Business

AMMAN — Simplifying and facilitating business procedures is a priority for the government, Industry, Trade and Supply Minister Maha Ali told secretary generals of ministries and directors of public institutions on Thursday.

She debated with senior officials the possibility of reducing the number of approvals needed for registering companies and sole proprietorships in order to remove all obstacles hindering the flow of investments.

In a statement to The Jordan Times, Ali was quoted as saying that about 360 economic activities were found to require approvals by 35 official entities, citing a review conducted by the ministry.

She said some of the approvals can be canceled in coordination with concerned institutions, stressing the need for revisiting some of the relevant investment-related laws, according to the statement.

The meeting recommended adopting the fourth revision of the International Standard Industrial Classification of All Economic Activities (ISIC, Rev.4) for registering and licensing businesses in the Kingdom starting January 2016.

The meeting also recommended the possibility of linking the approvals of multiple issuing agencies electronically to the Ministry of Industry, Trade and Supply in addition to accrediting e-mails to exchange approvals, the statement said.

 In the quest to attract more investments to Jordan, His Majesty King Abdullah has stressed the importance of simplifying bureaucratic and administrative measures.

AMMAN — About 60 per cent of banks present in Jordan operate departments specialised in financing small- and medium-sized enterprises (SMEs), according to a study conducted by the Association of Banks in Jordan (ABJ).

ABJ Director General Adli Qandah mentioned in an address about the Jordanian experience in financing SMEs that 76 per cent of banks in the Kingdom have qualified personnel to serve their SME clients.

The study, he said, showed that around 95 per cent of Jordan's commercial banks offer ovedrafts, 38 per cent extend financing for working capital, 33 per cent provide revolving credit and letters of credits, 29 per cent give short-term loans and 24 per cent offer medium- and long-term loans.

As for Islamic banks' facilities to SMEs, the study noted that 75 per cent of Islamic banks offer profit sharing to buy and import goods and raw materials in addition  to financing fixed assets and real estate.

The average interest rate for facilities granted to SMEs range between 10 and 12 per cent, the study indicated noting that 88 per cent of banks in Jordan consider their products to be suitable to meet SMEs' needs.

Some 60 per cent of banks turn down less than 10 per cent of SMEs loan requests, the study revealed, attributing the rejection to ambiguity of requests, lack of clarity of income resources, absence of financial statements, improper guarantees, low experience, high indebtedness and weak  feasibility. 

Facilities granted to SMEs accounted for around 13 per cent of the total facilities granted by 65 per cent of banks, while 58 per cent of banks expressed intention to increase financing targeting SMEs. 

Maher Mahrouq, director general of the Jordan Chamber of Industry, said financing SMEs projects needs a solution, noting that the financing gap in the Kingdom is still wide, with the World Bank estimating the volume to reach around $2 billion a year.

Interest rates in the Kingdom are among the highest in the region, which is considered the main obstacle for financing SMEs, Mahrouq added, noting that Jordan ranks 185 among 189 countries in the World Bank's index for securing loans.

The industrialist highlighted the chamber's role in empowering SMEs projects, saying the chamber had established a special unit in cooperation with international institutions to enable SMEs get loans and fill the gap between supply and demand.

AMMAN — Developments in the region, especially the drop in oil prices, require  a "genuine" stance to empower small-and medium-sized enterprises (SMEs), experts said Wednesday.

During a forum, titled "SMEs: The Road to Economic Growth", Arab economists and bankers stressed the need for a holistic strategy to address challenges facing micro businesses which are deemed as drivers for national stability and growth.

Despite accounting for around 50 per cent of gross domestic product ( GDP) in Arab countries, challenges facing SMEs range from financing, training and marketing to innovation and sustainability. 

While nearly 90 per cent of the regional economies are driven by SMEs, participants underlined the "poor" policies towards them, urging for establishing ministries designated to serving the sector.  

Arab economists and bankers highlighted trends adopted by their respective governments to nurture this dynamic sector, especially in light of the drop in oil prices and political instability.

"It is true that in times of economic downturn, SMEs are the first to be affected, but they are the first to interact and grow in times of prosperity," said Fouad Zmokhol, president of the Lebanese Businessmen Association.

Officials at the two-day forum, organised by the Union of Arab Banks (UAB), mentioned that the lack of innovation and sufficient technical and financial support hinder SMEs from reaching their full capacity and becoming large businesses.  

"The inability to access financial resources is related to the incomplete reform efforts in many Arab countries and having legal loopholes that result in maximising banks' potential losses," said Marwan Awad, chairman of Association of Banks in Jordan.

Majid Al Suri, member of the Central Bank of Iraq's board of directors agreed, underlining the need of Arab countries to identify the type of market economy they embrace as a way to identify the type of projects they need to encourage. 

"Till this day, Arab states have no specific type of market economy…banks should work towards entrenching a culture of free work among young people," he stressed.   

In the Kingdom, the Central Bank of Jordan (CBJ) has channeled around JD1 billion to SMEs through banks at very competitive conditions, CBJ Governor Ziad Fariz told the forum. 

"The government is planning to establish a fund to provide guarantees for start-up loans...," he said.  

Fariz indicated that the lack of updated and accurate data on the SMEs financing activities  does not help identify the exact issues they face. 

Adel Sharkas, CBJ deputy governor, noted that the budget deficit in Jordan is in "better shape" now and no longer competes with SMEs for financing. 

"The government's financing needs used to stand at JD1 billion in the past three years, but with the drop in oil prices, the deficit is improving. This would definitely benefit the SMEs," he said. 

According to the European Bank for Reconstruction and Development (EBRD) survey, which covered the period between May 2013 and April 2014, almost 70 per cent of Jordanian firms that needed a loan were either discouraged from applying for a credit or rejected when they did, which is above the SEMED average of 57.2 per cent and the average for the rest of the region (47.5 per cent).

More than three quarters of young firms and over 70 per cent of SMEs were credit-constrained, compared with 68.1 per cent of old and 19.7 per cent of large firms, the survey showed.  It involved the four countries where the bank works in the southern and eastern Mediterranean (SEMED) region: Jordan, Egypt, Morocco and Tunisia. Political instability was among the top five concerns in all four countries, and was the biggest concern for Egypt and Tunisia, according to the study.

Regarding access to finance in Jordan, the EBRD report indicated that only 16.7 per cent of the firms had a loan or a line of credit, well below the SEMED average of 32.1 per cent and the rest of the EBRD region average of 37.4 per cent. 

A recent study suggested that the banking sector in Jordan is reluctant to lend to SMEs because they are unable to pledge enough collateral.

AMMAN —  As Jordan steps up imports of liquefied natural gas (LNG), Gulf Agency Company (GAC) said Wednesday in a press statement that it handled the first gas carriers that offloaded at Aqaba.

The country has signed a sales and purchase agreement with Shell for the delivery of nearly 17 million cubic metres per day of gas, equal to approximately 25 per cent of the National Electric Power Company’s (NEPCO) daily needs, signaling an increase in demand for shipping and logistics services to support incoming LNG) carriers.

"GAC Jordan acted as agent for the ‘Golar Eskimo’ when it made its port call to offload 144,218 cubic metres of LNG from Qatar," the press release said.

"As Golar’s agent and partner of choice in the country, GAC Jordan delivered a host of integrated services to the vessel including online connectivity and resupply, whilst also taking care of all the vessel’s manpower, equipment and marine assets needs." It added.

GAC Jordan has handled ship-to-ship transfers of LNG from the “Castillo De Santisteban”, the first LNG carrier to call at Aqaba, and the “SCF Melampus”, to the “Golar Eskimo”. After loading, the LNG was regasified and pumped as natural gas to the NEPCO’s power stations.

SHANGHAI/BEIJING — China's central bank cut interest rates and lowered the amount of reserves banks must hold for the second time in two months on Tuesday, ratcheting up support for a stuttering economy and a plunging stock market that has sent shockwaves around the globe.

The moves came after Chinese stocks tumbled again on Tuesday, as investors despaired at the lack of policy action from Beijing in response to recent data suggesting the downturn in the world's second-largest economy was deepening.

The People's Bank of China (PBoC) said it was cutting the one-year benchmark bank lending rate by 25 basis points to 4.6 per cent, cutting one-year benchmark deposit rates by the same amount, and reducing reserve requirements (RRR) by 50 basis points to 18 per cent for most big banks.

Major Chinese stock indexes nosedived more than 7 per cent on Tuesday, hitting their lowest levels since December, following a more than 8 per cent plunge on Monday.

The slump had resumed last week despite Beijing's efforts to arrest a 30 per cent crash earlier in the summer with hundreds of billions of dollars of state-backed share purchases. 

This time, the government appeared to be sitting on its hands until Tuesday's response, which aimed more at shoring up economic fundamentals than underpinning stocks.

"Although this has some elements of giving comfort to the market, this is more about giving a real boost to the real economy so the government can continue to have its 7 per cent growth rate fulfilled," said Liu Li-Gang, China economist at ANZ Bank in Hong Kong.

Liu said the RRR cut was the most significant element of the PBoC action, as it would inject 650 billion yuan ($101 billion), into the economy and ease concerns of a "hard landing".

China, one of the main engines of the world economy, has overtaken Greece at the top of the worry list of global investors, who fret its economy is growing at a much slower pace than the official 7 per cent target for 2015.

"Currently, there is still downward pressure on China's economic growth," the central bank indicated in a separate statement. "There is also relatively big volatility in global financial markets, which require more flexible usage of monetary policy tools."

German Finance Minister Wolfgang Schaeuble said the situation in China would be discussed by the Group of 20 (G-20) nations.

Futures limit-down

The CSI300 index of the largest listed companies in Shanghai and Shenzhen dropped 7.1 per cent on Tuesday, while the Shanghai Composite Index fell 7.6 per cent to close below the psychologically significant 3,000-point level.

Underscoring the panic gripping the retail investors who dominate China's stock markets, all index futures contracts fell by the maximum 10 per cent daily limit, pointing to expectations of even deeper losses.

Though the PBoC move came after domestic markets had closed, stock markets in Europe jumped, and US stock futures were also given a lift.

After the turmoil in China rocked world equity and commodity markets on Monday, policymakers elsewhere in Asia sought to soothe fears about the broader impact on the global economy.

"I think it's important that people don't hyperventilate about these types of things," said Australian Prime Minister Tony Abbott, whose country is heavily exposed to China, the biggest consumer of its commodity exports.

"It is not unusual to see stock market corrections. It is not unusual to see bubbles burst in particular markets and for there to be some flow-on effect in other stock markets, but the fundamentals are sound," he added.

This week's steep declines have taken Chinese stocks into negative territory for the year to date, although Leland Miller, president of China Beige Book International, pointed out that Chinese equity markets have shown little correlation with the real economy, either on the way up or the way down.

"Previous boom-bust cycles in Chinese stocks have also shown little or no connection to [apparent] economic performance," said Miller, whose firm provides anecdotal survey information about China based on the US Federal Reserve's "Beige Book" model.

European Central Bank (ECB) Vice President Vitor Constancio said it was too early for the ECB to respond to China's market fall.

"Indications are that what we get out of China is that the economy is not decelerating so much to justify the rout in the stock market," he told journalists on the sidelines of a conference.

No rescue?

While there is little evidence that the stock market mayhem has dampened consumer spending so far, concerns about the economy intensified after factory activity shrank at its fastest pace in almost six-and-a-half years and the central bank unexpectedly devalued its yuan currency earlier this month.

A majority of analysts, however, predicts a continued deceleration, rather than a crash, for China's economy, and dismisses comparisons with the 2008 Global Financial Crisis or the 1997/98 crisis in Asia.

"The current panic is essentially 'made in China'. The recent data from other major economies have generally been good and there is little to justify fears of a major global downturn," wrote economists at Capital Economics.

"China's recent economic data suggest that growth remains sluggish, but are not weak enough to justify fears of a hard landing," they said.

Some companies, too, have sought to reassure investors that China's economy is not about to go over the cliff, with Apple Inc. CEO Tim Cook and planemaker Boeing Co. making encouraging noises about China on Tuesday.

LONDON — European shares rose more than 4 per cent on Tuesday, their best one-day gain since late 2011, as a rate cut in China fuelled a recovery from a bruising 48-hour sell-off.

Battered mining and technology stocks were among the big winners when China moved to support its stuttering economy and a plunging stock market that had sent shockwaves around the globe.

"We think the corner in markets has been turned," Bank of America-Merrill Lynch strategists wrote in a note to clients. "We would acknowledge, though, that this sell-off has done some serious damage to markets and any recovery is likely to take time and be volatile."

The pan-European FTSEurofirst 300 index, which slumped 5.4 per cent on Monday, closed up 4.2 per cent. The blue-chip Euro STOXX 50 index rose 4.7 per cent.

German chipmaker Infineon rose 10 per cent while miner Antofagasta gained 8.7 per cent.

Swiss agricultural chemicals company Syngenta was up 5.9 per cent after a source said that Monsanto had sweetened a takeover offer.

World financial markets have been rattled by a sell-off in the Chinese stock market after the devaluation of the yuan this month.

Some investors took heart from a rise in the German IFO  business climate index for August and said that domestic demand across Europe was showing broadly positive signs.

"There are solid reasons to be worried about the global growth outlook, given emerging markets and systemic fears in China," said Valentijn van Nieuwenhuijzen, head of multi-asset strategy at NN Investment Partners. "However, it is a risk, not yet a reality, that this will spread to the developed world. The IFO number this morning... shows domestic demand is holding up quite well so far," he added.

Goldman cuts equities position

Goldman Sachs' strategists cut their position on equities to “neutral” from “overweight” because of the drop in China, though they did not expect the sell-off to cause a global recession, citing signs of economic growth in the United States and Europe.

"In the meantime, we recognise the shift in sentiment that is being reflected in recent price action both in equities and, via falling inflation expectations, in bonds," they wrote in a note. 

AMMAN — Jordan Vegetable Oil Industries Company (JVOI) is suing distributors and buyers for about JD3.2 million owed to it within the normal course of business activity.

In a disclosure to the Jordan Securities Commission, the company said  the lawsuits entailed dues in the form of receivables and bounced cheques.

According to the balance sheet as of June 30, 2015, JVOI's receivables totalled JD3.5 million.

The commercial receivables as shown in the balance sheet at the end of last year amounted to JD5.5 million.

Out of this figure, JD2.9 million was deducted as a provision for doubtful assets, leaving net commercial receivables at JD2.6 million.

The total became JD3.5 million when around JD0.8 million in cheques under collection and other dues were added. 

At the end of 2013, net commercial receivables was higher at JD3.8 million.

The auditor said in notes accompanying the 2014 balance sheet that the company expects to collect the doubtful assets in full.

"The company filed lawsuits to collect the doubtful assets it is owed by debtors," the notes stated. "JVOI obtained some guarantees from a limited number of clients but for the remaining receivables, the company does not require security."

Board Chairman Kameel Saad Al Deen told the shareholders in the annual report that the company was continuing a precautionary approach by computing a yearly provision against previous dues whose collection remained doubtful.

In both 2014 and 2013, JD250,000 were added each year as doubtful assets and much smaller amounts were written off as bad debts.

Despite the large financial obligations owed to JVOI by several traders in the market, the company remained profitable even to disburse cash dividends to shareholders at a rate of 7 per cent in recognition of its 2014 performance as recommended by the board of directors and approved by the shareholders this year.

Mid-year results showed a JD0.4 million net profit, slightly higher than the JD0.3 million registered at the end of June 2014 despite a slight decline in sales to JD2.5 million from JD2.6 million.

The impresssive spots in the  income statement as of June 30, 2015 were the ability of the company to reduce production costs and purchases to JD1.6 million from JD1.9 million besides financing expenses.

The performance last year was also positive as net pretax profit came at JD0.6 million compared to JD0.4 million at the end of 2013 although sales were lower at JD5.6 million from JD5.7 million.

Local sales amounted to JD5.3 million and exports JD0.3million.

The board of directors mentioned in a summary report that output in 2014 reached around 3,800 tonnes of vegetable ghee, higher than the 3,600 tonnes of ghee and vegetable oils produced in the previous year.

The summary report estimated the company's market share for its Al Ghazal vegetable ghee at 50 per cent and said JVOI froze oil production due to the present conditions in the market. 

Saad Al Deen indicated in the annual report that market competition was stiff and that traders resorted to importing from neighbouring countries at competitive prices.

He said some local industries were selling poor quality products at prices that cannot be challenged.

"We hereby renew our call to all parties concerned with the industry to take the measures that safeguard the local industry," he wrote in a foreword. 

"Dumping and flooding local markets with imports negatively affects the volume of factory sales," Saad Al Deen said.

The chairman also urged control over locally packed products that do not conform to standards and specifications 

He stressed that the company's competitive position became difficult because some traders were only operating packing units and not plants noting that JVOI cannot perform the same foul methods.

As such, the two risks that face the company during 2015 and the year after were listed as inability to collect some previous receivables and price competition.

Future plans include lowering electricity, fuel and labour costs, and  increasing market share through producing a new type of ghee and launching promotion campaigns.

"Based on the projected budget, local sales and exports are expected to  rise and generate profit as the company is continuing on the same course," the report said, mentioning the United States, Canada among the markets abroad in addition to Gulf Arab states.

The report detailed certain aspects of JVOI's operations indicating that three Malaysian corporations were key suppliers and that Habibeh Sweets and Al Nijmeh Sweets were among its main local customers besides wholesalers.

JVOI, operating at King Abullah II Industrial City in Sahab where it employed 65 workers at the end of 2014, estimated capital investment at  about JD6.2 million at the end of last year.

The factory was established in Amman in 1993 as a subsidiary of  a Palestinian firm established in Nablus in 1953. In 1998, the two factories were disconnected and each became a separate entity.

The shareholders who owned more than 5 per cent of JVOI's JD4 million capital at the end of last year were: Sabih Taher Al Masri (45.1 per cent) and Palestine Development & Investment Co. (17 per cent).

Financially, assets as of June 30, 2015 totalled JD6.1 million, of which JD1.5 million were property and equipment as well as real estate investments.

Current assets included JD0.9 million of inventory and JD3.5 in receivables as mentioned above.

Current liabilities, totaling JD0.7 million, were mostly accounts payable and no bank debt although the company enjoyed several lines of credit from the Arab Bank and Union Bank.

Shareholders equity, totaling JD5.4 million, included JD0.5 million retained earnings and JD0.9 million mandatory earnings.

STOCKHOLM — As demand for water grows, the world must focus on how the precious resource will be shared among farmers, the energy sector and cities if it is to achieve the United Nations' new development agenda, a World Bank expert said this week.

The world faces a 40 per cent shortfall in water supplies in 15 years due to urbanisation, population growth and growing demand for water for food production, energy and industry, according to a United Nations report published in March.

The UN Millennium Development Goals (MDGs), which had focused attention on the needs of poor nations for the past 15 years, included boosting access to clean water and sanitation.

The Sustainable Development Goals, due to be adopted at a UN summit in September to replace the MDGs, broadens water from a narrow access issue to a "fundamental rethink" of how it is managed, said Junaid Ahmad, director at the World Bank's water global practice.

"We're headed into a perfect storm in which over the next 20 years we will see the demand for water growing significantly, driven by thirsty agriculture, thirsty energy and thirsty cities," Ahmad indicated on Sunday on the sidelines of a global water conference in Stockholm.

"If we are to achieve these goals of food and energy security, sustainable urbanisation, and ensure service delivery of water and sanitation to citizens, we now need to figure out how water is going to be allocated across sectors," he said.

Some 2.6 billion people have gained access to clean water since 1990, but more than 660 million still live without access, according to UNICEF and the World Health Organisation.

Ahmad said achieving the new water goal and scaling up access means not only building pipes, but also fixing institutions and improving governance.

Another challenge, he added, is putting a price on water.

"We are in a world in which we are trying to price carbon, but we do not know how to value water," he continued, noting  that because water is a human right, there is an assumption that it should be free.

"Free water is probably the most expensive water for poor people, because whenever you give out free water it's captured by the politically powerful, not by the poor," he indicated.

Other challenges include climate change, which has made the water supply patchy, and the management of groundwater.

"Groundwater is the biggest source of stored water that we have, and yet it has been progressively abused", extracted at a faster rate than it is being recharged, he said.

More than 2 billion people still lack access to toilets, but Ahmad is optimistic that the new goal of universal sanitation coverage by 2030 can be achieved.

"It took developed countries many years to achieve universal access," he added, mentioning that a World Bank simulation showed countries such as France took 25 to 30 years to provide toilets for everybody.

"If we look at history and the pace in which developed countries have changed, then what developing countries are doing today is pretty historic. They are catching up at a very fast rate," he elaborated. 

Separately, an expert described the doom and gloom predictions of increasing battles around the world over water as a myth, with only a handful of disagreements over shared waters leading to armed conflict.

Competition over water has often been cited as having a potential for turning into conflicts between countries fighting to secure the limited resource.

While water is fundamental to development and national security and can contribute to hostile situations, "very few" disagreements have led to conflict, said Therese Sjomander Magnusson of the Stockholm International Water Institute (SIWI).

"It is a myth that water leads to war," Magnusson, SIWI's director of transboundary water management, told the Thomson Reuters Foundation late on Sunday on the sidelines of a global water conference.

She said that over the last 50 years, there have been more than 1,800 interactions on transboundary basins, including both conflict and cooperation.

"Only seven disputes have involved violence," she indicated. "During the same time, more than 200 agreements and treaties on transboundary waters have been signed."

Even though population growth and climate change have led to disagreements over water, conflicts were more common on national levels — such as between pastoralists and farmers — than between countries, Sjomander Magnusson added.

In fact, she continued, many governments are looking into dialogue and cooperation when it comes to water, rather than sending armies against each other.

"In an insecure world that we are facing right now, with many unstable situations, what we've seen over and over again is how governments are eager to position themselves as a stable countries open to cooperation," Sjomander Magnusson said.

One unlikely example in which water issues have led to cooperation is discussions between Israel, Jordan and the Palestinian territories over the Jordan River, which runs along their borders, she indicated.

"This is the only platform where these countries have met for the past couple of years," the expert added

She said data sharing has been a sensitive topic in international water negotiations, but is becoming fundamental as countries cope with the effects of climate change.

Climate change will play an integral role in future water cooperation agreements, she stressed.

"Many treaties on transboundary waters probably need to be revised in line with the new climate change data and maybe a bit more flexible to cope with the extreme weather events," Magnusson concluded.

LONDON — The world's emerging economies are allowing their currencies to slide in a quest to remain competitive, following China's devaluation of the yuan and the dollar's strength in anticipation of US rate hikes.

The currencies of emerging nations in Asia have especially suffered in recent weeks from market speculation that the US Federal Reserve (Fed) will lift interest rates this year, possibly as soon as September.

According to Societe Generale analyst Kit Juckes, those countries "fear a resumption of significant capital outflows if the Fed does raise rates next month, as well as fear of further [yuan] weakness and concern about the sluggish pace of global growth", all of which are strengthening the dollar, euro and yen. 

Other factors, including slumping prices of oil and natural gas, exports that many emerging economies rely on heavily, are also pulling currencies lower or prompting governments to let their value drop.

On Thursday, Kazakhstan decided to cease intervention to support the Central Asian nation's tenge currency, and allowed it to float freely to cope with the plunging price of oil, its primary export.

The result was an historic 23 per cent drop in value to 257 tenge to the dollar.

The objective of that move, says CMC Markets analyst Jasper Lawler, was to allow Kazakh goods to become more competitive with less expensive foreign imports.  

"The government and central bank decided to let [the tenge] free float in order to compete with the declining currencies of its two biggest trading partners; Russia and China," Lawler indicated.

This month's surprise devaluations of the Chinese yuan, also known as the renminbi, by the country's central bank was similarly viewed by many observers as an effort to reverse the recent slump in exports amid accumulating signs of an economic slowdown.

In response to China's currency cut, Vietnam widened the spread its central bank allows the dong to trade, provoking a fall to its lowest ever level of 22.41 against the dollar.

In doing so, foreign exchange experts said Vietnam effectively devalued the dong for the third time this year.

In Russia, under pressure since 2014 from falling oil prices and the effects of Western sanctions over the Ukraine conflict, the ruble resumed its decline against the dollar last week.

The ruble's slump as Russia's economy sank into recession has had serious consequences for the country's neighbours, figuring as a major factor in Kazakhstan's devaluation.

Political factors at play

Such weakening of currencies has been rife across the world's emerging economies, with Lawler pointing to last week's plunge of the South African rand and Indonesian rupee to historic lows against the dollar as examples.

But if Indonesia's currency dip is due largely to depressed prices for commodities it exports, Juckes says the slide of the Brazilian real and Turkish lira extend beyond pure economics.

Brazil, he notes, is facing an enormous corruption scandal as well as flatlining growth, while the drop of Turkey's lira was caused by growing security concerns and increasing political instability.

"It is the weakness of sentiment in [emerging market foreign exchange] which is striking — oil and China's slowdown are the main factors, but the Thai baht is weaker after a deadly bomb blast, the Brazilian real's woes are as much political as economic," says Juckes.

Adding to that febrility is the resurgent dollar being lifted by expectations of looming US interest rate hikes.

When it comes, that move will make returns on greenback investments more lucrative than foreign alternatives, an eventuality already motivating speculators to take such positions while they are still affordable.

But even if worries over China's growth and halting economic activity elsewhere convince US policy makers to postpone a rate hike beyond the anticipated September period, the Fed will almost certainly be the world's first major central bank to begin tightening its monetary policy.

And that, Juckes notes, should motivate investors to exit emerging economies they poured excess liquidity into during the Fed's policy of keeping credit cheap in order to stimulate the world's biggest economy.

WASHINGTON — A cooling of smartphone sales in China suggests the world's biggest market for the devices has reached a saturation point, posing challenges for manufacturers, a research report said last week.

According to a report by Gartner research firm, worldwide smartphone sales in the second quarter showed the slowest growth rate since 2013, increasing 13.5 per cent to 330 million units.

But sales in China were down 4 per cent from a year ago, as growth shifted to other Asian markets and emerging markets in Eastern Europe, the Middle East and Africa, the report indicated.

"China is the biggest country for smartphone sales, representing 30 per cent of total sales of smartphones in the second quarter of 2015. Its poor performance negatively affected the performance of the mobile phone market in the second quarter," said Gartner analyst Anshul Gupta.

"China has reached saturation — its phone market is essentially driven by replacement, with fewer first-time buyers. Beyond the lower-end phone segment, the appeal of premium smartphones will be key for vendors to attract upgrades and to maintain or grow their market share in China," he added.

The survey confirmed earlier reports on market share: Samsung remained the top seller with a 21.9 per cent market share, but its overall handset sales fell five per cent to 72 million units.

Apple boosted its market share to 14.6 per cent as iPhone sales jumped to 48 million units.

Three Chinese makers rounded out the top five, Gartner found: Huawei at 7.8 per cent, Lenovo at 5 per cent and Xiaomi at 4.9 per cent.

The Google Android operating system remained dominant with 82.2 per cent of the market, but dipped from 83.8 per cent a year earlier, Gartner said. Apple's iOS accounted for 14.6
per cent.