Business

AMMAN — Prime Minister Hani Mulki on Tuesday said Jordan wants to strengthen its ties with Turkey in the field of development cooperation to achieve mutual interests. 

The premier made the remark during a meeting with a Turkish delegation representing the Foreign Economic Relations Board of Turkey (DEIK) headed by its Vice President Mithat Yenigün, according to the Jordan News Agency, Petra. 

During the meeting with the delegates, Mulki noted that the private sector of Turkey may benefit from the Jordanian-EU agreement on simplified rules of origin, which can also encourage Turkish industries to invest in the Kingdom and export its products to European markets. 

He urged the delegates to benefit from the opportunity, which he described as “historic”, to achieve mutual gains and build partnerships that can contribute to achieving sustainable development. 

He also highlighted the importance of benefitting from the free trade agreement signed between the two countries to increase the joint commercial exchange volume. 

Moreover, Mulki welcomed Turkey‘s use of Aqaba port for shipping Turkish products, noting that the Aqaba Container Terminal has been  classified by the UN as one of the best in the world in terms of efficiency and prices.

Underscoring the importance of cooperation between the private sectors of both countries, Yenigün highlighted the large volume of Turkish investments abroad and the achievements made in the industrial, commercial and tourism sectors. He also mentioned that Turkey has restabilised in the wake of the failed coup attempt last month. 

Also on Tuesday, the Jordanian Businessmen Association (JBA) hosted the delegates, in the presence of the premier who mentioned that there are great opportunities in the construction sector in Jordan.

The government is going to award school and hospital construction projects to the private sector in the future in the same way the Bus Rapid Transit project is being handled, he told the delegates. 

DIEK’s delegates are currently visiting the Kingdom to showcase Turkey’s economic strengths and to stress the solid relations, a JBA statement indicated.  

The delegates also met with Central Bank of Jordan (CBJ) Governor Ziad Fariz, who highlighted Jordan’s financial policy and  foreign currency reserves. Fariz also highlighted the country’s support of medium and small-scale enterprises, according to Petra. 

Established in 1986, DEIK seeks to lead and strengthen the foreign economic relations of the Turkish private sector in a myriad of sectors particularly foreign trade, international investment and services, international construction activities and logistics and exploring inward and outward investment opportunities.

As of May 2016, DEIK has 104 founding institutions, 133 business councils, and approximately 1,000 member companies which form these councils, as well as 2,000 representatives from the member companies.

AMMAN — Arab Potash Company (APC) Chairman Jamal Sarayrah on Tuesday said that his company is facing huge challenges because of the drop in potash prices at the international level, and due to competition among global producers.

Potash prices have dropped by around $105 per tonne, he said. Subsequently, the APC will not be able to achieve any profit, Sarayrah told the Jordan News Agency, Petra, citing large market supplies compared to limited demand. 

He also criticised the high costs of energy and water used in the production process, adding that despite challenges, the APC will continue to support national institutions. 

It will also remain one of the largest employers of local workers in the south, APC chairman said, noting that the company has around 2,000 employees. 

During the first half of 2016, the APC posted JD28.7 million in post-tax profit and other provisions besides mining revenues, Sarayrah said, recording a 53 per cent drop compared to the figure of the same period last year. 

He added that the company managed to achieve these gains  through its subsidiaries and other revenues  from non-operational activities.

AMMAN — Jordan Investment Commission (JIC) President Thabet Al Wir on Tuesday discussed ways to enhance Chinese investments in Jordan with a delegation visiting from Ningxia province, the Jordan News Agency, Petra, reported.

During the meeting, Wir and the Chinese delegates highlighted the importance of benefitting from Chinese agricultural experience and enhancing bilateral cooperation, especially in the field of agriculture.

Wir urged the delegates to move away from the traditional approach of viewing the Arab market as consumers, and to benefit from Jordan’s access to US and European markets through the China-proposed fund to finance infrastructure projects.

In September, the JIC took part in the 2015 China-Arab States Expo held in Yinchuan, the capital of Ningxia Hui autonomous region.

CAIRO — Three Egyptian dailies said Monday that Cairo has proposed  an 18-month reform programme to delegates of the International Monetary Fund (IMF) in return for a $12 billion loan over three years to shore up its economy, but that differences remained between the two sides on how to proceed.

Reports by the privately-owned Al Shorouk, Al Masry Al Youm and Al Watan said the two sides were at odds over the size of a proposed devaluation of the Egyptian pound and the timetable for implementing some of the more politically sensitive reforms, like reducing or removing state subsidies on fuel, electricity and food staples.

According to the papers, the IMF has rejected Egyptian requests for a delay or a staggered implementation of some of the proposed reforms.

The IMF's response, according to Al Masry Al Youm, was categorical and reflective of Egypt's dire economic situation and the urgency of fixing it. "There is no time left and nothing should be put off," it said quoting, like the other two papers, government sources familiar with the Egypt-IMF talks that started last week in Cairo under tight secrecy.

Egypt is struggling to keep its economy afloat, amid a slump in tourism, foreign currency shortages and double digit inflation and unemployment. The government is also fighting an insurgency in the strategic Sinai Peninsula while continuing to show little tolerance for domestic political dissent. On Monday, the central bank reported a drop by about $2 billion in foreign currency reserves, down to $15.54 billion at the end of July after honouring a number of foreign debt repayments.

Egypt's economic crisis has taken on a serious political dimension, with critics now blaming President Abdel Fattah Al Sisi for exacerbating it by embarking on massive costly infrastructure projects they say have drained the country's meager funds and done little to revive the economy.

Sisi, in office since June 2014, counters that the projects, like a nationwide road network and an expansion of the Suez Canal, are vital if the country was to attract investors and their benefits would filter down in time. He has repeatedly vowed in recent days to shield the poor and middle class from a virtually inevitable wave of price hikes when reforms are implemented. On Monday, his government announced higher electricity charges for domestic use as part of a plan to lift state subsidies in the energy sector.

The IMF delegates, according to the three papers, see 11.60 pounds to the US dollar as a realistic exchange rate. Such a rate would be nearly three pounds more than the current official rate of 8.87 pounds available at banks but close to the thriving black market rate of 12-12.50 pounds. The Egyptians, according to the media reports, want the pound's exchange rate to be only 10.60 to the dollar.

"Both sides are looking at a pound floatation, and whether it should be done in one go or gradually," said Al Masry Al Youm.

The pound's exchange rate is crucial to a country like Egypt, whose survival is heavily dependent on imports, not just of staple food items, but industrial components and raw materials to keep the manufacturing sector going. Much of the imports needed by the private sector are financed by dollars bought on the black market.

As part of the planned reforms, Egypt was considering the partial privatisation of several state-owned enterprises, possibly including oil companies. These, according to Al Shorouk, would initially earn the treasury about $10 billion.

AMMAN — Deposits at licensed banks in the Kingdom rose by 3.2 per cent in the first half of the year to JD33 billion, compared with JD31.977 billion in the same period of 2015, according to Central Bank of Jordan (CBJ) figures.

The Resident private sector’s deposits accounted for the lion’s share, totalling JD25.825 billion while the non-resident private sector’s deposits totalled JD3.801 billion. The public sector’s deposits were JD2.738 billion, according to the CBJ's monthly data.

At the end of June, the deposits in foreign currencies at the Kingdom's licensed banks stood at JD6.794 billion, compared with JD6.467 billion in the first six months of 2015, the Jordan News Agency “Petra” said on Monday. 

GENEVA — Nobel-winning US economist Joseph Stiglitz and Swiss anti-corruption expert Mark Pieth said Saturday that a dispute over transparency had prompted them to quit a panel on reforming Panama's finance sector.

The pair quit the committee — set up by the Panamanian government in a declared bid to reform the country's tarnished financial services — on Friday. 

In a statement, Stiglitz and Pieth said "we believe that it's essential that our findings be made public and that independent committee members shall be allowed to speak freely about our findings, recommendations and beliefs”.

“It is not possible in our view that a committee aimed at improving transparency be anything less than fully transparent."

The statement said that, in their letter to the Panamanian government, the pair believed restrictions on defining the scope of their work, on speaking freely and on guarantees that the commission report would be released, were “tantamount to censorship”.

The so-called Panama Papers scandal erupted in April, when media outlets around the world published details of murky offshore financial dealings gleaned from 11.5 million leaked documents from Panamanian law firm Mossack Fonseca.

The leaks put a host of high-profile politicians, celebrities and sports stars in the hot seat over their assets in tax havens.

Scrambling to clean up its image, Panama created a seven-member expert committee to recommend reforms on strengthening the transparency of its legal and financial system.

Comprising four Panamanian and three foreign experts, it is scheduled to report to the Panamanian president and government by the end of 2016 .

Stiglitz, a professor at Columbia University in New York who won the Nobel Prize in 2001, was named as its head.

In an initial meeting in June, the committee agreed that the Panamanian government had to publish the report, Stiglitz and Pieth said.

But in late July, Stiglitz and Pieth received a letter from the government saying that only the president of Panama could decide on whether to publish.

"We had a problem with the government of Panama, not with the other members of the group," Pieth, a law professor at Basel University, told AFP.

"The government makes promises but there is no follow-through, there's no implementation. The government of Panama is under pressure from the business world — it's pulling back."

In their statement, Pieth and Stiglitz said the "seemingly irreconcilable divergences" were such that, in their view, the committee "should disband”.

However, they congratulated Panama for some of the measures it had carried out.

These include the signing of an agreement with the United States for swapping bank data about depositors and for committing to OECD standards on the automatic exchange of tax information from 2018.

But, they warned, "Global standards on transparency are rapidly increasing”.

If Panama fails to keep pace, the country faces "substantial potential damage to [its] reputation and its place within the international community”.

The Panamanian government said earlier that Stiglitz and Pieth had resigned over "internal differences" but gave no further details.

DUBAI — Yemen's government has asked international financial institutions to prevent central bank officials from accessing state funds held in overseas banks, the state-run sabanew.net news agency reported on Saturday.

The move could exacerbate a humanitarian crisis in Yemen, where a civil war has been raging between the Iran-allied Houthis, who control the capital Sanaa and the central bank, and the internationally recognised government of Prime Minister Ahmed Bin Daghr based in the southern port city of Aden.

Bin Daghr has received "confirmed information" that the central bank administration is tapping Yemeni foreign reserves held at banks in Europe and the United States after exhausting funds in Sanaa and elsewhere for the war effort, an official at the prime minister's office told the news agency.

"Out of concern for the funds and belongings of the Yemeni people, and in order to preserve the remaining public funds... the Yemeni government has decided to take this step, which includes suspending dealing with Central Bank Governor Mohammed Awad Bin Humam," the official was quoted as saying.

The 69-year-old Bin Humam had continued in his post after advancing Houthi fighters forced President Abed Rabbo Mansour Hadi and his government into exile in Saudi Arabia in March last year, precipitating the Saudi-led intervention.

World powers have been concerned about the humanitarian situation in Yemen, where the United Nations says many provinces are on the verge of famine. More than 6,400 have been killed since March last year and some 2.5 million have been displaced.

The Yemeni government move came as UN-sponsored peace negotiations in Kuwait ended without an agreement after nearly three months of talks, paving the way for fresh fighting.

Last month, Bin Humam said a second round of transfers of bank funds abroad to facilitate imports had been scheduled in days. His comments appeared to confirm what an official at a Yemeni government bank told Reuters a week earlier about a first batch of transfers taking place earlier this year.

Hadi's government has accused the Houthis of squandering some $4 billion in reserves held by the central bank on the war effort, but the Houthis say the funds had been used to finance imports of food and medicine.

The reserves have fallen to around $1.1 billion from $4.7 billion at the end of 2014. The IMF put them at well below two months' of imports, which it told Reuters was "very, very low". 

SHANGHAI — A string of overseas investments has shone a new spotlight on Chinese conglomerate Fosun, after the mysterious disappearance — and re-emergence — of its tycoon chairman rattled investors.

In the space of three days last week, the Shanghai-based company bought a stake in an Indian drugmaker for $1.26 billion, acquired a Brazilian investment firm and announced plans to take a stake in Portugal's biggest private bank.

That came only a week after it bought English Championship football club Wolves, and two months after it was part of a consortium that signed a memorandum of understanding to buy Athens' former main airport. Last year, it won a long-running battle to take over French holiday resorts group Club Med.

Founded 24 years ago by a group of classmates from China's prestigious Fudan University, Fosun has announced more than $15 billion in overseas acquisitions since 2010, according to Bloomberg News.

Started with capital of just 38,000 yuan (now $5,760), the company was an early investor in China's pharmaceutical and steel industries, before branching out into numerous business sectors including insurance and financial services. 

The Chinese government has for years encouraged companies to invest abroad to secure natural resources, open new markets and gain access to foreign technology, but the weak global economy has presented new, attractive targets. 

Chinese firms' overseas merger and acquisition deals more than doubled by value year-on-year in the second quarter, according to law firm Baker & McKenzie, surging 132 per cent to over $40 billion.

"Lower valuations of overseas companies dragged down by the slowing economy have made them more attractive to Fosun in terms of price," Sam Chi Yung, strategist at Delta Asia Securities in Hong Kong, told AFP.

"Fosun has taken advantage of the circumstances to buy more overseas."

In a two-track approach, Fosun chairman Guo Guangchang has urged proceeding slowly on future development to refine the $60 billion company's existing products and services, but moving fast to seize opportunities.

"When we have a very good product, we will allocate all resources to it, so that it quickly develops into a 'Unicorn'. Fosun eventually will become a giant 'Unicorn' with enormous power," Guo said in the firm's annual report in March.

The term unicorn typically describes technology startups valued at over $1 billion.

Oracle of China

Guo, often described as China's Warren Buffett, is China's 19th richest person according to Forbes magazine's most recent ranking, with wealth of $5.4 billion. He cites investor Buffett, known as the Sage of Omaha, as an inspiration, along with industrial company GE and investment bank Goldman Sachs.

Hong Kong-listed Fosun reported a profit of 8.04 billion yuan in 2015, up 17.3 per cent, according to its annual report.

Guo dropped out of view for several days late last year, amid a corruption crackdown launched by authorities which had targeted high-ranking government officials and corporate executives. His disappearance sparked speculation he too had fallen to the anti-graft campaign, spooking investors and companies doing business with Fosun.

The firm said the chairman was "assisting in certain investigations" conducted by authorities, without ever giving details.

Guo is well-connected politically, being a member of the Chinese People's Political Consultative Conference, a discussion body that is part of the Communist Party-controlled governmental structure.

He has returned with a vengeance, judging by his latest deals. Fosun has just announced it is acquiring Brazil-based investment management firm Rio Bravo, while its pharmaceutical arm is taking an 86 per cent stake in India's Gland Pharma, both as part of a push into developing countries.

"Our strategic deployment in Europe and the US is relatively complete. In emerging markets, it has just started," Guo told Bloomberg in May.

But at the same time it has accumulated billions of dollars in debt to pay for its purchases, and chief executive officer Liang Xinjun recently told Bloomberg Television that it might sell some assets to pay down the load.

AMMAN — Queen Alia International Airport (QAIA) received 3,424,461 passengers during the first half of 2016, recording a 5.4 per cent climb in passenger traffic (PAX) compared with the same period last year.

Aircraft movements (ACM) and cargo traffic figures also recorded discernible increases as of the end of June 2016, achieving overall year-to-date surges of 5.7 per cent and 6.6 per cent, respectively, according to a statement of the Airport International Group (AIG) — the Jordanian company responsible for the rehabilitation, expansion and operation of QAIA.

For June, which largely coincided with the fasting month of Ramadan, AIG reported QAIA’s first decline in monthly PAX figures this year in comparison to 2015.

QAIA welcomed 551,750 PAX in comparison to 593,006 PAX received in the same month last year, registering a year-on-year decrease of 7 per cent, according to the AIG figures.

Following a consistent streak of traffic growth since the beginning of 2016, QAIA registered 6,008 ACM, as opposed to 6,124 ACM in June 2015, effecting a 1.9 per cent drop. QAIA also handled 8,727 tonnes of cargo set against 8,874 tonnes throughout June of last year for a fall of 1.7 per cent.

“We’re very pleased to have recorded such strong overall traffic growth during [the first half of the year], despite June’s decline in year-on-year passenger, aircraft movement and cargo traffic results. This was largely due to June’s coinciding with the holy month of Ramadan marking a period when travelling generally tends to slow down,” the statement quoted AIG CEO Kjeld Binger as saying.

“Nevertheless, we look forward to witnessing a resurgence in traffic statistics in the months to come, especially given the approach of Eid Al-Adha, the remainder of the summer holiday,” he said, referring to the Muslim feast marking the end of the pilgrimage season.

AMMAN — Aqaba Container Terminal (ACT) has welcomed the maiden call of UASC MV UNAYZAH as part of the RES service. Representatives from ACT’s management and UASC Jordan agents arranged for a visit to the vessel. ACT CEO Robert Snow welcomed the vessel to Aqaba and ACT, and presented the captain with a plaque to commemorate the maiden call, according to an ACT statement.

The arrival of 13000+ TEU vessels to Aqaba and ACT is not only a great achievement for ACT, following the recent expansion of the terminal, but also a sign of customer confidence in its operational and performance capabilities, the statement quoted Snow as saying. Despite ongoing regional instability, ACT is proud to be able to welcome and handle such vessel calls, which will further improve supply chain processes and the Jordanian economy, the statement said.