Business

AMMAN — Jordan and Romania on Saturday signed three documents aimed at promoting business opportunities in both countries to further enhance bilateral economic growth, Industry, Trade and Supply Minister Maha Ali said Sunday.

During a meeting organised by the Jordan Chamber of Commerce (JCC) to discuss ways to enhance economic relations with Bucharest in the presence of a high ranking official Romanian delegation headed by Prime Minister Victor Ponta, the minister added that two memoranda of understanding between both countries' private sectors were also signed.

The first aimed at enhancing bilateral cooperation in the ICT field, and the second to devlop cooperation at the public sector level.

"We look at Romania as a gateway to European countries for Jordanian businesses and industries, and we look forward to fostering joint partnerships in areas of mutual interest," Ali told attendees who included representatives of commercial and industrial sectors from both countries.

JCC Chairman Nael Kabariti underlined the importance of the Romanian delegation's visit and expressed the Jordanian private sector's keenness on bolstering bilateral cooperation at the ICT, aviation, health, energy and bio-energy levels, among others.

Kabariti also voiced hope the Romanian government would solve visa issues for Jordanian businessmen, noting that a commercial delegation failed twice in receiving visas for business trips to the European country. 

Ponta expressed concern over the low level of economic relations between Jordan and Romania despite the good friendship ties on the political level, noting that some 30 years ago both countries had better commercial ties, especially at the industrial and agricultural levels.

"It is [the visit] a good opportunity to start again with developing relations, especially that Romania is now a member of the European Union and can open all the European market for Jordan," the premier said.

The prime minister added that Economy, Trade and Tourism Minister Mihai Tudose, who is a member of the current delegation, will be back in Amman in one month heading a delegation of the Romanian Chamber of Commerce and businesspeople to further boost bilateral economic cooperation.

Regarding visa issues, Ponta promised to facilitate procedures for Jordanian businesspeople to apply to visas online and receive confirmations within 24 hours.

According to a JCC statement, made available to attendees, Jordanian national exports to Romania in 2013 reached around $6.11 million and increased by 14.4 per cent in 2014 to stand at $6.99 million.

The statement, based on figures from the Department of Statistics, showed that Romanian exports to the Kingdom in 2014 stood at $372.39 million, marking a 36.5 per cent increase in comparison with 2013, when Bucharest exports were worth $272.74 million.

Jordan's main exports to Romania include fresh and frozen vegetables, medicaments and skin care products, whereas major Romanian exports to the Kingdom include sheep, wood and paper, tubes and pipes and calcium carbide, the statement added.

AMMAN — The banking sector in the Kingdom should play a big role to uphold corporate social responsibility as an essential part of its work, Central Bank of Jordan Governor Ziad Fariz said Sunday.

Inaugurating the fourth forum of social responsibility for banks, he praised the efforts exerted by Jordanian banks to contribute to launching many social and humanitarian initiatives, referring to the banks' initiatives of establishing Pilot Muath Kasasbeh Scholarship Fund.

The Association of Banks in Jordan (ABJ) Deputy President Mousa Shihadeh said the forum is an annual event for ABJ to highlight and enhance its social responsibility, exchange experience and expertise and discuss ways to develop this role.

Shihadeh noted that banks in 2014 employed some 20,000 employees and trained 43,000 others as part of its role in supporting the national economy and contributing to sustainable, comprehensive development.

In 2014, banks in Jordan spent around JD43.2 million on social responsibility initiatives, that constituted 8 per cent of the banks' net profits in that year, he indicated.

Such initiatives, according to Shihadeh, included the participation in a project to develop the financial culture which was launched by the CBJ with a support of JD6 million, in addition to carrying out maintenance to old computers and donating them to charitable societies.

ABJ also presented annual support to the Goodwill Campaign, Al Hussein Fund for Excellence, Al Aman Fund for the Future of Orphans and the Jordanian Hashemite Fund for Human Development, the ABJ official said.

Also on Sunday, ABJ launched its guidebook of banking services, products and solutions offered by Islamic banks working in the Kingdom.

The guidebook, jointly prepared by ABJ and Islamic banks, is an important step forward to shed light on Islamic banking services, especially under the growing demand on them in local, regional and international markets.

ABJ President Adli Qandah said the guidebook, the first of its kind in Jordan and the region, is an initiative from ABJ to serve its members and clients.

AMMAN — Jordan Express Tourist Transport (JETT) is banking on public transportation to offset losses resulting from its tourist transport activities which include the Hajj.

JETT operates public transportation routes between cities in Jordan and  with other cities outside the Kingdom  in accordance with authorisations granted by concerned parties.

According to a disclosure sent to the Jordan Securities Commission, the company earned JD7 million during the first half of this year, 18.6 per cent less than the JD8.6 million generated during the first six months of 2014.

Of the JD7 million earned between January-June 2015, JD1.5 million came from tourist transport and JD5.5 million from public transportation, compared to JD2.4 million and JD6.2 million respectively in the same period of last year.  

Tourist transport on June 30, 2015 was in the red with a JD0.5 million loss after the deduction of operational expenses, but the gross profit from public transportation amounted to JD2.7 million.

After taking into consideration administrative expenses, financing costs and other gains or losses, the mid-2015 loss from tourism transport amounted to JD1.6 million compared to a JD0.9 million loss registered on June 30, 2014.

The operations from public transportation, after subtracting the additional expenses and costs as mentioned above, resulted in JD1.9 million profit compared to a JD2.3 million profit posted during the first half of last year.  

As such, collective gross profit stood at JD2.2 million, 26.7 per cent down from JD3 million during January- June 2014 and after-tax profit plunged 78.6 per cent to JD0.3 million on June 30, 2015 from JD1.4 million on June 30, 2014.

JETT's 22nd annual report covering 2014 operations, showed that the company was able to maintain a steady performance with a JD1.7 million after-tax profit and even higher earnings which reached JD16.3 million (JD15.8 million in 2013).

Nonetheless, a breakdown of last year's earnings and profit showed a negative performance in tourism transport as revenue declined by 9 per cent to JD4 million (JD4.4 million) and the loss increased to JD2.6 million (JD2.1 million).

Public passenger transport counterbalanced the drawback with higher revenue and profit that reached JD12.3 million (JD11.4 million) and JD4.4 million (JD3.8 million).   

In the report, the board of directors expected 2015 earnings to hit around JD17.5 million, but also predicted a disappointing business for tourist transport.  

In a foreword, Chairman Munir Nassar wrote that the company built and equipped two petrol stations in the Jordan Valley (Ghor) and Aqaba so as to save a sizeable amount in fuel costs.

Malek Haddad, JETT's  general manager, told the shareholders during the general assembly meeting that the company plans to broaden its income resources with more petrol station projects.

Nassar, responding to demands for a higher rate of cash dividends, said it is not possible to distribute more than 10 per cent in light of expansion and development of new projects.

According to the external auditor's mid-year interim review of the consolidated summary of financial statements, the company bought property and equipment worth JD1.1 million during the first six months of this year. In 2014, the company sold eight old-model buses.

The chairman highlighted other achievements pointing out that in 2014 the company opened a new office in the Raghadan tourism compound (downtown Amman) to serve incoming individual tourists.

Nassar mentioned in the annual report that “JETT introduced a new tourism activity with the City Tour Bus which provide an open-topped bus service for sightseeing in Amman and Aqaba”.

When the company was contacted for further details, The Jordan Times was informed that the City Tour Bus was now operating in Aqaba and will be running in Amman at a later date.

The annual report listed three key risks facing the company, chiefly the repercussions arising from the political events and disturbances as well as the changes in neighbouring countries and their impact on various economic sectors.

Secondly, it deplored government policies related to transport, especially those concerning taxation and indicated that in this regard JETT was treated multifold compared to others in the transport business.

Thirdly, the report mentioned harmful price competition as another main risk.

In highlighting JETT's competitive position, the disclosure estimated the company's market share of tourism transport at 31 per cent indicating that it owns 109 tourist buses, or 17 per cent of the 641 buses operated by eight companies specialised in this type of activity.

The company estimated its market share of the public transport at 30 per cent indicating that, in 2014, 2.3 million passengers used its 97 buses which represent 4 per cent of the 2,500 public transport buses operating in the Kingdom.  

The report referred to a study, conducted by the Land Transport Regulatory Commission, which showed that 45 million local passengers use public transportation in and between cities in Jordan and that 16 per cent of those, or 7.2 million, use buses.

Financially, the company calculated its capital investment at JD18.4 million noting that its registered and paid up capital was JD10.8 million.

By adding mandatory and voluntary reserves, each amounting to JD2.3 million and retained earnings (JD3.3 million), shareholders equity reached JD18.9 million on June 30, 2015.

JETT's liabilities totaled JD4.3 million, of which JD2.8 million were accounts payable and the remaining JD1.5 million were short and long-term debts to Cairo Amman Bank.

Total assets amounted to JD23.2 million, JD12.8 million of which were property and equipment, JD4.6 million were inventory and receivables and JD3 million were financial assets at fair value.

At the end of last year, JETT's workforce totaled 636 employees, 322 of whom worked in a subsidiary that operates public transportation routes between cities in and outside Jordan and another subsidiary that provides VIP transport service and ordinary public transportation for passengers traveling the Amman-Aqaba-Amman route.

26 shareholders accounting for 68 per cent of JETT's equity attended the general assembly meeting that approved the distribution of JD1.1 million in cash dividends at a rate of 10 per cent, a consistent figure since 2010.

Key shareholders at the end of last year included Arab Supply and Trading Corporation or ASTRA (21 per cent), Cairo Amman Bank (10 per cent), Bank of Jordan (10 per cent), Al Massira Investment Company (6 per cent), Al Zafer Investment Company (6 per cent) and Khaled Hashem Al Shawwa (5 per cent).

AMMAN — Jordan Chamber of Industry President Ayman Hatahet on Saturday called on the government to lower electricity charges for the industrial sector in response to the international decline in oil prices.

The sector is currently in dire need to enhance its competitiveness to help it penetrate new markets to compensate for those that are no longer available for national exports, such as Iraq, Syria, Lebanon and Turkey, Hatahet said.

The industrial sector plays a vital role in the economic development process, directly accounting for 25 per cent of gross domestic product (GDP), and for 40 per cent of GDP when indirect contributions are taken into consideration, he added.

At around JD2.7 billion, he indicated that local industries accounted for more than 90 per cent of national exports in the first seven months of the year, noting that national exports in 2014 reached JD5.2 billion.

The local industry employs nearly 250,000 workers, more than 18 per cent of the workforce in Jordan, Hatahet said pointing out that the sector created around new 40,000 jobs over the past five years, ranking third, after the health and education, in terms of creating new jobs.  

NEW YORK / LONDON / SINGAPORE — The global silver-coin market is in the grips of an unprecedented supply squeeze, forcing some mints to ration sales and step up overtime while sending US buyers racing abroad to fulfill a sudden surge in demand.

The US Mint began setting weekly sales quotas for its flagship American Eagle silver coins in July because it can't meet demand, and the Canadian mint followed suit after record monthly sales in July. 

In Australia, the Perth Mint sold a record of more than 2.5 million ounces of silver this month, nearly four times more than in August, and has begun rationing supply of a new line of coins this month, a Mint official said.

"Silver demand is absolutely through the roof," indicated Neil Vance, wholesale manager at the Perth Mint.  "There seems to be a bit of frenzy as people think there is a shortage of silver. But in fact it is a [crunch in] manufacturing capacity."

While demand has risen in response to the slump in spot prices to $14.33 an ounce in late July and its subsequent drop to fresh six-year lows below $14 an ounce in August, mint officials said they were caught out by the sudden interest in coins. 

In July, the US mint halted sales for almost three weeks after running out of "blanks", which are used to make coins.

Some investors like to own physical metal to protect from volatility in other assets, particularly currencies and stocks, and to hedge against geopolitical and economic upheaval. The CBOE Volatility index, or VIX, of US stocks,  popularly known as the "fear index", briefly jumped to its highest since January 2009 earlier this year.

At the US Mint in West Point, New York, where the American Eagle is made, the plant is operating three shifts and paying staff overtime, a spokesman said.

The Austrian Mint, which has begun allocating sales of its Philharmonic silver coins, has increased production of silver blanks after higher-than-expected demand in July and August, a spokeswoman said.

In his 35 years of dealing precious metals, Roy Friedman, vice president of sales and trading at Manfra, Tordella & Brookes, one of the biggest US wholesale coin dealers, said he could not recall seeing a squeeze in supplies of North American silver coins spilling over to coins made in Austria and the UK to the degree seen this year.

Mom and pop

Dealers and mints trace the supply squeeze to a burst of buying by mom-and-pop investors in the United States, who scrambled to scoop up coins they considered to be at bargain levels after spot silver prices in early July sank to six-year lows.

The spread between silver and gold, a closely watched gauge for the precious metals markets, has risen to its highest in the third quarter since a brief silver frenzy following the financial crisis. 

Silver coins typically outsell gold anyway because they cost less, but the wide spread meant the silver price is 76 times cheaper than gold, making it even more appealing than usual to investors.

The US Mint sold 14.26 million ounces of American Eagle silver coins in the third quarter, the highest on records going back to 1986. 

The Canadian mint has been limiting sales of its silver Maple Leaf coins since July after record monthly sales that month, an official told Reuters. Sales were at all-time highs in August and September.

With North American mints overwhelmed by orders, investors and collectors were forced to look overseas for increasingly scarce supplies, triggering a domino effect in Europe and Asia.

"We can only get a fraction of what we could sell," said Terry Hanlon, president of Dillon Gage, one of the world's biggest precious metals dealers, based in Addison, Texas.

Hanlon added that  he has seen premiums for coins, which are paid on top of the spot price for physical delivery, surge to about $4 to $5 per coin in wholesale deals, compared with $2.3 in June.

While such buying binges are not uncommon in the coin world, and the US has allocated sales of silver coins several times since prices of silver plummeted in 2013, this episode has lasted far longer, and its effect more pronounced, than in the past, dealers say.

The silver spree is also notably more intense than in gold coins. US Mint sales of gold coins had their best quarterly performance since the second quarter of 2010, but mints aren't yet straining to keep up.

Plunging silver

Still, the rush of coin buying has failed to offset a years-long silver rout by institutional and retail investors betting on further gains in the dollar, US equities and an improving US economy.

Prices have fallen 7 per cent this year, are on track for their third yearly loss and down by 70 per cent from all-time highs of $50 hit in April 2011.

Holdings in the silver-backed exchange traded funds, , which were popular with investors during the financial crisis that followed the collapse of Lehman Brothers, sank to below 518 million ounces this week, their lowest in almost three years.

For now, however, coin dealers are riding the wave. Bullion dealers around the globe who typically offer next-day delivery are now taking silver coin orders several weeks out.

"I don't expect things to get better until next year," said Gregor Gregersen, founder and director of retailer Silver Bullion based in Singapore.

KUWAIT — Kuwait will invite private investors, including foreigners, to take part over the next two years in nine infrastructure projects worth about $36 billion, under a new law designed to facilitate such deals, an official said.

The country has huge construction plans, ranging from power stations and sewage and waste treatment facilities to railway and metro systems. But the plunge in oil prices since last year has slashed its revenues.

So rather than assuming the full cost of construction, the government wants increasingly to use public-private partnerships (PPPs), in which private investors take stakes in projects, bear part of the risk and share profits from operating them.

"This has become an inevitable necessity because it reduces the burden on the state budget in light of falling oil prices," Adel Mohammad Al Roumi, the president of the Kuwait Authority for Partnership Projects, which will oversee PPPs, said in an interview.

In the past, Kuwait has completed only one PPP deal. Projects have been delayed or cancelled because of red tape, uncertainty over legal terms and political tensions between the Cabinet and parliament, which have hindered planning.

But a new PPP law which took effect this year may help to break the logjam, partly by making it easier for investors to raise money. 

While it was hard for banks to obtain security for loans under the old rules, the new law allows a range of assets to be used as collateral, including the developer's shares.

"The new PPP law and its implementation regulations are a positive step for Kuwaiti PPPs and resolve a number of challenges that were present under the previous regime," global law firm Ashurst, which has advised on projects in the country, said in a report.

Successful PPP projects in Kuwait could spur such deals in other Gulf Arab states, which also want to save money in an era of low oil prices. Dubai published a new PPP law last month.

The new law

Kuwait's new law provides for creation of joint stock companies to handle projects, with Kuwaiti citizens owning 50 per cent of such firms, the government 6 — 24 per cent and foreign investors the remainder.

Roumi said his authority would in the next few months invite expressions of interest from investors in seven projects costing about $10 billion. 

Among them, bids are expected within about four months for a $1.3 billion to 1.7 billion electricity generation and water desalination project at Al Zour, with the winners likely to be announced next March, he added.

About 70 to 80 per cent of funding for these projects would come from banks, which authorities hope will stimulate the local banking system. The rest would be provided by investors in the joint stock companies.

In the longer term, PPPs will be used for two much bigger projects, Roumi remarked. 

Kuwait aims to start building a $6 billion railway in 2016, having it ready to connect to a planned regional network in 2018. It also plans a $20 billion project to construct an urban metro system.

The government hopes PPPs will reduce the delays and cost overruns which have plagued past projects. Private investors will not get major payments until projects are operating, creating an incentive to complete construction on time and within budget.

Success in Kuwait's PPP drive is not assured. Bureaucracy and politics may continue to slow projects. Nevertheless, Ashurst said the new law could make Kuwait considerably more attractive for foreign investors.

"The new PPP law includes provisions for foreign investors to compete on a more level playing field with Kuwaiti companies," Ashurst's report added, noting that the new rules amounted to an easing of restrictions on foreign ownership of project companies.

GENEVA — World trade will grow by 2.8 per cent this year and could be pegged back further by a US interest rate rise, China's economic slowdown or Europe's refugee crisis, the World Trade Organisation (WTO) said on Wednesday.

The forecast, revised down from a 3.3 per cent forecast made in April, means 2015 will be the fourth year in a row with trade growth of less than 3 per cent, half the annual average in 1990-2008 before the financial crisis hit.

The WTO's forecast implies growth will quicken this year, from 2.5 per cent growth in 2014. But its expectations have repeatedly proved overly optimistic as hopes of global economic recovery have receded.

There were still big potential risks to its latest numbers.

"These include a sharper-than-expected slowdown in emerging and developing economies, the possibility of destabilising financial flows from an eventual interest rate rise by the US Federal Reserve, and unanticipated costs associated with the migration crisis in Europe," the WTO indicated in a statement.

The Chinese slowdown already caused the WTO to cut its 2015 forecast for growth in Asian imports to 2.6 per cent, down from a 5.1 per cent projection in April, and Asian exports to 3.1 per cent from the previous 5 per cent forecast.

China's falling demand was one major reason why global trade shrank in the first two quarters of 2015, contracting from the previous quarter by an average of 0.7 per cent. Falling demand in Brazil and oil and commodity prices also contributed.

However, year-on-year global growth for the year to date is still positive, at 2.3 per cent from the same period of 2014.

In 2016, world trade is expected to grow by 3.9 per cent, a revision of the WTO's previous forecast of 4 per cent.

That rebound is predicated on Asian import growth bouncing back from 2.6 per cent in 2015 to 4.3 per cent, as well as Latin America flipping from a 5.6 per cent import contraction this year to 5.7 per cent import growth in 2016.

The WTO forecasts covered trade in goods, but not trade in services.

Separately, the former head of the WTO said on Wednesday that Russia's push to boost sales of homegrown products while imports are hit by sanctions will be economically damaging if past experience is any guide.

Pascal Lamy, speaking at the Reuters Russia Investment Summit, said that in the short-term domestic producers could benefit but in the long run consumers are likely to lose out because prices for products will be higher.

Trade between Russia and Western countries is restricted by sanctions imposed by both sides over the conflict in Ukraine, which has dragged relations to their lowest level since the Cold War.

Russia's government has made a big push for "import substitution" — encouraging domestic firms to switch focus to replacing imports that, because of sanctions, are no longer available on the Russian market.

"In most of the cases I have known import substitution policies have failed," said Lamy, who was director general of the WTO for two terms from 2005 until 2013. "They degrade the efficiency of their economy."

"It'll work in terms of increasing local production. But that is not the fundamental point. The fundamental point is whether the consumer has value for his or her money," he indicated at the Summit, held at the Reuters office in Moscow.

Prices vs patriotism

A surge in patriotism in Russia triggered by the conflict in Ukraine might go some way to mitigating consumers' dissatisfaction over higher prices, Lamy said, but he questioned how long that would last.

Russia has challenged the Western sanctions imposed on it over Ukraine, while questions have also been raised about whether Russian countersanctions, banning imports of many Western foodstuffs, are in accordance with WTO rules.

Lamy declined to comment on what would be the outcome of the different sets of litigation over sanctions.

But he said that Western sanctions, which focused on travel bans, financial services and weapons, had been carefully calibrated so as not to breach international disciplines on trade.

Russia's counter-measures, meanwhile, were trade sanctions. He added that WTO rules say such sanctions are not allowed, except on grounds of national security.

"The Russian sanctions are import bans. They are selective, they target some countries and not others, which in WTO terms is discrimination," he indicated.

Lamy was head of the WTO when Russia entered the organisation in 2012 after years of negotiations.

Since joining, Russia has been embroiled in multiple trade disputes with fellow members. The European Union accuses Russia of restrictive practices to protect its carmakers, and of putting what it calls excessive import duties on paper and palm oil.

Lamy though said that such disputes were a normal part of WTO membership and Russia was no more problematic than some other new members had been.

"I think it was the right thing to do," he said on the decision to admit Russia to the WTO. "It's good for Russia, good for the WTO."

LONDON/NEW YORK — Global investors limp into the fourth quarter of a volatile 2015 nursing the worst financial market returns since the credit bust and banking collapse of 2008 and with few hopes of making up ground before the end of the year.

Of 21 major financial benchmarks tracked by Reuters, only two are up so far this year as slowing growth, most worryingly in China, an emerging market crisis and prolonged uncertainty on when US interest rates might rise have slammed markets around the world.

The exceptions, the US dollar and 10-year US Treasury bonds, have historically been seen as cash-like havens and have posted returns of 6.2 per cent and 2.5 per cent respectively.

In the three months to September, they rose 0.4 per cent and 3 per cent, respectively, with US-based government-Treasury funds drawing seven straight weeks of inflows totalling $10 billion, according to Lipper data ended September 23.

Only German and Italian government bonds joined the dollar and Treasuries in positive territory during the quarter.

That leaves investors in a quandary: Do they throw caution to the wind in the fourth quarter and attempt to claw back their losses? Or do they hunker down and ensure that the damage done in the previous three doesn't get any worse?

Certainly, the investment backdrop got dramatically more challenging in the third quarter. The volatility in those three months accounts for most of the year-to-date damage investors have suffered, and in some cases all.

The biggest year-to-date declines have been in copper (-21 per cent), emerging market equities (-18 per cent) and Brent crude oil (-16 per cent), the data show.

Billionaire US activist investor Carl Icahn is convinced that a serious downturn is looming.

"I am more hedged than I have ever been," Icahn told Reuters in an interview this week.

Equities had a lousy quarter, and not just in the emerging world. The S&P 500 had its worst three-month performance in four years and Japan's Nikkei had its worst since the three months after Lehman Brothers collapsed in late 2008.

Dollar's crown slipping?

Investors in other markets suffered much bigger losses in the three months to September 30. Chinese A shares listed in Shanghai plunged nearly 30 per cent and Brent crude oil shed a quarter of its value.

Analysts have been falling over themselves in recent weeks to issue the most bearish outlook on commodities and emerging markets. Among the most notable was Goldman Sachs' note last month that oil could fall as low as $20 a barrel.

Such dramatic price swings often herald an imminent reversal. JP Morgan Asset Management's strategists aren't alone in retaining a positive outlook for the fourth quarter, arguing that investors have simply gotten too bearish.

"Given that we consider US recession risk to be low, the returns offered by higher-quality high yield credit are now attractive relative to equity," they wrote in a recent client note.

"We keep our optimism on the US economic outlook and as such remain overweight developed market equities versus emerging markets, and overweight the US dollar versus emerging market currencies," they indicated.

The dollar was the best-performing asset of all in the third quarter, rising 6 per cent against a basket of major counterparts on expectations the US Federal Reserve (Fed) will soon lift US rates and as investors sought a safe port in the emerging market storm.

That is the tide the dollar doubter HSBC is swimming against, almost alone. This week, it issued even more bullish euro forecasts, calling for $1.14 at the end of this year from $1.05 previously, and $1.20 at the end of next from $1.10.

But anti-consensus calls that bold are few and far between, especially with Fed Chair Janet Yellen's finger hovering over the rate hike trigger.

New York Fed President William Dudley said on Monday that rates will "probably" rise this year, perhaps as soon as October if the economy continues to improve. But "lift off" expectations have been consistently dashed for well over a year now.

"There is not enough global growth to go around and the Fed realises it," Jeffrey Gundlach, who oversees DoubleLine Capital, said.

"If we are talking about global gross domestic product and you gave me an over and under number, I will always take the under number," Gundlach added. 

The deteriorating global outlook will force the Fed to wait until next year, he remarked.

In its latest Global Financial Stability report published on Tuesday, the International Monetary Fund warned that emerging market firms, which have amassed a record $18 trillion of debt, need careful monitoring as the era of record low interest rates nears its end.

JAKARTA – Indonesia on Tuesday introduced more stimulus measures to woo desperately needed investment, in its latest bid to boost the sliding rupiah and breathe new life into the slowing economy.

It was the second time this month that Southeast Asia's top economy has unveiled steps to battle a sharp slowdown, as it comes under pressure with other emerging markets due to a strengthening US economy and turmoil in China.

"We are making [investing in Indonesia] as attractive as possible," said Chief Economics Minister Darmin Nasution, announcing the latest measures along with several other ministers. "We must fix, simplify, make it cheaper."

New measures announced Tuesday included slashing the time taken to process investment permits from at least eight days to just three hours, with processing for permits in mining and geothermal projects in forested areas to be cut from up to four years to about 15 days.

To keep US dollars in the country, the government said it was cutting taxes for exporters who deposit their foreign exchange revenue in the country or convert it to rupiah, which should make it more attractive than depositing funds in countries such as neighbouring Singapore, Finance Minister Bambang Brodjonegoro said.

President Joko Widodo, who has been in office for almost a year, is faced with a dire economic situation. 

The rupiah has plunged about 20 per cent against the US dollar this year, while the economy is forecast to grow less than 5 per cent in 2015, its slowest pace in six years.

While many of the challenges facing Indonesia are blamed on global turmoil, the president must also contend with many domestic problems hampering the economy — a complex bureaucracy, rickety infrastructure and confusing investment policies.

The World Bank ranked Indonesia 114th in its annual "ease of doing business" survey this year.

The first stimulus package, which included such measures as tax breaks and attempts to simplify confusing regulations seen as a drag on business, failed to boost the market and rupiah.

Economists welcomed the new policies but said they would not be a silver bullet.

"This is quite a good move from the government," said Josua Pardede, an economist from Indonesia's Bank Permata.

"But the market hopes the government can do more to build confidence for portfolio investment and to boost slumping domestic consumption.”

BERLIN – Volkswagen announced plans on Tuesday to refit up to 11 million vehicles and overhaul its namesake brand to try to move on from the scandal over its cheating on diesel emissions tests.

New Chief Executive Matthias Mueller said the German carmaker would ask customers "in the next few days" to have diesel vehicles that contained illegal software refitted, a move which some analysts have said could cost more than $6.5 billion.

Europe's biggest carmaker has admitted cheating in diesel emissions tests in the United States and Germany's transport minister says it also manipulated them in Europe, where Volkswagen sells about 40 per cent of its vehicles.

The company is under huge pressure to address the worst business crisis in its 78-year history, which has wiped more than a third off its market value, sent shock waves through the global car market and could harm Germany's economy.

"We are facing a long trudge and a lot of hard work," Mueller told a closed-door gathering of about 1,000 top managers at Volkswagen's Wolfsburg headquarters late on Monday.

"We will only be able to make progress in steps and there will be setbacks," he said, according to a text seen by Reuters.

Mueller was appointed CEO on Friday to replace Martin Winterkorn. German prosecutors said on Monday they were investigating Winterkorn over allegations of fraud.

The crisis is an embarrassment for Germany, which has for years held up Volkswagen as a model of its engineering prowess and has lobbied against some tighter regulations on automakers. The German car industry employs more than 750,000 people and is a major source of export income.

Germany's KBA watchdog had set Volkswagen an October 7 deadline for it to present a plan to bring diesel emissions into line with the law.

Millions of cars

Volkswagen said previously about 11 million vehicles were fitted with software capable of cheating emissions tests, including 5 million at its VW brand, 2.1 million at luxury brand Audi, 1.2 million at Czech division Skoda and 1.8 million light commercial vehicles.

Refitting 11 million cars would be among the biggest recalls in history by a single automaker, similar in scale to Toyota's recall of more than 10 million vehicles between 2009 and 2010 over acceleration problems, though dwarfed by the number recalled by multiple carmakers due to faulty Takata airbags.

Volkswagen sold 10.1 million vehicles in the whole of 2014.

The company said last week it would set aside 6.5 billion euros ($7.3 billion) in its third-quarter accounts to help cover the cost of the crisis.

But analysts think that may not be enough, as it faces potential fines from regulators and prosecutors, as well as lawsuits from cheated customers.

Sweden's chief prosecutor told Reuters on Tuesday he was considering whether to start a preliminary investigation into Volkswagen.

Mueller also said Volkswagen's core VW division, struggling with high-fixed costs and low profit margins, would be given more autonomy, akin to the independence enjoyed by premium flagship brands Audi and Porsche.

Analysts have long urged the company to tackle the underperformance of its core mass-market brand, and in particular to dilute control from the centre which has been blamed for product delays and problems adapting to local markets.

Klaus Mohrs, the mayor of Wolfsburg where Volkswagen employs around 70,000 people, said on Monday he expected a sharp decline in business taxes as a result of the crisis, and announced an immediate budget freeze as well as a hiring ban.

The emissions scandal has sent ripples through the global car market, with manufacturers fearing more costly regulations and a drop in diesel car sales.

The European Commission is working on outline plans to reform the European system for approving new models of cars by the end of the year.

Volkswagen's Belgian importer, D'Ieteren, said it would offer engine upgrades to 800 customers who had ordered a vehicle with a diesel engine that was likely to have been fitted with illegal software. The importer said it would pay for the expected 2 million euros cost.