qatar's banking sector remains 'heavily targeted' for cyberattacks
TRANSCRIPT
Friday, August 28, 2020Muharram 9, 1442 AH
BUSINESSGULF TIMES US labour market recovery
slowing; economists urge more fi scal stimulus
WEEKLY JOBLESS CLAIMS DIP 98,000: Page 8
Singapore is facing worst recession in its history
FIRMS RETHINK PLANS : Page 3
Qatar’s banking sectorremains ‘heavily targeted’ for cyberattacks: QCBBy Pratap JohnBusiness Editor
Qatar’s banking sector remains a “heavily tar-geted” sector for cyber-
attacks, Qatar Central Bank said and noted phishing attempts and user targeted social engi-neering attacks represented more than 50% of the overall at-tacks in 2019.
“This year (2019) has seen a surge in the cyber-attacks tar-geting the users of these organ-isations. Therefore, through its key risk indicators (KRIs) reporting system, the QCB’s dedicated information security department (ISD) has been able to understand the patterns and anticipate on some of the cyber threats,” the banking regulator said in its latest Financial Sta-bility Report.
The QCB has designed a new information and cyber security organisation with a dedicated independent information secu-rity department (ISD) that not only looks after QCB itself but also the entire fi nancial sector cyber security practice and pos-ture.
In order to achieve this, the QCB ISD has defi ned a govern-ance framework, a set of security
measures via technical, policy and regulatory requirements as well as reporting mechanisms at various levels.
The new organisation struc-ture covers both the security governance and assurance as-pects of the work.
The engagement with the fi -nancial sector has been formal-ised with a dedicated security forum, namely the BSG (Banking Security Group) and its terms of reference, which serves as a platform to exchange informa-tion and collaborate with the
banking sector primarily but also with the remaining sectors entities.
Statistics showed that in 2019, the “banking sector re-mained a heavily targeted sec-tor” with all the layers being seen as opportunity to steal
valuable information assets, QCB noted.
The phishing attempts and user targeted social engineering attacks represented more than 50% of the overall attacks, while the remaining portion aims at the systems or network infra-structure, it said.
Cybercrime campaigns tar-geting banks with sophisticated malicious e-mails leveraged ad-vanced malware packages such as ‘EMOTET’.
The cyber threat activity in-creased by 50% in 2019, QCB pointed out. As a result, QCB developed “practices and re-sponse mechanisms” in order to “limit” such risks and “an-ticipate” those types of attacks, “ramping up” the awareness messages, training of the users and the development of cyber security capabilities.
This year, the QCB ISD is de-fi ning new programmes that will enhance the overall posture of the fi nancial sector overall in-cluding the new entrants – the Fintech organisations, QCB said.
The QCB ISD has developed a new set of regulatory require-ments to cater for the accept-ance of Fintech entities as fi -nancial sector entities as part of the QCB Fintech Sandboxing process.
The QCB has designed a new information and cyber security organisation with a dedicated independent information security department (ISD) that not only looks after QCB itself but also the entire financial sector cyber security practice and posture.
Masraf Al Rayan’s $750mn 5-year sukuk more than four times oversubscribedMasraf Al Rayan has witnessed
more than four times oversub-
scription of its $750mn five-year
sukuk, indicating international
investors’ confidence in it, as
well as in Doha’s strong macr-
oeconomic framework.
The issued instrument, which
came under its existing $2bn
sukuk programme, saw subscrip-
tion to the tune of $3.3bn, Masraf
Al Rayan, which is rated ‘A1’ by
Moody’s, said in a regulatory filing
with the Qatar Stock Exchange.
The overwhelming demand
from investors has allowed
the bank to increase the issue
size from an initial $500mn to
$750mn.
The issuance was priced at a
spread of 185 basis points over
the five-year mid swap carrying
a fixed profit rate of 2.21% per
annum.
The sukuk issuance has at-
tracted investors from across
the globe with 41% from Europe,
28% from Asia, 24% from Middle
East and North Africa and 7%
from the US off shore accounts.
By investor type, 69% were
allocated to fund managers, 15%
to banks and private banks, 8%
to agencies and 8% to insurance
and pension funds.
The success of the issuance
was based on a comprehensive
marketing strategy that aimed
to demonstrate the strong
fundamentals of Masraf Al Rayan
and the strength of the Qatari
economy to the international
investors.
Al Rayan Investment, Crédit Ag-
ricole CIB, HSBC, Mizuho, MUFG,
QNB Capital, Société Générale
and Standard Chartered Bank
acted as joint lead manag-
ers and book-runners on this
transaction.
The Islamic bank and Al Khaliji
are right now contemplating a
merger and acquisition route to
create the third largest Islamic
lender in the country.
The potential merger would
lead to the creation of one of
the largest Shariah-compliant
banks in Qatar and in the Middle
East with total assets exceed-
ing QR164bn and shareholders’
equity of more than QR19bn.
Masraf Al Rayan and Al Khaliji are contemplating a merger and acquisition route to create the third largest Islamic lender in the country.
Powell’s Fed shift allows foremployment, inflation riseBloombergWashington
Federal Reserve chair Jerome Powell unveiled a new approach to setting US monetary policy, letting inflation and employment run higher in a shift that will likely keep interest rates low for years to come.Following a more than year-long review, Powell said the Fed will seek inflation that averages 2% over time, a step that implies allowing for price pressures to overshoot after periods of weakness. It also adjusted its view of full employment to allow labour-market gains to reach more workers.“Maximum employment is a broad-based and inclusive goal,” Powell said yesterday in a speech delivered virtually for the central bank’s annual policy symposium traditionally held in Jackson Hole, Wyoming. “This change reflects our appreciation for the benefits of a strong labour market, particularly for many in low- and moderate-income communities.”During the longest US economic expansion on record until the pandemic hit earlier this year, many groups benefited — including minorities and women — in their ability to find work. With unrest breaking out across the US over racial inequality, questions about how the Fed’s policy helps communities broadly have been raised.“They really, really, really are not going to be raising interest rates any time soon,” said James Knightley, chief international economist at ING Financial Markets. “The Fed is saying rates will be lower for longer, but don’t worry inflation is not going to be picking up.”In its new statement on longer-run
goals, the Fed said its decisions would be informed by its assessment of “shortfalls of employment from its maximum level.” The previous version had referred to “deviations from its maximum level.” The change de-emphasises previous concerns that low unemployment can cause excess inflation.While expected, the announcement of the strategy shift came sooner than some thought. After first fluctuating on the news, US stocks resumed their record-breaking rally and the Treasury yield curve steepened to the widest in two months as traders bet policy rates will remain locked near zero for even longer.Regarding price pressures, the document says the committee will target “inflation that averages 2% over time” and will aim to bring inflation above the 2% target following periods when inflation runs below that level.Calling the revised strategy a “a robust updating,” Powell spelled out that meant that after periods when inflation has been running below 2%,
monetary policy will likely aim to achieve inflation moderately above 2% for some time.The shift he announced represents the product of an unprecedented review of the Fed’s strategies, tools and approach to communications that began in early 2019.Since the central bank off icially set its inflation target at 2% in 2012, the Fed’s preferred measure of price increases has consistently fallen short of that objective, averaging just 1.4%.“The new framework suggests the Fed will allow the economy to run hot before applying the interest-rate brakes. It means the first increase in interest rates may not come into view for many years,” said Yelena Shulyatyeva and Eliza Winger of Bloomberg Economics.Low inflation contributes to low interest rates, reducing the Fed’s ability to fight off economic downturns and potentially making them deeper and longer. Powell noted a risk, saying that “if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal,” the central bank wouldn’t hesitate to act.Fed off icials also altered the strategy document to include a section acknowledging that financial stability can also aff ect their ability to reach their longer-run goals.“Sustainably achieving maximum employment and price stability depends on a stable financial system,” it said. “Therefore, the committee’s policy decisions reflect its longer-run goals, its medium-term outlook, and its assessments of the balance of risks, including risks to the financial system that could impede the attainment of the committee’s goals.”
QSE continues to remain under bearish spell despite strong buying supportBy Santhosh V PerumalBusiness Reporter
The Qatar Stock Exchange yes-terday continued to remain un-der bearish spell despite strong
buying support from domestic and Gulf funds.
The local retail investors were seen net profi t takers as the 20-stock Qatar Index settled 16 points or 0.16% lower at 9,882.93 points, although it touched a low of 9,871 points intraday.
Both Arabic and foreign individuals were also seen bearish on the market, whose year-to-date losses widened to 5.2%.
Market capitalisation saw QR14mn or 0.02% decline to QR574.37bn, mainly owing to microcap segments.
A total of 24,693 exchange traded funds (both QATR and QETF) valued at QR93,207 changed hands across six transactions; while in the debt mar-ket, there was no trading of sovereign bonds and treasury bills.
Trade turnover and volumes were on the increase on the market, where the industrials, banks and consumer goods sectors together accounted for about 86% of the total trading vol-ume.
The Total Return Index shrank 0.16% to 18,999.6 points, All Share In-dex by 0.02% to 3,066.91 points and Al Rayan Islamic Index (Price) by 0.03% to 2,275.41 points.
The transport index declined 0.76%, industrials (0.62%) and insur-
ance (0.34%); while real estate gained 1.07%, consumer goods and services (0.4%) and banks and fi nancial serv-ices (0.13%). The telecom index was rather fl at.
Major decliners included Gulf Warehousing, Industries Qatar, Naki-lat, Qatar German Company for Medi-cal Devices, Qatar Insurance and QIIB.
Nevertheless, about 64% of the traded constituents were in the posi-tive path with major losers being Salam International Investment, Maz-aya Qatar, Investment Holding Group, Inma Holding, Alijarah Holding, Man-nai Corporation, Al Meera, Baladna and Barwa.
The Arab individuals turned net sellers to the tune of QR5.56mn com-pared with net buyers of QR1.07mn on August 26.
Local individuals were net profi t takers to the extent of QR3.3mn against net buyers of QR16.33mn the previous day.
Foreign individuals turned net sell-ers to the tune of QR2.39mn com-pared with net buyers of QR8.38mn on Wednesday.
The Gulf individuals were net sellers to the tune of QR0.97mn against net buyers QR2.28mn on August 26.
The Arab funds were net profi t takers to the extent of QR0.08mn compared with no exposure the previous day. However, domestic institutions turned net buyers to the tune of QR24.26mn against net sellers of QR5.63mn on Wednesday.
The Gulf institutions’ net buying
grew perceptibly to QR7.37mn com-pared to QR4.17mn on August 26. Foreign institutions’ net profit book-ing eased considerably to QR19.4mn against QR26.65mn the previous day.
Total trade volumes more than dou-bled to 523.97mn shares, value rose 51% to QR646.83mn and transactions by 42% to 12,547.
The consumer goods and services sector’s trade volume more than quad-rupled to 111.93mn equities and value more than doubled to QR125.74mn on 60% increase in deals to 2,002.
The industrials sector’s trade vol-ume almost tripled to 224.13mn stocks and value also almost tripled to QR177.5mn on more than doubled transactions to 3,921.
The banks and fi nancial services sector’s trade volume more than dou-bled to 112mn shares, value grew 12% to QR211.65mn and deals by 22% to 3,751.
The real estate sector reported a 51% surge in trade volume to 62.14mn eq-uities, 51% in value to QR85.99mn and 10% in transactions to 1,556.
However, the insurance sec-tor’s trade volume plummeted 56% to 3.34mn stocks, value by 55% to QR7.04mn and deals by 18% to 210.
There was a 33% plunge in the tel-ecom sector’s trade volume to 2.83mn shares, 38% in value to QR5.96mn and 17% in transactions to 267.
The transport sector’s trade volume was down 8% to 7.58mn equities and value by 1% to QR32.96mn, while deals gained 40% to 840.
Jerome Powell.
BUSINESS
Gulf Times Friday, August 28, 20202
Nigeria’s dollar crackdown risks stoking illegal tradingBloombergAbuja
Nigeria’s all-out eff ort to defend its currency by targeting importers and exporters with tougher regulations risks pushing more currency traders to the black market and more companies into distress.As a scarcity of foreign-exchange worsens in Africa’s largest economy, the central bank on Tuesday ordered banks to report exporters that fail to repatriate income earned abroad. The directive came only a day after the regulator banned importers from using external agents to pay for goods, a bid to tighten oversight of payments made outside the nation’s borders.The threat of punishment for non-compliance, including banning exporters from accessing dollars, won’t work said Bamidele Ayemibo, the lead consultant at 3T Impex Trade Academy in Lagos, an adviser on exports and
imports. Exports are secured at the parallel-market rate, while the central bank wants to force firms to repatriate foreign currency at the much stronger off icial rate for the naira.“If they sanction them, then they would just kill exports completely,” he said. “The central bank should do what it needs to do to encourage exporters to repatriate – first by allowing market forces to determine the price at which they sell – and then sanctioning those who don’t repatriate after.”Importers are also likely to balk. Multinationals and large local manufacturers have big foreign-exchange needs and use agents in Europe or Asia to purchase raw material, machinery and equipment on their behalf. The central bank is also introducing a process to verify prices of items being imported, which could cause delays.In the absence of exceptions for key importers, the naira will probably
weaken further in the parallel market, fueling “never-ending speculative attacks on the local unit,” United Capital
Plc said in a note. A spokesman for the central bank didn’t immediately answer a text message to his mobile phone.
The central bank’s clamp down on third-party importers could cause local companies to default on previously agreed obligations, which will spill-over into supply chain and output disruptions, causing productivity, revenue and employment losses, the Manufacturers’ Association of Nigeria said in an emailed statement.“Given the prevailing extremely stressful operating environment our fragile manufacturing sector is contending with, the implementation of this new directive is like hammering the last nail in the coffin of many of our ailing members,” the association said.The naira has been devalued twice this year after the drop in the price of oil, the country’s main foreign-exchange earner. The central bank stopped regular interventions in the currency market in March, leaving international investors trapped in the local market.
The parallel dollar-market rate, which the central bank says is illegal, is near a two-year high of 477 naira.Lenders including Stanbic IBTC Bank Plc and Zenith Bank Plc have also cut the amount of foreign currency customers can spend abroad. Guaranty Trust Bank Plc has stopped cash withdrawals from dollars accounts unless physical dollars have been deposited.The currency shortage is now playing out in another part of the market. Licensed bureau de change operators are complaining they’re on the brink of collapse after the central bank stopped making foreign-exchange sales to them, while illegal money changers are thriving.“People cannot pay for off ices, staff , not even regulatory fees or taxes,” said Aminu Gwadebe, the president of the Association of Bureau De Change Operators, which has about 5,000 members. “We don’t have any sources, all our sources are shut down. We are the most vulnerable.”
Bond buyers push Wall St to modernise underwriting processBloombergNew York
Some of the biggest money man-agers in investment-grade credit want to revamp the way new
bonds are marketed, priced and dis-tributed, pushing Wall Street and reg-ulators to adopt fresh industry stand-ards they say are long overdue.
The Credit Roundtable, an industry group which counts Vanguard Group Inc and T Rowe Price Group Inc among its members, penned an open letter to various market participants suggest-ing dozens of changes, from providing prospectuses immediately when deals are announced to disclosing fi nal order books when they’re priced.
The changes would greatly help as-set managers’ investment and compli-ance processes, according to the let-ter. The push comes as US high-grade
bond sales are on pace for a record year, already surpassing $1.3tn, and as Wall Street’s biggest banks prepare to launch an electronic platform for new issuances that aims to overhaul how the transactions are executed.
“It’s an eff ort to bring the under-writing and distribution of corpo-rate bonds into the 21st century,” said David Knutson, vice chair of the Credit Roundtable and head of credit research for the Americas at Schroder Invest-ment Management.
The Credit Roundtable’s sugges-tions span the entirety of the new is-sue process, which in the investment-grade market typically takes about a day. Other recommendations include allowing a minimum of 30 minutes between the start of the allocation process and pricing of an off ering, and setting a 4:30 pm New York time dead-line for deals to get done before they become the next day’s business. The
recommendations come just months before DirectBooks LLC – a platform run by a consortium of nine of the world’s biggest banks intended to make ordering bonds more effi cient – is set to launch.
Bond buyers are hoping to take ad-vantage of the momentum it’s generat-ed to discuss other aspects of the new-issue process that technology alone can’t solve, according to the letter.
Many of the recommendations deal with what’s seen as a broader lack of transparency in the process of selling new bonds.
Investors want standards set gov-erning the disclosure of roadshow de-tails, initial price talk, maturity dates, size estimates, CUSIP codes and re-demption terms when a deal is fi rst announced. They also suggest regular book building and deal size updates as the off ering progresses.
Companies typically know going
into a deal how much money they’re looking to raise, yet that information isn’t always communicated to inves-tors. Firms often boost off ering sizes as orders come in, and investor interest can drop off as pricing tightens in the issuer’s favor.
Yields on investment-grade bonds have compressed more than 31 basis points on average between initial talk and fi nal pricing for deals sold so far this year, compared to less than 19 ba-sis points last year and 15 basis points in 2018, data compiled by Bloomberg show.
The Credit Roundtable is also asking that a borrower’s expected credit rat-ing be confi rmed before or immediate-ly after a deal is announced, as many investors have limits on what kind of debt they can purchase. Several com-panies including Ralph Lauren Corp and Macy’s Inc were downgraded in the middle of recent bond sales.
TD and CIBC top analysts’estimates with surge in capital markets earningsBloombergToronto
Toronto-Dominion Bank and Canadian Imperial Bank of Commerce reported fi scal
third-quarter results that topped analysts’ estimates as soaring capi-tal markets earnings softened the economic impact of the coronavirus pandemic.
Both Toronto-based lenders benefited from a surge in trading and higher investment-banking fees in the three months through July, joining Royal Bank of Canada, Bank of Nova Scotia and Bank of Montreal in reporting record profit from their capital markets divi-sions in the quarter.
At Toronto-Dominion’s TD Se-curities division, earnings jumped 81% to C$442mn ($336mn), with trading income and underwriting and advisory fees almost doubling from a year earlier.
“Client activity in both Canada and the US has been particularly strong, and that, taken together with very active markets, has re-ally driven additional flows into the business,” Toronto-Dominion chief financial officer Riaz Ahmed said in a phone interview yesterday. “We’ve seen not only record levels of debt underwriting, but we also had good performance in equity underwriting and particularly in fixed-income markets.”
CIBC saw earnings surge 67% to C$392mn at its capital markets division, fuelled by higher trading and fees from deal-making.
The capital markets divisions were the bright spot for all Cana-dian lenders in a quarter marked by elevated loan-loss provisions that eroded overall profit, and lower earnings in their mainstay personal-and-commercial banking businesses. Toronto-Dominion and CIBC, the last of the country’s Big Six banks to report quarterly re-sults, were no different.
Toronto-Dominion, Canada’s second-largest lender by assets, earmarked C$2.19bn for souring loans in the quarter to brace for the economic impacts of the pan-demic, the biggest loan-loss pro-visions among the banks for the three months, though down from a record C$3.22bn set aside in the second quarter.
“We have long known that TD has a greater exposure to Covid-
sensitive loans and unsecured con-sumer credit, but we thought its reserve coverage and capital base were relatively ‘fine’ last quarter,” RBC Capital Markets analyst Darko Mihelic said in a note to clients yes-terday. “TD’s history and culture are based on conservatism, and there-fore we think investors will likely view TD’s reserves and capital lev-els as being at ‘fortress’ levels, but a seed of doubt has been sown.”
CIBC, the country’s fifth-larg-est lender, set aside C$525mn in the quarter, less than the record C$1.41bn in provisions in the sec-ond quarter though still up 80% from a year earlier.
The company’s Canadian per-sonal and commercial banking business, which typically accounts for almost half the bank’s overall earnings, earned C$721mn, about half the total a year earlier. The US retail business saw a 48% earnings drop to C$673mn. Higher provi-sions from a year earlier and tighter net interest margins hurt results for both divisions.
Toronto-Dominion has been fac-ing shrinking net interest margins – the difference between what a bank charges for loans and pays for deposits – as central banks cut rates to shore up economies amid the pandemic. Overall margins were 1.73% in the quarter, com-pared with 1.91% in the prior three months and 1.93% a year earlier, and marking the lowest in at least 18 years.
Net income fell 31% to C$2.25bn, or C$1.21 a share, with adjusted per-share earnings of C$1.25 beat-ing the C$1.23 average estimate of 11 analysts in a Bloomberg survey.
CIBC’s Canadian personal and small-business banking, its biggest business, saw a 23% drop in earn-ings to C$508mn on lower revenue due to the pandemic’s economic impacts. A bright spot, though, was mortgages, with balances rising 3% to C$207bn following two years of underperformance.
The company has a commercial-banking and wealth-management presence on both sides of the Can-ada-US border. At the US business, earnings declined 64% to C$62mn, while at the domestic division they fell 7% to C$320mn.
Net income dropped 16% to C$1.17mn, or C$2.55 a share, with adjusted per-share earnings of C$2.71 topping the C$2.18 average estimate of 12 analysts.
Europe’s chipmakers are vulnerable in US fi ght with HuaweiBloombergLondon
European semiconductor makers don’t rely heavily on US know-how for the chips they supply to
Huawei Technologies Co. They could still take a hit from Washington’s tightening restrictions on the Chinese company.
The US Commerce Department said last week it will require foreign compa-nies to obtain a license if they want to supply Huawei with products based on certain American technology.
A chunk of the components made by European chipmakers such as STMi-croelectronics NV and AMS AG end up in Huawei’s smartphones. Produc-tion of those handsets is likely to be disrupted if their other components do
use US parts or intellectual property.“If Huawei can’t source other parts
for their phones, then it is fair to as-sume that STMicro could see a revenue hit of up to 6%,” brokerage Liberum said in an e-mailed reply to questions from Bloomberg.
Europe has been caught in the mid-dle of escalating tensions between the US and China, with countries in the bloc forced to balance ties with an important security ally and a global trading partner. The UK has decided to ban Huawei from future wireless in-frastructure following intense pressure from Washington.
For now, the US measures haven’t made a big dent in Huawei’s smart-phone sales.
A recovery in China has helped the company to increase its share of a global market that’s been shrink-
ing because of the coronavirus pan-demic. Austrian-based AMS doesn’t need US software or equipment to make its products, such as 3D sens-ing components. However, the US restrictions will still have an impact “if Huawei cannot ship phones,” JP Morgan analyst Sandeep Deshpande said in a note.
AMS said it was assessing the le-gal situation around the latest US restrictions and added “we are not able to speculate at this point to what extent they could apply to our products.”STMicro is “evaluating the new amendments to the rule and will comply accordingly,” a spokes-woman said.
Infi neon Technologies AG – one of Europe’s largest chipmakers – said it’s evaluating the US decision and will re-act accordingly. UK-based tech com-
pany Dialog Semiconductor Plc, which supplies power-management chip for various Huawei products, is monitor-ing the situation closely, according to a person familiar with the matter. Another European chipmaker, NXP Semiconductors NV, didn’t respond to requests for comment.
The European manufacturers face a potentially even greater threat to business if China chooses to retaliate against the latest US move by target-ing one of their most important clients, Apple Inc.
“The European semiconductor in-dustry is more exposed to Apple than they are to Huawei in handsets,” said Dan Ridsdale, global head of TMT at Edison Investment Research. “If Apple did lose market share in China, those market share shifts always impact the supplies into them.”
A machine places single solder balls onto a printed circuit board (PCB) during manufacture at the Infineon Technologies microchip and sensor facility in Regensburg, Germany. European semiconductor makers don’t rely heavily on US knowhow for the chips they supply to Huawei Technologies. They could still take a hit from Wash-ington’s tightening restrictions on the Chinese company.
BUSINESS3Gulf Times
Friday, August 28, 2020
China dairy giant ends Australia deal amid political strainBloombergBeijing
China Mengniu Dairy Co scrapped its plans
to buy Kirin Holdings Co’s Australian unit
after being told the deal would likely be
blocked, amid increasingly strained rela-
tions between Canberra and Beijing.
Australia’s Treasurer Josh Frydenberg
said in a statement he’d informed the Chi-
nese dairy giant he’d reached a preliminary
view that the proposed purchase “would
be contrary to the national interest.”
The companies reached a deal last year
for the Chinese firm to buy Kirin’s Lion
Dairy & Drinks business for about ¥45.6bn
($430mn). The companies said in separate
statements on Tuesday that they were
ending the agreement as it hadn’t received
regulatory approval.
The scrapped deal is being viewed in
local media through the prism of strained
diplomatic ties between Australia and
China. Relations between the two countries
have been fraught since the government
in Canberra barred Huawei Technologies
Co from participating in Australia’s 5G net-
work. China also responded angrily after
Australia’s push for an independent inquiry
into the origins of the Covid-19 outbreak.
China has started an anti-dumping in-
vestigation into Australian product, halted
some beef imports and placed tariff s on
Australia’s barley exports after the conclu-
sion of an earlier anti-dumping probe.
It has also cautioned its citizens against
studying in or holidaying in Australia.
“It was probably politically untenable for
Frydenberg to approve a deal of this size at
a time when China is sanctioning Australia
on multiple fronts,” said Richard McGre-
gor, a senior fellow at Sydney-based think
tank the Lowy Institute. “It’s another spin
in the cycle downwards in these nations’
relations.”
The collapse of the Kirin deal shows a re-
versal of sentiment from a year ago, when
Mengniu won approval to buy organic
infant formula maker Bellamy’s Australia
Ltd for A$1.5bn ($1.1bn). The Australian
Competition & Consumer Commission
said in February that it wasn’t opposed to
the Kirin deal. Chinese Foreign Ministry
spokesman Zhao Lijian declined to com-
ment on the specifics of this case, but
said, “We hope Australia will provide a fair
and unbiased business environment for
Chinese companies operating there.”
Australia announced on March 29 that
due to the national security impacts of the
coronavirus pandemic it would tighten
restrictions on foreign takeovers, with
all deals needing government approval,
regardless of size. Covid-19 has dealt a
heavy blow to Australia’s economy and
unemployment.
On June 5, Scott Morrison’s government
announced it would seek to implement
permanent tougher screening measures
on foreign investors seeking to buy
sensitive assets from January 1. Yet to
be legislated, the changes would see
telecommunications, energy, technology
and defense-manufacturing companies be
included in the zero-dollar threshold for
screening.
The changes will include a new national
security test and give the treasurer last-
resort powers to force asset sales.
Australia isn’t alone in ramping up its
foreign investment screening – in recent
years, economies including the US, Japan
and the European Union have toughened
their own laws to protect national security.
Mengniu said it was disappointed the
transaction could not be completed, as the
Lion business created potential to build
up its dairy supply chain in Oceania and
Southeast Asia. The company’s shares fell
as much as 2.7% in Hong Kong trading on
Tuesday before closing 0.7% lower.
“Mengniu has a stable dairy supply
chain in Australia and New Zealand, and
will continue to pursue its international
strategy and take advantage of the exist-
ing resources in both domestic and inter-
national markets,” the company said in a
written statement to Bloomberg.
Mengniu has been eyeing overseas
acquisitions as China’s appetite for milk
grows with its middle class. At the same
time, China has been seeking to boost the
industry and restore confidence after a
milk scandal in 2008 killed six children and
poisoned 300,000 others.
The termination of the Lion deal will
slow Mengniu’s push to go upmarket, said
Bloomberg Intelligence analyst Kevin Kim.
“Geopolitical tension can drag on
Chinese companies’ overseas M&A at-
tempts, especially if the targets are based
in countries where China faces political
tension,” Kim said. “For overseas deals to
be successful, the general opinion is very
important, especially for critical sectors for
the nation.”
Kirin shares slipped 1.2% in Tokyo.
“Although this was an unfortunate
outcome, we’ll continue to discuss the best
potential scenario for Lion,” a Kirin spokes-
man said.
McGregor said the development “signals
to China that any substantial investment
in Australia will come under increased
scrutiny and be seen in the context of the
tensions in the bilateral relationship” - re-
sulting in a possible worsening of ties.
“China will probably see this as another
example of Australia’s bad faith,” he said.
China’s air travel recovery shows power of vast home marketBloombergBeijing
China’s biggest airlines could provide some much-needed encouragement for an aviation
industry starved of good news when they report earnings later this week.
While the coronavirus will still likely saddle Air China Ltd, China Eastern Airlines Corp and China Southern Airlines Co with losses for the latest quarter, fi nancial statements from the so-called Big 3 may point to a nascent recovery in air travel thanks to demand in their vast domestic market.
July traffi c fi gures were promising, with passenger numbers for the three airlines rising about 25% from June as travel within China picked up. The trio fl ew a total of 22mn passengers domestically last month, more than 500 times as many fl own at all by Hong Kong-based Cathay Pacifi c Airways Ltd, which has no home market to fall back on.
Travel analytics company Forward-Keys predicts air travel in China will fully recover by next month. Ticket
bookings in the second week of Au-gust reached 98% of last year’s levels, it said, adding that the country’s avia-tion market bottomed in February and has climbed slowly ever since.
After being the fi rst hit by Covid-19, which erupted in Wuhan in January, China is emerging from the crisis; it’s the only major economy on track to expand this year. Businesses have reo-pened and people are traveling again after the government eased restric-tions on movement, including for in-ter-provincial group tours. The FTSE China A 600 Travel & Leisure Index has climbed more than 50% in three months.
Popular Chinese destinations in-clude Jiuzhaigou, famous for its color-ful lakes, and Yangshuo and cities such as Chengdu, Shanghai and Beijing. Some places are receiving almost three times the number of visitors than last quarter, HSBC Holdings Plc analysts led by Parash Jain wrote in a note dated August 17, citing Trip.com data. Hotels have also become busier after the curbs were lifted. Occupancy rates in Shang-hai reached 65.8% in the August 9-15 week compared with just 6% in Feb-
ruary. “This should boost load factors further and allow airlines to improve yields, a key profi t driver,” Jain said, noting that Chinese carriers generate most profi t on domestic routes. “Do-mestic traffi c has been consistently showing signs of a recovery, while in-ternational traffi c has still to take off meaningfully due to hurdles from trav-
el restrictions and quarantine require-ments,” he said.
Some carriers including China Eastern and China Southern have of-fered ticket deals that allow unlimited fl ights, sacrifi cing some of their bot-tom line to lure customers back. OAG Aviation Worldwide said scheduled capacity in Asia’s biggest economy
reached 15.6mn seats this week, only around 8% lower than toward the end of January when the outbreak began. By contrast, US capacity is still down 43.1% from January at 11.8mn seats.
Olivier Ponti, vice president of in-sights at ForwardKeys, said the aggres-sive price promotions greatly stimu-lated demand.
“The big question is whether heavy discounting will still be needed to maintain the recovery or whether the industry will return to profi tabil-ity during the upcoming Golden Week holiday in October,” he said.
The recovery is a striking turna-round given how hard the virus hit. The damage has been so grave globally that the International Air Transport Association doesn’t expect the world’s airlines to recover to pre-pandemic levels before 2024.
While the July traffi c reports from the Big 3 showed an improvement at home, their international passenger traffi c was still down 96% or more from a year earlier. The carriers also took a beating in the fi rst quarter with a combined loss of 14bn yuan ($2bn) and, according to HSBC’s Jain, they’re
headed for a full-year loss of 24.2bn yuan. Second-quarter fi gures, which the three are due to release Friday, should show an improvement from January-March thanks to higher pas-senger traffi c and the yuan’s resilience against the dollar, Jain said.
Lower oil prices could also help numb some of the pain. Jet fuel fell to less than $20 a barrel in May and is likely to average $45 in 2020, accord-ing to Paul Yong, a Singapore-based aviation analyst at DBS Group Hold-ings Ltd.
“With revenue from domestic routes making up about two-thirds of total revenue for China’s Big 3 and with rel-atively low jet fuel prices, this should help them outperform their Asian peers that have higher international route exposure,” Yong said.
Yong has buy ratings on the Hong Kong-listed shares of all three carriers, as well as the mainland-listed stock of Air China and China Eastern. He has a hold recommendation on China Southern’s Shanghai-listed shares. The Big 3 are overwhelmingly rated buy or equivalent by analysts tracked by Bloomberg.
Hunt for real yields may drive investors into Asian bonds
BloombergShanghai
A slump in real yields on US Treasury bonds is set to stoke demand for Asian
government debt as the search for income forces investors to take on more risk.
Ten-year government yields, adjusted for expected infl ation in 2021, are positive in Indo-nesia, India, China, Thailand, Malaysia and South Korea, ac-cording to HSBC Holdings Plc. For the US, which has a devel-oped infl ation-protected secu-rities market, the comparable real yield fell to a record low of minus 1.12% this month, refl ect-ing loose monetary policy and the belief that America’s recov-ery from the pandemic will spur consumer prices.
The higher rates in Asia signal that more investment is set to fl ow into the region, according to Nordea Markets and JPMorgan Asset Management. So far this quarter, foreign investors have poured a net $39bn into a clutch of Asian bond markets, data compiled by Bloomberg show.
“Historically low real rates in the US, coupled with the pros-pect of prolonged dollar weak-ening, should direct more port-folio fl ows to Asia Pacifi c as the region off ers more attractive yields,” said Amy Yuan Zhuang, a senior Asia analyst at Nordea Markets.
A weaker dollar aside, some strategists predict more demand for Asian assets due to the pan-demic being better contained in parts of the region relative to developed nations, though the picture varies by country. A surprise sustained climb in the greenback together with a bet-ter US outlook - for instance if a vaccine is found – could roil such forecasts.
HSBC strategists led by An-dre de Silva favor Indonesian and Malaysian local government bonds among higher yielding Asian debt, describing Indone-sia in a note as the “stand-out” with a 3.75% real yield based on anticipated infl ation.
They also state a preference for “high-quality low yielders,” such as bonds issued by China and South Korea, and are “mild-ly bearish” on Indian debt amid a resurgence in infl ation and ex-pectations of increased supply.
The Bloomberg Barclays Asian-Pacifi c Aggregate Index has climbed 1.8% this year, un-derperforming the 5.7% gain for the Bloomberg Barclays Global Aggregate Index, where a rally in US Treasuries aided returns.
The yield diff erential that’s opened up between some Asian sovereign bonds and Treasur-ies will “reduce the appeal” of holding US government debt, said Julio Callegari, Asia fi xed-income portfolio manager at JPMorgan Asset Management in Hong Kong.
In Australia, the government on Wednesday said it received more than A$66bn ($48bn) of bids for a record sale of A$21bn in new 11-year sover-eign bonds, priced with a yield of 1.055%. The overwhelming demand underscored investors’ appetite for yield.
Singapore is facing worst recession in its historyBloombergSingapore
Singapore has long been the city of choice for Western expats wanting an easy entrée into Asia.
Clean, effi cient, with low tax rates, it’s often seen as rivalling Hong Kong, especially with that city hit by street protests and unrest over China’s new national security law.
Yet just when Singapore should be a magnet for global talent, some re-cruiters say the barriers to entry are mounting. The city is facing the worst recession in its history, forcing a re-think for some fi rms on expansion and hiring plans. Alongside soaring unem-ployment has come a spike in rhetoric against foreigners, seen by some Singa-poreans as taking jobs from locals.
An experienced nurse from New Zea-land is fi nding out how tough it can be. She seemed, on paper at least, the ideal expat – arriving right before Covid-19. But 11 months and over 200 failed ap-plications later, she says she’s on the verge of going home, unable to land a work pass.
She was told by companies that they have a quota and the quota is met, she said, asking not to be identifi ed for fear of jeopardising her partner’s work permit. When attempts to volunteer at hospitals were similarly rejected, she said she felt like she didn’t belong.
The uncertain job prospects, online commentary and stricter conditions risk making Singapore a less welcoming des-tination just as the city-state needs for-eign investment the most. And as work-places clamp down on hiring it could further limit the options for expats who have long seen a stint in Asia as an im-portant and lucrative experience.
The Singapore government has add-ed to their angst by taking steps to pro-mote local hiring, raising concern that it will come at the expense of expats. Ear-lier this month, it put 47 companies on a watch-list for suspected discrimina-tory hiring practices. The list includes banks, fund managers and consulting fi rms that may have pre-selected for-
eigners for jobs or not given Singapore-ans a fair chance. This adds to the 240 companies already under scrutiny. The names of the fi rms weren’t disclosed.
And in May, it tightened the frame-work that governs employment passes for foreigners, increasing the minimum monthly salary to S$3,900 ($2,840) and further expanding rules requiring employers to advertise job openings to locals fi rst. The government on Thurs-day raised that salary threshold again to S$4,500 starting next month, and will boost it to S$5,000 in December for the fi nancial services sector. For more experienced workers, those “in their 40s,” the threshold will be about double those new levels for the youngest appli-cants, according to a statement.
“I wouldn’t be surprised if there was a contraction in the number of visas is-sued because the demand for foreign-ers is going to be less” in the near term, said Hays regional director for Singapore Grant Torrens, citing the sharp contrac-
tion as the main driver. The role of foreign workers became a key election issue this year, with several opposition candidates campaigning on claims that overseas talent is taking local jobs. The Workers’ Party, which clinched more seats than ever, published a manifesto that included tightening employment pass approvals.
“The only reason we have foreign-ers here is to give an extra wind in our sails when the opportunity is there,” Minister of Foreign Aff airs Vivian Balakrishnan said in a televised election debate in July. “Now we are in a storm, and we need to shed ballast.”
Balakrishnan’s offi ce said in response to Bloomberg queries on the comment that there will be a disproportionate impact on the foreign workforce in a downturn.
Foreign workers on employment passes – the sort issued to highly skilled workers as opposed to work permits for blue-collar jobs – typically comprise around 5% of the total workforce. Yet
among top managers and professionals in some key sectors, the ratio of foreign-ers can be much higher. Non-Singapo-reans made up 57% of senior manage-ment roles across the fi nancial services sector, the government said in August.
Andrew Zee, team lead for fi nancial services at Selby Jennings, said some of his job candidates were recently denied permits – a fi rst for him in more than four years – though they were later ap-proved on appeal.
Sirva Inc, which owns Allied Pick-fords, said inquiries from people want-ing to move to Singapore in the fi rst sev-en months of the year were down 23% from the same period in 2019, according to Amanda Jones, senior vice president of sales and account management. Jones doesn’t expect to see expat executives coming to Singapore at pre-Covid num-bers until 2022 at best, especially given travel curbs and the recession.
The shift is starting to be felt in the real estate market. Ella Sherman, an
associate executive sales director at Knight Frank in Singapore who special-ises in expat housing, says she normally signs about four rental agreements a month this time of year. Now she’s lucky to secure one, and knows of sev-eral clients heading home.
Beyond the economic woes and the pandemic lies an unease over foreign-ers in the country of just 5.7mn people. This has surfaced in public calls, often on social media, for more hiring of lo-cals. When a Facebook post targeting foreign executives at $215bn investment giant Temasek Holdings Pte went viral this month, chief executive offi cer Ho Ching responded with a post of her own describing it as “a cowardly act of hate.”
Companies are taking pains to de-scribe their eff orts to retain Singapo-rean jobs. When Millennium Hotels and Resorts laid off 159 employees this month, it noted that the move lifted its “core” Singaporean workforce to 69%. After casino operator Resorts World Sentosa reportedly cut 2,000 jobs last month, the Ministry of Manpower is-sued a statement saying the majority of aff ected workers were foreigners.
“After the retrenchment exercise, RWS has a stronger Singaporean Core,” the ministry said.
Even expats abroad are feeling the pinch. One worker was overseas and between jobs when the pandemic struck. Though he quickly found a new position, he said his employment pass submission has been rejected several times with no explanation.
He’s now stuck in Europe paying rent for his empty home in Singapore, unable to return until his visa gets ap-proved. He declined to be identifi ed for fear of jeopardising his application. He said the rising anti-foreigner rhetoric was equally worrisome.
For some, the social tensions were brought to the fore when a few expats were caught breaching government-imposed lockdowns by drinking and mingling outdoors without masks in May. The incident sparked an ugly de-bate on social media and prompted a minister to caution against the “vis-ceral reaction” by locals.
A man jogs along the Singapore River as the financial business district is seen in the background. The city is facing the worst recession in its history, forcing a rethink for some firms on expansion and hiring plans.
BUSINESS
Gulf Times Friday, August 28, 20204
Ant IPO: Jack Ma’s fi ntech giant faces overseas hurdlesBy Nisha GopalanBloomberg Opinion
Ensconced in a lucrative niche at home, Jack Ma’s Ant Group nevertheless has to look outward. And expanding overseas has never looked so difficult for China’s biggest payments app, even with the war chest from what may be a world-record initial public offering.Ant will have no problems raising the $30bn it’s seeking in this mega-IPO. Few investors will pass up the chance to buy into the owner of Alipay, a super-app that offers access to everything from insurance and funds to loans and even groceries. For US institutions, the lure of the world’s most valuable unicorn is likely to overshadow the threat of further action against Chinese companies by President Donald Trump, who has already issued executive orders targeting Tencent Holdings Ltd’s WeChat, Alipay’s biggest domestic rival.China sales account for about 95% of Ant’s revenue. Yet overseas expansion is destined to become more important to the company. Ant is already so large and dominant at home that its growth inevitably will slow. It also faces intensifying competition in China, not only from WeChat and other technology rivals but from foreign financial firms such as American Express Co, which in June became the first overseas payments network to be allowed to start processing local currency transactions. The real killer app may come from Beijing, which is testing a digital yuan that will offer all the convenience of electronic money.Tighter regulation may also weigh on Ant’s ability to grow in China. For all the company’s attempts to rebrand itself as a technology firm (a more lightly regulated industry), it still looks more like a financial-services business, as my colleagues Shuli Ren and Anjani Trivedi have written. The company’s Yu’E Bao money-market fund, which grew to become the world’s largest, has already had its wings clipped by Beijing’s financial watchdogs. A quick trawl through Ant’s 674-page prospectus shows just how much attention this issue is consuming: “Regulation” appears almost 500 times.
Against this backdrop, Ant identified cross-border expansion as one of the four uses for its IPO proceeds. The company intends to enhance its international payment capabilities, invest in technology and develop more digital payment, finance and daily-life services for consumers, merchants and partners beyond China, according to the filing.Tourism has been key to the extending reach of Alipay and WeChat Pay. China was the world’s largest source of overseas tourists in 2018, and also the world’s largest spender, driving increased acceptance of the Chinese payment apps in cities from Paris to Bangkok. Post-IPO, Ant faces a dramatically changed environment, with the Covid pandemic having sent the global tourist industry into cold storage.Geopolitics, meanwhile, was a problem for the company even before US-China tensions reached cold-war levels. In early 2018, Ant scrapped its takeover of MoneyGram International Inc after the US raised national security concerns. The company also backed out of a promise to create 1mn jobs in the US, with Ma blaming the trade spat between the countries. The IPO filing devotes three pages to geopolitical risks, most centered on the US Unlike its shareholder Alibaba Group Holding Ltd, Ant decided against selling shares in New York, opting instead for a dual Hong Kong and Shanghai listing. It still may be exposed to potential future US sanctions, though.Since the MoneyGram deal collapsed, the company has mainly focused on its Asian backyard. Even here, progress faces hurdles. India banned dozens of Chinese apps in June, following a border clash. Alibaba’s UC Browser was banned, though Ant-invested Paytm has escaped sanction. Southeast Asia, where mobile payments and credit card penetration are relatively low, offer more opportunities, though homegrown competition from the likes of Singapore’s Grab and Indonesia’s GoJek is on the rise. A fast-growing business with 1bn customers and a seat at the cutting edge of financial technology is creating understandable excitement. Investors should temper that with a recognition that Ant’s future may be a lot harder than its past.
Sensex rises; rupee strengthensBloomberg, ReutersMumbai
Indian benchmark share indices continued upward march for the fifth straight session yesterday but settled with minor gains led by realty stocks.After opening 220 points higher, the BSE Sensex succumbed to fag-end selloff and settled 39.55 points or 0.10% higher at 39,113.47. Likewise, the NSE Nifty failed to hold 11,600 mark and ended the session at 11,574, up 24.40 points or 0.21%.IndusInd Bank, closing over 6% higher, was the top Sensex gainer followed by M&M, SBI, HDFC, Sun Pharma and Axis Bank. RIL, ONGC, Bajaj Auto and Kotak Bank were among the laggards. Of 30 Sensex shares, 15 closed in the red.Meanwhile the Indian rupee closed at five-and-a-half month high yesterday as investors awaited fresh cues from the US Federal Reserve
and the Reserve Bank of India. The domestic currency gained 48 paise to close at 73.82 against the US dollar on Thursday - a level last seen on 11 March. Year to date, it has lost 3.31%.At the interbank forex market, the rupee opened at 74.29, and touched an intraday high of 73.81 and a low of 74.37.Forex traders said foreign fund outflow, positive domestic equities and a weak US dollar supported the rupee, but investors preferred to stay on the sidelines.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.15% to 92.87.Foreign institutional investors have net bought $4.65bn in equity and are net sellers of $14.68bn in debt markets respectively since the beginning of 2020, while domestic institutional investors invested Rs46646.63 crore in stocks, according to data on the exchanges.
The rupee gained 48 paise to close at 73.82 against the US dollar yesterday, a level last seen on March 11
Penny stock boom sparks 4,300% gain in Indian fi rm with no salesBloombergMumbai
Retail investors’ frenzy over small stocks in India has reached such extremes that shares of
some companies that aren’t booking any sales, let alone profi ts, are going through the roof.
These include Transglobe Foods Ltd, a fruit-jam maker that has sky-rocketed more than 4,300% this year, and real-estate services fi rm Shree Precoated Steels Ltd, which has jumped over 1,300%. Both companies reported losses on no sales in the latest fi scal year.
The prospect of risky investments turning sour raises concerns that any sudden withdrawals by small trad-ers could wind up hurting the broader market as well.
That’s due to the rapid expansion in the presence of individual inves-tors in India’s stock market, mirroring record sign-ups seen at US brokerages including Robinhood during virus-related lockdowns.
“The outperformance of retail-driven small stocks raises the risk of a pullback and some contagion” to broader markets, said Sumeet Rohra, a fund manager at Smartsun Capi-tal Pte in Singapore. Investors should stick with “quality stocks which have not participated, rather than chasing small caps,” he said.
India, like some other Asian na-tions, allows companies with zero
revenue to stay listed on exchanges as long as they meet certain criteria based on net worth and fi nancial per-formance. The South Asian nation’s stock exchanges have more than 450 companies that reported zero revenue for the latest year, according to data compiled by Bloomberg.
While stocks of all sizes have roared back from the depths of the pandemic selloff , the recovery in smaller Indian shares has been stronger. The S&P BSE Small Cap Index has surged 70% from its March low and is now up
9.8% for the year. In comparison, the benchmark Sensex has climbed about 50% from its low and is still down 5% in 2020.
The small cap rally has been aid-ed by the infl ux of amateur traders, with about 2.8mn new retail accounts opened since March, according to data from Central Depository Services (In-dia) Ltd. The fl ood of individuals, many with limited knowledge of fundamen-tal and valuation metrics, is making some pros reconsider their positions.
“It is time to book some profi ts, as
retail money is chasing penny stocks like crazy,” said Chokkalingam G, chief investment offi cer at Equinomics Re-search & Advisory Ltd in Mumbai. “People are buying anything without knowing its price-to-earnings ratio or Ebitda or earnings,” said Chokka-lingam, who estimates that individual investors now account for about half of total trading in Indian equities ver-sus about a third last year.
India’s overall equity market value has increased by $780bn from the March low, according to data com-piled by Bloomberg. This hasn’t been all due to local individuals – India is one of the few Asian markets where foreigners are net buyers in 2020.
It’s also true that some broad-ening of the rally is welcome given concerns not long ago that gains were being dominated by just a few big names. Technicals are support-ive, with the Sensex keeping below overbought levels, but some still see a need for caution.
True Beacon, a top-performing In-dian hedge fund, told Bloomberg last week that it has trimmed bullish bets as the market has run ahead of funda-mentals. It encouraged retail investors to stick with blue-chip companies.
“Unfortunately in euphoric condi-tions such as right now, people ignore important fi nancial information and then burn their fi ngers” said Deven Choksey, who oversees investment and research as managing director at KRChoksey Investment Managers Pvt. “Amateurs will loose money.”
Wall St rally fails to cheer Asia markets as tensions mountAFPHong Kong
Asian markets were mixed yes-terday ahead of a key policy speech by Fed chief Jerome
Powell, while geopolitical concerns re-turned after Beijing fired missiles into the South China Sea and the US sanc-tioned several Chinese firms linked to the disputed region.
A fourth successive record on Wall Street was not enough to stoke a rally in Asia, with a fresh flare-up in coro-navirus cases in the region keeping dealers grounded.
The mood in Asia was more down-beat compared with earlier in the week with Bloomberg News reporting China had fired four ballistic missiles as part of a military exercise, a day after a fly-over by a US spy plane.
The region is one of a number of is-sues over which China-US tensions have spiked in recent months.
In July, Washington declared Bei-jing’s pursuit of territory and resourc-es there illegal, explicitly backing the
territorial claims of Southeast Asian countries against China.
And on Wednesday, it imposed sanctions and restrictions on 24 Chi-nese companies and associated offi-cials for taking part in building artifi-cial islands in the disputed waters.
The US Commerce Department said the firms “enabled China to construct and militarise disputed outposts in the South China Sea”.
Hong Kong lost 0.8% with HSBC taking a hit after being slammed by US Secretary of State Mike Pompeo over reports it had frozen access to credit card and bank accounts for ex-ecutives of independent media group Next Media.
Tokyo lost 0.4% and Seoul retreated more than 1% while Taipei, Singapore and Manila were also in the red.
But Shanghai, Mumbai and Bangkok were up 0.6%, Sydney added 0.2% and Jakarta edged 0.1% higher.
London, Frankfurt and Paris slipped in the morning.
Wellington trade was halted in the morning after the exchange was hit by a third cyber attack in as many days,
forcing operator NZX to carry out a probe.
With earnings season gone and China-US trade talks settled for now — despite ongoing tensions — the next point of focus is Powell’s presentation at the virtual meeting of global cen-tral bankers, in which he is expected to outline the Federal Reserve’s monetary policy plans.
The US central bank has provided crucial support worth trillions of dol-lars to the world’s top economy during the virus crisis, helping stocks bounce back from their March troughs.
While observers predict the speech will outline a new policy framework for inflation and interest rates, there is also some hope for some further eas-ing measures, especially with lawmak-ers in Washington failing to reach any agreement on a new stimulus.
“There is some speculation that (Powell) could well explore or hint at a new policy of average inflation tar-geting,” said Michael Hewson at CMC Markets.
“This means that central bank poli-cymakers would be prepared to toler-
ate prices rising above (the Fed’s target of) 2% for periods of time to compen-sate for other periods of time when in-flation is running below target.”
He added that Powell would also likely “ram home the message from his previous press conference that the recovery still largely depends on the virus, and the Fed remains ready to do whatever is necessary to support the economy”.
Oil traders are keeping tabs on Hur-ricane Laura in the Gulf of Mexico, which made landfall in Louisiana yes-terday morning.
Around 3mn barrels a day of refin-ing capacity have been closed after US authorities said the hurricane could bring “potentially catastrophic storm surges, extreme winds and flash flooding”.
Crude prices were flat but were holding around five-month highs.
In Tokyo, the Nikkei 225 closed down 0.4% to 23,208.86 points; Hong Kong — Hang Seng ended down 0.8% to 25,281.15 points and Shanghai Composite closed up 0.6% to 3,350.11 points yesterday.
Employees work on the trading floor of the Tokyo Stock Exchange. The Nikkei 225 closed down 0.4% to 23,208.86 points yesterday.
Zad Holding CoWidam Food CoVodafone Qatar
United Development CoSalam International Investme
Qatar & Oman Investment CoQatar Navigation
Qatar National Cement CoQatar National Bank
Qatar Islamic Insurance GrouQatar Industrial Manufactur
Qatar International IslamicQatari Investors Group
Qatar Islamic BankQatar Gas Transport(Nakilat)Qatar General Insurance & ReQatar German Co For Medical
Qatar Fuel QscQatar First Bank
Qatar Electricity & Water CoQatar Exchange Index Etf
Qatar Cinema & Film DistribAl Rayan Qatar Etf
Qatar Insurance CoQatar Aluminum Manufacturing
Ooredoo QpscNational Leasing
Mazaya Qatar Real Estate DevMesaieed Petrochemical Holdi
Al Meera Consumer Goods CoMedicare Group
Mannai Corporation QscMasraf Al Rayan
Al Khalij Commercial BankIndustries Qatar
Inma Holding CompanyInvestment Holding Group
Gulf Warehousing CompanyGulf International Services
Ezdan Holding GroupDoha Insurance Co
Doha Bank QpscDlala Holding
Commercial Bank PsqcBarwa Real Estate Co
BaladnaAl Khaleej Takaful Group
Aamal CoAl Ahli Bank
15.40
7.00
1.30
1.21
0.58
0.90
5.86
4.01
18.36
6.28
3.02
8.56
2.14
16.19
2.76
2.24
2.52
18.34
1.42
17.47
9.70
3.50
2.27
2.10
0.96
6.70
1.05
1.19
2.13
20.21
7.62
3.00
4.19
1.63
9.85
4.68
0.57
5.12
1.67
1.43
1.15
2.41
1.95
4.10
3.37
1.94
1.90
0.89
3.23
0.65
0.01
0.00
0.50
10.00
3.57
-0.46
0.00
0.16
0.03
0.00
-0.49
-0.05
0.06
-0.83
0.00
-1.18
-0.05
0.57
0.06
-0.10
0.00
0.18
-0.62
0.74
0.00
4.06
9.92
0.00
1.05
0.26
1.45
0.53
0.62
-1.50
4.72
5.01
-1.54
0.12
0.21
0.79
0.17
-0.10
-0.49
0.63
0.94
0.32
0.68
0.00
45,464
59,510
2,410,369
11,901,787
93,347,078
27,463,398
632,064
195,868
1,110,694
114,669
55,179
1,137,703
222,067
787,180
2,680,224
-
8,843,068
1,502,847
6,538,269
240,132
5,000
-
19,693
1,610,900
26,676,491
423,919
53,758,947
38,617,438
1,438,991
119,274
760,531
33,777
4,647,241
57,033
2,285,207
8,993,099
155,507,055
4,264,830
1,034,363
6,516,497
126,019
132,151
6,014,860
1,363,750
5,107,792
7,222,088
1,487,599
36,478,153
-
QATAR
Company Name Lt Price % Chg Volume
KUWAIT
Company Name Lt Price % Chg Volume
OMAN
Company Name Lt Price % Chg Volume
KUWAIT
Company Name Lt Price % Chg Volume
KUWAIT
Company Name Lt Price % Chg Volume
Oman PackagingOman Oil Marketing Company
Oman National Engineering AnOman Investment & Finance
Oman Intl MarketingOman Flour Mills
Oman Fisheries CoOman Europe Foods Industries
Oman Education & Training InOman Chromite
Oman ChlorineOman Ceramic Company
Oman Cement CoOman Cables Industry
Oman & Emirates Inv(Om)50%Natl Aluminium Products
National Real Estate DevelopNational Mineral Water
National Life & General InsuNational Gas Co
National Finance CoNational Detergent Co Saog
National Biscuit IndustriesNational Bank Of Oman Saog
Muscat Thread Mills CoMuscat Insurance Co Saog
Muscat Gases Company SaogMuscat Finance
Muscat City Desalination CoMajan Glass Company
Majan CollegeHsbc Bank Oman
Hotels Management Co InternaGulf Stone
Gulf Mushroom CompanyGulf Investments Services
Gulf Invest. Serv. Pref-SharGulf International Chemicals
Gulf Hotels (Oman) Co LtdGlobal Fin Investment
Galfar Engineering&ContractGalfar Engineering -Prefer
Financial Services Co.Financial Corp/The
Dhofar TourismDhofar Poultry
Dhofar Intl DevelopmentDhofar Insurance
Dhofar Generating Co SaocDhofar Fisheries & Food Indu
Dhofar CattlefeedDhofar Beverages Co
Construction Materials IndComputer Stationery Inds
Bankmuscat SaogBank Nizwa
Bank Dhofar SaogArabia Falcon Insurance Co
Aloula CoAl-Omaniya Financial Service
Al-Hassan Engineering CoAl-Fajar Al-Alamia Co
Al-Anwar Ceramic Tiles CoAl Suwadi Power
Al Sharqiya Invest HoldingAl Maha Petroleum Products M
Al Maha Ceramics Co SaocAl Madina Takaful Co Saoc
Al Madina Investment CoAl Kamil Power Co
Al Jazerah Services -PfdAl Jazeera Steel Products Co
Al Jazeera ServicesAl Izz Islamic Bank
Al Buraimi HotelAl Batinah PowerAl Batinah Hotels
Al Batinah Dev & InvAl Anwar Holdings Saog
Al Ahlia Insurance Co SaocAhli Bank
Acwa Power Barka SaogAbrasives Manufacturing Co S
A’saff a Foods Saog0Man Oil Marketing Co-Pref
#N/A Invalid Security#N/A Invalid Security
0.30
0.61
0.12
0.09
0.52
0.78
0.09
1.00
0.24
3.64
0.28
0.42
0.23
0.46
0.05
0.11
5.00
0.09
0.32
0.17
0.15
0.60
3.92
0.18
0.07
0.35
0.22
0.05
0.11
0.18
0.19
0.09
1.25
0.12
0.31
0.07
0.11
0.11
3.88
0.06
0.05
0.39
0.18
0.08
0.49
0.18
0.27
0.17
0.19
1.28
0.11
0.26
0.03
0.26
0.39
0.10
0.11
0.09
0.08
0.08
0.02
0.75
0.16
0.06
0.07
0.58
0.21
0.08
0.03
0.35
0.55
0.10
0.17
0.00
0.88
0.06
1.13
0.07
0.07
0.37
0.14
0.60
0.05
0.60
0.25
0.00
0.00
0.00
0.00
2.65
2.17
0.00
0.00
0.00
0.00
3.45
0.00
0.00
0.00
-1.29
0.00
-2.04
0.00
0.00
0.00
-1.23
1.21
0.00
0.00
0.00
0.00
0.00
0.00
2.36
-1.92
0.00
0.00
0.00
-3.09
0.00
0.00
0.00
1.45
0.00
1.92
0.00
0.00
-1.89
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.49
0.00
0.00
0.00
0.00
3.90
0.00
0.00
1.95
0.00
0.00
5.11
3.98
1.32
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
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-
-
35,000
471,383
-
-
-
-
10,000
-
-
-
6,825
10,560
233,631
-
-
-
40,000
164,250
-
-
-
-
-
-
11,900
795,604
2,500
-
-
87,000
-
-
-
229,329
-
10,000
-
-
156,360
-
-
-
-
-
-
-
1,000
-
-
-
-
-
661,074
17,584
345,000
-
-
377,800
18,000
-
372,595
986
795,280
8,650
5,838
416,116
50,000
-
-
-
-
-
-
210,100
-
-
31,299
-
100
-
-
-
-
-
-
Al-Madar Finance & Invt CoGulf Petroleum Investment
Mabanee Co SakcInovest Co Bsc
Al-Deera Holding CoMena Real Estate Co
Amar Finance & Leasing CoUnited Projects For Aviation
National Consumer Holding CoAmwal International InvestmeEquipment Holding Co K.S.C.C
Arkan Al Kuwait Real EstateGfh Financial Group Bsc
Energy House Holding Co KscpKuwait Co For Process PlantAl Maidan Dental Clinic Co KNational Shooting CompanyAl-Ahleia Insurance Co Sakp
Wethaq Takaful Insurance CoSalbookh Trading Co Kscp
Aqar Real Estate InvestmentsHayat Communications
Soor Fuel Marketing Co KscTamkeen Holding Co
Alargan International RealBurgan Co For Well Drilling
Kuwait Resorts Co KsccOula Fuel Marketing Co
Palms Agro Production CoMubarrad Holding Co Ksc
Shuaiba Industrial CoAan Digital Services Co
First Takaful Insurance CoKuwaiti Syrian Holding Co
National Cleaning CompanyUnited Real Estate Company
AgilityKuwait & Middle East Fin Inv
Fujairah Cement IndustriesLivestock Transport & Tradng
International Resorts CoNational Industries Grp Hold
Warba Insurance CoFirst Dubai Real Estate Deve
Al Arabi Group Holding CoKuwait Hotels Sak
Mobile Telecommunications CoEff ect Real Estate Co
Tamdeen Real Estate Co KscAl Mudon Intl Real Estate Co
Kuwait Cement Co KscSharjah Cement & Indus Devel
Kuwait Portland Cement CoEducational Holding Group
Bahrain Kuwait InsuranceAsiya Capital Investments Co
Kuwait Investment CoBurgan Bank
Kuwait Projects Co HoldingsAl Madina For Finance And In
Kuwait Insurance CoAl Masaken Intl Real Estate
Intl Financial AdvisorsFirst Investment Co Kscc
Al Mal Investment CompanyBayan Investment Co Kscc
Egypt Kuwait Holding Co SaeCoast Investment Development
Privatization Holding CompanInjazzat Real State Company
Kuwait Cable Vision SakSanam Real Estate Co Kscc
Ithmaar Holding BscAviation Lease And Finance C
Arzan Financial Group For FiAjwan Gulf Real Estate Co
Kuwait Business Town Real EsFuture Kid Entertainment And
Specialities Group Holding CAbyaar Real Eastate Developm
Dar Al Thuraya Real Estate CKgl Logistics Company Kscc
Combined Group ContractingJiyad Holding Co Ksc
Warba Capital Holding CoGulf Investment House Ksc
Boubyan Bank K.S.CAhli United Bank B.S.C
Osos Holding Group Co
92.00
19.00
647.00
57.00
16.00
24.40
47.20
465.00
54.80
36.10
15.20
83.50
51.50
21.50
315.00
1,220.00
15.50
382.00
23.70
28.80
63.00
74.80
108.00
5.20
92.00
68.80
46.80
109.00
60.00
55.70
124.00
10.50
40.00
26.50
54.00
50.00
625.00
110.00
31.00
185.00
0.00
158.00
78.60
37.10
198.00
87.50
592.00
20.50
257.00
15.90
167.00
42.20
741.00
289.00
200.00
31.50
113.00
198.00
151.00
10.70
350.00
31.40
30.80
29.80
9.20
47.90
374.00
34.50
40.50
78.00
14.00
30.00
22.30
158.00
56.90
10.70
24.10
76.50
66.10
7.10
128.00
24.90
161.00
33.30
45.90
93.90
570.00
226.00
97.60
8.88
2.70
-0.46
3.64
0.63
1.24
0.00
0.00
0.00
0.00
1.33
0.00
1.58
-1.38
1.61
0.00
0.00
0.00
-2.47
-0.69
-3.82
-14.12
0.00
0.00
0.00
9.55
2.86
0.00
0.00
1.27
0.00
1.94
1.78
0.00
5.68
0.00
-0.16
-5.17
2.99
0.00
0.00
-0.63
0.00
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-1.91
0.34
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0.00
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2.63
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0.00
3.28
1.80
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0.00
0.94
1.16
-4.85
0.00
4.93
-1.08
-0.21
0.00
0.00
-4.03
-1.27
0.00
0.00
0.00
-0.63
7.16
0.94
2.55
-8.49
2.01
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0.00
1.22
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-0.60
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7.93
0.18
1.35
0.00
8,859,227
14,133,343
469,465
138
1,496,200
386,055
-
-
-
-
166,000
-
14,093
21,907
1,053,352
-
-
-
513,501
207,862
1,000
5,101
1,302
-
-
28,145
74,909
149
-
12,013
-
5,507,042
8,300
-
467,923
-
768,199
372,210
232,880
258,601
-
904,742
15,050
2,231,849
-
2,000
1,931,870
-
-
-
479,751
-
20,640
-
-
112,599
1,202,983
2,548,484
1,703,881
1,576,139
8,268
1,000
-
7,275,690
1,009,264
45,000
-
323,523
368,936
150,100
-
-
-
3,325,089
30,251,099
284,564
3,343,272
1,000
128,750
2,128,787
-
890,575
540,047
90,160
29,900
4,294,904
721,067
19,018,800
-
Al-Eid Food KscQurain Petrochemical Industr
Advanced Technology CoEkttitab Holding Co Sak
Real Estate Trade Centers CoAcico Industries Co Kscc
Kipco Asset Management CoNational Petroleum Services
Alimtiaz Investment GroupRas Al Khaimah White Cement
Kuwait Reinsurance Co KscKuwait & Gulf Link Transport
Humansoft Holding Co KscAutomated Systems Co Kscc
Metal & Recycling CoGulf Franchising Holding Co
Al-Enma’a Real Estate CoNational Mobile Telecommuni
Sanad Holding Co KsccUnicap Investment And Financ
Al Salam Group Holding CoAl Aman Investment Company
Mashaer Holding Co KscManazel Holding
Tijara And Real Estate InvesJazeera Airways Co Ksc
Commercial Real Estate CoNational International Co
Taameer Real Estate Invest CGulf Cement Co
Heavy Engineering And Ship BNational Real Estate Co
Al Safat Energy Holding CompKuwait National Cinema CoDanah Alsafat Foodstuff Co
Independent Petroleum GroupKuwait Real Estate Co Ksc
Salhia Real Estate Co KscGulf Cable & Electrical Ind
Kuwait Finance HouseGulf North Africa Holding Co
Hilal Cement CoOsoul Investment Kscc
Gulf Insurance Group KscUmm Al Qaiwain General Inves
Aayan Leasing & InvestmentAlrai Media Group Co KscNational Investments CoCommercial Facilities CoYiaco Medical Co. K.S.C.C
Dulaqan Real Estate CoReal Estate Asset Management
66.50
284.00
627.00
13.00
24.50
99.00
69.80
1,000.00
87.00
65.00
195.00
44.50
2,530.00
68.00
43.50
58.40
40.00
583.00
0.00
34.70
22.50
0.00
54.00
29.20
39.00
574.00
92.50
58.60
18.20
32.00
363.00
74.00
16.00
674.00
11.80
450.00
90.60
410.00
642.00
626.00
55.70
90.70
84.00
599.00
66.70
56.30
36.90
118.00
183.00
707.00
350.00
204.00
0.00
-1.05
0.00
0.78
0.00
2.17
0.14
0.00
0.81
0.00
0.00
-1.11
-0.78
7.94
-5.23
-9.60
0.25
0.34
0.00
-8.68
-0.88
0.00
0.00
0.69
0.00
0.70
0.54
-4.90
1.11
-8.31
-0.27
3.21
-1.84
0.30
0.00
0.00
2.95
0.49
2.88
0.32
0.00
20.93
0.60
0.00
0.00
3.30
0.00
0.85
0.00
0.00
0.00
0.00
-
256,842
-
292,271
575,902
20
159,765
-
1,006,093
-
-
120,000
120,652
180,438
7,040
630
1,346,038
103,820
-
153,791
3,570,019
-
259,461
2,477,340
-
100,874
590,000
1,100
894,404
195,851
393,466
2,488,394
272,700
24,892
-
-
4,014,867
12,180
512,184
7,045,273
19,573
31,180
760
-
-
20,159,925
-
6,149,982
100,000
-
-
-
OMAN
Company Name % Chg Volume
Voltamp Energy SaogVision Insurance Saoc
United Power/Energy Co- PrefUnited Power Co Saog
United Finance CoUbar Hotels & Resorts
Takaful OmanTaageer FinanceSweets Of OmanSohar Power Co
Sohar International BankSmn Power Holding Saog
Shell Oman Marketing - PrefShell Oman Marketing
Sharqiyah Desalination Co SaSembcorp Salalah Power & Wat
Salalah Port ServicesSalalah Mills Co
Salalah Beach Resort SaogSahara Hospitality
Renaissance Services SaogRaysut Cement Co
Phoenix Power Co SaocPackaging Co Ltd
OoredooOminvest
Oman United Insurance CoOman Telecommunications Co
Oman Refreshment CoOman Qatar Insurance Co
0.14
0.10
0.90
1.10
0.06
0.13
0.11
0.09
0.55
0.04
0.10
0.07
1.05
0.84
0.20
0.11
0.60
0.57
1.38
3.12
0.35
0.32
0.06
2.21
0.40
0.33
0.39
0.62
0.96
0.09
0.00
0.00
0.00
0.00
0.00
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1.96
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0.00
0.00
-0.62
0.00
0.00
-1.48
0.00
4.32
0.00
0.00
0.00
-
220,000
-
-
-
-
-
-
-
4,220
766,856
-
-
-
400
-
-
-
-
-
-
21,000
10,500
-
7,474
-
60,000
97,509
-
20,000
Sultan Center Food ProductsKuwait Foundry Co Sak
Kuwait Financial Centre SakAjial Real Estate Entmt
Kuwait Finance & InvestmentNational Industries Co Ksc
Kuwait Real Estate Holding CSecurities House/The
Boubyan Petrochemicals CoAl Ahli Bank Of Kuwait
Ahli United Bank (Almutahed)National Bank Of Kuwait
Commercial Bank Of KuwaitKuwait International Bank
Gulf BankAl-Massaleh Real Estate Co
Al Arabiya Real Estate CoKuwait Remal Real Estate Co
Alkout Industrial Projects CA’ayan Real Estate Co Sak
Investors Holding Group Co.KAl-Mazaya Holding Co
0.00
1.29
0.26
2.96
0.71
0.00
0.00
1.53
-1.10
-1.16
-1.15
1.05
0.00
0.00
0.00
0.00
0.00
-0.67
0.00
0.00
2.44
3.46
40,608
20
252,679
41,278
382,004
-
-
3,081,464
96,496
401,479
183,922
4,702,949
-
3,876,789
2,139,950
-
106,006
425,000
-
-
1,714,086
389,740
55.00
235.00
77.20
139.00
42.30
156.00
25.50
39.80
538.00
171.00
259.00
866.00
500.00
174.00
214.00
29.10
23.00
14.90
769.00
55.90
12.60
50.80
Lt Price
LATEST MARKET CLOSING FIGURES
BUSINESS5Gulf Times
Friday, August 28, 2020
Rare volatility jump flashes warning for record US stock rally
BloombergNew York
1Fear gauges for the S&P 500 and Nasdaq 100 indexes may be providing fresh reasons for caution about the relentless rally in US stocks.
The S&P 500 and Nasdaq 100 scaled new peaks on Wednesday, but their respective measures of implied volatility also rose in tandem. Simultane-ous increases in equity and volatility gauges are unusual, and a reason for concern for some.
Wednesday was the first time in about two dec-ades the Cboe Volatility Index – or VIX – rose more than 5% as the S&P 500 rose over 1% to a record, Jason Goepfert, president of Sundial Capi-tal Research Inc, wrote in a note. History suggests stocks tend to decline 1.2% on average in the fol-lowing month when that happens, he added.
“This might be the weirdest market I’ve ever seen,” Goepfert said, adding he’s seen market oddities for weeks, and so far “they haven’t mattered.”
That’s underscored by a surge in US stocks that defied convention and skeptics alike. The Nasdaq 100 has rebounded 71% from the virus-induced lows in March, and the S&P 500 is up 55%. The rally has stretched valuations, and faces risks from stalled US fiscal stimulus talks and the struggle to contain the pandemic.
Wednesday’s session also saw a 2.1% rise in the Nasdaq 100 Index accompanied by a more than 10% increase in the Cboe NDX Volatility Index. Both have climbed in August, but the move in the volatility measure may be due to investors chasing the stock rally, according to Susquehanna Finan-cial Group LLLP.
“We are seeing more ‘upside panic’” in the Nasdaq, Chris Murphy, a derivatives strategist at Susquehanna, wrote in a note.
A range of uncertainties are set to be resolved in the months ahead, such as over stimulus spend-ing, November’s US presidential election and the possible introduction of a Covid-19 vaccine.
That’s going to bring VIX down to about 16, from about 23 currently, according to Michael Kelly, head of multi-asset at PineBridge Invest-ments LLC. “It’s extraordinarily unusual for the VIX to stay above 20 for an extended period of time without a crisis situation going on,” he said in an interview.
American investors have a whole lot riding on Big TechBloombergNew York
Many Americans have hitched their fi nan-cial future to Big Tech,
whether they realise it or not. Just fi ve companies make up about 24% of the S&P 500 Index — Ap-ple Inc, Amazon.com Inc, Micro-soft Corp, Facebook Inc and Al-phabet Inc — up from 17% at the start of the year. That means a sig-nifi cant chunk of Americans’ net worth and the security of their re-tirement may hinge on the success or failure of a handful of stocks.
Some fi nancial advisers, nerv-ous about the exposure, say they are struggling to get clients to switch things up.
“Having been through one tech wreck, this certainly keeps us up at night,” said Thomas Yorke, a managing director at Oceanic
Capital Management in Red Bank, New Jersey. “For now, we have been carrying larger cash alloca-tions to try and off set tech expo-sure.”
In an attempt to spread out risk across stocks and sectors, many 401(k)s, pensions or other retire-ment savings plans use passive funds that mimic the S&P 500. But the massive run-up in a few blockbuster stocks leaves inves-tors far less diversifi ed than they may think.
The leading stock in the S&P 500 carries more than twice as much weight now as it did a dec-ade ago. Today, Apple accounts for 7.2% of the index, while in 2010 Exxon Mobil Corp was on top with about 3.2%. On Monday, the oil and gas company was kicked out of the Dow Jones Industrial Av-erage, making way for even more tech companies such as Sales-force.com Inc.
In addition, some of the largest actively managed mutual funds in retirement savings plans such as 401(k)s hold highly concentrated tech positions. As of June 30, three stocks — Amazon, Facebook and Microsoft — made up 23.7% of the $128bn Fidelity Contrafund.
Meanwhile, more people are buying tech stocks on the side, as the rise of a new generation of retail investors trading commis-sion-free on mobile apps coin-cides with new services that al-low investors to buy portions of shares. These fractional shares, as they’re known, make the highest-priced stocks suddenly within reach.
For example, if you had $500 to invest, you previously wouldn’t have been able to aff ord a share of Amazon, which was priced at $3,346 as of Tuesday. Now, com-panies like Charles Schwab Corp or Stash Financial let people buy
$5, $1 or 5 cents worth of a stock.Other investments have also
camoufl aged tech. Berkshire Hathaway Inc’s stake in Apple has swelled to about $122bn and at the end of the second quarter made up some 44% of its stock portfolio.
So far this year, the exposure has been lucrative. The fi ve big tech stocks gained an average of 53%. The median change for all S&P 500 stocks? Negative 5%.
And the expectation that work-ing and shopping from home will be far more common in coming years is one reason why some are confi dent that big tech stocks are well worth their valuations.
Wedbush Securities raised its price target for Apple on Wednes-day to $600 from $515 on opti-mism about the upcoming 5G iPhone. Oaktree Capital Group co-founder Howard Marks, meanwhile, spent a good por-tion of a mid-August investment
memo reviewing bullish argu-ments about the valuations of Big Tech companies.
Nevertheless, some fi nancial advisers are nervous about their clients’ mounting exposures. Per-suading customers to trim posi-tions “can be a chore” if they will have to pay capital gains taxes, Yorke says.
Advisers are recommending that people hedge or move money into less expensive areas of the market, like small-cap stocks and international stocks.
They’re also hearing from peo-ple who are normally conserva-tive but are fearful of being left behind. Wealth manager Kenneth Van Leeuwen of Van Leeuwen & Co, in Princeton, New Jersey, had some clients ask, hopefully, if they owned Amazon. The answer was no, but they do own Apple, which he thinks is a better value, and has a dividend, unlike Amazon.
US stocks extend rally as Powell says no rush on rate risesAFP, ReutersLondon
US stocks extended a recent rally yesterday after US Federal Re-serve chief Jerome Powell took
a major step to stimulate the economy by saying he would not rush to raise in-terest rates and could allow infl ation to stay above his two-percent target “for some time.”
Allowing infl ation to overshoot is expected to boost job creation as the Fed pursues its goal of “maximum em-ployment”, while also recognising that greater employment has not been driv-ing prices signifi cantly higher in recent years.
“This change refl ects our apprecia-tion for the benefi ts of a strong labour market, particularly for many in low- and moderate-income communities,” said Powell, adding that the Fed is pre-pared to use “our full range of tools to support the economy.”
Earlier, global equities were sub-dued as traders weighed geopoliti-cal concerns which resurfaced after Beijing reportedly fired missiles dur-ing exercises around the South China Sea and the US sanctioned several Chinese firms linked to the disputed region.
The Dow had added almost 1% two hours into the session although Eu-ropean markets closed having lost ground, London notably sagging on record net fi rst half losses for Rolls Royce as the coronavirus outbreak grounded aircraft worldwide and sparked a crisis in air transport.
London’s FTSE 100 closed 0.8% down at 5,999.99 points, Frankfurt’s DAX 30 closed 0.7% down at 13,096.36 points and Paris’ CAC 40 ended 0.6% down at 5,015.97 points, while the EURO STOXX 50 fi nished 0.7% down at 3,334.35 points.
“Today was dubbed the “Powell Day” and the US central bank Chairman did not disappoint,” said Fawad Razaqzada, analyst with ThinkMarkets.
“The new approach means infl ation could rise above 2% for some time and will not necessarily lead to monetary tightening” meaning “monetary policy will likely remain loose much longer than would have been the case previ-ously.”
Barring the German manufactur-ing sector, recent data has pointed to the plateauing of an economic recov-ery in the euro zone as several coun-tries see a resurgence in coronavirus cases.
A Reuters poll of fund managers showed European stocks are ex-pected to stall for the rest of 2020 and miss out on the bull market, which has propelled Wall Street to record highs.
WPP, the world’s biggest advertising company, jumped 4.7% as it resumed its dividend after cost cuts and a switch to faster ad production helped it to beat dire forecasts for second-quarter trading.
Smaller rival Publicis rose 1.2%. German online takeaway food group Delivery Hero slipped 1.4% after an-nouncing the acquisition of online grocery service InstaShop.
French conglomerate Bouygues rose 3.2% after reporting a lower-than-
expected core operating loss in the fi rst half of the year.
Clinical diagnostics company No-vacyt jumped 6.1% after it launched a test to diff erentiate between Covid-19 and common winter diseases.
As Wall Street revved up its engines on the back of a clutch of record-breaking rallies, Asian trade was grounded by a fresh fl are-up in coro-navirus cases in the region.
The mood was also downbeat after Bloomberg News reported that China had fi red four ballistic missiles into the South China Sea as part of a military exercise, a day after Beijing said a US spy plane had entered a no-fl y zone in northern China.
The region is one of a number of is-sues over which China-US tensions have spiked in recent months.
In July, Washington declared Bei-jing’s pursuit of territory and resources there illegal, explicitly backing the territorial claims of Southeast Asian countries against China.
And on Wednesday, it imposed sanc-tions and restrictions on 24 Chinese companies and associated offi cials for taking part in building artifi cial islands in the disputed waters.
Oil traders are meanwhile keeping tabs on Hurricane Laura in the Gulf of Mexico, which made landfall in Louisi-ana yesterday morning.
Around three million barrels a day of refi ning capacity have been closed after US authorities said the hurricane could bring “potentially catastrophic storm surges, extreme winds and fl ash fl ood-ing”. Crude prices slid back after testing fi ve month highs earlier in the weeks.
Apple IncAmerican Express Co
Boeing Co/TheCaterpillar Inc
Cisco Systems IncChevron Corp
Walt Disney Co/TheDow Inc
Goldman Sachs Group IncHome Depot Inc
Intl Business Machines CorpIntel Corp
Johnson & JohnsonJpmorgan Chase & Co
Coca-Cola Co/TheMcdonald’s Corp
3M CoMerck & Co. Inc.
Microsoft CorpNike Inc -Cl B
Pfizer IncProcter & Gamble Co/The
Raytheon Technologies CorpTravelers Cos Inc/The
Unitedhealth Group IncVisa Inc-Class A Shares
Verizon Communications IncWalgreens Boots Alliance Inc
Walmart IncExxon Mobil Corp
504.70
101.92
175.00
141.97
42.20
84.65
134.84
46.16
211.03
288.44
124.42
49.60
152.41
102.00
48.44
213.93
163.91
85.56
229.39
111.67
37.82
138.76
60.59
117.97
312.48
210.27
59.53
38.92
137.76
39.64
-0.27
3.58
1.80
0.10
-0.13
-0.15
2.01
-0.39
1.84
-1.20
0.20
0.10
0.07
2.94
0.57
0.08
0.01
0.02
3.73
0.13
-0.60
0.27
-0.30
3.90
1.19
0.00
0.12
0.65
5.40
-0.92
3,962,268
271,882
1,734,521
152,673
2,065,583
408,638
1,066,140
282,756
292,181
299,458
214,243
2,689,005
325,706
1,571,277
1,084,065
332,104
157,066
340,221
8,158,204
266,157
1,606,930
557,265
589,301
102,156
140,062
680,828
479,673
797,898
1,812,208
2,160,563
DJIA
Company Name Lt Price % Chg Volume
Anglo American PlcAssociated British Foods Plc
Admiral Group PlcAshtead Group Plc
Antofagasta PlcAuto Trader Group Plc
Aviva PlcAstrazeneca PlcBae Systems Plc
Barclays PlcBritish American Tobacco Plc
Barratt Developments PlcBhp Group Plc
Berkeley Group Holdings/TheBritish Land Co Plc
Bunzl PlcBp Plc
Burberry Group PlcBt Group Plc
Coca-Cola Hbc Ag-DiCarnival PlcCentrica Plc
Compass Group PlcCroda International Plc
Crh PlcDcc Plc
Diageo PlcDirect Line Insurance Group
Evraz PlcExperian Plc
Easyjet PlcFerguson Plc
Fresnillo PlcGlencore Plc
Glaxosmithkline PlcGvc Holdings Plc
Hikma Pharmaceuticals PlcHargreaves Lansdown Plc
Halma PlcHsbc Holdings Plc
Hiscox LtdIntl Consolidated Airline-Di
Intercontinental Hotels Grou3I Group Plc
Imperial Brands PlcInforma Plc
Intertek Group PlcItv Plc
Johnson Matthey PlcKingfisher Plc
Land Securities Group PlcLegal & General Group PlcLloyds Banking Group Plc
London Stock Exchange GroupMicro Focus International
Marks & Spencer Group PlcMondi Plc
Melrose Industries PlcWm Morrison Supermarkets
National Grid PlcNmc Health Plc
Next PlcOcado Group Plc
#N/A Invalid SecurityPrudential Plc
Persimmon PlcPearson Plc
Reckitt Benckiser Group PlcRoyal Bank Of Scotland Group
Royal Dutch Shell Plc-A ShsRoyal Dutch Shell Plc-B Shs
Relx PlcRio Tinto Plc
Rightmove PlcRolls-Royce Holdings PlcRsa Insurance Group Plc
Rentokil Initial PlcSainsbury (J) Plc
Schroders PlcSage Group Plc/The
Segro PlcSmurfit Kappa Group Plc
Standard Life Aberdeen PlcDs Smith Plc
Smiths Group PlcScottish Mortgage Inv Tr Plc
Smith & Nephew PlcSpirax-Sarco Engineering Plc
Sse PlcStandard Chartered Plc
St James’s Place PlcSevern Trent Plc
Tesco PlcTui Ag-Di
Taylor Wimpey PlcUnilever Plc
United Utilities Group PlcVodafone Group Plc
John Wood Group PlcWpp Plc
Whitbread Plc
1,803.80
2,058.00
2,644.00
2,635.00
1,065.00
566.80
283.80
8,417.00
527.20
110.54
2,550.50
516.40
1,702.80
4,543.00
363.50
2,475.00
267.25
1,448.00
105.85
2,009.00
1,019.00
43.97
1,213.50
5,996.00
2,877.00
6,746.00
2,541.00
295.10
318.30
2,805.00
628.20
7,434.00
1,227.50
167.76
1,494.00
819.80
2,356.00
1,619.00
2,247.00
328.05
785.20
216.00
4,430.00
927.60
1,276.50
414.30
5,950.00
61.58
2,374.00
276.40
582.20
219.00
28.20
8,904.00
300.10
112.80
1,484.50
105.50
194.85
852.80
0.00
6,128.00
2,520.00
0.00
1,199.00
2,612.00
571.00
7,612.00
0.00
1,111.00
1,070.20
1,719.50
4,609.50
632.80
250.00
451.00
533.60
185.65
2,895.00
747.20
953.00
2,754.00
236.80
266.90
1,430.50
964.50
1,520.00
10,405.00
1,278.00
384.40
982.20
2,348.00
221.90
334.70
120.10
4,565.00
833.80
113.68
233.40
664.40
2,457.00
-2.57
0.59
-0.45
-2.23
-2.43
-0.84
-0.56
-2.12
-0.68
0.13
0.47
-0.15
-1.56
-1.05
0.11
-1.04
-1.29
-0.21
-0.89
0.80
5.16
0.37
4.48
-0.70
-2.57
-1.75
-0.27
-1.30
-2.30
-0.46
2.68
-1.64
-2.00
-1.08
-1.11
-0.02
-1.55
-2.44
-0.58
-1.07
-0.03
4.85
1.21
-0.22
0.79
2.30
-0.90
3.70
-2.74
-1.71
0.38
-1.53
-0.97
-0.13
-1.96
-1.05
-1.39
-0.09
-0.56
-0.84
0.00
-0.84
-0.59
0.00
-0.70
-2.90
-0.07
-0.47
0.00
-0.96
-0.58
-0.15
-1.84
-0.19
-1.19
-0.38
-1.48
-0.43
-2.10
-1.50
-1.45
-1.64
-2.35
-1.37
-1.51
1.21
1.16
-1.84
-0.54
-1.81
-1.21
-0.34
-0.63
3.40
0.38
0.42
-0.17
-0.49
-2.02
6.47
2.55
2,322,983
451,159
305,653
596,913
885,141
1,245,066
5,982,858
926,000
4,414,668
20,521,040
2,036,182
2,070,885
5,187,022
364,568
1,948,300
757,133
30,829,377
1,108,947
14,657,891
446,857
1,664,070
11,792,663
3,187,021
233,660
572,524
88,395
3,382,233
2,665,206
1,440,149
756,736
2,400,276
166,862
951,610
20,844,259
4,308,068
2,030,393
552,423
553,008
578,720
16,044,039
441,337
15,680,166
465,431
1,110,631
1,104,908
2,961,589
124,414
26,772,844
560,381
6,434,410
1,663,750
9,607,861
88,477,612
334,806
1,159,657
6,134,821
609,069
8,403,030
4,919,653
4,405,144
-
202,866
1,729,466
-
1,865,127
775,423
980,961
510,179
-
3,580,564
5,019,156
2,107,189
1,387,753
1,401,504
23,934,505
1,363,049
1,582,089
4,542,773
186,442
1,231,791
1,991,597
130,947
5,958,210
2,535,821
465,315
3,531,956
1,218,676
65,803
1,115,617
3,813,043
605,930
445,361
11,239,918
1,440,374
10,467,091
1,042,783
854,280
33,405,723
1,884,292
5,342,218
450,084
-
FTSE 100
Company Name Lt Price % Chg Volume
Japan Airlines Co LtdRecruit Holdings Co Ltd
Softbank CorpKyocera Corp
Nissan Motor Co LtdT&D Holdings Inc
Toyota Motor CorpKddi Corp
Nitto Denko CorpHitachi Ltd
Takeda Pharmaceutical Co LtdJfe Holdings IncSumitomo Corp
Canon IncEisai Co Ltd
Nintendo Co LtdShin-Etsu Chemical Co Ltd
Mitsubishi CorpSmc Corp
2,065.50
3,982.00
1,455.00
6,165.00
422.20
1,062.00
7,073.00
3,267.00
6,470.00
3,539.00
3,984.00
789.00
1,257.00
1,837.50
9,398.00
57,250.00
13,050.00
2,334.00
59,350.00
-2.43
5.62
-1.36
-0.18
-2.22
-3.19
-0.70
-1.86
-0.77
-0.06
-1.04
-2.95
-1.60
-1.18
-0.12
-0.49
0.23
-0.83
0.37
3,005,000
11,788,400
9,369,800
687,500
11,287,000
2,613,200
2,535,900
4,033,900
539,700
1,883,500
2,460,800
2,038,300
3,253,400
2,401,800
296,900
1,045,200
564,800
3,356,100
98,100
TOKYO
Company Name Lt Price % Chg Volume
Nidec CorpIsuzu Motors Ltd
Unicharm CorpNomura Holdings Inc
Daiichi Sankyo Co LtdSubaru Corp
Sumitomo Realty & DevelopmenNtt Docomo Inc
Sumitomo Metal Mining Co LtdOrix Corp
Asahi Group Holdings LtdKeyence Corp
Mizuho Financial Group IncSumitomo Mitsui Trust Holdin
Japan Tobacco IncSumitomo Electric Industries
Daiwa Securities Group IncSoftbank Group Corp
Panasonic CorpFujitsu Ltd
Central Japan Railway CoNitori Holdings Co Ltd
Ajinomoto Co IncDaikin Industries Ltd
Mitsui Fudosan Co LtdOno Pharmaceutical Co Ltd
Toray Industries IncBridgestone Corp
Sony CorpAstellas Pharma Inc
Hoya CorpNippon Steel Corp
Suzuki Motor CorpNippon Telegraph & Telephone
Eneos Holdings IncMurata Manufacturing Co Ltd
Kansai Electric Power Co IncDenso Corp
Sompo Holdings IncDaiwa House Industry Co Ltd
Dai-Ichi Life Holdings IncMazda Motor Corp
Komatsu LtdWest Japan Railway Co
Kao CorpMitsui & Co Ltd
Daito Trust Construct Co LtdOtsuka Holdings Co Ltd
Oriental Land Co LtdSekisui House Ltd
Secom Co LtdTokio Marine Holdings Inc
Aeon Co LtdAsahi Kasei Corp
Kirin Holdings Co LtdMarubeni Corp
Mitsubishi Ufj Financial GroMitsubishi Chemical Holdings
Fanuc CorpFast Retailing Co Ltd
Ms&Ad Insurance Group HoldinKubota Corp
Seven & I Holdings Co LtdInpex Corp
Resona Holdings IncFujifilm Holdings Corp
Yamato Holdings Co LtdChubu Electric Power Co Inc
Mitsubishi Estate Co LtdMitsubishi Heavy Industries
Sysmex CorpShiseido Co Ltd
Shionogi & Co LtdTerumo Corp
Tokyo Gas Co LtdTokyo Electron Ltd
East Japan Railway CoItochu Corp
Ana Holdings IncMitsubishi Electric Corp
Sumitomo Mitsui Financial Gr
8,854.00
998.10
4,647.00
541.30
9,497.00
2,152.00
3,048.00
3,095.00
3,225.00
1,287.00
3,552.00
43,670.00
142.00
2,984.50
2,003.50
1,231.50
468.70
6,618.00
961.90
14,135.00
15,055.00
22,370.00
1,999.00
20,160.00
1,832.50
3,215.00
493.40
3,342.00
8,559.00
1,696.50
10,365.00
1,028.00
4,211.00
2,568.50
415.90
6,451.00
1,033.00
4,360.00
3,876.00
2,758.50
1,518.50
657.00
2,283.00
5,225.00
8,041.00
1,785.00
9,024.00
4,649.00
14,005.00
2,106.50
10,150.00
4,748.00
2,650.50
882.30
2,012.00
583.10
431.90
612.50
18,745.00
63,340.00
2,899.50
1,886.50
3,430.00
661.50
380.00
5,037.00
2,786.00
1,300.50
1,626.50
2,605.50
9,134.00
5,996.00
6,015.00
4,243.00
2,322.50
28,135.00
6,635.00
2,633.00
2,557.00
1,462.00
3,052.00
-0.03
-1.32
0.67
-0.68
-0.09
-3.11
-1.52
-0.61
-1.23
-1.49
-0.25
-0.52
-1.87
-1.44
-0.17
-0.77
-2.33
-0.33
-0.19
1.51
-1.76
0.68
-0.72
0.88
-2.76
-0.56
-0.82
0.69
-0.14
-1.65
1.17
-1.77
-0.38
-1.14
-0.50
0.02
-0.24
0.25
-2.66
-2.11
-2.88
-3.24
-1.06
-2.01
-0.51
-0.53
-1.30
-0.24
-0.67
-1.24
-0.54
-2.24
-0.66
-1.04
0.88
-1.37
-1.84
-1.56
-0.45
-0.31
-1.56
2.11
-1.38
-2.45
-1.81
0.12
0.32
-1.55
-2.22
-1.49
1.65
-0.73
-1.23
-0.02
-0.26
0.64
-2.56
-0.34
-1.56
0.90
-1.71
TOKYO
Company Name Lt Price % Chg
Ck Hutchison Holdings LtdHang Lung Properties Ltd
Ck Infrastructure Holdings LHengan Intl Group Co Ltd
China Shenhua Energy Co-HCspc Pharmaceutical Group Lt
Hang Seng Bank LtdChina Resources Land Ltd
Ck Asset Holdings LtdSino Biopharmaceutical
Henderson Land DevelopmentAia Group Ltd
Ind & Comm Bk Of China-HWant Want China Holdings Ltd
Sun Hung Kai PropertiesNew World Development
Geely Automobile Holdings LtSwire Pacific Ltd - Cl A
Sands China LtdWharf Real Estate Investment
Clp Holdings LtdCountry Garden Holdings Co
Aac Technologies Holdings InShenzhou International GroupPing An Insurance Group Co-H
China Mengniu Dairy CoSunny Optical Tech
Boc Hong Kong Holdings LtdChina Life Insurance Co-H
Citic LtdGalaxy Entertainment Group L
Wh Group Ltd
50.55
21.70
40.80
61.90
12.60
17.00
120.00
36.40
41.90
9.10
30.55
77.50
4.53
5.34
101.50
40.05
15.84
41.70
33.30
32.30
75.25
9.76
49.80
125.60
83.40
35.50
119.00
22.15
18.78
7.30
60.00
6.66
-0.98
-2.03
-1.33
-0.24
0.00
2.16
-0.99
-0.14
-1.64
-0.11
-0.33
-0.39
-0.88
-1.84
-0.29
-1.72
1.80
-1.30
-1.62
-1.37
-0.33
-2.59
3.75
0.40
-0.89
-2.61
2.50
-1.12
-0.32
-1.48
-2.04
-0.45
5,007,631
3,612,481
1,585,269
4,970,921
28,259,500
67,864,057
1,828,773
12,148,467
12,538,726
45,532,876
2,778,470
17,793,564
151,286,480
24,411,631
2,435,857
2,013,449
45,863,457
1,112,111
14,260,180
3,949,766
1,806,533
38,178,447
15,319,211
4,288,399
19,966,484
15,733,888
13,796,749
7,934,118
43,020,294
13,413,135
15,346,246
48,007,593
HONG KONG
Company Name Lt Price % Chg Volume
Hong Kong & China GasBank Of Communications Co-HChina Petroleum & Chemical-HHong Kong Exchanges & Clear
Bank Of China Ltd-HHsbc Holdings Plc
Power Assets Holdings LtdMtr Corp
China Overseas Land & InvestTencent Holdings Ltd
China Unicom Hong Kong LtdLink Reit
Sino Land CoChina Resources Power Holdin
Petrochina Co Ltd-HCnooc Ltd
China Construction Bank-HChina Mobile Ltd
11.04
4.20
3.49
379.40
2.57
33.30
44.15
40.55
22.85
558.00
5.80
60.80
9.09
9.44
2.65
8.83
5.68
55.95
-0.54
-0.71
-2.51
-0.68
-0.77
-1.91
0.11
-0.12
-1.51
1.18
-6.15
-1.94
-2.88
-1.36
-2.21
-3.50
-0.87
-5.09
16,437,688
29,792,294
158,612,615
3,341,823
225,235,945
34,614,385
1,675,575
2,828,176
14,731,968
17,032,210
85,234,721
5,113,426
14,991,580
6,121,674
116,632,489
83,033,464
181,421,802
23,101,665
HONG KONG
Company Name Lt Price % Chg Volume
Adani Ports And Special EconAsian Paints Ltd
Axis Bank LtdBajaj Finance Ltd
Bharti Airtel LtdBharti Infratel Ltd
Bajaj Auto LtdBajaj Finserv Ltd
Bharat Petroleum Corp LtdCipla Ltd
Coal India LtdDr. Reddy’s Laboratories
Eicher Motors LtdGail India Ltd
Grasim Industries LtdHcl Technologies Ltd
Housing Development FinanceHdfc Bank Limited
Hero Motocorp LtdHindalco Industries Ltd
Hindustan Petroleum CorpHindustan Unilever Ltd
Icici Bank LtdIndiabulls Housing Finance L
Indusind Bank LtdInfosys Ltd
Indian Oil Corp LtdItc Ltd
Jsw Steel LtdKotak Mahindra Bank Ltd
Larsen & Toubro LtdMahindra & Mahindra Ltd
Maruti Suzuki India LtdNtpc Ltd
Oil & Natural Gas Corp LtdPower Grid Corp Of India Ltd
Reliance Industries LtdState Bank Of India
Sun Pharmaceutical IndusTata Steel Ltd
Tata Consultancy Svcs LtdTech Mahindra Ltd
Titan Co LtdTata Motors Ltd
Upl LtdUltratech Cement Ltd
Vedanta LtdWipro Ltd
Yes Bank LtdZee Entertainment Enterprise
350.55
1,982.50
473.05
3,632.50
511.15
199.90
3,043.00
6,530.75
412.95
756.20
140.55
4,437.00
2,236.35
99.20
685.05
710.15
1,864.10
1,112.10
3,141.75
194.90
208.40
2,171.25
392.20
219.35
605.85
947.05
87.20
194.25
289.30
1,420.00
975.60
636.75
7,098.00
102.60
80.15
185.20
2,110.60
215.65
532.25
426.85
2,248.40
735.60
1,137.65
144.25
496.75
4,047.15
127.85
272.35
14.70
209.55
-1.04
0.56
2.09
-0.36
-0.65
-0.30
-1.27
-0.51
0.69
1.10
-0.99
0.05
-0.56
-0.65
2.68
-0.37
2.65
-0.57
-0.60
0.72
-0.50
-0.53
0.73
0.73
6.73
-0.39
-0.80
-0.36
1.08
-1.16
0.69
3.82
1.27
-0.19
-1.54
-0.08
-1.25
2.76
1.35
0.44
-0.23
0.38
0.30
4.60
0.65
-0.80
-0.85
0.11
0.34
-0.92
SENSEX
Company Name Lt Price % Chg
WORLD INDICESIndices Lt Price Change
GCC INDICESIndices Lt Price Change
Dow Jones Indus. AvgS&P 500 Index
Nasdaq Composite IndexS&P/Tsx Composite Index
Mexico Bolsa IndexBrazil Bovespa Stock Idx
Ftse 100 IndexCac 40 Index
Dax IndexIbex 35 Tr
Nikkei 225Japan Topix
Hang Seng IndexAll Ordinaries Indx
Nzx All IndexBse Sensex 30 Index
Nse S&P Cnx Nifty IndexStraits Times Index
Karachi All Share IndexJakarta Composite Index
28,560.51
3,498.66
11,691.26
16,759.45
37,577.58
100,412.10
5,999.99
5,015.97
13,096.36
7,090.70
23,208.86
1,615.89
25,281.15
6,310.63
1,990.67
39,113.47
11,559.25
2,519.81
28,777.36
5,371.47
+228.59
+19.93
+26.20
-30.52
-175.46
-215.20
-45.61
-32.46
-93.79
-32.30
-82.00
-8.59
-210.64
+16.15
+3.77
+39.55
+9.65
-22.27
+211.99
+31.14
Doha Securities Market
Kuwait Stocks Exchange
Oman Stock Market
9,882.93
4,172.24
3,737.47
-16.00
+12.32
-10.49
“Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on this data.”
1,030,500
2,686,800
860,700
7,492,700
549,800
2,434,000
923,600
2,003,700
1,296,300
4,064,800
1,791,300
429,000
69,949,900
793,900
1,838,200
1,495,300
4,321,500
12,200,400
4,320,000
861,000
440,500
311,600
1,136,200
416,700
2,657,000
464,400
5,813,900
968,200
4,689,500
2,745,300
727,100
2,952,300
949,900
2,781,500
9,080,400
2,128,700
1,478,000
926,500
995,400
2,400,800
6,115,400
6,060,900
2,328,500
723,000
696,200
2,727,100
398,200
368,900
425,600
1,382,400
302,200
1,443,200
4,167,200
1,982,200
2,638,900
4,935,600
38,515,700
3,703,900
380,600
316,900
1,294,300
4,341,700
2,832,900
5,992,500
6,555,000
815,500
1,201,700
1,433,300
2,295,400
1,145,900
451,300
1,961,700
781,400
948,700
881,400
757,800
2,137,000
2,079,200
1,281,300
2,521,300
4,919,100
2,996,658
3,116,307
19,544,322
4,611,132
21,871,778
3,085,330
711,504
461,882
7,823,398
6,989,244
9,356,658
903,664
1,370,440
6,719,780
3,259,380
3,917,059
8,648,531
10,323,015
1,431,518
7,659,883
8,100,083
2,172,278
36,910,773
22,123,708
48,568,998
6,154,300
15,445,049
47,213,462
5,931,448
4,283,671
4,466,694
7,637,643
1,158,982
19,363,825
16,309,200
5,829,571
12,962,139
80,999,489
8,564,631
9,549,716
3,579,397
3,207,128
1,459,161
181,382,530
2,426,413
458,042
21,935,103
6,190,218
99,012,198
59,248,073
Volume
Volume
BUSINESS
Gulf Times Friday, August 28, 20206
A trader monitors financial data inside the Frankfurt Stock Exchange. The DAX 30 closed 0.7% down at 13,096.36 points yesterday.
BUSINESS7Gulf Times
Friday, August 28, 2020
Defying economic gloom, Iran’s oil firms propel bourse to record highTehran bourse up 330% since start of the year; energy stocks leap on oil price bets; but inflation, capital controls also behind gains
ReutersLondon
The coronavirus crisis, an oil price shock and crippling US sanctions on Iran’s energy and banking sectors have hit the country’s economy very badly. Yet the Tehran Stock Exchange is home to one of the top performing equity indexes in the world.Iran’s benchmark TSE index (TEDPIX) has soared 330% since the start of the year in local currency terms thanks to a breathtaking rally in oil firms, refineries and the petrochemical industry — accounting for more than a third of the top 30 companies.The steep ascent, however, may have little to do with confidence in the country’s future.Instead, it mirrors events in Venezuela and Zimbabwe, where indexes have surged more than 400% in local terms amid rising inflation and capital controls.“Stock market gains in Iran should not be viewed as a signal of economic stabilisation, but rather a reflection of hyperinflation and trapped capital, more akin to Zimbabwe than Russia or Saudi Arabia,” said Hasnain Malik, head of equity research at Tellimer.“Local wealth is seeking a refuge to preserve some of their capital,” he added.The lion’s share of the gains comes from energy firms — the main source of foreign exchange revenue for the country, putting the sector in a stronger position compared to others.The Isfahan Oil Refining Company has roared 500% higher since the start of the year, while Tehran Oil Refining Company is up 450% and Bandar Abbas Oil Refining Company up 250%. The trajectory of Iran’s oil stocks seems out of line with international counterparts, with refiners in Asia and North America permanently closing their processing plants due to uncertain prospects for a recovery in fuel demand.The share prices of US refiners
Marathon Petroleum Corp and HollyFrontier have halved since the start of the year.This summer, Tehran planned to sell some of its shares in refineries including Isfahan Refinery, Tehran Refinery and Bandar Abbas Refinery.However, a delay due to disagreements among ministries has caused the stocks to retreat from their record highs in the last two weeks.“The government does not want to sell its shares cheap,” said Arash Safari, a trader at TSE.By selling part of its shares, the government seeks to raise funds to
curb a ballooning budget deficit due to oil sanctions.Many traders invested their money in the refineries and petrochemicals firms, betting oil exports will rebound one day and oil prices will increase.Some were punting on oil prices — which fell some 30% this year and are currently hovering at $45 per barrel — to bounce back to $70 in the coming months.“The refineries with more exposure to exports benefited the most from the rise in the stock market and the depreciation of the rial,” said an oil and products trader on condition of anonymity.
A complicated web of restrictions and sanctions has made Iran’s stock market almost exclusively a playing field for local investors.Meanwhile, rising price pressures have spurred more retail investors to plough cash into shares.“Inflation, or to be more exact expected inflation, is the main factor for the rise of the index of the Tehran Stock Exchange,” a TSE spokesperson told Reuters.“Fortunately or unfortunately, Iran’s economy has long faced economic sanctions which intensified in recent years — this has limited the impact of the global economy on the Iranian
economy,” the TSE added. Inflation stood at 27% in July, according to Iran’s off icial statistics.The International Monetary Fund predicts it could exceed 34% over the year. Iran’s rial currency has weakened 70% against the dollar since January 1.“A lot of capital that is flowing into the stock exchange is money that otherwise would have been leaving Iran, but now is actually a more diff icult time for Iranians to find ways to take their capital abroad,” said Esfandyar Batmanghelidj, founder of Bourse & Bazaar, a think tank focused on Iran’s economy.
Clerical rulers also encouraged ordinary Iranians to invest in local stocks to boost the country’s economy.While analysts and traders warn of a bubble that could burst, President Hassan Rouhani called the unprecedented rally a sign of economic resilience against the US sanctions.“They are all angry and say that the stock market is in turmoil all over the world,” Rouhani said in April.”Why is the Iranian stock market growing? Iran’s stock market is good because of the eff orts of all companies and economic activists.”
Employees chat in front of electronic screens displaying financial data at the Tehran Stock Exchange (file). Iran’s benchmark TSE index (TEDPIX) has soared 330% since the start of the year in local currency terms thanks to a breathtaking rally in oil firms, refineries and the petrochemical industry — accounting for more than a third of the top 30 companies.
BUSINESSFriday, August 28, 2020
GULF TIMES
The tax Biden wants to double and Trump might cutBy Laura DavisonWashington
Capital gains taxes are the price of making a good investment.They’re levied on profitable stock trades and real estate deals but also can apply to sales of businesses, pieces of art, collectible cars, gold and other assets.President Donald Trump says he would cut capital gains tax bills for investors if he wins a second term, while his Democratic challenger, former Vice President Joseph Biden, would raise money for his domestic agenda in part by doubling the existing tax rate.
1. How are capital gains taxed?
Investors are taxed on the diff erence between what they paid for the asset and what they sold it for.The federal rate in the US currently tops out at 20%, well below the top marginal rate of 37% on wages and salaries.(Investments held for a year
or shorter are taxed the same as wages and salaries.) As with all investments, an additional 3.8% tax applies to capital gains earned by individuals earning at least $200,000 or married couples earning $250,000, to fund the US health-insurance subsidy program known as Obamacare.And a higher 28% capital gains rate applies to transactions involving certain investments in small businesses and in collectibles such as art, antiques, stamps, wine and precious metals.States also tax capital gains but have varying approaches.
2. Who pays them?
Though anybody can have capital gains, it’s generally the very wealthiest of taxpayers who derive the bulk of their riches from capital gains profits on investments. (Capital gains taxes don’t apply to common tax-favored retirement vehicles such as 401(k)s or individual retirement accounts; taxpayers pay ordinary rates on those savings.) More than 59% of taxpayers earning at least $250,000
reported capital gains income in 2017 versus about 15% of those earning $50,000 to $100,000, according to Internal Revenue Service tax-return data.And some low-income taxpayers don’t pay the tax at all: Individuals earning up to $40,000 pay a 0% capital gains rate this year.Homeowners also get a break.The first $250,000 in proceeds from the sale of primary residences are exempt from capital gains taxes for single person, or twice that for a married couple.
3. Are US rates high or low?
The 23.8% top rate (including the Obamacare add-on) ranks among the middle of the pack of countries in the Organisation for Economic Cooperation and Development.France, with rates that top out at 30%, has among the highest rates on investments in the world.Some countries, such as Switzerland, have no specific federal capital gains tax but tax the sales at ordinary income rates.
Others such as Belgium and Denmark exempt some stock sales held for at least a year from capital gains taxes.
4. Why are capital gains taxed lower than other income?
Proponents of the lower rate say it rewards entrepreneurship and risk-taking and encourages investors to periodically sell what they own, preventing a so-called lock-in eff ect. (At least some of those proponents advocate no capital gains tax at all.) Critics say that the spread between how wages and investments are taxed can encourage rate arbitrage, creating opportunities for the wealthy to lessen their tax bills.
5. What does Biden say he’d do?
He would would eff ectively double the rate by subjecting capital gains to his plan’s top marginal rate, 39.6%, for people with incomes of $1mn or more.The general idea is being cheered on by Bill Gates, the billionaire co-founder of Microsoft
Corp, who said in a February television interview that “the big fortunes, if your goal is to go after those, you have to take the capital gains tax” and “increase that.”
6. What might Trump do?
Trump says he would reduce the capital gains tax rate to 15% in a second term, should he be re-elected.There has also been periodic chatter in the White House about “indexing” the rate for inflation, which means adjusting original purchase prices upward to minimise the gain on which they are taxed.That change has been a longtime goal of Trump’s top economic adviser, Larry Kudlow, who has said it would spur job creation and economic growth because people wouldn’t be taxed on what he’s called “phantom income.”About 95% of the benefit from indexing capital gains to inflation would accrue to the top 5% of taxpayers, according to the Penn Wharton Budget Model.
Bloomberg QuickTake Q&A
US labour market recovery slowing; economists urge more fi scal stimulusReutersWashington
The number of Americans fi ling new claims for unemployment benefi ts hovered around 1mn
last week, suggesting the labour mar-ket recovery was stalling as the Cov-id-19 pandemic drags on and fi nancial aid from the government dries up.
The government also confi rmed yesterday that the economy suff ered its sharpest contraction in at least 73 years in the second quarter because of the disruptions from the coronavirus, with corporate profi ts sinking deeper.
Though new Covid-19 infections have subsided after a broad resurgence through the summer, many hot spots remain, especially at college campuses that have reopened for in-person learn-ing. With the fi scal stimulus ebbing, signs are growing that the economy’s recovery is slowing.
Economists still expect a sharp re-bound in growth this quarter, but they are dialling back estimates for the fourth quarter.
“This economy is not out of the woods yet,” said Chris Rupkey, chief economist at MUFG in New York.”Without federal government assistance it will take years for the services-based economy to gener-ate employment opportunities for the workers unable to return to thousands of closed and bankrupt restaurants and bars and retail shops and malls across America.”
Initial claims for state unemploy-
ment benefi ts fell 98,000 to a season-ally adjusted 1.006mn for the week ended Aug 22, the labour Department said.
Economists polled by Reuters had forecast 1.0mn applications in the lat-est week.
The reopening of businesses in May pulled down claims from a record 6.867mn in March, when establish-ments were shuttered in an eff ort to slow the spread of the coronavirus.
Claims fell below 1mn early this month for the fi rst time since the pan-demic started in the United States.
“The snail’s pace of improvement in claims suggests that the next leg of the labour market’s recovery will be much slower going,” said Sarah House, a sen-
ior economist at Wells Fargo Securities in Charlotte North Carolina.
The Covid-19 crisis has altered the economic landscape and widened in-come inequality.
The Federal Reserve on Thursday rolled out an aggressive new strategy to restore the nation to full employ-ment and lift infl ation back to healthier levels.
Stocks on Wall Street rose as inves-tors cheered the Fed’s new focus.
The dollar gained versus a basket of currencies.
US Treasury prices fell.Americans in low-wage occupations
have borne the brunt of the recession, which started in February.
A government-funded program of-
fering businesses loans to help with wages has lapsed and a $600 weekly unemployment supplement expired on July 31.
Though President Donald Trump extended the supplement, the payout was cut to $300 per week and econo-mists expect funding for the program to be depleted by September.
A few states are off ering the extra unemployment benefi t.
Economists estimate the loss of the $600 could cut $50bn from retail sales in August.
“The spending made possible by the $600 was supporting 5.1mn jobs,” said Heidi Shierholz, director of policy at the Economic Policy Institute in Washington.
The claims report also showed the number of people receiving benefi ts after an initial week of aid dropped 223,000 to 14.535mn in the week end-ing August 15.
The so-called continuing claims data covered the week during which the government surveyed households for August’s unemployment rate.
Though continuing claims declined between the July and August survey periods, economists expect the un-employment rate remained above 10% this month.
Part of the decrease in continuing claims was likely because of people ex-hausting eligibility for benefi ts.
At least 27mn people were receiving unemployment benefi ts under all pro-grams in the week ended August 8. In a separate report yesterday, the Com-merce Department said gross domestic
product plunged at a 31.7% annualised rate last quarter, the deepest drop in output since the government started keeping records in 1947.
That was revised from the 32.9% pace reported last month and refl ected less steep declines in consumer spend-ing and inventory accumulation than initially estimated.
After-tax profi ts without inventory valuation and capital consumption adjustment dropped at a rate of 11.7%. Profi ts decreased at a pace of 13.1% in the fi rst quarter.
They fell 20.8% year-on-year.Profi ts of domestic fi nancial corpo-
rations rebounded $39.5bn last quarter.Domestic non-fi nancial corpora-
tions’ profi ts fell $170.1bn and prof-its from the rest of the world dropped $96.2bn.
When measured from the income side, the economy contracted at a 33.1% rate in the last quarter.
Gross domestic income (GDI) de-clined at a rate of 2.5% in the January-March period.
The average of GDP and GDI, also referred to as gross domestic out-put and considered a better measure of economic activity, decreased at a 32.4% rate last quarter.
That compared to a 3.7% pace of de-cline in the fi rst three months of the year.
“With a health solution still out of reach and the economic rebound look-ing fragile, fi scal stimulus is urgently needed to prevent the economy from sliding back into a downturn,” said Lydia Boussour, a senior US economist at Oxford Economics in New York.
Job seekers attend a career fair in Houston. Initial claims for state unemployment benefits fell 98,000 to a seasonally adjusted 1.006mn for the week ended Aug 22, the Labour Department said yesterday.
Blackstone gains $5bn on Cheniere LNG stakeBloombergNew York
Blackstone Group Inc will see a $5bn gain from selling a stake in the largest liquefied natural gas export terminal in the US.The firm’s private equity business is unloading its stake of just over 40% of Cheniere Energy Partners LP to Brookfield Asset Management Inc and its own aff iliated infrastructure group, according to a filing.Brookfield negotiated the terms of the transaction, including a $34.25 per unit sale price that values the deal at $7bn, according to people familiar with the matter. Blackstone’s infrastructure unit matched those terms after performing its own due diligence, said the people, who asked not to be named because the details aren’t public.Representatives for Blackstone and Brookfield declined to comment.The infrastructure funds are betting on Cheniere to continue to thrive amid short-term challenges to US LNG exports. The Houston-based terminal operator is generating $4.3bn annually from Sabine Pass and a smaller terminal in Texas through its fixed-fee contract structure, protecting it from the collapse in prices after the Covid-19 pandemic and a mild winter hammered consumption.While global demand is returning seasonally, the long-term outlook for the fuel is also positive with more nations switching to gas from coal amid concerns about climate change.
Cheniere launched the big wave shipping LNG overseas over the past five yearsBloomberg News first reported discussions around Brookfield’s infrastructure group acquiring a minority position in Cheniere Energy Partners earlier this month. The firm reported an initial investment in 2016 and as of June had accumulated a 0.34% holding.Blackstone Energy Partners made a $1.5bn investment in 2012 in Cheniere Energy Partners, which was created by Cheniere Energy Inc to develop the $25bn Sabine Pass LNG terminal in Louisiana. That project, which is underpinned by 20-year contracts with major global traders and utilities, shipped its first cargo in February 2016.More than 85% of the production volume at Sabine Pass is contracted and is expected to earn about $3.3bn in fixed fees annually by the time the sixth liquefaction unit starts up in less than three years.Gas benchmarks are recovering from historic lows after Covid-19 slashed demand.Brookfield’s investment in Cheniere also comes after the asset manager purchased a 25% equity interest in Dominion Energy Inc’s much-smaller Cove Point LNG terminal in Maryland for about $2.1bn. This summer, Warren Buff ett’s Berkshire Hathaway also bought a 25% stake and took over operations at Cove Point as part of a $4bn deal for Dominion gas assets.For Blackstone’s public shareholders, the sale is expected to generate distributable earnings of $0.16 per share, including $0.13 a share upon closing expected in the third quarter, the people said.
Switzerland plunges into recession with historic slump
AFPZurich
Switzerland has plunged into
recession after the coronavirus
pandemic caused a “historic”
8.2% slump in economic activity
in the second quarter, off icial
figures showed yesterday.
“In the second quarter,
Switzerland’s GDP (gross
domestic product) suff ered the
biggest decline since records of
quarterly data began in 1980,”
the economic aff airs ministry
(SECO) said in a statement.
During the first quarter, the
wealthy Alpine nation’s econ-
omy shrank 2.5% compared
to the previous quarter, it said,
revising the figure slightly from
the 2.6% announced in June.
Recession is defined as two
consecutive quarters of contrac-
tion. SECO pointed out that Swit-
zerland was by no way unique,
with the global economy also in
sharp recession as the pandemic
rages worldwide.
To date, more than 820,000
people have died out of the
some 24mn infected globally by
the novel coronavirus.
SECO stressed that in Swit-
zerland, which has seen over
1,700 deaths and more than
40,000 cases, the “GDP decline
remained limited in an interna-
tional comparison.”
During the second quarter,
Switzerland saw manufacturing
slump 9%, with growth in the
country’s sizeable pharma-
ceutical industry preventing a
steeper decline.
Exports of goods, excluding
precious metals and other valu-
ables, plunged 9.4%.
Switzerland’s service sector was
meanwhile hit hardest by the
measures taken to contain the
pandemic, it said, with accom-
modation and food services for
example plummeting over 54%.