BUSINESSBUSINESSTuesday 31 October 2017

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Qatari economy adjusts to

blockade: IMF

QFC attracts key Asia Pacific firms in 2016

Dow & Brent before going to press

ASTAD set to develop theme park in QatarThe Peninsula

ASTAD, leading project development solu-t ion provider , announced yester-day that it has signed

a Memorandum of Understand-ing (MoU) with the global leader at the forefront of theme park p r o j e c t m a n a g e m e n t , Cumming.

Cumming has been using its steadfast commitment for over 20 years to support theme park owners and their development projects around the world. Their portfolio comprises the most successful projects in this spe-cialized sector worth tens of billions of dollars including the likes of Disney and Universal Studios.

On the occasion, ASTAD Chief Executive Officer, Ali Al Khalifa, said: “This MoU demon-strates our proactivity and advocacy for the growth and

urban development of Qatar. It will bring together ASTAD’s local expertise on Qatar’s complex mega projects, coupled with Cumming’s experience on some of the world’s most popular tour-ist attractions, preparing us and Qatar at an international stand-ard for outstanding project development in new territories including themed entertain-ment.” ASTAD’s keen interest and dedication towards the

management of world-class theme parks comes at a time when there is a growing market need for the development of tourism infrastructure in Qatar in line with the Qatar National Tourism Sector Strategy 2030 which aims to ensure that tour-ism plays its designated role in shaping Qatar’s economic and social future.

Finlay Cumming, Chief Exec-utive Officer of Cumming states: “Cumming is excited by our new association with ASTAD and look forward to jointly assisting in the delivery of World Class Enter-tainment destinations in Qatar”.

The agreement which was signed in New York on Thursday 26 October 2017 lays the foun-dation for the development of world-class themed entertain-ment projects in Qatar and promotes joint strategic objec-tives aimed at exploring markets and directing efforts towards viable projects.

This MoU is one of several ASTAD has signed in recent months to support their growing capabilities and international expansion.

ASTAD has managed and delivered some of Qatar’s most complex building and infrastruc-ture projects in various sectors including education, culture, healthcare, hospitality, sports, commercial, residential and transport, and its fully prepared in line with the national vision to build recreational areas and provide engineering consulting services in the field of entertain-ment, bringing together all the necessary components required to build communities.

Cumming is an international project and cost management firm with 26 offices in the USA and five international offices. Cumming provides solutions to ensure that projects in the fields of themed entertainment and hospitality including theme

parks, aqua parks and zoos. ASTAD provides fully inte-

grated project and asset management services, covering the design and construction of complex building and infrastruc-ture projects. With a global network of experts, ASTAD com-bines a wealth of knowledge and

technical expertise to deliver best-in-class services with col-laborative and sustainable outcomes. ASTAD partners with businesses, organisations and governments to deliver innova-tive, cost-effective and bespoke solutions throughout the lifecy-cle of their assets.

Tourism infra

ASTAD’s dedication towards the management of world-class theme parks comes at a time when there is a growing market need for the development of tourism infrastructure in Qatar.

Ali Al Khalifa, CEO of ASTAD (left) shakes hands with Finlay Cumming, CEO of Cumming after the signing ceremony.

QNB named ‘Rising Star’ at LinkedIn Talent AwardsThe Peninsula

QNB has been chosen for the unique title of the “Rising Star’’ at the LinkedIn’s

Qatar Talent Awards ceremony, held recently in Doha. The award was given due to the Bank’s consistent performance on branding and talent acquisi-tion activities, and innovative

initiatives on regional presence on LinkedIn. The award aimed at celebrating the success of companies in the talent acqui-sition and employer branding space. The ceremony witnessed the attendance of more than 50 executives from Qatar, and included an exchange of thoughts and experiments on the latest trends in the industry.

Yousef Ali Darwish (centre), General Manager-Group Communications, QNB, receiving the award at the event.

Ezdan records QR1.41bn net profitThe Peninsula

Ezdan Holding Group has announced its financial results for the period ended

30 September 2017. The peri-od’s net profit amounted to

QR1.41bn compared to QR1.29bn for the same period last year, an increase of 9.3 percent. The Group’s earnings per share increased to QR0.53 by the end of Q3 of 2017, compared to QR0.49 in Q3 of 2016.

GWC gets shareholders’ nod to amend AoAMohammad Shoeb The Peninsula

The shareholders’ of GWC yesterday gave their nod to all the items on the

agenda of the Extraordinary General Assembly (EAG) Meet-ing, including approval for the change in company’s Articles of Association (AoA).

The amendment of portions of its AoA and its by-laws were required to comply with the newly updated regulations stated in the Corporate Govern-ance Regulations issued by Qatar Financial Markets Author-ity (QFMA). The EGA meeting was chaired by GWC Chairman Sheikh Abdullah bin Fahad bin Jassem bin Jabor Al Thani, and was attended by representatives of the Ministry of Economy and Commerce, GWC’s external auditors KPMG, and the com-pany’s shareholders. “We gather here today following a year that

has proven the strong capabil-ities of the nation, and its ability to deal with any challenge it comes across,” said Sheikh Abdulla.

He added: “GWC is main-taining its position as the leading logistics provider in Qatar, and has proven itself a reliable part-ner to the nation, capable of handling all situations the nation faces.”

The proposed articles for amendment pertained to a number of key functions of the company, including the amend-ment of Article (32) of the AoA adding all the responsibilities of the Board of Directors in com-pliance with the requirements of Article (9) of the governance code; amending Articles (25), (28), and (30) of the AoA to com-ply with Article (35) of the governance code regarding the drawing of a secret ballot for board member and managing director elections; the

amendment of Article (26) of the AoA to comply with Article (5) of the governance code controlling the requirements to become a board member; the amendment of Article (45) of the company by-laws to comply with Article (32) of the governance code con-cerning the right of every shareholder to object to certain board decisions; the amendment of Article (56) of the company by-laws to comply with Article (37) of the governance code regarding the protection of minority shareholder rights; in addition to a number of minor corrections in Articles 5, 31, 47, and 49 of the company by-laws. These amendments were pre-sented to the shareholders during the meeting, where they signalled their approval of the intended amendments. GWC recently announced its financial results for the third quarter of 2017, achieving QR157.26m dur-ing this period.

Sheikh Abdulla bin Fahad bin Jassem bin Jabor Al Thani (right), Chairman of GWC, and Sheikh Fahad bin Hamad bin Jassem bin Jabor Al Thani (centre) Vice-Chairman of the company with an other board member at the Extraordinary General Assembly Meeting at Four Seasons Hotel, Doha, yesterday. Pic: Abdul Basit/The Peninsula

China’s big four banks post solid Q3 resultsBeijing

AFP

China’s big four state-owned banks yesterday reported profit growth

across the board in the third quarter (Q3), after President Xi Jinping emphasised the importance of the public sec-tor earlier this month.

Net income at the four banks—Industrial and Com-mercial Bank of China (ICBC), Bank of China (BOC), China Construction Bank (CCB), and Agricultural Bank of China—all grew in the low single digits for July-September year-on-year, according to filings with the Hong Kong Stock Exchange.

ICBC, the world’s largest bank by assets, reported a net profit of 75.0bn yuan ($11.3bn) for Q3, up 3.35 percent year-on-year.

The Bank of China’s quar-terly results were hurt by impairment charges and it reported the lowest net profit growth of the four, up just 0.10 percent year-on-year to 41.82bn yuan (6.29bn).

China Construction Bank’s net profit rose to 62.9bn yuan ($9.46bn) for the quarter, up 4.1 percent year-on-year.

The Agricultural Bank of China’s net profit rose to 51.42bn yuan ($7.74bn), up 4.89 percent.

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22 TUESDAY 31 OCTOBER 2017BUSINESS

Aamal’s net profit at QR379m; group revenue reaches QR1.25bnThe Peninsula

Aamal Company’s total net profit for the nine months ended September 30, 2017

stood at QR379m, down 11 per-cent compared to the same period in the previous year. Net profit attributable to equity hold-ers of the company is down by 1 percent year-on-year to QR352.9m. Gross profit was down by 16 to QR418.8m

The Gulf’s fastest growing diversified company’s group rev-enue was down 37 percent to QR1.25bn, primarily due to loss of control of two subsidiaries.

Aamal’s earnings per share stood at QR0.56 for the first nine months, compared to QR0.57 from a year ago. The total net profit is stated before the deduc-tion of non-controlling minority interests. Commenting on the financial results Sheikh Faisal bin

Qassim Al Thani, Chairman of Aamal said: “The same factors which led to a decline in reve-nues and profits for the first six months of 2017 have continued

to impact Aamal Company’s financial performance during the third quarter of the year.

Key among these are the loss of control of two subsidiaries in

our Industrial Manufacturing division which has affected the presentation of our financials and comparison with the first nine months of 2016, the ongo-ing redevelopment work at City Centre Doha, and several one-off contracts being awarded during the comparative period last year.”

An additional factor was the extended time needed to rear-range freight lines to ensure the supply of materials and products during the third quarter.

This was achieved as a result of the changes we made to ship-ping routes and supply chains which were implemented effec-tively. It is important to note that these factors should not impact Aamal Company’s financial results during the first half of 2018, Sheikh Faisal said. “We will continue to leverage our strong financial position and to pursue

our successful diversification strategy, building on Aamal Company’s leading positions across a number of different sec-tors and selectively expanding so as to create long-term share-holder value. As I mentioned at the time of our half year results, we are currently evaluating sev-eral exciting new business opportunities, particularly in our Industrial Manufacturing divi-sion, which will benefit all of our stakeholders and will be announced in due course,” he added.

Sheikh Mohamed bin Faisal Al Thani, Vice-Chairman and Managing Director of Aamal, commented: “Aamal Company continues to assess market requirements across the many sectors in which we operate, to expand and diversify our busi-ness, and to take the lead in capturing new opportunities.

Looking forward, creating new revenue streams either through organic growth or establishing new activities remains the core of our strategy. As an example, we would particularly highlight the expansion and redevelop-ment work at City Center Doha which is now in an advanced stage, and the expected positive effect it will generate through increased demand for space from tenants. City Center’s future profitability is expected to make up for the temporary fall in prof-its which we have inevitably seen during the redevelopment phase.”

The company remains well-placed to take advantage of suitable opportunities as they arise and the cash flow position is looking increasingly strong. “Our outlook for the remainder of 2017 and beyond remains pos-itive,” Sheikh Mohamed said.

Sheikh Faisal bin Qassim Al Thani, Chairman of Aamal (left) and Sheikh Mohamed bin Faisal Al Thani, Vice-Chairman and Managing Director of Aamal.

QFC attracts key Asia Pacific firms in 2016The Peninsula

Over 22 percent of the firms registered under the Qatar Financial Centre in 2016 were from the

Asia Pacific region. These include the Sumitomo Mitsui Banking Corporation, the Industrial and Commercial Bank of China, the Japanese Society in Doha, Hanwha Techwin and many more, revealed Qatar Financial Centre’s CEO, Yousuf Al Jaida (pictured).

He was addressing a number of Asian Ambassadors to Qatar during the “Asian Ambassadors Group Dinner” hosted by Seiichi Otsuka Ambassador for Japan to Qatar. The major presence of

Asian firms in QFC highlights the close ties between Qatar and its partners in Asia which QFC hopes to continue to strengthen in the years to come.

Al Jaida’s keynote address came as part of the QFC’s out-reach programme to increase awareness of the platform and the benefits it provides interna-tional businesses to expand to Qatar and beyond.

During his speech he high-lighted on the growing importance of relations between Qatar and its Asia allies and part-ners stating. He added: “There is no better time for companies to expand to Qatar, foreign compa-nies and firms have an

abundance of opportunities to service a market that has proven its resilience and resolve. Qatar will continue to grow and develop and I am sure Asian companies will play an impor-tant role in that growth.”

Seiichi Otsuka Ambassador for Japan in the State of Qatar stated: “We are honoured to be hosting Yousuf Al Jaida QFC’s CEO as our Guest of Honour and keynote speaker at the Asian Ambassadors’ Group Monthly Dinner. Over the past few dec-ades, Qatar has become one of Japan’s most important Middle Eastern partners. Driven by Japan’s demand for steady access to hydrocarbon resources from a reliable and stable partner and Qatar’s large-scale projects in

preparation for the World Cup in 2022, the energy and construc-tion sectors continue to dominate bilateral trade. However, in recent years Tokyo-Doha rela-tions have expanded in financial, security, educational, and diplo-matic spheres. The continued close ties between the two nations provide further oppor-tunities for joint business ventures.”

The QFC continues in its efforts to diversify the economy and position Doha as the region’s leading financial and commer-cial capital. Throughout the year the QFC has made valiant efforts to attract international firms to its platform. This includes a road-show that visited a host of major cities across Europe and Asia.

Branding Doha

The QFC continues in its efforts to diversify the economy & position Doha as the region’s leading financial & commercial capital.

Mannai reports QR294m pre-tax profits.The Peninsula

Mannai Corporation recorded a group revenue of QR4.4bn

for the third quarter of 2017, up 26 percent from a year ago. The gross profit increased by 24 percent to QR1.0bn. During the year the company continued with its strategy of diversifying geo-graphically by acquiring controlling interests in GFI Informatique a French pub-licly listed major IT company operating in France and 16 other countries in Europe, Africa and Latin America. The increase in the gross profit is mainly due to the acquisition of controlling interests in GFI Informatique.

With this acquisition the company now employs over 20,000 employees of 42 dif-ferent nationalities in 20 countries. The pre-tax prof-its showed a decline of 15 percent (QR294m) compared to the previous year, partly due to increase in finance cost incurred for funding the acquisition and the general market condition in the region.

However, the company is optimistic of improving the performance in the long term on the back of overseas investments made in the recent past and other oppor-tunities in Qatar as the country embarks on major infrastructure projects for hosting FIFA World Cup in 2022.

Doha Bank, Centrum Wealth Management ink dealThe Peninsula

Doha Bank, one of the larg-est private commercial banks in Qatar, has

entered into an agreement with Centrum Wealth Management Limited, to offer its customers wealth management services in India.

The exclusive partnership in Qatar and one of its kind in Kuwait will enable Doha Bank’s high net-worth customers to invest in various asset classes in the Indian markets under the specialist guidance of Centrum. All residents and non-resident Indians (NRIs), including persons of Indian origin (PIOs), with an account in Doha Bank in India

and a net worth of Rs10m will be offered with Centrum’s Wealth Management Services. Centrum is a leading integrated financial services group in India offering Investment Banking, Institutional

and Retail Equity Broking, Wealth Management, Asset Management – PMS, Forex and Travel, Debt Advisory and Fund Raising, Alter-native Assets and Structured Financing. “We are extremely pleased to announce our part-nership with Centrum Wealth Management. This is a first of its kind in Qatar and Kuwait and an exclusive partnership in Qatar. It is a new milestone for our cus-tomers as they can now diversify their investments and benefit from the rapidly growing Indian market. Furthermore, our Indian expatriate customers have the added advantage of continuing to live wherever they are while making right investment choices in their home country under the

guidance of the well-experienced Centrum professionals,” said Dr. R. Seetharaman (pictured) Group CEO, Doha Bank.

“Centrum has been continu-ously expanding its operations in India and is today a leading diversified financial services firm. The alliance with Doha Bank will enable us to offer our services to international corporate clients as well as NRIs based in the GCC countries. India offers excellent growth opportunities in wealth management & banking areas. Moreover, there exists a common synergy between both organiza-tions and we hope to benefit from each other’s expertise.” said Jas-pal Bindra, Executive Chairman of the Centrum Group.

Singapore aims to strengthen financial services sectorSingapore

AFP

Singapore yesterday announced a wide-ranging plan to boost its

financial services sector, saying it aimed to grow the industry by over four percent a year and create thousands of jobs.

The city-state is one of Asia’s key financial hubs and home to the regional head-quarters of many major banks and other key players in the sector.

It has long competed with Hong Kong for the title of the region’s leading finan-cial centre.

The Monetary Authority of Singapore (MAS), the cen-tral bank, unveiled a roadmap which set out strat-egies to grow the sector, saying it was urgent for the industry to keep pace with changes in technology.

The MAS plan envisages achieving real growth in the financial sector of 4.3 per-cent annually and aims to create 3,000 jobs in finan-cial services, and an additional 1,000 jobs in the financial technology sector annually.

The central bank pledged to step up efforts to encour-age financial institutions to improve their use of technol-ogy to increase efficiency.

The roadmap also laid out plans for Singapore to bolster its status as a leading foreign-exchange and wealth management hub.

Workers load freshly-harvested modules of cotton onto a truck for transport to the gin near Portageville, Missouri. Despite extensive damage to the nation’s cotton crop from Hurricane Harvey, the USDA expects cotton production to exceed last years levels by a significant amount.

Cotton production soars China cracks fraudulent provincial growth figuresBeijing

AFP

China’s National Bureau of Statistics will take control of regional GDP growth

data because exaggerated fig-ures from the provinces hamper economic policymaking, an official said in an interview published yesterday.

The national and provincial governments have long issued contradictory GDP statistics: the cumulative provincial output far exceeds the national output measured by the NBS.

The NBS’s deputy head Li Xiaochao said it would publish both regional and national GDP figures starting in 2019, accord-ing to the interview published on the bureau’s website.

“The gap between collected regional and national GDP data

is still not small,” Li said, not-ing the problem made it hard to determine regional trends and implement macroeconomic controls.

“It also affects the credibil-ity of government statistics,” he said.

Local bureaucrats’ promo-tions have long been tied to economic performance, giving them an incentive to falsify data in hopes of improving their chances of career advance-ment, officials admit.

As a result China has long struggled with inaccurate data. In recent years it has publicised a growing number of cases of falsified economic statistics.

In January the governor of the northeastern province of Liaoning made a rare admis-sion that his government had falsified data from 2011 to 2014.

23TUESDAY 31 OCTOBER 2017 BUSINESS

Belgium’s Walloon Vice-minister president and minister of Economy, Employment and Formation Pierre-Yves Jeholet (left) and Walloon Minister-President Willy Borsus (right) look on during a meeting between firearms manufacturer National Factory of Herstal union representatives and the Walloon government in Namur, yesterday. Personnel from the firearms manufacturer have been on strike since October 19.

Tata Steel swings to quarterly profit on volume & price gains Harare

Reuters

Tata Steel Ltd swung to a profit in the second quar-ter as the Indian mill

benefited from a recovery in global steel prices and an increase in volumes, although it missed analyst estimates.

The company reported a Rs9.76bn ($150m) profit for the three months ended Septem-ber, compared with a loss of 799 million rupees a year ear-lier, according to a statement from the steelmaker yesterday. That compares to an average forecast of Rs16.6bn from ana-lysts’ estimates compiled by Bloomberg. Revenue climbed about 20 percent from a year earlier.

In the past year, the Indian company has sold off some of its unprofitable assets in the UK as it sought to cut losses. Last month, it agreed to partner with Thyssenkrupp AG in Europe to fight a glut in supply. The pro-posed partnership allows the company to focus on the

growing Indian market, where Tata Steel plans to double pro-duction capacity to about 26 million metric tons in the next five years.

“We remain positive on the outlook of India as encourag-ing government reforms are expected to facilitate domestic investment and growth in the coming years,” Managing

Director T V.Narendran said in the statement. “The thrust on tax reforms and transparency will also facilitate the formali-sation of economy and serve as tailwind to players like Tata Steel.”

The global steel sector is benefiting from China’s crack-down on pollution that has boosted prices to a more than five-year high. Nippon Steel & Sumitomo Metal Corp, Japan’s biggest producer, saw its first-half profit surge nine-fold, while South Korea’s largest mill Posco expects to reap higher earnings in the fourth quarter.

“Globally, there was a recovery in the commodity cycle, with cuts in Chinese steel capacities and stronger demand resulting in improving utiliza-tion levels of mills in China,” said Koushik Chatterjee, group executive director at the Mum-bai-based steel producer.

This, coupled with a recent uptick in raw material prices, lifted the steel prices across regions, he said.

Last month, Tata and the

trustee of the British Steel Pen-sion Scheme agreed to separate the retirement plan from the steelmaker’s UK unit. Tata Steel agreed to pay 550 million pounds ($723m) and a 33 per-cent equity stake in the UK operations to the trustee.

“For Tata Steel, we see a long runway of growth in India and an attractive value crea-tion opportunity from the JV with Thyssenkrupp,” Bank of America Merrill Lynch said in a report on October 26. The company will benefit from management’s focus on value-accretive capacity expansion in India, successful resolution of the long-pending pension issue in Europe and the collabora-tion with Thyssenkrupp, it said.

Tata’s costs rose to Rs305.7bn in the quarter, from Rs268.7bn a year earlier, the company said. Gross debt rose by Rs24.5bn to Rs902.6bn because of an increase in work-ing capital l ines and foreign-exchange changes, while cash and cash equivalents totaled Rs198bn, it said.

Qatari economy adjusts to blockade: IMFSatish KanadyThe Peninsula

After the initial shock of the June 5 meas-ures, the Qatari economy and finan-cial markets are

adjusting to the impact of the diplomatic rift, International Monetary Fund noted.

“The initial concern that trade disruptions could affect the implementation of key infra-structure projects has been mitigated by the availability of an inventory of construction materials and of alternative, and competitive, sources of imports. In addition, Qatar is accelerat-ing efforts to further diversify

sources of imports and external financing, and to enhance domestic food processing”, the Fund stated in its Middle East and Central Asia Regional Economic Outlook released yesterday.

Qatar’s exports to these countries have been broadly maintained, including large vol-umes of gas supplied to Oman

and the United Arab Emirates. Reactions in GCC financial mar-kets have also been benign, with initial spillovers rapidly dissipat-ing. Over the longer term, a protracted rift could slow progress toward greater GCC integration and cause a broader erosion of confidence, reducing investment and growth and increasing funding costs in Qatar and possibly the rest of the GCC, the IMF document said.

On the growth prospects among GCC members, the Fund said that overall growth is pro-jected to bottom out at about 0.5 percent in 2017 as the Opec-led deal reduces oil output. In con-trast, non-oil growth is expected to recover to about 2.6 percent

in 2017–18 as fiscal consolida-tion, which has weighed significantly on growth over the past couple of years.

GCC countries with larger buffer are adjusting their fiscal positions gradually. This is allow-ing them to keep non-oil growth broadly steady. The diplomatic rift between Qatar and several other countries is expected to have a limited impact on growth in the region at this stage , although a protracted rift could weaken medium-term growth prospects, not only for Qatar but also for other GCC countries.

According to the IMF docu-ment, lower oil prices have contributed to large fiscal defi-cits across MENAP (Middle East,

North Africa, Afghanistan and Pakistan)oil exporters. Deficits jumped from 1.1 percent of GDP in 2014 to 10.6 percent of GDP in 2016, but are expected to ease to 5.2 percent of GDP this year on the back of a modest recovery in oil prices and significant deficit-reduction efforts. Five-year cumulative budget deficits are projected to be $320bn over 2018–22.

About half of MENAP oil exporters (Iran, Kuwait, Qatar, United Arab Emirates) had fiscal deficits of less than 5 percent of GDP in 2016, while the other half had deficits well above 10 per-cent of GDP.

The countries with low def-icits typically have substantial

buffers (Qatar, Kuwait, United Arab Emirates), or are less dependent on oil revenues (Iran), and are planning a gradual fis-cal adjustment to the lower oil price environment. Fiscal con-solidation plans in the GCC region include measures rang-ing from further reductions in non-wage recurrent spending, reductions in public wage bills as a share of GDP, additional cuts to capital expenditures, and higher non-oil revenues, partic-ularly the introduction of value-added taxes (projected to start being introduced in Janu-ary 2018) and excise taxes. Policymakers also need to take advantage of low oil prices to finalise energy price reforms.

Diversifying sources

Qatar is accelerating efforts to further diversify sources of imports and external financing, and to enhance domestic food processing.

AkzoNobel in talks to merge with AxaltaThe Hague

AFP

Dutch chemical giant and the world’s leading paintmaker AkzoNobel

announced yesterday it is in merger talks with rival, Axalta, which would blend two multi-billion dollar companies.

“In response to market speculation, AkzoNobel con-firms today it is currently in constructive discussions regarding a merger of the AkzoNobel Paints & Coatings business with Axalta,” the com-pany said in a statement.

“This will create a leading global paints and coatings com-pany through a merger of equals,” it added.

Bloomberg News said Axalta is the world’s leading maker of auto finish paints and “the deal would combine two companies with a market value of about $30bn”.

In past months, AkzoNobel has been fighting an increas-ingly bitter takeover bid by another US rival, Pittsburgh-based PPG, which would have valued the Dutch company at ¤26.9bn ($32.4bn).

It has rejected three multi-billion-euro takeover offers from PPG, sparking a legal bat-tle with an activist investor Elliott Advisors which had backed the tie-up.

Under Dutch law, PPG is now sitting out a six-month “cooling period” before it can make another bid for AkzoNo-bel -- a deadline looming in

January. Formed in 1994 from the merger of the Dutch and Swedish firms Akzo and Nobel, AkzoNobel has a 46,000-strong workforce and operates in 80 countries around the world. Last year, it reported ¤14.2bn in revenue.

But in April, the Amster-dam-based maker of such household paints as Dulux and Trimetal announced plans to spin off its speciality chemicals business within 12 months.

AzkoNobel is also planning to make ¤150m in savings through improving efficiency, with another ¤50m savings from shedding the chemicals division.

Axalta, which has more than 150 years experience, is based in Philadelphia and employs 13,300 people, with customers in over 130 coun-tries. Last year, it had net sales of $4.1bn.

In a statement, Axalta con-firmed it was “engaged in discussions” with AkzoNobel, but cautioned there were “no assurances that a definitive agreement ... will be reached or on what terms”.

It would only go ahead with the deal “if its board of directors determines that it is in the best interest of Axalta to do so”.

The Dutch trade union CNV said it would be seeking an explanation about the talks, with leader Arthur Bot insist-ing it was unclear “what are the consequences for its activities in the Netherlands”.

Japan bank Mizuho eyes cutting staff by one-thirdTokyo

AFP

Major Japanese bank Mizuho Financial Group is considering

slashing its global workforce by about one-third over a decade, reports said, as it looks to replace clerical jobs with artificial intelligence and other technology.

The lender is looking at chopping 19,000 jobs from its current roster of around 60,000 employees in Japan and overseas by March 2027, the top-selling Yomiuri newspaper said Sunday.

It is also eyeing the clo-sure of as many as 30 branches in Japan, out of a total of around 800, the Asahi newspaper said.

A Mizuho spokesman in Tokyo declined to comment Monday, saying that the firm is “discussing various issues”.

The report follows announcements of major job cuts by Mizuho’s rivals.

Japan’s lenders have seen profits squeezed after the Bank of Japan last year adopted a negative interest rate policy to work alongside its massive asset-purchase programme as part of a drive to kickstart lending and stoke inflation.

In September, Mizuho rival Mitsubishi UFJ Finan-cial Group said that it plans to cut about 9,500 jobs, or around one quarter of its workforce, within seven years.

Fellow banking giant Sumitomo Mitsui said in May it will reduce what it described as the workload equivalent of 4,000 jobs by March 2021 by digitising cler-ical processes and leaning on technology more than before.

Mizuho’s April-June net profit fell nearly 11 percent to 118.3 billion yen ($1.04 bn).

Goldman Sachs still investing in London: BlankfeinLondon

Bloomberg

In his second tweet with the hashtag #Brexit, Goldman Sachs Group Inc. Chief Exec-

utive Officer Lloyd Blankfein (pictured) said his bank was still investing in its new London office, but suggested policy mak-ers will ultimately decide whether the building is fully used as the Wall Street firm once intended.

“In London,” Blankfein said in a post Monday that contained an aerial shot of construction nearing completion. “GS still

investing in our big new Euro headquarters here. Expecting/hoping to fill it up, but so much outside our control.”

The Wall Street firm is vacat-ing three buildings in London to consolidate staff in the new office, an 80,000 square meter building just behind its existing Fleet Street base in the City of London.

The plan was to move all 6,000 UK staff to the new build-ing in 2019. That turns out to be the same year Britain is sched-uled to leave the European Union, with the shape of the post-Brexit relationship still a

question mark as negotiators clash.The tweet follows an Oct. 19 post in which Blankfein hailed the “great meetings” he had just had in Frankfurt, and said he will be spending a lot more time there. Germany’s financial cap-ital has emerged as the biggest winner in the fight for the thou-sands of London-based jobs that will be relocated inside the EU.

Goldman Sachs has agreed to lease office space in Frank-furt that could serve as its new trading hub inside the EU, peo-ple with knowledge of the matter told Bloomberg in June. The US bank is considering moving as

many as 1,000 employees to the city, a person familiar with the plans said earlier this year.

The global steel sector is benefiting from China’s crackdown on pollution that has boosted prices to a more than five-year high. Nippon Steel & Sumitomo Metal Corp, Japan’s biggest producer, saw its first-half profit surge nine-fold,.

German inflation falls in OctoberINFLATION in Germany slid in October, official data showed yesterday, underscoring the challenge of the European Cen-tral Bank reaching its price growth target.

Prices increased 1.6 per-cent year-on-year in October, federal statistics authority Destatis said in preliminary figures, slightly short of fore-casts from analysts surveyed by Factset.

Measuring using the har-monised index of consumer prices, the ECB’s preferred yardstick, produced an even lower figure of just 1.5 per-cent. Inflation in Europe’s powerhouse economy had been stable at 1.8 percent in August and September, close to the target of just below 2.0 percent that central bank governors have pushed for with massive interventions in recent years.

Prices for services and rental costs for housing also contributed to the slowdown,

Union talks

24 TUESDAY 31 OCTOBER 2017BUSINESS

Lebanon’s Energy and Water Minister Cesar Abou Khalil speaks during Basra Oil, Gas and Infrastructure conference in Beirut, Lebanon, yesterday.

Oil & gas conference

US consumer spending grows at fastest pace since 2009Washington

Reuters

US consumer spend-ing recorded its biggest increase in more than eight years in September,

likely as households in Texas and Florida replaced flood-damaged motor vehicles, but underlying inflation remained muted.

The Commerce Department said yesterday consumer spend-ing, which accounts for more than two-thirds of US economic activity, jumped 1.0 percent last month. The increase, which also included a boost from higher household spending on utilities, was the largest since August 2009.

Consumer spending rose by an unrevised 0.1 percent in August. Economists polled by Reuters had forecast consumer spending increasing 0.8 percent in September.

Prices of US Treasuries were

higher in early morning trading while the dollar was weaker against a basket of currencies. US stock index futures were mixed.

The data was included in last Friday’s third-quarter gross domestic product report, which showed consumer spending growth slowing to a 2.4 percent annualized rate after a robust 3.3 percent pace in the second quar-ter. The moderation in

consumption was offset by a rise in inventory investment, busi-ness spending on equipment and a drop in imports, which left the economy growing at a 3.0 per-cent rate in the third quarter after the April-June period’s brisk 3.1 percent pace.

The Commerce Department said September data reflected the effects of Hurricanes Harvey and Irma, but said it could not quan-tify the total impact of the storms on consumer spending and per-sonal income.

Consumer spending in Sep-tember was buoyed by purchases of motor vehicles, probably as drivers in Texas and Florida replaced automobiles that were destroyed when Harvey and Irma slammed the states in late August and early September. Spending on long-lasting goods like autos surged 3.2 percent last month. Outlays on services rose 0.5 percent.

Though disruptions to the supply chain as a result of the

hurricanes also likely contrib-uted to an uptick in inflation last month, underlying price pres-sures remained benign.

The Federal Reserve’s pre-ferred inflation measure, the personal consumption expendi-tures (PCE) price index excluding food and energy, edged up 0.1 percent in September. The so-called core PCE has now increased by 0.1 percent for five straight months.

The core PCE increased 1.3 percent in the 12 months through September after a similar gain in August. The core PCE has under-shot the Fed’s 2 percent target for nearly 5-1/2 years.

The soft core PCE readings are likely to intensify the infla-tion debate among Fed officials, who are holding a policy meet-ing tomorrow and Wednesday. The US central bank is not likely to raise interest rates this week, but is expected to do so in December. It has raised rates twice this year. When adjusted

for inflation, consumer spend-ing increased 0.6 percent in September after slipping 0.1 per-cent in August. While that put consumer spending on a higher growth trajectory heading into the fourth quarter, it is unlikely to be sustained as households increasingly rely on dwindling

savings to fund purchases.Personal income rose 0.4

percent last month after increas-ing 0.2 percent in August. Wages advanced 0.4 percent. Savings fell to $441.9bn in September, the lowest level since August 2008, from $521.4bn in the prior month.

Eurozone banks can cope with low rates for years: ECB Frankfurt

Reuters

Bank profits should be able to withstand ultra low euro zone interest rates

for up to a decade, a research paper published by the Euro-pean Central Bank said yesterday, just days after pol-icymakers put off any rate rise.

Some banks have said that maintaining their profitability while interest rates are so low is impossible, making the ECB’s efforts to stimulate economic activity self defeating as weaker banks will not to trans-mit cheap money to the real economy.

“Although keeping interest rates low-for-long might have negative consequences on bank profitability, substantial adverse effects only material-ise after a relatively long period of time and tend to be counterbalanced by improve-ments in macroeconomic conditions associated with low interest rates,” the paper said.

The euro zone economy is expanding for the 18th straight quarter, its best run since the global financial crisis, with much of the growth fuelled by the ECB’s cheap cash, includ-ing a deposit rate which has been negative since 2014.

If the macroeconomic

outlook remained unchanged, the negative impact on bank profitability could be signifi-cant within five years, but economic expansion pushes out this impact, the research-ers said in a paper that does not necessarily represent the ECB’s opinion.

“For the first five years the change in expected GDP more than offsets the negative impact on profitability linked to the low-for-long,” the researchers said about the more optimistic scenario. “It would then take about ten years to reduce the profitabil-ity of the median bank by 25 percent.”

Return on equity at Europe’s biggest banks super-vised by the ECB rose to 7.10 percent in the second quarter, from 5.36 percent a year ear-lier, ECB data showed earlier.

The ECB has promised to keep rates at their current level until well after it concludes asset buys and markets now see the first rate hike in late 2019, at the earliest.

Supporting its argument, the paper noted that bank equity prices have increased after all major ECB easing announcements, suggesting improved expectations and a positive impact on their credit risk.

China’s three big airlines see rise in Q3 net profitShanghai

AFP

China’s three biggest air-lines have reported a rise in third-quarter

net profit on strong domes-tic travel demand.

China Southern, Asia’s biggest carrier, saw its net profit for July-September surge 29.40 percent year-on-year to 4.28 billion yuan ($643.7m), according to a stock exchange statement yesterday.

Flag carrier Air China said its third-quarter net profit surged 31.39 percent year-on-year to 4.95 billion yuan, according to a state-ment late last week to the Hong Kong exchange, where it is listed.

The state-owned Chinese airline said net profit rose to 5 billion yuan for July-Sep-tember from 3.8 billion yuan a year earlier. Net profit over the nine months to Septem-ber rose 14.6 percent to 8.3 billion yuan.

The carrier said strong economic growth in the quarter, and buoyant demand during the summer holiday season from July to August, boosted earnings.

“Despite challenges the aviation industry still faces, such as foreign exchange rate, oil price, geological and political situations... the overall market supply and demand trend improved,” Air China said in a statement.

Chinese carriers have benefited from a boom in domestic and international air trips as the country’s mid-dle class spends more on travel and leisure.

Shanghai-based China Eastern Airlines reported slower growth than the oth-ers for the third quarter, up 3.09 percent to 3.59 billion yuan.

Its investment of ¤375m for a 10 percent stake in Air France-KLM was completed on October 3.

Shares in China Southern and Air China were both boosted yesterday by the upbeat earnings.

Air China closed up 1.41 percent in Shanghai, where it is also listed, and jumped 3.92 percent in Hong Kong. China Southern added 0.94 percent in Shanghai and was 1.21 percent higher in Hong Kong.

World’s tiniest power market to leverage big data for solarNew York

Bloomberg

It will be the world’s smallest electricity market.

In mid-December, National Grid Plc will flip the switch on an automated trading system that pays hospitals and research facilities at the Buffalo Niagara Medical Campus to sell electricity from their onsite solar panels, batteries or other gener-ators to doctors’ offices and businesses -- the first power market ever designed within a single utility service area.

The micro-market is an example of the Uber-effect, applying big data to better mon-etize small assets. The same technology could be used to help homeowners sell electricity from rooftop solar panels to their neighbors, and it may be a key part of New York Governor Andrew Cuomo’s plan to get half the state’s power from renewa-

ble sources by 2030.“This will force changes on

the utilities, in their planning and their operations,” said John Rhodes, chairman of the New York Public Service Commission. “This is critical to developing consumer-driven innovation.”

The market will take its cue from the New York Independ-ent System Operator’s day-ahead power price, crunching data like weather forecasts, historic usage and current output to set a price on an hour of electricity from the various generating assets within

the 120-acre campus. Unlike wholesale markets that deliver gigawatts of energy across states, this one will trade about 5 meg-awatts to 10 megawatts on the campus in downtown Buffalo.

Letting different systems compete to supply energy will lead to a more cost-effective mix, said Keyvan Cohanim, chief commercial officer at Opus One Solutions Inc., the smart-grid technology company t h a t d e v e l o p e d t h e micro-market.

“It’s all about helping utili-ties get more distributed energy on the grid,” he said. “This mar-ket will provide a natural incentive to create a decentral-ized, more resilient grid.”

After the devastation wrought on Puerto Rico’s elec-tric grid and parts of the US southeast following an unusu-ally active hurricane season, microgrids are increasingly seen as a way forward to help

keep the lights on.Adding a market to the

microgrid will also make it more efficient for utilities to operate the grid, and eliminate or delay investment in large new fossil fuel plants, substa-tions and wires, Rhodes said.

National Grid, the local util-ity, stands to lose some revenue after the micromarket opens because the campus may use more power from its own assets and less from the grid. The com-pany will instead get fees to participate in the market, according to Fouad Dagher, director of solution develop-ment at the utility.

“This is an opportunity for our customers to participate in the market,” Dagher said at an industry conference. “Anyone with an energy asset -- or a willingness to cut their demand when needed -- can participate. Any form of energy or load is welcome.”

Gasoline pumps wrapped in plastic ahead of the arrival of Hurricane Irma in Fort Lauderdale, Florida seen in the file picture. A record spike in fuel prices following the hurricanes drove up US inflation in September.

Autos surge

Consumer spending, which accounts for more than two-thirds of US economic activity, jumped 1.0% last month

Spending on long-lasting goods like autos surged 3.2% last month.

Glencore raises marketing guidanceLondon

Reuters

Glencore yesterday cut its output forecast for core commodities including

zinc, but raised its marketing division’s full-year earnings before interest and tax (EBIT) to between $2.6bn and $2.8bn, reflecting higher raw materials prices.

Its previous 2017 marketing, or trading, EBIT guidance was $2.4bn to $2.7bn, which was already an upward revision

from $2.1bn to $2.4bn at the start of the year.

In its third-quarter produc-tion report yesterday, Glencore lowered its output guidance for copper, zinc and coal, citing operational difficulties, main-tenance and end-of-mine-life declines, but it said full-year earnings would not suffer.

Analysts said it had been a weak quarter, but marketing conditions were favourable.

They reiterated their “out-perform” rating, saying Glencore’s commodity mix

makes it well-placed for an increase in demand from elec-tric vehicles.

For zinc output, Glencore cut its 2017 guidance to 1.1 mil-lion tonnes (+/- 15,000 tonnes) from 1.13 million tonnes (+/-25,000 tonnes) seen in August.

Glencore’s zinc production has been in focus as a doubling in the market since the start of last year has raised questions over whether Glencore would bring back the production it shut in when the market was much weaker.

Solar panels stand at the Enbridge Inc. Sarnia Solar Farm in Sarnia, Ontario, Canada.

25TUESDAY 31 OCTOBER 2017 BUSINESS

A Chinese worker checking a roll of aluminium at an aluminium production plant in Huaibei, east China’s Anhui province. China has criticised new United States anti-dumping duties on aluminium foil, saying it was “extremely dissatisfied” with the new measures, just days before US President Trump visits Beijing.

China faces anti-dumping duties

HSBC Q3 profits up 5-fold to $4.6bn on booming AsiaHong Kong

AFP

Profits at banking giant HSBC leapt five fold in the third quarter to $4.6bn, the company said yesterday, as

business booms in Asia and a huge restructuring drive bears fruit.

The massive jump in pre-tax profits came weeks after a new chief executive was unveiled as part of a management overhaul that has seen the London-based behemoth roar back from costly write downs.

John Flint, head of retail banking and wealth manage-ment, will take up his position in February when current head Stuart Gulliver steps down, and has said he wants to “accelerate the pace of change”.

The Asia-focused firm has been on a recovery drive to streamline its business and slash costs since 2015, including lay-ing off tens of thousands of staff.

That came as part of wide-r a n g i n g r e s t r u c t u r i n g programmes during a troubled period for the bank and sector as a whole following the global financial crisis in 2008.

Reported pre-tax profit jumped to $4.6bn in the three months to the end of Septem-ber, compared with $843m over the same period in 2016.

Shares were up 0.7 percent at HK$77.65 ($9.95) in early afternoon trading.

Gulliver said the bank had “maintained good momentum

in the third quarter”, with higher revenue across its main global businesses.

“Our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong,” he added.

Net profit also rose from a loss of $617m in the third quar-ter of 2016 to $2.96bn.

Profits in 2016 had been hit by the loss on sale of the bank’s operations in Brazil, the bank said in its statement.

Analysts said the result was better than expected.

“I think HSBC is one of the best international banking stocks at this moment,” Dickie Wong, executive director of research at Kingston Securities, told AFP.

“It is the third consecutive quarter that earnings and reve-nue have increased.”

The bank said it was on track to achieve annual cost sav-ings of $6bn by the end of the year. After some strong profit-able years under Gulliver, HSBC earnings plunged in 2016 on

huge write downs and restruc-turing charges. Profits rebounded in the first half of this year.

The bank had in 2015 set out a plan to axe 50,000 jobs and exit non-core markets, as it also navigated a series of damaging probes into HSBC operations.

Wong pointed out that it may still feel the effects of legal challenges and expenses.

“HSBC has had to spend a lot of money to hire more law-yers to help them to fix their legal problems and to enhance their compliance department,” Wong said.

“This is something that may pull them back.”

The bank was fined $1.92bn by US prosecutors in 2012 to set-tle allegations that it failed to enforce anti-money laundering rules exposing it to exploitation by drug cartels and terrorist organisations.

In 2015, HSBC was forced to apologise for “unacceptable” failings at its Swiss division fol-lowing allegations that the unit helped rich clients hide billions from the taxman.

Also during Gulliver’s seven years at the helm, HSBC was fined along with other global banks by US and British regula-tors for attempting to rig foreign exchange markets.

Last week a British court ruled that former currency trad-ing executive Stuart Scott should be extradited to the United States to face fraud charges, days after a US jury found his alleged co-conspirator guilty.

Beijing

Reuters

China and Sri Lanka should focus on strengthening cooperation over key

investment projects, Foreign Minister Wang Yi (pictured) yesterday told his visiting coun-terpart from Sri Lanka, amid strong local opposition to some major Chinese-invested schemes.

In July, Sri Lanka signed a long-delayed $1.1bn deal to lease its southern Hambantota port to China, ignoring an appeal by opposition parties to debate the pact in parliament.

The $1.5bn port, close to the main shipping route from Asia to Europe and likely to play a key role in China’s “Belt and Road” initiative, has been mired in controversy since a Chinese firm agreed to take an 80 percent stake in it.

The pact signed last year sparked widespread public anger, as Chinese control of the port, which included a plan for a 99-year lease of 15,000 acres (23 sq miles) to develop an adjacent industrial zone, pro-voked fears it could be used by Chinese naval vessels.

Meeting in Beijing, Wang told Tilak Marapana that the two countries should take this year’s 60th anniversary of establishing diplomatic ties as an opportunity, China’s foreign ministry said in a statement.

Both should “emphasise strengthening traditional friendship and political mutual trust, major infrastructure projects, investment and trade” to “upgrade” their relationship, Wang added.

The short statement did not mention any specific projects.

As one of the first countries to help in Sri Lanka’s post-war reconstruction after the 2009 end of its 26-year civil war, China’s ties with Sri Lanka have unnerved India, tradi-tionally the island nation’s most important partner.

By 2014, Chinese navy sub-marines were also docking in Colombo, raising alarm in New Delhi and prompting a push by the administration of Prime Minister Narendra Modi to claw back influence in the region.

Shanghai

AFP

Apple has ended an 18-month slump in iPhone sales in China

with a 40 percent surge in shipments in the third quar-ter, according to a private survey released yesterday.

About 11 million iPhones were sold in China from July to September compared to eight million in the same period last year, research firm Canalys said in a report. Apple had negative year-on-year growth in China for the previous six quarters.

The uptick in deliveries came even though the country’s overall market declined five percent in the same quarter.

“The high sell-in caters to the pent-up demand of iPhone upgraders in the absence of the iPhone X,” said Canalys analyst Mo Jia, adding that price cuts on earlier models after the announcement of the iPhone 8 also helped. But Apple’s iPhone shipments still lag far behind domestic rivals, with the com-pany ranked only fifth on the mainland behind Huawei, Oppo, Vivo and Xiaomi.

Third-quarter growth was only temporary, according to Mo, predicting that Apple was unlikely to sustain such momentum in Q4. Apple will launch the iPhone X early next month.

Excitement is already building in China, with inves-tors snapping up pre-orders just minutes after they became available last week.

China urges Sri Lanka for closer cooperation on key projects

Apple Q3 iPhone shipments surge 40% in China

Oil extends two-year high amid Opec resolve & Iraq disruptionsLondon

Bloomberg

Oil extended a two-year high above $60 a barrel in London amid growing

signs that Opec and Russia will press on with supply curbs, and as pipeline flows from Iraq were disrupted.

Brent crude futures added 0.3 percent. Saudi Arabia last week backed extending produc-tion cuts by the Organization of Petroleum Exporting Countries (Opec) and its allies beyond March, following a similar endorsement by Russian Pres-ident Vladimir Putin earlier this month. Iraq’s exports through its northern pipeline to Turkey have halted, according to a port agent.

“High Opec compliance” and “roaring oil demand growth combined over the last few

months have accelerated the rebalancing of the oil market,” said Giovanni Staunovo, an ana-lyst at UBS Group AG in Zurich. “Reports that Saudi Arabia and Russia are mulling over the prospect of an extension” have “played a part in buoying mar-ket sentiment and recently lifting oil prices.”

Both Brent, the benchmark for more than half the world’s oil, and US marker West Texas Intermediate crude have jumped in October amid spec-ulation that Opec and partners including Russia will prolong output cuts aimed at reducing a global glut. World stockpiles are down to about 160 million barrels above the five-year average and prices are heading toward “fair” levels, according to Qatar’s Minister of Energy and Industry, H E Dr Moham-med bin Saleh Al Sada.

Brent for December settle-ment, which expires today, rose as much as 45 cents to $60.89 a barrel on the London-based ICE Futures Europe exchange, the highest since July 2015. It was at $60.61 at 9:42 am in Lon-don. Prices gained 4.7 percent last week. The global bench-mark crude traded at a premium of $6.78 to WTI.

WTI for December delivery was at $53.85 a barrel on the New York Mercantile Exchange, down 5 cents. Total volume traded was about 36 percent below the 100-day average. Prices on Friday advanced 2.4 percent to $53.90, capping a 4.7 percent weekly gain.

Oil flows were disrupted from the north of Opec mem-ber Iraq, as bad weather shut the Turkish port of Ceyhan from which some of the country’s exports are shipped.

Pipeline flows from the Kurdish region to Turkey halted at 4 am local time, stopping the movement of about 264,000 barrels a day, according to a port agent. The delivery of crude from fields in Kirkuk, recently reclaimed by the cen-tral government, was also suspended after a brief resump-tion last week. No reason was

given.Just before the weekend, the

region’s Kurdish administration agreed a truce with the central Baghdad-based government following the Kurds’ earlier vote to secede from the country.

Iraq added a fifth offshore crude-exporting facility with a capacity of 900,000 barrels a day to boost shipments by sea, the nation’s oil ministry said in an emailed statement, citing Minister Jabar Ali Al Luaibi (pictured).

The financiers and corpo-rate chieftains gathered for Saudi Arabia’s ‘Davos in the Desert’ heard the same message again and again. From the crown prince down, Saudi lead-ers wanted no room for doubt: the initial public offering of oil giant Aramco is “on track” for 2018.

Among US explorers, the

new emphasis is on getting the most output possible with wells that now can run horizontally for miles, as well as putting into service drilled-but-uncom-pleted wells that need to be fracked. Drillers added one rig last week, according to data released Friday. American crude production climbed by 1.1 million barrels a day in the week ended October 20.

Hedge funds boosted their Brent net-long positions -- the difference between bets on a price increase and wagers on a drop, by 2.6 percent to 506,737 contracts in the week ended October 24, according to data from ICE Futures Europe. That’s close to a record at the end of September and the previous high in February. Longs increased by 1.5 percent, while shorts slid 6.6 percent to the lowest since February.

Cost savings

The bank said it was on track to achieve annual cost savings of $6bn by the end of the year.

Net profit also rose from a loss of $617m in the third quarter of 2016 to $2.96bn.

Kobe abandons net income forecast as scandal blurs future outlookTokyo

Bloomberg

Kobe Steel Ltd withdrew its net income forecast and said it won’t pay its

dividend, acknowledging that executives can’t predict how a scandal involving falsified prod-uct data will affect earnings in coming months.

The steelmaker, which elim-inated its 10 yen per-share interim dividend, kept its reve-nue prediction but said it can’t estimate costs related to cus-tomer reimbursements, according to a statement yester-day from the Kobe, Japan-based manufacturer announcing first-half earnings. The forecast for net income had been 35 billion yen ($308m) for the fiscal year that ends in March.

Over the past three weeks,

Kobe Steel has announced it faked data for products ranging from copper and aluminum to steel wires, machinery parts and heavy-plated metal. Clients including Kawasaki Heavy Industries Ltd have said they might seek reimbursement from the manufacturer if their cus-tomers start asking for replacement products or compensation.

“The trust in our company has been lost,” Kobe Steel Exec-utive Vice-President Naoto Umehara said at a press confer-ence. “It will have an impact on the orders we receive next fis-cal year and the year after.”

While most of the 525 com-panies affected didn’t find any safety problems created by data falsification, the manufacturer has said it will help pay for related costs. Kobe Steel also lost

Japanese Industrial Standards certification at one of its facto-ries in Kanagawa and others are at risk as the government expands its inspections.

The company lowered its current profit forecast 9.1 per-cent to 50 billion yen, and its operating profit 6.2 percent to 75 billion yen. It maintained its revenue forecast of 1.88 trillion yen.

Revamping quality control for aluminum and copper prod-ucts will increase costs and lower output, Umehara said. The current profit forecast includes a 10 billion yen reduction from the data-falsification issues, he said.

The company will probably receive requests to reimburse customers for expenses related to quality checks and replace-ments, Umehara said.

Iraq added a fifth offshore crude-exporting facility with a capacity of 900,000 barrels a day to boost shipments by sea, the nation’s oil ministry said in an emailed statement.

26 TUESDAY 31 OCTOBER 2017BUSINESS

QATAR STOCK EXCHANGE

QE Index 8,196.54 0.76 %

QE Total Return Index 13,745.12 0.76 %

QE Al Rayan Islamic Index 3,199.56 0.85 %

QE All Share Index 2,298.76 0.58 %

QE All Share Banks &

Financial Services 2,573.12 0.47 %

QE All Share Industrials 2,528.17 0.66 %

QE All Share Transportation 1,667.98 0.59 %

QE All Share Real Estate 1,634.14 1.51 %

QE All Share Insurance 3,006.86 0.35 %

QE All Share Telecoms 1,048.82 2.48 %

QE All Share Consumer

Goods & Services 4,821.63 0.78 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

30-10-2017Index 8,196.54

Change 62.08

% 0.76

YTD% 21.46

Volume 6,560,270

Value (QAR) 133,204,634.16

Trades 2,400

Up 21 | Down 16 | Unchanged 129-10-2017Index 8,134.46

Change 6.21

% 0.08

YTD% 22.06

Volume 9,308,067

Value (QAR) 169,548,013.20

Trades 1,782

EXCHANGE RATE

GOLD QR149.3003 per grammeSILVER QR1.9717 per gramme

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

All Ordinaries 5983.72 14.441 0.24 6003.2 5635.1

Cac 40 Index/D 5494.61 0.48 0.01 5513.53 4733.82

Dj Indu Average 23434.19 33.33 0.14 23485.25 17883.56

Hang Seng Inde/D 28336.19 -102.66 -0.36 28798.78 21883.82

Iseq Overall/D 6897.07 -4.26 -0.06 7157.43 6369.05

Kse 100 Inx/D 40324.32 -781.08 -1.9 53127.24 39478.05

S&P 500 Index/D 0 0 0 2582.98 2245.13

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 4.7719 QR 4.8396

Euro QR 4.2122 QR 4.2719

CA$ QR 2.8144 QR 2.8698

Swiss Fr QR 3.6294 QR 3.6810

Yen QR 0.03178 QR 0.03239

Aus$ QR 2.7696 QR 2.8240

Ind Re QR 0.0557 QR 0.0568

Pak Re QR 0.0342 QR 0.0349

Peso QR 0.0699 QR 0.0713

SL Re QR 0.0235 QR 0.0240

Taka QR 0.0432 QR 0.0444

Nep Re QR 0.0348 QR 0.0354

SA Rand QR 0.2563 QR 0.2614

INTERNATIONAL MARKETS - A LIST OF SHARES FROM THE WORLD

A C C-A/D 1823.5 37.55 21721

Aban Offs-A/D 203.1 4.2 575708

Ador Welding-B/D 546.65 17.2 14529

Aegis Logis-A/D 235.75 1.7 28759

Alembic-B/D 40.2 1.1 252315

Alkyl Amines-B/D 596.45 14.1 1864

Alok Indus-B/D 3.17 0.01 779778

Apollo Tyre-A/D 246.95 3.4 249537

Asahi I Glass-/D 390.4 14.6 11161

Ashok Leyland-/D 128.55 0.55 566212

Ballarpur In-B/D 14.72 1.36 1247069

Banaras Bead-B/D 62 -0.25 1182

Bata India-A/D 820.95 43 127184

Beml Ltd-A/D 1702 -3.05 22434

Bhansali Eng-B/D 132.4 12 667124

Bharat Bijle-B/D 1034 28.25 2705

Bharat Ele-A/D 176 3.7 258633

Bharatgears-B/D 142.65 0.3 5640

Bhartiya Int-B/D 625 19.7 17127

Bhel-A/D 95.8 0.6 1416187

Bom.Burmah-A/D 1681.9 5.75 47654

Bombay Dyeing-/D 197.75 0.65 439845

Canfin Homes-A/D 489.3 -6.05 70979

Caprihans-Xc/D 118.6 12.4 158487

Castrol India-/D 402.25 0.35 100068

Century Enka-B/D 378.95 20.5 31479

Century Text-A/D 1350.8 0.95 20134

Chambal Fert-B/D 148.7 3.65 87683

Chola Invest-A/D 1140.05 16.3 10672

Chowgule St-Xt/D 14.06 0.06 6900

Cimmco-B/D 102.65 -2.2 27258

Cipla-A/D 626.65 3.35 157292

City Union Bk-/D 160 0.9 27797

Colgate-A/D 1069 11.55 24561

Container Cor-/D 1370 7.1 6958

Dai-Xc/D 413.8 4.8 2390

Dcm Financia-B/D 2.87 -0.15 13779

Dcm Shram Ind-/D 345 5.4 16443

Dhampur Sugar-/D 315.45 2.9 79316

Dr. Reddy-A/D 2433 37.6 100601

E I H-B/D 155.95 6.65 86584

E.I.D Parry-A/D 371.9 1.45 26082

Eicher Motor-A/D 32360.75 577.9 2282

Eimco Elecon-B/D 615.4 16.85 8326

Electrosteel-B/D 32.25 -0.9 98208

Emco-T/D 18 0.3 18122

Escorts Fin-Xt/D 4.47 -0.23 2100

Escorts-A/D 772.25 35.35 195914

Eveready Indu-/D 334.95 7.85 7483

F D C-B/D 183.5 0.7 4313

Federal Bank-A/D 121.9 1.7 494328

Ferro Alloys-X/D 23.96 1.68 1453300

Finolex-A/D 716 6.75 9328

Forbes-B/D 1790 -9.15 1975

Gail-A/D 472.9 2.05 145108

Gammon India-Z/D 6.72 0.32 235397

Garden P -B/D 33.8 -0.15 18687

Godfrey Phil-A/D 1005.45 0.65 3278

Goodricke-Xc/D 290.15 9.6 42622

Goodyear I -B/D 815.85 7.55 5443

Hcl Infosys-A/D 48.1 1.85 1096830

Him.Fut.Comm-B/D 29.6 0.6 1918858

Himat Seide-B/D 374.5 5.55 10481

Hind Motors-B/D 7.31 0.11 52638

Hind Org Chem-/D 21.7 -0.3 80242

Hind Unilever-/D 1235.9 -21.5 75299

Hind.Petrol-A/D 455.6 -1.6 205726

Hindalco-A/D 272.9 2.35 146461

Hous Dev Fin-A/D 1705.5 7.5 125660

I F C I-A/D 25.1 0 769388

Idbi-A/D 65.25 2.9 834554

Ifb Agro-B/D 730.6 42.4 12771

Ifb Ind.Ltd.-B/D 950.45 14.75 21322

India Cement-A/D 193.3 -2.15 259031

India Glycol-B/D 324.75 1.15 74818

Indian Card-B/D 177 0.9 2038

Indian Hotel-A/D 114.55 2.65 49086

Indo-A/D 119.7 0.95 193871

Indusind-A/D 1619.6 -7.1 29306

J.B.Chemical-B/D 284.75 0.9 15195

Jagson Phar-B/D 34.25 -0.1 2123

Jamnaauto-B/D 65.75 0.9 788656

Jbf Indu-B/D 221.15 11.35 36914

Jct Ltd-Xc/D 3.5 0.12 644391

Jenson&Nich.-T/D 7.9 -0.06 9137

Jindal Drill-B/D 158.5 0.35 25579

Jktyre&Ind-A/D 147 0.95 81409

Jmc Projects-B/D 453.5 5 4156

Kabra Extr-B/D 136.7 2.4 3156

Kajaria Cer-A/D 684.1 0.05 148426

Kakatiya Cem-B/D 394.45 16.6 28303

Kalpat Power-B/D 375.1 4.7 49096

Kalyani Stel-B/D 413.05 3.15 10449

Kanoria Chem-B/D 85.3 -0.05 15623

Kg Denim-Xc/D 61.75 0.55 19469

Kilburnengg-Xd/D 86.5 1.45 29659

Kinetic Eng-Xc/D 69.4 1.45 8342

Kopran-B/D 69.55 0.25 74936

Lakshmi Elec-X/D 747.45 5.45 5128

Laxmi Prcisn-B/D 37.75 -1.25 4446

Lgb Broth-B/D 1005.5 39.7 10673

Lloyd Metal-Xd/D 18.9 0.9 45782

Lupin-A/D 1027.55 26.7 735357

Lyka Labs-B/D 53.7 1.4 16644

Mafatlal Ind-X/D 287 3.95 4225

Mah.Seamless-B/D 494.35 20.35 64040

Maha Scooter-B/D 2675 -43 1188

Mangalam Cem-B/D 379.5 3.55 8873

Maral Overs-B/D 46.95 -0.7 12281

Mastek-B/D 367.95 30.3 204761

Max Financial-/D 582 27.85 51015

Mrpl-A/D 135.55 1.3 160549

Nagreeka Ex-B/D 33.9 0.25 3480

Nahar Spg.-B/D 122.9 12 104488

Nation Alum -A/D 91.5 -0.35 1064000

Navneet Edu-B/D 165.35 1.25 1535

Nepc India-Z/D 0.86 -0.04 1100

Neuland Lab-B/D 1133 18.6 2731

Nrb Bearings-B/D 132.35 -0.65 3220

O N G C-A/D 186.65 3.1 1104706

Ocl India-B/D 1443 65.4 1588

Oil Country-B/D 56.3 3.1 42928

Onward Tech-B/D 132.85 -4 143390

Orchid Pharm-T/D 18.95 -0.35 42105

Orient Hotel-B/D 38.65 0.1 16486

Patspin India-/D 29 3.95 149605

Punjab Chem.-B/D 391.2 -6.5 3399

Radico Khait-B/D 214.75 -0.55 276143

Rallis India-A/D 246.5 1.1 19551

Rallis India-A/D 246.5 1.1 19551

Reliance Indus/D 525.9 2.15 85395

Ruchi Soya-B/D 23.65 1.95 344879

Saur.Cem-Xc/D 92.85 0.75 216071

Tanfac Indu-Xd/D 121.8 20.3 358454

Tanfac Indu-Xd/D 121.8 20.3 358454

Thirumalai-B/D 1851.3 25.7 24262

Til Ltd.-B/D 551.9 14.75 7679

Timexgroup-T/D 37.8 0.1 36488

Tinplate-B/D 272.4 2.65 310618

Ucal Fuel-B/D 200.9 2.45 12302

Ucal Fuel-B/D 200.9 2.45 12302

Ultramarine-Xc/D 272 0.5 9359

Unitech P -A/D 6.75 0.45 6311739

Univcable-B/D 174.5 20.2 197848

3I Group/D 957 10.5 200325

Assoc.Br.Foods/D 3339 -16 81791

Barclays/D 184.315 0.55 15565241

Bp/D 499.55 1.65 7889101

Brit Am Tobacc/D 4951.5 -70.5 482217

Bt Group/D 262.35 -0.65 4075260

Centrica/D 168.4 -1.7 2786569

Gkn/D 322.5 1.8 1844740

Hsbc Holdings/D 737.8 -10.5 11219245

Kingfisher/D 317.5 7.1 4494511

Land Secs./D 956 0.5 277455

Legal & Genera/D 268.6 0.1 1296180

Lloyds Bnk Grp/D 68.64 -0.26 29512681

Marks & Sp./D 346.1 -0.1 1061511

Next/D 4910 28 61599

Pearson/D 713.5 -2 430077

Prudential/D 1864 1.5 566645

Rank Group/D 230.4 -2.3 11465

Rentokil Initi/D 335.1 2.6 1014775

Rolls Royce Pl/D 960 -4.5 794968

Rsa Insrance G/D 632 2 239998

Sainsbury(J)/D 243.2 0.2 761947

Schroders/D 3475 11 48053

Severn Trent/D 2089 -9 104734

Smith&Nephew/D 1428 0 293689

Smiths Group/D 1564 3 105427

Standrd Chart /D 755.9 2.2 657577

Tate & Lyle/D 645 -8 329806

Tesco/D 184.25 -1.25 4276979

Unilever/D 4214.5 -16 617946

United Util Gr/D 826.5 -3.5 365968

Vodafone Group/D 214.8 -0.8 10320953

Whitbread/D 3668 -21 145066

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LONDON

Tunnels coursing through the bowels of the earth under the city of Johannesburg contain precious treasure -- copper cables that are being stripped out and smuggled as far away as Asia.

As in many other parts of the world, copper cable theft is not new in South Africa, but lately it has reached an unprecedented scale.

A recent brazen theft knocked out power and plunged the central business district of Johannesburg, the eco-nomic hub, into darkness, largely paralysing business for 10 straight days.

It is estimated that nearly half of the power outages in the city are caused by cable theft.“In 2004, about four percent of all outages were due to cable theft, and now it is 40 (percent),” said Louis Pieterse, a director of the City Power utility company.

Last month’s raid saw 32 kilometres (20 miles) of cables being ripped out, stolen or damaged, leaving the city with a 45-million-rand ($3.2- million, 2.7-million-euro) bill in repairs.

The damage was so severe that it took two-and-half days before technicians could safely navigate down the hot and smoky underground tunnels. The burglary tac-tics are shockingly dangerous. Thieves set fire to a portion of the cables, triggering a short circuit which trips the power and allows them to tear the rest down and cart it away.

Cables thieves work for “sophisticated gangs” and “mafias”, according to metal expert Rens Bindeman. They have organised themselves into networks of metal spot-ters, cutters, transporters and even run an informal “training centre” near Johannesburg.

While stolen copper was traditionally sold to scrap metal dealers for recycling, now the gangs also operate from remote farms, equipped with copper-melting plants.

The cables are melted into ingots before they are shipped for export, making it virtually impossible for authorities to differentiate them from legitimately mined and processed copper.

“There is a new trend. They are getting sophisticated. They melt it into ingots,” said Bindeman. It appears that the ebb and flow in copper cable heists are tied to the international commodity prices.

Official market prices surged 60 percent in the last 18 months to reach almost $7,000 a tonne. The stolen cop-per is usually trafficked to China and India for manufacturing electronic components.

In Johannesburg, a small tunnel still reeks of burnt copper as electricians in gloves and rubber boots strug-gle to unfurl new rolls of cabling and restore power.

To clamp down on the pervasive thefts, city authori-ties plan to seal the manholes leading to the tunnels and install smoke detectors -- at a cost of five million rand.

Eventually, the city also plans to replace copper with less valuable aluminium. “The criminals who steal our copper cable sabotage our economy,” said Johannesburg mayor, Herman Mashaba.

Businesses had no choice but to hire generators.“It is catastrophic,” said laundromat owner Godfrey Gonese, who lost a third of his month revenue due to the 10-day blackout.

A nearby internet cafe had to double fees to make up for the cost of running the generator and the result was “most of our customers have run away,” said owner Bright Assim. A 100,000-rand bounty for anyone with informa-tion about the copper burglars quickly yielded results.

In just two days, 22 people had been arrested -- among them foreign nationals from India and Cameroon. To try to stop the thefts, Johannesburg metro police in Septem-ber created a specialised copper crime-busting unit.

America’s passenger carriers have discovered that it’s getting more expensive to run an airline these days.

While summertime profits were fine, and travel demand remains robust, a number of airlines are facing higher bills from a variety of factors: labor con-tracts, significant airport renovation projects, technology spending and fleet upgrades. The increase in expenses is creeeping into 2018 and threatens to spoil higher revenues just as executives are crowing about how they will keep fares up for the holidays.

Note the absence of the usual culprit in these matters—fuel. While it’s pricier today relative to 2016, jet fuel expenses still rep-resent roughly the same burden for all carriers (though spot prices have gained 24 percent over the past year). That’s one rea-son investors typically exclude fuel from the industry’s standard spending measure, cost per available seat mile.

The real issue causing investor angst is how much non-fuel costs will increase in 2018. As of April, the industry’s four largest players were all operating under new con-tracts with their pilots and flight attendants.

The higher expenses from these pacts had been viewed as largely a cost event for 2017, said Joseph DeNardi, an equity ana-lyst with Stifel & Co. “I think the expectation was that once you got through this year, where costs are elevated, the trend should improve next year,” he said. But that hasn’t been the case, a fact DeNardi said has been a “disappointment” for Wall Street.

“Legacy carriers still have very high costs, and consolidation didn’t really improve the cost structure”

Higher costs hinder airlines’ ability to boost profits, even if fuel costs were to remain stable and passenger revenues rebound from higher ticket prices. Inves-tors knocked 12 percent off of United Continental Holdings shares on October 19, in part because executives declined to offer any insight about the company’s cost or growth outlook for next year.

“We are … deep in the middle of this stuff,” United Chief Executive Oscar Munoz said on his now famously testy call with ana-lysts, explaining that his team was taking “a very different approach” to its planning for 2018 and required more patience from investors.

A similar scenario—with accompanying stock declines—played out with American, Alaska Air Group Inc., JetBlue Airways Corp., and Southwest Airlines Co.—all of which are facing cost pressures in the coming year. The five carriers are closely managing their capacity growth in 2018 and expressed opti-mism that a spate of fare skirmishes is drawing to a close.

“The reality is that legacy carriers still have very high costs, and consolidation didn’t really improve the cost structure,” Spirit Airlines Inc. CEO Bob Fornaro told analysts Oct. 26 on a quarterly earnings call. “It improved the networks, but the costs are going higher.”

For its part, Spirit is facing higher com-pensation expenses for its 1,500 pilots who have been negotiating a new contract for more than two years. JetBlue is in the same position, while Alaska Air is in binding arbi-tration with pilots as it seeks a joint contract to cover work groups at both Alaska and its new Virgin brand. The Seattle-based airline has also had trouble this year finding enough pilots for its regional carrier, Horizon Air, which led to reduced flying.

“In an industry that took so much away from its employees … of course once they were earning billions of dollars in net

profits again they were going to have to give some of that back,” said Seth Kaplan, man-aging director of trade journal Airline Weekly.

Beyond labor, much of this anticipated spending is company specific: Alaska is deep in the expensive throes of its merger with Virgin America; Southwest is shelling out for US certification to begin flying its Boe-ing 737s to Hawaii; United is attempting a technology overhaul of its revenue man-agement while also flying additional high-cost 50-seat regional jets to feed its hubs.

Major airport renovations are also occurring nationwide, including large projects in New Orleans, Los Angeles, Orlando, New York and Seattle. Such civic investments translate to higher costs for air-lines (and passengers).

“It has become evident for most carri-ers that cost control is tougher as broader inflation is taking its toll,” Morgan Stanley analyst Rajeev Lalwani said in a note Fri-day. Unit costs excluding fuel likely will be up 1 to 2 points next year versus expecta-tions of unchanged to up 1 percent, he said.

Luca Casiraghi, Sonia Sirletti and Alastair Marsh Bloomberg

The European Central Bank is examining UniCredit SpA’s land-mark bad-loan sale of €17.7bn ($20.6bn) to

assess if the price the bank reported is inflated by fees that should be stripped out, according to people familiar with the matter.

Some of the commissions the Italian bank will pay to the buyers to manage the loans over coming years could affect the price, the

people said, asking not to be identified because details of the transaction are private. In a filing in January, UniCredit indicated that it agreed to sell a majority of the loans at an average price of about 13 percent of gross book value, a figure that is now in dispute, the people said. The lender has yet to remove the loans from its books, they said.

A lower price for the trade could lead to higher provisions than UniCredit has already made for the sale, potentially impacting the bank’s capital.

Chief Executive Officer Jean Pierre Mustier took over running the bank in July 2016, when the ECB was pressuring Italian lenders to offload bad assets. Mustier began tackling the bad-loan pile with this sale to Fortress Investment Group and Pacific Investment Management Co., in an initiative dubbed Project FINO, an acronym for ‘failure is not an option.’ He also tapped investors for €13bn of new

capital earlier this year to help cover for losses that stemmed from the disposal, a key component of the bank’s turnaround.

“The news is negative as the CEO could lose credibility which is the real main pillar of UniCredit’s business plan,” Fabrizio Bernardi, an analyst at Fidentiis Equities, wrote in a note.

“These big NPL transactions, which are more and more popular, highlight the need for a more efficient and transparent market that shows, among others, the difference between paid fees and the intrinsic net value of the loans sold,” said Emanuele Vizzini, who helps manage more than 4 billion euros as chief investment officer at Investitori Sgr in Milan, an Italian wealth management unit of Allianz SE. A spokesman for UniCredit declined to comment, reiterating that the bank said in July it was planning to reduce its stake in the debt, which it has securitized, to less than 20 percent by the end of

the year. An official from the ECB declined to comment.

Bad loan transfers by banks often include fees payable to buyers for managing the assets. In this case they’re drawing regulatory scrutiny because they may be excessive for the services provided, said the people.

Confidence had been returning to the Italian banking industry after UniCredit’s capital raising, the rescue of Banca Monte dei Paschi di Siena SpA -- a onetime pillar of the financial establishment brought to the edge of ruin by bad loans and poor management -- and the takeover of two troubled banks in Italy’s Veneto region. The rescues were seen as an opportunity to reboot a banking industry plagued by lax underwriting and problem loans. “This could be a step back for UniCredit’s recovery path and the whole Italian banking system in general,” should the disputed figures prove true, said Jacopo Ceccatelli, CEO of Marzotto SIM

SpA, a Milan-based broker-dealer. “This is a situation that must be monitored.”

UniCredit’s loan loss provisions in the third quarter declined to 598 million euros from €977m a year earlier, the bank said earlier this month.

Still, some investors have expressed renewed caution about the Italian banking system -- saddled by €318bn of soured loans, or a third of Europe’s total -- because of new ECB proposals requiring banks to provision against the entire potential loss on newly-classified nonperforming loans after two years, if they’re not backed by collateral. The central bank has promised to publish plans for existing bad loans, including “appropriate transitional arrangements,” by the end of the first quarter. Italian banks may face higher loan-losses and could be discouraged from lending as a result.

Johannesburg caught up in copper cable warfare Lianting Tu and Carrie HongBloomberg

Higher costs: Fat years for US airlines come to an end

Justin Bachman Bloomberg

The real issue causing investor angst is how much non-fuel costs will increase in 2018. As of April, the industry’s four largest players were all operating under new contracts with their pilots and flight attendants.

Bad loan transfers by banks often include fees payable to buyers for managing the assets. In this case they’re drawing regulatory scrutiny because they may be excessive for the services provided.

UniCredit $20.6bn bad-loan sale said to draw ECB review

BUSINESS VIEWS 27TUESDAY 31 OCTOBER 2017

28 TUESDAY 31 OCTOBER 2017BUSINESS

BACK TO BUSINESS

Everyone’s a metals bull as economic engine fires up

sight

Bloomberg

Global growth is on a tear, and that can only be pos-itive for metals prices.

That’s the message com-ing from the industry ahead of LME Week. For the first time in years, optimism is widespread among traders, smelters, miners and brokers gathering in London, buoyed by a combination of strong growth across the world’s key demand centers, supply curbs in China and a return of investor interest.

“The global economy looks much better than it has done probably since the cri-sis, maybe before that,” said Saad Rahim, chief economist at Trafigura Group Pte, the second-largest metals trader. “I’m pretty bullish.”

The upbeat mood shows how much has changed in two years, when the com-modities collapse brought the titans of mining to their knees. In September 2015, Glencore Plc was forced to raise money when its stock was cratering, an effort to sooth investors frightened by a staggering debt load. Now, the mining giant has regained its swagger, reap-ing profits and inking deals worth billions for natural resource assets around the world. On Monday, the com-pany raised its profit forecast for its trading division, citing strong third-quarter performance.

Industrial metals have rallied sharply since the mid-dle of the year. Copper is approaching $7,000 a

metric ton, zinc topped a decade high and aluminum has jumped almost 30 per-cent this year. With that backdrop, macro hedge funds -- once major players on the London Metal Exchange -- are beginning to look again at metals mar-kets, according to brokers.

“Investor appetite has been increasing for metals since late summer,” said Sid Tipples, co-head of metals at JPMorgan Chase & Co.

Volumes on the LME have picked up, hitting the highest level since 2015 in September. Matthew Cham-berlain, chief executive of the exchange, suggested there’s further room for growth.

“Before the funds are actually in the markets, they’re working out the best entry strategy and getting ready, and that certainly seems to be the mood music in the market,” he said in an interview.

For the first time in years, the outlook for global met-als demand doesn’t hinge solely on China. Manufactur-ing in the euro-area is growing at its fastest pace since at least 2014.

Metals demand in Europe is picking up on the back of rising demand from the con-struction and automotive sectors. Codelco, the world’s largest copper producer, raised the premium it charges to deliver metal to European customers for the first time in four years. Fore-casters including Bank of China International see fur-ther gains for base metals in a period of synchronized glo-bal growth.

Capital Comment

GS (Goldman Sachs) still investing in our big new Euro headquarters here (London). Expecting/hoping to fill it up, but so much outside our control.

Lloyd Blankfein , Goldman Sachs Chairman and CEO

Where is global growth happening?

New York Bloomberg

In North America, an epic ski season is coming; you’ll soon need some sort of transportation to snow.

Whether it’s trekking up to your local ski hill, ventur-ing off-piste in Alaska, or doing a group snowboard trip in Swit-zerland, the kind of car you use matters.

It’s got to be rugged enough to handle ice, sleet, and sludge—but comfortable enough to cosset you after a long cold day on the mountain. And it’s got to have plenty of room—ski boots and coats and hats and scarves don’t store themselves.

So here is a rundown of this year’s best cars, in each key seg-ment, for a ski trip. They’re each steady enough to carry on through January’s worst storm, and then some. You may even find one or two that do it in real style. Happy trails.

Small SUV: Porsche Macan GTS

There’s a reason why the Macan is Porsche’s bestseller, outselling even the bigger Cay-enne and more iconic 911. It combines a plucky 360hp engine

with nimble sport steering and an AWD on adaptive “traction management” suspension well-suited for inclement weather.

Large SUV: Bentley Bentayga

Here is the primo* big rig you want to cosset you in wood-and-leather warmth as you traverse the most precarious inclines. It has a massive 600-horsepower W12 engine on an all-wheel-drive and eight speeds for expertly parsing the exact gear needed as you cross through snow and ice.

The real appeal for skiiers, though, is in the back seat, where quilted leather, thick carpeting, heated seats, rear entertainment, and surround sound will make it better than a ski lodge as a haven from the cold. Between the tall side windows, large sun-roof, and high ride-height, the Bentayga affords what can be spectacular views when you take the scenic route.

Sports Car: Porsche 911Nope, this is not a joke. Por-

sche 911s are great in the snow; the brand even offers snow-driving courses in its most iconic model. If you can splurge, choose the $162,000 911 Turbo, w h i c h c o m e s w i t h

all-wheel-drive, sport-chrono paddle shifting, and driving sys-tems such as active suspension management and torque vector-ing, which allow for maximum grip and control on slick roads.

What’s more, Porsche offers highly technical winter wheel and tire sets, snow chains, and skiboard and snowboard racks. Sedan: BMW M760i

This $156,495 sedan com-bines the sport performance of BMW’s superior M line with the largess and comfort of a true town car. It has a V12 engine that beats even the V8 in the athletic BMW B7 Alpina. Combined with an eight-speed AWD and a spa-cious and well-appointed back seat big enough to accommodate tired skiers with bulky boots, coats, and scarves, the M760i in fact beats pretty much every other car out there. It is pre-ferred even, as noted in this r e v i e w , t o t h e segment-dominant

Wagon: Volvo V90 Cross Country

For the money, the value, performance, safety features, and reliability of a Volvo is dif-ficult to beat. That principal applies to cold-weather driving as well. The $55,300 has a

massive back seat and trunk space over AWD and a suspen-sion well-suited to driving down treacherous roads.

The inline four-cylinder engine comes turbocharged and supercharged for 316 horse-power. This version offers several inches’ worth of addi-tional ground clearance over the standard V90—perfect for snow clearance—and lots of handy extras that help in dark, snowy climes.

Gran Tourer: Ferrari GTC4Lusso

This is the four-seat grand tourer from Ferrari. But you already knew that—it’s the one that looks weird at first glance. The thing is, it’s surprisingly functional; Ferrari made it spe-cifically as an answer to its devoted owners who own sev-eral other Ferraris but need one to take to their winter homes. It has a massive V12 engine that gets 680 horsepower, but the really brilliant thing about it is how it controls that power: All-wheel drive, a perfectly balanced weight ration, and four-wheel steering allow it to navigate squirrely conditions gripping the road like a vice. This is not the Ferrari for drifting.

Perfect cars to take on a ski trip

Brent tries new trading range as funds stay bullishLondon

Reuters

Hedge funds have added to bullish positions in oil and most refined prod-

ucts even as prices hit their highest since 2015, in a sign investors expect prices to move into a higher range.

Hedge funds and other money managers had accumu-lated bullish long positions in crude, gasoline and heating oil totalling 1.189 billion barrels by October 24, according to regu-latory and exchange data.

Portfolio managers have increased long positions in the five main petroleum contracts by almost 374 million barrels (46 percent) since the end of June and the number of paper barrels now comfortably exceeds the previous peak set in February.

From a pure positioning per-spective, the concentration of long positions has become a sig-nificant source of downside risk to prices in the event funds

attempt to realise some profits.Nonetheless, managers have

continued adding to rather than reducing their positions, which strongly suggests many inves-tors see oil prices moving into a new and higher range.

For the last 16 months, Brent prices have been trading in a range of about $45 to $55 per barrel, with hedge funds alter-nately buying and shorting the market when prices move towards the extremes.

But hedge fund managers amassed a near-record net long position of 507 million barrels in Brent by October 24 even as prices were on their way to breaking through the $60-mark for the first time since 2015.

Sentiment towards Brent remained overwhelmingly bull-ish, with long positions outnumbering short ones by a ratio of 9.48:1, the biggest imbal-ance for eight months. Fund managers held 567 million bar-rels of Brent long positions, just 11 million below the record set at the end of September.