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Wirecard’s missing$2.1bn didn’t enterPhilippines: Central

bank governor

M&A a goodgrowth strategyduring challengingtimes: Expert

MonDAY 22 JunE 2020

Business

GCC cross-border multi-currency payment system under way: BIS

SATISH KANADY THE PENINSULA

A dedicated GCC cross-border and/or multi-currency (CBMC) system is expected to go live by later this year. The forthcoming Gulf Cooperative Council RTGS system (GGC-RTGS) will settle payments in the currencies of the Gulf region countries, the Bank for International Settle-ments (BIS) noted in its quar-terly review.

Cross-border payments are generally slower, more expensive and more opaque than domestic ones. They tend to flow through the so-called correspondent banking network, where chains of banks work to get funds from the payer to the payee. Replacing the payment chains (or parts thereof) with dedicated cross-border and/or multi-currency payment systems is one of the ways to potentially improve cross-border payments. Cross-border and multi-currency payment systems have the potential to make cross-border payments faster, cheaper and more transparent.

According to BIS, currently, there are about half a dozen multi-currency cross-border systems in operation and two projects under way. They fall into three groups, based on the services offered: cross-cur-rency, choice of currency and PvP (payment versus payment) arrangements. Cross-currency service allows the payer to be debited in one currency and the payee to be credited in another. The projects under way are the Gulf Cooperative Council RTGS system (GGC-RTGS) and Directo a México ..

The forthcoming GCC-RTG-Swill settle payments in the cur-rencies of the Gulf region coun-tries. The central banks will convert the currencies based on FX rates set at the start of the business day. The fact that the GCC countries peg their cur-rency to the US dollar alleviates FX risk. Based in one of the GCC countries, the Gulf Payments Company will operate the

system, BIS noted..A number of new cross-

border systems are expected to be launched in the early 2020s. Beyond numbers, cross-border systems are also extending in scope. Until now, most of the implementations or augmenta-tions have focused on wholesale payments and thus involve RTGS systems. Future projects are increasingly focused on retail payments. For instance, the SADC-TCIB system, expected to go live in 2020, is geared towards remittance payments across a number of African countries. , a proposed payment infrastructure for Nordic area countries, will first link auto-mated clearing houses and then

retail fast payment systems. Sweden is planning to leverage the pan-European retail fast payment system (TIPS) to settle its domestic retail payments. Finally, new peer-to-peer tech-nologies also hold promise with a view to easing cross-border frictions.

Globally, the US dollar remains the most common invoice currency, and for many markets, such as oil and other commodities, prices are quoted in USD.

Safe and efficient CBMC systems can serve as public goods. These systems can increase competition in the cross-border payments market. This can help contain the

potential monopolistic powers of (existing or future) closed-loop or peer-to-peer arrange-ments. CBMC systems can also provide an alternative to the current correspondent banking setup for cross-border pay-ments. This can be especially relevant if the decline in corre-spondent banking relationships continues.

However, BIS noted, there are a number of challenges in setting up CBMC systems, which calls for planning and coordi-nation. The public and private sectors both need to step up their game if payments are to flow across borders safely, effi-ciently and quickly - giving us payments without borders.

Vodafone connectsAsian town withGigaNet fibreTHE PENINSULA — DOHA

Vodafone Qatar has connected Asian Town with its state-of-the art GigaNet fibre network and thousands of the country’s labour work-force now have access to reliable fixed services including high-speed internet, which will also power many of the commercial entities based there. The GigaNet fibre rollout covers the entire Asian Town, including Plaza Mall and the Mowasalat-Karwa locations.

Located close to Doha’s Industrial Area, Asian Town is mainly residential, comprising the adjacent Asian City, but the sports, entertainment and shopping venue also houses several small businesses. Asian Town was designed and developed to strategically meet the vision of the Qatar National Vision 2030, assuring its

residents of convenient access to amenities and other essential services.

Vodafone Qatar’s Chief Operating Officer, Diego Cam-beros, said: “Vodafone Qatar has long been motivated by a responsibility to bring all members of society into a con-nected digital community through our technology. Con-necting Asian Town is a part of fulfilling that commitment under the “Inclusion for All” pillar of our Company purpose.” Over 15,000 residential units in Asian Town will be eligible for Vodafone’s latest GigaHome offers to enjoy the latest home Wi-Fi technology. Businesses will also benefit from the wide range of services available with GigaNet Fibre, including access to Vodafone GigaBusiness plans, offering unlimited data with speeds up to 1Gbps, high-speed Corporate Internet, Security and Fixed Voice solutions.

MEEZA announces launch of its 4th Data Centre in DohaTHE PENINSULA — DOHA

MEEZA, Qatar’s pioneering Data Centre business, revealed the launch of its 4th state-of-the-art Data Centre in Doha, as the latest addition to its nationwide plans, to support Qatar’s digital transformation and smart future.

The new data centre, M-VAULT 4, is part of MEEZA’s accelerated efforts to implement Qatar’s digital transformation agenda toward a knowledge-based economy, in line with the Qatar National Vision 2030. The new Data Centre will provide hosting services that follow global best practices, in the provision of premium data centre services, which will enable all sectors to become more efficient and boost Technological infrastructure.

M-VAULT 4 will be located within the premises of Qatar Science and Technology Park

(QSTP), part of Qatar Foun-dation Research Development and Innovation, where con-struction has already begun. The project aims to be com-pleted and ready for use by mid-2021 coinciding with the expected arrival of global

hyperscalers - leaders in Cloud technology and network systems, operating large-scale data centres worldwide.

Previously, MEEZA has suc-cessfully launched three Tier III certified Data Centres, known as M-VAULTs offering a guaranteed uptime of 99.98 percent built to comply with the most exacting international standards. The M-VAULTS enable businesses to benefit from greater efficiencies and reduce risks.

MEEZA, a Qatar Foundation venture, offers scalable, highly available and resilient cloud services that can be used to improve customer engagement, facilitate the transformation of products and services, and empower businesses. The solu-tions provider ultimately gives businesses the opportunity to optimize their operations by connecting with the latest tech-nology in the industry, and form

the new Cloud region in Qatar.Acting Chief Executive

Officer of MEEZA, Ahmad Abdulla Al-Muslemani com-mented: “We are excited to announce the establishment of our 4th Data Centre in Qatar, and it could not have come at a better time. The new Data Centre will

be ready for use by the time we welcome some of the leading world experts in the industry and opens new doors for exchange of information, ideas, and tech-nological advancement. We are honoured to pave the way to Qatar’s digital transformation by establishing the best technol-ogies and providing a service of excellence to our clients”.

MEEZA’s work furthers Qatar’s role as a regional hub and key contributor to the tech-nological development of the region, supporting the inno-vation mechanism for smart solutions in the areas of healthcare, scientific research, artificial intelligence, education, and sports event management solutions, among others.

Mohsin Al-Marri, Chief Operations Officer said: “Our vision is to make service excel-lence the expectation, not the exception. The 4th addition of

the data centre for MEEZA helps us build the technological infrastructure that we need to bring Qatar to the global arena of Cloud Services. Our future is moving towards the digital and we, at MEEZA, are working to ensure that we maintain the best practices in the industry, and offer premium hosting services and solutions”.

MEEZA is committed to aiding the knowledge-based society for Qatar. The Company has supported the technological infrastructure of many leading projects in Qatar, exhibiting expertise in the areas of Smart Cities, the Internet of Things (IoT), in addition to cloud tech-nology. It also prides itself on having the first commercial Security Operations Centre (SOC) in Qatar alongside a cen-tralized Command and Control Centre (C3) which monitors MEEZA services for clients.

Ahmad Abdulla Al-Muslemani, Acting Chief Executive Officer of MEEZA

Mohsin Al-Marri, Chief Operations Officer of MEEZA

UK to seek new powers to scrutinise foreign takeoversREUTERS — LONDON

Britain will seek changes to the law to allow scrutiny of some foreign takeovers to ensure they do not threaten the country’s ability to tackle public health emergencies such as the corona-virus outbreak, the government said on Sunday.

Proposals for changes to the Enterprise Act will be put before parliament on Monday to allow the government to intervene if businesses such as vaccine research companies become takeover targets.

“These powers will send an important signal to those seeking to take advantage of those struggling as a result of the pandemic that the UK government is prepared to act where necessary to protect our national security,” Business Secretary Alok Sharma said in a statement.

The government said the economic disruption caused by the pandemic meant that some critical businesses were more at risk of hostile takeovers or being sold to “malicious parties”.

Under the proposed new powers, the government would be able intervene in three sectors considered to be central to national security: artificial intelligence, cryptographic authentication tech-nology and advanced materials.

Payment flows in selected cross-currency systems

02 MondAY 22 JUNE 2020BUSInESS

Economic downturn due to COVID-19 makes SMEs very vulnerable with generally small reserves and limited working capital.

M&A a good growth strategyduring challenging times: ExpertTHE PENINSULA - doha

The prolonged lockdown has created an unprecedented sit-uation for many Small and Medium Enterprises (SME) as a lot of them may not have ade-quate working capital or cash flow to restart their operations after months of shutdown. This can be a win-win situation for investors who are looking for inorganic growth and diversi-fying their investment portfolio, noted an industry expert, yesterday.

Sundaresan Rajeswar (pic-tured), who specialises in asset valuation services has said that right strategy should be there to pursue small deals that accrue to a meaningful amount of market capitalisation over multiple years instead of relying on big-bang transactions due to today’s fast-moving, increas-ingly uncertain business environment.

“An economic downturn due to COVID-19 makes SMEs very vulnerable with generally small reserves and limited working capital. Many SMEs rely upon a steady flow of con-tinuous demand for their products and services else it will struggle to survive a prolonged period of reduced economic

activity,” said Rajeswar, who is working for a subsidiary of Teyseer Group.

He added: “One way to strengthen entrepreneurial resilience in fragile settings will be to support through an extended period of an economic downturn by increasing the liquidity. Companies looking for business expansion opportu-nities can get into win-win sit-uations through mergers and acquisitions (M&A) of smaller business entities. M&A success track record indicates industry-specific scalability, getting skills and technologies faster or at a lower cost, consolidate to improve competitive behaviour and transformational merger as prime drivers.”

He also said that a diligent

M&A decision is always con-sidered a significant milestone in a successful business story. The need post-COVID-19 crisis will be to build resiliency, and a pragmatic M&A can help com-panies resort to proactive deal sourcing and opportunistic deal evaluation.

“The strategy should be to pursue small deals that accrue to a meaningful amount of market capitalisation over mul-tiple years instead of relying on big-bang transactions due to today’s fast-moving, increas-ingly uncertain business envi-ronment. Treat M&A as an enduring capability rather than a project or a rare event. M&A strategy and corporate strategy should be connected, and hence

starting point should be a thorough self-assessment with a market assessment of the company.

M&A initiatives should start with an evaluation process by identifying growth opportu-nities in business lines, markets served, or a combination thereof. Ascertain whether the strategic value-added business case for a combined entity is compelling enough to proceed. Thus methodically identify “likely suspects” as well as “outside the box” possibilities based on management expe-rience, in-house research, use of consultants, and other methods.

The valuation of an entity being acquired involves assessing the target company, and there are three key valu-ation methods; discounted cash flow analysis, comparable transaction analysis, and com-parable publicly-traded company analysis. The next is due diligence that involves a critical review of financial, legal, and operational position to ensure the accuracy of the information and full disclosure. Post completion of due dili-gence, the parties to negotiate definitive agreements and execute it.

Wirecard’s missing $2.1bndidn’t enter Philippines,says central bank governorREUTERS - MaNILa

None of the $2.1bn missing from scandal-hit German pay-ments firm Wirecard AG appears to have entered the Philippine financial system, the central bank said yesterday.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno (pic-tured) said in a statement the Southeast Asian country’s biggest lenders, BDO Unibank and Bank of the Philippine Islands, suffered no losses, despite having been named in connection with the missing funds.

The chief executive of Wirecard, Markus Braun, who built the company into one of the hottest financial technology investments in Europe and a rare tech champion for Germany, quit on Friday as the company faces a cash crunch after saying it may have been the victim of fraud. The search for the missing cash hit a dead end in the Philippines, but the two Philippine banks have said documents purporting to show Wirecard had deposited funds with them were false.

“The initial report is that no money entered the Philip-pines and that there is no loss to both banks,” Diokno said, though he added that the central bank was investigating.

“The international financial scandal used the names of two of the country’s biggest banks - BDO and BPI - in an attempt to cover the perpetrators’ track,” he said.

BDO and BPI have stated that Wirecard was not their client and that they had no business relationship with the German firm, Diokno said.

BPI, however, told Reuters on Saturday that it had sus-pended an assistant manager whose signature appeared on one of the fraudulent documents.

BDO told the central bank that it appeared one of its mar-keting officers had fabricated a bank certificate. Diokno reit-erated the Philippine banking system was in a strong position going into the coronavirus pan-demic and well-capitalised.

Therapeutic serum neutralizes COVID-19Argentine Chemical Technician Joaquin Gonzalez (centre) and Biotechnology Technician Romina Ramondino (right) work next to the Director of Inmunova Laboratory Biologist Linus Spatz (second left) and Biologist Romina Pardo at Inmunova Laboratory, in San Martيn, Buenos Aires, amid the new coronavirus pandemic. Argentine researchers have developed a therapeutic serum that showed at in vitro tests the ability to neutralize the SARS-Cov-2 virus that causes COVID-19.

Huawei launches Sound X and MatePad ProTHE PENINSULA- doha Huawei recently released its all-new HUAWEI Sound X, the brand’s interactive speaker co-engineered with French audio brand Devialet. Packing a powerful punch that com-bines Devialet’s acoustic design with Huawei’s advanced tech, the collabo-ration is set to transform users’ audio experience.

Carving out a strong rep-utation due to its premium, High-Fidelity products, Devialet is famous for its flamboyant design, powerful and immersive bass, and impressive audio quality. With a host of clever features including Devialet Dual Sub-woofers and Push-Push Acoustic Design, the HUAWEI Sound X offers an audio expe-rience that can be felt as well

as heard. Despite its compact build, the small but mighty speaker can deliver thun-derous bass, thanks to its dual 3.5-inch Devialet subwoofers with 60W bass power. They can hit amplitudes of up to 20 mm, so the vibrations can be seen, heard and felt. The device’s symmetrical structure also means that each speaker cancels out the back-wave vibrations of its

counterpart so the body remains stable, even when the tunes are really blasting out. As it has been imbued with Devialet’s SAM (Speaker Active Matching) technology, the speaker can faithfully reproduce bass in real-time, along with high-fidelity audio. The speaker is also made with Magnetic rare-earth mate-rials, which contributes towards rich and powerful

sounds. Designed with produc-

tivity and entertainment capabilities in mind, HUA-WEI’s flagship tablet is set to elevate consumer experiences and bring their ideas to life.

The Huawei MatePad Pro is available for purchase on all HUAWEI official stores and authorized distributors. The HUAWEI MatePad Pro comes in an elegant Midnight Grey.

US Treasury too secretive on small business loans, say watchdogs AP - NEW YoRK

The Trump administration has relented to public pressure and pledged to provide more details about which small busi-nesses received loans from a $600bn-plus coronavirus aid programme. But government watchdogs say even more transparency is needed to get an accurate picture of who was helped, and who was left out.

Under pressure from Dem-ocratic lawmakers and gov-ernment watchdogs, the Treasury Department and the Small Business Administration said Friday they would dis-close the names of small business owners who received $150,000 or more in for-givable loans. The agencies will reveal the general amount these businesses received, their address, demographic data and the number of jobs they helped protect.

But for loans of less than $150,000, the agencies will not name the recipients, revealing only summary information broken down by zip code, industry and demographics.

Experts say this could paint an incomplete or misleading picture. Recipients of smaller loans could be part of a bigger subsidiary that would be hidden, and it won’t be clear what percentage of loans went t o m i n o r i t y - o w n e d businesses.

A factory located in a minority neighborhood, for example, could be owned by an individual or conglomerate based elsewhere.

The administration’s new approach on disclosure ”is a big deal compared to where we were, but it’s not enough to have confidence that this money is going to the right people, who actually urgently need it,” said Danielle Brian (pictured), executive director of the nonpartisan Project On

Government Oversight.Treasury Department

spokespeople didn’t respond to a request for comment on Saturday, although Secretary Steven Mnuchin has previously said he is concerned about business owners’ privacy.

Senator Marco Rubio, the Florida Republican who heads the Senate Small Business Committee, said on Friday that Treasury’s plan to disclose more information strikes the right balance.

As of Friday, the SBA said it had processed 4.6 million loans worth about $512bn. Nearly 75 percent of the money approved so far has gone to businesses borrowing more than $150,000. But 86 percent of the loans have gone to businesses borrowing less than $150,000, according to the SBA.

The Paycheck Protection Program started in early April and runs out at the end of the month. The loans can be for-given if businesses use the money to keep employees on payroll or rehire workers who have been laid off.

Several hundred publicly traded companies received these loans despite their likely ability to borrow money else-where and, after an outcry, some said they would return the money.

The pandemic has caused

a deep recession and the US unemployment rate is above 13 percent after falling slightly in May.

Economists have said the small business loan pro-gramme has helped, although it’s hard to know by how much.

The SBA has so far only provided general information about the beneficiaries of its loans, such as the industry they are in and the state in which they are located.

John Arensmeyer, founder and CEO of the Small Business Majority, said in a statement that minority- and women-owned businesses appear to be getting disproportionately less funding than others, based on surveys of the 65,000 busi-nesses in his network.

“To understand how rampant this problem is, the administration ought to release the loan amount requested and loan amount received for all recipients,” Arensmeyer said.

Watchdogs also are seeking information from the banks that processed the gov-ernment-loan applications.

A US House subcommittee investigating coronavirus relief programmes last week asked bank executives for complete lists of applicants and whether they were approved.

Robert Weissman, pres-ident of Public Citizen, a con-sumer advocacy organization, says that having a robust picture of how the money was allocated will also help offer lessons for the future. The coronavirus pandemic isn’t going away any time soon, and the economy could need another assistance pro-gramme, he says.

“It’s taxpayer money,” he said. “It is completely rea-sonable for the public to know who received it.”

Morocco to resume domestic travel and servicesREUTERS - RaBaT

Morocco will further loosen lockdown measures for the services sector and domestic transport starting June 24, the government said yesterday.

Cafes, restaurants, sports clubs, and other services and entertainment businesses will be able to resume activity at half capacity except in the provinces of Tangier, Larache, Marrakech and Kenitra, where infections remain higher, it said.

Domestic travel will resume including flights and railways, it said. International passenger traffic remains suspended.

Mosques have been closed since the lockdown started on March 20 and the state of emergency has been extended to July 10. Schools will only

reopen in September.Most coronavirus cases

registered recently were in industrial or among extended families, with 457 cases on Friday, the largest single-day rise in cases, in a cluster linked to fruit packaging plants north of Rabat, where a field hospital was set up.

Morocco has grouped COVID-19 patients in two hospitals near Casablanca and near Marrakech to free capacity at other hospitals.

By yesterday morning, Morocco had recorded 9,957 cases, including 213 deaths and 8,249 recoveries.

The country has airlifted Moroccan-made medical sup-plies to 15 African countries, including 8 million masks, protective gear, sanitiser and medicine.

Apple to start assembling iPhone SE in India: ReportIANS - SaN FRaNcISco

Apple is reportedly planning to assemble its new iPhone SE in India. The iPhone maker has already asked one of its suppliers in China to start shipping compo-nents for the iPhone SE 2020 to its manufacturing partner Wistron in India, reports AppleInsider.

Assembling the iPhone SE 2020 under the ‘Make in India’ ini-tiative will help the company in avoiding the 20 per cent tax on its imported phones and reducing the price of the device in India.

This news comes at a time when the Indian government has also started an initiative to increase manufacturing in the country.

Apple is reportedly seeking to shift roughly a fifth of existing China-based output to India, which could equate to $40bn in local manufacturing revenues over the next five years.