BUSINESSBUSINESSTuesday 10 October 2017

Michel Ouellette (left), Bombardier Senior Vice-President, Global 7000/8000 programme and David Coleal, Bombardier Business Aircraft President in front of Bombardier’s new Global 7000 business jet during the National Business Aviation Association conference at the Henderson Executive Airport in Henderson, Nevada, the US.

Aviation association conference

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Oil prices stable after Opec hints

possible action

Qatar Chamber joins WTO global trade forum

Dow & Brent before going to press

Blockade has no impact on Qatar gas exports: IMFSatish Kanady The Peninsula

International Monetary Fund (IMF) has officially announced that the Arab quartet country’s more than four-month old blockade

against Qatar has not affected the country’s energy exports. The diplomatic rift has not impacted global liquefied natural gas mar-kets, as Qatar continued its export, the Fund stated.

“The diplomatic rift between Qatar, the world’s largest exporter of liquefied natural gas, and several other countries in the region, including Saudi Arabia, has not affected liquefied natu-ral gas markets, as Qatar’s exports have continued”, IMF said in its October 2017 ‘World Economic Outlook’ (WEO) released yesterday.

The IMF document noted the natural gas price index—an aver-age for Europe, Japan, and the

United States—decreased by 9.6 percent from February to August 2017. The decline was mostly tied to seasonal factors and robust supply from the United States and Russia, and lower oil prices, which some natural gas prices are indexed to.

The IMF’s Primary Commod-ities Price Index declined by 5 percent between February and

August 2017. Some of the biggest price drops were among fuels. Oil prices fell by 8.1 percent between February and August, even as the Organization of the Petroleum Exporting Countries (Opec) and some non-Opec oil exporters announced in May that they would extend oil produc-tion cuts through the first quarter of 2018. The main drivers of lower prices were higher-than-expected US shale production and stronger-than-expected production recoveries in Libya and Nigeria. In addition, exports from Opec countries remained at relatively high levels, even with lower production. Follow-ing some strengthening in recent weeks, oil prices stood at about $50 a barrel as of late August, still lower than in the spring.

The Fund’s commodity price index is expected to increase by 12.3 percent in 2017 from its average in 2016, and then fall slightly again in 2018, by 0.1

percent. After averaging $43 a barrel in 2016, oil prices are expected to average $50.3 a bar-rel in 2017 (down from $55.2 a barrel in the April 2017 WEO), and stay at about that level in 2018. Nonfuel commodity prices are expected to strengthen in 2017–18 from their 2016 aver-ages because of stronger demand for metals from China, tight supply conditions for food, and a general pickup in global demand. Looking further ahead, futures markets point toward a slight rise in commodity prices by 2022.

According to the updated WEO, the global growth is pro-jected to increase from 3.2 percent in 2016 to 3.6 percent in 2017 and 3.7 percent in 2018—an upward revision of 0.1 percentage point for both 2017 and 2018 relative to April. Eco-nomic activity is projected to pick up speed in all country groups except for the Middle

East, and forecasts of the strength of the outlook by region have changed only modestly.

In the Middle East, North Africa, Afghanistan, and Paki-stan, growth is projected to slow significantly in 2017 to 2.6 per-cent (from 5.0 percent in 2016). In 2018, growth is expected to increase to 3.5 percent, mostly reflecting stronger domestic demand in oil importers and a rebound of oil production in oil

exporters. In Saudi Arabia, although non-oil growth is expected to strengthen some-what this year, overall output is expected to be broadly flat as real oil GDP declines as a result of the commitments under the extended Opec agreement. In 2018, growth is projected to increase to 1.1 percent, reflect-ing an increase in oil output associated with the expiration of the Opec agreement.

Moody’s assigns (P)A2 to QIIB’s sukuk programThe Peninsula

Moody’s Investors Service has assigned provisional (P)A2 senior unsecured

long term ratings (foreign and local currency) to the $2bn trust certificates program of QIIB Sen-ior Sukuk Limited (“the Issuer”), a special purpose vehicle incor-porated in the Cayman Islands by Qatar International Islamic Bank.

The (P)A2 ratings assigned to the trust certificates are at the same rating level as the A2 long-term issuer ratings of QIIB. The proceeds of the sukuk certificates

will be used by the Issuer to acquire a beneficial interest in a portfolio of Shari’ah compliant assets.

These sukuk assets will form part of ‘Wakala’ and ‘Mudaraba’ portfolios which will be managed by QIIB as Servicing Agent and ‘Mudarib’, respectively on behalf of the Issuer (acting as Trustee for the Certificate holders). QIIB will collect income against the rele-vant periodic distribution amounts due for each series. If there is a shortfall between the amounts collected and the aggre-gate periodic distribution

amounts due, then QIIB, as Serv-icing Agent, will pay further amounts to remedy such short-fall to avoid a dissolution event; however, a failure to pay such amounts to remedy the shortfall would lead to a payment default. In such a case, early redemption would be triggered resulting in QIIB to pay both the principal and profit amounts outstanding under the Certificates akin to other senior unsecured obliga-tions of the bank.

Moody’s issues provisional ratings in advance of the final sale of certificates, but these ratings

only represent Moody’s prelimi-nary credit opinion. Upon a conclusive review of the transac-t i o n a n d a s s o c i a t e d documentation, Moody’s will endeavor to assign definitive rat-ings to any issuance of certificates. A definitive rating may differ from a provisional rating.

Moody’s has aligned the (P)A2 assigned to the trust certifi-cates with QIIB’s A2 long term issuer ratings. Therefore, the rat-ings on the trust certificates will move in tandem with QIIB’s issuer ratings.

QIC emerges as ‘Top Investment House’ in Mena regionThe Peninsula

Qatar Insurance Company (QIC), the leading insurer in the Middle East and

North Africa (Mena) region has been recognised as the ‘Top Investment House’ during a survey conducted by The Asset magazine in collaboration with Benchmark Research.

The survey ranked top investment houses in Asian G3 bonds (issued by Asian issuers in US dollar, euro and Japanese yen) based on the number of votes won by their investors.

More than 290 different institutions, including asset managers, hedge funds, private banks, banks and insurance companies/sovereign wealth funds were evaluated and shortlisted during the survey.

The ranking methodology used for the survey was based on the number of votes received from top-rated analysts, econ-omists and strategists, salespeople and traders for investors in these institutions. In addition, the ranking score was also subject to a weighting methodology, which was deter-mined by the rating of the individual casting the vote for the investors.

Commenting on the latest accomplishment, Khalifa Turki

Al Subaey (pictured), Group President and CEO of QIC Group, said: “We are honored to be named as the Top Invest-ment House from the Mena region. The prestigious ranking serves as a testament to the resounding success of our busi-ness strategy built along a customer-centric and techno-logically progressive approach, ably backed by the investments team.”

“Investments are a corner-stone for the success of our business. Not only does this showcase the goodwill and rep-utation that QIC has built over the years of its operation, but also brings to the fore our pas-sion and commitment in maintaining our status as a market leader in the insurance-and investment management space,” Khalifa added.

The IMF’s Primary Commodities Price Index declined by 5% between February and August 2017.

Price index

IMF’s commodity price index is expected to increase by 12.3% in 2017 from its average in 2016, and then fall again in 2018, by 0.1%.

US EPA chief to sign CleanPower Plan exit ruleTHE head of the US Envi-ronmental Protection Agency said yesterday he would sign a proposed rule today to begin withdrawing from the Clean Power Plan, former President Barack Obama’s centerpiece regulation to fight climate change.

Green groups criticised yesterday’s announcement and praised the plan, a col-lection of emissions standards for US states that the Obama administration imposed to reduce pollution from power plants, the largest emitters of greenhouse gases, by 32 per-cent below 2005 levels by 2030.

7,507.89-14.980.20%

22,772.15-1.52

0.01%

FTSE100DOW

$49.65 $49.65 +0.36+0.36

BRENT

8,212.86+75.29 PTS

0.93%QE

22 TUESDAY 10 OCTOBER 2017BUSINESS

Qatar Chamber joins WTO global trade forum

The Peninsula

Qatar Chamber (QC), in close cooperation with global trade agencies, including the the Inter-national Chamber of

Commerce (ICC) and WTO World Trade Organization (WTO), has been working for years to facili-tate international trade to achieve the objectives in line with Sustain-able Development Goals and World Trade Agenda, a senior offi-cial of QC told the audience at event in Switzerland.

QC and ICC-Qatar as part of

their efforts in facilitating and strengthening trade around the world, participated in this year’s WTO Public Forum entitled “Trade: Behind the Headlines” held in Geneva recently.

The Forum provided a plat-form for engagement and deliberation on how trade and the WTO can contribute to attaining the Sustainable Development Goals, how the benefits of trade can be shared more widely among countries, businesses and individ-uals and how best to tackle the challenges of the changing trade landscape.

The event was attended by a Qatar Chamber and ICC-Qatar delegation headed by Sheikha Tamader Al Thani, Director of International Relations and Cham-bers Affairs at QC.

The session entitled “Building for success: A world trade agenda for the Buenos Aires Ministerial,” was organised on the third and last day of the Forum under the World Trade Agenda (WTA), a joint ini-tiative by ICC and Qatar Chamber, which mobilises global business

to help governments set key mul-tilateral trade negotiation priorities to ease trade facilitation and con-tribute to economic growth and job creation. The session presented the newly launched WTA report under the same name which dis-cusses the urgent needs for more liberalisation and better rules in global trade including what WTO Members should focus on in the period before and after the upcoming WTO Ministerial Con-ference, taking place in Buenos Aires, Argentina in December 2017.

Sheikha Tamader said: “Qatar Chamber was keen to participate

at the WTO Public Forum through the World Trade Agenda Initiative, due to the importance of this con-ference in charting the needed directions to facilitate world trade”, adding that QC has already launched, in cooperation with the International Chamber of Com-merce (ICC), the World Trade Agenda (WTA) initiative, which seeks to assist governments in identifying priority fields in trade, and that, last March, it launched the WTA “Building for Success” report, which included several key proposals that can contribute to strengthening trade around the world”.

Sheikha Tamader stressed that “Qatar Chamber is, since the Doha Negotiation Round held in Doha in 2001, exerting great efforts in order to facilitate inter-national trade”. Doha succeeded at the time in hosting this pres-tigious international meeting.

She also praised the close cooperation between Qatar Chamber and the ICC, which resulted in several initiatives, including the World Trade Agenda initiative, whose recom-mendations contributed to the conclusion of a historic treaty to facilitate world trade at Bali, Indonesia, in 2013.

Sheikha Tamader pointed that Doha will host, next year, the World Trade Agenda Day, to dis-cuss the challenges and opportunities facing business leaders, and to evaluate the role of the private sector in suggest-ing concrete proposals to that end. “Building for Success” argues that the WTO Members should respond to current challenges with renewed action, deploying better defences against protec-tionism and crafting actions that would have a meaningful impact on trade and economic growth—especially in the area of digital trade policy.

ASTAD signs MoU with Qatar Society of EngineersThe Peninsula

ASTAD signed a Memoran-dum of Understanding (MOU) with the Qatar Soci-

ety of Engineers (QSE) to identify mutual business opportunities in research, training and development.

The MOU was signed on behalf of ASTAD by Abdulaziz Al Mulla, Chief Commercial Officer and Ahmad Jassim Al Jolo, QSE Chairman during a conference organised by the Qatar Society of Engineers (QSE) titled ‘Building Capabilities in Engineering’ at the Intercontinental Doha Hotel on October 3, 2017.

The agreement lays the groundwork for bilateral coop-eration that aims to boost professional engineering devel-opment throughout Qatar.

“We aim to support QSE’s local initiatives that includes engineering specialised confer-ences, awareness seminars, activities, training courses and the establishment of an engineering magazine specialised in QSE’s activities,” said Ali Al Khalifa, ASTAD Chief Executive Officer.

“This reflects our continued advocacy for achieving excellence in engineering for the State of Qatar. ASTAD and QSE are well

versed and highly experienced within the field of engineering and this MoU will support its con-tinued progression and advancement.”

QSE Chairman Ahmad Jassim Al Jolo, said the QSE uses inno-vative engineering practices to successfully contribute towards the urban development of Qatar. “This MoU is a stepping stone that will further enhance collabora-tion between both firms. It reiterates our commitment to enriching relations and seizing n e w o p p o r t u n i t i e s

and partnerships for the Qatari engineering field and supports our aim to build the spirit of coop-eration between engineers which will contribute to urban and industry development in Qatar and ultimately, raise the stand-ards of engineering in all sectors.”

During the conference, ASTAD Chief Human Capital and Shared Services Officer, Nasser Al Hajri, delivered a presentation that shed light on ASTAD’s train-ing and development programmes that aim to support

new graduates by providing them with the necessary skills and experience in the construction and project management sector.

He discussed ASTAD’s early integration of sustainability into the training which provides insight into the economic, social and environmental value of sus-tainable buildings. The conference promoted the devel-opment of engineering practices in Qatar and highlighted the dif-ferent roles that all parties play in its growth.

JRE honoured at 2017-18 Arabian Property AwardsThe Peninsula

Just Real Estate (JRE), the lead-ing property service provider in Qatar, was recently recog-

nised for its commitment to developing the real estate land-scape by collecting a top award at the 2017-2018 Arabian Prop-erty Awards.

JRE was honoured with the award for ‘Best Commercial High-Rise Development – Qatar,’ Arabian Property Awards, for ‘THE e18hteen’, a state-of-the art commercial tower, which offers cutting-edge office space for businesses and their employees and is cur-rently under development in the Lusail Marina area.

“Just Real Estate has evolved immeasurably in a short time since our formation in 2016 and to be honored with this award is further demonstration of how our reputation has grown not just domestically and regionally, but also on a global scale” said JRE Chairman, Nasser Al Ansari.

“The experience and dedi-cation of our focused team

ensures we can adapt to chang-ing trends and market dynamics and ‘THE e18hteen’ is a perfect representation of our capabili-ties to keep pace with the evolving needs of our clients and partners. The real estate market is extremely competi-tive, so to be awarded in this category is a fitting tribute to the hard work of all involved in this bold project and our wider strategy and approach as a business.”

‘THE e18teen’ is a state-of-the-art, futuristic commercial tower situated on the edge of the Lusail Marina district, and represents a home away from home for business owners and their employees.

The 36-storey building, which has just reached a con-struction milestone with completion of the 15th floor, will feature versatile, customisable office space in a range of sizes to enable business owners and tenants to create an office that perfectly suits their needs.

THE e18hteen perfectly meets the modern desire for

better work-life balance with amenities in the ultra-m o d e r n b u i l d i n g including retail outlets, restau-r a n t s , a fully-equipped gym and an executive club. The innovative commercia l skyscraper is scheduled for completion in the first quar-ter of 2019.

Doha Bank launches ‘NRI Home Loans’ in Qatar & KuwaitThe Peninsula

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

announced the launch of its new ‘NRI Home Loans’. The first of its kind mortgage product, availa-ble for Non-Resident Indians (NRIs) and Persons of Indian Ori-gin (PIOs), offers attractive rates of interest and a longer tenure.

On the occasion, Dr R. Seetharaman Doha Bank Group CEO has said: “This is another first for Doha Bank in Qatar and Kuwait. All our NRI customers can enjoy best in class service, as they can now get a Home Loan

for India through a seamless approval process while being based here in Qatar or Kuwait as a valued Doha Bank customer.“

He continued: “We have streamlined our efforts at Doha Bank to ensure a first class bank-ing experience for all our Non Resident Indian customers bank-ing with Doha Bank in Qatar and Kuwait while buying the house to call home in India. The Home Loan is premeditated to help Indian Expats undertake the best investment option to ensure a safe, comfortable retirement.”

As part of the NRI Home Loans, Doha Bank customers can finance their new and resale flats

with the housing loan, which will have a maximum tenure of up to 20 years. In addition, borrowers can get attractive loan to value, with the loan amount up to INR50m. The NRI Home Loan comes with lucrative interest rates and customers can choose between fixed and floating inter-est rate options. Other benefits of the loan include doorstep serv-ice in India till the disbursement and insurance cover for the loans at a desirable premium.

“We are very excited to announce the launch of the Doha Bank NRI Home Loans featuring attractive benefits for Indian cit-izens living abroad. With Doha

Bank being the leading banking partner of the Indian expatriate community, it is among our key responsibilities to support their financial needs and aspirations, and the new product is a natu-ral outcome of this vision,” said Frank Hamer, Chief Interna-tional Banking Officer at Doha Bank.

“Our network of branches servicing NRI customers in Qatar, Kuwait and in Mumbai, Kochi and Chennai in India ensures that our customers can benefit from a simple and easy banking experience at a location convenient to them, and make the most of the new housing loan

program, and other services we offer,” Hamer added.

“Home ownership is among the most important personal goals of a large segment of the Indian community living abroad owing to the sense of security it provides. At Doha Bank, we enjoy a long-standing relationship with the Indian community, and have come to understand their needs and challenges very closely. Our new NRI Home Loans proposi-tion addresses their long-term aspirations while providing an easy and convenient way to secure their future,” said Gul Khan, Chief Retail Banking Officer at Doha Bank.

Abdulaziz Al Mulla (left), Chief Commercial Officer, ASTAD and Ahmad Jassim Al Jolo, QSE Chairman sign MoU aimed at boosting professional engineering development in Qatar, at Intercontinental Doha Hotel.

Panellists at the session entitled ‘Building for success: A world trade agenda for the Buenos Aires Ministerial,’ organised by Qatar Chamber, as part of the WTO Public Forum held in Geneva, Switzerland.

Trade Agenda Day

Doha will host, next year, the World Trade Agenda Day, to discuss the challenges and opportunities facing business leaders, and to evaluate the role of the private sector.

Putin to meet German firms’ executivesMoscow

Reuters

Russian President Vladimir Putin will meet a repre-sentative of Siemens along

with businessmen from other German firms on Thursday, Kremlin aide Yuri Ushakov said yesterday.

Siemens said earlier this year it was reviewing aspects of its dealings with Russia after four of its power-generating turbines were delivered to Crimea, which is subject to European sanctions on technology supplies after Russia annexed the area.

“This meeting is being arranged on the initiative of the

Eastern Committee of the Ger-man Economy,” Ushakov said. The meeting will take place in Russia’s Black Sea resort of Sochi. Around 20 representa-tives of big German firms working on the Russian market, including Siemens and Nord Stream, will take part in the meeting, TASS said.

Iraq-ExxonMobil talks on southern oilfields project reach final stagesBaghdad

Reuters

Iraq’s talks with United States oil major Exxon Mobil to develop a multi-

billion-dollar project to boost output from several south-ern oilfields are nearing completion, the country’s oil minister Jabar Al Luaibi said yesterday.

“Talks are in advanced final stages with Exxon to develop and finance the important south project,” Luaibi told reporters after a meeting with an Exxon del-egation in Baghdad.

The enhanced recovery project targets the Luhais, Nassiriya, Tuba, Nahr Bin Umar and Artawi oilfields.

Iraq, OPEC’s second-largest producer, had approached PetroChina and Exxon Mobil about investing in theproject, Iraqi officials have said.

23TUESDAY 10 OCTOBER 2017 BUSINESS

Oil prices stable after Opec hints possible actionAmsterdam

Reuters

Oil prices stabilised yesterday after one of the most bear-ish weeks in months, propped

up by Opec comments signal-ling the possibility of further action to restore market bal-ance in the long term.

Oil production platforms in the Gulf of Mexico started returning to service after Hur-ricane Nate had forced the shutdown of more than 90 per-cent of crude output in the area. The prospective restarts kept price gains in check.

“Oil is having trouble to find direction. Mixed signals keep investors busy changing their minds,” said Hans van Cleef, senior energy economist at ABN Amro.

“There is a good chance that we will continue to trade a bit sideways in the coming weeks up to the Opec meeting.”

The Organization of the Petroleum Exporting Countries is due to meet in Vienna on November 30, when it will dis-cuss its pact to reduce output in order to prop up the market.

Opec Secretary-General Mohammad Barkindo said on Sunday that consultations were under way for an extension of the agreement beyond March 2018 and that more oil-produc-ing nations may join the pact, possibly at the November meet-ing. He also said Opec members and other producers may have

to take some “extraordinary measures” to ensure the mar-ket is in balance in the long term. In a speech provided for the Reuters Global Commodi-ties Summit this week, Barkindo said he saw clear evi-dence the oil market was rebalancing. Global benchmark Brent crude was flat at $55.62 a barrel at 1353 GMT. Earlier in the session it touched a three-week low of $55.06. It ended last week 3.3 percent lower, its biggest weekly loss since June 2016.

US West Texas Intermedi-ate crude futures were trading at $49.53, up 24 cents. They came close to a four-week low when they fell to $49.13 earlier in the session. WTI’s losses last week came to 4.6 percent.

Money managers raised their bullish bets on US crude futures for the third week in a row, the US Commodity Futures Trading Commission reported on Friday. However, data pub-lished by InterContinental Exchange showed investors had slightly reduced their bets on rising Brent prices in the week ending October 3.

Production

Oil production platforms in the Gulf of Mexico started returning to service after Hurricane Nate had forced the shutdown of more than 90% of crude output in the area.

Britain’s Home Secretary Amber Rudd (second left), Parliamentary Under Secretary of State for Crime, Safeguarding and Vulnerability, Sarah Newton MP (left), BT CEO Gavin Patterson (second right) and Burberry CEO Marco Gobbetti (right), during the first Business Against Slavery forum, at Lancaster House in London, yesterday.

Business Against Slavery forum

Sterling bounces back after May hints at reshuffleLondon

Reuters

Britain’s pound rose almost 1 percent yesterday, rebounding from its big-

gest weekly drop in a year, after British Prime Minister Theresa May (pictured) said she would resist challenges to her leadership.

May hinted at the weekend that she may be considering a cabinet reshuffle to reassert her authority, raising questions over the fate of foreign minister and Brexit campaigner Boris John-son, who has been accused of undermining her.

Sterling rose 0.9 percent to $1.3180 -- recovering from the 2.5 percent it lost last week—and was the biggest gainer among major currencies against a broadly muted dollar.

It also rose 0.8 percent to 89.08 pence per euro. The pound has become more sensitive to political noise in recent months and some strategists said John-son’s departure, if it happens, could increase the chances of a “soft Brexit”, which might be positive for sterling in the short

term. Speculative investors, meanwhile, turned more posi-tive on the pound in the week to Oct. 3 than at any time since Sep-tember 2014, according to data from the Commodity Futures Trading Commission.

Patel said this long position-ing was the result of heightened expectations the Bank of Eng-land will raise interest rates soon. May is expected to give British lawmakers a bullish prognosis for negotiations over the exit from the European Union on Monday, but will tell them that it is up to Brussels to make the next move.

But investors remain wary as to whether May will succeed in advancing towards a transi-tion deal. “The EU’s lack of willingness to begin talks over a new special relationship high-lights the need for the UK

government to prepare more intensively for a no deal scenario even if it is not the desired out-come,” warned currency analyst Lee Hardman in a note for MUFG. Last week’s losses had dragged down sterling from a June 2016 high of above $1.3650 hit in late September and erased all its gains sustained after the BoE signalled in mid-Septem-ber an interest rate increase was likely in the coming months.

On a trade-weighted basis, sterling fell on Friday to its low-est since mid-September.

Adding to sterling’s woes have been weak economic data releases pointing to tepid growth in Britain’s economy. Figures on Friday showed British economic productivity fell at its joint-fast-est annual rate since 2013 in the 12 months after the country voted to leave the EU.

China’s economic reforms should continue: ZhouCHINA should continue to open up its economy, reform its exchange rate system and ease capital account controls, Zhou Xiaochuan, governor of the country’s central bank, told Chinese business magazine Caijing in an interview.

Zhou said the timing of reforms is very important and that the window of opportu-nity should be seized when it opens, according to the inter-view published yesterday. Costs will rise if the opportu-nity for reforms is missed, he said. China had hoped the inclusion of the yuan in the basket on October 1 last year would attract overseas invest-ment and help stabilise the currency in the long run.

ECB stress test finds banks resilient to rising ratesFrankfurt

AFP

Most big eurozone banks are well braced for possible future interest

rate rises, the European Cen-tral Bank said yesterday after running dozens of them through a stress test.

On a scale running from a top mark of “1” to the lowest of “4”, 60 out of 111 banks scored “1” or “2” in the test, the ECB said.

For the first time, the stress test examined how sudden changes in interest rates would affect banks’ income and the value of their assets.

Of the other banks, 34 received a mark of “3” and 17 scored only a “4”.

On average, banks’ net

interest income would decrease 7.5 percent by 2019 if interest rates remained at their present historic lows.

But if interest rates were to rise by 2.0 percentage points, that would boost banks’ net interest income by 10.5 percent over the same period.

Nevertheless, higher rates could have the negative impact of eroding the value of the banks’ assets, making them less attractive.

The results of the stress test will help the ECB decide how large a capital buffer banks must set aside to help weather financial shocks.

The exercise also provided valuable insight into how banks model and manage risks related to changes in interest rates.

European stock markets diverge as traders track BrexitLondon

AFP

European stock markets were mixed yesterday as investors awaited a key

Brexit speech by embattled Brit-ish Prime Minister Theresa May.

The euro meanwhile held firm in the face of mounting pressure against Catalonia’s push to break away from Spain.

In Britain, May was expected to tell the European Union that “the ball is in their court”, as her divided government resumed Brexit negotiations in Brussels.

She would use a speech in the House of Commons to urge both sides to show “flexibility”

in seeking a deal on Britain’s withdrawal from the EU, her Downing Street office said.

Ahead of the speech, May was scheduled to meet the heads of leading British companies to discuss Brexit.

The pound was in recovery mode yesterday, making good some of the heavy losses it had sustained last week on rumours of a plot to oust May as Conserv-ative party leader amid bitter divisions over how the UK should plan its EU departure.

In Asia meanwhile, most stock markets started the week on a positive note, with Shang-hai returning from a week-long break with healthy gains as

traders looked past a surprise drop in US jobs.

Nevertheless, geopolitical tensions returned with another feared North Korea long-range missile test reportedly in the planning and US President Don-ald Trump suggesting that

talking to Kim Jong-Un’s regime was a waste of time and “only one thing will work”, although he did not say what that “thing” was.

“Whether it’s fears of another North Korean missile, Catalan secession, a US-Turkey visa spat, German coalition talks or Brexit, there’s plenty to keep markets amused,” said Accendo Markets analyst, Michael van Dulken (pictured).

With the Columbus Day hol-iday in the United States, trading on Wall Street was expected remain quiet, van Dulken said. The Dow gained a few points at the open.

“US stocks are ticking higher

in early action, on the heels of last week’s continued record high run on upbeat global eco-nomic data, showing some resiliency in the face of last week’s noisy labor report, as well as uncertainties regarding the political and monetary pol-icy fronts,” said analysts at Charles Schwab brokerage.

At the end of last week, the Dow and S&P 500 had retreated from earlier record highs as data showed the US economy lost 33,000 posts in September—the first drop since 2010.

Analysts noted that the drop was not as steep as expected and pointed to improving wage growth and a further dip in the

overall unemployment rate, sug-gesting that the data were likely distorted by factors related to the recent hurricanes that hit Flor-ida and Texas.

Meanwhile on Monday, Shanghai ended higher as inves-tors returned from the week-long Golden Week cele-brations and reacted for the first time to the Chinese central bank’s decision to cut the amount of cash banks must hold in reserve as part of a push to help small businesses.

Hong Kong retreated on profit-taking after ending Fri-day at a 10-year high. Tokyo, Seoul and Taipei were closed for public holidays.

China survey puts services growth at 21-month lowBeijing

Reuters

Activity in China’s services sector grew at its slowest pace in 21 months in Sep-

tember as new orders cooled, a private survey showed, blurring the picture of how the economy is performing heading into a key Communist Party Congress.

The findings of the Caixin/Markit survey reinforce views that China’s smaller companies are continuing to struggle, while large state-owned giants are apparently reaping most of the benefits from a year-long, gov-ernment-led construction boom.

However, many analysts believe China’s robust industrial rally cannot be sustained much longer, putting pressure on pol-icymakers to finds ways to energize the lacklustre private sector, which accounts for over

half of the country’s investment and jobs. The central bank threw a fresh lifeline to smaller firms last week in an attempt to redress that deep structural imbalance, offering an earnings booster to banks if they ramp up lending to more vulnerable sec-tors of the economy.

China is counting on growth in services, particularly high value-added services in finance and technology, to reduce the economy’s traditional reliance on heavy industry and investment.

But yesterday’s private sur-vey suggested many services firms are facing a bumpy ride.

The Caixin/Markit services purchasing managers’ index (PMI) fell to 50.6 in September, the lowest reading since Decem-ber 2015 and one of the weakest since the survey began in 2005.

A reading above 50 indicates

growth, and any lower signals contraction. The index had hit a three-month high in August.

To be sure, the private find-ings were in sharp contrast to official data which showed serv-ices activity expanded at the fastest clip since 2014 in Septem-ber. But an official factory survey showed a similar trend, with big companies seeing strong improvements in business con-ditions while smaller ones struggled to grow, exposing a key fault line underneath the rosy headline growth numbers.

Still, Capital Economics’ China economist Julian Evans-Pritchard, who has been among those predicting a broader slow-down, said it was too early to tell if the Caixin service survey pointed to a turning point just yet. Retail sales over the just-ended Golden Week holiday rose

10.3 percent from a year earlier, slowing but only slightly from the pace in 2016, data showed yesterday. “It is notable that there are signs of weakness in other parts of the economy and I do think services have softened a bit...I think we will see a slow-down in industrial production as well over the coming few months,” Evans-Pritchard said.

After China posted forecast-beating growth of 6.9 percent in the first half, analysts have said it was only a matter of time before it started to lose steam, especially as the government looks to contain the risks from an explosive build-up in debt, a campaign which is pushing up borrowing costs. Still, econo-mists expect September data to be released over the next few weeks could show a bounce in activity after a slightly softer August.

24 TUESDAY 10 OCTOBER 2017BUSINESS

The headquarters of the Spanish major highway operator Abertis in Barcelona. Spain’s stock market regulator authorised yesterday a bid by Italian infrastructure group Atlantia to buy Abertis.

Frankfurt

AFP

German stock market operator Deutsche Boerse said yesterday

that it would launch an “EU-based alternative” for some key financial transactions as it bids to snatch business from London after Brexit.

Its subsidiary Eurex has partnered with big interna-tional banks including Bank of America Merrill Lynch, Deutsche Bank and JP Mor-gan, hoping to attract more work in “clearing” — or guar-anteeing complex financial deals will be completed.

Yesterday’s announce-ment relates to “interest rate swaps”, which firms use to hedge against or bet on changes in interest rates. Clearing is one of the major battle lines being drawn between London and Euro-pean financial centres as Britain prepares to leave the European Union.

Brussels unveiled plans in May to deny London the right to host clearing trans-actions denominated in euros — potentially costing the British capital trillions in financial flows per year. And once Britain leaves in March 2019, UK-based banks face losing “passporting” rules that allow them to sell serv-ices across the 28-member bloc unhindered.

Capitals including Paris, Amsterdam and Dublin have flung resources into coaxing banks to prepare for Brexit by setting up shop on their ter-ritory. But Germany’s sober financial hub Frankfurt has so far outshone its glitzier cousins. Around 10,000 new banking jobs are expected to spring up in the city on the Main river, according to a study commissioned by lobby group Frankfurt Main Finance. Major US and Asian banks have already commit-ted to Frankfurt.

Britain’s Sunday Times newspaper reported this week that Goldman Sachs and four other banks were spend-ing tens of thousands of euros booking places in the west-ern German c i ty ’s English-speaking interna-tional schools — a full year before any of their employ-ees have moved. Goldman Sachs also said last week that it had leased space for around 1,000 workers in the Marien-turm, an under-construction Frankfurt skyscraper.

Berlin

Reuters

German industrial out-put posted its biggest monthly rise in more than six years in August, data showed

yesterday. It suggested the econ-omy is firing on all cylinders again and set for solid growth in the third quarter, although a question about the make up of the new government could add uncertainty.

The combined production of manufacturing, construction and energy increased by 2.6 percent on the month after edging down by 0.1 percent in July, data from the Economy Ministry showed.

That was the strongest monthly gain since July 2011 and easily beat expectations in a Reuters poll for a 0.7 percent rise, surpassing even the most optimistic estimate.

“These figures are very good,” Commerzbank economist Ralph Solveen said. He pointed to special factors such as plant holidays falling in July in some regions this year, meaning out-put was likely to come in weaker next month.

“Overall, we expect solid (GDP) growth in the third quar-ter. Our estimate is roughly 0.6 percent on the quarter,” Solveen said.

Manufacturing output rose by 3.2 percent, its biggest rise since March 2010, as factories churned out more intermediate goods, capital goods and con-sumer goods in August. Energy o u t p u t a l s o r o s e

while construction activity fell. Manufacturers of cars and other vehicles were the main driver behind the overall surge, the ministry said, also pointing to earlier plant holidays.

The ministry said industrial production had gained momen-tum since the start of the year.

“The good business morale and the positive development in industrial orders point to a con-tinuation of the solid industrial upswing,” it said.

Data published on Friday showed that strong foreign

demand, especially from clients outside the euro zone, drove a bigger-than-expected jump in industrial orders in August.

ING Bank chief economist Carsten Brzeski said the strong production data provided fur-ther evidence that the economy had left its summer lull behind and returned to maximum speed.

“With the expected invest-ment programme of the new government, the current cycle should be extended by another couple of years,” Brzeski added.

The German economy grew

0.7 percent on the quarter in the first three months of the year and 0.6 percent from April to June, driven by increased household and state spending as well as higher investment in buildings and machinery. Leading eco-nomic institutes have raised their growth forecast for the German economy to 1.9 percent in 2017 and 2.0 percent in 2018.

The German government will present its updated projec-tions for GDP growth, employment and inflation on Wednesday. “The outlook

further ahead is positive too, with domestic demand sup-ported by low unemployment and still loose monetary policy and the global environment sup-portive,” Capital Economics analyst Jennifer McKeown said.

The economy might even benefit from a small post-elec-tion fiscal boost, McKeown said, adding she expected German GDP to rise by an even stronger rate of 2.3 percent this year.

The biggest risks to Germa-ny’s upswing come from the outside, Brzeski said.

German economy powers ahead

A worker controls a tapping of a blast furnace at Europe’s largest steel factory of Germany’s industrial conglomerate ThyssenKrupp AG in the western German city of Duisburg, in this file picture.

Deutsche Boerse subsidiary squares off against London

London

Reuters

Gold prices rose yesterday , erasing all of the previ-ous week’s losses, as a

steadier dollar and the resilience of a key chart level removed some downward pressure, while the return of Chinese buyers to the market also lent support.

Prices fell for a fourth week to hit a two-month low on Friday, after an upbeat reading of U.S. wage growth and unemployment supported expectations for a US interest rate hike in December, pushing the dollar and Treasury yields higher.

Gold’s resilience above its 200-day moving average at $1,253 an ounce provided some reassurance to buyers, however, helping it rebound. Meanwhile, the dollar came off the boil, steadying below a 10-week high, while geopolitical concerns cen-tred on North Korea and Spain supported gold prices.

Spot gold was up 0.4

percent at $1,280.25 an ounce at 1410 GMT, while US gold futures for December delivery were up $7.70 an ounce at $1,282.60.

“For the time being, gold may have bottomed out,” ABN Amro analyst Georgette Boele said. “On Friday people were very reluctant to buy dollars, even though there were enough signals to do so ... and the dollar has come under some pressure again, which is being reflected currently in gold.”

“The 200-day moving aver-age has proved to be intact still ... so there were some technical elements playing out,” she added. “I think we can go back towards $1,300.” Expectations for a Fed rate hike, she added, are still providing some head-winds to gold, which, as a non-yielding asset, tends to suf-fer as interest rates rise.

China’s central bank held off from adding to gold reserves for an 11th straight month in Sep-tember, data showed yesterday.

China had been a significant official-sector gold buyer in pre-vious years.

On the physical markets, Chinese buyers returned after the Golden Week holiday, another potentially supportive factor for gold. China is, along with India, one of the world’s biggest markets for physical gold and demand there is gen-erally stimulated by falling prices.

“The absence of China last week was probably a bearish factor, because China usually is a kind of insurance against lower prices,” Commerzbank analyst Carsten Fritsch said.

Speculators cut their net long positions in COMEX gold and silver contracts for the third straight week, in the week to October 3.

Among other metals, silver was up 0.8 percent at $16.91 an ounce, while platinum was down 0.3 percent at $909.75 an ounce and palladium was 0.5 percent higher at $924.25.

Sydney

AFP

France’s AccorHotels has made a Aus$1.17bn ($910m) bid for one of

Australia’s biggest hotel oper-ators, the Mantra Group, the local company said yesterday in a move that sent its share price soaring. Mantra, which operates more than 20,000 rooms in Australia, New Zea-land and Indonesia, said it had received an offer of Aus$3.96 cash per share, valuing the firm at Aus$1.17bn.

“Mantra has granted Accor access to due diligence to deter-mine if a transaction can be agreed and recommended unanimously by the Mantra board,” the Australian-listed company said in a statement.

“The discussions are incom-plete and any entry by the parties into binding transaction documents remains subject to a number of conditions.” The conditions include regulatory approval and support for the proposal by the firms’ boards.

The Australian company operates a variety of properties, from resorts to serviced apart-ments under three brands — Peppers, Mantra and Break-Free — and has more than 5,500 staff. Mantra in August reported net profit after tax of Aus$45.6m for the year to June 30, a 22.7 percent increase from the pre-vious corresponding period.

AccorHotels includes the Sofitel, Pullman, Novotel, Mer-cure and Ibis chains. It operates 4,200 hotels with 600,000 rooms worldwide.

London

Reuters

British defence company BAE Systems will announce more than

1,000 job cuts this week, mainly affecting its Warton plant in Lancashire, northern England, where it assembles the Eurofighter Typhoon fighter jet, Sky News said yesterday.

BAE Systems, which employs 34,600 people in Britain, has already slowed production of the jet.

Chief Executive Charles Woodburn, who recently took over from Ian King, said in August he was confident about future orders for the aircraft, which is a joint project between BAE, France’s Airbus and Italy’s Finmeccanica.

The Typhoon has won fewer orders this year than the rival Rafale built by France’s Dassault Aviation.

BAE said in August that any new orders were unlikely to impact production deliv-ery rates positively for at least 24 months, and production would be under constant review. “We obviously have to review our (Typhoon) pro-duction demand very carefully,” Woodburn said.

Sky News said BAE would also trim its workforce at other locations, with the total number of job losses coming in at “well over 1,000”. The company told Sky News: “BAE Systems continually reviews its operations to make sure we are performing as effectively and efficiently as possible, deliver-ing our commitments to existing customers and ensur-ing we are best placed to secure future business.”

“If and when there are any changes proposed we are committed to communicat-ing with our employees and their representatives first.”

Tokyo

AFP

Major Japanese steel-maker Kobe Steel said it has systematically

fabricated inspection data for aluminium and copper prod-ucts that may have gone to around 200 clients, reportedly including Toyota.

The admission is the latest in a string of quality control and governance scandals that have hit major Japanese businesses in recent years undermining the country’s reputation for qual-ity. After conducting an in-house probe Kobe Steel admitted that it had shipped products that did not meet cli-ent specifications, including strength data.

The company said the fab-rications, which might have started a decade ago, could affect products sent to as many as 200 companies. It did not name any of the companies. But the Nikkei newspaper said Toy-ota and Mitsubishi Heavy Industries, producer of the Mit-subishi Regional Jet passenger plane, are among notable cli-ents affected.

When asked whether Kobe Steel “systematically” lied about product data, the firm’s Vice President Naoto Umehara replied: “Yes.” “It has become clear that managers also took part in this or that they knew about it but did nothing about it,” Umehara said. “We deeply apologise for this improper conduct,” he said.

French giant AccorHotels bids for Australia’s Mantra Group

Gold recoups losses as dollar steadies

BAE Systems to cut more than 1,000 jobs

Kobe Steel fabricated data for aluminum & copper products

Industrial output

The combined production of manufacturing, construction and energy increased by 2.6 percent on the month after edging down by 0.1 percent in July, data from the Economy Ministry showed.

Manufacturing output rose by 3.2 percent, its biggest rise since March 2010, as factories churned out more intermediate goods, capital goods and consumer goods in August. Energy output also rose while construction activity fell.

Atlantia in bid to buy Abertis

25TUESDAY 10 OCTOBER 2017 BUSINESS

The new headquarters of “La Caixa - Caixabank” in Valencia. Catalonia’s biggest lender shifted its legal headquarters out of Catalonia due to the uncertainty caused by the referendum vote outlawed by Madrid.

Catalonia’s biggest lender shifts HQ

Beijing

Reuters

China’s foreign exchange reserves rose modestly in September for an eighth straight

month, and by slightly more than markets had expected, as tighter regulations and a stronger yuan continued to dis-courage capital outflows.

A dramatic slowdown in capital flight — which had been seen as one of the biggest risks to China — has helped boost confidence in the world’s sec-ond-largest economy ahead of a key Communist Party meeting this month, at which President Xi Jinping is expected to consol-idate his grip on power.

Forex reserves rose $17bn in September to $3.109 trillion, compared with an increase of $10.5bn in August, central bank data showed yesterday. It was the first time that China’s reserves have climbed for eight months in a row since June 2014, and brought its stockpile — the world’s largest—to the highest since October last year.

The consistent rise has led some analysts to believe the People’s Bank of China (PBOC) may have become a net buyer of foreign exchange for the first time in nearly two years.

“But we believe any such purchases reflect a desire to create uncertainty over the short-run trajectory of the cur-rency rather than resisting medium-term appreciation,” Julian Evans-Pritchard, China Economist at Capital Econom-ics, wrote in a note.

China has tightened rules

on moving capital outside the country since late last year as it scrambled to support the yuan and stem a slide in its forex reserves. Beijing burned through nearly $320bn of reserves last year and the yuan still fell about 6.5 percent against the surging dollar, its biggest annual drop since 1994.

However, the yuan has seen a sharp rebound so far this year, thanks to a reversal in the dollar and a further widening of Bei-jing’s forex controls, including a clampdown on some overseas acquisitions by Chinese firms which some suspected were really being used to channel money offshore.

The yuan had gained 7.5 percent against the dollar through early September, but authorities have allowed it to backtrack a bit in recent weeks, possibly due to concerns that its rapid run-up would start to hurt China’s exports.

The dollar’s recent resur-gence has also pressured the yuan of late, though few China watchers believe Beijing will allow it to retreat much further and risk rekindling outflows.

London

Reuters

Turkish stocks and bonds fell on Monday and the lira tumbled 2.5 percent

after a visa spat erupted with the United States, while broader emerging assets too felt the heat from Treasury yields near five-month highs.

Friday’s US data showing an acceleration in wage growth cemented expectations of a December rate rise, lifting the dollar and US yields, and mak-ing an impact across emerging markets. MSCI’s equity index slipped 0.2 percent, snapping a five-day winning streak, while average local currency emerging bond yields were at 6.05 percent, a six-week high.

The main focus was how-ever on Turkey after the United States and Ankara mutually scaled back visa services in a fresh sign of deteriorating rela-tions between the NATO allies.

Dollar bonds fell across the curve while Turkey’s portion of the sovereign dollar bond index widened 9 bps to its highest premium over Treasuries since end-September. The lira shed 2 percent to the dollar.

The Istanbul stock market tumbled 3.6 percent, led by Turk-ish Airlines and airports operator. Nomura economist Inan Demir noted that Turkey was already more vulnerable than other emerging markets to higher U.S.

yields because of a big current account deficit and also high inflation, which reduced its real yield advantage.

Turkish one-year yields are now over 12 percent but core inflation is running at almost 11 percent. That contrasts with most big emerging economies which are seeing inflation fall.

“Turkey already stood apart from its peers .... If coupled with high political risks, its isolation would be further amplified,” Demir said. “We need to see either a lowering of the risk premium by defusing the ten-sions or an increase in the risk premium offered by the lira by raising interest rates.”

While authorities could be forced to raise rates if the lira selloff continues, “the bar for central bank action will be high,” Demir said, noting Pres-ident Tayyip Erdogan’s strident opposition to higher interest rates.

The South African rand fell 0.6 percent, staying near six-month lows hit on Friday against the dollar, while the rouble slipped 0.3 percent to a 10-day low. Latin American and Asian currencies have also lost ground in recent days

HSBC called currencies the “weak link” of emerging mar-kets. “On the surface they’ve done well, but only having bor-rowed their entire lustre from a weakening dollar,” they told clients.

Bangkok

Reuters

Thai airlines can now add flights to the growing China, South Korea and Japan mar-

kets after the UN International Civil Aviation Organization removed a red flag against Thai-land over safety concerns, officials said yesterday.

Thailand was downgraded in June 2015 after its regulator missed a deadline to resolve sig-nificant safety concerns, meaning that airlines were una-ble to add further international routes, though they could con-tinue to operate routine flights.

The Civil Aviation Authority of Thailand (CAAT) said the ICAO had made the decision after a meeting on Friday. The Mon-treal-based UN agency was not immediately available for com-ment, but the red flag which

appeared against Thailand on its website had disappeared.

“Although lifting the red flag is a significant turning point for her aviation industry, Thailand as well as CAAT need to carry on their missions to improve the aviation safety standards,” the CAAT said on its website.

The biggest beneficiaries would be smaller carriers, such as Thai AirAsia X, NokScoot and Thai Lion, said Corrine Png, the CEO of Singapore-based trans-port research firm Crucial Perspective.

“The ICAO downgrade had seriously impeded these new entrants’ growth to lucrative markets such as Japan and South Korea,” she said. “These airlines can now grow more aggres-sively. This would, however, imply increased competition for Thai Airways when they expand.”

Thai AirAsia X CEO Nadda Buranasiri said his airline was studying new routes, including to Hokkaido in Japan, after the red flag was lifted. “We will likely increase routes and fre-quencies for China, South Korea, and Japan,” he told Reuters on Monday, adding Thai AirAsia X now hoped to add three to four aircraft to its fleet next year.

Nok Airlines PCL Vice Chair-man Patee Sarasin said new routes would be added as slots became available. Thai Airways lacks enough aircraft to take advantage of the situation and expects rivals will boost routes to other Asian countries, said a source at the national carrier who declined to be named because he wasn’t authorised to speak to the media. Thai Air-ways declined to comment.

CAAT Director-General Chula Sukmanop told a news

conference that he expected Thailand would regain a Cate-gory One status from the US Department of Transportation’s Federal Aviation Administration (FAA), which also downgraded Thailand in 2015. The FAA downgrade meant Thai carriers could not start new routes to the United States.

ICAO’s red flag was based on its audit of the regulatory body, rather than individual airlines. Some major Thai airlines, including Thai Airways, Bang-kok Airways, Thai Lion and NokScoot, have passed the Inter-national Air Transport Association Operational Safety Audit, a benchmark for global safety management in airlines.

The countries which still have red flags against them are Djibouti, Eritrea, Haiti, Kyr-gyzstan and Malawi, according to the ICAO list.

Houston/Mobile

Reuters

Some oil ports, producers and refiners in Louisiana, Mississippi and Alabama

that shut facilities ahead of Hur-ricane Nate were planning reopenings as the storm moved inland on Sunday, away from most energy infrastructure on the US Gulf Coast.

The storm, which weak-ened to a tropical depression and was moving inland toward Alabama and Tennessee, killed 30 people in Central America before speeding across the cen-tral US Gulf of Mexico, where more than 90 percent of oil output remained shut.

Oil producers Chevron Corp and Royal Dutch Shell began on Sunday to redeploy personnel, assess facilities and restore oil output in the Gulf of Mexico, including platforms, pipelines and terminals shut ahead of Nate, the companies said in statements.

Chevron also said it was assessing the impact of Nate on its 340,000-barrel-per-day Pas-cagoula refinery in Mississippi.

About eight flares and lim-ited steam were visible on Sunday at Chevron’s refinery, indicating activity. Energy intel-ligence service Genscape said Chevron shut the facility on Sat-urday, but the company did not confirm the information.

Nate has forced the closure of more than triple the volume of Gulf offshore crude produc-tion than Hurricane Harvey did from late August to early Sep-tember, with 92.6 percent of total oil output shut, according

to the Bureau of Safety and Envi-ronmental Enforcement (BSEE).

About 1.62 million b/d of oil and 2.5 billion cubic feet per day of natural gas output remained offline on Sunday at 298 evac-uated offshore platforms, almost unchanged from Saturday, the BSEE said.

Vessel traffic and port oper-ations at New Orleans resumed on Sunday afternoon, the US Coast Guard said. “New Orleans has reopened all waterways without restrictions,” it said in a statement where it also warned about shoaling, storm debris, and other hazards that may exist after the storm.

In Alabama, the port of Mobile remained closed on Sun-day and no estimated reopening date had been officially set, although no damage to the

terminal and port had been reported, said Mike Forister, assistant terminal manager at Arc Terminals. Forester said it was not much of a setback “because we are getting down to slower season,” he said.

Mobile’s navigation channel could remain shut until Tuesday because of rough conditions, said Mike Buckley, operations manager at Alabama Bulk Ter-minal Company, whose facilities did not sustain damage.

About 18 oil tankers were sheltered on Sunday along the Mississippi River near New Orle-ans, half of them loaded with crude or refined products. Sev-eral container ships and cruise ships were also waiting for the port to allow disembarking.

In Mobile, two tankers were near the port, according to the

Reuters data. Phillips 66’s 247,000-b/d Alliance refinery and Valero’s 125,000-b/d Mer-aux refinery, both in Louisiana, were reported undamaged after the passage of Nate, said sources familiar with their operations.

Alliance planned to restart some units on Sunday but may not resume production until midweek because of the limited availability of crude oil at the US Gulf, the sources said.

Phillips 66 said it had no update on the status of the refin-ery on Sunday morning. Valero did not respond to a request for comment about Meraux, which was not shut during the storm.

PBF Energy Inc’s Chalmette refinery in Louisiana was oper-ating on Sunday, according to sources. The company declined to comment.

China’s forex reserves rise in September

Forex reserves rose $17bn in September to $3.109 trillion, compared with an increase of $10.5bn in August, central bank data showed yesterday.

Thailand gets aviation safety upgrade

Turkish selloff leads broader emerging market weakness

An aerial view of a refinery along the Mississippi River in New Orleans.

US oil ports and refiners to reopen after Nate

OMAN Telecommunication Co (Omantel) said yesterday that it had agreed to buy a 12 percent stake in Kuwaiti tel-ecommunications firm Zain in a deal that will more than double its stake.

The stake is worth about $946m based on Zain’s cur-rent market value, Thomson Reuters data showed. In August, Omantel purchased a 9.84 percent stake in Zain for $846m, saying the trans-action was part of a strategy launched to diversify its investment and market posi-tion in the region.

Yesterday, Omantel said it had signed a non-binding letter of intent with Kuwait-based Al Khair, an investment vehicle of Kuwait’s Al Kharafi merchant family, to purchase its 12 percent stake in Zain.

Omantel to buy additional 12% stake in Zain

26 TUESDAY 10 OCTOBER 2017BUSINESS

QATAR STOCK EXCHANGE

QE Index 8,212.86 0.93 %

QE Total Return Index 13,772.48 0.93 %

QE Al Rayan Islamic Index 3,296.97 0.72 %

QE All Share Index 2,308.46 0.48 %

QE All Share Banks &

Financial Services 2,565.12 0.57 %

QE All Share Industrials 2,561.28 1.35 %

QE All Share Transportation 1,716.93 1.88 %

QE All Share Real Estate 1,594.67 1.62 %

QE All Share Insurance 3,222.71 0.27 %

QE All Share Telecoms 1,032.51 1.15 %

QE All Share Consumer

Goods & Services 4,946.08 0.34 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

09-10-2017Index 8,212.86

Change 75.29

% 0.93

YTD% 21.31

Volume 10,127,189

Value (QAR) 186,041,568.13

Trades 2,449

Up 32 | Down 06 | Unchanged 0008-10-2017Index 8,137.57

Change 5.52

% 0.07

YTD% 22.03

Volume 6,959,689

Value (QAR) 183,035,309.42

Trades 2,606

EXCHANGE RATE

GOLD QR150.4786 per grammeSILVER QR1.9847 per gramme

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

All Ordinaries 5805.141 27.709 0.48 5983.2 5635.1

Cac 40 Index/D 5355.67 -4.23 -0.08 5442.1 4733.82

Dj Indu Average 22773.67 -1.72 -0.01 22777.04 17883.56

Hang Seng Inde/D 28326.59 -131.45 -0.46 28626.41 21883.82

Iseq Overall/D 6837.74 -21.76 -0.32 7157.43 6369.05

Kse 100 Inx/D 41099.99 -212.6 -0.51 53127.24 39869.88

S&P 500 Index/D 0 0 0 2552.51 2245.13

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 4.7697 QR 4.8371

Euro QR 4.2499 QR 4.3093

CA$ QR 2.8783 QR 2.9351

Swiss Fr QR 3.7014 QR 3.7529

Yen QR 0.03204 QR 0.03266

Aus$ QR 2..7999 QR 2.8549

Ind Re QR 0.0552 QR 0.0563

Pak Re QR 0.0342 QR 0.0350

Peso QR 0.0704 QR 0.0718

SL Re QR 0.0235 QR 0.0240

Taka QR 0.0447 QR 0.0456

Nep Re QR 0.0345 QR 0.0352

SA Rand QR 0.2616 QR 0.2668

INTERNATIONAL MARKETS - A LIST OF SHARES FROM THE WORLD

A C C-A/D 1725.25 -12.7 30069

Aarti Drugs-B/D 519.1 1.1 1421

Aban Offs-A/D 183.15 0.95 179003

Ador Welding-B/D 597 0.45 40000

Aegis Logis-A/D 235.45 0.7 91037

Alembic-B/D 38.75 -1.3 95771

Alkyl Amines-B/D 552 65.1 41960

Alok Indus-B/D 3.24 -0.13 2908646

Apollo Tyre-A/D 238.7 -3.7 275147

Asahi I Glass-/D 381 -0.25 10155

Ashok Leyland-/D 124.1 -0.75 528622

Bajaj Hold-A/D 2891 -50.55 1876

Ballarpur In-B/D 12.54 -0.46 657365

Banaras Bead-B/D 62.25 1.55 25927

Bata India-A/D 759.55 18.25 65667

Beml Ltd-A/D 1712 -27.35 50913

Bhansali Eng-B/D 116.6 11.65 2341238

Bharat Bijle-B/D 1138.95 29.15 4326

Bharat Ele-A/D 165.9 -0.3 169580

Bharatgears-B/D 159.7 11.35 22391

Bhartiya Int-B/D 618.5 17.85 19802

Bhel-A/D 86.45 1.55 863800

Bom.Burmah-A/D 1354.35 -60.5 49298

Bombay Dyeing-/D 225.5 10.7 407151

Camph.& All-Xc/D 764.95 7 2869

Canfin Homes-A/D 2662.05 16 9958

Caprihans-Xc/D 100.05 0.4 4290

Castrol India-/D 360.65 -0.75 120960

Century Enka-B/D 338.5 17 15985

Century Text-A/D 1284.1 -2.65 40369

Chambal Fert-B/D 143.5 -0.45 46330

Chola Invest-A/D 1125 5.2 4921

Chowgule St-Xt/D 14.1 -0.29 17093

Cimmco-B/D 89.4 2.05 18729

Cipla-A/D 585.45 0.45 77408

City Union Bk-/D 162.05 -2.2 14433

Colgate-A/D 1095.4 6.3 9782

Container Cor-/D 1320 -9 7414

Dai-Xc/D 418 4.45 7735

Dcm Shram Ind-/D 326.75 17.3 40520

Dhampur Sugar-/D 282.6 6.65 110900

Dr. Reddy-A/D 2409.75 31.9 47183

E I H-B/D 136.6 1.4 2618

E.I.D Parry-A/D 360.9 0.15 18366

Eicher Motor-A/D 31794.85 256.65 1953

Eimco Elecon-B/D 565 23.3 2580

Electrosteel-B/D 24.6 -0.2 30390

Emco-T/D 18.5 0.25 30891

Escorts-A/D 693.9 -3.2 133199

Eveready Indu-/D 340.85 20.85 54730

F D C-B/D 189.95 0.6 7141

Federal Bank-A/D 116.95 -0.75 1684152

Ferro Alloys-X/D 15.89 2.13 1411168

Finolex-A/D 655.95 17.85 4883

Forbes-B/D 1838.75 24.2 1501

Gail-A/D 445.5 -6.8 872273

Gammon India-Z/D 5.67 0.27 168649

Garden P -B/D 34.75 -1.5 60021

Godfrey Phil-A/D 1026.65 -1.4 3354

Goodricke-Xc/D 270.25 5.5 10170

Goodyear I -B/D 821 14.15 6209

Hcl Infosys-A/D 49.2 -1.4 970927

Him.Fut.Comm-B/D 25.65 -0.8 1908526

Himat Seide-B/D 339.25 -2.15 13460

Hind Motors-B/D 7.61 -0.03 57185

Hind Org Chem-/D 19.1 0.1 53122

Hind Unilever-/D 1222 16.5 32230

Hind.Petrol-A/D 439.7 -5.05 134477

Hindalco-A/D 249.55 -1.15 436025

Hous Dev Fin-A/D 1749.65 9.65 50940

I F C I-A/D 22.7 -0.3 635999

Idbi-A/D 53.2 -0.15 229205

Ifb Ind.Ltd.-B/D 725 3.7 1942

India Cement-A/D 182.25 -1.55 292059

India Glycol-B/D 292.4 -11.9 378339

Indian Card-B/D 175.95 4.4 1359

Indian Hotel-A/D 107.75 -0.35 50895

Indo-A/D 108.15 -1.95 116775

Indusind-A/D 1699.5 17.95 41240

J.B.Chemical-B/D 280.05 -4.5 3294

Jagson Phar-B/D 31.95 0 1402

Jamnaauto-B/D 61.25 -0.85 415999

Jbf Indu-B/D 198.75 13.7 108443

Jct Ltd-Xc/D 3.32 0.02 269203

Jenson&Nich.-T/D 8 0.21 28869

Jindal Drill-B/D 161.9 0.95 8036

Jktyre&Ind-A/D 151.45 1.3 221680

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Orient.Carb.-B/D 1400 -15.15 2099

Patspin India-/D 26.05 0.2 13660

Punjab Chem.-B/D 416.35 4.35 20247

Radico Khait-B/D 175 2.55 223693

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Whitbread/D 3882 19 101497

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COMPANY CLOSE NET VOLUME NAME CHG TRADED

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LONDON

While most London-based bankers are brushing up on their German to prepare for a move to Frankfurt post-Brexit, senior staff at French

investment banks expect to say “Oui” to government pres-sure to bring jobs home to Paris. Most international banks in London have declared where they will move their Euro-pean business in the event of a “hard” Brexit, in which the UK would give up access to the single market, including financial passporting rights. Frankfurt is by far the favour-ite. European giant Deutsche Bank, for example, said in April up to 4,000 UK jobs could move to Germany.

Although French banks have been wavering about their plans, the bankers who work for them in London believe pressure from the government of Emmanuel Macron, himself a former investment banker, makes a Paris move almost certain. “The Macron administration is really pushing for the French banks to move some of us to Paris, setting up international schools there and talk-ing tax breaks,” said a senior London-based banker at one of the three main French investment banks.

“Personally, I am preparing for life in Paris. Unless we get a (soft) Brexit deal, it’s almost inevitable,” he said, ask-ing not to be named because, like others interviewed for this story, he was not authorised to speak to the media. That sentiment was echoed by a second London-based source from another top bank.

“Most of the Americans are moving to Frankfurt and a lot of them are very advanced in their plans, so there’s a lot of pressure for us,” he said. A source at France’s finance ministry maintained there was no undue pres-sure on the banks, but acknowledged the government was keen for domestic lenders to base more jobs in France.

French banks feel they can afford to wait until the details around Brexit become clearer because they already have EU licenses through their Paris headquarters, unlike their U.S. counterparts which conduct nearly all of their European investment banking business out of London.

France’s two biggest investment banks in London, BNP Paribas and Societe Generale, have not set out firm plans, though SocGen CEO Frederic Oudea told Reuters in June it could move 300-400 out of the 2,000 invest-ment banking jobs to Paris.

Credit Agricole, the third biggest, has moved its 10-per-son European government bonds trading platform to Paris, but a source at the bank said the move was not related to Brexit. All three declined to comment. French authorities want to convince the financial community that the sec-tor is no longer seen as the “enemy”, as former socialist President Francois Hollande once called it.

Banks moving to Germany aim to take advantage of the country’s AAA credit rating, relatively attractive tax regime and strong economic track record. For its part, France has introduced measures to cut labour costs and lower taxation, and has pledged to build more interna-tional schools targeted at expatriates’ children. Former Bank of France governor Christian Noyer, tasked by the government to lobby foreign finance firms, has made more than 400 pitches to banks in New York and London in the months since Britain voted to leave the EU in June 2016.

One big win has been British bank HSBC, which said it would move up to 1,000 traders to its Paris entity in the case of a hard Brexit. That is the only major international bank so far to say France will be its new EU headquar-ters, however. Wall Street bank Citigroup said last week it was applying for a license to conduct sales and trading activities in France, but its legal EU headquarters will be in Germany. Noyer has said that even if banks say they are seeking a banking license in Frankfurt, that does not mean most of the jobs will be there.

On a recent morning in Yutian, a dusty town bisected by the high-way that connects Beijing to the sea, Su Meiquan strolled into a dealership packed with hulking

trucks and prepared to drive off with a brand new rig. After years of driving a diesel truck for a trucking company, he had decided to buy his own vehicle – a bright red rig fueled with liquefied natural gas, capable of haul-ing as much as 40 tonnes of loads like steel or slabs of marble. Su hopes the LNG truck - less polluting and cheaper to operate than diesel ones - will be the cornerstone of his own business, plying the route to the west-ern fringes of China.

“Everybody says gas is cleaner with nearly no emissions,” he said after signing a stack of paperwork in the dealer’s office. In front of him, photos of proud drivers pos-ing in front of their own new LNG trucks had been taped to the wall.

Sales of large LNG trucks are expected to hit record levels in China this year as the government steps up an anti-pollution cam-paign that includes curbs on heavy-duty diesel vehicles. LNG trucks account for about four percent of the more than six million heavy vehicles able to haul 40 to 49 tonnes of goods that are currently on China’s roads. The vast majority of the 43 billion tonnes of freight transported across China last year was by highway.

But demand for LNG trucks is soaring as companies and manufacturers shift to vehicles that run on the gas that Beijing sees as a key part of its war against smog.

Sales of LNG heavy trucks surged 540 percent to nearly 39,000 in the first seven months of the year, according to Cassie Liu, a truck analyst with the IHS Markit consultancy.

That was partly fueled by a ban this year

on the use of diesel trucks to transport coal at northern ports in provinces like Hebei and Shandong, and in the city of Tianjin.

“We are seeing a blowout in LNG trucks this year, thanks to the government’s pol-icy push,” said Mu Lei, marketing manager for China National Heavy Duty Truck Group, known as Sinotruk, the country’s largest manufacturer of heavy-duty trucks.

The shift to gas trucks is helping fuel demand for LNG in China, as are other gov-ernment measures aimed at clearing the air, especially in the north, which is shrouded in a hazardous coal-fueled smog for much of the winter. One major project is piping gas to 1.4 million households across the north for heating this winter, shifting away from coal. China, already the world’s No.3 LNG consumer, has seen imports jump 45 per-cent so far this year.

Chinese companies like Jereh Group and ENN Energy Holding , which build LNG fill-ing stations, and Zhangjiagang CIMC Sanctum Cryogenic Equipment Co., Ltd, which specialises in LNG tanks, are expected to benefit from the gas boom, analysts said.

Government restrictions on cargo over-loading last year, for safety reasons, has also driven truck sales as operators rushed to buy bigger trucks. Next month, Beijing will also impose restrictions on thousands of northern factories using diesel trucks, forc-ing many to use more rail and others to consider gas-powered lorries.

Sales of new heavy-duty trucks, includ-ing diesel and LNG vehicles, jumped 75 percent in the January-August period to 768,214, according to industry website www.chinatruck.org. It did not break down the numbers, but companies say that diesel growth is being dwarfed by that of the LNG trucks. Last week, Sinotruk netted new orders for 1,371 heavy-duty trucks, 900 of which run on LNG, at an event bringing together coal transport companies from seven northern Chinese cities, Mu said. In the first half of this year, Sinotruk sold 5,200

LNG trucks, up 650 percent year on year.“Gas trucks are both more environmen-

tally friendly and more economic,” said Lai Wei, general manager of Tianjin Shengteng Transport Company, a privately-run truck-ing company. Lai is tripling his LNG fleet to more than 100 by the end of this year, add-ing 65 new trucks made by Shaanxi Heavy Duty Automobile Co. Ltd, the country’s larg-est LNG vehicle producer.

He is also cutting back his diesel fleet to 30 from 50 previously because of the new emissions rules in Tianjin that come into effect this month. Only vehicles meeting “National Five” emissions standards, simi-lar to Euro V standards for trucks and buses in Europe, will be allowed to operate at the port. Lai said he was also concerned that there might be further restrictions on die-sel trucks in a few years.

China, the world’s top energy guzzler, wants gas, which emits half the carbon diox-ide as that of burning coal, to supply 15 percent of energy demand by 2030, up from 6 percent currently. That effort stalled in 2014 as an oil price slump lifted demand for diesel. But as oil prices have risen in the past 20 months, rebounding to above $50, LNG sales, especially from Australia and the United States, have soared.

Diesel costs between 10-30 percent more than gas on average currently at Chi-nese gas stations, according to truck companies.

Helen Reid Reuters

The boom in emerging mar-ket technology stocks is becoming a problem for

fund managers of all stripes. The soaring market capitalisation of a handful of companies such as Chi-na’s Alibaba and Tencent is steadily lifting their weighting in the MSCI emerging equities index.

This means investors in funds that track indexes (exchange traded funds or ETFs) - who want exposure to a range of companies for a lower fund management fee - are finding themselves increas-

ingly exposed to a single sector.Meanwhile, active fund man-

agers, who justify charging higher fees for their individual stock-picking expertise, are under pressure to buy those tech stocks to ensure their funds keep up with the index’s gains.

And with both sets of investor chasing the same thing, the risk of dramatic outflows increases if the sector falters. “It’s the opposite of what you are trying to do with an ETF - you want cheap diversified exposure but you end up being con-centrated in basically 10 stocks,” said Rory McPherson, head of investment strategy at Psigma, who holds active EM funds.

The biggest five emerging mar-ket companies in the index are tech firms Alibaba, Tencent, Samsung, Naspers and Taiwan Semiconduc-tor. They comprise almost 19 percent of the index’s market cap-italization. That is a bigger chunk than the S&P 500 where the top five firms - Alphabet , Apple, Facebook,

Microsoft, and Amazon - make up 13 percent. The increasing use of ETFs has helped boost valuations further because they must follow the index weighting. And the index’s concentration has intensified as val-uations rose - the five companies’ share was 13.9 percent in January.

The shift towards passive investing, evident across most asset classes, has come into focus in emerging equities, which have enjoyed a sparkling 60 percent rally since early-2016. But the sec-tor may also illustrate the concentration risks that exchange-traded funds can bring to portfolios. Emerging equity funds have received some $56bn so far this year, Lipper data shows. Of this, $23bn went into ETFs.

Investors are keen on tech companies which are making profits by disrupting the status quo in sectors from media and advertising to retail and industri-als. But the dependence on technology for returns is causing

some discomfort among inves-tors who prefer shares in emerging market car or bever-age makers for instance for exposure to consumer demand in the developing world.

Ed Kerschner, chief portfolio strategist at Columbia Threadnee-dle, says the tech companies’ performance mostly reflects that of their U.S. peers rather than pro-viding exposure to developing countries.

“The question is are you buy-ing emerging markets or are you buying technology?” Kerschner said. “The risk of buying EM benchmarks is that you are not diversifying away from the S&P.”

As a result of the tech rally, the conventional market-cap weighted emerging equity index, with bigger weightings in companies with the largest market caps, has begun strongly outperforming the index where all companies are assigned the same weighting.

The success can also be

reversed. Any faltering by the tech leaders would have a proportion-ally weighty effect on ETFs, potentially spurring big outflows. Scott Snyder, co-portfolio man-ager of the ICON emerging markets fund, estimates that the four biggest tech firms have accounted for a third of 2017’s emerging equity returns.

“A lot of people that might just be piling into passive strategies in EM could be overly exposed to technology right now,” ICON’s Snyder said. There are also signs that many active emerging mar-ket managers, who would have had more diverse investments than ETF funds, are sticking more closely to the benchmark.

Data from Copley Fund Research shows the average active share of global emerging market funds - the extent to which their holdings differ from the index - has fallen to 74.7 per-cent from a peak of 78 percent in April 2016.

French bankers weighing Brexit face Paris pressure to come home

Abhinav Ramnarayan, Anjuli Davies &Maya NikolaevaBloomberg

Gas trucks boom as China curbs diesel in war on smogChen Aizhu Reuters

China, the world’s top energy guzzler, wants gas, which emits half the carbon dioxide as that of burning coal, to supply 15 percent of energy demand by 2030, up from 6 percent currently.

The shift towards passive investing, evident across most asset classes, has come into focus in emerging equities, which have enjoyed a sparkling 60 percent rally since early-2016.

Emerging market tech stock boom gives fund managers a headache

BUSINESS VIEWS 27TUESDAY 10 OCTOBER 2017

28 TUESDAY 10 OCTOBER 2017BUSINESS

BACK TO BUSINESS

Fund managers turn cautious on oil as prices fall

sight

Reuters

Hedge fund bullish-ness towards crude oil and refined prod-

ucts including gasoline and diesel appears to have peaked for now, according to an analysis of regulatory and exchange records.

Few long positions in crude and products were added by hedge funds and other money managers in the week to October 3.

Some crude and prod-ucts had been increasing short positions for the first time since August.

Hedge funds cut their combined net long position in the three major crude oil futures and options con-tracts linked to Brent and WTI by 1 million barrels to 793 million.

While the reduction was tiny, it came after port-folio managers had increased their net long exposure by 212 million barrels over the previous four weeks and indicated a potential turning point.

For the first time since August, hedge funds increased short positions in NYMEX WTI by 4 million barrels over the week.

F u n d m a n a g e r s trimmed their exception-ally bullish positioning in US gasoline by 6 million barrels to 65 million barrels.

The trimming was also the first significant reduc-tion since August.

Funds continued to add to their record net longs in US heating oil and Euro-pean gas oil by 220,000 barrels and 440,000 tonnes

respectively, but the rate of accumulation slowed markedly.

The probable peak in hedge funds’ net long posi-tions comes as no surprise.

Both the accumulation and liquidation of hedge fund positions and the rise and fall in prices show a strong cyclical element in the short run.

Speculative traders’ positioning across crude and especially refined fuels had looked increasingly lopsided in recent weeks.

The reason for the lop-sidedness is fund managers turned from very bearish in June to super-bullish by the end of September.

Brent prices have been drifting lower since Sep-tember 25 amid concerns that they had risen too far too fast and risked getting ahead of fundamentals.

The concentration of hedge fund positions had itself become an additional source of downside risk with the likelihood that prices would fall when port fo l io managers attempted to realise some of their profits.

Fund managers proba-bly continued the reduction of their net longs in crude and fuels during the second half of last week, as evi-denced by the continued slide in prices.

But with record or near-record net long posi-tions in gasoline, heating oil and gas oil, and a strong bullish bias in crude posi-tions, the balance of risks remains tilted towards the downside.

Capital Comment

It is the right time to discuss what is the future role of the European Stability Mechanism, its involvement in dealing with programmes in member states, what is its role in the banking union.

Valdis Dombrovskis, Vice President, European Commission

GDP Growth

Hector Santiago, a horticulturist, waters plants at his nursery that is powered by solar energy, after Hurricane Maria hit Puerto Rico in Barranquitas, south of San Juan, Puerto Rico.

How solar saved a Puerto Rican farmPuerto Rico Reuters

While his com-petitors wait for diesel to restart gener-ators knocked

out by Hurricane Maria, flower grower Hector Santiago is already back in business because of solar panels powering his 40-acre (16.2-hectare) nursery in central Puerto Rico.

The US territory is in a near blackout, its electricity grid shredded by the storm that slammed into the island on Sep-tember 20.

But Santiago’s decorative plant and poinsettia nursery, set amid the jagged peaks of the Barranquitas farming area, has kept working thanks to the $300,000 he invested in 244 solar panels six years ago.

“Everybody told me I was

crazy because it was so expen-sive. Now I have power and they don‘t,” said Santiago, whose flowers are sold in Puerto Rico, at outlets like Costco, and throughout the Caribbean.

While Santiago’s nursery was considerably damaged dur-ing the storm, many plants were

destroyed and the roofs of some greenhouses blew off, he was able to regroup quickly, with electricity to keep pumping water from his two wells.

On Tuesday, as US President Donald Trump surveyed dam-age elsewhere on Puerto Rico, some of the nursery’s 19 employ-ees were busy repotting damaged plants and cleaning up.

Santiago’s experience has left him hoping that Puerto Rico will begin relying more on solar power and other renewable energy as it looks to fix its dam-aged grid. That view has gained traction among some Puerto Rican politicians, though it is probably unlikely in the short run given the need to restore power as quickly as possible.

The experience of people like Santiago could drive more individuals and businesses to invest in solar power.

Henry Pichardo, who runs a

solar installation firm in the city of Bayamon, thinks the storm could drive up his business 20 percent a year. He said he has been inundated with enquiries since the hurricane hit. “People are going to become more con-scious of how they are living, and invest more in solar,” he said.

Santiago’s business requires a high amount of energy. From May through August, he lights his greenhouses with a total of 2,520 electric bulbs from 10 pm to 2 am to stimulate plant growth.

Until Maria, Santiago sold excess electricity generated by his six by three foot wide panels back to Puerto Rico’s now-defunct grid. In the storm, however, 25 percent of the pan-els were damaged by flying debris. Still, he said, that was enough to keep the power on, and the nursery did not “have to worry about trees falling on the power lines.”

Air Berlin to ground all flights by end of OctoberFrankfurt

AFP

Bankrupt German airline Air Berlin must ground all flights by the end of Octo-

ber, the firm said yesterday, as talks continue with prospective buyers Lufthansa and Easyjet.

Flights “will as far as we know no longer be possible after October 28 at the latest” because of insolvency rules, chief exec-utive Thomas Winkelmann (pictured) wrote in a letter to employees. Air Berlin triggered bankruptcy proceedings in August after losing a cash life-line from its biggest shareholder Etihad Airways.

Its aircraft have been kept aloft by an emergency loan from the German government.

Subsidiaries Niki in Austria and LGW in Germany are not themselves bankrupt and will be able to continue flying after

the late October cut-off.Meanwhile, Lufthansa and

British carrier Easyjet’s exclu-sive deal for talks to buy up chunks of the stricken airline ends Thursday, and any agree-ment will need a green light from European authorities—a process that could take “several weeks or months,” the firm expects. “We will know more in a few days” about any agree-ment, Winkelmann said, adding that negotiations had been “intense”. Unions have criticised

management for not keeping some 8,000 employees informed of the progress of dis-cussions. Also yesterday, executives and worker repre-sentatives opened discussion of a redundancy programme. Many Air Berlin workers are expected to find new jobs at the prospec-tive buyers, and Lufthansa has already advertised around 1,000 new jobs at low-cost subsidiary Eurowings, expected to buy up many of the smaller airline’s planes.

Nevertheless, “we strongly encourage you to actively take a look at the job market your-selves,” Winkelmann told staff.

A union document seen by AFP Saturday suggested up to 1,400 Air Berlin employees could be out of a job as soon as the end of October, with cuts falling especially heavily among ground crew and administra-tive staff.

Hurricane blows

The US territory is in a near blackout, its electricity grid shredded by the storm that slammed into the island on September 20.

Santiago’s nursery was damaged during the storm. Many plants were destroyed and the roofs of some greenhouses blew off.