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DUBAI/DOHA — Qatar's central bank has asked commercial banks to provide it with detailed information on foreign exchange trading; banking sources told Reuters on Thursday as Doha's diplomatic rift with other Gulf countries put its currency under pressure.

The riyal hit an 11-year low of 3.6530 to the dollar late on Wednesday after Standard & Poor's (S&P) cut Qatar's credit rating, citing this week's decision by Saudi Arabia and the United Arab Emirates to sever diplomatic and transport ties with Doha.

The dispute, over Saudi and UAE charges that Doha supports terrorism, triggered outflows of capital from Qatar which, if they persist, could eventually make it harder for authorities to maintain the riyal's peg of 3.64 to the dollar. 

The central bank's move to gather data on the currency market was in response to this concern, Qatari commercial bankers said.

"We now consider risks to external financing lines to the whole economy, including foreign direct investment, portfolio flows and to the financial sector, to be elevated, and this could lead to pressure on Qatar's pegged monetary arrangement," said S&P.

The sources said banks in Qatar were asked to provide daily information on their foreign exchange trading, a daily statement of withdrawals and transfers from deposits worth at least 10 million Saudi riyals ($2.7 million), and daily data on cash withdrawals and deposits.

Previously, banks were generally required to provide such information monthly.

The central bank also asked banks to supply on a weekly basis a breakdown of their customer deposits by maturity and type from Gulf Cooperation Council countries, Egypt and other countries, the sources said. The central bank did not respond to requests for comment.

The riyal rebounded to trade much closer to its peg in the spot market on Thursday; some traders said the central bank was supplying dollars to banks which wanted to close out their riyal positions, in order to avoid downward pressure on the currency.

"There's some stress in the Qatari riyal currency market but it's too early to talk about pressure on the Qatari peg," said a UAE treasury banker, who like most bankers declined to be named because of political sensitivities.

S&P estimated the government's liquid external assets were worth 170 per cent of gross domestic product, a massive amount equivalent to nearly 10 years of the country's imports — a much higher degree of backing for its currency than most countries. 

Tension

Nevertheless, there were other signs of tension in Qatari financial markets on Thursday. The riyal remained under pressure in the offshore forwards market, which banks use to hedge against future moves in the currency.

The cost of buying insurance against a Qatari sovereign debt default hit a seven-month high, and the cost of borrowing three-month riyal funds in the interbank market jumped to 2.16 per cent, the highest in at least several years — a sign nervous banks were holding back funds.

A major source of capital outflows from Qatar so far has been the stock market, which plunged 9.7 per cent over three days before partially rebounding on Thursday. Some foreign portfolio managers sold stocks and sent the proceeds home. In addition, some banks in Saudi Arabia and the UAE are closing out Qatari riyal long positions and offloading part of their riyal assets to reduce their risk. 

While Riyadh has told its banks it does not want them to do new business with Qatari institutions, neither Saudi Arabia nor the UAE has yet clarified whether banks will be required to liquidate existing deals. Some bankers are cutting exposure now to limit the pain if they are forced into a firesale of assets.

Other banks in Saudi Arabia and the UAE have halted all transactions in the Qatari riyal, viewing them as too risky, although some remittances of money between the UAE and Qatar were continuing on Thursday, bankers said.

A much bigger threat to the Qatari riyal than outflows from the stock market is the risk of an exodus in coming weeks and months from loans and deposits provided by foreign banks to Qatari banks. Foreign liabilities of Qatari banks increased to 451 billion riyals ($124 billion) in March from 310 billion riyals at the end of 2015.

KUWAIT CITY — A Saudi-led diplomatic and economic blockade against Qatar may threaten food imports, but the tiny emirate still has a lifeline through its gas and oil exports, experts said on Tuesday.

Saudi Arabia, the UAE, Egypt, Bahrain and Yemen have suspended all diplomatic ties to gas-rich Qatar, halting flights to and from the country and ordering Qatari citizens to leave within 14 days. 

Riyadh on Monday also cut off the Qatari peninsula’s only land border, threatening the import of both fresh food and raw materials needed to complete $200 billion worth of infrastructure projects for the controversial 2022 football World Cup. 

Food imports, aviation 

“An estimated 40 per cent of all of Qatar’s food supplies are transported across Qatar’s land border with Saudi Arabia,” said Anthony Skinner of the UK-based global risk consultancy Verisk Maplecroft. 

Its closure “will force the Qatari authorities to increasingly rely on sea and air freight, thereby increasing costs and inflation”, Skinner said in a report.

Fitch Ratings said the decision to cut diplomatic and economic ties with Qatar had no immediate impact on Qatar’s “AA”/Stable sovereign rating.

But if the dispute drags on, the economic and financial implications would be more serious, the international ratings agency said.

The economic impact of the diplomatic boycott was immediately visible on Monday, as shoppers flocked to Qatar’s main supermarkets to stock up on staples despite assurances by the government that there would be no food shortages.

Qatar’s only viable alternative for food imports is via Iran and the Gulf state of Oman by sea, and via Turkey, Europe and south Asia by air. 

Also hit by the economic measures is the bustling aviation sector in the Gulf.

Saudi Arabia and its allies have banned flights to and from Qatar.

Skinner said the move would force Qatar Airways, already hit this year by US President Donald Trump’s electronics ban, to change multiple routes, thus incurring even more costs.

Although Qatar has limited trade with Gulf states, its exports to Saudi Arabia — estimated at $896 million by the UN — are now expected to evaporate.

Energy sector 

Qatar is one of the smallest Arab nations with a population of 2.4 million, only 10 per cent of whom are Qatari. 

But the emirate has one of the largest per capita incomes in the world at over $100,000.

The closure of Qatar’s land border will likely leave contractors with no choice, but to import building materials by sea, driving up prices and potentially delaying the projects, Skinner said.

But Qatar’s energy supplies will remain unaffected with secured export routes through the Strait of Hormuz to Japan and southeast Asia.

Qatar is the world’s leading LNG exporter and supplies 80 million tonnes annually by sea. Only 10 per cent of its gas exports go to Middle East states, including the UAE and Egypt.

The emirate also pumps over 600,000 barrels of oil.

“I don’t see any threat to Qatar’s energy export routes. They will continue to its main Far East customers,” Kuwaiti oil expert Kamel Al Harami told AFP.

Qatar also has around $350 billion of foreign assets invested in major international companies, including a 17 per cent stake in Volkswagen.

But Qatar’s banking sector could still feel the heat of the diplomatic crisis. 

Non-resident deposits made up 24 per cent of deposits in the country’s 18 lenders in April, according to Qatar’s central bank.

“Qatari banks, already struggling with declining cash reserves and higher interest rates, could be hard hit if Saudi Arabia and UAE opt to withdraw their foreign deposits,” said James Dorsey, senior fellow at the S. Rajaratnam School of International Studies in Singapore.

DUBAI — Qatar’s stock market plunged on Monday after Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed ties with Doha, accusing it of supporting terrorism. 

The Qatari stock index sank 7.6 per cent in the first hour of trade. Some of the market’s top blue chips were hit hardest, with Vodafone Qatar, the most heavily traded stock, sliding its 10 per cent daily limit.

Qatar National Bank, the country’s largest bank, dropped 5.7 per cent.

Saudi Arabia, the UAE and Bahrain announced the suspension of transport ties with Qatar, and gave Qatari visitors and residents two weeks to leave their borders. 

With an estimated $335 billion of assets in its sovereign wealth fund, a trade surplus of $2.7 billion in April alone and extensive port facilities which it can use instead of its land border with Saudi Arabia, which has been closed, Qatar appears likely to be able to avoid a crippling economic crisis.

The six countries in the Gulf Cooperation Council (GCC) do little merchandise trade with each other, instead relying on imports from outside the region, and Qatar’s liquefied natural gas shipments by sea are expected to continue normally.

Saudi Arabia and other GCC countries traditionally account for only about 5 to 10 per cent of daily trading on the Qatari stock market, according to exchange data.

But the diplomatic rift could have a serious impact on some business deals and companies in the region, particularly Qatar Airways, which can no longer fly to some of the Middle East’s biggest markets.

Saudi Arabia called on international companies to avoid Qatar, raising the prospect that it might try to make foreign firms choose between doing business in Qatar and obtaining access to the much bigger Saudi economy.

Talal Touqan, head of research at Abu Dhabi’s Al Ramz Capital, said it was not clear how long the dispute would last and markets could recover quickly if tensions eased.

“This is a reaction to political noise which has a direct impact on volatility — it may be short-lived and fully reversible if the political situation starts to abate,” he said.

Kunal Damle, an institutional broker at SICO Bahrain, said Qatari state funds might step in to support their market later in the day.

Other GCC stock markets also fell, with Dubai losing 0.8 per cent and Saudi Arabia falling 0.2 per cent.

CANCUN, Mexico — Top airline industry players are meeting on Monday and Tuesday in Cancun to seek alternatives to the US and British bans on laptops and tablets on certain flights, which they say is hurting business.

The computer bans are looming large over the agenda as the International Air Transport Association (IATA) holds its annual meeting in the Mexican resort city.

Alternative proposals include sniffer dogs, bomb-detection technology, increased training — anything but the ban, which IATA says is threatening the industry just as it was enjoying a boom.

With fuel prices low and 3.8 billion passengers flying last year — a figure that is expected to double in the next 20 years — “The industry is doing quite well,” said IATA’s director general, Alexandre de Juniache.

“Airlines are in the black and it’s the eighth year in a row,” he told journalists during a conference call ahead of the meeting.

But the bright financial outlook is clouded by the in-cabin ban on electronic devices larger than a cell phone on flights between the United States and 10 airports in Turkey, the Middle East and North Africa — imposed in March by President Donald Trump’s administration.

Britain has imposed a similar ban for flights from six countries.

The move came after intelligence officials learned of efforts by the Daesh terror group  to fashion a bomb into consumer electronics.

The US Department of Homeland Security then threatened to slap the same ban on flights from Europe — though it indicated on Tuesday that it has backed off the idea for now.

IATA, whose 275 member airlines represent 83 per cent of global air traffic, says the bans have already taken a toll on business. It warns that extending them to European flights would be catastrophic.

WASHINGTON — US unemployment fell to a 16-year low in May, but monthly job creation has slowed sharply in the past three months, creating a mixed picture of the labour market.

The contrasting data could muddy the waters ahead of a Federal Reserve decision on interest rates later this month.

The economy added just 138,000 net new jobs in May, well below analyst expectations, and average job creation for the last three months slowed to 121,000, after the payrolls data for April and March were cut by a combined 66,000, the Labour Department reported on Friday.

However, the jobless rate decreased by a tenth of a point to 4.3 per cent.

But while that drop looks like good news, it also reflects the fact that some workers left the labour force, with the closely-watched labour force participation rate falling 0.2 points to 62.7 per cent.

As it has done in recent months, the White House once again hailed the good news in the labour market.

White House Press Secretary Sean Spicer said the employment report showed "Americans seeking jobs are having more success finding them than at any point in the last 16 years”.

"There's a lot of positive signs coming out of the job market," he told reporters.

US President Donald Trump has vowed to add 25 million new jobs to the economy over a decade, but economists say this goal is unrealistic and the latest data may bolster that view, especially with increasing reports that firms are struggling to fill open positions.

The employment report came a day after Trump announced he was withdrawing the United States from the 2015 Paris climate agreement in a bid to preserve US jobs. 

However, analysts say the US stands to gain more by participating in the development of renewable energy. One in every 50 new jobs added in the United States in 2016 was in the solar industry.
Implications for Fed 

Jim O'Sullivan of High Frequency Economics was among those who said the weakness in job creation last month likely was due to volatility and distortions from seasonal adjustments applied to the data.

"Through the volatility, we believe the trend in employment growth remains more than strong enough to keep unemployment trending down and the trend in wage gains upward," he said in a research note.

Most analysts still expect the Fed to increase the benchmark lending rate later this month, but expectations for another increase in September could be in doubt.

The falling jobless rate may support the views of Fed policymakers who say the economy has reached full employment, but weak job creation and weak wage gains may support those who want to be cautious about removing the stimulus of low interest rates.

Elise Gould of the left-leaning Economic Policy Institute said a June rate increase by the Fed would be "unfortunate", adding that prematurely declaring full employment would be far more costly than tolerating some wage growth and price inflation.

Still, the jobless rate has fallen 0.5 percentage points since the start of the year, and anecdotal reports in the Fed's own surveys increasingly suggest employers are having difficulty finding qualified workers, which raise concerns that wages will begin to rise, possibly stoking inflation.

And layoffs are at 40-year lows, which analysts say is because companies fear they may not be able to replace workers they let go. 

Meanwhile, the time needed to fill a job is now the longest in 17 years, Nariman Behravesh of IHS Markit said.

"Companies may be taking a more cautious approach to hiring, not because they are worried about sales, but because they are trying to assess whether the president and Congress will be successful in passing pro-growth policies," Behravesh wrote in a client note.
 Tepid wage gains 

Despite steady hiring, low unemployment and reports that firms are having difficulty filling positions, wage gains have been tepid.

Average hourly earnings rose 0.2 per cent for the month, and are up 2.5 per cent for the year, but this more or less keeps pace with inflation, with the Consumer Price Index for urban consumers up 2.2 per cent over the 12-month period. 

Job creation in the healthcare sector continued, with 24,000 new positions added. The mining sector, which includes oil and gas, added 7,000 positions and restaurants and bars gained another 30,000 new employees.

But some sectors were shedding positions, with the struggling retail sector employing 6,100 fewer workers, and automakers losing 1,500, amid declining new car sales.

Total manufacturing employment fell by 1,000 in the month.

RIYADH — Saudi Aramco is to build the region's biggest shipyard in a $5.2 billion joint venture with South Korea's Hyundai Heavy Industries and others, the partners said on Wednesday.

The yard, to be constructed on the kingdom's Gulf coast, will have the capacity to produce four offshore rigs and 40 vessels, including three supertankers, a year, the state-owned oil giant said in a statement.

Lamprell, a United Arab Emirates-based provider of services to the energy industry, and Bahri, the National Shipping Company of Saudi Arabia, have also signed on to the venture.

"The integrated maritime yard will be the largest in the region in terms of production capacity and scale," Saudi Aramco said.

Located in the new industrial port city of Ras Al Khair, the yard will also provide maintenance services for rigs and vessels.

"Major production operations are expected to commence in 2019," with full capacity reached by 2022, Aramco said.

In a separate statement, Lamprell Plc. said the yard will cost an estimated $5.2 billion to build, of which roughly $3.5 billion will come from the Saudi government.

The rest will be funded by the joint venture.

It said the deal was conditional on approval by its shareholders.

Saudi Arabia has launched a programme to diversify its industrial base after its revenues were badly hit by a 50 per cent fall in world oil prices since 2014.

Around five per cent of Saudi Aramco is to be floated on the stock market next year to help form the world's largest state investment fund.

AMMAN — Royal Jordanian (RJ) said it achieved positive operational results during the January-April period of 2017 compared to the same period last year, according to an RJ press statement released on Wednesday.

The airlines reported a growth in the number of passengers, the seat factor and load factor of uplifted cargo. 

Royal Jordanian President/CEO Captain Suleiman Obeidat said RJ transported almost 45,000 more passengers in the first four months of 2017 compared to the number of passengers recorded in last 

year’s first four months; registering a 5 per cent increase. 

RJ aircraft carried 1.13 million passengers on scheduled and non-scheduled flights in the first four months of this year, according to the statement. 

Due to the increase in passenger numbers, the seat factor also went up. Moreover, the load factor of the uplifted cargo increased by 11 per cent on its freighters and passenger aircraft. 

Obeidat attributed the growth in passenger numbers to the efforts exerted by RJ employees to offer top ground and air services on all RJ routes, serviced by a fleet of 25 modern aircraft, seven of which are recently introduced Boeing 787s, dedicated to serve the long- and medium-range destinations.

Between January and April this year, the on-time performance went up to 81.4 per cent from 77 per cent last year. 

Since the end of last year, the commercial sector has run several marketing campaigns and promotions that greatly influenced the public all over the world. The promotional initiatives were run in parallel with the airline’s efforts to improve the RJ service and product, which the company offers for reasonable prices. A large number of RJ passengers are tourists visiting Jordan, the statement indicated. 

Expressing gratitude to all RJ employees for the positive turnaround in the operational results, Obeidat pointed out that the upcoming summer season, along with the pilgrimage flights to Mecca (Hajj and Umra)  are sure to maintain busy traffic on all RJ’s sectors.

NEW YORK — Shares of Amazon surged above $1,000 for the first time on Tuesday, marking another milestone in the rise of the American online retail giant.

Near (14:10 GMT), the company's shares were selling at $997.97, up 0.2 per cent after earlier getting as high as $1,001.20. Amazon's market capitalisation stood at about $478 billion, more than twice that of Wal-Mart Stores.

After going in public in May 1997 at $18 a share, Amazon has benefited from tectonic shifts in US technology and consumer shopping habits that are expected to continue to remake the retail industry.

The company has evolved from its origins as an online bookseller into a broad-based retailer of apparel and household staples, from electronics to sausage casing. And with its "Prime" subscription service, it also has become a creative force in Hollywood and beyond.

Amazon shares have appreciated especially rapidly over the last three years in anticipation that e-commerce will become a much bigger force in the retail sector. 

Online sales currently comprise about 8 per cent of the US retail market. Amazon alone accounts for about 43 per cent of US online sales, according to consultancy Slice Intelligence.

E-commerce is expected to grow between eight and 12 per cent this year, according to the National Retail Federation, about three times as much as the rest of the industry, which has faced massive store and mall closures. Amazon, whose revenues grew to $35.7 billion in the first quarter, also has impressed Wall Street by laying out a plan to achieve greater profitability. It is in the process of investing $1.5 billion to establish its own delivery network and lessen its dependence on shipping giants FedEx and UPS. That will help contain delivery costs, which grew 30 per cent to $1.9 billion in the first quarter. 

The surge above $1,000 a share also raises questions about whether Amazon intends to pursue a stock split. At Amazon's annual meeting a week ago, Chief Executive Jeff Bezos said the matter was under consideration.

The company had three previous stock splits, in June 1998 and in January and August 1999.

Amazon currently is the fourth biggest company by market capitalisation after Apple, Google parent Alphabet and Microsoft.

LONDON — Passengers faced a third day of disruption at Heathrow on Monday as British Airways (BA) cancelled short-haul flights after a global computer crash that unions blamed on the outsourcing of IT services to India.

The embattled airline said it was cancelling 13 short-haul flights from Heathrow Airport, Europe’s busiest, but was aiming to operate a full long-haul schedule from the hub and was operating a full service from Gatwick Airport.

Tens of thousands of passengers were left stranded over a busy holiday weekend in Britain after BA scrapped hundreds of flights worldwide.

The knock-on effects could continue for several days.

The airline urged passengers on Monday to check their flight status online before travelling to the airport in a bid to avoid scenes seen over the weekend when people camped out at Heathrow overnight.

BA Chief Executive Alex Cruz told the BBC he would not resign over the disruption and said it had nothing to do with cutting costs.

He said it had been caused by a power surge that had “only lasted a few minutes” but the problem was that the back-up system had then not worked properly.

The GMB union, however, said the disruption “could have all been avoided” if BA had not cut hundreds of IT jobs in Britain and transferred the work to India.

The airline said it was making “good progress” on restoring normal service.

“As our IT systems move closer to full operational capacity, we will again run a full schedule at Gatwick on Monday and intend to operate a full long-haul schedule and a high proportion of our short-haul programme at Heathrow,” a spokeswoman said.

“We apologise again to customers for the frustration and inconvenience they are experiencing and thank them for their continued patience,” she said.

Cruz said that 75,000 passengers had been affected.

“We know that there have been holidays interrupted and personal events that have been interrupted and people waiting in queues for a really long time,” he told Sky News.

“We absolutely profusely apologise for that and we are absolutely committed to provide and abide by the compensation rules that are currently in place.”

Shares dropping

Some British media suggested on Monday that BA could be hit with a bill of more than £100 million (115 million euros, $128 million) for compensation costs for stranded passengers’ food and accommodation.

BA cancelled all its flights out of Heathrow and Gatwick on Saturday after the IT failure, which shut down all of the carrier’s check-in and operational systems and affected call centres and its website.

Passengers were asked to contact BA to locate their luggage, after many were forced to leave Heathrow without claiming their bags in chaotic scenes that saw queues snaking out of the airports.

BA’s outage came on a busy weekend in Britain, where Monday is a public holiday and many schoolchildren are beginning a week’s holiday.

British Airways has suffered other IT glitches recently, leading to severe delays for passengers in July and September last year.

IAG, the parent group of British Airways and Spanish carrier Iberia, earlier this month reported a 74-per cent slump in first-quarter net profit to 27 million euros ($30 million), due in large part to a weak pound.

Shares in IAG on the Madrid stock exchange are currently trading down by about 2.5 per cent.

AMMAN — Jordan Securities Commission (JSC) on Monday urged investors and financial service companies to offer their views and suggestions pertaining to a recently prepared draft by-law on mutual investment funds, according to a JSC statement. 

A mutual fund is an investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

Opinions or any remarks can be sent within a period of two weeks from its publication on the commission’s website to the following email: [email protected] or by fax at the following number (06-5686830), the statement said, pointing out that the commission reviewed regulations governing mutual investment funds in regional and world countries to make sure that the draft by-law is compatible with international practices. 

The bill defines the parties allowed to establish investment funds, and stipulates that the minimum capital of funds must be no less than JD2 million instead of JD500,000.