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CAIRO/ABU DHABI — Cairo grocer Bakr Atef has stopped selling sugar since authorities seized his stocks last month, accusing him of hoarding as a growing economic crisis angers Egyptians and raises fears of street protests.

"They are coming and taking any quantity they find. Even if you are selling just 10 kilos, they'll take it... if they do this again and I lose my goods, it will shut my shop," said Atef, who insists he has done nothing wrong.

Egyptians love sugar, heaping large spoonfuls into their cups of tea. It is sold in government supermarkets as part of a massive food aid programme for the poor.

But public uproar over sugar shortages has prompted the government to sweep the country, confiscating supplies from businesses it accuses of hoarding.

Sugar is the latest vital commodity to be thrown into crisis in Egypt this year. A row over regulations left the world's biggest wheat importing nation unable to obtain the supplies it needed on the global market, while a dispute over prices caused a shortage of rice despite a bumper crop.

The sugar crisis raises questions about President Abdel Fattah Al Sisi's management of the economy just as his government seeks to secure a $12 billion loan from the IMF.

More austerity is expected as a condition for the loan, on top of tax and price increases, raising fears of a repeat of the street protests that drove two of Sisi's predecessors from office. A currency crisis has cut imports and caused large areas of business to seize up.

The sugar raids came to a head when authorities briefly seized 2,000 tonnes at confectionery maker Edita, one of the largest companies listed on the Egyptian stock exchange.

But while a shortage of dollars has reduced imports generally, traders and grocers say the sugar crisis was self-inflicted — the direct result of the state's takeover of their sugar reserves and distribution network earlier this year.

Traders say that despite ample supplies in its warehouses the government is simply not getting the sugar out to the stores where ordinary Egyptians can buy it.

"The government suspects the traders of hoarding but it is actually the government that is hoarding the stocks," a Middle East sugar trader told Reuters.

Egypt consumes 3 million tonnes of sugar a year but produces just over 2 million tonnes, with the gap filled by government and private imports usually purchased between July and October.

Traders say the crisis began in August, when the supply ministry raided sugar factories nationwide and seized 250,000 tonnes — most of the reserves held by the private sector — to secure supplies for its subsidised food outlets after failing to procure its usual shipments on time.

That coincided with high prices on the international sugar market while a rapid fall in the Egyptian pound and a 20 percent import tariff to protect local producers discouraged private importers from buying in the usual quantities.

With private sector imports low and stocks under government control, prices shot up, shelves went bare, and talk of a crisis dominated local media ahead of calls for a protest on November 11 over deteriorating economic conditions.

Speaking in parliament this week, Supply Minister Mohamed Ali Meselhy said the government had responded to the crisis by increasing the amount of sugar sold at its outlets to 240,000 tonnes in October from 70,000 normally.

But merchants say this is not enough, because the government is not releasing the sugar it seized from the private sector in August and is stepping up its confiscatory raids.

Atef, the Cairo grocer, had just 350 kilogrammes at his supermarket when government inspectors took it all away.

When he produced receipts showing his sugar was obtained legally, prosecutors told him the goods would not be returned but he would be reimbursed at half the price he had paid.

Fearing further raids, merchants and retailers like Atef are no longer buying sugar, which makes the supply squeeze worse.

Frozen supply chain

Atef is at the tail end of a sugar supply chain that traders say has been badly disrupted by the intervention of a government keen to show it is protecting consumers from exploitation by self-serving merchants.

Though the government has now ramped up its own imports — buying 250,000 tonnes to meet demand for sugar sold at government outlets — the supplies seized from the private sector remain in its hands.

The supply ministry has taken on a new role controlling the sugar distribution network, allocating stocks to food producers, supermarkets, and outlets across the country, and cutting out private sector distributors.

Traders say the new system is highly inefficient and has caused more shortages.

"It's as if you are selling bottled water to all of Egypt from one warehouse — how will it go to Siwa and Aswan and Luxor?" an Egypt-based sugar trader said.

"Before there were distribution channels that functioned very well, but now the government is doing it, and it's a complete failure."

The supply ministry has blamed smuggling for the continuing shortage. It raised the price of sugar at its outlets to 7 pounds from 5 pounds per kilo to counter such activity.

The ministry has meanwhile dispatched inspectors to seize sugar it says has leaked from subsidised outlets and been re-sold at a mark-up, leaving the private market wary that any remaining stocks will be seized.

The government pressure comes despite Egypt enjoying overall stocks of about 650,000 tonnes, the second sugar trader said, or nearly enough to satisfy both private and public sector needs until the local harvest in February.

"There is enough sugar in government stocks ... enough to resolve the crisis," said Ahmed Wakil, head of one of the country's largest commodity supply companies, who has urged the government to release all seized stocks.

"But the current distribution system is creating the problem. If they return to the old distribution channels, this will be resolved."

ZHUHAI, China — Aerospace giants Boeing and Airbus took potshots at one another at the Zhuhai Air Show, as the US and European rivals seek to capture more of China’s booming aircraft market.

China is one of the Western manufacturers’ key battlegrounds, with its travellers taking to the skies in ever-growing numbers.

The country’s airlines will need nearly 6,000 new planes worth $945 billion over the next two decades, Airbus said in its 2016-2035 Global Market Forecast. 

Boeing’s expectations are even more optimistic, for 6,800 aircraft costing $1 trillion.

To win favour locally both have built partnerships with Chinese firms.

Airbus has a completion and delivery centre in Tianjin, where workers install furnishings and apply paint to aircraft for the domestic market. It also buys parts such as exit doors, brake blades and wing sections from Chinese suppliers.

Boeing is planning to open a facility with the state-owned Commercial Aircraft Corp. of China (COMAC) to paint and install cabins for 737-model planes, the Chinese firm said.

Eric Chen, the president of Airbus China, dismissed the Seattle firm’s plan as “close to one generation” behind his own firm, saying it was following Airbus’ strategy “with a lot of reluctance”.

“I got two impressions,” he said at a briefing at the China Airshow in Zhuhai, the industry’s biggest event in the country. “First one, the decision we made 10 years ago was right. The second impression is that we are well in advance of our competitor.”

Darren Hulst, the managing director for Northeast Asia marketing at Boeing, earlier told reporters that the Airbus A350 fell short of the 787 widebody plane in range, capacity, carbon emissions, window size and aerodynamics.

“The 787 is capable and has technology and features built into it that are not available on the A350, which was obviously introduced later into the market,” he said.

He added the company had 14 China deliveries of 787-9s in 2016 and had secured orders and commitments for 46 more.

Future rivals 

While the two megafirms see a sunny future in China, homegrown competitors backed by Beijing aim to beat them at home — and ultimately abroad. 

Chinese authorities have urged companies to acquire technology and skills in a range of high-value sectors including aerospace in the “Made in China 2025” plan.

At the same time as it is working with both Boeing and Airbus, COMAC is developing single-aisle jets to compete with them. Its C919 narrow-body is going up against the Boeing 737 and Airbus A320 in the 160-seat segment, which the Chinese company predicts will have more than 17,000 deliveries over the next 20 years.

In Zhuhai COMAC announced that state-owned China Eastern Airlines had committed to buy 20 C919s.

In the summer COMAC’s regional jet, the 90-seat ARJ21, flew its first commercial flight after years of delays.

Boeing, Airbus and Canadian regional builder Bombardier all played down the threat of Chinese competition.

But the business climate has darkened for US and European firms in the country, with the American Chamber of Commerce in China reporting this year that more than three-quarters of survey respondents felt “less welcome” there.

Pessimism among European companies hit an all-time high in the summer, according to a European Chamber of Commerce in China report on the “increasingly hostile” business climate. 

Chinese-built planes are sure to secure market share in the country, Eric Lin, Hong Kong-based director of Asia transport research with UBS Securities, told AFP.

In the short term, he added, foreign firms have little to fear from Chinese rivals in the developed countries that are their home market.

“But after 10 years, it’s hard to say,” he noted.

China has a history of adapting foreign technology with remarkable swiftness, turning from a buyer of Russian military aircraft to a producer of advanced stealth jets in 20 years. Its high-speed rail and clean energy industries went from collaborators to competitors faster than global rivals anticipated.

Like all foreign firms with valuable intellectual property operating in China, the aerospace giants understand the risks of training their future rivals, said Christopher Balding, professor of economics at Peking University’s HSBC Business School.

But they are stuck between a rock and a hard place, he added, because shareholders want them to fight for Chinese market share.

“Even if they don’t come to China, there’s a good chance that if they are doing anything innovative it’s going to get stolen anyway, so the only thing they are doing is harming their revenue.”

RIYADH — The global oil market should be balanced early next year, the president of Saudi Aramco said on Tuesday, after over-supply drove prices to multi-year lows in 2016.

“The gap between supply and demand is closing,” Amin Nasser told an international energy forum. He said the state oil company’s analysis sees the market “balanced by the first half of 2017”.

Last week, the chief of the International Energy Agency (IEA) said the market would rebalance earlier than expected if major crude producers implement a deal to cap output when they meet next month.

Under current conditions, the IEA expects global output to exceed demand until the second half of 2017, Fatih Birol said in Singapore.

But he said that if OPEC and non-OPEC producers intervene in the markets, “this rebalance can be earlier than the second half of 2017”.

In a surprise move, members of the Organisation of the Petroleum Exporting Countries led by Saudi Arabia agreed in September on a deal to trim production.

Meanwhile, Nigeria’s President Muhammadu Buhari met on Tuesday  with leaders from the Niger Delta and representatives of militant groups who have been attacking oil facilities in the region.

This is Buhari’s first meeting with Delta leaders since militants started a wave of attacks on oil pipelines earlier this year to get a greater share of oil revenues.

The attacks in Nigeria, an OPEC member, put four key export streams under force majeure, and led production to plunge to just 1.37 million barrels per day in May. 

This has been the lowest level since July 1988, according to the International Energy Agency, from 2.2 million barrels in January 2016.

RIYADH — The Saudi energy minister said Tuesday that a multibillion-dollar technology investment fund the kingdom is developing in partnership with Japan’s SoftBank showed its determination to diversify its economy.

Khaled Al Falih told an international forum that the proposed new fund “is simply one indication of this determination and the bold steps being taken” to reorient the economy of the world’s biggest oil exporter.

Since 2014, global oil prices have collapsed by about half, accelerating Saudi efforts to move away from petroleum, which still accounts for the bulk of government income.

Falih told the KAPSARC Energy Dialogue that in the past the kingdom had not implemented diversification policies “as efficiently as we should have”.

Vision 2030 — a wide-ranging plan released in April — was a “proactive response” to build a diversified economy led by the private sector and with international investments providing alternative revenue sources, he said.

At the heart of the Vision is a plan to float less than 5 per cent of the state oil company, Saudi Aramco, on the stock market to help create the world’s biggest state investment fund.

Under the non-binding agreement reached with SoftBank in October, the kingdom’s contribution to the new fund could reach $45 billion. 

SoftBank said it hoped to raise up to $100 billion for the fund designed to invest in promising technology firms.

Although Saudi Arabia wants to seize opportunities in a world that will be increasingly technology intensive, Falih said the kingdom would not reduce the contribution of its traditional pillars of oil and gas, petrochemicals and mining.

It will rather be “enhancing the development of other industrial and economic sectors to rebalance and accelerate the growth of the overall economy”.

The kingdom projects a budget deficit of $87 billion this year.

It has taken a series of austerity measures, including subsidy cuts, salary reductions and delays in major projects.

Two weeks ago, the kingdom’s first international bond issue raised $17.5 billion.

On Monday night, Saudi Arabia’s King Salman Bin Abdul Aziz, 80, sacked veteran Finance Minister Ibrahim Al Assaf, 67, who supervised the successful bond offering.

He is the latest long-serving minister replaced in a government where Salman’s son, Deputy Crown Prince Mohammed Bin Salman, 31, wields unusual power and symbolises the potential of youth in a kingdom where more than half of Saudi citizens are aged under 25.

London-based analysts at Capital Economics said they do not think Assaf’s dismissal signals a change in the government’s approach to lower oil prices.

“The new finance minister, Mohammed Aljadaan, is generally considered to be a reformer within the government and a close ally” of Prince Mohammed, Capital Economics said.

Aljadaan headed the kingdom’s stock market regulator and supervised the bourse’s opening last year to foreign investors.

CAIRO — Business is grinding to a near-halt in Egypt as companies struggle to keep pace with a rapid slide in the black market value of the pound. Factories are halting production, shops are running low on stocks and a sense of panic is spreading.

Bassem Hussein, whose company imports, processes and packages coffee and spices, stopped buying two weeks ago as the depreciation of the Egyptian currency gathered pace. His goods are still on sale at supermarkets but no more stock is on the way for now.

"No one knows what is happening. We stopped buying and selling two weeks ago. We're only doing retail," said Hussein, a manager at family-run Interfood. "It's not logical and it's not just us, it's all merchants."

The Egyptian pound has been falling on the black market since the 2011 revolution drove away tourists and foreign investors, vital sources of hard currency in an economy that relies on imports of everything from food to luxury cars.

But firms say a dramatic slide in the last few weeks has left them paralysed, unable to plan from one day to the next.

Black market traders were buying dollars at 17.5-17.85 pounds on Monday and selling them to importers at 18-18.2, representing a two-pound slide in a single week and five-pound slide on the month.

The pound is now worth half as much on the black market as it is in the banks, where the official rate remains fixed at 8.8 but where dollar supplies are strictly rationed.

Foreign reserves have dwindled from $36 billion before 2011 to about $19.6 billion in September, despite Egypt receiving tens of billions of dollars in aid from Gulf Arab allies.

Capital controls introduced in early 2015 to prioritise essentials such as wheat have forced importers on to the black market, where the rate has depreciated fast.

Companies have complained for nearly two years, with the dollar crisis already squeezing smaller firms out of business.

But the crisis entered new territory last week as two of Egypt's largest listed manufacturers raised the alarm.

Cigarette-maker Eastern Company warned that its raw materials stocks had halved and that it may have to halt production and sales if dollar shortages persist.

As part of efforts to slash the trade deficit it blames for distortions in the currency market, the government has raised customs duties on luxury goods and set stricter import rules.

Trade and Industry Minister Tarek Kabil has said local production rose 20 per cent this year, to substitute for imports.

But manufacturers say they rely on imported components and parts they buy with dollars obtained at black market rates.

"We used to feel it weekly, now the impact is daily. It's not just wood, it's all our materials, 50 per cent up on a month ago," said Ibrahim Hashem, who runs a furniture factory in Alexandria and buys imported wood priced in dollars.

"There is a limit... It may reach the stage where I do my calculations and find that no one will buy furniture at the price I would need to charge... It will reach the stage where no one will make or buy or sell anything."

With the budget deficit at 12 per cent in the 2015-16 fiscal year and currency markets facing severe distortions, Egypt reached a preliminary deal with the IMF in August for a $12 billion three-year loan to support an economic reform programme.

As part of those reforms, Egypt is widely expected to ditch its currency peg for a more flexible exchange rate mechanism.

Central Bank Governor Tarek Amer has said he would consider floating the pound once reserves hit $25 billion, but that target looks ambitious to some economists who say Egypt is burning through dollars as fast as it gets them.

Saudi Arabia, the UAE and the World Bank have poured about $3 billion into Egypt's coffers in recent months, but rising prices and periodic shortages of state-subsidised foods have forced the government to increase costly imports.

A dispute with its erstwhile financial backer, Saudi Arabia, saw a deal to supply Egypt with refined oil products suspended this month, adding $500 million a month to government spending.

AMMAN — Lafarge Cement Jordan sales decreased by 15 per cent in the first nine months of the year,  according to the company’s financial statements. Lafarge Jordan CEO Amr Reda attributed the decrease in sales to low demand in the local market and stated that “the company incurred an increase of JD1.2 million in environmental lawsuits expenses”.

There was a decrease in average prices of 3 per cent due to low demand and competition pressure, he added. Reda explained that the company did not record any deferred taxes for this year compared to a recorded amount of JD5.5 million last year.

KARACHI, Pakistan — China's Shanghai Electric power company will buy a controlling stake in K-Electric, a power generation and distribution company in Pakistan's largest city, for $1.77 billion, K-Electric's parent company announced in a statement on Sunday.

Dubai-based Abraaj Group said it had entered into a definitive agreement with China's state-backed Shanghai Electric to divest its 66.4 per cent stake in K-Electric .

K-Electric serves around 2.2 million customers in and around Karachi, Pakistan's largest city with a population of about 20 million. It is involved in both generation at thermal power plants and power distribution.

"Today marks a milestone in that partnership as we enter into a definitive agreement to divest our stake in a high performance business and market leader to a strategic buyer who is fully committed to continuing this success story into the future," Arif Naqvi, Abraaj's chief executive, said in a statement.

When completed, the deal will be biggest M&A agreement in Pakistan in a decade. Large parts of the Pakistani economy remain nationalised, or held by a few private businessmen, rather than diversified companies.

"The K-Electric transaction only marks the beginning of SEP's cooperation with Abraaj and we look forward to further collaboration between the two parties in many other areas in the future," Wang Yundan, Shanghai Power's chief executive, said in a statement.

Shanghai Electric announced its intention to bid for the stake in August.

Chinese companies' interest in Pakistan is growing after China announced energy and infrastructure projects worth $46 billion in the South Asian nation last year, with a view to opening a trade corridor linking western China with the Arabian Sea.

AMMAN — The Housing Bank for Trade and Finance (HBTF) increased its pretax profit by 10 per cent during the first nine months of this year as it reached JD145.2 million at the end of September compared to JD132 million at the end of the same period last year. 

HBTF also improved its profit after tax which rose by 8.1 per cent to JD100.6 million compared to JD93.1 million at the end of September last year. 

The positive figures resulted from a gross income that amounted to JD279 million compared to JD260.4 million received during the January-September period of last year, according to an HBTF statement. 

The bank’s total assets reached JD7.6 billion while its total customer deposits amounted to JD5.4 billion and its total credit portfolio stood at JD4.2 billion, according to Ihab Saadi, HBTF chief executive officer. 

The HBTF posted higher average return on shareholders’ equity “after tax” which moved up from 12 per cent to 12.9 per cent, according to the statement.

Saadi lauded the bank’s performance and stressed that HBTF succeeded in solidifying its financial standing and enhancing its business volume in all banking activities despite the regional instability that has adversely affected the Jordanian economy, according to the statement.

AMMAN — The Amman Stock Exchange (ASE) is still receiving quarterly reports of the period that ended in September 30, 2016, from all ASE listed companies after they have been reviewed by their auditors, according to ASE Deputy Chief Executive Officer Bassam Abu Abbas.

In a statement carried on its website, the ASE said it will suspend the shares of the breaching companies as of the first working day, following the deadline for receiving the reports, in accordance with its regulations so as to protect investors.

The ASE said it will announce the breaching companies which did not submit their reviewed quarterly reports. According to the ASE listing directives, all companies listed at the ASE must submit reviewed quarterly reports reviewed by their auditors within one month of the end of the said quarter.

Such a step enhances transparency and disclosure in Jordan capital market, and helps investors in being acquainted with the companies' results during the whole fiscal year.

AMMAN — Arab Bank Group reported net profit after tax and provisions for the period ending September 2016 of $617.9 million, compared to $615.1 million in the same period last year, while its net profit before tax reached $815.8 million, according to an Arab Bank Group statement.

The bank maintains a healthy capital base with shareholders equity standing at $8.3 billion, said the statement.  Its balance sheet remains strong with loans and advances growing by 3 per cent to reach $24.4 billion compared to $23.6 billion in the third quarter of 2015, it added. 

Customer deposits grew by 2 per cent to reach $35.5 billion compared to $34.8 billion for the same period last year. Excluding the impact of foreign currency devaluations, both loans and customer deposits grew by 5 per cent and 4 per cent, respectively, the bank reported.

Sabih Masri, Arab Bank’s chairman said: “The Bank’s solid financial performance during the first nine months reaffirms the Bank’s progress in implementing its prudent business strategy and its ability to deal with the challenging circumstances.” 

In remarks, Nemeh Sabbagh, Arab Bank’s CEO, said the Bank’s financial priorities remain focused on ensuring sustainable growth. 

Sabbagh said the Bank continues to maintain solid liquidity, as the loan to deposit ratio stood at 68.8 per cent. It has also maintained the high quality of its credit portfolio with the provisions coverage ratio for non-performing loans in excess of 108 per cent, excluding the value of collaterals held.

The Arab Bank was named the “Best Bank in the Middle East for 2016” and the “Best Trade Finance Bank in the Middle East” by Global Finance magazine.