Business

SHANGHAI — Chinese shoppers set new records for spending during the annual "Singles' Day" buying spree despite an economic slowdown and worries over the US trade war, with state media calling it a sign of China's rising economic strength.

E-commerce giant Alibaba said consumers spent $38.3 billion on its platforms on Monday during the world's biggest 24-hour shopping event, up 26 per cent from the previous all-time high mark set last year.

The growth rate slowed slightly, however, from the 27 per cent increase last year and 39 per cent in 2017.

Alibaba's main domestic competitor JD.com, which holds an 11-day promotion ending at midnight on November 11, said on Tuesday it had handled sales over that stretch totalling $29.2 billion, which was up 30 per cent.

US President Donald Trump has repeatedly said his tariffs on Chinese goods have put the country's economy on the ropes.

But state-run Xinhua news agency said the "Singles' Day" performance proved China, once known as the "world's factory" for its reliance on manufacturing for export, had evolved into a globally powerful consumer market of its own.

"Where there is a market, that is where the future lies," it said in a report.

"From the 'world's factory' to the 'world's market', a China that is continually moving towards high-quality development will unleash greater consumption potential in the future, allowing China's dividends to benefit the whole world."

Singles' Day, also called "11.11" for the November 11 date, was originally set as an unofficial day for unmarried Chinese.

But Alibaba — which accounts for more than half of China's e-commerce — commandeered it as a discount sales event akin to the late-November US "Black Friday", which "Singles' Day" now handily surpasses.

A range of other e-tailers and retailers also have jumped in.

Alibaba's one-day promotion on its Taobao and Tmall platforms began at midnight Sunday following a flashy stage show in Shanghai headlined by Grammy-winning US pop star Taylor Swift.

China's economy is in an extended slowdown exacerbated by the US trade war, and the Singles' Day fire sale is viewed as a snapshot of consumer sentiment in the world's second-biggest economy.

Consumers gave little indication of worry, charging out of the gate with $1 billion spent via Alibaba platforms in the first 68 seconds.

US-listed Alibaba earlier this month said revenue growth in its most recent financial quarter slowed to 40 per cent, from 54 per cent in the same quarter last year.

Analysts, however, note that it would be difficult for Alibaba to maintain past growth rates forever, and that consumption should remain solid in the future, facilitated by factors including technology and the government's push to encourage domestic consumption as an economic driver.

LONDON — British Steel was on Monday set to announce a rescue deal by Chinese industrial giant Jingye Group, a source close to the matter told AFP.

Jingye's spokeswoman earlier confirmed that the Chinese group's chairman was in Britain for talks.

Reports said Jingye would pay £70 million ($90 million, 81 million euros) for British Steel which collapsed into liquidation in May.

"An announcement is expected today," the source told AFP.

Turkish military fund OYAK last month pulled out of a deal to rescue British Steel, whose owners Greybull Capital had blamed Brexit for its financial collapse.

The European Steel Association has meanwhile urged the EU to help the bloc's struggling sector, which it said has been swamped by cheap steel from Asia since the US imposed import tariffs in 2018.

Although it did not take the steel producer into state ownership, the UK government said in May that it would keep paying staff wages in the hope that a buyer could be found.

Some 5,000 people are employed by British Steel and an estimated 20,000 more have links to the firm's supply chain.

A total 4,000 British Steel staff work in the UK, with an additional 1,000 based in France and The Netherlands.

"If this [rescue[ is confirmed, then we welcome this positive step towards securing British Steel under new ownership," said a spokesman for the UK-based Community trade union.

Greybull Capital created British Steel, a maker of long steel products, in 2016 after snapping up assets from Tata Steel.

Long steel products include plates, rails for railways, sections used in construction, and wire rod. The latter can be used as steel rope for infrastructure like suspension bridges or filaments for car tyres to give rigidity.

China's Hebei-based Jingye Group specialises in iron and steel, but has investments in tourism, hotels and real estate. 

According to its website, it has total assets of 39 billion yuan ($5.5 billion) and 23,500 employees.

"A purchase by Jingye of British Steel would certainly complement what they do there in China," Gareth Stace, director general of industry lobby group UK Steel, told BBC radio on Monday.

"But actually British Steel makes rail, high-quality rail and heavy sections... which Jingye doesn't make."

FRANKFURT AM MAIN — Sportswear maker Adidas said on Monday it was closing two niche but flagship factories in Germany and the United States that use robots and 4D printing to make sneakers, shifting the manufacturing to cheaper Asian factories instead.

The production of high-tech running shoes at its so-called speedfactories in Germany’s Ansbach and in the US city of Atlanta “will be discontinued by April 2020 at the latest”, Adidas said in a statement.

Just three years ago, the Bavaria-based group had hailed its speedfactory concept — which uses highly automated processes to make shoes more quickly, more customised and closer to sales outlets — as proof that manufacturing jobs could return to high-wage countries.

But from the end of this year, the speedfactory shoes will join Adidas’ other models and be produced by existing suppliers in Asia, the group said.

Citing “advancements” made at the suppliers, the move would make production of the shoes “more flexible and economic while simultaneously expanding the range of products available”, Adidas Executive Board Member Martin Shankland said.

The two speedfactories churn out just a million of the roughly 400 million athletic shoes made by the group each year.

The future of the Ansbach plant’s 160 workers is unclear at the moment. 

The factory is operated by the German technology firm Oechsler, which has collaborated with Adidas on the project.

Oechsler CEO Claudius Kozlik said in the same statement that he regretted Adidas’ pullout.

But he stressed that the two companies would continue to work together on soles for football shoes and 4D-printed soles.

Like 3D printing, 4D printing produces three-dimensional objects at the touch of a button but then goes further by creating materials that change properties when they come into contact with triggers such as water or heat. 

RIYADH — Saudi Aramco said it would start taking bids from investors on November 17 in a highly anticipated stock offering, as it released a prospectus that did not disclose the size of the sale or the pricing range.

The 658-page document said the final share price would be determined on December 5, a day after subscriptions close, in what is expected to be the world's biggest initial public offering.

After years of delays and false starts, Aramco officials last week announced a share sale on the Riyadh stock market for the world's most profitable company, which pumps 10 per cent of global oil supply.

The prospectus, released just before midnight on Saturday, said the state giant would sell up to 0.5 per cent of its shares to individual retail investors but that it had still not decided on the percentage for larger institutional buyers.

Saudi investors appear keen on the prospect of owning a piece of the company, seen as the kingdom's economic crown jewel, despite concerns over the future of oil and the firm's valuation and governance.

The company said it had hired a host of international banking giants including Citibank, Credit Suisse and HSBC as financial advisers and book-runners.

In its push for transparency, the secretive company's prospectus also highlighted risks including the potential for "terrorist" attacks and the possibility of antitrust legislation.

It also acknowledged that climate change concerns could reduce demand for hydrocarbons.

"Disclosure [and] transparency combined with the global research and analysis that it will provoke is in itself of major value to the kingdom and the company," said Ali Shihabi, a Saudi analyst. 

However, key details were missing from the prospectus, including the company's valuation and how much Aramco expects to raise from the IPO.

"This lack of clarity in the prospectus shouldn't alarm us as it's a book building exercise," said Nasser Saidi, another analyst.

"And let's be clear Saudi will do whatever it takes to make this IPO successful because so much hinges on it," Saidi told Bloomberg TV.

The share sale appears unlikely to see Aramco hit a $2 trillion valuation for the company that de facto ruler Crown Prince Mohammed Bin Salman had initially hoped for. 

Investment research firm Bernstein estimates the valuation could fall within a range of $1.2 and $1.5 trillion.

Based on a $1.5 trillion valuation, a 2 per cent stake sale would raise Aramco $30 billion. That would still make it the world's biggest IPO, eclipsing Chinese retail giant Alibaba's $25 billion listing in 2014.

Saudi Arabia is pulling out all the stops to ensure the success of the IPO, a cornerstone of Prince Mohammed's ambitious plan to steer the economy away from oil by pumping tens of billions of dollars into a host of megaprojects and non-energy industries.

The government has reportedly pressed wealthy Saudi business families and institutions to invest, and many nationalists have labelled it a patriotic duty.

Aramco had initially been expected to sell a total of 5 per cent on two exchanges, with a first listing of 2 per cent on the kingdom's Tadawul bourse, followed by a 3 per cent listing on an overseas exchange.

But the firm has said there are no current plans for an international stock sale, indicating that the long-discussed goal of a second offering on a foreign bourse had been shelved for the time being.

Even for the domestic listing, there are reports the firm is struggling to attract foreign institutional investors, amid an uncertain outlook for the energy sector and questions over company disclosures and governance.

Norway's sovereign wealth fund, the world's largest, does not plan to invest in Aramco, a Norwegian official told AFP.

Investors are also concerned about geopolitical risks. The news of the listing comes just weeks after crippling attacks on the heart of Aramco's facilities briefly halved its output as tensions spiked with Iran.

But China, the world's top oil importer, may commit as much as $10 billion through sovereign wealth funds and other state-owned enterprises, Bloomberg News reported.

Aramco, a cash cow that catapulted the kingdom to become the Arab world's biggest economy, does appear to hold enormous appeal for local retail investors.

Many Saudis appear to be tapping lenders and selling personal assets to raise money to invest in the share sale.

Aramco last year posted $111.1 billion in net profit. In the first nine months of this year, its net profit dropped 18 per cent compared to the corresponding period of 2018 to $68.2 billion.

NEW YORK — US stocks forged higher on Friday and closed with new records for the second straight day despite being buffeted by fast-changing news in the US-China trade war.

President Donald Trump said on Friday, contradicting earlier claims by the Chinese government, saying he had not agreed to roll back tariffs as part of a partial trade deal the two sides are negotiating.

After spending much of the day in the red, the benchmark Dow Jones Industrial Average squeaked into positive territory, closing a fraction above Thursday’s record close at 27,681.24.

The broader S&P 500 rose 0.3 per cent to end the week at 3,092.95 while the tech-heavy Nasdaq gained 0.5 per cent, closing at 8,475.31.

All three indices notched gains for the week, with the Nasdaq rising for the sixth week in a row, its longest winning streak since the March-May period.

Global investors have been cheered in recent days by hope of a de-escalation in the US-China trade war.

“They would like to have a rollback. I haven’t agreed to anything,” Trump told reporters at the White House.

“China would like to get somewhat of a rollback, not a complete rollback, because they know I won’t do it.”

China’s commerce ministry said on Thursday that both sides had “agreed to roll back the additional tariffs in stages as progress is made towards a (final) agreement”.

The two sides have imposed tariffs on hundreds of billions of dollars in two-way trade, weighing on economic growth.

“It is clear that there are big reasons for Trump and Xi to want some form of deal, that they cannot appear to be conceding too much, that China wants as many of the tariffs removed as possible, and that Trump’s trade hawks would prefer to keep as many tariffs as they can,” Karl Haeling of LBBW said in a market commentary.

Disney finished with a gain of 3.8 per cent after better-than-expected quarterly results and strong box office performance, while clothing outlet Gap dove 7.6 per cent after poor sales results. 

BEIRUT — Several petrol stations in protest-hit Lebanon stopped services on Saturday, as reserves ran dry due to a shortage of US dollars to pay suppliers, a syndicate head said.

The shuttering of petrol stations came as demonstrators again took to the street across the country, keeping up their three-week-long movement against a political class regarded as inefficient and corrupt. 

“The petrol stations that opened today are the ones that still have reserves. They will close down as soon as supply runs out,” said Sami Brax, the head of the Syndicate of Gas Station Owners.

He said if officials do not facilitate access to dollars by Tuesday, “we will be forced to stop imports and close down all petrol stations.”

Petrol stations receive payment from customers in Lebanese pounds but have to pay importers and suppliers in dollars. 

For two decades, the Lebanese pound has been pegged to the US dollar, with both currencies used interchangeably in daily life.

But banks have been reducing access to dollars since the end of the summer, following fears of a shortage in central bank dollar reserves.

In recent days, banks halted all ATM withdrawals in dollars and severely restricted conversions from Lebanese pounds.

Many Lebanese have had to instead buy dollars from money changers at a higher exchange rate, in what amounts to a de-facto devaluation of the local currency that has sparked price hikes.

The official exchange rate has remained fixed at 1,507 Lebanese pounds to the dollar, but the rate in the parallel market has surpassed 1,800.

“The banks are under pressure from people, both inside Lebanon and abroad,” said economist Naseeb Ghabreel, after many rushed to withdraw their dollar savings or convert Lebanese pound accounts.

Since September, petrol station owners have accused banks of failing to provide them with the dollars they need and threatened strikes. 

In response, the central bank last month pledged to facilitate access to the greenback for importers of petroleum products, wheat and medicine.

But the measure has not yet gone into effect. 

Lebanon has since October 17 witnessed an unprecedented popular uprising against everything from power cuts and poor social security to alleged state corruption.

The government yielded to popular pressure and stepped down last month, with the World Bank urging for the quick formation of a new Cabinet to prevent the economy from further deteriorating.

BERLIN — German industrial Company Siemens on Thursday reported a drop in annual net profits but said it had met its targets, and warned that geopolitical risks and a cooling economy would weigh on its performance in 2020.

The group — which makes products from wind turbines to trains and medical scanners — booked a net profit of 5.6 billion euros ($6.2 billion) in its 2018/2019 fiscal year, down nearly 8 per cent on the previous year.

The group mainly blamed accounting effects, noting that it had benefited last year from selling its shares in IT services firm Atos and lightbulb maker Osram.

Operating profit climbed slightly to 8.9 billion euros, thanks to a jump in large orders.

Revenues added 5 per cent to hit 86.8 billion euros.

"The weakening of the global economy accelerated clearly during fiscal 2019," CEO Joe Kaeser said in a statement. 

Nevertheless, "we fully achieved our fiscal-year guidance in all aspects", he added.

The company said it had seen an uptick in orders across most of its divisions, including an order for a large gas power plant in France and strong demand for its medical imagery machines.

Siemens' factory automation division, however, suffered a drop in demand in the final months of the year, as it felt the pinch from the global slowdown in the car and machine-building industries.

Looking ahead to its 2019/2020 fiscal year, Siemens said it expected "to again achieve moderate growth" in revenues despite a "subdued" global economic outlook.

Given the "risks particularly related to geopolitical and geoeconomic uncertainties", Siemens added that it was bracing for "a moderate decline" in market volume in the auto and factory equipment industry.