Business

BEIRUT — A New York-based firm contracted by the Lebanese government is to resume its audit of the central bank on Thursday in line with creditors' demands, the Lebanese presidency and a top official said.

The International Monetary Fund (IMF) and France are among creditors demanding an audit of Banque du Liban.

The move is part of urgent reforms to unlock financial support to deal with an economic crisis branded by the World Bank as one of the planet's worst since the mid-19th century.

Some observers have warned the audit is unlikely to yield the kind of revelations that could hold Lebanon's ruling elite accountable for the alleged corruption and mismanagement that caused the collapse.

The Alvarez & Marsal (A&M) auditing firm had launched an audit in September last year but was forced to pull out some two months later because the central bank failed to hand over necessary data.

On Wednesday, President Michel Aoun met with A&M managing director James Daniell, who informed him that "the company will begin tomorrow its forensic financial audit of Lebanon's central bank after all arrangements were completed", the presidency said.

Finance ministry official Georges Maarawi said that the firm "will have 12 weeks to collect information and draft a report", under the terms of its contract with the Lebanese government. 

Finance Minister Youssef Khalil signed the contract with A&M last month, only days after he took up his post.

Experts have expressed doubts that the terms of the contract and the limited time given to auditors will allow for a credible investigation.

"As long as the auditors don't have direct access to servers, IT and accounting systems and the work isn't overseen by the competent authorities... then I don't expect anything out of it," financial analyst Mike Azar said.

"The way the work is structured now will most likely not result in an honest and thorough forensic audit," he told AFP.

In December, parliament approved a bill that suspends banking secrecy laws for one year to allow for the forensic audit — which is widely seen as a necessary prelude to any agreement with the IMF over financial assistance.

Finance ministry official Maarawi said Lebanese authorities were holding "technical meetings" with the IMF, without elaborating.

Following a meeting with IMF executive director Mahmoud Mohieldin on Tuesday, Prime Minister Najib Mikati said that Lebanon was betting on an IMF plan to help it survive its unprecedented financial crunch.

"We hope to clinch a cooperation agreement before the end of the year," he said. 

LONDON — Prime Minister Boris Johnson on Tuesday urged foreign investors to buy into post-Brexit Britain, as he seeks to power the country's future prosperity on renewable energy.

The UK leader kicked off a Global Investment Summit in London by announcing a £400 million ($552 million, 473 million euros) partnership with the Bill Gates Foundation to invest in emerging green technologies.

The tie-up, which will see both sides stump up £200 million, follows Spanish renewable energy giant Iberdrola announcing late Monday plans to invest £6 billion creating Britain's biggest offshore wind development.

Johnson, who has outlined plans for the UK to reach net-zero carbon emissions by 2050, is hoping to burnish his green credentials before hosting world leaders at a critical UN climate change gathering in Glasgow next month.

He also wants to boost investment to grow Britain's economy as it grapples with the fall-out from the coronavirus pandemic and Brexit, which have combined to strain the logistics sector, labour market and other areas.

In his sales pitch, Johnson promised government backing for private investment in sustainable projects, promising Britain was now "moving in an exciting new direction with a green, industrial revolution, with new regulatory freedoms".

But some government plans to cut carbon emissions have come under fire for not going far enough.

Homeowners in England and Wales will be offered subsidies of £5,000 from next year as part of a £450 million scheme to help them replace old gas boilers with low-carbon heat pumps.

But experts pointed out that the grants will fund just 90,000 of the devices, and a better alternative would be to reduce energy demand by improving home insulation.

Activists from the campaign group Insulate Britain have sought to highlight that issue by blocking motorways and main roads in recent weeks.

Scaling up 

The Gates Foundation tie-up — run through the Microsoft co-founder's Breakthrough Energy Catalyst arm, set up in 2015 alongside private investors — will focus on four key green technology areas.

They include green hydrogen, long-term energy storage, sustainable aviation fuels and so-called direct air capture, which harnesses carbon dioxide from the atmosphere.

Appearing with Johnson, Gates said the joint investment would begin next year and he hoped that at least one of them would be "ready to scale" within five years and the remainder within a decade.

"We're going to take these technologies which are not yet economic... and we will scale those up and bring down that cost, so we'll get these to the same place we are today with solar and onshore wind," he added.

Meanwhile, once operational Iberdrola's wind project off the east coast of England — involving its subsidiary Scottish Power — would supply enough energy to power 2.7 million homes and create 7,000 jobs.

The project, which still requires planning consent, is one of 18 deals worth a total of £9.7 billion and creating a potential 30,000-plus jobs to be formally announced at the summit.

The government said it will also launch a new "Investment Atlas" showcasing strategic investment opportunities across the UK as it seeks to deliver on one of its central 2019 election pledges to reduce regional inequality.

TAIPEI — Taiwanese tech giant Foxconn unveiled three electric vehicles on Monday, boosting its bid to be a major player in the rapidly expanding EV market as it seeks companies to partner with.

The world's largest contract electronics maker, Foxconn already plays a lynchpin role in assembling Apple's iPhones as well as gadgets for a myriad of top international brands. 

But it has been moving fast to diversify beyond electronics assembly and has ploughed money into electric vehicles, including a joint venture with local automaker Yulon Motor and purchasing a struggling auto plant in Ohio.

The models unveiled on Monday — a sedan, an SUV and a bus — are concept vehicles that Foxconn hopes it could build with other manufacturers.

"Foxconn is no longer a new kid in town," Chairman Young Liu declared at the unveiling ceremony in Taipei.

Foxconn's founder Terry Gou drove their "Model E" sedan to the presentation and said the company's EVs "demonstrate Taiwan's overall industrial strength".

A white sports utility vehicle — "Model C" — is expected to hit the market in Taiwan in 2023 with a price tag of under Tw$1 million ($357,000), the firm said. 

Its "Model T" electric bus could start operating in southern Kaohsiung city as early as next year if it passes the transport ministry's review, Vice Premier Shen Jong-chin said.

Foxconn has funnelled about Tw$10 billion ($355 million) into electric car development in 2020 and the company says its investment will rise over the next two years. 

Liu said the company "has gradually built an electric vehicle supply chain and distribution network", with one new partnership announced almost every month this year.

Among its recent partners is Fisker, one of a host of US-based electronic car startups hoping to one day challenge Tesla's supremacy. 

The two companies announced plans to jointly develop electric cars sold under the Fisker brand with a goal to start producing vehicles in late 2023.

It has been widely reported for years that Apple has a secret electronic car project, something Foxconn could be in an ideal place to partner on given its existing relationship with the Californian giant. 

The unveiling of Foxconn's models comes as car makers suffer from a global shortage of semiconductors after the coronavirus pandemic caused purchases of electronics and computer parts to sky-rocket.

Taiwanese high-tech chip foundries are some of the world's biggest and most advanced and have been ramping up production to meet the demand.

WASHINGTON — New data that was out on Friday showed $590 million in ransomware-related payments were reported to US authorities in the first half of 2021 alone, setting a pace to beat totals for the whole previous decade as cyber extortion booms.

The figure is also 42 per cent higher than the amount divulged by financial institutions for all of 2020, the US Treasury report said, and there are strong indicators the true cost could be in the billions.

"If current trends continue, [reports] filed in 2021 are projected to have a higher ransomware-related transaction value than... filed in the previous 10 years combined," said Treasury's Financial Crimes Enforcement Network.

The heists involve breaking into a company or institution's network to encrypt its data, then demanding a ransom, typically paid via cryptocurrency in exchange for the digital key to unlock it.

Washington has sought to crack down on a sharp rise in attacks, including issuing its first sanctions against an online exchange where illicit operators have allegedly swapped cryptocurrency for cash.

Recent assaults on a major US oil pipeline, a meat packing company and the Microsoft Exchange e-mail system drew attention to the vulnerability of US infrastructure to digital pirates who are extorting staggering sums.

Treasury said investigators found over 150 online wallets for cyptocurrency and by analysing them uncovered roughly $5.2 billion in transactions potentially tied to ransomware payments.

Companies and institutions face intense pressure to pay up in order to get their data unlocked, but also to keep the attack from potentially angry clients and authorities who issue stern warnings not to give cash to criminals.

The report, based on the suspicious activity alerts that financial firms have to file, noted it was unclear if the jump represented increased awareness of the cybercrime.

"This trend potentially reflects the increasing overall prevalence of ransomware-related incidents as well as improved detection and reporting," Treasury said.

The victims of the attacks were not identified in the report, which noted some of the apparent ransoms were paid before January 2021.

The new data on the scale of payments related to hacks came after more than two dozen nations resolved to collectively fight ransomware during a Washington-led summit.

The United States gathered the countries — with the notable exception of Russia — to unify and boost efforts to fight a cybercrime that is transnational, on the rise and potentially devastating.

Stronger digital security and offline backups as well as collectively targeting the laundering of the attacks' proceeds were identified as crucial steps in the fight.

"We will consider all national tools available in taking action against those responsible for ransomware operations threatening critical infrastructure and public safety," the nations said in a joint statement.

Great Britain, Australia, India, Japan, France, Germany, South Korea, the European Union, Kenya, Mexico, and others were among those that joined in the virtual gathering on Wednesday and Thursday.

During the summit, countries’ representatives recounted their agonising experiences with cyber extortion.

NEW YORK — Bitcoin breached the $60,000 mark for the first time since April on growing optimism that American regulators will greenlight the first US futures exchange-traded fund (ETF) for the cryptocurrency.

The digital currency was up more than 40 per cent from a month ago, reaching $62,253 at 20:50 GMT, according to Bloomberg News data, which reported that the US Securities and Exchange Commission (SEC) could allow the ETF to trade next week.

The SEC has rejected attempts to create a Bitcoin ETF since 2013.

"An SEC Bitcoin ETF approval is a watershed moment for the crypto industry as this could be the key driver for getting the next wave of crypto investors," said Edward Moya, senior market analyst at OANDA.

An ETF is a financial instrument that can include different assets and be traded on an exchange like other securities. A futures ETF means the product will be bought or sold at set price at a later date.

The SEC fuelled speculation of the imminent approval after writing the following advice on one of its accounts on Twitter: "Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits."

The ETF would add to an eventful year for the world's leading cryptocurrency, which hit a record high at $64,870 in April and became a legal tender in El Salvador, the first country to adopt it officially.

China, meanwhile, has cracked down on trading and mining cryptocurrencies, which are created through solving complex equations — an endeavour that consumes enormous amounts of energy.

SEC U-turn 

Bloomberg, which cited unidentified people familiar with the matter, reported that unlike past Bitcoin ETF applications that the SEC rejected before, the proposals made by financial firms ProShares and Invesco are based on futures contracts.

The proposals were filed under mutual fund rules that SEC Chairman Gary Gensler has said provide "significant investor protections", the news agency reported.

"This is a key development for the crypto space as it would allow many investors who were on the fence to enter the market in more traditional ways," said Walid Koudmani, analyst at XTB online trading.

An ETF would reassure investors "about previously associated risks such as lack of regulations and the possibility of having their wallet hacked", Koudmani said.

There are ETFs that include Bitcoin in other countries but getting one in the United States would take the cryptocurrency to another level.

"In America's case, it's the largest, most important market. To date, they [traditional investors] haven't had a simple vehicle in which to invest in Bitcoin," Charlie Erith, CEO of ByteTree Asset Management, which specialises in cryptocurrencies, said.

Erith cautioned that "the impact on the market might be overblown. You might see a short selloff but it won't be meaningful".

But, he added, "long term, it's an important development. It signals that authorities are getting more comfortable with people owning cryptoassets".

NEW YORK — Delta Air Lines reported a profitable third quarter on the gradual recovery in air travel on Wednesday, but said rising fuel prices could dent earnings in the current quarter.

"While demand continues to improve, the recent rise in fuel price will pressure our ability to remain profitable for the December quarter," said Chief Executive Ed Bastian.

The big US carrier, which endured a disastrous 2020 following a deep downturn in travel during the worst of the pandemic, said domestic travel remained a strong point in the wake of the Covid-19 vaccine release throughout the United States.

The airline also saw strength in travel to Latin America, while transatlantic travel "improved the most" during the quarter, driven by border reopenings, Delta said in its earnings release.

Corporate volumes were "stable," but the recovery in business travel paused in September as companies delayed reopening their offices due to the Delta variant of the virus.

Overall, Delta reported profits of $1.2 billion in the quarter ending September 30, compared with a loss of $283 million in the year-ago period.

Revenues were $9.1 billion, up from $3.1 billion in the year-ago period, but below the $12.6 billion in 2019. 

Delta anticipates fourth-quarter capacity to return to 80 per cent of its pre-pandemic level on the basis of factors that include "robust holiday demand," the company said.

The carrier projected that jet fuel in the fourth quarter would be priced at between $2.25 and $2.40 per gallon, up around 20 per cent from the level in the just-finished quarter.

Shares fell 4.5 per cent to $41.57 in mid-morning trading.

WASHINGTON — Rising energy prices are weighing on households but the recent spike is unlikely to fuel a 1970s-style oil crisis and should retreat early next year, International Monetary Fund (IMF) Chief Economist Gita Gopinath said on Tuesday.

Energy prices collapsed last year amid the shutdowns imposed to contain the COVID-19 pandemic, but 2021 has brought a sharp rebound in demand as the global economy recovered, Gopinath said in an interview.

In the energy market, a long, cold winter followed by a particularly hot summer led to greater demand and depleted stocks, especially gas reserves in Europe. 

"This recovery is really quite unique," she said, speaking on the sidelines of the annual meetings of the IMF and World Bank.

Supplies of many other goods have not been able to rebound as quickly as demand, hampered in part by the spread of the Delta variant of COVID-19, which has made workers reluctant to return to their jobs and snarled supply chains.

Those labour shortages are "feeding into price pressures" in countries like Germany, the United States and Japan, she said.

"We are in a difficult situation where we've seen prices go up very sharply," and the key question is whether that will persist, she said.

Worst case scenario? 

While energy prices "will be elevated" for the next couple of months, "We expect that to come back down by the end of the first quarter next year and into the second quarter," she said.

"Once we get past the winter months, we will be in a better place."

Oil prices have soared in recent weeks, jumping to multiyear highs on Monday, with the benchmark WTI crude jumping above $80 a barrel for the first time since October 2014 and up 30 per cent since August, which sent major stock markets tumbling.

The increase in energy prices has ramped up fears that overall inflation could tick even higher and hinder the global economic recovery.

Gopinath cautioned that the weather will play a factor, since a very severe winter could lead to broader power outages "that will have a much bigger effect on the world".

The worst outcome would be "an extremely severe winter in the Northern Hemisphere", driving up demand for energy, combined with a failure of producers including the OPEC+ to respond with increased output, which could feed into headline inflation, she said.

In February 2021, severe weather marked by polar temperatures and snowstorms caused a surge in electricity consumption in the southern United States. 

Texas, with a population of nearly 29 million, was unable to meet the explosion in demand, and blackouts affected hundreds of thousands of homes. 

However, Gopinath does not expect a crisis like the one seen in the 1970s because the world relies much less on energy relative to the size of the economy.

"It would take a much bigger ratcheting up in gas prices, for instance, to have a kind of a stagflationary event," she said, referring to the economic crisis in the 1970s when inflation spiraled due to high oil prices as growth stalled.

The IMF's latest forecasts call for inflation to return to pre-pandemic levels by the middle of 2022, but warn of "high uncertainty" and upside risks in the United States.