Business

ISTANBUL — In Istanbul's centuries-old Grand Bazaar, the hum of commerce is as noisy as ever. Vendors sell tea, coppersmiths craft their wares, merchants shout out to passing tourists.

But beneath this hubbub, discord is brewing against President Recep Tayyip Erdogan and the ruling Justice and Development Party (AKP) ahead of June 7 parliamentary elections.

The Grand Bazaar, home to some 4,000 shops where over 20,000 people work, has long been seen as a bastion of support for Erdogan and the Islamic-rooted AKP.

But as the economy starts to show weakness after years of impressive growth under Erdogan, who became president in 2014 after more than a decade as premier, there are growing signs that this support is beginning to wane.

"I used to vote for AKP but it's time for a change now. They have been in power for too long. I think they are burnt out now," said Huseyin Kaya, a silver shop owner who has worked in the Bazaar for two decades.

"The economy is not good. Business is bad. I have bought merchandise for tens of thousands of dollars and I have debts now that I cannot pay back," he added.

Many of the shopkeepers and small-scale manufacturers who have thrived under the AKP's rule voted for political stability and rewarded Erdogan for the country's growing prosperity, even after a corruption scandal and anti-government protests in 2013.

But the party is entering an election under fire over Turkey's economic performance for the first time since it came to power in 2002 due to stalling growth, stubbornly high inflation and unemployment.

'Spitting in our face' 

The bazaar was the scene of protests last month by shopkeepers who refused to vacate their stalls in Sandal Bedesten, a section of the 15th century shopping area, following a notice calling for the immediate eviction of some 80 shops.

The shopkeepers locked themselves in their shops, shouting anti-government slogans, before riot police stormed the area, evicting all the shops in Sandal Bedesten and briefly detaining some 20 shopkeepers.

The tenants say that Fatih Municipality, run by the AKP, had leased their shops for a higher rent to a single tenant "to cover the costs of the restoration" of the Grand Bazaar, which hosted a motorcycle chase scene in 2011 in the James Bond movie "Skyfall" that caused damage to the structure.

There are rumours that the shops could be converted into hotels as part of an ambitious project by the municipality.

"The government is just spitting on our face. I don't believe in any of them anymore. I'm not going to vote for AKP because we are in a grave situation here," said Mustafa Kahraman, a cloth merchant.

"They've clearly demonstrated they are there to serve mainly the rich and powerful," he added outside a square where his shop was located, now deserted.

Huseyin Kaya, a board member of Grand Bazaar Association of Shopkeepers, agreed: "All the government cares about is money. Is there anything they haven't sold yet?"

"People in our community used to vote for the AKP when they stood for something. But they have held the reins too long and the corruption and undemocratic behaviour is now shining through," he said.

'No economic miracle' 

Turkish economist Mustafa Donmez said "there is no economic miracle anymore" for the AKP's core voters, who until now supported the party over "bread and butter issues".

"The AKP has not much left to give them. The economy is very fragile and the future rates of growth will no longer be enough to create jobs for their children," he added.

"When the economy is going bad, they start to question whether the government is really corrupt, whether the officials really stuffed their pockets full and whether there is really a lack of freedom in the country," he indicated

Erdogan is hoping the AKP will win a two-thirds majority in the polls in order to change the constitution and boost his office's powers to that of a US-style executive president.

The latest opinion polls, however, suggest the AKP's support could fall sharply from the almost 50 per cent of the vote it garnered in 2011, with it possibly even losing its parliamentary majority.

But Selvi Gurey, who owns a souvenir shop in the bazaar, says he will vote for the AKP because he thinks a presidential system will bolster stability and economic growth.

"We owe a debt of gratitude to Erdogan, who has worked so tirelessly to make our life better. I think Turkey will be better off with a stronger president," he said.

Separately, Turkey's agriculture sector, a key pillar of the domestic economy, is increasingly feeling the pinch in a troubling development for the ruling party that is counting on farmers' support in this weekend's legislative elections.

On a cattle farm in the district of Cubuk outside Ankara, Ozkan Ilhan surveys his 500 cows with pride but declares that the future of the sector is in danger under the policies of AKP.

"Our economy is not going well at all. The AKP is not coping, it is carnage. If that continues it will be the end of the agricultural sector in our country." he says. "We are obliged to import agricultural products from abroad."

Such attitudes are bad news for the AKP which has smashed the opposition in Turkey's last three parliamentary elections and is seeking a two-thirds majority this time so it can make changes to the constitution.

Traditionally conservative, Turkish farmers helped the AKP come to power almost 13 years ago and their support has helped the party to maintain its grip ever since.

But now with growth dipping under three per cent and unemployment on the rise, the AKP is finding its support eroding and farmers have been among the first to vent their frustration.

Farmers and agricultural workers complain of a lack of policies aimed at helping local producers as well as an increase in charges.

For the first time, the price of fuel oil, which is widely used in the agricultural sector, has been a major election theme with the opposition promising to push prices down to 1.5 lira ($0,56) per litre from 4 lira.

The head of the opposition Republican People's Party (CHP) Kemal Kilicdaroglu told AFP that 2.7 million hectares of agricultural land have been allowed to go fallow under the AKP's rule.

"It's lamentable," he said. 

'Farmers the first victim' 

The agricultural sector is of huge importance for the country, employing one in five Turks. But there is immense room to improve its productivity and efficiency and it only accounts for nine per cent of the gross domestic product.

And even if there have been improvements in mechanisation, it remains well behind European production levels. 

Turkey is obliged to import quantities of food that it can produce itself, including barley wheat and cotton.

"We must all accept that Turkey is a major producer even if it is importing for the needs of a population of 76 million people," said Ali Ekber Yildirm, a journalist that specialises in agricultural affairs.

But he added: "One after another, state enterprises have been privatised. Prices in the sector are fixed by multinational companies. These companies have become quasi-monopolies in a strategic sector”.

He said that in general the Turkish leaders in Ankara pay little attention to what farmers have to say. "They know that most of them will vote for them under all conditions. They think they have them in their pockets for the elections."

Agriculture Minister Mehdi Eker has vehemently defended the government's record, saying that since 2010 it has handed out some 10 billion lira in subsidies for agricultural producers.

"This has never been done before in Turkey. This shows our particular interest in our agriculture," he said.

But the boasts are far from impressing everyone.

"These subsidies go mainly to people close to the ruling party," says Abdullah Aysu, a farmer from the Ankara region of Haymana who leads a trade union for farmers and pushes to give them greater rights.

"Farmers are the first victims of an economy that is on the way down and are then obliged to give up. Some 1.5 million farmers left their farms since the AKP came to power in 2002. One farmer in two has gone bankrupt," he indicated.

He said: "Our catastrophe will be that of the consumer."

ABU DHABI — Etihad Airways hit back Tuesday against claims by its US rivals that it receives unfair subsidies, urging Washington to "keep the skies open" in an official response to the allegations.

The national airline of Abu Dhabi said it "receives no government subsidies or sovereign guarantees" and no discounted fuel or airport services.

The response, submitted to the US departments of state, transportation and commerce, emphasised "the many benefits" of increased competition for US consumers, workers and carriers as well as trade and tourism.

"Our story is one of an airline that has chosen to challenge the global status quo, bringing new competition to markets that have for too long been dominated by the major legacy airlines," Etihad Chief Executive Officer (CEO) James Hogan said.

"It is now time to get back to the business of providing high quality air services and enhancing consumer choice, just as Open Skies intended," he added, referring to a pact allowing carriers more access to each other's markets.

‘Let's keep the skies open’

In March, American Airlines, Delta Airlines and United Airlines, along with US airline labour groups, accused Gulf carriers of enjoying interest-free loans, subsidised airport charges, government protection on fuel losses, and below-market labour costs that are considered unfair subsidies by the World Trade Organiaation.

They called on the US government to open new talks over bilateral air agreements to address what they said are violations of those pacts, giving the Gulf carriers unfair competitive advantage.

Etihad Airways said that "the Big Three carriers' claims, allegations, and requests for relief are not supported by fact, logic, law, or treaty."

It also reiterated earlier claims that the three US carriers had received US government subsidies worth $70 billion in the past 15 years.

The Abu Dhabi government has invested $14.3 billion in Etihad Airways since its establishment in 2003, of which $9.1 billion was provided in equity funding and $5.2 billion in shareholder loans, it indicated.

"These commitments were made on the basis that the airline would operate commercially, deliver a long-term return on investment, repay shareholder loans and achieve sustainable profitability," Etihad said.

Since 2003, Etihad Airways has raised in excess of $11 billion in long-term funding through the global financial markets. 

Around $5 billion of the airline's borrowings have been repaid, including $800 million in 2014, it added.

Last year, the three largest US carriers posted profits of almost $9 billion, close to half the gains racked up by the entire worldwide aviation industry, the airline noted.

Separately, the leaders of the three largest US airlines are stepping up their attack against Middle Eastern competitors that they say get unfair government subsidies.

The CEOs of American Airlines Group Inc., Delta Air Lines Inc., and United Continental Holdings Inc. made a rare public appearance together last month at the National Press Club in Washington to detail their claims.

— American's Doug Parker said Emirates, Etihad Airways and Qatar Airways have expanded service to the US by 25 per cent since the dispute broke out in January. He accused them of rushing to expand before the US government blocks new flights.

— United's Jeff Smisek said US airlines can compete against foreign rivals but not against the governments and energy riches of Qatar and the United Arab Emirates (UAE).

— Delta's Richard Anderson flatly denied a countercharge that the US airlines receive subsidies.

The US airlines charge that three big and fast-growing Middle Eastern carriers have stayed afloat by receiving more than $42 billion in subsidies from their governments since 2004.

They want the Obama administration to renegotiate treaties that allow airlines from Qatar and the UAE to fly to the US. And they want to block those airlines from adding new flights to the US.

Emirates, Etihad and Qatar Airways deny they are subsidized, and they accuse the US airlines of hypocrisy. Etihad put out a study claiming that American, Delta and United have received $70 billion in government help since 2000.

"We will prove clearly there is no harm from our market position," Katie Connell, a spokeswoman for Etihad, said, adding that her airline expands markets instead of simply poaching customers who used to fly on another airline.

The fight has gotten nasty. 

In April, the Delta CEO invoked memories of 9/11 against the Middle Eastern carriers; Qatar Airways CEO Akbar Al Baker fired back that Delta flies "crap" older planes.

It is unclear when the Obama administration might decide whether to reopen negotiations over the air-travel treaties with Qatar and the UAE or freeze their flights to the US. 

The US airlines say administration officials are looking at their arguments seriously.

For many air travellers, the dispute may be difficult to grasp. It pits US airlines that are making record profits against Gulf carriers rich enough to place huge orders for new jets.

The battle lines are a bit blurry, too. Some US consumer groups are siding with the Gulf airlines, arguing that competition will push fares down. So is JetBlue Airways, which has partnerships with Emirates, Etihad and Qatar.

Those three rarely compete directly on routes with American Airlines, United Airlines and Delta Air Lines, but they compete heavily with the US carriers' European partners including Air France and Lufthansa. 

US airlines share revenue from some flights with those partners, and they argue that subsidised airlines will eventually do great harm to them.

Those who oppose American, Delta and United in this fight, Parker said, "either don't understand that or don't care about US commercial aviation."

AMMAN — Amman East Power Plant announced Tuesday in a press statement that it recently received the highest honour in the  “Fast Start” category from the Combined Cycle Journal (CCJ), the independent voice of the gas-turbine-based generation sector of America’s electricity industry.

Amman East was honoured for its contribution to the industry with the “start up cost reduction project”.

AMMAN — Representatives of Jordan's industrial and commercial sectors on Tuesday urged Kuwaiti authorities to remove administrative and technical obstacles hindering the flow of Jordanian goods to Kuwait and bring new investments to the Kingdom.

At a meeting with an official Kuwaiti delegation, the representatives also asked that Kuwait import more Jordanian food products and medicine, encourage tourism, and facilitate transporting goods and truck crossing.

Jordan Chamber of Commerce board member Asaad Al Qawasmi called for creating an integrated business system between the two countries, pointing out that the Jordanian private sector is a leading sector in the region that is able to compete with foreign products exported to Kuwait in terms of quality and price.

Nimer Fahad Al Sabah, assistant undersecretary for international organisations and foreign trade affairs at the Kuwaiti ministry of commerce and industry, voiced Kuwait's interest in enhancing relations with Jordan, especially in the commercial and investment fields, noting that he will present the demands to senior Kuwaiti officials to study them and remove any obstacles hindering the flow of Jordanian goods to Kuwait.

AMMAN — National Steel Industry Company will resume production by mid-July, shareholders were told this week by Vice Chairman and General Manager Hisham Al Mufleh.

Chairman Ghassan Al Mufleh said during the ordinary general assembly meeting that the investment injected by the strategic partner saved the company from obligatory liquidation.

"The company is now in a much better situation and in the final stages to restart operations," he told shareholders.

According to the chairman, the company surmounted the difficulties that afflicted it in the past due to liquidity shortage.

He said that investments and loans provided by Nasri Al Mufleh & Partners Trading Company and Jordan Enterprise Development Corporation (JEDCO) have salvaged National Steel Industry.

"With JD1.8 million from Nasri Al Mufleh & Partners Trading Company, the company was able to repay the remaining debt owed to the Arab Bank, cover the expenses during the period of modernisation and  development, and buy the 57,375 square metres of land on which the factory is situated," he wrote in the 35th annual report.

Al Mufleh said during the general assembly meeting that, because there would be no working capital by the time the upgrading is completed, the strategic partner also agreed to extend a loan without interest to supply the company with liquidity needed for buying raw materials and sustaining the production line.

The annual report showed a JD1.1 million deficit in working capital at the end of last year as total current liabilities amounted to JD2 million while total current assets stood at JD0.9 million.

The chairman expressed appreciation to JEDCO for  supplying National Steel Industry with a JD1.4 million soft loan that enabled it to sign up the Indian firm K.N. Engineering Works to  renovate the production line and raise its annual output capacity to 120,000 tonnes.

Expecting production to restart during the second half of this year, he hoped that the company would regain its position in the Kingdom's steel manufacturing.

At present, the company is engaged in commercial activity buying and selling processed steel as well as selling iron filings.

This business earned the company JD122,226 in sales last year.

According to the balance sheet as of December 31, 2014, fixed assets increased to JD4 million, of which JD2.8 million was the net value of property, equipment and machinery, and JD0.9 million were projects under execution. The remaining JD0.3 million were financial assets at fair value.

With capital at JD2.2 million after restructuring, net shareholders equity boiled down to JD1.9 million when taking into account JD0.8 million of accumulated losses and JD0.6 million of mandatory reserves.

AMMAN — Reflecting a remarkable performance, the investments of Arab Orient Insurance Company (AOIC) increased to JD42.6 million at the end of March 2015.

According to unaudited financial statements covering the first quarter of this year, bank deposits accounted for JD35.4 million of the total, with the remaining JD7.2 million spread over financial assets at fair value.

Notes to the balance sheet showed that the cash in Jordanian dinars was deposited in 12 local banks for periods ranging between six months and one year, carrying 3.5-4.75 per cent interest rates during the first quarter of 2015.

The interest rates ranged between 3.25 – 5 per cent in 2014, down from 5.50 – 6.75 per cent in 2013. 

Of the total bank deposits, JD0.2 million were restricted as a legal requirement to the order of the director general of the Insurance  Commission (IC) .

The financial assets at fair value comprised the shares of Cairo Amman Bank, Amad Investment and Real Estate Development, Afaq for Energy, and Afaq Holding for Investment and Real Estate Development.

By contrast, the investments during the first quarter of last year amounted to JD38.8 million, of which JD33.7 million were deposits in banks and JD5.2 million were financial assets at fair value.

Financially, the income statement as of March 31, 2015 showed that AOIC increased net profit during the first quarter of this year by 50 per cent to JD2.7 million, compared to JD1.8 million at the end of March 2014.

During the first three months of this year, gross written premiums totalled JD35.2 million, 30.4 per cent higher than the JD27 million posted during the same period of last year.

According to the balance sheet as of March 31, 2015, total assets amounted to JD105.3 million, of which JD42.6 million were the abovementioned investments and JD42.8 million were net receivables.

Policyholders accounted for the majority of the net receivables which totalled JD30.3 million on March 31, 2014.

At JD34.7 million, shareholders equity comprised JD21.4 million capital, JD6.6 million retained earnings, and JD4 million mandatory reserve.

Despite such an impressive growth in investments and strong performance, AOIC Chairman Nasser Al Lozi indicated in the company's 17th annual report that 2014, just like the previous year, was marked by cut throat price competition.

"This approach [price competition] was the best option for insurance companies to secure business and maintain their market share," he said.

He explained that most insurance companies focused for a number of years on the investment side of operations rather than the technical, but the slump performance at the Amman Bourse, compelled them to shift to price competition.

Lozi also described 2014 as the most difficult of the past 10 years mentioning in particular scarce liquidity and lack of investment opportunities which influenced the purchasing power of the citizens and their living priorities.

"Despite competition, AOIC managed to keep up a high rate of policy renewals which, at 83 per cent, entailed  in some cases lowering prices for certain major projects, and, in other situations, widening the insurance  coverage," he wrote in a foreword.

According to the annual report, total premiums during 2014 amounted to JD94.9 million, 10.4 per cent higher than the JD86 million registered in 2013.

Marine insurance, accounted for JD2.6 million (JD2.3 million in 2013), fire insurance came at JD9 million (JD7.7 million) and liability, aviation and other insurance branches earned JD8.2 million (JD6.9 million).

Motor insurance premiums amounted to JD23.4 million (JD20.9 million) and the medical was the largest contributor with JD51.8 million (JD48.2 million). 

The report showed that paid claims during 2014 totalled JD70.7 million (JD61.6 million) the largest portion of which was JD41.9 million (JD45.8 million) in medical paid claims.

It was followed by JD18 million (JD13.7 million) in motor paid claims.

In terms of technical profit, medical insurance came atop with JD3.5 million, 105.8 per cent higher than the JD1.7 million generated in 2013.

Motor insurance ranked second with JD2.7 million technical profit, 37 per cent more than the JD2 million recorded in 2013.

Although the results of the remaining categories were lower in 2014 than the previous year, the overall technical profit of the five divisions reached JD7.3 million, 15 per cent higher than the JD6.3 million posted in 2013.

Besides the technical profits, the company earned JD1.5 million from bank interest, 4.3 per cent less than the JD1.6 million earned in 2013.  The chairman valued the medical activities indicating that this type of insurance covers more than 292,000 subscribers who hailed from 844 companies.

Lozi also esteemed the business coming from mega-projects pointing out that AOIC continues to serve more than 2,700 companies, describing this base as the largest corporate insurance portfolio in the Kingdom.

With an eye on the opportunities in large projects, he expected advantages for the Jordanian insurance market from growth in development schemes such as phosphate, potash, electricity and airport.

However, Lozi indicated that the foremost challenge facing the companies was the negative results brought by the civil liability of compulsory motor insurance, known as third party liability (TPL), from using cars. 

"Refusing to allow insurance companies to price or to choose the risks that correspond with its underwriting policies, means more losses to the sector unless the TPL prices are floated in a way that would balance between the premium and the risk," he said in the report, noting that IC is on course towards the floating objective during 2015.

Another challenge mentioned by Lozi was the stringency in the international reinsurance market regarding renewal of contracts for 2015.

"The strategy of reinsurance corporations continues to focus on specialisation to ensure profitability, on raising the technical profits of the direct [ceding] companies, and on minimising the losses rate as a result of the drop in returns from investments in international markets," the chairman added.

This rigidity was, however, surpassed under a unified collective reinsurance agreement, or a master treaty, organised for the fifth year by the Gulf Insurance Group (GIG) which owns a 90.2 per cent stake in AOIC.

Under the reinsurance master treaty, led in 2015 by Hannover Re., AOIC and other entities obtain better advantages.

A good example of the importance of such agreement was the fire at the factory of Al Nabil Company for Food Products, 

Although the preliminary report estimated the losses at around JD10 million, a calculation of claims to be paid under the unified collective reinsurance agreement reduced the AOIC share of the claim to only JD88,000.     

At the end of last year,  the operations of the company resulted in a JD5 million net profit after tax and provisions, 23.1 per cent higher than the JD4.1 million recorded at the end of 2013.

Lozi  underlined AOIC's successes indicating that total assets rose by 12.5 per cent to JD94 million (83.6 million in 2013).

Other data highlighted by the chairman included a 4.4 per cent increase in technical provisions which reached JD34.2 million (JD32.8 million).

AOIC, whose labour force comprises 278 employees, aims at exploring all possible opportunities to obtain a licence that would enable it add life insurance to its activities.

The company is currently distributing JD2.1 million in cash dividends to shareholders at a rate of 10 per cent.

WASHINGTON — The news remains mostly bleak for the American newspaper industry, struggling over the past decade to adapt to the new digital landscape.

The sale of the San Diego Union-Tribune in early May for $85 million underscored the horrific slump in the value of "old media" companies in recent years.

Although the sum paid by Tribune Publishing was only marginally below the $110 million in a 2011 sale of the San Diego group and excluded some valuable real estate, the newspaper was believed to be worth as much as $1 billion as late as 2004.

The story is the same at other once-proud US metropolitan dailies: according to the Pew Research Centre, valuations are down by more than 90 per cent from their peaks at the Boston Globe, Philadelphia Inquirer, Chicago Sun-Times and Minneapolis Star-Tribune.

While newspapers are trying to get readers with digital subscriptions and mobile apps, they are swimming against a powerful tide.

For the US daily newspaper sector over the past decade, weekday circulation has fallen 17 per cent and ad revenue more than 50 per cent, according to Pew.

And in 2014, three big media companies decided to spin off newspapers to focus on more profitable broadcast or digital properties.

"Every newspaper chain talks about getting digital faster. The plain truth is that despite almost two decades of effort, most aren't close to where they need to be," says Ken Doctor, an industry analyst who writes the Newsonomics blog and is a consultant for the research firm Outsell.

Soon, said Doctor, newspapers will have few options aside from cutting the frequency of the print edition, as several dailies have done, to save expenses.

Can't find a bottom

Doctor added that the industry has failed to increase revenue since 2008, making it harder to invest in digital. 

In the first quarter of 2015, seven of the largest newspaper groups made a combined profit of $21 million. In 2005, the large Gannett group alone earned $1.8 billion.

"These companies have little to invest," Doctor indicated. "They're still paying off debt, issuing dividends, keeping up with pension obligations, and anticipating print ad results that can't find a bottom."

Even The New York Times, among the most aggressive in shifting to digital news, acknowledged recently that 70 per cent of its revenues come from print.

But newspaper organisations need to rethink their strategy to act more like startups, says Alan Mutter, a former Chicago newspaper editor who is now a consultant on digital news.

"People in the media business have to recognise they're not in the print or broadcasting business, they are in the business of attracting audiences" to sell advertising, he indicated.

According to Mutter, many media organisations are under pressure to deliver quarterly earnings, which prevent a long-term strategy.

One exception is The Washington Post, which under new owner and Amazon founder Jeff Bezos has been expanding in news gathering as it refines its digital strategy.

This has paid off with a 65 per cent jump in digital visitors in the year through April, according to comScore figures.

Under Bezos, "the Post has invested in reporting and design, they have embedded technology and design people, they've done a lot of things right", Mutter said.

Although this has probably not translated into profits, Mutter added that "Bezos takes a long view and it's his own money".

Some newspapers have partnered with Facebook, which will host the content and deliver articles to users of the social network, potentially helping boost ad revenues.

Mutter said that even though newspapers had resisted such deals, they "swallowed their pride because they know they lack the sort of massive global reach that only Facebook can provide".

This, however, will only offer modest relief to newspapers, according to Mutter.

Motivating 'tribes' 

A study by the American Press Institute (API) released last month said a key for the industry is changing the culture of newsrooms to foster innovation. This includes allowing interaction of different groups, journalists, technicians and others which the study referred to as "tribes".

"To encourage innovation and transformation... organisations need to empower and motivate their tribes," the report said.

API deputy director, Jeff Sonderman, said cash-strapped newspapers can still invest and innovate by using a "lean startup" approach.

"Instead of spending a long time and a lot of money in a big attempt at something new, you spend a little bit of money on a small-scale experiment, and you build in small steps," he added.

Despite the downward spiral over the past decade, Sonderman noted that there are some positive signs.

"We see signs that publishers in the right environment with the right leadership are starting to stabilise and even grow in some areas," he said.

VIENNA — The Organisation of Petroleum Exporting Countries (OPEC) is likely to keep its output target unchanged when it meets on Friday because the global oil market appears to be in good shape and prices are expected to firm up from current levels, a senior Gulf OPEC delegate told Reuters.

Two more OPEC delegates expect no change in policy on June 5 when OPEC oil ministers are scheduled to meet in Vienna.

Oil prices have rallied after falling to a near six-year low close to $45 a barrel in January due to a global glut. Brent crude settled at $65.56 on Friday, up $2.98, or 4.8 per cent, on the day.

"It is unlikely that OPEC will make a decision regarding its production ceiling for two reasons: The first one that Russia and other non-OPEC producers have expressed their non-desire to cooperate in any idea of a production cut," the Gulf delegate said on Sunday.

"And the second one is that the market is firming up. Prices are expected to continue at current levels and most likely will go higher. Demand is also strong and the inventories are balanced. The market seems to be in good shape," the delegate indicated.

Crude oil inventories are above the five-year average but oil products stocks are within the five-year average, the delegate added.

"At the end, of course the final decision will be made by the ministers when they meet," the senior Gulf delegate continued.

Two officials from other OPEC producers made similar remarks.

"I don't think there will be any changes," said an official from an African OPEC member, referring to OPEC's output policy decision on June 5.

"Prices ... are within $60-$65, at least they are improving from where they were at before," another Gulf OPEC delegate said. "There is still an oversupply in the market, but the oversupply is less than what it was in November."

OPEC refused to cut output to shore up prices at its last meeting in November despite the glut, seeking to defend market share against higher-cost producers such as the United States. It left its output target at 30 million barrels per day.

The decision exacerbated the price fall from as high as $115 in June 2014.

However, early signs of slowing production in the United States and higher-than-expected growth in demand have helped drive the rally in prices from January's low.

AMMAN — An advanced technological platform under a sophisticated five-year strategy will transform Jordan Ahli Bank into a highly developed provider of banking services.

This thrust was announced Sunday at a press conference to mark the 60th anniversary of Jordan Ahli Bank which was established in 1955 and opened its first branch in downtown Amman/Al Rida Street on June 14, 1956.

Jordan Ahli Bank,  the first national bank set up in [East] Jordan by founders Yousef Muasher and Suleiman Sukkar with a JD250,000 capital, the bank is now the Kingdom's fourth largest with a JD175 million capital and 62 branches in Jordan, Palestine and Cyprus besides 117 automated teller machines (ATMs).

Total assets of the bank, which handles 390,000 accounts, amounted to JD2.3 billion at the end of the first quarter of this year. Total deposits and credit facilities reached JD1.9 billion and JD1.2 billion respectively. 

Marwan Awad, chief executive officer and general manager of Jordan Ahli Bank, told journalists that to keep up with technological developments, the T24 banking software system by Temenos was embraced because of its advanced technology and rich functionality.

"We wanted in the past years to carry out  many improvements to develop our products and services but were at a disadvantage because our infrastructure devices could not be employed towards that end," he said.

Under the new 2015-2020 strategy, customer centricity will be the key to a sustainable future, Awad stressed.

"All decisions and onward drive will evolve around customer service within a drive to raise production efficiency depending on information technology," the chief executive officer said, mentioning organisational changes within this context. 

He added that Jordan Ahli Bank will also keep up with various needs by introducing diversified banking products.

Awad indicated that the bank intends to focus on the Jordanian market and to expand its local share which he estimated to be 10-12 per cent at present.

He noted that there is no intention to raise the bank's capital but revealed that the monetary authority in Palestine wants each bank under its jurisdiction to raise the capital by JD25 million over the coming three years. 

Awad described the business and profitability of the seven branches that Jordan Ahli Bank operates in Palestine as very good.

Noting that market conditions in Jordan were tough, the chief executive officer said local businesses are still reeling from the repercussions of the international financial crisis or struggling due to the current regional developments.

Although he acknowledged that businesses were facing difficulties, Awad described the 6.5 per cent interest charged on 25-year housing loans as not viable, especially when the interest paid on deposits range between 3.5 - 4 per cent.

The chief executive officer remarked that higher interest charged on other credits balance the disparity, expecting this year’s profit to be about JD40 million, 10 per cent higher than the figure in 2014. 

He disagreed that most lending favour unproductive or consumer purchases indicating that 40 per cent of Jordan Ahli Bank's financing flows to the corporate sector, 30 per cent to retail, and another 30 per cent to small- and medium-sized enterprises (SMEs).

"Ads appearing in the media give the wrong impression that banks are primarily engaged in retail and consumer lending," he said.  

Awad underlined SMEs as an area of particular importance, noting that the bank also supports this segment through the subsidiary Ahli Microfinance Company which now employs about 130 employees from a labour force of about  25 staff members when it was established in July 1999. 

The support for SMEs, he said, can be seen in the activities of the SME Academy Unit which organises workshops to empower entrepreneurs with necessary business skills.

Awad also spoke extensively about corporate social responsibility whether in terms of financial or cultural contributions noting in this regard the Numismatic Museum which displays a variety of coins and books demonstrating a wealth of scientific and historical heritage.

He credited Raja'i Muasher who chaired the bank for more than 25 years for the growth achieved by the bank. Muasher also assumed several positions in the government including the post of deputy prime minister.

Asked about the trading price of the bank's share on the Amman Bourse, he replied that the fair value should at least be around JD2.

He urged shareholders to be vigilant not to undermine the value of the share at any cost, expressing doubt that the treasury shares option, when the company buys its own shares, would prop up the share value.  

On Sunday, the share price of Jordan Ahli Bank closed at  JD1.21.

AMMAN — Licensing, monitoring and supervising micro-finance companies have become the task of the Central Bank of Jordan (CBJ), as the 2015 Micro-Finance Companies By-law will go into effect as of June 1, a CBJ statement announced on Saturday.

The bank's decision to include these companies under its umbrella is in light of the sector's role in providing finances to low-income people or to those who cannot receive financial services from the banking sector. The decision will also help these categories of people achieve economic security through changing them from aid-receiving parties to productive ones.

The by-law defined micro-finance as: presenting finances and financial activities to low-income people or to those who cannot receive financial services, either in full or partially, from the banking sector, whether they are individuals, micro- or small-enterprises according to CBJ standards. CBJ added that it will work on developing the role of micro-finance sector and achieving its sustainability.

In the same regard, the by-law also banned any person from practicing any micro-finance activity without obtaining a licence from the CBJ unless he meets the requirements and conditions necessary for this purpose. As for current companies, the by-law granted them time to rectify their statuses.