Business

PARIS — Airbus is set to post an 8 per cent rise in deliveries for 2016, beating expectations, after a sprint to the finish line that narrowed the gap with arch-rival Boeing, according to industry experts and records of aircraft movements.

The European planemaker was forced to sharply accelerate deliveries in December to meet its target after production problems earlier in the year.

It delivered over 100 jets last month, a Reuters analysis of flight-tracking data supplied by FlightRadar24, unofficial airport data and plane-watcher reports suggests, lifting its 2016 tally well above 680 including 60 of the delayed A320neo.

One industry expert estimated the total as high as 688, well above the company's informal target of more than 670.

Airbus remains in second place behind Boeing, but its upward trajectory contrasts with the 2 per cent drop in 2016 deliveries reported by its US nemesis last week, to 748 planes.

The higher-than-expected Airbus performance, up from 635 in 2015, is also the latest evidence that planemakers are boosting deliveries to whittle down record order backlogs and hoard cash as they face warnings of slowing demand later this decade.

Boeing temporarily slowed output last year for industrial reasons but, like Airbus, plans further output increases.

An Airbus spokesman declined to comment.

The European planemaker is keeping operational data tightly under wraps ahead of its annual news conference on Wednesday.

Airbus's December deliveries would set a monthly record for the company, beating the previous peak by more than a quarter.

The gap between Christmas and New Year, traditionally a groggy period for European industry, saw a record burst of activity at Airbus plants in France and Germany and included one of its busiest ever days with eight jets flying away on December 29.

"I was amazed," said a veteran of such operations.

Aiming to stay ahead of Boeing in the race for new orders, rather than deliveries where it lags, Airbus may book for December at least part of a recent order for 100 jets from Iran and tie up loose ends including completing a deal with India's GoAir. It may also announce a significant order from Saudi carrier flynas.

Airbus needs to announce at least 259 orders for December to beat Boeing's 2016 total of 668. With outspoken sales chief John Leahy expected to retire in the second half of this year, Airbus is looking to end 2016 with a flourish, though analysts say prices could suffer due to weakening global economies.

Cash generation 

Airbus delivered at least 70 A320-family narrow-body jets in December, according to the sources and data, also a record. These included at least 17 of the new A320neo, whose ramp-up had been disrupted by delays in receiving new fuel-saving engines from Pratt & Whitney.

That brought 2016 deliveries of narrow-body jets — the most cash-generating models — to over 540. It also delivered more than 140 wide-bodies.

Airbus expected to deliver more than 670 aircraft in 2016, unofficially revised up from 650 in October. It is accelerating deliveries of the existing A320 to keep cash pouring in from airlines while it adopts a more conservative timeframe for the switchover to the A320neo.

Narrow-body deliveries generate cash for other developments and are increasingly vital as demand for larger wide-body aircraft suffers from a looming capacity glut.

Experts say the delays in A320neo deliveries have masked some pressure on demand for those models too, caused by low oil prices that can make earlier versions just as attractive.

On its other main profit-driver, Airbus delivered over 62 long-haul A330s in 2016, according to the estimates.

But it was forced to step up customer financing to maintain that pace as major customer Turkey faced turmoil after a failed coup and as European states withheld export credits in a row over Airbus payments to sales agents.

Airbus itself provided the financing for all seven new Turkish Airlines A330s in 2016, industry sources say.

Despite separate delays due to shortages of cabin equipment, Airbus unexpectedly hit a target for at least 50 deliveries of the newer A350 after 16 in December, sources said last week. That includes one or two jets paid for but not yet in operation.

The rush to get planes away extended to the mammoth A380 as Airbus delivered seven in December, including three in two days to dominant customer Emirates. That brought the annual total to 28, up one from the previous year and enough to keep Europe's troubled superjumbo project at breakeven in 2016.

However, it plans to cut A380 output from next year after demand sagged for the world's largest four-engined jets.

The programme took another blow in late December when Dubai-based Emirates, under pressure from the impact of low oil prices on Gulf economies, delayed some 2017 deliveries.

That could put the iconic double-decker plane back into loss in 2017, marring celebrations for its 10 years in service.

AMMAN — The volume of trade transactions among the Agadir free trade agreement countries has failed to keep its upward trend, which continued until around 2011, the agreement's technical unit executive chief, Fakhri Hazaimeh, said on Sunday.

However, Hazaimeh voiced hope that the accord will once again lead to bringing about more favourable results in the next few years and that member states may resist the downward trend if they utilise their strengths.

In the period post-2011, trade under the agreement, which includes Jordan, has been adversely impacted by the so-called Arab Spring and the fall-out of the global financial crisis, Hazaimeh told the Jordan News Agency, Petra.

There is also a big deficit in terms of the trade balance between the accord member states and the EU, he told the local news agency.  

Hazaimeh cited the envisaged role that the agreement business council can play in assisting member states to venture into actual cooperative projects in several economic sectors. 

He also stressed the significant role that the private sector can play to boost multilateral trade under the agreement, on the one hand, and between its member states and the
EU, on the other.  

The trade volume among the agreement countries — comprising Egypt, Tunisia and Morocco, besides Jordan — annually stands at around $1.85 billion, of which the Kingdom's share amounts to around 7 per cent, he indicated.  

For around 10 years, trade transactions between Jordan and Egypt have witnessed a steady growth at 16 per cent until 2012. The joint commercial exchange volume stood at $1 billion in 2012, while it posted a drop in 2013 and 2014, mainly due to the disruption of the country’s natural gas imports from Egypt as it constituted some 40 per cent of the total trade volume, according to Hazaimeh.

As for the Kingdom's trade with Tunisia, he mentioned that it has always been limited, not exceeding $100 million at its best levels, while in terms of its trade with Morocco, the figure reached its best in 2009 when it amounted to $50 million.

SHANGHAI — China on Friday raised the exchange rate for the yuan against the US dollar by 0.92 per cent from the previous day, the biggest one-day increase in more than 11 years.

The People's Bank of China (PBOC), which has been battling to shore up the sagging yuan, fixed it at 6.8668 to the greenback, according to the China Foreign Exchange Trade System, which operates the national foreign exchange market.

The move comes as the yuan had flirted lately with the 7 to the dollar mark, a threshold not crossed in more than eight years. 

China only allows the tightly controlled yuan to rise or fall 2 per cent on either side of the daily fix, to prevent volatility in the currency, which is near its lowest levels in eight years.

The yuan has been under pressure from uncertainty over the health of the world's second-largest economy, massive capital outflows seeking better returns abroad, and the sharp rise in the dollar following Donald Trump's election victory and anticipation of further US interest rate hikes.

The exchange rate hike was expected by many analysts after a two-day rally in the yuan in offshore trading that sparked speculation of official Chinese intervention in support of the yuan.

"Judging from the speed of the yuan's appreciation, the PBOC may have intervened to prop up the exchange rate," Kenix Lai, a Hong Kong-based foreign-exchange analyst at Bank of East Asia Ltd., told Bloomberg News. 

"The PBOC is expressing its strong determination to keep the currency stable and is seeking to restore confidence."

China said last week it would almost double the number of foreign currencies it uses to determine the yuan's official value, thereby diluting the dollar's role, and has imposed a range of measures to curb capital flight abroad.

The equivalent of about one trillion dollars was transferred out of China in 2015 and another $690 billion in the first ten months of 2016, according to Bloomberg estimates. 

AMMAN — The Amman Stock Exchange (ASE) will soon become a public shareholding corporation and this will help it build partnerships with regional and international stock markets, its CEO Nader Azar said on Wednesday.

Speaking at a press conference, Azar indicated that this way, the company will have a chance to diversify its sources of income and increase revenues. 

It will "easily access" funding and loans to improve its competitiveness, he told the press.

“Procedures to transform the ASE into a company will most likely be finalised by the end of this month,” he said, adding that this will be good for the economy. 

The Cabinet had approved the transformation last year.

Despite all challenges facing the country, the ASE is “doing well”, Azar conceded. 

Investors from more than 97 nationalities own shares in companies listed on the ASE, making up 50 per cent of the total investors, he said.

By the end of 2016, the ASE price index, weighted by free float shares, went up by 1.6 per cent to reach 2170.3 points compared with the previous year, the CEO indicated. 

The market capitalisation of listed shares at the ASE decreased by 3.6 per cent to JD17.3 billion; compared with 2015 closing, constituting 65 per cent of the GDP, he added.

Also, the trading value for the ASE dropped by 31.8 per cent during 2016 to JD2.3 billion compared with JD3.4 billion for the year 2015, according to the Bourse chief.

Moreover, Azar pointed out that the Amman Bourse has joined a joint project with regional exchanges that include Muscat, Beirut and Tunisia to implement a new trading system, developed by a French company. 

The system will allow for broader trading, he said. 

The Amman Bourse was established in 1999 as a non-profit institution with administrative and financial autonomy.

AMMAN — The Amman Chamber of Commerce has cooperated with the government over the past year in resolving and following up on several issues to ease the flow of business, the chamber’s President Issa Murad, who is also a senator, said on Wednesday.

Speaking in an interview with the Jordan News Agency, Petra, he said the chamber helped reduce customs fees for hybrid vehicles and facilitate dealings related to work permits for Syrians, besides organising high- level business meetings. He highlighted several events the chamber hosted last year to provide a platform for discussing various issues, including agriculture, healthcare, bourses and modern challenges, according to Petra. 

RAMALLAH, West Bank — Foreign financial support to the Palestinian budget is running at about half the forecast level, the Palestinian prime minister told local media on Tuesday, meaning deep cuts will have to be made to the budget this year.

At its Cabinet meeting, the government said it expected to run a budget deficit of 4.12 billion shekels in 2017 ($1.06 billion), approaching 15 per cent of the gross domestic product.

"We had expected to get $1.2 billion in [external] support and offers but we have only received $640 million so far," Prime Minister Rami Al Hamdallah told Al Quds newspaper.

Saudi Arabia has in the past been a reliable supporter of the Palestinians, as have the United Arab Emirates and Turkey, but it has cut back its contributions sharply in recent months.

Normally, Saudi Arabia pays about $20 million a month into the budget, but it stopped making regular contributions last April, in part to apply pressure on President Mahmoud Abbas to implement political changes.

The European Union and the United States have also reduced direct budget support, preferring instead to fund development programmes that target
specific areas.

The Cabinet statement said the total shortfall in foreign funding was forecast to be $765 million in 2017, which will put pressure on government departments to cut costs.

"Such a decline compels us to adopt an austerity policy in all fields," the statement said.

More than half of all spending — 55 per cent — goes on salaries and wages for the Palestinian Authority's 156,000 state employees, from teachers and doctors to police and public security staff, according to the finance ministry's 2016 budget.

While the economy in the Israeli-occupied West Bank and Gaza grew by about 1.5 per cent in 2015, the last full figures available, unemployment continued to rise, standing at 27.4 per cent overall — 18.7 per cent in the West Bank and 42.7 per cent in Gaza, the ministry said.

AMMAN — The country’s gross domestic product (GDP) grew by 1.8 per cent during the third quarter of 2016 compared to the figure recorded in the same period of the previous year due to better performance by several service sectors.

The Department of Statistics (DoS) report indicated that most economic sectors reflected positive growth in 2016’s third quarter, compared to the same period of 2015, the Jordan News Agency, Petra, reported on Tuesday.

The electricity and water sector registered the highest growth, totalling 6.3 per cent at fixed market prices, followed by the finance, insurance, real estate and business service sectors at 4.2 per cent. 

LONDON — Eurozone stocks opened 2017 by climbing to their highest in more than a year on Monday after data showed manufacturers in the currency bloc ramped up activity at the fastest pace in more than five years.

With all of Asia's major markets closed for the New Year holiday — along with Britain and Switzerland in Europe — trade was thin, which could cause some volatility. The United States and Canada markets were also closed.

The eurozone's blue-chip Euro STOXX 50 index rose half a per cent to its highest since December 2015 after the purchasing managers' index (PMI) for factories in the currency bloc came in at 54.9 — well above the 50 mark that separates growth from contraction.

The euro, though, took no comfort from the figures, slipping 0.4 per cent back below $1.05 after climbing to as high as $1.07 during a flash surge in low trading volumes in Asia on Friday.

Analysts said the fall was mainly due to a resumption of an up-trend in the greenback that saw it surge to 14-year highs in December on the view the US Federal Reserve will hike rates as many as three times this year, and that Donald Trump's administration will stoke growth and inflation with a programme of fiscal expansion.

The dollar index — which measures the greenback against six major rivals — climbed half a per cent, having hit a two-week-low on Friday.

"In the last days of 2016 we saw the dollar retreat somewhat, and there might be some sense of a correction from Europe this morning. I don't see any fundamental drivers for the moves," said Commerzbank currency strategist Esther Reichelt, in Frankfurt.

Italy's top share index hit its highest level since January last year, outperforming other major European stock indexes, with a rally in its banks and a strong manufacturing report improving sentiment.

Italy's FTSE MIB index was up 1.5 per cent by 1215 GMT at its highest level since January 15 of 2016. Germany's DAX was up 0.9 per cent at its highest in nearly 17 months, while France's CAC was up 0.5 per cent at a 13-month peak.

As European stocks climbed, a rally in risk appetite also pushed down the yields on lower-rated government bonds in the eurozone to multi-week lows. Italian, Spanish and Portuguese 10-year bond yields were down roughly 8 basis points each on the day.

Terrorist attacks

A gun attack in Istanbul that killed 39 people was seen having little impact on markets, with the Japanese yen — traditionally used as a safe haven — falling 0.3 against the dollar, close to an 11-month low.

The Deash terror group claimed responsibility on Monday for the New Year's Day mass shooting, which was carried out by a lone gunman in a packed nightclub in the Turkish city.

A separate Daesh attack in Baghdad killed 24 people on Monday.

"After all the big political shocks last year and muted market reaction, it is tempting to argue that the markets are very resilient," said Finland-based Nordea Chief Market Strategist Jan Von Gerich.

"I would say this is too optimistic an assumption and I think we will see more volatility this year."

The Turkish lira slipped half a per cent after the attack to 3.5440 per dollar, close to a record low of 3.5840 the lira touched in December.

"The problem is that this once again stresses the increasing instability and the security issues, and we're seeing tourist numbers going down, which will have a lasting negative impact on the Turkish economy... and that's Turkish lira-negative," said Commerzbank's Reichelt.

Data released earlier in the day showed China's manufacturing sector expanded for a fifth month in December, though growth slowed a touch more than expected in a sign that government measures to rein in soaring asset prices are starting to have a knock-on effect on the broader economy.

The Chinese yuan suffered its biggest annual loss in more than 20 years in 2016, with an almost 7 per cent fall making it the worst-performing currency in Asia.

Digital currency bitcoin started the year by jumping above $1,000 for the first time since late 2013.

BEIJING — Taiwan tech-giant Foxconn plans to build an $8.8-billion factory in China, state media said Saturday, amid reports its billionaire boss is cooling off on future US investments.

Foxconn, a major Apple supplier, will spend the vast sum on an industrial complex in the sprawling southern city of Guangzhou.

The factory will make large-screen liquid crystal displays (LCD), the firm said at an event in the Chinese city on Friday. It will be operational by 2019.

"We have in China a government that knows how to be efficient and supports new technology," said Foxconn President Terry Gou in an interview with China's 21st Century Business.

"As to whether we'll invest in the US in the future I've no idea. As a matter of fact, the new administration isn't in office and its new policies aren't in place," Gou added.

Foxconn employs around a million workers at its factories across China and has operations in more than 10 countries.

In the US, it has a plant in Virginia for packaging and engineering which employs over 400 people. 

Earlier this month Foxconn confirmed it was in talks over a new US investment, while Japanese telecom giant SoftBank shares soared after President-elect Donald Trump unveiled a $50 billion deal with the two firms.

Trump announced the agreement — which he said would bring 50,000 jobs — in the lobby of Trump Tower in New York.

Gou said he would only divulge details after discussions with relevant US authorities, but made no mention of it during the factory announcement Friday.

The Guangzhou plant will be jointly run by Foxconn and Japan electronics firm Sharp, which Foxconn has a 66 per cent stake in.

DUBAI — Dubai-based port operator DP World said Thursday it has acquired an additional 23.94 per cent stake in South Korea’s Pusan NewPort Company (PNC), giving it a majority shareholding.

The purchase from Samsung Corporation brings to 66.03 per cent DP World’s stake in PNC, which operates the largest terminal at the port of Pusan, the company said in a statement.

“We expect the port of Pusan to remain an important part of our global network and this investment further underlines our commitment to South Korea,” DP World Chairman Sultan Ahmed Bin Sulayem said in the statement. 

PNC is a joint venture led by DP World together with Samsung, Hanjin Heavy Industries and Construction and a number of other Korean construction companies.

It commenced operations in 2006.

The port is situated on the southeastern tip of the Korean Peninsula and is South Korea’s leading port city and gateway to the Pacific Ocean.

DP World operates 77 marine and inland terminals across six continents, with container handling being its core business.

In 2015, it shipped 61.7 million TEU, 20-foot equivalent units used to measure containers, across its portfolio.