Business

AMMAN — Jordan and Azerbaijan asserted on Tuesday their commitment to strengthening economic cooperation, to serve mutual interests, according to the Jordan News Agency, Petra.

During the meetings of the Jordanian-Azeri Committee, co-chaired by Minister of Industry, Trade and Supply Yarub Qudah and Azerbaijan’s Economy Minister of Economy Shahin Mustafayev, the two sides said they will cooperate in the fields of trade and investment and pledged to exert all efforts needed to achieve these goals.

Qudah asserted the importance of fostering commercial and investment cooperation to serve the best interests of the two countries, underscoring the role that the meetings can play to help achieve the desired goals.

Commending the strong Jordanian-Azeri relations, Mustafayev noted that the meetings are essential to discuss ways to boost cooperation, enabling the two sides to work together to eliminate any trade or business-related constraints.  

At the meetings, which commenced on Tuesday, the two countries agreed to expedite work towards the establishment of a Jordanian- Azeri business council and to facilitate travel procedures for businessmen between the two countries, besides working to exchange business and investment-related information to make use of the opportunities available. 

Committee representatives agreed that information exchange will address several areas, including customs and the establishment of industrial and development zones. They also encouraged Azeri companies to invest in fuel prospecting operations in the Kingdom.  Discussions addressed the possibility of importing oil and liquefied natural gas from Azerbaijan, according to Petra.  

Also on Tuesday, Minister of Foreign Affairs Ayman Safadi met with Mustafayev and commended the strong bilateral relations between both countries, Petra reported. 

BRUSSELS — Eurozone finance ministers on Monday chose Spanish Economy Minister Luis de Guindos to succeed European Central Bank (ECB) Vice President Vitor Constancio in May, a move likely to boost the chances of a German becoming head of the ECB next year.

The choice of a Southern European for vice president increases the likelihood that a northerner such as German Bundesbank Governor Jens Weidmann could be elected to replace Mario Draghi as head of the ECB in 2019. This could influence the bank's ultra-loose monetary policy.

"The Eurogroup [of eurozone finance ministers] today gave its support to the candidacy of Luis de Guindos for the position of vice president of the European Central Bank [ECB]," an EU statement said after a brief discussion among finance ministers.

De Guindos said he would resign as economy minister within days after being chosen as ECB vice president.

Initially faced with two candidates — de Guindos and Irish central bank governor Philip Lane — the ministers had their choice made simple for them by Ireland's decision to withdraw Lane's name.

"I believe that it is crucial that the election of a new vice president for the ECB is based on consensus, and should not be a source for any disagreement," Irish Finance Minister Paschal Donohoe said in a statement.

"In that context, I have decided that, on balance, it would be in the interests of the Euro-area as a whole to withdraw Philip's candidacy in advance of any vote," he said, adding that de Guindos had an "excellent track record".

Ministers said the appointment of De Guindos should be finalised by EU leaders in a regular summit on March 22-23. 

The European Parliament's economic committee, which has only a consultative role, said after an informal hearing of both candidates last week that Lane was a better choice, but eurozone officials said de Guindos was the favourite.

Spain, the eurozone's fourth-largest economy, has not had a representative on the executive board of the ECB since Jose Manuel Gonzalez-Paramo's term ended in 2012. 

Ireland has never held a post in the ECB at all, but Lane is widely seen as a top candidate to become ECB chief economist when Peter Praet leaves his position next year, eurozone officials said.

Weidmann

The choice of a Southern European for vice president could pave the way for Weidmann to be elected at the head of the ECB next year.

"It looks like that is the case," one eurozone official said. "But it is a chess game and we don't know all the players yet. Lane would be well placed as chief economist, but Weidmann depends on the distribution of the big jobs in 2019." 

The "big jobs" include the head of the European Commission, the chairman of European Union leaders and the head of the European Parliament —all of which will come up for replacement in 2019.

Eurozone officials said Weidmann could get the ECB top job if, for instance, France got the presidency of the European Commission, naming someone like the EU's chief Brexit negotiator, Michel Barnier, or IMF head Christine Lagarde.

Picking the Bundesbank chief for the ECB presidency may be tricky. Although Weidmann is considered a top-notch central banker, he has alienated some officials with his opposition to the ECB's ultra-easy monetary policy, which is credited with reviving economic growth.

Some other central bank governors regarded this as disloyalty in a time of crisis.

Weidmann has also ruffled some political feathers, clashing publicly with Italy's then-prime minister, Matteo Renzi, over Rome's failure to cut its debt further.

After being on the losing side in the ECB's big decisions on economic stimulus, Weidmann might also find it hard to unite the Governing Council, which strives for consensus decisions and rarely resorts to voting.

ABU DHABI — Abu Dhabi National Oil Co. (ADNOC) on Sunday said it has awarded Spanish Cepsa firm a 20 per cent share in a concession of two offshore oil fields in a deal worth $1.5 billion.

The 40-year deal aims to double production at the emirate's offshore fields of SARB and Umm Lulu to 215,000 barrels per day, state-owned ADNOC said in a statement.

Its subsidiary, ADNOC Offshore, will retain a 60 per cent stake in the project، while the remaining 20 per cent will be awarded to another company, the statement said.

Cepsa, a global oil and gas company, is wholly-owned by Abu Dhabi's Mubadala Investment Company which has assets worth over $125 billion.

"This long-term agreement is a milestone in the development of Abu Dhabi's integrated oil and gas sector and in the delivery of ADNOC's 2030 smart growth strategy," CEO of ADNOC Sultan Al Jaber said.

Last week, ADNOC awarded a 10 per cent stake in the offshore concession of Lower Zakum to an Indian consortium led by ONGC Videsh company for $600 million. 

ADNOC Offshore also retained a 60 per cent stake in that concession, with plans to award the remaining 30 per cent to a third company. 

The aim is to more than double production at Lower Zakum to 450,000 bpd.

The vast majority of the United Arab Emirates' crude oil reserves are located in Abu Dhabi — capital of the Gulf emirate. 

Abu Dhabi in recent years has granted concessions to ExxonMobil, Total, BP, Shell and China's CNPC, among others, as old concessions have expired.

The new concessions have been offered at nearly half the duration of the old concessions — with ADNOC taking majority stake in the projects. 

The national company aims to increase the Abu Dhabi's oil production capacity from 3.2 million barrels per day to 3.5 million by the end of 2018.

PARIS — International Monetary Fund (IMF) chief Christine Lagarde warned on Saturday that economic stimulus from US tax cuts may lead to a rapid rise in interest rates which would weigh on countries with high debt levels.

The IMF was going to be "attentive" to the consequences of the reform, which notably includes a sharply lower corporate tax rate, she told French radio station France Inter.

Lagarde's remarks echoed concerns in financial markets which have been in turmoil amid fears that rising US inflation will trigger faster Federal Reserve interest rate rises than had previously been expected.

Several key stock markets lost around 10 per cent last week in a brutal correction that Lagarde said in the interview had been "inevitable".

She said the US tax reform "will operate like a kind of stimulus on the current economic situation" in the US which was already experiencing "strong" growth.

"You have to ask yourself whether this will not result in rising wages, rising prices and therefore rising inflation and whether, consequently, there is a risk of a reaction by the monetary authorities, notably in the form of interest rates rising a little faster or a little more frequently," she said.

This, in turn, would have "an impact on all of the world's economies, especially on heavily indebted economies", Lagarde said.

"We believe that we must be attentive to what is going on, especially in the United States," Lagarde said.

She rejected, however, any comparison with the economic situation preceding the 2008 financial crisis.

"We are not at all in a pre-major crisis situation like we were in 2008," she said.

The US Congress in December approved a tax reform package that will slash corporate tax to 21 per cent from 35 per cent.

Last month, the IMF said the reform would probably have a positive short-term impact on the US economy, and raised its growth forecast for the world's biggest economy this year by 0.6 percentage points to 2.5 per cent.

PARIS — The good news keeps coming for the French economy — data published on Thursday showed unemployment at its lowest level since 2009, while the head of the International Monetary Fund (IMF) praised recent reforms by President Emmanuel Macron.

After years of being considered the "sick man of Europe", the French economy is showing its strongest growth in years, with optimism underpinned by the pro-business agenda being implemented by the government.

Statistics agency INSEE said on Thursday that unemployment had fallen to 8.9 per cent nation-wide in the final quarter of 2017, down 0.7 percentage points to its lowest level since 2009.

The uptick in the jobs market has led some companies to warn about skills shortages, a dramatic turnaround for an economy that has consistently lagged its better performing neighbours.

"We've had new job creation at a very high level in 2017 which was sufficient to reduce unemployment," commented economist Bruno Ducoudre at the OFCE economic institute.

On a day of bumper announcements, online giant Amazon also said that it planned to create 2,000 new jobs in France in 2018, most of them in its warehouses.

Economists stress that the improving economy is partly down to stronger growth across Europe, which is dragging France higher, but the head of the IMF on Thursday emphasised the role of recent reforms.

"We need to recognise clearly the quality and the ambition of the reforms that have been started," Christine Lagarde said on Thursday during a visit to the economy ministry in Paris.

Macron, a 40-year-old centrist elected in May, has promised a "transformation" of the economy and social system to make France an easier place to start companies and more attractive for investors.

His first annual budget cut taxes on companies and profits on financial investments, while his government is preparing a second wave of reforms focused on improving training for adult workers and the unemployed.

Economic growth is forecast to be around 2 per cent in 2018, though some analysts expect forecasts to start rising. Expansion of 1.9 per cent in 2017 was the highest level in six years, according to INSEE.

LONDON — Stock markets see-sawed on Wednesday as volatility returned, sparked by surprisingly strong American consumer price data briefly rekindling inflationary fears that last week sent world markets into a tailspin.

European equity markets took fright, briefly tumbling into the red, as higher-than-expected US inflation fed expectations that borrowing costs might be ramped up very soon. 

US consumer price inflation jumped to 0.5 per cent in January and the core consumer price index, which excludes volatile food and fuel categories, rose 0.3 per cent, the largest increase since January 2017.

Wall Street opened lower in a knee-jerk reaction to the data, but then turned positive as investors felt that the initial reaction had been overdone, particularly as US retail sales figures, released at the same time, showed a weak reading.

Wall Street’s rebound helped soothe frayed nerves in Europe, where key indices closed with healthy gains and mostly at better levels than those seen before the US release.

No ‘game-changer’ 

“This is not a game-changer,” said Viraj Patel, strategist at ING, said of the data.

A Federal Reserve (Fed) rate hike was widely expected for next month, Patel said, but the market was not convinced of the central bank’s “ability to deliver more than three hikes this year” overall. 

However, while avoiding a rerun of last week’s bloodbath that wiped trillions of dollars off stock valuations, “markets are responding with higher volatility in light of today’s data”, Marvin Loh, strategist at BNY Mellon said.

“Volatility has crept back into the market,” he said.

Oliver Jones at Capital Economics, meanwhile, warned that the respite for the US stock market was probably going to be short-lived.

“Given how markets have reacted to recent data, it certainly seems likely that the stock market would remain under fire,” he said.

So much for the calm 

Earlier, analysts had noted the return of some semblance of calm to the markets following the recent volatility. 

In Asia, Hong Kong’s main stocks index had closed up more than 2 per cent, extending a rebound from the sell-off last week. 

Tokyo, however, fell to another four-month low as the yen strengthened against the dollar, at one point hitting a 15-month high. 

Investors were also unimpressed by weaker-than-expected economic data for Japan in the last quarter of 2017.

In Europe, the continent’s biggest economy, Germany, expanded by 0.6 per cent in the final quarter of last year, official data showed. 

Global stock markets have tumbled in recent weeks, wiping out previous strong gains, largely on concerns that high US inflation will force the Fed to tighten the cost of borrowing faster than anticipated this year. 

“Given the recent stock market slump, risk aversion has grown,” Shinichiro Kadota, foreign exchange strategist at Barclays Securities, told AFP.

In corporate activity, shares in pan-European TV giant Sky rallied after the satellite broadcaster beat rival BT to show the bulk of live Premier League football matches in Britain over the next few years.

As global stock markets rose, the dollar lost ground against its peers in the European afternoon, having started the session higher, while bond yields rose.

KUWAIT CITY — Iraq, the second largest oil producer in the Organisation of Petroleum Exporting Countries (OPEC) cartel, plans to sharply increase its output capacity to seven million barrels a day by 2022, its oil minister said on Tuesday.

Iraq now has an oil production capacity of 5 million barrels per day (bpd) but is pumping just over 4.7 million under an OPEC output cut agreement.

“Our target is to reach seven million bpd by 2022,” Jabbar Al Luaybi said, while presenting oil and gas projects available for private foreign investors.

Luaybi said Iraq sits on proven crude reserves of 145 billion barrels but he is confident the figure will jump to around 250 billion barrels with sufficient investment.

He said the war-battered nation plans to boost natural gas production to 7 billion cubic feet per day by 2021 from the current output of 2.7 billion cubic feet.

Luaybi called on foreign investors to seize huge investment opportunities in the oil and gas sector where billions of dollars are required immediately in accordance with an Iraqi reconstruction plan.

He was speaking during the second day of the three-day Kuwait International Conference for the Reconstruction of Iraq where Baghdad hopes to collect pledges totalling $88.2 billion.

The minister said attacks by the terror group Daesh in Iraq had reduced the country’s refining capacity from 930,000bpd to just 450,000bpd.

But reconstruction efforts have succeeded in regaining 70,000bpd.

He outlined plans to build seven new refineries with a production capacity of 700,000bpd by 2021.

Luaybi also outlined plans to build new pipelines and export facilities mainly in the oil-rich southern region.

LONDON — US and European stock markets rebounded on Monday, but the danger of ever more volatility kept investors' nerves under strain.

Wild price swings accompanied last week's heavy stock market losses, the worst weekly equity slump in years, making it hard for investors to read the market with any degree of confidence from one moment to the next.

"Investors are breathing a sigh of relief after the torrid times last week," said Rebecca O'Keeffe, head of investment at Interactive Investor.

"Buying the dip [bargain hunting] has been a very difficult call in recent days, with every attempt at engagement punished in subsequent market moves, so investors will be hoping that this is a genuine buying opportunity."

But such hopes may well be premature, some analysts cautioned.

 'Won't last' 

"Investors will be aware the calm probably won't last," said Jasper Lawler, head of research at LCG.

Brokers Charles Schwab described Wall Street as remaining "skittish" while Capital Economics calculated that the valuation of American stocks "appears stretched by most measures" even after last week's brutal correction. 

Michael Hewson at CMC Markets, meanwhile, said that there is "a whole new breed of equity investors and traders who have never experienced the type of volatility that we've gone through over the last few days", making their "untried reaction" another factor of market uncertainty.

At the heart of market worries lies the rapidly rising likelihood of monetary policy tightening by key central banks, notably the Federal Reserve, but also the European Central Bank and the Bank of England, as inflationary pressures build up.

Analysts are now predicting that Wednesday's US inflation report for January, coupled with fresh retail sales data, may well spark another rollercoaster ride for equities if they confirm inflationary fears.

A weak reading, however, may give US monetary policymakers a reason to hold off on raising rates at a faster clip.

Yield watching 

The sudden market fragility comes after a stellar 2017 and a January that saw record and multi-year highs for stock markets around the world, after years of post-financial crisis stimulus.

But as central banks pull back, there is now concern that big spending plans by the US government may boost the budget deficit, making the case for higher rates more pressing still.

Rising yields on government bonds are an indication that such a scenario is seen as likely in the markets, with investors demanding higher interest rates if they are to accept future inflation eating into their returns.

"Should yields march further higher — which is quite possible with the upcoming US inflation and retail sales data to look forward to on Wednesday — then there is a possibility the equity markets could be in for another volatile week," predicted Fawad Razaqzada at Forex.com.

 Asia soft 

Monday got off to a calm start across Asia but while some exchanges managed to stay in positive territory, the afternoon saw gains eroded or wiped out.

Hong Kong, which sank more than 9 per cent last week, closed slightly lower, while Shanghai and Singapore both posted modest gains.

Seoul also gained, with traders cheered by signs of a thaw in relations between North and South Korea during the Winter Olympics.

Tokyo, a benchmark for Asian market trends, was closed for a public holiday.

In commodities trading, both main oil contracts climbed on Monday after sliding last week.

Bitcoin, another hotbed of volatility, recovered slightly from Friday's levels.

The dollar's attempted recovery appeared to fizzle out by the European afternoon, with the greenback lower against both the euro and the yen.

KUWAIT — The World Bank's private sector arm urged international companies on Sunday to overcome concerns about funding reconstruction projects in Iraq and seize high-yield investment opportunities in the country.

The International Finance Corporation's (IFC) country manager for Iraq, Ziad Badr, was speaking in Kuwait ahead of an international conference this week for donors and investors to rebuild and revive Iraq's economy, as the country emerges from a devastating three-war against the terror group Daesh.

"I don't think that in any other part of the world there are such investment opportunities," Badr said in a speech at the Kuwait Chamber of Commerce and Industry, giving as an example a Lebanese firm making a 24 per cent return on its stake in a luxury hotel in Erbil, the capital of the Kurdish region of northern Iraq.

The IFC has about $1.2 billion in investments in different Iraqi ventures including banks, cement plants and telecommunications, and is preparing to announce a $250 million investment in a telecommunication venture, he said.

The Iraqi National Investment Commission (NIC) last week published a list of 157 projects it will seek investment for at the February 12-14 International Conference for Reconstruction of Iraq, estimated to cost about $100 billion in total.

The projects include rebuilding destroyed facilities like Mosul's airport and new investments to strengthen, and diversify the economy away from oil sales, by developing transport, agriculture and industries based on the nation's energy wealth, including petrochemicals and oil refining.

Rebuilding homes, hospitals, schools, roads, businesses and telecommunications is key to providing jobs for the young, ending the displacement of hundreds of thousands of people and putting an end to several decades of political and sectarian violence.

About 1,900 delegates have registered to attend the conference, representing foreign governments, private sector companies and international organisations, NIC head Sami Al Araji told the gathering at the Kuwait Chamber of Commerce.

"We are at the crossroads, the world now is supporting us, we have to seize the opportunity," he said.

Baghdad is determined to clamp down on "bureaucratic routine and corruption that in some cases are delaying investments", he said, responding to complaints by Kuwait companies about the difficulties of doing business in Iraq.

One of them, a supplier of telecommunications equipment, told the conference he had been waiting six months to get a $5 million payment for work done for the Iraqi government.

Iraq is the 10th most corrupt country in the world, according to Transparency International. 

Iraq declared victory over Daesh in December, having taken back all the territory captured by the militants in 2014 and 2015. 

A US -led coalition supported the Iraqi forces, especially in the battle to dislodge them from Mosul, their de facto capital in northern Iraq, in July.

Iraq reopened to foreign investment in 2003 after the US — led invasion that toppled Saddam Hussein, but the vast majority of the billions of dollars invested went to increasing its oil and natural gas production.

It has become the second-largest crude exporter of the Organisation of the Petroleum Exporting Countries, after Saudi Arabia, with a daily output of 4.4 million barrels.