PRICE DIRECTION | Page 4 As oil plunges, G20 seen real Opec meeting

Sunday, November 25, 2018 Rabia I 17, 1440 AH QATAR’S IMPRESSIVE GROWTH : Page 20 QFC discusses role GULF TIMES of business hubs in wealth creation BUSINESS at global summit

French exports to Qatar jump 140% in 3rd quarter: Envoy By Peter Alagos ments in France, saying FDI from Qatar has Qatar are committed to excellence in busi- Business Reporter now exceeded QR72.8bn, or €18bn, “which ness.” refl ects France’s call to Qatari public and “The key success is their high-quality private investors.” project performance. Their projects deliver rance has recorded a surge in its ex- “They include participations in some of a high expected value on time and within ports to Qatar in the fi rst nine months the biggest French companies (AccorHo- budget, in line with the motto ‘Qatar De- Fof 2018, a 140% jump compared to tels, Total, Engie, and Vinci, among oth- serves the Best,’” Gellet said. same period last year, according to French ers), real estate assets, and investments in “They are keen on making long-term ambassador Franck Gellet. fast-growing SMEs and start-ups, for the commitments, hiring and training local With Qatar Airways as one of its major latter ones mostly through our joint in- talents, and investing in research and de- clients, the ambassador said Airbus air- vestment fund – ‘Future French Champi- velopment here in Qatar,” the ambassador craft sales spearhead France’s exports to ons’ created in 2013,” Gellet told Gulf Times continued. Qatar. Other exports include pharmaceuti- in an interview. Asked about recent reforms implement- cal products, which saw a more than 110% According to Gellet, French investments ed in Qatar such as the recent Amiri decree surge in 2018 over the same period last in Qatar “have also been on the rise,” re- allowing 100% foreign ownership and its year, as well as chemical products and per- fl ecting the “dynamism” and the “level of role in attracting international companies fumes (12%), and metal products (360%). commitment” of French companies operat- to Qatar, Gellet said the decree will entice For the past years, Gellet said Qatar- ing in Qatar, “some of which for decades.” more French fi rms to Qatar. France trade volume “has been system- “As many as 200 French companies “French companies have know-how in atically close to QR12bn, or €3bn.” How- are working alongside public and private various sectors such as agro-food, health, ever, with the current volume signifi cantly stakeholders on key projects in oil and Information and Communication Tech- breaching the QR12bn mark, the ambassa- gas, electricity and water, transport, ur- nologies, logistics, transport, and aero- dor pointed out that “2018 is on track for ban development, and other fi elds, assist- nautics –all sectors in which Qatar intents breaking a record.” ing Qatar in achieving its goals, enshrined to expand her own capacities. This decree Citing offi cial Qatari fi gures, Gellet un- in the Qatar National Vision 2030,” Gellet should therefore encourage French FDI in- derscored the importance of Qatari invest- stressed. “French companies operating in fl ows to Qatar,” Gellet said. Page 20 Gellet: Long-term commitments. Gulf Times 2 Sunday, November 25, 2018 BUSINESS Two Iran oil buyers ‘unlikely to resume before Feb’

Bloomberg Korea could take until March, a collapse in prices on concern insurers and shippers from deal- crude in London has fallen more Turkey and Taiwan also won said Sanjiv Singh, chairman Singapore according to people with that a glut is emerging. But if ing with the Gulf state. That than 10% since waivers were exemptions. of the Indian Oil Corp. While knowledge of the matter, who it’s now going to take some of means that, even though buyers given to eight countries in early- Among those that received South Korea used to be the asked not to be identified be- the biggest buyers longer than of Iran’s oil received waivers, the November, as fears of an over- waivers, China, the biggest third-biggest importer of Ira- t may take until February or cause it’s confidential. The two expected to resume purchases, actual process of getting barrels supplied market outweighed buyer of Iran’s oil that’s allowed nian oil, it was the first major even later for some of Iran’s countries are among a handful that could slow the build-up in isn’t proving easy. earlier concerns of a defi cit. to purchase 360,000 bpd, has buyer to cut to zero as the US Ibiggest oil buyers to resume that won exemptions from the supplies as they seek alternative Some buyers may have to use Almost all major buyers of resumed imports from the Is- prepared to impose sanctions. purchases after winning waivers US to keep importing Iranian sources, and take pressure off Iran’s national tanker company Iran’s oil had negotiated with lamic Republic for loading in It’s now allowed to buy as much from the US as they seek to re- oil without falling foul of sanc- prices. to haul the crude as the risk of the US for the waivers, argu- November, according to people as 200,000 bpd of condensate, solve complications over insur- tions. The US sanctions haven’t getting cut off from US business ing that cutting purchases to with knowledge of the matter. a type of ultra-light oil. The ance, shipping and payments. Washington’s decision to al- just impacted countries doing prompts other shippers to stay zero would affect their energy India’s state-owned refiners country bought about 300,000 Japan is unlikely to lift car- low some Iranian crude ship- business with Iran, they’ve also away, according to the people. industries and boost fuel costs. also plan to buy 1.25mn tonnes bpd of South Pars condensate goes before then, while South ments to continue helped trigger deterred fi nancial institutions, Price of global benchmark Brent India, China, Italy, Greece, in November and December, from Iran in 2017.

Goldman takes on tough sell of Saudis letting wallets do the loss-making pay-TV firm OSN talking amid the call for

Bloomberg Dubai

Goldman Sachs Group Inc may boycott of Turkish products have a hard job finding a buyer for the Middle East’s biggest pay-TV Bloomberg that could be particularly aff ected, service. Dubai/Istanbul she said. Pinar said it’s “watching the Competition from the likes of developments” but didn’t comment Netflix Inc, Amazon Prime Video further. Yildiz Holding, Ulker’s parent and other services have crashed iscuits and yogurt are emerg- company, declined to comment. the value of Kuwait-based OSN, ing as weapons of choice for The standoff hints at a deeper strain which is up for sale – not for the BSaudis lashing out at Turkey for between the two biggest economies in first time in the past five years. hounding their government over the the Middle East. In public, the Saudi OSN’s controlling shareholder, grisly murder of Jamal Khashoggi in government has taken a more con- Kuwait Projects Co, is now working Istanbul. ciliatory tone, with most criticism of with the US bank on options for the Pro-government Saudis have Turkey so far confi ned to social and company after hiring Rothschild in been calling for a boycott of Turk- traditional media. 2013 to evaluate a possible share ish products on Twitter. Among While the authorities in Ankara sale. Rothschild’s mandate ended in the biggest targets are dairy pro- have kept mum, many Turks vented 2014 after the IPO didn’t take place. ducer Pinar Sut Mamulleri Sanayii their anger at Saudi Arabia on Eksiso- But times and viewing habits have AS and Ulker Biskuvi Sanayi AS, zluk.com, one of the country’s largest changed since OSN was valued at which has two plants in Saudi Ara- online platforms, compiling 30 pages $4.3bn by Arqaam Capital in 2013. bia and ranks No 1 in its biscuits of comments on the subject. The following year Kuwait Projects market. Meanwhile, the hashtag urging us- rejected a $3.2bn off er from an “The objective is not to destroy the ers to name Turkish companies to be unnamed US buyout firm – a economy,” Naifco, a pro-government blacklisted was trending on Twitter decision it’s likely to be regretting Saudi user who promoted the cam- in Saudi Arabia, indicating the topic’s now. paign, tweeted to more than 500,000 popularity. Another campaign that Kuwait Projects’ share of profits followers. “It’s to express our anger in began on social media last month from OSN slumped to a loss of a civilised way.” called on hundreds of thousands of 19.8mn dinar ($65mn) in the first six Political ties between Turkey and high-rolling Saudi visitors to boycott months of the year, compared with Saudi Arabia were already strained be- Turkey. a profit of 11mn dinars in 2014. fore the murder of Khashoggi, but the Saudi tourists spend $1,200 per At the end of September, Kipco economic relationship had endured person in Turkey, surpassing Germans classified OSN as a non-current any public sabre-rattling from their and Russians, BloombergHT cited asset held for sale with a value of leaders. MasterCard Turkey General Manager 181.7mn dinars on its balance sheet. Bilateral trade amounts to $4.8bn. Yigit Caglayan as saying in May. “OSN continues to face temporary While that doesn’t even fi gure in the A Saudi woman counts riyal banknotes as she makes a purchase at a shop in the capital Riyadh (file). Pro-government Analysis of the pro-boycott posts headwinds,” Anuj Rohtagi, a top 15 partners for Turkey, Saudi Ara- Saudis have been calling for a boycott of Turkish products on Twitter. indicates that most were retweets of director at Kuwait Projects, said bia is a major export market for some a select number of pro-government on a conference call last week. Turkish heavyweights. without precedent under Saudi Qataris, exporting milk and other month, when their purchases accounts, including Naifco’s, accord- The company is facing subdued There’s also the effect on much- Crown Prince Mohammed bin Sal- products to the tiny emirate. plunged 37%, according to official ing to Marc Owen Jones, a professor demand in its “core markets owing needed revenue from big-spending man, who’s been willing to fl ex the For Turkey, the showdown couldn’t data. at Hamad bin Khalifa University in to piracy (particularly BeoutQ Saudi tourists who may be put off kingdom’s fi nancial muscle by taking come at a worse time; its economy is The unease might also feed through Qatar. platform), geo-political reasons and by Turkey’s repeated efforts to ex- punitive measures in recent disputes already battered by a currency crisis to stocks, “provided that the tension Some also came from possible Sau- new fiscal reforms by government pose the Saudi role in the killing of with Canada and Germany. that’s touched off infl ation and raised intensifi es and these are seriously tak- di government bots, or accounts that which has partly resulted in the Washington Post columnist on One of his foreign policy missteps the risk of recession. The economic en into consideration by Saudis,” Me- automatically generate messages, said sizeable expat population base October 2. Saudis were among the has been an attempted embargo of pain won’t be immediate, but the fall- lis Pocar, vice president for research at Jones, who researches Middle East exiting from some of our core top buyers of Turkish property last Qatar. Rather than lasting weeks or out is evident in the real estate market. Oyak Yatirim, said in a note. Ulker and state propaganda on social media. markets,” he said. year. months, the boycott is well into its Saudis ranked as only the sixth- Pinar, for which Saudi Arabia is the top “It is government-driven, whether Weaponising economic ties isn’t second year. Turkey sided with the biggest buyers of real estate last export market, are the two companies implicit or explicit,” he said. Goldman’s 1MDB scandal deepens with Abu Dhabi funds’ lawsuit

Bloomberg New York

Goldman Sachs’s Malaysia fraud and bribery scandal intensified last week after two Abu Dhabi investment funds claimed in a lawsuit they suff ered losses from the bank’s “central role” in the case. International Petroleum Investment Co and Aabar Investments alleged in a court filing that Goldman Sachs Group Inc paid bribes to former fund off icials, who in exchange “agreed to manipulate and mislead IPIC and Aabar, and to misuse the companies’ names, networks, and infrastructures to further the criminal schemes and to personally benefit.” The furore surrounding Goldman Sachs’s Men walk past a 1MDB billboard at the funds flagship Tun Razak Exchange development in Kuala role in raising money for the Malaysian state Lumpur in this March 1, 2015 file photo. The furore surrounding Goldman Sachs’ role in raising investment fund, known as 1MDB, has weighed money for the Malaysian state investment fund, known as 1MDB, has weighed on the bank’s on the bank’s shares, which fell the most in seven shares, which fell the most in seven years on November 12. years on November 12 after Malaysia’s finance minister said he would seek a full refund of all come. She doesn’t see the bank’s shares rallying Tim Leissner, Goldman Sachs’s former chairman the fees it paid for 1MDB deals. At least three until those concerns are answered. of Southeast Asia, admitted in a plea that he senior current or former Goldman executives The Abu Dhabi funds are seeking unspecified bribed off icials to get bond deals and said a were implicated in the first charges against damaged in their complaint, which was filed culture of secrecy at the investment bank led individuals by US prosecutors. in state court in New York. The funds outlined him to conceal wrongdoing from compliance “I would expect to continue to see headline risk their claims in a summary that was less than two staff . around this at least until they can resolve the pages long. A more substantiate complaint will “I think the biggest concern is the Justice matter with US authorities,” Alison Williams, an be filed in two to three weeks. Department investigation and potential analyst at Bloomberg Intelligence, said in an “We are in the process of assessing the details of fines,” Elliott Stein, an analyst at Bloomberg interview. allegations and fully expect to contest the claim Intelligence, said in an interview. The Abu Dhabi Betsy Graseck, an analyst at Morgan Stanley, vigorously,” a Goldman Sachs spokesman said in funds’ allegations aren’t particularly strong, cut her recommendation on the shares to the an emailed statement. but negative publicity “may linger for a while equivalent of hold from buy last Wednesday, The US alleges that a small group of Malaysians because you can’t just dismiss a lawsuit super saying it’s unclear how long the 1MDB diverted money from 1MDB into personal quickly,” he said. investigation will take, how much in fines accounts disguised to look like legitimate 1MDB, set up by former Prime Minister and penalties may be imposed or what costs businesses, and kicked back some of those Najib Razak to attract foreign investment, Goldman Sachs will incur to satisfy regulatory funds to off icials. Goldman Sachs made $593mn accumulated billions of dollars of debt after its demands. working on three bond sales that raised $6.5bn 2009 inception and is at the centre of multiple Graseck also said there may be additional for 1MDB in 2012 and 2013, dwarfing what banks investigations in relation to alleged corruption lawsuits, probes and internal reviews yet to typically make from government deals. and money laundering. Gulf Times Sunday, November 25, 2018 3 BUSINESS

Venezuela GDP is said to have Bolsonaro eyes $30bn Brazil sunk nearly 17% in 2017 oil boon where others failed Bloomberg Caracas

Bloomberg Rio de Janeiro/Brasilia Preliminary figures compiled by Venezuela’s central bank indicate that the crisis-wracked nation’s economy contracted 16.6% in resident-elect Jair Bolsonaro is pursuing 2017, according to two people with direct the sale of Brazil’s deep-sea treasure- knowledge of the estimates. Ptrove of oil, but just weeks after his elec- For the first time since 2016, the bank is tion he’s facing the same political obstacles as preparing a raft of macroeconomic indicators his two predecessors. for the International Monetary Fund to avoid While Bolsonaro’s transition team argues sanctions including a possible expulsion from the sale could net some $30bn to help plug fi s- the lender. Bank technicians began working cal defi cits, a squabble over how to divvy up extended shifts and weekends earlier this the spoils between various states and munici- month to deliver new growth and inflation palities is threatening to thwart the plan even data and meet a strict November 30 deadline before he takes offi ce. issued by IMF off icials. Last week, Senate chief Eunicio Oliveira put The preliminary data points to the fourth on hold a key bill authorising the tender, deal- straight year of contraction for the oil- ing a blow to Bolsonaro’s hopes that a path rich nation that’s been slammed by gross would soon be clear for oil majors to bid for the mismanagement, a breakdown of public fi elds. services and wide-scale hunger. Economists At stake is a portion of the country’s so- have been left to guess on the exact depth called pre-salt crude reserves buried deep of the crash, as the government maintains a beneath the Atlantic Ocean’s seabed, which near blackout on off icial statistics including state-controlled Petroleo Brasileiro SA has homicides, inflation, and HIV rates. shown are commercially viable. Exxon Mobil Indicators such as inflation were being Corp and Royal Dutch Shell Plc have expressed handled directly by the bank’s directors, interest in the deposits, which are estimated the people said. A spokesperson from to hold more crude than Norway’s proven re- Venezuela’s central bank declined to serves. comment on the figures. Bolsonaro, a former army captain, won a According to Bloomberg’s Cafe Con Leche highly polarised election contest in October Index, Venezuela’s annual inflation rate is on pledges to unwind big-government poli- now at 187,400%. Gross domestic product cies from years of leftist rule and to sell energy will shrink 18% in 2018, representing a third assets to shore up public fi nances. consecutive year of double-digit decline, “The auction would bring valuable re- according to estimates from the IMF’s most sources to Brazil and to the government, and recent World Economic Outlook report. help on the fi scal defi cit,” Bolsonaro adviser Brazil’s President-elect Jair Bolsonaro (left), gestures next to the Minister of the Brazilian Military Superior Court (STM) General Luis Carlos Gomes In May, the IMF’s executive board issued a Luciano de Castro said in an interview earlier Mattos, during the graduation ceremony of new paratroopers in Rio de Janeiro yesterday. While Bolsonaro’s transition team argues the oil sale declaration of censure against Venezuela this month. could net some $30bn to help plug fiscal deficits, a squabble over how to divvy up the spoils between various states and municipalities is for its failure to provide information. “Data But pushing ahead with the sale is proving threatening to thwart the plan even before he takes off ice. provision was an essential first step to to be a daunting task, as the president-elect’s understanding Venezuela’s economic crisis team needs to negotiate with dozens of politi- The rights to 5bn barrels of government oil Petrobras has already made major discoveries rent government of President Michel Temer and identifying possible solution,” the board cal parties and states with diff erent agendas. were transferred to Petrobras in 2010 as pay- there, equipment is on site and taxes have been and Bolsonaro’s team fear the opportunity to said in a statement at the time, adding it The legislation that stalled in the Senate last ment for shares the state bought in the com- paid, UBS analyst Luiz Carvalho said. fully capitalise on the country’s energy assets would reconvene in six months to review the week would remove from Petrobras the exclu- pany as part of a $70bn sale of new stock. But “These are projects that survive even if oil may be lost if the planned auction keeps get- country’s progress. sive rights to operate in the so-called “transfer as the producer drilled the area, it found much prices fall to $20 per barrel,” Carvalho said on ting stalled in Congress. Analysts say expulsion from the IMF would of rights” area. That’s a controversial propo- more crude than it was entitled to in the deal, Thursday at an event in Rio. “For fi ve years we’ve been discussing this,” cause Venezuela to lose access to what little sition in a country where nationalism and oil leaving the government with a surplus while But producers might like to have some regu- the Energy Ministry’s executive secretary, remaining funds it has associated with the tend to go hand in hand. Bolsonaro himself has Petrobras remained the sole company allowed latory and political assurance before spending Marcio Felix said on Thursday. “If we don’t lender and could also trigger a cross-default defended the state’s control of the country’s to operate those fi elds. billions of dollars to tap reserves more than advance now and start all over again, the op- on some sovereign bonds. resources in the past. The area is attractive and low-risk because 100 miles from the coast. And both the cur- portunity may be left behind.”

Tax cuts top Gol airline’s wish list for new Brazilian president

Bloomberg uary 1, following a campaign that put the-limit infrastructure have kept New York a spotlight on taxes. Brazilian stocks airlines from expanding service, and surged leading up to the October elec- Gol vows to remain disciplined about tion as investors priced in a Bolsonaro growth until demand recovers. razilian President-elect Jair victory, assuming the pro-business “We have a good chance in Brazil to Bolsonaro needs to lower taxes candidate would overhaul the tax and keep capacity growing below demand, Band improve infrastructure for pension systems, and privatise un- so if there is 5% demand growth, we the country to thrive, according to the profi table state-run enterprises. are adding capacity at 3%,” chief fi - head of low-cost airline Gol Linhas South America’s biggest economy nancial offi cer Richard Lark said in Aereas Inteligentes SA. needs to build new airports, Kakinoff the recent interview. Keeping the ex- “The tax burden in Brazil is much said. “Brazil is the fi fth-largest do- pansion of seats and fl ights in check higher than most of the developing mar- mestic market for airlines in the helps airlines maintain control over kets in the world,” said Gol chief execu- world, but we have only two airports airfares and, ultimately, profi ts. tive offi cer Paulo Kakinoff . “The whole able to operate two runways simul- Rivals Azul SA and Avianca Brasil tax structure is pretty complex, and the taneously,” he said in an interview at have been increasing capacity by close tax burden is preventing the country Bloomberg’s headquarters in New to 5%, but unless they rein in expansion from exploring all of its huge potential.” York. At least ten Brazilian airports when demand typically slows in March Kakinoff ’s comments come as Bol- should be privatised Kakinoff said. and April, “one of these companies will sonaro prepares to take offi ce on Jan- Cost pressures and stretched-to- go into fi nancial distress,” he said. South America trade bloc members want overhaul: Argentina

Bloomberg More red fl ags raised in try’s trade practices after decades of Buenos Aires Argentina as economic protectionism. Argentine President downturn deepens Mauricio Macri, as well as leaders in Uruguay and Paraguay, also have free ll members of South America’s Argentina’s economic activity con- trade ambitions. main trade bloc are ready to tracted on a yearly basis for the sixth On-going trade negotiations be- Ado away with years of protec- straight month and imports cratered tween Mercosur and the European tionist policies preventing them from amid mounting signs of a worsening Union represent a test of the bloc’s signing accords with other regions, slump, according to Bloomberg. ability to change. At several points according to Argentina’s top diplo- Activity plunged 5.8% in September this year, Argentine leaders have said mat. compared to a year ago, more than the deal was very close to being done. Formed in the 1990s, Mercosur has all estimates from analysts in a Still, talks recently faltered due to been hamstrung by an emphasis on Bloomberg survey, whose median disagreements on topics such as au- tariff s and protectionism over free forecast was for a 4.6% decline. tomobiles. EU Trade Commissioner trade pacts. That all has changed, as Argentina posted a smaller-than- Cecilia Malmstrom said on November Argentina, Paraguay, Uruguay and expected trade surplus in October, as 9 that negotiations were hindered by Brazil – the organisation’s members imports dropped 18.2% from a year “some diffi cult issues.” – now share the same willingness to ago, while exports crept up 1%, the Faurie said meetings are continu- reform, said Argentina Foreign Aff airs national statistics agency reported ing, and that Mercosur ministers are Minister Jorge Faurie. on its website on Friday. going to meet on December 5 or 6 in “We’re all on the same page,” on Put together, the statistics provide Brasilia to review the technical work. trade, Faurie said in an interview in fresh evidence that Argentina’s Bolsonaro has proposed allowing Buenos Aires late on Friday. “We all downturn still hasn’t touched bottom. Mercosur nations to negotiate their agree that we’re too rigid, too shut- own bilateral free trade agreements tered and that makes us uncom- with other countries outside the bloc. petitive. One of the most important economy, have proven to be a cata- Faurie would not say if he specifi cally things is that Argentina is willing to lyst for plans to overhaul the four- supports such a measure, though he liberalise and open up more.” nation customs union. President- made it clear that the organisation’s This year’s presidential elections elect Jair Bolsonaro is promising current policies are hurting more in Brazil, Latin America’s largest voters a major overhaul of that coun- than helping. Gulf Times 4 Sunday, November 25, 2018 BUSINESS

Oil sell-off below $60 ripples all the way along the curve LNG from US to Russia dumped in EU with Asia chock full

The tumult in crude prices Bloomberg destination, with numerous terminals, to be unseasonably warm, and the is resonating through next London liquid trading hubs and a sophisticated region’s buyers are awaiting forecasts year and the years after that, transportation network. Last year, of colder weather before increasing according to Bloomberg. LNG made up 14% of total European spot purchases, according to traders Brent crude futures fell Europe has never been more spoiled in natural gas imports, with the rest surveyed by Bloomberg. below $60 a barrel for the its choice of sources of natural gas. coming via pipeline mainly from At the same time, production capacity first time since 2017 on Record amounts of liquefied natural Russia and Norway as well as domestic is increasing. Russia’s Novatek PJSC is Friday, and that move pulled gas cargoes are headed toward Europe production. starting a third production line, or train, vast swathes of the futures this month, according to Kpler SAS, With this year’s extra LNG shipments, at its Yamal LNG plant in the Arctic this curve nearly $2 a barrel which tracks commodity shipments. supply is so abundant that the week. In the US, Cheniere Energy Inc lower. The global benchmark The region is an increasingly attractive European benchmark gas price in the began production at its second plant, is now trading in a bearish place for the growing output from Netherlands has dropped 12% since the Corpus Christi, and started output at contango structure – one the US and Russia, with Asian buyers, start of the heating season October 1. the fifth train of its Sabine Pass export that makes it profitable usually the biggest consumers of the Fuel prices usually rise when winter facility. to store oil in tanks and super-chilled fuel, already well stocked gets underway. “European imports are reaching a suggests an oversupply in for a winter. Europe is proving increasingly popular record level in November, mainly due the market. As a result of “A lot of LNG is coming in these with producers on the US Gulf Coast to increased deliveries from Russia and the move, a favoured trade days,” said Andree Stracke, the chief due to a combination of lower Asian the US,” Madeleine Overgaard, an LNG of market speculators – the commercial off icer at RWE Supply gas prices, falling oil futures and the market analyst at Kpler, said by e-mail. spread between Brent & Trading GmbH, the trading unit of high cost of shipping LNG, according to “There are currently several additional for December 2019 and German utility RWE AG. “There’s just no John Twomey, an analyst at Bloomberg vessels headed towards Europe with December 2020 – fell into other home for the LNG. In China, ships NEF. arrival dates in December, confirming contango for the first time just queue up.” Spot LNG rates in North Asia have that this trend will continue in the since October 2017. Europe is an easy LNG cargo weakened as the winter is predicted following weeks.”

Oil bulls fl ee as As oil plunges, G20 seen Saudi stirs deja vu of the real Opec meeting worst rout Bloomberg murder. Trump on Thursday con- in decades London fi rmed that the Central Intelligence Agency told him that MBS “might have done it,” in reference to who was re- Bloomberg or the oil market, it looks like the sponsible for the assassination. But he New York real Opec meeting will come a insisted that the CIA “didn’t conclude” Fweek ahead of schedule. that the prince gave the order. The alliance is set to meet on Decem- “You can conclude maybe he did or edge funds haven’t been ber 6 in Vienna, but days earlier the key maybe he didn’t,” Trump said about this pessimistic about glo- decision makers are set to gather on the the CIA report. “Whether he did or Hbal oil prices since Brent sidelines of the G20 summit in Buenos whether he didn’t, he denies it vehe- crude was spiralling into its worst Aires in a meeting that may well decide mently.” rout in a generation almost three the direction of oil prices in 2019. Trump has vowed that the Khashoggi years ago. Saudi Crown Prince Mohammed bin killing won’t upend the White House’s Net-long wagers on the inter- Salman and Russian President Vladimir relations with the prince. national benchmark fell 15% in the Putin, who lead the world’s two larg- “We want low oil prices and Saudi week ending November 20, hitting est oil exporters and have been work- Arabia’s really done a good job,” he their lowest level since oil crashed ing together to manage the oil market said. For the US president, cheap en- below $30 a barrel in January 2016, for the past two years, both plan to be ergy equates to a tax cut for the mid- according to data released on Fri- in the Argentinian capital at the end of dle class – key to maintaining a tired- day by ICE Futures Europe. next week. Just as important will be US looking economic expansion. Then as now, it’s Saudi Arabia President Donald Trump, who’s made For MBS, Trump’s support is key to and the US that are tipping the his opposition to Opec a regular theme avoiding more aggressive American balance, prompting money man- in his Twitter diplomacy. action. Congressional leaders have agers to bet against a price recov- “I expect President Trump will be been more sceptical about his deni- ery. Under pressure from US Pres- discussing the optimal price range with als. Senator Lindsey Graham, a senior ident Donald Trump, the kingdom Crown Prince Mohammed bin Salman Republican who was a long-time sup- is pumping crude at a record pace and President Putin at the G20,” said porter of Saudi Arabia, is pushing for even as volumes from American Bob McNally, president of Washington “serious sanctions, including appro- shale producers reach new heights. consultant Rapidan Energy Advisors priate members of the royal family.” “People are really reacting to a LLC and a former White House energy So far, the 33-year old prince ap- double whammy of both supplies offi cial. pears to be doing his best to keep oil and inventories going up at the The oil market is abuzz with talk that prices low. Saudi crude production has same time that demand seems to MBS, as Prince Mohammed is known, reached an all-time high in November, be cooling down,” said Tamar Es- may not be able to defy Trump’s de- surging to 10.8mn barrels to 10.9mn sner, an analyst at Nasdaq Inc in sire for lower oil prices after the White bpd, up from 10.65mn in October, ac- New York. “Oil is getting hit from House supported him following the cording to industry executives who both sides.” killing of Washington Post columnist track Saudi output. Net longs – the diff erence be- Jamal Khashoggi. Yet, not everyone in the oil market is tween bullish and bearish Brent “The market is assuming the Saudis convinced that MBS will keep the taps wagers – fell to 182,569 futures won’t be able to cut,” said Amrita Sen, Alexander Novak, Russia’s energy minister, left, looks on as Khalid al-Falih, Saudi Arabia’s energy and industry minister, open to please Trump. As much as the and option contracts, the ICE Fu- chief oil analyst at Energy Aspects Ltd speaks during a news conference following an Opec meeting in Vienna (file). Saudi Arabia and Russia are seen trying to US president wants low oil prices, the tures numbers showed. Long-only in London. reach a deal on oil production next week ahead of the Opec meeting. Saudi prince needs higher oil prices to bets fell 8.6%. Short positions Khalid al-Falih and Alexander Novak, fi nance social and military spending, as climbed 6.6% and have now more the Saudi and Russian energy ministers, It wouldn’t the fi rst time the two en- Moscow were working together and world is oversupplied. West Texas In- well as the lavish lifestyles of hundreds than tripled since late September. are also scheduled to travel to Buenos ergy superpowers used a G20 to decide a few days later, they announced that termediate, the US benchmark, fell of princes. The funds proved prescient. Aires together with their principals, on oil policy. Opec and a number of non-Opec na- close to $50 a barrel. “It remains our view that the King- Brent for January settlement slid according to people familiar with their At a summit in Hangzhou, China, in tions would cut production. Trump had already celebrated the dom will adopt a ‘Saudi First’ policy below $60 a barrel on Friday, cap- plans, asking not to be named because early September 2016 Putin sat down The gathering in Buenos Aires comes plunge on Wednesday, tweeting: “Oil and prioritise its own economic and ping its worst week since early 2016. their agendas haven’t been disclosed with MBS to discuss how to revive oil after a week of near-panic in the oil prices getting lower. Great!” Yet, he social welfare above pleasing the Data on hedge fund wagers for yet. Their presence reinforces the im- prices. Hours after their private meet- market. Brent crude, the global bench- wants more: “Thank you to Saudi Ara- American president,” said Helima West Texas Intermediate crude, pression that Saudi Arabia and Russia ing, the Saudi and Russian oil ministers mark, plunged 6.1% to a one-year low bia, but let’s go lower!” Croft, chief commodities strategist at typically released on Fridays, won’t will try to reach a deal ahead of the Opec appeared in a joint press conference. of $58.80 a barrel on Friday, down 22% But the petro-diplomacy is compli- RBC Capital Markets LLC and a former come until November 26 due to the meeting a few days later. The message was clear: Riyadh and this month on growing concerns the cated by the fallout from Khashoggi’s CIA analyst. US Thanksgiving holiday. Is a shale-sized oil boom hiding in Britain’s Atlantic bedrock?

Bloomberg challenging and even geologically and the pooled crude can flow freely to can pour tiny bits of oil inside each London ridiculous. the surface for a sustained period. fracture, but those deposits can’t reach “I’ve stopped arguing with them,” he A report commissioned by Hurricane each other. said over lunch the day before his concludes one of its fields, called Trice’s plan depends on there being On a sunny October morning, members speech, sipping on a glass of red wine. Lancaster, likely has half a billion so many fractures crisscrossing one of the Geological Society pack an “They’ll see.” barrels of recoverable oil. another throughout the granite, they ornate lecture theatre at their imposing Trice, 57, a geology PhD who’s worked That’s worth almost $33bn at $65 a have formed a sort of highway system headquarters on London’s Piccadilly. in the oil industry for three decades and barrel Brent crude, much of which for oil to travel through. Seismic One of their number introduces a founded Hurricane in his garden shed would go to the British government imaging can provide hints such a scientist who “needs no introduction,” in 2005, likes to compare himself to in taxes. Hurricane is also exploring network exists, but the image is fuzzy. the man people had come to see. another maverick who went from voice another two fields thought to hold The plan also relies on the hope that Taking to the podium, Dr Robert Trice, a in the wilderness to billionaire prophet: billions of barrels more. those fractures aren’t flushed with lifelong rock obsessive who’s also chief George Mitchell, the father of shale In scientific circles, Trice’s relentless sea water as the oil is being produced, executive off icer of independent oil drilling. push to unlock this treasure from turning it into world’s most expensive company Hurricane Energy Plc, adjusts Mitchell started experimenting with the UK’s bedrock has made him a well of undrinkable water. his glasses and shakes his mop of pale the idea of hydraulic fracturing, or minor celebrity. During his October “I can’t think of any example where hair. Then he explains his billion-dollar “fracking,” into shale rock in the 1980s. speech, one geologist in the crowd someone has just set out to explore” idea. It took thousands of wells and 30 years leaned to the edge of his seat as Trice granite, said Roy Kelly, managing From inside a ship, sloshing around for the American oil industry to widely spoke, quietly saying “yes!” each time director of Hurricane’s largest investor, the 65-foot waves off the coast of adopt the practices he pioneered. the explanation of granite fractures Kerogen Capital. “Some people thought the Scottish isles, he plans to poke a When it did, the US became the largest became particularly exciting. Others he was mad.” diamond-tipped drill-bit into the sea fossil fuel producer on the planet, remain sceptical. BP is now drilling into the more bed. He’ll take it past layers of once-oil- permanently altering the global energy “The productivity and longevity of traditional sandstone near Hurricane’s soaked sandstone rocks straight into a trade. Mitchell died in 2013 at 94 with a that productivity is a concern” with blocks in the Scottish seas. It probably strata of solid granite – what geologists $2bn fortune. fractured granite, said Ariel Flores, has a similar granite formation within call the basement. Then the drill will While the granite under the Atlantic BP Plc’s president for the North Sea the same area. Flores said he’s watching turn sideways and hopefully intersect a Ocean west of the Shetland island isn’t “Fractured basement isn’t a myth,” harsh conditions is now sailing through region. “There’s a lot of uncertainty Hurricane’s progress closely and bunch of naturally formed cracks. If his likely to be another Permian, if Trice said John Browne, the former chief the English Channel to the North Sea. and risk.” will probably drill its own basement science is correct, there will be enough is right about the geology it will prove executive off icer of BP Plc, who spent In the first half of 2019, Hurricane plans The primary risk is in the rock. While development well in the next couple of oil pooled in those cracks to make him billions barrels of undrilled oil. Success part of his early career working in the to use it to produce from two wells. The sandstone is like a sponge, where fluids years. a very rich man. would be a significant shot in the arm North Sea. “But it’s diff icult to drill.” test of a good result? Hurricane needs move about freely into a well that Trice spent the early part of his For more than a decade, people in the for Britain’s beleaguered oil industry, We’re about to get a clearer picture the pressure underground to stay as brings them to the surface, granite is career at Enterprise Oil Plc, a UK industry have excoriated his idea for where drilling is at its lowest level since of how well it will work. A floating high as Trice’s models predict, showing like a piece of glass. Crack a pane of driller acquired by Royal Dutch Shell being too expensive, too technically the birth of the North Sea in the 1970s. production vessel specially modified for the cracks in the granite are interlinked glass in two separate places, and you Plc in 2002. Gulf Times Sunday, November 25, 2018 15 BUSINESS

Bloomberg QuickTake Q&A Why land seizure is back in the news in S Africa South Africa’s path

By Mike Cohen explicitly permitted. Civil-rights and lobby groups plan to Cape Town contest the decision in court. On July 31, the ANC shifted and said it would push for a proposed amendment to the to just land reform is constitution to make it clearer under which conditions More than two decades after white-minority rule land can be seized without pay. ended in South Africa, most of its profitable farms and 4. Why are banks worried? estates are still owned by white people. The ruling African National Congress has vowed to step up wealth Because they have 1.6tn rand in mortgages, 150bn rand riddled with pitfalls distribution, including constitutional changes to make of which has been extended to farmers. If lawmakers it easier to allow the government to expropriate land are persuaded to change the constitution and property without paying for it. A parliamentary committee rights come under threat, the impact could cut real By Sam Mkokeli resolved on November 15 that the constitution must be estate values, weaken investor confidence and thwart Bloomberg Businessweek changed and that a panel must be set up to draft the economic development. In a worst-case scenario, banks wording. The state hasn’t taken any property yet, but the and the economy wouldn’t be able to absorb the shock, nation’s biggest banks are wading into the debate since the Banking Association of South Africa said at the end The clay-rich soil of South Africa’s Western they have the most to lose because of the billions of rand of August. Cape province has produced some award- lent to farmers and real estate owners. 5. What are they proposing? winning pinot noirs and sauvignon blancs, 1. Why is land ownership an issue? but Nokwanda Matebese is certain that Commercial lenders have recommended that without a patch of dirt to call her own, she Because about 95% of the country’s wealth is in the expropriation without compensation be undertaken and her relatives will never have a taste of hands of 10% of the population. Under the rule of within the confines of existing laws and urged the prosperity. European colonists, South Africa’s Natives Land Act government to clarify its reform policy to stimulate “I work hard for my three children and of 1913 stripped most black people of their right to investment. Banks have also called for a land audit to have to send money to my mother and own property, a policy reinforced decades later by the track the status of transfers to black owners, merging extended family,” says Matebese, 35. A National Party and its system of racial segregation, two government departments that address land reform, seasonal worker in the area’s vineyards, she known as apartheid, or apartness. A 2017 state- and creating an ombudsman to expedite grievance lives in a one-room shanty fashioned from commissioned audit shows that a third of the country’s resolution. They also propose a blended finance model in corrugated steel in Kayamandi township, an rural land is owned by individuals and 72% of that is which banks and the state fund initiatives together. impoverished settlement on the outskirts in white hands. Companies and trusts hold 43% of 6. Is taking land without compensation of Stellenbosch. “Without owning land or rural land; the race of their beneficiaries and owners is legal? property, it will forever be diff icult for myself diff icult to determine. This compares with the results of and my family to move up the economic a separate audit released on November 1, 2017, by Agri Not according to Agri SA, the biggest organisation ladder — for example, get a loan to start a Cattle graze on a farm, outside Delmas in the Mpumalanga province, South Africa Development Solutions and farm-lobby group Agri SA, representing the country’s farmers, which argues that business.” (file). With national elections looming in May and the economy in the doldrums, the which found blacks, Indians and so-called coloureds own the constitution doesn’t provide for expropriation South Africa’s Natives Land Act of 1913 ANC leadership is under pressure to speed up wealth distribution. 27% of the nation’s farmland compared with 14% in 1994. without “just and equitable” compensation. Ramaphosa stripped most black people of the right 2. What’s been done until now? says the constitution already allows the state to take to own property, a policy reinforced by rand ($114bn) of mortgages outstanding, as be settled, because new laws would have land, but more clarity is needed on the circumstances apartheid, the decades-long system of racial well as 150bn rand of loans to farmers. to be put in place, says Ronald Lamola, the Since 1994, when the ANC became the nation’s dominant under which this can be done. Seizing land could result segregation. More than 20 years after white- Other important sectors could also be af- ANC’s spokesman on land reform. post- apartheid party, the state has acquired 8.4mn in South Africa violating conditions needed to retain minority rule ended, the ruling African Na- fected. “Tourism is booming now. You don’t The government knows it must tread care- hectares — about 8% of the country’s total territory its preferential access to US markets under the African tional Congress has made limited progress want to mess that up,” says David Notten, fully to avoid replicating the experience of — for land redistribution and restitution. Those who Growth & Opportunity Act. The act grants 1,800 products in righting historical wrongs. Whites make who charges 5,995 rand a night to put up Zimbabwe, where land seizures triggered didn’t want the land allocated to them opted for money from sub-Saharan Africa duty-free entry into the US and up less than 8% of the population but own visitors at his family-owned game lodge an exodus of white farmers at the turn of instead, with 11.6bn rand ($814mn) paid out from 1994 the list of eligible countries is reviewed annually. almost three-quarters of agricultural land, near Kruger National Park. the century, with disastrous consequences. until January 2017. A separate initiative begun in 2016, 7. Why is the ANC doing this now? according to a 2016 audit commissioned by Safaris are an important source of revenue Once an exporter of maize, cotton, beef, and known as the 50-50 programme, meant to encourage lobby group Agri SA. for South Africa’s travel industry, which tobacco, the country now suff ers frequent joint black-white land management, uses government The party was initially reticent to allow expropriation With national elections looming in May and supports 1.5mn jobs and generates about food shortages. Eddie Cross, a Zimbabwean funds to buy half a farmer’s land and give it to labourers without paying. Under Zuma, it came under pressure as the economy in the doldrums, the ANC lead- 9% of gross domestic product, according to economist and legislator, has estimated the working there. economic growth stagnated, and there were calls for his ership is under pressure to speed up wealth government data. “This is a necessary con- total cost of Zimbabwe’s so-called fast-track 3. How did we get here? resignation from the opposition, civic leaders and senior distribution. For the first time since ascend- versation but a delicate one, too,” he says. land reform at $20bn. off icials in his own party, following a series of scandals ing to power in 1994, the party is at risk of “How will the government handle many For South Africa, a slow-track approach Parliament had proposed legislation in 2016 that would and an unpopular cabinet reshuff le. He was forced losing its national majority, with a recent poll tricky questions, including the fact that my could also exact an economic cost in allow the government to pay “just and equitable” to quit as the nation’s president in February and was by the South African Institute of Race Rela- grandfather bought this farm a long time forgone investment. Francois Miller took out compensation for land it expropriates. The bill was replaced by Ramaphosa. The ANC lost support in 2016 tions indicating its support has dropped to ago and I have a title deed to prove that the loans to build irrigation systems and other withdrawn after Former president Jacob Zuma said local elections and Zuma’s reputation eroded the party’s a record low. On November 15 a parliamen- sale predates the period of the injustice of infrastructure at his farm along the Orange it wouldn’t pass constitutional muster. On December standing to such an extent that it is at risk of losing its tary committee resolved that South Africa’s the land that was taken from black people.” River, in Free State province, where he tends 20, the ANC, under newly elected party President national majority in 2019 elections, with a recent poll by constitution must be amended to allow the Two-thirds of lawmakers would have to to 250 heads of wagyu, a type of cattle Cyril Ramaphosa, said expropriating land without the Institute of Race Relations indicating its support has government to expropriate land without assent to change the constitution to allow whose meat can fetch as much as 1,500 compensation should be among mechanisms to dropped to a record low. The party needs policies that paying for it, an idea that President Cyril expropriation without payment. The ANC rand per kilogram in Asia. “There is a lot eff ect land reform, as long as it doesn’t undermine the will gain traction among the nation’s poor, who make up Ramaphosa endorsed last year. holds 62% of the seats. The Economic Free- of money in wagyu farming,” he says. “We economy, agricultural production and food security. the majority of the electorate. The nation’s banks may have the most to dom Fighters, South Africa’s third-biggest don’t want that aff ected by uncertainty and In February, lawmakers agreed to the principle of 8. What’s the outlook in parliament? lose from any changes. “If residential land political party, which supports land seizures, decisions that are not well-thought- out.” land expropriation without compensation and tasked comes under question, and if property has 6.4%. The vote isn’t likely to take place Legislation that facilitates expropriations Parliament’s Constitutional Review Committee to Two-thirds of lawmakers would have to assent to change rights more generally come under question, before May, as it will have to be preceded could also violate conditions of the African consider whether it was necessary to amend section 25 the constitution. The ANC holds 62% of the seats. The that could have an extremely large systemic by a laborious public hearings process, says Growth and Opportunity Act, which grants of the constitution. After nationwide public hearings and Economic Freedom Fighters, South Africa’s third-biggest eff ect on the banking sector,” says Kuben Pierre de Vos, a law professor at the Univer- 1,800 products from sub-Saharan Africa written input, the committee that land seizures should be political party which supports land seizures, has 6.4%. Naidoo, a deputy governor of the South sity of Cape Town. Even after that, it could duty-free entry into the US The list of eligi- African Reserve Bank. Lenders have 1.6tn take months, if not years, for the matter to ble countries is reviewed annually. Gulf Times 16 Sunday, November 25, 2018 BUSINESS

he Qatar Stock Exchange (QSE) The consumer goods and services sec- QSE Index and Volume Index gained 114.29 points, or tor was the second biggest contributor T1.12%, during the trading week to to the overall trading value, accounting close at 10,328.48. Market capitaliza- for 17.4% of the total trading value. QNB tion increased by 1.25% to QR583.8bn Group (QNBK) was the top value traded versus QR576.6bn at the end of the stock during the week with total traded previous trading week. Of the 45 listed value of QR201.4mn. companies, 26 companies ended the Trading volume decreased by 5.8% week higher, while 18 declined and one to reach 25.4mn shares versus 26.0mn remained unchanged. Qatar Cinema & shares in the prior week. The number Film Distribution (QCFS) was the best of transactions rose by 2.2% to 20,264 Weekly Market Report performing stock for the week with a transactions versus 19,833 transac- gain of 14.10% on 2,736 shares traded tions in the prior week. The banks and only. On the other hand, Islamic Hold- financial services sector led the trad- ing Group (IHGS) was the worst per- ing volume, accounting for 40.3%, fol- forming stock for the week with a de- lowed by the real estate sector which cline of 6.3% on 74,396 shares traded. accounted for 21.1% of the overall trad- Source: Qatar Exchange (QE) Masraf Al Rayan (MARK), Ooredoo ing volume. Vodafone Qatar (VGQS) (ORDS) and Industries Qatar (IQCD) was the top volume traded stock dur- were the primary contributors to the ing the week with 3.0mn shares. Weekly Index Performance weekly index gain. MARK was the big- Foreign institutions remained bull- gest contributor to the index’s weekly ish with net buying of QR209.7mn gain, adding 34.2 points to the index. versus net buying of QR99.0mn in Source: Qatar Exchange (QE) ORDS was the second biggest contrib- the prior week. Qatari institutions utor to the mentioned gain, tacking remained bearish with net selling on 20.2 points to the index. Moreover, of QR39.3mn versus net selling of IQCD contributed 17.1 points to the in- QR24.2mn in the week before. Foreign dex. On the other hand, Barwa Real Es- retail investors turned bearish with net tate Co (BRES) deleted 6.4 points from selling of QR16.8mn versus net buying the index. of QR20.6mn in the prior week. Qatari Trading value during the week de- retail investors remained bearish with creased by 7.9% to QR1.1bn versus net selling of QR153.7mn versus net QR1.2bn in the prior week. The banks selling of QR95.4mn the week before. and financial services sector led the Foreign institutions bought (net Source: Bloomberg trading value during the week, account- basis) $2.2bn worth of Qatari equities ing for 46.8% of the total trading value. year-to-date. Source: Qatar Exchange (QE)

DISCLAIMER

This report expresses the views and opinions of QNB Financial Services Co WLL One Person Company (“QNBFS”) at a given time only. It is not an off er, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. Gulf Times and QNBFS hereby disclaim any responsibility or any direct or indirect claim resulting from using this report.

Qatar Stock Exchange Top Five Gainers Top Five Decliners

Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million)

Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million)

Technical analysis of the QSE index

he general index closed up 1.11% from reversal formation (if breached down- last week and closed at 10,328.48. wards). We keep our expected weekly sup- TThe index has been creating a rising- port level to 9,600 points the resistance at wedge price formation, which is a bearish the 11,000 level.

Definitions of key terms used in technical analysis

andlestick chart – A candlestick chart is a price chart that displays the high, low, open, and close for a security. The ‘body’ of the chart is portion between the open Cand close price, while the high and low intraday movements form the ‘shadow’. The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick represents one trading day) in our analysis. Doji candlestick pattern – A Doji candlestick is formed when a security’s open and close are practically equal. The pattern indicates indecisiveness, and based on pre- ceding price actions and future confirmation, may indicate a bullish or bearish trend reversal. Gulf Times Sunday, November 25, 2018 17 BUSINESS

Nissan said to push for more China’s developers bite bond power in post-Ghosn bullet as funding costs rise alliance Bloomberg Bloomberg Tokyo Hong Kong issan Motor Co will seek ome Chinese developers were a review of the share- quick to complete the bulk of Nholding structure of its Stheir refi nancing early in the year. alliance with Renault, moving to Those who waited now risk paying create a more equitable partner- dearly for their tardiness, with borrow- ship between the two carmakers ing costs doubling since January. just days after Carlos Ghosn’s An added complication for develop- shock arrest, according people ers is that China’s National Develop- familiar with the plans. ment and Reform Commission is said The review will cover the is- to have told several market participants sue of voting rights, the people that it is considering stricter assess- said, asking not to be identifi ed ments for companies looking to extend as the information isn’t public. the validity of their off shore debt issu- Renault has more infl uence in ance quotas to next year, forcing some Nissan than the Japanese com- fi rms to borrow now rather than wait pany has in its French partner, for market conditions to improve. The creating an imbalance in their NDRC said it hasn’t made any changes two-decade-long relationship. to the quota extension process. The plan signals Nissan is China’s home builders have sold moving swiftly to gain a stronger $37bn of dollar bonds so far this year position in the alliance, with for refi nancing, and about 65% of that Ghosn out of the picture. was completed by June, according to The French-Brazilian execu- Bloomberg-compiled data. Meanwhile, tive, who steered both Renault average yields on Chinese junk bonds, and Nissan for years and had which mainly consists of develop- worked toward a merger of the ers, have surged to a four-year high of companies, was removed as Nis- 11.8%, according to ICE Bank of Amer- san’s chairman Thursday after ica Merrill Lynch Index. The Hong Kong Convention and Exhibition Centre and other commercial and residential buildings standing on Hong Kong island. China’s home builders have sold $37bn his arrest in Japan for suspected Developers are concerned about po- of dollar bonds so far this year for refinancing, and about 65% of that was completed by June, according to Bloomberg-compiled data. fi nancial off ences. tential changes in NDRC’s approach to- The balance of power at Nis- ward Chinese property bonds, accord- fering in late October. Times China region the for the sector. This comes at 4.5% coupon to repurchase zero-cou- of more than 10% for two-year tenors, san is now tilted towards chief ing to Clement Chong, a senior credit Holdings Ltd sold a two-year off ering a time when they have $62bn of bonds pon convertible bonds. look attractive, according to James Hu, executive offi cer Hiroto Saikawa, analyst at NN Investment Partners. “If at 11% and Greenland Holding Group maturing in both onshore and off shore “No doubt fi nancing costs will be- a senior portfolio manager at Income who has emerged as a driving they can get the money quickly, then Co priced a one and a half year off ering markets in 2019, according to Bloomb- come challenging for builders,” said Partners Asset Management (HK). force behind the investigation they would do it,” he said, adding that at 9.25% this month. erg-compiled data. Danielle Wang, a China property analyst The overall sentiment toward this into Ghosn’s alleged wrongdo- current market conditions aren’t help- Developers have been caught by tight Country Garden Holdings Co, Chi- at DBS Vickers Hong Kong Ltd. “But to sector remains cautious, Hu said, ing. The French side, mean- ful for issuers. funding conditions due to a deleverag- na’s biggest developer by sales raised survive, you’d rather park some money adding that investors remain con- while, has appeared blindsided This week alone, Hengda Real Estate ing push by policymakers, which com- HK$7.83bn ($1bn) through a convert- in pockets with whatever costs, than cerned about supply pressure, and by the rapidly unfolding events. Group Co, a unit of China Evergrande bined with rising global interest rates ible bond at a higher cost to partly re- fussing about higher costs,” she said. the possibility of onshore defaults Saikawa, an opponent of a Group, sold a $1bn tap of a two-year has resulted in some of the steepest fi nance a note due in January. It priced The rates on some Chinese junk-rat- having a ripple effect on the offshore merger between the companies, bond at 11% after pricing a $1.8bn of- borrowing costs for dollar bonds in the fi ve-year convertible bonds with a ed developers, like those off ering yields dollar bond market. may be seeking to improve the Japanese carmaker’s bargaining position in a partnership he says has for too long favoured the French side. Winton plans to expand Renault owns 43% of Nissan Singapore malls try big gambit before and has the right to vote on de- China strategy in cisions by the board, while the Japanese carmaker holds 15% of the French company but doesn’t online shopping catches on bid to diversify risks have voting rights. That unevenness has existed Bloomberg September 30 from a year earlier as last year and almost immediately Bloomberg and CEO Harding told investors since the alliance was formed in Singapore owner Mapletree Commercial Trust faced delivery delays – a costly snafu Beijing and partners at the event. The 1999. Mitsubishi Motors Corp added an arcade complete with a in a market where the nearest store London-based firm, which has was added to the grouping in full-sized bumper car ring. Yet actual or mall is just minutes away for most been providing investment advice 2016. nline shopping in Singapore is shopping fell slightly. people. Singapore vies with Hong David Harding’s Winton Group Ltd to other local financial institutions “The board agreed unani- lacklustre even after Amazon In other malls, visitors can spend a Kong for the most retail space per is planning to add stocks to its for eight years, already raised mously yesterday that the OInc debuted its Prime service day taking a cooking class or partici- capita in Asia. futures-only strategy in China as more than 1bn yuan ($144mn) in long-standing alliance partner- in mid-2017. The island’s malls are pating in a complimentary yoga ses- Amazon was the sixth-ranked on- the $25bn hedge fund firm seeks four onshore private securities ship with Renault remains un- trying hard to keep it that way. sion. At CapitaLand’s Clarke Quay, line shopping app on the Apple Store to diversify risks and bolster funds since being granted a changed and that the mission is With some of the nation’s big- you’ll be able to sip margaritas while by active users in the third quarter, returns for local clients. license in June. to minimise the potential im- gest mall operators reporting falling playing a round of indoor mini golf. behind homegrown competitors such Winton is considering adding a Winton manages about 4bn pact and confusion on the day- rents and rising vacancies, landlords, CapitaLand’s Westgate mall and its as Qoo10, data compiled by iPrice long-short equity strategy, and yuan under both advisory and to-day co-operation among just like those elsewhere in Asia and soon-to-open revamped Funan mall Group show. may also launch new equity private-fund manager models the alliance partners,” a Nissan the US, are being forced to reposi- will feature an ABC Cooking Studio, Malls that can’t effectively in- products, said Yang Min, chief in China, including money from spokesman said by e-mail. tion. They’re making room for yoga where people can sign up for bread- corporate activity-based tenants executive officer for China. distributors such as domestic According to Japanese corpo- studios, boxing gyms and climbing baking lessons or classes on how to risk falling behind, both in terms of She cited stocks’ low average securities brokerages and wealth rate law, Renault’s voting rights walls – plus expanding their food and make wagashi, traditional Japanese footfall and retail rents, according to correlation to commodities managers. could be cancelled if Nissan beverage options – to make sure peo- sweets. Cushman & Wakefield Inc Millenni- futures as well as greater Its futures-trading China strategy raises its shareholding to more ple come for the dining and fun, and Shopper traffic at CapitaLand als in particular are a target of non- opportunities for higher returns has returned almost 16% annually than 25% in the French carmak- hopefully, stay for some shopping. Mall Trust, which has a portfolio of shopping ventures. in a market driven by retail since 2010, according to data er. Under French rules, if Renault Centers around the world have 15 centres, declined 1.8% in the nine But while the plethora of new ac- investors. provided by the company, and lowered its stake in Nissan below tried similar stunts in recent years months ended September from a year tivities have helped drive traffic, the The company is seeking client 6.7% this year through October. 40%, then it will help the Japa- – often to no avail – but in tiny Sin- ago while tenants’ sales per square uptick has failed to translate into real feedback and doesn’t have a firm That beats the 3.2% average nese carmaker get voting rights gapore, where it’s often joked that foot climbed 0.5% over the same pe- money. Mall rents have dropped 18% timetable for the new offerings, among Chinese private futures in the French company. shopping is the national sport, they riod. over the past year and vacancies rose she said. funds, according to data compiled Lately, the structure has be- do have an advantage. “While the current market share in the quarter through September, to While Winton’s current China by Shenzhen PaiPaiWang come increasingly controversial Online shopping penetration ranks of online sales is small, its pace of 7.6%, Urban Redevelopment Author- strategy of trading futures has Investment & Management in Japan due to Nissan’s strong behind Slovakia and Greece in the growth will only speed up as tomor- ity data show. worked well, the addition of Company. fi nancial performance. city-state, putting it relatively low row’s consumers enter the market,” And with an estimated 803,000 equities is a move to “prepare A broad market rally led by iron Although it’s generally out- down for developed economies, and CapitaLand chief executive officer square feet of retail space coming on- for rainy days,” Yang said on and coal-related domestic futures grown Renault in sales and the government is weighing a tax on Lee Chee Koon said in September at line in the next 15 months, rents will the sidelines of a symposium in in the third quarter helped lift the profits, the Japanese company e-commerce imports from 2020. a ceremony to mark the new Funan remain under pressure, according Beijing earlier this week. performance of China’s private- has far less influence within There are early signs the gambit is centre. “Brick-and-mortar busi- to Huey Ying Tay, head of research Winton’s trend-following futures funds, which averaged a the alliance. working – at least in terms of driving nesses must go beyond passively for Singapore at JLL. “Until brick- strategy, which has consistently 4.6% return for the three months Ghosn’s arrest has further laid up traffic. selling products and services to gen- and-mortar retail stores manage beaten markets in the past ended September 30, according bare resentments that have built At VivoCity, the island’s largest erating quality retail experiences and to convert foot traffic into in-store three decades, has also “worked to Shanghai Suntime Information as the Japanese and French sides shopping centre, visitor numbers emotional connections.” purchases, rentals are expected to re- extremely well” in China, founder Technology Co. alternated successes and strug- rose 3.1% in the six months through Amazon’s Prime launched in July main subdued,” she said. gles over the years. Huawei suppliers shrug off US push to stymie sales to allies

Bloomberg as opposed to a new risk. “If there from Huawei equipment. The push cent weeks, which he speculated New York was going to be any effect, this is comes ahead of a highly anticipated could lessen the impact of new de- where I’d expect it to show up, but meeting between US President Don- tails coming out around a narrative it doesn’t look like investors are too ald Trump and Chinese leader Xi that investors are already watching tocks with notable revenue worried,” said Ray Rund, head of re- Jinping at the Group of 20 summit in closely. exposure to China’s Huawei search at Shaker Investments. Argentina next week, where the two “The fact that companies with S Technologies Co showed little The move was “just another countries are expected to focus on Huawei exposure aren’t getting effect from a report that the Trump symptom of the problems we’re hav- trade issues. hammered today suggests the issue administration was urging key al- ing, of the administration’s attempts Trade tensions between the US is already built in, or that it isn’t lies to avoid using the company’s or desire to put some pressure on and China have been a headwind for going to have an impact,” he told equipment. China as the two countries get ready China-exposed technology compa- Bloomberg via phone, describing NeoPhotonics Corp, which ac- to talk,” he said. nies throughout 2018. the push against Huawei as “about cording to Bloomberg supply-chain “This plays into how it’s a time to However, the group has also been the optics of the trade negotiations data derives 47% of its revenue from be cautious on the US-China rela- pressured by signs of weakening rather than anything that will cause the Chinese telecommunications tionship, but if someone isn’t using smartphone demand. Lumentum individual companies to see an im- equipment maker, gained 0.3% in Huawei, they won’t start now, and Holdings, which gets about 11% of pact.” the holiday-shortened session that if they already were, they probably its revenue from Huawei, recently However, he added, “this kind of saw major indexes retreat. have a significant investment that plummeted after warning that one of rhetoric points to both the US and Inphi Corp, which gets about 14% won’t change because of this,” Rund its largest customers – widely inter- China digging in their heels and be- of its revenue from Huawei, rose said. preted as Apple – had meaningfully ing intransigent, which to me makes 1.7%, while Oclaro, which has 11% The Wall Street Journal, citing un- cut shipments. The stock was down the odds of a benign resolution on revenue exposure, was higher by identified people familiar with the about 0.5% on Friday. trade unlikely. nearly 3%. matter, reported that the US gov- Wayne Kaufman, chief market So even though you’re seeing some Analysts describing the push by ernment had reached out to coun- analyst at Phoenix Financial Serv- strength today, this issue is still out the Trump administration as the terparts and executives in countries ices, noted that many tech stocks there, and it seems likely that stocks Stocks with notable revenue exposure to China’s Huawei Technologies latest example of elevated trade ten- including Germany, Italy and Japan with China revenue exposure had haven’t fully priced in the odds of Co showed little eff ect from a report that the Trump administration was sions between the US and China, about perceived cybersecurity risks already seen heavy volatility in re- things getting worse.” urging key allies to avoid using the company’s equipment Gulf Times 18 Sunday, November 25, 2018 BUSINESS

Apple’s Asia clean Temasek to explore AI, energy provider is said to mull blockchain deals with Singapore IPO

Bloomberg ergy this year for $5bn includ- Singapore ing debt in the largest-ever alternative power acquisition. experimental pods ReNew Power Ventures Pvt unseap Group Pte, a Sin- acquired Ostro Energy Pvt in Bloomberg gapore renewable energy India’s largest renewable deal, Singapore Sfirm that counts Apple people with knowledge of the Inc as a customer, is consider- matter said in April. ing an initial public offering as Banpu bought a substantial emasek Holdings Pte, Singapore’s it seeks to expand in Asia Pa- stake in Sunseap in 2017. It has state investment fi rm, is setting up cific, people with knowledge since increased its holding to Tnew groups to explore opportuni- of the matter said. 40.7% as of June through fur- ties in artifi cial intelligence and block- The company, backed by ther investments, according to chain technologies. Thai coal giant Banpu Pcl, Banpu’s financial statements. Temasek is creating so-called “ex- plans to pick banks soon to ad- Sunseap builds, owns and perimental pods” to focus on these two vise on a restructuring ahead operates ground-mounted, areas, which it sees as long-term trends of a possible Singapore IPO, rooftop, floating and micro- impacting multiple industries and geog- the people said. grid solar panel projects. raphies, according to an internal memo Any stock offering could It has a portfolio of over 1 gi- obtained by Bloomberg. Chia Song take place in 2020, said the gawatt-peak of solar projects Hwee, the chief operating offi cer of key people, who asked not to be in Singapore, Southeast Asia management arm Temasek International identified because details are and the Pacific, according to Pte, will oversee the new groups. private. Sunseap’s website. The strategy was announced along- The IPO size would depend The company’s other inves- side other organisational changes that on the solar projects that Sun- tors include Goldman Sachs took eff ect October 1, the memo shows. seap takes on over the next Group Inc and DBS Group A spokesman for Temasek, which man- year, one of the people said. Holdings Ltd, the website ages S$308bn ($224bn), confi rmed the A representative for Sunseap shows. Sunseap partnered contents. declined to comment. with Apple Inc in 2015 to pow- Temasek participated in a $600mn se- Renewable power is attract- er its Singapore operations ries C funding round in April for China’s ing investors as Asian govern- with 100% renewable energy. SenseTime Group Ltd, now the world’s ments seek to combat pollu- This year, it inked a deal most valuable AI startup. tion by reducing fossil fuel use. with Microsoft Corp to cre- Temasek helped lead a series A round Global Infrastructure Partners ate the largest rooftop solar in June for London-based Eigen Tech- bought Singapore’s Equis En- project in Singapore. nologies, which automates the extraction Signage for Temasek Holdings is displayed in the lobby at the company’s headquarters in Singapore. The state investment firm is of unstructured data. setting up new groups to explore opportunities in artificial intelligence and blockchain technologies. In blockchain, Temasek invested in R3, backed by a group of banks seeking that deliver sustainable value over the east Asia. “As the investment landscape collective leadership, according to the iDreamSky to attract Sony, to bring distributed ledger technology to long term.” becomes more competitive and complex, memo. Temasek said it has identifi ed the their operations. Temasek is also setting up a new Stra- we are now seeing more situations where Americas, China, Europe, the Middle JD.com to $200mn IPO Greater agility: “We have been ex- tegic Initiatives unit, seeking greater we would benefi t from collaboration and East and Africa, India and Southeast Asia panding our business coverage and agility for opportunistic deals requiring specialised capabilities wider than our as “investment markets” where it’s ac- geographic footprint over the past few fast turnaround and senior-level assess- traditional sector and market team ap- tively doing deals and allocating capital. Bloomberg has also committed to years,” the Temasek spokesman said in an ment, according to the memo. proach,” Temasek wrote in the memo. The fi rm sees Japan, Korea, Singapore, Hong Kong purchase $5mn of stock in the e-mailed response to Bloomberg queries. The unit, which can pull in resources Chia will work with Lee Theng Kiat, Australia and New Zealand as “engage- IPO, one of the people said. “As our operating environment evolves, from other parts of Temasek, will be led Temasek International’s deputy chair- ment markets” where it will primarily iDreamSky, which used to our focus is on remaining nimble and by Tan Chong Lee, who is head of Europe, man and chief executive offi cer, and focus on institutional network building, iDreamSky Technology trade on Nasdaq, is seeking well-positioned to capture opportunities Middle East and Africa as well as South- deputy CEO Dilhan Pillay as the fi rm’s the memo shows. Holdings Ltd, a Chinese game a Hong Kong listing after it distributor, has attracted was taken private in 2016 in Sony Corp and JD.com Inc as a deal that valued it at about cornerstone investors for its $679mn, according to a planned Hong Kong initial preliminary prospectus. public offering, people with Any offering would add to the Pessimism returns to China stocks before Xi-Trump meeting knowledge of the matter $33bn of first-time share sales said. in Hong Kong this year, more The Shenzhen-based than double the same period Bloomberg from October 18 through Monday, giving 360 Security Technology Inc were after Bloomberg reported that Beijing- company plans to start taking in 2017, according to data Hong Kong investors some respite from this year’s among the biggest drags on the Shanghai Shanghai High-Speed Railway Co is investor orders tomorrow, compiled by Bloomberg. plunge. But the gains of the past month measure. A gauge of telecommunication planning to raise 30bn yuan ($4.3bn) in the people said, asking not An external representative have now evaporated – the Shanghai stocks tumbled 3.4%, led by Dr Peng Tel- an initial public off ering. China Railway to be identified because the for iDreamSky said the nvestors in Chinese stocks aren’t tak- Composite also fell more than 2% Tues- ecom & Media Group Co. Construction Corp rose as much as 3.2% information is private. company has no comment. ing any chances before next week’s day. It is down 22% in 2018 as the trade US offi cials have contacted counter- in Shanghai and China Communications The firm has been discussing A spokeswoman for JD.com Imeeting between presidents Xi Jin- war and slowing growth shattered con- parts and executives in countries includ- Construction Co added 2.3%, though a fundraising target of about said she couldn’t immediately ping and Donald Trump. fi dence. ing Japan, Italy and Germany about per- both later swung to losses. $200m, the people said. comment, while Sony didn’t The Shanghai Composite Index tum- Trump and Xi are due to meet at the ceived cybersecurity risks with Huawei The Hang Seng Index fell 0.4% in JD.com, the Chinese answer phone calls during a bled 2.5% on Friday, its biggest loss in Group of 20 summit in Argentina. equipment, according to a report in the Hong Kong, taking its weekly decline e-commerce giant, public holiday in Japan. fi ve weeks. “People are turning cautious ahead of Wall Street Journal. to 1%. Tencent Holdings Ltd weighed agreed to invest about Credit Suisse Group AG, China Technology shares led declines after the meeting,” said Linus Yip, a strate- The US may increase aid for telecom on the benchmark with a 1.4% slide, $5mn in the offering, the Merchants Securities Co and the Wall Street Journal said the US is urg- gist at First Shanghai Securities. “The development in countries that shun the while newly-listed food-delivery gi- people said. Sony, the China International Capital ing allies to avoid using equipment from restrictions over Huawei have increased company, the report said, citing people ant Meituan Dianping plunged 12% af- Japanese technology and Corp are joint sponsors for China’s Huawei Technologies Co. concern about US-China relations.” familiar with the matter. ter results showed its operating losses entertainment conglomerate, the Hong Kong IPO. The measure had climbed nearly 9% Foxconn Industrial Internet Co and Some railway-related stocks advanced more than tripled.

China names oil & gas veteran to top energy post to drive revamp SoftBank and Mizuho tap into stock

Bloomberg China Petroleum & Chemical Corp, known as Hong Kong Sinopec. At a PetroChina briefing in August, Zhang trading app to sell massive IPO said the company was “born with a mission” China has named a leading business to produce oil and gas for China and would Bloomberg executive to its top energy post, eschewing “spare no eff orts” in fulfilling that aim. Tokyo a practice of appointing career politicians as He was responding to a call by President the nation pushes through an overhaul of its Xi Jinping to boost domestic output for massive energy sector. national energy security amid a trade spat he ¥2.4tn ($21bn) initial Zhang Jianhua, the No 2 off icial of state- with the US public off ering of SoftBank run China National Petroleum Corp, will China, the world’s biggest energy user, relies TGroup Corp’s phone unit is become director of the National Energy on imports for about 70% of its oil and 40% aimed at attracting retail investors Administration, according to the Communist of its gas needs. to maximise its value. No surprise Party’s off icial People’s Daily. He will be the Those ratios have been rising in recent then that the technology company fifth NEA chief and the first to be appointed years as its oil output stagnates and gas and underwriter Mizuho Securities from an energy company, the newspaper production can’t keep pace with booming Co are turning to a smartphone- reported this week. demand. based brokerage to sell shares. The administration didn’t respond to several To improve supply eff iciency and encourage The stock-trading app they’ll faxes from Bloomberg seeking comments, non-state companies, policy makers have use, One Tap BUY, also happens while a CNPC spokesman in Beijing declined taken steps toward market liberalisation to be backed by SoftBank and Mi- to comment. including boosting access for third-party zuho. The plan is to make it easier Zhang, 54, will take the reins as China suppliers to pipelines operated mainly by for individual investors to sub- attempts to pull off an extensive revamp of CNPC, Sinopec and China National Off shore scribe to the IPO by splitting the its energy sector. Oil Corp and giving markets greater lots. That would let people buy “Most of China’s energy reforms have to flexibility to set gas prices for residential and one share at the indicated price of go through state-owned enterprises,” said non-residential users. ¥1,500 apiece, instead of the usual Tian Miao, an analyst at Everbright Sun Zhang’s appointment “comes at a time of minimum block of 100 shares for Hung Kai Co. “Zhang’s business background significant reforms within the industry,” ¥150,000, according to the pro- would give him more insights into how said Neil Beveridge, an analyst at Sanford spectus. SOEs operate and execute energy policies. C Bernstein & Co in Hong Kong. He’s The public debut of the wireless Hopefully that will allow reforms to be better particularly well-positioned to drive China’s unit, a new entity named SoftBank implemented.” pipeline overhaul given his understanding Corp, is part of founder Masayoshi People walk past a shop of SoftBank in Tokyo’s shopping district of Ginza. The $21bn initial public off ering of Zhang’s appointment also comes after two of how the industry works, Beveridge Son’s grand plan to turn the parent SoftBank Group’s phone unit is aimed at attracting retail investors to maximise its value. former NEA chiefs were probed for “serious added. into a global investment company violations,” typically used to describe The areas where Zhang’s experience might through the $100bn Vision Fund. Co. “Even people who aren’t used ings Inc plans to sell the largest to a wide demographic. Investors investigation for graft. His predecessor, Nur be more limited include the NEA’s goals of Retail investors will be a key part to investing in stocks, or SoftBank portion, followed by Daiwa Se- who purchase shares using One Bekri, who was previously a long-time chief easing coal use and increasing the uptake of of the off ering, which could exceed smartphone users, can become curities Group Inc and Mizuho, Tap BUY won’t get voting rights, of Xinjiang autonomous region, served from renewable energy, according to Everbright’s the IPO of former national carrier stockholders.” Bloomberg News reported ear- but will be eligible to receive divi- December 2014 until he was removed in Tian. Nippon Telegraph & Telephone One Tap BUY is rolling out a lier this month. Mizuho’s share of dends. SoftBank owns a 48% stake September. The solar industry, for instance, has come Corp in 1987. The underwriters new app dedicated to IPOs, start- that is ¥410bn, although it’s not in the smartphone brokerage, Zhang’s career in China’s petroleum and under scrutiny this year after its breakneck plan to sell about ¥2tn worth of ing with the SoftBank off ering, clear how much of that is targeted while Mizuho holds a 12% stake, a chemical industry spans more than three expansion led to overcapacity. shares to Japanese individual in- according to its website. Repre- to be sold via the app. regulatory disclosure shows. decades. He was most recently general Zhang will have to make sure he gets vestors. sentatives at SoftBank and Mizuho As part of the eff orts to attract “This could pave the way to ex- manager at CNPC and vice chairman of the solar policy right and execute it well, “People can buy into the shares declined to comment on how much more investors, Nomura, Mizuho panding the number of individual PetroChina Co, where he resigned from last Tian said. “This is an area that deserves with the money in their wallets,” they plan to sell via the app. and other underwriters have em- investors, by getting depositors to week. Before that, he was vice president of immediate attention.” said Katsumi Udagawa, manager Of the Japanese brokers under- barked on a television market- put some of their money into the of research at Ichiyoshi Securities writing the IPO, Nomura Hold- ing campaign, seeking to appeal stock market,” Udagawa said. Gulf Times Sunday, November 25, 2018 19 BUSINESS G20 to focus on trade, with all eyes on China and US

DPA ers of the countries that make up 85% the Asian giant unless Beijing agrees to eign-invested enterprises, Tao said, Vice President Mike Pence was in Pa- cle fl exing by China in the South China Washington of the world’s economy. make fundamental changes to the way but added that there must be pua New Guinea for the Apec summit Sea and out to the Pacifi c. Multilateralism that was hailed in it does business. “realistic expectations” about what this month the tensions between Bei- The US too is signalling it will de- the wake of the 2008 fi nancial melt- In particular, the US wants China to can be accomplished by the G20 talks. jing and Washington were bluntly on fend its positions in the region, in more gainst the backdrop of wors- down has been replaced by a return to make it easier for foreigners to invest, Trump often says that he likes Xi and display. echoes of the Cold War. Caught in the ening concerns about the glo- resting hopes on the largest players, shrink Washington’s trade defi cit and gets along well with the Chinese leader. Pence used the summit to attack middle of the two giants are the smaller Abal economy and the future President Xi Jinping of China and US for the government to crack down on It is typical of his personalisation of China’s signature Belt and Road Initia- countries, of international trade, world leaders President Donald Trump. intellectual property theft. key strategic relations. tive, calling it a “one-way” road. At one such as Papua New Guinea, which are set to meet for the G20 summit in “The G20 has lost a lot of the steam China has retaliated against the US However, Rui Zhong at the Wilson point, Chinese delegates barged into the rely on both China and the US as do- Argentina, striving to at least reach it once had,” said Matthew Goodman, tariff s raising concerns there will be a Center’s Kissinger Institute on China offi ces of the host country, seeking to nors. At the Apec summit, Pence’s tone ceasefi res that help contain the worst an expert on Asian economies and a full-on trade war unless the sides can and the United States’, cautions against change the fi nal joint statement. was one that made clear: “You need to of the tensions. senior vice president at the Center for at least reach a ceasefi re soon. reading too much into the dynamics The Chinese had objected to word- pick a lane between us and China,” said It is also a sign of the times that the Strategic and International Studies. “I think there are some basic things between the two big men. ing about ensuring trade was fair, lan- Goodman, the Asia economies expert. main focus of the summit is not the Goodman notes that this is a “long the Chinese side is not willing to com- “The Xi-Trump personal relation- guage the US and others supported. And this, he warned, is making event itself, but the bilateral talks on term trend” and not a result of the promise on,” said Tao Wenzhao, a re- ship has in general not been a good In the end, no joint communique governments across the region more the sidelines expected between the Trump presidency. searcher at the Institute of American indicator with which to take the tem- came out, for the fi rst time in decades. anxious. leaders of China and the US. However, the incumbent in the Studies, part of the Chinese Academy perature of US-China relations,” More signifi cantly perhaps, it was a rare Indeed, the discomfort extends Just a decade ago world leaders tried White House is “making it harder.” of Social Sciences. she says. “There might be some cur- showing of Chinese aggressiveness in a around the world, amid fears trade to broaden the coalition of decision Trump has slapped a raft of tar- Two ways in which Beijing might sory deals made to roll out at the G20 diplomatic setting that brought back tensions between the two largest makers ensuring stability around the iff s on more than $250bn of Chinese give in are by opening the fi nancial meetings, but the longer term trade memories of arguments between the economies, the so-called G2, will world by stressing the importance of a goods and has threatened to increase sector to foreign investment and by tensions will most likely drag on af- US and the Soviet Union. At the same have ripple effects that will cause summit that brings together the lead- the import duties on products from removing shareholding limits for for- terwards,” Zhong predicted. When US time, there are sign of mounting mus- pain far and wide.

US fund investors signal United Tech breakup their concern on credit Reuters number of issuers in the energy New York industry, which adds to the pres- sure on high-yield debt. Benchmark international S fund investors renewed Brent crude oil prices are about their concerns about $59 a barrel, down more than Ucredit quality in corpo- 30% from highs above $86 just on the table as mega rate debt markets during the lat- last month. The $14bn iShares est week, hitting leveraged loan iBoxx $ High Yield Corporate and high-yield debt funds with Bond ETF, one widely traded junk multibillion-dollar withdrawals, bond fund, has nearly 15% of its Lipper data showed on Friday. holdings in the energy sector. So-called “loan participa- In further signs of the risk- tion funds,” made up of funds aversion, investors pulled $1.4bn deal nears completion that buy loans to highly indebted from technology sector stock companies that typically must funds in the week, the most Bloomberg pay investors more as interest since February 2015. Chicago rates rise, posted $1.7bn in with- Tech funds have been the drawals during the week ended stars in the US equity market’s November 21. near-10-year run but have been nited Technologies Corp will turn That was the most cash pulled bludgeoned by the change in its attention to the question of from those funds since Decem- sentiment and dour headlines, Usplitting up its businesses after ber 2015, the research service’s including Apple Inc’s earlier China cleared the way for the world’s data showed. High-yield “junk” this month putting out a lower- largest aerospace supplier to merge with bond funds based in the United than-expected sales forecast for Rockwell Collins Inc. States recorded $2.2bn in with- the Christmas quarter that jolted The $23bn deal is expected to close drawals, the most in four weeks. parts suppliers across the world. within days, raising the odds that the in- Those funds include bonds Short-term US Treasury dustrial conglomerate will join DowDu- from issuers with lower credit rat- funds gathered $2.6bn, the most Pont Inc, General Electric Co and Hon- ings. Sentiment around corporate since January 2016. eywell International Inc in busting up a credit has turned more negative The funds have low credit risk diverse array of holdings. in recent weeks on concerns that because the issuer is the gov- United Technologies has been pushed economic and profi t growth is ernment and less sensitivity to by activist investor Bill Ackman and starting to peak as rising interest rates because they repay over a another high-profi le shareholder, Dan rates from the Federal Reserve put shorter time frame, allowing in- Loeb, to consider forming stand-alone more pressure on debtors. vestors to reinvest the proceeds companies for its aerospace, climate- The market includes a high at higher rates. controls and elevator divisions. That’s the next big decision facing chief executive offi cer Greg Hayes, who said in October that he’d weigh a possible re- Rising bond yields could hit structuring once the merger closes. While executives appear to be leaning toward a Italian economy: ECB’s Nouy breakup, any such moves will be compli- cated by the welter of regulatory approvals sition as the largest supplier of aircraft entities would need to be un-inter- United Technologies will likely sell as- Reuters of their bond holdings, increasing that would be needed for the multinational equipment to Boeing Co and Airbus SE, twined, and were in many cases origi- sets – such as its fi re, safety and security Milan the risk of capital shortfalls. conglomerate. And they couldn’t do any of giving it command of aircraft systems nally intertwined for tax reasons.” business, which may yield about $3bn – “The higher (bond yield) spread it before the Rockwell deal was secured. from Rockwell’s cockpit displays and China’s approval came with condi- in the coming months to cut debt, Hey- is certainly not welcome,” Nouy “This is the fi rst domino. You couldn’t computers to the Pratt & Whitney en- tions, including a demand that Rockwell mann said. Carrier is also a candidate for Rising bond yields in Italy could told Italian daily Il Sole 24 Ore in an move on whether to optimise the portfo- gines mounted under wings. The compa- divest three businesses where the com- a sale, said the analyst, who expects the eventually hurt the economy as interview. The rising bond spread lio until this was done,” Nick Heymann, ny will have the heft to counter pressure bined companies have suffi cient mar- company to keep the Otis unit. banks could be discouraged from risked jeopardising the “positive an analyst at William Blair & Co in New for deeper discounts from Boeing, which ket share to constrain competition. The Carrier “is operating near its peak both lending, European Central Bank results” Italian lenders achieved in York, said Friday. He expects United has begun taking over more of the work it Cedar Rapids, Iowa-based company had in terms of demand and product rejuve- supervisor Daniele Nouy told a cutting bad loans, the ECB supervi- Technologies to provide additional de- previously outsourced. already lined up buyers for the units, ac- nation, and it would be a better candidate newspaper yesterday. sor said, adding this could impact tails to investors by mid-December. United Technology made more than cording to federal fi lings. to monetise so that you could reduce the The yield spread between Ital- their ability to lend money and in The approval came as a relief to inves- 40% of its annual revenue overseas last United Technologies said the require- debt,” William Blair’s Heymann said. “I ian and German bonds has spiked turn hurt the economy. tors who had been concerned the deal year, and China was the fi nal regulatory ments included no surprises. “Every- think they will keep Otis because Otis is on to 300 basis points in recent days “It would be a real pity if the could be held up amid simmering trade approval needed after the U.S Justice De- thing is on track there. Everything is the cusp of the next generation of elevators. from 130 basis points in mid-May Italian banks, which have worked tensions between the US and China. partment, Brazil and the European Union in line with what we expected,” said There is a massive opportunity for retrofi t.” due to a tug-of-war between so hard to reduce their bad loans Rockwell’s shares rose 9.2% to $141.63 gave the green light earlier this year. spokeswoman Michele Quintaglie. Honeywell has spun off two low- Italy’s anti-establishment govern- and improve their balance sheets, at the close in New York, after news of Executives have warned that any split- The company’s recent fi nancial results growth businesses this year, and Dow- ment and the European Commis- lose the benefits of their eff orts,” the last pending regulatory approval for up proceedings would be lengthy due to underscored the pressure to separate Dupont Inc will split into three separate sion over its budget plans. she said. Nouy, who will end her the merger was posted on China’s State the complexity of United Technologies’ the businesses. The Pratt and aerospace companies next year after the two giant Italian banks, which hold bil- stint as the head of the ECB’s Administration for Market Regulation’s structure. “The company deals with units were standouts in the third quarter chemical companies combined. GE is ag- lions of euros worth of govern- supervisory board at the end of website on Friday. United Technologies over 1,200 global local entities across amid a boom in the industry, while sales gressively selling businesses to tighten ment debt, are suff ering because this year, said that time was ripe gained 2.6% to $129.04. hundreds of jurisdictions,” Ron Epstein, at the Otis business were weak. And the the company’s focus around its best- the widening spread with the to start setting up a European The merger will secure the Farming- an analyst with Bank of America Merrill stock has underperformed its aerospace performing units to help it recover from German bunds reduces the value insurance scheme for deposits. ton, Connecticut-based company’s po- Lynch, said in a note to clients. “These peers in the past two years. a steep stock decline. Copper benchmark deal signals shifting supply dynamics in 2019

By Andy Home tofagasta’s concentrate into refined metal. by 1.5%. The relative abundance of mined at the smelting-refining stage of the sup- London That is down from this year’s bench- concentrates this year has been evident ply chain. The closure in April of Vedanta mark terms of $82.25 and 8.25 cents and by the accelerated flow of material into Resources’ 400,000-tonne per year marks the fourth consecutive year of China, the world’s largest single smelter- Tuticorin plant in the Indian state of Tamil Copper supply has surprised this year, but falling treatment charges. refining processing hub. Nadu was wholly unforeseen. It has flipped not in the way everyone expected. It was Whether they are really “benchmark” Imports of concentrates surged by India from being a net exporter of refined supposed to be a year of mine disruptions, terms is questionable since the whole an- almost 20% to 16.6mn tonnes in January- copper to a net importer, drastically with the market anticipating that multiple nual benchmark system for pricing copper October, marking a record pace of import. reshaping physical copper flows. So far at labour contract expires would result in at raw material is evolving. The feast is not going to last. Mine supply least there is no sign of the state govern- least one strike, and possibly more. BHP Group, which used to take the is forecast by the ICSG to slow to 1.2% next ment going back on its closure order. In the event there was none. By cop- lead in negotiating the benchmark, has year. The wave of new mines and expan- Glencore’s Pasar smelter in the Philip- per’s standards it has been a remarkably been steadily shifting its pricing strategy sions that started in 2015 and 2016 is now pines should return to normal operations smooth year for mine production, leaving towards shorter-dated and spot contracts. levelling off . BMO, which forecasts a similar after extensive work to repair damage analysts struggling to fill the customary Freeport McMoRan, which has assumed rate of growth, notes that “while there are caused by a typhoon at the start of the collective allowance for disruption in the miners’ benchmark-setting role in the plenty of larger operations coming during year. But Chilean state producer Codelco their forecasts. There has been plenty of last couple of years, is going to have much 2022-2023, for 2019 only First Quantum’s has flagged potential problems with disruption, but it has taken place at the less material available for sale next year as its Cobre Panama operation is adding in excess upgrades of its smelters to meet new smelting-refining stage of the copper Grasberg mine in Indonesia starts transition- of 100,000 tonnes to the market”. environmental standards. production chain, roiling the refined metal ing from open-pit to underground mining. Meanwhile, lower production at Gras- Overriding this ongoing disruption, market and allowing smelters to feast on a Step forward Antofagasta to lead the berg, one of the world’s largest mines, is however, is the expected commissioning rare abundance of raw materials. miners this time around. The company now a “known known” after Freeport’s of more refining capacity in China, led by This dynamic looks set to change again may be a reluctant benchmark setter spectrum of concentrates quality and mined copper production rose by around third-quarter guidance that output would Chinalco’s new 400,000 tonnes per year next year, judging by the benchmark though. To quote analysts at BMO Capital levels of impurity, and this year may well 3% in the first eight months of this year, drop to around 250,000 tonnes from this plant. It will be the first of a new genera- copper concentrate terms set by Chilean Markets, Antofagasta has in the past “been see a wider than usual array of contract according to the International Copper year’s expected 525,000 tonnes. tion of “large, environmentally eff icient miner Antofagasta and China’s Jiangxi able to cut special deals at low TCRC terms terms. However, for want of anything else, Study Group (ICSG). It looks on track to Unexpected mine disruption is always and technologically advanced” plants due Copper. The headline deal between the for (its) Los Pelambres concentrate, which Antofagasta and Jiangxi’s deal is the 2019 meet comfortably the ICSG’s forecast of the “known unknown” in the copper mar- to enter production over the next three two companies for 2019 is for Jiangxi to produces the highest grade among major benchmark and one that points to signifi- 2% growth over the whole of 2018. ket and it seems unlikely 2019 will prove years, according to BMO. receive a treatment charge (TC) of $80.80 Chilean mines”. There is always much lati- cant shifts in the copper supply picture. That doesn’t sound like much but it’s a as smooth as this year has turned out to per tonne and a refining charge (RC) of tude in how miners and smelters price off The first shift will be a sharp slowdown marked improvement from 2017, when the be. The unexpected twist in copper supply „ Andy Home is Reuters market analyst. The 8.08 cents per pound for converting An- the annual benchmark, reflecting the wide in growth in mined production. Global ICSG estimates global mine production fell this year has been the level of disruption views expressed are those of the author. Sunday, November 25, 2018 GULF TIMES BUSINESS

Milaha showcases contributions to Qatar economy’s resilience at Doha conference

Milaha, a Qatar-based shipping delegation to the conference Al-Mannai said: “From the first the blockade’s repercussions and logistics conglomerate, where he delivered a day of the blockade, Milaha has have been mitigated and participated in the ‘2nd Business presentation and showcased proven itself to be a reliable even reversed to Qatar’s Continuity and Resilience the latest upgrades in Milaha’s and trustworthy partner by benefit; and the shortage of Conference’, which was held operations and services, and the ensuring business continuity to vital goods and supplies was in Doha last week under the company’s contribution to the all its clients, starting with the averted.” patronage of HE the Minister of overall resilience of the Qatari relocation of our transshipment Al-Mannai also received the Commerce and Industry Ali bin economy. hub and the quick rollout and Business Continuity Institute’s Ahmed al-Kuwari and attended In his presentation, al-Mannai expansion of fast, direct shipping ‘Award for the Continuity and by business continuity, risk highlighted some of Milaha’s services between Qatar and Resilience Provider’ category, management, and organisational success stories since the key regional and international which was judged by a UK- resilience professionals from all beginning of the blockade, ports in the Sultanate of Oman, based panel of independent sectors. notably, connecting Qatari cargo Kuwait, Pakistan, India, and international experts in further Milaha president and CEO to international liner networks Turkey. recognition of Milaha’s role in Abdulrahman Essa al-Mannai and supporting Qatar’s food “As a result of those decisive ensuring continuity of business Milaha president and CEO Abdulrahman Essa al-Mannai receiving the award from HE Dr Mohamed bin headed the company’s supply chain connectivity. and prompt measures, a lot of in Qatar. Saleh al-Sada during the ‘2nd Business Continuity and Resilience Conference’ held recently in Doha.

Business forum to highlight investment opportunities for Qatar and France

By Peter Alagos to attract Qatari FDI infl ows to Business Reporter France, which, according to the ambassador, is the top Europe- an destination for industry and he ‘Qatar-France Busi- logistics foreign direct invest- ness and Investment Fo- ments. Trum’, which starts today, France is also the home of the “is setting a precedent in Qatar” world’s biggest startup campus, and aims, for the French coun- ‘Station F’, which opened in Paris terpart, at increasing visibility in 2017. This year, Gellet said glo- on its off er and at off ering Qa- bal companies, such as Toyota, tari partners broader business IBM, and Google have announced and investment opportunities new investments in France. with France, French ambassador “France is attractive for for- Franck Gellet has said. eign investment as it has never The forum, which runs un- been before. France is the sev- til November 26 at the W Doha, enth world economy, and one of will bring for the fi rst time a the largest domestic markets in delegation of 60 leaders of ma- Europe. It represents, by her ge- jor French groups and small ographical position and the high and medium-sized enterprises quality of her infrastructures, (SMEs), specialising in the fi elds the best gateway to, not only Eu- QFC Authority’s Sheikha Alanoud during the panel discussion at the the Global Annual Summit held in Paris, France. of agriculture and agro-food rope and its 500mn inhabitants, processes, logistics, new tech- but also to the Middle East and nologies, healthcare, and serv- Africa, hardly more distant. ices to discuss new export and “France also benefi ts from a investment opportunities. historical recognition in terms of “The objective of this two-day R&D, but also in terms of indus- event is to create new partner- trial know-how, off ering an as- ships in a wide range of fi elds, set of more than 1mn engineers, including agriculture and food perfectly trained and prepared to QFC discusses role of production, logistics, health, benefi t from the ongoing digital and Information and Communi- revolution. France is, indeed, a cation Technologies, and there- land of innovation with nearly by strengthen the business and 10,000 startups and 300 incu- investment relations between bators,” Gellet explained. our two countries. The ambassador said France business hubs in wealth “We have decided to organ- off ers a cost-competitive and ise this forum to show our Qa- stable business environment for tari partners that France is front investment opportunities, add- and centre in Qatar. Our country ing that the reforms undertaken has major industries and many by the government for more than innovative and creative busi- a year “are already bearing fruit.” ness solutions to off er. We also “Eighty fi ve percent of eco- creation at Paris meet wish to highlight to big groups nomic decision makers consider and French SMEs that Qatar is a France as an attractive destina- he Qatar Financial Centre ment, QFC, highlighted the resilience lenges have created new opportunities efits, such as working within a legal en- country of constant new oppor- tion. Key reforms are imple- (QFC), one of the world’s lead- of the Qatari economy, the newly en- for Qatar and the QFC, and how Qatar vironment based on English common tunities,” Gellet told Gulf Times mented in order to reduce labour Ting and fastest growing on- acted Qatari laws that contain robust has retained its position as an econom- law, the right to trade in any currency, in an interview. cost, to support employment, shore business and financial centres, provisions for foreign investors, and ic hub, having opened up its economy up to 100% foreign ownership, 100% Gellet said the forum also aims and to boost growth,” Gellet said. has participated in the Global Annual the unique range of incentives offered with legal and business reforms, and repatriation of profits, 10% corporate Summit in Paris, France where it dis- by the QFC platform to local and for- new ownership laws to ensure up to tax on locally sourced profits, and an cussed the role of business hubs in eign investors wishing to do business in 100% ownership for foreign investors. extensive double tax treaty agreement wealth creation. the region. The QFC is an onshore jurisdiction, network with more than 60 countries. Attended by government leaders, Sheikha Alanoud said: “Qatar has allowing companies to operate in and In addition, the independent Em- family offices, private investors, phi- witnessed impressive economic growth from Qatar within the QFC legal and ployment Standards Office of the QFC lanthropists, and investment man- and continues to offer lucrative in- tax environment. The QFC endeavours embodies a unique Administrative Em- agers, the Global Annual Summit is vestment opportunities and laws that to promote Qatar as an attractive busi- ployment Dispute Resolution Centre considered as the flagship event of the facilitate long-term and sustainable ness destination. Companies that wish in line with the International Labour Private Wealth Institute and the larg- economic development. In parallel, to establish a business in the QFC are Organisation (ILO) principles that pro- est global private wealth event in the the Qatar Financial Centre’s unique guided throughout by a dedicated QFC vides conciliation and adjudication world. platform continues to facilitate ease in relationship manager who assists in the services free of charge to resolve work- As part of a panel titled ‘The Role business set-up for entities wishing to process of obtaining a licence and of- place conflicts. The ESO is fully aligned of Business Hubs in Wealth Creation’, expand to Qatar and beyond.” fers support in matters related to oper- with the Qatar National Vision 2030 Sheikha Alanoud bint Hamad al-Thani, During the panel, Sheikha Alanoud ating a business in Qatar. and aspires to promote international managing director, Business Develop- highlighted how the regional chal- QFC firms enjoy competitive ben- best practices in the world of work. Gellet: Strengthening business and investment relations.

Hamad Port gets high commendation at IHS DPC Innovation Awards

Hamad Port was awarded high commendation in the Coastal Dredging Project of the Year category at the inaugural IHS DPC Innovation Awards held recently in Amsterdam, the Netherlands, with the participation of a large number of in- dustry experts, ports and shipping companies’ senior off icials, maritime organisations and operators of stations. The IHS DPC Innovation Awards celebrate the sector’s most innovative and forward-thinking projects, which change the industry through new ideas, processes, technology or equip- ment. It is organised annually by the industry’s leading trade magazine, IHS Dredging & Port Construction, to recognise outstanding innovation and technological contributions made by the dredging and port construction industry. Hamad Port was shortlisted in three categories out of 15 categories that the annual award celebrates amid “great Off icials at the awards ceremony. competition from ports and various industry fields”, according to a press statement. “The commendation from the IHS DPC tonnes of explosives were used to challenge the drafts – with Innovation Awards comes in recognition of the global stand- full commitment to preserving wildlife and marine life – to ards adopted by Hamad Port and the enhanced infrastructure extract more than 44.5mn cubic metres of dredged material, of the environmentally friendly port technology in the world, which was used in other construction activities in the project, which has contributed to strengthening the port’s position not resulting in huge savings for the project. only in the region but also worldwide. It also underscores Qa- “Thanks to the unlimited support of the government and tar’s success in developing mega infrastructure projects in line the great role played by the Ministry of Transport and Com- with the highest international standards,” the statement noted. munications represented by Mwani Qatar, Hamad Port was The commendation was awarded to Hamad Port for the able to occupy a prominent position among regional and use of unique systems in the construction and excavation of international ports within a short period of its operation, gain- the port basin, which was built on land in a rare operation of ing the confidence of international shipping lines, establishing its kind in international ports. With depths of up to 18m and itself as one of the pivotal ports in the region that is reliable 10km long, Hamad Port’s basin construction took about two in the development of the international maritime trade,” the and a half years of excavation, during which more than 6,900 statement added.