Business

MUMBAI — Indian ride-hailing company Ola announced on Tuesday that it is to launch services in Britain, expanding its foray abroad and intensifying its battle with US rival Uber.

Britain will be Ola's second venture into a foreign market after it started operations in Australia in February.

Ola said in a statement that it had obtained licences to operate in South Wales and Greater Manchester. 

It said it would start the South Wales operations within the next month and was inviting private vehicle owners and taxi drivers to partner with it.

"Ola is excited to announce its plans for the UK, one of the world's most evolved transportation markets," co-founder Bhavish Aggarwal said in the press release.

Ola plans to expand its services across Britain, where Uber already has a presence, by the end of the year, the company added.

Ola was launched in 2011 and claims to handle around a billion rides a year across India's major centres and seven cities in Australia. 

Ride-hailing apps are booming in India despite stiff opposition from traditional taxi firms and some initial concerns about passenger safety.

Ola and Uber are locked in an aggressive fight for a greater share of India's taxi-app market, which is estimated to be worth around $10 billion.

Both companies are backed by Japan's SoftBank Group and recently ventured into the food delivery business, further intensifying their rivalry.

HONG KONG — Banking giant HSBC said on Monday that pre-tax profit rose 4.58 per cent to $10.7 billion in the first six months of the year and voiced "cautious optimism" despite the China-US trade row. 

After wide-ranging cutbacks that saw 50,000 jobs axed in an overhaul announced in 2015, the bank said it was now hiring again as it seeks new growth areas.

"We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns," said CEO John Flint. 

He added that investments in the first half of the year included "hiring more frontline staff in our strongest businesses and expanding our digital capabilities in core markets", saying that the aim was to improve customer service.

The pre-tax profit figures met analysts' expectations as they predicted the bank would boost its bottom line.

Revenues were also up four per cent at $27.3 billion in the six months to June. 

However, adjusted profit before tax of $12.1b was down two per cent and revenues were tempered by a rise of seven per cent in operating expenses to $17.5 billion, which the bank said reflected investments in digital capabilities. 

There have been concerns over how long costs will outstrip revenue for the bank.

Shares in HSBC dipped slightly after lunch, trading at HK$72.65 from HK$73.40 before the figures were released, though they were still up 0.5 per cent from Friday's close. 

But Dickie Wong of Kingston Securities said a better cost-efficiency ratio and improved interest margins had helped the bank's turnaround, while its investments had put it "in good shape".

Seeking more frontline staff would help bring in customers, he added. 

Wong added the escalating US-China trade row would have "minimal" negative impact on HSBC with its businesses in the Greater China region doing well.

Strong Asia performance 

The London-based firm is enjoying a change in fortunes after a tough few years.

In January, it agreed to pay more than $100 million to US authorities after admitting to defrauding clients during multi-billion-dollar foreign exchange transactions.

In December, US authorities lifted the threat of prosecution against HSBC, five years after it admitted to widespread money laundering and sanctions violations.

In a landmark case, the bank agreed to pay $1.9 billion in fines in 2012 after admitting it knowingly moved hundreds of millions of dollars for Mexican drug cartels and illegally served clients in Iran, Myanmar, Libya, Sudan and Cuba in violation of a US prohibition.

Under the terms of the settlement, federal prosecutors agreed to drop all charges after five years if the bank paid the fine, took remedial action and avoided committing new violations.

Flint said in June that he plans to invest $15-17 billion primarily in growth and technology projects, with a particular focus on accelerating growth in Asia.

He was promoted to the top job after serving as HSBC's head of retail banking and wealth management.

After some strong profitable years under Stuart Gulliver before his retirement, HSBC earnings plunged in 2016 on huge writedowns and restructuring charges.

However, they rebounded last year, in part thanks to a strong Asian performance.

Prior to his departure, Gulliver said the bank would likely switch 1,000 jobs to Paris from London owing to Britain's departure from the European Union due next year. 

HSBC, founded in Hong Kong and Shanghai in 1865, sees its focus firmly in Asia, although it has been based in Britain since 1992.

OSLO — "I've had the car for eight months and it ran fine for four days," says Yngve Solberg, who like many Norwegians is fed up with the slew of problems his Tesla X has given him.

Tesla has sold more cars per capita in Norway than any other country in the world, thanks to the government's generous measures in favour of electric cars, including tax exemptions, free city tolls and public parking.

More than 26,000 Tesla S and X models are registered in Norway, according to the website www.teslastats.no.

But Tesla has struggled to provide after-sales support that matches the soaring demand for its high-end electric cars.

As a result, Tesla owners in Norway face long waits for repairs, a shortage of spare parts, difficulty reaching customer services, leading — unsurprisingly — to oodles of complaints.

In the first half of the year, Tesla became the company with the fourth-highest number of complaints registered with the Norwegian Consumer Council. In 2017, it held the 24th spot.

A car enthusiast, Solberg has had a long series of woes with his new Tesla X.

Among the problems he has faced were malfunctioning rear doors and a faulty suspension system. And each time he has faced trouble, it has taken him several months to get an appointment for repairs.

"Because of the doors, I couldn't park next to other cars for three months, neither at my work garage nor in my parking spot outside my home. All this with a car that costs 1.1 million kroner [115,000 euros, $133,000]," he bristled.

On an online forum for the Norwegian Association of Electric Cars, another Tesla owner said he was so frustrated he ended up taking his car to Danish capital Copenhagen to replace a faulty suspension arm. He has also been waiting for new seats for 13 months.

Musk says 

Norwegians are right 

These are not isolated cases. A survey conducted by the Tesla Owners Club Norway indicates that 38 per cent are dissatisfied with the company's after-sales support, compared with 57 per cent who are satisfied.

"Norwegians are right to be upset with Tesla," admitted Tesla Chief Executive Elon Musk.

"We are having trouble expanding our service facilities in Oslo especially," he Tweeted on July 5.

He said the problems could be resolved "quickly" if Norway would give the green light for mobile service vans able to provide repairs at clients' homes. 

Tesla is in talks with authorities with a view to adapting this service to national regulations, which strictly define car repair shops.

The problems are particularly troublesome for Tesla, as Norway is a seen as a global testing ground for electric cars. 

The Scandinavian country, whose electricity is almost exclusively from hydro, aims to stop selling cars running on fossil fuels in seven years — by 2025.

Tesla is therefore doubling its efforts to meet Norway's needs. 

The company's spokesman in the Nordic region, Even Sandvold Roland, said after-sales support staff has already been augmented by 30 per cent this year, additional shifts have been set up in some places, and a new repair centre is due to open shortly in Oslo.

 'Growing pains' 

"Things are improving," said Satheesh Varadharajan, the head of the Association of Tesla Owners. "It's positive, though we're still a little concerned about whether it's going quickly enough."

Recruiting and training new employees is time-consuming.

Keen to participate in the technological breakthrough the Californian company is offering, many motor enthusiasts are affording Tesla a patience they would not normally grant a conventional carmaker.

"Early adopters show a lot of understanding and accept that things take a little time, that there are growing pains. No other group has grown as much as quickly," stressed Varadharajan. 

Despite the many frustrations, Yngve Solberg still has faith in Tesla and has reserved a Model 3, the company's first car targeting the mass market.

But Solberg said his faith had limits.

Tesla has had trouble ramping up production of the Model 3, and "if it's the same chaos that I've experienced these past eight months, then, no".

TOKYO — Japanese car giant Toyota on Friday posted a record first-quarter net profit, but warned that threatened US sanctions on the auto sector could have a "very big" impact on earnings.

The firm added that ongoing trade frictions between the US and China, as well as Washington's tariffs on metal imports, would eat into its bottom line.

US President Donald Trump has unsettled rivals and allies alike with harsh trade rhetoric and a raft of tariffs that have affected sectors ranging from agriculture to auto.

Toyota said strong sales in the US and Asia, helped boost profits 7.2 per cent to 657.3 billion yen ($5.9 billion) in April-June, its highest-ever first-quarter result.

Operating profit jumped 18.9 per cent to 682.7 billion yen, with sales up 4.5 per cent at 7.4 trillion yen.

But it maintained a forecast for net profit to fall 15 per cent for the fiscal year to March 2019, with lingering concerns about threatened auto tariffs and raw material costs rising amid trade tensions.

"On trade issues, we are expecting profits will decline by 10 billion yen because of [higher costs of] steel and aluminium in North America," Toyota senior managing director Masayoshi Shirayanagi, told reporters.

"We have not yet factored in the impact of auto tariffs. If they are imposed, we think the impact will be very big," he added.

Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm, told AFP: "Compared to its domestic rivals, Toyota has been relatively competitive.

"The firm performed strongly in North America and its sales in China are steady."

But Trump's threat to impose stiff tariffs on vehicles imported into the world's number two car market remains a concern for Japanese automakers.

"US tariffs will be a major risk for the Japanese auto industry. If tariffs are imposed, it will deal a big blow to Japanese carmakers," said Takada.

Kentaro Arita, senior economist at Mizuho Research Institute, estimated the US tariffs could cost Japan's auto industry as much as $10 billion. 

"In particular, auto parts makers will suffer the impact drastically," Arita told AFP.

Toyota's global sales grew as the auto giant scored growth in the key North American, European and Asian markets.

Increased sales volume and marketing efforts helped boost the bottom line by 45 billion yen while cost cutting contributed 15 billion yen, the company said.

Foreign exchange rates — a major factor for the industry — had little effect on its earnings for the quarter, it added.

Last week, rival Nissan said its net profit for the three months to June plunged more than 14 per cent, under pressure from rising material costs and a higher yen.

It said sales were up in China in the three months prior to to June, but fell in North America and Europe.

For the year to March 2018, Toyota reported a record net profit thanks to a weaker yen and US tax cuts.

"The business environment for the industry remains severe," Takada said.

"Japanese carmakers need to step up their investment in new technologies, such as self-driving systems, in order to compete with their global rivals, while growing costs of raw materials are pressuring their earnings," he added.

Shares in Toyota fell 0.85 per cent to close at 7,220 yen after its earnings announcement.

"Earnings figures are not bad at all but uncertainty over its future lingers due to the trade frictions," Makoto Sengoku, market analyst at Tokai Tokyo Research Institute, said.

SAN FRANCISCO — Tesla shares revved on Wednesday on news the electric car maker is on the road to being profitable this year despite losing more money than analysts expected in the recently ended quarter.

Tesla shares raced up more than 9 per cent to $328.99 in after-market trades that followed release of earnings figures and a call in which Chief Executive Elon Musk patiently fielded questions and expressed regret for rudely brushing off inquiries from some analysts a quarter earlier.

"I'd like to apologise for being impolite on the last call," Musk said to an analyst whose query he had dismissed.

"There really is no excuse for bad manners."

Musk said a lack of sleep and long work days had darkened his mood that day.

The Tesla chief had reacted defensively to questions from the news media and from the financial community, abruptly shutting down questions from analysts during the company's May conference call on earnings.

Tesla has faced multiple controversies in recent months, many of them stemming from comments made by the mercurial Musk.

 Improving production 

The Silicon Valley-based company reported a $717.5 million loss that was more than twice the $336.4 million it lost in the same quarter a year ago. Revenues, meanwhile, jumped 43.5 per cent to $4.0 billion.

The company also burned through less cash than many analysts expected.

Tesla said its closely-watched ramp-up of production of the Model 3 has hit its stride after earlier missing a series of targets.

Output of the Model 3, the company's first targeting the middle market and a major gamble for Musk, met a 5,000 per week benchmark in June and repeated that pace "multiple times" in July.

Tesla said it is on track to hit 6,000 vehicles per week by late August and expects to reach 10,000 per week "some time next year”.

Tesla executives said they have started to make a profit on cars, and predicted the "margin" will grow as the company benefits from hard-won production-line efficiencies.

The electric car maker announced in June that it would cut 9 per cent of its staff in a bid to achieve profitability.

In its earnings statement, Tesla projected that it would reach profitability in the third quarter and stay profitable in the fourth quarter.

"Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace," the company said.

"Our first impression is positive," said CFRA Research analyst Efraim Levy.

"We like the more muted tone of the company's outlook, with the absence of unnecessary new stretch goals," Levy said. "Perhaps it reflects a more cautious Elon Musk."

Shanghai bound 

Musk said that Tesla is doing fine on cash and has no plan to raise more funding. The company did plan to take on local debt in China to pay for a new gigafactory in Shanghai to produce vehicles and batteries.

"Other than that, I don't think we need to raise money," Musk said.

"We are not in any kind of cash shortage at all."

He hoped to have the location for a gigafactory in Europe determined by the end of this year.

Musk also said Tesla was working relentlessly to improve self-driving hardware and software, with a focus on safety and security. He promised new capabilities in an upgraded version of the car's software due out later this year.

Tesla engineers have been working in "semi-stealth mode" for several years making a chip optimised for the intense computing requirements of self-driving technology, according to Musk.

He credited his team with creating one of the world's most advanced computers designed specifically for autonomous operation, saying it was "super kick-ass".

Visions for the future at Tesla included a pickup truck, a compact SUV, and a big rig, with the biggest constraint on growth being how fast they can ramp up production of batteries for vehicles, according to the chief executive.

"We have some super stuff coming up," Musk said.

Musk has been at the centre of numerous controversies in recent months as the company has sprinted in an effort to reach ambitious goals. 

Earlier this month, Musk apologised for calling British caver Vernon Unsworth, who helped rescue 12 Thai boys from a cave a "pedo", short for pedophile, after Unsworth spoke dismissively of the Tesla chief's idea for bringing the boys to safety.

Musk is also embroiled in a legal fight with a former employee whom he accused of sabotage. The ex-employee, Martin Tripp, has countersued for defamatory statements.

LONDON — The Bank of England (BoE) appears set on Thursday to hike interest rates to combat high inflation, as it eyes fallout from both Brexit and the global trade war, economists say.

Policymakers are widely expected to ramp up the British central bank's main interest rate by a quarter-point to 0.75 per cent — which would be the highest level in more than nine years.

The BoE's nine-strong monetary policy committee (MPC) will reveal the outcome of its August gathering at 11:00 GMT.

No change is anticipated in quantitative easing stimulus policy, which has been in place alongside ultra-low rates since the aftermath of the global financial crisis.

"The market is confident we are in for an August rate rise," said Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown.

Brexit-facing Britain was the only G-7 economy to experience a slowdown in 2017, the office for national statistics highlighted this week.

However, it also noted that growth has been more resilient than was initially expected after the Brexit referendum in 2016.

Ammunition against downturn? 

"The bank would dearly love to normalise monetary policy, if only to give itself a bit of ammunition to ward off an economic slowdown," Khalaf added.

"Moreover, last time the MPC met, three members voted for a rate rise, which now means only two doves need to become hawks for policy to tighten."

Rising interest rates are a boon for savers but ramp up the cost of credit for consumers and companies.

In June, the MPC panel had voted 6-3 to keep the rate on hold at 0.50 per cent, as chief economist Andy Haldane joined those calling for a rise. The previous decision in May had been 7-2 in favour of no change.

Meanwhile, BoE Governor Mark Carney has warned that the global trade war, spearheaded by US President Donald Trump, is damaging the outlook.

Despite the gloom, most economists believe above-target inflation will persuade policymakers to hike, although weak manufacturing survey data has injected some caution.

The central bank will also unveil its latest quarterly economic forecasts on Thursday.

Britain's 12-month inflation rate has now held above the BoE's official 2 per cent target range since February 2017 — or for the last 17 months in a row.

"The new inflation forecast should reflect a high risk of a target-overshoot by 2020," said analyst Danielle Haralambous at the Economist Intelligence Unit.

"This, combined with a broader desire to normalise the policy stance to give some room for manoeuvre ahead of the next cyclical downturn, should convince a majority of MPC members to vote for a hike."

The BoE had implemented an emergency quarter-point rate cut to a record low 0.25 per cent in August 2016 on fears over the economic impact of the Brexit vote.

However, it then lifted borrowing costs back up to 0.50 per cent last November to help bring down inflation.

That was the first UK interest rate hike in more than a decade, since 2007.

'Symbolic moment' 

"If the bank does increase rates, it will be a pretty symbolic moment — the first time since the financial crisis that rates have moved above 0.50 per cent," said Khalaf.

"It does not fundamentally alter the bigger picture though, which is that rates are set to remain low for some time, and if they rise will only do so slowly, such is the fragility of the UK economy."

The UK economy grew by 1.7 per cent in 2017, slowing somewhat after expansion of 1.8 per cent in 2016, official figures showed.

Separate survey data, meanwhile, showed that output from Britain's manufacturing sector grew at its weakest rate in nearly a year and a half in July.

Britain is due to withdraw from the European Union next March, but the process has been plagued by stalled trade talks with Brussels.

NEW YORK — The dollar jumped against the yen on Tuesday, after the Bank of Japan (BOJ) said it intends to keep rates low for an “extended period of time”, and the greenback was firm against a basket of peers ahead of the US Federal Reserve's (Fed) two-day monetary policy meeting ending on Wednesday.

The dollar was 0.72 per cent higher against the yen, on pace for its best day in nearly three weeks.

"Clearly the yen is struggling as a result of the Bank of Japan announcement overnight," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

At a two-day rate review that ended on Tuesday, the BOJ kept its interest rate targets steady but for the first time adopted a forward guidance on future policy.

"I think there was some expectation leading up to this meeting that we could see a more meaningful shift in BOJ policy, particularly with respect to their huge asset purchase," said Esiner.

"The BOJ has now effectively been taken off the table as a potential driver of the yen. The market can go back to focusing on more US-centric developments," he said.

The US dollar index, which measures the greenback against a basket of six currencies, was up 0.16 per cent at 94.474, as investors await the conclusion of the Fed two-day Federal Open Market Committee meeting on Wednesday.

"Although US interest rates are widely expected to be left unchanged in July, investors are more likely to be concerned with any potential tweaks in the language of the policy statement," Lukman Otunuga, research analyst at futures brokerage FXTM in London, said in a note.

The dollar index, which has risen 2.6 per cent for the year, was on pace to finish July down 0.2 per cent, its first monthly decline since March.

"Buying sentiment towards the dollar could receive a boost if the central bank strikes a hawkish tone," Otunuga said.

On Tuesday, data showed US consumer spending increased solidly in June, while inflation rose moderately. Other data showed employers boosting benefits for workers in the second quarter, but wage growth slowed. 

With savings at lofty levels and lower taxes increasing take-home pay for some workers, consumer spending is likely to remain strong this year and allow the Fed to continue gradually raising interest rates.

The British pound was little changed against the dollar as investors prepared for the Bank of England's monetary policy meeting later this week, for which markets are now pricing in a near-90 per cent chance of a 25-basis-point rate rise.

The Chinese yuan rose against the dollar on Tuesday in offshore trading after Bloomberg reported the United States and China aim to resume talks in a bid to avert a trade war between the world's two biggest economies. 

TUNIS — Tunisian airport employees plan to strike on Wednesday and Thursday, disrupting the reviving tourist trade, unless the government meets demands for improved working conditions, a labour union official said on Monday.

Tunisia is in the midst of an austerity programme agreed with foreign donors, such as the International Monetary Funds. Government officials have rejected union demands for pay rises in a bloated public service which the IMF wants to trim.

"We decided to go on strike on August 1 and 2 to protest at the government's non-compliance with previous agreements," said Mansif Bin Ramadan, head of the airport workers union.

He said the union wants the government to upgrade working conditions and clear a debt of unpaid fees by state-run Tunisair and other airlines owed to the civil aviation body.

Ramadan did not elaborate on the demands but said talks were going on with the government, which had no immediate comment.

Tunisia has been praised as the only democratic success among the nations where "Arab Spring" revolts erupted in 2011. But successive governments have failed to trim its fiscal deficit and create economic growth.

The IMF programme agreed in 2016 is worth about $2.8 billion.

Airport strikes would hit the tourism sector, which has recovered since two militant attacks in 2015 killed dozens of foreigners.

Some 3.229 million tourists visited Tunisia from January 1 through June 30, up 26 per cent from the same period last year, according to official figures seen by Reuters this month. Tourist revenues climbed 40 per cent to reach $522 million. 

DUBAI — Iran's currency plunged to another record low on Sunday, dropping past 100,000 rials to the US dollar as Iranians brace for August 7 when the United States is due to reimpose a first lot of sanctions on their economy.

In May the United States pulled out of a 2015 deal between world powers and Tehran under which international sanctions on Iran were lifted in return for curbs on its nuclear programme.

Washington decided to reimpose sanctions on Iran upon its withdrawal, accusing it of posing a security threat, and has told countries they must halt all imports of Iranian oil from November 4 or face US financial measures.

On Sunday, the Iranian rial plunged to 111,500 against one US dollar on the unofficial market, down from about 97,500 rials on Saturday, according to foreign exchange website Bonbast.com. Other websites said the dollar was exchanged between 108,500 and 116,000 rials. 

The rial has lost about half of its value since April because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians who fear the effects of sanctions.

US President Donald Trump has called the agreement one of the worst deals ever negotiated, but in a bid to salvage the accord, Iran's European partners in the nuclear deal are preparing a package of economic measures to offset the US pullout. 

However, France said earlier this month that it was unlikely that European powers would be able to put together an economic package for Iran that would salvage its nuclear deal before November.

On August 7, the United States will reimpose sanctions on the purchase or acquisition of US dollars by the Iranian government, Iran's trade in gold and precious metals, and on the direct and indirect sale, supply and transfer to or from Iran of graphite, raw or semi-finished metals, coal and industrial-related software.

Sanctions also will be reapplied to the importation into the United States of carpets and foodstuffs made in Iran, and on certain related financial transactions.

Iran's oil exports could fall by as much as two-thirds by the end of the year because of the new US sanctions, putting oil markets under huge strain amid supply outages elsewhere in the world.

NEW YORK — Wall Street stocks on Friday finished the week on a downbeat note, with the tech-rich Nasdaq sinking 1.5 per cent on worries that US economic growth has peaked.

The American economy expanded at an annual rate of 4.1 per cent in the second quarter, matching analyst expectations, due in part to strong consumer spending and a trade-war driven bump in exports, according to Commerce Department data. That is the fastest growth in almost four years.

President Donald Trump hailed the figure as an "American economic miracle", promising more impressive growth ahead.

But US investors seemed to be betting on the opposite, sending stocks lower and punishing technology companies especially hard.

"There's a general sense that maybe we're hitting peak growth," said Jack Ablin of Cresset Wealth Advisors.

Ablin said the tech sector was vulnerable because it is tied more closely to growth than some sectors and because of worries that rising political and social scrutiny of Facebook and others that could crimp growth.

The declines in the United States also followed a largely disappointing round of earnings, with Exxon Mobil, Intel and Twitter all falling significantly.

European shares closed with higher gains. London finished 0.5 per cent higher, with shares in telecoms group BT rising more than 5 per cent after posting better-than-expected first-quarter earnings.

Paris climbed 0.6 per cent while Frankfurt added 0.4 per cent in value, aided partly by this week's easing in EU-US trade tensions.

Asian stocks mostly edged higher Friday with Tokyo buoyed once more by a weaker yen, which helps exporters.

 'Come off the boil' 

While the strong US growth rate was welcome, analysts said investors had plenty to worry about from here on.

"The US economy is likely to come off the boil in the coming quarters as the boost to growth delivered by the tax cuts begins to wear off, trade restrictions and an overall slowing of the global economy start to weigh on exports, and further interest rate hikes tighten financial conditions," said economist Pablo Shah at the Centre for Economics and Business Research.

He said the growth rate was nonetheless impressive, and that the strong labour market together with still-accommodative fiscal and monetary policies meant the United States was likely to remain at the top of the growth pack among advanced nations.