Business

RIYADH — Saudi Arabia's Saudia Group will buy 105 Airbus planes, the company said on Monday, hailing it as the biggest aircraft deal in the country's history.

Saudia airline will receive 54 A321neo aircraft, while budget offshoot flyadeal will acquire 12 A320neo and 39 A321neo planes, they said in a statement.

The deal is valued at $19 billion, according to a separate statement from the Future Aviation Forum, the conference in the Saudi capital Riyadh where the deal was announce.

"This landmark agreement encompasses 105 confirmed aircraft and marks a significant moment not only for the Saudi aviation industry but also for the wider MENA region," the Saudia statement said.

The purchase, described as "the largest aircraft deal in Saudi aviation history", marks a further investment by Saudi airlines more than a year after new carrier Riyadh Air was unveiled.

Saudi authorities have also announced plans for a large new airport in the capital Riyadh capable of accommodating 120 million passengers a year.

Prior to the deal announced Monday, Saudia had a fleet of 144 aircraft while flyadeal had 32.

Saleh Eid, vice president of fleet management and agreements at Saudia, told AFP that deliveries would start in 2026 and continue until 2032. 

Jeddah-based Saudia, also known as Saudi Arabian Airlines, dates to 1945 when it received its first jet, a gift from US president Franklin Roosevelt. 

Crown Prince Mohammed Bin Salman sees aviation as a key component of his "Vision 2030" reform agenda to remake the petroleum-centred economy, aiming to more than triple annual traffic to 330 million passengers by the end of the decade.

Vision 2030 "motivated our decision to secure this significant deal, which will create jobs, increase local content and contribute to the national economy", Saudia Group director general Ibrahim Al Omar said in the statement.

Rapid expansion 

Aviation contributed $20 billion to the Saudi economy in 2023, according to a report published on Monday by the Saudi General Authority for Civil Aviation. 

"Aviation supports 241,000 jobs, and a further estimated 717,000 jobs in the tourism sector," the report said. 

Steven Greenway, chief executive of flyadeal, told AFP the aircraft order announced on Monday was "really a confirmation of how quickly the market is growing and our ambitions to support it".

Currently flyadeal has a mix of 80 per cent domestic flights and 20 per cent international, but "that will change to 50-50 over the next couple of years where we start expanding internationally", Greenway said. 

Last year Saudia announced a deal to buy 39 Dreamliner planes from Boeing with options for 10 more.

Newcomer Riyadh Air had also announced an agreement to buy 39 Boeing Dreamliners, with options for 33 more jets.

Despite ongoing problems at Boeing, which has reported a string of financial losses and has significantly slowed its delivery of new jets while it addresses quality control issues, Riyadh Air is still expected to start flying in the summer of 2025, chief commercial officer Vincent Coste told AFP.

Approximately 10 destinations will come online by the end of that year, Coste said, with more than 100 targeted by the end of the decade.

"We'll pretty much open an average of two destinations every month, during five years, which has never been achieved before," he said.

Saudi Arabia is also launching NEOM Airlines, to be based in the planned megacity.

The Saudis are moving into a crowded Gulf market.

Dubai, in the neighbouring United Arab Emirates, has Emirates, the Middle East's biggest airline, and the world's busiest airport for international passengers.

Qatar, another Gulf air hub, is expanding capacity at Hamad airport to 70 million people a year and increasing routes for Qatar Airways.

But Greenway from flyadeal said he had no doubt Saudi Arabia's growth could continue.

"The country has only just opened up over the past couple of years, so you're only just starting to see the tip of the iceberg in terms of the potential of the market," he said.

"There's still a long way to go."

PARIS — The sharp drop in prices for minerals critical to the green energy transition is masking a looming shortage due to inadequate investment, the International Energy Agency (IEA) said recently.

In its second annual review of the market for such critical materials, the IEA noted prices for minerals key for electric vehicles, wind turbines and solar panels fell back to pre-pandemic levels as supplies caught up with and surpassed demand.

While the price drops are good news for consumers, the Paris-based agency expressed concern it will deter investment needed to meet demand, which is set to soar as many nations try to phase out sales of new internal combustion engine cars in the next decade.

The IEA, which advises advanced economies on energy policy, calculated that announced projects will be able to meet only 70 per cent of copper and 50 per cent of lithium requirements in 2035, in a scenario in which countries worldwide meet their national climate goals.

Both metals are key for manufacturing electric vehicles.

"Secure and sustainable access to critical minerals is essential for smooth and affordable clean energy transitions," IEA Executive Director Fatih Birol said in a statement.

"The world's appetite for technologies such as solar panels, electric cars and batteries is growing fast — but we cannot satisfy it without reliable and expanding supplies of critical minerals," he added.

The IEA forecasts the combined market size of key energy transition minerals is set to more than double to $770 billion by 2040 as countries target net zero emissions by mid-century.

It found only limited progress has been made in diversifying supplies, a key issue given the recent experience with the pandemic snarling supply chains and geopolitical tensions creating risks to access.

The IEA called for stepping up efforts to recycle materials, innovate and encourage behavioural changes in order to ease potential supply strains.

It also said some $800 billion of investment in mining is required by 2040 to put the world on track to limit global warming to 1.5oC from pre-industrial levels.

It warned, however, that "without the strong uptake of recycling and reuse, mining capital requirements would need to be one-third higher".

Environmental fears 

The report analysed supply and geopolitical risks, as well as barriers to responding to supply disruptions, and exposure to environmental, social and governance (ESG) risks.

The IEA said it found a "mixed picture" regarding ESG risks.

While progress has been made in terms of involving local communities and using renewable energy, it flagged a different picture for reducing waste, emissions and water consumption.

But representatives of local communities warned the rush for critical minerals was already inflicting "serious costs" on indigenous people and their traditional lands, said Galina Angarova of the Buryat ethnic group from Siberia.

"If we continue down the current path, we risk building the destruction of nature, biodiversity, and human rights" into the economy-wide shift away fossil fuels, she told reporters.

"We are on the cusp of the next industrial revolution and we have to do this right," said Angarova, who leads a coalition fighting for indigenous rights in the green transition.

Adam Anthony, from financial transparency group Publish What You Pay, said companies were rushing to Africa to dig up critical minerals but there was little to show for that on the ground.

Tanzania, for example, was extracting manganese and graphite, but producing none of the higher-value green tech items like electric cars or batteries that need these minerals, he added.

"When we talk about critical minerals, it is also very important to ask — who are they critical for?" said Anthony.

"We don't receive any value from the extraction at the moment."

BEIJING — China cut the minimum down payment rate for first-time homebuyers recently and suggested the government could buy up commercial real estate, in some of Beijing's most ambitious moves yet to lift the ailing housing market out of an unprecedented debt crisis.

Property and construction accounts for more than a quarter of gross domestic product, but the sector has been under unprecedented strain since 2020, when authorities tightened developers' access to credit in a bid to reduce mounting debt.

Since then, major companies including China Evergrande and Country Garden have teetered, while falling prices have dissuaded consumers from investing in property.

Under mounting pressure to boost the ailing market and ensure millions of unused homes go to those in need of housing, Beijing convened a video conference Friday, state news agency Xinhua said.

Friday's meeting was attended by regulators, representatives of top banks, local governments and the property market, Bloomberg News reported.

"Great efforts should be made to promote the handling of commercial housing projects classified as under construction that have been sold and are facing difficulties to deliver," Vice Premier He Lifeng told the meeting, according to state media.

"In cities where there is a large inventory of commercial housing, the government can place orders and purchase some of the commercial housing at reasonable prices as appropriate to use as affordable housing," he added.

No details were provided on how many houses would be bought.

'Unexpected and positive' 

"Relevant local governments should... properly handle transferred idle residential properties through retaking, acquisition... to help housing companies with financial difficulties solve their challenges," He said.

State media also reported, citing the central bank and the National Financial Regulatory Administration, that they would cut the minimum down payment rate for first-time homebuyers to 15 per cent, one of the country's lowest-ever rates.

The rate will be cut to 25 per cent for second-home purchases, it added.

The moves are some of Beijing's most ambitious yet in seeking to reverse a chronic crisis in the housing market.

"This is the lowest down payment requirement and the lowest mortgage interest rate in history," Yan Yuejin, research director of the Yiju Research Institute, told AFP.

"These policies send very bullish signals and will be very helpful in boosting market moods," he added.

"We are very optimistic about the potential effects they will have on boosting the real estate market."

During a State Council briefing Friday afternoon attended by officials from the housing ministry as well as those from China's top regulator and its central bank, officials pointed to "significant difficulties" in the market.

"Significant changes have taken place in the supply and demand dynamics of the property market," said Dong Jianguo, deputy head of China's housing ministry, adding that the sector "is in the process of adjustment".

The briefing also saw central bank Deputy Governor Tao Ling announce that the government would set up a loan scheme for low-income housing totalling over $41 billion.

Shares in Chinese developers have rallied in Hong Kong in recent days on hopes of fresh support for the sector.

Jeff Zhang, an analyst at Morningstar Inc. in Hong Kong, told Bloomberg Friday's move was "unexpected and positive for property stocks".

'Stabilisation plan' 

Agile Group soared 23 per cent and Fantasia added 8.3 per cent Friday, while Sino-Ocean Group and CIFI Holdings each gained more than 12 per cent.

Longfor Group added 10 per cent and China Vanke piled on 19 per cent each, having jumped 15 per cent and 16 per cent respectively on Thursday, according to Bloomberg News.

The meeting comes as official figures on Friday showed that property prices and sales in the country continued to slip in April.

Further economic data showed that industrial production picked up last month, but consumption continued to slow.

China on Friday also issued around $5.5 billion in ultra-long treasury bonds, Xinhua said, the first batch of a planned sale of nearly $140 billion in such bonds this year.

Measures introduced by the central government to support the sector have so far had little effect.

But HSBC economists wrote in a note that, with Friday's announcement: "China's property stabilisation plan is underway."

"The quicker and bolder the intervention plan, the more effective it will be, in our view," they said.

TOKYO — Troubled Japanese industrial giant Toshiba said on Thursday that it plans to cut up to 4,000 jobs domestically as part of a restructuring programme.

The announcement follows the delisting of the firm's shares in December after being taken private by a consortium in the wake of multiple crises.

The headcount reduction will be achieved by November by offering employees aged over 50 who meet specific criteria voluntary early retirement. 

"It was a tough decision for the management to make. But we believe these measures are essential to putting Toshiba back on the trajectory of recovery and growth," a company spokeswoman told AFP without wishing to be named.

Large-scale layoffs are rare in Japan but such use of early retirement schemes or voluntary redundancy has risen sharply.

The firm also said it is targeting operating profit of 380 billion yen ($2.5 billion) and a return on sales of 10 per cent in fiscal 2026, Bloomberg News reported.

It will move also head office functions from Tokyo's Hamamatsucho area to Kawasaki outside the Japanese capital in the first half of fiscal 2025.

Toshiba traces its roots back to 1875 and evolved into a vast conglomerate in the 20th century synonymous with Japan's postwar economic revival.

The firm became a household name in Japan and beyond, making everything from early laptop computers, elevators and nuclear power stations to microchips.

But it has lurched from crisis to crisis in recent years, including a huge accounting scandal in 2015 and billions of dollars in losses from US nuclear subsidiary Westinghouse.

Pressure from activist shareholders and a takeover offer from private equity group CVC prompted aborted attempts to split the company first into three, and then into two.

Finally, Toshiba's board accepted in March 2023 the takeover bid worth around $14 billion by the consortium that included around 20 Japanese banks and other firms.

Its shares were then delisted in December after more than 70 years being traded on the Tokyo bourse.

The saga was closely watched in business circles for clues about what could become of other huge, diversified conglomerates in Japan and elsewhere.

DOHA — Qatar expects to sign more long-term natural gas supply deals this year to meet growing international demand, Energy Minister Saad Al Kaabi said on Wednesday.

The minister, who is also chief executive of QatarEnergy, said the state-owned giant had secured sales of 25 million tonnes of liquified natural gas (LNG) in the past year and expected to be "signing more this year".

"It's just agreeing on terms and conditions and pricing... but I think there's a huge demand out there, whether it's from Asia or Europe," Kaabi told the Qatar Economic Forum.

"I think even Europe is realising now they have to do something different to secure long term," he added.

Qatar is one of the world's top LNG producers alongside the United States, Australia and Russia.

Asian countries led by China, Japan and South Korea have been the main market for Qatari gas, but demand from European countries has grown since Russia's war on Ukraine threw supplies into doubt.

In February, Qatar announced plans to expand output from its North Field, saying they would boost capacity to 142 million tonnes per year before 2030.

Kaabi said there could be further expansions to the emirate's LNG production capacity.

"The technical capability of doing more in Qatar is going to be assessed in the future and, if there is more, we probably will do more," he said.

In recent months, Qatar has inked LNG deals with France's Total, Britain's Shell, India's Petronet, China's Sinopec and Italy's Eni among others.

STOCKHOLM — The leaders of Germany and Sweden expressed reservations on Tuesday about possible European tariffs on Chinese electric vehicles after Washington announced huge duties on Chinese EVs.

Swedish Prime Minister Ulf Kristersson and German Chancellor Olaf Scholz were asked at a press conference in Stockholm whether they support the EU following the United States in slapping tariffs on Chinese electric cars.

"As far as tariffs are concerned, we are in agreement that it is a bad idea to dismantle global trade," Kristersson told reporters on the second day of Scholz's visit to Sweden.

Scholz noted that half of EVs imported from China were produced by Western manufacturers.

"There are European and North American manufacturers that succeed on the Chinese market and which sell their vehicles in China, we need to remember that," he said, stressing the importance of trade between the West and China.

Earlier, Washington announced it was hiking tariffs on $18 billion worth of imports from China, targeting strategic sectors like batteries, steel, critical minerals and electric vehicles.

The tariff rate on EVs is set to quadruple to 100 per cent this year.

The European Union launched an inquiry into Chinese electric car subsidies last year, fearing that they were a threat to Europe's own vast automotive industry.

Once its probe is concluded, the EU could decide to hike tariffs on cars imported from China beyond the current 10 per cent.

"We don't yet know the results of the investigation," Scholz stressed.

EU chief Ursula von der Leyen met Chinese President Xi Jinping for talks last week in France, where she said she had "made clear that the current imbalances in market access are not sustainable and need to be addressed".

"China is currently manufacturing, with massive subsidies, more than it is selling due to its own weak domestic demand. This is leading to an oversupply of Chinese subsidised goods, such as EVs and steel, that is leading to unfair trade," she said.

"Europe cannot accept such market distorting practices that could lead to de-industrialisation in Europe."

Beijing has reacted furiously to what it calls EU "protectionism", and denied there was any problem of Chinese overcapacity.

'Don't be naive' 

The possibility of European tariffs has ruffled feathers in Germany, whose companies own many plants in China that export back to Europe.

Oliver Zipse -- CEO of BMW, which has major investments in China, the world's biggest car market, last week warned the EU it could "shoot yourself in the foot".

A recent study by the European umbrella organisation Transport & Environment (T&E) showed that around 20 per cent of all electric vehicles sold in the EU last year, or 300,000 units, was made in China.

More than half of those were made by Western brands, including Tesla, Dacia and BMW, which produce them in China for export.

Kristersson said Europe should "not be naive".

"We've learned that supply can be disrupted for a number of reasons, whether it be due to pandemics or wars. And we have good reason to demand a level playing field" on the global market, he said.

"There are good reasons to push for strong reciprocity between countries, but a trade war where we block each others' products is not the future of big industrial countries like Germany and Sweden," Kristersson said.

In 2023, Swedish carmaker Volvo Cars, owned by Chinese group Geely, sold 42 per cent of its cars in Europe and 24 per cent in China.

In the process of phasing out combustion engines in favour of electric vehicles, it has three assembly plants in China and two in Europe, with a third under construction in Slovakia.

LONDON — Global markets were in cautious mode on Monday with Wall Street marking time while major European stock markets put the brake on following a record run last week as investors wait on key US inflation data.

London, Paris and Frankfurt ended marginally down after finishing at all-time highs on Friday.

On Wall Street, the Dow was flat more than two hours into the session while the broad-based S&P 500 and the tech-heavy Nasdaq were barely in the green on the eve of inflation figures that will influence interest-rate decisions.

World markets rallied last week on optimism that the US Federal Reserve, the European Central Bank and the Bank of England will soon cut borrowing costs after raising them in efforts to contain soaring prices.

Investors will pore over two sets of US inflation data for April — the producer price index on Tuesday and the consumer price index on Wednesday — for fresh clues about the Fed's monetary policy outlook.

"This week's US inflation updates are likely to be the drivers of equity market direction," said David Morrison, senior market analyst at Trade Nation.

"If the numbers suggest that inflation is continuing to push higher, then that will decrease the probability of rate cuts this year," he said.

An uptick in inflation in recent months has dented hopes that the Fed will start cutting rates as soon as June, and odds-makers now see the possibility of it happening in September.

This week's figures "will provide substantial insights into the likely duration of elevated interest rates," said Fawad Razaqzada, analyst at City Index and Forex.com.

Briefing.com analyst Patrick O'Hare said investors will also closely track retail sales figures, due out Wednesday, and quarterly earnings from Home Depot and Walmart.

"All of that, in turn, will fold into what the market thinks it can expect from the Fed in terms of future rate cuts," O'Hare said.

US-China trade war 

In Asia, indices also fluctuated as traders absorbed weak Chinese data and news that Beijing planned to start selling the first batch of almost $140 billion of bonds to boost the stuttering economy.

The week began on a tepid note after figures showed a drop in a broad measure of credit in China that sparked worries of a further slackening in the world's number two economy.

That came as The Wall Street Journal reported that the White House is looking at almost quadrupling tariffs on Chinese electric vehicles as part of a plan that will also target batteries and solar cells.

A decision, expected on Tuesday according to reports, would come as US President Joe Biden gears up for a rematch with Donald Trump in November's presidential election.

Last month, Biden urged a tripling of tariffs on steel and aluminium as he courted blue-collar voters.

In London, meanwhile, an announcement by Australian mining giant BHP that British rival Anglo American has rejected an "improved" takeover bid worth £34 billion ($43 billion) as it aims to create a copper titan left the latter's share price off 2.4 per cent.

BHP, whose chief executive Mike Henry said a deal would prove a "win-win for BHP and Anglo American shareholders" shed 0.6 per cent.

LONDON — Britain exited recession with stronger-than-expected growth in the first quarter of 2024, official data showed Friday, in a boost to embattled Prime Minister Rishi Sunak ahead of this year's election.

Gross domestic product expanded by 0.6 per cent in the first three months of this year, the Office for National Statistics (ONS) said in a statement, beating market expectations of 0.4 per cent.

The economy had suffered two successive quarters of contraction in the second half of last year, meeting the technical definition of a recession on the back of elevated inflation and a cost-of-living crisis.

Sunak, whose governing Conservatives are trailing the main opposition Labour Party ahead of a general election, has made economic growth one of his top priorities.

"There is no doubt it has been a difficult few years, but today's growth figures are proof that the economy is returning to full health for the first time since the pandemic," said finance minister Jeremy Hunt.

"We're growing this year and have the best outlook among European G7 countries over the next six years," he added.

Friday's bright news came one day after the Bank of England kept its main interest rate at a 16-year high, but hinted at a cut over the summer as UK inflation cools further — and forecast emergence from recession.

"After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year," said ONS director of economic statistics Liz McKeown.

"There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well.

"Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction."

GDP had shrunk by 0.3 per cent in the fourth quarter of 2023 after contracting by 0.1 per cent in the prior three months.

MADRID — Spain's second-largest bank BBVA announced Thursday a hostile takeover bid for smaller rival Banco Sabadell, a move that would create a European giant but was swiftly condemned by the government.

BBVA's new bid came three days after Sabadell's board of directors rejected a merger proposal, saying it was "not in the best interest" of the bank.

The takeover proposal values Sabadell, Spain's fourth-largest banking group in terms of capitalisation, at nearly 11.5 billion euros ($12.3 billion).

"The operation will create one of the best banks in Europe," BBVA said in a statement.

The takeover would be carried out under same conditions as the initial approach — an exchange of one new BBVA share for every 4.83 Sabadell shares, a 30 per cent premium over the April 29 closing price of both banks, BBVA said.

"We are presenting to Banco Sabadell's shareholders an extraordinarily attractive offer to create a bank with greater scale in one of our most important markets," BBVA Chair Carlos Torres Vila said in the statement.

"Together we will have a greater positive impact in the geographies where we operate, with an additional EUR5 billion loan capacity per year in Spain," he said ahead of a press conference later in the day.

A takeover would create a banking powerhouse capable of competing with Santander — Spain's leading bank — as well as with European giants such as HSBC and BNP Paribas.

But Prime Minister Pedro Sanchez's leftist government swifty came out against the takeover attempt, as did the regional government of Catalonia where Sabadell was born and where it has a strong presence.

"This hostile takeover bid by BBVA is an operation contrary to the interests of our country. It would destroy many jobs, cause financial exclusion and more oligopoly," Labour Minister Yolanda Diaz wrote on the X social media platform.

The head of the regional government of Catalonia, Pere Aragones, echoed these concerns, telling Spanish public television the takoever would "affect many jobs in Catalonia".

Aragones is facing a regional election in Catalonia on Sunday, with polls showing he is trailing.

BBVA, which also has operations in Mexico, Argentina and Turkey, is Spain's second-largest banking group in terms of capitalisation and has 74.1 million customers. 

Sabadell operates in 14 countries and has nearly 20 million customers.

The bank had said on Monday that the initial offer "significantly undervalues the potential of Banco Sabadell and its standalone growth prospects".

It added that it was "highly confident in Banco Sabadell's growth strategy and its financial targets". 

Sabadell also pointed to the recent "decline and volatility in the BBVA share price" which reflected "the uncertainty around the value of the proposal". 

BBVA then informed Sabadell in a letter that it had "no room" to improve its offer, which it considered generous.

The two banks had initially announced a plan to merge in November 2020 with the aim of better weathering the economic crisis triggered by the COVID-19 pandemic. 

But it was scrapped just 10 days later, with Sabadell saying that BBVA's offer did not reflect the real value of its business.

In the ensuing months, Sabadell undertook a major restructuring plan to slash costs that resulted in 1,800 redundancies, with BBVA going through a similar process, shedding 3,000 jobs.

Both have since recovered as has the wider Spanish banking sector which posted record profits in recent months, despite an exceptional windfall tax imposed by Spain's left-wing government to help households cope with soaring consumer prices.

BBVA posted a 19 per cent rise in first-quarter net profits to 2.2 billion euros ($2.3 billion). 

Sabadell recorded first-quarter net profits of 308 million euros, its highest ever quarterly figure, up 50 per cent from a year ago.

Spain's banking sector underwent a first wave of consolidation during the 2008 financial crisis, with the collapse of provincial savings banks which were absorbed by the bigger players. 

It underwent further consolidation in 2021 when Caixabank took over Bankia, creating Spain's third largest banking group, which was followed by Unicaja's acquisition of Liberbank creating Spain's fifth biggest domestic lender.