues to improve recovery ning Programme,” which helps with career South Dome (ISSD), and Al Rayyan (Block rates and add new reserves through state- plans. Many of Oxy Qatar’s employees are Occidental-operated PS-1 complex, off shore Qatar. Occidental is Qatar’s second largest off shore oil producer. 12). of-the-art reservoir characterisation nationals. PICTURE: Oxy Gulf Times 2 Monday, January 25, 2016 BUSINESS Major Gulf bourses rebound after oil, global stock markets rise

Reuters said a note by Saudi-based NCB Dubai Capital. “We believe that the increase in the bottom lines was prima- ajor stock markets in rily driven by higher operating the Middle East re- income,” the note said. Mbounded yesterday, Shares in Etihad Etisalat (Mo- joining the global market rally at bily) surged the daily limit of 10% the end of last week as investors after the company swung to prof- took solace in the bounce-back it in fourth quarter of 2015. Mobi- in crude oil prices. ly made a net profi t of 11mn riyals An across-the-board buying, particularly in the real estate, consumer goods, insurance and industrials counters, yesterday led the 20-stock Qatar Index to surge 4.63% to 8,981.61 Brent surged 10% to $32.18 a ($2.93mn), compared with a loss points. PICTURE: Noushad Thekkayil barrel on Friday, as bearish trad- of 2.11bn riyals a year earlier. ers who had taken out record Zain Saudi, another telecom short positions scrambled to operator, traded up 1.7% to 6.01 close them. riyals, off an intra-day high of The benchmark S&P 500 US 6.30 riyals. The company made equity index rallied 2% and reg- a net loss of 291mn riyals in the istered its fi rst positive week of fourth quarter. Two analysts 2016 and the MSCI All Country forecasted that the telecom World Index rose 2.7%. operator would make a loss of Qatar shares bounce Saudi Arabia’s index rebound- 247mn riyals and 232.7mn riyals, ed 2.7% to 5,612 points, but is respectively. 222 points off its session high. Dubai’s index rebounded The rally lost some steam in later 5.2% to 2,757 points, pull- trade as investors turned a quick ing away from a 28-month low profi t and cashed out, proving on Thursday. The majority of they lacked conviction that eq- shares jumped more than 2% in back with robust gain to uities have turned a corner. the largest volume of trades this “This is a typical oil track- year. ing rally,” said Santhosh Arabtec rocketed 10.0%, trim- Balakrishnan, senior research ming its year- to-date losses to analyst at Riyad Capital. Markets 3.2%. Emaar Properties also en- are still in a wait-and-see phase, joyed an 8% surge. and a fi rm comeback will only Abu Dhabi’s benchmark inch near 8,900 mark transpire once crude prices sta- jumped 4.3% to 3,839 points bilise, he added. from a 28-month low on Thurs- By Santhosh V Perumal however down 13.88% year-to- being Industries Qatar, QNB, sellers of QR12.89mn last Thurs- volume more than doubled to The majority of petrochemi- day, trimming its losses to 10.9% Business Reporter date. Barwa, Mazaya Qatar, Ezdan, day. 1.41mn shares, value gained 43% cal stocks, which have been bat- this year. The index that tracks Shariah- Gulf International Services, Non-Qatari institutions’ net to QR26.21mn and transactions tered by weakness in oil prices Dana Gas, the most traded principled stocks was seen gain- Aamal Company, Qatari Inves- profi t-booking weakened to by 20% to 756. since the start of the year, recov- stock on the bourse, advanced sharp rise in oil prices on ing faster than the other indices tors Group, Doha Bank, Qatar QR0.44mn against QR17.11mn the The market witnessed a 67% ered and the sub-sector index 5%. Friday appeared to have in the market, where the realty, Islamic Bank, Masraf Al Rayan, previous trading day. However, surge in the real estate sector’s climbed 2.6%. Blue-chip lenders National Aa profound eff ect on the banking, industrials and telecom Ooredoo, Vodafone Qatar and domestic institutions turned net trade volume to 3.1mn equities, Saudi Basic Industries (Sabic), Bank of Abu Dhabi and First Gulf Qatar Stock Exchange, which sectors together accounted for Nakilat; even as Mannai Corpo- sellers to the extent of QR34.12mn 52% in value to QR50.7mn and the largest petrochemical fi rm, Bank, which will start report- yesterday opened the week with more than 84% of the total trad- ration and Widam Food bucked compared with net buyers of 29% in deals to 946. traded up 3.2% to 63.92 riyals ing earnings from the end of this a robust 477 points gain to inch ing volume. the trend. QR43.51mn on January 21. The industrials sector’s ($17.04) after touching a high of week, traded up 3.9% and 4.5% near the 8,900 mark. Market capitalisation soared Local retail investors turned Total trade volume rose 92% trade volume expanded 62% to 67.25 riyals per share. respectively. An across-the-board buy- 4.15%, or more than QR19bn, to net buyers to the tune of to 10.29mn shares, value by 51% 1.73mn stocks, value by 53% to Earnings season has offi cially Small and mid-cap stocks - ing, particularly in the real es- QR477. QR16.81mn against net sellers of to QR277.41mn and deals by QR75.62mn and transactions by ended in Saudi Arabia, but some which are usually thinly traded tate, consumer goods, insur- The Total Return Index shot QR12.25mn last Thursday. 44% to 4,986. 51% to 1,087. companies reported late on - topped gainers. Emirates Driv- ance and industrials counters, up 4.63% to 13,960.62 points, Non-Qatari individual in- The consumer goods sector’s The transport sector saw a Thursday, before the rallies in oil ing, and Ras Al Khaimah Cement led the 20-stock Qatar Index the All Share Index by 4.43% vestors’ net buying soared trade volume almost tripled to 29% increase in trade volume to and global stock markets. soared 14.3% and 11.7% respec- to surge 4.63% to 8,981.61 to 2,388.61 points and the Al to QR5.96mn compared to 1.14mn equities and value more 0.44mn shares but on a 14% fall Al Rajhi Bank jumped 5.9%. tively. points. Rayan Islamic Index by 5.61% to QR1.42mn the previous trading than doubled to QR29.16mn on in value to QR9.61mn and 46% The Islamic lender reported a In Cairo, the main index trad- Local, Gulf and foreign re- 3,209.51 points. day. more-than-doubled transac- in deals to 177. 28.2% rise in its fourth-quarter ed up 3.2%, bouncing back from tail investors’ buying interests Real estate stocks gained the The GCC (Gulf Cooperation tions to 653. However, the insurance sec- net profi t on Thursday. It made a 28-month low close on Thurs- lifted the market, where trading maximum of 6.08%, followed by Council) individuals turned The banks and fi nancial serv- tor’s trade volume plunged 57% 1.95bn riyals ($519.6mn) com- day. turnover and volumes were on industrials (5.49%), insurance net buyers to the extent of ices sector reported more than to 0.03mn equities and value by pared with analysts’ forecasts of Elsewhere in the Gulf, Oman’s the rise. (5.17%), transport (4.11%), banks QR1.44mn against net sellers of doubling of trade volume to 63% to QR1.84mn; while trans- 1.67bn riyals. index advanced 1.5% to 4,942 Gulf institutions’ bullish out- and fi nancial services (3.55%) QR2.71mn on January 21. 2.43mn stocks, a 50% surge in actions grew 50% to 69. The banking sector’s total net points; Kuwait’s index edged up look and their foreign coun- and telecom (2.85%). The GCC institutions were value to QR84.26mn and 85% in In the debt market, there was income increased 3.8% year-on- 0.6% to 4,975 points, while Bah- terparts’ lower selling pressure About 93% of the stocks ex- also net buyers to the tune of deals to 1,298. no trading of treasury bills and year to 10bn riyals while loans rain’s index slipped 0.6% to 1,158 also helped the bourse, which is tended gains with major movers QR10.29mn compared with net The telecom sector’s trade government bonds. grew 8.2% over the same period, points. ‘Kuwait plans UAE central bank Q4 survey shows downtrend in demand for credit $100bn new sovereign fund’

Bloomberg tober, the lowest level in three Doha years, while Kuwaiti Finance Minister Anas al-Saleh has raised the prospect of introduc- uwait plans a new state- ing income, corporate and sales owned fund to manage as taxes to compensate for lost oil Kmuch as $100bn in local revenue. assets with the goal of selling Kuwait’s plan to privatise util- them to private investors in fi ve ities while removing domestic to seven years, Al- Anba news- energy subsidies is intended to paper has reported. make its power and water assets The new sovereign wealth more profi table for the fund and fund will include local assets attractive to potential investors, managed by the Kuwait Invest- according to Al-Anba. ment Authority, which has been Saudi Arabia is also planning burdened by its domestic man- to set up a new sovereign wealth date and will focus more on its fund to manage part of its oil international portfolio, Al-Anba fortune and diversify its invest- reported, citing unidentifi ed of- ments, Reuters reported earlier fi cials. Stakes in local compa- this month. The nation is seek- nies, as well as power and water ing proposals from investment projects, will be included in the banks and consultants, the news new fund, it said. service reported, citing uniden- A slump in oil is prompt- tifi ed people familiar with the ing energy producers across the matter. The fund may focus on Middle East to consider savings businesses outside the energy and project delays as they grap- industry, such as chemicals and A customer exits an Emirates NBD bank branch in Dubai (file). Demand for credit in the UAE was in a downtrend during the fourth quarter of last year, the UAE central ple with crude’s descent to near transportation, and may be ac- bank said yesterday as it released a survey of banks. The net balance measure for business lending - the weighted percentage of respondents reporting an increase in a 12 year low. tive within one to two years with demand for loans minus those reporting a fall in demand - dropped to minus 8.1 in the fourth quarter from plus 9.9 in the previous quarter. However, the survey found Saudi Arabia’s net foreign as- an offi ce in New York, Reuters respondents expect the net balance measure to recover to plus 3.5 in the current quarter, the central bank added. sets dropped to $640bn in Oc- reported. Gulf Times Monday, January 25, 2016 3 BUSINESS

Flynas in talks with Saudi to seek foreign non-oil Boeing, Airbus for investors as crude slumps 100 jets Bloomberg Low oil prices call traditional strategy since then and totalled just $8.0bn in Dubai into question; will now focus on 2014, fi gures from the UN Conference on sectors such as mining, health care, Trade and Development show. IT; aims to double or triple FDI within Al-Othman said SAGIA would seek to Saudi Arabia’s low-cost carrier 10 years; deposits of minerals not yet remove bureaucratic or regulatory obsta- Flynas is talking to Airbus Group fully identified; in talks with foreign cles to investment by talking to foreign SE, Boeing Co and Bombardier retailers, auto firms fi rms to identify their concerns, then dis- Inc about a potential order for cussing them with ministries and other 100 new aircraft, after the car- Reuters government bodies. rier posted a profit in 2015 for Riyadh The investment push is part of a larg- the first time in its history. er economic reform drive conceived by The airline is considering 60 Deputy Crown Prince Mohammed bin new planes in the next five audi Arabia aims to at least dou- Salman. Details of the programme, which years with an option for 40 ble annual infl ows of foreign direct includes privatisation, changes to the more, Flynas chief executive Sinvestment (FDI) over the next 10 way in which Saudi Arabia manages its oil Paul Byrne said in an interview years by focusing on new sectors such wealth and eff orts to make state spend- in Bahrain. It’s considering the as mining, health care and information ing more effi cient, are expected to be an- Airbus A320 Neos, Boeing 737 technology, the head of its investment nounced in coming days or weeks. Maxs and Bombardier CS300 agency said yesterday. Initially, mining may prove one of the aircraft and expects to decide The plan outlined by Abdullatif al- most attractive investment areas for for- on the order this year. Othman, governor of the Saudi Arabian eigners. While the kingdom has been ex- Saudi Arabia, with a population General Investment Authority (SAGIA), tensively explored for oil and gas, al-Oth- of 30mn people, is removing is part of a radical revamp of economic man said deposits of many other minerals restrictions in its travel market. policy as the kingdom seeks to adapt to an had not yet been fully identifi ed. It is be- It’s in the process of licensing era of cheap oil. lieved to have big deposits of phosphate, two new operators, Saudi Gulf In the past, foreign investment was bauxite, base metals and gold. Air and Al Maha Airways, which heavily concentrated in the oil and gas In a joint venture that could become is owned by Qatar Airways. sector of the world’s top crude exporter, a model for future projects, a local fi rm, The two new operators have as well as downstream industries such as majority state-owned Saudi Arabian experienced delays in obtaining petrochemicals. Mining Co, began producing copper last their permits. But the plunge of oil prices over the past month at a mine near Medina along with Flynas currently has an all- 18 months has called that strategy into Canada’s Barrick Gold Corp. Airbus fleet of 26 jets. question. Othman said SAGIA was now Al-Othman said Saudi Arabia aimed “We’re talking to Airbus, Boeing seeking foreign capital in a wide range of to move far beyond resource extraction, and Bombardier about pur- sectors without direct links to oil. partly because it needs to generate hun- chasing or leasing depending “If you look at an economy that has dreds of thousands of jobs for a rapidly on which is the best deal for been able to fetch about $10bn a year in growing local population. us,” Byrne said. “If we were to the traditional sector...we should be look- Last September, the government said change from Airbus to Boeing ing at multiples of that,” he said in an it would let foreign investors own 100% or Bombardier, that will be a interview. “So our hope is that we would of retail and wholesale businesses. Pre- big move for us, but it’s not as double or triple this level of FDI on a roll- viously, the ceiling was 75%. Authorities dramatic as it sounds.” ing average for the next 10 years.” have since received expressions of inter- The leases on Flynas’ 26 aircraft SAGIA faces big obstacles. Bureaucracy est from foreign retailers, al-Othman will end within six years and it and Saudi’s legal system have deterred said, declining to name them. will require additional aircraft foreign investment in the past; now low Saudi Arabia does not have a major do- for replacement and growth. oil prices are slowing growth of the Saudi mestic automobile industry. Al-Othman On top of that, it will need more economy. Geopolitical tensions in the re- said authorities were in discussions with aircraft to cope with demand gion may also weigh. auto companies, especially makers of Abdullatif al-Othman, governor of the Saudi Arabian General Investment Authority (SAGIA), speaks during an interview for pilgrimages to the country’s Infl ows of FDI peaked at about $40bn spare parts and fi rms in the area of buses with Reuters in Riyadh. SAGIA would seek to remove bureaucratic or regulatory obstacles to investment by talking to holy sites, he said. in 2009 but have been trending down and trucks, but did not identify the fi rms. foreign firms to identify their concerns, then discussing them with ministries and other government bodies, he said. Dubai landlord sees budget rethinks with ‘tough’ period ahead

Bloomberg rents softened as demand from Eu- rate stability shows that the UAE Dubai ropean and Russian buyers waned, market is adjusting to lower oil prices. Phidar Advisory said on January 11. However, bankruptcies at some com- The dollar-pegged dirham made prop- panies in the country could set off a ubai’s biggest landlord has a erties more expensive at a time the de- chain reaction that hurts many oth- message for the city’s develop- cline in the oil price puts pressure on ers, he said. Ders: Get ready to rethink your government spending. Dubai is part of Emirates NBD, Dubai’s largest bank, budgets and building plans repeatedly the UAE along with Abu Dhabi, which expects earnings to be fl at in 2016 and this year or be engulfed by a topsy- relies on oil for 51% of its gross domes- the bank will freeze hiring to reduce turvy market. tic product.” staff through attrition rather than Companies need to be “more agile “I’d be very cautious, whether run- job cuts, al-Qassim said. Growth will to sustain their businesses and survive ning an asset-management company probably return in mid-2017 as a de- the tough period ahead,” said Hesham or a development company,” al-Qas- cline in values spurs new demand and al-Qassim, chief executive offi cer of sim said. “I have to be very dynamic momentum builds ahead of Dubai the state’s Wasl Asset Management in terms of my budget planning. hosting of the World Expo 2020. and vice chairman of Dubai’s largest When there is a slowdown, I have to go Wasl, which completed the con- lender, Emirates NBD. “Those who are through my budget and try to adjust it struction of 1,244 aff ordable homes mindful of the reality around them will according to the market.” for leasing this year, is planning to manage, but those who stretch them- Wasl, which collects rent from build another 5,000 homes. The as- selves with billions worth of projects around 35,000 households and holds set manager is also building a 260- won’t.” offi ces, hotels and golf courses across room Mandarin Oriental hotel to open Dubai’s property market was buf- Dubai, is developing thousands of in 2017 as well as the world’s largest feted last year by falling oil prices, middle-income homes, a market that’s Hampton hotel with 400 rooms to be rising political tension in the region experiencing a severe shortage. Al- completed by 2020. and slowing economic growth from Qassim said he reviews the company’s Occupancy stood at 82% across China to Brazil: All trends that are set plans often, shelving some and delay- Wasl’s hotels in Dubai last year, though to continue in 2016. Real estate de- ing or altering others to better respond average room rates have declined by velopers, whose projects can take two to fast-changing demand and market around 30%, al-Qassim said. to four years to build, may see their sentiment. “The drop in the average price is markets change several times over We look “to develop what the com- good” because it opens Dubai to new that period. pany can aff ord to do in the worst-case demand at a time higher spending vis- Residential property prices in Du- scenario,” he said. itors from Russia stay away after the bai dropped around 15% last year and Al-Qassim says greater interest- decline in the rouble, he said.

Residential and commercial skyscrapers dot the city skyline as visitors walk through the downtown district in Dubai. Dubai’s property market was buffeted last year by falling oil prices, rising political tension in the region and slowing economic growth from China to Brazil: All trends that are set to continue in 2016. Gulf Times 4 Monday, January 25, 2016 BUSINESS Iran to buy 114 Airbus Global insurers plot cautious course

Reuters velopment manager at Dubai-based but Sydney/London majority Iranian-owned Iran Insurance jets to revamp ageing Company, said his fi rm had also been ap- proached about tie-ups by British and lobal insurance fi rms are circling Japanese brokers and insurers. Iran for business opportunities Foreign players have been awaiting the Gfollowing the lifting of sanctions lifting of sanctions for months; eight out - and the fi rst test of their appetite could of 11 established Western and Middle East come in March when some Iranian com- insurance and reinsurance fi rms who re- fl eet as sanctions end panies seek new cover. sponded to Reuters questions last year Insurers, the reinsurers that share their said Iran is an attractive market, especial- AFP risk and the brokers that forge deals are ly in the marine and energy sectors. Tehran exploring ways to tap a market worth However despite the lifting of sanc- $7.4bn in premiums after a nuclear accord tions, hurdles still remain which are mak- between world powers and Tehran led to ing companies cautious about a speedy ran said yesterday it will buy 114 the removal of restrictions on fi nancial entry. Airbus planes to revitalise its age- dealings with Iran this month. The US curbs still in place exclude Iing fl eet, in the fi rst major com- Allianz, Zurich Insurance, Hannover Re American nationals, banks and insurance mercial deal announced since the and RSA, for example, said in recent days industry players from trading with Iran lifting of sanctions under its nuclear that they would evaluate potential oppor- including dollar business, so concerns agreement. tunities in the country. remain on whether other foreign insurers Transport Minister Abbas Akhoun- Insurance and reinsurance specialists can transact without the risk of penalties. di said a deal on the purchase would regard the marine and energy sectors as London-headquartered United Insur- be signed between national carrier among those off ering the best opportu- ance Brokers (UIB) said it was active in Iran Air and Airbus during a visit to nities in oil-producing Iran. Alongside Iranian reinsurance before the imposition Paris this week by President Hassan commercial cover, life insurance is a po- of international sanctions and planned to Rouhani. tential growth area as it represents less reopen its Tehran offi ce “as soon as we can”, Rouhani will travel to Italy and than a tenth of overall Iranian premiums, according to chairman Bassem Kabban. France from Monday to Wednesday, compared with more than half globally. “Under the sanctions we ceased to op- on his fi rst visit to Europe since the At fi rst international companies are erate, but we have maintained the salaries implementation of the deal curb- likely to link up with Iranian fi rms to capi- of our people there for the past fi ve-and- ing Tehran’s nuclear activities in ex- talise on their local knowledge and to re- a-half years,” said Kabban, adding that change for the lifting of punishing insure local insurance in the international fi rms could be wary due to concerns about economic sanctions. market, according to industry experts, having US shareholders or subsidiaries. Rouhani has hailed the agreement with international brokers helping foreign “People will be very careful what to do. as a “new chapter” for Iran as its fi rms get that business. If they are not sure, they would rather not economy returns to global markets. American insurance industry players do it.” Modernising the country’s air fl eet are still banned from doing business in He said, though, that French and Japa- and infrastructure is a top priority, Iran, however, due to separate US sanc- nese players were likely to be quickest with Akhoundi saying yesterday that tions that remain in place. off the blocks in providing reinsurance only 150 of the country’s 250 planes The insurance contracts of some Ira- as they had large presences in Iran in the are operational. nian companies expire when the Iranian past, adding that sectors such as aviation, “We have been negotiating for 10 calendar year ends in late March - similar power generation and energy would re- months” for the purchase of planes to the January renewal season in Western quire large amounts of cover. but “there was no way to pay for them countries - and they will be looking to Reinsurers help insurers shoulder the because of banking sanctions,” Ira- Modernising Iran’s airlines fleet and infrastructure is a top priority, with only 150 of the country’s 250 planes are strike new agreements. This could include burden of large losses in return for a pro- nian state media quoted Akhoundi as operational. Iran’s airports also need $250mn worth of upgrades in navigation systems. Only nine of Iran’s 67 airports insurance fi rms themselves seeking new portion of the premiums. saying. are currently operational. reinsurance cover. Another London-based broker said his “We need 400 long- and mid- Mohammad Asoudeh, vice chairman fi rm had decided against opening an offi ce range and 100 short-range planes,” es in recent years blamed on age- “Aviation is one of those industries ties with Italy and France, which and managing director of Iranian Reinsur- in Tehran for now, preferring not to take he said. ing planes, poor maintenance and a that creates massive economic fl ow- were among Tehran’s main economic ance Co, told Reuters he had already been the risk of being a “frontrunner”. He said the fi rst batch of new shortage of new parts. on benefi ts, so tourism will expand, partners before the tightening of contacted by foreign insurance players While Iran has 27 direct insurance com- planes would arrive in Iran by March News of the Airbus deal came as so you’ll need more infrastructure international sanctions in January looking to forge tie-ups with his company panies and two reinsurance fi rms, most 19 but provided no fi nancial details of aviation industry representatives growth in hotels and right across the 2012. and enter the market. established in the last 10 years, they lack the deal with Airbus. from 85 companies met in Tehran board.” Competition to tap the Iranian “They have been waiting for Imple- international credit ratings because they An Airbus spokesman declined to yesterday to assess opportunities in Akhoundi said yesterday Iran was market has been fi erce as it emerges mentation Day,” said the 30-year industry have been shut out of markets. comment. the Islamic republic after sanctions also negotiating with US plane man- from international isolation. veteran, referring to the day this month This could also deter foreign fi rms and Iran, with a population 79mn, has a were removed. ufacturer Boeing, but provided no Meeting with Chinese President Xi when the UN atomic agency confi rmed their penalty-wary compliance depart- good road network but still needs ma- “It’s a really exciting time, there’s details. Jinping on Saturday, Rouhani said the Tehran had met its commitments under ments from doing business with them. jor transport upgrades, which Tehran never been a situation like this,” said He said Iran was in talks with the two countries aim to build up eco- the nuclear deal. “We have had enough Iranian Reinsurance Co is now working hopes will boost tourism and trade. Peter Harbison, the head of the CAPA US on the possibility of reopening nomic ties worth up to $600bn in the visits (from foreign fi rms)... resuming to obtain a rating and has held discussions Iran’s airports also need $250mn consultancy which organised the direct air routes, which were cut af- next 10 years. business could be quick but will depend with two rating agencies for this purpose, (€230mn) worth of upgrades in navi- conference. ter the 1979 hostage crisis that ended They signed a slew of trade agree- on the terms and conditions they off er us.” said Asoudeh, declining to name them. gation systems, Akhoundi said. “A whole array of diff erent avia- all diplomatic ties between the two ments, including a $2bn contract “There are some market renewal dates “Because of sanctions they couldn’t Only nine of Iran’s 67 airports are tion services and new jobs obviously countries. for China to electrify the railway in two months’ time. This will be a good price it, so this is fi rst in our agenda. Sev- currently operational. are going to be created,” Harbison told Rouhani’s European tour will see line linking Tehran with second city point to start.” eral insurance companies in Iran are also Iran has suff ered several air crash- AFP. him seeking to restore commercial Mashhad. Sasan Soltani, regional business de- waiting to be rated.”

Iran to extend oil export deal with Japan Tehran will extend an oil export agreement with Japan until April 2016, Iran’s Iran emerged from years of economic isolation when the US and other oil ministry news agency Shana reported citing sources. countries lifted crippling sanctions against the Islamic Republic this Japan will also boost its oil purchases from Iran from the current 110,000 month. bpd under a new deal, Shaha reported on Saturday citing sources close to Iran has asked Japanese buyers to increase term crude volumes to levels the Iran’s oil ministry. It did not give any more details. before stricter sanctions were imposed in 2012, industry sources said, but Japan is one of Iran’s biggest oil buyers but its crude imports have nearly some buyers have been reluctant to do this and were looking at buying halved from 2011 levels before sanctions. Iranian barrels on the spot market instead.

Regulator plans mortgage-backed securities market

Reuters Dubai

ran’s capital market regulator wants to develop a mar- ket for mortgage-backed securities (MBS) and has pub- Ilished rules covering them, the latest move by authori- ties to revamp the fi nancial sector. The lifting of sanctions on Iran promises to draw billions of dollars of fresh capital into the country. But the domestic debt market is underdeveloped and has struggled to off er a wide range of funding options for local fi rms. MBS, which are bonds backed by home loans packaged together and sold to investors, could help to stimulate the debt market and spur housing construction in the country of about 80mn people. Iran has seen some issues of MBS but on a small scale, and active trade in them has not developed. “The MBS concept is a newcomer to the market - this is designed to diversify lending sources and bring fresh money for banks,” said Majid Pireh, senior Islamic fi nance expert in the Research, Development and Islamic Studies Depart- ment of Iran’s Securities and Exchange Organisation (SEO). “We have to fi nd alternatives due to limitations in the mar- ket,” he said in a telephone interview. The new MBS rules, recently released by the SEO, include strong consumer protection features - a reasonable precau- tion considering the role MBS played in 2007 when some turned sour in the US and triggered a worldwide fi nancial crash. They also feature some particularly Iranian aspects that make them diff erent from similar securities elsewhere. Iran’s entire fi nancial system is nominally Islamic, mean- ing interest payments are banned, but bank deposits and bonds carry “profi t rates” that function much like interest rates. The central bank uses tools such as reserve require- ment ratios and open market operations to conduct mon- etary policy. The SEO has introduced several debt products including various types of Islamic bonds over the past six years. But these have had mixed success, so it has continued to explore other funding tools for companies to use. Gulf Times Monday, January 25, 2016 5 BUSINESS

Commuters cross a bridge on a square in Tehran. Some foreign companies have moved quickly to gain or regain access to a country that is rich in natural resources and has a young, well educated population of about 80mn. After sanctions, Iran and foreign firms waiting for the good times

Lifting of sanctions ends years of isolation; some position now since we have a kind of preferential foreign firms rush in, others still wary; foreign channel. Our staff is regularly in Tehran and we’re firms in Iran endure losses but keep foothold; looking forward to relaunching production,” Marziali Iranians see opportunities in Gulf states said. Another Italian company that stuck it out was SABAF, Reuters which makes components for household cooking Doha appliances, administrative director Gianluca Beschi said. “We’ve already started talks in the country and we hope to be able to boost our sales in 2016 to get back to pre- A decade ago, Foad Fanaei packed his belongings sanction times,” she said. and left sanction-hit Iran in the hope that the family’s Italy hopes its trade with Iran will now surge and sees engineering firm would thrive in Qatar. the best opportunities in oil and gas, cars and transport, Starting up in the Gulf state proved to be hard for a and construction and furniture. But China, India, Russia 27-year-old outsider who had to grapple with Qatar’s and Brazil have kept or gained a foothold in Iran since business laws and navigate the international financial sanctions were imposed, and Beijing is the top exporter constraints imposed over Iran’s nuclear programme. to Tehran. Since then Fanaei has endured years of financial losses For some companies, the race has already begun. but kept the business going in the hope that one day Senior Iranian off icials said yesterday that Iran plans to the nuclear-related sanctions would be lifted. Cherishing buy more than 114 aircraft from European plane maker the same hope, his father continued to run a parent Airbus as soon as March, and is looking for other deals. company in Iran. The trucks division of German automobile maker Now that day has come, Fanaei believes his hard work is Daimler quickly signed letters of intent with joint venture about to be rewarded. partners in Iran and India’s state-run National Aluminium “I came here with experience and new technology. I met Co Ltd (NALCO) said it was sending experts to Iran to with many companies but it was tough. We missed out on explore the possibility of setting up a $2bn smelter a lot of deals,” he explained. “Now, though, politics is in the complex. past. It took a long time, but we are moving forward.” Russia’s second-largest state-controlled bank, VTB, said Fanaei is blazing a trail that other Iranian businesses are it hoped to carry out its first banking operations with likely to follow. Iran within months. And a British investor, Dominic His company, Reign Engineering & Trading Co, has Bokor-Ingram, launched a joint venture fund with an forged a partnership with Abu Dhabi-based construction Iranian investment fund on January 19 - two decades firm AlJaber Group which is set to enter an agreement Iranian businessmen Foad Fanaei, owner of Reign after he took a suitcase of cash onto the floor of the with industrial group Siemens to start manufacturing Engineering & Trading Co, gestures at an interview Moscow stock exchange to buy up shares after the end high-specification electricity-saving devices. with Reuters in Doha on January 20. “Qatar is an of communist rule. If the deal goes ahead, Fanaei, one of a handful of ideal market for us. There is rapid growth ahead of But many other banks and firms, ranging from Iranian businessmen in Qatar, will be involved in the the World Cup (to be hosted by Qatar in 2022). Local international oil companies to small investors, are development of the largest electronics factory in the partners here appreciate Iran’s expertise in industry treading carefully because of legal uncertainties and country and, together with the AlJaber Group, will and technology,” Fanaei said. making sure they will not face heavy fines by violating bid on tenders for multimillion dollar government the residual US sanctions. infrastructure projects. Some companies have moved quickly to gain or regain Small firms face similar concerns to bigger companies The venture will not be directly aff ected by the easing access to a country that is rich in natural resources and as they weigh up the risks and opportunities. Like their of sanctions - it relies on local manufacturers - but the has a young, well educated population of about 80mn. bigger counterparts, some had been preparing for years prospect of being able to transfer money in and out of European and Asian firms have a head start as some for the opening of Iran. Iran, travel more freely and sign contracts with Western US sanctions remain, tying the hands of American “I have friends in Iran who have been waiting for the companies - all curtailed under sanctions - Fanaei says, companies. sanctions to end so they can come and invest here,” will allow him and other Iranians to thrive in the region. But many international banks, businesses and investors Fanaei said in his off ice in Qatar. “We invested heavily in Qatar and honestly we lost a lot are not rushing in because of the risk of falling foul of the Iranian businessmen have for decades been travelling to of money, but we still had hope,” he said. residual US sanctions and legal uncertainties. Gulf states that provide access to Gulf waters and free- Arab firms too stand to benefit from Iran’s opening. Some are also concerned that a diplomatic incident trade zones in cities such as Dubai, re-exporting goods The likely surge in business between Iran and other could flare between Iran and the US, undermining the and circumventing sanctions. Their number should now countries in the Gulf will be just one part of the boom in nuclear deal, and that the US presidential election this grow. business expected following the lifting of the nuclear- year might bring to power an opponent of the deal. “Qatar is an ideal market for us. There is rapid growth related sanctions on January 18. For some foreign companies, it has been a waiting game. ahead of the World Cup (to be hosted by Qatar in The deal with world powers that ended Iran’s They stayed in Iran when the sanctions hit and, like 2022). Local partners here appreciate Iran’s expertise in international isolation, in exchange for restrictions on Fanaei in Qatar, put up with the bad times in the hope industry and technology,” Fanaei said. Tehran’s nuclear programme, restored its access to that the good times would eventually return. Fanaei’s new business partner, Mohammed Sultan tens of billions of dollars in frozen assets, reopened the Landi Renzo, an Italian producer of autogas and al-Jaber, who is chairman of the AlJaber Group, said country to foreign investment and allows it to sell oil compressed natural gas kits for cars, saw annual “political issues” such as a rift between Iran and again on world markets. revenues in Iran sink from about €35mn to about €3mn Saudi Arabia would not impede Arab-Iran business President Hassan Rouhani, who championed the when sanctions hit, said Pierpaolo Marziali, the firm’s partnerships. deal, says Iran needs $30bn-$50bn a year in foreign head of mergers and acquisitions. “Iran has so many things that Qatar needs. Qatar used to investment to meet its economic growth target of 8%. There were no Western banks ready to off er guarantees import a lot of materials from Iran like cement, ceramics He has ordered a sharp increase in oil output and, in a and letters of credit, and the sharp decline of Iran’s and soil. It was halted,” said al-Jaber. sign of the size of the business opportunities that are up currency under sanctions made matters worse. Looking ahead to more cooperation in the post- for grabs, Iran has said it wants to buy more than 100 “But we stayed the course and never stopped producing, sanctions era, he said: “I see no reason why it won’t Western planes. albeit at minimal levels, and that’s put us in a strong resume.” Gulf Times 6 Monday, January 25, 2016 BUSINESS

SAUDI ARABIA KUWAIT OMAN

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

Saudi Re For Cooperative Rei 5.60 2.38 742,251 Boubyan Intl Industries Hold 24.00 -5.88 2,564,802 Areej Vegetable Oils 5.51 0.00 - Solidarity Saudi Takaful Co 6.49 2.37 1,134,674 Gulf Investment House Ksc 19.00 5.56 2,845,984 Aloula Co 0.53 0.00 - Amana Cooperative Insurance 5.60 3.32 610,817 Boubyan Bank K.S.C 390.00 4.00 567,250 Al-Omaniya Financial Service 0.31 0.00 - Alabdullatif Industrial Inv 19.25 -4.70 952,114 Ahli United Bank B.S.C 188.00 2.17 901,015 Al-Hassan Engineering Co 0.06 -1.54 65,600 Saudi Printing & Packaging C 16.64 0.85 2,186,030 Osos Holding Group Co 80.00 0.00 144,479 Al-Fajar Al-Alamia Co 0.75 0.00 - Sanad Cooperative Insurance 15.23 0.00 - Al-Eid Food Ksc 0.00 0.00 - Al-Anwar Ceramic Tiles Co 0.28 0.00 668 Saudi Paper Manufacturing Co 10.91 1.96 1,576,298 Qurain Petrochemical Industr 154.00 0.00 110,884 Al Suwadi Power 0.19 1.08 355,055 Alinma Bank 12.40 6.29 77,885,259 Advanced Technology Co 0.00 0.00 - Al Shurooq Inv Ser 1.04 0.00 - Almarai Co 55.43 1.21 343,030 Ekttitab Holding Co Sak 25.50 0.00 368,029 Al Sharqiya Invest Holding 0.09 3.66 173,566 Falcom Saudi Equity Etf 21.20 7.07 176,696 Kout Food Group Ksc 560.00 -8.20 5 Al Maha Petroleum Products M 1.72 0.00 - QATAR United International Transpo 35.16 -2.59 497,976 Real Estate Trade Centers Co 18.00 2.86 61,500 Al Maha Ceramics Co Saoc 0.34 0.59 53,336 Hsbc Amanah Saudi 20 Etf 24.50 0.00 - Acico Industries Co Kscc 280.00 0.00 1,000 Al Madina Takaful Co Saoc 0.07 0.00 68,297 Company Name Lt Price % Chg Volume Saudi International Petroche 10.24 1.37 1,685,197 Kipco Asset Management Co 102.00 0.00 510 Al Madina Investment Co 0.05 0.00 84,000 Falcom Petrochemical Etf 16.00 0.00 900 National Petroleum Services 600.00 -4.76 98 Al Kamil Power Co 0.31 0.00 - Zad Holding Co 66.20 7.85 150 Saudi United Cooperative Ins 8.13 4.23 378,082 Alimtiaz Investment Co Kscc 72.00 5.88 278,300 Al Jazerah Services -Pfd 0.55 0.00 - Widam Food Co 43.90 -1.37 6,692 Bank Al-Jazira 11.78 2.63 7,929,492 Ras Al Khaimah White Cement 95.00 -5.00 15,610 Al Jazeera Steel Products Co 0.15 5.07 77,000 Vodafone Qatar 10.17 5.21 1,245,210 Al Rajhi Bank 45.36 6.50 5,468,380 Kuwait Reinsurance Co Ksc 0.00 0.00 - Al Jazeera Services 0.23 -0.43 12,000 United Development Co 18.00 3.33 399,268 Samba Financial Group 18.60 2.42 1,505,141 Kuwait & Gulf Link Transport 37.50 1.35 288,500 Al Izz Islamic Bank 0.06 3.77 199,457 Salam International Investme 9.96 2.21 638,935 United Electronics Co 26.30 -3.49 2,454,642 Human Soft Holding Co Ksc 770.00 -3.75 27 Al Buraimi Hotel 0.88 0.00 - Islamic Holding Group-Rts 0.00 0.00 - Allied Cooperative Insurance 11.29 3.77 541,416 Automated Systems Co Kscc 310.00 0.00 790 Al Batinah Power 0.19 1.08 355,098 Qatar & Oman Investment Co 10.64 4.32 67,719 Malath Cooperative & Reinsur 13.07 -4.60 5,025,712 Metal & Recycling Co 57.00 5.56 10 Al Batinah Hotels 1.13 0.00 - Qatar Navigation 88.70 2.59 6,720 Alinma Tokio Marine 14.79 4.08 1,132,715 Gulf Franchising Holding Co 25.50 10.87 15,999 Al Batinah Dev & Inv 0.07 4.29 10,000 Qatar National Cement Co 89.50 2.79 74,751 Arabian Shield Cooperative 20.62 3.05 427,090 Al-Enma’a Real Estate Co 57.00 -1.72 217,500 Al Anwar Holdings Saog 0.15 6.52 4,448,092 Qatar National Bank 147.00 2.59 45,692 Savola 29.88 6.93 1,400,100 National Mobile Telecommuni 1,040.00 0.00 1,405 Ahli Bank 0.19 2.17 50,000 Qatar Islamic Insurance 61.50 7.97 6,193 Wafrah For Industry And Deve 18.95 0.74 446,923 Al Bareeq Holding Co Kscc 104.00 0.00 500 Acwa Power Barka Saog 0.66 0.00 - Qatar Industrial Manufactur 37.10 0.27 1,417 Fitaihi Holding Group 10.31 3.83 337,384 Housing Finance Co Sak 24.00 6.67 1,424,962 Abrasives Manufacturing Co S 0.05 0.00 - Qatar International Islamic 59.00 5.08 34,717 Tourism Enterprise Co/ Shams 33.80 6.22 1,769,790 Al Salam Group Holding Co 27.00 3.85 1,932,594 A’saff a Foods Saog 0.86 0.00 - Qatari Investors Group 24.55 9.98 281,899 Sahara Petrochemical Co 8.07 -1.71 10,190,682 United Foodstuff Industries 132.00 0.00 11 0Man Oil Marketing Co-Pref 0.25 0.00 - Qatar Islamic Bank 81.60 3.55 126,176 Herfy Food Services Co 73.00 -1.49 1,091,749 Al Aman Investment Company 50.00 0.00 150,540 #N/A Invalid Security 0.00 0.00 - Qatar Gas Transport(Nakilat) 19.50 5.33 429,992 Mashaer Holdings Co Ksc 98.00 -7.55 356,050 #N/A Invalid Security 0.00 0.00 - Qatar General Insurance & Re 43.00 9.30 4,867 Manazel Holding 18.00 -2.70 11,053,903 #N/A Invalid Security 0.00 0.00 - Qatar German Co For Medical 10.00 1.70 326,514 Mushrif Trading & Contractin 51.00 5.15 827,511 #N/A Invalid Security 0.00 0.00 - Qatar Fuel Qsc 120.00 6.67 87,827 KUWAIT Tijara And Real Estate Inves 39.50 1.28 20 #N/A Invalid Security 0.00 0.00 - Qatar Electricity & Water Co 181.80 1.27 17,176 Kuwait Building Materials 0.00 0.00 - #N/A Invalid Security 0.00 0.00 - Qatar Cinema & Film Distrib 28.50 10.00 328 Company Name Lt Price % Chg Volume Jazeera Airways Co Ksc 790.00 5.33 1,872 #N/A Invalid Security 0.00 0.00 - Qatar Insurance Co 73.40 4.63 11,162 Commercial Real Estate Co 74.00 2.78 370,080 Ooredoo Qsc 74.50 2.15 168,071 Securities Group Co 97.00 2.11 1,980,500 Future Communications Co 100.00 0.00 3,701 National Leasing 11.46 0.87 228,358 Sultan Center Food Products 50.00 2.04 15,000 National International Co 37.50 2.74 217,100 Mazaya Qatar Real Estate Dev 11.29 6.29 1,422,881 Kuwait Foundry Co Sak 212.00 1.92 8,750 Taameer Real Estate Invest C 18.50 2.78 95,000 UAE Mesaieed Petrochemical Holdi 15.35 3.39 219,909 Kuwait Financial Centre Sak 89.00 0.00 30,000 Gulf Cement Co 68.00 -4.23 130 Al Meera Consumer Goods Co 173.00 6.30 15,213 Ajial Real Estate Entmt 136.00 0.00 25,500 Heavy Engineering And Ship B 132.00 -4.35 1,179 Company Name Lt Price % Chg Volume Medicare Group 77.60 3.09 59,682 Gulf Glass Manuf Co -Kscc 0.00 0.00 - Refrigeration Industries & S 305.00 1.67 40,000 Mannai Corporation Qsc 85.90 -3.03 3,988 Kuwait Finance & Investment 34.00 0.00 623,000 National Real Estate Co 79.00 5.33 907,303 Waha Capital Pjsc 1.82 1.11 2,210,944 Masraf Al Rayan 31.15 5.78 785,688 National Industries Co Ksc 230.00 0.00 13,133 Al Safat Energy Holding Comp 9.00 5.88 11,882,843 United Insurance Company 2.00 0.00 - Al Khalij Commercial Bank 17.20 1.16 259,203 Kuwait Real Estate Holding C 19.00 0.00 2,500 Kuwait National Cinema Co 940.00 0.00 40,480 United Arab Bank Pjsc 4.84 0.00 - Industries Qatar 88.60 6.66 210,649 Securities House/The 27.50 1.85 5,275,525 Danah Alsafat Foodstuff Co 69.00 -5.48 430,000 Union National Bank/Abu Dhab 3.61 -1.66 4,070,457 Islamic Holding Group 55.90 6.44 29,872 Boubyan Petrochemicals Co 440.00 0.00 101,140 Independent Petroleum Group 315.00 0.00 3,125 Union Insurance Co 1.21 0.00 - Gulf Warehousing Company 44.00 4.55 3,374 Al Ahli Bank Of Kuwait 350.00 2.94 60,000 Kuwait Real Estate Co Ksc 43.00 2.38 1,742,633 Union Cement Co 1.19 0.00 - Gulf International Services 38.35 9.91 772,286 Ahli United Bank (Almutahed) 420.00 0.00 288,783 Salhia Real Estate Co Ksc 320.00 3.23 30,500 Umm Al Qaiwain Cement Indust 0.90 0.00 - Ezdan Holding Group 12.14 5.44 782,627 National Bank Of Kuwait 670.00 3.08 3,495,982 Gulf Cable & Electrical Ind 325.00 3.17 35,010 Sharjah Islamic Bank 1.20 0.00 - Doha Insurance Co 20.00 0.00 - Commercial Bank Of Kuwait 510.00 2.00 24,000 Al Nawadi Holding Co Ksc 84.00 0.00 61,000 Sharjah Insurance Company 3.85 0.00 - Doha Bank Qsc 35.60 4.21 630,518 Kuwait International Bank 198.00 4.21 553,271 Kuwait Finance House 455.00 3.41 3,583,042 Sharjah Group 1.50 0.00 - Dlala Holding 13.00 0.00 133,589 Gulf Bank 208.00 0.00 898,749 Gulf North Africa Holding Co 21.50 4.88 2,624,200 Sharjah Cement & Indus Devel 0.98 3.16 14,222 Commercial Bank Qsc 38.70 3.49 87,625 Al-Massaleh Real Estate Co 61.00 0.00 13 Hilal Cement Co 0.00 0.00 - Ras Al-Khaimah National Insu 4.10 0.00 - Barwa Real Estate Co 30.15 9.12 495,680 Al Arabiya Real Estate Co 24.00 2.13 2,918,090 Osoul Investment Kscc 32.50 -13.33 204,562 Ras Al Khaimah White Cement 1.41 0.00 - Al Khaleej Takaful Group 27.95 0.18 12,743 Kuwait Remal Real Estate Co 29.00 -4.92 64,000 Gulf Insurance Group Ksc 0.00 0.00 - Ras Al Khaimah Ceramics 2.95 -1.67 82,400 Alkout Industrial Projects C 0.00 0.00 - Kuwait Food Co (Americana) 1,840.00 0.00 50,000 Ras Al Khaimah Cement Co Psc 0.86 11.69 204,762 A’ayan Real Estate Co Sak 69.00 6.15 3,750 Umm Al Qaiwain Cement Indust 70.00 0.00 14,000 Ras Al Khaima Poultry 2.24 -9.68 42,904 Investors Holding Group Co.K 19.00 2.70 6,060,435 Aayan Leasing & Investment 40.50 4.94 259,222 Rak Properties 0.44 4.55 3,964,367 Al-Mazaya Holding Co 98.00 4.26 4,104,200 Ooredoo Qsc 80.00 8.11 56 SAUDI ARABIA Al-Madar Finance & Invt Co 0.00 0.00 - Oman & Emirates Inv(Emir)50% 1.38 0.00 - Gulf Petroleum Investment 38.00 4.11 1,691,030 Nbad Oneshare Msci Uae Etf 6.26 0.00 - National Takaful Company 0.00 Company Name Lt Price % Chg Volume Mabanee Co Sakc 850.00 4.94 100,297 OMAN 1.08 - City Group 380.00 0.00 10 National Marine Dredging Co 5.11 0.00 - National Investor Co/The 0.63 0.00 - United Wire Factories Compan 15.56 3.87 221,661 Inovest Co Bsc 50.00 0.00 150,300 Company Name Lt Price % Chg Volume Etihad Etisalat Co 21.01 9.95 3,849,544 Kuwait Gypsum Manufacturing 0.00 0.00 - National Corp Tourism & Hote 3.50 0.00 - Dar Al Arkan Real Estate Dev 5.04 -1.79 38,968,416 Al-Deera Holding Co 23.00 6.98 124,989 Voltamp Energy Saog 0.42 0.00 - National Bank Of Umm Al Qaiw 2.97 0.00 - Saudi Hollandi Bank 25.06 2.16 192,176 Alshamel International Hold 0.00 0.00 - United Power/Energy Co- Pref 1.00 0.00 - National Bank Of Ras Al-Khai 5.21 2.16 279,829 Rabigh Refining And Petroche 7.52 9.71 3,632,486 Mena Real Estate Co 17.00 0.00 245,301 United Power Co Saog 2.60 1.76 1,049 National Bank Of Fujairah 5.31 0.00 - Banque Saudi Fransi 23.55 -1.02 303,250 National Slaughter House 62.00 0.00 5,466 United Finance Co 0.11 0.95 233,155 National Bank Of Abu Dhabi 6.90 3.91 807,940 Saudi Enaya Cooperative Insu 10.44 1.85 519,215 Amar Finance & Leasing Co 65.00 0.00 2,000 Ubar Hotels & Resorts 0.13 0.00 - Methaq Takaful Insurance 0.47 4.44 1,919,095 Mediterranean & Gulf Insuran 15.47 -9.80 15,307,913 United Projects Group Kscc 600.00 0.00 11,060 Takaful Oman 0.10 0.00 250 Manazel Real Estate Pjsc 0.45 2.27 72,657,501 Saudi British Bank 20.02 1.20 414,317 National Consumer Holding Co 0.00 0.00 - Taageer Finance 0.13 0.00 - Invest Bank 1.60 5.26 156,270 Mohammad Al Mojil Group Co 12.55 0.00 - Amwal International Investme 23.00 9.52 116,714 Sweets Of Oman 1.34 0.00 - Intl Fish Farming Co Pjsc 5.50 0.00 - Red Sea Housing Services Co 17.41 5.32 554,244 Jeeran Holdings 62.00 1.64 200 Sohar Power Co 0.35 0.00 20 Insurance House 0.81 0.00 - Takween Advanced Industries 17.78 1.31 2,697,145 Equipment Holding Co K.S.C.C 52.00 7.22 158,335 Sohar Poultry 0.21 0.00 - Gulf Pharmaceutical Industri 2.48 -0.40 11,000 Sabb Takaful 18.82 1.35 1,018,341 Nafais Holding 130.00 0.00 99,032 Smn Power Holding Saog 0.74 0.00 - Gulf Medical Projects 2.40 0.00 - Saudi Arabian Fertilizer Co 63.54 2.12 166,426 Safwan Trading & Contracting 300.00 0.00 47,760 Shell Oman Marketing - Pref 1.05 0.00 - Gulf Cement Co 0.89 9.88 7,439 National Gypsum 11.20 2.47 337,074 Arkan Al Kuwait Real Estate 110.00 0.00 20,005 Shell Oman Marketing 1.97 -0.51 48,950 Fujairah Cement Industries 1.25 0.00 - Saudi Ceramic Co 35.29 4.08 940,030 Gfh Financial Group Bsc 40.50 5.19 6,361,705 Sharqiyah Desalination Co Sa 4.65 0.00 - Fujairah Building Industries 1.71 0.00 - National Gas & Industrializa 19.35 1.79 172,767 Energy House Holding Co Kscp 34.50 -6.76 4,048 Sembcorp Salalah Power & Wat 2.35 -0.42 10,556 Foodco Holding Pjsc 4.00 0.00 - Saudi Pharmaceutical Industr 24.17 0.46 548,679 Kuwait Slaughter House Co 0.00 0.00 - Salalah Port Services 0.65 0.00 - First Gulf Bank 10.05 4.48 1,568,811 Thimar 24.85 9.96 1,453,981 Kuwait Co For Process Plant 200.00 -4.76 9,355 Salalah Mills Co 1.49 0.00 - Finance House 1.98 0.00 - National Industrialization C 8.13 -0.37 3,724,445 Al Maidan Dental Clinic Co K 0.00 0.00 - Salalah Beach Resort Saog 1.38 0.00 - Eshraq Properties Co Pjsc 0.44 4.76 17,525,691 Saudi Transport And Investme 53.63 2.76 694,999 National Ranges Company 17.00 0.00 5,700,384 Sahara Hospitality 2.50 0.00 - Emirates Telecom Group Co 15.60 0.32 1,898,734 Saudi Electricity Co 13.67 -1.58 1,800,051 Al-Themar Real International 75.00 -6.25 4,387,123 Renaissance Services Saog 0.12 4.50 138,287 Emirates Insurance Co. (Psc) 6.72 0.00 - Saudi Arabia Refineries Co 26.89 1.78 314,032 Al-Ahleia Insurance Co Sakp 435.00 4.82 12,104 Raysut Cement Co 0.95 0.00 - Emirates Driving Company 5.20 14.29 60,000 Arriyadh Development Company 16.66 -0.89 3,029,976 Wethaq Takaful Insurance Co 34.00 0.00 1,940 Port Service Corporation 0.12 0.00 36,240 Dana Gas 0.40 5.00 33,886,102 Al-Baha Development & Invest 13.50 0.00 - Salbookh Trading Co Kscp 67.00 -1.47 129,000 Phoenix Power Co Saoc 0.13 1.55 1,001,521 Commercial Bank Internationa 2.10 0.00 - Saudi Research And Marketing 40.36 -0.17 1,677,473 Aqar Real Estate Investments 80.00 0.00 11,017,087 Packaging Co Ltd 0.48 0.00 - Bank Of Sharjah 1.55 3.33 5,970,635 Aldrees Petroleum And Transp 32.50 5.28 684,481 Hayat Communications 43.50 6.10 110,900 Ooredoo 0.62 1.31 364,510 Axa Green Crescent Insurance 0.75 0.00 - Saudi Vitrified Clay Pipe Co 72.13 2.76 47,322 Kuwait Packing Materials Mfg 350.00 0.00 15,000 Ominvest 0.45 0.00 - Arkan Building Materials Co 0.91 0.00 20,000 Jarir Marketing Co 113.86 -0.34 215,337 Soor Fuel Marketing Co Ksc 100.00 -5.66 66,014 Oman United Insurance Co 0.17 3.11 468,938 Alkhaleej Investment 2.45 0.00 - Arab National Bank 19.83 -0.86 313,583 Alargan International Real 160.00 -3.61 243,650 Oman Textile Holding Co Saog 0.35 0.00 700 Aldar Properties Pjsc 1.95 7.69 19,070,608 Yanbu National Petrochemical 27.49 5.13 716,718 Burgan Co For Well Drilling 114.00 5.56 502 Oman Telecommunications Co 1.41 1.08 426,505 Al Wathba National Insurance 4.50 0.00 - Arabian Cement 39.50 4.80 1,060,650 Kuwait Resorts Co Kscc 89.00 3.49 74,789 Oman Refreshment Co 2.22 0.00 128 Al Khazna Insurance Co 0.29 0.00 - Middle East Specialized Cabl 6.45 0.00 - Oula Fuel Marketing Co 106.00 3.92 278,697 Oman Packaging 0.29 0.00 - Al Fujairah National Insuran 300.00 0.00 - Al Khaleej Training And Educ 19.21 3.96 673,766 Palms Agro Production Co 106.00 0.00 1,235 Oman Orix Leasing Co. 0.14 0.00 - Al Dhafra Insurance Co. P.S. 4.80 0.00 - Al Sagr Co-Operative Insuran 25.19 4.87 1,322,773 Ikarus Petroleum Industries 70.00 2.94 30,400 Oman Oil Marketing Company 2.00 0.00 - Al Buhaira National Insuranc 2.85 0.00 - Trade Union Cooperative Insu 11.53 -1.03 1,015,347 Mubarrad Transport Co 60.00 3.45 622,098 Oman National Engineering An 0.23 0.00 - Al Ain Ahlia Ins. Co. 60.00 0.00 - Arabia Insurance Cooperative 5.75 5.70 650,470 Al Mowasat Health Care Co 180.00 0.00 38,000 Oman Investment & Finance 0.17 5.63 1,215,523 Agthia Group Pjsc 7.34 5.01 23,795 Saudi Chemical Company 48.07 5.26 293,402 Shuaiba Industrial Co 380.00 0.00 3,000 Oman Intl Marketing 0.52 0.00 - Abu Dhabi Ship Building Co 2.90 10.27 6,466 Fawaz Abdulaziz Alhokair & C 43.74 -2.03 711,454 Hits Telecom Holding 26.00 8.33 496,561 Oman Hotels & Tourism Co 0.24 0.00 - Abu Dhabi Natl Co For Buildi 0.37 0.00 5,368 Bupa Arabia For Cooperative 111.84 4.13 306,560 First Takaful Insurance Co 0.00 0.00 - Oman Foods International 0.00 0.00 - Abu Dhabi National Takaful C 4.26 0.00 - Wafa Insurance 7.35 -9.82 4,888,845 Kuwaiti Syrian Holding Co 20.00 0.00 583,000 Oman Flour Mills 0.41 0.00 - Abu Dhabi National Insurance 2.90 0.00 - Jabal Omar Development Co 48.49 1.59 981,166 National Cleaning Company 37.00 1.37 200,000 Oman Fisheries Co 0.05 0.00 - Abu Dhabi National Hotels 2.50 0.00 - Saudi Basic Industries Corp 61.76 3.50 11,524,753 Eyas For High & Technical Ed 335.00 0.00 430,565 Oman Fiber Optics 5.26 0.00 - Abu Dhabi National Energy Co 0.42 0.00 783,491 Saudi Kayan Petrochemical Co 4.64 6.47 39,098,890 United Real Estate Company 92.00 3.37 45,404 Oman Europe Foods Industries 1.00 0.00 - Abu Dhabi Islamic Bank 3.15 5.00 654,188 Etihad Atheeb Telecommunicat 3.91 0.51 3,120,114 Agility 415.00 3.75 1,194,425 Oman Education & Training In 0.16 0.00 - Co For Cooperative Insurance 66.49 2.97 185,527 Kuwait & Middle East Fin Inv 25.50 6.25 7,500 Oman Chromite 3.64 0.00 - National Petrochemical Co 14.26 0.56 1,170,032 Fujairah Cement Industries 71.00 0.00 1,000 Oman Chlorine 0.51 0.00 - BAHRAIN Gulf Union Cooperative Insur 8.00 3.09 353,194 Livestock Transport & Tradng 118.00 0.00 40,000 Oman Ceramic Com 0.45 0.00 - Gulf General Cooperative Ins 11.60 5.55 480,992 International Resorts Co 24.00 4.35 238,250 Oman Cement Co 0.46 0.00 - Basic Chemical Industries 16.89 1.26 321,656 National Industries Grp Hold 110.00 3.77 1,760,735 Oman Cables Industry 1.60 0.00 - Company Name Lt Price % Chg Volume Saudi Steel Pipe Co 3.23 Marine Services Co Ksc 0.00 15.97 138,885 114.00 20,000 Oman Agricultural Dev 1.75 0.00 - Zain Bahrain Bscc 0.18 -0.56 30,000 Buruj Cooperative Insurance 6.68 Warba Insurance Co 2.04 15.33 799,435 100.00 1,212 Oman & Emirates Inv(Om)50% 0.08 0.00 28,957 United Paper Industries Bsc 0.00 0.00 - Mouwasat Medical Services Co 3.50 Kuwait United Poultry Co 0.00 102.42 87,656 196.00 23 Natl Aluminium Products 0.21 0.00 111,000 United Gulf Investment Corp 0.10 0.00 - Southern Province Cement Co 3.11 First Dubai Real Estate Deve 1.39 63.95 45,197 36.50 1,977,530 National Securities 0.17 0.00 - United Gulf Bank 0.00 0.00 - Maadaniyah 2.24 Al Arabi Group Holding Co -5.26 19.66 354,755 72.00 35,000 National Real Estate Develop 5.00 0.00 - Trafco Group Bsc 0.24 0.00 374,361 Yamama Cement Co 2.34 Kuwait Hotels Sak 0.00 25.19 254,563 220.00 49,000 National Pharmaceutical 0.11 0.00 - Takaful International Co 0.10 0.00 - Jazan Development Co 0.17 Mobile Telecommunications Co 1.54 11.87 5,017,847 330.00 2,290,873 National Mineral Water 0.06 0.00 - Taib Bank -$Us 0.00 0.00 - Zamil Industrial Investment -0.11 Al Safat Real Estate Co 0.00 28.40 818,712 0.00 - National Hospitality Institu 2.05 0.00 - Seef Properties 0.20 -1.01 19,869 Alujain Corporation (Alco) 1.48 Tamdeen Real Estate Co Ksc 0.00 10.95 1,752,160 620.00 1,000 National Gas Co 0.29 0.00 - Securities & Investment Co 0.00 0.00 - Tabuk Agricultural Developme 2.99 Al Mudon Intl Real Estate Co 5.66 8.62 513,175 28.00 1,323,250 National Finance Co 0.13 0.00 - National Hotels Co 0.00 0.00 - United Co-Operative Assuranc -5.60 Kuwait Cement Co Ksc 2.86 7.93 1,431,138 360.00 10,000 National Detergent Co Saog 0.64 0.00 - National Bank Of Bahrain Bsc 0.66 -0.75 4,000 Qassim Cement/The 3.14 Sharjah Cement & Indus Devel 2.53 59.17 103,339 81.00 201,000 National Biscuit Industries 3.75 0.00 - Nass Corp Bsc 0.12 0.00 534,500 Saudi Advanced Industries -0.34 Kuwait Portland Cement Co 0.00 8.69 519,692 980.00 25,040 National Bank Of Oman Saog 0.22 0.92 761,240 Khaleeji Commercial Bank 0.06 0.00 155,718 Kingdom Holding Co 1.26 Educational Holding Group -10.10 11.25 880,118 178.00 171 Muscat Thread Mills Co 0.13 0.00 - Ithmaar Bank Bsc 0.12 -8.00 329,910 Saudi Arabian Amiantit Co 4.30 Bahrain Kuwait Insurance 0.00 7.27 1,413,902 0.00 - Muscat National Holding 1.86 0.00 - Investcorp Bank -$Us 6.60 0.00 603 Al Jouf Agriculture Developm 2.82 Asiya Capital Investments Co 1.41 19.71 256,657 36.00 151,250 Muscat Gases Company Saog 0.83 0.00 - Inovest Co Bsc 0.16 0.00 48,482 Saudi Industrial Development 2.49 Kuwait Investment Co -3.23 8.24 1,075,027 90.00 97,100 Muscat Finance 0.14 0.00 - Gulf Monetary Group 0.00 0.00 - Bishah Agriculture 0.00 Burgan Bank 1.67 69.75 - 305.00 626,934 Majan Glass Company 0.20 0.00 - Gulf Hotel Group B.S.C 0.78 0.00 3,066 Riyad Bank 0.36 Kuwait Projects Co Holdings 0.00 11.00 909,660 500.00 1,511,155 Majan College 0.52 0.00 - Global Investment House Kpsc 0.00 0.00 - The National Agriculture Dev 4.20 Al Madina For Finance And In 4.00 17.88 731,097 26.00 4,124,042 Hsbc Bank Oman 0.10 0.00 - Gfh Financial Group Bsc 0.14 0.00 30,000 Halwani Bros Co 3.40 Kuwait Insurance Co 0.00 63.34 45,605 320.00 16,000 Hotels Management Co Interna 1.25 0.00 - Esterad Investment Co B.S.C. 0.20 0.00 38,920 Arabian Pipes Co 0.63 Al Masaken Intl Real Estate 1.49 7.95 1,186,785 68.00 153,011 Gulf Stone 0.11 0.00 - Delmon Poultry Co 0.00 0.00 - Eastern Province Cement Co 0.49 Intl Financial Advisors 4.55 26.64 830,951 23.00 970,169 Gulf Plastic Industries Co 0.39 0.00 - Bmmi Bsc 0.88 0.00 6,000 Al Qassim Agricultural Co -0.33 First Investment Co Kscc -1.10 9.19 1,031,793 45.00 504,340 Gulf Mushroom Company 0.39 0.00 - Bmb Investment Bank 0.00 0.00 - Filing & Packing Materials M 4.68 Al Mal In 7.32 29.07 397,995 vestment Company 22.00 3,048,912 Gulf Investments Services 0.08 3.80 628,781 Bbk Bsc 0.39 0.00 35,000 Saudi Cable Co 9.73 5.36 6.54 1,568,559 Bayan Investment Co Kscc 29.50 1,277,862 Gulf Invest. Serv. Pref-Shar 0.12 0.00 - Bankmuscat Saog 0.00 0.00 - Tihama Advertising & Public 1.56 0.00 16.88 1,207,111 Egypt Kuwait Holding Co Sae 156.00 28,500 Gulf International Chemicals 0.26 0.77 203,524 Banader Hotels Co ` 0.00 - Saudi Investment Bank/The -0.60 0.00 15.09 178,492 Coast Investment Development 21.50 1,188,100 Gulf Hotels (Oman) Co Ltd 10.50 0.00 - Bahrain Tourism Co 0.23 0.00 10,108 Astra Industrial Group 2.03 3.57 14.07 396,750 Privatization Holding Compan 43.50 214,588 Global Fin Investment 0.10 2.00 10,000 Bahrain Telecom Co 0.30 -4.43 23,000 Saudi Public Transport Co 3.41 0.00 10.00 3,506,781 Kuwait Medical Services Co 27.00 45,080 Galfar Engineering&Contract 0.05 1.96 182,443 Bahrain Ship Repair & Engin 1.81 0.00 3,375 Taiba Holding Co 4.20 6.33 31.99 110,257 Injazzat Real State Company 84.00 5,300 Galfar Engineering -Prefer 0.39 0.00 - Bahrain National Holding 0.00 0.00 - Saudi Industrial Export Co 3.41 -10.00 26.09 685,479 Kuwait Cable Vision Sak 22.50 77,000 Financial Services Co. 0.17 0.00 - Bahrain Kuwait Insurance 0.00 0.00 - Saudi Real Estate Co 5.30 0.00 15.90 651,575 Sanam Real Estate Co Kscc 41.00 450 Financial Corp/The 0.11 0.00 - Bahrain Islamic Bank 0.14 0.00 14,989 Saudia Dairy & Foodstuff Co 1.56 -7.25 112.98 26,034 Ithmaar Bank Bsc 32.00 71,301,792 Dhofar University 1.49 0.00 - Bahrain Flour Mills Co 0.00 0.00 - National Shipping Co Of/The 4.54 0.00 35.47 2,521,061 Aviation Lease And Finance C 192.00 276,607 Dhofar Tourism 0.49 0.00 - Bahrain Family Leisure Co 0.00 0.00 - Methanol Chemicals Co 2.77 -5.63 5.19 1,502,674 Arzan Financial Group For Fi 33.50 179,310 Dhofar Poultry 0.18 0.00 - Bahrain Duty Free Complex 0.90 0.00 17,000 Ace Arabia Cooperative Insur 4.17 -2.00 35.22 76,802 Ajwan Gulf Real Estate Co 24.50 1,235,241 Dhofar Intl Development 0.40 0.00 - Bahrain Commercial Facilitie 0.77 0.00 3,000 Mobile Telecommunications Co 0.50 0.00 6.01 6,211,350 Kuwait Business Town Real Es 34.50 2,560,150 Dhofar Insurance 0.21 0.00 - Bahrain Cinema Co 1.30 0.00 1,174 Saudi Arabian Coop Ins Co 2.42 0.00 13.98 955,319 Future Kid Entertainment And 0.00 - Dhofar Fisheries & Food Indu 1.28 0.00 - Bahrain Car Park Co 0.00 0.00 - Axa Cooperative Insurance 3.45 0.00 11.41 980,342 Specialities Group Holding C 88.00 20,100 Dhofar Cattlefeed 0.21 0.00 - Arab Insurance Group(Bsc)-$ 0.38 0.00 47,500 Alsorayai Group -0.88 2.08 9.02 1,690,921 Abyaar Real Eastate Developm 24.50 666,923 Dhofar Beverages Co 0.26 0.00 - Arab Banking Corp Bsc-$Us 0.50 0.00 288,170 Weqaya For Takaful Insurance 0.00 0.00 19.39 - Dar Al Thuraya Real Estate C 0.00 - Construction Materials Ind 0.03 0.00 - Aluminium Bahrain Bsc 0.35 -0.56 54,677 Bank Albilad 6.39 12.20 20.32 991,169 Al-Dar National Real Estate 23.00 16,437,192 Computer Stationery Inds 0.26 0.00 - Albaraka Banking Group 0.56 0.00 20,000 Al-Hassan G.I. Shaker Co 2.15 3.41 18.49 3,018,316 Kgl Logistics Company Kscc 45.50 479,700 Bankmuscat Saog 0.41 6.28 1,601,413 Al-Salam Bank 0.08 0.00 37,750 Wataniya Insurance Co 3.46 0.00 44.57 76,248 Combined Group Contracting 780.00 500 Bank Sohar 0.13 4.17 581,081 Al-Ahlia Insurance Co 0.00 0.00 - Abdullah Al Othaim Markets 70.99 3.18 104,672 Zima Holding Co Ksc 80.00 2.56 1,186,384 Bank Nizwa 0.06 3.28 462,936 Hail Cement 10.29 3.50 387,775 Qurain Holding Co 0.00 0.00 - Bank Dhofar Saog 0.22 0.00 - LATEST MARKET CLOSING FIGURES Gulf Times Monday, January 25, 2016 13 BUSINESS Liftoff grounded as market seizure redraws rate horizon

Reuters economic growth forecasts and a re- surprised no one when it cut its global to 0.75-1.00%. The Fed itself outlined the broad rethink across the fi nancial gest monthly fall in six years, while Can- London lentless oil price plunge has intensifi ed growth forecasts for this year and next. four rate hikes, but now barely one is market community, issuing dovish re- ada’s two-year yield has hit an all-time defl ationary forces. As a result, markets The most dramatic market shift in priced into futures markets, and that’s visions to their forecasts for the Fed, low. Infl ation expectations gauges in the now think central banks can go slower in central bank expectations has been for not even seen until late in the year. European Central Bank, Bank of Eng- eurozone and US are ebbing sharply too. he depth and ferocity of the tightening policy or even ease further. the US Federal Reserve, which only last On Tuesday, the other central bank land, Bank of Japan and Bank of Canada With policy ammunition largely ex- selloff in world stocks and com- Oil, which had already more than month raised US interest rates for the pencilled in for a 2016 rate rise — the over the past week. hausted in fi ghting the 2007-09 crisis, Tmodities so far this year has halved in price from the middle of 2014, fi rst time in a decade. Bank of England — eff ectively steered The slide in benchmark two-year central banks’ room for maneuver is forced investors into a dramatic rethink has fallen a further 25% since the turn At the time of that long-fl agged markets into 2017 instead as gover- bond yields across the developed world limited. Just how limited could be ex- of what the world’s major central banks of the year to its lowest since 2002. “liftoff ”, markets generally anticipat- nor Mark Carney warned of low wage since the turn of the year refl ects the posed next month in Shanghai at the will do in 2016. Major equity markets have had their ed a further two to three rate hikes of growth as well as the fallout from fall- change in market outlook. fi rst of the fi nance ministers and central Trillions of dollars wiped off equity worst start to a year on record. And this a quarter percentage point this year, ing oil and market turbulence. The US 2-year yield has plunged 25 ba- bank governors meetings under China’s market capitalisation has undermined week the International Monetary Fund bringing the Fed funds target rate up JP Morgan economists are refl ecting sis points, putting it on track for the big- G20 presidency. As speculators circle sterling, selling could get worse

Reuters Talk has intensified that a ref- London erendum could happen in June this year. And with the outcome unclear and opinion polls show- Sterling could face more pain ing voters almost evenly split, after falling to a seven-year low investors are bracing for more against the dollar last week if volatility in coming weeks. speculators add to bets against Britain’s five-year credit default the currency as uncertainty swaps — instruments used to grows about the economy and insure against a debt default or Britain’s future in the European restructuring — have also shot up Union. in the past few weeks, reflecting In the past few weeks, a wave some of that uncertainty. of bets in the derivatives markets Soft inflation and subdued have been placed by investors wages have also prompted a shift seeking protection against risks in expectations of when the Bank from a referendum on Britain’s of England will start raising inter- EU membership, now widely ex- est rates from crisis-era lows. pected by markets to take place Economists at BNP Paribas later this year. said in a note they now expect a Data from the Commodity Fu- hike in the first quarter of 2017, tures Trading Commission show while the market sees no move An advertising board shows a Chinese stone lion pictured near an entrance to the headquarters of China Securities Regulatory Commission in Beijing. The Chinese stock market speculative positions against the until the second half of next rout this month hasn’t slowed the volume of foreign acquisitions, which has already reached one-third of last year’s record tally, according to data compiled by Bloomberg. pound do not yet match the huge year. short bets put on during the sum- Martin Weale, a policymaker mer of 2013, when sterling fell to on the BoE’s nine-member rate $1.4946 before recovering. setting committee said on Thurs- The pound hit a low of $1.4080 day that the pound’s decline this week — a drop of 7.5% in could push up inflation. He had a just five weeks — with specula- positive outlook on the economy tive net short positions at 30,521 and attributed much of the fall in contracts, compared with nearly inflation to one-off eff ects from Chinese fi rms set record 80,000 contracts put against it the drops in commodity and food summer 2013. prices. But “we would expect more Nevertheless, investors are speculators to play catch up and likely to stay away from the keep sterling under pressure,” pound in the near term. said Chris Turner, head of cur- “Concerns around the risk rency strategy at ING. of Brexit are likely to get more pace for overseas deals “And there is another com- serious as the referendum munity that will also look to approaches,” said John Wraith, Bloomberg Shanghai and Shenzhen-traded fi rms acquisitions in late October and early No- ment, or the controlling shareholder can sell — the corporate sector. They strategist at UBS. Hong Kong announced $25.6bn of overseas acquisi- vember. make an acquisition fi rst before a listed have been watching with horror “This could exacerbate the tions and investments last year, up 48% Shandong Delisi agreed to buy 45% of unit issues stock to take it over, he said. the slide in sterling. We could downside pressure on sterling from 2014, Bloomberg-compiled data Bindaree Beef Pty for A$140mn ($97mn), The China Securities Regulatory Com- see them increase their hedging ... We do not therefore advocate hina’s listed fi rms are in the midst show. Top dealmakers, including Tsing- valuing the Australian meat producer at mission sped up approval for equity of- ratios, given all the risks from positioning for a reversal of the of their biggest-ever overseas hua University’s investment arm and the 24 times EBIT, data compiled by Bloomb- ferings in December after fi ve months of Brexit.” recent spiral lower.” Cshopping spree, taking advantage owner of China’s fourth-largest airline, erg show. The Chinese company trades in slackness following a stock rout. Com- of a wide and attractive valuation gap be- are using their listed units to make deals. Shenzhen at a multiple of 235 times. panies completed $21.9bn of additional tween domestic shares and foreign assets. Smaller fi rms with less of a track record “Just like Chinese consumers who shop share sales in December, nearly triple the Haier Group Corp said last week it will are also pursuing acquisitions overseas, around the world, Chinese companies are November value. This month’s stock rout use its publicly-traded arm in Shanghai often using their own stock to fund the looking overseas for nice bargains,” said has not slowed things down with $14bn of to acquire General Electric Co’s home purchases. Ken Chen, a Shanghai-based analyst at deals done in three weeks. appliance business for $5.4bn, pushing Shanghai-listed BTG Hotels (Group) KGI Securities Co “It resembles what In addition, Chinese companies and outbound deals from the nation’s listed Co last month announced a $1.8bn Japanese companies did in the 1980s on private-equity funds are eyeing US-list- companies to $8.6bn so far this year. The agreement to acquire budget lodging the back of the country’s industrialization ed stocks for arbitrage opportunities. At Chinese stock market rout this month chain Homeinns Hotel Group. BTG Ho- and a strong yen.” least 40 US-listed Chinese companies hasn’t slowed the volume of foreign ac- tels, backed by the Beijing city govern- Bubbles in China’s housing and stock announced buyout bids last year total- quisitions, which has already reached ment, is seeking Chinese regulatory ap- markets leave companies with limited in- ling a record $38bn. Qihoo 360 Tech- one-third of last year’s record tally, ac- proval for a 3.9bn yuan ($593mn) equity vestment options domestically, and the nology Co, a developer of mobile-phone cording to data compiled by Bloomberg. off ering to fund part of the purchase. government has encouraged enterprises security software, received a $9.3bn go- Pricey stocks leave ample room for Chi- Including debt, US-traded Homeinns to “go out” and help promote the yuan’s ing-private off er last month, the biggest nese companies to boost returns by buy- was valued at 22.6 times earnings before internationalization, Chen said. The yuan of its kind in 2015. ing more profi table assets overseas for interest and taxes, while BTG Hotels trades became part of the International Mon- China pulled out all the stops in the less. With domestic fi rms valued at more at 45.2, according to data compiled by etary Fund’s basket of reserve currencies third quarter to try to stem a stock rout than three times the level in the US, what Bloomberg. After announcing the transac- in December. “Chinese like to cut corners and prevent the bubble from bursting, was previously a select group of China’s tion Dec. 24, BTG Hotels surged more than and overtake,” said Brian Lin, who man- setting up a bailout fund of as much as 3tn outbound acquirers is set to widen, help- 75% over the next six trading days. ages NT$9.2bn ($272mn) at Capital In- yuan to prop up share prices, people with ing the nation continue its record deal Stocks in China’s domestic market vestment Trust Corp in Taipei. “They like knowledge of the matter said in July. The making run. trade at a median 53.2 times earnings, to upgrade themselves fast by buying as- benchmark Shanghai Composite Index, “They’re trading at high multiples but more than three times the multiple in the sets, techniques and patents.” which rose 1.3% on Friday, is still down often have lower earnings, and it’s about US and more than fi ve times that in Hong While A-share fi rms sometimes strug- 44% from its June high. time that they take advantage of elevated Kong, data compiled by Bloomberg show. gle to gain regulatory approval for share For UBS’s Lo, January’s stock market valuations to buy something sizeable and Chinese shares often surge on news of sales and are required to make early dis- woes won’t prevent further deals. “De- something concrete,” said Samson Lo, overseas purchases. Shandong Delisi Food closures that may spike deals, they are spite the market volatility, as long as the head of Asia mergers and acquisitions at Co, a frozen-meat producer in eastern fi nding workarounds, UBS’s Lo said. multiple arbitrage exists, A-share compa- UBS Group. “In a sense, these companies China, jumped by the 10% limit for fi ve Companies can take out bridge loans that nies will not stop looking at the transac- are acting like fi nancial investors.” consecutive days after announcing two are later repaid through a share place- tions,” he said.

Leaky lifeboat: Weak US corporate profi ts off er no rescue to sinking stocks

Reuters That would make three straight the profi t outlook stabilizes. And that in the fi rst quarter or second,” while guidance because there’s so much un- cast to have dropped by 25.2% in the New York quarters of profi t declines, the longest hasn’t happened. big profi t gains are expected later in the certainty,” said Art Hogan, chief market fourth quarter and by 4.7% in the streak in the red for earnings since the Fourth-quarter 2015 earnings for year, he said. “That seems to me an ex- strategist at Wunderlich Securities in first. Great Recession. S&P 500 companies are projected to tremely diffi cult thing to achieve unless New York. No recovery is expected for materials nvestors who hoped US corporate The fl agging earnings picture is one have fallen 4.5% from a year ago, with things really turn around.” Earnings from technology com- earnings until the third quarter and no earnings could dig stocks out of of several key factors dogging the US a decline of 3.5% in revenue expected. Forecasts from companies are not panies are expected to have declined bounce for energy profi ts are seen until Itheir deep hole may fi nd themselves stock market which had the worst start Earnings fell 0.8% in the third quarter helping the picture, given the con- 3.4% in the fourth quarter from a year the end of 2016. sorely disappointed. to a year on record. of 2015, Thomson Reuters data shows. tinuing collapse in oil prices, concerns ago with no respite seen in the current Still, Hogan said there is a chance The outlook for corporate profi ts Valuations have come down but In the past week, fi rst-quarter 2016 about the slowdown in China and a quarter. earnings reports for the fourth quarter continues to deteriorate, and earnings largely because stock prices have fallen earnings estimates have fallen by more rising US dollar, which drags down US For the fi rst quarter, tech profi ts are could off er some hope for stocks once growth is now unlikely to revive before faster than earnings estimates. The than 1 percentage point, fl ipping the multinationals’ earnings. now forecast to fall 1.3%, a 3-percent- more results are in, since most com- the summer. S&P 500’s forward price-to-earnings year-over-year outlook for the quar- International Business Machines age-point swing to the downside since panies tend to beat conservative esti- Thanks to rapidly dimming fore- ratio stands at 14.9, its lowest since the ter to a decline of 0.4% from a gain of and Advanced Micro Devices both Jan. 1 when the estimate called for a mates. casts for energy, materials, finance fi rst quarter of 2013 and well off the 0.8%. gave outlooks this week that disap- 1.7% increase. So far for fourth quarter results, 69% and technology sectors, year-over- 17.4 level of May when the index hit its “It adds to the diffi culties for the pointed, while Union Pacific reported Earnings from the energy sector of companies are beating analysts’ year profit declines for Standard & record high. overall market,” said Robert Pavlik, a lower quarterly profit and warned are seen dropping 73.3% in the fourth profi t expectations. Poor’s 500 companies are now ex- While that PE ratio is now slightly chief market strategist at Boston Pri- 2016 does not look much better for quarter and by 66.5% in the fi rst quar- Zero earnings growth is now ex- pected until the second quarter of below the market’s long-term average vate Wealth in New York. business. ter, with oil prices down roughly 18% in pected for 2015, while profi t growth for 2016 at the earliest, according to data of about 15, it is hard to argue stocks “When you start to look at some of “In this environment, one of the the fourth quarter and another 20% in 2016 has come down in recent weeks, from Thomson Reuters Proprietary are cheap, even on the back of an 8.6% the forecasts for earnings growth in things you’re not going to get from the fi rst quarter so far. from 7.6% projected on Jan. 1 to just Research. year-to-date drop in the S&P 500, until 2016, you’re not expected to see much CFOs on the conference call is robust Materials sector earnings are fore- 6.1% now. Gulf Times 14 Monday, January 25, 2016 BUSINESS

Italy ‘bad bank’ promises no gain without pain for lenders

Bloomberg Thursday, in reassuring in- London vestors. “It’s not about the amount of NPLs — that we know — it’s taly’s banks may have about the processes the banks to swallow a bitter pill if have put in place to address the Ithey’re to offl oad billions of NPLs,” ECB Executive Board euros of non-performing loans member Benoit Coeure said to a state-backed bad bank. at a WEF panel on Friday. “It’s The government is set to about whether the banks are agree with the European Com- forceful enough in addressing” mission on a mechanism to their soured loans, he said. help banks sell soured loans, The Italian banking indus- said two people familiar with try has an average coverage ra- the matter who asked not to be tio of 43%, according to data identifi ed because the talks are compiled by Bloomberg. For private. State guarantees for banks including Banca Monte the programme, which could dei Paschi and Banco Popolare, be used by individual lenders or the doubtful loans they haven’t several banks jointly, would be provisioned for will exceed less than €40bn ($44bn), they their tangible common equity said. by more than two times, Milan- While removing bad assets based brokerage Fidentiis Equi- will help lenders cleanup their ties wrote in a January 21 client balance sheets and spur lend- note. ing, it may fi rst force them to Italy may set up several bad recognise billions of euros of banks for individual lenders losses if disposals achieve lower rather than a single institution, prices than the value recorded Il Sole 24 Ore reported on Janu- A visitor enters the headquarters of Lloyds Banking Group in London. Britain’s biggest banks, which use securitisation vehicles to transform their pound-denominated mortgage in banks’ accounts. Italian ary 14. loans into securities priced in dollars or euros, are being replaced by issuers that can’t issue in those currencies as easily. banks have put aside money to The gap — between how cover less than half of the nom- banks value the loans and what inal value of their bad loans, so they would receive from the bad asset disposals at even lower bank — may be large, according levels imply losses. to John Raymond, a London- “A bad bank is seen as good based analyst at CreditSights. news but if one were set up That’s because Italy’s portfolio now, it would need to buy of bad loans is messier than in loans at market prices to avoid other European countries such regulatory objections,” said as Spain, which set up a bad UK’s open door for bank, Sareb, three years ago. Francesco Castelli, a London- based portfolio manager at “In Italy the bad loans to Banor Capital. “But market small businesses are varied, prices are lower than the book whereas in Spain they were values so banks may be un- mostly bad mortgages,” Ray- able to offload loans without mond said. “It takes longer to booking losses.” value thousands of chunks of foreign buyers closing Italian banking shares are loans and it’s harder to get the extending a two-day rebound right value - that could mean as offi cials signalled they’re the banks getting rid of the moving closer to reaching an loans for big discounts,” he agreement on setting up a bad said. bank for soured loans. Italy’s To be sure, the country may Finance Minister Pier Carlo choose to set up the bad bank on mortgage bonds Padoan said on Friday at the in a way that spreads out the World Economic Forum in Da- losses over time or limits them, Bloomberg capital demands made it more lenders from Lloyds Banking ey Holdings (UK) have featured issuance coming from smaller vos, Switzerland, that negotia- Raymond said. London expensive to securitise loans and Group to Nationwide Building portions denominated in dollars banks and from sales of older tions with the European Com- Italian banks, which showed as central banks started provid- Society have used securitisa- and euros. loan portfolios, according to mission “are down to details,” the largest combined capital ing cheaper funding. The resi- tion vehicles known as master “A shortage of master trust Citigroup. and focusing on the pricing of shortfall in the ECB’s review ust about anything in the dential mortgage-backed secu- trusts to help fund mortgage deals doesn’t have to mean that Issuance of RMBS by the guarantees. of the region’s lenders com- UK — from football clubs to rities market is now dominated lending. Sporting names such there will be no euro notes to UK’s biggest mortgage lenders “It should have been done by pleted in October 2014, rein- Jshopping malls and houses by smaller banks set up since the as Arkle and Silverstone, the buy,” said Annemieke Colde- declined after a Bank of Eng- the government and in place,” forced their capital from private — can be acquired with ease by fi nancial crisis to compete with structures give lenders the weijer, The Hague, Nether- land program introduced in Padoan said. “We’re working sources by about €11bn that foreign investors. That’s chang- the established players, as well flexibility to offer multiple se- lands-based head of securitised 2012 to cut borrowing costs for as quickly as we can and we’ve year. Monte Paschi, after hav- ing for mortgage bonds. as fi rms repackaging older loan curities, denominated in vari- investments at NN Investment small businesses and home- been working for months to ing raised €5bn in 2014, tapped The UK’s £70bn ($100bn) portfolios. ous currencies, using one pool Partners, which manages about buyers provided banks with a reach an agreement with the investors again less than a year market for the securities may “The market risks becoming of assets. €180bn ($195bn). “There’s a cheaper source of funds. The commission on these issues.” later for an additional 3bn eu- soon become largely off limits to much more reliant on the do- The new banks typically don’t yield pickup available in UK as- takeover or collapse of some of Banca Monte dei Paschi di ros. The lender may be forced buyers from outside the country, mestic investor base,” said Ga- have master trusts and instead sets, so I hope to have ongoing the largest issuers of the debt, Siena, which has 24.4bn eu- into another capital increase, according to JPMorgan Chase reth Davies, head of European sell debt via one-time issuing access to that market.” such as HBOS and Northern ros of net non-performing Castelli said. & Co. That’s because Britain’s asset-backed securities research vehicles, with the majority of the The volume of outstanding Rock, also reduced the number loans, has been hardest hit by “The question is how much biggest banks, which use se- at JPMorgan in London. notes priced in pounds, said JP- bonds sold by the trusts has of firms selling the notes. investor concerns tied partly cleaning up have they done?” curitisation vehicles to trans- “If you’re a credit investor Morgan’s Davies. Master-trust shrunk to £18bn from £140bn “With stand-alone deals, in- to European Central Bank re- said Marco Elser, an investor form their pound-denominated in Munich, Paris or Boston, the deals typically off ered about in October 2008, and sales to- vestors need to look at a new questing more data on non- in distressed fi nancial assets mortgage loans into securities chances are you don’t have the 70% of notes in euros or dollars, taled just £4.1bn last year from pool of assets each time,” said performing loans. The ques- at Lonsin Capital in Rome. “If priced in dollars or euros, are capacity or desire to buy sterling he said. a peak of £62bn in 2006, ac- Annabel Schaafsma, a struc- tionnaire was sent to “several they’ve done all the cleaning being replaced by issuers that bonds, so you will naturally be Even so, the structure of new cording to data compiled by tured fi nance analyst at Moody’s banks” in the euro area and is up that they told Italian bank- can’t issue in those currencies as excluded from UK RMBS deals deals doesn’t completely limit JPMorgan. Overall issuance of Investors Service. “Master “not an initiative that would ing authorities they’d done, I’m easily. that don’t off er euro or dollar the sale of foreign currency debt. UK mortgage bonds will reach trusts’ bonds were based on the push the banks to deal with not concerned. If they still have Lenders reduced sales of the securities.” Recent transactions from TSB a five-year high of as much as same pool of assets, which made NPLs urgently,” ECB Presi- cadavers in the closet, then debt after stricter regulatory Since the late 1990s, UK Banking Group and Virgin Mon- £19bn in 2016, with most new due diligence a lot easier.” dent Mario Draghi said on that’s another matter.”

Aviation giants tread carefully in test case for post-sanctions Iran

Reuters reopen for business after years of UN, US and Despite its edge over rival Boeing in the head- November 8 US election. “I think there is a huge China. Sponsors of yesterday’s Tehran meeting Dublin European Union sanctions over its nuclear pro- lines, any deals Airbus strikes will also require opportunity. But I think most of us, especially included Chinese-backed Dublin leasing fi rm gramme, which the West feared was aimed at US licence approval, since more than 10% of its in the US, are a bit cautious,” said John Plueger, Avolon and other foreign lessors, who could developing weapons. Iran has always denied planes come from US parts. president of Air Lease Corp “We have an elec- have a signifi cant role due to long delivery times reed from nuclear-related sanctions, Iran that charge. With signifi cant US interests including a new tion coming up in the US (and) we could have a for new jets. has signalled its appetite to buy more than In recognition of Tehran’s moves to curb its Alabama factory, the European company is ex- very diff erent person in the White House in No- Lessors control 40% of the world’s fl eet and F100 Western planes, a prospect that would atomic programme, the nuclear sanctions were pected to tread carefully. vember.” act nimbly, moving jets around the world to usually have the giants of the $130bn-a-year jet lifted on Saturday. The same day, an Iranian “We are studying our way forward ... in European business groups have displayed meet demand. But they need to be confi dent industry scrambling for a piece of the action. news agency quoted the transport minister as full compliance with all international laws,” a more willingness in recent months to put out they can always recover their assets. But a muted response from both Airbus and saying Tehran had “taken the fi rst step in agree- spokesman said. feelers to Iran, vexing their US rivals. Lawyers Iran may be urged to join a treaty of over 60 arch-rival Boeing underscores the lingering un- ing with Airbus to buy 114 planes”. Although Washington has liberalised rules to say this stems in part from a discrepancy in the nations that have agreed to set up an interna- certainty and complications of doing business The announcement caught some European allow US and foreign fi rms - including Airbus - way the lifting of sanctions has been imple- tional aircraft registry to protect foreign aircraft with Tehran. offi cials off guard and drew a cautious reaction to seek licences to sell passenger jets to Iran on a mented. owners in the event of defaults. Western and Iranian offi cials say Iran will re- from the plane maker itself, which said it could case-by-case basis, Boeing and other US com- “In Europe it is ‘Yes Unless’ and in the US it “Lessors and banks will want to see what kind quire at least 400 jets over a decade to replenish not start negotiations before laws allowed. panies have displayed little appetite to take the is ‘No Unless’,” Brian Mulier, partner of law fi rm of legal framework is available. They always its ageing fl eet. Of those, 100-200 are press- Still, analysts said the comment delivered a lead. Bird & Bird, said. want to know: ‘Is my ownership status going to ingly needed, and would be worth over $20bn at clear signal to foreign businesses and political “Europe dialled restrictions down from an A senior Western diplomat said companies be respected?’” said aviation banker Bertrand list prices. rivals in the region that Iran was serious about eight to a four, while the US went from 11 to 9 on would have to make their own decisions and Grabowski, a managing director of Germany’s That makes it a hugely enticing market at a restoring its economy and welcoming investors. a scale of 10,” said Christopher Swift, a former their reticence was understandable. DVB Bank. time when plane makers are facing a slowdown Echoing that sentiment, Iran was scheduled US sanctions offi cial and a lawyer at Washing- “If I was a company I would certainly be Answers to questions such as these may set after years of strong orders. to host aviation leaders yesterday and today at ton-based Foley & Lardner. wanting to look at the opportunity, but I the tone for tens of billions of dollars of other But industry leaders say it could take months a Tehran conference together with Australian A Boeing spokesman said, “There are many would also want to be looking at how stable I investments in Iran. or longer to remove all the legal, regulatory and consultancy CAPA to discuss ambitious plans steps that need to be taken should we decide to thought this was and how confident I was that “One would assume that if they are serious political obstacles so that signifi cant numbers to restore and expand its airline and tourism in- sell airplanes to Iran’s airlines. For now, we con- the Iranian government was going to keep its about getting aircraft in, there will be the abil- of jets can be sold to Iran, which still remains dustries. tinue to assess the situation.” word,” the diplomat said on condition of ano- ity for creditors to exercise their rights,” Aer- subject to a broad range of other US sanctions. The fi rst major business gathering since the Some aircraft executives are worried about nymity. Cap’s Kelly said, predicting that this would be “This is an opportunity in a big market that lifting of sanctions comes against the backdrop the risk that sanctions can be reintroduced if Iranian President Hassan Rouhani said last resolved. needs a lot of replacement capacity, let alone of opposition to the nuclear deal from Republi- Iran fails to curb its nuclear activities, under a week his country would not breach its deal with In the longer term, Iran’s rebound may de- growth capacity. But we have to be crystal clear cans in the US Congress and escalating tensions so-called ‘snapback’ mechanism. world powers as long as the West honoured its pend on signifi cant spending on airports, air that sanctions have been removed,” said Aen- between Iran and Saudi Arabia. If that were to happen, there are confl icting commitments. traffi c control and other infrastructure: topics gus Kelly, chief executive of Dutch leasing giant That leaves aerospace fi rms, especially those views on the status of any deals negotiated dur- In an opportunity for further business an- also due to be discussed with investors. AerCap. based in the US, facing a dilemma over whether ing the break in sanctions. nouncements, Rouhani is due to visit France, “It will take some time. It requires upgrades The willingness and ability of plane mak- to risk upsetting Congress and key Gulf custom- Republican candidates have meanwhile sig- where Airbus is based, on January 27. Iran says it in infrastructure...and won’t happen from one ers to enter the Iranian market will provide an ers, or bide their time and lose business, diplo- nalled a more aggressive posture towards Iran welcomes US and European companies, but has day to the next. But I see this as an important early test case of how quickly the country can mats and industry sources said. if they succeed President Barack Obama in the made clear it will also look towards Russia and point of departure,” Grabowski said. Gulf Times Monday, January 25, 2016 15 BUSINESS Philips scraps Lumileds sale on US security opposition

Bloomberg Termination of the agreement doesn’t entities and Lumileds has a US subsidi- cerns,” Wu said. He vowed to push ahead used in US defence systems. In 2012, the Philips is “engaging” with other com- Amsterdam involve a breakup fee or hurt the planned ary based in San Jose, California that has to build a leading LED lighting company US House Intelligence Committee urged panies that have expressed interest in process of separating the lighting busi- research and development as well as that would help China to have a global US companies to stay clear of Chinese Lumileds, it said in the statement. KKR & ness, which is an independent transaction, manufacturing facilities. LED industry. phone equipment makers, citing concerns Co, CVC Capital Partners and Bain Capital Royal Philips cancelled a planned $2.8bn Philips said. Failure of the deal is a blow to Philips and GO Scale withdrew their that the Chinese government could install unsuccessfully bid for Lumileds in March. sale of its lighting-components unit to chief executive off icer Frans van Houten, Termination of the agreement application for the deal because of their malicious hardware or software in com- With sales last year of about $2bn, a consortium led by GO Scale Capital of who is splitting off lighting to focus on doesn’t involve a breakup fee inability to resolve the “unforeseen con- munications networks. China’s commerce Lumileds is the biggest supplier of lamps China because of opposition from a US consumer health care. or hurt the planned process cerns” of the US committee, Philips said in minister said the US view of Chinese to the automotive industry, equipping regulator charged with vetting foreign Rejection of the deal by the Committee of separating the lighting its statement. companies as a Trojan horse reflected “a one out of every three cars in the world, acquisitions to protect national security. on Foreign Investment, or CFIUS, is further business, Philips says Acquisitions by China-linked companies Cold War mentality.” according to the company’s website. The The US government’s Committee on evidence that the US is wary of Chinese of some technology-related businesses During the period when Philips was stand-alone company was created in 2014 Foreign Investment in the US had raised technology companies. The sale stalled For its part, GO Scale Chairman Sonny in the US have hit hurdles. Senator Chuck trying to push the GO Scale deal past US to combine the LED components and concerns about the agreement and clear- over the transfer of semiconductor technol- Wu said in a separate statement that the Schumer, a New York Democrat, wrote regulators “the business fundamentals automotive lighting businesses. ance has not been granted, Amsterdam- ogy involved in making LEDs, a device that tech-focused private equity fund would in August to the Treasury Department, of Lumileds have probably deteriorated, Philips is also exploring the sale of based Philips said in a statement. Philips emits light, one person familiar with the pursue technology acquisitions. GO which leads CFIUS, about a bid for Micron so it will be tougher to realise the same its lighting division, which has attracted had agreed last year to a sale of an 80.1% situation said last year. Scale and Philips’s “persistent” eff orts to Technology by Tsinghua Unigroup, saying price as before,” Hans Slob, an analyst for interest from buyout firms including CVC, stake in the Lumileds unit that makes LED The authority of the committee includes get clearance for the deal “fell short of he was “deeply concerned” about allowing Rabobank, said by phone. “It’s a pretty big which has teamed up with KKR, as well as components and automotive lights. acquisitions of US businesses by foreign addressing unexplained government con- China to gain control over components disappointment.” Bain Capital and Blackstone Group.

Europe’s gas Fed to shed light on depth plants spark to life with of global growth concerns fuel at 5-yr low Bloomberg Federal Reserve rate setters London to conclude meeting on Wednesday; doubts rise over pace of rate hikes; global growth atural gas-fi red power plants in Eu- worries linger; markets also rope’s two biggest electricity users are eyeing Japan central bank policy Nearning utilities money again. German gas-fi red plant profi tability at Reuters times of peak demand turned positive on De- Madrid cember 7, rising to the highest since February 2012 on Thursday, while gas units that gen- erate around the clock in France have been or more clues as to how slump- profi table for seven weeks, the longest stretch ing oil prices and a faltering in four years, according to data compiled by FChinese outlook could sway Bloomberg. That came after benchmark Euro- policymakers in the coming months, pean gas prices fell 12% in 2016, extending last look no further than January’s meet- year’s 31% drop. ing of US Federal Reserve rate set- “More gas plants are in the money at current ters. power and gas prices,” said Omar Ramdani, Concerns over weaker global head of analysis at RheinEnergie Trading in growth are casting doubt on the pace Cologne. “If it pays off for a gas plant to pro- at which the US central bank will duce several hours and not a whole day, it is continue hiking interest rates, after looking positive right now.” December’s fi rst rise in nearly a dec- While gas produces about half the emissions ade. of coal when used to generate electricity, mak- Expectations for a March rate in- ing it a greener option to back up intermittent crease are already starting to fade, wind and solar output, the fuel has struggled and economists polled by Reuters to compete against more profi table coal, forc- now forecast three hikes in 2016 ing utilities from EON to Statkraft to close gas rather than the four initially fl oated units. by the Fed. The price of the cleaner fuel in Europe will Against a backdrop of volatile probably fall further as cold weather ends and trading in global stocks, Fed of- oil’s slump feeds into long-term contracts, fi cials have shrugged off in recent Societe Generale said last week. weeks the impact of fi nancial market “We’re now in a situation where the most swings on their decisions. effi cient gas is replacing the least effi cient coal The Fed is widely expected to leave plants,” Marcus Bokermann, director of market its federal funds rate unchanged at strategy at Vattenfall’s asset optimisation and 0.25-0.50% when policymakers trading business, said on January 17. “There’s conclude their meeting on January still a long way to go until least effi cient gas 27. But falling infl ation assumptions, pushes out most effi cient coal but we have coupled with the market turbulence, started. This has impact on overall emissions in could lead them to signal deepening Europe.” concern over the US and world eco- Engie doubled the output of four of its French nomic outlooks. gas-fi red plants in 2015 from a year earlier, in- “If the statement acknowledges cluding a unit in Fos-sur-Mer brought back increased risks without mention of The Marriner S Eccles Federal Reserve building in Washington. Expectations for a March rate increase are already starting to fade, and economists polled by after being idled, Le Figaro reported January expected resilience in the medium- Reuters now forecast three hikes in 2016 rather than the four initially floated by the Fed. 21. Gas prices are low enough that stations in term outlook, this would be a dovish France will compete with nuclear to provide sign,” analysts at BNP Paribas said in latest model from the Atlanta Fed- ing of its monetary policy was likely had not changed. But concerns are review in Japan on January 28-29, as the lowest cost generation, according to Bruno a note. eral Reserve. in March. mounting about the impact of weak- speculation grows that the central Brunetti, senior director of electricity at Pira US data paints a more subdued The most recent Reuters poll put Tumbling oil prices have sunk er growth elsewhere after China bank may expand its stimulus pro- Energy. domestic picture, too, as a strong US growth at 1.3%, following a 2% the outlook for infl ation, pushing confi rmed its 2015 expansion was gramme. Economists expect a cut in France gets about 75% of its power from re- dollar buff ets the economy. Con- rise in the third quarter. the ECB to fl ag its willingness to act the slowest in 25 years and the Inter- infl ation forecasts, and some are not actors. sumer prices unexpectedly fell in Some believe a weaker fourth again after a deposit rate cut and an national Monetary Fund cut growth ruling out more surprises. “It is starting to be ugly as we head towards December. quarter is unlikely to cloud longer- extension of its government bond- forecasts, citing the eff ects of the “We maintain our core scenario nuclear reactors ramping down in the short Recent weak reports on retail term prospects, however, with un- buying programme in December. rout in commodities. of no easing at this meeting, but term” as gas gets cheaper, he said by phone sales, housing starts and industrial derlying trends in the labour market A preliminary reading of con- In Russia, where the next regular acknowledge the risk of an unex- from New York. production suggest a slowdown in still robust. sumer prices in the eurozone due on interest rate decision is due on Janu- pected announcement from the BoJ So far this winter, Europe’s gas consumption activity at the end of last year, as “A fourth quarter slowdown is January 29 should give more clues. ary 29, the central bank has warned next week,” said Betty Rui Wang, an has been about 6% below normal, said Me- did a six-month high in US jobless not likely to derail the economy Prices are expected to have risen the government faces “diffi cult economist at Standard Chartered. redith Annex, an analyst for Bloomberg New claims reached in mid-January. from growing at close to the 2.2% 0.4% year-on-year, though econo- choices” as the price of oil, its main The Bank of Japan meeting coin- Energy Finance in London. Rising spark spreads Preliminary fourth quarter data on trend rate in 2016,” HSBC analysts mists believe they will soon head export, falls. The rouble has crashed cides with data, including on fac- may change that, she said. US output due on January 29 should said. back into negative territory. to record lows in recent days and of- tory output and jobs for December, “If there’s a driver for gas demand in Europe, confi rm the easing momentum, with The Fed will lay its cards on the ECB chief Mario Draghi stressed fi cials now expect an economic con- that could reinforce fears the econ- it will come from the power market,” Klaus the annual pace of expansion seen table days after the European Cen- on Friday the outlook for a gradual traction in 2016. omy is still struggling after years of Schaefer, chief executive offi cer of EON’s Uni- coming in at 0.7%, according to the tral Bank signalled that further eas- economic recovery in the euro zone Markets are also bracing for a rate stagnation. per unit, said January 20.

Island of nickel losing money as world’s mines shun output cuts

Bloomberg starting to see capacity closures at the don and Shanghai reached a record this or cheap, especially ones that took Koniambo,” Glasenberg said. “We have wearing, and our patience is wearing. London currently low prices, but the question week. decades to build, employ thousands of no intention to continue running the We’re analysing our options in New is: are these cuts enough, does the in- Nickel, a metal used mostly in stain- workers and provide much-needed tax asset and burning cash like some other Caledonia.” dustry need to see more? I think the an- less steel, tumbled 41% in the past year revenue for the French colony, which parties in that area.” Glencore also is Still, there are signs that some pro- n a remote island in the Pacifi c swer is more cuts are needed given the on the London Metal Exchange, and has a population of about 100,000. considering a shutdown at its Murrin ducers have had enough. This month, Ocean, mine owners like Glen- extent of inventory overhang.” last month touched $8,100 a tonne, Spending on Koniambo alone — one of Murrin mine in Australia, he said. Australia’s Queensland Nickel, a refi n- Ocore and Vale are losing money Of the 2mn metric tonnes of global the lowest since 2003. That compares the world’s biggest new projects — ex- Koniambo, authorised by former ery operator owned by Australian min- on every tonne of nickel they unearth in nickel capacity, only 16,000 tonnes with an all-time high of $51,800 in ceeds $7.2bn at the start of its produc- French President Charles De Gaulle in ing tycoon and politician Clive Palmer, what amounts to a contest to see who was shut down last year, according to May 2007. Vale says its New Caledonia tive life. 1966, only started production in 2013, appointed administrators to assess the can endure the agony longer. Morgan Stanley, which estimates 70% mine, formerly known as Goro, pro- “I’m surprised Vale didn’t shut Goro but has been running below forecasts viability of the plant that has been us- A prolonged surplus of nickel has of the world’s mines have been losing duced at a cost of $20,000 a tonne last in December,” said Colin Hamilton, because of some technical issues, like ing New Caledonia ore since 1989. Bra- sent prices plunging to a 12-year low money as prices fell. Standard Char- year, and researcher Wood Mackenzie global head of commodities research at rebuilding a failed smelter furnace used zil’s Votorantim Metais will halt nickel and below the cost of production for tered says the red ink is bigger in nickel estimates Glencore’s Koniambo ven- Macquarie in London. “Koniambo defi - in processing ore and extracting metal. output at two operations, Valor report- more than two thirds of the world’s than for any other base metal — at a ture spent $33,000 a tonne. The high nitely needs a higher nickel price. The The project, 49% owned by the Glen- ed this week. mines. Nowhere is the strain more time when all of them are in bear mar- costs partly refl ect projects still in question is: Is Glencore just trying to core, can produce as much as 60,000 Macquarie analysts, in a January 19 acute than in New Caledonia, a former kets and most commodities are mired ramp-up modes. ride it out? If the nickel price stays sub tonnes a year. A spokesman for the report, said production cuts will accel- Napoleonic penal colony 1,000 miles in prolonged slumps because of over- One of the key reasons producers $10,000 a tonne, it’s just not viable.” company declined a request for com- erate this year, reducing global supply from Australia’s eastern coast that supply. haven’t yet made any signifi cant cuts Evy Hambro, the manager of Black- ment. by almost 5%. The decline may be even drew billions of dollars in investment Global nickel production needs to be is they are waiting for large, high-cost Rock’s $3bn World Mining Fund, asked Vale said its New Caledonia mine ex- bigger if prices remain below $10,000, when the metal reached a record before reduced by as much as 30% to ease the assets like Vale New Caledonia and the Glencore CEO Ivan Glasenberg on panded production by 50% last year to which would compound the already the fi nancial crisis. Now, an island with surplus, Pavel Fedorov, the fi rst deputy Koniambo to close fi rst, according to a conference call last month why the 30,000 tonnes and plans a further 50% severe fi nancial strain on mine owners, 15% of the planet’s reserves has become chief executive offi cer at Russia’s GMK Morgan Stanley. Closing just one of industry has been so slow to shutter gain in 2016. the bank said. a cautionary tale for an industry un- Norilsk Nickel, one of the world’s two those mega-projects on New Caledo- unprofi table operations. The mining “It’s been a very challenging place “People are bleeding cash,” Glen- willing to curtail supply. largest producers, said in an interview nia, the fi fth-largest producer, would executive said he was perplexed that for us to do business,” Jennifer Maki, core’s Glasenberg said. “And when I “The whole of the island is a lump of this week in Davos. Even as supply cuts be enough to balance the market and rivals hadn’t acted by now. Vale’s head of base metals, told inves- say bleeding, it’s big cash, it’s not small nickel,” said David Wilson, an analyst accelerate, stockpiles in warehouses perhaps revive prices, the bank said. “We will review the market, and we’ll tors in London last month. “We know amount, and the operations stay open. in London for Citigroup. “We’re now tracked by the main exchanges in Lon- But shutting down mines isn’t easy see what we can get the cost down to at everybody in this room’s patience is We don’t understand it.” Monday, January 25, 2016 GULF TIMES BUSINESS

The development of Qatar’s financial sector and Commercial Bank, its contribution to economic diversification Mexico’s Bancomext sign MoU for ‘future By Dr Abdulaziz A al-Ghorairi cooperation, Qatar has been one of the fastest-growing economies in the world during the last dec- collaboration’ ade. Economic growth has averaged 16% over the past decade and GDP per capita for projects has reached approximately $100,000, horizon a few years ago, such as real estate the impact of banking on the economy and making it one of the wealthiest countries and construction, have become major driv- its ability to contribute to the diversification in the world. Its massive base of oil and gas ers of growth. policy. has provided a solid basis for its thriving This is the first in a series of articles to The evolution and role of money economy and, unlike other GCC countries, be published in Gulf Times examining to exchange companies, which provide a sig- it is less leveraged, has fewer special flows what extent the banking sector has been nificant service to the expatriate community, or mass tourism, and hence is less inte- successful in aiding the diversification of the will also be investigated. An analysis would grated in the global economy, putting it in a economy. not be complete without detailing the devel- stronger position in this current challeng- These articles will delve into the history opment and role of the Qatar Central Bank ing financial environment. An essential part of this policy has been and development of the financial system by as the ultimate institution responsible for However, this high dependency on rev- to encourage and support the development enquiring into its evolution and structure, the banking system and the financial system enues from the hydrocarbon industry has of its banking system and use it as a channel the economic performance of the system of the country in general. pushed the government to pursue a vigor- through which liquidity is provided to the and the relative positioning of the various ous policy of diversification to alleviate the private sector and the emerging businesses participants, as well as the challenges facing zDr Abdulaziz A al-Ghorairi is senior pressure of depending entirely on that one in the country, away from the oil and gas the system. vice-president and chief economist, sector. sectors. Sectors that were barely on the This will be followed by a discussion of Commercial Bank

Qatar SMEs to get global Qatar’s first private bank Commercial Bank has signed a Memorandum of Understanding (MoU) with Bancomext, a Mexican national development bank in Doha recently. The signing comes against the background of high-level visits between Qatar and Mexico and the strengthening of diplomatic and bilateral ties between the two nations. Levels of trade between Qatar and Mexico have almost exposure through QDB doubled over the past four years and continue to grow, with established agreements in the areas of aviation, technical support, youth cooperation, banking, and trade associations. The MoU provides a framework for future cooperation between the two banks and collaboration for projects in Qatar involving Mexican enterprises, or for projects in Mexico involving Qatari enterprises. With Bancomext being a leading ‘Franchise Project’ trade finance bank in Mexico, greater cooperation under the MoU will help ease trade flows between the two countries By Peter Alagos bank come up with a number for the benefit of both nations and the customers of each Business Reporter technical, fi nancial evaluations, bank. Picture shows Commercial Bank CEO Abdullah Saleh and legal advisories to help al-Raisi concluding the agreement with a senior Bancomext SMEs enter the international executive. mall and medium-sized market.” enterprises (SMEs) in Asked to identify the fi ve SQatar now have the op- countries where the shortlisted portunity to penetrate the in- SMEs will get international ex- ternational market through Qa- posure, al-Kubaisi said QDB tar Development Bank’s (QDB) “will not impose a particular “Franchise Project,” the bank’s market onto the entrepreneur.” chief executive offi cer said. “The fi ve countries will be Speaking to reporters at the based on the preference of the QDB headquarters yesterday, entrepreneur or the franchisor. QDB CEO Abdulaziz bin Nasser We will help the local companies al-Khalifa said interested SMEs develop the franchise model and could register in the Franchise then we will bring them to inter- Project through the bank’s web- national franchise exhibitions site. The registration process related to their businesses,” al- will start today (January 25) and Kubaisi told Gulf Times. will run for one week. “Based on their exposure to During the registration proc- Al-Khalifa and other off icials explain QDB’s Franchise Project to reporters. PICTURE: Othman al-Samarraee these global franchise exhibi- Al-Sowaidi (centre) shakes hands with Lorenzo Simonelli, ess, SME owners must take the tions, from their networking and president & CEO, GE Oil & Gas, after concluding the long-term online “Franchisability Quiz” to Project, a business must have operational and marketing tools tar. Our programme wants to B2B meetings, and on the fran- agreement between the two companies. Also in the picture is determine if they qualify for the 51% Qatari ownership, in opera- to give local Qatari brands the do the opposite. The Franchise chisor’s appetite, they will then Ahmed Rahimi, Qafco maintenance operations manager. next stages of assessment. tion for a minimum of one year, chance to expand globally. Project aims to take diff erent decide which country they want “There are several stages ap- and must add value to the econ- He also stressed that the Fran- Qatari brands and send them to to penetrate,” he explained. plicants need to go through omy, education, manufacturing chise Project was the product of an international platform.” Asked what other sectors oth- to benefi t from the Franchise and services, and food and bev- a study conducted by QDB and “There is a misconception er than the F&B industry are vi- Project. These include evaluat- erage (F&B) sectors. international advisers in the that franchising is a business able for international franchise, ing a company’s readiness, to Al-Khalifa also said out of franchising industry. model that is only used in the al-Kubaisi said: “Based on the GE Oil & Gas, Qafco discussing the next steps and the qualifi ed SMEs, QDB will QDB executive director of Ad- food and beverage sector. But the study we have done, QDB has requirements, and creating shortlist 10 businesses, which visory Services Hamad Khamis concept could also be applied to seen franchises for petrol sta- evaluation reports to pinpoint will receive international ex- al-Kubaisi said: “In the last few other sectors as well,” al-Kubaisi tions, manufacturing, clinics, in gas turbines’ development areas,” al-Khalifa posure in fi ve countries. Over years, QDB has seen many en- said. medical and wellness centres, explained. the next three years, QDB will trepreneurs who want to bring He added: “QDB has also spas, and gyms, and none of To be eligible for the Franchise provide legal consultations, and various franchise brands to Qa- consulted experts to help the them are related to F&B.” maintenance deal

E Oil & Gas yesterday localised expertise and support said its Downstream that GE brings.” GTechnology Solu- Rami Qasem, President & tions (DTS) business had been CEO, GE Oil & Gas for the Mid- Gulf’s proposed 5% VAT may translate awarded a 15-year technical de- dle East, North Africa and Tur- velopment partnership agree- key, said: “Installing the fi rst ment by Qatar Fertiliser Com- Extendor Combustion Supply pany (Qafco). kit in the region at Qafco dem- In this strategic agreement, onstrates our commitment to into more than 10% hit on net income: EY DTS will bring GE Oil & Gas deliver the best-in-class tech- competencies to mark the fi rst nology solution and underlines he Gulf countries’ proposed 5% val- pected to adopt at least some of the OECD regional installation of its ad- the long-term partnership ue added tax (VAT) may translate as recommendations directly. This will aff ect vanced ‘32 K Extendor Com- between GE and Qafco, which Tmore than a 10% hit on net income, future information reporting in Qatar, if bustion System’ that will en- extends for 40 years. The com- unless tax effi ciencies are improved, ac- not the way that taxable income is deter- able Qafco to strengthen the prehensive upgrade, repairing cording to Ernst and Young (EY). mined,” according to Marcel Kerkvliet, In- operational effi ciency of its gas and maintenance, led by our “A 5% rate may not sound like a lot, but ternational Tax Partner, EY Qatar. turbines. Qatar-based team, will support if it ends up as an additional cost on pur- However, even if none of the BEPS rec- GE Oil & Gas will supply the Qafco by signifi cantly reduc- chases because a VAT structure is inef- ommendations are adopted, other coun- parts for the project with the ing the combustion component fi cient, it’s going to hurt much more than tries are likely to expect their investors fi rst installation set for 2017, wear & tear of the turbines and a 10% tax on net income,” Finbarr Sexton, to be more accountable for the amount while modifi cation, repair and increasing the meantime be- Mena (Middle East and North Africa) In- of profi ts they are reporting in Qatar, he fi eld services will be provided tween maintenance.” direct Tax Leader, EY, said. said. through Qatar-based experts. The new agreement builds With the likely changes on the horizon, “We are in a period where we need to GE Oil & Gas has an installed on earlier long-term service now would be a good time to review cor- wait and see exactly how tax authorities base of six FR6 gas turbines, contract signed between GE porate structures for tax effi ciency, to see globally will deal with the OECD’s recom- some 31 centrifugal compres- Oil & Gas DTS and Qafco to whether tax treaties are being utilised ef- mendations. The OECD has no infl uence sors, 16 steam turbines and 16 optimise the performance of fectively and the supply chain will work well over individual governments, so we will pumps across Qafco plants. The its plant in Mesaieed last year, if VAT is introduced, he said yesterday at a see a lot of diff erent responses,” Sexton agreement will help in scaling- further underlining GE’s locali- seminar. opined. up the operational effi ciency sation commitment. “The developments will also pose chal- Paul Karamanoukian, Tax Partner, EY of the gas turbines, adding to Qatar is one of the important lenges to tax administration. Tax au- Qatar, said for multinationals, tax was no improved plant operations and markets of GE in the Middle East thorities may need further resources and longer a game of just complying with reg- higher levels of productivity. region, where the company has training to deal with ever more complex The EY Qatar Tax team. Paul Karamanoukian, tax partner, EY Qatar, said for ulations set by each local tax administra- Qafco chief executive of- been playing a key role in energy taxation rules and a growing taxpayer multinationals, tax was no longer a game of just complying with regulations set by each tion; investors need a global focus. fi cer Khalifa A al-Sowaidi said, infrastructure development in- population,” he said. local tax administration; investors need a global focus. “If a subsidiary reports a high level of “We seek advanced solutions cluding power, water and oil & Highlighting that taxation is likely net profi t in Qatar, for example, the local and on-ground support to gas for nearly four decades. to become a “more prominent business “If taxes have resulted, the rates have the 1990s, Organisation for Economic Co- tax authorities would likely not raise any strengthen effi ciency and op- The Qatar Service Centre of concern” across the Middle East; EY said been low and have not had a large impact. operation and Development (OECD) initi- concerns. But once country-by-country timise resource use across our GE Oil & Gas in Ras Laff an is a while low corporate tax rates will probably Compared to other parts of the world, the ated a project on harmful tax competition. reporting occurs in other jurisdictions, plants. To achieve consistently center of excellence that serves remain, VAT seems likely to be introduced Middle East has been a tax paradise. How- Ultimately, the OECD has recognised a tax offi cial in another country might high levels of productivity, it as a technology hub for the re- within the next few years. ever it now seems clear that there will be that there is nothing inherently wrong if a look at that profi t level and ask whether is important that we extend gion. Traditionally, tax has been a fairly low- some developments that make tax a more country decides to adopt a low-tax frame- that means that the group member in his maintenance intervals through Today, through three offi ces key consideration for investors in the Mid- topical agenda in the Middle East,” he add- work. However, the 15 recommendations country is underpaying tax as a result,” he proven technology. and over 300 employees, GE dle East. Corporate tax rates are low, if tax is ed. that the OECD made in its Base Erosion said. GE Oil & Gas has been a long- serves the energy, water tech- imposed at all. Expatriate labour is subject EY said some of the larger tax challenges and Profi t Shifting (BEPS) reports last year It will become much more important to term partner, and with the new nologies and healthcare busi- to neither tax nor social security and inves- investors may face in the Middle East de- are expected to change the taxation land- ensure that fi nancial results can be dem- solution that is implemented at nesses, which contribute to tors have paid limited regard to establishing rive not from local developments but the scape. onstrated to align with the realities of each Qafco for the fi rst time in the the overall economic and social effi cient tax structures, Sexton said. way that tax is evolving internationally. In “The Qatar Ministry of Finance is ex- group member’s operations, he added. region, we also gain from the growth of the country.