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NEW YORK — Wall Street stocks rose early on Wednesday ahead of an expected Federal Reserve (Fed) interest rate increase and amid signs Republican congressional leaders were nearing a deal on tax cuts.

The Fed was widely expected to raise the benchmark interest rate and outgoing Fed Chair Janet Yellen was expected to offer clues on the pace future rate hikes at a news conference. Fresh data on Wednesday showed inflation rose above the Fed's target, but that was driven by higher gasoline prices, while other sectors showed signs of weakness.

About 20 minutes into trading the Dow Jones Industrial Average was at 24,558.71, up 0.2 per cent.

The broad-based S&P 500 also gained 0.2 per cent to 2,669.13, while the tech-rich Nasdaq Composite Index advanced 0.4 per cent to 6,892.60.

The Dow and S&P 500 closed at records on Tuesday.

Analysts are watching Washington for updates on how congressional Republican leaders are doing in efforts to meld the House and Senate tax cut bills into a final version that President Donald Trump can sign. 

Republicans are expected to accelerate those efforts after Tuesday's upset election victory in Alabama cut into the party's narrow majority in the Senate. Democrat Doug Jones is expected to be seated in early January, giving an impetus for Republicans to get tax bill to Trump before the end of the year.

The Dow's biggest mover was Caterpillar, which jumped 1.8 per cent following an update that showed solid gains in worldwide machine sales in each of the last three months. November sales rose 26 per cent compared with the year-ago period.

RIYADH — Saudi Arabia decided on Tuesday to hike energy prices while paying compensation to Saudi families, as the world's top oil exporter seeks new revenue sources.

The cabinet, in a session chaired by King Salman, approved plans to "reform" electricity and fuel charges, as part of measures to counter lower oil prices on the world market, the official news agency SPA reported.

In a first, the government also approved cash transfers to some 3.7 million Saudi families, covering 13 million of the country's 20-million population, to compensate them for the hike.

Expatriates working and living in the kingdom have been excluded from the cash transfer programme which will start next week.

The electricity authority has announced minor price increases from early next year.

The energy ministry said new prices for petrol, diesel and aviation fuel will be applied in the first quarter of 2018, but did not give details on the planned increases.

The hikes are the second wave of Saudi subsidy cuts.

The kingdom, which pumps around 10 million barrels per day of oil, has embarked on a series of reforms and price hikes since oil revenues plummeted in mid-2014.

Saudi Arabia has posted huge deficits in the past three fiscal years, totalling over $200 billion, and has withdrawn another $250 billion from its fiscal reserves.

It has also borrowed tens of billions of dollars from the domestic and international markets to finance the shortfall.

The kingdom plans to introduce VAT, at a rate of 5 per cent, for the first time at the start of 2018.

LONDON — Most Asian and European stock markets rose on Monday, tracking fresh records on Wall Street after forecast-busting US jobs data, as investors eyed this week's upcoming Federal Reserve [Fed] meeting.

Bitcoin continued its stratospheric rise after the virtual money began trading on its first major global exchange over the weekend.

European bourses enjoyed slender gains after a broadly positive Asian session, with London up 0.7 per cent, while Frankfurt added 0.2 per cent and Paris advanced 0.1 per cent in midday deals.

Eyes are now on the Fed's last monetary policy meeting of the year, which winds down on Wednesday.

Most analysts expect the central bank's policy-setting Federal Open Market Committee (FOMC) to lift interest rates again, but they will be more interested in what boss Janet Yellen has to say about the timetable for future increases.

"The Fed will no doubt provide markets with a central focus this week, where the FOMC are expected to come good on their promise of three rate hikes for 2017," said IG analyst Joshua Mahony.

"With market expectations for 2018 somewhat up in the air, there is a feeling that investors are hungry for clues as to where things will stand in 12-months' time."

US data on Friday showed 228,000 jobs were created last month and unemployment held at a 17-year low, reinforcing the view that the world's number one economy is in a healthy state.

The reading — mixed with news of a breakthrough in Brexit talks, strong Chinese indicators and aprogress in US tax reform — helped fire a rally in US equities before the weekend, driving the Dow and S&P 500 to all-time highs.

Adding to the upbeat sentiment was an agreement by US lawmakers to keep funding the government to avert a painful shutdown.

The advance helped staunch a sell-off that has hit global markets for most of this month as traders wound down and took profits before the end of the year.

In Asia on Monday, Tokyo ended 0.6-per cent higher as the Nikkei rose for a third straight day, while Hong Kong surged more than 1 per cent and Shanghai added 1 per cent as Chinese traders brushed off lower than expected inflation figures.

Bitcoin surges 

Bitcoin catapulted past $18,000 on a wave of fresh optimism, despite persistent bubble fears.

The unit remains in focus after ticking off multiple records since the start of December.

Trading of the controversial digital currency on a futures contract began on Sunday on the Chicago board options exchange (Cboe) at a price of $15,000.

The move is a milestone for bitcoin, which has previously only been tradable on unregulated exchanges.

Bitcoin was trading at $17,600 per unit for the futures contract expiring on January 17, exceeding the highest value it had reached on alternative non-regulated internet platforms, and even climbed past $18,000.

"The level of volatility the introduction will have is uncertain," said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.

KUWAIT CITY — Kuwaiti Oil Minister Essam Al Marzouk on Sunday said the international crude market is expected to rebalance in the fourth quarter of 2018 after producers extended a deal to curb output.

Speaking on the sidelines of a meeting for the oil ministers of the Organisation of the Arab Petroleum Countries (OAPEC), Marzouk also said oil prices would maintain at “current levels”.

Producers from OPEC and non-OPEC members agreed on November 30 to extend a deal to cut output by 1.8 million barrels per day (bpd) until the end of 2018.

The producing nations aim to reduce an oil supply glut that sent crude prices crashing.

As a result of the curbs, oil prices have doubled since dipping under $30 a barrel in early 2016.

Marzouk said OPEC would hold a crucial meeting in June to “review the production cuts deal... and the possibility of preparing a study to exit the output curbs”.

A Kuwaiti-chaired ministerial committee monitoring the market and compliance of the cuts would hold meetings every two months to assess the situation, the minister said.

Iraqi Oil Minister Jabbar Al Luaibi has said he expects oil prices to remain around $60 a barrel.

He said that Iraq’s production would hit five million bpd in the first quarter of next year.

PARIS () — France’s finance minister unveiled on Friday a decree that would make it the first nation in Europe to allow the trading of some non-listed securities using the blockchain technology that underpins cryptocurrencies.

The decree, presented by Finance Minister Bruno Le Maire to the government, should enter into force by July at the latest and will apply to non-listed financial securities that EU law doesn’t require to be traded via an intermediary, a market worth potentially more than 3 trillion euros.

In particular this includes shares in mutual and hedge funds, negotiable debt securities, and unlisted stocks and bonds.

Blockchain technology debuted in 2009 as a public, encrypted ledger for the digital currency bitcoin.

It has drawn interest from the established financial sector in recent years because of its potential for securely tracking transactions, allowing anyone to get an accurate accounting of money, property or other assets.

Blockchains record transactions as “blocks” that are updated in real time on a digitised ledger that can be read from anywhere and does not have a central recordkeeper. It is considered to be secure as all changes should be made simultaneously among all users.

“The use of this technology will permit fintechs and other financial actors to offer new solutions for exchanging securities, solutions that are faster, cheaper, more transparent and more secure,” Le Maire told journalists.

Fintechs are startups trying to shake up the financial sector via the introduction of new technology.

Le Maire said the decree “is a way of telling firms ‘come do live tests here, in a secure legal framework’”.

Becoming the first in Europe to authorise blockchain trading will increase the attractiveness of Paris for fintechs and encourage innovation, he added.

BEIJING — The International Monetary Fund (IMF) on Thursday warned of brewing risks in China's banking system as it found dozens of crucial lenders needed to beef up their defences against possible financial crises.

The IMF report comes a day after regulators in Beijing drafted new rules to strengthen bank funding, and follows a number of alerts about a ballooning debt problem in the world's number-two economy.

Near the top of the list in the IMF study on the stability of China's financial system is the need for banks to increase their capital to ward off risks from mounting debt.

China has largely relied on debt-fuelled investment and exports to drive its tremendous economic growth, but the fund said this model has reached its limits.

Part of the problem lies in high growth targets, the IMF said, which incentivise local governments to extend credit and protect failing companies.

"We recommend the authorities to de-emphasise the GDP [growth]," Ratna Sahay, deputy director of the IMF's Monetary and Capital Markets Department, said during a news conference.
China should "incite local governments to strengthen supervision on risks", she added.

Abundant credit allows local governments to hit high growth figures but now each extra dollar of debt is producing diminishing returns.

The ballooning debt — estimated at 234 per cent of gross domestic product by the IMF — adds financial risk and may weigh on China's future economic growth.

"Credit growth is an important indicator of future financial distress, because lending standards often fall in the rush to make more loans," IMF experts warned in a blog post. 

Zombie companies 

The IMF’s experts carried out stress tests on dozens of banks. 

China's big four banks had adequate capital but "large, medium, and city-commercial banks appear vulnerable", the IMF said.

It added that 27 out of the 33 banks tested — accounting for three-quarters of China's banking system assets — were "undercapitalised relative to at least one of the minimum requirements".

While the country's banking system meets the requirements of global banking rules known as Basel III, "current circumstances warrant a targeted increase in capital", the report said.

"This would create a buffer to absorb potential losses that can be expected during the economic transition as credit is tightened and implicit guarantees are removed."

 China's central bank said it disagreed with "a few descriptions and views" in the report.

"The descriptions of the stress testing did not fully reflect the outcomes of the test," the People's Bank of China said on its website.

The China Banking Regulatory Commission on Wednesday released a draft of fresh rules to tackle related issues.

The latest regulations call for new indicators to monitor commercial banks' liquidity and set related requirements. 

They will "strengthen management of liquidity risk for banks and protect the safety and stability of the banking system", the commission said.

In some cases local banks face pressure to lend to politically important companies, as local governments aim to maintain high employment even if that means cash-bleeding enterprises continue to operate.

These loss-making firms, often state-owned, have come to be known as zombie companies, and banks and investors fund many of them as if they will not be allowed to fail.

"Implicit guarantees and the government's desire to support growth encourage these firms to invest excessively, raising already-high leverage while weakening performance on profitability and debt service capacity," the fund wrote in a recent report.

In October, it warned China's dependence on debt was growing at a "dangerous pace" and needed to act to avert a crisis.

That came weeks after the Bank for International Settlements — dubbed the bank of central banks — said the banking sector could be facing an imminent blowout, raising worries about its effect on the world economy.

The IMF's latest assessment said financial engineering helped banks obscure the potential losses.

"Implicit guarantees to SOEs [state-owned enterprises] need to be removed carefully and gradually," Sahay said. 

"It would be wise to have a high-level committee to monitor the risks across all sectors."

PARIS — Several countries protested on Wednesday against their inclusion on a European Union tax haven blacklist, with some calling the move “unfair” and others accusing Brussels of “meddling”.

The EU on Tuesday unveiled a list containing 17 non-EU states a year on from the leak of the “Panama Papers” — a massive amount of data from a prominent Panamanian law firm showing how the world’s wealthy stash assets.

South Korea, Macau, Mongolia, Tunisia and Namibia on Wednesday joined Panama in condemning the EU move.

Panama protested late Tuesday by recalling its ambassador to the EU for consultations with President Juan Carlos Varela, slamming the measure as “unfair” while economy and finance minister, Dulcidio De La Guardia, tweeted his rejection of an “arbitrary and discriminatory” decision.

South Korea’s finance ministry also reacted angrily after it too was placed on the list.

“The EU said that a number of tax subsidy measures offered by the South Korean government on foreign investments, including those at our free economic zone, could be considered ‘preferential tax regime’.”

“But the decision by the EU not only runs counter to international standards including the OECD standards, as well as international agreement but also may infringe upon tax sovereignty,” said the ministry.

The ministry insisted that South Korea had “demonstrated a high level of transparency in taxation operations” hence would “actively respond” to the EU move.

Misunderstanding 

Mongolia’s finance minister dubbed his country’s inclusion as a “misunderstanding”.

“This is a misunderstanding. We are not on an offshore list,” Khurelbaatar Chimed told AFP. 

He said his country had only been named because “it is difficult to have tax-related information and data” after Brussels contacted his ministry in June for information about European residents with bank accounts or investments there. 

“The EU decision showed us that we need to... build a transparent tax system and to connect with other countries.” Gambling hub Macau also objected to its designation, saying the decision is “one-sided and does not reflect the real situation”.

A government statement said the semi-autonomous southern Chinese city had been “actively cooperating” with the international community including the EU to combat cross-border tax evasion.

 ‘Meddling’ 

A Tunisian official told AFP the country was included notably over tax advantages for exporting companies based on its territory.

The official stressed that “Tunisia refuses all meddling in its fiscal policy” and stressed its determination to maintain the advantageous tax regime for such firms.

Tunisia’s bosses federation Utica expressed “surprise” at the EU decision it termed “dangerous” while urging dialogue with Brussels to resolve the issue.

Namibia, meanwhile, called its inclusion on the list “unjust, prejudiced, partisan, discriminatory and biased”, according to Finance Minister Calle Schlettwein.

“Namibia is clearly, by any objective criteria, not a tax haven,” he said.

No sanctions are in the offing for those countries named and shamed, though some EU members, including France, want tough measures including possibly an exclusion from World Bank or EU funding.

GENEVA, Switzerland  — The International Air Transport Association (IATA) forecasts global aviation net profit to increase by around 11 per cent to reach $38.4 billion in 2018, Brian Pearce, chief IATA economist said on Tuesday.  

Speaking to journalists at IATA Global Media Day, Pearce attributed the increase to solid and strong demand, efficiency and reduced interest payments.   

This will make 2018 the fourth consecutive year of sustainable profit, according to IATA.

Airlines across the world, with the exception of carriers in Africa, are expected to generate profit in 2018. The Middle East is no exception; its carriers are forecast to see net profit improve to $600 million — up from $300 million this year.

In 2018, demand on Mideast airlines is expected to grow by 7 per cent, “outpacing announced capacity expansion of 4.9 per cent”, yet it is “the slowest growth since 2002”, according to the association media sources. 

Challenges faced by the region’s carriers are low oil revenues, regional conflicts, crowded air space, travel restrictions to the US and competition from the “super connector”, Turkish Airlines, according to IATA; however, positive momentum is expected to continue into 2018.

North American airlines are expected to have the strongest financial performance next year with a net profit of $16.4 billion (up from $15.6 this year).  

For Europe, profit is forecast to reach $11.5 billion, up from $9.8 billion this year while the sector profit for the Asia-Pacific region will amount to $9 billion, compared to $8.3 billion this year. 

Latin America will also see higher profit, envisaged at $900 million up from $799 million in 2017. 

“These are good times for the global air transport industry. Safety performance is solid. We have a clear strategy that is delivering results on environmental performance. More people than ever are travelling. The demand for air cargo is at its strongest level in over a decade. 

More routes are being opened. Airlines are achieving sustainable levels of profitability,” said IATA’s Director General/CEO Alexandre de Juniac.

But to stay profitable, airlines need to stay safe, so safety was stressed at this year’s IATA media day.

It “is our top priority”, said de Juniac, stressing that “aviation is still the safest way to travel long distances”.

With 4 billion people and 60 million tonnes of cargo expected to be flown this year –activities critical to the global economy — it is no wonder that a high premium is placed on safety.

BEIJING — Visiting Canadian Prime Minister Justin Trudeau and Chinese Premier Li Keqiang signed three trade agreements on Monday as Ottawa tries to diversify commercial ties amid tough North America Free Trade Agreement (NAFTA) negotiations with Washington.

At a ceremony in Beijing’s Great Hall of the People, the two leaders signed an action plan on energy cooperation as well as two memoranda of understanding on food products and a “Canada learning initiative”. 

The details of the agreements are unclear.

The two sides also agreed that Canadian beef and pork will have greater access to the Chinese market and will continue to work on new standards for Canadian exports of canola to China.

“Canada is and always has been a trading nation, but the landscape of trade is shifting and we need to adjust,” Trudeau told reporters after the signing ceremony. 

“China will soon be the largest market in the world. It’s home to one billion potential customers for the high-quality goods and services that Canadians deliver every day.”

Li told Trudeau it was rare for China to have such a “close, intimate relationship” with another nation. 

“China and Canada are entering ... a golden age in our relationship. We have a lot to offer each other. We are ready for closer cooperation,” Li told reporters. 

The premier visited Ottawa in September last year, when the two sides agreed to double bilateral commerce by 2025.

During his December 3-7 official visit, Trudeau will meet government and business leaders as part of Canada’s push to diversify its trade, the bulk of which is currently with the United States.

Trudeau has said he also plans full and frank discussions on “issues like good governance, human rights, and the rule of law”.

The visit to China is Trudeau’s second since he came to power two years ago, and comes as trilateral talks with the United States and Mexico to revamp the North American Free Trade Agreement appear to be headed towards deadlock.

Canada and Mexico staunchly oppose US proposals for a NAFTA sunset clause, minimum US content in car parts and nixing of the pact’s trade dispute mechanism.

The US has adopted a more protectionist tone under President Donald Trump and his “America First” policy.

Beijing, meanwhile, has openly courted increased trade with Canada. Li said the two countries would continue exploratory talks and feasibility studies on a free trade agreement. 

China is currently Canada’s second-largest trading partner, far behind the United States, with annual bilateral trade worth more than Can$85 billion ($67 billion).

During the visit to Beijing and Guangzhou, Trudeau will also meet President Xi Jinping and Zhang Dejiang, chairman of the Standing Committee of the National People’s Congress, or legislature.

The prime minister is popular in China, where citizens have affectionately nicknamed him “Little potato”, as his surname sounds similar to the word “potato” in Mandarin. 

His father, who established diplomatic ties with China in 1970, was named “senior potato”. 

Internet users on domestic social media platforms focused on Trudeau’s appearance, with one commentator hailing him as “the most handsome foreign leader”.