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Friday, August 18, 2017Dhul-Qa’da 26, 1438 AH
BUSINESSGULF TIMES
CEFC in early talks to buy Rosneft stake
CHINA GIANT | Page 2
Alibaba profi t in Q2 nearly doubles
REVENUE RISE | Page 11
Three airlines ‘jostling for’Air Berlin assets
GOVT EXTENDS $170MN LOAN: Page 12
US talking tough on trade defi cit as Nafta talks beginReutersWashington
The United States drew a hard line for renegotiating the North American Free Trade
Agreement yesterday, demanding major concessions aimed at slash-ing trade defi cits with Mexico and Canada and boosting US content for autos.
At the start of talks in Washing-ton, US President Donald Trump’s top trade adviser, Robert Light-hizer, said Trump was not inter-ested in “a mere tweaking” of the 23-year-old pact, which Trump has threatened to scrap without major changes.
“We feel that Nafta has funda-mentally failed many, many Amer-icans and needs major improve-ment,” Lighthizer, the US trade representative, said at the start of the talks, which refl ected Trump’s relentless criticism that Nafta has caused massive US manufacturing job losses.
Lighthizer put Mexico and Canada on notice that the United States would use its clout as their biggest export customer to wring concessions, saying the United States wanted substantially tough-er rules of origin, including a re-quirement of “substantial US con-tent” for autos.
He also signalled a fi ght over Nafta’s trade dispute settlement system for changes that would al-low more anti-dumping duties against Canada and Mexico, saying this provision should “respect our national sovereignty.”
Canadian Foreign Minister Chrystia Freeland suggested earlier this week that her country could walk away if the United States in-sisted on scrapping the “Chapter 19” trade dispute settlement sys-tem that requires the use of bina-tional panels.
In her opening statement, Free-land took a swipe at the US fi xation on cutting its trade defi cits, say-ing: “Canada does not view trade surpluses or defi cits as a primary measure of whether a trading rela-tionship works.
US-Canada-Mexico trade has quadrupled since Nafta took eff ect in 1994, surpassing $1tn in 2015.
Lighthizer blamed Nafta for a direct loss of 700,000 US manu-facturing jobs since the pact took
eff ect in 1994, a period that co-incides with increasing automa-tion across all industries that has allowed more output with fewer workers.
Auto industry groups have warned against changing the pact’s rules of origin, which govern how much of a product’s components must originate from Nafta coun-tries.
They said the pact has allowed them to build a competitive North American supply base that has helped boost exports of US-as-sembled vehicles globally.
The pact also has massively boosted US farm income by in-creasing agricultural exports to both Mexico and Canada.
“We do not want them to use us as a trading tool and to do harm to the agricultural sector in all three countries,” the president of the American Farm Bureau Federation, Zippy Duvall, told a news confer-
ence yesterday. Corporate chief executives have been sounding “do no harm” warnings on Nafta for months.
Trump’s relationship with business executives became a high-profile issue this week as he disbanded two business advi-sory councils after several CEOs quit in protest over his remarks blaming weekend violence at a rally in Virginia on the protesters who opposed white nationalists as well as the white nationalists themselves.
Canadian and Mexican offi cials at the Nafta talks yesterday de-clined to weigh in.
Asked if there was concern that the political upheaval around Trump could impact the Nafta talks, Mexico’s fi nance ministry undersecretary, Vanessa Rubio, said: “These are internal issues of the United States.” Freeland re-fused to be drawn into the US po-
litical furore during a news con-ference before she returned to Ottawa.
The fi rst round of Nafta talks, which will last until Sunday, are expected to focus on consolidating the proposals and demands from all three countries.
The long list of US demands could make it diffi cult for negotia-tors to reach agreement on mod-ernisation plans that also are ex-pected to include new chapters on digital and energy trade, and en-vironmental, labour and currency standards.
Both Freeland and Mexican Economy Minister Ildefonso Gua-jardo pushed back at the US de-mands and defended Nafta.
Guajardo said Nafta should be modernised to produce more trade among its participants, not less, and needed more than one winner.
“For a deal to be successful, it has to work for all parties involved.
Otherwise, it is not a deal,” Gua-jardo said.
Guajardo later told a news con-ference that it was “too soon” for the three countries to begin nar-rowing their diff erences.
He said it was not a good idea to add country-specifi c content re-quirements to the agreement.
Mexico is keen to maintain pref-erential access for its goods and services to the United States and Canada, where nearly 85% of its exports are shipped.
Its Nafta priorities also include greater integration of the conti-nent’s labour markets and energy sectors.
Weighing heavily over the talks is the 2018 Mexico presidential election.
Mexico has urged all sides to complete the negotiations before the campaign ramps up in Febru-ary to avoid having them become a political punching bag.
Qatar stocks gain as major Gulf bourses end week on firm footing
ReutersDubai
Most major stock markets in the Gulf rose yesterday with
Qatar’s index adding 0.9% to 9,106 points, while shares
of one of Egypt’s property developers dropped as its
quarterly earnings missed estimates.
Saudi Arabia’s index gained strength from positive
company-specific news. The Riyadh index added 0.7% to
7,179 points as all 12 listed banks rose, with Alawwal Bank
adding 2.4%.
Atheeb Telecommunications climbed 2.5% to 8.21 riyals in
its highest traded volume since June 2016 after it swung
to a quarterly net profit of 55.4mn riyals ($14.8mn) from a
loss of 58.1mn riyals a year ago.
But it closed well off its intra-day high of 8.78 riyals.
While some of the profit gain was due to higher revenues,
most was due to the sale of communications towers, the
company said.
Medical equipment seller and hospital operator Al Ham-
madi Co for Development rose 1.6% to 35.80 riyals after
reporting net income of 25.7mn riyals, up 24.8% from a
year ago.
NCB Capital had predicted 26.7mn riyals.
Saudi Steel Pipes gained 1.3% after one of its units won a
250mn riyal contract to manufacture pipes for oil giant
Saudi Aramco.
Elsewhere, the Dubai index rose 0.3% to 3,601 points with
activity dominated by Union Properties, up 3.7%, and
GFH Financial, up 2.8%. Both stocks have been volatile in
recent days, GFH because of a big capital increase and
Union Properties because it posted a big quarterly loss
as it fixed accounting errors; the stock has now regained
the level where it was trading before the announcement
of the loss.
Builder Drake & Scull was Dubai’s top gainer, jumping
6.3%. Earlier this week it reported a slight narrowing in its
quarterly net loss and removed its chief executive without
naming a replacement.
Abu Dhabi National Energy jumped 3.3% in heavy trade.
The stock soared 24% this week; last week the company
said it swung to a tiny profit in the second quarter from a
year-earlier loss, aided by higher oil prices and a one-off
gain.
Dana Gas, however, fell 3.2%, helping drag Abu Dhabi’s
index down 0.1% to 4,493 points.
In Egypt, shares of Sixth of October Development and
Investment fell 1.1% to a four-month low after its second-
quarter net income of 129.8mn Egyptian pounds ($7.3mn)
missed analysts’ estimates.
Egypt’s index fell 0.2% to 13,119 points.
Elsewhere in the Gulf, the Kuwait index added 0.5% to
6,886 points, the Bahrain index decreased 0.9% to 1,299
points and the Oman index fell 0.5% to 4,889 points.
Bob Lighthizer, US trade representative (right), speaks to Chrystia Freeland, Canada’s minister of foreign aff airs, during the first round of North American Free Trade Agreement (Nafta) renegotiations in Washington, DC, on Wednesday. “We feel that Nafta has fundamentally failed many, many Americans and needs major improvement,” Lighthizer said at the start of the talks, which reflected Trump’s relentless criticism that Nafta has caused massive US manufacturing job losses.
Qatar’s index closed adding 0.9% to 9,106 points yesterday.
Egypt’s first bitcoin exchange to begin trading this monthExchange will allow trade in Egyptian pounds; Bitcoin value has surged in recent months; Egypt has not yet regulated digital currency
ReutersCairo
Egypt’s first bitcoin exchange will go live later this month, the founders of Bitcoin Egypt said, linking the Middle East’s most populous country with a cryptocurrency that has surged in value in recent months.Many governments around the world are still considering how to regulate and classify bitcoin, a volatile digital currency that has captured the interest of speculative investors worldwide as its value has soared, roughly quadrupling since the start of 2017 and trading at around $4,400 yesterday.Egypt, most of whose 93mn people have no bank accounts but where electronic payments have grown in recent years, lacks regulations for digital currency.This means local retailers cannot accept it as payment but users on an exchange may be
left to trade freely, potentially cashing in on its ascent. “We’re still waiting on the Egyptian government to set some kind of regulations... Without any laws, bitcoin is not legal money in Egypt,” said Bitcoin Egypt founder Rami Khalil.He said the exchange has picked up about 300 pre-registrations from users ahead of its launch.Egypt’s central bank said in a statement it had not provided any instructions to the banking sector to start trading in bitcoin and that a “virtual currency (is) not guaranteed by the banking sector or the central bank.”The Egyptian Financial Supervisory Authority, the country’s financial markets regulator, did not respond to requests for comment.Khalil and co-founder Omar Abdelrasoul see their platform connecting a community of several thousand bitcoin enthusiasts who will for the first time be able to trade in Egyptian pounds, which have roughly halved in value since November after flotation under an International Monetary Fund loan programme.“Cryptoassets are happening whether (the Egyptian government) joins in or not. And by
not joining they’re missing out on a very big market. Currently bitcoin is about a $70bn market,” said Khalil.Cryptocurrencies allow anonymous peer-to-peer transactions between individual users, without the need for banks or central banks.Bitcoin’s lack of central authority makes it attractive to those wanting to get around capital controls.This has helped it proliferate in China, the world’s most active bitcoin market, but has led some governments to crack down on its use to prevent money laundering.Those same dynamics could propel bitcoin in Egypt, where a shortage of hard currency after an uprising in 2011 sharply restricted bank transfers.Though liquidity at banks has improved and capital controls have been lifted in recent months, businesses still resort to a black market for dollars to obtain currency not available in the formal banking system.“We’re trying to get people used to the idea of bitcoin, to ready the market so that in a couple of years we will reach a greater number of users.But for now we are trying to let people know what cryptocurrency is,” said Abdelrasoul.
New Egyptian law to allow fi rms to register in hoursReutersCairo
Egypt is hoping that long-awaited regulations ap-proved yesterday to its
new investment code will draw in fresh and needed cash from abroad as the country pushes ahead with reforms.
Investment Minister Sahar Nasr told Reuters in an inter-view that the law could now be active within days.
“Establishing (a company) will literally now take hours. It used to take months. This is massive,” she said.
The new investment law includes a raft of incentives, from tax breaks and rebates on projects established in under-
developed areas to government support for connecting utilities.
Speaking to Reuters by phone immediately after the cabinet’s approval, Nasr said the new law would be active once it passes through the Council of State, an adminis-trative judicial body that pro-vides a fi nal legal review.
President Abdel Fattah al-Sisi ratifi ed the more general law in June but the regulations spell out who is eligible for in-centives and how they work.
Egypt netted about $8.7bn in foreign direct investment in the 2016-17 fi scal year that ended in June and the govern-ment hopes to push this to over $10bn this year.
Nasr said the law had al-ready piqued foreign interest.
“You look at the months since the president has rati-fi ed the law and there are com-panies that have been asking their legal advisers about it; from the United Arab Emir-ates, Saudi Arabia, the United Kingdom, France, and Germa-ny,” she said.
She named French cosmet-ics group L’Oreal, cosmetics brand Nivea, owned by Ger-many’s Beiersdorf Global, and US candymaker Mars as expressing strong interest to invest.
As part of the law, a new in-vestment services centre will be operational starting next month that allows investors to legally establish companies online and make payments, said Nasr.
BUSINESS
Gulf Times Friday, August 18, 20172
China’s CEFC in talks toacquire stake in RosneftReutersHong Kong/Beijing
CEFC China Energy, which has grown from a niche oil trader to a sprawling energy conglom-
erate, is in talks to acquire a stake in Russian state oil giant Rosneft, three people with direct knowledge of the discussions said.
The people said senior executives at both companies were in preliminary discussions, though there have already been two meetings between CEFC chairman Ye Jianmin and Rosneft CEO Igor Sechin since July.
It was not immediately clear how much CEFC would invest in Rosneft, nor if the Chinese group would buy new shares or existing stock in the par-ent company.
One person familiar with Rosneft said it would be open to selling CEFC a stake in its retail business, which in-cludes almost 3,000 fi lling stations, around 150 oil storage complexes and over 1,000 gasoline tankers.
Russia has overtaken Saudi Arabia as China’s biggest oil supplier, and Ros-neft is by far Russia’s biggest and most infl uential oil company, with strong ties to the Kremlin.
Having access to Rosneft’s reserves and refi ning capacity would boost CE-FC’s ambitions to become a major in-ternational energy merchant and rival to traders like Glencore.
CEFC, which has a rare contract to store part of China’s strategic oil re-serve, has expanded aggressively, hir-ing offi cials from state-owned energy fi rms and acquiring a series of overseas assets since 2015.
The Russian government, through holding company Rosneftegaz, owns 50% of Rosneft, after it sold a 19.5% stake to Glencore and Qatar Invest-ment Authority (QIA) for more than €10bn ($11.8bn) in December.
It would need to issue a special gov-ernment decree if it were to lower its holding in Rosneft below 50%.
BP owns 19.75% of Rosneft.Asked to comment on the stake ac-
quisition talks, a CEFC spokesman said the two fi rms signed a cooperation agreement on August 2, when Sechin visited CEFC’s headquarters in Shang-
hai. That deal was a broad cooperation on everything from oil and gas explo-ration to fi nancial services, according to CEFC’s website.
The spokesman did not comment on whether those discussions involved a stake purchase.
A Rosneft spokesman said the com-pany saw China as a strategic part-ner and was cooperating with a wide range of Chinese companies, including CEFC.
“We consider the Chinese market as the most promising and actively de-veloping. The company will increase its cooperation with Chinese partners in all business areas and make pub-lic statements accordingly as joint
projects are developing,” the company said in an e-mail.
“Rosneft does not hold its shares and, therefore, does not sell its shares.”
Reuters could not immediately reach Rosneftegaz for comment.
CEFC would be the fi rst privately held Chinese fi rm to invest in a major oil giant.
Usually, Beijing would tap China’s three big state-owned oil players for strategic investments.
With ambitions to become Chi-na’s next oil giant, CEFC paid nearly $900mn for a 4% stake in an onshore fi eld majority-owned by Abu Dhabi National Oil Co (ADNOC), and has agreed to buy a 51% stake in KMGI,
a unit of Kazakh state fi rm KazMu-nayGaz, and a 20% stake in New York-based fi nancial services fi rm Cowen Group Inc. The United States and the European Union have imposed sanc-tions on Russia over its annexation of the Crimea region from Ukraine: Ros-neft, whose CEO is seen as a close ally of Russian President Vladimir Putin, is the only company sanctioned by both.
The sanctions will be a key concern for CEFC before any further serious decision, and could pose fi nancing challenges, said one senior Chinese source familiar with the discussions.
“The company is now engaging law-yers to evaluate thoroughly the legal hurdles sanctions may bring about,”
the person said, adding it was too soon to discuss valuations.
CEFC and Rosneft have over the past 3-4 years discussed various coop-eration opportunities from upstream investment in Russian oilfi elds to oil trade, but only recently did Rosneft initiate the idea of a stake investment, said another senior Chinese source briefed on the matter.
CEFC has assigned a task force of around 40 people to work on the in-vestment, a third person said.
The two companies could announce a deal as soon as early next month, when senior Russian offi cials are ex-pected to visit Beijing, that person added.
From leader to loser: Australia risks missing next LNG waveBy Clyde RussellLaunceston, Australia
Should the arrival of the last major piece
of kit in Australia’s $180bn liquefied
natural gas (LNG) spree be a cause for
celebration or for a wake?
It may seem that the arrival of the Ich-
thys Venturer floating production, storage
and off loading facility would be worthy of
breaking out the champagne.
The vessel, which will be moored
some 220 kilometres (132 miles) off the
northwestern coast as part of Inpex’s
Ichthys project, is the final piece of the
jigsaw that completes eight massive new
LNG ventures.
These projects, when in full produc-
tion, will see Australia overtake Qatar
as the world’s largest producer of the
super-chilled fuel, and become an energy
export superpower when one considers
the country is already the world’s biggest
shipper of coal and a significant producer
of uranium. While these accomplishments
are worthy of a toast or two, there are also
factors that serve to put a dampener on
the party.
The first is that Australia’s rise to the
top of the global LNG tree may be short-
lived, as Qatar has announced plans
to boost its output beyond the 85.7mn
tonnes of LNG capacity already operating
or scheduled to start up by the end of
next year.
Qatar announced on July 4 it planned
to raise its capacity by 30%, which would
take it to around 100mn tonnes per an-
num, enough to take back the crown from
Australia.
The problem for Australia is not the
loss of prestige, it’s the fact that Qataris
are able to boost capacity by doing
brownfield expansions of existing facili-
ties, which is considerably cheaper than
building new projects from scratch.
No new LNG project has reached a final
investment decision in Australia since
2012, even though at one stage there
were five ventures with a capacity of
31.5mn tonnes a year under consideration.
The collapse in spot Asian LNG prices
to the current $6.20 per million British
thermal units (mmBtu) from over $20 at
the start of 2014 has no doubt played a
part in delaying, or cancelling projects.
However, there is some hope on this
front that by the mid-2020s the LNG mar-
ket will move from its current oversup-
plied state back to deficit, mainly as the
result of new consumers in countries such
as Sri Lanka and Bangladesh, as well as
growth in major markets like China.
This means a developer with some con-
fidence that LNG demand will grow in the
coming years would have to be looking
at sanctioning a new project soon, or risk
losing out to competitors.
Having led the last LNG boom, it
seems odd that Australia is possibly in
one of the weakest positions to be part
of any new wave of development. This
is especially the case since nothing that
made Australia so attractive has really
changed.
The country still has low sovereign risk,
a well-established legal system, a skilled
workforce, generally supportive political
leaders and a robust regulatory system.
But the weaknesses that become ap-
parent during the massive building boom
of the last seven years are still present.
These include high-costs of developing
new projects given their remoteness, the
workforce is skilled but pricey with some
of the highest wages in the industry, com-
pliance costs are high and there has been
a small ratcheting up of the political risk.
The federal government of Prime
Minister Malcolm Turnbull has instigated
what is essentially a natural gas reserva-
tion policy, under which it can direct
natural gas away from LNG plants to the
domestic market if it feels the domestic
price has risen too high.
While it’s likely that this mechanism
will be seldom used, it is a factor that is
off -putting to potential investors.
But far more important than the poli-
tics is the economics, and it seems that
large-scale, multi-billion dollar projects
are increasingly hard to justify in an era of
lower prices.
This means that Australia, if it is to
compete with Qatar’s brownfield, low-cost
expansion, will have to become more
innovative.
Several suggestions were put forward
by Deloitte Australia’s oil and gas leader
Bernadette Cullinane at the South East
Asia Australia Off shore and Onshore Con-
ference in Darwin on Wednesday.
Among the key points raised was the
need for oil and gas companies to collabo-
rate on new projects, rather than going it
alone as has been the case in the current
construction boom.
Saving capital by using more floating
LNG platforms and sharing resources was
another point made by Cullinane.
But perhaps the most important point
was whether Australia should consider
adopting the US model of tolling and fixed
liquefaction fees.
This would allow some companies to
develop natural gas fields and others to
build liquefaction units and charge a fee
for turning the gas into LNG.
That would cut down on the capital
intensity of developing new projects and
allow for more joint ventures to share
costs and risks.
While there has been some talk of this
in the industry in Australia, this sort of
cooperation seems far from imminent.
This means Australia may well fall be-
hind projects in East and West Africa, Rus-
sia, Canada and the United States when it
comes to the next generation of LNG.
Clyde Russell is a columnist for Reuters.
The opinions expressed here are those of
the author.
The shadow of a worker is seen next to a logo of Rosneft oil company at the central processing facility of the Rosneft-owned Priobskoye oil field outside the West Siberian city of Nefteyugansk, Russia. Russia has overtaken Saudi Arabia as China’s biggest oil supplier, and Rosneft is by far Russia’s biggest and most influential oil company, with strong ties to the Kremlin.
Wisconsin lawmakers debate $3bnincentives for Foxconn factoryReutersTaipei
The Wisconsin State As-sembly yesterday will consider a $3bn incentive
package for a proposed liquid-crystal display factory by Tai-wan’s Foxconn, the fi rst vote on the deal by a chamber of the state’s Republican-controlled legislature.
Foxconn, an electronics man-ufacturer formally known as Hon Hai Precision Industry Co Ltd, hopes to open a $10bn plant in 2020 at a 1,000-acre site in southeastern Wisconsin.
Foxconn is a major supplier to Apple Inc for its iPhones.
Wisconsin’s Republican gov-ernor, Scott Walker, ordered the state legislature into special ses-sion on August 1 to consider the incentive package, which would award Foxconn $3bn over 15 years in mostly cash incentives.
Foxconn, Walker and other leaders announced the deal on the incentives last month in a White House ceremony.
It must now be approved by lawmakers.
The 20mn-square-foot LCD plant would initially employ 3,000 people, but Walker and Foxconn said the company could ultimately employ 13,000 at the site.
Proponents, including Presi-dent Donald Trump, US House of Representatives Speaker Paul Ryan and Walker, have touted the project’s investment potential and job creation, including an expected 22,000 ancillary and 10,000 construction jobs.
But critics including some Democrats have attacked the plan as corporate welfare, too expensive, rushed and poten-tially harmful to the environ-ment.
On Monday, the Wisconsin Assembly’s jobs and economy committee voted 8-5, along party lines, to advance Foxconn legislation.
The committee rejected 22 amendments proposed by Dem-ocrats, including required mini-mum pay of $20 an hour for full-time employees at the plant.
It also rejected a proposal that at least 70% of employees must be Wisconsin residents and that a study of regional transportation needs should be conducted.
After the Assembly votes at the end of yesterday’s debate, the legislation still needs ap-proval by the Wisconsin State Senate and by the joint fi nance committee, which has both As-sembly and Senate members, before going to the governor.
The fi nance committee and state Senate are Republican-controlled also.
Wisconsin would not break even on the incentive package for at least 25 years, according to a legislative analysis released last week.
Foxconn, an electronics manufacturer formally known as Hon Hai Precision Industry Co Ltd, hopes to open a $10bn plant in 2020 at a 1,000-acre site in southeastern Wisconsin
Hyundai plans long-range premium electric car in strategic shiftReutersSeoul
Hyundai Motor Co said yesterday it was
placing electric vehicles at the centre of its
product strategy – one that includes plans
for a premium long-distance electric car as
it seeks to catch up to Tesla and other rivals.
Like Toyota Motor Corp, Hyundai had
initially championed fuel cell technology as
the future of eco-friendly vehicles but has
found itself shifting electric as Tesla shot to
prominence and battery-powered cars have
gained government backing in China.
Toyota is now also working on longer
distance, fast-charging electric vehicles,
local media have reported.
The South Korean automaker is planning
to launch an electric sedan under its high-
end Genesis brand in 2021 with a range of
500km (310 miles) per charge.
It will also introduce an electric version
of its Kona small sport utility vehicle (SUV)
with a range of 390km in the first half of
next year. “We’re strengthening our eco-
friendly car strategy, centring on electric
vehicles,” executive vice president Lee
Kwang-guk told a news conference, calling
the technology mainstream and realistic.
The automaker and aff iliate Kia Motors
Corp, which together rank fifth in global
vehicle sales, also said they were adding
three plug-in vehicles to their plans for eco-
friendly cars, bringing the total to 31 models
by 2020.
Underscoring Hyundai’s electric shift,
those plans include eight battery-powered
and two fuel-cell vehicles – a contrast to
its 2014 announcement for 22 models, of
which only two were slated to be battery-
powered.
Hyundai also confirmed a Reuters report
that it is developing its first dedicated elec-
tric vehicle platform, which will allow the
company to produce multiple models with
longer driving ranges.
Last year, it launched its first mass-mar-
ket pure electric car IONIQ, but the vehicle’s
per-charge driving range is much shorter
than off erings from Tesla and General
Motors.
Hyundai unveiled a near production
version of its new fuel cell SUV with a driv-
ing range of more than 580km per charge,
compared with the 415km for its current
Tucson fuel cell SUV. The mid-sized SUV will
be launched in Korea early next year, fol-
lowed by US and European markets.
A fuel cell electric bus is slated to be
unveiled late this year, while a sedan-type
fuel cell car is also planned.
Even so, analysts noted that gaining trac-
tion with fuel cells was going to be a long
hard slog partly due to a lack of charging
infrastructure.
“Hyundai will achieve economies of scale
for fuel cell cars by 2035 at the earliest,”
said Lee Hang-koo, a senior research fellow
at Korea Institute for Industrial Economics
& Trade.
“Before that, Hyundai has no choice but
to rely on battery cars,” he said.
Hyundai launched the world’s first mass-
produced fuel cell vehicle in 2013, dubbed
the Tucson Fuel Cell, but sales trailed
Toyota’s rival off ering, Mirai.
Hyundai has sold about 862 of Tucson
Fuel Cell vehicles since its 2013 launch,
while Toyota sold some 3,700 Mirai Fuel Cell
vehicles since its 2014 launch.
In Korea, there are 10 fuel cell charging
stations, only one tenth of 100 in Japan,
Hyundai said.
Hyundai Motor’s new fuel cell SUV is seen during a media event in Seoul. The company unveiled a near production version of its new fuel cell SUV with a driving range of more than 580km per charge, compared with the 415km for its current Tucson fuel cell SUV.
BUSINESS3Gulf Times
Friday, August 18, 2017
ReutersSydney
Australia said yesterday it would strengthen its money laundering laws, including bringing bitcoin providers
under the government’s fi nancial intelligence unit, days after a fresh scandal at one of the country’s biggest banks.
The government said a coming bill would be the fi rst stage of reforms to strengthen the country’s Anti-Money Laundering and Coun-ter Terrorism Financing Act.
“The threat of serious fi nancial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously ex-ploit them.
These measures ensure there is nowhere for criminals to hide,” Minister of Justice Michael Keenan said, without specifying when the legislation would be introduced.
The bill will also aim to bolster the investi-gative and enforcement powers of the fi nan-cial intelligence agency AUSTRAC.
The announcement comes just days after the agency accused the Commonwealth Bank of Australia of “serious and systemic” breach-es of money laundering laws.
But the move is more than two years after global watchdog Financial Action Task Force (FATF) found signifi cant defi ciencies in Aus-tralia’s anti-money laundering framework.
The next and more challenging phase of leg-islative reforms in Australia will be to extend the rules to lawyers, accountants, real estate agents and dealers in high-value goods. Under Australian regulations, one can pay millions in cash for precious stones or a prime property without having to identify themselves or the source of their funds. Australia had agreed in 2003 to extend strict controls to these sectors, but has yet to act on those promises.
“Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and we expect regulated businesses in Australia to comply with our comprehensive regime,” Keenan said. The digital currency exchange sector, which includes bitcoin, will be regulated for the fi rst time, Keenan added. The Australian Digital Currency & Commerce Association welcomed the reform, saying it will increase safeguards and provide regulatory certainty to digital currency businesses. Earlier this year, Aus-
tralia launched a world-fi rst private-public partnership called ‘Fintel Alliance’ to encour-age banks and other fi nancial institutions to provide intelligence to regulators.
However, allegations against CBA that it failed to provide more than 53,000 transac-tion alerts to AUSTRAC on time has put a question mark over those eff orts. Yesterday,
Keenan said that the private sector was an es-sential partner in ensuring Australian busi-nesses are not exploited by criminals. He did not say whether the bill was in response to the CBA case. “Australia was seen as a place where there was a real cooperation between regulatory authorities, law enforcement and fi nancial institutions,” said Kieran Beer, New
York-based chief analyst at the Association of Certifi ed Anti-Money Laundering Specialists.
“This kind of cooperation is getting insti-tutionalised and gathering momentum in the UK. But there will be a backlash against the perceived failures, if proven, in the CBA case and some will argue that Fintel-like alliances may be an illusion.”
Australia plans stronger money laundering laws
Customers of the Commonwealth Bank, Australia’s No 1 lender, use Automatic Teller Machines (ATMs) outside a branch located in central Sydney. Australia said yesterday it would strengthen its money laundering laws, including bringing bitcoin providers under the government’s financialintelligence unit, days after a fresh scandal at one of the country’s biggest banks.
Japan’s exports rise in Julyon robust shipments to USReutersTokyo
Japan’s exports rose for an eighth straight month in July on robust shipments to the United States and a boost from a weak yen,
suggesting the economy is carrying strong mo-mentum through to the second half of the year.
The data underscores the Bank of Japan’s view the world’s third-largest economy is showing increasing signs of strength as private consump-tion adds momentum to an export-led recovery.
Imports rose for the seventh straight month on brisk demand for personal computers and digital cameras from China, highlighting the strength of domestic consumption that served as a key driver of Japan’s economic growth in the second quarter.
“Exports aren’t particularly strong in volume terms but will gradually recover ahead.
The import fi gures, on the other hand, un-derscore the strength of domestic demand,” said Takeshi Minami, chief economist at Norin-chukin Research Institute.
“Domestic demand is gaining momentum and will likely drive Japan’s economic recovery.”
Exports to the United States rose 11.5% in July from a year earlier to mark the sixth straight month of gains.
That pushed up Japan’s trade surplus with the United States by 9.1% from a year ago to ¥647bn ($5.88bn).
Japan’s trade surplus has been a target of crit-icism by US President Donald Trump’s admin-istration, which has called for cutting the US trade defi cit under his protectionist “America First” policies. Total exports increased 13.4% in July from a year earlier, Ministry of Finance data showed yesterday, roughly in line with a median market forecast for a 13.6% gain.
The rise, which followed a 9.7% increase in June, was driven by solid auto shipments to the United States and demand from China for elec-trical equipment, the data showed.
But the gain in exports was more modest in volume terms at 2.6%, suggesting the value of exports was infl ated by the yen’s declines during the month. Total imports were up 16.3% in July from a year earlier, roughly in line with a me-dian market forecast for a 17% gain. It followed a 15.5% rise in June.
Shipments to Asia were up 14.8% in July from a year earlier, while those to China rose 17.6% to mark a ninth straight rising month.
Japan’s manufacturing activity grew in July at the slowest pace in eight months as export de-mand weakened, a private survey showed earlier
this month, casting some doubt on the strength of Asian trade. “Exports clearly rose in July, in-dicating that a slight decline in second-quarter exports was a brief interruption of an ongoing uptrend,” said Yoshimasa Maruyama, chief mar-ket economist at SMBC Nikko Securities.
Japan’s economy expanded at the fastest pace in more than two years in the second quarter as
consumer and company spending picked up, highlighting a long-awaited bounce in domestic demand. Negative external demand, or exports minus imports, shaved off some growth in the quarter as shipments of information-technolo-gy goods to Asia slowed, though many analysts expect exports to remain fi rm in coming quar-ters.
China targets Taobao, othere-commercesites in VPN crackdownReutersBeijing
Chinese authorities have issued a warning to the
country’s top e-commerce platforms, including
Alibaba Holding Group Ltd’s Taobao.com, over the
sale of illegal virtual private networks that allow
users to skirt state censorship controls.
Five websites have been asked to carry out
immediate “self-examination and correction” to
remove vendors that sell illegal virtual private
networks (VPNs), according to a notice posted by
the Zhejiang provincial branch of the Cyberspace
Administration of China (CAC), China’s top cyber
regulator.
Some of them were ordered to halt new user
registrations, suspend services and punish ac-
countable staff .
“The (CAC) has ordered these five sites to im-
mediately carry out a comprehensive clean-up of
harmful information, close corresponding illegal
accounts... and submit a rectification report by a
deadline,” the regulator said yesterday.
This is the latest in a series of measures taken
by China to secure the Internet and maintain strict
control over content.
Surveillance is being further tightened ahead
of the 19th National Congress of the Communist
Party later this year, when global attention will be
on news from the world’s No 2 economy.
Recently, China said it was investigating its top
social media sites, including WeChat and Weibo,
for failing to comply with cyber laws.
It has already taken down popular celebrity
gossip social media accounts and extended
restrictions on what news can be produced and
distributed by online platforms.
This is in addition to its campaign to remove
VPN apps.
Regulators have clamped down on dozens of
local VPNs, and ordered Apple Inc and other app
stores to remove foreign VPN apps that allow
users to access foreign websites censored by the
government.
China has also passed laws, which will come
into eff ect from early 2018, that require telecom-
munications providers and tech firms to play a
greater role in removing VPNs.
On Chinese online marketplaces, including
the country’s largest e-commerce site Taobao,
vendors sell a range of tools to set up personalised
VPNs that are harder to track and block than some
other services.
A labourer works in a container area at a port in Tokyo. Japan’s exports to the US rose 11.5% in July from a year earlier to mark the sixth straight month of gains.
Samsung and Foxconn toback cable-free phone techReutersSeoul
A startup backed by Tony Fadell, one of the fathers of the Apple iPod, plans to announce it is working with Samsung Electronics Co Ltd, Foxconn parent Hon Hai Precision Industry Co Ltd and others on a new way for mobile phones to transfer large amounts of data without using wires or Wi-Fi connections.Chief executive Eric Almgren said his Campbell, Calif-based company called Keyssa has raised more than $100mn from Fadell and the venture arms of Samsung and Intel Corp, among others.The company’s “kiss” technology allows two computing devices to be held near each other and transfer large files such as movies in just a few seconds.The goal is to remove the need for cumbersome and bulky cable connectors inside devices like phones and laptops, which are growing ever-lighter and thinner.If Keyssa is successful, the wireless data transfer technique could eventually be available in a wide range of devices.Keyssa announced last October, together with Intel Corp, that it had come up with a design that could be embedded in so-called two-in-one laptops which feature detachable touch-screens.The alliance with Samsung and Foxconn is aimed at creating a design for mobile phones.Shankar Chandran, head of the venture arm at Samsung Electronics, noted that the management team at Keyssa had previously developed the technology behind the HDMI
standard for video connections.Samsung hopes Keyssa’s technology might become similarly widespread.“Standards tend to get ecosystems built around them in a fairly complicated way,” Chandran said in an interview. “What’s needed is a bunch of industry players across the value chain saying they’re going to build to that standard. And that’s really what we have.”One of the first places a wireless transfer feature could show up is the Essential Phone, the device designed by Andy Rubin, the father of the Android mobile operating system.Essential, which has raised $330mn in venture capital, plans to announce a launch date for its $699 phone later this week.Playground Global, the venture fund Rubin oversees, is an investor in both Essential and Keyssa.Essential has said its phone will feature wireless data transfer, but it is not clear where the technology has come from.Keyssa says it has filed more than 250 patents around the technology, including nearly 50 of which that have been issued in the United States.Almgren said Keyssa met with Rubin and Essential executives several times, including at the Consumer Electronics Show in 2016, to discuss licensing Keyssa’s proprietary technology, but no agreement had been reached.For its part, Essential said it “considered Keyssa as a component supplier for Essential Phone and chose to proceed with a diff erent supplier that could meet our performance specifications for the product.”
A startup backed by Tony Fadell, one of the fathers of the Apple iPod, plans to announce it is working with Samsung Electronics, Foxconn parent Hon Hai Precision Industry and others on a new way for mobile phones to transfer large amounts of data without using wires or Wi-Fi connections.
BUSINESS
Gulf Times Friday, August 18, 20174
China kickstarts privatisation push with Unicom’s share saleBloombergShanghai
The $11.7bn share sale by China’s second-largest mobile carrier signals the beginning of a gov-
ernment push to further privatise its bloated state-owned enterprises.
Copycat deals similar to the one an-nounced late Wednesday could follow as privatisation emerges as a key theme in the government’s broader ambition to overhaul its SOEs – a sector that generates more revenue than the size of Japan’s economy. The idea of infus-ing private capital is meant to help bring in expertise needed to make state fi rms more effi cient.
“This is a whole new level of experi-ment,” Jeff eries Hong Kong Ltd analyst Edison Lee said. “If this one succeeds, the government will probably push it to other SOEs.” According to the plan, more than a dozen investors – includ-ing tech giants Tencent Holdings Ltd and Alibaba Group Holding Ltd – will buy a 35% stake in Shanghai-listed China United Network Communica-tions Ltd in a deal that will raise al-most 78bn yuan ($11.7bn). Though the unlisted, state-run parent will remain the biggest owner, it will relinquish the majority shareholding it held since the company’s inception.
State behemoths including China Life Insurance Co and China Struc-tural Reform Fund Corp will also par-ticipate in the share sale. Unicom’s presentation material also listed CRRC Corp as a strategic investor but the train maker said in a statement yesterday that it didn’t participate in the deal. A Unicom representative said a CRRC affiliate will be making the investment.
Shares of some SOEs rose amid op-timism other state enterprises will follow Unicom. In Shanghai, China Nuclear Engineering surged as much as 10% and China Eastern Airlines Corp climbed as much as 5.8%. In Hong Kong, Cosco Shipping Holdings Co advanced as much as 7.3%.
Under the proposal, China Unit-ed’s unlisted parent will see its stake shrink to 37% from 63%. The new private investors will gain four seats on the board, the state-owned inves-tors will gain another four seats, while Unicom will keep two seats. The re-maining five seats will be taken up by independent non-executive directors, according to Unicom.
“Private investors will have the same say as their state-owned coun-terparts, which is unprecedented in China’s history of SOE reform,” Lee said. “The plan is very positive, and the fundraising size reached the top end of market expectations.”
Other investors include e-com-merce firm JD.com Inc, retailer Sun-ing Commerce Group Co and China’s Uber-slayer Didi Chuxing. Tencent,
the gaming and messaging giant, said it was delighted to join the govern-ment campaign and that the company looks forward to cooperating with the mobile carrier.
“The mixed ownership reform scheme of China Unicom, in our view, is a very monumental step in the eco-nomic development of the country,” said Tencent President Martin Lau. “We are actually very honoured to participate in this scheme.”
Not everyone was as enthusiastic about the deal.
“We are a bit cautious about public companies taking part in these types of plans,” said Kirk Boodry, an ana-lyst at New Street Research. “If they
weren’t making those investments before it’s hard to imagine this is a completely independent decision.”
Left out of the deal was China Uni-com (Hong Kong) Ltd, whose market value has jumped by almost a third this year to more than $36bn before the stock was suspended from trad-ing in Hong Kong on Wednesday. China United shares had risen 80% since October before they were sus-pended from trading in Shanghai in April, pending the announcement. Both companies are units of unlisted China United Network Communica-tions Group Co – also known as Uni-com Group.
The Hong Kong shares will remain
halted until further notice, the com-pany said yesterday, hours after say-ing they would resume trading to-day. The Shanghai-listed shares will resume trading by Monday, according to the company.
As to Unicom, bringing in new in-vestors will help the company bolster innovation and allow it to “transform from a traditional mobile carrier to a comprehensive information and tech-nology operator,” chairman Wang Xi-aochu told reporters in Hong Kong on Wednesday. The share sale will also align the interests of shareholders and employees, he said.
During the past few months, Uni-com has signed cooperation agree-
ments with Baidu Inc, Alibaba and Tencent, moves that have generated speculation that the internet compa-nies would get involved in the govern-ment mixed-ownership plan.
Unicom’s parent was among six SOEs picked by the nation’s eco-nomic planner last year for a pilot programme in mixed-ownership – China’s preferred term for private capital’s investments into state firms.
In September, China’s National De-velopment and Reform Commission also picked China Southern Power Grid Co, Harbin Electric Corp, China Nuclear Engineering, China Eastern and China State Shipbuilding Corp to take part in the pilot programme.
Cathay Pacific shares rise as analysts say worst is overReutersSingapore
Cathay Pacific Airways Ltd shares rose as
much as 6% yesterday, as analysts said
they believed losses had bottomed for
the Hong Kong airline after it reported
its worst first-half result in at least two
decades.
The carrier, in a briefing with analysts
on Wednesday, said the corporate travel
market was recovering and passenger
yields, a proxy for ticket prices, would see
a smaller drop in the second half than the
5.2% fall in the first six months.
“We see some bottom out eff ect in
some routes in terms of lower fares,”
Cathay chief customer and commercial
off icer Paul Loo said in a webcast of the
briefing, which was not open to members
of media. “It is from a low base but at
least the continuous decline is narrow-
ing.” These comments spurred optimism
among analysts, with Crucial Perspec-
tive’s Corrine Png saying “the worst
was nearly over” for the carrier, that in
recent years has seen its market share on
international routes eroded by aggres-
sively expanding mainland Chinese and
Gulf airlines.
Poor fuel hedges and its lack of a
budget arm have also hurt Cathay’s
competitiveness.
Its first-half loss was worse than
expected, but the outlook will improve
from next year with forward bookings
suggesting stronger passenger revenue
growth, Png said.
Overall airfares in Asia are expected
to rise in 2018, by 2.8% according to
the Global Business Travel Association,
as stronger economic growth drives
demand for business travel.
On Wednesday, Cathay reported a
six-month loss of HK$2.05bn ($262mn),
versus a profit of HK$353mn a year ago,
putting it on track for its first ever back-
to-back annual loss since it was founded
in 1946.
“The first half was an ugly combination
of one-off s and non-structural costs,”
CAPA Centre for Aviation analyst Will Hor-
ton said. “The good news is that the core
airline operation excluding fuel hedging
did surprisingly well given even greater
over-capacity in all long-haul segments.”
Broker Daiwa upgraded Cathay to a
“hold” recommendation from a “sell” due
to recovery in cargo yields, while Jeff eries
maintained a “buy”, saying losses had
bottomed.
In an update on its July performance
released after the market close yesterday,
Cathay said business traff ic had contin-
ued to improve but passenger yields
had remained under pressure during the
month.
The airline has cut 600 jobs at its
head off ice in Hong Kong, the biggest job
losses in nearly two decades, as part of a
broader plan to help return to profit-
ability.
Cathay’s Loo said the carrier will
launch seasonal routes to destinations
like Barcelona, Spain and Christchurch,
New Zealand as part of its strategy.”We
will fail early if necessary but we will take
more risks in trying out new destina-
tions.”
Cathay shares closed about 1% higher
at HK$11.80, after earlier hitting a 10-day
high of HK$12.42, versus the benchmark
index that closed down 0.2%.
The $11.7bn share sale by China’s second-largest mobile carrier Unicom signals the beginning of a government push to further privatise its bloated state-owned firms.
Uber hires former Goldman banker to fi re up Asia business
BloombergSingapore
Uber Technologies Inc is hiring Goldman Sachs Group Inc’s former
chairman for Southeast Asia to lead the development of its business from Japan to Singa-pore.
Brooks Entwistle, who an-nounced his retirement in 2012 after two decades at the US investment bank, will become Uber’s chief business officer in the Asia Pacific and a key member of the ride-hailing gi-ant’s regional leadership. His responsibilities will include forging partnerships and au-tonomous vehicle alliances across the region, excluding India. He’s joining Uber from Everstone Group, a private eq-uity and real estate firm with offices in India and Singapore, where he served as chief execu-tive officer.
Uber is hiring an American financier with deep Asian ex-perience as well-funded local rivals undermine its business. Didi Chuxing drove Uber out of China last year and Grab – now its fiercest regional rival – raised $2bn last month from Didi and SoftBank Group Corp in what was the largest-ever venture funding in Southeast Asia. Uber’s rapid expan-sion across the region has also spurred clashes with local gov-ernments including in the Phil-ippines, where it’s fighting a government-imposed suspen-sion.
“Uber is a once-in-a-gen-eration company,” he said in an interview in Singapore, add-ing that the conversation to join Uber started in earnest in April. “I wouldn’t have joined if I didn’t see there was a huge opportunity.”
The world’s most valuable startup remains a strong con-tender in more than 100 cities across 18 Asian countries. En-twistle, a mountaineer who’s reached the summit of Everest, joined Goldman in 1989 as an analyst. Before leaving in 2012, he’d set up the investment bank’s India business in 2006 and remained country head un-til early 2011. He also worked as a UN election supervisor in Cambodia in 1992 and 1993.
He will report to David Rich-ter, Uber’s global head of busi-ness in San Francisco.
A Cathay Pacific passenger plane flies in Hong Kong. The carrier, in a briefing with analysts on Wednesday, said the corporate travel market was recovering and passenger yields, a proxy for ticket prices, would see a smaller drop in the second half than the 5.2% fall in the first six months.
Entwistle: Set to forgepartnerships and autonomous vehicle alliances across Asia, excluding India.
China Unicom shares still halted amid confusion over fundraisingReutersHong Kong
China Unicom’s two main units said yesterday their shares would remain suspended until further notice, amid uncertainty over details of a $11.7bn fundraising that is expected to be a model case for revamping state firms with private capital.The development comes one day after the state-owned group announced it was raising the funds from about a dozen investors, including tech giants Alibaba Group, Tencent Holdings, Baidu, and JD.com.The continued suspension runs counter to expectations that trading would resume soon after details of
the fundraising were released. China Unicom’s Hong Kong shares were suspended on Wednesday, while trading in its Shanghai-listed shares has been halted since early April.One of the investors named by China Unicom denied yesterday that it is participating in the deal.And, adding to market confusion, the deal announcement was taken down from the Shanghai bourse website although it remained on the Hong Kong bourse’s website as well as the website of the Hong Kong unit.An off icial at China Unicom Hong Kong Ltd said the announcement was taken down from the Shanghai exchange due to “technical issues”, but he did not elaborate.The company said trading in its shares
will remain suspended pending an announcement.China United Network Communications, the Shanghai-listed unit, did not immediately respond to Reuters requests for comment.In a stock exchange filing late on Wednesday, the company said it would issue documents on the share placement within three trading days and would resume trade.The Shanghai bourse also did not immediately respond to a faxed request for comment.One of the 14 investors which were named by China Unicom’s Hong Kong unit, rail equipment maker CRRC Corp Ltd, denied making an investment through the purchase of shares in the Shanghai-listed unit.
“According to verification results, the company did not participate in the afore-said subscription,” it said in a notice to the stock exchange, referring to media reports about it being one of the investors.A China Unicom spokesman in Hong Kong, however, said CRRC’s clarification to the exchange stemmed from the fact that a wholly-owned unit of CRRC was the investor in the telecoms group and not the listed company itself.CRRC off icials in China could not immediately be reached for a comment after regular business hours.The China Unicom fundraising is part of Beijing’s push for state-owned enterprises to be revitalised with private capital.China Unicom is among the first batch
of state-owned enterprises slated for mixed-ownership reforms.The funds would be raised by the group’s Shanghai unit via sale of new as well as existing shares, and investors will get a combined 35.2% stake in that company and will be allotted three board seats.Edison Lee, analyst at brokerage Jeff eries, said the flip-flop regarding the China Unicom deal announcement does not “aff ect the overall ownership reform plan”.”But yes, it is weird. The announcement appears rushed,” he said. Jeff eries earlier said in a note the diversified nature and representation of private investors was unprecedented for a Chinese state-owned enterprise, signifying the degree of support Unicom receives from the government.
BUSINESS5Gulf Times
Friday, August 18, 2017
BloombergTokyo
As the Japanese stock market is whipsawed by the latest news on North Korea, sagging support for
Prime Minister Shinzo Abe and currency swings, some analysts see recent under-performance as an opportunity to buy.
Japan’s longest string of quarterly economic expansion in more than a dec-ade and continued growth in corporate earnings have emboldened bullish equity strategists. Comparatively low valuations and a rise in dividend yield in the past few months are also helping sentiment, as Tokyo stocks lag far behind the dou-ble-digit gains of Asian peers from Hong Kong to Mumbai this year.
“Buying on dips could prove an attrac-tive investment strategy,” wrote Naohiko
Miyata, chief technical analyst at Mit-subishi UFJ Morgan Stanley Securities Co, in a note Monday. “Japanese stocks now also have support from company fundamentals, not just technical charts.”
Topix companies beat analyst profi t estimates by an average of 15% in the lat-est quarter. Earnings per share rose 27% year-on-year, continuing a trend of grad-ual increases over the past fi ve years. Re-sults have improved despite a strength-ening of about 13% in the yen versus the dollar since June 2015.
While profi ts have risen, the Topix’s price-to-earnings ratio has fallen to 15 times, below the 21 times level where the S&P 500 Index and Stoxx Europe 600 Index are both currently trading. Mean-while, the Nikkei 225 Stock Average’s 14-day relative strength index fell to 32.3 on Monday, near the level of 30 that some traders see as a sign that shares are due
for a rebound. “We still expect the market to rise as investors recognise sustained earnings improvement,” wrote Chisato Haganuma, chief equity strategist at Mitsubishi UFJ Morgan Stanley, in a re-port. First-quarter results “have shown sales growth, with help from improved economic growth in Japan and overseas, and cost-cutting stances. On the whole, earnings estimates are being revised up-ward.”
Not everyone is convinced that Japa-nese shares are set for gains. Hitoshi Asaoka, a strategist at Asset Manage-ment One, sees the Nikkei 225 closing between 19,000 and 20,000 at year-end. Japan’s blue-chip gauge slipped 0.1% to 19,702.63 yesterday, paring its year-to-date gain to 3.1%.
“It’s diffi cult for Japanese shares to rise much further from here,” said Asaoka. “The latest GDP numbers were a little too
good, and economic growth will probably peak out globally around the summer.”
One factor that has capped gains for Japanese stocks is the negative impact of the stronger yen on buying by foreigners, but “the infl uence of the yen on profi ts is far smaller than most investors think,” says Nicholas Smith, a strategist at CLSA Ltd in Tokyo. The market has also taken a hit from “sabre-rattling” over North Ko-rea and concern over possible challenges to Abe’s leadership, Smith wrote in an August 10 report.
The political turmoil shouldn’t be a problem either way, Smith said. Waning support for the cabinet could pressure Abe to speed labour reform, implement fi scal stimulus and forge trade deals, the CLSA strategist wrote, and even if that fails, “Japan is likely to get a prime minis-ter with very similar economic plans and a revitalised dream.”
Bulls are adamantunloved Japan stocks are primed for gains
A woman walks past an electronic monitor displaying graphs of Japan’s various stock indices outside a securities firm in Tokyo (file). Japan’s longest string of quarterly economic expansion in more than a decade and continued growth in corporate earnings have emboldened bullish equity strategists.
Asian rally falters as dollar languishesAFPHong Kong
The dollar struggled to recover yesterday in the wake of dovish Federal Reserve min-utes highlighting concern over low infl ation
and crumbling corporate support for US President Donald Trump.
The greenback was hovering around 110 yen as safe haven assets were reinvigorated, with Asian equities treading water to broadly hold gains from a rally earlier in the week on easing tensions over North Korea.
The Nikkei ended marginally down with auto-makers and banks in retreat after Fed policymakers hinted at a slower pace of interest rate hikes at their July meeting, with Japanese shares also dragged lower by the stronger yen.
Some members of the US central bank argued it could aff ord to “be patient” before raising rates again, according to minutes that showed policy-makers focused on persistent weak infl ation.
Hong Kong ended lower despite market heavy-weight Tencent gaining almost 2%.
The tech giant, which owns hugely popular so-cial media platform WeChat, beat expectations to report surging quarterly net profi t to see its fastest revenue growth in seven years.
Stocks in Shanghai saw healthy gains, ahead of results from Chinese e-commerce leviathan Ali-baba. “USD weakness followed the release of (Fed) minutes that indicated ‘many’ members feared in-
fl ation will stay lower for longer,” said Michael Mc-Carthy, chief market strategist at CMC Markets.
Wall Street on Wednesday shrugged off devel-opments in Washington to rise above 22,000 even as Trump disbanded a pair of business advisory boards after several chief executives resigned over his widely criticised response to a white suprema-cist rally in Charlottesville.
The dollar inched higher against the euro in af-ternoon forex trade yesterday after the fresh turbu-lence in Washington had piled more pressure on the US unit. “If you thought the president lacked the necessary key back room operators to implement the White House economic agenda, well things just got worse,” said Oanda’s Stephen Innes.
“Predictably the dollar sagged, and safe havens were back in vogue.”
Investors are now awaiting the latest European Central Bank minutes due later yesterday.
Policymakers have signalled they are consider-ing phasing out quantitative easing as the eurozone economy gathers pace.
On commodities markets, crude prices saw modest rises following a sharp decline overnight after Energy Information Administration data showed US production climbed to its highest level in more than two years, heightening worries about a supply glut. “Market participants have been con-cerned that rising production in North America will continue to counterbalance Opec and Russia’s eff orts to freeze output to support oil prices,” said Margaret Yang Yan, an analyst at CMC Markets Singapore.
Hong Kong dollar shunned as traders chase higher yuan yieldsBloombergHong Kong
The big ball of money in Hong Kong is rolling to the yuan, and the local
dollar is suffering.After years of underper-
forming, the offshore yuan is near its highest level versus the city’s currency in more than 12 months. Yuan deposits in the former British colony have stabilised after halving in the past two years, while buying mainland bonds is more lucra-tive: benchmark 10-year China government debt yields more than twice as much as its coun-terpart in Hong Kong.
“The market is trying to look for opportunities for carry us-ing yuan as the long currency because of its higher yield compared to Hong Kong dollar or US dollar products provided in the city,” said Iris Pang, an economist at ING Groep NV. If the yuan’s advance continues, there will be “a lot of such carry activities” across the border in the coming year, she said.
The yuan has climbed more than 5% against the Hong Kong dollar in 2017 following a 13% slide over the last three years. The city’s currency has been weighed by a wider interest-rate discount to that of the US dollar, and it’s down nearly 1% against the greenback year-to-date, passing the mid-point of its HK$7.75-HK$7.85 trad-ing band. The Philippine peso is the only other major Asian currency to weaken against the greenback in that period.
The Hong Kong dollar was down 0.09% at HK$1.1705 per offshore yuan as of 5:31pm lo-cal time yesterday.
Lenders in Hong Kong may have sold up to HK$112bn ($14bn) of the local currency into US dollars and converted that into yuan in the first four months of 2017, according to Bank of America Merrill Lynch.
Hong Kong banks are de-ploying most of their yuan funds as loans, Ronald Man, a North Asia rates and foreign-exchange strategist at BofAML, wrote in a note. If they con-
tinue to sell the local currency, money market rates will remain elevated, forward points will turn more negative and the spot exchange rate will come under further pressure, he said. Man expects the Hong Kong dol-lar to end this year at HK$7.83 compared with HK$7.82 now.
Even the Hong Kong Mon-etary Authority’s plan to issue extra bills, a move that would drain liquidity, is unlikely to reverse the exchange rate’s de-preciation, according to Gold-man Sachs Group Inc News of the plan on Aug. 9 sent the Hong Kong dollar up the most since January 2016 after it neared a 10-year low against the US dollar the previous day, but it has dropped back since.
Here’s a look at the HKMA’s options as the currency weak-ens.
The onshore Chinese cur-rency’s Sharpe ratio – a meas-ure of returns adjusted for price swings – against the Hong Kong dollar was 7 in the past three months, the highest among Asian exchange rates. The offshore yuan’s ratio was 4.7, the third highest, according to data compiled by Bloomberg. This suggests the yuan offers the some of the best carry trade opportunities against the Hong Kong exchange rate in Asia.
Another lure for investors to switch to the yuan is the chance of buying onshore assets, a process helped by China’s new bond-trading link with Hong Kong. The yield on 10-year Chinese government bonds is at 3.63%, compared with 1.57% on Hong Kong debt of the same tenor.
“This type of yield arbitrage is in play right now, and it’s very favourable for flows to go that way – to bonds, yuan and even some of the undervalued equity plays,” said Stephen Innes, a senior currency trader at Oanda Corp
He said the switch is being made by a mix of regional high net worth clients, and home-office and smaller institutional clients. “The market is going to be so much larger on the mainland – the party only has started.”
Sensex rises to 1-week high as soft ware exporters gain
BloombergMumbai
India’s benchmark equity index climbed to its highest level in a week as shares of technology companies advanced.The S&P BSE Sensex rose 0.1% to 31,795.46 in Mumbai, with software exporter Infosys Ltd providing the biggest boost to the gauge. The
stock rose 4.7%, its biggest advance in nearly nine months after the company said its board will consider buying back shares. Eleven of the 19 sectoral indexes compiled by BSE Ltd ended in the green.“A decline in cash levels will help improve the overall return on equity, and investors are now expecting a return of capital from technology companies,” Abhimanyu Sofat, vice president at India Infoline Ltd said by phone.
Emerging stocks, FX sail higherReutersLondon
Emerging stocks sailed higher for a sec-ond day and many currencies fi rmed yesterday after diminishing US inter-
est rate prospects and political upheaval in Washington hurt the dollar while choppy commodity prices cast a shadow over some markets.
MSCI’s emerging market stocks gained 0.5% to hit a one-week high.
In Asia, heavyweights South Korea and Taiwan as well as Chinese mainland stocks rose around half a per cent.
Manila’s bourse advanced 0.3% after second quarter data from the Philippines showed the economy grew by a faster-than-expected 6.5% thanks to a strong industrial sector and construction boom.
Bourses in South Africa, Turkey and Rus-sia as well as emerging Europe all added be-tween 0.3-0.5%.
The gains came after the dollar hit a soft patch on Wednesday when minutes from the last US Federal Reserve meeting showed a lengthy discussion about recent soft infl a-tion readings, with some calling for a halt to rate hikes until it was clear the trend was transitory.
Adding to the pressure on the dollar was Trump’s disbanding of two high-profi le business advisory councils after eight exec-utives quit in protest over his remarks about the weekend violence in Virginia, casting further doubt over how much he may be able to deliver for corporate America.
“Upcoming Fed balance sheet reduction concerns seem to have moved backstage for emerging markets overnight, given the Federal Reserve Open Market Committee minutes’ doubts about future infl ation, just making Fed guidance that much more dif-fi cult to read,” said Simon Quijano-Evans, a strategist at Legal & General Investment Management.
Some currencies strengthened against the tepid dollar.
China’s yuan chalked up some of the big-gest gains, fi rming 0.3% and snapping a four-day losing streak.
Oil prices edged back above the $50 per barrel threshold following their 1% tumble
on Wednesday, providing some support to Russia’s rouble which fi rmed 0.2%.
But South Africa’s rand was treading wa-ter, shedding initial gains as copper futures dipped into the red, retreating from the 32-month peak hit earlier in the day.
Meanwhile policymakers at Egypt’s cen-tral bank are seen leaving key interest rates unchanged this month after hiking them unexpectedly by 200 basis points for the
second time in a row in July to rein in roaring infl ation. Infl ation had soared to 35% in July on the back of energy subsidy cuts agreed with the International Monetary Fund as a condition of its $12bn three-year loan.
Egypt has lifted key interest rates by 7 percentage points since it fl oated the pound in November as part of a $12bn International Monetary Fund programme aimed at boost-ing the economy.
LATEST MARKET CLOSING FIGURES
Zad Holding CoWidam Food CoVodafone Qatar
United Development CoSalam International Investme
Qatar & Oman Investment CoQatar Navigation
Qatar National Cement CoQatar National Bank
Qatar Islamic InsuranceQatar Industrial Manufactur
Qatar International IslamicQatari Investors Group
Qatar Islamic BankQatar Gas Transport(Nakilat)Qatar General Insurance & ReQatar German Co For Medical
Qatar Fuel QscQatar First Bank
Qatar Electricity & Water CoQatar Cinema & Film Distrib
Qatar Insurance CoOoredoo Qsc
National LeasingMazaya Qatar Real Estate Dev
Mesaieed Petrochemical HoldiAl Meera Consumer Goods Co
Medicare GroupMannai Corporation Qsc
Masraf Al RayanAl Khalij Commercial Bank
Industries QatarIslamic Holding Group
Gulf Warehousing CompanyGulf International Services
Ezdan Holding GroupDoha Insurance Co
Doha Bank QscDlala Holding
Commercial Bank PqscBarwa Real Estate Co
Al Khaleej Takaful GroupAamal Co
Al Ahli Bank
75.00
66.50
8.86
16.05
8.88
8.59
64.50
70.20
135.90
55.80
43.00
55.60
47.20
96.80
16.92
30.80
8.02
104.70
7.41
190.90
25.00
68.30
90.00
13.19
10.13
13.16
150.50
78.40
74.90
40.15
12.71
93.20
48.35
47.60
20.07
12.00
13.70
30.30
18.05
29.95
33.00
15.56
10.72
31.50
0.00
0.76
-0.45
0.25
-0.11
2.02
0.62
-0.99
1.80
-2.11
0.00
-0.18
1.51
3.42
-1.11
-2.84
-0.99
-0.76
0.27
0.05
0.00
1.04
-0.99
-1.12
-0.59
0.00
0.33
1.16
0.00
0.25
-0.08
2.42
0.73
1.71
-0.30
2.21
0.00
-0.66
-0.06
0.50
0.61
1.70
-0.46
0.00
-
6,727
2,848,324
226,590
382
702
116,724
15,409
109,396
1,530
-
92,823
1,230
63,594
167,685
3,910
6,396
24,799
45,511
18,922
-
6,212
59,763
252,680
64,589
38,098
1,561
7,703
-
208,073
294
139,896
7,175
10,944
108,602
48,182
477
281,861
6,458
24,058
72,451
1,708
5,015
-
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 International 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 Gassim Investment HoldingFiling & 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
18.22
18.03
6.37
0.00
12.54
30.89
18.31
12.84
26.68
0.00
18.24
11.90
27.25
62.06
12.33
27.23
33.48
33.68
36.95
13.98
0.00
23.63
33.93
19.17
27.46
68.10
26.03
46.13
150.89
24.93
54.99
31.62
7.99
19.94
26.85
20.07
16.30
35.67
45.62
115.92
24.69
67.98
98.06
8.49
8.25
92.46
16.71
17.90
17.57
20.79
17.01
34.87
157.24
50.11
21.74
16.29
16.22
27.10
22.05
13.21
14.84
46.00
13.17
10.32
6.67
29.93
11.11
0.00
10.89
28.26
47.55
13.39
23.98
0.00
34.08
10.81
46.61
14.68
16.41
14.14
42.05
32.05
20.50
118.85
32.30
6.75
47.34
8.73
19.97
21.15
8.45
0.00
18.60
12.79
32.15
123.42
9.38
0.44
0.06
1.27
0.00
0.32
0.68
1.10
-2.65
3.61
0.00
0.77
-0.75
-1.12
-0.23
-2.53
0.22
0.24
-0.62
0.03
-0.57
0.00
1.90
0.18
0.47
0.40
8.22
-0.23
0.15
0.06
1.76
1.91
-0.38
-0.37
1.32
-0.07
1.36
0.37
0.48
-4.30
-0.15
-1.36
0.12
0.38
0.35
3.25
0.06
0.54
0.90
-0.23
-0.86
1.37
3.72
0.67
-0.02
0.23
1.18
1.44
-0.11
-0.32
0.08
3.20
-0.43
1.15
0.10
1.83
0.57
0.09
0.00
0.93
-0.98
-0.85
0.45
1.61
0.00
0.80
0.00
3.65
1.03
1.67
0.07
-0.12
2.30
-0.24
0.59
0.56
0.30
0.70
-0.46
-0.10
1.15
0.00
0.00
0.54
-0.31
-0.03
0.95
0.11
231,467
354,774
24,534,674
-
1,244,344
486,719
235,214
827,455
90,562
-
133,201
678,990
302,400
40,716
300,994
48,724
58,569
104,050
314,260
965,648
-
831,656
101,534
67,660
947,406
2,112,228
54,000
14,163
31,918
224,533
439,726
167,237
1,114,607
396,170
145,339
398,883
441,975
67,942
875,011
11,600
471,370
124,494
2,513,945
3,124,261
5,039,940
28,051
70,793
501,596
279,014
170,249
356,954
663,598
3,179
16,124
226,202
146,737
1,126,553
24,766
1,055,571
590,029
2,272,839
25,416
592,456
233,842
3,770,556
176,407
298,936
-
1,008,517
188,422
7,928
361,755
9,729
-
321,353
-
2,030,522
47,638
364,158
337,172
25,377
1,269,169
48,121
6,124
399,676
586,782
57,419
3,709,600
267,676
1,221,022
214,438
-
268,498
378,033
245,592
1,053
120,422
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
Walaa Cooperative InsuranceBank Al-Jazira
Al Rajhi BankSamba Financial Group
United Electronics CoAllied Cooperative Insurance
Malath InsuranceAlinma Tokio Marine
Arabian Shield CooperativeSavola
Wafrah For Industry And DeveFitaihi Holding Group
Tourism Enterprise Co/ ShamsSahara Petrochemical Co
Herfy Food Services Co
6.67
18.56
23.32
13.44
22.40
0.00
8.03
16.41
78.52
28.15
22.04
29.10
14.00
26.70
28.16
12.45
63.52
24.66
44.49
15.16
22.01
24.40
46.98
48.80
22.19
13.50
30.29
13.27
50.50
-0.30
-0.96
-2.30
0.15
2.56
0.00
0.50
0.49
2.51
0.54
-1.61
-1.52
0.07
0.00
-1.02
0.73
1.05
0.86
3.42
-0.46
-1.39
-0.37
0.58
2.31
1.09
0.07
1.07
-0.08
0.66
979,260
267,969
1,745,302
87,084
5,142,766
-
1,001,378
24,441,807
225,697
72,956
266,386
1,500
227,189
-
211,940
1,683,789
2,699,363
528,531
745,287
339,624
217,512
78,854
51,597
139,454
268,299
305,849
539,791
794,901
16,175
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 CoAan Digital Services Co
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 Holding 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 ContractingJiyad Holding Co Ksc
Qurain Holding Co
0.00
0.00
297.00
109.00
153.00
0.00
45.00
187.00
40.00
46.90
569.00
316.00
418.00
732.00
360.00
244.00
245.00
44.80
34.60
70.40
600.00
83.50
23.90
114.00
19.00
38.00
782.00
0.00
124.00
0.00
34.70
0.00
20.80
0.00
38.00
715.00
90.00
44.50
0.00
47.90
195.00
0.00
85.90
159.00
35.20
0.00
141.00
0.00
28.50
0.00
448.00
51.00
60.50
72.00
89.80
0.00
125.00
180.00
75.00
79.00
126.00
89.90
0.00
71.20
480.00
280.00
0.00
60.50
36.00
47.00
850.00
88.00
846.00
28.50
77.80
250.00
32.90
147.00
0.00
95.90
0.00
50.00
90.00
0.00
508.00
0.00
395.00
37.60
420.00
76.50
980.00
349.00
0.00
42.90
108.00
370.00
365.00
45.10
255.00
75.00
36.00
47.00
15.80
48.50
175.00
46.10
53.20
0.00
87.90
34.90
42.00
38.60
370.00
35.80
65.00
47.20
123.00
97.00
26.00
0.00
0.00
51.90
560.00
0.00
0.00
0.00
0.00
3.13
0.00
0.00
0.00
2.27
6.86
0.76
4.92
0.00
0.00
0.48
0.41
0.28
-0.41
0.00
9.54
-0.57
0.57
0.00
3.09
-0.42
0.88
-0.52
-0.26
-0.38
0.00
0.81
0.00
0.58
0.00
-0.95
0.00
8.57
-7.14
0.00
0.23
0.00
0.84
0.00
0.00
0.00
7.43
-0.85
0.00
-2.76
0.00
0.00
0.00
0.00
0.00
0.83
1.41
0.00
0.00
1.63
-2.70
0.00
7.92
0.00
0.00
0.00
0.28
0.00
0.00
0.00
0.00
0.28
1.08
0.59
0.00
-0.35
-1.72
-0.13
0.00
0.00
2.80
0.00
0.00
0.00
0.00
-2.17
0.00
0.59
0.00
-1.25
0.00
0.00
0.00
0.00
0.58
0.00
0.47
0.93
0.00
0.00
2.50
2.00
0.00
0.00
2.17
1.94
-2.02
0.00
3.83
2.31
0.00
-1.12
0.00
0.00
-0.52
0.27
2.29
0.00
-0.63
6.03
3.19
2.77
0.00
0.00
-0.76
-1.41
0.00
0.00
-
-
86,600
2,200
13,800
-
64,990
91,532
111,337
1,325,670
1,845
76,919
6,099
501,553
61,444
454,406
470,713
1,000
440,650
72,575
100,000
30,500
712,629
3,213,268
225,654
2,131,300
1,613,684
-
2,185,970
-
25,150
-
562,413
-
56,500
3,637
20,011
250
-
75,150
200
-
95,500
244,675
24,275
-
10,000
-
52,110
-
53,010
102,400
48,600
2,000
29,055
-
124,474
750
200
1,333,067
161,432
100
-
424,555
526
1,014
-
1,000
4,777,849
146,000
400
13,101
612,917
201,500
1,414
116,084
3,000
6,544,540
-
43,386
-
162,206
90,000
-
8,143,265
-
751
1,001
376,400
36,009
2,500
10,000
-
7,820
177,928
161,169
1,000
413,100
348,800
18,528
853,993
823,585
2,684,683
736,001
200,000
4,684,140
2,329,480
-
2,900
1,006
190,002
1,715,068
28,500
47,588
151
539,300
10,000
842,185
2,621,237
-
-
840,236
60,241
-
-
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 CompanyOman 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
0.47
1.00
3.55
0.12
0.13
0.17
0.11
1.34
0.16
0.21
0.69
1.05
1.88
4.35
0.23
0.60
1.33
1.38
2.50
0.17
0.89
0.18
0.12
2.21
0.42
0.48
0.34
0.00
1.08
1.91
0.28
0.17
1.66
0.15
0.15
0.52
0.40
0.00
0.85
0.10
0.00
1.00
0.16
3.64
0.49
0.42
0.42
1.57
0.00
0.10
0.15
0.04
5.00
0.11
0.05
0.00
0.27
0.15
0.69
3.75
0.21
0.08
0.86
0.56
0.12
0.18
0.49
0.11
1.25
0.12
0.00
0.31
0.07
0.11
0.20
10.50
0.16
0.07
0.39
0.11
0.10
0.00
0.49
0.18
0.31
0.20
1.28
0.19
0.26
0.03
0.26
0.36
0.14
0.09
0.21
0.00
0.00
0.00
0.00
0.00
-2.86
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
-1.33
0.00
0.00
0.00
-0.47
0.00
0.00
0.00
2.86
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.03
0.00
0.00
0.00
0.00
0.00
0.00
-0.93
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.41
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.88
0.00
0.00
0.00
0.00
1.39
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.63
-1.38
0.00
-1.40
36
-
-
-
-
20,916
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,600
-
37,288
-
24,388
-
-
-
854,658
-
-
-
-
2,000
-
-
-
-
-
1,255,989
-
-
-
-
-
-
35,829
-
-
-
-
-
-
-
-
-
6,951
-
-
-
-
-
-
-
-
-
-
100,000
-
-
-
-
40,000
-
-
-
-
96,176
-
-
-
-
-
-
-
-
-
-
-
-
-
2,101,568
275,822
514,107
24,000
OMAN
Company Name Lt Price % Chg Volume
Areej Vegetable Oils SaocAloula 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
Oman Oil Marketing Co-Pref
0.00
0.53
0.28
0.05
0.75
0.12
0.15
0.00
0.10
1.40
0.30
0.10
0.06
0.31
0.55
0.25
0.14
0.07
0.88
0.14
1.13
0.09
0.14
0.17
0.79
0.05
0.59
0.25
0.00
0.00
0.00
0.00
0.00
-2.40
0.00
0.00
0.00
0.00
0.00
1.98
1.59
0.00
0.00
0.00
-0.69
1.37
0.00
0.00
0.00
0.00
-1.41
-2.94
0.00
0.00
0.00
0.00
-
-
-
-
-
194,603
-
-
30,000
-
1,381
1,186,600
153,785
-
-
50,000
26,371
110,000
-
-
-
-
247,561
840,000
-
-
-
-
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 FujairahFirst Abu Dhabi Bank Pjsc
Methaq Takaful InsuranceManazel Real Estate Pjsc
Invest BankIntl Fish Farming Co Pjsc
Insurance HouseGulf Pharmaceutical Ind Psc
Gulf Medical ProjectsGulf Cement Co
Fujairah Cement IndustriesFujairah Building Industries
Foodco Holding PjscFirst Gulf BankFinance House
Eshraq Properties Co PjscEmirates Telecom Group Co
Emirates Insurance Co. (Psc)Emirates Driving Company
Dana GasCommercial Bank Internationa
Bank Of SharjahAxa Green Crescent Insurance
Arkan Building Materials CoAlkhaleej InvestmentAldar Properties Pjsc
Al Wathba National InsuranceAl Khazna Insurance Co
Al Fujairah National InsuranAl Dhafra Insurance Co. P.S.
Al Buhaira National InsurancAl Ain Ahlia Ins. Co.
Agthia Group PjscAbu Dhabi Ship Building Co
Abu Dhabi Natl Co For BuildiAbu Dhabi National Takaful C
Abu Dhabi National InsuranceAbu Dhabi National Hotels
Abu Dhabi National Energy CoAbu Dhabi Islamic Bank
1.74
2.00
1.61
4.37
1.86
1.30
1.45
1.36
3.85
1.50
1.05
4.10
1.02
2.57
0.75
3.70
0.68
90.00
0.58
6.20
0.70
4.20
0.54
2.46
2.95
4.60
3.00
0.00
0.88
0.52
2.52
1.50
0.83
2.40
2.40
0.99
1.15
1.56
6.00
0.00
1.60
0.83
18.00
6.00
7.30
0.60
1.14
1.20
0.62
0.64
1.31
2.32
12.75
0.32
300.00
3.84
2.20
47.00
5.37
2.30
0.51
5.00
3.60
3.24
0.62
3.65
0.00
0.00
0.00
-0.91
0.00
0.00
0.00
0.00
0.00
0.00
6.06
0.00
0.00
1.18
-2.60
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.67
-1.08
0.00
0.00
1.15
0.00
-5.26
2.04
0.00
0.00
13.21
0.00
0.00
0.00
0.00
0.00
0.00
1.22
0.28
0.00
0.00
-3.23
0.00
0.00
0.00
1.59
0.00
-0.43
0.00
0.00
0.00
0.00
0.00
0.00
0.19
4.55
2.00
0.00
0.00
0.00
3.33
0.00
525,598
-
-
54,650
-
-
-
759,196
-
-
187,180
-
-
789,337
93,029
-
1,584,642
-
-
-
-
-
-
308,000
100,000
178,041
-
-
477,445
1,863,095
17,000
50,000
-
-
10,100
-
-
-
-
-
-
99,897,777
687,653
-
-
9,001,191
-
200,000
-
2,320,130
-
5,088,237
-
-
-
-
-
-
2,043
2,141
729,000
-
-
-
52,683,882
55,758
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 Holding BscInvestcorp Bank -$Us
Inovest Co BscGulf Monetary Group
Gulf Hotel Group B.S.CGfh Financial Group Bsc
Esterad Investment Co B.S.C.Delmon Poultry Co
Bmmi BscBmb Investment Bank
Bbk BscBankmuscat Saog
Banader Hotels CoBahrain Tourism CoBahrain Telecom Co
Bahrain Ship Repair & EnginBahrain National Holding
Bahrain Kuwait InsuranceBahrain Islamic Bank
Bahrain Flour Mills CoBahrain Family Leisure Co
Bahrain Duty Free ComplexBahrain Commercial Facilitie
Bahrain Cinema CoBahrain Car Park Co
Arab Insurance Group(Bsc)-$Arab Banking Corp Bsc-$Us
Aluminium Bahrain BscAlbaraka Banking Group
Al-Salam BankAl-Ahlia Insurance Co
Ahli United Bank B.S.C
0.00
0.32
0.00
0.00
0.28
0.00
0.00
0.26
0.00
0.00
0.65
0.13
0.11
0.13
8.65
0.43
0.00
0.52
0.46
0.11
0.00
0.78
0.00
0.40
0.00
0.06
`
0.20
0.00
0.00
0.00
0.15
0.38
0.00
0.75
0.73
1.55
0.00
0.51
0.29
0.51
0.42
0.09
0.00
0.71
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.52
0.00
0.00
-3.85
0.00
0.00
0.00
0.00
-6.12
0.00
0.00
-0.64
0.00
-0.50
0.00
0.00
0.00
-0.97
0.00
0.00
0.00
0.00
0.00
0.00
-1.32
-0.68
0.00
0.00
0.00
0.00
1.00
0.00
1.09
0.00
-0.70
-
300,000
-
-
30,700
-
-
50,000
-
-
10,115
25,000
75,000
800,000
62,300
54,654
-
10,000
3,578,848
33,060
-
30,000
-
10,000
-
1,810,669
-
73,231
-
-
-
17,608
8,950
-
63,145
14,326
6,068
-
1,918,520
160,000
258,854
180,000
325,000
-
469,805
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
46.70
34.50
429.00
215.00
124.00
0.00
336.00
0.00
36.20
0.00
44.90
267.00
79.90
852.00
168.00
83.00
187.00
60.00
4,350.00
165.00
94.00
74.90
40.40
1,185.00
0.00
0.00
51.70
0.00
49.50
0.00
42.50
0.00
55.00
0.00
574.00
90.50
0.00
68.90
34.70
80.00
214.00
0.00
122.00
38.70
1,200.00
71.10
390.00
63.80
366.00
507.00
0.00
567.00
36.70
0.00
59.00
790.00
1,990.00
0.00
45.50
2.41
1.47
-0.46
-0.92
3.33
0.00
-1.47
0.00
0.00
0.00
6.90
0.00
3.77
-5.02
0.00
2.47
0.00
-1.32
1.16
0.00
0.00
0.00
1.51
-0.42
0.00
0.00
-1.71
0.00
1.02
0.00
1.67
0.00
1.85
0.00
0.00
2.84
0.00
6.00
-0.57
0.00
0.47
0.00
0.83
4.03
-4.00
1.57
0.00
-0.16
0.27
3.89
0.00
-0.35
0.82
0.00
0.00
0.00
-0.50
0.00
2.71
47,000
2,068,716
492,699
2,121,930
30,000
-
292,792
-
223,775
-
16,710
38,661
14,870
38,216
2,438,653
1,260
960
10,000
116,788
11,450
4,510
8,628
440,000
3,004
-
-
1,715,415
-
277,000
-
411,000
-
19,248
-
30,057
5,115,267
-
623,333
746,879
11,508
20,490
-
644,628
24,384
1
238,238
12,500
512,001
350
1,378,606
-
2,342,835
1,526,634
-
3,000
11,000
3,690
-
2,099,656
KUWAIT
Company Name Lt Price % Chg Volume
BUSINESS
Gulf Times Friday, August 18, 20176
CURRENCIESDOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI
DINARKUWAITI
DINAR
European stocks rise ahead of Fed updateAFPLondon
European and US stock mar-kets rose yesterday as investors looked ahead to the release of
Federal Reserve minutes for clues on the US interest rate outlook.
“European stock markets remain strong as the bullish sentiment that returned to the markets at the begin-ning of the week is still with us,” said market analyst David Madden at CMC Markets UK.
The easing of tensions between the US and North Korea has seen stocks rebound from a global sell-off last week.
“We have recouped a lot of the ground that was lost because of the ten-sions that escalated last week, but we have not fully recovered,” added Mad-den.
London, Paris and Frankfurt all closed 0.7% higher at 7,433.03 points,
5,176.61 points and 12,263.86 points respectively.
The EURO STOXX 50 closed 0.7% up at 3,485.71 points.
Wall Street stocks were also higher approaching midday, with the Dow Jones Industrial Average up 0.3%.
“Investors will be analysing the minutes from the July 25-26 FOMC meeting closely this afternoon, look-ing for clues as to when the Fed might begin reducing its massive balance sheet,” said analysts at Briefi ng.com.
The Fed has signalled it wants to begin trimming “relatively soon” its $4.5tn in assets it acquired during the global fi nancial crisis to prop up the US economy, the timing and pace of which could send up borrowing costs.
“In addition, any language sur-rounding infl ation will be of interest as its stubbornness to pick up may force the US central bank to settle for just two rate hikes this year instead of the three that it had originally planned for,” the analysts added.
Elsewhere, calm returned to Asian stock markets, with equities stabilis-ing after a two-day rally, as the dollar strengthened on upbeat US economic data on Tuesday.
The Nikkei, which made strong gains on Tuesday after fi nishing at its lowest level for more than three months the previous day, ended marginally down in light trade, even as the weakening yen boosted exporters.
Oil prices fl uctuated and then fell after the release of the latest informa-tion from the US Energy Information Administration on stockpiles.
While crude stockpiles dropped much more than analysts had antici-pated, gasoline stockpiles unexpect-edly rose modestly despite it being the peak of the US vacation season.
“The energy market spiked after the announcement, but then dropped to new lows of the session as the gaso-line stockpile fi gures suggests that demand is weak,” said CMC Markets’s Madden.
Traders work in front of the DAX board at the Frankfurt Stock Exchange. The DAX closed 0.7% up at 12,263.86 points yesterday.
BUSINESS7Gulf Times
Friday, August 18, 2017
Apple IncMicrosoft Corp
Exxon Mobil CorpJohnson & JohnsonGeneral Electric Co
Jpmorgan Chase & CoProcter & Gamble Co/The
Wal-Mart Stores IncVerizon Communications Inc
Pfizer IncVisa Inc-Class A Shares
Chevron CorpCoca-Cola Co/The
Intel CorpMerck & Co. Inc.
Cisco Systems IncHome Depot Inc
Intl Business Machines CorpWalt Disney Co/The
Unitedhealth Group Inc3M Co
Mcdonald’s CorpNike Inc -Cl B
United Technologies CorpBoeing Co/The
Goldman Sachs Group IncAmerican Express Co
Du Pont (E.I.) De NemoursCaterpillar Inc
Travelers Cos Inc/The
158.82
72.85
76.61
133.53
24.91
91.15
92.60
79.21
48.20
33.19
102.75
106.15
46.13
35.42
62.31
30.99
151.13
142.03
102.04
193.35
206.02
158.98
58.00
116.78
235.42
222.34
86.54
81.54
113.59
128.51
-1.33
-1.09
-1.11
-0.48
-0.76
-1.02
0.17
-2.19
-0.43
-0.52
-0.55
-0.65
-0.15
-1.09
-0.62
-4.17
-0.74
-0.33
-0.16
-0.22
-0.91
0.05
-0.92
-1.03
-0.91
-1.45
-0.97
-0.57
-0.46
-0.74
14,215,920
9,475,331
5,484,164
1,684,364
16,071,483
6,445,508
2,212,845
11,972,031
4,771,939
4,734,833
2,583,023
2,074,021
2,908,725
8,338,812
3,365,693
29,682,624
1,786,070
1,471,887
3,248,537
784,449
651,289
1,130,277
3,075,195
1,378,883
1,266,057
1,621,786
1,718,569
1,445,774
1,180,780
571,909
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/TheAbi Sab Group Holding Ltd
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 Ltd
Relx PlcReckitt Benckiser Group Plc
Randgold Resources LtdPrudential Plc
Provident Financial PlcPersimmon Plc
Pearson PlcPaddy Power Betfair Plc
Old Mutual PlcNext Plc
National Grid PlcMondi Plc
Merlin EntertainmentMediclinic International Plc
Marks & Spencer Group PlcLondon Stock Exchange Group
Lloyds Banking Group PlcLegal & General Group PlcLand Securities Group Plc
Kingfisher PlcJohnson Matthey Plc
Itv PlcIntu Properties Plc
Intl Consolidated Airline-DiIntertek Group Plc
Intercontinental Hotels GrouInmarsat Plc
Informa PlcImperial Brands Plc
Hsbc Holdings PlcHargreaves Lansdown Plc
Hammerson PlcGlencore Plc
Glaxosmithkline PlcGkn Plc
Fresnillo PlcExperian Plc
Easyjet PlcDixons Carphone Plc
Direct Line Insurance GroupDiageo Plc
Dcc PlcCrh Plc
Compass Group PlcCoca-Cola Hbc Ag-Di
Centrica PlcCarnival Plc
Capita PlcBurberry Group Plc
Bunzl PlcBt Group Plc
British Land Co PlcBritish American Tobacco Plc
Bp PlcBhp Billiton Plc
Berkeley Group Holdings/TheBarratt Developments Plc
Barclays PlcBae Systems Plc
Babcock Intl Group PlcAviva Plc
Astrazeneca PlcAssociated British Foods Plc
Ashtead Group PlcArm Holdings Plc
Antofagasta PlcAnglo American Plc
Admiral Group Plc3I Group Plc
1,596.00
423.00
0.00
246.30
3,839.00
220.05
904.50
4,460.50
1,334.00
1,490.00
178.85
193.30
0.00
755.00
1,191.00
1,436.00
1,383.00
955.50
3,871.00
2,248.00
3,397.00
239.70
700.00
0.00
649.50
400.30
2,161.00
2,125.00
258.10
911.50
3,429.50
0.00
1,695.00
7,354.00
7,405.00
1,813.50
1,889.00
2,532.00
615.00
7,475.00
206.30
4,204.00
966.20
2,061.00
464.40
731.00
319.10
3,950.00
64.40
267.70
1,023.00
294.80
2,818.00
169.40
250.20
624.00
4,848.00
3,988.00
741.50
711.50
3,225.00
738.00
1,343.00
573.50
345.00
1,506.00
319.10
1,566.00
1,534.00
1,301.00
250.30
388.80
2,585.50
6,955.00
2,723.00
1,651.00
2,593.00
204.20
5,355.00
654.50
1,758.00
2,332.00
293.60
623.50
4,832.00
443.20
1,362.00
3,701.00
611.50
197.25
591.50
840.00
525.50
4,481.00
3,180.00
1,580.00
0.00
944.50
1,279.00
2,000.00
953.50
-0.44
-0.94
0.00
-1.12
-0.42
-0.81
-0.55
-0.10
0.68
-1.46
-0.69
0.47
0.00
-2.72
-0.75
0.42
0.44
-0.10
0.44
0.04
-1.36
-1.20
-0.57
0.00
-0.31
-0.65
-0.28
-0.09
-2.20
-0.16
-0.77
0.00
0.30
-0.70
1.79
-0.79
-1.36
-0.16
-1.44
-1.52
-1.15
-1.41
0.20
0.88
-0.54
-1.42
-1.75
0.89
-1.45
-1.98
-0.58
-4.10
2.32
-0.06
-0.28
-1.03
0.19
-0.87
0.07
0.57
-0.05
-1.34
-0.44
-0.69
-0.07
0.13
-0.50
3.85
0.33
-1.89
0.52
0.65
-0.33
-0.14
-0.84
-0.96
0.70
-0.20
-0.46
1.47
-0.23
0.17
-0.27
-0.16
-1.97
-0.51
-0.44
0.19
0.00
-1.74
-1.00
-0.88
-0.66
0.30
0.16
-2.11
0.00
-0.42
-0.58
-2.30
-0.68
2,004,629
8,429,939
-
8,979,455
1,844,646
31,329,148
1,810,164
2,263,872
922,433
819,234
18,103,161
11,869,437
-
8,199,137
850,176
3,081,245
2,820,836
1,610,637
3,170,359
647,071
257,497
5,593,308
2,220,798
-
1,755,174
1,596,638
2,685,657
4,378,648
11,029,383
2,058,997
2,813,723
-
1,666,624
726,761
458,754
2,967,538
398,038
816,438
1,730,674
111,629
7,449,432
577,611
6,446,599
1,172,470
1,840,899
871,937
5,913,225
561,012
109,602,244
13,257,027
1,196,422
27,574,435
880,703
9,929,591
1,994,769
5,354,973
369,024
518,750
604,987
1,298,140
2,022,973
16,826,882
1,021,620
1,336,795
44,215,616
5,962,543
4,127,236
1,220,087
1,923,531
1,476,715
4,752,339
4,345,066
4,363,059
81,727
1,553,344
2,567,862
523,255
12,375,577
308,621
1,056,508
1,870,644
765,213
15,499,996
2,730,280
2,595,685
22,141,146
5,817,011
434,131
3,172,826
32,882,767
4,618,988
960,829
8,290,563
1,490,866
516,765
1,100,707
-
4,581,934
5,855,570
1,604,059
1,562,251
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
10,285.00
1,744.00
4,294.00
2,254.50
1,448.00
1,946.50
432.00
304.00
4,596.00
5,733.00
578.20
15,020.00
1,494.50
831.40
18,375.00
1,584.00
6,175.00
2,950.00
9,881.00
-1.11
0.11
0.16
1.23
0.87
-0.69
-0.21
1.33
0.35
0.26
-0.84
0.10
0.10
-0.22
-0.24
-0.50
-0.31
-0.05
0.17
533,100
2,681,800
1,846,600
1,594,500
1,057,300
2,049,000
7,112,000
17,410,000
896,000
992,300
5,005,000
734,900
3,992,700
5,250,000
242,800
2,384,700
5,513,500
3,062,300
542,900
TOKYO
Company Name Lt Price % Chg Volume
Rakuten IncKyocera Corp
Nissan Motor Co LtdHitachi Ltd
Takeda Pharmaceutical Co LtdJfe Holdings Inc
Ana Holdings IncMitsubishi Electric Corp
Sumitomo Mitsui Financial GrHonda Motor Co Ltd
Fast Retailing Co LtdMs&Ad Insurance Group Holdin
Kubota CorpSeven & I Holdings Co Ltd
Inpex CorpResona Holdings Inc
Asahi Kasei CorpKirin Holdings Co Ltd
Marubeni CorpMitsubishi Ufj Financial Gro
Mitsubishi Chemical HoldingsFanuc Corp
Daito Trust Construct Co LtdOtsuka Holdings Co Ltd
Oriental Land Co LtdSekisui House Ltd
Secom Co LtdTokio Marine Holdings Inc
Aeon Co LtdMitsui & Co Ltd
Kao CorpDai-Ichi Life Holdings Inc
Mazda Motor CorpKomatsu Ltd
West Japan Railway CoMurata Manufacturing Co Ltd
Kansai Electric Power Co IncDenso Corp
Sompo Holdings IncDaiwa House Industry Co Ltd
Jxtg 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 LtdSubaru Corp
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
1,321.50
6,780.00
1,103.50
726.40
5,930.00
2,187.00
407.30
1,705.50
4,148.00
3,043.00
32,110.00
3,776.00
1,973.50
4,423.00
1,033.00
557.70
1,281.50
2,424.50
697.50
693.10
955.50
21,710.00
19,290.00
4,537.00
8,144.00
1,916.50
8,100.00
4,497.00
1,675.00
1,617.00
6,760.00
1,862.00
1,630.00
2,855.50
8,137.00
17,200.00
1,512.50
5,405.00
4,325.00
3,870.00
535.20
2,678.00
5,566.00
5,278.00
2,223.00
2,397.00
2,261.50
11,240.00
0.00
1,003.50
1,394.00
4,789.00
4,328.00
6,334.00
3,929.00
3,784.00
429.30
1,755.00
616.90
8,742.00
190.80
641.80
2,356.00
3,936.00
2,578.00
3,265.00
1,828.50
1,786.50
4,604.00
53,190.00
12,580.00
1,424.50
2,633.00
9,762.00
36,190.00
2,540.00
36,680.00
5,693.00
1,534.00
3,888.00
3,824.00
0.30
1.09
-0.50
-0.04
-0.74
-0.02
0.10
1.04
-0.07
-0.62
-0.31
-0.68
-0.58
-1.07
-1.43
-0.68
-1.42
-1.72
0.66
-0.94
0.35
-0.16
-0.03
-0.13
-0.27
-0.44
-1.60
-0.71
-0.50
-0.03
0.19
-0.88
-0.94
0.92
-0.55
-0.86
-0.69
-0.06
-0.73
-0.28
1.65
0.98
-0.73
0.06
-0.78
-0.21
0.27
-0.49
0.00
0.15
-0.36
0.04
0.07
-0.55
-0.53
-0.03
-0.28
-1.65
-0.68
-0.11
-0.42
-0.50
0.06
-1.23
0.14
-0.31
2.01
-0.31
-0.97
1.01
1.13
-0.38
-2.98
-0.06
2.46
0.91
0.00
0.57
-0.13
0.26
0.53
TOKYO
Company Name Lt Price % Chg
Aluminum Corp Of China Ltd-HBank Of East Asia Ltd
Bank Of China Ltd-HBank Of Communications Co-H
Belle International HoldingsBoc Hong Kong Holdings Ltd
Cathay Pacific AirwaysCk Hutchison Holdings Ltd
China Coal Energy Co-HChina Construction Bank-H
China Life Insurance Co-HChina Merchants Port Holding
China Mobile LtdChina Overseas Land & Invest
China Petroleum & Chemical-HChina Resources Beer Holdin
China Resources Land LtdChina Resources Power Holdin
China Shenhua Energy Co-HChina Unicom Hong Kong Ltd
Citic LtdClp Holdings Ltd
Cnooc LtdCosco Shipping Ports Ltd
Esprit Holdings LtdFih Mobile Ltd
Hang Lung Properties LtdHang Seng Bank Ltd
Henderson Land Development
5.50
33.30
3.92
5.70
0.00
37.70
11.80
101.20
3.86
6.62
23.45
23.75
86.50
25.25
5.67
20.10
22.55
15.30
18.68
11.94
11.62
83.30
8.71
9.17
4.42
2.45
19.38
178.10
47.40
2.04
-0.89
-0.76
-0.52
0.00
-1.18
0.85
-0.59
1.31
-0.60
-0.85
-0.63
-0.57
-0.20
0.00
-1.23
-1.10
0.00
0.54
0.00
-1.02
0.48
1.28
0.99
-2.43
-0.41
-1.52
-0.34
-0.11
76,655,611
628,315
295,972,396
18,536,201
-
15,472,314
31,301,842
4,411,982
15,543,690
336,043,938
33,424,729
2,587,449
14,849,903
12,110,622
84,427,137
5,500,619
11,691,134
8,116,702
20,038,646
-
8,137,136
2,376,494
107,666,816
806,160
8,613,571
4,535,839
2,246,000
1,042,681
3,984,500
HONG KONG
Company Name Lt Price % Chg Volume
Hong Kong & China GasHong Kong Exchanges & Clear
Hsbc Holdings PlcHutchison Whampoa Ltd
Ind & Comm Bk Of China-HLi & Fung Ltd
Mtr CorpNew World Development
Petrochina Co Ltd-HPing An Insurance Group Co-H
Power Assets Holdings LtdSino Land Co
Sun Hung Kai PropertiesSwire Pacific Ltd - Cl ATencent Holdings Ltd
Wharf Holdings Ltd
14.92
211.60
74.60
0.00
5.60
2.85
45.65
10.24
4.82
59.35
78.25
12.98
122.60
78.50
329.40
69.35
0.40
-0.75
-0.86
0.00
-0.88
1.42
1.33
-0.78
-1.03
2.42
0.00
0.93
-0.41
-1.88
1.92
-1.49
11,067,669
4,843,891
18,676,491
-
358,507,607
14,713,655
5,897,746
16,743,662
106,760,515
54,794,897
9,071,846
4,231,877
2,150,065
2,174,543
44,326,795
4,693,926
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
526.75
1,738.10
288.35
304.80
3,932.90
424.40
625.40
81.65
385.30
2,485.65
488.25
280.85
1,567.10
146.30
219.45
160.60
176.80
7,582.45
1,367.00
953.95
1,134.00
989.00
280.00
1,020.85
1,628.50
89.35
293.15
1,759.25
1,177.30
230.30
3,997.85
1,765.40
871.40
1,100.70
376.20
2,011.25
246.95
573.20
0.00
22,037.95
416.35
493.70
129.25
148.25
2,825.85
497.15
1,134.95
270.90
389.30
1,780.10
1.55
-1.35
-0.55
2.56
-0.21
1.06
-0.92
-0.49
-1.01
-0.27
0.53
-0.79
0.06
-0.85
-0.57
-0.22
3.94
-1.54
-0.31
-0.73
-0.72
-1.15
0.29
4.68
-1.14
2.76
-0.61
1.00
-0.76
-1.41
-0.60
-0.89
0.80
-0.52
1.35
0.30
3.78
-2.92
0.00
-1.22
2.11
2.01
-0.54
0.75
-0.82
-0.47
-0.56
0.31
-2.08
-1.72
SENSEX
Company Name Lt Price % Chg
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
21,851.75
2,446.29
6,262.08
15,067.21
51,020.84
68,127.35
7,387.87
5,146.85
12,203.46
10,443.80
19,702.63
1,614.82
27,344.22
5,827.25
1,437.45
31,795.46
9,904.15
3,268.88
30,592.30
5,891.95
-173.12
-21.82
-83.03
-15.00
-135.83
-466.95
-45.16
-29.76
-60.40
-100.50
-26.65
-1.18
-64.85
-3.58
+2.99
+24.57
+6.85
-10.07
-655.39
+56.91
Doha Securities MarketSaudi Tadawul
Kuwait Stocks ExchangeBahrain Stock Exchage
Oman Stock MarketAbudhabi Stock MarketDubai Financial Market
9,106.19
7,179.34
6,885.84
1,298.94
4,889.28
4,492.66
3,601.20
+83.94
+50.99
+31.72
-12.05
-23.29
-4.68
+11.90
“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.”
2,865,100
813,900
9,149,900
9,300,000
1,001,000
2,329,900
6,410,000
4,723,600
4,788,800
3,513,500
366,400
905,900
2,148,600
1,974,100
6,108,600
5,411,800
3,407,000
2,312,900
6,400,800
40,555,600
3,654,300
504,000
296,500
914,500
526,100
1,349,700
767,500
2,143,100
1,517,500
2,620,400
905,700
5,109,500
5,490,800
2,817,000
570,400
442,200
1,541,600
1,535,500
889,300
1,079,600
22,063,900
2,262,000
2,084,600
1,724,200
1,134,800
1,699,400
1,367,000
477,600
-
3,785,600
7,120,700
1,068,900
3,803,800
861,000
702,000
2,030,300
2,803,000
2,925,800
7,765,000
3,309,100
66,786,600
11,911,200
1,569,700
2,753,900
2,214,000
1,006,000
5,073,000
2,103,900
838,200
241,500
556,400
3,220,600
3,062,200
901,600
188,800
2,908,400
1,528,000
656,100
2,390,400
2,210,900
2,020,100
2,115,998
2,121,092
2,888,507
20,877,721
150,392
3,389,651
5,008,297
4,054,301
6,625,417
897,829
5,284,544
13,856,776
3,931,566
8,917,431
1,676,874
5,429,623
5,539,581
344,132
654,431
1,215,728
1,772,186
1,156,037
14,332,167
13,424,325
640,824
10,113,594
8,528,385
2,502,036
983,896
11,071,866
360,469
1,399,660
1,084,001
789,612
1,513,476
585,338
21,765,492
1,534,977
-
20,962
3,226,457
4,843,064
3,793,447
21,523,590
156,965
4,232,182
520,285
2,530,444
2,617,005
400,615
Volume
Volume
BUSINESS9Gulf Times
Friday, August 18, 2017
Trump’s pro-business image tarnished as CEOs abandon presidentBloombergWashington
During his campaign for president, Donald Trump boasted of business prowess, vowing to bring in top executives to help him revive the economy and to personally lobby corporate chiefs to keep jobs in the US.Those CEOs are now abandoning him in a humiliating snub for a president who took great pleasure in summoning corporate titans to the White House and trying to get them to bend to his will.After widespread criticism for remarks that appeared to confer legitimacy on white supremacists, Trump is facing a mass exodus of the CEOs he once courted, a public repudiation that undermines his image as a businessman and could threaten his policy agenda on everything from taxes to trade.Trump said on Wednesday he’s disbanding two advisory groups of American business leaders, after several CEOs quit this week and more were preparing to resign in the wake of his comments that some “very fine people” were among neo-Nazis protesting at a violent rally in Charlottesville last weekend.The week’s events threaten to forever tarnish Trump’s credentials as a business president, undermining a foundation of his political appeal and weakening the Republican party’s core alliance with business interests for as long as he leads the party. The political damage compounds the risk the GOP faces in 2018 midterm elections.Corporate executives are now making a pragmatic calculation that a Republican president’s brand has become too toxic, said Carlos Gutierrez, chairman of Albright Stonebridge Group, a Washington international strategy firm that advises businesses.“There’s always the risk that CEOs will not have their brand associated with administration initiatives, which is extremely dangerous for the president’s agenda,” said Gutierrez, who served as Commerce Secretary under President George W Bush. “The president will need the business community but the business community would rather stay out of the White House.”Trump opened his presidency highlighting his relationships with titans of industry, regularly bringing in camera crews and reporters to
show the nation a president leading discussions that included some of the best-known names in business. The American Manufacturing Council and Strategic and Policy Forum, disbanded on Wednesday were each heavily promoted during the first days of his presidency, as the White House sought to show its focus on boosting the economy.Business leaders would often flank the president in the Oval Off ice as he signed legislation and announced new orders.With the Republican party in control of the White House, and both houses of Congress, the constant stream of business executives visiting the West Wing was presented by the White House as evidence that Trump’s agenda for boosting the economy was in full swing.Now, as Congress has struggled to pass legislation during the Trump era, the chaos surrounding the White House has served to further undermine Republicans’ image in the eyes of a risk-averse business community, according to strategists and experts.Graham Wilson, a Boston University professor who studies the intersection of business and politics, said the scale and depth of feeling in opposition to Trump’s statements is too large for executives to ignore.“Standing with Trump at this moment, after his bizarre comments, is just too costly for Corps,” Wilson said. “This signal from corporate America could also have a broader impact on public opinion and the loyalty of core Republicans to Trump.”Some business-oriented Republicans who had been “swallowing very hard over some of Trump’s stranger statements” now may break away, Wilson said.Republican off iceholders must not just condemn the violence by white-supremacist groups, they must repudiate the position Trump has taken or “slide into the moral abyss with him,” said Republican strategist Steve Schmidt, who was a top adviser for 2008 presidential nominee John McCain.“Republicans who believe that the possibility of tax reform outweighs the urgent civic necessity of condemning white supremacy extremism and Nazism are as morally obtuse as Trump and are likely to pay a very steep political price,” he said.The public spat between Trump and CEOs comes as the White House and the Republican-led Congress are looking to advance an
overhaul of the tax code. “I don’t see any business that’s going to want to partner with the president on an initiative,” said Leslie Dach, a strategic communications consultant in Washington. “Because the chance of it bringing them grief is large and the short-term upside is slim.”Even before the controversy surrounding his statements about the events in Charlottesville and the collapse of the economic council, Trump’s standing in Gallup’s daily tracking poll was already near an all-time low for his presidency. Just 36% of Americans said they approve of the job he’s doing, while 58% disapprove, in the poll taken August 13-15.Kevin Madden, a Republican strategist who was a senior adviser to Mitt Romney in the 2012 presidential campaign, said all is not lost for Trump and his relations with corporate America.“The community still has an interest in collaborating on an economic agenda, but they are certainly sending a message,” Madden said. “This is a diff erent era, where businesses and CEOs are as focused on communicating their company’s values in addition to caring about their bottom line.”To the extent businesses back Trump initiatives, it is now more likely to be transactional: one-time support for specific policies that directly help them. Conversely, Trump, who has pushed policies on immigration and trade that are unpopular in the business community, could also see more executives willing to speak out against him when they disagree with his agenda, said Gutierrez.“Businesses had been somewhat reluctant-they don’t want to be on the wrong side of the administration, they don’t want to be the subject of a tweet,” he said. “I think that that is quickly fading away.”The blow up may be a sign of things to come. The reality is that the capital has become more challenging terrain for corporate leaders, who take great pains to stay away from controversy, as populists squeeze out pro-business moderates in both the Republican and Democratic parties.“Washington, whether it is on the right or the left, is a risky place right now,” said Sam Geduldig, a former Republican congressional aide and now a partner at CGCN Group, a lobbying firm. “It is not a place for the weak or the timid.”
Behind the big rift, frantic hours of calls, calculationBloombergNew York
Even before President Donald Trump began speaking at Trump Tower on Tuesday afternoon, America’s most prominent CEOs knew they had a problem.In the days following the racially charged violence in Virginia, where white supremacists marched with swastikas and a young woman was run down by an alleged Nazi sympathiser, alarmed executives began reaching out to Stephen Schwarzman, the billionaire leader of the Blackstone Group LP and a key figure in President Donald Trump’s business brain trust.What followed was a frantic 48 hours of high-level debate and cold calculation among some of the nation’s most prominent CEOs — from Jamie Dimon of JPMorgan Chase & Co to Indra Nooyi of Pepsico — that ended abruptly on Wednesday with a remarkable rebuke to the president.Schwarzman, one of the administration’s business ambassadors, listened over the phone this week as one CEO after another expressed dismay over Trump’s response to the deadly events in Charlottesville — and then over his full-throated attack on a prominent black executive, Kenneth Frazier of Merck & Co, who, unlike many CEOs, had refused to remain silent.A conference call on Wednesday morning cemented the decision: The CEOs would disband a White House forum that Trump, the first CEO president, assembled to showcase his supposed rapport with big business.This account of the struggle to contain the controversy is based on interviews with numerous people with knowledge of the matter who asked not to be identified because they weren’t authorised to discuss the talks.As the violence unfolded in Charlottesville over the weekend, uneasiness among the executives began to build, especially after the president made a statement on Saturday saying “many sides” were to blame for the chaos. But by Monday Trump condemned white supremacists, calming the waters for a time.The quiet was short-lived. Speaking at a news conference in the lobby of Trump Tower in Manhattan on Tuesday, the president told reporters that “both sides” were to blame for the violence in Virginia, going back on the statement he’d made just 24 hours earlier.The reversal stunned and angered the strategy forum executives. After a flurry of phone calls late on Tuesday and into Wednesday, a loose consensus was reached that the forum should disband. A group call was arranged for Wednesday morning.Several members who spoke to each other earlier went into the call saying if the group wasn’t dissolved they were going to drop out. Among those pushing for a bold statement were International Business Machines Corp CEO Ginni Rometty, Dimon, Nooyi and General Motors Co CEO Mary Barra. Nobody from the administration participated.After the 11:30am call, Schwarzman was in touch with top White House aide Jared Kushner to inform him of the group’s decision: the controversy had become too much of a distraction. The president tweeted at 1:14pm on Wednesday afternoon that he was ending the forum and a parallel manufacturing council “rather than put pressure on the businesspeople” serving on them.Figuring out how to handle the ever-shifting rhetoric of an unpredictable president is a challenge like few others businesses have faced in recent years.Early on, America’s largest companies were eager to work with a new president promising to ease regulatory constraints and cut and simplify taxes. Trump showed a fondness for loudly calling out companies on Twitter, but most absorbed the punches and promised to hire more people in the
US while touting plans to build more factories and other facilities.But the events in Charlottesville appear to have raised the political costs of working with the president.“Within companies, there’s a high level of alert on the public outrage,” said Ben Wikler, the Washington director of MoveOn.org, a progressive advocacy group. “The cost to corporate brands rises each day that they continue to align themselves with Trump.”Trump has shown a willingness to turn on Republicans over the controversy. Yesterday, he tweeted criticism of GOP Senator Lindsey Graham of South Carolina, who he called “publicity seeking” for criticising his remarks on the violence. And he attacked Republican Senator Jeff Flake of Arizona, off ering support for his primary opponent in a coming election.Merck chief Frazier’s resignation from Trump’s manufacturing council on Monday marked the first crack in the councils after the bloody weekend in Charlottesville.Trump was fast to fire back at Frazier, chiding him on Twitter over high drug prices. But investors shrugged — Merck’s shares briefly ran in front of a modestly rising market before sliding back to the pack — and for most of Monday, the other executives on the business panels kept quiet. It wasn’t until late that evening that Intel Corp CEO Brian Krzanich and Under Armour chief Kevin Plank emerged to say that they too were stepping back.Trump had another Twitter outburst over Frazier’s decision Tuesday morning, before the new conference, calling executives who quit “grandstanders,” while claiming others were eager to sign on.While the strategy group was weighing its future in private, one executive after another began to pull out of Trump’s manufacturing council, condemning the president’s statement on white supremacists.Following Trump’s comments Tuesday, General Electric Co’s leadership decided the company wouldn’t be associated with the council any longer, despite Chairman Jeff rey Immelt saying a day earlier that he would remain.Immelt and John Flannery, who took over as CEO August 1, received “valuable input” from leaders inside and outside the company, including representatives of GE’s aff inity groups, according to a note Flannery sent Wednesday to employees. The executives also spoke with other companies “to discuss the possibility of disbanding the committees,” Flannery said.3M Co chief executive Inge Thulin, who announced his decision to quit shortly before the councils were disbanded, was pressed by Skiftet, a Swedish progressive grassroots organization, to exit Trump’s manufacturing council after the president “failed to properly condemn right-wing extremists and Nazis,” according to the group.PepsiCo and Nooyi were pushed to leave the council by a German group, Campact, which posted a video calling for her to step down on Facebook. PepsiCo declined to comment on others resigning from the councils, the president’s press conference Tuesday or a Twitter movement created to pressure Nooyi to step down.Johnson & Johnson’s Alex Gorsky had been among the last to weigh in publicly, saying before Trump’s Tuesday news conference that he planned to remain on the manufacturing council “as a way to present the values of our credo as crucial public policy is discussed and developed.”But by early Wednesday, Gorsky called Trump’s comments equating white supremacists with the people protesting against them “unacceptable,” and resigned from the manufacturing committee. The group had already been disbanded by the time Gorsky’s statement went out, though J&J said that his decision to quit preceded that move.
Mary Barra (2nd left), CEO of General Motors; Gary Cohn (2nd right), president of Goldman Sachs; and Doug McMillon (right), CEO of Walmart; listening while US President Donald Trump speaking before a policy and strategy forum with executives at the White House on February 3. Trump announced on Wednesday he was scrapping two business advisory councils in the wake of several high-profile resignations in protest over his comments on a white supremacist rally in Virginia that turned violent.
BUSINESS
Gulf Times Friday, August 18, 201710
Fired UBS adviser reignites Palm Beach scandal over rich widowBloombergNew York
“Holy crap!” That’s how Craig Price, a UBS senior vice-president, told securities regulators he reacted when he saw the $2,600 tab for a client-development dinner he attended at an upscale Palm Beach, Florida, restaurant. It wasn’t the size of the bill that stunned him. It was who paid for it — an ailing, 90-year-old UBS client.The client wasn’t even at the dinner, but the broker who managed her trust was. So was the broker’s girlfriend, a longtime confidant of the client who had power of attorney over the trust. The trust paid the bill.Price dug deeper. He says he ultimately discovered bigger charges to the trust: a Bentley in the girlfriend’s name, a trip to Toronto on a private jet and an attempted fund transfer to buy a penthouse apartment in the girlfriend’s name.Price alerted his superiors, setting off a chain of events that would become tabloid fodder. The broker, Dennis Melchior, was quickly fired for what UBS said was a failure to disclose conflicts of interest in an unidentified trust. The broker’s girlfriend, Nancy Tsai — a fixture of the Palm Beach charity scene and an ex-wife of celebrity fund manager Gerald Tsai — was arrested and charged with grand theft and exploiting an elderly person, her mugshot published far and wide.As quickly as that 2014 scandal erupted, it faded from public view. The UBS client died a day after Tsai’s arrest. Florida prosecutors dropped the case after concluding that they “cannot overcome every reasonable hypothesis of innocence and cannot prove the charges against Tsai beyond a reasonable doubt,” the state attorney said.
A second chapter has been playing out quietly ever since. UBS fired Price last year, claiming he had traded on nonpublic information. Price, in court filings, says that’s a lie and that he was dismissed for speaking up about the trust account and for raising questions about the Swiss bank’s willingness to police its own. Price has cast himself as a protected whistle-blower, filing claims with the US Securities and Exchange Commission and in federal court, where he’s seeking two years’ pay plus damages and legal fees.However Price’s legal battle with UBS is decided, it has exposed potentially deeper conflicts of interest over the trust than the bank has acknowledged publicly. Court filings, depositions, police and prosecutor reports, broker journal entries and internal bank records depict the couple as using trust assets to cover personal expenses and fatten Melchior’s book of business.The broker’s case also off ers a rare look at a type of dispute that’s typically handled privately in arbitration. The details speak to a fear among exiting brokers that banks may sully their records to impeach their credibility, justify a dismissal or retain clients.Price, a 16-year UBS veteran who’d run the eponymous Price Wealth Management unit, says the bank had to know about the couple’s relationship and control of the trust. “The focus so far has been on Tsai and not on Dennis or UBS’s failure to supervise him,” he said in an interview.“UBS has never disclosed that one of its brokers collaborated with his girlfriend,” he said, to take advantage of “a little old lady.”UBS disputes Price’s version of events. A judge will soon rule on a UBS motion to dismiss the suit.“UBS’s motion to dismiss this lawsuit by Mr
Price shows that there is no link between his termination and his alleged whistle-blowing,” the bank said in a written statement. “With respect to his lawsuit’s unsubstantiated allegations about the conduct of UBS toward other advisers in his off ice, UBS followed its supervisory processes, investigated suspicious activities and terminated advisers who failed to meet UBS’s standards.”Tsai and Melchior also reject Price’s claims and any suggestion that either engaged in wrongdoing, according to Chase Scott, their spokesman. Florida prosecutors and US securities regulators conducted “lengthy, in depth” investigations “that cleared Mrs Tsai and Mr Melchior,” he said in a written statement. He said that Tsai and the UBS client were close and trusting friends who were generous to each other and that the spending was overseen by the client’s lawyer and accountant.Tsai had a 30-year relationship with the UBS client, Helga Marston, a Romanian native who emigrated to the US as a young woman. In 2004, Marston’s husband died and left her millions. Childless, she turned to friends for financial guidance. A year later, she drafted an amended trust that left her Park Avenue, New York, residence to Tsai.Another beneficiary named at the time was a UBS adviser who oversaw the trust. She would inherit $250,000 in cash. “That’s pretty odd,” says John Rogers III, a trust management expert who says banks typically require employees to reject client bequests or resign. “It runs the risk that advisers will work in their own interest rather than the bank’s.”Tsai was granted power of attorney over the trust in 2011, the same year the trust was moved to a unit of UBS where Melchior would manage it.
Additional details about the management of the trust have emerged in the legal dispute between Price and UBS. The year before she took over the trust, Tsai was spending $50,000 a month and was at risk of going broke within seven years, according to an assessment compiled by Price’s unit. That assessment, which was conducted to evaluate Tsai’s needs as a potential client, is included in Price’s whistle-blower complaint with the SEC.What’s more, Price says he discovered the couple used at least $35,000 from the trust to entertain prospective and existing Melchior clients. They spent $5,000 on several prospects at the Pink Tie Ball at the Trump National Golf Club Mar-a-Lago in January 2013, according to Price. He provided the SEC with Outlook calendars and trust statements as support for some of his spending claims.Scott, the spokesman for Tsai and Melchior, said that Marston bought tickets to the charity events for friends and acquaintances “simply to support her favourite causes.” Also, Marston had included the breast cancer charity behind the Pink Tie Ball as a beneficiary of her trust at one time, records show.Any resolution of Price’s claims may rest on an assessment of Price’s and Melchior’s credibility. Price, who built a $140mn business over three decades, has blemishes on his record. He was named in seven settlements with customers. Four involved UBS’s payout for allegedly misleading investors who had bought auction-rate securities from hundreds of the bank’s advisers. UBS, which didn’t admit or deny wrongdoing, paid $1.9mn for Price’s portion of that settlement. The three other disputes were settled for a total of $160,000, with Price contributing none of his own money.Price also supervised Melchior and benefited from the revenue he generated. Asked by a
securities regulator in a deposition why he hadn’t raised questions about Melchior earlier, Price said the broker had gained his confidence and was left to manage his accounts “without any day-to-day supervision.”Melchior’s record was spotless before his 2014 firing by UBS, according to filings with the Financial Industry Regulatory Authority, the self-regulatory agency known as Finra. (Last month, however, Florida regulators fined him $20,000 for borrowing money from a client. Scott, who says that client was Tsai, called it a “technical violation” and a “loan between friends.”) His firing prompted Finra to ask questions and alert Florida off icials of a possible case of elder exploitation, a police report said.As the Finra inquiry accelerated, Price said the bank’s initial support faded. He went to New York to testify in July 2014. UBS lawyers helped him prepare. Then he off ered his “contemporaneous journal entries” and other material he says illustrated abuse of the trust. Price claims in his whistle- blower filings that he was then harassed by the bank, culminating in his firing in February of last year.UBS, in a court filing, said that Price had failed to provide any factual support for his retaliation claim.In asking the court to toss out Price’s claim, UBS argues that he’s failed to link his firing to any whistle-blowing and that he lacks standing, pointing to a late filing.Price has persuaded at least some of his former UBS clients to side with him. One of those, Lynn Scheel, a Port St Lucie pediatrician, said in an interview that when she visited UBS’s local off ice to pick up paperwork, a UBS adviser appeared in the lobby and said, “I can’t believe you’re going with that criminal.” Scheel moved her money to Price anyway.
Ackman ramps up pressure on ADP as he makes case to investorsBloombergNew York
Investors are about to get their first look at
Bill Ackman’s plans for improving the per-
formance of Automatic Data Processing
Inc, which the activist investor contends is
losing ground to smaller rivals.
Ackman will make his case for changes
at the payroll and human resources
outsourcer during a webcast yesterday
morning. The billionaire agitator, who has
disclosed few details of his plans for ADP,
said on Wednesday that he sees an upside
similar to when he took a stake five years
ago in Canadian Pacific Railway Ltd Ack-
man’s hedge fund Pershing Square Capital
Management has reaped $2.6bn in profit
from that investment.
All Ackman has said so far is that ADP
needs to improve its software and service
off erings, significantly reduce costs and
improve its eff iciency. That’s left some
observers scratching their heads because
the Roseland, New Jersey-based company
has returned 202% to shareholders since
chief executive off icer Carlos Rodriguez
took the helm in 2011.
“Pershing’s disclosures have been lim-
ited; however, we assume a focal point will
be margins,” David Grossman, an analyst
at Stifel Nicolaus & Co, wrote in a note to
clients. “That said, our analysis suggests
ADP’s margins are reasonable based on its
business model.”
ADP’s profitability is dramatically lower
than its smaller rival, Paychex Inc Roches-
ter, New York-based Paychex has reported
margins of about 43% for earnings before
interest, taxes, depreciation and amortisa-
tion for the past three years, while ADP
reported a 22% margin for the year ended
June 30, according to data compiled by
Bloomberg.
Grossman said Paychex isn’t an apples-
to-apples comparison because its busi-
ness mix is diff erent from ADP’s. Paychex
primarily focuses on the small-business
segment, which tends to have higher mar-
gins. Only about 20% of ADP’s business
falls within that category, he said.
Ackman’s push for changes at ADP
could be a net win because it will focus
attention on the company’s earning
potential, said Tien-Tsin Huang, an analyst
with JPMorgan Chase & Co He said ADP
has already taken steps to transform itself
from a legacy payroll company without
sacrificing short-term results.
“Putting a spotlight on the earnings
power at ADP seems healthy for the stock
and could provide cover for the team to
do more,” Huang wrote in a note to clients.
“We believe the current management
team is best equipped to execute and
decide what’s best for shareholders.”
The proxy battle will likely focus on the
margin improvements in ADP’s interna-
tional and non-small business segments,
Huang said. He estimates they could reach
the mid- teens, relative to what he called
“imperfect comparables” ranging from
11% to 26%.
There is some evidence that ADP
isn’t getting the most out of its various
businesses. CDK Global Inc, an integrated
information technology and digital mar-
keting company for the auto retail sector
that was spun out from ADP in 2014, saw
dramatic improvement to its margins after
it became an independent company.
CDK’s Ebitda margins grew from about
21% in fiscal 2014 to almost 30% for the
year ended June 30, according to data
compiled by Bloomberg. Adjusted earn-
ings per share rose 60% over that period,
the data show. Still, Ackman will have
to win over investors if he wants to get
his slate of three candidates, including
himself, elected to the board.
ADP, which handles the paychecks
of 26mn US workers, has so far resisted
Pershing Square’s demands. The company
said Ackman originally wanted five seats
on the company’s 10-member board, a
proposal the company said it rejected
along with possibly replacing Rodriguez.
ADP said in a statement last week that it
would review Ackman’s revised slate of
nominees and their ability to add value to
the board. Rodriguez, in an Aug. 10 inter-
view on CNBC, likened Ackman to a “used
car salesman” and compared his request
to extend the nomination deadline to a
“spoiled brat” asking a teacher for more
time to complete an assignment.
Ackman said on the conference call
Wednesday that ADP could have avoided
a fight if its board had granted him a one-
week extension of the Aug. 10 deadline to
nominate directors.
ADP is an attractive investment
because it’s a simple, predictable, free-
cash-flow generating business that is
unlevered with net cash on its balance
sheet, Ackman said. Pershing Square said
it raised more than $500mn in outside
capital to join in its ADP investment, a new
fund known as Pershing Square VI.
In the Canadian Pacific battle, Ackman
led a successful proxy fight to oust then-
chief executive off icer Fred Green after
years of underperformance. Green was
eventually replaced by former Canadian
National Railway Co CEO Hunter Harrison,
who turned Canadian Pacific from the
least-eff icient North American railroad
into one of the best performing.
“We got something like 90% of the vote
from shareholders,” Ackman said.
Pershing Square’s original goal was to
achieve a share price of C$150 at Canadian
Pacific. The company’s shares closed
Wednesday at C$194.42 in Toronto.
Ackman said he’d hoped Pershing
Square’s investment at ADP would have
been similar to its approach at Air Prod-
ucts & Chemicals Inc, where discussions
were held in private and details weren’t
made public.
Not all of Ackman’s investments
have been as fruitful. A high-profile
investment in Valeant Pharmaceuticals
International Inc, sold in March, cost Per-
shing Square $4bn. His stake in Chipotle
Mexican Grill Inc, meanwhile, has been
hit by renewed food-safety concerns and
is worth almost $190mn less than when
he acquired it last year.
Banco Popular bondholders take crisis fi ght to EU courtBloombergLuxembourg
Banco Popular junior bondholders who were wiped out by the Span-ish bank’s collapse have added
their lawsuit to dozens already fi led by aggrieved investors.
The group fi led their challenge at the European Union’s General Court in Luxembourg, yesterday, arguing the resolution process was “over hasty” and violated professional secrecy. That sets up a court battle with the euro area’s bank-failure authority and the European Commission over their han-dling of the crisis.
The Single Resolution Board’s ac-tions, “including public comments that it was ‘watching’ Banco Popular, undermined investor confi dence and resulted in a run on the bank,” Rich-ard East, a lawyer at Quinn Emanuel Urquhart & Sullivan who represents the bondholders, said in a statement. “Ironically, the SRB itself made state-ments that exacerbated the ‘formidable run on liquidity,’ which were then relied upon to justify the resolution scheme.”
The Brussels-based SRB forcibly sold Banco Popular to Banco Santander on June 7, wiping out equity and about €2bn ($2.3bn) of junior bonds that had traded at face value as recently as April. New York-based Anchorage Capital Group lost about $140mn in its main fund, a person familiar with the matter said last month.
Anchorage, Algebris Investments and Ronit Capital are among investors seeking to challenge the forced write down of additional Tier 1 and Lower Tier 2 bonds. ECB Vice President Vi-tor Constancio said after the sale that a “bank run” had sapped Banco Popu-lar’s liquidity.
The Brussels-based commission said it hadn’t yet been notifi ed of yester-day’s lawsuit by Banco Popular bond-holders. “Resolution decisions are EU acts and can be challenged,” leaving the fi nal decision up to the bloc’s courts, it said in an emailed statement.
The SRB didn’t immediately respond to an emailed request for comment.
The bondholders said the SRB’s head Elke Koenig violated professional se-crecy when she told Bloomberg on May 23 that “of course Banco Popular is also a case we are watching.”
The suit challenges the commis-sion’s “failure to properly assess the SRB resolution scheme” and the failure by both the SRB and the commission to carry out “an independent and trans-parent investigation” of leaks that had an “adverse impact.”
SRB head Koenig in July rejected allegations that her authority’s ac-tions accelerated the collapse of Ban-co Popular by spurring withdrawals and weakening the lender before it was wound down and sold to Banco Santander SA. Koenig faced a barrage
of questions July 11 from lawmakers in the European Parliament, including claims that comments she had made on Bloomberg TV contributed to the dete-rioration of the bank’s liquidity.
Quinn Emanuel represents holders of about €850mn of junior debt, ac-cording to a letter dated July 10.
Earlier this month, a Mexican inves-tor group fi led a separate challenge at the EU tribunal, seeking to nullify the SRB’s June decision, arguing that the watchdog caused the crisis at Popular when Koenig publicly suggested that
the agency was examining the bank.Investors haven’t had much luck at
EU courts challenging regulatory ac-tions during bank bailouts and restruc-turings. Just last month, the General Court threw out a request by Banco Es-pirito Santo creditors to annul a 2014 European Commission decision on the lender’s resolution plan.
Challenges at the court take 19 months on average, and with one last appeal possible, both sides could wait three years at least until a final deci-sion.
Pedestrians wait for bus in front of a Banco Popular Espanol bank branch in Madrid. The Brussels-based SRB forcibly sold Banco Popular to Banco Santander on June 7, wiping out equity and about €2bn ($2.3bn) of junior bonds that had traded at face value as recently as April.
Gibson Energy pushed by Prudential to sell itself
BloombergCalgary
Gibson Energy, a Cana-dian company that helps oil producers store and
transport their products, should undertake a strategic review that would include a potential sale, according to its largest share-holder.
Gibson should sell a refi nery in Moose Jaw, Saskatchewan, exit most of its trucking business and reduce costs before hiring an investment bank for a possible sale, London-based M&G In-vestment Management said on Monday in a letter to manage-ment. The unit of insurer Pru-dential, with $366bn in assets, owns about 19% of Gibson.
“A streamlined and focused company based around core strategic assets would be an at-tractive asset to a wide variety of potential suitors,” M&G fund manager Stuart Rhodes said in the letter to Gibson.
The letter comes two weeks after Gibson’s new chief ex-ecutive offi cer Steven Spauld-ing announced a plan to sell the company’s US environmental services business. He said that since he took over in June he’s been reviewing other businesses to help the company focus on its infrastructure operations. Investors applauded the plan, sending the shares up 5.8% on August 2, and M&G said in Mon-day’s letter that it was pleased with the sale.
Gibson, with a market val-ue of C$2.34bn ($1.8bn), said on Monday that it welcomes M&G’s input and looks forward to continuing its dialogue with the investor.
BUSINESS11Gulf Times
Friday, August 18, 2017
Alibaba profit nearly doubles on robust revenuesCORPORATE RESULTS
Chinese e-commerce giant Alibaba said yesterday
its net profit almost doubled in the latest quarter on
the back of solid revenue growth in its core shop-
ping business and in cloud computing.
Alibaba, which has made billionaire founder Jack
Ma one of China’s richest men and a global e-
commerce icon, has seen its New York-listed shares
soar 80% since last December on perennially
robust earnings.
With those shares at all-time highs, the company’s
market worth has been fast approaching that of
industry leader Amazon.
Alibaba said net income in the quarter which ended
June 30 was 14.7bn yuan ($2.2bn), a year-on-year
increase of 94%.
Alibaba thoroughly dominates e-commerce in
China mainly through its Taobao platform, and its
continued strong earnings performances have
underlined the strength of the sector even as the
country’s broader economic growth has slowed.
“We had a great quarter,” executive vice chairman
Joseph Tsai told a conference call.
Tsai said the results were strong because “we
sowed the seeds years ago by investing in technol-
ogy, by investing in innovation, by investing in
people and by being bold with vision that nobody
thought was possible.”
He added that “the Alibaba Economy is self-rein-
forcing and it is as strong as ever.”
Overall revenues in the quarter rose 56% to 50.2bn
yuan, beating the $7.2bn average of analyst esti-
mates compiled by Bloomberg.
The performance also beat the 45-49% increase for
the quarter that the company itself forecast back
in June.
Revenue from its core commerce off erings grew
58% in the quarter to 43.0bn yuan, while cloud
computing revenue jumped 96% to 2.4bn yuan, it
said in an earnings statement.
Alibaba’s Taobao platform is estimated to hold
more than 90% of the consumer-to-consumer mar-
ket, while its Tmall is believed to handle over half of
business-to-consumer transactions.
Chief executive Daniel Zhang called the results
“a clear reflection of the tremendous appeal and
potential of Alibaba’s platform economy.”
The company said mobile monthly active users
on its China retail market places grew to 529mn in
June, an increase of 22mn over March of this year.
Zhang said the large number of users “gives us
a very good chance to understand more about
customers, then gives us the chance to innovate in
the retail format.”
With its e-commerce operations unassailable at
home, Alibaba has sought to extend its shopping
dominance by investing in a string of Chinese
bricks-and-mortar retailers.
But the company, based in the eastern Chinese city
of Hangzhou, also has poured money into cloud
computing, digital media and entertainment as its
seeks to build up new revenue streams.
Revenue from digital media and entertainment
operations increased 30% 4.0bn.
Alibaba said it also was laying the foundation for
long-term growth in its international operations,
largely through the Southeast Asian e-commerce
platform Lazada.
Alibaba raised its stake in Lazada to 83% in the
quarter.
International revenues reached 2.6bn yuan in the
latest quarter, up 136% year-on-year.
Asda
Asda, the British supermarket arm of Wal-Mart, the
world’s largest retailer, reported its first underlying
sales growth in three years yesterday and said its
back-to-basics turnaround under a new manage-
ment team was working.
Of Britain’s big four supermarket players — market
leader Tesco, Sainsbury’s, Asda and Morrisons —
Asda has been hurt the most by the rise of German
discounters Aldi and Lidl as its traditional price
advantage was eroded.
Wal-Mart has said Asda was too slow in responding
to that competition and prior to Thursday’s update
Asda had reported eleven straight quarters of like-
for-like sales decline.
Wal-Mart veteran Sean Clarke, who re-joined Asda
as CEO in July last year, and former Sainsbury’s
executive Roger Burnley, who started as chief
operations off icer three months later, have focused
their turnaround eff orts on the retail basics.
They have re-established Asda’s competitiveness
by sharpening pricing in key areas such as fresh
meat and vegetables, have improved the quality
and availability of product ranges and have made
its stores more attractive to shoppers.
Asda said like-for-like sales rose 1.8%, excluding
petrol, in its fiscal second quarter to June 30.
That compares with a 2.8% fall in its first quarter.
In Asda’s second quarter last year sales slumped
7.5%, its worst ever quarterly result, meaning com-
parative numbers were very weak.
The outcome also benefited from food price infla-
tion across the industry.
“Customers are responding to investments in price
and store experience by visiting the stores more of-
ten and increasing their basket sizes,” said Wal-Mart
President and CEO Doug McMillon, who visited
Asda’s operations in June.
“There’s still much more to be done, but we’re
clearly headed in the right direction.”
Clarke noted 275,000 new customers shopped
at Asda in the second quarter, particularly during
Easter, but he cautioned that the market remained
competitive.
All of Britain’s supermarket are also having to deal
with cost pressures as the post-Brexit vote fall in
the value of the pound has made imports more
expensive, and with more grocery sales moving
online.
British retail sales slowed in July, as shoppers
reduced purchases of most things other than food,
adding to worries about falling consumer demand,
off icial data showed yesterday.
After Asda’s profit slumped 11.5% in 2016 the firm is
looking to cut costs.
It is in talks with stores staff over changes to work-
ing hours and possible redundancies.
Last month the Sunday Times reported that Asda
was considering a £4.4bn ($5.7bn) takeover of Brit-
ish discount retailer B&M European Value Retail.
Asda has declined to comment.
However, a source with knowledge of the situation
said the report was not true.
Separately yesterday Wal-Mart reported a 12th
straight quarterly increase in comparable sales,
though margins fell, reflecting price cuts and
investment in e-commerce.
NN Group
Core earnings at Dutch insurer NN Group rose a
higher than expected 26% in the second quarter,
boosted by stronger sales and its recently com-
pleted acquisition of Delta Lloyd.
Operational profit rose to €404mn ($476mn),
including Delta Lloyd’s contribution of €49mn,
beating an average analyst prediction of 345mn,
according to a Reuters poll.
“We are very pleased with the integration of Delta
Lloyd, which is making healthy contributions to our
results and sales”, chief executive Lard Friese said
on a call with reporters yesterday.
Delta Lloyd agreed to a takeover by NN late last
year, ending a turbulent period in which the com-
pany struggled to strengthen its capital base and
clashed with the Dutch central bank, leading to the
departure of top executives.
The €2.5bn acquisition was completed in May.
NN said it had made a capital injection of €500mn
into Delta Lloyd to strengthen its financial buff ers.
Analysts had expected NN to make some sort of
injection into the newly acquired group but had not
known how much.
NN Group’s total capital adequacy measure under
Europe’s new Solvency II rules came in at 196% at
the end of June, from a pro-forma 180% at the end
of March.
Yet the insurer’s capital strength remains a key
issue.
JP Morgan Cazenove analysts said the overall
capital ratio of NN was materially better than
expected, with merger benefits coming in ahead of
expectations.
RBC Capital, however, said the capital injection was
a concern, possibly raising a red flag about NN’s
due diligence on the acquisition.
Friese said NN will set out its plans in a day of brief-
ings for analysts and investors on Nov.
30, adding that growth prospects looked bright.
The acquisition of its former rival drove new sales
up 40% in the latest quarter to €400mn.
The company’s net result dropped by a quarter to
€240mn, mainly due to a provision for tax claims
on former activities in Australia.
Vestas
Danish wind turbine maker Vestas posted weaker
than expected earnings yesterday and warned of
growing price pressures, sending its shares down
more than 7%.
Governments from Europe to Latin America are
replacing guaranteed set payments from green
power sources, known as feed-in tariff s, with com-
petitive tenders, putting downward pressure on
prices throughout the supply chain.
“We definitely see a very competitive market...
driven by the fact that the market is transforming to
market-based auctions and competitive tender-
ing,” Vestas chief executive Anders Runevad told
Reuters.
“What’s diff erent now is that we see it in all markets..
The change is that it’s starting to be the new normal
and that is putting additional competitive pressure
into the market,” Runevad added.
Vestas’s revenue and profit both fell more than
forecast despite higher-than-expected orders.
But the company would defend its margins by
developing more eff icient turbines and making cost
savings, Runevad said.
Its operating margin fell 20% in the past three
months to 12.6% compared with the previous
quarter.
It kept its outlook for an operating margin of be-
tween 12 and 14% in 2017 as a whole.
“Prices seems to be lower and that is the big fear in
the market, that the lower prices we see announced
by the developers in the auctions (to set up wind
farms) would flow to the manufacturers,” said
Michael Friis Jorgensen, analyst at Denmark’s Alm.
Brand Markets.
Second-quarter operating profit before special
items fell 30% to Vestas €279mn ($328mn)
compared with last year, below an average 322mn
forecast in a Reuters poll.
Revenue fell to €2.2bn, below a 2.4bn forecast,
while the order intake came in at 2,667 megawatts,
above the 2,501 MW expected.
Runevad saw the transformation of the market
as having some positives. “I think it’s a sound
development of the market and a sign of the
increased competitiveness of wind”. Runevad is
part of a Swedish trio, also including Chairman Bert
Nordberg and CFO Marika Frederiksson, who have
turned the group around and lifted its operating
margin through cost-cutting measures to levels
unprecedented in the industry.
Many analysts had forecast an upgrade of Vestas’s
revenue guidance due to the strong order intake in
the first half of the year.
But the company said it was still forecasting 2017
sales of between €9.25bn and 10.25bn.
Kingfi sher
Kingfisher, Europe’s largest home improvement re-
tailer, reported worse than expected quarterly sales
at its British B&Q business due to a drop in demand
for garden furniture and other summer products,
denting the group’s share price.
The group also saw sales fall at its Castorama and
Brico Depot businesses in France and faced further
disruption from its restructuring plan.
Kingfisher was cautious about the second-half
economic outlook for Britain and France, but said
it was comfortable with average analysts’ forecasts
for underlying earnings per share of 26 pence for
full-year 2017/18, versus 25.9 pence in 2016/17.
“While valuation is not demanding, (the) short-term
risk of further downgrades remains high given the
scale (and) complexity of transformation,” said
Investec analyst Kate Calvert, who has a “sell” rat-
ing on the stock.
Kingfisher is in the second year of a plan to boost
annual profit by £500mn ($645mn) from 2021.
The plan, costing £800mn over five years to deliver,
includes unifying product ranges and improving
e-commerce capabilities.
It said overall like-for-like sales fell 1.9% in its second
quarter to July 31, a deterioration from a fall of 0.6%
in the previous quarter.
Like-for-like sales in Britain and Ireland fell 1.0% and
were down 3.8% in France.
B&Q was the main disappointment.
Its like-for-like sales fell 4.7% versus expectations
for a 3% fall.
The drop reflected a 10.7% dip in sales of seasonal
goods after a first quarter rise of 17% that was
boosted by better weather.
The second quarter last year was also strong, mak-
ing comparatives tough.
Like-for-like sales at Kingfisher’s Screwfix outlet
rose 10.8%.
“B&Q’s performance was impacted by seasonal
swings across Q1 and Q2.
We have also continued to experience some
disruption across the businesses, although on an
improving trend,” said Chief Executive Véronique
Laury.
“Having been very aware that this year would be
challenging given the step up in transformation
activity, we already have self-help plans in place to
support our overall Year 2 performance,” she said in
reference to cost savings.
British retail sales slowed in July, as shoppers
reduced purchases of most things other than food,
adding to worries about falling consumer demand,
off icial data showed yesterday.
Kingfisher’s main British rival Homebase, owned by
Wesfarmers unit Bunnings, reported a £54mn loss
for the year to June 30 yesterday and a 4.3% fall in
fourth quarter same store sales.
It said the poor performance would continue in the
short term as Bunnings restructured the business.
Ping An Insurance
Ping An Insurance Group Co of China, the country’s
second-largest insurer by market value, yester-
day reported its biggest half-yearly profit in at
least a decade on robust growth in life insurance
premiums.
The strength in Ping An’s life insurance business
comes at a time when the broader industry is fac-
ing a tough government crackdown on leverage,
that has led to the country’s chief insurance regula-
tor being investigated for graft and others being
reprimanded for overseas acquisitions.
However, with diverse revenue sources, Ping An
has been able to consistently deliver stand-out
results — its biggest annual profit in more than a
decade in 2016 being a case in point.
But there are concerns the firm may face head-
winds this year as its banking arm struggles against
a regulatory clamp down on off -balance-sheet
instruments.
Ping An posted a net profit of 43.43bn yuan
($6.51bn) for the first half, highest 6-month earnings
since at least 2007 and above 40.78bn yuan it
reported a year ago.
Its total premium income came in at 341.39bn yuan,
versus 256.87bn yuan a year ago.
Net profit for Ping An’s life and health business rose
36.3% to 23.8bn yuan.
Ping An is the only Asian insurer named along with
nine others as systemically important insurers glo-
bally by the Financial Stability Board, a regulatory
task force for the G20 leading economies.
The failure of any one on this list could trigger a
financial crisis.
Profit from its Ping An’s banking arm came in at
12.55bn yuan in the first half, up 2% — slower than
the 6% growth seen a year ago.
“The banking segment has become a valuation
drag due to worsening credit quality, higher
capital requirements, and uncertainties during the
business transformation,” Morningstar said in a
research note.
Ping An Bank, like others in the industry, has been
shifting to retail banking in an attempt to bolster
returns as corporate loans become more risky.
Beijing’s crackdown on riskier lending has already
driven up financing costs.
Policymakers have said the government will contin-
ue to lower overall leverage and that slower growth
in broad M2 money supply, which includes demand
deposits and monies held in easily accessible ac-
counts, could be a “new normal”.China’s insurance
industry saw its overall first-half earnings rise 10%
to 116.8bn yuan, on strong return on investments,
the country’s insurance regulator said in July.
Straumann
Straumann shares hit an all-time high yesterday af-
ter the Swiss dental implant maker’s first-half profit
beat analyst expectations and as it plowed more
than $150mn into acquisitions aimed at accelerat-
ing growth.
Net profit rose 4.4% to 141mn Swiss francs
($145.9mn), Straumann said, beating the 116mn
franc average estimate in a Reuters poll of analysts,
as the company also benefited from some one-time
gains.
Sales also topped forecasts, rising nearly 18% to
539mn francs.
Straumann bought Texas-based ClearCorrect for
about $150mn and took a separate 38% stake in
Spain’s Geniova as it goes up against rival Align
Technology in the market for clear aligners some-
times used instead of metal braces to straighten
teeth.
Chief executive Marco Gadola said the aligner
market is worth about $1.5bn worldwide — Align
Technology has about 70-80%, with ClearCorrect’s
$32mn in annual sales representing just 2-3% — and
growing quickly.
Align Technology’s second-quarter sales rose
nearly 33% to $356mn, the San Jose-based com-
pany said in July.
“Our ambition is not to become the No.
1 player, obviously that would be almost impossi-
ble,” Gadola told Reuters in an interview.
“But this market is growing very, very rapidly.
It’s a heavily underpenetrated market, especially
outside the US, and we believe clearly there is room
for a strong No 2.”
Wal-Mart Stores
Wal-Mart Stores yesterday reported lower quarterly
profit margins and indicated earnings for the cur-
rent period could miss analysts’ estimates as it cut
prices and spent heavily to expand its e-commerce
operations.
The retailer’s shares fell nearly 2%, with investors
shrugging off sales that defied sluggish consumer
demand that hurt many rivals.
Wal-Mart has shown three straight years of compa-
rable sales growth as more people shopped at its
stores and made purchases online.
With a steady rise in the number of people who
shop online, e-commerce sales growth has been
outpacing brick-and-mortar.
Like other retailers, Wal-Mart has been aggressively
investing in its e-commerce business in the past
year.
It has begun off ering programs like free-two-day
shipping and discounts for picking up online pur-
chases at stores, and it acquired several startups,
including Jet.com for $3.3bn last year.
The company’s online sales growth outpaced the
industry at 60% but decelerated from the 63%
increase in the previous quarter.
Wal-Mart said most of the growth has come from its
own online business and not the acquisitions it has
made in the past year.
Sales at US stores open at least a year rose 1.8%,
excluding fuel price fluctuations and including
e-commerce, during the second quarter ended on
July 31.
That exceeded market expectations for a 1.7%
increase, according to research firm Consensus
Metrix.
The company cited its grocery and food business,
which reported its best performance in five years,
and said its online operation added 70 basis points
to comparable sales.
US store visits were up 1.3% from 1.2% a year earlier.
Total revenue increased 2.1% to $123.4bn from a
year earlier.
It would have been up 2.9% without the eff ects of
currency fluctuations, which the company said had
diminished from previous quarters.
Net income attributable to Wal-Mart fell 23% to
$2.9bn due to a loss from repurchasing debt after a
bond tender off er.
Excluding special items, earnings per share of $1.08
exceeded the analysts’ average estimate of $1.07,
according to Thomson Reuters I/B/E/S.
Gross margins were down 11 basis points at 25%,
including a five-basis-point decline in the United
States, compared with analysts’ expectations of
25.22%.
Operating margins fell to 4.9% from 5.1%, and US
operating expenses rose 3.9%.
The company said it expected third-quarter earn-
ings of 90 cents to 98 cents a share, excluding
special items.
Analysts on average had forecast 98 cents.
Wal-Mart raised the low end of its earnings outlook
for the full year to $4.30 per share from $4.20, ex-
cluding items, while keeping the high end at $4.40.
BUSINESSFriday, August 18, 2017
GULF TIMES
Three airlines jostling for Air Berlin assets: CEOAFPFrankfurt
Air Berlin is in talks with three competitors about buying up its assets, the insolvent airline’s
boss said yesterday, warning that not all jobs would be saved.
“Aside from Lufthansa, we are in contact with two other interested par-ties from the aviation industry,” Air Berlin chief executive Thomas Winkel-mann told the Frankfurter Allgemeine Zeitung daily.
The negotiations have been going on for weeks, he said, and all three air-lines were fi nancially sound and large enough “to off er Air Berlin a secure future” while keeping Germany as an operations hub.
He did not name the other two air-lines, but German media have specu-lated that EasyJet and Thomas Cook subsidiary Condor are the other par-ties.
Contacted by AFP, Condor said it stood ready to play “an active role” in the restructuring of Air Berlin.
EasyJet declined to comment.Air Berlin fi led for insolvency on
Tuesday after main shareholder Etihad Airways suddenly pulled the plug on years of fi nancial support for the loss-making airline.
In a controversial move, the gov-ernment stepped in with a €150mn ($170mn) bridging loan to keep Ger-many’s second-largest airline fl ying for the next three months, saying it did not want to leave holidaymakers stranded.
German fl agship carrier Lufthansa is aiming to take over 90 of Air Ber-lin’s 140 planes and operate them un-der its low-cost Eurowings brand, the Sueddeutsche Zeitung reported, citing sources close to the talks.
The number includes the 38 air-craft Lufthansa is already leasing from Air Berlin, as well as the roughly 20 planes operated by Austrian sub-sidiary Niki, the newspaper said, adding that a deal could be sealed “in coming weeks”.
Speaking to the Frankfurter Allge-meine, Winkelmann said he aimed to reach agreements with at least two of the interested buyers in September, with Air Berlin’s landing rights consid-ered particularly valuable.
“But we won’t be able to save all jobs,” the paper quoted Winkelmann as
saying. The airline, sometimes dubbed the “Mallorca shuttle” for its popular-ity with German tourists headed for Spanish beaches, employs some 8,000 people.
It has long battled for survival, booking losses amounting to €1.2bn over the past two years and relying on cash infusions from Abu-Dhabi-based Etihad.
An Air Berlin spokesman told AFP the company could not immediately say when it would announce its fi rst-half results, originally scheduled to be
released on Friday. The government’s intervention, just weeks before a Sep-tember 24 general election, to keep Air Berlin in the air for now has come in for criticism.
Irish budget rival Ryanair has lodged complaints with German and Europe-an competition regulators, slamming what it called a “conspiracy” between the government, Lufthansa and Air Berlin to carve up the insolvent car-rier’s assets.
“If this unlawful take over goes ahead, we may struggle to get slots in
major airports such as Berlin, Munich and Frankfurt where Lufthansa will have control on over 80% of the slots,” Ryanair said in a statement.
The head of Germany’s anti-trust commission, Achim Wambach, told the Rheinische Post newspaper that Lufthansa could expect “tough condi-tions” over its acquisition plans given that the country’s largest carrier and Air Berlin were “direct competitors” on many routes.
The German government has fi ercely defended its decision to help Air Berlin,
with Foreign Minister Sigmar Gabriel saying the fi nancial lifeline was needed to prevent 80,000 travellers a day from being stranded during the busy holiday period.
But a government offi cial told the Handelsblatt fi nancial daily the state aid was a clear example of electioneer-ing.
“Eighty thousand stranded holiday-makers are almost 80,000 voters.
That’s how simple the political calculation is,” the unnamed source said.
Conoco to start dismantling Norwegianoil platform
ReutersOslo
ConocoPhillips has won permission to prepare for the removal of the fi rst
permanent oil platform built off Norway more than 40 years ago, the country’s industry regulator said yesterday.
The US company applied in July to remove Ekofi sk 2/4 A, which started producing oil from the North Sea in 1974 and shut permanently in 2013.
Production at the Ekofi sk fi eld began in 1971 from the Gulftide jack-up rig, a temporary instal-lation standing on removable legs.
Gulftide was replaced with production platforms perma-nently fi xed to the seabed in 1974.
Discovered in 1969, Ekofi sk was the fi rst oilfi eld to begin production off Norway, kick-starting a period of unprec-edented wealth for the nation of 5mn inhabitants.
While the fi eld’s oldest in-stallations are being removed, new equipment was put in place and production is ongoing, with the fi eld expected to continue pumping oil towards 2050.
The Norwegian Petroleum Safety Authority said it had granted consent for Cono-coPhillips to prepare for the re-moval of 2/4 A and three other installations.
With the exception of some smaller parts, the actual removal will depend on a later permit, it added.
ConocoPhillips plans to start preparations in the fourth quar-ter of this year.
The removal plans also in-clude two accommodation plat-forms, Ekofi sk 2/4 H and Ekofi sk 2/4 Q, and a riser platform called Ekofi sk 2/4 FTP.
Dutch company Heerema was awarded the removal con-tract, and all four platforms will eventually be taken to AF Decom yard at Vats on Norway’s west-ern coast for dismantling and steel recycling, a spokesman for ConocoPhillips said.
Operator ConocoPhillips has a 35% stake in Ekofi sk, France’s Total has almost 40%, Italy’s Eni has 12.4%, Norway’s Statoil has 8% and Norwegian state-owned Petoro has 5%.
Maersk faces hefty cyber attack bill; upbeat on shipping outlookContainer shipping fundamentals at best since 2010, says CEO; June cyber attack to cost $200-$300mn; Q2 freight rates rise 22%; Q2 hit by $700mn impairment charges
ReutersCopenhagen
Denmark’s A.P. Moller Mae-rsk gave an upbeat outlook for container shipping, lifting its
shares by as much as 4.5% as investors looked beyond one-off second-quarter charges and a costly cyber attack on its operations.
Maersk has been hit by low oil pric-es at its energy arm and sliding prices in its shipping business in recent years due to lacklustre global trade and a glut of available ships for hire.
The fi rm also said it expected a $200mn to $300mn bill — primarily in the third quarter — from a June 27 cy-ber attack that disrupted its container shipping operations for weeks.
But its chief executive Soren Skou, who has staked his future on Maersk as a transport business, said the container shipping industry is showing signs of recovery this year as freight rates have picked up, while overcapacity is easing as orders for new vessels fall and exist-ing ones are scrapped.
“Container shipping fundamentals
are at their best since 2010,” Skou told Reuters following Maersk’s results.
Skou announced plans last Septem-ber for Maersk to focus on transport, while seeking alliances or a separate listing for its energy division, which in-cludes Maersk Oil.
But Maersk has so far revealed little about progress on its plans, and Skou declined to elaborate on Wednesday.
Maersk shares have risen about 80% since February, in line with an improve-ment in the Baltic Dry index, which measures the price of moving raw ma-terials by sea.
Its shares initially fell 3.5% after Wednesday’s results before jumping as much as 4.5%. By 1310 GMT, they had slipped back to 13,250 Danish crowns, up 1.3%.
“There is no material concern on the underlying performance in the quarter, given that the earnings miss is driven by non-cash items,” Nordea analysts said in a note.
Maersk reported a net loss stood of $264mn, compared with expectations for a $507mn net profi t, according to an average of forecasts in a Reuters poll.
The loss was largely due to impair-ment charges of about $700mn in the terminal and tanker business, which Maersk said were due to lower asset valuations in Maersk Tankers and a loss of fi ve contracts in its APM Terminals unit in the fi rst half of the year.
Maersk said the loss of contracts was a one-off because APM Termi-nals signed 18 contracts for new vol-ume.
Maersk also faced a cyber bill of $200mn to $300mn, highlighting the toll on corporate earnings of a June 27 malware attack.
Cyence, which helps insurers meas-ure cyber risk, said economic costs from the attack would total $850mn.
Maersk’s loading volumes dipped
from typical levels of around 210,000 forty-foot containers to 160,000 in the week following the cyber attack, but had returned to normal by the middle of July, Skou said.
The CEO said he saw no sign of cus-tomers turning their backs on Maersk as a result of the attack, however it had kept him from raising full year profi t forecast beyond previous guidance.
Maersk had begun to implement a back up plan to limit the impact of a future attack, Skou said, acknowledg-ing the company had not been able to recover IT systems quickly enough.
Skou said an increase in freight rates of 22% in the second quarter compared with a year earlier was driven by “good fundamentals” and less overcapac-ity as demand for moving containers at sea has outpaced the supply of new vessels.
“If you look at our second quarter re-sults, they were driven by higher freight rates alone,” Skou said, adding that he expects vessel overcapacity to fall fur-ther.
The company maintained its forecast for a rise in global demand for seaborne container transportation at 2 to 4% this year, but said it was now expected in the upper range.
Maersk’s operating profi t before de-preciation and amortisation (EBITDA) of $2.06bn was in line with the $2.05bn forecast by analysts.
Maersk says it expects a $200mn to $300mn bill — primarily in the third quarter — from a June 27 cyber attack that disrupted its container shipping operations for weeks.
Passenger aircraft, operated by Air Berlin, stand on the tarmac at Tegel airport in Berlin. Air Berlin filed for insolvency on Tuesday after main shareholder Etihad Airways suddenly pulled the plug on years of financial support for the loss-making airline.
Morgan Stanley’s upbeat Turkey bank view defies rate-cycle trendBloombergIstanbul
History suggests otherwise, but Morgan
Stanley says Turkey’s peer-beating banks
have room to rally further.
Analysts including Samuel Goodacre
increased share price targets for four of
Turkey’s biggest lenders by an average
15% on Monday, saying a government
credit guarantee facility will continue to
underpin their earnings.
Istanbul’s banks index is climbing even
as the country’s borrowing costs rise to
the highest in at least six years, defying an
inverse relationship between the two that
had held for longer than a decade. The
gauge is up more than 40% this year.
Traders who bet against the nation’s
lenders this year on the view that higher
interest rates will weigh on earnings have
missed out. A 250bn lira ($70bn) credit
backstop from the government for com-
mercial lenders fuelled a lending boom
even as the central bank drove borrowing
costs higher.
There’s more to come, says Morgan
Stanley, estimating that the Credit Guaran-
tee Fund will add about 1 percentage point
to economic growth and help sustain
strong private consumption.
“We don’t think it’s time to take
profits,” the London-based analysts
wrote in a report, estimating 4% to 12%
higher earnings for the lenders in 2018
than previously. The bank also lowered
its cost-of-risk assumption by 25 basis
points.
The Borsa Istanbul Banks Index jumped
the most in five weeks on Monday, before
trimming some gains. The gauge has still
rallied more than twice as much as the
MSCI Emerging Markets Financials Index.
That’s even as the yield on the nation’s
two-year note, a proxy for short-term
interest rates, has climbed 111 basis points
in 2017.
Not everyone agrees with Morgan
Stanley. With bank balance sheets now
stretched and the central bank showing
no signs of easing liquidity as it confronts
above-target inflation, some analysts and
traders are beginning to question whether
the stocks can prolong their gains without
a boost from lower interest rates.
“The banking sector has exhausted
catalysts for outperformance,” said Julian
Rimmer, a trader at Investec Bank in
London, who is underweight the sector.
Interest rates can’t “fall that much, owing
to the stickiness of Turkish inflation,” and
there is a limit to how much support the
government can provide, he said.
The government’s support for credit
has pushed banks’ lira loan-to-deposit
ratios to a record this year and fuelled
stiff competition to attract customer
funds. The difference between what
banks charge for lira loans and what
they pay depositors to pay for the lend-
ing boom narrowed to a four-year low
in June, and is still near the lowest since
early 2015.
Still, the Morgan Stanley analysts aren’t
concerned. They project that return on
equity for the Turkish banks its analysts
cover will climb to 11% to 17% over the
next two years, a 3 percentage-point to 5
percentage-point increase from a trough
seen in 2015.
“Even in a very tight environment for
liquidity, profit expansion remains intact,”
the bank’s analysts said.