BUSINESSBUSINESSThursday 5 October 2017

PAGE | 23PAGE | 22

Amazon ordered to repay $295m

in back taxes

In siege, banks reinvent themselves

Dow & Brent before going to press

Katara Hospitality launches QR11bn subsidiary to develop Qetaifan Island

The Peninsula

Katara Hospitality, a Doha-based leading global hotel owner, developer and

operator, yesterday announced the launch of Qetaifan Projects company, a newly established subsidiary valued at QR11bn, to develop and manage Qetaifan Island North.

The announcement came during a signing ceremony between Katara Hospitality and Atkins, one of the world’s most

respected design, engineering and project management consultan-cies, assigned to design the masterplan, infrastructure and components of Phase 1 of Qetai-fan Island North. The signing ceremony was attended by Sheikh Nawaf bin Jassim bin Jabor Al Thani, Chairman of Katara Hospitality; Sheikh Nasser bin Abdulrahman Al Thani, Dep-uty Chairman of Katara Hospitality; Tom Hasker, Manag-ing Director - Property, Middle East & Africa for Atkins; and

Lesley Desport, Country Director – Qatar for Atkins.

Qetaifan Islands is a devel-opment located off Lusail City in Doha, Qatar comprising of Qetai-fan Island North, which will be developed by Qetaifan Projects company, and Qetaifan Island South, developed by Lusail Real Estate Development Company. Both islands are connected to the Lusail mainland through two iconic hanging bridges.

Sheikh Nawaf said: “The launch of Qetaifan Projects marks

a significant milestone in Katara Hospitality’s commitment to invest in the development of Qatar’s Tourism industry and capitilise on its growth potential. Our vision is to change the world of hospitality through investment and innovation to leave an out-standing legacy for future generations, in line with the Qatar National Vision 2030.”

Hamad Abdulla AlMulla, CEO of Katara Hospitality, added: “With the development project of Qetaifan Island North, Katara

Hospitality is strengthening its position as a key player of Qatar’s hospitality industry aiming to cre-ate a safe and sustainable investment that will carry the name of the State of Qatar.”

Qetaifan Projects will be developing phase one of the project planned for completion by the first quarter of 2022. Phase one includes an exceptional unique aqua park, a four-star hotel, comprising of 400 rooms, as well as the infrastructure on an estimated area of 350,000

square meters from a total area of 1.4 million square meters. Phase two will include a linear park, mixed-use residential com-plex, retail plaza, souq and staff accommodation.

Qetaifan Island North is a key element of Lusail City’s expan-sion project, and is a comprehensive master plan development centered around a state-of-the-art waterpark with leisure attractions, luxurious hotels, unrivalled accommoda-tion and world-class facilities.

Sheikh Nawaf bin Jassim bin Jabor Al Thani (centre), Chairman of Katara Hospitality and Tom Hasker (second left), Managing Director - Property, Middle East and Africa for Atkins along with other officials at the Qetaifan Projects company launch.

A computer generated image of the aqua park that will be developed as part of Phase I of Qetaifan Island North planned for completion by the first quarter of 2022.. The island will be developed by Qetaifan Projects company.

QIIB opens branch at Doha Festival CityThe Peninsula

QIIB Chairman Sheikh Dr Khalid bin Thani bin Abdullah Al Thani has inaugurated the Bank’s new branch at

the Doha Festival City mall, yes-terday. The opening of the new branch is part of QIIB’s local expansion strategy in response to the increasing demand for QIIB products and services.

The opening ceremony was attended by Dr Abdulbasit Ahmed Al Shaibei, QIIB Chief Executive Officer, Board mem-bers and senior executives attended the event.

After the ribbon cutting, which marked the formal launching of QIIB Branch at the Doha Festival City mall, Sheikh Dr. Khalid, along with the bank’s Board members and senior exec-utives toured QIIB’s latest addition to its branch network.

Later, addressing the employees of the new branch, Sheikh Dr Khalid stressed the need for providing high-quality service to the customers, match-ing to the expectations of various segments of QIIB’s clientele.

The new branch is located on

the first floor of the Doha Festi-val City mall, next to the food court.

A decision was also made to transfer customers’ accounts at the Al Kharaitiyat branch to the Doha Festival City branch, which

has long business hours and is easily accessible, particularly to customers in the surrounding areas. This allows them to per-form their banking transactions, throughout the week.

On the occasion, Dr

Abdulbasit Ahmed Al Shaibei said, “This branch is a continu-ation of the strategy we had announced last year to review our local branches with the pur-pose of giving more attention to the local market and enhancing

our presence in those areas, which are most sought after from the point of view of our custom-ers, particularly malls and important and densely populated areas.

He said, “The new branch is a great addition to our nation-wide branch network. It is the third in commercial malls after the ones at Ezdan Mall and the Mall of Qatar.

“Along with the expansion of its local branch network, the bank has strategic plans to develop alternative channels, which are equally important for customers. These include increasing the number of ATMs, giving attention to and perma-nently developing the call center and constantly enhancing our mobile, telephone and online banking services. ’ Dr Al-Shaibei said.

The Doha Festival City mall branch will be manned by a team of professionals and experts who will serve customers and meet their banking needs, based on the highest international bank-ing standards. The new branch operates Saturday through Thursday, from 9 am to 9pm and on Friday from 4 pm to 9 pm.

France nudges BNP Paribas to Commerzbank tie-upTHE French government yes-terday nudged the country’s biggest bank, BNP Paribas, towards a possible tie-up with Germany’s Commerz-bank amid media speculation that Paris and Berlin want the two giants to merge.

Shares in Commerzbank surged last month amid rumours that the German government might soon sell its 15.6-percent stake in the bank.

“BNP Paribas’ interna-tional development is the business of BNP Paribas and it would be good if it also turned towards Germany and towards an important bank such as Commerz-b a n k , ” g o v e r n m e n t spokesman Christophe Cas-taner told journalists. French paper Le Canard Enchaine said French President Emmanuel Macron would be “very favourable” towards a tie-up between BNP Pari-bas and Commerzbank.

Sheikh Dr Khalid bin Thani bin Abdullah Al Thani (third left), Chairman and Managing Director, QIIB; Dr Abdulbasit Ahmed Al Shaibei (left), CEO, along with other officials and guests cutting a cake to mark the opening of the bank’s branch at Doha Festival City, yesterday. Pic: Abdul Basit / The Peninsula

$50.06$50.06-0.36-0.36

BRENT

8,152.98+131.70 PTS

1.59%

7,467.58+0.53 PTS

0.01%

QE FTSE100

22,662.52+20.85 PTS

0.09%DOW

22 THURSDAY 5 OCTOBER 2017BUSINESS

QIB complies with QCB’s cheque normsThe Peninsula

Qatar Islamic Bank (QIB) announced that it has successfully imple-

mented the new Qatar Central Bank (QCB) regulation regard-ing the centralisation of cheque book printing through the Min-istry of Interior (MOI). QIB is the first bank in Qatar to implement the new regulation.

The step comes after QCB issued a circular requiring all banks operating in the coun-try to use MOI cheque printing services instead of private companies. QIB has changed and implemented all the nec-essary procedures to comply with these requirements and apply them within the period specified by QCB.

The new regulation require that all old cheque books be replaced by the end of the year. QIB customers wishing to replace their cheque books are requested to visit their

respective branch. The new requirement is part of QCB’s strategic efforts to further secure and standardise the banking system in Qatar.

It involves specific print-ing standards which will safeguard banking customers’ transactions and enhance the safety of cheques as a payment instrument. The new standards are ensuring that cheques issued in Qatar can leverage all new and emerging image technologies.

“QIB has been at the fore-front in providing its customer base with the highest security features for cheque printing since four years ago. We have now completed the implemen-tation of the new QCB cheque book printing requirements, in collaboration with MOI Secu-rity Printing Press, which will help standardise the printing process to offer QIB custom-ers a highly secure service,” said Bassel Gamal, QIB’s Group Chief Executive Officer.

QC & Turkish furniture manufacturers’ delegation discusses cooperationThe Peninsula

Qatar Chamber (QC) dis-cussed the possibility of enhancing joint coopera-

tion with a visiting delegation from Turkish furniture manu-facturers under the Kayseri Furniture Industrialists’ Associ-ation (Kaymos), which is currently visiting Doha led by its chairman, Yakup Deveci.

QC Vice Chairman Mohamed bin Ahmed bin Towar said that the Qatari market welcomes Turkish investments in all indus-trial, commercial, service and logistics sectors, during the meeting, which discussed ways to open new partnerships with the Turkish association.

The private sector partner-ship between Qatar and Turkey is reflected on the volume of trade between the two countries, which amounts to QR2bn, Tawar said.

“QC is ready to provide all the necessary support to the Turkish Association to expand

its investments in Qatar,” Bin Tawar said, adding that further meetings between business-men in the two countries will result in long-term partner-ships that contribute to the strengthening of economic relations between the two sides.

T h e 1 2 0 - m e m b e r

association of textile, fabric and decoration manufacturers in Kayseri seeks to create part-nerships with companies in Qatar that have an attractive investment climate and are among the fastest growing in the region, Kaymos chairman Yakup Deveci stressed.

Discussions are being held

by the association with export-ers in Turkey in order to reduce shipping costs and the trans-port of goods and products to Qatar, which will open up the horizons for economic coop-eration between the private sector in both countries, espe-cially in the upholstery sector, Deveci added.

IATA calls for urgently tackling emissions challengeThe Peninsula

The International Air Trans-port Association (IATA) called for greater urgency

in the partnership between gov-ernments and airlines to keep aviation at the leading edge of industries in managing their cli-mate change impact.

The call came on the eve of the first anniversary of the his-toric global agreement on a Carbon Offsetting and Reduc-tion Scheme for International Aviation (CORSIA) at the 39th

Assembly of the International Civil Aviation Organization (ICAO).

“CORSIA was a historic demonstration of what can be achieved when governments and industry work together. Implementing it will be a criti-cal enabler of aviation’s commitment to carbon neutral growth from 2020. But our ulti-mate goal is much more ambitious—cutting net emis-sions to half their 2005 levels by 2050,” said Alexandre de Juniac, IATA’s Director General

and CEO. Specifically, airlines are looking to work with gov-ernments in four areas to accelerate the sustainability agenda. They include broaden-ing the coverage of CORSIA, preparing for CORSIA imple-mentation, promoting the development of Sustainable Aviation Fuels (SAF) and new technologies and improving infrastructure.

With 72 countries set to vol-unteer from the initial voluntary period (commencing in 2021) CORSIA will cover more than

80 percent of international avi-ation. “That’s an impressive start. But CORSIA will be an even bigger success if more countries join in. Now is the time for the industry, along with those governments already on board, to step up efforts to broaden participation,” said de Juniac.

Airlines will need to estab-lish systems for monitoring, and verification of carbon output; and for the purchase of offsets. It is important that governments finalize the technical details of

CORSIA early on so that these systems are ready when COR-SIA is implemented.

Airlines are increasing the numbers of commercial flights using sustainable fuel year-on-year. But production levels at competitive cost are only able to satisfy a small portion of flights. “Our call for government action on SAF is clear: they should be given the same incen-tives as alternative fuels for other sectors. And we have also made it clear that we are not interested in alternative fuels

that disturb the ecological bal-ance,” said de Juniac.

Significant emissions reduc-tions could be delivered by improving infrastructure effi-ciency, particularly air traffic management. “Air navigation services remain stuck in the architecture of the mid-20th century, while aircraft embrace the technology of the 21st cen-tury. The political issues which create artificial borders in the sky must be tackled to unlock emissions savings and generate economic opportunities.”

Middle East firms risk $1m in ransomware attacks

Mohamed bin Ahmed bin Towar (right), QC Vice Chairman with Kayseri Furniture Industrialists’ Association officials.

In siege, banks reinvent themselvesSatish Kanady The Peninsula

The unprecedented blockade against Qatar has helped the local banks to rein-vent themselves to

explore the opportunities lying beyond their traditional mar-kets. The blockade gave an opportunity for Qatari banks to tap new markets that they haven’t been to before, QIIB CEO Dr Abdulbasi Ahmed Al Shaibei (pictured) has said.

Just like any other sectors of the Qatari economy, the banks have found their ways to stabilise themselves by rea-ligning with new markets.

“ All these years, we have been mainly focusing on our traditional markets. Now, we are in the markets that we thought that we don’t have to go and are moving to more places geographically”, Dr Al Shaibei told The Peninsula, yesterday.

Currently, Qatari banks are not facing any serious funding pressures. The market is very

stable and there is enough liquidity in the system. Depos-its are also growing, he said.

“Yes, in the beginning, the banking sector was surprised by the unprecedented block-ade decision. It was really surprising that the neighbour-ing countries will act like this. But the fact is that the banks do all kinds of risk analysis The QCB always has contingency plans for different scenarios and different conditions. Thanks to QCB’s capital

injection, the banking system successfully overcame the shock in a short period.”

“There is no funding pres-sure, market is very stable and smooth; and we are seeing growth in deposits”, he said.

On QIIB’s plans to issue lat-est round of sukuk, Dr Al Shaibei said the bank is weigh-ing the market pricing.

“Our $700m Sukuk is maturing on October 18. We have approval to issue $2bn sukuk. We may either go for $700 issuance or $500. As of now, we do not face any

liquidity problem. So we are currently testing the market to see whether the prices are acceptable for us”, he said.

“If we think we will get the price that we are expecting, we will issue the next round of sukuks. Otherwise, we will put our plans on hold”.

The planned bond sale fol-lows the bank’s decision in April to renew a sukuk issu-ance programme of up to $2bn.

On the banking sector’s fourth quarter expected per-formance Dr Al Shaibei said the economy is promising. There will be extra deposits in the banks. The blockade has proved that Qatar can turn challenges into opportunities. The country’s private sector is growing at a record pace.

“We have lot of opportu-nities in the private sector. When the private sector becomes more independent, the banking sector will defi-nitely benefit from it”.

These positive trends will certainly reflect in the final quarters, he said.

Liquidity

Qatari banks are not facing any serious funding pressures, currently. The market is very stable and there is enough liquidity in the system.

The QCB always has contingency plans for different scenarios and different conditions.

The Peninsula

The average Middle East organisation faces high risk of ransomware attacks,

which could cost nearly $1m industry experts commented yesterday on the results of a report released ahead of GITEX Technology Week in Dubai.

Since the summer, hundreds of thousands of computers worldwide have been infected by the WannaCry ransomware, a malware that encrypts data and demands ransomware payment via Bitcoin currency, and the Petya ransomware, which encrypts the hard drive.

Worldwide, 30 percent of companies have had ran-somware infections, causing massive costs in sales and pro-ductivity, according to a recent survey by Imperva for security firm RSA. Data loss costs an aver-age business $914,000, according to Dell EMC. Cyberse-curity experts label malware an “arms race”, as hackers develop

increasingly complex malware, and security vendors counter with stronger technology defenses.

“WannaCry and Petya mal-ware attacks are not isolated incidents – every Middle East CIO needs to be prepared for malware attacks increasing in quantity and complexity, or risk massive losses,” said Savitha Bhaskar, COO at UAE-based IT infrastructure and information management consultancy and solutions provider Condo Pro-tego. Among verticals, the services sector is at highest risk of ransomware attacks, bearing the burden of 38 percent of total attacks, according to a recent report “The good news for Mid-dle East CIOs is that most of them already have the technology solutions to fortify their cyber defenses. GITEX Technology Week provides the platform to educate Middle East CIOs on the importance of working with spe-cialised cybersecurity channel partners,”she added.

Oman to create 25,000 state jobs by year-endDubai

Bloomberg

Oman pledged to create 25,000 public sector jobs by December, a move

aimed at staving off potential unrest over unemployment but one that risks adding to a budget gap that was the Gulf’s widest last year.

The government will follow up with additional measures to address the lack of jobs in the sul-tanate, the state-run Oman News

Agency reported yesterday, cit-ing the cabinet’s decision a day earlier. Unemployment was 17.5 percent in 2016, according to the World Bank.

The move has echoes of the government’s pledge to create 50,000 jobs in 2011, after an unprecedented wave of protests as part of the Arab Spring left two people dead in clashes with security forces. Six years on, the economy is the trigger. Oman’s budget deficit was about 21 per-cent of gross domestic product

in 2016, the highest in the six-nation Gulf Cooperation Council, according to International Mon-etary Fund data. Its gross debt ratio was almost three times that of Saudi Arabia -- the region’s biggest economy.

“It’s a tough balancing act for the sultanate, and I can see why weakening growth and ready access to funding would encour-age the authorities to spend,” said Simon Williams, HSBC Holdings Plc’s chief economist for central and eastern Europe, the Middle

East and North Africa, adding that the government’s financial posi-tion should give it pause. “Long-term stability requires sustained adjustment, even at the cost of short-term pain.”

Oman has smaller oil reserves and less of a cushion in government savings than its wealthier neighbors, making it vulnerable to the impact of lower oil prices that has depressed growth across the region. Moody’s Investors Serv-ices cut Oman’s rating it its

second-lowest investment grade in July, citing the sultanate’s lim-ited progress in addressing structural vulnerabilities. Oman has a sub-investment grade sta-tus at S&P Global Ratings.

Oman’s benchmark MSM30 Index of stocks has retreated 9.4 percent this year.

The hiring plan could spur private consumption amid slow growth in the non-hydrocarbon sector, said Carla Slim, an econ-omist at Standard Chartered in Dubai.

Qatar’s oil prices riseQATAR’S oil prices rose in September by 7.3 percent and 7.8 percent. Qatar Petroleum (QP) announced yesterday the price of Qatar’s crude oil for September at $54.85 per bar-rel compared to $50.90 for the previous month, up 7.8 percent. The price of Qatar’s offshore oil for September was set at $53.60 a barrel from $49.95 a barrel in August, up 7.3 percent

23THURSDAY 5 OCTOBER 2017 BUSINESS

UK may lose status as leading data marketLondon

Bloomberg

Brexit could cost the UK its position as the leading data market in Europe, a

government-funded digital innovation group warns.

The British economy could miss out on as much as £67bn ($79bn) annually by failing to play its cards right in Brexit negotiations with the European Union over data market access, according to a report published yesterday by the UK Digital Catapult. The Digital Catapult is a government-backed center that helps industries commer-c i a l i z e c u t t i n g - e d g e technologies.

The UK currently has the largest market for data—rang-ing from aggregate purchase data from retail shops to infor-mation on mobile phone locations—in Europe, worth an estimated £13bn in 2016, according to figures from mar-ket research firm IDC Europe

cited by the Digital Catapult. Before the UK voted to leave the EU in 2016, the European Commission forecast this could more than double by 2020. But how well the UK market per-forms depends on whether data can continue to flow freely between Britain and the EU. The UK is in the process of updating its data protection laws so that they are broadly equivalent to the new Euro-pean regulations that take effect in 2018.

This should allow data to continue to flow smoothly in the immediate wake of Brexit.

The issue will come, the report says, if UK data protec-tion rules later diverge from the EU rules. The EU is pressing ahead with efforts to further harmonize data regulation across all the member coun-tries to create a Digital Single Market.

What access the UK would have to this market is uncer-tain, the report said.

Pirelli’s Executive Vice Chairman, Marco Tronchetti Provera (centre) rings the bell of Milan’s Stock Exchange to mark the return of Italian tire maker Pirelli, yesterday. Italian tire maker Pirelli set a share price for its stock market return in Europe’s biggest IPO this year, valuing the company at a total ¤6.5bn ($7.7bn).

Pirelli returns to market

London

Reuters

Spain’s deepening political crisis drove up the cost of insuring exposure to Span-

ish sovereign and bank debt to multi-month highs yesterday and rippled out to Italian and Portuguese credit default swap (CDS) markets.

The leader of Catalonia, the region which held an independ-ence referendum on Sunday, has pledged to declare independ-ence in “days”, plunging Spain into its worst constitutional cri-sis in decades.

The referendum has been declared illegal by Spain’s gov-ernment but the uncertainty has driven up yields on government bonds to the highest since March, slammed Madrid’s stock mar-kets and fuelled a surge in sovereign CDS.

CDS are derivative contracts commonly used by investors to hedge against the risk of default or restructuring by a borrower. A rise in CDS indicates that mar-kets assign higher risk of the entity being unable to meet its

obligations in future. Spain’s five-year sovereign CDS have risen to the highest since March, inching up two basis points on Wednesday to 73 basis points, according to IHS Markit data.

This means it costs roughly ¤73,000 a year to insure expo-sure to ¤10m worth of Spanish debt for a five-year period.

Spanish CDS traded as low as 54 bps on September 19.

Banks based in Catalonia are caught up in the tremors - five-year CDS for the Catalonia-based Caixabank rose 2 basis points (bps) from Tuesday’s close to 76 bps, the highest since mid-July.

CDS of Banco Sabadell, also headquartered in Catalonia, were at a one-month high of 75 bps, Markit said.

“CDS are going up because of perceptions of risk, so that would have implications for cost of equity from an equity inves-tor’s point of view as well,” Benjie Creelan-Sandford (pic-tured), Spanish banks analyst at Jefferies, said. Caixabank is Cata-lonia’s largest lender, and the country’s economy minister has reassured bank customers that

their deposits are secure from the growing crisis.

However, investor nerves have hit both banks’ bonds. The yield of Caixabank’s 2023 bond for instance rose to a record high while Banco Sabadell saw yields on its 2026 bond rise to above 3.8 percent for the first time in more than two months.

Creelan-Sandford noted however that CDS on the banks remained well below where they had been early in 2017 while share prices for Caixa and Sabadell were still around 20 percent higher on the year.

“Throughout this year the Spanish economy has been con-tinuing to do extremely well, and the banks have been big

beneficiaries of that,” he said. “The move that we have seen today in banks’ CDS is very small in the context of where we have seen CDS historically.” Still, the crisis is starting to impact other southern European states, push-ing up bond yields in the region.

Markit data showed Italy’s 5-year CDS 4 bps rising four bps to 145 bps, the highest since end-August. It ended last week at 138 bps. Portuguese 5-year CDS rose 2 bps to 146 bps, the highest since mid-September and Spain’s CDS rose 2 bps to 73 bps, a five-month high.

Analysts say there could be more pain to come for asset prices in Spain and southern Europe. Catalan business lobby Cercle d’Economia said it was extremely worried by the pros-pect of Catalonia declaring independence and warned of “very serious consequences” for the region. “Spanish bonds con-tinue to underperform versus their peers and we think there will be another leg wider should the Catalan Leader declare inde-pendence,” Nomura analysts told clients.

Amazon ordered to repay $295m in back taxesBrussels

Reuters

Amazon was told yes-terday to pay about ¤250m($295m) in back taxes to Luxem-bourg, the latest US

tech company to be caught up in a European Union crackdown on unfair tax deals.

The fine was much lower than some sources close to the case had expected and is only a fraction of the ¤13bn that Apple Inc was ordered to pay to Ireland last year.

EU Competition Commis-sioner Margrethe Vestager (pictured), who has other big US tech companies in her sights, has taken a tough line on multina-tional companies’ approach to tax.

“Luxembourg gave illegal tax

benefits to Amazon. As a result, almost three quarters of Ama-zon’s profits were not taxed,” Vestager said.

Amazon said it was consid-ering an appeal. “We believe that Amazon did not receive any spe-cial treatment from Luxembourg and that we paid tax in full accordance with both Luxem-bourg and international tax law,” Amazon said in a statement after

the announcement.Amazon shares were little

changed in early yesterday trad-ing. Though the EU has taken on several US tech companies, both in antitrust and in tax avoidance cases, Vestager said that her approach was not biased against foreign companies

“This is about competition in Europe, no matter your flag, no matter you ownership,” Vestager said. She also welcomed the debate kicked off by French President Emmanuel Macron who called for more integrated corporate tax regimes in Europe, aiming to close the loopholes used to reduce tax bills.

While the exact amount Amazon needs to repay is yet to be calculated, the ¤250m is sig-nificantly less than the ¤400m which sources close to the mat-ter told Reuters a year ago was

under consideration by Vestager.The bill suggests the Com-

mission believes Amazon shielded around ¤900m in EU profits from tax, calculations by Reuters show. For most of its existence, Amazon has worked on razor thin profit margins to fuel its global expansion, mak-ing only $2.4bn profit on global revenues of $136bn in 2016.

The Commission said Lux-embourg allowed Amazon to

channel a significant portion of its profits to a holding company without paying tax. The holding company was allowed to do this because it held certain intellec-tual property rights.

Tax advisers say an impor-tant way for companies to shift profits out of the United States is to sell intellectual property, like brands or patents, to a subsidi-ary in a country where such profits are not taxed and have that unit licence the intellectual property to other overseas affil-iates. Amazon’s corporate set up with subsidies in Luxembourg was also subject of a $1.5bn court case with US tax authorities, which Amazon won in March.

Amazon, which employs 1,500 in the grand duchy, is one of the biggest employers in the country of half a million people. It has a Europe-wide staff of

some 50,000. Luxembourg, whose tiny economy has bene-fited from providing a European base for multinational companies, rejected the finding and said it was looking at its legal options.

European Commission Pres-ident Jean-Claude Juncker was prime minister of Luxembourg for almost two decades until 2013 and has been criticised for his role in enabling the many tax deals that are now being unravelled. He denies doing anything wrong and says the Commission is commit-ted to ensuring fair taxation.

In 2014, Luxembourg made international headlines in the wake of the publication of “Lux-Leaks”, documents that showed how large accounting firms helped multinational companies channel proceeds through the country while paying little or no tax.

Opec looks to extend or deepen oil supply cutMoscow

Reuters

Oil producer group Opec is looking at extending or deepening a supply-

cutting deal with non-member countries, two Opec ministers said yesterday, keeping open the prospect of additional action to get rid of a glut and prop up prices. The agreement by the Organization of the Petroleum Exporting Countries and non-Opec producers including Russia to cut supply by about 1.8 million barrels per day (b/d) runs until March 2018.

Iran’s oil minister, among a number of Opec oil ministers in Moscow to attend an energy event, said he saw no objection

within Opec to extending or even deepening the pact.

The supply cut and rising global demand have started to whittle down excess supplies, helping oil last week to reach almost $60 a barrel, its highest in more than two years.

Venezuela’s oil minister Eulogio del Pino also said there were discussions on whether to cut further or extend the deal.

Such a move would require the support of Opec’s de facto leader Saudi Arabia and Rus-sia, the largest deal participant outside the organisation.

Russia has said it is prema-ture to talk of extending the pact. Opec has been urging other producers to join the sup-ply pact.

VW to curb competition from SkodaBerlin

Reuters

Volkswagen managers and unions are seek-ing to curb competition

from lower-cost stablemate Skoda, move some of its pro-duction to Germany and make the Czech brand pay more for shared technology, company sources told Reuters.

As VW struggles to cut jobs and spending at German factories and turn the page on dieselgate, Skoda’s superior car reviews and profitability have intensified the brands’ rivalry within the Volkswa-gen empire.

VW now wants to reduce what it sees as Skoda’s unfair advantages - combining Ger-man technology with cheaper labour - and reaffirm the top-selling brand’s primacy ahead of a wave of new electric car launches, the sources said.

Skoda has blossomed under 26 years of VW group ownership into a successful mid-market carmaker, stead-ily winning business from rivals - including VW - and surpassing even Audi’s oper-ating profit margin last year.

VW’s Its powerful domes-tic unions see Skoda’s success as both a threat and a poten-tial lifeline.

Dollar rally stalls on talk of more dovish Fed chairLondon

Reuters

The dollar dropped back from seven-week highs a quar-ter of a percent to 93.437

yesterday, amid speculation that US President Donald Trump’s choice for the next head of the Federal Reserve could be a less hawkish candidate than had pre-viously been expected.

The greenback had reached its highest since mid-August against a basket of major curren-cies on Tuesday, driven by stronger economic data, as well as expectations for another Fed rate hike by the end of the year and a revival of the so-called “Trumpflation trade”.

But it fell across the board yesterday, with investors con-cerned that the Fed might be set

to take a more dovish turn after a Politico report that Fed Governor Jerome Powell is favoured over former governor Kevin Warsh by US Treasury Secretary Steven Mnuchin. While both are seen as serious candidates to replace cur-rent Chair Janet Yellen when her term expires in February, Powell is seen as more dovish than Warsh, who has criticised the Fed’s bond-buying programme in

the past. “Only a couple of days ago everyone was going for Warsh as successor, who the market saw as standing for a much tighter US policy,” said Commerzbank’s head of currency research in Frankfurt, Ulrich Leuchtmann (pictured).

“Now everyone is thinking that Powell is the more likely choice and thinking of Powell as someone who will do very grad-ual policy incrementations.

Spanish crisis sends debt insurance costs surging

Estimated fine

The exact amount Amazon needs to repay is yet to be calculated, the ¤250m is less than the ¤400m a year ago was under consideration by Vestager.

24 THURSDAY 5 OCTOBER 2017BUSINESS

Stewardesses in the economy class cabin during a tour of SilkAir’s new aircraft, the Boeing 737 Max 8 at Changi Airport in Singapore, yesterday.

SilkAir’s new aircraft

Tokyo

Reuters

Honda Motor Co plans to end production at its Sayama plant in Japan by

2022, cutting capacity by around 24 percent in its shrinking domestic market as it shifts focus to electric cars (EVs) and other new technologies.

The carmaker has seen stag-nant domestic sales and said on Wednesday it was streamlining its Japanese operations as it takes a more nimble approach to development and manufac-turing in the face of fierce competition from carmakers and technology companies to make EVs and self-driving cars.

“As we focus more on adopt-ing electrification and other new technologies, we want to hone our vehicle manufacturing exper-tise in Japan and expand it globally,” CEO Takahiro Hachigo told a press conference.

While automobile plant clo-sures are rare in Japan, Honda, like its global rivals, is facing pressure to cut costs in legacy businesses, including countries where sales and profits are weak, in order to fund

expansions in China and devel-opment of new technology.

Earlier this week, Toyota Motor Corp ended production at its production plant in Aus-tralia, while Ford Motor Co said it would cut $14bn in costs in the next five years. General Motors Co earlier this year sold its Euro-pean operations to France’s PSA Group while it also plans to exit India and other countries where sales have been struggling.

Hachigo has been trying to revive a culture of innovation at Japan’s No. 3 carmaker, after a number of major recalls in recent years as well as lacklus-tre product offerings, partly because it focused so much on increasing volumes and profit.

Honda said it would consol-idate production at the ageing Sayama plant in Saitama Pre-fecture north of Tokyo, into its Yorii plant in the same prefec-ture by the end of the 2022 financial year.

The move would cut over-all domestic annual production capacity to around 810,000 units, the same as Honda’s cur-rent output levels, which are around 76 percent of its current production capacity of 1.06 mil-

lion vehicles.“Domestic sales haven’t

increased as much as we were expecting and it has become dif-ficult to boost exports,” Hachigo said.

Following consolidation, Honda said the Yorii plant will produce EVs and serve as a major centre for developing manufacturing technology for electric cars. It will also produce other vehicles including larger-sized global models.

While the automaker cuts capacity at home, it plans to open a new plant by 2019 in China, where it has seen explo-sive growth. Honda also has been expanding capacity in North America and just recently announced plans to expand out-put of its Accord sedan at one of its plants in Ohio. Overall, glo-bal annual production would remain largely unchanged at around 5.06 million units, it said.

Honda has struggled to expand sales at home in the past few years, facing stiff competition from popular offerings including Toyota’s Prius gasoline hybrid and Nis-san Motor Co’s, Note compact hatchback.

Moscow

Reuters

Russian President Vladimir Putin said yesteerday that a deal between Opec and

rival oil producers to reduce pro-duction could be extended to the end of 2018, a longer timeframe than others have suggested, in a bid to curb a supply glut.

The pact between the Organ-ization of the Petroleum Exporting Countries, Russia and other producers on cutting out-put by about 1.8 million barrels per day (b/d) is now due to expire

in March. “Everyone is interested in a stable market. What we did with Opec, I believe, is benefi-cial for all the global economy,” Putin told an energy forum in Moscow attended by several Opec oil ministers.

“When we decide on whether to extend or not, we will decide on the timeframe. But on the whole, if speaking about a possible extension, this should be at least until the end of 2018.”

The Russian president’s comments raise the prospect of a longer extension than others have mentioned. Opec ministers

have suggested prolonging the deal by months but not until the end of 2018.

The participants are show-ing more confidence that the supply cuts, which began in Jan-uary, are starting to erode a glut. With help also from rising demand, oil last week reached almost $60 a barrel, its highest in more than two years.

Putin said he expected the world oil market soon to be bal-anced. Oil, which began to slide from more than $100 in mid-2014 due to excess supply, was trading just below $56.

Opec ministers attending the Moscow event said they were considering extending the deal or making a deeper cut. The accord has already been extended once at Opec’s last meeting in May, but producers have so far balked at a larger cut.

“It depends on a collective decision and consensus within Opec, but I think there is no objection against this pro-posal,” Iranian Oil Minister Bijan Zanganeh told Reuters when asked whether there were talks on deepening or extending the cut.

Asked to specify whether he meant no objection to deeper cuts, he replied: “Yes. I’m dis-cussing.” Venezuela’s oil minister, Eulogio del Pino, also said there were discussions on whether to cut further or extend the deal.

Any move would also require the support of Saudi Arabia.

Opec has been urging other producers to join the supply pact but has yet to secure pledges to do so. Del Pino said an extra 10 to 12 producing countries in South America and Africa had been invited to participate.

London

Reuters

Britain’s economy remains stuck in low gear but price pres-sures are rising again, according to

surveys yesterday that will probably keep the Bank of Eng-land on track to raise interest rates soon.

The IHS Markit/CIPS Pur-chasing Managers’ Index (PMI) also showed businesses were increasingly worried as Brit-ain’s departure from the European Union approaches with little clear sign of its future trading relationships.

The PMI showed growth in services activity unexpectedly sped up a little last month, com-pensating for weaker readings in manufacturing and construc-tion reported earlier in the week. Even so, growth among British companies lagged behind that of their peers in a resurgent euro zone.

Taking the three surveys together, Britain’s economy probably expanded at a quar-terly rate of around 0.3 percent in the third quarter, matching its second-quarter perform-ance, survey compiler IHS Markit said.

While economists said they expected the BoE would prob-ably follow through on its rate hike signals in November, many also urged caution.

“Given the weakening out-look for growth it may be wise for the (Monetary Policy Com-mittee) to wait until next year before beginning to raise rates, once the future path for UK business becomes clearer,” said Yael Selfin, chief economist at KPMG UK

Ratings agency Standard & Poor’s said it was sceptical about the need for a BoE rate hike. It suggested recent com-ments by the central bank about

raising rates were intended to push up sterling and cool infla-tion. Most economists polled by Reuters have said they expect rates to rise in November, even if they consider such a move premature.

The PMI picked up to 53.6 in September, slightly better than expectations in a Reuters poll of economists for it to hold at August’s level of 53.2.

But it also contained some discouraging signs: new orders increased at the weakest pace since August of last year, infla-tion pressures rose at the fastest pace for several months and confidence sagged.

Services companies cited Brexit-related uncertainty and worries about the economy as reasons for their darker mood.

Britain’s economy initially withstood the shock of the June 2016 vote to leave the European Union. But growth began to slow this year as inflation rose follow-ing the pound’s post-Brexit vote plunge, which hit the spending power of households.

Against that background, the BoE surprised investors last month when it said most of its policymakers believed they were likely to raise rates soon, citing a reduced tolerance for above-target inflation.

Honda Motor Chief Executive Officer Takahiro Hachigo at a news conference in Tokyo yesterday.

Honda plans to cut Japanese production by a quarter

UK economy in low gear; worries grow

Putin says oil cuts with Opec could last to end of 2018

Athens

Reuters

Part-time workers and the hard-core unem-ployed have almost

tripled during Greece’s debt crisis despite a recent drop in the jobless rate, the largest labour union GSEE said.

Hundreds of thousands of people have lost their jobs in Greece since it tumbled into crisis in 2010. With one in five now unemployed, others have lost almost a third of their incomes due to auster-ity measures and labour reforms agreed under three international bailouts.

Unemployment, at 21 per-cent in the second quarter, has decreased but it is still the euro zone’s highest. Unregis-tered work and part-time contract jobs have increased as businesses are desperate to cut costs.

“The situation in the labour market has improved in the first half of the year ... but a series of quality indices create concerns,” GSEE’s research institute said in a report. About 267,000 work-ers are currently in part time work, from 99,000 in 2008, a year before the crisis broke out, the institute said.

Frankfurt

AFP

The European Central Bank plans to toughen rules on how eurozone

banks deal with the moun-tain of bad loans still burdening the sector, officials said yesterday.

Supervisors at the ECB, which took over as top regu-lator in the single currency area in 2014, want lenders to set aside cash to cover loans in default two years after they are identified, at the latest.

Deadlines to make provi-sions for “non-performing” loans — where borrowers have not repaid anything for an extended period — could be extended to seven years for banks that have already writ-ten down part of the value of the loans in their accounts.

The eurozone’s bloated stock of non-performing loans stood at €865bn ($1.0 trillion) at the end of March. Banks managed to slash the figure from €950bn at the same point in 2016.

But tackling the bad loans remains an “important step in restoring the health of the banking system necessary for a strong and healthy euro area economy,” Central Bank of Ire-land deputy governor Sharon Donnery told journalists.

The announcement on Wednesday opens a public consultation about rules that should apply to loans identi-fied as in default from early 2018. “Part of our job is to prevent the further buildup of non-performing loans into the future,” Donnery added.

While the rules will be non-binding, lenders could still face a fine from the Frankfurt-based regulators if they are unable to offer good reasons for failing to meet them.

The ECB recently slapped its first penalties on an Irish and an Italian bank for breaching such pruden-tial rules.

Washington

AFP

Growth in the US services sector, a key driver of the American economy, hit

a 12-year high last month in the wake of back-to-back hurri-canes, a survey released yesterday showed. The monthly gains surpassed analyst expec-tations and marked 93 consecutive months of expan-sion, according to the Institute for Supply Management.

ISM’s non-manufacturing index rose a strong 4.5

percentage points from August’s level to reach 59.8 percent.

A reading above 50 percent indicates growth. Analysts had predicted that September’s result would be the same as those from August.

The September reading was the highest since August of 2005, when the index hit 61.3 percent. Hurricane Katrina wrought destruction in New Orleans at the end of that month. Analysts said that rising chain store sales and deliveries in advance of the hurricanes had helped explain some of September’s bounce.

ECB plans tougher rules to slash bad loan risk

Part-time work on the rise in crisis-hit Greece

US services sector growth hits 12-year record in September

Ratings agency Standard & Poor’s said it was sceptical about the need for a BoE rate hike. It suggested recent comments by the central bank about raising rates were intended to push up sterling and cool inflation.

25THURSDAY 5 OCTOBER 2017 BUSINESS

Mumbai

Reuters

The Reserve Bank of India held its policy rate steady near seven-year lows yes-terday after inflation

surged, but still looked to prop up the cooling economy by spur-ring banks into lending more.

The decision to keep the repo rate at 6.00 percent had been widely expected, with all but three of 60 analysts polled by Reuters predicting the RBI would stand pat after cutting the rate by 25 basis points (bps) in August.

But in a concession to the weakening economy, which is growing at its slowest pace in over three years, policymakers surprised markets by taking steps to release more liquidity into the financial system.

The RBI said it would lower the statutory liquidity ratio (SLR) — the amount of bonds that banks must set aside with the central bank — by 50 bps to 19.50 percent from mid-October. It had lowered the ratio by the same amount in June. The move will give banks more funds to lend, though previous efforts to revive the country’s weak private investment have largely failed.

The SLR cut and a statement seen as hawkish sent bonds sharply lower, but the rupee and stock markets rose.

In focusing on measures that

target banks to support the econ-omy, the RBI signalled its unwillingness to use stronger monetary policy tools after con-sumer inflation hit a five-month high of 3.36 percent in August, not far from the central bank’s 4 percent target.

The RBI said it would thus keep its policy stance at “neu-tral,” and raised its price projection for October-March to a range of 4.2 to 4.6 percent, above its inflation target and above its previous forecast for around 4.0 to 4.5 percent.

“The tone of the statement was more hawkish than markets expected,” said Ashish Vaidya, executive director and head of trading and asset liability man-

agement at DBS Bank.The meeting’s outcome had

removed “chances of any rate cuts going ahead as of now,” he added. Five members of the committee, including Governor Urjit Patel, voted to keep rates unchanged, while Ravindra H. Dholakia, a prominent dovish member of the panel, voted for a cut of “at least” 25 bps. The RBI also kept the reverse repo rate unchanged at 5.75 percent.

The benchmark 10-year bond yield rose to as much as 6.71 percent, the highest since May 19, from its previous close of 6.65 percent. But the rupee strengthened to as much as 64.9450 per dollar from its close of 65.49, while the NSE share index ended up 0.6 percent.

The RBI yesterrday reiterated its policy priority is to keep infla-tion at around 4 percent “on a durable basis”, the midpoint of

its mandated target of 2 to 6 per-cent. It cited a slew of concerns on inflation, including rising food costs, price revisions after the recent implementation of a national goods and services tax, and stubbornly high core prices.

The worries come after RBI officials took advantage of an extraordinary period of low inflation to cut rates by 200 bps from January 2015 to August 2017, when it became the first

Asian central bank to cut rates this year.

But as it seeks to now focus on inflation, the RBI is bound to face pressure from government offi-cials and executives to help prop up an economy that in months has gone from one of the fastest expansions in the world to grow-ing only 5.7 percent in April-June, well below the 8 percent needed for full employment.

The RBI acknowledged the weaker growth yesterday, cutting its end-March projection for gross value added — the indicator of economic growth it prefers — to 6.7 percent from its previous fore-cast of 7.3 percent. Some analysts, however, believe it could be much lower at around 6 percent.

Yet, whether its decision to lower the SLR will do much to spur economic growth is uncer-tain. The previous ratio cut in June had little discernable impact. The liquidity move is somewhat similar to one by Chi-na’s central bank last weekend to cut banks’ required reserve ratio (RRR) next year if they meet certain targets such as lending to more vulnerable sectors such as small businesses.

But the RBI has long strug-gled to get banks to pass on all of its policy cuts and coax them into lending more, given the sec-tor is dealing with around $140bn in soured loans and bankers have long sought to pro-tect profit margins.

London

Reuters

Private equity firms and hedge funds had funds under management of

$600bn globally last year to lend to companies, a survey said on Wednesday, as they step into the shoes of tradi-tional lenders.

The trend highlights a shift away from banks as a source of finance after the financial crisis, as bad loans given in the past continue to linger. It also shows how cen-tral bank money printing since the crash has helped to bolster private equity funds.

That has created an industry known as private credit, where alternative pro-viders lend at higher interest rates to companies, which may otherwise struggle to get money from a bank.

The survey by the Alter-native Credit Council, part of a trade group, found that this industry has grown 14-fold since 2000, had more than $600bn under management last year, putting it on track to reach around $1 trillion by 2020.

The survey also said Ger-many, the United Kingdom, the US, France and Canada had the biggest potential for this type of financing in the next three years.

“The pull back by banks has created a vacuum which non banks have filled,” said Chris Redmond, a debt expert at Willis Towers Watson, which advises pension funds.

Private equity firms, which traditionally invest in management buyouts of com-panies, are looking at this business partly because of an increase in the prices of the companies they seek to buy.

Hedge funds, which seek to make money betting on the fortunes of a company, cur-rency or an economy, have struggled to generate stable profits and are eager to diversify.

India’s central bank keeps repo rate unchanged

A man speaks on a phone near the Reserve Bank of India logo at the head office in Mumbai.

Customers leaving a branch of a Tesco supermarket in London. Britain’s biggest retailer said yesterday that it returned to profit in its first half as it kept a lid on food price inflation.

Tesco returns to profit

London

AFP

The Madrid stock market tumbled yesterday as investors, worried by a

deepening Catalan independ-ence crisis, offloaded their shares in a hurry. Madrid’s main index, the Ibex, was down nearly three percent at the close after falling below the key 10,000 level.

“The eyes of the world are on Catalonia and the spike in political tensions is likely to keep investors away,” said David Madden, an analyst at CMC Markets. The index has fallen to a level not seen since March, he added.

“Today’s focus has been relentlessly on the situation in Spain, where Catalonia is seem-ingly headed for a declaration of independence,” said Chris Beauchamp, chief market ana-lyst at IG, summing up a black Wednesday for the Madrid market. “As a result, the Ibex remains under heavy pressure, with the index now down 11 percent from its highs.”

Analysts said they detected a switch from Spanish equities into German stocks, a move that pushed the Frankfurt exchange higher and close to record peaks, bucking a Europe-wide lower trend. Paris shares were slightly softer at the closing bell.

Across Europe, investors were held back by “ongoing

jitters following the unofficial independence referendum in Catalonia,” NFS Macro analyst Nick Stamenkovic said.

Shares in key Spanish lend-ers were between four and more than five percent down by the end of trading. London ended flat as traders brushed off a survey showing activity in the British services sector, a key driver of the UK economy, rebounded last month.

Britain’s domestic electric-ity and gas suppliers took a major hit after British Prime Minister Theresa May unveiled plans to cap household energy prices. In reaction, British Gas parent company Centrica saw its share price tumble, topping the fallers board on London’s FTSE 100 index.

Shares in Scottish & South-ern Energy also fell, as did other European energy pro-viders with British operations, including EON and and nPower parent RWE, both listed in Frankfurt.

In Milan, Pirelli shares fell on their first day of trading after the tyremaker made a skiddy stock exchange comeback.

Wall Street, meanwhile, had recovered from early weakness by late morning in New York, potentially headed for a fresh record closing high. The dollar fell across the board as atten-tion began to focus on the likely make-up of the new US Fed-eral Reserve board.

Berlin

Reuters

Sales of new cars in Ger-many will grow more strongly than expected this

year, helped by automakers’ trade-in incentives for older die-sel models which boosted orders in September despite fewer sell-ing days, the VDA auto industry lobby said.

Volkswagen, Daimler, BMW and others agreed in August to offer buyers trading in an older diesel car thousands of euros off

the price of a cleaner model as part of a deal with the German government to tackle pollution from diesel cars and avert bans.

New car registrations in Europe’s largest auto market may increase 4 percent this year to around 3.5 million models, the VDA said, compared with pre-vious guidance that sales would be flat on 2016 results of around 3.35 million cars.

Domestic car orders rose 4 percent in September despite one less selling day compared with the same month a year ago,

though actual sales fell 3 per-cent to 288,100 vehicles, VDA said. “The German market is developing more dynamically than expected,” VDA president Matthias Wissmann said. “Cus-tomers are making use of these attractive offers,” he said about rebates.

Incentives announced in August range from €2,000 to €10,000 ($11,800) at the VW brand, €3,000 to €10,000 at its luxury division Audi, €2,000 to €8,000 at Ford and up to €2,000 at BMW.

London

Reuters

British trade union Unite said yesterday that it would launch legal action

on behalf of over 1,800 work-ers who lost their jobs when Monarch Airlines went in to administration earlier in the week.

The airline collapsed on Monday and made 90 percent of the staff on Monarch Airlines

and Travel Group redundant after falling victim to intense competition for flights and a weaker pound.

The union said it would lodge employment tribunal proceed-ings over the company’s failure to consult the workers on redun-dancies, and said the employers had not given the necessary notice or statutory pay.

“Unite is doing everything it can to assist former Monarch workers in securing new jobs,

offering free legal advice and launching legal action to secure the compensation they are owed, as well as helping mem-bers find jobs with other airlines,” Unite national officer Oliver Richardson said.

“The manner in which Mon-arch went into administration and the way the government allowed it (to) happen means there is a strong claim for com-pensation by former Monarch workers.” After entering

administration, Monarch flights were grounded immediately, in contrast to a similar case in Ger-many where a government loan kept Air Berlin flying when it too entered administration earlier this year, to give it time to nego-tiate with potential investors.

Britain’s Department for Transport said Monarch did not request a bailout before its collapse.“Monarch started dis-cussions with us but did not formally make a request before

the company went into admin-istration,” a spokesman for the department said.

Administrators KPMG are in the process of selling off the air-line’s assets, including its slots at airports, prepaid fuel, property, plant and equipment, a spokes-woman said.

The Civil Aviation Authority said it had repatriated 23,000 out of 110,000 Monarch custom-ers who were on holiday when the firm went bust.

Investors dump Spanish shares

British union to sue on behalf of 1,800 Monarch staff

Hedge funds boost loans to companies as banks shy away

Sales of new cars in Germany to grow

RBI policy move

The RBI said it would lower the statutory liquidity ratio (SLR) — the amount of bonds that banks must set aside with the central bank — by 50 bps to 19.50% from mid-October. It had lowered the ratio by the same amount in June.

The RBI also kept the reverse repo rate unchanged at 5.75 percent.

26 THURSDAY 5 OCTOBER 2017BUSINESS

QATAR STOCK EXCHANGE

QE Index 8,152.98 1.59 %

QE Total Return Index 13,672.06 1.59 %

QE Al Rayan Islamic Index 3,290.81 1.72 %

QE All Share Index 2,301.74 1.85 %

QE All Share Banks &

Financial Services 2,555.02 1.47 %

QE All Share Industrials 2,530.11 0.92 %

QE All Share Transportation 1,690.26 1.86 %

QE All Share Real Estate 1,624.56 4.22 %

QE All Share Insurance 3,229.79 2.48 %

QE All Share Telecoms 1,019.82 2.03 %

QE All Share Consumer

Goods & Services 4,945.48 1.13 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

04-10-2017Index 8,152.98

Change 131.70

% 1.59

YTD% 21.88

Volume 8,693,903

Value (QAR) 181,217,492.42

Trades 2,098

Up 06 | Down 34 | Unchanged 0003-10-2017Index 8,284.68

Change 17.11

% 0.21

YTD% 20.62

Volume 6,776,640

Value (QAR) 148,268,872.14

Trades 2,061

EXCHANGE RATE

GOLD QR150.3401 per grammeSILVER QR1.9787 per gramme

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

All Ordinaries 5719.645 -44.546 -0.77 5983.2 5635.1

Cac 40 Index/D 5347.3 -20.11 -0.38 5442.1 4733.82

Dj Indu Average 22641.67 84.07 0.37 22646.32 17883.56

Hang Seng Inde/D 28379.18 205.97 0.73 28248.12 21883.82

Iseq Overall/D 6917 4.42 0.06 7157.43 6369.05

Kse 100 Inx/D 40461 -654.78 -1.59 53127.24 40686.09

S&P 500 Index/D 0 0 0 2535.13 2245.13

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 4.8045 QR 4.8712

Euro QR 4.2506 QR 4.3108

CA$ QR 2.8977 QR 2.9549

Swiss Fr QR 3.7243 QR 3.7761

Yen QR 0.03211 QR 0.03273

Aus$ QR 2..8385 QR 2.8947

Ind Re QR 0.0555 QR 0.0566

Pak Re QR 0.0342 QR 0.0349

Peso QR 0.0708 QR 0.0722

SL Re QR 0.0235 QR 0.0240

Taka QR 0.0438 QR 0.0449

Nep Re QR 0.0347 QR 0.0354

SA Rand QR 0.2661 QR 0.2713

INTERNATIONAL MARKETS - A LIST OF SHARES FROM THE WORLD

A C C-A/D 1652.95 6.7 12130

Aban Offs-A/D 180.8 -1.65 183263

Ador Welding-B/D 601.6 82.85 230633

Aegis Logis-A/D 231.7 -0.65 61137

Alembic-B/D 39 0.6 97370

Alok Indus-B/D 3.09 0.1 1993037

Apollo Tyre-A/D 238.8 -4.85 334958

Asahi I Glass-/D 389.8 -3.55 29022

Ashok Leyland-/D 122.6 0.3 556243

Bajaj Hold-A/D 2907.2 16.45 4719

Ballarpur In-B/D 11.83 -0.48 589821

Bata India-A/D 729.65 34.35 110215

Beml Ltd-A/D 1669.7 71.35 80477

Bhansali Eng-B/D 98.8 16.2 2632061

Bharat Bijle-B/D 1108.3 -5.45 1133

Bharat Ele-A/D 164.1 0.55 171909

Bharatgears-B/D 145.15 -0.3 4427

Bhartiya Int-B/D 583 -9.75 15766

Bhel-A/D 83.3 0.15 458279

Bom.Burmah-A/D 1386.35 29.4 134605

Bombay Dyeing-/D 194.9 9.25 704618

Camph.& All-Xc/D 746 2 3130

Canfin Homes-A/D 2625.25 -10.75 5102

Caprihans-Xc/D 96.1 -1 1979

Castrol India-/D 356.9 -0.95 58302

Century Enka-B/D 309.35 0.15 4042

Century Text-A/D 1237.2 8.75 22552

Chambal Fert-B/D 144.1 3.3 127340

Chola Invest-A/D 1101 -4.3 3778

Chowgule St-Xt/D 13.75 -0.72 2262

Cimmco-B/D 86.6 1.55 8641

Cipla-A/D 582.3 1.9 70588

City Union Bk-/D 164.5 0.15 17655

Colgate-A/D 1078.2 19.45 6895

Container Cor-/D 1324.4 -0.15 9521

Dai-Xc/D 391.95 8.05 2410

Dcm Financia-B/D 3.18 -0.15 1464

Dcm Shram Ind-/D 308.5 -1.6 6087

Dhampur Sugar-/D 260.2 0.5 45556

Dr. Reddy-A/D 2383.65 46.5 132078

E I H-B/D 133.25 -0.9 3442

E.I.D Parry-A/D 345.7 1.8 32110

Electrosteel-B/D 24.1 0.3 36077

Emco-T/D 18.5 0.15 18550

Escorts-A/D 657.55 -0.95 98840

Eveready Indu-/D 299.5 4.6 1728

F D C-B/D 190.4 3.2 16212

Federal Bank-A/D 113.3 0.9 359269

Ferro Alloys-X/D 14.02 0.5 584380

Finolex-A/D 648 17.35 7687

Forbes-B/D 1840 31.95 1363

Gail-A/D 436.35 2.75 308415

Gammon India-Z/D 5.97 -0.31 94183

Garden P -B/D 33.6 0.4 8792

Godfrey Phil-A/D 1018.05 -10.75 9875

Goodricke-Xc/D 263.2 -3.1 4020

Goodyear I -B/D 803 4.25 13123

Hcl Infosys-A/D 47.1 -0.5 311262

Him.Fut.Comm-B/D 24.3 1.15 867470

Himat Seide-B/D 330 -4.3 18545

Hind Motors-B/D 7.79 0.14 21165

Hind Org Chem-/D 18.7 -0.2 35105

Hind Unilever-/D 1197.4 10.85 36614

Hind.Petrol-A/D 444.05 10.8 470617

Hindalco-A/D 241.5 -0.1 123538

Hous Dev Fin-A/D 1777 14.45 49271

I F C I-A/D 22.85 -0.15 283071

Idbi-A/D 52.2 0 251257

Ifb Ind.Ltd.-B/D 728 13.15 2201

India Cement-A/D 181.45 -0.95 907034

India Glycol-B/D 253.85 5.4 150309

Indian Card-B/D 172 0.1 1259

Indian Hotel-A/D 110.55 -3.49 607352

Indo-A/D 98.95 0.35 109529

Indusind-A/D 1696.9 6.25 33474

J.B.Chemical-B/D 273 -2.95 1896

Jagatjit Ind-X/D 57.9 2.75 8965

Jagson Phar-B/D 30.95 -0.1 1340

Jamnaauto-B/D 270.5 3.4 67172

Jbf Indu-B/D 162.5 2.4 12311

Jct Ltd-Xc/D 3.21 -0.06 447981

Jenson&Nich.-T/D 7.8 -0.07 10092

Jindal Drill-B/D 160.2 0.9 1874

Jktyre&Ind-A/D 147.7 -0.15 187610

Jmc Projects-B/D 386 17.2 1882

Kabra Extr-B/D 138 3.75 6590

Kajaria Cer-A/D 715.25 8.15 11172

Kakatiya Cem-B/D 357.1 5.7 6779

Kalpat Power-B/D 372.15 7.7 13619

Kalyani Stel-B/D 395.85 4.1 27994

Kanoria Chem-B/D 82.65 -0.8 22773

Kg Denim-Xc/D 62.7 1.9 11737

Kilburnengg-Xd/D 79.45 2.75 48726

Kinetic Eng-Xc/D 67.65 4.25 69509

Kopran-B/D 69.95 0.75 95764

Lakshmi Elec-X/D 640 6.1 1099

Lakshmi Mach-A/D 5682.3 67.7 1008

Laxmi Prcisn-B/D 37 -1 4015

Lgb Broth-B/D 688.2 -0.65 2049

Lloyd Metal-Xd/D 16.9 -0.4 29188

Lupin-A/D 1027.1 6.35 84681

Lyka Labs-B/D 51.4 1.65 41625

Mafatlal Ind-X/D 265 0 1464

Mah.Seamless-B/D 426.9 3.95 2688

Maha Scooter-B/D 2838 -29.85 1116

Mangalam Cem-B/D 357.1 21.95 16149

Mastek-B/D 290.7 5.35 79914

Max Financial-/D 592 -7.2 19318

Mrpl-A/D 125.55 -1.65 125573

Nagreeka Ex-B/D 35.75 5.95 100680

Nagreeka Ex-B/D 35.75 5.95 100680

Nahar Spg.-B/D 100.1 -2 5441

Nation Alum -A/D 78.75 -1 567618

Navneet Edu-B/D 163 1.65 1887

Neuland Lab-B/D 1066.95 98.65 29320

Nrb Bearings-B/D 118.55 -0.25 3984

O N G C-A/D 172 1.55 237651

Onward Tech-B/D 124.35 -2.7 42925

Orchid Pharm-T/D 18.9 0.9 121157

Orient Hotel-B/D 38.5 0.4 36822

Orient.Carb.-B/D 1304.3 44.7 7207

Orient.Carb.-B/D 1304.3 44.7 7207

Patspin India-/D 24.05 0.05 2007

Punjab Chem.-B/D 378 8.9 2108

Radico Khait-B/D 173.55 6.95 332661

Rallis India-A/D 210 0 834496

Rallis India-A/D 210 0 834496

Reliance Indus/D 483.35 -0.9 78825

Ruchi Soya-B/D 23.65 -0.7 124034

Saur.Cem-Xc/D 79.55 3.2 1064828

Tanfac Indu-Xd/D 76.25 1.9 11368

Tanfac Indu-Xd/D 76.25 1.9 11368

Thirumalai-B/D 1537.4 55.15 37851

Til Ltd.-B/D 471.8 13.2 6989

Tinplate-B/D 235 0 393908

Ucal Fuel-B/D 182.05 -1.5 7968

Ucal Fuel-B/D 182.05 -1.5 7968

Ultramarine-Xc/D 228.3 2.15 7609

Unitech P -A/D 6.6 -0.06 1890157

Univcable-B/D 146.55 1.35 52773

3I Group/D 933 1 232010

Assoc.Br.Foods/D 3288 22 270224

Barclays/D 192.3475 -1.3 10062432

Bp/D 484.215 -2.15 11333858

Brit Am Tobacc/D 4711.5 7.5 598628

Bt Group/D 280.05 0.7 6403176

Centrica/D 178.6798 -12.3 35774670

Gkn/D 354.1 4.9 1952490

Hsbc Holdings/D 748 0.6 6926364

Kingfisher/D 304.0946 2.4 4123838

Land Secs./D 989.5 4.5 784194

Legal & Genera/D 260.3 -1.4 3407648

Lloyds Bnk Grp/D 67.67 0.07 62663549

Marks & Sp./D 351.8001 -1.9 2849675

Next/D 5266.2625 -50 546571

Pearson/D 611.5 4.5 585157

Prudential/D 1788.5 0 2140960

Rank Group/D 219.892 -0.6 14312

Rentokil Initi/D 306.7 -0.5 746280

Rolls Royce Pl/D 918.665 -2.5 1405319

Rsa Insrance G/D 616.5 -2.5 620324

Sainsbury(J)/D 240.4 -7.1 6927468

Schroders/D 3383 -38 117857

Severn Trent/D 2175 -4 324007

Smith&Nephew/D 1379.5 6 3498789

Smiths Group/D 1592 8 538350

Standrd Chart /D 779.5 8.2 4367609

Tate & Lyle/D 657.58 3 399978

Tesco/D 184.422 -5.7 50943855

Unilever/D 4371.5 10.5 711803

United Util Gr/D 861.7374 3.5 1112764

Vodafone Group/D 211.163 0.55 25208329

Whitbread/D 3804 -28 200647

COMPANY CLOSE NET VOLUME NAME CHG TRADED

COMPANY CLOSE NET VOLUME NAME CHG TRADED

COMPANY CLOSE NET VOLUME NAME CHG TRADED

COMPANY CLOSE NET VOLUME NAME CHG TRADED

COMPANY CLOSE NET VOLUME NAME CHG TRADED

LONDON

Investors are on standby for Europe’s own version of the Trumpflation trade in case Wolfgang Schaeuble’s successor at the German finance ministry directs the

country’s massive surpluses towards tax cuts and spending.

Germany has run up budget surpluses in recent years under Schaeuble’s watch, but market participants believe a more expansionary policy may follow last month’s elec-tions, particularly if the pro-business FDP party are part of a new government as expected. Though the FDP — the Free Democratic Party — are, like Schaeuble, considered fiscal hawks, their manifesto included a proposal for €30bn ($35bn) of tax cuts.

There are political doubts about whether they will get their way, but recent record surpluses do mean that Ger-many has room for manoeuvre. German economic institutes forecast record surpluses in the next two years and say that the government should use the extra fiscal room to lower income tax and social welfare contributions.

Any such measures could trigger a “reflation” trade similar to the one many investors put on in the United States after Donald Trump was elected and expectations rose he would introduce inflation-boosting tax cuts and fiscal spending.

“I expect that in a new coalition, the Greens will be rewarded with higher public expenses and the (FDP) with a cut in taxes,” said Patrick Barbe, chief investment officer of core fixed income at BNP Paribas Asset Management, refer-ring to two of the three parties likely to be part of the new German government. BNP Paribas AM has €566bn of assets under management, and is one of the largest buyers of bonds in Europe. “And if you have tax cuts in Germany, it should be positive for reflation assets,” he said.

Apart from stocks, which are the obvious port of call in a reflationary environment, he pointed to inflation-linked bonds and real-estate assets as two areas he has earmarked for investment in case this comes to pass.

Last week’s German election saw Chancellor Angela Merkel win a fourth term, but support for her conservatives slumped to its lowest since 1949. There is no clear frontrun-ner to succeed Schaeuble. FDP leader Christian Lindner was seen as a potential replacement, but has signalled he would rather lead the party in parliament, possibly opening the door for his deputy, Wolfgang Kubicki.

Furthemore the FDP, however, is far from profligate. Even with the €30bn tax cut proposal — which would be subject to Jamaica talks agreements — the party remains committed to “Schwarze Null”, a federal budget in the black. Many investors, however, are expecting a loosening of budget strings. Markus Schomer, chief global economist at Pineb-ridge, which has over $85bn of assets under management, estimated there could be €30bn of tax cuts and €10bn-€20bn more spending under a Jamaica coalition.

“There’s potential in our multi-asset portfolio to add some more European assets as a result. We don’t have much exposure now,” he said. Pinebridge expects the Ger-man economy to grow 2.2 percent growth in 2018 and 2019 but this expenditure could add another 20 basis points to that, he added. On Schaeuble’s watch, Germany has been one of the few countries in Europe to consist-ently run a budget surplus - so much so that the European Commission criticised Europe’s largest economy for not loosening its purse strings. A 0.5 percentage point increase in the structural deficit will increase German domestic demand and the German inflation rate, he said.

German consumer prices rose less than expected in September and at 1.8 percent, inflation remained below the ECB’s target. One thing that is unlikely to change with Schaeuble’s departure, meanwhile, is German dislike for loose monetary policy. There would be no let up under the FDP on pressure for the European Central Bank to roll back its stimulus.

BMW and Mercedes are betting they can mass produce new electric cars based on conventional vehi-cles, defying sceptics who say they will need more radical designs to

head off the threat from Tesla and other start-up carmakers.

There are two ways to make battery-driven vehicles: use a clean-sheet design like Tesla, or a traditional vehicle platform that can use all types of motor: combustion, electric or a hybrid of the two.

Electric motors are smaller than petrol or diesel engines, so electric vehicles designed from scratch can benefit from bet-ter interior packaging which allows a bigger passenger space. The problem: their unique design requires a dedicated production line and expensive new factories.

BMW learned this the hard way after pouring billions into bespoke carbon-fibre based electric cars, the i3 and i8, which failed to sell in large numbers. “It is easy to build an electric car. It is difficult to earn money with it,” said BMW research and develop-ment chief Klaus Froehlich.

Since BMW started selling the i3 in 2013, vehicle battery performance has improved by 40 percent, allowing carmakers to make electric cars with the same heavy under-pinnings used by petrol cars and still get a range of 500 km from one charge. This, they believe, gives them an advantage over mak-ers of custom built electric vehicles.

As Tesla enters the mainstream with its cheaper Model 3, BMW has made a strategy u-turn to produce electric cars in large num-bers, pledging to offer battery-powered variants of regular models.

Froehlich said vehicle designs dedicated to only one powertrain were no longer required. BMW is preparing to launch an

all-electric version of its popular X3 offroader by 2020, and Mercedes-Benz will launch the electric EQ in 2019, based on its best-selling SUV, the GLC.

A new electric BMW, the i Vision Con-cept, will use the same underpinnings as future versions of the BMW 3-Series. Elec-tric and petrol versions will be built on the same production lines, allowing a flexible response to demand for electric vehicles.

To prolong the life of its i3, BMW has given it a fresh design and a new battery. But the company’s strategic bet is on over-hauling volume production lines to rapidly scale up production if needed.

Demand for electric cars remains weak due to their high purchase price and limited charging infrastructure. But this may change if battery prices keep falling.

“Battery costs are coming down. We believe that we can bring economies of scale to bear beyond just the battery and drive-train. I think we will be in a good competitive position from that perspective,” Daimler Chief Executive Dieter Zetsche, whose com-pany owns Mercedes-Benz, told Reuters.

Mercedes is also working on a platform just for electric and autonomous cars, to be introduced after its initial wave of electric vehicles hit the road.

Germany’s three big premium carmak-ers - Mercedes, BMW and VW Group’s Audi - have most to lose if Tesla’s volume assault on the premium car market succeeds.

Loss-making Tesla, which made 83,922 cars last year, is already far ahead of the German luxury brands in electric car sales. BMW sold 25,528 electric i3’s last year and Mercedes won’t disclose sales figures for its electric B-Class. Overall, Mercedes and BMW sold more than 2 million cars apiece last year. The Germans long resisted mass elec-trification, saying no competitor could make electric cars at a profit because the batter-ies were too expensive. Battery prices have slumped but a 500-km battery still costs $14,000, while a combustion engine is less

than $5,000, analysts at Bernstein Research calculate.

Carsten Breitfeld, chief executive of start-up Chinese carmaker Byton, says vehi-cles must be rethought to unlock their potential, both as new electric cars and as platforms for a new consumer experience.

Breitfeld sees the German carmakers’ answer to the expected surge in electric car demand - putting an electric motor in a con-ventional car - as a mistake. He believes it leaves the industry vulnerable to a ‘Nokia moment’: when a new player uses a trans-formational design to seize control of an established market, as Apple’s iPhone stole a march on Finnish mobile phone giant Nokia a decade ago.

BMW and Apple explored a partnership on cars in 2014, but ultimately went their separate ways. Car industry veterans cau-tion that toppling incumbents may be harder than many consumer tech executives assume. Harry Kroeger, a former director at Tesla and now president of automotive electronics at parts supplier Bosch, said plenty of tech companies had failed in the car business. Tesla may pose a threat to the Germans, but only if it can raise production to 500,000 cars by next year. And in the end, Silicon Valley may succeed in the car

business by copying the Ger-mans, rather than behaving like a start-up, Kroeger said.

Telecom equipment maker Ericsson is in talks to merge its Spanish fiber services

arm Abentel with a local firm and people familiar with the new CEO’s plans say he is scouting for more merger deals to cut costs and rebuild the group’s profits.

Borje Ekholm, who took up his CEO role in January, is under pres-sure by activist investor Cevian to accelerate cost-cutting after Eric-sson’s three consecutive quarters

in the red that have pushed its share price down 15 percent since January. The Swedish company is concentrating on reducing its exposure to maintenance and roll-out services which require relatively highly paid staff.

Abentel, which provides fiber-related services, was bought by Ericsson just 15 months ago and Spanish tech engineering services provider Dominion said on Wednesday it was in preliminary merger talks. Network roll-out and maintenance services are labour-intensive, low-margin business that have traditionally been out-sourced by telecom operators to companies like Ericsson, Nokia and Huawei. Ericsson is reviewing whether to sell or try to improve profits at these businesses, catch-ing up with Nokia which made a similar move a few years ago.

“Ericsson needs to raise its margins and the idea is to merge Abentel and other network main-tenance units with regional

players to deconsolidate the work-force and costs stemming from these businesses,” said a source familiar with the plans.

Ericsson has yet to convince analysts it can hit its target to dou-ble 2016 margins beyond 2018.

Ericsson said during its sec-ond quarter earnings that it had identified 42 services contracts, without naming them, with 2016 sales of SEK 7bn ($861m) which it will either exit, renegotiate or transform. To date, the company said it has already recast nine of these contracts resulting in an annualized profit improvement of about SEK 140m ($17m) going for-ward. Managed Services contributed about 13 percent of Ericsson’s total revenue in 2016.

Ekholm has quietly ended the company’s diversification push to serve non-telecom clients as he intends to refocus the business on core mobile network infrastructure. The company, backed by promi-nent Wallenberg family-backed

Investor AB and Industrivarden, faces mounting competition from China’s Huawei and Finland’s Nokia as well as weak emerging markets and falling spending by telecoms operators with demand for next-generation 5G technology still years away.

While the move to exit loss-making contracts is widely seen as positive by investors who have long been waiting to see material cost-cutting, some analysts such as Credit Suisse and independent firm Arete Research have expressed concerns that slashing large business areas could dent revenue and destabilise the business.

Credit Suisse downgraded the gear maker to underperform on the basis that management’s mid-term margins target were too optimistic and that the risks of divesting loss-making assets are “not fully appreciated”. The bro-ker also cut the company’s 2018 revenue estimate by 4 percent.

Ericsson bought Abentel for

about €20m-€30m as part of a push to grow in fiber fixed line serv-ices and yield increasing bandwidth requirements driven by video serv-ices. It is now hoping to make significant savings by gradually offloading its high-pay workforce.

Ericsson also lost a managed services contract in Italy with Wind and 3 Italia at the end of last year and is currently reviewing strategic options for its operations there, according to another source close to Ericsson. The company has announced 400 job losses in Italy but the number could increase in the absense of a stra-tegic tie-up, said the source.

Ericsson employs about 3,200 people in Spain and is expected to cut about 30 percent of its staff in its Networks division and areas other than Managed Services. But if it fails to merge Abentel, its 550 employees could be at risk, poten-tially pushing higher the total number of layoffs, said local sources familiar with the plan.

From Trumpflation to Deutsche-boom? Schaeuble exit raises market hopesAbhinav RamnarayanReuters

German carmakers relying on volume to confront Tesla

Tesla Model 3 cars wait for their new owners as they come off the Fremont factory’s production line during an event at the company’s facilities in Fremont, California.

Edward Taylor Reuters

Andrés González &Sophie Sassard Reuters

Demand for electric cars remains weak due to their high purchase price and limited charging infrastructure. But this may change if battery prices keep falling.

Ericsson is reviewing whether to sell or try to improve profits at these businesses, catching up with Nokia which made a similar move a few years ago.

Ericsson scouts for mergers for lower margin businesses

BUSINESS VIEWS 27THURSDAY 5 OCTOBER 2017

28 THURSDAY 5 OCTOBER 2017BUSINESS

BACK TO BUSINESS

Centrica sinks to 14-year low as May plans energy cap law

sight

Bloomberg

Centrica Plc slumped to its lowest level since 2003 as the UK gov-

ernment plans to publish a draft law as early as next week to cap household energy prices.

Shares in the UK’s big-gest power and gas supplier to homes fell as much as 7.4 percent and SSE Plc dropped as much as 5 percent. Theresa May yesterday fol-lowed through on an election promise to cap charges in what she called UK’s “bro-ken” energy market as she addressed delegates at the Conservative Party’s annual conference in Manchester, England.

The government will “bring an end to rip-off energy prices,” May said. “We will always take on monopolies and vested inter-ests when they are holding people back.”

The government and the nation’s biggest utilities have come under increasing pres-sure from the Labour Party, other lawmakers and con-sumer groups to revamp how the retail market works and to curb prices for the most vulnerable consumers. Cen-trica is the utility that would see the biggest earnings impact from any new price regulation, Goldman Sachs Group Inc. said before the general election in June.

Details of the plan circu-lated by May’s office after her speech suggested the meas-ure is softer than her words suggested. The law will give Ofgem the powers to set the cap, and the measure can

only be temporary, accord-ing to the briefing. That means the power will be in the hands of the independ-ent regulator, rather than ministers who might deploy it for political purposes. The planned law will cover all standard variable tariffs.

The UK market, domi-nated by six suppliers, is broken because it punishes loyal customers with higher prices and the most loyal customers are often those with lower incomes, the eld-erly, people with lower qualifications and people who rent their homes, she said in her speech.

SSE will “look carefully” at the proposals, co. says in an emailed statement. The utility “believes in competi-tion not caps.”

Centrica has slumped 22 percent this year. The Wind-sor, England-based company traded at 181.4 pence, down 5 percent, as of 2:20pm in London. That’s the most since May 11 and the lowest since October 2003.

May and her government had mooted price caps in the run up to the election in a bid to show low-income voters that she’s on their side.

The action followed through on the manifesto pledge—copied from a sim-ilar policy first proposed by Labour—to rein in the so-called Big Six utilities.

Last year, the Competi-tion and Markets Authority said consumers were over-paying on their bills by £1.4bn ($1.9bn) a year by remaining on default fares instead of changing suppliers.

Capital Comment

Everyone is interested in a stable market. What we did withOpec, I believe, is beneficial for all the global economy.

Vladimir Putin,Russian President.

Spending Chart

The world’s largest floating solar power plant in a lake in Huainan, in China’s central Anhui province.

IEA lifts 5-year renewables forecastLondon

Reuters

The International Energy Agency (IEA) has raised its forecasts for renewable energy over the next five

years following a record 2016, mainly driven by a surge in solar photovoltaic (PV) capacity in China, India and the United States.

In its medium-term renew-ables market report, the IEA expects global renewable elec-tricity capacity to rise by more than 920 gigawatts, or 43 per-cent, by 2022, due to supportive policies for low-carbon energy and cost reductions for solar PV and wind. The projected growth is 12 percent more bullish than the IEA’s forecast last year.

In 2016, net additions to renewable energy capacity - including hydropower, solar, wind, bioenergy, wave and tidal - set another world record, growing by 165 gigawatts (GW), 6 percent more than in 2015, the

report said. Solar PV capacity grew by 50 percent to reach more than 74 GW last year and it was the first time solar PV additions rose faster than any other fuel, surpassing the net growth in coal. “We see renew-ables growing by about 1,000

GW by 2022, which equals about half of the current global capac-ity in coal power, which took 80 years to build,” Fatih Birol, the IEA’s executive director, said in a statement.

“What we are witnessing is the birth of a new era in solar PV. We expect that solar PV capacity growth will be higher than any other renewable tech-nology through 2022,” Birol added.

The Paris-based IEA, the West’s leading energy forecaster, had been criticized by environ-ment campaigners in previous years for underestimating the growth of renewables and over-emphasizing the continued role of fossil fuels.

The agency sees renewable power generation rising by more than a third to 8,169 terawatt-hours (TWh) in 2022 - from around 6,012 TWh in 2016 - which is equivalent to the combined electricity consump-tion of China, India and Germany. Renewables will account for 29 percent of the

global energy mix in five years’ time, compared to the 24 per-cent forecast last year.

“While coal remains the largest source of electricity gen-eration in 2022, renewables close in on its lead. In 2016, renewable generation was 34 percent less than coal but by 2022 this gap will be halved to just 17 percent,” the report said.

China will be responsible for the largest amount of global renewable capacity growth, driven by strong government targets, economic incentives and air pollution concerns.

Despite policy uncertainty, the United States will remain the second-largest renewables growth market, mainly due to tax incentives and state-level policies for solar PV, the IEA said.

India’s renewable electric-ity growth could surpass the European Union’s by 2022 for it to become the joint second-larg-est growth market alongside the United States as it is seen more than doubling its current capacity.

Energy capacity

In 2016, net additions to renewable energy capacity - including hydropower, solar, wind, bioenergy, wave and tidal - set another world record, growing by 165 gigawatts (GW), 6% more than in 2015.

Solar PV capacity grew by 50% to reach more than 74 GW last year and it was the first time solar PV additions rose faster than any other fuel.

Women in developed countries more educated than men, but earn lessLondon

Reuters

Women in developed countries are now more educated than

men, yet they still earn less, are poorly represented in politics, and less likely to join the top ranks in business or become an entrepreneur, a global think-tank said yesterday.

From Canada, Japan, Nor-way to Australia, young women on average earn almost 15 per-cent less than men, even though they are more educated, said the Paris-based Organisation for Economic Co-operation and Development (OECD). “Every country faces its own obstacles to reaching gender equality, and to make a real difference we must change public policies in tandem with stereotypes, attitudes and behaviours,” Angel Gurría (pictured), Secre-tary-General of the OECD said in a statement.

If the gender pay gap reduced by a quarter by 2025, could add an extra percentage point to projected economic growth across OECD countries between 2013 and 2025, it said.

The think-tank added that if there was an equal number of female and male entrepre-neurs, global GDP could rise by 2 percent, equivalent to about $1.5 trillion. “In the face of slug-gish growth, ageing societies and increasing educational attainment of young women, the economic case for gender equality is clear,” said Gurría.