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Business2018 4 21401210
Business2018 4 21401210
BUSINESS
Oil erases losses as
‘Roadshow showcases impact of Trump
tweet on price fizzles
US to trade relations’
on “artificially Very High” prices on Friday. WTI has risen 10% in
fizzled. two weeks.
The comments came as the Brent crude for June delivery
Organisation of Petroleum fell about 69¢ at the time of
Exporting Countries (Opec) and the tweet, before trading just
allies including Russia showed 4¢ lower at $73.74 a barrel in
willingness to further tighten London. Both benchmarks are
By Peter Alagos technology, media, entertain- aircraft and spare parts, ma- oil markets and boost prices set for weekly gains.
Business Reporter ment, and real estate, among chinery and furnaces, auto- in a meeting in Saudi Arabia. President Trump’s comments
others. The total worth of con- mobiles (excluding trams and West Texas Intermediate futures come in the same week that
firmed exports and orders to Qa- rails), electronic and electrical dropped as much as 1.2% before US oil inventories fell below
T
he series of high-level tar is $146bn, which generated equipment, medical and opti- the losses were erased. their five-year average for the
meetings being held dur- 1mn American jobs that depend cal equipment, pearls, precious “Looks like Opec is at it again,” first time since 2014 as Opec
ing Qatar’s economic on doing business with Qatar, stones and metals, as well as Trump said on Twitter. “With policy of curtailing production
roadshow across a number of the data said. aluminium and its derivatives, record amounts of oil all over appears to be close to achieving
US cities is a clear display of The MEC data said there are mineral fuels, oils and distil- the place, including
commitment to enhance co- 15,000 American citizens liv- lates, iron or steel products, the fully loaded ships
operation and trade relations ing in Qatar, 5,000 of which are prefabricated buildings, furni- at sea, oil prices are
between the two countries, working in high-skilled jobs in ture, lighting fixtures and signs, artificially Very High!
an official of the Washington- the country; $29bn worth of plastics and related products No good and will not
based US Qatar Business Coun- Qatar’s major projects that US and various chemical products, be accepted!”
cil said. companies will compete for will and meat. Oil ministers from
The meetings between US and generate up to 100,000 new Asked about the council’s Saudi Arabia, Russia
Qatari officials show the depth American jobs. Also, the 2022- role in helping increase trade and the United Arab
and strength of the bilateral re- FIFA World Cup will create up volume between the two coun- Emirates pushed back
lationship, according to US Qa- to $10bn in investment for US tries, McGee said: “For Qataris, on the charge, saying
tar Business Council associate companies. the US market is massive. Thus, there’s no such thing Opec secretary-general Mohammad
director, Business Engagements, On trade exchange, the MEC the council can help identify as artificial prices, that Barkindo says the US oil and gas
Max McGee. said the US is one of the major the right partners, investors, or current market levels industry is benefiting from Opec’s efforts
“They show the private sector trade partners of the State of buyers in the US and establish reflect geopolitics and to stabilise the market.
that there is a strong commit- Qatar with a surplus of $4bn in strong and valuable partner- that demand is strong.
ment between our two coun- favour of the US; the US is the ships for Qatari companies. Crude has rallied in recent its stated goal. Brent moved to
tries, meaning an investment in largest exporter to Qatar with “For Americans, the busi- weeks as output cuts from Opec almost $75 a barrel on Thursday,
the counterpart is safe and lu- total US exports amounting to ness climate in Qatar can be a and its allies were compounded its highest level in more than
crative. It encourages true bilat- $4.88bn in 2017. bit different than they are used by heightened geopolitical risks, three years.
eral business and investment,” Qatari exports to the US in to. The Business Council can including the possibility of re- Opec’s not the only reason why
McGee told Gulf Times. McGee: True bilateral business. 2017 stood at $1bn to include help these companies identify newed US sanctions on Iran. US oil prices have moved higher.
On the value of Qatari invest- petrochemical products and the right partners and avenues shale producers are also facing Fears that Trump will re-impose
ments in the US, McGee said continued. “So far, over $21bn ways purchasing over $92bn in derivatives, aluminium and its for trade and investment in Qa- production challenges. sanctions on Iran when the
the Qatar Investment Author- of that allotment has been in- American-made aircraft,” Mc- products, fertiliser, salt, Sul- tar and ease that process. We are “Those goals Opec set out are nuclear deal is reviewed are
ity (QIA) has pledged to invest vested. This doesn’t include Gee said. phur, earth, stone, plaster, lime, here to support both the sides in nearly achieved,” said Katie adding to uncertainty and
a total of $35bn into the US by private investments like Al Citing data provided by the cement, and organic chemicals. increasing trade volume. We can Bays at Height Securities LLC. could halt as much as 800,000
2020. In 2017, the QIA commit- Rayyan Tourism Corporation’s Ministry of Economy and Com- Conversely, the value of Qa- also identify sectors of growth “I don’t see how the president’s barrels a day of exports from
ted to investing another $10bn, investments in hotels through- merce, McGee said Qatar’s in- tari imports from the US stood and areas in the market that position necessarily will weigh Opec’s third-largest producer
specifically in infrastructure, he out the country, or Qatar Air- vestments are diversified in at $4.88bn in 2017 to include need new products or services.” in on that at all.” within six months. Venezuela’s
Meeting in Jeddah, a committee economic meltdown and plung-
of Opec and other oil producers ing production has also hit
found high levels of compliance supplies.
Trade dispute could put many jobs at risk: WTO chief with the production curbs. Still,
there’s capacity for prices to rise
beyond this week’s three-year
US shale, the big growth driver
of the last three years, is also
facing some “production chal-
high, according to Saudi Energy lenges,” Paal Kibsgaard, chief
AFP that we have seen in recent years, of unilateral, tit-for-tat measures, all of organisation saying it does not treat the Minister Khalid al-Falih, who executive officer of Schlum-
Washington threatening the ongoing economic which generate uncertainties for global United States fairly, Washington has filed said co-operation between berger Ltd, the world’s biggest
expansion and putting many jobs at risk.” trade and GDP growth,” since the damage several WTO dispute cases including one producers would continue into provider of oilfield services, said
The spat between Washington and would reach “far beyond those countries against China for theft of US intellectual 2019. yesterday. Shortages of pipe-
A major escalation in the trade dispute Beijing has cast a shadow over the IMF who are directly involved.” He urged property. Russian Energy Minister Alexan- lines, labour, equipment and
between the US and China could derail gathering and the fund cites the dispute countries to use the WTO as a forum for The WTO chief’s comments reflected der Novak said the output deal sand is threatening to curtail
the global recovery and put “many jobs as the biggest risk to the otherwise solid resolving any disputes, which “will be the growing concern among global has stimulated US oil production growth.
at risk,” World Trade Organisation chief global growth outlook. essential to prevent current tensions officials to keep the disagreement from and helped “restore the industry Twitter has emerged as a
Roberto Azevedo said yesterday. US President Donald Trump last month from escalating.” spreading. of Texas.” Opec secretary- preferred medium of commu-
And most of the impact of an all-out trade imposed steep tariffs on steel and “The WTO, which was created as a forum IMF chief Christine Lagarde said general Mohammad Barkindo nication for Trump, allowing
war would hit poor countries the hardest, aluminium imports and threatened to for members to hold each other to Thursday the uncertainty generated by said the US oil and gas industry him to directly reach his 51mn
he said in a statement to the International impose more on tens of billions of dollars account, will play its proper role in this the dispute undermines confidence and is benefiting from the group’s followers and countless more
Monetary Fund’s spring meetings. in Chinese imports, prompting Beijing process.” could choke off investment and hamper efforts to stabilise the market. through news coverage.
It is difficult to measure the effects “of a to slap duties on US goods like pork and In fact China has gone to the WTO to trade, which have been two key drivers of US crude production was at On April 2, Amazon.com Inc
major escalation, but clearly they could sorghum and to threaten even more complain about US steel tariffs, which global growth. 10.5mn barrels a day last week, shares dropped after Trump
be serious,” he said. sensitive US exports like soybeans. were imposed on national security The WTO projects global merchandise up from 9.3mn barrels a day a said the company’s deliveries
“A breakdown in trade relations among Azevedo expressed concern over “the grounds. trade will expand by 4.4% this year, after year ago, according to govern- cost the postal service and drive
major players could derail the recovery possibility that we enter a sequence And although Trump has disparaged the increasing by 4.7% in 2017. ment data, with growth rates retailers out of business.
T
he Treasury Department is tion to crack down on what he consid- reason of national security, but their US Said to Weigh Emergency Law for already had to back off plans to buy or transactions for national-security con-
considering using an emer- ers unfair trade practices by China. He motivation is protectionism. Is the US China Investment Crackdown invest in American technology com- cerns.
gency law to curb Chinese in- has threatened tariffs on as much as really that fragile?” foreign ministry Acquisitions by Chinese firms in the panies. Yet private sector companies, Tarbert, who spoke Thursday at an
vestments in sensitive technologies, $150bn in Chinese imports in response spokeswoman Hua Chunying said at a US fell to $31.8bn last year from $53bn led by Tencent Holdings Ltd, Alibaba event in Washington, said Treasury is
as the Trump administration looks to intellectual property theft and forced daily briefing. the year before, according to data com- Group Holding Ltd and Baidu Inc have also supporting a bipartisan bill that
to punish China for what it sees as technology transfer. Beijing has retali- Mnuchin has until around May 21 piled by Bloomberg. The directive from been active in the US. would expand the authority of the
violations of American intellectual- ated by proposing tariffs on $50bn of to propose executive action to address Trump to consider investment restric- Tencent has invested in more than inter-agency panel, known as CFIUS,
property rights. American goods, and pledging further concerns about investments in the US tions deals only with China, Tarbert 50 companies in the country in the which currently vets foreign takeovers
The US government is reviewing the action if necessary. “directed or facilitated by China in in- said. last five years, according to data com- on a case-by-case basis.
possible use of a law known as the In- The president asked Treasury Sec- dustries or technologies deemed im- Treasury officials are working on piled by Bloomberg. Those include “That’s a separate process that’s
ternational Emergency Economic Pow- retary Steven Mnuchin to consider in- portant,” according to the March 22 plans to identify technology sectors artificial intelligence startups like ongoing, but the CFIUS office is not
ers Act, said Heath Tarbert, an assistant vestment restrictions on Chinese firms presidential memo. in which Chinese companies would be ObEN Inc, biotech companies such working on that. We have separate of-
secretary in the agency’s international after the administration released the While investors have so far focused banned from investing, such as semi- as Locus Biosciences Inc and satellite fices in Treasury which are consider-
affairs office. Under the 1977 IEEPA law, results of its probe into China’s IP prac- on Trump’s plan to impose tariffs on conductors and so-called 5G wireless equipment developer Satellogic USA ing those two issues distinctly,” Tar-
President Donald Trump could declare tices last month. Chinese imports, new restrictions communications, according to four Inc. bert said, referring to both IEEPA and
a national emergency in response to an Beijing fired back forcefully on Fri- could deepen a slowdown in Chinese people with knowledge of the proposal, Treasury officials are also looking at CFIUS.
Gulf Times
2 Saturday, April 21, 2018
BUSINESS
Asian oil demand to hit
China banks extend $302bn record, but industry can’t
take eyes off Middle East
C
hinese banks extended 1.9tn yuan driver for the world’s second-largest In the first quarter of 2017, lending was solid progress in reining in off-balance and top exporter Saudi Arabia oil demand story in general,”
($302bn) in new property loans in economy but authorities have struggled 1.7tn yuan and sales growth accelerated sheet lending that has prompted a withholding output and noisily said Barnabas Gan, analyst at
the first quarter of 2018, reflect- to keep soaring prices in check so that thanks to a boom in smaller cities where sweeping crackdown by regulators look- pushing for prices at $80 to Singapore’s OCBC Bank.
ing still solid demand for housing even housing is still affordable. home purchase conditions are less re- ing to reduce systemic financial risks. $100 per barrel. Suresh Sivanandam of energy
as curbs on speculation continue to bite, China posted its fastest property in- strictive. Regulators have been cracking down Most analysts have pointed consultancy Wood Mackenzie
central bank data showed yesterday. vestment growth in three years in the first Outstanding property loans rose on consumer loans that are being mis- to escalating Middle East said he expected China’s
Property loans, comprised mainly of quarter, driven by a surge in land values 20.3% by end-March from a year earlier used for home purchases, warning they conflicts, a crisis in Venezuela, overall oil demand to grow
individual mortgages and loans for real and as developers grew more confident to 34.1tn yuan, the PBoC said in a quar- cannot be used to “fuel property bub- and the supply cuts of Saudi by 370,000 bpd this year to
estate development, accounted for 38.8% about the policy outlook. terly report posted on its website. bles”. Arabia and other producers as 12.78mn bpd.
of all new loans made in the quarter, Reu- However, sales slowed as limits on Outstanding individual mortgage loans Consumer loans increased by 1.4tn the main drivers taking global Adding in other regions,
ters calculated from data from the Peo- home purchases hit transactions. rose 20% by end of March to 22.86tn yuan in the first quarter, according to benchmark Brent and US. Goldman said global oil
ple’s Bank of China (PBoC). New home prices rose for the 35th con- yuan. PBoC data. West Texas Intermediate demand in the first quarter
crude futures this week to of 2018 is likely to post the
their highest since late 2014 at strongest year-on-year growth
almost $75 and $70 a barrel, since the last quarter of 2010.
respectively. A tighter market is also
Yet a much more fundamental showing up in rising costs for
reason has also sparked oil’s crude deliveries to Asia as
bull run: Asian demand, which Middle East producers raise
Goldman Sachs said this week their official selling prices
points to an average price of (OSPs).
$80 a barrel in 2018. The OSPs for Abu Dhabi’s
“Rising tensions in the Middle Murban and Saudi Arabia’s
East have likely played a Light crudes are currently
role in oil price strength, but showing their highest
we believe a tight physical premiums to Dubai since 2014.
market is the key driver,” US With demand growing all
investment bank Jefferies said around, some analysts say
on Friday in a note to clients. there is little reason to expect
Trade data in Thomson Reuters anything but further price
Eikon shows seaborne imports increases.
of crude oil by Asia’s main Standard Chartered Bank said
buyers will hit a record this this week there were “no bears
month, a big portion going to left in this oil town”.
slake China’s voracious thirst. So far, refineries in Asia are
By end-April, China will likely still operating at high levels to
have taken in more than 9mn meet strong demand, despite
barrels per day (bpd) of crude, rising crude feedstock prices
its most ever. eating into profit margins.
That’s nearly 10% of global “Refiners are not likely to
consumption and more than a reduce imports or trim down
third of Asia’s overall demand. run rates despite the price
At $75 a barrel, it implies increase,” said Lee Dal-seok,
monthly import costs for China senior research fellow at state-
of more than $20bn. run think tank Korea Energy
The record comes despite Economics Institute.
maintenance season, which Still, some dark clouds loom.
usually dents imports at this China’s Sinopec, Asia’s largest
time of year, and indicates refiner, plans deep cuts to
that China’s oil requirement is its May crude imports as its
A cable is seen near residential buildings under construction in Beijing. China’s property loans, mainly individual mortgages and loans for real estate development, bigger than expected. biggest refinery – the 460,000
accounted for 38.8% of all new loans made in the first quarter, Reuters calculated from the People’s Bank of China data. “Chinese demand points to bpd Zhenhai Refining and
strong growth,” said US bank Chemical Company – goes into
Goldman Sachs in a note to major overhaul.
clients, adding that it may Several traders said more such
be “higher than currently outages are due in May and
C
hinese telecom giant ZTE vowed In Beijing the action against ZTE will Hong Kong and Shenzhen since Tuesday. introducing the export ban in Washing- called teapots – as crude growth.
yesterday to fight back against a US likely heighten fears about the reliance on Washington’s control of the company’s ton, a commerce department official told importers, resulting in record “The prospect of trade
order banning it from purchasing US technology for critical industries. fate – with roughly 80,000 employees reporters there was no “off ramp” for the refining throughput. restrictions and counter-
and using US technology for seven years, a The order “seriously endangers the sur- mostly based in southern China – has company to seek a reversal of the blockade. “A number of teapots are restrictions threatens to...
move that has angered Beijing. vival of ZTE”, the company said in a state- stirred ire and angst in China, where offi- The export ban followed a five-year US starting new Crude Distillation derail growth prematurely,”
The decision announced by Washington ment yesterday, adding “we cannot accept cials prize stability. “China will pay close government probe into ZTE’s evasion of Unites (CDUs) and secondary said IMF chief economist
this week has clouded prospects for the it!” The firm said it would “not give up its attention to the development of the situ- sanctions on Iran and North Korea, first units, pulling in more crude,” Maurice Obstfeld.
telecom and phone maker, which depends efforts to resolve the problems through ation and stands ready to take the neces- revealed in March 2016. From January Meidan said, adding that there Goldman Sachs does not share
on US technology such as chips and the communication and dialogue, but would sary measures to safeguard the legitimate 2010 to March 2016, the company shipped may also be some purchases of the IMF’s concerns.
Android operating system for its mobile also resolutely protect its legitimate rights rights and interests of Chinese enterpris- $32mn of US cellular network equip- Strategic Petroleum Reserves Worries about “trade wars
phones. The tough sanctions come as the and interests through all legally permit- es,” commerce ministry spokesman Gao ment to Iran, and made 283 shipments of (SPRs). and fears that higher oil prices
battle over technology takes centre stage ted methods”. The company has one or Feng said Thursday. “The US’s actions are cellphones to North Korea, with the full Beyond re-stocking and will start to weigh on demand
in a US spat with China that has fanned two months of stored component supplies ostensibly aimed at China, but they will knowledge of the highest levels of man- teapots, analysts said China’s growth... are overdone,” it said.
fears of a trade war. Washington has taken before the ban will start to impact its busi- ultimately hurt the US itself. agement, officials said.
A
Shanghai solutions, in which chips sia’s super-wealthy are increas-
play a significant role,” the ingly opting for second-hand
spokeswoman said in a private jets rather than buying
E-commerce titan Alibaba statement. new ones, as private buyers look for deep
Group Holding Ltd has “The acquisition of Hangzhou discounts and shorter waiting times, air-
bought a Chinese microchip C-SKY Microsystems, a craft brokers said.
maker to further its cloud- leading Chinese supplier Buyers from the region bought 61 pre-
based “Internet of things” of embedded CPU cores, owned aircraft and 54 new jets in 2017,
(IoT) business, underscoring underlines our commitment marking the first time second-hand pur-
its commitment to the to driving the development chases outstripped new orders, accord-
chip industry, an Alibaba of the chip industry,” she ing to a report by aviation consultancy
spokeswoman said yesterday. said, referring to central Asian Sky Media.
The announcement comes processing units. It underscores how a trend that began
days after the United States Alibaba did not disclose the last year has hardened amid slowing eco-
banned American firms terms of the acquisition – nomic growth in the region, while cost-
from selling chips and other the firm’s first involving a conscious Chinese buyers have shunned
components to Chinese chipmaker. flashy symbols of wealth.
telecoms company ZTE Corp The Chinese e-commerce Brokers said customers included Chi-
for seven years, a move that giant had previously nese companies, which were buying
rekindled discussion in China invested in Hangzhou C-SKY such jets to support overseas expansion
about the need for self- Microsystems and was now and opting for used planes to keep costs
sufficient tech supply chains. taking its stake to 100%, in down. Pre-owned jet prices have also
Senior Chinese officials held line with an interest in the seen a steep drop in the past two years,
meetings this week with chip industry articulated they said. “Customers have changed, People visit the Asian Business Aviation Conference and Exhibition at Hongqiao International Airport in Shanghai, China. Asia’s
industry bodies, regulators late last year, said a person their knowledge of the industry has super-wealthy are increasingly opting for second-hand private jets rather than buying new ones, as private buyers look for deep
and the country’s powerful familiar with the matter who changed and they now understand the discounts and shorter waiting times, aircraft brokers said.
chip fund about speeding declined to be identified as value of a pre-owned aircraft,” Jeffrey
up already aggressive plans the matter was private. Lowe, managing director of consultancy under warranty. So that has certainly “The market base has grown,” said this shift was not negative for planemak-
for the sector in the wake of The person did not believe Asian Sky Media, said on the sidelines of spurred the market.” Planemakers such David Dixon, president of business jet ers such as Gulfstream and Bombardier,
the ZTE ban, two people with the acquisition was the Asian Business Aviation Conference as General Dynamics Corp’s Gulfstream brokerage Jetcraft Asia. as it was helping to firm prices by reduc-
direct knowledge of the talks connected to current trade & Exhibition in Shanghai this week. and Bombardier Inc have reduced pro- “Some people who don’t want to ing an oversupply of used business jets
told Reuters. tensions between China and “The market has had an abundance of duction in recent years as market de- spend $60mn-65mn on one of these, can on the global market.
“Alibaba aims to empower the United States involving supply of late, so they were able to find mand contracted and they worked on spend $40mn instead. Customers were also attracted by new
different industries through tit-for-tat tariffs. good airplanes at good prices too which releasing new models, resulting in longer There’s a lot you can do with $20mn.” models being pushed out by planemak-
were not necessarily all that old and still waiting times for buyers. Industry executives said however, that ers, brokers said.
Gulf Times
Saturday, April 21, 2018 3
BUSINESS
China
Huarong
confirms
chairman
departs
GM Korea delays vote on
after probe
Reuters
Shanghai/Hong Kong
bankruptcy protection
Reuters
China Huarong Asset Seoul/Detroit
Management Co confirmed
its chairman Lai Xiaomin,
G
who is under investigation eneral Motors’ South Korean
for alleged corruption, had unit delayed a decision to file
stepped down, sparking an for bankruptcy protection until
11% tumble in shares of the Monday afternoon, after the automaker
nation’s biggest bad debt failed to reach a wage deal with its la-
manager yesterday. bour union in time to meet a yesterday
Reuters reported earlier this deadline.
week, citing sources, that The US automaker shocked South
a senior banking regulator Korea in February when it unveiled a
official would take the helm major restructuring plan for its money-
at state-owned Huarong losing unit, which involved shuttering
after China’s anti-corruption one of its four plants in the country
watchdog launched a and voluntary redundancies for 2,600
probe into Lai for “serious workers.
discipline violations”, a GM has sought wage concessions
euphemism for graft. from the union as well as government
Huarong said in a statement funding and incentives to save its re-
to the Hong Kong stock maining three South Korean factories.
exchange late on Thursday The automaker said its Korean unit,
that Lai’s departure “will not which employs 16,000 people, would
cause any adverse impact likely file for bankruptcy if no restruc-
to the business.” turing agreement was reached by yes-
Wang Zhanfeng, head of terday.
the Guangdong branch of After failing to reach a tentative
China’s banking regulator, agreement with the company by the
had been lined up as its deadline, GM Korea’s labour union re-
new chairman and Li Xin, quested an extension to continue talks,
chief supervisor of China aiming to conclude a tentative agree-
Orient Asset Management ment by 5pm local time on Monday,
Co Ltd, would be named April 23.
president of Huarong, it GM Korea held a board meeting yes-
said. terday evening to discuss filing for a
Investors sold down the court-led rehabilitation, but it delayed
stock sharply when trading a decision until Monday evening.
resumed on Friday after “Government officials will engage in
being halted earlier this the negotiations over the weekend in an
week. effort to help reach a tentative labour
The Hong Kong-listed shares agreement between the company and
fell 11%, their biggest one- the union by 5pm Monday,” GM said in
day drop, to hit their lowest a statement.
level since January last year Earlier, the union said the two sides
in a slightly softer wider would continue talking until Monday
market. afternoon.
“People are holding back The Korea Development Bank told
on companies haunted by Reuters this week it may sign a pre-
similar issues involving liminary agreement by April 27 to pro-
management, worried vide financial support for the business An employee works at an assembly line of GM Korea’s Bupyeong plant in Incheon, South Korea. General Motors said its Korean unit, which employs 16,000 people, would
that they might face some should an interim due-diligence report likely file for bankruptcy.
other hurdles even after due on Friday turn out to be satisfac-
a management reshuffle,” tory. If they fail to reach an agreement, of the nation’s auto industry jobs and tive nature of the talks. Over the past plug on the unit will not come easy for
said Steven Leung, a sales The US automaker owns 77% of GM more than 150,000 jobs at GM and sup- 16% of auto exports in Asia’s fourth- three years, GM has sought to focus on GM Chief Executive Mary Barra.
director at UOB Kay Hian. Korea, while KDB owns a 17% stake. pliers will be “under threat,” the gov- biggest economy. profitable markets, mainly the United The unit was once the backbone of
He added that the new GM’s main Chinese partner, SAIC ernment said. A union official previously said the States and China, and new technolo- its Asian strategy and still makes more
chairman’s regulatory Motor Corp, controls the remaining GM Korea’s restructuring also poses thorniest issue was job security for 680 gies such as electric and automated than 1mn assembled or partially assem-
background was viewed as a 6%. a challenge for South Korean President workers at the Gunsan factory, which is vehicles. bled vehicles for the US, European and
long-term positive. In a statement after talks fell apart Moon Jae-in, who has attached the ut- due to close by May. Although the South Korean unit has emerging markets.
Huarong hit the headlines yesterday, South Korea’s government most priority to jobs ahead of local elec- “We don’t want a disaster. We still been hobbled by labour costs and hurt It is also an engineering and design
this year after building up urged GM Korea and the union to “reach tions scheduled for June. have to keep in mind the worst situa- by GM’s decision to pull its Chevrolet source for GM’s small vehicles and elec-
a 36% stake in a key unit of an agreement swiftly through genuine GM Korea’s future is important for tion,” he said prior to the talks, declin- brand from Europe, a key export mar- tric vehicles, as well as home to some of
embattled private energy dialogue.” South Korea as it accounts for some 13% ing to be identified due to the sensi- ket, any decision on whether to pull the GM’s top-ranked suppliers globally.
company CEFC China Energy
which is acquiring a $9.1bn
stake in Russia’s oil major
Rosneft.
The investigation into Lai
makes him the latest in a
TCS set to become India’s first $100bn company in a decade
long line of top Chinese
executives coming under Bloomberg to more than $98bn. If it achieves that General Motors Co to Citigroup Inc. gramming operations that Tata and its In the near term, TCS continues to
fire as China looks to rein in New Delhi milestone, it could outstrip Goldman Backed by the Tata Group, TCS and its peers specialise in. grapple with soaring hiring costs as
risks in the financial sector, Sachs Group Inc and join the ranks of peers built a thriving model adopted Analysts are betting that Tata is immigration curbs hamper its ability
targeting riskier lending the world’s 100 most valuable corpo- by much of the rest of the world – and among the best-placed to make that to move cheaper Indian workers into
I
practices and high levels of t’s good to be back. Tata Consul- rations. fostered the generations of software transition. its largest market, the US. It’s far from
corporate debt. tancy Services Ltd is on the brink The last Indian name to cross that engineers that provided much-needed The company has gained more than certain whether it can continue to lead
Huarong Investment Stock of becoming India’s first $100bn threshold – in 2008 – was Reliance In- talent to Silicon Valley. 25% this year, putting it on track to the industry’s digital transition.
Corp Ltd and Huarong corporation in a decade, underscoring dustries Ltd, the telecoms-to-energy TCS’ industry, which today gener- cross the $100bn barrier. Then there’s the expensive training
International Financial the growing importance of the tech- conglomerate controlled by billionaire ates some $167bn of revenue annu- TCS is moving faster than its Indian effort underway to get thousands of
Holdings Ltd – which also nology sector to Asia’s third largest Mukesh Ambani. ally, is now going through a painful peers into digital services, said Rahul employees up to speed on the digital
earlier suspended trading of economy. TCS is the largest of a coterie of transition with the rise of automa- Jain, an analyst with Mumbai-based era.
their shares – both dropped India’s most valuable company firms including Infosys Ltd that put In- tion, mobile, artificial intelligence and Emkay Global Financial Services. “If they need to compete with IBM
over 10% in late trade gained more than 6% yesterday after dian technology on the map, by taking cloud computing – converging trends Its digital revenue has expanded by and Accenture, they have to do far bet-
yesterday. unveiling better-than-expected earn- over many of the back-office support that’ve pushed clients away from the 30% on a trailing 12-month basis, he ter,” said DD Mishra, research director
ings, taking its market capitalisation functions for household names from labour-intensive back-office pro- estimates. at Gartner Inc.
T
he battle for control of India’s Fortis Health- business from the larger company to form a new a government investigation of the firm’s stating a reason, but it is unusual to impose mainly centred around large holdings of
care Ltd intensified after KKR-backed Ra- company, which will exclude Fortis’ stake in Indian chairman, three sources briefed on the a blanket ban on a number of company short-term debt.
diant Life Care Private Ltd entered the fray diagnostics chain SRL Ltd. matter have told Reuters. executives. Shanghai-based CEFC has around 44bn
with an offer to buy more than a quarter of the cash- The all-cash offer to shareholders of the proposed The ban affects dozens of CEFC staff at the The travel ban is another measure that yuan ($6.94bn) of short-term borrowing
strapped company’s hospital business. new company is Rs126 per share, Radiant said. vice president-level and above, the people Chinese authorities are taking amid a due by the first half of 2018, according to its
In its non-binding offer, Radiant, the fifth This offer values the whole of Fortis at Rs165 per said. crackdown on companies that have 2017 half-year financial report disclosed to
suitor for Fortis, proposed on Thursday to make share, or Rs85.58bn ($1.30bn), including the SRL The exact timing of the ban is unclear. engaged in highly-leveraged financial deals onshore bondholders.
an investment and re-structure the company, stake. One of the sources said it has been in place and that hold large amounts of corporate Ahead of Ye’s investigation, CEFC was in
Fortis said in a filing that had Radiant’s offer let- The offer is contingent on, among others, Radi- since mid-February and another said it debt. talks with Chinese shadow lenders for
ter attached to it. ant being able to buy 26% or more shares of the pro- started last month. In February, the Chinese government seized short-tem loans with annual rates of as
“I think now, we will have revised offers coming,” posed new company. The three sources said they were briefed control of Anbang Insurance Group Co Ltd much as 36% to make up its cash shortfall,
said Gaurang Shah, head investment strategist at Fortis shares were up 1% yesterday afternoon at by company executives that attempted to and said its chairman had been prosecuted. Reuters reported in March.
Geojit Financial Services. Rs150, in a broader market that was down 0.3%. travel overseas and were denied exit from Late on Thursday, Huarong Asset In March, Guosheng Group, an investment
Fortis also said on Thursday that it set up an ad- The keen interest in Fortis, which runs about 30 China. Management Co Ltd said Lai Xiaomin, the firm owned by the Shanghai government,
visory committee to evaluate binding bids. hospitals in India, comes as companies and inves- The Shanghai-based conglomerate, which company chairman, had stepped down was tasked with evaluating CEFC’s financial
The committee is expected to give its recommen- tors look to tap soaring demand for private health- grew from a niche oil trader to a $25bn following a Reuters report earlier this week position as part of a restructuring and
dation to the board on April 26. care in the South Asian nation against the backdrop company, has faced increasing scrutiny that he was being investigated for suspected takeover process, two sources told Reuters
The company has become the target of a takeover of a stretched public healthcare system. after its chairman, Ye Jianming, was put “serious discipline violations”, a euphemism at the time.
battle that includes offers from China’s Fosun In- Private hospitals could also be boosted from under investigation for suspected economic for graft. Reuters reported earlier this month that
ternational and Malaysia’s IHH Healthcare. Prime Minister Narendra Modi’s plans to imple- crimes earlier this year. Huarong’s shares fell more than 10% a creditor had taken legal action against
Both offers, however, are non-binding. ment a healthcare programme aimed at providing CEFC did not respond to multiple calls for yesterday. CEFC, even as China Development Bank
The other two offers – from local rival Manipal insurance cover to about half of India’s population. requests for comment. CEFC made a splash last year agreeing to tried to dissuade lenders from taking
Health Enterprises and a consortium of two promi- KKR & Co owns a 49% stake in Radiant with its The sources could not indicate which buy a 14.16% stake in Russia’s Rosneft for action.
nent Indian business families, Hero Enterprise and $200mn investment in 2017, Radiant said.
Gulf Times
4 Saturday, April 21, 2018
BUSINESS
Pakistan to launch National Savings Bond in Gulf states
Internews He said that the selected lead man- certificate bond within the current fiscal age in Gulf countries where the National be a script less retail certificates in both Akbar from HaidermotaBNR commented
Islamabad ager would suggest fixed rate on this year but investment will start pouring in Savings Scheme (NSS) wanted to deepen the US dollar and Pakistan rupee, which on the legal aspects of the proposed
offshore dollar bond which would be by June in this fiscal and months coming its footprint by attracting investments are being initially launched in Gulf Co- product.
100 to 150 basis points less than Sukuk in next financial year 2018-19. from overseas Pakistanis. “We will attract operation Council (GCC) countries. Zafar Masud, director general, National
In a bid to attract dollar investment and Eurobond but it might be higher This scheme is expected to be offshore investment into this dollar bond,” National Savings desires to hire Savings, answered the queries raised by
from millions of overseas Pakistanis, the than the market rate in the respective launched before May 30, 2018 and it will said the official. services of a bank or financial institution the participants and clarified the issues
government has sought applications for GCC countries in order to lure overseas remain on top for attracting investments According to official announcement which has got comprehensive and robust related to the new scheme of National
selection of lead managers in order to Pakistanis for making investment in this from offshore investors and its markup made here yesterday, the National Sav- operations, custody business and strong Savings. Masud described the process of
launch offshore retail bond for obtain- saving certificate. will be paid simultaneously in both US ings, along with their Advisers EY Ford compliance mechanism with the local OPSCs products structuring as first-of-its-
ing $1bn investment from Gulf countries “This bond had nothing to do with lat- dollar and rupee components which one Rhodes and HaidermotaBNR organised a presence in Pakistan. After the hiring of kind in the world given its professional
including Saudi Arabia, UAE, Qatar and est Amnesty Scheme,” he said and added will be liked by the investors. pre-bid conference in Karachi with local the MTI, the OPSCs product is expected to process and management undertaken by
others. that the local Pakistanis would not be “We can attract $1bn with launch of and international banks for selection be launched by May 30, 2018 in the target National Savings.
“This dollar/rupee bond will be allowed to invest in this scheme because Overseas Pakistanis Savings Certificates of the lead manager for the upcoming markets. Zafar Masud thanked all the partici-
launched around May 30 this year it could pave the way for dollarisation if (OPSCs),” top official sources confirmed product specifically for the overseas Huzefa Mazahir of EY Ford Rhodes pants for joining the pre-bid conference
with maturity period of 3 to 5 years for the government allowed them to invest in yesterday. Pakistanis. briefed the participants about the salient call. The participants from the World
overseas Pakistanis. We are estimating this scheme. The CDNS has sought applications till The government has decided to launch features of the OPSCs and described Bank, Standard Chartered, DIB Pakistan,
to attract $1bn investment in one year,” The government has granted permis- April 30, 2018 for selection of lead man- a retail bond under the platform of Na- the objectives comprehensively which UBL, MCB, Samba Bank, Pakistan Stock
Director General National Savings Zafar sion to Central Directorate of National ager probably comprising consortium tional Savings called Overseas Pakistanis National Savings desires to attain through Exchange and other financial institutions
confirmed. Savings (CDNS) for launching saving of a few selected banks having patron- Savings Certificates (OPSCs). OPSCs will hiring of the MTI for OPSCs product. Ali joined the pre-bid conference.
UK firms
Australia’s IAG to sell SE Asia announce
investment
businesses in regional retreat plans in
Reuters
Hong Kong/Singapore
Pakistan
Internews
I
nsurance Australia Group is set to Karachi
sell its four Southeast Asian busi-
nesses in deals that could be valued
T
at about $500mn, under a review of its he UK firms have an-
Asian operations, three people with nounced £100mn
knowledge of the matter said. (Rs16.3bn) investment in
IAG, Australia’s biggest general in- Pakistan in oil and other sectors.
surer by market share, has ventures in According to the British High
Malaysia, Thailand, Vietnam and In- Commission, oil giant Shell is
donesia in Southeast Asia, and could planning to set up around one-
complete the sale process by the third hundred new fuel stations along
quarter, the people said. the CPEC route at selective loca-
Despite years of investments, Asia tions representing up to £13mn
has proved a challenge for IAG. of investment by 2020.
The insurer posted an underwriting Global consumer brand Uni-
loss in Asia of A$6mn ($4.63mn) in its lever will also invest £86mn in
fiscal first half of 2018, although that new manufacturing capacity
loss narrowed from A$9mn in the sec- at its four factories in Pakistan,
ond half of 2017. acknowledging the country’s
Asia’s overall earnings contribu- high potential for long-term,
tion decreased to A$10mn in 2017 from sustainable growth, and high-
A$26mn a year earlier. lighting the increasing uptake of
A spokeswoman for IAG in Australia consumer goods products across
said the insurer had announced plans the country.
to review Asia strategy, not to exit the UK Trade Minister Greg
region. Hands and Pakistan’s Minister
She declined to comment on whether for Commerce Pervaiz Malik
the company had made a decision to welcomed the investment into
exit those specific markets. fuel stations and manufactur-
IAG also operates in India and owns ing at a meeting in London
a 16.9% stake in Bohai Property Insur- yesterday.
ance Company Ltd in China. They were joined by the Prime
IAG said in February that it was re- Minister’s Trade Envoy to Pa-
viewing its Asian operations in the face kistan Rehman Chishti MP. It
of a lack of buying opportunities to follows Minister Hands’ visit to
boost growth in a region attractive for Pedestrians walk past the headquarters of Insurance Australia Group in central Sydney. IAG, Australia’s biggest general insurer by market share, has ventures in Malaysia, Pakistan in September last year
its low penetration rates but which is Thailand, Vietnam and Indonesia in Southeast Asia. where the UK and Pakistan con-
also very competitive. firmed their ambition to increase
An exit would mean IAG joins other Group. It has a 99% stake in Thailand’s Southeast Asia, said one of the people Fosun did not immediately respond person said. This month, IAG said it bilateral trade and the UK con-
Australian financial firms, includ- Safety Insurance, according to its Feb- with knowledge of the matter. to Reuters queries. Tokio Marine and expected a “potential inflow” of capital firmed its intention to maintain
ing Commonwealth Bank of Australia ruary investor report. The Malaysian entity could be ap- Maybank declined to comment. from Asian divestments. the preferential access Pakistan
(CBA), that are retreating from Asian The insurer also holds an 80% stake pealing to firms including Maybank One source said bids for IAG’s busi- It did not provide financial details on receives to the UK to support
insurance markets to focus on their in Indonesian non-life insurer PT As- Holdings’ insurance venture, Etiqa, nesses in Thailand, Indonesia and Viet- the impact of the review, but Macquarie Pakistani economic growth after
home businesses. uransi Parolamas and has 63% of AAA Japanese insurer Tokio Marine and nam were expected in a few weeks. analysts estimate it will ultimately exit the UK leaves the EU.
IAG owns a 49% stake in its Malay- Assurance Corp in Vietnam. Chinese insurer Fosun, the people said, The Malaysian divestment process most markets in the region and free up Trade Minister Greg Hands
sian venture, AmGeneral Holdings Bhd, Malaysia and Thailand account for declining to be named as they were not is likely to be completed in the current about A$800mn ($621mn) of capital in said as the prime minister has
the general insurance arm of AmBank the bulk of its premium income in authorised to speak to the media. quarter or early third quarter, another the next few years. made clear, the Commonwealth
has a unique opportunity to
boost its trade links and drive
prosperity and growth among its
members.
A
n Australian inquiry into finan- dering – in a tight spot. “They are not victimless crimes,” Government data prepared for the The UK is Pakistan’s biggest
cial sector misconduct claimed Faced with daily revelations of Morrison told a press conference. “We Royal Commission, which has the pow- trade partner in the EU, with
its first scalp yesterday as the wrongdoing at the highest levels of need to set the tone... so people under- er to subpoena documents and com- bilateral trade increasing 8%
CEO of the country’s largest wealth corporate Australia, the government stand that misleading regulators about pel top executives to testify in public, between 2015 and 2016 and 2%
manager stepped down over rev- is now under mounting pressure to serious issues such as this is no victim- shows more than 80,000 consumers of all Britons tracing their roots
elations of board-level deception and extend the inquiry beyond its Febru- less offence, and it won’t carry a vic- have been given bad advice by financial back to Pakistan.
misappropriation of funds. ary 2019 deadline, meaning it would timless penalty.” institutions over the past decade, cost- Greg Hands also reiterated
The departure of AMP Ltd’s Craig run concurrently with the next fed- The changes were the result of years ing them a total A$5bn ($3.9bn). the UK’s ambition to continue
Meller came as the government vowed eral election. Treasurer Scott Morrison, of planning and were not a knee-jerk This week’s hearings have been par- its preferential trade terms with
to double prison terms for financial who once dismissed opposition calls reaction to the inquiry, he said. ticularly brutal. Pakistan, supporting economic
crimes, dramatically increase penalties for a Royal Commission as “crass pop- AMP executives admitted in testi- A nurse gave tearful testimony on development, after it leaves the
and ramp up the investigative powers ulism”, yesterday said the government mony this week that the company had Thursday about losing her home after EU, continuing the terms of the
of the corporate regulator following would raise criminal penalties for cor- lied to the corporate watchdog for al- taking advice from Westpac Banking GSP Plus scheme which offers
shocking admissions of misconduct to porate crimes to a maximum of 10 years most a decade to cover a practice of Corp, while lawyers presented evidence low tariff access to the EU in ex-
the Royal Commission inquiry. in jail, from 5 years currently. charging customers for services it did that Commonwealth Bank of Australia, change for progress on human
Meller: Charged with board-level Not only has the start of the year- Offending companies would face not provide. the country’s biggest bank, knowingly rights, labour rights, environ-
deception and misappropriation long inquiry been a publicity disaster fines up to A$210mn ($162mn), versus Chairman Catherine Brenner issued charged dead clients for counsel for mental protection and tackling
of funds. for Australia’s major lenders, it has also A$10mn now. Australian Securities an unreserved apology for “misconduct years. corruption.
India bond yields spike after monetary panel meeting minutes flag inflation risks
Reuters cluding an increase in minimum sup- commodative policy in the first place,” predicted in February. The benchmark markets and the government buying prices which have been a major driv-
Mumbai port prices for farmers and high and asked a senior bond trader at a private 10-year bond yield rose as much as 17 dollars to make some defence pay- er for bonds in recent months.
volatile crude oil prices, the minutes bank. basis points to 7.80% in early trade, its ments are the reasons the dollar/ The stock market took the min-
released after market hours on Thurs- “Market sentiment is extremely highest level since February 22. rupee moved up,” said Murthy Na- utes calmly with India’s broader NSE
I
ndian bond yields spiked while the day showed. bad because when you lower the in- It was trading at 7.74% by 0635 garajan, head of fixed income at Tata share index trading down 0.25% yes-
rupee dropped to its lowest in more Viral Acharya, a deputy governor at flation projection by 70 basis points, GMT. Asset Management. terday in line with its Asian peers
than a year yesterday after minutes the central bank, said he would “de- why would you have such an hawkish The Indian rupee was at 66.01/02 Traders said expectations for a rate while the banking index was down
of the monetary policy committee’s cisively” vote to begin “withdrawal of stance,” he added, predicting a range per dollar versus its previous close of hike in 2018 have risen in the wake of 0.8%.
last meeting suggested it was likely to accommodation” at the next monetary of 7.60% to 8% on the 10-year in the 65.7950. the minutes. India’s headline inflation was
take a more hawkish stance – starting policy meeting in June. near term. It touched 66.08 in early deals, its The said they would continue to be 4.28% in March versus a year ear-
as early as June. “The MPC panel shifted to a neu- The MPC sharply trimmed its April- weakest level since March 14, 2017. cautious while buying more debt and lier, easing from 4.44% February, but
The monetary policy committee tral stance in the February 2017 policy September inflation projection to “Higher oil prices, foreign insti- monitor the inflation data for further well above the central bank’s medi-
members flagged several concerns, in- meeting, so do we even have an ac- 4.7% to 5.1% from the 5.1% to 5.6% it tutional investors selling in the debt guidance as well as global crude oil um-term target of 4%.
Gulf Times
Saturday, April 21, 2018 5
BUSINESS
DJIA WORLD INDICES
Company Name Lt Price % Chg Volume Indices Lt Price Change
Dow Jones Indus. Avg 24,463.19 -201.70
Apple Inc 167.04 -3.33 35,428,201 S&P 500 Index 2,675.03 -18.10
Microsoft Corp 94.45 -1.73 11,958,169 Nasdaq Composite Index 7,157.31 -80.75
Exxon Mobil Corp 78.67 -0.94 4,579,149 S&P/Tsx Composite Index 15,484.67 +30.25
Johnson & Johnson 126.56 -0.78 2,992,716 Mexico Bolsa Index 48,384.82 -360.46
General Electric Co 14.51 3.75 107,607,022 Brazil Bovespa Stock Idx 85,419.21 -405.05
Jpmorgan Chase & Co 111.88 0.14 6,313,594 Ftse 100 Index 7,368.17 +39.25
Procter & Gamble Co/The 73.98 -1.30 6,316,984 Cac 40 Index 5,412.83 +21.19
Walmart Inc 87.21 -0.78 2,559,982 Dax Index 12,540.50 -26.92
Verizon Communications Inc 48.02 -0.85 3,832,886 Ibex 35 Tr 9,884.20 +16.20
Pfizer Inc 36.66 0.34 7,040,776
Nikkei 225 22,162.24 -28.94
Visa Inc-Class A Shares 123.96 0.00 2,937,305
Japan Topix 1,751.13 +0.95
Chevron Corp 122.05 -1.34 2,679,904
Hang Seng Index 30,418.33 -290.11
Coca-Cola Co/The 43.70 -1.38 5,422,322
All Ordinaries Indx 5,964.39 -11.98
Intel Corp 51.17 -2.02 11,815,751
Nzx All Index 1,481.66 -8.47
Merck & Co. Inc. 58.95 0.53 4,413,020
Bse Sensex 30 Index 34,415.58 -11.71
Cisco Systems Inc 43.94 -1.40 8,368,872
Nse S&P Cnx Nifty Index 10,564.05 -1.25
Home Depot Inc 176.99 -0.05 2,093,488
Straits Times Index 3,573.38 -25.35
Intl Business Machines Corp 144.90 -1.90 3,450,658
Karachi All Share Index 32,748.18 +10.67
Walt Disney Co/The 100.14 -0.74 2,535,758
Jakarta Composite Index 6,337.70 -18.21
Unitedhealth Group Inc 233.79 -0.84 912,112
3M Co 217.21 -0.75 1,102,879
Mcdonald’s Corp 159.56 0.02 1,336,340
Nike Inc -Cl B 65.95 0.33 4,456,288 TOKYO
United Technologies Corp 123.65 -0.16 2,695,571
Boeing Co/The 337.31 -0.98 1,302,996 Company Name Lt Price % Chg Volume
Goldman Sachs Group Inc 253.66 -0.20 1,123,603
Rakuten Inc 779.30 -1.67 13,123,400
American Express Co 100.94 -1.40 2,147,940
Kyocera Corp 6,228.00 -0.56 1,743,400
Caterpillar Inc 153.97 -0.61 1,636,157
Nissan Motor Co Ltd 1,135.00 -0.04 10,228,700
Travelers Cos Inc/The 136.37 -0.16 501,078
Hitachi Ltd 790.00 0.09 10,953,000
Takeda Pharmaceutical Co Ltd 4,857.00 -4.67 8,307,500
Jfe Holdings Inc 2,273.00 0.00 1,748,400
Ana Holdings Inc 4,229.00 1.05 851,400
FTSE 100 Mitsubishi Electric Corp 1,714.00 -2.39 5,547,600
Sumitomo Mitsui Financial Gr 4,522.00 0.69 5,771,000
Company Name Lt Price % Chg Volume Honda Motor Co Ltd 3,682.00 -0.24 3,920,300
Fast Retailing Co Ltd 47,510.00 0.87 559,100 A visitor passes a London Stock Exchange sign inside the main atrium of the London Stock Exchange Group headquarters in
Wpp Plc 1,146.50 -0.82 4,062,546
Worldpay Group Plc 0.00 0.00 -
Ms&Ad Insurance Group Holdin 3,600.00 0.64 1,607,900 London. The FTSE 100 index gained 0.5% at 7,348.17 points yesterday.
Kubota Corp 1,829.00 0.05 2,001,200
Wolseley Plc 0.00 0.00 -
Seven & I Holdings Co Ltd 4,760.00 -0.31 2,123,100
Wm Morrison Supermarkets 234.30 0.56 8,521,015
Inpex Corp 1,419.00 0.64 4,194,200
T
Sainsbury (J) Plc 263.90 -0.26 7,270,273 he pound fell yesterday after could vote for a hike in May. at 12,540.50 points at close. The EURO
Mazda Motor Corp 1,472.00 -0.24 3,334,100
Sage Group Plc/The 630.80 0.13 2,516,326
Komatsu Ltd 3,708.00 -0.62 5,295,400 Bank of England governor Mark The London stock market’s FTSE STOXX 50 ended 0.2% up at 3,494.20
Abi Sab Group Holding Ltd 0.00 0.00 -
Rsa Insurance Group Plc 653.00 0.99 1,885,992
West Japan Railway Co 7,588.00 0.34 429,900 Carney shook the market’s con- 100 index gained 0.5% at 7,348.17 points.
Royal Mail Plc 560.00 -0.53 3,232,185
Murata Manufacturing Co Ltd 14,215.00 -1.97 888,300 fidence in an early interest rate hike, points, outperforming its European Wall Street was down in the late
Kansai Electric Power Co Inc 1,484.00 0.07 3,318,400 dealers said. peers, as the pound’s weakness boost- New York morning trading as investors
Royal Dutch Shell Plc-B Shs 2,548.00 0.51 4,310,364
Denso Corp 5,919.00 0.80 1,937,600
Royal Dutch Shell Plc-A Shs 2,497.00 0.52 5,289,857 “Carney put an end to the debate, ed share prices of multinationals listed worried about rising bond yields, with
Sompo Holdings Inc 4,419.00 1.10 759,800
Royal Bank Of Scotland Group 274.20 0.73 10,693,073
Daiwa House Industry Co Ltd 4,024.00 -0.05 1,155,500
saying that markets should not bet on in London which derive much of their some fearing that they may be a pre-
Rolls-Royce Holdings Plc 866.20 -1.21 4,256,421 a May rate rise,” noted Jasper Lawler, earnings in dollars. cursor to higher Fed rates.
Jxtg Holdings Inc 713.00 0.81 13,835,100
Rio Tinto Plc 3,987.00 0.89 2,765,979
Nippon Steel & Sumitomo Meta 2,422.50 0.06 2,929,700 head of research at London Capital In company activity, Irish build- While worries about the Syrian
Rexam Ltd 0.00 0.00 -
Relx Plc 1,544.00 1.21 2,177,800
Suzuki Motor Corp 5,747.00 -1.00 2,116,600 Group. ing materials group CRH topped the crisis and a potential China-US trade
Reckitt Benckiser Group Plc 5,625.00 -2.78 3,871,686
Nippon Telegraph & Telephone 5,169.00 -0.08 2,356,300 Markets had been widely pricing in a FTSE risers board, rising almost 4% on war keep dealers on edge, focus has
Ajinomoto Co Inc 1,973.50 0.15 1,398,300 for now moved to the corporate arena
Randgold Resources Ltd 5,742.00 -0.31 357,753 quarter-point interest rate hike in May, swirling speculation over a US listing
Mitsui Fudosan Co Ltd 2,704.00 -0.07 2,456,000
Prudential Plc 1,875.00 1.13 3,594,807
Ono Pharmaceutical Co Ltd 2,482.50 -0.02 2,985,100
to 0.75%, amid a pick-up in UK wage and share buybacks, dealers said. as the earnings season gets into full
Provident Financial Plc 690.40 -0.38 280,166
Daikin Industries Ltd 12,855.00 0.23 783,100 growth, but British economic data this Among big losers, British consumer swing.
Persimmon Plc 2,717.00 0.56 721,638 Oil prices ran into profit-taking after
Bank Of Yokohama Ltd/The 0.00 0.00 - week, including a sharp drop in retail health giant Reckitt Benckiser saw its
Pearson Plc 784.00 1.08 2,968,627
Paddy Power Betfair Plc 7,305.00 -0.48 80,469
Toray Industries Inc 1,022.50 -0.29 3,087,300 sales, had started to dampen those ex- share price dive on a poor trading up- US President Donald Trump targeted
Old Mutual Plc 242.60 0.04 5,102,882
Astellas Pharma Inc 1,582.00 -0.63 4,199,700 pectations. date. Opec for what he said were artificially
Bridgestone Corp 4,572.00 -0.17 3,208,000 “Prepare for a few interest rate rises Shire Pharmaceuticals fell sharp- high oil prices, saying they “will not be
Next Plc 5,220.00 -0.11 418,805
Sony Corp 5,385.00 0.26 5,184,800
National Grid Plc 812.90 0.33 8,017,296 over the next few years,” Carney told ly as fellow Irish drug maker Aller- accepted”.
Hoya Corp 5,772.00 -1.05 1,059,700
Mondi Plc 2,014.00 0.40 944,535
Sumitomo Mitsui Trust Holdin 4,497.00 0.67 868,200
the BBC.”I don’t want to get too fo- gan ruled out a takeover bid to rival His comments on Twitter came as
Merlin Entertainment 346.20 -1.28 4,902,714 cused on the precise timing, it is more an offer by Japan’s Takeda, having ministers from some top global crude
Japan Tobacco Inc 2,892.00 -2.38 11,109,900
Mediclinic International Plc 690.60 2.37 2,020,620
Osaka Gas Co Ltd 2,273.50 -0.35 721,300 about the general path.” earlier said it was mulling such a producers met in Saudi Arabia to dis-
Marks & Spencer Group Plc 280.60 0.00 5,164,456
London Stock Exchange Group 4,250.00 0.00 357,876
Sumitomo Electric Industries 1,657.50 0.09 2,190,600 Higher interest rates typically move. cuss maintaining limits on oil produc-
Lloyds Banking Group Plc 65.70 -0.59 145,911,289
Daiwa Securities Group Inc 672.00 1.04 7,323,000 boost a currency as holding it gener- Takeda, meanwhile, slightly raised tion.
Softbank Group Corp 8,277.00 0.73 3,749,600
Legal & General Group Plc 275.20 0.62 13,722,301
Mizuho Financial Group Inc 195.30 0.15 103,068,200
Land Securities Group Plc 971.80 1.18 1,339,395
Nomura Holdings Inc 636.90 0.08 8,846,900
Kingfisher Plc 309.00 1.25 10,867,781
0.91
HONG KONG HONG KONG
Daiichi Sankyo Co Ltd 3,758.00 1,253,900
Johnson Matthey Plc 3,265.00 0.06 395,502
Subaru Corp 3,514.00 -0.28 3,478,400
Itv Plc 144.95 -0.24 8,026,562 Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume
Ntt Docomo Inc 2,761.50 0.04 2,858,700
Intu Properties Plc 202.30 4.09 6,492,726
Sumitomo Realty & Developmen 4,050.00 0.87 898,000 Aluminum Corp Of China Ltd-H 5.02 -2.52 58,375,788 Hong Kong & China Gas 16.16 -0.37 7,724,147
Intl Consolidated Airline-Di 611.00 -0.23 3,720,748
Sumitomo Metal Mining Co Ltd 4,882.00 1.37 2,219,900 Bank Of East Asia Ltd 33.40 -0.30 1,760,310 Hong Kong Exchanges & Clear 260.20 -0.08 4,821,027
Intertek Group Plc 4,926.00 0.41 234,092
Orix Corp 1,894.00 0.16 2,932,100 Bank Of China Ltd-H 4.17 -1.18 273,429,020 Hsbc Holdings Plc 76.80 0.66 34,244,927
Intercontinental Hotels Grou 4,370.00 -0.57 466,662
Asahi Group Holdings Ltd 5,480.00 -0.33 1,223,100 Bank Of Communications Co-H 6.24 -0.95 29,679,322 Hutchison Whampoa Ltd 0.00 0.00 -
Inmarsat Plc 375.80 3.24 2,719,237
Keyence Corp 63,490.00 0.14 291,000 Belle International Holdings 0.00 0.00 - Ind & Comm Bk Of China-H 6.77 -1.74 221,729,030
Informa Plc 730.60 0.16 4,537,077
Nidec Corp 16,785.00 0.27 504,700 Boc Hong Kong Holdings Ltd 38.95 -0.51 7,678,310 Li & Fung Ltd 3.91 -0.26 10,167,000
Imperial Brands Plc 2,402.50 2.02 2,251,152
Isuzu Motors Ltd 1,652.50 0.27 1,121,700 Cathay Pacific Airways 12.46 -0.16 3,896,100 Mtr Corp 43.40 -0.12 2,403,040
Hsbc Holdings Plc 701.20 1.52 24,973,642
Unicharm Corp 3,031.00 1.00 957,400 Ck Hutchison Holdings Ltd 93.00 -0.75 2,750,491 New World Development 11.32 -0.53 7,157,955
Hargreaves Lansdown Plc 1,736.00 0.00 454,067
Shin-Etsu Chemical Co Ltd 10,670.00 -4.86 2,295,300 China Coal Energy Co-H 3.17 -1.55 14,138,000 Petrochina Co Ltd-H 5.87 -1.18 184,853,657
Hammerson Plc 540.00 3.97 8,203,503
Smc Corp 42,360.00 -2.06 183,800 China Construction Bank-H 8.06 -1.47 227,840,100 Ping An Insurance Group Co-H 81.50 -0.31 48,294,397
Glencore Plc 380.65 0.70 48,853,410
Mitsubishi Corp 2,955.50 0.60 4,039,000 China Life Insurance Co-H 21.75 -0.68 30,072,618 Power Assets Holdings Ltd 58.95 -0.51 3,057,089
Glaxosmithkline Plc 1,430.00 1.61 7,593,052
Nintendo Co Ltd 45,900.00 3.94 3,151,200 China Merchants Port Holding 17.16 -1.38 2,812,288 Sino Land Co 13.18 -1.20 2,411,248
Gkn Plc 467.90 -2.03 9,182,653
Eisai Co Ltd 7,074.00 -0.27 803,700 China Mobile Ltd 73.10 0.41 22,880,978 Sun Hung Kai Properties 123.10 -1.36 3,236,817
Fresnillo Plc 1,298.00 -0.27 486,240
Sumitomo Corp 1,914.00 1.73 3,984,400 China Overseas Land & Invest 26.05 -2.07 18,123,896 Swire Pacific Ltd - Cl A 77.30 -1.90 1,354,992
Experian Plc 1,606.50 2.00 1,905,404
Canon Inc 3,882.00 0.31 2,934,400 China Petroleum & Chemical-H 7.50 -2.60 110,216,711 Tencent Holdings Ltd 400.20 -1.38 18,108,773
Easyjet Plc 1,603.00 -0.31 1,667,807
Japan Airlines Co Ltd 4,222.00 0.76 959,900 China Resources Beer Holdin 34.60 -1.56 3,115,646 Wharf Holdings Ltd 25.45 -0.59 4,184,920
Dixons Carphone Plc 210.20 0.19 3,176,370
Direct Line Insurance Group 372.70 1.03 6,071,984 China Resources Land Ltd 28.60 -2.05 11,877,029
Diageo Plc 2,465.00 0.04 2,973,559 China Resources Power Holdin 14.44 -0.55 7,398,933
SENSEX China Shenhua Energy Co-H 19.36 -2.02 17,432,512
Dcc Plc
Crh Plc
6,825.00
2,525.00
-0.80
4.08
468,808
2,419,784 China Unicom Hong Kong Ltd 10.40 -0.95 34,076,248 GCC INDICES
Compass Group Plc 1,503.00 0.87 2,014,025 Company Name Lt Price % Chg Volume Citic Ltd 11.40 -1.21 4,075,615 Indices Lt Price Change
Coca-Cola Hbc Ag-Di 2,496.00 -0.24 374,397 Clp Holdings Ltd 81.05 -0.18 1,251,876 Doha Securities Market 9,196.62 +141.60
Zee Entertainment Enterprise 587.70 -0.88 895,678
Centrica Plc 146.20 0.34 15,536,148 Cnooc Ltd 12.92 -2.42 68,980,818 Saudi Tadawul 8,277.14 +131.01
Yes Bank Ltd 308.55 -3.12 23,411,499
Carnival Plc 4,673.00 1.32 488,130 Cosco Shipping Ports Ltd 6.49 -0.31 2,429,550 Kuwait Stocks Exchange 6,633.44 +29.93
Wipro Ltd 298.05 1.91 3,577,207
Capita Plc 159.80 5.72 7,155,778 Esprit Holdings Ltd 2.35 -4.08 6,471,512 Bahrain Stock Exchage 1,301.40 -0.58
Vedanta Ltd 308.60 -0.99 14,176,221
Burberry Group Plc 1,735.00 1.20 1,307,827 Fih Mobile Ltd 1.39 -6.71 13,614,727 Oman Stock Market 4,759.65 +7.70
Ultratech Cement Ltd 4,080.90 -0.55 198,337
Bunzl Plc 2,130.00 0.52 690,607 Hang Lung Properties Ltd 18.22 -0.76 2,759,111 Abudhabi Stock Market 4,706.56 +24.48
Tech Mahindra Ltd 700.50 5.31 5,777,167
Bt Group Plc 241.80 0.62 17,753,538 Hang Seng Bank Ltd 194.30 0.10 1,838,576 Dubai Financial Market 3,082.09 -5.66
Tata Steel Ltd 606.20 -2.53 6,798,855
British Land Co Plc 666.00 0.76 3,020,748 Henderson Land Development 50.25 -0.30 1,678,544
Tata Power Co Ltd 85.90 -1.04 4,268,941
British American Tobacco Plc 3,700.00 1.37 8,041,413
Tata Motors Ltd 336.00 0.52 12,711,284
Bp Plc 518.20 0.33 26,093,133
Tata Consultancy Svcs Ltd 3,402.45 6.62 10,004,786
Bhp Billiton Plc 1,534.40 0.91 7,793,701
Sun Pharmaceutical Indus 505.30 -0.77 4,558,704
Berkeley Group Holdings/The 3,966.00 0.41 614,674 “Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The
State Bank Of India 241.20 -2.01 16,723,024
Barratt Developments Plc 559.60 1.19 3,943,915
Reliance Industries Ltd 927.90 -1.53 3,564,445 accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended
Barclays Plc 215.50 0.61 38,662,552
Punjab National Bank 93.60 -2.60 23,753,956 as an offer or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank
Bae Systems Plc 601.00 1.45 13,560,244 or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on
Power Grid Corp Of India Ltd 207.20 -0.43 3,155,598
Babcock Intl Group Plc 744.60 0.62 889,676
Oil & Natural Gas Corp Ltd 182.35 -0.87 1,792,001 this data.”
Aviva Plc 522.00 -0.61 13,826,125
Ntpc Ltd 174.35 -1.80 3,032,075
Astrazeneca Plc 4,976.00 0.41 1,421,778
Maruti Suzuki India Ltd 9,025.00 -0.58 318,208
Associated British Foods Plc 2,631.00 -0.49 897,503
Ashtead Group Plc 2,071.00 0.10 1,688,134
Mahindra & Mahindra Ltd
Lupin Ltd
799.50
799.90
-0.30
1.21
2,621,194
1,483,477
CURRENCIES
Arm Holdings Plc 0.00 0.00 - DOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI KUWAITI
Larsen & Toubro Ltd 1,365.05 -1.44 1,390,221
Antofagasta Plc 952.80 -0.98 2,247,067 DINAR DINAR
Kotak Mahindra Bank Ltd 1,152.85 -0.09 1,242,850
Anglo American Plc 1,767.20 -0.91 4,856,895
Itc Ltd 276.20 -0.41 12,001,744
Admiral Group Plc 1,997.00 1.14 720,124
Infosys Ltd 1,178.45 4.03 12,698,625
3I Group Plc 917.80 0.09 1,135,185
Indusind Bank Ltd 1,812.85 -1.10 1,902,741
#N/A 0.00 0.00 -
Idea Cellular Ltd 70.85 -0.14 8,794,790
Icici Bank Ltd 282.15 -2.57 20,311,929
Housing Development Finance 1,834.15 -1.32 3,506,870
TOKYO Hindustan Unilever Ltd 1,467.80 0.94 696,187
Hindalco Industries Ltd 262.10 -1.00 24,476,862
Company Name Lt Price % Chg Volume Hero Motocorp Ltd 3,742.70 0.51 407,642
East Japan Railway Co 10,190.00 1.09 605,400 Hdfc Bank Limited 1,955.90 0.87 2,414,565
Itochu Corp 2,139.50 -0.51 4,086,600 Hcl Technologies Ltd 1,062.35 4.30 4,923,980
Fujifilm Holdings Corp 4,357.00 -0.07 905,200 Grasim Industries Ltd 1,100.80 -0.30 366,809
Yamato Holdings Co Ltd 2,895.50 1.54 1,660,000 Gail India Ltd 330.55 -1.43 4,096,922
Chubu Electric Power Co Inc 1,674.00 0.84 2,756,100 Dr. Reddy’s Laboratories 2,121.90 -0.67 279,730
Mitsubishi Estate Co Ltd 1,892.00 0.75 3,960,000 Coal India Ltd 292.05 3.13 2,609,948
Mitsubishi Heavy Industries 4,186.00 0.31 706,300 Cipla Ltd 589.05 0.80 1,725,900
Toshiba Corp 285.00 -1.38 20,573,000 Cairn India Ltd 0.00 0.00 -
Shiseido Co Ltd 6,925.00 3.48 2,246,700 Bosch Ltd 19,481.60 -0.35 12,716
Shionogi & Co Ltd 5,497.00 -0.33 1,269,800 Bharti Airtel Ltd 402.00 1.68 6,959,081
Tokyo Gas Co Ltd 2,846.50 0.07 1,041,300 Bharat Petroleum Corp Ltd 371.40 -1.37 12,426,086
Tokyo Electron Ltd 19,610.00 -2.05 1,589,400 Bharat Heavy Electricals 89.35 1.02 5,644,748
Panasonic Corp 1,581.50 0.89 5,858,300 Bank Of Baroda 143.60 -1.20 11,349,211
Fujitsu Ltd 661.80 -0.21 8,000,000 Bajaj Auto Ltd 2,852.70 -0.18 474,157
Central Japan Railway Co 20,795.00 -0.36 205,900 Axis Bank Ltd 505.70 -1.40 4,715,556
T&D Holdings Inc 1,738.00 2.12 2,252,500 Asian Paints Ltd 1,159.35 -0.48 758,169
Toyota Motor Corp 6,957.00 0.49 3,310,300 Ambuja Cements Ltd 246.60 -0.16 1,010,853
Kddi Corp 2,845.00 0.51 5,489,300 Adani Ports And Special Econ 381.15 -1.40 2,276,305
Nitto Denko Corp 8,401.00 -2.91 1,081,400 Acc Ltd 1,561.65 -0.62 296,965
Gulf Times
6 Saturday, April 21, 2018
BUSINESS/LEISURE
O
n Wednesday, the sec- sands of residents to leave. Enterprise Institute and former ing an economy that’s stuck in a
ond blackout in a week By cutting spending, improv- deputy director of the Interna- decade-long recession, will cut
hit Puerto Rico as the ing tax collections and taking tional Monetary Fund, said he’s spending for schools and munic-
decrepit power system went out steps to encourage businesses, concerned that some of the bil- ipalities and try to boost growth
again. Hours later, the territory’s the board is projecting that lions in US taxpayer aid destined through labour reforms and re-
federal oversight board said that Puerto Rico’s central govern- for the disaster recovery may ul- laxing certain regulations. Con-
if all goes as planned, the gov- ment can swing to a $6.7bn timately end up in the hands of gress created the federal board
ernment should soon start see- surplus over the next six years bondholders. in 2016 to address Puerto Rico’s
ing budget surpluses big enough before accounting for debt pay- “My concern is that they’re debt crisis, as part of legislation
to pay a sliver of its debt. ments. That’s about $400mn just going to use US taxpayer that also gave the island a path to
But residents like Marie Rivera more than a previous estimate money to bailout the creditors, filing a form of bankruptcy.
were doubtful — and a little an- from Governor Ricardo Rossello, but meantime the island is going Lachman, the former IMF of-
gry, too. whose steadily more sanguine A street sign damaged from Hurricane Maria on a road in Canovanas, Puerto Rico. The federal board, to languish,” Lachman said. ficial, said he questioned the
“It’s not fair to pay the bond- forecasts caused bond prices created by the US Congress, is trying to chart Puerto Rico’s resurrection from a financial crisis that built The federal board plans to cer- logic of any plan that paints a
holders, when the Puerto Rican to rally this year, even though over years, only to be temporarily worsened by the September storm that left its electricity system in tify the multi-year fiscal plan on rosy economic picture when the
people are still suffering the how much will be repaid will be tatters and caused thousands of residents to leave. Thursday in San Juan. Among island is facing recurrent and ac-
consequences of what Hurri- hashed out in bankruptcy court. other things, the plan calls for a celerating out-migration. The
cane Maria left us,” said Rivera, But the numbers are based live and do business, even seven power restoration efforts. Another on Wednesday, but earlier in- series of austerity measures, in- island has lost about 2% of its
a 38-year-old single mother and on the notion that Puerto Rico’s months after the storm. blackout that occurred last week, creases in surplus estimates have cluding cutting pension benefits population every year for the
hotel sales manager in San Juan. growth prospects have actu- Hospitals and the main in- affecting more than 800,000 cli- sparked rallies in Puerto Rico se- by an average of 10% beginning past four, without counting the
“This is the type of situation ally improved since Hurricane ternational airport temporarily ents, was caused by a fallen tree. curities, causing some prices to in 2020 to help curb spending massive but largely unaccounted
that leaves you wondering if it’s Maria slammed into the island as ran on emergency power. A gen- The new fiscal projection double since December. and repair a retirement system for exodus after Maria.
worth making all these sacrific- a powerful Category 4, battering erator fire filled the streets of a marks the latest boost to the es- General obligations with an that’s out of money. Governor “What kind of credibility can
es, or if it’s better to just go and infrastructure and hobbling its trendy San Juan neighbourhood timates for the financial recov- 8% coupon and maturing in Rossello has baulked at reduc- they have if they make one pro-
move to the States.” already feeble economy. Not long with smoke, and hundreds of ery of the territory, which is set 2035, the island’s most actively- ing pensions, saying it would jection before the island gets hit
The federal board, created before the plan was released, the businesses were forced to close. to receive about $62bn of fed- traded security, changed hands place an undue burden on public by a once in a lifetime hurricane,
by the US Congress, is trying to island lost power yet again, the The outage was attributed to eral aid and insurance money to on Wednesday for an average workers and retirees. The board and then suddenly it improves
chart Puerto Rico’s resurrection latest in a series of episodes that an excavator incident involving a help rebuild. The numbers were of 41.7 cents on the dollar, up maintains that there needs to be the situation?” said Lachman.
from a financial crisis that built show it’s still a volatile place to company subcontracted to help in released late in the trading day from a record-low 20.75 cents shared sacrifice, and any cuts re- “It just makes no sense at all.”
Sudoku Adam
Pooch Cafe
ACROSS DOWN
1. Why, in particular, the gas workers are 1. Is the English gentleman on the outside the Bound And Gagged
digging a hole? (4,6) stingy one? (5)
6. Keep half, I note, of the yarn (4) 2. Batting, I’m sure, and confident (2,2,5)
10. And speak angrily about what the 3. Transport by air (4,10)
children got dirty in? (4-3) 4. Containing a first rate performer: an enter-
11. The material is for a Miss Sharp (7) tainer (7)
12. Turned out again to have been cor- 5. Have the silly dupe thrown out that’s con-
rected (9) fessed (5,2)
13. The secret is almost out, but not in 7. Part in harmony, we’re told (5)
England (5) 8. Happy to do the number with the man (9)
14. Remains to puzzle you (5) 9. What the boxing gloves were bought for?
15. As a means to an end, it’s suitable (9) (5-4,5)
17. Write about a strange dream from 14. Unpleasant character whose father got
somewhere in Paris (5,4) fired? (3,2,1,3)
20. Coiled round and hurt (5) 16. Got even with (9)
21. Rows of instruments (5) 18. The man took Marie off to some place in
23. Gets some letters out? (9) Spain (7)
25. The charm of Dorothy’s sister Greta? (7) 19. Guaranteed to secure a certain object (7)
26. Repeat the number (7) 22. It’s the smallest field, by the way (5)
27. A communication of importance? (4) 24. Ante up or pass (5)
28. How the coot went for you? (4-6)
Weekly’s Solutions
Across: 1 Compacts; 5 Wastes; 10 Conversion Down: 1 Cockle; 2 Many a Time; 3 Avenues;
Table; 11 Leagues; 12 Respond; 13 Misspelt; 4 Tests; 6 Artisan; 7 Taboo; 8 Steadier; 9
15 Nonce; 18 Ewers; 20 Casts off; 23 Cowslip; Top Rates; 14 Escapade; 16 No Fooling; 17
25 Piccolo; 26 Air Conditioning; 27 Tsetse; 28 Penchant; 19 Saloons; 21 Succour; 22 Tongue;
Intrigue. 24 Worse; 25 Put on.
Gulf Times
8 Saturday, April 21, 2018
BUSINESS
Lyft says every
leaves as key exits continue this year to 27%. That makes Deutsche
Lyft Inc plans to spend mil-
lions of dollars a year to fund
projects that would offset the
pollution created by its driv-
ers. The move could help the
second-largest US ride-hailing
Bloomberg
Frankfurt Bank the second-worst of the 42 com- company draw environmentally
panies in the Bloomberg Europe Banks conscious customers from Uber
and Financial Services Index, with only Technologies Inc.
T
he chaotic shakeup at Deutsche state-rescued lender Banca Monte dei As part of the programme, Lyft
Bank AG sent more aftershocks Paschi di Siena SpA declining more. hired a company, called 3De-
through the bank’s top ranks as Achleitner himself has come under grees, to oversee carbon-offset
its chief operating officer was ousted fire for his part in the upheaval. Board investments. Those will include
and its head of investor relations quit. members and investors have criticized efforts to reduce pollution in
Kim Hammonds, who reportedly him for weeks of media leaks about his auto manufacturing and forest
called Deutsche Bank “the most dys- hunt for a new CEO, his failure to find conservation.
functional company” she’d ever worked credible external candidates and his “We feel immense responsibility
for, will leave “by mutual agreement” choice of Garth Ritchie as head of the for the profound impact that
at the annual general meeting on May investment bank, people familiar with Lyft will have on our planet,”
24, the Frankfurt-based lender said late the matter have said. The 61-year-old founders Logan Green and
on Wednesday. Earlier, the bank an- faces a rough ride at Deutsche Bank’s John Zimmer wrote in a blog
nounced that John Andrews, head of annual shareholder meeting in May post published yesterday. “As
investor relations for five years, is leav- from investors who say he’s as much to we continue to grow, we have
ing because of the recent management blame as Cryan for the lender’s woes. a greater responsibility to dedi-
changes. Cryan was unable to restore revenue cate material resources to our
Their exits come days after Christian growth after cutting risk, though he did vision and values.”
Sewing took over as chief executive of- manage to settle billion-dollar legacy The move is sure to endear Lyft
ficer from John Cryan amid a sustained misconduct cases and shore up capi- to its urban base of riders and
slump in the share price and questions tal. Last year, he raised €8bn ($9.9bn) drivers. The company positions
about the direction of Europe’s largest from investors in a share sale. This year, itself as a friendlier alternative to
investment bank. Sewing’s appoint- he sold a minority stake in Deutsche Uber, a message that got a boost
ment was the third major change at the Bank’s DWS asset management busi- during the final year of Travis
top of Deutsche Bank in six years, and ness in an IPO. Kalanick’s tenure as Uber chief
followed weeks of intense speculation Investor relations chief Andrews, executive officer. Lyft’s primary
about Cryan’s future while chairman who previously held the same post at US competitor saw hundreds of
Paul Achleitner stayed silent. Marcus Citigroup Inc, Morgan Stanley and thousands of customers delete
Schenck, co-head of the securities Goldman Sachs Group Inc, played a key the Uber app from their phones
unit, also left as the company debates role in both transactions. He will be re- in protest last year.
how big a role it wants to play in global placed by James Rivett, currently head But Uber has tried to burnish its
investment banking. of fixed-income investor relations, ac- reputation since then. It replaced
“The way Achleitner replaced the Kim Hammonds, COO of Deutsche Bank, looks on during a press conference in Frankfurt. Hammonds, who reportedly called cording to a memo to employees signed Kalanick with the more affable
CEO was unprofessional and damaging Deutsche Bank “the most dysfunctional company” she’d ever worked for, will leave “by mutual agreement” at the annual by finance chief James von Moltke. Dara Khosrowshahi. After years
for everyone involved,” Klaus Nieding, general meeting on May 24, the lender said. “John feels that this is the right of resisting, Uber copied Lyft by
vice-president of shareholder advisory time to take this step with the leader- embracing the most-demanded
DSW, said by phone before the depar- ministrative officer Karl von Rohr, for Bafin said that there is “no legal re- standing was hurt further when reports ship changes recently announced,” von feature from drivers: the ability
ture of the COO was announced. “But who was promoted to co-president in quirement” for the bank to make IT a surfaced about her disparaging com- Moltke wrote. “John has helped the to add a tip within the app. Uber
Hammond’s demise is of her own mak- the reshuffle earlier this month, is the board-level competence. “It is purely a ment. Hammonds hasn’t disowned the bank navigate many challenging and has said its goal is to make it
ing. She shouldn’t have made those likeliest candidate, without citing any business policy decision,” he said. remarks since they became public. important milestones.” easier to live without owning
comments,” he said, referring to the named sources. Hammonds had been tasked with “Kim Hammonds has been a breath In a separate development, at least a car and reduce congestion.
“dysfunctional” remarks made at an Handelsblatt also suggested that bringing the bank’s information tech- of fresh air, bringing an outsider’s per- four investment bankers at Deutsche Last week, Uber acquired Jump
internal event in March. cutting a board position with spe- nology costs down and streamlining spective with deep experience in trans- Bank’s London office are leaving, peo- Bikes, a bicycle rental startup,
The bank may use Hammonds’s de- cific and exclusive responsibility for the number of operating systems. But formational change,” Achleitner said ple familiar with the matter said on citing the potential to reduce
parture to cut the size of its manage- IT could raise eyebrows at Germany’s concerns about slow progress have led in the release. The bank will appoint Wednesday. The departures include pollution. But Uber doesn’t have
ment board and hand her responsibili- banking regulator Bafin, given the to scepticism among supervisory board a new COO “in the near future,” after Guillaume Gnech, a director in equity a companywide sustainability
ties to another board member, German bank’s past problems with the issue. members and management that she’s consulting with regulators, it said. derivatives trading, Neal Naidoo, who plan comparable to Lyft’s.
newspaper Handelsblatt reported on A spokesman for Deutsche Bank de- the right person, people familiar with Deutsche Bank was down 0.4% as worked in systematic trading, and Jon- Lyft declined to estimate how
Thursday. It suggested that chief ad- clined to comment, while a spokesman the matter said earlier this month. Her of 1:30pm in Frankfurt, bringing losses ny Edelman in hedge fund sales. much it would spend on carbon
offsets but described it as a
“multi-million dollar invest-
Deutsche Bank’s $35bn error boosted Eurex’s coffers by 55% ment in the first year alone,”
according to the founders’ blog
post. “By committing significant
financial resources to these
Bloomberg Bloomberg News, was equivalent to 55% of the worth €51.3bn at the end of 2017, according Boerse, spotted the erroneous Deutsche Bank offsets, we’re building into our
London collateral held by Eurex Clearing on behalf of to a regulatory filing. Clearinghouses aren’t transaction shortly after it was made and returned business a strong incentive to
the entire market. Almost every trading firm and responsible for monitoring collateral payments €24bn within minutes, according to a person pursue shared rides and the dis-
bank uses Eurex Clearing to protect their bets made by their banks, and many member firms familiar with the matter, who asked not to be placement of gasoline-powered
Deutsche Bank AG’s accidental payment of €28bn on securities ranging from bund derivatives to supply more than the minimum collateral — or identified because the matter is private. vehicles,” they wrote.
($35bn) to Eurex Clearing increased the collateral futures on the DAX and Euro Stoxx 50 equity initial margin as it’s also known — to cushion The remaining €4bn were returned after the long “The more shared rides and
held by the world’s fourth-largest clearinghouse benchmarks. themselves against changes in the value of their Easter weekend, the person added. clean vehicles on the platform,
by more than half. The clearinghouse, which like Deutsche Bank derivatives. Clearinghouses ensure that traders still get paid if the fewer carbon offsets we will
Deutsche Bank’s payment, first reported by is based in Frankfurt, held cash and bonds Eurex Clearing, which is owned by Deutsche their counterparties default. need to purchase.”
Gulf Times
Saturday, April 21, 2018 9
BUSINESS
India is said
T
he benchmark indices BSE exchange market aren’t tar-
Sensex and NSE’s Nifty 50 geted at boosting exports, said
closed lower yesterday following government officials.
losses in global equities and hawkish India reached out to the US to
comments by the Reserve Bank of India explain that the $2.3tn economy
(RBI) in the monetary policy committee runs a current account deficit
minutes. and needs to maintain foreign
Asian markets also slipped, weighed exchange reserves, the officials
down by the technology stocks. Over- said asking not to be identified
night US stocks closed lower. Viral citing rules.
Acharya, RBI deputy governor, said The Treasury added India
in the minutes that he is likely to shift to its monitoring list last week
decisively to vote for a beginning of along with China, Japan, South
“withdrawal of accommodation” at the Korea, Germany and Switzer-
next MPC meeting in June. land.
The BSE Sensex closed lower by 11.71 India has built up foreign
points, or 0.03%, to 34,365.07, while exchange reserves of $425bn –
the Nifty 50 edged down 1.25 points, just enough to cover about 10
or 0.01%, to close at 10,564.05. Among months of imports. But the US
the sectoral indices on the BSE, IT led doesn’t see this as necessary,
gains by rising 4.80% followed by teck according to the Treasury
3.89%, while utilities, realty, bankex department’s report on foreign
and power fell up to 1.22%. exchange policies of major trad-
The BSE MidCap was down 0.44%, ing partners.
while SmallCap gained 0.02%. TCS, Increase in crude imports
Infosys, Coal India and Wipro were from the US will address con-
among the top gainers, whereas Yes cerns on trade deficit, said one
Bank, Tata Steel, ICICI Bank and SBI The rupee closed at 66.11 against the US dollar yesterday, a level last seen on March 10, 2017, down 0.47% from its Thursday’s close of 65.66 of the officials, adding that India
were among the major losers. is not escalating the matter at
Meanwhile the Indian rupee yester- opened at 66.08 a dollar and touched a fidence on growth prospects. This raises Earlier, RBI executive director Michael Aditi Nayar principal economist at the moment because the list
day weakened past 66-mark to hit an low of 66.11. the odds that the policy stance might Patra voted for a 25 basis point hike in ICRA. The remaining four members in- is put out mechanically and
over thirteen-month low against the However, the 10-year bond yield shift from neutral to hawkish, in June. the repo rate at the February and April cluding RBI governor continue to wait chances of India being named a
dollar, while the 10-year bond prices trimmed some of its gains and but Recent rupee underperformance and meetings. for more data for the future course of manipulator are low.
climbed 6 basis points as probability managed to close higher from its pre- rising 10 year bond yields add to the cen- “The minutes of the MPC’s meeting interest rates. Raveesh Kumar, a spokes-
of rate hike increased after the central vious close. The 10-year government tral bank’s concerns, alongside a sharp have a distinctly hawkish tinge as com- Both, rupee and bonds were already man with India’s external affairs
bank’s surprised hawkish minutes. bond yield closed at 7.686%, up 6 ba- rise in global, particularly, US” said Ra- pared to our reading of the statement under pressure following an increase ministry, could not immediately
This rupee declined for the fifth sis points, from its previous close of dhika Rao economist at DBS Bank. itself. in crude oil prices ,which may lead to respond.
consecutive session, while the 10-year 7.63%. Bond yields and prices move in According to RBI minutes on Thurs- While incoming data and policy de- higher inflation and fiscal slippage, ac- The Treasury department is
bond yield surged nearly 55 basis points opposite directions. day, Viral Acharya, RBI deputy gover- cisions related to factors such as mini- cording to analysts. bound by law to report to Con-
since last two weeks to hit an over two- “The Reserve Bank of India’s policy nor, said he is likely to shift decisively mum support prices, excise on fuel and Slowing inflows into local and gress twice a year on whether
year high. minutes are increasingly assuming more to vote for a beginning of “withdrawal expenditure announcement remain debt markets from foreign investors US’s major trading partners
The home currency closed at 66.11 importance than the policy statement of accommodation” at the next Mon- critical, today’s minutes suggest that a also added pressure. Since start of are gaming their currencies.
against US dollar — a level last seen on and April proved to be another such etary Policy Committee (MPC) meeting back-ended rate hike in 2018 remains a April, foreign investors have sold a It hasn’t labelled a country a
March 10, 2017, down 0.47% from its month. Majority of the members high- in June. This was the strongest guid- possibility if headline inflation exceeds combined of $500mn in local equity manipulator in more than two
Thursday’s close of 65.66. The rupee lighted upside risks to inflation and con- ance given by a MPC member ever. the trajectory set out by the MPC”, said and debt market. decades.
The US has three criteria to
name a trading partner as a
currency manipulator: those
Tencent-backed Meilishuo is that have a trade surplus of
said to seek IPO at $4bn value EM stocks snap winning streak $20bn or more, a foreign
exchange intervention of at
least 2% of the gross domestic
product in the past year, and a
Bloomberg much as $100bn in a much-anticipated Reuters current account surplus of at
Hong Kong offering, people familiar with the matter London least 3% of GDP.
have said, while Meituan Dianping, a Chi- India meets the first two
nese food review and delivery giant also criteria. It runs a trade surplus
E
Yet another Chinese technology company backed by Tencent, has begun discussions merging markets ended the of about $28bn with the US,
is headed for an initial public offering. Meil- about a Hong Kong IPO at a valuation of at week on a sour note with tech and net purchases of foreign
ishuo, the online fashion retailer backed by least $60bn. stocks taking a tumble fol- exchange in 2017 were equiva-
Tencent Holdings, is in talks with several “Tencent wants to develop e-commerce lowing a warning over smartphone lent to 2.2% of the GDP. But it’s
investment banks about a US initial public via its partners, so Meilishuo could get a demand while steadily climbing US far from meeting the third as
offering that could value the startup at lot of resources and help,” said Li Yujie, an yields and a stronger dollar weighed the South Asian nation runs a
about $4bn, according to people familiar analyst with RHB Research Institute Sdn on currencies. current-account gap – 2% of
with the matter. The women-focused in Hong Kong. “It still depends on how the MSCI’s emerging market benchmark GDP as of October-December
online retailer hosted a bake-off to discuss overall market performs, but e-commerce snapped a three day winning streak to quarter.
IPO prospects with potential advisors sector-wise it would be a good year to fall 1%, dragged lower by a more than While the US is “strongly
and underwriters, the people said, asking fetch a good valuation.” 2% drop in emerging IT stocks. concerned” about China’s trade
not to be identified talking about private Meilishuo, which didn’t respond to The losses came in the wake of the balance, which meets all three
negotiations. requests for comment, was said to have world’s largest contract chipmaker criteria, it still hasn’t named it a
Meilishuo, which merged with rival considered a US listing as early as two Taiwan Semiconductor Manufac- manipulator.
Mogujie in 2016 to form a company with years ago. Most of China’s largest tech turing cutting its revenue target to Taiwan and Thailand,
$3bn in sales, was said to have been Corps have picked New York for their de- the low end of forecasts and blam- which run significant current
valued at $3bn at the time of that deal. The buts, seeking the wide investor base and ing softer demand for smartphones, account surpluses and inter-
company, whose name means “Beauty higher international profile that an Ameri- which sent its shares tumbling more have dominated markets for some ish state reserves. But South Africa’s vened in currency markets,
Talk,” is one of the more popular fashion can listing confers. Beijing however is now than 6%. time,” Inan Demir, senior emerging rand and Korea’s won eased around didn’t make it to the list either.
and cosmetics retailers online, a niche it’s encouraging many of those same firms to Meanwhile emerging currencies economist, Nomura International. 0.3%. However, thanks to gains ear- “The inclusion of India, and
clung to despite the dominance of Alibaba also list shares on Chinese exchanges. also suffered as the dollar index trad- “This is a key pressure point for lier in the week all were on track for the exclusion of Taiwan,
Group Holding and JD.com Inc. Meilishuo’s Founded in 2009, Meilishuo runs an ed at its highest in nearly two weeks, emerging markets with large exter- weekly gains. thus highlights the problems
envisioned $4bn valuation is an initial tar- online marketplace selling clothes, shoes with rising inflation expectations nal financing needs, some of these Meanwhile Mexico’s peso, treading that arise from the mechani-
get and could change if a deal proceeds, and handbags. As of 2016, it had about lifting US Treasury yields which had markets, and I’m thinking of Turkey water on the day, was on track to rack cal application of the three
the people said. 15,000 merchants on its website and a climbed steadily over the week and especially here, are also vulnerable to up a 2% loss over the week — the big- criteria,” said Brad Setser, a
It’s one in a growing wave of Chinese mobile application that had been down- hovered near a one-month high hit the rise in oil prices.” gest such fall since December. senior fellow at the US Coun-
technology companies looking to sell loaded 100mn times. That year, it merged on Thursday. Russia’s rouble chalked up some of Mexican markets were spooked cil on Foreign Relations and
shares to the public. Smartphone maker with Mogujie, founded in 2011 with about “The important thing to note is the the biggest losses of the day, weaken- by the strong performance in opin- a former Treasury official. “I
Xiaomi Corp is seeking a valuation of as 130mn registered users. rise in US long term yields again after ing 0.8% after the Finance Ministry ion polls by leftist Andres Manuel think it was a mistake.”
the yield curve flattening concerns resumed forex purchases to replen- Lopez Obrador.
Asia markets drop in line with Wall St as tech firms take a hit
AFP This fuelled concerns that the But Manila rose 0.8%, recover- targeting the region’s top oil ex-
Hong Kong smartphone sector, a massive driver ing some of Thursday’s sharp losses, porter Saudi Arabia with rockets
of revenue for tech firms, including though the index is down 10% so far has traders paying the geopolitical
Apple and Samsung, was beginning this year on worries about inflation, risk premium, which should keep
A
sian markets mostly fell yes- to wane. a weak currency and fears the central downticks in check.”
terday as investors struggled The tech-rich Nasdaq lost 0.8% in bank may need to lift interest rates On currency markets, the pound
to maintain the previous day’s New York. sharply. continued its fall against the dollar af-
positive momentum following losses Asia-listed Apple suppliers and oth- Energy firms dipped slightly fol- ter Bank of England boss Mark Carney
on Wall Street, with technology firms er tech firms fell. lowing Thursday’s oil-fuelled surge tempered expectations of an interest
tracking a sharp fall in Apple. In Taipei, market heavyweight after reports said Opec officials meet- rate hike next month following a sur-
While worries about the Syr- TSMC plunged more than 6% and Fox- ing in Saudi Arabia suggested supplies prise drop in March inflation.
ian crisis and a potential China-US conn lost 1.2%. looked like they were coming into line Sterling had rallied at the start of the
trade war keep dealers on edge, fo- Alps shed 1.8% in Tokyo, while with demand. week to its highest post-Brexit vote
cus has for now moved to the cor- Seoul-listed LG Display was off 1.2%. That led to worries about an Opec- level on bets that British prices had
porate arena as the earnings season South Korean titan Samsung was more Russia output cap deal that has sup- continued to rise last month and rates
gets into full swing. than 2% lower, while AAC Technolo- ported prices in recent years. would follow suit.
All three main Wall Street indexes gies sank 7.3% in Hong Kong. However, crude remains at more “Carney walked back all the
fell on Thursday after a mixed bag of On broader markets, Taipei was off than three-year highs, supported by hawkishness suggesting interest
business reports with market giant 1.8% and Seoul was 0.4% lower, while continued Middle East tensions and rates will go up over the next few
Procter & Gamble posting lacklustre Shanghai slipped 1.5%. signs of healthy US demand. years but gave no specific timeline
results, while rising US Treasury yields Tokyo ended 0.1% down, while Sin- “Saudi Arabia with Opec’s sup- which caused anyone who was bank-
also spooked investors worried about gapore shed 0.6% and Sydney was port is looking to draw a new line in ing on a May rate hike to head for the
higher interest rates. 0.2% off. There were also losses in Ja- the sand for oil prices and added an- exits,” Innes said.
But the big news was a near-3% karta and Wellington. other level of intrigue to the already In Tokyo, the Nikkei 225 closed
plunge in Apple, which came after ma- Hong Kong fell 0.9% with real es- bullish narrative,” said Stephen down 0.1% to 22,162.24 points; Hong
jor chip supplier Taiwan Semiconduc- tate firms also hit by worries the city’s Innes, head of Asia-Pacific trading Kong — Hang Seng ended down
tor Manufacturing Co (TSMC) forecast moves to support the local dollar will at OANDA. 0.9% to 30,418.33 points and Shang-
sales for the present quarter would be lift interest rates and put pressure on But he added: “The civil war in hai — Composite closed down 1.5% to Investors follow financial information at a securities brokerage in Shanghai. The
about $1bn down on analyst forecasts. the housing market. Syria and threat of Yemeni rebels 3,071.54 points yesterday. Composite index closed down 1.5% to 3,071.54 points yesterday.
Gulf Times
10 Saturday, April 21, 2018
BUSINESS
Four Harvard students jump on the crypto hedge-fund bandwagon
Bloomberg vidual investors have long dabbled in Capital showed that 4% of Millenni- 300 students have shown an interest. help new fund managers raise capital, at from Syria 22 years ago to continue
Portland cryptocurrencies, funds became in- als – people 18 to 34 years old – have Hamid won’t say how much she made Harvard this month. Setting up a fund their medical education. She graduat-
terested in the last few years. About owned bitcoin, twice the rate of the on crypto, but a friend was impressed can involve filing with the Securities ed valedictorian from a Houston public
226 have opened so far, most of them general population. And 16% of Mil- enough with the returns to spur her to and Exchange Commission, as well as high school before heading to Massa-
I
n the 1970s, Bill Gates and Steve within the last year, managing as much lennials said they plan to buy bitcoin in action. finding a fund administrator and, po- chusetts for college, where she studies
Ballmer revolutionised operating as $5bn in capital, according to Auton- the next five years. “He was instantly, instantly in- tentially, a custodian. psychology, as does Zubair, a senior.
system software. Thirty years later, omous Research. “Some people might see our age, and trigued,” she said. “He said, ‘Start It costs a lot to run a fund, so most While they aren’t business majors,
Mark Zuckerberg helped pioneer social Bitcoin, the bellwether for the entire see this is a new growing space that’s something and I’ll invest.’ I realised, need to be targeting $25mn to $50mn, the four do have some relevant expe-
networking. So what’s the latest gen- market, has retreated from last year’s largely driven by the Millennials,” Jun- ‘Why not?” To get started, Hamid Lex Sokolin, global director of fintech rience. Zubair interned for an asset
eration of Harvard tech entrepreneurs heights, sending the crypto fund re- aid Zubair, another Plympton founder, reached out to attorney John Lore, who strategy at Autonomous Research, said manager in Chile and a bank in New
up to? Looking to cash in on crypto- turns down 48% in the first quarter, said. “That allows for a high sense of says he has helped set up more than 30 in an e-mail. Still, he said, Plympton’s York. Scott Sussex, another founder,
currency, of course. Bushra Hamid, according to the Eurekahedge Crypto- liability but also passion and interest. crypto hedge funds. founders may enjoy a “generational is a junior in applied math, and Omar
the 19-year-old daughter of Syrian Currency Hedge Fund Index. There we might have an advantage.” “Emerging cryptocurrency funds advantage.” Sorour is a senior in neurobiology and
immigrants, has teamed up with three Many funds aren’t expected to sur- Plympton’s plan is to deploy techni- see this an opportunistic time to start “If crypto is a Millennial or Gen Z economics. Unlike Gates and Zuck-
schoolmates to form Plympton Capi- vive for long, and some have already cal analysis, arbitrage opportunities, up the infrastructure to set up a fund,” game, then knowing how to be foolish erberg, the seniors plan to graduate.
tal, a hedge fund for investing in dig- folded. In spite of those setbacks, more portfolio optimisation, and machine according to Lore, who said he gets in the same ways as everyone else is Then they can work on Plympton full-
ital currencies. Hamid says they aim funds have opened, some helmed by learning to find the right investments, about six or eight inquiries daily from valuable – it allows you to benefit from time, Hamid said.
to launch in six to eight weeks, start- people in their 20s, according to Remy Zubair said. He declined to provide aspiring crypto fund managers. “What reflexivity in the markets,” he said. At “Balancing running a fund and
ing with $1mn. Plympton, named for Astie, chief executive officer of Cita- more specifics. that means is that at least fund manag- the same time, their inexperience may school is challenging, but part of the
a street in Cambridge, Massachusetts, delle, which helps set them up. Astie The quartet began meeting to dis- ers are very bullish on the long-term hurt them, he added. reason we have four co-founders,
has already raised $700,000 from himself is 24. cuss cryptocurrencies last year, when aspects of cryptocurrency in varied in- “If it’s not grounded in reality and that’s allowed us to get where we have
friends and family. The Plympton group is banking on they each invested in coins independ- vestment strategies.” compliance, the project will get eaten given time constraints with school,”
“We don’t necessarily know a lot, the youth movement. A recent online ently. Hamid said that last fall she Lore is working with Hamid pro bono. up by the increasingly sophisticated Sussex said in a phone interview. “It’s
but they have full trust in us,” Hamid survey of about 2,000 adults con- started the Harvard Undergraduate The two also plan to launch the Global competition,” Sokolin said. meetings that start at dinner at go into
said. While many tech-savvy indi- ducted by Harris Poll for Blockchain Blockchain Group, in which more than Center for Investment Fund Studies, to Hamid’s parents moved to the US the evenings, a lot of the weekends.”
T
he Swiss National Bank bating the future path of asset settle. The concern is that owners of
(SNB) is “not in a hurry” purchases, which are currently those wagers are willing to spend a few
to adjust policy despite scheduled to end in September. million to make them pay off.
the franc touching a milestone There’s also the matter of sub- The suspicions are only that, suspi-
low as the situation remains zero interest rates. Once they cions. Volatility markets are too complex
delicate, president Thomas Jor- start to rise, that’ll probably for easy conclusions to be drawn, and
dan said. open the door for SNB action. reasonable explanations have been of-
“There’s no need to do any- Although he declined to com- fered for the patterns. But strange-look-
thing regarding monetary policy ment on ECB policy, Jordan said ing outcomes have happened enough on
at this moment,” he said in an major central banks around the VIX settlement day that the debate keeps
interview with Bloomberg Tel- world going back to “normal” is being revived.
evision on Thursday in Wash- a positive sign and would “help Cboe Global Markets Inc declined to
ington. Jordan spoke just hours smaller economies and give comment. Last month, Cboe CEO Ed
after the franc broke through the them more room to manoeuvre Tilly said at a conference that “the integ-
1.20-per-euro mark for the first in the future.” rity of our VIX products and markets is
time since early 2015, when the Bloomberg’s foreign-ex- paramount. And, if our regulatory team
central bank gave up the ceiling change surveys back up the were to uncover any manipulation, it
it had set at that level. Swiss central bank president’s would be rooted out, swiftly and deci-
He said that although the cautious stance: the median es- sively. was sailing along without incident until options that were tied to a 50% drop in dence because of a study published
franc’s drop goes in the “right timate for euro-franc shows a Evidence the VIX is anything less than about 9am in New York, when it spiked the S&P 500. last year by University of Texas re-
direction” the currency is still level of 1.18 per euro at the end a pure readout on trader nerves would as much as 11% in about an hour’s time. A trade of 13,923 May puts on the S&P searchers who said they saw evidence
considered a haven and the of 2018. raise thorny questions for its overseers, The jump coincided with a Cboe auction 500, with a strike price of 1200, took the process had been gamed, possibly
situation “fragile” and prone to “Simply the fact that they’re who have succeeded in making it a cen- in which a monthly settlement value is place just as markets opened at 9:30am. by people holding derivatives.
change from one day to another. at 1.20 shouldn’t be enough, tral piece of Wall Street wiring. Its abil- set for the gauge, one that is critical to Before Wednesday, the option was ac- It’s a theory the Cboe has denied in
“So we remain very prudent.” even though the level is of course ity to turn stomachs was on display in owners of some of the most popular fu- tive only on five sessions in the past two the past, saying the trading patterns
The SNB is using a two-pillar psychologically interesting,” February’s stock correction, whose worst tures in the country. months, with daily volume never ex- observed by the authors, John Griffin
policy of negative interest rates said Credit Suisse economist moments came when the VIX doubled Both the settlement price and the ceeding 75 contracts. and Amin Shams, have explanations
and a pledge to intervene in cur- Claude Maurer. “Since the next and wiped out bets on calm. high-water mark for the VIX index oc- “This feels odd. I don’t think this is a that require no illicit motive. Sup-
rency markets, if necessary, to action of the ECB isn’t that far “You have people watching and using curred more than 10% above Tuesday’s coincidence,” Chintawongvanich said. posedly telltale volume spikes in S&P
keep the franc in check. Its de- off, the SNB will wait until then it as a barometer for all sorts of trad- close – lucky, if you were betting on a “With all the concern about the pos- 500 contracts at auction are a natural
posit rate is set at minus 0.75% to raise rates. Unless of course ing decisions,” Steve Sosnick, chief op- gain. And people were. Large speculators sible VIX manipulation in February and result of traders replacing VIX futures
to maintain the spread with the the franc slid a lot more.” tions strategist at Interactive Brokers in hold record net-long VIX futures posi- then this happening today, it’s possible with options exposure, not people
neighbouring euro area. A monthly poll of economists Greenwich, Connecticut, said by phone. tions, according to the latest data from that the regulators would look at it more trying to steer it.
“We are convinced that the – conducted before the 1.20 “People take clues from what it’s doing the Commodity Futures Trading Com- closely. It appears to me that the instru- “You can always find people that argue
current monetary policy is still milestone was reached – shows as to what the market’s psychology is mission. ment is vulnerable to people who want to that this is just a normal thing to happen
necessary,” he said. With infla- they anticipate the SNB will keep out there. But when the settlement time Pravit Chintawongvanich, head of de- push it up.” – market makers need to unload their
tion still low, the central bank its deposit rate at the current level comes around, it can take on a life of its rivatives strategy at Macro Risk Advisors, All kinds of claims have surfaced inventory, and they happened to have
will continue with its policy “as for the first nine months of 2019, own.” saw evidence the VIX was pushed high- about the VIX’s vulnerability and most too many far downside options this time
it is today.” before raising it by 25 basis points Wednesday morning’s events were er intentionally. Among other things, aren’t taken seriously by Wall Street around,” Chintawongvanich said. “These
The franc was little changed at in the final quarter. That would be sure to raise eyebrows. The VIX, which roughly $2.1mn was spent in the runup to pros. The ones focusing on the set- are all legitimate explanations. We’ll
1.19953 per euro in Zurich yes- the first increase since 2007. derives its price from S&P 500 options, the settlement on “extremely irrelevant” tlement auction tend to get more cre- probably never know who did it.”
BUSINESS
Ukraine Eurobond
Russia is all set to grab sale possible before
reaching deal with IMF
U
kraine may tap inter-
national markets sev-
to complete negotiations on
the gas reform and that’s it.”
Ukraine may meet the IMF’s
requirements by “early sum-
mer,” he said. Some investors
are more sceptical. The yield
reluctant EU member
eral times this year to Ukraine’s dollar-denominated
raise $2bn as the government bond due 2032 rose as much as
prepares to repay foreign debt 13 basis points to 8.14% yester-
of almost twice that amount. day, within a basis point of the
The eastern European coun- highest level since the note was
try is seeking to restore the sold last year. Servicing foreign
flow of financial aid from the debt will remain a serious issue
Bloomberg has so far been limited to hotels, International Monetary Fund for years to come, Prime Min-
Zagreb gas stations owned by Lukoil, and will place “the major- ister Volodymyr Hroisman told
and stakes in a handful of other ity” of bonds after it reaches a lawmakers yesterday.
companies. staff-level agreement with the “The question is can piece-
T
wo Russian banks are on Zagreb also declined to take lender, according to finance meal Eurobond issuance, plus
the verge of taking a sub- part in the Moscow-led South minister Oleksandr Danylyuk. the local market opening up,
stantial equity stake of Stream gas pipeline and has long But the government may test get Ukraine through this year
Croatia’s biggest retailer, ex- shunned interest from Russian the markets before the deal, he without the IMF,” said Tim
panding Moscow’s reach in a gas companies in refiner INA In- said in an interview. Ash, a strategist at BlueBay
corner of the European Union dustrija Nafte. Robert Kohorst, “We closely monitor the Asset Management in London.
that has for years tried to fend the US ambassador to Croatia, situation, market conditions, “‘Don’t know’ is the answer -
off Russian investment. said in February it would be a in order to make maybe the it likely depends how forgiving
State-owned Sberbank and “mistake” to sell INA to a Rus- first issue a bit earlier,” Dany- global markets are in the hunt
VTB Group are set to convert sian company, criticising what lyuk, 42, said in Washington, for yield.”
claims of about €1.4bn ($1.7bn) in he called Russia’s “disruptive where he’s attending the spring Ukraine sold $3bn of Eu-
debt to equity in Agrokor after it role” in the region. meetings of the IMF and the robonds in September, its first
tumbled into insolvency last year A spokesman for Sberbank World Bank. “But obviously placement since Russia an-
amid allegations of accounting declined to comment. Last year, the majority of the issue will nexed Crimea and a Kremlin-
fraud. The deal was made pos- the lender distanced itself from be done after we get staff level backed insurgency erupted
sible after Sberbank dropped a comments from Azimov that agreement with the IMF.” in the country’s easternmost
raft of lawsuits in a bruising bat- Russian assistance was contin- After almost a year of de- regions. A portion of the pro-
tle to have its claims recognised. gent on cooperation with Mos- lays, Ukraine is still struggling ceeds was used to fund the
The stake, which has yet to be cow. Sberbank chief executive to unlock the remainder of its repurchase of $1.2bn of bonds
determined, will dwarf Russian officer Herman Gref said at the $17.5bn bailout. To get the next maturing in 2019 and $415mn
investment into Croatia since its time that the bank requested tranche of $1.9bn, the former of notes due in 2020.
independence from Yugoslavia. that the Foreign Ministry clarify Soviet republic needs to set up The government may buy
It will also give Moscow a new The headquarters of Sberbank in Moscow. Sberbank and VTB Group are set to convert claims of about $1.7bn Azimov’s statement and was told a court to deal with crooked back more debt due in those
avenue to expand its clout in a re- in debt to equity in Agrokor after it tumbled into insolvency last year amid allegations of accounting fraud. he was expressing his personal officials and raise natural gas years, according to Danylyuk.
gion that, even before the fall of opinion. The Russian banks en- prices for households. Both is- “That part of the curve is a
communism, has tried to escape friends, your strategic partners, the Cold War, each move by Rus- expansion just as President tered the scene when Agrokor sues are complicated by presi- priority for us,” as opposed to
its orbit for higher living standards didn’t come to you to help with sian companies to increase in- Vladimir Putin’s government owner Ivica Todoric needed to dential and parliamentary the repurchase of warrants is-
and a more democratic system. Agrokor,” Anvar Azimov told re- vestment, military or other ties annexed Crimea from Ukraine. borrow to purchase the Sloveni- elections that are set for 2019. sued to creditors in the coun-
Sberbank has insisted that it’s sim- porters on Tuesday. “Russia has in the EU’s eastern members has Backed by the US in its war an rival chain Mercator Poslovni “We know what needs to try’s 2015 restructuring.
ply protecting its investment, say- once again proved that Russia is drawn close scrutiny from allies. for independence, Croatia is a Sistem in 2014. Todoric, who be done - the anti-corruption The warrants, which give
ing it’s not in the business of taking a reliable friend of Croatia, and Hungary’s government, which strong supporter of EU sanc- had built Agrokor into the larg- court,” Danylyuk said. I’m very investors cash when economic
over failed companies. Russia’s whatever we should do here, we has clashed with the EU over tions against Russia. And while est company in the Balkans, was positive about this law, I think output meets certain crite-
ambassador to Zagreb, however, should do to promote the stabil- democratic values, drew criti- Russian investment has poured charged in October with fraud the conditions are there for ria, have more than doubled
didn’t miss the opportunity to note ity of your country.” cism in 2014 when it awarded into neighbouring Serbia and the after an audit found hundreds of this law to be passed but it’s in value in the last year as in-
the political significance. With relations between Russia Russia’s Rosatom Corp the con- ethnic-Serb dominated part of millions of dollars of hidden li- difficult to predict how long it vestors see growth outpacing
“I wonder why your Western and the West at their worst since tract for a €12.5bn nuclear plant Bosnia Herzegovina, in Croatia it abilities. He denies wrongdoing. will take. And then we’ll have projections.
CORPORATE RESULTS
T
he European Union suf- flows the other way since 2014,
fers a “significant gap in researchers said. China FDI in
investment openness” the EU has been more than tri-
with China that hurts the bloc’s ple the continent’s in the Asian
AFP interests, and needs to develop nation for three years, driven
New York a strategy to address long- almost exclusively by M&A
standing market access issues. that’s heavily restricted in the
Those are the conclusions other direction.
W
ells Fargo will pay $1bn of a new joint report released Chinese FDI in the EU fell to
in fines to address de- by consulting firm Rhodium €29.7bn ($37bn) last year from
ficiencies identified Group in New York and the a peak of €35.9bn the year be-
by regulators in its mortgage and Mercator Institute for China fore, data compiled by Rhodium
auto loan businesses, US offi- Studies in Berlin. About three show. European investment fell
cials said yesterday. out of four major Chinese ac- to €6.9bn from €7.5bn dur-
The big US bank, which has quisitions in Europe since 2000 ing the same period. China’s
been under fire in the wake of couldn’t have happened the cumulative FDI has surged in
a 2016 fake accounts scandal, other way around, according to recent years to €132bn in 2017,
will pay the fines to resolve ac- the report, citing deals such as nearly matching European FDI
tions brought by the Office of Tencent Holdings Ltd’s acqui- in China.
the Comptroller of the Currency sition of Finnish gaming house The lack of investment
and the Bureau of Consumer Fi- Supercell Oy as something Bei- reciprocity is a problem with
nancial Protection. jing’s restrictions would bar at “tangible negative economic
The penalty is the largest so home. impacts” that, if allowed to
far imposed under the admin- “Chinese investors enjoy one persist, can generate serious
istration of President Donald of the most open investment harm to European producers
Trump, who has sharply criti- regimes in Europe, with almost and consumers, according to
cised the bank after a series of unfettered access to all indus- the research by Thilo Hane-
problems. tries,” analysts wrote. “China mann, a senior policy fellow
The OCC and the consumer on the other hand continues at Rhodium, and Mikko Huo-
bureau found that Wells Fargo to strategically limit access for tari, who heads the program
improperly charged customers foreign companies in many on China’s foreign relations at
in its auto loan programme and sectors and there is rampant in- Merics.
in some cases, “improperly re- formal discrimination against “Uneven market access is a
possessed” vehicles from bor- foreign firms.” distortion of free competition,
rowers who were unable to pay, The cure requires Europe to which poses a serious threat
said a consent order from the pursue a more assertive eco- to the functioning of efficient
agency. nomic strategy, they said. That markets,” they said.
They also found Wells Fargo means pushing for a strong “It protects less competi-
had wrongly charged some bilateral investment treaty tive Chinese firms from being
customers when mortgages and reciprocal market access defeated or swallowed by more
failed to be secured by the where the EU has leverage, as productive overseas compa-
“lock” deadline for guaran- well as introducing transpar- nies.
teeing an interest rate, even ent screening of foreign in- It could even allow these less
in cases where the bank itself A customer uses an ATM outside a Wells Fargo branch in Los Angeles. The $1bn penalty on Wells Fargo is the largest so far imposed under the vestment for national security productive firms to acquire or
was responsible for the missed administration of President Donald Trump, who has sharply criticised the bank after a series of problems. concerns. The authors also ad- defeat more productive over-
deadlines. vocate building coalitions with seas firms in their own home
Wells Fargo was fined “given expansion until it improves gov- are committed to working with Still executives could face “Shareholders, who will be like-minded countries such market, especially if additional
the severity of the deficiencies ernance, following “persistent them as we deliver our com- tough criticism at an annual footing the bill for this fine, did as Organisation for Economic subsidies and other distortions
and violations of law, the fi- misconduct.” mitments with focus, account- shareholder meeting next week. not conceive, oversee and con- Cooperation and Development exacerbate the situation.”
nancial harm to consumers, and Wells Fargo chief executive ability, and transparency,” Sloan Trump, who has favoured ceal this massive fraud.
the bank’s failure to correct the Tim Sloan said the company had said. cutting some bank regulations Wells Fargo executives did,”
deficiencies and violations in a made progress in strengthen- Wells Fargo escaped much of imposed after the 2008 financial the group said.
timely manner,” the OCC said in
a news release.
ing its compliance and govern-
ance programs and “make things
the regulatory fallout experi-
enced by peers such as Bank of
crisis, lambasted Wells Fargo in
December, saying on Twitter
“Meanwhile, the Republican
corporate tax cut more than off-
Facebook is forming team
The bank neither admitted
nor denied the allegations.
right for our customers.”
The company will adjust its
America and JPMorgan Chase
from the financial crisis, but has
fines would be boosted for “their
bad acts against their custom-
sets this penalty,” Public Citizen
said.
to design its own chips
But the penalty is the lat- first quarter earnings $800mn encountered withering criti- ers.” “Wells Fargo is spending some
est regulatory problem to befall downward due to the penalty, cism since the fake accounts Consumer advocacy group of this benefit on share buy- the company will launch the
Wells Fargo, which also came which is not tax deductible. scandal, in which it opened Public Citizen lauded Friday’s backs, which boost the price and Bloomberg Oculus Go, a $200 standalone
under fire from investors and That reduces net profit from some 3.5mn deposit and credit announcement as reflecting senior management compensa- San Francisco virtual-reality headset that runs
lawmakers over a fake accounts $5.5bn to $4.7bn. accounts without customer “signs of life at the Trump-run tion. on a Qualcomm processor.
scandal. “While we have more work knowledge. CFPB and Comptroller,” but On balance, these are good Facebook is also working on a
The Federal Reserve, in an to do, these orders affirm that The bank has repeatedly apol- added that “this can’t end ac- times for Wells Fargo executives.” Facebook Inc is building a team slew of smart speakers. Future
unprecedented move, in Febru- we share the same priorities ogised for the scandal and over- countability for Wells Fargo’s Shares of Wells Fargo rose 2.4% to design its own semiconduc- generations of those devices
ary ordered the bank to halt its with our regulators and that we hauled its leadership team. widespread misconduct.” to $52.76 in morning trading. tors, adding to a trend among could be improved by custom
technology companies to supply chipsets. By using its own
themselves and lower their de- processors, the company would
pendence on chipmakers such have finer control over product
Nissan said to cut hundreds of jobs at UK car plant as Intel Corp and Qualcomm
Inc, according to job listings and
people familiar with the matter.
development and would be able
to better tune its software and
hardware together.
The social media company is Facebook declined to comment
AFP automobile industry, with demand sliding on UK our employees.” However the spokesman declined to seeking to hire a manager to on the job postings.
London government plans to improve air quality. give any indication of job losses. build an “end-to-end SoC/ASIC, A system on chip, or SOC, is
And diesel car sales are also struggling elsewhere in The news comes after Jaguar Land Rover revealed one firmware and driver develop- a type of semiconductor that
Europe. week ago that it will cut production and not renew the ment organisation,” according contains several discrete com-
Japanese automaker Nissan will axe hundreds of staff at More and more consumers are choosing to ditch diesel contracts of around 1,000 temporary workers at its to a job listing on its corporate ponents built into one piece of
its car plant in northeastern England due to a sharp fall in cars in favour of automobiles that are regarded as more Solihull plant in central England. website, indicating the effort is silicon. They’re typically used
diesel car sales, a source told AFP yesterday. environmentally-friendly. The group, owned by India’s Tata Motors, blamed still in its early stages. in mobile devices where their
Questioned about media reports of hundreds of The vast bulk of Sunderland-built Nissan cars are “continuing headwinds impacting the car industry”. The Menlo Park, California- space and power-saving proper-
job losses at Nissan’s factory in the coastal city of exported to elsewhere in Europe. Japan’s major automakers have meanwhile long based company would join other ties are more valuable. The main
Sunderland, a source close to the matter confirmed the Meanwhile, Friday’s news came as Nissan Motor expressed concerns about the impact of Brexit on their technology giants tackling the functions of most smartphones
news but declined to give a timeframe. Manufacturing UK (NMMUK) announced that it would access to the European market. massive effort to develop chips. are provided by SOCs.
The news also comes as Britain’s car sector, which implement a “short term” reduction in volumes at the After receiving private guarantees from the British In 2010, Apple Inc started ship- An ASIC, or applications spe-
is largely foreign-owned, continues to face Brexit sprawling Sunderland facility. government, Carlos Ghosn, the head of Nissan, in ping its own chips and now uses cific integrated circuit, is a chip
uncertainty on the horizon. “As previously communicated, we are transitioning to a October 2016 gave the green light to new investments in them across many of its major designed for a narrow purpose.
The Sunderland plant — which builds the Juke, Leaf and new range of powertrains over the next year,” a company Sunderland. product lines. Alphabet Inc’s Such components are often
Qashqai car models, many of which are diesel — employs spokesman said. For its part, Japanese rival Toyota announced in March Google has developed its own the fastest or most-efficient at
7,000 workers who produce some 500,000 vehicles per “As we make the operational changes required to 2017 a multi-million-pound investment in a car assembly artificial intelligence chip as well. running a particular piece of
year. support this, we will be managing a planned short-term plant in central England, despite Brexit worries. Facebook could use such chips to software. Their weakness is that
However, Nissan saw British sales slump 35% in the first reduction in powertrain supply and plant volumes at Britain is scheduled to leave the European Union in power hardware devices, artificial they’re locked down and may
quarter on an annual comparison. NMMUK in line with our 2018 business plan. March 2019 after a shock referendum that was held in intelligence software and servers become redundant over time if
That mirrors a broader trend across the British “We are now discussing these operational changes with June 2016. in its data centres. Next month, software and workloads evolve.