Business

NEW YORK — Stock markets and oil prices rallied on Friday on hopes China would roll back some of its economically-painful policies surrounding COVID.

Equities also got a boost from the latest US jobs data, which showed that hiring remained resilient and wages continued to rise, though at a slower pace, raising hopes of a soft landing of the economy despite rising interest rates aimed at quelling inflation.

"Asia markets bounced back strongly today on more unsubstantiated reports that the Chinese government is looking at a reopening strategy as it looks to navigate a path out of the straitjacket of its current zero-COVID policy," said CMC Market Analyst Michael Hewson. 

"These reports, which still haven't been confirmed in any official capacity, have prompted a huge relief rally in equity markets, despite concerns that any reopening is unlikely to happen in the immediate future, and the very real risk that it is merely a sucker's rally," he added.

The rally continued into Europe, where London, Paris and Frankfurt all rose at least 2 per cent.

Wall Street stocks climbed as well, with major indices all finishing more than 1 per cent higher after a volatile day of trading.

The optimism lifted oil prices, with Brent crude jumping 4.1 per cent and West Texas Intermediate bouncing 5 per cent as traders eyed rising demand for crude on the news out of China.

The pound also won back some ground against the dollar, rising nearly 2 per cent after tumbling after the Bank of England (BoE) said the UK economy could face a two-year-long recession that it believes has already begun.

The BoE raised its main interest rate by 0.75 percentage point on Thursday, the most in 33 years in efforts to contain runaway inflation.

This came after the US Federal Reserve (Fed) hiked its key rate by the same amount — the sixth increase this year — as central banks try to cool decades-high inflation.

The Fed has pointed to a still-strong labor market as a key reason for not easing up on its aggressive tightening.

The addition of 261,000 US jobs last month — far more than economists had forecast — likely will reinforce the determination of policymakers to continue the hawkish stance, even if they slow the pace of increases.

That would normally see equities tumble as higher interest rates are bad for most businesses.

But the figures are "consistent with achieving a soft landing for the economy", said Market Analyst Patrick O'Hare at Briefing.com, who also cited a "buy-the-dip" dynamic after US stocks fell four straight sessions earlier in the week.

While Fed Chair Jerome Powell said it is premature to think about pausing rate hikes, Boston Fed President Susan Collins added on Friday she sees a chance to achieve the goal of reining in price increases without putting the brakes on growth entirely.

But Chris Beauchamp, chief market analyst at online trading platform IG, pointed to one indicator in the report that suggests a drop of 300,000 jobs was the reason why the unemployment rate inched higher.

"This might be a case of cherry-picking par excellence, but markets have taken it as the first sign that the hitherto-unstoppable US market is weakening, thus perhaps bringing forward the chances of that fabled Fed pivot we keep hearing so much about," said Beauchamp.

Markets have been looking for any data that would help the Fed "pivot" away from its aggressive rate hikes.

PARIS — Europe must act immediately to prevent a shortage of natural gas next year as Russia slashes deliveries in the wake of the Ukraine war, the International Energy Agency (IEA) warned on Thursday.

The IEA said the shortfall would occur if Russia stops pipelines deliveries completely and China steps up its imports of liquefied natural gas, which Europe has relied upon to replace Russian supplies.

The region could lack 30 billion cubic metres that it needs "to fuel its economy and sufficiently refill storage sites during the summer of 2023, jeopardising its preparations for the winter of 2023-24", the Paris-based agency said in a report.

IEA Executive Director Fatih Birol said he would hold talks on Friday with several European governments.

"We believe Europe needs to take immediate action to avoid risks of natural gas shortage next year," Birol told reporters.

"We're ringing alarm bells for the European governments and for the European Commission for next year," he said.

'Danger of complacency' 

Russia has drastically cut supplies to Europe in suspected retaliation against Western sanctions over its invasion of Ukraine, but the region was able to fill storage sites for this upcoming winter.

The IEA said Moscow delivered 60 billion cubic metres of gas to Europe this year but that it was "highly unlikely" that Russia would provide the same amount in 2023 and could cease deliveries entirely.

And while Chinese LNG imports were lower in the first 10 months of this year, the world's second biggest economy could grab 85 per cent of the expected increase in global LNG supplies if its purchases recover next year.

European Union governments have urged business and households to conserve energy this winter in efforts to lower demand and scrambled to find alternative suppliers.

Norway has overtaken Russia as Europe's main natural gas supplier. The region has also shipping LNG from other countries at a rate that has caused bottlenecks at ports. Gas prices, meanwhile, have fallen sharply.

But Birol said Europe's gas storage sites may only be 65 per cent full in 2023, compared to 95 per cent this year.

"With the recent mild weather and lower gas prices, there is a danger of complacency creeping into the conversation around Europe's gas supplies, but we are by no means out of the woods yet," Birol said in a separate statement.

Birol warned that Europe will face "an even sterner challenge" next winter.

"This is why governments need to be taking immediate action to speed up improvements in energy efficiency and accelerate the deployment of renewables and heat pumps — and other steps to structurally reduce gas demand," he said.

LONDON — British luxury car maker Aston Martin Lagonda on Wednesday revealed its third-quarter net losses more than doubled on supply-chain disruptions, offsetting accelerating sales.

Losses after tax hit £228 million ($262 million) in the three months to the end of September, after a shortfall of almost £90 million a year earlier, according to the group which is targeting electrification of its range.

Sales of the brand, loved by fictional spy James Bond, zoomed by a third to £315.5 million, but this was propelled by a 28-per cent increase in the average car price, it said in a statement.

Aston Martin faced "supply chain and logistics disruption as well as inflationary pressures impacting the broader automotive industry" which delayed car deliveries and ramped up costs, noted chairman Lawrence Stroll.

The group was hit also by a plunge in the pound that made dollar-denominated debt more expensive.

Aston Martin has been knocked off track also by a collaboration with troubled electric car battery startup Britishvolt.

UK-based Britishvolt on Wednesday said it had secured "necessary near-term investment" after media reported on Monday that the cash-strapped firm was on the brink of collapse.

The startup, which is developing a £3.8-billion electric battery factory in north-eastern England, also warned that the "weakening economic situation is negatively impacting much business investment".

Britishvolt said staff had agreed to a temporary pay cut despite a UK cost-of-living crisis amid sky-high inflation.

Britain is due to ban the sale of new high-polluting diesel and petrol cars from 2030, forcing its car manufacturing sector to increasingly switch production to electric models.

Aston Martin meanwhile suffered vast losses in 2019 as it crashed spectacularly on weak global demand linked to China's economic slowdown and Brexit.

Losses then deepened further as a result of fallout from the coronavirus pandemic.

The automaker was saved from bankruptcy in early 2020 by Canadian billionaire Lawrence Stroll, who is the top shareholder.

Saudi Arabia became the second-biggest investor following a capital injection from its sovereign wealth fund earlier this year.

Aston Martin is looking to shift gear into fully-electric vehicles from 2025.

FRANKFURT — Volkswagen (VW) on Tuesday became the latest German auto giant to get rid of its car-sharing business, after it too struggled to make a profit in the emerging sector.

VW said it was selling its WeShare unit, which offers around 2,000 all-electric cars for hire in Hamburg and Berlin, to German company Miles Mobility.

No financial details were disclosed.

"We made it very clear in 2020 that we didn't think the [service] would be profitable for us," Christian Dahlheim, head of VW group sales, said in a call with reporters.

Rivals Mercedes-Benz and BMW agreed last May to sell their Share Now joint venture to US-European carmaker Stellantis, after they experienced lower-than-expected interest in car-sharing services.

As part of the deal with VW, Miles Mobility will order more than 10,000 all-electric vehicles from VW's stable of brands, including Audi and Seat cars.

Miles Mobility already runs a fleet of 9,000 vehicles across eight German cities, including Bonn, Cologne and Munich, and two cities in Belgium.

"With a strong partner to operate the fleet and with vehicles from various Volkswagen group brands, car sharing will become available to an even broader spectrum of customers," Dahlheim said in a statement.

German automotive expert Ferdinand Dudenhoeffer said VW's decision to sell its WeShare service showed that car-sharing remained a "niche market" that carried "considerable risks of losses".

Miles Mobility for its part said it aimed "to become the leading car-sharing platform in Europe" and welcomed the addition of VW's zero-emission cars to its fleet.

"The electrification of our fleet is a cornerstone of the Miles strategy towards sustainable urban transport," it added.

DUBAI — Most of the Middle East and North Africa's non-oil producing economies are experiencing a "gradual slowdown", the International on Monetary Fund (IMF) said on Monday, while resource-rich states are benefiting from high fossil fuel prices.

Despite soaring inflation and murky economic prospects worldwide, the IMF maintained its projection of 5 per cent growth for the region in 2022, dropping to 3.6 per cent in 2023.

But the figures, although higher than elsewhere in the world, don't reflect the region's "challenges", Middle East and Central Asia Director Jihad Azour told journalists in Dubai.

The Middle East and North Africa region varies wildly, from low-income states growing at just 0.8 per cent to the wealthy Gulf monarchies that are running at 6.5 per cent economic growth, according to the IMF.

"Almost two-thirds of the non-oil countries in the region are witnessing a gradual slowdown," he said, presenting the IMF's latest regional report which includes Iran but not Israel.

"[This] is expected because of the repercussions of the global slowdown and also the impact of monetary policy to address inflation, and the rise in interest rates."

"The real issue is the combination of new vulnerabilities," Azour said, highlighting inflation that is projected at 14.2 per cent this year and to remain in double digits for the fourth straight year in 2023.

Even the Gulf countries will retreat to 3.6 per cent growth next year on lower demand and production, the IMF said.

Underlining the sombre global outlook in the next 12-18 months, Azour urged the region's governments to accelerate reforms and set up social security safety nets to protect their populations.

AMMAN — Arab Bank Group delivered strong financial performance in the first nine months of this year, reporting net income after tax of $405.8 million as compared to $271.7 million for the same period last year with an increase of 4 per cent. The Group’s core banking activities kept up the momentum in most areas of operations delivering solid underlying growth in loans and deposits.  At the end of September 2022, loans were up by 4 per cent from September 2021 level to reach $35.6 billion, while deposits reached $47.8 billion, up by 3 per cent from the 2021 level. 

Mr Sabih Masri, chairman of the board of directors, stated that the strong performance shows the growth potential and resilience that diversification brings to the Bank despite the challenging economic environment. Mr Masri expressed his confidence in the Bank’s ability to continue to grow based on its sound strategy, while maintaining the strength of its balance sheet.

Ms Randa Sadik, chief executive officer, stated that the underlying results reflect Arab Bank’s earnings capacity strength with 13 per cent growth in net operating income across the Bank’s lines of business. This is primarily driven by the increase in total net interest and commission income; in addition to the controlled operating expenses. Ms Sadik added that the Group’s liquidity and asset quality remains solid where loan-to-deposit ratio stood at 74.3 per cent, and credit provisions held against non-performing loans continue to exceed 100 per cent. Arab Bank Group maintains strong capital base that is predominantly composed of common equity with capital adequacy ratio of 16.4 per cent.

Ms. Sadik noted that Arab Bank is on track to deliver its strategic digital transformation objectives, providing a comprehensive range of banking solutions and seamless customer experiences across the network and segments.

Earlier this year, Arab Bank was named “Best Bank in the Middle East 2022” for the seventh consecutive year by New York-based international publication “Global Finance”.

LISBON — One of the world's biggest technology get-togethers kicks off in the Portuguese capital on Tuesday, with organisers saying a key aim is to ask tough questions about cryptocurrencies.

Around 100,000 people are expected to gather in Lisbon for the four-day Web Summit and related events, the first full-scale edition since 2019 following the disruption of the pandemic.

The conference attempts to bring together start-ups, investors, business leaders and agenda-broadening speakers — linguist Noam Chomsky and heavyweight boxing champion Oleksandr Usyk are among this year's lineup.

Several of the prime slots, though, are taken by cryptocurrency specialists led by Changpeng Zhao, boss of crypto exchange Binance.

And plenty of companies present — from start-ups to billion-dollar behemoths Yuga Labs and OpenSea — are promoting the technology that fans claim will be the future of the web, gaming and ultimately the entire financial system.

But crypto has so far been derided as a tool to generate investment bubbles, hide illicit wealth and enable scams.

Conference organiser Paddy Cosgrave told AFP there were "a lot of questions to be answered" about crypto, describing it as "largely smoke and mirrors".

"We've done our best to persuade many of the leading lights in the space to come and some of them will get a bit of a kicking on stage, we'll see how that goes," he added.

Crypto sceptics including actor Ben McKenzie (Gotham, The O.C.) have also been given slots.

Organisers said the event's 70,000 tickets had sold out, with Cosgrave reckoning some 30,000 more people would be in Lisbon for side events.

Whistleblower focus 

Zhao's company is the dominant player in the crypto sector, but it has been repeatedly accused of trying to dodge regulatory scrutiny — claims the company has denied.

And it became embroiled in one of the biggest stories of the week, with a $500 million investment to back Elon Musk's takeover of Twitter.

But the wider crypto sector is struggling with plunging values and flatlining interest from the public.

And the tech industry as a whole is also struggling with supply chain problems, trade disputes between the US and China, and economic volatility that has sent investors fleeing.

Cosgrave, though, played down any suggestion that conferences like his had a role in helping to stimulate investment or turn around the fortunes of the sector.

"It's not really about the establishment or the dominant companies of today," he said.

"It's a gathering of companies that in the future may play some significant role."

As usual, though, the Web Summit will host plenty of figures from the dominant companies — Amazon, Apple, Google and Meta will all be there.

But on a lower level than last year, when the conference played host to Facebook's Nick Clegg and to whistleblower Frances Haugen, who accused their company of stoking hatred in return for clicks.

Cosgrave highlighted the event's history of giving a platform to whistleblowers — this year Mark MacGann, who revealed details of Uber's aggressive lobbying, will be giving a talk.

The organisers say more than 1,000 speakers will take part, giving talks on subjects from cyber security to artificial intelligence.