BUSINESS | 02BUSINESS | 02

South Africa's poultry tariffs

give EU unfair benefit: US

End of Vene-zuela's oil fortune looms over Maduro's regime

SUNDAY 21 JUNE 2020

BUSINESS

Milaha to expand services forship owners and operators

THE PENINSULA — DOHA

Milaha, one of the largest Maritime and Logistics organ-izations in the Middle East, has announced a reorganisation of the company. The changes are in line with Milaha’s strategy to expand services for its core customers in the marine and logistics sectors and develop local capabilities to support Qatar National Vision 2030.

As part of the reorgani-zation, Milaha is creating a new strategic pillar – Marine & Technical Services – that will focus on providing vessel and industrial equipment owners and operators with comprehensive, end-to-send services to help them achieve greater asset efficiency and lower total cost of operations.

The pillar will include both current activities (ship man-agement, shipping agency, shipyard, bunkering) and introduce new services, such as ship chandlering. Milaha

will also combine its truck sales and distribution activities with its land-based asset maintenance and servicing (for e.g. trucks, crane, forklifts) activities.

Milaha President and Chief Executive Officer Abdulrahman Essa Al Mannai said: “We want to build on our already-strong capabilities to create an unmatched presence in the marine services sector. We aim to be a one-stop shop for the needs of all shipowners and operators, trucking companies, and heavy equipment

operators. This is also in response to the increased growth in Maritime Shipping in Qatar, particularly after the opening of Hamad Port as well as the anticipated growth from the second phase, in addition to the growth in the Oil and Gas sector over the next few years.”

As part of the re-alignment of the company, the existing Maritime & Logistics pillar will focus on enabling trade and providing end-to-end supply chain solutions for commercial customers, through its Con-tainer Shipping, Ports, and

logistics.As part of its focus on its

core business, Milaha is also exiting its travel agency business, as well as de-emphasizing its equipment agency and distribution activities.

As a result of the re-organ-ization, four out of Milaha’s five strategic pillars will focus on our core-business pillars, (1) Maritime and Logistics, (2) Offshore Marine, (3) Gas & Pet-rochem, and (4) Marine & Technical Services. The fifth pillar, Milaha Capital, will deal solely with financial and real estate investments.

Al Mannai added: “Over 80 percent of our revenues are now coming from our core sectors and customers, and we plan to build market-leading positions in these areas in the coming years. Developing these capabilities locally will also support the diversification and competitiveness of Qatar’s economy, in line with QNV 2030.”

QNB supports Qatar Cancer SocietyTHE PENINSULA — DOHA

QNB Group, the largest financial institution in the Middle East and Africa, announced its support for Qatar Cancer Society (QCS) aimed at preventing the risk of cancer, reducing cancer incidence, and raising community awareness.

This ongoing support and cooperation reflect the Bank’s keenness to enhance QCS’ programs to promote a culture of effective early detection, a key element to reach a conscious society without fears about cancer , and in implementation of key local and international pro-grams in the health sector as part of its corporate social responsibility initiatives.

Yousef Ali Darwish, General Manager Group Com-munications of QNB, said: “QNB’s support is part of our commitment to promoting public health and human development and pursue the goal of building a healthier and more prosperous society, in line with Qatar National Vision 2030.” This confirms the Bank’s ongoing efforts to organize several awareness-raising activities such as marking Breast Cancer Awareness Month to increase attention and support for the prevention and early detection of breast cancer among our employees, Darwish added.

Darwish also confirmed that this support came as the world is fighting against the COVID-19 pandemic, espe-cially that cancer patients are more likely to be infected by

coronavirus due to their weakened immune systems and reduced ability to fight off infections. The Bank is com-mitted to play an effective role in the battle against COVID-19 and be part of the ongoing efforts towards a COVID-free society, he asserted.

Dr. Dera Al-Dosari- Director of Resources Devel-opment Department at QCS , expressed great thanks for the efforts being exerted by QNB Group, praising its distin-guished support to tackle COVID-19 pandemic.

QCS guarantees a free-of-charge treatment for patients who cannot afford medical care in order to meet growing costs, Dr. Dera Al-Dosari- renewing the Society’s initial commitment since its estab-lishment in 1997 to treat all patients and to have no patient on the waiting list.

QCS conducts the Com-munity Based Cancer Awareness Program to empower the community members with confirmed information to assist them in adapting healthy life styles in their daily life activities and raise their awareness and commitment to their health. The program targets all seg-ments of society, including school and university students, employees of companies and institutions, and others.

QNB Group’s presence through its subsidiaries and associate companies extends to more than 31 countries across three continents, pro-viding a comprehensive range of advanced products and services.

Yousef Ali Darwish, General Manager Group Communications of QNB

Dr. Dera Al-Dosari- Director of Resources Development Department at QCS

Economic immigration pressure in Mideast to ease, says IMFSATISH KANADY THE PENINSULA

The economic immigration pressure from South Asia into the Middle East is expected to ease in a big way over the next three decades, because of south Asia’s continuing process of i n c o m e c o n v e r g e n c e , according to IMF.

The world migrant share between 2020 and 2050 is nearly stable, at just above 3 percent of the world popu-lation. Therefore, at the global level, there is no surge in migration. However, the share

of emerging market and devel-oping economies (EMDE) immigrants into advanced economies keeps increasing to about 16 percent of the total population of advanced econ-omies; despite the negative effect that income convergence has on EMDE emigration.

IMF's latest report on ‘Mac-roeconomic effects of global migration’ (2020-2050) released on Friday, noted that migration will raise a vast and multifaceted array of macr-oeconomic issues. The large interregional migration cor-ridor for the next wave of

migration, however, includes the corridors from South Asia to the Middle East, and from the Middle East and North Africa to Europe.

The migration pressures within Europe and central Asia are also projected to ease, caused by a combination of higher income per capita and falling population in the group of emerging market economies within the region. Fostering higher growth and more job opportunities in EMDEs is often heralded as a way to enable migrants to stay in their home countries and thereby reduce

migration pressure in advanced economies.

Migration pressures are expected to fall in all emi-gration-prone regions, including from Africa and the Middle East taken as a whole. The only exception is sub-Saharan Africa, where emi-gration pressure increases marginally because the higher growth alleviates poverty traps, which are still present in many countries.

Migration from EMDEs toward advanced economies has increased significantly over the past several decades.

Migration from EMDEs to advanced economies has now reached almost the same level as migration between EMDEs. Between 1990 and 2019 the share of migrants from EMDEs to advanced economies rose from 4 percent to 9 percent of the advanced economy popu-lation, while EMDE-to-EMDE migration remained stable at about 2 percent of the EMDE population.

Migration general ly improves the macroeconomic outcomes of recipient econ-omies. The “dynamic gains” from immigration, in the form

of rising TFP (total factor pro-ductivity) and investment, can be attributed to the comple-mentarity between the skills of immigrants and natives.

Active labour market pol-icies, spending on vocational training and adult education, and policies aimed at inte-grating migrants could boost the macroeconomic gains from immigration. International financial support and policy coordination are needed to address refugee crises and support the integration of ref-ugees in dest inat ion countries.

GECF’s improved Global Gas Model now more powerful than everMOHAMMAD SHOEB THE PENINSULA

The Gas Exporting Countries Forum (GECF) yesterday announced that it has developed an innovative and more powerful tool for data analysis and fore-casting market trends for the gas market such as demand, supply and expected prices in various regional markets.

Using time-series data and other information, the advanced econo-metric-model will help provide its member countries and customers with valuable insights to take better informed decisions.

The enhanced Global Gas Model, a unique long-term forecasting tool developed in-house, will enable to rig-orously track gas market developments and its ever-changing dynamics.

The GECF Global Gas Model (or 3GM) represents the most comprehensive and granular view of natural gas markets any-where in the world, and forms the

bedrock of the GECF’s signature publi-cation, GECF Global Gas Outlook 2050, by combining some of the most powerful econometric and statistical tools available today. With the new suite of updates, the 3GM is now capable of producing comprehensive energy balance fore-casts for over 140 countries and 60 regions, spanning 35 fuels over 33 sectors, up to the year 2050.

The Model’s energy and natural gas demand forecasts are derived from a set of scenario assumptions, based on over 500 indicators from energy price data to macroeconomic trends, such as the impact of COVID-19 on future gas market developments.

“Our continued innovation affirms GECF’s commitment to provide our Country Members and customers with valuable insights that can set them apart in decision making. With products such as the Global Gas Model and the Global Gas Outlook 2050, GECF is continuing to grow its stewardship role as it leads

the industry to a new path of progress,” said GECF Secretary General Dr Yury Sentyurin. The full functionality and versatility of 3GM was demonstrated during a recent internal workshop and led by the team from the GECF’s Energy Economics and Forecasting Department (EEFD) which runs the 3GM.

“The latest iteration of the 3GM is its most advanced to date and allows us to redefine yet again what it means to be all-in-one when it comes to discovering current and emerging trends, bringing in-depth insights, and optimising vast amount of data. GECF can feel proud on being able to deliver every tool and pub-lication that our Member Countries need to succeed in an unpredictable world,” said Dmitry Sokolov, Head of EEFD, during his presentation.

According to Sokolov, the EEFD plans to continue promoting the incredible value of 3GM by conducting several workshops for GECF’s Member Countries.

02 SUNDAY 21 JUNE 2020BUSINESS

Energy prices pulled back sharply on renewed virus fearTHE PENINSULA - DOHA

Oil prices rose on Friday, but pulled back sharply from early highs on concerns that con-tinued spread of the novel coro-navirus could stall the United States’ economic rebound. Crude benchmarks followed other assets lower, pulling back from session highs after Boston Federal Reserve President Eric Rosengren said more fiscal and monetary support for the U.S. economy will likely be needed, according to a Weekly Energy Market Review by Al Attiyah Foundation.

Rosengren repeated his view that the US unemployment rate will likely be “at double-digit levels” at the end of 2020 and cautioned against reo-pening the economy too quickly

after the end of lockdowns aimed at containing the virus. Heightening fears, Apple announced that it would re-close certain stores as the virus spread further.

The highs early in Friday’s session came after Iraq and Kazakhstan, during a meeting of an Opec+ panel on Thursday, pledged to comply better with oil cuts. This means curbs by the Organization of the Petroleum Exporting Countries and allies, known as Opec+, could deepen in July. No deci-sions were made on August cut levels, delegates said, with the market outlook still uncertain.

In a further sign of market recovery, Brent on Thursday moved into backwardation, where oil for immediate delivery costs more than supply

later, for the first time since March. A premium for oil for immediate delivery usually indicates tightening supply and encourages storage to be drawn down. Brent crude settled up 68 cents a barrel at $42.19 on Friday, while US crude settled at $39.75, up 91 cents. US crude

rose over 8 percent last week, while Brent is up 9 percent.

Asian spot LNG prices were little changed this week, as a demand recovery from some buyers in the region was not enough to absorb global over-supply. The average LNG price for August delivery into

northeast Asia was estimated at between $2.15-$2.30 per million British thermal units (mmBtu), compared to the July delivery assessment of $2.10 per mmBtu.

Asian spot demand is expected to be driven up by hot weather in the third quarter this year, fuel switching in some of the markets and lockdown easing, consultancy Energy Aspects said in a report this week. But the glimmers of hope for Asian demand for spot cargoes are more than offset by the need for these firms to ramp-up their imports under long-term contracts and con-tinued demand weakness.

Several Chinese buyers were looking for cargoes this week, however, some market sources said they were

concerned about whether the new outbreak of the corona-virus in Beijing would reduce spot buying, but added it had no impact on prices yet. Unsea-sonably warm weather is expected in the far east in the third quarter, which should increase LNG demand for cooling.

UK gas prices rose last week amid higher oil prices even though the system is still over-supplied. Further curbed con-sumption is expected for the reminder of June due to warm weather.

In the US, natural gas fell to a three-week low on weak cooling demand and declining LNG exports. Henry Hub prices were estimated at $1.67 per mmBtu, 30 percent down from this time last year.

Samsung denies reports of move of China display output to VietnamREUTERS - HANOI

Samsung Electronics is planning to shift much of its display pro-duction from China to Ho Chi Minh City this year, Vietnamese state media reported on Friday, although the South Korean tech giant said those reports were untrue.

The newspaper Tuoi Tre reported the relocation of Sam-sung’s display production from China citing an announcement on the website of Samsung Vietnam, but the parent company in Seoul said the reports were “groundless”.

Samsung did not elaborate. Several other Vietnamese online media outlets had reported the shift from China but by Friday evening those stories could no longer be viewed.

Samsung is the single largest foreign investor in Vietnam, with investments totalling $17bn.

South Africa’s poultry tariffs give EU unfair benefit, says USBLOOMBERG South Africa’s recent poultry-tariff increases give European exporters an unfair advantage over their American competitors even though the country benefits from duty-free access to the world’s biggest economy, according to US Trade Representative Robert Lighthizer (pictured).“That strikes me as completely crazy,” he said in a House Ways and Means Committee hearing on trade policy on Wednesday.The continent’s most-industri-alized economy has duty-free access to the US market under the so-called Generalized System of Preferences, America’s oldest and largest trade-preference

programme for the world’s poorest economies. The African nation raised duties on frozen bone-in chicken pieces to 62 percent from 37 percent for imports from all countries excluding those in the European Union, with which it has a free-trade agreement, and the Southern African Development Community. South Africa also increased tariffs on frozen boneless-chicken cuts to 42 percent from 12 percent.

End of Venezuela’s oil fortune looms over Maduro’s regimeBLOOMBERG

Oil revenue, the financial lifeline of Venezuela, is quickly drying up, adding to the growing insta-bility of Nicolas Maduro’s embattled regime.

Crude exports that once accounted for 95 percent of foreign currency inflow to the country tumbled by almost half this month, after hitting a 73-year low in May. The plunge comes as US sanctions continue to target Venezuela, home of the world’s largest oil reserves.

Maduro’s regime is already plagued by a humanitarian crisis aggravated by the global pan-demic that’s sapping domestic demand for fuels. There’s only one more oil tanker expected to load for the remaining 12 days of the month, documents show. Venezuela used to load two vessels per day two years ago

before financial sanctions were imposed.

Oil storage tanks in the country are nearly full, forcing operators to shut in production to levels not seen since the end of the Second World War. It’s next to impossible to sell crude to foreign buyers with most oil vessels booked to export crude forced to cancel due to the Trump administration’s sanctions.

“Without oil money life gets

a lot harder for Maduro,” said Diego Moya-Ocampos (pictured), a political-risk consultant at IHS Markit in London. “He will have to rely more on gold mining and illegal activities such as drug traf-ficking to pay for his security apparatus.”

Shipments of oil, used to barter for fuels and food, slumped to 167,222 barrels a day this month through Thursday, down 45 percent compared to the same period in May, data from loading programs and ship-tracking compiled by Bloomberg show.

After the US levied sanctions on Mexican firm Libre Abordo SA de CV and its affiliate Schlager Business Group, Venezuela began relying on shipments to its ally Cuba and to Italian refiner Eni SpA and Repsol SA from Spain. Both Eni and Repsol have said in the past they are collecting oil as payment to settle old debts.

QIB retains its position as ‘Best Islamic Bank’ in Mideast and QatarTHE PENINSULA - DOHA

Qatar Islamic Bank (QIB) con-tinues to demonstrate its com-mitment to service excellence and growth by retaining its leading position in the region and winning prestigious awards from The Banker Magazine – the world’s longest running international banking title and the leading monthly title of the Financial Times Group. The Banker has named QIB the Best Islamic Bank in the Middle East, for a second year in a row, and The Best Islamic Bank in Qatar, for the eighth consecutive year, based on the Bank’s outstanding performance during the fiscal year 2019.QIB’s Group CEO, Bassel Gamal, said: “We are pleased to see that our Bank’s commitment and

dedication to all its stakeholders are recognized by such an established organization. These awards display our leading position in the region and truly motivate us to keep improving and striving for more. The positive financial results of the last few years are a testament to our strong performance in local, regional, and global markets, despite the challenging economic and regional situation. Achieving such awards and success would not be possible without the hard work of all our employees and our customers’ loyalty. I would like to take this opportunity, on behalf of the Board of Directors and the exec-utive management, to thank each one of them for their con-tinuous dedication and loyalty.”Registering increasing growth

rates for the seventh consecutive year, QIB delivered a record per-formance in 2019, continued to make strong progress on its digital transformation program and grew across all its business segments. QIB also increased its customer satisfaction scores and has further invested in its people and improved internal processes and efficiency across the entire group.For the year 2019, QIB achieved a net profit of QR3,055.4m, rep-resenting a growth of 10.9 percent for the same period in 2018. Financing activities have reached QR113.8bn and have grown by 11.3 percent compared to December 2018. Customer Deposits of the Bank stood at QR111.6bn registering a strong growth by 11 percent compared to December 2018.

The Bank’s strategy is closely tied with Qatar’s National Vision 2030 and the Government’s commitment to investments in the country’s infrastructure, the diversification of the economy and the development of a strong private sector. Over the past few years, QIB’s leadership has been working on a business strategy to build a long-lasting competitive advantage by introducing new products and services, boosting service performance, devel-oping the Bank’s risk man-agement framework, and migrating to new technology platforms that allow the Bank to better serve its customers. The successful implementation of this strategy has contributed to the Bank’s leading position in Qatar and the region.

Vietnam remains an ‘Ascending Dragon’ despite COVID-19 pandemic: QNB reportVietnam is famously known as the land of the “Ascending Dragon” for its geographical shape. Its economy has seen broad-based growth and low inflation over the past few years, largely thanks to gov-ernment reform efforts, fiscal restraint, and measures to strengthen the banking sector. Rising global trade tensions and volatility in emerging economies were felt in Vietnam during 2019. Never-theless, Vietnam’s economy is resilient.

Early and efficient border closures and rigorous contact tracing have allowed Vietnam to weather the COVID-19 pan-demic better than other coun-tries in Southeast Asia. Despite that, GDP growth has decel-erated sharply in the first half of 2020 due to the impact of COVID-19 containment measures on both domestic and external demand.

QNB expect Vietnam’s economy to rebound sooner and faster than most other countries for two main reasons (See Chart).

First, Vietnam has already significantly relaxed its lockdown. Preventing wide-spread transmission of the virus allowed Vietnam to begin easing the lockdown in April. Businesses and schools have reopened and local transpor-tation has resumed, including

domestic flights. Mobility data from both

Apple and Google indicate that Vietnam is one of the few places in the world where activity has already recovered to more normal levels. However, people are expected to continue to practice social distancing for quite some time.

Second, the strengthening of supply-chains should benefit Vietnam. COVID-19 has demonstrated the vulnerability of just-in-time delivery and overly concentrated supply-chains. Vietnam’s history of market-friendly reforms and a growing number of

free-trade agreements have led outperformance at attracting FDI. Indeed, Vietnam is an obvious choice for companies considering where to locate, or relocate factories. We therefore expect Vietnam’s economy to bounce back faster than most other countries in Southeast Asia.

Many large multinationals either already have operations in Vietnam, or are planning to invest in them. The most obvious example is Samsung, which is the single largest foreign investor in Vietnam, with reported investments of $17bn.

Most recently Samsung has already started construction of a $220m research and devel-opment centre in Vietnam. Beyond that, press reports indicate that the likes of Google, Dell, Amazon, Apple and Nintendo are all currently making, or actively consid-ering, investments.

Vietnam’s other major manufacturing success is in the clothing, footwear and apparel sector. For example, Japan’s

YKK Corporation, the world’s largest zipper manufacturer, started operations at its second plant in late 2019 having invested $60m in the facility in Ha Nam province. YKK are joining major global brands, including Nike, Adidas, Uniqlo and H&M, that are already established in Vietnam.

QNB expects the slowdown in the first half of the year and a strong second half to result in GDP growth of around 2.1 percent for 2020 as a whole. While this would be Vietnam’s lowest growth in decades, it is still expected to be much higher than most other countries.

QNB ECONOMIC COMMENTARY

(% y-o-y)Quarterly GDP Growth