13,500 residential units may be added in Qatar during 2022 ...

FINANCIAL MELTDOWN | Page 2

Slow progress as Lebanon awaits IMF economic deal

Friday, December 31, 2021 Jumada I 27, 1443 AH

GULF

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BUSINESS

TOP TALENT : Page 4

Apple aims to prevent defections to Meta with rare $180,000 bonuses

13,500 residential units may be added in Qatar during 2022, says ValuStrat

By Pratap John Business Editor

Some 13,500 residential units are projected to be added in the country during 2022, according to researcher ValuStrat. Subject to a temporary increase in demand arising from growth in expatriate population fuelled by hosting FIFA World Cup in 2022 and Eskan leases, rents of residential units are projected to stabilise and even grow in some areas, ValuStrat said.

Growing ownership by foreigners coupled with positive expectations associated with hosting a major global event could potentially bottom out capital values in the beginning of 2022 and may lead to appreciation in some areas by the yearend.

In terms of office price and rents, ValuStrat said that with reforms to investment regulations made in 2021, and the easing of regional restrictions, it expects a boost in demand which may lead to slowing of office rents declines by end of 2022.

Significant oversupply exceeding 2mn sq m GLA is projected to worsen in 2022 despite the boost to demand, due to projected supply pipeline exceeding 1mn sq m GLA during the year.

There is a risk of work-from-home being reimposed for more than 50% of the workforce due to the spread of Omicron or other likely variants of Covid-19 virus, ValuStrat said.

Despite boost to retail demand in 2022, rent-

als in malls and shopping centres could continue to face downward pressure due to relatively large supply pipeline for the year.

The upcoming shopping centres include Place Vendome Mall, Boulevard Mall, La Plage Mall, Doha Oasis and Giardino Mall.

In hotels category, ValuStrat said occupancy and average daily rates (ADRs) are projected to grow by 15-20% and 20-40% y-o-y respectively during the months in which FIFA World Cup will be hosted.

The upcoming notable hospitality establishments according to the researcher include Rixos Doha Qetaifan, Fairmont & Raffles Lusail Hotel & Residences, Waldorf Astoria, Rosewood Residence Doha, Dream Doha, Century Marina Hotel, Al Baker Novotel and Sofitel, Hampton by Hilton Doha, The St Regis Marsa Arabia Island and Plaza Doha.

In tourism, ValuStrat said a water park, beach club and 5-Star hotel in Qetaifan North project is expected to operate from Q3, 2022, Winter Wonderland operated by IMG (International Marketing Group) will be hosted on Al Maha Island near Lusail, over 200,000sq m (starting from November 2022 for five years), 1.5mn fans are expected to attend 2022 FIFA World Cup, lifting of quarantine measures and social mobility restrictions related to the pandemic might provide a further boost to tourism on all fronts: leisure, regional and cruise

Downside risks involve the government `reintroducing' movement restrictions due to the spread of the Omicron variant of the Covid-19 virus.

Subject to a temporary increase in demand arising from growth in expatriate population fuelled by hosting FIFA World Cup in 2022 and Eskan leases, rents of residential units are projected to stabilise and even grow in some areas, according to ValuStrat. PICTURE: Bonnie James, Gulf Times News Editor

`Opec+ likely to stick to existing policy at January 4 meeting'

Opec and its allies will probably stick to their existing policy of modest monthly increases in oil output at a meeting next week, four sources said, as demand concerns raised by the Omicron coronavirus variant ease and oil prices recover, reports Reuters. The Organisation of the Petroleum Exporting Countries and allies, known as Opec+, is set to decide on January 4 whether to proceed with a 400,000 barrels per day output hike for February, the latest in a steady unwinding of record cuts made last year. "At the moment, I have not heard of any moves to change course," said an Opec+ source. A Russian oil source and two other Opec+ sources also said no changes to the deal were expected next week. At its last meeting on December 2, Opec+ stuck to the plan for a 400,000 bpd rise in January, despite fears that a US release from crude reserves and Omicron would lead to an oil-price rout. The benchmark oil price tumbled more than 10% on November 26 towards $72 a barrel when reports of the new variant first appeared, but has since recovered to almost $80 and Opec+ sources have said the December decision to go ahead with the supply boost was correct. "Great outcome," a separate Opec+ source said of the market's rally since the last meeting. Russian Deputy Prime Minister Alexander Novak said on Wednesday Opec+ has resisted calls from Washington to boost output further because it wants to provide the market with clear guidance and not deviate from policy.

IBPC, DCICAI, IEI Qatar jointly organise event on `finance for non-financial professionals'

Indian Business & Professional Council (IBPC), the Doha Chapter of the Institute of Chartered Accountants of India (DCICAI) and Institution of Engineers (India) Qatar (IEI-QC), jointly organised a session on "Finance for Non-Financial Professionals" recently.

The event saw nearly 150 attendees, comprising eminent dignitaries, professionals and chapter members attending from Qatar, India and other countries.

Ahmed Jassim al-Jolo, former president, Arab Engineers Federation was the chief guest and was introduced by Abdul Sathar, chairman, IEI-QC.

Al-Jolo emphasised the need to develop financial acumen and appreciated the role of engineers and finance professionals and their contribution to the Qatari Economy.

He congratulated organisers for conducting the event on a highly relevant topic.

The guest of honour, Jaffer Us Sadik, president of IBPC, complimented DCICAI and IEI-QC for the knowledge sharing event and highlighted the role played by both these leading organisations in community service and skill development.

He also shared vision and objectives of the IBPC.

Abdulla al-Baker, vice-president, Lean Construction Institute,

The event saw nearly 150 attendees, comprising eminent dignitaries, professionals and chapter members attending from Qatar, India and other countries

Qatar, was another guest of honour.

Gaurav Kakkar, former chairman, DCICAI, explained finance as the language of business and touched upon the managerial accounting tools. Kakkar explained some of the basic terminologies of finance and also deliberated upon the budgeting process and its importance.

Nirlep Bhatt, chairman, DCICAI, explained the importance of cross-functional knowledge sharing and areas which are having an interface between engineers and finance professionals.

Bhatt deliberated on the critical areas by highlighting importance of the cash flow management, procurement procedures, risk management framework and working capital optimisation with practical approach and relevant examples.

The webinar started with the opening mark by Dr Abdul Hameed, secretary, IEI Qatar.

Vice-chairman, DCICAI, Ankit Agarwal, shared various initiatives and activities of the DCICAI.

Abdul Sathar welcomed the gathering while vote of thanks was proposed by DCICAI secretary Vignesh Kalyanaraman.

2

Gulf Times Friday, December 31, 2021

BUSINESS

QSE MARKET WATCH

Slow progress as Lebanon awaits IMF economic deal

AFP Beirut

Lebanon is mired in an economic crisis branded by the World Bank as one of the worst in modern times, but officials are yet to strike an international bailout deal.

The financial meltdown began in 2019, and Lebanon defaulted on its debt last year.

Politicians have failed to enact significant reforms to rescue the Mediterranean country, and many blame the ruling class and central bank policies for the crash.

What is delaying progress on talks with the International Monetary Fund (IMF) to strike a deal and unlock crucial donor funds?

How bad is the crisis? Lebanon's GDP has plummeted from about $55bn in 2018 to a projected $20.5bn in 2021, a "brutal contraction" that the World Bank says "is usually associated with conflicts or wars". Negotiations with the IMF opened in May 2020, but after two months they stalled amid arguments over the size of financial losses. Talks resumed in September this year after the formation of a new government headed by Prime Minister Najib Mikati. Lebanese officials have yet to submit a plan for negotiation. But they have since agreed that financial sector losses amount to around $69bn, according to Deputy Prime Minister Saade Chami, who is leading Lebanon's IMF negotiation team. The Lebanese pound has lost more than 90% of its value in two years, and four out five Lebanese are living under the UN's poverty threshold. Even though the official value of the pound still stands at 1,507 to the dollar, the central bank has adopted multiple exchange rates to try to combat its devalu-

Lebanese pound banknotes are seen at a currency exchange shop in Beirut. The currency has lost more than 90% of its value in two years, and four out five Lebanese are living under the UN's poverty threshold.

ation on the black market. A unification of the different rates "would not be possible" without an IMF deal and political consensus, central bank governor Riad Salameh said this month, adding that $12-15bn was needed to kickstart recovery.

What's on the table? Lebanese officials met IMF delegates in early December to discuss "economic policies that will be an integral part of the funding programme that Lebanon could receive," Chami told AFP. Restructuring Lebanon's banking sector -- a longstanding demand of donors

-- was among the topics discussed, he added.

"We need to prepare, in cooperation with the IMF, a comprehensive economic recovery plan that will be sent to the (IMF's) funding board for approval," Chami said.

The Lebanese government -- which has not met since October due to a political dispute over the fate of investigations into the August 2020 Beirut port blast -- must also sign off on a deal, Chami added.

He said Lebanon could see "concrete results" as soon as January, but warned that the government must "show it is

committed to reforms" before any agreement is reached.

Lebanon's prime minister said Tuesday that the first official meeting with the IMF would take place on January 15.

The visiting IMF delegation will review the progress the government has made, and may return in early February to finalise a deal, Mikati added.

To audit or not? A financial audit of the central bank is among the top demands of international donors, and is widely viewed as a precondition for an IMF agreement. The Alvarez & Marsal (A&M) firm launched an audit in September 2020, but was forced to pull out two months later because the central bank failed to hand over necessary data. In October this year, Lebanese President Michel Aoun said the company would resume its work, and it is due to submit its report to the government next month. Former vice governor of the central bank, Nasser Saidi, suggested the IMF would want to examine the audit, but Chami said no demands had yet been made. "We don't know if a forensic audit, or any audit, will be part of a potential IMF programme," Chami said. But according to Saidi, a potential IMF agreement will ultimately bring in other donors, such as the World Bank and Gulf Arab states, who may demand it as a precondition for support. "We need to understand what is going on inside the central bank," Saidi said. "There is a total lack of transparency." For Saidi, a key question is the actual value of central bank reserves and the real value of financial sector losses. "There seems to be no willingness to undertake a forensic audit," he said, but added that the "bottom line is the IMF will be looking -- before anything -- for promises of good governance."

Company Name

Zad Holding Co Widam Food Co Vodafone Qatar United Development Co Salam International Investme Qatar & Oman Investment Co Qatar Navigation Qatar National Cement Co Qatar National Bank Qlm Life & Medical Insurance Qatar Islamic Insurance Grou Qatar Industrial Manufactur Qatar International Islamic Qatari Investors Group Qatar Islamic Bank Qatar Gas Transport(Nakilat) Qatar General Insurance & Re Qatar German Co For Medical Qatar Fuel Qsc Qatar First Bank Qatar Electricity & Water Co Qatar Exchange Index Etf Qatar Cinema & Film Distrib Al Rayan Qatar Etf Qatar Insurance Co Qatar Aluminum Manufacturing

Ooredoo Qpsc Alijarah Holding Company Qps Mazaya Real Estate Developme Mesaieed Petrochemical Holdi

Al Meera Consumer Goods Co Medicare Group

Mannai Corporation Qsc Masraf Al Rayan

Al Khalij Commercial Bank Industries Qatar

Inma Holding Company Investment Holding Group Gulf Warehousing Company Gulf International Services Al Faleh Education Holding

Ezdan Holding Group Doha Insurance Co Doha Bank Qpsc Dlala Holding

Commercial Bank Psqc Barwa Real Estate Co Baladna

Al Khaleej Takaful Group Aamal Co

Al Ahli Bank

Lt Price % Chg

16.70 3.59 1.67 1.54 0.82 0.81 7.64 5.10 20.19 5.05 8.00 3.07 9.21 2.22 18.33 3.30 2.00 3.18 18.28 1.79 16.60 11.45 3.55 2.57 2.75 1.80 7.02 0.94 0.92 2.09 19.60 8.50 4.75 4.64 0.00 15.49 3.95 1.23 4.54 1.72 1.55 1.34 1.92 3.20 1.23 6.75 3.06 1.45 3.60 1.08 3.83

0.00 1.64 1.58 -2.53 0.61 0.49 0.42 0.00 0.10 -0.98 -1.20 0.56 0.00 -0.85 0.11 0.00 8.11 -0.93 2.47 0.28 -0.24 0.32 0.00 0.16 5.77 -1.37 2.60 0.00 -0.97 -4.13 0.00 1.30 0.38 -4.13 0.00 0.06 -1.62 0.08 -0.02 0.35 -3.13 0.83 0.10 8.47 -1.59 1.03 -3.04 0.14 -1.02 3.04 0.79

Volume

46,534 4,902,792 2,582,526 18,202,555 2,860,470 1,058,328 214,349 3,238,171 28,079 72,600 1,376 960,467 597,978 1,379,221 972,131 100 2,358,156 2,165,217 573,077 377,843 25 4,000 5,448 7,445,755 6,469,087 1,094,057 9,895,423 14,493,852 8,403,750 34,854 440,518 28,190 10,325,459 298,494 989,467 3,680,434 2,087 4,691,499 50,740 10,867,722 10,500 8,678,455 858,074 1,597,375 5,195,412 2,173,551 417,404 2,331,993 2,900

Tunisia to borrow $7bn more in 2022

AFP Tunis

Debt-ridden Tunisia has unveiled a 2022 budget that will see it borrow almost $7bn more, as it seeks to stimulate an economy battered by the coronavirus pandemic. The 2022 finance law boosts spending by over 3% year on year to 57.3bn dinars ($19.8bn, 17.6bn), finance minister Sihem Boughdiri said. The deficit is expected to hit some 6.2% of gross domestic product (GDP), she told reporters. The government will borrow almost 20bn dinars ($6.9bn, 5.7bn ) to cover 2022 expenditures, bringing government debt to 82.6% of GDP. Around two thirds of the figure is to come from foreign lenders, and the remainder from domestic sources, Boughdiri said. Tunisia has suffered years of economic woes exacerbated by the coronavirus pandemic, with high inflation and unemployment at around 18%. Foreign debt in 2021 hit 100% of GDP. In order to replenish state coffers, the authorities are also hoping to reach a bailout deal with the International Monetary Fund, Boughdiri confirmed. "Negotiations with the IMF will restart at the beginning of 2022," Boughdiri said. She said 80 experts had formulated "a programme of reforms in several sectors". Tunisia's previous government had been in talks with the IMF over a new bailout package, when President Kais Saied in July sacked ministers and seized far-reaching powers.

Emirates upbeat on 2022 growth despite global surge in Covid

AFP Dubai

Aviation giant Emirates said yesterday it expects business to grow next year despite the surge in global coronavirus cases fuelled by the Omicron variant.

The Dubai-based carrier said in November it was already on the path to recovery as six-month losses dropped by more than half from a year earlier.

"Despite the recent rise of the Omicron variant and the slight slowdown it brought to our network, we are going into 2022 with optimism," said Emirates CEO Sheikh Ahmed bin Saeed al-Maktoum.

"We've built up some great momentum this year and expect business growth to pick up speed in 2022," he said in a company statement.

"Aviation has always been resilient, and we will continue to work with our industry partners to build back better for our customers and communities."

Emirates president Tim Clark said in November that the carrier expects to return to profitability "in the next 18 months". The carrier posted an April-September loss of $1.6bn, compared with losses of $3.4bn during the same period in 2020.

Emirates specialises in long-haul flights, with its fleet composed solely of large A380 and B777 aircraft, dozens of which it grounded amid a lack of passenger traffic.

According to the statement on Thursday, its passenger network by December had reached 128 cities, adding all the carrier's 133 Boeing 777 aircraft and nearly 60 of its A380 fleet are in active service.

Earlier this month, Dubai International Airport, one of the world's busiest travel hubs, announced it was fully operational for the first time since the pandemic erupted in March 2020.

According to Emirates, a peak in travel has begun ahead of the New Year, with nearly 1mn passengers expected to depart and arrive in Dubai between December 30 and January 10.

Emirates airliners are seen on the tarmac in a general view of Dubai International Airport in Dubai (file). The carrier posted an April-September loss of $1.6bn, compared with losses of $3.4bn during the same period in 2020.

2021: A mind-boggling year for equities

By Peter Garnry

Equities have had a fantastic year delivering 21% return following already extraordinary gains in 2020. It seems almost impossible given the galloping inflation not seen since the early 1980s, but low nominal yields have created an environment of equities being the only game in town. The gains in equities have completely been due to technicalities such as low nominal yields, but have also been driven by a bonanza in earnings with earnings up 28% compared to 2019 showing the massive impact from public stimulus into the private sector. While looking back we are also looking ahead at what to expect in 2022 and how investors should tilt their equity portfolios towards themes that can thrive during inflation. As investors are getting ready to close their books for the year it is always worthwhile reflecting on the year that has just passed. If we told you that S&P 500 would be up 28% and MSCI World up 21% for the year as the US core inflation hit almost 5%, the highest since the early 1980s, then you would not have believed it. The key to understand why equities are higher despite inflationary pressures are rooted in the bond market's reaction to rising inflation. The bond market sided with the Fed perceiving inflation to be transitory, but even as the Fed has terminated this language and said inflation is more deep rooted and persistent than initially thought, the bond market keep predicting inflation to remain low. This is based on the high debt-to-income levels

in many parts of the world, ageing populations, and technology advancements all suppressing inflationary forces longer term. The stubbornly low nominal yields while realised and expected inflation are rising have caused a massive downward pressure on real yields, which sets in motion a sizeable reallocation into equities. Why would you invest in bonds when your capital is being destroyed in real terms? You might as well swing for equities despite historically high prices and valuation because maybe you can at least defend capital against the corrosive inflation. In other words, TINA (there is no alternative) is still very much alive in financial markets as 2022 approaches, because as John Maynard Keynes and Warren Buffett both have observed but in different context, inflation is the enemy of the capitalistic economy and investors. While low nominal yields have played their part in the equity rally this year through their impact on the cost of capital which is used for discounting future free cash flows, investors should not ignore the fact that earnings in the MSCI World Index are up 104% for the first three quarters of 2021 compared to the same period of 2020. For those who think that this is just the rebound effect should note that earnings in the first three quarters of 2021 are up 28% compared to the same period of 2019. In other words, the earnings power of companies coming out of the pandemic has been extraordinary and driven by the enormous loose monetary and fiscal stimulus operating on a combined level not seen since the post WWII years. The deficits across many of the world's

largest economies have created a corresponding surge in private sector surplus. The irony of high profits and stellar equity returns in 2021, is that 2022 might go "wrong" for equities due to inflation outlook as a reaction in the bond market of 100 basis point in the long end of the US yield curve (10-year Treasuries) could push down equities regardless of earnings growth. We have recent estimated growth stocks such as Pinterest and Adobe to have interest rate sensitivity of 18% and 26% which means that is negative impact on their equity valuation from a 100 basis point move in the US 10-year yield holding all other things constant.

The overall US equity market probably has an equity duration around 15-18% which means that simply higher nominal yields could offset earnings growth next year. US technology stocks have a negative excess return compared global equities on days when long-term yields are increasing while European equities exhibit positive excess returns as they have a larger weight on financials, energy and mining. We still think investors should continue to rebalance their equity portfolios towards being better at absorbing higher interest rates and inflation in 2022. This includes adding exposure to the commodity sector, financials, semiconductors, logistics, and financial trading firms which benefit from higher volatility and can also work as a hedge against tail losses in equity portfolios. Our green transformation basket is down 6% this year giving up some of its massive gains from 2020 when investors poured capital into this theme. Driven by a major breakthrough year for electric vehicles production next year the green transformation trade will come back with a vengeance. Vale is explicitly saying that it wants to become North America's preferred supplier of the metals needed for the electric vehicle industry and Rio Tinto is also heavily investing in lithium carbonate projects including a big project in Serbia, which has the potential supply almost 10% of Europe's annual need for its electric vehicle production in the future. The green transformation in terms of electric vehicles, solar, wind, energy storage, hydrogen production will continue due to put upward pressure on many

key metals and long-term we believe the green transformation will add significantly to the long-term inflation rate. India looks like the next China in terms of growth, infrastructure investments, market reforms, technology IPOs and subsequent returns for shareholders, and urbanisation. Indian equities have been one of the best equity markets over the past 20 years growing earnings 10% annualised and we believe this trend will continue over the next 10 years with extraordinary returns for investors. But India's huge growth and urbanisation will happen simultaneously with the green transformation and also add to global inflation through commodity inflation. China was on the defensive this year being oddly out of sync with the rest of the world. The housing crisis is causing a negative impact on the economy, credit markets, and consumer confidence. While the industry needs a solution it has to be balanced against the "common prosperity" narrative and we are already seeing signs that the government and central bank are beginning to mitigate the impact on the economy. Public stimulus will come back in 2022, but the looming question is where profitability goes from here as the technology crackdown and other reforms such as the new data privacy law are having an impact with analysts constantly lowering their estimates for growth. We do not have a firm view on where Chinese equities go next, except for our bullish view on consumer goods businesses as they are not intrinsically data-driven.

Peter Garnry is head of equity strategy at Saxo Bank.

Gulf Times Friday, December 31, 2021

3

BUSINESS

Bloomberg QuickTake Q&A

Why China, US are clashing over stock listings

By Sofia Horta e Costa and Richard Frost

Chinese companies in need of capital have long headed to the US stock market to tap deeppocketed investors, raising more than $100bn in first-time share sales over the past two decades. The money flow was profitable for company founders, bankers, early investors and new shareholders. All this has changed due to actions by both countries. Ride-hailing giant Didi Global Inc said it would withdraw from the New York exchange, a stunning reversal as it yielded to demands from Chinese regulators.

1. What action did the US take?

Under a law signed by president Donald Trump a month before he left office, Chinese companies may face delisting starting in 2024 if they refuse to show financial information to American regulators. Rules developed by the US Securities and Exchange Commission to carry out that law require that audits done for Chinese companies be made available for inspection by the US Public Company Accounting Oversight Board, a quasi-governmental body created by Congress two decades ago to improve the integrity of audits. China has refused to let the PCAOB examine audits of its firms, citing national security concerns. The SEC said that while more than 50 jurisdictions work with the PCAOB to allow the required inspections, two historically have not: China and Hong Kong.

2. What action did China take?

New rules unveiled in December require all Chinese companies seeking initial public offerings or additional share sales abroad to register with the securities regulator. The requirements apply to new shares only and won't affect the foreign ownership of companies already listed overseas. This category includes e-commerce giant Alibaba Group Holding Ltd, which raised $25bn in a 2014 debut listing on the New York Stock Exchange, at the time the world's biggest-ever IPO. Any firm whose listing could pose a national security threat won't be allowed to proceed. Those in industries banned from foreign investment need to seek a waiver before listing. Companies holding data on at least 1mn people also have to undergo cybersecurity and national security reviews.

3. Why is China doing this?

Many of China's technology firms have nearmonopolies in their fields and vast pools of user data, and the Chinese Communist Party appears intent on making sure sensitive data can't be accessed by foreign regulators. In June, Didi had rankled Beijing by proceeding with its US IPO -

A trader works during the IPO for Chinese ride-hailing company Didi Global Inc on the New York Stock Exchange (NYSE) floor in New York City on June 30, 2021. Didi Global Inc has said it would withdraw from the New York exchange, a stunning reversal as it yielded to demands from Chinese regulators.

shepherded by a who's who of Wall Street banks - even after authorities had expressed concerns over its data security practices. More broadly, the Communist Party appears intent on reining in tech billionaires such as Jack Ma and Pony Ma, whose companies became the largest private enterprises in China with the aid of foreign capital, and hold great sway over nearly every aspect of modern life. Tamping the tycoons' swagger also aligns neatly with President Xi Jinping's push to promote "common prosperity" and better harness big data, a strategic asset in China's showdown with America.

4. What's been the impact?

Days after Didi's IPO, China's cybersecurity regulator told app stores to remove the company's app, citing serious violations on the collection and usage of personal information. Didi's share price fell as much as 25% on the first trading day after that. Shareholders sued the company, as well as its directors and underwriters, claiming Didi failed to disclose talks it was having with Chinese authorities about its compliance with cybersecurity laws. Didi said on December 2 that it will file for a delisting of its American depositary shares from the New York Stock Exchange and start work on a

Hong Kong share sale. It said it would ensure that the US stock will be convertible into freely tradable shares on another internationally recognized stock exchange. Meanwhile, other companies were said to have shelved or delayed their US IPO plans, including health-care firm LinkDoc Technology Ltd, bike-sharing company Hello Inc and audio-sharing platform Ximalaya Inc. RoboSense, a Chinese developer of sensor technologies used in selfdriving cars, decided to list in Hong Kong instead, following others like Lalamove and Xiaohongshu.

5. Is China trying to discourage foreign ownership?

Quite the opposite. China has opened the door to full foreign ownership of financial services companies and local banks in recent years, though strict limits remain on foreign investment in certain areas such as internet, transportation, mining and media companies. The so-called variable interest entity (VIE) structure was developed as a way around those limits. Under a VIE, which was pioneered by now-private Sina Corp in 2000, a Chinese company receives foreign investment via a shell company incorporated in a place such as the Cayman Islands or the British Virgin Islands, outside the purview of Chinese regulators. Legally

shaky and hard to understand, this solution nonetheless proved acceptable for years to US investors, Wall Street and the Communist Party alike - until now.

6. What could be coming next?

Stocks worth almost $200bn currently listed only in the US may need to relocate to exchanges in Hong Kong or the mainland soon, according to Bloomberg Intelligence. Potential candidates include Pinduoduo Inc and Nio Inc. One expert predicts the US won't have any major Chinese listings within the next five to 10 years. In November, a commission created by the US Congress to track and anticipate threats from China recommended prohibiting US investment in VIEs linked to Chinese entities or, at the least, more prominently flagging the risks involved to investors. The SEC is already asking more detailed questions of Chinese firms about offshore corporate structures before it will consider allowing them to go public in the US. China stopped short of a ban on VIEs when it unveiled its sweeping regulations governing overseas share sales at the end of 2021, but the rules make the structure less relevant because such listings will also be supervised by Beijing.

Didi reports $4.7bn Q3 loss

AFP Beijing

Chinese ride-hailing giant Didi Global yesterday reported a $4.7bn loss in the third quarter, as its revenues plummeted because of a regulatory crackdown by Beijing.

The troubles for the firm -- once called China's Uber -- began after it listed in New York in June, seemingly against the wishes of Beijing.

China then shocked investors by launching cybersecurity investigations into the company.

Didi was removed from app stores, and its stock has since fallen almost two-thirds in value.

The firm announced this month it would delist from the New York Stock Exchange and prepare to shift to Hong Kong.

It reported a third-quarter loss of $4.7bn, the bulk of the company's losses for the year to date, in a regulatory filing to the US Securities and Exchange Commission yesterday.

It recorded an operating loss of $6.3bn for the first nine months of the year.

Total revenues slipped 11% in the last quarter, after China removed Didi from domestic app stores in July, preventing new users from signing up.

China recently proposed a new law under which companies seeking foreign IPOs would need to register with the securities regulator. A listing will be blocked if it is considered a threat to national security.

Some of China's biggest firms have listed in the United States in search of more developed markets and fresh lines of cash from a massive investor base, but enthusiasm has wavered as tensions have soared between Washington and Beijing.

Friday, December 31, 2021

GULF TIMES

BUSINESS

China sees `unprecedented' difficulty in stabilising 2022 trade

Bloomberg Beijing

China faces "unprecedented" difficulty in stabilising trade next year as favourable conditions that boosted export growth this year won't be sustainable, according to a commerce ministry official. Export gains may slow as competing countries recover their production capacities and as inflation that pushed up export values gradually eases, Ren Hongbin, vice-minister of the commerce ministry, said at a briefing in Beijing yesterday. This year's rapid export gains also make the base of comparison higher for 2022, he said. China will enhance trade companies' awareness and ability to manage foreign-exchange risks, according to Ren. The government will also step up efforts to ease pressures from international logistics and supply chain problems, he said, vowing to actively ensure the supply of commodities. We will "make every effort to keep foreign trade running

within a reasonable range," Ren said. These cross-cyclical measures are meant to help stabilise trade in early 2022, he said. He expected China's goods imports and exports to grow more than 20% in 2021 to a total of $6tn. Ren's comments echo concerns raised earlier this week by Commerce Minister Wang Wentao, who said it will be hard for China to keep its trade growth stable next year. China's exports have stayed resilient throughout the year, providing some support for an economy that's been weighed down by regulatory crackdowns and repeated virus outbreaks. Overseas shipments have posted double-digit gains in every month this year, with an exception in February when shipments jumped 155% from a year-earlier slump. But the outlook for trade is less certain, as overseas appetite for Chinese goods is set to weaken if the global economic recovery loses steam. Chinese exporters are also battling high raw material prices, as well as surging labour and freight costs.

Containers stacked at Lianyungang port, in China's eastern Jiangsu province (file). China's exports have stayed resilient throughout the year, providing some support for an economy that's been weighed down by regulatory crackdowns and repeated virus outbreaks.

Apple aims to prevent defections to Meta with rare $180,000 bonuses

Bloomberg New York

Apple Inc has issued unusual and significant stock bonuses to some engineers in an effort to retain talent, looking to stave off defections to tech rivals such as Facebook owner Meta Platforms Inc.

Last week, the company informed some engineers in silicon design, hardware, and select software and operations groups of the out-of-cycle bonuses, which are being issued as restricted stock units, according to people with knowledge of the matter. The shares vest over four years, providing an incentive to stay at the iPhone maker.

The bonuses, which came as a surprise to those who received them, have ranged from about $50,000 to as much as $180,000 in some cases. Many of the engineers received amounts of roughly $80,000, $100,000 or $120,000 in shares, said the people, who asked not to be identified because the program isn't public. The perk was presented by managers as a reward for high performers.

A representative for the Cupertino, California-based company declined to comment.

Apple is waging a talent war with companies in Silicon Valley and beyond, with Meta emerging as a particular threat. Meta has hired about 100 engineers from Apple in the last few months, but it hasn't been a one-way street: Apple also has lured

The Apple logo is projected on a screen before the start of a product launch at Apple's headquarters in Cupertino, California (file). Apple is waging a talent war with companies in Silicon Valley and beyond, with Meta emerging as a particular threat.

away key Meta employees. The two companies are likely to become fierce rivals in augmented- and virtualreality headsets and smartwatches, with both planning major hardware releases over the next two years.

The payouts aren't part of normal Apple compensation packages, which include a base salary, stock units and a cash bonus. Apple some-

times awards additional cash bonuses to employees, but the size of the latest stock grants were atypical and surprisingly timed, the people said. They were given to about 10% to 20% of engineers in applicable divisions.

The bonus program has irked some engineers who didn't receive the shares and believe the selec-

tion process is arbitrary. The value of some of the bonuses equalled the annual stock grant given to some engineering managers. And their value stands to increase if Apple's stock price continues to rise. The shares are up 36% this year, putting the company's market capitalisation at nearly $3 trillion.

Meta, meanwhile, has stepped

up efforts to poach engineering talent from Apple's augmented reality, artificial intelligence, software and hardware engineering divisions. The social media giant, which operates Facebook, Instagram and WhatsApp, has dangled significant salary raises as it looks to refocus around hardware and the so-called metaverse.

A talent drain also has hit other areas, including Apple's self-driving car team. The company needs to maintain its engineering prowess as it works on several next-generation devices, including the car, VR and AR headsets, and future versions of the iPhone.

At the same time, Apple's drumbeat to return to the office has jarred some employees, leading to engineering defections. Though the company has delayed its deadline for staff to come back, it's taking a harder line on in-person work than some of its technology peers.

Apple has said it expects corporate employees to work from the office at least three days per week, while hardware engineers will be required to log four or five days a week. Meta and other companies intend to be more lax with their policies.

But Apple acknowledged this month that workers will likely stay at home for the foreseeable future. After scrapping its office-return deadline, Apple said it would issue $1,000 bonuses to all corporate, retail and technical-support employees so they can purchase home equipment.

Germany to pull the plug on 3 of its last 6 nuclear plants in push for renewables

Three of Germany's last six reactors to shut down Final phase-out by the end of 2022 Dismantling to cost over $10bn Anti-nuclear consensus still strong, minister says

Reuters Berlin

Germany will pull the plug on three of its last six nuclear power stations on Friday, another step towards completing its withdrawal from nuclear power as it turns its focus to renewables.

The government decided to speed up its phasing out of nuclear power following Japan's Fukushima reactor meltdown in 2011 when an earthquake and tsunami destroyed the coastal plant in the world's worst nuclear disaster since Chernobyl 25 years earlier.

The reactors of Brokdorf, Grohnde and Gundremmingen C, run by utilities E.ON and RWE, will be shut down on Friday after three and half decades in operation.

The last three nuclear power plants -- Isar 2, Emsland and Neckarwestheim II -- will be turned off by the end of 2022.

The phase-out of an energy deemed clean and cheap by some is an irreversible step for Europe's biggest economy, facing ambitious climate targets and rising power prices.

"For the energy industry in Germany, the nuclear phase-out is final," said Kerstin Andreae, the head of energy industry association BDEW.

The six nuclear power plants contributed to around 12% of electricity production in Germany in 2021, BDEW preliminary figures showed.

The share of renewable energy was almost 41%, with coal generating just under 28% and gas around 15%.

Germany aims to make renewables meet 80% of power demand by 2030 through expanding wind and solar power infrastructure.

The new government, which plans to step up climate protection efforts, stood by the nuclear power phase-out in its coalition agreement.

Economy and Climate Protection Minister Robert Habeck on Wednesday said he did not see the anti-nuclear consensus weakening in Germany.

Environmental groups welcomed the move but warned that 2022 was not the real end of the nuclear era in Germany.

"We have to say that there will still be uranium enrichment plants in Germany, like the one in Gronau," Arne Fellermann, a manager at the BUND environmental group, told Reuters.

"There is also a research reactor in Garching that still works with weapons-grade uranium," Fellermann added.

Asked about possible job losses, Gundremmingen mayor Tobias Buehler said the plant's employees would be busy with dismantling the reactor after the shutdown.

"And this period of dismantling will certainly take another one or two decades," Buehler said.

Total costs for the dismantling are estimated by E.ON at 1.1bn ($1.25bn) per plant.

In 2020, E.ON made provisions of 9.4bn for the nuclear post-operational phase, including dismantling the facility, packaging and cleaning up the radioactive waste.

The dismantling is expected to be completed by 2040.

Energy costs soar in 2021, fuelled by geopolitical tensions

AFP London

Energy prices soared in 2021 -- with gas, oil, coal, electricity and carbon all shooting higher in large part owing to a resurgence of geopolitical tensions between producers and consumers.

The "steep rise in prices was probably the most dramatic development on the commodities markets in 2021", noted Commerzbank analyst Barbara Lambrecht.

The most spectacular surge was that of Europe's reference gas price, Dutch TTF, which hit 187.78 per megawatt hour in December -- 10 times higher compared with the start of the year.

The spike has been fuelled by geopolitical tensions surrounding Russia, which supplies one third of Europe's gas.

Western countries accuse Russia of limiting gas deliveries to put pressure on Europe amid tensions over the Ukraine conflict and to push through the controversial Nord Stream 2 pipeline set to ship Russian gas to Germany.

Critics say Nord Stream 2 will increase Europe's dependence on Russian gas and Ukraine has described it as a "geopolitical weapon". Russian energy giant Gazprom has strongly rejected Western accusations

that Moscow is limiting gas deliveries to Europe, already hit by low stocks as economies reopen from pandemic lockdowns.

Reliance on gas increased as calmer weather has reduced the availability of wind power.

Crude oil prices rocketed also in 2021, gaining more than 50% as demand recovered and oil producing nations led by the Organisation of Petroleum Exporting Countries and allies including Russia modestly boosted supplies.

It came after Opec+ drastically slashed output in 2020 as the pandemic began to unfold, and virus-related restrictions caused demand and prices to crash.

Although crude prices have shot back up, trading above $75 per barrel heading into the new year, the jump "seems almost moderate by comparison" with gas, noted Lambrecht.

US oil benchmark contract, West Texas Intermediate, reached a seven-year peak at $85 per barrel in October, before easing.

Soaring gas and oil prices have pushed up the cost of coal, one of the most polluting fossil fuels, at a time when countries are under pressure to increasingly switch to cleaner energy sources.

A tonne of coal for delivery to the ports of Amsterdam-Rotterdam-Antwerp struck $280 at the start of October, nearly three times the price that had lasted for around a decade.

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