Business

BOBINGEN, Germany — Like a growing number of German employers, garage-owner Robert Menhofer has decided to give a young refugee a chance and is lavish in his praise for George Romanos, a young trainee from Syria.

“He’s going to be a really good mechanic!” gushes Menhofer, 59. “On the practical side, he’s unbeatable.”

“But not so much on the theoretical side of things ... due to the language,” chimes in, with modesty, his apprentice, dressed in blue overalls and speaking in German, which he has been learning since arriving in Germany.

Romanos, a 21-year-old Christian Syrian, arrived in the southern German state of Bavaria, alone, in the spring of 2013, at the end of a gruelling odyssey that he is reluctant to talk about.

He is one of nearly 86,000 Syrians who have arrived in Germany since the beginning of 2013, fleeing the civil war in their country.

Since the start of the year, the total number of asylum seekers — not just from war-torn Syria, but also from Kosovo, Albania and other countries — taken in by Europe’s top economy is close to 180,000.

The newcomers are not always welcomed with open arms, particularly in eastern Germany, where ugly demonstrations have been staged against asylum homes.

But the refugees are increasingly in demand from companies desperate to find young trainees, particularly in manual jobs and skilled labour in a country with a fast ageing society and a low birthrate.

And there are increasing calls in industry to change legislation to make it easier for them to be integrated into the labour market.

In Augsburg, the biggest town near Bobingen, about 70 kilometres from the Bavarian state capital of Munich, the Chamber of Crafts has campaigned for such changes for years.

Labour shortage

The challenges are twofold, explains Volker Zimmermann, in charge of education at the chamber: to work towards social cohesion in a region where almost every town now has its own home for asylum seekers; but also to combat an ever-increasing shortage of skilled labour.

In and around Augsburg, unemployment stood at 4.2 per cent in June, and 5,000 vacancies remain unfilled. And here, as elsewhere, the shortage of apprenticeships was even more alarming.

The German “dual system” of on-the-job training combined with theoretical learning is no longer attracting sufficient numbers of young people, with as many as 80,000 trainee places left unfilled last year.

“Everyone wants to go to university nowadays,” says Menhofer.

So, when he bumped into Romanos, who was living in a refugee home in Bobingen and who he said is “infatuated with cars”, he jumped at the chance.

They met when Menhofer, as head of the local business association, had asked the home’s residents to help put up the local Christmas market.

Since September 2014, the young Syrian has divided his time between the car workshop and his studies at the local vocational school.

And his boss beams with satisfaction at his apprentice’s progress, describing the young Germans of the same age as “lazy”.

Sait Demir, an intercultural career adviser at the Augsburg Chamber of Crafts, deals with the formalities, which were made more complicated because Romanos’ asylum application had still been pending.

He currently has a temporary two-year permit to stay in Germany.

Things are changing

Romanos’ gross monthly wage is 675 euros ($740) and he has a small flat, the rent for which is paid by the local labour office.

Demir works closely with the labour agency and charities and he has succeeded in placing 19 asylum seekers in apprenticeships since January 1. But he says that it “could be a lot more”.

“Employers are beginning to realise that they can employ motivated, hard-working people who are eager to learn,” says Zimmermann.

But for the time being, “the complicated bureaucracy puts a lot of them off”.

And until their prospective employees’ asylum applications are processed, which can take months, the possibility of them being deported at 24 hours’ notice is like a Damocles sword hanging over both employer and employee.

Nevertheless, in the past two years, “a lot has changed”, Demir said.

Germans have to learn to view the new arrivals as “the workforce which we increasingly need,” two government ministers wrote recently in a newspaper article.

Until now, asylum seekers have not been allowed to work for nine months after they arrive in Germany. But the time limit was shortened to three months last November.

Since January, the federal labour agency has granted permits to more than 6,000 asylum seekers allowing them to work.

KUALA LUMPUR — As the Muslim fasting month draws to a close, Malaysian retailers are lamenting the most dispiriting Ramadan sales in years, adding to evidence recent hard decisions on taxes and subsidies might be costing the economy its main growth engine.

The fasting month is traditionally the busiest time of the year for Malaysian retailers, but the country’s retailers association are predicting a plunge in Ramadan sales of as much as 20 per cent compared with last year.

“Shoppers are more cautious with their money,” said Indah Asbiran, who sells traditional Malay costumes for women at a stall in Tunku Abdul Rahman Bazaar, the grande dame of festive shopping in Kuala Lumpur. 

“You see people walking by but not buying much,” he added.

A recent survey by the Malaysian Institute of Economic Research showed consumer sentiment had dropped to the lowest for six years. Sentiment worsened after the government dismantled petrol subsidies in December and introduced a goods and services tax (GST) this year. 

With many households shouldering heavy debts, some shoppers are looking and not buying.

Private consumption accounts for over half of Malaysia’s gross domestic product. Its 8.8 per cent expansion in the first quarter drove the economy’s growth of 5.6 per cent, the fastest among Southeast Asia’s five biggest economies.

But all the signs are that consumption is slowing, making it harder for Prime Minister Najib Razak’s government, already battling weak oil, gas and manufacturing exports, to achieve this year’s 4.5-5.5 per cent growth target.

Najib’s government had hoped consumption might anchor domestic demand at a time when the government is seeking to rein in its fiscal deficit. But there is little sign of that happening.

Ninety per cent of respondents to a survey by employment firm Jobstreet said they could not cope with daily expenses after the government imposed the 6 per cent GST in April. 

Auto sales dropped by more than 30 per cent that month compared with March.

To counter sluggish sales, retailers are fighting for market share, and that means accepting smaller profits, said H C Chan, the chief executive of Sunway Pyramid Shopping Mall, one of the country’s largest malls.

Vendors are giving out additional discounts, discounts for buying more items and discounts for bundle buys.

Hasliza Hasnawi, a schoolteacher, said she still had to do her shopping during Ramadan, which ends on Thursday.

But like many shoppers at Tunku Abdul Rahman Bazaar, Hasliza was carrying few shopping bags, choosing to window-shop extensively before settling on a purchase.

BEIJING — China's top graft-busting agency has lambasted the country's powerful state-owned industries as being riddled with corruption and nepotism, saying the origins of the problem could partly be traced back to the chaos of the Cultural Revolution.

As part of President Xi Jinping's battle against corruption, anti-graft inspectors have over the past few months visited dozens of strategic central government-owned groups, where top executives hold the rank of deputy ministers.

In a statement reported by most state media on Tuesday, the Communist Party's central commission for discipline inspection said the inspections had found certain leaders abusing their power and helping relatives for corrupt purposes.

"Some people embezzled state assets under the name of carrying out reforms, while others tried to corrupt senior officials, using illegally obtained state resources," it indicated.

"Some are still breaking the rules, spending vast sums on luxurious holiday homes and taking their wives and children out golfing on the public dime," the watchdog added.

Leaders at some state firms are ignoring party promotion procedures, deciding themselves who to promote, and "forming cliques", it continued in the statement, which was issued on Monday.

It said that the problem of nepotism could in part be traced back to the end of the Cultural Revolution more than 30 years ago, when many of the educated youth who had been "sent down" into the countryside came back to the cities to work, and were often placed with family members in state-owned firms.

"This created the problem left over from history of a concentration of family members," the watchdog added.

It did not name specific companies or executives.

The statement praised the role of the state-owned sector in China's landmark economic reforms since the late 1970s, but noted that they had to fall in line.

"Leaders have forgotten that they are managing state firms under the party's leadership," it said. "State-owned firm are not excluded from efforts to strictly manage the party."

Beijing has been expected to unveil a master plan to reform the powerful sector, but one has yet to be published.

Xi has warned that the problem of official graft is serious enough to threaten the Communist Party's legitimacy and has vowed to go after powerful "tigers" as well as lowly "flies".

Graft-busters have gone after business leaders and politicians alike.

Senior executives at automaker China FAW Group Corp., Baosteel Group and China National Petroleum Corp. have all been put under investigation for corruption this year.

Separately, official data showed Monday that China's total trade slumped in the first half of this year, falling well short of the government's targets and dealing a blow to the global economy from its biggest trader in goods.

Two-way trade for the first six months of the year fell 6.9 per cent to $1.88 trillion, the General Administration of Customs indicated.

China is the world's second largest economy and a key driver of global growth, with an outsized impact on resource-rich supplier countries such as Australia.

Over the six months, trade with the European Union declined 6.7 per cent, Customs said, and with Japan it dropped 10.6 per cent.

Monday's result was well below Beijing's official target for the year for trade growth of "about 6 per cent". That figure was a reduction from the 7.5 per cent set for 2014, when values expanded only 3.4 per cent, the third consecutive year the goal had been missed.

"Commodity prices fell significantly, dragging down growth in import value," Customs spokesman Huang Songping told reporters, noting that "sluggish foreign demand" was the "major factor" affecting trade growth.

"Export costs remained high, undermining export competitiveness," he said, adding that by June 30, the yuan had strengthened 0.2 per cent against the dollar from the start of the year, 6.9 per cent against the euro and 2.2 per cent against the yen.

"The downward pressures on the domestic economy increased and the demand for imports was weak," he said.

For June, imports fell for the eighth consecutive month, Customs said, dropping 6.1 per cent year on year in dollar terms to $145.48 billion.

But exports increased 2.8 per cent to $192.01 billion on-year, snapping a run of three monthly declines in a row, and the country's trade surplus leaped 47.5 per cent to $46.54 billion.

The monthly percentage changes were slightly smaller in China's yuan currency.

According to Louis Kuijs, a Hong Kong-based economist with the Royal Bank of Scotland (RBS), there had been "extreme weakness" in the first five months of the year.

But there were signs domestic demand was strengthening and the monthly June data suggested "the momentum is starting to improve".

"That is definitely encouraging for the rest of the world," he told AFP.

'New normal'

The latest data comes as Chinese authorities manage what they describe as a "new normal" economy in which they steer it away from a traditional model of high growth based on big investment projects and towards one where consumer demand takes prominence.

China's gross domestic product (GDP) expanded 7.4 per cent in 2014, the lowest rate in nearly a quarter of a century, and signs of further weakness have mounted this year.

GDP expanded 7 per cent in the January-March period, the worst quarterly result in six years.

China announces second-quarter GDP figures on Wednesday and the median forecast in an AFP poll of 14 economists indicates GDP expanded 6.9 per cent in April-June.

ANZ economist Liu Li-Gang said the trade data mean the second-quarter GDP figure "will underperform" as both imports and exports were weak during the latest three-month period, predicting that the GDP figure could come in at 6.8 per cent.

For all of 2015, the AFP survey predicts growth at a median 7 per cent, more optimistic than a forecast of 6.8 per cent in a similar poll in April and in line with the government's official target of "about 7 per cent".

Authorities have taken steps to boost slowing economic growth, cutting interest rates four times since November while also lowering the amount of cash banks must hold in reserve in a bid to boost lending.

"We expect import growth to continue to rebound as policy support helps to stabilise domestic demand," Julian Evans-Pritchard, China economist at Capital Economics, wrote in a reaction.

The contraction in imports in June was better than May's 17.6 per cent decline, while on a month-on-month basis imports increased 10.9 per cent in June from May, according to customs.

Analysts see more such measures on the horizon.

"We continue to expect more policy easing to offset the headwinds to growth", Nomura economists said in a note.

AMMAN — Selectivity rewarded Philadelphia Insurance with a JD0.9 million technical profit last year as the company also steered clear of price undercutting.

Net profit after deducting various expenses stood at JD0.8 million last year compared to a JD0.6 million loss in the previous year and a JD0.5 million deficit recorded in 2012.

The company's 2014 annual report, disclosed last week to the Jordan Securities Commission (JSC), described 2014 as "good" despite the challenges facing the sector, especially the volume of paid claims related to vehicle insurance, and the weak performance of local financial markets.

Philadelphia Insurance indicated in the report that gross written premiums realised last year amounted to JD6.9 million, slightly higher than the figure achieved in 2013.

Net paid claims were much higher in 2014 reaching JD5.3 million from JD4.8 million in the previous year.  

According to the disclosure, vehicle insurance was the main source of  earnings and generated most of the profit for the company last year as it netted JD0.7 million in income although the premiums from this category were lower at JD5.5 million.

In 2013, when premiums were higher at JD5.8 million, vehicle insurance was JD1 million in the red.

The company said the halt to third party liability compulsory insurance from August 5, 2014, until December 31, 2014, after reaching the level allowed under directives, was behind the transformation.

It added that the jump from loss to profit was also due to its modification of insurance policy and becoming more selective, such as rejecting some losing categories or raising the premiums on them.

Medical insurance was highly profitable as written premiums in this section reached JD1.2 million, 37 per cent higher than the JD0.9 million posted in 2013, the company indicated, noting that medical insurance generated JD133,386 profit last year.

Profits from marine/transport and fire/general accident insurance were marginal.

Philadelphia Insurance mentioned in the annual report that the Jordan Press Foundation/Al Rai' and the Ports Corporation became among its clients after it was successful last year in winning several insurance tenders with substantial volume.

According to the company, whose workforce comprises 53 employees, its share of the market with the exception of life insurance stands at 1.45 per cent as premiums account for 6.9 million out of a JD474.8 million gross market volume generated by 28 companies that operate in the local market.

To enhance its future investment portfolio and position, Philadelphia Insurance is conducting a feasibility study to confirm the viability of establishing a commercial building on a plot of land it owns in the Quweismeh neighbourhood of Amman.

The land carries a JD84,850 book value but its market value is much higher, just like the building in Jabal Al Hussein where Philadelphia Insurance has its head office.  

The building carries a JD152,239 book value but the market value is much higher.

Besides the real estate, the company's investments include shares in corporations listed on the Amman Stock Exchange and deposits at 10 banks earning interest between 3 per cent and 4.25 per cent.

"Despite market conditions, substantial increase in paid claims, and higher reserves, the company maintained good liquidity," the report said.

It indicated that cash in banks amounted to JD8.3 million, or 206 per cent of capital,  as of December 31, 2014, compared to JD8.8 million at the end of 2013. JD225,000 are restricted to the order of the Insurance Commission (IC).

The value of shares held by the company came at JD0.5 million, representing 12 per cent of the capital as of December 31, 2014, slightly lower than the amount at the end of the previous year. 

It also intends to activate its subsidiary, Philadelphia for Financial Development and Real Estate Development Company, with additional income from non-insurance business, especially housing projects.

The subsidiary, without staff, is capitalised at JD0.5 million  

The annual report, delayed for technical reasons and a difference of opinion with the IC, estimated the company's 2014 capital investment at JD4 million, unchanged from the previous year.

Financially, the balance sheet as of December 31, 2014, showed total assets at JD11.5 million, comprising mainly JD8.8 million of investments and JD2 million of receivables.

Capitalised at JD4 million, shareholders equity totalled JD3.8 million as it included JD0.7 million mandatory reserve and JD0.8 million accumulated losses.

Out of JD7.4 million in total liabilities, JD6.2 million were net provisions for claims and for unearned premiums.

Out of 158 investors, shareholders who own more than 5 per cent of Philadelphia Insurance's capital are Adham Nabih Al Idrissi (9.3 per cent), Hatem Mahmoud Hussein (10.5 per cent), Ahmad Hatem Mahmoud Hussein (8.8 per cent), Mahmoud Hatem Mahmoud Hussein (8.7 per cent), Moheiddin Mohammad Al Jamal (9.4 per cent), and Mahmoud Khalil Abdul Rahman Abul Rub (16.8 per cent). 

NEW YORK — Democratic front-runner Hillary Clinton put the fight for higher wages for everyday Americans at the heart of her economic agenda on Monday and talked tough against Wall Street in the first major policy speech of her White House bid.

Clinton said the US economy will only run at full steam when middle-class wages rise steadily along with executive salaries and company profits.

"I believe we have to build a growth-and-fairness economy. You can't have one without the other," she said at The New School university in Manhattan's Greenwich Village, a bastion of liberal education.

Clinton's choice of location, a liberal arts college with annual fees of around $60,000, embodied the financial hurdle that middle-class parents face in educating their offspring. But she barely mentioned college debt.

With one eye on the growing support for Vermont Senator Bernie Sanders, a self-described socialist who is also seeking the Democratic Party nomination, Clinton laid out a vision of economic equality.

"Corporate profits are at near-record highs and Americans are working as hard as ever but paycheqes have barely budged in real terms. Families today are stretched in so many directions and so are their budgets," Clinton said.

"Families deserve to get ahead and stay ahead. The defining economic challenge of our time is clear, we must raise incomes for hardworking Americans," Clinton told a hand-picked audience. "I want to see our economy working for the struggling, the striving and the successful."

She promised to increase incomes on three tracks: strong growth, fair growth and long-term growth in a sweeping vision of promises that drilled down little into substance on how they could actually be achieved.

The former secretary of state promised to push for a broader reform of the US corporate tax code. 

She criticised Republicans for 35 years of "trickle down" economics, tax cuts for the richest and big corporations writing their own rules, which she said "does practically nothing to help hardworking Americans."

She repeated calls for tax relief for small businesses, investments that would create jobs, improve infrastructure, bolster renewable energy and make it easier for women to join the workforce.

America has dropped from seventh to 19th out of the 24 most advanced nations in terms of women's labour participation rate, Clinton indicated.

Clinton, a former first lady, US senator and secretary of state, is the favourite to win the Democratic nomination for the November 2016 presidential election but Sanders has drawn large crowds at campaign events.

She talked tough against Wall Street, promising to go beyond the 2010 Dodd-Frank law that imposed stronger regulations on the financial industry.

"Too many of our major financial institutions are still too complex and too risky and the problems are not limited to the big banks that get all the headlines," she said.

Clinton warned that "serious risks are emerging from institutions in the so-called shadow banking system including hedge funds, high-frequency traders, non-bank finance companies" and other entities "which receive little oversight at all".

She will unveil more specifics of her economic policy in a series of speeches in coming weeks as Democrats seek more details of her plans on increasing the minimum wage, creating universal preschool and investing in infrastructure.

It has become too difficult for Americans to be good workers and good parents at the same time, she said, calling for paid leave, quality affordable childcare and equal pay for women.

Comprehensive immigration reform, she added, would increase gross domestic product (GDP) by $700 billion over the next decade.

"Inequality is a drag on our entire economy so this is the problem we need to tackle," she continued.

She ridiculed Republican contender Jeb Bush saying the solution to the economy was Americans working longer hours, saying nurses, teachers and truckers "don't need a lecture. They need a raise," to big cheers.

She singled out another Republican contender, Marco Rubio, for "bad economics" and proposed tax cuts for households making $3 million a year as a "budget-busting giveaway to the super wealthy".

She vowed to build on Obama's Affordable Care Act by lowering out-of-pocket healthcare costs and making prescription drugs more affordable.

Acknowledging that many of her proposals "are more than a little battle scarred", she advanced profit sharing as a new idea.

"Hardworking Americans deserve to benefit from the record corporate earnings they helped to produce," she said.

She listed long-term growth as the third key driver of income, criticising what she called "quarterly capitalism" when companies focus on the next earnings report at the expense of long-term growth.

She promised to "rein in excessive risk on Wall Street" and in reference to well-known banking scandals insisted "there can be no justification or tolerance for... criminal behavior".

In another swipe at the Republicans, she called for policies based on evidence, not ideology. 

"We have to break out of the poisonous partisan gridlock and focus on the long-term needs of our country."

At the end of her speech, a member of the audience who heckled Clinton about banking legislation was swiftly escorted out by security and his cries drowned out by a standing ovation.

SYDNEY/LONDON — Realtors in Australia, Britain and Canada are bracing for a surge of new interest in their already hot property markets, with early signs that wealthy Chinese investors are seeking a safe haven from the turmoil in Shanghai’s equity markets.

Sydney realtor Michael Pallier indicated that in the past week alone he has sold two new apartments and shown a A$13.8 million ($10.3 million) house in the harbourside city to Chinese buyers looking for an alternative to stocks.

“A lot of high net worth individuals had already taken money out of the stock market because it was getting just too hot,” Pallier, the principal of Sydney Sotheby’s International Realty, said.

“There’s a huge amount of cash sitting in China and I think you’ll find a lot of that comes to the Australian property market,” he added.

Around 20 per cent has been knocked off the value of Chinese shares since mid-June, although attempts by authorities to stem the bleeding are having some effect.

Many wealthy Chinese investors had already cashed out. Major shareholders sold 360 billion yuan ($58 billion) in the first five months of 2015 alone, compared to 190 billion yuan in all of 2014 and an average of 100 billion yuan in prior years, according to Bank of America Merrill Lynch.

While much of that money may initially be parked in more liquid assets like US Treasury bonds and safe-haven currencies such as the Swiss franc, there is growing evidence that foreign property sales may receive a boost.

“There is anecdotal evidence that Chinese buyers have intensified their interest in ‘safe haven’ global property markets, including London, as a result of the recent stock market volatility,” indicated Tom Bill, the head of London residential research at Knight Frank.

Ed Mead, the executive director of realtor Douglas & Gordon in London, said his firm had seen two buyers from China looking to buy whole blocks of flats.

“It is unusual to see the Chinese block buying, it implies that this is a capital movement rather than just individuals looking to park money,” he added.

Rich exodus

Since 2000, China has had the world’s largest outflow of high net worth individuals.  

Around 91,000 wealthy Chinese sought second citizenship between 2000 and 2014, according to a report by residence investment broker Lio Global, a factor that is fuelling demand to buy foreign property.

Most of these individuals, defined as those with net assets of $1 million or more excluding their primary residences, are moving to the US, Hong Kong, Singapore and Britain.

Brian Ward, the president of capital markets and investment services for the Americas at commercial property company Colliers International, indicated that Chinese investors had already sunk around $5 billion into US real estate in the first six months of 2015, more than the $4 billion they invested in the whole of 2014.

In London, Alex Newall, managing director of super prime residential realtor Hanover Private Office estate agents said he had seen an increase in interest from Chinese investors at the top of the market, although no transactions yet.

“They’re wanting to try and park large sums of money — I’m talking from £25 million ($38.5 million) to £150 million,” Newell added. “They’re looking to park that capital into London homes.”

Australia and Canada are also increasing in popularity, gaining an edge from their weakening currencies.

“Property prices are still cheap in RMB [yuan] terms,” said Timothy Cheung, a principal of Morphic Asset Management in Sydney.

Backing out

The rush by Chinese investors into foreign property has not been without criticism, with some in London, Sydney and Vancouver blaming them for pushing up already spiralling prices.

The Australian government has moved to look tough on the issue, introducing new fees and jail terms for those found flouting foreign investment rules. 

The Chinese owner of a A$39 million Sydney mansion was forced to sell up earlier this year after it was revealed the property had been bought illegally through a string of shell companies.

Others are concerned that Chinese investors who didn’t bail out of stocks quickly enough will be a drag on international property markets, particularly after Beijing on Thursday banned shareholders with large stakes in listed firms from selling for six months.

In London, Naomi Heaton, the chief executive of London Central Portfolio, said she had heard of investors pulling out of new-build purchases because they no longer had the capital.

It was a similar story for Vancouver real estate agent Andrew Hasman, who focuses on the city’s affluent westside area.

“I had a call last week from another agent wanting to know if a seller of a transaction we just did would allow the buyer to back out, because they had just recently lost a huge amount of money in the Chinese stock market correction,” Hasman said.

TORONTO — Canada's housing boom is increasingly driving homebuyers to seek mortgages from private lenders, who demand rates that can be more than five times higher than those charged by the nation's banks.

Canadian house prices have risen 36 per cent since June 2009, according to the Teranet-National Bank house price index. At the same time, Canadian banks have become more conservative and regulators are making it harder to lend, giving rise to an alternative market, including Canadians who refinance their own homes at low rates and then use the money to become mortgage lenders themselves.

Some analysts say a housing investment is increasingly risky because the pace of price increases has vastly outstripped wage growth, all amid a time of historically low interest rates and record debt levels. 

If and when interest rates rise, the concern is that consumers would have little ability to increase their payments, because they have so much debt.

"The risk arises if the unintended consequence of regulation is to push out the risk profile of the less regulated sector and to encourage it to grow quickly at the same time," said Finn Poschmann, vice president of policy analysis at the CD Howe Institute, a think tank. 

"In dollar terms, it is not a huge part of the economy [but] my concern is that we pay attention, because small problems sometimes get unexpectedly large, and quickly so," he added.

Mortgage broker Lou Perrotta indicated that in terms of volume, 20 per cent to 30 per cent of the mortgages he puts together are now privately financed, typically because borrowers are declined for a bank loan for reasons like a low credit rating or unsteady income. 

That represents about C$4 million to C$5 million of the C$20 million ($15.69 million) of mortgage business he does annually, he remarked.

"Business is brisk, without question. [It has] probably tripled in the past three years," said Perrotta, president of Domus Financial Corp. in Toronto, where house prices have increased by 55 per cent in the last six years.

Perrotta acts as a matchmaker between individuals who have money to lend and who are seeking higher rates of return than can be had in stocks or bonds, and borrowers who are willing to pay a higher mortgage rate to get into the market.

He also invests his own money, lending between C$25,000 and C$250,000 each to "five or six" borrowers a year who offer a good balance between risk and return.

"It's not for the faint of heart, and you need to understand the dynamics of real estate," Perrotta said.

One private lender, who asked not to be named because she is close to the real estate market and fears hurting her business, took out a C$400,000 mortgage on her paid-off home at 2.49 per cent and then gave that money to a broker that lent it to a borrower at a higher rate, for a fee.

"Who the hell is going to give me 9 per cent return?" said the lender, who noted that she has recourse to the borrower's assets if he defaults.

According to CIBC senior economist Benjamin Tal, the shadow lending market represents about 4 to 5 per cent of Canada's overall mortgage market.

"This is something that is growing very fast, because many borrowers are not having access to banks because the banks are highly regulated," said Tal.

In Ontario, Canada's most populous province, private lending accounts for about 4 per cent of new mortgage originations, or C$1.1 billion ($878.8 million), or 2 per cent, of total mortgage lending by dollar value, according to Teranet.

While that's a fraction of the sub-prime lending that got the US housing market into trouble seven years ago, analysts are concerned that the market is growing rapidly and may be concentrated in hot housing markets such as Toronto and Vancouver where a sudden downturn could take hold.

Legal practice

The practice is legal, and can be done through a person-to-person loan, in which the lender is named as a lien-holder on the mortgage, or through a Mortgage Investment Corp., in which investors can pool their money to lend to those who either don't qualify for a traditional loan.

While major Canadian lenders offer five-year fixed mortgage rates at about 2.5 per cent to qualified borrowers, rates in the private market range between 7 per cent and 15 per cent, one mortgage broker indicated.

Traditional lenders also send business to alternative lenders, feeding the pipeline.

Royal Bank of Canada (RBC), the country's biggest bank, said when a client does not qualify for a mortgage, the bank will recommend an alternate lender, which may include a trust company, a mortgage broker or a private mortgage corporation, an RBC spokesman said in a statement.

Canada's financial system regulator, the Office of the Superintendent of Financial Institutions (OSFI), said it monitors the alternative mortgage market but would not comment on its size, whether it was growing or whether OSFI had any concerns.

Anthony Croll, the vice president of Individual Investment Corporation, a Montreal-based private lender that has been in business since 1958, said he's seen a rise in the number of small private lenders over the last few years competing with the 10 per cent to 12 per cent interest his company would charge.

He also thinks inexperienced lenders may be underestimating the risks associated with non-payment of a loan.

"Occasionally an accountant or someone else has said, after hearing about our rates, or what the deal is, 'I can do that myself'," Croll said. "But you know everything is easy and fine to do until you have a problem."

In a separate dispatch from Vancouver, Reuters said that after years of watching housing prices climb, driven in part by Chinese investment, Eveline Xia came to a painful realization: Despite having a master's degree and solid career prospects, she might never be able to afford a home in the city where she grew up.

That didn't seem right, and so the 29-year-old grabbed a marking pen, hand lettered a sign listing her credentials, snapped a selfie, and posted it to Twitter under the hashtag #DontHave1million.

The tweet went viral, and hundreds of other young Vancouver residents soon began expressing their own frustrations in tweets about the red hot housing market, and the feverish foreign investment they believe has fuelled it.

"Average, hardworking Canadian residents are being forced to compete for housing with the global wealthy," said Xia, who immigrated to Canada from China as child. "People here are getting angry."

That anger has contributed to a simmering xenophobia in Vancouver, a multicultural coastal city long known for its inclusiveness. 

With virtually no official data on foreign buyers available, many of those squeezed out of the market are left to believe the worst.

That has residents like Xia pressing the government to track international buyers, scrutinise the source of their funds and tax property speculation, before the anti-Chinese sentiment gets out of hand.

Last summer, a small anti-immigration group covered up Chinese symbols on real estate signs in the affluent suburb of West Vancouver with stickers reading "Please Respect Canada's Official Languages."

And police are investigating incidents on neighbouring Vancouver Island, where anti-Chinese pamphlets appeared in affluent neighbourhoods and signs for Chinese real estate agents were defaced with racial epithets and messages like "Go home" and "Not welcome".

A recent poll found that two-thirds of metropolitan Vancouver residents believe "foreigners investing" is a main cause of high housing costs, and 70 per cent said the government should work to improve affordability.

Skyrocketing prices

In the last five years, the median selling price for residential properties in Vancouver has jumped 57 per cent to C$1.1 million, according to data compiled by Reuters from the Real Estate Board of Greater Vancouver. 

The price of detached homes has soared 82 per cent, to C$2.1 million. 

The median household income, meanwhile, has risen by an estimated 13 per cent in the same period, according to Statistic Canada.

But since the government keeps no records on the nationality of home purchasers, evidence that money from China is driving up housing prices is largely anecdotal.

In interviews, five real estate agents who primarily sell homes on Vancouver's exclusive west side estimated that between 50 per cent and 80 per cent of their clients have financial ties to mainland China.

A Reuters survey of 50 land titles for detached Vancouver Westside homes that sold for more than C$2 million in the last year found that nearly half of the purchasers had surnames typical of mainland China, as distinct from those of earlier waves of immigrants from Taiwan and Hong Kong.

There was no way, however, to determine the citizenship or residency of those buyers. And indeed, many wealthy newcomers from mainland China are permanent residents of Canada.

Activists like Xia are pushing the government to at least start tracking foreign buyers and to make the information public.

"By not addressing it, they're letting anger and resentment build through whispers and at dinner parties," said Xia.

Capital flight

Residents also have questions about the source of Chinese money being invested in Vancouver property, a concern that came to the fore last year when a prominent developer in the city, Michael Ching Mo Yeung, was named as one of the top 100 fugitives wanted by China as part of “Operation Skynet”.

The campaign is part of President Xi Jinping's pursuit of suspected corrupt officials who have fled overseas.

In the wake of news about Ching, there have been calls for greater scrutiny of foreign buyers and tougher enforcement of anti-money laundering standards.

"I would love someone to look into the due diligence standards [for real estate brokers] around 'know your customer'," said James McDonald, who runs a blog that maps million-dollar homes that sit empty after being purchased by speculators.

He and others note that many properties are purchased by trusts or companies that aren't transparent.

But not everyone is convinced that Chinese money is primarily responsible for the rise in housing prices, noting that it has also been fueled by interest rates that are near record lows and a tight supply of detached houses.

"The reason why we're seeing this racialised narrative is people are looking for a scapegoat," said Victor Wong, the Toronto-based executive director of the Chinese Canadian National Council.

"It's infected the population," he added. "People have bought into this narrative that there's a flood of foreign money into the market when there's just no evidence beyond a few anecdotes."

Mixed feelings

With frustrations mounting, Vancouver Mayor Gregor Robertson in May called on British Columbia's government to impose a speculation tax.

The province declined, saying there was not enough hard evidence that foreign money was driving the market and that a new tax could hurt existing homeowners.

But even those who benefit from the housing boom have mixed feelings. 

At a recent open house in Vancouver, real estate agent Fatemeh Nouripour watched group after group of prospective buyers, most of whom appeared to be from mainland China, trudge through a fixer-upper listed for C$1.58 million.

"As an agent, I want to sell to whoever will pay the most," Nouripour said. "But I'm also a mother. My daughter has a master's degree, she works hard and pays taxes, and she can't afford to buy because foreigners are parking their money here. How fair is that?"

AMMAN — Arab Bank Group announced Saturday in a press statement that its midyear net profit before tax reached  $559.7 million.

The press statement indicated that net profit after-tax and provisions during the first half of this year amounted to $422.9 million, 2 per cent higher than the $414.9 million registered during the January-June period of last year. 

It remarked that the figures are preliminary and subject to the approval of the Central Bank of Jordan.

"Arab Bank maintained a strong and healthy capital base as shareholders equity stood at $8.1 billion, with a capital adequacy ratio of 14.3 per cent," the statement said.

"Customer deposits also increased reaching $34.8 billion compared to $34.4 billion at June 30, 2014," it added. "Loans and advances grew to $24.1 billion compared to $23.7 billion."

The bank noted that excluding the effect of exchange rate devaluations, loans and customer deposits increased by 5 per cent and 4 per cent  respectively.

In the press statement, Arab Bank Chairman Sabih Masri stated: “The financial performance during the first half reaffirms the bank's progress in implementing  its successful strategy.”

Arab Bank’s Chief Executive Officer Nemeh Sabbagh stressed the bank’s focus on its core banking activities as well as its efficient asset allocation, pointing out that net operating income grew by 4 per cent to $590.8 million during the first six months of 2015.

"The bank continues to maintain comfortable liquidity ratios as a strategic goal with a loan-to-deposit ratio of 62.5 per cent," Sabbagh said.

Masri concluded that Arab Bank is consistently utilising the strength of its branch network to provide the best banking services to its customers which will enable the bank to continue achieving further success and to maintain sustainable growth.

Arab Bank received the award of "Best Bank in Jordan" from Euromoney and The Banker Middle East, in addition to "Best Trade Finance Bank in the Middle East" award for the year 2015 by New York-based Global Finance magazine.

UFA, Russia — The BRICS emerging nations said on Thursday they were worried about the volatility of global financial markets and oil prices and agreed to coordinate efforts to keep their economies stable.

Leaders of Brazil, Russia, India, China and South Africa  finally launched the group’s largest initiatives to date, a development bank and a currency pool, and called at a summit for a swift deal on curbing Iran’s nuclear programme.

For Russian President Vladimir Putin, hosting the summit in the city of Ufa, the launch of the bank and the pool had been a key priority, as was the group’s ability to sound more unified than at some previous meetings.

“We are concerned about the instability of the markets, the high volatility of energy and commodity prices, and the accumulation of sovereign debt by a number of countries,” Putin said.

“These imbalances affect the growth rate and our economies. In these circumstances, the BRICS states intend to actively use their own resources and internal resources for development,” he added, without giving details.

Frantic efforts by Beijing to stem a stock market rout helped Chinese shares bounce back on Thursday after tumbling for more than a week, but the costs of the heavy-handed state intervention are likely to weigh on the market for a long time.

Chinese President Xi Jinping refrained from comments about the slump, saying only that there are “difficulties” in the global economy, but urged the BRICS to increase coordination.

“Let’s go hand in hand to build a great BRICS partnership,” he told the group.

The BRICS account for a fifth of the world’s economic output and 40 per cent of its population.

More unity?

For Russia, hit by Western sanctions over its role in the Ukraine crisis that have cut off access to Western funding, thwarted investment and contributed to an economic downturn, greater cooperation among the BRICS nations is key.

Its economy has also suffered because of the fall in the global price of oil, its main export, and it has been looking for new markets since relations with the West sank to their lowest point since the Cold War over the Ukraine crisis.

But the diverse group, which has been meeting regularly since 2009, has struggled to come up with unified actions, often instead focusing on criticising the West.

The group’s New Development Bank has taken more than three years to be established with tough negotiations on funding, headquarters and personnel issues.

The bank, which is to start lending no earlier than next year, is to have $50 billion in starting capital which will be doubled within the next few years and focus mainly on issuing debt for infrastructure projects.

“The New [Development] Bank will help finance joint, large-scale projects in transport and energy infrastructure, industrial development,” Putin said.

Russia’s increased focus on Asia since the crisis in Ukraine began has brought some successes: on Thursday, its finance minister said China had bought around $1 billion worth of Russian domestic bonds this year.

The group called in a summit declaration for a swift permanent agreement on curbing Iran’s nuclear programme in exchange for relief from economic sanctions. The language of the statement was careful, and devoid of finger-pointing.

Russia and China are part of the talks between Iran and  six major world powers.

The BRICS called for “the normalisation of trade and investment with Iran” and said any deal should “provide for the comprehensive lifting of sanctions imposed on Iran”.

The group also issued a statement on the conflict in Ukraine, calling for full implementation of an agreement reached in February on ending fighting between pro-Russian separatists and pro-Kiev forces in east Ukraine.

AMMAN — Jordan Housing Developers Association (JHDA) President Kamal Awamleh on Thursday discussed with his Palestinian counterpart Nizar Rimawi, bilateral cooperation ties.

The meeting covered information and expertise exchange, especially since Palestinians suffer a lot of complications and obstacles imposed by the Israelis. They also discussed activating the memorandum of understanding both sides signed in late 2013, and exchanging expertise among workers at the sector in the two countries.

Awamleh expressed JHDA’s readiness to support the Palestinian housing sector and provide it with all types of assistance it needs.

Rimawi invited Awamleh and association members to visit Palestine and check on the development the housing sector has achieved. He also expressed the union’s willingness to organise a housing exhibition in Amman to showcase the sector’s accomplishments and offer housing units for those willing to buy real estate in Palestine.