Business

BEIJING — The first Boeing 737 MAX delivered to China since 2019 landed recently at Guangzhou's Baiyun International Airport, according to tracking website Flightradar24. 

The aircraft, a 737 MAX 8 belonging to China Southern Airlines, landed at 10:23am local time (0223 GMT), according to the website. 

Boeing has rated China a crucial growth market, but deliveries ceased throughout the lengthy grounding of the 737 MAX following two deadly crashes in 2018 and 2019.

The delivery of the plane to China is a rare bright spot for the American company, which is facing intensifying scrutiny over its quality control practices in the aftermath of a near-catastrophic Alaska Airlines flight three weeks ago.

A panel blew off one of the carrier's Boeing 737 MAX 9s mid-flight, leaving a hole in the fuselage and forcing an emergency landing.

Alaska Airlines resumed flights with its 737 MAX 9 fleet on Friday, after sweeping inspections. 

The January 5 incident followed months of earlier, smaller problems with the same aircraft. 

The Alaska Airlines episode represents the most serious operational problem for Boeing since the crashes in 2018 and 2019, which resulted in 346 casualties. 

China was among the first countries to ground the plane after the two fatal accidents involving its flight control software and was the last major Boeing market to rescind the ban.

Boeing executives have at times suggested that diplomatic tensions between Beijing and Washington played a role in the pause on deliveries of new jets even after Chinese officials moved to allow MAX planes already in China to resume service.

In addition, China's zero-tolerance COVID-19 policies in the first three years of the pandemic had "reduced demand for airplanes in general", Boeing Chief Executive Dave Calhoun said in 2022. 

But in December, China's Juneyao Airlines took delivery of a 787 Dreamliner, the first Boeing craft to be delivered since 2019. 

The new 737 MAX 8, meanwhile, left Seattle this week and made stopovers on the islands of Hawaii and Saipan en route to China, according to flightradar24. 

Boeing last September forecast that China will need 8,560 new commercial planes through 2042, accounting for 20 per cent of the world's airplane demand.

The company said last year it had more than 80 737 MAX jets already built, but not delivered, to designated Chinese carriers.

Beijing hopes it’s new domestically produced passenger jet, the C919, will challenge foreign models like the Boeing 737 MAX and Airbus A320, though many of its parts are sourced from abroad.

The C919 made its debut outside mainland China in December when it was put on display at Hong Kong International Airport.

AMMAN — Arab Bank Group achieved solid results for the year ending December 31, 2023, reporting a growth of 52 per cent in net income after tax of $829.6 million compared with $544.3 million in 2022.

The Group’s performance was driven by sustainable growth in the underlying business across different markets, as net profit before provisions and tax improved by 34 per cent to reach $1.81 billion. Total Assets grew by 6% to reach $68.3 billion, loans grew by 5 per cent to reach $37.1 billion, and deposits grew by 6 per cent to reach $50.6 billion. While total Group equity stood at $11.4 billion.

In view of the solid results, the Board of Directors has recommended to the shareholders the distribution of 30 per cent cash dividends for the financial year 2023.

Sabih Masri, chairman of the Board of Directors, commented that the bank's strong underlying performance reflects the successful execution of its strategy which focuses on delivering sustainable growth and building a resilient business model capable of generating positive results, while dealing with the regional and international challenges. He also noted that the bank’s record net operating profit is a clear testament to its strong growth momentum across several markets, especially in the GCC region and international markets.

Randa Sadik, chief executive officer, stated that Arab Bank delivered robust results during 2023, where the Bank’s net operating profit grew by 34 per cent driven by increase in core banking income across various sectors and markets, with a clear focus on enhancing non-interest income contribution and revenue diversification. This was achieved while the Bank continued to invest in transformation and maintaining a resilient balance sheet, which will position us for further growth in the future. 

Sadik added that the Group’s liquidity and asset quality remain solid where loan-to-deposit ratio stood at 73.2 per cent and credit provisions held against non-performing loans continue to exceed 100 per cent. Arab Bank Group maintains a strong capital base that is predominantly composed of common equity with a capital adequacy ratio of 17.5 per cent.

Sadik also highlighted that as part of Arab Bank’s commitment towards Sustainability and its Environmental, Social and Governance (“ESG”) priorities, the bank successfully issued $250 million in sustainable Additional Tier 1 (AT1) Capital Securities. The issuance marks the first and largest sustainable perpetual AT1 issue in Jordan and was listed on the International Securities Market (ISM) and the Sustainable Bond Market of the London Stock Exchange.

With regard to the bank's ongoing commitment towards digital transformation and providing value for its customers, Sadik noted the establishment of "Acabes International Pvt Ltd", Arab Bank’s technology arm, as a global capability centre, supporting the bank’s businesses worldwide. Arab Bank, in collaboration with "Acabes", has recently launched an updated version of “Reflect” offering more features and services to its users.

This is in addition to launching "Arabi Shopix", a first of its kind service in the Kingdome which offers Arab Bank customers, including merchants, the ability to build and design an e-commerce website as part of the host of integrated digital banking solutions designed to meet the needs of SMEs through the “Arabi SMEs” programme.

As part of the bank's expansion strategy, and in line with the bank's continuous efforts to expand its footprint in promising markets, Masri commented that the Bank is in the process of starting its operations in the Iraqi market during the year 2024, providing comprehensive banking solutions and services to its current and future customers. In line with the group’s focus on expanding its wealth management and private banking business, Masri noted that during 2023, Arab Bank Switzerland acquired the majority stake in the family holding company which owns a deep-rooted Swiss bank "Gonet & Cie SA". The new banking group will be a major actor in the Swiss wealth management industry, with assets under management in excess of CHF 10 billion.

Arab Bank was named “Bank of The Year 2023 in the Middle East” by the London-based “The Banker” Magazine, owned by the Financial Times. The bank was also named “Best Bank in the Middle East 2023” for The eighth consecutive year by New York-based international publication “Global Finance”. Additionally, the bank received 18 awards in recognition of its corporate and consumer digital banking services in Jordan and the MENA region.

The bank’s 2023 financial statements are subject to the approval of the Central Bank of Jordan.

FRANKFURT, Germany — The European Central Bank (ECB) is expected to stand pat on Thursday and call for patience in the ongoing battle against inflation, pushing back against market hopes of rapid interest rate cuts.

The Frankfurt institute launched an unprecedented rate hiking cycle in mid-2022 after Russia's war in Ukraine pushed food and energy costs higher, sending inflation soaring.

With inflation steadily slowing after peaking at more than 10 per cent last year, the ECB is tipped to leave rates unchanged for a third consecutive meeting, keeping the benchmark deposit rate at a record 4 per cent.

The bank's governing council is expected to repeat that it considers rates are currently at levels that "will make a substantial contribution" to returning inflation to the 2 per cent target.

ECB watchers will be more interested in President Christine Lagarde's 13:45 GMT press conference, hoping for clues on when the bank might start slashing borrowing costs given the progress on taming inflation.

Lagarde has already pushed back against market bets of rate cuts starting as early as April, insisting last week it was too soon to "shout victory".

She told Bloomberg television that the first rate cut would "likely" only come this summer and only if the latest data supported such a move, citing economic uncertainties and concern about rising wages.

The US Federal Reserve is facing a similar debate across the Atlantic, where Fed officials have been tempering market expectations of rate cuts as early as March.

While it was appropriate to "ask when would policy adjustments be necessary so we don't put a stranglehold on the economy, it's really premature to think that that's around the corner", San Francisco Fed President Mary Daly told Fox Business.

"We think that neither the ECB nor the Fed is in a hurry to deliver rate cuts," UniCredit said in an analyst note.

Wages in focus 

Like other central banks, the ECB has been walking a tightrope between raising borrowing costs enough to convincingly rein in inflation without squeezing demand so hard it crashes the economy.

After months of decline, eurozone inflation reaccelerated to 2.9 per cent in December.

The increase was mainly due to the comparison effect with a year earlier, when governments provided exceptional support to help households with energy bills.

More expensive borrowing costs meanwhile have curbed demand for loans and mortgages, contributing to a weakening of the eurozone economy.

Output in the 20-nation currency club shrank by 0.1 per cent in the third quarter of 2023, and analysts see another modest contraction in the fourth quarter.

Lagarde last week said the battle against inflation was "on the right path" overall with the ECB forecasting a return to its 2-per cent goal in 2025.

But she said policymakers were closely monitoring several risk factors that could drive inflation up again, including tensions in the Middle East and the possible fallout on energy costs and supply chains.

The ECB was also keeping a close eye on wage negotiations in the eurozone as workers push for pay rises to compensate for higher living costs, Lagarde said.

In Germany, train drivers were staging a record six-day strike this week, the latest in a series of walkouts over wage disputes in Europe's largest economy.

Lagarde and other ECB officials have indicated they won't have the necessary data on eurozone wage agreements until April or May, bolstering the case for a rate cut at the June meeting at the earliest.

"Lagarde will likely keep the door wide open for a first cut in June without fully committing to it already," Berenberg economists said.

KfW chief economist Fritzi Koehler-Geib said the ECB's wait-and-see approach "can reduce the risk of inflation flaring up again".

"There is widespread agreement among the council members that clarity on wage growth is an essential prerequisite for the start of monetary easing," she said.

THE HAGUE — Dutch tech giant ASML, which supplies chipmaking machines to the semiconductor industry, reported on Wednesday a rise in annual net profit despite a high-tech trade spat between China and the West.

The firm painted a bright future, especially in 2025, as the rise of artificial intelligence (AI) was poised to fuel a boom in demand for semiconductors.

Net profits came in at 7.8 billion euros ($8.5 billion) for 2023, the firm said in its annual results, compared to 5.6 billion euros the previous year.

"The semiconductor industry continues to work through the bottom of the cycle," CEO Peter Wennink said in a statement.

"Although our customers are still not certain about the shape of the semiconductor market recovery this year, there are some positive signs," he added.

Traders cheered the results, with ASML stock soaring around seven per cent at the opening bell, outperforming the wider Amsterdam market, which was up 1.5 per cent.

ASML is one of the world's leading manufacturers of equipment to make state-of-the-art semiconductor chips, which power everything from mobile phones to cars.

"Without high-end logic, there's no AI. Without high-end memory, there's no AI. Without ASML, there is no high-end logic or high-end memory," said chief financial officer Roger Dassen

"It's very very clear that the AI development will have a very significant contribution to our business in 2025."

But the semiconductor industry has become a geopolitical battleground as the West seeks to restrict China's access over fears the chips could be used for advanced weaponry.

ASML announced earlier this month that it had been blocked from exporting "a small number" of its advanced machines to China, amid reports of US pressure on the Dutch government.

At the time, Beijing lashed out at what it called "bullying behaviour" by Washington, adding that it "seriously violates international trade rules".

China has described the restrictions placed on exports as "technological terrorism".

Amid the trade tensions with China, there are also concerns Beijing may introduce its own export controls on gallium and germanium — two rare earth metals critical for the manufacture of semiconductors.

ASML has shrugged off the financial impact of the geopolitical headwinds, with top officials saying the firm is well placed to weather the storm.

The firm said that 29 per cent of its sales came from China, more than double the percentage of last year (14 per cent).

The impact of the restrictions on the Chinese business was expected to be around 10-15 per cent of the 2023 sales, ASML said.

'Significant growth'
for 2025

The company has said it expects flat sales this year, which it has called a "transition year", before registering "significant growth" in 2025.

Overall net sales for 2023 came in at 27.6 billion euros, up from 21.1 billion euros in 2022.

The numbers for the fourth quarter were also slightly better than the firm had expected, with profits of 2 billion euros on sales of 7.2 billion euros. 

ASML said its pipeline was also robust, with net bookings nearly tripling to 9.2 billion euros in the fourth quarter compared to 2.6 billion euros in the third.

"Our strong order intake in the fourth quarter clearly supports future demand," Wennink said.

However, net bookings were down for the year as a whole, at 20 billion euros compared to 30.6 billion euros in 2022.

The firm said sales in the first quarter of this year were expected to slow compared to the pace set in the fourth quarter of last year, with a forecast of 5 to 5.5 billion euros.

"In spite of the positive signs as described above, we maintain our conservative view for the total year and expect 2024 revenue to be similar to 2023," Wennink said.

"We also expect 2024 to be an important year to prepare for significant growth that we expect for 2025."

HONG KONG — Hong Kong led a rally across most Asian markets on Tuesday as traders were cheered by reports that Chinese authorities were considering a blockbuster boost to equities after a painful start to the year.

The surge came after another record day on Wall Street where optimism about the outlook for the US economy has taken the place of expectations for a string of interest rate cuts starting in March.

The Hang Seng Index in Hong Kong piled on more than 3 per cent in the morning session and Shanghai also pushed higher after it emerged that Premier Li Qiang had called for more "forceful" measures to support China's battered stocks, giving a shot in the arm to investor confidence.

Hong Kong has lost around 10 per cent since the turn of the year and Shanghai more than 7 per cent on worries that officials were not doing enough to help the economy, which grew last year at its slowest pace since 1990, outside the pandemic years.

Authorities are looking at a raft of initiatives, Bloomberg reported, adding that policymakers were seeking to mobilise nearly $280 billion, mainly from the offshore accounts of state-owned enterprises.

"It sounds like something had been readied in response to the recent equity rout," Neo Wang, at Evercore ISI, said.

"The market was poor enough to warrant such elevated attention — China cannot afford to see A-shares sinking toward the Lunar New Year holidays."

Saxo Markets' Redmond Wong added that investors were hoping for more measures at key upcoming meetings.

"Prevailing pessimism regarding the economy, policy efficacy, and reduced allocation to China by global and Asian equity funds persists," he said in a commentary.

"Bargain hunters remain on the sidelines, and technical rebounds might face selling pressure until more information emerges from the Third Plenum potentially in February and the Two-session meetings in March, shedding light on the trajectory of the Chinese economy."

Wall St records

Most of Asia's other markets also rose, with Sydney, Seoul, Wellington, Taipei and Manila in the green. 

But Tokyo edged down on profit-taking after a surge in recent weeks pushed the Nikkei to three-decade highs. The Bank of Japan held off tightening monetary policy, as expected, and gave no clues about a timetable for a hawkish pivot from its ultra-loose position. 

Singapore and Jakarta also dipped.

Mumbai edged lower a day after overtaking Hong Kong as the world's fourth-biggest stock market fuelled by optimism over India's economy.

The total value of shares listed on Indian exchanges hit $4.3 trillion on Monday, slightly higher than Hong Kong's $4.29 trillion, according to data compiled by Bloomberg.

Investors were given a healthy lead from New York, where the S&P 500 clocked a second successive record and the Dow also hit a new high.

That come on the back of a renewed belief in the US economy, which continues to show resilience in the face of two-decade high interest rates, with consumer confidence rising and inflation expectations falling.

Traders had started the year on a somewhat sour note as a string of figures and warnings from Federal Reserve (Fed)  officials all but doused expectations rates will be cut in March and keep coming down through 2024.

"The story is changing for bulls," said David Donabedian at CIBC Private Wealth US.

"Investor optimism had been driven by the belief there would be aggressive rate cuts by the Fed. Now investor belief has pivoted to view the economy as bullet-proof. No matter how high interest rates go, the economy will continue to glide right through."

Investors are also gearing up for the release of corporate earnings, with market titans including Procter & Gamble, Tesla, IBM, Intel and Netflix due to report this week.

FRANKFURT — German train drivers will hold a six-day strike this week, the GDL union said, the longest walkout yet in an escalating row with Deutsche Bahn over pay and working hours.

The strike is due to start at 2:00 am (01:00 GMT) on Wednesday and last until 17:00 GMT on Monday. For freight services, the stoppage is due to begin at 17:00 GMT on Tuesday, GDL said in a statement in the early hours of Monday. 

Rail operator Deutsche Bahn accused the union of "acting absolutely irresponsibly".

It will be the fourth strike by GDL in recent months to push its demands for higher salaries to compensate for inflation, as well as for a reduced working week from 38 to 35 hours with no loss in wages.

A three-day walkout earlier this month already caused travel chaos for thousands of passengers, with 80 per cent of long-distance trains not running.

GDL said it had decided to call a fresh strike because Deutsche Bahn had shown "no sign of a willingness to reach an agreement" with its "third and allegedly improved offer".

The union will hold an 11:30 am press conference to give further details, it said in a statement.

Deutsche Bahn sharply criticised the renewed call to industrial action, saying it had offered pay rises of up to 13 per cent as well the option of reducing the working week by one hour.

"The GDL is exacerbating the conflict," a spokesman said.

"Anyone who doesn't even come to the negotiating table with a new offer of up to 13 per cent and the possibility of a 37-hour week with the same salary is acting absolutely irresponsibly."

Deutsche Bahn last year also clashed with the EVG rail union, which represents some 180,000 non-driver rail personnel, reaching an agreement in late August.

NEW YORK — US carriers JetBlue and Spirit filed an appeal in federal court on Friday seeking to reverse a judge's decision to block their planned merger.

The airlines "hereby appeal to the United States Court of Appeals for the First Circuit" against Tuesday's ruling in Boston, according to a notice of appeal filed with the court.

The merger, if ultimately approved, would create the fifth-largest airline in the United States.

US District Judge William Young rejected the plan earlier this week after the Justice Department last year sued to block the merger, noting the move would hurt consumers and violate antitrust law.

Lawyers for the airlines had argued that the tie-up stands to benefit customers "by bringing low fares and great service" to more markets and would boost their ability to compete with dominant US carriers.

But President Joe Biden and US Attorney General Merrick Garland instead called Young's ruling a "victory" for American consumers.

JetBlue's bid to acquire low-cost Spirit was announced in July 2022 after several months of twists and turns in the volatile airline industry, with JetBlue's offer of $3.8 billion prevailing in a bidding war with competitor Frontier.

Should the merger go through, the new entity would rank behind the "big four" — American, United, Delta and Southwest airlines — in number of seats offered.

According to figures provided by JetBlue and Spirit at the time, it would hold roughly a nine percent share of the US market.

DAVOS — Germany is not once again the sick man of Europe but a tired one that needs structural reforms, Finance Minister Christian Lindner said recently as he sought to assuage fears of a prolonged downturn in the eurozone's largest economy.

German output contracted in 2023 by 0.3 per cent year-on-year according to official preliminary figures released Monday.

Its economic woes have sparked a debate whether Germany was once again the "sick man of Europe", a label from the late 1990s when the country grappled with the costly fallout of reunification.

"I know what some of you are thinking. 'Germany probably is a sick man'," Lindner told a panel at the World Economic Forum in Davos.

"Germany is not the sick man... Germany is a tired man after a short night and the low growth expectations are partly a wakeup call. And now we have a good cup of coffee, which means structural reforms," he said.

The German economy's performance last year was significantly worse than the average 0.6 per cent growth in 2023, according to the latest forecasts by the European Commission.

Its economy lagged behind that of not only fellow eurozone members France, Spain or Italy but also other industrial powerhouses such as the United States and the United Kingdom.

Lindner put the blame on the energy crisis caused by Russia's invasion of Ukraine, but said German economy has shown "resilience" as well as Germany putting a priority on reducing its government deficit and debt.

A modest recovery is expected to get under way in 2024.

The German government forecasts growth of 1.3 per cent this year while the International Monetary Fund (IMF) expects the German economy to grow by 0.9 per cent in 2024.

In addition to the current economic headwinds, Germany is facing major structural challenges including a shortage of skilled workers as the population ages, a costly transition towards green energy and years of under-investment in infrastructure.