Business

NEW YORK — As iconic brands are snapped up and corporations merged and swallowed in a record-breaking whirl of deals, there has been one constant: Goldman Sachs Group Inc.

The Wall Street firm is once again top dog in the global mergers and acquisitions (M&A) rankings, having advised on transactions worth close to $1.7 trillion this year, more than the annual economic output of Australia, including Friday's $130 billion tie-up between US chemical giants DuPont and Dow Chemical Co.

Goldman's No. 1 status comes despite the bank having lost several veteran bankers this year, including Gordon Dyal, its former M&A chief and Jack Levy, one of four global co-chairmen of M&A, and reflects the enduring success of its partnership model, 15 years after the company went public.

Becoming a partner at Goldman Sachs is still one of the most coveted promotions on Wall Street, and those who make the cut represent a powerful network of well-connected dealmakers.

The partnership, along with the bank's commitment to remaining a full-service investment bank despite post-crisis rules that make it more difficult to trade, have given it an edge over rivals such as Morgan Stanley, which has a strong emphasis on wealth management.

"Goldman is still run as a partnership, and delivers the entire firm," said Brad Hintz, a former Lehman Brothers Holdings Inc chief financial officer and financial analyst who is now a business professor at the NYU Stern School of Business.

The 146-year-old investment bank has ranked No. 1 in the global M&A league tables every year since 1997, with the exception of 2009 and 2010, when it ranked No. 2 behind Morgan Stanley, according to Thomson Reuters data.

This year, the bank advised on all the mega deals in pharmaceuticals, energy, beverages and now chemicals, where it is set to split $80 million to $100 million in DuPont advisory fees with Evercore Partners Inc.

Trailing Goldman Sachs in the global M&A league tables this year are Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc.

Navigating conflicts

Goldman's ubiquitous role in finance prompted Rolling Stone magazine to famously declare in 2010 that the bank was "a great vampire squid wrapped around the face of humanity".

Its corporate clients, however, are generally happy to let it navigate potential conflicts of interest.

In the case of DuPont, for example, Goldman has also been advising rival Syngenta AG in its defense against a bid by Monsanto Co.

"Over time, companies have become more sophisticated so banks really need to differentiate themselves more," indicated Bob Hurst, a partner at private equity firm Crestview Partners who served as vice chairman of Goldman until June 2004 and head of its investment banking division from 1990 to 1999.

Goldman has done that.

"It has great coverage, is very relationship oriented on the long term and has great execution," Hurst said.

The bank's prestige and partnership culture is enough to retain many bankers even at the prospect of higher pay at rivals or Silicon Valley startups.

Among its peers, Goldman has consistently had a lower compensation to net revenue ratio than arch rival Morgan Stanley.

"When you are having beer with a Goldman partner, and you roll your eyes when he waxes lyrically about the partnership, you have to remember that this is key, you are expected to drop everything as a Goldman employee when there is a deal on deck," said Hintz.  

KUALA LUMPUR — Malaysian airport officials are seeking the “untraceable” owners of three Boeing jets abandoned on the tarmac in Kuala Lumpur for more than a year.

The large Boeing 747-200Fs, two passenger and one cargo jet, having been racking up unpaid storage fees at Kuala Lumpur International Airport (KLIA), and Malaysia Airports Holdings Bhd is now calling on the owner to collect them.

KLIA hit international headlines last year, when Malaysia Airlines Flight MH370 disappeared after taking off from the airport in one of aviation’s biggest mysteries.

In a notice placed in a Malaysian newspaper this week, the airport authority gave the owner 14 days to claim the unmarked jets, failing which it said it would “sell or dispose” of them.

“This step is also a common process undertaken by airport operators all over the world when faced with such a situation,” the authority said in a statement.

No one has claimed ownership of the aircraft so far, said airport general manager, Zainol Mohamad Isa, on Thursday.

“We haven’t decided what to do with the planes, although we have been getting inquiries from all over the world,” added Zainol.

According to industry experts, it was not unheard of for unwanted planes to be left at airports.

“You do get examples of aircraft being abandoned around the world, because the money you would get from a sale doesn’t cover the outstanding storage charges,” a second-hand aircraft trader said, asking not to be named. 

“But it is unusual for the airport to be so public about it,” he added.

It is not the first time this has happened at the airport, Zainol remarked.

In the past decade a few other planes, mostly smaller aircraft, were abandoned.

He said an aircraft that was abandoned in the 1990s was eventually bought and turned into a restaurant in a Kuala Lumpur suburb.

Searches of the planes’ registration numbers on the website www.planespotters.net showed the aircraft had been registered to an Iceland-based air charter and leasing company, Air Atlanta Icelandic, and that two had at one time been in service with Malaysia Airlines.

Air Atlanta Icelandic was quoted by The Star newspaper as saying it operated the planes until 2010 but had “nothing to do” with the planes since then. Malaysia Airlines was also quoted as saying it no longer owned or leased the planes.

Malaysia’s aviation sector has suffered a difficult period since flight MH370 disappeared in March last year while en route from Kuala Lumpur to Beijing. It is believed to have crashed in the southern Indian Ocean.

In July, Malaysia-based carrier AirAsia complained that a new international terminal for budget airlines at KLIA was sinking, with water-logging on the tarmac.

Geneva — The International Air Transport Association’s (IATA) outlook of the airline industry for 2016 sees an average net profit margin of 5.1 per cent, with total net profit of $36.3 billion.

In both 2015 and 2016, the industry’s return on capital (8.3 per cent and 8.6 per cent, respectively) is expected to exceed the industry’s cost of capital, “an historic achievement for an industry that has been notorious for destroying capital throughout its history”, according to IATA Director General and Chief Executive Officer Tony Tyler, who described the industry’s profitability as “fragile”, rather than “sustainable”.

But if indicators point to an eventual slowdown in airline profitability, whose cyclical nature normally counts an 8-9 year period from peak to peak (conversely, from trough to trough), for now IATA has revised the industry’s outlook for 2015 upwards to a net profit of $33 billion (4.6 per cent net profit margin) from the $29.3 billion forecast in June, positive results that are still just “normal levels of profitability”, according to Tyler.

“The industry’s results are good, but they are not outstanding when compared to the profits that are generated in other parts of the global economy,” he said.

The positive industry performance is attributed to a combination of factors: lower oil prices; strong demand for passenger travel (+6.7 per cent growth in 2015 and +6.9 per cent in 2016), which is making up for the low cargo performance, due to sluggish growth in trade; stronger economic performance in some key economies; record high load factors and increased capacity.

Talking in Geneva at IATA’s Global Media Day, whose theme this year was “Flying better.Together”, Tyler passed in review the “state of the industry and global economic outlook” on the air transport association’s 70th anniversary, observed this year.

On the occasion, he stressed the issue of safety, “the top priority for the industry”, brought into sharper focus by the loss of MH370, “a shock” that made the industry “recognise that, if a large passenger plane like a Boeing 777 could disappear, we needed to improve the way that the aircraft are tracked”.

As such, IATA and the International Civil Aviation Organisation (ICAO), following a safety conference held by the latter in February, worked on the “normal aircraft tracking implementation initiative”, whose purpose was to “test drive” proposed tracking standard and recommended practices to improve or upgrade airlines’ tracking capabilities.

The issue of security, integral part of safety, was also tackled by the IATA chief, who acknowledged that “the threat of terrorism is present and active and the sad reality is that our industry — despite being an instrument of peace — continues to be a target”.

A threat that is “constantly evolving”, terrorism has been keeping the industry busy since September 11, “aware of that [terrorism] in our intense work with governments on countermeasures”.

While “travellers and crew should be reassured” because “we have processes in place to keep them out of harm’s way by screening passengers, securing the cargo chain, providing governments with information to vet passengers and guiding our flight paths around conflict zones”, said Tyler, “there is no perfect system, but aviation is well practised in its efforts to stay at least a step ahead of the terrorist threat”.

Perhaps no other region feels the effects of terrorism more acutely than the Middle East, where “regionally focused airlines are suffering from the impact of lower oil revenues and political conflict”.

That, however, did not prevent the region’s collective profits from reaching $1.4 billion in 2015, lower than the previously forecast of $1.8 billion, according to IATA, but still positive figures. 

The region is expected to “recover most of the lost ground with a $1.7 billion net profit in 2016”.

“Overall the region is still generating double-digit growth. Capacity is expected to expand by 12.1 per cent and 12.2 per cent, respectively, in 2015 and 2016, largely as a result of growth in traffic over the region’s modern hubs”.

Globally, the drop in demand, due to the recent terrorist attacks, “has an effect on forecasts”.  

Is it expected to dramatically affect the airline industry’s performance or forecast?

“We have had some experience in how passengers reacted. In developed economies we found travel, surprisingly, robust, probably because travel there is mostly business oriented. Clearly there is an impact that will be felt at the end of this year and beginning of next year, but that is going to be offset by traffic going elsewhere,” said IATA Chief Economist Brian Pearce.

Alongside terrorism, another issue of great significance for the aviation industry that is making headlines, at least this week, is the global effort to reach an agreement on climate change, at COP21 in Paris.

If COP21 “ends with an agreement in a positive political dynamic, it will set the mood for a successful outcome for the important decisions on aviation and the environment that will be taken at the triennial ICAO assembly in September-October next year”, said Tyler.

According to the IATA chief, “to help governments in their difficult work… we are united in a preference for a mandatory global carbon offset scheme as a key tool in achieving our carbon-neutral growth commitment from 2020. That combines with efforts in other areas, the result of which are seen in our continuous improvement in fuel efficiency”.

Currently, aviation contributes around 2 per cent of all human CO2 emissions, around 700 million tonnes last year, said IATA Aviation Environment Director Michael Gill.

To deal with this, IATA has “taken a very proactive approach”, aimed at seeking “this fundamental balance: aviation’s licence to grow and provide its significant economic and social benefits, on the one hand, and its responsibility for climate change, on the other”.

The goals, then, are to continue to improve fuel efficiency across the fleet by and average of 1.5 per cent per year until 2020; to stabilise net aviation CO2 emissions at 2020 levels; in 2050 to have half the 2005 levels of CO2 emissions.

Irrespective of the outcome of discussions in Paris, said Gill, “our industry has set itself ambitious goals with the necessary strategy to achieve them”. 

Projections for 2016

* Revenues, expected to rise by 0.9 per cent, to $17 billion, entirely due to the contribution of the passenger side of the business ($525 billion in 2015, rising to $533 billion in 2016). Cargo revenues expected to decline slightly, to $50.8 billion from $52.2 billion in 2015.

•Demand for passenger travel is expected to grow by 6.9 per cent, with 3.8 billion passengers expected to travel in 2016. Demand for air cargo is expected to increase to 3 per cent; the industry is expected to uplift 52.7 million tonnes of cargo.

•Yields for passengers expected to fall 5 per cent and cargo by 5.5 per cent.

Middle East region

2015 results

- Passenger traffic: 11.6 per cent increase over 2014

- Passenger capacity: 12.1 per cent increase over 2014

Profits: $1.4 billion

Forecast for 2016

- Passenger traffic: 12.5 per cent increase over 2015

- Passenger capacity: 12.2 per cent increase over 2015

- Profits: $1.7 billion

- Annual average passenger growth forecast 2014-2034

- Jordan: 4.6 per cent

- Egypt: 4 per cent 

- Qatar: 4.6 per cent

- Saudi Arabia: 4.1 per cent

- UAE: 5.6 per cent

CAIRO — Egypt plans to build 1 million homes for poorer people at a cost of almost $20 billion over the next five years, the housing minister said, to ease a crunch that has seen slums and unlicensed buildings spread since the 2011 revolt.

With a population of about 90 million, and projected to exceed 120 million by 2050, and with many Egyptians living in sprawling slums, the country is struggling to build enough houses for the poorest in society.

So many people live in a network of tombs in Cairo that the area has become known as the City of the Dead.

Housing Minister Mustafa Madbouly told Reuters Egypt needed to build 500,000-600,000 new homes a year to keep up with demand, 70 per cent of which should be aimed at the poor.

The social housing project will see 200,000 new homes built each year, meeting over half the annual demand for cheap housing. Private developers, who have built new suburbs around Cairo, are meeting the needs of middle and higher income Egyptians who can buy homes outright or obtain mortgages.

Egypt is financing its social housing scheme through land sales to developers building higher-end homes, Madbouly said.

"This is totally being implemented by the Egyptian government and the ministry of housing with a total investment that exceeds 150 billion Egyptian pounds [$19.16 billion]," he indicated on the sidelines of the Egypt Mega Projects conference.

"We are making use of the projects we are offering to the private sector to finance and cross-subsidise the social housing programme," the minister added.

Mammoth task

Madbouly elaborated that he was also working to upgrade informal settlements, which comprise 40-50 per cent of urban areas, and to bring 24-hour piped water to all homes within three years.

Three per cent of Egyptian households have no running water at all and in rural areas some homes receive water for only 12 hours a day. Madbouly also plans to bring sewage treatment to 50 per cent of rural areas, up from 15 per cent now.

"[We are] upgrading slums and unsafe areas. We are talking here about 248 areas... 150,000 families," Madbouly indicated.

But Madbouly faces a mammoth task. Egypt's population is squeezed into a narrow strip of land along the banks of the Nile, the river delta and the Mediterranean coast. The rest of the country is largely desert.

As the population grows, the government is searching for a solution to poorly lit, poorly ventilated rows of unlicensed red brick buildings that have mushroomed in the turbulent nearly five years since the overthrow of President Hosni Mubarak.

Egypt had also planned to build 1 million homes for middle-income Egyptians by 2020 in a $35-billion joint venture with Dubai-based Arabtec.

Announced in March 2014, the project was a pillar of President Abdel Fattah Al Sisi's election campaign.

Madbouly said the latest proposal from Arabtec foresees the construction of just 13,000 units in the first phase.

"The company had continuous change of its board and its strategy and its policy. They limited their ambitious programme," Madbouly added. "It's not the project we were expecting."

That had not, however, dampened enthusiasm for Gulf investment in the most-populous Arab country, he remarked.

"We have offered several projects with a lot of Gulf country investors and we are in negotiations with some of them," the minister concluded.

Separately, the tourism minister said this week that Egypt's tourism revenues in 2015 will be at least 10 per cent below last year's after a Russian plane crash prompted Moscow and London to suspend flights, and authorities are now working to restore confidence.

Hit by political and economic upheaval since the 2011 uprising ended Mubarak's 30-year rule, Egypt's tourism sector had been set to grow this year.

A global advertising campaign aimed at reviving the industry was due to be launched on October 31, the day the airliner carrying holidaymakers from the Red Sea resort of Sharm El Sheikh crashed, killing all 224 people abroad.

The disaster prompted Russia and Britain, who have both said the crash was caused by a bomb, to suspend some flights pending reassurances over airport security. The Daesh militant group said it bombed the plane.

Speaking to Reuters on the sidelines of the Egypt Mega Projects conference, Hisham Zaazou said Egypt was working to plug any gaps in security and persuade tourists to return to its ancient sites, desert treks and beaches.

The plane crash has already resulted in 2.2 billion Egyptian pounds in direct losses though indirect costs would be larger and more difficult to calculate.

"The impact is minimal now but if it extends longer the impact will be much more," Zaazou added.

"Hopefully, things will be better in the coming year but ... people are not behind doors and once things are OK they open the door and will keep rushing in. It will take some few months later after the resumption of flights," he continued.

Image problem

Zaazou declined to say when flights were expected to resume or to give revenue projections for next year, saying the entire region was suffering from an image problem.

"This time I tell you it is different. I can't give you a date. This time it is not Egypt's problem. Egypt is also caught between what is happening in Syria and Lebanon, in Libya and down south sometimes in Sudan, even Paris now," said Zaazou.

Egypt earned about $7.2 billion in tourism revenues last year, still a far cry from around $12.5 billion before 2011.

The impact of the uprising on Egypt's foreign currency reserves has been particularly dramatic as tourists and foreign investors, key generators of foreign exchange, fled.

Foreign currency reserves have more than halved from about $36 billion before 2011 to about $16.423 billion in November.

Zaazou said he was working closely with Britain and Russia to address security concerns at airports catering to tourists.

"They want to make sure there is a checklist, a manual for every airport ... what they call screening, second screening. They are reviewing all that process," he added. "It is there but they want to see if there are additional methods, additional equipment that we can get ... and we are doing that."

Egyptian tourism has survived big setbacks in the past.

In 1997 Islamic militants killed 58 tourists and four Egyptians at a temple in Luxor, on the Nile.

Last year, the bombing of a tourist bus in Sinai killed two South Koreans and an Egyptian, reviving memories of an Islamist uprising in the 1990s that often targeted tourists.

In September, Egyptian forces mistakenly bombed a convoy of Mexican tourists in the western desert while pursuing militants. Eight Mexicans and four Egyptians were killed.

Egypt had been pinning its tourism strategy on the Red Sea resorts, which until the plane crash had managed to attract visitors despite the uncertainty.

"I act as if there's a problem. I act because the world sees things from a specific angle. We say perception is reality so I deal with this perception," Zaazou said.

"We have had problems since 30 years but the arrow of tourism has always pointed upwards. This proves the industry is resilient," he stressed.

MANAMA — The 2015 Arab Aviation and Media Summit (AAMS) concluded on Tuesday after 200 participants gathered for two days to exchange views on the significance of the avia-tourism sector on regional economies.

Bahrain's Transportation and Telecommunications Minister Kamal Bin Ahmed Mohammed said his country was the first to build an international airport in the Gulf area in 1932, and the first to receive a Concord flight in 1976.

Air Arabia Group Chief Executive Officer Adel Ali told aviation leaders and media representatives that the region suffers unemployment and the industry can take millions of people.

"Countries can be divided into two categories; one which viewed aviation as an integral part of the economy and achieved great successes in many business sectors," Ali said, adding that the second achieved little growth as it viewed aviation as a sector that should be restricted for the national carrier with limited other airlines.

Hussain Dabbas, regional vice president of the International Air Transport Association (IATA), said the association celebrates its 70th anniversary this year under the motto "Flying better together".

"There are around 1,400 airlines today with some 25,000 aircrafts serving 3,800 airports across the world," Dabbas indicated, pointing out that the contribution of aviation amounts to  $2.4 trillion of the global the gross domestic product, a number which would make aviation the 19th largest economy of the world if aviation was a country.

The IATA official added that airlines in 2015 are expected to carry 3.5 billion passengers at an average of 9.6 million passengers a day, which exceeds the total number of passengers transported throughout  1945 when 57 airlines established IATA.

Arab Air Carriers Organisation Secretary General Abdul Wahab Teffaha said the potential for countries to use aviation to develop their economies to create jobs cannot be greater that it is in the Arab world.

"Arabs enjoy the culture of hospitality, treasure of the historical and cultural sites, summer leisure trips and having multilingual peoples," Teffaha indicated describing these attractions as big factors Arabs can employ to develop their economies through using aviation to stimulate tourism.

Fouad Attar, managing director of Airbus Middle East, referred to the problem of the aviation traffic being doubled without doubling airplanes to cope with the increasing numbers of travellers to the region.

AAMS takes place in a different Arab city every year drawing attention to the host city's travel and tourism experience as well as facilitating for a large audience of governments, decision makers and media to share, learn and exchange, according to organisers.

LONDON — Global mining giant Anglo American announced Tuesday a "radical" restructuring of the firm that will slash its workforce by almost two-thirds, as commodity prices crash on world markets.

Some of the jobs will be transferred via asset sales, although Anglo will also write off billions of dollars owing to the closure of loss-making mines.

The prices of metals and other raw materials, notably oil, are sliding on markets owing to weak demand growth, in particular from the world's second biggest economy China.

Anglo's announcements, as part of its investor day, come as sector rival Rio Tinto said it would slash its spending next year owing to sliding metal prices.

In a statement, Anglo American Chief Executive Mark Cutifani said "the severity of commodity price deterioration requires bolder action".

The London-listed company said it expects "impairments of $3.7-$4.7 billion (3.4 billion euros and 4.3 billion euros), largely due to weaker prices and asset closures".

And Anglo said it plans to slash its workforce by almost two-thirds, from 135,000 staff to 50,000 after 2017.

The company published a graph showing the expected decline in jobs, to 99,000 next year and 92,000 in 2017 followed by another sharp reduction, via a combination of asset sales and internal cuts.

"We will be radically restructuring our portfolio, so the net result is expected to be a reduction to around 50,000 employees," a spokesperson confirmed in an e-mail to AFP. 

"But bear in mind that these include assets that we will sell, so the 85,000 jobs don't [all] disappear as many will be employed by new owners of those mines that we sell," he said.

Anglo has already been cutting jobs in recent years, with the workforce standing at 162,000 in 2013.

Simplified business 

Cutifani added that Anglo American plans to halve its business setup to leave just three components, its diamonds operation De Beers, Industrial Metals and Bulk Commodities.

"Anglo American is today setting out an accelerated and more radical restructuring programme to redefine the focus of its asset portfolio to transform the company's competitive position and create a more resilient business to deliver sustainable shareholder returns," the group statement said.

Delivering a blow to shareholders, Anglo said it would suspend dividend payments until the end of next year.

Anglo's share price slumped following the announcements, hitting an all-time low at 332 pence.

Approaching midday in London, it tumbled 8.4 per cent to 338 pence on the capital's benchmark FTSE 100 index, which was 0.7 per cent lower overall compared with Monday's close.  

Anglo added that it would further slash investment through to the end of next year by about $1 billion.

Earlier Tuesday, Rio Tinto said it planned to slash spending in 2016 by a similar amount to maintain profits in the face of the commodities price rout.

The weak demand situation has been worsened by a supply glut blamed on rising output by leading miners, including BHP Billiton and Rio.

Tumbling values for commodities, including Rio's main raw material iron ore, has massively increased the pressure on mining firms as prices approach break-even costs.

Rio said in a statement that capital spending for 2016 was expected to be around $5 billion compared to previous forecasts of less than $6 billion.

The figure was anticipated to reach $5 billion this year in contrast to previous estimates of $5.5 billion, the Anglo-Australian miner said.

The price of iron ore tumbled to $39.6 Tuesday, a multi-year low, after peaking near $200 a tonne in 2011.

"Our prudent capital allocation and disciplined approach to the balance sheet have reinforced our resilience during this period of ongoing volatility," Rio Tinto Chief Executive Sam Walsh said in a statement.

"With all of our investment decisions framed by the need to deliver value for shareholders, we have remained focused on investing in only the best-quality projects," he added.

Critics have said large miners such as BHP and Rio raise output despite falling prices to try to flood the market and drive smaller competitors out of business.

Rio Tinto shares were down a hefty 5.2 per cent and BHP Billiton plunged 5.1 per cent in London deals.

"With key benchmark commodity indexes below levels last seen in the 1990s, and Chinese demand set to remain weak, it is clear that commodity prices remain some way short of giving any evidence of bottoming out," said Michael Hewson, chief market analyst at traders CMC Markets UK.

GAZA — More than a decade after Israel and Europe rolled out 3G, Palestinians are preparing for the introduction of the mobile network, hoping better Internet access will give their economy a boost.

With 4.6 million Palestinians in Gaza and the West Bank, a burgeoning Internet sector and a very high usage of social media platforms such as Facebook and Twitter, demand for 3G is expected to be strong, even if it is a generation behind the 4G networks now in use in Israel and Europe.

Officials say the service will be a boon for consumers working remotely, including those stuck at Israeli checkpoints and needing to pay urgent bills or get work done.

After lengthy negotiations, Israel and the Palestinian Authority signed an agreement last month opening the way for the network, with services expected in the Israeli-occupied West Bank by the second half of 2016 and afterwards in Gaza.

Palestinian mobile operators Paltel and Wataniya have set aside a combined $150 million for the upgrade from 2G.

"The use of fast Internet, especially in the mobile sector, will contribute greatly to increasing gross domestic product," Palestinian Telecoms Minister Allam Moussa, told Reuters.

The Palestinian Authority's (PA) gross domestic product (GDP) totalled $12.7 billion in 2014, according to the World Bank. Studies indicate a 10 per cent increase in broadband use adds around 1 percentage point to GDP. With unemployment at 27 per cent, the Palestinian territories could do with the boost.

"It may inject $80-$100 million into the Palestinian economy every year," indicated Ammar Aker, chief executive of PalTel Group, calling it a rough estimate.

The PA already hosts a number of App designers, and new investment is expected to create jobs in the design and making of Apps and in the IT sector among others.

Describing a situation familiar to many Palestinians, former telecoms minister Mashhour Abu Daqqa talked up the advantage of 3G for consumers caught out by the frequent sudden closures of Israeli checkpoints.

"You can do all your business over the Internet while waiting for the crossing to open," he told Reuters. "An employee or a businessman would be able to finish his work while at home, in a cafe or anywhere."

Still, while cellular operators are pleased that Israel, which under interim peace accords effectively has a final say over allocating radio frequencies in the West Bank, has given the go-ahead, they are disappointed not to jump straight to 4G.

"From an investment point of view it would have been better for us," said PalTel's Aker. "But we would have needed another two years of negotiation."

Gaza delay

Though the agreement with Israel covers both the West Bank and Gaza, analysts expect it will only be introduced in the West Bank next year. Gaza, which is controlled by the Islamist group Hamas, will probably come later.

"The agreement does not specify a geographical area, which means in theory it applies to both," said Abu Daqqa, the former minister and an IT specialist. "But out of experience, Israel will not allow it to work in Gaza."

Haitham Abu Shaaban, Wataniya's director of operations in Gaza, said the company was ready to roll out services as soon as it had the green light from the PA.

"We are getting prepared to buy the equipment and put together the required commercial plans," he added.

Like billions of people around the world, Palestinians are rarely away from their phones.

There is some resentment that, with Israel having introduced 4G this year, the Palestinians are lagging, although some Palestinians retain a sense of humour about it.

"It seemed as if it was meant to be like this: 4G in Israel, 3G in the West Bank and 2G in Gaza," said one official.

LONDON — Brent crude prices sank under $40 on Tuesday for the first time in almost seven years, rocked by the Organisation of Petroleum Exporting Countries (OPEC) with a recent decision to maintain oil output levels despite a chronic supply glut.

Sentiment was also soured by weak demand growth, the strong dollar and a broader collapse in other commodity markets.

European benchmark oil contract Brent North Sea oil for delivery in January tumbled to $39.81 per barrel, the lowest point since February 2009.

"After the OPEC decision, or should that be indecision, last week, the question was not if but rather when this would occur," said ETX Capital analyst Daniel Sugarman, in reference to Brent's latest slide below $40.

New York's West Texas Intermediate (WTI) for January also hit a similar low at $36.64 a barrel on Tuesday, having already breached $40 last week.

Crude futures had also slumped on Monday after the OPEC oil producing group refused on Friday to slash record high output, in a market dogged by oversupply.

"If Brent holds below $40 a barrel, this would be another psychological blow for the sellers, which could lead to further falls as the buyers grow more and more in confidence," added Gain Capital analyst Fawad Razaqzada.

"But oil prices have already dropped very sharply in the space of 2.5 trading days, so the selling pressure could start to at least ease going into the second half of the week."

A stubborn supply glut, and weak demand growth fuelled by China's economic slowdown, have combined to send crude prices collapsing by more than 60 per cent over the past 18 months from levels above $100 a barrel.

Traders, meanwhile, are looking ahead also to a meeting of the US central bank's Federal Open Market Committee (FOMC) next week, amid expectations that it will announce its first interest rate hike in more than nine years.

An interest rate increase typically boosts the dollar, which would make dollar-priced oil more expensive to holders of weaker currencies. 

The Federal Reserve announces its latest monetary policy decision on December 16.

"Oil is of course the big story and is likely to be as we run up to the FOMC next week," said GKFX analyst James Hughes.

He added: "It seems that whatever happens OPEC will not budge."

SYDNEY — Australia will introduce a new entrepreneur visa and offer tax breaks for start-ups, the government said Monday, as it seeks to unleash an "ideas boom" and move the economy away from its dependence on mining.

Launching a signature A$1.1 billion ($806 million) innovation agenda, Prime Minister Malcolm Turnbull said Australia needed a "dynamic, 21st century economy" underpinned by creativity.

"This is all about unleashing the ideas boom," he told reporters in Canberra.

"Unlike a mining boom, it is a boom that can continue forever, it is limited only by our imagination."

Australia has enjoyed more than 20 years of economic growth, but an unprecedented mining investment boom is now fading, commodity prices are dropping and government revenues are falling.

Turnbull, a tech-savvy former businessman who became prime minister in September after beating his conservative Liberal Party colleague Tony Abbott in an internal ballot, said innovation was critical to the next wave of prosperity.

Australia lagged in terms of commercialising ideas, consistently ranking last or second last among OECD countries for business-research collaboration, he said, meaning a big cultural change was needed to turn things around.

"Our appetite for risk is lower than in comparable countries, which means Australian start-ups and early stage businesses often fail to attract capital to grow," Turnbull said.

To help fix this, new tax breaks for early stage investors in start-ups will be offered, giving them a 20 per cent non-refundable tax offset based on the size of their investment, as well as a capital gains tax exemption.

Insolvency laws, which currently focus on penalising and stigmatising business failure, will also be reformed.

"We understand that sometimes entrepreneurs will fail several times before they succeed — and will usually learn more from failure than from success," Treasurer Scott Morrison said.

Turnbull said there would be no cap placed on the number of new entrepreneur visas designed to attract innovative talent, while changes would also be made to retain high achieving foreign students.

"The more high-quality, effective, productive enterprising entrepreneurs we can attract, the better. Because they drive jobs," he said.

School students will be encouraged to learn coding and computing while the government will also establish an A$200 million innovation fund at national science body CSIRO to co-invest in new spin-off firms.

AMMAN — Jordan Industrial Estates Company (JIEC) Chief Executive Jalal Al Debei on Monday was briefed about demands of investors during a field visit to the King Abdullah II Industrial Estate.

At a meeting held at the Jordan Investors Association (JIA), Debei urged the members of the association to voice their suggestions and current and future visions to improve services offered to industrial investors in the King Abdullah II Industrial Estate. JIA president and members of the board of directors spoke about several issues related to industrial investment in the estate to be followed up by JIEC.

JIA Vice Chairman Mohammad Al Saghayer said that despite the challenges pressuring the industrial sector because of regional issues and the closure of some neighbouring markets, in addition to increased energy prices, the industrialists of the estate were able to continue their economic activity.