Business

DUBAI — The Saudi stock market led Gulf bourses down on Tuesday, a day after US oil prices slumped to historic lows over sluggish demand, a supply glut and a lack of storage.

      The Saudi Tadawul stock market, the largest in the Arab world, dropped 2.1 per cent at the start of trading before recovering some of the losses. Less than an hour after opening it was trading down 0.9 per cent.

      Energy giant Saudi Aramco was 1.3 per cent lower, well below its listing price.

      The Dubai Financial Market dropped by 2.3 per cent, while its sister bourse in Abu Dhabi was down 2.1 per cent. Qatar bourse dropped 0.7 per cent.

      In Kuwait, the Premier index slumped 1.3 per cent while the All-Shares index was down 1.0 per cent.

      The small Muscat bourse dipped 0.9 per cent while Bahrain stocks were flat.

      US crude prices made a partial recovery on Tuesday after trading at historic lows, diving below zero the previous day for the first time due to paralysed demand and a glut that overwhelmed storage facilities.

      On Tuesday West Texas Intermediate for May delivery was trading at -$4.72 a barrel. Brent crude, the international benchmark, dropped 10 per cent to $22.90 a barrel.

      All the Gulf states depend on oil income for most of their public revenues.

      The International Monetary Fund last week projected the six Gulf countries along with oil exporters in the Middle East and North Africa will lose more around $230 billion in oil revenues after oil prices dropped by more than 60 per cent this year.

      The global lender also forecast that economies of the Gulf countries will shrink by 2.7 per cent, their worst performance in several decades.

LONDON — Oil-price turmoil gripped traders once more on Tuesday, a day after US crude futures crashed below zero for the first time.

      The commodity rout also sent world equity markets spiralling lower, as investors fretted that the news could compound a deep global economic downturn.

      In Tuesday trading, New York's light sweet crude West Texas Intermediate for May delivery clawed back to minus $3.91 per barrel.

      WTI had Monday collapsed to an unprecedented intra-day low of minus $40.32, with producers paying clients to take it off their hands.

      This week's massive sell-off came ahead of Tuesday's expiry of the May contract. Most trading has moved to the June contract, which was down about 20 per cent at $16.33 per barrel.

      "Ever thought that it could be imaginable to see the price of US oil valued at less than a pizza? Or even a slice of pizza? How about for it to actually cost to sell US crude?" said Jameel Ahmad, head of currency strategy and market research at FXTM.

      "All of this was previously thought to be unthinkable -- but it became very real for traders as the price of US oil turned negative for the first time in history."

      Negative prices mean traders must pay to find buyers to take physical possession of the oil -- a job made near-impossible with the world's storage capacity at bursting point.

      Elsewhere Tuesday, European benchmark Brent North Sea oil for June delivery tumbled to an 18-year low at $18.10 per barrel, before shooting back up to $21.08 in volatile deals.

      "The most simple explanation for negative oil prices is that... players are now paying buyers to take oil volumes away as the physical storage limit will be reached. And they are paying top dollar," said Rystad Energy analyst Louise Dickson.

      Oil markets have been ravaged this year after the coronavirus pandemic was compounded by a price war between Saudi Arabia and Russia.

      While the two massive oil producing nations have drawn a line under the dispute and agreed with other countries to slash output by almost 10 million barrels a day, that is not enough to offset the lack of demand.

      Stock markets sink

      Equity markets were deep in the red on Tuesday, having enjoyed a healthy couple of weeks, thanks to massive stimulus measures and signs of an easing in the rate of new infections globally.

      The losses came despite signs that the virus is easing as global lockdowns begin to take effect, allowing some countries to slowly return to normality.

      Analysts warned the drop in stock markets could be an indication that the recent surge may have been too much too quick and another sell-off is possible.

      The flight to safety was reflected in currency markets, where the haven-investment dollar rallied against high-yielding, riskier units.

      Investors have also been spooked by US reports that North Korean leader Kim Jong Un had undergone cardiovascular surgery earlier this month and was in "grave danger".

DUBAI —  Emirates NBD, Dubai's largest bank, on Monday reported a 24 per cent slide in first quarter net profit after making huge provisions for risks resulting from the impact of coronavirus.

      The bank posted $567 million (2.1 billion dirhams) in net profit for the three months to March compared to $747 million in the same period in 2019, the bank said in a statement.

      "Net profit declined 24 per cent year on year due to higher impairment charges," said Emirates NBD, the second-largest lender in the United Arab Emirates.

      The bank put aside $697 million for risks "in recognition of a potential deterioration in credit quality in subsequent quarters related to the coronavirus pandemic," it said.

      "During these uncertain times, we have aimed to ensure that we continue to provide customers with uninterrupted banking," CEO Shayne Nelson said.

      "Despite higher provisions in the first quarter of 2020, the Bank delivered a good set of results... whilst maintaining healthy capital, liquidity and credit quality ratios."

      The provisions made by the bank are 350 per cent more than the corresponding quarter last year.

      The bank's net interest and non-interest incomes increased in the first quarter by 45 per cent and 48 per cent respectively.

      The assets of Emirates NBD, which last year acquired Turkish lender DenizBank, rose a modest one per cent to $188.5 billion.

      UAE's central bank said on April 5 that it had doubled to $70 billion a stimulus package aimed at supporting the economy and domestic banks in the face of coronavirus.

      Most of the measures focused on easing financial and liquidity requirements for banks to free up cash for lending.

      The regulator's measures also allowed banks to defer clients' repayments of loans until the end of 2020.

      UAE has introduced strict measures to combat the disease including imposing a lockdown on Dubai, halting travel and closing shopping malls and entertainment venues.

LONDON — US oil prices dived to 22-year lows at just $11 on Monday after crashing almost 40 per cent in a market flooded with crude and slammed by evaporating demand.

      Just before 12:00 GMT, the US benchmark West Texas Intermediate (WTI) crude for May delivery tanked to $11.04 -- the lowest level since 1998.

      Trade, however, was also technically driven as investors closed out their positions ahead of the May contract expiry on Monday. The June contract was down 11.9 per cent at $22.06.

      "The real problem of the global supply-demand imbalance has started to really manifest itself in prices," said Rystad Energy analyst Bjornar Tonhaugen.

      "As production continues relatively unscathed, storage is filling up by the day. The world is using less and less oil and producers now feel how this translates in prices."

      The European benchmark contract, London Brent North Sea oil for June delivery, was down 6.1 per cent at $26.38 per barrel.

      Signs that the coronavirus may have peaked in Europe and the United States failed to lift Asian and European financial markets generally.

      Traders are instead becoming more and more concerned that oil storage facilities are reaching their limits, as stockpiles continue to build owing to the crash in demand caused by the COVID-19 pandemic.

      Analysts said this month's agreement between OPEC and its peers to slash output by 10 million barrels a day was having little impact because of the virus lockdowns and travel restrictions that are keeping billions of people at home.

      WTI was hit particularly hard as its main US storage facilities in Cushing, Oklahoma, were filling up, with Trifecta Consultants analyst Sukrit Vijayakar saying refineries were not processing crude fast enough.

      There are also plenty of supplies from the Middle East with no buyers as "freight costs are high", he told AFP.

      AxiCorp's Stephen Innes added: "It's a dump at all cost as no one... wants delivery of oil, with Cushing storage facilities filling by the minute.

      "It hasn't taken long for the market to recognise that the OPEC+ deal will not, in its present form, be enough to balance oil markets."

      Stock markets were mostly lower despite governments starting to consider how and when to ease the lockdowns that have crippled the global economy.

      Italy, Spain, France and Britain reported drops in daily death tolls and slowing infection rates, while Germany began allowing some shops to reopen and Norway restarted nurseries.

       'No time to get cocky'

      In the US, Andrew Cuomo, governor of badly hit New York state, said the disease was "on the descent", though he cautioned it was "no time to get cocky".

      Mounting evidence suggests that the lockdowns and social distancing are slowing the spread of the virus.

      That has intensified planning in many countries to begin loosening curbs on movement and easing the crushing pressure on national economies.

      Investors are keeping an eye on Washington, where Congress and the White House are working towards a $450 billion economic relief plan for small business to add to the trillions already pledged to support the economy.

BRISBANE, Australia — Australia will force Google and Facebook to pay media outlets for their content, the government announced on Monday, vowing to lead the world in making the tech giants share lucrative advertising revenues with traditional media.

      Treasurer Josh Frydenberg said a mandatory code of conduct -- to be fully unveiled by July and made law soon after -- will require the US-based firms to reimburse Australian media companies for using their news and other content.

      "It is about holding these tech titans to account, about ensuring genuine competition, (and) it is about delivering a level playing field," Frydenberg said.

      "It is about keeping jobs in journalism and it is about ensuring a fair outcome for all."

      Google and Facebook have had a huge impact on Australia's news industry, capturing two-thirds of online advertising spending.

      In response to falling revenues, Australian news outlets have slashed 20 per cent of jobs in the last six years.

      If Australia is successful in its efforts to ensure more advertising revenue flows to publishers, it would be the first country to do so.

      France last year became the first European state to implement an EU copyright directive that requires payment for reproduced news content, but Google has so far refused to pay and instead said it would no longer display French reports.

      The impasse has prompted the country's competition authority to order the firm negotiate with publishers.

      A similar battle has played out in Spain, where Google News has not reopened since the country passed legislation in 2014 requiring payment for articles.

      'Mountain to climb'

      The mandatory code in Australia follows an 18-month inquiry into the power of digital platforms by the Australian Competition and Consumer Commission (ACCC), which recommended an overhaul of existing regulations.

      Frydenberg said the government was imposing the measures after discussions on a voluntary code failed to make headway, with the impact of the coronavirus pandemic on advertising revenues hastening the need for action.

      "We understand the challenge that we face," he said. "This is a big mountain to climb. These are big companies that we are dealing with, but there is also so much at stake, so we're prepared for this fight."

      ACCC chair Rod Sims said the consumer watchdog had advised the government it was "unlikely" the digital platforms would agree to pay for Australian news.

      Facebook Australia and New Zealand managing director Will Easton said the company was "disappointed" by the government's announcement, which came ahead of an agreed May deadline to produce the voluntary code.

      "We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem," he said.

      Easton said Facebook had invested "millions of dollars" into partnerships, training and content arrangements to support Australian publishers.

      A Google spokesperson said the company had participated in the voluntary process and would continue to engage with both publishers and the ACCC.

      "We've worked for many years to be a collaborative partner to the news industry, helping them grow their businesses through ads and subscription services and increase audiences by driving valuable traffic," she said.

      The drive for the new Australian rules has been led by powerful media mogul Rupert Murdoch, who has accused Facebook and Google of having "popularised scurrilous news sources" over reputable outlets.

      Michael Miller, executive chairman of Murdoch's News Corp Australasia, welcomed Monday's announcement as a vital step.

      "For two decades, Google and Facebook have built trillion-dollar businesses by using other people's content and refusing to pay for it," he said.

      "The Australia media industry is at a tipping point and a mandatory code that leads to the platforms paying a fair -- and very significant price -- must be put in place urgently."

      Australia's new regulations will also cover the sharing of data, and the ranking and display of news content, to be enforced by binding dispute resolution mechanisms and penalties.

      An estimated 17 million Australians use Facebook each month and spend an average of 30 minutes on the platform a day, while 98 per cent of Australian mobile searches use Google.

By Holly Robertson

BEIRUT — A five-star hotel in Beirut that once hosted royalty and survived the civil war has been forced to close over Lebanon's economic crisis and coronavirus lockdown, its manager said on Saturday.

      Lebanon is grappling with its worst financial crunch since the 1975-1990 civil war, now compounded by a nationwide lockdown since March 15 to stem the spread of the novel coronavirus.

      The crisis has pushed the owners of Le Bristol to close down the landmark hotel after almost seven decades in business, its general manager Joseph Coubat said.

      "It's because of the economic situation which has become unbearable," he said.

      "Now with the coronavirus, and with the financial problems we are going through in the country, the level of occupancy has fallen very low," he told AFP, saying it was less than 10 per cent.

      He said the owners had decided to shut the hotel "while waiting for better days", but that for the moment the closure was definitive.

      Designed by French interior designer Jean Royere, Le Bristol was first opened in 1951.

      It boasts the oldest ballroom in Beirut and once housed Lebanon's first ever skating rink before it was turned into a conference room.

      Its guests have included the late shah of Iran Mohammad Reza Pahlavi and his wife Soraya Esfandiary-Bakhtiari, American jazz trumpeter Dizzy Gillespie, and former French president Jacques Chirac.

      Le Bristol never closed during the civil war, when it hosted foreign journalists, though it was shuttered for refurbishment between 2013 and 2015, when owners poured millions of dollars into its renovation.

      Between 2004 and 2005, the political opposition met there in what was the first large gathering against the then Syrian presence in Lebanon. The group was dubbed the "Bristol meeting".

      Occupancy at the hotel started dropping from October last year, Coubat said, when a crumbling economy and frustration with the political elite led to an unprecedented anti-government street movement.

      After the COVID-19 pandemic reached the country, the airport's closure from March 19 as part of measures to halt the spread of the virus dealt a further blow to the hospitality sector.

      Many hotels have zero occupancy at the moment, the head of the hotel owner syndicate has said.

      "It's catastrophic. Those in charge now need to really think up a rescue plan," Coubat said, referring a new government struggling to redress the economy since January.

      Over the past months, tens of thousands have lost their jobs or part of their salaries in various sectors due to the economic crunch, even as the cost of living has soared.

      The value of the Lebanese pound has plummeted by half on the parallel exchange market, and poverty has risen to 45 per cent, according to official estimates.

      With a debt equivalent to 170 per cent of its gross domestic product, one of the highest in the world, Lebanon defaulted on its payments for the first time last month.

      The country has registered 672 cases of COVID-19, including 21 deaths.

ABU DHABI — The emirate of Abu Dhabi said on Sunday it had sold $7 billion of bonds in the third major sale this month by Gulf sovereigns seeking to counter slumping oil prices.

      OPEC kingpin Saudi Arabia last week raised $7 billion in a bond sale, while gas-rich Qatar sold bonds worth $10 billion two weeks ago.

      Abu Dhabi, which has the biggest sovereign wealth fund in the Gulf Cooperation Council (GCC), said that its offering was oversubscribed by more than six times.

      The transaction contained three tranches -- a $2 billion five-year tranche, a $2 billion 10-year segment, and a third tranche of $3 billion maturing after 30 years -- the Abu Dhabi department of finance said in a statement.

      The richest of seven sheikhdoms that make up the United Arab Emirates, Abu Dhabi sits on the bulk of the federation's oil wealth.

      Saudi Arabia's finance ministry said its international bond issuance attracted bids worth $54 billion, more than seven times the value of its offering.

      Qatar's finance ministry said its own sale was oversubscribed by more than four times.

      The Kuwaiti government has sent legislation to parliament seeking to borrow $65 billion over the next 10 years.

      The six GCC member states, which also include Bahrain and Oman, depend heavily on oil income for between 65 per cent and 90 per cent of public revenues.

      Global oil prices have slumped this year due to population lockdowns and a price war between Saudi Arabia and Russia.

      An agreement by OPEC and its allies, including Russia, to cut output by a record 9.7 million barrels per day last week failed to revive prices.

      According to the International Monetary Fund, the combined economies of GCC states are forecast to shrink by 2.7 per cent this year.

NEW YORK  —  Wall Street stocks finished sharply higher on Friday, closing out a second week of gains as US officials moved forward with plans to gradually reopen the economy.

      The Dow Jones Industrial Average added more than 700 points, or 3.0 per cent, ending at 24,242.49.

      The broad-based S&P 500 gained 2.7 per cent to 2,874.56, while the tech-rich Nasdaq Composite Index advanced 1.4 per cent to 8,650.14.

      Analysts pointed to a number of positive catalysts, including a report of promising research on a Gilead Sciences drug to treat coronavirus, Boeing's announcement that it will resume US commercial plane production and the release of a White House blueprint to reopen the economy.

      In one of the first moves by a major US state, Texas Governor Greg Abbott approved retailers to employ a "to go" model that requires reopened stores to deliver items to customers' cars or homes.

      But Abbott said Texas schools would remain closed for the remainder of the 2019-2020 school year.

      TD Ameritrade Chief Market Strategist J.J. Kinahan cautioned investors not to expect the recovery to come quickly.

      "Investors seem optimistic that there's light at the end of the tunnel," Kinahan said. "Investors should be cautious though, as the 'getting going' might end up being slower than expected."

      All three major US indices finished the week higher, shrugging off atrocious economic data, including another spike in jobless claims and a big drop in retail sales.

      Boeing jumped 14.5 per cent after announcing it will begin to ramp production back up at its Washington state commercial plane plants, bringing back around 27,000 workers.

      Gilead surged 9.7 per cent following a news report about promising research on an antiviral medication from the drugmaker being tested to treat the coronavirus.

      Apple dropped 1.4 per cent following a downgrade from Goldman Sachs, which predicted weak demand for iPhones due to the economic slowdown.

RIYADH — Saudi oil giant Aramco said on Friday it would market 8.5 million barrels per day (bpd) of crude from May under a producers' agreement to restrict supply and boost plummeting prices.

      The deal came after a price war between Riyadh and Russia saw the kingdom boost supplies to records of over 18 million bpd earlier this month.

      In a brief statement on the website of the Saudi bourse, the firm said on Friday it would make available 8.5 million bpd, without clarifying whether or how this would be split between exports and domestic supply.

      Global oil prices have collapsed amid economic turmoil due to the novel coronavirus pandemic, along with a supply glut and the Saudi-Russian price war.

      But the OPEC+ alliance of major producers, led by Riyadh and Moscow, agreed Sunday to slash daily production by 9.7 million bpd over the next two months.

      According to the deal, Saudi Arabia and Russia will cut 2.5 million bpd each from their October 2018 production levels of 11 million bpd.

      Saudi energy minister Prince Abdulaziz Bin Salman was quoted by local media on Tuesday as saying that G-20 producers outside OPEC+ have pledged to cut 3.7 million bpd.

      Taken alongside the OPEC+ pledges and strategic reserves purchases, this could reduce global supply by 19.5 million barrels per day, he said.

PARIS — Amazon France said on Thursday it did not know when it would reopen its distribution centres, shuttered after a court ordered it to limit deliveries to essential goods pending a review of anti-coronavirus safety measures for its staff.

      The online retailer closed its French centres on Thursday in response to the ruling by a court outside Paris. It initially said it was closing for five days, during which period employees would be paid their full salaries.

      The facilities are key in preparing orders submitted online for delivery to clients.

      On Thursday, Amazon France director general Frederic Duval said: "We will try to reopen as soon as possible, but I cannot today confirm the date."

      He told the RTL broadcaster the duration of the closure was "unknown".

      Amazon France's biggest labour union, the SUD, took the company to court saying workers were being forced to work in close proximity in contravention of strict infection-busting social distancing measures announced by the government.

      The court in Nanterre ruled that Amazon France had "failed to recognise its obligations regarding the security and health of its workers" and gave it a month to carry out an evaluation of the measures in place.

      In the meantime, the company could continue deliveries of food as well as hygiene and medical products only, or risk a fine of one million euros ($1.08 million) for each day of non-compliance.

      Amazon had said it was "perplexed" by the ruling as it had given the court evidence about temperature checks, physical distancing orders and use of personal protective equipment.

      On Wednesday, a company committee voted to close the distribution centres to clean them and evaluate the health risks as ordered by the court.

      "The labour action that led to this result will have big consequences for many people in France, for millions of clients who use our services to have products delivered to their homes during this confinement period, for our employees who will have to stay at home, for thousands of small and medium enterprises that use our services to do business by shipping via Amazon," Duval said.

      "In these circumstances, taking into account the fine, we are compelled to close our sites," said Duval.

      France, like many other countries, has closed all non-essential businesses -- only supermarkets and pharmacies are open in many areas.

      Online retailers have continued to sell products now unavailable elsewhere, and in many countries Amazon has added thousands of staff to meet a surge in orders.