TRADE WAR | Page 2 AILING ECONOMY | Page 4 China denies Mahathir it has off ered makes tax $200bn to US changes

Saturday, May 19, 2018 $5.4BN DEAL: Page 12 Ramadan 3, 1439 AH Lloyds sells Irish mortgage business GULF TIMES to Barclays Bank BUSINESS Qatar property market experiences strong demand: JRE chief

By Peter Alagos it and they will come’, but now people new opportunities in the country. banks reacted normally, and the whole Business Reporter are more selective when investing in “The commercial real estate segment country reacted normally,” al- Ansari real estate, and they are investing in is highly-competitive. As an innovator stressed. growing cities like Lusail, The Pearl- in the sector, JRE constantly strives to Similarly, Regency Group Holding vice Even as Qatar’s property market Qatar, and other areas. off er attractive, out-of-the-box solutions president and CEO Hassan Ibrahim al- experiences “strong demand,” new and “The country’s property market to meet the needs of our clients,” al- Asmakh reflected the same view. In an creative products and services from continues to witness strong demand, Ansari said in an earlier statement. earlier statement, al-Asmakh said the real estate companies will continue to and real estate developers should think Despite an economic blockade, which blockade has strengthened Regency’s attract more investors, according to wisely by creating more services and is nearing its first year next month, al- partners’ “resolve and belief in the one of the country’s major industry products to attract more investors,” Ansari said Qatar has succeeded 100% economy.” players. al-Ansari told Gulf Times. in overcoming the challenges of the He also noted that the blockade Engineer Nasser al-Ansari, the Citing a “series of policy-driven blockade. opened “incredible opportunities” chairman of Just Real Estate, said it is decisions,” al-Ansari noted that there “We became more solid and resilient, in manufacturing, retail, and JRE chairman Nasser al-Ansari. “Qatar property market continues to witness a must for real estate developers to is “transcending interest” Qatar’s real as well as self-suff icient. In other logistics aided by the government’s strong demand, and real estate developers should think wisely by creating adjust to what the market needs and to estate segment. These decisions, he words, this economic blockade has significant investments in world-class more services and products to attract more investors,” al-Ansari said. adapt to the current trends. emphasised, increased the appetite of given us more options. The blockade infrastructure, including air, road, and PICTURE: Jayan Orma “Unlike before, the approach was ‘build investors and stakeholders in fetching had no impact on our finances, the rail networks.

EU considers Iran central EU to shield its fi rms from bank transfers to beat US US sanctions against Iran sanctions

AFP extraterritorial eff ects of US sanc- al-scale” uranium enrichment un- Reuters Brussels tions,” the commission said. less Europe can provide solid guar- Brussels It also “allows companies to re- antees to preserve Iran’s economic cover damages arising from such benefi ts under the deal. he European Union took for- sanctions from the person causing During talks in Brussels on Tues- The European Commission is propos- mal steps yesterday to shield them, and nullifi es the eff ect in the day, Iran’s foreign minister Moham- ing that EU governments make direct Tits fi rms from US sanctions on EU of any foreign court judgements mad Javad Zarif said eff orts to save money transfers to Iran’s central bank Iran as part of eff orts to save the in- based on them,” the executive add- the deal were on the “right track”. to avoid US penalties, an EU off icial ternational nuclear deal with Tehran. ed. On other fronts, the commission said, in what would be the most forth- EU leaders meeting Thursday in Brussels took steps on three oth- moved yesterday to remove hurdles right challenge to Washington’s newly Bulgaria gave the European Com- er fronts to shore up the Iran deal, for the European Investment Bank reimposed sanctions. mission, the bloc’s executive arm, signed not just by the EU but EU (EIB) to fi nance activities outside the The step, which would seek to the all-clear amid a deepening rift members Britain, France and Ger- EU, such as in Iran. bypass the US financial system, would with Washington. many, along with China and Russia. It said the move will “allow the EIB allow European companies to repay The commission said yesterday it The “blocking statute” is a 1996 to support EU investment in Iran,” Iran for oil exports and repatriate “launched the formal process to ac- regulation originally created to cir- particularly involving small and me- Iranian funds in Europe, a senior EU tivate the blocking statute by updat- cumvent Washington’s trade em- dium-sized companies. off icial said, although the details were ing the list of US sanctions on Iran bargo on Cuba, which prohibits EU The commission yesterday called still to be worked out. falling within its scope.” companies and courts from comply- for doing more to help Iran’s energy The European Union, once Iran’s The commission said it hopes the ing with specifi c foreign sanction sector and small and medium-sized biggest oil importer, is determined to statute will be in force before August laws. companies, as part of “confi dence- save the nuclear accord, that US Presi- 6 when the fi rst batch of reimposed However, the Cuba row was set- building measures.” dent Donald Trump abandoned on US sanctions take eff ect. tled politically, so the blocking regu- It added that EU energy and cli- May 8, by keeping money flowing to President Donald Trump last week lation’s eff ectiveness was never put mate commissioner Miguel Arias Tehran as long as the Islamic Republic pulled Washington out of the 2015 to the test, and its value may lie more Cañete will travel to Tehran at the complies with the 2015 deal to prevent international deal with Iran to curb in becoming a bargaining chip with weekend. it from developing an atomic weapon. its nuclear programme in return for Washington. The commission said it is also “Commission President Jean-Claude easing sanctions. Since the US withdrawal, the re- encouraging EU member states to Juncker has proposed this to member The statute, which the 28 EU maining parties have all pledged to explore the idea of “one-off bank states. We now need to work out how member states and the European stick to the deal if Tehran respects its transfers” to the Central Bank of we can facilitate oil payments and Parliament must endorse, is aimed terms. Iran. repatriate Iranian funds in the European at reassuring European fi rms that in- Beijing and Moscow have also The approach, it said, could ensure European Economic and Monetary Aff airs Commissioner Olli Rehn addresses a Union to Iran’s central bank,” said the vested in Iran after the deal. stepped up eff orts to save the deal. Tehran receives its oil-related rev- news conference in Brussels yesterday. The EC said yesterday it “launched the EU off icial, who is directly involved in “The blocking statute forbids EU Tehran has warned it is ready to enues if US sanctions target EU fi rms formal process to activate the blocking statute by updating the list of US sanctions the discussions. The US Treasury an- companies from complying with the resume no-holds-barred “industri- active in oil transactions with Iran. on Iran falling within its scope.” nounced on Tuesday more sanctions on off icials of the Iranian central bank, including Governor Valiollah Seif. But the EU off icial said the bloc believes that does not sanction the central bank itself. European Energy Commissioner Miguel Arias Canete will discuss the BP chief sees shale, Opec cooling oil markets idea with Iranian off icials in Tehran during his trip this weekend, the EU off icial said. Then it will be up to EU Reuters (bpd) as a result of US sanctions, healthy. “Two years ago, when governments to take a final decision. London the CEO said, citing internal BP the price was $27, it was great for EU leaders in Sofia this week forecasts. global growth, the engines of the committed to uphold Europe’s side Dudley said he expected the consuming economies, but it was of the 2015 nuclear deal, which off ers P chief executive Bob Dud- fi gure to be “at the lower end” of terrible for producing countries sanctions relief in return for Tehran ley expects a fl ood of US the range. and that led to producing coun- shutting down its capacity, under strict Bshale and the reopening of The 30% recovery in crude tries not being able to purchase surveillance by the UN nuclear watch- Opec taps to cool the oil market prices since February has given things as well. That was not a dog, to stockpile enriched uranium for after crude rose above $80 a bar- strong tailwind to oil companies healthy price.” a possible atomic bomb. rel this week. such as BP, whose profi ts recov- “I think when you get above Other measures included renewing US President Donald Trump’s ered last year after a three-year $80, it is not a healthy price ei- a sanctions-blocking measure to pro- decision to exit an international slump in the market. ther.” Although the International tect European businesses in Iran. nuclear deal with Iran and revive The US Energy Informa- Energy Agency this week cut its The Commission said in a statement sanctions on the Opec member tion Administration this month outlook for oil demand growth in it had “launched the formal process country, as well as Venezuela’s boosted its forecast of growth 2018 due to rising crude prices, to activate the Blocking Statute by plummeting output, has helped in domestic crude production BP still expects consumption to updating the list of US sanctions on to lift oil prices to their highest in 2018 to an all-time high of expand by 1.7mn bpd, extending Iran falling within its scope,” referring since 2014. 11.17mn bpd, as shale drillers ac- a period of strong growth. to an EU regulation from 1996. But BP sees oil falling to be- celerate activity. The world has experienced an The EU’s blocking statute bans any EU tween $50 and $65 a barrel due to The surge in US output has unprecedented decade of eco- company from complying with US sanc- surging shale output and Opec’s been off set by deep supply cuts nomic growth that is likely to tions and does not recognise any court capacity to boost production, for over a year by Opec and other continue even with sanctions rulings that enforce American penalties. Dudley told Reuters. producers including Russia. and trade tensions between the It was developed when the United States “Clearly the withdrawal of the Opec’s de facto leader, Saudi United States and China, Dudley tried to penalise foreign companies trad- United States from the Iran nu- Arabia, assured key consumers said. ing with Cuba in the 1990s, but has never clear deal has brought a lot of un- that the world would have ad- “We’re about to begin to see been formally implemented. EU off icials certainty to the market,” he said equate supplies even if Iran’s ex- political factors creating trade say they are revamping the blocking in an interview. ports dropped sharply. dislocations, sanctions and statute to protect EU companies against Crude exports from Iran, the Markets have so far been able things like that. They will have US Iran-related sanctions, after the expiry third-largest member of the Or- to absorb oil’s rise without im- impacts here and there but the of 90- and 180-day wind-down periods ganisation of the Petroleum Ex- pacting demand growth, but overall economic growth rates that allow companies to quit the country Dudley: BP sees oil falling to between $50 and $65 a barrel due to surging shale output and porting Countries, could drop by Dudley said a sustained crude appear to be not overheated,” he and avoid fines. Opec’s capacity to boost production. 300,000 to 1mn barrels per day price of over $80 would be un- said. Gulf Times 2 Saturday, May 19, 2018 BUSINESS

Debt-laden China denies it off ered $200bn RCom in advanced package to slash US trade gap talks with

Reuters Ericsson Beijing to resolve hina denied yesterday that it had off ered a package to slash the US Ctrade defi cit by up to $200bn, disputes hours after it dropped an anti-dumping probe into US sorghum imports in a conciliatory gesture as top negotiators Reuters meet in Washington. Mumbai US offi cials had said on Thursday that China was proposing trade con- cessions and increased purchases of eliance Communications American goods aimed at cutting the said it was in advanced US trade defi cit with China by up to Rtalks with Ericsson to $200bn a year. resolve “commercial issues”, “This rumour is not true. This I can after two sources indicated it confi rm to you,” Chinese foreign min- was currently uncertain if the istry spokesman Lu Kang told a regular firms’ discussions over dues news briefi ng. would lead to an out-of-court “As I understand, the relevant con- settlement. sultations are ongoing and they are Earlier this week, India’s constructive,” he said, adding that he bankruptcy court admitted a could not elaborate on the specifi cs of plea by the Swedish telecom the negotiations. gearmaker seeking insolvency Chinese Vice Premier Liu He is in resolution against debt-laden Washington this week for talks with US Reliance Communications offi cials led by US Treasury Secretary (RCom) over unpaid service Steven Mnuchin aimed at heading off a dues, potentially derailing the trade war between the world’s two big- company’s plans to sell assets gest economies. to larger rival Reliance Jio. Earlier yesterday, China announced Ericsson, which signed a that it was ending its sorghum inves- seven-year deal in 2014 to op- tigation, which had eff ectively halted a erate and manage RCom’s na- trade worth roughly $1.1bn last year and tionwide telecoms network, roiled global grain markets and spurred is seeking Rs11.55bn ($170mn) worries about rising costs domestically. from RCom and two of its sub- The United States is China’s domi- sidiaries. nant source of imported sorghum, a “We confirm that RCom and product grown in states such as Texas Ericsson are at an advanced and Kansas that lean towards Trump’s stage of discussions to expedi- Republican party, whose Congressional tiously resolve commercial is- majorities are under threat in mid-term sues,” the Indian company said elections in November. in a securities filing yesterday, Explaining the dropping of the sor- US President Donald Trump holds a signed memorandum on intellectual property tariff s on high-tech goods from China at the White House in Washington (file). Trump adding a resolution would en- ghum investigation, China’s com- has threatened to impose tariff s on up to $150bn of Chinese goods to combat what he says is Beijing’s misappropriation of US technology through joint venture able it to exit the bankruptcy merce ministry said it “would have a requirements and other policies. court process. widespread impact on consumer liv- RCom is also confident of ing costs, and does not accord with the The US goods defi cit was $375bn last the meetings as part of “ongoing trade tonnes of sorghum to China in 2017, halting its anti-dumping investiga- “expeditiously” proceeding on public interest”. year. discussions” and said Trump met the worth about $1.1bn, accounting for the tion into sorghum imports, but it is a its asset sale deal agreed with Getting to a $200bn reduction of the One US source said earlier that US Chinese delegation led by Liu and the bulk of Chinese imports of the grain cheap way of showing goodwill as the Jio and the overall debt resolu- US-China trade defi cit on a sustainable aircraft maker Boeing Co would be a US team led by Mnuchin. used in animal feed and Chinese liquor. US doesn’t have much sorghum left to tion plan agreed with its credi- basis would require a massive change in major benefi ciary of the Chinese off er “The United States offi cials conveyed In April, China forced US sorghum export. tor banks, it said in the state- the composition of commerce between to narrow the trade gap if Trump were the president’s clear goal for a fair trad- exporters to put up a 178.6% deposit The next US sorghum crop will be ment. One of the two sources the two, and the news from the uniden- to accept it. ing relationship with China,” the White on the value of sorghum shipments to harvested in August,” Houe said. who spoke to Reuters earlier tifi ed US offi cials in Washington had Boeing is the largest US exporter and House said. the country after launching an inves- Trump has threatened to impose tar- yesterday said RCom had ap- been met with scepticism from econo- already sells about a quarter of its com- That top-line number in the reported tigation in February following Trump’s iff s on up to $150bn of Chinese goods to proached Ericsson, but with a mists. mercial aircraft to Chinese customers. Chinese off er would largely match a re- imposition of steep tariff s on imports of combat what he says is Beijing’s misap- lack of clarity around payment “That’s an enormous number and it Another person familiar with the quest presented to Chinese offi cials by solar panels and washing machines. propriation of US technology through of dues “a settlement currently suggests that there could be some im- talks had said the package may include Trump administration offi cials in Bei- “China has taught a lesson to the joint venture requirements and other looks uncertain”. pressively ambitious accounting,” said some elimination of Chinese tariff s al- jing two weeks ago. United States and showed how it can policies. The two sources, who asked Scott Mulhauser, a former chief of staff ready in place on about $4bn worth of The two biggest US exports to China hurt US exports,” said Ole Houe, direc- Beijing has threatened equal retali- not to be named as the talks at the US Embassy in Beijing and US US farm products including fruit, nuts, were aircraft at $16bn last year, and tor of advisory services at brokerage ation, including tariff s on some of its are private, said Ericsson Export-Import Bank offi cial who now pork, wine – and sorghum. soybeans, at $12bn. IKON Commodities in Sydney. largest US imports, including aircraft, could withdraw its plea if an advises companies on trade. A White House statement described The United States shipped 4.76mn “Now they are showing goodwill by soybeans and autos. out-of-court understanding is reached. Ericsson said it does not comment on speculation. Japan, EU unfurl reprisals against Trump tariffs Shares in RCom, controlled by wealthy businessman Anil Ambani, had soared 30% on AFP considering the impact on Japanese also allies, including EU countries as well rid North Korea of nuclear weapons. reserving the right to inflict the counter reports of settlement talks with Tokyo companies as well as related US meas- as Japan. Marking a departure from a Ahead of a summit with Abe in April, measures while also dangling promises Ericsson, but reversed gains to ures.” decades-long US-led drive for open and Trump tweeted that Japan “has hit us to open trade talks if the US should trade down 2.7% by 0920 GMT. The European Union has made it clear free trade, Trump has claimed that mas- hard on trade for years”. change course. The Mumbai market was US key allies Japan and the EU notified that it does not for now intend to use the sive flows of imports to the United States Japan has warned the tariff s “could EU leaders on Wednesday agreed to down 0.7%. the World Trade Organisation yesterday counter-measures, but that the notifica- threatened national security. have a grave impact on the economic discuss a limited trade accord with Wash- With debt totalling of a wave of retaliatory measures against tion leaves all options on the table as a While Washington has granted Europe relationship” between the world’s first ington and pledged to explore opening Rs457.33bn ($6.73bn) at end- US tariff s on steel and aluminium, raising June 1 deadline to stop the US adminis- and other allies a delay until the end of and third-largest economies. up the European market to US natural March 2017, RCom is the most- the prospects of a trade war. tration’s tariff s approaches. the month from imposing the controver- Exports of steel and aluminium prod- gas – if a permanent exemption is won. leveraged of all listed telecoms Japan informed the WTO it had the The list drawn up by the European sial levies, Japan remains on the list of ucts to the US came to some ¥200bn The pledge came despite Trump carriers in India. right to impose tariffs on US goods Commission, the EU’s executive arm, countries facing the tariff s. last year. further flustering the Europeans last To raise funds, RCom an- worth ¥50bn ($451mn) – equivalent includes tariff s on peanut butter, mo- China has already taken retaliatory For decades into the 1990s, the two week, pulling Washington out of the 2015 nounced plans late last year to to the impact of the US tariffs newly torcycles and denim jeans, in case US measures but Japan had taken a concilia- countries battled over their trade flows, international deal with Iran to curb its sell most of its wireless assets imposed on Japanese metal products, President Donald Trump slapped on the tory approach, attempting to win exemp- but the balance has become less of a hot- nuclear programme. to mobile carrier Reliance Jio in the foreign ministry said in a state- tariff s. tions through dialogue. button issue under recent US administra- Europe exports around €5bn ($4bn) a deal sources said was worth ment. Trump sparked fears of a trade war in The trade row has cast clouds over tions, with China’s trade surplus a greater worth of steel and a billion euros worth about $3.8bn. Jio, the telecoms But the ministry stopped short of March when he decided to impose 25% the relationship between Prime Minister concern for Washington. of aluminium to the United States each venture of Reliance Industries, indicating when Tokyo might take action, tariff s on steel and 10% on aluminium Shinzo Abe and Trump, who have forged The Europeans have blown hot and year, and the commission estimates is controlled by India’s richest saying: “We plan to decide appropriately, imports, primarily to target China, but otherwise close ties pledging together to cold against the Trump administration, Trump’s tariff s could cost some €2.8bn. man and Anil’s elder brother, Mukesh Ambani.

Top executive behind Coal-reliant Philippines struggles to power up clean energy Thomson Reuters Foundation tax reforms passed last year to help fund a the Thomson Reuters Foundation. But the then produces power at extremely low Lamao, Philippines major infrastructure project – could change cost of electricity generated from solar and cost – can be a struggle for investors with Baidu’s AI drive quits that, environmental experts say. wind has plunged in recent years, and costs short-term aims, or for risk-averse inves- “Globally, coal is a sunset industry,” Anto- will be halved again by 2020 compared tors anxious about trying something new, For Nestor Castro and the other residents nio La Viña, a former environment under- to 2017, according to predictions by the experts say. International investors also u Qi, who oversaw Baidu led to strict new regulations that of Lamao village, which sits near two coal- secretary and veteran climate negotiator, Abu Dhabi-based International Renewable have already poured billions of dollars into Inc’s shift to artifi cial in- gutted the fi rm’s ad revenue. fired power plants and an oil refinery, the told the Thomson Reuters Foundation in a Energy Agency. the Philippines’ coal industry, helping it to Ltelligence (AI) after a dam- Baidu, which saw revenue country’s shift to renewable energy cannot phone interview. “It is just being propped Solar Philippines, Southeast Asia’s larg- thrive, climate activists said. aging ad scandal in 2016, is step- growth stall for several quarters come soon enough. up by subsidies, and is the only reason it is est solar company, is off ering to produce The Philippines government privatised ping down as chief operating following the new rules, has since Not only would it lessen the pollution in cheap in the Philippines. solar electricity for about 6 cents a the country’s power industry in 2001, say- offi cer, China’s biggest search regained momentum after closing their village in the northern Philippines, it The coal tax signals to investors that kilowatt-hour for Meralco – the largest elec- ing the move would help bring more aff ord- engine said yesterday. or selling loss-making units and could also mean cheaper electricity, Castro they should invest in other (energy) sourc- trical distributor in the country – and other able and reliable electricity. Lu, a former Microsoft ex- funnelling resources into its AI said. “Coal just adds to the pollution and es because coal is no longer the preferred electricity companies, said Koji Bulahan, a Coal, seen as a cheaper alternative to oil ecutive and AI expert who joined and autonomous driving units. AI we... have expensive electricity,” he told the energy source in the country,” he added. spokesman for Solar Philippines. at the time, became the country’s energy of Baidu in late 2016, is currently projects overseen by Lu, includ- Thomson Reuters Foundation. The Philippines imports 75% of its coal, That is about 40% less than Meralco choice. And because many coal plants have responsible for day-to-day op- ing enhancements to the fi rm’s But the country’s first tax hike on coal in mostly from Indonesia and Australia, ac- charges on average for a kilowatt hour of a lifespan of 30 years or more, investors in erations in its AI unit, which has news feed product, have begun to 30 years, introduced in March, may signal a cording to the Philippines-based Institute power primarily generated from coal, ac- those plants are still demanding a payback become the company’s core fo- reap dividends for the fi rm, whose shift in the government’s attitude towards for Climate and Sustainable Cities (ICSC). cording to the latest rates published on the on investment. cus in the past year. stock is up more than 19% since the fossil fuel, environmentalists say. Some off icials say coal is needed to company’s website. The Philippines, however, still has plans He will remain vice chair- the beginning of the year. Today, the Philippines has some of power the nation’s growth, including the A shift to renewable energy has been for more than 10,000MW of new coal man of Baidu and vice president “In the future, while being with the highest power generation charges in government’s centrepiece push to build held back by the country’s major energy power in the pipeline, worth $20.8bn, ac- Wang Haifeng will now oversee and taking care of my family, I will Southeast Asia according to the country’s new roads, airports and mass transit companies, said Glenis Balangue, a senior cording to a study published by the ICSC the company’s AI projects, Baidu continue to fi rmly support Baidu energy agency. systems. “We need a continuous and stable researcher at IBON Foundation, a think and the Institute for Energy Economics And said in a social media posting, and (chief executive) Robin Li. I Renewable energy costs are falling supply of electricity, and coal is the most tank based in Quezon City. Financial Analysis last year. adding Lu was stepping back for will also pay attention to China- around the globe, but the Philippines, up stable source of energy,” said Chris- “If our power generation policy still fa- But international eff orts to address “personal and family reasons.” US research and investment,” said to now, has shown few signs of moving tine Danao, head of power, energy and vours corporations that are only interested climate change – including a potential flight Lu is viewed as a top fi gure in Lu in a statement. away from coal, despite ratifying the electrification at the National Economic in their bottom line, we can never truly of investor capital from dirtier fuels and the the global AI industry, and joined Lu is the latest in a series of Paris Agreement to curb climate change Development Authority. “In terms of fuel, push for renewable energy,” Balangue said. rise of ever-cheaper renewable alterna- Baidu at a time when the com- high-profi le AI experts to leave and passing laws pushing for a shift to coal is still the cheapest. In the long run, The high upfront costs of many forms tives – could mean that coal investment will pany was rebuilding investor the company in the past year, renewable energy. The 400% tax hike on the government will see what (renewable of renewable energy – which require not deliver the expected returns, the study confi dence after a medical scan- amid fi erce global competition imported coal – part of a wider package of energy) technology will bring,” she told installation of expensive equipment, which noted. dal linked to its search business for talent in the fi eld. Gulf Times Saturday, May 19, 2018 3 BUSINESS

True Corp skips $3.5bn Thai BoJ infl ation target recedes as spectrum auction consumers resist price rises Reuters Bangkok Reuters Tokyo

Thai mobile operator True Corp announced it won’t bid for new apan’s core consumer price growth spectrum being off ered by the slowed in April for a second straight Southeast nation in an auction Jmonth, showing little of the infl a- worth up to $3.5bn, assuaging tionary momentum needed to reach the investor concerns over its po- central bank’s elusive 2% target. tential spending and sparking a The weakness in April infl ation is surge in its shares. particularly unwelcome for the Bank The move by True, Thai- of Japan, which had hoped companies land’s second largest mobile would rush to hike prices at the start of operator, could make it easier a new business year. for smaller rival Total Access The slowdown, which came in the Communications (DTAC) to win wake of first-quarter data showing much needed spectrum, some the economy may have reached its analysts said, causing its shares peak, could discourage BoJ policy- to jump. makers from signalling their intention True, part of CP Group, which to end its ultra-easy monetary policy, is owned by Thai billionaire analysts say. Dhanin Chearavanont, said “The broad-based moderation in yesterday it will pass up on price pressures in April underlines that bidding for 1800-megahertz the Bank of Japan won’t be able to tight- (MHz) spectrum in the auction en monetary policy anytime soon,” said scheduled for August, calling Marcel Thieliant, senior Japan econo- the terms onerous. mist at Capital Economics. “From examining the details “We expect GDP growth to slow and terms in the auction docu- this year which suggests that capacity ments, the price and regulations shortages won’t intensify any further.” do not significantly benefit the The core consumer price index, which auction winner,” True said in a includes oil products but excludes vola- statement, adding it has suff i- tile fresh food costs, rose 0.7% in April cient frequencies in its portfolio from a year earlier, slightly less than a to support its growth plans. median market forecast for a 0.8% rise. Thailand, in its first spectrum It followed a 0.9% gain in March, auction since 2015, is putting marking the second straight month of up three 15-MHz licences under slowdown, despite recent gains in oil the 1800Mhz spectrum, with prices that pushed up electricity and a reserve price of 37.5bn baht gasoline bills. ($1.17bn) each. The pace of increase in the core-core The licences have a 15-year CPI, an index closely watched by the Shoppers are seen at a supermarket in Tokyo. Japan’s core consumer price growth slowed in April for a second straight month, showing little of the inflationary lifetime. True Corp shares rose BoJ that strips away the impact of fresh momentum needed to reach the central bank’s elusive 2% target. as much as 8.1% yesterday after food and energy costs, slowed to 0.4% its announcement, before end- from 0.5% in March. retailers with acutely cost-conscious “The economy isn’t necessarily do- “Price rises for non-energy goods of the economy hitting a plateau could ing the day 5.9% higher. Processed food prices rose 1.1% in customers. Fast food operator Yoshi- ing that well,” said Soichi Okazaki, will likely remain slow, so we can’t ex- further push back market expectations “Investors have positive April from a year earlier, the same rate noya Holdings Co has said it has no president of retail giant Aeon Co Ltd. pect core CPI to accelerate much,” he of an exit from easy monetary policy. sentiment for True not making of increase as March, a sign few fi rms plans to raise the price of its famed beef While recent rises in oil costs may said, adding that core consumer infl a- The BoJ last month dropped a time- an expensive investment,” said took the start of a new business year as bowl dish this year despite rising labour underpin price growth, analysts expect tion will likely hover below 1% for the frame for hitting its price goal and gov- Pisut Ngamvijitvong, an analyst an opportunity to pass rising costs on to costs, having suff ered a decline in sales infl ation to fall short of the BoJ’s goal in time being. ernor Haruhiko Kuroda has conceded at Kasikorn Securities. consumers. after a price hike in 2014. coming years given slow wage growth Japan’s economy contracted more that pushing up infl ation expectations Shares of Thailand’s third- The ratio of goods that saw prices Torikizoku Co Ltd continues to see and weak consumption. than expected at the start of this year, would take time. ranked mobile operator DTAC, rise stood at 53.9% in April, roughly un- customer numbers fall since it raised “Companies remain cautious of rais- suggesting growth has peaked after the Almost half the economists polled by which is 43% owned by Nor- changed from March. the price of its grilled chicken skewers ing prices,” said Yoshiki Shinke, chief best run of expansion in decades. Reuters this month do not expect the way’s Telenor Group, surged as The pressure to keep prices down is last October for the fi rst time in nearly economist at Dai-ichi Life Research In- While analysts expect growth to re- BoJ to change its ultra-easy policy until much as 7.3%. particularly strong for mass-market 30 years. stitute. bound in the current quarter, any sign 2020 or later, given sluggish infl ation. Just a day earlier, DTAC had said it was considering bidding in the auction. It had earlier criticised the terms of the auction, calling them “out of step” with industry Singapore Airlines to absorb regional wing after upgrade needs, but some analysts said it needed the spectrum as its current spectrum licence is set AFP year transformation programme in a to expire in September. Singapore bid fend off competition and defend its Ratings agency Fitch has reputation as one of the world’s leading said securing the 1800-Mhz airlines. spectrum was “crucial” for DTAC ingapore Airlines said yesterday SIA said Thursday the transforma- because the company had lost it will absorb its struggling pre- tion has started to bear fruit, with group market share due to spectrum Smium wing SilkAir following a net profi t climbing 148% to Sg$893mn inferiority. multimillion-dollar upgrade as part of a in the year ended March 31. With True vacating the field, reform drive to stay competitive. But SilkAir, a full-fare carrier that DTAC’s chances of winning The move comes after the fi rm, fac- fl ies largely to holiday spots across Asia, spectrum have improved, ing tough rivalry in the high-end mar- turned in the weakest performance in boosting its shares, said some ket from other full-service airlines and the group with operating profi t tum- analysts. in economy class from budget carriers, bling 57% to Sg$43mn. “DTAC could be the sole last year consolidated its low-cost units The merger “should have been done bidder in August,” said Pisut of TigerAir and Scoot into a single entity years ago because SilkAir has always Kasikorn Securities. in a streamlining exercise. been the weakest link within the SIA Thailand’s largest mobile SIA said it would stump up more than group”, said Shukor Yusof, an analyst operator Advanced Info Service Sg$100mn (US$74.5mn) on a cabin up- with aviation consultancy Endau Ana- Pcl has not yet said whether it grade for the wholly owned subsidiary, lytics. will bid or not. including new “lie-fl at seats” in busi- Shukor noted that SilkAir was los- Its shares climbed as much ness class and backseat in-fl ight en- ing to the competition because, as a as 2.2% yesterday. tertainment in business and economy premium airline, it charges full fares Some analysts said Friday’s class. The overhaul is expected to start while a host of regional budget carriers gains in shares of the three in 2020 and and the merger will take sell tickets to the same destinations at a mobile operators were also place after a suffi cient number of air- cost a fraction of the cost. partly fuelled by hopes that craft have had their cabins redesigned, “For SIA, the cost of running SilkAir the National Broadcasting and the fi rm added. is very expensive,” he told AFP. Telecommunications Com- Yesterday’s announcement “is a sig- “As a full-fare airline, fl ying to a mission (NBTC), which set the nifi cant development to provide more niche resort destination is a very dif- auction terms, will ease them growth opportunities and prepare the fi cult market to make money from be- after True’s exit to facilitate a group for an even stronger future”, SIA cause the market these days is focused competitive process. A SilkAir plane sits beside a Singapore Airlines aircraft at Changi Airport in Singapore. SIA said yesterday it will absorb its chief executive Goh Choon Phong. on carriers off ering cheap fares. It’s all struggling premium wing SilkAir following a multimillion-dollar upgrade as part of a reform drive to stay competitive. Last year it embarked on a three- about costs.” Toyota plans to roll into China’s EV market in GAC Motor vehicle

Reuters ment for two years. Selling a car derived from acceptable quality,” Cai said. He added that Beijing a Chinese partner’s vehicle would have been the GS4 ranked No 1 among Chinese brands unthinkable just a few years ago. But the idea and No 3 among all brands for initial quality gained momentum at Toyota because of the in the compact SUV category. oyota Motor Corp is taking an unprec- Chinese government’s push to get more electric One question, however, is GAC cars’ long- edented route to meet China’s strin- vehicles on the road, the executives said. er-term reliability and dependability, Cai Tgent green car quotas: its showrooms The government mandates have spurred said. Under the new Chinese regulations tak- will sell an electric vehicle without the Japa- other new alliances, such as Ford Motor Co’s ing eff ect next year, carmakers must amass nese company’s distinctive triple-oval logo. agreement to develop electric vehicles with credits for so-called new-energy vehicles Instead, it will feature the label of GAC Zotye Automobile Co. Ford is waiting for equivalent to 10% of annual sales by 2019. Motor, Toyota’s Chinese partner, and will be regulatory approval for its partnership, which That level rises to 12% for 2020. built around GAC’s lower-cost technology. calls for designing and manufacturing several New-energy vehicles are defi ned as all- The move – a fi rst for Toyota – will give jointly developed no-frills EVs and selling electric battery and plug-in electric hybrid GAC access to the Japanese carmaker’s strin- them through a new China-only brand. cars. Although the ix4 gives Toyota a cheaper gent quality control, prestige and sales chan- It wasn’t immediately clear which parts of and quicker way to meet the quota, it also nel. For Toyota, it presents a quick way to the ix4 Toyota would provide, or which com- shows the company’s anxiety about getting meet Beijing’s requirements that such vehi- pany’s design standards were used. a toehold in the Chinese EV market before its cles represent 10% of an auto manufacturer’s Quality experts say GAC cars rate relatively own all-battery vehicle is available in 2020, production by 2019. high. According to Jeff Cai, a Beijing-based industry offi cials and experts said. According to two company executives famil- senior director at JD Power & Associates, “It’s a creative solution to a critical issue iar with the matter, Toyota plans to start selling some of GAC’s cars, such as the Trumpchi all automakers face in China: how to meet A man stands in front of Trumpchi GS4 from GAC Group displayed at the Shanghai Auto Show. Toyota the GAC Toyota ix4 by the end of the year. The GS8 corssover SUV, already stack up well the strict production quotas for electric cars,” Motor is taking an unprecedented route to meet China’s stringent green car quotas: its showrooms will car is a battery-powered compact SUV based on head-to-head with vehicles marketed by glo- said James Chao, Shanghai-based Asia-Pa- sell an electric vehicle without the Japanese company’s distinctive triple-oval logo. GAC’s Trumpchi GS4, and has been in develop- bal automakers. “The GS4 is a good car with cifi c head of consultancy IHS Markit. Gulf Times 4 Saturday, May 19, 2018 BUSINESS

China local govt firm fails to repay $629mn loans in rare default

Reuters risks without destabilising the economy or But this case is diff erent, the government well as the pricing or the implicit (off icial) bond early, in December 2017. Chinese barring local governments from providing Beijing the country’s financial markets. is very firm it wouldn’t be able to pay back,” support for the rest of the state-owned regulators are in the third year of a cam- guarantees for the debt. Local governments are the bedrock of one of the sources said. enterprise sectors in that region.” paign to clamp down on riskier lending The first known default this year was by a China’s economy, accounting for around Global credit rating agency Standard & Xilinhot Geipaishui had borrowed on practices. Yunnan state-owned investment company A firm controlled by a city government in 90% of its total public spending. Poor’s had predicted in January that China behalf of the local government to fund The so-called shadow banking sector has which later received capital from the prov- China’s Inner Mongolia region has failed to Xilinhot Geipaishui Co, a local govern- could see the first default on a bond issued infrastructure construction, the sources been a particular headache, being a source ince to repay a loan. make interest and principal payments on ment financing vehicle (LGFV) controlled by by an LGFV this year. said, declining to be identified. of off -balance sheet loans for local govern- Earlier this month, the creditor of a nearly 4bn yuan ($629mn) in off -balance the city of Xilinhot, has failed to repay loans But Christopher Lee, an S&P credit The companies involved have held ments and their LGFVs. property firm owned by the Tianjin mu- sheet loans, two sources with direct knowl- from more than 20 mostly state-run leasing analyst in Hong Kong, said yesterday it several rounds of talks with local off icials Local governments have used the enti- nicipal government said the company had edge of the matter said. firms, said the sources, who were from two was too early to tell if this case was such but have yet to break the deadlock. ties to raise funds for projects from water defaulted on two trust loans. The rare loan default highlights growing of the leasing companies involved. a watershed moment until there is more Off icials have insisted on rolling over the works to roads and boost economic growth. More corporate defaults had already funding strains on Chinese local govern- The firm is technically in default after information. loans for another year as the city struggles But amid Beijing’s risk drive, financing to been expected in China this year as the ments as Beijing cracks down on riskier missing payments on both the interest and “I’m not surprised because we’ve been to raise revenue, the sources said. “The LGFVs is shrinking and some are struggling government’s continues its risk campaign. types of financing and rising debt, which principal for more than one month, the talking about this for a while now, (but) government’s argument is that only interest with their debt obligations. “The deleveraging drive will continue some outside agencies have warned could sources said. is it really a default or a sort of delayed will be paid,” one added. Outstanding local government debt at but the intensity could moderate, as the lead to a banking crisis. The city government north of Beijing payment, where the government will come Data from the Shanghai Stock Exchange end-April was 16.6tn yuan, up 0.9% from the credit squeeze has driven up interest rates,” Analysts say off icials have stepped in declined comment. back in a few days and help this company shows the company repaid the principal end of 2017. said Li Huijie, head of research at Pengyuan repeatedly recently to steer government- “Sometimes payments are late by a week repay?” Lee said. on two bonds worth a total of 150mn yuan To defuse such risks, Beijing decided to Credit Rating in Beijing. linked firms which appeared on the brink of or two, we wouldn’t consider it a break “It will be serious when a bond default by that matured in February and April this “open the front door and close the back “Local governments need to ensure no default, highlighting the balancing act Chi- of contract or even wouldn’t charge any an LGFV happens, because it would aff ect year. The coupon on those bonds was 9%. door” by allowing local governments to sell first LGFV bond default this year that could nese leaders are facing as they try to rein in penalty. the funding access of that government as It repaid the principal on the February bonds while restricting their borrowing by trigger systemic risks,” he said.

ESR-REIT Inheriting slowing economy, to buy rival Viva Mahathir makes tax changes Industrial Trust Reuters Kuala Lumpur Reuters Singapore alaysia’s annual economic growth slowed to 5.4% in the Mfi rst quarter of 2018, leaving SR-REIT will buy rival the country’s new government with the Viva Industrial Trust in a task of turning around an economy that Eproposed deal valued at has decelerated for two consecutive S$936.7mn, marking the fi rst quarters. consolidation among Singa- Releasing the latest gross domestic pore’s crowded mid-cap real es- product data on Thursday, the central tate investment trusts. bank said domestic demand would help The proposed merger will cre- growth stay favourable, though the Jan- ate the fourth largest industrial uary-March performance was below a REIT in Singapore with about median forecast of 5.5% given by a Reu- S$3bn ($2.23bn) in assets, the ters survey of economists. two fi rms said in a joint state- The slowdown comes amid uncer- ment yesterday. tainty over economic policies of the Under deal terms, Viva secu- new administration of 92-year-old rity holders will receive S$0.96 Mahathir Mohamad, who led an op- per stapled security, which will position alliance to a surprise win over be paid 10% in cash and 90% his scandal-tainted former protege through the issue of new ESR- Najib Razak and a Barisan Nasional REIT units. The proposed deal coalition that had led the country for represents an 8% premium to six decades. Viva’s closing price on Thursday. Regarded as the architect of modern Talks have been ongoing for Malaysia, Mahathir retired in 2003 af- months as ESR-REIT, which is ter leading the country for 22 years, but backed by Asian logistics devel- he returned to upset the country’s tra- oper e-Shang Redwood (ESR) – a ditional political order by allying with venture of private equity fi rm old foe, opposition leader Anwar Ibra- Warburg Pincus and global inves- him, having become angered by Najib’s tors, saying in January its manager alleged corruption. submitted a proposal to merge it For all the scandals, Najib oversaw an with Viva. The property portfo- economy that put in its best perform- lio of both companies comprise ance in three years in 2017, but growth general industrial, logistics, ware- has decelerated from 5.9% in the fourth houses and business parks. quarter of 2017 and from 6.2% in the Analysts say Singapore’s in- third quarter, when it made its strong- dustrial REITs sector is ripe for est showing in three years. consolidation as it is crowded During his first week back in of- Mahathir: The architect of modern Malaysia. with smaller companies fi nding it fice, Mahathir has announced moves challenging to grow in the last few to effectively scrap a goods and serv- for the economy unless adjustments ics said in a research note. Former prime too early to say by how much. The cen- and global demand,” Muhammad told years. “Size does matter in REITs,” ices tax (GST) – a significant source were made to off set the impact. But, minister Najib had pushed a fi scal con- tral bank projected headline infl ation reporters. The central bank said fi rst said Adrian Chui, chief execu- of government revenue, reintroduce a on Thursday, Mahathir told Malaysians solidation strategy when he fi rst took averaging 2-3% in 2018, up from 1.8% quarter growth was propped up by ex- tive offi cer of ESR-REIT, adding sales tax, and review various projects not to worry as his administration was the reins in 2009, slashing the budget in the fi rst quarter. panding private sector activity and the deal will help create a sizeable signed off by the previous govern- already cutting back on spending. shortfall by half from 6.7% that year to Monetary policy would remain ac- strong support from exports. and more liquid REIT, backed by a ment. “At the same time, we will earn more 3% in 2017. commodative, the governor said, add- Net exports saw a sharp rebound, strong developer-sponsor. Mahathir has also promised to re- from petroleum, because the budget “It is only a matter of time before the ing that it’s premature to judge how the expanding 62.4% annually in the fi rst It remained open to evaluating introduce fuel subsidies, adding to con- was made when it was $50 (a barrel) and government will come under pressure new government’s policies would eff ect quarter compared to a 1.9% contraction more partnerships, he said. cerns that populist policies could hurt now it’s $70,” Mahathir said at a news to close the gap, suggesting a fi scal con- economic growth. in the October-December period. Trading in units of both ESR- economic growth and weaken the gov- conference. solidation later down the line,” Capital “Although 5.4% is slightly lower than Other data released on Thursday REIT, which has a market capi- ernment’s fi scal strength. The decision to scrap GST is expected Economics said. offi cial projection of 5.5-6% (growth in showed Malaysia’s current account sur- talisation of about S$830mn Ratings agency Moody’s said the to give the economy a fi scal boost, but Bank Negara Malaysia Governor Mu- 2018), GDP growth is expected to re- plus increased to 15bn ringgit ($3.78bn) ($618mn), and Viva, valued at new government’s election campaign likely cause a 1% increase to the govern- hammad Ibrahim said that scrapping main favourable going forward, driven in the fi rst quarter from 13.9bn ringgit about S$865mn, were halted promises would be “credit negative” ment’s budget defi cit, Capital Econom- GST would impact infl ation, but it was by continued strength in domestic in the previous three months. ahead of the news.

Vietnam set to tighten clamps on Facebook and Google, threatening dissidents

Reuters healthy dialogue” that focused mostly on complied with a majority of the requests. Hanoi/Singapore how Vietnam can leverage the next stages The transparency reports do show that of the digital revolution. the companies don’t automatically do the But he said there was no discussion of bidding of the government. A struggle over Internet laws in Vietnam is content restrictions. Facebook said it had received 12 pitting a government keen on maintain- The Vietnamese government did not government requests for Facebook user ing tight control against US technology respond to a request from Reuters for account data in 2017 and complied with companies trying to fight off onerous new comment for this article. only 4 of them, all of which were “emer- rules – with the country’s online dissidents Political activists in Vietnam rely on gency” requests. The company defines an among the biggest losers. social media to rally support, and the new emergency as involving “imminent risk of The latest conflict centres on new cyber law comes on the heels of an April serious physical injury or death.” cybersecurity legislation set for a vote by letter from more than 50 rights groups In cases where content is alleged to Vietnamese lawmakers later this month. and activists to Facebook chief executive violate local law, both companies say It aims to impose new legal require- Mark Zuckerberg accusing the company takedown requests are subject to legal ments on Internet companies, and hard- of working too closely with the Vietnam- review, and when they comply the mate- ens policing of online dissent. ese government to stifle dissent. rial is only blocked locally. Facebook, Google and other global Facebook and Google say they have Direct government censorship requests companies are pushing back hard against to abide by local laws in the countries don’t tell the whole story though. provisions that would require them to where they operate. Facebook’s latest Facebook also removes content and store data on Vietnamese users locally “transparency report,” released Tuesday, blocks accounts for violating its own and open off ices in the country. shows that in the second half of last year, global “community standards,” which bar But they have not taken the same the company began blocking content in material and behaviours ranging from tough stance on parts of the proposed Rights activist Le Van Dung (right) in a coff ee shop in Hanoi. “My account was blocked for 8 months,” said Dung, an Vietnam for violations of local law for the posting pornography to hate speech and law that would bolster the government’s independent journalist in Vietnam who signed the letter to Zuckerberg. “I sent letters to Facebook management for first time. inciting violence. crackdown on online political activism. months but there’s only an automatic reply saying they have completed your request,” he added. The company reported 22 such instanc- “The first thing we do when a govern- Vietnam off ers a case study in the con- es – though it said they were prompted ment tells us about content that violates flicting pressures the likes of Facebook across Southeast Asia, where the enor- for Facebook and Google because most Vietnamese Prime Minister Nguyen Xuan by “private reports of defamation” rather laws is we look at whether it violates and Google confront when operating in mous popularity of Facebook and Google Internet users in China are blocked from Phuc and other top government off icials than direct government requests. Google our standards,” said Monika Bickert, countries with repressive governments. has created lucrative business opportuni- accessing them. An industry group called when they visited Singapore last month. last year also blocked YouTube videos at Facebook’s vice president of global policy It also shows how authoritarian ties and outlets for political dissent. the Asia Internet Coalition (AIC) is leading The discussions took place as part the request of the government for the first management. regimes try to walk a line in controlling With that, though, has come both eff orts to soften the proposed cyber law of a seminar about Internet issues that time. Updated figures released yesterday The company this week began online information and suppressing politi- government censorship and a way to get in Vietnam. Jeff Paine, managing director included academics, industry off icials and show the company was asked to remove providing data on community standards cal activism without crippling the digital propaganda to large audiences eff iciently. of the AIC, said he and others were able to the high-level Vietnamese delegation, more than 6500 videos in 2017, mostly violations but does not break it down by economy. Such tensions are playing out The region is particularly important raise concerns about the law directly with according to Paine. He said there was “a for criticising the government, and that it country. Gulf Times Saturday, May 19, 2018 5 BUSINESS

DJIA WORLD INDICES Company Name Lt Price % Chg Volume Indices Lt Price Change Dow Jones Indus. Avg 24,720.79 +6.81 Apple Inc 187.25 0.14 10,346,910 S&P 500 Index 2,714.27 -5.86 Microsoft Corp 96.60 0.43 8,540,435 Nasdaq Composite Index 7,365.68 -16.79 Exxon Mobil Corp 81.37 -0.62 4,454,272 S&P/Tsx Composite Index 16,134.99 -8.56 Johnson & Johnson 123.86 0.01 2,311,950 Mexico Bolsa Index 45,433.97 -353.93 General Electric Co 15.00 -0.23 16,677,435 Brazil Bovespa Stock Idx 81,865.52 -1,756.43 Jpmorgan Chase & Co 111.10 -1.65 6,208,262 Ftse 100 Index 7,778.79 -9.18 Procter & Gamble Co/The 73.20 -1.03 3,411,545 Cac 40 Index 5,614.51 -7.41 Walmart Inc 83.66 -0.98 5,634,409 Dax Index 13,077.72 -36.89 Verizon Communications Inc 47.52 -0.69 3,810,360 Ibex 35 Tr 10,112.40 -104.00 Pfizer Inc 35.70 -0.03 6,851,268 Nikkei 225 22,930.36 +91.99 Visa Inc-Class A Shares 129.93 0.00 2,433,605 Japan Topix 1,815.25 +6.88 Chevron Corp 128.08 -1.07 2,154,113 Hang Seng Index 31,047.91 +105.76 Coca-Cola Co/The 42.18 -0.30 5,267,710 All Ordinaries Indx 6,190.90 -6.30 Intel Corp 53.91 -1.65 12,678,491 Nzx All Index 1,539.34 +9.30 Merck & Co. Inc. 59.03 -0.07 5,819,178 Bse Sensex 30 Index 34,848.30 -300.82 Cisco Systems Inc 43.34 -0.29 11,107,141 Nse S&P Cnx Nifty Index 10,596.40 -86.30 Home Depot Inc 187.56 1.20 1,866,919 Straits Times Index 3,529.27 -7.49 Intl Business Machines Corp 144.35 -0.10 1,162,253 Karachi All Share Index 30,397.72 -133.38 Walt Disney Co/The 104.04 -0.29 2,697,241 Jakarta Composite Index 5,783.31 -32.61 Unitedhealth Group Inc 243.95 0.41 829,275 3M Co 199.14 -0.61 1,156,381 Mcdonald’s Corp 160.85 -0.29 1,155,299 Nike Inc -Cl B 71.31 0.51 2,552,347 TOKYO United Technologies Corp 125.01 0.32 770,002 Boeing Co/The 350.89 1.96 2,388,953 Company Name Lt Price % Chg Volume Goldman Sachs Group Inc 237.72 -0.58 1,431,077 Sumitomo Realty & Developmen 4,238.00 -0.52 1,309,000 American Express Co 101.02 -0.20 686,095 Sumitomo Metal Mining Co Ltd 4,610.00 1.47 1,312,900 Caterpillar Inc 155.48 1.17 2,111,118 Orix Corp 1,980.50 0.25 2,823,400 Travelers Cos Inc/The 129.66 -0.81 343,771 Daiwa Securities Group Inc 669.30 0.48 5,316,000 Softbank Group Corp 8,411.00 -0.05 2,533,000 Mizuho Financial Group Inc 202.90 0.20 79,597,500 Central Japan Railway Co 21,995.00 0.71 215,300 FTSE 100 Nitori Holdings Co Ltd 18,500.00 -0.75 229,400 T&D Holdings Inc 1,950.00 2.31 2,975,400 Company Name Lt Price % Chg Volume Toyota Motor Corp 7,571.00 0.21 3,993,500 A trader is seen at the London Stock Exchange. The FTSE 100 lost 0.12% to 7,778.79 points yesterday. Hoya Corp 6,438.00 -0.56 887,100 Wpp Plc 1,325.00 0.08 4,558,929 Sumitomo Mitsui Trust Holdin 4,813.00 0.19 1,329,600 Worldpay Group Plc 0.00 0.00 - Japan Tobacco Inc 3,025.00 -0.49 4,386,700 Wolseley Plc 0.00 0.00 - Osaka Gas Co Ltd 2,396.00 -0.79 1,370,800 Wm Morrison Supermarkets 254.50 -0.04 7,335,970 Sumitomo Electric Industries 1,791.00 1.13 1,768,800 Whitbread Plc 4,159.00 -0.31 588,086 Ono Pharmaceutical Co Ltd 2,734.00 0.83 1,576,100 Vodafone Group Plc 193.18 -1.46 106,289,001 Ajinomoto Co Inc 2,064.50 -0.29 1,819,800 European stock markets lose after United Utilities Group Plc 788.40 0.25 3,052,464 Mitsui Fudosan Co Ltd 2,853.50 -0.05 3,468,900 Unilever Plc 4,138.00 0.91 2,563,771 Daikin Industries Ltd 13,070.00 -0.91 787,300 Tui Ag-Di 1,789.00 -0.80 1,166,238 Toray Industries Inc 953.60 0.25 3,652,900 Travis Perkins Plc 1,306.00 0.50 431,138 Bridgestone Corp 4,564.00 1.24 1,968,000 Tesco Plc 245.80 -0.73 44,845,658 record runs; oil remains near $80 Sony Corp 5,416.00 0.48 5,782,700 Taylor Wimpey Plc 203.50 0.59 15,734,168 Astellas Pharma Inc 1,675.50 0.00 6,799,500 Standard Life Plc 0.00 0.00 - Jxtg Holdings Inc 763.20 3.63 15,609,200 Standard Chartered Plc 750.30 -0.68 5,566,486 Nippon Steel & Sumitomo Meta 2,516.50 0.04 2,767,700 ended at the highest level since 2007. tions of multiple interest rate hikes St James’s Place Plc 1,204.50 0.88 1,122,858 AFP Suzuki Motor Corp 6,380.00 2.99 2,667,200 In trading yesterday, London and the from the US Federal Reserve this year. Sse Plc 1,417.00 0.53 3,502,596 London Nippon Telegraph & Telephone 5,297.00 0.63 2,479,000 two main eurozone markets, Paris and Key US 10-year bond yields are al- Smith & Nephew Plc 1,322.50 -0.38 4,017,970 Sompo Holdings Inc 4,939.00 3.91 1,990,400 Sky Plc 1,355.00 -0.73 2,062,844 Frankfurt, fell slightly. ready at seven-year highs above 3%, Daiwa House Industry Co Ltd 4,197.00 -0.07 1,193,000 Shire Plc 4,199.00 -0.45 2,476,118 enchmark oil contract Brent London’s FTSE 100 lost 0.12% at with the prospect of paying more to Komatsu Ltd 3,767.00 0.72 2,961,800 Severn Trent Plc 2,029.00 0.05 971,214 North Sea held near $80 yester- 7,778.79 points, Frankfurt’s DAX 30 borrow money sending the dollar West Japan Railway Co 7,887.00 0.33 555,300 Schroders Plc 3,442.00 -0.20 282,141 day, while Europe’s main stock was down 0.28% at 13,077.72 and Par- higher. Murata Manufacturing Co Ltd 15,855.00 0.57 654,500 B Sainsbury (J) Plc 305.50 -0.62 16,826,069 Kansai Electric Power Co Inc 1,623.00 0.56 1,555,300 markets took a pause after record runs. is’ CAC 40 was down 0.13% at 5,614.51 Adding to market unease is a tar- Sage Group Plc/The 670.40 0.21 2,637,757 Denso Corp 5,827.00 2.05 1,966,800 Brent went above $80 on Thursday points at close yesterday. iff s spat between the United States Abi Sab Group Holding Ltd 0.00 0.00 - Dai-Ichi Life Holdings Inc 2,307.00 1.21 6,082,400 for the fi rst time in three-and-a-half Joshua Mahony, market analyst at and China, which has raised concerns Rsa Insurance Group Plc 659.00 0.24 2,783,607 Mazda Motor Corp 1,471.00 0.14 3,270,100 Royal Mail Plc 545.60 -1.69 6,004,341 years – as a perfect storm of issues fu- IG trading group, noted that “a dis- about a trade war between the world’s Mitsui & Co Ltd 2,004.50 0.48 5,426,300 Royal Dutch Shell Plc-B Shs 2,804.00 -0.05 6,406,201 els concerns about supplies, with some tinct lack of major economic releases two biggest economies. Kao Corp 7,823.00 1.19 1,313,900 Royal Dutch Shell Plc-A Shs 2,716.00 -0.51 7,770,377 forecasting it could break $100 at some throughout the day” shifted the focus President Xi Jinping’s pointman Sekisui House Ltd 2,010.50 0.37 1,770,800 Royal Bank Of Scotland Group 290.10 -1.49 19,596,011 Oriental Land Co Ltd 11,335.00 1.25 366,500 point. onto “geopolitical and economic fac- on economic issues is in Washington Rolls-Royce Holdings Plc 857.20 2.10 4,314,917 Secom Co Ltd 8,148.00 0.92 659,600 Around 1545 GMT yesterday, Brent tors, with rising bond yields and fears holding talks with a top-level delega- Rio Tinto Plc 4,340.00 -0.40 3,614,115 Tokio Marine Holdings Inc 5,490.00 3.00 4,050,900 stood at $79.30 per barrel, the same as over a breakdown in US-Chinese trade tion led by Treasury Secretary Steven Rexam Ltd 0.00 0.00 - Aeon Co Ltd 2,169.50 1.07 1,847,900 Mnuchin, with markets hoping the two Relx Plc 1,619.50 1.41 3,774,804 Thursday’s close. talks proving a drag.” Fanuc Corp 23,980.00 1.25 814,400 Reckitt Benckiser Group Plc 5,950.00 0.80 1,920,967 Milan’s shares index was the big- Brent and WTI, the other key oil sides can reach an agreement. Daito Trust Construct Co Ltd 18,815.00 -0.08 175,300 Randgold Resources Ltd 5,814.00 0.45 436,623 gest faller among leading markets in contract, are up about one third from Wall Street trading was fl at shortly Otsuka Holdings Co Ltd 5,310.00 0.17 918,200 Prudential Plc 1,934.00 0.68 4,417,968 Europe – with Italy’s banks in par- their 2018 lows seen in February, the after the open yesterday after US mar- Resona Holdings Inc 646.20 -0.46 8,558,900 Provident Financial Plc 639.00 -0.93 836,052 Asahi Kasei Corp 1,524.50 -0.03 2,804,700 ticular dragged down by the prospect upward pressure coming from US kets closed in the red on Thursday Persimmon Plc 2,813.00 0.54 899,506 Kirin Holdings Co Ltd 2,984.00 -0.67 2,157,000 of the country being led by a coalition President Donald Trump’s decision to after Trump lashed out at European Pearson Plc 910.00 -1.19 3,745,599 Mitsubishi Ufj Financial Gro 723.50 -0.69 55,130,500 of far-right and anti-establishment withdraw from the Iran nuclear deal and Chinese trading partners and cast Paddy Power Betfair Plc 8,600.00 2.32 397,277 Marubeni Corp 881.30 0.22 5,936,500 Old Mutual Plc 246.00 -1.48 14,789,121 parties. as well as economic uncertainty in key doubt on the chances of reaching a deal Mitsubishi Chemical Holdings 1,058.00 1.63 9,135,300 Next Plc 5,768.00 -0.45 599,651 Top European stock markets had producer Venezuela and an output cap with Beijing. Fast Retailing Co Ltd 48,830.00 0.47 467,200 National Grid Plc 882.10 2.08 12,660,593 meanwhile been propelled to heights by Opec and Russia. Also keeping markets on edge is the Ms&Ad Insurance Group Holdin 3,868.00 1.15 1,627,000 Mondi Plc 2,076.00 0.53 1,324,732 Thursday by weakness in the pound Higher oil prices are boosting ex- future of a summit between Trump and Kubota Corp 1,903.00 -0.39 2,362,300 Merlin Entertainment 371.40 0.00 1,585,715 Seven & I Holdings Co Ltd 4,822.00 0.27 1,532,800 and euro, which boosted share prices pectations for fatter profi ts for global North Korean leader Kim Jong-un after Mediclinic International Plc 664.40 -0.98 1,805,213 Inpex Corp 1,373.50 2.77 7,599,800 of exporters. energy giants, while increasing expec- Pyongyang threatened to pull out over Marks & Spencer Group Plc 291.70 -1.88 10,167,705 Sumitomo Mitsui Financial Gr 4,710.00 0.06 4,544,300 London’s FTSE 100 index closed at tations of higher infl ation. US demands that it get rid of its nu- London Stock Exchange Group 4,528.00 0.67 633,037 Ana Holdings Inc 4,207.00 -0.14 700,800 Lloyds Banking Group Plc 66.03 -0.30 133,367,195 an all-time peak while the Paris CAC 40 This in turn is cementing expecta- clear programme. Mitsubishi Electric Corp 1,631.00 0.06 5,626,000 Legal & General Group Plc 283.60 0.18 12,793,358 Honda Motor Co Ltd 3,705.00 1.26 3,429,800 Land Securities Group Plc 957.50 0.45 2,662,853 Tokyo Gas Co Ltd 2,964.00 0.88 1,682,500 Kingfisher Plc 293.90 -0.14 7,198,769 HONG KONG HONG KONG Tokyo Electron Ltd 21,280.00 -1.94 1,131,500 Johnson Matthey Plc 3,480.00 -1.78 1,075,677 Panasonic Corp 1,609.50 -0.09 5,268,800 Itv Plc 169.60 0.15 13,236,499 Fujitsu Ltd 685.10 0.60 9,659,000 Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume Intu Properties Plc 193.30 -1.13 2,592,463 East Japan Railway Co 10,750.00 0.23 539,500 Intl Consolidated Airline-Di 682.60 -0.78 6,305,190 Aluminum Corp Of China Ltd-H 4.38 1.62 25,288,943 Hong Kong & China Gas 17.02 0.24 10,661,146 Itochu Corp 2,121.50 2.51 6,895,500 Intertek Group Plc 5,142.00 0.74 223,833 Bank Of East Asia Ltd 33.15 0.45 1,122,686 Hong Kong Exchanges & Clear 259.40 0.15 2,960,855 Fujifilm Holdings Corp 4,305.00 -0.39 1,169,600 Intercontinental Hotels Grou 4,804.00 0.52 416,659 Bank Of China Ltd-H 4.21 0.24 158,264,544 Hsbc Holdings Plc 77.25 0.32 11,878,991 Yamato Holdings Co Ltd 3,063.00 0.46 1,657,800 Inmarsat Plc 388.00 -0.03 1,646,764 Bank Of Communications Co-H 6.35 0.16 19,917,507 Hutchison Whampoa Ltd 0.00 0.00 - Chubu Electric Power Co Inc 1,698.50 -0.53 2,249,500 Informa Plc 765.80 0.21 2,286,228 Belle International Holdings 0.00 0.00 - Ind & Comm Bk Of China-H 6.75 0.00 172,421,470 Mitsubishi Estate Co Ltd 2,037.00 -1.02 5,343,600 Imperial Brands Plc 2,772.00 0.53 1,930,267 Boc Hong Kong Holdings Ltd 39.90 -0.62 10,192,097 Li & Fung Ltd 3.53 -1.67 24,485,265 Mitsubishi Heavy Industries 4,298.00 0.37 1,207,200 Hsbc Holdings Plc 732.90 0.41 33,283,867 Cathay Pacific Airways 12.90 -1.23 2,766,000 Mtr Corp 45.10 -1.64 3,965,126 Shiseido Co Ltd 8,092.00 1.43 2,170,300 Hargreaves Lansdown Plc 1,950.00 0.46 913,029 Ck Hutchison Holdings Ltd 88.75 -0.34 6,276,790 New World Development 12.06 0.33 13,220,817 Shionogi & Co Ltd 5,757.00 0.05 1,004,800 Hammerson Plc 552.00 -0.72 4,396,471 China Coal Energy Co-H 3.70 5.11 34,649,954 Petrochina Co Ltd-H 6.51 6.37 382,219,968 Recruit Holdings Co Ltd 2,897.00 -0.10 4,924,900 Glencore Plc 380.35 -4.40 80,053,156 China Construction Bank-H 8.17 0.12 278,111,144 Ping An Insurance Group Co-H 78.30 -0.38 39,694,452 Japan Airlines Co Ltd 4,114.00 1.03 798,900 Glaxosmithkline Plc 1,488.20 -0.15 8,791,485 China Life Insurance Co-H 22.40 0.00 20,215,487 Power Assets Holdings Ltd 54.70 0.37 6,713,634 Nitto Denko Corp 8,469.00 0.26 793,300 Gkn Plc 482.40 1.39 857,601 China Merchants Port Holding 18.30 1.67 3,727,752 Sino Land Co 13.60 1.64 3,921,512 Kddi Corp 2,935.00 -0.02 4,381,900 Fresnillo Plc 1,274.50 0.24 877,000 China Mobile Ltd 73.40 0.07 11,704,179 Sun Hung Kai Properties 127.40 0.00 3,189,489 Rakuten Inc 780.30 0.40 6,732,000 Experian Plc 1,819.50 0.83 2,540,761 China Overseas Land & Invest 27.35 1.30 7,436,485 Swire Pacific Ltd - Cl A 79.30 1.93 2,017,467 Kyocera Corp 6,730.00 -0.21 1,450,200 Easyjet Plc 1,744.50 -0.40 1,609,097 China Petroleum & Chemical-H 8.21 2.37 167,580,347 Tencent Holdings Ltd 411.00 0.00 21,407,723 Nissan Motor Co Ltd 1,146.00 0.79 9,254,100 Dixons Carphone Plc 229.30 0.61 4,664,406 China Resources Beer Holdin 35.50 0.14 5,529,885 Wharf Holdings Ltd 25.95 0.19 4,381,924 Direct Line Insurance Group 371.80 -0.80 4,302,833 China Resources Land Ltd 30.80 3.01 10,555,044 China Resources Power Holdin 15.48 0.65 3,825,844 Diageo Plc 2,699.00 -0.44 4,001,557 SENSEX Dcc Plc 7,375.00 -1.01 223,423 China Shenhua Energy Co-H 22.00 6.28 43,606,485 GCC INDICES Crh Plc 2,787.00 1.94 1,959,783 China Unicom Hong Kong Ltd 11.40 0.71 52,676,747 Compass Group Plc 1,591.00 1.14 3,067,679 Company Name Lt Price % Chg Volume Citic Ltd 11.96 0.17 4,229,555 Indices Lt Price Change Coca-Cola Hbc Ag-Di 2,584.00 0.39 546,260 Clp Holdings Ltd 80.75 -0.43 2,160,414 Doha Securities Market Zee Entertainment Enterprise 567.60 -0.59 1,136,998 8,891.16 -59.44 Centrica Plc 144.65 0.52 23,788,595 Cnooc Ltd 14.46 3.43 84,672,044 Saudi Tadawul Yes Bank Ltd 345.50 0.06 9,793,677 8,016.85 +58.38 Carnival Plc 4,923.00 -0.47 516,346 Cosco Shipping Ports Ltd 7.14 1.13 4,345,739 Kuwait Stocks Exchange Wipro Ltd 268.90 -3.40 4,920,424 #N/A N/A #N/A N/A Capita Plc 140.40 6.53 18,736,332 Esprit Holdings Ltd 2.76 -0.72 1,688,043 Bahrain Stock Exchage Vedanta Ltd 270.30 -2.40 9,314,842 1,272.78 -0.14 Burberry Group Plc 1,932.00 0.21 3,556,460 Fih Mobile Ltd 1.52 -1.94 16,354,888 Oman Stock Market Ultratech Cement Ltd 3,858.85 -2.50 399,233 4,617.71 -36.07 Bunzl Plc 2,270.00 1.11 655,897 Hang Lung Properties Ltd 18.58 -1.28 2,844,143 Abudhabi Stock Market Tech Mahindra Ltd 692.95 2.54 4,433,119 4,431.71 -35.72 Bt Group Plc 203.25 -0.68 35,667,640 Hang Seng Bank Ltd 197.20 0.66 878,575 Dubai Financial Market Tata Steel Ltd 591.40 -3.10 8,666,882 2,912.62 -18.97 British Land Co Plc 693.00 -0.57 3,394,479 Henderson Land Development 50.85 0.69 3,775,099 Tata Power Co Ltd 80.85 -0.98 7,307,369 British American Tobacco Plc 3,800.00 -0.39 4,673,569 Tata Motors Ltd 304.60 -3.27 12,404,830 Bp Plc 586.30 0.39 34,050,894 Tata Consultancy Svcs Ltd 3,502.05 0.29 963,583 Bhp Billiton Plc 1,738.00 -0.66 7,166,485 Sun Pharmaceutical Indus 464.90 -3.12 9,257,117 Berkeley Group Holdings/The 4,186.00 0.14 300,667 “Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The State Bank Of India 238.85 -1.59 14,125,953 Barratt Developments Plc 556.40 -0.61 2,893,858 Reliance Industries Ltd 933.85 -1.22 5,714,924 accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended Barclays Plc 207.50 -0.72 37,390,663 Punjab National Bank 74.75 -2.22 26,756,572 as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank Bae Systems Plc 648.40 0.81 7,194,371 Power Grid Corp Of India Ltd 212.95 -0.23 10,426,503 or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on Babcock Intl Group Plc 772.40 0.34 1,431,709 Oil & Natural Gas Corp Ltd 185.05 -1.88 5,074,983 this data.” Aviva Plc 550.00 0.55 11,054,513 Ntpc Ltd 166.60 -0.30 5,239,509 Astrazeneca Plc 5,241.00 -1.95 3,438,022 Maruti Suzuki India Ltd 8,510.95 -2.14 684,142 Associated British Foods Plc 2,750.00 0.47 853,202 Mahindra & Mahindra Ltd 836.00 -1.53 2,022,817 Ashtead Group Plc 2,297.00 0.04 1,357,581 Lupin Ltd 743.70 -2.52 1,253,167 CURRENCIES Arm Holdings Plc 0.00 0.00 - Larsen & Toubro Ltd 1,315.55 -2.98 2,307,924 DOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI KUWAITI Antofagasta Plc 1,083.50 0.18 2,701,334 DINAR DINAR Kotak Mahindra Bank Ltd 1,294.40 1.87 3,512,284 Anglo American Plc 1,860.00 -1.23 4,741,462 Itc Ltd 282.30 1.20 16,131,918 Admiral Group Plc 1,927.50 -0.90 725,300 Infosys Ltd 1,183.20 0.03 3,622,561 3I Group Plc 989.00 1.29 2,525,003 Indusind Bank Ltd 1,930.00 0.82 971,936 Idea Cellular Ltd 52.10 -1.04 15,600,142 Icici Bank Ltd 286.10 -3.34 18,015,976 TOKYO Housing Development Finance 1,853.00 -1.18 2,549,079 Hindustan Unilever Ltd 1,605.80 2.29 2,104,938 Hindalco Industries Ltd 231.50 -0.67 9,042,775 Company Name Lt Price % Chg Volume Hero Motocorp Ltd 3,561.05 0.18 433,568 Hitachi Ltd 846.90 -0.43 11,700,000 Hdfc Bank Limited 2,012.15 -0.77 1,419,293 Takeda Pharmaceutical Co Ltd 4,690.00 -1.03 5,379,800 Hcl Technologies Ltd 890.70 -2.09 1,811,365 Jfe Holdings Inc 2,487.00 0.24 2,206,000 Grasim Industries Ltd 1,062.85 -1.88 783,531 Sumitomo Corp 1,967.50 0.59 2,849,900 Gail India Ltd 321.50 -2.68 7,645,033 Canon Inc 3,820.00 0.61 3,103,200 Dr. Reddy’s Laboratories 1,982.00 0.25 520,354 Nintendo Co Ltd 45,700.00 -1.89 1,816,300 Coal India Ltd 266.80 -1.73 1,970,623 Eisai Co Ltd 8,124.00 3.79 1,691,500 Cipla Ltd 533.05 -3.74 1,825,413 Isuzu Motors Ltd 1,664.00 0.18 1,740,000 Cairn India Ltd 0.00 0.00 - Unicharm Corp 3,203.00 1.20 1,278,900 Bosch Ltd 17,713.05 -1.03 12,417 Shin-Etsu Chemical Co Ltd 11,540.00 0.70 793,800 Bharti Airtel Ltd 361.35 -1.70 11,551,502 Smc Corp 43,980.00 4.19 419,000 Bharat Petroleum Corp Ltd 386.35 -1.09 6,841,133 Mitsubishi Corp 3,229.00 0.34 3,952,200 Bharat Heavy Electricals 76.40 -3.60 4,500,974 Asahi Group Holdings Ltd 5,808.00 -0.03 834,000 Bank Of Baroda 126.70 -2.54 12,953,067 Keyence Corp 68,420.00 0.31 165,100 Bajaj Auto Ltd 2,787.50 -0.99 1,943,891 Nidec Corp 17,415.00 -0.88 574,600 Axis Bank Ltd 532.90 -1.21 7,504,210 Nomura Holdings Inc 611.50 -0.08 10,734,000 Asian Paints Ltd 1,308.35 -0.08 979,235 Daiichi Sankyo Co Ltd 4,050.00 -2.10 1,868,800 Ambuja Cements Ltd 210.45 -3.31 1,749,848 Subaru Corp 3,564.00 0.25 2,458,000 Adani Ports And Special Econ 389.50 -2.11 3,993,619 Ntt Docomo Inc 2,813.00 -0.02 2,214,300 Acc Ltd 1,374.35 -1.87 455,963 Gulf Times 6 Saturday, May 19, 2018 BUSINESS/LEISURE

Snail cream, smelly fruit: Thai cosmetics, food fi rms tap into Chinese tourism boom

Reuters known for its sulphury smell That is more than the 10-15% tourist destinations such as snapping up savoury snacks. Bangkok that is mainly grown in south- that comes from Chinese tour- shopping malls and along the Taokaenoi’s crispy seaweed east Asia. ists buying in Thailand. skytrain line. snack has been a hit for years. About 11mn Chinese tourists There is also increasing com- The cafe, known for long About 20% of Taokaenoi’s he label on the pink and are expected to come to Thailand petition in the niche world of queues and its Shibuya Honey 2017 domestic sales were to white box of face cream this year, up from just over 1mn snail slime products. Toast – a block of bread served tourists, the company’s Head Tsold in a Bangkok hyper- in 2010, making China by far the Reuters visited a snail farm in with ice cream – was initially of Investor Relations, Koosoon market proudly declares that it biggest source of tourism here. Thailand that provides the secre- popular among Singaporean and Rattanaporn, said, while 60% is based on a “snail secretion fi l- And they are spending more tion to a manufacturer that sells it Malaysian customers. came from exports, nearly half of trate moisture system”. The Snail per head than previously, accord- either in its original form or after But in 2016, Chinese tourists them to China. White branding – plus some ing to Thai government fi gures. turning it into a powder for use in began to pour into the cafes, said The benefi ts of Chinese de- positive Internet reviews – is And it isn’t only the hotels, cosmetics around the world. After You Chief Executive Ma- mand and expectations of fur- enough to have Chinese tour- tour operators and airlines that Another Thai beauty fi rm that etup T Suwan. ther supercharged growth are ists recently lining up to buy the are benefi ting. sells colour cosmetics and skin- “Tourists see our long queues, clearly refl ected in share prices. slime-infused product. A big slice of this spending is care products, Beauty Commu- a picture on social media or read Investors are paying 52 times Alice Chen, 21, a Chinese col- with retailers, restaurants, and nity, is also seeing substantial a great review and want to try,” earnings for the Do Day Dream lege student, says she saw the food and cosmetics makers that using a process done in South rect to Chinese consumers. growth. he said. shares, well above the Thai per- face cream reviewed online and target the Chinese audience. Korea, are stacked high at Thai- It also sells other snail secre- Chief executive Suwin Kraib- After You has capitalised on sonal product industry aver- wanted to try it out because she Investors have taken note, land’s airports and malls as it tion-based products, including hubes said he expects tourists the fl ow of Chinese customers age of 21 times, and After You’s couldn’t get it back home. driving up the share prices of has become a must-buy item for shower gel and lotions. from China and Southeast Asia to set up ‘durian rooms’ last year shares are trading at 79 times And a 22-year-old Chinese many of the companies con- many Chinese visitors who covet The sales to visitors are at risk, to account for 15% of revenue, off ering fresh durian desserts earnings, while Taokaenoi’s tourist also at the Big C Ratch- cerned to high price-to-earn- paler skin. he said, if for any reason there which will help him reach a 20% specifi cally aimed at the fruit’s prices are 43 times earnings. adamri store, who only gave her ings ratios. Sales of the Snail White prod- is a sudden drop off in Chinese growth target this year. lovers. There is expectation of higher name as Yvonne, said she bought So far, in some cases, that se- ucts have been skyrocketing tourists. Suwin, a physician-turned- Durian is often banned in taxis earnings because these companies some – it retails at about $40 a curities analysts say they are since 2014 as beauty bloggers in That happened briefl y in 2015 businessman, and Do Day Dream and hotels and airlines around are in the “growth stage of their box – because “a blogger said it wary of valuations, especially as Hong Kong and Singapore gave and 2016 when the Thai govern- founder Sarawut Pornpatanaruk Southeast Asia because of its business life cycle,” said CGS- was good and inexpensive.” tourists’ tastes can change rap- them rave reviews, according to ment made it much more dif- both for the fi rst time made this pungent smell. CIMB Securities Thailand analyst Meanwhile, at a dessert cafe idly. Do Day Dream chief fi nancial of- fi cult for the tour operators of- year’s Richest 50 Thai’s list com- The company plans new Uraiwan Tantisuwannakul. just up the road in Bangkok’s Do Day Dream Pcl, the com- fi cer Piyawat Ratchapolsitte. fering really cheap packages to piled by Forbes. branches and durian rooms in top Domestic consumption has upscale Siam Paragon shopping pany behind the skin-whitening In 2017, the company’s rev- the Chinese – known as “zero- Another sweet success story is Thai tourist destinations outside slowed in recent years so inves- centre, another group of Chinese Snail White cream, is one. enue ballooned 35% to 1.7bn dollar tours”. After You. of Bangkok and it also plans to tors are willing to “pay a pre- tourists take pictures on their Boxes of the fi rm’s signature baht ($52mn) as the company Exports to China produced The popular dessert restau- start a franchise model in Malay- mium” for fi rms with plans to phones of whimsical treats made cream, which the fi rm says it also built a strong Thai domestic 30% of its revenue last year, Pi- rant has 28 cafes throughout sia next year, said Maetup. diversify to the Chinese market, from durian – the yellow fruit makes from snail slime extracted market and grew online sales di- yawat said. Bangkok, with six in popular Chinese tourists are also she said.

Sudoku Adam

Pooch Cafe

Sudoku is a puzzle Weekly’s Solutions based on a 9x9 grid. The grid is also divided into nine (3x3) boxes. You are given a selection of values and to complete the puzzle, you must fill the grid so that every column, every row and every 3x3 box contains the digits 1 to 9 and none is repeated.

Super Cryptic Clues Garfi eld

ACROSS DOWN 1. Something to steer clear of, on the tea- 1. Yield the answer (6) Bound And Gagged table? (4-4) 2. The minister, like a mutt, made a meal of it 5. On which one plays games and tries to (6) win (6) 3. Opening the Indian boy got through (7) 9. Get going when attacked (6,2) 4. I won’t, you say, be aware of it (4) 10. The tenant is a man, you understand (6) 6. Begin with a look at the outside (4-3) 12. Tell you gossip will sell (6) 7. Stop, or pause, before “water” (8) 13. Does he fix things so everybody gets a 8. Travelling so, is one in with the animals? (8) new partner? (8) 11. Is a wild ape crazy on them? (7) 15. Continue to be irritatingly persevering? 14. Ran out and was spotted clutching fifty (4,2,6) pounds (7) 18. Become a little better (4,1,7) 16. Had gone inside, so we had followed (8) 23. Managed, when told to (8) 17. The hint is a clear one (8) 24. The boldness required to carry it off (6) 19. The old soldiers’ car damaged the woman’s 26. A panelled court-room (6) (7) 27. Is derogatory, one finds (4,4) 20. Revealed the dope had a sex change (7) 28. Being smart, put the S in “thirsty” (6) 21. There’s nothing in the wood or the hollow (6) 29. Superfluous if you require a smaller 22. Attacks one in small ways (6) quantity (8) 25. Bound, of course, for America (4)

Weekly’s Solutions

Across: 1 Searching; 6 Paled; 9 Latin; 10 Down: 1 Salts; 2 Attribute; 3 Confidence; 4 Sheepdogs; 11 Spirit-lamp; 12 Cede; 14 Pau- Insults; 5 Gleamed; 6 Pipe; 7 Loose; 8 Distem- pers; 15 Draws up; 17 Stencil; 19 Clearer; 20 per; 13 Malevolent; 14 Possessed; 16 Straining; Ella; 22 Take notice; 25 Slave-ships; 26 Evils; 18 Leashes; 19 Creeper; 21 Leave; 23 Epsom; 27 Dread; 28 Stratagem. 24 Deed.

Gulf Times 8 Saturday, May 19, 2018 BUSINESS

Emerging equities Asian markets end higher; on track for a third week of hefty losses

Reuters the second day in a row to London support the peso, indicating its energy fi rms soar with oil willingness to let the market find its own level under 25 to AFP Emerging market currencies the dollar. Hong Kong were licking their wounds The peso hit a series of all-time yesterday after another brutal lows earlier in May, forcing week that saw higher US Buenos Aires to request a “high nergy fi rms surged on the back of Treasury yields and a stronger access stand-by arrangement” further gains in oil prices in Asian dollar taking their toll, with from the International Etrade yesterday while regional eq- hotspots Argentina and Turkey Monetary Fund (IMF) and the uity markets mostly rose as traders keep on track for a third week of central bank to jack up interest a cautious eye on high-level China-US hefty losses. rates to 40%. trade talks. MSCI emerging market “It is amazing how quickly Asian dealers were broadly upbeat currency index has fallen more Argentina has unravelled,” yesterday. Hong Kong’s Hang Seng Index than 1% over the week — its said Stuart Culverhouse at rose 0.3% and Shanghai ended up 1.2%. biggest such decline since Exotix. “But our sense is that Tokyo closed 0.4% higher as exporters November 2016. the authorities have stabilised were lifted by a weaker yen, which is at a Currencies of developing the situation after the currency four-month low against the dollar. nations have been whacked crisis over the past month with Seoul added 0.5% and Wellington put in recent weeks by the their macro policy response, at on 0.6% but Sydney dipped 0.1% and dollar’s steady climb with the least for now.” Singapore shed 0.2%. greenback perching near a five- Turkey’s lira flirted with yet The future of a summit between month peak while US Treasury another record low on Friday Trump and North Korean leader Kim yields trading well above the as investors waited to see Jong Un is keeping traders on edge after psychologically significant 3 % whether Ankara’s central bank Pyongyang threatened to pull out over threshold. will take action to shore up the US demands that it get rid of its nuclear Adding to the woes was softer ailing currency with 10-year programme. data earlier in the week out of benchmark bond yields rising to However, the president looked to China and with investors closely 15%. The lira looked poised for a keep the talks on course by off ering Kim eyeing the latest twist and 3% weekly drop in its third week a guarantee he can stay in power if he turns in the standoff between in the red. abandons his weapons. Washington and Beijing over And South Africa’s rand, In early European trade, London fell trade between the world’s top Mexico’s peso and Russia’s 0.2%, Paris shed 0.3% and Frankfurt was two economies. rouble are all also on track for a fl at. In Tokyo, the Nikkei 225 closed up An external view of the Tokyo Stock Exchange. The Nikkei 225 closed up 0.4% to 22,930.36 points yesterday. “As soon as the dollar goes up, week in the red. 0.4% to 22,930.36 points; Hong Kong — of course, emerging market Stock markets painted a similar Hang Seng ended up 0.3% to 31,047.91 tions for fatter profi ts for global energy are already at seven-year highs above Trump said about the chances of success investors shudder,” said Jan sombre picture, with MSCI’s points and Shanghai — Composite rose giants and on Friday Hong Kong-listed three % and the prospect of paying more for the talks. “China has become very Dehn, head of research at emerging equity index treading 1.2% to 3,193.20 points yesterday. PetroChina was among the big gainers, to borrow money has spooked investors, spoiled...because they always got 100% Ashmore. water on the day but on track The benchmark Brent crude contract surging more than 6%, while CNOOC sending the dollar higher but causing a of whatever they wanted from the United Argentina once again took for a 1.7% weekly loss. broke the $80 mark on Thursday for the put on 3.4%. drag on stock markets. States.” centre stage, with losses racked However, China mainland stocks fi rst time in three-and-a-half years as Inpex climbed 2.8% in Tokyo while Adding to the unease is the tariff s However, Bloomberg News reported up early in the week putting rose more than 1% yesterday a perfect storm of issues fuels concerns Santos jumped 0.8% in Sydney. spat between the US and China, which Friday that the Chinese side had off ered the peso on track for a 5% as Beijing’s central bank said about supplies, with some forecasting it And Patrick Pouyanne, chief execu- has raised concerns about a trade war to work on slashing its trade surplus with tumble since last Friday — its it would enhance overseas could break $100 at some point. tive offi cer of French oil explorer Total between the world’s two biggest econo- the US by $200bn by increasing imports. third week of losses of such investors’ ability to use foreign Brent and WTI are up about a third SA, told Bloomberg News that if Trump mies. President Xi Jinping’s pointman on The fi gure is the same as demanded by magnitude. currencies to invest under the from their 2018 lows seen in February imposes threatened sanctions on Iran “I economic issues is in Washington hold- Mnuchin and his team during fruitless Yet the currency stabilised Stock Connect scheme, as part with upward pressure coming from Don- wouldn’t be surprised to see $100 per ing talks with a top-level delegation led talks in Beijing recently. somewhat on Thursday after of an eff ort to facilitate cross- ald Trump’s decision to rip up the Iran barrel in the coming months”. by Treasury Secretary Steven Mnuchin, Such an agreement would be “good the central bank declined for border capital flows. nuclear deal, economic uncertainty in However, rising oil prices are increas- with markets hoping the two sides can news for market sentiment”, Dariusz key producer Venezuela and an output ing expectations of a jump in global in- reach an agreement. Kowalczyk, senior emerging-market cap by Opec and Russia. fl ation. And the main focus is on the US, Trump sent Wall Street tumbling on strategist at Credit Agricole, said. That comes on top of continued im- where the Federal Reserve is in the midst Thursday when he lashed out at Euro- China appeared to hold out an olive provement in the global economy and of an interest rate-raising cycle, with pean and Chinese trading partners and branch yesterday as it said it had dropped ongoing unrest across the Middle East. fears it could announce three more hikes cast doubt on the chances of reaching an anti-dumping and anti-subsidy probe Higher prices are boosting expecta- this year. Key US 10-year Treasury yields a deal with Beijing. “I tend to doubt it,” into key US sorghum imports.

Sensex plunges by 300.82 points; rupee weakens to 68.01

Bloomberg, Reuters tune of Rs428.92 crore on Thursday, as Meanwhile the rupee yesterday weak- Brent crude topped $80 a barrel for Mumbai per provisional data. ened against the US dollar after local eq- the fi rst time since 2014 amid signals The BSE Sensex closed lower by 300.82 uity markets fell for the fourth consecu- that stockpiles of excess oil will continue points, or 0.86%, to 34,848.30, while the tive session on worries of higher crude oil shrinking around the world. he benchmark indices BSE Sensex Nifty 50 fell 86.30 points, or 0.81%, to prices. Bond yields fell for a third session after and NSE’s Nifty 50 closed lower close at 10,596.40. All the sectoral indi- The rupee ended at 68.01 against the a Cogencis report saying that the fi nance Tfor a fourth straight session yes- ces on the BSE ended lower with capital US dollar, down 0.45% from its previous ministry wants more state-run banks to terday dragged by market heavyweights goods losing most at 3.05%, industri- close of 67.70. participate in govt bond auctions. The ICICI Bank, RIL and HDFC Bank, fol- als 2.54%, metal 2.36% and healthcare The currency opened at 67.74 a dollar 10-year bond yield ended at 7.756%, lowing foreign fund outfl ows and mixed 2.06%. and touched a low of 68.08. up from its Thursday’s close of 7.881%. sentiment in global stock markets. The BSE MidCap and SmallCap de- Rising US treasury yields kept Asian Bond yields and prices move in opposite Investors were cautious over develop- clined 1.47% and 1.62%, respectively. currencies and bonds under the hammer directions. ments in US-China trade negotiations Hindustan Unilever, Kotak Bank, In- as the dollar headed for its fi fth straight So far this year, the rupee has weak- and rising oil prices. dusInd Bank and ITC were top gainers by weekly gain. ened over 6%, while foreign inves- Foreign investors sold shares worth rising up to 2.22%, whereas Wipro, ICICI The 10-year Treasury yield rose for a tors have bought $660.20mn and sold Rs830.94 crore on net basis, while do- Bank, Sun Pharma and L&T were among fi fth-straight day and touched its high- $3.47bn in equity and debt markets, mestic investors bought equities to the the major losers, falling over 3%. est level since 2011. respectively. Gulf Times Saturday, May 19, 2018 9 BUSINESS Private equity firms bet on stock market’s fixer-uppers

Reuters story of the market.” identifying potential bargains was just Among the biggest take-private deals of the second time in at least 11 years. and then work they do to achieve this. New York Apollo last year raised a record $24.6bn a start. this year so far are buyout firm Hellman While take-private deals cost on While it takes years to assess the for a private equity fund and has taken “When approaching public-to-private & Friedman’s $3bn acquisition of US average 9.6 times earnings before financial performance of private equity several companies private in recent transactions, private equity firms investment adviser Financial Engines interest, tax, depreciation and deals, especially those that rely on Private equity firms, armed with a years. have to have a very clear thesis why Inc, a company dogged by investor amortisation, that ratio was 9.8 for major turnarounds, there are signs that record $1tn in cash, are investing more As cheap private deals get scarce, companies should be in private hands.” fears over its competitive footing, and other deals. at least some of the latest take-private in public companies than at any time underpriced listed companies off er an The last time buyout firms spent big Silver Lake’s $3.5bn purchase of US Helping private equity firms clinch deals may be challenging to turn into since the financial crisis, buying those alternative. on taking companies private was in the prepaid payments network operator bargains are impatient shareholders. home runs. left behind in Wall Street’s nine-year bull Such bets can be risky, though, because two years leading up to the financial Blackhawk Network Holdings, whose Activist hedge funds, which have When Apollo bought US home security market. a stock’s underperformance may reflect crisis, when credit was cheap and stock price was hit by soft US demand gained influence in recent years, can company ADT Inc in May 2016 and It is a bet that buyout firms can spot deep-seated issues that private equity plentiful, as it is now. for physical gift cards. act as catalysts in companies deciding merged it with another small peer it listed companies’ potential that the fund managers may struggle to resolve, Several of these leveraged buyouts, “There’s a pool of assets out there to go private, investment bankers say. owned, Protection 1, the combined stock market has been missing, and such as emergence of new competitors such as retailer Toys R Us and casino that, despite what you read and “The activist investor agenda heightens company was worth $15bn, including a sign of confidence in their ability to in its market. operator Caesars Entertainment, see about the average multiples or the sense that, if you’re a laggard for a debt. turn them around even as some of their “To say the market is wrong is easy. ended up in bankruptcy, succumbing the average increase of the stock long time on the public market, what do Apollo has since taken ADT public, yet shareholders have lost patience or faith To say that you know better is a to the downturn and the heavy debt market pricing, haven’t benefited you do?” said Brad Coleman, chairman its value has barely risen to just under in them. totally diff erent statement,” said Kevin load private equity firms saddled from those increases but still are of Citi’s asset managers group. “The $16bn because investors fret over its “There are quite a few public Kaiser, senior director of the Wharton them with. solidly performing assets,” said Hugh markets are less patient, boards are ability to withstand pressure from new companies that are maybe a little less Alternative Investments Initiative and So-called take-private deals worldwide MacArthur, head of global private less patient, management teams are entrants in the home security sector exciting, maybe have made some adjunct professor of finance at the reached a decade high of $109bn last equity at consultancy Bain & Co. worried.” such as Amazon.com. missteps or just simply have a bit of Wharton School of the University of year, according to data provided to In fact, according to S&P Global Market Private equity executives say what Still, during Apollo’s first-quarter a more complex story,” said Scott Pennsylvania. Reuters from industry tracker Preqin. Intelligence’s Leveraged Commentary & sets them apart from stock market earnings call earlier this month its Kleinman, co-president of Apollo Global Alex Slusky, founder and chief In the first quarter of this year, such Data service, US take-private deals last investors, who buy relatively small co-founder Joshua Harris said ADT, in Management. investment off icer of Vector Capital, a deals totalled $12bn, the heftiest year cost buyout firms slightly less in stakes in companies without taking which Apollo still holds an 85% stake, “As a result, they haven’t seen their private equity firm which says it targets amount for an opening quarter in the terms of earnings multiples than other over, is their ability to price their remained a great investment and would valuations move at all like the general “fallen angel” companies, agreed that last five years. types of private equity deals, for only chances of turning companies around, eventually pay off .

Richemont targets more M&A deals after taking watch inventory hit Poland’s central bank

Reuters the previous year, were neces- Zurich sary to ensure “healthy inven- tory levels at trade partners”, and were now likely fi nished. uxury goods group He also said Richemont was says world is coming Richemont will focus on still in talks to sell its Lan- Ldoing more M&A deals cel business to Italian leather to reshape its business after goods company Piquadro, reporting lower than expected but wanted to grow mainly full-year results, which in- organically its leather goods cluded a €203mn buy back of businesses that include Chloe watch inventories. handbags, Cartier wallets and round to its view Richemont, which has lux- Montblanc phone cases. ury brands including Cartier “Overall a messy result with Bloomberg and Montblanc, is just in the the watch buyback probably Warsaw process of acquiring full con- hurting the underlying busi- trol of luxury retailer Yoox ness in the fi nal part of the Net-a-Porter for €2.6bn as year,” Kepler Cheuvreux ana- oland’s central bank doesn’t feel as part of eff orts to boost its lyst Jon Cox said. lonely as it used to arguing against online presence and attract “Long term the company Phigher interest rates. younger customers. “Our probably did the right thing in The National Bank of Poland is less of long-term approach does not terms of the watch clean up. an outlier on monetary tightening now preclude us from targeting However, timing is unfor- that its counterparts from Japan to Swe- strategic investments and di- tunate given the watch market den and beyond are choosing to stick with vestments, as we have demon- recovery,” he said. easy policy for longer. True to its mantra strated over the past year,” the Cyrille Vigneron, head of on rates, the Monetary Policy Council in company said yesterday. Richemont’s fl agship brand Warsaw reaffi rmed its wait-and-see bias Over the last two years, Cartier, said the Hong Kong on Wednesday, leaving its benchmark at a Richemont has undergone a market had seen a sharp, V- record-low 1.5%. major management shake- shaped recovery since the Governor Adam Glapinski, who’s pre- up, replacing almost all of its summer, driven by both local viously called for rates to stay on hold this brand heads, its fi nance chief and mainland Chinese cus- year and next, told reporters that Poland and appointing a senior ex- tomers. may keep borrowing costs stable into ecutive committee instead of He told investors on Friday 2020. An increase would be “inappropri- a CEO. that Cartier was in a healthy ate” as the pace of economic growth glo- The luxury watch market situation, with its average bally – and to a smaller degree in Poland has recovered in the past year pricing rising, and was con- – is expected to slow in the coming years, from a severe downturn, but fi dent of regaining market he said. companies like Richemont re- share. “The world’s second thoughts on tight- main under pressure to exploit Grund said the appreciation ening” are a “confi rmation of our own digital sales channels and re- of the euro led tourist shop- expectations – simply that we were right kindle demand for traditional pers to buy more in Asia and and that we still are,” Glapinski said. watches among younger con- less in Europe. The central bank’s inclination to stick sumers. Chief operating offi cer Jer- with its longest- ever rate pause has A weak performance at the ome Lambert said the launch turned to conviction just as plans to group’s watch brands, includ- of lower-priced watches un- tighten monetary policy get sidetracked ing IWC and Vacheron Con- der the Baume brand should around the world. In the neighbour- stantin, and a disappointing help Richemont to target ing euro area, the main destination for net profi t contributed to a fall younger customers. Poland’s exports, the European Central of nearly 8% in Richemont’s The group has appointed Bank last month avoided any discussion shares, making them the worst Eric Vallat to head its fash- of its next steps toward ending bond buy- Visitors enter the headquarters of Poland’s central bank in Warsaw. The National Bank of Poland is less of an outlier on monetary performer in the European ion and accessories business ing amid signs that the bloc’s economic tightening now that its counterparts from Japan to Sweden and beyond are choosing to stick with easy policy for longer. sector index. and to join its senior execu- growth is faltering. The shares were 5% lower tive committee, which lost The zloty could be a worry after a sell- per euro in Warsaw. The Czech koruna pen only in case of an unexpected event.” ricole in Warsaw. Poland’s economy has yesterday. The group’s net chief technology offi cer Jean- off in May put it on track for a fourth was little changed. Once the MPC’s biggest hawk, Zubelewicz for now been resilient to the slowdown profit rose 1% to €1.221bn Jacques Van Oosten who left month of declines. In developing Europe “It makes sense that a country with rel- said that “rate stability is a value” for most elsewhere in Europe. Gross domestic ($1.44bn), which was well earlier this month after just this year, it’s the third-worst performer atively good external balances as well as members of the council. product expanded faster than forecast last below expectations of four months in the job.. against the euro after Russia’s rouble and internal balances has a greater degree of Polish infl ation stood at an annual 1.6% quarter, growing 5.1% from a year earlier. €1.719bn in a Reuters poll of Grund said that the group the Turkish lira. While further deprecia- freedom to manoeuvre even if the curren- in April, the fastest since January but be- Meanwhile, infl ation has remained in line analysts. would decide on its future tion could boost prices of imports, espe- cy weakens,” said Kiran Kowshik, a cur- low the central bank’s 2.5% target. Bond with the central bank’s projection and is Sales for the year increased technology setup, including cially if oil and gas continue to rise, Glap- rency strategist at UniCredit in London. investors expect price growth to average set to undershoot the target this year and 3% to €10.97bn, driven by management issues, after fi - inski said he’s not concerned. “But it also suggests that the NBP remains 2% over the next fi ve years, according to hover slightly above it in 2019. double-digit growth in Asia. nalising the YNAP deal. By contrast, the central bank in the non-committal and is not actively routing the so-called break-even rate calculated “The council turned even more do- Chief fi nancial offi cer Bur- Richemont said it would neighbouring Czech Republic is mostly for a stronger currency in the same way by Bloomberg. vish than before,” Bank Zachodni WBK khart Grund told reporters on raise its dividend to 1.90 Swiss relying on a stronger exchange rate to de- the Czech National Bank is.” While the market still sees the fi rst rate SA economists led by Piotr Bielski said a call the inventory buybacks, francs ($1.90) per share, from liver monetary tightening, warning that Speaking alongside the governor on hike in Poland late next year, expectations in a note. “We still assume that infla- mainly focused on watch 1.80 francs a year ago. currency weakness could bring forward Wednesday, central banker Kamil Zube- “will gradually fall in line with the scenar- tion processes and wage pressure will brands in Europe, and which It said it aimed to grow its rate hikes. The zloty resumed losses on lewicz said rates could stay on hold in io presented by Glapinski,” said Krystian intensify this year, but rates will stay followed €278mn buybacks in dividend each year. Thursday, trading 0.2% weaker at 4.2825 2019 or longer, and a change “could hap- Jaworski, a senior economist at Credit Ag- unchanged until late 2019.” Rate path open for October increase, says Riksbank’s Skingsley

Bloomberg fellow central bankers and that they move with caution. Infl ation pressures below zero, snapped up almost half of London are still on track to tighten monetary are still elusive in the largest Nordic the nation’s bonds and threatened cur- policy this year. economy, with the measure excluding rency interventions. “If you look at the path it accom- energy holding below the 2% target at The krona has tumbled this year, Swedish interest rate increase as modates October as well as December,” the tail end of a growth boom. reaching the lowest level against early as October is in line with she said. “It’s hard to pinpoint exactly “There are no biases in the forecasts, the euro since the financial crisis as Athe policy path laid out by the where you are versus your colleagues, but given our history, we are at nega- inflation remains on shaky ground central bank, Riksbank deputy gover- and that can move around a little bit, tive rates and if you get it wrong it’s and the Swedish housing market nor Cecilia Skingsley said. but I think my statement was nothing better to be too late rather than too rapidly deflates after years of surg- Policy makers last month again dramatic, it was in line with how we see early,” she said. ing prices. pushed back a plan to raise rates for the the policy path.” Critics are also assailing the bank The krona has since recovered al- fi rst time in seven years, saying they The krona slid 0.3%, and was down amid a plunge in the krona this year most 3% from its recent low against didn’t see a tightening until toward the less than 0.1% in Stockholm. and have argued the bank is risking the euro. The Riksbank is not surprised end of the year. Skingsley said it’s only natural that fi nancial stability by keeping rates at by the recent strengthening. But the minutes of that meeting disagreements arise now that the bank rock-bottom levels. “We thought that the full move- showed disagreements growing among “is in a nice position being able to dis- Sweden’s economy has been ex- ment was not warranted by the data, board members with investors and cuss appropriate timing for a liftoff .” panding at pace of more than 3%, with and by the repricing – the markets traders particularly surprised by Sk- “We’re now past a recovery, we’re unemployment dropping to the lowest pushing the liftoff a bit into the fu- ingsley suggesting that a rate increase actually in an expansion phase,” she in a decade. ture – but the FX depreciated a bit could come already in October. said. “Infl ation is close to 2%, infl ation Led by Governor Stefan Ingves, the more than what was warranted by In an interview in Malmo, Sweden, expectations are now more or less an- Riksbank’s board has invested its cred- the data,” said Skingsley. “So our Skingsley said her personal position chored again.” ibility in anchoring infl ation. Policy best judgment was that these were Skingsley: Cautious approach. was within the forecast range of her Nevertheless, the bank will still makers have since 2015 cut rates deep temporary factors.” Gulf Times 10 Saturday, May 19, 2018 BUSINESS

Euro heading for fifth successive Biggest fear for world growth weekly fall

Reuters London is fear itself as markets fret The euro was headed yesterday for its fifth successive weekly Bloomberg decline versus the dollar, in London what would be a first for the currency since 2015, as political uncertainty in Italy worried inancial markets risk becom- investors. ing the tail that wags the dog. The euro has slumped six FWhile policy makers insist the cents from more than $1.24 in global economy’s low-infl ation expan- the space of three weeks after sion looks intact despite a fi rst quarter a huge dollar rally and amid slowdown, investors are presenting concerns about the demands challenges. Rising bond yields, a jump of populist parties likely to form in the price of oil beyond $70 a bar- Italy’s next government. rel, skittish stocks and cracks in credit The far-right League and could all end up undermining growth. 5-Star Movement have agreed The worry is that unless markets on a governing accord that start buying into the more optimistic would slash taxes and ramp up outlook, their pessimism will become welfare spending. self-fulfi lling by causing consumers Ratings agency DBRS warned and companies to lose confi dence and on Thursday that the economic slow spending. The Bank for Interna- proposals of the anti-establish- tional Settlements warned last year ment parties could threaten that the next recession will perhaps be Italy’s sovereign credit rating. triggered by a fi nancial cycle bust, mir- The euro yesterday hovered roring the events of 2001 and 2008. near a five-month low of $1.1763. The threat is all the more press- It has declined nearly 1.2% ing given the value of fi nancial assets versus the dollar this week and keeps getting bigger. The ratio of as- fallen sharply against the Swiss sets to gross domestic product is now franc, which typically attracts 10 times, compared to six times in early capital in times of uncertainty. 1990s, according to Stephen Jen, the “The possibility of a euro- CEO at Eurizon SLJ Capital. sceptic government in Rome is “Central banks intentionally fuelled shaking investor confidence...at the asset prices in the current cycle, this point a larger fiscal deficit through fi nancial repression, to stimu- and greater bond issuance [in late the real economy,” said London- Italy] does seem likely,” said based Jen. “Given the infl ated global David Madden, a strategist at asset prices including equities, bonds An exterior view of the Bank for International Settlements in Basel (file). The BIS warned last year that the next recession will perhaps be triggered by a financial cycle CMC Markets. and real estate, it would not at all be bust, mirroring the events of 2001 and 2008. A founding member of the surprising that a synchronised cor- EU and the euro, Italy accounts rection in the global fi nancial markets diffi cult for the market to rally beyond European economist for Bloomberg cused on the Treasury yield curve for been unnerved by political tensions for 15.4% of Eurozone GDP and triggers a global slowdown this time that.” While a recent Bank of America Economics in London. “But rather than providing a recession warning, a sig- such as scraps over trade and Brexit. the parties’ hostility toward the around.” Merrill Lynch survey of fund managers a sign that the global expansion is run- nal that becomes more powerful when The slowdown has been most pro- European Union stance is the Morgan Stanley strategist Andrew showed the majority still favour risky ning out of steam, the slowdown seems it’s combined with widening credit nounced in Europe, with a report this biggest challenge to the bloc Sheets this week highlighted a discon- assets, respondents demonstrated the to be explained by bad weather and spreads. week showing Germany, the euro area’s since Britain voted to leave two nect between the fi rm’s expectation of lowest faith that the global economy local idiosyncrasies. A rebound in 2Q Fed policy makers must have watched economic engine, saw its rate of expan- years ago. an economic “cycle that is maturing, will strengthen over the next 12 months looks likely.” these signs and wonder what it is the sion drop by half in the fi rst quarter. Still, some investors have but not ending,” and the “decidedly since February 2016. Forty-one% pre- Signs in the market are currently less market is seeing that they don’t. San Companies such as Continental and played down the broader less rosy” view of markets. dicted a recession in 2019. positive than economic data. A BofA Francisco Fed President John Williams Volkswagen have pointed the fi nger at impact on the euro and Sheets attributed the divergence to Investors should probably pay more model, based on bond yields and the said this week he’s “very positive” pressure from the stronger euro, which questioned whether the Italian talk of synchronised global growth al- attention to signs of stress in the fi nan- Standard & Poor’s 500 Index, suggests a about the economic outlook both in the has risen 13% since the start of 2017, parties will really follow through ready being priced in, and an expecta- cial markets than economic data. After 25% probability of a US recession in the US and abroad. while rising oil prices are also increas- on such plans. tion among investors that they need to all, the global recession of 2008 was next ten months, up from 10% last year. Markets are often leading indica- ing costs. Only 5% of Italian govern- brace for the end of ultra-loose central preceded by six years of global expan- This week has also seen turbulence tors of a broader downturn. Among all To be sure, most economists are bet- ment bonds are held by non-EU bank policies which have helped to de- sion until the sub-prime crisis hit. The in markets in Argentina, Indonesia and the 20% drops that have hit American ting on rebounding growth in the sec- residents, making the chances liver above-average asset returns de- 2001 economic slump was triggered by Turkey. At least one economist is get- stocks since the Great Depression, 10 ond quarter, attributing recent weak- of a massive flight of capital spite below-average growth. The credit the dotcom bubble burst and followed ting worried – Harvard’s Carmen Rein- preceded US recessions. Only four re- ness to temporary factors such as poor unlikely. A powerful rally by the market already troughed earlier this nearly 8 years of synchronized global hart, co-author with Kenneth Rogoff of cessions occurred without a bear mar- weather, holidays and strikes in Europe. dollar is also hurting the euro. year and the next asset to top out will growth. This Time Is Diff erent: Eight Centuries ket warning, according to data com- Even the eff ect of swings in some as- On Friday the greenback probably be stocks, he said. “A raft of countries have reported of Financial Folly, said on Wednesday piled by Bloomberg. set prices may be less pronounced. An edged higher against the yen “By the third quarter this year, that’s GDP fi gures for 1Q in recent weeks and that emerging markets are in worse Recent months have seen increas- analysis by Bloomberg Economics this and set a fresh four-month high, when we think the forward earnings for the picture for advanced economies is shape now than during the global fi - ing evidence that the global upswing week showed the global economic im- buoyed by a further rise in US the S&P 500 stop going up,” Sheets told clear – growth hit the skids at the start nancial crisis in 2008. of 2017 is giving way to a more moder- pact of oil hitting $100 a barrel won’t be Treasury yields that suggests an Bloomberg TV this week. “It will be of the year,” writes Jamie Murray, chief A lot of investor attention is also fo- ate period of growth. Markets have also as big as when that happened in 2011. upbeat outlook for the world’s largest economy. The dollar’s index against a basket of six major currencies stood at 93.570 and briefly surpassed a five-month high of 93.632 set earlier this week. At top of Fed, a dispute on policy picks up steam The dollar has risen 5% since mid-February and investors are betting that US interest rates Reuters San Francisco Fed President John the neutral rate of interest is much low- Tuesday, flagged some discomfort economy, he has said in the past. Wil- will need to rise further to curb San Francisco Williams launched a critical salvo in er than in the past, stands to become with such measures, which began in liams has also said that “time is press- inflation. That has forced inves- the debate on Tuesday with a speech even more infl uential when he takes the depths of the financial crisis to ing” for a rethink of the Fed’s 2% infl a- tors who took big positions underscoring his view that the Fed has over as chief of the New York Fed next stabilise banks and were later were tion target. against the dollar anticipating ederal Reserve Chair Jerome only a few more rate hikes ahead of it month, a position that will make him a expanded to help bring down high A new policy framework, he has said, it would fall in 2018 to rush to Powell’s top deputies are edg- before rates reach a level of borrowing permanent voter on the Fed’s policy- unemployment and lift excessively conceivably could give the central bank unwind and cover their posi- Fing towards a clash that could costs that allows the economy to coast setting committee. low inflation. more room for manoeuvre even with a tions, pushing the greenback shape the pace of interest-rate hikes in along, without stimulating or slowing His view contrasts with recent opti- Though the Fed’s initial programme low neutral rate by allowing it to defer even higher. coming months, as well as how the Fed its progress. mism from some economists and cen- of so-called quantitative easing rate hikes after a recession even if in- “We continue to anticipate dol- should prepare for and combat the next This neutral rate, which can only be tral bankers. “made sense,” Clarida said he was fl ation pushes up to, or even past, its lar gains,” Hans Redeker, global economic downturn. estimated and not observed, serves as Among them is the Fed vice chair not sure how he would have voted on long-run target. head of currency strategy at Mor- The fault lines are technical as well as a sort of speed limit on interest-rate for financial supervision, Randal subsequent rounds, and said in re- Several other Fed policymakers, in- gan Stanley in London, said in a philosophical and include a debate over hikes and is at the heart of the current Quarles, a Trump administration ap- sponse to a question from Republi- cluding Fed Governor Lael Brainard and note. “Global growth divergence whether the economy has shifted into policy debate. pointee who in February said he be- can Senator Pat Toomey that he was Chicago Fed President Charles Evans, is continuing, with US retail sales a higher gear, giving the Fed room for “It’s important to distinguish be- lieved there is a “real possibility” that “very sympathetic to your view that have lent support to a debate on the and industrial production con- more interest-rate hikes and perhaps tween the current strong economic the economy could shift to a higher any discussion and thinking about QE framework. trasting with growth weakness in reducing the need for controversial conditions and the key longer-run growth trajectory. would have to take a serious look at Quarles by contrast has suggested Europe and Japan,” he said. tools like bond-buying to fi ght future drivers underpinning interest rates,” Quarles’ view suggests that the Fed costs as well as benefits.” that there is little need to rethink the In a note to clients, strate- recessions. he said at the Economic Club of Min- has a bit more room to raise rates with- Williams for his part on Tuesday framework if inflation rises back to gists at Citibank also said the They come as tax cuts and govern- nesota. out braking the economy, which would called bond-buying an important part the Fed’s 2% target, as it has lately dollar rally would not last long. ment spending boost growth and infl a- Despite economic tailwinds like tax in turn give it the fl exibility to cut rates of the policy-easing tools that the Fed done. The US budget deficit, which tion, giving policymakers the breath- cuts and government spending, “the more deeply in the next downturn, “is going to have to turn to” to fi ght fu- Clarida did not weigh in on that de- is projected to balloon to more ing room to debate whether to retool longer-run drivers still point to a ‘new and perhaps avoiding the need for un- ture downturns. bate on Tuesday, or on his view of the than $1tn in 2019, they said, the Fed’s basic policy approach to give normal’ of a low (neutral rate) and rela- conventional measures like bond pur- Rate cuts alone, from what will be a neutral rate. would contribute to a drop of themselves more fi repower even if tively low interest rates.” chases. relatively low starting point and only But if he and fellow nominee Michelle 5% in the dollar index over the slower future economic growth is una- Williams, whose research has helped Fed Board nominee Richard Clar- able to fall as far as zero, would not pro- Bowman are confi rmed it is a topic that next 12 months. voidable. convince most of his colleagues that ida, at his confirmation hearing on vide enough fi repower to stimulate the will heat up in coming months. Stocks an unlikely shelter from debt, dollar and EM storms

By Jamie McGeever or rallied. There is a question mark over with yet another bout of messy Italian biggest annual decline last year since M&A so far this year has reached shouldn’t have. Last September the 10- London how long stocks can remain immune politics, which hit bonds hard, while 2003. President Trump’s tax cuts, $1.85tn, up 67% on the same period last year yield was close to 2%. from this tightening of global financial UK stocks have ignored deteriorating which were finally pushed through in year. Bonds then embarked on a near- conditions, bubbling inflationary economic data and growing confusion December, have also boosted future Cross-border M&A has doubled to uninterrupted slide and the yield US bond yields are the highest in seven pressures and geopolitical tension. at the Bank of England. earnings expectations and unleashed a $836bn. If buybacks and merger- nudged 2.95% in February, so the break years, the dollar is strengthening, But, for now at least, investors aren’t Based solely on exchange rate wave of share buybacks and corporate mania are sweeping across developed above 3% when it finally came a few emerging markets are wobbling, and oil interested in the answer. Investors diff erentials, these markets might have merger and acquisition activity. markets, the same cannot be said of weeks ago would hardly have spooked is up to $80 a barrel. poured $11.9bn into global equity funds been expected to rise as much as they US stock repurchases in Q1 were emerging markets. equity investors. Yet there is an unlikely oasis of calm out in the latest week, mostly into US funds, have. $137bn, the strongest quarter in two Argentina and Turkey, which boast two These are reasons why stocks have held there: stocks. according to BAML. But Wall Street and Asia ex-Japan, which years. of the largest current account deficits up so far, but there’s no guarantee they There are many possible reasons for That’s the biggest inflow in two months are most exposed to higher US yields Apple announced a $100bn buyback in the world, have been hit particularly will remain supportive. this, including: US tax cuts boosting and the fourth weekly inflow in a row. and stronger dollar, are up too. plan earlier this month, giving credence hard by the dollar and US yields. The pain from increasing dollar earnings expectations and share Exchange rate moves have been a boon Albeit just. to research firm TrimTabs’s view that There are country-specific factors at strength and higher US yields could buybacks, exchange rate moves, a to Japanese, euro and UK stocks. The VIX index of implied volatility, still buybacks in 2018 will “smash totals play there, like Turkish president Tayyip spread through corporate America. sense a 3% Treasury yield was already Since April 17, when the dollar, US bond considered the benchmark measure of from all other previous years”. In recent Erdogan exerting his influence over Emerging market turmoil could deepen. priced in, and a belief that the turmoil in and emerging market moves cranked investor fear surrounding U.S stocks, weeks, T-Mobile and Sprint agreed to a monetary policy. The positive impact from the tax cuts the emerging world is and will remain up a gear, the yen has fallen 3.5%, the has drifted to 13%, its lowest since just $26bn all-stock merger, and Marathon But investors are generally betting, for will fade. isolated to certain countries. euro’s down 4.5% and sterling is off before the ‘volmageddon’ spike in early Petroleum agreed to buy rival Andeavor now at least, that these two crises will Any one of these could alter investor Since the 10-year US yield and dollar 5.5%. February. for more than $23bn in the largest- remain localised. sentiment towards stocks. And quickly. really began to take off in mid-April, In that time the Nikkei has gained 5%, Wall Street got a shot in the arm from ever tie-up between US oil refiners. It’s And while the 10-year Treasury yield’s increasing the pressure already bearing the euro STOXX 50 is up 2.8%, and the first quarter earnings. not just US M&A activity that’s taking break higher to a seven-year high of „ Jamie McGeever is a columnist for down on emerging markets, the world’s FTSE 100 is up 7.5%. They rose 26% from the same period a off . According to Deals Intelligence, 3.12% is eye-catching, it hasn’t taken Reuters. The views expressed are those major equity indices have held steady Eurozone stocks have also coped year ago, in part thanks to the dollar’s a Thomson Reuters company, global anyone by surprise. Or at least it of the author. Gulf Times Saturday, May 19, 2018 11 BUSINESS

AstraZeneca insists future is bright aft er big Crestor sales hit

Reuters miss we actually regard this as London a positive set of numbers,” they wrote in a note to clients. Imfinzi, AstraZeneca’s key bet AstraZeneca’s first-quarter profit in lung cancer immunotherapy, was hit by generic competition has stolen a march over rival to cholesterol fighter Crestor drugs from Merck & Co, Bristol- and higher costs, but the Myers Squibb and Roche in drugmaker expects a better treating certain mid-stage second half and said it remained patients, although it lags on track for a promised return elsewhere. to sales growth in 2018. The group’s total product sales Core operating profit tumbled in the three months rose a 46% to $896mn, well below modest 3%, helped by a weaker market forecasts, and Crestor dollar, but were down 2% in sales fell 38% as cheap copycat constant currencies, which is versions of the drug stole the benchmark AstraZeneca market share in Europe and uses for measuring its return to Japan. growth this year. Chief Executive Pascal Soriot Total revenue fell 4% in said yesterday the performance dollar terms to $5.18bn, was in line with his expectations, reflecting investment in new adding that the company’s drug launches and a lack of latest arrivals — Imfinzi for divestments compared with cancer and Fasenra for severe a year earlier. Core earnings asthma — had both got off to a per share, which exclude some strong start. items, slumped 51% to 48 cents. An IKEA Group store in Dietlikon, Switzerland. IKEA will open its first stores in South America under a franchise agreement with Chilean retailer Falabella, as the world’s biggest China sales, up 31% at more Analysts, on average, had furniture retailer looks for new growth markets to keep challengers at bay. than $1bn, also continued to be forecast earnings of 60 cents on a bright spot and Soriot said the revenue of $5.28bn, Thomson hit from Crestor patent expiries Reuters data showed. would decline materially in the For the year, the company second half. continues to predict EPS of “The headwinds that we are $3.30 to $3.50. experiencing from patent Soriot, who saw off a 2014 expiries will be very much takeover bid from Pfizer in part behind us by the end of this by promising annual sales of year,” he said. $45bn by 2023, has presided IKEA pushes into Still, the shares fell more than over a volatile period at 2% as investors focused on AstraZeneca. the profit miss and the battle AstraZeneca shares suff ered AstraZeneca faces as it strives their biggest ever daily fall last to replace former blockbuster July on disappointing initial medicines. results from a lung cancer The drugmaker has suff ered immunotherapy trial dubbed the industry’s biggest patent Mystic. The stock has since South America with cliff since 2012, wiping out more rallied, helped by good news than half of its sales, although from two other studies. analysts are now forecasting More data from the Mystic that it will show good growth in trial is due in the second the years ahead as new drugs half of this year. Despite the deliver. recovery in AstraZeneca’s While sales of some of these shares in recent months, some products are small at present, investors are unhappy at the partner Falabella Deutsche Bank analyst Richard bonuses Soriot has been paid Parkes said Imfinzi and Fasenra and the company could face IKEA to open first stores in South IKEA’s aim is to boost its customer Asia,” Sandro Solari, CEO of Falabella, ($45bn) in 2017 or 5.2% growth. IKEA’s had beaten expectations by a revolt over executive pay at America; in franchise agreement base to 3.2bn in 2025 from around 1.2bn said in a statement. “IKEA will comple- rivals span e-commerce sites like Ger- 39% and 103% respectively, its annual meeting. “We are in with Falabella; says selling through today, in stores and online. ment the current off er of products and many’s Home24 and US giant Amazon to auguring well for the future. ongoing discussion with the third parties could start this year; It wants to open at least nine stores in services of our home improvement sub- store chains such as Britain’s Argos and Barclays analysts shareholders to address their sees sales growth at 5% to 6% from Chile, Colombia and Peru over a period sidiary Sodimac.” France’s Conforama. agreed.”Despite the headline concerns,” Soriot said. all franchises in 2018 of 10 years and will sell through online The fi rst store is expected to open in Home24, one of its newer challengers, sales channels in the three countries, the city of Santiago at the end of 2020, announced a stock market listing yester- Reuters IKEA said late on Thursday. with Lima and Bogota to follow, but the day and is pushing into Brazil, as yet un- Stockholm Inter IKEA Group chief executive Tor- company is looking at several markets in tapped by its much bigger rival. bjorn Loof said South America is one of South America, Loof said, declining to IKEA said last year it would run tests IKEA’s key future growth markets. give any sales targets. in 2018 of selling its goods through third KEA will open its fi rst stores in South He said Chile, Peru and Colombia, “Giving an exact fi gure is always hard. parties. America under a franchise agreement with a combined population of almost These are new countries and new mar- Loof said negotiations with third par- Iwith Chilean retailer Falabella, as the 100 mn people, had a market potential kets,” he told Reuters. ties were ongoing, and he expects to be world’s biggest furniture retailer looks for home furniture of more than €8bn IKEA Group, whose founder Ingvar able to say more later this year. for new growth markets to keep chal- ($9.4bn). Loof said that while IKEA’s Kamprad died in January at the age of “If everything goes as planned it could lengers at bay. franchise partner Falabella will invest 91, last year grew retail sales by 4% to be this year. The Swedish fi rm is responding to $600mn, entering South America will €34.1bn. It could also take until next year. But slower sales growth by pushing into not come with any “physical invest- Inter IKEA is the brand owner and we are optimistic and working hard,” he new markets like India while developing ments” for IKEA, which will contrib- franchisor while IKEA Group is the big- said. A logo is displayed on a sign outside AstraZenica’s factory in smaller city centre store formats. ute mainly with staff, support and gest franchise owner with 363 stores in Such a move would mean IKEA’s cus- Macclesfield, UK. AstraZeneca’s first-quarter profit was hit by It is also investing in its online serv- know-how. 29 markets, out of a total of 418 stores in tomers may soon be able to buy its fl at- generic competition to cholesterol fighter Crestor and higher ices to adapt to the surge in e-commerce “We will bring to the three countries 49 markets. pack furniture and other home furnish- costs, but the drugmaker expects a better second half and said it and home delivery which has dulled the the full experience of IKEA, with stores For all of Inter IKEA Group’s fran- ings through the likes of Amazon, which remained on track for a promised return to sales growth in 2018. appeal of its out-of-town warehouse and online sales such as those already chises, Loof said he was expecting sales has said it plans to venture into furniture, stores. existing in Europe, the United States and to grow by 5-6% this year from €38.3bn or Chinese rival Alibaba. UK technology sector Infi neon to build new chip plant in Austria investment doubles Reuters Vienna despite Brexit

ermany’s Infi neon Technologies Bloomberg rival hub for European startups, plans to build a €1.6bn ($1.9bn) London particularly as founders worry Gchip facility in Austria, opting about whether they will be able to add capacity in Europe rather than to hire foreign workers easily in Asia given trade and political uncer- London’s technology sector is after Britain leaves the European tainty there. continuing to thrive despite the Union in March 2019. The plant will become the fi rm’s looming prospect of exiting the The report noted that Berlin was the second facility after one in the east European Union, according to a new only other European technology German city of Dresden that can make report. ecosystem in the global top 10 high-end chips on 300 millimetre wa- British tech companies raised across a range of metrics. fers — a large format where Infi neon £4.5bn ($6.1bn) in 2017, almost “Our new relationship with the EU claims a technology and cost lead over double the amount raised the year will undoubtedly force us to be its competitors. before, according to the report even more adaptive, innovative The investment is a coup for Chan- from Tech Nation, an organisation and ambitious,” Gerard Grech, chief cellor Sebastian Kurz’s right-wing partly funded by the government executive off icer of Tech Nation, coalition government, with Infi neon to promote the UK’s digital said in a statement. preferring Austria to its other foreign economy. Overall, the UK’s digital businesses base in Malaysia, which has just seen a The country ranks behind only the are growing sales 2.6-times faster dramatic election upset. US and China for venture capital and adding employees at five times The investment, the largest of its investment, the report said. the rate of the rest of the economy, kind in Europe in years, is a rare win London is ranked as the world’s highlighting why the government for the continent in a hardware indus- The headquarters of Infineon in Munich, Germany. Infineon plans to build a $1.9bn chip facility in Austria, opting to add second-most “connected” is so interested in promoting the try that has come to be dominated by capacity in Europe rather than in Asia given trade and political uncertainty there. technology hub after Silicon Valley, sector. Asian players. based on entrepreneurs who report Matt Hancock, secretary of state for Infi neon has long been present in for us to be able to serve them.” driving cars. Villach will also explore standard incentives. The decision also a significant relationship with two culture, media and sport, said the Austria and the plant, in the Carinthian Ploss, who is German, has spent using silicon carbide, a semiconductor refl ects a massive vote of confi dence by or more people based in the city. country needed to ensure that the city of Villach, will be based on an ex- much of his career in Austria. seen as more effi cient than traditional management in an industry known for Citing data from Startup Genome, a benefits of the digital tech boom isting research facility that specialises He was country CEO for Infi neon in silicon in managing electric-vehicle its boom and bust cycles. group that helps cities build digital extended beyond London to other in developing the high-performance the early 2000s, after it was spun out batteries that has been championed by The Dresden fab is expected to hit ecosystems, Tech Nation said that parts of the country. chips produced at the Dresden ‘fab’. from conglomerate Siemens. rival STMicroelectronics. maximum capacity in 2021, the year London topped Silicon Valley for the But the Tech Nation report Construction will begin in early 2019 Infi neon’s power-management Kurz said he was delighted by an in- Villach is due to enter production, the number of digital businesses with showcased how diff icult that task with investment to be spread over six chips are used to extend the battery life vestment of such size in a country of company said. Infi neon, which accord- foreign customers - 33% compared may be. London was the only British years. The facility will enter produc- of smartphones and laptops; maximise just 8.8mn people.”Especially in key ing to IHS Markit is the global market to 30%. tech hub to rank in the top 20 tion in early 2021, target annual sales of the driving range of electric vehicles; technologies it is important for us in leader in power chips, recently nudged London also boasts one of globally in terms of market reach, €1.8bn, and create 400 new jobs. and optimise the performance of wind Europe not only to catch up, but to get up its guidance for revenues in its the most international startup international connections and “We will be in a position to deliver turbines or solar collectors. ahead,” he told reporters. business year to September 30, citing workforces in the world, with 54% funding. from two locations,” Infi neon CEO Re- That makes its product range a play Austria made available a package of strong orders. of the employees of young digital The report also showcased how far inhard Ploss a news conference in Vi- on the major industry trends of digi- subsidies to land the investment. It now expects revenues to grow by companies having been born the tech sector in the UK has to go enna attended by Kurz and other Aus- talisation and renewable energy. Details weren’t revealed but offi cials between 4 and 7%. outside the UK. to close the gender gap. Just 19% of trian government leaders. The company, headquartered in Mu- said the sums involved would be cov- Infi neon’s shares traded down 0.9% That’s still fewer than Berlin, the UK’s digital workforce is female, “Our customers are pouring in nich, is also developing chips to enable ered by existing spending plans. in Frankfurt, valuing the company at which is fast-emerging as a compared to 49% across all sectors. through the doors and it’s important futuristic technologies such as self- Ploss said Infi neon had only used €27.7bn ($32.6bn). Saturday, May 19, 2018 GULF TIMES BUSINESS

QSE WEEKLY REVIEW Brighter prospects in global oil front help lift sentiments

By Santhosh V Perumal substantial bullish outlook drove the scrips also performed well on a yearly Group, Mesaieed Petrochemical net sellers to the extent of QR181.32mn in transactions to 7,606. The real Business Reporter Qatari bourse up 1.62% this week, basis. Holding, Nakilat, Ezdan and Dlala were compared with net buyers of estate sector’s trade volume soared which saw as many as eight listed The market witnessed a total volume among the losers this week which saw QR17.77mn a week ago. Domestic funds 49% to 5.63mn shares, value by 16% companies being showcased before of 0.05mn QATR (Masraf Al Rayan banks, telecom and industrials sectors were also net profit takers to the tune to QR63.29mn and deals by 30% to Brighter prospects in the global oil global investors at the London global sponsored exchange traded fund or together accounted for about 71% of of QR117.61mn against net buyers of 2,349. front helped lift sentiments in the investors meet. ETF) valued at QR2.75mn trade across total trade volumes. QR7.03mn the previous week. There was 20% expansion in the Qatar Stock Exchange, which saw 142 More than 53% of the traded 74 transactions and as many as 0.02mn The banking and financial services Non-Qatari individuals’ net buying insurance sector’s trade volume points addition to its sensitive index constituents extended gains this week QETF (Doha Bank sponsored ETF) sector accounted for 36% of the weakened perceptibly to QR2.57mn to 1.08mn equities, 42% in value to and more than QR9bn to capitalisation which saw as many as 0.13mn sovereign valued at QR1.57mn change hands total trading volume, telecom (19%), compared to QR5.86mn the week QR37.34mn and 11% in transactions to this week. bonds valued at QR1.31bn trade across across 24 deals this week. industrials (15%), real estate (13%), ended May 10. 674. Buying was squarely visible within five deals. The Total Return Index soared 1.62% transport (11%), consumer goods (3%) Total trade volume fell 10% to 43.54mn However, the telecom sector’s trade banking and insurance counters, Notwithstanding the overall bullish and All Share Index 1.7%; whereas Al and insurance (2%) this week. shares, while value grew 65% to volume plummeted 56% to 8.46mn helping the market stay above 8,900 momentum, local individuals and Rayan Islamic Index (Price) was down The banks and financial sector’s QR1.61bn and transactions by 25% to stocks, value by 48% to QR120.38mn levels for most part of this week which domestic institutions turned bearish 0.14% this week. share in total trade turnover was 20,716. and deals by 24% to 2,250. saw QSE chief executive Rashid bin this week which saw QNB and The banks and financial services index 59%, industrials (18%), telecom (7%), The transport sector’s trade volume The industrials sector reported 41% Ali al-Mansoori say that increased Commercial Bank dominated trading shot up 5.25% and insurance 4.21%; transport (5%), consumer goods and more than doubled to 4.92mn plunge in trade volume to 6.5mn shares investments in new projects related to ring in volumes and value. while telecom declined 2.9%, realty realty (4% each) and insurance (2%) this equities and value almost doubled to but on 23% expansion in value to expansion of liquefied natural gas and On a year-to-date basis, the bourse’s (1.83%), consumer goods (1.43%), week. QR77.25mn on more than doubled deals QR286.08mn and 16% in transactions those aimed at ensuring self-suff iciency benchmark showed more than 4% transport (1.39%) and industrials (1.04%) Non-Qatari institutions turned net to 2,471. to 4,236. as well as higher foreign ownership expansion mainly on robust demand this week. buyers to the tune of QR296.52mn The banks and financial services The consumer goods sector’s trade limits augur well for the economy and for banking, consumer goods and Major gainers included QNB, Qatari against net sellers of QR30.56mn the sector saw 63% surge in trade volume volume tanked 32% to 1.17mn equities, the bourse. industrials sectors, whose indices were Islamic bank, Commercial Bank, Qatar week ended May 10. to 15.78mn stocks to more than triple value by 33% to QR68.09mn and deals Foreign institutional investors’ up in double digits. Large and midcap Insurance and Milaha; even as Medicare However, local retail investors turned value to QR956.46mn on 60% jump by 30% to 1,130.

US gun lobby takes aim at ‘gun-hating’ Lloyds sells Irish banks Citi, BofA

Reuters policies, said GOA’s executive Washington director, Erich Pratt. The group this month wrote to its 1.5mn members urging them mortgage business to The US gun lobby is taking aim at to petition House lawmakers to “gun-hating” banks after Citigroup vote against the bill if the provi- Inc and Bank of America said they sion is not added. would no longer provide certain “Our members will take direct banking services to gun-makers, action to such discriminatory according to industry lobbyists. lending practices by these banks,” The attack by Gun Owners of Pratt added. Barclays for $5.4bn America and the National Rifle As- Citigroup and Bank of America sociation (NRA) could imperil de- declined to comment. Deal to generate pretax loss of regulatory gains the banks had Charles Adcox, a member of around £110mn; will add hoped to win from Republican GOA, has stopped accepting Citi better-than-expected 25 bps lawmakers and regulators, many and Bank of America credit cards to Lloyds CET1 capital; Lloyds’ of whom are staunch defenders at his Missouri gun shop Black dominant mortgage market share of the Second-Amendment right River Armory in response to their seen threatened to bear arms, according to indus- new policy. try sources. “My more loyal customers Reuters In March, Citigroup put restric- don’t mind paying in cash. London tions on new retail business Some even wish to drop their clients which sell guns to require credit-card companies for gun- their customers to pass back- friendly alternatives,” Adcox told loyds Banking Group has sold its ground checks, following Febru- Reuters. The NRA is running an Irish residential mortgage port- ary’s Florida high school shooting advertisement campaign criticis- Lfolio to Barclays for around £4bn that killed 17 people. ing Citi and Bank of America ($5.4bn) in cash, as part of a plan to focus Weeks later, Bank of America online, adding that Citi may be on its core British market. said it would no longer lend to encouraging retailers to violate The deal was the last action Lloyds companies that make military- anti-discrimination laws. needed to take to complete its exit from style firearms for civilians. “The NRA will continue to the Irish market, following its closure of Gun-control activists and promote awareness of those its retail banking operation there in 2010. Democrats praised the policy, companies who seek to infringe Lloyds is left only with around £4bn urging other financial firms to upon the Second Amendment worth of additional Irish mortgages that follow suit. But gun owners and rights of American citizens,” Wil- it will allow to expire over time. manufactures say it encroaches liam Brewer, partner at Brewer, At- Lloyds will now be able to focus on on Americans’ constitutional torneys & Counselors and counsel tackling an increasing threat to its domi- rights and they are fighting back. for the NRA, said in a statement. nant position in the British markets from Gun Owners of America (GOA), Mike Crapo, chairman of the new entrants eager to cut prices to win a Washington-based lobby group, Senate Banking Committee, business. has asked lawmakers to add a which writes banking rules and Of the assets sold yesterday, £300mn provision to a draft law rewrit- oversees Wall Street regulators, worth are impaired — meaning borrow- ing bank rules that it says would wrote to the chief executives of ers are struggling to pay them. prevent “gun-hating banks” from both lenders in April chastising They generated a pretax loss of “discriminating” against firearms them for trying to “manage social around £40mn last year, Lloyds said in makers. policy”, according to reports. a statement. A year to the day after its The bill reforming the 2010 JW Verret, professor of Bank- return to private ownership following the Dodd Frank act is set to be voted ing Law at Scalia Law School, said British government’s last sale of its stake on by the House of Representa- the banks’ gun policies appeared in Lloyds, Britain’s biggest lender faces a A sign hangs outside a Lloyds Bank branch in London. Lloyds has sold its Irish residential mortgage portfolio to Barclays for tives next week. to be a “terrifically poor strategy” battle to maintain its grip on the mort- around $5.4bn in cash, as part of a plan to focus on its core British market. While financial-industry at a time when they had stood gage market. lobbyists say the bill is likely to to gain from a political push to Lloyds shares have fallen 7.6% in its for banks diffi cult. “We are concerned sized banks like Virgin Money, CYBG and only lenders such as HSBC UK. “I do pass without the provision on cut red tape across the financial fi rst year free from government owner- about the competition from the mort- Metro Bank, but also from HSBC which think that Lloyds have some challenges. gun-lending, the firearms issue is industry — potentially reducing ship after a bailout. gage market from new entrants. has to grow its market share to meet Competition is heating up. It’s not just threatening to turn the powerful their access to lawmakers and That makes them the worst-perform- We think Lloyds has the most to lose; it profi t goals in its newly separated UK an issue for Lloyds,” said Jerry Del Mis- gun lobby into an adversary for regulators. ing stock among Britain’s four biggest has the biggest share of the market,” said banking unit. sier, founding partner and chief invest- banks on other regulatory issues “There might be a timing chal- banks with rivals RBS and HSBC climb- a US-based hedge fund manager with The rules designed after the fi nancial ment offi cer at Copper Street Capital, longer term. lenge in getting that particular ing an average of 10% in the same period. about $1.2bn in assets. crisis to partition British banks’ core which has $162mn in assets. “Citigroup and Bank of America provision in this bill but it means Investors fear that Lloyds as the big- The fund manager is shorting Lloyds domestic deposit and savings franchises “If you think about what’s happening are threatening our Second- that the number of off ices that gest mortgage lender, with a market shares, meaning he will profi t if the stock from their riskier and more internation- to the UK banking market with ringfenc- Amendment rights. They do not takes Citi’s phone calls in the next share of 20%, has most to fear from a declines. ally-focused investment banking units, ing, you have a number of banks, includ- realise how much more there is year or two on the Hill has just low interest rate environment that makes The threat to Lloyds’ position comes have eff ectively created ‘new’ competi- ing challenger banks chasing the same to lose than to gain,” by their new been cut in half.” fi nding profi table lending opportunities not just from so-called challenger mid- tors in the market in the form of British- business,” he added. Draghi’s legacy may include next ECB chief economist after Praet

Bloomberg post than the president’s, in terms of ECB’s board members based on a rec- and is considered to be one of the more Frankfurt infl uencing monetary-policy deci- ommendation by fi nance ministers hawkish members of the Governing sions,” said Panicos Demetriades, a and after vetting by the European Par- Council. member of the decision-making Gov- liament. That process is likely to start If the Executive Board makes Praet’s ario Draghi’s successor as erning Council from 2012 to 2014. The in the months running up to Praet’s successor the chief economist, the European Central Bank presi- “chief economist sets the tone” and his departure. next president may have little choice Mdent may fi nd the most im- conclusions are usually “a good indi- One likely candidate is Irish cen- but to stick with them, at least initially. portant personnel decision is taken cator for what’s to come.” tral-bank governor Philip Lane, who While another shakeup will come in months before they start. Draghi and the other five Execu- already fl agged his interest in an Ex- January 2020 when Benoit Coeure, the Chief economist Peter Praet, one tive Board members decide them- ecutive Board position by running head of market operations, is replaced, of Draghi’s closest colleagues and an selves how to share their portfolios. this year for vice president, eventually no new positions are scheduled to open energetic proponent of the ECB’s un- While that means the newest addi- dropping out in favour of Spain’s Luis up after that until December 2020. conventional stimulus, is due to leave tion won’t necessarily become chief de Guindos. Lane was formerly a visit- That could leave whoever gets the in May 2019 when his term on the Ex- economist, the options will be lim- ing scholar at the International Mone- post acting as a much- needed coun- ecutive Board ends. His replacement in ited if the institution keeps to its tra- tary Fund and the Federal Reserve Bank terweight to the “worryingly large” the role will have an outsized sway over dition that the holder should have a of New York, and holds a doctorate in number of policy makers who oppose monetary policy, presenting proposals doctorate in economics. economics from Harvard University. QE even if it means accepting infl ation and providing the economic rationale Among the 25 Governing Council Estonian Governor Ardo Hansson, a below the ECB’s goal, according to Ri- for action. members, comprising the board and former World Bank economist who also chard Barwell, head of macro research The intellectual leadership required the 19 national central-bank heads, has a PhD from Harvard, could run, ac- at BNP Paribas Asset Management. makes the position critical for conti- fewer than half have economics PhDs, cording to European Union offi cials fa- “The ECB needs a compelling ad- nuity when Draghi leaves fi ve months according to resumes on the websites miliar with informal discussions. The vocate for doing whatever it takes to later. That could be especially con- of the institutions. That includes just Praet: Influential role in setting monetary policy. people asked not to be named because reflate the economy,” he said. “You sequential should the presidency go two of the board: Draghi and Praet. the talks are confi dential. can’t count on the next president to someone who has criticised ECB The qualifi cation could be even more etary orthodoxy under Otmar Issing, crisis tools such as targeted long-term In his public comments, Lane tends to do this, and next time the policy policies, such as current favourite Jens important given the deep changes to the fi rst chief economist, the unit has loans and quantitative easing. to side with Draghi. Hansson, on the options may be even more radical so Weidmann. the economics department in recent been transformed as it led the drive to It may be a consideration for euro- other hand, has expressed some con- the chief economist job will be even “It can be even more important a years. Once a bastion of German mon- craft new - and often controversial - area governments, who appoint the cerns over unconventional stimulus more important.”