Business

DUBAI — The International Monetary Fund (IMF) on Tuesday raised its 2016 growth forecast for the Middle East and North Africa after a rebound in oil prices, but maintained its cautious outlook for Saudi Arabia.

The region, along with Afghanistan and Pakistan, is set to see economic growth of 3.4 per cent this year, better than a previous projection of 3.1 per cent, the IMF said.

At the same time it cut the growth forecast for 2017 to 3.3 per cent, down from 3.5 per cent in April, citing fallouts from "terrorism" and geopolitical tensions in its World Economic Outlook Update.

The region includes major oil exporters like the Gulf Arab states, Iraq, Iran and Algeria, as well as oil importers such as Egypt, Morocco and others.

Following the lifting of international sanctions in January, Iran's oil exports have reached more than 2 million barrels per day, close to their pre-sanction levels.

"In the Middle East, oil exporters are benefiting from the recent modest recovery in oil prices while continuing fiscal consolidation in response to structurally lower oil revenues," the IMF said.

"Geopolitical tensions, domestic armed strife, and terrorism are also taking a heavy toll on the outlook in several economies, especially in the Middle East, with further cross-border ramifications," it said.

The IMF maintained its growth projections for Saudi Arabia, the world's top crude oil exporter, at 1.2 per cent for this year and raised it slightly to 2.0 per cent for 2017.

The economies of the kingdom and its oil-exporting peers in the Gulf Cooperation Council (GCC) countries have been hit hard by the slide in oil prices which began more than two years ago.

They have lost hundreds of billions of dollars in revenues, prompting them to take austerity measures and resort to borrowing to plug the huge budget deficits.

The IMF has praised the reform measures while insisting that more needs to be done.

In a report last month, the IMF said the value of oil and natural gas exports in the GCC states and Algeria was projected to fall by almost $450 billion this year compared with 2014.

It also estimated that their cumulative budget shortfalls would hit $900 billion as a whole by 2021. The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

FRANKFURT — German container shipping giant Hapag-Lloyd announced Monday it is teaming up with United Arab Shipping Company to become one of the world's top five shipping companies as consolidation in the sector continues apace.

"Hapag-Lloyd AG and United Arab Shipping Company (UASC) have signed a Business Combination Agreement to merge both companies, subject to the necessary regulatory and contractual approvals," the firm said in a statement.

The combined companies would become the world's fifth-largest container firm with an annual turnover of around $12 billion (10.8 billion euros).

No financial details were disclosed.

"This strategic merger makes a lot of sense for both carriers — as we are able to combine UASC's emerging global presence and young and highly efficient fleet with Hapag-Lloyd's broad, diversified market coverage and strong customer base," said the German firm's chief executive Habben Jansen.

Once UASC's ships are integrated into the fleet, Hapag-Lloyd will have 237 ships afloat with a total capacity of 1.6 million TEU (twenty-foot equivalent units, which is the standard measure of a container), expected to transport around 10 million TEU to destinations around the world each year.

The combined firm will remain listed on the German stock exchange and retain Hapag-Lloyd's headquarters in the northern port city Hamburg.

UASC's majority shareholders, Qatar Holding LLC. and the Public Investment Fund of Saudi Arabia, will take stakes of 14 per cent and 10 per cent in the merged company.

Shareholder Approval

All of UASC's shareholders unanimously approved the deal at an extraordinary general meeting.

Hapag-Lloyd's shareholders are scheduled to vote on the merger at their annual meeting in August.

CSAV, the city of Hamburg and Kuehne Maritime will remain the largest shareholders in Hapag-Lloyd.

The merger is expected to be completed by the end of 2016. 

Hapag-Lloyd comes to the UASC deal off the back of a successful purchase of Chilean firm CSAV's container shipping arm and its own stock market flotation, both in 2015.

With global demand for logistics services slipping, firms active in the sector have found themselves with too much capacity on their hands.

That has made for an environment friendly to mergers — including Hapag-Lloyd's own takeover of CSAV's shipping arm in exchange for a 30 per cent stake in the merged company.

Hapag-Lloyd also recently inked an alliance deal with five Asian maritime shipping groups that will come in to force in early 2017.

Together representing 18 per cent of the global container fleet, the THE alliance hopes to lure clients as a one-stop shop for a wider range of services and destinations.

Shares in Hapag-Lloyd were showing a loss of 8.4 per cent at 17.20 euros on the Frankfurt stock exchange in late morning trade on Monday.

AMMAN — Jordan Investment Commission (JIC) has started issuing a five-year- licence for economic activities launched at development and free trade zones, a JIC statement said on Monday.

Previous licences are also renewed for a term of five years, JIC President Thabet Al Wir said in the statement, noting that the move seeks to provide a more favourable investment environment in the Kingdom.

TAIPEI — Police in Taiwan said on Sunday they had arrested three out of 16 foreign suspects they believe hacked into the cash machines of a major local bank, withdrawing more than $2 million.

They are accused of targeting First Bank's ATMs last week, using malware to withdraw more than T$80 million ($2.5 million) from dozens of machines.

A policeman recognised one of the suspects, a Latvian, while he was eating in a restaurant in the northeastern city of Yilan.

Police arrested him later, an official of the Taipei City Police Department told a news briefing.

Two other suspects, who are from Romania, were arrested in Taipei, police said, adding they had found more than T$50 million of the stolen money in a hotel room.

"This is the first time that an international team of ATM thieves has committed a crime in Taiwan," Lee Wen-chang, chief commander of the Criminal Investigation Division, told reporters.

Authorities are still investigating exactly how the crime was carried out, he said.

The remaining 13 suspects, including two from Russia, have left Taiwan, police said, adding they had alerted authorities overseas.

The suspects may have used a cellphone to target 41 First Bank ATMs, investigators said on Wednesday.

In May, a gang stole $13 million from Japanese ATMs in a three-hour spree.

Since discovering the Taiwan theft last Monday, Taiwan's major state-run banks have frozen withdrawals from nearly 1,000 ATMs of the kind targeted in the heist, which are supplied by Germany's Wincor Nixdorf.

About 4 per cent of Taiwan's national ATM network of 27,200 machines are affected.

Investigators have identified three different malware programmes that were used to trigger withdrawals.

BERLIN — Google CEO Sundar Pichai hit back Sunday at accusations that the global internet giant failed to pay enough taxes in Europe, and warned of the potential fallout from Britain leaving the EU.

As Google faces a raft of fiscal probes across the continent, Pichai told Germany's Welt am Sonntag newspaper that the US company invested "very heavily" in Europe and employed 14,000 people there.

"As a global company, we find ourselves between the conflicting priorities of international tax law," he said, in remarks published in German.

"Based on the structure of existing tax law, most companies pay the bulk of their taxes in their home countries."

He said that Google respected the laws on the books, and that governments would have to take action if they wanted to ensure more revenues stayed at home.

"Only the further development of the global tax system by politicians can lead to better results," he said.

Asked about a Brexit or British exit from the EU following last month's watershed referendum, Pichai underlined the importance to Google of a "unified digital market" in Europe. 

He said it was a "challenge" for a multinational company "to come to terms with different laws and regulations in each country".

"This complexity makes greater engagement difficult, which also plays out in investment," he said, stressing however that large companies were better able to deal with such issues than small firms. 

European officials have raised questions about the tax liabilities of companies including Google, Amazon and Apple. Some firms have taken advantage of tax breaks offered from Ireland, Belgium and Luxembourg.

Google's offices in Madrid were searched in a tax probe in late June, just over a month after police raided the Internet giant in Paris in a similar investigation.

The European Union also filed new anti-trust charges against Google last week, piling pressure on the company over the alleged abuse of its market dominance.

Pichai said Google's Android mobile phone operating system was "among the most open computer systems ever invented" and insisted that most Android phones "have several apps that aren't from Google".

AMMAN — Through its Jordan Competitiveness Project (JCP), USAID, has supported Jordan Ahli Bank in the development of a new loan product to finance clean technology businesses. The product, which offers affordable loans to firms working in the sector, was rolled out to companies’ representatives on Sunday, according to a USAID statement.

This cooperation also included the development of a standard application form for the product and analytical evaluation tools. Speaking at the product launch event, USAID Deputy Mission Director Lewis Tatem highlighted the development agency’s commitment to growing the clean technology sector, particularly for its ability to employ more Jordanians.

“We know that, given this sector’s dynamism and position as a regional leader, it has the potential to create thousands of new jobs,” he said. Citing a recent labour study, he added that “for example, the demand for renewable energy technicians grew by 25 per cent a year for four years running”.

ISTANBUL — A failed coup attempt in Turkey and a series of bombings that hit the country this year have weighed on international travel to the country.

The number of foreign visitors to Turkey fell by 28 per cent in April, data showed on Friday, the biggest drop in 17 years. Also, after the coup attempt, the value of the Turkish lira dropped to a near 6-month low against the US dollar.

The decline signals more pain for Turkey's economy, which is smarting from slowing exports and weak investment. Some economists have forecast that tourism revenue will drop by a quarter this year, costing around $8 billion.

The closure of Istanbul's Ataturk Airport late on Friday had caused the diversion of 35 airplanes while 32 other flights were cancelled, Turkish Airlines Chairman Ilker Ayci told broadcaster CNN Turk.

Turkish Airlines resumed flights from Istanbul's international airport on Saturday in the wake of the failed coup attempt, while some foreign carriers cancelled weekend flights.

Forces loyal to Turkey's government fought on Saturday to crush the last remnants of the military coup attempt. Television images late Friday had shown tanks parked in front of the airport.

A spokesman for Turkish Airlines said flights had now returned to their normal schedule from Europe's third largest hub, though delays were to be expected.

Turkish budget carrier Pegasus said its flights were also experiencing minor delays.

Tour operator Thomas Cook said most German guests who had booked a holiday to Antalya or Bodrum had taken their flights on Saturday. It said flights from the UK were operating as normal but, given the circumstances, free cancellations or amendments were possible for customers due to fly to Turkey this weekend.

Several other countries also suspended their passenger flights to the country over the weekend.

AMMAN – Investors have shown strong interest in starting up new projects in the information and communication technology (ICT) sector, the Jordan Investment Commission (JIC) said on Saturday.

In a statement, JIC President Thabet Al Wir said ICT investors have applied to build up projects, worth JD20 million. The projects are expected to provide around 900 job opportunities.  

The JIC attributed the growing interest to fresh incentives and recent tax cuts granted to ICT investors, in pursuance of a Cabinet decision.   

Wir said the projects will create no less than 894 job opportunities for Jordanians, explaining that this month the JIC received applications for 16 ICT projects.  

Investors’ envisaged projects cover different ICT business areas, including the development of software, different mobile and Internet apps, digital services and electronic games, Wir noted, underscoring the importance of the ICT sector for the economy.

Goods needed to facilitate the ICT projects, whether imported or purchased from the local market, will benefit from a zero per cent sales tax. 

Wir urged investors to benefit from current incentives and start up ICT projects that can create jobs and provide a chance to make use of and further build young people’s innovative skills.  

In April, the government endorsed a set of incentives to boost growth in the ICT sector, whose contribution is deemed vital to the country’s gross domestic product. 

The ICT sector’s revenues dropped by 14 per cent in 2014 compared to 2013, down to JD546 million, according to figures of the ICT Association of Jordan (int@j).

The decline was attributed to several local and external factors, including lack of incentives in previous years to boost the sector.

AMMAN — Masood Ahmed, the director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), is going to retire from the fund, following the IMF-World Bank annual meetings in October 2016, according to an IMF statement e-mailed to The Jordan Times.

“Masood has been a visionary leader of the department for the past eight years. I have highly valued his wise counsel, political acumen, and great strategic sense. His departure is a loss for the fund, and he will be deeply missed by friends and colleagues alike,” IMF Managing Director Christine Lagarde said.

Ahmed has been in his current position since 2008, where he oversaw the IMF’s relations with the Middle East at a time of political transition and intensified turmoil in the wake of the conflict in Syria. 

LONDON — The Bank of England (BoE) wrong-footed investors by keeping interest rates on hold on Thursday, but held out the prospect of a stimulus package soon to help the economy cope with Britain's decision to leave the European Union.

The battered pound surged by more than 2 per cent as the central bank held its bank rate at 0.5 per cent, contrary to widespread expectations of a first cut in more than seven years.

Governor Mark Carney said two weeks ago that he expected the BoE to give the economy more help over the summer.

But the Bank's rate-setters said on Thursday they would wait three more weeks to see the intensity of the Brexit hit to Britain's economy before deciding on the need for any stimulus.

"In the absence of a further worsening in the trade-off between supporting growth and returning inflation to target on a sustainable basis, most members of the committee expect monetary policy to be loosened in August," minutes of the meeting said.

"The precise size and nature of any stimulatory measures will be determined" in August, it said.

Only one of the Monetary Policy Committee's nine rate-setters — Jan Vlieghe, who has previously floated the idea of more help for the economy — voted for a cut at the July meeting.

The BoE has held its Bank Rate at 0.5 per cent since March 2009, when the global financial crisis was hammering Britain and investors have spent much of the past three years speculating about when borrowing costs would rise as the economy picked up.

Now the question investors and businesses are asking is whether Britain can avoid falling back into recession.

Economists taking part in a Reuters poll had mostly expected a halving of the bank rate to 0.25 per cent on Thursday, to be followed by a revival of the BoE's £375 billion ($499 billion) bond-buying programme at its next meeting on August 4.

Chris Williamson, chief economist with data firm Markit, said the BoE had opted not to rush into "a knee-jerk reaction" to the Brexit vote but it would "need to do a lot more to shore up confidence and keep the gears of the economy turning".

The surprise decision to keep rates on hold pushed sterling to a two-week high against the US dollar of $1.3480 and British government bond yields rose. British share prices lost some of their earlier gains and housebuilders such as Berkeley and Barratt Developments turned negative.