Business

FARAYA, Lebanon — The mountains north of Beirut, usually a snowy winter playground for skiers and other tourists vital for Lebanon’s services-based economy, are brown, muddy and completely empty this season.

Hotel rooms lie vacant and winter sports rental shops are idle, with the lack of snow deterring even the keenest visitors.

An unseasonably warm and dry winter — the mildest in decades by most accounts — has also endangered the harvest of vineyards which export prize-winning Lebanese wines around the world.

Along with worsening security problems and political gridlock, the fickle weather has exacerbated a three-year drop in tourism in this small Mediterranean country. Before the conflict in neighbouring Syria erupted in 2011, the sector generated about 10 per cent of economic output.

“This is the first time the slopes have not opened at all,” said Joost Komen, general manager of Intercontinental Mzaar, the largest hotel and ski lodge in Faraya.

“That there is limited snow, it happens. But that there is absolutely no snow? No, this has never happened,” he added.

Komen told Reuters revenues were down more than 80 per cent, directly affecting around 600 families dependent on hotel jobs. Ski instructors, rental shops and other businesses that benefit from seasonal activity have also taken a severe blow.

“God forbid we have another year like this. If it happens again, you’ll see many shops shutting down,” said one vendor, sitting in a parking lot full of idle all-terrain vehicles.

An early snowstorm in December battered the Middle East with high winds and dropped around 30 centimetres of white powder in Faraya. Many thought it was a harbinger of a long and cold winter to come. Aid agencies worried about hundreds of thousands of Syrian refugees living in crude shelters at high altitudes.

But that first snowfall was not enough to open the slopes. There has been almost no precipitation since. Though it could still snow in March or even April, the damage has been done.

“What happened in January and February is gone. This is money unrecoverable,” Komen said.

Marwan Barakat, chief economist at Bank Audi, said those two months witnessed a decline in arrivals at Beirut Airport, one of few metrics available for analysing the tourism sector.

“This is probably due to some tourism foregone because of the adverse winter conditions,” he added.

Lack of precipitation and mild temperatures are creating problems for vineyards and farms across Lebanon.

Government observations put rainfall through the beginning of March at less than half the average for this time of year.

Massaya vineyard, spread out over 40 hectares in the Bekaa valley, is one of several struggling to cope.

Ramzi Ghosn, the winemaker at Massaya, said the lack of moisture would cut volumes of wine production significantly, although it might not jeopardise the quality. “The more the vines suffer, the better the wine usually,” he remarked.

But the mild winter will make vines start growing again and sprouting earlier than usual, meaning that a late winter storm or even just a brief cold spell could devastate the harvest.

“In Lebanon, we always said we don’t have to worry about the vines because we have perfect weather... but we have to worry about other issues. This year, in addition to the geopolitical issues, we have to worry about the vines,” said Ghosn.

Farmers of other crops are already feeling the effects of the abnormal winter weather.

Hassan Mheish, a farmer in the northern region of Tripoli, said the lack of rain had drastically reduced his almond crop, and threatened to destroy the olive and lemon harvests.

Standing on dry, cracked soil in an olive grove he manages, he said the government should build dams and take other steps to alleviate the impact of dwindling water resources on farmers.

“The wells are drying up. Now they’re mostly giving only mud and soil,” the farmer sighed.

AMMAN –– The European Bank for Reconstruction and Development (EBRD) on Monday officially launched a special unit to help the Kingdom’s small- and medium-sized businesses, which according to a government official struggle to access finance. 

On Monday evening, the EBRD’s Small Business Support (SBS) held an official launch event –– attended by executives from the London-based bank, government officials and a large number of private sector representatives –– to increase the awareness of local companies about the activities of the unit in Jordan. 

Speaking at the event, head of EBRD office in Jordan Heike Harmgart said SBS has been active in Jordan since 2012, providing business advice through more than 40 projects, helping companies access the know-how they need to succeed and grow. 

The programme’s activities in the southern and eastern Mediterranean (SEMED) region are funded by the SEMED Multi-Donor Account and the SEMED cooperation funds account, which have provided 2.4 million euros in donor support, according to the bank.  

Accounting for more than 98 per cent of active enterprises in Jordan, around 70 per cent of total employment, 40 per cent of national exports,  SMEs in Jordan still face challenges in access to finance, said Yarub Qudah, chief executive officer of the Jordan Enterprise Development Corporation. 

He indicated that the sector’s share of credit facilities extended by banks is only 5 per cent, describing the figure as “ironic”. 

Qudah said that in the past decade, Jordan’s exports grew from JD1.6 billion to JD7 billion, thanks to SMEs. 

“Without small- and medium-sized enterprises the Kingdom’s economy would not have grown,” he added, calling on the private sector to seize the support of  EBRD programme. 

Strengthening small businesses is a top priority for EBRD activities in Jordan as the country faces significant regional disparities, according to Hildegard Gacek, the bank’s managing director for SEMED. 

Smaller businesses continue to suffer from poor access to finance, limited exposure to managerial best practices and low productivity, which hamper their potential to create jobs, she said.

Charlotte Ruhe, director of the Small Business Support team at the EBRD, noted that the SBS facility can play a key role in supporting small businesses. 

“Improving access to external advice is important in helping them grow and become catalysts for the country’s economic development,” she said.

Drawing on the expertise of local consultants and international experts, SBS connects small- and medium-sized enterprises with the expertise that can boost their businesses, transferring the skills and know-how that help them innovate, attract finance and source further expertise, she added. 

The EBRD’s SBS team introduces the latest best practice in marketing, operations, information communication technology, human resources and energy efficiency to improve quality, resource efficiency and growth, according to the bank’s official. 

In addition to working with individual businesses, the EBRD also engages with government agencies, local business associations and chambers of commerce.  

In October last year, the EBRD opened a permanent office in Jordan in a step that was described by executives as long-term commitment to supporting economic development in the Kingdom.

The bank has also invested in two major projects in Jordan: A $100 million loan for Al Manakher Power Plant, and a $80 million credit for the Abdali shopping mall and entertainment centre in Amman.

Late last year, the bank granted Jordan the status of a recipient country, allowing the Kingdom to benefit from the bank’s capital resources.

DUBLIN — US fruit firm Chiquita Brands and Irish rival Fyffes, Europe’s largest distributor, have struck an all-stock deal to create the world’s biggest banana supplier.

With the $526 million tie-up, the new firm will grab some 14 per cent of the global banana market, and considerable negotiating power at a time when supermarkets are cutting prices for their product owing to an economic downturn.

“Two big fruit companies have felt the downward pressure of the big retail buyers on their margins and consolidation appears to them to be a strategy for survival,” said Bananalink, a British-based group which works for more sustainable trade in bananas and pineapples.

The global banana market, worth $7 billion, is currently controlled by four multinationals, according to the United Nations: Chiquita, Fresh Del Monte, Hawaii-founded Dole Food Company and Fyffes.

Chiquita and Fyffes sell 180 million boxes of bananas a year between them, versus 117 million for Del Monte and 110 for Dole. The combined ChiquitaFyffes will have $4.6 billion in annual revenues and expects to make operational pre-tax savings of at least $40 million by the end of 2016.

“The first three [companies] on a global scale are not too far away from each other, whereas Fyffes was a good deal smaller. Now a firm number one has been created, there will be some impetus for further consolidation in the sector,” said David Holohan, an analyst at Merrion Stockbrokers in Dublin.

The new firm will be listed in New York — though domiciled in Ireland for tax purposes -—and have a market value of $1.1 billion. Chiquita shareholders will own about 50.7 per cent of the combined company and Fyffes shareholders the remaining 49.3 per cent, the companies indicated.

The deal will be subject to review by competition authorities but, Holohan noted, is unlikely to prompt burdensome regulatory demands because the two companies operate mainly in separate North American and European markets.

Chiquita Chief Executive Ed Lonergan, who will be chairman of the combined company, was confident the match of the businesses would persuade regulators to give it the green light, with most of the savings expected in logistics.

“We looked at it and thought we could create a much stronger competitor,” Lonergan told Reuters. “The overlap between the businesses is de minimis.”

Fyffes shares leaped 44 per cent on Monday, bringing the stock, which had traded at about 10 times earnings prior to the announcement, roughly into line with its peers

Chiquita shareholders will get one share of the new company for each share held. Fyffes investors will get 0.1567 of a share in the new group for each existing share, which values it at a premium of 38 per cent over its Friday’s closing price.

Goldman Sachs and Wells Fargo Securities, LLC acted as financial advisers for Chiquita and its board and Lazard for Fyffes.

Most bananas are grown for export on large plantations in Latin America and Africa and are from a single variety. This standardises taste and brings economies of scale but leaves the bananas vulnerable to diseases which can require extensive fungicide treatment, a potential hazard to local ecosystems.

Campaigners for sustainable farming expressed concern that the ChiquitaFyffes tie-up could intensify the economic pressure on small-scale banana producers, as well as environmental hazards.

“The banana market is dysfunctional and this merger feels like further proof,” said Michael Gidney, chief executive of British charity The Fairtrade Foundation.

“There’s downward pressure that’s creating a race for the bottom. The big producers are under pressure too — the banana business is not working for anybody,” he added.

AMMAN — More than 800 small- and medium-sized companies have benefited from the first payment of the World Bank’s loan, valued at $48 million and presented to banks through the Central Bank of Jordan (CBJ) at a competitive interest rate. In a statement, the CBJ indicated that 60 per cent of companies that have benefited from the loan were located outside Amman, of which 57 per cent are owned by women and 21 per cent by young Jordanians. The statement said the project has succeeded in supporting small and medium enterprises and reaching out to the targeted segments outside the capital, noting that the success of the initiative will be reflected on the economic growth by helping to reduce unemployment and poverty. The CBJ recently announced the referral of the second payment of the loan, totalling $13 million, to banks and signing of loan agreement with the Arab Fund for Economic and Social Development, under which $50 million will go to support small-and medium-sized companies during the upcoming few months.

LONDON — Iran’s oil tanker fleet is gearing up for more business, with some vessels taking to the high seas after over more than a year at home ports, another sign that an easing in Western sanctions is enabling exports to begin to pick up.

Iran and Western governments reached an interim agreement in November to restrict Tehran’s disputed atomic work in exchange for limited sanctions relief for six months, which came into effect in January.

US and European sanctions imposed in the previous two years had sharply hit Iran’s oil exports, mainly by making it difficult for buyers to arrange financing for transactions and insurance and documentation for shipments.

The Geneva deal included an easing on restrictions on ship insurance and allows for less difficult shipping of oil that the OPEC (Organisation of Petroleum Exporting Countries) member is permitted to sell to buyers mainly in Asia.

Ship tracking sources say in recent weeks at least three Iranian supertankers had made their first trips to Asia after months at Iranian anchorages where they were storing unsold oil. The tankers, known as very large crude carriers (VLCCs), can hold up to 2 million barrels of oil each.

“While all eyes will be on whether we see an extension in sanctions relief after July, Iran’s fleet is more visible and active now,” one shipping industry source said.

Tanker tracking sources told Reuters recently that Iran’s oil exports have risen further in February for a fourth consecutive month, increasing by around 100,000 barrels per day (bpd) to at least 1.30 million bpd, just over half the pre-sanctions rate from 2011.

Many of Iran’s oil tankers belong to the country’s top operator NITC. One ship tracking source said NITC’s Dal Lake tanker was making its first journey outside the Gulf to Asia in 10 months. The Halistic was also heading to China on its first voyage since December 2012, while the Nanital was on its way to Asia making its first journey since last June.

Another NITC tanker, Alert, is currently in a dry dock in Oman for repairs.

“The enlarged NITC VLCC fleet will be able to go about its business without all of the subterfuge which has been apparent over the past few years. Initially, we are likely to see more VLCC cargoes heading East, freeing up the units which have formed the nucleus of the long-term Iranian floating storage fleet,” tanker broker EA Gibson said in a recent report.

“It is also likely that NITC will take the opportunity to undertake dry docking and repairs to many of the older tankers during the sanction suspension window,” it added.

The sanctions prohibit dealings by US and European companies with a list of firms that includes NITC, and companies from third countries that have dealt with NITC have themselves been added to the sanctions list.

Over the past few years NITC frequently changed the name of its vessels and flags to conceal its activity. Its fleet of 37 supertankers and 14 smaller tankers has an overall carrying capacity of around 86 million barrels of oil.

“The way NITC seems to be operating is as near to the pattern of a normal operator as possible — bearing in mind sanctions have prevented them having access to facilities in most other countries,” said Richard Hurley, a senior analyst at IHS Maritime.

“We have not seen any renaming activity recently. Previously we have seen a renaming every six to eight months. They should be due for a renaming but that does not seem to be happening,” he added.

As part of the Geneva deal, US sanctions have been eased on NITC for oil exports granted under waivers to specific buyer countries, but European Union (EU) sanctions on the carrier remain in place.

NITC’s Managing Director Ali Akbar Safa’ie was quoted by Iranian media in recent weeks as saying Iran’s oil exports “are done currently with the country’s tankers” with no need to use foreign vessels. He said there were fewer obstacles for exports to key clients including India and China due to the limited relief provided by the November deal.

When contacted, a senior NITC official said: “We are optimistic that everything is going to be okay. For the time being, things are as they were before.”

Among vessels also being used by Iran are some previously controlled by Irano Hind, an Indian-Iranian joint venture recently wound up due to sanctions, trade sources said. The former company’s fleet included at least three oil tankers. 

Oil exports

According to  Ole-Rikard Hammer of Norway’s RS Platou Economic Research, a return of Iranian exports was “no longer unrealistic”.

“Any return of Iranian flows would represent somewhat of a double-edged sword for the tanker market: More transportation volume, but also more vessels available due to reduced floating storage,” he said.

World powers have aimed to keep exports close to 1 million bpd to maintain pressure on Iran to abandon its nuclear programme. A return to Iran’s pre-sanction export level of around 2.2 million bpd is some way off.

Tehran faces hurdles ahead as many top ship insurers still balk at providing cover for Iranian oil cargoes, arguing that regulations are unclear over any potential claims process once the current six-month easing of sanctions ends in July.

“The main point for insurers... is the absence of confirmation from the US or Europe that insurers will be able to respond post 20 July to claims/liabilities arising during the six-month suspension period,” said Andrew Bardot, executive officer of the International Group of P&I clubs, an association whose members insure the majority of the world’s tanker fleet.

“Which renders any cover provided during this period potentially and in all probability worthless,” he added.

Specialist Protection & Indemnity (P&I) insurers, mutually owned by shipping lines, dominate the market for insuring ocean-going vessels against pollution and injury claims, the biggest costs when a tanker sinks.

Vessels transporting Iranian crude have previously been left with limited alternatives, mostly set up by importers.

“While many insurers still remain wary of returning to the market given the short six-month window on sanctions relief permitted by the interim Geneva agreement, any perception that the agreement will be renewed for an additional six months, or more, beyond the July 2014 deadline will encourage more to do so,” said Mark Dubowitz, of US-based think tank the Foundation for Defence of Democracies, which supports tough sanctions on Iran.

“Already, we are starting to see NITC... beginning to make its first journeys in over a year. Any further easing of sanctions may encourage insurers to jump back into the market and allow NITC to come in from the cold,” he added.

AMMAN — Jordan is currently participating in the Lebanon Economic Forum, which opened on Saturday. Finance Minister Umayya Toukan, head of the Jordanian delegation, is scheduled to deliver a speech on Sunday during a session dedicated to the Syrian crisis and the current status in countries affected by Arab Spring uprisings. About 400 Arab business leaders, government officials, and representatives of investment commissions are taking part in the forum.

BERLIN — Fancy a holiday in Yemen? What about Libya? Iraq, perhaps?

It’s a tough sell, but tour operators from locations considered among the world’s most dangerous have been trying to drum up interest at the world’s biggest travel fair, the ITB Berlin in the German capital.

Their brochures offer tantalising views of exotic souks, ancient ruins and breathtaking natural scenery, but curious visitors usually end up asking about the latest footage of violence and unrest they’ve seen on the television news.

“OK, you cannot visit all places in Yemen,” conceded Ibrahim Mohammed Al Attab, deputy marketing manager of the Yemen Tourism Promotion Board. Tourists were generally not at risk in cities, but Westerners should avoid crowds, he advised.

Attab, like his counterparts from Iraq and Libya, tried to stress the cultural and natural attractions of his country, ravaged by conflicts in the past half century and well off the beaten track for most travellers.

“But you can visit the city of Sanaa, Socotra Island and the famous ‘skyscraper city’ Shibam, so the most important sites in Yemen are secure,” he said, referring to the 16th century mudbrick towers of Shibam.

Among Yemen’s visitors are nature buffs and scientists who go to Socotra Island, home to unique plants and birds, and archaeologists interested in sites like Sanaa’s Old City, tourist board marketing officer Ahmed Y.Al Washali said.

Most come from China, Taiwan, Japan and South Korea: “Those governments don’t give such a high alert.”

He said about a million tourists visited Yemen in 2013, including Arabs from nearby states.

At Yemen’s stand, tour operators seated under photos of rugged mountains, exotic trees and a deserted beach handed out brochures showcasing their country’s cultural heritage.

Travel advice from countries like Britain and the United States warning citizens to avoid Yemen because of the risk of terrorism has hurt business, said Attab. Yemen should persuade such governments to change their advice, he added.

The impoverished Arabian Peninsula state is battling southern separatists, Al Qaeda-linked militants and rebels from the Houthi movement.

“We have to change the negative image to a really positive image of Arab generosity and hospitality,” Attab said.

Libyan ‘daydream’

Libya hopes photos of camels and Roman ruins will persuade visitors to forget about the lawlessness still gripping much of the country three years after Muammar Qadhafi was toppled.

One brochure promoted Libya as a “daydream” of desert lakes surrounded by lush greenery and crystal-clear seawater lapping isolated, palm-fringed beaches. But officials acknowledged visitors were still put off by conflict between the militias who helped to overthrow Qadhafi and his allies.

“The number of tourists coming plummeted after the revolution as the security situation wasn’t clear and the government didn’t give out permits for tourists to visit because it wasn’t sure if they’d come back,” said Abdussamea Almahbob, undersecretary for tourism, through an interpreter.

“Now it’s trying to make everything better,” he said.

Britain and the United States advise against travel to Libya. A Briton and a New Zealander were killed in an execution-style shooting on a beach near Sabratha in January.

Most visitors to Libya are archaeologists drawn by the Roman ruins or adventurers who take tours of sand dunes.

Abdurrazag Guerwash, head of Winzrik Group which offers tours to Tripoli and the oasis town of Ghadames, said the eastern city of Benghazi and southern Libya remained “very dangerous” but some pockets of the country were safe for holidays.

“Leptis Magna, Sabratha and Ghadames are very safe, very nice and very controlled areas and there’s a lot of things to see,” he said, adding most clients were Spaniards or Italians.

In 2013, he took 400 people on tours compared with up to 6,000 per month before the war. “We hope it gets better next year,” he said.

Iraqi shrines

Iraqi travel firms and hotels were also seeking business with posters of Islamic shrines and marsh landscapes.

While insisting the north of the country was safe for tourists, they found it hard to change people’s image of a country where nearly 8,000 civilians were killed in political violence in 2013.

The United States warns against all but essential travel. Britain makes an exception for the Kurdistan region in the north.

“It’s difficult to persuade people to go as there is still a war going on — a civil war,” said Lora El Jamal from the Iraqi travel firm Raihana Universal. “People are a bit scared even though they’d like to go when they see the brochures.”

Iraq is home to some of the holiest sites in Shiite Islam, such as the Imam Ali Mosque in Najaf and the Imam Hussein shrine in Kerbala and other sites around the country. Many mosques, both Shiite and Sunni, have been bombed in recent years.

Much of the demand to visit Iraq comes from Muslims going on pilgrimages.

LONDON — British finance and transport firms have struggled with particularly weak productivity since 2007, according to an official study which gave no details on why the problem was so acute in these sectors.

Productivity has been a major concern in Britain since the financial crisis and last year’s economic recovery has not boosted workers’ efficiency as much as the Bank of England (BoE) expected — potentially weighing on how much Britons can earn in the long term.

Service businesses account for more than three quarters of British output, and 79 per cent of total hours worked.

“Estimates of productivity in the services industry...  suggest that recent weakness is accounted for by several specific sub-industries — including finance and insurance, accommodation and food, and transport and storage services,” the report from the Office for National Statistics (ONS) said.

An ONS official said it was not clear why productivity was poor in those particular services.

But the report showed productivity has returned to pre-downturn trend rates in other types of services.

Many economists say low productivity is partly explained by lower-than-expected job losses during the recession that followed the financial crisis.

A business survey on Wednesday showed British companies hired staff at the fastest pace in at least 16 years last month.

Finance Minister George Osborne said last month productivity growth was disappointing, and put most of the blame on the slowness of a recovery in bank lending after the 2008 financial crisis.

Data on Monday showed lending to businesses declined again in January, and many small and medium-sized firms still complain of a lack of access to funding to pay for the investment that can make workers more productive.

An analysis from the ONS in January showed that while Britain enjoyed the strongest productivity growth among Group of 7 economies between 1991 and 2007, its performance was the weakest between 2007 and 2012.

BoE policy maker Ben Broadbent said last week that although there are grounds for optimism about an improvement in productivity, it may not approach US levels even if international headwinds recede. 

Separately, a study by a leading research institute said that a pledge by Britain’s government to slow immigration could make the economy 11 per cent smaller by 2060 and taxpayers would have to fund higher public spending.

Immigration has become a hot issue ahead of elections in 2015 and the end of restrictions on workers from Romania and Bulgaria.

Prime Minister David Cameron promised in the run-up to the last election in 2010 to slash net migration to the “tens of thousands” by 2015, down from the 200,000 a year expected under current trends.

But a halving of net migration over the period to 2060 would have “strong negative effects” on the economy, said the new study, published by the independent National Institute of Economic and Social Research.

“The level of both GDP [gross domestic product] and GDP per person fall during the simulation period by 11 per cent and 2.7 per cent respectively,” it indicated.

Furthermore, lower numbers of immigrants, who tend to be young, would add significantly to public spending, as a share of the economy, in order to care for a generally older population.

“To keep the government budget balanced, the labour income tax rate has to be increased by 2.2 percentage points in the lower migration scenario,” the report indicated.

That meant net wages would be 3.3 per cent lower in 2060 than if immigration flows remain unchanged, it noted.

Under pressure from the anti-immigration UK Independence Party, Cameron has said he wants to restrict the relocation of migrants from poorer European Union (EU) states to richer ones, challenging one of the central tenets of the EU.

Deputy Prime Minister Nick Clegg, whose Liberal Democrats share power with Cameron’s Conservatives, said curbing immigrant numbers would damage the economy.

LONDON — Turkey’s lira and South Africa’s rand will weaken more this year, caught in the crosshairs of emerging market capital outflows and an ascendant US dollar, according to a Reuters poll that also showed Russia’s ruble losing more ground.

Investors and speculators have sold off emerging market assets since the US Federal Reserve (Fed) made clear late last year that it would gradually taper its massive monthly bond purchase programme, which up until then had been propping them up.

As it became more clear the Fed intended to wind down the programme by year-end, emerging market currencies got hit hard, although there has been a let-up in the selling over the last few weeks.

The Turkish lira, which has lost about a fifth of its value over the past year is expected to get hit by a political scandal that has gripped the government in Ankara.

A graft probe which led to the resignation of three ministers in December 2013 and shook Turkish Prime Minister Recep Tayyip Erdogan’s government unnerved investors further, particularly with elections looming in March and August.

In January, the Turkish central bank raised all of its key interest rates in a dramatic move in an emergency policy meeting to defend a crumbling currency that is among the most vulnerable to another sell-off.

“We remain bearish on the longer term given our outlook on US yields, emerging market growth and the risk that the important election year in Turkey brings a renewed pressure once again later in the year,” Anezka Christovova, foreign exchnage strategist at Credit Suisse said.

The lira, which touched a record low of 2.39 in January and has fallen around 3 per cent so far this year, is expected to trade at 2.25 to the dollar in a month, 2.27 per dollar in three and settle at 2.25 a dollar in a year.

Like the lira, the rand also lost almost a fifth of its value last year due to its sticky current account and domestic labour strife.

It is expected to shed around 3 per cent in the next 12 months to trade at 11.02 against the dollar.

“The key concern for the rand is this current account deficit because even though the currency has been very weak already, the current account has not shown any significant signs of improvement,” said Barclays Africa analyst Mike Keenan.

South Africa’s current account deficit widened in the third quarter to a five-year high, increasing the economy’s vulnerability to external shocks, while trade figures for January reported last week point to a further deterioration.

“We think the rand will start to weaken soon because we have had a bit of profit taking by the rand bears, but the positioning is now well set for a renewed bout of weakness,” he added.

The Russian ruble, which has fallen nearly 10 per cent this year and hit a record low on Monday, will also fall a bit more, but not very much, so far shrugging off the biggest escalation in tensions between Russia and the West since the Cold War.

But all three currencies remained top picks by global currency strategists as most vulnerable to another emerging market sell-off.

Strategists in a poll taken over the last 48 hours predict the ruble will recover a little to 35.50 against the dollar in a month, 35.00 in three months before weakening to 36.17 in a year’s time.

But when asked how low it could trade in the near term, the consensus from nine strategists put it at 37 to a dollar.

“If you look at the ruble forecast, a lot of it is dollar strength. It’s not like I’m predicting isolated ruble panic but I think the ruble is faced with challenges,” said John Hardy, head of foreign exchnage strategy at Saxo Bank.

“The economy is underperforming and I think they [Russia] would like to see the ruble weaker anyway... in terms of making Russia competitive,” he added.

Separately, foreign exchange strategists polled by Reuters expect the dollar to easily outperform other major currencies in the coming year, driven by demand for US assets prompted by a shift in Fed policy.

By signalling its intentions of closing its quantitative easing programme this year, the Fed may raise interest rates in the second half of next year.

Wednesday’s poll of over 60 analysts conducted March 3-5, showed the dollar set to gain against the euro, yen and sterling over the next 12 months.

“Real interest rates in the US are going to rise and that is going to certainly decrease the (capital) flow outside of the US into other economies,” said Geoffrey Yu, a currency strategist at UBS.

“We have seen that trend in emerging markets already and are going to see it in other economies as well,” he added.

The poll showed the euro holding around $1.36 in a month’s time, just shy of Wednesday trading level around $1.37.

It is expected to weaken over the next year — to $1.34 in three months, and $1.28 in 12.

Similarly, the yen was forecast to hold near 102 per US dollar in a month, and then weaken to 104 in three months and 110 in a year.

A fall in the yen to 110 per dollar in a year, as the poll predicts, would take the currency to a low not seen since the depths of the financial crisis in 2008.

Divergence

Analysts also attribute the broad dollar rally to the divergence in monetary policies in developed economies.

While calls for the Fed tightening its policy have increased, expectations are for the Bank of Japan and the European Central Bank (ECB) to maintain an easing bias to support their economies.

Indeed, with eurozone inflation running well below the ECB’s target of just under 2 per cent, the central bank is under pressure to print money, something a separate Reuters poll showed a growing minority predicting.

“They [the ECB] have precious little ammunition left, but at the very least they will try and make as much dovish noise as possible,” said Kit Jukes, head of foreign exchange research at Societe Generale, referring to Thursday’s ECB rates meeting.

Over the past few years leading currency watchers as a group have repeatedly called for the euro to weaken, only to see it rise against the dollar.

However, if the ECB does ease in a substantial way by way of outright quantitative easing like its counterparts in other developed economies, that trend could reverse.

“There can be some justification for the euro strength like a reduction in risk premium and capital flows, but it probably has reached its peak and we expect it to weaken up ahead,” UBS’s Yu said.

The British pound was forecast at $1.66 in one month, and then to weaken to 1.65 in three and 1.62 in a year.

KUWAIT CITY — Kuwaiti telecoms giant Zain has secured a syndicated revolving credit facility of $800 million (580 million euros) from 11 international and regional banks for general corporate use. France’s Credit Agricole Corporate and Investment Bank acted as coordinator and the facility agent for the loan, it indicated. Other banks who contributed to the loan are Arab Bank, The Bank of Tokyo-Mitsubishi UFJ, National Bank of Abu Dhabi, National Bank of Kuwait, Natixis, Samba Financial Group and The Royal Bank of Scotland. “The response to this facility is a testament to Zain’s strong relationships with the banking community, and their confidence in the company’s financial health and future business plans,” said Zain Group Chief Executive Officer Scott Gegenheimer. In addition to Kuwait, Zain operates in seven other countries including Saudi Arabia and Iraq. It has around 46 million clients.