COSTLY DEBT | Page 2 UBER WOES | Page 11 Saudi reforms CEO quits risk slowing aft er investor on blockade mutiny Thursday, June 22, 2017 Ramadan 27, 1438 AH GULF SHARE DUMPING: Page 12 GULF TIMES Blockade doesn’t aff ect our business, BUSINESS says QSE chief QIIB eyes LSE for listing of $700mn 5-year sukuk QIIB plans to list its $700mn five-year sukuk on the Robustness of Qatar economy, bank London Stock Exchange (LSE) by October, depending on the market conditions, CEO Abdulbasit Ahmad al- Shaibei has said. “Personally, I had a sector proved again, says al-Shaibei conversation with the CEO of the London Stock By Pratap John Suffi cient cash is available in the The Qatar National Vision 2030 Asked whether Qatari banks Exchange and we are Chief Business Reporter system and our customers could has been laid out by the government with cross-border business, es- committed to enhance our transfer money in any currency an- to ensure prosperity and sustainable pecially in the GCC countries relationship with the UK, ywhere, right from the second day growth for people of this country. that have imposed road, sea and especially in the financial he strength of Qatar’s econ- of the blockade. There is no basis for “Getting raw material is no longer air blockade on Qatar, would be sector,” al-Shaibei told Gulf omy and the robustness of its concerns that major currencies in- a major challenge…we have a great impacted, al-Shaibei said, “Their Times yesterday. Tbanking sector were proved cluding the dollar are in short sup- airport…port, and so we can always business in these countries is rela- He said the $700mn five- beyond doubt yet again with normal ply. It is not,” al-Shaibei noted. source material from new markets. tively small in comparison to their year sukuk was being issued business activities being resumed He said Qatari banks were among In the last few days, we have seen operations in Qatar or elsewhere in as an existing sukuk got within 24 hours of the blockade on the few that could meet the in- that the new markets have provided the world.” matured. the country imposed by its neigh- ternational requirements in terms us competitive prices as well.” On concerns of riyal depreciation “This will provide QIIB with bours, said Abdulbasit Ahmad al- of liquidity as well as the Basel III The QIIB CEO said Qatar’s fun- in view of the ongoing regional situ- cheaper funding, although Shaibei, QIIB chief executive offi cer. regulatory framework on capital damentals remained “as strong as ation, al-Shaibei said, “Our curren- we don’t have to go in for “In Qatar, we have a contingency adequacy, stress test and market li- ever.” cy has been pegged to the dollar. So the sukuk as we are very plan for the worst case scenario. We quidity risk. “Nothing has changed funda- the offi cial rate remains the same. liquid,” al-Shaibei noted. immediately activated the contin- “Also, the Qatar Central Bank mentally in our country. We are still The reported drop in value in the in- “If the market conditions are gency plan following the blockade. has been very supportive, although exporting our prime commodities ternational spot and forward mar- good, the pricing is good, This way, we could eff ectively man- we actually do not need any special – oil and gas – to all corners of the kets is all because of speculators.” we will proceed with the age the situation and ensure suf- support from the QCB now,” al- globe. The whole world is our mar- Al-Shaibei was all praise for ex- sukuk. As of now, we plan to fi cient liquidity in our banking sys- Shaibei said. ket. Our market is not confi ned to patriates in the country and said, Al-Shaibei in an interview with Gulf Times yesterday. He list the sukuk on the LSE by tem,” pointed out al-Shaibei. He said Qatar’s government is the GCC region. The only change “They have shown their love for Qa- said Qatari banks are among the few that could meet the October, but that depends He stressed that Qatari banks are committed to completing all its now is that we have to get into a new tar, expressing solidarity with the international requirements in terms of liquidity as well as on the market conditions,” “very well capitalised”. projects in time. This includes sea route to move our commodities. people of this country at this crucial the Basel III regulatory framework on capital adequacy, al-Shaibei added. “Liquidity is not an issue for us. projects related to infrastructure. That’s all.” juncture.” stress test and market liquidity risk. Gulf Times 2 Thursday, June 22, 2017 BUSINESS Knocking two digits off Turkey stock index may refresh rally Similar move 20 years ago 20 years ago. As the benchmark closed it leads to “a common perception that prompted 64% surge in in on six figures back then, the bourse the index has got cheaper, fuelling A worker descends benchmark; creates perception decided to draw a line through the momentum in inflows,” said Baris escalators towards index has got cheaper: last two numbers. The rebasing at the Buyukdemir, general manager at the trading floor Buyukdemir of Ceros start of 1997 sparked a 64% jump in the Istanbul-based Ceros Securities. inside the Borsa month that followed, with the index After a 27% advance this year, Turkish Istanbul, also known Bloomberg more than tripling during the year. stocks still trade at a discount of almost as the Istanbul Stock Istanbul The exchange is considering trying 30% to emerging-market peers. That Exchange, in Istanbul the approach again and discussing it could narrow if authorities go ahead (file). After a 27% with local market participants, Borsa and trim the index level. advance this year, Turkey’s stock exchange is considering Istanbul Chairman Himmet Karadag “These are the kind of steps that can Turkish stocks still cutting the last two digits from its said by phone. kindle interest in Turkish equities by trade at a discount benchmark index. Giving investors a “It’s not something that will happen boosting momentum with fresh pricing of almost 30% to smaller number to work with could within a few days, but we’re working on behaviour,” said Tugberk Citilci, head of emerging-market trigger further gains for local equities, if it,” Karadag said. research at GCM Securities in Istanbul. peers. That could history is any guide. While adjusting the index reading “Based on behavioural finance studies, narrow if authorities The Borsa Istanbul 100 Index’s ascent has no impact on fundamentals such moves can have an impact on go ahead and trim to 100,000 points on June 13 prompted surrounding Turkish stocks or the way investor sentiment similar to stock the index level. regulators to dust off an idea first used market professionals assess valuations, splits.” Gulf states Blockade on Qatar risks preparing for VAT rollout slowing Saudi reforms, amid rift AFP Dubai il-rich Gulf countries, which for decades have attracted millions of raising cost for Gulf debt Oforeign workers thanks to their repu- tation as tax-free havens, aim to introduce Reuters value-added tax in 2018 to plug budget gaps. Dubai/Riyadh On top of administrative and technical hurdles, however, the project now faces an unprecedented diplomatic crisis after Saudi he blockade imposed on Qatar by some Arabia, the UAE and Bahrain on June 5 sev- of its Gulf neighbours is threatening to ered all ties with Qatar, their partner in the Tpuncture investor appetite for the Gulf Gulf Cooperation Council. region as a whole, translating into potentially Saudi Arabia, the UAE and Qatar are due to higher debt costs for governments and possibly introduce VAT in early 2018, with the other slowing the pace of Saudi Arabia’s economic three GCC members – Bahrain, Kuwait and reforms. Oman – following at a later date. Saudi, UAE, Bahrain and Egypt broke rela- If it goes ahead as planned, VAT is unlikely tions and transport ties with Qatar on June 5. to tarnish the GCC reputation as a low-tax The move has thrown the region — which has region or reduce its appeal to expatriates, ac- been relatively stable — into diplomatic turmoil cording to Monica Malik, chief economist at that is now putting off investors. Abu Dhabi Commercial Bank. “We were used to a relatively peaceful re- An introductory rate of 5% “looks to bal- gion and now the landscape has changed,” said ance raising government revenue and still Brigitte Le Bris, head of emerging debt and cur- having a very attractive business environ- rencies at Paris-based Natixis Asset Manage- ment, both for expatriates and corporations”, ment, which manages about €350bn ($392bn) she said. “We believe the the Gulf will still in assets. overall be seen as a low-tax environment on “We are not yet ready to increase our expo- a global basis.” sure to the region. We need to know whether VAT, a tax paid by the consumer, is also it can spread and aff ect other countries or the unlikely to deter businesses from setting crisis can worsen.” up operations in the Gulf region, according One obvious area is sovereign debt, where to Jeanine Daou, indirect tax leader at PwC the crisis has the potential of raising borrowing Middle East. costs. “From a business perspective, VAT should To date, foreign investors appear to be com- be neutral. What businesses are required to fortable holding Qatar paper due to the size of do is to collect tax on behalf of the govern- the country’s reserves and assets held by its ment on their sales...It is not a corporate sovereign wealth fund, the Qatar Investment tax,” she said.