Business

AMMAN — The Amman Stock Exchange (ASE) market will start applying regulations on trading stocks of companies that are not listed on the ASE, known as OTC (Over the Counter),  on August 4, according to an ASE statement.

It will also start applying 2016 regulations on securities’ listing on the ASE market. The recently adopted regulations, prepared in cooperation with the Jordan Securities Commission and the Securities Depository Centre, meet international standards, ASE CEO Nader Azar said. Technical adjustments have been made so that the ASE electronic trading system may cater to the new services.

LONDON — OPEC delegates say comments from top exporter Saudi Arabia, which two years ago led the group to drop its historic role of supporting oil prices, are a change in tone and a sign the kingdom is looking — verbally for now — to prop up the market.

Khalid Al Falih, who took over this year from long-serving Saudi Oil Minister Ali Al Naimi, told German newspaper Handelsblatt that an oil price higher than $50 is needed to achieve a balance in oil markets in the long term.

There is certainly no sign yet of an actual policy shift by Saudi Arabia, or of the kingdom cutting supplies to support prices. Indeed, Riyadh told OPEC it raised its output in June to within a whisker of a record high reached a year ago.

But OPEC insiders say Falih's comments, and a remark he made last month raising the possibility Saudi Arabia may return to its role of balancing oil supply and demand, contrasted with previous statements from Saudi oil officials.

"This a change in the Saudi position," an OPEC delegate from a major Middle East producer said of Falih's remarks. "Before, they did not mention a range of prices they were looking for."

"They are looking for a higher price, but they want a moderate price."

In May, Saudi oil sources said the kingdom would not return to the old pattern of cutting output any time soon to support prices. Naimi frequently said prices were determined by the market, without giving a preferred range.

The optimum oil price, Falih told the paper, lies somewhere in between $50 and $100.

Other delegates from the OPEC nations outside the Gulf, who had misgivings about OPEC's 2014 policy shift and would like higher prices, saw the Saudi minister's comments as a sign the kingdom may be wanting a stronger market.

"It's an indication," said a second OPEC delegate. "Is this a function of their cost of production and budget requirements?"

OPEC oil revenues collapsed since its November 2014 policy shift accelerated a drop in prices, which hit a 12-year low near $27 a barrel in January and are trading close to $48 — half the level of two years ago.

A third delegate, from an OPEC country which wants the exporter group to work more actively towards supporting prices, was encouraged by the Saudi minister's remarks.

"For sure, a decent price of oil is needed to have enough investment to avoid a supply crunch and a boom in prices a few years from now," this delegate said.

"So let us hope for the best. It is good that the Saudis are realising, but after a huge loss for oil exporters."

AMMAN — Jordan Investor Confidence Index dropped in April 2016 by 1.75 points to reach 96.12 points compared to 97.87 points in March 2016. 

The Jordan Investor Confidence Index (JICI) is a monthly-issued index, published by Jordan Strategy Forum. 

All Sub-Indices of the JICI witnessed slight declines in April 2016. Firstly, confidence in the monetary system sub-index dropped from 93.79 points in March 2016 to 93.18 points in April 2016; a 0.60 point decrease. The change has come due to a decrease in CBJ’s foreign reserves by JD 176.5 million to reach JD 12,274 million in April 2016, according to a statement of the forum. 

 The sub-index of confidence in the real economy dropped by 0.55 points in April 2016, reaching 103.09 points compared to 103.63 points in March 2016. This sub-index witnessed a decrease in the number of companies registered, in spite of the small increase in the capital of companies registered, which rose to JD11.1 million in April 2016, compared with JD10 million in March 2016.

Moreover, the private sector credit relative to total deposits dropped from 60 per cent in March 2016 to 59 per cent in April, whilst the Manufacturing Quantity Production Index dropped to 156.11 points, compared to 161.8 points in March 2016.  This is in addition to a decline in the construction activity as the number of construction permits and total tax collected on real estate dropped by 15 per cent and 8.6 per cent, respectively.

Finally, the sub-index of confidence in the Amman Stock Exchange market dropped by 0.60 points to settle at 99.85 points, as opposed to 100.45 points in March 2016. 

The drop could be attributed to a decline in the ratio of shares bought by foreign investors to the shares sold by foreign investors from 3.48 in March 2016 to 1.25 in April 2016, the statement said. 

The JICI measures the confidence of investors operating in the Jordanian market through three aspects: Confidence in the Jordanian Dinar and the monetary system, confidence in the real economy and confidence in the Amman Stock Exchange market.

Changes in JICI and its Sub-Indices:
January 2016 to April 2016

AMMAN — Jordan Investment Commission (JIC) President Thabet Al Wir and EU Ambassador to Jordan Andrea Matteo Fontana discussed preparations to hold a Jordanian-EU investment forum in Amman in the last four months of the year to boost bilateral cooperation, a statement said on Wednesday.

During a meeting, they highlighted the importance of the forum, with a broad participation of public and private sector representatives, the Jordan News Agency, Petra, reported. Fontana also noted that the EU agreed to have18 Jordanian development, industrial and free zones included under the Jordanian-EU free trade agreement, stressing the EU’s support for Jordan’s economy. 

SINGAPORE — Global oil and shipping markets reacted nervously on Tuesday after an international arbitration court ruled against Beijing’s claims across large swathes of the South China Sea, fuelling geopolitical tensions in the vital waterway.

A tribunal in The Hague, Netherlands, found China had breached the sovereign rights of the Philippines and had no legal basis to its historic claims in the South China Sea, a major shipping lane between Europe, the Middle East and Africa.

The ruling will be seen as a victory by other regional claimants such the Philippines and Vietnam, but with China rejecting the ruling and saying its military would defend its sovereign rights, nerves were on edge.

Although shippers and oil traders said they did not expect an immediate impact on shipping as a result of the ruling, oil prices jumped following the findings. Brent crude futures were up over $1, or more than 2 per cent, to $47.60 per barrel at 1110 GMT.

“It is vital that merchant ships are allowed to go about their lawful business on the world’s oceans without diversion or delay. We will of course be monitoring for any interference in the coming weeks,” said Peter Hinchliffe, Secretary General of the International Chamber of Shipping in London.

The deep waters of the South China Basin between the Spratly and also-disputed Paracel Islands are the most direct shipping lane between northeast Asia’s industrial hubs of China, Japan and South Korea and Europe and the Middle East.

The geography of the region offers few economically viable alternative routes for large oil tankers or dry-bulk ships and container ships.

Esben Poulsson, the president of the Singapore Shipping Association, said any actions that restricted the right of innocent passage and freedom of safe navigation for merchant shipping would potentially drive up shipping costs, resulting in a detrimental impact on maritime trade.

Reuters shipping data shows that, counting just Very Large Crude Carrier (VLCC) super-tankers, some 25 VLCCs are passing between the disputed Spratly and Paracel islands at any time, with enough capacity to carry the equivalent of about 11 days’ worth of Japanese demand.

Some industry participants were more relaxed, however.

“It’s just pure politics,” Ralph Leszczynski, head of research at ship broker Banchero Costa said.

“China will simply ignore it, and it will not change in any way the reality on the ground. All there is at stake is access to offshore oil and gas deposits and perhaps fishing grounds,” he said.

Insurers said costs were unlikely to rise in the short term.

“We don’t currently foresee any increase in insurance costs as a result of the ruling and would be surprised to see operators being penalised by the insurance market for trading in this area,” said Andrew Brooker, founding partner, at Hong Kong marine insurance broker’s Latitude Brokers.

Neil Roberts, the manager of marine underwriting at the Lloyd’s Market Association, said the South China Sea is not listed by the LMA’s joint war committee which highlights insurance hot spots.

“Unless it is there would be no prospect of premiums rising,” Roberts told Reuters. “The shallow waters and numerous reefs in the Spratly island region means that commercial shipping is unlikely to be sailing within the territorial waters of any of the islands.”

AMMAN — The Central Bank of Jordan (CBJ) said its circular urging banks to strengthen their security to prevent breaches is precautionary. Banks are also advised to keep abreast of related-developments and the latest IT security solutions, the CBJ added.

The bank had issued a circular calling for tighter security measures so that licensed banks can avert the risk of hacking. The banking sector at the global level has experienced several hacking attempts and breaches, the last of which was the Bangladesh Bank heist where losses amounted to $120 million. 

PARIS — The Organisation for Economic Cooperation and Development (OECD) said Monday it is suspending for two months its composite leading indicators (CLIs) designed to flag turning points in economic activity due to volatility heightened by Brexit.

The OCED compiles the indicators to provide a useful tool to measure expectations of future economic activity, but it said "extreme volatility such as the financial crisis and the recent euro area crisis" reduced their effectiveness.

They cannot account "for significant unforeseen or unexpected events, for example natural disasters, such as the earthquake, and subsequent events that affected Japan in March 2011", which likewise saw CLI data suspended for two months.

"The outcome of the recent referendum in the United Kingdom is another such significant unexpected event, which is affecting the underlying expectation and outturn indicators used to construct the CLIs regularly published by the OECD," the organisation said.

The OECD added that, in the volatile post-referendum context, the underlying data that capture subsequent and potentially significant changes in expectations will not be available until early September. 

"As a consequence, to avoid providing an inaccurate and potentially misleading assessment of the short to medium term outlook, it has been decided to suspend the release of the OECD CLIs until 8 September 2016."

Following the referendum, the OECD forecast "major consequences for the UK itself, the EU and the international community”.

It added that, although it would not have recommended a Leave vote "the focus must now shift to dealing with the outcome of this democratic process" to ensure the transition period is as smooth as possible.

DUBAI, United Arab Emirates — One of the Middle East’s biggest carriers, Qatar Airways, announced net profits of $445 million in 2016, up from $103 million the previous year. The airline’s revenue rose from $9.3 billion in 2015 to $9.6 billion.

Qatar Airways Group Chief Executive Akbar Al Baker said Sunday it was the 19-year-old airline’s best fiscal year to date. The airline added 13 new destinations this year to fly to more than 150 cities worldwide. It also launched direct flights from its base in Doha to Atlanta, home to the world’s busiest international airport.

Qatar Airways operates a fleet of 186 aircraft, including the new Airbus A350 XWB, out of its hub in the vast new Hamad International Airport in Doha, which is preparing to host football’s World Cup in 2022.

SHANGHAI — In the face of a “worrying” rise in protectionism, trade ministers from the world’s major economies have agreed to cut trade costs, increase policy coordination and enhance financing, China’s Commerce Minister Gao Hucheng said on Sunday.

The Group of 20 trade ministers, who wrapped up a two-day meeting in Shanghai on Sunday, approved a broad trade growth strategy aimed at reversing a slowing in global trade, and backed guiding principles for global investment policymaking.

“The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth. Downside risks and vulnerabilities persist,” the ministers said in a joint statement.

“We agree that we need to do more to achieve our common objectives for global growth, stability and prosperity.”

The spectre of protectionism has loomed large over global trade amid sluggish economic growth and is a pressing concern for China.

The country’s huge, but struggling steel sector has relied on exports to offset the impact of slowing domestic demand, but it has been accused of using unfair pricing to push foreign competitors out of business.

The ministers discussed the need to address overcapacity, particularly in the steel sector, but some disagreed about the need for specific new commitments to resolve the problem, said one senior trade official involved in the talks, declining to be identified because details of the discussions had not been made public.

The joint statement reflected China’s concerns that the country was being singled out for blame for a glut that has led to a collapse in global prices, noting instead that excess capacity in steel and other industries is “a global issue which requires collective responses”, and that subsidies and government support could cause distortions.

The United States has been a vocal critic of China’s excess capacity, saying its pledges have not gone far enough to resolve the problem.

US Trade Representative Michael Froman said in a statement that the G-20 had “added to the chorus of voices, calling for tackling the root causes of excess capacity for the benefit of both developing and developed countries”.

Chinese trade officials have repeatedly stressed that the country has been the victim of overzealous anti-dumping actions by foreign countries, which fail to take into account Chinese efficiency or its low labour and production costs.

The trade growth strategy adopted by the ministers spelled out broad principles for stimulating trade, including lowering costs, boosting trade finance and stimulating the service sector.

The investment policymaking guiding principles urged governments to avoid protectionism in relation to cross-border investment and establish “non-discriminatory, transparent and predictable” conditions for investment.

Global foreign exchange rates, in flux since Britain’s referendum to leave the European Union, were not mentioned in the joint statement, and the senior trade official involved in the talks said the issue had not been discussed.

On Britain’s exit vote, UK and EU representatives in Shanghai were at pains to stress that they would come up with a “sensible and mature new arrangement”, South Africa’s Minister for Trade and Industry Rob Davies told Reuters on Saturday.

AMMAN — Jordan Securities Commission (JSC) on Sunday said regulations on the trading of stocks of companies that are not listed on the Amman Stock Exchange (ASE) or delisted companies will become effective in the first week of August.

These companies’ shares, known as OTC (Over the Counter), will be traded at the ASE through financial brokers as soon as technical amendments are introduced to the electronic trading system.  JSC President Mohammad Hourani expected the move to have a positive impact on the securities market and overall trading.