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Tuesday, August 20, 2019 Dhul-Hijja 19, 1440 AH

TRADE WAR: Page 16 GULF TIMES Trump says US is talking with China but BUSINESS not ready for a deal Qatar financial resources to remain strong, public finances solid: Euler Hermes

By Pratap John said Qatar’s current account rebounded expects a similar outcome for the year as “Thanks to a huge stock of assets in prices from mid-2014 to 2017 pushed to remain above that threshold in 2019- Business Editor to a surplus as early as 2017 (+3.8% of a whole. Mining and quarrying continued its sovereign wealth fund, the Qatar the annual fiscal account into deficit in 2020. GDP) from a deficit in 2016 (-5.5% of to contract in Q1-Q3 2018, by -2% y-o-y, Investment Authority, Qatar has been 2016-2017, it noted. However, Qatar will remain a large net GDP) after 17 years of continued large although the decline narrowed to just able to avoid an economic crisis. A As the oil price recovered in 2018 to an external creditor thanks to the huge Qatar’s financial resources will remain surpluses. -0.1% y-o-y in third quarter last year, swift diversification of foreign trade average $72 for a barrel (for benchmark foreign-asset position in the QIA, it said. strong, insurance major and researcher For 2018-2020, Euler Hermes has thanks to “increased” oil output. relationships and trade routes was Brent), well above Qatar’s fiscal Qatar’s inflation has been forecast to Euler Hermes said and noted that forecast annual surpluses between 5% Meanwhile, the non-mining and also helpful. Shipments of natural breakeven point estimated at $60, the rise from an average 0.2% in 2018 to the combined foreign exchange (FX) and 10% of GDP. quarrying activities rose by +5.7% y-o-y gas and oil, accounting for almost fiscal account moved back into a small a still moderate 1.5% or so in 2019. It reserves of the Qatar Central Bank The researcher has forecast full-year between Q1 and Q3 of 2018, thanks to 85% of Qatar’s exports, have broadly surplus. should accelerate further to about 3% and the Qatar Investment Authority GDP growth of 2.7% in 2019. The healthy growth in the manufacturing continued despite some neighbouring “We expect similar surpluses in 2019- on average in 2020 provided a 5% VAT represent well over 150% of the tentative forecast for 2020 is 2.5%. (+10%) and construction (+14%) sectors. countrys’ ban on Qatari-linked vessels 2020,” Euler Hermes said. is imposed that year. country’s annual GDP and cover more In 2018, Qatar’s GDP growth recovered On the blockade on Qatar, Euler Hermes from its waters,” Euler Hermes said. Meanwhile, the country’s public debt Euler Hermes expects the riyal peg to than 50 months of its imports. to an average 2% year-on-year (y-o-y) in said it “had an immediate but short-lived After 16 years of continued large has risen from 25% of GDP in 2014 to the dollar to hold as the QCB has large In an economic update, Euler Hermes the first three quarters and Euler Hermes impact” on the Qatari economy. surpluses, persistent low oil and gas more than 50% in 2018 and is forecast FX reserves to support the currency.

US set to ease Huawei sanctions Robust private sector for another 90 days, says Ross

Bloomberg credit off take boosts Tokyo/New York/Washington

he US will extend for another 90 days a narrow set of exemptions that had protected rural networks and Tother US customers from a ban on doing business with China’s Huawei Technologies Co, Commerce Secre- tary Wilbur Ross said yesterday. Qatar banking assets Some telecom companies in the US are “dependent” on Huawei, and thus a 90-day reprieve was deemed appro- By Santhosh V Perumal ued into the fi rst quarter of this priate, Ross said in an interview with Fox Business’s Maria Business Reporter year. Moreover, the normalisation Bartiromo. of the US Fed rates, announced in “We’re giving them a little more time to wean themselves December 2015, increased volatil- off ,” he added. Ross said the next deadline will be around he impact of lower oil ity across global equity markets. November 19. He added that Commerce decided to place 46 prices on Qatar’s economy Following the US rate hike, Saudi more Huawei subsidiaries on its entity list. Tis likely to be “amelio- Arabia, the UAE, Bahrain and Ku- The announcement doesn’t address the wider nation- rated” as non-hydrocarbons now wait also hiked their policy rates. al-security concerns about Huawei and answer the bigger constitute more than 65% of the “The Qatari market, which was question of whether US chip companies and other major economy, according to Qatar In- the best performing market in the suppliers will be allowed to sell parts to China. vestment Fund (QIF), the London GCC last year, clocked in a dismal US President Donald Trump over the weekend indicated Stock Exchange listed fund. performance, with losses only the US was “doing very well with China, and talking” but “With the non-hydrocarbon behind the Saudi market, which also suggested he wasn’t ready to sign a trade deal. sector now accounting for over was the worst performing market Stock futures extended gains in New York as investors in- 65% of real GDP (gross domes- in the region,” it said. terpreted the Huawei news as incremental progress toward tic product), the impact of lower During the fi rst half of 2016, the easing a trade war between the world’s two largest econo- hydrocarbon prices is likely to be performance of GCC markets was mies. ameliorated,” QIF chairman Nick mixed as Bahrain posted an 8% Huawei, China’s largest technology company by sales, Wilson said, adding Qatar’s non- decline, followed by Saudi Ara- has been at the heart of worsening tensions and been called hydrocarbon sector’s share is ex- bia (6%) and Qatar (5.2%); while a bargaining chip in thorny trade negotiations between pected to rise to 69% by 2017. Oman, Dubai and Abu Dhabi Washington and Beijing. Trump had said he anticipated Highlighting that during the 12 gained 6.9%, 5.1% and 4.4% re- talking with Chinese President Xi Jinping “very soon” and months, the entire GCC (Gulf Co- spectively. the Huawei move may sweeten the tone of those discus- operation Council) region was Despite reporting dismal per- sions. hit by lower oil prices and bear- formance last year, the Qatar Huawei, for its part, has been trying to carry on opera- ish sentiment and Qatar was no market has shown resilience tions in face of US sanctions on the sale of the vital tech- exception, he said despite these The credit portfolio growth led the total assets of commercial banks in Qatar to register about 5% increase to compared to other GCC peers nology. The company this month announced its in-house headwinds, Qatar has not only QR1.44tn at the end of June, according to QCB figures. PICTURE: Nasar K Moidheen over a two-year time frame, ac- HarmonyOS, an open-source operating system that could grown its economy but continued cording to QIF. one day serve as a replacement for Google Inc’s Android if to make remarkable progress in QIF’s investment adviser be- ing scheduled ahead of the 2022 The GCC index fell 20.2%, For the period ending 24 its access to that software is curtailed. diversifying. lieves that the underperform- FIFA World Cup, said QIF, which weighed down by lower oil prices, months till June 2016, the Qa- Without Android or the numerous American silicon, Expecting Qatar to continue ance of the Qatari market over has invested in 23 companies, in- continued regional geopolitical tari market fell 14% and was the technology and consultancy suppliers that Huawei does to grow at around 3.7% in 2016 2015-16 is “overdone” and will cluding 19 in Qatar and four in the tensions and concerns about glo- second best performer after Abu business with, many of its most promising product lines and 2017, the near to long-term bounce back to perform well in UAE. bal economic growth, said QIF, Dhabi (down 1.2%). would either cease their rapid growth or be thwarted en- growth prospects should remain the medium-to-long term, driven In the 12 months to June 30, whose net asset value fell 20.8%. During this period, the price of tirely. healthy driven by a strong infra- by “strong macroeconomic fun- 2016, returns from all the GCC In the latter half of (calendar a barrel of Brent crude fell 55.8%. The US Commerce Department previously granted a structure pipeline, fi scal spend- damentals and superior growth markets were negative, charac- year) 2015, global equity markets Over the same period, Saudi Ara- three-month temporary licence to Huawei’s US customers ing and supportive demographics, prospects”. terised by steep market volatil- received a twin blow from sur- bian market fell 31.7%, Kuwait shortly after the Trump administration blacklisted the Chi- he said, quoting a report of its in- Qatar is committed to diversi- ity, said QIF, which posted a net prise devaluation of the Chinese 23%, and Bahrain and Dubai mar- nese company. That allowed telecom carriers in rural areas vestment adviser, which is Qatar fying the economy with $200bn loss of $37.9mn for the year ended currency and an extended slump kets dropped 21.7% and 16%, re- to continue using Huawei equipment and Google to provide Insurance Company. infrastructure investment be- June 30, 2016. in global oil prices which contin- spectively. only key Android security updates to Huawei phones.

Turkish central bank lowers required reserve ratios for banks with high loan growth

Reuters The move marks a shift towards linking reserve Domestic demand has weakened significantly, leading Istanbul requirement to growth in loans. to lower loan growth in banks and a fall in imports, The new measure excludes deposits and participa- while exports rose. That has narrowed Turkey’s cur- tion funds with one year or longer maturity and other rent account deficit, which had previously been one of Turkey’s central bank said yesterday that it was liabilities with longer than a three-year maturity, the the main concerns of investors. reducing the required reserves ratio for banks with bank said. William Jackson, chief emerging markets economist loan growth rates above 10% and raising the return on The central bank also said it had raised the interest at Capital Economics, said yesterday’s move worried those reserves. rate on lira-denominated required reserves to 15% investors because high rates of loan growth during re- It said the move was aimed at ensuring that reserve from 13% for banks with a 10%-20% loan growth rate, cent Turkish economic recoveries had lead to higher requirements were used more flexibly and eff ec- and set it at 5% for other banks. imports and a widening current account deficit. tively. The lira weakened following the announcement, as “The move essentially reduces the required reserve The lira weakened after the announcement as econo- investors interpreted the move as encouraging banks ratios for banks with higher loan growth. I think it is mists said rapid loan growth could fuel imports and to speed up expansion of their loans. worrying, if we consider that what is needed is weak swell the current account deficit, long a headache for It stood at 5.6560 against the dollar at 1502 GMT, domestic demand and growth lead by exports,” energy import-dependent Turkey. weakening from around 5.5990 before the announce- Jackson said. For banks with a loan growth rate of 10%-20%, the ment. The government has taken measures in recent central bank lowered the reserve requirement ratio Earlier, it declined as far as 5.6640, it weakest level months to boost loan growth in state banks. for deposits of up to a 3-month maturity to 2% from since July 29. The loan growth rate will be calculated in each 7% previously. Following a currency crisis that wiped nearly 30% of reserve requirement period and banks within the 10%- The logo of Turkey’s central bank is pictured at the entrance to its headquarters in It lowered the ratio to 2% for deposits of up to a the lira’s value against the dollar last year, Turkey’s 20% rate will be subject to the related requirements Ankara (file). The bank said the latest move was aimed at ensuring that reserve 6-month maturity from 4%. economy tipped into a recession. for the following three months, the central bank said. requirements were used more flexibly and effectively. Gulf Times 2 Tuesday, August 20, 2019 BUSINESS

Iranian crude tanker leaves Gibraltar waters: What happens next?

Bloomberg changed its name to Adrian Darya 1 narrower than that applicable in the from the ship, it is now heading for sail to Syria. The most likely course to pass through the Suez Canal if it is London and is now sailing under the Iranian US.” the small Greek port of Kalamata. of action is for the ship to offload more than about half full. flag. It was previously named Grace 1 Is the vessel still carrying This probably won’t be its final its cargo onto smaller vessels in Even if it is physically able to pass and flew the flag of Panama. Iranian crude? destination, as the port is too small to a process known as a ship-to-ship through the canal, that route poses The Iranian oil tanker impounded off Why did Gibraltar allow the accommodate a ship the size of the transfer. Those smaller tankers would the risk that the vessel could be Gibraltar since July 4 set sail on Sunday ship to leave? Yes, it appears to be. The draft of the Adrian Darya 1. Oil tankers sometimes then deliver the cargo to its final seized by Egypt at the request after local authorities rejected a US bid ship – how deep it is sitting in the water anchor outside the port to stock up destination. Before doing that, the of the US. While Iranian tankers to detain the vessel. The supertanker The government of Gibraltar says – is still reported as being 22.1 metres, on provisions or change crew, but Adrian Darya 1 would probably switch continue to pass through the canal has been renamed and reflagged European Union regulations didn’t which indicates that its full cargo of they cannot take on fuel there. Port off the transponder that signals its into the Mediterranean, some have and is now heading east into the allow it to seek a court order to seize about 2mn barrels of crude oil is on authorities at Kalamata haven’t been position and “go dark.” This may not been prevented from making the Mediterranean. Where it will go from the tanker, which the US accuses of board. The draft is manually entered by informed of the ship’s intention to be enough to hide a ship that has journey. here and what will happen to its cargo breaching its sanctions by exporting the captain into the ship’s Automatic arrive at the port, according to the become so closely watched. Who will provide the ship remain unclear. The US has threatened Iranian oil. That’s because of Identification System, so it could be acting harbour master. Can the vessel get back to with fuel and provisions? sanctions against any party dealing “diff erences in the sanctions regimes wrong, but there is no evidence that Where will the cargo end up? Iran? with the vessel. applicable to Iran in the EU and the the cargo was discharged while the Obtaining fuel and provisions could Where is the ship now? US,” according to a statement from vessel was anchored off Gibraltar. It remains unclear where the crude The ship cannot get back to Iran if it prove diff icult for the Adrian Darya the Gibraltar government. “The EU Where is the ship heading? on the Adrian Darya 1 will end up. Iran continues on its current course without 1. The US has threatened sanctions The tanker is now heading east, deeper sanctions regime against Iran – which gave assurances to the government first off loading at least some of its against anyone providing assistance to into the Mediterranean Sea. It has is applicable in Gibraltar – is much According to the vessel-tracking data of Gibraltar that the ship wouldn’t cargo. Its draft is too deep to allow it the ship.

Oman to host GPCA Fertilizer QSE extends gains to Convention in September

he Gulf Petrochemicals and Chemicals Associa- scale 9,800 levels tion (GPCA) announced that the 10th edition of the TGPCA Fertilizer Convention will be held in Muscat, By Santhosh V Perumal Oman from September 24 to 26. Business Reporter The convention will return to Muscat for the second con- secutive year, following one of its most successful editions to date, which attracted more than 300 delegates from the he Qatar Stock Exchange region and the world to network, exchange best practices yesterday scaled the 9,800 and learn about the latest technology and market trends in Tlevels, propelled by strong the fertiliser industry. buying interests especially in the Dr Abdulrahman Jawahery, president, GPIC, and vice real estate and transport sectors. chairman, GPCA, will deliver the opening remarks during There were strong buying inter- the event. ests from domestic funds and lo- The keynote address on day one will be presented by cal retail investors as the 20-stock Samir al-Abdrabbuh, vice chairman, Fertilizers Committee Qatar Index settled 0.24% higher (GPCA), while John Baff es, senior economist, World Bank to 9,806.13 points. (Development Prospects Group), will deliver the keynote Gulf individuals were also seen address the following day. marginally bullish in the mar- Other speakers include Ismahane Elouafi , director gen- ket, whose key benchmark closed eral, International Center for Biosaline Agriculture (ICBA), 4.79% lower year-to-date. and Khaled Mohammed al-Aboodi, managing director, Market capitalisation expanded SALIC. more than QR1bn, or 0.25%, to The agri-nutrient industry has undergone strategic con- QR539.15bn mainly owing to small solidation, underpinned by increased focus on innovation, and microcap segments. producing higher value-added products and capitalising on Islamic equities were seen the opportunities arising in key emerging markets which gaining faster than the main in- are driving demand for fertilisers globally. dex in the market, where foreign To address these trends, the GPCA Fertilizer Convention institutions turned profi t takers. will be held under the theme ‘Transformation-A New Era Trade turnover and volumes for the Agri-nutrients Industry’, and will cover a wide va- were on the increase in the bourse, riety of topics including food security in the Arabian Gulf where the banking and real estate region, technology trends and disruptions, strategies for sectors together accounted for growth, fertiliser market trends and producing enhanced more than 64% of the total volume. quality fertilisers, among others. The Total Return Index gained The fi rst day will include a workshop entitled ‘Hu- 0.24% to 18,044.11 points, the All man Capital: Making the Workforce Ready for the Future’, Share Index by 0.37% to 2,891.69 which will discuss diversity and inclusion in the fertiliser points and the Al Rayan Islamic industry, alongside a series of technical workshops, pro- Index (Price) by 0.26% to 2,240.56 viding further opportunities for delegates to learn about points. best global and regional practices from leading technology The realty index soared 2.11%, providers. followed by transport (1.3%), Dr Abdulwahab al-Sadoun, secretary general, GPCA banks and fi nancial services Strong buying interests from domestic funds and local retail investors helped the 20-stock Qatar Index to settle 0.24% higher to 9,806.13 points said, “Building on the success of last year’s edition, we are (0.29%) and insurance (0.13%); yesterday. PICTURE: Noushad Thekkayil. proud to be organising the 10th GPCA Fertilizer Convention whereas telecom, consumer goods for the second year in Oman. and industrials declined 0.55%, Local retail investors’ net buyers of QR4.32mn the previous The transport sector’s trade vol- There was a 53% plunge in the Over the years, the convention has positioned the Arabi- 0.42% and 0.1% respectively. buying increased consider- day. ume more than doubled to 4.72mn telecom sector’s trade volume to an Gulf in the driving seat of industry leadership and inno- Major gainers included Indus- ably to QR8.33mn compared to Gulf institutions’ net profi t stocks and value also more than 1.26mn stocks, 29% in value to vation, attracting thought leaders, senior industry experts tries Qatar, Barwa, Ezdan, Gulf QR0.35mn the previous day. booking strengthened infl uen- doubled to QR11.06mn on a 40% QR5.15mn and 2% in deals to 370. and decision makers to share valuable insight on fast-mov- Warehousing, Milaha, Nakilat, Gulf individuals turned net tially to QR9.95mn compared to increase in transactions to 268. The insurance sector’s trade ing industry topics. Commercial Bank and Salam In- buyers to the extent of QR0.61mn QR1.64mn on August 18. The banks and fi nancial servic- volume tanked 46% to 1.22mn “We will once again showcase our industry’s achieve- ternational Investment; even as against net sellers of QR1.84mn Total trade volume rose 4% to es sector saw a 26% surge in trade shares, value by 45% to QR3.24mn ments to a diverse international audience and share key Gulf International Services, Qatar on August 18. 44.58mn shares, value by 66% to volume to 14.67mn shares, more and transactions by 12% to 334. learnings from across the globe on how to meet the chal- First Bank, Woqod, Qatar Oman Non-Qatari individuals were QR142.71mn and transaction by than tripling value to QR82.39mn The industrials sector reported lenges aff ecting the market head on. Addressing global Investment, Mannai Corporation, also net buyers to the tune of 43% to 5,190. on more-than-doubled deals to a 28% shrinkage in trade volume food security remains at the top of the industry’s agenda, Al Khaleej Takaful and Vodafone QR0.23mn compared with net The real estate sector’s trade 1,967. to 8.15mn equities and 26% in and the deployment of innovative technologies and digi- Qatar were among the losers. sellers of QR0.94mn on Sun- volume more than doubled to However, the consumer goods’ value to QR22.36mn but on an 11% talisation along the entire value chain will prove especially Domestic institutions day. 13.96mn equities and value also trade volume more plummeted jump in deals to 1,419. important to meet this challenging goal. I look forward to turned net buyers to the tune of However, non-Qatari institu- more than doubled to QR15.02mn 92% to 0.6mn equities, value by In the debt market, there was welcoming stakeholders from across the board to exchange QR21.59mn against net sellers of tions turned net sellers to the on more-than-doubled deals to 58% to QR3.5mn and transactions no trading of treasury bills and valuable ideas and learn from one another at this prestig- QR0.26mn on Sunday. extent of QR20.8mn against net 683. by 37% to 149. sovereign bonds. ious industry event.” Saudi oil fields are in the firing line as Gulf conflicts rage

Bloomberg mum sustainable capacity of Ghawar in  Crude grade produced: Arab Extra Light. Zuluf Dubai the April prospectus showed output was  This is the field which was targeted considerably lower than the 5mn barrels a most recently by the Houthi militia from  Production capacity: 825,000 barrels day many market analysts assumed it was Yemen in an attack using bomb-laden a day. Saudi Arabia’s oil fields, responsible for producing. drones.  Crude Grade Produced: Arab Medium. almost a 10th of global crude production, Khurais  One of Aramco’s most remote, the com-  Aramco struck oil at the Dammam are in the firing line. Recently, they’ve pany constructed roads and an airstrip No 7 well in 1938 when it was still a joint been targeted by air, sea and land.  Production capacity: 1.45mn barrels a in the vast Rub Al-Khali desert, an area venture of American companies. Flaring tensions in the Arabian Gulf have day. known as the Empty Quarter, in order to  The Damman field, located underneath seen some of the world’s biggest crude  Crude grade produced: Arab Light. bring the equipment needed to build the Aramco’s present headquarters campus, deposits, along with processing and  Discovered in 1957, Aramco completed facility across towering sand dunes. is still pumping and the company is cur- transport infrastructure and vessels, an expansion plan on the field last year to  Discovered in 1968, challenges, includ- rently expanding drilling and production targeted by explosives-laden drones and raise capacity from about 1.2mn barrels ing the dunes standing more than 300m at the deposit. bombings. a day. (984ft) high and summer temperatures  The Marjan and Berri fields are also The threats to the kingdom’s crude Safaniyah of almost 50 degrees Celsius (122 degrees undergoing expansion projects that will production and infrastructure shine a light Flames burn off at an oil processing facility in Saudi Aramco’s oilfield in the Rub’ Fahrenheit) delayed crude production add 550,000 barrels a day of new capac- on the risk to global oil supply given that Al-Khali (Empty Quarter) desert in Shaybah, Saudi Arabia (file). The threats to  Production capacity: 1.3mn barrels a until 1998; output later expanded. ity by 2023, Khalid al-Dabbagh, senior vice state-owned Saudi Aramco is the world’s the kingdom’s crude production and infrastructure shine a light on the risk to day.  The field holds about 14.3bn barrels and president for finance, said on a conference largest exporter. Saudi Arabia’s more than global oil supply.  Crude grade produced: Arab Heavy. is linked to the main export terminals by a call this month. 100 crude deposits contain some 257bn Ghawar  Found in 1951 and lying mainly beneath 645-km (401 miles) pipeline. Western Fields barrels of proved oil reserves, the world’s global markets. About three quarters of the Gulf waters. Manifa biggest conventional finds. Aramco’s daily output come from four  Production capacity: 3.8mn barrels a  Safaniyah is, according to Aramco, the  Aramco is drilling for oil and natural gas Saudi Arabian Oil Co, as Aramco is of- main fields: Ghawar, Khurais, Safaniyah day. world’s largest conventional off shore  Production capacity: 900,000 barrels at fields in the Red Sea. ficially known, is able to pump as much and Shaybah. Those main deposits are  Crude grade produced: Arab Light. oilfield. a day.  The company is looking for gas at un- as 12mn barrels a day. The company in the eastern part of the country, either  The world’s largest conventional on-  Safaniyah stretches into the Neutral  Crude grade produced: Arab Heavy. conventional fields in the northwest of the produced 10mn barrels daily during the tucked between dunes and below vast shore field in terms of reserves and more Zone, an area shared by Saudi Arabia and  Aramco expanded the off shore field kingdom to meet regional power demand. first half of the year, keeping as a policy expanses of desert or sitting underneath than 200km (124 miles) long, according Kuwait, with the portion of the field lo- this decade, bringing new oil supplies to Aramco serves most of its western some 2mn barrels of capacity unused to the waters of the Gulf. Most of that crude to Aramco. cated there known as Khafji; Neutral Zone markets. refineries via the 5mn-barrel-a-day East- allow it to react to any supply shortages. passes through the Strait of Hormuz, the  Discovered in 1948 by an American ge- output of about 500,000 barrels a day has  To develop Manifa, the company built West pipeline, running from deposits in Aramco exports 7mn barrels of crude a narrow shipping chokepoint leading out ologist, Ghawar has produced more than been halted for about four years. an archipelago of causeways connect- the Gulf area to Yanbu on the Red Sea; day, more than any other company. This of the Gulf. half the crude that Aramco has pumped, Shaybah ing man-made drilling islands to support the company is expanding the link to be makes its role as a global swing producer Below are descriptions of the main according to an April bond prospectus. equipment while allowing normal flows of able to transport 7mn barrels a day by and the security of its oil fields vital to fields.  The company’s disclosure of the maxi-  Production capacity: 1mn barrels a day. currents and sea life. September. Gulf Times Tuesday, August 20, 2019 3 BUSINESS

Sensex rises, tracking regional peers amid Strong Wall St, fresh trade optimism

Bloomberg, Reuters “A stimulus is expected to be Mumbai announced which can reverse the markets in the short term,” said Jimeet Modi, founder and CEO of India’s benchmark equity index SAMCO Securities. hopes for trade talks rose tracking regional counter- Among other Sensex stocks, parts higher, amid optimism over Tech Mahindra, Axis Bank, L&T, RIL progress in trade talks between and ICICI Bank rose between 1% the US and China. and 2%. The S&P BSE Sensex climbed Global markets were mostly 0.1% to 37,402.49 points in higher today on expectations that Mumbai, after rising nearly 1% major economies would look to boost Asian markets earlier in the day. The NSE Nifty prop up stalling growth with fresh 50 Index also ended up 0.1%. Both stimulus measures. This eased AFP thorities will unveil stimulus to measures retreated last week as pressure on bonds and dampen- Hong Kong limit any impact. investors mulled the outlook for ing demand for perceived safe- Germany’s Der Spiegel company earnings and economic havens such as gold. said Angela Merkel’s govern- growth. Meanwhile the rupee yesterday sian and European mar- ment was ready to boost pub- Volatility has been surging strengthened marginally against kets rallied yesterday fol- lic spending, while China an- for the last three weeks in the the US dollar, tracking gains in its Alowing a strong lead from nounced an interest rate reform absence of any concrete steps by Asian peers as traders assessed Wall Street and comments from that it said would lower bor- the government to revive slowing the US President Donald Trump’s Donald Trump’s top economic rowing costs for companies. demand. A gauge of swings based comments on trade talks with adviser hailing “positive” trade But the US is forecast to fall on Nifty 50 options climbed to China. talks with Chinese negotiators. into recession in the next two 16.7475 at the end of Friday from Having opened at 71.15 to a Optimism that central banks years, according to a survey re- 13.59 at the end of July. dollar, the domestic currency, in will provide fresh support to leased yesterday by the National “Investors continue to hope early deals, traded at 71.12 a dollar head off a global economic re- Association for Business Econ- that some government action compared with Friday’s close of cession has also given a much- omists. The economists are also is forthcoming,” said Prakash 71.16. So far this year, the unit has needed boost to regional equi- sceptical about a resolution to Pandey, the Delhi-based head of declined 2.3%. ties after last week’s sell-off , Trump’s trade wars, although research at Fairwealth Securities Trump has said the US was with eyes on an upcoming 64% said a “superfi cial agree- Ltd. “We expect the Nifty to stay “doing very well with China, and speech by Federal Reserve boss ment is possible”, NABE said. in a range of 10,860-11,200 in the talking!” but suggested he wasn’t Jerome Powell for clues about The report came just after week with chance of a break- ready to sign a trade deal, hours its plans. Trump pushed back against out dependent on government after his top economic adviser laid Investors were in an upbeat recession talk, saying: “I don’t measures.” Twelve of the 19 sector out a potential timeline for the mood after White House chief think we’re having a recession. sub-indexes compiled by BSE resumption of substantive discus- economic adviser Larry Kudlow We’re doing tremendously Ltd advanced, led by a gauge of sions with Beijing. said that if talks between depu- well. Our consumers are rich.” consumer durable companies. The 10-year government bond ties from Beijing and Washing- “I gave a tremendous tax cut, Sun Pharmaceutical Industries yield was at 6.553% compared ton went well and “we can have and they’re loaded up with Ltd was the top gainer on the with its previous close of 6.545%. a substantive renewal of nego- money. Sensex, adding 2.7%, and Reli- In pre-trade, the benchmark tiations” then “we are planning They’re buying. And most ance Industries Ltd provided the equity index Sensex was up 0.6% to have China come to the USA An external view of the Hong Kong Stock Exchange building. The Hang Seng index closed up 2.2% to economists actually say that biggest boost with a 1.1% rise; Yes at 37571.76 points. So far this year, and meet with our principals 26,291.84 points yesterday. we’re not going to have a reces- Bank Ltd fell the most with a 3.5% the index has risen 4%. to continue the negotiations”. sion. But the rest of the world is decline. In the year so far, foreign inves- He added that high-level phone reduce global warming, but it is by three days of protests in the about the global outlook and not doing well like we’re doing.” Indian markets have had a tors have bought nearly $8.12bn talks last week were “a lot more an elegant solution to reducing city passing off peacefully. particularly the US economy af- And Kudlow insisted that the rocky journey in recent months, in Indian equities and $2.83bn in positive than has been report- the pain of tariff s on the Ameri- Shanghai ended up 2.1% and ter yields on 10-year US Treas- outlook was far from gloomy. with the BSE Sensex falling about debt. ed”. Trump provided further can consumer of China and Tokyo added 0.7%. ury bonds slid last week below “Let’s not be afraid of opti- 7% since a record high in June, Other Asian currencies also cause for hope by tweeting: “We may give equity markets a small Sydney climbed 1%, Singa- that of the two-year note, while mism,” he said, adding that “I amid slowing economic growth. traded higher today, with the Indo- are doing very well with China, boost as we start the week,” pore put on 0.6% and Seoul the 30-year yield fell below 2% sure don’t see a recession.” There are expectations that the nesian rupiah up 0.25%, Malaysian and talking!” said Jeff rey Halley, senior mar- jumped 0.7% with Wellington, for the fi rst time ever. In Tokyo, the Nikkei 225 government may soon announce ringgit 0.22%, Philippines peso Kudlow also raised the pros- ket analyst for Asia-Pacifi c at Taipei and Jakarta deep in posi- The so-called “inversion” — closed up 0.7% to 20,563.16 a stimulus package to arrest a 0.21%, Thai baht 0.19%, Taiwan pect of using cash taken from OANDA. tive territory. when short-term interest rates points; Hong Kong — Hang slowdown. dollar 0.05%. However, China higher tariff s on Chinese goods The remarks helped Asian In early trade London gained are higher than longer-term Seng ended up 2.2% to Finance Minister Nirmala Sith- Off shore was down 0.13%, while to pay for tax cuts. traders build on New York’s 0.9%, Frankfurt put on 1% and ones — is viewed as a harbinger 26,291.84 points and Shanghai araman this month held several Singapore dollar eased 0.07%. “This sort of recycling won’t rally. Hong Kong ended 2.2% Paris jumped 0.7%. There re- of recession. — Composite closed up 2.1% to meetings with industry execu- The dollar index, which meas- clear the oceans of plastic or higher with dealers also cheered mains a high level of concern Investors are hopeful that au- 2,883.10points yesterday. tives, who have called for stimulus ures the US currency’s strength measures, including tax rebates, against a basket of major curren- to support consumer demand and cies, was at 98.19, up 0.05% from private investment. its previous close of 98.142. EM currencies mostly weaken as trade worries linger

Reuters protests plunged Asia’s financial hub ‘stealth’ easing policy,” Jeff eries analysts tists adding pressure on currencies of net London into chaos. wrote in a note. oil importers. The Turkish lira fell about Main stock benchmarks in South Ko- The yuan, however, edged lower 0.2% and South Africa’s rand lost 0.6%, rea and Taiwan rose about 0.6%, while as trade concerns lingered after US while Russia’s rouble also fell 0.6% to hinese stocks rallied to two- share markets in emerging Europe also President Donald Trump said he was fresh six-month lows despite a recovery week highs yesterday after the gained on news of Germany’s govern- not yet ready to make a trade deal in prices of oil, its top export. Ccentral bank unveiled tweaks to ment readying fi scal measures to counter with China, hinting that he would like Investors will look for signs of fresh its interest rate setting, off ering hope a possible recession. to ongoing protests in Hong Kong re- weakness in Argentina’s peso when the to investors that major economies will The People’s Bank of China (PBoC) said solved first. currency opens for trading after ratings use stimulus measures to battle a global on Saturday it will improve the mecha- Financial markets have witnessed a agencies Fitch and Standard & Poor’s slowdown. nism used to establish the loan prime rate turbulent August as worries that a pro- downgraded the country’s sovereign debt The MSCI index of emerging market (LPR) from August, in a move to further longed US-China trade war will drive the rating on Friday, fl agging higher chances stocks rose 0.7%, as Beijing’s heavy- lower real interest rates for companies as global economy into recession, sparked of a default in the wake of a shock prima- weight indexes jumped over 2%. part of broader market reforms. a fl ight from risky assets such as stocks ry election result. Hong Kong-listed shares also made “This will succeed the original PBoC and developing world markets. The peso has lost nearly 20% of its similar gains as anti-government ‘daily fi x’ and force corporate lending Currencies were largely mixed, with value since the results handed a stunning The Bombay Stock Exchange building in Mumbai. The Sensex demonstrations entered the eleventh rates to follow market rates. rising oil prices after a weekend attack defeat for business-friendly president closed up 0.1% to 37,402.49 points yesterday. week, although were the calmest since To all intents and purposes it is a on a Saudi oil facility by Yemeni separa- Mauricio Macri. Safe-haven currencies out of favour on stimulus hopes Japan yields slide to 3-year low

Bloomberg Reuters ous escalation in the trade war. The US Commerce Tokyo Tokyo Department is expected to extend a reprieve given to Huawei that permits the Chinese firm to buy supplies from US firms so that it can service existing customers, apan’s 10-year bond yield slipped to the Safe-haven currencies such as the yen and Swiss franc two sources familiar with the situation told Reuters on lowest since July 2016, shrugging off an were under pressure yesterday as expectations that Friday. Jattempt by the central bank to stem its policymakers would unleash new stimulus eased im- However, President Donald Trump said on Sunday decline amid a global debt rally. New Zea- mediate concerns about a slowing global economy. he did not want the United States to do business with land’s benchmark rate also fell to a new Such hopes found support from the Chinese central Huawei for national security reasons, casting doubt record low. bank’s interest rate reforms over the weekend that over the decision. The JGB yield dropped two basis points are expected to lower corporate borrowing costs, and While a rejection for Huawei could easily fuel to minus 0.255%, as growing fears about reports of new fiscal stimulus in Germany. another bout of risk aversion, risk-sensitive currencies world growth and the US-China trade war However, investor optimism is likely to be capped appeared to have found some support for now. drive investors to haven assets. The Bank of ahead of a US decision on whether to continue to allow The dollar edged higher to 0.9795 Swiss franc, ap- Japan, widely seen as having a yield target China’s Huawei Technologies to buy supplies from proaching the highest in almost two weeks. range of about 20 basis points from zero for American companies. The euro also rose 0.2% to 1.0865 Swiss francs. the benchmark, cut its purchases of 5-to-10 “Huawei is a big test to see whether the current The Australian dollar drifted higher to 72.12 yen, on year bonds at Friday’s operations. risk-on mood will continue in the currency market,” course for its third day of gains. The world’s negative-yielding bonds have said Takuya Kanda, general manager of the research Gold, another safe-haven asset, fell 0.3% in the spot surged to a record $16.7tn, while a key part department at Gaitame.com Research Institute. market to $1,508.40 per ounce. of the US Treasury curve inverted this week, “There’s a sense of calm right now because the The People’s Bank of China unveiled a key interest signalling an expectation for the American stimulus story is supporting the dollar against safe- rate reform on Saturday to help steer borrowing costs economy to tip into a recession. With mar- havens, but I’m not sure how long this calm will last,” lower for companies and support a slowing economy kets pricing in further easing by major cen- he added. The dollar index, which measures the that has been hurt by the trade war with the United tral banks, investors including Janus Hend- greenback against six major currencies, was margin- States. In the onshore market, the yuan traded at erson are continuing to pile into debt. ally higher in Asia at 98.201, close to a two-week high 7.0447, little changed on the day. “BoJ’s action came as yields were getting New Zealand,” said Imre Speizer, head of ($282mn) from its last operation, its fi rst of 98.339 reached on Friday. In the off shore market, the dollar rose 0.2% to too low,” said Takafumi Yamawaki, head New Zealand strategy at Westpac Banking reduction since December. It has been Against the yen, the dollar was little changed at 7.0577 yuan. The details of Chinese stimulus came of local rates and FX research at JPMorgan Corp in Auckland. The nation’s central bank gradually tapering its outright bond pur- ¥106.37, near a one-week high of ¥106.98. The yen and after German media reported that the German Chase & Co in Tokyo. could cut rates by 25 basis points to 0.75% in chases, with the recent focus largely being the Swiss franc, both of which tend to be bought as a government may be open to running a fiscal deficit to “It is diffi cult for the BoJ to achieve November, he said. on steepening the yield curve. safe-haven during times of economic uncertainty, fell boost growth. Hopes for stimulus to help Germany’s everything, such as monetary expansion Treasury 30-year yield hit a record low “Global yields are sinking or ap- slightly on Monday versus other currencies. economy, which is on the brink of recession, also guideline, steepen yield curve, boost yield this week, while the 10-year fell below the proaching zero, adding momentum for Risk sentiment could improve further if Washington rose after Finance Minister Olaf Scholz suggested the levels and keep the 10-year range. 2-year rate. Thursday’s US retail sales fi g- Japanese investors to return to super- off ers some concessions to Huawei, which could make government is ready to spend. At some point, the BoJ will have to give up ures, which showed the consumer remains long Japanese government bonds,” Ka- a resolution of the US-China trade war more likely. The Scholz said on Sunday the global financial crisis something.” in fi ne form, barely had any market impact zuhiko Sano, chief strategist at Tokai US government blacklisted Huawei Technologies in in 2008 and 2009 cost Germany roughly €50bn New Zealand’s 10-year bond yield fell as with investors waiting on clarity about US- Tokyo Securities Co, wrote in a note May, accusing the world’s largest telecom equipment ($55.45bn), but Germany has the fiscal strength to much as 3 basis points to 0.98%, the fi rst China trade and the Federal Reserve policy before the operations. “Against this back- maker of espionage and intellectual property theft. spend a similar amount to counter any future eco- time it has dipped under 1%. outlook. drop, it’s unlikely that the drop in yields will The allegations, which Huawei denies, were a seri- nomic crisis. “Major global central banks are easing, The BoJ cut purchases in the key fi ve- stop even when the 10-year yield at minus and the fall in global yields will ripple to to-10 year maturity zone by ¥30bn 0.25% serves as a milestone.” Gulf Times 4 Tuesday, August 20, 2019 BUSINESS

Ex-Soros fund manager gathers oil CEO retirees to boost returns

Bloomberg stage and technology-focused invest- through the candidates who apply for since its inception, and is targeting a Goldman Sachs Group Inc and Soros lower than they’ve been on a histori- Houston ments, Leykum said. jobs, because we seem to know most of 20% net return for its limited partners, Fund Management LLC, created CSL cal basis.” To be sure, CSL has had a “The service businesses have to be them,” Gould said in an interview. Leykum said. Along with the former in 2008. Since oil prices first began to couple of stumbles along the way. It able to deliver more value than just The new focus on technology comes CEOs, including Pete Miller, who led fall from $100 a barrel five years ago, failed to close a deal announced in Oc- here do oilfi eld service com- having equipment on location,” Ley- at a time when oil servicers are being National Oilwell Varco Inc, the fi rm has Leykum has acquired a frack business tober for a pipelines-services company pany executives go when kum said in a telephone interview. asked by their exploration and pro- invested heavily over the past two years from Baker Hughes, a labs business that would have been led by Gould and Wthey retire? For several high- “There has to be specifi c infl uences duction customers to do more with to recruit top executives with a soft- from Weatherford International Plc, Krishna Shivram, the former treas- profi le CEOs, they head to Charles around data science, job recommenda- less, particularly as investors press for ware or digital background in hopes of and sold a frack-sand mine to Sch- urer of Schlumberger and interim CEO Leykum’s investment fi rm. tions, a consulting angle, and a build- greater returns. helping some of its smaller businesses lumberger. at Weatherford. And BJ Services, the Leykum, a former fund manager for up of data libraries.” Imran Kizilbash, And it’s also a time when smaller to compete with the big dogs. Leykum declined to disclose how frack company spun from Baker Hugh- billionaire George Soros, has drawn a former vice president who ran Sch- service companies are looking for “We are one of the few dedicated, many total companies CSL is invest- es, had to pull back on plans for an ini- Andrew Gould and Dave Lesar, the lumberger’s venture fund, and Vasu technology to help diff erentiate them exclusively focused funds on energy ed in. But they also include Ranger tial public off ering. former leaders at Schlumberger Ltd Guruswamy, who spent more than from the larger players. services and equipment,” Leykum said. Energy Services Inc, where Miller “It’s getting tougher every day,” and Halliburton Co, the world’s two three decades at the world’s biggest oil Leykum believes tapping CEOs “We felt it’s been most benefi cial to do serves as chairman, and PetroStar Gould said. “I will also say for private biggest oilfi eld services, onto his team services provider, will run the newly who ran companies worth a combined a deep dive and develop unparalleled Services LLC, where Lesar is chair- equity, eventually tough circumstanc- at CSL Capital Management LP. The formed CSL Ventures fund. $100bn as investors and partners gives expertise in a given subsector as op- man and Jim Brown, who ran Halli- es will bring opportunities.” James goal: Lean on their experience and Gould, who served as Schlumberg- CSL an edge as it prepares for a poten- posed to spreading across all the dif- burton’s Western Hemisphere busi- Wicklund, an investment banker at connections to help drive future in- er’s chief executive offi cer from 2003 tial wave of bankruptcies and mergers ferent segments of energy.” ness, is the CEO. Stephens Inc in Dallas who’s worked vestments. to 2011, said he saw CSL’s focus on ahead. CSL will be watching and waiting The uncertainty of today’s oil-serv- in the industry for more than four Leykum last week said two execu- oilfi eld services and equipment manu- “The next two years will continue to to pounce on commoditised service ices market means investors may be decades, said the stumbles should be tives who worked with Gould at Sch- facturing as a perfect fi t. One key ad- be more of a consolidation-restruc- assets, particularly artifi cial lift and forced to hold on to their assets for a chalked up to a challenging market en- lumberger are now also in the fold, set vantage he and the other former CEOs turing period” for oil service compa- production chemicals, according to while longer, said Osmar Abib, chair- vironment for oil services and not an to run a new venture aimed at boosting bring to the job, he said in an interview, nies, Leykum said. “This is a much Gould. “At the moment, the price is man of global energy at Credit Suisse indictment on CSL itself. technology in the oilfi eld. While the is the connections built up over years more demanding and challenging pe- not yet right,” he said. “But it might Group AG. “He’s got a who’s who of former CSL Energy Opportunities Fund III working in the sector. riod for investors and also for manage- well become right sometime over the “People need to be patient inves- CEOs,” Wicklund said. “Nobody has will invest broadly across the sector, a What “we can do, which is quite ment teams.” next 18 months.” tors to go in materially at this time,” attracted the level of senior-manage- ventures unit within it will target early advantageous in this market, is sort CSL has raised more than $1.7bn Leykum, who previously worked at he said. “But valuations are certainly ment investor that Charlie did.” Bond traders Europe IPOs at lowest are hostage to since 2013 crisis fuel a global gloom Bloomberg highs of the day after the US New York Treasury Department said it’s contemplating selling 50- and 100-year debt, going well be- reasuries investors yond the current three-dec- are casting a wary eye ade maximum. shrinking market fears Tabroad after a barrage of The 10-year Treasury yield sloppy overseas data roiled the ended on Friday at 1.55%, a Bloomberg look, especially as the US-China trade world’s biggest bond market. day after breaking below 1.5% London war escalates further. Fears of a worldwide slow- for the fi rst time since 2016. High stock valuations have led to “a down erupted last week fol- While it’s become “diffi cult gap between sellers’ expectations and lowing weak German and not to expect” that the bench- f the lament over a shrinking eq- buy-side’s comfort zone,” said Alexan- Chinese economic reports, mark rate will breach its record uity market has been momentarily dre Zaluski, head of ECM origination for sending benchmark 10-year low of 1.31%, this will depend Idrowned out in the US by the opening EMEA at Mizuho Financial Group Inc. Treasury yields briefl y below on global growth and trade bells rung by red-hot debutantes, it’s only “Institutional investors require some IPO the two-year rate for the fi rst developments, according to gotten louder on this side of the Atlantic. discount to participate in listings, in order time since 2007. The yield on BMO Capital Markets. Eighty-four companies have listed in to protect some upside.” 30-year Treasuries plunged “The chances of seeing Europe this year, the fewest in a decade In terms of the pipeline, low rates have through 2% to hit a record low, new record lows in 10-years by a mile, according to data compiled by empowered private equity and venture despite solid US infl ation and is largely dependent on the Bloomberg. By deal value, it’s the lowest capital funds to support companies for hotter-than-expected retail performance of risk assets, since 2013. Among those that debuted, longer. With private equity sitting atop sales. which are in turn beholden to Airtel Africa Plc and Finablr Plc fl opped. $240bn of cash as of the end of 2018, the Global forces are likely to the prospects for an easing of Among those that almost debuted, most since at least 2012, according to data remain in the driver’s seat for the global headwinds,” BMO Swiss Re AG last month pulled the IPO of provider Preqin, funds are ravenous for the $16tn Treasuries market in strategists led by Ian Lyngen its ReAssure Group Plc unit hours before new deals and hardly desperate for exits a week largely devoid of mean- wrote in a note Friday. “These its planned listing. Among those oft-ru- via the public market. ingful US data, according to issues will not be resolved an- moured to be close to an initial public of- Europe’s below-zero yields also mean Principal Global Investors’ ytime soon.” fering – anyone craving some Deliveroo? credit is ridiculously cheap, which – to Seema Shah. But there is one can’t-miss Blame it on investor jitters amid an esca- some extent – further substitutes the A lot of “panic” evident in event in the US in the week lating trade war. But structural changes need for fundraising via equities. the US bond market is be- ahead: the Federal Reserve’s also are causing both the supply of and To be sure, the concern about shrink- ing imported from China and annual symposium in Jackson demand for new equities to shrink: Cash- ing equity markets isn’t new. Citigroup Europe’s darkening economic Hole, Wyoming. rich funds are nursing startups for longer Inc strategist Robert Buckland has been picture, she said. For that rea- Fed Chairman Jerome Pow- without taking them public, and actively pounding the table on the theme for more son, Shah will be monitoring ell will take the stage on Fri- managed portfolios – the kind that will than a decade. And the case can be made upcoming euro-area infl ation day to deliver a speech titled buy into an IPO – are seeing outfl ows to that it’s bullish for investors who already and manufacturing reports “Challenges for Monetary the benefi t of index-tracking funds. own stocks: A shortage of new, high- for a clue on where yields are Policy.” For the stock-picking investors who quality listed companies should mean heading. Bond traders will listen for do have cash to invest, that means few- investors will value existing ones more “The global data is going reassurance from Powell that er quality, high-growth companies to research and analytics at Schroders. While ing requirements, IPOs are also less likely highly. to struggle to see an upward the Fed will support the econ- choose from. The equity market, at least similar gripes were once in vogue on Wall to see a Beyond Meat Inc-style pop upon And bankers stress that the downturn trend, so that’s going to con- omy and for any comments in theory, helps spread wealth by grow- Street, they’ve been quieted for now by a public trading, making them less lucra- could end quickly. Here’s the just-wait- tinue to put downward pres- from him on recent market ing savings. The fear is that as it shrivels boom in technology IPOs; even Sweden’s tive to an already shrinking pool of active for-it case: Eventually private equity will sure on yields, especially on turmoil, Shah said. and fast-growing companies delay their erstwhile unicorn, Spotify Technology investors. need exits. Eventually companies will list, that long-end,” said Shah, the The massive rally in longer- listings, mom-and-pop portfolios will be SA, listed in New York. “You have also seen a few deals trad- if markets stabilise. Float the right stock fi rm’s chief strategist. dated debt suggests that mar- stuff ed with less attractive investments. In Europe, there’s a more troubling vi- ing down and that means that hedge now and the buyers will still come – just “Until you get stronger data kets are sceptical that mon- Along with buyouts and mergers, cious cycle: Its lack of cool tech stocks has funds are reluctant to invest in IPOs,” said look at Trainline Plc and Network Inter- from Europe or China, those etary easing will be suffi cient dwindling new listings have led to a 29% contributed to chronic underperformance Adrian Lewis, head of EMEA equity capi- national Holdings Plc, both up more than global concerns are here to to boost growth and infl ation, drop in the number of publicly traded and fund outfl ows, which in turn weaken tal markets at HSBC Holdings Plc. “This 20% since their debuts this year. stay.” in her view. companies in developed Europe between demand for new listings. is putting even more pressure on long- But if it’s structural, if high-return in- Rates on 30-year bonds “Jackson Hole is going to 2000 and 2018, data compiled by Schro- “We are in a market that’s quite nar- onlys.” vestments are increasingly the domain of ended the week 22 basis points be important because, at this ders Plc show. row in terms of its leadership,” said Gareth While a market that has seen valuations private investors, the role of equity mar- lower at 2.03%, after hitting moment in time, there are so “If we take this to the extreme and all McCartney, global head of equity syndi- rise 9% this year might be reasonably kets as a conduit for spreading wealth may an all-time low of 1.91%. Re- many questions about the ef- of the high-quality, attractive businesses cate at UBS Group AG. “It’s not surprising hungry for new stocks, the reality is less be weakening. ports that Germany is con- fectiveness of central banks,” decide they don’t want to go public and that what you are seeing is a US market rosy than that, as Anheuser-Busch InBev “The ordinary saver gets the unat- sidering fi scal stimulus sent Shah said. that they’re just going to fund themselves that is booming on the back of tech, and NV and Swiss Re discovered when they tractive part and those who already have rates on long-bonds higher by “One of the reasons why with private money, then for the investors a quieter Europe because technology is a pulled their IPOs this year (the former is capital and wealth can invest in all these 6 basis points on Friday, de- there’s so much panic about a on the public market, they basically get nascent market in the region.” still mulling another attempt at fl oating exciting companies,” said Lamont at spite US consumer sentiment return to recession is because a rump of lower-quality, lower-growth Because European issuers fl oat a larger its Asian unit). It’s yet another sign of the Schroders. “You end up with potential for dropping to a seven-month they know the Fed is running companies,” said Duncan Lamont, head of portion of their equity, partly due to list- growing anxiety over the economic out- increased inequality.” low. The yield ended near its out of bullets.” Hedge funds cut bullish positions on oil as economy slows

By John Kemp the coast reduced congestion near the completion of new wells in the US shale London oilfields and supported local prices. fields, which should eventually result in Overall, fund managers have cut their slower production growth. net long position in the six major But consumption growth is decelerating Hedge funds cut their bullish positions contracts to only 543mn barrels, down even more quickly, with most major in petroleum last week for the second from a recent peak of 911mn in April and advanced economies and emerging week running as anxiety about the the lowest total since June and before markets now either in recession or on slowing global economy and oil that February. the brink of it. consumption trumped optimism over If “structural” long and short positions From a positioning perspective, the production restraint by Opec and its (minimum levels of long and short balance of risks has probably shifted allies. positions, which never change) are to the upside, with plenty of room for Hedge funds and other money excluded from the analysis, fund hedge fund managers to add more managers reduced their net long managers are running a dynamic net bullish long positions and cover existing position in the six major petroleum long of only 52mn barrels. bearish shorts. futures and options contracts by 35mn The hedge fund community now From a fundamental perspective, barrels in the week to August 13, having holds a basically neutral position on however, the balance of risks remains cut it by 25mn barrels the previous petroleum prices, with the global tilted to the downside, with the global week. economy replacing US sanctions economy losing momentum and oil Portfolio managers last week sold Brent against Iran and Venezuela as the consumption growth slackening. (37mn barrels), US gasoline (15mn), US dominant theme this year. If positive news emerges about the heating oil (9mn) and European gasoil Falling oil prices have prompted Saudi economy, oil prices are primed to rally, (4mn) as the consumption outlook Arabia and its allies in the Opec+ group but such news is sparse and prices deteriorated. to extend their production restraint remain under pressure. By contrast, funds bought NYMEX until at least the end of the first and ICE WTI (30mn barrels) as new quarter of 2020. Low prices are also  John Kemp is a Reuters market analyst. pipelines from the Permian Basin to forcing a slowdown in the drilling and The views expressed are his own. Gulf Times Tuesday, August 20, 2019 5 BUSINESS

Russians turn to credit to top Morgan Stanley forfeits role in up incomes

Bloomberg WeWork IPO after losing lead Moscow After five years of stagnating Bloomberg top technology banker, had previously incomes, Russians are increas- New York made a pitch to Neumann for a starring ingly dipping into savings and role on the IPO, people familiar with taking out loans to cover the the matter have said. cost of basic necessities. organ Stanley famously Yet Grimes and Neumann didn’t hit Consumers’ continuing pain nabbed this year’s largest it off , standing in the way of a closer is yet another obstacle to the Minitial public off ering, thanks partnership, the people said. Morgan Kremlin’s hopes of reviving partly to its top technology banker’s Stanley’s competitors also had a leg up: economic growth in line with moonlighting job as an Uber driver. Affi liates of both JPMorgan and Gold- goals set by President Vladimir But the fi rm is nowhere to be found on man Sachs Group Inc are investors in Putin last year. One bright spot what’s shaping up to be the year’s sec- the company. for the Russian economy has ond-biggest IPO, WeWork. Morgan Stanley was among lenders been the decline in inflation this Morgan Stanley stepped back from a that led a junk-bond off ering for We- year, but a key driver of that has lesser role in the deal after WeWork re- Work last year, and it previously un- been continued weakness in jected its pitch to be the top underwrit- derwrote almost $10mn of mortgages consumer spending. er, according to people with knowledge for Neumann’s own homes. It was also “Inflation is easing but the of the matter. part of a credit facility almost four years economic state isn’t improving The relationship became strained ago with JPMorgan, Citigroup Inc and from it,” said Anton Tabakh, when the bank wouldn’t extend as Deutsche Bank AG. chief economist at Moscow- much debt fi nancing as WeWork was Morgan Stanley is also among We- based credit assessor Expert seeking from key lenders, the people Work’s clients. The bank hired the RA. “The central bank may need said, asking not to be identifi ed dis- startup last year to overhaul some of to cut interest rates more ag- cussing non-public information. its office space to make it more mil- gressively.” Retail sales grew 1% The lead roles on the IPO and debt lennial-friendly. last month, below expectations fi nancing are held by JPMorgan Chase But unlike JPMorgan, Morgan and the 1.6% average so far this & Co, one of WeWork’s biggest inves- Stanley wasn’t among banks to loan year, even as wages adjusted tors and a long-time banker to chief Neumann money with his privately for inflation jumped 3.5%, beat- executive offi cer Adam Neumann. On held shares as collateral. That $500mn ing expectations, the Federal the IPO alone, underwriters could slice loan, which also involved UBS Group Statistics Service said yesterday. up what could be more than $122mn in AG and Credit Suisse Group AG, was The central bank resumed fees, assuming WeWork ends up pay- considered risky by Morgan Stanley’s monetary easing in June after ing 3.5%, a fi gure the company was bankers, the people said. two surprise rate hikes last year, discussing with banks this month. The WeWork’s IPO is expected to raise but so far the lower cost of mon- fi nal payout hasn’t been disclosed. about $3.5bn, second only this year to ey hasn’t translated into higher After the snub, Morgan Stanley chose Morgan Stanley headquarters in New York. Morgan Stanley stepped back from a lesser role in the IPO deal after WeWork Uber Technologies Inc’s $8.1bn IPO in growth. The economy expanded not to commit as much as its biggest rejected its pitch to be the top underwriter, according to people with knowledge of the matter. May. JPMorgan is leading WeWork’s 0.7% in the first half of the rivals to a $6bn credit facility for the $6bn credit facility, and all the banks list- year, well below the Economy loss-making company, complaining from the bank’s largest shareholder and credit commitment would risk Morgan tives for Morgan Stanley, WeWork and ed as arrangers are also underwriters on Ministry’s full-year target of 1.3%. about WeWork’s risk profi le and credit occasional partner, Mitsubishi UFJ Fi- Stanley’s role on an IPO, which is slated MUFG declined to comment. the IPO, including Goldman Sachs, Bank Hopes that increased govern- requirements, people with knowledge nancial Group Inc But WeWork wasn’t for September, some of them said. Morgan Stanley’s move was a sur- of America Corp, Citigroup and Barclays. ment spending will fuel a pickup of the matter said. interested in that kind of arrange- WeWork lost $690mn in the fi rst prise, considering its years-long pur- Morgan Stanley could still do busi- in the second half are under It did off er to contribute a smaller ment, they said. Bankers at the fi rm half of the year, according to a regula- suit of WeWork’s business. Michael ness with WeWork in the future, people threat from signs trade tensions amount along with a commitment knew their decision to baulk at the full tory fi ling on Wednesday. Representa- Grimes, the New York-based fi rm’s familiar with the matter said. are damaging global growth. “Persistent weakness in retail spending is worrying, with external demand also faltering. ‘Silent revolution’ seen fuelling The recovery is likely to remain soft until a boost arrives from US yield curve moves away from increased fiscal spending”, says Brazil M&A business for years Scott Johnson, economist at Bloomberg Economics. Bloomberg to the policy, based on his criticism of previ- “Incomes aren’t growing and ous administrations that tried it. inversion on century bond hints it’s hard to live in this frugal state Sao Paulo But it’s become clear that the president’s for five or six years,” said Lyud- goals are aligned with those of his economic Bloomberg developments on the trade front, on two-year securities, a contraction mila Presnyakova, a sociologist A “silent revolution” in Brazil will drive the team, said Lacerda, whose 10-year-old firm London and yes the fi scal policy discussion has followed. The Treasury yield at the Public Opinion Foundation mergers-and-acquisitions business for is predicting record revenue and profit this is looking like it is fi nally happening curve has undergone a turbulent few in Moscow. “People have had to the next three years as the government year. in Germany, but it is fair to say that weeks amid the prospect of an inter- start looking for alternatives, and privatises state-owned assets at a pace far “The quality of the economic team and its he longest-dated bonds are investors should reserve their judg- est-rate cut from the Federal Reserve this year they started tapping exceeding early estimates, according to one ideological determination to privatise, to re- feeling the heat globally, ment on both these issues.” Thirty- next month, increased tensions in more into credit and savings.” of the nation’s top M&A advisers. duce the state size, are creating very positive Tmoving the Treasury yield year Treasury yields jumped eight the US-China trade war and signs Unsecured consumer lending “What we’ve seen so far is nothing conditions for business,” Lacerda said. “This curve away from inversion, as the basis points to 2.11% in London yes- that the global economy is slowing. rose 25% in the 12 months until compared to what’s yet to come,” Ricardo consensus is very calming for entrepre- US government considers borrow- terday, adding to a six-basis-point Should the US borrow as far out July 1, according to central bank Lacerda, chief executive off icer of invest- neurs.” The number of acquisitions in Brazil ing for a century. increase on Friday. as 100 years, it would join coun- data. The share of Russians who ment-banking boutique BR Partners, said jumped to 339 so far this year, 13% more than After the US curve inverted last The rebound comes after they tries such as Austria and Argentina say they struggle to pay back in an interview in Sao Paulo. “Even assets the same period last year, according to data week, sparking debate over whether slipped below 2% for the fi rst time who have already issued so-called loans has jumped to around a that are considered crown jewels will end up compiled by Bloomberg. a recession could be 12-18 months last week and reached a record-low century bonds. They have had con- third this year, from just over being sold.” The value of the transactions is 6% lower, away, it steepened yesterday as 1.91%. The two-year, 10-year curve trasting success, with the former’s 20% in 2017, according to a July The government has already unloaded at $34.4bn. Lacerda’s BR Partners, the top yields on 10-year and 30-year bonds widened to nine basis points, having having returned investors 70% this survey by the VTsIOM pollster. several assets, including the $8.6bn sale by M&A adviser in Brazil in the first half of the climbed faster than shorter maturi- dropped below zero on Wednesday. year, while the latter’s tumbled 29% Economy Minister Maxim the state-owned oil giant Petroleo Brasileiro year, dropped to second for the year through ties. That came after the US govern- German 30-year yields also last week alone. Oreshkin stepped up calls this SA of a natural-gas pipeline unit called TAG, August 16. ment said Friday it would reach out climbed eight basis points to It’s not the fi rst time the US Treas- month for more measures to the biggest transaction announced this year, Boutique advisers are gaining market to investors on the potential issuance -0.14%, fuelled by heavier losses in ury has weighed extending the ma- promote growth to stop the according to data compiled by Bloomberg. share in M&A over big banks, some of which of 50- or 100-year bonds. European swap rates. Longer-dated turity of its debt, doing so in 2017, “bubble” in credit from getting Still to come are the sale of other Petro- trimmed their investment-banking opera- While the immediate prospect of yields across the globe have bounced but then it was met with a tepid out of hand. The central bank bras subsidiaries and oil fields, contributing tions in recent years and are now prioritising extending the maximum US ma- after slumping to record lows last response from analysts. Not all are argues that retail lending to the government’s goal of raising at least equity underwriting, according to Daniel turity beyond the current 30 years week, which left investors crying out convinced this time around either. growth is normal and says there $20bn from privatisations this year. President Wainstein, Greenhill & Co’s country head for may be slim, it would permanently for yield. The US could provide that “Even with the current move in aren’t any signs of overheating Jair Bolsonaro has asked economy ministry’s Brazil. alter the shape of the yield curve if it goes ahead with longer-dated rates, it isn’t clear there would be in the consumer credit market. secretary for privatization and divestment, The firm ranks third based on number if it goes ahead, said bond traders. issuance, while locking in lower bor- much interest unless we see some The operating environment Jose Salim Mattar, to sell at least one state- of deals, with a pipeline Wainstein called The move at the end of the Treas- rowing costs for longer. more favorable pickup in yield for for retailers is “challenging” due owned company a week, Mattar said earlier “robust.” Diogo Aragao, head of Brazil M&A at ury curve fed through into Europe, “If you were to get 3.5% to 4% in extending that duration,” said Rich- to the prolonged contraction in this month. Bank of America Corp, said he expects deals where traders also reacted to the US Treasuries, that would be very ard Kelly, head of global strategy at incomes, particularly outside Bolsonaro took off ice in January, bringing in which the government sells assets in infra- prospect of Germany opening up its attractive at this point in time,” Toronto-Dominion Bank. “You pick of big cities, Jan Dunning, the with him an economic team pressing for a structure sectors including ports, railroads, purse strings in a crisis. Tristan Hanson, a money manager up 50 basis points moving out from president of Russia’s second- full-scale sell-off of state-owned holdings airports and logistics. The size of transac- “In this market, selloff s can be at M & G Ltd, told Bloomberg TV. 10-year to 30-year, but it isn’t clear largest retailer Magnit said on to help balance the budget. Some analysts tions involving the oil and gas industry will vicious,” said Antoine Bouvet, sen- “The bond market looks very risky.” you’d have anything close to that for a conference call after a recent speculated that Bolsonaro wasn’t committed continue to rise, he said. ior rates strategist at ING Group NV. The last fi ve times the yield on 10- taking on more duration and rolling earnings release. “There has been some supportive year Treasuries dropped below those out to 50-year to 100-year.” A guide to investing from the richest family on the planet

Bloomberg younger Waltons exert more infl uence. tons have long outsourced the running Service fi lings show how $9bn of the London The most visible signs are in the of Walmart to professional managers. Walton fortune was deployed at the family’s hometown. Bentonville fea- Steuart and his uncle Rob, 74, sit on end of 2016. They detail the invest- tures a clutch of trendy bars and ea- the retailer’s board, but most of the ments of 21 trusts set up by the estates am Walton would probably be teries, including the Holler, a ware- extended family focus their energies of Sam’s widow Helen and son John. bewildered by the businesses house-size establishment featuring outside the company. In some ways, their investments Shis grandchildren have chosen shuffl eboard lanes and plant-based Any diversifi cation away from Wal- are a microcosm of trends sweeping to pursue, but the late founder of the burgers, and Undercroft, a speakeasy mart would no doubt be applauded the wider market. Passive funds pre- world’s largest family fortune would below a historic church that’s now a by the family’s risk managers. The dominate, with about $4bn stashed in likely have applauded their initiative. high-end restaurant. stock declined 3% this month through vehicles such as Vanguard Emerging Grandson Ben Walton, 44, owns They’re all part of Ropeswing, which Wednesday amid a wider market Markets ETF or Northern Trust Rus- Zoma Capital, which makes invest- aims to remake Bentonville into a des- swoon, knocking about $5bn from the sell Index. A further $2bn is in active ments in areas such as energy and tination for young workers and their family fortune before shares bounced funds. water. His cousins Steuart and Tom families. Bicycle trails that crisscross back 6% on Thursday, buoyed by About $2bn is in private equity, bought Rapha, a high-end British cy- the town’s outskirts are the fi rst step strong second-quarter sales. venture and hedge funds. The money cling brand, for a reported $225mn in in plans by Tom and brother Steuart, For now, the family’s holdings out- is spread across a host of star names, 2017. Tom’s Ropeswing Group operates both in their 30s, to turn Bentonville side of Walmart are a fraction of their including $81mn in Cliff Asness’s an assortment of restaurants in Benton- into a cycling mecca, while Steuart overall wealth, which is still anchored AQR Capital Management, $190mn in ville, Arkansas, that target millennials. co-founded a company that makes by the retailer Sam Walton founded in Chase Coleman’s Tiger Global Man- “The Walton family has groomed the aerobatic and touring airplanes. An 1950. Bentonville-based investment agement and $71mn in Ole Andreas next generation as a generation of en- unnamed Walton family member now vehicle Walton Enterprises LLC holds Halvorsen’s Viking Global Investors. trepreneurs,” said Byron Trott, founder sits on the board of FoodMaven, a star- a 50% stake in Walmart—valued at The younger generation is investing of merchant bank BDT Capital Part- tup that sells discounted surplus food, documents show. Steuart replaced his PwC said in a 2018 report, and succes- about $160bn. some of those returns in their own var- ners, who advises some of the world’s in which the family has an investment. father Jim, 71, on the board of Walmart sion planning is a dominant concern. That is shifting. The family’s Wal- ied ventures. richest families. There are other signs of the younger Inc in 2016. “Family succession is diffi cult,” said mart stake paid out about $3bn of It’s all part of an approach that ena- Their high-profi le investments mark generation’s growing infl uence. Three Kiki McLean, a spokeswoman for the Quentin Marshall, head of private dividends over the past year, while the bles the family to reposition itself for a change from the previous generation, of the fi ve members of the family foun- family, declined to comment. banking at Weatherbys. “As the family Walton Family Holdings Trust has sold the future, according to Trott. “You who are now in their late 60s and 70s. dation’s board now hail from that co- Managing such generational transi- expands, interests diverge.” There’s no $10bn of Walmart shares in the past have family leadership at the board Despite their staggering wealth, Alice, hort. They include Lukas Walton, 32, tions is one of the top priorities for the common template. three years. Today about $40bn of the level, non-family management lead- Jim, Rob and the late John Walton kept who has the right to vote the general world’s richest families. About $3.4tn While other wealthy dynasties like family’s wealth is held outside of Wal- ing the operating company and other their investments and ventures largely and limited partner units in Walton of billionaire wealth is expected to be the Kochshave sought to keep family mart stock, according to calculations family members working as innovative under wraps. But that’s changing as the Enterprises of his father’s estate, court transferred over the next two decades, members atop the business, the Wal- by Bloomberg. investors and entrepreneurs,” he said. Gulf Times 6 Tuesday, August 20, 2019 BUSINESS

KUWAIT KUWAIT OMAN

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

Al-Eid Food Ksc 67.90 0.00 - Oman Packaging 0.27 0.00 - Al-Madar Finance & Invt Co 100.00 0.98 686,722 Qurain Petrochemical Industr 349.00 0.29 245,232 Oman Oil Marketing Company 1.07 0.00 - Gulf Petroleum Investment 23.60 3.15 835,735 Advanced Technology Co 1,000.00 0.00 - Oman National Engineering An 0.12 0.00 - Mabanee Co Sakc 797.00 -0.50 106,444 Ekttitab Holding Co Sak 18.00 3.43 5,000 Oman Investment & Finance 0.12 -0.86 821,363 Inovest Co Bsc 68.50 0.00 - Real Estate Trade Centers Co 27.20 -18.80 23,610 Oman Intl Marketing 0.52 0.00 - Al-Deera Holding Co 12.50 5.08 51,191 Acico Industries Co Kscc 142.00 0.00 - Oman Flour Mills 0.65 0.00 - Mena Real Estate Co 39.60 0.26 2,055,499 Kipco Asset Management Co 98.00 0.00 - Oman Fisheries Co 0.09 0.00 153,550 Amar Finance & Leasing Co 38.40 7.84 50 National Petroleum Services 1,099.00 0.00 - Oman Europe Foods Industries 1.00 0.00 - United Projects For Aviation 440.00 0.00 - Alimtiaz Investment Group 140.00 0.75 4,141,977 Oman Education & Training In 0.23 0.00 - National Consumer Holding Co 55.00 0.00 - Ras Al Khaimah White Cement 62.00 0.00 - Oman Chromite 3.64 0.00 - QATAR Amwal International Investme 56.00 0.00 - Kuwait Reinsurance Co Ksc 158.00 0.00 - Oman Chlorine 0.38 0.00 - Equipment Holding Co K.S.C.C 21.00 2.00 10 Kuwait & Gulf Link Transport 79.80 -1.30 92,100 Oman Ceramic Company 0.42 0.00 - Company Name Lt Price % Chg Volume Arkan Al Kuwait Real Estate 81.00 0.00 - Humansoft Holding Co Ksc 3,220.00 -0.28 154,817 Oman Cement Co 0.22 0.00 8,044 Gfh Financial Group Bsc 70.10 0.57 178,020 Automated Systems Co Kscc 80.00 0.00 - Oman Cables Industry 0.81 0.00 270 Energy House Holding Co Kscp 21.50 0.00 500 Metal & Recycling Co 0.00 - Oman & Emirates Inv(Om)50% 0.00 - Zad Holding Co 13.30 0.00 - 69.00 0.08 Kuwait Co For Process Plant 206.00 -1.48 61,010 Gulf Franchising Holding Co 0.00 - Natl Aluminium Products 0.00 - Widam Food Co 6.10 0.00 19,640 160.00 0.25 Al Maidan Dental Clinic Co K 1,240.00 0.00 - Al-Enma’a Real Estate Co 0.21 1,662,000 National Real Estate Develop 0.00 - Vodafone Qatar 1.22 -1.61 570,199 47.30 5.00 National Shooting Company 12.20 -4.20 70,501 National Mobile Telecommuni 2.57 195,136 National Mineral Water 0.00 - United Development Co 1.39 -0.71 2,347,680 711.00 0.09 Al-Ahleia Insurance Co Sakp 420.00 0.00 - Sanad Holding Co Kscc 0.00 - National Life & General Insu 0.00 - Salam International Investme 0.41 1.50 43,156 0.00 0.29 Wethaq Takaful Insurance Co 29.00 0.00 - Unicap Investment And Financ 0.00 - National Gas Co 1.25 15,300 Qatar & Oman Investment Co 0.50 -1.19 143,003 46.00 0.16 Salbookh Trading Co Kscp 43.00 8.61 498,649 Al Salam Group Holding Co 1.35 5,795,106 National Finance Co 0.00 - Qatar Navigation 6.14 2.33 71,843 38.20 0.14 Aqar Real Estate Investments 81.00 0.00 - Al Aman Investment Company 0.00 63,829 National Detergent Co Saog 0.00 - Qatar National Cement Co 5.70 0.35 70,988 58.30 0.70 Hayat Communications 80.00 0.00 - Mashaer Holding Co Ksc -0.15 987,306 National Biscuit Industries 0.00 - Qatar National Bank 18.00 0.33 2,708,481 70.70 3.92 Soor Fuel Marketing Co Ksc 122.00 0.00 111,263 Manazel Holding 2.39 567 National Bank Of Oman Saog 1.16 150,503 Qatar Islamic Insurance 5.90 0.00 2,000 29.70 0.17 Tamkeen Holding Co 6.00 6.56 400 Tijara And Real Estate Inves 0.00 - Muscat Thread Mills Co 0.00 - Qatar Industrial Manufactur 3.22 -0.92 74,261 42.00 0.08 Alargan International Real 130.00 0.00 - Jazeera Airways Co Ksc 0.42 275,187 Muscat Insurance Co Saog 0.00 - Qatar International Islamic 7.69 0.65 661,223 963.00 0.78 Burgan Co For Well Drilling 89.10 0.00 - Commercial Real Estate Co -0.53 671,536 Muscat Gases Company Saog 0.00 - Qatari Investors Group 2.01 0.00 64,893 93.50 0.14 Kuwait Resorts Co Kscc 55.90 0.35 2,318,124 National International Co -10.74 500 Muscat Finance 0.00 - Qatar Islamic Bank 15.25 0.00 614,122 69.80 0.06 Oula Fuel Marketing Co 122.00 0.00 171,828 Taameer Real Estate Invest C 0.00 511,380 Muscat City Desalination Co 0.00 430 Qatar Gas Transport(Nakilat) 2.25 0.45 4,571,789 20.10 0.11 Palms Agro Production Co 59.00 0.00 - Gulf Cement Co 1.84 500 Majan Glass Company 0.00 - Qatar General Insurance & Re 3.34 -0.30 4,644 56.00 0.18 Mubarrad Holding Co Ksc 62.20 -0.16 204,700 Heavy Engineering And Ship B -0.25 208,942 Majan College 0.00 - Qatar German Co For Medical 0.64 -0.31 351,458 411.00 0.17 Shuaiba Industrial Co 160.00 0.00 - National Real Estate Co 0.48 2,278,142 Hsbc Bank Oman 0.00 21 Qatar Fuel Qsc 21.16 -0.84 125,040 87.00 0.12 Aan Digital Services Co 20.40 5.35 18,045,166 Al Safat Energy Holding Comp -1.40 7,500 Hotels Management Co Interna 0.00 - Qatar First Bank 0.33 -1.19 5,227,638 21.40 1.25 First Takaful Insurance Co 42.50 0.00 - Kuwait National Cinema Co 0.00 - Gulf Stone 0.00 - Qatar Electricity & Water Co 14.55 0.28 204,541 850.00 0.12 Kuwaiti Syrian Holding Co 43.50 0.00 - Danah Alsafat Foodstuff Co 5.38 1,018,504 Gulf Mushroom Company 0.00 270 Qatar Exchange Index Etf 9.70 0.08 60,027 26.90 0.31 National Cleaning Company 60.00 2.20 95 Independent Petroleum Group 0.00 - Gulf Investments Services -2.60 52,361 Qatar Cinema & Film Distrib 2.00 0.00 - 490.00 0.08 United Real Estate Company 65.00 0.32 625,000 Kuwait Real Estate Co Ksc 1.89 686,700 Gulf Invest. Serv. Pref-Shar 0.00 - Al Rayan Qatar Etf 2.23 0.31 46,727 82.90 0.11 Agility 796.00 -0.39 1,021,021 Salhia Real Estate Co Ksc 0.00 15,200 Gulf International Chemicals 0.00 - Qatar Insurance Co 3.00 0.33 935,292 336.00 0.14 Kuwait & Middle East Fin Inv 63.90 5.08 177,010 Gulf Cable & Electrical Ind -1.20 293,736 Gulf Hotels (Oman) Co Ltd 0.00 - Qatar Aluminum Manufacturing 0.78 -1.40 1,992,684 456.00 9.50 Fujairah Cement Industries 53.40 -1.56 9,000 Kuwait Finance House 1.05 8,581,656 Global Fin Investment 0.00 - Ooredoo Qpsc 6.50 0.00 686,202 783.00 0.07 Livestock Transport & Tradng 199.00 2.70 26,860 Gulf North Africa Holding Co 0.00 104,275 Galfar Engineering&Contract 0.00 655,899 National Leasing 0.67 -0.60 343,457 60.30 0.08 International Resorts Co 13.20 37.50 1,130 Hilal Cement Co 0.00 - Galfar Engineering -Prefer 0.00 - Mazaya Qatar Real Estate Dev 0.75 0.00 167,440 96.00 0.39 National Industries Grp Hold 259.00 1.64 5,660,381 Osoul Investment Kscc 0.00 - Financial Services Co. 0.00 - Mesaieed Petrochemical Holdi 2.52 -0.40 2,045,853 63.00 0.18 Warba Insurance Co 65.00 7.69 80,500 Gulf Insurance Group Ksc 0.00 - Financial Corp/The 0.00 - Al Meera Consumer Goods Co 14.49 1.33 11,176 626.00 0.10 First Dubai Real Estate Deve 28.00 0.00 19,000 Umm Al Qaiwain General Inves 9.77 1 Dhofar Tourism 0.00 - Medicare Group 7.13 0.56 43,996 78.20 0.49 Al Arabi Group Holding Co 75.70 0.00 37,500 Aayan Leasing & Investment -0.19 7,438,165 Dhofar Poultry 0.00 - Mannai Corporation Qsc 3.48 -0.85 7,862 55.40 0.18 Kuwait Hotels Sak 100.00 0.00 - Alrai Media Group Co Ksc -5.94 102,632 Dhofar Intl Development 0.00 - Masraf Al Rayan 3.58 0.28 3,156,208 32.10 0.30 Mobile Telecommunications Co 598.00 1.07 6,303,412 National Investments Co 3.01 908,699 Dhofar Insurance 0.00 - Al Khalij Commercial Bank 1.14 0.00 2,500 139.00 0.17 Eff ect Real Estate Co 24.00 0.00 - Commercial Facilities Co -5.47 54,622 Dhofar Generating Co Saoc 1.04 27,630 Industries Qatar 10.36 0.10 877,559 204.00 0.19 Tamdeen Real Estate Co Ksc 309.00 0.00 - Yiaco Medical Co. K.S.C.C 0.00 - Dhofar Fisheries & Food Indu 0.00 - Islamic Holding Group 2.13 1.43 47,913 66.50 1.28 Al Mudon Intl Real Estate Co 19.20 -1.06 469,050 Dulaqan Real Estate Co 0.00 - Dhofar Cattlefeed -4.76 5,209 Investment Holding Group 0.53 -2.05 868,870 350.00 0.12 Kuwait Cement Co Ksc 285.00 0.00 - Real Estate Asset Management 0.00 - Dhofar Beverages Co 0.00 - Gulf Warehousing Company 4.83 2.77 77,312 106.00 0.26 Sharjah Cement & Indus Devel 67.40 0.00 - Construction Materials Ind 0.00 - Gulf International Services 1.59 -2.45 1,131,773 0.04 Kuwait Portland Cement Co 1,210.00 0.75 1 Computer Stationery Inds 0.00 - Ezdan Holding Group 0.63 2.60 9,817,899 0.26 Educational Holding Group 320.00 0.00 7,500 Bankmuscat Saog 0.00 229,203 Doha Insurance Co 1.08 0.00 120,000 0.43 Bahrain Kuwait Insurance 200.00 0.00 - Bank Nizwa 1.18 60,000 Doha Bank Qpsc 2.50 0.00 665,041 0.09 Asiya Capital Investments Co 35.50 0.00 242,640 OMAN Bank Dhofar Saog 0.00 - Dlala Holding 0.72 -0.42 135,834 0.14 Kuwait Investment Co 143.00 1.45 560,750 Arabia Falcon Insurance Co 0.00 - Commercial Bank Pqsc 4.33 0.70 962,308 Company Name Lt Price % Chg Volume 0.10 Burgan Bank 352.00 0.61 9,458,200 Aloula Co 0.00 - Barwa Real Estate Co 3.39 2.73 1,625,157 0.53 Kuwait Projects Co Holdings 226.00 1.38 554,496 Al-Omaniya Financial Service 0.08 0.00 - Al Khaleej Takaful Group 1.70 -3.95 159,242 Voltamp Energy Saog 0.18 0.00 - Al Madina For Finance And In 18.60 1.67 2,204,024 Al-Hassan Engineering Co 0.02 0.00 - Al Ahli Bank 0.73 0.00 820,434 Vision Insurance Saoc 0.11 0.00 - Kuwait Insurance Co 340.00 0.00 - Al-Fajar Al-Alamia Co 0.75 0.00 - United Power/Energy Co- Pref 1.00 0.00 - Al Masaken Intl Real Estate 65.00 -14.62 3,540 Al-Anwar Ceramic Tiles Co 0.10 2.04 805,964 United Power Co Saog 2.50 0.00 - Intl Financial Advisors 17.00 0.02 - Al Suwadi Power 0.07 -2.78 77,757 United Finance Co 0.06 0.00 - KUWAIT First Investment Co Kscc 34.40 -0.29 5,897,198 Al Sharqiya Invest Holding 0.08 -1.27 45,000 Ubar Hotels & Resorts 0.13 0.00 - Al Mal Investment Company 13.00 2.36 410,010 Al Maha Petroleum Products M 0.80 0.00 - Takaful Oman 0.12 0.00 - Company Name Lt Price % Chg Volume Bayan Investment Co Kscc 42.50 -3.41 46,147 Al Maha Ceramics Co Saoc 0.17 0.00 - Taageer Finance 0.10 0.00 - Egypt Kuwait Holding Co Sae 456.00 0.00 - Al Madina Takaful Co Saoc 0.09 2.38 1,059,669 Sultan Center Food Products 46.00 -4.86 21,010 Sweets Of Oman 0.55 0.00 - Coast Investment Development 35.50 -1.15 252,000 Al Madina Investment Co 0.02 9.09 152,259 Kuwait Foundry Co Sak 255.00 -0.38 6,871 Sohar Power Co 0.10 0.00 - Privatization Holding Compan 56.00 2.69 691 Al Kamil Power Co 0.38 0.00 - Kuwait Financial Centre Sak 109.00 1.01 461,089 Sohar International Bank 0.11 0.00 41,204 Injazzat Real State Company 80.00 0.00 - Al Jazerah Services -Pfd 0.55 0.00 - Ajial Real Estate Entmt 128.00 0.00 - Smn Power Holding Saog 0.08 0.00 - Kuwait Cable Vision Sak 20.00 0.00 - Al Jazeera Steel Products Co 0.23 0.00 - Kuwait Finance & Investment 46.80 -7.19 1,016,272 Shell Oman Marketing - Pref 1.05 0.00 - Sanam Real Estate Co Kscc 41.00 0.00 - Al Jazeera Services 0.12 0.00 - National Industries Co Ksc 180.00 -2.78 503 Shell Oman Marketing 1.06 0.00 - Ithmaar Holding Bsc 22.30 0.00 - Al Izz Islamic Bank 0.07 1.41 294,411 Kuwait Real Estate Holding C 27.00 0.00 - Sharqiyah Desalination Co Sa 0.30 0.00 - Aviation Lease And Finance C 280.00 0.00 943,528 Al Buraimi Hotel 0.88 0.00 - Securities House/The 47.00 -0.43 417,193 Sembcorp Salalah Power & Wat 0.11 0.00 28,000 Arzan Financial Group For Fi 28.30 0.37 8,762,693 Al Batinah Power 0.07 0.00 35,900 Boubyan Petrochemicals Co 778.00 0.00 64,010 Salalah Port Services 0.60 0.00 - Ajwan Gulf Real Estate Co 13.10 16.03 12,399,969 Al Batinah Hotels 1.13 0.00 - Al Ahli Bank Of Kuwait 333.00 -3.00 30,710 Salalah Mills Co 0.57 0.00 - Kuwait Business Town Real Es 41.50 0.00 206,239 Al Batinah Dev & Inv 0.08 0.00 - Ahli United Bank (Almutahed) 357.00 -1.16 462,694 Salalah Beach Resort Saog 1.38 0.00 - Future Kid Entertainment And 99.00 0.00 - Al Anwar Holdings Saog 0.09 0.00 199,473 National Bank Of Kuwait 1,005.00 0.60 1,792,438 Sahara Hospitality 3.09 0.00 - Specialities Group Holding C 76.40 0.00 67,219 Al Ahlia Insurance Co Saoc 0.32 0.00 - Commercial Bank Of Kuwait 504.00 0.00 12,126 Renaissance Services Saog 0.28 -0.70 88,132 Abyaar Real Eastate Developm 14.30 -1.50 3,173,506 Ahli Bank 0.12 0.00 - Kuwait International Bank 284.00 0.37 9,357,926 Raysut Cement Co 0.34 0.59 90,408 Dar Al Thuraya Real Estate C 179.00 0.00 - Acwa Power Barka Saog 0.66 0.00 270 Gulf Bank 313.00 1.66 2,515,980 Phoenix Power Co Saoc 0.07 0.00 3,611 Kgl Logistics Company Kscc 41.10 0.00 529,517 Abrasives Manufacturing Co S 0.05 0.00 - Al-Massaleh Real Estate Co 36.30 0.00 - Packaging Co Ltd 2.21 0.00 - Combined Group Contracting 247.00 -0.87 1,139,991 A’saff a Foods Saog 0.60 0.00 270 Al Arabiya Real Estate Co 26.60 2.33 679,675 Ooredoo 0.48 0.00 104,093 Jiyad Holding Co Ksc 46.10 -3.69 945,604 0Man Oil Marketing Co-Pref 0.25 0.00 - Kuwait Remal Real Estate Co 27.80 2.26 163,750 Ominvest 0.33 1.23 185,203 Warba Capital Holding Co 79.90 4.17 5 #N/A Invalid Security 0.00 0.00 - Alkout Industrial Projects C 840.00 0.00 - Oman United Insurance Co 0.17 0.00 - Gulf Investment House Ksc 53.30 -2.12 42,000 #N/A Invalid Security 0.00 0.00 - Oman Telecommunications Co 0.58 0.00 39,417 A’ayan Real Estate Co Sak 63.70 0.00 546,999 Boubyan Bank K.S.C 600.00 -1.01 826,194 Oman Refreshment Co 1.40 0.00 - Investors Holding Group Co.K 10.00 0.00 1,853,491 Ahli United Bank B.S.C 285.00 0.36 4,040,457 Oman Qatar Insurance Co 0.09 0.00 - Al-Mazaya Holding Co 54.70 -0.18 755,580 Osos Holding Group Co 105.00 0.00 - LATEST MARKET CLOSING FIGURES Europe is just saying no to negative yields

Bloomberg few years ago, the Amsterdam-based London telecommunications company was well known in the debt market for its soaring leverage. So even though the Valeo SA used to be a stock-market yield on one of its securities turned darling until a slowdown in China negative in July, it’s keeping the focus and changing rules on emissions on cutting borrowing and disposing hammered the shares and hit its assets. credit rating. Yet you wouldn’t know “We expect to significantly reduce it looking at the debt market where interest expense in the next two the yield on a Valeo bond due in 2022 years as we are deleveraging rapidly,” slipped below zero last month. Dennis Okhuijsen, an adviser to the It looks like a golden opportunity for company, said on an earnings call last the French auto-parts maker to gorge month. “As always we are refinancing on ultra-cheap borrowing. But it isn’t and reviewing our refinancing interested – and the restraint tells options.” you everything about the European Don’t rule out a shift by executives Central Bank’s uphill battle to revive entirely. Shareholders could become animal spirits. an important source of pressure on “Low interest rates are like a mild treasurers, Bank of America Merrill drug,” said chief executive off icer Lynch Corp analysts led by Barnaby Jacques Aschenbroich. “There’s an Martin said in a recent note. The addicting eff ect that we want to avoid. issuance could finance mergers, We don’t say: debt is cheap so we will dividend payments or to plug gaps in pile up debt.” cash flow, they said. Valeo joined the likes of Unilever NV “It’s quite possible that a company and SAP SE in the €1.1th ($1.2tn) global could be tempted to take on ever pool of corporate debt trading with more leverage in a world where yields below zero, according to data earnings growth is more feeble,” compiled by Bloomberg. The stockpile said Oystein Borsum, strategist at of negative obligations across all Swedbank AB. “How else are you markets hit a record $16.7tn last week, going to get earnings going?” and could swell further as the ECB European firms can be forgiven for preps fresh stimulus. failing to spot a raft of investment If companies lock in these rates in the opportunities in a world of weak primary market, they could in eff ect demand and policy uncertainty. Many be getting paid to borrow. But don’t seem aware of the risks. expect a borrowing binge to finance If corporates don’t play ball, it raises acquisitions or share buybacks. questions about whether the ECB’s Growing signs that Europe is headed fresh round of stimulus would revive into a recession – with the German business activity and inflation. Gross government preparing a stimulus A star of the euro sign sculpture hangs illuminated near the former European Central Bank headquarters at night in Frankfurt (file). The stockpile of negative domestic product in Germany shrank programme to weather a deep slump obligations across all markets hit a record $16.7tn last week, and could swell further as the ECB preps fresh stimulus. in the second quarter. The Bloomberg – mean treasurers have plenty of Intelligence global GDP tracker shows reasons to resist. an investment when the potential more for them than the face amount. The average ratio of net debt to you can lock it in for 30 years,” said growth of just 2.4% in the second “Leverage in Europe is low and it return on that investment looks It’s hardly a wave. operating earnings before interest, Sharon Katz, associate professor of quarter. could stay that way – even though highly uncertain, given the outlook in For that to happen, companies may tax, depreciation and amortisation for accounting and control at Insead Doubling down on the ECB’s existing many companies are able to issue Europe.” need to reconsider the restraint European investment-grade corporate Business School in Fontainebleau, toolkit “simply won’t work any debt with negative or record-low French luxury goods maker LVMH and they’ve shown since the ECB started bonds was 1.7 times in 2009, France. “Not all companies will go for more,” Philipp Hildebrand, vice yields,” said Mahesh Bhimalingam, drugmaker Sanofi are among a small cutting rates and buying debt. Weak according to Fitch Ratings Inc. The it. If you have a cash flow problem, chairman at BlackRock and former a credit strategist at Bloomberg handful that issued debt this year with confidence in the outlook for growth rating company forecasts average you still need to pay the principal at head of the Swiss National Bank, Intelligence. “It’s hard to see the negative yields - the securities had and profits will only entrench their leverage of just 1.6 times in 2019. some point.” said in an interview on Bloomberg appeal of loading up on debt to make a coupon of zero and investors paid reluctance. “This is the time to take debt because Consider Altice Europe NV. Only a Television. Gulf Times Tuesday, August 20, 2019 7 BUSINESS

DJIA WORLD INDICES Company Name Lt Price % Chg Volume Indices Lt Price Change Dow Jones Indus. Avg 26,145.04 +259.03 Apple Inc 212.14 2.73 2,463,786 S&P 500 Index 2,926.58 +37.90 American Express Co 124.59 -0.03 171,322 Nasdaq Composite Index 8,013.04 +117.04 Boeing Co/The 335.20 1.44 166,942 S&P/Tsx Composite Index 16,281.98 +132.19 Caterpillar Inc 117.51 0.93 193,101 Mexico Bolsa Index 39,673.69 +334.14 Cisco Systems Inc 48.43 3.12 2,587,228 Brazil Bovespa Stock Idx 100,397.00 +591.22 Chevron Corp 117.15 1.16 468,239 Ftse 100 Index 7,189.65 +72.50 Walt Disney Co/The 136.73 1.13 404,394 Cac 40 Index 5,371.56 +70.77 Dow Inc 45.37 1.93 760,000 Dax Index 11,715.37 +152.63 Goldman Sachs Group Inc 202.89 1.74 133,368 Ibex 35 Tr 8,733.30 +62.90 Home Depot Inc 206.79 1.54 446,874 Nikkei 225 20,563.16 +144.35 Intl Business Machines Corp 135.95 1.64 226,215 Japan Topix 1,494.33 +9.04 Intel Corp 47.21 1.53 2,070,984 Hang Seng Index 26,291.84 +557.62 Johnson & Johnson 131.98 0.47 296,212 All Ordinaries Indx 6,550.49 +64.57 Jpmorgan Chase & Co 108.69 0.90 788,243 Nzx All Index 1,816.73 +7.86 Coca-Cola Co/The 54.52 0.20 753,988 Bse Sensex 30 Index 37,402.49 +52.16 Mcdonald’s Corp 218.51 0.02 227,285 Nse S&P Cnx Nifty Index 11,053.90 +6.10 3M Co 162.39 0.55 150,637 Straits Times Index 3,128.45 +13.42 Merck & Co. Inc. 86.12 1.25 599,128 Karachi All Share Index 21,806.82 +409.48 Microsoft Corp 137.96 1.34 2,454,311 Jakarta Composite Index 6,296.72 +10.06 Nike Inc -Cl B 81.00 0.90 399,168 Pfizer Inc 35.12 1.36 1,393,057 Procter & Gamble Co/The 120.02 0.70 673,601 Travelers Cos Inc/The 147.17 0.25 79,051 TOKYO Unitedhealth Group Inc 244.73 -0.39 159,039 United Technologies Corp 126.71 1.33 107,513 Company Name Lt Price % Chg Volume Visa Inc-Class A Shares 179.40 0.66 329,730 Nidec Corp 13,740.00 0.15 353,800 Verizon Communications Inc 56.84 0.34 853,451 Isuzu Motors Ltd 1,090.00 0.65 1,426,200 Walgreens Boots Alliance Inc 51.18 1.39 378,704 Unicharm Corp 3,130.00 0.22 738,800 Walmart Inc 114.36 1.21 511,857 Nomura Holdings Inc 392.10 2.38 27,297,100 Exxon Mobil Corp 69.21 1.33 884,860 Daiichi Sankyo Co Ltd 7,228.00 0.24 1,323,300 Subaru Corp 2,716.50 0.33 1,653,800 Sumitomo Realty & Developmen 3,949.00 0.84 764,000 FTSE 100 Ntt Docomo Inc 2,646.00 0.99 2,739,700 Sumitomo Metal Mining Co Ltd 3,084.00 0.65 802,700 Company Name Lt Price % Chg Volume Orix Corp 1,511.00 1.17 3,578,600 Asahi Group Holdings Ltd 4,796.00 -0.37 518,300 Anglo American Plc 1,739.60 2.43 3,910,338 Keyence Corp 59,160.00 -0.62 440,300 Associated British Foods Plc 2,299.00 -0.17 417,099 Mizuho Financial Group Inc 155.20 0.91 61,355,600 Admiral Group Plc 2,175.00 1.16 642,692 Sumitomo Mitsui Trust Holdin 3,442.00 1.24 711,100 Ashtead Group Plc 2,124.00 1.58 891,729 Japan Tobacco Inc 2,298.50 1.41 3,047,700 Antofagasta Plc 815.40 3.06 1,481,073 Sumitomo Electric Industries 1,216.50 0.58 1,689,000 Auto Trader Group Plc 524.40 -0.15 1,692,738 Daiwa Securities Group Inc 444.90 1.88 4,825,200 Aviva Plc 363.50 0.78 9,921,221 Softbank Group Corp 4,980.00 1.69 9,001,600 Astrazeneca Plc 7,281.00 0.34 1,371,618 Panasonic Corp 806.90 0.24 6,672,200 Bae Systems Plc 552.40 0.62 5,068,713 Fujitsu Ltd 8,542.00 -0.52 815,600 Barclays Plc 140.60 0.56 27,193,024 Central Japan Railway Co 20,955.00 -0.59 225,600 British American Tobacco Plc 3,036.50 0.25 1,799,979 Nitori Holdings Co Ltd 15,085.00 -0.40 320,600 Barratt Developments Plc 626.20 1.07 3,115,367 A view of the Frankfurt Stock Exchange. The DAX 30 ended 1.3% higher at 11,715.37 points yesterday. Ajinomoto Co Inc 1,899.50 -0.16 843,200 Bhp Group Plc 1,781.40 1.49 4,054,762 Daikin Industries Ltd 13,270.00 -0.52 444,700 Berkeley Group Holdings/The 3,876.00 1.23 345,654 Mitsui Fudosan Co Ltd 2,408.00 2.99 4,592,700 British Land Co Plc 485.20 1.55 2,952,952 Ono Pharmaceutical Co Ltd 2,035.00 1.40 2,335,900 Bunzl Plc 2,037.00 0.25 962,080 Toray Industries Inc 776.40 0.15 3,657,800 Bp Plc 500.10 2.02 28,547,777 Bridgestone Corp 3,937.00 -0.40 1,872,100 Burberry Group Plc 2,117.00 0.71 824,299 Sony Corp 5,896.00 1.38 3,717,800 Bt Group Plc 167.38 2.05 18,003,592 Astellas Pharma Inc 1,444.00 0.91 2,697,400 Coca-Cola Hbc Ag-Di 2,715.00 -0.04 600,336 Stock markets rally on Hoya Corp 8,480.00 1.37 653,900 Carnival Plc 3,592.00 1.93 406,527 Nippon Steel Corp 1,455.00 -0.07 2,014,600 Centrica Plc 66.30 1.31 16,037,326 Suzuki Motor Corp 3,880.00 -0.61 1,275,400 Compass Group Plc 2,058.00 0.98 2,067,664 Nippon Telegraph & Telephone 4,976.00 -0.68 1,648,500 Croda International Plc 4,688.00 0.17 270,788 Jxtg Holdings Inc 444.80 3.37 18,208,400 Crh Plc 2,650.00 0.42 1,675,170 Murata Manufacturing Co Ltd 4,522.00 0.22 2,015,000 fresh trade talk hopes Dcc Plc 6,636.00 1.07 190,071 Kansai Electric Power Co Inc 1,275.50 1.47 1,337,800 Diageo Plc 3,446.00 -0.17 2,026,209 Denso Corp 4,257.00 -0.19 1,110,900 Direct Line Insurance Group 299.00 0.37 3,319,078 two-year note, while the 30-year yield right-left coalition government would Sompo Holdings Inc 4,123.00 0.37 1,235,300 AFP, Reuters Evraz Plc 503.00 1.41 3,129,678 fell below 2% for the fi rst time ever. be prepared to ditch its balanced budg- Daiwa House Industry Co Ltd 3,285.00 1.92 1,893,000 London Experian Plc 2,534.00 0.64 1,017,014 Dai-Ichi Life Holdings Inc 1,373.00 0.81 3,076,800 This so-called “inversion” — when et rule and take on new debt to counter Easyjet Plc 922.00 3.95 2,808,110 Mazda Motor Corp 897.30 1.36 4,468,000 short-term interest rates are higher a possible recession, continued to help Ferguson Plc 6,030.00 1.07 232,501 Komatsu Ltd 2,255.00 0.33 2,505,500 the DAX index. That came as oil stocks Fresnillo Plc 652.00 -1.75 1,306,960 tock markets rallied yesterday af- than longer-term ones — is viewed as West Japan Railway Co 8,828.00 0.31 223,500 Glencore Plc 232.95 3.81 27,777,884 ter US President Donald Trump’s a harbinger of recession. benefi ted from a rise in crude prices Kao Corp 7,549.00 -0.03 1,011,400 Glaxosmithkline Plc 1,664.60 0.40 4,609,307 top economic adviser hailed A majority of economists expect a due to an attack on Saudi oil installa- Mitsui & Co Ltd 1,643.50 0.21 3,374,800 S Gvc Holdings Plc 579.60 2.29 2,127,960 “positive” trade talks with Chinese ne- US recession in the next two years, but tions in Yemen and as China took steps Daito Trust Construct Co Ltd 13,740.00 1.03 202,000 Hikma Pharmaceuticals Plc 2,035.00 1.70 365,296 Otsuka Holdings Co Ltd 4,291.00 -0.74 1,228,000 gotiators. have pushed back the onset, according to guide interest rates for companies Hargreaves Lansdown Plc 1,915.50 0.92 654,101 Oriental Land Co Ltd 15,035.00 -0.89 699,500 In London, the FTSE 100 closed to a survey Monday from the National lower, aiming to prop up a fl agging Halma Plc 1,960.00 1.21 499,837 Sekisui House Ltd 1,836.50 1.24 1,268,600 1.0% up at 7,189.65 points, Frankfurt’s Association for Business Economists. economy. Hsbc Holdings Plc 603.70 1.09 28,429,253 Secom Co Ltd 8,934.00 0.95 483,900 Hiscox Ltd 1,598.00 -0.19 455,613 DAX 30 ended 1.3% higher at 11,715.37 The German economy could, mean- “It’s a continuation of the feel good Tokio Marine Holdings Inc 5,503.00 -0.33 2,004,300 Intl Consolidated Airline-Di 423.90 0.50 3,583,137 points and Paris’ CAC 40 fi nished with while, enter a recession in the third factor that we saw on Friday... but the Aeon Co Ltd 1,932.00 1.82 2,129,600 Intercontinental Hotels Grou 5,185.00 1.25 349,333 a 1.3% gain at 5,371.56 points, while quarter because of a “sharp” decline wider fear factor is still very much alive Asahi Kasei Corp 957.40 0.95 3,429,900 3I Group Plc 1,082.00 1.12 1,027,430 the EURO STOXX 50 added 1.2% at in industrial production held back by and well,” CMC Markets analyst David Kirin Holdings Co Ltd 2,096.50 -1.18 1,786,400 Imperial Brands Plc 2,111.50 1.08 888,575 Marubeni Corp 675.50 2.27 6,162,600 3,369.19 points. international trade tensions, the Bun- Madden said. Informa Plc 850.20 0.59 1,598,928 Mitsubishi Ufj Financial Gro 505.30 1.30 30,689,000 “As the new week kicks off, stocks desbank warned yesterday. “Germany is normally very prudent Intertek Group Plc 5,522.00 0.95 171,119 Mitsubishi Chemical Holdings 730.00 1.40 5,474,200 are in demand amid increased opti- “The economy could contract again and wouldn’t be the kind of country to Itv Plc 109.75 2.67 8,754,050 Fanuc Corp 18,010.00 0.47 792,800 Johnson Matthey Plc 2,830.00 1.32 869,710 mism over US and China reaching a slightly,” Germany’s central bank rely on a stimulus package to get their Fast Retailing Co Ltd 62,900.00 0.83 393,300 Kingfisher Plc 194.20 0.41 11,665,443 trade deal and as investors anticipate said in its monthly report, following a economy going again, but the fact that Ms&Ad Insurance Group Holdin 3,462.00 0.79 1,108,400 Land Securities Group Plc 751.40 1.05 1,891,037 stimulus measures to shore up slow- 0.1-percent decline in gross domestic they are considering it tells us that they Kubota Corp 1,530.50 1.06 2,603,800 Legal & General Group Plc 227.20 0.26 14,002,002 are actually a bit worried.” Seven & I Holdings Co Ltd 3,790.00 2.38 1,937,500 ing economies,” noted Fiona Cin- product in the second quarter. Lloyds Banking Group Plc 49.94 0.57 150,567,789 Inpex Corp 922.10 1.03 2,269,000 cotta, analyst at City Index trading According to Germany’s Der Spiegel Longer-term bond yields in the eu- London Stock Exchange Group 6,928.00 1.11 457,561 Resona Holdings Inc 413.20 1.40 7,984,500 group. newspaper, Angela Merkel’s govern- rozone as well as the United States, Micro Focus International 1,597.60 -0.01 917,338 Fujifilm Holdings Corp 4,568.00 -0.39 1,054,600 whose slide below short-term rates Marks & Spencer Group Plc 185.75 2.48 6,457,343 “After a disastrous previous week ment is ready to boost public spending. Yamato Holdings Co Ltd 1,811.50 -1.12 743,100 Mondi Plc 1,562.50 1.66 1,588,067 which saw equities experience the China has meanwhile announced an last week set off alarm bells, were off Chubu Electric Power Co Inc 1,557.50 1.53 1,432,300 Melrose Industries Plc 167.35 2.07 8,041,241 worst week this year, risk appetite was interest rate reform that it said would record low levels yesterday. Mitsubishi Estate Co Ltd 1,999.50 0.71 2,453,300 Wm Morrison Supermarkets 182.00 0.52 6,964,728 showing strong signs of improving.” lower borrowing costs for companies. All eyes this week will move to the Mitsubishi Heavy Industries 4,013.00 -0.30 1,122,100 National Grid Plc 867.90 1.19 5,282,058 Sysmex Corp 6,437.00 1.24 420,500 Washington and Beijing are working “The week is off to a pleasant start, US Federal Reserve’s annual meetings Nmc Health Plc 1,900.00 2.65 621,011 Shiseido Co Ltd 7,905.00 -0.20 979,100 to revive pivotal talks aimed at ending with traders seemingly buoyed by Chi- in Jackson Hole, Wyoming, with the Next Plc 5,706.00 1.49 354,087 Shionogi & Co Ltd 5,791.00 1.21 619,700 a trade war that has roiled world mar- nese lending rate reforms and the pros- US central bank widely expected to cut Ocado Group Plc 1,204.00 4.60 1,078,333 Terumo Corp 3,270.00 -0.40 1,149,200 Paddy Power Betfair Plc 0.00 0.00 - kets, Trump’s chief economic advisor pect of German fi scal stimulus,” said interest rates again next month. Tokyo Gas Co Ltd 2,709.50 0.24 554,500 Prudential Plc 1,399.00 -1.17 6,908,355 Larry Kudlow said on Sunday. Oanda analyst Craig Erlam. Investors are counting on central Tokyo Electron Ltd 18,675.00 -0.66 981,300 Persimmon Plc 1,862.00 1.14 855,330 The US president himself weighed in In foreign exchange, the pound banks to head off any slide in the global East Japan Railway Co 10,085.00 0.60 354,700 Pearson Plc 823.20 1.08 1,402,804 on Twitter, saying, “We are doing very dropped on reports the UK govern- economy, and as a result equity mar- Itochu Corp 2,069.00 0.61 2,752,900 Reckitt Benckiser Group Plc 6,193.00 0.37 586,208 Ana Holdings Inc 3,612.00 0.95 445,900 well with China, and talking!” ment expects that a no-deal Brexit on kets, after a rocky few months. Royal Bank Of Scotland Group 184.65 1.37 14,518,786 Mitsubishi Electric Corp 1,271.00 -0.20 3,440,400 In another tweet, he added that October 31 could cause serious food, Among major gainers were Europe- Royal Dutch Shell Plc-A Shs 2,315.00 1.85 4,940,436 Sumitomo Mitsui Financial Gr 3,479.00 0.84 3,081,800 the US economy was “poised for big fuel and medicine shortages. an banks, which rose 1.2%, led by a 3% Royal Dutch Shell Plc-B Shs 2,304.50 1.72 3,299,289 Relx Plc 1,947.50 1.14 2,597,916 growth after trade deals are complet- The government’s leaked readiness rise for Deutsche Bank, and more than Rio Tinto Plc 4,065.00 1.50 2,537,512 ed,” and that China is “eating Tariff s.” report found British businesses re- 1% rise for China-focused HSBC. Rightmove Plc 524.00 1.35 1,644,916 SENSEX There remains a high level of con- main largely unprepared for no-deal A Spiegel report said that major in- Rolls-Royce Holdings Plc 762.80 1.17 2,982,337 cern however about the global outlook — despite a Bank of England survey vestors in the German lender wanted Rsa Insurance Group Plc 528.00 1.34 2,199,202 Company Name Lt Price % Chg Volume and particularly the US economy af- in March fi nding around 80% judged supervisory board chairman Paul Ach- Rentokil Initial Plc 458.60 0.92 3,779,867 Adani Ports And Special Econ 357.40 0.01 2,152,462 ter the yield on 10-year US Treasury themselves ready. leitner to step down before his term Sainsbury (J) Plc 188.35 3.21 8,560,707 Asian Paints Ltd 1,586.45 -0.69 1,322,246 Friday’s report that Germany’s ends in 2022. Schroders Plc 2,725.00 0.52 260,696 bonds last week slid below that of the Axis Bank Ltd 685.00 1.38 9,082,914 Sage Group Plc/The 695.60 -0.49 2,748,088 Bajaj Finance Ltd 3,328.05 -0.27 1,432,842 Segro Plc 757.40 1.75 1,739,954 Bharti Airtel Ltd 361.00 -0.15 4,521,771 Smurfit Kappa Group Plc 2,446.00 0.49 256,758 Bharti Infratel Ltd 255.30 2.45 3,545,851 HONG KONG HONG KONG Standard Life Aberdeen Plc 242.30 0.21 7,169,787 Bajaj Auto Ltd 2,725.50 -0.93 461,203 Ds Smith Plc 324.80 3.51 3,521,368 Bajaj Finserv Ltd 7,376.65 -0.84 300,128 Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume Smiths Group Plc 1,572.00 1.16 509,857 Bharat Petroleum Corp Ltd 347.00 -1.20 1,727,376 Scottish Mortgage Inv Tr Plc 530.00 2.02 2,436,009 Ck Hutchison Holdings Ltd 3.02 Cipla Ltd 475.85 -0.05 1,211,272 69.95 10,498,548 Hong Kong & China Gas 16.92 1.81 20,469,782 Smith & Nephew Plc 1,916.50 1.00 1,204,727 Hang Lung Properties Ltd 1.70 Coal India Ltd 198.95 -1.49 5,848,151 17.96 6,320,949 Bank Of Communications Co-H 5.33 1.14 19,357,018 Spirax-Sarco Engineering Plc 7,815.00 0.39 167,756 Ck Infrastructure Holdings L 1.63 Dr. Reddy’s Laboratories 2,509.10 0.66 711,303 56.10 1,907,270 China Petroleum & Chemical-H 4.67 1.08 78,374,166 Sse Plc 1,113.00 0.54 3,242,210 Hengan Intl Group Co Ltd 1.40 Eicher Motors Ltd 16,337.70 -1.58 135,047 54.45 3,234,050 Hong Kong Exchanges & Clear 252.80 3.18 8,629,233 Standard Chartered Plc 618.40 0.98 4,388,361 China Shenhua Energy Co-H -1.40 Gail India Ltd 127.30 -1.81 5,062,785 15.54 19,078,295 Bank Of China Ltd-H 3.02 1.00 278,896,168 St James’s Place Plc 937.00 -0.32 1,586,626 Cspc Pharmaceutical Group Lt 4.18 Grasim Industries Ltd 732.35 -2.65 1,629,089 12.96 54,540,255 Hsbc Holdings Plc 57.95 2.57 36,632,571 Severn Trent Plc 2,042.00 1.74 563,701 Hang Seng Bank Ltd 4.12 Hcl Technologies Ltd 1,064.05 0.12 841,106 174.20 3,015,383 Power Assets Holdings Ltd 54.50 0.74 1,572,598 Tesco Plc 219.70 1.67 13,089,191 China Resources Land Ltd 4.44 Housing Development Finance 2,114.05 0.67 2,233,119 31.75 12,095,078 Mtr Corp 49.25 1.97 7,228,139 Tui Ag-Di 777.40 4.10 1,300,569 Ck Asset Holdings Ltd 2.71 Hdfc Bank Limited 2,206.85 -0.94 2,124,550 55.05 9,293,474 China Overseas Land & Invest 25.70 3.63 18,801,853 Taylor Wimpey Plc 146.20 1.81 7,184,473 Sino Biopharmaceutical 5.41 Hero Motocorp Ltd 2,631.50 -1.41 1,215,957 9.93 61,612,534 Tencent Holdings Ltd 336.80 3.19 21,800,145 Unilever Plc 5,091.00 1.60 1,573,601 Henderson Land Development 2.88 Hindalco Industries Ltd 181.15 0.75 5,179,954 39.35 9,547,751 China Unicom Hong Kong Ltd 7.81 -0.64 52,485,216 United Utilities Group Plc 797.40 2.02 1,611,351 Aia Group Ltd 2.96 Hindustan Petroleum Corp 244.70 -0.33 2,106,649 78.25 34,851,589 Link Reit 94.10 1.62 9,028,889 Vodafone Group Plc 150.32 -0.34 37,176,052 Ind & Comm Bk Of China-H 0.40 Hindustan Unilever Ltd 1,820.90 -0.42 905,742 4.98 352,390,209 Sino Land Co 11.74 1.56 9,963,896 John Wood Group Plc 450.80 4.11 2,053,777 Want Want China Holdings Ltd 6.61 Icici Bank Ltd 423.40 1.06 12,304,262 6.45 22,343,891 China Resources Power Holdin 10.52 0.77 3,508,792 Wpp Plc 959.20 0.69 3,028,460 Sun Hung Kai Properties 2.05 Indiabulls Housing Finance L 536.85 -2.52 22,835,367 119.20 7,828,504 Petrochina Co Ltd-H 3.85 1.32 58,162,778 Whitbread Plc 4,215.00 2.88 720,371 New World Development -0.38 Indusind Bank Ltd 1,442.50 0.24 2,484,182 10.38 31,678,024 Cnooc Ltd 11.46 0.70 44,447,898 Geely Automobile Holdings Lt 2.03 Infosys Ltd 777.65 0.40 3,881,451 11.06 52,010,474 China Construction Bank-H 5.77 0.70 432,427,842 Swire Pacific Ltd - Cl A 0.43 Indian Oil Corp Ltd 125.80 -0.36 4,774,896 81.85 2,195,458 China Mobile Ltd 66.25 0.30 21,183,981 Sands China Ltd 5.15 Itc Ltd 251.55 -0.57 12,524,627 36.75 15,107,465 TOKYO Wharf Real Estate Investment -1.45 Jsw Steel Ltd 226.20 -0.42 4,394,801 47.50 6,860,573 Clp Holdings Ltd 1.22 Kotak Mahindra Bank Ltd 1,496.35 -0.17 1,547,598 83.10 2,770,683 Country Garden Holdings Co 5.82 Company Name Lt Price % Chg Volume Larsen & Toubro Ltd 1,352.20 1.27 2,509,331 10.00 63,958,938 Aac Technologies Holdings In 3.76 Mahindra & Mahindra Ltd 520.55 -1.38 2,998,027 37.30 11,365,599 GCC INDICES Japan Airlines Co Ltd 3,308.00 1.07 870,700 Shenzhou International Group 1.00 Maruti Suzuki India Ltd 5,982.55 0.13 902,389 111.40 1,751,743 Indices Lt Price Change Recruit Holdings Co Ltd 3,311.00 -2.96 5,460,900 Ping An Insurance Group Co-H 1.63 Ntpc Ltd 118.90 0.93 9,653,434 90.60 34,717,040 Softbank Corp 1,500.50 -0.03 5,526,100 China Mengniu Dairy Co 31.25 1.13 8,747,919 Oil & Natural Gas Corp Ltd 126.30 -1.25 5,695,238 Doha Securities Market 9,806.13 +23.88 Kyocera Corp 6,369.00 0.49 625,600 Sunny Optical Tech 5.56 Power Grid Corp Of India Ltd 207.05 -1.94 4,556,305 100.70 12,455,832 Nissan Motor Co Ltd 663.40 0.70 8,288,500 Boc Hong Kong Holdings Ltd 27.40 3.20 18,871,251 Reliance Industries Ltd 1,292.60 1.14 7,459,859 Kuwait Stocks Exchange 4,825.41 -5.23 T&D Holdings Inc 1,007.00 2.14 2,268,400 China Life Insurance Co-H 2.91 State Bank Of India 286.85 -1.39 19,831,459 18.38 43,046,496 Toyota Motor Corp 6,873.00 1.22 3,266,000 Citic Ltd 9.26 0.87 9,421,711 Sun Pharmaceutical Indus 426.00 2.72 11,584,821 Oman Stock Market 3,868.62 +6.15 Kddi Corp 2,736.00 2.07 3,797,100 Galaxy Entertainment Group L 4.70 Tata Steel Ltd 359.55 -0.96 9,884,966 49.05 18,300,274 Nitto Denko Corp 4,915.00 2.52 595,500 Wh Group Ltd 6.49 1.88 79,884,962 Hitachi Ltd 3,670.00 0.16 1,314,300 Tata Consultancy Svcs Ltd 2,163.00 -0.10 974,884 Takeda Pharmaceutical Co Ltd 3,543.00 0.08 3,647,200 Tech Mahindra Ltd 670.35 1.72 2,871,173 Jfe Holdings Inc 1,227.50 1.28 2,456,900 Titan Co Ltd 1,088.95 1.22 1,467,603 Sumitomo Corp 1,552.00 1.31 3,176,400 Tata Motors Ltd 120.80 -0.45 23,194,786 Canon Inc 2,754.50 0.24 3,273,700 Upl Ltd 542.05 -1.27 4,932,998 “Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The Eisai Co Ltd 5,386.00 0.49 408,500 Ultratech Cement Ltd 4,158.15 -1.18 399,066 accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended Nintendo Co Ltd 39,960.00 0.60 842,700 Vedanta Ltd 144.30 -0.07 6,189,406 as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank Shin-Etsu Chemical Co Ltd 10,495.00 0.05 981,900 Wipro Ltd 252.10 1.16 2,770,076 or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on Mitsubishi Corp 2,571.00 -1.32 7,634,500 Yes Bank Ltd 76.65 -3.52 127,652,182 this data.” Smc Corp 39,320.00 0.67 127,300 Zee Entertainment Enterprise 348.05 0.42 6,986,559 Gulf Times 12 Tuesday, August 20, 2019 BUSINESS

Facebook S Korean activist fund KCGI contractor hikes pay eyes stake in Asiana Airlines for Indian content Reuters Seoul reviewers outh Korea’s activist fund KCGI, the second-largest shareholder Reuters Sin the parent company of Korean Bengaluru/San Francisco Air Lines Co Ltd, said it was looking to buy a controlling stake in Asiana Air- lines, helping send shares of the carrier acebook contractor Gen- up 26%. pact has raised minimum KCGI chief executive Kang Sung-boo Fwages for the content said the fund is in talks with several lo- moderation teams it runs for the cal and overseas entities to form a con- Silicon Valley fi rm in India, the sortium to bid for the 31.05% stake in latest sign of improvement for Asiana Airlines, which has been put up workers after reports of stress- for sale by top shareholder Kumho In- ful conditions at the social net- dustrial. work’s sites globally. The stake was worth $282mn at Fri- Facebook Inc has unveiled day’s close. several initiatives in the past six Kang’s comment comes as the local months to support well-being airline industry grapples with several in teams doing the sometimes challenges, including rising competi- gruelling and repetitive work of tion from budget carriers, a US-China wading through billions of po- trade war hitting cargo demand and a tentially harmful or violent posts Korea-Japan diplomatic row hurting on its platforms. travel. Reuters reported in February Korean Air Lines and Asiana Airlines on a group of workers at Gen- swung to operating losses for the April- pact’s offi ces in the southern to-June quarter, from a year earlier. Indian city of Hyderabad, who Asiana Airlines is expected to receive described the work they did as initial bids on September 3, followed by underpaid, stressful and some- binding bids in October, Kang said. times traumatic. Credit Suisse is managing the deal. Facebook at that time rejected An Asiana spokesman declined to the Hyderabad employees’ as- comment. sertions about low pay, saying it Kang said the country’s full-fl edged paid competitive wages for the carriers need to restructure and con- Indian market. solidate to reduce competition and Two sources familiar with the heavy debts.”I believe the entire airline matter told Reuters on Friday industry in Korea is in crisis,” Kang told that Genpact has since more Reuters over the phone. than doubled minimum salaries Shares of Asiana Airlines, South Ko- for new recruits to its Facebook rea’s second-largest carrier after Kore- A Boeing 777-28E aircraft operated by Asiana Airlines taxies on the tarmac at Incheon International Airport in South Korea. Asiana’s total debt was at 9.6tn won ($8bn) as teams to Rs250,000 ($3,503) a an Air Lines, ended up 11% after jump- of end-June, versus 7.1tn won as of end-2018. year. ing as much as 26% during trade. Based on job adverts and em- Its budget airline affi liate Air Busan ($8bn) as of end-June, versus 7.1tn won rience in the airline industry, analysts venture of Korean Air Lines, bought a run Korea Development Bank. South ployee paystubs, Reuters re- ended up 26%, in a broader market that as of end-2018. said. 5.13% stake in Hanjin Kal, giving a boost Korea’s chip-to-refi nery conglomerate ported earlier that the starting was up 0.7%. The carrier’s market value is at about KCGI has hiked its stake in Hanjin to the management of South Korea’s SK Group and retail-focused Aekyung salary for some graduate content Analysts said shares of the affi li- $1bn. Kal, the parent of Korean Air Lines, top carrier as it seeks to thwart KCGI’s Group, which also has a stake in budget moderators was just Rs100,000 ate were also buoyed by the possibility There are doubts whether KCGI has fuelling market expectations about challenge. carrier Jeju Air, were named as poten- ($1,401). that creditors could look to sell stakes the fi nancial capability to bankroll the a battle to control the family-owned Kumho has been looking to offl oad tial suitors for Asiana by local media, “We can confi rm that Genpact in Asiana Airlines separately from other deal, and even if it does, whether Asi- group following the death of patriarch its stake in the debt-laden Asiana, after but the two fi rms did not publicly say did recently raise salaries for assets like Air Busan. ana’s creditors would be comfortable Cho Yang-ho in April. the conglomerate came under pressure whether they were interested in the our team in India that supports Asiana’s total debt was at 9.6tn won with the sale to a fund with little expe- But Delta Air Lines, which runs a joint from Asiana’s creditors including state- bidding or not. Facebook as part of an annual review process that emphasises paying a competitive market rate,” the India-based technol- ogy outsourcing company said, responding to Reuters questions. As of February, Genpact em- Production from Pakistan’s 2 gas fi elds stopped ployed more than 1,600 employ- ees in its Facebook teams in Hy- derabad, more than 10% of the Internews cessitated by lower than committed off - unable to utilise it. On the other hand, the the gas network, fi nancial costs to the entire RLNG supply chain, the SNGPL 15,000 the social network said Islamabad take by the power sector,” he added. Pakistan State Oil (PSO) had been unable to national exchequer and international had said. were working on content mod- The offi cial said the reduction in indig- discharge its RLNG cargo from Gunvor ac- penalties, but without any outcome. It added that the “current level of sys- eration worldwide. enous gas supplies was made to run LNG cordingly and is set to be hit by a $5mn pen- The companies complained about tem pack has resulted in increase in line One of the sources said that he government of Pakistan has Terminal-I at 690mmcfd, adding that alty on Monday on a “take or pay” basis. lower than committed gas off -take by the pressures and red fl ags have risen across the recent hikes applied only to stopped production of cheap gas production from Sui and Nashpa fi elds The cost of domestic gas supply is cur- power sector and warned of serious con- the network”. new recruits and were not appli- Tfrom two major fi elds and drasti- was reduced to zero from 185mmcfd and rently less than $5 per mmbtu, compared sequences. The reduced gas consump- The PSO had reported that it was being cable to existing workers. cally reduced production from a third 85mmcfd, respectively, while that from to more than double the cost of imported tion has resulted in increase in system exposed to fi nancial and credibility risks. Both Facebook and Genpact one to ensure smooth fl ow of expensive the Qadirpur fi eld to 88mmcfd from LNG at around $11. pack which has reached 4925mmcfd on “It is rather unfortunate that instead of declined to comment on the de- imported liquefi ed natural gas (LNG) 145mmcfd. Even after this reduction, Gas companies and the PSO have been August 1 and then slightly reduced with improvement in the re-gasifi cation rates, tails of the increase in pay, but into the gas network facing capacity con- the line pack in the SNGPL (Sui North- agitating the issue at the highest level for the closure of domestic fi elds. the situation is getting out of control now the Indian company added in straints. ern Gas Pipelines Limited) network is almost six weeks now. The gas companies claimed that four in terms of delays in cargo unloading, re- its statement that the rise “re- A senior petroleum ministry offi cial still running at about 4800mmcfd and Interestingly, both the power and pe- major power plants Haveli Bahadur Shah, sulting in huge expected demurrages on inforces our commitment to our said gas production from the country’s RLNG consumption by the power sector troleum divisions are now under the ad- Balloki, Bhikki and Kapco were taking all incoming cargoes.” employees and helps us attract oldest Sui fi eld in Balochistan and Nash- is around 650mmcfd against the targeted ministrative control of the energy min- only 66% gas against their own orders, Sources in the Power Division said the and retain top talent.” pa fi eld in Khyber Pakhtunkhwa had been 850mmcfd. istry, led by federal minister Omar Ayub while the entire power sector consumed power sector had committed 850mmcfd Facebook in May raised mini- completely stopped, while that from the The offi cial said the power sector had Khan and assisted by the prime minis- about 630mmcfd against their alloca- for August and utilised up to 90% of mum wages for US content Qadirpur fi eld in Sindh had been reduced been on average lifting 150mmcfd lower ter’s adviser Nadeem Babar. tions of about 830mmcfd. those quantities in peak hours. They said moderators to $18 to $22 per by almost half. than its orders for almost two months. Earlier this month, the PSO and SNG- The continued reduced consumption the oil and gas companies should also hour depending on location from “The massive shutdown of over 327mn The SNGPL had booked these orders PL had sought intervention of the energy by the power sector and further packing have the fl exibility to absorb 10%-15% $15 nationwide, and last week cubic feet per day (mmcfd) from domes- on a fi rm “take or pay” basis meaning it ministry and the Prime Minister’s Offi ce would be a catastrophe not only for the gap in case of fl uctuation in electricity said it is still studying increases tic sources was unprecedented and ne- has to pay for the commodity even if it is in resolving an issue involving safety of system, but it might also jeopardise the demand. in other countries. Weak spot LNG prices don’t help Asia much, but boost Europe

By Clyde Russell for about two-thirds of the global market, has fallen before. China’s January to July imports of the super- Launceston, Australia by a considerably smaller margin. chilled fuel were 32.8mn tonnes, up 18.8% on 27.6mn South Korea paid $9.40 per mmBtu for its LNG in the same period a year ago, according to vessel- imports in July, which is only 6% less than the $10.01 tracking and port data compiled by Refinitiv. The price of spot cargoes of liquefied natural gas it paid for them in July 2018, according to customs However, for the whole of 2018, China’s imports (LNG) has ticked up recently in Asia amid tenta- data. This price would mainly reflect volumes under were 38.6% higher than for 2017. tive signs of some peak summer demand, but the long-term contract, but would also include cargoes China also buys a greater percentage of its LNG on problem remains that for many buyers the cost is still under spot contracts. the spot market, meaning it has managed to secure too high. For the first seven months of the year, South Korea some of the benefits of a lower spot price. While the market focuses on the spot price as a paid an average $10.22 per mmBtu for LNG, which It also has a fixed, low-priced long-term contract way of assessing the extent of oversupply, or the was 6.9% higher than for the same period last year. with Australia’s Northwest Shelf venture, which also strength of demand, it’s worth noting that the market Japan’s LNG cost an average $9.14 per mmBtu lowers the cost of LNG supplied to China. for short-term cargoes is dwarfed by the far greater in June this year, down only marginally from $9.79 The reliance on long-term contracts for much volumes procured under long-term, mainly crude for the same month a year ago, according to off icial of Asia’s supplies is probably largely responsible oil-linked contracts. data. for the mediocre growth in demand so far this This means that for many consumers of LNG, The fact that both Japan and South Korea haven’t year, with Refinitiv data showing the continent especially in the top- and third-ranked buyers Japan seen much benefit from lower spot prices for LNG is imported 139.3mn tonnes in the first seven and South Korea, the decline in spot prices is largely largely a reflection of the higher cost of Brent crude months of the year, up a mere 2.9% from the irrelevant. oil for much of the first half of 2019, with the price ris- same period in 2018. For weak spot prices to become relevant, demand ing from a closing low of $50.47 a barrel in November In contrast, Europe’s imports of 51.5mn tonnes in those countries has to be so strong that additional last year to a peak of $74.57 in late April. in the January to July period are up 87% from the cargoes over and above contracted volumes are While Brent and other crudes have been drop- 27.5mn in the same period last year, showing the con- needed. ping since the April high, the price is still above the tinent’s ability to take greater spot volumes is paying The spot price for cargoes delivered to North Asia November low, which is reflected in the still relatively dividends for its natural gas utilities. rose to $5 per mn British thermal units (mmBtu) in high price of contract LNG compared to spot sup- The problem for LNG producers is that they need the week ending August 16, the highest since late plies. It’s therefore not surprising that LNG imports in to boost demand for their product in order to sell June and 25% above the $4 trough reached in early both Japan and South Korea have been falling. their existing output, not to mention all the future August. For the first seven months of the year South production now in the pipeline. It’s also worth noting that the spot price reached Korea’s imports were 22.9mn tonnes, down from But in order to do so they will have to accept lower a northern summer peak last year of $12 in June, and 25.4mn in the same period last year. prices and more flexible pricing systems, and by do- was at $11 in the week to August 17, 2018, more than In Japan, imports for the first half were 38.6mn ing so they will undermine the economics of existing double the current price. tonnes, a drop of 8.2% compared to the same period and new ventures. But while spot prices have slumped as producers last year. in Australia and the United States commissioned new China, the world’s second-biggest LNG importer,  Clyde Russell is a columnist for Reuters. The plants, the long-term contract price, which accounts is still growing imports, but at a far slower pace than opinions expressed here are those of the author. Gulf Times Tuesday, August 20, 2019 13 BUSINESS

China plans to US assures support to American raise local debt sales tech companies in India in letter to $305bn

Reuters Bloomberg New Delhi Beijing

he United States ambassador to China is considering allow- India has written to top Ameri- ing provincial governments Tcan technology fi rms assur- to issue more bonds for ing them of support for a level playing infrastructure investment, fi eld in India, a letter seen by Reuters people familiar with the mat- showed, amid Washington’s concerns ter said, a move that would over New Delhi’s protectionist policies. boost government stimulus Kenneth Juster last month wrote as the economy continues to to the heads of leading US technol- decelerate. ogy companies in India, urging them to Policymakers may raise the “participate personally” in discussions annual quota for so-called with government offi cials in New Delhi special bonds from the on data localisation and e-commerce, current level of 2.15tn yuan issues that have soured trade ties be- ($305bn), according to the tween the two nations. people, who asked not to be Industry executives with direct named as the matter isn’t yet knowledge said it wasn’t common to public. The amount of the receive such letters from the US admin- increase hasn’t been decided istration, but described the commu- yet, one of the people said. nication as the latest sign of Washing- One person said the plan ton’s determination to deter India from was mentioned at a recent measures that hurt its fi rms. meeting of the State Council, “Our Embassy will continue working or cabinet, while another said with you to ensure that US fi rms com- the final decision probably pete on a level playing fi eld. still needs to be approved by My team at the Embassy stands by the National People’s Con- ready to help,” Juster said in his letter, a gress, China’s legislature. copy of which was seen by Reuters. The move shows that poli- “We look forward to your continued cymakers deem the current success in India.” level of stimulus insufficient The US Embassy in New Delhi did to counter rising headwinds not comment on the letter, but said US such as slowing investment companies were the biggest source of and the worsening trade foreign direct investment in India. “We war with the US. The quota hope that the Indian Government will for 2019 is already higher pursue policies that create a welcom- than the previous year, and ing and predictable environment for the government loosened US investors,” a spokesperson said in a the restrictions over how statement. the money could be used in The United States and big technology June. Economists have raised companies say India has taken a series Juster: Urging US technology firms to “participate personally” in discussions with Indian government off icials in New Delhi on data localisation and e-commerce, issues questions over whether the of protectionist measures by imposing that have soured trade ties between the two nations. money is actually being used stricter foreign investment rules for the effectively. online retail sector and outlining plans try barriers for foreign fi rms and favour the countries had agreed to continue industry offi cials in recent weeks, some in future meetings with the Minister The finance ministry didn’t to force companies to store more of domestic Indian corporations, leading discussions “addressing mutual trade top American company executives have and other senior offi cials,” Juster said in immediately respond to a their data locally. to an unfair competitive landscape be- concerns”. not been forthright about expressing his letter. fax seeking comment on the The decisions have already dealt a tween the two. In his letter, Juster also said he had their policy concerns to the Indian gov- It was not clear exactly how many matter. China’s economic blow to companies such as Amazon. Indian offi cials have said the rules met Indian Trade Minister Piyush Goy- ernment, two other sources aware of companies received Juster’s letter, but growth continued to soften in com Inc, Walmart Inc, Mastercard and were aimed at protecting interests of its al who told him the government was the communication said. the sources said at least four US tech- July after posting the weakest Visa, and the proposed data rules will small traders and citizens’ privacy. adopting a “consultative approach” to “The Government of India is seek- nology fi rms had received it. pace since the early 1990s in also impact fi rms such as Facebook, Despite talks to resolve some of the the proposed regulations. ing stakeholder input, and, given the “It is not normal to get such letters, the second quarter. Twitter and Alphabet Inc’s Google. trade disputes, there has been no ma- There is some level of concern among importance of these issues, we strongly but these are not normal times,” said Local governments have Such proposals, critics say, create en- jor breakthrough: India said last month US offi cials that while Goyal has met encourage you to participate personally one of the executives. been told to finish sales of the existing quota by the end of September. Local officials had sold nearly 1.4tn yuan worth of bonds in the first six months of 2019, or 65% of the full-year quota, according Tax evasion threatens India budget target to data from the ministry of finance. As well as providing money Bloomberg are numerous cases of bogus billings, tax eva- for infrastructure spending, New Delhi sion and fake invoicing, according to tax con- allowing local governments sultancy and auditing fi rm Pricewaterhouse- to sell more debt after they Coopers LLP. “I wouldn’t expect this kind exhaust the existing quota ndia’s slowing economy could easily be of reform and tax regime to become stable also helps shore up credit the fall guy for Prime Minister Narendra quickly,” Pratik Jain, a partner at PwC India, growth data, as the bonds IModi government’s struggles with meet- said. sales are included in the total ing tax targets. But there’s another culprit: The government’s total tax revenue in the financing data and were a tax evasion. last fi nancial year ended March fell short of key support of the growth in A nationwide consumption tax, introduced target by Rs1.7tn ($24bn), according to pro- lending in July. in 2017 and widely regarded as a tool to im- visional numbers. That’s due in part to GST The next meeting of the prove tax compliance and boost economic collection trailing monthly target for most of NPC is on August 22 to 26, growth, may have failed to plug evasion, ac- the year. according to a statement cording to a report by the Comptroller and A revenue miss again will put the fi scal def- published on the legislature’s Auditor General of India, the auditor of gov- icit goal of 3.3% of GDP at risk, and limit the website. The public agenda ernment accounts. The number of Goods and government’s ability to spend on infrastruc- for the meeting includes a Services Tax returns fi led have declined, it ture and welfare programmes. regular discussion on the showed. The fi nance ministry expected GST to help government’s budget imple- Poorer tax compliance adds to the govern- boost GDP growth by as much as two per- mentation this year, but it ment’s revenue collection woes amid a broad- centage points. Despite lowering of the GST doesn’t specify if a new bond er slowdown in the economy, where demand rate to revive consumption, economic expan- quota will be reviewed. for everything from cookies to cars has taken sion has slowed, coming in at 5.8% for the One of the people said that a knock. Consumption, which contributes quarter ended March. as part of the change under almost 60% to India’s gross domestic prod- “This elephant has to move fast,” said Sac- consideration, the ministry uct, has been largely hurt by a shadow bank- chidananda Mukherjee, a professor at Na- of finance may improve ing crisis, which in turn has dragged growth tional Institute of Public Finance and Policy oversight of local govern- down to a fi ve-year low. in New Delhi. “It will take time compared to ment debt sales and how the The consumption tax was expected to developed countries where they have a good money is used. bring in an anti-evasive tax regime, but there IT platform and are more homogeneous.

China to base new lending benchmark on medium-term rates; shares rally on rate cut hopes

Reuters While China has pushed plenty of rates – surged 3.5%. However, some Under the changes, banks must set of 149bn yuan ($21.15bn) is set to expire currency loans were at a staggering Beijing/Shanghai liquidity into the financial system over analysts cautioned the reform may rates on new loans using the new next Monday. 147tn yuan ($20.87tn) at the end of July. the past year to shore up growth and not be equivalent to cuts in banks’ LPR as the benchmark for floating “We see chances for China to lower its A massive 28tn yuan in long-term has guided down short-term rates, actual lending rates, as they could still lending rates, rather than the PBoC’s MLF rate in the coming months,” said mortgage loans are exempt from the China’s announcement of key interest loan demand and fresh investment charge higher rates on riskier loans benchmark bank lending rate. Tommy Xie, economist at OCBC Bank. new scheme, analysts at Nomura note. rate reforms over the weekend has has been relatively subdued amid to smaller, private firms while giving Despite economic growth nearing 30- “However, we don’t see the urgency for OCBC’s Xie said the move is a fuelled expectations of an imminent weakening business confidence and state firms better terms. Still, Chinese year lows, analysts believe the PBoC is China to cut its MLF rate in August as “half step” towards interest rate reduction in corporate borrowing costs banks’ worries of more bad loans. banking shares far underperformed reluctant to cut interest rates system- China may want to take a wait-and-see liberalisation, and the link to the in the struggling economy, boosting Under the new mechanism, bank the broader market amid worries of wide due to fears of a further surge in approach to see how markets react medium-term lending rate may only be share prices yesterday. lending rates will be linked to the loan lower profitability for lenders. debt and possible property bubbles. and digest the latest liberalization.” temporary. The People’s Bank of China (PBoC) prime rate, which will be linked to the Reactions in the bond and the yuan It last cut the one-year lending rate in Market-based reforms “The current liberalisation focuses only unveiled the long-awaited reforms on PBoC’s medium-term lending facility markets were muted. 2015. on the lending rate while the deposit Saturday to help steer borrowing costs (MLF) interest rate, and that should “The new system itself doesn’t The market’s focus will be on where the The PBoC launched the LPR in 2013 to rate was left untouched... In the longer lower and support businesses hurt by establish a relatively smooth policy guarantee the actual lending rate will new LPR is set today. reflect rates that banks charge their run, China may also need to loosen the weak demand at home and a year-long transmission mechanism, said Ma Jun, be lower,” Goldman Sachs said in a The national interbank funding centre best clients. setting of deposit rate.” trade war with the United States. a policy adviser to the central bank. report. will publish the reference rate on the But the LPR reacted little to market Rating agency Moody’s said in a While the rate overhaul has been “In the future, if the policy interest rate “But given the current situation with 20th day of each month thereafter. demand and supply, with the one- report on Monday that the rate reform in the works for some time, the falls, the loan interest rate will also fall, weak activity growth, heightened trade Ming Ming, head of fixed income year rate hovering just under the could be negative for Chinese banks’ announcement came days after data which will help to reduce the financing war risks and a strong desire by the research at CITIC Securities in Beijing, benchmark one-year lending rate of profitability due to narrower lending showed the economy stumbled more cost of enterprises,” he said in remarks senior leadership to lower rates, we said he expects the first new rate will 4.35%. margins. sharply than expected in July, raising published on the website of state radio do expect actual lending rates to go be set lower to narrow the yield gap Chinese banks’ new LPR quotations will “Because of current market conditions, questions over whether more rapid yesterday. down.” between LPR and interest rate on the be based on open market operations, the implementation of the new LPR and forceful stimulus may be needed. China and Hong Kong stocks rose Australia and New Zealand Banking MLF, which is now 3.3%. That gap is the PBOC said over the weekend. loan pricing mechanism will directly Analysts believe the revamped loan on expectations the move will ease Group estimates that the reform is currently 101 bps. Banks will set rates on new loans by weigh on bank rates on new loans prime rate (LPR), which debuts today, corporate financing pressures. equivalent to making a 45 basis point Some analysts believe the central bank referring to new LPR rate, but existing and lower their net interest margins,” will be lower than the current level of China’s benchmark equity index (bps) loan rate cut. could cut the one-year interest rate on loans will still follow the original Moody’s said. “We expect that the 4.31%, but are divided over how much jumped over 2%, while an index Societe Generale believes the reform the MLF in order to guide borrowing contracts that were signed in line with banks with large loan exposures due funding costs will come down and how tracking start-ups – potentially the could lead to a more modest 10-25 bps costs lower. the benchmark lending rate, the central for re-pricing in the near-term will be quickly. biggest beneficiaries from lower cut in the new benchmark lending rate. A batch of one-year MLFs with a value bank said. China’s outstanding local- more immediately exposed.” Gulf Times 14 Tuesday, August 20, 2019 BUSINESS

Huawei’s Cathay remains under lens as 3 closest Chinese CEO takes fall for protests rivals

Bloomberg form rare Hong Kong alliance athay Pacifi c Airways Ltd is counting on the resignation of Cits British chief executive offi cer, Bloomberg Rupert Hogg, to move beyond the tu- Beijing mult that saw its employees’ participa- tion in the Hong Kong protests draw the ire of Beijing. But will it be enough? uawei Technologies Incoming CEO Augustus Tang has Co’s three biggest Chi- the delicate task of continuing to pla- Hnese rivals, normally vi- cate China, an increasingly important cious competitors, have agreed market for the 72-year-old airline, to a rare alliance in developing while also minimising the fallout from smartphone technology as Hua- staff , customers and investors as the wei widens its lead in the Chi- unrest in its home base continues to nese smartphone market. seethe. Xiaomi Corp, Oppo and Vivo Whether Tang – a long-time lieu- will introduce a protocol that tenant with Cathay’s biggest inves- allows wireless fi le transfers be- tor, Swire Group – succeeds or falters, tween the three brands’ phones Cathay’s story is having repercussions without a third-party app. A beyond the carrier itself. It’s become a beta version of the feature, simi- cautionary tale of modern-day China, lar to Apple Inc’s AirDrop, will with the country increasingly willing be available soon, according to to call out companies that want access press releases from Oppo and to its lucrative consumer market, but Xiaomi. Vivo also confi rmed the don’t toe the party line. tie-up via a Weibo post from its “This is the most appalling kowtow offi cial account. to Peking,” David Webb, a Hong Kong “As top-tier brands, the fi le- activist investor, wrote on his blog just transfer function will create a hours after Chinese state broadcaster, scale eff ect thanks to the huge CCTV, broke the news of Hogg’s depar- user base,” Oppo said in its press ture on Friday. “Every substantial em- release. The three companies ployer in Hong Kong, in both the public welcomed other Android phone and private sectors, has employees who vendors to their partnership, it have participated in marches that have added. frequently gone beyond their approved The united front comes at a spatial or time limits. Should all the time when Huawei has grown CEOs resign?” its China phone market share to After China’s aviation watchdog 37%, according to second-quar- slapped a string of demands on Cathay ter fi gures from research fi rm on August 9, the company appeared to Cathay Pacific’s chief executive off icer Rupert Hogg at a press conference in Hong Kong. The airline is counting on the resignation of Hogg to move beyond the tumult IDC. Vivo, Oppo and Xiaomi, swing into action, with Swire chair- that saw its employees’ participation in the Hong Kong protests draw the ire of Beijing. the closest competitors, all lost man, Merlin Swire, fl ying into Beijing market share in the quarter as to meet with the authority three days run Industrial & Commercial Bank of us now.” The Civil Aviation Adminis- The fi rm said it was a fraud. Cathay are based in Hong Kong and its hub is total demand in China shrunk later. But even with Hogg taking the China Ltd who fuelled Cathay’s plunge tration of China, or CAAC, barred staff suspended ticket sales from counters at the airport that had become a key site ahead of 5G network and de- fall, it’s unclear whether China, which last week to a 10-year low by blasting who took part in or supported Hong the Hong Kong airport due to tightened for the protesters. Last week’s airport vice launches. Shenzhen-based along with Hong Kong accounts for its “poor” handling of the crisis, ap- Kong’s protests from fl ying to the main- security measures from the airport au- shutdown as demonstrators occupied Huawei is aiming for a 50% share about half of Cathay’s revenue, will be plauded the top-level changes given land and demanded Cathay provide a thority, the airline said yesterday. key buildings added to Cathay’s woes, by the end of this year, Bloomb- satisfi ed. the company was “severely lacking in plan for improving fl ight safety and se- In a message to employees obtained with hundreds of fl ights scuppered. erg News reported earlier. The Global Times, a newspaper pub- crisis management competency.” curity. On Thursday, it said Cathay had by Bloomberg, Hogg said a change in While the fl ight attendants’ union Oppo and Vivo both track lished by China’s Communist Party, But he also off ered some caveats. complied with its demands. leadership was required so that Ca- acknowledged Cathay’s need to com- their histories to reclusive Chi- said Hogg’s departure may not be “I am not sure that replacing two top “This will pacify CAAC for now, but thay could move forward. “There is no ply with CAAC’s demands so they nese billionaire Duan Yong- enough to atone for Cathay’s “luke- personnel will be enough to meaning- it may not be the end,” said Shukor doubts that our reputation and brand can keep fl ying there, other workers’ ping, and waged a bitter battle warm attitude” to dealing with its fully enhance Cathay’s management,” Yusof, founder of aviation consultant are under immense pressure and this groups, including the Hong Kong Air- against then-No 1 vendor Xi- “radical” employees. Pilots and fl ight Zhao said in an e-mail responding to Endau Analytics. “Once you cave in, it pressure has been building for some crew Offi cers Association have so far aomi in 2014 and 2015. The sis- attendants from the airline took part in questions from Bloomberg. “More sets a precedence. It could embolden weeks – particularly in the all-impor- kept quiet. ter brands – Oppo’s supposed strikes and demonstrations related to likely, this marks a fi rst step.” CAAC to seek harsher measures.” tant market of mainland China,” he The company’s actions – which in- to be about great photography the protest, which has morphed from Zhao also criticised Cathay for what Cathay’s entanglement with the an- wrote. cluded voicing its support for Hong and Vivo’s founding was about opposing an extradition bill into a mass he described as a “hasty” decision to ti-Beijing protests stood out because For many, Cathay is an emblem of Kong’s embattled leader, Carrie Lam, being the best at audio – ag- repudiation of China’s hold over the fi re two pilots in connection with the of its stature and connection to Hong the years Hong Kong was governed by and the police, which have clashed vi- gressively expanded their busi- territory it took back in 1997. protests, saying the move raised ques- Kong, but it wasn’t alone. Britain, making it a target loaded with olently with protesters – risk trigger- ness in the vast rural areas of “Cathay Pacifi c’s latest gesture was tions about procedural justice. Within days of Cathay being casti- symbolism. The airline is almost half- ing a backlash from staff and its home China with handsome incen- viewed by many as too little to restore Meanwhile, Cathay’s fl ight attend- gated by CAAC and boycotted by state- owned by the two-century-old con- market, but that may pale in compari- tives to private electronic shop its scarred reputation and the loss of ants’ union lamented the departure of backed fi rms, luxury brands Versace, glomerate headed by the UK’s Swire son to the alternative of prolonging owners. Their resulting growth customers,” the Global Times said after Hogg and Loo. Coach, and Givenchy were forced to family, but now counts state-run Air Beijing’s anger. in the rural market prompted Hogg’s departure. Chief customer and Their workplace “is now and shall apologise for selling T-shirts that im- China Ltd. as its second-largest share- “The message China wanted to send Xiaomi co-founder Lei Jun to commercial offi cer Paul Loo resigned continue to be greatly infl uenced by plied Hong Kong wasn’t part of China. holder. was that they have the power and the visit local stores in the villages alongside the CEO. many unforeseeable elements,” ac- PricewaterhouseCoopers LLC was ac- Joshua Wong, the student activist will to do what they want to do,” said of Henan province to investigate Cathay shares rose 0.9% to close at cording to a Facebook post on Sunday. cused on Chinese social media – where who shot to fame during Hong Kong’s Endau’s Yusof. “Cathay is caught be- the popularity for himself. Xi- HK$10.70 in Hong Kong. The stock has Members are being asked not to discuss nationalistic posters are increasingly Umbrella Movement protests fi ve years tween a devil and the deep blue sea – aomi then stepped up marketing fallen about 4% this year, compared political topics while fl ying and be care- pushing the country’s causes – of ago, tweeted that Hogg’s resignation it’s the beginning of the end.” in lower-tiered Chinese cities in with a 1.7% rise in the Hang Seng In- ful on social media and outside of work not condemning the demonstrations showed how China was tightening its “Like many others in Hong Kong, mid-2017, about a year before its dex. hours discussing issues which could enough after a company-linked online grip over the city and its people. the future of the airline is in China,” he high-profi le public off ering in Zhao Dongchen, an analyst at state- “cause signifi cant eff ect on everyone of post appeared to support the protests. Most of Cathay’s 32,800 workers said. Hong Kong. Global funds now taking an ever more bearish view of copper’s prospects

By Andy Home London

There’s been a lot of talk about inverted yield curves over the past few days. Specifically, last week’s inversion of the two-year and 10-year US Treasury notes has raised the spectre of recession, sending tremors through US stock markets. Financial market analysts are poring over their historical data for clues as to how likely and how severe a global contraction might be. Those who follow the copper market, however, will know that “Doctor Copper” with his honorary degree in economics got there first. London Metal Exchange (LME) three-month copper has slumped from above $6,600 per tonne in April to a current $5,800. Global economic weakness is being led by the manufacturing sector with activity contracting or slow- ing just about everywhere. That includes China, the powerhouse of industrial Manufacturing activity is contracting in both China supply is in trouble again. The International Copper speculative short on the LME contract was 7.5% of dynamics pressuring Chinese smelters. Then again, metals demand. and the eurozone and stalling sharply in the United Study Group (ICSG) forecast in May that global mine open interest last Wednesday, compared with peak maybe the massed ranks of Chinese speculators just Funds are now taking an ever more bearish view of States. production would be flat this year. short positioning this year of 12.3% in June. haven’t been thinking much about copper at all. copper’s prospects on the CME market. The automotive sector, a key driver of demand for It will struggle to meet even that low-ball assess- No bears in China? It could be a problem if they do. The current “big short” is the biggest yet seen and metals such as copper and aluminium, is particularly ment. Looking back at the Shanghai copper contract the only surprise is that copper has not yet cracked weak as a cyclical downturn is compounded by the World mine production actually fell by 1% in the first While New York’s bearish and London’s more over the 2013-2016 bear market, Citi analysts under the weight of all this money. structural challenges of a mass migration to electric four months of 2019, according to the ICSG. ambivalent, the all-important Chinese segment of the identify five occasions when Chinese investors went It helps that copper is once again going through one vehicles. Smelters are having to accept extremely low speculative spectrum doesn’t appear to have any view. aggressively short copper, three times to the tune of of its periodic supply squeezes. Against such darkening prospects, a simmering US- charges for converting mined concentrate into refined Copper seems to have fallen off the investment around $4bn. It helps a lot more that Chinese speculators don’t China trade war is doubly negative, the broader impact metal. radar this year in China, possibly because there have The collective bear bets increased to $7bn and a yet seem ready to turn as sour on copper as the CME on global trade coming with a specific hit on already The 10-member China Smelters Purchase Team been better returns to be made in “hot” markets such huge $10bn on the other two occasions. bears. stuttering manufacturing supply chains. (CSPT) lowered its minimum treatment charges to as iron ore and, more recently, nickel. Citi’s conclusion is that if Chinese speculators were Funds were holding a collective net short of 68,545 The financial part of the copper market is betting $55 per tonne and 5.5 cents per lb for third-quarter The Shanghai Future Exchange’s copper contract to commit to a median-size bear attack, “we find that contracts on the CME copper contract as of August 13. there’s worse to come. deliveries. saw volumes slide by 24% in the first half of the year this would result in an $800-per tonne copper sell-off That was down by 6,052 contracts on the previous Supply squeeze That translates into an acute margin squeeze for and they are dwindling further this month. from $5,700 per tonne to $4,900.” week but the week-on-week change is insignificant higher-cost smelters with CSPT members starting to Current market open interest of 622,710 contracts is By which stage you wouldn’t need an inverted yield relative to the overall scale of bear positioning. The industrial part of the market is torn between talk about potential production cuts. low by Shanghai standards. curve to tell you something was very amiss in the Money managers’ short positions had hit a new the darkening macro clouds and copper’s still robust During past periods of low copper prices, too much It is the lack of any bear momentum on the Shang- global economy. all-time high of 118,448 contracts the previous week, micro dynamics. It’s clear there’s no shortage of refined production was as much the problem as demand. hai market that is helping copper withstand the bear Copper’s not there yet but it’s finely balanced with eclipsing the previous record big short in June 2019. copper right now. This time around, there is no flood of new mine sup- attack on the CME, according to Citi. uncommitted Chinese players holding the key to the Expressed relative to open interest, bear bets are as LME warehouses received almost 65,000 tonnes of ply. There’s not even a trickle. It’s possible that Chinese speculative money may next major move. large as they’ve been since the global financial crisis of metal last week, although the size of the deliveries may It’s noticeable that LME positioning isn’t nearly as be reluctant to short copper because it believes a new 2008-2009, according to analysts at Citi. have had more to do with storage than copper price bearish as that on the CME. round of government stimulus is on its way.  Andy Home is a columnist for Reuters. The You can understand the money men’s logic. drivers. Further up the supply chain, however, copper LME broker Marex Spectron estimates the net Bears may also be mindful of the supply-chain opinions expressed here are those of the author. Gulf Times Tuesday, August 20, 2019 15 BUSINESS Powell likely to use Jackson Hole to suggest Fed ready to cut

Bloomberg And some of them, including the risk of a to a Christmas tree. Some lights, such as “We have nothing to fear about a reces- way beyond the Fed, way beyond trade,” imposed a 10% surcharge on all dutiable Washington hard Brexit and political protests in Hong the steep drop in bond yields, are flashing sion right now except for the fear of said El-Erian, who is a Bloomberg Opinion imports to force other countries to revalue Kong, lie outside of the US and aren’t recession red. Others, such as solid retail recession,” Bank of America Corp Chief columnist. “It’s all part of a much deeper their currencies. At the same time, Nixon susceptible to the Fed’s influence. sales, are flashing a green all-clear or at Executive Off icer Brian Moynihan told malaise.” was pressuring the Fed to keep money Federal Reserve chairman Jerome Powell Fed watchers expect Powell to do nothing worst a cautionary yellow. Bloomberg Television on August 16. It’s the deglobalisation shock though that’s easy to aid his 1972 re-election bid. will have no lack of material to choose on Friday to disabuse investors of the Powell described the Fed’s policy path as The Fed is in a “lose-lose situation,” said Al- got the markets — and the Fed’s — atten- The moves helped pave the way for the from when he kicks off the central bank’s widespread perception that the central a “mid-cycle adjustment” on July 31 after lianz SE chief economic adviser Mohamed tion. The trouble, as Powell himself has subsequent collapse of the Bretton Woods annual Jackson Hole symposium Friday bank will reduce interest rates by another it cut rates for the first time in a decade. El-Erian. noted, is that the central bank doesn’t currency system. with a speech on the challenges for mon- quarter of a percentage point next month. Sheets, who sees one or two more rate If it cuts rates when the domestic econo- have a lot of experience in dealing with Now, “we are seeing a breakdown in the etary policy. But whether he’ll open the door to a half- cuts, said he’d be fine with Powell repeat- my is doing all right, it will be accused of worldwide trade tensions. global trading regime,” Obstfeld said. A deglobalisation shock touched off by point cut, which some traders are looking ing that description but he doubted inves- caving in to pressure from Trump and Wall “It’s something that we haven’t faced In recent decades, recessions have usually Donald Trump’s trade policy; super low in- for, is unclear. tors would be. Street. If it stands pat, it risks triggering before and that we’re learning by doing,” started in the US and spread to the rest terest rates, including $16.7tn in negative- “It’s certainly a possibility,” that the Fed The Fed chair though will want to avoid a financial-market disruption that could he told reporters last month. of the world. The danger today is that the yielding bonds; a never-ending presiden- will lower rates by a half point in Septem- feeding the pessimism in the financial damage the economy. While the direct eff ects of tariff s are not reverse could happen. tial assault on the Fed; and a rising risk of a ber, said Bruce Kasman, chief economist markets and seeing it spread more broad- On top of that, investors are increasingly large, what’s key is the impact that the China has reported the slowest growth US and worldwide recession. at JPMorgan Chase & Co. “But I don’t see ly, said Sheets, who is now chief economist questioning the ability of central banks policies have on business confidence and in industrial output since 2002, while “There are all sorts of hazards out there,” it. The data don’t justify that.” He puts the for PGIM Fixed Income. to spur their economies after a decade of financial markets, he said. Germany’s economy shrank as exports said former International Monetary Fund chances of a US recession in the next 12 Anne Anderson, head of fixed income sub-par and not inclusive-enough growth And they can change quickly in response slumped. An upcoming risk is Brexit as UK chief economist Maury Obstfeld, now a months at 40% to 45%. at UBS Asset Management Australia, in which monetary policy makers played to the latest Trump tweet. Prime Minister Boris Johnson has pledged senior fellow at the Peterson Institute for Former Fed off icial Nathan Sheets likened discusses bond yields and Fed communi- an over-arching role, El-Erian said. Obstfeld likened today’s situation to to take Britain out of the European Union International Economics. the economic dashboard facing Powell cation. Nothing to Fear “What’s going on in the global economy is 1971, when then President Richard Nixon on October 31.

Norwegian Air gets a lift from Google, Facebook unite bank stake sale

Reuters Oslo with Trump to protest Norwegian Air has agreed to sell its stake in banking company Norwegian Finans Holding for 2.22bn crowns ($246.7mn), boosting the loss- making airline’s finances and sending its shares sharply higher yesterday. Norwegian Finans Holding owns Bank Norwegian, a credit card company originally set up by against French tech tax Norwegian Air. The airline is selling its 17.5% stake to Cidron Xingu Bloomberg Limited, indirectly controlled by Nordic Capital Washington Fund IX and Sampo. The deal will boost Norwegian Air’s cash holdings by 934mn crowns and lead to an accounting gain he relationship between of 196mn. President Donald Trump The European aviation sector has been struggling Tand the largest US tech- with overcapacity, leading some airlines to off er nology companies has often been loss-making fares and a few smaller carriers to go frosty but a common opponent — bust. France’s plan to tax US tech giants “The sale of the NOFI shares is part of — will bring the two sides together, Norwegian’s strategy to strengthen our core at least temporarily. airline operations and focus on the transition Alphabet Inc’s Google, Facebook from growth to profitability,” Norwegian Air’s Inc and Amazon.com Inc are all acting chief executive Geir Karlsen said in a scheduled to testify in Washington statement. today in support of the Trump ad- While the deal could help the airline refinance a ministration’s eff orts to potentially €250mn ($277.6mn) bond maturing in December, punish France for enacting a 3% tax some analysts said the company may need to raise on global tech companies with at more cash from shareholders at a later time. least €750mn ($832mn) in global Norwegian late last year set out plans to slash revenue and digital sales of €25mn costs and focus on short-term profitability over in France. long-term growth, but has been hampered by France’s digital tax “is a sharp the worldwide grounding of the Boeing 737 MAX departure from long-established aircraft, of which the company has 18 in its fleet. tax rules and uniquely targets a While the airline’s earnings per passenger rose subset of businesses,” according to during the important early summer months, the prepared remarks a Google repre- increase was smaller than most analysts had sentative is scheduled to deliver in anticipated, hitting the company’s share price. the US Trade Representative’s Of- “Without an ongoing sustained improvement in fi ce hearing in Washington today. the unit revenue position or unit cost position “French government offi cials have of the business, we struggle to see how the emphasised repeatedly that the” company can get through the next 9 months tax is intended to target foreign without needing to return to capital markets for technology companies. A worker arrives at the Google headquarters in Mountain View, California. Google, Facebook Inc and Amazon.com Inc are all scheduled to testify additional equity,” Bernstein analysts said in a The US is probing France’s new in Washington today in support of the Trump administration’s efforts to potentially punish France for enacting a 3% tax on global tech companies research note. tax, which French President Em- with at least €750mn ($832mn) in global revenue and digital sales of €25mn in France. Bernstein has an ‘underperform’ rating on manuel Macron signed into law last Norwegian Air shares with a target price of 10 month, using a tool that could be ogy companies that are both worried multiple times on the same profi ts. ing their own version of a digital in Congress. In a letter to Treas- crowns. a precursor to new tariff s or other foreign governments are looking to Trump has threatened to tax tax should focus on ongoing global ury Secretary Steven Mnuchin in The NOFI shares were sold at 68 crowns each, a trade restrictions. US Trade Rep- use American Corps as a way to col- French wine or other goods in re- talks with 130 countries on how to June, Senators Chuck Grassley, an 15.4% premium to Friday’s close of 58.90 crowns. resentative Robert Lighthizer could lect additional tax revenue. sponse to the digital tax. He tweet- tax tech companies. Any future pact Iowa Republican, and Ron Wyden, Norwegian Air’s shares were up 5.8% to 33.4 take action as soon as Aug. 26 when The US is looking to use France ed last month “we will announce would likely create a whole new set an Oregon Democrat, urged the US crowns at 0825 GMT, off an early high of 36 a comment period on the issue as an example to deter other coun- a substantial reciprocal action on of rules governing which countries to look at “all available tools under crowns. closes. tries from targeting American Macron’s foolishness shortly!” have the right to tax the companies, US law to address such targeted and Norwegian Finans was up 16.1% at 68.40 crowns. The eff ort to crack down on France technology fi rms for tax dollars. The so-called 301 investigation, which corporate profi ts are taxable, discriminatory taxation.” “The buyers, Sampo and Nordic Capital, already has created common ground for The UK, New Zealand, Spain and which looks into unfair trade prac- and how to resolve the inevitable The lawmakers included a sug- own consumer lender Nordax and have earlier Trump — who has called Google and Italy are among countries con- tices, is the same tool Trump used disputes that would arise. A deal gestion to use a section of the tax said they will seek consolidation in the industry,” Facebook “on the side of the Radical sidering their own digital taxes, a to slap tariff s on China over alleged could be reached as soon as next code that would double the rate said DNB Markets, which has ‘buy’ ratings on both Left Democrats” and accused Ama- move that US offi cials say could intellectual-property theft. year. Opposition to France’s tax is of US taxes on French citizens and the airline and Norwegian Finans. zon of avoiding taxes — and technol- lead to companies being taxed The US says countries consider- a rare area of bipartisan agreement companies in the US. Amazon takes Alexa on the road to catch up with Google and Apple

Bloomberg While colonising the car probably won’t or set the climate control from an Alexa and dashboard entertainment startup a software company in Massachusetts. When it was released, analysts said the Seattle generate much in the way of revenue at device. Drivetime. Another 32% opt for the soft- “Each of these manufacturers wants to Echo Auto seemed to fill a gap in the mar- first, just being there would help Amazon Amazon formalised its push a year later, ware included in their car’s entertainment preserve their own brand” in the car, ket, off ering a device that promised to bring position itself for a coming era of voice- hiring Curic, an executive with Toyota system while 6% use diff erent technology, says Richard Mack, a Nuance marketing modern voice control to older car models. Somewhere between Spotify crashing and based services. “Amazon wants to get into Motor Corp.’s North American subsidiary, including the Echo Auto. executive. “When you press that button It drew more than 1 million orders, Amazon Alexa failing to locate his favourite sushi the car in a big way,” says Mike Ramsey, a to run the automotive eff orts. Curic’s team “Amazon’s Achilles heel is not having a on the steering wheel, Mercedes would said, though the device is still shipping in place, Rafael Rivera decided he was deal- senior research director at Gartner who plucked staff from Lab126, the San Fran- play on the phone,” says John Foster, chief much rather see their emblem come up batches and only to invited customers. ing with an unfinished product. tracks the auto industry. “They sense that cisco Bay Area hardware division behind executive of Aiqudo Inc a startup working rather than a Google or an Amazon or a Reviewers said the device lacked polish, The software developer’s rectangular there is a big opportunity.” the Echo speaker, and Amazon Web Serv- to tailor mobile applications for voice con- Microsoft logo.” coming off at times like a work-in- Echo Auto, perched on the dashboard Amazon declined to make anyone avail- ices, the company’s cloud-computing arm. trol. “They’re going at it the best way they Amazon has tried to assuage carmakers progress. A reviewer at tech news site of his 2005 Mini Cooper, picked up his able to discuss the program, but a spokes- Amazon also went shopping for recruits can. But I do think they suff er from this worried about Google or Apple’s potential the Verge said some of the auto-focused voice seamlessly over blaring music or air man pointed to comments Ned Curic, vice who knew their way around the industry, disadvantage that Google is really starting automotive ambitions by suggesting Alexa applications Amazon touts on its website conditioning. But repeated restarts and president of Alexa Automotive, made last to make clear.” could be one among several voice assist- “are laughably bad right now.” clunky mapping made the on-the-go hub month to the Automotive News: “The real Introduced almost a year ago Google, the company behind Android, the ants embedded in a future entertainment It’s harder to get a read on how customers for Amazon.com Inc.’s Alexa less useful. North Star for us is to be embedded with and shipped to the fi rst invited world’s most popular operating system, system, according to two people who have feel because Amazon, which helped popu- “Am I part of a beta program?” he recalls all the cars,” Curic said. “We’re working customers in January, the has gotten automakers on board, building heard the pitch, but aren’t authorised to larise online product reviews, has disabled thinking. “Is this thing done?” very hard to get there because we believe sometimes-buggy Echo Auto is ties that could be used to hook drivers into publicly discuss it. Amazon last year re- customer reviews for the Echo Auto. Introduced almost a year ago and shipped that is the best experience.” the most visible element so far Google’s Assistant, Alexa’s biggest rival in leased tools that let carmakers build Alexa Ryan Adzima, who bought one to replace to the first invited customers in January, The company has said it wants to make of Amazon’s ambition to take the US Fiat Chrysler Automobiles, Renault- into their cars. The company has also tried the outdated voice control system that the sometimes-buggy Echo Auto is the Alexa, its hub for trivia, music and Amazon Alexa on the road Nissan-Mitsubishi and Volvo are all build- to leverage Alexa’s popularity in the home, came standard in his Jeep, is a fan. The most visible element so far of Amazon’s products, ubiquitous. The company built ing entertainment systems on Android. saying to potential partners that custom- owner of five Echo smart speakers figured ambition to take Alexa on the road. teams in recent years charged with mak- seeking veterans of German stalwarts like “Google has a much bigger footprint in the ers would rather use voice software the device’s introductory price tag of $25 Behind the scenes, the company is ing the software useful beyond the living Daimler AG, BMW and Volkswagen, com- auto industry than Amazon does,” says they’re already familiar with than learn a was a bargain compared with replacing his trying to persuade automakers to bake room, seeking ties to home automation panies that have been among the most Ramsey, of Gartner. “They’re getting big new program while behind the wheel. entertainment system or buying a voice- the voice-activated digital assistant into and security companies, building out aggressive in exploring voice software. wins. Amazon is just starting to scratch the As Curic’s team negotiated with car- activated navigation system. their entertainment systems. Those voice and video calling functionality and Hanging over the exercise to take Alexa surface.” makers, Lab126 engineers got to work He liked the device, which heard his com- efforts are gaining some traction — BMW even exploring wearable devices and on the road is Amazon’s failure to build a Other carmakers are going their own on an end around, repurposing the mands over road noise with the windows and Audi earlier this year began selling home robots. smartphone to rival Alphabet Inc’s Google route. Echo speaker’s microphone arrays and open and top down and easily handled select models that integrate Alexa’s The first tie between Alexa and an auto- and Apple. About 62% of people who use Some, like Daimler’s Mercedes, have software, originally designed for homes, tasks like calls and music. Connectivity, software by default. But Amazon is maker was, like many Amazon eff orts, their voice to control music or other ap- thrown their weight behind proprietary for noisy car environments. The device dependent on sometimes spotty wireless entering a market already contested by an experiment. In 2016, Hyundai Motor plications in their car today do so through voice software. The Mercedes-Benz User avoided dealing with in-car communica- service around his Las Vegas home, left Google and Apple Inc, not to mention Co. rolled out the first application linking a smartphone, a market dominated by Experience system, like many automaker- tions systems entirely by piggybacking off something to be desired, forcing him to automakers leery of ceding control of Alexa to a big carmaker in a tool that let Google and Apple, according to a survey branded software, is powered by technol- of customers’ smartphone to connect to reach for his phone to skip songs by hand the dashboard to Big Tech. owners of some models start their vehicle by voice technology news site Voicebot ogy built by Nuance Communications Inc, Alexa servers. when Alexa’s servers couldn’t be reached. Tuesday, August 20, 2019 GULF TIMES BUSINESS Opec’s trimmed global demand forecast caps oil gains

www.abhafoundation.org in the second quarter. Also capping delivery are estimated to be about oil’s weekly gains was Baker Hughes $4.20 per mmBtu. energy data showing US energy firms Japanese utility Tohoku Electric Oil increased the number of oil rigs Power is seeking its second LNG cargo Oil prices on Friday rebounded from operating for the first time in seven in a month as parts of the country a two-day drop, alongside equities, as weeks, suggesting a slight increase in scorches through a deadly heatwave, expectations of further stimulus by future output. while buyers tap the spot market amid global central banks helped to ease higher prices for term cargoes. Traders recession concerns. However, oil gains Gas said higher-than-usual temperatures in were capped after Opec trimmed Asian spot prices for LNG remained the North Asian country were stoking its global oil demand forecast in a steady last week as sweltering heat demand for power generation and downbeat outlook for the rest of 2019, in Japan drove buying activity, while pulling down gas inventory. Demand even as economic growth slows. Opec a new project in the US is expected from India was also seen last week also highlighted potential challenges to load its first cargo. Spot prices for with Gujarat State Petroleum Corp in 2020 as rivals plan to pump more, October delivery to Northeast Asia are (GSPC) and Indian Oil Corp each Petroleum Exploration Company between September and October  This article was supplied by the building a case to keep up an Opec-led estimated to be about $4.70 to $4.90 seeking a cargo for delivery over (KUFPEC) and Russia’s Sakhalin 2 to narrow given the roll-over in the Abdullah bin Hamad Al-Attiyah pact to restrain supplies. Brent crude mmBtu, slightly up from last week’s August to October. Supply remained plant off ering cargoes for September. pricing assessment month, and that International Foundation for Energy ended the week up 41 cents, or 0.7%, $4.75 per mmBtu. Prices for September ample, with both Kuwait Foreign Traders expect the price spread will likely limit floating storage options. and Sustainable Development. at $58.64 a barrel, after falling 2.1% on Thursday and 3% the previous day. US crude rose 40 cents to settle at $54.87 a barrel, having dropped 1.4% in the previous session and 3.3% on Wednesday. Before Opec’s August report, Brent touched a session high of $59.50 and US crude traded at $55.67, as investors expect further interest rate cuts from the Federal Reserve and moves by the European Central Banks next month to fight softening growth. For the week, both oil benchmarks made small gains after two consecutive weeks of losses, even as Wall Street’s three main indexes were on track to rack up their third weekly loss, and investors worried about the risk of a recession and US-China trade tensions. Earlier in the week, data releases included a surprise drop in industrial output growth in China to a more than 17- year low, and a fall in exports that sent Germany’s economy into reverse

BANKING ON KNOWLEDGE Trump says US is talking with Yet another global financial China but not ready for a deal meltdown could be in offing?

Bloomberg week in fi nancial markets that included an Washington 800-point dip in the Dow Jones Industrial Av- erage on Wednesday, its worst rout of the year. The state of the economy is key to Trump’s resident Donald Trump said the US is re-election prospects in 2020; a downturn “doing very well with China, and talk- would dim the outlook for a president whose Ping!” but suggested he wasn’t ready to approval ratings have stayed stubbornly low. India is also witnessing slowdown the benchmark 10-year Treasury sign a trade deal, hours after his top economic Major US equity indexes, often referenced by in the consumption and manufac- note was at 1.623%, below the adviser laid out a potential timeline for resump- Trump as a litmus test of his success, are es- turing sectors and bank lending. 2-year yield at 1.634%. tion of substantive discussions with Beijing. sentially fl at over the past 12 months. Increased trade and technology The yield curve inversion has Trump vowed that the US was “poised “There’s no recession on the horizon,” tensions that dent sentiment and raised concerns of recession. for big growth” after various trade deals are Kudlow said on Fox. He added that there slow investment; a protracted Long-term yields have plum- reached. But speaking to reporters as he de- Speaking to reporters as he departed were no plans for additional fresh measures increase in risk aversion that ex- meted in August on concerns parted New Jersey for Washington on Sunday, New Jersey for Washington on to boost the economy, and that the Trump poses the financial vulnerabilities surrounding trade developments Trump said China needs a trade agreement Sunday, Trump said China needs a administration would stay the course on its continuing to accumulate after and GDP growth — coupled with more than the US given the relatively weak trade agreement more than the US current agenda. years of low interest rates; and expectations for lacklustre infla- condition of the Asian nation’s economy. given the relatively weak condition of “Consumers are working, at higher wages,” mounting disinflationary pres- tion and more aggressive central Trump made about 40 minutes of wide- the Asian nation’s economy Kudlow said on NBC’s Meet the Press. “They By Dr R Seetharaman sures that increase debt service bank action. ranging remarks after more than a week spent are spending at a rapid pace. They’re actually diff iculties, constrain monetary Central banks around the world, at his golf club in Bedminster, New Jersey. already under investigation after Huawei said saving also while they’re spending — that’s an policy space to counter down- including the Federal Reserve, The president tied trade negotiations with it misdirected some packages, and China has ideal situation.” According to the IMF in July, turns, and make adverse shocks have pivoted once again to the ongoing situation in Hong Kong on- been preparing to add the US company to a Navarro, on ABC’s This Week, predicted “a global growth is forecast at 3.2% more persistent than normal. easing policies. The eurozone’s camera for the fi rst time, saying that a deal blacklist of so-called unreliable entities, peo- strong economy through 2020 and beyond.” in 2019. GDP releases this year, There is escalation in trade ten- GDP barely grew in the second between the US and China would be harder if ple familiar with the matter have said. On CNN, Navarro disputed that the US had together with generally softening sion between the two largest quarter of 2019 as economies there’s a violent conclusion to protests there White House economic director Larry seen an inverted yield curve, often a forerun- inflation, point to weaker-than economies, the US and China, in across the bloc lost steam, and because of concerns raised by US lawmakers. Kudlow said earlier Sunday that recent phone ner of recession because it signals market ex- anticipated global activity. Invest- recent times has contributed to the largest, Germany, contracted He tweeted last week that “of course China calls between US and Chinese trade negotia- pectations for weaker growth ahead. ment and demand for consumer the volatility in financial markets. due to a global slowdown driven wants to make a deal. Let them work hu- tors had been “positive,” potentially opening “Technically we didn’t have a yield curve durables have been subdued Global financial markets certainly by trade conflicts and uncer- manely with Hong Kong fi rst!” the door to further progress toward a deal. inversion,” he said on State of the Union. across advanced and emerging fear the worst. tainty over Brexit. Trump also pushed back on media reports More teleconference meetings with Chinese “All we’ve had is a fl at yield curve.” And market economies as firms and Share prices slumped last week Major government debt in this weekend that the Commerce Depart- negotiators are planned over the next week to that, said Navarro, was “the result of a very households continue to hold back amid fears that the first recession countries like Germany now have ment is poised, as soon as Monday, to renew 10 days, the White House National Economic strong Trump economy.” As the stock mar- on long-term spending. Accord- since the big crash of 2008-09 negative yields. Huawei Technologies Co’s temporary general Council director said on Fox News Sunday. ket was tumbling on Wednesday, Trump ingly, global trade, which is inten- is just around the corner. Major Gold and silver prices are at license to buy supplies for the US. “Huawei is “If those deputies meetings pan out, as we lashed out at Federal Reserve Chairman Jer- sive in machinery and consumer global markets witnessed a fall in $1,513.52/ounce and $17.1133/ a company that we may not do business with hope they will, and we can have a substantive ome Powell on Twitter, specifi cally citing the durables, remains sluggish. the range of 1% to around 4% last ounce by the end of last week at all,” Trump said, calling the Chinese com- renewal of negotiations, then we are planning “CRAZY INVERTED YIELD CURVE.” For advanced economies, growth week. However India and China and has surged by more than 18% pany a “national security threat.” to have China come to the USA and meet with Navarro once again criticised Powell and is projected at 1.9% in 2019. The were able to recover a bit during YTD and 10% YTD respectively on “We’ll see what happens. I’m making a de- our principals to continue the negotiations the Fed on Sunday. “The Federal Reserve emerging market and developing the week. account of global recession fears cision tomorrow,” Trump said. and the talks,” Kudlow added. chairman should look in the mirror and say ‘I economy group is expected to China pledged to launch counter- and geopolitical tensions. FedEx Corp is in more trouble in China, Kudlow and Peter Navarro, Trump’s trade raised rates too fast,’” he said on CNN. grow at 4.1% in 2019. measures if White House carries Interest rates are making historic after Fujian province started an investigation adviser, made multiple appearances on Sun- Additional Fed rate cuts beyond the quar- In China, the negative eff ects of out its recent plan to impose 10% moves globally and the pressure into a package containing a gun that the com- day talk shows to discuss the economy and ter-point move in July will be a good thing, escalating tariff s and weakening tariff s on an additional $300bn of is now on Fed chair Jerome Powell pany delivered to a fi rm in China. FedEx was China trade prospects after a tumultuous Navarro said. external demand have added Chinese imports, but a spokes- to clarify the Fed’s intention when pressure to an economy already person from China’s Ministry it comes to interest rate cuts. in the midst of a structural of Foreign Aff airs later said it Accommodative policies alone slowdown and needed regula- hoped the US would meet China would not be suff icient; markets tory strengthening to rein in high halfway on trade issues. Rising want to know whether the Fed is dependence on debt. With policy trade tensions could hurt the in a serious longer-term cutting stimulus expected to support economy by making households cycle, or just planning a few cuts activity in the face of the adverse and businesses too nervous to as an insurance policy against an external shock, growth is forecast spend money. economic downturn. at 6.2% in 2019. Last week the US 30-year Treas- Powell’s speech at Jackson Hole India’s economy is set to grow ury yields fell to a record low of this Friday is expected to be the at 7.0% in 2019.The emerging below 2% and benchmark 10-year key event to look forward to as economies are also witnessing notes dropped to a three-year yet another global financial melt- a slowdown with data showing trough amid persistent worries down could be in the off ing. that growth in China’s industrial about global trade tensions and output in July rose at the slowest economic slowdowns. Prior to  The author is Group CEO pace in more than 17 years. this, last Wednesday the yield on of Doha Bank.

Germany warns of possible recession, mulls stimulus

AFP ers, Europe’s biggest economy will enter what it Frankfurt technically defines as a recession should GDP shrink further. Alarmist signals are reviving the political debate be- The German economy could enter a recession in the tween those who support the German government’s third quarter, the Bundesbank warned yesterday, as dogma of balanced budgets and those seeking more the debate on government measures to support the flexibility in order to revive the economy. economy swelled in Berlin. Germany can aff ord it on paper after five consecu- “The economy could contract again slightly” this sum- tive years of budget surpluses and interest rates for mer, Germany’s central bank said in its monthly report, long-term loans that are extremely attractive to the following a 0.1% decline in gross domestic product federal government. (GDP) in the second quarter. “According to data cur- As US-China tensions intensify, economists have rently available, industrial production is expected to urged Berlin to fork out cash to avoid a recession, shrink markedly in the current quarter as well.” but Chancellor Angela Merkel’s government has Having seen a decline in trade against the backdrop previously said things were not yet bad enough to of the US-China trade war, two of its main custom- warrant loosening the purse strings.