Business

RIYADH — Saudi Aramco is to build the region's biggest shipyard in a $5.2 billion joint venture with South Korea's Hyundai Heavy Industries and others, the partners said on Wednesday.

The yard, to be constructed on the kingdom's Gulf coast, will have the capacity to produce four offshore rigs and 40 vessels, including three supertankers, a year, the state-owned oil giant said in a statement.

Lamprell, a United Arab Emirates-based provider of services to the energy industry, and Bahri, the National Shipping Company of Saudi Arabia, have also signed on to the venture.

"The integrated maritime yard will be the largest in the region in terms of production capacity and scale," Saudi Aramco said.

Located in the new industrial port city of Ras Al Khair, the yard will also provide maintenance services for rigs and vessels.

"Major production operations are expected to commence in 2019," with full capacity reached by 2022, Aramco said.

In a separate statement, Lamprell Plc. said the yard will cost an estimated $5.2 billion to build, of which roughly $3.5 billion will come from the Saudi government.

The rest will be funded by the joint venture.

It said the deal was conditional on approval by its shareholders.

Saudi Arabia has launched a programme to diversify its industrial base after its revenues were badly hit by a 50 per cent fall in world oil prices since 2014.

Around five per cent of Saudi Aramco is to be floated on the stock market next year to help form the world's largest state investment fund.

AMMAN — Royal Jordanian (RJ) said it achieved positive operational results during the January-April period of 2017 compared to the same period last year, according to an RJ press statement released on Wednesday.

The airlines reported a growth in the number of passengers, the seat factor and load factor of uplifted cargo. 

Royal Jordanian President/CEO Captain Suleiman Obeidat said RJ transported almost 45,000 more passengers in the first four months of 2017 compared to the number of passengers recorded in last 

year’s first four months; registering a 5 per cent increase. 

RJ aircraft carried 1.13 million passengers on scheduled and non-scheduled flights in the first four months of this year, according to the statement. 

Due to the increase in passenger numbers, the seat factor also went up. Moreover, the load factor of the uplifted cargo increased by 11 per cent on its freighters and passenger aircraft. 

Obeidat attributed the growth in passenger numbers to the efforts exerted by RJ employees to offer top ground and air services on all RJ routes, serviced by a fleet of 25 modern aircraft, seven of which are recently introduced Boeing 787s, dedicated to serve the long- and medium-range destinations.

Between January and April this year, the on-time performance went up to 81.4 per cent from 77 per cent last year. 

Since the end of last year, the commercial sector has run several marketing campaigns and promotions that greatly influenced the public all over the world. The promotional initiatives were run in parallel with the airline’s efforts to improve the RJ service and product, which the company offers for reasonable prices. A large number of RJ passengers are tourists visiting Jordan, the statement indicated. 

Expressing gratitude to all RJ employees for the positive turnaround in the operational results, Obeidat pointed out that the upcoming summer season, along with the pilgrimage flights to Mecca (Hajj and Umra)  are sure to maintain busy traffic on all RJ’s sectors.

NEW YORK — Shares of Amazon surged above $1,000 for the first time on Tuesday, marking another milestone in the rise of the American online retail giant.

Near (14:10 GMT), the company's shares were selling at $997.97, up 0.2 per cent after earlier getting as high as $1,001.20. Amazon's market capitalisation stood at about $478 billion, more than twice that of Wal-Mart Stores.

After going in public in May 1997 at $18 a share, Amazon has benefited from tectonic shifts in US technology and consumer shopping habits that are expected to continue to remake the retail industry.

The company has evolved from its origins as an online bookseller into a broad-based retailer of apparel and household staples, from electronics to sausage casing. And with its "Prime" subscription service, it also has become a creative force in Hollywood and beyond.

Amazon shares have appreciated especially rapidly over the last three years in anticipation that e-commerce will become a much bigger force in the retail sector. 

Online sales currently comprise about 8 per cent of the US retail market. Amazon alone accounts for about 43 per cent of US online sales, according to consultancy Slice Intelligence.

E-commerce is expected to grow between eight and 12 per cent this year, according to the National Retail Federation, about three times as much as the rest of the industry, which has faced massive store and mall closures. Amazon, whose revenues grew to $35.7 billion in the first quarter, also has impressed Wall Street by laying out a plan to achieve greater profitability. It is in the process of investing $1.5 billion to establish its own delivery network and lessen its dependence on shipping giants FedEx and UPS. That will help contain delivery costs, which grew 30 per cent to $1.9 billion in the first quarter. 

The surge above $1,000 a share also raises questions about whether Amazon intends to pursue a stock split. At Amazon's annual meeting a week ago, Chief Executive Jeff Bezos said the matter was under consideration.

The company had three previous stock splits, in June 1998 and in January and August 1999.

Amazon currently is the fourth biggest company by market capitalisation after Apple, Google parent Alphabet and Microsoft.

LONDON — Passengers faced a third day of disruption at Heathrow on Monday as British Airways (BA) cancelled short-haul flights after a global computer crash that unions blamed on the outsourcing of IT services to India.

The embattled airline said it was cancelling 13 short-haul flights from Heathrow Airport, Europe’s busiest, but was aiming to operate a full long-haul schedule from the hub and was operating a full service from Gatwick Airport.

Tens of thousands of passengers were left stranded over a busy holiday weekend in Britain after BA scrapped hundreds of flights worldwide.

The knock-on effects could continue for several days.

The airline urged passengers on Monday to check their flight status online before travelling to the airport in a bid to avoid scenes seen over the weekend when people camped out at Heathrow overnight.

BA Chief Executive Alex Cruz told the BBC he would not resign over the disruption and said it had nothing to do with cutting costs.

He said it had been caused by a power surge that had “only lasted a few minutes” but the problem was that the back-up system had then not worked properly.

The GMB union, however, said the disruption “could have all been avoided” if BA had not cut hundreds of IT jobs in Britain and transferred the work to India.

The airline said it was making “good progress” on restoring normal service.

“As our IT systems move closer to full operational capacity, we will again run a full schedule at Gatwick on Monday and intend to operate a full long-haul schedule and a high proportion of our short-haul programme at Heathrow,” a spokeswoman said.

“We apologise again to customers for the frustration and inconvenience they are experiencing and thank them for their continued patience,” she said.

Cruz said that 75,000 passengers had been affected.

“We know that there have been holidays interrupted and personal events that have been interrupted and people waiting in queues for a really long time,” he told Sky News.

“We absolutely profusely apologise for that and we are absolutely committed to provide and abide by the compensation rules that are currently in place.”

Shares dropping

Some British media suggested on Monday that BA could be hit with a bill of more than £100 million (115 million euros, $128 million) for compensation costs for stranded passengers’ food and accommodation.

BA cancelled all its flights out of Heathrow and Gatwick on Saturday after the IT failure, which shut down all of the carrier’s check-in and operational systems and affected call centres and its website.

Passengers were asked to contact BA to locate their luggage, after many were forced to leave Heathrow without claiming their bags in chaotic scenes that saw queues snaking out of the airports.

BA’s outage came on a busy weekend in Britain, where Monday is a public holiday and many schoolchildren are beginning a week’s holiday.

British Airways has suffered other IT glitches recently, leading to severe delays for passengers in July and September last year.

IAG, the parent group of British Airways and Spanish carrier Iberia, earlier this month reported a 74-per cent slump in first-quarter net profit to 27 million euros ($30 million), due in large part to a weak pound.

Shares in IAG on the Madrid stock exchange are currently trading down by about 2.5 per cent.

AMMAN — Jordan Securities Commission (JSC) on Monday urged investors and financial service companies to offer their views and suggestions pertaining to a recently prepared draft by-law on mutual investment funds, according to a JSC statement. 

A mutual fund is an investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

Opinions or any remarks can be sent within a period of two weeks from its publication on the commission’s website to the following email: info@jsc.gov.jo or by fax at the following number (06-5686830), the statement said, pointing out that the commission reviewed regulations governing mutual investment funds in regional and world countries to make sure that the draft by-law is compatible with international practices. 

The bill defines the parties allowed to establish investment funds, and stipulates that the minimum capital of funds must be no less than JD2 million instead of JD500,000.

AMMAN — Jordan Investor Confidence Index dipped slightly in March, reaching 93.97 points from 94.4 points in February, according to a statement of the Jordan Strategy Forum. 

The monthly-issued index, published by the forum, measures the confidence of investors operating in the Jordanian market through three aspects. These are confidence in the Jordanian currency and the monetary system, confidence in the real economy, and confidence in the Amman Stock Exchange (ASE). 

The confidence in the monetary system decreased in March to 83.01 points compared to 84.47 points although the Central Bank of Jordan foreign reserves went up by JD55.4 million to JD11.307 billion.

Confidence in the real economy continued to increase as it reached 116.75 points. The capital of registered companies increased and reached JD29.6 million in comparison to JD15.9 million and the number of these companies went up from 654 to 705 companies.

Tax on the monthly real estate volume increased by JD0.1 million to reach JD8.6 million and the number of construction permits has also increased to 3,017 permits in comparison to 2,919 permits. The manufacturing quantity production index increased as well from 91.3 points to 95.13 points. As for the confidence in the ASE, it went down by 0.92 points to 94.2 points in March, according to the forum’s statement. 

The ASE index witnessed a decrease by 27.5 points and reached 2,185.26 points. On the other hand, the ratio of inflow to outflow of foreign investment in the ASE increased from 58 per cent to 76 per cent this month.

New York, May 25, 2017 — Online retail giant Amazon on Thursday opened its first brick and mortar bookstore in New York, selling a limited range of its highest-rated books and letting customers browse products as in times gone by.

Amazon, which launched as an online bookseller in 1995 but which now sells everything from designer clothes to groceries, bided its time before venturing into the US cultural capital. It launched brick and mortar bookstores in six other cities first, starting in its hometown Seattle in 2015.

“You don’t run a marathon before you run a 5K,” said Jennifer Cast, vice president of Amazon Books. “We wanted some time to learn and we also really wanted the right spot.”

The New York store — a modest 370 square metres compared to the multi-storey premises of rival Barnes and Noble — occupies a prime spot at Columbus Circle opposite Central Park.

The offerings are limited to just 3,000 titles, none of which have received fewer than four out of five stars by Amazon’s online customers, who are invited to post their own reviews on the website.

There is also a “Page Turners” section dedicated to books that — according to Amazon data — customers have devoured in three days or less, and another to preferences of customers in the New York area.

Some of the store’s first customers welcomed the arrival of a new book store in a city where many book vendors have been forced to shutter in recent years.

“It’s just really exciting... that’s so unusual,” says freelance writer and mom of two Jennifer Rok.

“I always buy books online, so I don’t know how frequently I will buy here as opposed to on the internet, but I missed just browsing,” she said.

For Jannicke Remme, a researcher and tourist from Norway, it was a chance to browse a brick and mortar Amazon store not, yet, available in Europe. But she was less enthusiastic about the selection.

“You only see the bestsellers here, which means everybody is reading the same. That is not always nice,” she said.

Amazon plans to open 13 more brick and mortar bookstores in the United States before the end of the year, including a second one in New York, due to open this summer.

VIENNA — The Organisation of the Petroleum Exporting Countries (OPEC) decided on Thursday to extend cuts in oil output by nine months to March 2018, OPEC delegates said, as the producer group battles a global glut of crude after seeing prices halve and revenues drop sharply in the past three years.

The cuts were also shared by a dozen non-members led by top oil producer Russia, which reduced output in tandem with OPEC from January. 

OPEC’s cuts have helped to push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets.

Oil’s earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries, including Venezuela and Nigeria.

The price rise this year has spurred growth in the shale industry of the US , which is not participating in the output deal, thus slowing the market’s rebalancing with global crude stocks still near record highs.

By 11:50 GMT, Brent crude had fallen 1.3 per cent to around $53 per barrel as market bulls were disappointed OPEC would not deepen the cuts or extend them by as long as 12 months.

In December, OPEC agreed its first production cuts in a decade and the first joint cuts with non-OPEC, led by Russia, in 15 years. The two sides decided to remove about 1.8 million barrels per day from the market in the first half of 2017, equal to 2 per cent of global production.

Despite the output cut, OPEC kept exports fairly stable in the first half of 2017 as its members sold oil from stocks.

The move kept global oil stockpiles near record highs, forcing OPEC first to suggest extending cuts by six months, but later proposing to prolong them by nine months and Russia offering an unusually long duration of 12 months.

“There have been suggestions [of deeper cuts], many member countries have indicated flexibility but ... that won’t be necessary,” Saudi Energy Minister Khalid Al Falih said before the meeting.

Cuts exclude Nigeria and Libya 

He added that OPEC members Nigeria and Libya would still be excluded from cuts as their output remained curbed by unrest.

Falih also said Saudi oil exports were set to decline steeply from June, thus helping to speed up market rebalancing.

OPEC sources have said the Thursday meeting will highlight a need for long-term cooperation with non-OPEC producers. 

“Russia has an upcoming election and Saudis have the Aramco share listing next year so they will indeed do whatever it takes to support oil prices,” said Gary Ross, head of global oil at PIRA Energy, a unit of S&P Global Platts.

OPEC has a self-imposed goal of bringing stocks down from a record high of 3 billion barrels to their five-year average of 2.7 billion. 

“We have seen a substantial drawdown in inventories that will be accelerated,” Falih said. “Then, the fourth quarter will get us to where we want.”

OPEC also faces the dilemma of not pushing oil prices too high, because doing so would further spur shale production in the United States, the world’s top oil consumer, which now rivals Saudi Arabia and Russia as the world’s biggest producer.

“A nine-month extension is insufficient at shale’s current trajectory. The strategic challenge of shale is still to be addressed,” said Jamie Webster, director for oil at Boston Consulting Group.

AMMAN — Planning and International Cooperation Minister Imad Fakhoury said several US companies want to tap investment opportunities available in the country and expand their investments, according to a ministry statement released on Tuesday.

The minister gave the remark in his address at the inauguration ceremony of the Jordanian-US Business Forum on Monday as he deputised for Prime Minister Hani Mulki.

US companies want to learn about new opportunities in the Kingdom and they also want to participate in reconstruction projects in the countries of the region, while being based in the Kingdom, the minister told the attendees, stressing the importance of the Jordan-US partnership. 

Asserting the country’s openness to global investments, Fakhoury briefed visiting representatives of US companies on investment projects that the government seeks to execute, in the context of the Jordan Vision 2025 and the Economic Stimulation Plan of 2018-2022, according to the ministry’s statement. 

Several Jordanian officials participated in the forum, including Industry and Trade Minister Yarub Qudah, Aqaba Special Economic Zone Authority Chief Commissioner Nasser Shraideh and Jordan Investment Commission (JIC) President Thabet Al Wir, in the presence of US Chargé d’affaires Henry Wooster, according to the Jordan News Agency, Petra.

Wir asserted the importance of the US market for the Jordanian economy, noting that the country’s annual exports to the US total around $1.7 billion, reported Petra. 

According to Wooster, the forum, organised in cooperation with JIC and the American Chamber of Commerce in Amman (AmCham), is important as its sheds light on new business opportunities that US and Jordanian companies as well as consumers can benefit from. 

AmCham CEO Rose Alissi said the chamber has been working in cooperation with the private sector, the US embassy in Amman and the Government of Jordan to foster bilateral ties through promoting exports and boosting investments, according to Petra. 

AMMAN — Dell EMC on Sunday hosted a conference, titled, “Let the Transformation Begin”, showcasing how they can help organisations in Jordan to stay ahead in today’s competitive digital economy, according to a company’s statement. 

At the event, attended by Minister of ICT and Minister of Public Sector Development Majd Shweikeh, Dell EMC highlighted its technologies that can be used to develop and drive an innovation-based economy characterised by economic diversification and entrepreneurship to help fulfil Jordan’s aspirations, the statement said.

“The holding of this important conference in Jordan reflects the Kingdom’s success in the global digital arena and its ever-increasing attraction as a regional hub for digital innovation,” Shweikeh said, addressing the attendees.

“Jordan recognises the importance of the ICT sector as a key driver of economic activity, and this conference’s ability to showcase the latest digital innovations will support our strategy and transition to become a knowledge-based, digital economy,” she added.

With business sustainability in the next industrial revolution depending on a solid digital strategy, a new study commissioned by Dell EMC, titled ESG 2017 IT Transformation Maturity Curve, highlighted the critical role that IT transformation plays in the journey to remain competitive and become a successful digital business.

Kamal Othman, general manager, Levant, Dell EMC told participants that Jordan is already witnessing a shift across industries, pointing out that “the Vision 2025 sweeps the business landscape with new opportunities”.

At present, “it is essential for organisations, both large and small, to transform their approach towards IT and adopt new technologies to meet their performance demands and achieve a larger objective of sustainable economic growth”, he noted, highlighting the company’s digital solutions.