Business

AMMAN — Aqaba Container Terminal (ACT), showed strong resilience in 2019, steering against challenges facing the economy. This was boosted by a strong start in 2020, signaling an improving business environment, according to an ACT statement. 

An improvement has become noticeable since the second half of 2019, as indicated by IPSOS Jordan Consumer Confidence Index for the last quarter of 2019 which went up 3 points, said the statement.

ACT volume posted 3.4 per cent growth for the August to December period compared to the previous year.

As for the first two months of 2020, they have confirmed the trend with a growth in import container volumes of 13 per cent and in export container volumes of 6 per cent.

“A key component of the way we do business at ACT is continuous improvement. We strive every day to build on our success and promote progress by remaining committed to the operational standards we have set, regardless of any external challenges we may face,” ACT CEO, Steven Yoogalingam, said in the statement.

“2019 was a year with many challenges. 2020 had a strong start but the year will not be free of challenges,” he conceded. 

The terminal’s strategy to promote Aqaba as a gateway to Iraq and the wider Levant delivered a sharp increase in containers to Iraq (up 367 per cent compared to previous year), and thus contributed to the positive results recorded for the past few months.

ICRC, the global humanitarian agency for the protection and assistance for victims of armed conflict providing support and emergency relief to Syrian refugees, and Nile Forwarding, the project cargo expert who ships several hundreds of containers into Iraq, both made Aqaba their preferred gateway.

Nile Forwarding founder & CEO, Nasri Aqrabawi, said, “We have found in ACT a true business partner which has supported us to develop the most efficient supply chain into Iraq. They went the extra mile to ensure that the processes and costs of all the different parties involved were all clear and without surprises. From our perspective, 2020 is a promising year for Aqaba as gateway to Iraq.”

ICRC Head of Logistics Support Centre Jean-Marie Falzone underscored support from the Aqaba Special Economic Zone Authority. 

The strong drive of Jordan Customs authorities to digitalise essential cargo clearance processes have led to significant improvements in the dwell-time (average number of days that an importer leaves a container at ACT) reducing by a full day in 2019 compared to 2018 and reaching record low levels in January this year ‒ down 3.3 days compared with January 2017. 

Moreover, the new Jordan National Single Window enabled pre-arrival clearance process which in turn allowed customers to clear their containers in as little as 48 to 72 hours after discharge in Jordan, in line with the best international standards.

ACT launched a new company website allowing the port users to easily check the status of their containers through a track and trace system, and check the position of vessel at berth or expected to berth in, according to the statement.

DUBAI — Shares in the energy-dependent Arab Gulf countries plunged to multiyear lows on Sunday after recent failure by the cartel of the Organisation of Petroleum Exporting Countries (OPEC) and its allies to agree a proposed additional oil production cut.

On Friday, OPEC and its allies failed to clinch a deal on production cuts that would have offered support to energy markets, thus sending prices tumbling to four-month lows. 

The OPEC+ meeting was expected to agree to deeper cuts of 1.5 million barrels per day to counter markets fears, but Moscow refused to tighten supply.

Fears of a price war were stoked as Saudi Arabia — the world's top exporter — quickly responded by making significant cuts to its oil price.

All the seven bourses in the Gulf were in the red amid a panic sell-off over fears that energy prices, the mainstay of public revenues in the region, could collapse.

The Saudi stock market, the largest in the region, dived by 7.7 per cent minutes from the opening bell on Sunday, the first day of the trading week.

Shares in oil giant Saudi Aramco dropped below their IPO price of 32 riyals ($8.5) for the first time, losing some 7.6 per cent to 30.50 riyals.

The world's biggest company launched on the bourse in December in a record-breaking initial public offering, but since then its market value has slipped from the IPO value of $1.71 trillion to $1.63 trillion. 

The Dubai Financial Market shed 8.5 per cent at one point on Sunday, its worst decline in six years, before recovering slightly.

Its sister market in Abu Dhabi also lost 7 per cent, while the Qatar Stock Exchange dropped 3.5 per cent.

Market leader Emaar Properties, the largest real estate company in the Middle East, dropped 9.1 per cent to its lowest ever price of 2.99 dirhams (81 cents) a share.

Kuwait Boursa authorities stopped trading after the Premier Index slumped 10 per cent while the All-Shares index dived 8.4 per cent.

The tiny markets of Bahrain and Oman dropped by 3 per cent and 1.1 per cent, respectively.

VIENNA — Members of the Organisation of the Petroleum Exporting Countries (OPEC) cartel and its allies failed to reach a deal on oil production cuts on Friday, after Moscow refused to tighten supply, sending oil prices tumbling.

The day before, OPEC ministers, led by Saudi Arabia, had recommended reducing output by 1.5 million barrels per day in the face of the global slowdown and fall in demand for oil.

But the decision hinged on agreement from the so-called OPEC+ grouping — Russia, the world’s second largest oil producer, foremost among them.

Following hours of discussions, Russian Energy Minister Alexander Novak said that the talks between OPEC and OPEC+ had failed to bring about a deal. 

“Regarding cuts in production, given today’s decision, from April 1, no one — neither OPEC countries nor OPEC+ countries — are obliged to lower production,” he told reporters after the meeting.

Most other ministers, including Saudi Arabia’s, left the meeting at the Vienna-based headquarters of the Organisation of Petroleum Exporting Countries stone-faced without comments.

Oil prices, which have already tumbled to lows not seen since mid-2017 fell further. As news of the “no deal” result reached the markets, Brent Crude fell 9 per cent to $45.28 around 16:30GMT, while US oil prices later fell 10.1 per cent to end at $41.28.

“Today’s outcome is a psychological blow for the market, as the steep plunge in oil prices shows,” analyst Ann-Louise Hittle of Wood Mackenzie said. 

‘Painful decision’ 

OPEC’s Secretary General Mohammed Barkindo said all parties had decided to adjourn the meeting — “a general, painful decision” — although consultations would continue.

“We have some few knotty issues, but the norm is here to have everybody on board,” he told reporters.

“I believe that nobody in this group of countries would like us to relapse into the downturn that we went through 2014, 2015, 2016. They’re all conscious of that.”

According to the plan drawn up by OPEC Thursday, OPEC+ would have taken on 500,000 barrels of the cuts running until the end of 2020.

The 23 producers have since early 2017 tried to support prices through production cuts, initially of the order of 1.2 million barrels per day. 

In December, with abundant supply weighing on prices, they announced a further 500,000 barrel cut with Saudi Arabia adding a “voluntary” contribution of 400,000 barrels.

‘Internal competitor’ 

Russian officials had been quoted in recent days as being much cooler on the idea of big additional production cuts, saying that current price levels are satisfactory for Moscow and its budget planning.

The big players in Russia’s oil industry fear that an aggressive policy of output cuts will only lead to lost revenue and ceding market share to competitors, particularly the United States, the world’s number one oil producer, with its booming shale oil sector.

“The Russians can live with $40 a barrel oil and it seems they are willing to stomach even lower prices in the short-term to see the industry consolidate,” Senior Market Analyst Edward Moya at the online broker Oanda said.

The Kpler energy analysis company on Thursday pointed out that Russia had increasingly been acting as “internal competitor” in the relatively new OPEC+ format, which itself has been thrown into question by Friday’s failure to reach consensus.

“In recent years, not only Russia has pledged fewer production cuts than Saudi Arabia... its compliance with the deal has also been minimal,” the company noted.

As well as grappling with the economic fallout from the coronavirus epidemic, delegations have been affected in a much more practical way at this meeting amidst more than 50 confirmed cases of the virus in Austria.

Delegates have had their temperature tested on the way into the building and been advised to avoid handshakes. 

BEIRUT — Lebanon said on Saturday it would default on its Eurobond debt for the first time and seek out debt restructuring agreements amid a spiralling financial crisis that has hit foreign reserves. 

Foreign currency reserves have fallen to "a worrying and dangerous level which pushes the Lebanese government to suspend payment of the March 9 Eurobond maturity because of a need for these funds", Prime Minister Hassan Diab said in an address to the nation. 

"The Lebanese state will seek to restructure its debts," added Diab, whose self-styled government of technocrats was formed in January to tackle an intensifying financial crisis amid unprecedented protests.

The country has been going through a severe liquidity crunch and months of anti-government protests.

On Saturday, the government was due to decide whether to repay a $1.2-billion Eurobond maturing on March 9.

The president, prime minister and senior finance officials "agreed to support the government in any decision regarding debt management, with the exception of a payment of debt maturities", the presidency had said in a statement.

Lebanon's debt burden, long among the largest in the world, is now equivalent to nearly 170 per cent of its gross domestic product.

Despite a series of crisis, the country has never before defaulted, but in recent months it has grappled with its worst economic turmoil since the 1975-1990 civil war.

Foreign currency inflows have slowed, Lebanon's pound has plunged and banks have imposed tough restrictions on dollar withdrawals and transfers.

According to Marwan Barakat, head of research at Bank Audi, Lebanese banks owned $12.7 billion of the country's outstanding 30 billion Eurobonds as of the end of January.

The central bank held $5.7 billion and the remaining were owned by foreign creditors, he said.

According to local media reports, Lebanese banks have recently sold a chunk of their Eurobonds to foreign lenders.

Local banks, which own a chunk of the Eurobonds maturing on March 9, have argued against a default, saying it would pile added pressure on a cash-strapped banking sector and compromise Lebanon's ties with foreign creditors.

Lawmakers, most notably those representing the Shiite Amal and Hizbollah movements, have advocated debt restructuring to preserve plummeting foreign currency reserves.

Debt restructuring 

Anti-government demonstrators who have remained on the streets since October have also lobbied against repayment, fearing a depletion of reserves could further limit access to their savings.

"We shouldn't have to pay the price of government shortcomings," said Nour, a 16-year-old demonstrator, during a rally outside central bank headquarters in Beirut.

Lebanon's sovereign debt rating slid into junk territory long ago, but investor confidence has fallen further since the mass protests erupted.

Credit rating agencies have warned of further downgrades in the event of a default, but economists have stressed the need to protect Lebanon's foreign currency reserves.

Jad Chaaban, an economics professor at the American University of Beirut, blamed the political class for Lebanon's predicament, accusing them of decades of corruption. 

"This 'catastrophe' or 'fireball' is the creation of a failed and criminal political class that has lied and robbed for more than 30 years," he said on Facebook.

He called on officials to restructure the debt and introduce an economic rescue plan that would protect modest depositors.

Diab met last month with a delegation from the International Monetary Fund (IMF) to discuss how to tackle the country's spiralling economic crisis.

The premier asked the Washington-based crisis lender for advice, but has yet to ask for financial assistance.

Barakat at Bank Audi said IMF assistance was necessary. 

"Lebanon needs first and foremost an imminent debt restructuring plan within the context of a comprehensive plan for debt management," he told AFP.

"The best is to have such a plan under the umbrella of the IMF for international financial assistance to materialise."

The Lebanese pound, which has been pegged to the dollar since 1997, has plummeted on the parallel market, amid soaring inflation and unemployment. 

The World Bank has warned of an impeding recession that may see poverty rates rise drastically. 

VIENNA — Ministers from the Organisation of the Petroleum Exporting Countries (OPEC) cartel on Thursday recommended a drastic production cut of 1.5 million barrels per day to their allies to counter a slump in demand.

However, it remains to be seen whether the OPEC+ states — Russia in particular — will be prepared to countenance such a large cut when they join the meeting of the OPEC on Friday.

OPEC members — led by the world's third-largest oil producer Saudi Arabia — agreed on Thursday to recommend "a further adjustment of 1.5 million barrels per day until 30 June 2020", a statement issued by the Vienna-based bloc said.

Countries in the OPEC+ grouping of the cartel's allies would be asked to take on 500,000 barrels of the cuts, the statement added.

Producers had already had to contend with abundant supplies weighing on prices — agreeing to 500,000-barrels-per-day production cuts at their last meeting in December — but the spread of COVID-19 across the world has sent prices plunging.

The European benchmark, Brent crude, sank to under $50 per barrel on Sunday, a level not breached since July 2017.

'Might not be enough' 

The success of the summit will above all hang on the alliance between Saudi Arabia and Russia, the most important players in the OPEC and OPEC+ groupings, respectively.

Russian President Vladimir Putin was quoted on Sunday as saying the current market price was "acceptable" and above the level foreseen in Russian economic planning.

Russia's RIA Novosti agency reported on Wednesday that Moscow's delegation was proposing an extension of the existing deal with no fresh cuts.

Ann-Louise Hittle, an analyst with Macro Oils, said she expected that Russia, world's number two producer after the United States, to agree with the cut "given their history of co-operation with OPEC".

Tamas Varga of PVM told AFP that even the recommended extra cuts "might not be enough", saying OPEC's new forecasts for a drop in global oil demand growth may turn out to be "overoptimistic". 

"I believe that oil prices will fail to recover significantly for the remainder of the year…," he said.

Some economists believe it is not impossible that the world economy could contract in the first quarter of the year, which implies lower demand for oil than OPEC has been forecasting, although activity is expected to bounce back once the crisis fades. 

Oil prices drifted lower after the announcement.

BEIRUT — A Lebanese prosecutor on Thursday ordered an asset freeze for 20 banks and their board directors, two judicial sources said, in the latest move targeting the crisis-hit country's under-fire banks.

Lebanon has been gripped since October 17 by mass protests against the political class and banking sector, even as it faces its worst economic crisis in decades.

Banks have since September imposed increasingly tight limits on dollar withdrawals and transfers abroad to tackle a severe liquidity crisis, sparking frustration among ordinary depositors.

Financial prosecutor Ali Ibrahim slapped "a notice of asset freeze on 20 banks and on the property of their board directors", a judicial source told AFP.

Assets to be frozen in an apparent move to bring the banks under pressure included "real estate, cars and companies", the source said.

A second source said it was "a preliminary measure that will be followed by others according to the response of the banks and their treatment of small depositors."

Both sources said the decision still needed to be approved by central bank head Riad Salameh, but that he was likely to agree to avoid a collapse of the banking sector.

The move come after the prosecutor separately called in 15 banks on Monday over more than 2 billion dollars in capital flight despite the restrictions in the two months after the start of the protests.

Lebanon is currently facing its worst economic crisis since its 1975-1990 civil war.

The value of the Lebanese pound has plummeted on the black market, prices have risen, and many businesses have been forced to slash salaries, dismiss staff or close.

Lebanon is one of the most indebted countries in the world, with a public debt equivalent to 150 per cent of its gross domestic product.

The country is now under pressure to pay a $1.2 billion Eurobond maturing on March 9, with a decision expected on Saturday on whether or not to default.

LONDON — As ministers from the cartel of the Organisation of the Petroleum Exporting Countries (OPEC) gather in Vienna for an extraordinary meeting to mull current market conditions, they must reckon with potential side-effects of pushing for more cuts.

At their last meeting in December, ministers decided on cuts of 500,000 barrels per day, shared out between OPEC members and allies in the so-called OPEC+ grouping.

OPEC kingpin Saudi Arabia took on a third of the cuts at 167,000 barrels, and said it would add a reduction of 400,000 more barrels a day on a “voluntary” basis.

That dwarfed the three next biggest contributions combined, from the United Arab Emirates (60,000 barrels), Kuwait (55,000) and Iraq (50,000).

Russia, the biggest producer of the OPEC+ group, agreed to a modest cut of 70,000 barrels even though Russian production levels have been slightly higher than Saudi Arabia’s.

Cuts ‘headache’ 

Beyond the stated level of cuts, OPEC’s credibility rests on the commitment of member states to follow through on them, as seen by Saudi Arabia’s scolding of members who have exceeded their quotas, such as Nigeria and Iraq.

But a policy that relies too heavily on production cuts might reveal one of the bloc’s weaknesses.

With non-members, particularly the United States, showing no let up in the amount that they are producing, a further cut runs the risk of reducing the bloc’s share of the global market.

“Deeper production cuts are a headache for OPEC, which has seen its market share falling to a historical low of 35 per cent recently,” says Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Moreover, not all members have been joining the effort where cuts are concerned: Iran, Venezuela and Libya have exemptions due to various political and economic crises which mean that output has in any case been falling already.

Iran, reeling under the effect of re-imposed US sanctions, has seen its output drop by 40 per cent in two years.

Libya has seen a tenfold fall in production in recent weeks owing to a blockade launched by forces loyal to military strongman Khalifa Haftar in the east of the country.

But the prospect of Libya regaining a normal level of output, or Venezuela and Iran overcoming their crises, is not without problems for OPEC either.

Unless there was a concurrent uptick in demand, OPEC would be forced to consider yet more cuts — and overcome the rows that would almost certainly be sparked by considerations of how to share them out fairly among members.