Business

WASHINGTON — Verizon announced on Monday it was selling faded Internet stars Yahoo and AOL to a private equity firm for $5 billion, ending the media ambitions of the telecoms giant.

The deal with Apollo Global Management also includes the entire Verizon Media unit, including the advertising tech operations of the two brands.

Verizon will retain a 10 per cent stake in the company, which will continue to be led by chief executive Guru Gowrappan, the company said in a statement.

Verizon acquired Yahoo in 2017 for some $4.5 billion, ending the run for one of the storied brands of the early internet. It merged Yahoo into its division with AOL, another star of the early Internet era, which Verizon acquired in 2015.

Both AOL and Yahoo lost traction — and lofty market valuations — as Internet users shifted to newer platforms such as Google and Facebook.

"We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands," said Reed Rayman, private equity partner at Apollo.

"We have enormous respect and admiration for the great work and progress that the entire organisation has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo's growth in its next chapter."

Apollo's David Sambur added, "We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer Internet platforms."

AMMAN — Arab Bank Group has consolidated the financial statements of Oman Arab Bank under Group accounts in the first quarter of 2021, according to a bank statement.

Oman Arab Bank has recently finalised the acquisition of Al Izz Islamic Bank, a full-fledged Islamic bank.

The step strengthens the bank’s presence in the Sultanate of Oman and it is in line with Arab Bank’s strategy to reinforce its business in the Gulf region, according to the statement.

The consolidation of Oman Arab Bank under the Group accounts has materially increased the size of Group balance sheet during this period, with total assets increasing by $8.1 billion and loans and deposits each increasing by $7.1 billion.

Arab Bank Group reported net income after tax of $128.3 million compared to $147.6 million for the same period last year, recording a drop of 13 per cent. Customer deposits grew by 30 per cent to reach $45.8 billion compared to $35.2 billion, while loans grew by 28 per cent to reach $33.5 billion compared to $ 26.2 billion.

Sabih Masri, chairman of the Board of Directors said the results of Arab Bank reflect its resilient performance in this challenging economic environment, compared to the pre-covid normal operating environment which prevailed in the first quarter of the last year.

Nemeh Sabbagh, chief executive officer, commented that while operating revenue continues to be impacted by low interest rates and a higher cost of risk, the bank’s performance demonstrates its robust fundamentals, its strong liquidity and capital base with equity of $10 billion, capital adequacy of 16.4 per cent, and a loan to deposit ratio of 73.1 per cent.

In the statement, Masri concluded by expressing optimism in future economic prospects, noting that the high pace of vaccination programmes witnessed by countries around the world will hopefully lead to the gradual recovery of regional and global economies.

HONG KONG — Asian and European markets rallied on Thursday as traders welcomed blockbuster earnings from Wall Street titans and after the Federal Reserve painted a rosy picture of the US economic outlook, repeating a pledge to stick to its guns with an ultra-low monetary policy.

Traders were also keeping an eye on President Joe Biden's first address to Congress as he laid out another huge spending plan aimed at helping American families and paid for with taxes on the wealthy.

After a shaky couple of weeks on trading floors, equities appear to be finding their feet again and getting ready to push to new highs as vaccines are rolled out, lockdowns eased and economies get back on track.

While there have been fears the expected surge in activity in this year could fan inflation and force central banks to step back from their loose monetary policies, the Fed said Wednesday it was ready to stay the course.

After its latest meeting the bank upgraded its outlook for the world's top economy, while its boss Jerome Powell said that the expected spike in inflation will be temporary owing to last year's low base of comparison and is not likely to need policy action.

"An episode of one-time price increases as the economy reopens is not the same thing as, and is not likely to lead to, persistently higher year-over-year inflation," he said.

He added it was not yet time to start talking about tapering its vast bond-buying programme that has pumped trillions into the financial system.

"The Fed's outcome-based guidance and triple-down bet on not talking about tapering should provide an easy playbook leading up to the June 16th (policy) meeting," said OANDA's Edward Moya.

"The US will need to see a couple of blowout nonfarm payroll reports, herd immunity reached before the June meeting, and inflation above 3.5 per cent for the Fed to be willing to start talking about tapering."

Markets strategist Louis Navellier added: "One observation about why the Fed is maintaining such a high level of conviction that inflation will not be long lasting is that the global reopening is not a synchronous economic event.

"China, the US, and parts of Europe are experiencing late-stage pandemic growth, but this is not happening in several key developing and emerging markets, where Covid-19 data is surging, and their economies are still suffering."

'Ready for takeoff' 

However, Michael Hewson at CMC Markets said: "To sum up, the Fed appears to be on autopilot through the summer, however if the data continues to surprise to the upside the market will probably front run it anyway."

While US markets struggled to lift off, with all three main indexes ending down, Asia was well in the green, with Hong Kong, Sydney and Singapore leading the way. Shanghai, Wellington and Jakarta were also up, though Seoul dipped and Taipei was flat. Tokyo was closed for a holiday.

London and Paris were well up in the morning though Frankfurt was flat.

The upbeat mood was helped by forecast-beating earnings reports from Apple and Facebook, two of Wall Street's biggest hitters, who essentially saw their profits double in the first quarter.

That came after a similar strong release by Google.

The three companies, along with Amazon, are among tech titans that have thrived as the pandemic accelerated a shift to working, learning, shopping and socialising online. 

South Korean giant Samsung also said Thursday it saw net profit jump by almost half in the first three months.

In Washington, Biden hailed the US vaccination drive and its recovery from the pandemic, telling a joint session of Congress: "America is ready for takeoff."

He also laid out his $1.8 trillion American Families Plan to pour money into early education, childcare and higher education -- all paid for by letting the top rate of income tax rate return to the pre-Donald Trump level around 37 per cent.

Americans earning less than $400,000 a year, however, would face no extra taxes, he said.

The spending splurge follows a $1.9 trillion stimulus and comes as a $2.2 trillion infrastructure proposal is being debated by lawmakers.

While the higher rate of tax is unlikely to please Wall Street, analysts have said traders were likely to be willing to overlook it for now as they concentrate on the economic recovery drive.

PARIS — European aircraft manufacturer Airbus flew back into the black in the first three months of the current year as cost-cutting and restructuring measures began to pay off, but the group warned that the crisis caused by the coronavirus pandemic was not yet over.

Airbus said in a statement that it booked bottom-line net profit of 362 million euros ($440 million) in the period from January to March, compared with a loss of 481 million euros a year earlier.

First-quarter revenues were stable at 10.5 billion euros.

"The good Q1 results mainly reflect our commercial aircraft delivery performance, cost and cash containment, progress with the restructuring plan as well as positive contributions from our helicopter and defence and space activities," said chief executive Guillaume Faury.

However, "the first quarter shows that the crisis is not yet over for our industry, and that the market remains uncertain."

Airbus said it had delivered a total of 125 commercial aircraft in the three-month period, up from 122 a year earlier, including nine A220s, 105 A320 family, one A330 and 10 A350s.

Looking ahead, the aircraft maker said it was sticking to its previous forecasts for stable aircraft deliveries of 566 for 2021 as a whole - the same number as in 2020 - and underlying operating profit of two billion euros. 

LONDON — British bank NatWest said on Thursday that net profit more than doubled in the first quarter as the UK economy started to recover from the Covid pandemic.

Profit after tax jumped to £620 million ($862 million, 713 million euros) in the three months to March, aided by a release of impairment provisions due to the improving economy, NatWest said in a statement. 

That compared with net profit of £288 million in the same period of 2020, when the Covid-19 pandemic erupted.

"NatWest Group's profit in the first quarter of 2021 is a result of a good operating performance in our core franchises, as well as modest impairment releases that reflect the better-than-expected performance of our loan book," said chief executive Alison Rose.

"Defaults remain low as a result of the UK government support schemes and there are reasons for optimism with the vaccine programmes progressing at pace and restrictions being eased.

"However, there is continuing uncertainty for our economy and for many of our customers as a result of Covid-19," she added.

NatWest revealed it had released £102 million of cash that it had previously set aside for loans that might not be repaid due to coronavirus fallout.

The performance of NatWest, like rival Lloyds Banking Group, hinges on the performance of the domestic British economy because both have core UK retail operations.

LONDON — The 13 members of the Organisation of the Petroleum exporting Countries (OPEC) and 10 other oil-producing countries, including Russia, said on Tuesday they would stick to an agreement for progressive production increases over three months from May given current stable prices and upbeat demand forecasts.

"We have examined the market situation and again have confirmed the decisions which were taken a month ago," Alexander Novak, the Russian deputy prime minister whose portfolio includes energy, told Rossiya 24 television following a ministerial meeting, confirming a decision the market had priced in.

"Market prices are currently more or less stable," he added. "We hope this trend continues through to year's end."

At its previous meeting at the start of April the alliance had decided to increase production by 350,000 barrels per day (bpd) in May, as much again in June and then by an additional 450,000bpd in July.

OPEC said the members of the OPEC+ alliance, formed in 2016, had agreed on the progressive increase in highlighting what it termed the importance of rebalancing the global oil market following last year's downward adjustment of output as a result of the COVID-19 pandemic.

Alliance members are currently leaving around seven million barrels of potential output a day in the ground in order not to flood a market struggling with the economic fallout of the pandemic.

The alliance, which accounts for approximately a third of global oil production, announced it would meet again in June to review output for July and August.

It noted ongoing concerns over rising COVID-19 cases not least in India, which before the virus hit was consuming more than 5 million bpd, third only to the US and China, according to BP data.

LONDON — Global stock markets were subdued on Tuesday on the eve of a monetary policy update from the US Federal Reserve (Fed) and ahead of earnings results from tech giants.

While trading floors are geared up for a rocket-fuelled surge in economic activity in the second half of the year and into the next, thanks to vaccinations and the easing of lockdowns, traders are in wait-and-see mode.

The Fed's monetary policy meeting outcome on Wednesday is broadly expected to see it reassert its pledge to maintain ultra-loose policy until its goals on unemployment and inflation are met.

The Fed's accompanying statement will be closely examined for clues on the state of the coronavirus-ravaged US economy and the future path for borrowing costs.

The central bank's meetings are a crucial focus of investor interest as they continue to fret that the expected strong recovery will send prices soaring and force policymakers to raise the record low interest rates cementing a global rally.

US President Joe Biden, meanwhile, will make his first State of the Union address on Wednesday, in which he could unveil a $1.8 trillion American Families Plan that would provide national child care, paid family leave and free community college, paid for with higher taxes on the rich.

After Monday saw record high closes, Wall Street opened slightly off.

Apple case 

Apple ceded 0.25 per cent as EU competition authorities were expected to imminently file formal accusations against the US company for unfairly squeezing out music streaming rivals, according to sources close to the case.

Separately, Russian regulators slapped a $12.1 million fine on Apple for "abusing" its dominant position in the market by giving preference to its own applications.

Tesla was down 2.8 per cent despite reporting record profits on a huge jump in revenues. 

Shortly after the US opening, there was a glimmer of cheer after a survey showed US consumer confidence hitting a post-pandemic high. 

Earlier, most Asian markets had swung in and out of positive territory with Tokyo, Hong Kong, Sydney, Seoul, Jakarta and Manila all in the red.

Major European markets all marked time, London off 0.2 per cent even as energy major BP rebounded into first-quarter profit on recovering oil prices while Frankfurt and Paris and also slipped into the red.

Google owner Alphabet and Microsoft will publish first quarter results on Tuesday while Apple, Amazon and Facebook will release their figures later this week.

"What looks like a holding pattern across most major stock markets seems set to continue," noted IG analyst Chris Beauchamp.

"It is another day of tech earnings, but until these arrive late this evening there is relatively little to go on, aside from further speculation about any tinkering with tomorrow's [Federal Reserve] statement."

Elsewhere, oil prices rose before Wednesday's key output meeting of OPEC and other major crude producers.

SAN FRANCISCO — Apple said on Monday it plans to boost its investment plans in the United States to $430 billion over the next five years, saying this would add some 20,000 jobs.

The updated plan includes more than $1 billion for a new campus and engineering hub in the Research Triangle area of North Carolina.

Apple also plans to invest "tens of billions of dollars for next-generation silicon development and 5G innovation across nine US states", a statement said.

The California tech giant said it was increasing its 2018 goal of $350 billion in US investments after Congress passed a measure lowering taxes on repatriated profits for American firms.

"At this moment of recovery and rebuilding, Apple is doubling down on our commitment to US innovation and manufacturing with a generational investment reaching communities across all 50 states," said Apple Chief Executive Tim Cook.

"We're creating jobs in cutting-edge fields — from 5G to silicon engineering to artificial intelligence — investing in the next generation of innovative new businesses, and in all our work, building toward a greener and more equitable future."

The news comes with Apple and other tech giants facing heightened antitrust scrutiny for their growing dominance of key economic sectors, which has increased during the pandemic.

Big Tech firms are also being targeted for tax reform both in the United States and globally.

Apple said it is "the largest taxpayer in the US" and has paid almost $45 billion in domestic corporate income taxes over the past five years.

The company said it was on track to meet its 2018 goal of creating 20,000 new jobs in the US by 2023 and that with the latest commitment, expects to create another 20,000 over the next five years.

The latest effort calls for expansion or new facilities in parts of California, Colorado, Massachusetts, Texas, Washington state, and Iowa.

LONDON — Digital euros, yuan and dollars? Faced with increased popularity for cryptocurrency Bitcoin, as well as for online payments during the pandemic, central banks are exploring new units of their own.

Outlined below is an examination of how central bank digital currencies could resemble and differ from cryptocurrencies and "stablecoin" projects like Facebook-backed Diem.

What are central banks doing? 

With the backing of Europe's biggest economy Germany, the European Central Bank (ECB) is mulling a digital euro that could be guaranteed by the central bank, in turn potentially offering greater security than by commercial banks.

The ECB has spoken also about the  possibility one day of central bank personal payment cards and accounts being linked to a digital euro. 

A formal decision on how to proceed is expected this year following consultations amid European concerns around privacy protection.

Issuing and transferring digital euros could be done using technology similar to the blockchain ledger on which cryptocurrencies such as Bitcoin rely.

But the ECB has stressed that a digital euro would not replace cash and should not be seen as a cryptocurrency.

Indeed, 13 years after the creation of Bitcoin, while the wider cryptocurrency market has swelled to a value above $2 trillion, its use as a means of payments has yet to take off. 

While one Bitcoin is today worth around $60,000, the ECB has noted that one euro must remain one euro.

China's central bank has been working on a digital currency since 2014 and is testing the use of a "digital yuan" or "e-CNY" in various pilot programmes across the country. 

Consumers across the country already widely use mobile and online payments, but the digital yuan could allow the central bank — rather than the big tech giants — greater data and control over payments.

Although no official launch date has been announced, China is intending to make it possible for foreign athletes and visitors to use its digital currency during the Winter Olympics next year in Beijing.

The Bank of England, along with the UK government, is meanwhile looking into the possibility of creating a digital currency that households and businesses could use instead of cash — an initiative finance minister Rishi Sunak dubbed "Britcoin".

In the US, the Federal Reserve is researching a possible cyber dollar, but is moving slowly to ensure it addresses the risks of fraud and counterfeiting.

Digital versus cryptocurrency 

The issuance of cryptocurrency like Bitcoin is regulated by an algorithm, not by a central bank's monetary policy committee. 

The de-centralised system ensures that Bitcoin's creators cannot print new money for example to help stimulate economic growth. 

At the same time, central banks have hit out at the highly-speculative world of cryptocurrencies.

Regarding the UK project, "as cryptocurrency investors ride a wave of speculation, the [British] government will be keen to distance itself from what is still seen as the wild west of the payments world", noted Susannah Streeter, senior analyst at stockbrokers Hargreaves Lansdown.

She added that "the attraction of the de-centralised system is still likely to keep crypto firmly in the speculative spotlight".

What about 'stablecoins?' 

The ECB appears to be considering a digital euro more because of the threat posed by stablecoins, such the planned unit Diem backed by Facebook, rather than Bitcoin.

Stablecoins are seen as less volatile than cryptocurrencies since they are pegged to traditional units such as the euro and dollar.

Should Facebook enable payments in Diem to be processed on its social network platforms, including WhatsApp, traditional currencies could suffer.