Thursday, May 19, 2016Sha’baan 12, 1437 AH

BUSINESSGULF TIMES

UK jobs market cools as growth pace slows

Suzuki says it used wrong mileage tests

BREXIT CONCERN | Page 14JAPAN MODELS | Page 11

Qatar Airways raises stake in BA-owner IAG to 15.01%In April, Qatar Airways said it owned just under 12% of IAG; Qatar Airways wants to increase ties to London: CEO; Carrier plans to add destinations with new plane deliveries: CEO

ReutersLondon/Atlanta

Qatar Airways has raised its stake in British Airways-owner Interna-tional Consolidated Airlines Group

(IAG) to 15.01% and may consider acquiring more of the company over time, the airline has said.

The move comes as the Doha-based air-line undergoes a rapid expansion globally,

adding new fl ights to Los Angeles, Sydney and other destinations, and partnering with other airlines to complement that growth.

Qatar Airways said less than a month ago that it had raised its stake in IAG to just un-der 12% from 9.99%.

Speaking at a press conference in At-lanta, Qatar Airways’ chief executive Akbar al-Baker said he wanted to deepen links to London, where British Airways has its main hub. The investment has helped Qatar Air-ways deliver on its westbound strategy, the airline said in a separate statement.

“This is the hottest news coming out of the bakery,” al-Baker said. “We may con-sider expanding further within the limits of the non-European Union countries.”

Under current rules, foreign investors

cannot own more than 49% of a European airline.

“Qatar (Airways) can tap into IAG’s ex-tensive American network at Heathrow and Madrid, whilst with limited exposure to the Australasian market IAG can benefi t from Qatar’s increased activity there,” in-dependent aviation consultant John Strick-land said.

British Airways announced plans last week for a new direct route between Lon-don and Doha.

Al-Baker was speaking ahead of the June 1 start of Qatar Airways’ new service to Atlanta.

US airlines have charged that the Atlanta fl ights will lose money because Qatar Air-ways lacks a partner airline there that can feed it passengers and fi ll its large aircraft.

Atlanta-based Delta and Chicago-based United have cancelled fl ights to the Middle East and warned that trans-Atlantic fares will fall because Qatar Airways and other rivals have added fl ights in excess of cus-tomer demand.

Al-Baker said Qatar Airways would fi ll the fl ights because “we have a very superior product and people are craving it.”

“This is not the end of it,” he added. “We have another fi ve locations to announce soon. We cannot announce them yet be-cause of delays with the Airbus.”

The airline has delayed the launch of the world’s longest scheduled direct fl ight - from Doha to Auckland, New Zealand - by two months because of the late delivery of Airbus Group SE’s A350 aircraft.

Qatargas delivers its debut LNG cargo to new Japan joint venture

Qatargas has delivered its fi rst spot liq-uefi ed natural gas (LNG) cargo to Ja-pan’s newly established JERA, a joint

venture between Chubu Electric Power Com-pany and TEPCO Fuel and Power.

The delivery of cargo, on board Q-Flex LNG vessel ‘Al Ruwais’ to the Futtsu LNG Terminal in Tokyo Bay on May 13, comes under the new-ly executed master sales and purchase agree-ment between the two companies.

Chubu Electric Power Company and TEP-CO Fuel and Power are Qatargas’ foundation buyers, with the fi rst LNG cargo having arrived in Japan in 1997.

With JERA’s inception, Qatargas will deliver a total of nearly 7mn tonnes per annum of LNG under long-term supply contract to this new entity.

Japan continues to be the world’s largest importer of LNG. In 2015, Qatargas delivered a total of 14.6mn tonnes of LNG to the Asian country.

The latest LNG delivery represents Qatar-gas’ strong commitment to its Japanese part-ners and reinforces Qatargas’ position as the world’s premier LNG company with a com-mitment to providing safe and reliable sup-plies of LNG to every part of the globe.

Qatargas is the largest producer of LNG in the world with an annual production capac-ity of 42mn tonnes per annum from its world-class facilities in Ras Laff an Industrial City and since fi rst production in 1996; it has success-fully delivered cargos to 28 countries.

GLOBAL PARTNERS: Page 16

QFB developing new open architecture platform for private banking clients

‘Brent crude to average $57 a barrel in 2017’By Pratap JohnChief Business Reporter

Brent crude oil price may average $57 a barrel next year, a 24% jump on 2016 because of a “strong demand-side pull”, particularly in China, India and the US, a senior energy analyst has said.According to BMI Research head (oil and gas) Christopher Haines, the “strong demand-side pull”, particularly in China, India and the US “should help balance the market” as production drops in the US, Latin America and higher cost production regions.BMI, a Fitch Group Company, has forecast Brent crude to average $46 a barrel in 2016. “With the current outages from Nigeria and Canada, it is already evident that the market is relatively tight, and the US driving season will be upon us in a few weeks, which should improve demand over the summer,” Haines said in an interview with Gulf Times.This, Haines points out, will be “oil price supportive” over the second (Q2) and third (Q3) quarters of 2016, though he expects “prices to soften again” in the fourth quarter (Q4, 2016) and the first quarter of next year (Q1, 2017) “before strengthening”.In its economic analysis provided exclusively to Gulf Times, BMI Research said Qatar’s “fiscal deficit is temporary” and that the country’s FIFA World Cup investments are “not at risk”.It expects the Qatari government to continue with its pending commitments on infrastructure projects for the 2022 FIFA World Cup, despite recording its first deficit in more than a decade.Passed in December 2015, the Qatari budget for 2016 forecasts the first public deficit since 1999, on the back of low global hydrocarbon prices and only minor cutbacks in spending.HE the Minister of Finance Ali Sherif al-Emadi announced last December that the Qatari budget would sustain spending in key sectors such as health, education, infrastructure and transport, with special focus on railways and other projects tied to the 2022 World Cup. “We believe that this strategy is sustainable for Doha, and that it will not significantly impact the country’s sovereign outlook,” BMI said.That said, BMI noted that the foreign reserves of the Qatar Central Bank (QCB) fell by 12% year-on-year on average between September 2015 and February 2016. In the meantime, the current account balance remained in positive territories, signalling that Doha is using its reserves for fiscal purposes. The country’s foreign exchange (FX) reserves will nevertheless remain elevated, and BMI forecasts them to cover more than a year of imports by the end of 2016.

Qatar sports sector needs QR72bn investment in next seven years: MECQatar’s sports sector will require investments to the tune of about QR72bn in the next seven years, according to the Ministry of Economy and Commerce (MEC).The ministry has also prepared action plans for 30 investment opportunities, with a market requirement worth QR22bn to QR30bn, and aims to presents these to participants at the Sport Business Opportunities Forum to be held on May 22.The event is being held in partnership with the Ministry of Culture and Sports, the Supreme Committee for Delivery and Legacy, Qatar Olympic Committee and Aspire Zone Foundation, with which the MEC has conducted an in-depth study on available investment opportunities in the sports sector.The commerce ministry has identified 83 commercial, investment opportunities directly from the government sector to the private sector. The opportunities have been classified into seven sectors such as management and promotion of sporting events; sports development; establishment and construction of sports facilities; merchandise and sports equipment; sports marketing; sports tourism; and operation and maintenance of sports facilities.“With the emergence of the role of the sports sector as a key driver of development in Qatar, the MEC is keen to capture and make the best use of available investment opportunities in the sports sector,” a spokesman said.The forum comes in conjunction with recent developments witnessed by the sports sector in Qatar. There are plans to host various international sporting events over the next seven years, including the 2018 Gymnastics World Championships, the 2019 World Athletics Championships and the 2022 FIFA World Cup, in addition to more than 30 local, regional and international sporting events, hosted in Qatar each year. With JERA’s inception, Qatargas will deliver a total of nearly 7mn tonnes per annum of LNG under long-term

supply contract to this new entity in Japan

Qatar Airways’ move of raising its stake in British Airways-owner International Consolidated Airlines Group (IAG) comes as the Doha-based airline undergoes a rapid expansion globally, adding new flights to Los Angeles, Sydney and other destinations, and partnering with other airlines to complement that growth.

BUSINESS

Gulf Times Thursday, May 19, 20162

Saudi oil stockpiles hit 18-month low in March as production cappedBloombergKuwait

Saudi Arabia’s crude oil stockpiles fell in March for the fi fth month in a row reaching the lowest level in 18 months as the kingdom kept shipping crude to meet customer demand while keeping a lid on production.

Stockpiles dropped to 296.7mn barrels in March from 305.6mn bar-rels in February, according to data

published on the website of the Riyadh-based Joint Organisations Data Initiative. Stockpiles peaked at 329.4mn barrels in October and have been in decline since then, the data showed.

Saudi Arabia, Russia, Venezuela, and Qatar had an initial agreement in Feb-ruary to freeze production at January levels to curb a global glut and shore up prices. Negotiations between Opec members and other producers on April 17 in Doha ended without a deal to limit

output after Saudi Arabia wouldn’t agree to any accord unless all mem-bers of the Organization of Petroleum Exporting Countries joined, including Iran.

“The Saudis were pushing for a freeze deal since February so they needed to rely on stocks to meet any rise in customers demands at home and abroad while keeping their output fl at,” Mohamed Ramady, an independ-ent analyst and former economics professor at King Fahd University of

Petroleum and Minerals, said by phone from London. “The Saudis also want-ed to give some rest to fi elds after 12 months of production above 10mn barrels a day.”

The world’s biggest crude exporter kept its oil production almost fl at since January at about 10.2mn barrels a day. It exported more in the fi rst quarter this year compared to the same quarter last year, the data showed. Daily exports in March were at 7.54mn barrels, little changed from February. They reached

7.84mn bpd in January, the high-est since March 2015 when it shipped 7.89mn bpd.

Saudi Arabia’s own refi neries pro-duced 2.85mn bpd of diff erent products in March, an all-time high and up from 2.84mn bpd in February, according to the initiative known as JODI. Gaso-line production rose to 569,000 bpd in March, the highest since December 2013 when Saudi refi neries produced at a record of 613,000 bpd, according to JODI.

The Qatari-Tunisian Business Council discussed ways of enhancing mutual economic cooperation at its meeting at the Qatar Chamber (QC) headquarters yesterday, in particular at the fields of agriculture, building materials, tourism, medicine, and metal industry. The head of the Qatari side Abdulrahman bin Abdulla al-Ansari said the two parties have signed 15 agreements and protocols of cooperation covering all economic, culture, education and technological fields. He said both parties should give more focus on investment at the tourist sector due to its vital importance in diversifying the sources of income. Meanwhile, Mohamed al-Kaali, head of the Tunisian side, highly appreciated the eff orts of the QC in facilitating such a meeting between Tunisian businesspersons and their Qatari counterparts, stressing that both parties have a great prospective for more eff ective cooperation for the private sector. He said Qatari businessmen can explore excellent opportunities in the agriculture sector and the medicine industry in Tunisia, which can also open more promising markets for them in Africa. Eventually, the council recommended the creation of a sub-committee to follow up the works and achievements of the council. Further, the Tunisian delegation invited Qatari businessmen to visit their countries to explore the available investment opportunities.

Qatar, Tunisian businesses seek to boost ties

Iran at ‘pivotal moment’ to rejoin global economy: IMF

AFPWashington

The International Monetary

Fund’s number two off icial

have told Iran that it faces a

crucial opportunity to rebuild its

economy and rejoin the global

economy.

However, with sanctions over

its nuclear programme lifted

but tough US restrictions still in

place on banking, IMF deputy

managing director David Lipton

said Tehran needs to take key

steps, including taking action

to stop money laundering and

terror financing.

In a speech delivered on Tues-

day at the Central Bank of Iran,

Lipton praised reforms taken in

recent years that had slashed

inflation and put the country

on a growth path even before

the January lifting of tough

nuclear sanctions, which had

sharply curtailed the country’s

oil exports. “I speak here today

at a pivotal moment for Iran’s

economy,” said Lipton, accord-

ing to the text of his speech.

“With important sanctions lifted,

your country has a new oppor-

tunity to deepen its integration

into the global economy.

That process has the potential

over time to support faster

growth and rising living stand-

ards for Iranians.”

Lipton said Iran faces a number

of broad challenges, including

the slower global economy

and investor wariness of risks

in emerging countries; low oil

prices; a weak banking system;

and the need for budget reform.

He pointed to how China and

countries in Latin America and

Eastern Europe joined the glo-

bal economy after long isolation

to much success by undertak-

ing significant reforms.

But he also acknowledged that

Iran faces a unique hurdle: that

continued US sanctions due to

alleged past support for terror-

ism and human rights violations

still keep the country locked

out of a large part of the global

financial system.

‘Saudi’s Binladin secures loan to ease fi nance crunch’ReutersRiyadh/Dubai

Construction fi rm Saudi Binladin Group has secured a 2.5bn riyal ($667mn) loan from local banks

to ease its fi nancial pressures, banking sources aware of the matter said yes-terday. Arab National Bank and Saudi British Bank are providing the loan, which Binladin is using to cover redun-dancy costs for workers it is laying off , back salaries and severance costs, the sources said.

The loan is one of several recent signs of relief for Binladin, one of the Middle East’s largest construction groups, which has faced severe fi nan-cial problems since last year.

Binladin has declined to describe its fi nancial situation publicly, but Gulf commercial bankers have said they believe it owes local and international banks a total of about $30bn, and some think it may have to restructure some of that debt.

In September, the Saudi government barred Binladin from bidding for new state contracts after one of its cranes

fell in Makkah’s Grand Mosque during a storm, killing 107 people.

This ban was not lifted until about three weeks ago.

A Binladin spokesman said in an emailed response to Reuters that the company doesn’t comment on its fi -nancial issues or relationships with business partners.

“We remain focused and committed to carry out our promise and deliver the contracted projects to the highest standards and satisfaction of our cli-ents, as we have always been doing.”

Two of the sources, declining to be

named because of commercial sensi-tivities, said Binladin had pledged land as collateral for the loan.

They did not elaborate on the size or location of the land, or how long the loan was for.

Bankers with knowledge of the loan said the inclusion of the collateral pledge was linked to persistent con-cerns about the Saudi construction sector.

“Nobody in their right mind would lend unsecured at the moment to a contractor,” said one.

Binladin has been hit by a general

slump in construction as the govern-ment has cut spending in response to low oil prices.

Many builders in Saudi Arabia have reported shrunken ministry budgets and delays in payments by the state for projects.

Since last year Binladin, which be-fore the crisis had a workforce fl uctu-ating around 200,000 to 250,000, has cut about 69,000 jobs, including res-ignations and departures that will oc-cur by early June.

Some of its workers have not been paid for months, and have staged

public protests. When the govern-ment lifted the ban on bidding for state projects, it also removed a travel ban imposed on top Binladin executives af-ter the disaster.

Days later, Binladin made delayed salary payments to some 10,000 work-ers.

The Binladin spokesman confi rmed earlier this week that there were un-resolved “disagreements” with the government over payments at the King Abdullah Financial District project, where work by the company has been halted since early 2016.

Abraaj leads investors eyeing up to 35% stake in Barclays AfricaBloombergJohannesburg

Barclays plans to continue selling further stakes in its South African business on

the market after cutting its hold-ing to about 50%, three people with knowledge of the matter said.

The British bank is leaning towards conducting more sales to money managers - fast, con-trolled off erings with little-to-no marketing - after the May 5 transaction drew demand ex-ceeding what was on sale, the people said, asking not to be identifi ed as the plans are pri-vate. Selling to a single buyer may face signifi cant regulatory hurdles, the people said.

Dubai-based Abraaj Group is leading a group of investors that plan to bid for a stake of as much as 35% in Barclays Africa, people familiar with the matter said ear-lier this month. That came after Ex-Barclays CEO Bob Diamond confi rmed months of specula-tion in April when he said he and investors including US private equity giant Carlyle Group are

working together on a potential bid.

The bank is open to selling a signifi cant minority stake, ac-cording to one of the people.

“As a regulator, we won’t be comfortable with a private-eq-uity play for any of the banks,” Deputy Reserve Bank Gover-nor Kuben Naidoo said earlier this month. The central bank would “look quite negative-ly” on a buyout because these typically involve leverage and exit strategies, and banks need long-term commitments from shareholders with deep pock-ets, he said.

Barclays in London and Bar-clays Africa in Johannesburg de-clined to comment.

Barclays sold about one-fi fth of its stake in Barclays Africa Group Ltd in the market earlier this month as part of chief ex-ecutive offi cer Jes Staley’s plan to retreat from the continent and raise cash to reduce its capital burden, leaving it with 50.1%. The bank is restricted from sell-ing more shares in the African business by a 90-day lock-up period. The bank has said it may sell shares until it holds 20% or less.

A picture taken on June 23, 2008 shows a flame from a Saudi Aramco oil facility known as “Pump 3” in the desert near the oil-rich area of Khouris, 160km east of the Saudi capital Riyadh. Oil stockpiles dropped to 296.7mn barrels in March from 305.6mn barrels in February, according to data published on the website of the Riyadh-based Joint Organisations Data Initiative.

BUSINESS3Gulf Times

Thursday, May 19, 2016

Dollar rally revives as currencytraders warm to Fed repricingBloombergSydney

A gauge of the dollar touched a seven-

week high, signalling currency traders

are warming to hawkish commentary

from Federal Reserve off icials that has

boosted the odds of monetary tighten-

ing by September.

The Bloomberg Dollar Spot Index

resumed climbing after being little

changed the past two days before

Wednesday’s release of minutes from

the Federal Open Market Committee’s

more recent meeting.

The dollar rose against all but one

of its Group-of-10 peers after two re-

gional Fed presidents said Tuesday at

least two rate increases may be war-

ranted this year. While the probability

of an increase by the June meeting

is seen as remote, it has tripled since

May 16 and is now at 12%, futures data

indicate.

“Expectations appear to be that

minutes will signal that a summer hike

is on the cards,” said Stuart Bennett,

head of Group-of-10 currency strategy

at Banco Santander SA in London.

The “solidly hawkish” rhetoric from

Fed non-voting members of late is

proving to be dollar-positive, as the

possibility of a hike is not priced in by

the markets, he said.

“Positioning may be key as the long

dollar trade has completely unwound

over the last few months, suggesting

plenty of scope for it to be rebuilt ag-

gressively,” Bennett said, referring to

bets that the currency will rise.

Bloomberg’s dollar index, which

measures the US currency against

10 peers, rose 0.3% in New York and

touched its highest level since March

29. It has climbed 2.6% in May, poised

to snap three months of losses. The

greenback strengthened 0.2% to

109.35 yen and gained 0.3% to $1.1284

per euro.

Several regional Fed presidents

have said this month that a move

could be possible in June or July,

though there’s been no recent public

comment from Chair Janet Yellen or

Vice Chairman Stanley Fischer. Fischer

delivers remarks in New York and

Yellen will speak at Harvard University

on May 27.

“Currently my assumption is two,

possibly three” rate increases this year,

Atlanta Fed President Dennis Lockhart

said Tuesday. He was joined at the

Politico-hosted event by his San Fran-

cisco Fed colleague, John Williams,

who said “gradual means two to three.”

The two Fed off icials are not voting

members of the FOMC this year.

The odds of the Fed raising rates by

September rose to 47% on Tuesday

from 37% on May 16, according to data

based on fed fund futures compiled

by Bloomberg. While the chances of a

move at the June 14-15 meeting are still

seen as slim, they have risen from 4%

on Monday.

“Market players have to take into

account the Fed’s comments as data

suggest 2% growth for two quarters

may be realistic,” said Shinsuke Sato,

head of the foreign-exchange trading

group at Sumitomo Mitsui Banking

Corp in Tokyo. “They can’t remain total-

ly unprepared for a rate increase.”

As hedge funds reel, one trader thrives by taking other sideBloombergHong Kong

In a hedge fund industry plagued by lacklustre performance and the biggest outflows since 2009, Benjamin Fuchs stands out.From his off ice next door to hawkers of live chickens in Hong Kong, the founder of BFAM Partners has steered his $1.8bn Asia fund to nine straight months of positive returns and boosted assets under management by $650mn since July 1. While hedge fund titans from Daniel Loeb to Steven A. Cohen lament crowded bets and a lack of talent, Fuchs has thrived with a contrarian approach that often puts him on the right side of his peers’ losing trades.When hedge funds piled into short-term wagers against the yuan after China’s August devaluation, for example, Fuchs correctly bet they were too pessimistic. He bought the beaten- down bonds of developer Kaisa Group Holdings last year before prices doubled, and

has used derivatives to profit from excessive fear in global stock markets. One of his latest trades - selling credit default swaps on embattled commodities firm Noble Group Ltd - hinges on a call that investors are overly bearish.“What might look like a large loss for initial investors, depending on where your entry price is, can be a huge home run,” Fuchs, a former proprietary trader at Lehman Brothers Holdings and Nomura Holdings who founded BFAM in 2012, said in an interview.At a time of increasing public skepticism toward hedge funds, BFAM’s success is a reminder that some managers are still finding ways to make money and lure new investors. The firm’s Asian Opportunities Master Fund has returned 5.9% this year through April, adding to last year’s 11% gain and bringing its annualised return since inception to 16.7%, according to a person with knowledge of the matter. Fuchs, 46, declined to comment on returns because the fund is private.

“His performance stands out for sure,” said Anthony Lawler, a money manager at GAM Holding in London. “In some ways, he looks like the ‘old style’ multi-strategy stars in that he is not trading super complex structures, but rather seems to be finding solid idiosyncratic opportunities.”Investment pools tracked by Hedge Fund Research globally edged up 0.3% in the first four months this year after a 1.1% retreat in 2015. At least 979 funds shut their doors last year, while the industry had $16.6bn of net outflows over the past two quarters, according to HFR. BFAM generated an annualised return about three times the 5.3% industry average gain since 2012, according to Singapore-based data provider Eurekahedge.Fuchs and his team of 19 have found some of their best ideas in China. After the August yuan devaluation spurred bearish speculators to bid up prices of three- and six-month forwards, BFAM sold those contracts while buying cheaper 12- month forwards, a trade

that profited as prices converged. The Chinese currency has recovered 1.2% against the dollar since hitting a five-year low in January.BFAM started buying Kaisa debt in January last year, Fuchs said, a period when the Chinese firm’s 2018 notes traded as low as 26 cents on the dollar. While Kaisa defaulted in April 2015, the bonds have since rallied to about 79 cents. BFAM is part of a dissenting group of Kaisa off shore creditors pushing for better restructuring terms for debt holders.“We’re looking for situations where the bonds have already priced in an extreme scenario,” said Fuchs, who also purchased other single-B rated Chinese property debt last year and is letting the trade wind down as bonds mature or get bought back by the issuers. He said the notes were trading at an average yield of about 10% last June, pricing in losses four times those during the 2008 global financial crisis.In the stock market, Fuchs has made money from what he saw as a disconnect between the prices of

short-dated equity options and longer-term contracts. He’s sold the former to capitalise on investor angst about an imminent sell-off , while buying options with further out expiry dates because values have been suppressed by private banks that sold structured products to individual investors.Of course, not all of BFAM’s trades have been home runs. Yuan option positions tied to a view that the economic outlook wasn’t as bad as investors believed lost money during the August devaluation. BFAM also invested in a Chinese solar company that recently filed for bankruptcy, Fuchs said, without identifying the firm.The Chico, California native, who graduated from the University of California-Berkeley, moved to Asia at the age of 21, teaching English and working as a waiter at a karaoke bar in Japan. A chance encounter on a high-speed train led to a job trading futures and options for the now defunct Barings Bank in 1992, jump-starting his career in finance. From his

current off ice in Hong Kong’s Tin Hau neighbourhood, which abuts one of the city’s rough-and-tumble food markets and sits outside traditional hedge-fund haunts in the Central business district, Fuchs is still finding opportunities to go against the grain.He began selling Noble six- to 18-month CDS contracts in February, when investors were nervous about the commodity trader’s ability to roll over short-term debt. The trade allows BFAM to collect periodic payments in exchange for a promise to pay bondholders in the event of a default. While Noble’s debt tumbled last year as the company battled a rout in commodities and fended off attacks on the integrity of its accounting, the notes have rebounded in 2016 as raw materials rallied.For Fuchs, the turnaround is a logical result of what drew him to the trade in the first place: “The market was too fearful, both overly negative on commodity prices and overly bearish on them as a business.”

Goldman’s Hatziussays fl attest yieldssince ’07 misprice FedBloombergSingapore

Jan Hatzius, the chief econ-omist at Goldman Sachs Group, warned bond in-

vestors aren’t prepared for the Federal Reserve to raise interest rates.

Fed Bank of Atlanta President Dennis Lockhart and his San Francisco counterpart John Wil-liams both said on Tuesday at least two rate increases may be warranted this year as the econ-omy picks up.

Their comments echo those of Bill Gross, the former manager of the world’s biggest bond fund, who said this month not to count the Fed out after a weaker-than-forecast jobs report.

The views of the Fed offi cials, who aren’t voting members of the Federal Open Market Com-mittee, contrast with the Treas-uries market, where the range of maturities comprising the yield curve signals that investors are preparing for slowing infl ation as much as higher borrowing costs. Demand for long- term debt has narrowed the yield premium on 10-year notes over two-year securities to as little as 92 basis points, the least since 2007. The Fed is set to issue the minutes of its most recent meeting.

“The market’s underesti-mating their willingness to fol-low through on what they say,” Hatzius said on Tuesday in an interview on Bloomberg Televi-sion. “If you look at where the yield curve is priced - how lit-tle normalisation of monetary policy is discounted - that’s very striking.”

Benchmark 10-year Treasur-ies were little changed Wednes-day, with the 10-year note yield at 1.78% in New York, according to Bloomberg Bond Trader data. The price of the 1.625% security ma-turing in May 2026 was 98 19/32.

Hatzius also said in February the bond market was underesti-mating the Fed, and he predict-ed 10-year yields would rise to about 3% by year-end.

They’ve fallen about six ba-sis points from the closing level on February 4 when he made the comments. Goldman Sachs

is one of the 23 primary dealers that trade with the US central bank.

Futures contracts show a 14% probability policy makers will raise rates a quarter-point at their next meeting on June 14-15. The chances of a shift by year-end are 67%, according to data compiled by Bloomberg based on fed fund futures.

The market is signalling a risk of a contraction, said Steve Major, head of fi xed-income research at HSBC Holdings in London. Long-term yields are declining worldwide as central banks, including the Fed, strug-gle to spur infl ation, he said.

“The yield curve itself signals that things are not good looking into the future and talking about recession risk,” Major said in an interview on Bloomberg Televi-sion on Monday.

Investors might be right in as-suming the Fed will be cautious about raising rates, said Chris-toph Kind, head of asset alloca-tion at Frankfurt Trust, which oversees about $20bn. Even so, long-dated Treasuries are ex-pensive, he said.

Treasuries have returned 3.6% this year, according to Bank of America Merrill Lynch indexes. Securities maturing in one to three years have earned 0.9%, while those due in 10 years and longer gained about 9%.

“We are cautious about long-dated bonds,” said Kind, who’s based in Frankfurt. “It is a tough market to call as it’s diffi cult to understand the Fed’s reac-tion function these days. The market might be right to price out rate hikes, but valuations of these long-dated bonds are not attractive in our view given the amount of risk.”

Hatzius: Cautious approach.

Russia retools aftercrash as post-oileconomy takes shapeBloombergMoscow

Call it a stealth overhaul. With none of the fanfare that greeted Saudi Arabia’s plan for the post-oil era,

the Russian economy is quietly getting its biggest makeover under President Vladimir Putin. A trail left by crude’s col-lapse has turned up some unlikely survi-vors and even industries that found a way to prosper as the broader economy burned.

“New drivers for growth have already appeared in the economy - agriculture, chemicals, the food industry, domes-tic tourism,” Deputy Finance Minister Maxim Oreshkin said in an interview on Monday. “They haven’t yet made up for a drop in non-tradable sectors, which was a one-off and structural.”

Russia’s famously boom-and-bust economy is already turning heads. A contraction in the fi rst quarter was less than all but one forecast in a Bloomberg survey, meaning the nation’s longest re-cession in two decades may end as soon as next quarter. The 1.2% drop in gross domestic product from a year earlier was the smallest since the decline began at the start of 2015.

While some of the shock therapy was self-infl icted, including a decision in late 2014 to shift to a free-fl oating exchange rate, much of it came from a bruising standoff with the West over Ukraine and turmoil in the energy markets. Tables were turned on consumer industries that took off as a $2.1tn energy windfall powered do-mestic demand for more than a decade.

That came to an end with the decision to loosen the reins on the currency, with the central bank pulling the trigger ahead of schedule to protect its reserves as oil prices plunged.

The rouble has since racked up losses against the dollar that reached 44% in 2014 and 20% in 2015, before recouping some of its decline this year with a gain of more than 12%.

“There are small signs of shifts in the structure of the economy, against the background of more than a twofold

weakening of the rouble that gave com-petitive advantages,” said Nikolay Kon-drashov, a senior analyst at the Devel-opment Center of the Higher School of Economics in Moscow. “But for changing the structure of the economy, price ad-vantages alone aren’t enough.”

While infl ation soared in the aftermath of the rouble’s collapse, clobbering con-sumer demand already worn down by fall-ing wages, one way to gauge adjustments in the economy is by looking at currency pass-through to consumer prices. Its impact on annual infl ation dropped to 0.2 percentage point this year from 4.5 percentage points in 2015, Morgan Stanley estimates.

With oil prices stabilising, infl ation reached 7.3% from a year earlier in the past two months, down from a 13-year high of 16.9% in March 2015, putting the central bank on track to meet its 4% target in 2017.

To measure the vital signs of the econ-omy, look to industries including agri-culture, whose share in GDP last year rose to 4.4%, the highest since 2003. The success of farmers - boosted by a weaker rouble and tit-for-tat sanctions over the confl ict in Ukraine - was one reason last year’s economic contraction of 3.7% was less than half the decline during the last recession, in 2009.

The legacy of the crisis so far also in-cludes such outperformers as the in-formation technology industry, where output soared 28% last year, with phar-maceuticals adding 8.8% and chemicals climbing 4.4%. No breakdown by indus-try is yet available for this year.

For all the signs of improvement else-where, oil and gas remain the lifeblood of the economy. Any gains will prove short- lived without a broader overhaul that un-

locks investment. “Some industries have benefi ted from the devaluation, but it’s a one-time win,” said Evsey Gurvich, head of the Economic Expert Group in Moscow. “There’s a certain shift, but a process of overhaul hasn’t yet started. What’s need-ed is investment, reforms, investor trust.”

Proceeds from energy account for about a third of budget revenue. That compares with 23% in 1996-1999 and an average of 50% in 2011-2014, according to Morgan Stanley. As much as a quarter of Russia’s GDP was linked to the energy industry last year, more than fi ve times the share for agriculture.

Perhaps the biggest hurdle is Russia’s business climate. While frequently fod-der for criticism, there’s progress. Rus-sia has surged by 61 spots in the World Bank’s Ease of Doing Business Index since 2013 to 51st this year.

An oil worker inspects a pumping jack in an oilfield operated by Bashneft in Russia. A trail left by crude’s collapse has turned up some unlikely survivors in Russia and even industries that found a way to prosper as the broader economy burned.

BUSINESS

Gulf Times Thursday, May 19, 20164

Emerging assets snap two-daywinning streakReutersLondon

Heightened prospects of a Federal Reserve interest rate rise weighed on emerging markets yesterday, while political turmoil surrounding South African Finance Minister Pravin Gordhan knocked the rand to a two-month low.MSCI’s emerging market index snapped a two-day winning streak to fall 0.9%, tracking developed peers after US data showed accelerating inflation and comments by Federal Reserve off icials rekindled expectations of a near-term rate rise.As the dollar hit a three-week high, emerging currencies fell with South Africa’s rand suff ering the biggest losses, tumbling 2%.South African assets, already under pressure from weak economic prospects, have had a roller-coaster week following weekend reports that Gordhan’s arrest was imminent.The rand fell, then strengthened after he hit back on Tuesday, only to lose ground again.“The fact Gordhan is under so much pressure does speak to the power of the anti-reform faction within South Africa,” said UBS strategist Manik Narain, adding timing was delicate with the country also facing a review of its sovereign rating.“Investors got back into South

Africa (in recent months) but are being exposed to the political dynamic resurfacing again... It’s not a good time for someone senior within the party to be facing these pressures.”Gordhan is being investigated by police over the creation of a covert surveillance unit in the revenue services during his time as head of the agency.The minister, who said on Tuesday the reports of his imminent arrest amounted to an attack on the Treasury, is due to attend a parliamentary debate in his first public appearance this week.South African data meanwhile showed inflation had slowed year-on-year ahead of a central bank meeting today.Other currencies were also under pressure. Russia’s rouble tracked oil prices lower and slipped 0.7%.Turkey’s lira matched the rouble’s move to hover just below the weakest level in 11-weeks hit on Monday, as an adviser to President Tayyip Erdogan said inflation was not a threat anymore and the central bank had to make a series of interest rate cuts.Poland’s zloty led central European currencies lower against the euro, slipping by 0.5% to its weakest since Friday, while Hungary’s forint and Romania’s leu almost matched those losses.Ratings agency Fitch warned of heightened fiscal risk for Poland and trimmed its forecast for economic expansion.

Asia markets slip on Wall St fallAFPHong Kong

Asian stock markets mostly fell yesterday following a

two-day rally and strong US data that fuelled talk of an

interest rate hike, but Tokyo extended its recent gains

after a better-than-forecast economic growth reading.

Japan said the world’s number three economy

expanded 0.4 % in the first three months of the year,

better than expected and boosted by a pick-up in

consumer spending.

The country’s benchmark Nikkei stock index swung

in and out of positive territory in early trade as the

upbeat figure was off set by fears it could allow the

Bank of Japan to hold off any fresh stimulus for the

time being.

Stimulus bets “may be drying up a little”, Masahiro

Ichikawa, a senior strategist at Sumitomo Mitsui Asset

Management Co

in Tokyo,told Bloomberg News.

“If the...growth figure was a small increase, we

might have seen more hopes for supportive policy,

but with the data being better than expected the view

now is the size of the policy package may not be that

significant.”

However, shares ended the morning 0.6 %.

The figures come days after local media reported

that Prime Minister Shinzo Abe is planning to delay a

planned sales tax hike next year over concerns it could

damage the already fragile economy.

A tax rise in 2014 - seen as key to helping pay down

Japan’s enormous national debt - was blamed for

ushering in a brief recession.

The rally in Tokyo bucked the regional trend after a

sharp sell-off on Wall Street.

US traders ran for cover after news that industrial

production, consumer prices and housing starts all

rose in April led to speculation the Federal Reserve

could lift borrowing costs as soon as next month.

The central bank earlier this year said it would not

raise rates again - after December’s first hike in almost

a decade - unless the world’s top economy was show-

ing signs of being in good health.

However, talk has been brewing in recent weeks

that Fed policymakers would consider tightening at its

June meeting, which has jolted investor confidence.

Worries about the possibility of higher US bor-

rowing costs, and sharp losses on Wall Street’s three

main indexes, seeped into Asia, with most other stock

markets falling.

Hong Kong shed 1.1 %, Sydney lost 0.2 % and Shang-

hai was one % off while Seoul dipped 0.5 %.

On currency markets the talk of a US rate rise lifted

the dollar to 109.22 yen from 109.13 yen in New York.

However, the greenback seesawed as traders con-

sidered the Bank of Japan standing pat on monetary

easing, which tends to lead to a stronger yen.

Energy firms again rode on the coattails of a crude

rally, which has seen both main contracts push to-

wards the $50 mark.

Brent was up 0.3 % at $49.44 and West Texas

Intermediate also gained 0.3 % to $48.46 as wildfires

in Canada forced the evacuation of workers and the

closure of the operations of the country’s biggest

oil company. In Tokyo, the Nikkei 225 down 0.6 % at

16,753.55 points; Shanghai - Composite down down 1.0

% at 2,815.94 points and Hong Kong - Hang Seng down

1.1 % % at 19,905.03 points at the close yesterday.

Pedestrians walk past a share prices board in Tokyo. The Nikkei 225 closed down 0.6 % to 16,753.55 points yesterday.

Sensex slides; rupee weakensBloombergMumbai

Indian stocks slid for the fi rst time this week, led by automakers, as emerging-market equities amid speculation the

US may expedite interest-rate increases.Bajaj Auto and Mahindra & Mahindra, a

tractor maker, were the worst performers on the S&P BSE Sensex.

Maruti Suzuki India dropped the most in a week after Suzuki Motor Corp slumped after saying it used an improper method to test the fuel effi ciency of its vehicles. Bharat Heavy Electricals tumbled for a sixth day, the longest losing run in eight months.

The Sensex lost 0.3% at the close, paring an intraday loss of 1.1%. The MSCI Emerg-ing Markets Index headed for a two-month low as odds of a June hike tripled to 12% on Tuesday amid comments by central bank offi cials on prospects for interest rates to be raised.

“The volatility in the global markets is due to a lack of clarity on the interest rates by the Fed,” Ashish Kukreja, chief execu-tive offi cer at Mumbai-based Craft Finan-cial Advisors, said by phone from Mumbai. “Locally, the market is trading in a range and fi nding it diffi cult to break the resist-ance of 8,000” on the NSE Nifty 50 index as investors await results of the fi ve state elec-tions and the onset of the four-month rainy season, he said.

Expectations for the US monetary au-thority to add to last December’s rate in-crease are starting to build after higher-than-expected consumer-price data, with comments from Fed presidents Dennis Lockhart and John Williams that at least

two hikes may be warranted this year also stoking speculation of a move.

The Nifty Index lost 0.3% to 7,870.15 af-ter coming within 1% of the 8,000-mark on Tuesday. The gauge had dropped as much as 1% intraday.

The Sensex rose last week amid optimism that company earnings are recovering after the worst run since the global fi nancial cri-sis.

Eight out of 15 index companies that have posted March-quarter results so far exceeded or matched estimates. Inves-tors have also been bullish after this year’s prediction for above-normal rainfall after back-to-back defi cits and the passage of key economic bills in parliament.

“India is a buy on dips market,” Purvesh Shelatkar, senior vice president and head of equities at BOB Capital Markets in Mumbai, said in an interview to Bloomberg TV India. “There is noise about the Fed and election results. But the company results are far bet-ter than expected, the monsoon is predicted to be normal and bank balance sheets are getting cleaner.”

Punjab National Bank, the worst-per-forming stock in India’s S&P BSE Bankex index this year, climbed 3.3%, ending a six-day decline. The gain came even after the bank reported a quarterly loss after its stressed-asset ratio surged to a fi ve-year high.

State Bank of India, the nation’s biggest lender, climbed 1.8%. Oil & Natural Gas Corp, the top explorer, gained 1.9%. Larsen & Toubro, the largest engineering company, added 1.5%.

Bajaj Auto declined the most since April 28. Hero MotoCorp lost 1.8%. Mahindra decreased for the fi rst day this week. Maruti

Suzuki lost 0.9%, paring an intraday loss of 3.7% after the parent Suzuki said the fuel issue doesn’t apply to its vehicles sold out-side Japan.

Hero and Mahindra are among the year’s best performers on the Sensex.

“Auto stocks have seen a good rally so some investors are taking money off the ta-ble,” Chokkalingam G, managing director at Equinomics Research & Advisory in Mum-bai, said in a phone interview.

Foreign investors have bought $201mn of Indian stocks so far this month, taking this year’s infl ows to $2bn.

Meanwhile the rupee yesterday weak-ened past the 67-mark against the US dol-lar, due to concerns on thin dollar infl ows and weak Asian currencies.

Inflows from foreign portfolio inves-tors (FPI) have been thin in May so far, putting pressure on the rupee. FPIs have bought just $171.52mn worth of shares and bonds this month. In March and April, they bought $4.33bn and $1.13bn respectively.

The rupee opened at 66.94 per US dollar and touched a low of 67.01, a level last seen on March 16.

Asian currencies were trading lower. The South Korean won was down 0.76%, Malaysian ringgit 0.56%, Philippines peso 0.53%, Indonesian rupiah 0.53%, Singapore dollar 0.44%, Japanese yen 0.33%, Taiwan dollar 0.29%, Thai baht 0.24%, China ren-minbi 0.24% and China off shore 0.11%.

US consumer prices recorded their big-gest increase in more than three years in April as petrol prices and rents rose. The data pointed to a steady infl ation build-up that could give the Federal Reserve ammu-nition to raise interest rates later this year.

South Korea’s Hotel Lotte plans $4.9bn mega IPO in June On track to be world’s biggest IPO since late 2015; 86% of Q1 sales from duty free business; South Korea hoping for bumper IPO year; family feud for control of Lotte Group

ReutersSeoul

South Korea’s Hotel Lotte Co plans a share sale worth up to 5.7tn won ($4.85bn) next month, sources said

yesterday, in what would be the world’s biggest initial public off ering since late 2015.

The sprawling Lotte Group said last year it would list Hotel Lotte, which in-cludes the third-largest global duty-free retail chain, as part of eff orts to simplify its ownership structure amid a family feud over leadership succession.

The listing would headline what could be a bumper year for South Korean IPOs,

fuelled by a rise in the share market and as conglomerates that dominate Asia’s fourth-largest economy restructure.

About 86% of Hotel Lotte’s revenue in the January-March quarter came from its duty-free business, according to a com-pany fi ling.

However, competition in South Ko-rea’s tax-free shopping industry – the world’s biggest – is intensifying, and Lotte is poised to lose the licence on its second-largest store, in Seoul, when it expires at the end of June.

Two Seoul-based fund managers said institutional investors were likely to buy at least some of the listing shares due to the massive offer size, although duty-free uncertainties may weigh on sentiment.

They declined to be identifi ed before the IPO fi ling document is available.

Last month, South Korea said it would issue four more duty-free store licences in Seoul, taking the number of stores

to 13 by the end of 2016 from six a year earlier. While that could enable Lotte to replace its expiring licence, it intensifi es competition.

Hotel Lotte plans to use its IPO pro-ceeds to expand its global business, in-cluding hotels, with acquisitions a possi-bility, a group spokesman said, declining to give details or to confi rm the listing details.

Last year, Hotel Lotte paid $805mn for the New York Palace hotel.

Preliminary plans call for sharehold-ers to sell about 13.65mn shares, or a 10% post-listing stake, while 34.2mn new shares, a 25% stake, would be is-sued at an indicative price range of 97,000 won to 120,000 won per share, the sources said.

Raising between 4.7tn won and 5.7tn won based on the preliminary price range, the IPO could top South Korea’s previous biggest fl oat, of Samsung Life Insurance Co for 4.9tn won in 2010. It

would be the world’s biggest since Japan Post Holdings Co raised $5.7bn in Octo-ber, 2015.

Other likely listings in South Korea this year include biotech drug contract manufacturer Samsung Biologics Co Ltd and construction equipment maker Doosan Bobcat Inc

The IPO comes amid a family feud over who controls the Lotte Group, South Ko-rea’s fi fth-largest conglomerate.

Shin Dong-bin, the youngest son of 93-year-old founder Shin Kyuk-ho and CEO of the companies that are Hotel Lotte’s main shareholders, cemented control of the group in August with the support of shareholders in a key Japan-based holding company. Older brother Shin Dong-joo is engaged in legal pro-ceedings seeking to wrest control.

The feud prompted criticism of Lotte’s shareholding structure, trigger-ing a reorganisation including the Hotel Lotte IPO.

Traff ic drives past the Hotel Lotte Co in South Korea. Hotel Lotte plans a share sale worth up to $4.85bn next month, sources said yesterday, in what would be the world’s biggest initial public off ering since late 2015.

BUSINESS5Gulf Times

Thursday, May 19, 2016

Bank of America raises $1bn of yen as yield hunger deepensBloombergTokyo

Bank of America Corp took advantage of Japan’s hunger for anything but nega-tive yields with its first benchmark-

sized yen bond sale since the global financial crisis.

The US bank sold ¥110bn ($1.01bn) in fi ve- year debt last week, according to its Japanese securities unit, which helped manage the deal. The lender marketed the bond to investors by referring to its 0.39% absolute coupon rather than with a spread over the benchmark bor-rowing cost.

It was the biggest single yen note sold by an overseas bank since May 2014, and was initially off ered at a range with a higher coupon.

“Expectations right now are for us to go deeper into minus rates, so investors prob-ably saw this deal as an opportunity to lock in a steady fl ow of cash,” said Mana Nakazora, the chief credit analyst in Tokyo at BNP Paribas SA. “Investors have very few choices.”

Demand for riskier bonds has intensifi ed since the Bank of Japan announced in January plans to start charging fees on some reserves

with sales of lower-rated domestic yen bonds climbing 58% in 2016.

Moody’s Investors Service and S&P Glo-bal Ratings both rate Bank of America at their third-lowest investment grade, while Fitch Ratings evaluated the lender at two levels higher at A.

With uncertainty about how far Japanese rates will fall into minus territory, investors are hesitant to bid on some bonds based on spreads in case the benchmark moves widely during the marketing process.

“This is actually the fi rst time for an interna-tional issuer to adopt coupon-based pricing for an institutional investor targeted benchmark deal since the BoJ has adopted negative-rate policy,” said Gen Sakai, head of Bank of America Merrill Lynch’s Japan debt capital markets syn-dicate in Tokyo.

Bank of America initially marketed the bond at a rate of 0.39% to 0.41%, he said.

Bank of America off ered the yen debt in a for-mat covered by US law, unlike sales undertaken in Japan’s Samuraibond market.

The last such debenture brought to mar-ket under Japanese rules was a ¥4.5bn note by the South American multinational issuer Corp Andina de Fomento. Issuance in the market is

down 72% this year from a year earlier, partly refl ecting rising costs to swap funds raised out of the yen.

Jerry Dubrowski, a spokesman for the is-suer, Bank of America, declined to comment on its sale. Under proposals released last year by the Federal Reserve Board, bonds need to be sold under US law to count toward a regulatory buff er used if a bank fails, known as total loss-absorbing capacity.

“The cheapest way for US banks to comply with TLAC is to issue senior holding company debt, but it has to be issued under US law,” said Arnold Kakuda, a banking analyst at Bloomberg Intelligence in New York. “It is still at the pro-posal stage but the fi nal rule tends to be pretty close to the proposal.”

Bank of America’s debt is listed on the To-kyo Stock Exchange’s Pro-bond market, as is Citigroup’s global Japanese-currency denom-inated off ering of ¥81.5bn sold in February. The yield on Japan’s 30-year bond was 0.36% yesterday.

“Japanese investors are desperate for something that provides yield,” said Bank of America Merrill Lynch’s Sakai. “Investors valued the rare opportunity to buy Bank of America yen paper.”

Japanese yen banknotes of various denominations are arranged for a photograph in Tokyo. Bank of America sold $1.01bn in five-year debt last week, according to its Japanese securities unit, which helped manage the deal.

India rupee to see more pain as foreignpullback adds to export woes

BloombergMumbai

Standard Chartered is pre-dicting more losses for the Indian rupee, which

dropped to a two-month low amid outfl ows of foreign money from the nation’s bonds and stocks.

Overseas holdings of ru-pee-denominated debt fell by Rs16.7bn ($249mn) on Tuesday, the most since March 29, Na-tional Securities Depository data show. That took withdrawals for this week to Rs22.7bn. Foreign-ers pulled $14.4mn from Indian shares on Monday, according to the latest fi gures. Stocks and currencies in emerging markets declined yesterday as comments by Federal Reserve offi cials spurred speculation a US rate increase will happen as soon as next quarter.

The rupee is already Asia’s worst-performing currency this year, having retreated 1.2% against the dollar.

Recent losses have been fuelled by a May 13 report that showed Indian exports contracted 6.7% in April from a year ago, a 17th month of declines, while imports dropped 23.1%. The trade data “paint a gloomy picture” on both domestic and global demand, Nomura Holdings economists wrote in a note that day.

The Indian currency fell 0.2% to 66.9850 a dollar in a fi fth day of declines in Mumbai, accord-ing to prices from local banks compiled by Bloomberg.

That’s the longest losing run since December. It weakened to 66.9975 earlier, the lowest level since March 16.

“Recent domestic data hasn’t been encouraging,” Divya De-vesh, the Singapore-based for-eign-exchange strategist for Asia at Standard Chartered, wrote in an e-mail interview. “Our view is also driven by a stronger dollar on higher expectations of a Fed rate hike as the rupee actually tends to underperform in Asia during periods of risk aversion. Equity outfl ows might increase if risk aversion persists.”

Devesh said the rupee could weaken to 67 to 68 per dollar “in the short-term.”

Odds for a June US rate hike tripled in a day to 12%, Fed Funds futures show. The con-tracts now show a 47% chance for an increase in September, compared with 37% on Monday. Atlanta Fed President Dennis Lockhart and San Francisco’s John Williams said Tuesday two increases this year may be war-ranted, while Dallas Fed Presi-dent Robert Kaplan said a boost may come soon.

Indian sovereign bonds de-clined, with the yield on notes due January 2026 rising two ba-sis points to 7.48%, the highest closing level since March 30, ac-cording to prices from the cen-tral bank’s trading system. India failed to meet its goal at an auc-tion of debt-investment quotas for the fi rst time in three years on Monday, signalling overseas de-mand is faltering as accelerating infl ation reduces odds of more interest-rate cuts.

Yuan’s 17% devaluation versus yen turns BoJ pain into China gainBloombergTaipei

Haruhiko Kuroda’s pain is China’s gain. The Bank of Japan Governor’s eff orts to bolster economic growth have been undermined by the yen’s surge, which outstripped all other Asian peers this year and spurred carmakers to project lower-than-estimated profits. That’s a tailwind for China after the yuan dropped this month to the lowest level versus the yen since 2014. The world’s biggest exporter posted a second straight month of rising overseas shipments in April.For Bank of America Corp and HSBC Holdings, the yen’s ascent against the yuan is set to continue because the People’s Bank of China is in a stronger position to keep a lid on its currency than the BoJ. Japan’s interest rates are already below zero, while Chinese

borrowing costs are the highest among the world’s seven biggest economies.“Japanese monetary policy has become hamstrung unless there’s a much more radical approach,” said Claudio Piron, Singapore-based co-head of Asia currency and rates strategy at Bank of America. “China doesn’t even have to resort to anything as exotic as quantitative easing and reaching out to unorthodox measures like Japan has.”After years of low borrowing costs failed to revive Japanese growth, Kuroda unveiled a bond-buying program in April 2013, added to it in October of the following year, and adopted negative interest rates in January.While the central banker’s early measures succeeded in driving the yen lower through last June, the Japanese currency has strengthened since then amid jitters over weak global growth

and reduced bets on Federal Reserve rate increases. Kuroda shocked markets when he held off from adding to the stimulus program at a meeting last month, sending the yen to its biggest gain in six years.“Japan has been caught in the fallout of a less strong dollar,” Alan Ruskin, New York-based head of G10 currency strategy at Deutsche Bank AG, wrote in a note. He predicts the yuan will continue to fall after weakening 17% from a 22- year high last June. The yuan rose 0.16% against the yen in Shanghai yesterday, while off icial data showed Japan’s gross domestic product exceeded all estimates to expand an annualised 1.7% in the three months ended March 31.Japan’s stronger currency is starting to hurt exporters. Honda Motor Co said last week profit in the year to March 2017 will fall short of the

¥574.2bn ($5.2bn) average estimate in a Bloomberg survey of analysts, while Nissan Motor Co forecast annual profit that would be little changed after the higher yen eroded overseas earnings.Japan’s outbound shipments have fallen for each of the past six months through March, while China’s exports climbed 4.1% in yuan terms in April. Companies in the two countries compete in overseas markets.The yen has recently begun to give back some of its gains against the yuan. The Japanese currency tumbled on May 9 after Japan’s finance minister said the government can intervene to stabilise foreign-exchange markets if necessary. The yen also slid after improving US retail sales and consumer confidence fuelled speculation of more interest-rate increases by the Fed.China’s leaders are signalling there are limits to how much they can do

to buoy growth. The People’s Daily, the Communist Party’s mouthpiece, damped hopes for more monetary easing with a front-page article warning about the nation’s high levels of debt, while new credit in April fell to a six-month low.Still, the central bank reiterated in a statement on Saturday that monetary policy would continue to support the economy. Chinese banks are still setting aside 17% of their deposits as reserves, while the PBoC’s benchmark one-year lending rate is at 4.35%.China’s capacity to ease monetary policy further will keep pushing the yuan lower versus the yen, according to Ju Wang, a foreign-exchange strategist at HSBC in Hong Kong.“Compared with the US and Japan, the room for easing is quite high in China,” Wang said. The BoJ’s monetary stimulus “has already reached the limits.”

Hong Kong stock infl ows from China on the surgeBloombergHong Kong

Hong Kong’s stock market needs all the help it can get. On Tues-day, aid came in the form of the

biggest infl ows from mainland inves-tors in a year.

The surge happened as the Commu-nist Party’s No 3 offi cial arrived in the the city. Zhang Dejiang, the People’s Daily said, would bring “confi dence and hope” to a city facing a contracting economy.

Mainland institutions appeared to be behind the purchases, according to Reorient Financial Markets.

“The move was very unusual and looked like Chinese institutions buy-ing,” said Steve Wang, chief China economist at Reorient Financial Mar-kets Ltd in Hong Kong.

“It coincided with Zhang Dejiang’s Hong Kong trip. Despite all the roads being sealed by police offi cers, Zhang’s visit might look slightly more cheerful with stocks rising.”

China’s authorities have been known to intervene in mainland markets be-fore key national events, including this year’s National People’s Congress and August’s military parade celebrating the 70th anniversary of victory over Ja-pan during World War II.

Zhang is the most senior mainland offi cial to visit Hong Kong since then-President Hu Jintao in 2012 and his tour comes amid increasing calls for the city’s autonomy from Chinese rule.

Mainland investors used up 2.6bn yuan ($403mn) of their daily quota for buying Hong Kong shares via an ex-change link with Shanghai on Tuesday, the most since April 23, 2015, according to data compiled by Bloomberg.

The Hang Seng Index rose 1.2%, the biggest gain in almost a month. Among the most traded shares by Chinese traders were HSBC Holdings, Tencent Holdings and Industrial & Commer-cial Bank of China Such gains weren’t matched in Shanghai, where the benchmark index slid 0.3%.

Hong Kong could do with some cheering up.

The Hang Seng Index of the city’s biggest stocks is down almost 10% this year, extending 2015’s losses. Its econ-

omy unexpectedly shrank 0.4% in the fi rst quarter as retail sales tumbled and the housing market sagged.

Goldman Sachs Group Inc predicts home prices will plunge 20% through 2018 in a city where a currency peg with the greenback means interest rates moves in sync with those in the US

The former British colony’s reputa-tion for its rule of law has been tested

by China’s suspected abduction of booksellers from the city.

Rancor over the city’s future has spilled on to the streets, with a violent riot in February and citywide Occupy protests that stretched for months in 2014.

Since his arrival, Zhang promised to listen to suggestions about how Beijing could maintain the city’s autonomy, while he praised the leadership of Hong

Kong’s unpopular Chief Executive Le-ung Chun-ying. Zhang is attending a global infrastructure forum, where he talked about the opportunities that President Xi Jinping’s “One Belt, One Road” project can bring to the city of 7.2mn.

For Hong Kong stock investors, the good news was brief. The Hang Seng Index slumped 1.45% at the close,

more than erasing Tuesday’s gain. Mainland investors, who used up 25% of the quota yesterday, took less than 11% yesterday.

Zhang’s failure to provide details on the progress of a delayed exchange link with Shenzhen may be worsening de-clines. Speculation he would announce the start date for the program helped boost shares in both cities on Monday.

Two bull statues displayed outside the Hong Kong Stock Exchange. The Hang Seng Index of the city’s biggest stocks is down almost 10% this year, extending 2015’s losses.

LATEST MARKET CLOSING FIGURES

6 Gulf TimesThursday, May 19, 2016

BUSINESS

Zad Holding CoWidam Food CoVodafone Qatar

United Development CoSalam International Investme

Qatar & Oman Investment CoQatar Navigation

Qatar National Cement CoQatar National Bank

Qatar Islamic InsuranceQatar Industrial Manufactur

Qatar International IslamicQatari Investors Group

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

Qatar Fuel QscQatar First Bank

Qatar Electricity & Water CoQatar Cinema & Film Distrib

Qatar Insurance CoOoredoo Qsc

National LeasingMazaya Qatar Real Estate Dev

Mesaieed Petrochemical HoldiAl Meera Consumer Goods Co

Medicare GroupMannai Corporation Qsc

Masraf Al RayanAl Khalij Commercial Bank

Industries QatarIslamic Holding Group

Gulf Warehousing CompanyGulf International Services

Ezdan Holding GroupDoha Insurance Co

Doha Bank QscDlala Holding

Commercial Bank QscBarwa Real Estate Co

Al Khaleej Takaful Group

87.00

58.80

11.22

18.85

11.20

11.30

88.20

87.70

138.50

59.20

40.20

62.20

51.30

96.40

23.42

47.85

12.35

155.50

12.51

207.50

35.00

80.00

89.80

18.32

13.95

18.68

214.10

104.00

89.00

34.20

16.98

101.00

68.50

62.10

37.75

18.10

19.80

36.35

23.00

37.50

32.25

25.50

0.58

0.00

1.17

0.91

-0.18

0.98

-1.45

0.00

0.00

0.34

-0.99

0.65

0.59

-0.82

1.78

0.00

0.98

-0.32

0.72

-0.24

-7.89

1.91

-0.22

-0.33

-0.21

0.16

-0.88

2.16

0.00

0.29

-0.06

-1.37

-0.29

-0.16

0.13

0.00

0.00

-0.14

1.50

0.00

0.00

-1.35

100

162,772

2,239,922

121,714

71,946

52,547

29,794

-

98,339

1,000

5,987

5,773

87,575

97,487

256,063

-

20,631

8,927

959,050

10,295

123

54,413

144,223

411,408

74,292

292,729

6,034

83,634

5,775

916,191

1,113

88,065

54,398

3,763

1,087,441

229,067

-

92,839

21,216

81,188

141,329

2,051

QATAR

Company Name Lt Price % Chg Volume

United Wire Factories CompanEtihad Etisalat Co

Dar Al Arkan Real Estate DevSaudi Hollandi Bank

Rabigh Refining And PetrocheBanque Saudi Fransi

Saudi Enaya Cooperative InsuMediterranean & Gulf Insuran

Saudi British BankMohammad Al Mojil Group Co

Red Sea Housing Services CoTakween Advanced Industries

Sabb TakafulSaudi Arabian Fertilizer Co

National GypsumSaudi Ceramic Co

National Gas & IndustrializaSaudi Pharmaceutical Industr

ThimarNational Industrialization C

Saudi Transport And InvestmeSaudi Electricity Co

Saudi Arabia Refineries CoArriyadh Development Company

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

Saudi Vitrified Clay Pipe CoJarir Marketing Co

Arab National BankYanbu National Petrochemical

Arabian CementMiddle East Specialized Cabl

Al Khaleej Training And EducAl Sagr Co-Operative Insuran

Trade Union Cooperative InsuArabia Insurance Cooperative

Saudi Chemical CompanyFawaz Abdulaziz Alhokair & C

Bupa Arabia For CooperativeWafa Insurance

Jabal Omar Development CoSaudi Basic Industries Corp

Saudi Kayan Petrochemical CoEtihad Atheeb Telecommunicat

Co For Cooperative InsuranceNational Petrochemical Co

Gulf Union Cooperative InsurGulf General Cooperative Ins

Basic Chemical IndustriesSaudi Steel Pipe Co

Buruj Cooperative InsuranceMouwasat Medical Services Co

Southern Province Cement CoMaadaniyah

Yamama Cement CoJazan Development Co

Zamil Industrial InvestmentAlujain Corporation (Alco)

Tabuk Agricultural DevelopmeUnited Co-Operative Assuranc

Qassim Cement/TheSaudi Advanced Industries

Kingdom Holding CoSaudi Arabian Amiantit Co

Al Jouf Agriculture DevelopmSaudi Industrial Development

Bishah AgricultureRiyad Bank

The National Agriculture DevHalwani Bros Co

Arabian Pipes CoEastern Province Cement Co

Al Qassim Agricultural CoFiling & Packing Materials M

Saudi Cable CoTihama Advertising & Public

Saudi Investment Bank/TheAstra Industrial Group

Saudi Public Transport CoTaiba Holding Co

Saudi Industrial Export CoSaudi Real Estate Co

Saudia Dairy & Foodstuff CoNational Shipping Co Of/The

Methanol Chemicals CoAce Arabia Cooperative Insur

Mobile Telecommunications CoSaudi Arabian Coop Ins Co

Axa Cooperative InsuranceAlsorayai Group

Weqaya For Takaful InsuranceBank Albilad

Al-Hassan G.I. Shaker CoWataniya Insurance Co

Abdullah Al Othaim MarketsHail Cement

24.38

29.11

5.55

12.65

12.74

24.95

13.95

23.69

23.15

12.55

27.31

24.99

28.35

64.00

14.50

40.18

22.45

39.03

34.32

13.30

56.35

17.35

35.64

19.52

13.50

48.94

36.44

94.55

116.72

19.60

41.90

49.77

8.25

27.40

37.69

15.78

10.11

47.33

39.82

141.49

20.96

59.73

84.35

6.84

4.21

92.06

17.60

13.30

17.18

26.93

18.65

19.89

135.72

76.90

29.90

27.41

13.01

30.00

14.30

11.79

11.96

62.50

11.44

12.16

8.60

30.97

10.64

69.75

11.12

22.71

64.63

11.03

31.10

10.95

34.70

6.88

37.41

12.95

16.61

13.73

34.30

46.92

19.00

151.48

44.80

7.28

41.96

8.79

17.23

16.80

12.33

19.39

19.76

26.18

51.15

97.64

12.81

3.48

-1.85

-1.25

-1.17

-1.09

-0.20

1.45

-0.55

-0.64

0.00

1.41

-0.79

-0.74

-0.39

0.35

1.34

0.00

1.56

-1.15

-0.30

1.26

0.06

-0.53

-0.15

0.00

-1.41

0.39

0.08

-0.03

-0.25

1.18

-1.45

-0.36

-0.58

-0.58

-0.82

0.10

-0.73

2.68

6.82

-0.57

-0.22

0.00

-0.73

0.00

3.02

-0.17

0.91

-0.92

-0.88

0.16

-1.19

1.70

-0.45

1.87

0.26

-1.21

0.60

-1.45

-0.51

0.25

0.00

-0.52

-0.25

-0.12

-1.05

0.28

0.00

-0.27

-0.66

1.73

0.82

-0.32

0.92

-0.29

-1.57

-0.05

-0.38

1.90

3.47

-0.29

-0.21

0.05

3.00

-0.44

-0.82

-0.69

-1.12

0.23

-3.56

-0.56

0.00

-0.70

0.73

-1.35

0.21

-0.23

391,952

1,645,478

5,027,343

330,702

1,718,472

40,851

1,941,149

899,709

13,760

-

482,321

595,470

832,093

158,780

359,591

676,973

71,569

221,698

619,013

9,028,052

729,694

1,417,152

235,276

454,489

-

833,490

395,795

28,059

133,066

226,616

514,609

364,756

662,665

260,043

831,257

568,982

2,327,256

141,417

2,099,396

412,955

2,693,340

254,072

6,226,752

8,652,799

1,214,548

268,431

260,009

483,290

603,324

551,784

375,147

843,601

35,338

25,086

559,194

348,306

1,318,875

761,916

2,275,338

887,414

437,584

51,885

534,922

857,504

638,006

125,098

779,682

-

596,331

1,688,298

386,123

7,293,059

36,109

2,742,911

126,847

1,017,346

2,079,034

189,749

2,032,141

4,419,207

68,168

407,922

442,445

156,061

552,537

1,162,561

273,909

2,021,224

1,093,239

2,803,731

240,463

-

230,941

225,149

297,714

12,312

221,932

SAUDI ARABIA

Company Name Lt Price % Chg Volume

Saudi Re For Cooperative ReiSolidarity Saudi Takaful Co

Amana Cooperative InsuranceAlabdullatif Industrial Inv

Saudi Printing & Packaging CSanad Cooperative Insurance

Saudi Paper Manufacturing CoAlinma Bank

Almarai CoFalcom Saudi Equity Etf

United International TranspoHsbc Amanah Saudi 20 Etf

Saudi International PetrocheFalcom Petrochemical Etf

Saudi United Cooperative InsBank Al-Jazira

Al Rajhi BankSamba Financial Group

United Electronics CoAllied Cooperative Insurance

Malath Cooperative & ReinsurAlinma Tokio Marine

Arabian Shield CooperativeSavola

Wafrah For Industry And DeveFitaihi Holding Group

Tourism Enterprise Co/ ShamsSahara Petrochemical Co

Herfy Food Services Co

6.99

9.99

12.66

18.64

22.05

15.23

14.11

13.91

55.52

25.70

37.35

25.40

15.32

22.10

13.05

13.56

59.62

21.95

27.66

16.28

16.49

21.44

25.42

38.43

28.40

15.90

37.28

11.79

75.19

0.00

1.32

6.57

0.27

-3.42

0.00

1.15

0.00

-0.04

0.00

0.05

0.00

2.20

0.00

-1.14

-0.95

-0.03

-0.23

0.77

-0.31

0.43

0.28

0.87

0.16

-1.39

-0.44

-0.59

-1.67

-0.49

1,360,564

4,212,508

8,358,569

538,163

2,451,364

-

2,033,104

36,330,942

309,618

129,598

249,802

-

2,624,759

-

624,769

2,293,773

1,338,556

169,693

482,222

365,691

898,866

1,525,011

2,221,550

451,476

365,668

386,736

340,058

6,157,978

177,751

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 Group Kscc

National Consumer Holding CoAmwal International Investme

Jeeran HoldingsEquipment Holding Co K.S.C.C

Nafais HoldingSafwan Trading & Contracting

Arkan Al Kuwait Real EstateGfh Financial Group Bsc

Energy House Holding Co KscpKuwait Slaughter House Co

Kuwait Co For Process PlantAl Maidan Dental Clinic Co K

National Ranges CompanyAl-Themar Real International

Al-Ahleia Insurance Co SakpWethaq Takaful Insurance Co

Salbookh Trading Co KscpAqar Real Estate Investments

Hayat CommunicationsKuwait Packing Materials Mfg

Soor Fuel Marketing Co KscAlargan International RealBurgan Co For Well Drilling

Kuwait Resorts Co KsccOula Fuel Marketing Co

Palms Agro Production CoIkarus Petroleum Industries

Mubarrad Transport CoAl Mowasat Health Care Co

Shuaiba Industrial CoHits Telecom Holding

First Takaful Insurance CoKuwaiti Syrian Holding Co

National Cleaning CompanyEyas For High & Technical EdUnited Real Estate Company

AgilityKuwait & Middle East Fin Inv

Fujairah Cement IndustriesLivestock Transport & Tradng

International Resorts CoNational Industries Grp Hold

Marine Services Co KscWarba Insurance Co

Kuwait United Poultry CoFirst Dubai Real Estate Deve

Al Arabi Group Holding CoKuwait Hotels Sak

Mobile Telecommunications CoAl Safat Real Estate Co

Tamdeen Real Estate Co KscAl Mudon Intl Real Estate Co

Kuwait Cement Co KscSharjah Cement & Indus Devel

Kuwait Portland Cement CoEducational Holding Group

Bahrain Kuwait InsuranceAsiya Capital Investments Co

Kuwait Investment CoBurgan Bank

Kuwait Projects Co HoldingsAl Madina For Finance And In

Kuwait Insurance CoAl Masaken Intl Real Estate

Intl Financial AdvisorsFirst Investment Co Kscc

Al Mal Investment CompanyBayan Investment Co Kscc

Egypt Kuwait Holding Co SaeCoast Investment Development

Privatization Holding CompanKuwait Medical Services Co

Injazzat Real State CompanyKuwait Cable Vision Sak

Sanam Real Estate Co KsccIthmaar Bank Bsc

Aviation Lease And Finance CArzan Financial Group For Fi

Ajwan Gulf Real Estate CoKuwait Business Town Real Es

Future Kid Entertainment AndSpecialities Group Holding C

Abyaar Real Eastate DevelopmDar Al Thuraya Real Estate C

Al-Dar National Real EstateKgl Logistics Company Kscc

Combined Group ContractingZima Holding Co Ksc

Qurain Holding Co

85.00

60.00

186.00

88.00

140.00

385.00

37.00

218.00

22.50

43.00

530.00

335.00

420.00

650.00

435.00

208.00

230.00

43.50

32.50

34.00

0.00

65.00

21.50

120.00

15.00

43.50

770.00

510.00

54.00

0.00

38.00

0.00

23.00

0.00

50.00

690.00

12.50

20.50

71.00

57.00

184.00

270.00

94.00

69.00

55.00

150.00

204.00

0.00

22.50

90.00

465.00

32.00

75.00

0.00

54.00

0.00

108.00

160.00

98.00

80.00

106.00

100.00

43.00

64.00

200.00

285.00

35.00

50.00

35.00

40.00

0.00

91.00

500.00

25.00

76.00

156.00

30.00

114.00

104.00

104.00

176.00

56.00

59.00

0.00

350.00

0.00

560.00

30.50

375.00

79.00

1,000.00

194.00

0.00

0.00

86.00

340.00

540.00

39.00

300.00

71.00

0.00

53.00

29.00

34.00

130.00

46.00

46.50

0.00

74.00

25.50

35.50

39.00

208.00

32.50

28.50

42.50

95.00

69.00

25.00

0.00

14.00

78.00

780.00

43.00

0.00

1.19

0.00

-1.06

0.00

0.00

0.00

0.00

0.00

2.27

1.18

0.00

0.00

-1.18

0.91

0.00

0.97

-1.71

0.00

-1.52

-1.45

0.00

-1.52

-2.27

0.00

3.45

-4.40

-1.40

0.00

0.00

0.00

-2.56

0.00

-2.13

0.00

0.00

0.00

0.00

0.00

-1.39

7.55

2.22

0.00

0.00

-2.82

0.00

0.00

-0.97

0.00

-2.17

0.00

0.00

0.00

-1.32

0.00

-1.82

0.00

-1.82

1.27

0.00

0.00

0.00

1.01

0.00

1.59

-4.76

0.00

-1.41

0.00

0.00

0.00

0.00

0.00

1.01

0.00

0.00

-6.02

0.00

0.00

0.00

1.96

0.00

-1.75

-3.28

0.00

1.45

0.00

0.00

0.00

-1.32

0.00

0.00

0.00

0.00

0.00

0.00

1.49

1.89

0.00

0.00

-5.33

0.00

1.92

0.00

-1.45

-2.99

-1.08

0.00

0.00

0.00

10.87

0.00

0.00

0.97

-2.99

0.00

0.00

0.00

-6.76

0.00

0.00

-6.67

0.00

0.00

0.00

0.00

10,000

60,017

50,940

9,227

10,800

16,000

155,000

1,000

52,000

1,999,000

2,155

8,524

77,972

2,259,997

88

133,581

430,541

80,000

138,973

60,000

-

1,384,000

708,128

306,000

73,950

12,970,959

298,566

144

904

-

35,792

-

1,604,584

-

5,000

30,150

2,110

193,366

68,300

8,887,238

4,100

10

90

1,794,960

45,040

26,000

6,450

-

1,316,200

326,918

10

12,000

63,762

-

97,420

-

32,949

154,802

500

95

10,023

1,150

67,000

560,016

100,000

199

14,657,243

91

610,719

144

-

480,996

2,681,912

13,690

371,000

103,300

260,000

880,942

95

50,000

10,000

1,021,040

500

-

3,157,221

-

90

570,000

34,000

1,000

26,535

10,635

-

-

23,000

95,763

300,048

6,116,314

99,183

309,400

-

509,000

2,313,360

419,400

50,000

4,170,603

361,100

-

48,016

500

1,500

1,132,947

263,492

724,109

155,000

1,357,100

49,718

37,000

1,820,000

-

13,653,221

22,350

85

151,151

-

KUWAIT

Company Name Lt Price % Chg Volume

Voltamp Energy SaogUnited Power/Energy Co- Pref

United Power Co SaogUnited Finance Co

Ubar Hotels & ResortsTakaful Oman

Taageer FinanceSweets Of OmanSohar Power Co

Sohar PoultrySmn Power Holding Saog

Shell Oman Marketing - PrefShell Oman Marketing

Sharqiyah Desalination Co SaSembcorp Salalah Power & Wat

Salalah Port ServicesSalalah Mills Co

Salalah Beach Resort SaogSahara Hospitality

Renaissance Services SaogRaysut Cement Co

Port Service CorporationPhoenix Power Co Saoc

Packaging Co LtdOoredoo

OminvestOman United Insurance Co

Oman Textile Holding Co SaogOman Telecommunications Co

Oman Refreshment CoOman Packaging

Oman Orix Leasing Co.Oman Oil Marketing Company

Oman National Engineering AnOman Investment & Finance

Oman Intl MarketingOman Hotels & Tourism CoOman Foods International

Oman Flour MillsOman Fisheries CoOman Fiber Optics

Oman Europe Foods IndustriesOman Education & Training In

Oman ChromiteOman Chlorine

Oman Ceramic ComOman Cement Co

Oman Cables IndustryOman Agricultural Dev

Oman & Emirates Inv(Om)50%Natl Aluminium Products

National SecuritiesNational Real Estate Develop

National PharmaceuticalNational Mineral Water

National Hospitality InstituNational Gas Co

National Finance CoNational Detergent Co Saog

National Biscuit IndustriesNational Bank Of Oman Saog

Muscat Thread Mills CoMuscat National Holding

Muscat Gases Company SaogMuscat Finance

Majan Glass CompanyMajan College

Hsbc Bank OmanHotels Management Co Interna

Gulf StoneGulf Plastic Industries Co

Gulf Mushroom CompanyGulf Investments Services

Gulf Invest. Serv. Pref-SharGulf International Chemicals

Gulf Hotels (Oman) Co LtdGlobal Fin Investment

Galfar Engineering&ContractGalfar Engineering -Prefer

Financial Services Co.Financial Corp/The

Dhofar UniversityDhofar Tourism

Dhofar PoultryDhofar Intl Development

Dhofar InsuranceDhofar Fisheries & Food Indu

Dhofar CattlefeedDhofar Beverages Co

Construction Materials IndComputer Stationery Inds

Bankmuscat SaogBank SoharBank Nizwa

Bank Dhofar Saog

0.43

1.00

3.40

0.14

0.13

0.13

0.13

1.34

0.35

0.21

0.72

1.05

1.87

4.70

0.25

0.65

1.45

1.38

2.50

0.30

1.26

0.25

0.16

0.52

0.76

0.56

0.27

0.33

1.63

2.20

0.30

0.12

1.88

0.20

0.21

0.52

0.48

0.00

0.58

0.06

4.57

1.00

0.16

3.64

0.49

0.45

0.49

1.85

1.75

0.15

0.25

0.17

5.00

0.11

0.06

0.53

0.54

0.14

0.64

3.75

0.26

0.11

1.86

0.83

0.12

0.19

0.52

0.11

1.25

0.11

0.39

0.34

0.13

0.11

0.25

10.50

0.15

0.11

0.39

0.17

0.11

1.49

0.49

0.18

0.42

0.21

1.28

0.23

0.26

0.03

0.26

0.40

0.18

0.08

0.25

0.00

0.00

0.00

-1.41

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.19

0.00

0.00

0.00

0.00

-3.18

0.00

-1.19

-0.64

0.00

-1.56

1.82

0.00

0.00

0.31

0.00

0.00

0.00

0.00

0.00

-0.48

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-0.41

0.00

0.00

-1.92

0.00

0.00

0.00

0.00

0.00

0.00

-0.37

0.00

1.27

0.00

0.00

0.00

0.00

0.00

1.67

0.00

0.00

-1.77

0.00

0.00

0.00

0.00

-0.78

0.00

0.40

0.00

2.76

-1.74

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-2.94

0.00

0.00

0.00

0.00

0.00

-

-

-

5,650

-

5,000

-

-

-

-

-

-

-

-

105,220

-

-

-

-

1,005,483

124,723

183,200

542,763

-

100,000

5,397,392

309,874

-

8,682

-

-

-

-

-

10,000

-

-

-

8,700

97,820

-

-

-

-

-

-

66,000

-

-

700,000

-

-

-

-

4,199

-

255,595

-

40,000

-

142,500

-

-

-

26,633

-

-

155,000

-

-

-

-

293,042

-

59,200

-

122,184

1,076,964

-

-

-

-

-

-

-

15,000

-

-

-

360,991

-

536,224

299,326

576,347

302,000

OMAN

Company Name Lt Price % Chg Volume

Areej Vegetable OilsAloula Co

Al-Omaniya Financial ServiceAl-Hassan Engineering Co

Al-Fajar Al-Alamia CoAl-Anwar Ceramic Tiles Co

Al Suwadi PowerAl Shurooq Inv Ser

Al Sharqiya Invest HoldingAl Maha Petroleum Products M

Al Maha Ceramics Co SaocAl Madina Takaful Co Saoc

Al Madina Investment CoAl Kamil Power Co

Al Jazerah Services -PfdAl Jazeera Steel Products Co

Al Jazeera ServicesAl Izz Islamic Bank

Al Buraimi HotelAl Batinah PowerAl Batinah Hotels

Al Batinah Dev & InvAl Anwar Holdings Saog

Ahli BankAcwa Power Barka Saog

Abrasives Manufacturing Co SA’saff a Foods Saog

0Man Oil Marketing Co-Pref

3.68

0.53

0.30

0.09

0.75

0.27

0.22

1.04

0.15

1.55

0.43

0.08

0.06

0.31

0.55

0.22

0.24

0.06

0.88

0.21

1.13

0.10

0.23

0.18

0.70

0.05

0.86

0.25

0.00

0.00

0.00

-2.11

0.00

2.63

0.00

0.00

-2.60

0.00

0.00

0.00

-3.03

0.00

0.00

-3.14

-0.41

-1.69

0.00

0.00

0.00

-4.00

-1.29

0.00

0.00

0.00

0.00

0.00

-

-

-

28,730

-

608,602

3,500

-

379,272

14,365

750,819

-

250,829

-

-

916,230

111,500

255,000

-

1,000

-

115,000

904,670

-

-

-

-

-

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 Etf

National Takaful CompanyNational Marine Dredging Co

National Investor Co/TheNational Corp Tourism & Hote

National Bank Of Umm Al QaiwNational Bank Of Ras Al-Khai

National Bank Of FujairahNational Bank Of Abu Dhabi

Methaq Takaful InsuranceManazel Real Estate Pjsc

Invest BankIntl Fish Farming Co Pjsc

Insurance HouseGulf Pharmaceutical Industri

Gulf Medical ProjectsGulf Cement Co

Fujairah Cement IndustriesFujairah Building Industries

Foodco Holding PjscFirst Gulf BankFinance House

Eshraq Properties Co PjscEmirates Telecom Group Co

Emirates Insurance Co. (Psc)Emirates Driving Company

Dana GasCommercial Bank Internationa

Bank Of SharjahAxa Green Crescent Insurance

Arkan Building Materials CoAlkhaleej InvestmentAldar Properties Pjsc

Al Wathba National InsuranceAl Khazna Insurance Co

Al Fujairah National InsuranAl Dhafra Insurance Co. P.S.

Al Buhaira National InsurancAl Ain Ahlia Ins. Co.

Agthia Group PjscAbu Dhabi Ship Building Co

Abu Dhabi Natl Co For BuildiAbu Dhabi National Takaful C

Abu Dhabi National InsuranceAbu Dhabi National Hotels

Abu Dhabi National Energy CoAbu Dhabi Islamic Bank

2.03

2.00

2.57

3.45

1.39

1.10

0.86

1.41

3.85

1.35

1.05

4.10

1.13

3.25

0.82

2.80

0.59

90.00

1.17

6.26

0.98

5.03

0.64

4.50

3.45

5.40

4.79

8.45

0.85

0.55

2.20

1.58

0.81

2.26

2.40

0.91

1.02

1.14

3.55

12.10

1.95

0.77

17.90

6.05

6.00

0.52

2.02

1.35

0.80

0.91

2.22

2.61

4.46

0.34

300.00

5.00

2.25

60.00

7.32

2.94

0.50

5.05

2.64

2.69

0.55

3.80

1.50

0.00

0.00

1.47

0.00

0.00

0.00

-1.40

0.00

0.00

0.00

0.00

-3.42

-2.99

-1.20

0.00

-3.28

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.75

0.00

0.96

0.00

0.00

0.92

-0.63

0.00

0.00

0.00

1.11

0.00

0.00

0.00

0.00

0.00

-1.28

-0.83

0.00

0.00

-1.89

0.00

0.00

-9.09

0.00

0.00

-0.38

0.00

0.00

0.00

0.00

0.00

0.00

-2.27

0.00

8.70

0.00

0.00

-1.47

0.00

-2.06

1,854,214

-

-

75,553

-

-

-

4,410

-

-

-

-

2,087

412,025

600,000

-

5,158,026

-

-

-

-

-

-

-

100,000

44,061

-

373,068

894,196

5,753,284

397,821

112,902

-

-

1,000

5,000

-

-

-

953,155

-

13,548,835

1,402,533

-

-

967,933

-

-

28,000

1,500

-

4,233,470

-

-

-

-

-

-

146,500

-

313,500

-

-

255,000

1,022,403

18,440

UAE

Company Name Lt Price % Chg Volume

Zain Bahrain BsccUnited Paper Industries Bsc

United Gulf Investment CorpUnited Gulf BankTrafco Group Bsc

Takaful International CoTaib Bank -$Us

Seef PropertiesSecurities & Investment Co

National Hotels CoNational Bank Of Bahrain Bsc

Nass Corp BscKhaleeji Commercial Bank

Ithmaar Bank BscInvestcorp Bank -$Us

Inovest Co BscGulf Monetary Group

Gulf Hotel Group B.S.CGfh Financial Group Bsc

Esterad Investment Co B.S.C.Delmon Poultry Co

Bmmi BscBmb Investment Bank

Bbk BscBankmuscat Saog

Banader Hotels CoBahrain Tourism CoBahrain Telecom Co

Bahrain Ship Repair & EnginBahrain National Holding

Bahrain Kuwait InsuranceBahrain Islamic Bank

Bahrain Flour Mills CoBahrain Family Leisure Co

Bahrain Duty Free ComplexBahrain Commercial Facilitie

Bahrain Cinema CoBahrain Car Park Co

Arab Insurance Group(Bsc)-$Arab Banking Corp Bsc-$Us

Aluminium Bahrain BscAlbaraka Banking Group

Al-Salam BankAl-Ahlia Insurance Co

Ahli United Bank B.S.C

0.13

0.00

0.00

0.00

0.23

0.00

0.00

0.18

0.00

0.00

0.58

0.10

0.06

0.13

6.00

0.16

0.00

0.70

0.24

0.19

0.00

0.80

0.00

0.32

0.00

0.00

`

0.30

0.00

0.00

0.00

0.00

0.39

0.00

0.80

0.70

1.00

0.15

0.35

0.40

0.28

0.47

0.10

0.29

0.61

0.00

0.00

0.00

0.00

0.00

0.00

0.00

2.23

0.00

0.00

0.00

-1.02

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-3.23

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

31,500

-

-

-

89,920

-

-

250,394

-

-

34,200

86,226

30,080

200,000

5,600

21,986

-

40,434

2,516,127

58,048

-

8,858

-

16,105

-

-

-

50,740

-

-

-

-

-

-

10,900

50,000

50,941

44,167

50,000

855,000

37,200

78,400

200,000

143,988

851,058

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

30.00

28.00

405.00

184.00

108.00

99.00

210.00

0.00

33.50

0.00

24.50

305.00

80.00

730.00

69.00

94.00

0.00

47.50

1,060.00

350.00

0.00

33.00

60.00

1,180.00

100.00

31.00

38.50

140.00

50.00

79.00

17.00

74.00

36.50

250.00

900.00

77.00

99.00

55.00

24.00

78.00

160.00

305.00

91.00

0.00

1,300.00

96.00

350.00

56.00

360.00

430.00

75.00

480.00

37.00

0.00

45.50

660.00

2,280.00

0.00

37.00

0.00

0.00

1.25

0.00

5.88

0.00

0.96

0.00

-6.94

0.00

2.08

0.00

0.00

0.00

-1.43

0.00

0.00

-4.04

0.00

0.00

0.00

0.00

0.00

3.51

0.00

0.00

1.32

0.00

0.00

0.00

0.00

2.78

0.00

0.00

1.12

0.00

0.00

0.00

6.67

-1.27

0.00

0.00

0.00

0.00

0.00

5.49

0.00

0.00

2.86

1.18

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

910,615

945,576

94,461

1,966,068

1,093,772

89

207,830

-

8,337,244

-

3,000

128,240

15,500

9,797

616,500

93

-

240,000

10,656

1,200

-

19,699

435,000

2,234

80,000

3,041,784

2,834,116

2

250,753

23,518

159,549

284,090

788,020

115,500

52,719

1,122,450

10,000

54,500

1,906,725

51,000

37,597

95

695,382

-

4,400

5,012,785

1,200

1,776,500

2,500

25,000

50,000

898,491

606,408

-

3,000,000

19

2,967

-

820,010

KUWAIT

Company Name Lt Price % Chg Volume

7Gulf TimesThursday, May 19, 2016

BUSINESS

Apple IncMicrosoft Corp

Exxon Mobil CorpJohnson & JohnsonGeneral Electric Co

Jpmorgan Chase & CoProcter & Gamble Co/The

Verizon Communications IncWal-Mart Stores Inc

Pfizer IncCoca-Cola Co/The

Chevron CorpVisa Inc-Class A Shares

Home Depot IncWalt Disney Co/The

Merck & Co. Inc.Intel Corp

Intl Business Machines CorpCisco Systems Inc

Unitedhealth Group IncMcdonald’s Corp

3M CoNike Inc -Cl B

Boeing Co/TheUnited Technologies CorpGoldman Sachs Group Inc

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

Caterpillar IncTravelers Cos Inc/The

94.77

50.99

89.81

113.25

29.65

63.56

80.18

50.83

63.33

33.24

44.60

100.86

77.36

131.62

99.02

54.61

30.14

147.68

26.74

130.54

126.53

166.68

56.12

131.79

99.88

158.29

63.18

64.14

70.95

110.85

1.36

0.95

0.31

-0.51

-0.20

3.07

-0.55

-0.15

-2.71

0.63

-0.34

0.11

0.74

-0.29

-0.92

0.53

0.53

-0.22

0.32

0.76

-0.91

-0.67

-1.71

-0.58

-0.18

2.35

0.67

-0.60

-0.14

0.39

17,263,085

7,093,838

3,141,946

2,470,211

9,714,155

8,492,654

2,378,178

2,447,153

11,469,254

7,067,923

4,365,620

1,788,427

1,977,390

4,350,787

3,584,835

2,779,858

7,087,325

798,360

9,387,156

796,564

2,399,618

592,642

3,699,600

1,092,921

1,035,497

1,381,094

1,889,377

542,301

1,667,904

434,595

DJIA

Company Name Lt Price % Chg Volume

Wpp PlcWorldpay Group Plc

Wolseley PlcWm Morrison Supermarkets

Whitbread PlcVodafone Group Plc

United Utilities Group PlcUnilever Plc

Tui Ag-DiTravis Perkins Plc

Tesco PlcTaylor Wimpey Plc

Standard Life PlcStandard Chartered Plc

St James’s Place PlcSse Plc

Smith & Nephew PlcSky Plc

Shire PlcSevern Trent Plc

Schroders PlcSainsbury (J) Plc

Sage Group Plc/TheSabmiller Plc

Rsa Insurance Group PlcRoyal Mail Plc

Royal Dutch Shell Plc-B ShsRoyal Dutch Shell Plc-A Shs

Royal Bank Of Scotland GroupRolls-Royce Holdings Plc

Rio Tinto PlcRexam Plc

Relx PlcReckitt Benckiser Group Plc

Randgold Resources LtdPrudential Plc

Provident Financial PlcPersimmon Plc

Pearson PlcPaddy Power Betfair Plc

Old Mutual PlcNext Plc

National Grid PlcMondi Plc

Merlin EntertainmentMediclinic International Plc

Marks & Spencer Group PlcLondon Stock Exchange Group

Lloyds Banking Group PlcLegal & General Group PlcLand Securities Group Plc

Kingfisher PlcJohnson Matthey Plc

Itv PlcIntu Properties Plc

Intl Consolidated Airline-DiIntertek Group Plc

Intercontinental Hotels GrouInmarsat Plc

Informa PlcImperial Brands Plc

Hsbc Holdings PlcHargreaves Lansdown Plc

Hammerson PlcGlencore Plc

Glaxosmithkline PlcGkn Plc

Fresnillo PlcExperian Plc

Easyjet PlcDixons Carphone Plc

Direct Line Insurance GroupDiageo Plc

Dcc PlcCrh Plc

Compass Group PlcCoca-Cola Hbc Ag-Di

Centrica PlcCarnival Plc

Capita PlcBurberry Group Plc

Bunzl PlcBt Group Plc

British Land Co PlcBritish American Tobacco Plc

Bp PlcBhp Billiton Plc

Berkeley Group HoldingsBarratt Developments Plc

Barclays PlcBae Systems Plc

Babcock Intl Group PlcAviva Plc

Astrazeneca PlcAssociated British Foods Plc

Ashtead Group PlcArm Holdings Plc

Antofagasta PlcAnglo American Plc

Admiral Group Plc3I Group Plc

#N/A!

1,576.00

260.90

3,960.00

188.90

4,086.00

229.65

948.50

3,090.00

1,033.00

1,819.00

163.00

196.50

333.30

520.00

899.00

1,525.00

1,141.00

927.50

4,098.00

2,210.00

2,536.00

253.40

589.50

4,213.50

478.80

508.00

1,741.00

1,733.00

223.70

656.00

1,993.50

629.50

1,224.00

6,850.00

6,240.00

1,309.50

2,870.00

2,030.00

814.00

8,955.00

169.00

5,400.00

999.20

1,323.00

431.40

830.00

442.10

2,604.00

69.50

223.40

1,154.00

358.20

2,935.00

205.50

288.40

527.00

3,336.00

2,613.00

762.00

662.00

3,688.50

435.50

1,300.00

564.00

132.95

1,437.50

274.50

1,144.00

1,275.00

1,487.00

430.50

369.60

1,843.50

6,450.00

1,999.00

1,276.00

1,322.00

201.70

3,549.00

1,070.00

1,112.00

2,077.00

439.15

719.00

4,165.50

364.60

843.40

3,059.00

556.00

170.40

481.70

980.50

433.40

3,900.50

2,959.00

961.50

946.00

421.10

606.10

1,862.00

487.50

0.00

-0.76

-0.34

0.51

-0.21

1.90

1.17

-0.16

-0.53

0.39

0.39

-0.91

1.50

4.12

0.44

1.99

-1.42

-0.87

-0.64

-0.05

-0.67

1.24

-0.04

-1.26

0.08

1.03

1.09

-0.91

-1.08

4.29

-1.20

-1.99

-0.40

-0.57

0.28

-1.73

1.71

0.88

1.00

-0.37

0.90

1.26

0.75

-0.53

-1.56

0.70

0.00

2.89

0.77

3.30

1.45

-0.69

0.06

0.62

-0.44

-2.07

1.64

-0.33

-0.08

-2.18

-0.97

-0.86

0.21

1.25

-1.23

-2.60

-0.45

-1.26

-1.38

0.63

3.48

2.21

0.16

-0.67

1.02

-1.09

0.47

-2.07

-0.64

-0.81

-0.56

-2.71

0.05

-0.70

-0.55

-0.56

-0.46

-2.09

0.00

0.91

3.74

-0.95

0.51

2.92

-0.76

-0.70

3.67

1.94

-2.93

-3.59

-0.43

1.02

0.00

2,711,458

4,086,532

538,384

5,049,711

664,934

64,304,979

1,618,897

1,907,658

919,952

573,311

21,531,124

14,943,743

6,464,217

10,535,600

1,234,968

3,089,669

2,460,929

1,796,309

1,766,009

1,020,663

285,844

5,200,999

2,713,466

2,376,563

1,602,787

2,478,855

4,176,325

6,354,827

19,897,213

3,358,009

4,328,249

1,318,418

3,282,057

1,137,500

471,785

4,733,300

323,240

1,174,199

2,211,074

144,383

10,070,622

559,633

4,753,409

1,649,838

1,010,579

1,185,485

6,459,574

652,202

249,664,790

14,469,556

2,206,899

5,106,172

358,034

16,070,667

3,577,098

5,805,411

308,352

781,373

2,922,048

987,485

3,028,420

22,633,733

792,502

1,830,267

67,243,910

8,746,779

8,137,167

1,084,764

2,496,669

1,590,207

3,341,817

4,294,081

3,602,526

265,508

1,507,007

2,755,678

497,198

15,232,241

417,290

1,198,569

7,717,475

370,829

25,329,388

3,185,399

2,083,813

26,459,739

11,067,593

753,728

3,463,622

51,246,998

5,305,797

1,385,285

10,830,507

2,035,331

1,039,164

3,215,097

4,138,398

3,693,188

11,674,987

551,140

2,550,931

-

FTSE 100

Company Name Lt Price % Chg Volume

East Japan Railway CoItochu Corp

Fujifilm Holdings CorpYamato Holdings Co Ltd

Chubu Electric Power Co IncMitsubishi Estate Co Ltd

Mitsubishi Heavy IndustriesToshiba Corp

Shiseido Co LtdShionogi & Co Ltd

Tokyo Gas Co LtdTokyo Electron Ltd

Panasonic CorpFujitsu Ltd

Central Japan Railway CoT&D Holdings Inc

Toyota Motor CorpKddi Corp

Nitto Denko Corp

9,931.00

1,404.00

4,570.00

2,312.50

1,517.50

2,135.00

415.60

223.40

2,736.00

6,161.00

445.40

7,557.00

963.10

394.50

19,465.00

1,014.50

5,537.00

3,117.00

6,838.00

0.01

1.48

0.99

1.11

-1.04

1.28

-0.17

-0.13

-0.47

-1.79

-0.76

1.57

1.39

1.39

0.67

1.05

0.07

-2.14

-1.87

1,101,100

7,669,100

2,130,600

1,406,000

1,296,600

4,299,000

11,804,000

26,338,000

1,807,100

1,674,200

13,643,000

1,302,100

9,736,000

9,371,000

419,100

5,031,900

11,434,500

9,721,900

1,342,200

TOKYO

Company Name Lt Price % Chg Volume

Rakuten IncKyocera Corp

Nissan Motor Co LtdHitachi Ltd

Takeda Pharmaceutical Co LtdJfe Holdings Inc

Ana Holdings IncMitsubishi Electric Corp

Sumitomo Mitsui Financial GrHonda Motor Co Ltd

Fast Retailing Co LtdMs&Ad Insurance Group Holdin

Kubota CorpSeven & I Holdings Co Ltd

Inpex CorpResona Holdings Inc

Asahi Kasei CorpKirin Holdings Co Ltd

Marubeni CorpMitsubishi Ufj Financial Gro

Mitsubishi Chemical HoldingsFanuc Corp

Daito Trust Construct Co LtdOtsuka Holdings Co Ltd

Oriental Land Co LtdSekisui House Ltd

Secom Co LtdTokio Marine Holdings Inc

Aeon Co LtdMitsui & Co Ltd

Kao CorpDai-Ichi Life Insurance

Mazda Motor CorpKomatsu Ltd

West Japan Railway CoMurata Manufacturing Co Ltd

Kansai Electric Power Co IncDenso Corp

Sompo Japan Nipponkoa HoldinDaiwa House Industry Co Ltd

Jx Holdings IncNippon Steel & Sumitomo Meta

Suzuki Motor CorpNippon Telegraph & Telephone

Ajinomoto Co IncMitsui Fudosan Co Ltd

Ono Pharmaceutical Co LtdDaikin Industries Ltd

Bank Of Yokohama Ltd/TheToray Industries IncAstellas Pharma Inc

Bridgestone CorpSony CorpHoya Corp

Sumitomo Mitsui Trust HoldinJapan Tobacco Inc

Osaka Gas Co LtdSumitomo Electric Industries

Daiwa Securities Group IncSoftbank Group Corp

Mizuho Financial Group IncNomura Holdings Inc

Daiichi Sankyo Co LtdFuji Heavy Industries Ltd

Ntt Docomo IncSumitomo Realty & Developmen

Sumitomo Metal Mining Co LtdOrix Corp

Asahi Group Holdings LtdKeyence Corp

Nidec CorpIsuzu Motors Ltd

Unicharm CorpShin-Etsu Chemical Co Ltd

Smc CorpMitsubishi CorpNintendo Co Ltd

Eisai Co LtdSumitomo Corp

Canon IncJapan Airlines Co Ltd

1,242.00

5,466.00

1,035.00

508.00

4,734.00

1,478.50

329.50

1,282.00

3,446.00

2,938.00

28,585.00

2,980.00

1,676.00

4,749.00

906.10

427.90

733.40

1,841.00

518.80

525.50

562.90

16,265.00

16,275.00

4,571.00

7,274.00

1,963.50

8,573.00

3,710.00

1,660.00

1,321.00

6,012.00

1,337.50

1,765.00

1,844.50

6,644.00

12,660.00

998.10

4,077.00

2,928.50

3,211.00

434.80

2,298.00

2,613.00

4,759.00

2,481.00

2,726.50

5,071.00

9,170.00

0.00

943.30

1,503.50

3,710.00

2,944.00

3,867.00

361.30

4,499.00

414.20

1,448.00

625.30

6,010.00

168.60

462.20

2,632.50

3,872.00

2,678.50

3,063.00

1,222.50

1,516.50

3,628.00

68,300.00

8,371.00

1,189.50

2,236.00

6,317.00

27,090.00

1,920.00

16,130.00

6,649.00

1,132.50

3,103.00

3,852.00

3.03

1.35

-1.43

1.82

-1.29

1.20

1.07

0.16

3.42

-1.24

-0.26

1.50

-0.83

-0.21

8.09

4.75

-0.52

-0.62

1.11

4.25

-0.07

-0.73

0.53

-0.59

-1.13

0.38

-1.44

0.68

-0.63

1.93

-1.72

2.53

-0.51

-0.08

0.44

0.48

-1.47

-0.73

1.19

2.07

1.73

1.17

-9.37

-2.48

-0.44

1.43

-1.67

-1.40

0.00

0.04

0.23

0.13

2.81

0.21

4.57

-0.33

-0.31

-0.45

0.79

1.38

2.68

-0.22

0.42

-0.59

-1.11

0.59

3.95

-0.23

-0.03

-0.57

0.13

-1.78

0.09

0.08

-1.53

2.84

0.78

0.68

0.49

0.45

0.00

6,033,100

1,237,200

16,182,800

24,657,000

3,690,500

5,068,500

16,626,000

9,723,000

10,298,600

5,027,000

799,200

2,192,100

4,549,500

2,262,200

15,758,300

23,465,500

5,395,000

4,576,000

10,154,200

139,383,200

5,503,200

866,300

380,900

1,273,000

887,100

2,229,800

767,300

1,753,000

2,719,800

8,382,400

1,627,600

9,323,200

7,583,600

4,004,800

1,019,700

1,254,700

2,729,800

1,993,800

2,517,200

2,969,100

14,111,200

4,268,300

26,135,600

6,163,700

2,086,200

3,965,000

2,977,100

932,100

-

4,132,000

6,765,100

3,269,900

12,021,600

1,688,400

31,849,000

2,763,700

5,790,000

4,438,800

7,953,000

5,509,600

184,886,100

34,438,200

2,433,100

5,474,800

5,921,500

2,103,000

6,503,000

5,467,900

1,225,700

137,900

1,420,600

3,861,700

2,614,000

1,011,400

259,300

7,647,400

604,400

889,700

6,325,100

3,194,600

1,561,700

TOKYO

Company Name Lt Price % Chg Volume

Aluminum Corp Of China Ltd-HBank Of East Asia Ltd

Bank Of China Ltd-HBank Of Communications Co-H

Belle International HoldingsBoc Hong Kong Holdings Ltd

Cathay Pacific AirwaysCk Hutchison Holdings Ltd

China Coal Energy Co-HChina Construction Bank-H

China Life Insurance Co-HChina Merchants Hldgs Intl

China Mobile LtdChina Overseas Land & Invest

China Petroleum & Chemical-HChina Resources Beer Holdin

China Resources Land LtdChina Resources Power Holdin

China Shenhua Energy Co-HChina Unicom Hong Kong Ltd

Citic LtdClp Holdings Ltd

Cnooc LtdCosco Pacific Ltd

Esprit Holdings LtdFih Mobile Ltd

Hang Lung Properties LtdHang Seng Bank Ltd

Henderson Land Development

2.36

27.75

2.99

4.51

4.65

21.85

12.00

89.10

3.07

4.55

16.64

21.45

84.00

22.10

5.15

17.20

17.50

12.28

11.54

8.52

10.94

71.10

9.17

7.97

6.22

2.53

13.70

132.80

44.20

-2.88

-2.29

-0.99

-0.66

-3.33

-1.80

-1.80

-3.10

-1.60

-1.73

-0.95

-1.83

-1.98

-0.67

-1.15

0.23

-1.24

-1.92

-2.70

-2.18

0.37

-0.21

-0.65

0.00

-1.27

2.02

-2.28

-0.67

-1.67

18,280,933

2,698,291

187,849,393

26,745,832

21,360,390

11,872,211

2,240,701

5,716,897

8,154,015

274,563,136

28,283,507

2,748,122

13,981,070

15,227,775

76,893,663

1,502,502

13,786,826

4,068,054

13,169,915

29,167,724

18,545,592

3,828,347

75,214,565

2,596,424

2,159,352

11,702,421

4,924,343

1,304,682

2,831,781

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

14.36

179.90

48.50

0.00

3.85

4.25

38.65

7.05

5.30

33.55

73.20

11.28

87.10

81.45

161.10

41.50

-0.55

-1.64

-1.42

0.00

-1.28

0.00

-0.51

-0.56

-2.21

-1.32

0.07

-0.88

-1.41

-0.79

-1.10

-0.36

7,911,044

5,099,697

26,191,077

-

230,249,641

21,742,362

5,674,634

9,547,239

75,755,241

18,622,228

3,192,098

3,741,331

4,351,814

1,382,963

20,658,347

2,560,010

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

435.75

971.25

539.55

99.25

3,223.60

484.75

329.05

70.00

384.85

2,551.10

795.30

179.95

970.55

76.20

143.05

214.25

136.10

3,914.90

1,326.00

1,638.15

1,309.85

708.90

332.70

1,209.85

1,083.00

110.50

226.45

1,208.20

825.50

89.15

2,878.45

1,140.65

742.25

4,265.65

382.35

3,025.30

283.95

524.55

139.25

21,052.85

351.25

933.10

119.55

142.40

2,461.70

501.10

963.25

216.65

183.20

1,434.05

-2.12

0.13

-0.11

-0.80

-0.90

0.20

0.58

0.00

-1.24

-0.74

-0.58

1.75

0.14

3.32

-1.28

1.90

-0.66

-0.91

-1.19

1.56

1.45

0.00

0.67

-0.36

-0.13

-0.63

0.22

-0.79

-1.03

0.06

-1.84

-1.11

1.36

-0.39

-0.40

0.25

0.04

0.15

-0.68

-2.55

0.01

-1.29

-1.20

0.35

-1.79

-0.45

-0.66

-0.12

-0.03

-1.06

4,885,020

3,223,131

1,529,806

10,748,718

234,043

1,410,758

4,421,409

2,936,125

9,525,162

782,828

2,460,168

27,956,766

2,027,012

60,542,568

1,503,697

6,338,516

5,177,616

2,068,725

1,183,406

1,031,052

1,859,658

1,211,966

5,336,063

2,194,315

717,508

3,065,663

16,884,717

4,397,600

1,500,906

8,977,174

365,733

1,109,510

2,288,523

24,156

1,084,540

273,799

3,098,420

721,148

2,896,126

21,292

2,317,108

1,549,187

5,907,643

10,531,948

305,162

8,689,246

1,334,953

880,066

6,655,297

150,433

SENSEX

Company Name Lt Price % Chg Volume

WORLD INDICESIndices Lt Price Change

GCC INDICESIndices Lt Price Change

Dow Jones Indus. AvgS&P 500 Index

Nasdaq Composite IndexS&P/Tsx Composite Index

Mexico Bolsa IndexBrazil Bovespa Stock Idx

Ftse 100 IndexCac 40 Index

Dax IndexIbex 35 Tr

Nikkei 225Japan Topix

Hang Seng IndexAll Ordinaries Indx

Nzx All IndexBse Sensex 30 Index

Nse S&P Cnx Nifty IndexStraits Times Index

Karachi All Share IndexJakarta Composite Index

17,538.86

2,053.84

4,744.82

13,937.37

45,641.11

51,341.20

6,165.80

4,319.30

9,943.23

8,775.10

16,644.69

1,338.38

19,826.41

5,420.46

1,326.49

25,704.61

7,870.15

2,777.11

24,715.26

4,734.36

+8.88

+6.63

+29.09

+20.27

-231.07

+501.75

-1.97

+21.73

+53.04

+76.40

-8.11

+2.53

-292.39

-38.01

+1.26

-69.00

-20.60

-4.00

+77.30

+5.20

Doha Securities MarketSaudi Tadawul

Kuwait Stocks ExchangeBahrain Stock Exchage

Oman Stock MarketAbudhabi Stock MarketDubai Financial Market

10,009.95

6,737.40

5,363.10

1,105.56

5,952.46

4,311.27

3,285.06

-0.72

-2.39

-4.18

-2.54

-6.87

-13.96

-16.68

“Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on this data.”

CURRENCIESDOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI

DINARKUWAITI

DINAR

Traders work at the Frankfurt Stock Exchange. The DAX 30 closed up 0.5% to 9,943.23 points yesterday.

Europe markets edge up on positive sentimentAFPLondon

Stock markets switched higher yesterday as sentiment towards the possibility of a US rate hike

changed to positive, with investors awaiting a fresh glimpse into the minds of Federal Reserve policymakers.

Wall Street had fallen on Tuesday as strong US economic data fuelled talk of a rate rise as early as next month, with most Asian exchanges following its lead yester-day as did European markets initially.

Higher interest rates are generally not positive for stock markets as higher borrowing costs leave both companies and individuals with less money for other spending.

Moreover, there are concerns stocks are over-priced in certain markets.

But during trading yesterday “wor-ries that a US rate hike in June could bring down infl ated asset prices turned to optimism about the implications of higher interest rates for bank earn-

ings,” said analyst Jasper Lawler at CMC Markets.

“The turnaround in banking shares which have seen net interest margins compressed in the era of low (and neg-ative) interest rates off set weakness in commodity shares,” he added.

London’s benchmark FTSE 100 index ended the day essentially fl at, while both Frankfurt’s DAX 30 and the Paris CAC 40 each gained about half a percentage point.

Banking shares were big gainers.RBS was top on the FTSE-100 leader

board by jumping 4.6 % and Barclays climbed 3.7 %.

Both Commerzbank and Deutsche Bank gained 2.3 % in Frankfurt, while BNP Paribas rose 1.5 % and Societe Generale added 1.4 % in Paris.

Wall Street was also higher ap-proaching midday, with the Dow up 0.2 %, led by JPMorgan Chase with a 3.2 % gain.

Investors will later be scouring the minutes from the Fed’s April meeting for indications that a raise in US inter-

est rates could be back on the table at the June meeting as the markets begin to take more seriously the possibility of more than one rate hike this year.

Asian stock markets mostly fell after a two-day rally, taking the baton from Wall Street which had fallen overnight as strong US economic data fuelled talk of a rate rise as soon as next month.

In Asia, data revealed that the world’s number three economy Ja-pan expanded 0.4 % in the fi rst three months of the year, boosted by a pick-up in consumer spending.

The country’s benchmark Nikkei stock index spent much of the day in positive territory.

But the upbeat GDP fi gure was off set by fears it could allow the Bank of Ja-pan to delay any fresh stimulus.

In foreign exchange activity, the euro declined against the dollar.

In London, the FTSE 100 down 0.03 % at 6,165.8 points; Frankfurt - DAX 30 up 0.5% at 9,943.23 points and Paris - CAC 40 up 0.5% at 4,319.30 points at the close yesterday.

BUSINESS11Gulf Times

Thursday, May 19, 2016

ReutersTokyo

Suzuki says 16 Japan models aff ected by improper mileage testing; dis-crepancies do not apply to vehicles

outside Japan; Suzuki sees no impact on group operating results for now; com-pany shares end down 9%; Mitsubishi president quits over its scandal

Suzuki Motor Corp said it had used improper fuel economy tests for its cars in Japan but that proper testing subse-quently had shown the mileage data did not need amending, in a widening of a scandal that has already engulfed Mit-subishi Motors.

Mitsubishi, which admitted last month that it had manipulated fuel economy for four mini vehicle models, said yesterday its president Tetsuro Aikawa will step down to take responsibility for the scan-dal.

The admission prompted the auto-maker to agree to sell a one-third con-trolling stake to Nissan Motor Co, and Ja-pan’s transport ministry to ask domestic automakers to re-submit fuel economy readings on all their vehicles.

Suzuki, Japan’s No 4 automaker, said 2.1mn vehicles were aff ected but chief executive Osamu Suzuki told reporters that his workers did not intentionally use improper data.

“The company apologises for the fact that we did not follow rules set by the country,” he said.

Shares in Suzuki ended down 9.4% af-ter the company said it had used improp-er tests but before it briefed media.

At one point they fell as much as 15% to their lowest level since November 2013.

Suzuki specialises in mini vehicles, which have engines of up to 660cc and get preferential tax treatment under Jap-anese law.

It commands roughly one-third of the country’s mini vehicle market.

The automaker said it plans to contin-ue sales of its cars given that new read-ings had not deviated much from those previously submitted, adding that it did not see much impact on earnings for now.

The impact has been much greater on

Mitsubishi. Mitsubishi said yesterday that “shortening of time spent on R&D, and expectations that high fuel-effi cien-cy be achieved” led to data manipulation.

“There was no direct order from top management in this incident,” Mitsubi-shi chief executive Osamu Masuko told reporters.

“But top management did not have a fi rm grasp on the proceedings at the R&D department,” he said, adding there were several chances to stop its workers from

using improper testing methods but that they did not stop.

Emissions and fuel economy have come under increasing scrutiny from regula-tors globally after Germany’s Volkswagen admitted last year that it used “defeat devices” on 11mn diesel vehicles to lower emissions during tests.

France, which ordered tests on a ran-dom sample of about 100 diesel cars last year, said last month some vehicles made by Renault, Fiat, Mercedes, VW, PSA

Peugeot Citroen, Nissan, Opel and Ford failed to comply fully with its emissions regulations.

South Korea, which has tested 20 diesel vehicle models, said on Monday it would punish Nissan with a fi ne and a recall of its Qashqai diesel sport utility vehicles, accusing it of manipulating emissions.

Nissan denied the allegation. In the United States, the Justice Department is investigating Daimler, the maker of Mer-cedes vehicles, over emissions testing.

Suzuki says it used wrong mileage tests for Japan models

Japan’s economy returns to growthAFPTokyo

Japan sidestepped a recession after its economy grew in the fi rst quarter, preliminary data

showed yesterday, but eff orts to cement recovery in the world’s number three economy were gaining little traction.

Gross domestic product ex-panded by 0.4% between Janu-ary and March - or 1.7% at an an-nualised rate - after a contraction in the last three months of 2015.

A consumer spending rebound helped drive the better than ex-pected fi gures, but the leap year added another day of production - and spending - to the econo-my’s performance.

The fresh data will do little to buoy hopes for Prime Minister Shinzo Abe’s faltering growth blitz.

His bid to revive Japan’s once-soaring economy, dubbed Abe-nomics, was shaken by a blood-bath on equity markets at the start of the year and a resurgent yen which has taken a bite out of Japan Inc’s profi ts.

Local media have suggested Abe will delay plans to raise Ja-pan’s consumption tax over con-cerns it could damage the already fragile economy.

But the premier yesterday in-sisted his growth plan was mak-ing headway, and that no fi nal decision has been made on the levy increase.

“I will make the appropriate decision at an appropriate time,” he told reporters.

A consumption tax rise in 2014 - seen as key to helping pay down Japan’s enormous national debt - was blamed for ushering in a brief recession.

This week the government ap-proved a – ¥ 778bn ($7.1bn) ex-tra budget in response to April’s deadly earthquakes, which prompted factory shutdowns in southern Japan.

“But even if the government delays the tax hike, it still needs to set a course for getting pub-lic fi nances on a sound footing, which is not an easy job,” said Yoko Takeda, chief economist at Mitsubishi Research Institute.

“The economy is in a tough situation with the strong yen hurting corporate earnings, stalled wages and a lack of con-fi dence among consumers. There are going to be some tough times ahead.”

Yesterday’s fi gures came days before Japan hosts a meeting of the Group of Seven fi nance chiefs, followed by a summit of their leaders next week.

The fi nance group - includ-ing US Treasury Secretary Jack Lew and European Central Bank President Mario Draghi - con-verge at a hot springs town north of Tokyo, where two days of meetings kick off tomorrow.

Topping the agenda will be how the group of rich nations can help kickstart global growth, as the host struggles to light a fi re under its own economy.

Abe’s growth plan - big gov-ernment spending, central bank monetary easing and reforms to the highly regulated economy - initially appeared to bear fruit after he came to power in late 2012 elections.

The yen weakened sharply, which boosted Japanese export-ers’ profi ts and sparked a huge stock market rally.

But sustained growth has been elusive and Abe’s eff orts to overhaul the economy have been widely criticised as half-hearted.

Key to the plan is a massive monetary easing campaign from the Bank of Japan aimed at drag-ging Japan out of years of defl a-tion - a spiral of falling prices that held back growth.

In January the central bank shocked markets with a nega-tive interest rate policy designed to boost lending to people and businesses. But the move was widely criticised as a desperate bid to prop up Tokyo’s faltering economic plan.

The uptick in demand for durable goods such as cars and household appliances is good news, but the GDP fi gures sug-gest the BoJ’s rate policy was having little impact on the economy, said Shotaro Kugo, an economist at Daiwa Institute of Research.

“We don’t really see the policy working, as both private residen-tial and non-residential invest-ment (capital spending) shrank during that time,” he told AFP.

In April a closely watched BoJ survey showed sentiment among Japan’s biggest manufacturers dropped to its lowest level since Abe started his much-vaunted programme to boost growth.

The International Monetary Fund last month cut its growth forecast for Japan, and warned that infl ation would sink into negative territory this year.

China accuses US of ‘unfair methods’ in steel dumping probeReutersBeijing

The United States has employed “unfair

methods” during an anti-dumping investiga-

tion into Chinese cold-rolled steel products

and should rectify its mistakes as soon as

possible, China’s Commerce Ministry said

yesterday.

The United States said on Tuesday it would

impose duties of more than 500% on Chinese

cold-rolled flat steel, which is widely used for

car body panels, appliances and construction.

The ministry expressed “strong dissatisfac-

tion” with the ruling, and complained that the

United States was trying to protect its steel

companies by transferring its industry woes

to the world.

“The United States adopted many unfair

methods during the anti-dumping and anti-

subsidy investigation into Chinese prod-

ucts, including the refusal to grant Chinese

state-owned firms a diff erentiated tax rate,”

the ministry said in a statement posted to its

website.

“China urges the United States to strictly

obey World Trade Organization rules and

rectify its mistaken methods as soon as pos-

sible,” it added.

While a flood of cheap Chinese steel has

been blamed for putting producers out of

business, China has repeatedly denied its

mills have been dumping their products on

foreign markets, stressing that its steelmak-

ers are more eff icient and enjoy far lower

costs than their international counterparts.

China has also denied there are any

inducements in place that encourage steel-

makers to sell their products overseas, saying

trade flows are determined by the market.

In a separate statement faxed to Reuters,

the ministry said the US view of China as a

non-market economy meant it did not ac-

curately acknowledge the prices and costs

of Chinese companies when using alternate

country data to calculate dumping rates.

“When determining surrogate country

data, it meticulously selected data divorced

from the actuality of production for Chinese

enterprises, and even used data that was not

representative of international markets,” it

said.

When China joined the WTO in 2001, it

agreed to a clause in its accession protocol to

give trading partners the option to use a third

party’s prices to assess if it is exporting below

market value.

China has told WTO members that they will

have to drop the “discriminatory” methods

come December.

As China’s economy has slowed, the

government has pledged to give more rein

to market forces, though foreign business

groups and governments have expressed

disappointment at the speed of reforms.

The ministry said the United States had

ignored China’s “huge achievements in

reforming state-owned enterprises and

establishing a market economy” and denied

the “independent market status” of China’s

state firms.

Columns of steel are stacked inside a steel production factory in Kaohsiung. The US said on Tuesday it would impose duties of more than 500% on Chinese cold-rolled flat steel, which is widely used for car body panels,appliances and construction.

Suzuki Motor chairman and chief executive off icer Osamu Suzuki (left) and president Toshihiro Suzuki bow during a newsconference at the Land, Infrastructure, Transport and Tourism Ministry in Tokyo. The company said yesterday that shortening of time spent on R&D, and expectations that high fuel-eff iciency be achieved led to data manipulation.

Cranes are seen at an industrial area in Tokyo. Japan’s gross domestic product expanded by 0.4% between January and March - or 1.7% at an annualised rate - after a contraction in the last three months of 2015.

Japan carriers’ market values tumble $13.6bnBloombergTokyo

For Japan’s phone carriers, rising profits

may not be such a good thing.

That’s because earnings are growing so

fast, they’re attracting government scrutiny

that has spooked investors. Over Tuesday

and yesterday, NTT Docomo Inc, Nippon

Telegraph & Telephone Corp and KDDI

Corp saw their market values tumble by a

combined ¥1.49tn ($13.6bn) after an off icial

said the communications ministry plans to

step up the pressure for carriers to reduce

phone bills in light of their higher profits.

Those comments signalled Prime

Minister Shinzo Abe isn’t done pressuring

the $125bn-plus industry after an earlier

eff ort led to cheaper plans for only a limited

number of users and ironically, bolstered

carriers’ profits by bringing down handset

subsidies. Now, the government is seeking

to get companies to reduce phone bills for

a wider number of consumers, according to

the ministry off icial.

“This is a reminder that phone compa-

nies are in a regulated industry and we

must take the risk of policy changes into

account,” said Tatsushi Maeno, head of

Japanese equities at Pinebridge Invest-

ments Japan Co in Tokyo. “The more profit

they make, the more profit they may have

to give up, which is not a favourable situa-

tion for shareholders.”

Most carriers’ shares extended declines

yesterday, with KDDI dropping 2.1%, bring-

ing its 2-day decline to 5.6%, the most in

almost three months. The benchmark Topix

index was little changed. Docomo fell 1.1%

yesterday, while NTT slid 2.5% and SoftBank

rose 1.4%.

Minister of Internal Aff airs and Commu-

nications Sanae Takaichimay make a new

round of requests to carriers for cheaper

plans, according to the off icial, who asked

not to be named because the matter hasn’t

been made public. A ministry spokesman

declined to comment.

Investors have been spooked before by

the government. In September, Abe called

for lower mobile phone rates, prompting a

selloff that caused Docomo’s market value

to fall about ¥1.1tn over two days. KDDI lost

¥931bn and SoftBank Group Corp ¥510bn,

rounding out a ¥2.5tn rout by the nation’s

three largest wireless carriers.

In that eff ort, the government set up

a panel that issued a report calling the

companies’ price plans unfair and asking

them to cut handset subsidies, a suggestion

the industry embraced as it reduced costs.

The recommendations prompted a rebound

in the companies shares as investors bet

adjustments to price plans wouldn’t hurt

earnings much.

The government’s focus will now be to

widen the variety of lower-cost plans to

benefit more users, the ministry off icial said.

For example, the requests to carriers would

include shortening the number of years

required for users to qualify for pricing

plans geared toward “long-term” custom-

ers, according to the off icial.

Docomo has said it will introduce low-

rate pricing plans for long-term users in

June, which apply to users who’ve been

subscribing for more than four years, and

maximum discounts of ¥2,500 a month

to users who’ve been customers for more

than 15 years. KDDI and SoftBank are also

considering off ering new plans to reduce

user costs.

“We will consider price adjustments if the

ministry requests more,” Docomo spokes-

woman Hiroko Shimoyama said. “We will

continue to amend handset prices, and also

will adjust phone-bill plans one by one.”

BUSINESS

Gulf Times Thursday, May 19, 201612

China’s Midea makes $5bn bid for German fi rm KukaReutersFrankfurt/Beijing

Chinese home appliance maker Midea Group made an off er yesterday to buy German factory robot manufacturer Kuka AG, the

latest bid by a Chinese investor to gain control of cutting-edge German industrial technology.

The €115 per share off er values Kuka at around €4.5bn ($5.07bn) and represents a premium of 36% to Kuka’s share price of €84.41 at close on Tuesday. Shares in Kuka rose by over 30% on the news.

Kuka is one of the world’s largest producers of industrial robots and a poster child of Germany’s drive to upgrade its manufacturing sector to mas-ter the industrial internet.

It is the latest in a series of German industrial groups to be targeted by Chinese buyers as the world’s second-largest economy tries to make the transition from a low-cost factory location into a high-tech industrial hub.

Midea said it wanted to keep Kuka’s manage-ment intact and not delist the German company. Following a pattern set by Chinese suitors seeking to avoid disruption to better understand and adopt Western technology, it said it would not imple-ment a so-called profi t transfer and domination agreement.

“Kuka is in excellent condition today and we are committed to investing in KUKA’s employees, brand, intellectual property and facilities to fur-ther support the company’s development,” Midea chairman and chief executive Paul Fang said in a statement.

Midea said it aimed to expand Kuka’s know-how in robotics for general industry and logistics applications and open doors for better access to Chinese markets.

“One of the leading rationales for the deal is ris-ing labour costs. This means effi ciency becomes more important for growing our business and for the Chinese economy as a whole,” Andy Gu, vice president for Midea’s international business, told Reuters.

“We want to keep Kuka’s separate identity as a German company,” he said. “Where we can help Kuka is mostly in China. Kuka management has plans to grow in China. Given our meaningful footprint in China we can help them accelerate growth in terms of our customer base and supply chain.”

Other Chinese investment in Germany this year includes an agreement in January by a con-sortium led by ChemChina to buy industrial ma-chinery manufacturer KraussMaff ei Group for about $1bn.

In 2012, China’s Sany Heavy Industry bought German concrete pump maker Putzmeister for $698mn, while Weichai Power took a 25% stake forklift truck maker Kion in 2012.

Germany depends on manufacturing for a larg-er share of the economy than any of its western

European neighbours, with tens of thousands of family-owned businesses building the bedrock of its export-driven success.

The government wants to foster adoption of the fast-evolving industrial Internet, in which smart factory systems are becoming increasingly con-nected. Kuka has branded itself as one of the pio-neers.

Kuka shares jumped as much as 35.5% to a record high yesterday and traded 32% higher at 0743 GMT on the Frankfurt Stock Exchange.

Midea said it had a 13.5% stake in Kuka and was seeking to become the largest shareholder by rais-ing its stake beyond 30%.

Augsburg Kuka has three large shareholders in-cluding Friedhelm Loh, a German entrepreneur who owns 10%, and Voith Group which holds 25.1%.

Kuka said it had been informed by Midea that Midea would invite the major German sharehold-ers to stay invested and that it wants to preserve Kuka’s sites and staff .

Kuka would carefully assess the full takeover of-fer once it is available, it added.

An ally of chancellor Angela Merkel said Berlin would not intervene as German companies were also buying stakes in Chinese and other foreign companies.

“We live in a free market economy and expose ourselves to global competition,” said Michael Fuchs, deputy leader of Merkel’s CDU/CSU par-liamentary group in Germany’s lower house.

In terms of direct investment in property, plants and equipment, Germany’s private sector has spent almost €60bn in China, dwarfi ng the €2bn that Chinese groups have invested in Germany,

according to the Association of German Chambers of Commerce and Industry.

Jost Wuebbecke of Berlin-based China-focused think tank Merics, which is backed by the Schmidt family behind retailer Metro, said Chinese foreign direct investment in Germany was welcome in principle but Kuka was an exception because of its role in the industrial Internet.

“From a German point of view it’s not necessar-ily an advantage to share the technology because of Germany’s very considerable lead in this area,” Wuebbecke said.

Under German takeover rules, any shareholder gaining control of more than 30% in a listed com-pany must make an off er to all shareholders. Midea Group raised its stake in Kuka to 10.2% in Febru-ary, saying at the time that it wanted to further increase its shareholding.

Crisis for S Korea shipbuilders as golden age fadesAFPSeoul

After more than a decade of global domi-

nance, South Korea’s shipbuilders face an

unprecedented crisis that threatens the

very survival of one of the flagship indus-

tries of Asia’s fourth largest economy.

South Korea’s “Big Three” shipbuilders

were once considered the holy trinity of

Korea Inc - controlling nearly 70% of the

global market after seeing off their Eu-

ropean and Japanese rivals in the 1980s

and 1990s.

Year after year, the shipyards of Hy-

undai Heavy Industries, Daewoo Marine

and Shipbuilding, and Samsung Heavy

Industries churned out massive cargo

ships, oil tankers and off shore drillers for

shipping firms and energy giants around

the world.

But a prolonged slump in oil prices and

the global economic slowdown sapped

demand for tankers and container ships,

while overcapacity, regional rivalry and

competition from cheaper Chinese ship-

builders squeezed profit margins.

The three firms racked up a collective

loss of 8.5tn won ($7.4bn) last year, while

outstanding orders among all South

Korean shipbuilders hit their lowest level

in 11 years in February.

“Orders are drying up. We are faced

with an unimaginable situation at which

our dock may soon be empty,” Hyundai

Heavy chairman Choi Kil-Seon said in a

letter to employees in March.

“Even banks are so reluctant to lend to

us. This is the harsh, undeniable reality we

are facing today,” Choi said.

Hyundai - the world’s top shipbuilder

by sales - has reported a net loss for two

straight years, totalling 5tn won.

It posted its first net profit for more

than two years in the first quarter of 2016,

but Choi said that was largely thanks to

lower raw material prices and a weaker

Korean currency.

The company became “oversized and

complacent” during the boom years of

the 2000s, he said, urging “bone-crushing

eff orts” to compete against Chinese

shipbuilders that won more than half of

all new global orders this year.

“If we can’t compete against Chinese...

our jobs will be eliminated,” he said.

Yang Jong-Seo, analyst at the Export-

Import Bank of Korea, said the next two

years would be the “worst years ever”

for the shipbuilders as they embark on a

period of painful, state-led restructuring.

In return for state aid and debt exten-

sions, Seoul’s financial regulators have

pressed for more asset sales, mass layoff s,

pay reductions and streamlined business

plans.“I think the situation will hit the bot-

tom in the latter half of 2017 and revive

in 2018. The key question is whether the

shipbuilders can manage to stay alive

until then,” Yang told AFP.

“If they end up falling apart, I’m afraid

the pillar of the global shipbuilding indus-

try will really shift to China,” he said.

The knock-on eff ect of any such col-

lapse would be enormous

The southern port of Ulsan and Geoje

island - home to the three shipbuilders’

main docks - are the bedrock of a regional

economy that relies heavily on the indus-

try for tax revenues and consumer spend-

ing by nearly 200,000 workers.

Hyundai shed more than 1,000 jobs at

its Ulsan shipyard in 2015 and is report-

edly planning to lay off around 3,000

workers this year.

Their suppliers that hire tens of thou-

sands of workers are being pushed to the

brink of collapse.

The situation is even bleaker at the

number two shipbuilder Daewoo.

The firm has failed to win a single order

so far in 2016, after suff ering a record net

loss of 5.5tn won last year.

Daewoo - partially owned by the

state-run Korea Development Bank - has

proposed laying off 3,000 workers by

2019 but the government is demanding

an even bigger job cut.

“The whole city is a big community of

shipbuilding workers and their families.

And we are all feeling the pinch,” an of-

ficial at the Geoje city council told AFP.

More than two thirds of the city’s

250,000 population either work for Dae-

woo or Samsung or are family members

of those who do.

- Tears of Ulsan? - Most area busi-

nesses, especially restaurants and retail

shops, have reported a sharp double-digit

fall in sales and many are on the brink of

closure, said the city off icial who declined

to be named.

“Many people here bought a house and

a nice car and sent their kids to college

when things were good...and people are

worrying whether those days are coming

to an end,” she said.

The same sense of impending loss is

growing in Ulsan - a vibrant blue-collar

city that is the home to the Hyundai

Heavy shipyard as well as Hyundai Mo-

tor’s main plant.

Thanks to fat paychecks from Hyundai,

the city has boasted the highest per-

capita income in the country for years.

Some say it now faces the same fate as

the Swedish port of Malmo, once known

for its robust shipbuilding industry.

Malmo’s iconic, 128 metre-tall Kockums

Crane - a symbol of its manufacturing

industry - was sold to Hyundai in 2002.

The crane was nicknamed the “Tears of

Malmo” after residents reportedly cried at

the sight of its being shipped to Ulsan.

“Now we are shedding the ‘Tears of

Ulsan,’” said Jun Young-Do, the head of

the Ulsan city’s chamber of commerce.

Products of Midea are seen at a shop in Beijing. The Chinese home appliance maker off ered €115 per German robot maker Kuka share.

BloombergMumbai

Indian mutual funds target-ing government debt are los-ing appeal on bets the central

bank has little ammunition left after the most aggressive mon-etary easing since 2009.

So-called gilt plans saw a third month of outfl ows in April, the longest stretch in almost two years, Association of Mu-tual Funds in India data show. Reserve Bank of India governor Raghuram Rajan will cut the benchmark repurchase rate just once more this year, to 6.25%, and hold it there until the end of 2017, according to the median estimate in a Bloomberg survey.

A three-month rally in gov-ernment bonds has stalled as infl ation accelerated at a faster-than-estimated pace in April amid higher food and oil prices. Investors are shifting focus to the June-September monsoon rains, forecast to be above-normal this year after two suc-cessive droughts. The seasonal showers could boost farm out-put, raise incomes and spur demand, limiting the extent to which economic growth relies on central bank stimulus.

“When you’ve seen 150 basis points of rate cuts come in, it’s not really possible to be bullish in a big way,” said Killol Pandya, Mumbai-based head of fi xed income at Peerless Funds Man-agement Co, which oversees Rs9.9bn ($148mn). “Some more outfl ows may happen at a slower pace as investors probably are shifting to the products or funds that have a more expanded pro-fi le.”

Investors pulled Rs3.7bn from gilt funds in April, taking out-fl ows in the last three months to Rs20.2bn, AMFI data show. The broader category of fi xed-in-come funds attracted Rs314.5bn last month, while equity plans took in Rs40.4bn.

Rajan wants to limit price gains to 5% by March 2017 as he looks to monsoon rains to deter-mine whether he has room to add to fi ve interest-rate cuts since early 2015. He cut the repurchase rate to a fi ve-year low of 6.50% on April 5 and took steps to im-prove banking-system liquidity.

Consumer prices rose 5.39% in April from a year ago, a report showed on Thursday, exceeding the median 5.05% forecast in a Bloomberg survey and rebound-ing from March’s six- month low. The consumer food price index climbed 6.32%, after a 5.21 gain in March, led by a 34% surge in prices of pulses.

The monsoon, which ac-counts for more than 70% of In-dia’s annual rainfall, will arrive a week later this year, prolonging a drinking water shortage and delaying planting of crops from rice to cotton and sugar cane, the state weather department said over the weekend.

Asian policy makers are also taking into account uncertainty over the US Federal Reserve’s tightening and the impact of China’s slowdown. The Bank of Korea Friday left its key rate unchanged for an 11th consecu-tive month as a newly composed board opted to monitor eco-nomic data and the progress of corporate restructuring before acting. Indonesia paused its eas-ing last month.

Rajan rate cuts nearing end spur fl ight from Indian gilt funds

China’s surging crude oil imports for storage may easeBy Clyde RussellLaunceston, Australia

China appears to be stockpiling crude oil at a faster pace than the market had expected, taking advantage of low prices but perhaps also pulling forward its demand for imported crude.While China doesn’t disclose the amount of crude flowing into strategic storage, an estimate can be made simply by subtracting refinery runs from the total amount of oil available from both imports and domestic output.Domestic crude production dropped 5.6% in April from a year earlier to 16.59mn tonnes, equivalent to about 4.04mn barrels per day (bpd), the National Bureau of Statistics said on May 14.This was the lowest rate on a daily basis since July 2013, and it brought

the decline in the first four months of the year to 2.7% from the same period in 2015, with about 4.11mn bpd being produced.While lower domestic output in the world’s fourth-largest producer shows China’s oil firms aren’t immune to the pressures of low prices, the shortfall has been more than made up by sharply higher imports.Crude imports for the first four months of the year were 123.7mn tonnes, equivalent to about 7.46mn bpd, and 11.8 % higher than for the same period last year.Taking imports and domestic output together, total crude availability in China for the January to April period was 11.56mn bpd.Total refinery throughput was 2.9 % higher in the first four months at about 10.69mn bpd.This means that there was about 870,000 bpd of crude available that

wasn’t processed through refineries, meaning it most likely made its way into commercial and strategic storages.This means that China is filling storages at a considerably faster pace than had been expected in a Reuters poll of analysts conducted in December.According to the poll, China was seen adding 70mn to 90mn barrels to its Strategic Petroleum Reserve (SPR) in 2016, or about 245,000 bpd at the upper end of that range.If all the surplus crude has indeed flowed into storage, it implies that about 105mn barrels were added in the first four months alone, more than what analysts had expected for the entire year.It is worth noting that some analysts had expected greater flows into the SPR, with Energy Aspects predicting 150mn barrels for the year.It would now seem that even optimistic

forecasts may be exceeded, if China maintains the rate of crude imports directed for storage.China is currently filling its second phase of SPR, which has a capacity of 244.8mn barrels, and Thomson Reuters Oil Research and Forecasts expects this process will be completed by the end of the year.A planned third phase of undisclosed capacity is due for completion by 2020 as China works toward the goal of reserves equal to 90 days of imports.It would appear that China still has the capacity to add more oil to its SPR in the coming months, but questions must be asked whether it can do so at the same pace seen in the first four months.It’s possible that storage flows may ease back in coming months, resulting in slower growth in crude imports.This may already be happening, with Thomson Reuters Oil Research and

Forecasts provisionally assessing May imports at 29.47mn tonnes, down from the 32.58mn reported by customs for April.Higher oil prices may also help dissuade the Chinese from importing for storage, with Brent crude closing on Tuesday at $49.28 a barrel, some 77% higher than the lowest close of 2016 of $27.88 on Jan 20.Certainly, history suggests the Chinese tend to buy more when they deem prices to be cheap, and ease back when they believe prices have risen too far, too quickly.This doesn’t imply that China’s imports of crude oil are going to reverse and head into negative territory, rather it suggests that the rapid growth in imports seen in the first four months of the year may start to ease.

Clyde Russell is a Reuters columnist. The views expressed here are his own.

BUSINESS13Gulf Times

Thursday, May 19, 2016

AFPTokyo

Finance ministers and central bankers from the G7 meet in Japan this week for talks likely to high-

light a sharp divide over currency policy and how to breathe life into the wheez-ing global economy.

The group - including US Treas-ury Secretary Jacob Lew and European Central Bank President Mario Draghi - converge at a hot spring town north of Tokyo where two days of meetings kick off from tomorrow.

Host Japan is keen to win an endorse-ment for its position that fi scal stimulus is the way to spur global growth, as a rally in the yen hits exporters and accel-erates a slowdown at home.

But Tokyo’s threat of a market inter-vention to reverse the rise has put it on a collision course with other G7 nations, including the United States which re-jected suggestions the yen was too strong.

Washington recently put Japan on a new currency watchlist, along with China and Germany.

The G7 group - also including Brit-ain, Canada, France, Germany, and Italy - will use the meetings to hammer out their strategy for keeping a global re-cession at bay.

In April, the International Monetary Fund cut its forecast for world growth for the third time in six months, as a slowdown in China and other emerging economies raised fears that the worst was yet to come.

IMF chief Christine Lagarde is ex-pected to attend this week’s meeting in Japan. “There are many parts of the glo-bal economy that are uncertain,” Japa-nese Finance Minister Taro Aso said in Tokyo on Tuesday.

“How the G7 coordinates eff orts to deal with them will be a major subject of discussions.”

But fi nding a deal could be a chal-lenge. Premier Shinzo Abe’s pitch for large-scale stimulus spending got a cool response from German Chancellor An-gela Merkel and British Prime Minister David Cameron this month.

Merkel suggested Germany was al-ready doing its part to put the global economy back on track, pointing to the extra economic activity generated by

the arrival of one million refugees and migrants last year. Her Finance Minister Wolfgang Schaeuble this week pointed to reforms as the way forward, rather than focusing on more government spending and monetary policy.

“The strategy of stimulating the economy with borrowed money quickly loses steam - it’s like setting straw on fi re,” he told the Japan’s leading Nikkei business daily in an interview published Monday. “It’s important that we pro-

mote structural reforms and cut pub-lic debt, rather than use fi scal policy to stimulate growth.”

The fi nance minister meeting comes a week before a G7 summit in Ise-Shi-ma, a region between Tokyo and Osaka.

After that meeting, Barack Obama will go to Hiroshima in a hugely sym-bolic trip as the fi rst sitting US presi-dent to visit the nuclear bombed city.

Top US fi nance offi cial Lew - who is being joined at this week’s meeting by

Federal Reserve chief Janet Yellen - will take a strong stand against any moves that could set off a currency war in which countries devalue their units to gain a trade advantage, said a senior US Treasury offi cial.

An earlier G20 agreement saw mem-ber nations, including Japan, agree not to manipulate their currencies.

“Policymakers need to work togeth-er to ensure that weakness in global growth is not becoming entrenched,”

the US offi cial said. “Secretary Lew will emphasise that all G7 economies need to pull (out) the full set of economic policy tools including monetary, fi scal and structural policy to address” the global slowdown.

Terrorist fi nancing and off shore tax havens at the heart of the Panama Pa-pers investigation will also be discussed at the meeting, which is being held in a region that was badly damaged by Ja-pan’s 2011 quake-tsunami disaster.

Currency wars, stimulus rift in focus at G7 meet

India eyes oil-for-drugs deal with VenezuelaDr Reddy’s, Glenmark have invested heavily in Venezuela; India proposing to Caracas to make part of drug payments in oil; no agreement on barter deal yet, say Indian off icials; Venezuela facing pressure to pay bills from many sectors

ReutersMumbai/New Delhi

Indian offi cials say they have proposed an oil-for-drugs barter plan with cash-strapped Venezuela to recoup millions of dollars in pay-

ments owed to some of India’s largest pharmaceu-tical companies.

Several of India’s generics producers, led by the country’s second-largest player Dr Reddy’s Labo-ratories, bet heavily on Venezuela as they sought emerging market alternatives to slower-growing economies such as the United States.

But the unravelling of Venezuela’s social-ist economy amid a fall in oil prices has triggered triple-digit infl ation and a full-blown political and fi nancial crisis.

Unable to pay its bills, the country is facing se-vere shortages of even basic supplies such as food, water and medicines.

Dr Reddy’s wrote off $65mn in the March quar-

ter, which it said was almost all the money it was owed from Venezuela. Rival Glenmark Pharma-ceuticals Inc, another major investor, says it is due $45mn.

“The situation in Venezuela is very precarious... the government knows it needs to do something about the medicine shortage, that’s why it is will-ing to discuss such a deal,” one Indian offi cial told Reuters.“At this point, even if our companies get back 5 or 10% of the payment they are owed, they would be satisfi ed.”

Venezuela’s Health Ministry did not immedi-ately respond to a request for comment.

Like pharmaceutical companies globally - which used to enjoy a preferential exchange rate in Venezuela - Indian producers have been left badly stung by the collapse of the bolivar currency.

The Indian offi cials, who could not be named as they are not allowed to speak to the media, said the trade ministry had proposed a payment mecha-nism that would allow Venezuela to repay some of the amount owed with oil.

The proposal, seen by Reuters, would use the State Bank of India to mediate the transfer.

The plan is now awaiting approval on the Indi-an side from the fi nance ministry and the central bank, which regulates such payments.

India, one of the world’s biggest oil importers along with the United States and China, had simi-

larly elaborate barter deals with Iran, swapping rice and wheat for oil. The offi cials said Venezuela had been receptive to the plan “in principle”, but not made any concrete commitments yet.

Indian offi cials said a “high level” meeting with Venezuela was due in the coming months to dis-cuss the proposed deal.

“The fi nance ministry has assured us that the government is fully committed to it, but it will take time,” said PV Appaji, Director General of the Pharmaceutical Export Promotion Council of India, a body under the country’s commerce min-istry. India’s exports to Venezuela between April 2015 and February 2016 almost halved year-on-year to $125.5mn, compared with a year earlier.

Most of that was pharmaceutical products.The amount owed to Indian companies is mod-

est on a global scale - Novartis AG, Bayer AG and Sanofi SA took heavier hits when they agreed to take bonds from state-owned oil company PDVSA in lieu of cash, sold at a deep discount.

But Venezuela is India’s largest trade partner in Latin America and one of its key suppliers of oil.

A deal could also revive sales, albeit at a reduced level, at a time when Venezuela is desperately short of medical supplies, lacking as much as 80 % of what it needs to treat its population, according to a Venezuelan industry body.

Of course, many other providers in the oil, food

and trade sector are pressuring Venezuela to pay its debts at a time when the cash-strapped govern-ment is facing growing social unrest.

The Opec country’s oil production is also ex-pected to fall this year due to a lack of resources, a power crunch and maintenance problems, likely leaving it with less crude for export.

Both Dr Reddy’s and Glenmark have now stopped shipping to Venezuela.

But, neither have said they would pull out yet, as they continue to bet on the market’s future poten-tial. Per capita consumption of medicines in Ven-ezuela is high, and its healthcare market was grow-ing at a rate of about 20 % a year until 2014, when the economic crisis began.

Dr Reddy’s chief operating offi cer Abhijit Mukherjee said last week that Dr Reddy’s remained “very focused” on Venezuela, where it has signed deals with two government organisations.

“Only condition to the contract is that we will dispatch (products) only when we get either the LC (licensing certifi cate) or some advance,” he said.

Glenmark said it was evaluating its operations in Venezuela on a month-by-month basis.

“We are extremely encouraged that the Indian government is taking constructive steps to recov-er our money that is stuck in our own Venezuela subsidiary,” said chairman and managing director Glenn Saldanha in an e-mailed statement.

Off icers of Japan’s railway police set up a stand from where to survey passengers as part of announced special security measures ahead of the upcoming Ise-Shima G7 summit at Tokyo station. Finance ministers and central bankers from the G7 will meet in Japan this week for talks likely to highlight a sharp divide over currency policy and how to breathe life into the wheezing global economy.

China home price gains spread as small cities advance

BloombergBeijing

Home prices rose in the most Chinese cities in more than two years in

April, with gains in second-tier cities surpassing advances in larger hubs.

New-home prices excluding government-subsidised housing climbed in 65 cities, compared with 62 in March, among the 70 cities tracked by the govern-ment, the National Bureau of Statistics said yesterday. That’s the most cities since December 2013. Prices dropped in fi ve cit-ies in April, compared with eight a month earlier.

The latest fi gures signal that the government is gaining trac-tion in its eff orts to clear a glut of unsold homes in smaller cit-ies while encouraging curbs in top economic hubs including Shanghai and Shenzhen, where prices have surged rapidly amid stimulus measures and lower interest rates. Nomura Holdings Inc economist Zhao Yang said that the growth in home prices in fi rst-tier cities will slow fur-ther as the government winds back some of the liquidity, cre-ating a spillover eff ect to other regions.

“The current housing rebound is a consequence of accumulated credit loosening since the mid-dle of last year, which makes it unsustainable,” Zhao, the Hong Kong-based chief China econo-mist at Nomura, said in an inter-view. “Now that the credit policy shows signs of moderating, a correction in housing sales and prices could loom faster than everyone expects.”

The gains were led by the An-hui province city of Hefei, where prices rose 5.7%, Xiamen and Nanjing, according to the offi cial data.

Prices rose 3.1% in Shanghai, a slower pace than in March, and 2.3% in the southern business hub of Shenzhen, the small-est gain in six months. They rose 2.7% in Beijing and 2.4% in Guangzhou.

Real estate investments ex-pand 9.7% last month from a year earlier, the fastest pace since at least 2015, according to data compiled by Bloomberg from fi gures released Saturday. Investment in “non-key re-gions,” which the statistics bu-reau views as less economically important, surpassed 40 “key cities” for the fi rst time in 20 months, the bureau said.

New home sales soared 63.5% to 793.7bn yuan ($122bn) in April from a year earlier, driving a re-bound in real estate investments from the lowest level in 14 years.

The average new-home price rose 1.03% in April from a month earlier, the fastest pace in six years, according to Bloomberg calculations based on govern-ment data.

Still, increases may slow as the credit expansion that has helped fuel the rebound in the prop-erty market is moderating. The nation’s banks extended new loans of 555.6bn yuan in April, down from the median forecast of 800bn yuan in a Bloomberg survey. Medium- and long-term bank loans to households, most-ly residential mortgage loans, slightly dipped to 428bn yuan last month from 439.7bn yuan in March, according to the latest available data from the People’s Bank of China.

Chinese white goods makers eye global brands for market share and premium cacheReutersHong Kong

When Chinese white goods giant Haier

Group bought a 20% stake in Fisher &

Paykel Appliances in 2009, the heavily-

indebted New Zealand company was at

the mercy of its banks, hit by a depressed

housing market and an ill-timed factory

relocation overseas.

Its full acquisition three years later not

only helped keep Fisher & Paykel afloat,

but also put privately-owned Haier in con-

trol of one-fifth of Australia’s markets for

fridges, washing machines and dishwash-

ers, up from less than 5% in 2010.

Rivals such as Electrolux AB and LG

Electronics Inc lost market share in vari-

ous kinds of products during the period,

according to data from Euromonitor.

Haier’s advance in Australia, largely

fuelled by its own deep pockets, may be

an indication of how it could stir up the

US market after its deal to buy General

Electric Co’s appliance business for $5.4bn

in January.

Under Haier control, Fisher & Paykel

has been able to do large product

launches and its research and develop-

ment budget has increased, Carnegie

Investment Bank said in a recent note.

Carnegie said it expected Haier will use

the same strategy in the US market.

The group’s global R&D spending

jumped to 3.05bn yuan ($467mn) in 2015,

a rise of 53 % since 2012.

Qingdao Haier Co Ltd, the publicly

traded core subsidiary of the Chinese

group, has spent 9.7bn yuan since 2011 in

acquiring home appliance assets, accord-

ing to its annual report.

Haier is not alone.

Major Chinese white goods makers

such as Hisense Electric Co and Midea

Group Co Ltd, have been on an overseas

spending spree this year, as they seek to

snap up foreign brands to tap faster-grow-

ing markets as growth slows at home.

“Access to other markets helps them

find new sources of growth as the

domestic market slows,” said James Roy,

associate principal of Shanghai-based

China Market Research Group.

“It’s also an opportunity to gain ad-

ditional know-how to succeed in China,

where competition is becoming fairly

intense.”

For rivals such as Whirlpool Corp,

Electrolux, LG and Samsung Electronics –

some of the biggest names it will come up

against in the United States - one aspect

of Haier’s rise in Australia will give some

cause for comfort.

Despite integration of their sales, lo-

gistics and customer care operations, the

deal has yet to lead to larger market share

gains for Haier’s own brand, highlighting

challenges the group faces as it seeks to

build market share in the mid-tier seg-

ment of the market.

“The high-end market is the weak spot

for Chinese home appliance makers,” said

Juliette Liu, analyst at Yuanta Research in

Taipei. A search on Australian home appli-

ance retailer The Good Guys has Fisher &

Paykel on the top line of its listed brands,

while Haier’s own brand is nowhere to

be seen.

Haier did not respond to a request for

comment about its strategy in Australia.

“There have not been any questions

about that brand,” said Mitch Konno, as-

sistant store manager at a Sydney outlet

of privately-owned whitegoods chain

Bing Lee, which carries Fisher & Paykel

products but not Haier.

“Fisher & Paykel is the more well

known brand and I don’t think consumers

know they’re the same company,” added

Konno. A Sydney outlet of The Good Guys

was displaying just one Haier clothes

washer among the 50 diff erent machines

it was trying to sell during a recent visit by

a Reuters reporter.

Floor staff for the company said they

were not permitted to comment.

China’s top domestic players, including

Haier, Hisense, Midea, Gree Electric Appli-

ances Inc and Joyoung Co opened their

wallets to fund this overseas push.

Since the start of 2014, they spent over

$31bn on deals, a nearly six-fold increase

from the $5.4bn recorded between 2010

and 2013, according to Thomson Reuters

data.

Latest deals include Midea’s $473mn

purchase of Toshiba’s white goods busi-

ness, and Hisense’s acquisition of Sharp

Corp’s TV factory in Mexico.

Yesterday, Midea said it had off ered to

buy German industrial robots maker Kuka

AG in a deal that values Kuka at around

€4.5bn. More deals are likely to follow, as

some global players exit the market amid

growing competition from the low-cost

Chinese manufacturers, who are also

under pressure from the government in

Beijing to improve product quality and

standards.

BUSINESS

Gulf Times Thursday, May 19, 201614

Pay rule may give BlackRock a big recruiting boost over JPMorganBloombergWashington

Getting paid to manage money may soon be less restrictive at BlackRock than at JPMorgan

Chase & Co under a US proposal that could make it harder for Wall Street banks to compete for talent.

Sweeping compensation rules re-leased by six federal agencies last month reserve the toughest con-straints — including bonus deferrals and long-term clawbacks — for fi nan-cial fi rms with huge balance sheets consisting mostly of their own assets. Since fi rms like BlackRock primarily handle client money, their fund man-agers would face less-severe limits than someone doing similar work in-side a giant bank.

If enacted as-is, the pay rules could hurt Wall Street lenders that have been trying to grow their wealth manage-ment businesses since the 2008 fi -nancial crisis. Any diffi culties Morgan Stanley, Bank of America Corp and Goldman Sachs Group face in recruit-ing and retaining employees could benefi t Pacifi c Management Invest-

ment Co, Vanguard Group and Fidel-ity Investments. “They keep making it more diffi cult to be a big bank,” said Oliver Ireland, a partner with law fi rm Morrison & Foerster in Washington. It doesn’t make sense to treat a bank em-ployee diff erently than one who does similar work in an independent fi rm when the risks they pose to the system “may be identical,” he said.

Lawmakers put bonus-pay restric-tions in the 2010 Dodd-Frank Act in response to concerns that incentive-based compensation packages spurred Wall Street executives to take ill-fated risks that contributed to the economic meltdown. The plan endorsed by agen-cies including the Securities and Ex-change Commission and the Federal Reserve applies to all fi nancial fi rms with more than $1bn in assets, separat-ing them into three tiers based on size. It targets them with a range of limits for senior offi cers and signifi cant risk tak-ers — those who can aff ect their com-pany’s bottom line.

At the biggest fi rms with more than $250bn in assets, top offi cials would have 60% of their bonuses deferred for four years. At fi rms between $50bn and $250bn, half of bonuses would be

deferred for three years for high-level offi cers. Lesser restrictions apply to smaller fi rms.

More worrisome for the industry may be a provision that allows compa-nies to cancel or take back money for up to seven years after bonuses vest in cases where misconduct is found.

Of the 669 registered investment advisers subject to the rule, the SEC es-timated only 18 would face the tough-est level of regulation. Many of those are inside banks, and even the world’s largest money manager, BlackRock, doesn’t have enough proprietary assets to put it in the top tier.

Money manager Franklin Resources, which runs a $743bn mountain of mu-tual-fund investments, has only about $16bn of its own assets. And private-equity colossus Blackstone Group LP manages $344bn, while the company itself has just $22bn. Even giant hedge funds — recently fl agged by US regu-lators as deserving more scrutiny for their hefty leverage — would avoid most of the new limits.

Delaying bonuses is already com-mon on Wall Street, though not all fi rms defer them for as long as the four years proposed by regulators. For asset

management, a review of companies’ disclosures in regulatory fi lings shows broad similarities between pay prac-tices at banks and those at independent fi rms.

The prospectus for the $29.4bn BlackRock Strategic Income Oppor-tunities Portfolio fund says pay con-sists of base salary and a discretionary amount linked to the company’s overall performance and the investment re-turns of an employee’s portfolio. JP-Morgan’s Core Bond Fund, which man-ages $30bn, off ers salary supplemented by a bonus, with as much as 60% of the incentive compensation deferred for unspecifi ed periods.

The pay-rule proposal represents yet another tax on big banks for being big, said Ireland. He said it adds to a long list of measures targeting Wall Street since the crisis, including tailored capital de-mands and a ban on banks trading with their own money.

Spokesmen for JPMorgan, Gold-man Sachs, Morgan Stanley and Bank of America declined to comment on the potential impact of the rules, as did spokesmen for the SEC and the Fed.

Industry complaints are unlikely to get a sympathetic hearing from

regulators responsible for imple-menting Dodd-Frank. Government offi cials have long argued that the biggest, most complex banks deserve the toughest rules, because if they go down, they can cause widespread eco-nomic damage.

US agencies are lagging behind their overseas counterparts in imposing pay caps. The European Banking Author-ity moved two years ago to ban bonuses of more than twice an employee’s base pay, leading companies to shift more compensation to salary and forcing the regulator to fend off eff orts to skirt the limits. An eff ort last year to extend bonus limits to asset managers has sparked widespread industry criticism.

Companies aff ected by the US rules might be able to sidestep the stiff est restrictions if they can slice money-management units away from their banking operations and squeeze assets down below $1bn, said Marc Trevino, a partner at Sullivan & Cromwell in New York who specialises in pay issues. If they can’t do that, they might have to boost compensation to stay competi-tive in hiring, he said.

“They may have to pay more, and they may really have to sell the stability

of the pay as a positive feature,” Trevino said. The regulators acknowledged the diffi culties their rule might raise for subsidiaries — which would include asset-management units — and how it might hurt their ability “to compete for managerial talent with stand-alone companies of the same size.” The pro-posal suggested the fi rms might have to pay people more to make up for the stricter requirements, or even spin off the subsidiaries.

Big banks have long competed with independent money managers for top talent, but the rivalry has grown more intense in the wake of a crisis and re-covery that has left banks with tattered reputations and fewer opportunities for growth.

Asset managers have become espe-cially valuable for banks in recent years, bolstering profi t margins with their steady fee-based income as fi rms face pressures on lending and trading rev-enue.

If the major provisions of the rule survive through months of public com-ment and revisions, the fund manag-ers bringing in those fees will have to decide whether it makes sense to keep working at banks.

UK labour market coolsas Brexit vote loomsBloombergLondon

The UK jobs market showed signs of cooling in the fi rst quarter as Britain prepares for an increasingly bitter ref-

erendum on its European Union membership.The number of people in work rose by

44,000, less than a quarter of the gain seen at the end of 2015, the Offi ce for National Statis-tics in London said yesterday. Unemployment fell 2,000, leaving the jobless rate at a decade-low 5.1%, as forecast by economists. The em-ployment rate edged up to 74.2%.

There were also few signs of wage pres-sure. Annual pay growth excluding bonuses

slowed to 2.1% from 2.2% in the three months through February. Total pay infl ation edged up to 2% from 1.9%.

The report adds to signs that fi rms are putting hiring and investment on hold as polls suggest the June 23 Brexit vote could be close. Job vacancies fell 18,000 to 745,000 in the three months through April, the fi rst decline since the second quarter of last year. Economic growth slowed in the fi rst quarter and recent surveys point to a further loss of momentum. ONS statistician Chris Freeman said there is evidence that the jobs market “could be cooling off .”

Even without the referendum, the labour market might have struggled to maintain the performance seen in the last three months of

2015, when employers added almost 200,000 people. Slowing global expansion took its toll on manufacturers in the fi rst quarter. At the same time, labour shortages and a new higher minimum wage in April mean fi rms may now be looking to boost effi ciency rather than staffi ng levels.

The Bank of England said in a monthly re-port yesterday that there’s “some evidence of businesses delaying investment expenditure decisions” because of EU vote uncertainty.

“The momentum of job creation has eased in recent months and we still haven’t seen lift-off for wages,” said Ian Stewart, chief economist at Deloitte. “‘Real wage growth has slowed in the last year, a development that represents a real risk to the consumer-

led recovery.” The increase in employment in the first quarter was just sufficient to absorb an extra 42,000 economically ac-tive people and the number of unemployed dipped as a result. Jobless benefits, a nar-rower measure of unemployment, fell 2,400 in April and the jobless-claims rate re-mained at 2.1%.

With infl ation still far below the BOE’s 2% target, policy makers are expected to keep the key rate at 0.5% until early 2017, the median forecast in a Bloomberg survey shows.

Much will depend on the outcome of the referendum and on whether an anticipated pickup in wages is matched by productivity growth, which has been puzzlingly weak since the fi nancial crisis.

An employee inspects bricks at the Forterra Building Products brickworks near Peterborough, UK. The number of people in work rose by 44,000, less than a quarter of the gain seen at the end of 2015, the Off ice for National Statistics in London said yesterday.

Deutsche Bank shareholders set to pressure chairmanReutersFrankfurt

Deutsche Bank’s chairman faces sharp

criticism at the bank’s annual general

meeting today, as shareholders consider

launching an investigation into manage-

ment’s response to scandals that have cost

it billions of euros in fines.

The meeting will give investors, infuri-

ated by shrinking profits and a dramatic

fall in the bank’s stock price, an opportu-

nity to challenge Paul Achleitner’s actions

since he took over as chairman in 2012.

Shareholder advisory groups ISS and

Glass Lewis have recommended investors

back a shareholder motion for a probe

into whether fines for wrongdoing were

higher at Deutsche because management

obstructed or misled investigators.

Last year, the United Kingdom’s Finan-

cial Conduct Authority fined Deutsche for

the manipulation of lending benchmarks

Libor and Euribor, saying it had increased

the penalty because the bank had ‘repeat-

edly’ misled it.

The meeting also comes weeks after

the sudden resignation of a non-executive

director at Deutsche, Georg Thoma, who

was investigating earlier scandals but left

after coming under public fire from fellow

directors for being overzealous.

“I want to know what substance these

allegations have,” said Klaus Nieding from

retail investor association DSW.

One large investor, who spoke on

condition of anonymity, said that although

shareholders were unlikely to demand the

chairman go immediately, it was possible

that Achleitner could leave later this year.

“Achleitner will likely prevail at this

year’s AGM, but I would not be surprised

if he is replaced some time later this year,”

the investor said.

“He’s a good organiser, very consensus-

oriented.

But the bank has been in a permanent

crisis mode for a long time and needs

someone who puts his foot down,” he

said, adding that Achleitner was seen as a

member of the old guard and responsible

for the bank’s current condition.

A second investor said that while the

supervisory board’s choices had often been

unsatisfactory, sudden change could back-

fire. “If we kill the supervisory board now,

that would further destabilise the bank,” he

said.”That would be a step backwards.”

However Deutsche’s second largest in-

vestor, the Qatari royal family, has recently

backed Achleitner.

In a magazine interview last month,

Achleitner himself said that no large

shareholder had demanded he step down,

adding that he would run for another term

if there were an election this year.

Deutsche bank declined to comment

ahead of yesterday’s AGM.

One of Deutsche’s biggest problems is

litigation following a series of scandals.

The bill for fines and lawsuits since 2012

has already hit €12.6bn.

Deutsche paid more than $3bn in fines

alone for manipulation of interbank rates

such as Libor. Its chief executive, John

Cryan, who took on that role less than one

year ago, has embarked on an overhaul,

replacing top management, fast-tracking

the settlement of legal action and cutting

costs.

“We are giving Cryan the benefit of the

doubt,” said a large investor.

Shareholders will be asked to approve

executives’ and supervisory board mem-

bers’ performance.

Although a standard item at German

shareholder meetings that does not re-

quire a response from management, a low

approval rate can trigger change.

EU lendsreprieve toSpain andPortugalon defi citsReutersBrussels

Spain and Portugal received unexpected re-prieve to meet the EU limits on public defi -cits yesterday as Brussels delayed a decision

to slap fi nes against the rule-breakers until July.The delay put off a potentially embarrassing

decision for Spain until after elections on June 26 and gave more time for a new government in Por-tugal to get on its feet.

Infl icting penalties against an EU member state for public overspending would have been an un-precedented step by the European Commission, the bloc’s executive arm.

At the urging of Germany, the commission won powers to monitor national budgets during the eurozone debt crisis when overspending in mem-bers of the single currency such as Greece and Spain nearly destroyed the euro.

“We have concluded that this is not the right moment economically or politically to take this step,” European Economic Aff airs Commissioner Pierre Moscovici told a news briefi ng in Brussels.

“(In Spain) we do not have in front of us a gov-ernment capable right now of taking the neces-sary measures,” Moscovici, a former French fi -nance minister, said.

For the eighth consecutive year, austerity-wea-ry Spain has overshot its fi scal targets, making it one of the worst performers in the eurozone.

But Spain’s acting Prime Minister Mariano Ra-joy said yesterday he was eyeing more tax cuts if re-elected, in defi ance of the EU rules on running up public defi cits.

Spain’s defi cit came in at 5% of gross domestic product last year, far higher than the 4.2% initially promised to Brussels and above the 3% limit set by EU rules.

Madrid has also raised its public defi cit target this year from 2.8% of GDP to 3.6%, which means Spain will once again overshoot the limit set by Brussels. “It is unacceptable that the commission caved to the lobbying by Madrid and Lisbon and off ered the delay,” said Markus Ferber, a German MEP from the right-of centre EPP party. “Spanish elections are not a valid argument,” he said, warn-ing that “we can always fi nd a reason not to act”.

Spain is gearing up for another election on June 26 — the second in just six months after bickering parties failed to reach an agreement on a coalition government following inconclusive polls in De-cember.

Bailed-out Portugal, meanwhile, will see its public debt hit 130% of GDP, over double the EU limit of 60%.

BUSINESS15Gulf Times

Thursday, May 19, 2016

Hewlett Packard Enterprise makes $100mn bet on startupsBloombergSan Francisco

Meg Whitman, chief executive offi cer of Hewlett Packard En-

terprise, sat down with her top lieutenants last month at the Palo Alto headquarters to eval-uate a technology storage com-pany and a data-centre-tools startup. She analysed product details, asked about capital expenditures, and wondered about energy effi ciency. The businesses, though, aren’t the billion-dollar acquisition tar-gets that her company has been known for. They’re startups hoping to win investments from HPE’s venture capital arm.

Putting money into start-ups is a way for the company to contend with new technolo-gies from rivals like Amazon.com and Google. It’s also an ef-fort to end a checkered spend-ing pattern on acquisitions in the past decade. The business is still making purchases — it acquired Aruba Networks for roughly $3bn last year—but venture investments provide an opportunity to make cheap bets on promising companies. HPE’s VC arm aims to do about 10 to 12 deals annually and has already closed a couple this year.

“The stakes have gotten very high for them,” said Crawford Del Prete, an analyst with IDC. “It’s just a low-risk way to see if those companies play with where HP’s strengths are.”

The Hewlett Packard Ven-tures program, also known as Pathfi nder, is targeting startups that focus on big data, security, and the cloud and data centre. Lak Ananth, managing director of the group, said it intends to invest approximately $100mn this year. That would roughly match what it gave to startups in 2015, its fi rst full year. The company might invest $5mn to $10mn in an expansion-stage round—and potentially invest more in later rounds, according to Ananth.

Whitman is personally in-volved. Every quarter she hosts “Coff ee With Meg” gatherings, listens to presentations from startups, asks pointed ques-

tions, and helps decide who will get the company’s money. Her engagement has been key for Florian Leibert, CEO of Meso-sphere, a data-centre software provider that raised $73.5mn in March, led by HPE. “That was a big reason why we were really excited,” he said. “She contin-ues to be really responsive.”

Whitman’s VC push comes after witnessing huge writ-edowns that cost the company more than $15bn early in her tenure. In 2011, under Whit-man’s predecessor Leo Apoth-eker, HP announced it would spend $10.3bn on British soft-ware maker Autonomy Corp A year later the company said it

was writing down about 85% of Autonomy’s value. Also in 2012, it said it would write down about $8bn after purchasing Electronic Data Systems four years earlier.

In November, HP underwent a massive corporate split from what’s now called HP, which sells computers and printers. Now, Hewlett Packard Enter-prise—which provides servers, storage gear, and tech servic-es—is counting on the smaller, nimbler structure to better navigate the fast-changing cor-porate tech market. Pathfi nder is a way for HPE to be involved with more experimental ideas and products. It’s not aiming

for VC-style returns, though it doesn’t want to lose money, either, said chief operating of-fi cer Chris Hsu. “The purpose of this is for us to actually be in the market all the time, under-standing the emerging technol-ogies,” he said.

Corporate venture capital is nothing new; Google and In-tel Corp both have investment arms. In 2015 there were 801 corporate venture capital units, up 79% from 2011, according to Global Corporate Venturing, a research group. That includes archrival Dell and HP.

Pathfi nder has about 10 people and should have closer to 15 by the end of the year, Ananth said.

That puts it among the larger players; three-fourths of corpo-rate fi rms have about fi ve peo-ple or fewer devoted to venture capital, according to Toby Lewis, chief analytics offi cer of Global Corporate Venturing. Ananth said the group is also looking at possibly expanding internation-ally and getting into new fi elds such as artifi cial intelligence.

Already, HPE is seeing gains from its investments. One cus-tomer, Ananth said, was con-sidering moving some of its spending to Amazon’s cloud. After an introduction to Path-fi nder, the customer was in-trigued to see HPE had newer options. The startup sales team

is now working alongside the HPE account team for that customer. Requests from cus-tomers are helping drive which companies get investments, Ananth said.

There’s a lot of competition to back hot startups, but HPE’s name stands out among Silicon Valley’s many VCs; software startups want to work with the storied company to sell prod-ucts. Chef Software raised $40mn from HPE and others last year and has already seen benefi ts from the relationship. “They bring customers,” said Chef CEO Barry Crist. “They bring a lot of enterprise experi-ence—and a lot of reach.”

Children ride their bikes past a Hewlett Packard sign at HP’s Palo Alto headquarters. Putting money into startups is a way for the company to contend with new technologies from rivals like Amazon.com and Google. It’s also an eff ort to end a checkered spending pattern on acquisitions in the past decade.

Wall Street sees year of progress and pitfalls in junked ChicagoBloombergChicago

Since Chicago was cut to junk by Moody’s Investors Service in May 2015, the city has sold more

than $3.3bn of debt, allowing it to avoid potentially devastating bank penal-ties triggered by the downgrade, and pushed through a record property-tax increase.

But the triage over the last year has done little to loosen the fi nancial bind that tarnished its standing on Wall Street in the fi rst place: A $20bn pen-sion-fund defi cit that’s adding hun-dreds of millions of dollars a year to its bills, a legacy of long promising work-ers more in benefi ts than offi cials were willing to fund.

“All of this progress may not mean much if they don’t fi nish the job,” said Ty Schoback, a senior analyst at Co-lumbia Threadneedle Investments, which holds about $300mn of Chicago debt among its $25bn of municipal se-curities. “They need to start fi nding the

money to put into those funds now. Not six months from now. Not 12 months from now. They need to do it now.”

The Windy City, the biggest in the US with a below investment-grade rating, has become a key locus of distress in the $3.7tn municipal-bond market, con-tending with some of the same strains that helped push Detroit into a record bankruptcy three years ago. Reeling from debts that have been building for decades, Chicago’s push over the past year to steady its fi nances illustrates the diffi cult way out for cities and states that have saved $1.7tn less than they need to cover pensions due in the years ahead.

“We have overcome a large number of hurdles,” Chicago’s budget director Alex Holt said in an interview at City Hall. “It doesn’t mean that there are not some big hurdles that are ahead of us, particularly in the case of pensions.”

Chicago underfunded its retirement system by $7.3bn in the decade through 2014, city records show, freeing up cash to spend on salaries, roadwork and other routine bills. That’s put it under pres-

sure to set more taxpayer money aside to keep from falling further behind.

The Moody’s downgrade threat-ened to worsen the city’s financial burdens by exposing it to as much as $2.2bn in costs to repay floating-rate debt early and call off related deriva-tive trades, which banks had the right to demand. To skirt that, the city pushed through a wave of bond issues as investors demanded yields higher than those on some speculative mu-nicipal securities.

It also paid $359mn to scuttle the in-terest-rate swap contracts, eliminating the risk of having to settle them when money couldn’t easily be raised.

“They acted quickly,” said John Mill-er, co-head of fi xed income at Nuveen Asset Management, which oversees $110bn of municipals and bought Chi-cago debt after the downgrade. “The rates they’re getting on the new issues that they’ve done are pretty manage-able.”

Chicago also showed elected offi cials are willing to raise taxes to chip away at the debts. With support from Demo-

cratic Mayor Rahm Emanuel, who was re-elected to another four-year term in April 2015, the city council in Oc-tober voted to boost real-estate levies by $543mn over four years, the biggest jump ever.

The increase will bolster funding for two of its funds, the police and fi re pen-sions, which were only about a quarter funded as of December 2014. Even so, Emanuel has petitioned Illinois Gov-ernor Bruce Rauner to let the city put off about $845mn of pension payments it’s supposed to make over the next fi ve years, which would add to future bills. Rauner has until May 31 to approve that law, which would give the city 40 years — instead of 25 years — to make its re-tirement plans 90% funded.

Even with the property-tax increase, the pension obligation is poised to grow each year and the city has little power to alter benefi ts. In March, the Illi-nois Supreme Court dashed Emanuel’s plan to cut cost of living adjustments and require workers and the city to pay more into the municipal and labourers pensions.

“We acknowledge the steps that the city has taken over the last few months,” said Matthew Butler, Moody’s lead analyst on Chicago. “The path to improving the pension situation is likely going to be on the city. It’s going to be increasing contributions to those plans.”

The city is working to come up with a new way to shore up the pensions, in-cluding how to raise revenue, according to chief fi nancial offi cer Carole Brown. The municipal and labourer plans are on track to run out of money in 10 and 13 years, respectively. If they do, more than half of the budget could be devot-ed to pensions, according to Moody’s.

Any overhaul may prove politically diffi cult. Sixty-two percent of Chicago residents disapprove of Emanuel’s job performance, according to a survey by the New York Times and the Kaiser Family Foundation released this month. The mayor’s standing has been weak-ened since last year’s release of a video showing a white police offi cer shoot-ing a black teenager 16 times, which sparked protests decrying the law-

enforcement tactics used in Chicago’s minority neighbourhoods.

The ongoing fi nancial uncertainty has pushed investors to demand high yields to hold Chicago’s bonds instead of top-rated debt, even though the city’s borrowing costs have dropped amid a rally in the municipal market.

Chicago bonds issued two weeks af-ter the Moody’s downgrade that ma-ture in 2037 priced to yield 5.77%, data compiled by Bloomberg show. By con-trast, investors demanded just a 4.88% rate on a portion of the city’s January bond off ering due in 2038.

Those bonds still trade at a higher rate than debt issued for an upstart methanol plant in Texas, a fertilizer fa-cility in Iowa and even some junk-rated tobacco bonds, which Moody’s projects to almost-surely default.

“The move last summer was the big one,” said Miller, who may buy more Chicago bonds. “You have to be pre-pared for bumps in the road on a credit like this, but I don’t think they’ll be 200 basis point moves, and you can earn a decent amount of yield along the way.”

Nokia name to return to smartphones in bet on brand’s powerBloombergStockholm

The Nokia brand is set to return to

smartphones, two years after the Finn-

ish company sold its flagship handset

business and walked away defeated by

Apple and Samsung Electronics Co.

Nokia said yesterday it will license its

brand to a Helsinki-based company run

by former Nokia managers who aim to

bring new mobile phones and tablets

to the market. HMD Global plans

investments topping $500mn. Nokia

won’t have a financial stake in the

venture, though it’s set to collect fees

from brand licensing and intellectual

property.

The comeback eff ort is a bet that

shoppers will remember and embrace

a brand that almost disappeared with

the sale of Nokia’s handset unit to

Microsoft Corp in 2014. Nokia, which

once dominated global smartphone

sales, gets a risk-free second chance at

a business that was crushed by Apple’s

iPhone and Google’s Android devices

introduced in 2007.

“It’s going to take more than a well-

known brand name in this competitive

market,” said Annette Zimmermann, an

smartphone analyst at research firm

Gartner in Germany. “To shake up the

market and off er something that ex-

cites the fickle market will be diff icult.”

Shares of Nokia advanced 2.4% to

4.65 euros as of 2:19pm in Helsinki.

HMD is funded by a group of interna-

tional private-equity backers through

a fund called Smart Connect, as well

as by HMD’s management team. The

venture will be run by Arto Nummela,

a former Nokia manager and current

head of Microsoft’s Mobile Devices

business for Asia, Middle East and

Africa and its feature-phone business.

Florian Seiche, also a former Nokia ex-

ecutive and current Microsoft manager,

will be president at HMD.

The venture will make smartphones

running Android, and also plans tablets

and cheaper, so-called feature phones.

FIH Mobile, part of Foxconn Technolo-

gy Group, will help to build the devices.

Nokia and HMD will be trying to

crack a tough market with Samsung,

Apple and Huawei Technologies Co

dominating smartphone sales with

about half of the total 334mn high-end

phones shipped in the first quarter, ac-

cording to data from researcher IDC.

The new venture also marks an exit

from cheaper phones by Microsoft. As

part of the arrangements announced

yesterday, Microsoft is selling its

feature-phone assets to FIH and HMD.

When Nokia exited phones in 2014,

Microsoft acquired rights to use the

Nokia brand in smartphones for two

years, though it has already stopped

using it.

Since the deal completed in 2014,

Nokia has been getting most of its rev-

enue from wireless network equipment

and related software and services.

Android pay rolls out to UK consumersBloombergLondon

Alphabet’s contactless mo-bile payment system An-droid Pay went live in the

UK yesterday, making the nation the fi rst outside of the US to sup-port the service.

Shoppers will be able to pay with their Android-powered smartphones anywhere that accepts contactless payments, including on London’s tran-sit network of buses, taxis and underground trains. Visa and MasterCard accounts are eli-gible to be added to compat-ible Android phones, and major banks such as Halifax, Bank of Scotland, HSBC and Lloyds Bank are on-board for the roll out.

In a statement on its website yesterday, Alphabet described the UK as “one of the most ad-vanced contactless nations in the world.”

The UK’s use of contactless payments has been increas-ing over the last few years. Ac-cording to February statistics from the UK Cards Association, 84.2mn credit and debit cards are currently in active use by the nation’s 64.1mn people. About £1.3bn ($1.9bn) was spent in February using contactless pay-ment technologies.

Notably absent from support-ing Android Pay in the UK is Bar-clays Plc.

“At this stage Barclays and Barclaycard are not planning on participating in Android Pay in the UK,” a spokeswoman for the bank told Bloomberg via e-mail.

Barclays initially withheld support for Apple’s contactless Apple Pay system when it rolled out in the UK in July 2015, but ul-timately signed up to the service nine months later.

To use Android Pay, consum-ers must download a free app from Google’s Play Store, add their card details and then tap their mobile device against a payment device as if it were a contactless card.

Singapore and Australia are slated to receive Android Pay support “soon,” according to Al-phabet’s announcement.

A Nokia logo is displayed at the company’s pavilion at the Mobile World Congress in Barcelona on March 3, 2015. Nokia said yesterday it will license its brand to a Helsinki-based company run by former Nokia managers who aim to bring new mobile phones and tablets to the market.

BUSINESSThursday, May 19, 2016

GULF TIMES

Qatar plans return to Eurobond market after five-year absenceBloombergDubai

Qatar will meet investors this week

before a possible sale of interna-

tional bonds as the world’s biggest

exporter of liquefied natural gas

seeks to finance a budget deficit

caused by falling energy prices.

Qatar has picked 10 banks to

arrange the meetings starting today

in Asia, Europe and the US, accord-

ing to a person familiar with the

plan. A sale of dollar-denominated

securities may follow subject to

market conditions, said the person,

asking not to be identified because

the information is private.

Issuers from the six-nation Gulf

Cooperation Council, which in-

cludes Qatar and the UAE, are rush-

ing to the bond market before the

Holy Month of Ramadan that begins

in June and a possible increase in

the US interest rates. They need

cash after a more than halving of oil

prices led to bigger budget deficits,

including a fiscal shortfall that Qa-

tar’s finance minister projected in

December will reach 46.5bn riyals

($12bn) this year.

The off ering, the State’s first since

2011, will include Regulation S and

144A securities that are marketable

in the US, according to the person.

The nation will seek to raise about

$5bn in multiple tranches, three

bankers familiar with the transac-

tion said earlier this month. Yields

on Qatari bonds maturing in Janu-

ary 2022 have fallen 34 basis points

this year to 2.47%.

Abu Dhabi generated a similar

amount from issuing five- and

10-year debt last month. Govern-

ments of Bahrain and Oman are

also raising money from privately

placed bonds, people familiar with

the plans said this week.

The banks chosen by Qatar were

HSBC Holdings, JPMorgan Chase &

Co, Mitsubishi, QNB Capital, Al Khalij

Commercial Bank, Deutsche Bank,

Barclays, Bank of America Merrill

Lynch, Mizuho Securities and a unit

of SMBC Nicco.

Moody’s Investors Services this

week confirmed Qatar’s third-high-

est investment-grade rating, saying

the nation’s economy will grow at

an average pace of 3.6% from 2016

to 2020.

The legal team at The First Investor, the investment banking arm of Barwa Bank Group, was awarded “Legal Team of the Year’’ at the Corporate Counsel Middle East Awards 2016 in Dubai, in recognition of its innovative investment legal structuring in the field of Islamic finance and investment banking. The team headed by Allen Merhej, was also shortlisted for “General Counsel of the Year’’ and “In-House Innovation Award’’. “The moral value of the award is tremendous as it presents the legal experts and competitors’ recognition of our team’s hard work and expertise in providing sound advice to the company and the investors,” Merhej said.

Barwa Bank arm bags ‘Legal Team of the Year’ award

QFB developing new open architecture platform for private banking clientsQatar First Bank (QFB) is

developing a pioneering open architecture private

banking platform supported by an exceptional international network of partners.

The platform off ers share-holders and clients the opportu-nity to select from a wide range of investment opportunities and innovative fi nancial solutions to grow, manage and protect their wealth and assets.

“QFB is transforming from being an investment focused to an investor-focused entity. This is being refl ected in the contin-ued development of our Shariah compliant off ering across all business lines. We are aware that there is still a great deal of work to be done, and we are investing to achieve our goals,” its chief

executive Ziad Makkawi said.Highlighting that the global

economic conditions remain challenging and complex dur-

ing 2016, he said the bank will continue to expand its Islamic fi nancial solutions, develop and launch new initiatives, and

most importantly explore and evaluate investment opportu-nities.

QFB’s Private Banking and Wealth Management business is uniquely positioned to exclu-sively cater to the banking needs of its elite clients and their busi-nesses, while off ering access to investment opportunities and innovative solutions.

Leveraging the in-house and international breadth of invest-ment solutions across asset classes, QFB private banking team opts for a client centric approach whereby the invest-ment advice is personalised to the fi nancial goals and risk profi le of the client. Bespoke Shariah-compliant solutions are tailored to the functional needs and wants of clients enabling

them to both create and preserve wealth.

“We are proud to develop a pi-oneering open architecture plat-form and make it available ex-clusively to our private banking clients. The platform is backed by our talented and highly ex-perienced team, well-equipped to meet the individual needs of our clients,” said Nizar Ahmadi, QFB’s Head of Private Banking and Wealth Management.

The private banking and wealth management Shariah-compliant products include fi -nancing, private banking serv-ices, innovative investment solutions, as well as family offi ce services covering trusts, foun-dations, advisory, real estate planning, and statement con-solidation.

Gulf bourses lose steam;Egypt lifted by foreign moneyReutersDubai

Foreign funds boosted the Egyptian stock market for a second straight day yes-

terday, exchange data showed, while Gulf bourses lost steam as investors took profi ts.

Cairo’s main index added 1.2% following its 1.9% jump on Tuesday, taking the bourse’s gains for 2016 to 9.0%. Global Telecom Holding, a stock pre-ferred by international manag-ers, gained 1.1%.

“For now foreign fund man-agers seem to be at ease with current FX prices, and fi nd the market attractive at cur-rent levels compared to other emerging markets,” said a Cai-ro-based fund manager.

In the Gulf, Riyadh’s index gave up early gains in the fi nal hour of trade.

“For now the markets will continue to trade in a very nar-row range, at least until further details concerning the Vision 2030 economic plan are an-nounced,” said a Jeddah-based trader, referring to Saudi Ara-bia’s economic reform scheme.

Advanced Petrochemical surged 2.0% after the company announced plans to increase its share capital by 20% to sup-port future growth. The com-pany also said it recommended distributing a cash dividend of 0.75 riyal per share for the fi rst quarter. “We expect the com-pany will distribute 3.0 riyals per share for 2016. If annual-

ised, the dividend yield will be 6%,” said a note by NCB Capi-tal. The range of dividend yields is between 4 and 9% for Saudi petrochemical producers, ac-cording to Reuters data.

Saudi International Petro-chemical Co (Sipchem) also rose 2.0% after it said it had restarted three plants that were shut for maintenance earlier this month.

Banking shares were the main laggards with heavy-weights Samba Financial Group and National Commercial Bank each slipping 0.2%.

Dubai’s index also failed to hold onto early gains and fell 0.5% as investors booked prof-its in small and mid-sized com-panies. Arabtec dropped 0.7%.

But Islamic insurer Takaful Emarat rose 6.7% in unusually high volume. Dubai Parks and Resorts edged up 0.8%; Yester-day was the fi nal day of trade in its rights issue, which will in-crease its share capital to 8bn dirhams ($2.2bn).

Abu Dhabi’s index dipped 0.3%, dragged down mainly by mid-sized property-related shares such as Eshraq Proper-ties and RAK Properties, which were down 1.3 and 3.3% respec-tively. National Bank of Kuwait rose 1.6% as its 137.6mn dinar ($473.2mn) rights issue was launched; the subscription pe-riod will close on June 16. Ku-wait’s main index lost 0.1%.

Elsewhere in the Gulf, the Oman index fell 0.1% to 5,952 points and the Bahrain index dropped 0.2% to 1,106 points.

Makkawi: Investor-focused. Ahmadi: Well-equipped.

Mideast witnessed 38% more security incidents year-on-year in 2015: PwCThe Middle East witnessed 38% more security incidents year-on-year in 2015, resulting in renewed willingness among corporates to invest in cyber security with many incorporating strategic initiatives to improve security and reduce risks, according to PricewaterhouseCoopers (PwC).The businesses in the Middle East are more likely to have suff ered an incident related to cybercrime, with 85% respondents in the region comparing to a global average of 79%, PwC said in its report.Around 18% of respondents in the region have experienced more than 5,000 attacks, compared to a global average

of only 9% — which is higher than in any other region, it said.“While companies in the region invest in security technology and protection such as cyber insurance, they are often not supported by the people, processes and governance required to provide real security,” according to Mike Maddison, PwC Middle East Partner, Cyber Services Leader and Head of Risk Assurance Services.Highlighting that it can create a false sense of security, it said the findings suggest that these challenges are only likely to increase.“Given ever greater connectivity, technology convergence, as well as

more assertive regulatory and legislative agendas, the sophistication required will continue to increase,” it said.The report finds that companies, especially in the Middle East, often find it diff icult to identify when an attack has taken place: many only discover it when third parties or clients report suspicious messages or requests for funds.While 85% of companies in the Middle East have established an internationally recognised security framework to tackle these attacks, the report said other measures that organisations need to actively focus on such threats as business, board-level and end-to-end issues.

High-profile breaches have highlighted the need for cyber-crime to be managed in the same way as any other threat to business continuity, and owned at board level. This means detailed planning, scenario exercises, response management and crisis preparedness, involving a wide range of functions such as legal, human resource, forensic, risk and communications, the report said.PwC said companies in the Middle East need not just the right technology, properly adapted to their business, but the right people, the right governance structures, and the right processes. Cyber is an end-to-end challenge and it needs an end-to- end response.

QSE treads a fl at course to remain above 10,000 markBy Santhosh V PerumalBusiness Reporter

The Qatar Stock Exchange yesterday rather treaded a fl at course to remain

above the 10,000 mark despite global oil price hitting $50 a bar-rel owing to escalating wildfi res in Canada.

Notwithstanding the buying support from local retail inves-tors and weakened net selling by their non-Qatari counter-parts, the 20-stock was margin-ally down to 10,009.95 points on declining trading turnover and volumes.

Small and midcap equities witnessed gains in the market, which is down 4.02% year-to-date.

However, domestic institu-tions and Gulf individual inves-tors turned bearish and there was increased net selling by Gulf institutions in the bourse, where banking, telecom and industri-als stocks together constituted more than 84% of the total trad-ing volume.

Market capitalisation was up 0.04% or QR20mn to QR537.76bn with small and midcap equities gaining 0.37% and 0.14%; but micro and large caps fell 0.32% and 0.21% re-spectively.

The Total Return Index was down 0.01% to 16,195.44 points, while All Share Index rose 0.12%

to 2,796.42 points and Al Ray-an Islamic Index by 0.03% to 3,919.7 points.

Industrials and consumer goods stocks shrank 0.47% and 0.08% respectively; whereas in-surance gained 1.33%, transport (0.32%), banks and fi nancial services (0.28%), realty (0.09%) and telecom (0.07%).

Major losers included Indus-tries Qatar, Mazaya Qatar, Oore-doo, Milaha and Qatar Islamic Bank; even as Qatar First Bank, Dlala, Vodafone Qatar, Nakilat, Qatari Investors Group, Gulf In-ternational Services, Mesaieed Petrochemical Holding and Qa-tar Insurance bucked the trend.

Domestic institutions turned net sellers to the tune of QR4.32mn compared with net buyers of QR16.66mn on Tues-day.

The GCC (Gulf Cooperation Council) institutions’ net selling increased to QR13.94mn against QR7.73mn the previous day.

The GCC individual investors turned net sellers to the extent of QR2.61mn compared with net buyers of QR9.03mn on May 17.

Non-Qatari institutions’ net buying weakened to QR10.25mn against QR12.79mn on Tuesday.

However, local retail investors turned net buyers to the tune of QR12.67mn compared with net sellers of QR23.67mn the previ-ous day.

Non-Qatari individual inves-tors’ net profi t booking declined

to QR2.02mn against QR7.08mn on May 17.

Total trade volume fell 18% to 8.12mn shares, value by 28% to QR235.04mn and deals by 33% to 3,718.

The consumer goods sector saw 62% plunge in trade volume to 0.35mn equities, 52% in value to QR21.97mn and 56% in trans-actions to 292.

The industrials sector’s trade volume plummeted 54% to 1.67mn stocks, value by 55% to QR64.58mn and deals by 45% to 1,003.

There was 15% decline in the transport sector’s trade volume to 0.29mn shares, 46% in value to QR8.8mn and 37% in transac-tions to 113.

The banks and fi nancial serv-ices sector’s trade volume was down 3% to 2.8mn equities but value rose 14% to QR85.69mn. Deals fell 8% to 1,156.

However, the real estate sec-tor reported 73% surge in trade volume to 0.57mn stocks and 49% in value to QR11.99mn but on 33% shrinkage in transac-tions to 293.

The telecom sector’s trade vol-ume soared 34% to 2.38mn shares and value by 20% to QR37.62mn, while deals shank 26% to 816.

The market witnessed 20% increase in the insurance sec-tor’s trade volume to 0.06mn equities and 23% in value to QR4.39mn but on 42% decline transactions to 45.