Business

AMMAN —  Industry, Trade and Supply Minister Maha Ali on Sunday discussed economic cooperation with Djibouti's minister of economy and finance in charge of industry, a ministry statement said.

During the meeting attended by a Djibouti delegation and Jordanian officials, Ali stressed the importance of joint work to raise the level of economic cooperation, especially with regard to two-way trade.

She also highlighted the importance of benefitting from available opportunities in both countries, especially Jordan's location, considered a gate to the region's markets and Djibouti's location as an entrance to African markets.

Ali urged businesspeople from both countries to benefit from available investment prospects and to explore more the export potentials  and the needs of both markets.

At the end of the meeting, it was agreed to prepare a record of the accords  and memoranda of understanding between the two countries to enhance economic cooperation and take practical steps in the coming period. 

AMMAN — Pretax profit generated by the Housing Bank for Trade and Finance (HBTF) during the first quarter of 2016 increased by 20.1 per cent to JD50.5 million from JD42.1 million posted the same period of 2015.

An HBTF statement revealed Sunday that profit after tax in the January-March period of 2016 stood at JD34.6 million, 10.2 per cent higher than the JD31.4 million registered in the first three months of 2015.

HBTF Director General Ihab Saadi underlined the bank's financial strength and soundness indicating in the statement that assets at the end of March 2016, totalled JD7.7 billion and that customers' deposits amounted to JD5.7 billion.

The portfolio of credit facilities reached JD3.9 billion, he said, and shareholders equity amounted to JD1.1 billion.

The results reflected positively on HBTF's main performance indicators which showed that return on assets after tax rose from 1.6 to 1.8 per cent, and return  on shareholders equity after tax increased from 12 to 13.2 per cent, the statement said.

Capital adequacy ratio stood at 16.8 per cent, higher than the 12 per cent minimum required by the Central Bank of Jordan. The liquidity ratio came in at 144 per cent.

AMMAN — The Housing Bank for Trade and Finance (HBTF) announced on Saturday in a press statement that it will be distributing cash dividends at a rate of 32 per cent as endorsed by the shareholders during an ordinary general assembly meeting. 

HBTF Chairman Michel Marto said in the statement that HBTF's pretax profit amounted to JD177 million last year, the highest since its establishment in 1973 and 9.2 per cent higher than the JD162.1 million generated during 2014.

Net profit after tax stood at JD124.7 million, JD0.8 million higher than the amount at the end of 2014, when profits reached JD123.9 million, Marto added.

He attributed the limited increase in profit after tax to the increase in income tax from 30 per cent in 2014 to 35 per cent as of the beginning of 2015.

He indicated that the bank's assets went up by 4.3 per cent reaching JD7.9 billion at the end of last year and that customers' deposits totalled JD5.8 billion, 6.4 per cent higher than the total at the end of 2014.

Marto revealed that credit facilities surged by 28.6 per cent to JD3.5 billion.

At the end of the meeting, the board elected Abdul Ilah Khatib as a free-time chairman of the board and Abdullah Mubarak Al Kahlifah as vice chairman, and confirmed Ehab Saadi as director general of the bank, the statement concluded.

AMMAN —  Arab Potash Company (APC) will be distributing JD100 million in cash dividends to shareholders at a rate of 120 per cent, as authorised by shareholders during an ordinary general assembly meeting.  

APC Chairman Jamal Sarayrah told the shareholders that the company's net profit after tax, provisions and mining fees amounted to JD131 million last year, 31 per cent higher than the JD99.7 million generated during 2014.

He said the company paid about JD90 million to the state treasury in 2015 and spent around JD10 million in social donations to develop local communities. 

Sarayrah added that the profit reflected an increase in potash production, efficiency in cost management and good administrative policies.

He indicated that positive developments in 2015 included an increase in potash prices from $299 to $305, whereas negative factors showed mainly in the 3.7 per cent raise in electricity charges which contributed to lifting the power bill by 6 per cent compared to 2014.

To counter the energy challenge, the company is planning to replace heavy fuel with the cheaper and more environment-friendly natural gas, and also will proceed with generating energy through solar cells at a capacity of 33 megawatts, in addition to using diesel generators to provide 15 megawatts of electricity, the chairman continued.

APC President/Chief  Executive Officer Brent Heimann said the company's top priorities is to provide a safe working environment for employees, noting that APC in 2015 completed four million working hours without lost time injuries, which require the absence of injured employees for treatment. 

APC's future plans include boosting the handling capacity at the export terminal to cope with the company's production hike, he added, noting APC started the implementation of a new industrial terminal in Aqaba at an preliminary cost of JD118 million, equally funded by APC and the Jordan Phosphate Mines Company.

The general assembly also elected a new board of directors for a four-year term consisting from the Government Contributions Directorate, PCS Jordan LLC, Arab Mining Company, Social Security Corporation, Kuwait Investment Authority, Iraqi government, Islamic Development Bank – Jeddah, Libyan Foreign Investment Company. 

AMMAN — An Arab industrial delegation on Saturday had a first-hand look at the Jordanian experiment of industrial estates and efforts exerted by the Jordan Industrial Estates Company (JIEC) in providing an investment-attracting environment.

The delegates, taking part in the 6th Jordan International Exhibition for Chemical Industries, praised the investment achievements at the King Abdullah II Industrial Estate (KAIE) in Sahab. KAIE, established in 1984, houses  458 entities whose total investment volume stands at around JD1,376 million and provides more than 15,000 jobs, said Issam Mubaidin, KAIE director.

The head of JIEC's investment directorate said the investment environment in industrial estates and the incentives provided to industries are top factors that contribute to attracting projects in Jordan. The Kingdom's trade agreements with Arab and foreign countries benefit investors and enhance Jordan's status in attracting industrial investments, the director added.  

CAIRO — Egypt's war on black market currency traders is not going to plan. One month after a devaluation that was supposed to ease an acute dollar shortage in the banking system, clandestine business is booming in cafés, shops and flats.

The central bank, which hoped the 13 per cent devaluation would relieve downward pressure on the Egyptian pound, has cracked down on exchange bureaux trading far outside its set range.

And yet the gap between the official and black market rates, which briefly narrowed with the devaluation, is now wider than ever, with dealers buying and selling dollars for 20 per cent or more above the official rate of 8.78 pounds.

Traders say the crackdown has only exacerbated the crisis. People with dollars are shunning the official financial system, starving it of foreign currency. This is putting yet more pressure on the pound, with potentially dire consequences for inflation, investors' confidence and economic growth.

"No one sells dollars to the banks any more. They all prefer to go to the black market which will pay them more," said one banker who asked to remain anonymous. "The dollars don't come into the banking system any more and the central bank's dollar reserves are not enough to support the country's import needs," he added.

Egypt has struggled to restore growth since the 2011 uprising that toppled president Hosni Mubarak and scared away tourists and foreign investors, vital sources of the foreign currency it needs to import everything from fuel to food.

Eradicating the black market is essential to restoring investors' confidence, easing the risk that the pound's volatility will erase their profits.

Already, foreign investors are struggling to repatriate earnings because the central bank's reserves have more than halved since 2011 to about $16.5 billion in March. This has made it hard for them to convert pound earnings into foreign currency through the banking system.

Even before last month's devaluation, which was accompanied by the launch of financial instruments aimed at attracting hard currency to the banks, the central bank had resorted to legal force. In February, it revoked the licences of four exchange companies with 27 offices.

Since then, the expected influx of dollars has failed to materialise and this month it referred 15 more exchange firms to public prosecutors. Then on Wednesday the central bank said it had revoked the licences of nine more companies for manipulating prices of dollars in the parallel market.

Repeated offences

"The decision ... comes after repeated offences by these companies which distorted the exchange market and has harmed the national economy," said Gamal Negm, deputy central bank governor, in remarks published by the state news agency MENA.

Negm added that the bank is working on a new law that could raise the punishment for violators to a prison sentence.

Bankers say the clampdown has backfired because as it became riskier to deal on the black market, the dollar strengthened against the pound and people began hoarding foreign currency to speculate on the rate. 

This pushed the US currency yet higher, and the pound hit a record low of 11.5 to the dollar this week.

"Traders are speculating on the dollar and those who need dollars for imports can't find the dollars and must buy them from traders and speculators, so the black market rate is putting the Egyptian economy in a tight spot," said Ziad Waleed, an economist at Beltone Financial.

Any further official devaluation would threaten to fuel inflation, a politically explosive development in a country where millions live in poverty. That leaves the central bank with few weapons in its arsenal.

One trader described the situation as a standoff, saying that while the central bank is trying to punish black market dealers, it does not have the resources to fight them.

"We will secure ourselves and we will continue to work and we will do it carefully, as if we were dealing in drugs. We will hoard the dollars and we won't sell. Where will the central bank get dollars from?" he said.

Easy evasion

Just a few blocks away from one Cairo exchange bureau, a trader sipped coffee at a downtown cafe as he closed deals over the telephone away from the prying eyes of the authorities.

"Do you have riyals?" he asked another trader, quoting the black market rate for the Saudi currency. "I will take all of it."

This is one example of how easily traders are adapting to tighter oversight.

They quote official rates at the exchange bureaux, which are closely monitored, without making any deals. Business is then  done at cafes or elsewhere at black market rates, dealers said.

Outside the bureaux, young men puff on cigarettes and whisper to customers: "Dollars? Euros?"

"No one buys or sells at the official rate, so as soon as the customer leaves there are guys standing outside to catch them and deal with the unofficial rates," said another exchange bureau manager in downtown Cairo.

It should be easy to clamp down on these men, but traders say agents of the Interior Ministry's General Department of Public Funds Crime Investigation Unit, which is responsible for tackling illegal trading outside the bureaux, are easily bribed.

Reuters spoke to 10 traders who either work, own, or collaborate with exchange bureaux and all said that their operations run smoothly thanks to bribes and favours that are given to public funds forces and central bank employees.

"It does not put a dent in profits," said one exchange bureau worker, adding that a single branch of the company he works for makes around 6 million Egyptian pounds ($675,680 at the official rate or about $522,000 on the black market) in profit each month on black market trades alone.

The interior ministry spokesman did not respond to requests for comment and officials at the central bank, which does not have a spokesman, were not available for comment.

Exchange bureaus are licensed to operate with a certain amount of funds but most have offices or apartments where business is carried out off the books.

"If they close the exchange bureaux we will continue to work from the streets and this way the dollar price will reach 13 or 15 pounds per dollar," one trader said.

Luggage shops and cars

President Abdel Fattah Al Sisi has made economic revival a priority but is also mindful of protecting the poor, with his government slowing cuts to subsidies which keep down some food and fuel prices but burden the budget.

If the central bank is forced into repeated devaluations to keep up with the black market, this would be a nightmare for authorities trying to stabilise the economy.

But so is the current situation, where the public sector functions at an official exchange rate wholly disconnected from the rest of the economy which has to deal on the black market.

Black market activity is fast and efficient.

In Cairo, a luggage store manager took 20,000 pounds from his wooden desk in return for $2,000, a deal made with a customer who had been turned down at the exchange bureau next door. The operation took under a minute.

One trader showed Reuters a car he uses to transfer funds to clients in rubbish bags hidden in the boot. "The largest amount this car carried is the equivalent of 11 million Egyptian pounds," he said proudly.

FRANKFURT — The European Central Bank (ECB) on Thursday dismissed German criticism of its monetary policy, insisting its benefits would take time to unfold, while bank chief Mario Draghi also said Britain's membership in the European Union [EU] was "mutually beneficial". 

"Let me say unequivocally that we view the participation of the UK to the EU as mutually beneficial and we will continue to say so in the coming weeks," Draghi told a news conference.

Would a Brexit "endanger the economic recovery of the euro area? The assessment of our staff is that the risk of this happening is limited," he said.

Turning to the ECB's policies, which have come under fire in Germany recently for hurting savers and banks, Draghi insisted that "our policies work, they're effective. Just give them time to fully display their effects". 

And he turned the tables on the politicians, saying that "with the rare exceptions, our policies have been the only policy in the last four years to support growth". 

At its previous meeting on March 10, the ECB had announced a new range of new policy moves aimed at driving chronically weak inflation in the euro area back up to economically healthier levels.

These included cutting interest rates to zero per cent, beefing up its controversial asset purchase programme known as quantitative easing and making vast amounts of cheap loans available to banks. 

But the measures have come under increasing fire in Germany, where the country's many savers are seeing interest income cut due to low rates, and banks' profits are being squeezed.

German Finance Minister Wolfgang Schaeuble even recently suggested that the ECB's policies were helping foment political unrest in Germany and aiding the rise of an anti-euro, anti-immigrant party, the AfD.

Draghi dismissed such criticism, insisting that the ECB was legally independent from any meddling from politicians.

ECB 'obeys law, not politicians' 

"We have a mandate to pursue price stability for the whole of the eurozone and not only for Germany alone," Draghi said. "We obey the law, not the politicians because we're independent."

And he threw back the ball into the politicians' court, urging them to pull their weight to help get the eurozone economy back on its feet.

"In order to reap the full benefits from our monetary policy measures, other policy areas must contribute much more decisively, both at the national and at the European levels," Draghi stressed. 

Nevertheless, Draghi left no doubt that the ECB could further ease monetary conditions in the single currency area if it felt the need to.

Ready to act 

"The governing council will continue to monitor closely the evolution of the outlook for price stability and, if warranted to achieve its objective, will act by using all the instruments available within its mandate," he said.

At Thursday's meeting, the bank's policy-setting governing council voted to leave interest rates at their current all-time lows.

Despite the ECB's latest round of rate cuts last month, eurozone inflation was stuck at zero per cent in March, a long way off from the 2 per cent the ECB estimates is conducive to healthy economic growth. 

AMMAN — The value of halal food market in the world exceeds $650 billion, with  demand for it expected to increase by 20 per cent in the next years,  Amman Chamber of Industry (ACI) President Ziad Homsi said Wednesday. 

At the inauguration ceremony of a workshop ACI organised in cooperation with Gulf Halal Centre to introduce "Halal" standard, Homsi said that other halal sectors will be offered, such as medicines, tourism, Islamic fashion and cosmetics, according to an ACI statement. 

Halal food and products have become an international market for Muslims and non-Muslims, and many non-Muslim countries recognise this international consumption trend, he said.

The workshop is aimed at marketing halal products through enabling Jordanian factories to obtain all necessary certificates that help them develop their products and increase their exports, Homsi added.

Chief Islamic Justice Ahmad Hilayel highlighted the importance of issuing halal certificates from the Jordan Standards and Metrology Organisation (JSMO) in compliance with Sharia (Islamic law), and under the supervision of the Ifta Department. 

Hilayel praised the roles of ACI and JSMO in issuing the Halal Standard, reiterating the significance of benefiting from the experience of countries like Malaysia, Indonesia and the United Arab Emirates that already apply this standard, added the statement. 

JSMO Director General Haydar Zaben said the organisation had embarked on granting the certificate and logo of halal food, and issued regulations to provide the certificate from a neutral third party testifying that a product meets the requirements of Sharia and is free of Islam-prohibited ingredients.