Business

PARIS — French auto giant Renault reported on Tuesday that sales by volume slumped 21.3 per cent last year to 2.9 million vehicles in a market down 14.2 per cent due to the coronavirus pandemic.

The fall was "principally due to the company's large exposure to countries which imposed strict lockdowns... in the second quarter, plus an another slowdown in the fourth quarter, especially in France", Renault said in a statement.

For Europe as a whole, sales fell 25.8 per cent to 1.4 million units.

Hybrid and electric vehicles held up better than traditional cars in the second quarter and in the last three months of the year, orders in this segment were up 14 per cent from a year earlier in Europe, Renault said.

"From now on we will focus on profitability rather than sales volume, with unit margins being higher," Renault chief Luca de Meo said. 

Renault continued to dominate the European electric car market last year with sales of 115,888 vehicles, up more than 101 per cent.

Its small ZOE model accounted for the bulk of sales, with 100,000 vehicles.

HONG KONG — Asian markets were mixed on Monday as traders struggled to track another record performance on Wall Street, though investors remain broadly upbeat on the prospect of a further massive stimulus for the US economy, with President-elect Joe Biden calling for a spending spree in the trillions of dollars.

With vaccines being rolled out around the world and key risk events including the US election, Georgia senate run-offs and Brexit now out of the way, observers said focus is now on the expected global recovery from last year's economic catastrophe.

The need for more financial help for the world's top economy was laid out on Friday with data showing 140,000 people lost their jobs in December — the first fall since April — as virus infections and deaths surged across the country.

Biden, who will be sworn in as president on January 20, said he would press for a new rescue package that includes $2,000 direct payments to taxpayers and help for small businesses.

"The price tag will be high," he warned as he promised to lay out his proposals Thursday. "It will be in the trillions of dollars."

He added: "If we don't act now, things are going to get much worse and harder to get out of a hole later."

Investors welcomed the prospect of another spending splurge that will provide a huge boost to the economy, coupled with Federal Reserve financial support and record low rates for the foreseeable future.

The dollar extended gains across the board, and was sitting at a three-week peak against the yen.

 COVID's 'nasty cloud' 

Wall Street's three main indexes all finished last week at all-time highs, but Asia struggled to push on.

Hong Kong, Mumbai, Taipei, Manila, Jakarta and Bangkok were all up but Shanghai, Sydney, Singapore and Wellington fell, while Seoul was also lower despite a rally in market heavyweight Samsung that was fuelled by reports it is in talks with US giant Intel over making some of its best chips.

London, Paris and Frankfurt all fell at the open.

While the broad consensus is for a strong run in equities this year, there is a feeling that the latest rally may be petering out.

"After being bullish for several months, we are definitely becoming more cautious on the stock market up at these levels," said Matt Maley, at Miller Tabak + Co., adding that most of the surge in the S&P 500 from March its March trough is "behind us".

Axi strategist Stephen Innes added that fears about the virus, which continues to wreak havoc around the world and force governments to impose new lockdowns, remained the main stumbling block.

"COVID concerns continue to hang like a nasty cloud over the market, and given a great deal of optimism in stocks and oil is linked to the rollout of vaccines, investors are sitting with fingers and legs crossed that there won't be any negative news flows on this front [which] would prompt a sharp negative market reaction," he said in a commentary.

He also pointed to ongoing China-US tensions after the White House said it would end self-imposed restrictions on official contacts with Taiwan, a move likely to irk Beijing.

The change will add to complications for Biden as he assumes the presidency, with any move to reverse the decision opening him up to accusations of being soft on China.

Oil prices dropped but remain near 10-month highs, supported by hopes for more stimulus and following Saudi Arabia's announcement last week that it plans to slash output by a million barrels a month in February and March.

LONDON — Many British businesses are swiftly discovering that they must now pay duties on exports bound for the European Union, despite the breakthrough Brexit free trade deal clinched over Christmas.

The development, which has already helped spark sliding freight traffic to Ireland, is part of trade disruption that has become increasingly evident this year after Britain's Brexit divorce was finalised on December 31.

Trade has also been badly hampered by new COVID-19 border restrictions, with the roll-out of testing for lorry drivers as Britain races to curb a rampant variant of the deadly virus.

At the heart of the Brexit deal, which came into force on January 1, is the so-called "rules of origin" condition applied to all goods crossing the border.

The rules of origin, a key aspect of all major trade deals, can rapidly turn into a costly headache for businesses.

Under the Brexit provision, any good will be subject to a customs levy if it arrives in Britain from abroad and is then exported back into the European Union.

For example, if a British clothing retailer imports Chinese-made textiles, then it would then have to pay a customs charge if it re-exports the items into a member nation of the EU's single market and customs union.

Put simply, the rules therefore determine whether an export is considered British or not.

 'Businesses blindsided' 

"It is clear that many UK businesses exporting to the EU are going to be hit by tariffs," said Michelle Dale, senior manager at the Manchester office of chartered accountants UHY Hacker Young.

"Businesses have also been completely blindsided by the 'rule of origin' part of the deal, which leaves them at a major competitive disadvantage when selling in the EU. 

"Unfortunately, not enough was done to prepare them for this. It takes years to build an effective supply chain — and using non-EU suppliers is often the best option both in terms of cost and quality."

The Brexit agreement, which was sealed four and a half years after Britons voted to leave the European Union, grants zero customs duties if at least roughly 50 per cent of an exported product is made in the UK.

That applies to the majority of UK exports — but certainly not all of them.

The provision is all the more important because the EU accounts for more than half of Britain's trade.

The London-based Institute of Government think tank argues however that the complexity of supply chains means that proof of origin can be difficult for businesses to ascertain — and hard for authorities to assess.

A raft of British retailers are reportedly rushing to assess the impact of critical deliveries to EU nations, including London's top-end department store Fortnum and Mason.

Collapsed UK high-street department store Debenhams has already shut its online website in Ireland due to uncertainty over post-Brexit trade rules.

 'We need a solution' 

"At least 50 of our members face potential tariffs for reexporting goods to the EU," said William Bain, trade policy adviser at the British Retail Consortium industry organisation.

"We are working with members on short-term options and are seeking dialogue with the [UK] government and the EU on longer-term solutions to mitigate the effects of new tariffs," he added.

High-street retail giant Marks & Spencer warned Friday that the trade deal would "significantly impact" business in the Czech Republic, Ireland and France.

The deal however removes tariffs for Britain's largely foreign-owned carmaking industry, which avoids customs duties for cars manufactured with components made abroad.

Nissan has welcomed the agreement but has not yet indicated what will happen to the Japanese carmaker's largest plant in Europe which is based in Sunderland, northeast England. It had previously warned that a no-deal departure would threaten the factory's future.

Prime Minister Boris Johnson's Conservative government has yet to comment on the precise impact of the rules of origin on the business community.

"We continue to work closely with businesses to help them to adapt to any new trading requirements," a government spokesman said.

AMMAN — Access Bridge Ventures (ABV), a newly launched regionally focused early-stage venture capital fund, has made a first close. The fund, which will target a final commitment of over $25 million, garnered commitments from leading regional institutional investors, including Mubadala Capital, the financial investment arm of Mubadala Investment Company, Saudi Venture Capital Company, Jada, and several prominent family offices, each of whom will gain access to some of the region’s most transformative, home-grown tech companies, according to an ABV statement.

The International Monetary Fund estimates that micro, small and medium enterprises (MSMEs) represent about 96 per cent of registered companies and about half of all employment in the Middle East and North Africa (MENA) region. Despite this, the total financing gap for MSMEs is estimated to be as much as $240 billion, according to the International Finance Corporation, the statement said.

ABV will support high-growth tech start-ups from the Saudi Arabia, UAE, Egypt, Pakistan and the wider MENA region. Working with start-ups in the early stages of their development, ABV will help build regional and international champions across numerous sectors, including health-tech, edu-tech, fin-tech, enterprise-tech and Software as a Service, according to the statement.

Established earlier this year, ABV’s team is led by Issa Aghabi and Rakan AlRashed, who bring 25 years’ experience in investing and exiting tech companies in the MENA region and beyond. Prior to ABV, Issa headed the venture capital activities of the International Finance Corporation in MENA, and Pakistan. Meanwhile, Rakan was part of a leading Saudi investment firm that focused on Small and Medium Enterprises and start-ups.

Commenting on ABV’s launch, Issa Aghabi, Co-Founder and Managing Partner, said in the statement: “The MENA landscape has transformed over the past few years, with entrepreneurs and start-ups acting as a catalyst for economic growth and development. ABV has the unique ability to identify and cultivate this new breed of tech companies, many of which are extraordinary in their own right, and help them realise their full potential. Securing our first close reflects the confidence in ABV’s capabilities and investment strategy, where we lead the round and support our founders throughout their journey, as early as first institutional investor.”

CedarBridge Capital Partners (CedarBridge), a leading middle market private equity firm, has co-founded the fund as part of its mandate to partner with promising founders and management teams and help them expand their investment remit and achieve exceptional growth.

Magellan Makhlouf, co-founder and managing director of CedarBridge, said in the statement: “CedarBridge is proud to have co-founded ABV and we look forward to enhancing their offering with our vast global network and deep sectorial expertise. With our collective experience, ABV is well-positioned to make a meaningful impact and contribute to the growth of the region’s burgeoning tech industry.”

EDINBURGH — Scottish seafood exporters said on Friday they were facing a "perfect storm" from post-Brexit red tape and coronavirus restrictions, which could threaten the future of the industry.

Donna Fordyce, chief executive of Seafood Scotland, said companies had faced a "real challenge" with new customs checks and paperwork, on top of curbs to stop the spread of the virus.

"It's all Brexit-related," she told BBC radio, complaining of "pinch points" in IT systems on both sides of the Channel in England and France.

“We wanted a six-month grace period where we could iron out all these issues, so that when the time came it would be frictionless."

Scottish seafood is mainly exported to markets in northern France, where it is then sold on across Europe. With a live product, time is of the essence.

Exporters warned of the risk of delays before Britain left the Europe Union's customs union and single market on December 31, even with a tariff- and quota-free trade deal.

But Seafood Scotland said firms had been hit by "layer upon layer" of administrative problems which had caused "utter confusion".

In addition, the closure of the French border before Christmas due to coronavirus fears had caused lengthy delays.

Fordyce said in a statement on Thursday that consignments risked going into landfill but also the slump in exports would give fishing fleets little incentive to put to sea.

"In a very short time, we could see the destruction of a centuries-old market which contributes significantly to the Scottish economy," she added.

"It's a perfect storm for Scottish seafood exporters," she said.

Scotland's Europe and External Affairs Secretary Michael Russell said the problems at the borders were "exactly the sorts of issues that Scottish ministers have been raising since the Brexit referendum".

Scotland voted to remain in the EU in the 2016 referendum. The devolved nation's governing, pro-independence Scottish National Party has said Brexit strengthened the argument for Scotland to break away from the rest of the UK.

"The UK Government, with their bad Brexit deal, chose to impose these extra burdens on business at a time of unprecedented challenge — which is utterly unacceptable and very damaging to the economy and for jobs," Russell added. 

Jimmy Buchan, the chief executive of the Scottish Seafood Association, said earlier this week that trucks laden with fresh seafood were being held up in central Scotland due to problems with customs barcodes and lack of veterinary service capacity.

Entire trailers were being emptied so that every box and label can be checked, he said.

"Combined with computer problems on both sides of the English Channel, this is a worrying sign for the days and weeks ahead when the flow of produce will get much greater," he added.

"Ultimately our member businesses lose revenue and prices in the market become depressed in reaction to the problems.

"We are at the point now where the white-fish fleet may have to stop fishing.”

HONG KONG — Shares in China's two biggest companies Alibaba and Tencent tumbled in Hong Kong on Thursday in response to media reports that the Trump administration plans to press ahead with a ban on Americans investing in them.

E-commerce titan Alibaba sank almost four per cent and internet powerhouse Tencent shed 4.7 in morning trade after the Wall Street Journal said officials in multiple government departments were assessing the impact of an investment ban.

Such a move would be another blow to Alibaba, which has come under pressure from Chinese officials as regulators launch an anti-monopoly probe into it, while its fintech giant Ant Group was ordered to drastically change its business model.

The moves come as Beijing puts the squeeze on the once unbridled empire of tech tycoon Jack Ma.

The Wall Street Journal report came the same day the New York Stock Exchange reversed course for a second time to say it would delist three Chinese telecom equities from trading owing to new US government guidance.

Wednesday's announcement capped a dizzying few days of flip-flopping in which the stock exchange announced the removal at the weekend before making a U-turn on Monday, and then saying it would go ahead once more Wednesday.

The latest decision came after Treasury Secretary Steven Mnuchin disagreed with Monday's reversal.

The three state-owned telecom giants plunged, with China Unicom shedding more than 11 per cent while China Telecom was down more than nine per cent and China Mobile slipped more than seven per cent.

Trump issued an executive order in November banning Americans from investing in Chinese companies deemed to be supplying or supporting the country's military and security apparatus, earning a sharp rebuke from Beijing.

On Tuesday night he signed an executive order banning transactions involving Alipay, WeChat Pay and other apps linked to Chinese companies, drawing strong criticism from Beijing.

Alipay is owned by Alibaba and WeChat is owned by Tencent. 

The Wall Street Journal reported that officials at the State Department, Department of Defense and Treasury Department had all discussed how to implement an investment ban on the two Chinese e-commerce giants. 

Any ban could have a profound effect on US markets.

While the three Chinese telecoms firms are comparative small fry for the New York Stock Exchange, Alibaba and Tencent are China's two largest companies. 

At $1.4 trillion, the combined market value of their primary listings is twice the size of Spain's stock market, according to Bloomberg News. 

"If the bans are implemented then it'd be a huge thing for the market," Steven Leung, executive director at Uob Kay Hian (Hong Kong) told Bloomberg.

"It's still too early to say. After the Biden administration starts, the policy could change again."

SAN FRANCISCO — Apple is making environmental and social values factors it will weigh when calculating bonuses for top executives, according to a regulatory filing on Tuesday.

The change taking effect this year is intended to motivate Apple executives “to meet exceptionally high standards of values-driven leadership in addition to delivering strong financial results,” the Silicon Valley technology titan said in proxy documents filed with the Securities and Exchange Commission.

Financial targets and thresholds for executive bonuses at Apple will not change, the iPhone maker said.

“Beginning in 2021, an environmental, social, and governance modifier based on Apple Values and other key community initiatives will be incorporated into our annual cash incentive programme,” Apple said in the filing.

Living up to Apple’s stated values regarding sustainable energy, workplace diversity and other environmental and social issues will be among factors considered when deciding whether bonuses should be increased or decreased by as much as 10 per cent, according to the company.

“We’ve led the industry in reducing our environmental footprint for years and are committed to one day sourcing 100 per cent recycled and renewable materials across all of our products and packaging,” Apple said in a section of the filing outlining its values.

“We believe diversity drives innovation and is key to our success.”

Apple is to report its earnings for the final three months of last year on January 27, and has a virtual annual shareholders meeting slated for February 23.

DUBAI — The World Bank on Tuesday predicted a moderate economic recovery for the Middle East and North Africa (MENA) in 2021, while highlighting the many challenges still posed by the coronavirus pandemic.

The Washington-based institution said the pandemic had seen the region's economies shrink by about 5 per cent in 2020, inflicting heavy job losses and a sharp increase in the number of people living below the poverty line of less than $5.50 a day. 

"Among oil exporters, growth is expected to recover to 1.8 per cent this year, supported by normalising oil demand, the scheduled easing of the OPEC+ oil production cuts, policy support, and the gradual phasing out of domestic pandemic-related restrictions," it said in a report.

Saudi Arabia, the largest economy in the Arab world, will benefit from the resumption of public projects, which had been postponed at the beginning of the crisis, and the recovery of demand after a sharp rise in VAT, it said, tipping a 2 per cent expansion.

Growth should also accelerate to 1.5 per cent in Iran thanks to the recovery of domestic consumption and tourism and the mitigation of the effects of COVID-19, they added. 

Growth in other countries in the region is expected to reach 3.2 per cent in 2021 due to the easing of travel restrictions and a slow recovery of domestic demand. 

However, it is expected to reach only 2.7 per cent in Egypt, the most populous country in the region, following the "collapse" of various sectors, notably tourism and gas extraction.

The World Bank warned that regional economies faced a variety of hurdles as they try to get back on their feet.

"The recovery is contingent on containment of the pandemic, stabilising oil prices, no further escalation of geopolitical tensions, and the assumption of a vaccine rollout in the second half of the year," it said.

WASHINGTON — Tesla delivered a record number of cars in 2020, the company said, just narrowly missing its half a million target for the year.

The pioneering high-end electric vehicle maker delivered 180,570 cars to customers and produced 179,757 in the fourth quarter of the year, it said in a statement on Saturday.

Tesla's previous record was 139,300 vehicles delivered in the third quarter of 2020.

For the full year, Tesla delivered 499,550 cars to customers, just shy of its target of half a million, and produced 509,737 units.

The firm said its delivery count was conservative and that final numbers could vary by up to half a percentage point or more.

Tesla chief and co-founder Elon Musk hailed the figures as a "major milestone" for the firm.

"At the start of Tesla, I thought we had [optimistically] a 10% chance of surviving at all," the mercurial tech entrepreneur tweeted.

Tesla's entry-level Model 3 and its crossover Model Y accounted for nearly 86 per cent of deliveries, with the balance split between the luxury Model S sedan and the Model X SUV.

The company also said on Saturday that production of its Model Y had begun at its Chinese plant in Shanghai, with deliveries expected to begin shortly.

Tesla has long aimed to manufacture electric cars for the masses and in September Musk, the world's second richest person, said developments in battery technology meant the firm was looking at fielding a $25,000 model in around three years' time.

The company joined the prestigious Standard & Poor's 500 stock index on December 21.

Though its car production is modest compared with rivals, Tesla's growth prospects have spurred investors to push up its value so that it is now worth more than General Motors, Ford, Toyota, Honda, Fiat Chrysler and Volkswagen combined.

NEW YORK — Wall Street indices finished 2020 at all-time highs on Thursday, a surprising conclusion to a year in which the United States endured a recession caused by the deadly COVID-19 pandemic that continues to plague the country.

The Dow and S&P 500 finished at fresh records, capping a year in which they, along with the Nasdaq, scored significant gains even amid elevated joblessness, rising hunger and acute pain in sectors such as hospitality, airlines, oil and gas and the performing arts.

"For Main Street, it was a terrible year", said Briefing.com analyst Patrick O'Hare. "For Wall Street, it was a fantastic year."

The broad-based S&P 500, which swooned below the 2,200-point level at its nadir in March, finished the year at 3,756.07, up 16.3 per cent for the year.

European equity markets had a mixed year, with Frankfurt higher, but Paris declined and London suffered its worst year since the global financial crisis.

The gains in US indices seemed impossible in March, when exchanges were forced to suspend trading as stocks went into free-fall as much of the US economy was shut down to combat the coronavirus.

The US did not fully manage to get the virus under control, and concludes 2020 with its highest-ever single-day death toll of more than 3,900 people.

Yet, markets pivoted quickly from the fear of a depression-like collapse after the Federal Reserve stepped in with extraordinary stimulus and Congress mobilised to enact its biggest-ever fiscal package, the $2.2 trillion CARES Act.

Stocks began regaining ground in late March and rose for much of the summer. Volatility picked up again in the fall ahead of the November presidential election and as the infections spiked.

But Wall Street engineered a strong late-year rally as COVID-19 vaccines were approved and began to be rolled out, fueling hope for an economic recovery in the new year.

However, analysts see risks ahead in the first part of 2021.

"We've priced in a lot of the good news and not the bad news," said Art Hogan, chief market strategist at National Securities.

He expects the market in the upcoming period to fixate both on weakening economic data and on the virus's worrying spread.

"In large part, the market has done so well in 2020 because it is pricing in 2021," O'Hare said.

Sterling gains, FTSE falls 

Back in Europe, Paris suffered a 7.1-per cent drop but Frankfurt gained 3.6 per cent in volatile record-breaking deals over the course of 2020.

London's FTSE 100 suffered a 14-per cent drop for the year, its worst since 2008, but the British pound zoomed to a 2.5-year dollar peak before Britain's long-awaited exit from the European single market, with a trade deal in the bag on markets' final day of a coronavirus-ravaged 2020.

The country left the bloc on January 31 but has been in a standstill transition while it sought a free-trade agreement — which was finally clinched on Christmas Eve and was approved by lawmakers on Wednesday.

That dispelled long-running fears of a chaotic no-deal departure that could have sparked a double-dip downturn, after Britain tanked into a recession earlier this year on coronavirus fallout.

"A Brexit deal may have come extremely late in the day but there will be a massive sense of relief that the UK won't be battling no-deal on top of everything else in the coming months — and that relief can be seen in the pound," OANDA analyst Craig Erlam told AFP.

"It's ending the year on a high... It's all about the recovery now for the UK as it faces another devastating [virus] surge and most of the country moves into tier four."