BUSINESS - thepeninsulaqatar.com · Nissan, Renault in merger talks as alliance deepens BLOOMBERG SOUTHFIELD: Renault SA and Nissan Motor Co. are in talks to merge, seeking to solidify

BUSINESSSaturday 31 March 2018

PAGE | 20PAGE | 18 Trump may hold up SouthKorea trade deal

Japan may be forced into trade

deal with US

Huge pipeline of GCC projects tipped for 2018SATISH KANADY THE PENINSULA

DOHA: Rising oil prices and increased government spending is fuelling demand in the GCC’s construction sector, with contractor awards across the region’s building, infrastructure and energy markets expected to be worth $148.7bn in 2018.

According to a white paper published by research specialists Ventures Onsite yesterday, buildings will hold the lion’s share of what’s expected to be a huge pipeline of projects in 2018.

In 2018, it’s estimated that $79.1bn worth of construction contractor awards will be

attributed to buildings in the Gulf Cooperation Council (GCC), fol-lowed by energy projects

($44.9bn), and infrastructure ($24.6bn).

The total value of expected construction contractor awards in 2018 is slightly up on the 2017 figure ($147.8bn), according to Ventures, as economic activity picks up across the region amid a revival in non-oil sector growth and broad fiscal reforms.

The March 2018 report, titled: ‘Snapshot of the GCC Con-struction Industry’, was released ahead of the Hardware + Tools Middle East 2018 trade fair.

Ahmed Pauwels (pictured), CEO of Hardware + Tools Middle East’s organiser Messe Frankfurt Middle East, said: “Ongoing investments in infrastructure and

commercial projects as well as upcoming mega international events planned for the GCC con-tinue to drive regional con-struction activity.

“The construction sector is among the chief bellwethers of

economic development and progress in the region and the current positive mood is reflected among global hardware, tools and machinery brands looking to gain further traction in one of the world’s

most exciting markets today.” The breakdown of the GCC con-struction market comprises buildings (residential, com-mercial, mixed use, airports, sports facilities, hotels, healthcare, educational facilities and industrial projects), infra-structure (roads, bridges, railways, ports, wastewater and sewerage), and energy (oil & gas and power & water).

According to Ventures, the buildings segment will register the most growth year-on-year. The expected $79.1bn of building construction contractor awards across the GCC in 2018 is 10 percent up on the previous year ($71.9bn).

Buildings segment will register the most growth y-o-y. The expected $79.1bn of building construction contractor awards across the GCC in 2018 is 10% up on previous year ($71.9bn).

Buildings will hold the lion’s share of

what’s expected to be a huge

pipeline of projects in 2018.

8,573.99 +20.85 PTS0.24%

QSE FTSE100 DOW BRENT7,056.61 +11.87 PTS0.17%

24,103.11 +254.69 PTS1.17% Dow & Brent before going to press

$64.91 +0.53

18 SATURDAY 31 MARCH 2018BUSINESS

Trump may hold up South Korea trade dealREUTERS

RICHFIELD: US President Donald Trump said he may hold up a trade agreement reached this week with South Korea until after a deal is reached with North Korea on denuclearization.

“I may hold it up until after a deal is made with North Korea,” Trump said in a speech on Thursday. “You know why? Because it’s a very strong card. And I want to make sure eve-ryone is treated fairly,” he added.

Senior US officials have expressed concerns privately that Seoul is the weak link in the US-Japan-South Korean alliance and could be too quick to seal a deal with North Korea.

Trump agreed this month to accept an invitation to meet with North Korean leader Kim Jong

Un. South Korean officials have said the meeting would take place by the end of May, after a North-South summit in April.

“We’re moving along very nicely with North Korea. We’ll see what happens. Certainly the

rhetoric has calmed down just a little bit,” Trump told con-struction workers in Ohio.

The United States and South Korea earlier this week agreed to revise their six-year-old free trade agreement with a side deal

to deter competitive currency devaluation by Seoul and more access for US automakers and drug makers to the South Korean market.

The deal also lifts the threat of a 25 percent US tariff on imports of steel from South Korea in exchange for quotas that will effectively cut US imports of Korean steel by about 30 percent. Without the agreement in place, the tariffs would take effect May 1.

A statement by US Trade Minister Robert Lighthizer and South Korean Trade Minister Hyun Chong Kim described steel terms as being agreed, with the KORUS free-trade deal changes as an “agreement in principle on the general terms” while details are still being finalized.

The US Treasury and the South Korean Ministry of Strategy and Finance are final-izing the currency terms, they said.

The trade deal changes, which preserve the US-South Korean trading relationship at a critical time for Seoul, do not need congressional approval but are subject to a 60-day consul-tation period with Seoul.

The White House said the two sides had reached a “great new KORUS agreement in prin-ciple” and it was up to Trump to decide when to finalize it.

“The president, taking into account all relevant considera-tions - including negotiations with North Korea - will determine the best time to sign a finalized agreement on behalf of the United States,” Principal

Deputy Press Secretary Raj Shah said.

South Korea’s Minister of Trade, Industry and Energy Paik Un-kyu said on the sidelines of a news conference in Seoul that the ministry was trying to figure out the real intent of Trump’s remarks, a trade ministry spokeswoman said.

The ministry had made a request to the US side, said a senior ministry official who declined to identified due to the sensitivity of the matter.

“In terms of the negotiation schedule, we would have to review terms legally and finalise a draft... Both South Korea and the United States have their own domestic procedures, so we’re not at a signing stage because those procedures take time,” the official said.

Vietnam’s foreign exchange reserves above $60bn: PMREUTERS

HANOI: Vietnam’s foreign exchange reserves have exceeded $60bn, Prime Minister Nguyen Xuan Phuc said on yesterday.

The amount appears to be a record high. Foreign exchange reserves of the Southeast Asian

country have been growing steadily in recent years, backed by robust exports.

The government reported a trade surplus of $1.3bn for the first quarter of 2018.

“We are trying to improve Vietnam’s business envi-ronment, aiming to make it one of the most favorable and

competitive among ASEAN countries,” Phuc said in a speech to a Greater Mekong Subregion Summit in Hanoi, yesterday.

The prime minister reit-erated that the government intends to cut the corporate income tax rate to 15-17 percent from 20-22 percent.

FROM LEFT: Thongloun Sisoulith, Laos’ Prime Minister; Hun Sen, Cambodia’s Prime Minister; Nguyen Xuan Phuc, Vietnam’s Prime Minister; and Wang Yi, China’s State Councillor and Foreign Minister; attend a business conference as part of the Greater Mekong Subregion Summit in Hanoi, Vietnam, yesterday.

Bank of China back in black, CCB profit also picks upAFP

SHANGHAI: Bank of China swung back into the black last year while China Construction Bank also joined the country’s state-owned lenders in posting a profit pick-up on the back of an accelerating domestic economy.

Bank of China, the coun-try’s main foreign exchange bank, swung from a near three percent net loss in 2016 to a net profit of 172.4 billion yuan ($27.4bn), up 4.8 percent, according to a statement late Thursday to the Hong Kong stock exchange where it is listed.

China Construction Bank (CCB), the country’s second-biggest, had earlier reported to the exchange that 2017 net profit grew 4.7 percent to 242.3 billion yuan, up from less than two percent growth the pre-vious year.

Bank of China credited a “stronger-than-expected” eco-nomic expansion, adding that “China’s banking industry as a whole remained sound with steady growth in assets and liabilities”.

The remaining half of China’s “Big Four” banks -- The Industrial and Commercial

Bank of China and Agricultural Bank of China -- had reported improved earnings earlier this week, citing similar factors.

China’s economy grew a forecast-beating 6.9 percent in 2017, picking up steam for the first time since 2010.

All four of the big banks saw profit growth largely flat-line in the preceding two years as concerns grew over rising bad loans.

But both Bank of China and CCB reported lower non-per-forming loans (NPLs) for 2017 due to “moderate deleveraging in the domestic financial system”.

Analysts said the big banks also are benefiting from the Chinese government’s cam-paign to clean up bad loans and risky lending in its often chaotic and murky financial system.

The crackdown is seen as hitting smaller lenders and wealth management companies hardest, driving them to seek loans from the established banks in order to clean up their balance sheets.

China’s banking regulator is also believed to have recently lowered bad-loan provisions for banks, according to a Bloomberg News report, which frees up more cash for lending.

Nissan, Renault in merger talks as alliance deepensBLOOMBERG

SOUTHFIELD: Renault SA and Nissan Motor Co. are in talks to merge, seeking to solidify their two-decade-old alliance under a single stock as an unprece-dented shift toward electric and shared cars transforms the industry, people with knowledge of the matter said.

A deal would end the current alliance between the companies and marry them as one corpo-ration, said the people, who asked not to be identified as the details aren’t public.

Renault currently owns 43 percent of Nissan while the Jap-anese carmaker has a 15 percent stake in its French counterpart.

Carlos Ghosn (pictured), the chairman of both companies, is driving the negotiations and would run the combined entity, the people said.

A merged giant would be a more formidable rival for Volkswagen AG and Toyota Motor Corp., allowing the partners to better pool resources as the industry shifts toward new-energy vehicles, auton-omous driving and car-sharing services.

While the alliance of Renault and Nissan has brought savings, the fragmented ownership

structure has prevented the com-panies from reaping full benefits from their union.

“Size matters in the auto industry,” said Janet Lewis, an analyst at Macquarie in Tokyo. “The concern has always pri-marily been the French gov-ernment, and somewhat Japan, because both France and Japan like to keep their national champions.”

The parties are discussing a transaction in which Nissan would essentially give Renault shareholders stock in the new company, the people said.

Nissan shareholders would also receive shares in the new company in exchange for their holdings, they said. The auto-maker may maintain head-quarters in both Japan and France.

Renault shares jumped as much as 8.3 percent, hitting the highest intraday level in more than a decade. They were up 5.8 percent at the market close in Paris, giving the company a market value of about ¤29bn ($36bn).

Nissan shares rose 0.5 percent as of 9:11 a.m. in Tokyo on Friday, giving the company a valuation of about 4.6 trillion yen ($44bn).

Getting a deal done could

prove very difficult, the people said. The French government owns 15 percent of Renault and may be reluctant to relinquish control over its stake or have its position watered down.

Both the French and Japanese governments would also have to approve a deal and may have strong opinions on where the combined company is domiciled, the people said.

One possibility would be to base the company in London or the Netherlands, where cross-Atlantic carmaker Fiat Chrysler Automobiles NV has its corporate charter. Fiat Chrysler maintains headquarters in both Italy and the US.

No final decisions have been made and the talks, which have been ongoing for several months, may not result in a deal, they said.

A spokesman for the Renault-Nissan alliance said the group doesn’t comment on rumors and speculation, while a spokesman for the French finance ministry declined to comment. Representatives for Yokohama, Japan-based Nissan and Renault also declined to comment.

Reuters reported earlier this month that Nissan was in talks to buy the bulk of the French gov-ernment’s stake in Renault, citing

unidentified people. The Renault-Nissan alliance said at the time any discussion about a share transaction involving the parties was “pure speculation.”

Ghosn has pledged to cement Renault’s partnership with Nissan, saying in February that the companies would devise a plan to “make the alliance irre-versible.” The 64-year-old relin-quished the chief executive officer role at Nissan last year to focus on the partnership.

The companies are seeking to double synergies to ¤10bn by 2022 from 2016.

In April, Mitsubishi Motors Corp. -- in which Nissan is the largest shareholder -- will further integrate with the alliance by

joining a shared parts-purchasing organization. The alliance fore-casts unit sales of 14 million units by 2022, compared with 10.6 million last year.

Volkswagen, the world’s largest carmaker, sold 10.7 million vehicles last year, while Toyota sold 10.4 million.

“To compete against the Toyotas, Renault-Nissan-Mit-subishi very much has to do it as one big group,” Macquarie’s Lewis said.

While the companies have claimed a multitude of benefits from their partnership, its staying power could be complicated until imbalances in the companies’ ownership structures are resolved.

Ghosn reiterated last month that Japan wouldn’t agree to a tighter structure if France remains a shareholder. He also said he isn’t trying to convince the French state to reduce its stake in Renault.

“They decide to be here or to get out,” he said.

“Frankly, I don’t even open this subject. I just consider that I have the shareholders that I have and I try to satisfy them in the best way possible and as much as possible make sure that they understand our strategy and appreciate our results.”

The US and S Korea earlier this week agreed to revise their six-year-old free trade agreement with a side deal to deter competitive currency devaluation by Seoul and more access for US automakers and drug makers to the S Korean market.

The White House said the two sides

had reached a “great new

KORUS agreement in

principle”

Huawei sees profit rebound

AFP

SHENZHEN: Chinese telecom giant Huawei saw it profits rebound in 2017, helped by strong smartphone sales as it ramps up R&D spending despite suffering setbacks in its US ambitions.

The third-biggest smart-phone manufacturer in the world behind Samsung and Apple, Huawei yesterday announced net profit climbed 28 percent last year to 47.5 billion yuan ($7.3bn), recov-ering from a near-stagnant 2016.

The group said it bene-fited from strong smartphone sales despite fierce compe-tition in China and elsewhere, with 153 million units sold and a 32 percent jump in rev-enues from its consumer goods business.

Huawei, which is also one of the world’s leading tele-communications equipment suppliers, however saw its total turnover falter, with growth halved to 15.7 percent for a total of 604 billion yuan.

Despite this, the Shenzhen-based firm last year increased its research and development spending by 17 percent to $13.8bn, approaching the level of expenditure by US giants Amazon and Alphabet, Google’s parent.

“Opportunities and chal-lenges are popping up faster than ever before, and non-stop open innovation is the only way we can keep ahead of the game,” said chairman Ken Hu, referring to the focus on artificial intelligence, cloud computing and 5G.

Facing competition from Scandinavian firms Ericsson and Nokia, Huawei is going all out for 5G, which promises blazingly-fast wireless internet with the first com-mercial deployments expected this year.

Huawei, which is already working with European oper-ators, also promised to launch a 5G-compatible smartphone from 2019.

“Over the next 10 years, Huawei will continue to increase investment in tech-nological innovation, investing more than $10 billion back into R&D every year,” and even up to $20 billion, Hu told reporters in Shenzhen.

H u a w e i ’ s s t r o n g investment in R&D comes amid growing concerns in the United States over Chinese competitors in telecoms, especially 5G.

Huawei itself has suf-fered stinging commercial setbacks in the United States.

Its sales there are largely paralysed against a back-ground of concerns by US authorities that its equipment could be used for espionage.

19SATURDAY 31 MARCH 2018 BUSINESS

Opinion In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2017, and the results of its operations, changes in owners’ equity and cash flows for the year then ended in accordance with the Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions and the Shari’a rules and principles as determined by the Shari’a Supervisory Board of the Bank.

Report on Other Legal and Regulatory RequirementsWe have obtained all the information and explanations we considered necessary for the purpose of our audit. The Bank has maintained proper accounting records and the consolidated financial statements are in agreement therewith. We are not aware of any violations of the applicable provisions of the Qatar Financial Centre Regulatory Authority regulations or the terms of the Article of Association and any amendments thereto having occurred during the year which might have had a material effect on the Bank’s consolidated financial position or performance as at and for year ended 31 December 2017.

Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Qatar First Bank L.L.C (Public) (the ‘Bank’) and its subsidiaries (together referred to as the ‘Group’) which comprise the consolidated statement of financial position as at 31 December 2017, the consolidated statements of income, changes in owners’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Respective Responsibilities of the Board of Directors and Auditors These consolidated financial statements and the Group’s undertaking to operate in accordance with Islamic Shari’a rules and principles are the responsibility of the Board of Directors of the Bank. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

Basis of OpinionWe conducted our audit in accordance with the Auditing Standards for Islamic Financial Institutions issued by the Accounting and Auditing Organisation for Islamic Financial Institutions. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentations. We believe that our audit provides a reasonable basis for our opinion.

Gopal Balasubramaniam

KPMGAuditor’s Registration No. 251Licensed by QFMA: ExternalAuditor’s License No. 120153

28 March 2018Doha

State of Qatar

INDEPENDENT AUDITOR’S REPORT

TO THE SHAREHOLDERS OF

QATAR FIRST BANK L.L.C (PUBLIC)

QATAR FIRST BANK L.L.C (Public)CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2017 (expressed in QAR’000)

QATAR FIRST BANK L.L.C (Public) CONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2017 (expressed in QAR’000)

These consolidated financial statements were authorised for issuance by the Board of Directors on

28 March 2018 and signed on its behalf by:

Abdulla bin Fahad bin Ghorab Al Marri

Chairman

Jassim Mohammad Al-Kaabi

Board Member

As at

31 December 31 December

2016 2017

Notes

ASSETS

1,113,796 372,029 5 Cash and cash equivalents

355,000 477,218 6 Due from banks

893,217 156,205 7 Investments carried at amortised cost

1,472,871 1,490,186 8 Financing assets

249,691 315,272 9 Accounts receivable

64,113 75,534 10 Inventories

1,176,160 923,454 11 Equity investments

218,138 243,710 12 Investments in real estate

168,543 189,483 13 Fixed assets

26,705 18,206 14 Intangible assets

86,253 570,866 15 Assets of disposal group classified as held-for-sale

153,312 126,346 16 Other assets

5,977,799 4,958,509 TOTAL ASSETS

LIABILITIES, EQUITY OF UNRESTRICTED

INVESTMENT ACCOUNT HOLDERS AND EQUITY

Liabilities

1,100,228 812,975 17 Financing liabilities

108,396 99,976 18 Customers’ balances

- 362,132 15 Liabilities of disposal group classified as held-for-sale

196,454 272,762 19 Other liabilities

1,405,078 1,547,845 Total Liabilities

2,697,670 1,713,793 20 Equity of Unrestricted Investment Account Holders

Equity

2,000,000 2,000,000 21 Share capital

(561) - Fair value reserve

(200,754) (470,014) Accumulated deficit

1,798,685 1,529,986 Total Equity Attributable to Shareholders of the Bank

76,366 166,885 Non-controlling interest

1,875,051 1,696,871 Total Equity

5,977,799 4,958,509

TOTAL LIABILITIES, EQUITY OF UNRESTRICTED

INVESTMENT ACCOUNT HOLDERS AND EQUITY

For the year ended

31 December 31 December

2016 2017

Notes

CONTINUING OPERATIONS

INCOME

442,711 370,200 22Revenue from non-banking activities

(176,496) (142,419)11.2Loss on re-measurement of investments at fair value through income statement

13,115 25,479 Dividend income

28,778 20,992 Profit on investments carried at amortised cost

673 1,265 Gain on disposal of investments carried at amortised cost

- 23,641 Gain on disposal of equity investments

68,984 81,602 Income from financing assets

31,037 25,577 Income from placements with financial institutions

61,868 7,454 23Other income

470,670 413,791 Total Income Before Return To Unrestricted Investment Account Holders

(84,554) (79,624)20Return to unrestricted investment account holders

386,116 334,167 TOTAL INCOME

EXPENSES

(444,506) (421,195)22Expenses from non-banking activities

(80,150) (71,522)Staff costs

(22,525) (21,452)Financing costs

(12,510) (10,504)13&14Depreciation and amortisation

(68,671) (54,457)24Other operating expenses

(628,362) (579,130)TOTAL EXPENSES

(25,316) (41,948)8.1Provision for impairment on financing assets

(267,562) (286,911)NET LOSS FROM CONTINUING OPERATIONS

DISCONTINUED OPERATIONS

1,199 4,924 15.2 (b)Profit from discontinued operations, net of tax

(266,363) (281,987)NET LOSS FOR THE YEAR

Attributable to:

(265,687) (269,260)Equity holders of the Bank

(676) (12,727)Non-controlling interest

(266,363) (281,987)

(1.34) (1.37)25Basic / diluted loss per share from continuing

operations - QAR

0.01 0.02 25Basic / diluted earnings per share from discontinued

operations - QAR

(1.33) (1.35)Basic / diluted loss per share - QAR

Below is the extract from the full set of annual consolidated financial statements, which are available at www.qfb.com.qa

PO Box 28028 | Doha, Qatar | T +974 4448 3333 | F +974 4448 3560 | [email protected] | www.qfb.com.qa

Qatar First Bank LLC (Public) is authorized by QFCRA under license No. 00091 and listed on the Qatar Stock Exchange

20SATURDAY 31 MARCH 2018 BUSINESS

Japan may be forced into trade deal with USREUTERS

TOKYO: Japan will have little choice but to enter into a bilateral trade deal with the United States similar to one President Donald Trump clinched with South Korea, a former top Japanese currency diplomat said.

Naoyuki Shinohara, who was also deputy managing director at the International Monetary Fund, said Wash-ington will keep pushing for a bilateral free trade agreement (FTA) with Japan given Trump’s “America First” agenda - and Tokyo’s calls to use a multi-lateral framework will only buy it some time.

“The United States is only interested in a bilateral deal and probably won’t listen to Jap-anese calls for a multilateral approach on trade,” said Shi-nohara, who retains close contact with international financial diplomats.

“Japan will eventually have to enter FTA talks” and face US pressure to open up its auto and farm markets, he told Reuters on Friday.

Global markets were shaken this month when Trump moved to impose tariffs on Chinese goods and Beijing threatened similar measures, stoking fears of a global trade war.

Shinohara said there was a small but real risk of a United States-China trade war, which could spiral out of control given Trump’s unpredictability.

“A trade war is a worse-case scenario and doesn’t make eco-nomic sense as both sides will

lose. But once there’s a war, it’s hard to stop shooting. The pos-sibility is small but not unthinkable,” he said.

An escalating trade spat could spread, including to Japan, said Shinohara, currently a pro-fessor at a University of Tokyo research institute.

Japanese policymakers worry that Trump could use a similar approach to what he took with South Korea, which agreed on a trade pact with a side deal to deter competitive currency devaluation.

Shinohara, who coordinated Asian policies during his IMF stint, said there was a “pretty good chance” Washington will make similar demands to Japan - entering talks for a bilateral FTA, with a side deal on cur-rencies. Trump will use such talks to demand more US access to Japan’s auto and highly-pro-tected agricultural markets, he added.

Japan and the United States remain at loggerheads on how to frame trade talks, with Tokyo pushing back against US calls for negotiations on a bilateral FTA.

NYSE in talks to buy Chicago Exchange for $70m: WSJBLOOMBERG

CHICAGO: The New York Stock Exchange is in talks to buy the Chicago Stock Exchange, the Wall Street Journal reported yesterday, after US regulators rejected by a bid by a Chinese-linked consortium to take over the 136-year-old bourse.

NYSE has discussed paying about $70m for the business, though the talks could still fall apart, the news-paper said, citing people familiar with the matter it didn’t identify. The Chicago exchange handles less than 1 percent of daily US stock trading.

Representatives for both exchanges declined to comment on the Journal story.

The Chicago exchange, founded in 1882, had ambi-tions of establishing itself as a marketplace for small com-panies, especially those based in China. But the Securities and Exchange Commission last month ruled that the bid by the Chinese investors didn’t comply with US rules governing stock exchanges. The SEC said it couldn’t resolve concerns about the proposed ownership structure, which would’ve given 29 percent of the company to a China-based shareholder.

Though the transaction was relatively small, it drew outsize attention because of the country of origin of the lead investor, Chongqing Casin Enterprise Group Co. SEC Chairman Jay Clayton, who joined the agency this year following a career as a deals lawyer, has publicly fretted that it’s too hard for companies to go public in the US. The exchange had hoped to address that situation by selling itself, while also cre-ating a conduit to China.

Opponents of the takeover, including a number of US lawmakers, said letting a Chinese firm invest in a US exchange was a bad idea. On the campaign trail, Donald Trump blasted the transaction after it was announced in early 2016.

Chicago wouldn’t be the first small exchange that NYSE has taken over. In December 2016, NYSE agreed to buy the National Stock Exchange, which handled only 0.01 percent of US stock trading.

Netherlands to phase out gas production at EU’s biggest fieldAFP

THE HAGUE: The Dutch government is almost halving production at Europe’s biggest gas field after a raft of damaging earthquakes, aiming to even-tually shut taps by 2030, top offi-cials announced on Thursday.

“Gas production will be scaled down to 12 billion cubic metres within the coming four to five years and eventually to zero in the next decade,” Prime Minister Mark Rutte told a press

conference. “Even at a level of 12 billion cubic metres, it’s not safe. Gas production must simply go down to zero,” added Eco-nomics Minister Eric Wiebes, who said extraction from the northern Groningen gas field will stop by 2030.

The current gas output is some 21.6 billion cubic metres, which was set in April 2017 and was already drastically scaled back from 53.9 billion cubic metres in 2013.

Groningen’s residents have

been calling for gas production to halt following a series of low-level tremors plaguing the area, damaging homes, schools, churches and farms.

The low-magnitude quakes are said to result from huge air pockets left underground because of gas extraction.

In one of the latest incidents, a 3.4-magnitude tremor hit the area in January -- the largest since 2012. On Thursday, Wiebes said “technically” it would remain possible to continue with

gas extraction. But continued production “cannot be defended when it comes to safety issues,” Wiebes said, calling Thursday’s

announcement a “turning point.” “Until now we’ve been

fighting the symptoms and not the cause,” he said.

Eric Wiebes, Dutch Minister of Economic Affairs and Climate, speaking to the media on the government plans for the gas production in the province of Groningen in the Hague.

ABB’s annual shareholder meetingPeter Voser (left), Chairman of Swiss power technology and automation group ABB sits beside as Ulrich Spiesshofer, Chief Executive of ABB addresses the company’s annual shareholder meeting in Zurich, Switzerland.

Facebook gets thumbs down for handling of data scandalAFP

PARIS: When it comes to its handling of the scandal over how its users’ data was harvested to help elect US President Donald Trump, Facebook gets an almighty thumbs down from crisis management experts.

Public relations specialists questioned by AFP were damning in their verdict of how the world’s biggest social network has dealt with the fall-out of the revelations that Cam-bridge Analytica obtained users’ personal information to try to manipulate US voters.

Slow and unconvincing explanations they say have left Facebook founder Mark Zuck-erberg dangerously exposed.

While the news that the data of 50 million users had been hijacked broke in the The Observer newspaper on March 17, it took Zuckerberg five days to publicly address the firestorm by apologising first on Facebook and then CNN.

That is an eternity in the digital age, said Marie Muzard,

head of the MMC communica-tions agency.

“The most basic of basics in crisis management is that every hour that passes without reacting allows a little more sound and fury to gather,” she said.

What makes that all the more ironic was that much of that fury was gathering on Facebook itself.

“Because Facebook is a com-munications platform it has especially a responsibility to be timely and proactive in its response,” said Seth Linden, president of New York-based

Dukas Linden Public Relations.“It’s one of the most influ-

ential brands in the world, which made the lack of a timely response even more negatively impactful.”

The manner of Zuckerberg’s mea culpa and his attempts to explain the breach have been far from convincing, according to Laure Boulay of the Paris-based L’Atelier de l’Opinion (Opinion Workshop). Instead the crisis has “highlighted the kind of smoke-screen” behind which Facebook has worked, she said.

“You can see they need to restore confidence, but Facebook is in a very weak position because it was not transparent enough before all this happened about how it worked and what its teams were doing,” she added.

Muzard was even more damning. “Zuckerberg was smart enough to hold up his hands up and try to offload some of the responsibility onto the researcher Aleksandr Kogan and Cambridge Analytica. Yet pleading naivety and saying that they never thought the data would be used to swing elections is very problematic.

“It is just not credible for a company as smart as Facebook to say that,” she said. “If we are to believe that it means that Zuckerberg has created a monster that he cannot control, like Frankenstein. And if we don’t swallow that, it implies is that he may be lying,” she added.

With the face of the social network having to face the music alone up until now, Zuckerberg risks being burned, experts warned.

Many commentators have noted the conspicuous absence of Zuckerberg’s right-hand woman, Sheryl Sandberg, the architect of the internet giant’s hugely profitable advertising business based on exploiting its users’ data.

The bestselling self-help author had been regarded as the savvy, emotionally intelligent “adult” of the company in con-trast to the youthful geeky Zuckerberg.

“The crux of the crisis is the almost hero status of Zuckerberg and Sandberg,” Boulay insisted.

“They have been weakened and we are now practically in the narrative of the fallen idol. The way the company is totally iden-tified with its founder rather than those who actually run the company has left it fragile in the face of the crisis,” she added.

Muzard warned that Zuck-erberg is personally vulnerable if the “crisis of confidence lingers on. He might find it hard to hold on if shareholders start getting out. Things can happen very quickly. His equivalent at Uber

did not survive a series of crises, and because Zuckerberg person-ifies Facebook there is no real fall guy to take the bullet for him.”

He is therefore taking a big gamble by agreeing to testify before the US Congress, even if Facebook has also ramped up its lobbying of politicians.

“There is tremendous pressure on him,” said Linden, who has prepared other company bosses to face grillings by lawmakers. Ideally, he said Zuckerberg would need a month of coaching.

“He must have the patience, knowledge and delivery needed to get through this experience. He must understand the nuances of key congressional committee members’ style and their state’s needs, and he must be inform-ative without being uninten-tionally condescending or unclear in his message,” Linden said. “He must also have the right physical posture and tone of voice. Even with the best prep-aration, it will be a physically and emotionally exhausting,” he predicted.

Mark Zuckerberg (left), Facebook CEO; and Sheryl Sandberg, Chief Operating Officer of Facebook.

A trade war is a worse-case scenario and doesn’t make economic sense as both sides will lose. But once there’s a war, it’s hard to stop shooting.

French inflation spikes in MarchAFP

PARIS: Inflation in France bounced back in March, data showed yesterday, bolstering hopes that consumer prices in the eurozone are finally moving towards more growth-friendly levels.

French annual inflation spiked to 1.5 percent this month, up from 1.2 in February, mostly thanks to price rises in services, food and tobacco products, sta-tistics office INSEE said in a first estimate.

The figures from France, the eurozone’s second-biggest economy, came a day after

powerhouse Germany reported a rebound in inflation to 1.6 percent in March, after 1.4 percent the previous month.

While still short of the 2.0-percent level that the European Central Bank (ECB) considers to be conducive to healthy eco-nomic expansion, inflation in Europe’s key economies has become less sluggish after years of anaemic price movements as economic growth picks up.

To kickstart consumer prices, the central bank has bought more than ¤2.3trillion ($2.8trillion) of government and corporate bonds and set interest rates at historic lows, hoping to

pump cash through the financial system and into households and businesses.

Month-on-month, French prices rose by a full 1.0 percent in March, having remained flat in February from the previous month.

Measured using the ECB’s preferred yardstick, the Harmo-nised Index of Consumer Prices (HICP), price growth amounted to 1.7 percent, faster than Ger-many’s 1.5 percent.

Separately yesterday, Italy, the eurozone’s third-biggest economy, said its inflation rate also rose in March, to 0.9 percent, after 0.5 percent in February.