ROUBLE CLIMBS: Page 11 Russia lowers interest rates as infl ation slows

Saturday, June 15, 2019 Shawwal 12, 1440 AH INDUSTRIAL PRODUCTION RISES: Page 12 Solid US retail sales GULF TIMES off er economy BUSINESS some respite EU tries to revive plan for financial transaction tax

Reuters The latest tax proposal would Luxembourg apply to purchases of shares in listed companies headquar- tered in the EU at a rate of European Union finance minis- 0.2% or more, according to a ters have discussed yesterday text prepared by the German a plan for a 0.2% tax on shares, government. which Germany sees close to be It is less ambitious that the agreed, although further work original plan covering deriva- remains to be done. tives and other financial instru- Plans for an EU financial trans- ments. action tax (FTT) have stumbled Under the German plan, which over the past years. is backed by France, the tax After an initial proposal in would be charged on compa- 2011 was blocked by member nies with a market capitalisa- governments, a group of states tion above €1bn ($1.1bn) to avoid pressed ahead, while the major- hurting smaller businesses. ity of the 28 EU states backed Initial public off erings, market down. making and intraday trading French Finance Minister Bruno Le Maire arrives for a meeting of European finance ministers in Luxembourg (file). “We did tonight what we had set out to do; we’ve created a Only ten countries, including would also be exempt. genuine eurozone budget,” Le Maire said after more than 12 hours of talks yesterday. France, Germany, Greece, Italy The levy is based on a tax and Spain — are still interested already in place in France. in the common tax. Discussions continue on how In a televised debate Germany’s to share the revenue of the Finance Minister Olaf Scholz tax among those countries said a limited deal on a levy considering it. could be reached this autumn One option is to fund the EU in order to apply the tax in 2021. budget, which is used to finance The EU Commission supported research projects, investments his stance, but no other minis- and other economic activities in EU ministers strike ters took the floor in the debate member states. on the matter during a meeting “The risk is that the FTT is seen attended by representatives of as a tax on liquidity,” said Jason all EU governments. Piper, Head of Taxation at ACCA, “It is hard to say whether a deal the Association of Chartered is possible this time,” an EU Certified Accountants. off icial told Reuters. In that case, “those traders who “There’s need for further work. can will simply move their ac- shaky compromise Things seem to be moving tivities to another jurisdiction, in the right direction but we with knock-on impacts on the have been there several times markets that they’ve deserted,” on eurozone budget before,” the off icial added. he added. Fed seen on track for 2019 AFP Le Maire said after more than 12 hours of rather the Budgetary Instrument for Com- presented for formal approval to EU lead- rate cut though call is close Luxembourg talks. “For the fi rst time, we have created petitiveness and Convergence or BICC. ers at a summit next week in Brussels with an operational budget that will help eu- The cumbersome jargon came at the hopes that the fi nancing deadlock can be rozone countries to converge and become demand of the Dutch, who have accepted broken. Bloomberg makers acting when they meet U fi nance ministers agreed on the more competitive. the instrument only on condition that it “Long and fruitful discussions in Lux- Washington next week in Washington. The broad outlines of a eurozone budget It’s a breakthrough,” he told AFP. remains a modest aff air and under the au- embourg Eurogroup,” wrote Dutch fi - median survey response pointed Eearly yesterday, a key reform pushed Other offi cials were more cautious of thority of the overall EU budget. nance minister Wopke Hoekstra on Twit- to a quarter-point reduction in by Paris that was scaled back amid deep the deal’s reach, with EU commissioner This is in opposition to the French and ter, hailing “excellent” breakthroughs in The Federal Reserve will likely December. Sixteen respondents resistance from the Netherlands. Pierre Moscovici acknowledging that the Spanish who would like the budget to be other areas, such as reforming the bloc’s cut interest rates this year but expect the Fed to keep rates French President Emmanuel Macron deal was incomplete and limited. governed specifi cally by eurozone mem- crisis war chest, the European Stability not nearly as aggressively as steady all year and two antici- had championed the idea of budget, seen “Some would say we took only small bers who could step up contributions in- Mechanism. investors expect, according to a pate a quarter-point hike. by many as a missing pillar in the single steps... that may be true in a way,” Mosco- dependently from the full 27 EU members On the eurozone budget he added only: Bloomberg survey of economists. Investors, by contrast, are pric- currency bloc almost a decade after the vici told reporters. (after the exit of Britain). “Discussion on the fi nance of the BICC Respondents to a June 7-12 poll ing in 70 basis points of easing debt crisis nearly led to it tumbling down. “It’s the best compromise with the “No avenue for this budgetary instru- will continue at a later stage.” saw policy makers lowering rates by the end of 2019, based on But his original proposal has been toned present state of play in Europe. ment was closed yesterday... and this To please the northern countries, by a quarter point this year. That’s federal funds futures contracts. down by opponents, led by the Dutch, We must not forget that some coun- is the important thing,” said Eurogroup the ministers unanimously agreed that a meaningful shift since March — Fed off icials gather June 18-19 with the sensitive question of fi nancing tries, some ministers were against the chief Mario Centeno after the talks. spending from the new budget would be when economists anticipated a in Washington. Economists and left unresolved and put off to a later date. word, the fact,” he added, referring to the All sides agreed the fi nal amount for the strictly limited to pre-approved invest- hike in September — reflecting a investors alike will be on the The Netherlands lead a group of richer idea of a “budget”. Spanish Finance min- budget will be much lower than the initial ment and structural reforms and not to darkening global economic out- lookout for any signal that policy northern eurozone members that fear ister Nadia Calvino said: “I am convinced hopes of the French president, who had help boost the economy during a down- look driven in part by President makers intend to cut at their a joint budget would serve to transfer that there will be a eurozone budget. envisaged several hundred billion euros. turn. Donald Trump’s escalating dispute next meeting, in July. The Fed wealth towards crisis-prone countries What we still do not have is 100% clar- Two European sources mentioned a Payments would come with clear con- with major US trading partners. is scheduled to release a policy such as Italy, Greece or Spain. ity on what the characteristics are.” budget of €17bn spread over seven years ditions, a statement said, much like exist- Still, economists believe the Fed statement at 2pm on Wednesday “We did tonight what we had set out The ministers’ agreement is offi cially not between the 19 countries that use the sin- ing EU structural funds and the austerity won’t rush into a rate cut. None followed 30 minutes later by a to do: we’ve created a genuine eurozone called a budget — which would be too po- gle currency. pushing bailouts for Greece, Portugal and of the 43 respondents saw policy press conference. budget,” French Finance Minister Bruno litically sensitive in some countries — but The compromise by ministers will be Ireland.

Oman Air plans Airbus talks French, Italian shipbuilders forge naval alliance

Reuters Guillou, chief executive of Naval government interference for the Paris Group told reporters on a call. deal’s collapse. “We are by far the two biggest Meanwhile, at France’s re- naval shipbuilders in Europe, quest, the European Union’s rance and Italy forged a but we cannot remain competi- antitrust chief is examining Fin- military shipbuilding al- tive and maximise our resources cantieri’s purchase of a 50% stake Fliance yesterday, as state- if we rely only on our domestic in French shipbuilder Chantiers controlled Naval Group and markets.” de l’Atlantique, formerly STX, a Fincantieri signed off on a 50- The joint venture does not move which irritated Fincantieri 50 joint venture that will bid for entail a share swap between the and Rome. Franco-Italian warship projects two groups. France and Italy fi rst Fincantieri top executives re- and sell to the world market. outlined plans to deepen naval cently said they were confi dent The alliance refl ects the two shipbuilding cooperation in Sep- of winning approval from Brus- countries’ desire to fend off com- tember 2017. sels, but that it could take some petition in naval shipbuilding However, political and busi- months. from the likes of China, the Unit- ness relations between the two The joint venture between Oman Air CEO Abdulaziz al-Raisi plans to hold talks with Airbus if Boeing does not provide a support and recovery plan for its ed States and Russia. It is tar- euro zone powerhouses have be- Fincantieri and Naval Group, in grounded 737 MAX planes before June 17, a statement by the Omani company said yesterday, according to a Reuters report. “The geting orders worth up to €5bn come increasingly fraught since which French defence company grounding of the 737 MAXs has had a major financial impact on Oman Air,’’ the statement cited al-Raisi as saying. “The airline’s ($5.63bn) over the next decade. then and uncertainty hangs over Thales has a 35% stake, seeks to expansion plans for 2019 had been significantly curtailed’’ and Oman Air “also suff ered revenue losses and market share declines,’’ he Naval Group said the joint other deals. balance power within the alli- added. “Boeing promised a recovery and support plan for Oman Air that would be submitted to the airline before the upcoming Paris venture aims to build 10-15 war- Earlier this month, Fiat Chrys- ance. Airshow starting on 17th June 2019. If I don’t hear back from Boeing before I arrive at Le Bourget Airport, then I will have to go ahead ships in that period, with syner- ler withdrew its proposal for a That has been a stumbling with my planned business lunch with Airbus at the airshow,” the Oman Air statement cited al-Raisi as saying. Picture shows a Boeing gies estimated at 10-15%. €35bn merger with Renault, with block for other Franco-Italian 737-800 aircraft, operated by Oman Air, standing beside the passenger terminal at Muscat International Airport. “It is the product of a shared both the Italian-American car- mergers such as the troubled Es- industrial ambition,” Herve maker and Rome blaming French silor-Luxottica tie-up. Gulf Times 2 Saturday, June 15, 2019 BUSINESS

China probes China hikes anti-dumping FedEx after Huawei duties on US, EU steel tubes Reuters parcels Beijing hina said yesterday it was rais- misrouted ing anti-dumping duties on Ccertain alloy-steel seamless tubes and pipes used at utilities and AFP imported from the United States and Beijing the European Union. The anti-dumping tax rates ap- plicable to the steel tubes and pipes hina yesterday launched are set between 57.9% and 147.8% an investigation into Fe- on companies in the United States CdEx for “failing to deliver and the EU, effective June 14, Chi- express packages” to the correct na’s Ministry of Commerce said in a addresses in the country, state statement yesterday. media said, after the US delivery The new tariffs are as much as service misrouted some Huawei 10 times the previous rates of 13%- parcels. 14.1%, which were imposed in 2014 FedEx apologised earlier this and expired on May 10. month for the delivery mishap The increased steel tariffs come after Chinese telecoms giant amid the escalating Sino-US trade Huawei said it was reviewing dispute that involves hundred of its ties with the package service billions in goods passing between over the incident. world’s two largest economies. The US delivery fi rm said at Tariffs on US steel extrusion firm the time that “no external par- Wyman-Gordon Forgings are at 101%, ties requested that FedEx trans- while those on all other US companies fer these packages”. are 147.8%, the ministry said. “China’s relevant government The anti-dumping tariff on Val- department has started an in- lourec units Vallourec Deutschland vestigation into FedEx, deliver- GmbH and Vallourec Tubes France ing a notice of inquiry to FedEx are 57.9%, with all other EU compa- China,” Chinese offi cial news nies face tariffs of 60.8%. agency Xinhua reported yester- The decision to extend and raise day, without specifying which the anti-dumping tariff follows a department. request from the Chinese domestic Beijing’s investigation into steel tubes and pipes sector, the min- FedEx comes as Huawei faces istry said. moves from the US to blacklist Last year, government-backed In- the Chinese tech fi rm, cutting it ner Mongolia North Heavy Industries off from American-made com- Group Corp Ltd said in a complaint ponents it needs for products – filed to the Ministry of Commerce: though it was issued a 90-day “Despite the (earlier) anti-dumping Aerosol cans made with tinplate steel at the production plant of Ball Metalpack in Horsham, Pennsylvania. China said yesterday it was raising anti-dumping duties on reprieve in May. measures, producers in the EU and certain alloy-steel seamless tubes and pipes used at utilities and imported from the US and the European Union. China hit back last month by the United States... further cut export announcing it would create its prices in order to expand and maintain for more than 50% of the specialty prices in 2014. In 2017, the last coming from the United States and ture and pressure, are mainly used own blacklist of “unreliable” their market shares in China.” pipe and tubing market in China in year for which full date is available, EU. in ultra-supercritical thermal power companies and individuals, To make its point, Inner Mongolia the first quarter of 2018, with their China imported 9,500 tonnes of the The products involved in the anti- units, with around 80% of the de- which could target US and inter- North Heavy cited data showing Eu- import prices falling nearly 14% to tubes and pipes used by utilities, dumping case, alloy-steel seamless mand coming from the Chinese mar- national fi rms that have cut off ropean and US products accounted $5,786 per tonne as compared with with nearly 95% of the products tubes and pipes for high tempera- ket. supplies to Huawei. Last week, China’s commerce ministry said the list would not target any specifi c fi eld or com- pany, but that it was “designed in reaction to practises distort- ing the market for non-com- Philippines current account gap to widen mercial purposes.” A separate list system to “more eff ectively forestall and defuse Reuters search. The Philippines has recorded large national security risks” is also in Manila trade gaps since last year, widening its the works, according to a report current account deficit and adding pres- last week by Xinhua. sure on the peso, which weakened to 52.02 The Chinese news agency did he Philippines is expected to end to the dollar after the central bank pro- not elaborate or state whether the year with a wider current ac- jected a wider deficit. the move was linked to the trade Tcount deficit, the central bank said Michael Ricafort, economist at Rizal war but said detailed measures yesterday, as the outlook for exports dete- Commercial Banking Corp, said the im- would be unveiled in the “near riorated due to weaker global demand. provement in the country’s BoP’s posi- future”. This year’s current account deficit will tion – a reflection of sustained foreign US President Donald Trump likely reach $10.1bn, or 2.8% of gross do- exchange inflows – should provide greater is expecting to meet with his mestic product, the central bank said, support for the currency. Chinese counterpart later this wider than an earlier forecast of a $8.4bn Central bank deputy governor Diwa month at the G20 summit in Ja- gap and greater than last year’s $7.9bn Guinigundo said trade deficits were to be pan, though Beijing has not con- deficit. expected as the government continues to fi rmed whether Xi Jinping will But strong foreign portfolio inflows and spend more on infrastructure meant to attend. foreign direct investments will strengthen support growth and strengthen the econ- A Trump-Xi meeting would the country’s balance of payments (BoP) omy’s buffers against global economic mark a turning point in the position. uncertainties. bruising trade dispute between The central bank forecast a surplus of “Precisely because we continue to the world’s two biggest econo- $3.7bn this year from a previous estimate spend more and more on infrastructure... mies, which has spooked mar- of a $3.5bn deficit. we should be able to build a critical mass kets worldwide and sparked Imports were seen growing 7% in 2019. of capacity for exports and more stable worries about the global econ- While slower than an earlier estimate of imports so that the current account will omy. 9%, it would still outpace the downwardly be more or less stable at below 3%,” Guini- Negotiations to resolve the revised growth forecast of 2% for exports, gundo said. The central bank has started dispute stalled last month after the central bank said. to unwind some of its policy tightening Washington increased tariff s on Diwa Guinigundo, deputy governor of Bangko Sentral ng Pilipinas, gestures while speaking during a news “We are seeing weaker economic ac- last year when it cut its benchmark inter- $200bn worth of Chinese im- conference in Manila. Guinigundo said trade deficits were to be expected as the government continues to spend tivity and that’s pushing down the global est rate by 25 basis points in May and an- ports, sparking retaliation from more on infrastructure meant to support growth and strengthen the economy’s buff ers against global economic demand for exports,” said Dennis Lapid, nounced a three-step reduction in banks’ Beijing. uncertainties. central bank director for economic re- reserve requirement ratio to boost growth.

Hong Kong tycoons start moving assets offshore as fears rise over new extradition law

Reuters the number in Singapore – according to a covering the proceeds of drug offences. “This Hong Kong already has extradition treaties. noted that any external confiscation order Hong Kong 2018 report from Credit Suisse. has been largely overlooked in the public As well as removing an explicit block on had to be registered in a Hong Kong court and The extradition bill, which will cover Hong debate but it is really a significant part of the extraditions to mainland China in the could be challenged. Kong residents and foreign and Chinese proposed amendments,” Young said. “It may current Fugitive Offenders Ordinance, the It had to meet a “double criminality” standard, Some Hong Kong tycoons have started nationals living or travelling through the city, not have been overlooked, of course, by the amendments also remove the restrictions whereby it had to be based on conduct that moving personal wealth offshore as concern has sparked unusually broad concern it may tycoons and those giving them legal advice.” on the mainland from the Mutual Legal was also a crime in Hong Kong. deepens over a local government plan to threaten the rule of law that underpins Hong Singapore shift Assistance in Criminal Matters Ordinance, “The rights and freedoms of Hong Kong allow extraditions of suspects to face trial in Kong’s international financial status. known as the MLAO. people and foreigners in Hong Kong, including China for the first time, according to financial Hong Kong’s Beijing-backed leader, Carrie The head of the private banking operations According a recent Hong Kong Bar their assets, are fully protected by the Basic advisers, bankers and lawyers familiar with Lam, has stood by the bill, saying it is of an international bank in Hong Kong, who Association study, the MLAO allows foreign Law,” the spokesman added, referring to Hong such transactions. necessary to plug loopholes that allow declined to be named, said clients have jurisdictions to ask Hong Kong authorities Kong’s mini-constitution. One tycoon, who considers himself criminals wanted on the mainland to use the been moving money out of Hong Kong to to gather evidence for use outside the city Prominent commercial lawyer Kevin Yam potentially politically exposed, has started city as a haven. Singapore. “These aren’t mainland Chinese “and to render other forms of assistance, said he was aware of high net-worth Hong shifting more than $100mn from a local She has said the courts would safeguard clients who might be politically exposed, such as freezing and confiscating the assets Kong figures taking steps to move assets Citibank account to a Citibank account in human rights. but wealthy Hong Kong clients,” the banker of persons wanted for crimes in other to Singapore as they matured or market Singapore, according to an adviser involved Protests and violence forced an initial said. “The situation in Hong Kong is out of jurisdictions”. conditions proved favourable. in the transactions. legislative debate to be shelved last control. Search, seizure and confiscation can “At this point I would say it is a steady trickle “It’s started. We’re hearing others are doing Wednesday and it is unclear when they They can’t believe that Carrie Lam or Beijing involve cases with a penalty of two years rather than stampede but is most definitely it, too, but no-one is going to go on parade would resume to pass the bill. leaders are so stupid that they don’t realise in prison or more, compared with the happening,” he said. that they are leaving,” the adviser said. “The Professor Simon Young, of the University of the economic damage from this.” threshold of seven years for extraditions Three other private bankers said they had fear is that the bar is coming right down on Hong Kong’s law school, told Reuters that it A Hong Kong government spokesman did under the Fugitive Offenders Ordinance, the received inquiries from clients about the Beijing’s ability to get your assets in Hong was understandable that some Hong Kong not directly address Reuters’ questions over submission notes. impact of the bill, but had not yet seen the Kong. Singapore is the favoured destination.” residents might be considering moving capital flight, but said Hong Kong’s “world Requests can also be made at the funds move. Hong Kong and Singapore compete fiercely assets out of the city given the little-noticed class financial infrastructure” and open, investigative rather than prosecution stage. Yam said few expected the bill to be widely to be considered Asia’s premier financial financial reach of the bill. international market had a regulatory regime The association notes that the mutual legal exploited by Beijing overnight if passed, but centre. If the bill becomes law, it will be possible “completely compatible with that of overseas assistance amendments would “significantly it was creating a climate of deep unease, with The riches held by Hong Kong’s tycoons for mainland Chinese courts to request markets”. strengthen the impact of the amended the fear it could be used more liberally in have until now made the city the larger base Hong Kong courts to freeze and confiscate The amendments seek to simplify case-by- Fugitive Offenders Ordinance in relation to coming years. for private wealth, boasting 853 individuals assets related to crimes committed on the case extraditions to jurisdictions, including criminal prosecutions on the mainland”. “It is great for Singapore,” he said. “And such worth more than $100mn – just over double mainland, beyond an existing provision mainland China, beyond the 20 with which The Hong Kong government spokesman an own goal for Hong Kong.” Gulf Times Saturday, June 15, 2019 3 BUSINESS

Mitsubishi China May industrial output Aircraft unveils growth cools to 17-year low SpaceJet brand Reuters Beijing Reuters Singapore hina’s economy fl ashed more warning signs in May as the CUnited States ramped up trade apan’s Mitsubishi Aircraft pressure, with industrial output growth Corp rebranded its MRJ unexpectedly slowing to a more than Jfamily jets to be called the 17-year low and investment cooling, “SpaceJet” and unveiled a rede- underlining a need for more stimulus. signed version of the smaller jet Hours after the surprisingly weak to help improve its sales pros- data, China’s central bank announced pects in the large US market. 300bn yuan ($43bn) in fresh support The SpaceJet M100, the re- for smaller banks, though analysts ex- vamped version of the MRJ70, pect more sweeping measures in com- will now have up to 76 seats in ing months if the US-Sino trade dispute a typical US cabin confi guration intensifi es. rather than the earlier 69 seats, Despite a slew of support steps since the company said on Thursday, last year, China’s economy is still strug- making it a more attractive of- gling to get back on fi rmer footing, and fering for regional carriers with investors fear a longer and costlier trade contracts to major carriers. war between the world’s two largest economies could trigger a global reces- Of the 213 fi rm orders for sion. Mitsubishi jets, 150 are split Industrial output grew 5% in May between two US regional from a year earlier, data from the Na- carriers, SkyWest Inc and tional Bureau of Statistics showed yes- Trans States Holdings terday, missing analysts’ expectations of 5.5% and well below April’s 5.4%. “On paper, it looks good,” The reading was the weakest since Leeham Co analyst Bjorn Fehrm early 2002, and exports were a major said of the redesign. “The range drag, showing only marginal growth. is there, as is the space for the Fixed-asset investment also grew passengers.” less than expected, reinforcing expecta- The larger SpaceJet M90, re- tions that Beijing needs to roll out more named from MRJ90, is too big growth measures soon. for US regional carriers to fl y “The weakness in May’s and April’s without the relaxation of pilot activity data suggests that economic union rules, an unlikely prospect growth is likely to slow this quarter and due to a pilot shortage that has increases the likelihood of additional given unions more bargaining monetary easing in the coming months,” power. Capital Economics said in a note. Of the 213 fi rm orders for Vice Premier Liu He stoked expecta- A worker polishing an oil pipe at a factory in Qingdao, Shandong province. China’s economy showed further signs of weakness last month, with industrial output posting Mitsubishi jets, 150 are split be- tions of more action on Thursday, urg- its slowest growth in 17 years, placing further pressure on the government as it tries to steady the ship while battling a trade war with the US. tween two US regional carriers, ing regulators to do more to boost the SkyWest Inc and Trans States economy and saying Beijing has plenty the third quarter. The PBoC has already week and gloomy May factory surveys. The PBoC has repeatedly urged state- and port projects, some analysts have Holdings. of tools it can use. slashed RRR six times since early 2018 in Power generation last month grew controlled banks to keep lending to been puzzled by the slower-than-ex- The M100 cabin interior will Analysts at Goldman Sachs said in a a bid to turnaround soft credit growth. just 0.2%. cash-strapped smaller, private fi rms pected response. be on display at next week’s Paris note they expect authorities to further It has also injected large amounts of Analysts say China is readying itself at lower rates, even if they are facing On Monday, China announced steps Airshow and Mitsubishi Aircraft cut banks’ reserve requirement ratios liquidity into the fi nancial system and for a prolonged trade dispute, after both short-term fi nancial diffi culty, but av- to give local governments more fi nanc- said a formal launch of the pro- (RRRs) to free up more funds to lend and guided short-term interest rates lower. sides raised tariff s on each other’s goods erage rates edged back up in the fi rst ing fl exibility so they can increase infra- gramme was expected later this lower interbank interest rates. However, despite the worsening trade last month and US President Donald quarter. structure spending. year. But they do not expect China to ac- outlook, China watchers appear divided Trump threatened more. The state takeover of troubled re- Property investment rose 9.5% in The M90 is due to enter serv- tively use currency depreciation to sup- over whether the central bank will cut But global policymakers remain gional lender Baoshang Bank in May has May, according to Reuters calculations, ice with Japanese carrier ANA port the economy. benchmark interest rates, as it repeat- cautious ahead of a meeting between added to concerns about liquidity and the slowest pace so far this year. Holdings Inc next year, com- Real estate investment, a key eco- edly did in past downturns. Trump and Chinese counterpart Xi Jin- fi nancial risks, ANZ said. Retail sales bucked the downbeat pared with its initial target of nomic driver, also showed signs of fa- Analysts believe policymakers are ping at a G20 summit later this month. While the PBoC said it was an isolat- trend, rising 8.6% in May on-year and 2013, after a series of programme tigue, with construction starts slowing concerned more aggressive easing could “Our baseline forecast assumes that ed case, the move jarred China’s credit picking up from 7.2% in April, a 16-year delays. markedly and property sales falling the fuel debt risks and put more pressure on US-China relations will not improve markets amid worries that the lending low. Mitsubishi Heavy Industries most since October 2017. the yuan, which is weakening towards much in the foreseeable future,” Oxford push will lead to more bad loans. Analysts surveyed by Reuters had ex- Ltd, the largest shareholder in “The slowdown in the real estate the psychologically important 7-per- Economics said. The central bank said late on Fri- pected a rebound to 8.1%, but some said Mitsubishi Aircraft, this month sector is concerning. We really need dollar level, last seen in the global crisis. Fixed-asset investment growth de- day that it will raise the re-discount it was likely due to higher infl ation rath- said it was holding talks to buy to keep an eye on its negative impact Beijing has relied more on fi scal stim- celerated to 5.6% in January-May from quota by 200bn yuan ($28.88bn) and er than a turnaround in weak consumer rival Bombardier Inc’s money- on growth,” economists at ANZ said ulus to weather the latest downturn, the same period a year earlier. the standing lending facility quota by confi dence. losing regional jet programme. in a note to clients, trimming its 2019 including hundreds of billions of dollars Analysts had expected it to remain 100bn yuan for small and medium- Earlier this week, China’s auto asso- The Bombardier CRJs use growth forecast for China to 6.2% and in infrastructure spending and tax cuts unchanged from 6.1% in the fi rst four sized banks. ciation reported the worst-ever month- older, less fuel-effi cient engines, 6% for 2020. for companies. months of the year. Infrastructure investment grew 4% ly drop in sales. but buying the programme ANZ expects the Peoples’ Bank of But yesterday’s data suggested do- Private sector fi xed-asset invest- in the fi rst fi ve months on-year, moder- On a positive note, nationwide un- would give Mitsubishi a global China (PBoC) to cut RRR by another 100 mestic demand remains sluggish, add- ment, which accounts for about 60% of ating from 4.4%. employment readings were steady from maintenance and support base basis points (bps) this year, and lower ing to weaker-than-expected import total investment, also lost momentum. While construction has picked up as April at 5%, though analysts believe the that could aid with SpaceJet the 7-day reverse repo rate by 5 bps in and bank lending data over the last It rose 5.3%, down from 5.5%. Beijing ramps up spending on road, rail actual jobless rate is likely much higher. sales, according to analysts.

Vietnam’s fi rst homegrown China’s property sales post biggest drop since Oct 2017 Reuters car to be delivered in days Beijing

AFP etnamese branded cars will offi cially China’s property investment growth Hanoi be driven on the streets of Vietnam,” cooled in May and sales saw their said Vingroup director general Nguy- biggest decline since October 2017, en Viet Quanghe. Quang – speaking suggesting the frothy housing market ietnam’s homegrown carmak- at the sprawling factory in Haiphong may not be able to cushion the eff ects er VinFast will deliver its fi rst where rows of red, white and grey cars of a slumping manufacturing sector and Vcars on June 17, the company were being assembled – said the com- intensifying trade tensions. said yesterday as it showcased a fac- pany has received orders for 10,000 Real estate investment, mainly focused tory in one of Asia’s fastest growing cars and “tens of thousands” of e- on the residential sector but also economies. scooters. Vietnam’s Prime Minister including commercial and off ice space, VinFast said it will supply a do- said he hoped the vehicles would help is a major gauge of growth in the world’s mestic market that is rapidly expand- Vietnam become a household name – second-largest economy. ing thanks to a mushrooming middle alongside auto-making heavyweights China’s property market has seen class with a growing appetite for cars Japan and Germany. a recent resurgence as some local – though it will face stiff competition “Vietnamese are able to do what governments eased home purchase from well-established players like the world can,” Nguyen Xuan Phuc rules to boost economic activity, while Toyota and Ford. said. Vietnam’s fast-growing econo- Beijing’s call for banks to ramp up The carmaker is a subsidiary of my has largely been buoyed by cheap- lending and lower interest rates has also Vietnam’s largest private conglomer- ly manufactured goods like sneakers, helped boost investor confidence. ate, Vingroup, which is owned by the T-shirts and computer processors. But the picture is very uneven, and country’s richest man, a press-shy GDP growth hit 7.1% last year, and some analysts caution such a rebound billionaire who started his career sell- the World Bank says annual growth might be diff icult to sustain as broader ing dried noodles in Ukraine. is expected to reach 6.6% later this economic growth slows and off icial It is seeking to tap into national year. The country has said it hopes to property market curbs are expected to pride with vehicles that include sedan move into value-added and high-tech remain in place in most cities. and SUV models, along with e-scoot- manufacturing like more developed A slowdown has been felt deeply in ers and even electric buses. neighbours like South Korea and Ja- many provincial cities after the real A man walks at Lujiazui financial district of Pudong in Shanghai. China’s property market has seen a recent resurgence as “In less than 72 hours, the fi rst Vi- pan. estate market suff ered a downturn some local governments eased home purchase rules to boost economic activity, while Beijing’s call for banks to ramp up in late 2018. Price cuts off ered by lending and lower interest rates has also helped boost investor confidence. developers have led to protests by angry buyers, making authorities wary measures to cope with a waning at ANZ said in a note to clients, trimming looser credit conditions earlier this year of the risk of social unrest. economy and rising trade frictions with its GDP forecasts for China. Some helped alleviate some pains for the debt- Property investment in May grew 9.5% the United States. developers have sought to promote laden developers. Foreign investment from a year earlier, easing from a 12% Property sales by floor area – a key sales by cutting prices, which has also in China’s housing sector rose 38.8% gain in April and marking its slowest indicator of demand – dropped 5.5% in raised alarm. in the first five months, slowing from a pace since December, according to May from a year earlier, compared with The Chinese city of Enshi tried to 103.7% surge in January-April, as Beijing Reuters calculation based on National a 1.3% rise in April. stabilise house prices by urging remained wary of overseas money Bureau of Statistics (NBS) data. May’s decline was the biggest since developers to halt drastic price cuts, flowing into the heated market. It rose 11.2% on-year for the first five October 2017, when sales fell 6%, threatening punishing measures unless New construction starts measured by month, compared with a 10.2% increase according to Reuters calculations. such “wrong behaviours” stopped. floor area also slowed, rising 4% on- in the same period last year and 11.9% in For the first five months, sales fell 1.6% Funds raised by China’s property year in May, versus a 15.5% gain in the January-April. following a 0.3% decline in January- developers grew 7.6% on-year in preceding month, according to Reuters The slowdown was in line with weaker April. “The slowdown in the real estate January-May, lower than an 8.9% calculations. Workers operate the car assembly line at the new automobile plant of VinFast factory activity and producer price sector is concerning. increase in the first four months, off icial For January-May, new construction in Haiphong. VinFast said it will supply a domestic market that is rapidly growth in May, adding pressure on We really need to keep an eye on its data showed, suggesting their financing starts rose 10.5% versus a 13.1% increase expanding thanks to a mushrooming middle class with a growing appetite for Beijing to roll out more stimulus negative impact on growth,” economists pressures may be rising again after in January-April. cars – though it will face stiff competition from well-established players. Gulf Times 4 Saturday, June 15, 2019 BUSINESS Pakistan economic growth to fall to 2.4%: Finance ministry

Internews “The GDP growth is targeted at 4% with revised to 14.5%. For next fiscal year, the and many other indicators are always trajectory. The finance ministry projects and 22.8% in 2021-22. The MTBF also esti- Islamabad agriculture (3.5%), industry (2.2%) and tax to GDP ratio has been pitched at 16.7% diff erent from those targeted by the Plan- GDP growth rate to recover to 4.5% by the mates the total public debt to GDP ratio at services (4.8%). or Rs7.348tn. ning Commission,” he said, adding that end of third year i.e. 2021-22. 77.7% during current year and projected Inflation is projected at 8.5% for 2019- When contacted, a senior off icial of latest data now suggested that inflation Likewise, inflation rate is projected to come down slightly to 77.6% next year. On the basis of budgetary measures, the 20 in view of the higher administrative the finance ministry explained that the rate next year would be lower than 13%. by the ministry to come down to 8.3% in It anticipates total public debt falling to ministry of finance estimates economic prices and monetary overhand of the Planning Commission had set “targets” The medium term macroeconomic 2020-21, instead of 2019-20 as targeted by 75.2% in 2020-21 and 70.6% in 2021-22. growth rate to further slow down to 2.4% past,” reported the Annual Plan 2019-20 based on certain assumptions while the indicators for 2018-22 also put the growth the Planning Commission. The MTMF is prepared by the finance and inflation rate to rise up to 13%, show- of the Planning Commission released with ministry and the State Bank of Pakistan rate for fiscal year 2020-21 at 3%. The ministry projects inflation rate to ministry and the Planning Commission in ing a wide margin with targets set by the the budget documents on June 11. (SBP) made projections on the basis of This means that the finance ministry is reduce to 6% by 2021-22. consultation with various ministries and National Economic Council (NEC) a few On the same day, the ministry of up-to-date data. not expecting the growth rate to recover The medium term budgetary frame- the SBP. days ago. finance also released its documents For example, he said, the Planning over the next two fiscal years from a work (MTBF) of the finance ministry also Based on the macroeconomic situation The NEC had approved a target of 4% including “Budget In Brief” that budgeted Commission would hardly know the 9-year low of 3.3% this year despite public projects FBR tax revenue at 12.6% of and future projections, the Ministry of GDP growth rate for fiscal year 2019-20 real GDP growth at 2.4% and inflation rate precise fiscal deficit, or what would be pronouncements by the Prime Minister’s GDP or about Rs5,544bn for next fiscal Finance articulates its budgetary policy in its meeting presided over by Prime at 11%-13%. the interest rates or the exchange rate Adviser on Finance and Revenue Dr year and total expenditure at 23.8% or priorities and prepares a medium- term Minister Imran Khan on May 29. The finance ministry reported that it movement. Hafeez Shaikh about economic diff icul- Rs10,472bn. fiscal framework that is then endorsed by The meeting had also set a target of had budgeted tax-to-GDP ratio at 16.3% “The projections of the SBP and the fi- ties subsiding in 6-8 months followed The total expenditure is projected to the federal cabinet for presentation to the 8.5% for inflation rate. for current fiscal year (2018-19) but it was nance ministry regarding inflation, growth by economic recovery and then growth slightly fall to 23.4% of GDP in 2020-21 parliament.

US-Pakistan trade hits all-time Pakistan govt adds $25.8bn high in 2018

Internews to public debt in 10 months Islamabad

Internews he Trump administra- Islamabad tion has informed Con- Tgress that trade between the United States and Pakistan he federal government of Pa- reached an all-time high in 2018, kistan has added Rs3.9tn as Washington endorsed Islama- T($25.92bn) to the public debt in bad’s budget re-emphasis on a just 10 months of the current fi scal year, relationship built on trade, not which is nearly half of the amount that aid. the Pakistan Peoples Party (PPP) gov- Alice G Wells, Senior State ernment added in its full fi ve-year term. Department offi cial for South The central government’s total debt and Central Asian Aff airs un- surged to Rs28tn with net addition of derlined this change in a written Rs3.9tn from July through April of the statement to the House Foreign current fi scal year, reported the State Aff airs Subcommittee for Asia, Bank of Pakistan (SBP). the Pacifi c and Nonproliferation. The central government’s debt in- Yesterday, the panel began creased at an alarming pace of 16% a hearing on the State Depart- in fi rst 10 months of this fi scal year, ment’s 2020 budget requests showed the SBP data. for the South and Central Asian The increase in public debt was near- regions. ly half of the debt that the PPP govern- Wells informed the lawmakers ment added in fi ve years. that in 2018, US-Pakistan bilat- During the PPP’s 2008-13 tenure, eral trade reached an all-time the public debt surged from Rs6tn to high, exceeding $6.6bn. Rs14tn. US exports to Pakistan rose In the next fi ve years of PML-N gov- 4% to $2.9bn, also an all-time ernment, it hit the Rs24.2tn mark with high, and the trade defi cit sunk an addition of Rs10tn. to 2%, or $782mn. Prime Minister Imran Khan has been very critical of the economic policies The top US export followed by the PPP and PML-N gov- categories in 2018 were ernments and has announced the con- miscellaneous grain, seeds, stitution of a commission to investi- fruits ($694mn), cotton gate the reasons behind the addition of ($615mn), iron and steel Rs18tn to the debt stock in 10 years. ($225mn), machinery However, at the current pace, it ($211mn), and optical and seems that the government of PM Imran medical instruments may add over Rs20tn to the public debt. ($117mn). US exports of The prime minister on Wednesday agricultural products to chaired a meeting to fi nalise terms of Pakistan totalled $1.5bn in reference of the commission, which will 2018, making the country investigate the Rs18tn addition to the A Pakistani currency exchange employee counts US dollar banknotes in Karachi. The federal government of Pakistan has added Rs3.9tn ($25.92bn) to the public debt in the 19th largest agricultural public debt. just 10 months of the current fiscal year, which is nearly half of the amount that the Pakistan Peoples Party government added in its full five-year term. export market But Adviser to Prime Minister on Fi- nance Dr Abdul Hafeez Shaikh did not country. The overall increase in the cen- Rs141.32 by the end of April 2019, ac- gling to enhance exports despite deval- Treasury Bills (MTBs) from commer- “Trade in agriculture was a attend the meeting at the PM Offi ce. tral government’s debt does not seem to cording to the central bank. uing the currency. cial banks massively decreased after it particularly bright spot,” she said. Shaikh was the fi nance minister from be in line with budget defi cit expecta- Since then, the rupee has further shed The most worrisome aspect was the shifted fi nancing to the central bank. US soybean exports went from $0 2010 to 2013 during the PPP tenure. tions due to the currency depreciation. its value and was traded at Rs152.90 in continued growth in short-term do- The government’s total borrowing in 2014 to $689mn in 2018. The accumulation of debt is the di- An increase in interest rate by the the inter-bank market on Friday. mestic debt, which exposed the govern- through MTBs decreased Rs1.6tn to She noted that Pakistan was rect result of the gap between expendi- State Bank of Pakistan (SBP) has also This shows that the central govern- ment to refi nancing and interest rate Rs3.7tn. a market of more than 200mn tures and revenues, which is widening added at least Rs500bn to the cost of ment’s debt will take another major hit risks. The MTBs issued to borrow from the people, including a growing due to the inelasticity of debt servic- debt servicing. in June due to currency depreciation. The share of short-term public debt central bank rose to Rs7tn, a net ad- middle class, and that’s why it ing and defence needs and the Federal The central bank raised the key inter- The Rs9.55tn external debt does not increased to 58% or Rs10.73tn by the dition of Rs3.4tn or 95.4% from July “provides ample opportunities Board of Revenue’s (FBR) failure to en- est rate by another 1.5% to 12.25% last include loans of $5.2bn obtained from end of April. through April. for US trade and investment to hance revenue collection. month despite a decline in core infl a- Saudi Arabia and the United Arab Emir- In June last year, the short-term do- However, the trend is going to shift grow further.” Steep currency devaluation also con- tion. ates. mestic debt stood at 54.1% or Rs8.9tn. from next fi scal year after the Interna- According to the US Trade tributed to the Rs3.9tn addition to the The external debt of the central gov- These loans are the responsibility of The short-term debt grew Rs1.84tn tional Monetary Fund has imposed a re- Representative’s offi ce in Wash- central government’s debt. ernment increased 22.5% to Rs9.55tn in the central bank. or 20.8% in 10 months. striction on borrowing from the central ington, Pakistan is currently In fi rst 10 months of the current fi s- fi rst 10 months of the current fi scal year. The ballooning public debt remains The federal government’s total do- bank. America’s 56th largest trading cal year, the FBR suff ered a shortfall of There was a net increase of Rs1.8tn a concern due to the previous govern- mestic debt increased to Rs18.52tn, an The long-term debt, which was ear- partner during 2018. Rs345bn in revenue collection. in the external debt, largely due to cur- ment’s inability to attract non-debt addition of Rs2.1tn or 13% in 10 months lier shrinking, also went up 3.6% to US exports totalled $2.9bn Next year, the federal government rency depreciation. creating infl ows and enhance tax rev- of the current fi scal year. Rs7.8tn. while imports from Pakistan will spend nearly 68% of the total budg- In June 2018, the value of a dollar enues. In Jul-Apr FY19, the federal govern- The debt obtained through prize totalled $3.7bn. The US goods et on debt servicing and defence of the was equal to Rs121.54, which reached The PTI government is also strug- ment’s debt acquired through Market bonds increased 12% to Rs952bn. trade defi cit with Pakistan was $783mn in 2018. The top US export categories in 2018 were: miscellaneous grain, seeds, fruits ($694mn), cotton ($615mn), iron and steel Japan’s May exports seen falling for 6th month ($225mn), machinery ($211mn), and optical and medical instru- ments ($117mn). Reuters after a revised 6.5% gain in April, resulting in US exports of agricultural Tokyo a trade deficit of ¥979.2bn ($9.04bn), the poll products to Pakistan totalled showed. The finance ministry will release trade $1.5bn in 2018, making the coun- data at 8:50am Japan time on June 19 (2350 GMT, try the 19th largest agricultural Japan’s exports likely fell at a faster pace in May, June 18). export market. down for the sixth straight month, as the US-China The BoJ is seen keeping its short-term interest Leading domestic export trade war takes a toll on the economy, a Reuters rate target at minus 0.1% and its pledge to guide categories include: soybeans poll showed yesterday. 10-year government bond yields around 0% at its ($689mn), cotton ($615mn), tree The Bank of Japan is expected to keep its targets June 19-20 meeting. nuts ($49mn), dairy products for short-term interest rates and its long-term Group of 20 finance leaders over the weekend ($38mn), and planting seeds government bond yield unchanged next week, said that trade and geopolitical tensions have ($37mn). Pakistan was America’s according to the poll. “intensified”, raising risks to improving global 58th largest supplier of goods im- Consumer prices, another key gauge for market growth, but they stopped short of calling for a ports in 2018. US total imports of watchers on policy, likely edged down in May, resolution of a deepening US-China trade conflict. agricultural products from Paki- putting pressure on the BoJ as it remains far from The BoJ is among major central banks that could stan totalled $126mn in 2018. achieving its elusive 2% inflation target. come under pressure to ramp up its already Leading categories include: “Exports likely dropped as factories halted massive stimulus programme, as the trade dispute rice ($31mn), sugars, sweeteners, during the 10-day national holidays and external raises concerns about a global recession. beverage bases ($30mn), spices demand is weakening,” said Koya Miyamae, senior The poll also projected Japan’s core consumer ($19mn), processed fruit and economist at SMBC Nikko Securities, referring to price index, which includes oil products but vegetables ($9mn), and snack the Golden Week holiday that was extended this excludes volatile fresh food costs, would rise 0.8% foods ($7mn). The top import year to mark the enthronement of a new emperor. in May from year earlier, down from a 0.9% gain categories in 2018 were: miscel- “We need to see how exports data for June fared to in April. laneous textile articles ($1.3bn), examine its trend but the intensified US-China trade “Prices of electricity and gas, which reflected falls knit apparel ($809mn), wo- war will have more of an eff ect on trade in June.” in oil prices, likely contributed to lower prices,” ven apparel ($586mn), leather Exports in May are forecast to have dropped 7.7% said Takumi Tsunoda, senior economist at Shinkin products ($121mn), and cot- from a year earlier, according to the poll of 16 Central Bank Research Institute. ton ($112mn). US foreign direct Trucks are seen transporting containers from a pier in Tokyo’s port. Japan’s exports likely fell at a economists, compared with a 2.4% contraction in The Internal Aff airs Ministry will publish data on investment (FDI) in Pakistan faster pace in May, down for the sixth straight month, as the US-China trade war takes a toll on the April and the biggest drop since January. consumer prices at 8:30am on June 21 (2330 GMT (stock) was $518mn in 2017, a economy, a Reuters poll showed yesterday. May imports are seen up 0.2% from a year earlier on June 20). 25.7% increase from 2016. Gulf Times Saturday, June 15, 2019 5 BUSINESS Spectre of toxic content stalks ad industry’s big annual party

Bloomberg campaigns, sign deals and talk to know what they’re doing about Inc unit Google and Twitter Inc — in “It’s moved from being a zealot’s “It hasn’t always been understood why London shop at lavish parties on the beach. their brands showing up alongside a nod to Read’s digital makeover of concern to absolutely mainstream,” bringing technology to Cannes is so Celebrities will add some glamour, fake news, a live-streamed shooting the ad network. Paris-based Publicis said Mark Lund, UK Group CEO of important,” said Wenda Harris Millard, from Grammy-award winner John massacre on Facebook, images of self- Groupe SA returns to Cannes after McCann Worldgroup, a creative agency vice chairman of MediaLink, which Facebook Inc and Google have come Legend and film director Alfonso harm on Instagram and paedophile skipping last year’s event to spend owned by the Interpublic Group of Cos. is organising the programme. “The to dominate the beach front at the Cuaron to Hollywood star Jeff commentary on YouTube. the money building a new artificial “Brands would be stupid if they didn’t tech guys are also understanding that advertising industry’s biggest annual Goldblum with his jazz band. “It goes far beyond the direct intelligence platform. have some view on what it meant for creativity only makes them better and gathering in Cannes on the French With the tech giants distracted by the implications for the brand. It’s actually, “We’ve had the year of slightly them and their role in ameliorating the more useful.” Riviera, a sign of their ever-growing problem of toxic content and concerns what are we funding? There’s much depressed navel-gazing and we’re problem.” Sorrell returns power in the world of marketing. This over data privacy, the traditional ad more of an appetite for these platforms going to move into the year of forward- Creativity and data year, they face their toughest scrutiny agency networks such as WPP Plc to be engaging,” said Stephan Loerke, looking, optimistic yet pragmatic After a contentious exit from WPP yet. and Omnicom Group Inc will be trying head of the World Federation of problem solving,” said Jim Prior, CEO of Cannes Lions started as a “festival in 2018, the company’s outspoken The tech giants have pulled billions of to reassert themselves and recoup Advertisers, which represents 90% of Superunion, a brand agency owned by of creativity” for people who make founder Martin Sorrell is busy ad dollars away from traditional media marketing work lost in recent years to the world’s marketing communication WPP. “It’s going to be sleeves rolled up, ads to share ideas and admire each expanding his new ad firm S4 Capital as consumers flocked to their platforms. digital rivals and global consultancies spend. looking forward, let’s get on with this.” other’s work. It’s morphed into a global Plc and will be back in the Cannes Now a proliferation of objectionable Accenture Plc and Deloitte LLP. Mad men fi ght back Climate change event attended by over 10,000 people spotlight. Sorrell retains his traditional content on their sites threatens to Here’s more of what to expect in involved in every aspect of marketing, Friday slot on the main stage, where taint the global brands that advertise Cannes: The global ad networks will try to How does an industry whose job is to from data-crunchers who analyse he’ll be in conversation with Marian there. So expect marketing managers Tech giants under scrutiny regain their swagger after budget propel global consumption respond consumer behaviour to media buyers Goodell, chief executive officer of the to put Silicon Valley executives on the cuts at big brands and incursions to panic over climate change and trading ad space. Burning Man cultural organisation. spot at Cannes Lions, a week of events, Facebook chief operating off icer by new rivals. London-based WPP, environmental destruction? The This year’s event seeks to bridge the He’ll also be chatting with Accenture meetings, speeches and parties by the Sheryl Sandberg, Google executive undergoing a reboot under new Chief question is now unavoidable in light creative and tech worlds to improve Interactive CEO Brian Whipple in Mediterranean. Matt Brittin and YouTube’s vice- Executive Officer Mark Read, will of the Extinction Rebellion movement, collaboration. It includes masterclasses an Irish pub. Sorrell is back on the The event starting on Monday is president for Europe, Middle East set up its first stand on the Cannes the international fame of Swedish from the likes of Amazon.com Inc, acquisition trail, hunting for a data the ad industry’s Oscars. Executives and Africa Cecile Frot-Coutaz are due beach — a spot typically occupied by activist Greta Thunberg and the Netflix Microsoft Corp and Adobe Inc on how company to add to his nascent vie for awards for the most creative to speak. Marketing managers want companies like Facebook, Alphabet documentary series “Our Planet.” to use their data tools. business.

Amazon and Morrisons Uber trying to steer its vision of extend same-day food fl ying cars through regulators delivery to more UK cities Bloomberg Washington Reuters London ber Technologies Inc is bringing its vision of a Jet- Usons-like future of battery- US online retailer Amazon and British powered flying vehicles for the supermarket group Morrisons are extend- masses to Washington, where it will ing their “Morrisons at Amazon” same-day have to convince regulators to ap- online grocery delivery service to more prove this new model for how avia- cities across Britain. tion works. The service, currently available to Ama- The company is betting that what zon’s Prime Now customers in Leeds, Man- the industry calls “urban air mobil- chester, Birmingham and parts of London, ity” will become a major part of its will be rolled out to Glasgow, Newcastle, transportation business in the fu- Liverpool, Sheff ield and Portsmouth this ture. year, the companies said yesterday. At a two-day Uber Elevate Sum- It allows Amazon Prime customers to mit 2019 that ended on Wednesday, order a full Morrisons shop online, which is Eric Allison, who heads the Uber El- then picked at a local store, and delivered evate division, said growing conges- by Amazon, with an option for delivery tion in cities is increasingly limiting within one hour of the order being placed the car-based trips the company in some locations. sells. “There’s an upper bound to what The service, currently available we can do on the ground,” Allison to Amazon’s Prime Now said. “We can move transporta- customers in Leeds, Manchester, tion off the grid and into the sky in a Birmingham and parts of meaningful way.” London, will be rolled out to The company showed videos of a Glasgow, Newcastle, Liverpool, future in which hundreds of vehi- Sheffi eld and Portsmouth this cles fl y off urban landing ports and year, the companies said attendees of the conference could view multiple types of futuristic ve- The service will be expanded to more Brit- hicles built by various companies, ish cities in future, the companies said. including some that are partners Morrisons, Britain’s fourth-biggest super- with Uber. market group behind Walmart’s Asda, Allison said the point of holding Sainsbury’s and market leader Tesco, the conference in Washington was to also provides food in a wholesale deal for focus on how government regulators Amazon’s “Fresh” and “Pantry” grocery will approve such designs. off ers. So far, the pathway to the multiple The US online giant has gradually extend- approvals needed to certify these new ed its food off er in Britain, but according vehicles and the airline-like compa- Barney Harford, chief operating off icer of Uber Technologies Inc (second from right), speaks to an attendee next to a scaled model of the company’s eCRM-003, to market researchers Kantar Worldpanel, nies that will operate them isn’t clear. an electric vertical take-off and landing jet, during the Uber Elevated Asia Pacific Expo event in Tokyo, Japan, on August 30, 2018. Uber is now betting that what its market share is still less than 1%. Shares While numerous companies have in the industry calls “urban air mobility” will become a major part of its transportation business in the future. in Morrisons were up 1.5%, outperforming recent years built prototypes capable a weak sector after a trading update from of carrying people, none have devel- tens of millions of dollars. For the policy and innovation division. tic that the system will adapt and ap- the jet age.” For the time being, Uber Tesco showed sales growth slowing. oped a version that they’ve submit- new class of vehicles envisioned by The FAA has made significant provals will happen quickly. is sticking with a more traditional ap- Tesco’s shares were down 2%, while Sains- ted to the Federal Aviation Adminis- Uber, which would fly robotically strides in becoming more flexible “We can do this and the time ho- proach to its aviation ambitions. Last bury’s was down 0.5%. Jeff eries analyst tration for approval. and rely on new materials and de- as a result of the rapidly growing rizon is closer than people think,” week, it announced it was starting a James Grzinic said that, given the urban Even for traditional helicopters signs, some standards for approval drone industry, but challenges re- said Pete Bunce, president of the service in New York City to fl y people skew of Prime Now customers, the tie-up and planes, the highly regulated don’t even exist yet. main for larger-scale vehicles that General Aviation Manufacturers to John F Kennedy International Air- would provide an opportunity for Mor- process of demonstrating an air- “Yeah, there are some questions aim to carry people, Romanowski Association, a guest speaker at the port that would use helicopters oper- risons to increase sales in parts of Britain craft is capable of safely carrying we have to resolve,” said Mike Ro- said. event. “This is the most exciting ated by an already-approved charter where it is under-represented. people for hire takes years and costs manowski, the FAA’s director of Some in attendance were optimis- time in aviation since the dawn of company.

Race for top ECB job is proxy battle between Merkel and Macron

Bloomberg selection of a candidate for any one of likely to get the job should Merkel push tions around the leadership of the Eu- noises in public, behind the scenes its Weidmann’s track record of opposing Frankfurt these jobs wouldn’t necessarily aff ect for a German, or even a non-German, ropean Council. diplomats are a lot less insistent. In ECB stimulus. decisions on the others, yet EU of- whom Berlin supports — to become Draghi took over the ECB in No- private meetings they’ve talked up Co- Smaller EU governments (that is, fi cials acknowledge that government head of the European Commission. vember 2011 at the height of the euro eure’s chances, which is either a double not Germany or France) have begun to ver since the European Central chiefs — the ultimate arbiters of who Unluckily for Weidmann, Manfred area’s debt crisis, when the very ex- bluff to confuse the French or a sign express frustration in Brussels at be- Bank was established in 1998, gets what — are discussing them as a Weber, a politician allied to Merkel’s istence of the currency bloc was un- that Merkel has other priorities. Those ing kept out of the picture, offi cials Ethe appointment of its president package. own Christian Democratic Union, is a der threat. He would do “whatever it same EU offi cials aren’t convinced Ma- say. The non-German, non-French has been dictated by politics. It’s a fi ght By law, the EU must divide its top favourite for the commission job. The takes” to keep the euro intact, he said cron wants the ECB job either, believing candidates that Berlin and Paris might that encompasses the historical rivalry jobs along geographical lines. At the focus for the ECB would then point in 2012, following up with the crea- instead that securing the top spot on be able to agree on are mainly Finns — between France and Germany, and it’s most basic level, this means giving as toward François Villeroy de Galhau, tion of a radical tool now heralded as the commission will put him in a better former Finnish central bank governor as much a struggle for infl uence and many jobs to the German-led group of Governor of the Banque de France, or having prevented the euro from im- position to start remaking EU policies, Erkki Liikanenand his successor, Olli power as it is about a vision for mon- (mainly) northern European countries French ECB Executive Board member ploding, and then expansionary mon- such as by persuading countries to pool Rehn, best known for being the EU’s etary policy. that promote fi scal responsibility as Benoit Coeure. etary policy to stave off deflation. resources and sovereignty more than economy commissioner at the height The 2019 version of the race is prov- to southern nations, arguably includ- But here things get even more tan- Some of the candidates to replace they do now. of the euro area crisis. There’s also one ing to be no diff erent. The new ECB ing France, who are more dovish. That gled: Weber is seen as something of a him think those measures need to Germany has always preferred to lead Dutchman in the mix: Klaas Knot, head chief won’t take offi ce until current means there’s a lot of horse-trading lightweight, and it became clear at a keep going for a bit longer, or even be from the shadows by placing its civil of his country’s central bank. For all President Mario Draghi steps down in going on. “The challenges that the eu- summit of EU leaders in May that he stepped up, while others say it’s time servants in infl uential positions rather Europe’s pledges of a push for gender October. But German Chancellor An- rozone is going to face over the next doesn’t have the overwhelming sup- to start putting away the crisis tools. than by having its people in the spot- equality, none of the likely candidates gela Merkel, who’s preparing to leave few years — the runup to the next port of many of them, offi cials say. Despite its status as the euro area’s light. That’s why Weidmann wouldn’t is a woman. offi ce and has an eye on her legacy after recession, possibly a crisis in Italy — His downfall could lead to a Macron- largest economy, Germany has never be too diffi cult for Merkel to sacrifi ce, Ultimately, the ECB decision will 14 years as the European Union’s most means that it really should be the best backed fi gure getting the commission had an ECB president. That counts in offi cials say, particularly if the alter- come down to which leader is prepared powerful fi gure, is already squaring off man or woman for the job,” says Chris- post instead — perhaps Michel Barnier, Weidmann’s favour. “If the Germans native is France driving a hard bargain to sacrifi ce his or her candidate. A sum- against French President Emmanuel tian Odendahl, chief economist of the the EU’s chief Brexit co-ordinator, who really want it, and they want to go all in other areas of EU policy, such as the mit of leaders is scheduled for June 20 Macron, who wants to reform the con- Centre for European Reform in Berlin. denies he wants it but is hawking his out to get it, then they probably will,” plan to give the euro area a centralised and 21, but EU offi cials warn that a so- tinent in his own image. And it gets “But the job is more political than ever, credentials around European capitals, says Tim Jones, an analyst at policy pot of money, which could be used to lution may be some way off . There’s one more complicated. For the fi rst time, so I’m not sure that person is in the or Denmark’s Margrethe Vestager, the consultants Medley Global Advisors fi ght future fi nancial crises, or rules wild card: What will Merkel do after she the ECB job is up for grabs at the same running.” bloc’s high-profi le antitrust czar who in London. “But the question is, do limiting national debt and defi cits. steps down as chancellor? Despite her time as the other top EU positions: the The bundling up of EU jobs means, belongs to Macron’s centrist European the Germans really want it?” Germany may even propose an ECB denials, she may make an 11th-hour bid president of the European Commis- for instance, that Jens Weidmann, the alliance. Giving it to either of these EU offi cials with knowledge of the candidate who isn’t Weidmann. One to become European Council president. sion, the EU’s executive arm, and the hawkish Bundesbank president who contenders would shift attention for discussions over the appointment say name mentioned is Klaus Regling, head If she does, Germany probably won’t president of the European Council, many EU offi cials say is one of the the ECB role back to Weidmann and they’re not convinced. Although the of the eurozone’s bailout fund, who has have an ECB chief. But it might be quite who chairs summits of leaders. The front-runners to replace Draghi, is un- create a whole new set of if then condi- German government makes the right European policy experience but lacks content. Gulf Times 6 Saturday, June 15, 2019 BUSINESS

DJIA WORLD INDICES Company Name Lt Price % Chg Volume Indices Lt Price Change Dow Jones Indus. Avg 26,052.63 -54.14 Apple Inc 192.21 -1.00 2,157,420 S&P 500 Index 2,885.16 -6.48 American Express Co 121.37 -0.40 106,911 Nasdaq Composite Index 7,789.06 -48.07 Boeing Co/The 347.30 -0.45 120,272 S&P/Tsx Composite Index 16,273.78 +34.52 Caterpillar Inc 126.69 -0.38 187,682 Mexico Bolsa Index 43,074.39 -408.81 Cisco Systems Inc 55.01 -2.07 2,133,557 Brazil Bovespa Stock Idx 98,567.77 -205.93 Chevron Corp 120.84 -0.06 228,166 Ftse 100 Index 7,345.78 -22.79 Walt Disney Co/The 141.93 0.13 949,581 Cac 40 Index 5,367.62 -8.01 Dowdupont Inc 0.00 0.00 - Dax Index 12,096.40 -72.65 Goldman Sachs Group Inc 190.36 -0.57 88,528 Ibex 35 Tr 9,194.20 -52.90 Home Depot Inc 204.53 1.08 274,310 Nikkei 225 Intl Business Machines Corp 134.65 -0.82 122,333 21,116.89 +84.89 Japan Topix Intel Corp 46.22 -1.03 1,696,244 1,546.71 +5.21 Hang Seng Index Johnson & Johnson 140.44 -0.19 311,993 27,118.35 -176.36 All Ordinaries Indx Jpmorgan Chase & Co 109.08 -0.42 694,769 6,633.64 +14.54 Nzx All Index Coca-Cola Co/The 51.30 0.33 580,481 1,740.02 +2.33 Bse Sensex 30 Index Mcdonald’s Corp 204.65 0.08 168,684 39,452.07 -289.29 Nse S&P Cnx Nifty Index 3M Co 166.77 -1.23 190,700 11,823.30 -90.75 Straits Times Index Merck & Co. Inc. 82.81 -0.11 546,502 3,222.63 +1.97 Karachi All Share Index Microsoft Corp 132.53 0.16 1,885,664 25,939.74 +103.58 Jakarta Composite Index Nike Inc -Cl B 83.34 -0.32 363,751 6,250.27 -22.82 Pfizer Inc 42.78 0.66 892,361 Procter & Gamble Co/The 111.47 0.50 618,115 Travelers Cos Inc/The 149.37 -0.03 90,116 TOKYO Unitedhealth Group Inc 245.11 0.06 176,565 United Technologies Corp 125.30 0.39 251,033 Company Name Lt Price % Chg Volume Visa Inc-Class A Shares 170.03 0.40 387,305 Nidec Corp 14,230.00 0.53 560,000 Verizon Communications Inc 57.96 0.59 584,128 Isuzu Motors Ltd 1,241.00 1.10 2,083,000 Walgreens Boots Alliance Inc 52.28 -1.15 432,746 Unicharm Corp 3,408.00 0.38 1,551,100 Walmart Inc 109.11 0.42 301,570 Nomura Holdings Inc 351.40 0.09 10,881,800 Exxon Mobil Corp 74.44 -0.32 754,662 Daiichi Sankyo Co Ltd 5,989.00 -0.65 1,554,000 Subaru Corp 2,562.50 0.12 2,049,500 Sumitomo Realty & Developmen 4,067.00 0.72 1,759,300 FTSE 100 Ntt Docomo Inc 2,490.00 0.32 3,529,900 Sumitomo Metal Mining Co Ltd 2,947.00 1.03 1,497,800 Company Name Lt Price % Chg Volume Orix Corp 1,559.50 -0.22 2,790,700 Asahi Group Holdings Ltd 4,927.00 -0.14 1,592,900 Anglo American Plc 2,110.50 -0.05 4,127,130 Keyence Corp 62,940.00 1.57 338,000 Associated British Foods Plc 2,463.00 -0.53 942,806 Mizuho Financial Group Inc 152.10 -0.13 68,699,100 Admiral Group Plc 2,078.00 -0.34 380,327 Sumitomo Mitsui Trust Holdin 3,949.00 -0.63 1,436,300 Ashtead Group Plc 1,949.00 -0.84 1,489,112 Japan Tobacco Inc 2,501.00 -0.10 4,874,600 Antofagasta Plc 859.00 -0.58 1,510,776 Sumitomo Electric Industries 1,359.50 -0.18 2,133,600 Auto Trader Group Plc 561.40 -3.24 7,025,070 Daiwa Securities Group Inc 471.60 0.58 3,852,900 Aviva Plc 408.60 -1.02 6,100,469 Softbank Group Corp 10,005.00 0.20 4,393,700 Astrazeneca Plc 6,215.00 0.34 1,581,686 Panasonic Corp 855.60 0.06 7,061,300 Bae Systems Plc 484.70 0.46 5,024,523 Fujitsu Ltd 7,563.00 0.65 837,900 Barclays Plc 149.00 -0.35 23,753,641 Central Japan Railway Co 22,800.00 1.00 360,400 British American Tobacco Plc 2,885.50 -1.10 3,362,073 Nitori Holdings Co Ltd 13,180.00 -0.08 293,400 Barratt Developments Plc 561.60 -1.20 2,810,602 Ajinomoto Co Inc 1,902.00 -0.68 1,688,400 Bhp Group Plc 1,910.00 -0.98 4,332,926 Daikin Industries Ltd 13,815.00 1.43 980,900 Berkeley Group Holdings/The 3,530.00 -2.08 550,939 Mitsui Fudosan Co Ltd 2,653.50 0.36 3,946,800 British Land Co Plc 539.20 -1.17 2,777,002 Ono Pharmaceutical Co Ltd 1,980.00 1.30 1,716,100 Bunzl Plc 2,165.00 0.28 740,846 Toray Industries Inc 806.80 -0.74 6,344,400 Bp Plc 538.90 -0.02 25,334,091 Bridgestone Corp 4,232.00 -0.14 2,034,200 Burberry Group Plc 1,741.50 -0.06 1,491,700 Sony Corp 5,498.00 3.07 10,392,800 Bt Group Plc 206.30 -1.53 21,611,051 Astellas Pharma Inc 1,478.50 0.31 6,471,500 Coca-Cola Hbc Ag-Di 2,906.00 -0.31 514,016 Hoya Corp 8,043.00 -0.52 1,627,800 Carnival Plc 4,033.00 0.75 345,369 Nippon Steel Corp 1,840.00 0.08 1,907,200 Centrica Plc 91.52 0.42 13,066,697 Suzuki Motor Corp 5,199.00 0.33 1,746,500 A pump jack operates in an oil field near Corpus Christi, Texas, US. Oil prices jumped by more than 4% at one stage on Compass Group Plc 1,911.50 1.51 3,295,989 Nippon Telegraph & Telephone 5,040.00 0.82 3,431,600 Thursday as reports of the attacks in the Gulf of Oman flashed onto traders’ screens, and added around 1% yesterday. Croda International Plc 5,240.00 -0.10 278,711 Jxtg Holdings Inc 507.70 0.30 17,717,100 Crh Plc 2,524.00 -0.63 1,034,919 Murata Manufacturing Co Ltd 4,624.00 0.63 3,895,300 Dcc Plc 6,944.00 -0.71 152,189 Kansai Electric Power Co Inc 1,269.00 -0.55 1,734,000 Diageo Plc 3,418.50 -0.18 2,661,785 Denso Corp 4,475.00 0.38 1,457,800 Direct Line Insurance Group 323.30 -0.19 2,322,662 Sompo Holdings Inc 4,251.00 0.00 1,100,300 Evraz Plc 696.00 1.02 3,326,280 Daiwa House Industry Co Ltd 3,328.00 0.48 1,488,000 Experian Plc 2,408.00 1.01 1,681,427 Dai-Ichi Life Holdings Inc 1,625.00 0.46 4,468,700 Easyjet Plc 929.00 0.43 1,682,629 Most stock markets fall as Mazda Motor Corp 1,105.00 0.09 3,028,000 Ferguson Plc 5,566.00 -1.00 503,576 Komatsu Ltd 2,464.00 0.76 2,864,600 Fresnillo Plc 839.80 3.37 1,366,592 West Japan Railway Co 8,837.00 0.52 434,500 Glencore Plc 272.05 -0.35 29,425,615 Kao Corp 8,403.00 -0.53 2,151,700 Glaxosmithkline Plc 1,584.40 0.11 5,843,672 Mitsui & Co Ltd 1,750.00 0.52 4,647,900 Gvc Holdings Plc 624.40 0.74 1,001,615 Daito Trust Construct Co Ltd 13,915.00 -0.18 364,800 Hikma Pharmaceuticals Plc 1,645.50 0.52 286,258 oil rises again on tension Otsuka Holdings Co Ltd 3,647.00 -0.63 1,278,700 Hargreaves Lansdown Plc 1,870.00 -0.21 990,638 Oriental Land Co Ltd 13,480.00 0.11 384,400 Halma Plc 1,989.50 -0.35 1,225,189 Sekisui House Ltd 1,800.50 0.67 2,630,500 Hsbc Holdings Plc 645.60 -0.35 19,712,593 Secom Co Ltd 9,338.00 0.68 858,600 Hiscox Ltd 1,688.00 0.06 348,759 Tokio Marine Holdings Inc 5,529.00 0.16 1,729,000 Intl Consolidated Airline-Di 460.70 -1.33 4,395,580 Aeon Co Ltd 1,854.50 1.20 2,811,200 fuelled by tanker blasts Intercontinental Hotels Grou 5,229.00 0.25 239,560 Asahi Kasei Corp 1,144.50 -1.21 3,940,100 3I Group Plc 1,025.00 -0.19 1,234,198 Kirin Holdings Co Ltd 2,318.50 0.37 2,309,300 Imperial Brands Plc 1,976.60 -1.76 2,268,342 Marubeni Corp 715.20 0.10 4,671,800 supplies from non-Opec countries will down at 7,345.78 points, Frank- Informa Plc 800.00 -0.42 1,211,009 AFP Mitsubishi Ufj Financial Gro 505.40 -0.18 42,981,800 complicate eff orts by the group and its furt’s DAX 30 ended 0.6% down at Intertek Group Plc 5,534.00 0.47 210,250 London Mitsubishi Chemical Holdings 739.10 0.04 3,968,100 allies to boost prices. 12,096.40 points and Paris’ CAC 40 Itv Plc 105.25 -4.32 15,783,100 Fanuc Corp 19,325.00 0.10 885,000 Johnson Matthey Plc 3,093.00 -1.43 601,186 In its monthly report, the agency fi nished 0.2% down at 5,367.62 points, Fast Retailing Co Ltd 66,060.00 1.79 939,700 Kingfisher Plc 207.60 -1.47 5,831,645 il prices rose again yesterday cut its forecast for demand growth this while the EURO STOXX 50 lost 0.3% at Ms&Ad Insurance Group Holdin 3,486.00 -0.40 1,244,400 Land Securities Group Plc 841.60 -1.43 1,961,694 in reaction to geopolitical ten- year for the second month straight — 3,379.19 points. Kubota Corp 1,735.00 0.29 2,494,900 Legal & General Group Plc 266.70 -1.48 11,074,483 sion, building on the previous and trimmed its second quarter fore- Trading fl oors have been the scene Seven & I Holdings Co Ltd 3,710.00 -0.40 2,379,100 O Lloyds Banking Group Plc 57.70 -0.60 118,684,218 Inpex Corp 913.80 1.32 6,548,000 day’s surge sparked by blasts on two cast as well. of unease for weeks since US President London Stock Exchange Group 5,446.00 0.67 431,508 Resona Holdings Inc 443.40 0.29 9,993,400 tankers in the Gulf of Oman. “Global slowdown fears and trade Donald Trump’s shock decision to hit Micro Focus International 1,974.40 -0.95 565,462 Fujifilm Holdings Corp 5,382.00 0.06 1,225,600 Marks & Spencer Group Plc 216.00 0.00 14,323,741 Despite a standoff between Iran and war risks have intensifi ed which has China with higher tariff s despite expec- Yamato Holdings Co Ltd 2,244.00 0.45 1,031,600 Mondi Plc 1,726.50 -0.66 1,543,118 the US, oil traders were “not getting led to the latest downward revision tations the two sides were close to a deal Chubu Electric Power Co Inc 1,550.00 -0.96 1,281,200 Melrose Industries Plc 169.55 -2.78 7,896,606 carried away”, said Craig Erlam, senior from IEA,” Erlam told AFP. to end their long-running stand-off . Mitsubishi Estate Co Ltd 2,052.00 0.02 3,886,600 Wm Morrison Supermarkets 197.80 -0.83 5,537,201 market analyst at OANDA. Global stock markets, meanwhile, The uneasiness over the past Mitsubishi Heavy Industries 4,718.00 0.79 1,263,200 National Grid Plc 833.40 1.82 8,437,846 Sysmex Corp 7,771.00 -0.10 502,100 Prices jumped by more than 4% at fell on geopolitical fears, uncertainty week has seen the price of gold hit a Nmc Health Plc 2,299.00 -2.50 465,707 Shiseido Co Ltd 8,520.00 0.97 2,059,500 one stage on Thursday as reports of over the China-US trade row and the 15-month high of around $1,360 per Next Plc 5,514.00 -0.22 413,454 Shionogi & Co Ltd 6,198.00 0.85 1,476,000 the attacks in the Gulf of Oman fl ashed gloomy outlook for the global econo- ounce as traders look for safer assets to Ocado Group Plc 1,159.50 -0.98 1,137,331 Terumo Corp 3,196.00 0.35 3,084,100 Paddy Power Betfair Plc 0.00 0.00 - onto traders’ screens, and added my, traders said. shelter from the uncertainty on world Tokyo Gas Co Ltd 2,677.50 -1.09 1,345,100 Prudential Plc 1,601.50 -1.42 3,315,689 around 1% yesterday. In Asia, the Hong Kong stock mar- markets. Tokyo Electron Ltd 14,630.00 -1.88 2,471,000 Persimmon Plc 1,945.50 -0.49 789,220 “Oil prices may have spiked follow- ket was again on the back foot, losing Eyes are now on the G20 summit in East Japan Railway Co 10,375.00 0.19 713,100 Pearson Plc 798.60 -1.38 2,528,229 ing the attacks but they have not risen 0.7%, after the city was rocked this Japan later this month where Trump Itochu Corp 2,000.50 0.30 5,547,300 Reckitt Benckiser Group Plc 6,526.00 -1.26 1,645,921 Ana Holdings Inc 3,643.00 -0.30 941,100 too much considering the risk that an week by violent protests against gov- and his Chinese counterpart are ex- Royal Bank Of Scotland Group 212.40 -1.07 9,025,784 Mitsubishi Electric Corp 1,383.00 -0.40 3,666,600 escalation poses,” said Erlam. ernment plans for a law that would pected to meet to discuss the issue, Royal Dutch Shell Plc-A Shs 2,515.00 0.20 5,547,611 Sumitomo Mitsui Financial Gr 3,776.00 0.13 5,169,400 “Perhaps this is a sign of how pres- allow extraditions to China and which though Washington has been play- Royal Dutch Shell Plc-B Shs 2,516.50 -0.08 4,132,252 Relx Plc 1,908.50 1.49 2,810,770 sured oil prices are to the downside at observers warn could erode its attrac- ing down the chances of a deal being Rio Tinto Plc 4,770.00 -0.75 2,573,351 the moment, with the US pumping at tion for businesses. struck. Rightmove Plc 573.10 -2.05 1,660,449 SENSEX record levels and the global economy European stocks were lower at However, support has come from Rolls-Royce Holdings Plc 891.80 -0.58 3,376,933 slowing.” the close, while US stocks slipped bets that the Federal Reserve will cut Rsa Insurance Group Plc 569.00 -0.42 1,626,615 Company Name Lt Price % Chg Volume The International Energy Agency throughout the New York morning af- interest rates soon as the economy Rentokil Initial Plc 389.80 1.38 5,564,999 Adani Ports And Special Econ 426.40 0.34 2,745,328 said earlier yesterday that tepid growth ter a slightly weaker start. stutters and the trade war rumbles Sainsbury (J) Plc 193.90 -1.02 9,890,398 Asian Paints Ltd 1,412.75 -1.17 546,091 along. Schroders Plc 2,929.00 -0.81 174,331 in demand for oil along with ample London’s FTSE 100 closed 0.3% Axis Bank Ltd 801.20 -2.31 8,919,370 Sage Group Plc/The 760.40 -1.22 1,466,880 Bajaj Finance Ltd 3,518.40 -0.74 864,641 Segro Plc 719.00 -0.64 2,199,456 Bharti Airtel Ltd 353.30 -2.87 5,075,586 Smurfit Kappa Group Plc 2,374.00 -0.59 275,081 Bharti Infratel Ltd 275.05 1.36 1,801,435 HONG KONG HONG KONG Standard Life Aberdeen Plc 271.90 -0.55 4,972,457 Bajaj Auto Ltd 2,872.55 -1.71 353,978 Ds Smith Plc 350.10 -2.97 8,596,366 Bajaj Finserv Ltd 8,235.15 -0.69 101,331 Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume Smiths Group Plc 1,483.50 -1.46 888,391 Bharat Petroleum Corp Ltd 386.50 -0.59 3,037,793 Scottish Mortgage Inv Tr Plc 513.50 -0.87 2,662,877 Ck Hutchison Holdings Ltd -0.53 Cipla Ltd 555.60 -1.59 1,808,363 75.10 4,738,181 Hong Kong & China Gas 17.18 -0.12 17,946,398 Smith & Nephew Plc 1,703.50 0.65 1,685,581 Hang Lung Properties Ltd 0.94 Coal India Ltd 255.15 -0.18 2,805,760 17.22 4,307,799 Bank Of Communications Co-H 6.26 -0.63 22,863,263 Spirax-Sarco Engineering Plc 8,700.00 -0.85 153,366 Ck Infrastructure Holdings L -1.49 Dr. Reddy’s Laboratories 2,565.15 -0.89 689,207 63.00 4,525,429 China Petroleum & Chemical-H 5.09 0.59 99,740,633 Sse Plc 1,122.00 -0.36 2,932,464 Hengan Intl Group Co Ltd -2.64 Eicher Motors Ltd 19,767.05 -1.96 48,061 57.25 3,257,085 Hong Kong Exchanges & Clear 260.40 -0.76 3,299,767 Standard Chartered Plc 676.40 -1.05 7,697,436 China Shenhua Energy Co-H 0.00 Gail India Ltd 308.50 0.13 3,964,245 16.20 25,024,021 Bank Of China Ltd-H 3.20 -0.62 291,164,634 St James’s Place Plc 1,042.50 -1.14 1,512,178 Cspc Pharmaceutical Group Lt -1.04 Grasim Industries Ltd 899.00 -0.62 1,850,574 11.44 22,799,050 Hsbc Holdings Plc 63.80 -0.78 25,046,301 Severn Trent Plc 2,040.00 0.29 697,385 Hang Seng Bank Ltd -0.92 Hcl Technologies Ltd 1,087.00 -1.26 1,733,936 194.20 2,228,112 Power Assets Holdings Ltd 56.20 0.18 4,937,880 Tesco Plc 224.40 -2.22 19,985,526 China Resources Land Ltd -0.90 Housing Development Finance 2,185.85 -0.53 2,162,503 33.10 11,457,415 Mtr Corp 49.35 1.13 10,643,297 Tui Ag-Di 750.20 -1.21 1,117,014 Ck Asset Holdings Ltd 0.68 Hdfc Bank Limited 2,435.10 -0.39 2,989,230 58.90 6,475,618 China Overseas Land & Invest 27.75 -0.89 9,635,820 Taylor Wimpey Plc 155.60 -1.64 8,939,987 Sino Biopharmaceutical 0.71 Hero Motocorp Ltd 2,670.30 -1.29 320,455 7.10 75,133,269 Tencent Holdings Ltd 330.00 -1.26 14,066,039 Unilever Plc 4,973.50 0.54 1,400,498 Henderson Land Development -1.95 Hindalco Industries Ltd 198.25 -0.70 3,624,064 40.30 6,455,983 China Unicom Hong Kong Ltd 8.45 -1.29 21,667,236 United Utilities Group Plc 824.20 0.05 1,874,026 Aia Group Ltd -1.67 Hindustan Petroleum Corp 306.45 -1.03 3,238,079 73.80 22,604,582 Link Reit 95.85 -0.05 3,772,639 Vodafone Group Plc 128.02 -0.79 40,269,090 Ind & Comm Bk Of China-H 0.00 Hindustan Unilever Ltd 1,822.95 -1.22 632,971 5.74 298,442,233 Sino Land Co 12.50 -1.73 7,009,930 John Wood Group Plc 397.80 -0.70 2,192,188 Want Want China Holdings Ltd -0.86 Icici Bank Ltd 417.75 -0.44 8,601,256 5.75 8,195,907 China Resources Power Holdin 11.40 0.35 3,195,260 Wpp Plc 960.40 0.29 2,707,270 Sun Hung Kai Properties 0.48 Indiabulls Housing Finance L 672.25 -3.18 29,969,483 125.90 4,965,170 Petrochina Co Ltd-H 4.27 0.95 106,585,743 Whitbread Plc 4,715.00 0.15 332,591 New World Development -0.86 Indusind Bank Ltd 1,426.80 -4.17 10,500,760 11.50 17,045,850 Cnooc Ltd 12.34 0.16 54,345,410 Geely Automobile Holdings Lt -3.34 Infosys Ltd 740.45 -0.30 5,556,353 12.16 45,255,700 China Construction Bank-H 6.33 0.16 476,985,803 Swire Pacific Ltd - Cl A -1.88 Indian Oil Corp Ltd 159.80 -0.56 4,456,656 93.80 1,819,754 China Mobile Ltd 68.30 -0.94 24,323,731 Sands China Ltd -0.96 Itc Ltd 278.05 -0.91 7,908,039 36.00 8,982,907 TOKYO Wharf Real Estate Investment -1.52 Jsw Steel Ltd 271.25 -1.13 4,349,503 51.90 3,360,192 Clp Holdings Ltd -0.11 Kotak Mahindra Bank Ltd 1,473.85 -2.00 1,953,510 89.05 2,956,689 Country Garden Holdings Co 0.00 Company Name Lt Price % Chg Volume Larsen & Toubro Ltd 1,526.30 0.58 1,854,211 11.46 191,216,700 Aac Technologies Holdings In -1.52 Mahindra & Mahindra Ltd 637.25 -0.59 1,338,649 42.05 4,037,515 GCC INDICES Japan Airlines Co Ltd 3,536.00 0.68 1,362,600 Shenzhou International Group -0.26 Maruti Suzuki India Ltd 6,747.40 -0.55 449,930 97.25 2,725,367 Indices Lt Price Change Recruit Holdings Co Ltd 3,511.00 0.95 4,221,100 Ping An Insurance Group Co-H -0.68 Ntpc Ltd 132.75 -1.59 4,761,596 87.20 22,019,573 Softbank Corp 1,412.50 0.82 7,010,200 China Mengniu Dairy Co 30.25 0.50 5,993,922 Oil & Natural Gas Corp Ltd 169.30 0.21 7,153,585 Doha Securities Market 10,515.88 -105.88 Kyocera Corp 6,949.00 0.58 1,727,300 Sunny Optical Tech -2.21 Power Grid Corp Of India Ltd 194.60 0.39 19,675,955 68.60 4,496,967 Nissan Motor Co Ltd 755.50 -0.17 10,420,900 Boc Hong Kong Holdings Ltd 30.20 -0.98 15,269,829 Reliance Industries Ltd 1,317.55 -0.73 6,831,331 Kuwait Stocks Exchange 4,803.10 +15.04 T&D Holdings Inc 1,130.00 0.53 2,094,000 China Life Insurance Co-H -0.66 State Bank Of India 343.80 -0.78 10,347,594 18.00 22,602,808 Toyota Motor Corp 6,743.00 0.25 5,029,900 Citic Ltd 10.66 -0.19 17,130,093 Sun Pharmaceutical Indus 392.55 0.72 9,786,375 Oman Stock Market 3,918.49 -43.71 Kddi Corp 2,736.00 0.07 7,000,100 Galaxy Entertainment Group L -0.31 Tata Steel Ltd 501.80 -0.15 6,605,896 48.50 6,757,019 Nitto Denko Corp 5,063.00 -0.82 1,090,100 Wh Group Ltd 7.35 -2.00 23,478,138 Hitachi Ltd 4,005.00 1.01 3,473,900 Tata Consultancy Svcs Ltd 2,254.50 0.02 2,131,408 Takeda Pharmaceutical Co Ltd 3,750.00 -0.27 3,888,700 Tech Mahindra Ltd 740.25 -0.52 1,348,083 Jfe Holdings Inc 1,528.00 0.03 1,880,800 Titan Co Ltd 1,281.90 -1.05 874,483 Sumitomo Corp 1,606.00 0.09 3,472,600 Tata Motors Ltd 164.20 -1.91 10,920,508 Canon Inc 3,147.00 0.51 2,607,400 Upl Ltd 1,006.00 0.10 1,044,308 “Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The Eisai Co Ltd 6,271.00 0.48 1,048,200 Ultratech Cement Ltd 4,501.75 -1.50 296,894 accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended Nintendo Co Ltd 37,570.00 0.48 1,126,900 Vedanta Ltd 169.55 0.65 6,333,115 as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank Shin-Etsu Chemical Co Ltd 9,334.00 0.25 1,077,300 Wipro Ltd 298.80 0.13 7,965,803 or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on Mitsubishi Corp 2,879.00 0.45 4,132,300 Yes Bank Ltd 115.05 -1.75 155,169,990 this data.” Smc Corp 37,870.00 0.21 166,700 Zee Entertainment Enterprise 336.50 -4.57 15,916,909

Gulf Times 8 Saturday, June 15, 2019 BUSINESS Broadcom’s $2bn warning shocks global chip sector

Reuters duction as the supply chain out London there constricts — compress, so to speak,” Tan added. The semiconductor industry roadcom Inc sent a has been grappling with slow- shockwave through the ing demand since the second Bglobal chipmaking in- half of 2018 with bellwether dustry yesterday with its fore- Texas Instruments warning cast that US-China trade ten- in April that a cyclical down- sions and the ban on doing turn could last for another two business with Huawei Tech- years. nologies would knock $2bn off That has related chiefl y to the company’s sales this year. signs that mobile phone mar- The forecast, included in kets in some major economies the company’s second quarter are increasingly saturated while results late on Thursday, was mass demand in new areas like the hardest evidence yet of self-driving cars and Internet the damage President Donald of Things devices for homes Trump’s trade war with Beijing and offi ces is still developing. may do to the global industry. The geopolitical risks from Shares in Broadcom fell 10% the trade confl ict and Huawei in early trading in New York, ban are an additional shock. wiping more than $11bn off “It’s not just Huawei, it’s the market value of the com- deeper than that. pany, previously based in Asia Visibility is shot. but now with its headquarters OEMs aren’t ordering. and main listing in the United Inventory concerns, which States. were supposed to ease, have not US chipmakers Qualcomm, gone away,” said one European A plant belonging to Bayer is seen in Leverkusen (file). As well as saying it would invest €5bn in research over the next ten years, Bayer has promised to reduce its environmental Applied Materials Inc, Intel trader. “Goodbye H2 recovery impact by 30% through 2030 via measures such as more precise and more sparing application of crop chemicals. Corp, Advanced Micro De- hopes!” vices Inc and Xilinx Inc were Broadcom, known for com- all down between 2.5% and munications chips that power 4%. That followed similar falls Wi-Fi, Bluetooth and GPS con- for European peers including nectivity in smartphones, is ASML, STMicroelectronics, also a major supplier to Apple Infi neon, and AMS. Inc and shares of the iPhone “We’ll see a very sharp im- maker were down nearly 1% pact simply because (there premarket. Bayer to invest $5.6bn are) no purchases allowed and The CEO of chipmaker Mi- there’s no obvious substitution cron Technology also said the in place,” chief executive offi cer ban on Huawei brings uncer- Hock Tan told a conference call tainty and disturbance to the with analysts in relation to the semiconductor industry. Huawei ban. “It’s a broad-based decline Broadcom, which got they are now predicting,” said $900mn in revenue from Hua- Neil Campling, tech analyst at in weedkiller research wei last year, also said, how- London-based asset manager ever, that the forecast cut “ex- Mirabaud. €5bn earmarked for new award over claims that glypho- Werner Baumann who champi- in an attempt to repair its im- “This will help to restore and tends beyond one particular “This is unlikely to be Broad- ways of weed control over 10 sate-based weedkiller Roundup, oned the takeover and who has age, which also faces a backlash retain biodiversity, combat cli- customer.” com specifi c but a trend to ex- years; says glyphosate will which the German life sciences faced a backlash from share- in Germany over a collapse in mate change, and make the most “We’re talking about uncer- pect in H2 this year. continue to play important group acquired when it took over holders. insect populations, which en- effi cient use of natural resourc- tainty in our marketplace, un- A rebound for the chip sec- role; CEO seeks to improve Monsanto, causes cancer. “While glyphosate will con- vironmentalists blame on pesti- es,” it said. certainty because of the — of tor, which many hope for, is image amid US As well as saying it would in- tinue to play an important role cides used in farming. Bayer added it will only sell demand in the form of order re- highly unlikely.” vest €5bn in research over the in agriculture and in Bayer’s Matthias Berninger, a former crop protection products in de- Reuters next ten years, Bayer promised to portfolio, the company is com- German deputy agriculture min- veloping countries if they also Frankfurt reduce its environmental impact mitted to off ering more choices ister and green-party politician, meet the safety standards of a by 30% through 2030 via meas- for growers,” said Bayer, which was hired as chief lobbyist ear- majority of eight leading global ures such as more precise and maintains that glyphosate is lier this year and is due to unveil regulators in jurisdictions such ermany’s Bayer sought more sparing application of crop safe. a new sustainability strategy for as the EU, the United States or to repair its reputation chemicals. Its move follows a third con- Bayer in the second half. Brazil. Gyesterday after dam- “We listened. We learned,” secutive US jury verdict against Bayer said it would seek to re- Western crop chemicals com- age caused by US litigation over Bayer said on its website, adding Roundup, which Bayer acquired duce its environmental footprint panies have faced criticism from claims its glyphosate pesticide that it had “heightened respon- as part of its $63bn purchase of by scaling down crop protection environmentalists for selling causes cancer, saying it would sibility and... unique potential to Monsanto last year. volumes and enabling more pre- products in developing countries invest €5bn ($5.6bn) in weed- advance farming for the benefi t Bayer says glyphosate is safe. cise application. with local approval, even though killer research. of society and the planet.” A spokesman said the invest- It would increase transpar- clearance at home had ended. A signage is displayed outside of Broadcom headquarters in Bayer’s shares hit seven-year The share price slide has left ments in weed control were part ency around research eff orts A spokesman said no prod- Irvine, California. Yesterday’s forecast, included in Broadcom’s lows after a California couple was Bayer with a market valuation of of a previously approved budget. and the forthcoming process of ucts had been withdrawn yet and second quarter results released late on Thursday, was the hardest last month awarded more than $56bn, less than it paid for Mon- Baumann has beefed up Bay- re-registering glyphosate in the Bayer would now look into its evidence yet of the damage President Donald Trump’s trade war $2bn in the largest-ever US jury santo, piling pressure on CEO er’s public relations machine European Union. product portfolio. with Beijing may do to the global industry. Gulf Times Saturday, June 15, 2019 9 BUSINESS

Sensex retreats; rupee ends at two-week low

Bloomberg Gruh Finance Ltd slid 5% after Mumbai parent Housing Development Finance Corp sold 4.2% of its stake in the company. Indian equities dropped, Meanwhile the rupee yesterday dragging local indexes to a weakened for second sessions second week of losses, as to hit two week low against investors wait to see any the US dollar tracking losses government plans to bolster a in Asian currencies market slowing economy and arrest a on weak China data as risk liquidity crunch. sentiment remained fragile on The benchmark S&P BSE Sensex trade and geopolitical concerns. retreated 0.7% to 39,452.07 Traders were also cautious after points at the close in Mumbai, India decided to impose tariff s capping a second straight week on 29 US products that may of declines. The NSE Nifty 50 increase trade tensions between Index fell 0.8% to 11,823.30. the two countries. A rally of nearly 9% in India’s The rupee ended at 69.80 key equity indexes this year a dollar, a level last seen on has prompted some investors May 30, down 0.41% from its to ponder whether the gains previous close of 69.51. The are too steep, too soon. India’s Indian currency had opened at economy is slowing, while a 69.58 a dollar. cash shortage has triggered Traders were worried due debt repayment defaults or to attacks on tankers in gulf delays among some local of Oman escalated US-Iran companies. tensions and raised concerns Investors look at computer screens showing stock information at a brokerage house in Shanghai. The Composite index closed down 1.0% to 2,881.12 points yesterday. With a parliamentary session over supply flows. due to begin next week, Earlier, China’s industrial output investors are waiting for policies growth slowed to the weakest from Prime Minister Narendra pace since 2002, highlighting Modi’s second-term to spur the headwinds that the growth and increase liquidity. economy is facing as it grapples “Key challenges for the with the tariff war with the US. markets would be news flow President Donald Trump is still on oil, US plan on tariff s and waiting for a response from Asia markets struggle India’s budget plans on how to Chinese President Xi Jinping stimulate investments ahead,” about meeting to restart trade said Avinash Gorakshakar, head talks. of research at Mumbai-based So far this year, the rupee Joindre Capital Services. has fallen 0.04% against the “Valuations look expensive, greenback. During the period, but any correction and stock- foreign investors bought on uncertainty over specific approach should help $11.26bn in Indian equities and investors in making some buy $1.35bn in the debt market. calls,” he said. Asian currencies were trading Eighteen of the 19 sector lower. Indonesian rupiah was indexes compiled by the BSE down 0.31%, Philippines peso fell, led by a gauge of property 0.26%, South Korean won stocks. Seven of these measures 0.18%, Taiwan dollar 0.11%, China-US trade row dropped at least 1%. China Off shore 0.05%. However, Twenty-six of the 31 Sensex Japanese yen was up 0.14% and AFP 0.5%. The uneasiness over the past week important crude shipping lane as “suspi- limited, hit by caution after this week’s members and 39 of the 50 Nifty Thai baht 0.09%. Hong Kong has seen the price of gold hit a 15-month cious”. The news sent the price of crude demonstrations in Hong Kong. stocks declined. The dollar index, which high of around $1,360 per ounce as trad- surging more than 4% at one point on The Hang Seng Index posted a third IndusInd Bank Ltd’s 4.2% drop measures the US currency’s ers look for safer assets to shelter from Thursday, having been deep in the red straight loss with analysts pointing to was the steepest among Sensex strength against a basket of ost Asian markets fell yester- the uncertainty on world markets. owing to supply and demand worries. a tightening of liquidity in the city’s fi - members, extending Thursday’s major currencies, was at 97.152, day on geopolitical concerns, Eyes are now on the G20 summit in Analysts said that while the issue was nancial system that has seen the amount loss after UBS AG cut its rating down 0.14% from its previous Muncertainty over the China-US Japan later this month where Trump and a cause for concern, crude would remain banks charge each other for borrowing on the shares to sell. close of 97.01. trade row and the outlook for the global his Chinese counterpart are expected to under pressure owing to the trade war, cash hit a more than 10-year high. economy, while oil prices were mixed meet to discuss the issue, though Wash- elevated US production and stockpiles This has pushed the local dollar to after the previous day’s surge fuelled by ington has been playing down the chanc- and questions over Russia’s commitment highs not seen since the end of last year. attacks on two tankers in the crucial Gulf es of a deal being struck. to an output cap deal with Opec. Experts said this has been caused by of Oman. However, support has come from bets On Friday Brent was slightly up while a number of factors including seasonal Hong Kong was again on the back foot, that the Federal Reserve will cut interest WTI dipped a tad.“A military escalation withdrawals such as for dividend pay- losing 0.7%, after the city was rocked this rates soon as the economy stutters and (between the US and Iran) is unlikely,” ments and dealers preparing for new list- week by violent protests against govern- the trade war rumbles along. said Stephen Innes, managing partner at ings — particularly of tech giant Alibaba. ment plans for a law that would allow extra- “What’s important to remember Vanguard Markets. But they also suggested concerns about ditions to China and which observers warn right now is that there aren’t a whole “And given the market’s tendency to the protests and the possible implemen- could erode its attraction for businesses. lot of upside catalysts,” Randy Freder- quickly sidestep lone wolf or small group tation of the extradition law could also be Trading fl oors have been the scene of ick, vice president for trading and de- terrorist attacks oil prices have come off playing a role, leading investors to take unease for weeks since President Donald rivatives at Charles Schwab & Co, told the boil as traders pivot back to the task cash out of the city. Trump’s shock decision to hit China with Bloomberg TV. at hand, which is accurately positioning “Make no mistake, this is a massive higher tariff s despite expectations the “Markets are waiting now for what the around...massive US inventory builds deal for Hong Kong as if the bill is passed two sides were close to a deal to end their Fed is going to say at the meeting, and amidst the deteriorating global economic it will most certainly erode the rule of law long-running stand-off . that’s coming next week.” backdrop.” and autonomy which has been the pil- Shanghai tumbled 1%, Singapore shed Adding to the downbeat mood are con- Regional energy fi rms rose on the oil lar of Hong Kong’s fi nancial prosperity,” 0.2% and Seoul lost 0.4% while Taipei cerns about tensions in the Middle East price jump with Sydney-listed Wood- Innes warned. was off 0.3%. Mumbai, Bangkok, Manila after US Secretary of State Mike Pompeo side Petroleum adding nearly 2% and Rio In Tokyo, the Nikkei 225 closed up and Jakarta also fell, though Tokyo ended accused Iran of responsibility for the Gulf Tinto more than 3% higher, while Inpex 0.4% to 21,116.89 points; Hong Kong — The rupee ended at 69.80 a dollar yesterday, a level 0.4% higher and Sydney gained 0.2%. In tankers attack. gained 1.3% in Tokyo. Hang Seng ended down 0.7% to 27,118.35 last seen on May 30, down 0.41% from its previous early European trade, London shed 0.4%, Tehran denies the accusation and la- PetroChina, CNOOC and Sinopec points and Shanghai — Composite closed close of 69.51 Paris lost 0.2% and Frankfurt slipped belled the attacks in the world’s most gained in Hong Kong but the rises were down 1.0% to 2,881.12 points yesterday.

Slip in EM equities, Yuan eases as PBoC tries to temper pressure

China data play on Reuters investors’ minds Shanghai hina’s yuan eased against the US dollar yesterday and looked Reuters seen equities swept up by uncertainty as Cset for its third straight weekly London residents protested against an extradi- loss, but the central bank again ap- tion bill. peared to be curbing downward pres- Russia’s rouble firmed 0.2%, ahead of a sure by setting supportive guidance Emerging market stocks fell yesterday, central bank rate decision. rates. with risk sentiment kept in check by weak The bank is expected to cut borrow- While the escalating US-China Chinese industrial output data, which ing costs, opening the door for a further trade war has put stronger pressure investors scanned for clues on the toll easing cycle later this year amid slowing on the yuan, analysts believe Beijing exacted by the country’s bruising trade economic growth and inflation. is keen to keep the currency relatively war with the United States. A vast majority of analysts and steady ahead of a closely watched G20 China’s industrial output growth economists polled by Reuters predict the meeting later this month. slowed to a more than 17-year low of 5% central bank will cut the key rate to 7.50% US President Donald Trump has in May, well below expectations, in the later in the day. said he plans to meet Chinese coun- latest sign of weakening demand in the “Today’s policy announcement is terpart Xi Jinping on the sidelines of economy. pretty much priced in,” given governor that meeting, off ering investors some “There’s always an immediate impact Elvira Nabiullina’s comments last week, hope that the two sides can still avert of whether the Chinese data is going to said Monex Europe’s Harvey. a full-blown trade war. surprise to the downside or the upside, “People are looking at when the next Prior to the market opening on at the moment we’re seeing data tainted rate cut’s going to be, there’s a debate Friday, the People’s Bank of China by trade wars,” said Monex Europe FX at the moment whether it’s going to (PBoC) set the midpoint rate at 6.8937 Analyst Simon Harvey, adding authorities be 50 basis points or 75 basis points per dollar, 3 pips weaker than the pre- have been willing to provide stimulus in over the course of 2019, it’s not about vious fi x of 6.8934. A man changes foreign currency into Chinese yuan at a currency exchange off ice in Hongqiao airport in Shanghai. The the event of a growth slowdown. the rate cut itself, it’s about the forward Fixings have persistently come in yuan eased against the US dollar yesterday and looked set for its third straight weekly loss, but the central bank again MSCI’s developing world stocks index guidance.” stronger than market consensus in the appeared to be curbing downward pressure by setting supportive guidance rates. dropped 0.4%, hurt by stocks in China fall- Moscow-traded stocks rose 0.5%, set past few weeks. ing 1%, while Chinese blue-chips declined for a record closing high. Yesterday, the offi cial guidance weaker than the previous late session overseas have to make their interim sharp jump in capital outfl ows. Beijing 0.8%. MSCI’s emerging market currencies Turkey’s lira was 0.8% softer, while rate was 146 pips higher than Reu- close. dividend payments starting in June. is expected to announce more stimu- index dipped. stocks fell 0.4%. Prices of the country’s ters estimate of 6.9083. “The (USD/ If the onshore spot yuan fi nishes Such demand should push the yuan lus soon as trade pressure mounts, as China’s onshore spot yuan eased dollar-denominated bonds broadly CNY) midpoint fi xings have been well the late night session at the midday lower. A second trader at a Chinese earlier support measures have been and remained on course to post a sixth dropped on growing tensions with the capped below 6.9 per dollar level in level, it would have lost 0.2% to the bank said he saw many major state- slow to kick in. weekly loss in seven weeks. United States. the past month, sending a very strong dollar for the week, its sixth losing owned banks actively buying dollars Former PBoC governor Zhou Xiao- Monex Europe’s Harvey said he Turkey’s foreign minister said it will stabilising policy signal to prevent the week in seven since early May, when on Friday, but assumed the big banks chuan told a fi nancial forum in Shang- believed the weakened yuan could aid a “take reciprocal steps” if the United States yuan falling too much”, said one trader the United States and China escalated were executing orders from their cor- hai that trade issues could trigger pick up in growth over the “next couple imposes sanctions over its purchase of at a Chinese bank. their tit-for-tat trade war. porate clients. competitive currency devaluation and of months”, against the backdrop of an Russian S-400 defences. But the trader added some cor- Several traders said many compa- Pressure on the yuan may ease if the cause chaos to global fi nancial order. easing in financial conditions he expects South Africa’s rand strengthened 0.2% porate fl ows were testing lows in the nies which have seasonal FX demand Federal Reserve starts cutting interest In global markets, the dollar index to see in the world’s second largest while equities rose 0.1%. In emerging Eu- yuan in the morning session. and fi nancing needs have to make the rates to cushion the US economy from against a basket of six rivals was trad- economy. rope, yields on Polish 10-year local bonds Weighed down by corporate de- payments by the end of the month and greater trade damage. ing at 97.066 at midday, and on track Hong Kong’s dollar firmed marginally hit their lowest levels in more than four mand for the greenback, the onshore cannot hold off on their dollar pur- Some analysts believe that would for an over 0.6% gain this week. The while stocks slipped 0.7%. The week has years at about 2.39%. yuan opened at 6.9220 per dollar and chases for too long. also give more room to the PBoC to re- off shore yuan was trading at 6.9353 eased to 6.9239 at midday, 27 pips Many Chinese companies listed duce its major rates without risking a per dollar yesterday. Gulf Times 10 Saturday, June 15, 2019 BUSINESS Wall Street is lending billions to China’s tech unicorns

Bloomberg Banks are betting the loans will lead ings, according to data compiled by the cloud storage company went pub- companies that want to avoid giving are plenty of headwinds. Chief among Hong Kong to more lucrative mandates like initial Bloomberg. lic. Goldman was one of the IPO’s lead away too much information to compet- them is the escalating China-US con- public off erings, just as they did in the “The returns on these loans are underwriters. itors, according to Andrew Ashman, the fl ict, which has expanded beyond tar- US with mega-listings by Uber and usually acceptable, given that lever- “Banks have gotten a lot more com- Singapore-based head of loan syndicate iff s in recent months to encompass all Street banks are taking several of its peers. age tends to be low and given the ex- fortable lending to these asset-light for Asia Pacifi c at Barclays Plc. parts of the tech industry and threatens their unicorn playbooks to But that’s no guarantee as China’s pected future cross-sell opportunities, companies,” said Vey-Sern Ling, an Historically low borrowing costs add to weigh on global economic growth. WChina. After arranging bil- trade war with America spreads to including future capital markets and analyst at Bloomberg Intelligence in to the allure. Bytedance, which was That’s adding to investor jitters lions of dollars in loans for highly val- the technology industry, heighten- trade fi nancing,” said Benjamin Ng, Hong Kong. “If your competitor is valued at $75bn in a funding round late about overstretched valuations for ued – and money-losing – US startups ing investor concerns over frothy head of Asia Pacifi c debt syndicate and lending to these billion-dollar start- last year, off ered an interest margin of companies with unproven business like Uber Technologies Inc, banks in- valuations. acquisition fi nance at Citigroup Inc in ups, you can’t not be there.” Goldman 280 basis points over Libor for its loan models. Uber and rival Lyft Inc are cluding Morgan Stanley and Goldman While banks earned an average mar- Hong Kong. Sachs declined to comment while Mor- in April. Beike asked banks for an inter- both trading below their IPO prices, Sachs Group Inc are angling to do the gin of 145 basis points over benchmark Morgan Stanley, the lead sponsor gan Stanley didn’t reply to requests for est margin of 210 basis points, people while Luckin Coff ee Inc – a Chinese same for some of China’s biggest uni- rates on fi ve-year syndicated loans for of Uber’s IPO in May, earned $41mn comment. familiar with the matter said in May. rival to Starbucks Corp that reported corns. Chinese borrowers this year, the juici- from that deal, about a year after the They were bookrunners on Byted- Bytedance and Beike declined to a loss of about $241mn last year – has They helped Bytedance Ltd, owner est fees come from follow-on services bank helped arrange a $1.1bn loan for ance’s loan and are now leading a facil- comment. So did Guazi.com, an on- dropped 15% from its post-IPO high of the wildly popular TikTok video like equity issuance. the ride-hailing company, according to ity of as much as $1bn for Beike Zhao- line marketplace for used cars that’s in earlier this month. The MSCI China app, borrow $1.3bn in April and are Underwriters have charged 5% to 6% data compiled by Bloomberg. fang, which runs an online property talks with banks to borrow as much as Technology Index has slumped more said to be raising as much as $1.4bn for of the fl oat value for US debut share of- Dropbox Inc tapped banks including brokerage. $400mn, according to people familiar than 20% over the past year. two other Chinese tech startups – bor- ferings in recent years and between 2% Goldman for a $600mn credit facility Loans appeal to Chinese unicorns be- with the matter. If the US-China spat drags on, banks rowers that until recently had rarely and 3% in Hong Kong, though fees in 2017, people familiar with the mat- cause they can be arranged quickly with While Barclays predicts similar deals could be waiting a long time for their tapped the syndicated loan market. are sometimes lower for larger off er- ter said at the time, about a year before few public disclosures, a plus for young will emerge in the second half, there unicorn paydays.

Hedge funds make big gold bet as worries pile up on economy Gushing Europe energy Bloomberg around the world New York including those in Russia and China have been on a bullion-buying spree in a Trade wars are proving bid to diversify reserves, good for gold. Hedge according to the World funds boosted their long Gold Council. China’s IPO pipeline faces position in bullion by the central bank added to its most in almost 12 years. bullion reserves for a sixth That’s paying off , as straight month in May. gold futures surged to a The metal, which doesn’t 13-month high last week off er a yield, is also getting on revived demand for the a boost from declining metal as a haven asset. interest rates amid muted investor appetite Funds are returning to increased expectations gold as the US-China trade that the Federal Reserve Reuters war, geopolitical tensions will ease monetary policy London and signs of a swoon in this year. Anticipation of global manufacturing lower rates, which make dominate investors’ gold more competitive urope’s oil and gas sector is building attention. Reduced against assets that off er up a crowded pipeline for stock mar- forecasts from the IMF and interest, got a further Eket fl otations, but investor appetite is World Bank underscored boost yesterday on a US limited given painful experiences after the rising concern over the report that showed hiring last oil price crash and a backlash against global economy, helping and wage gains cooling fossil fuels. bullion shake off its fits- in May and downward Norway’s Okea, Britain’s Neptune, and-starts pattern to rallies revisions to payrolls in Chrysaor, Siccar Point and Spirit Energy seen through much of prior months. are all either actively preparing or expected 2019. Gains in exchange- “The world economy to plan an initial public off ering (IPO) in the traded funds and mining is slowing, inflation is short term, as are recently merged German- stocks rounded out the below target, and now the Russian Wintershall Dea and Israeli-owned rally. slowing US economy with Ithaca Energy. “The macro environment today’s no-jobs report is Oil and gas companies with a combined has changed for gold and the final straw to break value of around $41bn are seen as candi- the wind is at its back,” the camel’s back for the dates for listing in the coming years, ac- said Maria Smirnova, a Federal Reserve sitting cording to estimates by energy consultancy Toronto-based portfolio on the sidelines,” Chris Wood Mackenzie. manager at Sprott Asset Rupkey, chief financial Shares of oil and gas companies histori- Management, which economist at MUFG cally rise after a crash in oil prices as inves- oversees C$10.6bn Union Bank NA, said in an tors bet on a recovery in prices. ($7.98bn). “We’ve been e-mailed report last week. But the recovery following the 2014 seen signs of weakness in “Rate cuts are coming. Bet downturn, the worst in decades, has been the economy for several on it.’’ JPMorgan Chase & slow and bumpy amid surging US shale pro- months now.” Co said the probability of a duction and wider uncertainty over long- Gold futures for August US recession in the second term oil demand as the world transitions to delivery advanced 0.3% to half of this year rose to 40% cleaner energy. settle at $1,346.10 an ounce from 25% a month earlier. “IPOs tend to come when markets are yesterday on the Comex Working against the case sizzling hot and valuations are high — that “Some will consolidate, some will never themselves,” Clark said. Wintershall-Dea sarily as strong as it used to be for oil and in New York. That marked for a durable gold rally is is not the case for the energy sector current- make it to market, some will take longer. is the largest producer of the group, aim- gas assets... we’re moving towards a lower an eight straight daily a still-strong dollar and ly,” said Bertrand Born, portfolio manager If we wanted to be fi rst, there’s plenty of ing to boost its output by around 30% to carbon economy,” said Les Thomas, chief increase, the longest run low inflation, according for global equities at German asset manager time still.” at least 750,000 barrels of oil equivalent executive of Ithaca, owned by Israel’s Delek for a most-active contract to Rob Haworth, senior DWS. Many of the IPO candidates, including per day by 2023, in a portfolio stretching Group, which last month acquired most of since January 2018. The investment strategist at US Listed oil and gas companies have strug- Neptune, were set up in the wake of the from Brazil to Europe and Russia and the Chevron’s North Sea assets for $2bn. metal posted its biggest Bank Wealth Management gled in recent years, underperforming in 2014 crash by private-equity funds seeking Middle East. Greek group Energean was one of a hand- weekly gain in more than in Seattle, which oversees many cases oil prices and other sectors, and to buy cheap and sell high when the oil price Chrysaor, backed by Harbour and EIG, is ful of energy companies to list in London in a year. $159bn. Gold is often off ering a tough backdrop for any company recovers. the largest oil and gas producer in the North recent years, betting on Israeli gas produc- Hedge funds increased used as a hedge against contemplating a public listing. But nearly fi ve years on, the going is still Sea after acquiring large portfolios from tion and long-term off take agreements. Its their long position in inflation. In a sign of the challenging conditions, tough for the sector. Royal Dutch Shell and ConocoPhillips. shares have risen over 90% since listing last US gold futures and “You are not getting Okea on Thursday lowered its off ered price In the fi rst quarter of 2019, European Neptune has assets in a number of re- year. options by 38% to 174,233 reflation and that’s one of per share and delayed its listing on the Oslo IPOs slumped to their lowest since the af- gions and is focused on gas, seen as the “Oil price upside is not enough anymore. contracts in the week the headwinds for gold,” stock exchange. termath of the 2008 fi nancial crisis, as least-polluting fossil fuel. You have to off er investors at least partial, ended June 4, Commodity Haworth said by phone. Sam Laidlaw, executive chairman of Nep- uncertainty over Brexit and the US-China In addition to returns, environmental, if not complete, security of a return on Futures Trading “In the long run, we’re still tune, backed by private equity fi rms Carlyle trade dispute left companies not wanting to social and governance (ESG) issues are an their investment regardless of commodity Commission data showed. seeing a strong dollar. Group and CVC Capital Partners, said he take their chances. ever-growing concern for fund managers prices,” Energean Chief Executive Mathios The net-long position We’re not seeing that saw no time pressure for his company’s IPO. To succeed, companies will have to off er and their clients. Rigas said. more than tripled, while trend reverse yet, and if “Lower returns at $100 a barrel than at investors something unique, says Jon Clark, Unlike any other time, investors are likely “It’s not enough to say I have this amaz- short-only wagers fell. that does reverse I think $60 raised concerns among capital markets. regional transaction leader at EY. to question a company seeking to list on ing geologist or knowledge of a basin or To counter heightened gold and foreign assets There is less appetite from generalist in- “The European oil and gas IPO land- its role in the transition to a lower carbon promise to fi nd oil in frontier areas. geopolitical and economic start to look a little more vestors. scape looks like it will shift from famine economy following the 2015 Paris climate To continue investing as an energy uncertainty, governments interesting.” We don’t see anything that’s IPO ready to feast and the potential IPO candidates agreement to limit global warming. company only in oil, from an ESG per- yet,” he told Reuters this month. need to think how they will best position “Sentiment in the market is not neces- spective, is suicidal.” PE fi rms race to block the exits to ward off vulture funds

Bloomberg are under pressure from weaker earn- stressed and the cycle is tested.” Some curbs on selling to distressed funds London ings, which could trigger a drop in loan lenders have previously circumvented even after certain types of default, prices and threaten managers’ returns. strict sale rules via a trade called a sub- compared with just 14% in 2017. And more pain could be in store as the participation, where a bank’s trading Even so, the impact of trading re- everaged loan investors in Europe region’s economy worsens. desk holds the position on behalf of the strictions in case of a widespread sell- face heightened risks of fi nding During the fi nancial crisis, dis- distressed buyer. off is yet to be tested. Some investors Ltheir escape route slammed shut, tressed funds took control of PE- But leveraged finance lawyers said even support the “white lists” know- as private equity fi rms impose stricter owned companies including Monier sponsors have started to close that ing they help prevent distressed buy- rules on sales to distressed funds. and Eircom after gaining a toe-hold option too. However, it’s not clear ers from taking control and writing off PE fi rms are tightening rules to make through leveraged loans. Now, private how a ban on sub-participation their debt. But signs of stress and the it harder for such asset managers to equity sponsors have gained the upper would be enforced, and what action thin liquidity of the secondary market seize control of their companies in the hand in pushing their agenda. They’ve would be taken. are making investors nervous. event of a debt restructuring. About taken advantage of demand for assets The restrictions on sub-partici- It’s notable that transfer restric- two thirds of loans sold this year faced persistently outstripping supply, as pation may prevent a par-based debt tions are more harsh in the sponsor- curbs on selling to such funds, com- buyers look for yield in a low interest fund from hedging its exposure just dominated European loan market pared with just 29% in 2017, according rate world. when it needs to the most, credit re- than the US They are non-existent in to Reorg Debt Explained. That demand has also allowed spon- search fi rm Covenant Review said in a high-yield bonds although increas- “The fi rst thing anyone should sors to remove covenant tests that report published this week. “Investors ingly there’s very little to diff erentiate do when they walk into a room is might otherwise have provided lend- should be wary of entering into any de- between the two asset classes in terms check where the exits are,” said Ni- ers with a trigger to negotiate a debt rivative transaction without reviewing of documentation. gel Houghton, managing director at restructuring rather than waiting for the underlying credit agreement,” the “As we’ve seen, loan prices can drop the Loan Market Association, a lobby default. report said. fast in facilities which turn out to be group. “But investors are not doing The fi ne print of many European of a troubled asset. It may also contain white lists,” said Azhar Hussain, head As rules tighten, transfer restric- less liquid than assumed,” said Luke this, they’re buying into something leveraged loans provides a list of ac- additional language that bars lenders of leveraged fi nance at Royal London tions have also begun to apply even McDougall, a partner at Paul Hastings they don’t know they can get out of.” ceptable buyers referred to as a “white from transferring to any “loan-to- Asset Management. “Par investors are where a borrower has defaulted on a LLP in London. “So for ‘par investors’ These restrictions have come into list” which usually excludes distressed own” funds. going to fi nd it increasingly hard to loan. Reorg Debt Explained data show being able to get out of these stressed sharper focus now as more borrowers funds that are the most likely buyers “It’s buyer beware when it comes to get out as soon as those positions turn 58% of loans sold in 2019 imposed positions could be challenging.” Gulf Times Saturday, June 15, 2019 11 BUSINESS

Top lithium miners cast Russia central bank lowers doubt on prospects for price rates as infl ation slows benchmark Reuters ered to be the one where chances of a Moscow rate move are higher. “We now see high likelihood of a couple of cuts in July and Bloomberg September,” ING Bank said in a note. Santiago he Russian central bank cut its “The overall dovish undertones of the key interest rate yesterday and statement strongly suggest that the Tsaid one or two more cuts were CBR will make another 25 basis point he world’s three largest possible later this year as Russia faces cut in 2019,” analysts at Citi said. lithium miners are scep- sluggish economic growth and slowing Capital Economics research fi rm said Ttical that the London infl ation. it expected the key rate to be lowered to Metal Exchange’s plan to create The central bank trimmed the key 6.75% by mid-2020. a benchmark index could ac- rate to 7.50% from 7.75%, lowering the The central bank boosted expecta- curately refl ect the price of the cost of lending for the first time since tions for a rate cut by lowering its 2019 mineral used in making electric- March 2018 and returning its level economic growth forecast to 1.0% car batteries. before the previous rate increase, in to 1.5% from 1.2% to 1.7%. The bank Albemarle Corp said it won’t December. raised the key rate twice last year to be providing pricing information Governor Elvira Nabiullina said two curb rising prices. to the index, while Soc. Quimica more rate cuts were possible this year It now says infl ation was on track y Minera de Chile SA and Tianqi if the central bank does not face “any to slow to 4.2% to 4.7% by the end of Lithium Corp said they are still negative surprises.” the year, moving towards its 4% target gathering information about the Even though the rate decision was quicker than previously thought. initiative and have not taken a widely expected by the market, the The central bank acted in line with a position yet. rouble climbed to three-week highs recommendation of the International Without their cooperation, against the dollar on expectations of Monetary Fund which said in late May the gauge won’t refl ect transac- further rate cuts. that it was time to cut rates. tions involving the three com- The central bank said it decided to Meanwhile Russian companies are panies that together account trim the key rate towards 6% to 7%, developing their own internal ratings for more than half of the global the range it views as neutral, as annual processes because there is insuffi - output. infl ation slows and economic growth cient coverage from domestic and glo- The three lithium miners ar- misses expectations. bal agencies that assess the credit risk gued that setting unifi ed prices “If the situation develops in line with posed by businesses, a former head of for lithium is a challenge, given the baseline forecast, the Bank of Rus- Russia’s ACRA rating agency said. that prices are currently set pri- sia admits the possibility of further key Ekaterina Trofi mova, who oversaw vately between producers and rate reduction at one of the upcom- the creation of ACRA after western clients. Each buyer requests ing Board of Directors’ meetings and a sanctions had resulted in Russia being lithium with diff erent chemical transition to neutral monetary policy downgraded by the top three interna- specifi cations, the companies until mid-2020.” tional credit rating agencies, joined said at an industry conference in The next board meetings are sched- global accountancy fi rm Deloitte’s Santiago. uled for July 26, September 6, October Moscow offi ce in April to lead develop- “Lithium is a speciality- Russian central bank governor Elvira Nabiullina attends a news conference in Moscow, yesterday. The central bank trimmed 25 and December 13. Only every second ment of internal ratings processes at chemicals market with custom- the key rate to 7.50% from 7.75%, lowering the cost of lending for the first time since March 2018 and returning its level before board meeting is accompanied by Na- domestic companies and banks, among ized products and specifi cations,” the previous rate increase, in December. biullina’s press briefi ng and is consid- other tasks. David Ryan, a vice president for investor relations at top producer Albemarle, said. “That’s how we approach our relationships and long-term agreements with cus- Rusal sees aluminium tomers, so for us an index price Kairos investor doubles down on goes against that strategy and that philosophy.” The LME announced a part- near bottom as it nership with Fastmarkets on cheap shares despite May slump Monday to develop lithium pric- ing benchmarks in a move that seeks to lure clients Bloomberg tum soared to a near-record 17% Societe Generale SA’s quant mod- shows the exchange is progress- London outperformance versus cheaper el is now underweight the factor. ing with plans to create a lithium stocks thanks to its bet on defen- Riggio, whose fund sits within futures. The contracts will be Bloomberg previously accounted for about 40% of the sive equities, according to Morgan the Julius Baer Group Ltd-con- based on a price-reporting index. Moscow total. efensive investors are Stanley. trolled Kairos Investment Man- “The LME’s strategy is based In its key Asian markets of South Korea and stoking fashionable stocks “I prefer to be seen as an idiot agement Ltd, used the May dip on a user choice model, providing Japan, the uncertainty caused by sanctions Dat a rate rarely seen over in the short-term but sticking to to buy shares that were “totally hedging and investment solu- United Co Rusal said aluminium prices are prompted customers to shift from quarterly the past three decades - all while the principles of our investment destroyed” by momentum inves- tions for interested market par- nearing the bottom, and any further collapse contracts to annual deals with rival suppliers, snubbing the cheapest shares. style and criteria because this is tors, such as UK gaming compa- ticipants, while fully respecting would lay the foundation for a speedier Andryushin said. That’s forced Rusal into the A hedge-fund manager besting the only way to have a good return nies. the right of all market partici- market recovery as higher-cost producers spot market this year until new contracts are most of his peers is joining a cho- over the long-term,” said Riggio, There’s not much to tempt in- pants to operate in the manner shutter capacity. signed in the autumn. rus of Wall Street voices warning whose fund is up 10.2% this year, vestors into value shares just yet. which best suits their needs,” a Aluminium has declined about 29% to about In the US, the company is already in something has to give. about double the return of the After adding to losses last month spokeswoman said in an e-mail. $1,790 a tonne from the peak that followed discussions with clients, before new deals Federico Riggio, who runs the Hedge Fund Research HFRX Eq- on the heels of a lacklustre start The validity of the index may the imposition of US sanctions on the Russian are signed from August, said Andryushin, €318mn ($360mn) Kairos Pegasus uity Hedge Index. to the year, the investing style is be in question, if one of the main company in April last year. Those restrictions who just returned from Chicago. “I have large Fund SA, is sticking with Europe’s “Too much of a crowd is go- testing its vanishing cohort of be- producers refuses to be involved, cost Rusal a number of contracts before they expectations for this market” for 2020, he said. scorned value shares while warn- ing into momentum. I’m staying lievers once more. Pablo Altimiras, vice president were lifted in January, and the world’s biggest While President Donald Trump’s move last ing that so-called momentum in companies that I believe are The likes of Bernstein aban- of lithium and iodine business aluminium producer outside China faces month to lift 10% tariff s on aluminium imports equities are getting dangerously underpriced for the profi t and doned their bullish call at the end at SQM, said on the sidelines of a challenging year, according to Sales and from Canada and Mexico leaves Russia at overheated. growth that they deliver.” of last month as the performance the conference in Santiago. “The Marketing Director Roman Andryushin. a disadvantage, the US should remain an Last month’s bloodbath in Mounting US-China trade ten- gap between the cheapest and idea behind setting up an index is “We now have the price level close to bottom,” attractive market, he said. value versus momentum even sions helped push investors into priciest companies widened. that all of the parties are in agree- said Andryushin, appointed when Steve “The consensus now, and I agree with it, is has a bright side, according to the stocks bearing defensive char- Still, JPMorgan strategist ment,” he said. “I think this all re- Hodgson left the company last year. “Still, that it shouldn’t aff ect the price premiums,” manager - it’s laying bare fresh acteristics last month, boosting Marko Kolanovic has come out quires a bit more discussion.” should it fall further to $1,500 per tonne, there Andryushin said. dislocations just begging to be momentum’s exposure to sectors swinging, saying value stocks Producers’ reluctance may be will be a big rebound and the recovery to the Rusal hopes to rebuild pre-sanctions sales exploited. such as healthcare and food and could rally as much as 20% in the driven by their views on trans- fundamental level of $2,000 per tonne and structures next year as most of its traditional The likes of Morgan Stanley and beverage, according to Morgan short term should a trade agree- parency and whether they “feel higher will be faster.” The 2019 aluminium clients are ready to work with the company, Sanford C Bernstein are caution- Stanley. ment between the US and China greater liquidity is benefi cial for deficit outside China might be lower than he said. The sanctions forced Rusal to work ing that momentum has become Momentum now has a “big materialise. them,” Vivienne Lloyd, indus- originally projected, Andryushin said in an with traders more actively than before, but the more crowded and worryingly ex- overlap’’ with the quality and Barclays points out that value trial metals analyst at Macquarie interview in Moscow. company hopes to recover direct links with pensive on the back of this year’s low-volatility factors, the bank’s in Europe is trading at the big- Group, said by telephone from Rusal forecast a 1.4mn-tonne deficit when it clients in 2020. Traders will retain a servicing fi ery outperformance. strategists wrote in a note. gest price-to-earnings discount London. published its first-quarter results in May. “The role, such as providing funding to clients, he Barclays Plc is putting their But the search for safety is versus growth on record, and “Nobody has enough infor- pace of demand growth may be lower than we said. necks out saying value can stage a looking dangerous. Momentum’s recommends energy and mining mation or data to make that thought,” but there will still be growth, he said. As Rusal works to win back the clients, it’s tactical rebound even if the mar- valuation in Europe has swelled to stocks as top plays, while shun- benchmark yet,” Tianqi CEO Rusal’s strongest market this year is Europe, hiring new people after its sales team saw ket craters thanks to its record the 99th%ile, and crowding has ning banks. Vivian Wu said in a separate where the retention of existing customers departures last year. discount. upped the risk of a “big unwind’’ Yet that’s what has allowed interview. “The industry is means the region will account for more The company recently appointed some former Riggio’s fund, which focuses on should performance wither, Mor- Riggio’s hedge fund to beat quite young and changing fast. than half the company’s sales, Andryushin Vedanta Resources Ltd executives in the US regional equities “that are cheap gan Stanley said. peers despite a slump in cheaper Tianqi is talking to a number of said. “It surpassed my expectations, and and is seeking to strengthen its team in Japan, and wrongly perceived as bad- Bernstein quants led by Inigo stocks this year: holdings like stakeholders including Fast- exceeded Asian sales,” he said. European sales Andryushin said. quality businesses,’’ slid 2.8% Fraser-Jenkins say momentum Eurobank Ergasias SA, a Greek markets to understand where in May. Meanwhile, momen- “could become vulnerable,’’ while lender which is up 60%. the industry is going.” Franc may showcase its haven status as SNB plays it safe

Bloomberg With no sign of higher intervention Such positioning could be tested as on Tuesday; off icials are expected to Athens risks, history on the side of bulls in soon as Monday as European Central debate a rate cut; Chairman Jerome times of Fed easing and ongoing Brexit Bank off icials start their annual Powell holds a press conference uncertainty, franc appreciation may be gathering in Sintra, Portugal. Comments following the policy announcement. The Swiss franc may be in the yen’s on the way. by President Mario Draghi will be The Bank of England sets interest shadow when it comes to being the The Swiss currency’s haven appeal saw closely watched, especially as the euro rates on June 20; no policy change haven of choice in foreign-exchange it rise against all major peers except gained 1.4% on the day following his is expected; Norges Bank and Bank markets, but the Japanese currency Japan’s in the past three months as remarks on inflation at the event in of Japan decisions the same day, may soon get a run for its money. trade tensions deepened the global 2017. Governor Haruhiko Kuroda gives news Traders look more willing to go long economic gloom. The currency trades near the middle conference European Central Bank the franc after the Swiss National Given geopolitical and trade concerns of its range versus the dollar since off icials meet in Sintra, Portugal on Bank kept its language about the aren’t seen receding any time soon, September as charts suggest further Monday; speakers include Draghi and currency’s strength unchanged, the trend may remain and even get gains are possible. A bearish short-term BoE Governor Mark Carney. and could build on positions should stronger as the SNB doesn’t seem in any moving-averages crossover makes Policy makers’ speeches also include expectations for looser Federal kind of panic over the franc’s strength case for dollar-franc to weaken by Bank of Canada Deputy Governor Reserve policy increase. or volatility. 1.3% towards 0.9807, a key Fibonacci Lawrence Schembri, Reserve Bank The Fed meets next week and investors This would in theory support the use retracement level. of Australia Governor Philip Lowe, are on the lookout in case US policy of the franc as a hedge for investors This comes at a time when options Cleveland Fed President Loretta makers signal that the first interest- looking to take cover for Brexit traders remain strongly in favour of the Mester and Fed Governor Lael Brainard rate cut in more than a decade is in the developments, especially those franc’s prospects. Economic releases include euro cards for their July decision. that have lately gone long the euro. Over the one-year horizon, the Swiss area inflation, man. PMI; US leading The Swiss currency advanced on Leveraged accounts have steadily currency enjoys it’s the most bullish indicators, PMI; UK inflation, retail Thursday after SNB President Thomas trimmed their euro shorts since early sentiment in 14 months versus the sales; Sweden unemployment; see data The headquarters of the Swiss National Bank in Bern, Switzerland. Traders look Jordan kept his description of it being May, while asset managers still hold greenback while it steadily narrows the calendar A second ballot in the UK more willing to go long the franc after the SNB kept its language about the “highly valued” as some investors a long net exposure, according to gap over the yen since early May. leadership contest to chose Theresa currency’s strength unchanged, and could build on positions should were positioned for stronger language. CFTC data. The Fed’s two-day meeting begins May’s successor due June 18. expectations for looser Federal Reserve policy increase. Saturday, June 15, 2019 GULF TIMES BUSINESS

QSE WEEKLY REVIEW Index breaks 10,600 points amidst stock split implementation

By Santhosh V Perumal cially considering that the banking and as 1,139 Masraf Al Rayan sponsored The banks and financial services sector A total of 75.22mn banks and financial Business Reporter financial services were the first sector exchange traded fund QATR valued at accounted for 64% of the total volume, services stocks valued at QR764.36mn to implement the stock spit according QR0.03mn trade across eight deals. real estate (16%), industrials (11%), changed hands across 10,657 deals. to a preset deadline fixed by the Qatar Market capitalisation stood at consumer goods (4%), telecom (2%), and The real estate sector saw as many as The Qatar Stock Exchange had witnessed Financial Market Authority. QR577.82bn this week which saw a total insurance and transport (1% each) this 10.3mn equities worth QR185.91mn trade its key index break 10,600 points So far Commercial Bank, Qatar First of 1,121 Doha Bank sponsored QETF week. across 12,727 transactions. intraweek although it settled below that Bank, Al Khaliji, Dlala Holding, Qatar valued at QR0.12mn across nine transac- In terms of value, banks and financial The industrials sector witnessed a total level, amidst stock split implementa- Oman Investment, QIIB, Alijarah Holding, tions. services sector’s share was 44%, industri- of 13.34mn shares valued at QR360.05mn tion by banking and financial services QNB, Ahlibank Qatar, Islamic Holding, The Total Return Index was at 19,350.11 als 21%, consumer goods 15%, realty 11%, change hands across 9,776 deals. segment. Qatar Islamic Bank and Doha Bank have points, Al Rayan Islamic Index (Price) telecom and insurance (3% each) and In the case of consumer goods and Foreign institutions were seen increas- enforced stock split, whereby the nomi- at 2,401.01 points and All Share Index transport 1% this week. services, it saw as many as 5.24mn stocks ingly into net buying this week which nal value of a share has become QR1 per at 3,098.67 points this week which saw Foreign institutions’ net buying amount- worth QR258.91mn trade across 3,662 saw a report from the International share instead of QR10 earlier. banking sector accounted for about 64% ed to QR366.77mn; while domestic funds’ transactions. Monetary Fund that said Qatar’s gross Market heavyweights and blue chips of the total trade volume. net sold QR102.49mn worth equities. The telecom sector recorded a total of external debt, which is “sizeable” under were seen high in demand as the The banks and financial services index In the case of local and non-Qatari 2.78mn equities valued at QR58.28mn the baseline, is projected to fall over the 20-stock Qatar Index up closed at stood at 4,023.32 points, consumer retail investors; their net profit booking change hands across 2,404 deals. Market heavyweights and blue chips were medium term. 10,515.88 points, although it peaked at goods and services 8,047.97 points, stood at QR254.96mn and QR9.49mn As many as 1.47mn insurance shares seen high in demand on the QSE this There were increased trading turnover 10,622 points on Wednesday. industrials 3,312.45 points, insurance respectively. worth QR42.29mn trade across 1,030 week, as the 20-stock Qatar Index closed and volume (although a week to week Islamic stocks continued to make gains 3,153.85 points, real estate 1,565.42 Total trade volume stood at 118.36mn, transactions and a total of 1.01mn trans- at 10,515.88 points, although it peaked at comparison is not possible due to Eid but slower than the conventional ones points, telecom 920.91 points and trans- value at QR1.69bn and transactions at port stocks valued at QR24.3mn change 10,622 points on Wednesday. holidays the previous week), espe- this week which witnessed as many port 2,442.47 points this week. 41,041 this week. hands across 785 deals.

VW to float 10% of truck Solid US retail sales off er unit; seeks to raise €1.9bn

Reuters economy some respite Frankfurt Retail sales rise 0.5% in May; April raised to 0.3% gain; core Volkswagen aims to raise up to €1.9bn retail sales increase 0.5%; April ($2.1bn) by listing truck unit Traton, it said revised up to 0.4%; industrial yesterday, scaling back earlier ambitions production up 0.4%; factory to list up to a quarter of the unit by opting output gains 0.2% to float a 10% stake. The German carmaker said in a statement Reuters that the off ering would be priced at Washington €27-33 per share, which Jeff eries analysts said valued Traton at a slight discount to industry peers but at a premium to S retail sales increased in May Swedish competitor Volvo. and sales for the prior month Wolfsburg-based VW plans to invest Uwere revised higher, suggest- proceeds in transforming its auto ing a pick-up in consumer spending production as it readies the launch of that could ease fears the economy dozens of electric vehicles over the was slowing down sharply in the sec- coming years and deepens an alliance ond quarter. with Ford Motor Co. The fairly upbeat report from the It is also seeking to capitalise on the Commerce Department yesterday premium that truck stocks command followed a raft of weak data, includ- over automakers to create an ing a step-down in hiring in May and acquisition currency, having earlier tame infl ation readings, that have led shown interest in US-based truck maker economists to believe that the Fed- Navistar. eral Reserve will signal a rate cut later Management denies that a Navistar deal this year when policymakers meet is in immediate prospect, but such a move next week. would fit with a broader pivot by the Financial markets have priced in leading European carmaker towards the two rate cuts this year, driven pri- United States to balance its reliance on marily by a recent escalation in the China, where it sells half its cars. trade war between the United States The stake size is at the bottom end of a and China, which economists have range of 10%-20% that sources had earlier warned could undercut economic indicated. growth. If banks running the deal exercise an The economy will next month over-allotment option, the issue size could celebrate 10 year of expansion, the reach 11.5% of Traton’s equity. longest in history. At the off er range, the initial public “Although it won’t change the off ering values Traton at €13.5bn-€16.5bn. view that the Fed will feel compelled Shares in VW eased by 0.5% in early to ease at some point this year, this trading in Frankfurt yesterday as eases some of the pressure,” said Jen- analysts cautioned that Traton’s potential nifer Lee, a senior economist at BMO acquisitiveness could lead to the issue Capital Markets in Toronto. “And it is of fresh equity that would dilute existing likely welcomed.” shareholdings. The Commerce Department said Jeff eries, in a note, said that Traton’s retail sales rose 0.5% last month as enterprise value as a multiple of core households bought more motor ve- BMW MINI vehicles are displayed for sale at a dealership in Louisville, Kentucky. The US Commerce Department said retail sales rose 0.5% last month as earnings — a measure of a company’s hicles and a variety of other goods. households bought more motor vehicles and a variety of other goods. ability to support its equity and debt Data for April was revised up to costs — of 8.2 times was slightly lower show retail sales gaining 0.3%, in- The outlook for consumer spend- in the January-March quarter after for about 12% of the economy, is the G20 summit later this month in than the sector average but higher than stead of dropping 0.2% as previously ing is mixed. getting a temporary boost from ex- being constrained by an inventory Japan. Volvo’s, which it sees as off ering better reported. While consumer confi dence re- ports and an accumulation of inven- overhang, especially in the auto- “We expect the manufacturing value. Economists polled by Reuters had mains strong, wage growth retreated tory. motive sector, that has left busi- sector to continue struggling in the The carmaker is being more cautious forecast retail sales climbing 0.6% in in May and hiring moderated sharply. Exports dropped in April and in- nesses placing fewer orders at fac- second half of this year,” said Paul about the volume of shares it will place May. The dollar rose against a basket of ventories are expected to be a drag on tories. Ashworth, chief economist at Capi- after halting earlier listing plans in March, Compared to May last year, retail currencies. growth. Motor vehicle inventories surged tal Economics in Toronto. when it had planned to place a stake of up sales increased 3.2%. Excluding au- US Treasury yields fell. In addition, business investment 0.8% in April, the Commerce De- Last month, sales at auto dealer- to 25% on the stock market, citing market tomobiles, gasoline, building mate- Stocks on Wall Street were trading softened and home sales fell in April. partment said in another report. ships accelerated 0.7% after drop- conditions. rials and food services, retail sales lower. Overall, the economy is losing The trade tensions between ping 0.5% in April. More shares could be sold subsequently advanced 0.5% last month after an The solid gains in core retail sales steam as the stimulus from last year’s Washington and Beijing are also Receipts at service stations rose if the IPO is successful, a person familiar upwardly revised 0.4% rise in April. in April and May suggested con- $1.5tn tax cut and increased govern- causing disruptions in the supply 0.3%. Building materials and gar- with the matter said this month, adding These so-called core retail sales sumer spending was gaining speed ment spending dissipates. chain. den equipment sales edged up 0.1%, VW would remain Traton’s majority correspond most closely with the in the second quarter after braking A separate report from the Fed President Donald Trump in early while online and mail-order pur- shareholder for the foreseeable future. consumer spending component of sharply in the January-March quar- yesterday showed manufacturing May imposed additional tariff s of up chases jumped 1.4%. Sales at cloth- The off ering will begin on Monday, with gross domestic product. ter. production rising moderately in May, to 25% on $200bn of Chinese goods, ing stores were unchanged and re- management holding a series of investor They were previously reported to That could see economists raising leaving output down this year. prompting retaliation by Beijing. ceipts at furniture outlets nudged up roadshows. have been unchanged in April. their second-quarter GDP growth Production at factories rose 0.2% Trump on Monday threatened 0.1%. Sales at bars and restaurants It ends on June 27, with the first day of Consumer spending accounts for estimates, which are currently below last month after slumping 0.5% in more duties on Chinese imports if no increased 0.7% last month, while trading in Frankfurt and Stockholm set for more than two-thirds of economic a 2.0% annualised rate. April. deal was reached with Chinese Presi- those at hobby, musical instrument June 28. activity. The economy grew at a 3.1% pace Manufacturing, which accounts dent Xi Jinping by the conclusion of and book stores rose 1.1%. IEA sees ample oil supplies and weak demand

AFP weakens”. It cited data that world trade IEA sees oil demand accelerating, this that provides advice to oil-consuming to briefly shoot more than 4% higher, tensions between Tehran and Paris growth has fallen to its lowest level is more than matched by output gains nations. in the second spate of incidents in a Washington as the US has intensified since the financial crisis a decade ago from nations outside Opec+. It put the The data comes as ministers from the month in the strategic shipping lane. sanctions on Iran over its nuclear amidst the burgeoning US trade wars, increase of non-Opec supplies at 2.3mn Opec+ nations are due to meet later this With some 40 % of the world’s seaborne programme. Tepid growth in demand for oil along which have already begun to have an barrels per day (mbd) in 2020 while month to debate whether to continue oil passing through the Strait of The IEA said that the US sanctions have with ample supplies from non-Opec impact on demand for oil. global demand is seen as increasing by their production restraints. Hormuz, a disruption to shipping could not yet completely cut off Iranian oil countries will complicate eff orts by the In the first three months of this year 1.4 mbd. With the IEA saying its forecast “means roil markets. exports, but they have fallen drastically. group and its allies to boost prices, the global demand for oil rose by only a In 2019, the 1.9 mbd increase in the tightening of oil markets could Oil prices were narrowly mixed in Iran’s crude production fell 210,000 IEA said in a report yesterday. meagre 300,000 barrels per day, the non-Opec supplies is also expected prove short lived”, Opec+ nations may London midday trading, with the barrels to 2.4 mbd in May when exports The focus in oil markets in recent lowest quarterly increase in nearly to outweigh the 1.1 mbd increase in have to consider stepping up their cuts international benchmark Brent crude plunged by 480,000 to 810,000 barrels months and days has been on supply eight years. demand. to maintain leverage on prices. still way below the $70 level it breached per day as Washington pulled the last issues — from US sanctions on Iran While there were some idiosyncratic “A clear message from our first look at While the IEA added the caveat that its last month. waivers for other nations to buy Iranian and Venezuela to tanker attacks near factors such as weather, the IEA said 2020 is that there is plenty of non-Opec outlook assumes no major geopolitical “This is another factor that Opec+ will oil. the Strait of Hormuz — which has “the worsening trade outlook (was) a supply growth available to meet any shock, it also noted that Opec have to consider when they meet next That export level is less than a third of helped Opec and its allies, which are common theme across all regions.” likely level of demand...” said the IEA. countries have ample spare production month, with oil prices remaining under what it was exporting a year ago. often called Opec+, in their efforts to The IEA cut its forecast for oil demand “This is welcome news for consumers capacity thanks to the cuts they have pressure even despite geopolitical risks The IEA added it was becoming prop up prices by cutting back output. growth this year for the second month and the wider health of the currently implemented. being heightened following yesterday’s increasingly diff icult to determine But the International Energy Agency straight and trimmed its second quarter vulnerable global economy, as it will The IEA’s latest monthly report comes a attacks,” Oanda analyst Craig Erlam where Iranian oil was being shipped said that now “the main focus is on forecast as well. limit significant upward pressure on oil day after attacks on two tankers in the told AFP. as Iran’s national oil company shut off oil demand as economic sentiment While in its first estimates for 2020 the prices,” said the Paris-based institution Gulf of Oman, which caused oil prices The latest attacks came amid rising satellite tracking systems on its ships.