Business

DANANG, Vietnam — Countries in the Trans-Pacific Partnership (TPP) trade deal have agreed on the core elements to move ahead without the United States, officials said on Saturday, after last-minute resistance from Canada raised new doubts about its survival.

Taking the agreement forward is a boost for the principle of multilateral trade pacts after US President Donald Trump ditched the TPP early this year in favour of an “America First” policy he believes would save US jobs.

Talks — often heated — have been held on the sidelines of an Asia-Pacific Economic Cooperation (APEC) summit in the Vietnamese resort of Danang, where Trump and other leaders held their main meeting on Saturday.

“We have overcome the hardest part,” Vietnam’s trade minister, Tran Tuan Anh, told a news conference. 

The agreement, which still needs to be finalised, would now be called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership he said. 

Japanese Economy Minister Toshimitsu Motegi said he hoped that moving ahead with the deal would be a step towards bringing back the United States.

Partly to counter China’s growing dominance in Asia, Japan had been lobbying hard for the TPP pact, which aims to eliminate tariffs on industrial and farm products across the 11-nation bloc whose trade totalled $356 billion last year.

Some 20 provisions of the original agreement were suspended. Those included some related to protecting labour rights and the environment, although most were related to intellectual property — one of the main sticking points after the US withdrawal.

“The overall impact on most firms is quite modest,” said Deborah Elms of the Asian Trade Centre think tank, adding that the new version was “essentially identical to the original document”.

Any kind of deal looked doubtful on Friday, when a summit of TPP leaders was called off after Canadian Prime Minister Justin Trudeau did not attend. Canada’s trade minister later blamed Trudeau’s absence on “a misunderstanding about the schedule”.

Canada, which has the second-biggest economy among remaining TPP countries after Japan, had said it wanted to ensure an agreement that would protect jobs.

Canada’s position has been further complicated by the fact that it is simultaneously renegotiating the North American Free Trade Agreement with the Trump administration.

In a speech in Danang, Trump sent out a strong message that he was only interested in bilateral deals in Asia that would not disadvantage the United States.

Chinese President Xi Jinping used the same forum to stress multilateralism and said globalisation was an irreversible trend.

The APEC leaders met in closed sessions on Saturday, pausing for the traditional “family photograph”, taken above the South China Sea.

At the start of the meeting, Vietnamese President Tran Dai Quang noted APEC’s success in removing barriers to trade — as well as the new uncertainty in the world.

“We have witnessed changes more rapid and complex than we expect,” he said in opening remarks.

APEC trade and foreign ministers released a joint statement on Saturday, three days later than planned because of wrangling over customary language the United States wanted to change.

The statement still refers to free and open trade, but it also refers to fair trade and to members “improving adherence to rules agreed upon”. 

A reference to strengthening the multilateral trading system was dropped. The ministers also said they would work to improve the functioning of the World Trade Organisation — which Trump criticised in Friday’s speech.

LONDON — The dollar slipped to its lowest this month against the yen on Thursday, pressured by talk of possible delays to US President Donald Trump’s tax reform plans as well as a risk-off mood. 

The greenback had hit its highest levels in eight months against the Japanese currency at the start of the week, boosted by strong risk appetite across markets, but has since fallen back by about 1.3 per cent.

It fell as low as 113.25 yen on Thursday after a sudden fall in Japanese equities from multi-decade peaks dampened risk sentiment in Asian trade — a mood that continued into London trading hours, with European stocks also falling. 

The yen is a low-yielding currency often used to fund investment in higher-yielding currencies and assets when risk sentiment is positive.

The dollar was also 0.3 per cent down against a basket of major currencies. 

The euro climbed to a six-day high of $1.1645, having dropped as low as $1.1553 on Tuesday, its weakest since July 20.

“The dollar is running out of steam. There’s nothing to drive it higher,” said BMO Capital Markets Currency Strategist Stephen Gallo in London. 

The “Trumpflation trade” — bets that Trump’s policies would boost growth and inflation, meaning a faster pace of US interest rate increases — had driven the dollar to 14-year highs after his election and 10-year US Treasury yields to their highest since 2014.

But they and the dollar have since fallen back. 

A US Senate tax-cut bill, differing from one in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican push for a tax overhaul.

Any potential delay in the implementation of tax cuts, or the possibility of proposed reforms being watered down, would tend to work against the dollar, analysts said.

“Disappointment over the tax reforms is driving the dollar lower. There is a lack of momentum behind the recent moves and the euro’s outlook remains bright as global money managers remain underweight in the single currency,” said Marc Ostwald, a strategist at ADM Investor Services International in London. 

The New Zealand dollar touched a two-week high after comments from the country’s central bank on the inflation outlook were taken as hawkish as it kept interest rates unchanged as expected.

The currency rose as high as $0.6977, its strongest since October 24, before dipping to trade flat on the day at $0.6969.

AMMAN — It is not quite often that Isuzu changes official distributers, but when it does so it seems to yield a big difference as it is the case in Jordan.  

The market share of Isuzu, the Japanese commercial vehicle manufacturer, has risen dramatically in Jordan since a new dealership was installed two years ago, Isuzu Motors International Vice President Waleed Noubani said.

Interviewed by The Jordan Times in Tokyo, Japan, Noubani said restructuring the company’s operations in the country after “some difficulties”, and having assigned Qudra Automotive as a new sole distributor in the Kingdom, its market share has doubled from 8 per cent in less than two years.

Currently hovering between “second and third in market share”, Isuzu’s “target is to be number one“, according to Noubani. 

With Isuzu’s support and Qudra’s market activity, he said he expects Isuzu to “take a leading position in Jordan… by the end of 2018, or early 2019”.

The region accounts for 17 per cent of Isuzu’s global business, featuring two knock-down kit assembly facilities for the Saudi and Egyptian markets, however, Noubani believes that is still further scope for expansion in the Middle East, and Syria, in particular. 

Hopeful that a resolution to the Syrian conflict comes through “within the next 12 months”, Noubani said “Syria is a big country, and needs huge infrastructure investments, so we see a lot of growth coming our way,” adding that he is confident that the opening of Jordanian borders with Syria and Iraq will help the Jordanian economy.

Noubani also highlighted Isuzu’s drive towards greater efficiency, including Compressed Natural Gas powered vehicles (CNG) and hybrid models, both already available in Japan. “Commercial vehicles will need more time than passenger cars in terms of electrification [and that] due to the size and power, these batteries would need to haul over 10-tonnes,” he elaborated. 

Producing less pollutants than petrol- and diesel-powered vehicles CNG trucks are already in service in Japan, with plans afoot to introduce such vehicles to the UAE which is “the leader in CNG infrastructure” in the region with CNG available more regularly at filling stations. 

Asked whether Isuzu will be looking to introduce CNG to other Middle East countries, Noubani said that Isuzu will “start lobbying government officials, country by country. We’ve already started with the UAE, and other countries will follow shortly.”

Noubani said that Isuzu has been consulting local dealers about what they want to introduce and are “working hand-in-hand with them, and… are also relying on our local dealers in each country to lobby government officials to start building infrastructure”. 

In the case of Jordan, where hybrid and electric vehicles already benefit from government incentives in terms of duties and partnerships, he underscored Qudra’s position, adding that “they have over 27 per cent market share in the automotive segment. as a whole,” as part of a wider automotive import network.

In addition to CNG, hybrids and an electric prototype, Isuzu offers an Eco-drive seminar to fleet operator drivers. 

CAIRO — As Egypt’s mobile operators thrive, state-owned Telecom Egypt is entering the market in an effort to boost state revenues.

In a country with more mobile phone subscriptions than residents, Egypt’s only fixed-line operator is hoping to get in on the action with its new mobile service, WE.

But some established players say they fear the state-owned firm, which already owns 45 per cent of top existing operator Vodafone Egypt, will enjoy unfair advantages.

Egypt, with around 96 million residents, had nearly 100 million mobile subscriptions in 2016, according to a July report by the National Telecom Regulatory Authority.

That compares with fewer than 10 million subscriptions for land lines and DSL phone line-based internet services.

As the mobile sector booms, Telecom Egypt’s entry into the market aims to introduce competition, the NTRA said in a report.

That could upgrade “the quality of services provided... at more affordable prices”, it said, adding that it hoped to boost state revenues and create new jobs.

Within a month of its September launch, WE has attracted a million customers. But its polished advertisements may not be the only reason for its success.

It entered the sector at an opportune time, the same month as the official launch of 4G mobile internet services, repeatedly delayed by the government.

Also in September, the NTRA announced it would enforce a 30 per cent increase in prices for mobile services — from which Telecom Egypt’s offering would be exempt.

While the price hike was sudden, it met repeated demands by Vodafone, Orange, and Etisalat, which have objected to being forced to freeze prices despite 30 per cent inflation as the Egyptian pound dived against the dollar following its flotation in November 2016.

Temporary privileges

But some fear Telecom Egypt’s exemption from the hike may be part of a broader pattern of unfair privileges.

Orange Egypt has invested some 15 billion pounds (around 730 million euros, $850 million) in its 4G services.

“It is a big responsibility for the government to ensure that competition regulations are implemented in an equitable manner,” said Jean-Marc Harion, Orange Egypt’s chief executive officer.

Such rules “have not always been respected in the field of telecoms”, he said.

But Telecom Egypt says its entry into the mobile market was inevitable and should not be surprising in the age of smart phones.

“It’s a matter of life and death,” said CEO Ahmed El Beheiry.

“Over time people will give up on fixed internet and move to the mobile.”

Critics have argued that Telecom Egypt’s ownership of 45 per cent of Vodafone Egypt constitutes a conflict of interest.

But Beheiry denied any government favouritism towards his firm, adding that its rivals are anything but “weak, small players”. 

“There is no more difficult terrain than this in which we are entering,” he said.

Telecom Egypt argues that its countrywide landline and DSL coverage is a major asset.

But analyst Ahmed Adel of the investment bank Beltone Financial said the firm’s landline monopoly constitutes “a big challenge because of the number of complaints over the quality of these fixed services”.

Telecom Egypt currently relies on Etisalat Misr’s mobile network as it develops its own.

The company will eventually have to show “its ability to acquire a market share in the absence of any operational advantage”, he added.

Mostafa Abdel-Wahed, regulator NTRA’s executive chairman, did not respond to repeated requests for an interview.

In an emailed response to questions, the NTRA said “the entry of the fourth mobile operator helps to increase competition between companies to benefit the citizens in terms of quality of services and prices”.

It added that it “treats all companies equally without distinction”.

AMMAN — His Majesty King Abdullah met on Tuesday with a delegation, comprising executives of Japan’s Toshiba Corporation, specialised in manufacturing flash memory chips, according to the Jordan News Agency, Petra. 

The visiting delegation is participating in the World Science Forum 2017, held at the shores of the Dead Sea. 

At the meeting, the company’s representatives expressed their business intention to extend training to promising and qualified Jordanians as they reviewed the Kingdom’s recourses, including human resources and favourable investment environment in the field of information and communications technology (ICT), transforming the country into a regional ICT hub. 

The meeting also addressed the Kingdom’s plans to expand the sector. Yesterday’s meeting was attended by the King’s Office Director Jaafar Hassan and Japan’s Ambassador to Jordan Shuichi Sakurai. 

The World Science Forum 2017, which will run through November 11, began on Monday under the title “Science for Peace”. The five-day event, which is the largest scientific event in the region, held at the King Hussein Bin Talal Convention Centre at the Dead Sea, seeks to address the challenges of growth, stability and world peace. The forum was first established in Hungary in 2003, in cooperation with UNESCO.  

BRUSSELS — The European Central Bank (ECB) fears that international banks based in London are overly relying on “empty shell” units to continue working in Europe after Brexit, while keeping key services in the UK capital, sources said on Monday.

The ECB’s chief supervisor Daniele Nouy voiced her concern to a meeting of eurozone ministers in Brussels, with the effects of Britain’s divorce from the European Union becoming a major worry.

According to sources familiar with the matter, Nouy sounded an alarm that global banks are setting up headquarters on the European continent in name only, while keeping most operations still standing in London. 

This is a huge issue as the UK tries to hold onto the dominance of its London financial hub despite Brexit, all while Frankfurt, Paris and Dublin strive to take advantage of Britain’s euro-divorce.

London, for its part, is fretting while big banks sound out regulators in different EU nations as they look for a new base to do business in Europe once Britain leaves.

If Britain goes ahead with a so-called “hard Brexit”, in which the UK loses all special ties to the EU, banks based in London will lose the “passports” that allow them to do business out of the UK across the remaining 27 members of the bloc.

Instead, to continue operating in Europe, financial firms will have to set up new business headquarters in EU countries.

Frankfurt has already claimed some major financial players as a post-Brexit headquarters, including US investment bank Morgan Stanley and Japanese giants Sumitomo Mitsui Financial Group, Daiwa Securities and Nomura. 

Goldman Sachs Chief Executive Lloyd Blankfein last month caused a firestorm on twitter, touting Frankfurt’s “great” weather among other attributes, but stopped short of naming the German city as a post-Brexit headquarters.

Some 10,000 UK financial services jobs could move abroad on the first day of Brexit, the Bank of England predicted on Wednesday.

DUBAI — A purge of Saudi Arabia’s political and business elites briefly dragged down the kingdom’s stock market on Sunday but prices recovered to close higher as some investors bet the crackdown could bolster reforms in the long run.

The size of the purge — 11 princes, four ministers and tens of former ministers were detained by a newly created anti-corruption committee headed by Crown Prince Mohammed Bin Salman — raised questions about the stability and predictability of the Saudi government. 

For foreigners, a major shock was the detention of billionaire Prince Al Waleed Bin Talal, who as a big investor in top Western companies such as Citigroup is known as the international face of Saudi business.

Local investors, meanwhile, worried about whether a sustained investigation into corruption could turn up scandals in the kingdom’s opaque business world, forcing people implicated to sell off their equity holdings.

But many bankers and analysts saw the purge, which replaced the head of the National Guard, as a power grab by Prince Mohammed, designed to remove any remaining obstacles to his authority and assure his eventual succession to the throne. This, they said, could help the economy by making it easier for Prince Mohammed to pursue radical reforms that include slashing the state budget deficit, putting more women into employment, lifting a ban on women driving, and selling $300 billion of state assets.

“This is the latest act of concentration of power in Saudi,” said Hasnain Malik, global head of equity research at emerging markets investment bank Exotix.

“As unprecedented and controversial as it may be, this centralisation might also be a necessary condition for pushing the austerity and transformation agenda, the benefits of which very few investors are pricing in.”

After initially tumbling as much as 2.2 per cent on Sunday, the Saudi stock index rebounded to close slightly higher. Shares related to some of the detained people, such as Prince Al Waleed’s Kingdom Holding, sank but most banks rose, a sign of economic optimism.

Instability

The purge may increase Prince Mohammed’s grassroots support by tackling corruption, a problem that has long plagued the economy.

A danger for financial markets, however, is that Prince Mohammed is shaking up business practices and ties that have lasted for decades, a move which could backfire if it triggers an exodus of money and wealthy individuals from the country.

Many corporate executives expect Prince Mohammed to persuade or pressure rich Saudis to repatriate some of the billions of dollars which they are believed to have transferred overseas for safe-keeping, and which could now help to kick-start the development projects that he plans. 

The corruption crackdown may be an initial step in this effort; the decree creating the committee gave it the right, pending the result of investigations, to seize assets at home or abroad and transfer them to the state Treasury.

James Dorsey, senior fellow at Singapore’s S. Rajaratnam School of International Studies, wrote that Prince Mohammed appeared to be reacting to growing opposition within the royal family and the military to his reforms and Riyadh’s military intervention in Yemen.

“It raises questions about the reform process that increasingly is based on a unilateral rather than a consensual rewriting of the kingdom’s social contract.”

For many people, however, a unilateral approach is seen as the best chance to push through the reforms. A chief economist at a big regional bank said Prince Mohammed’s main motive for acting was frustration that reforms were not moving fast enough.

The privatisation programme, for example, including the planned sale of 5 per cent of national oil giant Saudi Aramco, has been discussed for many months with little action. Now the programme may pick up.

“The message this should send to foreign investors is it’s unwise to bet against MbS,” said Sam Blatteis, chief executive of regional advisory firm The MENA Catalysts, using a common abbreviation of Prince Mohammed’s name.

“When he wants to get things done, he has proven that he can. This is not a consolidation of power, it’s an acceleration. The wheels of policymaking are moving faster.”

Apple Inc.’s shares rose to a record high on Friday as more analysts set a trillion-dollar valuation on the company, following a blowout fourth quarter and an upbeat forecast that quashed investor concerns around the iPhone X.

The stock rose as much as 3.7 per cent to $174.26, briefly breaching $900 billion in market value, amid declines in the broader market. The gains added nearly $32 billion to the company’s market capitalisation.

The Cupertino, California-based company also forecast a strong holiday quarter ahead, which will include the iPhone X that started selling on November 3.

“We see iPhone X unlocking pent-up iPhone upgrades, especially in China, driving more than 20 per cent iPhone unit growth and a revenue and earnings beat in 2018,” analyst Katy Huberty on Morgan Stanley said.

The glass-and-steel $999 phone appeared to have brought back the frenzy associated with iPhone launches — long lines formed outside Apple stores across the world as fans flocked to buy the new phone.

The company will make 30 million iPhone X units during the current quarter, Nomura Instinet analysts estimated, allaying production worries related to the phone.

IPhone X’s launch follows weeks of concerns among analysts about the production of the phone, which for the first time includes new facial identification software to replace the fingerprint used on previous phones.

Apple said on Thursday it expects first-quarter revenue of $84 billion to $87 billion, at the high end of analysts’ average expectation of $84.18 billion, according to Thomson Reuters I/B/E/S.

“We — and many others — had feared that guidance could be weaker, reflecting only 9 weeks of the flagship iPhone X and limitations on supply,” Bernstein analyst Toni Sacconaghi said.

At least 13 brokerages raised their price targets on the stock, with Citigroup making the most bullish move by raising its price target by $30 to $200.

Of the 37 analysts that track the stock, as per Thomson Reuters data, 31 had a “buy”, or higher rating. None had a “sell”.

With the latest brokerage actions, at least nine Wall Street analysts now have target prices that put Apple’s market value above $1 trillion. Drexel Hamilton’s Brian White is still the most bullish among Apple analysts tracked by Thomson Reuters, raising his target price further to $235.

Apple’s fourth-quarter results underscored the company’s ability to drive growth not just on iPhones, but across its range of products, analysts said.

The company’s suite now includes five different iPhone models, the iPad, the Mac and the Apple Watch as well as its fast-growing services.

Apple said it sold 46.7 million iPhones in the fourth quarter ended September 30, above analysts’ estimates of 46.4 million, according to financial data and analytics firm FactSet. Mac and iPad sales too were above the estimates of most analysts.

TOKYO — Japan’s Fujitsu said on Thursday it had agreed to merge its struggling PC business with Lenovo, giving the Chinese computer giant a controlling share of the business.

Tokyo-based Fujitsu said it had “decided to formally sign a deal” with Lenovo, the world’s largest PC maker, and the government-backed Development Bank of Japan (DBJ) on a “strategic partnership” to develop and sell PCs.

Lenovo will hold 51 per cent of the shares in Fujitsu’s PC subsidiary, while the DBJ will hold 5 per cent, Fujitsu said in a statement.

The deal should allow Fujitsu to pour more resources into its profitable IT services operations, while also pushing ahead with a sweeping restructuring programme that will see 3,200 job cuts.

The decision came after Fujitsu said last month it was in talks with Lenovo over a potential deal, which pushed Fujitsu shares up by 7.8 per cent.

After the announcement however, Fujitsu shares were trading down 2.44 per cent at 874.1 yen.

The company had been in talks with Toshiba and Vaio to merge their once high-flying personal computer businesses, but those negotiations failed to result in a deal.

Once-mighty Japanese firms have struggled in the face of stiff competition from lower-cost rivals overseas, including in China and South Korea.