PAGE | 20PAGE | 18IIA president outlines strategiesfor the future

BUSINESSBUSINESSSouth Africa's

economy needs radical reforms

Monday 9 January 2017

Dow & Brent before going to press

QDB, QU & QC launch MA’AN to promote entrepreneursMohammad Shoeb The Peninsula

Qatar Development Bank (QDB), Qatar University (QU) and Qatar Chamber (QC) yesterday launched a

joint initiative MA’AN to support and promote entrepreneurship, especially students. The initia-tive aims to achieve objective of economic diversification of the Qatari economy.

The objective of MA’AN ini-tiative, which means ‘Together’, is to support students and local entrepreneurs through new and innovative mechanism that does not necessarily depend on gov-ernment support to provide

entrepreneurial services. The event witnessed the signing of a tripartite agreement, in the pres-ence of Sheikh Khalifa bin Jassim bin Mohamed Al Thani, Chair-man of QC; Abdulaziz bin Nasser Al Khalifa, CEO of QDB; and Dr Hassan Rashid Al Derham, Pres-ident of QU.

Present at the event, were senior officials from government and several private organisations and business leaders, including Abdul Rahman Al Ansari, CEO of Qatar Industrial Manufacturing Company (QIMC); Dr Khalid Al Abdulqader, Dean of Business College, QU; and Dr Mahmoud M Abdellatif Khalil, Director, Centre for Entrepreneurship at QU. Under the initiative the

members of QC will benefit from the entrepreneurial services pro-vided by QU. The agreement also aims at enhancing cooperation

among QU, QDB and members of the Chamber and providing host of needful services, which i n c l u d e s p e c i a l i s e d

training services, consultation and advisory services, and finan-cial assistance to establishing startups. “The most important

thing about MA’AN is that it is a very unique initiative in Qatar which brings together three important government organi-sations which are committed to the growth and development of entrepreneurship to establish a vibrant private sector business in the country,” said Dr Khalid during a press conference held yesterday. “QU will take care of the educational aspect. It will be providing infrastructure and other services, and QDB will be extending its own expertise and assistance, including financial support. While the Qatar Cham-ber will be providing all the needful assistance the entrepre-neurs will need to establish their businesses,” he added.

Sheikh Khalifa bin Jassim Al Thani (fourth left), Chairman, QC; with Dr Hassan Rashid Al Derham (third left), President, QU; Abdulaziz bin Nasser Al Khalifa (third right), CEO, QDB; and other officials at the signing ceremony held at Qatar Chamber yesterday. Pic: Salim Matramkot/The Peninsula

10,725.98 +8.64 PTS

0.08%QE

7,210.05 + 14.74 PTS

0.20%

19,963.80 + 64.51 PTS

0.32%FTSEDOW

$53.70$53.70-0.02-0.02

BRENT

The Peninsula

QNB, the leading finan-cial institution in the Middle East and Africa, has launched a campaign allowing customers of its Life Rewards programme to receive up to 10 per-cent discount for flight tickets on Qatar Airways to any of its more than 150 destinations across the globe, by redeeming only 1 Life Rewards point.

This promotion, which will remain in effect until 31st January 2017, is valid for all QNB customers who book their tickets using QNB Life Rewards credit cards through lifere-wardsholiday.com.

QNB Life Rewards Holiday website is a one stop shop for all the travel needs - with over 300 airlines, 300,000 hotels worldwide, and 300 car rentals, with no hidden fees or blackout dates. Members also earn regular Life Rewards points using their Life Rewards credit card for online bookings.

QNB’s Life Rewards Program is a total relationship loyalty program in Qatar, allowing QNB customers to accumulate Life Rewards points for their d a i l y b a n k i n g transactions by using a variety of banking channels, in addition to earning while spending on their Life Rewards debit or credit card. The program also offers its c u s t o m e r s t h e opportunity to instantly redeem their points at participating partners or towards payment of a utility bill or cash back on credit cards.

Q N B ’ s l o y a l customers are able to simply exchange their Life Rewards points for var ious opt ions , including products from luxurious boutiques, dinners at 5-star hotels, utility payments, and cash back on their Life Rewards credit card. They can even send points to their loved ones and reward their lives on special occasions.

QNB has always been committed to e x c e e d i n g t h e expectations of its customers, and to offering them tailor made services and p r o d u c t s t h a t conveniently cater to their needs.

QNB launches flight tickets discount campaign

18 MONDAY 9 JANUARY 2017BUSINESS

Abdulbasit Ahmed Al Shaibei CEO of QIIB, and top executives of the bank with Aala Ismail, Chairman of Banking Services for Major Companies, at an event held to honour Aala to mark the end of his services.

QIIB honours long-serving officialQALEX boosts production capacity

The Peninsula

Qatar Aluminium Extru-s i o n ( Q A L E X ) Company has dou-bled its production capacity through

adding new production lines to vary its products and increasing the output. For such purpose, the company invested QR45m pro-vided by Qatar Development Bank (QDB)through the differ-ent facilities of the Bank.

Established in 2008, QALEX was the first plant for aluminum extrusion in the State of Qatar. QALEX is one of Qatar Indus-trial Manufacturing Company (QIMC) subsidiaries in partner-ship with a group of local companies including Salam International Investment Lim-ited (SIIL), Aluminium Technology and Auxiliary Indus-tries WLL (ALUTEC), Qatar Real Estate Investment Company (AlAQARIA), Aluminum Gulf Ray

(AGR), Qatar Belgium Alumin-ium Company (QBELCO), and Qatar-Oman Investment Company

Abdul Rahman Al-Ansari, Chairman stated that QALEX made many contracts with companies of great experience to the supply an Aluminum Extrusion Line (7 inch) from SMS, OMAV with output capac-ity of 7,000 Tonnes a year; Anodizing & Coloring Line from MONTI ENGINEERING with output capacity of 4,000 Tons a year to provide the local and international market with ano-dized aluminum profiles with many colors, all levels of Bronze, Stainless Steel, Gold, Polished and Matte finishes; and Powder Coating Line with state of art technology from SAT, TREVISAN Company, with an output capacity of 11,000 Tonnes a year which conforms to the International Standards to produce aluminum profiles resisting the sever climate con-ditions - seaside quality

Other deals include EMMEBI Polishing and Brushing Machine for manufacturing highly-pol-ished and surface-treated aluminum profiles in many forms and shapes; and a special-ized Italian company has been contracted to add a 30 m3/hr. Industrial Water Treatment Unit in order to reuse it in produc-tion lines and to use a part of it for manufacturing purposes .

IHG launches initial public offeringThe Peninsula

The Investment Holding Group (IHG) officially announced the pricing of

its IPO on the Qatar Stock Exchange (QSE). Subscription Applications can now be submit-ted by individual Qatari citizens, Qatari companies registered in the State of Qatar, or companies incorporated in Qatar and listed on the QSE through branches of the Commercial Bank, which are now ready to receive offers.

IHG is the first Qatari family company to have been approved for listing in the Qatari stock market through an IPO.

The Offer Period will be for two weeks, between 8th-22nd of January, and during each of the ten Receiving Bank’s busi-ness hours, from 8am - 1pm Doha local time. The Company's issued share capital was QR830m. The Qatar Financial Markets Authority (QFMA) agreed that 60 percent of IHG’s capital could be offered and

divided into 49,800,000 ordi-nary shares. These will be available for purchase by Qatari citizens and Qatari companies or institutions under 100 percent Qatari ownership or listed on the QSE. The nominal value of a share is QR10, to be fully paid upon Subscription, plus 1% of the nominal value of each share for the Offering, Listing Costs and other fees, which are to be paid

as a lump sum; (i.e. QR 10.1 shall be paid for each share).

Any Individual or Institu-tional Investor correctly following the application proc-ess is entitled to a minimum individual allocation of 500 Offer Shares, as stipulated by the QFMA. Additional batches of 100 shares can be purchased over this minimum level.

Each Cornerstone Investor following the application proc-ess will be entitled to a minimum individual allocation of 1million Offer Shares. Additional batches of 100,000 can be purchased over this minimum level.

Paid amounts for unallo-cated shares can be redeemed no later than two weeks from the Closing Date and without any interests or profits paid.

IIA president outlines strategies for the future

A IIA Qatar Chapter official presenting a memento to IIA Global President Richard F Chambers, in Doha.

The Peninsula

The Institute of Internal Auditors’ Global President and CEO, Richard F.

Chambers, CIA, QIAL, CGAP, CCSA, CRMA, visited Qatar recently and presented a talk titled, “Internal Audit: Poised for Future” for a large gather-ing of auditors at Oryx Rotana.

The special appearance included Chambers signing his award-winning book, “Lessons Learned on the Audit Trail.” He also met with Yousuf Al Jaida, CEO of Qatar Financial Center and Patron of IIA-Qatar H.E. Abdulla bin Hamad Al-Attiyah, Chairman of the Abdulla bin Hamad Al-Attiyah Foundation for Energy and Sustainable Development.

Chambers, who has more than 40 years of internal audit experience, is a globally respected thought leader for the profession and was named by Accounting Today as one of the Top 100 Most Influential Peo-ple in Accounting and by the National Association of Corpo-rate Directors (NACD) as one of the most influential leaders in corporate governance.

Chambers’ presentation commenced with an overview

of The IIA’s worldwide reach, which now spans more than 185,000 members from 170 countries and territories. The Middle East experienced nearly 20 percent growth in member-ship from 2015 to 2016, ranking it as the fastest-growing region for the organization. The IIA also has seen tremendous growth in its flagship certifica-tion, the Certified Internal Auditor (CIA), which has increased 35 percent over the past four years.

Internal audi t ing ’s emerging trends are very encouraging, with the Common Body of Knowledge (CBOK) global practitioners survey indicating improvement in staffing, budgeting and reporting status, according to Chambers. The CBOK survey, produced by The Internal Audit Foundation, revealed internal audit time devoted to critical areas: risk management assurance (43 percent), strategic business risks (42 percent), and corporate governance (31 percent).

“The stakeholders want internal auditors to raise the bar by participating in major organ-izational change initiatives,” Chambers said.

Industry pioneerQALEX was the first plant for aluminum extrusion in the State of Qatar. QALEX made many contracts with companies of great experience to the supply.

IHG is the first Qatari family company to have been approved for listing in the Qatari stock market through an IPO.

19MONDAY 9 JANUARY 2017 BUSINESS

GERMAN carmaker Volkswagen will recall almost 50,000 vehicles in China due to brake prob-lems when using cruise control, according to the country's quality regulator.

The company will recall Beetles made between July 1, 2012 and Aug. 6, 2015, and Golfs, made between July 1, 2012 and July 6, 2013, according to a statement posted Friday on the offi-cial website of China's General Administration of Quality Supervision, Inspection and Quaran-tine (ASDIQ).

A PRIVATE-SECTOR survey shows Japanese companies last year made a record number of overseas mergers and acquisitions.

According to a report by M&A consultancy Recof Corporation, Japanese businesses launched 635 such deals in 2016. That's 75 more than in the pre-vious year and marks the third straight year

The deals were val-ued at about $90bn, Japan's broadcaster (NHK World) reported.

The biggest acqui-sition was the roughly $30bn purchase by Jap-anese telecom giant Softbank Group of UK-based chip developer ARM Holdings.

NETWORK International, the largest payment processing firm across the Middle East and Africa, has appointed Simon Haslam as chief execu-tive, it said yesterday.

Haslam, who was previously the president and chief executive of US -based Elavon, succeeds Bhairav Trivedi, who will continue to serve as an adviser to the Network International board

IN BRIEF

Volkswagen to recall 50,000cars in China

Dubai's Network International appoints new CEO

Japanese firms stage record overseas M&A

NextVR CEO and Co-Founder Dave Cole speaks at CES 2017 in Las Vegas, Nevada. CES, the world's largest annual consumer technology trade show that concluded yesterday featured 3,800 exhibitors showing off their latest products and services to more than 165,000 attendees.

CES concludes

Investors all ears as Trump set to break silenceLondon Reuters

US and Chinese data and an expected news conference by US President-elect Donald Trump in the

coming week may shed some light on the state of the world's two biggest economies - and the outlook for relations between them.

Trump, who takes office on January 20, has said he will hold a news conference on Wednes-day. It will be his first since winning the November election, although he has been outspoken on Twitter.

Investors will welcome any insights he may give on his pol-icies regarding China as well as the domestic economy.

"This occasion could be an opportunity for Trump to

highlight key priorities, with markets especially alert to details regarding tax reform, infrastruc-ture spending plans and his China trade stance," Standard Chartered said in a weekly note to investors.

Some analysts are concerned about the broad economic and political impacts of Trump's rela-tions with the rest of the world.

"Trump's plans for trade and foreign policy in particular are fraught with considerable threats to the real economy," Commerz-bank currency strategist Thu Lan Nguyen wrote, suggesting a trade war with China or Mexico may do the US economy more harm than good.

On the US domestic front, expectations of heavy spending under Trump to create jobs in the Rust Belt states that swung the election his way have helped lift consumer sentiment to

multi-year highs and driven up Treasury yields in a burst of "Trumpflation." One gauge of that sentiment will be US retail sales data for December due on Friday. They are expected to show a 0.7 percent rise from the previous month, according to a Reuters poll of economists.

Another will be the Univer-sity of Michigan consumer sentiment index, also out on Fri-day, which economists polled by Reuters expect to come in at 98.5, the highest reading since early 2004.

As 2017 progresses, some economists see U.S. wage growth and tax cuts outweighing the impact of higher interest rates and oil prices to keep shoppers driving the economy forward.

"Higher interest rates and rising gasoline prices will be headwinds for the consumer sec-tor, but solid labor income and

the prospects for personal tax cuts will eventually support decent consumption growth," Credit Suisse said in a weekly report.

In a reflection of the pro-longed weakness of China's yuan, data on Saturday showed Bei-jing's forex reserves dwindled to just above $3 trillion in

December - the lowest level in nearly six years.

While the yuan has soared in recent days, helping create a liquidity squeeze in Hong Kong,

Ride-hailing apps drive Saudi's economic changeDubai Reuters

Saudi Arabia hopes its plan to bring a further 1.3 million women into the workforce

by 2030 will be given a lift from ride-hailing apps Uber and Dubai-based rival Careem.

Ride-hailing apps have come under intense scrutiny from gov-ernments and regulators across the globe as they disrupt tradi-tional taxi businesses.

But Saudi Arabia courted Uber and Careem, offering state investments, to support its Vision 2030 economic reform plan.

With a budget squeezed by lower oil prices, the plan aims to draw workers away from gov-ernment jobs by creating 450,000 private sector positions by 2020. Uber and Careem say they will create up to 200,000 jobs for Saudi men in the next two years.

By offering women a way to get to work, it should also help meet the plan's goal of increas-ing the female workforce by five percentage points in the next five years to 28 percent.

"This is the next best thing to women being able to drive, because you are in control of your time, no more wasteful waiting around," said Marwa Afandi, a 36-year-old market-ing executive.

With the workforces of Uber and Careem easily expected to overtake the 65,000 nationals employed by state oil giant Saudi Aramco, the kingdom has invested in both companies.

Saudi's sovereign wealth fund put $3.5bn into Uber in June 2016 while state-controlled Saudi Telecom Co announced on December 18 it bought 10 per-cent of Careem for $100m.

"The percentage of Careem captains who are Saudi has

jumped from effectively zero to 60 percent in the last 12 months, and we aim to employ 70,000 Saudis by end 2017," said Abdulla Elyas, co-founder of Careem.

Women already account for around 80 percent of Uber and Careem's passengers, the com-panies say.

"In a country where they (women) cannot get behind the wheel we are offering both the women and the government a win-win solution," said Zeid Hreish, Uber's general manager in Saudi.

A personal driver offers the most cache for middle- and upper-class women. But as these cost as much as 3,000 riyals ($800) a month, around 20 per-cent of the average monthly household income, women are always looking for cheaper options.

Some wealthier Saudi women have never used the

country's existing taxi system because it is not seen as accept-able for them to travel in the older vehicles that are often provided.

Uber and Careem offer an alternative because they require their drivers to use cars that are less than three years old.

Uber works with car financ-ing companies in Saudi Arabia to get deals to help its drivers buy newer cars. The use of the app for booking a car also allows a passenger to select a particular driver and some believe that the use of smart phone technology brings a bet-ter class of driver.

There is little difference in price between a journey with Uber or Careem and a local taxi company but the industry does not feel threatened because it caters to a different market - road-side taxi hailers are usually lower income men and do not

own smartphones. "We have very little overlapping demand with Careem and Uber," said an assistant manager at a Jeddah-based limousine company, who wished not to be named.

Careem is however, devel-oping a subsidised rides programme for low-income working Saudi women with the Ministry of Labour.

The high female engagement with such apps also reflects how social attitudes are evolving in the kingdom. The ride-hailing scenario has jumped aided by a zero tolerance policy for driver complaints operated by Uber and Careem.

"I am comfortable in the car with the driver because we are getting a professional service from a company where the driver will be held accountable for any complaints made against him," said Alia Shayef, a 42-year-old banker living in Jeddah.

S Africa’s economy needs radical reforms: ZumaCape Town Bloomberg

South Africa’s ruling party pledged to ensure the country’s black majority

secures a bigger stake in the economy and do more to cre-ate jobs, as it seeks to claw back support lost in the wake of a succession of scandals impli-cating its leader, President Jacob Zuma (pictured).

The African National Con-gress, which has led the country since white-minority rule ended in 1994, marked the 105th anniversary of its found-ing at a rally yesterday at the Orlando stadium in Soweto, near Johannesburg, where it outlined its policy priorities for the year. The party packed out the 40,000-seat venue.

“Radical economic trans-formation remains at the core of our economic strategy,” Zuma said in his keynote address. “More decisive steps must and will be taken to pro-mote greater economic inclusion and to advance own-ership and control and real leadership of the economy by black people.”

The ANC’s support slipped more than 8 percentage points to a record low of 54.5 percent in local government elections in August, with the party ced-ing control of Johannesburg, the capital Pretoria and the south-ern port city of Port Elizabeth to opposition coalitions. Voter disenchantment has centered around Zuma, a 74-year-old

former intelligence operative whose second five-year term as ANC leader is due to end in December this year.

Zuma has faced calls to resign since the Constitutional Court ruled in March that he violated his oath of office by refusing to repay taxpayer money spent on his private home. A campaign to remove him gained impetus on Novem-ber 2, when the graft ombudsman released a report suggesting that he may have breached the code of ethics in his relationship with members of the wealthy Gupta family, who are his friends.

It detailed allegations that the Guptas may have influenced the appointment of cabinet members and received special treatment for a coal business linked to the family. Zuma didn’t directly refer to his tra-vails in his speech, saying only that the media should report fairly and factually. He also highlighted plans to implement a national minimum wage, improve working conditions in the nation’s mines and improve access to land, education and health services.

Egypt's pound appreciates Cairo Reuters

The Egyptian pound strengthened slightly at banks as demand for dol-

lars by importers eased, bankers told Reuters yesterday.

The dollar was being bought for around 18 pounds at most banks, down from around 19 last week. Banks were paying cli-ents around 17.8 per dollar.

"The demand for dollar is less," said one banker. "Banks have reached a point where they don't need to keep raising prices

to attract dollar inflows because there aren't as many dollar requests by clients for the time being," he said, adding that once demand picks up prices will start rising again.

Banks in Egypt had been raising the price to buy dollars from clients in order to attract inflows and cover requests from other clients seeking to buy dol-lars, but they say demand for dollars has eased over the past week.

Business activity in Egypt shrank for the 15th consecutive month in December, although

at a slower pace than the previ-ous month, as inflation caused purchase costs to rise at a near-record pace and new orders to drop as the Egyptian pound weakened against the US dol-lar, a survey showed on Wednesday.

While banks are prioritising imports of essential goods, pri-vate individuals are forced to buy dollars on the black market.

Three traders on the black market said they were selling dollars at a range of 19.60-19.80 per dollar.

US President-elect Donald Trump (centre) exits One World Trade Center following a meeting in Manhattan, New York City, US.

20 MONDAY 9 JANUARY 2017BUSINESS

QATAR STOCK EXCHANGE

QE Index 10,725.98 0.08 %

QE Total Return Index 17,353.92 0.08 %

QE Al Rayan Islamic Index 3,977.94 0.20 %

QE All Share Index 2,940.36 0.10 %

QE All Share Banks & 2,969.39 0.19 %

Financial Services

QE All Share Industrials 3,385.01 0.07 %

QE All Share Transportation 2,572.24 0.21 %

QE All Share Real Estate 2,331.12 0.37 %

QE All Share Insurance 4,596.11 0.94 %

QE All Share Telecoms 1,251.35 0.50 %

QE All Share Consumer 6,011.39 0.47 %

Goods & Services

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

08-12-2017Index 10,725.98

Change 8.64

% 0.08

YTD% 2.77

Volume 6,886,392

Value (QAR) 174,802,819.23

Trades 3,173

Up 17 | Down 17 | Unchanged 0205-01-20167Index 10,717.34

Change 28.56

% 0.27

YTD% 2.69

Volume 13,999,986

Value (QAR) 395,710,478.61

Trades 5,131

GOLD QR137.6989 per grammeSILVER QR1.9458 per gramme

Index Day’s Close Pt Chg % Chg Year High Year LowAll Ordinaries 5805.143 16.915 0.29 5792.9 5720.7

Cac 40 Index/D 4901.74 2.34 0.05 4929.6 4843.93

Dj Indu Average 19942.16 60.4 0.3 19987.6 15450.6

Hang Seng Inde/D 22456.69 322.22 1.46 22228.06 21883.82

Iseq Overall/D 6629.31 49.08 0.75 6585.56 6506.79

Karachi 100 In/D 48713.63 8.64 0.02 49069.05 47878.33

Nikkei 225 Ind/D 19520.69 -73.47 -0.37 19594.16 19277.93

S&P 500 Index/D 0 0 0 2272.82 2245.13

EXCHANGE RATECurrency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 4.4573 QR 4.5200

Euro QR 3.8024 QR 3.8561

CA$ QR 2.7145 QR 2.7673

Swiss Fr QR 3.5504 QR 3.6009

Yen QR 0.0309 QR 0.0315

Aus$ QR 2.6302 QR 2.6831

Ind Re QR 0.0531 QR 0.0542

Pak Re QR 0.0344 QR 0.0351

Peso QR 0.0730 QR 0.0744

SL Re QR 0.0241 QR 0.0246

Taka QR 0.0456 QR 0.0465

Nep Re QR 0.0332 QR 0.0338

SA Rand QR 0.2633 QR 0.2685

21MONDAY 9 JANUARY 2017 BUSINESS

QSE & other Gulf markets rise as Saudi slidesQNA/Reuters

Qatar Stock Exchange’s (QSE) benchmark index gained 8.64 points, or 0.08

percent, when the bourse closed trading at 10,725.98 points yesterday.

The volume of shares traded decreased to 6,886,392 from 13,999,986 on Thursday and the value of shares also decreased to QR174.80m from QR395.71m on Thursday.

Of the 44 companies listed on QSE, shares of 36 saw trad-ing yesterday. From these, 17 gained and 17 companies closed lower, remained two company unchanged indices of four sec-tors ended in green and remaining three sectors ended red yesterday.

QSE Total Return Index increased 0.08 to 17,353.92 points. QSE Al Rayan Islamic Index down 0.20 percent to 3,977.94 points and QSE All Share Index gained to 0.10 per-cent to 2,940.36 points.

Qatar edged up 0.1 percent, supported by property firm United Development, up 0.9 per-cent. But Gulf Warehousing fell 1.2 percent despite recommend-ing an annual cash dividend of 1.60 riyals per share, up slightly from 1.50 riyals in the previous year. It said net profit climbed 11 percent last year.

Other Gulf stock markets

also rose yesterday on the back of firm oil prices and global equities, but profit-taking in sec-tors including petrochemicals pulled down Saudi Arabia.

Dubai's index rose 1.8 per-cent to 3,692 points in the heaviest trading volume in nearly a month, which more than doubled from Thursday's level.

The index climbed above technical resistance at the mid-December peak of 3,659 points; a second straight close above that level would confirm a break, leaving the next chart barrier at the October 2015 peak of 3,740 points.

Seven of the 10 most heav-ily traded issues were low-priced stocks - below 1 dirham - which local retail investors tend to favour. Two of the 10 were insurance firms, with Dubai Islamic Insurance jumping 4.6 percent and Islamic Arab Insur-ance adding 3.4 percent. For the past couple of weeks, some trad-ers have been speculating there may be mergers in the insurance industry following last year's news of a big Abu Dhabi bank-ing merger.

Abu Dhabi's index climbed 0.7 percent with cement firms leading the gains. Gulf Cement jumped 12.9 percent in very thin trade. Saudi Arabia's index fell 0.8 percent. A monthly Reuters poll of Middle East fund

managers, conducted at the end of last month, found many believing Saudi stocks were fully valued after a strong rally in the past few months, and not intend-ing to add to their portfolios in the next three months.

Petrochemical firm Saudi Kayan fell 1.1 percent and Nama Chemicals, which has lost about a third of its value this year after its accumulated losses reached over 75 percent of its capital, slid 8.1 percent.

However, builder Abdullah Abdul Mohsin al-Khodari and Sons rose 0.8 percent after say-ing it had secured a SAR69m ($18.4m) contract from the Min-istry of Environment, Water and

Agriculture. The amount is small but Khodari, like other Saudi construction companies, suf-fered from a severe cut-back in state contract awards last year and the new contract may indi-cate money is flowing again.

In Egypt, the index climbed 0.5 percent although exchange data showed non-Arab inves-tors turning net sellers of stocks, by a tiny margin, for the first time since the Egyptian pound was floated on November 3.

Qalaa Holdings rose 3.6 per-cent after saying on Thursday that it was in talks with inter-ested parties to divest its stake in Rift Valley Railways, one of its major overseas assets.

A file photo of Qatar Stock Exchange located in West Bay.

Samsung executives to be

questioned by prosecutorsSeoul Bloomberg

Samsung Electronics Co executives have been summoned by South

Korean special prosecutors amid a widening influence-peddling scandal that brought about South Korean President P a r k G e u n - h y e ’ s impeachment.

The company’s Co-Vice Chairman Choi Gee-sung and President Chang Choong-ki (pictured) were asked to come in for questioning, Hong Jung-seok, a spokesperson for the special prosecutors office, told Bloomberg News via text message yesterday. Choi and Chang are expected by 10am on Monday and they will come in as testifiers, meaning they have not been accused of wrongdoing. This status may change, Hong said.

The summons follows last month’s parliamentary grill-ing of Jay Y. Lee, de-facto head of Samsung Group, and a co-vice chair of Samsung Electronics, the world’s larg-est maker of mobile devices. Lawmakers fired questions to Lee on whether the country’s biggest conglomerate received

political favors in return for donations to foundations con-trolled by Choi Soon-sil, the president’s friend at the center of the scandal. Lee had denied allegations during the hearing.

A Samsung Group spokes-woman declined to comment when contacted by the Bloomberg News.

In preliminary results posted last Friday, operating income rose to 9.2 trillion won ($7.8bn) in the quarter ended December 31, its biggest profit in three years, the Suwon, South Korea-based company said.

22 MONDAY 9 JANUARY 2017 BUSINESS VIEWS

It's hardly a happy new year for Alibaba Group Hold-ing. Just before Christmas, the US Trade Representative added Alibaba's Taobao e-commerce site to a list of

"notorious markets" that traffic in counterfeits. That's an unseemly place for a publicly held company: Other mem-bers include a Chinese shopping mall that specializes in counterfeit leather goods and a Paraguayan border mar-ket rife with organised crime that hawks everything from fake Ray-Bans to knockoff DVDs.

Alibaba isn't keen to be associated with this motley group. But like Amazon.com, eBay and other online mar-ketplaces dependent on Chinese manufacturers, it has struggled to maintain its integrity against an onslaught of counterfeiters. Without an aggressive crackdown by Chi-na's government, these marketplaces won't stand much of a chance against the fakes.

By many measures, counterfeiting is one of China's leading industrial sectors. A study by the US Chamber of Commerce found that it brings in about $396bn annually, representing some 12 percent of China's total exports and 1.5 percent of GDP. Last year, when just one Chinese prov-ince decided to crack down, it shut 417 "manufacturing and sales locations" with stock worth more than $200m.

This large-scale criminal enterprise has surprisingly staid origins. The global outsourcing boom that started in

the 1980s brought foreign factories and expertise to China. Workers at those fac-tories excelled at making iPhones and other consumer goods, but also quickly

learned how to knock them off. These days, it's not unusual for a new product to face counterfeit competition in China within days of its release -- or, in the case of the iPhone 6s, days before its release. In some instances, as with last year's hover-board craze, the knockoffs prolif-erate so quickly

that the original patent and brand owners are forgotten in favor of generic "made in China" versions.

This parallel economy is no secret. Last year, Alibaba co-founder Jack Ma bluntly told a gathering of retailers that counterfeiters use exactly the same factories and raw materials as legitimate manufacturers. A 2009 diplomatic cable released by WikiLeaks reported that China's eco-nomic downturn at the time was weakening efforts to enforce intellectual-property protections. In one passage, it described how Apple's effort to shut down a MacBook counterfeiting line was rebuffed because it would threaten "100 local jobs."

That's actually pretty sizable for a knockoff operation. I've visited counterfeit iPhone "manufacturers" in Shenzhen that consisted of only a handful of family members. They would expertly assemble parts into reasonable facsimiles for sale via online marketplaces such as eBay, Lazada and Taobao. Though none of these marketplaces welcome coun-terfeiters, they do welcome small Chinese manufacturers - and distinguishing between the two is often difficult.

Good news for investors: distress is spreading. The combination of rising rates and a new political regime in the US will bring about an uptick in corporate restruc-

turings outside the energy space, creating new opportunities for investors in the risk-iest parts of the debt market.

That's one of the conclusions from inter-views with bond traders, bankruptcy lawyers, financial advisers and fixed-income analysts about the outlook for 2017. Invest-ment options will become more diversified as the primarily energy-driven distressed market of recent years will broaden out, according to Tim Coleman, head of restruc-turing at PJT Partners Inc.

Sectors to watch could include utilities, health-care providers and more companies in the struggling brick-and-mortar retail sector.

"We're going to see more ordinary restructurings instead of just a lot of com-modity-driven activity," said Coleman, who has worked on major corporate restructur-ings including Ford and Delta Airlines. "That's probably better for the distressed space."

The dynamic is straightforward: poorly performing companies in struggling or changing industries will have a hard time repaying their debt as borrowing costs rise amid expectations for higher inflation under President Donald Trump. S&P Global Rat-ings expects to see more downgrades than upgrades in 2017.

Restructuring will happen in certain pockets of pain where the broader economic trends exacerbate existing problems and "weed out very quickly those companies that have borrowed too much," according to Mike Barnes, co-chief investment officer at Tri-cadia Capital Management, which oversees $2.8bn. Here's a look at where experts say

those pockets of activity will be. Brick-and-mortar retailers are struggling to attract shoppers to their stores as online competi-tors such as Amazon lure away consumers with free shipping and the convenience of purchasing from their sofas.

Macy's, the largest department-store company in the US, slashed 6,200 jobs and said it will close 100 stores in an effort to slim down. Sears Holdings Corp also announced plans to shutter 150 stores. The troubles will only exacerbate the problems of debt-laden companies like Gymboree and Claire's Stores.

One of the most pressing parts of the sec-tor facing immediate turmoil is teen-fashion retailers, according to Jim Mesterharm, head of North American turnaround and restruc-turing at AlixPartners.

"You certainly have issues in teen fash-ion that are always going to be there, where styles change and sectors get overpopulated and there has to be a shakeout,'' said Mester-harm, who has served as chief restructuring officer at multiple companies including East-man Kodak Co.

The market can expect to see a flood of retail restructurings early in the year, said bankruptcy lawyer Ed Weisfelner, a partner at law firm Brown Rudnick who's been in the field for more than 30 years and worked on high-profile cases that include represent-ing Icahn Partners in the Trump Taj Mahal bankruptcy.

"The first quarter is usually big for retail filers who didn't make enough during Christ-mas,'' he said. "Some of them already hit, like Sports Authority and American Apparel, but my guess is there'll be a lot more smaller and medium-sized ones."

Names to watch are J Crew Group Inc, Claire's, Sears Holdings Corp, Nine West Holdings Inc and Gymboree. Representa-tives for J Crew and Nine West declined to comment, while spokesmen for the other retailers didn't respond to messages.

The stocks and bonds of health-care companies plunged following the US

election in November amid expectations that Republicans would use their majority in Con-gress to significantly change President Barack Obama's health-care overhaul from 2010.

Some areas that could experience the most turmoil include hospitals and pharma-ceutical companies, according to Bill Raine, a portfolio manager at Contrarian Capital Management, which oversees $3.9bn. The firm's flagship fund was up nearly 25 per-cent for 2016 as of mid-December.

"There are definitely going to be winners and losers out of whatever replacement we see for Obamacare," Raine said. "Right now we have very little in health care, but we think that over the next couple years there's probably going to be quite a lot to do.'' Names to watch are Concordia International Corp, Community Health Systems Inc. and Valeant Pharmaceuticals International Inc. Repre-sentatives for the companies didn't respond to requests for comment.

"We're starting to see more in utilities, and those restructurings tend to be big and messy,'' said AlixPartners's Mesterharm.

"As things shake out regarding issues with fossil-fuel consumption and regulation around coal and thermal power plants, we'll see challenges between the regulated and deregulated sides,'' Mesterharm said.

FirstEnergy Corp, Homer City Generation and Terra-Form Power are the nanes to watch.

After decades of steadily increasing globalisation, trade liberalisation has

slowed to a standstill. Congress has delayed ratification of the Trans-Pacific Partnership (TPP) indefinitely. And negotiations around the Transatlantic Trade and Investment Partnership (TTIP) have ground to a halt.

In both the United States and

abroad, these agreements are dogged by widespread concerns over the nontransparent manner in which trade deals are negotiated. Critics argue that bargaining behind closed doors unfairly shuts out the voices of organized labor, advocacy groups and nonmember countries. But defenders argue that private negotiations are the only way to reach a deal.

In a recent study in the British Journal of Political Science, we looked at the consequences of pri-vate bargaining during World Trade Organization (WTO) disputes. The WTO encourages states to consult with one another privately before initiating formal litigation. We investigated who gains the most from private bargaining. We use new data on trade in disputed products and on third-party par-ticipation. Our analysis contains two parts. First, we investigate whether complainant countries enjoy greater trade gains after early (private) settlements.

The WTO requires that any individual state's market conces-sions are extended to all members. So if complainant countries enjoy greater market access than non-participants, we regard this as evidence of trade discrimination.

Second, we test whether third parties - countries that participate as observers in disputes - prevent this discrimination. Having more observers in the room should reduce litigants' opportunities to strike deals that disadvantage other members. Our evidence suggests privacy is a mixed blessing. Shield-ing negotiators from public view does significantly increase likeli-hood that parties can reach an early settlement, precluding the need for costly litigation.

Private bargaining creates opportunities for states to strike deals that exclude other members. We show that, conditional on a set-t lement being reached, complainant countries gain rela-tively more than others do when

negotiations are conducted in pri-vate. Specifically, complainants conducted 60 percent more trade with respondents than do other members. This disparity cannot be attributed merely to complainants having a larger stake in the dispute ahead of time.

This is a problem for the WTO. This finding is worrying since the WTO specifically states that any concession made to one country is extended to all others. But, under private settlement, countries appear able to tailor deals that exclude those who are not in the room.

The good news is that the par-ticipation of third parties appears to prevent discrimination. Having more eyes in the room reduces the odds that countries strike deals that disadvantage other members. In practice, the trade gains from dis-putes are more even in the presence of third parties. But third parties also reduce the odds of an agreement being reached. The

results highlight a difficult trade-off. It's true that privacy during trade negotiations promotes agree-ment. However, private settlement also generates uneven trade gains.

Findings suggest that a review mechanism is required to scruti-nise the outcome of trade negotiations. This is why ratifica-tion of trade treaties is such a harried process. Widespread oppo-sition to TTIP, TPP and Canada-E.U. Trade Agreement in the past year illustrates that countries wishing to retain the benefits of private negotiations must be prepared for the eventual pushback once deals are made public.

Being aware of potential push-back should encourage negotiators to reach deals that will satisfy a majority of their domestic constit-uents. Current controversy around trade agreements is thus not entirely a sign of failure. Rather, it's a necessary counterpart to privacy required to reach an agreement in the first place.

Alibaba's counterfeit woes will not stop any time soon

Adam MinterBloomberg

By many measures, counterfeiting is one of China's leading industrial sectors. A study by US Chamber of Commerce found that it brings in about $396bn annually, representing some 12 percent of China's total exports and 1.5 percent of GDP.

Distress moving to retail and health care as energy woes fade

A customer shops for fresh produce at the Whole Foods grocery story in Michigan, US.

Emma OrrBloomberg

Jeffrey Kucik & Krzysztof J Pelc The Washington Post

Brick-and-mortar retailers are struggling to attract shoppers to their stores as online competitors such as Amazon lure away consumers with free shipping and the convenience of purchasing from their sofas.

The WTO requires that any individual state's market concessions are extended to all members. So if complainant countries enjoy greater market access than nonparticipants, we regard this as evidence of trade discrimination.

Secret negotiations at WTO create a major problem