BUSINESSTuesday 27 March 2018

PAGE | 23PAGE | 22 Qatar to invest $19bn in Turkey this year

QIIB to raise up to $500m

via sukuk

‘Moushtarayat 18’ offers jobs worth QR60bn for local firms MOHAMMAD SHOEB THE PENINSULA

DOHA: The third edition of the Government Procurement and Contracting Conference & Exhi-bition (‘Moushtarayat’ 2018), which is to be held from April 23 to 25, is expected to offer billions of riyals of job opportu-nities for local suppliers, including SMEs, a top official at the Ministry of Finance announced yesterday.

Companies aiming to par-ticipate in the tenders to win job contracts, which are expected to be to the tune of over QR60bn, need to get registered with the Ministry of Finance to obtain classified certificates to qualify for applying for these tenders.

Since the launch of the pre-vious edition of the ‘Moush-tarayat’ ( held in April 2017) till now, business opportunities worth QR28.7bn have already been awarded to local suppliers, including SMEs, accounting for nearly 70 percent of the QR41.3bn total value of the awarded contracts.

“There are huge business opportunities for local suppliers this year just like last year. Last year we had tenders worth QR60bn, and this year also we are expecting the same numbers between QR40bn and QR60bn, or even more. We encourage and expect local suppliers to engage in networking with the 57 gov-ernment agencies, including Ashghal and Kahramaa and others. The Department of Gov-ernment Procurement Regula-tions (DGPR) at the Ministry of Finance (MoF) is the focal point of all the 57 agencies. So the

companies must get registered with us to avail the benefits,” Abdulaziz Zeid Rashid Al Taleb, Director of DGPR at the Ministry told The Peninsula on the side-lines of a press conference held yesterday.

Al Taleb added: “I see more business opportunities coming up during the current period given the fact the share of the international suppliers is mainly limited to the construction industry. We are also empha-sising on the law that encourages main contractors to give no less than 30 percent of contracts to local suppliers.”

Al Taleb said that the main objective of Moushtarayat event is to provide a national platform to registered firms. It’s a great opportunity for local companies to get fast access to the gov-ernment tenders, especially those classified and registered with the government.

“Classified companies which have obtained certificate from

the MoF get priority and easy access to participating for tenders. Those not registered they get disqualified from the tenders. In the absence of clas-sification certificate, companies will not get the chance to par-ticipate in the tender”, he noted.

However, he also noted that in the absence of not getting business opportunities, clas-sified firms can register com-plains with the DGPR at the Min-istry of Finance, which take matters to the end users for ami-cable solutions. The press con-ference, held to announce the readiness of Moushtarayat 18 at the Ministry of Finance, was also attended by Abdulaziz bin Nasser Al Khalifa, CEO of Qatar Development Bank (QDB); Ahmed Ali Al Ansari, the Tech-nical Office Manager at Ashghal, and Yousef Al Neama, General Manager, Group Corporate & Institution Banking at QNB.

→CONTINUED ON PAGE 22

FROM LEFT: Yousef Al Naama, General Manager of Corporate and Institutional Banking Department; Abdulaziz bin Nasser Al Khalifa, CEO of Qatar Development Bank; Abdulaziz Zaid Al Talib, Director of Government Procurement Department; and Ahmed Ali Al Ansari, Director of Technical Office at Ashghal; during the QDB the press conference to announce ‘Moushtarayat’ exhibition at the Ministry of Finance headquarters yesterday. PIC: BAHER AMIN / THE PENINSULA

‘QIIB grew on all fronts, 2017 a successful year’SATISH KANADY THE PENINSULA

DOHA: The Vice-Chairman of QIIB, Sheikh Abdullah bin Thani bin Abdullah Al Thani, has said that the year 2017 had witnessed the bank’s capability in achieving its target growth in terms of the most important financial indicators including financials, deposits and assets portfolios, thus helping it to maintain high ratings assigned to it by global credit rating agencies.

This reflects the implemen-tation of the bank’s interim plans and strategy and its ability to benefit from the strength of the Qatari economy, Sheikh Abdullah said while addressing

the ordinary general meeting of the bank yesterday.

The year 2017 had been very challenging, since the world eco-nomic map was changing and various factors were affecting the global economic stability. “It is true that facing challenges is something we got used to, but we have been able to turn chal-lenges into opportunities. We have overcome many obstacles and we continued to work very hard in close collaboration with the country’s various economic sectors, which strengthened QIIB’s position as a leading bank capable of maintaining a stable constant growth, achieving the best returns for its shareholders and providing the best services and benefits for its customers.”

Sheikh Abdullah said.On the bank’s overseas

expansion plans, he said the bank would meticulously

examine any available oppor-tunity and conduct feasibility studies especially in terms of risks. QIIB was able to open the

first Islamic Bank in the Kingdom of Morocco in part-nership with local partners after receiving all the required

licenses for practicing Islamic banking activities.

“We named the new entity, Umnia Bank and we expect that this investment achieves good results and returns based on detailed studies conducted on the Moroccan market’s needs for Islamic banks and Shariah-com-pliant financing,” the Vice-Chairman said.

Sheikh Abdullah said the board of directors has reviewed and updated all policies and pro-cedures so as to comply with the governance and sound man-agement policy in accordance with the requirements of Qatar Central Bank and the Qatar Financial Markets Authority.

→CONTINUED ON PAGE 22

Sheikh Abdullah bin Thani bin Abdullah Al Thani (centre), Vice-Chairman of QIIB; Dr Abdulbasit Ahmad Al Shaibei (right), CEO; and a Board Member at the Ordinary General Assembly Meeting of the bank, yesterday. PIC: BAHER AMIN/ THE PENINSULA

8,711.91 -40.75 PTS0.47%

QSE FTSE100 DOW BRENT6,921.94 -30.65 PTS0.44%

23,992.00 +34.11PTS0.14% Dow & Brent before going to press

$65.36 +1.06

22 TUESDAY 27 MARCH 2018BUSINESS

Qatar to invest $19bn in Turkey this year THE PENINSULA

DOHA: The senior officials from the Qatar Financial Centre (QFC) took part in the 7th Uludag Economy Summit, which was held in Uludag, Turkey, from March 23 to 24.

The meeting, organised by Capital and Ekonomist maga-zines, brought together more than 1,300 delegates from around the world to discuss global and local economic topics. Qatar and Turkey have long enjoyed a strong business relationship, and Turkey is a key target market for the QFC’s strategic diversification plans. Qatar has announced that it will invest $19bn in Turkey in 2018.

Sheikha Alanoud bint Hamad Al Thani, Managing Director, Business Development, QFC

Authority, said: “The Uludag Economy Summit is a valuable opportunity to discuss economic opportunities and challenges with business leaders from around the world, and from Turkey in

particular.” She continued: “There are more than 200 Turkish com-panies already operating in Qatar, and we hope that the number will continue to grow, thanks to our countries’ strong ties, which are demonstrated by this summit.”

The summit was also attended by leading government and business officials, including Mehmet Simsek, Deputy Prime Minister of Turkey; Berat Albayrak, Turkish Minister of Energy and Natural Resources; Murat Çetinkaya, Governor, Central Bank of Turkey; and H E Osman Çelik, Under-Secretary of the Turkish Treasury.

The QFC’s participation comes as part of its continued efforts to promote Qatar as a lucrative destination for com-panies looking to expand their operations to the Middle East and

tap into Qatar’s multibillion dollar infrastructure programme.

Qatar and Turkey have always had strategic relations in many areas of cooperation, built upon a strong and friendly

historical relationship. Trade relations continue to increase; in the first quarter of 2017 Turkish companies undertook 128 projects totaling $14.2bn in Qatar. It was recently announced that

Qatar will invest $19bn in Turkey in 2018. Qatar-Turkey bilateral trade volume stood at $834.5m in 2016 and that figure was recorded at $634m in the first eight months of 2017.

This was announced in the 7th Uludag Economy Summit in Uludag, Turkey, from March 23 to 24. The meeting, organised by Capital and Ekonomist magazines, brought together more than 1,300 delegates from around the world to discuss global and local economic topics. Sheikha Alanoud bint Hamad Al Thani, Managing Director, Business Development, QFC Authority,

with leading government and business officials at the 7th Uludag Economy Summit in Uludag, Turkey.

QP showcases key achievements at Oman conferenceTHE PENINSULA

MUSCAT, OMAN: Qatar Petroleum has joined the largest gathering of oil & gas companies in the Sultanate of Oman with a strong presence at the 11th Oil & Gas West Asia (OGWA) Exhi-bition & Conference.

The OGWA Exhibition, which was held under the aus-pices of Oman’s Ministry of Oil and Gas, was inaugurated on Sunday by

H E Mohammed bin Al Zubair, Adviser to H M the Sultan of Oman for Economic Planning Affairs, at the Oman Convention & Exhibition Centre in Muscat.

H E Mohammed bin Al Zubair visited Qatar Petroleum’s exhi-bition stand together with other top government officials and VIPs, where they were briefed on the corporation’s history as well as some of its most important achievements in the oil and gas industry, as well as on its expanding upstream footprint across the globe.

Qatar Petroleum is taking part in the event along with Qatar Chemical and Petro-chemical Marketing and Distri-bution Company (Muntajat), which serve as the gateway to Qatar’s exports of chemicals and petrochemicals products.

The three-day exhibition is held until today, and it includes on its sidelines a conference on enhanced oil recovery tech-niques, which was inaugurated on Sunday by H E Dr. Mohammed bin Hamad Al

Rumhi, Oman’s Minister of Oil and Gas.

QP’s participation at OGWA 2018 comes a few months after the corporation entered into an agreement with Eni of Italy to acquire a 30% participating in the Contractor’s interest under the exploration and production sharing agreement for Block 52 offshore Sultanate of Oman. The agreement was signed in November 2017 by Mr. Saad Sherida Al-Kaabi, Qatar Petroleum President & CEO, in the presence of Oman’s Minister of Oil and Gas.

Qatar and Oman also have close links in the oil and gas industry through the Dolphin Gas Project, which processes up to 2 billion standard cubic feet per day of natural gas from Qatar’s North Field. The gas is then transported by pipeline and distributed to customers in UAE and Oman.

Sheikh Nasser bin Ali bin Saud Al Thani, Chairman of the World Trade Center Co. – Qatar, signs an MoU for promoting international commerce with Jian Zing Wii at Qatar Chamber headquarters.

Significance of Qatar-China trade relations highlighted THE PENINSULA

DOHA: In response to an invi-tation extended from Qatar Chamber (QC),, a high-ranking Chinese trade delegation, comprising of 50 members, visited Qatar.

The delegation represented China Council for the Promotion of International Trade (CCPIT), China Chamber of International Commerce (CCOIC), and several other sectors including con-struction, information tech-nology, electrical and elec-tronics, mining, textile, printing, imports and exports, financial and banking services, mechanical equipment, travel and tourism and investment sectors. In the context of this visit, the World Trade Center Co. – Qatar- held a dinner party in

honour of the Chinese delegation.

This event was attended by Sheikh Nasser bin Ali bin Saud Al Thani, Chairman of the World Trade Center Co. – Qatar and Chairman of Qatar General Insurance and Reinsurance Company; Mohammed bin Ahmad bin Tawar, Vice-Chairman of Qatar Chamber of Commerce and Industry; and.Ghazi Abu Nahl, President of World Trade Centers Associ-ation; along with a number of Qatari businessmen and QGIRCO managers.

In his speech, Sheikh Nasser bin Ali bin Saud Al Thani hailed the attendees, pointing out the two nation’s commonalities and the versatile business opportu-nities between them.

Ghazi Abu Nahl delivered a

welcome speech, affirming the significance of the economic and trade relations between Qatar and China, while emphasising the distinguished relationship between World Trade Center Co. – Qatar – and its Chinese Counterpart.

Jian Zing Wii, who is heading the Chinese delegation, thanked Sheikh Nasser bin Ali bin Saud Al Thani and Ghazi Abu Nahl for their warm hospitality and stressed on the depth and strength of the bilateral relations amid its accelerated economic growth.

The event was marked by a signing ceremony of a Memo-randum of Understanding between the Chinese Council and World Trade Center Co. – Qatar – for promoting interna-tional commerce. It is

noteworthy that the World Trade Centers Association, with its main headquarters in New York

City, represents 332 World Trade Centers in 116 countries around the world.

CONTINUED FROM PAGE 21

The Board also makes con-tinuous efforts to meet all relevant governance and sound man-agement requirements, whose final form was clarified following the amendment of the articles of association as shown in the cor-porate governance annual report presented to the shareholders and prepared by the Bank’s Gov-ernance Unit that operates inde-pendently under the direct super-vision of the Board of Directors, he said.

Dr Abdulbasit Ahmad Al Shaibei, CEO of QIIB said the banks performance was solid and was very much in line with the bank’s growth trajectory, be it in terms of the growth rates, expansion of the customer base or other main financial indicators.

“Having reviewed the financial indicators of QIIB by the end of 2017, we find that our Bank’s financial position remains

strong,” he said. The bank’s total revenues reached QR1.9bn at the end of last year compared with QR1.7bn at the end of 2016, which represents a growth rate of 8.8 percent.

The strength of the Qatari economy and its ability to overcome all the obstacles and challenges have mainly con-tributed to shielding the local banking sector from the ill-effects of the blockade. The government measures have turned the blockade into an opportunity and have contributed to achieving financial stability of the banking sector and helped overcome any consequences of the blockade. The growth figures for the various items provisioned in the QIIB budget confirm these facts, he said.

During 2017, the bank’s major focus was on local market, par-ticularly the opportunities offered by the Qatari economy. The effective cooperation and special partnership between QIIB and the

Qatar Development Bank (QDB), has helped facilitating financing to many SMEs and entrepreneurs’ initiatives.

For the purpose of strength-ening the bank’s financial position and diversifying the funding sources, QIIB has established a $ 2bn Sukuk issuance programme. The bank has received the approval of the Financial Conduct Authority (FCA) in the United Kingdom to list it on the London Stock Exchange, Dr Al Shaibei said. The meeting approved the board of directors’ recommen-dation to distribute 40 percent cash dividends to the shareholders.

The general assembly also approved the General Assembly’s last year approval to establish up to $ 2bn Sukuk programme and delegate the bank board of directors’ to decide the size of each issuance, terms and condi-tions, issuance currency after getting all necessary approvals from supervisory authorities.

‘QIIB grew on all fronts: Vice-Chairman

CONTINUED FROM PAGE 21

This year’s conference and exhibition will provide SMEs with more than 2000 opportunities with an estimated cumulative value worth up to QR4.6bn (expected to raise further) as well as the platform to learn about existing public tenders extended by 40 big buyers, such as larger private sector companies, semi-govern-mental and governmental bodies.

In addition, Moush-tarayat 2018 aims to educate attendees on the procedures involved in partaking in future tender and appli-cation processes success-fully, so that members of the private sector may become more active contributors to the diversification of the economy.

Commenting on this occasion, Al Khalifa (CEO of QDB), said: “The exhibition is expected to bring signif-icant achievements for all parties, where SMEs will be able to identify the existing opportunities and open new markets through their presence. Local buyers will also benefit from gaining more knowledge and estab-lishing better dialogue with prominent buyers and suppliers.”

Al Khalifa (CEO of QDB), also added that: “QDB’s efforts will help enhance SMEs market positions both technically and financially by assisting to localise supply chains, the active participation of entrepre-neurs and SMEs at previous two editions of Moush-tarayat underscored the success of the event and demonstrated how deeply they valued new public sector opportunities.”

Moushtarayat 2017 recorded a nationwide turnout of entrepreneurs, participants from SMEs, members of the larger business community and media personnel at its pavilions, which were largely hosted by gov-ernment and semi-gov-ernment organisations.

The Moushtarayat 2017 exhibition witnessed the part ic ipat ion of 30 exhibitors.

According to reports, during the course of the three-day expo, 2,000 job opportunities for SMEs were created with an estimated cumulative value worth up to QR2.5bn.

‘Moushtarayat 18’ offers jobs worth QR60bn for local firms

FROM LEFT: Abdul Rahman Abdul Jalil Al Abdul Ghani, Vice-Chairmanof the board; Abdullah bin Thani Al Thani, Chairman of the Board; and Ali Ibrahim Al Ghani, CEO of Qatar Islamic Insurance; with other officials during the annual general meeting of Qatar Islamic Insurance at Ezdan Towers, yesterday.PIC: BAHER AMIN / THE PENINSULA

The OGWA Exhibition, which was held under the auspices of Oman’s Ministry of Oil and Gas, was inaugurated on Sunday by H E Mohammed bin Al Zubair, Adviser to H M the Sultan of Oman for Economic Planning Affairs, at the Oman Convention & Exhibition Centre in Muscat.

DOHA: QIIB plans to raise between $300m-$500m via Sukuk this year. As part of the issuance programme, the bank will hold roadshows in selected Asian and European markets next month, the bank CEO Dr Abdul Basit Ahmed Al Sheibi (pictured), revealed yesterday.

Speaking on the sidelines of the bank’s ordinary general assembly meeting, the CEO said the bank got shareholders approval to go for the senior Sukuk. “May be next month we may hold roadshows to test the investors’ appetite in the

international market before deciding on the real size of the Sukuk and tenor ”, he said.

QIIB issued its first Sukuk in 2012 for $700 and it was matured in October 2017. “We were planning for the new issuance

immediately, but because of the unprecedented crisis in the region and the rising rate hike horizon, we thought better to wait”, he said. Singapore and Hong Kong are among other Asian markets QIIB is planning to hold the roadshows.

Dr Al Sheibi said the target size of the Sukuk is something between $300m to $500m. The bank will take a final call on the size and the tenor of the Sukuk after testing the market. The market is currently very volatile because of the hike in interest rates. “We are sitting with our advisors, they have been telling us to wait and see the clear directions of Fed. So, our idea is to explore

the market mood”, he said.“We understand that we are

already in a rate hike horizon, so

we cannot prolong our issuance decision. Borrowing cost is expected to go further high. We do not want to wait for long and end up in a high rate horizon”, he said.

Dr Al Sheibi said the bank got the shareholders approval to extend the 2017 general assembly’s approval to issue Additional Tier1 sukuk up to QR3bn, of which QR1bn was issued during 2016, and del-egate the bank’s board of directors to decide on the size of each issuance and the issuance currency pending the

regulatory approval.QIIB’s $2bn Trust Certificate

Issuance programme has already

been approved by the the UK Financial Conduct Authority (the FCA) and is being admitted to the official list of the FCA and the London Stock Exchange. The Pro-gramme has been assigned a pro-visional rating of A2 by Moody’s Investors Service Cyprus .

On his 2018 Outlook, Dr Al Sheibei bank CEO said he is quite optimistic on the local banking sector. Given the Government’s projected infrastructure spending, it is definitely going to reflect on the bank’s balance sheets posi-tively. He said the NPAs in Qatar’s banking sector are within the acceptable levels. Global ratings agencies’ reports are a reflection of this fact, he said.

The rial has lost around a quarter of its value in the past six months, hitting 50,860 against the US dollar. The gap between that and the official rate, which stood at 37,686 yesterday, has continued to widen.

Dr Al Sheibi said the target size of the Sukuk is something between $300m to $500m. The bank will take a final call on the size and the tenor of the Sukuk after testing the market.

23TUESDAY 27 MARCH 2018 BUSINESS

Iranian rial falls to record lowAFP

TEHRAN: The Iranian rial fell to a record low yesterday, breaking through the 50,000-to-the-dollar mark for the first time as analysts blamed uncertainty from Washington.

The rial has lost around a quarter of its value in the past six months, hitting 50,860 against the US dollar, according to Financial Informing Network, a trusted Iranian website for open market currency rates.

The gap between that and the official rate, which stood at 37,686 yesterday, has continued to widen. Iran’s government took drastic measures last month to stem the decline in the free market rate, arresting foreign exchange dealers, freezing spec-ulators’ accounts and raising interest rates.

But on the streets of Tehran, long queues continued to gather

outside foreign exchanges in the run-up to this month’s Nowruz New Year holiday.

“The issue is psychological rather than economic. There’s no reason to buy dollars except in the hope that you can sell them later at a higher rate,” said Esfandyar Batmanghelidj, founder of the Europe-Iran Forum, a business network.

He said Iranians were reacting to worrying news from the United States, where Pres-ident Donald Trump this month appointed hardline anti-Iran figures Mike Pompeo and John Bolton to senior posts in his administration. Many analysts believe Trump will pull out of the 2015 nuclear deal with Iran when it next comes up for renewal in May, bringing back crippling sanctions.

“I see many people looking to invest in neighbouring coun-tries because this fear is

spreading about the future of the JCPOA (nuclear deal),” said Navid Kalhor, a Tehran-based financial analyst.

Local officials have com-plained that Iranians are hoarding billions of dollars as local banks run short of cash.

“I have friends who go to

banks and ask for 15 or 20 million rials ($300 or $400) and they’re told to come back in a week because they’re out of cash,” said Kalhor.

The devaluation poses a major problem for President Hassan Rowhani’s government, which had hoped to attract massive foreign investment in the wake of the nuclear deal.

Already facing huge obstacles from remaining, non-nuclear US sanctions, the col-lapsing currency will serve as another deterrent to potential investors, Batmanghelidj said.

“Even in an instance where an investor is willing to operate in Iran, the devaluation is very concerning. If you invest now and the currency falls even 15 percent, you have to discount that from your returns, and that’s very difficult to hedge against,” he said.

“This will be difficult for the

government. There is very little they can do about the mentality of individuals.” The government has resisted unifying the official and free-market rates of the rial because it would mean more expensive imports and therefore higher inflation.

But analysts say the gap has distorted trade and fuelled cor-ruption. Perhaps the biggest challenge is that hoarding dollars has become a preferred way to store money amid economic uncertainty, especially after a housing boom stagnated after years of over-construction.

Iranian banks have tried to counter this by offering interest rates as high as 20 percent. But this has only fuelled wider problems in the economy by dis-couraging investors from putting their money into businesses. “The situation in the economy right now is far from beautiful,” said Kalhor.

A ComfortDelgro taxi passes Uber and Grab offices in Singapore yesterday.

As Uber bows out to Grab, drivers and riders bemoan loss of choiceREUTERS

SINGAPORE: A mix of concern and disappointment met Uber Technologies Inc’s deal to sell its Southeast Asian business to bigger regional rival Grab, as drivers and users of the ride-hailing firms took in the prospect of sharply reduced competition.

The services throughout Asia have long relied on dis-counts and promotions for con-sumers and incentives for drivers, which made for tough competition, pushing down profit margins. Grab said the Uber acquisition accelerated its path to profitability in its core transport business, as it would become the most cost-efficient Southeast Asian platform.

While drivers were split on which of the two services offered better compensation, they gen-erally expected fares to go up with

the reduced competition.Rennu Mahajan, who has

driven a combined three-and-a-half years for both companies in Singapore, said some of her driver friends were concerned because now they would not be able to switch to the other app.

On its Singapore website, Grab said passengers could expect better service with more drivers and transport options available on one app and that fares would not change. For drivers, it said the benefits and incentives structure remained the same.

According to mobile data analytics firm App Annie, Grab was ranked fifth among top apps based on monthly active users in Singapore in 2017 versus Uber at No. 7. In Indonesia, Go-Jek was at No. 9 just ahead of Grab.

Whether the merger would eliminate competition in Sin-gapore wil l be the

focus of government review, a spokeswoman for the Land Transport Authority said. “We will ensure that no one single market player dominates the sector to the detriment of com-muters and drivers,” she said.

Malaysia’s Land Transport Authority issued a similar statement, saying it “will work closely with relevant consumer and various regulatory agencies such as the Malaysia Compe-tition Commission to safeguard passengers from unfair terms”.

While there are smaller ride-hailing apps in each market, Grab and Uber have a presence across the region, while Indonesia’s popular Go-Jek only operates within its home country. Drivers in Cam-bodia, one of the last frontiers in the battle of apps, say com-petition is fierce and the market will not be easy for Grab.

Oil’s Seven Sisters entering a ‘golden age’: Goldman SachsBLOOMBERG

LONDON: The world’s largest oil companies have survived a life-changing crisis, and are now poised to reap the rewards, Goldman Sachs Group Inc said.

Big Oil is in a sweet spot with rising oil prices and low operating costs, leaving them with the biggest cash-flow growth in two decades and boosting earnings, Goldman said in a report yesterday.

That will increase their attraction for investors after years of elevated spending fol-lowed by crude’s slump sent their weighting in global equity indexes to a 50-year low, according to the bank.

“We see this as the start of a new golden age for Big Oil’s reborn Seven Sisters,” said ana-lysts led by Michele Della Vigna, referring to the seven largest non-state oil companies. It is “also a favorable environment for returns in the commodity.” Crude’s slump since the middle of 2014 wiped out some smaller companies and changed the way the biggest operate as they continue to drive down costs in

an attempt to survive. A downturn is typically followed by a period of relative plenty as the cost of getting new barrels out of the ground takes time to catch up with the crude price, widening profit margins.

The majors are leading the pack. While crude’s collapse pushed the weight of oil com-panies in equity indexes to about 5 percent, less than half their normal level, Big Oil is now in a position to regain its standing. The slump culled smaller drillers and has left the larger ones with the opportunity to take more market share.

Royal Dutch Shell Plc, Total SA and BP Plc are among the majors that reported the highest earnings in years last quarter. Some even started share buy-backs and others are promising higher dividends.

They are also benefiting from the start up of projects sanctioned years ago but were delayed by the downturn, Goldman said. The years from 2011 to 2013 “witnessed the largest number of project sanc-tions in the history of the oil and gas industry,” Goldman said.

Dollar and yen weak as risk appetite returnsREUTERS

LONDON: The US dollar slipped to a five-week low against a basket of major currencies yesterday, as optimism that the United States and China are set to begin negotiations on trade helped ease fears of a trade war and investors’ appetite for risk improved.

The dollar index, which measures the greenback against a basket of six other major currencies, was down 0.42 percent at 89.064, after slipping to a five-week low of 89.056. “You are seeing fears of a trade war ebbing right now and investors are moving back into asset classes that offer relatively attractive returns right now,” said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.

Global markets were shaken last week after US President Donald Trump moved to impose tariffs on Chinese goods, edging the world’s two largest econ-omies closer to a trade war, but latest reports indicated a slightly more selective stance.

China’s premier, Li Keqiang, said yesterday that China and the United States should maintain negotiations and he reiterated pledges to ease access for American businesses, as China tried to avert a trade war.

The yen, often viewed as a safe-haven currency in times of market turbulence and economic uncertainty, slipped against the greenback. The dollar was up 0.35 percent against the Japanese currency. The euro rose 0.77 percent against the greenback, with the latest comments from Jens Weidmann, Germany’s likely candidate to become the European Central Bank’s next president, also offering some support. The British pound rose 0.69 percent against the dollar as investors became more convinced that the Bank of England would raise interest rates in May.

New lows for Spanish borrowing costsREUTERS

LONDON: The premium investors demand to hold Spanish bonds over top-rated Germany fell to six-week lows yesterday after the country’s second ratings upgrade of the year led to a further outper-formance of its bond market over its euro zone peers.

Bond yields across the euro area were higher as reports that the United States and China

have started negotiations to improve US access to Chinese markets eased fears of a trade war and reduced the appeal of fixed income.

Italian bonds were laggards, amid signs the anti-establishment 5-Star Movement and the anti-migrant League might explore an alliance to form a government.

In contrast, Spanish bonds continued to outshine their peripheral peers after S&P Global on Friday raised Spain’s

credit rating to A- from BBB+, citing a positive outlook for the economy and budgetary consolidation.

Spain’s 10-year bond yield dipped to a 16-month low at 1.24 percent, pushing the gap over top-rated German peers to a low of 71 basis points. The Italian/Spanish yield spread was 64 bps, close to its widest in seven months. Spain is one of the best-returning government eurozone bond market in 2018.

QIIB to raise up to $500m via sukuk; plans roadshowsSATISH KANADY THE PENINSULA

Futures contracts allow investors to hedge exposure to physical prices, and offering them in yuan could allow energy-hungry China — which last year surpassed the United States as the world’s largest crude importer — to exercise more control over prices of the type of oil it consumes most.

24 TUESDAY 27 MARCH 2018BUSINESS

A general view shows the Secco Petrochemical Complex in Shanghai yesterday.

China eyes new oil benchmark with futures launchAFP

SHANGHAI: China launched yuan-denominated oil futures contracts yesterday, marking the first time foreign investors will have access to Chinese commodity futures as the world’s top crude importer seeks greater influence over global prices.

But analysts said the long-delayed Shanghai-traded futures are unlikely to challenge the primacy of New York and London-based futures any time soon due to Chinese capital con-trols and the entrenched position of the dollar-denominated contracts.

Futures contracts allow investors to hedge exposure to physical prices, and offering them in yuan could allow energy-hungry China — which last year surpassed the United States as the world’s largest crude importer — to exercise more control over prices of the type of oil it consumes most.

It also is the latest in a series of steps by China to raise the world profile of the yuan.

The new contracts are “rooted in China’s ambition to increase its bargaining power to price energy supplies amidst an increasing reliance on oil

imports,” energy industry infor-mation provider ICIS said in a research note.

“If the demand for (yuan con-tracts) came at the expense of the US dollar, there is always a chance, however slim, that the Chinese yuan could displace the US dollar as the main petro-currency.” But analysts said Chinese capital con-trols will likely discourage hefty foreign engagement, as will war-iness of the often wild gyrations in China’s still relatively immature

financial markets.“For now there is more curi-

osity than actual interest in par-ticipating in the contract,” Michal Meidan, a London-based analyst with Energy Aspects, said.

“Over time... it could become at least a domestic Chinese benchmark. But for it to become a global benchmark -- we are a way away from that.” The current global standards are London-trade Brent futures, and West Texas Intermediate (WTI), which is traded in New York.

They mainly trade higher-quality light sweet crude oil, while the yuan contracts on the Shanghai International Energy Exchange involve mainly medium-sour crude.

The Shanghai contract traded higher than its London and New

York counterparts shortly after debuting, at 432.2 yuan ($68.43) per barrel for September set-tlement at around 0145 GMT, according to Bloomberg News.

Bloomberg said September contracts for Brent traded near $68.72 a barrel, and WTI at $64.37. China has already taken steps that it hopes will help to internationalise its currency.

Last July it widened foreign access to its $10 trillion bond market — the world’s third-largest after the United States and Japan — and in recent years has allowed link-ups between the stock exchanges of Hong Kong and mainland China that allow foreign and Chinese investors to buy shares listed on each other’s markets.

But foreign investor response

to those openings has been tepid, and while analysts say the yuan oil futures will help further inter-nationalise China’s markets and increase crude price trans-parency in Asia, the dollar’s position as the world’s petro-cur-rency remains solid.

The existing benchmarks are “highly liquid, (have) been trading for decades, denominated in US dollars and include a large portion of physical deliveries,” said Jonty Rushforth, head of oil pricing at S&P Global Platts.

“With this in mind, it is likely to take some time before any effects become clear. It is also worth remembering that, as the world’s largest importer of crude, China already has a strong voice in global oil markets,” Rushforth said.

Toshiba awaits regulator nod for key sale of chip unitAFP

TOKYO: Embattled Japanese conglomerate Toshiba said yesterday that it was still waiting for regulators to approve the key sale of its chip unit, a delay that could stymie plans to complete the deal this month.

The firm agreed in Sep-tember to sell its memory chip business to a consortium led by US investor Bain Capital, which was seen as crucial to keeping it afloat after multi-billion-dollar losses.

Under the deal, Toshiba had expected to meet all the sale conditions by March 23 and complete by March 30. “However, the satisfaction of certain conditions relating to antitrust approvals in required jurisdictions have not yet been confirmed,” Toshiba said.

“Although the timing of the closing has not been determined, Toshiba intends to close the transaction as soon as possible,” the statement continued. Toshiba spokeswoman Midori Hara said that “for now it’s only China’s anti-trust law” that is holding up the sale.

“We don’t know the timeline for the approval, but we are still seeking to com-plete the deal on March 30.” The Bain-led group acquiring the memory chip business includes US tech giants Apple and Dell, as well as South Korean chipmaker SK Hynix.

Toshiba has struggled after the disastrous acquisition of US nuclear energy firm Westing-house, which racked up billions of dollars in losses before being placed under bankruptcy pro-tection. In order to survive and avoid delisting, the cash-strapped group decided to sell its chip business -- the crown jewel in a vast range of busi-nesses ranging from home appliances to nuclear reactors.

With the chip deal and the sale of Westinghouse, Toshiba said in February it would swing into the black for the full fiscal year.

Wall Street bankers’ average bonus jumps to highestBLOOMBERG

NEW YORK: Wall Street’s average bonus jumped 17 percent in 2017 to $184,220, the highest since 2006, according to esti-mates by New York State Comp-troller Thomas DiNapoli.

The bonus pool climbed to $31.4bn as employment in the industry dipped slightly in New York City, DiNapoli said yes-terday. The bonuses increased as profits from broker-dealer operations of New York Stock Exchange member firms increased to $24.5bn, the most since 2010,

according to the statement.“The large increase in prof-

itability over the past two years demonstrates that the industry can prosper with the regulations and consumer protections adopted after the financial crisis,” DiNapoli said in the statement.

“It is too soon to tell how increased volatility in the financial markets might impact profits in 2018.” Banks’ corporate clients took advantage of cheap financing last year, meaning investment bankers saw their bonuses swell as their businesses were buoyed by record

debt-underwriting revenue and a jump in stock-underwriting and advisory fees.

Their colleagues in sales and trading braced for smaller payouts as a prolonged slump in volatility crimped revenue in those businesses last year.

JPMorgan Chase & Co investment bankers’ saw their 2017 bonus pool expand by about 5 percent, while fixed-income trading personnel saw theirs drop by about 12 percent, people with knowledge of the payments said in January.

At Bank of America Corp, the

investment-banking bonus pool rose between 5 percent and 10 percent, while in equities it shrank about 5 percent. The bonus figure may have benefited from the rise in financial-stock prices last year as the Trump administration indicated it would seek to loosen regulations.

The comptroller’s estimate is based on income-tax filings and includes cash bonuses for 2017 and awards deferred from previous years, according to the statement. The estimate doesn’t include stock options or other forms of deferred compensation.

US sends China to-do list to reduce trade imbalanceREUTERS

BEIJING: The United States asked China in a letter last week to cut the tariff on US autos, buy more US-made semiconductors and give US firms greater access to the Chinese financial sector, the Wall Street Journal reported yesterday, citing unnamed sources.

Alarm over a possible trade war between the world’s two largest economies has chilled financial markets as investors foresee dire consequences should trade barriers go up due to President Donald Trump’s bid to cut the U.S. deficit with China.

Treasury Secretary Steven Mnuchin and US Trade Repre-sentative Robert Lighthizer listed steps that Washington wants China to take in a letter to Liu He, a newly appointed vice premier who oversees China’s economy, the Journal said, quoting sources with knowledge of the matter.

The newspaper reported that Mnuchin was considering a visit to Beijing to pursue negotiations. Fears of a trade war mounted earlier this month after Trump first slapped tariffs on steel and alu-minium imports, and then on Thursday specifically targeted China by announcing plans for tariffs on up to $60bn of Chinese goods.

On Friday, China fired a warning shot in response to the

US tariffs on steel and alu-minium by declaring plans to levy additional duties on up to $3bn of US imports. The list of targeted goods made no mention of soybeans or aircraft, China’s two biggest US import items.

China’s third-biggest US import category - motor vehicles — totalled $10.6bn in 2017, about 8 percent of the country’s overall US imports by value, according to data from the US Census Bureau.

China currently has a 25 percent tariff on US cars. China purchased $2.6bn of semicon-ductors from the US last year, or 1 percent of China’s total semiconductor imports, Chinese customs data shows.

Beijing could also inflict pain on US multinationals that rely on China for a substantial - and growing - portion of their total revenues, said Alex Wolf, senior emerging markets economist at Aberdeen Standard Investments. “This could put US companies such as Apple, Microsoft, Starbucks, GM, Nike, etc. in the firing line,” Wolf said.

China can increase the reg-ulatory burden on UScompanies through new inspections and rules; ban travel; stop providing export licenses of key interme-diate goods; raise the tax burden on US multinationals in China; or block US companies from the government procurement market, he said.

Auto trade fairPeople visit an auto trade fair in Shenyang, Liaoning province, China.

South Africa investigates $60m SAP contractREUTERS

JOHANNESBURG: South Africa’s anti-corruption agency is investi-gating a 671m rand ($60m) government contract with German software firm SAP, which has admitted misconduct in separate deals involving friends of ousted president Jacob Zuma.

The Public Protector, an independent watchdog man-dated by the constitution, said it had received an anonymous letter alleging due process was not followed in the award of a

contract to SAP in 2016 to provide IT and support services to the Department of Water and Sanitation (DWS).

The investigation comes at a time the DWS is under growing pressure from opposition politi-cians who blame it for failing to avert a chronic drought in Cape Town and as parliament pre-pares to investigate misman-agement at the department.

Since replacing Zuma in Feb-ruary, President Cyril Ram-aphosa has pledged to crack down on corruption after a string

of scandals. Several investiga-tions into government and private companies have since moved forward.

“The Public Protector is investigating the SAP licences,” a spokesman for the agency, Oupa Segalwe, said. “The alle-gation is that SAP licences for both the department and water boards were purchased without following due process.” The Public Protector has carried out several influential investigations, including one in 2014 that was instrumental in making Zuma

repay more than $600,000 of state-funded security upgrades to his private home.

In 2016, the watchdog revealed details about the undue influence Zuma’s friends, the Guptas, had over the awarding of state tenders and the role played by global firms.

SAP declined to comment on the agency’s inquiry or give details about the contract but said it was conducting a review of all its deals with the South African government back to 2010.

Vitol posts 25% profit drop as market shiftsBLOOMBERG

NEW YORK: Vitol Group, the world’s biggest inde-pendent oil trader, suffered a 25 percent drop in annual profit as income from assets sales failed to offset weaker trading results.

Net income fell to $1.5bn in 2017, from $2bn the year before, according to a person familiar with Vitol’s results. The energy-trading envi-ronment has deteriorated as output curbs by Opec and its allies upended the oil-price curve, making buy-and-store crude deals less profitable.

“It is pretty bloody tough,” Vitol Chairman Ian Taylor said in an interview last week. “And I don’t think anybody is making a lot of money.”

Oil traders are struggling to match earnings in 2015 and 2016, when an oversupplied market meant they could lock in profits by storing crude and selling futures contracts at higher prices. Vitol’s 2016 profit was its third highest in its 50-year history. The 2017 results were first reported by the Financial Times.

Vitol reported a 0.6 percent drop in total 2017 oil trading volumes to 349m tonnes from the year before, even as crude trading increased “modestly” to 178m tonnes, or 3.6 million barrels a day.

Officials in the bloc have been discussing such a fund since last year as one option for setting up a eurozone budget or boosting fiscal capacity — an idea championed by France and to which opposition from Germany appears to be softening.

25TUESDAY 27 MARCH 2018 BUSINESS

Lagarde proposes ‘rainy day fund’ for eurozoneREUTERS

BERLIN: International Monetary Fund (IMF) head Christine Lagarde said yesterday that the eurozone leaders should set up a “rainy day fund” to help cushion member states in economic downturns.

Officials in the bloc have been discussing such a fund since last year as one option for setting up a eurozone budget or boosting fiscal capacity — an idea cham-pioned by France and to which opposition from Germany appears to be softening.

In a speech in Berlin, the Fund’s managing director wel-comed a “sustained and broadly shared upswing” in the global economy, which she said offered a precious window of opportunity for governments to “complete the architecture” of the eurozone.

“There are other, forceful headwinds threatening,” Lagarde said. “Think of the rise of pop-ulism and the short-sighted siren call of protectionism.” Talks among eurozone finance min-isters on an additional fiscal capacity have so far brought no conclusions, partly because Germany was long without a government following an incon-clusive election in September. Leaders are likely in June to give

S Korea makes concessions to preserve US trade dealAFP

SEOUL: Seoul has agreed to a quota for steel exports to the US 30 percent below current sales and accepted extended tariffs on pick-up trucks to secure a revised trade deal with Washington and escape its steel duties, the government admitted yesterday.

South Korea and the United States are security allies both threatened by the nuclear-armed North but since taking office US Pres-ident Donald Trump repeatedly threatened to tear up their free-trade agreement, raising concerns about undermining the eco-nomic leg of their alliance.

The Trump administration instigated talks in July to rene-gotiate the free-trade treaty, known as KORUS, and the US last week imposed duties on steel imports from multiple countries including China, raising fears of a trade war.

South Korea and the United States have agreed “in principle” on the revisions of their free-trade agreement (FTA) and steel tariffs, Seoul’s trade minister said Monday.

The South’s economy is heavily dependent on trade, with the US as its second-biggest partner and Seoul’s trade minister said they had reached agreement on revising the KORUS deal after weeks of negotiations.

Under the pact, Seoul will further open its auto market to US manufacturers, while accepting a 20-year extension until 2041 to a 25 percent US tariff on Korean pick-up trucks.

On steel, South Korea accepted an annual export quota of 2.68 million tonnes to the US, 70 percent of its average shipments in the past three years.

That amount will be exempted from the US steel tariffs, trade minister Kim Hyon-chong told reporters, but any excess will be liable to penalties. He described the negotiations as “fierce” but insisted: “As a negotiator, I can say it was a negotiating table where I had nothing to feel inferior about.”

Christine Lagarde, Managing Director of the International Monetary Fund (IMF), sits next to former German foreign minister Joschka Fischer during the “Europe Lecture” of the German Institute for Economic Research (DIW), in Berlin yesterday.

direction to further work.Chancellor Angela Merkel’s

conservatives and the centre-left Social Democrats offered some encouragement to that process in the coalition deal they sealed last month, agreeing to support devoting specific budget funds to economic stabilisation, social convergence and structural reform in euro zone.

Those funds — developed from the eurozone’s existing ESM bailout fund — should form the basis for a future bloc-wide “investment budget”, the parties said.

Lagarde said the initial

decision to get to work on building a rainy day fund could come quickly. “Within the next six months or so there could be a meeting of minds... on the general principles and timeline,” she said. Even if details took five

years to hammer out, the announcement would “let it be public that members of the cur-rency union stick together”.

For the eurozone to prepare for the next downturn, she urged members to develop a

modernised capital markets union, an improved banking union and to move towards greater fiscal integration - starting with a central fiscal capacity that would reassure investors.

Euro zone countries would contribute to the rainy day fund each year, building up assets in good times that they could then tap during a downturn.

In extreme circumstances, countries could borrow from the fund and repay loans with future contributions, she said. Transfers should be conditional on members sticking to EU fiscal rules.

Lagarde recommended that countries pay a premium in good times based on the benefits they receive in bad times, incentiv-ising members to streamline their economies and maintain fiscal discipline.

These twin steps would aim to avoid permanent transfers, also a priority of euro zone offi-cials’ own fund proposals.

EU officials are also consid-ering an unemployment re-insurance scheme, a fund to support investment during eco-nomic downturns and money to support structural reforms that help eurozone economies converge.

On a capital markets union, she called for enhanced regulation and upgraded oversight arrange-ments to handle a likely influx of financial services firms to conti-nental Europe after Brexit.

Lagarde welcomed signs of progress on a banking union.

Self-driving shuttle busA woman on a bike passes a self-driving shuttle bus, operated by the university hospital Charite and public transport company BVG, during a presentation to the media at the Charite Campus in Berlin, Germany, yesterday.

Remington Outdoor Co files for bankruptcyREUTERS

WASHINGTON: Remington Outdoor Co Inc, one of the largest US makers of firearms, filed for bankruptcy protection to carry out a debt-cutting deal with creditors amid mounting public pressure for greater gun control.

The company’s chief financial officer, Stephen Jackson, said in court papers that Remington’s sales fell sig-nificantly in the year before its bankruptcy, and that the company was having difficulty meeting requirements from its lenders.

Remington, America’s oldest gun maker, announced in February it would reduce its $950m debtload in a deal that will transfer control of the company to creditors. The company plans to wrap up its bankruptcy as soon as May 3, according to court papers. The filing comes after a February 14 shooting at a Parkland, Florida high school that killed 17 and spurred an intense campaign for gun control by activists.

Major US companies and retailers have taken some steps to restrict firearm sales.

Citigroup Inc said last week it will require new retail-sector clients to sell firearms only to customers who passed back-ground checks and to bar sales of high-capacity magazines.

Citi also said it was restricting sales for buyers

under 21, a move adopted by other large retailers, while Kroger Co’s superstore chain Fred Meyer said it will stop selling firearms entirely.

Cerberus Capital Man-agement LP, the private equity firm that controls Remington, will lose ownership in the bank-ruptcy. Remington’s creditors, which sources told Reuters include Franklin Templeton Investments and JPMorgan Asset Management, will exchange their debt holdings for Remington equity.

The creditors inked the debt-cutting deal prior to the Parkland shooting, and it is unclear if any have exited. The restructuring support agreement allows cred-itors to sell their holdings, but the buyer is bound by the deal. One investor told IFR, a Thomson Reuters news provider, that his firm had contemplated buying the Remington loans that will be exchanged into equity, which were offered at as low as 25 cents on the dollar.

Remington and other gun-makers have suffered from slumping sales in the past year. The chief executive of American Outdoor Brands Corp, maker of the Smith & Wesson gun, said on March 1 that some gun retailers reported increased sales after the Florida school shooting. Remington filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Dis-trict of Delaware.

China fuel demand boosts Sinopec profitAFP

SHANGHAI: China’s Sinopec, the world’s largest oil refiner, said its annual profit for 2017 grew 10 percent due to strength in its key fuels and chemical operations, and announced a record dividend payout.

The company’s Hong Kong-listed shares climbed more than three percent yesterday following the earnings announcement, and were up 2.88 percent at HK$6.78 in late afternoon trade. However,

its Shanghai-listed shares slipped 2.78 percent to 6.64 yuan.

Net profit grew 10.13 percent to 51.1bn yuan ($8.1bn), the company, whose official name is China Petroleum & Chemical Corp, said. The company also proposed a 0.5 yuan per share dividend for 2017. Bloomberg News said it was the largest such payout by the company since it went public in 2000.

Sinopec largely credited solid demand for fuels stemming from China’s continued

economic growth for the profit gain. It said domestic con-sumption of refined oil products such as petrol, diesel and ker-osene grew 6.6 percent com-pared to 2016, with gasoline demand rising 10.1 percent and kerosene up 11.7 percent.

The company also benefited from a policy shift under Pres-ident Xi Jinping aimed at raising natural gas consumption and lessening reliance on heavily pol-luting coal, with gas consumption rising 15.3 percent last year.

France beats EU deficit targets in boost for MacronAFP

PARIS: France reported a smaller-than-expected budget deficit for 2017 yesterday, respecting EU rules on over-spending for the first time in a decade in further positive economic news for President Emmanuel Macron.

The French national statistics agency INSEE reported that the budget deficit was equivalent to 2.6 percent of gross domestic product last year, better than expectations of 2.9 percent and far below the 3.4 percent of 2016.

Though a clampdown on spending had begun under pre-vious Socialist president Francois Hollande, Macron’s government

claimed credit for the efforts since his election last May.

“We’ve honoured our com-mitments,” Finance Minister Bruno Le Maire told France Info radio, as he welcomed the “good news” on Friday morning.

“It is proof that the strategy laid out by the president of the Republic on reducing public spending, realigning our public accounts and growth is the right one,” he said.

Macron, a 40-year-old cen-trist, has vowed to balance France’s books by the end of his term in 2022 which would be the first time the country was in the black since the 1970s. One of the first acts of his government was to pass an interim budget for the

second half of 2017 which included unpopular measures to cut housing benefits and defence spending.

But rather than measures to shrink the state, INSEE stressed that the improved budget for 2017 was mostly down to increased tax receipts from higher economic growth, which hit 2.0 percent over the year.

Public spending rose by 2.5 percent in V2017, after an increase of 1.0 percent in 2016, with most of the spike coming from local authorities, the sta-tistics agency said. Overhauling the country’s public finances is seen as essential for Macron as he pushes for broader reforms in the European Union, including

new public spending efforts for weaker members.

“To be continued, in order to get our accounts in order after 40 years of imbalance!” Budget Minister Gerald Darmanin wrote on Twitter.

France has broken EU rules on budget deficits every year for the last decade, consistently exceeding a limit of 3.0 percent of GDP under rules which bind all members of the bloc.

France and Spain are now the only eurozone countries to remain under the EU’s “excessive deficit procedure”. To be given the all clear, Paris must register a deficit-to-GDP ratio of under 3.0 percent for another year.

It also remains in breach of

debt rules with its debt equiv-alent to 97 percent of GDP at 2.2 trillion euros in 2017, far above an EU threshold of 60 percent.

France’s public finance watchdog urged Macron to go further in reducing the country’s deficit and debt at the beginning of February. The Cour des Comptes, the watchdog, echoed remarks from the European Commission, which polices fiscal policy in the EU, and the Inter-national Monetary Fund which remain concerned by the scale of French overspending.

“We are dancing on a volcano that is rumbling ever louder,” Prime Minister Edouard Philippe told lawmakers in July, referring to the debt problem.

26 TUESDAY 27 MARCH 2018BUSINESS

QATAR STOCK EXCHANGE

QE Index 8,711.91 0.47 %

QE Total Return Index 15,303.03 0.47 %

QE Al Rayan Islamic

Index - Price 2,241.68 0.32 %

QE Al Rayan Islamic Index 3,592.79 0.32 %

QE All Share Index 2,566.26 0.49 %

QE All Share Banks &

Financial Services 2,853.30 0.34 %

QE All Share Industrials 2,939.65 0.35 %

QE All Share Transportation 1,824.51 1.37 %

QE All Share Real Estate 1,880.11 0.16 %

QE All Share Insurance 3,166.46 3.02 %

QE All Share Telecoms 1,083.94 0.67 %

QE All Share Consumer

Goods & Services 5,317.56 0.26 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

26-03-2018Index 8,711.91

Change 40.75

% 0.47

YTD% 2.21

Volume 6,777,036

Value (QAR) 158,744,196.78

Trades 3,159

Up 10 | Down 27 | Unchanged 325-03-2018Index 8,752.66

Change 73.04

% 0.83

YTD% 2.69

Volume 11,598,506

Value (QAR) 198,644,827.08

Trades 3,306

EXCHANGE RATE

GOLD QR158.2973 per grammeSILVER QR1.9512 per gramme

Index Day’s Close Pt Chg % Chg Year High Year Low

All Ordinaries 5901.4 -27.6 -0.47 6256.5 5887.3

Cac 40 Index/D 5115.93 20.71 0.41 5567.03 5051.21

Dj Indu Average 23533.2 -424.69 -1.77 26616.71 20379.55

Hang Seng Inde/D 30548.77 239.48 0.79 33484.08 29129.26

Iseq Overall/D 6507.08 -7.83 -0.12 7257.41 6410.26

Kse 100 Inx/D 45083.57 53.35 0.12 45494.52 40169.62

S&P 500 Index/D 0 0 0 2872.87 2532.69

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 5.1473 QR 5.2198

Euro QR 4.4924 QR 4.5559

CA$ QR 2.8037 QR 2.8589

Swiss Fr QR 3.8258 QR 3.8791

Yen QR 0.03434 QR 0.0350

Aus$ QR 2.7938 QR 2.8498

Ind Re QR 0.0557 QR 0.0567

Pak Re QR 0.0312 QR 0.0323

Peso QR 0.0692 QR 0.0705

SL Re QR 0.0231 QR 0.0236

Taka QR 0.0434 QR 0.0444

Nep Re QR 0.0348 QR 0.0355

SA Rand QR 0.3095 QR 0.3158

INTERNATIONAL MARKETS - A LIST OF SHARES FROM THE WORLD

Aarti Drugs-B/D 501 -9 1273

Aban Offs-A/D 161.55 3.4 232950

Acc Ltd-A/D 1525.55 -2.25 13297

Ador Welding-B/D 385 6.55 5402

Aegis Logis-A/D 253.5 5 23423

Alembic-B/D 55.6 1.4 89129

Alok Indus-T/D 2.72 -0.14 5548607

Apollo Tyre-A/D 267.65 10.5 100014

Asahi I Glass-/D 330 0 9455

Ashok Leyland-/D 144.15 2.1 1206893

Bajaj Hold-A/D 2631.65 123.6 1431

Ballarpur In-B/D 12.59 -0.22 1379302

Banaras Bead-T/D 57.5 2.6 5170

Bata India-A/D 742.75 34.8 96978

Beml Ltd-A/D 1056.4 2.6 32869

Bhansali Eng-B/D 165.3 2 125788

Bharat Bijle-B/D 1541 67.35 173774

Bharat Ele-A/D 142.75 2.95 280577

Bharat Heavy-A/D 82.4 1.05 572384

Bharatgears-B/D 173.45 3.55 14360

Bhartiya Int-B/D 395.4 -2.4 10650

Bom.Burmah-X/D 1133.95 23.45 41849

Bombay Dyeing-/D 237.2 -2.1 534228

Canfin Homes-A/D 523.1 19.05 110566

Caprihans-X/D 84.9 1.35 5015

Castrol India-/D 201.05 2.05 143441

Century Enka-B/D 296.15 -0.1 8543

Century Text-A/D 1138 12.25 145276

Chambal Fert-A/D 162.6 -0.3 70936

Chola Invest-A/D 1422 33.45 169967

Chowgule St-Xt/D 13.45 -0.7 2145

Cimmco-T/D 76.95 -0.55 17213

Cipla-A/D 540.75 3.45 387195

City Union Bk-/D 168.3 -1.4 27997

Colgate-A/D 1038 2.55 29528

Container Cor-/D 1199.75 -10.85 6769

Dai-X/D 396 2.55 14380

Dcm Financia-T/D 2.14 0.1 1060

Dcm Shram Ind-/D 194.3 -10.8 16152

Dhampur Sugar-/D 134.9 -7.1 108885

Dr. Reddy-A/D 2090.1 16.3 31583

E I H-B/D 157.3 -1.15 9059

E.I.D Parry-A/D 275.15 -6.7 16054

Eicher Motor-A/D 27899.95 -19.35 2086

Eimco Elecon-B/D 420 6 2376

Electrosteel-B/D 25.3 0.25 163822

Emco-B/D 10.2 0.65 188205

Escorts Fin-Xt/D 4.2 0.2 6300

Escorts-A/D 807.55 12.8 51497

Eveready Indu-/D 364.15 4.85 17283

F D C-B/D 241.05 -4.75 11382

Federal Bank-A/D 91.45 0.9 444143

Ferro Alloys-X/D 8.72 -0.45 248316

Finolex-A/D 654 -4.75 6662

Forbes-B/D 2989.8 82.9 6941

Gail-A/D 424.75 -13.5 391039

Galada Power-X/D 5.82 -1.18 2325

Gammon India-T/D 4.2 -0.22 20625

Garden P -B/D 32.25 -0.3 3993

Godfrey Phil-A/D 807.45 6.6 6144

Goodricke-X/D 298.3 -9.45 26322

Goodyear I -B/D 1116.8 -1.5 4915

Hcl Infosys-A/D 51.5 1.65 666969

Him.Fut.Comm-A/D 25.95 0.6 3327650

Himat Seide-X/D 341 0.7 12814

Hind Motors-T/D 7.05 -0.19 207191

Hind Org Chem-/D 23.25 -1 152901

Hind Unilever-/D 1320.5 20.75 109955

Hind.Petrol-A/D 332.7 -6.1 263478

Hindalco-A/D 210.9 5 583228

Hous Dev Fin-A/D 1832.6 47.45 1087019

Idbi-A/D 72.1 0.3 5472183

Ifb Ind.Ltd.-B/D 1210 -1.25 5812

Ifci Ltd-A/D 19.4 -0.2 1025055

Ift Agro-T/D 521 -23.65 5609

India Cement-A/D 141.2 3.2 188298

India Glycol-B/D 452 11.15 25154

Indian Hotel-A/D 124.9 -2.5 47186

Indo-A/D 84.15 -2.75 107425

Indusind-A/D 1760.4 10.2 40842

J.B.Chemical-B/D 290 2.55 3537

Jagatjit Ind-X/D 98 -5 2567

Jagson Phar-B/D 26.75 0.5 6611

Jamnaauto-B/D 77.35 -0.5 116459

Jbf Indu-B/D 91.6 -3.35 105978

Jct Ltd-X/D 2.84 -0.02 763913

Jindal Drill-B/D 150.05 -4.2 78654

Jktyre&Ind-A/D 148.85 5.4 120752

Kabra Extr-B/D 115.55 1.35 13199

Kajaria Cer-A/D 575.6 10.35 13466

Kakatiya Cem-B/D 221.7 -11.6 11642

Kalpat Power-B/D 463.35 4.6 3620

Kalyani Stel-B/D 283 4.85 36430

Kanoria Chem-B/D 65.15 -0.5 16475

Kg Denim-X/D 50 0.95 69582

Kilburnengg-X/D 73 -2.55 19693

Kinetic Eng-Xt/D 68.45 0.1 15382

Kopran-B/D 55.4 -1.35 88431

Lakshmi Elec-X/D 591 -10.25 2800

Lakshmi Mach-A/D 6658.2 96.3 2161

Lloyd Metal-X/D 15 1.1 352581

Lumax Ind-B/D 2200 6.9 2177

Lupin-A/D 739.8 4.05 128191

Lyka Labs-B/D 45.2 -0.35 35627

Mafatlal Ind-X/D 260 -3.55 2352

Mah.Seamless-B/D 417.5 -8.85 15820

Mangalam Cem-B/D 315.1 10.9 9141

Maral Overs-B/D 31.4 -0.05 20046

Mastek-B/D 534.45 -0.85 94174

Max Financial-/D 457.65 10.8 49727

Mrpl-A/D 112.05 1.65 67239

Nahar Spg.-B/D 87.5 1 43542

Nation Alum -A/D 67.35 0.9 574134

Navneet Edu-B/D 143.9 3.75 152707

Neuland Lab-B/D 701.25 4.7 13334

O N G C-A/D 178.65 1.4 479140

Ocl India-B/D 1314.9 59.75 1290

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Savita Oil-B/D 1450 2.9 1122

Sterling Tool-/D 359.8 6.15 2856

Tanfac Indu-Xt/D 116.1 3 15479

Tanfac Indu-Xt/D 116.1 3 15479

Thirumalai-B/D 1706.85 0.3 14822

Til Ltd.-B/D 402.6 -23.85 2728

Timexgroup-T/D 43.1 0.45 102567

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Ucal Fuel-B/D 237.85 -2.55 25310

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Ultramarine-X/D 274.8 -9.45 48967

Unitech P -B/D 5.62 -0.08 6371563

Univcable-B/D 124.35 2.2 4180

3I Group/D 877.8 16.4 631577

Assoc.Br.Foods/D 2435 -11 189790

Barclays/D 206.5 2.15 18163033

Bp/D 471.95 9.5 9141887

Brit Am Tobacc/D 3907 -14.5 1095429

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Gkn/D 431.1 2.1 2129245

Hsbc Holdings/D 671.3 4.7 6088125

Kingfisher/D 292.3 -4.4 3984554

Land Secs./D 922.9 -1.8 673874

Legal & Genera/D 255.9 1.7 3291568

Lloyds Bnk Grp/D 65.06 0.3 41688983

Marks & Sp./D 271.1 2.7 3045495

Next/D 4987 3 344479

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Rank Group/D 208 -3 2343

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Whitbread/D 3702 39 115599

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LONDON

The firms speak softly, but because they own trillions of dollars’ worth of stock, their voices travel far.

27TUESDAY 27 MARCH 2018 BUSINESS VIEWS

BCORY BOOKERBLOOMBERG

It is perhaps the most important economic policy-making and regulatory position many people have never heard of: the president of the Federal

Reserve Bank of New York.Although there are 12 regional Fed presidents

across the country, the president of the New York Fed is first among equals. Together with the chairman of the Federal Reserve, the New York Fed president defines the conditions under which Americans borrow and lend; how they buy cars and houses, and manage their growing consumer debt; whether busi-nesses will have demand for their products and services; and whether the pay of American workers will be sufficient for their families and their futures. She, or he --although it has always been a “he” -- shapes the conditions of our prosperity as well as our poverty.

New York Fed President William Dudley is stepping down this summer, and a search committee is in the process of identifying a successor. Now more than ever, the Fed needs a leader who will put the interests of working Americans first.

Part of that is finding an individual with a keen understanding of not just the financial sector, as critical as it is, but also the broader economy within which it operates: the manufacturing sector, the technology sector, the service sector and agriculture. Over the 100-plus year history of the New York Fed, each of its 10 presidents has worked at a bank or financial institution either immediately before or

after his tenure. It was official neglect of mis-conduct in the financial sector that helped produce the 2008 crisis, so Amer-icans should intuitively understand the importance of getting an honest and independent broker in this position.

We should also insist that the New York Fed look for an individual who will bring new perspectives to the leadership of our economy. The New York Fed has never had a woman or a person of

colour at its helm, and the Federal Reserve Bank only just last year added its first black regional bank pres-ident. If we’re serious about creating an inclusive and sustainable economy, no one should be left on the sidelines. Study after study shows that organizations and companies with diverse leadership perform better and are more innovative than entities with homogeneous leadership.

Unfortunately, it isn’t easy for Americans to weigh in on the selection. The position is neither elected by the public nor appointed or confirmed by elected officials. In making their decision, the members of New York Fed Board of Directors should seek the input of Americans in different parts of the country, in rural and urban areas, where they can hear from communities about their needs.

The stakes couldn’t be higher. The recovery from the 2008 financial crisis has been excruciatingly slow for too many middle-class families, as stock market gains have far outpaced increases in wages. Low-wage workers haven’t seen a raise in real dollars in four decades, and close to half of all American workers are making less than $15 an hour. Although the recession hit the entire middle class hard, not all have recovered equally and at the same pace; today, black Americans are the only racial group making less today than they were in 2000. In my home state of New Jersey, black and Hispanic women have higher unemployment rates than before the Great Recession, and the unemployment rate for black men sits persistently at 9 percent.

The choice of the next leader of the New York Fed is an opportunity to influence how all Americans will fare over the next decade. We can’t let this opportunity go to waste.

Cory Booker is a US senator from New Jersey.

Over the 100-plus year history of the New York Fed, each of its 10 presidents has worked at a bank or financial institution either immediately before or after his tenure.

European Union policymakers have enacted measures expected to keep the cost of pollution on an upward trajectory through 2030, prompting hedge funds that abandoned the market to pile back in.

Europe’s $38bn carbon market finally doing its job on pollution

JEREMY HODGES, EWA KRUKOWSKA & MATHEW CARR BLOOMBERG

Europe’s $38bn a year carbon market is finally starting to work the way

it was intended, reining in pol-lution with a minimum of squealing from industry.

Thirteen years after it was created to limit carbon-dioxide emissions, prices for the allowances are rising. European Union policymakers have enacted measures expected to keep the cost of pollution on an upward tra-jectory through 2030, prompting hedge funds that abandoned the market to pile back in.

“For a five-year-plus period, this market was in the desert,” said Per Lekander, a

fund manager at Lansdowne Partners UK LLP in London. “What’s hap-pened over the p a s t f i v e months is the i n v e s t m e n t community is getting behind it again and putting on positions.”

Big pol-luters have h e a r d t h e message and are starting to adapt. From a u t o m a k e r Volkswagen AG to RWE AG, which is Ger-many’s largest power gen-erator, industry is cleaning up

its smokestacks by turning toward renewables and bracing for a time when coal plants are regulated out of existence. Some are buying before allowances get even more expensive.

All this is happening without noticeable complaints from industry in part because policymakers from German Chancellor Angela Merkel to UK Prime Minister Theresa May have made it clear they want to phase out coal within the next decade, slashing greenhouse gases. Companies favour the carbon market because it gives them more flexibility on how to comply with tighter emissions rules than regulation or taxes. The alternative to a market could be much worse for industry.

It’s also a good sign for the global effort to rein in climate change, showing that market mechanisms and government policy can persuade industry to step away from fossil fuels in a way that doesn’t create turmoil in the broader economy. Europe’s carbon market is the biggest of more than 45 systems working worldwide and a model being tried everywhere from China to Mexico and parts of the US.

“We are very much in favor of the European Emis-sions Trading System,” said Klaus Schaefer, chief exec-utive officer of the German power generator Uniper SE. “In order to deliver the CO2 reductions that we all agreed to in Europe, you will have to see higher prices.”

Carbon trading wasn’t an immediate success. Europe’s permits surged to more than €29 a ton in 2006 and 2008, only to plunge more than 90 percent after the financial crisis hobbled industry and helped create a surplus of the pollution rights. That glut took policymakers years to mop up, culminating in an agreement that got final approval only last month.

Utilities like Uniper will feel the brunt of the impact of higher carbon prices -- gov-ernments cut off the supply of free permits to most power generators while doling out allocations for industries like

steelmakers. EU emission allowances are the best per-forming energy commodity this year, according to a report by Bloomberg New Energy Finance. They’ve surged 57 percent to as much as €13.04 for each ton emitted on March 22 on the ICE Futures Europe exchange.

Higher carbon prices drive up the cost of using hard coal and lignite to run power plants. It’s one of the mecha-nisms the 28-nation European Union is using to move industry away from the most polluting fuels and reaching the goals for curbing climate change set out in the 2015 Paris Agreement.

“Climate policy will drive accelerating coal phase-outs in the next few years,” said Phil MacDonald, an analyst at Sandbag, an environmental research group.

Jan Kresnik, a portfolio manager at broker Belektron, said prices of €30 a ton or more “could be reachable.” BNEF estimates it will reach €32 by 2023.

All this is in step with the ideas that percolated over the past two decades from econ-omist Richard Sandor, father of both the modern carbon market and interest-rate futures and derivatives on the Chicago Board of Trade. His theory was that putting a price on pollution would be the most efficient way to curtail the greenhouse gas emissions damaging the atmosphere. The idea won official backing at the United Nations climate talks in Kyoto, Japan, in 1997.

Some of the biggest energy users remain concerned about the upward drift in prices. Steelmakers especially blame the carbon market for reducing their competi-tiveness. At Britain’s EEF group representing manufac-turers, Roz Bulleid, who is head of climate policy, sup-ports emissions trading but says her members are

“increasingly jaded” about the impact.

“The original intention to deliver emissions reductions at least cost has been replaced by a focus on achieving a certain carbon price,” Bulleid said. “There are a number of overlapping policies in this area muddying investment signals. Overseas competitors are not facing the same policy costs.”

The European Steel Asso-ciation, which represents companies including Arcelor-Mittal and Thyssenkrupp AG, said higher carbon prices create “additional problems” for an industry suffering with increasing competition from Asian manufacturers.

“We need profitability, and for that carbon prices are not helping,” said Axel Eggert, director-general of the Brussels-based steel industry group. “They are just sucking out the small profits our com-panies are making.”

Too much carbon market intervention from the EU is also seen as bad for business.

“The tendency of EU and national policymakers to seek to increase the price of emis-sions certificates, even though the emissions cap is adhered to, significantly reduces market predictability and makes Europe a less attractive region to invest,” said a spokesperson for Dow Chemical Co, which has plants in Belgium and Germany as well as a research facility in Switzerland.

Even so, the broader response of business to higher carbon prices has been sur-prisingly muted -- and even supportive. Britain’s main business lobby group, the CBI, believes “a strong European carbon price has the best potential to reduce green-house gas emissions in the lowest-cost way,” according to Michelle Hubert, head of energy and climate at the London-based group.

New York Fed leadership needs a new perspective

A file picture of ArcelorMittal plant at Belval district, located in south-western Luxembourg.

Nuns, funds and guns: The firearms debate on Wall StreetMARLEY JAY AP

Some of Wall Street’s heaviest hitters are stepping into the national debate on guns as

investment firms ask firearms makers what they are doing about gun violence.

The firms speak softly, but because they own trillions of dollars’ worth of stock, their voices travel far. And they’re now joining forces with some unusual allies, including smaller and untradi-tional investors. In this context, the investment fund BlackRock, which owns big stakes in three different gun makers, might end up working

alongside a group of nuns. Sister Judith Byron, the director and coordinator of the Northwest Coa-lition for Responsible Investment, says her group and BlackRock appear to have similar ideas when it comes to gun manufacturers and retailers. Following the killing of 17 students and teachers at Marjory Stoneman Douglas High School in Parkland, Florida, funds like BlackRock started asking gun manufacturers what they are doing to reduce the risks of gun violence, and asking retailers how much they make from selling guns.

Byron says her group, a coa-lition of religious communities and health care systems, invested in

firearms makers a decade ago and has been working on gun safety issues for years. In the last few months the coalition introduced resolutions pushing American Outdoor Brands, Sturm Ruger and retailer Dick’s Sporting Goods to give reports to investors about the steps they are taking to reduce gun violence.

“We’re hoping we can engage these big investors and encourage them to vote for our resolutions,” she says. Some larger investors have similar views. The biggest public pension funds in the US, CalPERS, recently refused to sell its investments in companies that sell assault rifles. It says that by

remaining an investor, it’s been able to get those companies to make positive changes.

The nuns aren’t protesters, and they don’t carry props or signs to disrupt board meetings, although they sometimes work alongside groups that use those tactics. Byron says some of the share-holder meetings she’s attended have been downright pleasant, with investors and board members thanking her for asking questions. Support from investment firms was crucial to the coalition’s big success last year when, after decades of work, it backed a suc-cessful resolution that required oil giant ExxonMobil to disclose the

effects climate change is having on its business.

Erik Gordon, a professor at the University of Michigan’s Ross School of Business, said com-panies are often reluctant to risk any sales in order to do the responsible thing. But it does sometimes happen, as when CVS stores stopped selling cigarettes in 2014. He said activists deserve most of the credit for getting the funds to speak out.

“BlackRock didn’t wake up one morning and say, ‘We’re going to take a different approach to investing, it’s the right thing to do,’” he said. “It’s a reaction to the activists.”

28 TUESDAY 27 MARCH 2018

INsightback to BUSINESS

CAPITALCOMMENT

A $14bn legal test is latest threat to Norway’s oil future

MIKAEL HOLTER/BLOOMBERG

Norway’s oil industry has one more thing to worry about.

After an unprecedented lawsuit against Arctic drilling, environmentalists have launched a new legal battle to challenge a tax incentive that’s been a corner-stone of the country’s policy to stimulate oil exploration.

The move comes at a bad time for Norway, which needs to step up up the search for new resources if it wants to avoid a sharp output decline from the middle of next decade. It adds to existing headwinds for the coun-try’s biggest industry, which has emerged stronger from a bruising slump but is facing an intensifying debate over its sustainability.

At stake is a tax mechanism that allows unprofitable oil companies to claim 78 percent of exploration costs as a cash refund, instead of deducting the expenses over time. The government has paid out 109 billion kroner ($14bn) since 2005 to explorers such as Lundin Petroleum AB and Repsol SA. It helped attract more companies to Norway, nearly doubling the pace of exploration and leading to key discoveries such as the multi-billion-barrel

Johan Sverdrup field.Environmental group

Bellona last year filed a com-plaint to the EFTA Surveillance Authority, a watchdog that makes sure Norway complies with European Union rules. Should ESA decide the refund is illegal state aid, oil com-panies would need to return some of the cash and Norway dismantle the program.

“It would be serious,” Petroleum and Energy Minister Terje Soviknes said in an interview. “We need more exploration activity.” Climate activists are increasingly turning to the law to fight the oil industry. Greenpeace has

also sued Norway -- unsuccessfully so far -- to stop licenses in the Barents Sea. Opponents say the explo-ration refund encourages the search for oil the world can’t afford to burn.

Read more about the debate over Norway’s oil future ESA will by the end of the year decide on whether to for-mally investigate, which could take 12 to 18 months, Gjermund Mathisen, the director of competition and state aid, said in an email. Norway could appeal in the case of a loss. It has rebuffed claims that the program constitutes illegal aid, most recently in a February 9 letter to ESA.

Erling Hjelmeng, a law professor at the University of Oslo, puts the probability of Norway losing at more than 50 percent. “This is pretty open,” he said in a phone interview.

But the financial impact would be limited since the amount companies would be forced to return would likely be much lower than what has been paid out since 2005, according to Hjelmeng and Oyvind Olimstad, a partner at law firm Selmer Advokatfirma DA.

That’s because the financial advantage is limited to the value of getting an immediate refund rather than a later tax deduction, they said. Many of the companies are also now paying taxes, making them eligible for deduc-tions that would even out the slate.

First ‘negative emissions’ plant begins operation in Iceland

There’s a colorless, odorless, and largely benign gas that humanity just can’t

get enough of. We produce 40 trillion kg of carbon dioxide each year, and we’re on track to cross a crucial emissions threshold that will cause global temperature rise to pass the dangerous 2°C limit set by the Paris climate agreement.

But, in hushed tones, climate scientists are already talking about a technology that could pull us back from the brink. It’s called direct-air capture, and it consists of machines that work like a tree does, sucking carbon dioxide (CO2) out from the air, but on steroids—capturing thousands of times more carbon in the same amount of time, and, hopefully, ensuring we don’t suffer climate catastrophe.

There are at least two reasons that, to date, conver-sations about direct air capture have been muted. First, climate scientists have hoped global carbon emissions would come under control, and we wouldn’t need direct air capture. But most experts believe that ship has sailed. That brings up the second issue: to date, all esti-mates suggest direct air capture would be exorbitantly expensive to deploy.

For the past decade, a group of entrepreneurs—partly funded by billionaires like Bill Gates of Microsoft, Edgar Bronfman Jr. of Warner Music, and the late Gary Comer of Land’s End—have been working to prove those esti-mates wrong. Three com-panies—Switzerland’s Clime-works, Canada’s Carbon Engi-neering, and the US’s Global Thermostat—are building machines that, at reasonable costs, can capture CO2 directly from the air. (A fourth company, Kilimanjaro Energy, closed shop due to a lack of funding.)

Over the past year, I’ve been tracking the broader field of carbon capture and storage, which aims to capture

emissions from sources such as power plants and chemical fac-tories. Experts in the field look at these direct-air-capture entrepreneurs as the rebellious kids in the class. Instead of going after the low-hanging fruit, one expert told me, these companies are taking moon-shots—and setting themselves up for failure.

Climeworks just proved the cynics wrong. On October 11, at a geothermal power plant in Iceland, the startup inaugu-rated the first system that does direct air capture and verifiably achieves negative carbon emis-sions. Although it’s still at pilot scale—capturing only 50 metric tons CO2 from the air each year, about the same emitted by a single US household or 10 Indian households—it’s the first system to convert the emissions into stone, thus ensuring they don’t escape back into the atmosphere for the next mil-lions of years.

The impossibility of direct air capture can be illustrated by simple physics. Imagine if you were allowed to eat as many M&M’s as you wanted—as long as you only eat red ones. If in a bag of M&M’s there was one red M&M for every 10 pieces of candy, it would be easy to find them and eat them with glee. But imagine if the

concentration fell to one in every 2,500. You might give up searching for even a single M&M.

At a coal-power plant, the exhaust flue gas contains about 10% carbon dioxide (i.e., about one in 10 gas molecules are CO2). Capturing the green-house gas at these relatively high concentrations requires less energy than capturing it from the air, where it is present at just 0.04% concen-tration (about one in 2,500 gas molecules). A 2011 report from the American Physical Society estimated that it may cost between $600 and $1,000 per metric ton of CO2 captured from the air. Capturing it at the source—at a coal-burning plant, for example—could cost less than one-tenth of that.

But air capture still matters. First, we currently don’t have any possible way to deal with CO2 released by cars, ships, and planes. Second, because we are on track to emit more CO2 than we need to keep under the 2°C limit, we likely need a means of sucking back up some of that extra greenhouse gas.

(This article was originally published by World Economic Forum in in collaboration with Quartz)

An exemption of the European Union from US metal tariffs

isn’t a victory for free trade, even if it reduces the risk of an escalation in the conflict.

Jens WeidmannPresident Bundesbank

TOP FASTEST GROWING ECONOMIESGold steady as global trade war recedesREUTERS

LONDON: Gold prices were steady yesterday after hitting their highest in five weeks as the market weighed an easing of global trade tensions against support from tempered expec-tations of US interest rate increases. Spot gold was up 0.1 percent to $1,347.86 per ounce by 1218 GMT, after hitting its loftiest since February 19 at $1,350.76. US gold futures for April delivery shed 0.1 percent to $1,348.20 per ounce. The United States and South Korea agreed to revise a trade pact criticised by U.S. President Donald Trump, Seoul said, with US automakers winning improved

market access and Korean steelmakers hit with quotas but avoiding hefty tariffs.

The Wall Street Journal, meanwhile, reported that the United States and China had started negotiating to improve U.S. access to Chinese markets. Analysts said gold continued to be supported by last week’s statement from the US Federal Reserve which forecast at least two more hikes for 2018. Many had expected three more increases.

“There is no groundbreaking news on the trade war front and gold is taking a bit of a pause,” said ETF Securities commodities strategist Nitesh Shah, adding that the two main drivers in gold were dampened interest rate

expectations and global trade disagreements. “There is a bit of wait and see before the Trump administration puts out any details on what’s included in the list of tariffs,” Shah said.

Gold is sought as a store of value in times of political and financial uncertainty. The dollar index, which measures the greenback against six major currencies, was down 0.2 percent at its lowest since Feb-ruary 20.

Meanwhile, investors con-tinued to monitor other devel-opments such as Trump’s appointment of John Bolton as national security adviser and fresh tensions between Saudi Arabia and Yemen’s Houthi militia.

At stake is a tax mechanism that allows unprofitable oil companies to claim 78 percent of exploration costs as a cash refund, instead of deducting the expenses over time.

For the past decade, a group of entrepreneurs—partly funded by billionaires like Bill Gates of Microsoft, Edgar Bronfman Jr. of Warner Music, and the late Gary Comer of Land’s End—have been working to prove those estimates wrong.