BUSINESSBUSINESSMonday 22 January 2018

PAGE | 19PAGE | 18Franco-German

cooperation to be strengthened

QFBA felicitates 1st cohort of Qatari executives

Mideast M&A deal value grows by 21% in Q4, 17SATISH KANADY THE PENINSULA

DOHA: Middle East’s overall M&A deal activity rallied in Q4 2017, with the volumes growing by 8 percent and aggregate value up by 21 percent at $6.6bn, compared to the previous quarter. Cross-regional M&A deal volumes also increased by 8 percent, while deal values increased by 85 percent from Q3 2017, driven by the $1.06bn acquisition of Kuwait’s National Petroleum Services Co, according to global law firm Baker McKenzie.

Eighty percent of all Middle East M&A activity was cross-border in nature in Q4 2017.

Total Middle East deal volumes fell 10 percent in 2017, compared to the previous year, with deal values also declining by 31 percent.

“Despite overall deal activity

in the Middle East decreasing in both value and volume in 2017, the rally witnessed in the last

quarter of the year was very pos-itive,” said Omar Momany, Head of Corporate/M&A at Baker

McKenzie Habib Al Mulla. “The increase in cross-border M&A deals by value and volume in the last quarter of 2017 reflect the sustained investor appetite in the Middle East”, he said.

The value of cross-regional deals targeting the Middle East increased significantly by 194 percent to $1.9 bn in Q4 2017 from $630m in the previous quarter, driven by the National Petroleum Services acquisition. Deal volume also rose by 35 per-cent, with a total of 31 deals during the same quarter.

Kuwait was the top target country by value, with $1.2bn from three deals. The US was the top bidder country both by volume and value during the

same quarter, with six deals valued at $1.2bn. The Energy & Power sector was the most active sector in respect of inbound Middle East investment, both by volume and value in Q4 2017, registering seven deals amounting to $1.3bn.

“We expect regional deal activity to remain fairly con-sistent in the coming years, with particular interest in the con-sumer-facing, infrastructure and technology sectors driven by the demand for innovation and new business models,” commented Will Seivewright, Corporate/M&A Partner at Baker McKenzie Habib Al Mulla.

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Omar Momany (left), Head of Corporate/M&A at Baker McKenzie Habib Al Mulla and Will Seivewright, Corporate/M&A Partner at Baker McKenzie Habib Al Mulla

The value of cross-regional deals targetting the Middle East increased significantly by 194% to $1.9 bn in Q4 2017 from $630m in the previous quarter.

Doha Bank’s ‘Al Jana 7’ offers attractive returns to customersTHE PENINSULA

DOHA: Doha Bank continues to build on its reputation for offering the highest rates of return with the launch of a new premium fixed deposit scheme. The new scheme offers attrac-tive returns for long-term deposits at a fixed rate of interest assuring customers of a guaranteed return on their money with compounded interests.

The latest in a series of high-interest fixed-rate deposit scheme for Doha Bank depos-itors, Al Jana 7 offers customers who set aside a sum of QR500,000 (or equivalent in USD or KWD) or more for a minimum of 2 years, a premium rate of interest that is substan-tially higher than what is nor-mally available in the market.

Customers can choose from deposit tenures ranging from 2 to 5 years for their Al

Jana 7 term deposits. The interest is fixed at a pre-deter-mined rate – thus ensuring depositors are protected against the uncertainty of rate changes. Customer enjoys the benefit of interest being paid or capitalized every 6 months. Due to the longer term nature of the deposits, customers are assured of high returns on their savings, making Al Jana deposits one of the best and safest forms of relatively long term investments.

“Al Jana Series 7 allows customers to earn a stable return on their savings,” said Dr. R. Seetharaman, CEO of Doha Bank. “With Al Jana 7, customers have the flexibility of depositing in USD, QAR and KWD as per their preference, making it the perfect invest-ment vehicle for those looking for guaranteed high rates of return till maturity. We expect demand for Al Jana 7, which is

a limited-time offer, to be as strong as for the previous occa-sions,” he added.

With interest rates that range from 3.50 percent to 3.75 percent for deposits in Qatari Riyal, Al Jana 7 offers com-pounded returns of 18.75 per-cent for a five-year deposit, 10.95 percent for a 3-year deposit and 7 percent for 2 years.

If that isn’t enough, a fur-ther value-added benefit awaits Al Jana 7 depositors in the form of a free VISA Infinite credit card with a limit of up to 90 percent of the Al Jana deposit amount with a max-imum limit of QR 500,000 and up to 2.5 million Doha Miles to enjoy free travel and hotel booking around the world. Al Jana 7 depositors can also avail of an exclusive loan from Doha Bank that gives them access to funds up to 90 percent of the value of their deposit at a pref-erential rate.

Qatar sees 13.4% growth in registration of new companies: QCTHE PENINSULA

DOHA: The country witnessed the registration of over 14,639 new companies during the year 2017, an 13.4 percent increase compared to the registration of 12,910 companies in 2016, Qatar Chamber’s Chairman Sheikh Khalifa bin Jassem Al Thani (pictured) said yesterday.

Over 34,848 companies had renewed the commercial regis-tration last year. The Chamber chairman noted that the total number of companies registered

in the chamber reached 76,666 compared to 59,926 in 2016

recording an increase of 28 percent.

Sheikh Khalifa pointed out that 32 foreign companies had entered to the Qatari market for the first time last year, noting that 27 of them were registered during the post-blockade period. He said that the number of companies established after the siege reached 7,335 which affirmed that it had no impact on Qatar’s investment environment.

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9,145.44-54.66 PTS0.59%

QSE FTSE100 DOW BRENT7,730.79+29.83 PTS0.39%

26,071.72+53.91 PTS0.21% Dow & Brent before going to press

$63.37 +0.00

18 MONDAY 22 JANUARY 2018BUSINESS

QFBA felicitates 1st cohort of Qatari executivesTHE PENINSULA

DOHA: The Qatar Finance and Business Academy (QFBA) has hosted an event to felicitate the first cohort of Senior Qatari Executives in its pioneering Future CEO programme. The event was attended by Nasser Ahmed Al Shaibi, Deputy Chair-man of Qatar Finance and Business Academy (QFBA), and Yousuf Mohamed Al Jaida, Chief Executive Officer, QFC Author-ity.

The FCEO pioneering cohort includes C level executives rep-resenting different companies in various sectors in Qatar such as Qatar Petroleum, QInvest, and Qatar University.

QFBA, with the support of the Qatar Financial Center Author-ity (QFCA), launched the Future CEO program in October 2016 and the program ran until Janu-ary 2018 - more than 15 months. The program offered a promis-ing experience for senior Qatari executives from varying business functions, such as Finance, Cor-porate planning, Operations, Administration, etc. grooming them towards the strategic

functions of being a CEO in any industry. It focused on develop-ing business success factors that are Qatar specific via explora-tion of the unique strengths and challenges faced by institutions in Qatar.

Several best practices across various industries were shared and discussed, spanning aspects related to marketing and busi-ness strategy, managing change, blockade induced challenges to even the mapping of informal networks.

Commenting on the occa-sion, Nasser Ahmed Al Shaibi, Deputy Chairman of Qatar Finance and Business Academy (QFBA), said: “Qatar’s unique developmental situation in all areas requires its equivalent of qualified and specifically trained business leaders to keep abreast of the pace of economic activity in the country. Therefore, it is necessary to focus on investing in the nation’s human resources and preparing them to suit the requirements of this era and the phase that the region is currently going through.”

Dr. Mohammed Abdullah Al Emadi, Acting CEO of QFBA, said:

“We are proud to see one of the objectives of QFBA become a reality through the certification of a distinguished group of Sen-ior Qatari Executives who have further developed their strate-gic thinking skills via program sessions spanning 15 months. The Senior Qatari executives have largely benefitted from their group -sharing a variety of aspects of strategic importance in companies in Qatar.”

Yousuf Mohamed Al Jaida, Chief Executive Officer, QFC Authority, stated:“Following the launch of the Future CEO pro-gram last year, we are delighted to be here as we recognize and reward the first cohort of Senior Qatari Executives. This unique program is another step in ele-vating and enhancing our nation’s human capital.

The skills picked up by the participants as well as the train-ing and education they have received through the Future CEO programme will positively reflect on their respective institutions and pave the way to them attain-ing the highest of positions in the future.”

Esme Alfred, Global Manager

– Certification and Licensing of The CEO Institute said the unique program provides a platform for experienced executives in the

cohort to regularly engage through mentored-learning.

A carefully-selected Chair-man-Facilitator with professorial

credentials and in-depth busi-ness experience, guides the cohort as they prepare for their role as tomorrow’s CEOs, he said.

Nasser Ahmed Al Shaibi (second row, third right), Deputy Chairman of Qatar Finance and Business Academy (QFBA), and Yousuf Mohamed Al Jaida (second row, centre), Chief Executive Officer, QFC Authority, with QFBA officials and participants of the ‘Future CEO’ programme.

ibq refutes Lega Serie A involvementTHE PENINSULA

DOHA: International Bank of Qatar (ibq) strongly denied any involvement in the alleged proposal worth $15.56bn to Lega Serie A, the top Italian football division, regarding the League’s broadcasting rights.

Myriam Abou Haidar, Marketing & Corporate Communications Manager at ibq stated: “ibq provides core banking services in the State of Qatar and has never engaged in any form of acquisition of broadcasting rights related to any sport activity, therefore we were utterly surprised of the news. Consequently, ibq refutes having ever offered any form of bid to Lega Series A.”

“In fact ibq has never established any contact with Lega Serie A in any respect whatsoever and has, as a banking institution, no direct or indirect interest whatso-ever in Lega’s broadcasting rights or any other broad-casting rights. The news is unfortunately groundless, misleading and fake,” Haidar added.

Aamal announces sale of sharesin Gulf Rocks THE PENINSULA

DOHA: Aamal Company yesterday announced that the remaining balance of 85,936 treasury shares of Aamal Q.P.S.C, owned by Gulf Rocks Company, were fully sold. The shares were sold during the trading sessions that took place on January 2nd, 10th, 11th, 14th and 15th of 2018.

On 27th of August 2017, Aamal Company Q.P.S.C. obtained QFMA’s approval to sell a total of 157066 treasury shares owned Gulf Rocks W.L.L., a subsidiary of Aamal. The sales process was completed on 15th of January 2018, in accordance with QFMA’s rules and reg-ulations regarding listed companies selling their shares.

Mideast M&A deal value grows by 21% in Q4, 17

→ Continued from page 17By value, outbound cross-

regional deals from the Middle East increased by 52 percent in Q4 2017 to $2.3bn compared to $1.5bn from the previous quar-ter. However, this was generated from fewer deals (37 deals), representing a 10 per-cent decline in volume from Q3 2017.

The top target countries for outbound M&A by volume included the United Kingdom, United States, Spain and Italy with three deals each, while India was the top target coun-try by value, with two deals valued at $1bn, including the acquisition of the Indian unit

of National Investment & Infra-structure Fund Ltd by the Abu Dhabi Investment Authority.

The Industrials sector was the most active sector both by volume and value of deals orig-inating from the Middle East, with a total of 10 deals valued at $1.03bn.

Zahi Younes (pictured), Corporate/Capital Markets partner at Baker McKenzie’s associated firm added, “Unprecedented economic reforms, openness to foreign investment and future infra-structure requirements in the Middle East are going to present enormous opportuni-ties in the medium and long term and continue to sustain levels of regional M&A activity.”

Qatar sees 13.4% growth in registration of new companies: QC

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During the past year, the Chamber organised about 200 different events, received 52 international trade delegations, conducted 14 overseas visits for the Qatari businessmen to a number of countries, as well as organized and participated in 14 trade fairs, Sheikh Khal-ifa added.

Since the first day of the siege, the chamber played a key role in combating its affects. It held meetings with concerned authorities and businessmen to ensure the flow of commodities goods which were covered by

alternative countries without any impact on consumers.

Qatar Chamber has moved in all directions to confront the crisis and maintain the flow of goods and products. “The Chamber has clocked a number of achievements and carried out a large number of activities and events during 2017. It also launched important initiatives and participated in other events to develop the services it pro-vides to its members as part of its pivotal role in enhancing competitiveness in Qatar, and enabling the private sector to play a greater role in the over-all development of the country,” he added.

Nafta future uncertain as new round of talks beginAFP

MONTREAL: Negotiators from Canada, Mexico and the United States will kick off the sixth round of talks, tomorrow, aimed at revamping the North Ameri-can Free Trade Agreement (Nafta) in Montreal.

The six days of talks come amid high trade tensions between Ottawa and Washing-ton and as US President Donald Trump insists Mexico will pay for the construction of a controver-sial wall along the US’s southern border.

Trump continues to blow hot and cold on the continental trade pact that he has threatened to repeal, and recently said in a Twitter message that “Nafta is a bad joke.”

Outraged by huge anti-dumping and countervailing duties imposed on Canadian air-craft manufacturer Bombardier as well as its primary softwood lumber and newsprint export-ers, Ottawa recently filed a complaint with the World Trade Organization alleging wide-spread trade violations by its neighbour.

The government of Prime Minister Justin Trudeau is aim-ing for a repeat of past adjudications that went Cana-da’s way to turn the tide against rising US protectionism.

In line with his campaign commitment, Trump forced Can-ada and Mexico to the table to renegotiate the 1994 free trade pact, promising to bring back US manufacturing jobs and update Nafta for the digital age.

Talks to modernize what Canadian Foreign Affairs Minis-ter Chrystia Freeland called “the largest free trade area in the world” were originally scheduled to wrap up by the end of 2017. But the parties have agreed to continue negotiating until March.

Despite significant progress on so-called “bread and butter” issues, Freeland said Canada is bracing for “the worst,” includ-ing a possible US withdrawal from Nafta that would effectively mean the end of the tripartite trade pact.

While often railing against Nafta, Trump has at times also seemed to soften his view, tell-ing the Wall Street Journal he would be “a little bit flexible” on

his threat to withdraw because of the upcoming Mexican pres-idential election on July 1.

Although he failed to men-tion the upcoming US midterm elections, these must also weigh on mind.

In Montreal, trade envoys are due to tackle some 28 outstand-ing concerns, including thorny issues such as the proportion of US content in passenger vehicles and parts.

“I think the concern that a lot of people have is that so little progress have been made and so little effort is being made by the Americans that you worry that they are... just positioning for Trump to be able to say ‘We are out,’” former Conservative leader

Rona Ambrose told broadcaster CTV.

“When you don’t have a dance partner on the other side, it becomes really difficult,” said Ambrose, who was appointed by Trudeau to Canada’s Nafta advi-sory council.

A former Conservative industry minister, James Moore, however, struck a more optimis-tic tone after current Tory leader Andrew Scheer and several MPs returned this week from lobby-ing Washington decision makers on Nafta.

He sees possible trade-offs on access to government pro-curement and rules of origin for the auto sector, which Trump wants to restrict to better favor

the United States.“I am optimistic,” he said,

“between the American position and the status quo there will be a way to split the difference to the benefit of all (Nafta) members.”

Some 14 million jobs in the United States depend on open trade with Canada and Mexico, and the repeal of Nafta would result in an immediate loss of more 300,000 American jobs if “Nafta is torn up,” said Moore, citing the US Chamber of Com-merce, which has been pushing Trump not to kill the pact.

“The big question is whether the Americans will continue to negotiate beyond the Montreal round or whether they will use a disappointing outcome of those talks as a pretext to initiate the process for withdrawing from the agreement,” commented Louis Belanger, a politics profes-sor at the University of Laval in Quebec.

A notice of withdrawal would trigger a six-month count-down to the US exit from the pact.

If in Trump’s eyes substan-tive progress is made in this round of the negotiations, the American president could hold off making any decision on the fate of Nafta until after the US midterm elections, he said.

Conversely, Ian Lee of Car-leton University’s Sprott School of Business in Ottawa told AFP Trump may walk away from a deal “so he can say he’s stand-ing up to those cheating Mexicans and Canadians before the midterm elections.”

Mexico’s Economy Minister Ildefonso Guajardo (left), shakes hands with US Trade Representative Robert Lighthizer (right) before the start of a trilateral meeting with Canada’s Foreign Minister Chrystia Freeland during the third round of Nafta talks in Ottawa, Ontario, in this file picture.

19MONDAY 22 JANUARY 2018 BUSINESS

US solar has a $1.5bn plan to end a trade warBLOOMBERG

NEW YORK :While President Donald Trump prepares to announce his decision on new solar panel import tariffs, the US industry is quietly trying to broker a sweeping deal to settle a different trade dispute with China involving an estimated $1.5bn held by Washington.

Since 2012, the US has been collecting duties on panels imported from China. American solar companies are pushing to divvy up that money between manufacturers and suppliers in both the US and China as part of a deal that, they say, could effec-tively reset solar-trade relations between the two nations.

The proposal, which trade experts describe as a long shot at best, would call for Trump to drop existing duties on solar panels -- and for the president to not levy new ones. China, in turn, would abandon its own tariffs on US polysilicon, a key solar-panel ingredient. There would be many hurdles to making it all happen. Chief among them, of course, is con-vincing Trump to take a concil-iatory stance with China. Yet solar companies say the deal would fit squarely into the pres-ident’s agenda.

“This administration has a real opportunity to succeed where others failed as a result of your commitment to a re-bal-ancing of trade relations,” Craig Cornelius, senior vice president of renewables at power gener-ator NRG Energy Inc., said at a hearing before Trump’s trade representative in December.

The White House didn’t

immediately respond to a request for comment. Emily Davis, a spokeswoman for the US Trade Representative, declined to comment.

Trump has until Jan. 26 to decide whether to impose tar-iffs, making it unlikely that any deal will be brokered in time to prevent new duties. Most US solar companies oppose tariffs, saying they will cripple the industry and kill tens of thou-sands of jobs. In the short-term, many are lobbying to keep any duties as low as possible. Ulti-mately, they are pushing for a broad deal to end all solar trade barriers between the U.S., China and other nations.

“We maintain our position that a global settlement, fol-lowing the general construct proposed last month by NRG’s Craig Cornelius, would be a wel-come outcome to these cases,” Solar Energy Industries Associ-ation President Abigail Ross Hopper said in an emailed statement.

The push for the tariffs Trump is considering began in April, when Suniva Inc., a bank-rupt, Georgia-based panel maker filed a trade complaint arguing it had been crippled by a flood of imports. SolarWorld Americas, the US unit of a bank-rupt German manufacturer, joined the case the following month.

Suniva’s chief creditor is SQN Capital Management. The creditors of SolarWorld AG, the German company, include Cen-terbridge Partners LP.

The US International Trade Commission voted in October to recommend tariffs of as much

as 35 percent on imported panels. The president has the final say on the size, scope and duration of any duties. They could affect panels imported from nearly every nation.

The tariffs that the US first imposed in 2012 initially tar-geted Chinese panels and later were broadened to include those from Taiwan. The duties came after SolarWorld Americas accused Chinese manufacturers of illegally selling panels at prices below the cost of produc-tion. China hit back in 2014 with tariffs on solar-grade polysilicon from the US.

Over the last five years, the US is estimated to have collected more than $1.5bn in duties on imported panels, Cornelius said in his December testimony. James Rockas, a Commerce Department spokesman, declined to comment.

US solar companies and others have quietly pushed for years to use the money collected from the 2012 tariffs to broker a settlement to resolve the trade dispute with China.

“It was almost resolved it at the end of the Obama adminis-tration,” said Jigar Shah, the co-founder of Generate Capital Inc. who was president of Coalition for Affordable Solar Energy, a group that represented a wide swath of US solar installers, developers and manufacturers. The group disbanded in 2015.

There is precedent for the idea. In 2006, the US agreed to drop tariffs on Canadian soft-wood lumber and split the duties that had been collected between companies on both side of the border.

Franco-German cooperation to be strengthenedREUTERS

BERLIN/PARIS: German Chan-cellor Angela Merkel and French President Emmanuel Macron said yesterday they wanted to deepen Franco-German cooperation and give the European Union a fresh push towards closer integra-tion.

After meeting in Paris on Friday, Merkel and Macron talked up the prospect of agreeing reforms to the euro zone, saying they were com-mitted to strengthening the bloc.

“We are doing that in order to bring the people in our coun-tries even closer together. And we do it to give the whole of Europe a new boost, to make it even stronger,” Merkel said in a joint video podcast.

In a joint statement on the occasion of the 55th anniver-sary of the Franco-German Cooperation Treaty, also known as the Elysee Treaty, Merkel and Macron said they had agreed to draw up a new treaty this year.

“We want to consolidate and renew our cooperation with a view to moving ahead with a prosperous and compet-itive Europe, more sovereign, united and democratic,” the two leaders said.

They want their new bilat-eral compact to define common positions on all key European and international issues.

Signed on January 23, 1963 between Charles de Gaulle and Konrad Adenauer, the Elysee Treaty sealed the reconciliation between the two countries fol-lowing World War Two and defined the organisation and principles of their bilateral rela-tion, including twice-yearly

meetings between their heads of state. In a speech on Europe at the Paris Sorbonne univer-sity in September, days after the German election, Macron had said he wanted to work on a new treaty.

Nearly four months later, Merkel is still trying to form a coalition government, making it hard for her to respond to Macron’s proposals for EU reform.

Germany’s centre-left Social Democrats (SPD) decided on Sunday to start formal coa-lition talks with Merkel’s conservatives.

In their statement, Merkel and Macron said a new treaty would more deeply integrate their countries’ economies, boost sustainable development and the shift to a digital economy, and favour economic, fiscal and social convergence.

They want to boost defence, security and intelligence coop-eration, and draft a joint response to the challenges of uncontrolled migration.

In their statement, Merkel and Macron said a new treaty would more deeply integrate their countries’ economies, boost sustainable development and the shift to a digital economy, and favour economic, fiscal and social convergence.

QIIB CSR activityDr Abdulbasit Ahmed Al Shaibei (eighth left), CEO of QIIB, and other senior officials of the Bank with the students of Qatar Academy, who were hosted at the main branch of the Bank as part of its CSR activities. During the visit, the students were briefed about the various products and services offered by QIIB.

Big portion of future GM electric vehicles for China REUTERS

DETROIT - General Motors Co’s China unit will sell a “substan-tial portion” of the automaker’s future electric vehicles, GM China President Matt Tsien (pictured) said.

In a briefing at GM head-quarters, Tsien said, “China is at the heart of our electrification strategy.” Tsien did not say which GM brands would sell electric vehicles in China.

But Cadillac President Johan de Nysschen told Reuters at the Detroit auto show the luxury brand “will play a central role” in GM’s electrification strategy, including China.

Cadillac will be “the tech-nology spearhead for General Motors,” de Nysschen said, adding the brand will be “at the

forefront” of rolling out new electric vehicles in the United States and China.

The broader electrification strategy, detailed in mid-November by Chief Executive Mary Barra, includes the intro-duction in 2021 of a new dedi-cated electric vehicle architec-ture and an advanced battery

system, which will support the development of at least 20 new models in the United States and China. The automaker has promised investors it will pro-duce profitable electric vehicles by 2021 and that the 20 new bat-tery electric and fuel cell vehi-cles will join its global lineup by 2023. Barra said GM aims to sell 1 million pure electric vehicles worldwide by 2026.

Last year, GM China and local partners sold 4 million vehicles - about 40 percent of the automaker’s global tally - but only 11,000 were pure electric vehicles, sold under GM’s local Baojun brand.

The automaker sold about 50,000 pure electric vehicles worldwide in 2017, most of them the Chevrolet Bolt EV, or roughly 0.5 percent of its global sales.

Tsien said plug-in electric vehicles, including hybrids, are expected to account for about 20 percent of the industry’s pro-jected 35 million vehicle sales in China in 2025. Next year, a new Chinese quota system will require that 8 percent of an automaker’s sales be plug-in electrics.

Tsien said GM expected to meet that quota, which would require selling more than 300,000 battery electrics and plug-in hybrids in 2019 or pur-chasing offsetting credits from other manufacturers.

The automaker’s new elec-tric vehicle will support models for “multiple brands in multiple segments,” Tsien said, and the flexible battery system will enable GM to offer a variety of driving ranges in those models.

Catalonia finds independence drive was costly for its economyBLOOMBERG

MADRID: Catalonia will continue to count the cost of its drive for independence, according to BBVA Research.

The Madrid-based bank sees the Catalan economy trailing the performance of Spain overall, as indicators point to weakness across the board from job creation to consumer spending.

The lender’s research department sees Catalonia, the biggest regional economy, growing 2.1 percent this year compared to a forecast of 2.5 percent for the whole of Spain.

BBVA says political uncertainty pegged to the region’s push for unilateral independence is weighing on growth.

The expansion in the first half of 2018 will be below the average over the past three years – with all main eco-nomic indicators trailing their estimates before the illegal referendum in October, according to BBVA.

The BBVA predictions come as the Catalan parlia-ment prepares to elect its next regional president with all eyes on ousted leader Carles Puigdemont who insists on taking office from his self-imposed exile in Belgium.

Who forms the new administration will be key, according to BBVA.

The central government in Madrid has warned Puig-demont can’t govern if he’s not physically in Spain.

Audi ordered to recall 127,000 vehicles over ‘emission control’REUTERS

FRANKFURT: Germany’s KBA automotive watchdog has detected illicit emission-control software in Audi’s latest Euro-6 diesel models and has ordered a recall of 127,000 vehicles, Bild am Sonntag reported.

Audi, a unit of Volkswagen), said in a statement that the models had been included in a voluntary recall of 850,000 diesel vehicles with V6 and V8 TDI engines announced in July.

“The engine control soft-ware for the vehicles in ques-tion will be completely revised, tested and submitted to the KBA for approval”, Audi said in its statement.

It did not confirm more details of KBA’s request.

Bild am Sonntag said road transport authority KBA had told Audi to respond by Feb. 2 on how it plans to update vehicle software controlling emissions, making sure the cars are unable to illegally manipu-late emission controls.

Audi said it has been exam-ining its diesel-fuelled cars for potential irregularities for months in close cooperation

with the KBA.“As part of this systematic

and detailed assessment, the KBA has now also issued a notice regarding Audi models with V6 TDI engines,” the car-maker added.

In November, Audi announced a recall of 5,000 cars in Europe for a software fix after discovering they emitted too much nitrogen oxide, the polluting gas that parent Volkswagen concealed from US regulators in its dev-astating 2015 “dieselgate” scandal.

Volkswagen was found in 2015 to have illegally manipu-lated engine software so that vehicles would meet nitrogen oxide emissions standards in laboratory testing but not in real-world conditions, where they could emit up to 40 times the permitted levels.

Several Audi models were affected and Audi has been accused in media reports of having devised the so-called defeat devices years earlier but not to have installed them in its vehicles at that time. Audi and Volkswagen have never com-mented on the matter.

20 MONDAY 22 JANUARY 2018BUSINESS

China’s ban upends global recycling sectorAFP

BEIJING: For years China was the world’s top destination for recyclable trash, but a ban on certain imports has left nations scrambling to find new dump-ing grounds for growing piles of garbage.

The decision was announced in July and came into force on January 1, giving companies from Europe to the United States barely six months to look for other options, and forcing some to store rubbish in parking lots.

In China, some recycling companies have had to lay off staff or shut down due to the lost business.

The ban bars imports of 24 categories of solid waste, includ-ing certain types of plastics, paper and textiles.

“Large amounts of dirty... or even hazardous wastes are mixed in the solid waste that can be used as raw materials. This polluted China’s environment seriously,” the environment ministry explained in a notice to the World Trade Organization.

In 2015 alone, the Asian giant bought 49.6 million tonnes of rubbish, according to the lat-est government figures.

The European Union exports half of its collected and sorted plastics, 85 percent of which goes to China. Ireland alone exported 95 percent of its plas-tic waste to China in 2016.

That same year, the US shipped more than 16 million tonnes of scrap commodities to China worth more than $5.2 billion.

The ban has been like an “earthquake” for countries dependent on China, said Arnaud Brunet, head of the Bureau of International Recycling.

“It has put our industry under stress since China is

simply the largest market in the world” for recycled materials, he told AFP, noting that he expected exports of certain materials to tank by 40 percent or more.

Global plastic exports to China could sink from 7.4 mil-lion tonnes in 2016 to 1.5 million tonnes in 2018, while paper exports might tumble nearly a quarter, according to Brunet’s estimate.

The decrease will be partly due to a fall in the threshold of impurities China is willing to accept per tonne of waste -- higher standards that most countries currently cannot meet.

Some are now looking at emerging markets elsewhere such as India, Pakistan or south-east Asia, but it could be more expensive than shipping waste to China.

The ban risks causing a “cat-astrophic” environmental problem as backlogs of recycla-ble waste are instead incinerated or dumped in landfills with other refuse. In the US, collec-tors of recyclables are already reporting “significant stockpiles” of materials, said Adina Renee Adler, senior director of inter-national relations at the Institute of Scrap Recycling Industries (ISRI).

“Some municipalities have announced that they will either not take certain materials or direct them to landfills,” she said.

Brandon Wright, a

spokesman for the US National Waste and Recycling Associa-tion, told AFP that some facilities were storing inventory outside or in parking lots.

The ban has also created challenges for Chinese compa-nies dependent on foreign waste.

“It will be very hard to do business,” said Zhang Jinglian, owner of the Huizhou Qinchun plastic recycling company in s o u t h e r n G u a n g d o n g province.

More than half their plastics were imported, and as prices for such raw materials go up, pro-duction will be reduced by at least a third, he said. He had already let go a dozen employees.

Others, such as Nantong Heju Plastic Recycling in coastal Jiangsu province, will “no longer do business” at all, a represent-ative said.

But at the same time, the ban could jolt China into improving its own patchy recycling sys-tems, allowing it to reuse more local materials, said Greenpeace plastics expert Liu Hua.

“In China at the moment, there isn’t a complete, legal and regulated recycling system in place,” he said, with even big cit-ies like Beijing reliant on illegal scavengers.

“When there aren’t resources coming from abroad, there’s a greater likelihood of us improving our own internal recycling.”

Germany faces risks & higher costs without focus on green financeREUTERS

BERLIN: Germany faces grow-ing risks and high costs if it does not revamp its financial system to focus more on climate change and sustainability, according to a new report by the World Wild-life Fund and finance groups including Deutsche Boerse.

The study faulted German conservatives and Social Dem-ocrats, who are considering renewing the ‘grand coalition’ that has ruled Europe’s largest economy since 2013, for failing to even address ‘green finance’ in their blueprint for a new government.

“This is not about adding a green brick to the financial tool kit. It’s about the fundamental climate and environmental com-patability of all financial structures and finance flows,”

said Joerg-Andreas Krueger, a top WWF official in Germany.

The report, prepared by WWF, the Frankfurt School of Finance & Management and the Hub for Sustainable Finance Ger-many, which includes Deutsche Boerse, said Germany should follow the lead of other European Union countries like France, Sweden and Britain -and even China - in using their capital markets to help encourage sus-tainable investments and work toward climate goals.

Failing to take a holistic approach portends significant risks for investors and citizens in coming years, given the high costs involved in meeting ambi-tious global targets for reducing carbon dioxide emissions set under the Paris climate accord.

The report urged introduc-tion of climate stress tests to

avoid the loss of investments, or so-called stranded assets, in areas such as coal technology.

Such investments will lose value as the global community implements the Paris accord and moves away from fossil fuels, the report said, underscoring the fiduciary responsibilities of pen-sion funds and other institutional

investors. A systematic approach would also help steer invest-ments into promising areas of the renewable energy market instead of continuing to encour-age funding in fossil fuel-related projects.

That in turn could also help create new opportunities for many sectors of the German

economy, the report said.“It is important that the risks

associated with climate changes are sufficiently accounted for in risk management and made transparent to investors,” the report said.

“This serves core goals of financial market regulation such as ensuring the stability and effi-ciency of the financial system.”

The BDI industry association this week estimated it would cost Germany more than ¤1trillion ($1.2 trillion) to meet the lower end of the EU’s target to reduce carbon dioxide emissions by 80 to 95 percent by 2050.

Hitting the upper target would require large amounts of additional spending, it said, warning that German competi-tiveness could be jeopardised unless the carbon reduction tar-gets were adopted worldwide.

Germany’s would-be coali-tion partners have agreed to drop plans to lower CO2 emissions by 40 percent from 1990 levels by 2020, although they intend to keep a 55 percent target for 2030.

The WWF study recom-mended several key steps to ensure stability in financial mar-kets, including improved risk management and better analyt-ical capabilities.

The federal government should also follow the lead of other European countries and some German states, by adopt-ing sustainable guidelines for its own investments, setting crite-ria for new bourse listings, using special market indices and issu-ing so-called green bonds, as well as integrating German cli-mate targets into its export guidelines.

The ban risks caus-ing a “catastrophic” environmental prob-lem as backlogs of recyclable waste are instead incinerated or dumped in landfills with other refuse.

The ban bars imports of 24 categories of

waste.

ADT IPO at New York Stock ExchangeTimothy Whall (centre), CEO of ADT, celebrates his company’s IPO by ringing the opening bell above the floor of the New York Stock Exchange shortly after the opening bell in New York, US.

Twitter’s Noto is said to be among finalists as SoFi CEOBLOOMBERG

NEW YORK: Anthony Noto, Twitter Inc.’s chief operating officer, is in talks with Social Finance Inc. to become the online lending company’s new chief executive officer.

San Francisco-based SoFi has been searching for a leader since September, when co-founder and CEO Mike Cagney departed amid turmoil at the firm. Noto has yet to accept an offer, and talks could still fall apart, according to people familiar with the matter. He is one of fewer than a handful of finalists for the role, with as many as two women and two men in the running, said the people, who asked not to be ident i f ied s ince the

matter is private. SoFi declined to comment. Twitter spokes-woman Kristin Binns said, “As a policy, we don’t comment on rumors and speculation.”

The news was earlier reported by the Wall Street Journal.

Twitter hired Noto as chief financial officer in 2014 with a stock award worth more than $60 million, following a career in banking at Goldman Sachs Group Inc., where he helped Twitter go public. He briefly served as the finance and oper-ations head before taking over as chief operations officer in 2016. Noto has played a large role in leading the company’s product vision, especially in shaping the platform’s future around live video streaming.

Tom Hutton, SoFi’s execu-tive chairman, has been serving as interim CEO.

SoFi, one of the most valu-able financial technology startups, came under criticism late this summer amid claims of sexual harassment and fraudu-lent actions by managers. Cagney quit amid the company turmoil, and other high ranking executives have also left, includ-ing the chief financial officer and chief revenue officer. Cagney has denied wrongdoing.

SoFi’s former CEO was instrumental in the company’s vision of becoming a financial supermarket for millennial. His successor will have to decide the extent to which the company, will continue to expand into other businesses.

Amazon’s automated grocery opens todayREUTERS

SEATTLE: Amazon.com Inc will open its checkout-free grocery store to the public today after more than a year of testing, the company said, moving forward on an experiment that could dramatically alter brick-and-mortar retail.

The Seattle store, known as Amazon Go, relies on cameras and sensors to track what shop-pers remove from the shelves, and what they put back. Cash registers and checkout lines become superfluous - custom-ers are billed after leaving the store using credit cards on file.

For grocers, the store’s open-ing heralds another potential

disruption at the hands of the world’s largest online retailer, which bought high-end

supermarket chain Whole Foods Market last year for $13.7 billion. Long lines can deter shoppers, so a company that figures out how to eradicate wait times will have an advantage.

Amazon did not discuss if or when it will add more Go loca-tions, and reiterated it has no plans to add the technology to the larger and more complex Whole Foods stores.

The convenience-style store opened to Amazon employees on Dec. 5, 2016 in a test phase. At the time, Amazon said it expected members of the pub-lic could begin using the store in early 2017.

But there have been chal-lenges, according to a person

familiar with the matter. These included correctly identifying shoppers with similar body types, the person said. When children were brought into the store during the trial, they caused havoc by moving items to incorrect places, the person added.

Gianna Puerini (pictured), vice president of Amazon Go, said that the store worked very well throughout the test phase, thanks to four years of prior legwork.

“This technology didn’t exist,” Puerini said, walking through the Seattle store. “It was really advancing the state of the art of computer vision and machine learning.”

Australian tax office to audit 20 million foreign visa holdersREUTERS

SYDNEY: The Australian Taxa-tion Office (ATO) will investigate more than 20 million interna-tional visa holders and foreign students using data-matching audits to catch tax avoidance and enforce superannuation compli-ance, the agency said yesterday.

The three-year data match-ing audit will cross-reference information from the Australian government’s Home Affairs Department with ATO records.

“It is estimated that records of 20 million individuals will be obtained over the course of the three-year period,” the ATO con-firmed. “These records will be electronically matched with ATO data holdings to identify non-compliance with obligations under taxation and superannu-ation laws.”

If any discrepancies are found, the individual will have 28 days to respond before administrative action is taken, ATO said.

A systematic ap-proach would help steer investments into promising areas of the renewable energy market in-stead of continuing to encourage funding in fossil fuel-related projects.

A new report by the World Wildlife Fund and finance groups including Deutsche

Boerse said that

21MONDAY 22 JANUARY 2018 BUSINESS

Europe readies riposte to ‘America First’ pushREUTERS

DAVOS: European leaders will be out in force at the World Economic Forum in Davos this week to defend multilateralism before US President Donald Trump arrives to deliver his “America First” message.

Politicians, business chiefs, bankers and celebrities will meet in the Swiss Alps under the banner “Creating a Shared Future in a Fractured World” for the four-day gathering against an unsettling global backdrop.

A decade after the bank-ruptcy of US investment bank

Lehman Brothers helped trigger a global financial crisis, eco-nomic growth has returned and stock markets are hitting record highs.

Yet there is a nagging fear among many in Davos that the brighter economic outlook could turn out to be little more than a mirage if the daunting array of geopolitical threats - from pro-tectionism and climate change to cyber attacks and outright war - gather pace in 2018.

“Not all geopolitical threats are threats to financial markets,” Axel Weber, the chairman of Swiss bank UBS and

former president of the German Bundesbank told Reuters. “But I agree that there may be a dis-connect, which has been going on for some time already and may well continue for some time.”

The Global Risks Report pub-lished by the WEF last week showed that many see a height-ened risk of political and eco-nomic confrontations between major powers this year.

Trump, the first sitting US president to attend the forum since Bill Clinton in 2000, is a source of much of this anxiety after a volatile first year in office in which he has turned Amer-ican foreign policy on its head.

The forum will open tomorrow with a speech by India’s Prime Minister Narendra Modi and end on Friday, when Trump is due to address the mas-sive auditorium where Chinese President Xi Jinping spoke last year, offering to fill the global leadership void created by an inward-looking Washington.

White House officials said over the weekend that a govern-ment shutdown in the United States was unlikely to prevent Trump from making the trip,

although the budget director Mick Mulvaney said it was now “in flux”.

In the days between Modi and Trump, the leaders of Europe’s biggest countries, absent from Davos last year and emboldened by their own eco-nomic recovery, will offer an alternative vision to Trump and Xi, who the Europeans say has failed to deliver on his promise of a year ago to open China up to foreign investment.

The charge will be led by French President Emmanuel Macron, the new star of Euro-pean politics, who in an auda-cious move, has invited many of the business leaders who will be in Davos to the Palace of Ver-sailles today to press them to invest in France.

When he speaks in Davos on Wednesday, the former invest-ment banker will offer his own “diagnosis” of globalisation and set out a vision for addressing widening inequalities, global warming and the rise of nation-alism, his advisers say.

“I don’t think Macron will be able to resist being the counter-Trump,” said Robin Niblett, director of the Chatham House

think tank in London. Macron will be joined by German Chan-cellor Angela Merkel, returning to the world stage after months of political limbo at home, and Italian Prime Minister Paolo Gentiloni.

European Commission Pres-ident Jean-Claude Juncker, back in Davos after a 20-year absence, is also due to speak.

The WEF is a marathon of

panel discussions, lunches and parties that delve into subjects as diverse as terrorism, artificial intelligence and wellness.

Criticised in past years for not representing women, the WEF appointed seven female co-chairs this year, including Chris-tine Lagarde, the head of the International Monetary Fund (IMF) and Ginni Rometty, the CEO of IBM.

Missouri offered $2.5bn in incentives to AmazonAP

JEFFERSON CITY: The state of Missouri offered Amazon nearly $2.5bn in incentives spread over 10 years in its failed bid to lure the compa-ny’s second headquarters to the state, according to figures released on Friday by the state Department of Economic Development.

The state proposed building an “innovation cor-ridor” between Kansas City and St. Louis to provide employees and sites for Amazon. The state’s two big cities also submitted their own bids for the headquarters.

The proposal to the online retailer was one of about 240 bids from across the country trying to land Amazon’s second headquarters, which the Seattle-based company promised would bring up to 50,000 jobs and an invest-ment of more than $5bn.

On Thursday, Amazon whittled the list down to 20 potential sites and the three bids from Missouri didn’t make the cut.

In the state’s proposal, the $2.42bn in incentives would have funded seven different programs, including $1.36bn in refundable tax credits.

When announcing the bid last October, Missouri Chief Operating Officer Drew Erd-mann said the innovation corridor would include Columbia, the home of the University of Missouri. It also would have provided a labor force of close to 3 million people, and give the employees the option of living in rural, urban or college-town cities.

Other parts of the pro-posal included incentives to locate the headquarters in a distressed area of the city, tax credits to invest in rural broadband, individual income tax deductions for Amazon employees who relocated to Missouri and refundable con-tribution tax credits in return for Amazon’s investments in science and technology-focused educational pro-grammes for Missouri’s youth.

The state also offered to create a fund operated by a public board that would invest in Amazon securities and fund local infrastructure projects.

UK must stay in customs union with EU: Business groupBLOOMBERG

LONDON: The UK should ensure it stays in a close and compre-hensive customs agreement with the European Union, providing tariff-free trade in all goods after Brexit, according to the leader of a major business group.

Remaining in a customs union with the EU will be far more valuable than striking trade deals elsewhere, Carolyn Fairbairn (pictured), director general of the Confederation of British Industry, will say today, based on excerpts from her pre-pared remarks.

“The idea behind a customs union is simple: a single set of tariffs for goods imported from outside the EU, enabling tariff free trade within it,” Fairbairn

will say. “It brings no obligations over freedom of movement, or payment and removes some of the heaviest trade barriers.”

Prime Minister Theresa May aims to take Britain out of the EU’s 28-country customs union to gain the freedom to sign new trade agreements with other nations such as the US, Australia and New Zealand. Brexit-sup-porters in her Tory party say winning back the power to make Britain a “global trading nation” is a key prize of escaping the EU’s rules.

But Fairbairn and other business leaders such as Mike Thompson, who represents the country’s pharmaceutical industry, disagree. “Any change to existing customs arrange-ments could create border

chaos, cause damaging delays and ultimately put patients and public health at risk,” Thompson, chief executive of the Associa-tion of the British Pharmaceu-tical Industry, said by in emailed remarks yesterday.

May’s ministers and officials are working to hash out what they want the final Brexit trade deal to look like. French Presi-dent Emmanuel Macron on Sat-urday said the country will likely end up with something “between full access and a trade agree-ment.” The UK and EU aim to negotiate a transitional phase by the end of March, before moving on to map the future trading terms by October.

The CBI, which represents 190,000 UK businesses employing seven million people, wants Brexit negotiators to step up the pace of talks. “Time is running out—by March next year our country will be out of the EU,” Fairbairn will say. “We need to end this game of who-blinks-first and instead find a

new spirit of urgency.”Speaking at the University

of Warwick, near the city of Cov-entry in central England, Fair-bairn will call for a trade accord with the EU that is better than Canada’s, which excludes finan-cial services. Customs union membership would also resolve the question of how to keep an open border between Ireland and the U.K., seen as important for maintaining peace, she will say.

Richard Tice, co-chair of the Brexit campaign Leave Means Leave, said staying in the cus-toms union would “handcuff” British businesses. “Only by leaving the customs union can the UK forge new independent trade deals with the rest of the world,” he said.

Russia will recapitalise Promsvyazbank to service defence sectorREUTERS

MOSCO: Russia’s Promsvyaz-bank (PSB), bailed out by the central bank last month, will be recapitalised and transferred to the government and will service the defence sector, the finance ministry said on Friday.

The decision fits within Russia’s efforts to protect its financial system from the risk of a further tightening of US sanctions. The Russian central bank has in the past published a list of banks that provided services to the defence sector. Banks on the list included Sber-bank, VTB, Russian Agriculture Bank, Gazprombank and pri-vately-owned Rossiya.

The central bank has sub-sequently stopped publishing the list. According to a report by Prime news agency last Feb-ruary, Russian banks held 589 billion roubles ($10.4bn) of defence sector funds at the start of 2017. PSB’s new role as the bank servicing the defence sector increases the risk of it being included on a new US sanctions list, Alexander Danilov, senior director with Fitch ratings agency in Moscow, said.

PSB will be recapitalised in the first quarter of 2018 and then be transferred to the gov-ernment, the central bank said. It declined to comment further on the process or the amount that would be needed.

In December, the bank had estimated PSB’s bailout would cost between $1.8bn and $3.5bn.

“Because of its size, a wide network of branches and a number of other characteris-tics, the bank will be optimally suited for the role of a bank working with the state defence order and major state con-tracts,” the ministry said.

PSB will continue its existing work alongside its new role as the defence industry bank, the central bank said.

Pyotr Fradkov, the head of the Russian export centre and a son of a former head of Rus-sia’s foreign intelligence service, is expected to be appointed as the bank’s head, the finance ministry said.

Fradkov said in a separate statement he had accepted the offer and had already started to take part in work, together with the government and cen-tral bank, on preparing legisla-tion to move the defence sec-tor’s banking operations to PSB.

“I believe that the bank has all the competence and finan-cial capabilities, wide regional branch network and good experience..., including with the defence companies, to deliver on this huge task,” Fradkov said.

He said PSB is expected to continue working both with corporate and retail clients as well as the defence industry.

There is a nagging fear among many in Davos that the brighter economic outlook could turn out to be little more than a mirage if the daunting array of threats, from pro-tectionism to cyber attacks, gather pace in 2018.

The WEF has appointed seven female co-chairs

this year, including Christine Lagarde,

head of IMF and Ginni Rometty,

the CEO of IBM.

The World Economic Forum (WEF) logo seen under the snow ahead of the opening day of the WEF 2018 annual meeting in Davos, yesterday.

Afghan’s dicarded bank notesAfghan authorities prepare to burn soiled and discarded bank notes in Kandahar, Afghanistan, yesterday. Some 470 million worth Afghan currencies were burned by the central bank in Kandahar.

China’s Byton seeks $400mBLOOMBERG

HONG KONG: Byton, the Chinese electric car startup founded by former BMW AG executives, is seeking about $400m in a new round of funding.

The Nanjing-based com-pany, which showcased a con-cept car at the Consumer Elec-tronics Show in Las Vegas this month, has been reaching out to potential investors to gauge their interest, according to the people, who asked not to be identified

because the information is private.

Byton, formerly known as Future Mobility Corp, this month unveiled an electric SUV that uses facial recognition to unlock doors, Amazon’s Alexa to enter-tain and a 49-inch screen across the dashboard. Its first model will be available for sale next year starting at $45,000, compared with a $35,000 base price for Tesla’s Model 3.

No final agreements have been reached, and details of the fundraising plan could change,

the people said. A representative for Byton declined to comment.

Byton received $200m from a Suning Holdings Group Co. fund and some state-owned firms in Jiangsu province, Chief Operating Officer Daniel Kirchert said in August. China Harmony New Energy Auto Holding Ltd. is also an investor in Byton.

The company’s chief execu-tive officer, Carsten Breitfeld, was a leading engineer for BMW’s i8 electric car and worked at the German maker for about 20 years.

22 MONDAY 22 JANUARY 2018BUSINESS

AI & virtual reality make inroads in tourism sectorAFP

MADRID: A hotel room auto-matically adjusting to the tastes of each guest, virtual reality headsets as brochures: the tour-ism sector is starting to embrace new technologies, hoping to benefit from lucra-tive personal data.

In a prototype of the hotel of the future on display at Madrid’s Fitur tourism fair, receptionists have disappeared and customers are checked-in via a mirror equipped with facial recognition.

Once the client is identified, the room adapts itself automat-ically to all demands made at reservation: temperature, light-ing, Picasso or Van Gogh in the digital frames hanging on the walls.

“Technology will allow us to know what the client needs before he even knows he wants it,” says Alvaro Carrillo de Albornoz, head of Spain’s Hotel Technology Institute, which promotes innovation in the sector.

Some hotels already offer such experiences at a more basic level.

But the room prototype put on show by French technology consultancy Altran, aimed at luxury hotels, has incorporated cutting-edge speech recognition

technology, allowing for instance a guest to order a pizza in 40 languages.

“Even the lock is intelli-gent—it opens and closes via the WhatsApp application on the client’s phone,” says Carlos Mendez, head of innovation at Altran.

The mattress is equipped with sensors and records the movements of those sleeping, which could prompt hotel staff to offer them a coffee when they wake up.

Generally speaking, hotels are hoping to use artificial intel-ligence (AI) to get better knowledge of their clients via personal data provided on res-ervation or “beacon” technology used once the client is in the hotel or resort.

Restricted in some coun-tries, the latter involves placing a beacon in the hotel that will detect customers’ smartphones, meaning they will know how much time they spend in their rooms, for instance, or at what time they go to the pool.

Fed with this data, AI algo-rithms will get to work, determining what the clients’ habits are to lure them back again by offering a tailor-made experience, or sell them addi-tional products.

If the algorithm “knows that when you come to the hotel

with your wife, you don’t eat at the restaurant but order room service, it will propose a special room menu with a bottle of champagne,” says Carrillo.

“But if you come with your entire family, it will propose a reduction on kids’ menus.”

For Rodrigo Martinez, head of consultancy Hotel Servicers, these technological tools could also help improve hotels’ productivity.

“All purchases can be made automatic,” he says.

“For instance, if a huge amount of Brits are coming, the system will know that it has to order more bacon.”

Manufacturers of virtual reality (VR) headsets are also jumping onto the bandwagon.

At various Fitur stands, vis-itors are able to immerse themselves in the streets of Marrakech or amble along a portion of the Santiago de Com-postela pilgrims’ trail.

“We’re in a completely pio-neering phase,” says Marcial Correal, head of the Spanish association for virtual travel agencies, who is promoting this tool to tourism professionals as the brochure of the future, with-out too much success so far.

“Professionals say ‘how amazing’ but they don’t buy it. It’s not in their marketing budget priorities.”

Headsets themselves are not too pricey, between €50 and €600 ($60 and $730), says Cesar Urbina of virtual reality agency Iralta.

“Then there’s content pro-duction, a little more than a normal video—from €2,000 up to €150,000.”

Hotel chain Palladium, however, has decided to give it a go.

Its salespeople no longer have paper brochures on them to present their hotels to travel agents, they carry virtual real-ity headsets.

Using these, the agents can virtually visit rooms, pools or restaurants at every one of their hotels. Ivan Corzo, head of mar-keting for Europe at the group, says this gives travel agents a better idea of what the hotels are really like.

They “tell us it helps them sell,” he says.

“It’s much more difficult to cheat with VR headsets,” adds Urbina.

Morocco’s tourism office is also using VR.

“Tourism is linked to expe-riences, sensitivity,” says Siham Fettouhi, head of e-marketing at the office.

“Virtual reality can’t replace the taste of local cuisine or the smell of the ocean. But it makes you want to explore more.”

Stronger inflation in 2018 may surprise a lot of investorsBLOOMBERG

OSLO: Inflation is what could jolt the markets this year. At least that’s what the tactical asset allocation team at DNB Asset Management is preparing for.

“Inflation surprising on the upside is the biggest risk,” Torje Gundersen, portfolio manager, said in an interview. “2018 can be the year when stronger infla-tion surprises a lot of investors.”

Global economic growth spurred the stock rally in 2017. But inflation expectations are likely to rise as the prolonged expansion eats into spare capac-ity and the US cuts taxes. The yield on the US 10-year Treas-ury note climbed in the past week to the highest levels since 2014.

“The timing of the tax cuts is therefore wrong in our view,” said Gundersen, whose team manages about 33 billion kro-ner ($4bn). “The effect is comparable to pouring gas onto a campfire. The economy will overheat and financial condi-tions will tighten more than the markets expect.”

Gundersen sees the US 10-year Treasury yield rising toward 3 percent. DNB’s asset allocation team is neutral equi-ties and bonds, but has sold out of its holdings in US and Euro-pean investment grade bonds.

“They have a low yield and long duration,” he said. “If inter-est rates rise there’s a risk of negative return.”

Instead, Gundersen holds Nordic high-yield bonds with shorter duration. He also takes region and sector bets to seek excess return in the stock mar-ket. His portfolios are overweight energy, materials and industri-als, which are likely to get some support from accelerating inflation.

He also prefers an over-weight in technology companies. “They have a very strong under-lying growth,” he said. “They aren’t cheap but they aren’t more expensive compared with the rest of the market.”

The DNB Aktiv 80 fund had an average annual return of 14 percent in the past five years. But investors should expect lower returns in the coming years, according to Gundersen.

QATAR STOCK EXCHANGE

QE Index 9,145.44 0.59 %

QE Total Return Index 15,336.36 0.59 %

QE Al Rayan Islamic Index 3,627.78 0.96 %

QE All Share Index 2,589.05 0.88 %

QE All Share Banks &

Financial Services 2,839.85 0.97 %

QE All Share Industrials 2,832.26 0.33 %

QE All Share Transportation 1,907.65 0.99 %

QE All Share Real Estate 1,970.27 1.02 %

QE All Share Insurance 3,518.04 2.93 %

QE All Share Telecoms 1,147.18 1.22 %

QE All Share Consumer

Goods & Services 5,275.15 0.99 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

21-01-2018Index 9,145.44

Change 54.66

% 0.59

YTD% 7.30

Volume 11,874,834

Value (QAR) 203,467,410.99

Trades 3,293

Up 09 | Down 30 | Unchanged 018-01-2018Index 9,200.10

Change 41.33

% 0.45

YTD% 7.94

Volume 11,149,541

Value (QAR) 886,020,309.42

Trades 4,014

EXCHANGE RATE

GOLD QR156.4078 per grammeSILVER QR1.9999 per gramme

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

All Ordinaries 6165.9 -21.8 -0.35 6256.5 6141.4

Cac 40 Index/D 5529.67 19.98 0.36 5529.3 5258.66

Dj Indu Average 25803.19 228.46 0.89 25810.43 19677.94

Hang Seng Inde/D 31904.75 565.88 1.81 31733.18 30028.29

Iseq Overall/D 7080.61 -12.06 -0.17 7223.07 7016.09

Kse 100 Inx/D 42921.97 574.48 1.36 43824.02 40169.62

S&P 500 Index/D 2786.24 18.68 0.674963 2767.56 2682.36

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 5.0039 QR 5.1355

Euro QR 4.4103 QR 4.5397

CA$ QR 2.8875 QR 2.9679

Swiss Fr QR 3.7435 QR 3.8572

Yen QR 0.03261 QR 0.03324

Aus$ QR 2.8769 QR 2.9645

Ind Re QR 0.0563 QR 0.0574

Pak Re QR 0.0336 QR 0.0336

Peso QR 0.0711 QR 0.0726

SL Re QR 0.0234 QR 0.0239

Taka QR 0.04451 QR 0.0444

Nep Re QR 0.0352 QR 0.0359

SA Rand QR 0.2942 QR 0.31112

Facebook unveiled major changes on Friday to the News Feed of its 2 billion users, announcing it will rank news organisations by credibility based on user feedback and

diminish its role as an arbiter of the news people see.The move comes after the company endured

harsh criticism for allowing disinformation to spread on its social network and for favouring liberal outlets over conservative ones. In a blog post accompanying the announcement, chief executive Mark Zuckerberg wrote Facebook is not “comfortable” deciding which news sources are the most trustworthy in a “world with so much division.”

“We decided that having the community determine which sources are broadly trusted would be most objective,” he wrote.

The new trust rankings will emerge from surveys the company is conducting. “Broadly trusted” outlets that are affirmed by a significant cross-section of users may see a boost in readership, while less known organisations or startups receiving poor ratings could see their web traffic decline significantly on the social network. The company’s changes include an effort to boost the content of local news outlets, which have suffered sizable subscription and readership declines as news consumption migrated online.

The changes follow another major News Feed redesign, announced last week, in which Facebook said users would begin to see less content from news

organisations and brands in favour of “meaningful” posts from friends and family. Currently, 5 percent of Facebook posts are generated by news organisations; that number is expected to drop to 4 percent after the redesign, Zuckerberg said.

Facebook and other Silicon Valley giants are grappling with their roles as dominant distributors of information in an era of foreign manipulation of social media platforms and dwindling revenues for many

media outlets. On Friday, Google announced it would cancel a two-month-old experiment, called Knowledge Panel, that informed its users that a news article had been disputed by independent fact-checking organisations. Conservatives had complained the feature unfairly targeted a right-leaning outlet.

More than two-thirds of Americans now get some of their news from social media, according to Pew Research Center. That shift has empowered Facebook and Google, putting them in an uncomfortable position of deciding what news they should distribute to their global audiences. But it also has led to questions about whether these corporations should be considered media companies.

Daniel Kreiss, a professor at the school of media and journalism at the University of North Carolina at Chapel Hill, said Facebook was now “offloading” its responsibilities for accuracy and quality onto its users. “Just by putting things out to a vote in terms of what the community would find trustworthy undermines the role for any serious institutionalised process to determine what’s quality and what’s not,” he said.

Facebook to ask users to rank news organisations they trust

Bonds to get by without a little help from central banks

ELIZABETH DWOSKINTHE WASHINGTON POST

AFP

THE rebound of global growth is sounding the death knell for easy money, so debt markets should see the backs

of central banks in 2018, although a gradual withdrawal should help avoid a new tantrum sending interest rates spiking.

The colossal sums that central banks injected into the financial systems to ward off economic cataclysm went primarily into the debt markets, which will have the biggest adjustment to make as part of the so-called normalisation of monetary policy by central banks.

As central banks slow down their purchases of debt and then reduce their holdings the interest rates that governments and companies pay to borrow money are expected to climb higher.

While everyone expects borrowing costs to rise in 2018, the key question is whether it will happen smoothly or not. Any disruptions in the credit markets can have a severe impact on the overall

economy.In Europe, where

the European Central Bank (ECB) is set to continue buying €30bn of assets each month until September, ultra low or even negative on certain maturities, there is a lot of optimism in the air.

“We don’t see a strong break with 2017” said Felix Orsini, who handles government debt issues for Societe Generale’s commercial and investment bank.

“There is a deep

resilience of the market, and there is still plenty of appetite for risk and there is a large margin for manoeuvre before the level of dissuasive rates,” he told AFP.

HSBC’s Frederic Gabizon shares that view. He foresees “a moderate increase in rates paid by companies and European states in 2018”.

Most bond market experts see the greatest risk as sharp readjustment of the market where interest rates spike higher, as happened in the 2013 “taper tantrum” when investors panicked in reaction to news that the US Federal Reserve would reduce, or taper, its purchase of bonds, thus sending rates of return surging higher.

With the US Fed taking the lead in the normalisation, cutting its holdings of bonds along with raising interest rates, investors and experts are looking at how borrowing costs evolve there.

There have been a few voices of caution, such as S&P Global Ratings and the International Monetary Fund’s chief economist, Maurice Obstfeld.

“If you look around the world, there is a lot debt,” Obstfeld said recently. “If there were a sudden rise in US interest rates, that could put a lot of debtors under stress.”

But Rene Defossez, a London-based debt analyst at French investment bank Natixis, said “central banks aren’t taking any risks, they are normalising their policies on tiptoes and with inflation still extremely weak they don’t have any reason to rush.”

Eric Vanraes, head of fixed income investments at the Swiss-based Sturdza Banking Group said “it is difficult to imagine the Fed losing its bearings and making too quick an exit. It has learned its lesson.”

In the United States, the Fed did not include corporate bonds in its buying programme, whereas the ECB did.

But even if European firms will have “live with this exit, without the

ECB, the balance between supply and demand is in their favour,” said Orsini at Societe Generale.

Moreover, “since 2008, and that is one of the big lessons of the crisis, companies are preparing for periods” when debt markets are unaccessible and are managing their liquidity prudently, he said.

On the political level, the situation appears to be calmer in 2018 as only Italy has elections, whereas the previous two years had a heavy electoral calendar.

For debt market analysts, there is a good chance that 2018 will turn out to be a good year, much as 2017 was.

“The ultra low interest rate environment allowed big groups to at once reinforce their financial structures in favourable conditions, but also finance very important” mergers and acquisitions in 2017, said Gabizon at HSBC.

For Sturdza’s Vanraes, what is most likely to change in 2018 is volatility.

“After years where the monetary programmes drowned out volatility on all the markets, investors will have to get used again to erratic movements” both in amplitude and duration.

IN February 2015, shortly after Greece’s new anti-bailout government swept to power with promises of

ending austerity, a little-known European official flew to Athens on a secret trip to deliver a message, the ramifications of which continue to reverberate today.

Sitting down with a small group of government ministers, the Austrian economist spelled out the consequences of Greece defaulting on its loans. First, the country would be cut off from the international funds needed to pay salaries and pensions. As capital flight ensued, banks would collapse and the economy would follow. His audience, however, wasn’t convinced, until his prophesies were all but

realised six months later. The trip, orchestrated by higher powers in Brussels and Berlin, highlights the key role played behind the scenes by Thomas Wieser, head of the influential euro-working group, in helping quell the crisis that racked the euro area. As Wieser now prepares to leave his post at the helm of one of the bloc’s most powerful bodies later this month, the lessons learned during those turbulent times are informing the debate among governments on how to strengthen the 19-nation currency region.

The mandarin’s departure signals the end of an era for the old guard who faced unprecedented financial calamity, while the bloc’s attention has shifted from managing chaos to avoiding it altogether. Today, euro-area finance ministers are expected

to appoint Dutch Treasury Director General Hans Vijlbrief to succeed Wieser, in a meeting that will otherwise focus on further steps to complete the bloc’s banking union and develop its crisis-fighting fund.

The sharp-witted 63-year-old Wieser is little known outside EU institutions and finance ministries. But from his office on the third floor of the gray Justus Lipsius European Council building in Brussels -- where leaders have held countless emergency summits -- he has overseen the euro’s ascension, transformation and brush with disintegration.

Since 2012, Wieser has led the officials that prepare the monthly meetings of euro-area finance ministers, known as Eurogroup. The so-called EWG was notoriously powerful during the crisis, green-lighting emergency loans and

leading discussions on issues such as banking rule overhauls and the bloc’s crisis-fighting apparatus.

One month after his 2015 trip failed to convince the Greeks to drop their brinkmanship, tensions between Athens and its creditors were growing, and Wieser was back on a plane to Greece for a second clandestine mission. German Chancellor Angela Merkel had invited Greek Premier Alexis Tsipras to Berlin in an effort to break the deadlock, and Wieser’s mission was to ensure the Athens’s delegation was up to the task. Over pasta and chicken at then-finance minister’s Yanis Varoufakis’s house, he attempted to prepare the Greeks for their first visit to the Chancellery. The surreptitious trip was characteristic of Wieser who, while never in the limelight,

was always in the center of countless critical efforts that ensured the euro survived its greatest crisis yet.

“Thomas Wieser is a man who advances without seeking fame,” Valdis Dombrovskis, the EU commissioner in charge of the euro, said in an interview. “He is one of these skilled statesmen who will be little known to the large public, yet without whom history would not be the same.”

Wieser’s departure at the end of January, which aligns with the end of Eurogroup Chief Jeroen Dijsselbloem’s tenure, will likely rob the group of depth and experience just as the euro area enters a critical junction. With the worst of its crisis behind it, and helped by the election of deeper-integration advocate Emmanuel Macron in France, the bloc is now looking at strengthening itself in the face of future financial turmoil.

Euro-area economist departs as bloc seeks to start new chapterVIKTORIA DENDRINOUBLOOMBERG

Mark Zuckerberg wrote Facebook is not “comfortable” deciding which news sources are the most trustworthy in a “world with so much division.”

As central banks slow down their purchases of debt and then reduce their holdings the interest rates that governments and companies pay to borrow money are expected to climb higher.

Since 2012, Wieser has led the officials that prepare the monthly meetings of euro-area finance ministers, known as Eurogroup.

23MONDAY 22 JANUARY 2018 BUSINESS

People walk past ECB headquarters in Frankfurt, Germany, in this file photo.

In Europe, where the European Central Bank (ECB) is set to continue buying €30bn of assets each month until September, ultra low or even negative on certain maturities, there is a lot of optimism in the air.

24 MONDAY 22 JANUARY 2018

INsightback to BUSINESS

CAPITALCOMMENT

Opec and its allies see merit in maintaining their output

limits into 2019.

Mohammed bin Hamad Al RumhyOil Minister, Oman

Market TalkNAME IN THE MARKET: GREEN BONDS

After a year of political spectacle, it’s doubtful a gov-ernment shutdown will be enough to divert investors from the economic and earnings tidings that have

occupied Wall Street’s minds of late.As long as it doesn’t last too long.Indeed, you would’ve had a hard time telling anything

was amiss yesterday, with US stocks surging to their 10th gain in 13 days and closing at a record even as impasse built in Washington. That standoff culminated around midnight as Senate Democrats and a handful of Republicans blocked a funding bill and the US government officially entered a partial closure.

“I’m not overly worried,” Jurrien Timmer, head of global macro at Fidelity Investments, said in a phone interview Wednesday. “The government would have to be shut down days and weeks on end for GDP to be affected, or earnings

to be affected.”Barclays Plc estimates

that the shutdown will shave 0.1 percentage point off gross domestic product in the quar-ter, not much in an economy forecast to rise by 2.8 percent, according to estimates com-piled by Bloomberg. Unless the stalemate lingers, the impact may have a hard time rattling markets that have been focused on benefits from the recently passed tax over-haul, improving corporate profitability and synchronized global economic growth.

“Many of the employees in the nonessential departments are put on furlough and then

paid retroactively,” notes Neil Dutta, head of US economics at Renaissance Macro Research. “In 2013, we saw a 16 day shutdown and fourth-quarter GDP was 4 percent. Whatever hit there is, gets made up quickly thereafter.”

That calm prevailed as signs of a deadlock gathered shows how desensitized investors have become to political wrangling. And why not? In 18 shutdowns over the past 42 years, the median return of the S&P 500 has been 0 percent, according to LPL Financial Research.

“Although a government shutdown sounds scary, the reality is it has been a non-event historically for equities,” LPL’s Ryan Detrick wrote in a note to investors last year.

In the most recent example, in October 2013, the S&P 500 slumped 2 percent in the immediate aftermath before reversing to rise 1.8 percent by the time a stop-gap bill was signed. Bonds likewise shrugged off the issue, with 10-year yields adding just five basis points during that span.

The shutdown comes with equity markets surging around the world. The S&P 500 just capped its third straight weekly advance to post the best start since 1987. Earnings optimism fueled partly by President Donald Trump’s tax overhaul has led to one of the biggest upward revisions to profit forecasts on record.

Global stock funds have taken in $58bn over the last four weeks, the most ever recorded, according to Bank of Amer-ica Corp. research based on EPFR data.

For investors used to histrionics, shutdown is one more sideshow NEW YORK / BLOOMBERG

Barclays Plc estimates that the shutdown will shave 0.1 percentage point off gross domestic product in the quarter.

Big brands in race to bin plasticsREUTERS

LONDON: Evian became the latest big brand to turn its back on polluting plastics, pledging to make its water bottles from recycled materials by 2025.

It joined British supermar-ket Iceland, coffee chain Costa and fast-food giant McDonald’s, which have all announced sim-ilar decisions in the last month.

Evian, the luxury mineral water brand owned by Danone , the world’s third-largest bot-tled water company, said it would redesign its packaging, accelerate recycling and recover plastic waste from nature.

The shift by some of the big-gest high-street names answers widespread consumer disquiet over pollution, accelerated after popular British naturalist David Attenborough urged consumers to stop using plastic bottles and start protecting marine life in his “Blue Planet II” documentary series.

Supermarkets have vowed to use less plastic packaging and a tax on plastic bags in Britain

has led to safer alternatives.But plastic bottles remain

ubiquitous - strewn in garbage cans and littering waterways, after bottled water became a lifestyle choice in countries that offer a safe and easy alternative - tap water.

“Evian will drive a step change to address the critical issue of plastic,” said global brand director, Patricia Oliva, in a statement. “We want to use the power of our global brand to take a leadership position.”

The so-called “circular econ-omy” approach is gaining ground in the fight to cut waste, and entails reusing products, parts and materials, producing no waste and pollution, and therefore using fewer new resources and energy.

Britain’s Costa coffee chain said this week that it would remove plastic straws from its stores and replace them in 2018.

“We will launch a non-plas-tic alternative straw this year as part of an ongoing review into all our packaging and takeaway cups,” said Jason Cotta,

managing director of Costa UK & Ireland, part of Whitbread Plc.

This follows recommenda-tions by British lawmakers in January for the introduction of a “latte levy” whereby consum-ers pay an extra 25 pence ($0.34) for a disposable coffee cup.

British supermarket Iceland plans to eliminate plastic pack-aging from its own-brand products by the end of 2023 and will instead use paper and pulp trays along with paper bags, all of which are fully recyclable.

Prime Minister Theresa May this month unveiled a new envi-ronmental agenda which seeks to eradicate avoidable plastic waste in Britain by 2042.

This follows a ban on plas-tic microbeads, common in body scrubs and shower gels.

The combined steps by major consumer companies aim to address criticism that pack-aging and global transportation causes undue environmental damage, as mountains of plas-tic waste get dumped in landfill and oceans every year.

Eight million tonnes of

plastic - bottles, packaging and other waste - enter the ocean every year, killing marine life and entering the human food chain, says the United Nations Environment Programme.

The world’s biggest restau-rant chain McDonald’s Corp said on Tuesday it would switch to environmentally friendly packaging materials and offer recycling in all its restaurants.

McDonald’s said it aims to get all its packaging from renew-able, recycled or certified sources by 2025, with a prefer-ence for products from responsibly managed forests.

The company will also make recycling available in all restau-rants by 2025, up from about 10 percent, and eliminate foam packaging from its global sup-ply chain by year-end.

“Our customers have told us that packaging waste is the top environmental issue they would like us to address,” said Franc-esca DeBiase, McDonald’s chief supply chain and sustainability officer, in a statement.

May pledges new rules to deal with executivesBLOOMBERG

LONDON: UK Prime Minister Theresa May set out a plan to defend capitalism from capi-talists, after the collapse last week of construction company Carillion Plc put at risk public-sector projects from roads to hospitals.

In an article for the Observer newspaper, published Sunday, May pledged new rules to deal with executives “who try to line their own pockets by putting their workers’ pensions at risk.” She attacked a corpo-rate culture that saw “big bonuses for recklessly putting short-term profit ahead of long-term success.”

The newspaper said the new rules could include puni-tive fines for directors, or giving regulators the power to block takeovers that risk pension pots. Carillion’s failure has prompted a debate in Britain about both how companies are run and the extent to which the government relies on busi-nesses to provide services. The UK spends £ 10.3bn ($14.3bn) a year servicing public-private contracts of the type awarded to Carillion, the National Audit Office said last week.

The opposition Labour Party leader Jeremy Corbyn argues the collapse vindicates his longstanding critique of the free-market system.