Friday, October 28, 2016Muharram 27, 1438 AH

BUSINESSGULF TIMES

Qualcomm to buy NXP in $47bn deal

Egypt suff ers currency market crisis

NEW FORAYS | Page 12LAGARDE VIEW | Page 2

Woqod Q3 net profi t exceeds QR850mnWoqod’s third-quarter net

profi t exceeded QR850mn, the company announced

yesterday. In the same period last year, Woqod had earned a net profi t of QR960mn.

The company’s earnings per share (EPS) amounted to QR8.52 in the third quarter compared to QR9.70 in the same period last year.

The EPS decline was due to the is-sue of 8% bonus shares in 2016.

Woqod’s total assets reached QR11bn, while shareholders’ equity reached QR7.2bn for the period that ended in September.

Woqod announced the results after a meeting of the company’s board of directors here yesterday. The meet-ing was chaired by Woqod chairman Sheikh Saoud bin Abdulrahaman al-Thani.

Besides approving Woqod’s fi nan-cial results during the third quar-ter of 2016, the board reviewed the progress of various stages of current and future projects, and provided di-rection.

The board discussed a “draft new agreement” to be signed soon be-tween Qatar Petroleum and Woqod concerning the purchase and sale agreement of petroleum products (SPA), which will be “applied” later.

Woqod CEO Ibrahim Jaham al-Ku-wari said currently 40 fuel dispens-ing stations including the mobile ter-minals were operating in the country, and work was under way on a number of new projects across Qatar.

Three new fuel stations at Old Ghanem, Al Thameed and Hamad International Airport (HIA) are ready to start operations, he said. Old Ghanem and Al Thameed fuel sta-tions will be inaugurated this month itself, while the one at HIA will open “very soon”.

In November, three more fuel sta-tions will start operations, Woqod said. They are located at Mushaireb (on Al-Rayyan Road), Al-Mashaf (North of Al-Wukair) and Al-Rayyan (Qadeem).

Eight fuel stations at Al Muntazah, North Al Wakrah, Madinat Shamal, Abu Nakhla (Salwa Road), Wadi Abu Saleel, Al Wukair, Al Khor and Lusail have almost been completed and are expected to start operations by the year-end.

The work on four other fuel sta-tions – Um Ghwalina, Salatah Jadeed, Al Thumama and Jabal Teilib in Lusail City – is progressing fast and these are expected to be com-pleted in 2017.

Woqod said four projects relating to fuel stations are in the “tendering and award” stage. These projects – Salatah Qadeema, Khaleej West, Al Kurana and Umm Qarn – are expect-ed to be completed next year.

Three projects are in the “design and bidding stage.” They will be located at Madinat Mawatir, Education City and Ras Laff an. These projects are expected to be completed next year.

Woqod said the process of allo-cating land for more fuel stations is underway across the country. Woqod is coordinating with the Ministry of Municipality and Environment to al-locate some 34 suitable locations to set up fuel stations so that most parts of Qatar are covered. The focus will be on the South Motorway and Doha Express road, Woqod said.

Seven more vehicle inspection centres will come up at Shehaniyah, Al-Khor, Al-Wukair, Al-Mazrooah, Madinat Shamal, Al-Wajba and Me-saimeer South. These are expected to be completed next year.

Recently, three vehicle inspection centres were opened at Wadi Al-Ba-nat, Al-Mamoora and Al Wakrah.

LPG sales (refi lling and new) dur-ing the period (third quarter) grew by 5.7% and reached 1.2mn (metallic cylinders) and 646,000 (Shafaf cyl-inders – 6 and 12kg).

The total volume of sales of petro-leum products (diesel, gasoline and jet fuel) has increased by 11.4% dur-ing the third quarter of this year and reached 2.4mn litres compared to the same period last year.

Qatar Airways Airbus deal not dead as some 737s are set for new partnerA320neo may take two years to prove credentials, al-Baker says; slow delivery of A350s was partly behind 777 purchase

BloombergAmsterdam

Qatar Airways said some of the 60 737 Max jetliners it ordered this month from Boeing Co are

destined for another carrier the Gulf operator is buying, and that Airbus Group still has time to rescue a $6.4bn deal for the competing A320neo mod-el.

“The 737 is for us to grow our nar-row-bodies and at the same time for our investment in another carrier,” chief executive offi cer Akbar al-Baker said in an interview, adding that Airbus must prove the troubled Neo’s creden-tials in-service if he’s to cease cancel-ling planes as they’re due for handover.

Qatar Airways has refused to take the revamped A320 after cooling issues with the jet’s Pratt & Whitney engines compromised its performance in hot conditions. Though Pratt says it has developed a fi x, al-Baker announced on October 7 a $6.9bn deal for the Max 8, marking his company’s fi rst narrow-body order from Boeing since 1979.

That doesn’t mean Qatar Airways’ 50-plane Neo deal is dead, though a temporary solution to its problems isn’t suffi cient, the CEO said yesterday in Amsterdam.

“When you put a bandage on a big wound that doesn’t mean it is fi xed,” he said. “I have to be convinced that it is. I want others to operate and convince me it is OK.” That could take a year or two, he added.

While al-Baker didn’t specify which other carrier might get some of the Max planes, Qatar Airways agreed the purchase of a 49 stake in Meridiana of Italy in July and said at the time it intended to help renew a fl eet that in-cludes 30-year-old McDonnell Doug-las MD-80-series aircraft.

The Boeing jets will be delivered starting next year and Qatar Airways is negotiating to take some current-generation 737s in the interim, he said.

The CEO said Airbus is still strug-gling with the A350 twin-aisle model after deliveries were disrupted by a shortage of interior fi ttings from sup-pliers including Zodiac.

Qatar Airways had been due 12 A350s this year but has received only three, and an order for 10 Boeing 777-300ER jets announced at the same time as the Max deal is aimed in part at fi lling the potential gap going forward,

he said. The 30 787-9 Dreamliners that were also announced will replace the smaller 787-8 variant, he said.

Airbus said on Wednesday it will pull out the stops to meet its target of 50 A350 deliveries this year, meaning

it will have to ship 24 in the current quarter. The manufacturer has ranks of planes waiting to be fi tted with seats and interiors, though meeting the goal will still be “a hell of job,” chief fi nan-cial offi cer Harald Wilhelm said.

NOTE 7 WOES: Page 11

Samsung posts two-year low Q3 profi t of $4.6bn

Qatar trade surplus gains 2% to QR8.85bn in September

By Santhosh V PerumalBusiness Reporter

A faster double-digit decline in imports than exports led Qatar report a modest

2% month-on-month gain in trade surplus to QR8.85bn in September this year,

according to off icial figures.

Exports to China and India were on the rise; while imports from other major

countries were on the decline, helping the month-on-month growth in trade

surplus, which however fell 26% year-on-year, said the figures released by the

Ministry of Development Planning and Statistics (MDPS).

Japan, South Korea, India, China and Singapore were among the largest export

markets of Qatar; while its imports largely came from the US, Germany, China,

the UAE and Japan in September 2016.

The country’s total exports (valued free-on-board) fell 5% month-on-month

to QR17.13bn in September this year; while year-on-year; it declined more than

18%.

The country’s total exports of domestic products declined about 4% month-on-

month to QR16.73bn in September 2016; while it recorded more than 15% slump

year-on-year.

Qatar’s exports of petroleum gases and other gaseous hydrocarbons rose

more than 1% month-on-month to QR11.4bn; while those of petroleum oils and

oils obtained from bituminous minerals (crude) tanked 22% to QR2.45bn, non-

crude by 9% to QR0.77bn and other commodities by 2% to QR2.12bn.

Against September 2015 levels, Qatar’s exports of petroleum gases, non-crude,

crude and other commodities shrank 14%, 13%, 4% and 33% respectively.

Petroleum gases and other gaseous hydrocarbons constituted 68.14% of

total exports of domestic products in September 2016 compared to 66.67% a

year-ago period; crude 14.64% (12.95%), non-crude 4.6% (4.45%) and other com-

modities 12.67% (15.98%).

On exports destinations, Japan accounted for 19% of total exports from Qatar

in September this year; followed by South Korea (15%), India (14%), China (7%)

and Singapore (6%).

Qatar’s exports to China grew the maximum of 15% month-on-month to

QR1.25bn and India by 7% to QR2.35bn; while those to Japan fell 5% to

QR3.22bn, South Korea by 4% to QR2.59bn and Singapore by about 1% to

QR1.01bn.

Against September 2015 levels, Doha’s exports to major countries were on the

slide with those to Singapore plummeting 29%, followed by South Korea (23%),

Japan (13%), China (7%) and India (4%).

The country’s re-exports had decelerated 40% month-on-month to QR0.4bn in

September 2016; on year-on-year, it registered 68% plunge.

Total imports (valued at cost insurance and freight) plummeted about 12%

month-on-month to QR8.29bn in September 2016 mainly on faster decline in

shipments from China, the UAE and Germany. The country’s total imports had

fallen 9% year-on-year.

The US accounted for 13% of Qatar’s imports in September this year, followed

by Germany (11%), China (10%), the UAE (9%) and Japan (7%).

Airlines see annual fall in operating costs in Q3 as currencies firm up: IATAA majority of senior airline executives surveyed by IATA have reported an annual decrease in operating costs of airlines in the third quarter of this year. Fuel accounts for just under one-third of total industry costs, and the spot price of jet fuel was approximately 12% lower in Q3, 2016 compared to the same period a year ago, the International Air Transport Association said in its ‘Airline business confidence index October 2016 survey’.The recovery of a number of currencies against the dollar – notably the Russian rouble and the Brazilian real – will have also helped to reduce input costs in some cases.That said, oil and jet fuel prices have trended slowly higher since bottoming-out in early-2016, and 45% of respondents expect input costs to increase over the next 12 months (the highest proportion since the April 2012 survey). The weighted-average score came in above the 50-mark for the first time in more than two years.Expectations for input costs to rise over the year ahead contrast with the outlook for yields, IATA said. This underlines how the business environment is expected to remain

challenging for airline profitability. The majority (55%) of respondents reported that they expect passenger yields to remain unchanged over the coming 12 months. But the weighted-average score remained below the 50-mark for the fourth survey in a row, unchanged from July.Ongoing growth in freight capacity, mainly from additional belly-hold capacity in the passenger fleet, continues to put pressure on cargo yields. Just over half of the survey respondents reported year-on-year decreases in cargo yields in Q3, 2016, and the backward-looking weighted-average score for yields remained close to a seven-year low. Notwithstanding a small uptick in the forward-looking weighted-average score in the October results, just under 90% of respondents expect cargo yields to remain unchanged or to fall further in the year ahead.Airline employment activity increased for the seventh consecutive quarter in the third quarter of this year. But respondents were more cautious about expectations for employment over the next 12 months than they have been in recent surveys, IATA said.

Sheikh Saoud and al-Kuwari: Ongoing expansion.

Currently 40 Woqod fuel dispensing stations including the mobile terminals are operating in the country

Al-Baker: Airbus must prove the troubled Neo’s credentials in-service.

Correction

Barwa Real Estate Company has posted QR1.49bn net profit for the first nine

months of this year compared with QR3.57bn it recorded in 2015, the company

has said in a statement.

In yesterday’s issue, Gulf Times inadvertently reported that Barwa’s nine-month

net profit in 2016 was QR626mn.

“The profit for the nine months ended September 30, 2016 is higher than the

same period of the previous year by QR626mn, representing an increase of 72%

after excluding the exceptional profits made in 2015 from the sale of a plot of

land in Mesaimeer area that amounted to QR2.7bn,” the statement clarified.

BUSINESS

Gulf Times Friday, October 28, 20162

QSE edges up to snap 6-day bear runBy Santhosh V. PerumalBusiness Reporter

The Qatar Stock Exchange yester-day snapped six consecutive days of bearish run and its key index

gained, albeit at lower levels, despite strong buying support from foreign in-stitutions.

Although six of the seven sectors were largely under selling pressure, the 20-stock Qatar Index managed to gain 0.08% or eight points to 10,371.17 points. The market’s year-to-date loss-es have fallen a bit to 0.56%.

Trade turnover and volumes were on the rise in the market, where industri-als, telecom and banking stocks togeth-er constituted about 83% of the total volumes.

Islamic stocks were seen outper-forming the main index in the bourse, where Gulf individual investors’ bullish outlook also helped lift the sentiments. However, domestic institutions turned bearish and there was increased net selling by local and non-Qatari individ-ual investors as well as Gulf institutions.

Market capitalisation was seen expanding marginally by 0.1%, or QR55mn, to QR558.57bn.

The Total Return Index rose 0.08% to 16,779.87 points and the Al Rayan Is-lamic Index by 0.54% to 3,858.73 points; while the All Share Index was down 0.08% to 2,859.93 points.

Industrials saw their equities’ prices soar 1.73%; while consumer goods de-

clined 1.86%, insurance (1.18%), real estate (1.13%), telecom (0.41%), trans-port (0.36%) and banks and fi nancial services (0.01%).

More than 57% of the stocks extend-ed gains with major gainers being In-dustries Qatar, Qatari Investors Group, United Development Company, Milaha, Commercial Bank and Masraf Al Rayan.

Nevertheless, Qatar Insurance, Gulf International Services, Mazaya Qatar, Ezdan, Ooredoo, Gulf Warehousing Company, Nakilat, Doha Bank, al kha-liji, Qatar First Bank, Alijarah Holding and Qatar Electricity and Water were among the losers.

Non-Qatari institutions turned net

buyers to the tune of QR56.47mn com-pared with net sellers of QR9.21mn the previous day.

GCC (Gulf Cooperation Council) in-dividual investors were also net buyers to the extent of QR3.74mn against net sellers of QR0.02mn on October 26.

However, domestic institutions turned net sellers to the tune of QR41.96mn compared with net buyers of QR18.07mn on Wednesday.

Non-Qatari individual investors’ net selling strengthened to QR8.18mn against QR0.82mn the previous day.

GCC institutions’ net profi t-booking increased to QR7.85mn compared to QR6.38mn on October 26.

Local retail investors’ net selling rose marginally to QR2.22mn against QR1.62mn on Wednesday.

Total trade volume gained 29% to 8.11mn shares, value by 24% to QR230.95mn and deals by 15% to 3,321.

The industrials sector’s trade volume more than quadrupled to 3.5mn equi-ties and value more than doubled to QR118.3mn on a 33% jump in transac-tions to 847.

There was an 81% surge in the con-sumer goods sector’s trade volume to 0.29mn stocks, 56% in value to QR22.45mn and 75% in deals to 542.

The insurance sector’s trade volume soared 67% to 0.05mn shares, value by 62% to QR3.37mn and transactions by 20% to 60.

The market witnessed a 31% expan-sion in the transport sector’s trade vol-ume to 0.17mn equities, 47% in value to QR6.59mn and 16% in deals to 134.

However, the telecom sector’s trade volume plummeted 30% to 1.75mn stocks and value by 25% to QR22.26mn; while transactions were up 2% to 384.

The real estate sector saw a 20% plunge in trade volume to 0.9mn shares, 30% in value to QR17.67mn and 2% in deals to 612.

The banks and fi nancial services sector’s trade volume was down 2% to 1.45mn equities, value by 34% to QR40.31mn and transactions by 4% to 742.

In the debt market, there was no trad-ing of treasury bills and government bonds.

Lagarde says there is a ‘crisis’ in Egypt’s currency marketIMF chief hopes board can approve Egypt loan in a few weeks; says crisis should be tackled based on local circumstances

BloombergRiyadh/Dubai

IMF managing director Christine Lagarde said Egypt is facing a cur-rency crisis that should be tackled

based on local circumstances, though history shows that “rapid” exchange-rate action works best in countries with

low reserves and a wide gap between offi cial and black market rates.

The most populous Arab country is gripped by a foreign-currency shortage that has battered business activity and raised fears of spiralling infl ation. La-garde said this month that Egypt needs to address exchange-rate and subsidy policies, fuelling speculation that pol-icy makers will either devalue or fl oat the pound and raise energy prices be-fore securing support from the Inter-national Monetary Fund.

“In terms of exchange rates, there is currently a crisis, because if you look at

the offi cial price and you look at the gray market price, there is a 100% diff erence - and that needs to be addressed,” La-garde said in an interview with Bloomb-erg Television in Riyadh yesterday.

“When you have very low reserves, when the diff erence between the of-fi cial and unoffi cial rate is very wide, historically, we have seen rapid transi-tions being most effi cient, but it’s re-ally a matter of circumstances. In other cases, it has been gradual.”

Egypt is turning to the IMF as it seeks to restore investor confi dence in an economy that’s been undermined

by persistent political unrest since the Arab Spring uprising. Many investors and tourists have shunned the coun-try since then, putting pressure on foreign-currency reserves, which have tumbled more than 40% since 2011.

Lagarde said Egypt is “very close” to securing as much as $6bn in bilateral fi nancing required to seal a $12bn loan from the International Monetary Fund. The lender’s board will “hopefully” ap-prove the request in a few weeks, she said.

“We really strongly welcome the fact that the Egyptian authorities are de-ciding to address” issues, Lagarde said.

“If they decide to move forward, we will certainly support that move, we will certainly accompany it and we will put money on the table to help them along the way.”

Lagarde’s comments suggest that the loan agreement may be held up, said Simon Williams, HSBC Holding’s chief economist for central and eastern Eu-rope, the Middle East and North Africa. “After all of the initial fanfare suggest-ed, we’d hoped that the deal would be concluded quickly,” he said. “That’s not been the case, and Lagarde’s comments suggest there’s more delay coming.”

Iran Shipping Lines sees business back to normal by mid-2017

Reuters Copenhagen

Container shipping firm Islamic Republic of Iran Shipping Lines (IRISL) expects to have regained by the middle of next year the business lost while Iran was subject to international sanctions, its chairman said yesterday.International sanctions were lifted in January following an agreement with world powers on Tehran’s disputed nuclear programme.“Step by step the problems have been resolved (since then), removing many restrictions and limitations,” Mohammad Saeidi told Reuters in an interview at the Danish Maritime Forum conference in Copenhagen. “I think at the maximum in mid-2017 the whole thing would be in the normal manner (of) things.”He said he hoped to see limitations on dollar transactions removed after next month’s US presidential elections.“That will be one of the US commitments based on the agreement we signed last January... This is a very certain commitment by the US,” he said.US banks are forbidden to do business with Iran under domestic sanctions still in force.European banks also face problems, since transactions with Iran in dollars cannot be processed through the US financial system.A slowdown in global trade together with a glut of vessels has left the container shipping industry struggling with its worst ever market conditions, but Saeidi said the post-sanctions environment meant IRISL would be looking to expand its 156-ship fleet.“We are negotiating with some shipyards and some makers and hopefully it would reach clear conclusions in the next 3-4 months,” he said.

Banks lift Gulf markets in weak global environmentReutersDubai

Banking shares that were beaten down earlier this month by fears of slowing economic growth in the region boosted several Gulf stock markets yesterday, despite weakness in Asian bourses and oil prices.The Saudi bank sector has been strong since last week’s big international bond sale by the government partly eased fears of a liquidity drought in the economy. Yesterday, the sector index climbed 1.5% in its seventh straight day of gains. It has risen 13.3% in that period.This helped the overall Saudi stock market index gain 0.9% yesterday, although trading volume was modest and fell from Wednesday, a negative technical sign.The petrochemical sector lagged slightly but PetroRabigh added 3.8% after saying it remained committed to executing a rights issue that it had initially announced last year.Abu Dhabi’s First Gulf Bank rose 3.2% after reporting a rise in third-quarter net profit to 1.86bn dirhams ($507mn) from 1.42bn dirhams, partly because of gains from real estate sales. Analysts’ average forecast was for 1.37bn dirhams.National Bank of Abu Dhabi climbed 1.2% after reporting a

flat third-quarter profit in line with analysts’ estimates, and Abu Dhabi’s main stock market index rose 0.6%.However, telecommunications operator Etisalat fell 1.3% after missing analysts’ forecasts with a net profit after a royalty payment of 1.9bn dirhams. Analysts polled by Reuters had expected 2.24bn dirhams.Dubai’s index gained 0.4% in modest trading volume as Dubai Islamic Bank rose 0.6%.Emaar Properties climbed 1.9% and Shuaa Capital jumped 3.7%.Egypt’s index rose 1.0%, buoyed by a surge of property developers. Emaar Misr jumped 6.5% and Palm Hills Development rose 3.1%.Speculation that another devaluation of the Egyptian pound may be imminent has increased in recent days, and real estate firms could benefit if a devaluation ignites a surge of foreign funds into the country and property is bought by Egyptians as a hedge against inflation.Ezz Steel, which has been languishing near year-lows, surged 4.8%. A devaluation of the Egyptian pound could help to curb Chinese steel imports into the country.Elsewhere in the Gulf, Kuwait’s index edged down 0.1% to 5,398 points; Oman’s index fell 0.3% to 5,497 points, while Bahrain’s index added 0.3% to 1,148 points.

The 20-stock Qatar Index yesterday gained 0.08% to 10,371.17 points.

Turkish central bank ups ’17 infl ation forecast to 6.5%ReutersIstanbul

Turkey’s central bank yes-terday raised its forecast for next year’s infl ation to

6.5% and indicated it was near-ing the end of its drive to simpli-fy policy around a single interest rate.

The bank, which uses multiple rates to set policy, has cut the top end of its interest rate “corridor” seven times this year, steadily moving toward a single rate of funding for the market.

The reductions have also come as President Tayyip Erdogan has called for lower interest rates to spur spending.

The bank this month took an

unexpected pause in the loos-ening cycle, citing the impact of the weaker lira on the outlook for infl ation.

The lira this month hit anoth-er record low, squeezed again by political worries.

“Our monetary policy stance will continue to depend on the infl ation outlook in the up-coming period,” Central Bank

governor Murat Cetinkaya said in a presentation yesterday. “We will maintain our cautious monetary policy stance by tak-ing into account the develop-ments regarding infl ation ex-pectations, pricing behaviour and other factors aff ecting in-fl ation,” he said.

According to Cetinkya’s pres-entation, the bank lifted its 2017

year-end infl ation forecast mid-point to 6.5% from the 6% it had previously forecast. It kept its 2016 forecast at 7.5% and said infl ation was expected to cool to 5% in 2018.

The lira’s slide to a record low of 3.1140 to the dollar this month on concern about political un-certainty has renewed questions about the government’s ability

to meet its long-held target of 5% infl ation.

Cetinkaya said that target re-mained achievable over the me-dium term.

“With simplifi cation, we aim to provide funding via a single rate, which will bring short-term market rates closer to the funding rate,” Cetinkaya said. “The simplifi cation will con-

tribute to the eff ectiveness of the transmission mechanism by enabling a more reliable as-sessment of the monetary pol-icy stance. In this context, we mostly achieved our targeted gains.”

Still, analysts have said that the bank could continue on its loosening cycle once infl ation is under control.

A customer counts his US dollar notes in a bank in Cairo. Egypt, the most populous Arab country, is gripped by a foreign-currency shortage that has battered business activity and raised fears of spiralling inflation.

BUSINESS3Gulf Times

Friday, October 28, 2016

AFPTokyo

Japan’s Fujitsu said yesterday it was in talks to merge its struggling PC business with Chinese computer

giant Lenovo, sending its shares soar-ing as the company also announced a recovery in profi ts.

The talks come as Japanese personal computer makers work to scale back their businesses as consumers shift to smartphones and tablets.

Tokyo-based Fujitsu said it and Len-ovo, the world’s largest PC maker, are “exploring a strategic cooperation in the realm of research, development, design and manufacturing of personal computers for the global market”.

The two fi rms, which are yet to reach an agreement, are also talking with gov-ernment-backed Development Bank of Japan for fi nancial and strategic sup-port.

The market is rife with speculation that the two fi rms may merge their PC operations, with Lenovo taking the ma-jority stake in the new venture.

That should free up Fujitsu to pour more resources into its profi table IT services operations, while also pushing ahead with a sweeping restructuring programme that will see 3,200 job cuts.

Fujitsu president Tatsuya Tanaka told a press conference that his fi rm wants to improve the competitiveness of its PC business.

“Our priority option is to team up with Lenovo Group which has global PC operations,” he said, according to public broadcaster NHK’s website.

Investors welcomed the news, as Fujitsu shares rose by 7.8% to close at ¥599.3. The company had been in talks with Toshiba and Vaio to merge their once high-fl ying personal compu-

ter businesses, but those negotiations failed to result in a deal.

Once-mighty Japanese fi rms have struggled to reorganise in the face of stiff competition from lower-cost rivals overseas, including in China and South Korea. Earlier this year, Taiwan’s Hon

Hai, better known as Foxconn, took over struggling Japanese electronics maker Sharp after it faced huge losses and mounting debts.

In a separate announcement, Fujitsu said its net profi t for the six months to September came to ¥11.8bn ($113mn).

The recovery marks a reversal from a net loss of ¥15.9bn during the same period last year, thanks to cost-cutting eff orts particularly in the PC and mobile phone operations.

Operating profi t stood at ¥25.9bn, up from an operating loss of ¥12.4bn

the year before, while sales fell 7% to ¥2.08tn.Fujitsu also slightly revised down its annual sales forecast to ¥4.5tn, ¥100bn lower than an earlier forecast due to revised exchange rate assump-tions, but kept annual net profi t projec-tion at ¥85bn.

Fujitsu, Lenovo in talksfor PC business merger

A logo of Fujitsu is seen at the Combined Exhibition of Advanced Technologies at the Makuhari Messe in Chiba, Japan. The Tokyo-based firm said it and Lenovo, the world’s largest PC maker, are exploring a strategic cooperation in the realm of research, development, design and manufacturing of personal computers for the global market.

Tata Group accuses Mistry of maliceReutersNew Delhi/Mumbai

Tata Sons accused its former chairman, Cyrus Mistry, of levelling unsubstanti-ated claims and malicious allegations

against the Indian conglomerate as the bitter and highly public row over his sacking escalated yesterday.

The acrimonious exchange has led aides to Prime Minister Narendra Modi to urge restraint in a dispute that could sully the reputation of one of India’s oldest and most respected busi-ness houses.

Tata Sons has had only six chairmen since it was founded in 1868, growing into a $103bn international conglomerate that today spans cars, steel and information technology. Mistry’s parting shot, in a blistering letter penned after he was ousted in a boardroom coup on Monday, accused the company of failures of governance that he said had destroyed billions of dollars in shareholder value.

He also alleged inappropriate interference by Ratan Tata, the 78-year-old patriarch who hired him and has come out of retirement to run the business in a caretaker role.

Tata, in its eight-paragraph statement, dis-missed the claims of the 48-year-old Mistry out of hand.

“The correspondence makes unsubstantiated claims and malicious allegations,” Tata Sons said in the statement e-mailed to journalists a day after Mistry’s fi ve-page letter was leaked to the press.

“These will be responded to in an appropriate manner,” the company said without elaborat-ing, raising the prospect that the war of words could lead to a legal battle.

The country’s two largest stock exchanges demanded clarity from Tata’s more than two dozen listed units in what could herald scrutiny over why investors were not told of Mistry’s

concerns earlier. At least one unit, Tata Steel, dismissed talk of writedowns.

But shares in all the group’s major listed com-panies fell yesterday.

Public confrontations of this nature are rare in Indian corporate life, particularly when they involve established conglomerates and business elders like Ratan Tata, who ran the Tata group for over two decades before hand-picking Mis-try.

“It has taken everyone by surprise. Nobody would have thought such things could happen at Tata,” said JNGupta, a former executive at India’s markets regulator and now managing director at Stakeholders Empowerment Serv-ices.

Nalin Kohli, a national spokesman of Modi’s Bharatiya Janata Party and a Supreme Court lawyer, said: “The larger question will remain whether a legal battle will serve the interests of shareholders.”

Inside Tata, a company that promotes its roots in the heritage and social values of the Parsi community, some workers have bristled at the board’s treatment of Mistry.

But executives also questioned Mistry’s ef-forts to restructure the group.

“It is like a bunch of fi nance or hedge fund guys that have walked in and decided to cut eve-rything.

This is not the Tata way of doing business,” said one source close to the Tata Group in re-sponse to the letter.

“If you are picking things that are not work-ing and then trying to get rid of them, where is growth going to come from?”

Ratan Tata was an acquirer in his time at the top, overseeing deals like the $12bn ac-quisition of Corus, formerly British Steel, in 2007, and the purchase of Jaguar Land Rover a year later. Mistry accused the board of failing to give him “room to move”, and argued that Ratan Tata had acted as an alternative power centre, in particular driving deals that created

two airline businesses. Its Tata Motors arm extended credit too easily to fuel sales, Mistry said, and when fraudulent dealings surfaced at AirAsia India, they were not acted on fast enough.

In its rejoinder, Tata stated that Mistry, who was appointed a director in 2006 and made executive chairman in 2012, would have been “fully empowered” to lead the group and its companies.

“He would be fully familiar with the culture, ethos, governance structure, fi nancial and op-erational imperatives of the Tata Group as well as various group companies,” the company said.

“It is unfortunate that it is only on his re-moval that allegations and misrepresentation of facts are being made,” it added. “The record, as and when made public, will prove things to the contrary.”

One lawyer said Mistry’s letter appeared to be presenting arguments that both he and the interests of the company had been the victim of “oppression and mismanagement” as cited in India’s Companies Act, 2013.

“It would not be unprecedented for a manag-ing director or chairperson to proclaim oppres-sion – even if he was in charge,” said the lawyer Amir Singh Pasrich, managing partner of ILA Pasrich and Co, a New Delhi-based law fi rm.

He is not advising either side.Mistry remains a director of Tata Sons and

could by law only be removed by shareholders after being given due warning.

He also chairs several listed units and his Pal-lonji family owns nearly a fi fth of Tata Sons.

Abhishek Manu Singhvi, a senior lawmaker from the opposition Congress party and lawyer who has been retained by Tata, dismissed Mis-try’s allegations and questioned his motivation in going public with them.

“I don’t see any reason to have allegations and counter allegations,” Singhvi told Reuters Television, adding that the “maligning and bad mouthing should stop”.

Noisy short-term factors mask structural changes in Asia fuel marketsBy Clyde RussellLaunceston, Australia

One of the enduring features of pricing

for crude oil and products is the tug-

of-war between long-term structural

drivers and short-term factors, a scenario

currently being played out in Asian fuel

markets.

The profit margins for both gasoline

and diesel traded in Singapore, Asia’s fuel-

trading hub, have staged strong rallies in

the past three months.

The main factor behind the strength

for the two main oil products has been a

tightening of the market, with seasonal

maintenance at refineries across the

region cited by traders.

This is a short-term factor that has

influenced pricing, and it appears to be

outweighing, for now, the longer-term,

structural driver of steadily rising Chinese

fuel exports.

The Singapore gasoline profit margin,

or crack, rose to $9.82 a barrel on

Wednesday, an almost five-fold increase

on the low this year of $1.67, hit on July 8.

For gasoil, the refinery term for the

middle distillate that can be turned into

diesel, the crack ended at $13.11 a barrel

on Wednesday, up 110% since the 2016

low in early April. These strong gains

look reasonable when taken in context of

drawdowns of regional oil product inven-

tories. For example, Japan’s commercial

gasoline stocks fell to the lowest since the

Petroleum Association of Japan starting

releasing data in 2003, with refinery clo-

sures being cited as the driving factor.

In Singapore, inventories of light distil-

lates, which include gasoline and naphtha,

did rise in the week ended October 20,

but at 12.86mn barrels they are still some

17% below the peak of 15.53mn barrels

reached in early May.

Middle distillate stocks dropped to

12.89mn barrels in the week to October

20, and are down 18.4% since the peak so

far this year of 15.79mn barrels reached

on September 21.

Refinery maintenance and solid

demand across the region have so far

been enough to keep fuel margins strong,

despite an ever increasing flood of prod-

ucts from China. Chinese diesel exports

of 1.6mn tonnes in September were up

44.4% from the same month in 2015,

eclipsing the previous record of 1.53mn

tonnes reached in July 2016.

Diesel exports are up 148.2% in the

first nine months of the year, compared

to the same period last year, reaching

the equivalent of 295,400 barrels per

day (bpd). Gasoline exports rose 36.8% in

September from the year-earlier month,

taking the year-to-date gain to 72.4%.

The volume shipped out by China in

the first nine months is about 215,000

bpd. These are significant additions to

regional oil product supplies, and it’s likely

that Chinese refiners could export even

more, given the spare capacity built up

from over-investment in the sector.

Chinese fuel exports are limited by

off icial quotas, although these have been

raised as the refining sector added capac-

ity that was surplus to domestic product

needs. When most of Asia’s refineries

complete their scheduled maintenance

programmes and return to full production,

it’s likely fuel profit margins will once again

come under pressure, especially if China

continues its recent export strength.

It’s therefore possible that the longer-

term driver of fuel prices will start to

exert more market influence than the

short-term factors, although this is always

subject to the caveat that no new events

occur.

Although market participants and

media reports have a tendency to focus

on short-term developments, it’s likely the

rise of Chinese fuel exports have already

influenced the market.

Diesel profit margins have been trend-

ing down since 2012, a timeframe that

coincides with China starting to ramp up

exports of the fuel mainly used in trans-

port and by industry. Gasoline margins

have been trending lower since the end

of last year, again when China started

increasing exports of the fuel used mainly

for light vehicles. But it’s not just Chinese

exports at play here. The market is also

being influenced by increasing shipments

from new refineries in the Middle East,

which are well-placed to exploit arbitrage

diff erences between Asian and European

product markets.

What may be important to note is that

the longer-term structural change of

the rise of Chinese and Middle Eastern

fuel exports is lowering refinery profit

margins, but this trend is often lost in

the noise of day-to-day movements and

reporting.

Clyde Russell is a Reuters columnist.

The views expressed here are his own.

CFLD tofi nalise new $20bn Egyptian deal by year-endReutersCairo

China Fortune Land De-velopment Company (CFLD) expects to fi nalise

its $20bn deal to develop part of Egypt’s new capital by the end of 2016 and break ground early next year, a partner on the project told Reuters.

Egypt’s ambitious plan to construct a new metropolis 45 km (28 miles) east of Cairo made a big splash when it was announced in March 2015 at a Sharm el-Sheikh summit meant to lure back foreign investors who fl ed after the 2011 revolt.

The project, one of several an-nounced by President Abdel Fat-tah al-Sisi to develop the econo-my and create jobs for a growing population of 91mn, appeared to stall when the Emirati developer leading it pulled out.

But two Chinese state con-struction companies, China State Construction Engineer-ing Corp and CFLD, have since stepped in. Under a framework agreement signed in September, CFLD pledged to invest $20bn over ten years. This comes on top of a $3bn loan secured by China State earlier this year to build government facilities for the city, as yet unnamed.

“There’s a slowdown in the Chinese economy, and the gov-ernment has been pushing, es-pecially industrial cash-rich companies, to go outside China to keep up with the growth they used to have,” Hisham Sheta, chairman of Income, a partner in the project, said at the Middle East Investment Summit.

“The company took a board decision in August to make Egypt one of its strategic invest-ments in the next ten years.”

Built to escape Cairo’s over-crowding and pollution, the new administrative capital was initially expected to cost a total $300bn and feature an airport larger than London’s Heathrow and a building taller than Paris’s Eiff el Tower.

But Cairo residents have questioned the logic of replac-ing their 1,000 year-old capital on the Nile with an alternative that could uproot thousands of government workers to what is now a desert.The CFLD mas-ter plan has yet to be finalised, but Sheta said it was likely to include factories, shopping malls, hospitals and universi-ties in an area covering 70 sq km (28 sq miles) of the 750 sq km area devoted to the new capital.

The developer expects the project to generate 25,000 new jobs in the fi rst 18 months, when it plans to invest $5bn, and 300,000 jobs over its ten-year lifespan.Double-digit unem-ployment helped fuel the upris-ing that ended Hosni Mubarak’s 30-year rule.

Listed on the Shanghai bourse, CFLD specialises in building cit-ies centred around specifi c in-dustries, such as the aerospace hub it constructed 50 km south of Beijing. Sheta said CFLD would bring its own network of inves-tors aboard to kick start the ven-ture, but declined to name the investors or give a breakdown of the fi nancing structure.

Group examining 2 internal candidatesfor chairman’s post

BloombergMumbai

Tata Group is examining at least two internal candidates

as India’s largest conglomerate seeks to find a successor

to ousted chairman Cyrus Mistry, according to people

familiar with the matter.

Tata Consultancy Services chief executive off icer N

Chandrasekaran and Jaguar Land Rover head Ralf Speth

are among those being considered, the people said, ask-

ing not to be identified because the process is private.

Trent Ltd chairman Noel Tata, a member of the founding

family and Mistry’s brother in law, is also being considered,

one of the people said. The preliminary list is subject to

change, according to the people, as the search committee

has four months to identify a replacement.

Chandrasekaran and Speth didn’t immediately respond

to requests for comment. Tata Sons Ltd, the group’s

holding company, declined to comment. Noel Tata wasn’t

immediately reachable.

Meanwhile, the company said in a statement yesterday

that Tata Group ousted chairman Cyrus Mistry because

of growing “trust deficit” with the biggest shareholders of

India’s largest conglomerate.

Mistry, who had been Tata’s chairman for almost four

years, was abruptly removed from his role on Monday

for non-performance without the opportunity to defend

himself, the executive wrote in an e-mail on Tuesday to the

board of group holding company Tata Sons Ltd, a copy of

which was obtained by Bloomberg. Tata Trusts own 66%

of Tata Sons.

“The Directors of the Tata Sons board had repeatedly

raised queries and concerns on certain business issues,

and Trustees of the Tata Trusts were increasingly getting

concerned with the growing trust deficit with Mistry, but

these were not being addressed,” Tata Sons said in the

statement. “It is unforgivable that Mistry has attempted

to besmirch the image of the group in the eyes of the

employees.”

BUSINESS

Gulf Times Friday, October 28, 20164

Toyota will fi ght for British plant after Brexit: Offi cialAFPTokyo

Toyota’s number-two said the fi rm will fi ght to continue op-erating its British factory after

Britain leaves the EU, but insisted it would not yet demand guarantees from London before making a deci-sion over its future in the country.

Didier Leroy, chief competitive of-fi cer at the world’s biggest automaker, made the pledge after the boss of rival Nissan warned he would need assur-ances from London before commit-ting to more investment at a factory in northeastern England.

Many fi rms operating in Britain, including some of Japan’s biggest companies, are worried about the future of their access to Europe fol-lowing Britain’s June vote to quit the European Union.

Leroy acknowledged an exit could hurt the competitiveness of Toyota’s operations in Britain – where it has two plants and employs about 3,400 people.

In comments on Wednesday but embargoed until yesterday, he told re-porters Toyota planned to “talk with our UK members, to motivate the team in the UK, to balance this nega-tive impact”.

He added: “Does it mean that it will be easy to do? No.

Does it mean we are sure we will be able to do it? No.

But I can tell you, we have a fi ght-ing spirit and we fully trust our people in the UK plant.” The impact of Brexit on foreign fi rms remained unclear so there was no immediate plan to de-mand guarantees from the govern-ment, Leroy said.

“Practically nobody knows what the impact of Brexit will be, what will be the impact in terms of tariff s, of access to the market.

The key point for us is not trying to negotiate anything,” he said.

“If there are tariff s or specifi c taxes, because we are exporting 85% of our

production to continental Europe then it will be bad news.

But we really trust that EU and UK governments will fi nd the appropriate agreement.”

Last month Nissan’s top executive Carlos Ghosn said his fi rm would be looking for compensation if his com-

pany’s tax regime became less favour-able or cross-border duties had to be paid once Britain left the European Union.

“If these kinds of principles are ac-cepted we can go ahead because it will neutralise some of our concerns.”

Ghosn said last Thursday a decision

on further investment would be made next month.

At issue is whether Nissan would continue building the next generation Qashqai sport utility at its Sunder-land plant after 2019.

The plant is Britain’s biggest car factory, which has around 7,000 em-

ployees, making it the group’s largest facility in Europe.

Nissan “has to decide very quickly if they will continue to produce the cars (at the plant),” Leroy said.

“We are not exactly in the same situation, we are not facing the same urgency at this stage.”

A man works on the production line at the Toyota factory in Derby, central England. Didier Leroy, chief competitive off icer at the world’s biggest automaker, said yesterday the firm will fight to continue operating its British factory after Britain leaves the EU, but insisted it would not yet demand guarantees from London before making a decision over its future in the country.

ReutersSeoul

Samsung Electronics Co yesterday said it aims to recover quickly from the disastrous withdrawal of the

fi re-prone Galaxy Note 7 that dragged third-quarter mobile earnings to their lowest level in nearly eight years.

The South Korean giant said it was expanding its probe into the Note 7 fi res beyond batteries, as it tried to reassure investors that it would get to the bottom of one of the worst product failures in tech history.

It also held out the prospect of greater returns by disclosing consideration of a share buyback, talked up its semicon-ductor business and promised to con-sider proposals for a corporate makeover from US hedge fund Elliott Manage-ment.

“We know we must work hard to earn back your trust and we are committed to doing just that,” said co-chief executive JK Shin as he apologised for the debacle at a general meeting in Seoul following the release of the company’s results.

Investors expect sweeping manage-ment changes in response to the Note 7 failure, especially after voting yesterday to make parent conglomerate Samsung Group’s de facto chief, Jay Y Lee, a Sam-sung Electronics director.

Lee, 48, the son of patriarch Lee Kun-hee who has been hospitalised follow-ing a heart attack, will now have greater accountability at the group’s fl agship company and a clearer mandate to play a public role in setting strategy.

But shareholders may have to wait for the Note 7 investigation to conclude be-fore seeing any heads roll at the family-run conglomerate.

Samsung Electronics chief executive Kwon Oh-hyun said at the shareholder meeting the company would assign re-sponsibility only after the crisis was re-solved.

The world’s top smartphone maker posted a 96% plunge in third-quarter mobile earnings to 100bn won ($88mn).

Overall operating profi t was 5.2tn won ($4.6bn), matching Samsung’s revised guidance and marking a two-year low.

Before the Note 7 was discontinued, the fi rm had estimated a 7.8tn won profi t.

The scrapping of Samsung’s fl ag-ship phone erased 0.1 to 0.2 percentage points from South Korea’s third-quarter GDP growth in quarterly terms, a fi nance ministry offi cial told Reuters on Tuesday.

The Apple Inc rival said it now aimed to achieve fourth-quarter mobile profi t close to that of October-December of 2015, on the back of sales of Galaxy S7 phones and lower-tier models.

Galaxy S7s – its other premium smartphones with smaller screens – were on track to set a new launch-year sales record for the company, it said.

Samsung has previously warned of another $3.1bn hit to profi t from the Note 7 withdrawal over two quarters.

But it also said yesterday it expects overall earnings to improve in the fourth quarter from a year earlier on a strong performance by its chip and display businesses.

As for what went wrong, Samsung still does not know what caused the fi res in devices sent to customers as replace-ments for the initial 2.5mn Note 7s it re-called due to fi re-prone batteries.

Co-CEO Shin said the battery might not be the only problem, suggesting the

root cause may be more diffi cult to de-termine than had been hoped.

Investors now want a clear plan for how Samsung will revive earnings growth, repair its tattered brand image and boost shareholder returns, hence the company’s promise to consider a share buyback.

“The key is whether Samsung will be able to remove uncertainty surrounding Note 7 and maintain its leading position in the smartphone market,” LS Asset Management fund manager Kim Sung-soo said.

Samsung also said it was reviewing proposals by Elliott, which include a special 30 tn won dividend.

The company will respond to Elliott and announce its shareholder returns policy by end-November.

Samsung SDI, supplier of the batter-ies blamed for the fi rst recall, reported a 110bn won operating loss for the quar-ter on Note 7-related provisions – more than double its losses for the same pe-riod a year earlier.

Seeking to appease shareholders, SDI also announced a share buyback worth 298bn won.

Samsung pledges mobile rebound, dangles buyback after Note 7 shock

Nissan to build new Qashqai model in UKAFPLondon

Japanese car giant Nissan announced

yesterday it will build its new Qashqai sport

utility vehicle at its plant in Sunderland,

northeast England, easing concerns about

Brexit’s impact on the industry.

“Nissan’s decision follows the UK govern-

ment’s commitment to ensure that the

Sunderland plant remains competitive,” said

a Nissan statement.

“As a result, Nissan will increase its invest-

ment in Sunderland, securing and sustaining

the jobs of more than 7,000 workers.”

It will also add production of the next

four-wheel drive X-Trail model at the plant.

British Prime Minister Theresa May called

the announcement “fantastic news for the

UK”, saying the carmaker was “at the heart

of this country’s strong automotive indus-

try”. “It is a recognition that the government

is committed to creating and supporting the

right conditions for the automotive industry

so it continues to grow – now and in the

future,” she added.

“This vote of confidence shows Britain

is open for business and that we remain an

outward-looking, world-leading nation.”

Nissan boss Carlos Ghosn warned in Sep-

tember that the company needed guarantees

from London over Britain’s vote to exit the

European Union before it could commit to

further investment at the factory in Sunder-

land. Britain faces years of tough negotiations

with EU members over its future trading

terms with the bloc. Ghosn met May for talks

at her Downing Street off ice on October 14.

The Nissan plant in Sunderland is Britain’s

biggest car factory and the group’s largest

facility in Europe, also making the Juke

and electric Leaf car models, with around

500,000 cars rolling off the production line

every year. “Our employees there continue to

make the plant a globally competitive pow-

erhouse, producing high-quality, high-value

products every day,” Ghosn said yesterday.

He welcomed May’s “commitment to the

automotive industry in Britain and to the de-

velopment of an overall industrial strategy”.

The plant has produced almost 9mn cars

since it opened in 1986 and now makes one

in three cars manufactured in Britain.

Around 80% of vehicles produced in

Sunderland are exported to more than 130

international markets, highlighting why any

possible trade tariff s with the EU were a

cause for concern.

Lee’s reign begins amid Note 7 smartphone crisisBloombergSeoul

Lee Jae-yong, the crown prince of

the founding family that controls

Samsung Group, is getting expanded

corporate power. Now comes the

guessing game about what he’ll do

with it.

yesterday, Lee off icially joined

a nine-person board at Samsung

Electronics Co, whose botched roll

out of the Galaxy Note 7 smartphone

has delivered a blow to a premier

tech brand and cost the company

billions of dollars in profit. The move

gives the low-profile executive, also

known as Jay Y, a big say over top

management and strategic calls,

including restructurings, mergers

and asset sales.

His ascension comes on the same

day that Samsung reported a sharp

decline in profits, as the recall took

its toll. Net income fell to 4.41tn won

($3.9bn) in the September quarter;

the debacle that may ultimately cost

more than $6 billion. Shares in the

company rose 0.4% at the close of

trade in Seoul.

Lee, 48, is already vice chairman

of Samsung Electronics and has

gained influence since his father, Lee

Kun-hee, suff ered a heart attack and

was hospitalised in 2014. The found-

ing family controls Samsung Group,

whose tentacles extend into financial

services, hotels, biopharmaceuticals

and fashion, through a complex

network of cross ownership. So in a

way, Lee’s elevation to the board of

the flagship will be something akin

to a coronation.

“We can now say that Lee’s

regime has off icially begun,” said Lee

Chaiwon, chief investment off icer at

Korea Value Asset Management Co.

“I think a new era is coming.” Lee be-

lieves Jay Y’s enhanced influence will

be an adrenaline shot for a company

in crisis. “The company will become

more market-friendly,” he said, pre-

dicting the new board member will

“quicken its restructuring process.”

Samsung Electronics has no short-

age of challenges, urgent ones. In

addition to mopping up after the Gal-

axy Note 7 fiasco, the younger Lee

faces a threat from activist hedge

fund Elliott Management Corp that’s

pushing Samsung Electronics to

simplify its ownership structure. The

New York-based fund, founded by

stock picker Paul Singer, also wants

the company to add independent di-

rectors and dish out a special $27bn

dividend to investors.

“Being a board member means

management responsibility,” said

Heo Pil-seok, chief executive off icer

of Midas International Asset Manage-

ment Co. “The market will expect

Lee to come up with some follow-up

steps to settle the Note 7 problem.”

Samsung’s management and

board are “carefully reviewing” all

of Elliott’s proposals, senior vice

president Robert Yi told a conference

call. After buying back more than

11tn won of stock since last year, the

Suwon-based company plans to shed

more light on its shareholder return

policy next month, he said.

While about 400 investors

attended the meeting to vote on

Jay Y’s appointment, the man

himself wasn’t there. Instead it was

vice chairman Kwon Oh-hyun and

co-chief executive off icer Shin Jong-

kyun who spoke about the crisis and

management shortcomings.

Shin said the number of incidents

with the Note 7 was in the hundreds

and Samsung was continuing to

investigate as it revisits every aspect

of its hardware, software and pro-

duction processes.

“It is not acceptable that we did

not meet our own quality assurance

standards,” said Shin, a former head

of the phone business. “We know we

must work hard to earn back your

trust and we are committed to doing

just that.”

Then there’s the broader sales

slump at Samsung Electronics,

which also makes semiconductors

and display panels. The company

is coping with a drop in LCD panel

prices and lower-cost Chinese rivals

in the television market. Total third-

quarter sales fell to 47.8tn won and

the company could record its third

straight year of decelerating annual

revenue, according to analyst esti-

mates compiled by Bloomberg. For

the coming year, Samsung said it’s

planning to spend a record 27tn won

on plants and equipment as it boosts

production of OLED displays.

“What Samsung needs the most

now is the total shake-up of its

system and personnel in order to

refresh its collapsed brand image

following the Note 7 crisis,” said

Chung Sun-sup, CEO of corporate

research firm Chaebul.com. He sees

Lee’s influence being felt across the

entire Samsung empire, starting with

group’s annual management shake-

up at the end of the year.

BUSINESS5Gulf Times

Friday, October 28, 2016

ReutersNew York

Chinese package delivery company ZTO Express raised $1.4bn in the biggest US initial public off ering

of the year on Wednesday as its backers cashed in on China’s booming online-shopping industry, a source familiar with the deal said.

The stock market debut, the biggest by a Chinese company since the $25bn IPO of e-commerce giant Alibaba Group Holding Ltd in 2014, gave the Shanghai-based company a market value of more than $12bn.

ZTO’s US listing is a head start over ri-vals in the world’s largest express deliv-ery market because it gives the company faster access to cash to expand.

The company wants to use $720mn of its IPO proceeds to buy more trucks, land, facilities and equipment.

Its Chinese competitors SF Express, YTO Express, STO Express and Yunda Express have all unveiled plans for list-ings in Shenzhen and Shanghai but with a backlog of about 800 companies wait-ing for approval to go public in China and frequent changes to the rules, a New York listing is regarded as a quicker and more reliable way of raising funds and tapping a broader mix of investors.

ZTO’s existing shareholders, includ-ing private equity fi rms Warburg Pincus, Hillhouse Capital and venture capital fi rm Sequoia Capital will also get much more leeway and fl exibility to exit their investment under US market rules.

In China, they would be locked in for one to three years after the IPO.

ZTO priced 72.1mn shares at $19.50 a share, above its previously indicated range of $16.50 to $18.50 a share.

That price is about 27 times its ex-pected 2017 earnings per share, accord-ing to people familiar with the company’s fi nancials.

By comparison, rivals SF Express, YTO Express, STO Express and Yunda shares trade between 43 and 106 times earn-ings, according to Haitong Securities es-timates.

US rivals, United Parcel Service Inc and FedEx Corp, which are growing at a much slower pace, are trading at multiples of 17.8 and 13.4 times expected 2017 earn-ings. The source asked not to be named because the pricing is not yet public.

ZTO did not immediately respond to a request for comment.

As concerns grow about a weakening Chinese currency, the New York IPO also gives the company more stable dollar-denominated shares it can use for inter-national acquisitions, according to peo-ple close to the company.

ZTO will have a dual-class share struc-

ture that will give its founder Lai Meisong 80% voting power in the company, even though he will only hold 28% of the stock after the IPO.

Most of Lai’s shares are Class B ordi-nary shares carrying 10 votes, while Class A shares, including the new US shares, have one vote.

China’s markets do not allow shares with diff erent voting power.

China’s express delivery fi rms handled 20.7bn parcels in 2015, shifting 1.5 times the volume moved in the United States, according to consulting fi rm iResearch data cited in the ZTO prospectus.

The market will grow an average 23.7% a year through 2020 and reach 60bn par-cels, iResearch forecasts.

Domestic rivals STO Express and YTO Express have unveiled plans to go public with reverse takeovers worth $2.5bn and $2.6bn.

The country’s biggest player, SF Ex-press, and rival Yunda Express, are work-ing on similar deals worth $6.4bn and $2.7bn respectively. ZTO intends to list on the New York Stock Exchange (NYSE) under the ticker ZTO. Morgan Stanley and Goldman Sachs Group Inc are the lead IPO underwriters.

Chinese courier ZTO Express delivers this year’s biggest US IPO

A deliveryman holds parcels at a branch of ZTO Express in Beijing. The Chinese package delivery company raised $1.4bn in the biggest US initial public off ering of the year on Wednesday as its backers cashed in on China’s booming online-shopping industry, a source familiar with the deal said.

AFPHong Kong

Most Asian markets turned lower for a second day yesterday, with energy fi rms struggling after another sell-off in oil

fuelled by concerns about a planned output cut.Crude prices are slumbering at three-month

lows after Opec member Iraq and non-member Russia suggested this week they would not take part in any limitations, despite a painful global supply glut. Their comments have raised questions about the viability of last month’s agreement by oil cartel Opec to reduce output, that had sent prices soaring.

While edging up slightly yesterday, both main contracts have tumbled more than 3% this week and news that US stockpiles had fallen more than expected last week was unable to provide much support. “Iraqi demands to join the list of coun-tries exempted from quotas have simply added to the uncertainty” that an output cut can be imple-mented, Research fi rm Capital Economics said in a commentary.

“We have long been sceptical of the chances of a game-changing deal and continue to forecast that both Brent and WTI will end the year back at around $45 per barrel.” Regional energy fi rms ex-tended recent losses.

Hong Kong-listed CNOOC sank 2.7%, with

traders also selling on the back of a weak earnings report. PetroChina lost 2% in Hong Kong, while Sydney-listed Woodside Petroleum was 1.5% off and Santos lost 2%.

Among regional markets Tokyo ended down 0.3% after closing Wednesday at a six-month high.

Japanese IT fi rm Fujitsu was the stand-out per-former, soaring almost 8% on news it was in talks to merge its struggling PC unit with Chinese com-puter giant Lenovo.

Shanghai closed down 0.1%, Sydney slipped 1.2% and Hong Kong shed 0.8% – extending a 1% loss on Wednesday.

Seoul, however, added 0.5%, boosted by a pick-up in market heavyweight Samsung Electronics.

The fi rm confi rmed a 30% plunge in third-quar-ter operating profi t linked to its Galaxy Note 7 crisis but later announced its heir apparent JY Lee had joined the board, putting him a step towards con-trol of the family-run conglomerate.

Lee Chaiwon, chief investment offi cer at Ko-rea Value Asset Management said JY’s bigger role should provide a much-needed boost to the be-leaguered company, saying it “will become more market-friendly and will “quicken its restructur-ing process”. The dollar rose against its main peers and other high-yielding currencies as a preliminary survey showing the key US services sector expand-ed in October reinforced expectations the Federal Reserve will lift interest rates before the end of the year.

Asian markets down

Goodbye Shanghai, hello Qianhai: HKEx’s quest for a metals connectorBy Andy HomeLondon

When Hong Kong Exchanges

and Clearing (HKEx) bought the

venerable London Metal Exchange

(LME) in 2012, the narrative was all

about China.

HKEx was, it claimed, uniquely

positioned to bridge the gap

between the world’s oldest mar-

ketplace for trading base metals

and the world’s largest market for

those metals.

The exchange was already far

advanced in constructing a stocks

bridge between Chinese and

international markets, subse-

quently realised in the form of the

Shanghai-Hong Kong Connect

pipeline. That, it was hoped, would

be a template for something

similar in the metals and wider

commodities trading space.

Yet four years on and there is

no similar metallic product.

That is largely because the

obvious Chinese partner, the

Shanghai Futures Exchange

(ShFE), which dominates industrial

metals trading on the mainland,

has shown a conspicuous lack of

interest.

So time for Plan B. HKEx is

going to launch its own mainland

Chinese metals exchange with

which to connect.

But will it work and, equally

importantly, what will it mean in

terms of the uneasy stand-off with

the Shanghai market?

While the purchase of the LME

was all about China, it wasn’t a

Chinese company that was actu-

ally doing the buying.

Hong Kong has its own unique

history and place within China,

a relationship famously dubbed

“one country, two systems” by

former Chinese premier Deng

Xioaping.

Indeed, HKEx chief executive

Charles Li, speaking to Hong Kong

investors in the original unveiling

of the LME deal, stressed that the

purchase “really consolidates our

strategic relevance to China,” help-

ing to dispel nagging fears about

“marginalisation”.

And at the LME Week Asia

meet in June 2013 he reached

out to potentially wary mainland

exchanges.

Switching from English to

Mandarin, he assured mainland-

ers HKEx would not “develop

products that threaten to capture

their existing business”. Rather,

“it is our long-term goal to seek

co-operation with them to develop

new products together and share

the profit.” At least one member

of his audience was apparently

unconvinced.

The battle-ground for Chinese

metals market share had already

been defined by the issue of listing

LME warehouses on the mainland.

The LME’s previous attempt to

open warehouses had run into a

brick wall in the form of a ruling

from China’s regulator, the China

Securities Regulatory Commission

(CSRC), explicitly prohibiting any

overseas exchange from doing so.

It was seen at the time, and is

still seen, as a barricade erected

to protect ShFE from overseas

competition.

HKEx and Li were initially opti-

mistic they had suff icient political

leverage in Beijing to break the

impasse. But two years later Li,

speaking at the LME’s annual

London event, conceded “that

battle has huge machine guns and

bunkers that are very hard for you

to take.” No deal then?

HKEx then decided to off er a

mini bridge to the mainland in the

form of “mini” yuan-denominated

contracts mirroring in scaled-

down size the core base metals

products traded on the LME.

But initial enthusiasm for these

products has flagged.

Total volumes of 26,265 lots in

the first nine months of this year

were down by 33% on last year.

Open interest has fallen 28% to

229 lots over the same period with

two contracts, tin and lead, closing

out September with zero open

interest.

Quite evidently, if HKEx is go-

ing to make good on its promise

to open up the Chinese metals

markets, it needs to find a new

connection point.

And this time it’s looking closer

to home.

The Qianhai free trade zone is

part of the city of Shenzhen, just

north of Hong Kong.

A memorandum of understand-

ing was signed in September

with the Authority of Qianhai

Shenzhen-Hong Kong Modern

Service Industry Cooperation

Zone, to give it its full title.

At the heart of the tie-up is

a proposed “well-regulated,

transparent and reliable spot

commodities trading venue on

the Mainland backed by physical

delivery and a warehouse system

to support the Mainland’s real

economy,” according to HKEx’ Li.

Last month came news that the

new platform will be headed up

by Guo Xiaoli, who has held senior

positions at both the Dalian and

Zhengzhou exchanges in the past.

First trading is scheduled for

some time in the first half of 2017.

It’s a neat way of side-stepping

the protective wall thrown around

the Shanghai market.

As a spot trading platform

Qianhai poses no direct threat to

Shanghai and falls below the radar

of the CSRC, which has jurisdiction

only over futures trading on the

Chinese mainland.

Moreover, physical delivery will

be eff ected not by LME warehous-

es but by what Li has described as

a “unique LME warehouse kind of

system”.

Something presumably along

the lines of LME Shield, the build-

out of the existing LME Sword

electronic warranting system to

the non-warrant, off -exchange

part of the market.

This is obviously a fall-back

plan in response to the Shanghai

Future Exchange’s rejection of any

thought of connecting with Hong

Kong. It’s also a move into an

already congested space.

Even Li concedes there are

more than 1,000 commodity

trading platforms on the Chinese

mainland. However, many of

these are little more than localised

trading hubs and some little more

than dressed-up “get rich quick”

investor scams.

Think of the Fanya Metals

Exchange in the city of Kunming,

described by local authorities as a

multi-million dollar Ponzi scheme.

There is a palpable need for

some sort of authoritative cash

pricing benchmark in China.

The 2014 Qingdao scandal,

involving the multi-pledging of

metals stored in some of the port’s

warehouses, has also revealed the

need for a more trustworthy stor-

age mechanism.

On paper at least, HKEx can

leverage the credibility of the

LME’s existing benchmark pricing,

already used by many of China’s

heavyweight industrial players,

and its Shield depository receipt

system to off er both.

And if it can make a success of

the Qianhai platform, it will have

created something with which to

connect. Emphasis on the word

“if” in that sentence.

But how will the Shanghai

Futures Exchange react? Having

used the CSRC to block previous

attempts to import LME pricing

onto the mainland, what will it

make of this latest move?

Because it’s clear that in this

particular game of chess, or

maybe this being China, mahjong,

it’s being challenged to make the

next move.

Andy Home is a columnist for

Reuters. The opinions expressed

here are those of the author.

Sensex sheds on Tata turmoil; rupee dropsBloombergMumbai

Indian equities declined for a third day as weakness in Asian stocks weighed on sentiment already muddied by the

boardroom tussle at the nation’s biggest conglomerate.

Tata Motors and Tata Steel extended losses and were among the worst per-formers on the benchmark indexes af-ter Tata Group’s ousted chairman Cyrus Mistry warned that the group may face $18bn in writedowns because of five un-profitable businesses he inherited. Hin-

dustan Unilever Ltd, the nation’s biggest consumer goods company, dropped the most in three months as volume growth contracted 1% in the September quarter, chief financial officer PB Balaji said on a conference call.

Closing of positions by traders on the last session of the October series con-tracts added to the weakness. The rollover rate in the Nifty July futures expiring later yesterday was at 54% at 11 am in Mumbai. That compares with a six-month aver-age of 60% on expiry, data compiled by Bloomberg show. Traders roll over their monthly derivatives contracts to the next month on the last Thursday of every

month and it usually lead to volatility on the benchmark gauges.

“Investor sentiment is getting hurt by the month-end expiry and the turmoil in the Tata Group,” Lancelot D’Cunha, chief executive officer at Crest Wealth Man-agement Pvt, said by phone from Mum-bai. “We also have a long weekend coming up, so investors don’t want to take ag-gressive bets.” Indian markets are closed on Monday for a public holiday.

The Sensex has rallied 21% from a Feb-ruary low. The index is valued at 16.6 times projected 12-month earnings, com-pared with a five-year average of 14.4 times. The MSCI Emerging Markets In-

dex is valued at a multiple of 12.4. Indian Hotels Co tumbled 4.3% in a fourth day of retreat. The two-judge Delhi High Court panel upheld a previous order related to the auction of a licence of the Taj Mans-ingh hotel property in the Indian capital. Torrent Pharmaceuticals Ltd plunged the most in 14 months after its second-quar-ter profit missed estimates. Hinduja Ven-tures Ltd jumped 7.4% to its highest level since January 2013 after saying it will sell a 1.35% stake in Indusind Media.

Meanwhile, the rupee turned weaker for the second straight day against the dollar, falling by 4 paise to end at 66.87 on steady demand for the American unit.

Oil price slide hits rouble, downgrade fears rack rand

ReutersLondon

A wave of caution hit emerging markets yesterday, as rating

downgrade fears stalked South Africa and a tumble in oil prices

below $50 a barrel weighed on Russia’s rouble and other crude

producer currencies.

EM stocks slid too, with a second day of falls threatening to

take the 23-country MSCI EM index into negative territory for

the month as the prospect of higher US interest rates and dollar

bubbled in the background.

“We are seeing broad-based weaker momentum in EM and a

few stories are compounding that, including the tabling of the

budget in South Africa, and that is spilling over to the (Turkish)

lira,” said Societe Generale strategist Roxana Hulea.

“The drop in oil prices as well, because that undermines the

performance of the commodity exporters; the rouble, Mexico

and Brazil as well.

The freeze in output is not coming through as expected, with

a lot of defectors such as Iran and Iraq.”

South Africa’s uncertainty centres on its struggling economy,

political instability and the fate of its investment grade credit

rating which is under threat ahead of key reviews by Moody’s

on November 25 and Standard and Poor’s on December 2.

Finance Minister Pravin Gordhan slashed growth forecasts

for the next three years in a budget on Wednesday and pre-

dicted wider deficits than previously expected until 2018/19.

The rand dipped back to 13.90 per dollar in morning trade

while the country’s debt insurance costs measured using five-

year credit default swaps (CDS) ticked up a couple of points to a

one-week high.

“It is commendable eff ort that Gordhan is putting together,”

Hulea added. “But we think it is more likely than not that they

will be downgraded.”

Turkey’s lira which hit a record low earlier this month and

CDS also seemed to be feeling the pressure from the broader

market caution.

Central bank head Murat Cetinkaya bolstered expectations

for further Turkish interest rate cuts saying a 5% inflation target

remained reachable, though the bank was responsive to the

impact of the weaker lira.

The Russian rouble weakened following a drop in oil prices

to their lowest since late September, though Moscow stocks

clawed higher as crude showed signs of a fight back and Poland

maintained eastern Europe’s recent hot streak.

At 0900 GMT, the rouble was 0.35% weaker against the

dollar at 63.05 and lost 0.3% against the euro to trade at 68.84

per euro.

Higher volatility in crude prices may send the Micex stocks

index towards 1930-1950 in the next five to seven days,

Promsvyazbank analysts said in a research note.

Most emerging Asian currencies also fell as China’s yuan hit

its latest six-year low and with the dollar nudging a nine-month

high amid firming expectations of a US interest rate hike in

December.

LATEST MARKET CLOSING FIGURES

Zad Holding CoWidam Food CoVodafone Qatar

United Development CoSalam International Investme

Qatar & Oman Investment CoQatar Navigation

Qatar National Cement CoQatar National Bank

Qatar Islamic InsuranceQatar Industrial Manufactur

Qatar International IslamicQatari Investors Group

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

Qatar Fuel QscQatar First Bank

Qatar Electricity & Water CoQatar Cinema & Film Distrib

Qatar Insurance CoOoredoo Qsc

National LeasingMazaya Qatar Real Estate Dev

Mesaieed Petrochemical HoldiAl Meera Consumer Goods Co

Medicare GroupMannai Corporation Qsc

Masraf Al RayanAl Khalij Commercial Bank

Industries QatarIslamic Holding Group

Gulf Warehousing CompanyGulf International Services

Ezdan Holding GroupDoha Insurance Co

Doha Bank QscDlala Holding

Commercial Bank QscBarwa Real Estate Co

Al Khaleej Takaful GroupAamal Co

77.60

64.00

10.72

19.97

11.09

10.31

85.70

83.00

162.00

52.50

43.70

64.30

62.20

106.00

23.12

46.00

10.17

148.30

10.13

211.00

28.05

86.30

97.00

16.65

13.10

16.43

191.20

66.60

79.00

35.15

17.70

105.00

55.20

54.60

32.30

16.30

19.85

36.55

22.29

37.45

32.80

22.00

14.70

0.26

-0.16

0.00

1.37

0.09

-2.46

0.71

0.48

0.00

-2.78

-1.02

0.16

9.89

0.00

-0.73

2.22

-1.36

-2.05

-2.69

-0.71

-9.52

-1.82

-0.51

-3.98

-2.38

-0.18

1.59

-9.39

-1.13

0.43

-1.67

3.75

0.36

-1.80

-4.15

-1.81

0.00

-0.54

-0.04

0.54

0.00

0.41

-1.54

6

3,200

1,710,912

122,134

19,134

31,827

19,322

11,111

61,107

20,705

21,419

2,293

1,050,673

61,079

105,299

2,500

17,717

10,721

779,369

22,306

3,000

24,101

38,661

34,920

87,246

70,640

28,974

207,288

4,819

166,707

87,220

117,589

13,286

45,607

116,416

515,815

-

45,663

61,641

102,637

171,728

2,997

2,093,744

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

20.45

17.45

5.13

9.45

9.50

22.19

12.70

18.25

18.49

12.55

23.65

10.44

20.82

62.25

9.46

23.77

25.67

30.30

21.11

13.02

45.49

18.34

23.59

17.81

13.50

19.10

30.64

56.97

89.96

16.00

47.20

38.23

6.24

15.35

30.91

12.56

9.36

28.99

22.78

118.07

13.51

59.96

85.55

6.55

3.05

83.36

16.39

9.08

12.51

31.60

13.75

16.92

120.00

56.10

17.24

17.03

8.40

21.54

13.97

8.54

12.05

49.30

8.45

10.54

5.59

28.15

7.63

69.75

10.01

19.15

50.99

13.79

22.84

7.39

27.83

4.87

25.67

10.69

13.02

12.04

33.79

25.44

16.78

118.47

32.87

5.55

29.91

7.30

13.75

13.30

7.40

19.39

16.96

13.00

18.99

83.82

9.66

0.34

-0.11

2.81

0.11

3.60

4.28

9.86

0.83

0.54

0.00

-0.84

-0.76

-3.74

-0.10

-0.42

-0.46

0.75

0.97

-1.22

1.64

-1.26

0.22

0.34

3.67

0.00

0.58

-0.49

-0.61

0.30

3.49

-0.11

0.03

1.79

-0.07

0.10

-1.18

8.96

0.28

1.29

-0.62

-2.81

0.55

1.05

0.92

0.66

1.02

-0.97

0.44

3.82

0.96

0.22

0.48

0.30

0.18

0.06

0.24

0.48

-0.09

0.79

0.12

0.25

0.20

0.60

-0.47

-0.18

1.51

-1.17

0.00

4.27

-0.31

0.45

-1.29

0.71

0.14

-0.57

0.62

0.00

2.30

-0.61

-0.91

0.54

-0.04

0.60

-0.24

1.17

0.91

-0.70

-0.27

-0.51

6.74

-1.07

0.00

0.30

0.23

-1.81

1.05

0.42

107,465

615,225

27,973,847

2,839,783

5,110,471

357,121

486,593

612,440

583,714

-

43,827

2,938,976

922,799

91,799

258,664

149,027

139,414

55,993

266,743

1,074,269

613,395

1,333,530

149,572

592,698

-

558,279

105,659

55,515

162,686

878,929

585,884

199,202

744,852

131,205

502,715

688,974

3,064,422

84,836

3,399,557

99,457

3,067,030

346,360

3,248,563

15,719,296

858,092

103,963

252,428

1,732,078

1,731,727

119,484

114,860

674,534

10,427

30,238

98,646

100,496

701,820

149,226

460,837

566,830

939,451

30,104

161,352

37,224

670,082

315,400

608,070

-

2,018,257

65,249

77,008

384,430

67,964

838,621

310,886

451,087

-

246,853

114,525

2,487,936

29,118

393,248

187,537

38,483

1,606,707

933,527

161,510

7,751,316

1,245,788

1,388,056

255,616

-

653,035

642,444

843,748

65,052

541,732

SAUDI ARABIA

Company Name Lt Price % Chg Volume

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

5.05

7.01

7.72

12.05

11.80

15.23

7.90

13.31

57.60

23.60

24.63

24.80

12.89

22.20

16.88

11.64

56.06

19.00

16.84

12.97

7.55

15.00

21.34

31.89

15.98

10.66

22.29

10.37

67.00

2.02

2.34

1.98

-1.07

0.25

0.00

-0.13

0.76

1.07

0.85

-1.00

0.00

-0.46

0.00

0.78

-0.43

1.03

1.82

-1.41

1.49

1.34

0.13

-0.09

-0.03

0.06

-0.84

-0.36

-0.77

0.00

2,785,031

5,379,080

4,266,483

320,142

1,181,980

-

1,299,108

23,051,656

204,237

20,870

230,808

-

115,819

-

1,735,048

2,197,736

1,881,309

807,495

524,929

1,028,638

3,208,053

1,466,886

131,864

279,371

335,112

229,734

115,544

1,937,177

62,658

SAUDI ARABIA

Company Name Lt Price % Chg Volume

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

85.00

55.00

166.00

83.00

146.00

310.00

36.50

200.00

21.00

39.50

470.00

315.00

385.00

610.00

395.00

190.00

236.00

38.00

27.00

50.00

0.00

60.00

20.50

110.00

0.00

38.00

820.00

0.00

60.00

0.00

35.00

0.00

19.00

0.00

59.00

680.00

50.00

20.00

62.00

44.00

180.00

390.00

75.00

96.00

42.00

140.00

170.00

0.00

29.50

89.00

450.00

29.50

58.00

0.00

51.00

0.00

114.00

170.00

86.00

72.00

112.00

90.00

31.50

51.00

0.00

250.00

37.50

44.50

29.50

38.50

0.00

98.00

480.00

23.50

77.00

236.00

25.50

116.00

87.00

108.00

176.00

47.50

51.00

0.00

410.00

0.00

540.00

27.00

375.00

80.00

950.00

0.00

0.00

31.50

82.00

325.00

500.00

42.50

240.00

40.00

29.00

44.00

21.00

31.50

126.00

41.00

0.00

0.00

68.00

61.00

30.00

32.50

214.00

30.00

41.00

37.50

106.00

81.00

19.50

0.00

0.00

72.00

650.00

47.00

0.00

0.00

0.00

-1.19

-1.19

2.82

-4.62

4.29

0.00

0.00

0.00

1.08

-1.56

-1.28

0.00

1.28

0.00

0.00

0.00

-1.82

4.17

0.00

0.00

0.00

-3.51

0.00

1.33

1.23

0.00

0.00

0.00

1.45

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.12

0.00

0.00

0.00

-1.03

-3.45

0.00

0.00

0.00

3.51

0.00

-5.26

0.00

1.75

0.00

0.00

0.00

5.56

0.00

1.18

1.41

1.82

0.00

5.00

-1.92

0.00

0.00

-1.32

5.95

-1.67

-1.28

0.00

0.00

-1.03

0.00

-1.28

2.61

-1.92

1.75

-5.43

1.89

0.00

0.00

-1.92

0.00

-2.38

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.61

-3.53

0.00

0.00

0.00

-2.44

0.00

-3.33

-1.12

-2.33

1.61

0.00

-2.38

0.00

0.00

0.00

0.00

0.00

-1.52

-0.93

0.00

0.00

-1.32

0.00

3.85

-2.50

0.00

0.00

-2.70

0.00

3.30

0.00

4,435

224,521

394,300

36,000

17,700

13,099

17,500

61,187

2,500

129,667

347,971

1,617

23,750

3,247,090

272,050

1,019,741

4,243,537

48,970

1,129,750

647,033

-

150,000

13,177,657

1,446,428

-

2,625,072

134,828

-

2,105

-

467,324

-

1,500

-

50,000

9,000

5

47,500

61,300

640,012

118,000

40,000

34,126

650,374

14,500

900

50

-

4,403,302

100

119

300

14,749

-

97,000

-

39,620

10,100

45,932

10

39,995

7,447

2,000

348,185

-

6,117

4,146,063

1,000

150,000

260,500

-

73,287

369,005

3,774

9,000

3

199,200

1,342,656

44,010

1,359

10,000

1,245,741

1,500

-

6,667,948

-

3,650

575,100

698

5,000

90,750

-

-

1,003,107

30,000

45,044

251,385

209,000

30,000

35,229

1,887,650

299,500

2,287,868

100,632

300,000

663,557

-

-

270,000

293

10,000

216,700

404,816

18,250

50

411,555

7,500

169,444

4,373,648

-

-

575,419

500

12,235,363

-

KUWAIT

Company Name Lt Price % Chg Volume

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

0.45

1.00

3.40

0.16

0.13

0.16

0.11

1.34

0.26

0.21

0.71

1.05

1.95

4.50

0.25

0.65

1.48

1.38

2.50

0.22

1.50

0.24

0.14

2.01

0.65

0.48

0.29

0.32

1.50

2.15

0.30

0.12

1.88

0.15

0.18

0.52

0.40

0.00

0.66

0.06

4.57

1.00

0.15

3.64

0.50

0.40

0.44

1.51

0.00

0.13

0.19

0.17

5.00

0.11

0.05

0.00

0.62

0.13

0.70

3.75

0.23

0.11

1.79

0.62

0.12

0.19

0.52

0.11

1.25

0.11

0.00

0.34

0.11

0.11

0.26

10.50

0.18

0.09

0.39

0.17

0.11

1.49

0.49

0.18

0.39

0.21

1.28

0.22

0.26

0.03

0.26

0.42

0.14

0.08

0.22

0.45

0.00

0.00

0.00

0.00

1.30

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.82

0.00

0.00

0.00

0.00

0.00

0.67

0.00

-0.70

0.00

-0.61

0.00

0.35

0.00

-0.33

0.00

0.00

0.00

0.00

0.00

-1.64

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.33

0.00

0.00

0.00

0.00

0.00

0.00

-3.85

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.30

0.00

0.00

0.00

4.31

0.00

0.00

-1.77

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-0.56

-1.05

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

-2.07

1.27

0.00

5,552

-

-

-

-

15,350

20,000

-

-

-

-

-

-

-

765,470

-

-

-

-

-

11,490

116,083

1,018,540

-

54,897

4,574

150,000

-

141,468

-

-

-

-

-

21,371

-

-

-

28,164

256,746

-

-

6,000

-

-

-

3,706

135

-

35,000

-

-

-

-

-

-

-

-

-

-

5,134

-

-

-

146,650

-

-

270,200

-

-

-

-

20,304

-

-

-

7,480

474,812

-

-

-

-

-

-

-

-

-

-

-

-

-

1,072,132

875,351

3,110,021

3,988

OMAN

Company Name Lt Price % Chg Volume

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

4.05

0.53

0.28

0.06

0.75

0.16

0.19

1.04

0.12

1.45

0.49

0.07

0.05

0.31

0.55

0.22

0.18

0.06

0.88

0.19

1.13

0.09

0.17

0.19

0.71

0.05

0.85

0.25

0.00

0.00

0.00

0.00

0.00

-1.25

0.00

0.00

-0.85

0.00

0.00

0.00

-3.57

0.00

0.00

0.00

-0.56

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-

-

-

52,007

-

114,300

273,517

-

456,242

-

157,422

18,885

70,571

-

-

-

14,024

467,185

-

278,038

-

-

386,454

1,400

-

-

-

-

OMAN

Company Name Lt Price % Chg Volume

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

1.85

2.00

2.25

4.02

1.43

1.10

0.90

1.50

3.85

1.50

0.93

4.10

1.11

2.75

0.77

2.52

0.63

95.00

1.18

6.26

0.98

5.00

0.52

3.29

2.80

5.00

4.78

8.60

0.81

0.48

2.18

1.59

0.81

2.18

2.50

0.90

0.86

1.56

4.60

11.20

1.76

0.76

19.10

5.80

7.15

0.54

1.99

1.35

0.72

1.06

1.47

2.64

4.40

0.36

300.00

5.00

2.35

60.00

6.07

3.00

0.59

4.00

2.45

3.30

0.62

3.46

-0.54

0.00

0.00

0.50

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.85

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.18

1.25

0.00

-0.46

1.27

0.00

-2.68

0.00

0.00

0.00

0.00

0.00

3.23

-1.12

0.00

-1.29

-3.33

0.00

1.89

0.00

0.75

0.00

4.95

0.00

0.38

0.00

-7.69

0.00

0.00

0.00

0.00

0.33

0.00

0.00

0.00

0.00

0.00

5.08

0.00

785,183

-

-

686,845

-

-

-

300,288

-

-

545,007

-

-

297,748

61,000

-

2,081,774

-

-

-

-

-

-

-

-

351,500

-

683,073

275,158

1,657,777

12,600

15,000

-

361,420

-

17,595

-

-

-

8,281,189

3,000

3,766,540

1,437,357

3

-

1,486,300

-

1,403,919

-

1,917,124

-

3,377,946

-

61,783

-

-

221,000

-

954,000

-

-

-

-

-

478,338

369,014

UAE

Company Name Lt Price % Chg Volume

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

0.00

0.00

0.00

0.38

0.24

0.00

0.00

0.20

0.00

0.00

0.71

0.11

0.06

0.11

8.10

0.00

0.00

0.64

0.31

0.00

0.00

0.83

0.03

0.34

0.00

0.00

`

0.29

1.61

0.42

0.00

0.12

0.00

0.09

0.75

0.66

1.25

0.00

0.31

0.34

0.31

0.48

0.09

0.26

0.64

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.44

0.00

0.00

0.00

6.58

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

-4.17

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.03

0.00

0.00

0.00

-

-

-

15,000

25,800

-

-

20,735

-

-

2,130

70,000

42,983

524,000

65,100

-

-

10,000

40,000

-

-

9,383

200,000

150,000

-

-

-

11,000

2,532

4,760

-

24,000

-

350,000

7,000

50,250

10,000

-

13,526

15,000

55,724

18,000

300,000

36,709

200,000

BAHRAIN

Company Name Lt Price % Chg Volume

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

26.00

25.50

385.00

192.00

0.00

0.00

204.00

920.00

35.50

0.00

34.00

285.00

118.00

780.00

74.00

90.00

184.00

47.00

1,620.00

0.00

66.00

31.50

38.50

1,080.00

0.00

43.50

41.00

170.00

50.00

0.00

28.00

52.00

39.00

0.00

850.00

78.00

96.00

54.00

19.50

75.00

156.00

315.00

81.00

29.50

940.00

86.00

395.00

50.00

370.00

395.00

0.00

480.00

32.00

0.00

41.50

630.00

2,620.00

0.00

28.50

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.67

0.00

0.00

-1.10

0.00

-1.05

0.00

0.00

0.00

-1.56

-3.75

-1.82

0.00

1.16

-1.20

0.00

5.26

0.00

0.00

-1.89

0.00

0.00

-1.16

-1.27

0.00

3.85

-7.14

0.00

-1.27

0.00

0.00

-3.28

0.00

3.61

0.00

-1.96

0.00

1.28

0.00

-1.03

0.00

0.00

2.47

0.00

0.77

0.00

1.79

628,375

244,300

87,778

336,188

-

-

147,330

100

770,101

-

1,992

3,500

10

1,888

144,000

5,000

75,000

14,743

4,990

-

20,000

500

500,000

12

-

104,850

5,002,379

10

374,900

-

1,177,744

105,600

356,482

-

71,484

432,000

500

44,500

110,400

30,000

71,620

1,612

127,866

140,500

2,780

1,134,381

19,095

687

11,000

75,474

-

3,893,194

989,411

-

300,534

62,115

58,441

-

1,158,178

KUWAIT

Company Name Lt Price % Chg Volume

BUSINESS

Gulf Times Friday, October 28, 20166

Apple IncMicrosoft Corp

Exxon Mobil CorpJohnson & JohnsonGeneral Electric Co

Jpmorgan Chase & CoProcter & Gamble Co/The

Wal-Mart Stores IncVerizon Communications Inc

Pfizer IncVisa Inc-Class A Shares

Chevron CorpCoca-Cola Co/The

Intel CorpMerck & Co. Inc.

Cisco Systems IncHome Depot Inc

Intl Business Machines CorpWalt Disney Co/The

Unitedhealth Group Inc3M Co

Mcdonald’s CorpNike Inc -Cl B

United Technologies CorpBoeing Co/The

Goldman Sachs Group IncAmerican Express Co

Du Pont (E.I.) De NemoursCaterpillar Inc

Travelers Cos Inc/The

114.87

60.54

87.46

116.22

28.68

69.70

87.07

69.93

48.25

32.73

82.04

101.37

42.27

34.99

61.78

30.45

123.10

153.60

93.96

142.18

166.38

112.39

52.19

100.39

143.14

178.00

66.88

69.95

83.60

108.44

-0.62

-0.16

0.42

1.45

-0.68

0.82

-0.38

0.49

1.30

1.02

0.35

0.18

-0.40

0.20

1.49

-0.34

0.32

1.18

0.50

-0.04

-0.08

0.25

0.41

-0.61

-1.65

0.53

0.12

1.84

-0.63

-0.35

11,506,418

9,930,940

3,351,970

2,512,712

9,421,075

5,255,116

2,832,656

2,639,741

9,097,962

6,456,633

2,295,659

2,770,943

7,089,477

5,172,194

5,054,756

5,601,188

1,548,738

1,414,811

2,937,336

1,181,555

507,901

952,633

3,510,684

1,080,777

3,999,992

900,948

1,551,173

1,361,990

1,701,093

903,224

DJIA

Company Name Lt Price % Chg Volume

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

1,709.00

281.10

4,210.00

226.40

3,531.00

226.10

928.00

3,438.50

1,035.00

1,331.00

214.25

138.90

339.20

700.70

960.50

1,582.00

1,193.00

820.50

4,950.00

2,307.00

2,845.00

244.00

714.50

0.00

555.50

490.00

2,170.50

2,081.50

196.40

740.50

2,796.50

0.00

1,462.00

7,319.00

7,005.00

1,395.50

2,964.00

1,671.00

743.00

8,400.00

200.20

4,806.00

1,058.00

1,611.00

455.90

888.00

340.10

2,850.00

57.50

210.10

985.00

358.10

3,371.00

172.10

281.40

413.50

3,431.00

3,134.00

706.00

670.50

3,938.00

627.50

1,151.00

553.50

243.40

1,630.50

315.70

1,614.00

1,568.00

921.00

315.50

348.60

2,189.00

6,670.00

2,660.00

1,460.00

1,816.00

215.10

3,752.00

593.50

1,468.00

2,186.00

379.25

578.00

4,611.00

493.50

1,227.50

2,330.00

438.90

190.50

544.00

997.50

448.90

4,614.50

2,473.00

1,270.00

0.00

525.00

1,102.00

1,925.00

659.50

0.95

0.21

-3.29

-0.48

0.09

-0.07

-0.22

-0.42

1.47

-0.52

0.33

-1.70

0.77

0.39

0.05

0.00

0.34

2.43

1.00

0.00

-0.21

0.25

0.21

0.00

1.09

0.62

1.64

1.61

1.39

0.54

0.20

0.00

2.31

1.60

-1.13

-0.07

-2.53

-1.24

-0.73

0.06

-0.10

1.61

0.76

1.00

0.53

0.17

-0.64

-0.63

2.90

0.24

-1.89

-0.33

0.15

2.81

-0.28

-2.18

-0.67

0.13

-0.49

0.75

1.48

0.80

0.26

-0.27

1.06

0.25

1.19

0.37

0.51

-2.44

-1.77

0.20

-0.05

-0.07

-0.41

0.00

-0.33

-0.09

-0.48

-1.41

-0.41

-0.50

-2.15

-2.45

0.61

1.14

-1.01

-0.85

-7.77

4.79

0.55

-1.14

0.07

-3.40

0.57

-0.39

0.00

0.38

0.92

0.05

0.92

3,491,134

4,437,789

889,538

38,435,016

1,530,216

49,828,713

1,481,464

1,965,202

871,621

971,019

26,200,642

18,896,700

3,059,047

6,075,644

841,034

1,584,824

2,641,980

7,241,819

2,538,836

837,804

196,412

6,505,217

2,520,800

-

2,189,288

3,162,749

4,805,904

4,432,533

19,864,900

3,334,253

3,399,168

-

4,302,273

1,063,267

400,158

4,333,521

341,629

1,669,098

4,944,680

254,441

8,617,224

837,242

7,318,921

903,030

1,289,486

998,641

6,507,058

519,074

253,766,688

14,628,803

2,068,412

9,724,928

508,804

19,611,931

3,882,096

13,208,394

498,962

555,359

1,771,573

1,890,989

1,663,346

32,915,725

1,205,174

3,363,425

42,164,556

10,842,897

5,679,040

652,390

1,986,886

2,493,474

3,066,616

4,091,608

3,757,192

203,059

1,004,941

4,323,015

329,995

10,526,491

589,950

3,120,531

2,206,208

788,283

20,981,639

3,989,884

4,709,906

27,536,354

8,614,258

777,871

9,883,527

85,708,282

9,198,138

884,421

7,760,207

5,079,664

627,634

1,325,763

-

4,415,890

5,552,557

336,530

2,090,183

FTSE 100

Company Name Lt Price % Chg Volume

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

9,423.00

1,288.00

4,072.00

2,401.00

1,537.00

2,092.50

455.10

379.50

2,691.50

5,190.00

484.10

8,916.00

1,075.50

599.30

17,895.00

1,213.50

6,004.00

3,131.00

7,301.00

0.17

0.23

-1.38

1.44

0.49

2.55

0.91

0.80

-0.13

-1.52

-1.04

-1.27

0.14

7.83

2.14

-0.08

-0.35

0.64

-1.78

1,057,700

5,227,300

2,270,000

1,107,600

1,315,600

9,097,000

12,001,000

22,114,000

732,700

958,800

6,137,000

1,091,700

4,927,600

42,246,000

923,400

2,302,400

5,252,400

3,858,600

825,500

TOKYO

Company Name Lt Price % Chg Volume

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 Holdings Inc

Mazda Motor CorpKomatsu Ltd

West Japan Railway CoMurata Manufacturing Co Ltd

Kansai Electric Power Co IncDenso Corp

Sompo Holdings IncDaiwa 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

1,248.50

5,106.00

1,034.50

519.40

4,788.00

1,459.00

282.60

1,408.50

3,537.00

3,132.00

35,770.00

3,013.00

1,644.50

4,468.00

993.70

444.90

936.00

1,804.50

549.50

534.70

676.00

19,570.00

17,220.00

4,608.00

6,206.00

1,706.50

7,675.00

4,021.00

1,471.50

1,446.50

5,743.00

1,482.00

1,701.50

2,316.50

6,575.00

14,465.00

967.00

4,361.00

3,321.00

2,868.00

415.10

2,053.50

3,682.00

4,704.00

2,344.00

2,417.50

2,693.50

9,895.00

0.00

971.90

1,550.00

3,991.00

3,302.00

4,319.00

3,435.00

3,987.00

438.60

1,525.00

595.20

6,622.00

172.80

501.30

2,430.00

4,040.00

2,602.00

2,799.50

1,349.50

1,619.50

3,635.00

76,290.00

10,165.00

1,277.00

2,455.50

7,659.00

30,450.00

2,319.50

24,885.00

6,785.00

1,199.50

2,961.50

3,067.00

-2.23

-0.99

-0.14

-1.09

-0.33

0.17

-0.32

0.68

-0.28

-0.38

-1.87

0.17

0.34

-0.56

0.74

-0.07

-0.43

1.89

-0.05

0.34

-1.86

-0.76

-0.46

-0.02

-0.23

-0.20

-0.40

-0.86

-0.74

-0.31

-0.14

0.14

-0.50

-0.17

0.70

0.14

-0.21

-0.89

-0.51

0.47

0.63

0.39

-0.30

-0.44

0.93

0.35

-0.24

0.16

0.00

-0.29

-0.45

0.78

-0.69

-1.03

0.35

0.55

-2.03

-1.07

1.26

0.56

0.76

1.38

0.21

0.40

0.06

0.11

-0.04

8.29

0.50

-1.22

1.14

0.04

-0.71

-0.43

-0.68

-1.80

1.49

-0.95

-0.12

-3.00

-1.03

5,011,700

840,000

10,202,500

18,626,000

1,428,200

3,461,300

8,449,000

5,947,200

6,331,200

2,654,800

426,500

894,300

3,351,300

2,364,700

5,006,500

7,437,200

5,283,000

4,491,300

4,779,100

64,091,200

7,109,300

636,900

244,700

696,600

580,800

1,955,700

401,100

2,115,700

2,042,500

4,549,000

1,927,900

4,651,100

3,061,800

3,875,900

1,064,000

765,700

1,273,400

1,977,800

942,000

1,431,300

10,299,500

3,027,700

1,816,500

2,534,400

1,653,600

5,665,000

1,369,800

850,300

-

3,540,000

6,246,000

1,964,300

4,072,500

1,492,900

1,933,600

4,131,900

8,599,000

3,365,200

6,413,000

3,859,800

130,806,400

32,444,200

2,777,200

2,420,900

4,096,200

2,126,000

2,681,000

24,685,900

1,532,400

151,300

1,895,000

2,004,700

1,506,800

1,145,000

247,600

7,939,800

5,839,500

560,400

3,196,900

8,827,300

1,987,900

TOKYO

Company Name Lt Price % Chg Volume

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 Port Holding

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 Shipping Ports Ltd

Esprit Holdings LtdFih Mobile Ltd

Hang Lung Properties LtdHang Seng Bank Ltd

Henderson Land Development

3.00

31.50

3.48

5.87

4.71

27.70

10.20

96.25

4.46

5.67

19.80

20.25

89.10

24.00

5.68

17.10

19.72

13.44

16.14

9.19

11.18

78.25

10.20

8.14

6.93

2.57

17.24

139.90

45.85

1.69

-0.63

-1.14

-1.51

-3.29

0.91

-1.92

-1.08

-4.70

-0.87

-1.00

-0.98

-1.00

0.00

-1.39

-1.04

-0.40

-0.15

-2.06

-0.11

-0.71

-0.45

-2.67

-2.16

0.58

-2.28

-0.92

-0.85

-1.29

24,470,550

1,285,125

249,189,361

29,035,881

36,979,000

16,067,602

7,830,585

4,040,992

31,346,109

218,214,882

54,121,664

4,209,500

24,114,791

18,891,379

88,992,600

7,335,000

6,272,339

5,066,000

31,130,818

36,922,000

5,171,457

1,542,795

120,332,387

2,035,345

1,878,308

5,252,916

2,323,931

1,023,762

2,616,598

HONG KONG

Company Name Lt Price % Chg Volume

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

14.98

205.60

58.70

0.00

4.69

3.86

42.85

9.71

5.41

40.50

72.85

13.34

115.90

80.40

210.60

58.10

-0.13

-0.39

-0.17

0.00

-0.64

-0.77

-0.92

-0.41

-1.99

-0.37

-0.14

0.45

0.35

-2.37

-0.75

-0.09

9,731,676

2,291,583

19,581,085

-

219,751,212

10,967,756

2,946,608

16,380,830

129,071,337

21,904,155

2,231,416

4,675,651

3,969,406

2,675,351

10,686,453

3,692,230

HONG KONG

Company Name Lt Price % Chg Volume

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

504.35

1,253.60

461.70

199.65

3,941.55

414.10

397.15

79.55

522.00

2,418.10

746.90

255.40

1,048.70

141.80

175.50

290.80

151.70

5,860.15

1,299.75

1,480.35

1,475.30

806.60

243.10

1,003.50

1,179.05

77.50

284.30

1,378.55

840.30

148.30

3,313.65

1,252.10

774.30

958.55

435.40

3,324.80

316.30

585.75

223.70

22,207.75

323.10

676.60

138.25

153.05

2,761.50

485.65

1,085.45

243.35

305.00

1,525.00

-2.39

-2.84

-2.09

-0.87

0.10

-2.12

-0.36

-1.61

-1.52

0.91

1.11

-1.29

-0.51

-1.53

0.00

0.24

-0.10

-0.15

-0.70

-1.79

-0.47

-0.60

1.82

-1.06

-1.90

-1.52

2.12

3.29

-0.30

-1.26

-3.08

1.03

-2.09

-1.39

0.67

2.54

-0.94

1.40

-1.43

-1.13

1.70

0.08

-0.75

-1.35

-2.21

-0.39

-3.35

-2.13

-0.03

-1.17

2,768,195

5,100,444

1,985,968

11,814,196

367,372

3,888,298

15,376,701

10,914,896

19,396,179

1,525,087

2,836,638

13,547,242

3,063,621

7,719,229

4,050,522

17,839,057

2,855,484

2,085,827

986,399

641,596

1,744,693

1,153,688

18,050,914

3,735,738

1,190,825

19,650,282

19,066,195

3,219,215

3,308,298

9,124,748

990,887

2,987,713

2,079,387

927,629

1,631,443

738,273

2,526,041

884,422

3,022,642

12,763

5,218,728

2,365,288

5,100,828

6,775,497

228,150

17,896,627

1,888,908

10,019,436

7,320,521

467,806

SENSEX

Company Name Lt Price % Chg Volume

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

18,236.52

2,136.03

5,242.06

14,860.70

48,026.74

64,387.82

6,986.57

4,533.57

10,717.08

9,197.20

17,336.42

1,382.01

23,132.35

5,378.40

1,297.09

27,915.90

8,615.25

2,828.94

27,473.83

5,416.84

+37.19

-3.40

-8.20

+53.14

+221.30

+562.13

+28.48

-1.02

+7.40

+23.90

-55.42

-0.69

-193.08

-63.73

+7.65

+79.39

+0.00

+0.37

-452.02

+17.16

Doha Securities MarketSaudi Tadawul

Kuwait Stocks ExchangeBahrain Stock Exchage

Oman Stock MarketAbudhabi Stock MarketDubai Financial Market

10,371.17

5,936.30

5,397.85

1,148.16

5,497.05

4,292.50

3,318.39

+8.48

+51.31

-5.85

+3.27

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+26.67

+14.19

“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

Customers queue outside a branch of Barclays Bank in Manchester northern England. Shares in the bank rallied to the top of the FTSE 100 risers’ board, as investors shrugged off rising mis-selling costs and flat net profits to focus on news of a jump in underlying pretax earnings.

European equities tentativeas pound makes brief rallyAFPLondon

European stocks made little head-way yesterday amid a fl urry of company earnings reports, while

a rally by the British pound after bet-ter-than-expected economic growth data proved short lived.

“Stock markets are going through a period of churn as investors digest a slew of corporate results, notably from European banks and US tech fi rms,” Jasper Lawler, analyst at CMC markets, said in an investors’ note.

“The FTSE 100, like the other main European indices, reversed early losses to make small gains, helped by a re-bound in oil prices,” he added.

London stocks closed 0.4% higher at 6,986.57 points, while Frankfurt’s DAX was up 0.1% at 10,717.08, and the CAC in Paris was little changed, at 0.02% lower at 4,533.57.

Sterling bounced after offi cial data showed that Britain’s economy grew

by 0.5% in the three months following the country’s referendum in favour of exiting the European Union.

The currency shot as high as $1.2272 and strengthened to just above 89 pence against the euro in morning deals, before trimming gains.

Capital Economics’ John Higgins said the GDP fi gures as well as Japanese carmaker Nissan’s decision to continue investing in Britain and a breakthrough on a Canada-EU trade pact “have not assuaged the doom-mongers’ con-cerns, judging by sterling’s failure to hold on to a short-lived gain”.

“This presumably refl ects the fact that the GDP fi gures showed contin-ued weakness in the export-orientated manufacturing sector and the naysay-ers’ view that the recent calm in the economy will inevitably be followed by a storm,” he said in an investors’ note.

A stronger pound weighs on export-ers, making their goods more expensive for buyers using weaker currencies.

Shares in Barclays Bank rallied to the top of the FTSE 100 risers’ board, as

investors shrugged off rising mis-sell-ing costs and fl at net profi ts to focus on news of a jump in underlying pretax earnings.

Deutsche Bank shares fi rmed 0.6% to €13.38 at close, after the troubled German lender posted a surprise third-quarter net profi t.

Deutsche’s fi nancial health has been in the spotlight ever since the US De-partment of Justice last month sought an unaff ordable $14bn fi ne over its role in the subprime mortgage crisis – sparking fears it might have to raise fresh capital.

“A surprise move into profi t for Deutsche Bank has allayed some of the fears that sent shares in Germany’s biggest bank into free fall,” noted IG analyst Joshua Mahony.

US stocks rose modestly following a plethora of mostly solid earnings, in-cluding from Tesla Motors and Twitter.

In other corporate news, US semi-conductor maker Qualcomm said it would buy Dutch rival NXP in a $47bn megadeal, sending shares in both higher.

BUSINESS7Gulf Times

Friday, October 28, 2016

BUSINESS9Gulf Times

Friday, October 28, 2016

Iraq serves sweet tea and raw data to avoid output cutsOpec member digs in heels, putting global supply cut at risk; oil ministry off ers charm, access to woo media in output spat

BloombergDubai

With trays of sweet tea and a tour of Babylonian treasures at the national museum, Iraq’s Oil Minister Jabbar al-Luaibi welcomed energy reporters to Baghdad. A month after railing about Opec data, he chose a softer approach to make the case that his country pumps more oil than the group acknowledges and won’t join other members in cutting output.Iraq took the unusual step this week of trying to persuade oil-industry watchers, and by extension the Organization of Petroleum Exporting Countries, to accept its statistics pegging last month’s crude output at more than 4.7mn bpd. Opec has calculated a lower tally

in recent months, based on information from analysts.The stakes are much higher now. Iraq, Opec’s second-largest producer, is embroiled in a war against Islamic State fighters occupying much of the country, and it needs to sell all the oil it can pump to pay for and win the fight. The government wants an exemption from cuts as Opec prepares to assign output quotas to its members in an eff ort to rein in a global glut and shore up prices. By digging in its heels, Iraq may prevent Opec from paring output for the first time in eight years.“We want you to see for yourselves what our production is,” al-Luaibi said last Sunday. “We have reached good figures, but still we are ambitious and heading toward more production.”Opec will meet on November 30 to try to complete a deal its 14 members reached last month in Algiers that aimed at reducing their collective output and propping up crude. The group signalled last month that Iran, Nigeria

and Libya would be spared from any cuts, due to sanctions and security issues that have curtailed their production. Iraq, citing its war with Islamic State militants, wants similar treatment.After inveighing in Algeria against the secondary sources of data cited by Opec, al-Luaibi off ered his media guests at the Oil Ministry an unprecedented breakdown of the nation’s off icial output figures. Al-Luaibi reiterated that Iraq is fighting a costly war against extremists “on behalf of the world” and would not cut production from current levels.Instead, Deputy Oil Minister Fayyad al-Nima said, the question for Iraq is, “do we freeze or do we go up?” The ministry issued a statement a few hours later announcing the tender of 12 small to medium-sized oil fields – a sign that it has no plans to scale back output.Opec secretary-general Mohammed Barkindo arrived in Baghdad on Tuesday to discuss Iraqi supply. He said the producer group is facing its “hardest” challenge as members debate

cuts needed to balance the market, in remarks distributed by Iraq’s Oil Ministry.Opec pumped a record 33.75mn bpd last month, data compiled by Bloomberg show, as its members scrap with each other and with higher-cost producers for market share. Benchmark Brent crude is trading at around $50 a barrel, less than half its 2014 peak.While Iraq refuses to pump less oil, Falah al-Amri, the head of the state oil-marketing agency, said the ministry wants also to resolve the “misunderstanding’” over conflicting numbers for the crude it produces.Much of the discrepancy arises from oil pumped in Iraq’s semi-autonomous Kurdish region, which exports independently of the federal government, al-Amri said. Some secondary sources give much lower figures for Kurdish output than the ministry’s monthly data. Another issue in the spat over Iraq’s output is the amount of condensate and oil products that the country blends with its crude before storing, consuming or exporting it, he said.

As part of its outreach eff ort, the ministry took the exceptional step of providing a breakdown of output from each of its producing regions and bringing the heads of each regional company to Baghdad to meet the reporters. But their divergent numbers for Iraqi production have yet to be reconciled.Iraq’s finances have been under pressure since mid-2014, when a drop in oil prices coincided with Islamic State’s capture of large swathes of territory in the north and west of the country. The Iraqi army and other forces began an off ensive last week to recapture the northern city of Mosul.Posters honouring fighters killed in action against Islamic State adorned the walls and gates of public buildings in Baghdad, 400km (250 miles) behind the front lines of the Mosul campaign.“Iraq is fighting a vicious war, a bloody war,” al-Luaibi said, “In spite of all the diff iculties, Iraq is progressing very fast in pushing the production of oil.”

Opec can’t succeed alone as cuts would barely drain oil surplusAlgiers deal aimed at fixing unprecedented oil-inventory glut; even the maximum cut Opec’s considering wouldn’t achieve this

BloombergLondon

Even if Opec defi es a sceptical market by im-plementing output cuts in full, it still won’t drain the ocean of surplus oil already pumped

from the ground.The Organization of Petroleum Exporting Coun-

tries aims to shrink the world’s bloated oil inven-tories with its fi rst production cut in eight years, according to secretary-general Mohammed Bar-kindo. Yet the bloc’s own data show that even the maximum reduction under consideration would barely dent record stockpiles next year. That makes securing help from competitors – chiefl y Russia – critical to ending the glut.

Global supplies have exceeded demand for three years straight, resulting in the accumulation of an oil-inventory surplus big enough to fi ll about 160 supertankers. While cutting output to the lower end of the range adopted last month would stop a further expansion, it would curb the existing ex-cess by just 11% next year, the group’s data show. If the organisation can’t make a deal with Russia, there’s a risk of another price collapse, according to Commerzbank AG.

“Would the proposed production range actu-ally reduce brimming global inventories?” said Tamas Varga, an analyst at PVM Oil Associates Ltd in London. “The signs are not encouraging. Based on current available data and past precedents, next year will unlikely see the supply-demand balance tighten.”

Opec agreed on September 28 in Algiers to re-duce output to a range of 32.5mn to 33mn bpd, and determine how much each member should cut by its next meeting on November 30. The accord helped push oil prices to a 15-month high above $50 a barrel earlier this month, although they have subsequently fallen amid doubts the group will fol-low through on its pledge.

The Algiers accord is “primarily geared” toward bringing down “the high, unsustainable level of inventories that have built up over the last two years or so,” Opec’s Barkindo said on October 18. Saudi Arabian Energy and Industry Minister Kha-lid al-Falih, who represents Opec’s most powerful member, said the following day he’s confi dent the organisation will succeed.

Many analysts agree, with International Energy Agency executive director Fatih Birol predicting the deal will hasten the re-balancing of supply and demand in 2017. World oil inventories will decline by 270,000 bpd next year if the cuts are imple-

mented, or stay roughly unchanged if Opec keeps output steady, according to Harold “Skip” York, vice president of integrated energy at consulting fi rm Wood Mackenzie Ltd in Houston.

Still, Opec’s own data indicate that cutting pro-

duction to the bottom of the proposed range would only have a superfi cial impact on stockpiles. If Opec reduces output to 32.5mn bpd – a cut of 900,000 a day from September levels – it would be pump-ing slightly less than the amount needed to meet demand in 2017, the group’s monthly report from October 12 shows. Inventories would contract as a result, but only by 36.5mn barrels over the course of the year, a negligible impact on a stockpile sur-plus the group estimated at 322mn barrels above the fi ve-year average in August.

If Opec doesn’t act to reduce stockpiles next year, Societe Generale’s price forecasts would probably have to be revised lower, Mike Wittner, head of oil-market research, said in an e-mailed note. Over the fi rst three quarters of 2017, the bank currently sees Brent averaging $55 a barrel and West Texas Inter-mediate at $53.50.

“It will be a long road,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Pari-bas in London, who predicts Opec action wouldn’t pare inventories until the third quarter of next year.

Cutting output by enough to achieve Opec’s objective may then hinge on persuading rivals such as Russia to join in. The contribution of such countries is “every bit as critical” in stabilising the market as any intervention by Opec, Saudi Arabia’s al-Falih said.

Yet Russia has given mixed signals on its willing-ness to collaborate, with President Vladimir Pu-tin suggesting in Istanbul on October 10 that the country was prepared to reduce supply, only to add two days later that it would at most refrain from further increases.

“We are working on diff erent options and mech-anisms of coordination between Opec and non-Opec,” Russian Energy Minister Alexander Novak said on Monday in Vienna after talks with Opec of-fi cials. The discussions addressed “concrete” out-put levels, he said, declining to elaborate. Output cuts are not an option for Russia, the nation’s en-voy to Opec said on Tuesday, according to Interfax.

Russia has off ered to help Opec in the past, only to renege on its promises. Raising expectations of a pact now – after attempts earlier this year and in 2014 failed – heightens the risk of a price collapse if no agreement is reached, according to Commerzbank.

“For all the grand promises Russia and Opec are throwing around, the economic and political ob-stacles to their cooperation are just too high,” said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. “The danger for them is what happens when the market realises they’ve been bluffi ng.”

Opec is at ‘hardest’ stage in its historyBloombergIrbil

Opec secretary-general Mohammed Barkindo said the 14-nation group

is facing its toughest challenge as members debate oil-production cuts needed to balance the mar-ket.

“Opec has gone through good times and conditions for more than half a century and hard ones too, and the current stage is the hardest one,” Barkindo said. Opec is working hard on a solu-tion to stabilise the market, he said after meeting Oil Minister Jabbar al-Luaibi for talks.

Iraq, the second-largest pro-ducer in the Organization of Pe-troleum Exporting Countries, threw an obstacle in Opec’s path toward a production-cuts deal last weekend when it baulked at joining eff orts to trim output. The country should be exempted from curtailing supply because it’s embroiled in a war with Is-lamic militants, al-Luaibi said Sunday in Baghdad.

‘Gulf Opec ready to cut oil output by 4%’

Saudi Arabia and its Gulf Opec

members are willing to cut

4% from their peak oil output,

energy ministers from the Gulf

countries told their Russian

counterpart this week, sources

familiar with the matter told

Reuters. The off er was made

at a closed-door meeting in

Riyadh, where the ministers met

on Sunday.

But Russian Energy Minister

Alexander Novak told the off i-

cials that Moscow would not cut

output, but rather freeze it at

current levels, the sources said.

BUSINESS

Gulf Times Friday, October 28, 201610

Putin’s quiet energy cache said to eye $29bn depositBloombergMoscow

Rosneftegaz, the secretive state

vehicle that holds Russia’s invest-

ment in its biggest oil producer,

won approval to put billions in cash

in the bank even as the government

pressures companies it controls to

handover more of their profits, ac-

cording to off icial documents seen

by Bloomberg.

The company was authorised

to put as much as 1.8tn roubles

($29bn) on deposit with Gazprom-

bank, Russia’s third-largest lender

and a target of international sanc-

tions, according to the documents,

which were confirmed by two

off icials who spoke on condition of

anonymity. The amount — equiva-

lent to 2.2% of the country’s annual

economic output — was approved

by government directive on Sep-

tember 30, as the Kremlin is strug-

gling to squeeze cash dividends

from companies to cover a budget

shortfall forecast to reach 3.7% of

GDP this year.

Rosneftegaz has few employees

and its operations involve holding

the government’s controlling stake

in oil giant Rosneft, as well as

almost 11% of natural gas producer

Gazprom and 28% of power utility

Inter RAO UES. Igor Sechin, the

chief executive off icer of Rosneft

and a long- time ally of President

Vladimir Putin, is also chairman of

Rosneftegaz.

“From the economic point of

view, it’s impossible to explain

why Rosneftegaz is needed,” said

Konstantin Simonov, president of

Russia’s National Energy Security

Foundation. All it does is accumu-

late dividends, he said.

For the Kremlin, he said, it’s

important to have companies

with large cash piles available to

finance special projects that pow-

erful people want implemented,

outside the cash-strapped budget.

As a result, they’re allowed to

resist pressure to pay dividends,

Simonov said.

Under heavy pressure to narrow

the deficit, the government has

slashed investment projects and the

Finance Ministry has stepped up

eff orts to extract money from Ros-

neftegaz and other state compa-

nies. But many of the largest Corps,

whose top executives enjoy direct

access to Putin, were able to win

exemptions earlier this year from

a government order that they pay

half their profits in dividends.

Of the 149bn roubles in profit

Rosneftegaz reported for 2015,

some 107bn roubles were retained

for investment projects, accord-

ing to the documents seen by

Bloomberg. The holding company

agreed to pay 36bn roubles in

dividends to the government and

put the remaining 6bn roubles in

its “reserve fund.” Its investment

projects include power plants in the

Kaliningrad region on the Baltic Sea

and a Rosneft-owned shipyard on

the Pacific coast.

The company’s huge cash hoard

is used for special urgent projects

in the energy sector, said Rustem

Tankayev, head of a Moscow energy

consulting firm. “Rosneftegaz’s ac-

tivity is regulated by the president

personally,” he said.

The documents provided no

explanation of the source of 1.8tn

roubles, other than noting that

the figure was 63.5% of the book

value of Rosneftegaz’s assets at the

end of 2015. The company doesn’t

publish public accounts and even

government off icials say details of

its financial position remain hard to

come by.

In addition to dividends, the

company earns interest on

its cash and has collected the

proceeds from sales of state

shares. It’s likely to come into

about 700bn roubles later this

year, when the government sells

19.5% from its Rosneft stake. The

proceeds are supposed to be

returned to the government with a

special dividend, according to the

Finance Ministry’s budget plans.

Without those funds, the deficit

may reach 4.5% of gross domestic

product this year.

The government authorized

the Rosneftegaz deposits to be

placed with Gazprombank for up to

three years, in any combination of

dollars, euros and roubles and with

interest rates no lower than 0.01%

a year. The lender held 3.72tn

roubles on customer accounts as

of September 1, according to Fitch

Ratings.

Rosneftegaz declined to com-

ment. The Economy Ministry,

which oversees the agency that

administers the state’s stake in the

holding; the off ice of Deputy Prime

Minister Arkady Dvorkovich, who

prepared one of the documents;

and Gazprombank didn’t respond to

requests for comment.

Rosneftegaz has so far resisted

government demands to provide

forecasts of its profits for the next

few years, something the Finance

Ministry has been seeking from

big state companies as it plans the

budget. In a letter dated Sept. 27,

Rosneftegaz said it had appealed di-

rectly to the president on that issue,

according to the documents.

Kremlin spokesman Dmitry

Peskov said on Tuesday that Putin

“has the basic information” about

Rosneftegaz’s finances. He was

asked about a report in Vedomosti

citing Rosneftegaz’s response to re-

quests from government ministries

for financial information. He denied

Putin has direct control over its

finances or operations.

Belgium makes breakthrough in talks for EU-Canada trade dealAFPBrussels

Belgium announced yesterday a breakthrough in talks to secure a landmark EU-Canada trade

deal by winning over the leaders of a recalcitrant Belgian region, potentially snapping a deadlock which threatened European credibility anew.

However, the announcement came too late for EU leaders and Canadian Prime Minister Justin Trudeau to go ahead with a signing ceremony in Brussels yesterday.

“An agreement” has been found in support of the deal, Belgian Prime Minister Charles Michel told a press conference after marathon talks to win over holdouts in Belgium’s French-speaking community.

Canada’s Foreign Minister Stephane Dion hailed the move to break the log-jam.

“If it materialises, it’s excellent news,” he said during a visit to Paris, adding he was “cautiously optimis-tic”.

Under complex constitutional ar-rangements, Michel needed all of Bel-gium’s regional governments to back the deal before he could sign up.

In turn, the accord required all 28 EU members to approve it.

Confi rmation of the intra-Belgian agreement came swiftly from Paul Magnette, the head of government of the southern French-speaking Wallo-nia region and the leading holdout to the Comprehensive Economic Trade Agreement (CETA).

Donald Tusk, president of the Euro-pean Council, hailed the “good news” from Michel as he tweeted that he would contact Trudeau “once all pro-cedures are fi nalised for EU signing CETA.”

Tusk, who had warned that failed ne-gotiations with such a close ally as Cana-da would have a serious impact on Brus-sels’ international standing, had hoped for a signing summit with Trudeau until as late as Wednesday morning.

“Today’s summit is cancelled. For now, no new date has been set,” a Eu-ropean source told AFP on condition of anonymity. “The next step is for the entire EU to be able to sign the agree-ment.”

With no agreement in sight, Tru-deau’s offi ce said overnight that he had postponed plans to travel to Brussels.

Canada’s Trade Minister Chrystia Freeland had earlier dismissed Brussels as “incapable” of steering international negotiations.

The stakes have been high as Bel-

gium had become a lighting rod for warnings that the EU’s international standing, already battered by Britain’s shock June Brexit vote, would suff er further if seven years of trade negotia-tions go to waste.

Hinging on the outcome are trade talks with other countries, including more controversial negotiations with the United States.

The CETA pact would link the EU’s

single market of 500mn people — the world’s biggest — with Canada’s 10th largest global economy in what would be the most ambitious tie-up of its kind so far.

In almost a week of drawn-out talks, leaders of Wallonia, a 3.5mn-strong re-gion south of Brussels, had demanded guarantees that CETA will not harm lo-cal farming and other interests.

Magnette had especially opposed

terms of the deal intended to protect international investors which critics say could allow them to force govern-ments to change laws against the wish-es of the people.

“We have fi nally found an agreement among the Belgians that will now be submitted to European institutions and our European partners,” Magnette said.

“Wallonia is extremely happy that our demands were heard,” he added.

EU sources told AFP the documents agreed by the Belgian politicians must be vetted by all 28 EU member states as well as the Wallon parliament and other Belgian government institu-tions.

An EU source told AFP on condition of anonymity that Tusk might phone Trudeau on Saturday to discuss the next steps, including possibly a signing ceremony.

Belgium’s Prime Minister Charles Michel (left) and Foreign Minister Didier Reynders make a statement at the end of a meeting on the Comprehensive Economic and Trade Agreement (CETA) at the Lambermont Residence in Brussels yesterday. “An agreement” has been found in support of the deal, Michel told the press conference after marathon talks to win over holdouts in Belgium’s French-speaking community.

ECB becomes junk bond investor in stimulusprogramme after cut

BloombergLondon

The European Central Bank has found itself hold-ing junk bonds under its

stimulus programme after K+S debt was downgraded by S&P Global Ratings.

S&P cut the debt of Europe’s biggest potash producer one step to a level below investment grade. The downgrade means that the bonds have no invest-ment-grade ratings that would make it eligible for the ECB’s asset-purchase programme.

Before the buying began, the ECB said it wouldn’t have to automatically sell notes down-graded to junk, but it has also said it will take steps to manage risks in its holdings. The central bank has bought €34bn ($37bn) of investment-grade corporate bonds since starting its stimulus programme in June.

“Hopefully the ECB was aware in advance that there’s a price to pay for putting so much money into the market in this way,” said Gordon Shannon, a money man-ager at TwentyFour Asset Man-agement, which oversees about £7.3bn ($8.9bn). “If they’ve bought a bond from a company that goes bankrupt, for exam-ple, they might never get their money back. Investors expect them to hold onto these bonds for years, and if they don’t, the market will be shaken.”

The Frankfurt-based ECB has holdings in all three of K+S’s bonds, according to a list of notes from the central bank. An offi -cial at the ECB declined to com-ment on whether the central bank planned to sell its holdings of K+S.

The Kassel, Germany-based company has €1.5bn of bonds maturing in December 2018, December 2021 and June 2022, according to data compiled by Bloomberg. All the notes declined last week, led by the 2021 securi-ties, which fell 1.5¢ on the euro to 111¢, the lowest in almost a year.

While K+S is still rated invest-ment grade by Egan-Jones Rat-ings Co, that isn’t counted by the ECB, which only include rank-ings from S&P, Moody’s, Fitch Ratings and DBRS.

UK economy wins Brexit round-one before real test beginsBloombergLondon

The UK economy is holding its head up for now.

The 0.5% growth rate in the three months since the vote to exit the European Union may be a slowdown from the previous three months, but it’s faster than forecast and far from the dire warnings of recession some had predicted. Emboldening those who backed Brexit, the statistics of-fi ce declared “little evidence of a pro-nounced eff ect” from the June 23 ref-erendum.

Retail sales rose the most in more than a year in September, according to a separate report, and there was a vote of confi dence in the UK from Nissan Motor Co Britain’s biggest auto pro-ducer decided that it will build two

new models at its plant in Sunderland, where more than 7,000 people are em-ployed.

The question now for the econo-my, and those charged with leading it through the messy divorce from the EU, is whether that resilience endures or soon crumbles. Prime Minister Theresa May has still to start formal negotia-tions or even map out her plan for the future, creating uncertainty which risks prompting banks to fl ee, compa-nies to resist investment and consum-ers to retrench as infl ation also erodes their income.

“This is a really long, drawn-out process and we’ve just seen the early start of it,” former Bank of England pol-icy maker Danny Blanchfl ower said in a Bloomberg Television interview. “The suspicion is there’ll be more slowing to come — we’re in a fairly benign world with perhaps a tsunami coming.”

The economy grew 2.3% in the third quarter from the same period a year earlier, the statistics offi ce said. The expansion was powered by a 0.8% jump in services, long the backbone of the economy. There was shrinkage in construction and production, and manufacturing fell the most since 2012, showing some elements are already starting to suff er even as weakness in the pound makes exports more appeal-ing.

In the immediate future, the beat-ing of the 0.3% expansion anticipated by economists lessens the likelihood that BoE policy makers led by Governor Mark Carney will cut the benchmark interest rate again next week. Traders now see just a 3% probability of a re-duction after the BOE dropped the rate to a record low of 0.25% in the after-math of the referendum.

“There is no need to panic,” said

Alan Clarke, an economist at Scot-iabank in London. He still expects a slowdown in 2017, but said the data “right here, right now have reduced the urgency to act.”

UK government bonds fell yesterday, sending yields to the highest since the referendum, as investors reassessed the future path of policy. The pound erased its decline and was little changed at $1.2253 as of 12:40pm in London.

The expansion marked a 15th straight quarter of growth and leaves the econ-omy on course to match Germany and outpace the broader euro-area this year, underpinning the case of those who argue the UK doesn’t need to be in the EU to prosper.

“All signifi cant indicators show the economy having a strong head of steam going into the vote and a positive re-covery in the weeks since,’’ said Graeme Leach, a member of Economists For

Brexit. “Uncertainty has not under-mined economic performance.”

Chancellor of the Exchequer Philip Hammond, who is set to ease fi scal pol-icy next month, said the data showed the fundamentals are “strong,” though he cautioned that “the economy will need to adjust to a new relationship with the EU.” The Confederation of British Industry yesterday urged him to increase investment spending to counter companies’ concerns about the trading outlook.

All of this political and economic change is likely to play out over months and even years, leaving companies in the dark about the outlook.

“What is damaging fi rst and fore-most is the uncertainty,” International Monetary Fund managing director Christine Lagarde told Bloomberg Tel-evision yesterday. “What will be the relationship? It is not healthy. For the

next two-and-a-half years we know that the situation is unchanged and yet everything is changed.”

Despite being wrong-stepped by the economy’s fortitude to the shock refer-endum result, most economists coun-sel Brexit has still to happen and that its eff ects will take time to fi lter through to the economy. Infl ation has already accelerated to the fastest since 2014, hampering the ability of consumers and companies to spend.

The median forecast of those sur-veyed by Bloomberg is for economic expansion of less than 1% next year, half the pace projected for this year.

“The resilient post-referendum per-formance does not say anything about the UK’s ability to perform outside of the EU,” said Kallum Pickering, senior UK economist at Berenberg. “Today’s data does not alter our long-term view that Brexit will lower UK trend growth.”

BUSINESSGULF BUSINESS11Gulf Times

Friday, October 28, 2016

Samsung Electronics posts two-year low Q3 profit of $4.6bnCORPORATE RESULTS

Samsung Electronics yesterday said it aims to re-

cover quickly from the disastrous withdrawal of the

fire-prone Galaxy Note 7 that dragged third-quarter

mobile earnings to their lowest level in nearly eight

years.

The South Korean giant said it was expanding its

probe into the Note 7 fires beyond batteries, as it

tried to reassure investors that it would get to the

bottom of one of the worst product failures in tech

history.

It also held out the prospect of greater returns by

disclosing consideration of a share buyback, talked

up its semiconductor business and promised to

consider proposals for a corporate makeover from

US hedge fund Elliott Management.

The world’s top smartphone maker posted a 96%

plunge in third-quarter mobile earnings to 100bn

won ($88mn).

Overall operating profit was 5.2tn won ($4.6bn),

matching Samsung’s revised guidance and marking

a two-year low.

Before the Note 7 was discontinued, the firm had

estimated a 7.8tn won profit.

The scrapping of Samsung’s flagship phone erased

0.1 to 0.2 percentage points from South Korea’s

third-quarter GDP growth in quarterly terms, a

finance ministry off icial told Reuters on Tuesday.

The Apple rival said it now aimed to achieve fourth-

quarter mobile profit close to that of October-

December of 2015, on the back of sales of Galaxy S7

phones and lower-tier models.

Galaxy S7s — its other premium smartphones

with smaller screens — were on track to set a new

launch-year sales record for the company, it said.

Samsung has previously warned of another $3.1bn

hit to profit from the Note 7 withdrawal over two

quarters.

But it also said yesterday it expects overall earnings

to improve in the fourth quarter from a year earlier

on a strong performance by its chip and display

businesses.

As for what went wrong, Samsung still does not

know what caused the fires in devices sent to cus-

tomers as replacements for the initial 2.5mn Note

7s it recalled due to fire-prone batteries.

Co-CEO Shin said the battery might not be the only

problem, suggesting the root cause may be more

diff icult to determine than had been hoped.

Investors now want a clear plan for how Samsung

will revive earnings growth, repair its tattered brand

image and boost shareholder returns, hence the

company’s promise to consider a share buyback.

Samsung also said it was reviewing proposals by

Elliott, which include a special 30tn won dividend.

The company will respond to Elliott and announce

its shareholder returns policy by end-November.

Samsung SDI, supplier of the batteries blamed for

the first recall, reported a 110bn won operating loss

for the quarter on Note 7-related provisions — more

than double its losses for the same period a year

earlier.

Seeking to appease shareholders, SDI also an-

nounced a share buyback worth 298bn won.

Volkswagen

German auto giant Volkswagen yesterday lifted

its forecast for the year after swinging back to

profit, but the fallout from the group’s “dieselgate”

emissions cheating scandal weighed heavily on its

luxury brand Audi.

One year on from the crisis, the VW group’s recov-

ery appeared on track as it posted net profit of

€2.3bn ($2.5bn) for the three months to September

mber.

That was slightly less than analysts had predicted

but a sharp improvement from the €1.7bn net loss

over the same period last year. “Despite major chal-

lenges and the negative impact of the diesel issue,

the Volkswagen group remains on a solid financial

footing,” said chief financial off icer Frank Witter in

a statement.

But the result was overshadowed by news that Audi

— the biggest contributor to VW’s profits — had

lowered its own outlook as it grapples with rising

costs related to dieselgate and a recall over faulty

airbags made by supplier Takata.

The provisions to pay for refits, buy-backs and legal

costs have so far amounted to around €18bn, and

VW said it had added some €400mn more to the

pot in the third quarter.

Analysts believe the final bill could be far higher.

But in a sign it was turning the tide, VW group pre-

dicted that its full-year sales revenues “may reach

the prior year figure”, raising its previous forecast

of a 5% drop year-on-year.

It now also sees its operating return on sales — a

measure of profitability — reaching the “upper end”

of the previously forecast range of 5 to 6%.

Audi, which developed the group’s 3.0-litre engines,

said yesterday it had to deal with “additional

financial burdens” amounting to €620mn in the

third quarter.

It added that it expected its operating return on

sales for 2016 to be “considerably below” its target

of 8 to 10%.

Barclays

British bank Barclays yesterday set aside another

£600mn ($733mn, €672mn) to compensate cus-

tomers mis-sold insurance, one day after a similar

move from rival Lloyds.

Barclays revealed the extra funds needed to cover

costs linked to the payment protection insurance

(PPI) scandal contributed to it posting almost flat

net profit, or earnings after taxation, of £414mn for

the third quarter.

The lender’s performance in the three months to

the end of September mber was also hit by rising

credit impairment charges, it added in a results

statement.

That was partly off set by favourable currency

movements, as the pound tumbled after Britain’s

shock EU exit vote.

Barclays added that pre-tax profit rallied 35% to

£837mn, buoyed by a jump in fixed-income trading.

Chief executive Jes Staley — tasked with restoring

the bank’s reputation after a series of scandals —

said Barclays was committed to off loading non-core

assets as it switches focus to Britain and the United

States.

Britain’s banking sector has been blighted by the

long-running PPI scandal.

In August, the nation’s Financial Conduct Authority

(FCA) regulator slapped a June 2019 deadline on

PPI claims.

That was one year later than previously planned —

and sparked a raft of extra provisions.

In 2011, British banks lost a high court appeal

against tighter regulation of PPI, which provides

insurance for consumers should they fail to meet

repayments on a credit product such as consumer

loans, mortgages or payment cards.

PPI became controversial after it was revealed that

many customers had been sold it without under-

standing that the cost was being added to their

loan repayments.

British authorities subsequently banned simultane-

ous sales of PPI and credit products.

To date, British lenders have been forced to set

aside around £31bn to cover PPI compensation

costs.

The overall bill for Barclays now stands at £8.4bn.

Nokia

Finnish telecoms equipment group Nokia reported

a sharp drop in third-quarter earnings yesterday,

suff ering from weaker sales in the wireless network

market and warning that the market was likely to

shrink further in the coming year.

Its share price fell 7% on the news to its lowest level

in three years, despite analysts saying that Nokia

is now better placed than Ericsson to ride out the

downturn in the mobile network market following

its acquisition in January of broader-based rival

Alcatel-Lucent.

Ericsson earlier this month reported a more than

90% plunge in third-quarter profits and replaced its

chief executive.

The wireless network market is in decline after de-

mand for 4G mobile broadband equipment peaked

last year and a new cycle of network upgrades to

the still evolving 5G standard is not expected to

begin until around 2020.

So far Nokia is seeing scant benefit from the

purchase of Alcatel-Lucent, bought in a €15.6bn

($17bn) all-share deal, though the company said its

integration was proceeding to plan.

Nokia’s third-quarter network sales fell 12% from a

year ago to €5.32bn against an average expectation

of €5.39bn, with revenue declining in all geographic

regions.

However, Nokia is less dependent than Ericsson on

mobile broadband demand, as the Alcatel-Lucent

merger gave it a larger fixed-line networks busi-

ness.

Nokia, which is cutting thousands of jobs world-

wide, said it was on track with its Alcatel synergy

programme which is aiming to produce annualised

savings of 1.2bn euros in 2018.

Nokia’s total third-quarter operating profit fell

18% to €556mn, but that figure was buoyed by a

one-off patent licensing payment. The company

also announced yesterday the resignation of chief

financial off icer Timo Ihamuotila, who is leaving at

the end of the year to join Swiss engineering group

ABB after seven years in the job. He will be replaced

by Kristian Pullola, currently senior vice president,

corporate controller.

Deutsche Bank

Germany’s biggest bank Deutsche Bank swung

back into profit in the third quarter, helping to ease

concerns about the troubled lender and its financial

strength.

Net profit hit €278mn ($303mn) in the three months

to the end of September mber, compared to a €6bn

loss in the same period last year, the Frankfurt-

based bank said yesterday.

Analysts had expected the bank to report a

€600mn loss.

However, the lender said it had also set aside about

€500mn in the third quarter to help cover costly

ongoing lawsuits.

Deutsche is at present locked in negotiations with

the US authorities to settle a fraud investigation

over the misselling of mortgage-backed securities

in the runup to the 2008 financial crisis.

In a statement releasing the results, Deutsche’s

chief executive John Cryan said the talks with US

Justice Department were overshadowing his eff orts

to restructure the bank as part of a far-reaching

cost-cutting programme.

The US Department of Justice is threatening to de-

mand $14bn from Deutsche to settle the mortgage

case.

Deutsche said group third-quarter revenue edged

up 2% to €7.5bn compared with €7.3bn a year

earlier, despite what Deutsche said was a tough

interest rate environment.

Trading revenue was also up 10% at €2.6bn, Deut-

sche said.

Thanks to its third-quarter performance the bank

was also able to boost its capital buff er with its key

core capital ratio, which rose to 11.1% in the three

ended September mber from 10.8% in the second

quarter.

Tesla Motors

Tesla Motors’ shares rose more than 5% in early

trading yesterday as investors welcomed the

electric car maker’s first quarterly profit in more

than three years and its reassurance that the Model

3 sedan would not need new capital.

Tesla boss Elon Musk said on Wednesday the

company’s current plan didn’t require new funding,

after going back and forth this month about need-

ing to raise money to fund the launch.

Tesla, whose shares have fallen nearly 16% this year,

said its profits were helped by nearly $139mn in

sales of clean car credits.

Tesla said it planned capital spending of $1.8bn for

the year — about a fifth lower than the automaker’s

previous forecast — with just over $1bn of the out-

lay coming in the fourth quarter.

Tesla said it had $3.08bn in cash and cash-equiva-

lents as of September 30, compared with $3.25bn at

the end of the second quarter.

Tesla ended the third quarter with positive free

cash flow (FCF) of $176mn, but is FCF negative for

the nine months ended September 30.

Tesla and SolarCity’s shareholders are expected to

make a final vote on the SolarCity deal on Novem-

ber 17.

Twitter

Twitter said yesterday it would cut 9% of its global

workforce to keep costs down even as quarterly

results eclipsed Wall Street’s beaten-down expecta-

tions, lifting shares that had fallen after a failed

eff ort to sell the company.

More than 300 Twitter employees will be aff ected

by the layoff s as part of a broader restructuring, a

figure similar to an earlier round of reductions an-

nounced a year ago.

Separately, the company announced it would

discontinue Vine, a video app launched in 2013 that

played brief clips on a repeat loop that struggled to

compete with Facebook’s Instagram.

The reductions of staff and services were blunted

somewhat by the backdrop of third-quarter rev-

enue growth that slowed sharply but topped

analysts’ expectations.

Revenue rose about 8% to $616mn, above the aver-

age analyst estimate of $605.8mn.

The company had reported a 20% rise in revenue

in the previous quarter and 58% in the year-ago

quarter.

Twitter, which has seen user growth stall amid com-

petition from nimbler rivals such as Instagram and

Snapchat, said its user base ticked up 3% to 317mn

average monthly active users in the quarter.

Total advertising revenue of $545mn grew 6% year-

over-year, and 90% of it came from mobile.

Excluding items, the company earned 13 cents per

share, beating the average estimate of 9 cents, ac-

cording to Thomson Reuters I/B/E/S.

Twitter had 3,860 employees globally as of June.

The cuts come about a year after a similar wave of

layoff s of up to 336 employees were announced

when Jack Dorsey, its co-founder who had been

serving as interim chief executive, took over as

permanent CEO.

Since then, Dorsey has drawn criticism from some

analysts for splitting his time between Twitter and

Square.

The company said it expected cash expenditures

of about $10mn to $20mn in the fourth quarter,

mostly for severance costs.

On an investor call yesterday, Dorsey said he would

not comment on speculation about a potential sale.

The company’s net loss narrowed to $102.9mn,

or 15 cents per share, in the third quarter, from

$131.7mn, or 20 cents per share, a year earlier.

Twitter also said it would roll out “meaningful

updates” next month aff ecting how it protects

users from abusive content, an issue for which the

company has endured growing criticism.

ZTE Corp

Chinese telecoms equipment group ZTE Corp,

which is still facing the threat of curbs on trade with

US firms, reported a 10.5% rise in its third-quarter

net profit yesterday.

Net profit for the three months to September 30

rose to 1.09bn yuan ($160mn), the firm said in a

statement.

Revenue rose 5.23% to 23.8bn yuan from the same

period last year.

ZTE is still facing the imposition of a trade ban on

US component makers and software firms supply-

ing ZTE, essentially cutting off much of the supply

chain for the network equipment and smartphones

ZTE makes.

The US Commerce Department ordered the trade

ban earlier this year over allegations that it violated

rules restricting the exports of US technolgy to

Iran, but then lifted the ban while it seeks to reach

a settlement.

Presenting a threat to ZTE’s global operations, as

well as its brand image, the export restrictions have

weighed heavily on ZTE’s share price this year, with

the shares down 35% in Hong Kong.

ZTE said in a separate filing to the stock exchange

yesterday that it will set up a 5bn yuan investment

fund with a unit of GF Securities that would focus

on ‘smart’ cities, underground pipe networks and

data centre projects related to its business.

Guangfa Hexin, an investment company controlled

by GF Securities, and ZTE subsidiary ZTE Xingyun

will be general partners of the new Guangxing

Yunhe Industrial Equity Investment Fund.

Fujitsu

Japan’s Fujitsu said yesterday it was in talks to

merge its struggling PC business with Chinese com-

puter giant Lenovo, sending its shares soaring as

the company also announced a recovery in profits.

The talks come as Japanese personal computer

makers work to scale back their businesses as

consumers shift to smartphones and tablets.

Tokyo-based Fujitsu said it and Lenovo, the world’s

largest PC maker, are “exploring a strategic co-

operation in the realm of research, development,

design and manufacturing of personal computers

for the global market”.

The two firms, which are yet to reach an agree-

ment, are also talking with government-backed

Development Bank of Japan for financial and

strategic support.

Fujitsu shares rose by 7.8% on news of the merger

negotiations to close at ¥599.3.

In a separate announcement, the company said its

net profit for the six months to September mber

came to ¥11.8bn ($113mn).

The recovery marks a reversal from a net loss of

¥15.9bn during the same period last year, thanks

to cost-cutting eff orts particularly in the PC and

mobile phone operations.

Operating profit stood at ¥25.9bn, up from an oper-

ating loss of ¥12.4bn the year before, while sales fell

7.0% to ¥2.08tn.

Fujitsu also slightly revised down its annual sales

forecast to ¥4.5tn, ¥100bn lower than an earlier

forecast due to revised exchange rate assumptions,

but kept annual net profit projection at ¥85bn.

Kenya Airways

Kenya Airways’ said its pretax loss narrowed

sharply in the six months through September as

it made an operating profit, raising hopes that

the struggling carrier may be beginning to turn a

corner.

The airline, 27%-owned by Air France KLM, has

been reducing the size of its fleet, selling non-core

assets like land and cutting jobs to try and turn

itself around after years of losses, due in part to

a slump in tourism to Kenya following attacks by

Somali Islamist militants.

Chief executive off icer Mbuvi Ngunze said yes-

terday that the carrier, which is also partly state

owned, made an operating profit of 0.9bn shillings

($8.9mn) for the six months ended in September,

compared with a loss of 2.2bn shillings in the same

period in 2015.

Finance Director Dick Murianki told an investor

briefing that total revenue fell to 54.748bn shillings

in April-September, from 56.72bn shillings a year

ago, but the pre-tax loss narrowed to 4.73bn shil-

lings from 11.86bn shillings.

The appointment of veteran telecoms executive

Michael Joseph as chairman last week has helped

lift sentiment at the airline.

Pilots had threatened to strike to demand manage-

ment changes, but called off the action when

Joseph’s appointment was announced.

Kenya Airways had released part of its earnings

results two weeks ago.

National Australia Bank

National Australia Bank (NAB) posted a small rise

in annual cash profit but warned its entire business

was under margin pressure, further heightening

expectations that it will have to cut its dividend

next year.

The bank, Australia’s fourth-largest by market

value, reported a 4% rise cash profit to A$6.48bn

($4.95bn) for the year ended September 30, in line

with expectations.

It, however, maintained its final dividend of A$0.99

despite market expectations of a 4% cut, in part

because NAB’s payout ratio has been consistently

above its target of 70 to 75%.

NAB’s net interest margin fell by 11 basis points to

1.82% compared with its level at March, primarily

due to a rise in funding costs.

While long seen the weakest of the Big Four, NAB

has under Thorburn withdrawn from underper-

forming businesses in Britain and United States.

It also sold 80% of its life insurance business to

Japan’s Nippon Life for A$2.4bn this month.

Thorburn said the bank would continue to reshape

its portfolio to improve returns.

NAB had not renewed A$5.8bn of corporate loans

over the last year and had rejected new corporate

lending business worth A$16bn because the returns

were too low.

Ford Motor Co

Ford Motor Co reported a more than 50% drop

in third-quarter net income yesterday, saying its

North American business suff ered from lower sales,

higher recall costs and a complicated introduction

of a new pickup truck.

The profit exceeded Wall Street expectations,

however.

The automaker said it still expected full-year

earnings of $10.2bn and a return to positive cash

flow after burning through $2bn in the third

quarter.

Net income dropped to $961mn, or 24 cents a share,

from $2.2bn, or 55 cents a share, a year earlier.

Excluding one-time items, Ford said earnings were

26 cents a share, beating the analysts’ average

estimate of 20 cents compiled by Thomson Reuters

I/B/E/S.

Third quarter revenue was $35.9bn, down 6%, and

North American operations revenue was $21.8bn,

down 8%.

Ford had signalled most of the major numbers at

a September mber investors presentation, and the

results released yesterday were little changed.

Ford’s pretax operating margins were down by

about half at 5.8% in North America and 3.3%

worldwide.

“What’s happening to the company is what’s hap-

pening in North America,” Chief Financial Off icer

Bob Shanks told reporters yesterday.

Shanks said three factors accounted for a $1.6bn de-

cline in Ford’s North American pretax profit: costs

of ramping up the new Super Duty pickup truck,

which has an average price of about $62,000; a

door-latch recall charge of $600mn recall; and

lower profits from the company’s F-150 pickup

truck.

Ford is cutting production of the F-150 in the fourth

quarter and, in a new action, will idle one shift for a

week at a plant in Kansas City, Missouri, to reduce

inventories of the truck, Shanks said.

The F-150 is Ford’s best-selling vehicle and one of its

most profitable models.

The company said pretax profit in Europe jumped

to $138mn from $9mn.

However, Shanks said the falling value of the British

pound would cost Ford $140mn in the second half

of 2015 and $600mn next year.

Ford is 80% hedged against the currency for 2017,

he said.

Income from Ford’s Chinese joint ventures rose

26% to $320mn.

BUSINESSFriday, October 28, 2016

GULF TIMES

Fiat said to mull Marelli options after Samsung talks break downBloombergMilan

Fiat Chrysler Automobiles is evaluating options for its car-parts unit Magneti

Marelli, including a Ferrari-style spinoff , after talks with Samsung Electronics Co over a partner-ship broke down amid the Korean company’s smartphone crisis, according to people familiar with the matter.

Fiat Chrysler and Samsung also remain far apart on their val-

uations of Marelli, prompting the carmaker to consider other op-tions for the division, the people said. An eventual separation of the business from Fiat Chrysler isn’t expected before the end of the group’s current business plan in 2018, they said. Fiat declined to comment, while Samsung said via e-mail that the company doesn’t comment on rumours or speculation.

Marelli may follow the same path of Ferrari, which was sepa-rated from Fiat at the beginning of the year after a 10% stake was

sold in an initial public off ering and listed on the New York Stock Exchange in 2015, the people said. Ferrari was valued at about €10bn ($10.9bn), including debt, in the IPO.

Marelli could be worth as much as €5bn after chief execu-tive offi cer Pietro Gorlier, an aide of Fiat CEO Sergio Marchionne, completes his turnaround plan for the company, one of the peo-ple said.

After calling off efforts to pursue a merger with General Motors Co, Marchionne has

made Fiat’s 2018 targets, which include more than doubling profit and eliminating debt, his highest priority before he leaves his post in 2019. He has said Fiat will be in a better position to discuss a deal to combine with another automaker after com-pleting his five-year strategy. A separation of Marelli could help to highlight the value of its businesses.

Fiat increased its 2016 profi t forecast on Tuesday for the sec-ond time this year, boosting the target after third-quarter earn-

ings jumped 29% on the Jeep brand’s global expansion. When asked on a conference call with analysts about the stalled talks with Samsung, Marchionne said no deal is expected by the end of 2016.

“There are a continuous number of approaches from a variety of sources that are poten-tially interested in combinations with some of our assets,” Mar-chionne said on the call. “Based on what I know today, there is nearly 100% certainty that no deal will happen in the fourth

quarter of this year.” Samsung was in advanced talks to buy some or all of Marelli, people familiar with the matter said in August.

The deal could have been worth more than $3bn with a goal of closing this year, one of the people said at the time. Fiat Chrysler chairman John Elkann confirmed in September that the carmaker was holding talks to strengthen Magneti Marelli with several potential partners, including Samsung. Its vice chairman Lee Jae-yong sits on

the board of the Agnelli fam-ily’s holding company Exor, the largest investor in Fiat Chrysler.

Lee offi cially joined a nine-person board at Samsung yes-terday as the Asia’s biggest tech-nology company reported a 17% slump in third-quarter profi t after the demise of its fi re-prone Galaxy Note 7 line threw the world’s largest smartphone mak-er into disarray. The move will give the low-profi le executive a big say over management and strategy, including restructuring, mergers and asset sales.

Qualcomm to acquire NXP Semiconductors for $47bnBloombergSan Francisco

Qualcomm, the largest maker of mobile phone chips, will acquire NXP

Semiconductors in a transaction valued at $47bn, aiming to speed an expansion into new indus-tries and reduce its dependence on the smartphone market.

San Diego-based Qualcomm agreed to pay $110 a share in cash for NXP, the biggest sup-plier of chips used in the auto-motive industry, or 11% more than Wednesday’s close, the companies said in a statement yesterday. The deal will be fund-ed with cash on hand as well as new debt.

Chief executive offi cer Steve Mollenkopf is betting the deal, the largest in the chip industry’s history, will accelerate his com-pany’s entry into the burgeoning market for electronics in cars. Eindhoven, Netherlands-based NXP is strong in that sector fol-lowing its acquisition last year of Freescale Semiconductor.

“It’s no secret that we’ve been looking around,” Mollenkopf said in an interview. ”If you look at our growth strategy it’s to grow into adjacent markets at the time that they are being disrupted by the technology of mobile.”

The purchase is Qualcomm’s response to slowing growth in demand for smartphones, which provide the bulk of the compa-ny’s revenue. The two compa-nies, which will have combined revenue of more than $30bn, will have products that are capable of winning sales in markets worth $138bn by 2020, Qualcomm predicted. Two years after the transaction closes, Qualcomm forecast $500mn of annual cost savings.

The equity value of the transaction is $38.5bn. Includ-ing debt, the enterprise value goes up to $47bn, according to chief financial officer George Davis. The acquisition will add $11bn of debt to Qualcomm’s balance sheet, which it will be able to rapidly improve by us-ing the overseas cash it gener-

ates to pay down, Davis said. Mollenkopf said he will aim to combine the two companies and their products as quickly as he can and make sure that the management of the combined company has representatives from both sides.

NXP stock rose 2.8% to $101.45 in early US trading. Qualcomm gained 2% to $69.60.

Last year was a record for chip-industry consolidation, with semiconductor makers get-ting together to weather rising costs and a shrinking list of cus-tomers. Though he sat out the deal spree in 2015, Mollenkopf is now making use of his com-pany’s more than $30bn in cash reserves, most of which is held overseas.

“There just isn’t enough mo-bile growth to be had — they are already the dominant chip

supplier and licenser of intel-lectual property in an industry where the product is being com-moditised and volume growth is moderating,” said Sid Parakh, a fund manager at Becker Capital Management, which owns Qual-comm stock. “As a long-term in-vestor, I would much rather have a more diverse company that has the potential to participate in new markets and probably grow signifi cantly more than it would in a mobile-only world.”

NXP is projected to report 2016 sales of $9.48bn, the aver-age of analysts’ estimates from data compiled by Bloomberg. By revenue, that makes it less than half the size of Qual-comm, which will report sales of $23.2bn this year, according to analysts. Still, the Dutch com-pany has averaged about 11% growth over the past three years,

while the US chipmaker’s sales declined 5% last year, a collapse from a revenue increase of 30% in 2013.

Like other chipmakers, Qual-comm is targeting what’s called the Internet of Things, the ad-dition of connections and com-puting power to everything from washing machines to trucks and industrial equipment. The com-pany has pitched prospective new customers with modifi ed mobile-phone chips that it says off er the easiest way to add elec-tronic capabilities to a broader range of devices. That push is in its early stages, with wins in areas such as automotive, where Qualcomm’s chips power en-tertainment devices and cell-phone connections to cars.

“Automotive and industrial are Internet of Things verticals that we see as more profi table

for semiconductors, and this is precisely the exposure that Qualcomm would gain with an NXP deal,” Cowen & Co analyst Timothy Arcuri wrote in a note. “Qualcomm could become the dominant player in connected industrial and automotive ap-plications.”

By buying NXP, which started off life as Koninklijke Philips’ chip unit, Qualcomm is tak-ing on the risk of merging with a company that’s in the process of integrating its own acquisi-tion of Freescale Semiconductor Ltd That $16bn transaction was completed in December. NXP owns factories and produces some of its own chips — some-thing Qualcomm has avoided by outsourcing its manufacturing — and has about 44,000 em-ployees, compared with about 33,000 for Qualcomm.

Trump’s broad businesses pose conflict tests, say specialistsBloombergNew York

The federal tax audit that emerged as an issue in

Donald Trump’s campaign would turn into another

problem altogether if the Republican nominee wins

the election – and gains the power to pick the next

Internal Revenue Service chief.

“He would be on both sides of the issue,” said

Sheldon Cohen, the IRS commissioner in President

Lyndon Johnson’s administration. “Of course,

you’ve got to be concerned about it.”

The potential conflict of interest with the IRS is one

example of the governance challenges posed by the

billionaire’s broad business interests. Trump trailed

Democrat Hillary Clinton by 9 percentage points in the

latest Bloomberg Politics national poll, and he’d need

a historic comeback to win. But should he pull it off , he

might face an even thornier challenge: convincing the

public he can make policy decisions without regard

for how they’d aff ect his fortune.

The nature of those interests – more than 500

partnerships and closely-held companies that own

and manage signature real-estate holdings and

license Trump’s brand – makes it diff icult for him to

separate himself from his businesses, according to

three business-ethics specialists. A President Trump

would face an unprecedented array of potential

conflicts – from federally regulated lenders that

have advanced him an estimated $630mn to for-

eign governments that have influence over his golf

resorts and other developments.

“In terms of conflict of interest, there’s really

nothing comparable,” said Kenneth Gross, who

leads the political law practice at Skadden Arps

Slate Meagher & Flom and is a former lawyer for the

Federal Election Commission.

Neither Trump’s campaign nor the Trump Or-

ganisation, which houses his business operations,

responded to e-mails seeking comment.

Clinton has faced her own conflict-of-interest

questions, focused mostly on the Clinton Founda-

tion, the $2bn charity that her husband, Bill Clinton,

founded. The Associated Press reported this year

that as secretary of state, Hillary Clinton met with at

least 85 people who had donated to the foundation

or pledged commitments to its programs.

The foundation announced in August that if Clin-

ton wins, it will stop taking money from any foreign

or corporate donors. Bill Clinton has said he’d resign

from the foundation’s board. September marked

the end of the Clinton Global Initiative, an annual

gathering of politicians, business leaders and others

to discuss solutions to global problems.

Richard Painter, a corporate law professor at the

University of Minnesota and a former White House

chief ethics off icer for President George H.W. Bush,

said that to avoid conflicts, the Clintons need to sever

their connections to the foundation. That includes

having daughter Chelsea Clinton, the charity’s vice-

chairman, step down from the board, he said.

A Clinton campaign spokesman referred a

reporter to the foundation’s previous statements

about the changes.

It’s not unusual for candidates with extensive

business interests to seek the White House, but

typically their holdings are better suited for man-

agement by an independent trustee. For instance,

Mitt Romney, a founder of private-equity firm Bain

Capital who was the 2012 Republican presidential

nominee, said that year that if elected, he’d put

his estimated $250mn portfolio into a blind trust

overseen by federal off icials.

Lyndon Johnson was the first president to place

his assets in a blind trust. His was set up by Cohen,

whom Johnson later named to head the IRS in

December 1964.

Trump has said he’d avoid conflicts by turning

over the management of his businesses to his chil-

dren, Ivanka, Donald Jr and Eric. “I would put it in

a blind trust,” he said during a Republican primary

debate in January. “Well, I don’t know if it’s a blind

trust if Ivanka, Don and Eric run it, but – is that a

blind trust?”

It’s not. Blind trusts are overseen by independ-

ent trustees, Gross said. Last month, the Trump

Organization announced a new brand for future

hotels and resorts: “Scion.” But even if Trump left

management and even with a new brand that’s not

his last name, he wouldn’t truly be separated from

his companies’ interests, Gross said. He’d still know

where his business interests are placed around the

world, including Turkey, South Korea, India, Azerbai-

jan and elsewhere.

Then there’s the IRS audit, which Trump’s tax

lawyers confirmed in a March letter. Trump has

cited the audit as his reason for not releasing any

tax returns – something major-party presidential

nominees have done for roughly 40 years. (There’s

no rule preventing people from releasing returns

even if they’re under audit. But tax specialists

advise against it, saying the public might find items

that auditors missed.)

IRS Commissioner John Koskinen told members

of Congress last month that he’d resign immedi-

ately if the next president asks him to, but his term

is up in November 2017 regardless. It’s impossible

to know whether the tax agency would still be

auditing Trump by then; only Trump himself could

release that information. IRS off icials are barred

from discussing individuals’ tax returns.

Questions would also remain about Trump’s

transactions with lenders that are subject to federal

regulation, said Painter, of the University of Min-

nesota. One such question: “whether he’s going

to kowtow to the banks, because the banks are

extending him credit,” Painter said.

On a May 2016 disclosure, Trump reported loans

from 16 lenders, including units of Bank of New York

Mellon Corp, Bank of America Corp and UBS Group

AG. Among his borrowings is a $170mn line of credit

from a unit of Deutsche Bank AG that funded reno-

vation work at the new Trump International Hotel

in Washington. Deutsche Bank is negotiating with

the US Justice Department to settle a mortgage-

securities investigation that may be resolved only

after the election. News organisations reported last

month that the government had asked for $14bn, a

figure the bank has said it won’t pay. As president,

Trump would nominate a new US attorney general

to oversee the Justice Department. Certain presi-

dential appointees, including cabinet heads, require

confirmation from the US Senate, which provides a

check on the White House’s authority.

But federal law provides only muted guidance

for presidents. While criminal conflict-of-interest

rules generally ban off icials’ using their positions to

further their personal interests, those rules exempt

the president and vice president. (White House

leaders “should conduct themselves as if they were

so bound” by the rules, according to a 1983 Off ice

of Government Ethics letter.) The president is also

exempt from rules governing how members of

Congress and other off icials interact with lobbyists,

trade groups and other interests.

“He’s off the hook when it comes to the require-

ments that regulate Congress - it gives him a very

wide berth,” Gross said.

The US Constitution prohibits off iceholders from

receiving compensation from a foreign government

or related entity. But Gross said that wouldn’t apply

to, say, Trump urging off icial visitors to stay at his

new hotel on Pennsylvania Avenue, five blocks from

the White House.

In the absence of legal restrictions, it would be

up to a President Trump to ensure his decisions

weren’t aff ected by his businesses’ aims – or face

political backlash.

“All you really have is the power of public opin-

ion, and maybe the power of a Congress alarmed by

actions by a president that fit his or her economic

interests,” said Norman Ornstein, a scholar and

political expert at the American Enterprise Institute,

a conservative policy group in Washington.

The Qalcomm headquarters in San Diego, California. Qualcomm has agreed to pay $110 a share in cash for NXP, the biggest supplier of chips used in the automotive industry, the companies said in a statement yesterday.

Orders for US capital goods drop by most since FebruaryBloombergWashington

Orders for US business equipment fell in Sep-tember by the most in

seven months, indicating cor-porate investment is having trouble gaining traction.

Bookings for non-military capital goods excluding air-craft declined 1.2%, erasing a 1.2% August advance that was stronger than previously report-ed, Commerce Department data showed yesterday. The median forecast of economists surveyed by Bloomberg called for a 0.1% drop. Demand for all durable goods – items meant to last at least three years – eased 0.1%.

Business investment re-mained slow in the third quar-ter as moderating demand and weakness overseas prompted companies to hold back. Even with stability in the oil sector, an inventory correction and growth in consumer spending, manufacturing will probably see little more than a gradual improvement.

“Business investment is go-ing to be weak,” Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania, said before the report. “The global economy remains fairly soft. That’s going to continue to weigh on manu-facturers.”

Orders declined for fab-ricated and primary metals, computers and electronics, and communications equipment.

The drop in bookings for all durable goods last month fol-lowed a 0.3% August advance that was better than previously reported.

Orders for non-defence capital goods excluding aircraft are a proxy for future business investment in items like com-puters, engines and communi-cations gear. Even with the de-cline, bookings over the three months ended in September

rose at a 5.2% annualised pace, indicating the worst of the in-vestment slump is over.

Nonetheless, shipments of those goods, which are used in calculating gross domes-tic product, fell an annualised 4.4% in the three months end-ed in September. They were up 0.3% from a month earlier after little change in August.

Today, the Commerce De-partment will issue its fi rst es-timate of third-quarter GDP.

The durables report also showed bookings for non-mil-itary aircraft rose 12.5% follow-ing a 24.2% decrease.

Boeing Co, the Chicago-based aerospace company, said it received 55 orders for aircraft in September, up from 22 in Au-gust. Deliveries for the month rose to 72 from 59.

Durable goods orders ex-cluding transportation equip-ment, which are often volatile from month to month, climbed 0.2% after a 0.1% gain.

Bookings for military capital equipment decreased 7.7%, and demand for non-defence dura-ble goods rose 0.7%.

Durable goods inventories crept up 0.1% for a second month, while unfi lled orders for non-defence capital goods excluding aircraft rose 0.2%.

Jobless claims fall for fi rst time in 3 weeks

Filings for US jobless ben-

efits fell for the first time in

three weeks, staying near a

four-decade low as employers

remain unwilling to part with

workers.

Jobless claims declined by

3,000 to 258,000 in the week

ended October 22, a Labour

Department report showed

yesterday in Washington. The

median forecast in a Bloomberg

survey called for 256,000. Con-

tinuing claims dropped to the

lowest level since June 2000.