RasGas signs new LNG deal with EDF to supply 2mn tonnes a ...

Thursday, June 30, 2016Ramadan 25, 1437 AH

BUSINESSGULF TIMES

ECB to hold fi re aft er Brexit vote

Airport blasts slam tourism industry hard

NO RUSH | Page 15TUREKY WOES | Page 4

RasGas signs new LNG deal with EDF to supply 2mn tonnes a yearRas Laff an Liquefi ed Natural Gas Com-

pany - 3 (RL 3) has entered into a new liquefi ed natural gas sales and pur-

chase agreement (SPA) with French energy company, EDF under which RasGas will de-liver up to 2mn tonnes a year to EDF’s new terminal in Dunkerque, France from 2017.

The agreement was signed by RasGas chief executive offi cer Hamad Mubarak al-Muhannadi and Marc Benayoun, EDF group senior executive, vice president gas and CEO of Edison.

This agreement complements three ex-isting long term SPAs between RasGas ven-tures and EDF group subsidiaries for deliv-ery of up to 4.6mn tonnes per year to Edison in Italy and up 3.5mn tonnes per year to EDF Trading in Belgium.

Al-Muhannadi said, “This latest agree-ment is an excellent example of RasGas’ continued commitment to developing and executing opportunities that respond to our customer’s needs. We are proud that, together with EDF, we have played a signifi -cant role in continuing to provide a safe and reliable supply of energy to the homes, busi-nesses and communities of Europe.”

Benayoun said, “This agreement with RasGas refl ects EDF’s growing interest in the LNG markets. The group is proud to add this signifi cant contract to its global LNG portfolio and to reach a new important milestone in the excellent relationship with RasGas, who already delivers LNG cargoes to the group under long-term contracts in both Rovigo and Zeebrugge terminals.

“At a time when Dunkerque LNG is due to receive its fi rst commissioning cargo early July, this new contract demonstrates Dun-kerque LNG’s outstanding position in the North West European gas markets.”

RasGas is a Qatari joint stock company established in 2001 by Qatar Petroleum and ExxonMobil RasGas Inc. RasGas acts as the operating company for and on behalf of the owners of the liquefi ed natural gas projects RL, RL (II) and RL3.

With operations facilities based in Ras Laff an Industrial City, RasGas’ principal ac-

tivities are to extract, process, liquefy, store and export LNG and its derivatives from Qa-tar’s North Field.

RasGas exports to countries across Asia,

Europe and the Americas with a total LNG production capacity of approximately 37mn tonnes per year.

RasGas chief marketing and shipping of-

fi cer, Khalid Sultan R al-Kuwari and Pierre Vergerio, Edison executive vice president, (midstream gas, energy management and optimisation) were also present.

SERIES OF INITIATIVES: Page 16

Qatar Chamber, Ooredoo join hands to promote business development

Qatar-UK annual trade can exceed £5bn, says CameronQatar-UK annual trade has the potential to exceed £5bn, British Prime Minister David Cameron has said.“Qatar remains well positioned to weather the economic challenges it faces and will hopefully add significantly to the £30bn ($42.5bn) it has already invested in the UK,” Cameron told the publishing, research and consultancy firm Oxford Business Group (OBG)Cameron said he was confident economic cooperation between Qatar and the UK could continue to grow.“The fall in global energy prices will – as elsewhere – have an impact on Qatar’s economy; however, Qatar is well placed to respond,” he said. “If we can continue to be competitive, flexible and proactive, maintaining our position as Qatar’s leading European trading partner, then we can achieve an increased volume of bilateral annual trade beyond £5bn ($7.1bn).” The British prime minister’s thoughts on UK-Qatar relations will appear in full in The Report: Qatar 2016, OBG’s forthcoming publication on the country’s economy. The report will contain a detailed, sector-by-sector guide for investors, alongside contributions from leading personalities, including HE Sheikh Abdullah bin Nasser bin Khalifa al-Thani, Qatar’s Prime Minister and Minister of Interior.In his commentary, Cameron highlighted the benefits that both countries had gained from a healthy trading relationship. British

firms, he said, were playing a part in Qatar’s 2022 FIFA World Cup and the National Vision 2030 initiatives, rolling out projects in healthcare, education and financial services, among others.Qatar’s £30bn ($42.5bn) investment in the UK, meanwhile, had produced a raft of projects, which range from contributing to a liquefied natural gas terminal in Wales to real estate and retail initiatives, he added.“Two of the most iconic London buildings, Harrods in Knightsbridge and the Shard in the City, are both owned by Qatar,” he noted. Cameron also highlighted the “shared interest” that the UK and Qatar had in security. “Qatar’s security cannot be separated from the UK’s,” he said. “The security of both the UK and Qatar is linked to regional security and stability.”

Qatar Airways said to explore raising stake in British Airways owner IAGBloombergDubai/London

Qatar Airways is considering further increasing its stake in British Airways owner IAG after the UK-based company lost a third of its market value in

the fallout from the country’s vote to leave the European Union, according to people familiar with the matter.

Qatar Airways, already IAG’s largest shareholder, is exploring boosting its holding to about 20% from 15%, said the people, who asked not to be identifi ed because deliberations are private. The Middle Eastern airline is monitoring market developments and shareholders’ willingness to sell and hasn’t made a fi nal decision on the move, the people said.

Standard Life, the Scottish in-surer and asset manager which is among the top-three sharehold-ers, is also explor-ing increasing its stake in IAG to take advantage of the sell-off , according to people familiar with the matter. The Edinburgh-based fi rm owns about 6%, according to IAG’s website.

Representatives for Qatar Airways, IAG and Standard Life declined to comment.

IAG shares have tumbled about 33% since the Brexit vote, valuing the company at about £7.45bn ($10bn).

IAG lowered its 2016 profi t target just hours after the UK’s vote to leave the EU, saying the results threaten to extend a drop in demand that started in June in the run-up to the historic referendum. Aviation is particularly exposed because of the volatility of demand, which may erode earnings because airlines are forced to cut fares to lure passengers.

IAG chief executive offi cer Willie Walsh said on Tues-day he expects the impact to be short-lived and sees a boom in tourism spurred by a weaker pound off setting a slump in business travel at British Airways.

Qatar Airways CEO Akbar al-Baker said earlier this month he’s happy with the level of the company’s stake, which is not a mere fi nancial holding but a strategic in-vestment that will aid cooperation in areas such as joint fl eet purchases. The airline bought 9.99% of IAG in Jan-uary last year before building its position via a series of further purchases.

Qatar Airways, already IAG’s largest shareholder, is said to be exploring boosting its stake to about 20% from 15%

Qatar to stay fastest growing economy in Mena, says IIFBy Santhosh V PerumalBusiness Reporter

Qatar, which has been weathering the en-ergy prices crash, will remain the fastest growing economy at 3.7% this year and

3.8% in 2017 in the Middle East and North Af-rican (Mena) region, driven by 2022 World Cup-related projects, according to the Institute of In-ternational Finance (IIF).

Moreover, Qatar’s overall situation remains “manageable” given a relatively low breakeven oil price and high stocks of external assets, Washington-based IIF said. Hydrocarbons growth is expected to be 1.4% in 2016 and 2017; while non-hydrocarbons expansion is set to be faster at 6%, it said.

“We expect growth to continue to be under-pinned by infrastructure projects in preparation to host the 2022 FIFA World Cup, which has led to an infl ux of blue collar workers and kept popu-lation growth high at 9% a year in the past few years,” the IIF said.

But with oil and gas exports accounting for 90% of exports and almost 75% of fi scal rev-enues, the energy price collapse has hurt senti-ment and prompted a tighter rein on government spending, it said. The drop in hydrocarbon re-ceipts will shift the external and fi scal accounts from large surpluses in 2000-15 to moderate def-

icits in 2016 and 2017, but these should be “man-ageable without adjustments, the IIF added.

Although review is being conducted and ne-gotiations with contractors have been underway, leading to payment arrears by government, the IIF said while large existing projects such as the Doha metro are going ahead, execution of projects at lower cost has become the new mantra.

Finding that hydrocarbon revenues, which ac-count for 80% of total, are set to fall by 20% in 2016, it said since a portion of other fi scal income is based on receipts from entities with interests in the hydrocarbons, non-oil revenues are also to be “adversely” aff ected.

“The authorities are considering revenue-raising measures such as increases in fees for public sector services and are expected to imple-ment a value added tax in 2018, yielding 1%-2% of GDP (gross domestic product), together with other Gulf states,” it said.

Projecting gas prices to remain around current levels as the current global LNG (liquefi ed natu-ral gas) market glut is expected to persist, with supply increasing by about a quarter by 2018, mainly due to projects in Australia and the US; the IIF said the glut has already driven Japanese LNG import prices to $4.1/MMBtu, down from $18.3 in 2014.

Although the Barzan project is expected to come on stream possibly in the third quarter of 2016 and over time add about 6% to existing gas

output, the IIF expects gas production to “pla-teau” close to current levels.

The fall oil revenues has already led to lower sovereign expenditures with the number of min-istries being curtailed to 14 from 18 and cancella-tion of some projects as health insurance initia-tive ‘Seha’. Qatar has also cut subsidies by raising water and electricity tariff s in October and in-creasing fuel prices by more than 30% in January.

“While Qatar’s fuel subsidies were at the low end of the spectrum in the GCC (estimated at under 1% of non-oil GDP in 2015), their removal will allow higher dividends from state hydrocar-bon companies than would have been the case if subsidies remained,” the IIF said, adding these measures should be suffi cient to keep the defi cit at manageable levels in the coming years even if oil prices remain low.

THe IIF said with lower oil and gas prices, the fi scal balance will shift to a defi cit of 4.7% of GDP in 2016 (the fi rst defi cit in 15 years) versus a sur-plus of 10.3% of GDP in 2015.

Given the substantial investment income, it estimates Qatar’s fi scal breakeven oil price at $55 per barrel in 2016, unchanged from 2015, but “signifi cantly” lower than that of other oil ex-porters in the region.

The fi scal consolidation measures adopted since 2013 and the gradual recovery in oil and gas prices should put Qatar on a sustainable footing in the medium term, it added. Page 16

Cameron: Qatar-UK cooperation to grow.

Al-Muhannadi and Benayoun sign the SPA between RasGas and EDF as al-Kuwari and Vergerio look on. The agreement complements three existing long term SPAs between RasGas ventures and EDF group subsidiaries for delivery of up to 4.6mn tonnes per year to Edison in Italy and up 3.5mn tonnes per year to EDF Trading in Belgium.

BUSINESS

Gulf Times Thursday, June 30, 20162

Saudi tops Wall St agenda as global dealmaking slowsTop executives are putting Riyadh on their itineraries; Saudi investment banking fees jump by almost a third

BloombergDubai

When news broke in January that Saudi Arabia was con-sidering an initial public of-

fering of its state-owned oil company, the fi rst reaction on the Wall Street was shock. Then calls began pouring into Dubai - the Middle East’s fi nan-cial hub - from senior bankers in Lon-don and New York.

Investment banks around the world are clamouring to join what promises to be a bonanza, and not just the IPO of Saudi Arabian Oil Co, or Aramco, which could be valued at upward of $2tn. The kingdom is planning to sell hundreds of state assets to bolster its fi nances and reduce its dependence on oil. That includes as much as $15bn of bonds.

Saudi Arabia looks even more promising with investment banking in a global slump and Britain’s vote to exit the European Union set to deter deal-making for months to come.

“Saudi Arabia is close to the top, if not at the top, of the agenda for banks,” said Christopher Wheeler, a London-based analyst with Atlantic Equities LLP in London. “Where else is there at the moment?”

Fees paid to banks in the kingdom jumped by almost a third to about $100mn in the fi rst fi ve months of the year, according to New York-based research fi rm Freeman & Co. While that’s a fraction of what investment banks generate in the US and Eu-rope, the work of diversifying the kingdom’s economy is just getting started.

International banks elbowing for position are adding staff , dispatching top executives to Riyadh and promot-ing Saudis to senior roles. Among the

biggest banks, HSBC Holdings and JPMorgan Chase & Co appear to have a head start.

HSBC is working on the privatisa-tion of the Saudi Stock Exchange and the potential breakup of Saudi Elec-tricity Co, people with knowledge of the matter have said. Stuart Gulliver, chief executive offi cer of the London-based bank, travels to the kingdom regularly to meet decision makers, said a person familiar with his visits who asked not to be identifi ed dis-cussing internal matters.

Two HSBC bankers recently jumped to government roles. Moham-mad al-Tuwaijri, CEO for the Middle East, was appointed deputy economy and planning minister in May. Fahad al-Saif, general manager of global banking and markets at HSBC’s Saudi British Bank, is starting a debt man-agement offi ce that will be responsible for the kingdom’s fi rst international bond sale.

HSBC and JPMorgan, along with

Citigroup Inc, were picked just days ago to arrange that offering, people with knowledge of the matter said. Officials at the three firms declined to comment on their Saudi opera-tions.

JPMorgan advised the Saudi Public Investment Fund on its $3.5bn invest-ment in Uber Technologies Inc this month. It also has an advisory role on Aramco, people familiar with the matter said in April. The largest US bank set out at the beginning of the year to increase its Saudi staff of 65 by about 10%, said Bader Alamoudi, CEO of its local investment-banking unit, in a January interview.

Deutsche Bank, which has about 80 people in the country, named Jamal al-Kishi, a Saudi national, as CEO for the Middle East and Africa earlier this year.

“We view Saudi as a core growth market with huge potential for global investment banks,” said Tamim Jabr, Deutsche Bank’s head of corporate

and investment-banking coverage in Saudi Arabia. Morgan Stanley presi-dent Colm Kelleher, who travelled to Riyadh in May, told Saudi Arabia’s Al-Eqtisadiah newspaper that his visit was to reaffi rm the bank’s com-mitment to the Saudi market at a time when the country’s future is being shaped. An offi cial at the New York-based fi rm declined to comment.

The big banks are vying not just with each other, but also with smaller fi rms. Verus Partners Ltd, a London-based advisory boutique co-founded by former Citigroup bankers Mark Aplin and Andrew Elliott, helped Sau-di Arabia secure its fi rst loan in 15 years in April, when the government raised $10bn from banks. Michael Klein, another ex-Citigroup investment banker, is advising Aramco on its IPO, people with knowledge of the matter said in April. Klein’s fi rm is providing strategic advice to the government, while JPMorgan is working on prepa-rations for the IPO and may be among

the banks that underwrite the off er-ing, the people said.

To reduce the importance of oil, Deputy Crown Prince Mohammed bin Salman wants to build the country’s sovereign wealth fund into the world’s largest, and increase the proportion of its foreign investments to half, from 5%.

“It’s going to be a fees feast for in-vestment banks,” said John Sfakiana-kis, the Jeddah-based head of eco-nomic research at the Gulf Research Center, a think tank. “No one else in the Middle East, and maybe even emerging markets globally, is embark-ing on such deep reforms.”

The Aramco IPO alone would gen-erate at least $50mn in banking fees, according to an estimate from Free-man.

The kingdom provides a bright spot in an otherwise dismal landscape for investment banks, whose earnings are under pressure from record-low interest rates and escalating capital requirements. UK voters’ surprise decision to withdraw from the EU heralds even harder times for secu-rities fi rms as companies that hire banks to advise on takeovers and raise money face years of uncertainty while Britain negotiates new interna-tional ties.

Bankers typically earn less on deals in Saudi Arabia than on similarly sized transactions elsewhere. On the IPO of National Commercial Bank, bankers, lawyers and accountants split 25mn Saudi riyals ($6.65mn), or about 0.1% of the deal’s size. That compares with an average of 2.7% for banks under-writing IPOs in Europe, the Middle East and Africa in 2014, data compiled by Bloomberg show.

Still, the opportunities are too at-tractive to pass up.

“Banks are seeing a big wallet to go after and they won’t want to miss out,” said Wheeler. “With oil unlikely to re-turn to historical highs, there will be a consistent stream of business coming out of Saudi Arabia for years to come.”

Statistics fog raises risk as cheap oil hits Gulf nationsReutersDubai

A sharp revision of economic data in Sau-di Arabia suggests its economy may be weaker than previously thought, under-

lining the risks which investors in the Gulf face as they try to estimate the damage caused to the region by low oil prices.

In April, the government’s statistics offi ce released data showing gross domestic product grew 3.6% in the fourth quarter of 2015 from a year earlier. That was the same as third-quarter growth, implying the economy was coping well with cheap oil.

But this month, the statistics offi ce posted new data revising the fourth-quarter rise to just 1.8% - a major slowdown, and one which has some an-alysts speculating that Saudi Arabia could come close to recession this year.

Unreliable and irregular economic data is a problem for governments and investors in the six nations of the Gulf Cooperation Council as low oil prices put pressure on banking systems and slash state revenues.

During the region’s economic boom, which lasted for more than a decade until last year, ac-curate data often seemed unnecessary. Huge fl ows of petrodollars eliminated most risks and guaranteed solid growth. That gave governments little incentive to invest in extensive statistics systems.

Oil wealth meant GCC states did not need to levy income or sales taxes, leaving them with less access to data from the private sector that trends in tax receipts would normally provide. Now, however, authorities need accurate numbers to make tricky policy decisions. And they have be-gun borrowing abroad and trying to attract for-eign investment to cover defi cits caused by oil’s drop from $100 a barrel or more two years ago to half that now.

It may be harder to do this if foreign investors don’t feel they have a clear view of the risks.

“Getting timely data in the GCC is certainly

challenging, and disclosure does lag behind many emerging markets,” said Razan Nasser, senior economist at HSBC Bank Middle East. “We’re in mid-2016 and we still don’t have 2015 current, fi scal and national accounts data for some countries in the region.”

A portfolio manager at a New York-based hedge fund, declining to be named under his organisation’s briefi ng rules, said the GCC was generally less transparent than other emerging economies which he monitored, and this distort-ed market prices.

“The lack of clear, reliable data creates more downside risk to my investment so I need to be compensated through an appropriate risk pre-mium,” he said. “The less transparent the data, the higher the required risk premium, and I think you defi nitely see this in the GCC.”

Almost all nations, including developed ones, revise their economic data after the initial re-lease.

But the Saudi fourth-quarter change was huge; an OECD study last year found revisions to year-on-year GDP growth rates by 18 member countries rarely exceeded 0.3 percentage point within the following fi ve months.

The Saudi statistics offi ce did not explain the

revision, and did not respond to a request for comment on it.

The portfolio manager said he believed revi-sions in the GCC were due to poor data collec-tion, not deliberate manipulation.

There are some strong spots in GCC data; Qatar releases timely and extensive fi gures, and the Saudi central bank is respected for its money supply numbers.

Nevertheless, investors face long delays and patchy coverage in most countries.

The central bank of Bahrain, the GCC country hardest hit by low oil prices, has not published monthly monetary statistics - including for its foreign reserves - since June 2015.

Oman, which has a big fi scal defi cit caused by the cheap oil, never published December 2015 fi gures for public fi nances.

After an unexplained three-month gap, it re-sumed publishing the data this month.

Neither Bahrain’s central bank nor Oman’s statistics offi ce responded to a request for a com-ment.

In the absence of good offi cial data, Gulf inves-tors look at proxy signals of economic activity, from car registration fi gures to monthly passen-ger traffi c through Dubai airport.

Petroleum Development Oman raises $4bn of project fi nancing

Petroleum Development Oman (PDO), the country’s top oil and gas exploration and production company, has obtained a $4bn loan from international banks, part of a rush of foreign borrowing by Oman as low oil prices strain state finances, Reuters reported.The five-year pre-export facility is the company’s first international loan and was priced at 160 basis points over the London interbank off ered rate (Libor), state-owned PDO said yesterday.

“This competitive new source of funding will enable us to reduce reliance on government funding, so that it can redeploy resources to other areas of the economy,” said Raoul Restucci, PDO’s managing director. The loan will help to finance new oil and gas facilities in Oman, PDO said, adding that it planned to invest more than $20bn in the next five years.Its projects include the Rabab Harweel facility, which is to develop 240mn barrels of oil and 100mn barrels of condensate while exporting

1tn cubic feet of non-associated gas when production starts in 2019.In previous years state companies in Oman and other Gulf oil exporting countries largely financed such projects from state revenue.But state finances have been squeezed by low oil and gas prices, forcing companies and the governments that own them to seek alternative financing while reduced petrodollar flows are tightening domestic banking liquidity and forcing borrowers to look further afield.

Survey cites hurdles in shaping boardroom skills, future diversityThree-

quarters

of internal

audit direc-

tors say the

alignment

of board tal-

ent with the

company’s

long-term

strategy is a

critical chal-

lenge for their board, and three in five cite

a need for greater diversity of backgrounds

and viewpoints on the board, according to

a global survey by KPMG’s Audit Commit-

tee Institute.

Survey respondents also cite significant

barriers to refining the board’s makeup,

from finding directors with the right mix of

skills and overcoming “status quo” thinking

to lack of formal succession plans.

“Having the right talent in the boardroom is

critical to a company’s long-term success,”

said Issa Habash (pictured), risk consulting

partner at KPMG in Qatar. “But achieving

the right diversity of boardroom skills,

backgrounds, and experiences to position

the company for the future requires an

active approach; from robust evaluations

to formal succession planning. In Qatar,

we are seeing very similar themes to the

global trends identified in the report and it

is important for businesses to take action

to ensure their boards bring maximum

benefits to the company now and in the

future.”

To better understand how directors are

thinking about the mix of skills, back-

grounds, experiences, and perspectives in

the boardroom - and tools and approaches

to achieve the right mix - KPMG surveyed

more than 2,300 directors and senior

executives across 46 countries.

Directors see significant room to refresh or

refine the board’s makeup: Only 36% said

they are “satisfied,” and 49% “somewhat

satisfied” that their board has the right

combination of skills, background, and

experiences to probe management’s strate-

gic assumptions.

BUSINESS3Gulf Times

Thursday, June 30, 2016

Abu Dhabi plans merger of sovereign wealth funds Mubadala and IPIC

Merger would create entity with assets of about $135bn; emirate is also pursuing merger of largest banks, NBAD and FGB

BloombergAbu Dhabi/Dubai

Abu Dhabi is planning to merge two of its largest sovereign in-vestment funds as the emirate

pursues a strategy of consolidation af-ter the slump in oil prices.

The combination of International Petroleum Investment Co and Mu-badala Development Company would pool assets of about $135bn and debt of about $42bn, according to Bloomb-erg calculations. UAE Deputy Prime Minister Sheikh Mansour bin Zayed al-Nahyan and Oil Minister Suhail al-Mazroui will be part of the committee charged with overseeing the deal, ac-cording to a statement on state-run WAM news agency yesterday.

Abu Dhabi is reining in spending

as the decline in oil prices slows eco-nomic growth and plans to cut costs by combining two investment funds with common assets in areas such as energy, fi nancial services, and healthcare. It’s the second major deal to be announced this month from the emirate after Na-tional Bank of Abu Dhabi and First Gulf Bank – its two biggest lenders – said they were in talks on a potential com-bination.

The deal “fi ts into a wider rationali-sation of state owned entities, stream-lining of strategy and cost saving initiatives,” said Philippe Dauba-Pan-tanacce, a senior economist and global political analyst at Standard Chartered in London. “The emirate is revising its previous strategy of having various separate entities representing diff erent investment purposes.”

Mubadala has an eclectic range of as-sets at home and abroad. It’s the largest single investor in US semiconductor company. Advanced Micro Devices, with an 18% stake and owns 30% of Aldar Properties, Abu Dhabi’s biggest

developer. It also has a 7.1% holding in First Gulf Bank. IPIC’s investments are focused on energy and petrochemical

companies including Spain’s Cepsa and Vienna- based Borealis.

Abu Dhabi, which sits on 6% of glo-

bal oil reserves, is planning spending cuts equal to 17% of economic output this year, according to a government bond prospectus. Economic growth will slow to 1.5% this year, from 4.3% in 2015, according to the International Monetary Fund.

The emirate may be merging the two funds after a previous plan to sell as-sets stalled. Mubadala was considering a sale of Swiss aircraft-maintenance business SR Technics and an initial public off ering of Yahsat Satellite, people familiar with the matter said in February. It was also seeking to sell a stake in US chipmaker Globalfoun-dries, one of the people said.

Mubadala and Singapore’s Temasek Holdings’ sale of Dunia Finance stalled last year, people familiar have said, while IPIC held talks with banks on options including strategic partner-ships, share sales and asset disposals, separate people said in October.

Energy represents potentially one of the biggest areas of overlap. IPIC and Mubadala worked jointly on a plan to

build the UAE’s fi rst land-based lique-fi ed natural gas plant. IPIC owns a 21% stake in Japanese refi ner Cosmo Oil Co and has a stake in 100,000 bpd of re-fi ning capacity together with the Pa-kistani government through Pak-Arab Refi nery Ltd. Mubadala’s oil produc-tion is concentrated in Thailand and its Masdar renewable energy unit has so-lar and wind projects from Abu Dhabi to the UK.

“It makes sense to consolidate the vast range of government related enti-ties and sovereign wealth funds, many of which have overlapping objec-tives,” Raza Agha, VTB Capital’s chief economist for the Middle East and Af-rica said. “This also opens the door for more welcome consolidation within the many entities owned by the gov-ernment.”

At times, both funds have also stepped in to help struggling compa-nies in Abu Dhabi, such as Mubadala’s acquisition of a stake in Aldar and IPIC unit Aabar’s stake in construction-fi rm Arabtec Holding.

Iraq oil exports set to decline in June for second monthReutersLondon

Iraq’s oil exports are set to de-cline in June for a second month, according to loading

data and an industry source, add-ing to signs that supply growth from OPEC’s second-largest pro-ducer is slowing this year.

Iraq in 2015 provided the biggest rise in supply from the Organisa-tion of the Petroleum Exporting Countries.

But companies working in Iraq have warned the government that projects to boost output will be de-layed if Baghdad cuts spending in response to low oil prices.

Iraq’s southern exports in the fi rst 29 days of June have averaged 3.14mn bpd, according to loading data tracked by Reuters and an in-dustry source. That would be down 60,000 bpd from May.

“At some point, we are going to see the growth curve fl atten out, but it is too early to say if this is happening now,” said Samuel Cis-zuk, principal oil market adviser at the Swedish Energy Agency. “There might be several issues af-fecting Iraqi exports – technical constraints, slower production growth and possibly some compe-tition in the market from Iran.”

The head of Iraq’s state-owned

South Oil Company, speaking to Reuters on Sunday, gave similar exports fi gures and said the decline was due to maintenance work and higher domestic demand.

Iraqi offi cials could not immedi-ately be reached for further com-ment on Wednesday.

The south pumps most of Iraq’s oil. Iraq also exports smaller amounts of crude from the north by pipeline to Turkey.

Northern shipments of crude from fi elds in the semi-autono-mous Kurdistan region have fallen to 480,000 bpd so far in June, according to loading data, from 510,000 bpd in May.

The shipments were running at 600,000 bpd at the start of the year but have slowed due to pipe-line sabotage and a decision by the central government in Baghdad to suspend pumping Kirkuk crude into the line.

Iraq last year boosted production by more than 500,000 bpd, sur-prising industry observers, despite spending cuts by companies work-ing at the southern fi elds and con-fl ict with Islamic State militants.

Oil research fi rm JBC Energy still expects a sizeable expansion this year, seeing 2016 shipments at 3.90mn bpd on an annual average basis, up from 3.60mn bpd in 2015.

A Mubadala employee walks past the company’s logo at its exhibition booth during the Singapore Airshow (file). The combination of International Petroleum Investment Co and Mubadala Development Company would pool assets of about $135bn and debt of about $42bn, according to Bloomberg calculations.

An Iranian man works at an oil facility in the Khark Island (file). Iran plans to issue tenders to develop its oil fields this summer as the government is expected to approve a new model oil contract designed to attract investors “in a short amount of time,” Oil Minister Bijan Namdar Zanganeh said, according to an interview published by the Iranian Students News Agency, Bloomberg reported. Iran will initially seek development of fields along its border, including the South Azadegan deposit near Iraq, ISNA reported, citing the interview. Tenders will also be issued for exploration, it said. “One of the most important challenges is to benefit from several joint fields,” Zanganeh said in the interview.

Iran plans tenders for oil fields as contract nears

Saudi regulator forms interim panel to oversee builder Mojil

ReutersDubai

Saudi Arabia’s securities regulator said it would form a committee to oversee Mohammad Al Mojil Group (MMG) after the Saudi Arabian construction firm’s board resigned when three people involved with the business were found guilty of fraud.MMG’s board quit last week when the CMA sentenced three people, including founder Mohammad al-Mojil and his son Adel al-Mojil, the company’s chairman, to between three and five years in prison.The three were found guilty of manipulation and fraud relating to the MMG’s initial public share off er in 2008, a decision which the company said was based on “fundamentally flawed” evidence.The CMA also ordered payment of 1.6bn riyals ($427mn) in damages.Yesterday, the CMA said it would appoint an interim committee to supervise MMG until a general assembly of shareholders was formed within three months to elect a new board of directors.The three-member committee will be chaired by Abdulrahman bin Abdulmohsen al-nafea, a lawyer who has served as an advisor to the CMA.

An Iraqi labourer works at an oil refinery in the southern town Nasiriyah. Iraq in 2015 provided the biggest rise in supply from the Organisation of the Petroleum Exporting Countries.

BUSINESS


Airport blasts slam Turkey’s struggling tourism industryAFPIstanbul

Turkey’s already limping tour-ism industry is suff ering a fresh grievous blow after the latest in

a series of attacks targeted at tourists claimed dozens of lives, analysts said yesterday.

“This is very bad news for tour-ism and more generally for air travel. It’s an attack that directly targeted travellers.” said Jean-Pierre Mas, head of French travel agencies asso-ciation Entreprises du Voyage. The suicide bombings at Istanbul’s Atat-urk airport, which also left hundreds wounded, come just days after Kurd-ish separatists issued a warning to travellers against visiting the coun-try. “Foreigners are not our target but Turkey is not a safe country for them,” said the Kurdistan Freedom Falcons (TAK) group as they claimed respon-sibility for a June 7 car bombing that killed 11 people in Istanbul’s Beyazit district.

Now bombers believed to be linked to the Islamic State group have struck at the home of fl ag carrier Turkish Airlines and “the hub of the tour-ism industry,” said Soner Cagaptay, director of the Turkey research pro-gramme at the Washington Institute. It’s Istanbul’s “second most emblem-atic location after Taksim square,” the analyst went on.

Turkish Airlines, which in May posted a massive loss of $421mn for the fi rst quarter of 2016, is “the only Turkish company known abroad”, Cagaptay pointed out.

The conservative government of President Recep Tayyip Erdogan had hoped to make the 49% state-owned carrier a global player. On the back of 13.6% growth in passenger numbers in 2015, Turkish had targeted a 2.1% global market share in 2016, which would place it in the top 10 airlines worldwide.

Adverts for the airline have been prominent at June’s Euro 2016 foot-ball tournament in France as it seeks to woo passengers back aboard its fleet, one of the most modern in the world, in the wake of multiple bombings that have driven away business.

2016 has seen a slew of mass kill-

ings in Turkey, several blamed on ei-ther TAK or the Islamic State.

Over the year to June, almost 200 people have been killed and thou-sands wounded in bombings in Istan-bul and Ankara.

A bombing against Istanbul’s his-toric Sultanahmet square in January claimed the lives of 11 German tour-ists, while three Israelis and one Ira-nian died in a blast on the bustling Istiklal shopping street in March.

Both attacks were blamed on the Islamic State.

Meanwhile, February and March car bombings in Ankara claimed by

TAK killed at least 63 people between them.

For a destination which has sold itself to prospective visitors from abroad using its storied monuments, especially sites like the Blue Mosque and Hagia Sophia church at Sultan-ahmet, the explosions have been eco-nomically devastating.

Figures released at the end of May by the Turkish tourism ministry showed that the month had seen the worst drop-off in visits in 22 years, down 35% on 2015’s fi gure. April’s fi gure had already been 30% down on the previous year.

That’s stark news for an industry, which ordinarily brings in close to €30bn ($33.2bn) in foreign currency each year.

Visitor fi gures from countries that usually send crowds of sun-seeking tourists, such as Germany and Brit-ain, have been particularly weak.

And almost 90% of the usual tally of Russian visitors have stayed away as Ankara and Moscow entered a war of words after Turkish forces downed a Russian warplane.

Russian President Vladimir Putin said yesterday he would lift travel re-strictions put in place after the incident

as relations thawed between Ankara and Moscow. But that’s unlikely to do much to plug the gap created by Tur-key’s 23% plunge in tourist numbers over the fi rst fi ve months of the year.

In the face of the bombings, the government off ered a few millions of euros in subsidies to the stricken tourism sector in spring.

June sees Turks preparing to em-bark on their long bayram holiday, when they often choose to travel. And the summer sun and inviting tur-quoise seas ought to be drawing west-erners in huge numbers as the season gets underway.

Putin lifts ban on Russian tourism to Turkey after Erdogan talks

Short sellers target Turkish Airlines as tourism trade wilts

BloombergMoscow

President Vladimir Putin said Russia is

lifting a ban on tourism to Turkey after his

first talks with Turkish counterpart Recep

Tayyip Erdogan since the downing of a

Russian warplane plunged relations into

crisis.

It’s time “to begin the process of normalis-

ing trade relations” with Turkey by lifting

sanctions, starting with tourism despite

the threat of terrorism, Putin told a

government meeting yesterday. Erdogan

“assured me that the Turkish government

will do all they can to ensure the safety of

our citizens” in Turkey, he said.

Putin and Erdogan held “constructive”

phone talks earlier yesterday that focused

“on restoration of the traditionally

friendly” ties between Russia and Turkey,

the Kremlin said in a statement. They

agreed to meet each other at the earliest

opportunity, it said. Putin also off ered

“deep condolences” for the victims of the

Istanbul airport terrorist attack in which

suspected Islamic State suicide bombers

killed 41 people and wounded more than

200 on Tuesday, it said.

The rapid warming of relations came after

Erdogan sent Putin a letter Tuesday off er-

ing “sympathy and profound condolences

to the family of the Russian pilot who

was killed” when Turkish fighter jets shot

down his warplane near the Syrian border

in November. The Kremlin initially said

Erdogan had apologised for the incident,

though a text of the letter that appeared

later on its website quoted him as saying

“Excuse us.”

A statement from the Turkish presidential

off ice didn’t refer to Erdogan’s remarks as

an apology.

Putin accused Turkey of a “stab in the

back” for downing the jet while it was

engaged in a mission against Islamic State

and other militants in northern Syria.

Turkey, a member of the North Atlantic

Treaty Organisation, said the aircraft

crossed into its territory and ignored

warnings, while Russia insisted the plane

never left Syrian airspace.

Putin warned of “serious consequences”

and imposed sanctions that included a

ban on charter flights that hurt Turkey’s

tourism industry. Imports of some Turkish

fruits and vegetables were also barred.

The tensions with Russia contributed to

Turkey’s record drop in foreign-tourist ar-

rivals in April. There was a 79% decline in

Russian visitors as the number of overall

arrivals fell by 28% to 1.75mn compared

to a year earlier. It was Turkey’s ninth

consecutive monthly fall in arrivals, the

longest streak of year-on-year declines in

statistics that span a decade, according to

data compiled by Bloomberg.

Tourism accounts for 6.2% of Turkey’s

economic output, according to the As-

sociation of Turkish Travel Agencies, and

8% of employment.

BloombergLondon/Istanbul

Short sellers are targeting Turkish Airlines

as it presses on with expanding capac-

ity while the country’s tourism industry

withers.

As much as 13.8% of the company’s shares

that are available for trading are out on

loan to short sellers betting they will fall

in value, according to Markit Ltd. That’s

the highest on record for Turkish Airlines,

making it the most-shorted developing-

nation carrier after Panama’s Copa Hold-

ings, Bloomberg calculations based on the

data show.

Tourist arrivals to Turkey fell almost 35%

in May from a year earlier, the fastest drop

in at least a decade and followed a 28%

decline in April. A diplomatic row with

Russia after one of its warplanes was shot

down for straying into Turkish airspace

deterred some of its most enthusiastic

holidaymakers, causing much of the

slowdown. Terrorist attacks in Turkish cit-

ies have also kept travellers away and the

airline in May reported its worst quarterly

loss in more than 16 years.

“You can feel the negative sentiment

when you look at the news,” Amine Wafy,

an analyst at Renaissance Capital in Dubai

said by phone. “Current tourism, traff ic

and passengers stats in Turkey do not

support a bullish view on the name,” he

said. The buy rating on the stock is cur-

rently under review at Renaissance.

Short traders seek to profit by borrowing

and selling shares they expect to fall in

value only to buy them back at a lower

price and return them to the original

owners. Bets against Turkish Airlines stock

peaked at the end of May and have stayed

around this level, the highest in at least a

decade, the Markit data shows.

Turkish Airlines declined to comment on

the short selling data when contacted by

Bloomberg on Friday.

While Turkish Airlines’ passenger numbers

rose 7.8% this year to the end of May, seat

occupancy declined by 3.6 percentage

points as its fleet and number of destina-

tions expanded, according to company

data. Turkish Airlines was targeting 18%

passenger growth in 2016 as recently as

January and still plans to increase capac-

ity by 20% in the second half of the year.

Turkish Airlines chief executive off icer

Temel Kotil said in an interview with

Bloomberg that growth in transit pas-

sengers will help off set declining tourist

demand. The company still expects to

post record revenue of $12.2bn this year,

he said.

“The number of passengers is solid,” Kotil

said last Thursday. “Our global market

share depends on transit.” He also said

the plunge in tourist arrivals from Russia

has had a minimal impact on the business

because that market relies on charter

aircraft.

Turkish Airlines is also unlikely to suff er in

the market convulsions triggered by the

UK’s vote to leave the European Union be-

cause of minimal exposure to the country,

Goldman Sachs said in a note published

on Monday.

Some investors are not convinced. Shares

of Turkish Airlines, as Turk Hava Yollari

AO is known, have declined 18% this year

even as the country’s stock market has

added 6.6%. Analysts at Garanti Securities,

an Istanbul-based brokerage, have cut

earnings estimates for Turkish aviation

companies including Turkish Airlines,

citing concerns over demand, currency

swings and the risk of “irrational price

wars” from extended capacity.

The stock is very liquid, which “makes it

easy to short,” said Burak Isyar, an analyst

at Istanbul-based Burgan Yatirim Menkul

Degerler, who expects operational weak-

ness to also be reflected in the company’s

second-quarter earnings.

Still, Isyar and RenCap’s Wafy are both

bullish on the company’s prospects in the

longer term, with Wafy citing Istanbul’s

new airport coming online at the end of

2018 and Turkish Airlines’ transit traff ic as

positive for the company’s prospects.

For now the outlook seems less rosy, said

Michel Danechi, who helps oversee $1.5bn

in emerging-market assets as Duet Asset

Management in London.

“The company’s plans are unrealistic

given geopolitical risks,” he said. Danechi

declined to disclose his positions in Turk-

ish stocks, citing compliance concerns,

and said Kotil’s upbeat comments did

not change his view. “They planned for

massive growth, which simply has not

happened.”

Aviation stocks dropBloombergIstanbul

Turkey’s aviation stocks fell after co-ordinated terror attacks at one of Eu-rope’s busiest airports threatened to

deal another blow to the nation’s struggling tourism industry.

Turkish Airlines and airport operator TAV Havalimanlari Holding AS were the biggest decliners by index points on the Borsa Istanbul 100 Index after three sui-cide bombers killed at least 41 people and wounded more than 200 at Ataturk Air-port, Turkey’s main international hub. Prime Minister Binali Yildirim said early investigations indicated Islamic State was likely to be responsible. The main gauge added 0.5% as the lira tracked gains across emerging currencies, rising 0.3% to 2.8963 per dollar.

The attacks are the latest in a series of blows to the nation’s tourism industry, which last month saw the biggest slump in visitor numbers on record. Security in Tur-key has deteriorated amid the spillover from Syria’s civil war and an escalating confl ict with separatist Kurdish militants.

“Imagine one of your factories which makes up about half of your total output is blown up - that’s how serious yester-day’s (Tuesday) attack is for Turkish avia-tion companies,” Burak Isyar, an analyst at Burgan Yatirim Menkul Degerler in Istan-bul, said by phone. “Given the severity of this situation, aviation stocks are likely to plunge further in the coming days. This is a worse scenario than the worst scenario peo-ple imagined.”

Turkey’s aviation industry relies heavily on Istanbul, where a new airport is sched-uled to open in 2018 to replace the one at-tacked yesterday. Turkish Airlines, which relies on transit passengers to generate about 60% of revenue, has long-term plans to turn the city into a global hub. The carrier retreated 1.2% as of 2.34pm in Istanbul.

Ataturk airport made up about 60% of TAV Holding’s total passengers in the fi rst quarter, according to an investor presenta-tion on the company’s website, and gener-ates more than 50% of its revenue. TAV sank 5% as traders exchanged 6.4mn shares, the biggest volume since March 2014.

The Borsa 100 reversed earlier losses of as much as 0.8% after Russia said it plans to ease restrictions on travel to Turkey. The announcement follows talks between Rus-sian President Vladimir Putin and Turkish President Recep Tayyip Erdogan. A 92% slump in Russian holidaymakers was the biggest contributor to a record 35% decline in the number of tourists visiting Turkey in May.

Turkish carrier Pegasus Hava Tasimacili-gi pared a drop of as much as 2.2% to trade 0.1% lower.

A Turkish riot police off icer patrols Ataturk airport’s main entrance in Istanbul on Tuesday night. Turkey’s already limping tourism industry is suff ering a fresh grievous blow after the latest in a series of attacks targeted at tourists claimed dozens of lives, analysts said yesterday.

BUSINESS5Gulf Times


ReutersTokyo

Japanese Prime Minister Shinzo Abe pledged yesterday to use all avail-able policy tools to keep the wheels

of the economy turning as fi nancial markets were gripped by uncertainty in the wake of Britain’s shock vote to exit the European Union.

The yen’s spike following the ref-erendum has kept Japanese policy-makers on edge as a stronger currency threatens to put more pressure on the export-reliant economy, already reel-ing from weak demand at home and abroad.

Retail sales fell more than expected in May, data showed earlier in the day, keeping policymakers under pressure to roll out more stimulus.

“Consumer spending has been stag-nant and the trend is likely to continue for a while due to sluggish growth in wages,” said Hidenobu Tokuda, senior economist at Mizuho Research Insti-tute.

In a meeting to discuss post-Brex-it market developments, Abe urged Bank of Japan (BoJ) governor Haruhiko Kuroda to ensure the central bank pro-vides ample funds to the market to prevent any credit squeeze.

“A sense of uncertainty and worry about risks remain in the markets,” Abe told the meeting, the second between the government and the BoJ since the June 23 referendum.

The premier also called on Finance Minister Taro Aso to keep a close watch on currency moves and respond fl ex-ibly to market developments in coor-dination with Group of Seven econo-mies. Abe is expected to hold similar meetings regularly as Tokyo looks to put safeguards in place against poten-tial instability in fi nancial markets af-ter Britain’s messy EU divorce.

The rush of money to safe havens such as the yen has been stoked by fear Brexit would adversely aff ect Britain’s economy and undermine already frag-

ile growth in the EU, causing more dis-ruption in global investment and trade.

Japan stepped up threats to inter-vene to weaken the yen after the Brexit

vote drove the currency to multi-year highs, but the risks of a costly fail-ure may dissuade policymakers from matching their words with action.

Still, Masahiko Shibayama, an ad-viser to the premier, said unilateral yen-selling intervention cannot be ruled out to counter excess specula-

tion, adding that the central bank should stand ready to expand its al-ready massive monetary stimulus.

“We won’t hesitate to take action against excess speculation,” he told Reuters in an interview.

The dollar fi rmed to 102.63 yen yes-terday, moving away from a 2-1/2-year low of 99.00 touched on Friday.

Former top BoJ economist Hideo Hayakawa told reporters the cen-tral bank could be forced into further easing at the July 28-29 policy meet-ing given prices are undershooting its forecasts.

However, he shrugged off specula-tion about the BoJ holding an extra policy meeting before that.

The BoJ is wary of rushing into ex-panding its monetary stimulus, pre-ferring to wait and see if the market turmoil lasts long enough to threaten Japan’s economic recovery, sources say. Hence, analysts see Abe’s meet-ings as more a symbolic move to show the public the government is doing what it can to contain damage ahead of a July 10 upper house election in Japan.

“There’s not a lot of policy tools left for authorities to reboot the economy.

Therefore, Abe has no choice but hold meetings one after another at least until the July election,” said Yas-uji Yajima, chief economist at NLI Re-search Institute.

“If the yen spikes beyond 100 to the dollar, authorities would intervene in the currency market but I doubt whether it could have a lasting im-pact,” he said.

Japan’s economy expanded at the fastest pace in a year in the fi rst quarter but analysts say growth will not pick up much for the rest of this year as slow wage gains weigh on consumption.

External headwinds, such as weak emerging market demand and the yen’s gains, also cloud the outlook for ex-ports. Worried about the additional hit from Brexit, the government is willing to spend at least ¥10tn ($97.7bn) on a stimulus package, sources have told Reuters.

Abe vows broad policy help to weather Brexit shock

India seen importing most sugar in 7 yearsBloombergNew Delhi

India may import the most sugar in seven years as drought in the world’s top

consumer curbs output for a second year and spurs a rally in domestic prices. Futures in New York rose.

Imports may total 2.1mn met-ric tonnes in the year starting October 1, the most since 2009-10, according to the median esti-mate of six traders, analysts and producers surveyed by Bloomb-erg. Production is set to decline 8.4% to 23mn tonnes in 2016-17 from a year earlier, the survey showed. That’s the lowest since 2009-10 and compares with the government’s estimate of as much as 24mn tonnes.

India this month imposed a 20% duty on sugar exports to keep domestic prices in check, less than a year after the govern-ment ordered compulsory ship-ments by sugar mills to reduce a surplus. The country is switch-ing to importer from exporter just as forecasts for global defi -cits boost prices in New York to the highest since 2012. Drought conditions have also hurt sup-plies in Thailand and rains dis-rupted crushing in the top pro-ducer Brazil.

“For a country consuming more than 25mn tonnes of sugar per annum, imports of 0.5mn tonnes to 2mn tonnes is a rela-tively small safety margin while the local industry rebuilds the cane crop after two years of quite severe drought,” said Tom Mc-Neill, a director at researcher Green Pool Commodity Spe-cialists. While India may need imports, it could also possibly scrape by using stockpiles, he said.

India will have more than 31mn tonnes of sugar available in the year starting October 1, including 7mn tonnes to 7.5mn tonnes of stockpiles at the start of the period, according to the Food Ministry. Demand is esti-mated at 26mn tonnes, it said. The stockpiles may mean the country can avoid imports in 2016-17, according to the Indi-an Sugar Mills Association and National Federation of Coop-erative Sugar Factories.

Still, the government has taken steps to ensure adequate sugar supply and cool domes-tic prices that surged more than 60% in the past year. The Food Ministry in May withdrew a production subsidy paid to cane farmers and has also imposed limits on the amount of sugar traders can stockpile to prevent hoarding. Food Minister Ram Vilas Paswan last month said the import duty may be lowered if prices climb further.

“If the government reduces the import duty then obvi-ously it would mean they are opening the door for imports,” Michael McDougall, a senior director at Societe Generale SA in New York, said in a telephone interview. “They are trying to keep prices in check. Nobody knows what mother nature is going to do. Monsoon has been somewhat frustrating with its progress.”

India is counting on above-average monsoon rainfall to boost crops after two years of below-average precipitation curbed production. This year’s monsoon arrived a week later than the usual June 1 onset and is 13% below normal as of June 28. Current planting estimates indicate there will be a decline in cane availability in Mahar-ashtra and northern Karnataka, with states including Uttar Pradesh, Tamil Nadu and pos-sibly Bihar picking up the slack, according to the sugar mills as-sociation.

Abe: To use all available policy tools to keep the wheels of the economy turning.

Toyota recalls 3.37mn cars over airbagReutersTokyo

Toyota Motor Corp has recalled 3.37mn cars worldwide over pos-sible defects involving airbags

and emissions control units.The automaker yesterday said it was

recalling 2.87mn cars over a possible fault in emissions control units.

That followed an announcement late on Tuesday that 1.43mn cars needed re-pairs over a separate issue involving air bag infl ators.

Some of the automaker’s gasoline-electric hybrid Prius models contain both of the potential defects, taking the total number of vehicles aff ected by the recalls to 3.37mn.

No injuries have been linked to either issue. Toyota yesterday said evaporative fuel emissions control units in models produced from 2006 to 2015 including the Prius, Auris compact hatchback and its popular Corolla models were prone to cracks, which could expand over time and lead to fuel leaks.

Late on Tuesday it recalled Prius models and Lexus CT200h cars made from 2010 to 2012 over air bag infl ators that could have a small crack in a weld, which could lead to the separation of the infl ator chambers.

The infl ator could partially infl ate and enter the vehicle interior, increas-ing the risk of injury, Toyota said.

Sweden-based auto safety gear mak-er Autoliv Inc confi rmed yesterday that it supplied the airbag infl ators involved in the recall.

The company said it was aware of seven incidents where a side curtain airbag has partially infl ated in parked Toyota Prius cars, but no injuries were reported.

Autoliv has benefi ted from an early

recall involving faulty airbag infl ators made by Japan’s Takata.

The company said in a regulatory fi ling in April that it was investigating six incidents related to its airbags and

a possible recall could cost it between $10mn-$40mn, net of expected insur-ance recoveries.

Autoliv said yesterday it expected the cost of recall to be at the lower end

of the range. The company’s US-listed shares were down 4.7% at $105.00 in premarket trading.

The stock fell as much as 16 pct to 765 Swedish kronas on the Stockholm Stock

Exchange, their lowest since December 2014.

Toyota Motor’s US listed shares were down 1.2% at $98.69 in premarket trading.

A car on display at a Toyota dealership in the Hague. The Japanese firm yesterday said evaporative fuel emissions control units in models produced from 2006 to 2015 including the Prius, Auris compact hatchback and its popular Corolla models were prone to cracks, which could expand over time and lead to fuel leaks.

Suzuki Motor appoints scion as CEO to rebuild after testing scandalReutersTokyo

Suzuki Motor Corp yesterday tapped the

son of the company patriarch to become

chief executive, keeping management of

Japan’s fourth-largest automaker with the

founding family as it tries to recover from a

testing scandal.

The widely expected announcement

followed an annual shareholders meeting

earlier in the day, when the company said

it anticipated “major” impact from volatility

in currency markets after Britain voted to

leave the European Union.

Toshihiro Suzuki, 57, assumes his role

after his father, long-serving chairman

Osamu, last month said he would step

down as CEO to take responsibility for the

firm’s use of incorrect testing methods to

calculate vehicle mileage.

Osamu, 86, will remain chairman.

Having led the company since 1978, the

patriarch will extend his run as one of the

longest-serving global auto executives,

raising questions about how much longer

he can run the company.

Analysts said that while succession had

been a long time coming, having father and

son in the top two positions means Osamu

would reign as he has for nearly 40 years.

“So long as Osamu-san remains chair-

man, nothing much is going to change,”

Marusan Securities analyst Hiroaki Mochida

said. But Mochida said in the near term,

Osamu was the best hope in fighting off

competition in emerging markets including

India, where Suzuki commands a market

share of around 40%.

Yesterday’s announcement marks the

second executive position passed on by

Osamu to his eldest son, who becomes CEO

nearly a year after being appointed presi-

dent as part of the succession plan.

Quiet and soft-spoken in comparison

to his outspoken father, Toshihiro joined

Suzuki in 1994 after a stint at parts supplier

Denso Corp, and led the company’s product

planning and global marketing divisions.

Earlier yesterday, Osamu brushed off a

call from a shareholder to relinquish control

to take responsibility for lax procedures

which led to the use of wrong testing meth-

ods, sullying Suzuki’s brand image.

“Stepping down (completely) to take

responsibility is irresponsible,” Osamu told

applauding investors.”It’s important to stay

at the company to prevent a repeat of the

worst scandal facing the company (since

I’ve led it).” At the meeting, the company

said volatility in the Indian rupee and euro

would have a negative impact on earn-

ings, adding it would mitigate the impact

through cost-cutting and increased local

procurement at overseas plants.

BUSINESS


Wanda deal faces hurdles as APG balks over priceBloombergHong Kong

Billionaire Wang Jianlin is facing hurdles in his buyout bid for Dalian Wanda Commer-cial Properties, which could be the big-

gest privatisation Hong Kong’s ever seen, after a $460bn Dutch fund said the offer is too low.

“We have concerns about the privatisation plan” because the offer isn’t attractive, Yoo-Kyung Park, a director in charge of corporate governance at APG Groep’s asset-management arm, said in an interview in Hong Kong. APG hasn’t made a decision on which way it will vote on the $4.4bn transaction, she said.

Still, APG would make a profit from the deal if it sold out because it bought into the stock during its 2014 initial public offering. By con-trast, BlackRock built up most of its holdings in Wanda Commercial in the second quarter of last year, when the stock peaked at HK$78, and stands to lose about HK$235mn ($30mn) if Wang’s HK$52.80-a-share offer goes through, according to data compiled by Bloomberg.

In its filing last month, Wanda Commercial said it won’t raise the offer price. Shares tum-bled 6.1%, the most in 10 months, and closed at HK$46.10 yesterday.

APG and BlackRock, which together own a combined stake of almost 12%, are key to the outcome of the proposal because the deal would collapse if even 10% of shareholders reject the offer. That would be a blow for Wang, who’s seeking to relocate Wanda Commercial’s listing to mainland China, where Asia’s second-rich-est man could fetch higher valuations and step closer to his goal of running a business empire with a market value of $200bn.

BlackRock, the third-largest investor in Wan-da Commercial’s Hong Kong shares, declined to comment on its potential losses and how it will vote. The world’s largest asset manager held 44mn Wanda Commercial shares, or a 6.8% stake, as of last month, according to data com-piled by Bloomberg. APG ranks sixth at almost 5%.

Under terms set out by the Beijing-based property developer, Wanda needs fewer than 10% of votes opposing it and at least 75% sup-porting the plan. The vote will occur within 45 days of Wanda Commercial issuing a notice. If the transaction is shot down, Wanda won’t be able to try again for 12 months, according to Hong Kong regulations.

Oscar Choi, an analyst at Citigroup, wrote in a report in May that the deal faces high hurdles

since few individual shareholders holding big chunks of shares could block the offer.

Of Wanda Commercial’s top 15 shareholders, Hang Seng Bank, Principal Financial Group and Mirae Asset MAPS Investment Management Co also stand to lose money with Wang’s of-fer, according to Bloomberg data. Major Wanda investors who stand to gain include China Life Insurance Co and Kuwait Investment Authority. The Kuwaiti fund declined to comment, as did Hang Seng Bank, Mirae and Wanda. China Life

and Principal didn’t immediately respond to re-quests for comment.

As to BlackRock, its average cost was over HK$58 a share, with most of the purchases oc-curring in the second quarter of 2015, when shares of the developer traded at an average of about HK$63 each, based on disclosed transac-tions compiled by Bloomberg.

Wang and his flagship Dalian Wanda Group Co control the property developer through ma-jority holdings in the company’s unlisted shares

in mainland China. The shares in Hong Kong are listed but they only account for 14% of the outstanding stock. Of the listed shares, about half are owned by 11 minority shareholders, who mostly bought in when the company had its IPO.

Wanda’s proposed transaction would be the biggest going- private deal on the Hong Kong stock exchange, beating Alibaba Group Hold-ing’s proposal in 2012 to take its Hong Kong- traded unit private for as much as HK$19.6bn, according to Bloomberg data.

China’s robust crude oil imports mask changing fuel dynamicsBy Clyde RussellLaunceston, Australia

China is a bigger concern for crude oil and products markets than the current worries about the British vote to leave the European Union.While the news media continues its relentless focus on Brexit, there is mounting evidence of a shift in the dynamics of China’s crude and fuel markets, which may have a far greater impact on global energy markets.On the surface crude imports by the world’s No 2 consumer China look healthy enough, rising 16.5% to the equivalent of about 7.49mn barrels per day (bpd) in the first five months of the

year compared to the same period last year.But there are several factors at work that make the strength in imports appear misleading.Firstly, domestic crude production is falling, with official figures showing output dropped by 7.3% in May from a year earlier, taking the decline for the first five months of the yearto 3.7%.China produced 85mn tonnes of oil in the January-May period, equivalent to about 4.08mn bpd, representing a drop of about 170,000 bpd from the same period in 2015.This means that at least 170,000 bpd of the nearly 1mn bpd in additional crude imports in the first five months of this

year has merely been to replace lost domestic output.The second factor at work is that China appears to be continuing to fill strategic storages at a fairly rapid pace.Given that the authorities don’t reveal inventories, the best way to gain an idea of how much crude is going into stockpiles is to subtract refinery throughput from total crude available from both imports and domestic output.In the first five months of the year imports and domestic production were a combined 240.9mn tonnes, while refinery throughput was 221.3mn tonnes.This means that 19.6mn tonnes, or about 941,000 bpd went into either

commercial or strategic storage.This is sharply up from the figures for 2015, which showed a diff erence between crude imports and domestic output and refinery throughput of about 560,000 bpd.The third factor at work is rising exports of refined products, particularly gasoline and middle distillates such as diesel and kerosene.In the first five months of the year, diesel exports have surged 322% to the equivalent of about 271,000 bpd, jet kerosene by 8% to about 245,000 bpd and gasoline by 63.5% to about 187,000 bpd.Take the three factors together and it becomes clear that China’s strong gain in crude oil imports isn’t a reflection of

higher demand, in fact it’s likely that actual growth in consumption of oil products in China is non-existent.This view is further supported by looking at the breakdown of refinery throughput, which shows output of diesel dropped by 2.2% in the first five months of the year.Given the drop in production of diesel and the massive surge in exports, this suggests that much of the Chinese economy is struggling, given the fuel’s main use is in transport of goods and construction.However, Chinese refineries produced 9% more gasoline in the first five months of the year, which does off er support to the view that the nature of the Chinese economy is shifting toward

a more consumer-led economy.Refiners have been maximising gasoline output to meet demand as more cars hit Chinese roads, a sign of increasing spending power by consumers.Overall, it’s still possible that China’s crude imports will remain robust, especially if the unknown factor of flows into strategic storages stays supportive.But it’s becoming increasingly clear that China is playing a far greater role in fuel export markets in Asia, the world’s biggest oil consuming region, in a trend likely to continue.

Clyde Russell is a Reuters columnist. The views expressed here are his own.

Dalian Wanda Group’s Wanda Plaza in Beijing. Billionaire Wang Jianlin is facing hurdles in his buyout bid for Dalian Wanda Commercial Properties, which could be the biggest privatisation Hong Kong’s ever seen, after a $460bn Dutch fund said the off er is too low.

BloombergMumbai

Indian money managers clung to equities during the worst selloff in four months,

speculating the elements that powered this year’s stocks rally are strong enough to withstand global turmoil from the Brexit vote.

Local funds bought a net Rs1.15bn ($17mn) of shares on Friday, data compiled by Bloomberg show, even as the benchmark index slumped 2.2%. The purchases capped the fi rst weekly infl ow in June, and fund managers said they assign great-er weight to an improving econ-omy and prospects of a strong monsoon.

“We will be concerned if the monsoon turns adverse, not by Brexit,” said S Naren, chief in-vestment offi cer at ICICI Pru-dential Asset Management Co, the nation’s second-biggest with $26bn in assets. “We see Brexit as a buying opportunity.”

Domestic funds have bought a net Rs105bn ($1.5bn) of shares this year as company profi ts re-covered after declines in four of the last fi ve quarters and data showed India growing faster than all other major economies. Increased public spending will help maintain the growth mo-mentum and India’s record re-serves will act as buff ers against Brexit-fuelled turmoil, accord-ing to SBI Funds Management.

“Investors should use a period of heightened volatility to their advantage rather than get swayed by it,” Navneet Munot, who over-sees $16bn in assets at SBI Funds, said in a phone interview. “With improved fundamentals, our ability to weather such storms is relatively better.” Munot said he is bullish on consumer-discre-tionary companies. The S&P BSE Sensex has climbed 1.3% since Friday when it slumped as much as 4%. While all 30 stocks fell at when trading began on June 24, gains in companies tied to the economy, such as Bajaj Auto, helped the gauge pare losses. Fi-nancial-services companies Max Financial Services and Bajaj Fin-serv rallied to records.

To be sure, companies with ties to the UK may suff er. Tata Motors, whose Jaguar Land Rover unit gets a quarter of its sales from Europe, rose 1.6% yesterday after slumping 10% in the past three days. Tata Steel, which has factories in the UK and Netherlands, added 0.7% after declining 7.1% over Friday and Monday. A gauge of tech-nology shares recovered after three straight days of losses as Europe accounts for 28.5% of India’s software exports.

Deutsche Bank on Monday reduced Sensex’s year-end tar-get to 27,000 from 29,000, cit-ing increased uncertainty. Glo-bal funds sold $85mn of shares Friday and $42mn so far this week, paring the year’s infl ow to $2.7bn. The purchases are still the third-highest among Asian markets tracked by Bloomberg. Indian mutual funds bought a net 804 million rupees of shares on Monday, data from the mar-ket regulator show.

Indian monsoon rainsoutweigh Brexit: Fund managers

ReutersLondon

A government overhaul of the Brit-ish Steel Pension Scheme – cru-cial to convincing anyone to buy

Tata’s British assets – is in jeopardy after Britons’ vote to leave the European Union deepened the fund’s debts and depleted its assets, analysts and industry sources said.

Pension trustees said they were in talks to assess the impact of last week’s deci-sion, which sources said already raised the risk Tata Steel’s giant Port Talbot plant would be closed, destroying thou-sands of jobs.

Britain’s government has been try-ing to overhaul the British Steel Pension Scheme (BSPS), one of the nation’s larg-est defi ned benefi t plans, with 130,000 members.

Even before last week’s referendum, its £14bn ($18.79bn) of liabilities exceeded its assets by roughly £700mn.

Tata Steel inherited the pension scheme when it bought Corus, formerly British Steel, for $12bn in 2007.

“The trustee and its advisers are work-ing with stakeholders to understand what, if any, impact the outcome of last week’s referendum might have on the discussions regarding the future of the scheme,” the trustees said in a statement.

Hymans Robertson, which advises fi rms that sponsor schemes such as BSPS, esti-mated British pension liabilities had gone up by about 5 % — or several hundred million pounds in the case of the steel pension fund – since close of business on Thursday, because of the falls on stock markets and predicted fall in interest rates triggered by the British referendum.

A spokesman for Tata said he couldn’t comment on the latest funding for the BSPS, but like all pension funds, asset values moved up and down.

The FTSE rose around 2% yesterday, partly recovering from heavy losses.

At least three of the seven bidders are still interested in buying Tata’s British operations, industrial sources said, but they have also said Tata might decide to shut its loss-making Port Talbot plant in Wales and focus resources on its more successful Dutch plant at IJmuiden. On Tuesday, Dutch union leaders said Tata was investing between €200mn ($221.7mn) and €300mn in IJmuiden.

Tata Steel has not disclosed fi nancial details. In an emailed statement, it said the Dutch spending was part of its long-term strategy drawn up several years ago to invest in equipment to supply, especially to car manufacturers, higher-strength steels with improved surface quality. “This signifi cant investment will further improve IJmuiden’s competitive position as a manufacturer of world-

class products for our most demanding customers,” it said.

Tata Steel says it has invested £1.5mn in Britain and a similar amount in the Netherlands since 2007.

But the climate for investment in Brit-ain is now stormy, analysts say, and steel pension liabilities are the least of the gov-ernment’s worries.

“The Port Talbot operation has never

been further from viability. Due to cur-rent uncertainty, private investment in Port Talbot is unlikely,” Ben Orhan, sen-ior economist at IHS Global Insight Pric-ing and Purchasing, said.

UK pension scheme overhaul to hit Tata Steel sale

One of the blast furnaces of the Tata Steel is seen at sunset in Port Talbot, South Wales. The Indian firm says it has invested £1.5mn in Britain and a similar amount in the Netherlands since 2007.

BUSINESS7Gulf Times


BloombergNew Delhi

Just days after Raghuram Rajan announced plans to a return to academia, he’s battling to preserve

the Reserve Bank of India’s independ-ence.

The government this month revived a proposal to dip into the central bank’s emergency funds to recapitalise com-mercial lenders hurt by rising bad loans. The idea was fi rst fl oated in February by the Finance Ministry’s top economic adviser, Arvind Subramanian, a candi-date to succeed Rajan as RBI governor.

The plan involves shrinking the RBI’s balance sheet by as much as Rs4tn ($59bn), according to a document ob-tained by Bloomberg. The cash would then be injected into state-run banks, paring the RBI’s equity-to-asset ratio to 19% from 31.5% – still above the me-dian of 11% at three dozen major central banks.

The proposal would be a major con-trast to how other large economies have handled bank rescues, from the US sav-ings-and- loan debacle in the 1980s to the banking crises in the Nordic region and Japan in the 1990s to the global fi nancial crisis in 2008. In each case, fi scal authorities – not central banks – have injected capital.

Using the RBI as a piggy bank would avoid a deterioration in the budget defi cit. The risk is that the central bank would be seen as a government tool, and – as a part owner of lenders – have mixed objectives as it conducts monetary policy. Rajan has sought to strengthen the RBI’s independence, in part through setting an infl ation target.

“At a minimum, it looks opaque and devious,” said Viral Acharya, a professor of economics at New York University’s Stern School of Business. “Setting a precedent to compromise central bank risk management for public-sector bank recapitalisation could lead to re-peat and more devious interventions that over time could be perceived as an attack on central bank independence.”

The document envisages three pos-sible methods to recapitalise lenders: The RBI directly purchases stakes in the banks; the money is transferred to the government, which uses it to buy shares; the funds are used to cre-ate a “bad bank” to acquire more than Rs4.7tn of soured debt in the system.

The central bank funds have been ac-cumulated for a rainy day such as the problems now affl icting the banking sector, according to a Finance Ministry offi cial who asked not to be identifi ed, citing rules for speaking with the media.

Transferring the RBI’s capital would re-duce both the assets of the central bank and the debt of the government, the of-fi cial said. DS Malik, a Finance Ministry spokesman, declined to comment.

“Most important, any such move would need to be initiated jointly and cooperatively between the govern-ment and the RBI,” Subramanian’s team wrote in the February report. “It will also be critical to ensure that any re-deployment of capital would preserve the RBI’s independence, integrity, and fi nancial soundness - and be seen to do so.”

Critics of the plan, including Ra-

jan, say it would leave the RBI open to confl icts of interest and economic shocks. It also raises questions about the amount of control Prime Minister Narendra Modi seeks over the central bank, which under Rajan embarked on the most ambitious overhaul in its 81-year history.

Rajan’s focus on infl ation and clean-ing up bad debt at Indian lenders has met resistance among elements in Modi’s administration, the bureauc-racy and the banking industry. In two speeches last week, Rajan defended his policies and critiqued the government’s proposal to use RBI equity to help

state-run lenders. “This seems a non-transparent way of proceeding, getting the banking regulator once again into the business of owning banks, with attendant confl icts of interest,” Rajan said. “Better that the RBI pay the gov-ernment the maximum dividend that it can” and let the government directly inject capital, he said.

In 2007, the Indian government agreed to buy the RBI’s 59.7% stake in the nation’s largest lender, State Bank of India, to avoid the appearance of im-propriety.

Under Rajan’s proposal, the RBI’s existing capital base would stay un-

touched, giving it more ammunition to deal with a sudden cash squeeze. Like the US Federal Reserve and other cen-tral banks, the RBI pays income to the government from what it earns on its assets. A portion of its earnings are set aside for staff salaries and an emergen-cy buff er.

In the 12 months through June 2015, the central bank paid the government a record dividend of Rs659bn, more than four times the amount in 2011. Under Rajan, the proportion of the central bank’s net income that has gone to the government has also increased, follow-ing the recommendations of an RBI-appointed committee.

The government proposal would also require the central bank to sell some as-sets from a Rs5.6tn “currency and gold revaluation account,” which refl ects unrealized gains on the RBI’s bullion and foreign-exchange holdings. The portfolio is subject to swings in market prices that could slash its value during an economic or fi nancial shock.

Even so, some analysts are open to aspects of the government’s plan given the scale of the problem. Indian banks probably need about Rs2.3tn in fresh capital, S&P Global Ratings estimated in February – more than the combined amount of the dividend and the govern-ment’s planned Rs700bn cash infusion.

Using the RBI’s equity could be the best opportunity for policy makers to deal with their “most urgent” problem today, said Rajeswari Sengupta, an as-sistant professor at the Indira Gandhi Institute of Development Research in New Delhi.

Without adequate bank recapitalisa-tion, she said, “every other policy ini-tiative being discussed will fail to have teeth.”

Tight links between central banks and lenders still exist in parts of the world. The Central Bank of Nigeria bailed out some of the country’s lenders after fi ring eight banking chief execu-tives for their handling of a debt crisis in 2008 and 2009. Its Russian coun-terpart is a majority shareholder of the country’s biggest lender, Sberbank.

Still, using central bank funds to di-rectly recapitalise commercial lenders that it also supervises is “exotic,” ac-cording to Nicolas Veron, senior fellow at the Peterson Institute for Interna-tional Economics in Washington and the Brussels-based Bruegel research institute. Fundamentally that should be a budget expense, he said.

“In developed economies, I don’t see anything comparable,” Veron said. “Even Greece never thought of this.” -With assistance from Unni Krishnan, Paul Wallace and Anna Baraulina.

Rajan’s last fi ght: Resisting India’s bank funding plan

Hedge fund with $9bn in assets bets on AsiaBloombergTokyo

Sparx Group Co, the Japa-nese asset manager that oversees about ¥951.5bn

($9.3bn), sees investment op-portunities in Asian companies after the UK’s vote to leave the European Union.

Asia will be the driver of global growth amid the uncer-tainties in Europe over Brexit, Shuhei Abe, chief executive of-fi cer of Sparx, said in an inter-view in Tokyo yesterday. Sparx plans to put together a fund as early as the Northern Hemi-sphere autumn, using part of the company’s ¥13bn of cash and funds raised from investors as seed money to invest in the fastest-growing companies in the region, Abe said.

The UK vote prompted a flight out of risky assets amid uncertainties over the impli-cations of the decision for the global economy. Investors are now looking to central banks and governments for support as they seek alternatives amid the market turmoil. The MSCI Asia Pacific Index gained the most in more than a week yesterday, recouping some of the 3.7% drop the day after the UK’s June 23 referendum to secede from the EU. “The problem the world faces now is no growth, and the global money needs growth opportunities,” Abe said. “Asia will be the center for growth, luring capital from all over the world.”

Sparx plans to start the fund under its Selective brand, whose assets under manage-ment surged to ¥81.2bn as of March from ¥303mn a year ear-lier. The company has started visiting companies in the re-gion that have high growth and return on equity, Abe said. The new fund will invest in India, Indonesia, Thailand, Malaysia, Hong Kong, Taiwan and China, he said.

“It’s really very exciting,” said Abe. “The growth they are achieving is amazing. It almost makes me want to relocate out of Japan.”

Allianz starts $3.3bn Asia realty push with fund dealBloombergMunich

Allianz Real Estate is set to make its biggest Asian investment to date, in a

first step towards adding as much €3bn ($3.3bn) of real estate in the region within three years.

The $150mn pan-Asian fund investment will allow Allianz SE’s property unit to test the water before buying buildings directly, Francois Trausch, chief executive officer of Allianz Real Estate, said in an interview at the company’s headquarters in Mu-nich last week. The fund owns Chinese and Japanese assets.

“There will be volatility, but we believe in the long-term trends in Asia,” said Trausch, 51. “China and India would be the two coun-tries to anchor our Asia strategy.”

Property investors, including sovereign wealth funds, insurers and private-equity firms, poured a record 179bn renminbi ($27bn) into Chinese commercial proper-ties in 2015, about 51% more than a year earlier, according to data compiled by Jones Lang LaSalle. Shanghai was China’s most ac-tive market, JLL said.

Asian cities may attract even more capital in the wake of the UK’s decision to leave the Euro-pean Union, according to CBRE Group.

Allianz plans to make direct acquisitions within a few years. The firm manages about €100mn of properties in Asia, compared with more than €40bn of real estate equity and debt in Europe and North America. Allianz will

invest as much as €6bn in real es-tate this year in an effort to grow its portfolio to €60bn by 2019, Trausch said. By then, Allianz expects to have about 5% of its assets in Asia. While that target also covers Australia – where Al-lianz has about €230mn of prop-erty – most of the purchases will occur in China.

“In China, we like offices and logistics in the key cities, be-cause that’s where you see the change from a manufacturing economy to a service economy,” said Trausch, who spent six years as Asia-Pacific CEO for GE Capi-tal Real Estate before joining Al-lianz in January. Allianz will look for investment opportunities in Shanghai and Beijing, he said.

Allianz will increasingly invest in large “gateway” cities around the world, to take advantage of economic growth there. That includes New York, where the firm this year bought a stake in the One Battery Park Plaza office tower for an undisclosed amount. Allianz may also make an acqui-sition in Los Angeles, Trausch said.

“We don’t have that much exposure to the global 24/7 cit-ies. We know that’s where the demand is,” he said, referring to increased appetite for space from people who want to work and live there.

Allianz has a positive outlook on the US, despite indications that office markets in some cities may be peaking. Allianz expects to invest 3bn euros there in the coming years, raising its expo-sure to about 15% from 10% now.

“It’s an economy that has

shown its capacity to be resil-ient,” Trausch said.

Allianz doesn’t own any build-ings in London because it has long considered the prices to be too high.

“Depending on your perspec-tive, we were either too late or too early on London,” he said. “We’ll have to wait. It’s definitely a city we’d like to go into.” Trausch de-clined to comment on the UK’s decision to leave the European Union.

Allianz would also like to buy more in Berlin, where the com-pany owns several commercial properties, including an of-fice building overlooking the Brandenburg Gate and luxury-shopping complex that’s leased to Galeries Lafayette.

About half the portfolio’s growth will come from lending, as opposed to direct acquisi-tions of buildings, he said, which means the company may under-write more than €3bn of loans this year. Less than a third of the portfolio is in debt now.

“I’m pushing the teams very hard to expand our lending busi-ness,” he said. “The more we can do the better, both in Europe and the US.”

Lending is attractive because it gives Allianz a way to escape the intense competition among buyers seeking to buy buildings directly, while taking advantage of banks’ growing reluctance to extend riskier and larger loans as regulation makes that type of debt more expensive.

“We can cue a ticket of 300mn euros, which banks these days are more reluctant to do,” he said.

Rajan: Battling to preserve the Reserve Bank of India’s independence.

China appoints Xu as new Internet regulatorReutersBeijing

China yesterday appointed a new head of its powerful Internet reg-ulator, a man who has publicly

vowed to maintain the ruling Communist Party’s tight grip over cyberspace.

The Chinese government exercises widespread controls over the Internet and has sought to codify that policy in law.

Offi cials say such restrictions are need-ed to ensure security in the face of rising threats, such as terrorism.

In a brief report, the offi cial Xinhua news agency said Lu Wei will no longer head the Cyberspace Administration of China, naming one of his deputies, Xu Lin, as his replacement.

Xu, 53, was in charge of propaganda in China’s commercial capital Shanghai from 2013-15 before being moved to Bei-jing to become a deputy to Lu, according to his biography.

Hong Kong’s South China Morning Post said Xu is regarded as a protege of Presi-dent Xi Jinping.

The two men worked together when Xi was briefl y Shanghai’s Communist Party chief in 2007.

In an article about Internet manage-ment for infl uential bimonthly party journal Qiushi in October, Xu pledged to uphold party leadership over the Internet and management of the media and public opinion “without any equivocation”.

“There can be no turning deaf ears to or ignoring wrong points of view on the internet, fantastic stories and theories, distortions of facts to create rumours or malicious attacks,” he wrote.

“I defi nitely don’t see this as a bullish thing for foreign Internet companies,” said Duncan Clark, chairman and man-

aging director at BDA China, a Beijing-based investment consultancy.

Xinhua did not say where Lu would go next.

In China, it can often take weeks before subsequent public appointments are an-nounced.

Xinhua also made no mention of Lu’s other title – head of the general offi ce of the Central Leading Group for Internet Security, another body that oversees In-ternet policy.

Reuters was unable to reach either Lu or Xu for comment.

Lu worked his way up though Xinhua

before becoming head of propaganda in Beijing and then moving on to internet work in 2013.

Known for his strong defence of gov-ernment controls over the Internet, in December he rejected criticism ahead of a major state-sponsored Internet confer-ence that China’s Internet was too cen-sored, saying order was a means to online freedom.

Lu defended blocking some websites and censoring online posts, saying that if the government were being too restric-tive, China’s online market would not be developing so rapidly.

Xu: Vows to uphold party leadership over the Internet and management of the media and public opinion ‘without any equivocation’.

BUSINESS


Sony raises games unit’s sales target for next year ReutersTokyo

Japan’s Sony Corp yesterday lifted the sales tar-get for its games division next year on hopes for its new virtual reality headset, and said it

would re-enter robots a decade after it last aban-doned the business.

But the electronics giant cut its outlook for im-age sensor sales amid slowing demand for smart-phones, and maintained its operating profi t target of ¥500bn ($4.9bn) for the year beginning April.

The announcement comes as company watch-ers bank on sensors to continue driving Sony’s re-vival after years of struggle.

While the sensor slowdown is likely to disap-point, investors can take comfort in the unchanged profi t target, which highlights chief executive Ka-zuo Hirai is keeping to a recovery track and has not given up on new technologies such as artifi cial in-telligence and virtual reality.

Hirai at a news conference said the games busi-ness was set to be Sony’s biggest growth driver, helped by strong console sales, a rise in subscrib-ers to its PlayStation network and the launch of its virtual reality headset.

The headset will be sold from October for $399, versus the $599 of a rival product from Facebook Inc’s Oculus Rift.

“It’s an area where Sony can leverage its exper-tise in cameras, fi lming, content production as well as entertainment assets,” Hirai said, lifting the division’s sales target range to ¥1.8tn to ¥1.9tn ($17.6bn to $18.6bn) from ¥1.4tn to ¥1.6tn.

He also confi rmed Sony aimed to introduce a robot “capable of forming an emotional bond”.

Sony was a pioneer in robotics, launching dog AIBO in 1999 and humanoid QRIO in 2003.

But eff orts stalled during a decade-long strug-gle to cut costs in its consumer electronics busi-ness amid price competition from Asian rivals.

It produced its last AIBO and QRIO in 2006.Sony cut its sales outlook for its devices divi-

sion, which includes image sensors used in smart-phones, to a range of ¥1tn to ¥1.05tn from ¥1.3tn to ¥1.5tn.

Strong demand from smartphone makers such as Apple Inc had helped Sony recover from a slump in sales of consumer electronics such as television sets.

But Apple and other smartphone makers have

seen slowing sales of high-end handsets since late last year, prompting Sony to recently cancel the development of advanced camera modules de-signed for high-end smartphones.

“The ongoing slowdown in profi t growth ap-

pears inevitable through fi scal 2017,” Hirai said.Asked about the impact of Britain’s vote to

leave the European Union, Hirai said Sony aims to achieve its targets regardless of consequent cur-rency swings.

Sony’s president and chief executive off icer Kazuo Hirai (centre), chief financial off icer Kenichiro Yoshida (left) and executive deputy president Tomoyuki Suzuki attend its corporate strategy meeting at the company’s headquarters in Tokyo yesterday. The Japanese firm cut its sales outlook for its devices division, which includes image sensors used in smartphones, to a range of ¥1tn to ¥1.05tn from ¥1.3tn to ¥1.5tn.

ReutersBeijing

China’s Foreign Ministry yesterday said the yuan’s exchange rate was not

the reason for unbalanced trade ties with the United States, after Republican presidential can-didate Donald Trump said he would label Beijing a currency manipulator.

Trump, the presumptive Re-publican nominee, has called China the “grand master” of currency devaluation, and has appealed to voters with tough talk on unfair trade deals, which he says cost American jobs.

In a Tuesday speech on his trade policy stances, Trump said that if elected, he would direct his treasury secretary to label China a currency manipulator, a move he said “should have been done years ago”.

Beijing has committed to continue “market-oriented ex-change rate reform” of the yuan.

Chinese offi cials have also said Trump’s trade policies are irrational.

“China-US trade cooperation is the ballast and propeller of bi-lateral relations.

Its essence is mutual benefi t.The yuan exchange rate is

not the reason for unbalanced China-US trade,” Foreign Min-istry spokesman Hong Lei said in a statement on its website re-sponding to Trump’s comments.

“We hope some individuals on the US side can objectively view China-US trade relations, do more to benefi t mutual trust and cooperation, and jointly safeguard the healthy and stable development of China-US trade relations,” Hong said.

The United States’ goods and services trade defi cit with China was $336.2bn in 2015, according to the US Trade Representative’s offi ce.

The yuan is currently hovering near a 5-1/2-year low against the dollar.

The US government has warned China that any reversion to its past exchange rate policy of keeping the yuan artifi cially low would trigger new US-China tensions.

Chinese offi cials have gener-ally avoided criticising Trump directly, though they have made indirect criticism of his proposal to ban Muslims from enter-ing the United States and of his claims that China is stealing US jobs.

Chinadefends forexpolicies

China is running out of time to cure its steel problemsBy Andy HomeLondon

China is frantically trying to apply the brakes to its

runaway steel juggernaut.

Targets are being set for capacity closures, 45mn

tonnes nationally this year and 100mn-150mn tonnes

over the next three to five years.

Regional governments are heeding Beijing’s call.

Yunnan province, for example, has committed to

eliminate 4.5mn tonnes of capacity by 2018.

Local authorities are being urged to crack down

on energy usage in the sector with those that fail to

meet eff iciency targets facing forced closure if they

cannot improve. A drive to consolidate the country’s

fractured steel production landscape has begun with

Baosteel, the second-largest Chinese operator, being

pushed into a forced marriage with its smaller and

financially weaker peer Wuhan Iron and Steel.

Beijing, in other words, is using all of its centrally-

controlled levers to try and reform the sector.

It has good reasons to do so.

Steel and coal, another sector earmarked for

“supply-side reform”, are not only littered with non-

performing “zombie” operators but major obstacles

on the path towards a greener future.

But the palpable sense of urgency is being dictated

by the growing international pressure on China to halt

its surging steel exports.

A failure to produce results is going to ignite an

already smouldering trade war with other global

powers.

But can Beijing deliver? It’s going to help if it stops

pressing the accelerator and the brake pedals at the

same time.

Even if does, though, it may be too little too late.

Reform of the steel and coal sectors has been

moving steadily towards the top of China’s national

policy agenda ever since the 2009 shock-and-awe

infrastructure boom started to lose momentum a

couple of years ago.

Left to its own devices Beijing would have pre-

ferred a more gradualist process, not least because

of the high social costs of weeding out excess steel

capacity and loss-making production.

An estimated 400,000 jobs would be lost if the full

150mn tonnes target is met.

But time is no longer on Beijing’s side.

The trade walls are rapidly being erected.

The US International Trade Commission (ITC) last

week ruled that imports of both Chinese cold-rolled

and corrosion-resistant steel products were hurting

local producers, paving the way for hefty anti-dump-

ing duties.

That just adds to a growing list of punitive US tariff s

against Chinese steel-makers.

More may be on their way, including the nuclear

option of halting just about all imports proposed by

US Steel, which alleges Chinese competitors stole its

secrets and fixed prices. Those claims are now being

investigated by the ITC. China has reacted with pre-

dictable anger, threatening to take the United States

to the World Trade Organisation.

But it is not just the United States that is piling on

the pressure.

Any failure by China to curtail its output and

exports could prompt the European Union also to

take retaliatory action, not only in steel but in other

sectors.

“If the problem is not properly remedied, trade

defence measures may proliferate, spreading beyond

steel to other sectors such as aluminium, ceramics

and wood-based products,” warned the European

Commission.

Aluminium in particular is another hot-button

issue, especially in the United States, where the ITC

in April opened an investigation into the domestic

production sector and global (read “Chinese”) trade

flows.

Looming even larger for Beijing policy-makers

is the prospect of seeing China’s bid for market

economy status at the WTO founder on the rising

protectionist waves.

In trying to react fast enough to head off a full-

blown trade war with the both the United States and

Europe, China faces two big challenges.

The first is the sheer scale of excess capacity in the

country. The most commonly cited figure is 300mn

tonnes which comes from the China Iron and Steel

Association (CISA). Not only is it a suspiciously round

figure, suggesting as it does an element of back-of-

the-envelope calculation, but even if true, Beijing’s

off icial target of eliminating around half of it over

several years will not be enough to satisfy its critics.

The European Commission, for example, explic-

itly noted that the pledge was insuff icient, a point

underlined by German Chancellor Angela Merkel,

who used a trip to Shenyang this month to warn that

as the world’s biggest steel producer, China “bears a

greater responsibility” for addressing global market

imbalances.

The second more pressing problem is the fact that

both Chinese steel production and exports are rising

again. National production has risen year-on-year in

the last three months after falling over the course of

2015 and January-February 2016.

Cumulative year-to-date output of 330mn tonnes

is still down by 1.4% on last year but the gap is fast

closing.

Exports of steel products have risen by 6% so far

this year to 46mn tonnes and are on course to at least

match last year’s massive 112mn tonnes.

Higher production is a direct reaction to improved

steel pricing in China’s domestic market.

The speculative bull bubble of April has been burst

but the price of Shanghai rebar has picked itself off

the ensuing lows of 1,900 yuan per tonne to a current

2,241 yuan. There are no signs that the retail crowd

that fuelled the spring frenzy has returned.

Rather, the steel price and steel producers are

riding the tail-winds of China’s mini stimulus at the

start of the year, which like all recent Beijing-designed

economic boosters has been focused on accelerated

infrastructure spending.

This is the government foot that is still on the steel

accelerator, albeit with less force than in the past.

Even assuming the eff ects of mini-stimulus wane

over the coming months, there is another, even more

problematic dynamic behind buoyant Chinese steel

prices.

They are in part reacting to Beijing’s very targeting

of excess capacity.

After all, less excess capacity promises better

profitability for those that survive the coming “supply

side” reform package.

Again, it’s a very rational market reaction to gov-

ernment policy but one that promises higher output

and, in all probability, higher exports over the coming

period. That wouldn’t matter over a medium-term

time frame, if it’s the price to be paid for a leaner,

cleaner Chinese steel sector.

But with the clock ticking on more steel sanctions,

the potential spread of “defence measures” to other

sectors and an end-year deadline for that much-

coveted market economy status, time is what China

doesn’t have right now.

Andy Home is a columnist for Reuters. The opinions

expressed here are those of the author.

Trump: China the ‘grand master’ of currency devaluation.

Pertamina picks Shell to process Iraqi crudeReutersJakarta

Indonesia’s Pertamina has selected Shell to process 1mn barrels per month of Iraqi crude at a Singapore

refi nery, a senior offi cial at the state-owned company said yesterday.

The quest for oil-processing capacity abroad is partly spurred by a lack of in-vestor interest in building domestic re-fi neries because of unfavourable invest-ment conditions set by the government.

“We’ve selected Shell because they are the most competitive,” said Daniel Purba, senior vice president of Pertami-na’s Integrated Supply Chain unit.

Purba added that the Shell deal is ex-pected to be formalised in the coming weeks and will initially run for the six months from July to December.

An estimated 900,000 barrels a month of gasoline for import will be produced from the Singapore refi nery.

“After that we’ll see how it goes; if it runs smoothly and what market condi-tions are like,” Purba said, adding that the arrangement is a far better solution than importing products directly.

Pertamina’s monthly Iraqi oil ship-ments to the Singapore refi nery are likely to consist of 290,000 barrels from

a stake in the West Qurna block and a further 700,000 barrels from other Iraqi fi elds. Pertamina has about 1mn barrels per day (bpd) of domestic refi n-

ing capacity, which meets only about two thirds of Indonesia’s daily oil con-sumption. Separately, Purba said that Pertamina is close to fi nalising a deal to

import 1mn barrels of Iranian light crude for delivery in the third quarter from Iran’s national oil company.

Purba said Pertamina would initially

buy one cargo to test its performance at the Cilacap refi nery.

“If it’s good, this could be an alterna-tive (source for) crude,” he said.

A Pertamina refined fuel tanker is seen off Singapore. The Indonesian refiner has about 1mn bpd of domestic refining capacity, which meets only about two thirds of Indonesia’s daily oil consumption.

LATEST MARKET CLOSING FIGURES

9Gulf TimesThursday, June 30, 2016

BUSINESS

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 Group

89.40

61.50

10.54

19.15

11.16

10.70

86.60

85.20

139.90

57.90

42.40

61.90

45.70

95.40

23.20

49.00

11.14

150.80

11.35

204.80

32.50

73.80

88.00

17.44

13.20

18.70

207.50

92.00

88.00

34.00

16.09

98.00

61.30

57.70

36.40

18.09

19.98

35.30

24.37

36.60

32.80

24.20

0.00

0.82

0.67

-0.10

-0.80

0.66

0.70

-0.35

-0.29

0.00

0.00

0.65

0.00

0.42

0.22

0.00

-0.09

0.94

0.00

0.00

0.00

2.22

-1.01

-1.08

-1.12

1.08

-0.34

0.00

0.00

-0.58

0.56

-0.61

0.82

0.17

0.00

0.33

0.00

1.58

1.04

-0.27

0.46

0.00

-

46,981

328,869

71,988

21,771

15,141

26,500

6,340

52,094

-

4,273

1,625

4,263

5,831

107,577

-

50,037

9,349

181,250

19,112

-

109,627

53,341

18,907

216,966

165,458

2,181

32,600

-

102,130

4,077

38,166

3,600

37,667

324,454

68,026

-

37,362

367,700

130,842

142,469

1,500

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

23.97

27.50

6.62

11.93

11.39

22.55

11.04

20.65

20.27

12.55

25.79

24.13

24.95

59.63

13.90

39.15

25.60

37.31

31.12

13.02

52.24

19.55

34.49

19.94

13.50

41.17

34.23

91.00

119.00

19.14

40.44

50.39

7.42

28.47

34.90

13.85

9.29

42.29

45.32

140.08

17.46

63.24

81.13

6.45

3.93

90.21

16.94

11.29

15.39

32.62

18.19

17.00

127.93

76.75

25.35

27.48

11.94

28.13

13.08

12.55

10.09

65.00

11.03

11.04

8.20

30.27

10.52

69.75

10.93

21.79

60.62

13.33

30.10

10.04

43.22

6.76

32.59

12.65

16.51

13.57

33.70

39.95

21.64

149.50

39.16

6.95

37.83

7.95

16.35

15.64

10.83

19.39

17.96

24.87

44.47

99.49

12.40

-0.04

0.18

2.00

-0.58

-0.26

0.13

-0.36

1.18

0.60

0.00

-0.85

-0.25

1.63

-0.17

-0.14

4.12

-1.16

-0.53

-0.77

-0.08

0.95

-0.05

0.88

-1.38

0.00

-1.91

1.36

0.00

0.30

1.00

0.40

1.29

0.27

0.99

-0.68

2.74

0.00

-0.19

1.23

0.06

-0.51

-1.08

0.32

0.94

-0.25

0.32

-0.35

1.07

-0.65

0.43

-1.20

0.41

-1.04

1.99

-0.82

1.29

-0.08

1.74

0.77

-1.57

0.40

0.08

-1.08

-0.90

-1.56

2.61

-0.57

0.00

0.28

0.97

-1.43

-3.89

0.07

-0.10

0.44

-0.15

-2.77

0.16

3.06

0.52

-0.15

0.18

-1.37

-0.17

0.62

1.46

0.61

1.53

9.81

0.45

-0.46

0.00

0.34

-0.56

0.38

-0.50

0.00

269,710

510,254

87,693,516

100,789

909,736

216,309

347,536

1,047,093

206,172

-

90,160

192,442

418,971

204,507

112,020

827,161

408,319

28,100

305,651

1,619,555

161,009

1,514,486

289,128

215,229

-

191,104

168,141

1,571

29,248

97,077

449,501

261,758

718,890

285,649

408,614

676,957

684,726

126,479

309,666

22,489

2,266,057

754,519

6,089,484

16,747,716

4,653,206

161,779

69,186

351,290

741,021

59,324

151,005

336,124

5,225

16,781

117,598

294,074

800,071

229,993

542,057

797,014

186,041

29,337

891,337

284,381

1,418,450

250,350

1,890,709

-

502,364

454,503

116,563

2,269,157

22,104

867,015

337,965

2,407,069

1,588,506

56,512

2,178,538

651,638

79,324

159,967

727,884

6,128

943,159

2,157,629

86,200

7,344,112

3,848,734

441,101

288,664

-

371,517

268,027

54,194

20,146

119,446

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

6.11

9.18

8.59

17.55

19.51

15.23

12.21

13.12

54.34

25.20

35.40

24.80

12.95

21.70

13.87

12.91

58.12

19.65

26.75

14.83

15.23

18.10

23.35

36.46

25.32

16.45

32.65

10.33

76.75

-0.65

-2.34

-2.50

0.29

-2.01

0.00

-0.97

0.46

1.19

-0.40

0.51

0.00

-0.23

0.00

0.95

1.57

0.82

1.08

0.11

1.78

2.49

0.22

-0.68

1.42

0.12

-2.55

-1.33

1.08

-1.70

877,312

1,221,701

880,214

557,981

751,210

-

583,501

37,147,888

265,019

571,776

185,013

-

239,343

-

414,135

2,669,344

1,897,428

267,828

141,203

984,218

1,696,475

561,256

286,381

227,653

256,313

2,082,405

129,045

980,993

57,759

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 Bank 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

82.00

55.00

180.00

82.00

134.00

285.00

38.00

204.00

24.50

40.50

510.00

335.00

400.00

600.00

435.00

184.00

234.00

44.00

31.00

33.50

700.00

61.00

21.00

120.00

12.50

40.50

760.00

600.00

56.00

0.00

36.50

0.00

20.00

0.00

49.50

690.00

0.00

22.50

70.00

62.00

174.00

305.00

85.00

68.00

48.50

0.00

178.00

0.00

25.50

0.00

465.00

31.00

68.00

0.00

46.00

0.00

108.00

150.00

100.00

86.00

108.00

98.00

41.00

60.00

200.00

285.00

40.50

50.00

32.00

40.00

0.00

93.00

475.00

0.00

76.00

186.00

29.50

114.00

100.00

104.00

178.00

65.00

63.00

0.00

335.00

0.00

550.00

28.50

380.00

80.00

960.00

190.00

0.00

0.00

86.00

330.00

510.00

47.00

285.00

0.00

28.50

51.00

27.50

34.00

114.00

41.50

0.00

0.00

70.00

22.50

32.50

35.50

208.00

31.00

31.00

39.50

112.00

74.00

22.50

158.00

11.00

79.00

700.00

48.50

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

4.26

0.00

4.08

0.00

1.27

-1.64

0.00

1.10

-0.85

0.00

-4.62

0.00

0.00

0.00

-2.33

0.00

0.00

-1.22

-1.30

0.00

0.00

0.00

1.39

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-5.56

3.03

-6.73

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-2.86

0.00

-4.17

0.00

0.00

0.00

2.04

0.00

0.00

-2.00

2.50

0.00

0.00

0.00

-1.22

0.00

0.00

-1.23

0.00

-1.06

0.00

0.00

2.70

-4.12

1.72

0.00

3.09

1.96

0.00

0.00

5.00

0.00

-1.47

0.00

3.77

0.00

1.33

0.00

0.00

0.00

0.00

0.00

1.18

-1.49

0.00

2.17

0.00

0.00

0.00

4.08

1.85

0.00

0.00

-1.19

0.00

0.00

0.00

12.50

0.00

-1.39

-0.95

-1.59

3.33

1.28

0.00

0.00

-2.17

0.00

0.00

0.00

0.00

5.43

0.00

146

25,390

50

20,000

1,000

800

2,500

17

25,000

3,270,857

294,640

3,484

2

1,256,041

1,380

439,346

31,751

20,000

51,711

500

4,401

68,000

1,667,234

235,000

1,399,578

1,742,601

56,357

416,597

18,324

-

25,600

-

508

-

3,000

4,000

-

22,500

200

1,070,000

250,000

49,695

25,000

30,978

501,507

-

2,700

-

2,843,400

-

675

1,500

261,815

-

127,600

-

8,793

45,442

500

20,000

7,865

200

100

55,000

122,731

2,908

5,183,181

2,000

205,194

147,750

-

900

206,960

-

1,782,000

60,240

6,510

783,791

50

214

297

165,110

590,304

-

415,822

-

500

4,285,750

20,243

1,000

250

10

-

-

3,021

464,002

50,000

1,317,241

34,000

-

563,200

259,100

653,920

40,101

26,000

4,287,175

-

-

42,330

1,002

2,001

878,300

98,060

63,404

288,510

579,500

5,000

500

105,100

100

9,165,068

945,094

3,069

8,534,543

-

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 CattlefeedDhofar Beverages Co

Construction Materials IndComputer Stationery Inds

Bankmuscat SaogBank SoharBank Nizwa

Bank Dhofar Saog

0.43

1.00

3.40

0.15

0.13

0.12

0.13

1.34

0.30

0.21

0.72

1.05

1.90

4.70

0.25

0.65

1.48

1.38

2.50

0.29

1.30

0.25

0.16

0.53

0.73

0.57

0.25

0.32

1.64

2.20

0.30

0.11

1.88

0.20

0.20

0.52

0.40

0.00

0.55

0.06

4.57

1.00

0.17

3.64

0.50

0.45

0.47

1.82

0.00

0.14

0.25

0.17

5.00

0.11

0.06

0.53

0.55

0.14

0.65

3.75

0.24

0.11

1.80

0.75

0.12

0.19

0.51

0.10

1.25

0.11

0.39

0.34

0.12

0.11

0.25

10.50

0.13

0.11

0.39

0.17

0.11

1.49

0.49

0.18

0.40

0.21

1.28

0.23

0.26

0.03

0.26

0.38

0.17

0.08

0.23

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

0.00

0.00

0.00

0.00

1.79

0.00

0.00

1.92

0.00

0.00

0.00

-0.40

0.00

0.62

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-9.59

0.00

0.00

1.69

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

2.27

0.00

0.00

0.00

0.00

0.00

0.00

4.55

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

3.57

0.00

1.22

0.00

0.00

3.77

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

3.33

0.00

0.53

0.00

1.33

0.00

9,634

-

-

-

-

-

-

-

110

-

-

-

20

2,362

-

-

-

-

-

620,846

1,166

206,906

1,142,829

-

666,349

20,133

70,000

-

63,230

-

-

440,000

-

300

241,999

-

22,090

-

1,061

166,700

-

-

-

-

-

-

-

-

-

271,000

-

-

-

-

-

-

431,132

-

-

-

1,000

-

-

-

-

-

-

75,275

-

-

-

-

12,000

150,000

114,450

-

-

3,638,782

-

-

-

-

-

-

-

-

-

1,300

-

86,104

-

347,873

1,050,300

832,848

-

OMAN


Areej Vegetable OilsAloula Co

Al-Omaniya Financial ServiceAl-Hassan Engineering Co

Al-Fajar Al-Alamia CoAl-Anwar Ceramic Tiles Co

Al Suwadi PowerAl Shurooq Inv Ser

Al Sharqiya Invest HoldingAl Maha Petroleum Products M

Al 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

3.68

0.53

0.30

0.08

0.75

0.25

0.21

1.04

0.14

1.50

0.46

0.07

0.06

0.31

0.55

0.20

0.22

0.06

0.88

0.21

1.13

0.08

0.18

0.18

0.71

0.05

0.86

0.25

0.00

0.00

0.00

3.90

0.00

0.00

0.00

0.00

7.69

0.00

0.00

2.82

0.00

0.00

0.00

3.05

0.00

1.75

0.00

0.00

0.00

0.00

2.94

1.11

0.00

0.00

0.00

0.00

-

-

-

193,740

-

10,000

590

-

1,998,582

1,330

241,076

87,300

-

-

-

126,017

105,281

118,176

-

-

-

-

1,354,179

300,000

-

-

-

-

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

1.97

2.00

2.47

4.00

1.43

1.20

0.85

1.52

3.85

1.50

1.07

4.10

1.17

3.17

0.79

2.80

0.59

81.15

1.17

6.26

0.98

5.00

0.64

4.50

3.35

5.10

4.79

9.31

0.78

0.52

2.20

1.60

0.81

2.20

2.40

0.87

1.02

1.08

4.60

12.00

1.78

0.77

18.95

6.05

7.00

0.55

1.99

1.35

0.87

0.84

1.89

2.68

4.40

0.41

300.00

5.00

2.25

60.00

7.50

2.63

0.50

5.05

2.00

3.14

0.49

3.72

0.51

0.00

0.00

-0.50

0.00

0.00

0.00

-4.40

0.00

0.00

-0.93

0.00

0.00

0.00

0.00

0.00

3.51

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.20

1.30

0.00

0.00

-1.84

0.00

-0.90

0.00

0.00

0.00

0.00

0.00

0.00

-1.11

-1.28

0.26

0.00

0.00

0.00

0.00

0.00

0.00

-8.70

0.00

0.75

0.00

0.00

0.00

0.00

0.00

0.00

-2.60

0.00

0.00

0.00

0.00

4.67

0.00

-0.27

2,069,835

-

-

341,556

-

-

-

38,185

-

-

500

-

-

658,141

877,007

-

4,135,599

-

-

-

-

400

-

-

-

130,000

-

859,444

996,904

1,066,171

-

200,000

-

885,928

-

-

-

-

-

1,708,815

46,000

4,677,387

544,632

-

-

5,257,459

-

-

-

1,500

-

7,334,688

-

-

-

-

-

-

256,000

-

-

-

-

17,000

2,125,753

212,270

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 Bank 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

0.12

0.00

0.00

0.37

0.24

0.00

0.00

0.19

0.00

0.00

0.62

0.10

0.06

0.12

6.50

0.00

0.00

0.64

0.22

0.00

0.00

0.89

0.00

0.33

0.00

0.07

`

0.30

0.00

0.42

0.00

0.11

0.00

0.00

0.83

0.67

1.29

0.00

0.00

0.38

0.28

0.45

0.09

0.00

0.64

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

3.13

-1.64

0.00

0.00

0.00

0.00

-1.54

0.00

0.00

0.00

0.56

0.00

-0.61

0.00

0.00

0.00

0.67

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

2.74

0.00

0.00

0.00

0.00

0.79

400,000

-

-

12,666

32,917

-

-

789,437

-

-

10,000

610,525

82,900

100,000

37,000

-

-

8,882

51,875

-

-

50,000

-

300,000

-

48,308

-

10,000

-

743,902

-

19,000

-

-

20,000

30,000

3,000

-

-

220,000

74,000

45,000

794,987

-

172,750

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

28.50

27.00

380.00

190.00

104.00

98.00

194.00

0.00

39.00

0.00

21.00

285.00

79.00

780.00

68.00

87.00

190.00

47.50

1,400.00

355.00

0.00

31.50

49.00

1,100.00

0.00

30.50

41.50

0.00

49.00

0.00

15.00

62.00

0.00

240.00

900.00

75.00

100.00

57.00

22.00

73.00

156.00

300.00

87.00

0.00

1,700.00

124.00

335.00

52.00

385.00

385.00

0.00

455.00

34.00

0.00

46.00

670.00

2,460.00

0.00

33.00

1.79

0.00

0.00

0.00

-3.70

0.00

0.00

0.00

0.00

0.00

0.00

-3.39

0.00

0.00

0.00

0.00

0.00

2.15

-1.41

0.00

0.00

-7.35

1.03

-5.17

0.00

-1.61

1.22

0.00

-1.01

0.00

0.00

1.64

0.00

0.00

-1.10

0.00

-3.85

0.00

0.00

0.00

2.63

0.00

1.16

0.00

0.00

0.00

0.00

0.00

4.05

-1.28

0.00

-1.09

4.62

0.00

0.00

0.00

0.00

0.00

1.54

1,095,550

1,865,190

545,731

110,000

80,542

7,000

142,271

-

8,151,226

-

27,000

8,000

33,966

4,546

70,560

21,520

15,064

150

96,320

15

-

199,600

1,312

2,729

-

1,000

1,475,069

-

70,000

-

3,081,352

631,540

-

915

96,836

2,011

45,000

56,100

51,500

12,000

120

2,065

318,986

-

200

2,431,004

2,671

925,000

750

58,000

-

715,047

1,829,090

-

41,843

571

523,840

-

10,601,910

KUWAIT


10 Gulf TimesThursday, June 30, 2016

BUSINESS

Apple IncMicrosoft Corp

Exxon Mobil CorpJohnson & JohnsonGeneral Electric Co

Jpmorgan Chase & CoProcter & Gamble Co/The

Verizon Communications IncWal-Mart Stores Inc

Pfizer IncCoca-Cola Co/The

Chevron CorpVisa Inc-Class A Shares

Home Depot IncWalt Disney Co/The

Merck & Co. Inc.Intel Corp

Intl Business Machines CorpCisco Systems Inc

Unitedhealth Group IncMcdonald’s Corp

3M CoNike Inc -Cl B

Boeing Co/TheUnited Technologies CorpGoldman Sachs Group Inc

American Express CoDu Pont (E.I.) De Nemours

Caterpillar IncTravelers Cos Inc/The

94.08

50.28

92.16

118.87

30.50

60.81

83.55

55.04

72.41

35.07

44.42

104.19

76.14

127.19

97.13

56.94

31.69

147.46

28.08

140.22

119.41

171.07

54.09

126.34

100.35

144.45

58.96

63.87

74.22

116.05

0.52

1.69

1.37

0.54

1.87

2.17

1.32

0.40

1.26

1.83

0.54

2.52

1.30

-0.27

1.12

2.45

1.60

1.21

1.03

1.09

0.77

0.87

1.87

1.98

1.33

1.43

1.83

1.78

2.34

1.68

14,972,261

8,768,570

6,056,230

2,822,573

15,881,165

9,951,833

2,815,129

6,089,724

2,317,812

9,317,267

4,428,796

3,190,963

5,375,936

2,630,911

2,725,453

3,649,466

6,575,144

1,101,011

9,889,037

1,140,729

1,681,753

535,391

19,707,898

2,107,590

1,662,899

1,643,068

2,174,310

1,061,051

1,598,833

712,630

DJIA


Wpp PlcWorldpay Group Plc

Wolseley PlcWm Morrison Supermarkets

Whitbread PlcVodafone Group Plc

United Utilities Group PlcUnilever Plc

Tui Ag-DiTravis Perkins Plc

Tesco PlcTaylor Wimpey Plc

Standard Life PlcStandard Chartered Plc

St James’s Place PlcSse Plc

Smith & Nephew PlcSky Plc

Shire PlcSevern Trent Plc

Schroders PlcSainsbury (J) Plc

Sage Group Plc/TheSabmiller Plc

Rsa Insurance Group PlcRoyal Mail Plc

Royal Dutch Shell Plc-B ShsRoyal Dutch Shell Plc-A Shs

Royal Bank Of Scotland GroupRolls-Royce Holdings Plc

Rio Tinto PlcRexam Plc

Relx PlcReckitt Benckiser Group Plc

Randgold Resources LtdPrudential Plc

Provident Financial PlcPersimmon Plc

Pearson PlcPaddy Power Betfair Plc

Old Mutual PlcNext Plc

National Grid PlcMondi Plc

Merlin EntertainmentMediclinic International Plc

Marks & Spencer Group PlcLondon Stock Exchange Group

Lloyds Banking Group PlcLegal & General Group PlcLand Securities Group Plc

Kingfisher PlcJohnson Matthey Plc

Itv PlcIntu Properties Plc

Intl Consolidated Airline-DiIntertek Group Plc

Intercontinental Hotels GrouInmarsat Plc

Informa PlcImperial Brands Plc

Hsbc Holdings PlcHargreaves Lansdown Plc

Hammerson PlcGlencore Plc

Glaxosmithkline PlcGkn Plc

Fresnillo PlcExperian Plc

Easyjet PlcDixons Carphone Plc

Direct Line Insurance GroupDiageo Plc

Dcc PlcCrh Plc

Compass Group PlcCoca-Cola Hbc Ag-Di

Centrica PlcCarnival Plc

Capita PlcBurberry Group Plc

Bunzl PlcBt Group Plc

British Land Co PlcBritish American Tobacco Plc

Bp PlcBhp Billiton Plc

Berkeley Group Holdings/TheBarratt Developments Plc

Barclays PlcBae Systems Plc

Babcock Intl Group PlcAviva Plc

Astrazeneca PlcAssociated British Foods Plc

Ashtead Group PlcArm Holdings Plc

Antofagasta PlcAnglo American Plc

Admiral Group Plc3I Group Plc

#N/A!

1,553.00

268.30

3,815.00

182.80

3,567.00

222.60

1,015.00

3,449.50

844.50

1,497.00

170.70

132.90

288.00

557.30

785.50

1,472.00

1,235.00

853.00

4,472.00

2,376.00

2,254.00

229.80

630.00

4,340.00

476.00

507.00

2,018.50

2,000.00

180.20

704.50

2,216.50

645.00

1,351.00

7,276.00

8,065.00

1,256.00

2,310.00

1,444.00

954.50

7,950.00

192.20

4,893.00

1,061.00

1,341.00

431.80

1,084.00

316.40

2,492.00

55.52

188.70

1,022.00

326.00

2,816.00

177.70

276.10

359.30

3,336.00

2,723.00

773.50

692.00

3,908.00

452.75

1,223.00

518.00

146.70

1,559.50

263.60

1,587.00

1,359.00

1,087.00

335.40

343.90

1,995.50

6,405.00

2,122.00

1,412.00

1,483.00

216.40

3,320.00

940.00

1,167.00

2,230.00

411.55

604.00

4,694.00

424.80

910.40

2,550.00

408.70

137.95

505.50

917.50

391.60

4,380.50

2,665.00

1,050.00

1,088.00

443.00

696.90

1,963.00

504.50

0.00

2.04

4.72

3.61

2.81

5.19

2.06

4.37

2.45

-3.82

5.72

6.39

8.93

4.05

3.40

3.42

3.95

3.26

4.15

5.37

3.48

4.79

3.51

3.03

0.70

4.71

3.96

4.64

4.11

3.68

5.23

3.94

1.02

3.84

3.03

1.26

5.50

1.01

7.44

5.06

-0.50

4.34

3.12

3.56

3.95

4.05

3.73

4.98

3.23

1.04

6.01

3.34

3.26

1.00

7.05

3.72

0.59

3.12

3.14

6.62

3.90

3.45

2.06

6.35

4.44

5.96

3.01

1.89

9.52

2.80

1.68

-1.93

1.75

3.13

4.40

3.87

3.67

1.85

4.84

1.87

3.92

6.09

5.29

5.13

4.32

3.04

5.03

3.56

7.37

7.27

4.90

4.57

4.02

6.99

2.50

4.31

4.17

3.62

6.70

8.06

3.15

1.59

0.00

5,468,615

7,740,953

804,677

12,413,730

1,851,501

85,107,700

2,737,748

2,844,048

3,205,408

1,548,628

44,933,658

53,785,251

8,003,080

12,801,744

2,500,904

4,094,402

2,673,107

5,997,897

3,247,425

919,201

524,946

13,534,327

3,730,662

3,070,263

3,371,871

3,616,599

10,298,624

8,088,176

35,290,401

8,052,706

4,612,158

52,424,256

3,797,031

1,658,488

758,361

9,408,274

953,277

3,856,896

4,267,997

160,270

18,441,556

821,327

10,527,104

2,009,744

3,712,017

1,189,116

9,516,158

616,651

338,639,046

48,351,916

4,967,574

15,188,528

888,145

47,519,945

4,300,632

25,798,068

371,225

840,653

2,337,026

1,581,512

2,870,511

47,892,854

1,082,186

5,038,686

60,276,748

14,057,026

7,726,965

1,965,586

2,725,569

4,156,391

8,766,486

4,093,898

7,383,429

189,741

1,980,683

4,334,691

831,325

24,499,316

910,505

2,598,530

3,337,546

1,424,844

36,053,163

8,485,581

4,134,571

52,652,895

11,343,286

1,650,497

10,366,470

115,180,701

11,035,665

1,618,469

29,616,245

3,789,144

1,353,655

2,179,725

3,870,429

3,989,688

7,482,410

696,133

2,904,431

-

FTSE 100


East Japan Railway CoItochu Corp

Fujifilm Holdings CorpYamato Holdings Co Ltd

Chubu Electric Power Co IncMitsubishi Estate Co Ltd

Mitsubishi Heavy IndustriesToshiba Corp

Shiseido Co LtdShionogi & Co Ltd

Tokyo Gas Co LtdTokyo Electron Ltd

Panasonic CorpFujitsu Ltd

Central Japan Railway CoT&D Holdings Inc

Toyota Motor CorpKddi Corp

Nitto Denko Corp

9,468.00

1,246.50

3,970.00

2,299.50

1,459.50

1,878.00

393.30

277.20

2,594.00

5,615.00

418.50

8,427.00

882.20

366.10

18,145.00

860.10

5,119.00

3,095.00

6,277.00

1.66

3.23

1.07

1.57

1.85

2.54

3.97

6.66

1.39

1.08

3.05

4.31

3.40

3.13

0.69

3.32

2.89

0.68

2.05

979,800

7,309,900

1,897,200

1,484,900

2,691,200

4,987,000

16,029,000

44,827,000

1,630,100

1,134,800

8,958,000

2,034,800

9,843,300

10,636,000

527,200

3,780,900

14,160,100

10,747,700

1,267,700

TOKYO


Rakuten IncKyocera Corp

Nissan Motor Co LtdHitachi Ltd

Takeda Pharmaceutical Co LtdJfe Holdings Inc

Ana Holdings IncMitsubishi Electric Corp

Sumitomo Mitsui Financial GrHonda Motor Co Ltd

Fast Retailing Co LtdMs&Ad Insurance Group Holdin

Kubota CorpSeven & I Holdings Co Ltd

Inpex CorpResona Holdings Inc

Asahi Kasei CorpKirin Holdings Co Ltd

Marubeni CorpMitsubishi Ufj Financial Gro

Mitsubishi Chemical HoldingsFanuc Corp

Daito Trust Construct Co LtdOtsuka Holdings Co Ltd

Oriental Land Co LtdSekisui House Ltd

Secom Co LtdTokio Marine Holdings Inc

Aeon Co LtdMitsui & Co Ltd

Kao CorpDai-Ichi Life Insurance

Mazda Motor CorpKomatsu Ltd

West Japan Railway CoMurata Manufacturing Co Ltd

Kansai Electric Power Co IncDenso Corp

Sompo Japan Nipponkoa HoldinDaiwa House Industry Co Ltd

Jx Holdings IncNippon Steel & Sumitomo Meta

Suzuki Motor CorpNippon Telegraph & Telephone

Ajinomoto Co IncMitsui Fudosan Co Ltd

Ono Pharmaceutical Co LtdDaikin Industries Ltd

Bank Of Yokohama Ltd/TheToray Industries IncAstellas Pharma Inc

Bridgestone CorpSony CorpHoya Corp

Sumitomo Mitsui Trust HoldinJapan Tobacco Inc

Osaka Gas Co LtdSumitomo Electric Industries

Daiwa Securities Group IncSoftbank Group Corp

Mizuho Financial Group IncNomura Holdings Inc

Daiichi Sankyo Co LtdFuji Heavy Industries Ltd

Ntt Docomo IncSumitomo Realty & Developmen

Sumitomo Metal Mining Co LtdOrix Corp

Asahi Group Holdings LtdKeyence Corp

Nidec CorpIsuzu Motors Ltd

Unicharm CorpShin-Etsu Chemical Co Ltd

Smc CorpMitsubishi CorpNintendo Co Ltd

Eisai Co LtdSumitomo Corp

Canon IncJapan Airlines Co Ltd

1,077.00

4,854.00

930.10

426.30

4,440.00

1,320.00

293.90

1,218.50

2,915.00

2,567.00

27,595.00

2,584.50

1,351.50

4,341.00

780.70

373.60

709.60

1,724.50

455.80

458.50

460.60

16,300.00

16,730.00

4,783.00

6,646.00

1,786.50

7,621.00

3,355.00

1,580.00

1,222.00

6,031.00

1,106.50

1,388.00

1,754.00

6,461.00

11,425.00

1,004.00

3,547.00

2,703.50

2,935.00

393.40

1,979.50

2,713.00

4,838.00

2,459.00

2,325.00

4,470.00

8,353.00

0.00

880.40

1,615.00

3,236.00

2,962.00

3,690.00

325.30

4,133.00

393.90

1,355.00

533.70

5,808.00

149.20

361.10

2,518.50

3,512.00

2,795.00

2,711.50

1,026.50

1,309.50

3,278.00

69,420.00

7,855.00

1,232.00

2,295.50

5,934.00

25,140.00

1,786.50

14,475.00

5,934.00

1,026.00

2,906.00

3,318.00

3.81

1.53

2.28

3.85

2.23

6.28

2.12

3.53

1.59

1.72

0.51

5.51

2.97

-0.91

2.44

0.70

1.84

0.61

3.24

2.18

2.49

2.42

1.03

1.53

2.88

1.28

0.59

6.37

-0.06

3.17

-0.56

3.46

1.35

2.13

1.30

4.77

2.78

2.87

3.62

1.14

3.09

6.37

2.42

1.13

-0.79

2.29

2.03

2.97

0.00

0.74

0.31

1.00

4.83

2.41

3.24

-0.34

1.84

2.50

2.32

2.47

1.84

2.50

2.15

1.80

1.91

2.01

2.79

4.26

-0.18

2.71

3.30

2.33

2.89

1.87

2.49

3.39

4.63

2.99

2.70

1.57

1.78

4,409,600

1,560,700

15,105,900

34,689,000

2,405,600

6,178,200

12,311,000

5,957,000

11,994,300

5,160,000

790,700

3,093,200

3,739,300

3,046,500

7,931,000

11,219,200

5,303,000

3,387,900

11,277,700

74,196,800

5,549,500

1,070,600

283,900

1,190,700

1,026,200

3,125,800

804,400

4,510,000

2,701,900

6,988,400

2,258,500

7,118,400

13,848,500

4,063,200

789,500

1,219,000

3,253,800

2,192,700

1,518,300

2,041,500

17,103,800

6,131,200

2,421,900

5,603,900

2,282,300

4,402,000

2,969,000

1,758,300

-

6,193,000

12,424,700

4,139,700

13,245,700

1,535,000

14,890,000

5,271,100

6,400,000

3,931,400

7,379,000

5,759,800

183,232,700

36,669,300

2,612,700

4,233,100

7,860,900

3,462,000

4,322,000

8,002,100

1,306,800

182,000

1,558,800

5,101,600

2,426,800

1,192,400

168,000

4,948,400

660,600

1,211,200

4,549,000

6,071,800

1,431,100

TOKYO


Aluminum Corp Of China Ltd-HBank Of East Asia Ltd

Bank Of China Ltd-HBank Of Communications Co-H

Belle International HoldingsBoc Hong Kong Holdings Ltd

Cathay Pacific AirwaysCk Hutchison Holdings Ltd

China Coal Energy Co-HChina Construction Bank-H

China Life Insurance Co-HChina Merchants Hldgs Intl

China Mobile LtdChina Overseas Land & Invest

China Petroleum & Chemical-HChina Resources Beer Holdin

China Resources Land LtdChina Resources Power Holdin

China Shenhua Energy Co-HChina Unicom Hong Kong Ltd

Citic LtdClp Holdings Ltd

Cnooc LtdCosco Pacific Ltd

Esprit Holdings LtdFih Mobile Ltd

Hang Lung Properties LtdHang Seng Bank Ltd

Henderson Land Development

2.43

29.10

3.03

4.81

4.43

22.95

11.10

82.85

4.09

5.03

16.44

20.55

87.70

23.05

5.46

16.70

17.26

11.28

14.06

7.82

11.00

79.25

9.35

7.73

5.74

2.46

15.24

131.30

42.50

0.41

3.19

2.02

-4.56

3.50

1.10

2.59

1.04

0.74

1.62

0.98

1.48

2.57

0.22

2.25

0.00

0.82

2.55

2.03

0.64

0.36

3.59

1.96

0.91

1.59

-1.60

2.01

0.77

3.28

6,444,000

4,212,197

275,169,555

34,491,275

14,055,122

7,808,183

6,424,741

22,987,552

16,088,570

212,056,460

29,637,822

2,496,841

15,068,822

12,086,507

84,952,368

1,505,556

8,585,688

6,469,387

30,045,954

24,919,930

5,213,100

6,239,657

31,495,369

2,412,120

1,828,761

5,563,453

4,017,864

1,999,753

4,419,052

HONG KONG


Hong Kong & China GasHong Kong Exchanges & Clear

Hsbc Holdings PlcHutchison Whampoa Ltd

Ind & Comm Bk Of China-HLi & Fung Ltd

Mtr CorpNew World Development

Petrochina Co Ltd-HPing An Insurance Group Co-H

Power Assets Holdings LtdSino Land Co

Sun Hung Kai PropertiesSwire Pacific Ltd - Cl ATencent Holdings Ltd

Wharf Holdings Ltd

13.88

186.40

46.95

0.00

4.24

3.64

38.65

7.66

5.18

33.60

68.60

12.54

90.70

86.15

172.40

46.80

1.02

1.14

1.29

0.00

-3.85

1.68

1.44

1.59

2.37

0.75

1.40

2.96

3.01

1.65

1.11

1.85

11,500,505

6,758,311

55,071,490

-

370,796,234

40,652,815

3,301,628

9,581,887

47,634,944

27,794,607

8,820,323

6,313,133

4,858,688

879,876

13,552,935

5,752,843

HONG KONG


Zee Entertainment EnterpriseYes Bank Ltd

Wipro LtdVedanta Ltd

Ultratech Cement LtdTech Mahindra Ltd

Tata Steel LtdTata Power Co Ltd

Tata Motors LtdTata Consultancy Svcs Ltd

Sun Pharmaceutical IndusState Bank Of India

Reliance Industries LtdPunjab National Bank

Power Grid Corp Of India LtdOil & Natural Gas Corp Ltd

Ntpc LtdMaruti Suzuki India Ltd

Mahindra & Mahindra LtdLupin Ltd

Larsen & Toubro LtdKotak Mahindra Bank Ltd

Itc LtdInfosys Ltd

Indusind Bank LtdIdea Cellular Ltd

Icici Bank LtdHousing Development Finance

Hindustan Unilever LtdHindalco Industries Ltd

Hero Motocorp LtdHdfc Bank Limited

Hcl Technologies LtdGrasim Industries Ltd

Gail India LtdDr. Reddy’s Laboratories

Coal India LtdCipla Ltd

Cairn India LtdBosch Ltd

Bharti Airtel LtdBharat Petroleum Corp Ltd

Bharat Heavy ElectricalsBank Of Baroda

Bajaj Auto LtdAxis Bank Ltd

Asian Paints LtdAmbuja Cements Ltd

Adani Ports And Special EconAcc Ltd

444.95

1,072.70

554.55

127.35

3,395.25

504.95

313.60

72.65

447.25

2,502.90

770.30

217.20

966.90

104.40

159.25

214.75

152.10

4,131.25

1,417.75

1,532.90

1,483.20

752.80

366.30

1,176.85

1,101.30

105.00

236.65

1,248.55

883.80

119.95

3,156.55

1,168.30

728.45

4,473.65

385.25

3,274.70

311.00

502.45

137.30

22,686.20

356.20

1,054.35

121.95

153.90

2,645.85

517.85

994.20

255.90

203.05

1,598.95

1.84

0.26

2.24

3.41

-0.16

0.79

0.67

0.90

1.56

1.58

0.68

0.60

0.95

0.10

2.44

1.61

2.77

1.29

0.65

-0.76

0.62

1.28

-0.60

1.53

1.53

0.62

1.50

1.60

-0.44

1.61

4.51

0.12

2.14

0.33

2.22

0.05

-0.73

1.03

2.39

5.40

-0.25

0.25

2.52

-0.32

0.82

0.75

1.43

1.59

0.07

0.03

1,478,852

2,431,510

1,001,878

16,138,264

321,528

1,336,250

6,258,279

4,936,439

6,773,319

1,323,975

2,599,407

19,595,040

1,889,747

7,818,134

5,818,829

2,397,107

3,625,350

713,153

1,148,242

977,018

1,455,357

1,589,836

8,467,110

2,849,364

1,215,573

8,266,984

7,899,325

1,972,758

954,818

9,880,884

516,988

1,586,655

2,665,620

120,537

1,471,601

455,269

2,396,881

1,174,670

1,898,038

60,457

2,288,598

904,492

6,647,864

6,510,357

356,996

4,917,392

801,463

3,933,243

6,671,880

597,812

SENSEX


WORLD INDICESIndices Lt Price Change

GCC INDICESIndices Lt Price Change

Dow Jones Indus. AvgS&P 500 Index

Nasdaq Composite IndexS&P/Tsx Composite Index

Mexico Bolsa IndexBrazil Bovespa Stock Idx

Ftse 100 IndexCac 40 Index

Dax IndexIbex 35 Tr

Nikkei 225Japan Topix

Hang Seng IndexAll Ordinaries Indx

Nzx All IndexBse Sensex 30 Index

Nse S&P Cnx Nifty IndexStraits Times Index

Karachi All Share IndexJakarta Composite Index

17,636.33

2,064.07

4,769.00

14,057.23

45,398.20

51,162.75

6,360.06

4,195.32

9,612.27

8,105.30

15,566.83

1,247.69

20,436.12

5,221.01

1,287.73

26,740.39

8,204.00

2,792.73

25,298.80

4,980.11

+226.61

+27.98

+77.14

+214.54

+683.66

+1,156.19

+219.67

+106.47

+164.99

+270.30

+243.69

+23.07

+263.66

+41.36

+16.49

+215.84

+76.15

+36.20

+500.25

+97.93

Doha Securities MarketSaudi Tadawul

Kuwait Stocks ExchangeBahrain Stock Exchage

Oman Stock MarketAbudhabi Stock MarketDubai Financial Market

9,877.75

6,500.42

5,374.78

1,118.16

5,779.59

4,417.03

3,271.38

+9.81

+20.10

-0.43

+4.05

+18.27

+9.87

-12.54

“Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on this data.”

CURRENCIESDOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI

DINARKUWAITI

DINAR

A worker shelters from the rain as he passes the London Stock Exchange in the City of London. The FTSE 100 closed up 3.6% to 6,360.06 points yesterday.

Europe markets wipe out losses in global reboundAFPLondon

London share prices surged yes-terday, wiping clean post-Brex-it result losses, in the second

straight day of a global recovery fol-lowing a sharp sell-off sparked by Brit-ain’s vote to quit the EU.

London’s benchmark FTSE 100 closed well over 3% higher and above its June 23 closing level, with a weak-er British pound likely helping boost companies non-UK profi ts.

Paris and Frankfurt shares also pulled off strong increases, bouyed by a fi rmer Wall Street and Asian markets that earlier led the way on hopes that authorities will unveil fresh stimu-lus to counter the eff ects of Britain’s bombshell result.

However analysts warned of possi-ble further jitters on the markets, given the many unknowns still about Brit-ain’s path ahead as it handles its exit from the bloc and dealings with its EU partners.

“First the panic eff ect, then the re-bound.

That’s a well-known mechanism on fi nancial markets,” said Christopher Dembik, an economist at Saxo Banque in Paris.

“But we also know that, after the rebound, volatility can re-emerge,

and that is the main risk right now,” he said.

“The markets aren’t calm, we are in the eye of the storm,” said Adam Jepsen at Financialspreads, adding that “not a single issue” had been resolved.

“I will be surprised if the markets re-main calm for more than a day or two,” he said.

Symptomatic of Brexit’s still un-certain impact, British telecoms giant Vodafone warned that the future of its London-based headquarters was now in doubt.

Ahead of London’s close, Oanda’s Craig Erlam had highlighted that the FTSE was closing in on Thursday’s closing level, describing it as “quite extraordinary” in view of Friday’s ini-tial sell-off .

“The weakness in the pound will be helping considerably given how much of the FTSE’s profi ts are generated outside of the UK,” he said in a note to clients.

The British pound rose to $1.3501, after plunging to Monday’s 31-year-low of $1.3121.

Moneycorp dealers said sterling did “at last seem to have exhausted the supply of aggressive sellers”.

European debt markets also showed signs of calming down.

Money fl owed out of safe-haven German government bonds into sover-eign bonds on the eurozone’s southern

periphery, with Spanish and Italian bond yields easing and those in Ger-many edging higher.

“The excesses seen after Brexit are slowly being corrected,” analysts at BNP Paribas said, adding that the German 10-year government yield, although still negative, could be head-ing towards -0.05 % from yesterday’s -0.10 %.

Asia’s gains built on the previ-ous day’s advance, after South Ko-rea unveiled a $17bn plan to support its already fragile economy and news emerged that Japan was considering a similar move.

Stephen Innes, senior trader at OANDA Asia Pacifi c, warned: “This relative calm is unnerving, given how fragile investor sentiment is, and the likelihood of renewed (pound) volatil-ity.

“As a result, FX markets should re-main a hot spot for the foreseeable fu-ture.

Liquidity is gradually improving and appears to have weathered the initial Brexit sell-off .”

Attention is now on how Britain ne-gotiates its way out of the EU after four decades of partnership.

In London the — FTSE 100 up 3.6 % at 6,360.06 points; Frankfurt — DAX up 1.75% at 9,612.27 points and Paris — CAC up 2.6% at 4,195.32 points at the close yesterday.

BUSINESS13Gulf Times


Alcoa spins off smelting business; aero, auto unit now ‘Arconic’ReutersChicago

Metals company Alcoa said yesterday that

its planned split will consist of a spinoff of

its traditional upstream smelting business,

and that up to 19.9% of the new company

will be owned by its value-added business

that serves the aerospace and automotive

industries.

The company to be spun off will be

named Alcoa Corp and the value-added

business Arconic, Alcoa said in a regula-

tory filing. The split is due to take place in

the second half of this year.

The spinoff comes at a time when

aluminium prices have hovered around

historic lows.

Many producers have accused China

of selling metal into oversupplied global

markets below market rates.

China denies this and says excess

capacity is a global issue.

Amid that downturn, Alcoa has been

reducing its refining and smelting capacity

and has focused on more advanced aero-

space and automotive products.

In recent months the company has

announced deals to provide a light but

tough aluminium alloy for Ford Motor Co’s

high-selling F-150 pickup and aerospace

contracts including titanium seat track

assemblies for Boeing Co’s 737 MAX, 777X

and 787 Dreamliner.

Australia’s Alumina has raised concerns

over the impact of Alcoa’s planned split on

the pair’s bauxite and alumina production

joint venture, Alcoa Worldwide Alumina

and Chemicals (AWAC).

In May, Alcoa filed a lawsuit seeking a

declaration that Alumina has no right to

block the plan. In 2015, Alcoa’s traditional

upstream business had pro forma revenue

of $11.2bn, while its value-added business

had revenue of $12.5bn, the company said.

As part of the split, the new upstream

business will have around $236mn in

outstanding long-term debt.

The new company will raise approxi-

mately $1bn in new debt and provide for

up to $1.5bn in funding through a revolv-

ing credit facility.

Alcoa’s total debt in the first quarter

was around $9bn, so the lion’s share will

remain with Arconic, the larger of the

two companies post-split. On a confer-

ence call with analysts, Alcoa Chief Ex-

ecutive Klaus Kleinfeld said the pension

obligations of the new upstream busi-

ness as of the end of 2015 will be around

$2.6bn, while the value-added business

Arconic will have pension obligations of

around $3bn.

The company reiterated that Arconic

will be an investment-grade entity, while

the new Alcoa will be a “strong non-invest-

ment grade” firm.

In early trading, Alcoa shares were up

1.9% at $9.51.Kleinfeld: New initiative.

BUSINESS


Sensex climbs to one week high; rupee strengthensBloombergMumbai

Indian stocks advanced to a one-week high after the government approved an increase in salaries for

civil servants, spurring optimism the payout will bolster consumption that has been the key driver of the nation’s world-beating growth.

Automakers Hero MotoCorp and Tata Motors were the best performers on the S&P BSE Sensex, while Asian Paints climbed the most in a month. Tata Metaliks rose the most in two weeks, and state-run iron ore miner NMDC climbed to a seven-week high after the government approved a new mineral exploration policy. Property developer DLF jumped the most in four months after its billionaire founder brought shares.

The Sensex rose 0.8% at the close, paring its loss since the Brexit vote to

less than 1%. The stimulus from higher government wages comes at a time when a revival in company earnings, improving economic data and pros-pects of above-normal rainfall have put the gauge on course for its fi rst quarterly advance in more than a year.

“Brexit is getting priced in with each passing day,” Ashish Kukreja, chief ex-ecutive offi cer at Mumbai-based Craft Financial Advisors, said by phone from Mumbai. “The focus is now on the monsoon, June-quarter earnings, the pay commission’s award and the mon-soon session of Parliament where the GST bill is likely to be cleared. We are very positive on the markets.”

The Sensex also tracked global eq-uities, which rose for a second day amid speculation that policy makers will mitigate the damage of the Brexit vote, including a pause in the Federal Reserve’s tightening cycle. The MSCI All-Country World Index rose 1% in London and the Stoxx Europe 600 In-

dex climbed 2.4%. The equity gauge has recouped 5% after tumbling 11% over two days after the vote.

The government would seek to pass a constitutional amendment authoris-ing the goods-and-services tax, known

as GST, in the monsoon session of par-liament starting July 18, Parliamentary Aff airs Minister Venkaiah Naidu said in New Delhi. The tax is the nation’s big-gest economic reforms in decades.

Hero MotoCorp jumped 4.5%, the

most since March 2, ending four days of losses. Maruti Suzuki India added 1.3% in a second day of advance and Asian Paints gained the most since June 1.

Tata Metaliks surged 5%, taking this month’s rally to 49%. NMDC added 2.5%. Sandur Manganese & Iron Ores advanced the most in a month and Ashapura Minechem surged 8.2%, the most in four months.

Meanwhile the rupee yesterday logged its biggest single-session gain against the US dollar in over three weeks, as a rebound in global equities and currencies buoyed sentiment.

The currency closed at 67.69, up 0.40% from its previous close of 67.95, posting its maximum gain since June 6. The local currency opened at 67.80 a dollar and touched a high of 67.61, a level last seen on June 23.

Asian currencies extended the rally post-Brexit vote battering, with trad-ers pushing back expectations for any near-term rate increase by the Fed.

South Korean won rose 0.96%, Ma-laysian ringgit 0.91%, Singapore dol-lar 0.37%, China off shore 0.36%, In-donesian rupiah 0.24%, Taiwan dollar 0.22%, Japanese yen 0.1%, Philippines peso 0.1% and Thai baht added 0.06%.

The government will issue fi scal defi cit data for the month of May on June 30. Fiscal defi cit in April came in at Rs1.37 lakh crore, which is 25.7% of the Budget estimate for 2016-17.

So far this year, the rupee is down 2.26%, while foreign institutional inves-tors (FIIs) have bought $2.75bn in equity and sold $1.98bn in debt markets.The 10-year bond yield has fallen in 10 out of 12 trading sessions. yesterday, the yield closed at seven-week low of 7.444%—a level last seen on 12 May—compared with Tuesday’s close of 7.452%.

The dollar index, which measures the US currency’s strength against ma-jor currencies, was trading at 95.881, down 0.38% from its previous close of 96.245.

Asia markets build on gains as stimulus talk swirls

AFPHong Kong

Asian markets rose again yesterday on hopes that authorities will unveil

fresh stimulus to counter the ef-fects of Britain’s shock vote to leave the European Union.

After Friday’s battering, re-gional investors have this week led a return to global equities and higher-yielding currencies.

However, analysts warned there would likely be a period of volatility as Britain and its EU partners try to hammer out an exit agreement.

Yesterday’s gains built on the previous day’s advance after South Korea unveiled a $17bn plan to support its already frag-ile economy and news emerged that Japan was considering a similar move.

Before the Tokyo bourse opened, Prime Minister Shin-zo Abe, Finance Minister Taro Aso and Bank of Japan chief Haruhiko Kuroda held talks on containing the Brexit crisis.

Japan’s Nikkei ended 1.6% higher and Shanghai gained 0.7% by the close.

Hong Kong fi nished up 1.3% and Sydney was 0.8% higher.

Seoul, Singapore, Wellington, Manila, and Jakarta each put on more than 1%.

The advances followed sharp gains on Tuesday in New York and Europe.

And the British pound rose to $1.3390 from $1.3340, after plunging to Monday’s 31-year-low of $1.3121.

In a sign that traders have calmed, higher-yielding and riskier currencies mostly rose — Malaysia’s ringgit gained 0.7% and the South Korean won was 1% higher, while the Indonesian rupiah and Indian rupee also strengthened.

Oil also built on the previous day’s strong gains, with West Texas Intermediate gaining 0.9% and Brent 0.7%.

Stephen Innes, senior trader at OANDA Asia Pacifi c, said in a note: “The fi scal stimulus ru-mours saw risk appetite back on cue.” But he warned: “This relative calm is unnerving, given how fragile investor sentiment is, and the likelihood of renewed (pound) volatility.

As a result, FX markets should remain a hot spot for the fore-seeable future.

Liquidity is gradually improv-ing and appears to have weath-ered the initial Brexit sell-off .”

Attention is now on how Brit-ain negotiates its way out of the EU after four decades of part-nership.

Adding to the uncertainty is the fact Prime Minister David Cameron will stand down in the autumn, leaving his successor to hammer out the deal.

Meeting in Brussels, impatient EU leaders on Tuesday called on Cameron to speed up the split and warned Britain cannot ex-pect special treatment outside the bloc.

Cameron said he wants the break to be “as constructive as possible” and seeks the “closest possible relationship” with Eu-rope afterwards.

But German Chancellor An-gela Merkel warned he could not “cherry-pick” in the exit nego-tiations — and there would be a price for Britain to pay.

Emerging stocks, currencies rise for second straight dayReutersLondon

Emerging stocks and currencies rose for the second straight day yesterday, clawing back more of the recent Brexit-fuelled losses, though shares linked to Turkish tourism fell sharply after a deadly attack at Istanbul’s main airport.World stocks have rebounded slightly after huge losses on Friday and Monday due to Britain’s vote to leave the European Union, as the heightened uncertainty is now seen dissuading the US Federal Reserve from a July rate hike and could even bring more stimulus from eurozone and Japanese policymakers.As the dollar retreated further against a basket of major

currencies, emerging assets firmed, with MSCI’s main EM equity index up for the second day in a row after losing 6% on Friday and Monday. The positive momentum was dampened by the Chinese yuan lingering at 5-1/2 year lows against the dollar and also the suicide attack which killed 36 people at Istanbul airport, the world’s third-largest and a major tourism hub.The attack is likely to further dent Turkey’s struggling tourism industry, which saw foreign visitors drop more than a third in May for its biggest fall in 22 years.Shares in airport operator TAV fell more than 3% while Pegasus Airlines and Turkish Airlines fell 1.5% and 2.5% respectively.The Istanbul index lost 0.2% though the lira managed to

rise 0.5% against the dollar.“On the economic side this will again raise concerns about the tourism sector which is struggling, partly due to security concerns and partly because of Russia,” said William Jackson at Capital Economics, referring to Russian sanctions on Turkey that damaged trade and tourism.“But the market impact overall is not that significant as there is a general improvement in investor sentiment and some of the Brexit turmoil seems to be fading a bit.”Most other markets rallied, with the South African rand and Korean rising about 1% to lead currency gains.The rouble however pulled back half a per cent and central European currencies stayed flat versus the euro.

While Warsaw stocks were flat, those in Budapest and Prague rose more than half a per cent. These markets are likely to be most aff ected by Brexit due to their reliance on remittances and European Union funds, and many banks have cut their forecasts for regional currencies.Jackson said he would likely do the same but added:“The big picture remains that these will still be the best performing economies in Europe over the next few years.”Nigeria’s naira firmed in the non-deliverable forwards (NDF) markets, with three-month contracts trading around 289 per dollar, the strongest in almost two weeks.The currency closed on Tuesday trading at 282.50 per dollar after dollar sales by the central bank.

China’s debt burden limitsoverseas interest in sharesBloombergShanghai

China’s investors want out, and foreigners aren’t showing much appetite to jump in.

A programme allowing some domes-tic and Hong Kong mutual funds to be sold on either side of the border has seen about 37 times more money leave China than enter so far this year. In addition, a link between the Shanghai and Hong Kong stock exchanges has to date enabled southbound outfl ows that are 39% more than the amount that’s moved north.

In the fi rst quarter, Chinese resi-dents also poured a record HK$13.2bn ($1.7bn) into Hong Kong’s insurance products, a popular way to move funds off shore.

As China opens the door wider to foreign funds, concern about the coun-try’s slowing economy and debt burden is limiting overseas interest in its stocks and fi xed-income assets.

Analysts say that while fl ows through existing programmes remain lopsided, policy makers will be wary of further loosening controls on how much do-mestic fund managers can invest off -shore. The yuan is set for a third annual loss versus the dollar, even after central bank support that’s led to an $800bn decline in the nation’s foreign-ex-change reserves over the past two years.

“The eff orts to encourage infl ows and contain outfl ows will probably to be in place until the end of this year unless the trend of capital outfl ows re-verses,” said Larry Hu, head of China economics at Macquarie Securities in Hong Kong. “This may hold up capital-account opening, but at this time the Chinese authorities are choosing to pay more attention to capital fl ows, the ex-change rate and stability.”

The Qualifi ed Domestic Institutional Investors program that allows local fund managers to raise money onshore for off shore investments last had new quota approved in March 2015. Trial programmes for QDII2, which would allow individuals to buy overseas prop-erty and securities directly, have yet to get off the ground three years after be-ing reported in offi cial media.

A proposed link connecting the Shenzhen and Hong Kong stock ex-changes also has still to start despite

preparations having been completed in July 2015.

China is pushing for domestic stocks and bonds to be included in global benchmarks to encourage greater for-eign ownership of its securities. It also this month granted US investors a 250bn yuan ($38bn) quota to invest in onshore markets, the second-largest allocation under its Renminbi Qualifi ed Foreign Institutional Investor program.

“Structurally, Chinese residents,

who didn’t have channels to invest off -shore, have the need to diversify their assets, while foreign investors, who didn’t have access to enter the market, need to increase their allocations to the world’s second-largest economy,” said Aidan Yao, Hong Kong-based senior economist at AXA Investment Asia, which had $759bn of assets un-der management at the end of March. “However, cyclical factors are deter-ring foreign investors from aggressively

allocating funds to onshore assets as China’s economic prospects don’t look strong. If the outbound programs open now, domestic investors would have strong appetite to invest overseas.”

QFII and RQFII quotas allowing in-ward investment have increased 29% to $157bn since March 2015, while QDII allocations to send money abroad were held at $89.99bn.

Local asset managers including Bosera Asset Management Co and GF

Fund Management Co have halted sub-scriptions to some of their mutual fund products after exhausting their limits.

The yuan is trading near a fi ve-year low of 6.6585 per dollar and is forecast to weaken to 6.70 by year-end, based on the median estimate in a Bloomb-erg survey. The nation’s 10-year bond yield of 2.87% is the highest on off er in the world’s fi ve biggest economies and compares with 1.46% in the US and negative rates in Japan and Ger-many. The Shanghai Composite Index of shares has lost 17% this year, mak-ing it one of the fi ve worst-performing markets globally.

“Without government restrictions, I suspect portfolio outfl ows will ex-ceed infl ows in the next couple years,” said Liao Qun, Hong Kong-based chief economist at Citic Bank International. “With the policy guidance, the gap may narrow, but to completely reverse the trend, it’d still be diffi cult.”

The net fl ow of money to Hong Kong from China under the mutual fund rec-ognition program amounted to 2.07bn yuan in the fi rst fi ve months of this year, while fl ows in the opposite direc-tion were only 55.9mn yuan, SAFE data show. Local residents bought 186bn yuan of Hong Kong equities via the existing stock-exchange link, versus 133.9bn yuan of mainland stocks pur-chased from Hong Kong, data compiled by Bloomberg show.

The remaining southbound quota may be depleted by July based on the current pace of use, according to Daiwa Capital Markets Hong Kong. There may be even stronger southbound infl ows in coming weeks as Chinese inves-tors start to compete for the remaining quota, Chang Yuliang, Hong Kong-based strategist at Deutsche Bank, wrote in a note.

China’s foreign-exchange reserves fell to $3.19tn last month, the lowest level since 2011, offi cial data show.

“While the government has been taking measures to stimulate infl ows, a relatively weak economy seems to have yet to persuade foreign investors to aggressively allocate into onshore markets,” said Xia Le, chief economist for Asia at Banco Bilbao Vizcaya Argen-taria in Hong Kong.

“Money fl ows in both ways will in-crease over the years, but the net eff ect will probably be outbound rather than inbound in the near future.”

The rupee closed at 67.69 yesterday, up 0.40% from its previous close of 67.95, posting its maximum gain since June 6

A woman walks past a banner reading ‘First Time Ever, Stock-Connect China’ during the launch ceremony of the Shanghai-Hong Kong Stock Connect at the Hong Kong Stock Exchange (file). The link between the Shanghai and Hong Kong stock exchanges has to date enabled southbound outflows that are 39% more than the amount that’s moved north.

BUSINESS15Gulf Times


Brexit economic fallout worries Americans, shows pollBloombergChicago

More than a third of US voters see the UK’s decision to leave the Europe-an Union as damaging to the American economy and four in 10 of those who have stock market investments say it will hurt their portfolios.

A Bloomberg/Morning Consult na-tional poll on fallout from the Brexit vote on the western side of the Atlantic also shows deep concern about dam-age to the global economy and a gen-eral souring on stocks of companies outside the US.

Despite evidence of underlying anx-iety about it, the British action doesn’t seem to be weighing too heavily on American consumers so far, with 50% of voters saying it will have no impact

on their purchasing decisions. About a fi fth say it will have a minor infl uence, while a tenth say it’s likely to aff ect their spending in a major way.

The online survey found most Americans are following Brexit news, with 28% of voters saying they’ve read, seen or heard “a lot” about the decision and another 36% answering “some” to that question.

“With fi nancial markets taking a dive worldwide, US voters by wide margins say the United Kingdom’s de-cision will hurt the US economy, the UK economy and even the global econ-omy,” said Kyle Dropp, co-founder and chief research offi cer at Morning Con-sult, a Washington-based media and technology company.

A majority of US voters - 57% - say they don’t expect the UK verdict will infl uence their vote in the presidential

election. For the roughly quarter who say it will, almost half say it will make them more likely to support Democrat Hillary Clinton, while 35% say Repub-lican Donald Trump.

Among US voters with investments in the stock market, 41% say they think the Brexit decision will hurt their port-folios, while 17% see it as a positive.

Many in that pool of people - voters with investments who see the outcome having either good or bad consequenc-es - are considering increasing their cash or gold positions. Both are tradi-tional safe havens amid uncertainty.

Four in 10 of those investors say they’re inclined to buy more in gold, while a third say they’re likely to hold larger cash positions. After closing Monday at its highest level since July 2014, gold slipped lower on Tuesday as global markets recovered some of the

ground they had lost in the previous two trading sessions.

Roughly half of investors who think Brexit will have an impact on their portfolios - 51% - say they’re less likely to invest in international stock mar-kets. Views on US stock markets are more mixed, with a third saying they’ll invest less in that asset class, 30% say-ing more and 29% saying about the same.

The poll was conducted on Friday through Monday, starting the day the outcome of the vote became known and as the US and global stock markets recorded signifi cant drops.

The survey used a nationally repre-sentative opt-in panel of 2,003 regis-tered voters, including 898 with mon-ey in the stock market through direct investment or retirement accounts. The margin of error is plus or minus

2.2 percentage points on the full sam-ple, and plus or minus 3.3 percentage points for investors.

Those with higher levels of educa-tion and incomes are more likely to say that the Brexit vote will hurt the US economy. Democrats are also more likely than Republicans or independ-ents to hold that view.

Opinions are mixed on whether the decision will strengthen or weaken the “special relationship” that the UK and the US have traditionally enjoyed. Just less than a third say it will strengthen it, while 26% say it will weaken it and 42% said they don’t yet know or have no opinion.

America’s voters generally have a favourable view of Britain, with 62% saying they have a very or somewhat favourable view of the island nation. That’s a larger proportion than the

51% who say that of Germany, another close American ally.

The European Union is viewed fa-vourably by 39% of voters, with 29% viewing it unfavourably and 31% hav-ing no opinion. While almost two-thirds of US voters are at least casually following Brexit news, understanding of the issue and election’s outcome aren’t universal.

Two-thirds of those in the survey correctly selected that the UK had vot-ed to leave the European Union, while 7% thought the outcome was the op-posite of what happened and 26% said they didn’t know.

The level of awareness jumped in the second half of the survey period. Dur-ing Friday and Saturday, 57% said they were at least casually following the situation, while that number jumped to 68% by Sunday and Monday.

Consumer spending in US rises 0.4% in MayBloombergWashington

Consumer purchases moderated last month after the biggest advance since August 2009 as American households realigned outlays with slower income

growth.Personal spending climbed 0.4% in May after a 1.1% jump

a month earlier that was more than initially estimated, Com-merce Department fi gures showed yesterday in Washington. Incomes climbed a less-than-forecast 0.2%.

Even with the smaller advance in spending, steady job growth and a nascent pickup in wages will probably bolster household purchases after a fi rst-quarter slowdown. With rising global uncertainty expected to stymie business in-vestment, a resilient consumer will needed to keep the US’s growth prospects intact.

“The consumer seems reasonably well supported,” James Sweeney, chief economist at Credit Suisse Securities USA in New York, said before the report. That’s primarily because “the labour market has tightened, and the labour market is mostly driven by domestic factors.”

The increase in May spending matched the Bloomberg sur-vey median. Projections ranged from gains of 0.2% to 0.5% after an initially reported 1% April increase.

Incomes were forecast to climb 0.3%. April’s income read-ing was revised up to a 0.5% gain from a previously reported 0.4% advance.

After adjusting for infl ation, which generates the fi gures used to calculate gross domestic product, purchases rose 0.3% in May after a 0.8% increase in April.

Purchases of durable goods - those meant to last more than three years, such as automobiles - climbed 0.6% after adjust-ing for infl ation following a 2.6% April advance. Spending on non-durable goods rose 0.5%, while outlays for services were up 0.1%.

The report showed the price index tied to consumer spend-ing increased 0.2% in May. From a year earlier, the gauge was up 0.9%. This infl ation measure is preferred by Federal Re-serve policy makers and hasn’t met their target in four years.

ECB is in no rush to easepolicy after Brexit voteReutersSintra, Portugal

The European Central Bank is in no rush to ease monetary policy in re-sponse to Britain’s vote to leave the

European Union, taking comfort in a calm-er-than-feared market reaction, bank offi -cials said yesterday.

The Brexit vote has sunk bank shares, weakened the euro and will lower growth, raising market pressure on the ECB to step in, adding more stimulus.

But conversations and public comments from over a dozen offi cials familiar with the ECB’s thinking showed that the bank has found some reassurance in the market rebound this week and was happy to take a wait-and-see stance, given the lack of hard evidence about the actual impact of Brexit.

Indeed, ECB Vice President Vitor Con-stancio said that markets were already rebounding, banks suff ered no liquidity shortage and economic fundamentals were broadly unchanged, so the ECB needed to wait to assess if any response was needed.

Emergency swap lines designed to pro-

vide euros to UK banks in case of stress had not been activated and the market turmoil refl ects lower growth prospects, not panic, other ECB sources, who asked not to be named, said.

“This is a political problem not a mon-etary phenomenon,” one of the sources said.”We could act, we have the tools, but that would not solve the broader problem and for now, every estimate about the ac-tual impact of Brexit is nothing but guess-work.”

If markets continued in the same, calm vein in the run up to the ECB’s July 21 policy meeting, the most to expect could be verbal reassurance that the bank stands ready to do more if needed, the offi cials said.

But a more severe economic downturn would not be for the ECB to handle, requir-ing others to step in, Constancio warned.

“In monetary policy, we still have in-struments,” Constancio said.”But it’s true that we have been using a lot of those in-struments, we are aware and everyone is aware of that.”

“So, if the consequences would be more severe in economic terms what could be done, if anything? But it’s with other au-

thorities, it’s not then with the ECB,” he added. For now, the offi cials expressed re-lief at the sanguine reaction of investors in sovereign debt.

Southern Europe’s borrowing costs fell sharply for a third straight day and French bond yields hit record lows yesterday.

The calm on the sovereign bond market marked a sharp contrast to the 2010-12 debt crisis, when a ‘doom loop’ between indebted governments and their main creditors, banks, threatened the euro’s very existence, the sources noted.

“Markets priced in a lower growth path, both for the eurozone and the UK,” one source said.”It seems quite realistic now and I don’t see signifi cant overreaction.”

Still, this line of thinking may put the ECB on a collision course with markets, which have rebounded at least partly in the hope that the ECB and the Bank of England would step in with more stimulus.

Investors now fully price in a rate cut in Britain and the eurozone by the end of this year. The ECB cut rates twice since Decem-ber and is already buying €80bn ($88.71bn) worth of assets, mainly eurozone govern-ment bonds, every month in a bid to boost

infl ation. These purchases helped soothe market nerves when a Greek referendum on the terms of its bailout agreement with creditors almost pushed the country out of the eurozone last summer and the reaction to the UK vote was seemingly following the same path.

The sources said that any further move by the ECB to support markets, while pos-sible in theory, would merely act as stop-gap and do nothing to address fundamen-tal citizen and investor concern about Europe’s political cohesion and economic strategy.

In fact, a new interest rate cut could even exacerbate problems at eurozone banks, which have complained that low lending rates and a charge on the money they park at the ECB were squeezing their margins, some of the sources said.

There was agreement among the offi -cials who spoke to Reuters that the broad selloff in banking shares cast the sector as the weakest link in the European economy, with its meagre profi ts and, in countries such as Italy, heavy burden of bad loans making it vulnerable to any economic downturn.

Canada’s CIBC to buy PrivateBancorp in $3.8bn dealCanadian banks look outside of Canada for growth; talks over deal took place over 6-8 months; CIBC says core capital to remain over 10%; CIBC shares down 3%, PrivateBancorp up 22%

ReutersToronto

Canadian Imperial Bank of Com-merce (CIBC) said it will buy Chicago-based PrivateBancorp

in a $3.8bn cash-and-share deal, its biggest ever acquisition and a long-awaited expansion in US wealth man-agement.

CIBC has been in talks with po-tential US targets for some time as it looked to expand its wealth manage-ment business.

The bank sees the sector as a growth area that could help off set sluggish do-

mestic growth and a low-interest-rate environment.

Some investors are also keen for Ca-nadian banks to lessen their depend-ence on a domestic market that has been hurt by the prolonged slump in oil prices.

“What we’re trying to achieve for our shareholders and for our clients is to have a business with a more diversi-fi ed earnings stream than just relying largely on the Canadian market,” CIBC Chief Executive Offi cer Victor Dodig said on a conference call.

Dodig said the combination with PrivateBancorp will enable CIBC’s US banking business to contribute more than 10% of the bank’s net income over time, double the 5% the US market now contributes.

Chief Financial Offi cer Kevin Glass said the deal would not reduce the bank’s investment in Canada or its tar-get to maintain its dividend payout at

the top end of a target range of between 40 to 50% of earnings.

He also said that, after closing the deal, CIBC’s core tier 1 capital ratio, a key measure of its fi nancial strength, would remain above 10%.

CIBC’s stock was down 3.1% in early trade, while shares in PrivateBancorp were up 22.4% to $43.99, below the $47 dollar value of the deal based on Monday’s closing CIBC share price.

This refl ected the market’s expec-tation that the price of CIBC shares would fall following the deal, given the strain it puts on CIBC’s capital strength and earnings in the short term.

“The acquisition is sizeable but the bank has been quite clear with its in-tentions and despite being somewhat pricey and likely near-term dilutive to earnings it should not be shocking to the market,” Barclays analyst John Aiken wrote in a research note.

David Neuhauser, managing direc-

tor at Livermore Partners, which owns shares of PrivateBancorp, said it was a good deal for the US bank.

“PrivateBancorp was reaching an infl ection point where it was going to be harder for them to continue to grow their assets in the US unless they were on the acquisition trail.

It was ripe for consolidation,” he said. Barry Schwartz, portfolio man-ager at Baskin Financial Services, said Canadian banks need to reduce expo-sure to the Canadian economy and may have had to pay a full price to do that.

“CIBC had no choice.They are looking for growth and

growth doesn’t come cheap,” he said.Dodig said he had been working on

the deal with his counterpart at Pri-vateBancorp, Larry Richman, for six to eight months.

Richman will remain CEO of Pri-vateBancorp and become head of CI-BC’s US operations.

A man walks through the lobby of Canadian Imperial Bank of Commerce headquarters in Toronto. The CIBC said it will buy PrivateBancorp in a $3.8bn cash-and-share deal, its biggest ever acquisition and a long-awaited expansion in US wealth management.

The European Central Bank headquarters is seen in Frankfurt. The ECB is in no rush to ease monetary policy in response to Britain’s vote to leave the European Union, taking comfort in a calmer-than-feared market reaction, bank off icials said yesterday.

Lloyds to axe 640 jobs in cost-cutting drive

Lloyds Banking Group plans

to axe about 640 jobs, sourc-

es close to the matter said

yesterday, as Britain’s largest

mortgage lender continues to

scale back its branch network

and workforce.

All aff ected employees

work in information technol-

ogy and back-off ice roles and

are being told of the decision

yesterday, the sources said on

condition of anonymity be-

cause they are not authorised

to discuss the plans.

Lloyds, rescued in a

£20.5bn ($27.4bn) taxpayer

bailout during the financial

crisis, is in the midst of major

restructuring as part of an

aggressive cost-cutting pro-

gramme.

“The continuation of

the bank’s major job loss

programme will bring disap-

pointment as staff feel they

have already faced two years

of endless workforce cuts,”

said Rob MacGregor, national

off icer at the Unite union.

A statement from Lloyds

said there will be a net reduc-

tion of 525 jobs when newly

created roles are included.

The bank also said it is clos-

ing 23 branches by October

because customers increas-

ingly bank online and more

functions are automated.

The bank, more than two

thirds of the way through

three-year plan to cut about

a tenth of its workforce,

could now consider deeper

cuts than originally targeted

because of the programme’s

swift progress, two separate

sources said.

The latest cuts coincide

with the biggest upheaval

for British banks since the

financial crisis.


BUSINESSGULF TIMES

The divergent summer of 2016By Salman Gulzar

As Europe tries to contain populist movement’s

within its member states in the wake of Brexit, the

UK parliament will be trying to decipher how they

will manage the mandate handed down to them

from the referendum which has split the country

more than the continent. The Conservative Party

will need to clear its thoughts prior to discussion

in the parliament as the result of the referendum

does not reflect the manifesto of any political party

but a group of politicians from multiple camps. The

situation UK finds itself in is their own making and

it highlights an important lesson in statesmanship;

matters of such national importance should not be

handed down to public rhetoric.

Oil industry in the meantime has continued its

recovery on the side. There seems to have been

method to the madness when Saudi Arabia claimed

that oil production will continue to be the right

of countries having the lowest cost base. The di-

chotomy Opec faces within its ranks is very diff icult

to manage and the disparity between oil producers

is getting wider at the prevalent oil prices. Brexit will

pose interesting challenges as US dollar strength-

ens and pushes commodity prices down.

The yellow brick road post-BrexitHer Majesty’s Treasury had identified three

detrimental possibilities citing contraction of

economy ranging from 3.4% to 9.5% if Brexit was to

become a reality. There was a flurry of diplomatic

missions to London highlighting that they would

be better off as part of the larger Union than being

alone, however, the vote on Friday demonstrated

that the people of the Island were determined to

march ahead without the larger economic bloc and

potentially also without Scotland, if Edinburgh also

holds a plebiscite and gets unexpected results.

As a consequence of the vote, 10 Downing Street

saw the prime minister resign, The FTSE 100 fell

8%, a big sell-off of bank shares caused key banks

to lose more than 30% of their market cap; GBP fell

more than 10% to levels not seen since 1985. Bank

of England had to ensure market stability allocating

GBP250bn of extra liquidity to support the banking

sector. The remaining 27 members of the European

Union realised that contagion populist movements in

France and the Netherlands could become a reality.

The referendum in Britain has given a desired

direction by the people; it is up to the British parlia-

ment to chart the road map to enable this. While no

precedence exists, EU exit is unlikely to be an auto-

mated process; instead it will be a demonstration of

complex diplomatic manoeuvring between Britain

and the 27 EU states. Under article 50 of the Treaty

of European Union, UK has to notify the European

Council, which will be done post deliberations in a

divided and confused Conservative Party who is

not sure of the stance it needs to take in the UK par-

liament. Once this is done and UK has decided how

to manage its European neighbourhood, its allies

in Asia, Africa, Americas, Australia and Middle East;

UK will have two years to secure 20 of the 27 votes

to exit eurozone. The impact of Brexit therefore on

the remaining world will depend on negotiations

the off ice at 10 Downing Street can get done with its

neighbours and global allies.

Oil, convergence of divergenceAcross from the troubled Continent in the mean-

time, Opec courts countries with weak economic

fundamentals even when oil was trading at USD

100 levels; with prices ranging between $35 and

$50, this fragility has been amplified. The current

range of oil price is in a comfort zone, it is not high

enough for the weak economies in Opec to enable

an attempt to rescue their fragile economies nor

is it low enough for the world to take any dramatic

steps.

In order to reach the current levels, production

cuts were an essential move, which occurred in May

2016 not by Opec design but by chance. Combined

oil production disruption was estimated at 3.6mn

barrels a day. Venezuela, struggling with a serious

financial crisis that includes commodity shortages

and power cuts; Nigeria halved its production due

to militancy, Iraq facing a never ending political and

security vacuum and Algeria managing reduced oil

output. Outside of Opec, Canada has also recorded

decline in oil production due to wild fires in Alberta.

The oil market however benefited from this

curtailment. This adversity of Opec’s ‘Feeble 5’ is

advantageous for demand and supply of overall oil

industry as it takes away part of the glut without

any Opec action.

Brexit and the commotion around it will strength-

en USD and weaken commodities especially oil

and we will see correction in the coming weeks as

currencies weaken against the green back.

Brexit courtship with GCCOil producers are still reeling under pressure

from budgets that were tested with low oil prices

and liquidity squeeze in the GCC banking sector.

Current oil prices are better than the start of the

year; however, the oil economies are far from being

out of the woods. Brexit has further compounded

matters with suppression of revenue streams from

over USD 200B worth of real estate assets owned

by GCC in UK. GBP weakness and S&P downgrade

of UK will continue to deteriorate yields. In addition,

property valuations are also expected to see a

correction between 7% and 10% which will erode

net worth over and above GBP weakness. Overall

therefore, revenue streams from hydrocarbons and

investments will come under pressure in 2016 ow-

ing to USD strength.

The uncertainty that has been caused by this

referendum will settle soon with the exception of

Federal Reserve and their desire to raise inter-

est rates. It is likely, with Brexit in view; rate hikes

will get stalled for a longer time, with a robust

and strong pipeline for borrowing planned from

the GCC; the sovereign and large rated corporate

issuances will greatly benefit from suppressed

interest rates and availability of term liquidity in

the US and Europe. There will be a good time to tap

these markets soon and bring home much needed

liquidity to the corporates and sovereigns in the

region. Valuation correction will also provide very

interesting opportunities in the UK, it will remain

to be seen how the GCC investors look at Britain

without Europe and London without its status as a

global financial hub.

Salman Gulzar is head of corporate banking at

Mashreq Qatar.

Ooredoo and QC sign deal to boostbusiness growthOoredoo and Qatar Cham-

ber yesterday signed a major agreement that

will see the two organisations cooperate and work together to “better represent” Qatar’s busi-ness community and support the Qatar National Vision 2030.

The agreement was signed by Ooredoo Qatar Chief Ex-ecutive Offi cer Yousuf Abdulla al-Kubaisi and Qatar Chamber Director General Saleh Hamad al-Sharqi at a ceremony held at the Ooredoo headquarters yes-terday.

Through the agreement, Ooredoo and the Qatar Chamber will coordinate a series of initia-tives in Qatar and international-ly designed to highlight the wide range of business opportunities across all sectors in Qatar.

In addition, Ooredoo will pro-vide communication services and innovative apps to support the chamber’s outreach activi-ties to the business community. In return, the chamber will work to connect its members with Ooredoo when they require busi-ness services and new technol-ogy, helping to drive innovation across industries and support the growth of the knowledge-based economy.

Al-Kubaisi said, “Ooredoo is working to be the leading in-tegrated ICT provider in Qatar to provide a range of innovative

solutions to a full range of com-panies. Working with the Qatar Chamber, we will be able to con-nect with a broader spectrum of organisations and help drive in-novation across Qatar in support of the growth of the knowledge-based economy.”

Al-Sharqi said, “Collaboration between the public and private

sector is vital for Qatar to achieve its economic goals, and this agree-ment will help promote innova-tion throughout the business sec-tor. We look forward to working with Ooredoo across a range of key initiatives moving forward.”

As part of the agreement, Ooredoo and the Qatar Cham-ber will develop training pro-

grammes to enable employees to deploy the Chamber’s facilities, and exchange information that will help both organisations pur-sue their objectives.

The two organisations will also exchange information and develop services that off er ex-pert guidance and advice across a range of business sectors.

Qatar’s government debt expected to fall to 51.6% of GDP in 2017, says IIFBy Santhosh V PerumalBusiness Reporter

Qatar, which has already used the cen-tral bank’s offi cial reserves to fi nance the budgetary defi cit, could witness overca-

pacity over the medium term through large sov-ereign investments and may also fi nd it diffi cult to deal with excessive debt build up, unless the new infrastructure supports development and diversifi cation, the Institute of International Fi-nance (IIF) has said.

Finding that Qatar has not tapped into its sov-ereign wealth fund’s foreign assets to fi nance the defi cit, which is expected at 4.7% of gross domes-tic product (GDP) in 2016; IIF said the government account balance at the Qatar Central Bank has been used, leading to a decline in offi cial reserves to $36bn in April 2016, from $43bn at end-2014.

At the same time, government borrowing from local banks has risen “signifi cantly” since November 2015, mostly through an increase in short-term overdraft accounts. The authorities have issued $7.4bn worth domestic bonds and sukuks (Islamic debt) since September 2015.

In addition, the government obtained a $5.5bn syndicated loan from foreign banks in January 2016 and raised a further $9bn in May through Eurobond issuance in 5, 10, and 30 year tranches.

“As a result, gross government debt is project-ed to increase to 55.6% of GDP in 2016,” IIF said, adding the country’s government debt, however,

is expected to decline to 51.6% of GDP in 2017.On the external debt, IIF said it has increased

rapidly in the past fi ve years, and is expected to reach 114% of GDP by end-2016. It was 83% in 2013, which then fell to 80% in 2014 but only to rise to 106% in 2015. In 2017, it is expected to fall to 105%.

Finding that more than 75% of the external debt refl ects hydrocarbon investment require-ments and projects related to the 2022 World Cup, it said nonetheless, debt service (less than 7% of GDP) should not prove to be a challenge, especially since Qatar’s total foreign assets (of-fi cial reserves at the central bank plus commer-cial banks’ assets plus sovereign wealth fund), at 236% of GDP, far exceed its foreign liabilities.

Qatar’s external debt in 2015 includes central government $20bn; commercial banks $82bn; public enterprises $60bn; and non-bank private sector $15bn.

Qatar’s foreign assets were 175% of GDP in 2013, 183% in 2014 and 237% in 2015, while it is expected to be 218% in 2017.

However, on the risk and challenges ahead for Qatar, IIF was of view that the ongoing large gov-ernment investment (11% of GDP) could create overcapacity over the medium term, particularly beyond the 2022 World Cup in Doha.

“The challenge will be to ensure that the new infrastructure is used successfully for develop-ment and diversifi cation. Otherwise they could face a diffi cult period of dealing with the exces-sive buildup of debt,” it said.

‘Qatar foreign exchange rate regime to remain unchanged’Qatar’s foreign exchange rate regime is expected to remain unchanged despite the loss of competitiveness, according to the Institute of International Finance (IIF).Highlighting that with the US dollar’s strength in recent years, the Qatari riyal’s real eff ective exchange rate has appreciated 16% since 2012; IIF said however with public foreign assets exceeding 200% of gross domestic product and strong commitment by policymakers, “we do not expect a change in the exchange rate regime, despite the loss of competitiveness.”“The authorities remain committed to the dollar

peg, which will be supported by the significant fiscal consolidation underway,” it said.Pressures on the Qatar riyal in the forward market have subsided in recent months, reflecting the modest recovery in oil prices and steps towards cutting public spending, the report said.Qatar’s five-year CDS (credit default swap), at 102 bps as of June 21, remains lower than its regional peers (Saudi Arabia, 160 bps, IIF said, adding the 12-month forward Qatari riyal rate has come down significantly in recent months from its January peak.

Al-Sharqi and al-Kubaisi sign the agreement under which Qatar Chamber and Ooredoo will work together to “better represent” Qatar’s business community and support the Qatar National Vision 2030.

QSE posts marginal gains despite stronger buyingBy Santhosh V PerumalBusiness Reporter

Stronger buying, especially in the insurance, could however trans-late as only a marginal 10 points

increase in the key index of Qatar Stock Exchange, which yesterday failed to break the 9,900 resistance level.

Domestic institutions turned mar-ginally bullish and there was increased net buying by non-Qatari individual investors as the 20-stock Qatar Index rose 0.1% to 9,877.75 points as global oil price continued to gain strength, post Brexit.

Weakened net selling by Gulf insti-tutions also helped the market, which is however down 5.29% year-to-date.

However, there was increased net selling by local retail investors and lower buying support from foreign in-stitutions in the market, where trad-ing turnover and volumes were on the decline.

Midcap equities evoked some buying interests in the bourse, where banking, industrials and realty stocks together constituted more than 71% of the total trading volume.

Market capitalisation was up 0.05% or QR25mn to QR532.19bn as there was

0.58% jump in midcap equities; while micro, small and large cap fell 0.11%, 0.08% and 0.05% respectively.

The Total Return Index rose 0.1% to 15,981.55 points and All Share Index

by 0.12% to 2,748.72 points, while Al Rayan Islamic Index was rather fl at at 3,818.84 points.

Insurance stocks gained 1.61%, consumer goods (0.45%), trans-

port (0.38%) and real estate (0.28%); whereas telecom shrank 0.67%, indus-trials (0.15%) and banks and fi nancial services (0.05%).

Major movers included Qatar In-

surance, Barwa, Ezdan, Vodafone Qa-tar, Mesaieed Petrochemical Holding, Doha Bank, Qatar Islamic Bank, Dlala, Widam Food and Nakilat; while QNB, Industries Qatar, Ooredoo, Commer-cial Bank, Masraf Al Rayan and Alijarah Holding bucked the trend.

Domestic institutions turned net buyers to the tune of QR1.26mn against net sellers of QR1.87mn on Tuesday.

Non-Qatari individual investors’ net buying strengthened to QR3.33mn compared to QR0.92mn the previous day.

The GCC (Gulf Cooperation Coun-cil) institutions’ net selling fell to QR1.13mn against QR5.05mn on June 28.

However, local retail investors’ net profi t booking increased to QR10.36mn compared to QR4.19mn on Tuesday.

Non-Qatari institutions’ net buy-ing declined to QR8.17mn against QR9.59mn the previous day.

The GCC retail investors turned net sellers to the extent of QR1.28mn com-pared with net buyers of QR0.6mn the previous day.

Total trade volume fell 34% to 2.87mn shares, value by 27% to QR95.19mn and deals by 12% to 1,750.

The transport sector saw 56% plunge in trade volume to 0.17mn equities and

24% in value to QR6.95mn but on 26% jump in transactions to 125.

The banks and fi nancial services sector’s trade volume plummeted 54% to 0.92mn stocks, value by 59% to QR29.2mn and deals by 41% to 533.

The market witnessed 47% shrink-age in the consumer goods sector’s trade volume to 0.16mn shares but on 13% rise in value to QR8.56mn and 21% in transactions to 169.

The telecom sector’s trade volume tanked 17% to 0.38mn equities, while value rose 31% to QR8.16mn and deals by 6% to 165.

There was 9% decline in the real estate sector’s trade volume to 0.5mn stocks but on 3% increase in value to QR10.12mn and 40% in transactions to 264.

However, the insurance sector’s trade volume grew more than fi ve-fold to 0.11mn shares and value more than quadrupled to QR7.93mn on almost doubled deals to 71.

Although the industrials sector’s trade volume was fl at at 0.62mn eq-uities, there was 2% rise in value to QR24.28mn but on 9% fall in transac-tions to 423.

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

Middle East stocks nudge up, but volumes subdued

ReutersDubai

Most stock markets in the Gulf nudged

up yesterday, supported by recover-

ies in oil and global equity prices after

the shock of Britain’s vote to leave the

European Union last week, but turnover

was small before summer and Eid al-Fitr

holidays.

Riyadh’s index added 0.3 %, buoyed

by the banking and telecommunications

sectors, with phone operator Zain KSA

climbing 1.3 % to 7.95 riyals.

NCB Capital said in a note that strong

revenue growth, improving market share

and margin expansion were Zain KSA’s

main strengths.

“The company is also expected to ben-

efit from the reduction in interconnection

charges, while capital expenditure is

expected to continue with the support

of the recent 2.25bn riyal ($600mn) loan

renewal,” the note added.

NCB is neutral on Zain shares with a

price target of 9.0 riyals.

Shares in retailer L’azurde Company

for Jewellery closed 7.6 % higher at 39.80

riyals as they listed, but came off their

intra-day high of 40.70 riyals.

It is unusual for a Saudi stock not

to end up its 10% daily limit on its first

day of trade. The company sold 12.9mn

shares in its initial public off er at 37.0

riyals per share.

L’azurde is the first retail company

to list in Saudi Arabia this year, and its

stock price performance in coming

months may depend on the outlook for

discretionary spending in the midst of an

economic slowdown due to low oil prices.

Dubai’s index fell 0.4%, sagging in the

final hour of trade as investors booked

profits in small and mid-cap stocks ahead

of the holidays.

Islamic insurer Dar Al Takaful slumped

10.0%. The most heavily traded stock,

amusement park builder Dubai Parks and

Resorts, dropped 3.2%.

The company said that at the behest of

Dubai’s ruler, it had made an exception to

its exclusive right to develop and operate

Six Flags-branded theme parks in the

Gulf Cooperation Council, in order to let

Six Flags help Saudi Arabia build theme

parks. Abu Dhabi’s index edged up 0.2%.

National Bank of Abu Dhabi, which is

in talks to merge with fellow lender First

Gulf Bank, added 1.2%.

Abu Dhabi Commercial Bank also

gained 1.2%.

Elsewhere Kuwait index was un-

changed at 5,375 points; Oman index

added 0.3 % to 5,780 points and Bahrain

index advanced 0.4% to 1,118 points.

RasGas signs new LNG deal with EDF to supply 2mn tonnes a ...

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