Business

DUBAI — African officials, including four heads of state, convened with international CEOs at a summit on Wednesday in Dubai, part of its push to position itself as a link for huge potential investments on the continent.

“We are looking at the fastest growing economy of the world ... Six out of the top 10 fastest growing economies are just next to us in Africa,” said the president and CEO of the Dubai Chamber of Commerce and Industry, Hamad Buamim.

Experts at the opening of “Next Generation Africa”, Dubai’s fourth Global Business Forum on Africa, said the continent’s 54 countries — home to a fifth of the world’s population — require tens of billions of dollars in investment in infrastructure, energy and other sectors. 

Investment, Emirati officials hope, will be channelled through Dubai, a trading hub and member of the United Arab Emirates.

“We believe that Dubai’s strategic goals can be aligned with Africa’s ambitions as it enters a new phase of development,” said the Dubai chamber chairman, Majid Saif Al Ghurair. 

The number of African companies registered in Dubai jumped to 17,000 last year, an increase of 41 per cent from 2015, according to Ghurair.

Trade volume between UAE and Africa totals around $35 billion and has been growing at a double-digit rate annually.

“We see potential of a growing economy that has a lot of future ... Africa is a great market,” Buamim told AFP on the sidelines of the two-day forum that has attracted four heads of state from Africa, several ministers and hundreds of investors and experts.

He said the forum is held to help channel investments to Africa through Dubai.

Rwandan President Paul Kagame told the meeting that Africa is witnessing speedy reforms and a faster pace of integration, especially among a number of regional economic blocs formed in the continent.

“A number of steps have been taken and progress has been made ... In the next five to 10 years, we will see progress,” in the integration between the various economic blocs, Kagame said.

The president said a number of economic unity initiatives had been adopted in Africa in the fields of customs unions, infrastructure projects, electricity links and railway networks.

“Later on, the regional economic communities will join together ... integration is happening,” said Kagame, as he called for greater investment inflow into Africa.

The Infrastructure Consortium for Africa (ICA) said last month the continent must double its spending on infrastructure over coming years after a decline in 2016.

Last year, total investment in transport, energy, water and IT/communications amounted to $62.5 billion, down from $78.9 billion in 2015, it said.

Investments worth between $120 billion and $140 billion is needed in the short-term, said the report.

AMMAN — Royal Jordanian (RJ) posted JD31.8 million in net profit in this year’s third quarter against JD12.9 million net profit in the same period last year, RJ’s President/CEO Stefan Pichler said on Tuesday.

Pichler was speaking at a press conference on Tuesday during which he presented the national carrier’s turnaround plan which was approved by RJ’s Board of Directors during its session on Monday.

RJ’s finances have started to recover since the beginning of June, which marked the start of the company achieving first monthly net profit in 2017, he said. 

He noted that the net income increased exponentially in the following months, enabling RJ to cover the JD27.8 million losses, incurred in the first five months of the year.

According to Pichler, RJ’s strategic objective is to position itself as the number 1 network carrier in the Levant.

This is based on three main pillars, foremost of which is sustainable profitability that attracts the capital market and targets increasing operating margins in the coming five years. 

The second pillar focuses on RJ being a consumer champion, by thinking of customers first and delivering a consistent customer experience across all touch points.

The third pillar is to see RJ become the employer of choice, attracting and retaining talented and skilled workforce, while providing the best training and career planning, and managing and rewarding performance.

Royal Jordanian will keep offering super-low fares to retain loyal customers and gain new ones who will also see improved services and a seamless travel experience, he said in the statement.

Royal Jordanian will open new international routes in the coming five years, to Washington, Copenhagen, Stockholm and Kyrenia, in Cyprus, and will resume flying on previously suspended routes, including Damascus, Mosul, Sanaa, Aden and Benghazi, he noted.

In terms of its fleet, the company will merge into a single supplier for all the narrow body fleet from currently two aircraft manufacturers, considerably reducing expenses on maintenance, spare parts and training. 

Additionally, the airline will add more Economy Class seats in its narrow-body planes, and thus increase the earning capacity, by cutting down the number of Crown Class seats while keeping the comfortable pitch of both classes’ seats. This move will generate more revenues for RJ.  

Pichler noted that today’s fleet of 26 aircraft will grow gradually to reach 30 by 2021; seven of them will be the currently operating 787s.

Under the turnaround plan, Royal Jordanian will exert more effort to boost its presence in Aqaba, in cooperation with the Aqaba Special Economic Zone Authority and local tourism entities, with the objective of increasing traffic to the coastal city from several countries around the world, he added.

This will lead to supporting the economy and bringing in more revenues for the airline. He voiced hope “that the Aqaba authorities as well as business community will support us to the same degree we want to support them and to the best of our economy”.

He said that the five-year plan will include major initiatives that are expected to enhance unit revenues by 7 per cent and lower unit costs by 6 per cent

TOKYO — Nintendo nearly doubled its full-year profit forecast on Monday as it pointed to sizzling sales of its Switch games console and a cheaper yen for the upbeat outlook.

The Kyoto-based video game giant said it now expects net profit to be 85 billion yen ($748 million) for the fiscal year to March 2018, well up from an earlier estimate of 45 billion yen.

Nintendo also boosted its sales projection for Switch, which was launched in March with a price tag of $300 and is seen as a new pillar for the company’s earnings.

The company said it expects to sell around 14 million Switch consoles in the current business year, up from an earlier 10 million forecast.

Switch, capable at home and on the go, blends Nintendo’s console and handheld device business with its fledgling mobile gaming strategy, which got a big brand win with Pokemon Go’s success in the summer of 2016.

During the April-September period, the company launched several headline game titles for Switch, including “Mario Kart 8 Deluxe” and its popular “Splatoon2”.

Its “Super Mario Odyssey”, which was released last week, is also expected to increase sales for the second half, the firm said.

AMMAN — Mutah University students will have a chance to learn more about the trends of renewable energy technology, with the help of the Korean Green Energy Academy launched at Mutah University on Sunday.

Through the Korean Green Energy Academy, launched for the fourth time at the university, students will attend lectures on CCPP Simulator, power plant O&M technology and Jordan renewable energy projects.

The event is co-organised, as a corporate social responsibility project, by Korea Trade-Investment Promotion Agency (KOTRA) and Korea Southern Power with the assistance of Hanvit DNS from Korea, according to a KOTRA statement. 

LONDON — British low-cost carrier easyJet announced on Saturday it had agreed to buy part of bankrupt carrier Air Berlin’s operations at the German capital’s Tegel Airport for 40 million euros ($46.4 million).

EasyJet will enter into leases for up to 25 A320 aircraft and take over slots, it said, as the last Air Berlin flights were set to land back in Germany.

The company also said it was hoping to recruit around 1,000 Air Berlin pilots and cabin crew over the coming months, to be employed on German contracts.

Air Berlin, Germany’s second-ranked airline employing some 8,000 people, triggered bankruptcy proceedings in August after its biggest shareholder Etihad Airways pulled the plug on a cash lifeline following years of losses.

EasyJet said the 40-million-euro price it was paying excludes “potential start-up and transitional operating costs”, adding: “The acquisition is subject to regulatory approvals and is expected to close in December 2017.”

“This agreement is consistent with easyJet’s strategy of purposeful investment in strong number one positions in Europe’s leading airports [or number two to a legacy incumbent],” the carrier said in a statement.

“This will enable easyJet to operate the leading short haul network at Tegel connecting passengers to and from destinations across Germany and the rest of Europe.”

It claimed that in addition to easyJet’s existing base at Berlin Schoenefeld, it would make the carrier the “leading airline” in the German capital.

Air Berlin was able to keep flying until now thanks to a 150-million-euro ($175 million) bridging loan from the German government, giving it time to negotiate the sale of its assets.

German and international investors and competitors lined up, with an eye not only on Air Berlin’s aircraft but also coveted take-off and landing slots at crowded airports.

German flag carrier Lufthansa is taking the biggest chunk, buying 81 of the insolvent airline’s 144 aircraft. It also plans to hire up to 3,000 Air Berlin staffers.

EasyJet said it would operate a reduced timetable at Tegel during the European winter but planned to operate a full schedule from summer 2018.

The carrier said it would announce new routes and services to and from Tegel in due course.

AMMAN — Arab Bank Group posted $600.8 million in net income after provisions and tax for the first nine months of 2017 compared to $617.9 million in the same period last year, according to a statement from the Arab bank.  

The bank has continued with solid financial performance which reflects its commitment to grow while maintaining a strong and healthy capital base, the statement said.

Sabih Masri, chairman of the group’s board of directors said the group’s financial performance confirms its success in dealing with a challenging operating environment.

 Shareholders’ equity reached $8.5 billion while customer deposits stood at $33.6 billion, according to the statement.

Nemeh Sabbagh, the group’s CEO, attributed the group’s positive results to the strength of its core businesses as its net operating income reached $894 million.

As of 30 September 2017, the group’s loan-to-deposit ratio stood at 69.1 per cent, while its capital adequacy ratio computed in accordance with the new Basel III regulations reached 15.9 per cent, Sabbagh said in the statement. 

Arab Bank was named the “Best Bank in the Middle East” in 2017 for the second year, consecutively, by Global Finance magazine.

TUNIS — Tunisia will ask the United States for a $500 million loan guarantee as it seeks to lay off about 16,500 public sector workers in 2017 and 2018, a senior government official told Reuters.

The layoffs, which the government aims to make voluntary but which are demanded by its international lenders, come from a public sector workforce of around 700,000.

Tunisia will ask this new guarantee loan as it prepares to issue bonds on financial markets next year. It will need about 7.4 billion dinars ($3 billion) in foreign loans including 1.4 billion dinars from the sale of bonds.

Since the 2011 uprising that ended the rule of former president Zine Al Abidine Ben Ali, the United States has guaranteed about $1 billion in loans to Tunisia to support its democratic transition.

“We will ask US for a $500 million guarantee loan. Tunisia is counting on US support to support its economic transition”, the official, who asked not to be named, said.

Tunisia is under pressure from the International Monetary Fund (IMF) and its partners to speed up reforms to create jobs and cut its deficit after its tourism sector was hit by militant attacks in 2015. 

In April, the IMF agreed to release a delayed $320 million tranche of Tunisia’s $2.8 billion in loans, on condition that it raise tax revenue, reducing the public wage bill and cut popular energy subsidies.

“Six thousand five hundred public sector workers are already applying to leave this year and we aims to lay off 10,000 others voluntary with financial incentives next year,” the official said.

“We hope Tunisia’s public sector wage bill will reach 12 per cent of GDP in the next three years versus 14.5 per cent now with these reforms”, he added.

Six years after the uprising against Ben Ali’s autocratic rule, Tunisia has made progress towards democracy. But successive governments failed to push through some of the painful reforms needed to overhaul public spending.

A delegation from the IMF will be in Tunis by the end of this month to discuss the progress of reforms before deciding on a new tranche of the $2.8 billion loan.

Under the 2018 budget, the deficit will fall to 4.9 per cent of gross domestic product (GDP) in 2018, from about 6 per cent expected in 2017. Tunisia also seeks to raise GDP growth to about 3 per cent next year against 2.3 per cent this year.

SHANGHAI — China’s blue-chip shares extended gains to 26-month highs on Wednesday, underpinned by robust profits from tech firms and as the ruling Communist Party revealed its new leadership line-up.

During the week-long Communist Party Congress that concluded on Tuesday, Chinese President Xi Jinping projected a vision for a “new era”, boosting demand for a range of sectors including green technology, healthcare and advanced manufacturing.

The blue-chip CSI300 index ended up 0.5 per cent, at 3,976.95 points, its highest close since August 2015, while the Shanghai Composite Index gained 0.3 per cent to 3,396.90 points.

During the midday trading break, the Communist Party unveiled its core decision-making body, the Politburo Standing Committee, headed by President Xi.

HSBC’s Greater China Economist Julia Wang expects co-ordinated policies to reduce financial risks, more institutionalised environment policies and accelerated state-owned enterprise (SOE) reforms following the congress.

An index tracking environmental protection shares rose 0.9 per cent, on investor confidence they would benefit from Xi’s vision of a “beautiful China”.

Indexes tracking SOEs, were also firm.

New era 

During the party congress, Xi unfolded a roadmap for China’s development until 2050 that would address challenges from “imbalanced and inadequate” growth.

The party unanimously passed an amendment to its constitution to include “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” as one of its guiding principles. 

UBS strategist Gao Ting interpreted the “new era” as one characterised by an emphasis on quality of growth, rather than quantity, benefitting sectors such as advanced manufacturing, environmental protection, education and healthcare.

He also identified recurring investment opportunities around SOE restructuring and the Xiong’an special economic zone.

“These are likely major investment themes over the next three, five years,” he said. 

“Market interest could be temporarily diverted away from these areas, but will ultimately come back to these themes.”

The significance of government policy cues from the week-long Party Congress can never be overestimated, Yu Weixing, general manager at asset manager Shanghai Zheng Chuang Investment, said.

“Policy direction to investors is what weather forecast is to sailors,” Yu said, adding he was especially impressed by Xi’s emphasis on environmental protection during his opening speech. 

“I was impressed by Xi’s remark that ‘we should treat the environment as our own lives’. That shows China’s growth model in the past is not sustainable”. 

“This could spawn huge investment opportunities in areas ranging from new energy and electric vehicles to energy conservation and sewage treatment.”

Yang Ruomu, analyst at Dongxing Securities, saw Xi’s vision for a “beautiful China” translating into tighter regulation and spurring huge demand for environment monitoring and protection.

The brokerage recommended investment in companies such as Infore Environmental Technology Group, Fujian Longma Environmental Sanitation Equipment and Fujian Longking Co. 

Emphasis on more balanced growth also creates opportunities in sectors such as healthcare and education, said Shen Weizheng, fund manager at asset manager Ivy Capital. 

“More people in China deserve longer and happier lives, and their needs for healthcare and education should be met.”

Fund manager, Hu Yuanzhi, at Shanghai-based asset manager Rationalstone Investment, will bet on leading home appliance maker Gree and Midea as stocks that will benefit from increasing demand for better living. 

The need for more advanced production to enhance living standards will also benefit tech companies. 

China Merchants Securities said the government’s focus on innovation and technology upgrade would benefit stocks such as advanced component maker Sunny Optical, telecom equipment producer ZTE , and semiconductor firm SMIC. 

Some investors were surprised that Xi’s political thoughts were enshrined into the party constitution, cementing his power.

“Power concentration could lead to higher efficiency and more predictability in the short term,” Ivy Capital’s Shen said.

RIYADH — The head of oil giant Saudi Aramco on Tuesday said a lack of recent investments in the oil sector could lead to a shortage of supplies. 

“Not much investments have been going into the energy sector... $1 trillion has been either deferred or cancelled” amid the price slump of recent years, Aramco CEO Amin Nasser said at an investment conference in Riyadh.

Of that, $300 billion was due for investment in oil exploration and $700 billion for project development, he said.

“This will have an impact on the future of energy if nothing happens,” Nasser said, pointing to additional needs due to “natural depreciation of fields and normal rise in demand”.

Nasser also said renewable energy will not threaten the position of oil and natural gas as the main global energy sources.

“We are witnessing a transformation... But it will be decades before renewable energy takes a major share in the energy mix,” he said at the Saudi Future Investment Initiative conference.

Global oil prices more than halved in 2014 because of oversupply and weak global economic growth.

The prices have made a partial recovery after producers from OPEC and non-OPEC countries agreed last year to cut production by 1.8 million barrels per day (bpd). 

The initial six-month deal was further extended by nine months until the end of March.

Saudi Arabia, the world’s top oil exporter, made the largest cut of around 500,000bpd. It has said it will increase the reduction to 560,000bpd in November.

The kingdom has lost hundreds of billions of dollars in oil revenues since mid-2014 and as a result posted huge budget deficits.

It has launched a package of economic reforms that include a plan to sell up to 5 per cent of state-owned Aramco.

Speaking at the conference, the managing director of Saudi Arabia’s state-owned Public Investment Fund, Yasir Al Rumayyan, reiterated that an Aramco initial public offering is on track for next year.

Nasser said on Monday that the IPO, expected to raise $100 billion if Aramco is valued at $2 trillion, will take place in the second half of 2018.

RIYADH — Saudi Aramco’s initial public offering will take place in the second half of 2018, CEO Amin Nasser said on Monday, dismissing reports that the oil giant’s plans could be shelved.

“We have always said that we will be listing in 2018, and to be more specific, in the second half of 2018,” Nasser said in an interview with CNBC television.

“The IPO is on track. The listing venue will be discussed and shared in due course,” Nasser told the channel in Riyadh.

The Aramco chief also said Saudi authorities were not in talks with Chinese or other investors to sell a stake in the firm, estimated to be worth around $2 trillion.

Aramco, which controls Saudi Arabia’s massive energy assets, plans to list nearly 5 per cent of its shares in the stock market.

The IPO is expected to be the largest in history, raising around $100 billion in much-needed revenue for the kingdom, which has posted $200 billion in deficits in the past three fiscal years.

Saudi billionaire Prince Alwaleed Bin Talal, whose Kingdom Holding Co. rivals the state-owned Public Investment Fund, has also hinted that Aramco might be headed for even more stock sales in the years to come.

“If you go five per cent, there’s nothing that prohibits you from going another five per cent next year, and five per cent the third year and fourth year, and so forth, depending on the situation,” he told CNBC on Monday.

The potential Aramco listing is a cornerstone of an ambitious economic reform programme launched by Saudi Arabia’s Crown Prince Mohammed Bin Salman last year.

The programme, known as Vision 2030, aims to balance the Saudi budget after the OPEC kingpin lost hundreds of billions of dollars because of the slump in oil prices.

Doubts have been swirling around the viability and ambitious timeline of the Aramco IPO.

Saudi Arabia had laid out plans for a dual listing on the Saudi stock market and an international exchange for 2018, with markets in New York and London vying for the offering.

But the company has struggled to select an international venue for its listing.