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Turkey’s industrial output down 2.7%

ANKARA (AA): Turkey’s industrial output in September fell by 2.7 percent year-on-year, the country’s statistical authority TurkStat announced on Friday.

Calendar adjusted industrial production index was 116.4 September, while the index value was 119.6 in the same month last year.

Among all the sub-sectors of the industry, the highest annual decrease was seen in the manufacturing of furniture, with a 34-percent drop.

On a monthly basis, the country’s total industrial output also declined by 2.7 percent in September compared to August. The seasonally and calendar adjusted industrial production index was 113.5 in September, as it was 116.6 in August.

According to TurkStat, the purpose of calculating monthly industrial production index is to measure the evolution of the economy and the positive and negative effects of economical political decisions in the short term.

In September, the mining and quarrying index rose by 5 percent on a yearly basis, as the manufacturing and the electricity, gas, steam and air conditioning supply indices were down 3.2 percent and 1.3 percent, respectively.

In the mining and quarrying sector, mining of coal and lignite index recorded the biggest rise with an 11.1-percent increase, while the lowest annual increase was registered by the extraction of crude petroleum and natural gas index — up 2.3 percent.

On the manufacturing side, high technology products saw an annual hike of 8.7 percent while the index of medium-low technology products dropped 7.3 percent.

In the country’s overall industrial output, the production of non-durable consumer goods rose by 1.2-percent year-on-year, as the production of all other products fell in September.

The annual decreases were 4.8 percent in intermediate goods, 4.4 percent in durable consumer goods, 0.7 percent in energy, and 4.1 percent in capital goods.

TurkStat will release the next industrial production figures on Dec. 17.



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Turkish economy: Total turnover up 32.3% in Sept

ANKARA (AA): Turkey’s economy saw an annual hike of 32.3 percent in total turnover in September, according to the country’s statistical authority on Friday.

TurkStat said the calendar adjusted total turnover index — including industry, construction, trade and services sectors — was 200.1 in September, versus 151.2 in the same month last year.

On a yearly basis, the turnover increased by 49.4 percent in industry, 3.5 percent in construction, 26.2 percent in trade, and 37.1 percent in the services sector.

According to TurkStat’s definition, turnover is an important short-term indicator used to assess the country’s economic situation.

“Turnover indices are calculated to follow the changes of this concept, which is composed of the sales of goods and services invoiced by the enterprise in the reference month over time, to monitor developments on a quarterly and yearly basis,” it said.

The institute also said that all the enterprises which give value-added tax declarations to the country’s Revenue Administration are included in the turnover index calculation.

Economic activities

Turnovers in the manufacturing industry and mining/quarrying sector — sub-sectors of total industry — saw annual increases of 49.2 percent and 54.4 percent, respectively.

Over the same period, the energy goods turnover index climbed 116.9 percent to show the top performance, while turnover of durable consumer goods increased by 21.6 percent, marking the lowest hike.

In the construction sector, the turnover of building construction in September fell by 11.2 percent on a yearly basis, while civil engineering activities and the construction of utility projects saw rises of 39.3 percent and 14.1 percent, respectively.

Excluding the motor vehicles and motorcycles, the wholesale and retail trade turnover indices increased by 31 percent and 22.5 percent, respectively.

Among all 33 sub-activities under the services sector, the highest turnover increase was seen in accommodation — up 80.2 percent –, and the largest decline was recorded in services to buildings and landscape activities with a 31.9 percent-drop.



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Over 500 professionals attend SECP sessions on anti-money laundering

F.P. Report

ISLAMABAD: More than 500 professionals from the securities and commodities market, insurance sector, non-banking financial institutions (NBFI) and the Securities and Exchange Commission of Pakistan (SECP) have attended 20 awareness sessions on anti-money laundering/counter financing for terrorism (AML/CFT).

The SECP held these sessions in Lahore, Karachi, Islamabad in collaboration with USAID’s Financial Market Development (FMD) project.

The sessions were designed to help representatives of financial institutions understand the risk-based approach under the AML/CFT framework and focused on the Financial Action Task Force (FATF) recommendations applicable to the financial institutions and the FATF monitoring process.

Tariq Bakhtawar, Director, SECP Anti-Money Laundering Department said, “With USAID FMD’s technical support, the SECP regulated sectors were briefed on AML/CFT self-assessment. This will result in the laying the necessary foundations for the implementation of a risk-based approach.”

The SECP’s Anti-Money Laundering and Countering Financing of Terrorism Regulations (June 2018) and the supplementary guidelines (issued in September 2018) shift the perspective from one-size-fits-all to the risk-based approach, enabling financial institutions to focus their resources on the high-risk customers. These sessions focused on capacity building of the regulated sector, explained the AML/CFT risk assessment in relation to customer, countries, products and services and delivery channels through illustrations and case studies and tables leading through the process.

The sessions have resulted in strengthening the AML/CFT risk assessment and compliance framework and in particular, the detecting and reporting of suspicious transaction reports (STRs) to the Financial Monitoring Unit.

Areas discussed in the SECP AML/CFT Guidelines include the AML/CFT compliance assessment checklist alongside internal policies, ongoing monitoring, customer due diligence measures and red flags and high-risk indicators- all part of the AML/CFT program.

Participants’ queries on the implementation of the risk-based approach were also addressed at these interactive sessions.

“This session has helped us understand a very technical area on which we will be working in the future,” said Rauf Sajid Ali, of Yasir Habib Securities. Amara Zakaria, head of compliance at First National Equities, remarked, “The sessions were helpful to me in training the team at the compliance department.”

USAID’s Financial Market Development Activity is a multi-year project, which promotes the development of competitive and diversified debt capital market in Pakistan working with Ministry of Finance, the State Bank and the SECP and a number of other capital and financial market sector institutions.


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PTCL signs MoU with NDCTECH

F.P. Report

KARACHI: Pakistan Telecommunication Company Limited (PTCL) signed a Memorandum of Understanding with NDCTECH an award winning partner of Temenos, world’s number one- Banking Software, to create an in-country banking cloud platform by offering value added services for Temenos Software over PTCL cloud.

The partnership agreement was signed in Karachi by PTCL Chief Business Services Officer, Adil Rashid and CEO and President, NDCTECH Ammara Masood.

On the occasion, Farooq Ahmed Jalali, Executive Vice President Digital Services Sales-PTCL Nabeel Amjad, General Manager Business Applications-PTCL Behram Ahmed, Chairman– NDCTECH Navaid Kareem, EVP Sales –NDCTECH and Jean-Paul Mergeai, Regional Managing Director-Temenos Middle East and Africa were also present.

Following this understanding, NDCTECH and PTCL would jointly host Temenos Software for clients wanting to use Test & Development value added services on PTCL Cloud. The companies will also embark on a joint advocating effort for the creation of a local banking cloud setup in the country for Production in the future.

PTCL Chief Business Services Officer Adil Rashid said, “Owing to the recent data leakages in the financial sector, the need for an in-country cloud based hosting solution for financial sector has increased many folds. With this agreement PTCL & NDCTECH shall jointly help to create safer and more secure data storage & processing environment for financial data within the country.

This initiative would serve to reduce costs for the fin-techs; as well as create a safe and secure cloud based hosting solution for the Pakistani financial industry, previously restricted to keep transactional data on-premises only.

Temenos core banking platform has been the best-selling solution in the global market for 15 years, used by more than 700 financial institutions. Over 3,000 firms across the globe, including 41 of the top 50 banks, rely on Temenos to process the daily transactions of more than 500 million banking customers.

Ammara Masood, CEO and President, NDCTECH, said, “Our expertise across retail banking, corporate & Investment banking, regulatory risk and compliance, mobile banking, channels, payments, lending and mortgages address transformational changes for our customers.”

He said it is vital for the public and private sectors to transform customer experience drive business innovation and raise productivity to the next level.


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China offer unlikely to trigger breakthrough in trade talks

WASHINGTON (Agencies): China’s written response to U.S. demands for trade reforms is unlikely to trigger a breakthrough at talks between Presidents Donald Trump and Xi Jinping later this month, a senior Trump administration official told on Thursday.

Beijing provided the Trump administration with its document earlier this week, responding to a months-long request from U.S. officials for commitments that would jumpstart trade talks, it was reported on Wednesday.

It was a good sign that Beijing had put something in writing after months of declining to do so, the official said, speaking on condition of anonymity.

The Chinese document included 142 items divided into three categories: issues the Chinese are willing to negotiate for further action, issues they are already working on and issues they consider off limits, the official said.

The items on Beijing’s non-negotiable list were unacceptable to the United States, the official said, and the overall list deserved to be looked at with scepticism in part because China has previously made pledges on economic and trade reforms that it had not fulfilled.

He cited as an example a past offer by China to loosen restrictions on U.S. ownership of Chinese companies and said that China had subsequently failed to follow through with licenses for U.S. companies.

U.S. officials were still studying the list, which the official said was received on Monday night.

With the G20 summit only two weeks away, the official played down expectations of a major breakthrough on substantive issues on trade during talks between Trump and Xi at the gathering of world leaders in Argentina at the end of November.

A best-case scenario could be that the two leaders agreed to keep talking and declare the issue is moving in a better direction, the official said.

It was too early to tell whether China’s offer would be sufficient to preclude an increase in U.S. tariffs at the start of 2019, he said.

Trump has imposed tariffs on $250 billion of Chinese imports to force concessions from Beijing on the list of demands that would change the terms of trade between the two countries. China has responded with import tariffs on U.S. goods.

The tariff rate on $200 billion in Chinese goods is set to increase to 25 percent from 10 percent on Jan. 1.

Trump has also threatened to impose tariffs on all remaining Chinese imports, about $267 billion worth if Beijing fails to address U.S. demands.

Trump, who has made it clear he values his relationship with Xi, and some members of his administration have been optimistic in recent public statements on the possibility of a deal.

Another source who has been briefed on the status of U.S.-China negotiations said that the negotiations between the two sides on trade had yet to advance in line with the more positive rhetoric.

The person said China’s offer was “a rehash” of previous commitments articulated by Xi.

One option for a deal, the person said, would be for Washington to hold off on raising tariff rates in return for some short-term actions by the Chinese while the two sides negotiate thornier, longer-term issues.

Trump’s chorus of economic advisers continue to provide different views on China.

Peter Navarro, a trade adviser who has advocated harsh measures against China, was admonished publicly this week by economic adviser Larry Kudlow for “freelancing” with recent remarks in which he urged Wall Street not to interfere on the issue.

Despite that, Navarro continued to play a role in trade policy discussions at the White House, the administration official said.

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Oil prices fall on concerns of oversupply

SINGAPORE (Reuters): Oil prices slipped on Thursday, weighed down by rising supply going into a market in which consumption is expected to slow down amid a glum economic outlook.

Front-month Brent crude oil futures were trading at $65.88 per barrel at 0441 GMT, down 24 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $55.96 a barrel, down 29 cents, or 0.5 percent.

Since early October, oil prices have lost around a quarter of their value as supply soars just as demand is expected to slow down along with an economic downturn.

“Asian refiners and consumers we speak with are mentioning initial concerns of slowing demand,” said Mike Corley, president of Mercatus Energy Advisors.

U.S. bank Morgan Stanley said in a note on Wednesday that China’s economic “conditions deteriorated materially” in the third quarter of 2018, while analysts at Capital Economics said China’s “near-term economic outlook still remains downbeat.”

China is the world’s biggest oil importer and the second-largest crude consumer.

Meanwhile, data released this week showed economic contraction in industrial powerhouses Japan and Germany in the third quarter.

At the same time, supply has been surging, especially due to a 22 percent rise in U.S. crude oil production this year to a record 11.6 million barrels per day (bpd).

“Producers…have more barrels than they can sell at the moment,” said Mercatus Energy Advisors’ Corley.

As a result, oil inventories are rising. The American Petroleum Institute said late on Wednesday that crude inventories rose by 8.8 million barrels in the week to Nov. 9 to 440.7 million, compared with analyst expectations for an increase of 3.2 million barrels.

Fearing a renewed glut like in 2014, when prices crashed under the weight of oversupply, the Organization of the Petroleum Exporting Countries (OPEC) is discussing supply cuts.

To do so successfully, OPEC – under the de-facto leadership of Saudi Arabia – will need Russia on its side, which is not an OPEC member.

A joint effort between OPEC and Russia to withhold supply from 2017 was a major contributor to crude price rises last year and in the first half of 2018.

“Russia and OPEC and Saudi Arabia – they are observing the market. If they see that there is dis-balance between supply and demand, (they) will of course take a joint action to reduce supply,” said Kirill Dmitriev, head of Russian Direct Investment Fund, the country’s sovereign wealth investment body.


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Bitcoin falls to lowest level in over a year

WASHINGTON (Bloomberg): Bitcoin, world’s largest cryptocurrency, tumbled as much as 11%, with most of the loss coming within a half hour window. Photo: Bloomberg

Portland: Bitcoin tumbled below $6,000 for the first time since August and reached the lowest level in over a year, breaking the recent stretch of tranquility exhibited by the notoriously volatile digital alternative to cash.

The world’s largest cryptocurrency tumbled as much as 11%, with most of the loss coming within a half hour window. Other digital coins slumped, with smaller rivals Ether, Litecoin and XRP dropping more than 17%. Bitcoin Cash tumbled as much as 21% as the Bitcoin offshoot faces its own split.

“The market is trying to find the bottom,” said Michael Terpin, a San Juan, Puerto Rico-based partner at Alphabit Fund. “People who are chartists look at historical patterns, and they note there’s one last final capitulation drop to get the last people fleeing out of the market.”

Some traders speculated that investors may be leaving Bitcoin to raise funds to buy Bitcoin Cash after it splits in anticipation that each of the new coins will appreciate.

Bitcoin dropped as low as $5,549, the least since October 2017, or just before the surge in demand that pushed its price to almost $20,000 in December. It’s down about 70% from that record high in the 10-year-old token.

When it split off a year ago, Bitcoin Cash jump-started the forking craze in which dozens of software-development teams sought to create money out of thin air by tweaking the original computer code and releasing coins with “Bitcoin” in their names.

A group headed by Craig Wright is expected to take control tomorrow of the world’s fourth-largest cryptocurrency following a software upgrade. A rival faction that disagrees on how to best expand has been trying to persuade the community of computer operators running the network to adopt their version. About 70% of the so-called miners that process the transactions that keep the network afloat are signaling they support the version backed by Wright’s allies, according to crypto data tracker Coin Dance.

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Emirates Airline half-year profit plunges 86% due to hike oil prices

DUBAI (AFP): Emirates Airline on Thursday posted an 86 percent drop in half-year profits as the Middle East’s leading carrier was hit by a hike in oil prices and currency devaluations.

The Dubai-based airline in a statement its net profit in the six months to September 30 was also impacted by other challenges and expected tough months ahead.

Emirates said it recorded a profit of just $62 million in the first half of the 2018-2019 fiscal year compared with $452 million in the same period last year.

“The high fuel cost as well as currency devaluations in markets like India, Brazil, Angola and Iran, wiped approximately 4.6 billion dirhams ($1.25 billion) from our profits,” said Sheikh Ahmed bin Saeed Al-Maktoum, chairman and chief executive of Emirates Group.

Emirates, one of the world’s biggest airlines, said fuel costs rose by 42 percent compared with the same period last year.

The company, which flies to more than 150 destinations, said the cost of fuel amounted to a third of its expenses.

Emirates is the world’s largest operator of Airbus A380s with more than 100 of the superjumbos in its fleet.

“The next six months will be tough, but the Emirates Group’s foundations remain strong,” Sheikh Ahmed said in a statement.

In the six months to September 30, the airline carried 30.1 million passengers, a rise of three percent on the last fiscal year, the company said.

Emirates’ revenues were 10 percent higher than the previous year at $13.3 billion.

“We are proactively managing the myriad challenges faced by the airline and travel industry, including the relentless downward pressure on yields and uncertain economic and political realities in our region and in other parts of the world,” said Sheikh Ahmed.

Profit for the Emirates Group, which also includes Dnata, a leading air services provider, was also down by 53 percent to $296 million.



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Aldar Properties’ profits fall 30% in Q3

DUBAI (Arabian Business): Aldar Properties CEO Talal Al Dhiyebi said that government initiatives such as the AED 50 billion Ghadan 21 programme, changes to residency visa regulations and Adnoc’s AED 484 billion capital investment plans “will accelerate national development and support sustainable long-term growth.”

Aldar Properties net profits dropped 30 percent to AED 420 million ($ 114.35 million) in the third quarter of 2018, which the company attributes to higher costs and a number of one-off items, Aldar announced on Thursday.

In a statement, Aldar noted that revenues rose 8 percent to AED 1.5 billion ($408.39 million) over the quarter, while gross profits were steady at AED 581 million ($158.18 million). Profits in Q3 2017 were AED 601 million ($163.63 million).

“Our business is structured to deliver long-term growth,” said Aldar Properties CEO Talal Al Dhiyebi. “Today, more than two thirds of our gross profit comes from the stable, mature assets held in Aldar Investments delivering consistent returns throughout the cycle.”

The financial results said the decline in profit was attributed to increase interest costs because of the reduction of cash deposits and an increase in debt used for the acquisition of Tourism Development and Investment Company (TDIC) assets.

Al Dhiyebi added that the results are “complemented by a development business that is expected to deliver over 7,000 units between 2018 and 2021, providing a steady pipeline of contracted cash flows that will start contributing to Aldar’s 2018 dividend, in line with our stated dividend policy”.

Looking to the future, Al Dhiyebi said that government initiatives such as the AED 50 billion Ghadan 21 programme, changes to residency visa regulations and Adnoc’s AED 484 billion capital investment plans “will accelerate national development and support sustainable long-term growth.”



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Ford CEO open to investors in autonomous vehicles but cautious on VW

MIAMI (Reuters): Ford Motor Co (F.N) Chief Executive Jim Hackett told Reuters the automaker is open to investment by automakers and others in its autonomous vehicle business, but cautioned that expanding partnerships with German automaker Volkswagen AG (VOWG_p.DE) (VOWG.DE) is a “delicate dance.”

Volkswagen’s supervisory board is scheduled to meet on Thursday to review a 10-year strategic plan assembled by Chief Executive Herbert Diess that is expected to propose using alliances with rivals to cut development costs for electric and autonomous vehicles and potentially other types of vehicles.

Ford and VW have acknowledged they are in discussions. Hackett said a previously announced partnership to share development of future light commercial vehicles is “going better than we thought it would.”

“Herbert and I had a great discussion,” about the commercial vehicle business, Hackett said. However, Hackett said expanding collaboration to other areas, such as electric vehicles or consolidation in Latin America, would have to be done carefully, and no broader deal has been agreed.

“We compete in a bunch of areas as well,” he said.

Ford’s share price has sunk 22 percent this year, reflecting investor frustration with the company’s pace of rolling out plans for restructuring money-losing operations in Europe, Latin America and China, and a strategy for funding investments in autonomous and electrified vehicles.

Ford earlier this year created a separate unit for its autonomous vehicle operations, which includes Ford’s majority stake in self-driving car software company Argo AI. Potential investors could put money into either Ford’s autonomous vehicle unit, or Argo, Ford executives said.

Ford and Argo are currently testing vehicles in four cities — Miami, Pittsburgh, Detroit and Washington, D.C. Argo Chief Executive Bryan Salesky said the companies plan to expand the number of test cities in 2019. Ford has said it expects to launch self-driving vehicles for sale by 2021, when a new vehicle architecture designed specifically for autonomous systems is expected to be ready.

In the meantime, Ford is testing different ways in which self-driving vehicles can be used to carry people and goods. In Miami, for example, the company is collaborating with local businesses to test designs for vehicles that can deliver food, laundry or flowers. On Wednesday, Ford said it will work with Walmart Inc (WMT.N) to design automated delivery services.

Signs that the US auto market is heading for a cyclical downturn, coupled with steel cost increases driven by US tariffs, have ratcheted up pressure on all three Detroit automakers.

General Motors Co (GM.N) Chief Executive Mary Barra last month turned up pressure by launching a sweeping cost-cutting program, including offering buyouts to 18,000 North American salaried staff, and warning of outright layoffs if not enough employees leave.

Since May, GM and its Cruise self-driving car unit have landed $5 billion in investment commitments from Japan’s SoftBank Group Corp (9984.T) and Honda Motor Co Ltd (7267.T) to develop a robot taxi service.

Hackett acknowledged investor concerns, but said he wants to be sure that Ford has worked out how to redesign its business before cutting anything.

“Hacking off limbs of the organization gets you nowhere,” he said.