Business

BAGHDAD — Iraq's new finance minister was in Saudi Arabia on Saturday seeking emergency funds to stave off an impending financial crisis brought on by collapsing oil prices. 

      In his first trip abroad since becoming minister, Ali Allawi met the Saudi finance, energy and foreign ministers in Riyadh on Friday, Iraqi state media reported.

      In an interview with state television before his departure, Allawi said his priority would be to secure funds to plug gaps in Iraq's budget. 

      "Iraq is in need of immediate monetary support so that the government can fulfill its obligations towards its employees," he said.

      Iraq is facing a liquidity crisis following the collapse of crude oil prices from more than $50 per barrel last year to around $20 per barrel in recent months.

      That has prompted fears about the government's ability to pay salaries to some four million state workers, as well as pensions and welfare to another four million people. 

      The government budgeted almost $4 billion a month for public salaries in 2020, but it only earned $1.4 billion in April by selling crude oil -- virtually the only way authorities can fund official expenditures. 

      Prime Minister Mustafa Kadhemi last week pledged that May salaries would be paid as usual, with officials telling AFP they would likely have to resort to internal borrowing. 

      Ahead of Allawi's trip, an Iraqi government source told AFP the minister would also travel to Kuwait and the United Arab Emirates "to gather financial support for Iraq".

      Kadhemi is also likely to visit the Gulf, the official said.

      The prime minister took office in early May after months of political deadlock and is known to be a personal friend of Saudi Crown Prince Mohammed Bin Salman. 

      His appointment was welcomed by the United States, which swiftly granted Iraq a 120-day extension on a waiver allowing it to import Iranian gas to feed its worn-out power grid.

      Washington has insisted that Iraq wean off Iranian energy and partner with American or Gulf companies to stand up its overstretched electricity sector.

      Last year, Iraq signed a landmark deal with the six-nation Gulf Cooperation Council (GCC) for a transmission line to import 500 megawatts of electricity to its grid this year.

      The 300-kilometre (200-mile) line would run from Kuwait to Iraq's southern port of Faw and be financed by the GCC -- Kuwait, Saudi Arabia, the UAE, Qatar, Oman and Bahrain --  according to the electricity ministry.

      A second Iraqi official told AFP that the previous cabinet had considered asking Kuwait to accept a delay in the monthly reparations payments it makes to compensate for Saddam Hussein's invasion of the Gulf State in 1991. 

      "We need as much liquidity as we can get for salaries," that official said. 

KUWAIT CITY — Kuwait and Saudi Arabia are to suspend oil production from the neutral zone they share in June as part of cuts they agreed to shore up prices, a Kuwaiti official said. 

      The oil cartel of the Organisation of the Petroleum Exporting countries (OPEC) to which both countries belong struck a deal with non-OPEC producers, led by Russia, in April to cut output by a record 9.7 million barrels per day after crude prices plummeted to a two-decade low.

      Last week, Saudi Arabia -- the world's biggest oil exporter -- pledged to cut an additional one million bpd beyond its agreed quota in June in a bid to reduce excess supply.

      The United Arab Emirates and Kuwait followed suit with pledges of additional cuts of 100,000 bpd and 60,000 bpd respectively. 

      In the neutral zone, Kuwait and Saudi Arabia decided to shut down the offshore Khafji oilfield for one month starting June 1, acting head of Kuwait Oil Gulf Co. Abdullah Al-Sumaiti told the official KUNA news agency on Wednesday.

      Production at Khafji had partially resumed in March following a five-year halt due to a dispute between the two countries.

      There is currently no producution at the onshore Wafra field.

      The neutral zone, which is shared equally between Kuwait and Saudi Arabia, produced 500,000 bpd before production was halted in late 2015.

      The two countries resolved their row with the signing of a new border agreement in December last year.

      Khafji produced some 300,000 bpd before the stoppage five years ago but it had not recovered full output. In early April, Kuwait exported the first one million barrels of crude from the field after resumption.

BEIRUT — A Lebanese prosecutor on Thursday charged a bank manager and money changers with manipulating the exchange rate and money laundering in an ongoing currency crisis probe, official media and judicial sources said.

      Lebanon is in the midst of its worst economic crunch in decades, compounded by a coronavirus lockdown.

      Banks have gradually stopped all dollar withdrawals in recent months, and the local currency has plummeted from 1,507 to more than 4,000 pounds to the dollar on the black market.

      "Financial prosecutor Ali Ibrahim charged the deputy head of the money changers' union Elie S., as well as a number of senior money changers... and a bank employee, with the crimes of violating the money changing law and money laundering", among other charges, the National News Agency said.

      Their cases have been referred to an investigative judge, it said.

      Judicial sources told AFP nine people in total faced the same charges, also including "manipulating the exchange rate".

      Among them were a branch manager at the Societe Generale de Banque au Liban (SGBL) bank accused of supplying dollars to money changers, and an employee at a money transfer company over the alleged channelling of funds abroad, the sources said.

      Lebanon has detained dozens of foreign exchange office employees in recent weeks over the fast depreciating pound, including the head of the money changers' union Mahmoud Mrad at the start of the month.

      The investigation has also seen the first charges against a senior central bank employee in the case.

      On Monday, the director of monetary operations at the central bank, Mazen Hamdane, was charged with "manipulating the national currency and breaching the pound's stability through directly buying dollars from money changers", a judicial source said.

      Late last week, the central bank issued a statement denying it was behind "any manipulation in the money changing market".

LONDON — British inflation hit a near four-year low in April as oil prices crashed, official data showed on Wednesday, with the rate set to slide further as the coronavirus slashes prices generally.

      The Consumer Prices Index (CPI) annual rate slumped to 0.8 per cent last month from 1.5 per cent in March, the Office for National Statistics said in a statement.

      Analysts' consensus forecast had been for a slide to 0.9 per cent.

      "The fall in the headline rate of CPI inflation in April to its lowest level since August 2016 primarily was due to a 0.6 percentage-point reduction in the contribution from energy prices," noted Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

      He added that inflation was set to hit zero by the summer as "retailers are planning further large price cuts".

      While Britain's government has eased its lockdown, the bulk of shops remain shut as the country's official death toll from COVID-19 reached at least 41,000, second only to the United States.

      Meanwhile, world oil prices have plummeted during the crisis on eroding demand for crude, pulling down prices of petrol and jet fuel.

      "It's widely accepted that the pandemic is a profoundly deflationary shock to the global economy," Neil Wilson, chief market analyst at trading group Markets.com, said following Wednesday's data.

      "No surprise then that UK consumer price inflation" tanked in April.

DUBAI — The Investment Corporation of Dubai (ICD) reported on Wednesday a 16.9 per cent rise in 2019 profit, but anticipated "significant disruptions" ahead due to the coronavirus pandemic. 

      The emirate's investment arm, which holds major stakes in a highly diversified portfolio, said it posted a 25 billion dirham ($6.8 billion) net profit compared to $5.8 billion in 2018.

      Chaired by Sheikh Mohammed Bin Rashid Al Maktoum, UAE vice president and ruler of Dubai, ICD owns giant firms like Emirates Airline, the largest in the Middle East, Emaar Properties, the region's biggest real estate firm, and UAE's second largest lender, Emirates NBD bank.

      It said its revenues last year dropped by 1.9 per cent year-on-year to $62 billion over a decline in income from the energy and transport sectors.

      "In 2019, ICD produced a very solid performance given the considerable challenges faced by the global economy and the effect that these have had on our businesses," CEO Mohammed Ibrahim Al Shaibani said.

      "In 2020, with the significant disruptions arising in the wake of the COVID-19 crisis, we are focused on adjusting our operations to preserve their ability to operate competitively when the health crisis subsides," he said.

      Unlike in the rest of the Gulf, oil income is not a dominant factor and makes up just 6.0 per cent of Dubai's diversified economy which relies heavily on tourism, real estate and trade.

      ICD has wide-ranging investments in the financial services, transport, energy and industry, real estate and construction, hospitality and other sectors.

      Last year, the firm's assets rose to a record $305 billion from $240 billion in 2018.

PARIS — Automakers Renault, Nissan and Mitsubishi may unveil next week a new strategic plan to boost synergies and repair their troubled alliance as the coronavirus pandemic lashes the industry.

      The three announced on Tuesday they would hold on May 27 "a joint press conference regarding the progress in Alliance activities."

      The three announced in January they planned to deepen cooperation as concerns mounted their alliance would split apart, and they could unveil which companies will take the lead in certain technologies or regions in order to cut costs.

      The more than 20-year partnership between Nissan and Renault, based on cross-shareholdings without a joint structure, was built by Carlos Ghosn who held senior roles in both companies.

      Ghosn turned around Nissan's fortunes and then helped build the world's largest automotive group with the addition of Mitsubishi.

      But the alliance was pushed to the brink following Ghosn's shock arrest in Tokyo in November 2018 on charges of financial misconduct, including under-reporting millions of dollars in salary.

      The fortunes of all three automakers flagged even before the coronavirus pandemic, which has caused sales to plunge as governments forced citizens to stay at home to slow the spread of the virus.

      The day following the announcement, Nissan plans to unveil restructuring measures along with results for its 2019-2020 fiscal year that are expected to show the automaker suffered a loss.

      Then it is Renault's turn on Friday, with the automaker having already said in February it aimed to achieve two billion euros ($2.2 billion) in savings over three years and did not exclude closing factories.

      Renault registered its first loss in more than a decade last year, its credit rating has been downgraded into junk territory by Standard and Poor's, and it is in line to receive a five billion euro loan backed by the French state to help it overcome the crisis.

      Ghosn, who denies the financial misconduct charges, fled to Lebanon after being released from a Japanese jail and is being pursued by both Renault and Nissan on civil charges, while French prosecutors are also looking into whether he wrongly obtained use of the Palace of Versailles for his lavish 2016 wedding.

NEW YORK — Booming demand for groceries and essential items lifted Walmart's first-quarter profits, even as the company struggled during the coronavirus crisis to replenish key items like toilet paper and cleaning supplies, the company said Tuesday.

      "Our supply chain is amongst the most capable in the world, but in this environment we have stretched it," said Walmart CEO Doug McMillon, who estimated that US inventories were down about eight per cent at the end of the period.

      "Job number one in the US is to get back in stock," McMillon said on a conference call with analysts.

      Walmart's e-commerce business surged a staggering 74 per cent in the quarter ending April 30, with home-bound customers opting for grocery delivery at home or for click-and-pickup options at stores. 

      This included an influx of new customers drawn to Walmart's broad product slate, many of whom have become repeat customers, executives said. 

      Shares rose following the results, which topped analyst expectations despite higher costs connected to the COVID-19 crisis such as bonuses for hourly workers.

      Run on bandanas, sewing machines 

      Profits rose 3.9 per cent to $4.0 billion on an 8.6 per cent increase in revenues to $134.6 billion.

      Walmart hired 235,000 workers during the quarter in the United States, the majority on a temporary basis to boost its stores and supply chain, McMillon said.

      Walmart said the COVID-19 crisis led to $900 million in additional costs, including spending to equip staff with safety masks and sneeze guards at checkout stations and to launch or expand programs such as curbside pickup and mail-to-home service for pharmacy sales.

      Chief Financial Officer Brett Biggs expects expenses to be comparable in the second quarter, saying "there's going to be some expenses that carry on probably for some time."

      Some items such as cleaning supplies are still below targeted levels, although the company has replenished in some categories, executives said.

      Prices for meat have also increased due to the temporary shutdown of some US slaughterhouses, although that pressure may ease as the plants are brought back on line.

      After the initial run on household staples, Walmart saw consumers throng to sometimes unlikely items that have taken off in the social distancing era.

      These include adult bicycles for parents to accompany kids on rides; bandanas and sewing machines for homespun face masks; and supplies for working at home, such as office chairs and laptops.

      The company said it was discontinuing Jet.com, which it acquired in 2016 as Walmart was building up its online sales business. The move reflects the "continued strength of the Walmart.com brand," Walmart said. 

      The retail giant joined the large number of publicly-traded companies to withdraw its annual profit forecast, citing "significant uncertainty" on the duration of the COVID-19 crisis, its effect on consumer confidence and the cadence and duration of government emergency payments to consumers.

      Neil Saunders, managing director of GlobalData Retail, said the results compared favourably to those of rival Amazon, which also experienced huge revenue growth, but was hit more significantly by higher costs connected to COVID-19.

      "That Walmart has outperformed Amazon, at least in growth terms, underlines both the deficiencies of Amazon in grocery -- which generated the bulk of sales this quarter -- and Walmart's growing power in the segment," Saunders said. 

      "Having a wide range of fulfilment options, including delivery to home, collection from store -- and by using stores for fulfilment -- allowed Walmart to ramp up capacity in a way that many other players struggled to do."

      Shares rose 2.1 per cent to $130.33 in early trade.

HONG KONG — Stock markets rose on Monday as a further easing of lockdowns around the world offset another round of data highlighting the sharp economic pain being inflicted by the novel coronavirus.

      Traders also looked past a warning from the head of the Federal Reserve that a full recovery would likely not come until next year, and a vaccine would be needed to get things back to normal.

      With infection and death rates falling in some of the worst-hit countries, governments are slowly allowing businesses to re-open and people to venture out again, with top-tier football returning in Germany -- albeit in empty stadiums.

      California's governor said the state was 75 per cent up and running, New York is also lifting the shutters in some regions, and Apple said almost 100 of its stores were now open.

      "With the worst of the pandemic likely behind us, central bank-supported equity markets are unlikely to re-test their lows," said Seema Shah at Principal Global Investors.

      But she added that "while reopening momentum may well carry risk assets a bit higher over the near term, the tepid economic recovery and deep uncertainty over the virus outlook argue against a pivot to more risk-on positioning".

      Tokyo ended 0.5 per cent higher, Hong Kong gained 0.6 per cent and Shanghai closed 0.2 per cent up.

      Sydney jumped more than one per cent, Singapore added 0.9 per cent and Seoul was 0.5 per cent higher, while there were also gains in Wellington, Bangkok and Jakarta.

      But Manila dropped more than one per cent and Mumbai shed almost three per cent after the Indian government extended its lockdown until May 31.

      In early trade, London rose two per cent, Frankfurt jumped 2.2 per cent and Paris climbed 1.8 per cent.

      "Good news for the market and the economy as a whole is that businesses worldwide are reopening, albeit in fits and starts," said AxiCorp's Stephen Innes.

      "While restaurants are opening at minimal capacity and mall traffic remains depressed, traffic congestion is beginning to tick significantly higher, suggesting that people feel confident in leaving their homes.

      "Indeed, this is huge as the global recovery will fall 100 per cent on the back of consumer confidence."

       Short downturn 

      The gains come despite a flurry of downbeat economic data, including Monday's news that Japan had fallen into its first recession since 2015. 

      While the January-March contraction was not as bad as expected, observers warned the current quarter would likely be much worse.

      That followed a warning from Fed boss Jerome Powell that the US economy could "easily" collapse 20-30 per cent this quarter, and unemployment could peak at 20 to 25 per cent -- although he added "it should be a much shorter downturn than you would associate with the 1930s" during the Great Depression.

      "Market reaction to these dire data releases was short lived, suggesting investors are now placing more value on forward looking indicators rather than real economic prints, which we all know have been negatively impacted by containment measures against COVID-19," said Rodrigo Catril at National Australia Bank.

      Still, uncertainty over the economic outlook continues to play in the background, while there are also concerns about brewing tensions between China and the United States, which notched a little higher at the weekend when Washington ramped up sanctions on Huawei by cutting it off from global chipmakers.

      Beijing responded by saying it would take "necessary measures" to protect the company and others.

      OANDA analyst Jeffrey Halley said: "If Washington DC's intent to escalate trade issues has markets nervous, it is being trumped by the increasing pace of lockdown reopenings around the world, and the expected follow-on uptick in economic activity."

      The reopenings continue to boost oil prices, with WTI -- which last month fell below zero -- breaking $30 for the first time since mid-March.

      "There's been a very sharp reaction by US producers in cutting output and that's gone a long way in alleviating the stress on the system," said Daniel Hynes of ANZ, adding he did not see prices going back below $20 unless there was another mass wave of infections.

SHENZHEN, China — Huawei on Monday assailed the latest US move to cut it off from semiconductor suppliers as a "pernicious" attack that will put the Chinese technology giant in "survival" mode and sow chaos in the global technology sector.

      The Commerce Department said on Friday it was tightening sanctions on Huawei -- seen by Washington as a security risk -- to include denying it access to semiconductor designs developed using US software and technology.

      "The decision was arbitrary and pernicious and threatens to undermine the entire (technology) industry worldwide," Huawei said in a statement.

      Huawei has largely weathered an escalating 18-month campaign by the Trump administration to isolate it internationally.

      But it "will inevitably be affected" by the new American salvo, rotating chairman Guo Ping said at an annual summit of technology analysts that Huawei organises at its headquarters in the southern Chinese city of Shenzhen.

      Survival mode 

      "Survival is the key for us now," Guo said, issuing an appeal to Huawei's suppliers and customers worldwide to stand with it.

      He declined to give a detailed forecast of the impact when asked by journalists.

      But the Huawei statement said the US decision "will have a serious impact on a wide number of global industries" by creating uncertainty in the chip sector and technology supply chains.

      US officials said Huawei had been circumventing sanctions by obtaining chips and components that are produced around the world based on American technology.

      Washington last year said it would blacklist Huawei from the US market and from buying crucial American components, though it has extended a series of reprieves to allow US businesses that work with Huawei time to adjust.

      On Friday, it extended this reprieve by another 90 days but said these exceptions are not likely to be extended further.

      Commerce Secretary Wilbur Ross had said that even as Huawei seeks to develop its own components in response to US sanctions, "that effort is still dependent on US technologies."

      US officials accuse Huawei, the world's biggest supplier of telecom network equipment and number two smartphone manufacturer, of stealing American trade secrets and say it could allow Beijing to spy on global telecoms traffic.

      Huawei strenuously denies the charges, saying the United States has never provided any proof of a security threat.

      The sanctions against the company have been a key driver of heightened US-China trade tensions.

      China's Ministry of Commerce on Sunday warned it would take unspecified "necessary measures" to protect Huawei.

      US officials said the new rules would have a 120-day grace period. 

      A senior State Department official said the move would not necessarily deny Huawei access to these products but require a license allowing Washington to keep track of the technology.

       US trying to 'crush' rivals 

      Huawei is poised to become a global leader in the coming advent of fifth-generation, or 5G, wireless networks and Washington has lobbied other countries to shun Huawei gear over potential security risks.

      China's government has poured money into developing home-grown semiconductors -- the building blocks of tech -- but it still lags behind the US, Japan and South Korea, which analysts say is a glaring Achilles heel for Chinese companies like Huawei.

      Huawei said the US was "leveraging its own technological strengths to crush" foreign companies.

      The resulting disruptions to supply chains will ultimately harm US interests, it added.

      Declaring Huawei was "taking the lead" in global tech, Guo suggested that Washington's pressure was fuelled by fear that the United States was falling behind technologically.

      "Any other country or company with more advanced technologies may put US supremacy at risk," he told the industry conference. 

SAN FRANCISCO — Facebook said on Friday it had acquired the animated graphics startup GIPHY and would integrate the company in its Instagram visual social network.

      Terms of the deal were not disclosed, but the news site Axios said the California-based tech giant was paying $400 million.

      GIPHY is a platform and search engine for "stickers" and other products using the graphics interchange format or GIFs.

      "GIPHY, a leader in visual expression and creation, is joining the Facebook company today as part of the Instagram team," Facebook said in a statement.

      "GIPHY makes everyday conversations more entertaining, and so we plan to further integrate their GIF library into Instagram and our other apps so that people can find just the right way to express themselves."

      GIPHY was created in 2013 with a simple goal in mind. That is “to make communication more fun," a blog from the GIPHY team said.

      "That's why we're thrilled to announce that GIPHY has been acquired by Facebook and is joining the team at Instagram.

      "Instagram has revolutionised self-expression. More than one billion people use Instagram to communicate how they're feeling and what they're passionate about -- we can't wait to help those people become even more animated."

      The news comes with social networks seeing usage grow as a result of billions of people sheltering in place due to coronavirus lockdowns.

      At the same time, tech critics have warned about the pandemic boosting the power of top Silicon Valley firms, and some lawmakers have called for a moratorium on mergers and acquisitions involving the large companies.

      Facebook said it has partnered with GIPHY for years and that the company would continue to operate its library.

      "We're looking forward to investing further in its technology and relationships with content," said Instagram vice president of product Vishal Shah.

      "GIFs and stickers give people meaningful and creative ways to express themselves. We see the positivity in how people use GIPHY in our products today, and we know that bringing the GIPHY team's creativity and talent together with ours will only accelerate how people use visual communication to connect with each other."