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BREXIT PLANS | Page 2 French banks scale back staff moves Saturday, November 24, 2018 Rabia I 16, 1440 AH EVIDENCE OF A HEALTHY ECONOMY : Page 12 Black Friday shoppers GULF TIMES brave cold, long lines BUSINESS in hunt for deals in US European Union prepares for China is said to resume euro clearing in ‘no deal’ Brexit Reuters Iran oil imports after London European Union regulators began yesterday to implement plans to ensure that trillions of euros in cross-border derivatives transactions would not be disrupted in the event of a “no deal” Brexit. Britain and the EU are due tomorrow to endorse a receiving curbs waiver divorce deal that includes a transition period from Brexit next March until the end of 2020, but it is unclear if Bloomberg there is enough support in Britain’s parliament to vote Beijing it through. The European Securities and Markets Authority (ESMA) said yesterday it would begin the process of temporarily sia’s largest buyer of Ira- “recognising” clearing houses in Britain so they could nian oil is said to have re- continue clearing derivatives trades for EU customers Asumed purchases from the after Brexit if no transition is in place. Gulf state following a one-month LCH, an arm of the London Stock Exchange, clears more hiatus, a move that will help al- than 90% of interest rate swaps in Europe, contracts lay fears that US sanctions on the that allow banks and companies to shield themselves Opec producer will constrain glo- against unexpected moves in interest rates harming bal supplies. their business. China will start loading the French central bank governor Francois Villeroy de crude again in November after it Galhau, who has spoken out against British clearing halted purchases in October, ac- houses having access to European markets without EU cording to people with knowledge oversight, said yesterday he supported a temporary of the matter, who asked not to be solution in case of a no deal Brexit. identifi ed because it’s confi den- “But this would obviously have to be a temporary tial. The Asian nation was one of solution, for a period of no more than a year or so,” he a handful that won exemptions told a regulatory conference in Paris. from the US to keep importing ESMA was given the green light to put contingency Iranian oil without falling foul of plans in place by the European Commission earlier this sanctions, with a waiver allow- month. ing 360,000 barrels a day for six “ESMA has already started engaging with UK CCPs months starting November. (clearing houses) to carry out preparatory work,” the EU Global benchmark Brent crude watchdog said in a statement. surged more than 20% after Presi- European financial industry lobby AFME said ESMA’s dent Donald Trump’s decision to announcement was still lacking in detail and timing. reimpose sanctions on Iran stoked The Bank of England has said preparations in case of a fears of a supply defi cit. Prices no deal Brexit were urgently needed, but Brussels has have since collapsed to their low- insisted for months it was up to the private sector to act est level this year as those con- first. cerns eased after the issuance of A worker passes stores of oil drums and gas flares while working aboard an off shore oil platform in the Salman Oil Field, operated by the National EU policymakers and the European Central Bank waivers to eight nations including Iranian Off shore Oil Co, near Lavan island, Iran (file). China will start loading Iranian crude again in November after it halted purchases in October, ultimately want to see more euro denominated China, South Korea and India. according to people with knowledge of the matter. clearing being located in the eurozone, under the The Chinese government had bloc’s direct supervision, once Britain becomes a non- previously told at least two state- process. Nobody responded to two countries are among a handful other shippers to stay away, ac- the third-biggest importer of Ira- EU state. owned companies to avoid buy- faxes sent to China’s Ministry of that won exemptions from the US cording to the people. Price of nian oil, it was the fi rst major buy- LCH has a subsidiary in Paris and customers are shifting ing Iranian oil in the lead-up to Foreign Aff airs and Ministry of to keep importing Iranian oil with- global benchmark Brent crude in er to cut to zero as the US prepared the clearing of euro repo contracts to the French capital the November 4 sanctions review Commerce seeking comment. out falling foul of sanctions. London has fallen more than 10% to impose sanctions. It’s now al- from London, but Villeroy wants the eurozone to build deadline. The nation’s decision Meanwhile, it may take until The US sanctions haven’t just since waivers were given to eight lowed to buy as much as 200,000 its own capital market after Brexit. to restart purchases precedes February or even later for some of impacted countries doing business countries in early-November, as barrels a day of condensate, a type “Fortunately, LCH SA will centralise repo transactions an upcoming meeting between Iran’s biggest oil buyers to resume with Iran, they’ve also deterred fi - fears of an oversupplied market of ultra-light oil. The country at the beginning of 2019. More generally, we would Presidents Xi Jinping and Donald purchases after winning waivers nancial institutions, insurers and outweighed earlier concerns of a bought about 300,000 barrels a like to see the development in Paris of an enhanced Trump at the Group of 20 sum- from the US as they seek to resolve shippers from dealing with the defi cit. day of South Pars condensate from and extended clearing services off ering in the area of mit next week and coincides with complications over insurance, Gulf state. That means that, even Almost all major buyers of Iran’s Iran in 2017. interest rate derivatives.” fl aring trade tensions between the shipping and payments. though buyers of Iran’s oil received oil had negotiated with the US for Iranian crude and condensate Rival Deutsche Boerse off ers a profit share scheme world’s two largest economies. Japan is unlikely to lift cargoes waivers, the actual process of get- the waivers, arguing that cutting bound for Japan fell to zero in to attract clearing in euro repo, government bonds Although Chinese purchases are before then, while South Korea ting barrels isn’t proving easy. purchases to zero would aff ect October. The size of its waiver and interest rate derivatives from LCH in London to set to resume shortly, payments to could take until March, according Some buyers may have to use their energy industries and boost is yet to be confirmed. In the Frankfurt. Iran will only be settled at a later to people with knowledge of the Iran’s national tanker company to fuel costs. Italy, Greece, Turkey first nine months of the year the LCH parent, the LSE, has said it has no plans to apply for date, say the people, as both par- matter, who asked not to be iden- haul the crude as the risk of getting and Taiwan also won exemptions. country imported about 160,000 a licence to clear interest rate swaps in Paris. ties strive to work out a smooth tifi ed because it’s confi dential. The cut off from US business prompts While South Korea used to be barrels a day. Eurozone business activity in the slow lane as exports brake PMI points to Q4 eurozone GDP omy, business growth has slowed to a European Central Bank to stop buying While none of the economists polled the eurozone economy has weakened. China in sight — something already growth of 0.3%: IHS Markit; near four-year low this month, a survey bonds next month as planned. by Reuters expect the programme to be This was mainly because of weaken- hitting export-sensitive economies like composite PMI lowest since showed earlier, sending the euro down Growth was pegged at 0.4% in that extended into next year, interest rates ing export orders, which has happened Germany — optimism took a hit. December 2014; services and to a day’s low of $1.1365. poll, but IHS Markit said the PMI are not forecast to be raised until after across both industry and services,” said The business expectations index fell factory PMIs also decline France’s private sector also struggled pointed to a weaker 0.3% rate and could June. Bert Colijn at ING. to its lowest in almost four years. to keep up momentum in November as fall to 0.2%, depending on how Decem- yesterday, investors further scaled Weaker exports were the primary Manufacturers saw growth slow this Reuters manufacturing activity softened in the ber pans out. back expectations for a rise in eurozone driver behind Germany’s fi rst quarterly month, with their PMI falling to 51.5 London face of falling new orders, a sister sur- “November’s fall in the composite interest rates next year. economic contraction since 2015, data from 52.0, a level not seen since mid- vey showed. PMI raises doubts about whether the They are now pricing in a less than showed yesterday, confi rming a pre- 2016. IHS Markit’s Flash Composite Pur- economy will rebound after a weak Q3. 90% chance of a 10 basis-point in- liminary negative reading of 0.2% in An index measuring output, which urozone business growth has chasing Managers’ Index for the eu- There’s no wonder the news has been crease in the ECB’s deposit rate — the the third quarter.