Thursday, July 14, 2016Shawwal 9, 1437 AH

BUSINESSGULF TIMES

Gulf stocks benefi t from EM infl ows

QATAR UP 1.7% | Page 2

China exportsand importsfall in June

OUTLOOK DIM| Page 4

AccorHotels, QIA and Kingdom Holding for long-term partnership

MEETING APPROVES FRHI ACQUISITION: Page 16

Nakilat H1 net profit up 2% to QR501mnNakilat, the shipping arm of Qatar’s liquefied natural gas (LNG) sector, has posted a first half net profit of QR501mn, up 2% on QR491mn registered in the same period last year.Nakilat said the increase in the company’s profits “reflects the strong growth of Nakilat’s operating activities in transporting liquefied natural gas (LNG), and better performance of its liquefied petroleum gas (LPG) vessels.”Nakilat managing director Abdullah Fadhalah al-Sulaiti said: “Nakilat’s half-year financial results are a clear indicator of the strength and stability of the company’s financial position, which has been achieved through sound growth and developmental strategies over the years. We are also continually assessing current investments in relation to profitability in order to address any risk involved for the company and its shareholders.” Al-Sulaiti added, “Our LNG joint venture operations continue to underpin Nakilat’s financial results, enabling us to value-add to our shareholders.”

Nakilat is a Qatari LNG transport company providing an essential transportation link in the State of Qatar’s LNG supply chain. Its LNG shipping fleet is the largest in the world, comprising of some 63 LNG vessels. Nakilat also owns and manages four large LPG carriers. Nakilat operates the ship repair and construction facilities at Erhama Bin Jaber Al Jalahma Shipyard in Ras Laff an Industrial City via two strategic joint ventures: N-KOM and NDSQ. Nakilat also off ers a full range of marine support services to vessels operating in Qatari waters.

Machinery & Equipment Price Index of Qatardrops 0.78% in first halfQatar’s Machinery & Equipment Price Index (MEPI) reached 101.4 points in the first half of this year, which shows a decline of 0.78% compared to 2015, the Ministry of Development Planning & Statistics (MDPS) has said.The Machinery and Equipment Price Index (MEPI) provides half yearly estimates of price changes for machinery and equipment purchased by industries in Qatar. A comparison of MEPI in H1, 2016 with that of H2, 2015 shows a decline in all the

groups. Special-purpose machines group declined by 1.16%, because of the price decrease in the “underground rock cutters and tunnelling machinery”, while off ice, accounting and computing machinery group dropped by 0.88%, transport equipment group by 0.77% (due to a price drop in motor vehicles and trailer vehicles). Slight decline was also seen in the index pertaining “machinery and electrical appliances” group (by 0.19%).

Ooredoo and Cisco have recently formed a strategic partnership, continuing to work together to build a diverse portfolio of strategic solutions for businesses in Qatar, the telecommunications company has announced.As a sign of the strengthening partnership, Cisco recently awarded Ooredoo with a highly-regarded service provider’s certification. The Cloud and Managed Services Certification (CMSP) confirms Ooredoo’s ability to off er Cisco-powered solutions of the highest standards to business customers across Qatar, Ooredoo said. Following the award, Sheikh Nasser bin Hamad bin Nasser al-Thani, Ooredoo’s chief new business off icer; and Mohamed Hammoudi, Qatar general manager, Cisco; met in Qatar for a strategic planning discussion. The meeting outlined plans for a calendar of upcoming events and agreed on a template to support the launch of new technologies, including an ambitious push to build Ooredoo’s position as an enabler of “smart city” technologies in Qatar. Over the first six months of 2016, Ooredoo and Cisco have announced a range of long-term strategic agreements, including the launch of Cisco’s Virtual Managed Services (VMS) suite, and a service that enables Ooredoo’s enterprise customers to lease Cisco technology from Ooredoo, providing them with easy access to cutting-edge technology.The companies have also co-hosted

several networking events for businesses, demonstrating the enhanced range of cloud solutions and services available for companies in Qatar, as well as dedicated seminars for small businesses on the best way to enhance their performance by

deploying best-in-class solutions.For full details of the solutions available with Ooredoo, businesses customers can arrange a meeting with their account manager or call the business team on 800 8000.

Ooredoo, Cisco build on strategic partnership

Cisco’s Mohamed Hammoudi (left) and Ooredoo’s Sheikh Nasser bin Hamad bin Nasser al-Thani during the strategic planning discussion held in Qatar.

Al-Sulaiti: Strength and stability.

IEA sees oil stabilising on higher ’16 demandAFPParis

Higher-than-forecast de-mand should bolster oil prices throughout 2016,

despite high stocks continuing to exert downward pressure on prices, the IEA said yesterday.

Global demand for oil will grow by 1.4mn barrels per day (bpd) this year to 96.1mn bpd, the In-ternational Energy Agency (IEA) said in its monthly oil market report, revising up last month’s forecasts of a 1.3mn bpd rise.

While predicting a “return to balance” in overall “big picture” market direction, the IEA said “the existence of very high oil stocks is a threat to the recent stability of oil prices.”

Last month the agency had warned signifi cant price rises were unlikely given that “there is an enormous inventory over-hang to clear.”

The IEA noted crude prices had edged off an early June peak above $52 per barrel to trade in a $45-$50 range — a stark contrast to the nearly daily price falls ear-lier this year.

“Our underlying message that the market is heading to balance remains on track, but the modest fall back in oil prices in recent days to closer to $45/bbl is a reminder that the road ahead is far from smooth,” the IEA concluded.

“The adjustments to our data this month suggest that little has changed with the market show-ing an extraordinary transfor-mation from a major surplus in 1Q16 to near-balance in 2Q16,” the report added.

Oil prices, which slumped be-low the $30 mark in January, re-bounded earlier this week from two-month lows as an Opec forecast pointed to an easing of global oversupply.

US benchmark West Texas

Intermediate for August deliv-ery on Tuesday jumped $2.04 to $46.80 a barrel on the New York Mercantile Exchange, while in London, Brent North Sea crude for delivery in September added $2.22 to $48.47.

In its own July report, Opec had forecast the global supply glut would ease this year and next, as producers outside the group, particularly the United States, cut production.

The 14-member organisa-tion, which provides about one-third of the world’s crude,

has squeezed competitors in re-cent months by keeping the taps open, saying June production rose by 264,000 bpd to an aver-age 32.9mn barrels bpd.

Opec predicted global de-mand growth would pick up in 2017 to allow the market to re-move excess stocks.

For 2017, the IEA forecast a 1.3mn bpd increase to 97.4mn bpd, largely thanks to demand in non-OECD countries, led by India and China.

Demand in India was forecast to rise faster than anywhere in

2017, by 280,000 bpd, whereas “the main restraint on recent Chinese demand data contin-ues to be the weakening of the domestic economy, with offi cial estimates of economic growth easing.”

The IEA saw Europe as hav-ing been the “saving grace for oil demand,” with growth reaching a fi ve-quarter high in the second quarter of this year.

But it added this was “unlikely to last,” given economic “pre-cariousness” after Britain’s vote to leave the European Union, a

result which “added to the un-certainty.”

Overall, the IEA indicated there remained “an ominous investment gap building up in the oil industry that might, de-pending on how quickly today’s record high oil stocks are eroded, create the conditions for sharply higher prices over the medium term.”

The agency also highlighted its fi nding that the Middle East’s market share of global oil sup-plies had risen to 35% the high-est since the late 1970s.

An oil rig extracts crude in Taft, California. Higher-than-forecast demand should bolster oil prices throughout 2016, despite high stocks continuing to exert downward pressure on prices, the IEA says.

QEWC H1 profit up 7% to QR791mnQatar Electricity & Water Com-

pany (QEWC) has announced

a net profit of QR791mn for the

first six months of 2016, up 7%

on QR737mn it recorded for the

same period last year.

This was discussed during

a board meeting chaired by

vice-chairman Issa bin Shahin

al-Ghanim at the QEWC head

off ice in Doha on July 13.

Earnings per share (EPS)

amounted to QR7.19 for the pe-

riod ended June 30 compared

to QR6.70 for the same period

last year.

The first half year of 2016,

according to QEWC, wit-

nessed a 7% increase in sales

or QR1.517bn compared to

QR1.420bn in 2015, and a 10%

increase in gross profit or

QR701mn over QR637mn in

2015.

The board discussed develop-

ments in the company’s various

projects, which are under

construction and under review.

It also discussed international

projects, which are handled

directly by Nebras Power.

Libya working to reopen oil portsBloombergCairo

Libya’s government of na-tional unity is working to reopen four of the Opec

country’s biggest oil ports after securing a deal to help unify the fractured nation’s state energy company.

Four ports accounting for about 860,000 barrels a day in crude-exporting capacity have been shut due to political turmoil and fi ghting. A July 2 deal to unify rival administra-tions of the National Oil Corp was meant to end the confl ict over who can control oil sales in Libya, where factions are working to set up a Govern-ment of National Accord to help rebuild the country after fi ve years of strife.

The presidential council in Tripoli started a meeting yes-terday to discuss several issues including the lifting of force majeure that is blocking the reopening of the oil ports, Musa al-Koni, vice-president of the council, said by phone.

Force majeure, a legal status protecting a party from liabil-ity if it can’t fulfi l a contract for reasons beyond its control, was imposed after the ports came under attack.

“The unity government is currently working on solving issues to reopen the strategic oil ports,” Mohamed Elharari, an NOC spokesman, said in a telephone interview from Tripoli.

“There’s no timeline yet for lifting force majeure for oil ports. It’s not known to us yet, but we hope this happens soon.”

Libya, with Africa’s largest proven crude reserves, split into separately governed re-gions in 2014, leading to the es-tablishment of competing NOC administrations. The Govern-ment of National Accord, based in Tripoli, is trying to extend its authority over the rest of the country. Since the ouster fi ve years ago of long-time ruler Muammar Gaddafi , Libya’s oil facilities and ports have been attacked and its crude output has slumped.

BUSINESS

Gulf Times Thursday, July 14, 20162

Kuwait may coordinate with Saudi on $20bn bond clashBloombergDubai

Kuwait is open to liaising with neighbour-

ing Saudi Arabia on its planned debt sale

as the two Opec nations prepare to test in-

vestor appetite for about $20bn of bonds.

“If it’s required and if our advisers think

we should coordinate in terms of timing

we would do that,” Kuwaiti Finance Minis-

ter Anas al-Saleh said in a phone interview

on Monday, referring to the country’s plan

to raise as much as $9.9bn in September.

“We have very strong ties.”

The plunge in crude is driving bond

sales across the six-nation Gulf block as

governments seek to plug budget deficits

that the International Monetary Fund says

could reach $900bn by 2021. After Qatar

raised a record $9bn in May and Abu

Dhabi $5bn in April, Saudi Arabia and Ku-

wait are the next to test investor appetite

for Middle Eastern debt after the summer,

with Saudi Arabia said to be also seeking

at least $10bn.

“They are competing with each other

and even if there is some coordination,

at the end of the day each government is

trying to raise as much money as possible

while interest rates are low,” said Talal

Touqan, head of research at Abu Dhabi-

based al-Ramz Capital, a brokerage and

investment bank. The surge in issuance

comes as “the whole world is suff ering

from liquidity constraints.”

Kuwait is aiming to start the interna-

tional bond sales in September and has

still to hire banks to manage the off ering,

al-Saleh said. Saudi Arabia has appointed

JPMorgan Chase & Co, HSBC Holdings

and Citigroup to arrange its first interna-

tional bond sale, people with knowledge

of the matter said last month, with the

timing of the sale likely after the summer,

they said.

Only half way into this year and Gulf

issuers have already raised $36.25bn in

conventional and Islamic bonds. That

compares with about $26bn raised in all

of 2015 and the $33.5bn sold in 2014, data

compiled by Bloomberg shows.

The Kuwait minister said in May that

the country had hired consulting firm

Oliver Wyman & Co to set up a debt

management off ice. A special committee

with off icials from the finance ministry,

sovereign wealth fund and central bank

will decide on whether to off er Islamic or

conventional debt and whether to sell the

debt in tranches. Kuwait is also planning

to sell as much as 2bn dinars ($6.6bn)

domestically.

“There is a huge appetite from inves-

tors” for regional debt, the Kuwaiti finance

minister said. “We have good ratings,

good reserves and good economic reform

plans.”

Low oil prices — which halved from

around $100 per barrel in 2014 — have

pummelled the finances of oil-rich nations,

prompting reform programmes intended

to save cash and restructure the economy.

Al-Saleh is seeking to cut wasteful spend-

ing, reducing utility subsidies, introducing

corporate taxes and increasing fees, in

common with a similar reform pro-

gramme in Saudi Arabia.

The Dubai’s bourse gained 1.4%, as investors built up positions in banking stocks.

Gulf stocks benefi t from EM infl ows ahead of global stimulus movesReutersDubai

Gulf stock indexes ben-efi ted from fund infl ows into emerging markets

yesterday, with all advancing for a second day, as central banks in major global markets signalled the prospect of further economic stimulus.

The Bank of England is due to have its fi rst post-Brexit policy meeting today, where analysts are expecting the central bank to cut UK interest rates to calm markets.

In Japan, there are also expecta-tions of further economic stimu-lus this month.

“The lower-for-longer interest rate environment and the posi-tive knock-on eff ect on emerging markets is clearly seen through the sizeable foreign infl ows that regional equities are currently en-joying,” said Mohamed El Jamal, managing director of capital mar-kets at Abu Dhabi’s Waha Capital.

The fi rst slew of second quarter earnings also lifted Gulf investor confi dence, bucking expectations of corporate weakness this period because of low oil prices.

“While still early days, sec-ond-quarter earning season has kicked off , and we so far had earn-ings come out from Saudi, Qatar and Oman, most of which came slightly ahead of market expecta-

tions and have been supportive,” El Jamal said.

Saudi Arabia’s index rose 1%, recording a fourth day of gains since it resumed trading after the Eid al-Fitr holiday.

The benchmark’s advance was supported by Banque Saudi Fran-si, which rose 3.4%.

The lender, part-owned by Credit Agricole, announced an estimate-beating 3.2% jump in quarterly profi t and plans for a higher fi rst-half dividend than it paid in the same period last year.

Qatar recorded the highest gains, where the index advanced 1.7% as positive sentiment carried on from Qatar National Bank’s bumper profi t growth on Tuesday.

Shares in the largest bank in the Middle East and Africa by assets rose 1.8% a day after it posted a 16% jump in second-quarter net profi t, supported by the inclusion of Turkey’s Finansbank in its ac-counts for the fi rst time.

In the United Arab Emirates, Dubai’s bourse gained 1.4%, as in-vestors built up positions in bank-ing stocks.

Dubai Islamic Bank jumped 3.4%, while Emirates NBD gained 1.8%.

Abu Dhabi’s index rose 0.7%, lifted by telecommunications fi rm Etisalat whose shares rose 3.7%.

Etisalat, which directly and indirectly operates in about 18 countries across the Middle East,

Africa and Asia, was among the main benefi ciaries of MSCI Index fl ows, El Jamal said.

Oman’s index was driven by Bank Muscat, with both climbing 1.1%.

The marginal increase in quar-terly profi t, which beat the fore-cast of analysts, lifted other bank-ing stocks in the sultanate.

Egypt’s index advanced 1.4%.Global Telecom Holding, for-

merly Orascom Telecom, gained 1.1%, its eighth straight sessions of gains to hit a 16-month high.

Elsewhere in the Gulf, the Oman index gained 1.1% to 5,915 points, the Kuwait index advanced 0.2% to 5,386 points and the Bah-rain index moved up 0.7% to 1,174 points.

Egypt almost ready with ‘fresh story’ to lure bond buyersBloombergCairo

Vital economic reforms designed to draw billions of dollars from international bond markets could be approved by the end of the month, a senior Egyptian government off icial said on Tuesday.Samy Khallaf, head of public debt in Egypt’s Finance Ministry, said he expects parliament will pass a package introducing value-added tax and public-sector payroll cuts within weeks because it’s been endorsed by officials at the “highest level.”“We have to come to the market with a fresh story,” Khallaf said in an interview. “Once we deliver on the economic reforms we

promised, we expect to see some serious interest from investors.”Mohamed Fouad, a lawmaker from Cairo’s twin city of Giza, said additional sessions of parliament would have to be scheduled if the measures were to be discussed and approved in July. No such session has been called, he said.Africa’s second-biggest economy plans to tap international markets for $3bn to $5bn in the fiscal year that started this month, with the the first tranche expected between September and March, Khallaf said.Egypt is scrambling to increase its foreign currency resources to ease a shortage that has stifled economic activity and fuelled speculation of an imminent devaluation of the pound. Central Bank Governor Tarek Amer said last week that the regulator’s

policy of defending the local currency was a “grave mistake,” and that a weaker pound would benefit the nation’s ailing exporters. The stock market soared and traders in the black market for dollars pushed the premium for the US currency to a record 30% over the off icial exchange rate.Off icials have postponed selling bonds since last September as the country’s borrowing costs soared. Khallaf said he’s looking for yields to decline to about the level of Egypt’s most recent sale that took place in June 2015, when it raised $1.5bn of 10-year debt at 5.875%. Those bonds yielded 7.12% as of 3:53pm in Cairo.The cost of protecting Egyptian debt against default for five years has surged 170 basis points over the past year to 501, according to data provider CMA. That’s

among the 10 most expensive in the world.“Pricing is the most important factor for us,” Khallaf said.“Our strategy is to frequently tap the international capital markets and are keen on ensuring successful demand by international institutional investors.”Egypt, which only has three outstanding international bonds totalling $3bn, is struggling to dig itself out of political and economic turmoil that followed President Hosni Mubarak’s ouster in 2011. The toppling of his religious successor and repeated militant attacks only deepened the instability, battering investment and tourism. Foreign reserves remain more than 50% below December 2010 levels, and aid from Gulf Arab countries has dwindled amid the drop in oil prices.

Bank Muscat Q2 net profi t edges higher, lifts sectorReutersDubai

Oman’s largest lender Bank Muscat posted a slight increase in

second-quarter net profi t yesterday, helped by a rise in net interest income and increased recovery of bad debts, sending its shares up and lifting banking sector stocks.

The bank made a profi t of 46.7mn rials ($121.3mn) in the three-month period ending June 30, up from 46.5mn rials a year earlier, and just ahead of the aver-age estimates of four ana-lysts polled by Reuters, who forecast a quarterly profi t of 43.3mn rials.

Bank Muscat did not dis-close a quarterly breakdown of its earnings so Reuters calculated the fi gures based on previous fi nancial state-ments.

With smaller government reserves than many of its neighbours, Oman has been more vulnerable to the two-year slump in oil prices.

Omani banks have suf-fered in the form of rising cost of funding as the gov-

ernment has been less able to provide liquidity due to reduced oil profi ts.

During the second quar-ter, Bank Muscat’s expenses rose by 1.2% against the same period of last year.

However net interest in-come, profi ts from lend-ing, rose by 6.6% to 62.3mn rials.

This helped alleviate a 12.1% drop over the same period in non-interest in-come, including income from fees and commission, to 34.6mn rials, Reuters cal-culations showed.

In another refl ection of the challenging economic environment, the bank’s provisions edged up by 6.8% from the same period last year, although its recoveries of bad debts edged up 10.6% to curtail the impact.

Bank Muscat’s encourag-ing results sent its shares up as much as 2% although they ended yesterday trade 1.1% higher.

Shares in other Omani banks performed strong-ly with Bank Dhofar and National Bank of Oman, number two and three by as-sets, rising 3.9% and 1.6% respectively.

Kuwait sees oil at $60 until 2018 with demand picking up

BloombergDubai

Crude oil will rise to a range of $50 to $60 a barrel until at least 2018 as demand increases and markets absorb an oversupply that’s led to lower prices over the last two years, according to the acting oil minister of Opec member Kuwait.The Organisation of Petroleum Exporting Countries should stick with its policy of pumping at near record levels as markets are coming into balance, Anas al-Salehsaid in a telephone interview from Kuwait City. Demand will pick up by the fourth quarter, he said.

Oil prices have tumbled by about 40% since Opec shifted its strategy in November 2014 to prioritize sales over prices to drive higher-cost producers, including some from US shale wells, off the market. Many producers, including Kuwait, face budget deficits as a result and are cutting spending. Supply disruptions from Opec members Nigeria and Libya have contributed to a partial recovery to a “satisfactory” price of about $50 a barrel, al-Saleh said.“The strategy Opec implemented in 2014 until now is a successful strategy — it’s been working well and supportive to the balancing of the oil market,” he said.

BUSINESS

Gulf Times Thursday, July 14, 20164

China exports, importsfall; trade outlook dimReutersBeijing

China’s exports fell more than ex-pected in June as global demand remained stubbornly weak and

as Britain’s decision to leave the Euro-pean Union clouds the outlook for one of Beijing’s biggest markets.

Imports also shrank more than fore-cast, suggesting the impact of a fl urry of measures to stimulate growth in the world’s second-largest economy may be fading, after encouraging readings in May.

“The uncertainty of Brexit is likely to weigh on demand for China’s exports to the EU, similar to the situation when the European debt crisis in 2011-12 in-tensifi ed,” ANZ economists Raymond Yeung and Louis Lam wrote in a note.

“Clearly, China’s external outlook will still face tremendous challenges.”

Exports fell 4.8% in June from a year earlier and were down 7.7% in the fi rst half of 2016, the General Administra-tion of Customs said yesterday, adding that China’s economy faces increasing downward pressure and the trade situ-ation will be severe this year.

Imports dropped 8.4% from a year earlier.

That resulted in a trade surplus of $48.11bn in June, versus forecasts of $46.64bn and May’s $49.98bn.

Economists polled by Reuters had expected June exports to fall 4.1%, matching May’s decline, and expected imports to fall 5%, following May’s 0.4% dip. The import decline in May was the smallest since late 2014, raising hopes that China’s domestic demand was picking up.

However, China’s imports of iron ore, crude oil, copper and soybeans all eased in June from the preceding month.

“The world economy still faces many uncertainties.

For example, Brexit, expectations of an interest rate hike by the Federal Re-serve, volatile international fi nancial

markets, the geopolitical situation, the threat of terrorism... these will aff ect the confi dence of consumers and in-vestors globally and curb international trade,” customs spokesman Huang Songping told a news conference.

“We believe China’s trade situation remains grim and complex this year.

The downward pressure is still rela-tively big.”

June industrial output, investment and retail sales will be released tomor-row, along with second-quarter gross domestic product, which is expected to

show a slight loss of momentum from earlier in the year.

Exports to the United States – Chi-na’s top export market – fell 10.4% in June on-year, while shipments to the European Union – its second biggest market – fell 3.6%.

Still, China’s steel exports were the second-highest on record, pointing to sluggish demand at home but also likely to signal even greater tensions with its major trading partners.

European Commission President Jean-Claude Juncker told his Chinese

counterparts in Bejing yesterday that overcapacity in the steel sector is a very serious problem.

Fresh weakness in the yuan currency appears to have done little so far to help China’s struggling exporters.

The yuan fell about 3% versus the dollar and nearly 6% against a broader basket in the second quarter, though Chinese offi cials have said repeatedly they will not purposely devalue the currency to boost exports.

Analysts at ANZ said currency de-preciation impacted the headline

growth numbers. Exports in yuan terms rose 1.3%.

The data also showed fi rst-half im-ports from Hong Kong surged 130%.

Analysts say large jumps in such im-ports in the past have been a channel for capital outfl ows through fake in-voicing as companies worry about the yuan weakening.

But spokesman Huang said that the increase in imports from Hong Kong was mainly driven by gold, noting that imports actually fell 2% after stripping out gold imports.

EU to use ‘all defences’ against Beijing steel exports: JunckerAFPBeijing

EU Commission head Jean-Claude Juncker

said yesterday that the bloc would use

all possible means to protect itself from a

flood of Chinese steel imports blamed for

turmoil in global markets.

China, which makes more than half the

world’s steel, is widely accused in Europe

of dumping its production on world mar-

kets and violating trade agreements at the

expense of local jobs.

“The EU will defend its steel industry.

We are not defenceless, and we will use

all the means at our disposal,” Juncker told

reporters in Beijing.

He said there was a “clear link” between

China cutting steel overcapacity and the

EU granting it “market economy status” – a

prize eagerly sought by Beijing.

China has been pressing the EU to grant

it the status – which would make it harder

for the bloc to levy anti-dumping tariff s –

before the year’s end, citing World Trade

Organisation rules.

Juncker said that the EU had “not made

up its mind” on the matter, but would do so

following an “impact assessment”.

Chinese steel exports to the EU rose

28% in the first quarter of this year, while

prices dropped by more than 30%, he cited

off icial statistics as saying.

The Commission chief spoke after an

annual EU-China business summit, where

he hailed a “new era of bilateral relations”,

but added it “must take into account the

importance of steel around the world”.

The EU, the second-biggest steel

producer, has launched a dumping probe

into Chinese steel. But angry manufactur-

ers urge it to copy the US in introducing

tough tariff s.

China’s ministry of commerce said

yesterday it would fight Washington’s steel

tariff s through the World Trade Organisa-

tion’s dispute settlement process, the

off icial Xinhua news agency reported.

Beijing says reducing overcapacity

and cutting state-subsidies to the steel

sector are top priorities in its economic

reform drive. But foreign governments say

they have seen little movement towards

implementation.

Chinese Premier Li Keqiang defended

his government to the summit, saying that

overcapacity and falling commodity prices

were not “triggered by any one country”.

“This requires us to all help each other,”

he added. European Trade Commissioner

Cecilia Malmstrom said there was “urgent

pressure” for China to curb its excess capac-

ity at the annual meeting.

She called for non-viable companies to

exit the market through bankruptcies, and

the elimination of state subsidies. “The over-

capacity issue, particularly in the steel sec-

tor, needlessly pits workers in China and the

European Union against each other,” she

said.”The ultimate solution can only come

from a more market-based approach.”

ReutersTokyo

Private-sector members of the Japanese government’s top advisory council said

a fi scal discipline target for 2018 should not lead to excessive spending cuts as they opened the door to new debt issuance to fund stimulus. The proposal comes after Prime Minister Shinzo Abe laid out plans for “bold” spend-ing on infrastructure this fi scal year, raising concerns the public debt burden would worsen as the government shifts its focus to ex-pansionary fi scal policy.

“Hitting the government’s (fi s-cal discipline) goals is extremely diffi cult,” said Shuji Tonouchi, senior market economist at Mit-subishi UFJ Morgan Stanley Se-curities. “The upcoming supple-mentary budget and economic stimulus are expected to be quite large. It might temporarily push up growth, but (the economy) might run out of breath in fi s-cal year 2017.” The private-sector members of the Council on Eco-nomic and Fiscal Policy, which met earlier yesterday, are academ-ics and business leaders who are considered close to Abe.

Their proposals often form the kernel of policy that Abe’s gov-ernment eventually adopts. At the meeting, the private-sector members also called for more spending on childcare, care for the elderly and structural reforms to accelerate growth. Abe’s govern-ment has set two important fi scal discipline targets; the fi rst is to lower the primary budget defi cit to 1% of gross domestic product in fi scal 2018, and the second is re-turning to a primary budget sur-plus in fi scal 2020.

Japan govt advisers shun fi scal discipline, open door to new debt

Cargo containers wait to be transported at a port in Lianyungang, Jiangsu province. China’s imports fell 2.3% year-on-year in yuan terms in June, off icial data showed.

China’s Q2 growth slows to 6.6%AFPShanghai

China’s growth slipped to a new seven-year low of

6.6% in the second quarter, according to an AFP

survey, despite government eff orts to spur activity

in the world’s second-largest economy.

The forecast for expansion in gross domestic

product (GDP), based on a poll of 17 economists,

represents an easing from 6.7% in the first three

months of the year.

As the world’s biggest trader in goods China is

crucial to the global economy and its performance

aff ects partners from Australia to Zambia.

Investors worldwide have been worried by its

slowing growth.

“Momentum remains downward, so if the gov-

ernment would like to maintain a 6.5% minimum

growth rate in the next several years, more aggres-

sive stimulus will be needed,” Brian Jackson, Beijing-

based economist at IHS Economics, told AFP.

The slowdown comes as policymakers seek to

retool the economy, embracing weaker growth as a

trade-off for structural reforms to wean the country

off cheap exports and massive government spend-

ing in favour of domestic consumption.

GDP expanded 6.9% in 2015 – its weakest in a

quarter of a century – and the government has

targeted growth in a range of 6.5%-7% for this year.

The AFP poll forecasts China will just meet the

goal, predicting 6.6%.

Off icial Chinese figures are viewed with wide-

spread scepticism, and just days ago the govern-

ment altered its growth calculation method for the

second time in less than a year.

“China’s quarterly GDP releases are being greeted

with increasing scepticism and for good reason,”

Capital Economics said in a recent research report.

“The speed of growth that it points to is increas-

ingly hard to believe given the clear structural drags

that the economy is facing.”

Still, most wave off fears of a “hard landing” for

China. “We expect data for the second quarter

of 2016 to further reinforce our view that China

has not collapsed,” PNC Financial Services Group

senior international economist Bill Adams said in

a research note, though he added the country still

faces “daunting challenges”.

Lower commodity prices, a decline in private

spending and weak exports all dragged on the

economy in the April-June period, analysts said.

Adding to the uncertainty, recent flooding in

China could cut into industrial production although

at the same time give the government the opportu-

nity to build infrastructure for water control, which

could be positive for longer-term growth.

“Infrastructure will likely remain a key sector that

policy makers rely on to stabilise growth,” Rong

Jing, an economist at BNP Paribas in Beijing, told

AFP. Britain’s decision to exit the European Union,

could actually benefit China, some analysts argue.

“If ‘Brexit’ results in slower growth in the UK and

anxiety in the developed West and in emerging Eu-

rope, the Chinese share of global growth could rise

even higher,” Andy Rothman, investment strategist

at Matthews Asia, said in a research note.

In order to maintain expansion, the central bank

must maintain its loose monetary policy, possibly

by again cutting the proportion of funds banks

must set aside as reserves as well as interest rates

— which it has already lowered six times since late

2014.

An annual summer gathering of Chinese leaders

at the beach resort of Beidaihe could yield other

economic policies after the State Council, or cabi-

net, called for support to boost private investment,

analysts said.

“The government is likely to introduce further

loosening but not necessarily strong stimulus,”

Zhao Yang, an economist at Nomura in Hong Kong,

told AFP.

Workers in the process of making soft toys at a toy factory in Lianyungang, Jiangsu province. China’s growth slipped to a new 7-year low of 6.6% in the second quarter, according to a survey.

BUSINESS5Gulf Times

Thursday, July 14, 2016

BloombergLondon

Airbus Group announced a drastic cut in production of its fl agship A380 superjumbo, acknowledging

that demand has fallen far short of original projections and raising the prospect of the world’s biggest passenger plane being pre-maturely axed.

The build rate for the double-decker will be slashed by more than half to one plane a month by 2018, Airbus revealed on Tuesday. Contrasting with the success of the rest of the Airbus line, the company delivered the surprise damper just hours after pulling in several massive orders for its popular A320-type single-aisle jet at the Farnborough Air Show in the UK.

Facing an almost inevitable demise just a decade into commercial operation, the A380 never met Airbus’s aspirations, and the company has long since given up on recouping its €25bn ($28bn) in develop-ment costs. Demand evaporated in recent years with the introduction of more nim-ble twin-engine jets, leaving Emirates of Dubai as the only carrier to fully embrace the giant aircraft.

Having once predicted that airlines would buy 1,200 supersize-planes over two decades, Airbus has had to settle for a far more modest reality. It has delivered only 193 A380s with 126 orders left to fi ll, though some of them are unlikely ever to materialise, and says the planned rate cut will put future output “in line with the current order intake.”

Even with Airbus seeking to reduce pro-gramme costs to allow the A380 to remain viable at lower production levels, the se-verity of the planned rate cut suggests the programme is on the brink of a terminal decline. While a break-even rate of 27 de-liveries achieved in 2015 should be cut to 20 next year, that’s still eight more than Airbus is counting on from 2018, putting the plane in a perilous position regardless of jetliner unit chief Fabrice Bregier’s dec-laration that “the A380 is here to stay.”

“It won’t recover from this,” said Rich-ard Aboulafi a, an aviation consultant at Teal Group in Fairfax, Virginia. “The new rate is seriously uneconomic; therefore it will die in a few years.”

Airbus shares fell as much as 3% and were trading 0.8% lower at €51.80 as of 10:57am in Paris. The stock has declined 17% this year, valuing the company at €40bn ($44bn). Popular with travellers because of its wide open spaces, even when fi lled with the regulation 550 seats, the A380 has been less of a hit with the world’s airlines. While Emirates has ordered more than 140 of the planes and has around 80 in service, only two other operators, Sin-gapore Airlines and Australia’s Qantas Airways, have bought 20 aircraft or more.

Emirates said in an e-mailed statement that it’s 2018 A380 deliveries “will not be impacted” by Airbus’s production slow-down, while off ering no comment on the repercussions of the decision. The biggest long-haul airline, which has built its busi-ness model largely around the A380, had been pressing for a revamped version in order to safeguard superjumbo operations for a decade or more.

Even large global carriers such as British Airways and Air France operate the A380 in small batches, deploying it as a fl agship aircraft to be used on a handful of high-profi le routes and for photo opportunities, rather than the mass-transit workhorse that Airbus had intended it to be. To most airlines, the double-decker remains an ex-otic addition at best, rather than the back-bone of a long-distance fl eet.

Not a single US carrier has bought the A380, and Japanese airlines, leading cli-ents for older leviathans like the Boeing Co 747, have taken just a handful. The model is by far Airbus’s most expensive, com-manding a list price of $432.6mn, though customers typically get steep discounts. There are so far no second-hand A380s in the market, making the plane’s resale value hard for operators and leasing com-panies to predict.

New contracts have been few and far between in recent years, with the A380 es-caping an order blank for 2015 only when a deal for three planes announced by Japan’s

All Nippon Airways Co earlier this year was backdated. Iran’s outline purchase of 12 A380s, revealed in January, lifted the gloom briefl y, before the government in Tehran said it may not translate into orders for fi ve years, and only then if the country decides it really needs the planes.

With no hint of further contracts and the A380 wowing crowds rather than fl eet managers at this week’s Farnborough show south of London, 2016 “looks particularly grim,” said Hans Weber, president of San Diego-based consultancy Tecop Interna-tional, adding that he, too, views the rate cut as “the beginning of the end.”

At the heart of the A380’s failure is a bet taken by Airbus on the direction of global aviation, with the company arguing when pitching the model that global “megaci-ties,” increasingly crowded hubs and Asian economic expansion would spur demand for legions of superjumbos across the planet. It’s a theme the company reiterated in Tuesday’s release, saying the double-decker provided the “one and only solu-tion for sustainable growth at congested airports.”

Boeing saw things diff erently, suggest-ing globalisation would demand higher frequencies on trunk routes combined with a multiplicity of new services link-ing smaller cities - all best served by mid-sized wide-bodies. Its response was to build the 787 Dreamliner and update the best-selling 777 range. It’s own 747-8, the

latest iteration of its once popular jumbo jet, has encountered a reception from buy-ers even more lukewarm than the A380’s.

Airbus itself seems slowly to have been coming round to Boeing’s view. Until re-cently, it was pressing airlines to endorse an engine-upgrade plan aimed at breath-ing new life into the programme.

While Emirates was keen on the propos-al, other takers failed to materialise and Airbus said in March the so-called New Engine Option might not come until the mid-2020s. The Gulf carrier’s president, Tim Clark, added last month that he’d all but given up on the upgrade and was more concerned that the A380 should survive in some form as Airbus focused on its own smaller A350 wide-body.

In detailing the production cuts, Airbus sought to indicate that all was not lost for the A380, and that the plane would ef-fectively be kept on life support until aviation markets expand in line with the company’s more optimistic forecasts. Workers would be assigned to other, more promising programmes, it said. Bregier, though, has himself acknowledged that the A380 may have been premature, with air traffi c yet to reach a level that makes it the obvious choice. And should that time ever come, the giant double-decker will most likely have aged to a point where it will look like an outdated idea, overlooked by customers in favor of a new generation of jets.

Airbus A380 output cut may mark beginning of the end of superjumbo

Asia’s budget airline king splurges on planes to retain leadBloombergLondon

Earlier this year over Iranian food in London, Tony Fernandes was discussing the outlines of his most

audacious aircraft purchase yet with two Airbus Group SE executives. When it came time to pay, neither of the plane-maker’s top brass had the required cash, so Fernandes picked up the tab.

Such loyal support for the European manufacturer has become a hallmark of Fernandes and AirAsia Bhd., the Malaysian discount carrier he built over the last decade and a half into the biggest operator of Airbus single-aisle aircraft. On Tuesday at the Farnbor-ough Air Show outside London, the two sides announced a deal for 100 A321neo airliners, valued at $12.6bn, by far the biggest purchase of this year’s expo and comfortably nudging Airbus ahead of archrival Boeing Co in the order tally.

The British-educated Fernandes, 52, has accomplished in Asia what Ryanair Holdings did in Europe and Southwest Airlines Co achieved in North America, said Brendan Sobie, a Singapore-based analyst at CAPA Centre for Aviation. The emergence of more budget carriers in Asia, following the success of AirA-sia, has driven down fares and allowed more people to take to the skies, while economic growth has opened new des-tinations in countries such as China and India.

“His creation, AirAsia, has obviously fundamentally changed the industry,” Sobie said. “There’s been a huge struc-tural change in the Southeast Asian air-line sector because of AirAsia.”

Fernandes has followed in the foot-

steps of his former employer and Virgin Group founder, Richard Branson, and EasyJet’s Stelios Haji-Ioannou, the UK aviation entrepreneurs who built under-dog empires to compete with state-run rivals.

Shares of AirAsia were unchanged yesterday at 2.71 ringgit after climbing 3% the previous day, the biggest gain in three weeks. They have more than doubled this year as profi t jumped six-fold in the fi rst quarter. In comparison,

Singapore Airlines, which reported a six-year-low yield from passengers in its latest earnings, has declined 2.4%, while Cathay Pacifi c Airways stock in Hong Kong has slumped 10%.

AirAsia carried 50.7mn people last year, 11% more than in 2014. The low-cost carrier had 170 planes in its fl eet at the end of March, while AirAsia X Bhd, the long-haul service Fernandes started in 2007, operated 29, according to the company’s website. They serve 123 air-

ports with 987 fl ights a day. It hasn’t all been easy for Fernandes, who has built up AirAsia since he and partners bought it for 1 ringgit, or about 25 US cents, in late 2001 and took on its 40mn ringgit ($10mn) in debt. In December 2014, an AirAsia plane with 162 people on board crashed into the sea en route to Singa-pore from Indonesia’s Surabaya, an inci-dent investigators said involved cracked soldering on an electronic rudder com-ponent and pilot errors in responding

to the fault. Overcapacity and intense price wars have also weighed on earn-ings. AirAsia X reported losses in the last three years, fuelling speculation it may be taken private.

“They had a very diffi cult couple of years, but their joint venture strategies in diff erent countries are really paying off ,” Domhnal Slattery, chief executive offi cer of aircraft lessor Avolon, said Tuesday in an interview on Bloomberg Television.

The A321neos, which will carry as many as 240 seats, will be assigned to Hong Kong and Chinese and Indone-sian destinations, Fernandes said in a Bloomberg Television interview at the Farnborough show. The company is also “very, very bullish on India,” the CEO said.

“I’d love to have these aircraft now, to be honest” as traffi c expands across Asia, Fernandes said. “People want to fl y; the market is huge.”

An all-Airbus fl eet shows the close re-lationship Fernandes has developed over the years with Airbus, where it already had 380 planes on order before Tues-day’s announcement. A big supporter of the Toulouse, France-based manu-facturer’s twin-aisle A330neo model, he bought 50 of the A330-900neo version at the 2014 Farnborough Air Show in one of its biggest deals. At a press conference to announce that purchase, business reserve gave way to raw emotion as ex-ecutives of both companies exchanged kisses and man-hugs.

“I never thought we’d get this big,” Fernandes said in a separate interview on Tuesday. “I told Airbus to take a punt on me because if I get it right, the mar-ket is bloody huge. Everyone wrote us off this time last year. We kept on fi ghting.”

Fernandes attended Epsom College,

a UK boarding school, in the late 1970s. He was sent there at the age of 12 by his parents, who encouraged him to become a doctor. A homesick Fernandes wanted to return to Malaysia during his fi rst Christmas vacation, a plan vetoed by his parents, who deemed the airfare too expensive.

After graduating in 1987 with an accounting degree from the London School of Economics, Fernandes worked as a fi nancial controller at Virgin Media Communications in London. He moved back home to Kuala Lumpur in 1992 to become general manager of Warner Music Malaysia. In 1996, he was pro-moted to vice president of Warner Mu-sic Southeast Asia.

In July 2000, Fernandes travelled to New York for a meeting over the merger of Time Warner and AOL and resigned because he didn’t believe the combined company would succeed. That year, he sold his Time Warner stock options at $80 a share. In 2009, Time Warner spun off AOL as a separate company after record losses.

Fernandes applied to become an over-seas citizen of India earlier this year, a status that may allow him to fully own his local unit, skirt rules that restrict foreigners and expand services. He has a venture with Tata Sons Ltd in that coun-try.

“Like him or loathe him, Tony Fern-andes and his partners at AirAsia have revolutionised discount travel and made the business and industry in Southeast Asia more exciting and fun,” said Shu-kor Yusof, founder of aviation consult-ing fi rm Endau Analytics. “By virtue of AirAsia being the fi rst LCC in Southeast Asia and now the biggest in the region, Fernandes has positioned himself as the playmaker of discount fl ying.”

The Airbus A380 aircraft performs a manoeuvre during its display at the Farnborough International Airshow. The production of the double-decker will be slashed by more than half to one plane a month by 2018, the firm revealed on Tuesday.

Airbus sees future for Super Puma butno quick rebound in helicopter marketReutersFarnborough, England

Airbus has no plans to scrap its Super Puma helicopter in the wake of a crash that killed 13 people in Norway, the head of its helicopter division said yesterday, but he warned the market would be weak at least until the end of 2017.The Super Puma, a staple of the offshore oil industry, was banned from commercial use in Norway and Britain following the accident in which everyone on board died after the main rotor blades separated from the aircraft.“Of course the product will have a future. We really believe in this product,” Airbus Helicopters chief executive Guillaume Faury told Reuters, when asked about the accident, which he described as a shock for the company.Norwegian investigators have ruled out human error in the accident, the first fatal crash involving the H225 model, and have contacted European air safety authorities about a possible safety issue with the helicopter’s gearbox.“At that moment, we don’t know if this is design, production, maintenance or a combination of the three,” Faury said. “We need

to understand, to go to the bottom of the root cause and then solve the problem.”Earlier generations of the Super Puma have 5.3mn flight hours over 30 years, he said.An uptick in the oil price following January lows has not been sufficient to boost demand for helicopters in the oil and gas sector, where companies continue to cut costs, he said.“There is overcapacity in the helicopter sector for supplying the oil and gas and I don’t anticipate that things will change in 2016 and in 2017,” Faury said.Even with a reasonable increase in the oil price, it would take time before investment restarts, he added.“Maybe we have reached the bottom of the crisis as far as the helicopter industry is concerned but I am not speculating that things will rebound quickly.”Airbus Helicopters is hoping for a boost from its military wing in two tenders in Poland, one for Super Pumas and one for attack helicopters.It is also hoping to sell 32 Super Puma helicopters to Singapore for $1bn, a tender in which it had been the favourite before the deal was put on ice after the crash.

A French Air Force helicopter Super Puma is seen during the close air support (CAS) exercise Serpentex 2016 hosted by France in the Mediterranean island of Corsica, at Solenzara air base.

A passenger waits to check in at AirAsia counters for a flight at Don Muang International Airport in Bangkok. AirAsia carried 50.7mn people last year, 11% more than in 2014. The low-cost carrier had 170 planes in its fleet at the end of March.

BUSINESS

Gulf Times Thursday, July 14, 20166

Citigroup targets high-growthfi rms to bolster Asia businessReutersHong Kong

Citigroup Inc looks to sharpen its focus on winning a bigger share of business from “emerging market champions” in Asia,

including rapidly growing Internet fi rms, as part of its plans to boost corporate banking revenue.

The US bank, which counts Asia as its fastest growing region, employs more than 600 people in its corporate banking business in the region and would make select hirings to bolster its pres-ence, Gerald Keefe, newly appointed head of Asia Pacifi c corporate banking, said.

“These companies have achieved scale quickly and now increasingly are growing in developed markets,” Keefe said, referring to what the bank calls emerging market champions in countries such as China and India.

Citigroup announced the appointment of Keefe as Asia Pacifi c corporate banking head in April, a new role that brings together bankers working for clients from fi nancial institutions, public sector entities, corporates and local units of global fi rms.

“One of the priorities in the new role is to de-liver stable top-line growth for corporate banking in Asia in an effi cient and responsible manner,” Keefe, who was previously the bank’s corporate banking head in Japan, told Reuters.

Citigroup’s enhanced focus on the corporate banking business in Asia comes against the back-drop of a drop in revenues from trading and deal advisory and underwriting in the fi rst quarter that weighed on its earnings.

Citigroup chief executive offi cer Mike Corbat indicated last month that the bank’s second-quarter net income will be roughly 25% lower than the same period a year earlier.

The bank is due to report tomorrow.Under the corporate banking business in Asia,

its off erings include cash management, foreign exchange, trade fi nance, loans, and capital mar-kets and structured products solutions.

The unit will work closely with investment banking and markets teams. In a sign of its in-creasing focus on high-growth fi rms in the re-gion, Citigroup was one of the lead arrangers in

three separate loan deals of Chinese Internet gi-ants Alibaba Group, Baidu and Tencent Holdings, which raised a combined $10.4bn earlier this year, according to Thomson Reuters LPC data.

“We have leading corporate champions in

China as our clients... they are now in many ways global businesses,” Keefe said.”We are uniquely positioned to help them expand globally with our network in over 100 countries.”

In Asia, the bank is also looking to grow its

supply-chain financing business, in which tar-get clients range from car component makers to telecoms equipment producers, as these firms look to expand their geographical footprints, Keefe said.

PBoC to seek better financial data sharing among regulatorsBloombergBeijing

China’s central bank is trying to reshape

regulation to establish a more systematic

way for data to be shared between the

nation’s financial regulators, according to

two people familiar with the matter.

The People’s Bank of China wants

to build a balance sheet for the entire

financial sector that gives an accurate

reflection of assets and liabilities, said

the people, who asked not to be identi-

fied because they’re not authorised to

speak publicly. To do so, it’s working to

reshape existing regulations on how

agencies collect and share data, with any

rule changes needing approval from the

State Council, the people said.

Information on financial firms includ-

ing brokers and insurers is currently

supervised by other agencies such as

the China Securities Regulatory Com-

mission and China Insurance Regula-

tory Commission, said the people. The

PBoC press office didn’t respond to

faxed questions seeking comment on

the plan. Centralisation of financial data

under the PBoC’s direction would mark

the latest step in cementing its role as

the central force for finding and defus-

ing risks in China’s financial system. In

the aftermath of the past year’s market

plunges and rapid growth in online

financing, the government is weighing

how best to overhaul monitoring and

enforcement.

Assessing risk requires central banks

to “make decisions on the basis of a

large amount of economic and financial

statistics,” PBoC deputy governor Chen

Yulu wrote in an article published in May

by China Finance, a publication of the

monetary authority. Timely, accurate

data is crucial to do so, as is widening

the scope of statistics coverage to have

a “full comprehension of the financial

market,” he wrote.

A new pilot programme suggests the

PBoC is already working to put the data

sharing system in place. Regulators said

in March they would begin joint trials

in Tianjin, Anhui, Zhejiang and Guang-

dong provinces to test cross-market,

cross-sector statistics collection, the

people said. The central bank wants to

eventually expand the trials to the whole

country, the people said.

The CSRC can collect data from listed

companies, asset managers, exchanges,

securities firms and futures brokers,

the regulator said in a 2009 publication

without specifying what information

it gathers. The CIRC currently collects

information on the financial standing of

insurers and their staff ing levels, accord-

ing to a 2013 publication.

The PBOC still needs to confer with

other regulators about its proposals,

which haven’t yet been formally submit-

ted to the State Council, China’s cabinet,

according to the people.

In May, the PBoC expanded its powers

to cap cross-border capital flows by add-

ing controls for banks and companies to

its new Macro Prudential Assessment.

That risk-monitoring system, announced

in December, was soon expanded to

include bonds, equities and off -balance

sheet assets held by commercial banks,

giving the central bank monitoring

authority that was once the turf of the

banking regulator.

A pedestrian walks past a branch of Citibank in Beijing. The US bank, which counts Asia as its fastest growing region, employs more than 600 people in its corporate banking business in the region and would make select hirings to bolster its presence, Gerald Keefe, newly appointed head of Asia Pacific corporate banking, said yesterday.

ReutersKuala Lumpur

Malaysia’s central bank, seeing more clouds over the global econ-

omy after Britain’s Brexit vote, surprised markets by cutting its key interest rate for the fi rst time in seven years in a bid to keep the country on a “steady growth path”.

Bank Negara Malaysia (BNM) yesterday cut the overnight pol-icy rate (OPR), steady since July 2014, by 25 basis points to 3%.

Global growth prospects have “become more susceptible to in-creased downside risks in light of possible repercussions from the EU referendum in the United Kingdom,” the central bank said.

“International fi nancial mar-kets could also be subject to greater volatility going forward.

In this light, global monetary conditions are expected to re-main highly accommodative,” it added.

The ringgit initially weakened slightly on the news, then turned fi rmer, rising 0.3% to 3.9700 per dollar.For the year, the ringgit has been the region’s best-per-forming currency, strengthened 8.2% against the dollar.

Most government bond prices rose with the 10-year yield down to 3.637%, the lowest since No-vember 2013.

Malaysian stocks rose frac-tionally after the cut.

All 13 economists in a Reuters poll had forecast no change to BNM’s key rate as they did not see a strong push factor for a policy shift now.

“We’re surprised in terms of the timing,” said Euben Parac-uelles, a Nomura economist in Singapore.”We expected a cut in either late Q3 or early Q4.

I think BNM’s preference is to be a bit more pre-emptive to counter external headwinds.”

The central bank indicated it seeks to give the domestic economy a boost without creat-ing any asset bubbles.Domestic fi nancial conditions are stable and “the risks of destabilising fi nancial imbalances have re-ceded,” BNM said, adding that more prudent lending standards have “contained speculative ac-tivities in the property market”.

Southeast Asia’s third-largest economy has posted fi ve quar-ters of slowing growth, tied to weakness in global crude and commodity prices.

In January, Malaysia revised its 2016 growth projection downwards to 4%-4.5% from 4%-5% on expectations of a sustained slump in global crude prices.The last time the central bank cut the benchmark rate was February 2009, when it was slashed by 50 basis points to 2%.

BNM likely decided to cut now to take advantage of “a softer US dollar with fewer concerns regarding capital outfl ows”, ac-cording to Andy Ji, Asian curren-cy strategist for Commonwealth Bank of Australia in Singapore.

Infl ation is not a worry at present, and the central bank yesterday cut its projection for 2016 to 2%-3% from 2.5%-3.5%.

The annual pace was a sev-en-year high of 4.2% in Febru-ary, but it slowed the next three months, reaching 2% in May.

BNM may consider further cuts later this year if global mar-ket conditions deteriorate, said Julia Goh, an economist for UOB Bank in Malaysia who, like many, expected a hold yesterday.

Global woes spur Malaysia’sfi rst key rate cut since ’09

BloombergMumbai

The Reserve Bank of India is bracing for a fi ght on proposed changes to the global regulatory framework that would hit the

country’s lenders with higher capital charges for the mountain of government debt on their books.

Tighter rules would bite India’s banks, already struggling with surging bad loans and higher provisions. With nearly 30% of their assets in state debt, India’s lenders would take a hit if the Basel Committee on Banking Supervision raised capital requirements on sovereign bonds.

“There is a proposal to impose capital require-ments on sovereign assets that banks hold,” RBI governor Raghuram Rajan, who steps down in September, said last month. “We are opposing that tooth and nail at Basel.”

The Basel Committee, which brings together regulators from about 30 nations including the RBI, the US Federal Reserve and the Bank of Eng-land, began reviewing the regulatory treatment of banks’ government bond holdings last year. The regulator plans to publish a proposal around year-end, and deliberations could continue for several years.

Most countries currently treat state debt as if it were risk-free, meaning banks don’t need capital to protect against default. Sovereign debt is also exempt from rules that limit a bank’s exposure to any single creditor.

The current system is “no longer tenable,” but any changes to refl ect the “risky nature of public debt” would need to factor in the “special role” it plays in the fi nancial system as a “source of li-quidity and a potential buff er for the macroecon-omy,” according to the Bank for International Settlements.

The Basel Committee is considering four main options: revisions to the risk-weighted and large-exposure rules, beefi ng up supervisory powers to tackle sovereign risk and requiring lenders to en-hance disclosure.

European Basel Committee members such as Germany are among advocates for changing the rules, driven by their experience of the “doom loop” between banks and sovereigns that forced countries such as Greece and Spain into painful public bailouts during the euro area’s debt crisis.

Rajan said deliberations at the Basel Commit-tee are sometimes dominated by advanced econ-omies. India’s task is to identify regulations that “we’re uncomfortable with, that are more suited to their banks and not to ours,” he said. “What we accept are things that we think are reasonable for the safety and stability of our economy.”

India is joined in opposition by countries such as Italy, which has warned that changes could destabilise the fi nancial system.

This split is refl ected in the data. Domestic government debt accounted for 27.7% of Indian banks’ total assets in 2015, BIS data show. Mexico was at 23% and Brazil at 20%. Some advanced economies aren’t far behind. Italy comes in at 17.2% and Japan at 16.5%.

In Germany, by contrast, domestic govern-ment debt makes up 7.5% of banks’ total assets. In the US, the fi gure is 8.5%.

Part of the reason for the special regulatory

treatment is that government bonds diff er from other debt, according to the BIS. In some emerg-ing markets, it’s the only high-grade domestic security, leading inevitably to higher exposures. Some central banks also defi ne eligible collateral for monetary policy market operations such that only state debt qualifi es.

The RBI requires commercial lenders to in-vest a portion of deposits in liquid instruments, which in practice means government bonds. The so-called statutory liquidity ratio is currently 21% of deposits, and many lenders exceed this level in the absence of comparable alternatives.

Maintaining excess SLR securities helped banks to weather the impact of “the slow phase of the economic cycle on their balance sheets and earnings,” the RBI said in its annual report last year.

The SLR is scheduled to drop to 20.5% in Janu-ary, and eventually to zero, though no deadline

has been set. One reason is that the Indian gov-ernment relies heavily on banks to fund its budg-et defi cit.

Imposing a higher risk weight to sovereign bonds would hit Indian banks already scrambling to meet capital requirements that phase in over the next few years, according to Krishnan Sitara-man, a senior director at CRISIL Ratings.

Indian banks had about about Rs26tn ($387bn) of securities issued by the central and state gov-ernments on their books as of March, Sitara-man said. AAA rated corporates carry a 20% risk weight. Applying a requirement half as stringent to state debt would add about 300bn rupees to banks’ capital burden, he said, citing CRISIL es-timates.

If the Basel Committee opts for exposure lim-its, Indian banks could face foreign-exchange risks arising from holding foreign sovereign pa-per. In addition, weaning banks off Indian sover-eign bonds could also drive up the government’s borrowing costs. Banks hold about 45% of state debt, so any exposure limit below the level of current holdings would force the government to seek out alternative investors, Sitaraman said.

India does have clout when it comes to global regulation, Rajan said, pointing to the total loss-absorbing capacity requirement adopted by the Group of 20 nations last year in a bid to tackle the problem of too-big-to-fail banks.

TLAC, designed by the Financial Stabil-ity Board, requires the world’s most systemically important banks from 2019 to have loss-absorb-ing capacity equivalent to at least 16% of risk-weighted assets – the low end of the proposed range. India opposed TLAC “signifi cantly and got it written down,” Rajan said. “We were one of the leading emerging markets to actually bring that down.”

A predecessor at the RBI took a more concilia-tory stance on global standards, including those for sovereign bonds.

“If you don’t accept an international rule which is adopted by all countries, then obviously you don’t have the same facilities in foreign bor-rowing or lending and in terms of your banking institutional structure being respected equally abroad,” said Bimal Jalan, RBI governor from 1997 to 2003.

“They will adopt a rule by consensus and then we will follow that rule,” Jalan said.

Banks’ state debt pile at stake as India braces for Basel battle

The Reserve Bank of India in Mumbai. The India’s central bank is bracing for a fight on proposed changes to the global regulatory framework that would hit the country’s lenders with higher capital charges for the mountain of government debt on their books.

BUSINESS7Gulf Times

Thursday, July 14, 2016

Draghi bazooka elevating stress levels as insurers face testBloombergZurich

European insurers, whose prof-its are being eroded by Mario Draghi’s quantitative-easing

programme, face a stress-test head-ache that risks requiring them to set aside more capital, further hurting their ability to make money.

The timing of the regulator’s “stress test couldn’t be worse as the results will be rather negative,” said Lutz Roe-hmeyer, who helps oversee about $12bn as director of fund management at Landesbank Berlin Investment.

“Should it reveal a need to plug capi-tal shortfalls at some insurers, that would be a major setback for the indus-try as a whole.”

The impact of low and negative in-terest rates in Europe will be a key con-cern during the stress tests, regulator Eiopa said ahead of the submissions this week. Insurers could face lower profi tability and dividends after the results are published at the end of the year because a need for additional capi-tal buff ers would weigh on earnings.

Insurers’ investment income is al-ready being aff ected by the European Central Bank, which has pushed down yields on government and corporate bonds through unprecedented asset purchases, forcing the industry to look for riskier investments or re-invest at lower returns.

German and Dutch insurers are worst aff ected by the quantitative-easing programme and low interest rates be-cause they sold more products with

guaranteed payouts, Moody’s Investors Service analyst Benjamin Serra said in an interview. The guarantees were as high as 4% for policies sold in the sec-ond half of the 1990s in Germany. A life-insurance contract can run for 30 years or more, so it’s diffi cult to meet these obligations with the country’s 10-year government bonds yielding less than zero compared with 5.4% at the end of the 1990s.

“If this situation continues, we’ll have a state of emergency, in particular for life insurers,” said Rene Locher, an insurance analyst at MainFirst Bank.

“Low rates, or negative rates, in combination with a central bank that is buying assets on a large scale, putting pressure on yields, is bad for invest-ment income.”

In the search for yield, some insur-

ers have already been hit by the move into the riskier assets. Munich Re low-ered its profi t target for the year after losses in its equity portfolio as well as restructuring costs. Zurich Insur-ance AG’s hedge fund investments lost $63mn in the fi rst quarter. Aegon lost €358mn ($397mn) on investments in hedge funds and commodities as well as hedging mismatches.

“The temptation has been to increase exposure to higher-yielding assets but you have to understand what you’re doing and can’t just chase yield for the sake of it,” said Guy Miller, Zurich In-surance’s chief market strategist.

Other insurers are increasingly rely-ing on returns from property to boost profi ts, said Edmond Christou, an ana-lyst at Bloomberg Intelligence. “Life insurers like Swiss Life, Helvetia and

Ageas tend to rely on harvesting real estate gains to pay off guarantees on back-books,” said Christou. “Any sud-den decline in the Swiss property mar-ket may hit their earnings power.”

Investment income at UK insurers will also come under pressure this year as a rising proportion of their assets, such as short-term corporate bonds, are reinvested at lower returns, Fitch Ratings said in April. The UK’s vote to leave the European Union will also af-fect the industry, as it impacts the pric-ing of assets from real estate to bonds.

“European insurers were in dire straits already before the Brexit, with record-low interest rates and much tighter regulation,” said Roehmeyer at Landesbank Berlin Investment. That, “topped with hits on their equity holdings and a setback for economic

growth, will limit top-line growth.”The Eiopa stress tests are an unnec-

essary expense for insurers, particu-larly after the introduction of Solvency II, which also measures capital buff ers, said Immo Querner, chief fi nancial of-fi cer at Talanx, Germany’s third largest insurer.

“Solvency II is a permanent stress test of an insurer’s capital by design, so we are now literally stress-testing a stress test,” Querner said in an inter-view.

Eiopa “considers the low yield sce-nario extreme and severe enough to as-sess the vulnerabilities of the life insur-ance sector,” according to an e-mailed statement. The regulator plans to publish the test’s results in December without providing data on individual companies.

Italy seeks second bank support fundby end of the monthBloombergRome

Italy is working to set up a second bank support fund by the end of the month,

opening a new front in the country’s eff orts to restore con-fi dence in its fi nancial system, people with knowledge of the matter said.

The goal is to have €2bn ($2.2bn) to supplement Atlante, two people said, referring to the privately backed fund for banks that has already been tapped twice since it was created with government help in April. At-lante is now seeking to use its

remaining reserves to relieve Banca Monte dei Paschi di Siena of €10bn in bad loans, two Ital-ian newspapers reported yes-terday.

Offi cials are looking to set up the second fund, likely to be called Atlante 2, sometime this month, the people said, asking not to be named because the plan isn’t public. Europe pub-lishes the results of bank stress tests on July 29. State-run lender Cassa Depositi e Pres-titi would contribute between €400mn and €500mn to the new fund, which would focus on non-performing loans, the people said.

Italy is trying to shore up a

banking system saddled with bad loans without breaching Eu-ropean Union rules that require investors to share losses. News-paper Il Sole-24 Ore reported last week that offi cials were planning a supplemental fund with €3bn to €5bn to buy non-performing loans.

Spokesmen for the Treasury and for CDP declined to com-ment. Claudio Costamagna, chairman of CDP, which helped fi nance Atlante, told Bloomb-erg last month that the existing fund was not big enough to solve all problems. He said CDP would “play a role” in expanding the fund.

Where the remaining money

for Atlante 2 would come from was not clear. One person said international investors, in-cluding unspecified UK and US private equity funds, weren’t interested in a new support fund for Italian banks because of market uncertainty after the UK referendum to leave the Eu-ropean Union. The Brexit vote hastened a decline in many Italian banks, including Monte Paschi, the third-largest lend-er, whose shares have lost more than 70% of their value this year.

Atlante is negotiating a €10bn purchase of Monte Paschi’s non-performing loans, news-papers La Stampa and Milano

Finanza reported yesterday. The purchase could be completed in coming days, La Stampa said, adding that Atlante’s remaining €1.7bn of reserves may be suf-fi cient to cover the purchase, which would include an element of securitisation.

Mediobanca SpA has ap-proached other investors about easing Monte Paschi’s debt bur-den, La Stampa said. JPMorgan Chase & Co may work on the structure of a deal to sell the bad loans, Milano Finanza reported.

An offi cial for JPMorgan de-clined to comment while a spokesman for Mediobanca didn’t immediately respond to a request for comment.

Carney opens Lehman playbook as BoE rate cut eyedBloombergLondon

Mark Carney looks poised to repeat a

strategy that served him well during the

global financial crisis.

As the Bank of England governor seeks

to stave off any turmoil after Britain’s deci-

sion to quit the European Union, he has

cited his experience at Canada’s central

bank in 2008 as a guide. Acting early to

prevent a deeper downturn became the

hallmark of his approach in the prelude to

the international slump, a perspective he

can bring to the Monetary Policy Commit-

tee’s debate this week on whether to cut

interest rates.

“One thing Carney is very good at doing

is jumping ahead of the curve,” said James

Rossiter, an economist at TD Securities in

London and a former off icial at the both

the British and Canadian central banks. “As

governor of the Bank of Canada, he was

cutting rates dramatically before Lehman

went bust. To have that sort of foresight, to

know this was going to be a bigger issue

than perhaps the markets were appreci-

ating, and to go forth on a clear easing

strategy, is something that we could see

him repeating.”

With Brexit roiling currency markets

before a 2.6% rally in the pound this week,

confidence gauges diving and Carney

warning of a “material slowdown,” econo-

mists and investors see more stimulus on

the way. The governor is still at the van-

guard of Britain’s response as the govern-

ment remains sidetracked by a change of

leadership in the ruling Conservative Party.

Yesterday — the day the UK was set

to get a new prime minister in Theresa

May - BoE policy makers were to vote on

whether to reduce the key rate for the first

time since 2009. Carney also held a break-

fast meeting with Scotland’s First Minister

Nicola Sturgeon, according to the BBC,

and is also meeting US Treasury Secretary

Jacob J Lew.

The rate decision will be announced

at noon London time today. Thirty of

54 economists surveyed by Bloomberg

predict a cut, with the majority of those

seeing a reduction to a record-low 0.25%.

Ironically, Carney’s old employer, the

Bank of Canada, also holds a monetary

policy meeting yesterday. Governor

Stephen Poloz is likely to hold off from any

rate cut in the face of a hot housing mar-

ket and as the economy of the neighbour-

ing US provides support.

Carney said shortly after the referen-

dum that easing will probably be needed

this summer, meaning the focus now is on

whether off icials act this week or wait until

their Aug. 4 meeting. The advantage of the

later date is that the BoE will publish new

forecasts in the quarterly Inflation Report

and the governor is due to hold a press

conference.

Still, as the only MPC member with

direct experience of cutting rates in a

crisis and the only one to have expressed

a monetary-policy view since the Brexit

vote, Carney seems clear that the best

strategy is to be candid.

At his first meeting as Bank of Canada

governor in March 2008, he oversaw a

50 basis point rate cut to 3.5% and went

on to slash the key rate to 0.25% by mid-

2009. His willingness to seize the initiative

was credited with helping his homeland

survive the financial crisis in relatively

good shape.

“I was a central-bank governor through

the 2008 financial crisis; you have to come

straight with people about where the risks

are and then have a clear plan to address

them,” he told UK lawmakers in London on

Tuesday. “You can’t govern by assertion,

you can’t wish things away. That way per-

petuates a financial crisis. It reinforces it.”

The views of his eight colleagues on

the BoE’s rate-setting panel are less clear.

Chief Economist Andy Haldane and policy

maker Gertjan Vlieghe may be minded to

vote for a cut, having indicated a willing-

ness in the past.

Others may prefer to wait for more data.

The Off ice for National Statistics says the

impact of Brexit won’t be visible in hard

economic figures until mid-August. Even

so, a gauge of consumer confidence drop-

ping at the fastest pace in 21 years, the

pound sinking to the weakest against the

dollar since 1985 and the freezing of multi-

ple property funds may provide suff icient

evidence that action is necessary.

“That the governor has already sig-

nalled the BoE will ease soon tells us that

the BoE’s strategy is to act in anticipation

of the forthcoming weakness rather than

being data dependent,” said Kallum Pick-

ering, an economist at Berenberg Bank in

London. “This suggests the BoE will prob-

ably move sooner rather than later.”

Investors are pricing in an 80% chance

of a rate cut this week, up from 11% just

before vote counts showed the “Leave”

campaign had won the referendum. A

significant spike in those bets came after

Carney’s speech on June 30, where he said

it was “plausible that uncertainty could

remain elevated for some time” and that

“some monetary-policy easing will likely

be needed over the summer.”

“I can’t think of a speech where we’ve

had a clearer policy signal from him,” said

Ross Walker, an economist at Royal Bank

of Scotland Group Plc in London. “He has

created a clear expectation in the market

that they will deliver something this week.”

Privately-backed fund Atlante is seeking to use its remaining reserves to relieve Banca Monte dei Paschi di Siena of €10bn in bad loans, newspapers reported yesterday.

Consumers take backseat in $19bnRomanian GDP revampBloombergBucharest

Romanian consumers, the driving force behind one of Europe’s fastest-

growing economies, must step aside under a new growth plan that will funnel €17bn ($19bn) into manufacturing and pro-duction, according to Deputy Prime Minister Costin Borc.

The strategy — drawn up with the central bank and Pres-ident Klaus Iohannis — runs to 2020 and envisages gross do-mestic product jumping by an average of 5% a year, said Borc, who’s also economy minister. Targeting 16 key areas, from agriculture to education, the proposals will also improve in-frastructure, he said on Tues-day in an interview.

Fiscal policy in the Euro-pean Union’s second-poorest economy has recently focused on pre-election tax cuts and state-wage increases, embold-ening shoppers and propelling growth to one of the bloc’s fast-est paces. The new plan would mark a change of tack after some offi cials warned the cur-rent trajectory drains resources from longer-term investments. Borc is a member of the na-tion’s fi rst technocratic gov-ernment since the fall of com-munism. It’s set to step down by year-end.

“We made a mistake by try-ing to stimulate consumption beyond our capacity to pro-duce goods internally and the eff ect is visible in the trade imbalance,” Borc said in his of-fi ce in Bucharest. “Once you have production capacity, it also warrants infrastructure — roads or digital networks — it warrants education, health care and cultural development.”

While retail-sales growth reached 19.5% from a year earlier in March, industry and exports have lagged behind. Meanwhile, imports have surged, advancing

9% in the fi rst fi ve months of 2016. GDP rose an annual 4.3% in the fi rst quarter.

Financing sources for the fi ve-year growth strategy have been identifi ed and can be re-allocated from the budget if a political consensus is reached, according to Borc, who said the fi scal defi cit won’t breach EU limits. Prime Minister Dacian Ciolos’s government is seeking to build the necessary support for the plan to continue after elections in November or De-cember, he said.

Outside the strategy propos-als, Borc said politicians should continue holding initial public off erings or selling minority stakes in state-owned compa-nies such as Hidroelectrica and the Constanta Port. The trans-actions are part of an agree-ment with the International Monetary Fund and are aimed at boosting effi ciency.

“This current technocratic government doesn’t have a mandate for privatisations,” Borc said. “But listings of stakes, IPOs or secondary pub-lic off erings will continue.”

Before any listing, Hidro-electrica’s board should de-vise a hydropower-production strategy and decide whether to keep investing in such plants in Romania, buy renewable energy companies or expand regionally by purchasing simi-lar businesses in neighbouring countries, he said.

Another important govern-ment task is to boost transpar-ency within public adminis-tration to help facilitate years of anti-corruption eff orts by prosecutors to halt the drain of state funds and discourage fu-ture graft.

While Transparency Inter-national still ranks Romania among the EU’s most-corrupt countries, the eff ects of probes against politicians — including former Prime Minister Victor Ponta — are starting to pay off , Borc said.

LATEST MARKET CLOSING FIGURES

8 Gulf TimesThursday, July 14, 2016

BUSINESS

Zad Holding CoWidam Food CoVodafone Qatar

United Development CoSalam International Investme

Qatar & Oman Investment CoQatar Navigation

Qatar National Cement CoQatar National Bank

Qatar Islamic InsuranceQatar Industrial Manufactur

Qatar International IslamicQatari Investors Group

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

Qatar Fuel QscQatar First Bank

Qatar Electricity & Water CoQatar Cinema & Film Distrib

Qatar Insurance CoOoredoo Qsc

National LeasingMazaya Qatar Real Estate Dev

Mesaieed Petrochemical HoldiAl Meera Consumer Goods Co

Medicare GroupMannai Corporation Qsc

Masraf Al RayanAl Khalij Commercial Bank

Industries QatarIslamic Holding Group

Gulf Warehousing CompanyGulf International Services

Ezdan Holding GroupDoha Insurance Co

Doha Bank QscDlala Holding

Commercial Bank QscBarwa Real Estate Co

Al Khaleej Takaful Group

85.00

63.40

10.82

19.29

11.77

11.14

88.50

87.20

150.00

58.70

43.00

62.70

48.60

101.50

23.69

45.80

11.57

154.00

12.03

218.50

32.50

78.80

93.50

18.09

13.79

18.77

212.00

95.30

90.00

35.00

16.31

101.00

69.20

59.80

36.80

18.90

20.50

36.40

25.20

38.10

34.15

24.01

0.95

0.63

0.65

0.57

0.68

1.27

-0.45

0.81

1.83

0.00

1.18

0.00

1.46

1.60

1.02

-0.65

-1.45

0.00

1.69

0.46

0.00

5.21

2.75

1.74

2.38

-0.16

-0.42

0.95

0.11

1.16

-2.63

1.51

1.02

2.40

0.68

2.72

2.50

1.25

-2.51

1.06

2.25

-0.17

394

24,521

524,389

252,910

344,891

24,052

11,720

16,377

171,788

1,686

6,063

11,811

42,319

101,029

184,247

2,236

42,331

126,626

1,098,374

44,470

-

133,506

89,410

217,691

230,556

197,958

14,646

38,426

275

329,402

143,969

168,861

47,717

851,207

165,098

545,525

13,787

32,216

149,336

149,026

432,295

6,093

QATAR

Company Name Lt Price % Chg Volume

United Wire Factories CompanEtihad Etisalat Co

Dar Al Arkan Real Estate DevSaudi Hollandi Bank

Rabigh Refining And PetrocheBanque Saudi Fransi

Saudi Enaya Cooperative InsuMediterranean & Gulf Insuran

Saudi British BankMohammad Al Mojil Group Co

Red Sea Housing Services CoTakween Advanced Industries

Sabb TakafulSaudi Arabian Fertilizer Co

National GypsumSaudi Ceramic Co

National Gas & IndustrializaSaudi Pharmaceutical Industr

ThimarNational Industrialization C

Saudi Transport And InvestmeSaudi Electricity Co

Saudi Arabia Refineries CoArriyadh Development Company

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

Saudi Vitrified Clay Pipe CoJarir Marketing Co

Arab National BankYanbu National Petrochemical

Arabian CementMiddle East Specialized Cabl

Al Khaleej Training And EducAl Sagr Co-Operative Insuran

Trade Union Cooperative InsuArabia Insurance Cooperative

Saudi Chemical CompanyFawaz Abdulaziz Alhokair & C

Bupa Arabia For CooperativeWafa Insurance

Jabal Omar Development CoSaudi Basic Industries Corp

Saudi Kayan Petrochemical CoEtihad Atheeb Telecommunicat

Co For Cooperative InsuranceNational Petrochemical Co

Gulf Union Cooperative InsurGulf General Cooperative Ins

Basic Chemical IndustriesSaudi Steel Pipe Co

Buruj Cooperative InsuranceMouwasat Medical Services Co

Southern Province Cement CoMaadaniyah

Yamama Cement CoJazan Development Co

Zamil Industrial InvestmentAlujain Corporation (Alco)

Tabuk Agricultural DevelopmeUnited Co-Operative Assuranc

Qassim Cement/TheSaudi Advanced Industries

Kingdom Holding CoSaudi Arabian Amiantit Co

Al Jouf Agriculture DevelopmSaudi Industrial Development

Bishah AgricultureRiyad Bank

The National Agriculture DevHalwani Bros Co

Arabian Pipes CoEastern Province Cement Co

Al Qassim Agricultural CoFiling & Packing Materials M

Saudi Cable CoTihama Advertising & Public

Saudi Investment Bank/TheAstra Industrial Group

Saudi Public Transport CoTaiba Holding Co

Saudi Industrial Export CoSaudi Real Estate Co

Saudia Dairy & Foodstuff CoNational Shipping Co Of/The

Methanol Chemicals CoAce Arabia Cooperative Insur

Mobile Telecommunications CoSaudi Arabian Coop Ins Co

Axa Cooperative InsuranceAlsorayai Group

Weqaya For Takaful InsuranceBank Albilad

Al-Hassan G.I. Shaker CoWataniya Insurance Co

Abdullah Al Othaim MarketsHail Cement

24.84

27.90

7.17

12.00

12.53

23.06

11.86

22.89

20.19

12.55

26.20

24.72

25.64

59.76

14.61

40.49

27.57

37.30

32.06

14.16

57.15

20.29

37.66

21.11

13.50

41.22

34.94

91.50

116.00

19.01

41.76

51.05

7.72

27.85

36.00

13.89

9.72

43.60

45.63

143.04

18.13

64.71

83.36

7.01

4.00

91.19

17.59

11.69

15.71

32.10

18.87

17.18

137.75

76.23

26.65

27.65

12.29

28.61

14.01

15.51

10.53

65.25

11.56

11.20

8.50

30.55

11.68

69.75

11.10

22.75

61.75

14.75

30.40

10.47

45.54

7.01

33.20

12.90

17.16

15.37

33.47

40.30

21.86

150.75

41.33

7.35

39.90

8.33

16.67

16.19

11.33

19.39

18.18

24.91

45.17

104.81

12.75

2.64

1.16

3.46

0.00

2.04

2.95

-0.17

-0.43

0.25

0.00

1.16

2.36

1.38

0.72

2.96

0.60

1.06

0.54

0.38

-0.14

2.16

2.06

0.99

0.38

0.00

-0.15

1.30

1.43

-1.69

0.58

-0.55

1.31

1.05

0.22

0.98

0.58

-0.72

1.04

0.24

0.38

-0.66

0.28

1.50

-2.09

0.00

0.27

-0.28

1.65

-0.19

0.31

0.43

0.23

1.40

1.29

1.95

0.25

1.24

0.81

0.65

2.99

1.84

0.31

1.94

-0.18

1.80

-0.39

5.23

0.00

0.91

1.11

0.15

9.83

0.66

0.48

0.49

0.29

1.72

1.57

0.76

6.15

0.51

-0.47

1.16

-0.74

3.20

-0.54

2.31

0.48

-0.42

0.31

1.61

0.00

0.55

0.32

0.16

3.93

1.35

298,173

1,328,186

72,584,693

1,062,242

1,101,459

684,033

2,123,924

1,110,002

446,559

-

84,885

882,465

386,460

426,312

2,311,988

238,998

680,199

65,557

572,678

1,690,888

499,093

3,766,184

604,337

507,856

-

329,106

541,527

11,147

522,716

280,942

330,092

266,143

892,651

388,554

525,173

328,134

1,863,713

124,913

302,107

45,808

2,261,529

340,480

9,118,061

37,835,642

1,671,715

51,262

196,277

952,027

347,443

62,898

1,094,228

357,513

3,671

31,384

741,076

445,396

2,188,226

223,600

1,423,444

2,588,319

790,243

63,281

1,879,150

1,529,381

3,274,438

76,977

4,325,072

-

625,742

675,227

48,675

3,858,012

132,146

1,828,463

308,703

1,930,635

2,015,622

66,728

887,356

3,654,648

115,459

285,096

836,872

35,842

2,380,895

1,248,781

283,552

4,545,124

396,517

244,675

1,042,128

-

1,072,426

765,467

95,262

125,924

443,338

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

6.41

10.03

10.33

18.32

19.73

15.23

12.84

13.70

55.96

25.60

35.48

24.80

14.19

21.70

13.94

13.25

59.47

20.58

28.45

15.15

15.99

18.80

23.69

37.07

26.86

16.53

33.99

11.23

77.75

1.10

-1.28

9.31

1.83

0.46

0.00

1.10

2.01

0.63

0.00

1.11

0.00

1.07

0.00

-0.07

1.07

0.78

0.83

3.23

2.43

-0.50

-0.05

0.34

1.23

2.83

2.04

1.22

0.36

0.65

2,804,685

5,076,735

6,668,783

1,124,543

875,114

-

801,795

53,424,889

171,420

102,676

225,076

-

668,708

25

307,788

2,356,755

1,610,163

676,935

1,056,290

1,110,350

575,594

710,188

146,727

1,201,506

1,439,525

758,542

281,798

2,270,412

15,088

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

82.00

57.00

168.00

81.00

138.00

250.00

37.00

206.00

22.00

40.50

495.00

310.00

395.00

560.00

400.00

186.00

230.00

43.50

32.00

34.00

700.00

64.00

22.00

118.00

12.50

41.00

760.00

600.00

54.00

0.00

36.50

0.00

20.50

0.00

49.50

690.00

0.00

21.50

70.00

0.00

0.00

330.00

79.00

71.00

47.00

0.00

174.00

0.00

26.50

90.00

465.00

28.50

68.00

0.00

45.50

0.00

112.00

150.00

93.00

88.00

110.00

100.00

40.00

60.00

200.00

285.00

40.00

48.00

32.50

40.00

0.00

106.00

470.00

0.00

75.00

200.00

29.00

116.00

95.00

106.00

176.00

66.00

62.00

300.00

335.00

0.00

550.00

29.50

385.00

80.00

960.00

0.00

0.00

0.00

88.00

325.00

500.00

47.50

285.00

0.00

28.50

53.00

28.50

33.50

130.00

42.00

0.00

0.00

72.00

25.00

31.50

34.50

206.00

32.00

28.00

40.00

108.00

78.00

23.00

0.00

11.00

79.00

690.00

44.00

0.00

0.00

-5.00

-1.18

0.00

0.00

0.00

0.00

0.00

-6.38

0.00

-2.94

-3.13

0.00

0.00

-2.44

0.00

0.88

0.00

1.59

0.00

0.00

-1.54

2.33

0.00

0.00

1.23

1.33

0.00

0.00

0.00

-1.35

0.00

2.50

0.00

0.00

0.00

0.00

2.38

0.00

0.00

0.00

4.76

-5.95

2.90

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.45

0.00

-3.19

0.00

3.70

-1.32

-7.00

-1.12

1.85

-3.85

-1.23

1.69

0.00

0.00

0.00

-4.00

1.56

2.56

0.00

8.16

0.00

0.00

0.00

1.01

0.00

0.00

0.00

0.00

0.00

-2.94

1.64

0.00

-1.47

0.00

0.00

0.00

0.00

1.27

0.00

0.00

0.00

0.00

2.33

0.00

0.00

-2.06

0.00

0.00

0.00

1.92

1.79

-2.90

0.00

0.00

0.00

0.00

4.35

0.00

0.00

-1.43

1.98

0.00

-6.67

2.56

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-2.22

0.00

12,224

128,511

26,931

6,641

61,000

30

267,350

1,875

100,000

3,270,857

1,515

160,891

22,080

3,999,069

350

100,000

39,588

26,872

319,689

170,000

4,401

500

839,318

187,000

1,399,578

208,972

455,009

416,597

94,890

-

133,000

-

63,700

-

500

3,500

-

70,410

12,050

-

-

4,985

1,464

1,467,116

84,500

-

60,000

-

1,068,824

191,052

3,475

125,000

22,300

-

11,741

-

1,588,340

1,228

3,500

10,090

39,070

2,750

8,754

12,000

122,731

48,723

4,562,532

2,000

371,711

32,258

-

20,000

62,290

-

4,000

74,600

121,000

127,422

500

3,000

4,909

338,763

20,000

30,000

83,776

-

620

194,000

125

67,500

22,880

-

-

-

121

167,342

170,826

3,687,536

4,200

-

1,987,829

251,000

1,684,611

311,830

1,020,000

1,600,700

-

-

6,300

2,000

3,500

711,600

28,350

133,000

10

330,600

13,000

50

101,000

-

9,165,068

945,094

5,700

11,598,436

-

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

0.15

0.13

0.12

0.13

1.34

0.30

0.21

0.72

1.05

1.90

4.70

0.24

0.65

1.48

1.38

2.50

0.30

1.38

0.24

0.16

0.53

0.77

0.57

0.29

0.32

1.68

2.20

0.30

0.11

1.88

0.20

0.20

0.52

0.40

0.00

0.60

0.06

4.57

1.00

0.17

3.64

0.50

0.45

0.47

1.82

0.00

0.14

0.25

0.17

5.00

0.11

0.06

0.00

0.62

0.14

0.65

3.75

0.25

0.11

1.80

0.75

0.12

0.19

0.51

0.10

1.25

0.11

0.39

0.34

0.12

0.11

0.26

10.50

0.14

0.11

0.39

0.17

0.11

1.49

0.49

0.18

0.40

0.21

1.28

0.23

0.26

0.03

0.26

0.38

0.18

0.08

0.24

1.82

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.68

0.73

-0.83

-0.62

0.00

3.23

0.00

3.21

0.00

0.00

0.00

0.00

0.00

0.00

0.00

2.02

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

2.21

0.00

0.00

0.00

0.00

0.00

0.00

0.65

0.00

0.00

0.00

1.63

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

0.77

0.00

4.44

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.05

2.79

1.28

3.88

5,739

-

-

-

-

20,000

24,679

-

-

-

-

-

-

-

-

-

-

-

-

174,726

60,000

46,800

402,300

-

63,308

94,822

327,984

-

43,235

-

-

-

-

-

272,216

-

-

-

-

68,400

-

-

-

-

-

-

19,219

25,000

-

69,000

4,000

-

-

-

-

-

131,625

-

-

-

145,700

-

-

-

-

-

5,000

120,000

-

-

-

-

1,793,500

-

42,750

-

114,217

410,999

-

-

-

-

-

-

-

-

-

-

-

68,185

-

654,038

1,495,619

1,532,580

138,600

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

3.68

0.53

0.30

0.08

0.75

0.25

0.20

1.04

0.15

1.50

0.47

0.08

0.06

0.31

0.55

0.23

0.22

0.06

0.88

0.21

1.13

0.10

0.18

0.19

0.71

0.05

0.86

0.25

0.00

0.00

0.00

2.56

0.00

0.00

0.00

0.00

-1.35

0.00

0.00

0.00

0.00

0.00

0.00

0.00

3.30

-1.64

0.00

0.00

0.00

9.20

0.57

2.21

0.00

0.00

0.00

0.00

-

-

-

22,201

-

212,000

-

-

468,269

-

40,017

30,900

350,000

-

-

342,303

404,298

1,171,800

-

-

-

478,700

1,087,352

167,100

-

-

-

-

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

2.02

2.00

2.47

4.45

1.43

1.20

0.85

1.56

3.85

1.50

1.08

4.10

1.17

3.25

0.81

2.80

0.60

81.15

1.18

6.26

0.98

5.00

0.64

4.50

3.35

5.12

4.79

10.05

0.82

0.54

2.20

1.55

0.81

2.23

2.42

0.88

1.02

1.20

4.60

12.35

1.78

0.81

19.70

6.70

7.25

0.58

1.99

1.38

0.87

0.94

1.85

2.74

4.40

0.57

300.00

5.00

2.25

60.00

7.75

2.45

0.50

5.30

2.00

3.85

0.55

3.96

1.00

0.00

0.00

-0.67

0.00

0.00

0.00

-1.89

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.69

0.00

0.85

0.00

0.00

0.00

0.00

0.00

0.00

-1.35

0.00

-0.50

2.50

0.00

0.00

-3.13

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.20

0.00

1.25

3.68

0.00

0.00

1.75

0.00

-2.13

0.00

0.00

-2.12

1.48

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

3.77

2.86

297,571

-

-

1,366,103

-

-

-

37,185

-

47,993

-

-

-

-

-

-

13,378,030

-

286

-

-

8,884

-

-

-

1,377,351

-

1,681,461

5,826,531

2,953,749

156,457

90,646

-

-

-

200,000

-

-

-

3,070,132

-

28,827,346

3,786,841

-

-

7,976,784

-

10,000

-

-

1,438

8,306,035

-

-

-

-

-

-

119,475

-

3,710

-

-

-

1,456,272

3,942,579

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

0.12

0.00

0.00

0.39

0.24

0.00

0.00

0.21

0.00

0.00

0.71

0.11

0.06

0.11

6.90

0.00

0.00

0.66

0.22

0.00

0.00

0.91

0.00

0.36

0.00

0.07

`

0.31

0.00

0.42

0.00

0.11

0.00

0.00

0.82

0.67

1.30

0.00

0.00

0.40

0.35

0.47

0.10

0.00

0.64

0.00

0.00

0.00

0.00

0.00

0.00

0.00

6.12

0.00

0.00

-2.74

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

8.43

0.00

0.00

0.00

0.65

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

3.55

0.00

0.00

0.00

0.79

400,000

-

-

171,258

100,000

-

-

80,000

-

-

78,515

73,300

50,400

365,600

603

-

-

5,000

51,875

-

-

11,394

-

210,268

-

48,308

-

16,413

-

10,000

-

19,000

-

-

24,520

197,100

5,000

-

-

550,000

127,320

32,500

30,000

-

145,000

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

29.00

0.00

380.00

188.00

106.00

98.00

196.00

0.00

40.50

0.00

21.00

290.00

79.00

780.00

68.00

90.00

190.00

44.50

1,440.00

365.00

0.00

31.00

50.00

1,140.00

0.00

31.00

41.00

130.00

48.50

0.00

0.00

59.00

39.00

240.00

880.00

75.00

100.00

57.00

22.00

75.00

158.00

300.00

89.00

0.00

1,680.00

124.00

320.00

52.00

380.00

380.00

0.00

460.00

34.00

0.00

43.50

710.00

2,500.00

0.00

33.00

-1.69

0.00

0.00

-1.05

0.00

0.00

3.16

0.00

2.53

0.00

0.00

0.00

0.00

0.00

1.49

0.00

0.00

3.49

2.86

7.35

0.00

-3.13

1.01

0.00

0.00

0.00

0.00

0.00

-2.02

0.00

0.00

-1.67

0.00

0.00

0.00

0.00

0.00

3.64

2.33

2.74

0.00

0.00

2.30

0.00

0.00

0.00

0.00

0.00

0.00

2.70

0.00

0.00

0.00

0.00

-5.43

0.00

0.00

0.00

1.54

710,750

-

242,712

78,801

91,873

7,000

105,543

-

4,035,441

-

19,903

100

33,966

4,546

298,100

310,092

15,064

5,197

5

101,611

-

25,700

716,335

4,797

-

465,200

4,100,558

2,194

1,000

-

-

247,500

7,700

915

52,754

91,000

36,437

37,400

282,000

371,060

11,869

2,065

1,868,200

-

1,000

2,431,004

7,000

74,736

300,784

3,065

-

1,221,336

566,775

-

248

30,745

472,583

-

6,076,139

KUWAIT

Company Name Lt Price % Chg Volume

9Gulf TimesThursday, July 14, 2016

BUSINESS

Apple IncMicrosoft Corp

Exxon Mobil CorpJohnson & JohnsonGeneral Electric Co

Jpmorgan Chase & CoProcter & Gamble Co/The

Verizon Communications IncWal-Mart Stores Inc

Pfizer IncCoca-Cola Co/The

Chevron CorpVisa Inc-Class A Shares

Home Depot IncWalt Disney Co/The

Merck & Co. Inc.Intel Corp

Intl Business Machines CorpCisco Systems Inc

Unitedhealth Group IncMcdonald’s Corp

3M CoNike Inc -Cl B

Boeing Co/TheUnited Technologies CorpGoldman Sachs Group Inc

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

Caterpillar IncTravelers Cos Inc/The

97.13

53.56

94.20

123.07

32.33

62.77

85.80

55.83

73.36

36.30

45.64

105.90

77.34

133.40

100.06

59.59

34.95

157.55

29.66

141.08

122.33

178.99

57.92

129.76

104.97

157.15

63.02

65.97

79.25

118.12

-0.30

0.65

-0.79

0.12

0.20

-0.68

0.05

0.65

0.12

0.15

0.13

-0.82

-0.18

-1.07

-0.14

-0.01

0.01

0.32

0.17

0.87

0.07

-0.10

-0.24

-0.80

0.45

0.15

0.03

0.05

-0.69

0.02

10,248,937

8,431,268

4,321,786

1,905,568

11,441,521

7,183,579

2,909,214

5,720,388

2,556,138

5,324,156

3,696,053

2,974,461

2,474,068

2,099,471

2,277,065

3,047,577

11,828,246

1,217,571

6,196,786

1,358,981

1,494,727

638,024

4,048,273

1,569,547

1,035,564

2,106,996

1,506,156

613,358

2,779,190

343,720

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

#N/A!

1,684.00

277.80

4,080.00

183.60

3,698.00

229.10

1,030.00

3,602.00

992.50

1,477.00

169.40

144.30

282.30

599.00

837.00

1,593.00

1,301.00

874.50

4,885.00

2,475.00

2,507.00

230.30

646.50

4,405.50

491.10

502.00

2,118.50

2,088.00

177.80

746.50

2,460.50

645.00

1,421.00

7,550.00

9,055.00

1,286.00

2,581.00

1,553.00

968.00

8,610.00

202.40

5,130.00

1,104.00

1,402.00

472.50

1,073.00

338.30

2,586.00

55.32

185.80

1,038.00

328.40

3,088.00

184.90

280.80

408.10

3,543.00

2,878.00

804.50

744.00

4,008.00

475.00

1,238.00

533.00

187.00

1,646.00

275.30

1,936.00

1,463.00

1,120.00

327.30

345.00

2,123.50

6,695.00

2,228.00

1,462.00

1,543.00

232.70

3,583.00

959.50

1,279.00

2,349.00

402.65

614.50

4,814.50

455.70

997.70

2,620.00

404.80

145.10

542.00

945.00

383.00

4,499.00

2,800.00

1,115.00

1,188.00

504.00

812.20

2,035.00

581.50

0.00

0.24

-0.79

0.87

0.88

-0.27

0.59

1.58

0.45

-0.75

-1.47

-0.18

-0.69

-0.25

-0.22

1.39

0.95

0.39

-0.85

0.62

1.43

-2.64

0.04

0.23

-0.03

-0.45

0.50

-0.56

-0.93

-2.31

3.11

-1.05

0.00

0.71

0.33

-0.66

0.16

-0.58

0.32

-0.10

1.59

-0.93

-1.54

1.05

-0.28

-0.42

1.23

1.20

-2.05

-1.65

-1.64

-1.05

1.51

0.78

-3.04

-0.64

-0.44

0.23

-0.07

-0.92

0.13

-0.11

-0.36

-0.32

-0.37

0.54

0.43

-3.06

0.36

-0.27

-1.93

-0.58

-0.29

-0.49

1.06

1.97

0.00

0.19

2.29

0.59

-0.36

6.32

0.82

-1.02

-0.65

-0.52

-1.32

-0.58

-2.67

-2.06

-2.32

0.18

0.00

0.31

0.51

-0.71

-0.98

1.02

3.70

-2.20

1.55

0.00

0.00

2,963,476

3,595,331

534,515

10,241,385

639,687

79,420,626

2,075,325

2,809,093

1,006,996

2,006,644

18,378,029

30,452,860

7,862,198

10,216,447

2,448,601

3,000,991

3,362,873

3,424,407

2,018,700

848,713

569,912

5,798,435

2,985,859

3,911,002

2,221,293

3,354,240

6,287,546

7,390,872

25,781,230

7,818,652

5,658,208

52,808,327

3,877,757

1,588,093

758,927

8,727,022

306,072

2,508,886

3,875,571

136,586

10,906,016

721,540

7,664,286

1,755,242

1,929,213

1,202,966

9,416,471

612,515

187,113,024

24,645,988

2,979,138

13,200,034

579,259

17,246,254

2,900,002

13,645,869

483,445

948,851

1,576,416

1,536,436

2,692,857

38,292,787

592,335

6,429,569

98,862,619

9,514,744

7,628,838

1,277,179

3,385,999

2,034,688

6,726,018

4,539,191

8,246,573

227,077

2,861,284

5,213,182

507,324

20,514,642

695,899

1,626,821

7,103,031

868,574

20,162,670

5,918,414

3,581,202

42,226,480

10,626,101

1,395,145

13,335,831

82,826,893

6,364,497

957,158

13,777,935

3,701,110

1,387,661

1,310,086

3,275,027

5,431,338

10,081,109

818,641

2,190,364

-

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

9,432.00

1,300.00

4,007.00

2,456.50

1,516.50

1,893.00

458.20

300.10

2,914.50

5,823.00

438.10

8,730.00

979.10

390.40

18,800.00

935.80

5,628.00

3,186.00

6,764.00

-1.19

2.08

0.91

-5.39

3.02

1.45

3.45

2.32

-1.87

0.34

2.72

-1.82

1.58

2.04

-0.16

2.84

3.40

-1.48

-0.72

1,214,900

6,153,300

1,430,400

4,225,800

2,614,400

5,374,000

26,086,000

64,502,000

1,885,600

1,179,100

10,725,000

1,736,500

13,725,300

11,282,000

454,700

5,275,000

19,459,400

6,786,400

1,289,300

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 Insurance

Mazda Motor CorpKomatsu Ltd

West Japan Railway CoMurata Manufacturing Co Ltd

Kansai Electric Power Co IncDenso Corp

Sompo Japan Nipponkoa HoldinDaiwa House Industry Co Ltd

Jx Holdings IncNippon Steel & Sumitomo Meta

Suzuki Motor CorpNippon Telegraph & Telephone

Ajinomoto Co IncMitsui Fudosan Co Ltd

Ono Pharmaceutical Co LtdDaikin Industries Ltd

Bank Of Yokohama Ltd/TheToray Industries IncAstellas Pharma Inc

Bridgestone CorpSony CorpHoya Corp

Sumitomo Mitsui Trust HoldinJapan Tobacco Inc

Osaka Gas Co LtdSumitomo Electric Industries

Daiwa Securities Group IncSoftbank Group Corp

Mizuho Financial Group IncNomura Holdings Inc

Daiichi Sankyo Co LtdFuji Heavy Industries Ltd

Ntt Docomo IncSumitomo Realty & Developmen

Sumitomo Metal Mining Co LtdOrix Corp

Asahi Group Holdings LtdKeyence Corp

Nidec CorpIsuzu Motors Ltd

Unicharm CorpShin-Etsu Chemical Co Ltd

Smc CorpMitsubishi CorpNintendo Co Ltd

Eisai Co LtdSumitomo Corp

Canon IncJapan Airlines Co Ltd

1,180.50

5,190.00

1,011.50

453.20

4,377.00

1,428.00

295.60

1,235.00

3,128.00

2,738.50

28,145.00

2,696.00

1,433.50

4,527.00

801.50

397.30

751.90

1,767.50

493.70

497.60

520.00

17,180.00

16,520.00

4,870.00

6,573.00

1,781.50

7,793.00

3,643.00

1,491.50

1,245.50

5,942.00

1,155.00

1,430.00

1,899.50

6,577.00

12,250.00

969.00

3,757.00

2,897.50

2,933.50

399.80

2,092.00

3,042.00

4,870.00

2,550.00

2,356.00

4,003.00

8,828.00

0.00

936.60

1,651.50

3,428.00

3,074.00

3,780.00

347.40

4,369.00

402.80

1,390.50

598.90

5,870.00

160.30

400.60

2,684.50

3,788.00

2,805.00

2,741.00

1,154.50

1,409.00

3,402.00

73,700.00

8,234.00

1,316.50

2,152.50

6,228.00

25,550.00

1,926.00

21,830.00

5,912.00

1,078.50

2,963.50

3,388.00

1.77

3.45

1.10

3.49

-1.11

3.18

0.89

1.77

4.34

3.50

1.24

0.41

4.22

3.31

3.54

3.22

1.54

-2.08

1.92

5.29

4.00

2.29

-0.27

-0.55

-0.66

3.01

0.00

1.56

0.40

2.01

-0.60

2.76

3.89

1.25

-0.30

5.65

-0.83

2.73

2.39

0.77

-0.07

1.23

5.31

-0.86

0.67

3.27

-0.47

1.60

0.00

-0.13

-0.96

1.63

-2.13

2.13

4.42

0.25

1.72

2.62

3.37

0.43

3.75

3.49

0.24

4.01

-0.95

1.56

3.96

1.33

-1.93

-0.20

2.54

2.09

-1.13

0.10

1.96

3.55

-4.42

-0.17

2.86

0.51

4.50

6,201,400

1,895,400

16,284,700

28,926,000

3,009,400

6,439,000

17,125,000

8,022,000

18,018,800

7,715,900

765,800

2,699,000

7,149,000

3,616,300

6,841,800

19,352,600

6,645,000

4,129,800

11,470,900

169,339,200

16,365,700

1,146,500

657,500

1,850,600

817,400

5,080,100

938,800

3,924,500

3,294,200

9,383,100

1,631,700

8,432,400

16,242,600

7,113,900

1,166,100

2,383,800

3,145,200

2,383,400

2,250,500

2,085,500

12,556,900

4,716,700

6,948,700

5,423,700

2,527,200

6,781,000

2,543,700

1,372,900

-

9,901,000

10,774,200

3,991,100

12,140,700

2,068,900

36,423,000

4,326,600

5,934,000

4,354,300

16,753,000

4,449,700

306,224,000

33,792,500

2,620,400

6,595,400

5,639,500

2,411,000

7,177,000

10,714,400

2,064,600

215,700

2,158,000

4,673,000

2,329,900

1,511,600

321,700

6,091,200

10,446,900

972,400

6,233,300

4,780,500

4,468,000

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 Hldgs Intl

China Mobile LtdChina Overseas Land & Invest

China Petroleum & Chemical-HChina Resources Beer Holdin

China Resources Land LtdChina Resources Power Holdin

China Shenhua Energy Co-HChina Unicom Hong Kong Ltd

Citic LtdClp Holdings Ltd

Cnooc LtdCosco Pacific Ltd

Esprit Holdings LtdFih Mobile Ltd

Hang Lung Properties LtdHang Seng Bank Ltd

Henderson Land Development

2.76

30.45

3.11

5.10

4.62

24.05

12.00

85.95

4.53

5.36

17.04

21.55

91.30

25.80

5.78

17.60

19.22

11.18

15.10

7.97

11.50

79.20

9.82

7.95

5.78

2.54

15.98

133.40

44.15

0.36

-0.81

-0.64

0.39

0.65

1.05

2.04

1.42

0.00

1.32

1.07

-0.92

0.22

0.78

1.94

1.38

0.10

-0.18

1.34

0.13

0.00

-0.56

1.55

1.66

1.05

-1.17

-0.75

0.53

0.11

15,973,750

2,921,474

371,568,887

31,975,385

11,206,118

11,855,520

4,884,911

11,973,820

20,921,730

394,062,152

60,175,398

3,664,075

20,556,165

21,377,044

87,914,876

6,956,886

13,229,110

9,693,665

38,439,692

41,857,590

8,908,652

3,948,373

51,379,341

2,613,799

1,876,630

3,038,210

4,097,480

1,678,977

2,150,827

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

13.98

188.20

48.65

0.00

4.31

3.74

41.40

8.12

5.41

34.95

72.15

12.94

103.00

89.35

181.20

48.55

-0.85

0.75

0.52

0.00

0.47

-4.10

1.22

0.25

0.37

1.45

1.19

-0.77

0.88

0.06

0.17

2.32

9,621,419

5,033,633

26,373,435

-

275,035,383

18,202,686

5,024,203

15,835,824

70,153,149

43,087,372

5,832,795

5,646,525

7,100,884

1,209,176

11,209,328

5,514,500

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

457.00

1,146.70

573.95

163.55

3,434.65

506.55

357.75

72.05

481.10

2,493.10

778.55

227.70

1,008.75

125.05

161.85

234.15

157.65

4,321.40

1,464.45

1,648.45

1,551.40

775.00

247.10

1,193.80

1,104.40

106.60

261.15

1,330.45

927.45

135.80

3,245.90

1,197.75

720.00

4,628.50

391.85

3,615.60

324.05

514.60

166.50

23,239.55

363.70

545.60

141.50

160.15

2,657.10

556.85

1,009.50

260.60

217.30

1,617.20

0.54

-0.60

0.55

2.35

-1.51

-0.13

4.51

-0.89

-0.66

1.14

-0.57

0.44

0.53

-0.95

-2.85

2.74

-0.41

-1.12

-0.73

-1.51

-1.06

1.49

-0.52

1.47

-1.85

2.21

-0.21

-0.25

0.23

0.41

-0.07

-0.37

-0.19

-0.24

3.60

0.54

2.21

-0.21

2.71

-0.92

0.11

-2.62

2.31

-0.37

0.20

-0.74

-1.07

-0.08

-0.32

-0.18

1,038,610

1,867,186

1,139,915

64,082,935

260,088

1,251,396

15,472,665

4,082,241

6,381,967

1,107,367

3,872,365

20,389,181

3,830,056

16,421,064

6,387,893

12,776,094

3,255,020

449,034

798,173

898,768

1,482,953

2,121,747

4,655,057

2,769,919

1,965,301

7,023,691

30,073,396

3,114,482

703,426

22,319,797

267,078

1,869,398

3,435,995

74,556

2,952,540

205,364

3,812,205

1,362,513

20,802,214

11,588

1,516,239

4,051,520

14,734,643

6,576,086

161,152

6,664,400

1,477,818

1,430,356

9,377,844

215,331

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

18,333.23

2,147.34

5,011.85

14,434.62

46,384.80

53,805.47

6,670.40

4,335.26

9,930.71

8,473.90

16,231.43

1,300.26

21,322.37

5,470.31

1,336.28

27,815.18

8,519.50

2,910.65

26,133.45

5,133.93

-14.44

-4.80

-10.97

-43.05

-47.90

-450.94

-10.29

+3.88

-33.36

-32.10

+135.78

+14.53

+97.63

+37.09

-2.68

+7.04

-1.55

+8.83

+53.41

+34.40

Doha Securities MarketSaudi Tadawul

Kuwait Stocks ExchangeBahrain Stock Exchage

Oman Stock MarketAbudhabi Stock MarketDubai Financial Market

10,319.74

6,691.23

5,386.10

1,174.44

5,915.46

4,574.13

3,483.94

+178.95

+65.45

+8.35

+7.73

+66.57

+31.39

+46.43

“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

Traders work at the Frankfurt Stock Exchange. The DAX 30 dipped 0.3% yesterday.

European stock markets lose steam; London down 0.2%AFPLondon

This week’s rally in global equi-ties petered out yesterday, with US stocks fl at after having set

record highs and Europe’s main indices ending mixed.

In late morning trading on Wall Street, the Dow Jones Industrial Aver-age and the broad-based S&P 500 were essentially fl at after both set new clos-ing records the previous day.

An optimistic tone had fi lled trading fl oors after US data Friday showed the world’s No 1 economy created far more jobs than expected last month.

At the same time, the rapid appoint-ment of a new prime minister to lead Britain out of the European Union also helped reassure markets.

London’s benchmark FTSE 100 in-dex ended the day down nearly 0.2% as British Prime Minister David Cameron bowed out following Britain’s vote to quit the EU.

Theresa May steps up from her role of interior minister in the Conserva-tive government to take over as pre-mier.

She will have to quickly assemble a team to negotiate Britain’s exit from the EU and secure trade deals with other major economic partners.

In the eurozone, Frankfurt’s DAX 30 dipped 0.3% and the Paris CAC 40 eked out a gain of 0.09%.

“The strong rally that started the week has run out of steam as expecta-tions of stimulus measures were tem-pered” in China and Japan, said CMC Markets analyst Jasper Lawler.

While many analysts see concerns

about Brexit easing, Germany yester-day issued a 10-year bond at negative interest rate for the fi rst time, an in-dication that many investors are still worried about the future.

The 10-year German government bond or “Bund” is regarded as one of the safest investments and investors often turn to it as a “safe haven” dur-ing crises.

It is the fi rst time that investors have accepted negative returns in the fi rst issue of a bond, meaning they will pay for the privilege of owning rock-solid Bunds.

But investor anticipation is build-ing ahead of a Bank of England meeting Thursday that could result in increased support for the British economy.

Markets expect the Bank to cut its main interest rate to a new record-low – below 0.5%.

BUSINESS

Gulf Times Thursday, July 14, 201612

Japan bond demand drops to year-low after yields bounce off 0%BloombergTokyo

Japan’s international bond investors are likely to shift from the nation’s longest-dated debt to shorter securities to take advantage of currency swap agreements that boost returns, according to Barclays Plc.Foreign investors sold bonds with tenors longer than 10 years in June as yields on the debt approached zero, said Naoya Oshikubo, a rates strategist at Barclays in Tokyo. Now they want short-term notes combined with cross-currency basis swaps that allow dollar-based investors to borrow yen at a discount and turn negative yields positive, he said.An auction of 30-year bonds on Tuesday drew the weakest demand in a year.“They appear to have earned capital gains from longer-dated bonds last month and are likely to steer away from these sectors where yields approach their upper bound around zero,” Oshikubo said. “They are now likely to focus on shorter maturities.”While Japan’s two-year note yielded minus 0.345% as of Tuesday, dollar-wielding global investors are able to use favourable cross-currency basis-swap rates to turn that yield into a fixed coupon equivalent of about 1.5%.Yields on 40- and 30-year bonds were at 0.13% and 0.135%, respectively, in Tokyo, after coming within five basis points of zero on July 6. The securities rallied for the past five weeks.The government’s latest sale of 30-year bonds drew a bid-

to-cover ratio of 2.64, down from 3.42 at the previous auction of the maturity and the lowest figure since July 2015.Foreign investors aren’t the only ones who may be losing their appetite for low-yielding long-term debt. Japan’s life insurers could reduce purchases, providing a floor on yields above zero, said Katsuyuki Tokushima, the chief fixed-income analyst at NLI Research Institute, a unit of Japan’s largest insurer Nippon Life Insurance Co.“Insurers will buy less and less of these maturities as their core investment,” Tokushima said. “They had to look for returns in super-long JGBs as interest rates were not rising. It is questionable if they would continue to buy even when yields fall into negative territory.”In April, the nation’s biggest life insurers said they would be seeking returns in risk assets as the Bank of Japan’s stimulus depresses yields.The central bank’s two-day policy meeting ending July 29 may determine whether long-term yields stay positive, according to Barclays’s Oshikubo. Prime Minister Shinzo Abe’s announcement on Monday that he will present a fiscal stimulus plan spurred speculation that the BoJ will expand monetary easing.“Lingering expectations for more BOJ stimulus this month will keep super-long yields near zero but stop short of falling into the negative,” Oshikubo said. “They lack forces guiding yield below zero with insurers and foreigners staying away at current levels.”

‘Overvalued’ Aussie seen to underperform other commodity currenciesBloombergSydney

The Australian dollar’s top forecaster says the rela-tively high interest rates

normally seen as strength of the currency could turn out to be its weakness in coming months.

The yield premium that Aus-tralian debt off ers over devel-oped market peers has helped to fuel investor appetite for the lo-cal dollar, but that might change with the Reserve Bank of Aus-tralia having more room than its counterparts to lower its bench-mark, according to Unicredit. The “overvalued” Aussie will underperform other commodity currencies such as the Canadian dollar and Norway’s krone, Lon-don-based Vasileios Gkionakis head of global foreign-exchange strategy at the fi rm said.

“The margin for conventional monetary policy easing is much higher in Australia compared to Canada and Norway,” Gkionakis said in a telephone interview last week. “So from that respect, I can easily see the markets pric-ing more rate cuts by the RBA compared to Bank of Canada and the Norges Bank.”

With its benchmark interest rate at 1.75%, the RBA can bring to bear the most conventional mon-etary ammunition after its coun-terpart in New Zealand among developed-market central banks. The prospect of using that in the event of global uncertainty will

cap gains for the currency, ac-cording to Gkionakis. He expects the Aussie to be little changed, oscillating around the 75 US cents mark for the rest of the year.

That is still more bullish than the median forecast of 71 cents by the end of the year. The Aus-sie bought 75.86 cents in London on Tuesday. It has risen 4.1% in 2016, on course for its fi rst annual gain in four years. The currency climbed to a 10-month high of 78.35 April 21 before the RBA un-expectedly cut rates in May.

The central bank will prob-ably cut its benchmark cash rate, from the current record low of 1.75%, once in 2016 with employment data outweighing concerns over China growth and infl ation, he said. Swaps trad-ers are pricing in a 75% chance of RBA reductions by the end of the year.

Five-year yields were as much as 69 basis points higher in Aus-tralia than they were in the US last week, providing the biggest premium since May. Futures sig-

nal 29% odds the Federal Reserve will raise interest rates this year, from 76% at the start of June.

“We are constructive on risk in general,” Gkionakis said. “With the Fed probably putting off rate increases, or at least slowing the pace of rate increase, the hunt for yield is going to remain in place just as long as Brexit does not balloon into an event that causes global repercussions.”

Unicredit prefers the Cana-dian dollar and krone over the Aussie because the two are “un-

dervalued” according to criteria including terms of trade and real rate diff erentials. It still favours the yen, seeing further appre-ciation possible while Gkionakis doesn’t expect the Bank of Ja-pan to intervene unilaterally to weaken it.

Gkionakis anticipates the Aussie will be supported at re-cent lows at around 72 US cents, though a break below that could “accelerate falls.” At the upper end, he sees RBA jawboning at around 2016 high of 78 cents.

The transition away from China-led growth is already underway in the economy and infl ation, while remaining be-low target, should start to push higher due to the “base eff ect,” he said. The central bank’s last rate reduction in May came after offi cial data showed core con-sumer-price infl ation slowed to 1.7%, the weakest on record, and forecasters are predicting the next quarterly release on July 27 will enable another policy shift.

Australia’s unemployment rate currently stands at 5.7% and, although payrolls grew by a better-than-expected 17,900 positions in May, that gain was entirely due to growth in part-time jobs. June fi gures are sched-uled to be released on July 14.

“The wild card for me is do-mestic employment dynamics,” Gkionakis said. “If the unem-ployment rate picks up, you’ll see the market pricing in more rate cuts, which will have a nega-tive eff ect on exchange rates.”

The Australian dollar’s top forecaster says the relatively high interest rates normally seen as strength of the currency could turn out to be its weakness in coming months

BUSINESS13Gulf Times

Thursday, July 14, 2016

Emerging equity prices extend gains

ReutersLondon

Emerging stocks touched new eight-month peaks yesterday and dollar bond

yield premia versus Treasuries were just off one-year lows amid a worldwide investor dash for higher-return assets.

Expectations of a British in-terest rate cut this week and ad-ditional Japanese stimulus are lifting global equities, while Wall Street has hit record highs as US rate cuts have been priced out for 2016.

While US and German yields have risen off recent lows, Ger-many’s fi rst zero-coupon bond sale reinforces the picture of crushingly low returns on main-stream fi xed income.

“There is now an embedded need for large real money in-vestors to extend fixed income duration in their portfolios, which may filter through to...emerging markets as well,” Citi told clients.

Debt from Poland, South Af-rica and Mexico, included in the $2tn WGBI global bond index, was most likely to see infl ows, the bank added.

Emerging equities rose for the fi fth day in a row, having rallied 8% from post-Brexit vote lows.

The premium demanded by investors to hold sovereign dol-lar debt over Treasuries widened 3 basis points to 381 bps, just off June 2015 lows.

Average local currency yields also rose slightly after falling to 6.22%, the lowest since Febru-ary 2015.

Currencies such as the rand, rouble and lira slipped 0.3% against the dollar.

In Asia, the Malaysian ring-git pared losses after a surprise rate cut — the fi rst in seven years — that should draw foreign cash back into local bonds.

The Chinese onshore yuan fi rmed off 5-1/2-year lows af-ter a fi rmer fi x and traders cited central bank intervention on off -shore yuan markets.

Analysts noted authorities had stepped up yuan defence in recent days.

“It looks to us that China’s central bank intends to limit the upside of dollar-CNY and dol-lar-CNH for the time being, as a fast depreciation in CNY could trigger massive short CNY/CNH positions,” Commerzbank told clients.

In Europe, shares in Polish bank Pekao slumped 4% after Italy’s Unicredit offl oaded a 10% stake in it and is seen as possibly selling its remaining 40% own-ership in Pekao.

The zloty tumbled 0.3% to the euro.

Neighbouring Hungary’s bourse slipped 0.6% a day after hitting nine-year highs while bond yields rose slightly after 5-10 bps falls on Tuesday when the central bank announced moves to push banks’ cash out of three-month deposits

“The announced changes will likely incentivise banks to park liquidity in short-dated government securities in lieu of the 3-month deposit facil-ity, helping the shorter-dated segment of the rates and bond curves to perform,” Societe Generale said.

Strong Wall Street and stimulus hopes lift Asia boursesAFPHong Kong

Asian markets rallied again yesterday with investors tak-ing heart from another record

close on Wall Street and talk of cen-tral bank stimulus, while China re-leased better than expected export figures for June.

Japan’s Nikkei was once again the stand-out market, soaring on the back of a weaker yen and wiping out almost all the losses suff ered after the shock of Britain’s June 23 vote to leave the Euro-pean Union.

An optimistic tone has fi ltered through trading fl oors all week, after US data on Friday showed the world’s number one economy created far more jobs than expected last month.

A landslide win for Japan’s ruling party at the weekend and the sooner-than-expected choice of a replacement for Britain’s David Cameron as prime minister has also lifted confi dence.

Australia’s ruling party was also confi rmed at the weekend as winners

of a general election held eight days earlier.

The vote in Japan has fanned expec-tations the country’s leaders will push through a giant stimulus programme to reignite stuttering growth, with reports saying it could be as much as ¥10tn.

The prospect of more cash fl ooding the Japanese market, as well as the US jobs fi gures, has sent the yen tumbling around 4% since Thursday — boosting exporters on Tokyo’s exchanges.

In afternoon business, the dollar eased to ¥104.30 from ¥104.66 late in New York but remains well up from the ¥103.12 earlier Tuesday in Asia.

The dip in the dollar came after Ja-pan’s top government spokesman re-jected a report saying the government was considering so-called helicopter money to stimulate growth.

The term tends to refer to stimu-lus that would be pumped straight into the economy — such as into people’s bank accounts — rather than through the banking system by means of asset purchases and other easing measures.

The pound climbed again, to $1.3291 from $1.3249 although traders are awaiting Thursday’s Bank of England policy meeting that is expected to see it cut interest rates for the fi rst time in more than seven years to cope with the fallout of Britain leaving the EU.

The Nikkei index ended up 0.8% to fi nish just short of its June 23 close, be-fore it dived almost 8% in reaction to the Brexit vote.

Hong Kong ended up 0.5% and Shanghai was 0.4% higher.

Soon after the markets closed in China, the government said exports rose 1.3% in yuan terms in June, better than the 0.3% forecast in a survey by Bloomberg News and up from May.

However, imports fell more than expected, indicating weak demand at home.

Customs attributed the fall in im-port values to weakening commodity prices.

Sydney and Seoul each added 0.7%, while Singapore, Manila and Bangkok also posted healthy gains.

“Japan’s stimulus package and a massive wave of positive risk senti-

ment have spurred Wall Street to record highs,” said Stephen Innes, sen-ior trader at OANDA Asia Pacifi c.

“Along with the stimuli, diminishing political uncertainty in the UK, Japan and Australia has added supportive foundation to this current risk rally.”

The advances came after the Dow and S&P 500 hit fresh records in New York while the tech-rich Nasdaq closed above 5,000 for the first time this year.

On oil markets, both main contracts retreated after soaring almost 5% on Tuesday in reaction to an Opec fore-cast that predicted an oversupply on world markets would ease this year.

West Texas Intermediate was down 1.5% at $46.12 and Brent slipped 1.6% to $47.68.

But in early European trade, inves-tors began taking a breather, with Lon-don and Frankfurt each down 0.2% and Paris 0.1% off .

In Tokyo, the Nikkei 225 up 0.8% at 16,231.43 points; Hong Kong — Hang Seng up 0.5% at 21,322.37 points and

Shanghai — Composite up 0.4% at 3,060.69 points at the close yesterday.

Pedestrians walk past a stock prices board flashing in Tokyo. The Nikkei 225 closed up 0.8% to 16,231.43 points yesterday.

Sensex rises marginally; rupee ends one-month highBloombergMumbai

Indian stocks swung between gains

and losses after the benchmark gauge

advanced to an 11-month high. Energy

companies and metal producers climbed

while industrials declined.

Oil and Natural Gas Corp (ONGC)

climbed to a six-month high as the govern-

ment is said to have allowed refiners to

increase kerosene prices every month, a

move that would ease the subsidy burden

borne by the largest explorer.

A gauge of energy companies climbed

to an 11-month high. Tata Steel was the

best performer on the S&P BSE Sensex.

Larsen and Toubro (L&T) and Maruti Su-

zuki India dropped more than 1% each.

The Sensex closed little changed after

changing direction at least 15 times. The

gauge has risen 21% from a low in Febru-

ary, fitting the definition of a bull market,

helped by forecasts for above-normal

rain after back-to-back droughts and a

recovery in company earnings. The index’s

relative strength index has risen to 70, a

level some investors see as a signal to sell,

and its valuation is the most expensive in

five years.

“We see some consolidation and profit-

booking happening at current levels as

the rally has been quick,” DK Aggarwal,

chairman of SMC Investments in New

Delhi, said by phone. “Investors are focus-

ing on the next session of Parliament and

the results season.

Those events will set the market’s tone

in the near term.”

The earnings season gets underway to-

day with Tata Consultancy Services (TCS),

the largest software exporter, reporting

results for the three months ended June.

Infosys, the second-biggest, and Reliance

Industries, owner of the world’s largest

refining complex, will report on Friday.

About 66% of the companies in the

NSE Nifty 50 Index posted March-quarter

results that beat or matched estimates,

compared with 52% in the previous three

months. Operating profits climbed about

10%, the biggest increase since September

2014, reversing declines in four of the

previous five periods, data compiled by

Bloomberg show.

Foreign funds bought $217mn of shares

since July 1, extending a four-month

stretch of net inflows that was the longest

in more than a year. They have plowed

more than $2bn into equities in India,

Indonesia, South Korea, Philippines, Thai-

land and Taiwan this week as the UK’s vote

to leave the European Union has bolstered

prospects for stimulus in major econo-

mies, boosting demand for riskier assets.

The Sensex trades at 16.6 times

projected 12-months profits, versus a five-

year average of 14.3. The MSCI Emerging

Markets Index trades at 12.2 times.

Meanwhile the rupee closed at one-

month high against the US dollar, while

10-year bond yield fell to a fresh three-year

low, yesterday.

The global turn in sentiment towards

emerging market economies helped the

currency. Hopes that the new governor of

the Reserve Bank of India may be more in-

clined to cut rates also helped sentiment.

The rupee closed higher in 11 out of 15

trading sessions while the 10-year bond

yield closed lower in 15 out of 21 trading

sessions.

The currency closed at 67.06—a level

last seen on June 10, up 0.20% from its

previous close of 67.18. The local currency

opened at 67.11 a dollar and touched a high

of 67.02—a level last seen on 13 June.

India’s 10-year bond yield closed at

7.284%—a level last seen on June 19,

2013— compared with Tuesday’s close of

7.337%. It opened at 7.337% and touched

a low of 7.282%, a level last seen on June

19, 2013.

According to a Bloomberg report,

Narendra Modi and Arun Jaitley may meet

to take call on next governor in next few

days. Former deputy governors Rakesh

Mohan, Subir Gokarn, the chairman of the

NITI Ayog Arvind Panagariya and current

deputy governor of RBI Urjit Patel have

been touted as contenders.

Most Asian currencies closed higher

after Malaysia cut rates and China’s trade

data beat analysts’ estimates. Malaysia

overnight policy rate was cut to 3% from

3.25%, while China’s exports grew 1.3%

year-on-year in yuan terms in June, beat-

ing +0.3% estimates, Bloomberg reported.

Philippines peso was up 0.4%, Malay-

sian ringgit 0.38%, Indonesian rupiah

0.26%, South Korean won 0.15%, Thai baht

0.14%, Taiwan dollar 0.06%, Singapore dol-

lar and China off shore gained 0.05% each.

However, Japanese yen fell 0.1%.

The government will issue Wholesale

Price Index (WPI)-based inflation data for

June on July 14. According to Bloomberg

analyst estimates, WPI will be at 1.3% in

June compared with 0.79% in May.

India’s factory output rose unexpected-

ly in May and retail inflation quickened for

the fourth straight month in June, reduc-

ing the chances of a rate cut by RBI in its

monetary policy review in August, the last

under governor Raghuram Rajan.

So far this year, the rupee is down 1.34%,

while foreign institutional investors have

bought $3.17bn in equity and sold $1.73bn

in debt markets.

Top rupee forecaster sees record low by year-endBloombergMumbai

The top forecasters for the rupee aren’t convinced the currency can sustain its rebound from the

brink of a record low in February.The currency will decline to an un-

precedented 69.50 per dollar by the end of the year, 3.5% weaker than its close in Mumbai yesterday, accord-ing to Kotak Mahindra Bank, which had the most accurate estimates in Bloomberg’s quarterly rankings. Credit Agricole CIB, placed second, predicts a slide to 70.

While Finance Minister Arun Jait-ley said India stood out as a safe ha-ven after Britain’s decision to exit the European Union, investors are anxious about knock-on eff ects on the conti-nent and the global economy.

The UK’s share in India’s overseas shipments is 3.5% and the rest of the EU accounts for about 13.5%, accord-ing to Nomura Holdings. Exports from Asia’s third-largest economy have fall-en for 18 straight months.

“The pressure we are seeing on the rupee is on account of what is hap-pening across the world,” said Phani Shankar, senior executive vice-pres-ident for treasury at Kotak Mahindra Bank in Mumbai. “There’s a fair bit of uncertainty post Brexit and there is a bit of a cloud over its consequences for some of the Indian exporters.”

The rupee sank to 68.7875 a dol-lar in February, near an all-time low of 68.8450 seen in 2013. The currency, which rose 0.2% yesterday, has rallied 2.6% since then as the Indian govern-ment’s budget discipline revived inves-tor confi dence in local assets.

Brexit “is likely have an adverse im-pact on India’s growth through trade and fi nancial channels,” though much less than more open economies, Mor-gan Stanley wrote in a report after the UK’s June 23 vote.

Further risks to the currency come from accelerating infl ation and the im-pending departure of Reserve Bank of India Governor Raghuram Rajan, who helped restore market stability after taking charge within days of the rupee’s tumble to a record in 2013.

“We are negative on the rupee due to Rajan’s exit, the central bank’s policy to depreciate the currency to support weak exports and still elevated infl a-tion,” said Dariusz Kowalczyk, a Hong Kong-based senior emerging-market strategist at Credit Agricole. “He’s stabilised the market and built a lot of credibility. It will be diffi cult for his re-placement to match him.”

Rajan will leave the central bank when his term ends early Septem-ber, after a member of Prime Minister Narendra Modi’s ruling party publicly criticised him for keeping rates unnec-essarily high. His successor faces the challenge of keeping infl ation under check, given the central bank’s target to

limit price gains to 5% by March 2017, while maintaining currency stability amid the fallout from Brexit and a po-tential increase in US interest rates.

The new RBI chief will also have to contend with an estimated $20bn out-fl ow from maturing foreign-currency deposits that Rajan had lured to sup-port the currency back in 2013.

Rupee sovereign bonds rallied the most since early April on Tuesday as speculation mounted that the yet-to-be-named new governor will be more aggressive in monetary easing.

A successor to Rajan may be named soon, the CNBC television channel said on Tuesday, following a report by Bloomberg TV India on Monday that

Arvind Panagariya, vice chairman of a policy research group established by Modi, was the top contender for the job. The notes extended gains yester-day, taking the 10-year yield to its low-est close since June 2013.

BlackRock is overweight on India’s local-currency debt, Scott Thiel, dep-uty chief investment offi cer for fun-damental fi xed income at the world’s largest asset manager, said in London on Tuesday, as overseas investors add-ed Rs16.9bn to their holdings of Indian government and corporate securities. That’s the biggest single-day increase since March 30, National Securities Depository Ltd data show.

Kotak Mahindra’s Shankar said

global volatility and not domestic factors are contributing to its view on rupee depreciation, adding that India’s overall economic fundamen-tals are good and inflation isn’t “run-ning away.” Futures contracts signal there’s a 34% probability the Federal Reserve will raise rates by year-end, up from 8% on July 5, suggesting a resilient US economy may dim the al-lure of rupee assets.

“The biggest risk to us will be how the global uncertainty plays out and whether it translates into dramatic shifts of capital and signifi cant dollar strength,” Shankar said. “In times of uncertainty, pressure usually transfers to the rupee in some form or the other.”

A cashier at the ICICI bank branch in New Delhi places rupee notes in a counting machine. The Indian currency will decline to an unprecedented 69.50 per dollar by the end of the year, 3.5% weaker than its close in Mumbai yesterday, according to Kotak Mahindra Bank.

BUSINESS

Gulf Times Thursday, July 14, 201614

World’s most powerful stock pickers don’t manage a pennyBloombergSingapore

MSCI isn’t usually a name that springs to

mind when one thinks of the most power-

ful players in the global equity market.

The New York-based index compiler

doesn’t have BlackRock’s trillions under

management, Morgan Stanley’s army of

financial advisers or UBS Group’s storied

history. At $7.7bn, MSCI’s market value is

too small to crack the top 300 of global

financial firms, and its payroll of about

2,700 pales in comparison to that of Fran-

klin Resources, one of America’s biggest

fund managers.

Yet thanks to the surging popularity of

passive investing, MSCI and a handful of

its rivals – including FTSE Russell and S&P

Dow Jones Indices – are quietly replac-

ing the giants of money management

as the most important arbiters of where

the world’s stock investments flow. The

average proportion of equity funds in

the US, Europe and Asia that mimic index

providers’ security and country alloca-

tion decisions has doubled over the past

eight years to about 33%, according to

Morningstar.

That growing heft was on full display

this year in China, where authorities

enacted some of the nation’s most far-

reaching market reforms in hopes of gain-

ing entry into MSCI’s global stock gauges

last month. The country’s ultimately

unsuccessful campaign cemented the

index compiler’s status as one of the few

companies worldwide with the ability to

influence the policy decisions of China’s

ruling Communist Party.

“They have an awful lot of power,” said

George Cooper, the chief investment of-

ficer at Equitile Investments Ltd in London.

“Fund managers and investors are slav-

ishly following these indices.”

Index providers aren’t stock pickers in

the same sense as active money manag-

ers, who attempt to beat the market by

choosing only the best securities. Most of

the criteria used by MSCI and its peers are

measures of investability, such as market

capitalisation and daily volume, rather

than anything purporting to generate

above-average performance.

The index firms say they’re merely

channelling the collective feedback of

their clients, who include active inves-

tors using benchmarks to gauge relative

performance and passive managers who

need them to deliver the market return.

“International investors will not blindly

follow any decision we make,” Mark

Makepeace, the London-based chief

executive off icer of FTSE Russell, said.

But there is a degree of subjectivity that

goes into developing a benchmark index,

particularly when deciding on contentious

issues, such as which countries to classify

as developed, emerging and frontier.

MSCI’s decision to leave domestic

Chinese equities out of its global gauges

in June surprised many forecasters, while

its upgrade of Pakistan to emerging-

market status the same month sent shares

in Karachi surging to a record – a sign

that investors had failed to price in the

move. MSCI didn’t respond to requests for

comment for this story. Beyond market

classification decisions, stocks routinely

rise or fall when index providers announce

even small adjustments to their most

widely-followed gauges. The decisions

are so important that some brokerages,

including Societe Generale, have analysts

dedicated to helping traders predict when

securities will be added, deleted or see

their index weightings change.

Index providers are also starting to

encroach on the traditional turf of active

managers with the rise of “smart beta,”

an investing style that uses gauges

built around factors other than market

capitalisation. Assets in smart beta ex-

change- traded funds will probably climb

to $1tn by 2020 from $282bn at the end of

March, according to BlackRock, the world’s

largest money manager. MSCI, FTSE and

S&P Dow Jones all have indexes that use

factors such as volatility, dividend yield

and momentum.

“The index provider is becoming more

of a stock picker,” said Rodney Comegys,

head of investments for Asia Pacific at

Vanguard Group, which oversees more

than $3tn in mostly passive funds. “In

some ways, they’re replacing the active

manager.”

Bloomberg, the parent company of

Bloomberg News, competes with MSCI

and others by compiling indexes and

providing analytics for stocks, bonds and

commodities.

Indexes have played a key role in stock

markets since the days of Charles Dow,

who created the Dow Jones Industrial

Average in the 1890s to track blue-chip

US stocks. What’s diff erent now is that the

gauges no longer just serve as a yardstick

for money managers, they’re increasingly

being used to determine the makeup

of investor portfolios via index-tracking

mutual funds, exchange-traded funds and

derivatives.

The shift toward passive investing

in equities, which emerged with John

Bogle’s Vanguard 500 Index Fund in the

1970s, has accelerated in recent years as

traditional stock pickers lagged behind

their benchmarks and volatile markets

refocused investor attention on the costs

of active management.

Global passive equity funds and ETFs,

which charge fees as low as 0.01%, at-

tracted $227bn of net inflows in the 12

months ended June 15, versus $92bn of

outflows for active funds, which have an

asset-weighted management fee of 0.62%,

according to data compiled by Bloomberg

on funds with at least $300mn of assets.

Passive investments are becoming

more important in the bond market, too,

though they still make up just 15% of funds

in the US, Europe and Asia on average,

Morningstar data show.

“We expect that the growth of passive

investing will remain strong,” Alex Mat-

turri, CEO of S&P Dow Jones Indices in

New York, said by e-mail.

One concern about the spread of index-

tracking investments is that they’ll create

market distortions, with money moving

into or out of shares because of their

status in key indexes, instead of anything

to do with the securities’ underlying value,

according to Equitile Investments’ Cooper.

Putin isn’t about to let go of the crown jewels after AlrosaBloombergMoscow

Hatched in harsh economic times, Russia’s latest wave of privatisation is off to a mixed

start, and a sequel is by no means guar-anteed.

The sale of a 10.9% stake in Alrosa was the biggest divestment of a state asset since the government reduced its stake in the world’s largest rough-dia-mond producer almost three years ago. Managed by the nation’s two biggest banks, both of them state-run, shares were priced at a 3.8% discount to Al-rosa’s closing price on Friday. While plans as recently as fi ve years ago called for the state’s stake to be reduced to zero by 2017, the stock off ering still left Russia in control of 33% of Alrosa, with regional and municipal governments holding another 33%.

The deal, which attracted mostly Russian and European investors, is try-ing to turn the page on a period under

President Vladimir Putin when priva-tisation came in fi ts and starts. Snarl-ing and often reversing the process were state takeovers that by mid-2015 put the government in control of about 55% of the economy and employing 28% of the workforce, estimated as the highest share in 20 years. It’s that his-tory that will haunt Russia’s plans to put some of its most prized assets on the block later this year.

“Stakes in strategic companies will be decreased very, very slowly,” said Evgeny Koshelev, an analyst at Societe Generale’s Rosbank unit in Moscow. “The fi rst privatisation was a forced necessity, and unlike other assets, it doesn’t fall into a strategic group.”

The government is targeting pro-ceeds of as much as 1tn roubles ($16bn) this year from auctioning off state as-sets, which would cover almost half of this year’s budget defi cit, the widest since 2010. With 52.2bn roubles raised in the Alrosa off ering, First Deputy Prime Minister Igor Shuvalov said on Monday that the program is proceed-

ing on schedule, and stock sales of oil producers Bashneft and Rosneft and shipping company Sovcomfl ot may soon follow.

“With foreign investors awash with

cash and the rouble still trading sig-nifi cantly lower than only a few years ago, demand for Russian assets should be relatively strong,” said Piotr Matys, a strategist at Rabobank in London.

“Unless the outlook for the Russian economy deteriorates signifi cantly, it is reasonable to assume that the gov-ernment may proceed with the priva-tization process.”

But the urgency is no longer there. Oil prices are up about 70% from a 12-year low in February, a boost for the budget that gets about a third of rev-enue from the energy industry.

The improving sentiment in Rus-sia is playing out in the market, with the rouble gaining more than 15% this year against the dollar after a 20% loss in 2015. The Micex Index of stocks is trading at 6.6 times estimated earn-ings, compared with about 5.6 times at the start of the year, data compiled by Bloomberg show.

While the government’s target this year is almost double the 585bn roubles raised in state-asset sales in 2011-2013, progress in recent years has been fi tful at best.

State ownership in Russia was esti-mated at twice the level in the Europe-an Union, a constraint on productivity,

according to the World Bank. The Or-ganisation of Economic Cooperation and Development in 2013 described government involvement in the econ-omy as “pervasive.”

The state began to expand its reach more than a decade ago with the dis-mantling of Yukos Oil Co. Rosneft grew into the world’s biggest publicly traded crude producer by output as it acquired assets from Yukos in forced auctions and then bought BP’s venture TNK-BP in 2013.

In 2014, Russia nationalized Bash-neft, taking the shares held by Vladimir Evtushenkov’s holding company AFK Sistema amid a money-laundering case against the billionaire. With Bashneft possibly up for sale again, Rosneft is already in contention.

“I doubt that Rosneft and Bash-neft sales will happen this year,” said Vladimir Tikhomirov, chief economist at BCS Financial Group, a Moscow brokerage. “If oil prices will stay close to their current level, there may be no major incentive to sell the key assets.”

Steinhoff gets itsEuropean deal with $800mn Poundland buyReutersLondon/Johannesburg

South African retailer Steinhoff has agreed to pay nearly $800mn for British-

based discount chain Poundland after two previous attempts to expand in Europe fell through this year.

The $23bn company, which sells beds and cupboards to less affl uent shoppers in Europe, southern Africa and Asia, is keen to grow its European business when consumers are turning to cheaper chains and its home market is also struggling.

Steinhoff already owns the Bensons Beds and Harvey’s fur-niture chains in Britain.

The Poundland deal is third time lucky after it failed to secure Britain’s Home Retail, which owns Argos, and was also unsuccessful in a bid for Darty in France.

It is the biggest takeover of a listed British company since a vote on June 23 to leave the Eu-ropean Union, a decision which has prompted concern that Brit-ain may fall into recession.

The fall in the value of the pound is making British assets cheaper for foreign buyers.

Steinhoff , in which South Af-rican billionaire Christo Wiese is the largest shareholder, has a reputation for buying underper-forming companies that can ben-efi t from its wide global network to source goods at lower prices.

It will pay 220 pence per share plus 2 pence in dividends, valu-ing the Poundland at £597mn ($791mn). The price is a premium of 39% to Poundland’s share price on June 13 — the day before Stein-hoff fi rst bought Poundland shares.

It had since built up a 23.6% stake. Shares in Poundland surged 12.6% to 220.7 pence yes-terday. Momentum Wealth head Wayne McCurrie questioned the price the Johannesburg-based

company plans to pay for Pound-land, which as its name suggests sells every item at a single price of a pound at its UK stores.

“Steinhoff is paying quite a big premium,” McCurrie said. “This might be a bit negative for Stein-hoff in the next year or two as the British economy tries to fi nd its new home.”

Poundland listed at 300 pence in 2014. But its shares have lost 42% of their value over the last year, hit by subdued trading, ad-verse currency moves and the distraction of integrating the 99p Stores chain it bought for £55mn.

It has also faced pressure as British supermarkets fi ght a price war spurred by the growth of Ger-man discounters Aldi and Lidl. Buying Poundland would give Steinhoff more than 900 shops in Britain, Ireland and Spain.

“Steinhoff is developing a fast-growing, price-led retail business across the UK and the rest of Europe.

Poundland would be a com-plementary fi t to this growth story,” said Steinhoff Chief Ex-ecutive Markus Jooste.

The deal gives Poundland shareholders a return on their investment without having to await the benefi ts of a turna-round strategy.

“The Poundland Board be-lieves that (Steinhoff ’s) all-cash off er presents Poundland share-holders with an opportunity to realise their shareholding at a certain and attractive price,” Chairman Darren Shapland said.

Jim McCarthy, who stepped down this month after 10 years as chief executive, is in line for a £22mn payment for his stake.

Steinhoff ’s further expan-sion in Europe, where it already makes more than 70% of its sales, would reduce its reliance on a shaky home market where its furniture unit JD Group is cutting jobs and closing branch-es because of weak demand.

A pedestrian passes the headquarters of Alrosa in Moscow. The sale of a 10.9% stake in Alrosa was the biggest divestment of a state asset since the government reduced its stake in the world’s largest rough-diamond producer almost three years ago.

Pound’s Brexit plunge may not boost exports at 1992 and 2008 rateReutersLondon

Sterling’s plunge since Britain voted to leave the European Union was the biggest in more than 40 years,

but its boost to UK exports may well be far less than after similar tumbles in 1992 and 2008.

A fragile world economy, more com-plex world supply chains and near-zero Bank of England interest rates mean Britain may be less able to take advantage of its more competitive exchange rate.

“Currency devaluation is no panacea.Japan shows that a fall in the currency

doesn’t lead you to the promised land of export growth,” said Stephen King, sen-ior economic adviser to HSBC.

Sterling has fallen as much as 11% on a trade-weighted basis since the June 23 Brexit referendum, and 15% against the US dollar. That puts it on track to fall as much as it did in the months following Black Wednesday in 1992 and Lehman Brothers’ collapse in late 2008.

Most economists expect further de-clines, perhaps another 10% to below $1.20. And yet they still expect Britain’s economy to slow as a result of Brexit, maybe even slipping into recession next year. “Exporters need to continue to in-vest to remain competitive.

If Brexit leads to an investment freeze, the fall in the pound might not be enough to boost exports,” Christian Odendahl and John Springford at the Centre for European Reform, a research institute in London, wrote this week.

A falling pound does not automati-cally lead to a one-for-one boost to UK exports.

Recent estimates show that a 10% re-duction in UK export prices leads to a 4% rise in exports, according to Odendahl and Springford.

They note that global trade grew by just 2.5% over the past year and will ex-pand by even less this year, while today’s multinational production networks and supply chains mean a weaker currency

helps exporters a lot less than in the past.That said, comparisons with 1992

and 2008 are instructive. Sterling fell around 18% on a trade-weighted basis and as much as 30% against the dollar in the six months after Britain was ejected from the Exchange Rate Mechanism on 16 September, 1992, known as Black Wednesday.

Exports rose to £239bn in 1997 from £149bn in 1992, according to Britain’s Offi ce for National Statistics, an increase of 53%. The economy grew by 15.5% to £1.28tn. Britain recorded a trade surplus

in the three years to 1997, albeit no more than 0.5% of GDP in each year, but rare surpluses nonetheless.

1997 was the last year Britain exported more than it imported.

Much of the strong demand for UK exports then was down to a relatively healthy world economy, as German re-unifi cation lifted Europe and the US ‘Clinton boom’ picked up steam.

World GDP growth jumped to 3.8% in 1997 from 1.8% in 1992, according to The World Bank. The global backdrop wasn’t so benign after the “Great Recession”

of 2008-09. Global growth was 4.3% in 2007, according to The World Bank, be-fore falling to 1.8% in 2008 and only re-covering to 2.4% by 2013.

Sterling’s tumble after Lehman did help fuel a 23% rebound in exports by 2013, but that was less than half the rate of growth in the fi ve years following Black Wednesday.

The UK economy grew by just 2.2% over the 2008-13 period, ONS fi g-ures show. Unlike the years after Black Wednesday, when Britain’s current ac-count defi cit was almost eliminated in 1997, the country’s broader balance of payments position has deteriorated since 2008.

It has never been worse, with the cur-rent account defi cit now more than 5% of GDP. HSBC’s King said the main rea-son for the post-1992 economic recovery was the Treasury and BoE’s deep interest rate cuts.

The pound’s 2008-09 depreciation failed to rebalance the UK economy away from consumption, and the fall in real wages actually made people worse off .

On Black Wednesday the Bank of Eng-land raised interest rates to 15% to try and prop up the pound, before abandon-ing the ERM altogether and allowing the pound to slide as it slashed rates to just above 5% by February 1994.

It was that blend of steep rate cuts, a weaker pound and the recovering global economy that proved most potent.

After Lehman, the Bank slashed rates by 400 basis points to a record low 0.5% by March 2009.

However, it was easing policy into the teeth of a global recession and along with almost every other central bank in the developed world. The Bank is expected to ease policy again via rate cuts, expand-ing its £375bn bond-buying programme, or both.

But with policy already stretched, many doubt how much bang for its buck the Bank can now get. Also, no one knows what Britain’s post-Brexit trade deal with the EU — where 40% of UK ex-ports go — will look like.

BUSINESS15Gulf Times

Thursday, July 14, 2016

Post-Brexit Britain wakes up to smell pricier cup of coff eeBloombergLondon

UK coff ee drinkers should brace to pay more for their morning fi x as domestic roasters start

to pass on increased import costs after Britain’s Brexit vote.

London’s small-scale producers, who help supply the capital’s taste for a quality roast, are facing a steep rise in the price of coff ee beans after the pound slumped to the lowest in 30 years against the dollar.

As with most imported commodi-ties, UK roasters pay for the raw prod-

uct in US currency, and the foreign-exchange reaction to Britain’s vote to leave the European Union has jolted the market.

Customers of Square Mile Coff ee Roasters, based in East London, have to pay 50 pence more for some 350-gram (12-ounce) bags of coff ee or-dered online, representing an increase of 3% to 5%, according to owner An-ette Moldvaer.

“We ended up paying a lot more for our green coff ee,” Moldvaer said in an interview. The second payment on a $150,000 order of 18,950 kilograms of Costa Rican beans got about $7,500 more expensive after the June 23 refer-

endum. “We kind of got caught in the middle of it as far as our payments were concerned.”

Square Mile roasts around 120 met-ric tons of green coff ee beans per year, sourcing from countries such as Brazil, Burundi and El Salvador. It then sells to coff ee houses wholesale, and to indi-vidual customers online.

The costs will inevitably be passed on to the customers, of which Prufrock Coff ee, a cafe and barista-training centre, based in London’s Clerkenwell, is one.

The impact on sales of drinks tends to lag a few months behind as roasters fi rst clear stocks of beans.

“Roasters are buying large quanti-ties of green coff ee that last them 6 to 12 months,” owner Jeremy Challender said over an espresso.

The real squeeze will come as roast-ers order their next batches before Christmas – if the pound fails to re-cover – and pass the extra costs on to outlets, he said.

Prufrock also imports a signifi cant proportion of coff ee from roasters on the European continent where the weak pound is already bumping up costs.

“Suddenly we’re paying more,” Challender said.

Already, due to the high cost of rent

in London, Challender’s customers are paying almost double what they were fi ve years ago, he said. Prufrock charges £2.20 ($2.90) for an espresso and £2.80 for one with milk.

The short-term eff ect of Brexit is exacerbating the upward trend in the price of premium arabica. The best coff ee requires high altitudes, and is therefore more challenging to grow. Combined with increased global de-mand, climate change and crop dis-ease, that’s leading to higher prices, which will be borne by the consumer. On Tuesday, Starbucks Corp increased prices in the US by 10 cents to 20 cents on “select sizes” of brewed coff ee.

“There is a crisis in the world of coff ee, a long-term crisis where the industry is starting to wake up,” said Jeff rey Young, chief executive offi cer of Allegra Group, a UK consultant.

Coff ee’s addictive nature may tem-per the blow as consumers are gener-ally willing to bear price increases for their fi x, he said.

Moldvaer at Square Mile is also op-timistic about the future despite the weak pound. “The cost of coff ee is al-ways volatile,” she said, and her cus-tomers tend to be understanding. Be-sides, Brazil is apparently in line for a bumper crop of good coff ee this year – just in time for the Christmas order.

Brexit vote raises questions about pound’s elite statusReutersLondon

Britain’s vote to leave the European Union is raising questions about sterling’s place among the small, elite group of hard currencies underpinning the financial system.The pound’s 14% slide since the vote to 31-year lows against the dollar is the biggest hit taken by one of these currencies in the post-1973 floating exchange rate system.For Britons, the impact may feel slight or even ambiguous.Consumers of imported goods may see them become more expensive and travellers will find foreign trips more costly.Exporters, on the other hand, may find their products more competitive abroad and any overseas earnings get a boost.But a bigger international impact could come if sterling’s status as one of the currencies held in reserve savings by central banks and sovereign wealth funds is cast in doubt, risking a weaker and more volatile pound longer-term.

Reserve currencies are typically seen as dependable and easily convertible long-term stores of value, needed to meet emergency imports, service international debt, or to smooth the eff ects of volatile trade and investment shifts on local currency rates.These hard cash reserves are then often banked back in the assets, mostly government debt, of the currency issuer.This is important for Britain, which relies on an inflow of foreign capital to fund a chronic current account deficit running at 7% of economic output.But credit rating agency S&P Global warned sterling’s role as a reserve currency could, over time, diminish.It said this was one reason Britain’s credit rating, which it cut by two notches days after the June 23 vote, could be cut further.“Sovereigns controlling a reserve currency benefit from extensive external and monetary flexibility, which supports government creditworthiness,” said Frank Gill, director of sovereign ratings at S&P.“A UK departure from the EU could put sterling’s reserve status at risk by

deterring foreign direct investment and other capital inflows into the UK.”Weaker growth prospects as flagged by the Bank of England, along with a weaker pound could also see reserve managers allocate assets towards other currencies.Sterling, the dominant reserve currency through the 19th century when the

British empire was at its height and until World War Two, has ceded ground to the US dollar and the euro.It is now the third most widely held — even if a relatively small 4.8% of so-called allocated reserves in the first quarter of 2016, according to IMF data.But that is around $344bn or some 13% of Britain’s gross domestic product of

$2.7tn and nearly five times its 2015 current account deficit of $73bn.Sterling’s share was dwarfed in the period by the dollar’s 63.6% and the euro’s 20.4% but was slightly more than the yen’s 4.1% slice.S&P reckons a drop below 3% would challenge its status as a reserve currency. Reserve managers are slow to change the composition of their reserves, and if they do make a shift, act discreetly to avoid undermining the currencies in question.The dollar’s share of reserves dipped to about 60% in the years after the 2008/09 global financial crisis before picking up as the euro’s share fell in the eurozone crisis.Sterling’s share has barely moved from a decade ago, though it has gained in prominence from the 3% share in 2001.Central banks declined to comment on whether sterling’s share would drop.However, one Asian central banker, who did not wish to be identified, told Reuters a decision would be based on macro-economic conditions and the currency’s short- and long-term outlook.“There won’t be any knee-jerk reaction.UK is the world’s sixth-largest economy

and a major trading partner to many countries,” said Bank of New York Mellon strategist Neil Mellor.In recent years, reserve managers, with an accumulated $11 tn in assets, have diversified out of the traditional reserve currencies like the euro and yen, seeking higher yields in the likes of the Australian and Canadian dollars.The euro has borne the brunt of this process, and stripping out valuation eff ects, since foreign exchange reserves are priced in dollars, the single currency’s share of overall reserves has retreated from a high of 28% in 2009.That coincided with the single currency’s fall from $1.38 in mid-2014 to a 12-year low of $1.04 in March 2015 as the European Central Bank cut rates into negative territory, making eurozone government bonds less attractive.Now it could be the pound’s turn given expectations that rates could be cut to zero and of more quantitative easing.“Slower growth, lower yield, weaker credit ratings, might suggest that sterling’s role as a reserve currency is somewhat diminished,” said Roger Hallam, JPMorgan Asset Management’s CIO for currency management.

Brexit strengthens case for LSE and Deutsche Boerse merger: BundesbankReutersFrankfurt

London must prepare to lose euro trading and clearing activities once

Britain leaves the European Union but the business case for merging the London and German stock exchanges has been strengthened, Bundes-bank board member Andreas Dombret said yesterday.

Last month’s Brexit ref-erendum has cast a shadow over the $27bn merger be-tween London Stock Exchange Group and Deutsche Boerse, with the fi rms facing regula-tory questions about the fu-ture of the business once Brit-ain leaves the EU.

Indeed, Germany’s fi -nancial regulator Bafi n last month said London could not host the headquarters of the merged entity, nor could London remain a centre for trading in euros since it was leaving the bloc.

“Regarding the merger be-tween Deutsche Boerse and London Stock Exchange, the referendum outcome has even strengthened the economic rationale,” Dombret told a conference in Frankfurt.

“Once the UK has left the European Union, bridges be-tween both economies will be more important than ever before,” he added.”The an-nounced merger of LSE and Deutsche Boerse has the potential to become such a bridge.”

Dombret does not have a direct say on the merger but is the most senior German of-fi cial to publicly support the merger since the referendum on June 23.

London Clearing House LCH, majority owned by the LSE, accounts for the big-gest chunk of euro clearing and analysts have suggested that the merged group could relocate the business to Frankfurt.

Supporting such an argu-ment, Dombret said that eu-ro-denominated trading, de-pository services and clearing are unlikely to have a future

outside the EU and Frankfurt would be a more appropriate alternative.

Around €1tn ($1.1tn) are ex-changed in Britain every day while the turnover for interest rate derivatives, such as for-ward rate agreements, swaps, and options is €927bn per day, Brussels based think tank Bruegel said.

Dombret said that much still needs to be decided, in-cluding UK banks’ passport-ing rights, but some of the more pessimistic forecasts, including a 0.6% negative im-pact on 2017 eurozone growth, were “exaggerated”.

Although fi nancial markets may not yet have found a new equilibrium since the post-referendum turmoil, Dombret warned eurozone countries against using the volatility as an excuse to circumvent bank regulations, particularly bail-in rules.

“If we allow states to pro-vide discretionary aid to their banks, this impedes a core el-ement of the bail-in regime, namely its credibility,” Dom-bret said.”

If the bail-in mechanism were to be exposed or even dismantled, markets would no longer exert their disciplinary function.”

The comments appear to be directed at Italy, which has been in talks with the EU to provide state aid to its troubled bank sector, weighted down by €360bn ($400bn) of non-perform-ing loans.

Italy’s chief concern is that recapitalisation could require banks to bail in investors, who include ordinary households, making any restructuring po-litically painful.

ECB policymakers have ar-gued that state aid, particular-ly in case of systemic risk may be acceptable but the bail-in rules must be respected.

The compromise may be government compensation for small investors but eurozone fi nance ministers threw cold water on the idea on Monday when they argued there was no acute crisis and a bank-by-bank solution was needed.

Burberry expects boost in earnings from weak pound after BrexitQ1 like-for-like sales fall by 3%, better than forecast; sees a £90mn boost from weaker pound; shares rise 5%

ReutersLondon

British luxury goods brand Burberry, which announced a management shake-up this week as it seeks to

overturn falling profi ts, said yesterday it expects a post-Brexit drop in the pound to boost its earnings this year.

The group known for its camel, red and black check design incurs about 40% of its costs in Britain, but makes only 10% of its sales in its home market and more than half of those come from foreign tourists in London, analysts estimate.

It said its adjusted profi t for the year would be boosted by about £90mn ($120mn) if exchange rates remain at cur-rent levels, compared with a previous forecast of £50mn.

The pound has fallen to 31-year lows since Britons’ voted on June 23 to leave the European Union.

Burberry’s sales in Britain picked up in its fi rst quarter, through June 30, but Chief Financial Offi cer Carol Fairweather said it was too early to assess any impact of the Brexit vote on demand.

“In the UK, our home market, we did see a strong performance increasing throughout the quarter, so it’s far too early to call about what it may mean in terms of UK trading,” Fairweather told reporters on a conference call.

“Short term, there’s probably no dis-cernible impact on our operations glo-bally. (But) we are calling out today that we do benefit from the movement in foreign exchange rates on our reported profit.”

Mindful of recent currency movements, analysts expected adjusted pretax profi t for the full year of about £413mn before the latest update, a level Fairweather said she was “comfortable” with.

That marks an upgrade from May when the group said it expected annual profi t to come in towards the bottom end of forecasts, which ranged from £375mn to £449mn.

Burberry’s shares, which rose to 12-week highs after the group announced on Monday that creative director Chris-topher Bailey will step down as CEO next year to focus on being creative director, jumped another 5% after the company’s trading statement yesterday to 1,268 pence.

Shares in the 160-year fi rm had fallen 24% over the past year as investors fretted about slowing global demand for luxury goods, particularly in China.

On Monday the group, which saw profi ts fall 10% in the year through March to £421mn, announced that Marco Gob-betti, the Italian boss of LVMH brand Celine, will replace Bailey as CEO some time next year.

Fairweather will also step down by the end of January.

The group saw like-for-like sales in Britain grow by a single-mid percentage in the quarter to June 30, it said in its trad-ing statement yesterday, partly off setting depressed trading in continental Europe, particularly France and Italy.

Sales in Britain picked up towards the end of the quarter, Fairweather said, cov-ering the days before and after the vote on membership of the EU.

The group remained cautious about global demand.”The external environ-ment remains challenging and under-lying cost inflation pressures persist,” it said.

Hong Kong, one of its biggest markets in Asia, continued to be tough, it said, and demand in the Americas was uneven, re-sulting in an overall 3% drop in like-for-like sales in the second quarter.

However, that was an improvement on the previous quarter and better than ana-lysts expected.

A 3% contribution from new stores re-sulted in fl at retail sales of £423mn.

Pedestrians walk past the entrance to Burberry Group’s luxury clothing store on Regent Street in London. Burberry’s sales in Britain picked up in its first quarter, through June 30, but chief financial off icer Carol Fairweather said it was too early to assess any impact of the Brexit vote on demand.

BUSINESSThursday, July 14, 2016

GULF TIMES

Qatar Re announces three senior appointmentsQatar Re has announced the appoint-

ments of Andrew Smith as the Group’s

chief risk off icer, Adam Young as head

of Compliance, and Steve Tidd as chief

operating off icer.

The company said the appointments

further strengthen Qatar Re’s risk and

corporate governance and oversight,

while also enhancing its internal systems,

processes, and operating eff iciency.

Smith and Young will be based in Qatar

Re’s head-off ice in Bermuda.

Gunther Saacke, CEO, said: “These

most recent senior appointments again

demonstrate our ability to attract top

calibre professionals to join us on our path

of rapid development. Having worked

closely with Andrew as a senior consultant

before, we are delighted to have him on

board as a member of our senior manage-

ment team. His in-depth risk expertise will

be instrumental in securing the quality of

our future growth.”

He added: “Similarly, in his previous

function as head of Group Compliance for

our parent company QIC, Adam has been

working with Qatar Re for the past few

years. His experience with diff ering regu-

latory environments and his knowledge of

the wider QIC Group will prove invaluable

as we continue to pursue our strategic

objectives.

“Finally, Steve’s promotion reflects the

success in his previous assignment as our

head of Operations. Within a very short

period, he has already seen through some

important enhancements of our proc-

esses and systems.”

Smith took up his new role as chief

risk off icer on May 1. He joins from Ernst

& Young (EY) where he already worked

extensively with Qatar Re on its re-

domiciliation to Bermuda. He has 18 years

of experience, the last five of which have

been in Bermuda, where he advised com-

mercial clients and industry associations

on the changing risk and capital agenda.

At EY, he had local responsibility for

their financial services risk management

and actuarial teams. Prior to that, Smith

was with PricewaterhouseCoopers (PwC),

based in London, working in the London

market and internationally with clients

across Europe, Asia and the Americas.

While Smith has focused on risk

management for most of his career, he is

an accountant by training. He holds the

designations CPA (Bermuda), FCCA (UK)

and ACA (UK).

Young took up his new role as head

of Compliance in Bermuda on June 1. He

joins from the QIC Group’s headquarters

in Doha where he held the role of head of

Group Compliance since late 2013.

During his tenure, Young was responsi-

ble for the Group’s compliance oversight

of its insurance and reinsurance subsidiar-

ies and their activities across the Middle

East. These included Qatar Re, prior to its

transfer from the Qatar Financial Centre

to Bermuda.

Young was also involved in providing

regulatory support for some of the QIC

Group’s strategic initiatives, including

the acquisition of the Antares group of

companies and the restructuring of its

international operations.

Prior to joining QIC Group, Young held

various compliance roles within Lloyd’s

and the London insurance market with

firms, including Aegis Managing Agency

and Brit Syndicates where he held the role

of Compliance Off icer. Young started his

career in insurance in 2003 with broking

house Jardine Lloyd Thompson.

Tidd joined Qatar Re in October 2015

as head of Operations and has been ap-

pointed chief operating off icer with eff ect

from July 1. Tidd quickly became instru-

mental in Qatar Re’s continued eff orts to

build and further enhance the operational

eff iciencies that the company requires in

order to excel in its services.

In his enlarged role, Tidd will ensure

Qatar Re further increases its quality of

operations, high level of customer service,

and will keep enhancing a reputation of

entrepreneurial spirit and capital strength.

Tidd has more than 25 years’ experi-

ence in the insurance industry, including

business leadership, general and opera-

tions management, and as a technical

specialist. His experience extends across

both the retail and reinsurance sectors,

with a particular emphasis on UK motor.

Prior to joining Qatar Re, Tidd was with

Service Underwriting Agency as manag-

ing director.

AccorHotels, QIA and Kingdom Holding for long-term partnershipAccorHotels, Qatar Investment Au-

thority (QIA) and Kingdom Hold-ing Company have established the

principles for their long term shareholder partnership.

At the General Meeting that was held yesterday, shareholders representing 73.13% of the total were present or repre-sented by proxy.

The shareholders of the group approved the resolution fi nalising the acquisition of FRHI Holdings Limited (FRHI) and the corresponding share capital increase re-served for the Qatar Investment Author-ity (QIA) and Kingdom Holding Company (KHC), as well as their representation on the Board of Directors.

The shareholders also approved the appointment of six new directors: Aziz Aluthman Fakhroo and Ali Bouzarif, pro-posed by Qatar Investment Authority, Sarmad Zok, proposed by Kingdom Hold-ing Company, and Jiang Qiong Er, Isabelle Simon and Natacha Valla as independent directors.

The Board of Directors now has some 16 members, including one employee rep-resentative director. Seven directors are women and nine are independent. A new employee representative director will be appointed by the group’s European Work Council within the next few weeks, in ac-cordance with the company’s bylaws.

Sébastien Bazin, chairman and CEO of AccorHotels, said, “The six new Board members who have been appointed by our shareholders today are bringing tre-mendous diversity and experience to Ac-corHotels’ Board. I am convinced that their complementary backgrounds and views will be of great support to continue developing our growth and innovation strategy in the future.”

The changes in the group’s shareholder structure and in the composition of its Board of Directors are governed by indi-vidual shareholder agreements between Accor and each of QIA and KHC setting out the principles and objectives of their individual shareholdings.

During the closing of this transaction, Sébastien Bazin, chairman and CEO of AccorHotels said, “I am pleased to wel-come QIA and KHC as major sharehold-ers of the Group and to have their rep-resentatives on the Board of Directors as from now. The acquisition of FRHI that we have just finalised proves the agil-ity of the Group in a hospitality sector undergoing great change and reinforces our service offering for our clients and partners. It also enables AccorHotels to consolidate its shareholder base, with two renowned investors that are great specialists of the global hotel sector be-coming new shareholders. With the sup-port of QIA and KHC as well as the ac-tive involvement of their representatives in the work of the Board of Directors, we are ideally placed to keep on implement-ing our ambitious and value-creating strategy”.

QIA said, “QIA puts its trust in Ac-corHotels and is pleased to become a significant shareholder of this company. We are convinced of the relevance of this transaction for QIA and fully support the strategy defined by the Board of Direc-tors of AccorHotels and implemented by the group’s management team. The ac-quisition of FRHI positions AccorHotels as a key player in the luxury hospitality industry and strengthens its positioning as the world’s leading hotel operator.”

Zok said, “The combination of FRHI with AccorHotels is a milestone trans-action in the hospitality sector at a time when the industry is undergoing major structural changes characterised by con-solidation, consumer empowerment, disruptive technology, and distribution channels. We are confi dent in the capacity of the Group and its executives to imple-ment growth and value-creation opportu-nities within this context. As a signifi cant shareholder in AccorHotels with a seat on the Board of Directors, Kingdom fully sup-ports the current management strategy and looks forward to contributing to Ac-corHotels’ future success.”

The AccorHotels headquarters are seen in Paris. Shareholders representing 73.13% of the total were present or represented by proxy at the company’s general meeting yesterday.

Turkish Airlines has been chosen as the Best Airline in Europe for the sixth consecutive year at the 2016 Skytrax World Airlines Awards. This demonstrates Turkish Airlines’ “continued commitment to passenger satisfaction and development within the industry”, the carrier said in a press statement yesterday. Besides being named the Best Airline in Europe, the airline has been recognised with three other awards — Best Airline in Southern Europe, Best Business Class Dining Lounge and Best Business Class On-Board Catering. The results of the 2016 World Airline Awards were announced at the Farnborough International Airshow in England. The award was presented to Turkish Airlines’ chairman of the board and executive committee, M Ilker Ayci, by Skytrax CEO Edward Plaisted. “The Skytrax World Airline Awards are the result of the largest airline passenger satisfaction survey in the world. Every year, it delights us with the idea that millions of travellers again recognise Turkish Airlines as the Best Airline in Europe. The airline continues to be renowned for its seamless services, including our dining and in-flight entertainment experiences. The award marks a continued period of success for us,” said Ayci.The statement stressed that as a carrier that “flies to more countries than any other airline, Turkish Airlines is openly appreciative of feedback from passengers all over the world”. The airline currently flies to 290 destinations in 116 nations across the globe. “Turkish Airlines continues to consolidate its position as one of the world’s leading airlines through its significant investments, prestigious award wins, impressive growth figures, large-scale aircraft orders and a continuously expanding route network,” the airline said.The Skytrax World Airline Awards are described as the “Oscars of the aviation industry”.

Turkish Airlines chosen ‘Best Airline in Europe’

M Ilker Ayci (right) receiving the ‘Best Airline in Europe’ award.

Low oil prices risk Turkish banks’ profi tsBloombergIstanbul

A slump in energy prices is proving a risk for Tur-key’s banks.

Loans not paid for longer than three months surged more than 33% in May to the highest level in fi ve years, according to data compiled by Bloomberg from the bank regulator. Those on the verge of being classifi ed as non-performing loans doubled in the fi rst quarter, while bankruptcy-protection fi lings in the country have soared 63%.

Debts owed by the tourism and energy industries — which together account for more than 13% of company borrowings — are among the most vulnerable as bomb blasts from Ankara to Istanbul deter visitors and pow-er companies struggle to repay loans amassed during an acqui-sition spree as prices slump.

“The likelihood of a surge in bad loans is quite high,” said Ercan Uysal, a banking analyst at Istanbul-based research fi rm Integras. “Although their prof-itability would be hurt signifi -cantly, Turkish banks have suf-fi ciently large capital buff ers to absorb a potential credit shock.”

The deterioration in asset quality comes as the economy cools from the fastest quar-terly expansion in more than four years. That may hurt bank profi ts if growth fl ounders, with businesses from the con-struction industry to retailers under stress because of the lo-cal currency’s depreciation, ac-cording to BGC Partners.

The weakness of the lira is also threatening bank loans in foreign exchange, which ac-count for about 42% of corpo-rate borrowings, according to Tomasz Noetzel, a Bloomberg Intelligence analyst in London.

The currency has lost more than 19% against the dollar

since the beginning of 2015, depreciating 0.3% to 2.8956 by 9:02am in Istanbul. That has weighed on bank stocks, with the 11-member Borsa Istanbul Banks Sector Index declining 13% over the period. Valua-tions have also dropped, with the gauge trading at 6.95 times future earnings, compared with 8.1 for the MSCI Emerging Markets Banks Index.

Non-performing loans worsened to 3.35% of overall credit in May, compared with 2.88% a year earlier, according to the Banking Regulation and Supervision Agency in Ankara. Industry assets increased 13% to 2.47tn lira ($853bn).

“NPLs show no sign of slow-ing down,” Noetzel said in e-mailed comments. “Slower eco-nomic growth, high rates and the lira’s level are not helping.”

Most of the pressure is com-ing from companies, which account for about 75% of all borrowings. Bad debts among retailers jumped 54% in April from a year earlier, while the ratio of soured loans in the construction industry, which account for 12% of loans, in-creased to 4.2% from 3.4%.

The rise in NPLs at a time when “gross domestic product growth has been fairly strong, could be alarming if the econo-my starts to falter in the second half of the year,” said Cagdas Dogan, a banking analyst at BGC Partners in Istanbul.

The economy expanded 4.8% in the fi rst quarter, com-pared with 5.7% in the fi nal three months of last year, and may ease to 3.2% in the sec-ond, according to the median estimate of 30 economists surveyed by Bloomberg. So far, earnings haven’t suff ered, with industrywide profi t increas-ing 27% in the fi ve months through May compared with a year earlier, according to cen-tral bank data.

IMF spurs last-minute objections to Israelbanking reformsBloombergTel Aviv

Just as Israel is close to legislating major reforms to the banking industry, critical voices are starting to mount.A cabinet member echoed concerns of a credit crisis raised by the International Monetary Fund, days after the organisation said certain points of the government’s proposal contradict the lessons of the last financial crisis.“I would not ignore the criticism by the IMF, which had no axe to grind,” according to Yuval Steinitz, a former finance minister and member of the coalition government. “I would suggest devoting a few weeks now to serious study of this criticism to see whether there are remedies that can moderate these risks, and to understand how to make a reform that takes this concern and anxiety into account.”

The criticism comes as the government works to submit its plan — which calls for the introduction of new lenders and forced asset sales — to a parliamentary vote within a month. Finance Minister Moshe Kahlon, who’s spearheading the initiative, has made increasing competition between banks a cornerstone issue in his campaign to lower living costs. The banks say the panel’s recommendations are based on outdated information and threaten the country’s financial stability.“The government will study the IMF’s critique and there could be some changes here and there, but not to the essence of the reform,” said Meir Slater, head of research at Bank of Jerusalem. “Kahlon is very determined to pass this, since he was elected on his promises to take on the banks and lower housing prices. And he’s not making much progress on housing.”