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Tajikistan eyes Qatar investments in tourism and hydropower

QNB planning to open branches in Saudi and India in overseas pushQatar’s largest public sector bank eyes 50% of net profit from global operations

By Santhosh V PerumalBusiness Reporter

QNB, Qatar’s largest public sector bank, is planning to open branches in Saudi Arabia and India this year as

part of its strategy to earn 50% of net profi t through international operations in future.

The bank has laid out a policy that not only seeks to accelerate its international growth, especially in Middle East, Africa and Southeast Asia (MEASEA) but also pro-tect its dominant market position domesti-cally, QNB chairman and Finance Minister HE Ali Sherif al-Emadi told shareholders yesterday.

“On international front, in 2017 and be-yond, we are planning to open branches in both Saudi Arabia and India, giving us a presence in two of Asia’s largest and most dynamic markets,” he informed the general

assembly, which approved the 2016 results as well as 45% dividends (35% in cash and 10% bonus stocks).

Apart from upgrading its representative offi ces in China and India into a full-fl edged branches this year, the bank, which is aim-ing to be a leading icon in MEASEA by 2020, is also exploring new opportunities in other Asian market. “In 2017, we will build on the successes with a signifi cant focus on growth in Southeast Asia,” said QNB, which is present in 30 countries across three con-tinents.

Stressing that the group’s increasing geo-graphic diversifi cation positively contrib-utes to lowering the inherent risk and vola-tility in business, al-Emadi said in 2016 its international operations contributed 37% to net profi t compared to 31% the previous year.

The bank is now eyeing a 50:50 profi t ratio from international and domestic operations, he said without divulging the timeframe by which QNB would be able to make its inter-national share (in net profi t) to 50%.

“Although recent macroeconomic head-winds do present challenges to our indus-try and our vision, MEASEA markets will continue to be the focal point for global growth,” the bank said, adding these region require further trade and investment fl ows to support the building of the foundations for socio-economic developments such as infrastructure, including transport, real es-tate, power, telecom, healthcare, education and tourism.

Terming Southeast Asia as a “bright spot” in an otherwise sluggish global economy with regional economic growth maintained at 4.8%; QNB said this came mainly on strong growth in Indonesia, Thailand, Phil-ippines and Vietnam.

“Internationally, we will explore new opportunities presented by our growing network, bolster a specialised interna-tional wholesale business, expand our asset and wealth management services, and significantly scale up our interna-tional footprint,” the bank said, adding it would also “selectively explore inor-

ganic opportunities” in the target mar-kets.

In 2016, QNB had completed acquisition of 99.98% stake in Turkey’s Finansbank, the fi fth largest privately owned bank in terms of assets, net loans and total customer depos-its.

Finding that market opportunities still of-fer its exciting growth potential, QNB said “we will continue to broaden and deepen our Middle East and North Africa, sub-Saharan and international network as our interna-tional network gives us a competitive ad-vantage” and this will include further lever-aging partnership with its strategic partner, Ecobank.

On the domestic front, QNB would con-tinue to expand its contactless network as it seeks to grow the digital footprint and is aiming to introduce new technologies such as cheque deposit capability in ATMs, more use of biometric technologies to identify customers, including the behavioural bio-metrics methods and personal fi nance man-agement capabilities on electronic channels.

MPHC posts net profi t of QR995mn in 2016Mesaieed Petrochemical

Holding Company, a Qatar Petroleum subsidiary and

one of the region’s premier diversi-fied petrochemical conglomerates with interests in the production of olefins, polyolefins, alpha olefins and chlor-alkali products, posted a net profit of nearly QR995mn in 2016, MPHC said yesterday.

However, profit was down 8% (QR92.5mn) on QR1.08bn recorded in 2015.

The total assets (as on December 31, 2016) were QR14.4bn compared to QR14.3bn in December, 2015.

MPHC, which holds stocks in Q-Chem, Q-Chem II and QVC, reg-istered an an earnings per share of Dh79 in 2016.

The year-on-year decrease was due to the decline in selling prices (by 7%) despite “improved” sales volumes in the midst of a challeng-ing market, MPHC said.

This reduction was partially off-set by the cost savings arising from the cost optimisation initiatives un-

dertaken by the group. These initia-tives have resulted in improvement in many operating areas and the achievement of an overall cost sav-ings of 6% from the 2016 budget.

The group’s profit was also aided by a tax refund of approximately QR89.8mn booked during the year. The group continued to benefit from the supply of competitively priced ethane feedstock and fuel gas under long-term supply agree-ments.

“These contractual arrangements are an important value driver for the group’s profitability in the cur-rent challenging market conditions,” MPHC said.

A statement issued by MPHC said, “The year 2016 was a crucial year as the group continued to ex-cel in a highly volatile and com-petitive environment. The group witnessed significant instability in selling prices as the product prices declined by 7% on average compared to the previous year on account of the plunge in global crude oil prices. However, the product prices recov-ered in November and December of 2016 following the recent uplift in crude oil prices. The financial and operational results were commend-able despite the fluctuation in pric-es, and exceeded the group’s budget. With the successful completion of the periodic turnaround in some of the plants in the previous year, the production and sales volumes wit-nessed a significant improvement during the year.”

MPHC said its closing cash posi-tion (as on December 31, 2016) after distribution of the previous years’ dividend of QR854mn was a robust QR1.08bn.

Qatar’s quarterly GDP at current prices estimated at QR140.5bn in Q3, 2016: MDPSQatar’s quarterly GDP at current prices was estimated at QR140.5bn in Q3, 2016, the Ministry of Development Planning & Statistics (MDPS) said yesterday. This, the MDPS said, was 5.7% down on the same period in 2015. Compared to previous quarter (Q2 of 2016) revised estimate of QR134.8bn, an increase of 4.2% was noticed. The nominal Gross Value Added (GVA) estimate of the mining and quarrying sector in the third quarter of last year stood at QR43.8bn, down 22.1% on Q3, 2015. Compared to the previous quarter (Q2 of 2016) revised estimate, there has been an increase of 8.7% in the GVA of this sector, MDPS said. The real GVA of this sector in the Q3, 2016 (QR102.7bn), shows an increase of 2.7% over the estimate of Q3, 2015 (QR100bn). However, compared to the previous quarter (Q2, 2016) revised estimate, there has been an increase of 3.2% in the GVA of this sector.The nominal GVA estimate of the non-mining and quarrying sectors in the Q3, 2016 has been placed at QR96.7bn, which shows an increase of 4.2% over the estimate of Q3, 2015 (QR92.8bn). Compared to the previous quarter (Q2, 2016) revised estimate, an increase of 2.3% has been recorded.The real GVA of these sectors in Q3, 2016, totalled QR101.93bn, which MDPS said shows a growth of 4.7% over the corresponding quarter (Q3, 2015) GVA estimate of QR97.3bn.However, compared to the previous quarter (Q2, 2016) revised estimate; there has been an increase of 4.1% in the GVA of this sector.An analysis by industry groups shows the following growth rates year-on-year: manufacturing dropped by 13.6%; electricity, gas and water grew 6.2%, construction 11.6%, wholesale and retail 5.3%, transportation and storage, 7.4%, financial and insurance activities 7.8%, real estate activities 9.7%, and general government activities (public administration, education, health and recreation and other services) by 8.1%.The MDPS report showed that the quarterly CPI for the third quarter of 2016 shows an increase of 0.9% when compared to the previous quarter, and a 2.7% increase when compared to the corresponding quarter of 2015.Qatar’s Producer Price Index (PPI) for the third quarter last year showed an increase of 3.3%, when compared with the previous quarter (Q2,2016), and a decrease of 20.3% when compared with the corresponding quarter of 2015.The increase in the PPI of Q3, 2016 compared to the previous quarter has been mainly attributed to a rise in the prices of crude oil, and natural gas, by 5.9%, while there is a decrease in manufacturing prices, by 1.2%, MDPS said.

Nakilat has assumed full ship management and operations of Q-Max LNG carrier ‘Al Dafna’ from STASCo (Shell Trading and Shipping Company Ltd) with eff ect from February 2, as part of the planned and phased transition announced on October 19 last year. With a cargo carrying capacity of 266,366 cubic metres, Al Dafna is wholly-owned by Nakilat and chartered by RasGas. The vessel, built in South Korea by Samsung Heavy Industries, was delivered in October 2009 and has been in service ever since. Al Dafna is the fifth Q-Max LNG vessel that will come under the management of Nakilat Shipping Qatar Ltd (NSQL), bringing the total number of vessels managed by NSQL to 13, comprising nine LNG and four LPG carriers.

Nakilat transitions LNG ship ‘Al Dafna’ to in-house management

Total dividend QR754mn; QR0.6 per share

The MPHC board of directors has rec-

ommended a total annual dividend

distribution of QR754mn, equivalent

to a payout of QR0.6 per share, repre-

senting 76% of the group’s profit.

HE al-Emadi, along with other board members, addressing the AGM yesterday.

BUSINESS

Gulf Times Monday, February 6, 20174

Dubai said to agree $3bn loan for airport expansionSeven-year facility to pay interest of 200 basis points; lenders had been seeking higher pricing on the loan last year

BloombergDubai

Dubai agreed a $3bn loan with banks to fund the expansion of Dubai World Central airport

and logistics hub as it prepares to host the World Expo in 2020, people famil-iar with the matter said.

The emirate will pay interest of 200 basis points, or 2 percentage points, above the London Interbank Off ered Rate on the seven-year facility, said the people, asking not to be identifi ed be-cause the talks are private. It will also pay a one-time fee of 85 basis on the loan value, they said.

HSBC Holdings is advising the gov-ernment on the talks and an agreement is expected to be signed within weeks, the people said.

The loan, which includes a $2bn conventional tranche and a 3.67bn dirham ($1bn) Islamic portion, is be-ing raised by a special-purpose com-pany to pay for the expansion of DWC – home to the city’s new Al Maktoum International Airport – and associ-ated facilities in the south of the emir-ate, people aware of the matter said in December. The government will pay a margin of 200 basis points over the Emirates Interbank Off ered Rate on the Islamic facility, people said.

Banks had been seeking higher pric-

ing on the loan and wanted the govern-ment to pay a margin of as much as 220 basis points over the benchmark rate, compared with its proposal of 180 ba-sis points plus about 14 basis points in fees, people said in December.

HSBC declined to comment, while Dubai’s department of fi nance didn’t immediately respond. Dubai Interna-tional Airport is already the world’s busiest by international passengers as the city developed into a hub for trans-

continental traffi c between America and Europe with Asia. The emirate is developing Al Maktoum Interna-tional Airport close to the Expo 2020 site with an annual capacity of about 220mn passengers and plans to move

fl agship carrier Emirates by 2025. The special-purpose company will be paid by Dubai’s department of fi nance based on a formula linked to passenger numbers at the city’s two airports, the people said.

Turkey’s largest grocery chain said to explore stake sale

Turgut Aydin Holding, the majority owner of A101 Yeni Magazacilik AS, hired advisers to explore the sale of a minority stake in Turkey’s largest grocery chain,

people with knowledge of the matter have said, according to Bloomberg.

Turgut Aydin holds about an 80% stake in A101, while Turkey’s Savings Deposit Insurance Fund holds the remain-ing 20% after taking it over from unidentifi ed businessmen, said the people, asking not to be identifi ed as the discus-sions are private.

The composition of the stake could come from Turgut Aydin alone or could include a share of TMSF’s holding, the people said. Investors including private equity fi rms have expressed an interest in the company and a sale could hap-pen this year, they said.

Representatives for Turgut Aydin and TMSF declined to comment.

A101 was founded in 2008 by a group of investors led by the Zapsu family who also founded its largest competitor BIM Birlesik Magazalar.

Foreign holdings of Egypt debt rise as banks attract billionsBloombergCairo

Foreign holdings of Egyptian treasury bills have grown since the pound was floated three month ago, while renewed trust in the currency has sent billions of dollars into local banks.Foreigners held 10.2bn pounds ($540mn) worth of T-bills in December, state-run news agency MENA reported last week, citing central bank data and without specifying how much of that sum came from new inflows. That’s more than 10 times the 989mn pounds of foreign holdings reported in October, though still a fraction of the 60bn pounds held before the 2011 uprising against then-president Hosni Mubarak.Meanwhile, the central bank said commercial lenders were able to attract $9bn since the float, largely

from households and private businesses selling foreign currency and remittances from abroad.“Trust in the system is growing,” assistant sub governor Rami Aboul Naga told Bloomberg News last week.

“We have seen a notable improvement in foreign currency inflows to banks over the past few weeks.”The central bank said on November 3 it was abandoning all currency controls in an eff ort to ease a dollar

shortage that crippled economic activity, paving the way for Egypt to secure a $12bn International Monetary Fund loan. The dollar traded at as much as a 100% premium to the off icial exchange rate on the black market before the decision.Egypt has created a “well-functioning” currency market that is reflected in the pound’s exchange rate, the IMF said last month, adding that the currency may strengthen after a period of “overshooting.” “The diversity of sources of inflows from remittances, individuals, investments is a major indicator of the success of the new system,” said Reham ElDesoki, senior economist at Dubai-based investment bank Arqaam Capital.“Now there is a gradual erosion of the foreign currency backlog. Once this happens, the pound will start strengthening and the black market will completely disappear,” she said.

‘Qatar growth trajectory to stay high on strong financial reserves, revenues from gas’By Pratap JohnChief Business Reporter

Qatar’s growth trajectory will remain high in view of its “huge financial reserves and still-strong revenues” from its gas sector, business information provider Coface has said in a report. This, Coface said, will ensure Qatar’s continued public sector spending ahead of the FIFA 2022 World Cup and noted the country’s economic growth may go up to 3.3% this year, from 2.6% in 2016.

According to Coface, the Gulf Cooperation Council (GCC) economies recorded a sharp slowdown in 2016 amidst public sector spending cuts, tightening liquidity, and investor uncertainty.Coface’s economic outlook shows that all GCC countries except Kuwait saw economic contraction in 2016. Growth is expected to improve in 2017 across the Gulf, except in Oman and Bahrain.The analysis shows that the UAE’s growth will pick up in 2017 to reach 2.5%, up from 2.3% in 2016 because the country is more diversified from oil

than its neighbouring countries.Saudi Arabia’s economic growth is expected to accelerate to 1.8% this year from 1.3% in 2016.Bahrain’s economy will shrink further going down to 1.7% in 2017 from 2% in 2016. Growth in Oman will also dip slightly again to be 1.7% in 2017 from 1.8% in 2016. Kuwait’s economy had more than doubled from 2015 to 2016 going from 1.1% to 2.4%. In 2017, the country will grow more and reach 2.6%, the report said.Globally, growth weakened for the

second consecutive year in 2016 to reach 2.5% based on Coface data. A slight improvement (+2.7%) is expected for 2017 especially with the upturn in activity for emerging economies (+4.1% from +3.7%) and the economic recoveries in Brazil and Russia, which will off set China’s gradual economic deceleration. Activity in advanced economies will hold steady (+1.6%), with the slowdown in the UK being compensated for by the resilience of the eurozone and the slight improvement in US economic activities.

In 2017, trade may be negatively impacted by protectionism, which is the stated policy of the recently elected Republican government in the US.In Europe, Coface’s political risk indicator in the past year increased by an average 13 points for Germany, France, Italy, Spain and the UK. The main threats to growth include the expected economic consequences of Brexit and the probability of political unrest in Continental Europe on a scale similar to the UK referendum.Overall, global risks to be considered are of two kinds as per Coface

analysis. First, the political risk and protectionism risk. Second, the banking risk, which includes very high corporate debt in China and bad debt in the banking sectors in the Brazil, Russia, India, China (Bric) economies. Massimo Falcioni, Coface CEO (Middle East Countries) said, “Any business that is not strictly limited to local boundaries should protect its trade credit. Risk management and trade credit protection are vital for businesses to deal with any liquidity squeeze arising from unforeseen developments.”

Egypt foreign reserves rise to $26.363bn at end of January

ReutersCairo

Egypt’s net foreign reserves rose to $26.363bn at the end of January from $24.265bn

at the end of December, the central bank said yesterday.

The country had roughly $36bn in reserves before an uprising in 2011 ushered in a period of politi-cal turmoil, scaring away tourists and foreign investors, key sources of hard currency.

The central bank fl oated the Egyptian pound in November as part of an economic reform pro-gramme.

The move helped Egypt clinch a $12bn three-year loan from the In-ternational Monetary Fund.

An IMF delegation was in Cairo in January to prepare for a review required before disbursing the sec-ond instalment of the loan, expect-ed to be $1.25bn, which the Fund earlier said Egypt was on track to receive.

The fi rst instalment, $2.75bn, was disbursed in November.

Egypt sold $4bn of Eurobonds in three tranches in January, rais-ing twice as much as targeted and at lower yields than initially ex-pected.

It was not immediately clear if the rise in reserves was a conse-quence of the sale.

An exterior view of the National Bank of Egypt in Cairo. The central bank has said commercial lenders attracted $9bn since the float, largely from households and private businesses selling foreign currency and remittances from abroad.

A passenger (left) walks on her way into the Dubai World Central – Al Maktoum International Airport, in Jebel Ali, Dubai (file). The emirate is developing Al Maktoum International Airport close to the Expo 2020 site with an annual capacity of about 220mn passengers and plans to move flagship carrier Emirates by 2025.

BUSINESS5Gulf Times

Monday, February 6, 2017

Rate benchmark scandal hits $570mn in fi nes as RBS settlesBloombergNew York

Royal Bank of Scotland agreed to pay $85mn to settle allegations it attempted to manipulate the IS-

DAfi x interest-rate benchmark that’s tied to the $544tn private derivatives market, the US Commodity Futures Trading Commission said.

That brings total fi nes so far for at-tempted manipulation of ISDAfi x to $570mn as RBS joins Barclays, Citi-group and Goldman Sachs Group in settling CFTC cases. Though arcane, ISDAfi x plays an important role in glo-bal fi nancial markets, helping deter-mine the value of interest-rate swaps, securitised bonds and options on swap contracts. The cases have also included attempted manipulation of Treasur-ies because the price of US debt infl u-enced the daily calculation of ISDAfi x.

To buttress its case, the CFTC cited electronic communications from traders at RBS, who discussed how they moved

the benchmark around 11 am New York time, when ISDAfi x’s value was set. “As one RBS employee explained, ‘the way to move ISDAfi x is to hit or lift spreads on the screen, and do the opposite in tsy, b/c that is how the rate is derived,’” the CFTC said in its statement on Friday. “Tsy” is shorthand for US Treasuries.

RBS neither admitted to nor denied the allegations. “This is an example of past misconduct that has no place at RBS and we strongly condemn these actions,” Ross McEwan, RBS chief executive offi c-er, said in an e-mailed statement. “These fi ndings make for uncomfortable read-ing and we have already taken signifi cant steps to make sure this kind of behaviour cannot happen again. The culture and structure of RBS has changed dramati-cally in recent years; I’m pleased we can put this issue behind us and concentrate on the important job of building a bank that is fully focused on the best interests of its customers.”

All of the CFTC cases related to IS-DAfi x have been for attempted ma-nipulation, as the regulator hasn’t

shown that banks and brokers actually changed the rate through their trading.

ISDAfi x might not be a household word, but its impact on global mar-kets is huge: The benchmark helps settle trades in the $311tn market for interest-rate swaps and the $35tn mar-ket for options on swaps. Banks use it to set coupons paid for bonds tied to commercial real estate. Fluctuations in ISDAfi x help determine the perform-ance of structured notes bought by wealthy individuals and the amounts some states pay on pension annuities.

Wall Street’s largest dealers sought to change the value of the swaps be-cause the ISDAfi x rate sets prices for the other derivatives, known as swap-tions, which are used by investment fi rms, a person familiar with the inves-tigation said in 2013. ISDAfi x sets the price on an expiring swaption contract, so moving the rate even a tiny amount can save a bank millions of dollars.

Another RBS trader joked about the attempted manipulation in 2007 on the day the CFTC charged Amaranth

Advisers with attempted manipulation of the natural gas market, the regula-tor said in its notice on Friday. The RBS employee changed a news story to re-place Amaranth with the inter-dealer broker where the ISDAfi x trades were handled and then e-mailed the story to colleagues, the CFTC said.

The broker was ICAP, with its Jersey City, New Jersey brokering desk that was central to how the ISDAfi x rate was set. Known in the industry as “Treas-ure Island” for how well the brokers were paid, the desk collected the bank submissions that were used to set the US dollar ISDAfi x.

Bloomberg News, citing a person with knowledge of the matter, in 2013 was the fi rst to report that the CFTC found evidence traders at Wall Street banks instructed ICAP brokers to buy or sell as many interest-rate swaps as necessary to rig ISDAfi x by moving it to a predetermined level. Doing so helped banks reap millions of dollars in trading profi ts, costing companies and pension funds, the person said at the time.

A signage is displayed at a branch of the Royal Bank of Scotland in Edinburgh. RBS agreed to pay $85mn to settle allegations it attempted to manipulate the ISDAfix interest-rate benchmark that’s tied to the $544tn private derivatives market.

Currency volatility on Trump’s tweets fades as traders ‘bored’

BloombergLondon

Falling volatility in currency markets suggests trad-ers are getting used to the

rhetoric in US President Donald Trump’s tweets.

Euro-dollar volatility, a meas-ure of expected swings, has fall-en to levels seen before the elec-tion in November, after spiking to a fi ve-month high on Trump’s victory.

Currencies have moved sharply on his comments, though this fi ts a trend of presi-dents having the greatest market impact at the start of their terms when they talk a lot, according to Kit Juckes, a strategist at Societe Generale in London and a vet-eran of more than three decades of research.

“The market is reacting to Trump comments and if he hasn’t tweeted by midday, peo-ple wonder if he’s slept in,” Andy Soper, head of G-10 options trading at Nomura Holdings, said in an interview.

“He is creating more volatil-ity for sure but everyone is get-ting a bit bored. The market will start to pay less attention to his tweets and to get used to these tape bombs.”

The decline in euro-dollar implied volatility mirrors the moves seen after George W Bush’s win in 2000 and Barack Obama’s victory in 2008.

The euro climbed the most in two weeks against the dollar on January 31 after Trump’s trade adviser said the euro is “grossly undervalued”, showing the high sensitivity of the currency mar-ket to statements from the new US administration. Trump has broken convention by making numerous comments on Twitter, including in the middle of the night, forcing traders to reassess how they are positioned in the 24-hour currency markets.

On February 1 the rouble erased its gains after Trump said he hadn’t eased “anything” on Russia, damping hopes for re-duced sanctions that have driv-en a rally in the Russian currency since the election.

Before his inauguration, the Mexican peso erased a 1.5% ad-vance on January 5 after Trump threatened Toyota Motor Corp with a border tax for planning to build a factory in Mexico. The peso has since strengthened to its level just after the election.

“Looking across currency volatilities, from euro-dollar to dollar-peso, fear ebbed as the market gets used to the style of the new president,” said Sebast-ien Galy, director of foreign-exchange strategy at Deutsche Bank in New York. “The mar-ket is still trading on Trump’s tweets, but the reaction func-tion on dollar-peso has clearly weakened.”

After just two weeks of his ad-ministration, we have reached ‘peak-tweet’, said the head of G-10 currency trading at a bank in London, who asked not to be named as he is not authorised to speak to media.

Goldman sale reignites conspiracy theories in Danish parliamentBloombergCopenhagen

When Goldman Sachs bought part of Denmark’s biggest energy utility three years ago, it triggered a political crisis that split the ruling coalition. Now, as the Wall Street bank sells roughly half that stake, some members of the Danish parliament are again crying foul.Goldman, through a Luxembourg-based vehicle, sold the equivalent of just over 6% of Dong Energy A/S for 6.5bn kroner ($940mn) on Friday. Back in 2014, Goldman paid 8bn kroner for 18%. A stake that size would now fetch about 18.5bn kroner. (Goldman still owns 7% of Dong.)In an angry statement, Pelle Dragsted,

a spokesman for the opposition Left-Green Alliance, described the whole transaction as “hopeless” and the initial sale to Goldman as “scandalous.” Meanwhile, an investigation into Goldman’s investment in Dong by Denmark’s National Audit Off ice is still under way. The purpose of that probe is to find out whether Dong was sold at too low a price in 2014.The political attention Goldman’s share sale is attracting shows Danes are still wondering whether they were short-changed three years ago. A former Social Democrat prime minister, Poul Nyrup Rasmussen, has led the camp of critics who say the nation was cheated.The finance minister at the time, Bjarne Corydon, said Dong was losing so much

money that other investors weren’t willing to inject funds into the company on terms that were acceptable to the government. He brought in Denmark’s two biggest pension funds, ATP and PFA, as joint owners and the government kept more than half the shares.Dong has since stopped haemorrhaging money and on Thursday the company reported 2016 operating profit that almost doubled, with the shares gaining about 7% since the company’s June initial public off ering. Kristian Jensen, Denmark’s current finance minister, says the company “was strengthened by the capital injection” it got from Goldman.Michael Bruun, a managing director at Goldman, said in an e-mailed response

to a request for comment that Goldman Sachs “is proud to have contributed to Dong Energy’s growth.” The Wall Street firm decided to sell part of its stake “following the company’s strong financial results,” he said.Rene Christensen, who sits on the parliament’s finance committee as a representative for the Danish People’s Party (the biggest group in the ruling bloc of Prime Minister Lars Lokke Rasmussen), says it’s impossible to know whether Dong would have recovered so well without Goldman.The Danish People’s Party backed Goldman’s investment in 2014 in part because “the message was that Dong was in trouble, and if we didn’t do anything, it would be a catastrophe,”

Christensen said by phone. “But history has shown that Dong would still be here today” even without Goldman’s capital injection.The question now is whether such a transaction will ever again be allowed in Denmark. Goldman hired another former Danish prime minister, Anders Fogh Rasmussen, to help it navigate its way through the political storm that followed its investment in Dong. Dragsted of the Red-Green Alliance says the process has been a lesson for Danish politicians in how not to handle foreign investment.“There’s definitely a lot to learn from this case,” Christensen at the Danish People’s Party said. “If I were in the same situation today, I’d definitely ask a lot more questions.”

Germany exploits undervalued euro for trade: Trump adviserReutersLondon

In an attack on Germany, US Presi-dent Donald Trump’s top trade adviser said the euro was “grossly

undervalued”, a charge which may ring true for the German economy but not for the 19-member currency zone as a whole.

The adviser, Peter Navarro, said Ger-many, the eurozone’s economic pow-erhouse, was exploiting the euro ex-change rate for trade purposes, a charge rejected by German Chancellor Angela Merkel.

There’s no clear method of estab-lishing how much a currency is under or overvalued but many economists think that some economic measures show the German economy could eas-ily cope with a stronger euro.

It hit a 14-year low of $1.0339 last month.

Even German Finance Minister Wolfgang Schaeuble said on Friday that the single currency could be a bit stronger for Germany.

But he agreed with economists that this would make life hard for other euro members.

For weaker economies such as Greece, economic measures show the exchange rate is too strong, and for the whole currency area it is only moder-ately underpriced.

“The euro is below most estimates of fair value.

And German exporters appear to be benefi ting more than most,” said Jen-nifer McKeown at Capital Economics.

The White House is concerned about the exchange rate because Ger-man companies sell cars, vehicle parts, pharmaceuticals, planes and helicop-ters around the world, competing with American, as well as other European, manufacturers.

Exports account for nearly half Ger-many’s economic output, with 9.5% going to the United States and around 35% to eurozone countries.

In 2015, the United States became the top destination for German ex-ports, overtaking France for the fi rst time since 1961 due to an upturn in the US economy but also due to the weaker euro. The currency has lost more than 20% of its value against the US dollar since mid 2014.

A handful of recent reports found that while the euro was undervalued for Germany it was too strong for other countries.

The World Price Index (WPI) pub-lished by research fi rm World Econom-ics each month found that the euro was

undervalued on a purchasing power parity basis, a measure that takes into account what money can buy in two diff erent currencies based on infl ation and the cost of living.

A “German euro” was nearly 17% undervalued against the dollar in PPP terms, while a “French euro” was over-valued by nearly 5%. A “Greek euro” was overvalued by 7%.

“German exporters remain the ben-efi ciaries of a system that is causing stagnation and unemployment in the rest of Europe,” World Economics said in the report.

The International Monetary Fund also said last year that the euro was un-dervalued by anywhere from 0 to 10% for the region as a whole.

But for Germany that undervalu-ation was anywhere between 10 and

20%, making it the most undervalued exchange rate for any of the 29 coun-tries and jurisdictions around the world covered in the report.

One of the main goals of European monetary union in 1999 was increased economic integration and convergence between member states.

But it handed the decision-making on interest rates and currency policy to the European Central Bank, mean-ing that eurozone members could not longer individually use those tools to make themselves more competitive.

The latest weakness in the euro has been largely driven by the divergence between US and eurozone monetary policy, and bond yields.

The US Federal Reserve is raising in-terest rates, while the ECB is pumping hundreds of billions of euros stimulus

into the economy through quantitative easing.

The ECB has adopted an ultra-loose monetary policy in order to ward off defl ation, strengthen the region’s fragile banking sector and refl ate the economy.

That has led to a weakening currency, which benefi ts eurozone countries’ ex-ports.

Navarro told the Financial Times last week that Germany “continues to ex-ploit other countries in the EU as well as the US with an ‘implicit Deutsche Mark’ that is grossly undervalued.”

The comments drew a rebuff from Merkel, who said Germany cannot in-fl uence the exchange rate.

“Germany is a country that has al-ways called for the European Central Bank to pursue an independent policy,

just as the Bundesbank did that before the euro existed,” she said.

“Because of that we will not infl u-ence the behaviour of the ECB. And as a result, I cannot and do not want to change the situation as it is.” Never-theless, the European Commission’s latest fi gures up to the second quarter of last year show that Germany has ex-perienced a deprecation of the real ex-change rate — how much the goods and services in the domestic country can be exchanged for the goods and services in another country — of around 7.5% within the bloc since the euro’s incep-tion in 1999.

That gives it a major competitive gain. Most members have experienced an eff ective currency appreciation, some such as Slovakia a virtual dou-bling of their exchange rate.

Euro banknotes of various denominations are arranged for a photograph in London. The currency has lost more than 20% of its value against the US dollar since mid 2014.

BUSINESS


Mining bosses head to South Africa but leave their checkbooks at homeBloombergJohannesburg

With its iconic mountain, beach-es and vineyards, it’s easy to attract global mining bosses

and fund managers to Cape Town. Yet as thousands of executives, shareholders and offi cials fl ock to South Africa for the annual Mining Indaba, the industry’s in-vestments are fl owing the opposite way.

A mix of shrinking reserves, rising labour costs, frequent stoppages and regulatory uncertainty has prompted major miners to rethink their presence in the country, home to the world’s largest platinum, chrome, and manganese re-serves and the source of one-third of all gold ever mined.

Anglo American, once a keystone of the economy, is selling half its assets in the country, while BHP Billiton and Gold Fields both spun off their local operations in the past four years. AngloGold Ashanti tried to do the same. South Africa, which was the world’s largest gold producer for a century until 2007, has now dropped to sixth place.

“They’re diffi cult mines in a tough op-erating environment with wage infl ation constantly eating away at margins,” said Neil Gregson, who manages about $2.5bn of natural-resources stocks at JPMorgan Asset Management in London. “Increas-ingly, you need specialised management teams to run those assets. We don’t see any growth there.”

About 6,000 attendees are expected at

the Mining Indaba, which starts February 6. Executives from companies including Anglo American, Rio Tinto Group, An-gloGold Ashanti and South32 are sched-uled to speak at the event, Africa’s big-gest resource industry conference.

As the largest miners shift their pri-orities elsewhere, investors are valu-ing South Africa-focused stocks more cheaply than global peers. The FTSE/JSE Africa Mining Index trades at 1.3 times book value, compared with 1.9 times for the Bloomberg World Mining Index. The measure for South African stocks has been at a discount to the fi gure for the global index for the past fi ve years,

except for during one month in 2013. Even Sibanye Gold, the locally focused spin off from Gold Fields, chose to go to the US for its largest acquisition to date. The company had previously stated its intention to buy in its home country or elsewhere in Africa and took investors by surprise in December with a plan to buy Montana-based Stillwater Mining Co for $2.2bn.

“They’ve chosen to go overseas for the acquisition rather than something closer to home, it shows you how politically dif-fi cult it is to close things in South Africa,” said Michael Rawlinson, co-head of met-als and mining investment banking at

Barclays, which lends money to Sibanye.Many of the South African mining in-

dustry’s problems stem from its turbu-lent and oppressive past. Mines, particu-larly gold, were largely built on the basis of cheap labour, minimal safety stand-ards and plentiful electricity, with prof-its fl owing to their white owners to the exclusion of the black majority. White minority rule under apartheid ended in 1994.

To redress the inequity of apartheid, the government wants mining compa-nies to be 26% owned by black inves-tors, even if those investors later sell their stakes. Companies argue this will lead to continual dilution.

“Security over tenure is a concern for us,” JPMorgan’s Gregson said.

After more than a century of intensive mining, resources have been depleted, unions have commanded above-infl a-tion wage increases, safety breaches are drawing increased scrutiny from govern-ment and power is increasingly expen-sive. The industry made its fi rst net loss since at least 2009 in the year through June, as commodity prices plunged, ac-cording to PricewaterhouseCoopers.

Gold production in the country de-clined by almost half to 144.5 metric tonnes and output of platinum-group metals dropped 11% in the decade to 2015, according to the Chamber of Mines. Labour costs, which make up a third of the industry’s overall expenses, almost tripled to 117bn rand ($8.8bn) a year. Still, mining makes up about half of the coun-try’s export earnings.

Global gold demand up 2% in 2016: WGCReutersLondon

A bounce in investment to a four-

year high drove a modest gain in

gold demand last year, data from

the World Gold Council (WGC)

showed last week, even as use of

the metal in jewellery slid to its

lowest since 2009 and coin and

bar buying dipped.

Global demand for physical

gold in the form of jewellery, coins

and bars fell 9% as higher prices

and import curbs hurt demand,

particularly in the major Chinese

and Indian markets.

Central banks also bought a

third less gold.

However a surge in investment

in gold-backed exchange-traded

funds off set that to lift overall gold

demand by 2% to 4,309 tonnes,

its highest since 2013.

“There are three primary fac-

tors that fuelled strong inflows

into ETFs — we had the spread of

negative interest rates, then the

steady pushback in expectations

surrounding US

interest rate (hikes), and the

uncertainty stemming from geo-

political risk,” said Alistair Hewitt,

head of market intelligence for

the industry-funded WGC. “Invest-

ment as a whole posted its best

year since 2012, but elsewhere

demand was subdued.”

ETF buying saw its strongest

quarter on record in the first three

months of last year, with 342.3

tonnes added to funds, chiefly in

the United States and Europe.

That tailed off later in the year,

however, with outflows of 193.1

tonnes seen in the fourth quarter.

Investment in coins and bars

fell 2%.

Britain, where the pound fell

after the June vote to leave the

European Union, was a bright

spot, with demand rising 28% to

10.9 tonnes.

Global jewellery demand, the

single biggest demand segment

for gold, fell 15% to 2,042 tonnes.

Indian consumer demand fell

21% last year to 675.5 tonnes, its

lowest since 2009, as prices rose

and import curbs were intro-

duced.

The WGC sees it remaining

close to this level this year, at 650-

750 tonnes.

Demand in number one

consumer China is expected to

improve to 950-1,000 tonnes,

after it fell 7% last year to 913.6

tonnes, its weakest since 2012.

Central bank demand was in

positive territory for a seventh

straight year, but was at its low-

est since 2010 at 383.6 tonnes.”If

you look at gold as a percentage

of FX reserves, the twin eff ects

of FX reserves coming down and

the gold price rising has boosted

gold as a reserve asset across

central banks around the world,”

Hewitt said.

“That has been another factor

that weighs on reserve managers’

minds.”

Bond bears and dollar bulls can’t both win big in reflation betsBloombergNew York

After the Trump administration’s jawboning about currencies this past week, the loosening relationship between the dollar and Treasury yields may be here to stay.Since the US election, the dollar and bond yields have been linked to an almost unprecedented degree, with investors betting the new president’s fiscal policies will jumpstart economic growth. The greenback’s moves have had a 0.74 correlation with 10-year yields since November 8, compared with just 0.22 over the past two years, data compiled by Bloomberg show. A correlation of 1 indicates the assets move perfectly in sync.The close connection has started to crumble in the past two weeks, reverting to the norm. The Bloomberg Dollar Spot Index fell in January by the most in 10 months, inflicting pain on dollar bulls. Treasury yields, on the other hand, merely hovered near where they started 2017, leaving many bond bears unwavering in their positions.Expect yields to lead the way higher from here, says Shyam Rajan, head of US rates strategy at Bank of America Corp One reason is that Trump’s policy objectives favour a weaker dollar and his administration will try to talk it lower, he says. Currency traders were buff eted by administration remarks in the past week, with Trump and another off icial accusing China, Japan and Germany of devaluing their currencies to gain a trading advantage, while complaining that the dollar is too strong.“In thinking about the Trump trade, our view supports both higher rates and higher dollar, but with weaker correlation and the driver being

rates,” Rajan said. “The president has a greater incentive to talk down the dollar than to talk down higher rates.”There’s been another change for investors assessing the reflation equation: signs of economic pickup elsewhere in the world. The eurozone, with consumer-price growth of 1.8% in January, had by far the biggest upside surprise in inflation as measured by Citigroup, with Japan ranking second.That means German yields have started to catch up with the post-election move in the US The extra yield on US 10-year debt over their German counterparts has shrunk to about 2 percentage points, down from as high as 2.35 percentage points in December.To Rajan, that signals that Treasury yields have room to rise. By contrast, a smaller rate diff erential makes the dollar less attractive.“Europe is doing a lot better,” said Charles Ripley, an investment strategist at Allianz Investment Management. “Our outlook is definitely for rates higher. We generally think Trump’s policies are going to be supportive of dollar strength, but the magnitude of where that goes is a bit uncertain.”Dominic Konstam, global head of rates research at Deutsche Bank, doesn’t mince words about the dollar-Treasury link.“The dollar must not rally as rates rise for the rise in rates to be sustainable,” he wrote in a January 29 note.That’s because a weak greenback is needed to sustain the inflation expectations that have ratcheted up since the election. The 10-year break-even rate, a market measure of inflation expectations, is 2.05%, near the highest since 2014.A weaker correlation between bonds and the dollar “would be a sign of a return to more normal times,” Konstam said.

Trump’s strong dollar means weaker sales at Apple and HoneywellBloombergSan Francisco

The Trump dollar is taking a bite out of the earnings prospects for US companies.

Apple is boosting the prices of iPhones sold abroad by as much as 40% to off set the declining value of foreign sales when they’re convert-ed to dollars. Those higher prices hurt Apple’s ability to compete. In-dustrial giant Honeywell Interna-tional is trimming its sales forecast this year by $600mn and hedging in the currency markets.

Since Donald Trump’s surprise win on November 8, the Bloomberg Dollar Spot Index has gained 2.8% on expectations for rising interest rates, even as he told the Wall Street Journal the strong US currency was “killing us” and criticised China for keeping the yuan artifi cially

low. Before the election, the green-back was already trading near the highest in more than a decade.

“Foreign exchange is a bit of a problem for Apple and any US company that has any business overseas,” Apple Chief Financial Offi cer Luca Maestri said in an in-terview. “The dollar is very strong.”

Earnings for Standard & Poor’s 500 companies are forecast to rise 11.9% this year after falling an es-timated 0.4% in 2016, according to analysts’ estimates compiled by Bloomberg. That would be the fastest annual earnings growth since 2011. For the 259 companies that have reported fourth-quarter results so far, profi t has expanded 5.8% from a year earlier and rev-enue has risen 4.2%, according to data compiled by Bloomberg.

A stronger dollar may hinder future profi t gains, however. Every 10% increase in the US curren-

cy trims about 3 to 5 percentage points off earnings growth for the S&P 500, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

“For those pencilling in 10% to 12% earnings growth, that shaves it quite a bit,” he said. “That could have some pressure on equity prices.”

While the dollar has weakened about 3% since reaching a 14-year high last month, it remains above the average level for 2016. And companies are still feeling the ef-fects of a yearlong, 19% surge in the dollar beginning in the summer of 2014. Coupled with a plummet in oil prices, the surging dollar led to declines in S&P 500 earnings that lasted fi ve quarters.

If Wall Street is right, compa-nies face more dollar appreciation under Trump. Against the euro, for example, the consensus is for the dollar to strengthen to $1.05 at

year-end from about $1.08 now. Bill Gross, the billionaire bond in-vestor, says the president’s poli-cies are fuelling a powerful dollar and an undervalued Mexican peso, both of which are bad for the US and global economy.

“I think the dollar is a concern,” Gross, who manages the $1.8bn Janus Global Unconstrained Bond Fund, said in a Bloomberg TV in-terview Wednesday. “It is the glo-bal currency. To the extent that the dollar strengthens, not only are US companies aff ected to the negative, the global marketplace and global countries are aff ected too.”

Honeywell, which makes prod-ucts ranging from jet engines to work boots, has locked in the euro at $1.15 and hedges other currencies to protect its profi ts. The company had to cut the top range of its 2017 sales forecast to $39.5bn from $40.1bn “solely due” to foreign exchange,

said CFO Tom Szlosek. For Eaton Corp, which makes parts for heavy trucks, aircraft and earth-moving equipment, the strong dollar has erased $2.5bn of revenue since 2013 and will likely reduce sales by $300mn this year, Chief Executive Offi cer Craig Arnold said.

“The US dollar strength has re-ally been a big negative for us in terms of revenue for the company for four years in a row now,” he said. “If you’re an exporter, it makes the goods and services that you sell around the world more expensive.”

A wild card for the dollar is Trump’s plan to overhaul corporate taxes. Republicans have fl oated the idea of a 20% border-adjustment tax on imports as a way to encour-age more manufacturing in the US That plan could cause as much as a 25% gain for the dollar, according to a report by the Peterson Institute for International Economics.

Pedestrians pass in front of an Apple store in New York. Apple is boosting the prices of iPhones sold abroad by as much as 40% to off set the declining value of foreign sales when they’re converted to dollars.

Visitors pass a sign at the entrance to the off ices of Anglo American in Johannesburg. Anglo American is selling half its assets in South Africa, while BHP Billiton and Gold Fields both spun off their local operations in the past four years.

BUSINESS7Gulf Times


Hedge funds head back into govt bonds after turgid 2016ReutersLondon

Some hedge funds who shunned or bet against European govern-ment bonds only three months

ago are buying again as a sharp rise in yields off ers them returns after a lack-lustre 2016 for the industry.

Most hedge funds spent last year aggressively “short” on government bonds, but portfolio managers at indi-vidual funds and investment compa-nies that invest in hedge funds — so-called funds-of-funds — told Reuters some are changing their view.

“We hear diverging opinions,” said Pacome Breton, head of portfolio man-agement at hedge fund allocator FQS Capital Partners.”Some after the rally up to December were cautious and tak-ing profi t for better entry points.”

Other funds are buying on the ex-pectation that faster infl ation will keep yields at higher levels, he said.

Hedge funds are often fi rst off the mark to identify trends, so concerted buying of government bonds may her-ald an increased allocation to govern-ment bonds by the wider investment industry.

On the fl ip side, they are also agile and could quickly exit their holdings if the market turns, for example in con-nection with political risks linked to Dutch, French, German and possibly Italian elections in 2017.

Last year, low yields kept many hedge funds away from government bonds, though some did invest in “ul-tra-long” bonds with a higher yield is-sued by eurozone countries.

Since then, yields have risen sharply across the board on signs of an improv-ing global economy, expectations of

reduced central bank monetary stim-ulus and with the election of Donald Trump as US President raising hopes for fi scal stimulus and higher infl ation in the world’s richest country.

The yield on Germany’s 10-year government bond, the region’s bench-mark, went from minus 0.16% in late September to a positive yield just shy of 0.50% in January.

At the same time, hedge fund de-mand for recent bond sales by Euro-pean governments has been among the highest in years, according to the bankers who ran those transactions.

In January, Belgium, France, Spain, Italy and Portugal sold a total of €30bn of bonds through syndicated bond sales.

Hedge funds bought just over €2.5bn of that.

Bankers who managed some of those syndications said demand from

the funds was several billions higher. However, the governments preferred to sell to more long-term investors such as central banks and fund manag-ers, the bankers said. Demand was par-ticularly strong at Italy’s recent €6bn syndicated bond sale, where over €1bn, or 17.3%, was bought by hedge funds — the highest percentage taken up by that class of investor in an Italian fi xed-rate bond sale in at least fi ve years.

Investors pulled over $100bn from hedge funds in 2016 amid lacklustre performance, according to an eVest-ment report.

It was a diffi cult year for most inves-tors with macro managers, who typi-cally invest in bonds as well as curren-cies, racking up losses in seven out of 12 months, though still ending the year up a modest 1.49%, showed data from industry tracker Hedge Fund Research.

The hedge funds at the vanguard

of buying government bonds this year are credit-based specialists and macro funds, which express a view on the macroeconomic situation, usually through bonds and currencies.

“We think the pendulum now swings the other way...and hedge funds and other government bond investors are interested in going long bonds now,” said Louis Gargour, chief investment offi cer at London-based LNG Capital.

“We went long after Trump became president, combined with better than expected data out of Germany and the UK in December and in January,” he said.

Eurozone infl ation rose to its highest level in the month of January, up 1.8% year-on-year. The highest since Feb 2013 and close to the European Cen-tral Bank’s target of close to 2%. Not all hedge funds are sold on government bonds.

“We don’t want to buy anything,” said Alberto Gallo, head of macro strategies at Algebris.”We are short and we think that France 10-year will go to 1.5%, Italy 10-year will go wider to at least 2.5%, Bund 10-year to 0.6- 0.7%.”

Said Haidar, founder and CIO at Haidar Capital Management, said gov-ernment bond sales via syndication may off er short-term tactical oppor-tunities to buy bonds.

New York-based Haidar, which managed $308mn in assets as of No-vember 30, according to its website, bought into France’s inaugural Green bond and Italy’s 15-year and Spain’s 10-year.

“We think this steepening in Euro-pean bonds is going to continue be-cause people are going to anticipate the end of quantitative easing pro-grammes,” said Haidar.

Another year, another lead squeeze, but is this one different?By Andy HomeLondon

Last year zinc was the star performer

among the major base metals traded on

the London Metal Exchange (LME).

Might it be sister metal lead’s turn to

shine this year?

The unglamorous heavy metal has

already had a tumultuous start to 2017.

LME three-month metal, currently trading

around $2,340 per tonne, has notched up

a year-to-date gain of over 16%, beating

zinc into second place.

Funds have been quietly lifting their

exposure. As of the close of last week the

money manager net long position was

equal to 18.5% of open interest, a record

level since the LME started publishing

such data in July 2014.

A ferocious squeeze on the London

market has helped.

The LME’s benchmark cash-to-three-

months spread traded out to $45.50 per

tonne backwardation at one stage last

month, a degree of tightness not seen

since 2011.

In the mix has been a dominant long

position holder and a sharp rise in cancel-

lations of LME lead stocks.

The amount of metal earmarked for

physical load-out from the LME ware-

house system currently stands at 67,225

tonnes, representing almost 36% of total

exchange stocks.

Seasoned watchers of the London lead

market might be forgiven for rolling their

eyes at this point.

We’ve been here before.

There were similar squeezes on LME

stocks in both March and December 2015

and neither of them had anything to do

with real-world demand.

Rather, they resulted from “warehouse

wars” as storage operators competed for

stocks and rental revenues.

But this time might just be diff erent

because there is a growing sense that this

opaque market might really be tightening

up to the point that metal is now being

hoarded in expectation of a physical

squeeze later this year. Last month’s sharp

contraction in time-spreads bore all the

hallmarks of one of those periodic tussles

for LME-stored lead that has enlivened

an otherwise dull market in recent years.

Some 15,000 tonnes of metal that were

earmarked for physical load-out in the

Dutch port of Vlissingen were placed back

onto LME warrant.

Within days another 43,000 tonnes of

LME stocks had been cancelled, primarily

at the South Korean port of Busan but also

across a range of European locations.

At the heart of all this stocks mayhem

has been the unidentified entity gripping

the nearby spreads.

At times it has controlled positions

equivalent to between 80-90% of avail-

able LME tonnage. The latest exchange

report shows it still there with 50-80% of

stocks. Superficially, this might look like

the latest round in the tit-for-tat smash-

and-grab “warehouse wars” that caused

similar spread and stocks disruption in

both 2015 and early 2016.

LME metal would be cancelled and dis-

appear from one location only to reappear

in another, only for the original victim to

turn aggressor and start the cycle again.

The long-term impact on LME stocks

has been negligible. They started this

year at 191,650 tonnes, little changed from

221,975 tonnes at the start of 2015.

But the word in the tight-knit lead trad-

ing community is that this time is diff erent

with traders rather than storage operators

taking strategic physical positions in

expectation of a looming squeeze on avail-

ability in the real world rather than paper

market. The squeeze has already started

upstream at the mine concentrates stage

of the supply chain.

Treatment charges (TCs), which is what

smelters charge miners for transform-

ing raw material into metal, are the best

indicator of what is happening in the

concentrates part of the supply chain.

And, according to research house

Wood Mackenzie, spot TCs into China are

currently below $20 per tonne, down from

$80 just three months ago and the lowest

level since at least the turn of the decade.

In this respect lead is playing catch-up

with zinc. The two metals are commonly

found in the same deposits with lead the

“ugly sister” by-product to zinc.

The closure due to exhaustion of mines

such as Century in Australia and Lisheen

in Ireland may have grabbed the zinc

headlines but both were also producers

of lead.

Andy Home is a columnist for Reuters.

The views expressed are his own.

Amazon projects spending thatconcerns those watching profi tBloombergSeattle

Amazon.com will spend big in the coming months on warehouses, movies,

gadgets and growth into India, renewing investor concerns that Chief Executive Offi cer Jeff Be-zos cares more about generating revenue far in the future than turning a profi t now.

The company will double-down on its delivery system that gets products quickly into the hands of its customers. It will keep investing in original movies and shows to encourage people to buy Amazon Prime member-ships, which makes them loyal shoppers.

It will enhance its hot-selling Echo voice-activated personal assistant to gain a presence in homes. And it will keep pushing into India, which it sees as a vast frontier for e-commerce growth.

All those initiatives will crimp profi ts. Operating income in the current quarter will be $250mn to $900mn, less than a year ago even though revenue is forecast to increase as much as 23% to $35.8bn.

“When you see revenue go up and earnings go down, it spooks people,” said Michael Pachter, an analyst at Wedbush Securities. “It’s called negative leverage and the street hates it.”

The spending outlook took the shine off profi t in the holi-day quarter that beat analysts’ estimates.

Net income was $749mn, or $1.54 a share, the Seattle-based company said last week in a statement. Analysts estimated profi t of $1.36 a share.

Investors had high expec-tations for the fourth quar-ter, driving Amazon’s stock up more than 10% to $839.95 in the month before Thursday’s earn-ings announcement.

Shares declined as much as 4.3%, the most in almost three months, to $804 in New York on Friday.

People shouldn’t be surprised

- Amazon’s expenses have eaten up sales often as the company built itself into the world’s big-gest retailer, said Josh Olson, an analyst at Edward Jones & Co.

“They’re in investment mode again,” which means earnings volatility in 2017, Olson added.

Amazon spent $5.7bn storing, packing and delivering online orders in its busy holiday quar-ter, up 26% from a year earlier. Technology and content spend-ing increased 27% to $4.5bn.

The company also announced Monday it would build a $1.49bn air hub near Cincinnati to ac-commodate its growing fl eet of cargo planes.

The hub and planes make Amazon less reliant on United Parcel Service and FedEx Corp and complement its network of warehouses around the country.

Amazon will continue such investments to increase the value of its $99-a-year Prime membership, Chief Financial Offi cer Brian Olsavsky said. Spending on video content pays off by helping attract new cus-tomers and investments in logis-tics generate more volume and greater effi ciency, he said.

“Tens of millions” of new members joined Prime in 2016, Bezos said in a statement. Prime had an estimated 65mn US members at the end of Sep-tember, according to Consumer Intelligence Research Partners. The company doesn’t disclose statistics for Prime, which gives members free, fast delivery of items ordered on the website and access to Amazon’s video and music services.

Revenue increased 22% to $43.7bn in the fourth quarter compared with analysts’ esti-mates of $44.7bn. Foreign cur-rency changes reduced sales growth in the period by 2 per-centage points, the company said.

Amazon Web Services, the company’s fast-growing and profi table cloud-computing segment, has helped subsidize Amazon’s retail and entertain-ment ambitions.

Prudential crushes shrinking rivalsAIG and MetLifeBloombergNew York

Prudential Financial Chief Execu-tive Offi cer John Strangfeld, who held fi rm as too-big-to-fail peers

MetLife and American International Group shrunk through asset sales, is being rewarded by investors for his ap-proach.

Strangfeld’s company, the second-largest US life insurer, has outperformed No 1 MetLife and AIG for months, and the gap widened after Donald Trump was elected president with a promise to dial back regulation.

Trump on Friday targeted the Dodd-Frank Act, which required regulators to identify non-bank companies that were so large that their failure could destabi-lise markets.

These systemically important fi nan-cial institutions could eventually face tighter capital rules.

MetLife has announced plans to spin off a US retail operation, a move that will make Newark, New Jersey-based Pru-dential, with more than $800bn in as-sets, the nation’s top life insurer. AIG has announced deals to exit a mortgage guar-antor, a broker-dealer unit and a Lloyd’s of London business.

Before Trump’s push, SIFI status “posed the most risk for Prudential, due to the higher asset leverage relative to MetLife and AIG,” Tom Gallagher, an an-alyst at Evercore Partners, said in a note on Friday. “MetLife already announced the breakup of the company.”

Strangfeld has been building Pruden-tial for years. While he sold operations such as a securities unit and a commodi-ties business, he pursued growth in in-surance, buying Japan units from AIG in 2011 for more than $4.7bn and a life op-eration from Hartford Financial Services Group in 2013.

General Electric Co, which was named the fourth non-bank SIFI, exited that status after shedding assets. GE ad-vanced 2 cents on Friday to $29.70, ex-tending the share gain to about 3.6% in

the past 12 months. MetLife CEO Steve Kandarian said it still made sense to exit the US retail business because of his fo-cus on growth abroad and operations in his home market that generate better free cash fl ow, such as dental coverage or property-casualty policies.

He also sold an adviser network, as did AIG’s Peter Hancock.

“It’s a business we are not the best owner of,” Hancock said in January 2016 as the Department of Labor was craft-ing tighter regulations on the sale of re-tirement products to reduce confl icts of interest. “With the new DOL rules, that was a big factor in thinking whether this was better owned by somebody inde-pendent of us.”

Trump’s push this week to limit regu-lation also includes the DOL’s fi duci-ary rule. That helped insurers and as-set managers like Voya Financial and Ameriprise Financial jump at least 2.8%

in New York trading on Friday. Pruden-tial had the luxury of not being in the forefront of public attention when regu-lators picked non-bank SIFIs.

AIG in 2008 required a federal bailout that swelled to $182.3bn, and was in lit-tle position to contest rules designed to stabilise the fi nancial system. Beyond that, activists investors led by Carl Icahn urged Hancock in 2015 to slim down New York-based AIG, partly to remove the burden of federal oversight.

This was well before Trump, who counts Icahn as a supporter, was seen by many as having a realistic chance to be-come president.

MetLife, long the largest US life in-surer, was out front in challenging regu-lation, going so far as to sue a panel that included the Treasury Department sec-retary and head of the Federal Reserve. A judge ruled in the company’s favour, but the government appealed when Barack

Obama was still president. “We’re wait-ing to see what happens with MetLife’s case,” Prudential vice chairman Mark Grier said in December during a call dis-cussing the outlook for 2017. “We’ll learn from the opinion and we’ll consider the right path.”

Prudential supports a review of the Dodd-Frank Act and the process for des-ignating companies as SIFIs, Scot Hoff -man, a spokesman for the insurer, said in an e-mail on Friday.

Representatives for AIG and New York-based MetLife had no immediate comment.

John Barnidge, an analyst at Sandler O’Neill & Partners, said that all of the biggest insurers can expect a reduction in expenses if regulators decide to apply SIFI regulations only to banks.

“They have about $100mn annually in costs for compliance,” he said. “Most of that will go away.”

Prudential Financial building is seen in Newark, New Jersey. The second-largest US life insurer has outperformed No 1 MetLife and AIG for months, and the gap widened after Donald Trump was elected president with a promise to dial back regulation.

Zad Holding CoWidam Food CoVodafone Qatar

United Development CoSalam International Investme

Qatar & Oman Investment CoQatar Navigation

Qatar National Cement CoQatar National Bank

Qatar Islamic InsuranceQatar Industrial Manufactur

Qatar International IslamicQatari Investors Group

Qatar Islamic BankQatar Gas Transport(Nakilat)Qatar General Insurance & ReQatar German Co For Medical

Qatar Fuel QscQatar First Bank

Qatar Electricity & Water CoQatar Cinema & Film Distrib

Qatar Insurance CoOoredoo Qsc

National LeasingMazaya Qatar Real Estate Dev

Mesaieed Petrochemical HoldiAl Meera Consumer Goods Co

Medicare GroupMannai Corporation Qsc

Masraf Al RayanAl Khalij Commercial Bank

Industries QatarIslamic Holding Group

Gulf Warehousing CompanyGulf International Services

Ezdan Holding GroupDoha Insurance Co

Doha Bank QscDlala Holding

Commercial Bank QscBarwa Real Estate Co

Al Khaleej Takaful GroupAamal Co

88.40

68.20

9.27

22.59

11.61

10.05

94.00

91.50

164.00

54.00

47.00

68.00

55.00

107.60

24.20

40.50

9.85

159.50

9.65

228.00

28.10

85.50

104.50

15.45

14.35

15.60

178.10

66.50

84.00

41.10

16.62

110.80

58.00

54.00

29.00

15.12

17.95

37.00

21.00

31.75

34.60

20.20

14.86

0.00

-1.59

-1.90

1.07

-0.68

0.00

0.75

0.11

0.00

0.00

-0.11

0.00

-0.90

1.51

0.62

0.00

-0.51

-0.31

-1.03

2.70

0.00

1.79

1.46

0.00

-0.42

0.00

-0.22

0.91

0.96

0.74

1.90

-4.07

0.00

0.00

-1.86

0.73

-1.91

1.09

-1.41

-0.16

0.87

0.00

1.78

-

3,143

2,183,460

57,601

271,783

1,124

21,019

14,099

-

578

4,133

50,414

7,563

23,456

506,725

-

12,987

57,671

115,065

5,191

-

50,489

34,348

30,000

49,224

68,533

4,206

239,044

400

194,796

941

179,382

4,176

29,714

88,258

1,320,278

1,516

149,231

8,535

235,176

470,922

-

56,139

QATAR

Company Name Lt Price % Chg Volume

United Wire Factories CompanEtihad Etisalat Co

Dar Al Arkan Real Estate DevSaudi Hollandi Bank

Rabigh Refining And PetrocheBanque Saudi Fransi

Saudi Enaya Cooperative InsuMediterranean & Gulf Insuran

Saudi British BankMohammad Al Mojil Group Co

Red Sea Housing Services CoTakween Advanced Industries

Sabb TakafulSaudi Arabian Fertilizer Co

National GypsumSaudi Ceramic Co

National Gas & IndustrializaSaudi Pharmaceutical Industr

ThimarNational Industrialization C

Saudi Transport And InvestmeSaudi Electricity Co

Saudi Arabia Refineries CoArriyadh Development Company

Al-Baha Development & InvestSaudi Research And MarketingAldrees Petroleum And Transp

Saudi Vitrified Clay Pipe CoJarir Marketing Co

Arab National BankYanbu National Petrochemical

Arabian CementMiddle East Specialized Cabl

Al Khaleej Training And EducAl Sagr Co-Operative Insuran

Trade Union Cooperative InsuArabia Insurance Cooperative

Saudi Chemical CompanyFawaz Abdulaziz Alhokair & C

Bupa Arabia For CooperativeWafa Insurance

Jabal Omar Development CoSaudi Basic Industries Corp

Saudi Kayan Petrochemical CoEtihad Atheeb Telecommunicat

Co For Cooperative InsuranceNational Petrochemical Co

Gulf Union Cooperative InsurGulf General Cooperative Ins

Basic Chemical IndustriesSaudi Steel Pipe Co

Buruj Cooperative InsuranceMouwasat Medical Services Co

Southern Province Cement CoMaadaniyah

Yamama Cement CoJazan Development Co

Zamil Industrial InvestmentAlujain Corporation (Alco)

Tabuk Agricultural DevelopmeUnited Co-Operative Assuranc

Qassim Cement/TheSaudi Advanced Industries

Kingdom Holding CoSaudi Arabian Amiantit Co

Al Jouf Agriculture DevelopmSaudi Industrial Development

Bishah AgricultureRiyad Bank

The National Agriculture DevHalwani Bros Co

Arabian Pipes CoEastern Province Cement Co

Al Qassim Agricultural CoFiling & Packing Materials M

Saudi Cable CoTihama Advertising & Public

Saudi Investment Bank/TheAstra Industrial Group

Saudi Public Transport CoTaiba Holding Co

Saudi Industrial Export CoSaudi Real Estate Co

Saudia Dairy & Foodstuff CoNational Shipping Co Of/The

Methanol Chemicals CoAce Arabia Cooperative Insur

Mobile Telecommunications CoSaudi Arabian Coop Ins Co

Axa Cooperative InsuranceAlsorayai Group

Weqaya For Takaful InsuranceBank Albilad

Al-Hassan G.I. Shaker CoWataniya Insurance Co

Abdullah Al Othaim MarketsHail Cement

24.88

21.75

5.91

0.00

11.91

24.80

16.63

26.07

22.20

12.55

27.59

12.94

31.78

72.07

14.11

31.53

36.16

39.71

36.17

16.37

56.42

22.16

38.00

22.49

13.50

32.28

36.59

61.49

125.21

20.25

58.99

37.27

8.55

19.42

40.55

19.31

14.22

36.89

31.97

127.50

20.36

69.15

96.60

8.45

3.72

111.43

21.05

13.32

17.59

26.34

19.26

31.29

142.50

70.00

24.71

19.65

11.30

30.81

19.27

11.26

15.41

59.75

13.97

11.18

7.34

34.38

10.72

69.75

10.95

22.58

58.75

16.77

31.33

9.14

36.48

5.75

26.56

13.60

17.06

14.69

39.90

35.71

24.70

116.01

36.93

7.10

49.73

8.79

22.50

18.66

11.72

19.39

19.36

16.33

33.74

104.00

11.80

-1.07

-0.46

-0.67

0.00

-0.33

-0.28

-0.54

-1.77

1.00

0.00

-1.81

0.31

-1.82

-0.63

-1.81

-1.41

-1.42

-0.68

-0.74

-0.91

0.75

-0.54

-1.17

-1.36

0.00

-3.03

-0.44

-0.50

-0.63

-0.49

-0.82

0.57

-1.61

-2.02

0.40

0.84

0.92

0.16

-2.41

0.59

0.49

-0.86

0.10

-0.35

-3.38

-1.29

0.00

-0.67

-1.68

2.41

1.90

0.10

-1.46

-0.78

-1.59

-0.61

-1.05

-1.57

-1.18

-0.79

-2.71

-0.83

-1.20

-1.15

-1.08

-0.41

-1.11

0.00

-0.45

-0.18

-0.42

-0.53

-0.51

1.56

-2.17

0.00

-2.71

-1.09

-1.16

-0.34

0.00

-2.75

0.00

0.34

-3.05

-0.56

-3.25

-0.11

-2.00

-1.43

-1.92

0.00

-0.21

-0.85

6.84

0.09

-1.09

176,099

414,108

11,598,387

-

4,366,959

155,720

791,729

502,750

120,383

-

52,313

1,376,959

1,265,878

92,319

479,688

95,775

87,078

822,068

1,432,919

492,534

594,854

829,930

199,050

265,760

-

713,651

135,537

41,646

86,474

55,776

35,403

912,861

1,420,774

196,327

1,152,936

1,175,088

2,160,834

241,341

236,720

28,092

1,641,664

66,990

2,517,536

2,393,942

5,525,366

12,113

26,062

860,549

979,324

1,755,940

448,020

1,500,469

48,098

40,242

555,154

275,919

848,431

128,204

479,677

1,094,847

1,118,611

23,130

793,076

246,753

418,628

41,018

1,282,880

-

458,465

158,979

9,518

202,274

25,526

1,777,931

252,238

-

824,532

171,431

364,567

1,306,251

47,092

838,534

80,386

18,501

1,053,284

696,910

1,152,151

1,985,052

799,527

1,158,410

1,381,585

-

283,447

530,128

1,783,872

6,088

230,141

SAUDI ARABIA


Saudi Re For Cooperative ReiSolidarity Saudi Takaful Co

Amana Cooperative InsuranceAlabdullatif Industrial Inv

Saudi Printing & Packaging CSanad Cooperative Insurance

Saudi Paper Manufacturing CoAlinma Bank

Almarai CoFalcom Saudi Equity Etf

United International TranspoHsbc Amanah Saudi 20 Etf

Saudi International PetrocheFalcom Petrochemical Etf

Saudi United Cooperative InsBank Al-Jazira

Al Rajhi BankSamba Financial Group

United Electronics CoAllied Cooperative Insurance

Malath Cooperative & ReinsurAlinma Tokio Marine

Arabian Shield CooperativeSavola

Wafrah For Industry And DeveFitaihi Holding Group

Tourism Enterprise Co/ ShamsSahara Petrochemical Co

Herfy Food Services Co

6.66

9.69

8.80

15.66

18.27

15.23

10.23

14.31

68.82

27.80

29.89

27.60

18.98

26.20

26.78

13.42

65.84

22.20

28.03

16.00

8.34

19.82

58.53

37.60

25.60

13.20

33.66

15.17

79.25

0.00

-1.32

0.69

-0.13

-1.62

0.00

0.79

-1.78

-0.98

0.00

-1.32

0.00

-2.67

0.00

-2.90

-1.90

-1.23

-1.11

-0.43

-0.44

0.24

-0.10

-6.35

-0.32

-0.89

-1.35

-1.61

-2.44

-0.04

1,734,727

2,553,338

3,459,989

408,007

393,838

-

2,668,606

28,025,532

138,034

87,747

817,647

-

236,465

-

553,142

1,403,825

1,619,016

335,668

303,398

987,364

503,040

1,725,065

945,053

73,541

486,748

286,032

528,638

1,611,503

11,056

SAUDI ARABIA


Securities Group CoSultan Center Food Products

Kuwait Foundry Co SakKuwait Financial Centre Sak

Ajial Real Estate EntmtGulf Glass Manuf Co -Kscc

Kuwait Finance & InvestmentNational Industries Co Ksc

Kuwait Real Estate Holding CSecurities House/The

Boubyan Petrochemicals CoAl Ahli Bank Of Kuwait

Ahli United Bank (Almutahed)National Bank Of Kuwait

Commercial Bank Of KuwaitKuwait International Bank

Gulf BankAl-Massaleh Real Estate Co

Al Arabiya Real Estate CoKuwait Remal Real Estate Co

Alkout Industrial Projects CA’ayan Real Estate Co Sak

Investors Holding Group Co.KAl-Mazaya Holding Co

Al-Madar Finance & Invt CoGulf Petroleum Investment

Mabanee Co SakcCity Group

Inovest Co BscKuwait Gypsum Manufacturing

Al-Deera Holding CoAlshamel International Hold

Mena Real Estate CoNational Slaughter House

Amar Finance & Leasing CoUnited Projects For Aviation

National Consumer Holding CoAmwal International Investme

Jeeran HoldingsEquipment Holding Co K.S.C.C

Nafais HoldingSafwan Trading & Contracting

Arkan Al Kuwait Real EstateGfh Financial Group Bsc

Energy House Holding Co KscpKuwait Slaughter House Co

Kuwait Co For Process PlantAl Maidan Dental Clinic Co K

National Ranges CompanyAl-Themar Real International

Al-Ahleia Insurance Co SakpWethaq Takaful Insurance Co

Salbookh Trading Co KscpAqar Real Estate Investments

Hayat CommunicationsKuwait Packing Materials Mfg

Soor Fuel Marketing Co KscAlargan International RealBurgan Co For Well Drilling

Kuwait Resorts Co KsccOula Fuel Marketing Co

Palms Agro Production CoIkarus Petroleum Industries

Mubarrad Transport CoAl Mowasat Health Care Co

Shuaiba Industrial CoHits Telecom Holding

First Takaful Insurance CoKuwaiti Syrian Holding Co

National Cleaning CompanyEyas For High & Technical EdUnited Real Estate Company

AgilityKuwait & Middle East Fin Inv

Fujairah Cement IndustriesLivestock Transport & Tradng

International Resorts CoNational Industries Grp Hold

Marine Services Co KscWarba Insurance Co

Kuwait United Poultry CoFirst Dubai Real Estate Deve

Al Arabi Group Holding CoKuwait Hotels Sak

Mobile Telecommunications CoAl Safat Real Estate Co

Tamdeen Real Estate Co KscAl Mudon Intl Real Estate Co

Kuwait Cement Co KscSharjah Cement & Indus Devel

Kuwait Portland Cement CoEducational Holding Group

Bahrain Kuwait InsuranceAsiya Capital Investments Co

Kuwait Investment CoBurgan Bank

Kuwait Projects Co HoldingsAl Madina For Finance And In

Kuwait Insurance CoAl Masaken Intl Real Estate

Intl Financial AdvisorsFirst Investment Co Kscc

Al Mal Investment CompanyBayan Investment Co Kscc

Egypt Kuwait Holding Co SaeCoast Investment Development

Privatization Holding CompanKuwait Medical Services Co

Injazzat Real State CompanyKuwait Cable Vision Sak

Sanam Real Estate Co KsccIthmaar Holding Bsc

Aviation Lease And Finance CArzan Financial Group For Fi

Ajwan Gulf Real Estate CoKuwait Business Town Real Es

Future Kid Entertainment AndSpecialities Group Holding C

Abyaar Real Eastate DevelopmDar Al Thuraya Real Estate C

Al-Dar National Real EstateKgl Logistics Company Kscc

Combined Group ContractingZima Holding Co Ksc

Qurain Holding Co

100.00

90.00

340.00

106.00

178.00

325.00

54.00

218.00

47.50

57.00

570.00

315.00

440.00

700.00

455.00

218.00

248.00

56.00

48.50

61.00

700.00

74.00

30.50

142.00

0.00

53.00

860.00

0.00

99.00

95.00

42.50

0.00

31.50

39.50

57.00

770.00

0.00

39.00

50.00

66.00

194.00

410.00

89.00

236.00

51.00

162.00

200.00

0.00

32.50

112.00

455.00

59.00

76.00

69.00

112.00

0.00

126.00

198.00

95.00

86.00

126.00

95.00

40.50

80.00

250.00

325.00

54.00

60.00

54.00

50.00

0.00

102.00

720.00

38.00

86.00

230.00

39.00

150.00

67.00

100.00

180.00

82.00

83.00

0.00

500.00

0.00

470.00

54.00

495.00

88.00

1,080.00

206.00

0.00

37.50

99.00

325.00

540.00

59.00

300.00

83.00

48.00

59.00

26.00

52.00

212.00

51.00

53.00

0.00

83.00

47.50

54.00

62.00

250.00

45.50

77.00

57.00

118.00

98.00

36.00

0.00

0.00

72.00

500.00

66.00

0.00

1.01

-5.26

-6.85

0.00

-3.26

0.00

1.89

0.00

-5.00

-8.06

0.00

-4.55

-2.22

-1.41

5.81

-1.80

0.00

5.66

-6.73

-4.69

0.00

-6.33

-7.58

1.43

0.00

-8.62

-1.15

0.00

5.32

0.00

-5.56

0.00

-7.35

0.00

0.00

-6.10

0.00

-4.88

-5.66

-7.04

0.00

0.00

-3.26

4.42

-8.93

-4.71

1.01

0.00

-7.14

0.00

-4.21

3.51

-6.17

0.00

-8.20

0.00

-1.56

0.00

1.06

-5.49

-1.56

0.00

-5.81

2.56

0.00

1.56

-8.47

9.09

-5.26

-7.41

0.00

-5.56

-1.37

-5.00

-4.44

-4.17

-6.02

-5.06

1.52

0.00

0.00

-5.75

-5.68

0.00

0.00

0.00

0.00

-8.47

1.02

-1.12

-1.82

0.00

0.00

-6.25

0.00

0.00

0.00

-7.81

0.00

-4.60

-5.88

-4.84

-7.14

-8.77

0.00

-8.93

-8.62

0.00

-2.35

0.00

0.00

-7.46

-1.96

-5.21

-1.28

-8.06

0.00

-7.55

-6.49

0.00

0.00

-5.26

0.00

-7.04

0.00

51,099

473,110

518,037

11,200

20,500

200

10,400

554,187

791,000

9,452,776

62,105

106,807

58,738

2,557,172

95,686

1,840,018

1,975,183

50

4,287,927

3,699,139

12,501

648,990

26,051,869

41,212,666

-

8,506,573

300,444

-

3,084,855

6,645

300,500

-

3,921,000

54,943

300

100,000

-

900,400

218,500

2,402,610

8,500

200

4,355,826

10,921,705

621,131

1,000

7,893

-

8,431,049

9,020

11,150

131,000

873,004

2,902

109,049

-

145,759

2,897,202

2,200

2,948,176

46,259

220,468

305,000

1,383,999

24,377

60,500

10,594,466

942,800

7,317,034

2,150,505

-

60,013

2,315,489

325,050

1,986,927

24

819,461

7,664,727

206,530

1,000

35,652

10,768,789

741,685

-

6,894,489

-

500

3,883,160

136,930

255,100

162,083

500

-

399,883

319,429

1,491,509

139,300

7,385,924

4,090

80,000

6,766,130

6,719,318

18,274,921

7,459,273

20,000

13,202,250

6,410,969

-

560,055

2,600

138,800

30,413,718

268,413

182,500

71,126

6,525,547

150,761

1,869,221

31,839,308

-

-

2,045,120

41,904

3,061,817

-

KUWAIT


Voltamp Energy SaogUnited Power/Energy Co- Pref

United Power Co SaogUnited Finance Co

Ubar Hotels & ResortsTakaful Oman

Taageer FinanceSweets Of OmanSohar Power Co

Sohar PoultrySmn Power Holding Saog

Shell Oman Marketing - PrefShell Oman Marketing

Sharqiyah Desalination Co SaSembcorp Salalah Power & Wat

Salalah Port ServicesSalalah Mills Co

Salalah Beach Resort SaogSahara Hospitality

Renaissance Services SaogRaysut Cement Co

Port Service CorporationPhoenix Power Co Saoc

Packaging Co LtdOoredoo

OminvestOman United Insurance Co

Oman Textile Holding Co SaogOman Telecommunications Co

Oman Refreshment CoOman Packaging

Oman Orix Leasing Co.Oman Oil Marketing Company

Oman National Engineering AnOman Investment & Finance

Oman Intl MarketingOman Hotels & Tourism CoOman Foods International

Oman Flour MillsOman Fisheries CoOman Fiber Optics

Oman Europe Foods IndustriesOman Education & Training In

Oman ChromiteOman Chlorine

Oman Ceramic ComOman Cement Co

Oman Cables IndustryOman Agricultural Dev

Oman & Emirates Inv(Om)50%Natl Aluminium Products

National SecuritiesNational Real Estate Develop

National PharmaceuticalNational Mineral Water

National Hospitality InstituNational Gas Co

National Finance CoNational Detergent Co Saog

National Biscuit IndustriesNational Bank Of Oman Saog

Muscat Thread Mills CoMuscat National Holding

Muscat Gases Company SaogMuscat Finance

Majan Glass CompanyMajan College

Hsbc Bank OmanHotels Management Co Interna

Gulf StoneGulf Plastic Industries Co

Gulf Mushroom CompanyGulf Investments Services

Gulf Invest. Serv. Pref-SharGulf International Chemicals

Gulf Hotels (Oman) Co LtdGlobal Fin Investment

Galfar Engineering&ContractGalfar Engineering -Prefer

Financial Services Co.Financial Corp/The

Dhofar UniversityDhofar Tourism

Dhofar PoultryDhofar Intl Development

Dhofar InsuranceDhofar Fisheries & Food Indu

Dhofar Cattlefeed

0.51

1.00

3.40

0.16

0.13

0.17

0.13

1.34

0.23

0.21

0.70

1.05

2.00

4.50

0.25

0.63

1.48

1.38

2.50

0.22

1.48

0.25

0.15

2.21

0.62

0.52

0.38

0.31

1.42

2.16

0.30

0.14

1.86

0.16

0.22

0.52

0.40

0.00

0.81

0.11

4.57

1.00

0.13

3.64

0.49

0.42

0.49

1.60

0.00

0.14

0.18

0.10

5.00

0.11

0.05

0.00

0.54

0.16

0.70

3.75

0.25

0.11

1.77

0.61

0.14

0.19

0.51

0.13

1.25

0.11

0.00

0.34

0.12

0.11

0.29

10.50

0.17

0.09

0.39

0.17

0.10

1.49

0.49

0.18

0.36

0.21

1.28

0.22

0.00

0.00

4.78

0.00

0.00

0.00

-0.75

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-0.79

0.00

0.00

0.65

0.00

2.13

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-0.45

0.00

0.00

0.00

1.50

0.89

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-0.69

0.00

0.00

0.00

0.00

0.00

0.00

-1.45

0.00

0.00

0.00

1.23

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.85

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1,302

-

1,000

-

-

-

222,000

-

700

-

-

-

12,581

-

121,810

-

-

-

-

-

-

67,540

20,874

-

59,400

-

170,000

-

100,077

-

-

50,000

-

-

517,000

-

-

-

10,950

1,335,067

-

-

-

-

-

-

-

-

-

17,089

-

-

-

-

-

-

6,085

-

-

-

517,600

-

-

-

10,000

-

-

-

-

-

-

-

84,708

-

-

-

-

1,499,555

-

-

250

-

-

-

-

-

-

-

OMAN


Dhofar Beverages CoConstruction Materials Ind

Computer Stationery IndsBankmuscat Saog

Bank SoharBank Nizwa

Bank Dhofar SaogAreej Vegetable Oils

Aloula CoAl-Omaniya Financial Service

Al-Hassan Engineering CoAl-Fajar Al-Alamia Co

Al-Anwar Ceramic Tiles CoAl Suwadi Power

Al Shurooq Inv SerAl Sharqiya Invest Holding

Al Maha Petroleum Products MAl Maha Ceramics Co SaocAl Madina Takaful Co Saoc

Al Madina Investment CoAl Kamil Power Co

Al Jazerah Services -PfdAl Jazeera Steel Products Co

Al Jazeera ServicesAl Izz Islamic Bank

Al Buraimi HotelAl Batinah PowerAl Batinah Hotels

Al Batinah Dev & InvAl Anwar Holdings Saog

Ahli BankAcwa Power Barka Saog

Abrasives Manufacturing Co SA’saff a Foods Saog

0Man Oil Marketing Co-Pref

0.26

0.04

0.26

0.46

0.16

0.09

0.27

4.05

0.53

0.29

0.06

0.75

0.15

0.19

1.04

0.14

1.59

0.49

0.10

0.07

0.31

0.55

0.27

0.19

0.07

0.88

0.19

1.13

0.10

0.19

0.20

0.72

0.05

0.80

0.25

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.75

0.00

0.65

0.00

0.00

0.00

0.00

0.00

0.00

7.69

0.00

0.00

0.75

4.42

0.00

0.00

0.00

0.00

0.00

0.53

0.50

0.00

0.00

0.00

0.00

-

-

-

637,850

-

2,708,848

-

-

-

-

151,250

-

917,311

-

-

10,000

-

-

7,346,768

2,440,459

-

-

90,413

35,000

-

-

5,575

-

-

128,989

250,421

-

-

-

-

OMAN


Waha Capital PjscUnited Insurance Company

United Arab Bank PjscUnion National Bank/Abu Dhab

Union Insurance CoUnion Cement Co

Umm Al Qaiwain Cement IndustSharjah Islamic Bank

Sharjah Insurance CompanySharjah Group

Sharjah Cement & Indus DevelRas Al-Khaimah National Insu

Ras Al Khaimah White CementRas Al Khaimah Ceramics

Ras Al Khaimah Cement Co PscRas Al Khaima Poultry

Rak PropertiesOoredoo Qsc

Oman & Emirates Inv(Emir)50%Nbad Oneshare Msci Uae Ucits

National Takaful CompanyNational Marine Dredging Co

National Investor Co/TheNational Corp Tourism & Hote

National Bank Of Umm Al QaiwNational Bank Of Ras Al-Khai

National Bank Of FujairahNational Bank Of Abu Dhabi

Methaq Takaful InsuranceManazel Real Estate Pjsc

Invest BankIntl Fish Farming Co Pjsc

Insurance HouseGulf Pharmaceutical Ind Psc

Gulf Medical ProjectsGulf Cement Co

Fujairah Cement IndustriesFujairah Building Industries

Foodco Holding PjscFirst Gulf BankFinance House

Eshraq Properties Co PjscEmirates Telecom Group Co

Emirates Insurance Co. (Psc)Emirates Driving Company

Dana GasCommercial Bank Internationa

Bank Of SharjahAxa Green Crescent Insurance

Arkan Building Materials CoAlkhaleej InvestmentAldar Properties Pjsc

Al Wathba National InsuranceAl Khazna Insurance Co

Al Fujairah National InsuranAl Dhafra Insurance Co. P.S.

Al Buhaira National InsurancAl Ain Ahlia Ins. Co.

Agthia Group PjscAbu Dhabi Ship Building Co

Abu Dhabi Natl Co For BuildiAbu Dhabi National Takaful C

Abu Dhabi National InsuranceAbu Dhabi National Hotels

Abu Dhabi National Energy CoAbu Dhabi Islamic Bank

2.18

2.00

2.00

4.30

1.86

1.19

1.00

1.55

3.85

1.50

1.00

4.10

1.28

2.45

0.95

3.11

0.79

97.00

1.16

6.26

0.59

4.70

0.52

2.80

3.20

4.78

3.50

9.95

0.90

0.69

2.25

2.41

0.74

2.16

3.09

1.03

1.22

1.56

6.55

12.75

1.72

1.12

17.80

5.20

8.07

0.53

1.80

1.40

0.85

0.87

1.18

2.54

12.75

0.38

300.00

4.50

2.35

55.00

6.87

2.88

0.65

4.50

2.40

3.14

0.51

3.82

-2.24

0.00

0.00

-2.27

0.00

0.85

0.00

1.97

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.28

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.44

0.00

2.05

-1.10

0.00

2.27

2.99

0.00

-3.14

0.00

1.98

0.00

0.00

0.00

1.19

0.00

0.90

1.14

0.00

0.00

-1.85

0.00

0.00

0.00

0.00

0.00

2.01

0.00

-2.56

0.00

-10.00

0.00

0.00

3.00

0.00

10.17

0.00

-5.88

0.00

2.00

0.53

953,986

-

-

207,200

-

1,108

-

138,500

-

-

-

-

-

-

-

-

10,738,989

-

-

-

247,300

-

-

-

-

3,300

-

3,544,710

1,177,139

12,352,762

366,000

37,210,558

-

1,581

-

1,228,774

-

-

-

3,758,994

-

55,836,301

1,362,727

-

-

3,918,355

-

-

50,000

1,177,889

-

10,531,345

-

1,436

-

11,000

-

-

22,323

-

144,552

-

11,623

-

1,249,362

571,915

UAE


Zain Bahrain BsccUnited Paper Industries Bsc

United Gulf Investment CorpUnited Gulf BankTrafco Group Bsc

Takaful International CoTaib Bank -$Us

Seef PropertiesSecurities & Investment Co

National Hotels CoNational Bank Of Bahrain Bsc

Nass Corp BscKhaleeji Commercial Bank

Ithmaar Holding BscInvestcorp Bank -$Us

Inovest Co BscGulf Monetary Group

Gulf Hotel Group B.S.CGfh Financial Group Bsc

Esterad Investment Co B.S.C.Delmon Poultry Co

Bmmi BscBmb Investment Bank

Bbk BscBankmuscat Saog

Banader Hotels CoBahrain Tourism CoBahrain Telecom Co

Bahrain Ship Repair & EnginBahrain National Holding

Bahrain Kuwait InsuranceBahrain Islamic Bank

Bahrain Flour Mills CoBahrain Family Leisure Co

Bahrain Duty Free ComplexBahrain Commercial Facilitie

Bahrain Cinema CoBahrain Car Park Co

Arab Insurance Group(Bsc)-$Arab Banking Corp Bsc-$Us

Aluminium Bahrain BscAlbaraka Banking Group

Al-Salam BankAl-Ahlia Insurance Co

Ahli United Bank B.S.C

0.10

0.30

0.00

0.36

0.23

0.00

0.00

0.22

0.00

0.00

0.71

0.15

0.12

0.20

8.15

0.28

0.00

0.63

0.79

0.15

0.33

0.81

0.00

0.38

0.00

0.07

`

0.28

0.00

0.00

0.00

0.13

0.00

0.08

0.80

0.66

1.29

0.15

0.37

0.36

0.28

0.50

0.13

0.00

0.72

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-4.96

-9.09

0.00

0.00

0.00

0.00

1.95

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

3.17

0.00

0.00

0.00

0.77

0.00

0.00

8.82

0.00

0.00

0.00

0.80

0.00

-1.38

211,558

1,483,887

-

5,000

10,000

-

-

50,000

-

-

71,994

254,700

590,000

270,000

94,500

33,248

-

7,000

630,655

22,442

10,000

12,500

-

130,000

-

212,910

-

20,000

-

-

-

818,336

-

200,000

11,300

192,500

5,591

-

50,000

347,500

180,000

269,000

671,000

-

150,000

BAHRAIN


Boubyan Intl Industries HoldGulf Investment House Ksc

Boubyan Bank K.S.CAhli United Bank B.S.C

Osos Holding Group CoAl-Eid Food Ksc

Qurain Petrochemical IndustrAdvanced Technology Co

Ekttitab Holding Co SakKout Food Group Ksc

Real Estate Trade Centers CoAcico Industries Co Kscc

Kipco Asset Management CoNational Petroleum ServicesAlimtiaz Investment Co Kscc

Ras Al Khaimah White CementKuwait Reinsurance Co Ksc

Kuwait & Gulf Link TransportHuman Soft Holding Co Ksc

Automated Systems Co KsccMetal & Recycling Co

Gulf Franchising Holding CoAl-Enma’a Real Estate Co

National Mobile TelecommuniAl Bareeq Holding Co Kscc

Housing Finance Co SakAl Salam Group Holding Co

United Foodstuff IndustriesAl Aman Investment Company

Mashaer Holdings Co KscManazel Holding

Mushrif Trading & ContractinTijara And Real Estate Inves

Kuwait Building MaterialsJazeera Airways Co Ksc

Commercial Real Estate CoFuture Communications Co

National International CoTaameer Real Estate Invest C

Gulf Cement CoHeavy Engineering And Ship B

Refrigeration Industries & SNational Real Estate Co

Al Safat Energy Holding CompKuwait National Cinema CoDanah Alsafat Foodstuff Co

Independent Petroleum GroupKuwait Real Estate Co Ksc

Salhia Real Estate Co KscGulf Cable & Electrical IndAl Nawadi Holding Co Ksc

Kuwait Finance HouseGulf North Africa Holding Co

Hilal Cement CoOsoul Investment Kscc

Gulf Insurance Group KscKuwait Food Co (Americana)

Umm Al Qaiwain Cement IndustAayan Leasing & Investment

Alrai Media Group Co KscNational Investments CoCommercial Facilities Co

Taiba Kuwaiti Holding Co KscAfaq Educational Services Co

Kuwait Pillars For FinancialYiaco Medical Co. K.S.C.C

26.00

48.00

415.00

216.00

180.00

0.00

285.00

0.00

47.00

0.00

39.00

290.00

85.00

870.00

184.00

99.00

0.00

61.00

3,000.00

214.00

81.00

40.50

50.00

1,240.00

0.00

0.00

57.00

0.00

55.00

0.00

45.00

0.00

61.00

180.00

680.00

84.00

0.00

75.00

39.50

84.00

228.00

305.00

124.00

57.00

1,140.00

94.00

370.00

75.00

390.00

550.00

0.00

610.00

45.00

160.00

70.00

630.00

2,600.00

0.00

48.00

164.00

136.00

174.00

0.00

156.00

0.00

260.00

-8.77

-5.88

1.22

-0.92

0.00

0.00

-1.72

0.00

-5.05

0.00

0.00

0.00

-5.56

-3.33

5.75

0.00

0.00

-7.58

0.00

0.00

-5.81

0.00

-3.85

1.64

0.00

0.00

-8.06

0.00

-8.33

0.00

-5.26

0.00

-4.69

0.00

-1.45

-4.55

0.00

-6.25

-5.95

0.00

-4.20

-4.69

-7.46

-8.06

-3.39

-5.05

0.00

-3.85

0.00

-5.17

0.00

0.00

-5.26

6.67

-1.41

-5.97

0.00

0.00

-5.88

-1.20

-2.86

-4.40

0.00

0.00

0.00

1.96

4,803,500

1,123,770

790,148

1,392,075

13,786

-

961,640

-

3,285,300

-

1,000

1,333,400

1,370,842

29,264

13,039,001

374,223

-

332,000

160,000

1,000

90,900

47,500

3,838,924

9,427

-

-

3,555,020

-

3,211,373

-

1,692,520

-

1,863,208

1,000

25,000

3,358,469

-

927,930

6,287,478

509,100

74,380

100,000

18,419,068

5,981,342

10

2,417,604

5,300

9,280,852

252,500

493,011

-

4,212,987

3,637,461

1,497

316,031

45

1,408

-

10,362,984

970,490

7,313,310

167,516

-

1,906

-

38,125

KUWAIT


LATEST MARKET CLOSING FIGURES


BUSINESS8

BUSINESS15Gulf Times


‘Trump-compatible’ French catering CEO sees US acquisitionsBloombergParis

Philippe Salle, the chief executive off icer

of France’s Elior, says President Donald

Trump is so good for business, the cater-

ing company plans to continue to expand

in the US.

Elior aims to exceed $1bn in proforma

revenue for contract catering in the US

this year, and will do so in part through

acquisitions, Salle, 50, said during a meet-

ing with a small group of journalists at the

company’s headquarters in La Defense,

a western suburb of Paris. The company

had total revenue outside Europe in

the year ended September of €941mn

($1.10bn).

Salle, like luxury giant LVMH Moet Hen-

nessy Louis Vuitton’s chairman and CEO

Bernard Arnault, sees measures promised

or unveiled by Trump giving the US

economy a much-needed boost. Trump,

who has pledged to invest more in infra-

structure, provide corporate tax breaks

and cut through red tape, has helped push

the Dow Jones Industrial Average above

20,000, a record.

“As far as business is concerned, I am

Trump-compatible,” Salle said over lunch.

“Finally we have a leader who comes from

the business world.”

Elior shares have risen 15% in the past

year, beating the 12% gain in the SBF120

Index.

Salle was echoing views expressed at

an LVMH earnings presentation last week,

where Arnault said Trump’s measures to

bolster the US economy “could work.” The

current environment in the US is “rather

favourable” to business, said Arnault, who

met with Trump in New York before he took

off ice. Trump’s measures are sure to have “a

positive impact” on the US economy, Salle

said. “It remains to be seen if it lasts,” he said.

“We’ll know in about a year.”

Elior, which employs about 15,000

people in the US, sees itself as a local com-

pany there, Salle said. Off ering catering

services for schools, companies and hos-

pitals as well as food services at airports

and on highways around the world, Elior

ranks fourth in the US, behind Compass,

Aramark and French rival Sodexo, accord-

ing to the company’s figures.

“We are American,” Salle said. “This is a

local market, with local employees, local

suppliers so I have no issues related to the

administration’s measures.”

The US market represents “dougle-digit

growth, both organically and externally”

for Elior, he said. “We made four acquisi-

tions there last year and have more in the

pipeline, three or four small structures”

representing around $400mn in annual

revenues or a bit less, he said.

The industry still off ers consolidation

opportunities but not on a large scale, Salle

said, ruling out any potential tie-ups with

one of its bigger competitors. Targets can

only be small- or medium-sized, he said.

The group plans to spend €1bn by

2020 on acquisitions and has so far spent

€300mn. He said Elior is comfortable

with pushing its ratio of net debt to Ebitda

(earnings before interest taxes deprecia-

tion and amortisation) to as much as 3.5.

“If we see strategically interesting assets,

we won’t hesitate,” Salle said.

An engineer by training, Salle expects

to improve margins through digitalisation,

off ering new services and capping supply

costs through better planning.

Salle was parachuted into the top spot

at Elior in 2015 by shareholder Charter-

house after he boosted growth at other

companies. On his watch, temporary-

staff ing company Vediorbis’s revenue

increased five-fold in eight years, profit

doubled in four years at Geoservices and

high-tech contract engineering group

Altran was rescued.

The executive, who said he believes

one shouldn’t stay too long at the helm of

a group, has been popping up on a list of

potential successors to retailer Carrefour’s

CEO, Georges Plassat. Asked about his

career plans, Salle plays coy.

“My name circulates and will continue

to circulate, but my nose is not pressed

against the window,” he said.

Barclays set to overhaul back offi ce operations to cope with ring-fencingUK banks must separate retail, investment banking operations; new Barclays unit will support both sides after ring-fencing; could operate smoothly even if one operation got into trouble; staff unclear who they will work for, fear job cuts; overhaul to soak up much of £1bn cost of ring-fencing

ReutersLondon

Barclays is about to over-haul its back offi ce opera-tions under a restructur-

ing to help it comply with new post-crisis rules forcing British banks to ring-fence their retail operations from their riskier business.

It has formed a new company that will operate as a standalone unit providing support serv-ices to both of its two main op-erations when they are formally separated — retail and invest-ment banking, the bank said.

The ring-fencing rules seek to avoid a repeat of the 2008 crisis, when banks’ bad bets threatened depositors’ cash.

While Barclays was not among those that needed a UK taxpay-er-funded bailout, the new rules apply to all lenders in Britain that have retail and commercial or investment banking activi-ties.

At Barclays, the aim is that critical support functions could continue to operate smoothly if either of its two main businesses were to run into trouble, while also keeping costs down by not having several separate back-offi ce units, sources involved in the project said.

The overhaul — including the creation of the new company known internally as Servco — will aff ect most of the more than 10,000 people who work in Barclays back offi ces opera-

tions in 17 countries around the world.

It will group together the bank’s huge operations in India and South Africa that provide technology support and data management, along with func-tions such as compliance with regulatory requirements, cor-porate relations, legal aff airs and human resources.

While for some staff this will simply involve a change in the name of the legal entity they work for, the sources said it was also likely to lead to some job losses.

Barclays declined to comment on the possible staff cuts or the cost of the restructuring.

However, sources with direct

knowledge of the project said it would soak up much of the £1bn ($1.25bn) that Barclays has said it will cost to comply with the ring-fencing rules.

The structural change shows the upheaval that British banks face to meet the rules that come into force in 2019.

Other British lenders are working on similar models.

HSBC transferred 18,000 em-ployees to a UK-based service company in 2015, according to a company fi ling, as part of a move to insulate its back-offi ce func-tions to comply with the new regulations.

HSBC plans to base its ring-fenced British retail and com-mercial banking business in Bir-

mingham, shifting about 1,000 staff to the central English city from London.

Barclays, however, will keep both main operations headquar-tered at its building in the capi-tal’s Canary Wharf district.

Paul Compton, Barclays’ chief operating offi cer, is overseeing the creation of the new compa-ny, which will formally be called Barclays Services Ltd.

“From the outset, we’ve been keen to use the incoming ringfencing regulations to en-hance the banking experience for our customers and clients, and the establishment of the service company is a great ex-ample of how we can put this into practice,” Compton told Re-

uters in an email. He declined to comment on how many people will work in the new unit.

Some back office workers are confused about which en-tity they will end up working for and concerned about losing their jobs, two of the sources said.

Servco’s management struc-ture will be formalised by April with a view to it beginning op-erations by September, they added.

Compton joined the bank in May 2016, one of many high-profi le former JPMorgan bank-ers recruited by Barclays chief executive Jes Staley, who himself ran the US lender’s investment banking division until 2013.

Parisian bankers target fi ntech catch up, eye Brexit openingBloombergParis

After years of lagging behind Lon-don on spawning fi nancial tech-nology startups, Paris this week

hosted a show of force aimed at proving the French capital can catch up as more than 1,500 bankers, investors and en-trepreneurs gathered.

The Paris Fintech Forum, which took place recently in the old bourse’s temple-like building, tripled its turn-out from last year. With the UK’s vote to leave the EU seen as an opportunity for Paris to raise its game, executives from Societe Generale, insurer Axa and Spain’s Banco Bilbao Vizcaya Argen-taria among others showed up to talk about potential in France.

Just as London is Europe’s banking and fi nance centre, it has been centre stage for fi ntech fi nancing in the region. Paris startups in this segment, as in other parts of tech, have run into a lack of fi nancing in recent years, as well as being confronted with a generally more constraining business environment.

“Who would have imagined just a few years ago that a central banker would be speaking at a forum on inno-

vation?” Bank of France governor Fran-cois Villeroy de Galhau said. “For banks and insurers, the digital revolution is upsetting the traditional model for cli-ent relations” and “there are diffi cult choices ahead.”

For French banks, relatively high profi tability has helped avoid the deep-er cost cuts of the kind of UniCredit

and Deutsche Bank. Still, revenues re-main under pressure partly because new technologies are creating cheaper alternatives for clients. With a French law will going live next month making it easier for customers to switch banks, BNP Paribas, Credit Agricole and So-ciete Generale have made stepping up digital spending a priority.

“There is a desire from big compa-nies to step up investments, and this might accelerate an already positive trend” for fi ntechs, said Julien Maldo-nato, director for the fi nancial industry at Deloitte in Paris. Fintech startups raised €155mn in France last year, up from €135mn a year earlier, he said.

Groupe BPCE, which commands the

second-biggest market share of French loans, plans to shift 1,000 employees onto its digital teams and open venues in France and Berlin, Chairman Fran-cois Perol said. BPCE last year bought Germany’s Fidor, an on-line bank and a platform for fi nancial advice. Societe Generale is also accelerating invest-ments in technological change and its on-line-banking unit is sharing an ac-count-aggregating tool with the com-pany’s consumer-banking networks.

France’s top fi nancial fi rms need to embrace innovation as clients increas-ingly turn to their smart phones for banking. In 2016, only 20% of visited to their bank more than once a month, down from 62% in 2007, according to a BVA survey for the French Banking Federation.

“You need to create a sense of urgen-cy,” Axa chief executive offi cer Thomas Buberl said. “Everybody at Axa has un-derstood that digital is there, that dig-ital changes our business and also that digital can create an opportunity.”

While start-ups such as KissKiss-BankBank, Lendix and Compte Nickel were among the better-known of French fi ntechs at the conference pitching for business, Paris has a long way to go to catch up in terms of venture fi nancing.

Only 3% of fi ntechs attending the con-ference have raised more than €100mn ($107mn). The Paris Fintech Forum se-lected 125 fi ntechs from 26 countries. Just a third are French.

Paris fi ntech venture-capital fi nancing represents a fraction of Europe’s total. European funding for fi nancial- tech-nology fi rms fell to $233mn in the third quarter, the lowest in more than a year, according to KPMG and CB Insights.

Improving those fi gures won’t be easy. “There is expectation that Paris might get more opportunities in the banking industry in general” but fi n-tech competition is “very internation-al,” ING Groep chief innovation offi cer Ignacio Julia Vilar said in an interview.

The French capital has been better at reversing a shortage of venture capital investments in some startup segments than others, over the past few years. Fintech is one, but biotech has also been left behind.

Investment in digital technology reached $1.4bn in France during the fi rst nine months of 2016, second in Europe only to the UK’s $1.8bn, ac-cording to a report by CB Insights. It was positioned to leapfrog the UK in the fi nal quarter of last year, Bpifrance said in mid-December.

A view of the Barclays headquarters in the Canary Wharf business district of London. Barclays has formed a new company that will operate as a standalone unit providing support services to both of its two main operations when they are formally separated — retail and investment banking, the bank said.

First big German customer sues VW in diesel affair

ReutersHamburg, Germany

Fish distributor Deutsche See is suing Volkswagen for misrepresenting a fleet of vehicles it leased as environmentally friendly, becoming the first major German customer to sue Europe’s biggest car maker over its diesel-test cheating.Volkswagen already faces numerous lawsuits from individual owners, regulators, states and dealers, many of them in the form of class-action cases in the United States.This is the first case brought by a corporate customer in its home market.Bremerhaven-based Deutsche See, which leases about 500 vehicles from Volkswagen, said it had been unable to reach an out-of-court settlement.Talks had broken down after Volkswagen replaced the relevant managers with lawyers and PR managers.German tabloid Bild am Sonntag said Deutsche See was suing for €11.9mn

($12.8mn). Deutsche See was not immediately reachable to comment on the sum.“Deutsche See only went into partnership with VW because VW promised the most environmentally friendly, sustainable mobility concept,” said a statement from Deutsche See, which won a sustainability prize in 2010.Volkswagen said yesterday it had not yet seen the charge and so could not comment on it.Deutsche See said it had filed its complaint for malicious deception at the regional court in Braunschweig, near Volkswagen’s Wolfsburg headquarters.The court was not reachable yesterday to confirm it had received the case.Volkswagen admitted in September 2015 it had used software to cheat diesel-emissions tests in the United States.The legal fallout has cost the company over €20bn ($21.6bn) so far and its former chief executive is being investigated by German prosecutors for suspected fraud and market manipulation.

Planet Labs inks deal for Google’s satellite business

BloombergSan Francisco

Planet Labs, a startup that launches small satellites into orbit and sells the imagery, is acquiring the Terra Bella satellite business of Alphabet in a bid to take on larger industry incumbents.In return, Alphabet’s Google is taking a stake in the startup. Google has also agreed to purchase satellite images captured by Planet in a multiyear deal. The companies declined to share financial terms.“It’s a big deal,” said Will Marshall, Planet’s chief executive off icer. “What this enables us to do is tap into new markets, like certain aspects of the financial markets, insurance and disaster relief.”

With the deal, Planet will receive seven high-resolution satellites that Terra Bella currently has in orbit. Planet plans to launch an additional six of Terra Bella’s satellites. They are larger than Planet’s existing satellites and off er up to six times better imagery resolution, Marshall said.Google acquired its satellite division, then called Skybox Imaging, for $500mn in 2014. Bloomberg News first reported on the plan to sell the unit to Planet. About 60 Google employees are heading to the startup. Planet has raised more than $180mn. Marshall said Planet doesn’t need more funding to pay for the influx of staff and equipment, although the startup may raise money in the future. For its digital maps, Google currently buys from the imagery company DigitalGlobe.

BUSINESSMonday, February 6, 2017

GULF TIMES

Non-hydrocarbon diversification can revitalise GCC property marketBANKING ON KNOWLEDGE

By Dr R Seetharaman

In Saudi Arabia, the positive outlook for

the real estate sector began with the gov-

ernment’s release of payments totalling

$10.6bn to contractors and the injection of

SR20bn into the banking system.

In an eff ort to diversify the economy

and open the real estate market to smaller

investors, the Capital Market Authority

introduced new rules in 2016, allowing the

formation of the Real Estate Investment

Traded Funds (REITs) on the local stock

exchange.

In the retail sector, the largest com-

pleted project in 2016 was Al Yasmin Mall,

the first quality shopping centre to open

in the area.

In hotels market, the decline in demand

from the business and public sector seg-

ments highlights the need for Riyadh’s

hospitality sector to diversify and to

reduce its reliance on business tourism.

In off ice space, the most notable

completion in 2016 was Emaar Square in

Jeddah.

In the residential market, sales prices

may decrease further in 2017, given the

decrease in residential transactions. The

residential real estate market of Dubai

and Abu Dhabi may have bottomed out

due to limited changes in capital and

rental values. However challenges remain,

including a strengthening of the US dollar,

anticipated increase in the cost of debt

as well as sluggish regional economic

growth.

In the fourth quarter to December

2016, the property prices stabilised in

Dubai and certain mid-markets witnessed

a small uptick.

In Abu Dhabi, there were no major com-

pletions of retail space.

Kuwait’s real estate market is currently

stagnant due to oversupply and low de-

mand, but could possibly recover in early

2017. The government’s recent distribu-

tion of residential complexes to citizens

had resulted in the slowdown.

The continued stagnation across

Oman’s residential and off ice property

market during 2016 and the rapid expan-

sion in the hospitality sector is set to be a

beacon of growth in the market heading

into 2017. Projects such as the first phase

of Oman Rail and the progression of

works related to the $1.3bn redevelop-

ment of Mina Sultan Qaboos bode well

for the future demand for residential

properties.

In Bahrain, despite slowing economic

conditions, which continue to hamper the

property market in the Kingdom, there

has been a marked stabilisation across

most real estate sectors in 2016 that is

expected to carry into 2017. Similar to

the residential market, off ice rents across

the Kingdom’s key submarkets remained

largely unchanged during 2016.

Qatar’s fiscal budget has envis-

aged contracts for new projects worth

QR46.1bn in 2017. The investment plan of

QR46bn for the current year will impact

positively on the country’s construction

and real estate sector.

Doha will continue to experience

strong demand for mid-income housing

as population growth continues. Major

retail developments are expected to come

into the market in 2017. They include

Doha Festival City, North Gate Mall and Al

Hazm Mall. Doha’s retail stock is expected

to expand by around 1.9mn square metres

over the next five years. The fourth quar-

ter of 2016 witnessed growth in retails

supply. The Q4 also saw a growth in off ice

space availability throughout West Bay

due to the completion of new buildings

and fall in demand.

Qatar Rail has announced the comple-

tion of tunnelling on the Green Line of

Doha Metro project. The hotel sector

supply pipeline until 2017 could include

over 9,600 new keys and 3,400 new hotel

apartments.

Real estate lending in Qatar was at

7.7% in 2016. The low oil prices are still a

concern.

However, the diversification to non-

hydrocarbon sectors is expected to

continue in Qatar and other parts of the

GCC, which can revitalise the property

sector in the region.

Dr R Seetharaman is Group CEO of

Doha Bank.

Global jewellery retail chain Joyalukkas opened its third showroom at West Devon in Chicago on Saturday. The showroom was inaugurated by the US Congressman Raja Krishnamurthy in the presence of Bishop Jacob Angadiyath; Francy PV, general manager Joyalukkas USA; and Knanaya Catholic Congress of North America (KCCNA) president Aniyan George. The opening of the Chicago showroom, a month after the opening of showrooms in Houston and New Jersey, is part of the Joyalukkas Group’s “aggressive” expansion plans. “Opening showrooms in the USA is a dream come true for all of us at Joyalukkas Group,” said Joy Alukkas, chairman and managing director of Joyalukkas Group. “Chicago is an exciting location and we are looking forward to providing the quality of jewellery and service Joyalukkas is known for. The response to the opening of our showroom in West Devon was heartwarming and we strive to return this great reception with great value and quality service for all customers.” Customers visiting the Joyalukkas Chicago showroom can also avail of the inaugural off ers.

Joyalukkas opens showroom in Chicago

Tajikistan eyes Qatariinvestments in tourism, and hydropower sectorsBy Peter AlagosBusiness Reporter

The Republic of Tajikistan is seeking to attract Qa-tari investments into the

country’s fi ve major sectors, in-cluding tourism and hydropower, said President Emomali Rahmon, who led a high-level business delegation to Qatar yesterday.

Rahmon and his delegation met with offi cials and members of the Qatar Businessmen Association (QBA), led by its chairman, Sheikh Faisal bin Qassim al-Thani, “to activate business cooperation” between Tajikistan and Qatar.

The president said Tajikistan has implemented a series of economic reforms and “positive policies” to lure Qatari invest-ment in the fi elds of hydropow-er, banking and fi nance, tour-ism, mining, and agriculture.

“During the last decade, we were able to attract more than $10bn in

foreign investments, which is why our economy is growing rapidly in all sectors. These improvements have placed our country among the world’s Top 10 in terms of eco-nomic reforms.

“Qatar is one of our main global partners and we are in-terested in cementing economic ties at all levels. This meeting is a signifi cant factor for enhanc-ing multi-faceted cooperation between Tajikistan and Qatar,” said Rahmon, citing other sec-tors such as transportation and

communications. Rahmon also said Tajikistan has four eco-nomic zones “that are ready for Qatari investments” in the fields of cement, energy, wa-ter, and the chemical indus-try. Speaking to Gulf Times on the sidelines of the meeting, Jamoliddin Nuraliev, first dep-uty chairman, National Bank of Tajikistan, said the government has streamlined and simplified procedures in doing business to provide many investment opportunities for foreign in-

vestors. “In a recent speech in parliament, the president sug-gested policies for fl exibility and tax preferences and exemptions to stimulate investor appetite and interest in Tajikistan’s tourism sector.

“Despite a turbulent global economy, we have achieved remarkable eco-nomic progress over the past several years and the country boasts of an investment en-vironment that is conducive for business. Tajikistan is now ready for Qatari investments,” Nuraliev stressed.

In his presentation, Nuraliev announced plans to invite Qa-tar Airways to launch flights from Doha to Tajikistan as part of efforts to transform the country into an investment hub. Citing a 3.1bn population around Tajikistan, Nuraliev said Qatar can tap neighbour-ing countries like India, Rus-sia, Kazakhstan, China, Paki-

stan, and Afghanistan, as well as Central Asia.

Similarly, Sheikh Faisal in his speech said: “Tajikistan is situ-ated between three countries with the largest economies in the world, China, India, and Russia. Tajikistan has a huge stock of water and minerals, as well as agricultural and tourism investment opportunities for Qatari businessmen.”

Citing the Diar Dushanbe project, a mixed-use develop-ment in Tajikistan, Sheikh Faisal said Qatar is the fi rst Arab coun-try that had embarked on in-vestment projects in Tajikistan.

The meeting was also high-lighted by the signing of a Memorandum of Understand-ing between the Qatar Stock Exchange and the Central Asian Stock Exchange, a new financial institute in Tajikistan, which was established in April 2015 as “a unique platform for organised securities trading.”

Sheikh Mohamed is Aamal’s new managing director

Aamal Company ap-proved changes to its Board of Directors at its

meeting in Doha on Saturday. The BoD approved the

change of Al Faisal Holding LLC representative on the Com-pany’s Board of Directors by replacing Tarek Mahmoud al-Sayed with Sheikh Jabor Abdul Rahman Mohamed al-Thani, and the change of the City Lim-ousine LLC representative on the Company’s Board of Direc-tors by replacing Sheikh Turki Faisal Qassim al-Thani with Kamel Mohamed al-Agla.

The BoD also approved the election of a new managing director for the company, a post that was previously held by the representative of Al Faisal Holding LLC (Tarek M al-Sayed), which will now be held by Sheikh Mohamed Faisal Qassim Faisal al-Thani.

Aamal’s Board of Directors will comprise of the follow-ing: Sheikh Faisal Qassim Faisal Thani al-Thani (chairman), Sheikh Mohamed Faisal Qas-sim al-Thani (vice-chairman and managing director), Sheikh Jabor Abdul Rahman al-Thani (Representative of Al Faisal Holding), Sheikh Abdulla Ha-mad Qassim al-Thani (Repre-

sentative of Al Jazi real Estate), Sheikha Al Jazi Faisal Qassim al-Thani (Representative of Al Rayyan International Educa-tion), and Kamel Mohamed al-Agla (Representative of City Limousine) — all members.

Sheikh Faisal bin Qassim expressed his appreciation to the former managing director Tarek M al-Sayed for his eff orts and contribution in leading the company forward, achieving outstanding results and a mar-ket leading position at the local and regional level.

Sheikh Mohamed: At the helm.Sheikh Faisal: Positive approach.

QSE closes higher on foreign institutions’ buying supportBy Santhosh V PerumalBusiness Reporter

The Qatar Stock Exchange yester-day overcame the initial selling pressure to fi nally close 26 points

higher, mainly on overall buying sup-port from foreign institutions.

Insurance, telecom, realty, transport and banking counters witnessed higher demand, which led the 20-stock Qatar Index gain 0.25% to 10,596.39 points, although global oil prices rose on the US sanctions on Iran’s certain entities and individuals.

Brisk buying was seen among small and large cap equities on the market, whose year-to-date gains were at 1.53%.

Islamic stocks were, however, seen underperforming the main index on the bourse, where local and Gulf retail investors turned bearish and there was lower buying support from Gulf insti-tutions.

Trade turnover shrank amid higher volumes on the bourse, where telecom, real estate and banking sectors together accounted for more than three-fourth of the total volumes.

Market capitalisation was down QR0.11mn or 0.02% to QR567.94bn mainly on 0.68% decline in microcap equities; whereas small, large and mid-caps gained 0.5%, 0.36% and 0.19% respectively.

The Total Return Index rose 0.25% to 17,144.25 points and All Share Index

rose 0.22% to 2,909.9 points, while Al Rayan Islamic Index fell 0.28% to 3,972.74 points.

The insurance sector saw its index surge 1.33%, telecom (0.9%), realty (0.78%), transport (0.6%) and banks and fi nancial services (0.45%); whereas industrials and consumer goods shrank 1.22% and 0.07% respectively.

Major gainers included Qatar Insur-ance, Ooredoo, United Development Company, Barwa, Ezdan, Nakilat, Commercial Bank, Doha Bank, Aamal Company and Qatar Electricity and Water; even as Industries Qatar, Gulf International Services, Vodafone Qatar and Mazaya Qatar were among the los-ers.

Non-Qatari institutions turned net

buyers to the tune of QR31.9mn com-pared with net sellers of QR29.45mn last Thursday.

However, local retail investors turned net sellers to the extent of QR22.19mn against net buyers of QR16.36mn the previous trading day.

Domestic institutions’ net buying weakened considerably to QR0.97mn compared to QR11.31mn on February 2.

Non-Qatari individual investors’ net buying also declined to QR0.79mn against QR1.13mn last Thursday.

The GCC (Gulf Cooperation Council) institutions’ net selling strengthened to QR7.59mn compared to QR1.59mn the previous trading day.

The GCC retail investors turned net profi t takers to the tune of QR3.87mn

against net buyers of QR2.23mn on February 2.

Total trade volume rose 12% to 6.55mn shares, while value fell 13% to QR167.63mn and deals by 13% to 2,398.

The consumer goods sector’s trade volume more than tripled to 0.59mm equities and value more than doubled to QR29.34mn on 94% increase in transactions to 345.

There was 80% surge in the telecom sector’s trade volume to 2.22mn stocks, 44% in value to QR23.95mn and 13% in deals to 228.

The transport sector’s trade volume soared 56% to 0.56mn shares and value by 42% to QR15.81mn, while transac-tions fell 20% to 168.

The market witnessed 11% increase

in the industrials sector’s trade vol-ume to 0.42mn equities, 25% in value to QR27.36mn and 32% in deals to 567.

However, the banks and fi nancial services sector’s trade volume plunged 47% to 0.81mn stocks, value by 64% to QR28.79mn and transactions by 53% to 543. The real estate sector reported 10% decline in trade volume to 1.9mn shares and 15% in value to QR38.02mn but on 3% jump in deals to 500.

Although the insurance sector’s trade volume was fl at at 0.05mn equi-ties, there was 11% expansion in value to QR4.36mn but on 52% shrinkage in transactions to 47.

In the debt market, there was no trading of treasury bills and govern-ment bonds.

Saudi, Kuwait retreat; UAE bourses strongAtheeb Telecom, Nama Chemicals take hit in Saudi; political tensions encourage profit-taking in Kuwait; Dubai’s Shuaa Capital rises before annual earnings; Egypt’s Global Telecom breaks above range

ReutersDubai

Saudi Arabia’s stock market fell in a broad-based decline yesterday and political tensions helped to pull down Kuwait, while the United Arab Emirates bourses rose.The Saudi index closed 0.7% lower at 7,046 points with decliners outnumbering advancers by 121 to 29. Atheeb Telecom, which jumped last week on news of a deal to sell part of its telecommunications tower network to Saudi Telecom, pulled back 3.9%.Loss-making Nama Chemicals, which soared late last month on news of a recovery plan, was also hit by heavy profit-taking, sliding 6.7%.In Kuwait, the index sank 2.3% to 6,687 points as investors took profits after a 19% leap in January.Much selling was in real estate stocks, which gained sharply during the bull run.Abyaar Real Estate dropped 6.5%.

Kuwaiti newspapers reported the cabinet might be reshuff led or resign early this week in an eff ort to avoid a vote of no-confidence in the minister of information and youth.Ten Kuwaiti lawmakers filed a motion last week to hold a vote of no-confidence in the minister after questioning him over the country’s 15-month international sports ban — a sign of political tensions that could ultimately slow the government’s economic development plans.In Dubai the index rose 0.7% to 3,648 points as Dubai Islamic Bank rebounded 3.9% after several days of falls. Shuaa Capital added 1.9%.The company said its board would meet on February 13 to approve annual earnings, followed by a news conference.Investors expect Shuaa to detail its strategy after Abu Dhabi Financial Group bought a 48.36% stake in it last November.Abu Dhabi’s index rose 1.0% to 4,490 points on the back of strong banks, with National Bank of Abu Dhabi gaining 2.1%.Egypt’s index gained 0.6% as Global Telecom rose 2.5% to 7.38 Egyptian pounds, breaking above its narrow range of the past two weeks.In Oman, the index edged up 0.1% to 5,808 points and the Bahrain index fell 0.4% to 1,302 points yesterday.

Rahmon: Flexible policies.

BUSINESS COOPERATION: Page 16 BUSINESS

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