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NEW YORK — Global equities sank deeper into the red on Friday following dour economic news from China while a slump in oil prices deepened.

US investor appetite was dampened by economic data that suggested the central bank may continue raising interest rates, further eroding gains from a relief rally after Tuesday's midterm elections.

Higher US energy stockpiles drove benchmark WTI crude to its longest losing streak in more than 30 years, with the tenth straight lower finish, while the dollar gained against the pound and the euro. 

In equities, Frankfurt was the lone standout posting gains, while London, New York, Paris, Tokyo and Shanghai all crumbled, but New York indices were still higher for the week.

Hong Kong lost 2.4 per cent on the day. 

Chinese wholesale inflation numbers released on Friday came in weaker than expected, possibly pointing to slackening demand, while auto sales were also lower.

Gregori Volokhine of Meeschaert Financial Services told AFP there were "clear signs" of slowing in the Chinese economy, amid the tariff battle between Washington and Beijing.

"But, while a trade war can be resolved through negotiation, an economic slowdown is a much more serious problem," he said.

"Slowing growth in China represents a risk for everyone."

Meanwhile, US wholesale inflation, also released on Friday, was hotter than forecast, diminishing chances the Federal Reserve (Fed) will slow the pace of interest rate increases.

David Madden, analyst at CMC Markets, told AFP that "rising US stockpiles, rising US production — which is now at a record-high — and talk of Iraq and Indonesia raising output next year are all factors as to why oil is lower. Ongoing concerns about China slowing down are a factor too".

Madden added that the "price needs to strike a balance, of being cheap enough to keep demand strong, and keep [US President Donald] Trump happy, but not so low that their oil revenue drops drastically".

Capital Economics meanwhile warned that as the global economy slows into 2019 the US market would take a buffeting.

"We think that the global economy will slow next year," said the consultancy, which forecast the US stock market "will fall by nearly 15 per cent in 2019". 

Shares in European energy companies tanked as oil slid back. BP shed 2 per cent, Shell gave up 1 per cent and Total lost 2.5 per cent. But US firms Exxon Mobil and Chevron were little changed.

Stock markets had enjoyed a midweek rally after traders bet that expected gridlock on Capitol Hill would prevent Congress from enacting policies that could encroach on Trump's business-friendly agenda.

But markets began to sag again on Thursday after the Fed said it expected further "gradual" interest rate increases.

JOHANNESBURG — Saudi Arabia has made a $1 billion bid for a broad partnership with South African state-owned defence group Denel that would include acquisition of a minority stake in a joint venture with Germany's Rheinmetall, a source familiar with the offer said.

Currently heavily dependent on imports, Saudi Arabia, the world's third-largest defence spender, is seeking partnerships to develop its own domestic defence industry with the goal of localising half of its military spending by 2030. 

Saudi Arabian Military Industries (SAMI), the kingdom's state defence company, told Reuters last month that it was in discussions with all major South African firms and aimed to conclude the first deals by the end of this year.

According to the source, who asked not to be named due to the sensitivity of the talks, Saudi Arabia was targeting Denel's 49 per cent stake in Rheinmetall Denel Munition (RDM).

RDM is a South African-based joint venture formed in 2008 between Denel and Rheinmetall Waffe Munition GmbH, which holds the remaining 51 per cent stake. It specialises in the development, design and manufacture of medium and large-calibre ammunition including artillery shells.

A Rheinmetall spokesman declined to comment. The German government is currently reviewing all arms sales to Saudi Arabia after the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul.

Industry sources said RDM operates independently and is subject to South African law, which means exports from the unit are not subject to German government oversight. The sources said they did not expect that a change in the ownership of the venture would require a German government review.

Under the Saudi offer, SAMI would also finance research and development in other Denel divisions including Denel Dynamics, which develops and produces tactical missiles and precision guided weapons. 

Denel and SAMI would share intellectual property and under a new joint venture would target defence export markets in the Middle East and North Africa.

Finally, Saudi Arabia — already a top Denel customer for military vehicles, artillery munitions and radar equipment — would purchase a certain amount of the group's production. The Saudis expect an answer from the South African authorities by the end of December.

"Saudi Arabia has made a unique business proposition to the South African government. As our discussions are not finalised yet we cannot provide any comment," SAMI CEO Andreas Schwer wrote in response to Reuters' questions.

‘Ripe for partnerships’

South African President Cyril Ramaphosa last week said Denel was "ripe for joint-venture partnerships". But he added that the government had not yet weighed the Saudi bid or proposals from what he said were a number of other suitors looking to partner with Denel.

A Denel spokesperson would not comment on any specific bid, saying that such negotiations take place on a state-to-state basis. 

Ramaphosa's spokeswoman Khusela Diko said the president would only make a decision on the Saudi offer to partner with Denel once it was discussed by Cabinet. 

"No decision has been made yet," Diko told Reuters.

The source with knowledge of the Saudi bid told Reuters that Rheinmetall informally approached Denel's board last year aiming to deepen its collaboration with the company. 

The source said Rheinmetall had, like Saudi Arabia, expressed interest in acquiring Denel's minority stake in RDM and other Denel divisions but was rebuffed.

Rheinmetall declined to comment.

Denel is grappling with an acute liquidity crunch and is struggling to pay salaries and deliver on roughly 18 billion rand ($1.29 billion) of outstanding orders. 

Following seven years of modest profits, the company said last week it had made an operating loss of 1.7 billion rand in the 2017/18 financial year.

Sector observers say finding an equity partner is essential to Denel's survival. 

However, the interest in the company from Saudi Arabia, which is accused of committing abuses in the war in Yemen and has admitted responsibility for Khashoggi's death, has spawned public debate in South Africa. 

South African Foreign Minister Lindiwe Sisulu said last month human rights would be considered in any deliberations over a potential Saudi deal.

MANILA — A consortium of China Telecom and firms controlled by a Filipino tycoon was provisionally named winner of the Philippines’ third telecoms licence on Wednesday, after two rival bids were rejected and foreign players opted out.

State-controlled China Telecom joined businessman Dennis Uy — whose interests include real estate, energy, shipping and logistics — to form the consortium Mislatel and challenge existing players Globe Telecom and rival PLDT.

The third licence was offered at the behest of Philippine President Rodrigo Duterte and aims to boost the country’s notoriously patchy services and end a domestic duopoly long accused of being uncompetitive.

Duterte has made strong business ties with Beijing his top foreign policy priority and expressed a desire to have a Chinese firm in the domestic market. He even “offered” the licence to Chinese Premier Li Keqiang.

Uy’s ties to the president are well known and he was a contributor to his 2016 election campaign, hailing from Davao, the city where Duterte was mayor for 22 years.

In a statement issued moments after being declared winner, Mislatel called it a “historic opportunity to provide the best telecommunications services that Filipinos have been aspiring for”.

The Mislatel consortium includes China Telecom and two of Uy’s firms — Udenna Corporation, a holding company, and Chelsea Logistics Holdings, one of its units.

Foreign firms that had shown interest opted out, including Norway’s Telenor, South Korea’s KT Corp. and Vietnam’s Viettel. 

Foreigners were required to join a consortium due to a 40 per cent ownership cap in a local telecoms outfit, which experts say has limited competitiveness in a sector worth about $5 billion a year in revenue.

Mislatel agreed to meet the telecom regulator’s 140 billion pesos to 240 billion pesos ($2.65 billion-$4.55 billion) capital expenditure requirement over five years.

There were only two rival bids — Philippine Telegraph & Telephone Corp. and a consortium of TierOne and LCS Group — but both were rejected for being incomplete. 

Both said they would appeal.

Analysts see the Philippines and its 105 million people as a potential growth market, with its thriving $23 billion business process outsourcing sector and its underdeveloped mobile and fixed-line services, which consumer groups complain are unreliable and expensive.

TOKYO — Japanese car giant Toyota upgraded its full-year forecast on Tuesday, as the firm posted a 16-per cent gain in net profit for the six months to September, thanks to steady global sales and cost-cutting efforts.

The maker of the Camry sedan and Prius hybrid revised upward its net profit forecast to 2.3 trillion yen ($20.3 billion) from its earlier estimate of 2.12 trillion yen for the year to March 2019 thanks to a weak yen.

But even if the firm, which also has the Lexus luxury brand, hits this forecast, profits would still be lower than the record 2.49 trillion yen posted for the previous fiscal year.

In the April-September period, Toyota’s bottom-line profit rose 16 per cent to 1.24 trillion yen, beating a 10-per cent gain forecast by analysts.

The upbeat results boosted its shares by more than two per cent on the Tokyo Stock Exchange.

Senior managing officer Masayoshi Shirayanagi said in a statement the firm was “steadily making progress” in its efforts to cut costs.

Revenue for the first half increased 3.4 per cent to a record 14.7 trillion yen amid steady vehicle sales in North America, Europe, and Asia.

Toyota also revised upward its full-year sales forecast to what would be a record 29.5 trillion yen.

“Toyota is showing solid results so far in this fiscal year thanks to its cost-cutting efforts,” said Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm.

Japanese automakers, however, remain on edge over talk of US tariffs, though immediate action by Washington has been put off for now.

“Trade rows are still hanging over the Japanese auto industry,” Takada told AFP.

“Immediate fears of extra tariffs on Japanese auto exports have been put off for now but they may revive depending upon Japan-US trade talks,” he said.

Toyota has warned the cost of an imported vehicle would rise by $6,000 if the US levies a 25-per cent tariff on cars and parts from abroad.

“We can’t yet say the risk has receded,” said Didier Leroy, Toyota executive vice president.

“There is still great uncertainty. Our goal is to be ready if it should happen,” Leroy told AFP.

In September, Donald Trump and Japan’s Prime Minister Shinzo Abe announced an agreement to start negotiations on a trade deal.

The two leaders also agreed that the US will not impose additional tariffs on Japanese-made cars as long as the bilateral negotiations continue.

“Japanese carmakers are also bracing for the impact of US trade disputes with other major economies,” Takada said.

Last week, Honda Motor upgraded its annual forecasts after first-half profits rose more than 19 per cent on brisk sales of motorcycles in Asia.

Japan’s third-largest automaker now expects net profit to reach 675 billion yen for the fiscal year, down from last year but a still an increase from its forecast last quarter.

Their rival Nissan Motor is scheduled to announce first-half results on Thursday.

BAGHDAD — Along the Iraqi banks of the Euphrates River, one question dominates the conversation. What killed the fish? 

Thousands of tonnes of freshwater carp have washed up dead this month, leaving Iraqi fish farmers reeling from the significant loss of earnings. Carp is the country's national dish, commonly barbecued outdoors across restaurants in Baghdad.

Agriculture officials have ruled out deliberate poisoning after rumours swirled of unspecified foul play, but the immediate causes are still unclear.

The worst-hit fish farms are in Babel province, south of Baghdad, where farmers scooped dozens of floating carp carcasses out of their cages and dumped them in the Euphrates over the weekend.

"We could not remove them all," said Mohammed Ali Hamza Al Jumaili, a fish farm owner in Mussayab, some 70km south of Baghdad. "The effort of a whole year has been wasted in addition to the money we had paid for workers and feed. We have employed more workers to get dead fish out of the cages."

As excavators were employed to remove the large volume of the dead fish, Al Jumaili warned that prices could more than double to 10,000 Iraqi dinars ($8.43) per kilo after the losses.

"We call on the government to compensate all the fish farmers, whether those who have officially-licensed farms or those who do not, to enable them to continue fish production. Our losses were huge, as you can see."

The agriculture ministry said in a statement on Sunday that illness among the carp spread quickly because of cramped conditions in breeding cages, and that reduced water flow along the Euphrates had also contributed.

It said that in the last 48 hours no new cases of perishing fish have been reported. The official Al Sabah newspaper reported on Sunday that tests would be done outside the country to try to find out what killed the fish.

The incident is a dramatic sign of worsening pollution and water problems in Iraq, which is increasingly struggling to provide a sufficient supply of clean water, especially in the south of the country.

In Basra, some 500km to the southeast of Baghdad, the Shatt-al-Arab River, where the Euphrates and Tigris meet, is now so polluted it threatens the lives of the more than 4 million inhabitants.

AMMAN — Profit after tax of 194 out of 195 market-listed public shareholding companies which have provided the market with their financial statements, was 18 per cent higher for the first three-quarters of 2018 compared to their results at the end of the same period last year. 

In a statement released by the Jordan News Agency, Petra, the Amman Stock Exchange (ASE) market Chief Executive Officer Nader Azar said their profit rose to JD900.2 million from JD762, 7 million. 

The industrial sector topped the list of the companies which recorded higher profit, followed by the financial sector. As for the service sector, its profit dropped by 7.1 per cent, according to the statement. 

In terms of companies’ overall performance, the ASE data revealed that a total of 117 market-listed companies posted profit during the January through September period of 2018.

 Out of those, 65 companies recorded better results in the first three-quarters of 2018 while 77 companies posted losses in comparison with their results during the same period last year, the statement said. 

Also, out of those 117 companies, 29 firms managed to reduce their losses compared to those recorded in the same period of 2017, the statement indicated.

BEIJING — Chinese e-commerce giant Alibaba on Friday posted a 54 per cent boost in revenue in the second quarter and saw profits rebound ahead of Singles Day, the largest shopping holiday of the year in China.

Alibaba reported a net profit of 20 billion yuan ($2.9 billion), a 13 per cent year-on-year increase, with strong revenue from its core business.

This compared to a 41 per cent drop in profits in the previous quarter after Alibaba handed out compensation awards for employees related to Ant Financial, Alibaba's finance affiliate.

But profits in the second quarter were "tempered" due to investments outside of the company's core e-commerce business, including those in digital entertainment and media, said Maggie Wu, chief financial officer of Alibaba Group.

The company also consolidated its food delivery unit Ele.me and logistics arm Cainiao Network, resulting in a 19 per cent year-on-year decrease in income from operations, which hit a total of 13.5 billion yuan ($1.97 billion).

Overall, Alibaba's second quarter growth figures showed steady growth, despite concerns over an economic slowdown in China amid its trade war with the United States. 

Revenue from the company's cloud business grew 90 per cent year-on-year, while daily average subscribers of Youku, Alibaba's video streaming platform, more than doubled this quarter. 

The e-commerce giant has also continued to invest in what it calls "new retail", which optimises in-store sales and service using data culled from online. Hema, a grocery store launched by Alibaba in 2015, is one of the company's flagships of "new retail", as customers can shop and dine in-store as well as order groceries online.

On November 11, the company will enjoy one of its busiest days of the year or Singles Day, which features discounts and deals across Alibaba's two major e-commerce sites, Tmall and Taobao. 

Last year, Alibaba's net profit soared 35 per cent after record-breaking sales during its annual shopping festival. 

Still, China's largest e-commerce company has decided to play it safe "in light of current fluid macro-economic conditions", said Alibaba in its quarterly earnings report. 

The company has cut back its fiscal year 2019 annual revenue predictions from 383 billion yuan ($55.66 billion) to 375 billion yuan ($54.49 billion).

In September, Jack Ma, the company's 54-year-old chairman, sent a jolt through China's business community when he announced plans to step down in 2019.

PARIS — A stocks rally on hopes of a US-China trade deal ran out of steam on Friday as the rising certainty of further US interest rates increases chilled fervour for equities.

Investors took the shine off Apple shares, which plunged 6.8 per cent on a disappointing holiday season forecast and word that it will stop reporting how many iPhones it sells.

Trading in Asia started with a bang after US President Donald Trump hailed positive talks with Chinese counterpart Xi Jinping, which was a rare sign of hope in the stand-off between the world's top two economies.

A later report said he had asked officials to draw up a draft bill as he eyes a potential trade deal between the two.

Hong Kong jumped more than four per cent, while Shanghai and the yuan soared as dealers seized on the news, hoping for a breakthrough in a rift that has rocked global equities and fuelled warnings about global growth.

European shares also benefitted from the positive sentiment in the morning, as did Wall Street at the open, but later reports of US officials saying there was a long way to go before a deal took the steam out of the rally.

"The announcement cooled the mood a little," said market analyst David Madden at CMC Markets UK.

The yuan also rallied to 6.8961 to the dollar — its best rate since mid-October — well off the 10-year lows around 6.97 on Thursday.

Rate hikes 'on track' 

In the United States, data that showed the economy added 250,000 net new positions in October, handily overshooting forecasts, also helped cut short the equity rally.

That data, along with the fastest gain in wages since April 2009 at a 3.1 per cent annual increase, helped cement expectations the US Federal Reserve will continue to gradually increase interest rates.

"Investors viewed all this through [US Federal Reserve Chairman] Jerome Powell's glasses," said Spreadex analyst Connor Campbell. 

"The strength of the US economy, as suggested by that data, likely mitigates some of the concerns caused by October's market correction, and leaves the Federal Reserve on track to raise interest rates in December, with the potential for three or more hikes across 2019," he added in a note to clients.

Rising bond yields, in anticipation of the interest rate hike, reduced the attractiveness of equities and bolstered the dollar.

Oil prices fell further after Thursday's plunge of more than 2 per cent on oversupply worries, as Washington announced on Friday it will allow eight countries to continue importing Iranian oil, at lower levels, despite US sanctions on Iran coming back into place within days.

The commodity has lost around 15 per cent from four-year highs at the start of last month as Russia and the Organisation of the Petroleum Exporting Countries said they would bolster output to ease supply concerns due to the sanctions. 

Dealers have also been concerned about the impact on demand from a trade war between China and the US.

LONDON  — A deal giving London, the world's largest centre of international finance, basic access to European Union financial markets after Brexit is nearly done, a British official said.

Such a deal would give the United Kingdom a level of access to the EU similar to that of major US and Japanese firms, while however tying it to many EU finance rules for years to come.

"We are making progress," the official, who spoke on condition of anonymity, told Reuters.

But the official said the financial services deal would be based around the EU's existing "equivalence" system — far short of the deep and preferential post-Brexit market access that many have been hoping for.

Another British official also speaking on condition of anonymity said that, while there was progress, nothing was finalised yet. 

The financial services deal was part of the overall Brexit deal that Prime Minister Theresa May hopes to strike by the end of the year at the latest, the second official said.

Britain's Brexit ministry said progress was being made on reaching a financial services deal, while the European Commission had no immediate comment.

Many top bankers fear that Brexit will slowly undermine London's pre-eminent position as the world's biggest international financial centre and a Reuters survey found that, so far, just over 600 are moving away.

Global banks have already reorganised some operations ahead of Britain's departure from the European Union, due on March 29.

The Times newspaper reported that a tentative deal had been reached on all aspects of a future partnership on services, as well as the exchange of data. 

The pound jumped following the report in The Times, extending gains in early trade to reach $1.2914 by 08:55 GMT.

Britain is currently home to the world's largest number of banks and hosts the largest commercial insurance market. 

About 6 trillion euros ($6.82 trillion) or 37 per cent, of Europe's financial assets are managed in the UK capital, almost twice the amount of its nearest rival, Paris.

In addition, London dominates Europe's 5.2 trillion euro investment banking industry. While New York is by some measures bigger, it is more centred on American markets.

Brexit and the city 

Since Britain voted to leave the EU more than two years ago, some of the world's most powerful finance companies in London have been searching for a way to preserve the existing cross-border flow of trading after Brexit.

The tentative deal being discussed falls far short of that.

Currently, inside the EU, banks and insurers in Britain enjoy unfettered access to customers across the bloc in all financial activities. 

Equivalence, however, covers a more limited range of business and excludes major activities such as commercial bank lending. Law firm Hogan Lovells has estimated that equivalence rules cover just a quarter of all EU cross-border financial services business.

Supporters of Brexit had hoped that leaving the EU would allow them to dispense with EU rules on financial services such as caps on bankers' bonuses to turbo-charge London as a financial hub.

Britain's Financial Conduct Authority said on Wednesday that UK financial rules should stay aligned with those in the EU after Brexit, a basic condition for Brussels to grant equivalence.

Faced with having Europe's biggest financial centre on its doorstep, the EU has begun tightening conditions for equivalence in areas such as clearing derivatives and investment banking.

Under the current system, Brussels can scrap an equivalence designation within 30 days in some cases — a step it has never taken — and Britain has called for a far longer notice period.

The Times reported that neither side would unilaterally deny market access without first going through independent arbitration and providing a notice period significantly longer than 30 days.

Britain on Wednesday said there was no set date for Brexit talks to finish, backtracking from a letter by Brexit Minister Dominic Raab that suggested a deal on the terms of its departure could be finalised by November 21.

SEOUL — Samsung Electronics on Wednesday posted record quarterly operating and net profits as solid demand for its memory chips cushioned the fallout from slowing smartphone sales — but warned of tougher times ahead.

The South Korean tech giant — the world's top maker of smartphones and memory chips — has recovered from a series of setbacks, including a humiliating recall and the jailing of its de facto chief, to post a series of record-breaking numbers.

The profits have been driven by its mighty semiconductor unit, which provides chips for its own devices as well as competitors including Apple.

But that run was coming to an end, Samsung signalled in a statement, saying it expected "overall earnings across the company to decline" in the fourth quarter because of seasonal factors in the semiconductor market.

Going into 2019, "earnings are forecast to be weak for the first quarter" for the same reason, it added, before business conditions improved.

For July-September, Samsung reported an operating profit of 17.6 trillion won ($15.4 billion), up 21 per cent from a year ago and an all-time higher for any quarter.

Net profit also jumped 17.5 per cent to 13.1 trillion won, also a record, while sales rose 5.5 per cent to 65.4 trillion won.

"It was in line with expectation but this will be the peak," Greg Roh of HMC Securities & Investment told AFP.

"I'm expecting a decrease in the fourth quarter across the company including semiconductors and smartphones to around 16.6 trillion won," he said.

The figures — in line with estimates announced earlier this month — were "driven mainly by the continued strength of the memory [chip] business", Samsung said.

The unit dominates the global market and the firm has invested tens of billions of dollars each year to build and expand its factories.

 Handset competition 

The division reported an operating profit of 13.6 trillion won, the second consecutive quarterly record, offsetting sagging profits at the mobile phone division.

Mobile handsets once contributed the lion's share of Samsung Electronics' overall sales and profit, but the unit reported a third-quarter operating profit of only 2.22 trillion won, down 33 per cent year-on-year.

Margins were squeezed in the face of growing competition with archrival Apple for high-end devices, and Chinese firms churning out cheaper devices in the mid- and low-end segments, where Samsung said sales fell.

Shares in the firm ended up 0.12 per cent in Seoul trading.

Samsung Electronics is the flagship unit of the Samsung Group, by far the South's largest conglomerate and controlled by the founding Lee family.

It plans to invest a whopping 31.8 trillion won in production facilities this year, it said, mostly to build and expand chip production plants.

It also vowed to expand mobile sales in the long term by rolling out new technologies, including much-anticipated foldable phones and artificial intelligence installed in its devices.

Samsung's reputation suffered a major blow from a damaging worldwide recall of its flagship Galaxy Note 7 smartphone over exploding batteries two years ago, which cost the firm billions of dollars.