How to Decide Which Debts to Pay Off First

Paying off debt is a worthy goal, and it should be near the top of your financial to-do list if you have high-interest loans. But freeing yourself from the burden of debt is rarely easy or straightforward — especially if you owe many different creditors.

There are two important decisions you need to make and they will determine the trajectory of your debt-payoff process. Which debts to pay off early and which debts to repay first? We’ll help you decide, below.

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Which debts should you pay off early?

While becoming debt-free is a good goal, it doesn’t necessarily make sense to focus on aggressively paying off every creditor you owe — especially if doing so leaves you little money for other important financial goals, such as investing and saving for retirement.

Typically, if you have any high-interest debt, you should absolutely pay that off first, as soon as you possibly can. Any debt with interest rates in the double-digit realm should be repaid in a timely fashion, including credit card debt, any bills in collections, payday loans, and certain medical debts.

Sometimes it makes sense to pay off your car loan early because your vehicle is depreciating all the time. Paying interest on an asset that’s constantly losing value isn’t ideal, so if you can realistically pay off your car loan and save for a new car in cash, paying off this debt early is even smarter.

When it comes to other kinds of debt, though, an early payoff isn’t always optimal. In particular, paying off mortgage debt and federal student loan debt early is often not a good use of your money. These debts typically have pretty low interest rates, and they payments on your interest may even be tax deductible.

You can deduct up to $2,500 of student loan interest, as long as you don’t exceed the income limit, and even if you don’t itemize. And, if you do itemize on your tax return, you can deduct interest on a mortgage up to $750,000, or up to $1 million if you bought your home before December 2017.

So, how should you decide whether to pay off your particular debts early or not? In general, if the interest you’re paying on your debt is less than what you could likely earn if you made investments in the stock market, paying off the debt early doesn’t make a lot of sense.

Which debts should you pay off first?

Once you decide which debts to pay off ASAP, you must decide the order in which you will tackle your debts.

To be effective with your extra money, you will choose one debt to focus on paying down at a time. Sure, you could make small extra payments spread across all your debt, but that will take forever. It’s much better to devote all the extra money you can toward making extra payments on one particular debt while continuing to pay the minimum payment to all other creditors you owe.

The biggest question to answer is which debt should you put your extra money toward. You have two choices:

  • The debt snowball: This method is making extra payments to your debt with the lowest balance first, ignoring differences in interest rate. Only after the smallest debt is paid off do you begin making extra payments on your next-largest debt. Simply add the payment you were making on the smallest debt to the next-largest debt, and so on until all debts are paid. So, if you were making a $200 monthly payment on a credit card with a $1,000 balance, and a $50 minimum payment on a card with a $2,500 balance, you would pay off the $1,000 balance first. You then add the $200 to your monthly minimum on the card with the $2,500 balance, and your new monthly payment for that card would be $250.
  • The debt avalanche: This method is paying off your debt with the highest interest rate first. You devote all your extra cash to paying off that debt and when the balance is paid in full, you take the money you were paying toward it and start adding it to the minimum payments you were making on the debt with the next-highest interest rate. You continue this approach until all your high-interest debt is paid.

The debt avalanche is the approach that makes the most mathematical sense. If you use the snowball method and focus on repaying debt with a smaller balance and a lower interest rate, you’ll be stuck paying off your higher-interest debt for a longer period of time. The longer your high-interest debt remains, the more interest will rack up, which increases your overall debt load and extends this debt repayment journey.

The benefit of the debt snowball, however, is that you’ll score quicker wins, a mind trick not to be scoffed at. Studies have shown people are more motivated to continue their debt payoff efforts with this approach.

Ultimately, you need to make the choice about whether you can stay motivated enough to use the debt avalanche method. If you can, this is the best approach. But if you have a hard time sticking to financial goals and you need a little psychological boost to stay on track, using the debt snowball method can actually be smarter for you.

Decide on a debt payoff method today

Whatever method you choose, the important thing is to actually start paying off your debt.

The sooner you work out a budget that allows you to pay extra to any debts each month, the more quickly you can free yourself from burdensome interest charges and have the financial freedom to do better things with your money.

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Better Buy: Intercept Pharmaceuticals vs. Madrigal Pharmaceuticals

Around 20 million Americans have a progressive, life-threatening liver condition called non-alcoholic steatohepatitis (NASH), and there’s isn’t much doctors can do about it besides recommending fewer calories and more exercise.

Any day now, Intercept Pharmaceuticals (NASDAQ: ICPT) will share long-awaited pivotal trial results that could make its Ocaliva drug the first approved NASH treatment. The lead candidate at Madrigal Pharmaceuticals (NASDAQ: MDGL) is behind Ocaliva on the development timeline, but results so far tick all the right boxes. Let’s examine the case for both stocks to decide which one is the better pick right now.

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The case for Intercept Pharmaceuticals

Investigators are going to present long-awaited interim results for Intercept’s only drug, Ocaliva in the first quarter. It’s been five long years since midstage results sent the stock rocketing higher. A surprising 45% of patients given Ocaliva for 72 weeks showed significant NASH improvements, compared with just 21% of the placebo group.

Defining NASH is still a work in progress, but it involves liver cells that retain more lipids than they should, which causes them to balloon and become too inflamed to function properly. Since the condition progresses slowly, the FDA is willing to grant accelerated approval to the first candidate that can reduce NASH symptoms or reduce the scarring caused by long-term inflammation. Ocaliva hit both marks in its midstage study, and a repeat performance could send the stock soaring again.

The FDA approved Ocaliva in 2016 for the treatment of primary biliary cholangitis (PBC), a condition in which the immune system damages the path bile takes from liver to the stomach. Bile acids that back up into liver tissue cause all sorts of problems for an estimated 130,000 Americans with PBC, and this population needed a new treatment option.

Ocaliva is a super-potent analog of a natural bile acid, but PBC patients with seriously impaired livers should start with just 5 mg per week. More than a few patients with severe cirrhosis died after taking the recommended dosage for healthier patients, which is 5 mg every day. A more stringent risk mitigation strategy is doing its job, and sales are climbing again.

During the first nine months of 2018, Ocaliva sales rose 36% over the previous-year period to $125 million. That will help extend the company’s cash runway, but not by much. Intercept’s operating expenses reached $330 million during the same period.

At the end of September, the company had $489 million in cash after losing $221 million during the first nine months of 2018. If Intercept’s long-awaited NASH results disappoint, raising any more cash will become nearly impossible. Beyond Ocaliva, the company doesn’t have anything coming through its pipeline.

The case for Madrigal Pharmaceuticals

This pre-commercial biotech is developing a tablet that acts on the thyroid hormone receptor beta (TRB), which seems like the right target for treating NASH. Biopsies taken during a midstage study with MGL-3196 showed that 56% of patients given the drug experienced a significant reduction of NASH symptoms after 36 weeks, compared with just 32% of the placebo group.

Madrigal’s experimental treatment ticked another box by reducing fibrosis as well. If MGL-3196 can produce improvements to NASH and the fibrosis it causes in a pivotal study as well, the drug should clear the FDA’s hurdles without any trouble.

Although the agency is primarily concerned with inflammation and scarring, MGL-3196 impressed investors by helping NASH patients lower liver fat content, measured with an MRI, by 37%, compared with a 9% reduction in the placebo group. Shortly after Madrigal’s day in the sun, though, Viking Therapeutics (NASDAQ: VKTX) released data for its TRB agonist that showed a liver fat reduction that was much stronger, but we haven’t seen any biopsy results from a Viking candidate yet.

Madrigal doesn’t have a revenue stream yet, but the clinical-stage biotech is running a much smaller operation than Intercept. In fact, Madrigal licensed its only clinical-stage candidate from Roche (NASDAQOTH: RHHBY) and owes the pharma giant a single-digit royalty percentage if MGL-3196 hits pharmacy shelves. Despite a complete lack of revenue during the first nine months of 2018, Madrigal lost just $21 million during the first nine months of 2018.

Phase 2 results for MGL-3196 hit the mark last May, but Madrigal still hasn’t told investors if its phase 3 study for MGL-3196 will begin before the end of 2019. Madrigal finished September with $489 million in cash, which means it can probably afford to wait for a deep-pocketed drugmaker to make a buyout offer, or at least a partnership deal.

The better buy

If trial results on the way this quarter fall in line with earlier observations, Intercept could have a gigantic addressable patient population all to itself. The NASH market probably won’t stay sewn up for long. A large underserved patient population has inspired a great deal of drug development, and right now there are dozens of potential competitors in mid- to late-stage testing.

Madrigal’s $2.1 billion market cap seems like a compelling bargain for a drugmaker that wants to jump into NASH with a drug ready for late-stage testing, but we’ll probably have to wait until at least one proves itself in the commercial setting. Intercept’s a little more expensive than Madrigal, with a recent market cap of $3.2 billion, but Ocaliva’s revenue stream now, coupled with a great chance at becoming the NASH population’s first treatment option, makes it the better buy at the moment.

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Does Apple Have Something Big Planned for March?

Another day, another rumor about Apple (NASDAQ: AAPL). While it’s all part of being an Apple investor, sometimes there’s more to the stories than just idle gossip. It can be particularly intriguing when several reports coalesce to something that’s more than the sum of their parts, suggesting that there might be some underlying truth in the tales.

That’s precisely what’s happening right now. While we haven’t had any official confirmation from Apple, it seems there might be a big announcement coming in March. The timing wouldn’t be out of character for the iPhone maker, as the company has often scheduled product debuts in that month.

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A big debut in the making?

CEO Tim Cook recently signaled that new services will debut this year:

A recent report by Buzzfeed, citing unnamed sources, says that Apple is planning a big announcement at the Steve Jobs Theater on its Apple Park campus on March 25. Those same sources “described the event as subscription-services focused,” according to the report.

With a tentative date penciled in, here are a few possibilities for Apple’s big reveal.

The long-awaited subscription news service

There have been multiple accounts that a subscription service for news buffs is in the offing, which The Wall Street Journal is calling “Netflix for news.” The service would provide unlimited access to content from a number of participating publishers for one monthly subscription price. Negotiations are ongoing, and some content providers have bristled at Apple’s proposed 50% cut of subscription revenue, which could impact the timing of the launch.

The remaining revenue would be divided pro rata among the publishers, allocated on the basis of how much time users spent on each provider’s articles. The rumored price for the service is $10 per month.

The much-ballyhooed video streaming service

In late 2011, Steve Jobs told his biographer that he had “cracked” the code for television. Since then, rumors of an Apple television offering have been ever-present, the current Apple TV product notwithstanding.

Over the past couple of years, Apple has made no secret of its original content ambitions. After humble early attempts like Planet of the Apps and Carpool Karaoke: The Series, the company reportedly budgeted more than $1 billion for original movies and television series. The amount of star power behind the reports includes big names like Reese Witherspoon, Jennifer Aniston, Oprah Winfrey, J.J. Abrams, and M. Night Shyamalan. Still, even as these projects have progressed, many have wondered aloud what Apple’s endgame might be.

The widely-reported answer is that Apple plans to launch a global steaming video service, which could debut in April. In addition to its original content, sources say Apple will offer subscriptions to high-profile cable channels like HBO, Showtime, and Starz. The service would debut first in the U.S. and roll out globally thereafter.

The timing’s the thing

Apple is known for its secrecy, but it isn’t any secret that the company will increasingly look to its services and subscriptions for growth in light of the slowing sales of its flagship iPhone. The timing of the rumored March product announcement ties in nicely with the potential debut of both the news subscription service and the streaming video offering. Both also integrate perfectly with Apple’s need to boost its service and subscription revenue to drive future growth.

This is all conjecture until Apple makes it official, but in light of the timing, it sure makes a lot of sense.

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Danny Vena owns shares of Apple and Netflix. The Motley Fool owns shares of and recommends Apple and Netflix. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.

Will My Social Security Benefits Start Automatically?

Millions of seniors count on Social Security to pay the bills in retirement, and thankfully, signing up for benefits is pretty easy. But if you’re wondering whether that process will happen automatically, the answer is “no.”

The reason? There’s no single age to file for Social Security. Eligible recipients get an eight-year window to claim benefits that begins at age 62 and ends at age 70. (In fact, you’re not even required to file by 70, though there’s no financial reason to wait past that point.) There are different repercussions and advantages associated with filing at various ages, so the decision to claim benefits isn’t one the Social Security Administration (SSA) can make for you. Rather, you’ll need to weigh the pros and cons of filing at various ages to land on the right one.

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Making the best filing decision

Your Social Security benefits are calculated based on your 35 highest years of earnings, but the age at which you file for them can cause that number to climb or drop. If you file at full retirement age (FRA) — which is 67 for anyone born in 1960 or later – you’ll get the exact monthly benefit your earnings record entitles you to. File before FRA, and your benefits will be reduced for each month you claim them early. And if you delay benefits past FRA, you’ll boost them by 8% a year up until age 70 — which is why waiting past 70 doesn’t pay: You won’t grow your benefits any longer.

Because there are financial ramifications involved in your filing decision, you’ll need to consider your choices carefully. One thing to keep in mind is the extent to which you expect to rely on Social Security to cover your expenses in retirement. If you’ve saved well, you might claim benefits on the early side so you can use them to travel or enjoy life while you’re relatively young. But if you’re low on savings, you’ll probably want to grow those benefits, or least avoid a reduction.

Your health should play a big role in your filing decision, too. Though Social Security is technically designed to pay you the same lifetime total regardless of when you initially file (the logic being that claiming early will reduce your payments, but you’ll get more of them, while filing late will increase your payments, but you’ll get fewer), that’s only the case if you live an average lifespan. If your health is poor, and you expect to pass away on the younger side, you’re generally best off claiming benefits as soon as you’re able to. And if you expect to live a longer life than most, you should file as late as possible.

Claiming your benefits

No matter when you decide to file for Social Security, don’t expect those benefits to become available overnight. It can take several months for your application to go through, so if, for example, you want to start collecting benefits at age 67, you’d be wise to apply when you’re 66 and 9 months old.

The easiest way to apply for Social Security is online via the SSA’s website. You can also apply by phone or in person at your local Social Security office, though you might need an appointment if you’re going the latter route. Either way, put a decent amount of thought into the decision, and thank your lucky stars that you have the flexibility to start taking benefits at a time that’s most optimal for you.

The $16,728 Social Security bonus most retirees completely overlook If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

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4 Important Things You Must Know About Inherited 401(k)s

If you’ve just inherited a 401(k) from a deceased relative, you may not know how to proceed. You might be able to leave the money where it is, but this isn’t always a smart decision.

Worse even: If you don’t understand how the money will be taxed, you could end up losing a larger share of your inheritance to the government than you needed to. Here are four things you need to know about inherited 401(k)s if you’re the named beneficiary.

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1. How beneficiaries are chosen

By law, your spouse is designated as your 401(k) beneficiary, unless he or she is already deceased or signs a waiver giving up his or her right to the money. Then, you can leave the money to any other family member, friend, or group that you want to. It’s important to keep your beneficiaries up to date because if no surviving beneficiaries are listed when you die, the money will go to your estate instead, which can restrict how your heirs can take distributions. For example, the plan may require heirs to the estate to withdraw the money in a lump sum, forcing them to pay taxes on the full amount in a single year, whether they want to or not.

2. Spouses can roll over funds into their own accounts

Surviving spouses have the same distribution options as non-spouse beneficiaries (more on those below), but they also have the option to roll over the funds into their own IRA. The main reason people choose to do this is because they can delay required minimum distributions (RMDs). These are mandatory withdrawals from all retirement accounts except Roth IRAs that the government forces individuals 70 1/2 and over to take in order to ensure it gets its tax cut. You can withdraw more than this amount per year if you’d like, but if you withdraw less, you’ll pay a 50% penalty on the amount that you should have withdrawn. RMDs are determined by the value of the account and the age of the account owner.

If you do not roll over the 401(k) to an IRA in your own name, you will have to begin taking RMDs when your spouse would have turned 70 1/2, or if he or she was already 70 1/2 or older, you will have to continue taking distributions based on the age that your spouse would have been in that year. You can figure out how much you need to withdraw using this table. Simply divide the total value of the account by the distribution period for the age your spouse would be today if he or she was still alive.

The problem with this approach is that the RMDs may force you to take out more money than you’d like to, possibly pushing you into a higher income tax bracket where you will lose more of your inheritance to the government. While you can’t put off RMDs forever, you can delay them by transferring the money from your deceased spouse’s 401(k) to an IRA in your own name. Then, you won’t have to take any RMDs until you reach 70 1/2. You also won’t have to pay any taxes on the money until you withdraw it in your own retirement. Of course, if your deceased spouse was younger than you, you may be better off not rolling over the 401(k) because then you can delay RMDs until your spouse would have turned 70 1/2.

The downside of rolling over an inherited 401(k) to an IRA is that, if you’re under age 59 1/2, you can’t touch the money once you’ve rolled it over without incurring a 10% early withdrawal penalty, unless it’s for a qualified reason. So if you need the funds now, you’re better off going with one of the other methods below.

3. You can roll the money into an inherited IRA

The most popular option for non-spouse beneficiaries is to roll the money into an inherited IRA. If there are multiple beneficiaries, each can have their own inherited IRA with a share of the money. This is a new account set up in your own name, so you are able to designated beneficiaries of your own. Unlike regular IRAs, though, you’re able to take distributions from this account when you’re under age 59 1/2 without incurring a 10% early withdrawal penalty. But you still have to pay income tax on the money, unless it came from a Roth 401(k).

You can take your distributions in one of three ways: Withdraw it all at once, spread the withdrawals over five years, or take RMDs based on your own life expectancy. This last option is the most popular because it enables you to spread the taxes out across many years rather than paying for it all in a single year. Plus, it allows the money to remain in the IRA for longer and continue to grow.

Your RMDs for an inherited IRA or 401(k) are based on the IRS Single Life Expectancy Table. You look up your age and the life expectancy factor associated with it. Then, you divide the total value of the account by this number. So if you are 35 and the account that you’re inheriting is worth $100,000, you would look on the table and find that the life expectancy factor for age 35 is 48.5. So you would divide $100,000 by 48.5 and end up with $2,061.86. This is the minimum amount you would have to withdraw this year in order to avoid penalties. Next year, you would do the same thing, but this time with the life expectancy factor for age 36.

4. You may be able to leave the money where it is

While the easiest thing to do when you inherit a 401(k) is to leave it where it is, this is rarely the smartest decision.

For one, if you leave the 401(k) where it is, you’ll have to take RMDs based on the original owner’s life expectancy if you don’t withdraw the money in a lump sum or within five years. You also don’t get to choose your own beneficiaries for the money when you leave it. If you were to die unexpectedly, that money would go to your estate.

It’s also worth noting that depending on the 401(k) plan, you may not be allowed to leave the money where it is. The deceased’s employer will also get a say in how the money is handled, and some may require that the money be distributed in a lump sum or by the end of the fifth year following the employee’s death. Look into the rules for the deceased’s 401(k) plan to see if there are any restrictions on how you can take the distributions before you decide on a withdrawal strategy.

However you choose to handle your inherited 401(k), it’s important to make sure that you understand the tax implications of your decision so you don’t have any unpleasant surprises come tax time.

The $16,728 Social Security bonus most retirees completely overlook If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

The Motley Fool has a disclosure policy.

Nissan panel to recommend outside director to chair board: Nikkei

TOKYO (Reuters) – A Nissan Motor governance committee will recommend the appointment of an external director as board chairman, a role distinct from company chairman, in a move to decentralize power at the top level, the Nikkei business daily reported on Sunday.

Under Nissan’s current corporate charter, the position of board chair is automatically appointed to head the company board, the Nikkei said citing a source. Former Chairman Carlos Ghosn had filled both roles prior to his arrest in November for under-reporting his salary for eight years.

The issue of Nissan’s chairmanship is now particularly important after the Japanese firm identified the concentration of power in one executive as one of the reasons Ghosn was able to carry out his alleged fiscal misconduct.

Speculation has swirled about whether the newly appointed chairman of France’s Renault, Jean-Dominique Senard, would assume the chairmanship of the Japanese automaker.

The Nikkei report comes after the governance committee said in a statement that the separation between operation and oversight was among topics discussed on Friday at the committee’s third meeting since it was formed in December after Ghosn’s arrest.

The panel, comprising three Nissan external board directors and four third-party members, is scheduled to make recommendations to Nissan’s board in March on how to tighten lax governance and approval processes for matters including director compensation and chairman selection.

A spokeswoman for the committee said it could not comment on potential recommendations before they are submitted to the Nissan board. Nissan did not immediately reply to emailed request for comment.

Reporting by Makiko Yamazaki; Editing by Sam Holmes

Qatar’s real estate market faces reality check ahead of World Cup

DOHA/DUBAI (Reuters) – Qatar’s Doha Tower, a spike-tipped cylinder that glows orange at night, won an award when finished in 2012 amid a Gulf-wide real estate boom, but today about half of its 46 floors are empty.

The office tower, now a familiar part of the capital’s high-rise skyline, has run foul of what real estate brokers, bankers and analysts say is an oversupplied Qatar property market ahead of the 2022 World Cup that mirrors a real estate downturn in the wider Gulf region after a drop in oil prices.

Qatar has the added challenge of a diplomatic, trade and transport boycott imposed on the Gulf Arab state by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt over allegations that Doha supports Islamist militants, a charge Qatar denies.

The protracted row has made it tough to lure would-be foreign buyers of residential or commercial space.

Residential prices are down about 10 percent from June 2017, when the boycott began, and office prices have fallen by a similar rate, according to analysts and economists. Rents are down 20 percent from three years ago, they say.

“Qatar’s property sector has been one of the main casualties from the blockade that was imposed in mid-2017,” Jason Tuvey, an economist at Capital Economics, said.

The property downturn has so far not translated into bad loans, as bankers say borrowers holding sluggish real estate assets tend to be among the country’s wealthiest.

“They have capacity to withstand the market … I don’t see a major threat,” Doha Bank CEO Raghavan Setharaman said, when asked about his view of the real estate market.

A banker at Al-Khalij Commercial Bank said banks like his have been restructuring many property loans in recent months, extending them to 20-year payment periods from 10 in some cases, to keep business moving for developers hit by slow demand.

But with the World Cup edging closer, real estate experts say long-planned projects are now set to flood the market, even as buildings in prime locations, like Doha Tower, sit idle.

“It’ll be interesting to see what happens when they (real estate prices) are really put under pressure in a year’s time, when a lot of new supply hits the market,” Johnny Archer, Associate Director of DTZ, a Doha-based real estate firm, said.


Tiny but wealthy Qatar, the world’s top liquefied natural gas exporter, plans to increase residential space by about 50 percent and office space by 40 percent in the next three years, partly on expected demand from the World Cup, according to a report published last week by real estate company DTZ.

The lion’s share of construction underway is for high-end residential towers, white-collar office space, and luxury hotels and shopping malls.

FIFA requires Qatar have at least 60,000 hotel rooms in place for the month-long World Cup tournament, which Qatar estimates will draw about 1.5 million fans – more than half of its roughly 2.6 million population.

Qatar has about 26,500 rooms and will add another 15,000 by 2022, DTZ’s report estimated. The rest will be met by rooms aboard cruise ships and in desert camps, according to the local World Cup organizing committee. These camps are expected to be bedouin-style accommodation to give visitors a taste of desert life.

Much of the building is in an entirely new city, Lusail, a 38-square kilometer stretch just north of Doha dotted by commercial towers, hotels, and shopping centers at various stages of construction.

Lusail is being developed by state-controlled Qatari Diar Real Estate Company, which envisions it hosting 200,000 residents and 170,000 employees. It is anchored by Qatar’s largest World Cup stadium, an 80,000 seat venue that will host the opening and closing matches.

Colliers International, whose office was an early entrant to Lusail, says getting companies to fill a rush of towers coming online ahead of 2022 will be a daunting task.

“There is significant office oversupply and while the 2022 FIFA World Cup will help absorb space, new industries are required to bring large office occupiers in the medium to long term,” said Colliers’ Qatar country director Adrian Camps.

In a bid to spur activity, Qatar last month ratified an investment law allowing foreigners full ownership of companies, and for years Qatar has designated certain high-end areas like Lusail open to foreigners, but brokers say demand remains low.

Shopping malls, lacking the Saudi or Emirati shoppers who once flocked to them before the boycott, are among the most visibly affected, with some having to shutter shops in recent months.

New malls are being built anyway.

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Total retail space has doubled in three years and will grow 50 percent more by 2021 with nine new malls, according to DTZ.

Beyond 2022, Qatar real estate faces an uncertain outlook. Aside from soccer stadiums, Qatar has not specified legacy plans for what happens to infrastructure developed for the World Cup after the tournament.

“There’s too much uncertainty as to where that demand specifically is going to come from,” Richard Rayner, who surveys property for DTZ said.

Reporting by Eric Knecht in Doha and Tuqa Khalid in Dubai; Editing by Saeed Azhar and Jane Merriman

Airbus warns of no-deal Brexit, says has spent tens of millions preparing

LONDON (Reuters) – Airbus said on Sunday it would have to make “difficult decisions” about future investment if Britain crashes out of the European Union without a deal, adding it had already spent tens of millions of euros in preparations.

“There is no such thing as a managed ‘no deal’, it’s absolutely catastrophic for us,” senior vice president Katherine Bennett told the BBC’s Andrew Marr.

“Some difficult decisions will have to made if there’s no-deal (…) we will have to look at future investments.”

She said Airbus had already spent “tens of million of euros” on preparing for Brexit, for example on stockpiling parts and securing IT systems.

Reporting by Paul Sandle; Editing by Mark Potter

Qatar aims to build $20 billion sports sector ahead of World Cup

DOHA (Reuters) – Qatar wants to attract more sports companies to the Gulf state, aiming to develop a $20 billion sports sector ahead of the 2022 World Cup, a senior official said on Sunday.

Qatar Financial Center (QFC) – which licenses foreign companies, mostly in the finance sector, to exempt them from local ownership laws – aims to license about 150 sports companies by 2022, including around 25 this year, QFC’s CEO Yousuf Al-Jaida said at an event to announce the strategy. He did not give any names.

The drive to attract sports-related multinationals and facilitate the commercialization of sports-related services in the state is part of plans to become a regional hub for sporting events in the run-up to Qatar’s hosting of the 2022 soccer World Cup, he said.

This month FIFA established a joint venture in Qatar to help run the tournament.

“A lot of the value chain is moving to Qatar as we speak for the World Cup 2022,” Jaida said.

Qatar will this year stage the World Championships in Athletics, a biennial even organized by the International Association of Athletics Federations.

“We’re looking at sports service companies, legal companies, education and training, sportswear and equipment… it’s a detailed cluster of sports companies catering to 2022,” Jaida said.

Last year QFC announced plans for new incentives, like free office space and seed capital, to compete with neighboring Dubai.

Jaida said QFC also aims to attract companies in areas such as Islamic Finance, fintech and media as part of plans to attract 1,000 companies across sectors by the time Qatar hosts the World Cup, up from about 600 at present.

Qatar is looking to draw foreign investment and diversify its gas-centered economy but faces a diplomatic and trade boycott launched by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt in 2017. The bloc accuses Doha of supporting terrorism, which it denies.

There was no figure immediately available for the current value of sports investment.

Jaida said Qatar is also positioned to serve as an alternative hub to Dubai for regional markets like Kuwait, Oman, Turkey and Pakistan, where relations have grown stronger since the Gulf rift.

“We believe that due to the geopolitical situation some very interesting government-to-government relations have formed between Qatar and neighboring countries… (and) these can be target markets for companies wishing to do regional activities out of QFC,” Jaida said.

Reporting by Eric Knecht; Editing by Susan Fenton

Russia’s Gazprombank freezes accounts of Venezuela’s PDVSA: source

MOSCOW (Reuters) – Russian lender Gazprombank has decided to freeze the accounts of Venezuelan state oil company PDVSA and halted transactions with the firm to reduce the risk of the bank falling under U.S. sanctions, a Gazprombank source told Reuters on Sunday.

While many foreign firms have been cutting their exposure to PDVSA since the sanctions were imposed, the fact that a lender closely aligned with the Russian state is following suit is significant because the Kremlin has been among Venezuelan President Nicolas Maduro’s staunchest supporters.

“PDVSA’s accounts are currently frozen. As you’ll understand, operations cannot be carried out,” the source said. Gazprombank did not reply to a Reuters request for a comment.

Reuters reported this month that PDVSA was telling customers of its joint ventures to deposit oil sales proceeds in its Gazprombank accounts, according to sources and an internal document, in a move to try to sideline fresh U.S. sanctions on PDVSA.

Washington says the sanctions, imposed on Jan. 28, are aimed at blocking Maduro’s access to the country’s oil revenue after opposition leader Juan Guaido proclaimed himself interim president and received widespread Western support.

Gazprombank is Russia’s third biggest lender by assets and includes among its shareholders Russian state gas company Gazprom.

The bank has held PDVSA accounts for several years. In 2013, PDVSA said it signed a deal with Gazprombank for $1 billion in financing for the Petrozamora company. The source said that Petrozamora accounts were frozen, too.

Russian officials have said they stand by Maduro and have condemned opposition actions as a U.S.-inspired ploy to usurp power in Caracas.

But Russian firms find themselves in a quandary, caught between a desire to endorse the Kremlin line and back Maduro, and the fear that by doing so they could expose themselves to secondary U.S. sanctions which would harm their businesses.

Reporting by Tatiana Voronova; Writing by Katya Golubkova; Editing by Christian Lowe and Mark Potter