Business

AMMAN — Amman Chamber of Commerce (ACC) President Issa Murad on Tuesday said the chamber will organise an official visit for a "huge" Jordanian economic delegation to visit Tunisia next month in cooperation with chambers of commerce in Tunis, Sousse and Sfax, according to an ACC statement. 

In the statement, Murad described bilateral relations as historic and deep, expressing hope that the recent visit of Tunisian President Beji Caid Essebsi to the Kingdom will bring a new phase of bilateral economic and commercial cooperation. 

The delegation will discuss developing relations between the business community in the two countries, establishing commercial and investment partnerships and expanding commercial exchange. 

The ACC president referred to several recommendations to develop commercial relations, including intensifying communication and joint work through exchanging legislation as well as economic and investment brochures to bring forward available opportunities for both sides and clarify the demands and conditions imposed on the entry of goods to their markets. 

He urged encouraging the exchange of investments in the commercial, production, service and financial sectors, considering that a basic way to encourage the exchange of goods and services.

He encouraged using regional and international agreements that Jordan is a signatory to because they bring "huge" investment and exporting opportunities for Jordanian commercial partners. Moreover, he advocated promoting those opportunities to companies in Tunisia. 

The importance of enhancing the role of diplomatic commissions in Jordan and Tunisia was highlighted by Murad, who stressed also the importance of promoting national products, resources and economic capabilities available to both countries and encourage the activities of the private sector to cooperate in the field of joint investment as well as sending economic delegations on the private and public levels. 

Murad stressed the importance of holding exhibitions to bring promote products of the two countries as well as establish regular transport lines between them to reduce costs and durations and benefit from the Agadir Agreement between Jordan, Egypt, Morocco and Tunisia to enhance exporting chances from Jordan and Tunisia to the European market. 

He said there are many economic and commercial agreements with the most important one being the Grand Arab Free Trade Zone Agreement, in addition to agreements that connect the private sector in both countries, including the one signed between the ACC and the industry and commerce chambers in Tunis, Sousse and Sfax. 

Murad called for enhancing bilateral meetings between the commissions of the private and public sectors and their representatives of traders, industrialists, and businesspeople, voicing his chamber's readiness to offer full logistic support to any Tunisian economic party that sends commercial delegations to Jordan. 

Jordan has many productions and goods that meet the demands of the Tunisian market like medicine, phosphate, fertilisers, potash, and Dead Sea salts and products, Murad said, adding that the Kingdom's exports to Tunisia stood at around JD8 million during the past eight months whereas imports stood at JD4 million. 

DUBAI — A projected long-term drop in oil prices will drive fiscal reforms in energy-dependent Gulf states and spur public borrowing, Moody's Investor Service said on Tuesday.

The ratings agency also revised downward its projections for oil prices from $65 a barrel to average $55 this year and $53 dollars in 2016.

The six-nation Gulf Cooperation Council (GCC) states grouping Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, depend on oil for around 90 per cent of their revenues.

"We expect that the impact of lower hydrocarbon revenues on GCC public finances will spur policy adjustments in 2016," said Steffen Dyck, a VP-senior analyst at Moody's.

"These could include reductions in subsidy spending and measures to broaden the non-oil revenue base," he added.

The UAE took the lead in June by liberalising fuel prices. Kuwait lifted subsidies on diesel and kerosene and other states are planning subsidy cuts.

Oil prices have fallen by around 60 per cent since June 2014 due to oversupply and weak global demand.

As a result, GCC states are expected to lose $300 billion in oil revenues, said the International Monetary Fund.

The oil price drop caused aggregate nominal hydrocarbon gross domestic product (GDP) for the six GCC states to fall by 11 per cent between 2012 and last year to $685 billion, Moody's indicated.

The combined current account surplus slipped to 14 per cent of GDP from almost 25 per cent during the same period.

"We expect that the GCC region will post a combined fiscal deficit of close to 10 per cent of regional GDP in 2015 and 2016, respectively, compared to an average aggregate surplus of almost 9 per cent in the years 2010 to 2014," Moody's said.

That would translate into a deficit of over $140 billion this year.

Moody's expects that all GCC states will borrow to face budgetary shortfalls.

"Overall [GCC] government gross borrowing needs will likely average about 12.5 per cent of regional GDP, or around $180 billion per year in 2015 and 2016," Dyck said.

Saudi Arabia and Qatar have already issued bonds.

Some GCC states, mainly Saudi Arabia, have started withdrawing from foreign reserves estimated at $2.7 trillion by the International Institute of Sovereign Funds.

AMMAN — Joint agreements signed by the governments of  Austria and Jordan and by the chambers of commerce in both countries,  should be utilised by businessmen to increase the bilateral trade volume, Amman Chamber of Commerce (ACC) President Issa Murad said Monday.

Receiving an Austrian commercial delegation visiting the Kingdom to discuss ways to enhance commercial exchange, Murad said the trade balance between both countries does not suit the brotherly bilateral relations.

Bilateral meetings between companies and businesspeople from both countries were also held to explore and implement investment opportunities, according to an ACC statement.

Murad said this visit reciprocates one the ACC organised to Austria in May, with the participation of representatives of commercial and logistic sectors such as tourism, communications and energy.

He added that holding bilateral meetings would lead to achieving positive results in developing economic relations, investment growth and commercial exchange.

The commercial exchange between the two countries is “very low”, said Murad, noting that Jordanian exports to the European country in 2014 reached a total of $1.2 million, compared to Jordanian imports worth $81.5 million.

He indicated that only four Austrians have partnerships with Jordanian peers in companies registered with a total capital of JD15.7 million,  making it important to develop the level of ties and translating them into joint projects, Murad added, noting that the Jordanian economy has many investment opportunities in vital sectors.

The ACC president also called for activating means to develop bilateral relations, such as enhancing the exchange of delegations and specialised commercial visits by businesspeople, merchants and industrialists, in addition to drawing up proper mechanism for exchanging information and commercial opportunities.  

Over the past years, the governments of both countries have signed several agreements aimed at stimulating bilateral relations and enhancing joint interests, Murad remarked.

He referred to an agreement on encouraging and protecting investment, another on industrial and technical cooperation, and an air transportation agreement, in addition to having other agreements between both countries’ chambers of commerce and industry, he said.

Murad also invited Austrian businesspeople, merchants, importers and exporters to get acquainted with the Jordanian investment-attracting environment and to benefit from incentives the Kingdom offers to foreign investors.

In this regard, he said that the investment environment in Jordan is supported by security, stability and several modern laws that encourage local and external investments, especially in qualified industrial estates whose products can penetrate the US market without customs fees or quotas.

Jordan is also a signatory member of free trade agreements that offer markets with a total number of 1 billion consumers, such as the European Free Trade Association, the Grand Arab Free Trade Agreement and free trade agreements with the US, the European Union, Singapore, Canada and Turkey, Murad indicated.

He praised the intensified efforts and the important economic roles of both countries’ embassies and chambers of commerce in enhancing bilateral commercial ties, according to the statement.

The president also expressed ACC’s readiness to cooperate and coordinate with Austrian institutions, investors and individuals who have intentions to visit Jordan by providing them with all forms of support and information that may contribute to enhancing the commercial exchange. 

AMMAN — National exports to the countries of the Greater Arab Free Trade Area and European Union countries declined by nearly 11 per cent during the past eight months, standing at JD1.7 billion compared to JD1.9 billion in the same period in 2014, according to the Department of Statistics (DoS).

Exports to the Iraqi market went down by 36 per cent, affecting the overall exports to the Greater Arab Free Trade Area in comparison with exports to the Saudi market, which increased by 12.5 per cent in a “record time”, the Jordan News Agency, Petra, reported.

As for the rest of the commercial partners and economic blocs, national exports to the counties of North America Free Trade Agreement increased by 8.4 per cent in the past eight months, standing at JD702 million compared to JD647 million in the same period last year, whereas national exports to Asian non-Arab countries dropped. 

FRANKFURT — Germany's real estate sector is riding a wave of mergers and acquisitions, as market players seek to take advantage of low interest rates and the relative lag in property prices compared with those in neighbouring countries.

Last week, the sector's number one Vonovia threw its hat into the ring, announcing it was prepared to stump up as much as 14 billion euros ($16 billion) for rival Deutsche Wohnen if it failed to tie the knot with the number three, LEG Immobilien.

Deutsche Wohnen dismissed Vonovia's advances as "uninteresting and inappropriate", adamant that its 5-billion-euro merger with LEG would go ahead.

But the deal still needs to be approved by the shareholders of Deutsche Wohnen and some of them appear to believe the price is too high. 

The current battle is the biggest so far in a sector that has been flowing with mergers and takeovers for months. 

Since the beginning of the year, Vonovia, formerly known as Deutsche Annington, has got its hands on both rivals Gagfah and Suedewo for nearly six billion euros, boosting its portfolio to 370,000 residences across Germany. 

"This process of consolidation has gathered momentum over the past three years," indicated Konstantin Kortmann, head of the German operations of US group Jones Lang LaSalle. "Of the numerous small and mid-sized companies in the sector in Germany, there are still only five or six larger ones left." 

Decentralised market 

The momentum is being driven by the historically low level of interest rates in Europe, which make the financing of such deals cheap. 

But the steady rise in rents in Germany in recent years, albeit from levels lower than other European capitals, is another key factor, as unlike in other countries where rents are stagnating, they look set to continue heading up.

There are other aspects promising juicy returns for real estate investors. 

In Britain and France, for example, most of the opportunities are concentrated around the capitals of London and Paris.

But Germany's federal state structure means there are a number of cities — Berlin, Frankfurt, Hamburg, Munich or Stuttgart — that offer attractive opportunities to investors, said Christian Schulz-Wulkow, real estate expert at EY. 

"On an international comparison, price levels are still relatively low in a number of German cities, particularly Berlin," indicated Juergen Michael Schick, head of the German real estate federation. 

In the German capital, rents still average at just over 10 euros per square metre, compared with 22 euros in Paris or 70 euros in London.

Even in Munich, reputedly Germany's priciest location, rents average 18.05 euros per square metre.

Housing refugees

But not everyone is pleased about the current trend in Germany. 

"At the moment, we have real problems in the housing market," said Ulrich Ropertz, head of the German tenants' association.

The main problem was the availability of affordable rents, he told the business daily Handelsblatt in an interview.

"These problems will intensify and increase with the influx of refugees," Ropertz argued. Germany is expecting to receive at least 800,000 asylum seekers this year. 

"Companies are currently engaged in buying each other, but they're not building any new housing," Ropertz complained. "And the modernisation and upkeep [of the residences] threatens to fall by the wayside."

Nevertheless, industry experts believe the wave of mergers and acquisitions will continue. 

"Real estate groups are still comparatively small and the housing construction sector is still quite limited in Germany, compared with other countries," said Robert Halver, head of market research at Baader Bank.

"In this context, they'll try to form large alliances to unlock their strength," Halver added.

Schulz-Wulkown said there was not much more opportunity for tie-ups between listed real estate companies, so non-listed companies could increasingly become takeover targets.

AMMAN — Aqaba International Industrial Estate (AIIE) has been named in FDI Magazine’s list of “Best in Class” winners among global free zones.

It was commended in three categories: facilities upgrades, infrastructure improvements, and China strategy and engagement, according to an AIIE statement.

In its October/November issue, FDI Magazine, which is part of the Financial Times group, included both special economic zones and industrial estates in its list.

In 2014, Aqaba Special Economic Zone (ASEZ) and AIIE came in ninth and 10th respectively in FDI Magazine’s ranking of Middle East free zones.

Among its achievements in relations with China, AIIE introduced ASEZ to investors in south east China of its own accord. It also signed a joint venture with the Shenzhen Chamber of Investment, and ASEZ and opened a Shenzhen office, the statement said.

AIIE’s managing entity, the Shenzhen Chamber of Investment and Aqaba Development Corporation have also signed a memorandum of understanding to develop and market an AIIE expansion area as a joint Shenzhen-Aqaba project.

The statement added that AIIE has so far created 1,000 new jobs and attracted investment exceeding $300 million, with these figures expected to rise to 3,000 jobs and $700 million of investment once the estate is full.

TUNIS — Tunisia's tourism-dependent economy, badly affected by two deadly jihadist attacks on foreign tourists this year, has been helped along by olive oil and date exports.

The North African country's economy has "avoided the worst" this year thanks to a drop in global oil prices and a sharp increase in "olive oil and date exports," Finance Minister Slim Chaker said at the end of last week.

Olive oil exports reached 300,000 tonnes by the end of last month, bringing in an estimated 1.9 billion dinars (850 million euros, $975 million) compared to less than 500 million dinars for the whole of last year, according to the agriculture ministry.

Some 100,000 tonnes of dates were exported by the end of September, generating revenue of 462 million dinars compared to 380 million dinars for the whole of 2014, the ministry's Aniss Ben Rayana indicated.

Tunisia's economy has remained stagnant since the 2011 popular uprising that toppled dictator Zine Al Abidine Ben Ali.

The finance ministry has forecast just 0.5 per cent growth this year, half the figure for last year.

Tunisia based its draft budget on projected growth of 2.5 per cent next year, just half of growth mentioned in a recent development plan for 2016-20.

The country's key tourism sector, which contributes 10 per cent of its gross domestic product (GDP), has been badly shaken by an attack on foreign tourists at the National Bardo Museum in the capital in March and a beachside massacre near the coastal city of Sousse in June.

Losses in the tourism were projected at $515 million or more for 2015 after the Sousse attack

The number of visitors from Europe has been halved since January, and several international chains are to close their hotels over the winter season.

An industry official said Sunday that at least 70 hotels have closed in Tunisia since September after the two attacks on foreign tourists, and more are expected to follow suit.

"The situation is very sluggish," Radhouane Ben Salah, the head of the Tunisian Federation of Hotels, told private Mosaique FM radio.

With reservations at "no more than 20 per cent, 70 hotels had to close since September because the lack of clients and more are expected to do the same," he said.

Ben Salah expected unemployment to climb as hotel staff would be forced out of work.

Joblessness already stands at nearly 30 per cent, with the number even higher among youths, and one in six Tunisians lives below the poverty line.

The country's key tourism sector contributes to 10 per cent of the gross domestic product, and employs 400,000 people, directly or indirectly.

But it has been badly shaken by attacks on foreign tourists.

Ben Salah said hotel owners and the government had agreed to look after employees who would be forced out of work.

He indicated that the government would provide them with a 200-dinar monthly subsidy (around 90 euros, $102) and social security coverage for a renewable six-month period.

This summer, Tunisia's tourism industry relied mainly on local holidaymakers or those from the region, namely from neighbouring Algeria.

Several countries evacuated their citizens from Tunisia after the beachside massacre in June and others, including Britain, have warned against travel to the North African nation.

Thirty of the 38 tourists killed in June near Sousse were British.

Tunisia, which hopes to reduce its public deficit by 3.9 per cent in 2016, announced last month that it would ask the International Monetary Fund for a new aid package at least equal to a $1.7 billion credit line granted in 2013.

Tunisia now will need $1.53 billion, or 3 billion dinars, in external financing for 2016, Chaker said.

"Our total needs in 2016 will be 6 billion dinar, including 3 billion dinar from external loans," Chaker told reporters. "We expect next year to launch a delayed sukuk Islamic financing bond for 1 billion dinar."

Inflation is forecast to slow to 4 per cent next year from the 4.5 per cent expected in 2015.

Energy subsidies will decline from 850 million dinar this year to 550 million dinar next year. As part of a plan to ease fuel subsidies gradually, Chaker said, Tunisia will begin a new system of automatic adjustments to petrol prices.

International lenders want more economic reforms to match its political progress.

AMMAN — Evolving into a mega-business conglomerate is now a momentous ambition sought by Jordan Masaken for Land & Industrial Development Projects, known as Masaken Capital.

According to a disclosure sent last week to the Jordan Securities Commission (JSC), the company aims to broaden its real estate development, build up investments and bolster growth in services.

Such extensive plans and strategies will be complemented by acquiring influential stakes in financial establishments and businesses that provide services, and by forging strategic partnerships with major international corporations, Masaken Capital indicated in the disclosure.

“This enlargement seeks to establish a mammoth economic body that would contribute to support the national economy and be capable of creating rewarding job opportunities for the youth and of attracting local, regional and international investments,” it said.

The disclosure added that the board of directors discussed the interest expressed by many Jordanian, Arab and foreign investors as well as companies and investment funds to join in the suggested enlargement and the capability of the company to utilise the proposed capital in economically feasible projects in light of the opportunities available locally, regionally and internationally.

“As a result, the board of directors decided to invite the shareholders to an extraordinary general assembly meeting on November 7,” the company continued.

The board is recommending that the capital of Masaken Capital be raised from JD12.24 million to JD700 million, with the JD687.76 million increase be in cash and in kind allocated to foreign and strategic investors and the company’s shareholders.

Another disclosure informed the JSC that there was nothing significant to justify the surge in the share price of the company other than the announcement to increase capital and expand operations, and to open regional offices in Saudi Arabia and the United Arab Emirates (UAE).

The share price of Jordan Masaken closed at JD4.840 at the end of last week, noting that the price from 2010 until 2014 averaged JD0.650.

Jordan Masaken’s 6th annual report showed a series of losses over the past six years. The losses at the end of 2013 accumulated to JD5.8 million, an amount that was written off by reducing the capital from JD18 million to JD12.2 million.

Losses in later years until the end of June 30, 2015 accumulated to JD0.6 million.

Mid-year 2015 financial statement revealed that of the JD14.4 million in total assets, JD13.2 million were net real estate investments which include Al Haitham Commercial Complex, a multi storey building valued at JD1.5 million.

At present, the company employs eight persons and generates most of its earnings from Al Haitham Commercial Complex which is owned by by Al Hijaz Masaken for Real Estate Investment and Development, a wholly owned subsidiary of Jordan Masaken.

Other subsidiaries under Jordan Masaken include Al Serou Masaken for Investment and Real Estate Development (100.00 per cent), Green Masaken for Investment and Trade (100.00 per cent), Luxury Masaken for Investment and Real Estate Development (100.00 per cent), Amman Masaken for Real Estate Development (100.00 per cent), Masaken Balaama for Real Estate Development (100.00 per cent) and Masaken Academy Company for Financial Consulting & Training (100.00 per cent).

The other item of importance in the mid-year balance sheet was JD2.3 million in short and long-term bank credit facilities against a hypothecation on Al Haitham Commercial Complex.       

The 6th annual report set the company’s capital investment at JD13.4 million and mentioned that the highest risk facing the company was lower demand for developed lands and other real estate projects.

“There is also the possibility that demand for commercial office rentals declines within  the commercial complex owned by the company because there is a large number of commercial compounds available for rent in Amman,” the report said.

It added that due to the general slowdown in the Jordanian economy, the company will reduce these risks through investment diversification, strategic partnerships and broadening  income resources.  

Earlier this month, the company announced that Hasan Abdullah Ismaik bought 4,535,000 shares, representing 37.05 per cent of its equity and that he was elected board chairman.

The second largest shareholder, according to latest data, was Mohammed Abdullah Rashed Saeed Al Thaheri who owned 2,631,497 shares or 21.5 per cent of the capital.

Kifah Ahmad Mustafa Al Maharmeh came in third with a 13.69 per cent stake, or 1,675,886 shares.

Ismaik, the former chief executive officer of Dubai’s Arabtech,  plans to hire banks for a secondary equity listing next year, he told Reuters last week.

Masaken Capital will hire an international investment bank, “the likes of JP Morgan or Deutsche Bank, and a local Jordanian bank like Arab Bank” to advise on a listing in the UAE or Saudi Arabia, Ismaik said.

The offering will involve new shares, he added, without specifying what percentage of the company’s shares would be sold in the secondary offer, noting that one of the “big four” accountancy firms would be hired soon to advise on the procedure.

Masaken will also soon announce a “big” acquisition in the UAE, Ismaik said to Reuters, declining to provide further details.

The Jordanian businessman resigned from Dubai-listed Arabtec in June 2014 amid rumours of a fallout between him and Abu Dhabi state-owned Aabar Investments, which holds a significant stake in the Dubai contractor.

Ismaik, who still retains an 11.8 per cent shareholding in Arabtec according to bourse data, said there would be no conflict of interest between his ownership in Arabtec and his new position at Masaken.

AMMAN — Citi announced Saturday in a press statement that it has extended  a Jordanian dinar loan, equivalent to $3 million, to Tamweelcom, a renowned microfinance institution in the Middle East and North Africa region, to support the economic advancement of its entrepreneur clients and the expansion of the microfinance sector in Jordan.

"This loan is Citi’s third to Tamweelcom, and is part of the global partnership between Citi Inclusive Finance and the Overseas Private Investment Corporation (OPIC), the US government’s development finance institution, to jointly provide funding to microfinance institutions in emerging markets," the statement said. 

Citi Inclusive Finance works across Citi businesses globally to develop solutions that enable the bank, its clients and partners to expand access to financial services and advance economic progress in underserved market segments.

“Through this partnership, Tamweelcom hopes to support its growing number of clients and develop its outreach,” said Ziad Al Refai, executive director of Tamweelcom. Mayank Malik, chief executive officer Citibank NA Jordan & Iraq, said: “This transaction leverages Citi’s global network, including our long-term partnership with OPIC, as well as Tamweelcom's strength to deliver much needed access to long-term credit in Jordan, hence enhancing the Kingdom's financial inclusion.” 

SHANGHAI — The number of billionaires in China has overtaken that of the United States for the first time, an annual survey said Thursday, calling it a "turning point" for the super-wealthy.

Communist-ruled China now has 596 billionaires, up a "staggering" 242 over the last year, Shanghai-based luxury magazine publisher Hurun Report indicated, surpassing the 537 Americans.

"The world used to look to American entrepreneurs... for inspiration. This year, 2015, is a turning point," Hurun Report Chairman Rupert Hoogewerf told AFP. "This is the first year we've seen they've been eclipsed. They are being overtaken by Chinese, and not just a little bit." 

The number of Chinese billionaires would increase to 715 if those from Hong Kong, Macau and Taiwan were included, the survey pointed out.

"In 2015, the entrepreneurs are Chinese, they are not American. We have American ones, but the king is Chinese," Hoogewerf said.

Real estate and entertainment magnate Wang Jianlin dethroned founder of e-commerce giant Alibaba Jack Ma as the country's richest person, Hurun's annual wealth ranking showed.

Wang, who founded conglomerate Wanda, saw his fortune jump more than 50 per cent to $34.4 billion, helped by a surge in the stock price of a listed unit.

Wang is known outside China for a string of overseas acquisitions including the organiser of Ironman extreme endurance contests, Swiss sports marketing group Infront, and a stake in Spanish football club Atletico Madrid.

He burst into the spotlight in 2012 by buying US cinema chain AMC Entertainment for $2.6 billion.

Wang took the top spot back from Ma, executive chairman of Alibaba, because of a collapse in the Internet company's New York-quoted shares, which were the world's biggest initial public offering when it listed last year. Ma's wealth still stands at $22.7 billion.

Beverage tycoon Zong Qinghou of Wahaha remained in third place with just over $21 billion while Pony Ma, founder of Internet giant Tencent which operates popular messaging app WeChat, took fourth place with a little under $19 billion.

Lei Jun of smartphone maker Xiaomi, which is seeking to challenge Apple, jumped five places to fifth by doubling his wealth to more than $14 billion.

Yan Hao of road builder China Pacific Construction was sixth while the founder of search engine giant Baidu, Robin Li, dropped to seventh amid worries over his company's huge spending to expand its business.

"Despite the slowdown in the economy, China's richest have defied gravity, recording their best year ever," Hoogewerf said in a statement.