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QICDRC receives delegation from UAE's DIFC courts

BUSINESSBUSINESSKazakhstan set

for major market reforms

Sunday 11 December 2016

Dow & Brent before going to press

S'HAIL announces launch of shipping companyThe Peninsula

S’HAIL Shipping & Maritime Services, a Qatari private shareholding company has

announced the decision to set up Qatar's first private shipping and maritime services company. The general assembly of the shareholders has given the nod to the board of director’s recom-mendation to launch the new entity, the company announced yesterday

Mohammed Khalifa Abdul-lah Al Sada, Chairman of S’HAIL Shipping & Maritime Services, commented:“The idea of

creating a "S’HAIL shipping & Maritime Services" began in 2015, to take advantage of the urban development in Qatar, particularly in the area of ship-ping of Gabbro.”

Qatar’s heavy demand for Gabbro and its huge import from UAE along with the absence of Qatari companies’ operation in the sector prompted the board to think about launching the company. S’HAIL shipping & Maritime Services has plans to buy seven used ships not older than 12-15 years, which are cur-rently operating in the global market.

Addressing the general assembly Al Sada said the com-pany is currently negotiating for the purchase of two ships and discussions for the purchase of more vessels will be held in next year. The price per vessel ranges from $4.5m to $6m.

More than 50 companies are involved in importing primary construction materials including Gabbro. S’HAIL is ready to coop-erate with these companies.

He said that the company might go public and listed on Qatar Stock Exchange (QSE) in another two years, after getting required regulatory approvals.

Mohammed Khalifa Abdullah Al Sada (second left), Chairman of S’HAIL Shipping & Maritime Services and other Board members at the General Assembly Meeting.

$51.48$51.48+0.66+0.66

BRENT

10,053.95 + 64.66 PTS

0.65%

6,954.21 + 22.66 PTS

0.33%

19,756.85 + 142.04 PTS

0.72%QE FTSEDOW

22 SUNDAY 11 DECEMBER 2016BUSINESS

Doha Bank inaugurates representative office in Dhaka

The Peninsula

Doha Bank yesterday announced it inau-gurated the Bank's Bangladesh repre-sentative office in

Dhaka. The inauguration cere-mony was held in the presence of Qatar's Ambassador to Bang-ladesh, Ahmed Mohamed Al

Dehaimi; Anis A Khan, Manag-ing Director and CEO of Mutual Trust Bank; Abdul Matlub Ahmed, President Federation of Bangladesh Chamber of Com-merce & Industry (FBCCI) and CEOs and Senior Officials of Bangladesh Banks.

On the occasion Doha Bank hosted a grand reception at The Westin Dhaka Hotel in Dhaka on the same day. The reception was attended by banking fraternity and other dignitaries in Bangladesh.

Dr R Seetharaman, CEO of Doha Bank gave an insight to the current global economy scenario. He said: “ The recent IMF out-look had given global growth of 3.1 percent in 2016. A more sub-dued outlook for advanced economies following the June UK vote in favour of leaving the EU and weaker-than-expected growth in the US. As a result, the 2016 growth forecast for advanced economies has been

scaled down to 1.6 percent. Emerging and developing econ-omies expected to grow by 4.2 percent this year.”

Dr Seetharaman also gave an insight on the Bangladesh Econ-omy, and said: “The economy would grow at 7.2 percent in the current 2016-17 financial year. Bangladesh's annual inflation picked up in September, driven by higher food prices, to 5.53 percent. Bangladesh has done an impressive job in reducing pov-erty over the last decades and has the potential to end extreme poverty by 2030."

He added: "To move to the next level and realise its goal of becoming a middle-income country by 2021 and overcom-ing extreme poverty by 2030, the country needs to sustain its eco-nomic and remittances growth, create more and better infra-structure and improving the quality of health and education.”

Ooredoo named strategic partner of DBSThe Peninsula

Ooredoo, in line with its ongoing support for the business sector in Qatar,

recently became the Strategic Partner of ‘Doha Business Solu-tions’ (DBS) and supported its event featuring world-renowned businessman John Mattone.

Held at the W Hotel, the event saw a host of Ooredoo management and staff attend, all with the goal of learning how to create and sustain a leader-ship and talent culture that drives superior operating results.

Ooredoo partnered with the DBS aiming to work together to help build a knowledge based economy, in line with the Qatar National Vision 2030.

Senior management from across Qatar’s leading organisa-tions, including Qatar Foundation, Ashghal, QIA, Sidra, Doha Bank, Al Jazeera Finance, Aspire, Qatari Diar, Qatar Museum Authority among oth-ers, attended the workshop.

The ‘Intelligent Leadership Workshop’ was hosted by John

Mattone (pictured) a pioneer in the consultancy field who has worked with a wide-range of international companies and their chief executives such as Steve Jobs (former CEO of Apple) and many more. Support for this event was part

of Ooredoo HR’s ‘Succession Planning & Leadership Devel-opment programme’ which aims to develop Ooredoo employees by providing them with differ-ent learning opportunities through cross functional pro-grammes, on-the-job trainings,

seminars, and workshops. Since the event, Ooredoo management has begun to roll-out several of the key leadership skills learnt at the workshop to ensure a hap-pier and more productive workforce for its staff and customers.

Senior officials of Qatar's leading organisations attending the event which featured world-renowned businessman John Mattone in Doha recently.

QIPF conducts workshop on macroeconoic conceptsThe Peninsula

Qatar Institute for Public Finance (QIPF), in collab-oration with the Ministry

of Finance (MoF), is conducting a special workshop on the 'Con-cepts and Practices of Macro economy and Public Finances' for middle and senior level offi-cials in the public finance sector.

The five-day workshop, which kicked off yesterday will conclude on December 14. The course is conducted in English language. Translation into Ara-bic will be provided. The workshop is QIPF’s 3rd for the 2nd consecutive year, as part of a series of promised work-shops and seminars aimed at elevating the public finance standards in the Middle East and North Africa (Mena) region.

The workshop will provide participants with a general knowledge base for macroeco-nomic and fiscal general concepts; objectives and mechanics of macroeconomic

and fiscal modelling and fore-casting, analysis and surveillance, and policy-mak-ing; and how fiscal policy can be used as an instrument to achieve macroeconomic stabil-ity and growth.

Dr Abdulaziz Al Horr, CEO of QFBA, said: “QFBA is proud to be a part of this important workshop, which aims to intro-duce macro economy and public finance concepts and practices to the public sector’s mid and senior level officials."

"The workshop’s objective is perfectly aligned with the Academy’s mission to empower professionals, along with the institutions and bodies operat-ing in the State of Qatar and the region, to stay on top of changes within the business and finance sector, as well as promote inno-vation and create new opportunities that contribute to the realisation of the QNV 2030. All preparations have been made, in collaboration with the MoF, QIPF and the OECD to it is a success,” he added.

Qatar's Ambassador to Bangladesh, Ahmed Mohamed Al Dehaimi (second left) cutting the ribbon to mark the official inauguration of the Doha Bank's representative office in Dhaka.

QICDRC receives delegation from UAE's DIFC courts

The Peninsula

The Qatar International Court and Dispute Reso-lution Centre (QICDRC)

welcomed a delegation from the Dubai International Financial Centre (DIFC) Courts compris-ing Judge Ali Al Medhani and Ahmed Al Kamali, Head of Inter-national Relations.

The delegation was greeted by the QICDRC’s Judge Hassan Al Sayed and Enforcement Judge Rashid Al Badr. They discussed matters relating to the judicial systems in the Qatar Financial

Centre (“QFC”) and DIFC, including the challenges faced by international judicial institu-tions and how to overcome them. In addition, whilst tour-ing the QICDRC’s Alternative Dispute Resolution facilities, the delegation discussed matters pertaining to arbitration and mediation.

The Registrar of the Court, Christopher Grout escorted the delegation to the courtroom where he delivered a short pres-entation. Emphasis was placed on the QICDRC’s high calibre judiciary, its efficient case

management and enforcement processes and its ability to oper-ate virtually. The visit was part of the ongoing relationship between the QICDRC and DIFC Courts which involves exchang-ing knowledge and experience on matters relating to case administration, especially in the context of resolving interna-tional commercial disputes. The legal framework of the QFC and the availability of recourse to the QICDRC has helped to establish Qatar as an international hub for business, thus assisting in diver-sifying the nation’s economy.

Judge Dr Hassan Al Sayed (second right) and the visiting UAE delegation with QICDRC judges and officials in Doha recently.

Dollar stalls near weekly high due to robust Treasury yieldNew York Bloomberg

The dollar is trading near its best level of the week as a rise in dollar-yen to

a 10-month high is under-pinned by still-robust US Treasury yields and a stock market that refuses to say “enough.”

The dollar resumed a weekly rally mid-morning Fri-day, gaining a slight impetus after the University of Michi-gan consumer confidence index rose to 98.0, an almost 2-year high, beating estimates for a more modest gain to 94.5.

The dollar had already gained in the session but appeared to be flagging a lit-tle ahead of the sentiment data.

The 10-year Treasury yield rose to 2.4766 percent in early afternoon trading, providing sufficient boost to lift the dol-lar to its best level of the session before a slight fade.

For the week, the dollar is up 0.5 percent as measured by the Bloomberg dollar index, approaching Monday’s high at 1,254.70.

EUR/USD traded to a fresh low near 1.0530 in afternoon trading, approaching the December-5 low at 1.0506,

which was the lowest since March 2015.

FX flows were muted in the drop and appetite to buy USD near its recent highs is subdued, a trader in London said EUR held a defensive tone at the start of the day after the ECB declined to grant beleaguered Italian lender Banca Monte dei Paschi di Siena additional EUR was also weighed early in the session by sales of EUR/GBP, though selling let up as the day moved along.

The UK currency gained after consumer inflation expec-tations rose to the highest since 2014. Bids to buy the EUR under 1.0550 have slowed the single currency’s drop; that interest is said to extend to, and strengthen toward 1.0500, where ~EU6.2b of option strikes roll-off in the coming week. USD/JPY rose more than 1 percent to its high-est since Feb. 10 before stalling ahead of offers at 115.40.

Economic growth

Bangladesh economy is expected to grow by 7.2% in the current 2016-17 financial year against previous year.

Bangladesh's annual inflation picked up in September, driven by higher food prices, to 5.53%.

Dollar up

0.5%For the week, the dollar is up 0.5% as measured by the Bloomberg dollar index, approaching Monday’s high at 1,254.70.

Wealth fund gaint cautions against riskINVESTMENT risks related to political upheaval and cli-mate change are on the rise, Girds, the world’s biggest sov-ereign wealth fund, warned.

“If you look at the physi-cal risk issues, the stress is going to increase around the world, on the fiscal side as well,” Dag Huse, chief risk officer of Norway’s $870bn wealth fund, said in an inter-view in Oslo on Friday. “Coupled with political uncertainties, that’s of course an important issue. In isola-tion, all geopolitical developments are high on our agenda in general. It’s some-thing we discuss from day to day.”

Huse declined to single out any particular political event in 2016, the year elec-toral results shocked observers with the UK’s deci-sion to exit the European Union and US voters choos-ing Donald Trump for president. Geopolitical risk has been especially high on the fund’s radar starting with the financial crisis in 2008 and 2009, he said.

23SUNDAY 11 DECEMBER 2016 BUSINESS

The Peninsula

The global economy is set to see a significant shift in 2017 as it moves from ever eas-ier monetary policy to

fiscal stimulus and as the oil price recovery becomes entrenched. This could lead to an about-turn in the global economy, starting in Advanced Economics (AEs) with higher growth and inflation. As such, 2017 could be the year when the new normal turns old, QNB noted in its regular ‘economic commentary’ yesterday.

According to QNB analysts, the year 2016 was dominated by an environment of multi-year lows in oil prices and global bond yields as well as political surprises. Much of this is set to change in 2017, where they see five key themes emerging.

First, QNB expects a shift in policy focus from monetary to fiscal in AEs. Second, the bank expects expansionary fiscal pol-icy in the US to push the Fed to tighten monetary policy at a faster pace, raising US yields.

Third, higher US interest rates are expected to increase the risk of capital flight from EMs. Fourth, t a recovery in glo-bal oil prices as the market rebalances with Opec produc-tion cuts and strong demand growth.

And finally, QNB expects heightened political risk with the rise of populism and impor-tant elections in Europe. These themes predominantly offer positive growth dynamics for advanced economies , but could act as a drag on growth for emerging markets (EMs).

In the US, Trump has prom-ised tax cuts and infrastructure and defence spending. Else-where, monetary policy has reached its limits with interest rates as low as they can go and quantitative easing losing

efficacy. For instance, the ECB’s deposit rate is at -0.4 percent and it is running out of assets to buy due to restrictions on its quantitative easing programme. Years of fiscal austerity and fall-ing interest rates have helped create fiscal space and a number of major economies are now planning a stimulus for 2017.

In Europe, draft budgets submitted to the EU point to stimulus and spending tends to rise in election years. Both Japan and the UK have announced increased infrastructure spend-ing. The fiscal stimulus in advanced economies should help raise growth to 1.7 percent in 2017 from 1.6 percent in 2016.

In the US, fiscal stimulus is expected to raise growth and inflation, implying faster rate hikes by the Fed. This leads to QNB’s second theme of rising US yields. The US Treasury 10-year yield has risen around 50bps since Trump’s election on the expectation of a large fiscal stimulus. If Trump’s tax cuts and infrastructure spending are implemented, US interest rates are likely to continue to rise.

Higher US interest rates are

likely to encourage capital flight from EMs. Following the elec-tion of Trump, EMs experienced their worst month of capital out-flows in 2016 with an estimated net outflow of $24bn in portfo-lio flows in November. Additionally, Trump touted a number of protectionist policies on the campaign trail, which, if implemented, would also be negative for EMs. As a result, 2017 could be a tough year for EMs with growth expected to slow to 4.0 percent from 4.2 per-cent in 2016.

On the global recovery in oil prices, QNB expects oil prices to average in the range of $55-60/b next year, depending on the extent to which the recent Opec agreement is implemented. The agreement committed to 1.2m b/d of cuts within Opec and 0.6m b/d from non-Opec.

Overall, EMs should benefit from the recovery in oil prices, while higher oil prices should act as a drag on growth in the US and euro area, which are net oil importers. However, higher oil prices are unlikely to offset the more powerful growth driv-ers mentioned above.

Finally, politics in 2017 will be in the spotlight. Populism was on the rise in 2016 with nation-alist, anti-immigration and anti-globalisation sentiment voiced loudly through Brexit, the election of Trump and the recent Italian ‘no’ vote on constitutional change.

In 2017, ongoing Brexit negotiations and elections in France, Germany, Netherlands and potentially Italy all pose downside risks. Election vic-tories by populist candidates could increase isolationism and protectionism, calling into doubt the very existence of the EU and the Eurozone. This would increase uncertainty, financial market volatility and could negatively impact growth.

QNB: Global economy to see major shift in 2017

Turing around

The current scenario could lead to an about-turn in the global economy, starting in Advanced Economics (AEs) with higher growth and inflation. As such, 2017 could be the year when the new normal turns old.

The year 2016 was dominated by an environment of multi-year lows in oil prices and global bond yields as well as political surprises.

Vienna Reuters

Opec and non-Opec pro-ducers yesterday reached their first deal

since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices that overstretched many budgets and spurred unrest in some countries.

With the deal finally signed after almost a year of arguing within the Organisation of the Petroleum Exporting Countries and mistrust in the willingness of non-Opec Russia to play ball, the market’s focus will now switch to compliance with the agreement.

“This is a very historic meet-ing ... This will boost the global economy and will help some OECD countries to reach their inflation targets,” Opec Secre-tary-General Mohammed Barkindo told reporters ahead of the talks, referring to the Organisation for Economic

Cooperation and Development, which groups most of the world’s richest economies.

Last week, Opec agreed to slash output by 1.2 million bar-rels per day from Jan. 1, with top exporter Saudi Arabia cutting as much as 486,000 bpd.

Yesterday, producers from outside the 13-country group agreed to reduce output by 562,000 bpd, slightly short of the initial target of 600,000 bpd, according to two Opec sources. “They are all enjoying higher prices and compliance tends to be good in the early stages. But then as prices con-tinue to rise, compliance will erode,” said veteran Opec watcher and founder of Pira Energy consultancy Gary Ross.

“Non-Opec has also made the largest contribution we have ever seen,” said Ross, adding that he believed Russia would curtail output in line with its pledge of 300,000 bpd.

He added Opec would tar-get an oil price of $60 per barrel

as anything above that could encourage rival production. Oil prices have more than halved in the past two years after Saudi Arabia raised output steeply in an attempt to drive higher-cost producers such as US shale firms out of the market.

The plunge in oil to below $50 per barrel - and sometimes even below $30 - from as high as $115 in mid-2014 has helped reduce growth in US shale out-put. Apart from Russia, the talks yesterday were attended by or had comments or commitments sent from non-Opec members Azerbaijan, Bahrain, Bolivia, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan and South Sudan.

Many non-Opec countries such as Mexico and Azerbaijan face a natural drop in oil pro-duction and some analysts expressed doubts those declines should be counted as cuts. Industry sources said Oman and Kazakhstan had yet to inform about possible output cuts.

The Peninsula

Commercial Bank, Qatar’s first private bank, has sponsored a book cele-

brating the achievements of State of Qatar and Qatar National Day. Titled “Qatar National Record / We all for Qatar”, Commercial Bank par-ticipated at the book’s launch as honourable sponsor at an event attended by Qatari dig-nitaries and officials.

Mr Joseph Abraham, Com-mercial Bank CEO said: “As Qatar’s first private bank with a history stretching back over forty years, Commercial Bank’s success has mirrored the extraordinary success story of Qatar. We are proud to spon-sor this book that recognises the enormous progress made by the

State and the Bank’s individual contribution to both Qatar’s economic diversity and the development of the Qatari com-munity through our CSR programmes.” Organised by United Media Centre, the book is designed to express feelings of loyalty and gratitude to the State of Qatar on the occasion of Qatar National Day.

The first section details the history of the prosperous achievements of the modern State of Qatar led by the efforts and wise leadership of Emir H H Sheikh Tamim bin Hamad Al Thani. The book also provides a comprehensive synopsis of cultural and economic devel-opments that have raised Qatar’s profile. The book ends with a section on the Qatar National Vision 2030.

Commercial Bank sponsors'Qatar National Record'

Officials of the Commercial Bank receiving the honour.

Satish Kanady The Peninsula

With the planned launch of a high-tech exchange, new finan-

cial court and introduction of English Common Law, Kaza-khstan is gearing up for major reforms in its financial sector. Establishment of Astana Inter-national Financial Centre (AIFC) is part of the structural reforms of the Republic of Kazakhstan designed to diversify the coun-try’s economy mainly through development of new types of financial services, Kairat Nema-tovich Kelimbetov (pictured), Governor of Astana Interna-tional Financial Centre told The Peninsula.

“At the moment we are in a process of selecting a reliable and highly advanced strategic partner from among global exchanges. As for creation of an independent financial court with qualified judges with prac-tical experience in countries with the jurisdiction of English law, it is essential for success-ful operation of AIFC. Independent AIFC jurisdiction based on English law, will affect the civil, commercial, corporate law, the regulation of labour relations, securities market, trust management.”

The AIFC Courts is expected to start its operation in the beginning of 2018. In order to attract foreign participants to AIFC, visa-free regime for up to 30 days for citizens of mem-ber countries of the Organization for Economic Cooperation and Development

(OECD), the United Arab Emir-ates, Malaysia, the Principality of Monaco and the Republic of Singapore will be introduced.A special visa regime for a term of up to 5 yearswill apply for the staff of the Centre, partici-pants of the Centre and their families, he said.

Development of Kaza-khstan’s capital market is a primary strategic goal of AIFC and its achievement is crucial for successful implementation of AIFC project. A liquid capital market will attract additional foreign investment and accel-erate growth of domestic economy.

To increase liquidity of the local capital market AIFC Exchange will become a plat-form for attracting investments into Kazakhstan's economy through conducting IPO’s of "national champions" and through privatization of state-owned enterprises (SOEs) in the frame of the Comprehensive privatization plan for 2016-2020.

As the Government announced a new wave of pri-vatizations that should take place in AIFC in 2018-2020, the market infrastructure should be fully operational in time for the IPOs, the companies that are going to be privatized need enough lead time to prepare for the IPO, to run the pre-IPO campaign and therefore they need to know which listing rules they will need to adhere. The first trades in equities are planned to be lunched on AIFC Exchange in September 2017.

AIFC will play an important role in implementation of the privatization program through establishing the financial mar-ket infrastructure, developing regulations, attracting foreign investors, providing transpar-ency and information disclosure, establishing

necessary mechanisms to ensure secondary market liquidity and many other.

On the potential partnership with Qatar, Nematovich, who is also the former Deputy Prime Minister of Kazakhstan and former chairman of the National Bank of Kazakhstan said: “Kazakhstan and Qatar are similar by their economics. We are the biggest oil producer in the region and among the top 20 oil producers with an out-put of 1.6 million barrels per day, which will double in the next 10 years to three million bpd. That will rank us among the top seven oil producers in the region. Qatar is the richest country for natural gas resourses and it is the biggest expoter of oil and gas products.”

“One of the key pillars in our new financial centre is Islamic finance. We are plan-ning to develop Islamic banking and Islamic finance, insurance and takaful. The new regula-tion framework will allow us to bring local players and foreign investors together.” AIFC and Qatar Financial Centre Regu-latory Authority have signed a Memorandum of Understand-ing on August 2016. The purpose of MoU is to establish a formal basis for cooperation between the Parties to exchange information and expertise in connection with financial sector and financial centre development; financial services regulation and super-vision. I believe our countries have more common speres where we can cooperate.

A flag with the Organization of the Petroleum Exporting Countries (Opec) logo is seen before a news conference at Opec's headquarters in Vienna, Austria, yesterday.

Opec & non-Opec agree first oil pact since 2001

Kazakhstan set for major market reforms Establishment of Astana International Financial Centre is part of the structural reforms designed to diversify the country’s economy mainly through development of new types of financial services.

Kairat NematovichKelimbetov, Governor of Astana International Financial Centre.

24 SUNDAY 11 DECEMBER 2016BUSINESS

25SUNDAY 11 DECEMBER 2016 BUSINESS

Custom motorcycles are displayed on the floor at the Progressive International Motorcycle Show at the Javits Centre in New York City on Friday.

Motorcycle show

Washington Reuters

The US government is slated to sell $375m worth of crude oil from the country’s emergency reserve

this winter after Congress passed a temporary spending bill on Fri-day that contained a measure authorising the sale.

President Barack Obama’s administration has pushed Con-gress to approve an up to $2bn plan for a revamp of the Strate-gic Petroleum Reserve, a string of heavily guarded underground salt caverns along the Gulf of Mexico filled with crude. The stash currently holds about 695 million barrels of oil.

A Department of Energy spokeswoman said authorisation in the spending bill “will allow the Department to take neces-sary steps to increase the integrity and extend the life” of the reserve.

Congress passed the original funding for the reserve after the 1973 to 1974 Arab oil embargo to protect the country from global supply disruptions that have the potential to spike domestic fuel prices and damage the US econ-omy. Many of the reserve’s steel tanks and pumps are now rust-ing after decades of being

whipped by storms and exposed to salt air. A plan submitted to Congress by the Energy Depart-ment in September said “this equipment today is near, at, or beyond the end of its design life.”

In addition, the US oil boom of the last decade has reversed the direction of many pipelines away from the reserve, making it more difficult to get oil to mar-ket in a hurry.

The $375m sale, or nearly 7.3 million barrels of oil in today’s price, is just the first planned installment. For each of the next three fiscal years Congress would have to approve the annual sales to reach the up to $2bn revamp plan. It remains to be seen whether President-elect Donald Trump would urge Congress for the annual authorisations in the coming years.

This sale, which could take place seven to nine weeks after the temporary spending bill is enacted, would pay for the design of the revamp of the SPR and other pre-construction costs.

Paris AFP

IMF Chief Christine Lagarde (pictured) goes on trial in France tomorrow over a

massive state payout to a flam-boyant tycoon when she was finance minister in a case that risks tarnishing her stellar career.

Lagarde denies the charges of negligence, arguing she was acting "in the state's interest" in making the payment to Bernard Tapie, the former owner of sportswear giant Adidas and Olympique Marseille football club.

If found guilty, Lagarde could receive a one-year prison sentence and a ¤15,000 ($15,900) fine. Whatever the outcome, the case risks dam-aging the image of 60-year-old Lagarde, a former corporate lawyer who progressed through the finance ministry to her cur-rent role as one of the world's most powerful women.

The case also threatens the credibility of the IMF, whose last three managing directors have faced trial. Lagarde, who was named to a second term in February this year, has received the full backing of the IMF over the case. She will be tried by the Court of Justice of the Repub-lic, a tribunal that hears cases against ministers accused of wrongdoing in the discharge of their duties.

The accusations stem from Lagarde's handling of a dispute with Tapie, a former govern-ment minister who claimed a state bank defrauded him in its sale of Adidas. Tapie owned the firm between 1990 and 1993 but lost control of it after he went bankrupt. He also owned

Marseille when they won the 1993 European Cup, the fore-runner of the Champions League, but they were later embroiled in a match-fixing scandal. On becoming finance minister in 2007 under the newly elected president Nico-las Sarkozy, Lagarde ordered that Tapie's long-running bat-tle with the state be resolved by arbitration. The decision was hugely costly, with Tapie ini-tially walking away with a staggering ¤404m ($427m) in compensation in 2008.

Investigators suspect the arbitration process was rigged in favour of Tapie, who had supported Sarkozy in his 2007 election campaign. Lagarde, who served as finance minis-ter until 2011, has always insisted she acted in France's best interests. Although she is not accused of personally prof-iting from the payment, she has been criticised for failing to challenge the award. The pros-ecution says that through her actions, Lagarde "deprived the state of a chance to avoid this money being misused".

Others face fraud charges over the affair, including 73-year-old Tapie, his lawyer, one of the arbitrators, Lagar-de's former chief of staff in the finance ministry and the cur-rent head of the telecom group Orange, Stephane Richard.

US plans $375m sale of emergency reserve oilSPR Revamp

Authorisation in the spending bill “will allow the Department to take necessary steps to increase the integrity and extend the life” of the reserve.

The administration has pushed Congress to approve an up to $2bn plan for a revamp of the Strategic Petroleum Reserve.

Baton Rouge AFP

President-elect Donald Trump (pictured) said yesterday he wants to see

more oil refineries built in the United States, and pledged to do away with "job-killing restrictions" suppressing the energy sector.

He also delivered a veiled warning to America's rivals around the world, stating he would be prepared to boost US military production to keep pace with countries like China, which is rapidly modernising its armed forces. Trump was speaking in the Gulf Coast state of Louisiana, one of the nation's main oil and gas hubs, as he continued a drawn out "thank you" tour following his shock

victory last month over Dem-ocrat Hillary Clinton.

The billionaire real estate magnate said that once he takes office in January his administration will "eliminate every single wasteful regula-tion that undermines the ability of our workers and our com-panies to compete."

"We will cancel the job-killing restrictions on the production of American energy

including shale, oil, natural gas and clean coal," he said to a loud cheer from supporters.

"We haven't had refineries built in decades, right? We're going to have refineries built, OK, folks?" he assured the crowd, noting the importance of the energy industry in Lou-isiana. The US refining system is already the largest in the world, with some 139 refiner-ies in operation, according to Davis Refinery. Most petroleum refining operations are along the US Gulf Coast.

Trump has often spoken of China as an economic and trade rival, but on Friday he suggested the United States would need to "build the strongest military that we've ever had" in order to maintain its edge.

Trump favours building refineries

New York Reuters

The euro dropped on Fri-day for a second consecutive day in a con-

tinued reaction to the European Central Bank’s extending its bond-buying programme longer than many had anticipated, even as the bank cut the size of the monthly purchases.

The ECB said on Thursday it would reduce its monthly asset buys to ¤60bn starting in April from ¤80bn currently and extend purchases to December 2017 from March 2017. It reserved the right to increase the size of purchases again.

Underlying its promise for extensive stimulus, the ECB

predicted inflation at 1.7 percent in 2019, arguing that more-costly energy could boost consumer prices even without lifting the underlying trend.

“The extension of the pro-gram was longer than most had expected, and a lot of the lan-guage ... was pretty dovish,” said Erik Nelson, a currency analyst at Wells Fargo in New York. “Inflation forecasts were pretty subdued all the way out to 2019 and growth forecasts were pretty low, and the risks are tilted to the downside.”

The euro dropped to $1.0528, its lowest level since Monday, and was last down 0.69 percent at $1.0541. The US Fed-eral Reserve is widely expected to raise interest rates for the first

time this year when it meets next week, but it may take a cautious tone on the economy.

Traders will focus on the Fed’s economic projections, known colloquially as the dot plot, for indications of any change in expectations follow-ing Donald Trump’s surprise election as US president on November 8. Trump’s victory increased market expectations of greater fiscal stimulus that could boost economic growth and inflation.

“In the last three or four meetings, we’ve seen a contin-ual marking down in the dot plot,” Nelson said, “so even if you see the officials maintain the current forecast, it could be viewed as mildly hawkish.”

Euro drops on ECB moveTrial of IMF Chief in France tomorrow

New York AFP

Wall Street stocks surged to fresh records yet again on

Friday, with all three major indices jumping to new highs for the second straight session.

Optimism about a new era of economic growth ushered in by the US elections "has unleashed a rush of animal spir-its that hasn't been seen in some time," said Briefing.com analyst

Patrick O'Hare. Gains in US markets were biggest in the Dow, which jumped 0.7 percent to 19,756.85, closing in on the 20,000 threshold and adding another to a string of record closes. Tokyo also enjoyed big gains, climbing 1.2 percent to finish at another fresh high for 2016.

Paris, London and Frank-furt scored moderate gains, while Milan tumbled due to bad news for the world's oldest bank, Monte dei Paschi. Milan ended 0.7 percent lower,

dragged down by Monte dei Paschi di Siena (BMPS), whose stock tumbled over 10 percent after reports the European Cen-tral Bank had denied it more time to raise the cash it needs to avoid being wound down.

BMPS on Wednesday asked the ECB for two more weeks to find the funds, saying political instability created by Prime Minister Matteo Renzi's resig-nation had left investors reluctant to commit funds.

But the ECB's supervisory board was reported to have said

"no" Friday, upping pressure on the Italian government to bail out the ailing institution.

The news out of out Italy "added to the euro's broadly heavier tone" after the Euro-pean Central Bank on Thursday announced it was extending its bond-buying program, said Omer Esiner, analyst at Com-monwealth Foreign Exchange.

London saw a late flurry of activity after European pay-TV broadcaster Sky said it had received an informal takeover a p p r o a c h f r o m U S

media-entertainment giant 21st Century Fox. Sky shares closed 26.7 percent higher at 10 pounds, which compares with a 10.75 pounds price tag per share in the offer. Fox, which said key items are still under discussion and there is no guar-antee the transaction will be finalized, lost 2.0 percent. Coca-Cola jumped 2.5 percent as it announced that Muhtar Kent will step down as chief executive in May to be replaced by president and chief operat-ing officer James Quincey.

Economic growth optimism buoys key indexes on Wall Street

Beijing AFP

China announced yes-terday that it was suspending coal

imports from North Korea for three weeks, in line with the latest United Nations sanc-tions against the hermit state.

"After the adoption of UN Security Council resolution 2321... China is suspending North Korean coal imports," the government said in a statement.

The three-week suspen-sion starts today and ends on December 31, according to the statement issued by the officials concerned.

The Security Council passed the resolution on the international sanctions against Pyongyang on November 30 in the wake of the North's September 9 nuclear test.

It limits North Korea's coal exports next year to 7.5m tonnes or just over $400m, down 62 percent on 2015.

The cap represents a fraction of the North's cur-rent annual exports to China, the isolated country's sole ally and its main provider of trade and aid, as per the available information.

China imported 1.8m tonnes of coal worth $101m from North Korea in October alone, according to the most recent figures available on the Chinese Customs web-site. The volume was up nearly 40 percent year-on-year.

Under previous sanc-tions, the Security Council authorised the purchase of coal from North Korea pro-vided revenues were not used to finance Pyongyang's nuclear programme.

However, the UN did not specify any assessment cri-teria, which allowed Beijing to increase its imports con-siderably while saying it was acting in good faith.

Between March and October, 24.8 million tonnes of coal was imported, three times the annual limit now allowed by the UN.

Although Beijing has tra-dit ional ly protected Pyongyang diplomatically, believing that Kim Jong-Un's regime is preferable to its collapse, it has grown frus-trated by its neighbour's defiance.

China halts North Korean coal imports

26 SUNDAY 11 DECEMBER 2016 BUSINESS VIEWS

It looks like Gary Cohn will be leaving Goldman Sachs Group Inc., where he is president and chief operating officer, to become director of Donald Trump's National Economic Council. This is not a unique career trajectory!

The first director of the NEC, which President Bill Clinton created in 1993 to coordinate economic policy among the sometimes-warring government agencies responsible for it, was Robert Rubin, the former co-chairman and co-senior partner of Goldman (which didn't believe in titles like "president" or "chief execu-tive" back in those pre-initial-public-offering days). Then, in 2002, the other half of Rubin's Goldman-run-ning duo, Stephen Friedman, became director of George W. Bush's NEC. If Cohn in fact takes the job, there will have been as many former top Goldman executives in charge of the NEC as Ph.D. economists.

The continuing prominence of Goldman Sachs alumni in Washington is a remarkable thing. In the throes of the financial crisis it seemed hard to imagine that the old Goldman-to-Washington pipeline could continue to operate. But while President Barack Obama clearly leaned more toward Google than Goldman, he still appointed a Goldman alumnus, Gary Gensler, as

head of the Commodity Futures Trading Commission. With Cohn at the NEC and former Goldman partner Steve Mnuchin as Treasury secretary, Trump will have

former Goldman-ites in what for the past quarter cen-tury have usually been the two most important eco-nomic policy jobs in an administration.

So Govern-ment Sachs is back! Or maybe it never went away. This is testament to the interest in policy and public service that the firm seems to con-

tinue to inculcate in its partners. But it's also kind of creepy -- and profoundly at odds with the populist message of Trump's campaign.

As for the Ph.D. economists, who in the 1990s and 2000s were taking over more and more top policy roles in Washington and around the world, it seems clear that the Trump era is going to be a time of much-reduced influence -- as will likely be true for policy wonks in all fields. I have mixed feelings about this. Back near the apex of academic economists' influence and clout, in 1999, I talked to then Treasury Secretary Lawrence Summers about why econ-doctorate-holders such as he had become so powerful:

Ultimately there's no alternative to judgment -- you can never get the answers out of some model. But the reason there are many, many more good economists in positions of influence in the world is that one can understand the issues more sharply and clearly, and can pose the tradeoffs and can make more accurate judgments within a clear analytic framework.

That "clear analytic framework" was probably too narrow, though. The economists in power largely ignored risks to the financial system.

The Italian government is close to finalizing a state-backed rescue for lender Banca Monte dei Paschi di Siena SpA, a solution that’s likely to

impose losses on its shareholders and bondholders.

Monte Paschi bondholders will be affected by the state measure, a govern-ment official said on condition of not being identified because the decree law for the rescue hasn’t been submitted to the cabinet. The European Central Bank decided not to extend the deadline for Monte Paschi’s $5.4bn capital increase plan past December 31, a person famil-iar with the matter said on Friday.

This comes “at the worst possible time from a political point of view, since the Italian authorities are trying to form a new government,” Keefe Bruyette & Woods Inc. said in a note to investors.

Monte Paschi’s board had asked the ECB to extend the deadline from the end of the year to Jan. 20 “due to the changed reference context,” according to a statement on Wednesday. A delay would have allowed the bank more time to find investors as Italian leaders put a new government in place after Prime Minister Matteo Renzi submitted his resignation.

The rejection turns the focus to Ita-ly’s now-unstable government and the question of what sort of state aid may be offered. Monte Paschi Chief Execu-tive Officer Marco Morelli and Chairman Alessandro Falciai held the talks at the Italian Treasury in Rome on Friday, said a government official who asked not to be identified because talks are confidential. Italy’s cabinet will

probably meet over the weekend to pass the decree law, newspaper Repub-blica reported on its web site on Friday without saying where it got the information.

The ECB told Monte Paschi to pre-pare a plan to improve its capital by the end of this year after the bank emerged as the most vulnerable lender in a Euro-pean stress test in July. Morelli put together a three-part blueprint to swap debt for equity, raise capital through a share sale and dispose of €28bn of soured loans. While bondholders have agreed to exchange more than 1 billion euros of subordinated notes for shares, the exchange won’t take place if the rest of the capital plan doesn’t proceed.

The lender’s shares dropped as much as 17 percent, dragging down other lenders including UniCredit SpA and Intesa Sanpaolo SpA, which were among the worst performers on the benchmark FTSE MIB index. Monte Paschi’s 369 million euros of junior notes due April 2020 fell more than nine cents on the euro to 51 cents, a record low, according to data compiled by Bloomberg.

The cost of insuring Banca Monte dei Paschi SpA’s senior bonds against default for five years jumped as much as 45 basis points to 501 basis points, the highest since July, according to data compiled by CMA. The contracts cost 476 basis points at 3:10 p.m. in London.

“Subordinated debt will be con-verted,” said Anne-Sophie Chouillou, a fund manager at Anthilia Capital Part-ners in Italy, which owns the bank’s senior bonds. “I find it difficult to see an alternative. The time left is very short.”

A person familiar with the decision said supervisors were wary that market conditions may deteriorate, instead of improving in the meantime. Another person said the regulator was con-cerned that the bank’s liquidity

situation would worsen if it waited to raise capital.

One official said it was the Single Supervisory Mechanism and not the Governing Council of the ECB that made the decision. The ECB’s Supervisory Board prepares draft decisions, which are adopted by the Governing Council under a non-objection procedure. That means if the Governing Council doesn’t object in a defined period of time, usu-ally five days, the decision is adopted. A spokeswoman for the ECB declined to comment. A spokesman for Monte Pas-chi said the bank hasn’t received any communication from the ECB. Reuters reported the decision earlier Friday.

The failure of the recapitalization would be a blow to Italy’s sputtering efforts to revive a banking industry that’s burdened with about 360 billion euros in troubled loans, dragging down the economy by limiting lending. Five of the six worst-performing stocks this year on Italy’s benchmark FTSE MIB Index are banks.

Under European banking rules put in place in January, governments can only bail out lenders with taxpayer money if they also impose losses on stakeholders. That includes holders of senior bonds, a class of security that was largely unscathed during the finan-cial crisis, which may be converted into equity if a bank’s core capital levels fall.

A state rescue may not take the form of a full-fledged bail-in that would hurt the bank’s many small-scale bond-holders the most. Last week Monte Paschi Chief Financial Officer Franc-esco Mele told investors that “precautionary” state aid was a proba-ble Plan B should private investors balk. Even though that would avoid a full wind-down of the bank by European regulators, it would still force losses on creditors under so called burden-sharing.

Jennifer Kaplan Bloomberg

Coca-Cola Co.’s incoming CEO has his work cut out for him to bring the 130-year-old company into a millennial-domi-

nated era.James Quincey, who takes over

as chief executive officer next year, is under pressure to dramatically cut the calories of Coca-Cola’s lineup — a move necessitated by shifting consumer tastes and anti-obesity efforts. And he can’t rely as much on the current crop of artifi-cial sweeteners to get the job done,

since many customers have turned away from aspartame and other additives.

The 51-year-old executive, who currently serves as Coca-Cola’s chief operating officer, also has pledged to modernise the compa-ny’s marketing and distribution at a time when more shoppers are researching and buying products online. And shares of the Atlanta-based company have lagged behind those of PepsiCo Inc. and the broader market this year.

“He will push toward healthy,” said Jack Russo, an analyst at Edward Jones. He’ll probably “get the core company focused on doing what it needs to do, and

that’s new products, inno-vation -- maybe better marketing.”

Consumers in the US and other developed mar-kets are eschewing sugar and artificial ingredients, forcing Coca-Cola to diver-sify its product offerings.

The company is relying less on soda and pushing into healthier segments, including ready-to-drink coffee, plant-based protein drinks, cold-press juices and dairy. As operating chief, Quincey also has promoted smaller package sizes for soft drinks -- an effort that has cut calories per purchase and improved profit margins.

The company already has 200 reformulations in the works that are aimed at reducing the sugar content of its existing products. Fanta and Sprite with 30 percent less sugar are on shelves in the UK, and a new version of Coca-Cola Zero Sugar has been introduced in several markets. As he settles into the CEO job, Quincey plans to accelerate efforts to develop new products.

“Smaller packages, less sugar, more variants, better marketing,” he said on a conference call Friday. “We’re going to adapt to the chang-ing customer landscape.”

Though current CEO Muhtar

Kent was seen as a diligent steward of the brand, Quincey looks at Coca-Cola’s problems through a more “realistic lens,” said Vivien Azer, an analyst at Cowen & Co.

He is “much more transparent about the challenges that Coke faces -- in terms of concerns around their products, in particular both sugar and aspartame,” she said.

The stakes are high: Per capita consumption of carbonated soft drinks fell to a 30-year low in the US in 2015, according to Beverage Digest, a trade publication.

Coca-Cola’s stock has declined 2.2 percent this year, compared with a 11 percent gain for the Standard & Poor’s 500 Index. Pep-siCo is up 3.7 percent in that time frame.

Calories are a bigger concern for consumers these days, but the beverage industry has been slow to slim down its drinks so far. The intake of calories from beverages dropped just 0.2 percent in 2015,

according to a report released last month by consulting firm Key-bridge LLC. To get back in consumers’ good graces, Coca-Cola is going to accelerate product development -- even beyond its blitz of new drinks in recent years.

“That pace in the next 10 years is just going to continue to increase,” Kent said on Friday.

Many of Coca-Cola’s billion-dollar brands are now waters and other still beverages -- as opposed to solely its hallmark sparkling drinks.The British-born Quincey has spent two decades at Coca-Cola, where he previously ran the company’s European group and Mexican division. He also led the 2009 acquisition of Innocent juice, a brand that’s now sold in more than 14 countries.

Coca-Cola’s makeover may involve more acquisitions of upstart brands, Quincey said.Already, the company has made investments in juice company Suja Life LLC.

Economists are out; Goldman back in for Washington

Justin Fox Bloomberg

The continuing prominence of Goldman Sachs alumni in Washington is a remarkable thing. In the throes of the financial crisis it seemed hard to imagine that the old Goldman-to-Washington pipeline could continue to operate.

Italy close to finalising rescue for state-backed lender Monte Paschi

People gathering in front of Italy’s troubled Banca Monte dei Paschi di Siena

Sonia Sirletti, Alessandro Speciale and Lorenzo TotaroBloomberg

Consumers in the US and other developed markets are eschewing sugar and artificial ingredients, forcing Coca-Cola to diversify its product offerings.

Coca-Cola’s challenge under new CEO: Cutting calories