Business

AMMAN — Royal Jordanian (RJ) said its board of directors and the board of directors of Royal Wings agreed to stop the operations of Royal Wings on November 30 this year, according to an RJ statement released on Tuesday. 

Royal Wings is an RJ-owned charter company. 

The statement said the decision was taken because of high operating costs, and subsequent losses incurred by Royal Wings over the past years. 

The task of promoting and selling the charter flights that used to be carried out by Royal Wings will now fall on Royal Jordanian's Commercial Department, the statement added. 

Negotiations are going on at this stage between RJ and two parties interested in buying Royal Wings, said the statement, adding that the process may take some time.

As for the employees working at Royal Wings, 12 of them, who had been seconded from RJ to Royal Wings, will return to work for RJ.

The other 95 Royal Wings employees were offered several flexible options, and after interviews, 18 employees were accepted to work for RJ as they met RJ’s job requirements.

The process of interviewing is still ongoing, according to the statement. 

Those who do not make it are offered voluntary release from service, which is an option that is also available to all Royal Wings employees. 

Under the terms of the release, a staff employee is given a half-month salary for each year of service, based on the employee's most recent gross salary, as per the terms and conditions of the collective contract signed recently by Royal Wings and the General Union of Air Transport and Tourism.

TOKYO — Telecoms giant SoftBank will list shares in its Japanese mobile unit next month in a sale that could raise over $21 billion and be one of the biggest tech initial public offerings (IPOs) in years.

The IPO will help raise funds for the company as it increasingly transforms into an investment firm, ploughing money into a broad range of companies and projects around the world.

The IPO will take place in Tokyo on December 19 and will offer 1.6 billion shares in the SoftBank Corp. mobile unit at 1,500 yen ($13) each.

That values the mobile unit at 7.18 trillion yen and the IPO could be Japan's biggest-ever, local media said.

The company had announced in February that it was going ahead with the IPO after media speculation about the plan.

It said then that the listing would give the mobile unit "greater managerial autonomy".

In its announcement on Monday, SoftBank said the listing would also help clarify the roles of the parent company (SBG) and its Japanese mobile unit.

"SBG is accelerating investments on a global scale, while SB is a core company to the Group's telecommunications business," the statement said.

"It is hoped that each of the two companies will be able to provide information regarding their businesses to the market with greater clarity and thereby better respond to the various needs of investors," it added.

After the listing, SoftBank will hold 63.14 per cent of the mobile unit.

Analysts at S&P Ratings said the IPO "would further underline SoftBank's transition to an investment holding company".

Under its CEO Masayoshi Son, SoftBank has transformed from its beginnings in software and is increasingly seen as an investment firm.

Using the SoftBank Vision Fund, worth an estimated $100 billion, Son has taken stakes in some of the hottest firms in the tech sector, including Uber, Slack, WeWork and Nvidia.

Nearly half the money in the fund comes from Saudi Arabia and SoftBank's close ties with Saudi Arabia have come under scrutiny in recent weeks after the murder of journalist Jamal Khashoggi at the Saudi consulate in Istanbul.

Earlier this month, Son condemned the killing but said he would continue to do business with Saudi Arabia.

"As horrible as this event was, we cannot turn our backs on the Saudi people as we work to help them in their continued efforts to reform and modernise their society," he said.

He made the comments shortly after the company announced its latest earnings, showing an eight-fold jump in net profit in the six months to September — mainly due to strong returns from its investment funds.

ABU DHABI — Saudi Arabia, the world's top crude exporter, said on Sunday it will cut oil output from next month, as major producers held a key meeting to discuss shoring up sliding prices.

Saudi Arabia’s Energy Minister Khalid Al Falih said his country was cutting its supplies by 500,000 barrels per day (bpd) from December. But Falih said ahead of the meeting of the Organisation of the petroleum Exporting Countries (OPEC) and non-OPEC key producers that there was not yet consensus on a broader output cut.

Oil prices have shed a fifth of their value in just one month after surging to a four-year high in early October, driven by a combination of factors centred on higher supply and fears of sluggish demand.

The meeting of the joint ministerial monitoring committee in Abu Dhabi will not take decisions, ministers said, but will propose recommendations for a crucial ministerial meeting in Vienna early in December.

Among those attending were Russian Energy Minister Alexander Novak, Oman's Oil Minister Mohammed Al Rumhi and the Energy Minister of host UAE Suheil Al Mazroue.

Falih told reporters ahead of the meeting that Saudi Arabia's "crude exports for December will be 500,000bpd lower than November".

The world's top oil exporter has been pumping 10.7 million bpd since October, he said.

The Saudi minister acknowledged that so far there was no fresh agreement on reducing production among OPEC and non-OPEC producers, who struck a deal in late 2016 to cut output by 1.8 million bpd to remedy an oversupply crisis.

"There is no consensus yet among oil producers about cutting production," Falih said at the gathering.

He insisted it was "premature to talk about a specific action", when asked about the possibility of an output cut.

"We have to study all the factors," Falih said. 

 'Surprised us' 

Brent crude dropped below $70 a barrel on Friday for the first time since April while the New York's West Texas Intermediate (WTI) sank below $60 a barrel, a nine-month low.

In his speech at the start of the meeting Falih said the recent sharp drop in prices has "surprised us".

He said the market sentiment has shifted from one of fearing shortages to one worried about oversupply.

He also attributed the sharp drop in prices to "microeconomic uncertainties", and signs of a build-up in crude inventories.

Mazrouei said that the goal of the OPEC and non-OPEC cooperation was to strike a balance in the market, adding that recommendations for possible action will be made to next month's ministerial conference.

The latest price slump comes as the United States has upped production of shale oil, while Saudi Arabia, Russia and others have raised supplies of crude amid signs of slowing demand.

There have also been signs of a softer-than-expected impact from US sanctions on Iranian oil exports.

"Prices have been falling amid a continued rise in crude supplies from big producers, such as Saudi Arabia, Russia and the US, more than compensating for lost Iranian barrels," Forex.com analyst Fawad Razaqzada told AFP.

"With the Iranian sanctions not being as severe as initially feared, officials from the OPEC and non-OPEC producers may discuss at the weekend the need to bring compliance back down... or risk another 2014-style slide in prices."

Producers implemented large cuts starting at the beginning of 2017 and managed to push up oil prices from below $30 a barrel to over $85 in October, strongly improving their revenues.

But the producer countries eased the output cuts in June after signs of a tighter market and higher prices, allowing hundreds of thousands of extra barrels to hit the market.

Commerzbank, Germany's second-largest lender, said on Friday oil producers must act to prevent a free fall of prices.

"If they fail to signal any intention to reverse the latest increase in production, oil prices threaten to slide further," the bank said in a note.

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.