Business

AMMAN — More than 130 companies do not deserve to be enlisted on the Amman Stock Exchange (ASE) due to their low performance, lack of institutional governance and the volume of their free shares available for trade, president of the Certified Financial Analyst Society in Jordan, Jamil Anz, said Monday.

The ASE lost a lot of public confidence due to speculation practices, especially after the losses incurred by small investors who turned to deposit their money in banks or buy real estates instead of investing in the ASE, Anz added.

Noting that shares of some companies are traded at a book value less than capital or with cumulative losses that exceed capital, he indicated that  some shares have a value of JD0.100 and are still trading. Of 227 companies listed on the ASE, trading is concentrated there  30 - 40 firms that are the most active in the market, Anz added.

MOSCOW — Russia's central bank kept its key rate steady as inflation fears outweighed any temptation to use recent ruble strength as an opportunity for a rate cut in a bid to help the economy.

Boosted by a budding recovery in the price of oil, of which Russia is a main producer, the ruble had prior to the announcement crept back up to a 2016 high after slumping on the back of falling oil prices. 

It was trading at around 68 to the dollar and 76.5 to the euro on Friday.

A stronger currency typically dampens inflationary pressures as imports become cheaper, but the central bank let caution prevail. 

"Despite certain stabilisation in financial and commodity markets and a slowdown in inflation, inflation risks remain high," it said in a statement following a regular board meeting.

The ruble's slide at the beginning of this year caused the central bank to stall on its policy of gradual reductions in the base rate, which it cut four times last year from a high of 17 per cent to the current 11 per cent.

The bank went for a mammoth rate hike in December 2014, as it battled to stave off a collapse in the currency due to a battered economy.

The reduction in the rate since has done little to help Russia's recession-hit economy, hurting from the effects of the oil price slump and Western sanctions over Ukraine.

Despite a desperate need to nudge on an economic recovery, the Bank of Russia warned that it is unlikely to cut the rates again in the near future.

"To enable the accomplishment of inflation targets, the Bank of Russia may conduct its moderately tight monetary policy for a more prolonged time than previously planned," the bank said in its statement.  

Alfa Bank said that the warning was "more hawkish" than expected as the central bank battles to reach its goals for inflation. 

Capital Economics said the statement suggested that future interest cuts are "only likely to come towards the end of the year. And even then, interest rate cuts are likely to be relatively modest".

Oil prices have firmed slightly recently on hopes key producers will agree next month to limit output amid a global supply glut, thus helping the ruble.

Separately, some Russian regions are deep in debt and heading towards default if they don't get help from Moscow.

Four years ago, Russia's federal government cleaned up its finances by shifting responsibility for a chunk of social spending to regional administrations. 

Now it faces the consequences, presenting President Vladimir Putin with difficult choices.

Moscow can bail out the regions, but to do so it may have to go deeper into debt itself at time of recession, weak oil prices and international sanctions over the Ukraine crisis.

Or it could leave them to their fate and risk unrest among workers likely to lose their government jobs if a region slashes spending or goes under, just as Russia heads into a cycle of elections culminating in a 2018 presidential vote.

Collectively, the regions, which number more than 80, ran a budget deficit of 1 trillion rubles ($14.6 billion) last year on spending of 10 trillion, according to the state Audit Chamber.

The chamber's head, Tatiana Golikova, has repeatedly urged a compromise on supporting the regions. 

"Radical changes in the treatment of regional budgets are long overdue," she told the lower house of parliament late last year.

The federal finance ministry did not respond to Reuters requests for comment, although previously it had ruled out an amnesty for regions' debts.

If the ministry refuses to help, some of the regions will be in trouble. 

"I am not saying that there is going to be a massive amount of defaults," Karen Vartapetov, an economist with Standard and Poor's (S&P) ratings agency said. "But the situation will be moving in that direction."

Russia's top level finances are relatively robust despite the economic slump. 

The federal budget deficit is within 3 per cent of the gross domestic product, proportionately less than in a number of European Union states, and sovereign debt is low.

But this is built partly on accounting that has pushed economic pain off the national balance sheet and onto the regions.

Their total debt has doubled since 2012, according to the finance ministry, after a period of very modest growth. S&P forecasts it will more than double again to 5.5 trillion rubles by the end of 2018.

That would be bearable but for the fact that the regions' revenues are shrinking and yet they must keep on spending to honour promises imposed on them by Putin.

Worst case

The worst case is Mordovia, a region in the central part of European Russia that produces little and needs funds to host rounds of the 2018 football World Cup in its capital, Saransk.

Its debt rose 30 per cent last year to 33.7 billion rubles, or 46,000 rubles for every resident, equal to two months' salary for the average worker there, according to the finance ministry data.

Mordovia's debt exceeds 180 per cent of the regional government's annual revenue and yet its Prime Minister Vladimir Volkov says it will keep on spending as ordered by the Kremlin in May 2012. 

"The objectives set in the presidential May decrees must be met," Volkov told his parliament in December, according to local agencies.

While other regions' problems may not be so deep, more than 90 per cent of them were in deficit last year and their debt burden will grow to an average 60 per cent of revenues by the end of next year, up from 27 per cent in 2014, according to S&P.

That leaves their governments with no cash to keep servicing their debts, raising the prospect of default for some of them.

While the federal government can fall back on its foreign currency reserves if needed to pay off sovereign debt, it has enough to cover the entire amount and still have a quarter of a billion dollars left over, the regions have no such safety net.

Moscow does offer cheap loans to the regions but these are not enough to repay their maturing debts, let alone any other spending. 

Therefore, regional governments have to turn to domestic bond issues and loans from Russian commercial banks, with borrowing aboard not an option due to the sanctions.

Putin's promises

Under his May 2012 decrees, Putin ordered that large parts of state spending on healthcare, education and utilities be transferred to regions, to keep the federal budget healthy.

Local governments were also told to raise pay for healthcare and education workers by at least 100 per cent by 2018, the year of the next presidential election. With social spending accounting for 60 per cent of regional governments' expenditure, they rushed to borrow.

At first, there seemed to be no risks. Back in May 2012, the price of oil, Russia's main export earner, was over $100 a barrel and the government expected annual economic growth of 6 per cent throughout the decade. 

Now, oil is at $40 and Russia is in recession, with the economy shrinking 3.7 per cent last year.

Due to the crisis, regions are generating much less cash and have become dependent on financial markets to refinance debts. 

Most of the loans from commercial banks are short-term, with about a third having to be repaid annually.

Last year, the federal government tried to slow the build-up of debt, and the rise in regional spending slowed to a consolidated 1 per cent in 2015, according to S&P.

But with inflation at 12.9 per cent, keeping spending flat means a cut in real terms. That won't go down well with Russians who vote in a parliamentary election in September.

Moody's rating agency estimates that the regions' total operating expenditure will increase by 2-4 per cent this year.

The government has assigned 310 billion rubles in very low-interest budget loans to the regions this year, but S&P estimates this covers only 60 per cent of refinancing needs.

"They have in fact only postponed the debt service peak to 2018-2019, when most of budget loans are due," S&P said in a report.

Uncomfortable choices

The Kremlin's fear, political analysts say, is that if regional governments cut spending, that could drive angry people into the streets to protest.

So far, there have been only small, isolated protests without any political agenda, but as the recession bites deeper, demonstrations could grow, especially in rust-belt provincial cities with few economic opportunities.

Given that risk, the Kremlin will probably choose to bail out the regions. 

"Most likely aid from the federal budget will be required and most likely [the regions] will get it," said Alexander Ermak, head debt analyst at Region brokerage.

But that would in turn force more uncomfortable choices on the government.

With federal revenues falling too, the government will have to prioritise whom it wants to support: sanctions-hit banks, the regions or state-owned enterprises.

Opting to help all of them could exhaust all the reserves Russia has built up as a safety cushion.

Vartapetov said the government must make its choice: "It will have to find a balance between the political and financial costs of dealing with the regional financial difficulties."

PARIS — The European Central Bank's (ECB) plan to buy corporate bonds to help the eurozone economy is boosting the private-sector debt market which promptly responded with a new record-sized company bond.

With interest rates near or below zero and few other monetary policy tools left in its arsenal, the ECB announced earlier this month that it would begin buying non-bank corporate bonds in addition to the government bonds it has been purchasing to stimulate the economy.

That immediately livened up the corporate debt market, with companies rushing out issues and borrowing costs falling.

Less than a week after the ECB's announcement, and months before it is to actually buy any bonds, a new record for a euro-denominated corporate bond issue was set on Wednesday when brewer Anheuser-Busch InBev said it was seeking to raise 13.25 billion euros ($14.9 billion).

That easily beat the previous record of just under 10 billion set by Swiss pharmaceutical group Roche in 2009.

In a sign of a broader response, the volume of new corporate and bank issues on Wednesday struck the highest daily level since May 2001, the Financial Times reported, citing information from data company Dealogic. 

“In our view, this highlights the current positive backdrop for primary issuance induced by the ECB's new easing measures and particularly the new corporate bond programme,” credit analysts at Dutch bank ING wrote in a note to clients.

Deutsche Telekom also returned to the market for the first time since 2013, to raise 4.5 billion euros.

Borrowing costs have come down sharply.

The return to investors on bonds issued by French yoghurt giant Danone due in 2020 fell from 0.39 per cent on March 9, a day before the ECB's announcement, to 0.25 per cent a week later.

The yield on bonds maturing in 2021 issued by German manufacturing giant Siemens similarly slid from 0.3 per cent to 0.25 per cent.

Details of the ECB's plan have yet to be decided, although it is to begin mid-year and the central bank will only purchase euro-denominated debt with an investment-grade rating from credit ratings agencies.

Effect will spread

The corporate debt market has already benefitted indirectly as ECB purchases of government bonds have pushed investors into the corporate market, lowering borrowing rates.

But the ECB wading into the corporate market directly will cut risk further as it offers reassurance in case of a return of angst about the economy.

Competition for assets will increase, thus likely lowering borrowing costs for companies even further, and the effect will probably spread as investors look to also buy assets outside the ECB's scope of action.

In fact, that's what the central bank hopes will happen.

ECB executive board member Peter Praet said in an interview with Italian daily La Repubblica on Friday that "the initial effect of our purchases will spread to other assets and other markets".

Analysts at Citi Research called the purchasing of corporate debt an important broadening of the ECB's policy toolkit. 

"This appears to place more emphasis on liquidity- and credit-easing relative to interest rates," said Citi analysts. 

Despite interest rates coming down and access to low-cost central bank funding, commercial banks haven't stepped up lending, which has been holding up growth.

In addition to the corporate bond purchases, the ECB also announced earlier this month a programme to effectively pay banks if they step up their lending.

Enough bonds for ECB? 

Analysts are however concerned about some of the practical aspects of the plan to buy corporate bonds.

"Nobody knows how the ECB will do it," said bond market analyst Rene Defossez at Natixis. "The problem is that there isn't a considerable stock as the market is much smaller than for that of sovereign debt."

Some 400 to 500 billion euros of bonds meet that criteria, according to a study by the German lender Deutsche Bank.

Valentine Ainouz, a credit strategist at Amundi, a top asset management firm, expressed concern "the ECB may find it difficult to buy on the secondary market" where already-issued corporate bonds are traded.

"It is thus possible that it moves into the primary market" and buy bonds directly when they are issued, which is something it cannot legally do with government debt, she said.

But primary market purchases could see the central bank accused of picking winners and losers among eurozone companies.

For its part, Deutsche Bank said it believes "meaningful execution risks remain" and that the "ECB might turn out to purchase significantly less than the market may be expecting at the moment".

AMMAN — Battered by war which has inflicted incalculable damage on industry, infrastructure and economy, Syria's currency hit new lows last week after Russia said it was reducing its military support to President Bashar Assad.

The Syrian pound has fallen to 475 to the dollar on the black market, a 90 per cent drop since March 18, 2011, when security forces fired on protesters in the city of Deraa, sparking an uprising which descended into civil war.

Backed by financial and trade support from Iran, Syria's government succeeded in stabilising the pound early in the conflict.

But the slide accelerated as it lost control of territory and border crossings, trade collapsed, Western sanctions bit, Gulf Arab investment dried up, major cities were devastated and half the population was displaced.

The collapse of the currency has driven up inflation and aggravated wartime hardship, as Syrians struggle to afford basics such as food and power. Government budget spending in pounds has more than doubled, but in dollar terms has crashed.

Russia's surprise military intervention in September turned the tide of war in Assad's favour, but only briefly stemmed the currency's decline, and Moscow's declaration on Monday that it was pulling forces out of the country hit the pound again.

Panic

"In the last few days it came under further pressure because of the Russian announcement," a Damascus-based businessman said. "There was a lot of panic."

At the start of the uprising, the pound was around 47 to the dollar.

"Today, the [official central bank] intervention rate is around 406 but it reached 475 pounds in the black market," Hani Al Khoury, a financial consultant based in Damascus, said late on Thursday.

He said official efforts had prevented an even graver depreciation.

"Compared to the extent of the crisis and its devastating impact on the economy, the pound could have been far more affected," he told Reuters by telephone.

Infusions of money from Iran and dollar remittances from Syrians working abroad have also helped prevent an even steeper freefall, bankers say.

Iran is believed to have deposited hundreds of millions of dollars in the country's depleted reserves.

The government has also clamped down on currency exchanges in an effort to narrow the gap between official and black market rates. But in recent weeks, the official rate has fallen as fast as the black market, showing the limits of central bank influence.

Dollarisation

The pound's fall has pushed Syrian traders to switch their financing increasingly into foreign currency, Khoury added, a trend which may have been accelerated by the flows of billions of dollars of international humanitarian aid into the country.

"The Syrian economy has been dollarised — the import side and the financing side, along with savings and the aid coming from outside," he indicated.

That, combined with the continued pressures caused by the war, meant that whatever steps authorities take, the pound "is bound to continue to gradually drop".

"In every street in Damascus there is a different rate," the Damascus businessman said. "In Homs, Aleppo, Damascus, the black market rate varies."

He held out little hope of recovery for the currency without an end to hostilities. "Can you say whether the Geneva peace talks will succeed, or whether the armed groups will stop fighting?" he said.

Recently, Syrian businesswoman Reem Abu Dahab displayed her workshop's lacy pink and white nightgowns at a stall in a Beirut exhibition hall hoping to attract increasingly elusive buyers.

Syria's textile industry was once one of the country's economic bright spots, with its products coveted throughout the region and beyond.

But the sector, like the economy in general, has been devastated by the war that erupted in March 2011, with factories destroyed, workers displaced and sanctions hampering trade.

The migrant crisis and outflow to Europe have also depleted its workforce.

"Buyers used to come from all around the world but the war has scared them and now very few come to Syria," said Abu Dahab, surrounded by products made in a small workshop in Damascus.

Abu Dahab's family once owned a factory in Harasta, a Damascus suburb ravaged by fighting between rebels and the regime.

But it was completely destroyed in the war, and now the business is run out of a small workshop in the capital.

"We had 100 employees, today only 30 of them are still working for us," said Abu Dahab, who was one of around 100 Syrian textile manufacturers at a trade fair set up in Beirut.

Before Syria's conflict began, textiles represented some 63 per cent of the industrial sector's total production.

The sector was worth 12 per cent of gross domestic product (GDP), employed a fifth of the workforce and exports netted around $3.3 billion (3 billion euros) a year, according to the Syrian Economic Forum think-tank.

But by 2014, private sector textile exports had fallen by half, with the industry particularly affected by fighting in Aleppo city, the country's former commercial hub and home to many textile factories.

Factories destroyed, workers gone

"Seventy per cent of [textile] factories were closed or destroyed by the war," said Feras Taki Eddine, president of the Syrian Textile Exporters Association, next to a mannequin in black underwear and stockings.

In addition, many businesses lost machines and employees.

"Some of the machines were destroyed and some were stolen. Thieves took them to Turkey. I had 220 machines before, now I only have 10," said AlaaAldeen Maki, owner of Dream Girl Lingerie, an Aleppo-based business.

"Most of my employees emigrated because of the situation and some because they were forced to join the army for military service," he added.

When the war arrived in Aleppo in mid-2012, eventually dividing the city between government control in the west and rebel control in the east, some businesses relocated to small workshops in the city's safer areas.

Others, based in the relative safety of Damascus, have done whatever they can to survive.

Muhanad Daadush owns the country's biggest lingerie and pyjama factory, located in the capital.

He still employs 450 people, many of who sleep in the factory during upticks in violence.

"I had 72 workers sleeping at the factory" at one point, he told AFP at his stall, surrounded by bras of all hues and comfortable cotton sleepwear. "They started at six in the morning, worked until 11, then slept. They would only go home to their families from Thursday night to Saturday morning."

'Still alive'

For all its challenges, Syria's textile industry continues to enjoy a reputation of quality in the region, and the Beirut fair attracted some 500 buyers, mostly from the Middle East.

Fadi Baha was in town from Egypt, where he owns a chain of stores.

"I buy Syrian textiles because of their quality. It's better than Turkish or Chinese merchandise and almost competitive price-wise," he told AFP. "I like how Syrian manufacturers create a unique mix between Eastern and European styles."

But while regional buyers continue to purchase Syrian textiles, clients from further afield were nowhere to be seen.

Daadush Lingerie once exported 70 per cent of its products to Europe, but its owner said only 10 per cent now goes there.

And the rising costs of production, difficult trading environment and shrinking workforce, all mean competitors from Turkey and China are increasingly able to pinch clients from Syria's textile industry.

Manufacturers blame shrinking exports in part on sanctions slapped on Syria after the government began its crackdown on dissent following anti-government protests five years ago.

TakiEddine said Europe should be bolstering trade with Syria to keep citizens at work in their home country.

"It should be in Europe's interest to facilitate trade, because Syrian workers without jobs now want to leave to Europe," he added.

Several vendors said they were committed to staying open, ensuring jobs for Syrians and the industry's survival.

"It's important for us to show that Syrian industry is still alive," said TakiEddine.

KUWAIT CITY — Weak oil prices pose a threat to Gulf Arab states' currency pegs against the dollar, but the energy-rich region is unlikely to abandon the policy yet, analysts say.

Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates all keep the values of their currencies fixed against the greenback, while Kuwait has a link to a basket of currencies including the dollar.

But doubts are growing about whether the policy still makes sense.

The slide in oil prices has battered the economies of the six Gulf Cooperation Council (GCC) member states at a time when an improving American economy and prospects of higher US interest rates are lifting the dollar.

To maintain the currency pegs, all GCC members except Qatar raised their interest rates in December, tracking the US Federal Reserve, even though their economies needed exactly the opposite.

The Gulf states now face a dilemma of whether to keep the pegs or opt for a flexible exchange rate regime, allowing their currencies to fall against the greenback.

"Maintaining a peg is a costly affair. The central bank has to be willing to buy or sell its currency in the open market to maintain the peg, which could deplete forex reserves," said M.R. Raghu, head of research at Kuwait Financial Centre.

"Oil exports, which account for about 80 per cent of [GCC] government revenues, have fallen by 70 per cent since mid-2014, thus making the currency peg vulnerable as it reduces the foreign exchange reserves," Raghu added.

For now, GCC states, with the exceptions of Bahrain and Oman, have huge reserves to defend their pegs.

But some speculators are betting that the Gulf states, particularly Saudi Arabia, will be unable to maintain the currency links indefinitely.

Jan Randolph, director of sovereign risk analysis at IHS Global Insight, believes the contrasting performances of the US and Gulf economies will increase pressure on the pegs.

Monetary policies are also expected to diverge, "stimulating in the GCC and gradual tightening in the United States", Randolph said.

GCC states need weak currencies and low interest rates to boost their waning economies, especially to develop non-oil export sectors, Randolph indicated.

The longer the economic divergence continues, "the more sense it makes to move to a more flexible exchange rate regime", he added.

Maintaining the dollar pegs brings financial stability and certainty to GCC economies amid regional geopolitical tensions.

It also helps contain inflation and boost confidence for foreign investment.

Falling living standards 

Oil producers like Russia, Kazakhstan, Azerbaijan, and Nigeria have already devalued their currencies, raising oil revenues in local currency terms which helped to curb their current account and budget deficits.

But there is a cost.

Devaluation "typically causes higher inflation and often results in falling living standards, which can undermine social stability", Standard and Poor's said in a recent report.

Analysts say that if GCC states de-peg from the dollar, some currencies risk falling by 20 per cent or more.

That would boost oil revenues and the value of GCC fiscal reserves in their sovereign wealth funds in terms of local currencies, said Sebastian Henin, head of asset management at Abu Dhabi-based The National Investor.

The hospitality sector of the Gulf emirate of Dubai would also benefit as it becomes a more affordable tourist destination and more attractive to non-oil businesses, Henin indicated.

That is why some analysts and speculators anticipate that the United Arab Emirates could be the first to end its dollar link.

Another risk of abandoning the dollar peg is a capital flight from the Gulf, Raghu remarked.

"Capital outflows would be exacerbated as investors would like to move their assets to other markets. This would increase volatility and financial uncertainty in the region," he said.

Raghu thinks an end to the peg would happen "only as an extreme measure".

Mohamed Zidan, chief market strategist at ThinkForex, a Dubai-based brokerage firm, said the peg regime "is costly and hurting the economy".

"GCC states are defending it now for stability, but if the low oil price continues, they will opt for a managed floating regime within five years," he added.

AMMAN — Jordan Industrial Estate Company (JIEC) announced  on Saturday that a new Jordanian project, specialised in manufacturing Dead Sea products, was entering the Muwaqqar Industrial Estate with a JD1.5 million investment volume.

A JIEC statement said an agreement for the investment, which will provide around 45 job opportunities, was signed between Chief Executive Jalal Al Debei and Mohammad Al Rifai, general manager of La Cure Jordan for Dead Sea.

During the signing ceremony, Debei said the investment is a clear indication of the incentives issued recently by his company to create an attractive investment environment to establish projects. He added that industrial investments in general are "the best approach", highlighting the recent large investment specialised in manufacturing paper and cardboard.

Rifai described JIEC's incentives as encouraging and supportive to industrial investment, commending its role in the field. He said that Jordan enjoys many features to attract investments, yet the government must benefit from regional conditions and consider them "opportunities" to increase the volume of foreign investment. 

LONDON — Britain unleashed more austerity this week in its latest annual budget and cut its growth outlook, blaming the impact of global markets turbulence rooted in China. 

Finance Minister George Osborne also warned that a potential “Brexit”, or departure from the European Union (EU), would risk damaging the nation's economic recovery, ahead of a key referendum in June.

Chancellor of the Exchequer Osborne said the government would seek additional spending cuts totalling £3.5 billion ($5 billion, 4.5 billion euros) by 2020, when it expects to reach a budget surplus despite higher borrowing.

The chancellor pointed to a "dangerous cocktail of risks" including "turbulence in financial markets, slower growth in economies like China, and weak growth in the developed world" for the growth downgrades.

Analysts were meanwhile quick to point out that it was not clear which areas would bear the brunt of the latest cuts. 

"How these cuts will be made has not been outlined other than described rather vaguely as savings," said ING economist James Knightley. "With [government] department budgets already having been cut aggressively it will be interesting to see where new efficiency savings can be made."

In a speech lasting around one hour, Osborne forecast that the British economy was set to grow by 2 per cent this year, down from a November estimate of 2.4 per cent.

Growth was expected to stand at 2.2 per cent next year, down from 2.5 per cent.

Fiscal watchdog the Office for Budget Responsibility (OBR), which compiles official government forecasts, said the latest predictions were based on the assumption that Britain remained in the EU.

Osborne, a top figure in Prime Minister David Cameron's Conservative Party and government, also revealed plans to cut several taxes levied on businesses amid strongly divergent views from companies on whether Britain should quit the EU.

"This is a budget for small businesses," Osborne told lawmakers.

There were also significant tax cuts for the oil and gas industry, which has been hit by tumbling energy prices.

All eyes on Brexit vote 

Turning to Britain's June 23 referendum on EU membership, Osborne repeated the government's strong desire for the UK to stay within the 28-nation trading bloc.

"Britain will be stronger, safer and better off inside a reformed EU — and I believe we should not put at risk all the hard work the British people have done to make our economy strong again," Osborne told parliament.

Cameron is leading the battle to keep Britain in the EU, but several key members of his Conservative party, notably Mayor of London Boris Johnson, want to leave.

"There appears to be a greater consensus that a vote to leave would result in a period of potentially disruptive uncertainty while the precise details of the UK's new relationship with the EU were negotiated," the OBR said Wednesday, citing various external reports.

The government will meanwhile plough more cash into education and infrastructure projects. 

Osborne approved major railway developments in northern England and in London, and also unveiled a package of extra funding for education, which could see students being made to learn maths until the age of 18, up from 16.

In addition, Britain will impose a tax on excessive sugar levels in soft drinks starting in two years' time to cut down on spiralling childhood obesity levels.

With one eye on the referendum outcome, Osborne avoided traditionally unpopular vote-losing measures, like tax hikes on petrol and beer, and delivered only a very slight increase for tobacco.

"The chancellor had to tread carefully to avoid attracting the wrong kind of attention and undermining the government's popularity in the build up to the EU referendum," noted Scotiabank economist Alan Clarke.

Osborne on Thursday defended his plans to introduce a new sugar tax to tackle obesity, criticised as "absurd" by the soft drinks industry.

"There are always going to be people who will oppose these kinds of things — but I think this is going to be one of those landmark public health decisions that we take as a generation," Osborne told ITV News.

"It's disappointing that the government has chosen to single out soft drinks," said Jon Woods, general manager of Coca-Cola in Britain.

"If the aim is to reduce obesity, this levy flies in the face of evidence from around the world which shows taxes do very little, if anything, to reduce sugar and calorie intake or obesity levels but do add to people's cost of living," he added.

The levy on drinks with more than five grammes of sugar per 100 millilitres will be introduced in two years as Britain battles some of the worst obesity rates in Europe.

Only a handful of countries such as France, South Africa and Mexico have attempted such a tax. 

Osborne said Britain's childhood obesity problem was "really bad news", and that it was "clearer and clearer that the biggest source of sugar intake has been sugary drinks".

However, the drinks industry said it was already taking action to combat obesity and that other food-and-drink sectors needed to help shoulder the burden.

"In 2015 we agreed a calorie reduction goal of 20 per cent by 2020," said British Soft Drinks Association Director General Gavin Partington.

"By contrast, sugar and calorie intake from all other major take-home food categories is increasing — which makes the targeting of soft drinks simply absurd," he added.

According to 2015 figures, Britain is one of the worst countries in Europe for childhood obesity with 28 per cent of children aged between two and 15 overweight or obese. 

During his budget announcement, Osborne said that an average five-year-old child consumes his own body weight in sugar each year.

"We are going to use the money to double the amount we spend on sports in schools... so that kids are getting physical activity as well," he said Thursday.

Media reports suggest the tax could add 8p (0.10 euros, $0.11) to a can of cola. 

The government hopes the tax will raise £520 million a year (661 million euros, $732 million).

Osborne also unveiled new measures to raise taxes paid in the country by multinational companies, following a public outcry over methods used to avoid tax.

While corporation tax will drop from 20 per cent to 17 per cent in 2020, the finance minister set out a series of measures he said would increase British tax revenues by 9 billion pounds ($12.8 billion, 11.5 billion euro).

He added that the plan would "make Britain's business tax system fit for the future".

"It will deliver a low tax regime that will attract the multinational businesses we want to see in Britain, but ensure that they pay taxes here too," Osborne told the lower house of parliament.

"All of these reforms to corporation tax will help create a modern tax code that better reflects the reality of the global economy," he elaborated.

From April 2017, there will be a cap for the amount that major multinationals can deduct from their taxes by borrowing in Britain to invest elsewhere.

The treasury will also set new "rules to stop the complex structures that allow some multinationals to avoid paying any tax anywhere, or to deduct the same expenses in more than one country," Osborne said.

He added that the treasury would strengthen a withholding tax on royalty payments that allow some firms to shift money elsewhere.

There has been public outrage in Britain and other countries around the world over the tax arrangements of multinationals, particularly in the tech industry.

Earlier this year, US internet giant Google agreed to pay £130 million ($185.4 million, 172 million euros) to Britain following a government inquiry into its tax arrangement.

In early March, Facebook announced that it would declare advertising revenue from its top British clients in Britain instead of Ireland, where it has its European headquarters, meaning it should pay more tax.

There had been a backlash against the social network after it emerged that it paid only £4,327 (5,572 euros, $6,119) in corporate tax in 2014.

Osborne said the measures followed guidelines set out by the Organisation for Economic Cooperation and Development (OECD) economic grouping last year.

The OECD has estimated that national governments lose $100-240 billion (90-210 billion euros), or four to 10 per cent of global tax revenues, every year due to the tax-minimising schemes of multinationals.

AMMAN —  Preliminary results announced in a Hikma Pharmaceuticals press statement  this week showed group revenue for the year ended December 31, 2015, increased by 2 per cent in constant currency to  $1.44 billion in 2015.

"Injectables revenue climbed by 3 per cent in constant currency, driven primarily by growth in Europe and the Middle East and North Africa [MENA] region," the statment said. 

"Meanwhile, core operating profit rose  4 per cent in constant currency, with strong profitability in injectables and branded offsetting expected declines in Generics," it added, noting that the results followed an exceptionally strong year in 2014.

In 2015, Hikma successfully implemented an organic growth strategy across all three of its core business segments: injectables, branded and generics. Hikma launched 92 new products and received 220 product approvals across all countries and markets, expanding and enhancing Hikma’s global product portfolio. 

"Its acquisition of Roxane, a well-established US specialty generics company, has brought transformational scale and growth opportunities, adding a broad portfolio and a large, differentiated pipeline of niche products," the company continued in the statement.

"In addition, Hikma’s swift integration of its acquired US company, Bedford Laboratories, has delivered new high-value products and is expected to drive Injectables’ growth in 2017," it elaborated.

The statement indicated that in Europe significant investments were made in the injectables manufacturing capabilities and that  Hikma’s businesses in MENA performed well. 

The company credited its acquisition of EIMC United Pharmaceuticals (EUP) for boosting its capabilities in oncology and injectables in Egypt. 

"The outlook for 2016, is that group revenue is expected to be in the range of $2.0 - 2.1 billion in constant currency, reflecting strong growth across all three business segments and the consolidation of 10 months of revenue from the Roxane acquisition," it said.

The strong operational growth in various locations was coupled with responsible initiatives in surrounding communities. 

Contributing to the health and wellness of its employees and local community members, Hikma organised a breast cancer awareness campaign, in several of its companies worldwide, in addition to a “Walk Against Hypertension.” It also held its annual global “You are Hikma” campaign to improve the medical health and safety awareness of its employees. 

The company encouraged community service through its Global Volunteering Day. It partnered with Tkiyet Um Ali, Charity Clothing Bank and SOS Children’s Villages in Jordan to provide for the vulnerable during Ramadan, and food and clothes drives were held in Algeria and Tunisia as well. 

Hikma continued supporting communities through medicinal donations, donating critical treatments to Syrian and Palestinian refugees, and to the people of Guinea in Morocco, aiding in the fight against Ebola.

Said Darwazah, chief executive officer of Hikma, said:  "Following an exceptional 2014, our branded and injectables businesses performed strongly in 2015 and we made excellent strategic progress in US generics, transforming the future prospects of the group." 

"Our businesses in MENA are performing very well.  We achieved excellent growth in our key markets in 2015 whilst continuing to invest in our pipeline to support future growth," he added. 

"This goes hand in hand with our corporate responsibility strategy, which is an integral part of Hikma. As we expand into global markets, we are committed to continue playing a positive role in the communities we touch, not only through our high-quality pharmaceuticals, but also by promoting philanthropy, medical awareness and community engagement,” Darwazah concluded.

LONDON — Oil producers including Gulf members of the Organisation of Petroleum Exporting Countries (OPEC) support holding talks next month on a deal to freeze output even if Iran declines to participate, OPEC sources said, increasing the likelihood of the first global supply deal in 15 years.

That a meeting could go ahead with or without Iran indicates a shift in the stance of Gulf oil exporters including Saudi Arabia, who had previously maintained that all major producers should participate in any agreement.

OPEC and non-OPEC producers will meet in Doha on April 17, Qatari Energy Minister Mohammed Bin Saleh Al Sada said, following a February agreement between Saudi Arabia, Qatar, Venezuela and non-OPEC Russia to stabilise output.

"To date, around 15 OPEC and non-OPEC producers, accounting for about 73 per cent of global oil output, are supporting this initiative," Sada indicated in a statement. Qatar holds the OPEC presidency in 2016 and has been organising the effort.

Oil prices rose on Wednesday, supported by the announcement and on growing signs of a decline in US crude production. Brent crude was trading above $40 a barrel, up from a 12-year low of $27.10 reached in January.

The reluctance of Iran to join an accord while it seeks to boost its oil exports to recover market share after the lifting of Western sanctions has been cited by OPEC sources as a potential roadblock to an agreement.

Sources familiar with the matter said the issue was among the factors, which caused an earlier plan to hold the producer meeting on March 20 to be dropped.

But on Monday, Russian Energy Minister Alexander Novak said after talks in Tehran that a deal could be signed in April and exclude Iran. An exemption for Iran is not a deal breaker, OPEC sources said.

"It's a setback but it will not necessarily change the positive atmosphere that has already started," said one OPEC source from a major producer, referring to Iran saying it will not join any freeze accord.

Novak said he talked to Sada and Saudi Oil Minister Ali Al Naimi on Wednesday. With the freeze deal, the oil market would rebalance as early as late 2016, Novak added, but without it the rebalancing would not happen until late next year.

A freeze in output would at least stop adding to the excess supply that has caused prices to collapse from levels above $100 a barrel seen in June 2014.

OPEC delegates have said that further action including a supply cut could follow by the end of the year, depending on Russia's commitment to the freeze and how much oil Iran adds to the market.

Hard to backtrack

A second delegate from OPEC said a pact that failed to include Iran was not the worst possible outcome.

However, "if the others freeze and the Iranians are outside the agreement, it will not help the market unless the demand is very large", this delegate added. "January output is already at high levels."

Backtracking on the deal would risk jeopardising the recent rally in oil prices, other OPEC sources said.

"You can't ignore all other oil producers. The meeting is likely to go ahead," a third source said, adding that the April meeting was likely to discuss and finalise details of the deal. "We will not just meet for the sake of meeting."

It was unclear whether all 13 OPEC members and which outside producers would attend. Kuwait and the United Arab Emirates have said they would commit to the freeze if other major producers also participated.

Novak said Qatar was sending invitations to all OPEC members as well as to some producers outside the organisation.

"After it receives confirmations it will be possible to talk about the exact number of participants," Novak said. "Iran said it was ready to take part in this meeting." 

The willingness of Iraq, the biggest source of OPEC supply growth in 2015, to join the deal is also important. Baghdad on Monday said the freeze initiative was acceptable.