Business

TOKYO — Tokyo stocks opened marginally lower on Thursday as the yen picked up against the dollar on concerns about a possible delay to US tax reform.

The benchmark Nikkei 225 index slipped 0.17 per cent, or 36.89 points, to 21,991.43 in early trade while the broader Topix was down 0.28 per cent, or 4.88 points, at 1,739.13.

The indices later moved into positive territory as investors picked up bargains.

The Japanese stock market will likely be kept under pressure on Thursday by lower US stock prices and the yen’s appreciation, Okasan Online Securities said.

“However, the Nikkei index is in the middle of a new uptrend over the mid- and long term,” it said. 

Investors “may as well buy on drops without being swayed by an ambiguous market mood”, the brokerage said in a client note.

The key market gauge hit a quarter-century high last week but fell for a sixth straight day to Wednesday.

Wall Street also dropped on Wednesday as weak oil prices and fears of a delay in US tax reforms hurt investor sentiment.

The dollar has also faced selling.

The greenback was changing hands at 112.97 yen early Thursday, slightly up from 112.85 in New York on Wednesday afternoon but still down from 113.21 yen in Tokyo earlier in the day. 

A stronger yen is usually a drag on the Tokyo stock market as it erodes the profitability of Japanese exporters.

SoftBank rose 1.60 per cent to 9,490 yen after Bloomberg News reported the high-tech giant planned to invest as much as $25 billion in Saudi Arabia over the next three to four years.

Energy stocks continued to fall, with oil explorer Inpex off 1.98 per cent at 1,256.5 yen.

DUBAI — Boeing on Wednesday announced an order from Gulf airline flydubai for 225 medium-haul 737 MAX aircraft with a list price of $27 billion, hailing it as the “largest-ever single-aisle jet order” from a Middle East carrier.

The announcement, made at the Dubai Air Show, came just hours after rival Airbus said it had secured the biggest-ever order in its history to supply 430 medium-haul A320s to US investment firm Indigo Partners at a catalogue price of $49.5 billion.

The rival US and European manufacturers are engaged in a fierce battle for the medium-haul market, the world’s largest by volume, both offering reengined versions of their top-selling models that promise a 15 per cent reduction in fuel production.

Currently, Airbus still has a slight edge with a 55 per cent share of the market.

The European manufacturer boasts orders for more than 5,500 aircraft since it launched the A320neo in 2010. 

Boeing boasts more than 4,000 for the various models of the 737 MAX.

The agreement with flydubai consists of a commitment for 175 MAX aircraft, and purchase rights for 50 additional MAXs.

More than 50 of the first 175 aircraft will be 737 MAX 10s. The rest of the initial order will be made up of the MAX 8 and MAX 9.

No-frills airline flydubai, which serves 95 destinations in 44 countries, is an all-Boeing carrier.

It placed its first order for 50 Next-Generation 737-800s in 2008. To date, it has taken delivery of 63 737-800s and three 737 MAX 8 aircraft.

The new deal surpasses its previous record order of 75 MAXs and 11 Next-Generation 737-800s which was signed at the 2013 Dubai Air Show.

LONDON — Tesco won provisional approval for its £3.7 billion ($4.9 billion) takeover of wholesaler Booker from the UK competition regulator on Tuesday, moving Britain’s biggest retailer closer to securing a new avenue of growth.

The Competition and Markets Authority (CMA) said it had conducted an in-depth review and provisionally concluded that Tesco’s purchase of Booker does not raise competition concerns.

The provisional unconditional clearance will come as a major relief to Tesco. Most analysts had expected that Tesco would have to agree store disposals to gain clearance.

Both Tesco and Booker, the country’s biggest grocery wholesaler, welcomed the CMA announcement. Tesco said it expected to complete the deal, which also requires shareholder approvals, in early 2018.

Shares in Tesco and Booker were up 4.8 per cent and 5.1 per cent respectively at (09:05 GMT).

Bernstein analysts said they expect some uncertainty to remain, with the focus shifting to whether investors will approve the deal.

Their analysis indicates that Tesco will achieve the required 50 per cent shareholder approval and that the focus will be on Booker, where the threshold is 75 per cent.

“With a higher shareholder hurdle and the Tesco share price below the level when the bid was made [about £2], Booker shareholders may argue for a higher share price,” the broker’s analysts said.

For each Booker share, Tesco is offering 0.861 new Tesco shares and 42.6 pence in cash.

Strong competition 

The CMA said it found that Tesco as a retailer and Booker as a wholesaler supplying caterers and independent retailers Premier, Londis, Budgens and Family Shopper do not compete head-to-head in most of their activities. 

In particular, it found that Tesco does not supply the catering sector that accounts for more than 30 per cent of Booker’s sales.

“Our investigation has found that existing competition is sufficiently strong in both the wholesale and retail grocery sectors to ensure that the merger between Tesco and Booker will not lead to higher prices or a reduced service for supermarket and convenience shoppers,” said Simon Polito, chair of the CMA’s inquiry group.

The CMA is now inviting further comment and evidence before making its final decision by the end of December.

The proposed deal is Tesco Chief Executive Dave Lewis’s boldest move yet. He believes it will provide a new source of growth by giving the group access to the fast-growing “out of home” food market, given Booker’s role as a distributor to the catering industry.

Some Tesco shareholders have criticised the bid, saying Tesco is overpaying and that it will distract from the company’s turnaround plan. 

Rival wholesale groups have also called for the takeover to be blocked. 

ABU DHABI — Oil producers are expected to unanimously extend a production cut accord later this month but its duration is still under discussion, the UAE energy minister said on Monday.

“I think this group of committed and responsible producers came together... and I think they will continue to do what it takes to take us to the next level,” United Arab Emirates Energy Minister Suheil Al Mazrouei told the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) international oil conference in Abu Dhabi.

He said 158 million barrels of surplus crude oil remain on the market and “we need to reduce that — which means there is a potential for extension”.

Mazrouei said there was near-unanimity among the 24 OPEC and non-OPEC producers which agreed a year ago to cut output by 1.8 million barrels per day.

The minister said that he had “not heard anyone” talks about allowing the cuts deal to expire, although the duration of the new extension would be “subject to discussion”.

“I am hopeful that we will reach an agreement that will lead to more stabilisation in the market and more investments coming to the market,” he said.

Mazrouei said an escalating dispute between regional powers and OPEC members Saudi Arabia and Iran will not prevent a new extension.

As a result of the cuts, oil prices have rebounded to more than $64 a barrel from $40 a year ago, and huge stocks of crude built up over the past three years have reduced.

Mazrouei, whose government is OPEC’s fourth largest oil producer, said he was not happy with the sharp fluctuations in prices, saying they need to be more stable.

OPEC ministers are scheduled to hold a crucial meeting in Vienna at the end of November to discuss extending the cuts deal as well as imposing the quota system on countries that have so far been exempted, namely Libya, Iran and Nigeria.

Cartel kingpin Saudi Arabia and the world’s top producer Russia have voiced support for a rollover to the deal, the duration of which remains up for debate.

OPEC Secretary General Mohammed Barkindo said the producers deal had yielded solid results as a “valid response to the worst oil price down cycle in history”.

“There are clear indications that the market is rebalancing at an accelerating pace,” he said at the conference.

Barkindo said the oil market was on track to stabilise because of a drop in crude stocks and a rise in global demand.

The OPEC chief also called on new oil producers, including US shale crude producers, to join a broader agreement to secure the future of energy.

Barkindo said talks were under way to “institutionalise” the cooperation between OPEC and non-OPEC members to regulate the market.

“Now, we are not talking about OPEC 14 but about the global platform 24,” he said, referring to the number of oil-producing members that signed the production cut accord.

MANILA — Hong Kong signed free trade and investment agreements with the 10-nation Association of Southeast Asian Nations (ASEAN) on Sunday, in what one of the Chinese territory’s officials called a “loud and clear” vote against rising regional trade protectionism.

The pacts, which conclude nearly three years of talks, are expected to take effect on January 1, 2019, at the earliest. They aim to bring “deeper and bolder” integration of market access with the bloc, said Edward Yau, Hong Kong’s commerce and development secretary.

“In the face of protectionist sentiments in other parts of the world, these two agreements are in fact a loud and clear vote from all of us here for freer and more open trade,” Yau said.

“Hong Kong, being a free trade promoter and advocate of a strong, rule-based, multilateral trading system, will continue to take this pathway, continue to do our utmost.”

Total merchandise trade between Hong Kong and ASEAN was HK$833 billion ($107 billion) last year, official figures show. Total services trade was HK$121 billion in 2015.

The ASEAN Hong Kong China Free Trade Agreement  was signed on the sidelines of a summit of the regional grouping in the Philippine capital of Manila.

It came after leaders attending an Asia-Pacific Economic Cooperation  summit in Vietnam agreed to tackle “unfair trade practices” and “market-distorting subsidies” in a statement on Saturday that bore the imprint of US President Donald Trump’s efforts to reshape the global trade landscape. 

That summit offered a contrast between the vision of Trump’s “America First” policy and the usual consensus favouring multinational deals that China now seeks to champion.

Hong Kong has one of the world’s freest and most open economies, and the pacts will see many ASEAN countries gradually reduce or eliminate customs duties on Hong Kong goods. Professional services should also benefit, with increased investment flows, Yau said.

The partnership “will usher in greater trade synergies and more job opportunities for people and businesses in the region”, said Philippine Trade and Industry Secretary Ramon Lopez.

The ASEAN grouping includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

DANANG, Vietnam — Countries in the Trans-Pacific Partnership (TPP) trade deal have agreed on the core elements to move ahead without the United States, officials said on Saturday, after last-minute resistance from Canada raised new doubts about its survival.

Taking the agreement forward is a boost for the principle of multilateral trade pacts after US President Donald Trump ditched the TPP early this year in favour of an “America First” policy he believes would save US jobs.

Talks — often heated — have been held on the sidelines of an Asia-Pacific Economic Cooperation (APEC) summit in the Vietnamese resort of Danang, where Trump and other leaders held their main meeting on Saturday.

“We have overcome the hardest part,” Vietnam’s trade minister, Tran Tuan Anh, told a news conference. 

The agreement, which still needs to be finalised, would now be called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership he said. 

Japanese Economy Minister Toshimitsu Motegi said he hoped that moving ahead with the deal would be a step towards bringing back the United States.

Partly to counter China’s growing dominance in Asia, Japan had been lobbying hard for the TPP pact, which aims to eliminate tariffs on industrial and farm products across the 11-nation bloc whose trade totalled $356 billion last year.

Some 20 provisions of the original agreement were suspended. Those included some related to protecting labour rights and the environment, although most were related to intellectual property — one of the main sticking points after the US withdrawal.

“The overall impact on most firms is quite modest,” said Deborah Elms of the Asian Trade Centre think tank, adding that the new version was “essentially identical to the original document”.

Any kind of deal looked doubtful on Friday, when a summit of TPP leaders was called off after Canadian Prime Minister Justin Trudeau did not attend. Canada’s trade minister later blamed Trudeau’s absence on “a misunderstanding about the schedule”.

Canada, which has the second-biggest economy among remaining TPP countries after Japan, had said it wanted to ensure an agreement that would protect jobs.

Canada’s position has been further complicated by the fact that it is simultaneously renegotiating the North American Free Trade Agreement with the Trump administration.

In a speech in Danang, Trump sent out a strong message that he was only interested in bilateral deals in Asia that would not disadvantage the United States.

Chinese President Xi Jinping used the same forum to stress multilateralism and said globalisation was an irreversible trend.

The APEC leaders met in closed sessions on Saturday, pausing for the traditional “family photograph”, taken above the South China Sea.

At the start of the meeting, Vietnamese President Tran Dai Quang noted APEC’s success in removing barriers to trade — as well as the new uncertainty in the world.

“We have witnessed changes more rapid and complex than we expect,” he said in opening remarks.

APEC trade and foreign ministers released a joint statement on Saturday, three days later than planned because of wrangling over customary language the United States wanted to change.

The statement still refers to free and open trade, but it also refers to fair trade and to members “improving adherence to rules agreed upon”. 

A reference to strengthening the multilateral trading system was dropped. The ministers also said they would work to improve the functioning of the World Trade Organisation — which Trump criticised in Friday’s speech.

LONDON — The dollar slipped to its lowest this month against the yen on Thursday, pressured by talk of possible delays to US President Donald Trump’s tax reform plans as well as a risk-off mood. 

The greenback had hit its highest levels in eight months against the Japanese currency at the start of the week, boosted by strong risk appetite across markets, but has since fallen back by about 1.3 per cent.

It fell as low as 113.25 yen on Thursday after a sudden fall in Japanese equities from multi-decade peaks dampened risk sentiment in Asian trade — a mood that continued into London trading hours, with European stocks also falling. 

The yen is a low-yielding currency often used to fund investment in higher-yielding currencies and assets when risk sentiment is positive.

The dollar was also 0.3 per cent down against a basket of major currencies. 

The euro climbed to a six-day high of $1.1645, having dropped as low as $1.1553 on Tuesday, its weakest since July 20.

“The dollar is running out of steam. There’s nothing to drive it higher,” said BMO Capital Markets Currency Strategist Stephen Gallo in London. 

The “Trumpflation trade” — bets that Trump’s policies would boost growth and inflation, meaning a faster pace of US interest rate increases — had driven the dollar to 14-year highs after his election and 10-year US Treasury yields to their highest since 2014.

But they and the dollar have since fallen back. 

A US Senate tax-cut bill, differing from one in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican push for a tax overhaul.

Any potential delay in the implementation of tax cuts, or the possibility of proposed reforms being watered down, would tend to work against the dollar, analysts said.

“Disappointment over the tax reforms is driving the dollar lower. There is a lack of momentum behind the recent moves and the euro’s outlook remains bright as global money managers remain underweight in the single currency,” said Marc Ostwald, a strategist at ADM Investor Services International in London. 

The New Zealand dollar touched a two-week high after comments from the country’s central bank on the inflation outlook were taken as hawkish as it kept interest rates unchanged as expected.

The currency rose as high as $0.6977, its strongest since October 24, before dipping to trade flat on the day at $0.6969.

AMMAN — It is not quite often that Isuzu changes official distributers, but when it does so it seems to yield a big difference as it is the case in Jordan.  

The market share of Isuzu, the Japanese commercial vehicle manufacturer, has risen dramatically in Jordan since a new dealership was installed two years ago, Isuzu Motors International Vice President Waleed Noubani said.

Interviewed by The Jordan Times in Tokyo, Japan, Noubani said restructuring the company’s operations in the country after “some difficulties”, and having assigned Qudra Automotive as a new sole distributor in the Kingdom, its market share has doubled from 8 per cent in less than two years.

Currently hovering between “second and third in market share”, Isuzu’s “target is to be number one“, according to Noubani. 

With Isuzu’s support and Qudra’s market activity, he said he expects Isuzu to “take a leading position in Jordan… by the end of 2018, or early 2019”.

The region accounts for 17 per cent of Isuzu’s global business, featuring two knock-down kit assembly facilities for the Saudi and Egyptian markets, however, Noubani believes that is still further scope for expansion in the Middle East, and Syria, in particular. 

Hopeful that a resolution to the Syrian conflict comes through “within the next 12 months”, Noubani said “Syria is a big country, and needs huge infrastructure investments, so we see a lot of growth coming our way,” adding that he is confident that the opening of Jordanian borders with Syria and Iraq will help the Jordanian economy.

Noubani also highlighted Isuzu’s drive towards greater efficiency, including Compressed Natural Gas powered vehicles (CNG) and hybrid models, both already available in Japan. “Commercial vehicles will need more time than passenger cars in terms of electrification [and that] due to the size and power, these batteries would need to haul over 10-tonnes,” he elaborated. 

Producing less pollutants than petrol- and diesel-powered vehicles CNG trucks are already in service in Japan, with plans afoot to introduce such vehicles to the UAE which is “the leader in CNG infrastructure” in the region with CNG available more regularly at filling stations. 

Asked whether Isuzu will be looking to introduce CNG to other Middle East countries, Noubani said that Isuzu will “start lobbying government officials, country by country. We’ve already started with the UAE, and other countries will follow shortly.”

Noubani said that Isuzu has been consulting local dealers about what they want to introduce and are “working hand-in-hand with them, and… are also relying on our local dealers in each country to lobby government officials to start building infrastructure”. 

In the case of Jordan, where hybrid and electric vehicles already benefit from government incentives in terms of duties and partnerships, he underscored Qudra’s position, adding that “they have over 27 per cent market share in the automotive segment. as a whole,” as part of a wider automotive import network.

In addition to CNG, hybrids and an electric prototype, Isuzu offers an Eco-drive seminar to fleet operator drivers. 

CAIRO — As Egypt’s mobile operators thrive, state-owned Telecom Egypt is entering the market in an effort to boost state revenues.

In a country with more mobile phone subscriptions than residents, Egypt’s only fixed-line operator is hoping to get in on the action with its new mobile service, WE.

But some established players say they fear the state-owned firm, which already owns 45 per cent of top existing operator Vodafone Egypt, will enjoy unfair advantages.

Egypt, with around 96 million residents, had nearly 100 million mobile subscriptions in 2016, according to a July report by the National Telecom Regulatory Authority.

That compares with fewer than 10 million subscriptions for land lines and DSL phone line-based internet services.

As the mobile sector booms, Telecom Egypt’s entry into the market aims to introduce competition, the NTRA said in a report.

That could upgrade “the quality of services provided... at more affordable prices”, it said, adding that it hoped to boost state revenues and create new jobs.

Within a month of its September launch, WE has attracted a million customers. But its polished advertisements may not be the only reason for its success.

It entered the sector at an opportune time, the same month as the official launch of 4G mobile internet services, repeatedly delayed by the government.

Also in September, the NTRA announced it would enforce a 30 per cent increase in prices for mobile services — from which Telecom Egypt’s offering would be exempt.

While the price hike was sudden, it met repeated demands by Vodafone, Orange, and Etisalat, which have objected to being forced to freeze prices despite 30 per cent inflation as the Egyptian pound dived against the dollar following its flotation in November 2016.

Temporary privileges

But some fear Telecom Egypt’s exemption from the hike may be part of a broader pattern of unfair privileges.

Orange Egypt has invested some 15 billion pounds (around 730 million euros, $850 million) in its 4G services.

“It is a big responsibility for the government to ensure that competition regulations are implemented in an equitable manner,” said Jean-Marc Harion, Orange Egypt’s chief executive officer.

Such rules “have not always been respected in the field of telecoms”, he said.

But Telecom Egypt says its entry into the mobile market was inevitable and should not be surprising in the age of smart phones.

“It’s a matter of life and death,” said CEO Ahmed El Beheiry.

“Over time people will give up on fixed internet and move to the mobile.”

Critics have argued that Telecom Egypt’s ownership of 45 per cent of Vodafone Egypt constitutes a conflict of interest.

But Beheiry denied any government favouritism towards his firm, adding that its rivals are anything but “weak, small players”. 

“There is no more difficult terrain than this in which we are entering,” he said.

Telecom Egypt argues that its countrywide landline and DSL coverage is a major asset.

But analyst Ahmed Adel of the investment bank Beltone Financial said the firm’s landline monopoly constitutes “a big challenge because of the number of complaints over the quality of these fixed services”.

Telecom Egypt currently relies on Etisalat Misr’s mobile network as it develops its own.

The company will eventually have to show “its ability to acquire a market share in the absence of any operational advantage”, he added.

Mostafa Abdel-Wahed, regulator NTRA’s executive chairman, did not respond to repeated requests for an interview.

In an emailed response to questions, the NTRA said “the entry of the fourth mobile operator helps to increase competition between companies to benefit the citizens in terms of quality of services and prices”.

It added that it “treats all companies equally without distinction”.

AMMAN — His Majesty King Abdullah met on Tuesday with a delegation, comprising executives of Japan’s Toshiba Corporation, specialised in manufacturing flash memory chips, according to the Jordan News Agency, Petra. 

The visiting delegation is participating in the World Science Forum 2017, held at the shores of the Dead Sea. 

At the meeting, the company’s representatives expressed their business intention to extend training to promising and qualified Jordanians as they reviewed the Kingdom’s recourses, including human resources and favourable investment environment in the field of information and communications technology (ICT), transforming the country into a regional ICT hub. 

The meeting also addressed the Kingdom’s plans to expand the sector. Yesterday’s meeting was attended by the King’s Office Director Jaafar Hassan and Japan’s Ambassador to Jordan Shuichi Sakurai. 

The World Science Forum 2017, which will run through November 11, began on Monday under the title “Science for Peace”. The five-day event, which is the largest scientific event in the region, held at the King Hussein Bin Talal Convention Centre at the Dead Sea, seeks to address the challenges of growth, stability and world peace. The forum was first established in Hungary in 2003, in cooperation with UNESCO.