BUSINESSARAB TIMES, TUESDAY, JANUARY 17, 2017

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Report calls for action to curtail reward for those at the top

World’s eight richest as wealthy as half humanity: OxfamDAVOS, Switzerland, Jan 16, (Agencies): Just eight individuals, all men, own as much wealth as the poor-est half of the world’s population, Oxfam said on Monday in a report calling for action to curtail rewards for those at the top.

As decision makers and many of the super-rich gather for this week’s World Economic Forum (WEF) annu-al meeting in Davos, the charity’s report suggests the wealth gap is wider than ever, with new data for China and India indicating that the poorest half of the world owns less than previously estimated.

Oxfam, which described the gap as “obscene”, said if the new data had been available before, it would have shown that in 2016 nine people owned the same as the 3.6 billion who make up the poorest half of humanity, rather than 62 estimated at the time.

In 2010, by comparison, it took the combined assets of the 43 richest peo-ple to equal the wealth of the poorest 50 percent, according to the latest cal-culations.

Inequality has moved up the agenda in recent years, with the head of the International Monetary Fund and the Pope among those warning of its cor-rosive effects, while resentment of elites has helped fuel an upsurge in populist politics.

Concern about the issue was high-lighted again in the WEF’s own global

risks report last week.Bill Gates, the world’s richest man

who is a regular at Davos, has seen his fortune rise by 50 percent or $25 bil-lion since announcing plans to leave Microsoft in 2006, despite his efforts to give much of it away.

While Gates exemplifies how out-sized wealth can be recycled to help

the poor, Oxfam believes such “big philanthropy” does not address the fundamental problem.

“If billionaires choose to give their money away then that is a good thing. But inequality matters and you cannot have a system where billionaires are systematically paying lower rates of tax than their secretary or cleaner,”

Lawson said.Oxfam bases its calculations on data

from Swiss bank Credit Suisse and Forbes. The eight individuals named in the report are Gates, Inditex founder Amancio Ortega, veteran investor Warren Buffett, Mexico’s Carlos Slim, Amazon boss Jeff Bezos, Facebook’s Mark Zuckerberg, Oracle’s Larry Ellison and former New York City mayor Michael Bloomberg.

■ Bill Gates: $75 billionThe man whose name is a byword

for billionaire. He co-founded Microsoft in the mid-70s, growing it into the world’s biggest software com-pany and helping to make computers a household item. He quit as CEO in 2000 and pledged to devote his fortune to his philanthropic activities in the Bill and Melinda Gates Foundation. He has gradually reduced his owner-ship in Microsoft to less than 3 per-cent, with the bulk of his wealth in a private firm.

■ Amancio Ortega: $67 billionThe richest person in Europe,

Ortega opened the first Zara fashion shop in 1975. Now, the chain, part of Ortega’s Inditex group, has 7,000 shops globally. Its boom in popularity is largely due to a low cost model that competes with the likes of H&M. As Zara and Inditex grew in size, Ortega held on to a majority stake of 59 per-cent in the company, which has a market value of over 97 billion euros

($102 billion).■ Warren Buffett: $60.8 billionThe Oracle of Omaha, as he’s

known for the way his every invest-ment decision is followed by thou-sands. He began investing as a teen-ager in the ‘40s and gradually grew his firm, Berkshire Hathaway. Buffett, 86, is notoriously frugal personally and favors investing in companies with proven business models over new industries, such as in technology.

■ Carlos Slim Helu: $50 billionThe Mexican tycoon owes his for-

tune to a major ownership in America Movil, a telecommunications multina-tional worth $42 billion. He personally owns about 7 percent in the company while his broader family retains a 37 percent stake. He was ranked as the richest person three years ago, but saw his net worth hit by a downturn in Latin American economies.

■ Jeff Bezos: $45.2 billionThe founder and CEO of Amazon.

com helped revolutionize the retail industry by popularizing online shop-ping. What was initially an online book shop now sells pretty much any-thing. Bezos has reached beyond Amazon, in which he holds a 17 per-cent stake, to try his hand in other industries. He’s bought the Washington Post and set up an aerospace company, Blue Origin, that aims to make space accessible to tourists and paying cus-tomers.

■ Mark Zuckerberg: $44.6 billionFounded Facebook in 2004 while a

college student to connect Harvard students. The company went on to become popular globally and listed its shares publicly in 2012, making Zuckerberg, now 32, a multibillion-aire. He’s managed to make Facebook profitable where rivals like Twitter have lagged, and expanded it with tar-geted acquisitions.

■ Larry Ellison: $43.6 billionAs a young programmer in the ‘70s,

his first big client was the CIA. The name of the project was “Oracle.” In 1977, Ellison and associates used the name of that product for their compa-ny, which creates software that helps manage databases and has since become an industry standard. Ellison has recently focused more on cloud computing, in which data is stored and managed across a network of comput-ers. His fortune comes from the 27 percent stake he still owns in Oracle, currently worth $160 billion.

■ Michael Bloomberg: $40 billionCreated the eponymous financial

information provider in 1981 after get-ting laid off from an investment bank. Bloomberg made it a lucrative busi-ness in particular by selling data termi-nals to financial services firms. The multi-screen terminals became essen-tial tools in the industry, incorporating real-time market information with a news service.

Investors await Brexit clarity

UK M&A to drop sharply in 2017LONDON, Jan 16, (RTRS): Mergers and acquisitions activity in the United Kingdom will drop sharply in 2017 due to uncertainty over the terms of its exit from the European Union, law firm Baker McKenzie said in a report published on Monday.

Britain avoided a collapse in merg-ers and acquisitions activity in 2016 as foreign companies used sterling’s spectacular devaluation against the US dollar to snap up British companies, Thomson Reuters data shows.

Baker McKenzie said that while M&A activity would have only a modest impact on European transac-tions if there was an amicable divorce, the lack of clarity over Brexit could hurt activity in the United Kingdom.

“Given Brexit’s impact on business confidence, we expect M&A values to fall by two-thirds in 2017 after numer-

ous large deals in the first half of last year boosted 2016,” Tim Gee, London M&A partner at Baker McKenzie said.

“Similarly, the potential for market volatility during the UK’s exit from the EU is likely to impact the number of cross-border IPOs coming to mar-ket in London during 2017,” Gee said.

Baker McKenzie and Oxford Economics said they forecast UK M&A values to fall to $125 billion in 2017 from the record $340 billion in 2016.

Prime Minister Theresa May has said she will trigger formal Brexit divorce talks with the EU by the end of March. She then has two years to negotiate an exit.

Baker McKenzie said it forecast global deal-making to drop slightly in 2017 but to rise in 2018.

Objective review of plan key

Retirement ‘advice’ fromretired financial experts

By Liz Weston

Most retirement advice has a flaw: It’s being given by

people who haven’t yet retired.So I asked money experts who

have quit the 9-to-5 for their best advice on how to prepare for retirement.

They still faced curveballs when it was their turn. Making the right financial moves is important, they said, but so is getting ready men-tally, emotionally and socially.

You can’t plan for everythingA central retirement decision is

when to do it. Working longer can reduce the odds of running out of money, but delaying retirement too long could mean missing out on the good health or companion-ship to fully enjoy it.

That trade-off came home to financial planner Ahouva Steinhaus of San Diego when her life partner, Albert, died suddenly last year, just before she was scheduled to hand over her busi-ness.

Steinhaus, 69, says she’s grate-ful she’s not working now, while grieving the loss, but still wonders what might have been if she’d started the process of selling her practice earlier.

“You can’t know those things,” Steinhaus says. “It’s a balance between wanting to make sure that you have enough socked away that you feel confident that you’re going to be OK, and not wanting to spend the rest of your life work-ing.”

What helps, Steinhaus says, is having many supportive friends and projects. She’s remodeling her kitchen after wanting to do so for 18 years, and she’s active in vari-ous causes, including San Diego EarthWorks . She also knows from having watched her clients and friends that adjusting to retired life can take a while.

“It does seem like a lot of peo-ple do cast around a bit after they retire to figure out what their life is going to look like,” Steinhaus says.

Get your retirement house in order

Theoretically, you can get a bet-ter return investing your money than paying off a mortgage. In reality, your biggest asset in retire-ment could be a paid-off, appropri-ately remodeled home that allows you to age in place, says financial literacy expert Lewis Mandell, emeritus professor of finance at the State University of New York, Buffalo.

Not having a mortgage allows you to withdraw less from your retirement accounts, which could make them last longer, and your equity could be a source of income later through a reverse mortgage, says Mandell, 73, who wrote his latest book, “What to Do When I Get Stupid,” after moving to Bainbridge Island in Washington.

If you plan to relocate, spending time in your new community before you retire can help you acclimate. Financial planner Bill Bengen and his wife, Joyce, at first divided their time between their home in San Diego and their vaca-tion house in La Quinta, California. They wound up moving five years before they retired.

“We feel plugged into the com-munity now,” says Bengen, 69. When moving to a new area, he says, “it’s strange: You don’t know anybody, you don’t know the ropes. Now we’re part of the ropes.”

Find an objective adviserBengen has not one but two

advisers: an investment manager and a financial planner. He appre-ciates their objectivity — and the fact that he doesn’t have to fret over the details. (AP)

IMF boosts US growth forecastsTrump spending, tax plans cited

WASHINGTON, Jan 16, (RTRS): The International Monetary Fund on Monday said the US economy would grow faster than previously expected in 2017 and 2018 based on the incoming Trump administration’s tax and spending plans, but it kept its global growth forecasts unchanged due to weakness in some emerging markets.

Updating its World Economic Outlook, the IMF forecast overall global growth at 3.4 percent for 2017 and 3.6 percent for 2018, unchanged from

October. That compared to 3.1 percent in 2016, the weakest year since the 2007-2009 financial crisis.

It estimated a modest fiscal stimulus under President-elect Donald Trump would push US gross domestic product growth to 2.3 percent in 2017, a gain of 0.1 percentage point on the last forecast, and to 2.5 percent in 2018, up 0.4 per-centage point.

The IMF noted, however, that Trump’s plans for expansionary fiscal measures including tax cuts and infrastructure spending also could stoke inflation in an economy already nearing full employment.

“If a fiscally-driven demand increase collides with more rigid capacity con-

Comments did little to reassure investorsstraints, a steeper path for interest rates will be necessary to contain inflation, the dollar will appreciate sharply, real growth will be lower, budget pressure will increase, and the US current account deficit will widen,” IMF chief economist Maurice Obstfeld said in a statement.

That would increase the likelihood of more protectionist US trade mea-sures and retaliatory responses, Obstfeld told a news conference.

“In that scenario, all countries would lose out,” he added.

But the new IMF outlook does not include any assumptions regarding Trump’s trade plans, such as potential tariffs on Mexican and Chinese goods, as there seems to be less of a political consensus surrounding them, Obstfeld said.

The IMF does assume a stronger dol-lar, firmer oil prices and “more inflation-ary pressure and a less-gradual normal-ization of US monetary policy.”

While stronger oil and commodity prices have improved the picture for oil exporters including Nigeria, higher interest rates and tighter financial con-ditions will negatively affect many emerging market economies, includ-ing Mexico and Brazil.

The IMF cut Mexico’s growth fore-casts by 0.6 percentage point in both 2017 and 2018, citing a consumer spending pullback amid worries about Trump’s trade policies.

The IMF revised its 2017 growth forecast for China to 6.5 percent, up 0.3 percentage point from October, based on expectations for continued stimulative government policies, but left unchanged its 2018 forecast for a slowdown to 6.0 percent growth.

Pound drops after Brexit backing from TrumpLONDON, Jan 16, (AFP): Prime Minister Theresa May won endorse-ment from US President-elect Donald Trump over her Brexit course but ster-ling plunged on Monday on fears that Britain could be on a collision course with its EU allies.

Trump said Britain leaving the EU would “end up as a great thing” and promised to work for a trade deal with post-Brexit Britain “quickly and done properly”, speaking in an interview with The Times newspaper.

Britain’s foreign minister Boris Johnson hailed the comments as he arrived at a meeting of EU foreign ministers in Brussels on Monday.

“I think it is very good news that the United States wants to do a good free trade deal with us and wants to do it very fast,” he said.

The government welcomed “the enthusiasm and the energy that the president-elect and his team are show-ing for strengthening UK/US trade” and was “looking forward to have early discussions”, Prime Minister Theresa May’s spokeswoman said.

However, Downing Street stressed that Britain would “respect its obliga-tions” to the EU, meaning it cannot enter and sign a free trade agreement with another country while still a member.

Trump’s comments did little to reas-sure investors, however, following

An illustrative file picture taken in Liverpool on Aug 17, 2016 shows an arrangement of British £10 and £20 bank notes and £1 and £2 coins. London’s FTSE 100 hit a fresh record high at the opening on Jan 16, as the pound slumped to 32-month lows against the dollar over Brexit. (AFP)

reports in British media over the week-end that May is planning to announce a hard line on Brexit in a major speech on Tuesday.

Sterling plunged to $1.1986, its lowest level since October’s “flash crash” that had sent it to a 31-year low of $1.1841, in morning trading.

It had clawed back some of its loss-es by early afternoon, standing at

$1.2047.“The market is now positioning for

some fairly punchy rhetoric from Theresa May,” said Chris Weston, chief market strategist at IG, an online trading company.

“This idea of ‘hard Brexit’ and a clean break from the single market seems increasingly likely, with the government making a bid to gain full

Gates Buffett

Bezos Ellison

Ortega Slim

Zuckerberg Bloomberg

KleinBank used discriminatory lending practices: Fed Flyadeal to fly leased Airbus A320s

The US Department of Justice has sued a Minnesota bank for allegedly engaging in mortgage lending practices that discrimi-nate against minorities.

In a lawsuit filed Friday, the department said KleinBank engaged in “redlining,” a prac-tice in which banks deny or avoid providing credit services to consumers because of racial demographics or because of the neighborhood where they

live.KleinBank is closed Monday

for the Martin Luther King Jr Day holiday and a representative could not be reached for com-ment.

The bank doesn’t have an attorney listed in this case to comment on its behalf.

On its website, the bank says it has been honored for business ethics and voted by readers of Twin Cities Business as best in

class for mortgage lending.In the lawsuit, the federal gov-

ernment alleges that KleinBank violated the Fair Housing Act and Equal Credit Opportunity Act.

The lawsuit says that from 2010 to at least 2015, KleinBank structured its home mortgage lending business to avoid serv-ing neighborhoods where a majority of residents are racial and ethnic minorities. (AP)

Saudi Arabian Airlines’ budget carrier Flyadeal will lease six Airbus A320s, an Airbus execu-tive said on Monday, a sign that the European planemaker might again have pipped Boeing in the race to win a big Middle East deal.

Flyadeal, which is set to start services in mid-2017, is aiming to operate a fleet of up to 50 nar-row body jets by 2020 and Saleh al-Jasser, director general of

state-owned Saudi Arabian Airlines, said last year Flyadeal would operate leased Airbus or Boeing jets.

Airbus’s Middle East Managing Director Fouad Attar told Reuters Flyadeal would operate six of his planes.

He was speaking on the side-lines of a news conference in Riyadh announcing an 80 air-craft deal with Saudi Arabia’s only operating low-cost airline,

flynas.An Airbus spokesman later

confirmed to Reuters by phone the aircraft type and leasing arrangements for Flyadeal.

The current model A320s are being leased through an undis-closed leasor and delivery starts in the second half of the year, the spokesman said, adding that no further deals had been done with Flyadeal beyond the six air-craft. (RTRS)