Business

CAIRO — Egypt announced on Sunday the names of 23 state companies it will offer stakes at the beginning this year, part of a plan to raise about 80 billion Egyptian pounds ($4.6 billion) through minority share offerings on the Cairo bourse.

They included Banque Du Caire, one of the country's largest banks, major oil companies Middle East Oil Refining and Engineering for Petroleum and Process Industries (ENPPI), as well as Misr Insurance Company.

The government had said that it intended to sell shares in dozens of state companies to boost public finances and draw more investors to the Cairo exchange, but had previously only identified a handful of companies as candidates.

The 23 companies range from banking and petroleum to real estate and will look to sell stakes ranging from 15-30 per cent in the next two to two-and-a-half years, the finance ministry said in a statement announcing the list.

The list includes some companies already traded on the exchange and others that will hold an initial public offering.

Egypt's economy has been struggling to recover since a popular uprising in 2011 drove foreign investors and tourists away, but a $12 billion International Monetary Fund lending programme signed at the end of 2016 has helped to spur growth and lure back foreign investors.

The state owns vast swathes of Egypt's economy, including three of its largest banks — National Bank of Egypt, Banque Du Caire, the United Bank of Egypt — along with much of its oil industry and real estate sector.

ENPPI has been discussed previously as a candidate to be the first state company to offer shares this year, and others such as Banque Du Caire have been mentioned in recent years but their offerings have been delayed.

The last time state-owned companies were listed on the exchange was in 2005 when shares of Telecom Egypt, the state's landline monopoly, and oil companies Sidi Kerir Petrochemicals and AMOC were floated.

Sidi Kerir Petrochemicals will now sell another stake and was included in the list announced on Sunday.

BERLIN — German Chancellor Angela Merkel and Chinese President Xi Jinping discussed overcapacity in world steel markets and agreed on Saturday to work on solutions within the framework of the Group of 20 (G-20) group of industrialised nations, Merkel's spokesman said.

In a telephone discussion, the two newly re-elected leaders emphasised close ties between the two countries, both facing planned US steel and aluminum tariffs, and agreed to deepen their strategic partnership, Steffen Seibert said in a statement.

They also underscored the importance of multilateral cooperation on global trade, a pointed response to an accelerating shift away from multilateral action and institutions by the United States under President Donald Trump.

US officials have said they will seek to work with "like-minded" countries at the G-20 finance leaders meeting early next week in Argentina, to push back against China's state subsidies and investment policies.

The Merkel-Xi call came amid tensions between the United States, Europe and China over US tariffs.

Merkel and Xi "discussed the problem of global overcapacities in the steel market and backed continued efforts to work toward solutions in the framework of the G-20 Global Forum [on Steel Excess Capacity]", Seibert said, referring to a body initiated at the G-20 summit in Hangzhou, China in 2016. 

"In this regard, they emphasised the importance of close multilateral cooperation on trade," he said.

Trump has criticised both Germany and China for their trade surpluses with the United States since taking office in 2017.

Merkel on Saturday said Germany's trade surpluses were narrowing due to rising domestic demand, and the government would continue to try to support that trend.

German Economy Minister Peter Altmaier will visit Washington this week to press for an exemption from US steel and aluminum tariffs as part of a broad push by the European Union to reverse the US steps.

German Finance Minister Olaf Scholz will discuss the issue at a G-20 meeting in Argentina with US Treasury Secretary Steven Mnuchin.

Merkel said on Friday the planned US tariffs violated the principles of the World Trade Organisation and the dispute should be resolved via talks if possible.

Seibert said Merkel invited the Chinese government to visit Berlin for official government consultations, and Xi also extended an invitation for Merkel to visit China.

LONDON — World equities made an attempt at recovery on Thursday, with investors trying to focus on positive economic news rather than the prospect of a debilitating global trade war.

A fall in weekly jobless claims in the US served as a reminder that the world's biggest economy is humming along nicely, while the appointment of a new White House economic adviser brought a modicum of stability, analysts said.

"Global equities are positive into the back end of the week, with some welcome certainty from the Trump administration after the hiring of Larry Kudlow as new top economic strategist," said Michael van Dulken at Accendo, a move that helped the dollar recover and gave a fillip to European markets.

But investors remained on tenterhooks while concerns grew over a possible trade war sparked by Trump's "America first" protectionist policies.

"The global markets remain wobbly as global trade concerns fester," the Charles Schwab brokerage said in a note.

Trump's decision to levy sanctions on Russia for alleged election-meddling also gave investors pause.

"Markets are digesting the implications of a US-led trade war and further sanctions against Russia," said Jasper Lawler, head of research at London Capital Group. 

In London, Unilever shares fell after the company announced it was moving its headquarters to the Netherlands, a move widely seen as a response to Britain's imminent pullout from the European Union.

British finance minister Philip Hammond played down Unilever's decision to pick Rotterdam over London for its main headquarters, saying the conglomerate would still be paying the same amount of tax in Britain.
"It's only the corporate headquarters that is moving, it's a relatively small number of jobs. It won't impact the amount of tax that Unilever pays in the UK," Hammond told BBC News on Thursday.

"And most importantly, the two fastest growing divisions within Unilever — household products and personal care products — will be concentrated in the UK."
Unilever, Britain's third biggest company, said the decision to end 88 years of joint Anglo-Dutch ownership was not linked to Brexit or any form of protectionism but said it would simplify its structure.

Moreover, Bitcoin sank to its lowest level since the start of February — after Google said it will ban adverts for cryptocurrencies and initial coin offerings.

LONDON — One of the biggest bitcoin exchanges has struck a rare deal which will allow it to open a bank account with Britain's Barclays, making it easier for UK customers of the exchange to buy and sell crypto-currencies, the UK boss of the exchange said on Wednesday.

Large global banks have been reluctant to do business with companies that handle bitcoin and other digital coins because of concerns they are used by criminals to launder money and that regulators will soon crack down on them.

San Francisco-based exchange, Coinbase, said its UK subsidiary was the first to be granted an e-money licence by the UK's financial watchdog, a precursor to getting the banking relationship with Barclays.

The Barclays account will make it easier for British customers. Previously, they had to transfer pounds into euros and go through an Estonian bank. 

"Having domestic GBP payments with Barclays reduces the cost, improves the customer experience... and makes the transaction faster," said Zeeshan Feroz, Coinbase's UK CEO.

The UK is the largest market for Coinbase in Europe, and the exchange said its customer base in the region was growing at twice the rate of elsewhere.

Feroz said that it took considerable time to get a UK bank on board, partly because Barclays needed to be sure that Coinbase had the right systems in place to prevent money laundering.

Regulators across the globe have warned that crypto-currencies are used by criminals to launder money, and some exchanges have been shut down. 

"It's a completely brand new industry. There's a lot of understanding and risk management that's needed," Feroz said.

Despite growing interest in both digital currencies and the technology behind them, some big lenders have limited their customers ability to buy crypto-currencies, fearing a plunge in their value will leave customers unable to repay debts. 

In February, British banks Lloyds and Virgin Money said they would ban credit card customers from buying crypto-currencies, following the lead of JP Morgan and Citigroup. Coinbase said it had also become the first crypto exchange to use Britain's Faster Payments Scheme, a network used by the traditional financial industry.

WASHINGTON — Governments and central banks need to collaborate on developing regulations for crypto-assets to prevent them from becoming a new vehicle for money laundering and terrorist financing, International Monetary Fund (IMF) Managing Director Christine Lagarde said.

In a blog posting ahead of a meeting of Group of 20 finance leaders next week, Lagarde said the technology behind crypto-currencies, including blockchain, offer exciting advancements that could power financial inclusion. New, low-cost payment methods could empower millions of people in low-income countries who lack traditional bank accounts.

“Before we get there, however, we should take a step back and understand the peril that comes along with the promise,” Lagarde said, adding that their appeal also makes them dangerous.

“These digital offerings are typically built in a decentralised way and without the need for a central bank. This gives crypto-asset transactions an element of anonymity, much like cash transactions,” she said. “The result is a potentially major new vehicle for money laundering and the financing of terrorism.”

Before the July 2017 shutdown of dark web marketplace AlphaBay, some $1 billion worth of illegal drugs, hacking tools, firearms and toxic chemicals were sold through crypto-assets on the exchange, she said.

Some early efforts are encouraging, including those led by the Financial Stability Board to study fintech advancements and by the Financial Action Task Force to provide guidance on electronic money laundering.

She said the IMF was focused on encouraging countries to develop policies that ensure financial integrity and protect consumers in crypto-assets in much the same manner as it has done for the traditional financial sector.

She also said technology behind crypto assets can be used to “fight fire with fire”, including distributed ledger technology that speed up information sharing between market participants and regulators. This can be used to create registries of standard, verified customer information and help fight cross-border tax evasion, she said.

Regulators can also use biometrics, artificial intelligence and cryptography to enhance digital security and identify suspicious transactions “in close to real time”, Lagarde added.

Applying the same securities rules to crypto assets as standard securities also can help increase transparency and alert buyers to potential risks.

“To be truly effective, all these efforts require close international cooperation. Since crypto-assets know no borders, the framework to regulate them must be global as well,” Lagarde said. 

The G-20 major economies will explore regulation of crypto-assets this year, including at a meeting next week in Buenos Aires for G-20 finance ministers and central bank governors. 

LONDON — Equity markets drifted lower on Monday as profit-taking cut short a rally sparked by solid US jobs data and optimism about the prospect of a US-North Korean summit meeting. Dealers said underlying sentiment remained upbeat but many investors, lacking fresh impetus to keep buying stocks, consolidated their positions.

"US stocks are mixed on the heels of last week's sharp rally that came courtesy of Friday's upbeat labour report, thawed geopolitical concerns and eased global trade uneasiness," analysts at the Charles Schwab brokerage said.

The US trend reversal in turn weighed on European stocks which came off their session highs towards the closing bell.

Frankfurt's DAX index, however, outperformed its peers after energy giant E.ON announced plans to take over Innogy, the renewables subsidiary of competitor RWE, in a deal valued at around 20 billion euros.

The deal fuelled a rally of shares in the companies involved, with E.ON shares up by more than 4 per cent in closing trade, and RWE stock just over nine percent higher. 

'Best of both worlds' 

Worldwide, investors were cheered by US Labour Department data that showed employers added a forecast-busting 313,000 jobs in February.

The closely-watched monthly report also revealed moderating wage growth compared with the January report, mitigating concerns the Federal Reserve will speed its pace of interest rate hikes.

"The best of both worlds for equity markets, with the economy in full swing but nary a sign of wage inflation," said Stephen Innes, head of Asia-Pacific trade at OANDA. 

"It doesn't get much better than that for investors and at least for now has dampened the inflationary fears that weighed on investor sentiment in February."

LONDON — Even though more people now use cards, mobile phones or even facial recognition technology to pay street performers, buy pizza or donate to church on Sundays, hard cash is showing no signs of dying out, central bankers said.

The Bank for International Settlements (BIS) said cryptocurrencies and the debate around them — such as whether cash will be replaced by virtual substitutes — are part of a broader debate about the nature of money.

The payments sector has argued that the use of cash is falling and therefore they do not need to provide as many ATM machines or bank branches.

But in the BIS' latest quarterly review, researchers took a closer look at whether cash is becoming a relic of the past as some claim.

"Some of the breathless commentary gives the impression that cash in the form of traditional notes and coins is going out of fashion fast," said Hyun Song Shin, BIS economic adviser and head of research said.

"Despite all the technological improvements in payments in recent years, the use of good old-fashioned cash is still rising in most, though not all, advanced and emerging
market economies."

Cash in circulation has actually risen in recent years, from 7 per cent of GDP in 2000 to 9 per cent in 2016, although it has fallen in Sweden and a few other places.

“The resilience of cash as a social institution reminds us of the importance of understanding the economic functions of money, beyond just the innovations in technology," Shin said.

Still, debit and credit card payments are rising as well, from 13 per cent of GDP in 2000 to 25 per cent in 2016. People hold more cards and are using them for more and smaller transactions, Shin said.

LONDON — British Finance Minister Philip Hammond said on Sunday he might be able to relax his grip on public spending at the end of this year, but he stuck to his plan to cut the country's high debt levels.

Britain's budget deficit has probably fallen to about 2 per cent of annual economic output in the current financial year, which would be its lowest since 2002 and way down from the 10 per cent it reached in 2010, when many government departments began cutting spending sharply.

"There is light at the end of the tunnel because what we are about to see is debt starting to fall after it's been growing for 17 continuous years," Hammond told BBC television ahead of a half-yearly update on the public finances on Tuesday.

"That is a very important moment for us. But we are still in the tunnel at the moment. We have to get debt down."

Faced with uncertainty about what leaving the European Union will mean for the world's sixth-biggest economy and frustration among voters who have coped with eight years of austerity, Hammond has already pushed back a target of wiping out the deficit into the mid-2020s. 

He came up with extra spending in a budget plan in November.

But he remains under pressure from the opposition Labour Party and some lawmakers in his Conservative Party to spend more on the over-stretched state health system and other services.

Labour's finance spokesman John McDonnell said Hammond's performance was nothing to celebrate.

"Last year, we had the lowest economic growth in the G-7 countries," he said on Sunday. "Wages are below what they were in 2007-2008, before the banking crisis."

He said managers in the health service, school head teachers and local government official were bearing the brunt of the Conservatives' economic policies, and up to 11 million people would be hit next month by cuts in benefits. 

Stressing the limits on his room for manoeuvre, Hammond told the BBC it was not clear that recent improvements in Britain's economy — such as a pickup in weak productivity growth — represented a long-term change. 

"We need to look at what is happening sustainably in the economy," he said.

"But if there is the flexibility, the space to do something, then we will decide in the autumn how to do that," he said, adding the government would continue to balance the need for investment against the push to bring down debt.

Britain's overall public sector net debt totalled 1.7 trillion pounds in January, 84 per cent of gross domestic product and more than double its level before the financial crisis. Hammond says that restricted Britain's ability to respond to future economic shocks.

Hammond confirmed he plans no new tax or spending measures in Tuesday's budget statement which will be largely a low-key update of economic forecasts. He is also due to launch some policy reviews.

BEIJING — State-controlled China Huarong Asset Management Co. has bought a 36.2 percent stake in the unit of CEFC China Energy through which CEFC is acquiring a $9.1 billion stake in Russia's Rosneft, a filing by the CEFC unit showed.

Huarong acquired the stake in CEFC Hainan International in two tranches, in December and in February, according to a filing on February 13 by CEFC Hainan at an online portal run by the State Administration for Industry & Commerce (SAIC).

CEFC subsidiary CEFC Shanghai International Group Co. owns the remaining 63.8 percent in CEFC Hainan. 

Huarong made the stake purchase through its unit, Huarong Ruitong Equity Investment Management Co.

It was not immediately clear how much Huarong paid for the stake, but the filing showed CEFC Hainan's registered capital expanded by 9.6 billion yuan ($1.5 billion) as a result of Huarong Ruitong's fund injection.

Huarong Ruitong and CEFC did not immediately comment. 

Chinese financial publication Caixin, in a story published late Friday, quoted an unnamed China Huarong official as saying the firm did not purchase the stake and instead was ordered to conduct a debt-for-equity swap by the government. 

China Huarong could not immediately be reached for comment. 

Reuters and other Chinese and international media reported last week that Ye Jianming, the chairman and founder of privately owned CEFC, had been investigated for suspected economic crimes.

CEFC subsequently denied this and said operations were normal.

In just a few years, CEFC has transformed from a niche fuel trader into a rapidly growing oil and finance conglomerate, with assets across the world and an ambition to become one of China's energy giants. It agreed in September to buy a 14.16 per cent stake in Rosneft for $9.1 billion.

Huarong Ruitong, responsible for fundraising, project selection, debt acquisition and equity management for Huarong's debt-for-equity swap deals, planned to raise a 50 billion yuan investment fund for deals, Huarong said in early 2017.

NEW YORK - Bitcoin dropped below $9,000 on Friday to its lowest level in 3-1/2 weeks on concerns about regulatory clamp down around the world following cases of large thefts of digital currencies.

At 8:24 a.m. (1324 GMT), the biggest and best-known virtual currency was last quoted down 4.19 percent at $8,880.10 on Luxembourg-based Bitstamp exchange.