Business

AMMAN — Selectivity rewarded Philadelphia Insurance with a JD0.9 million technical profit last year as the company also steered clear of price undercutting.

Net profit after deducting various expenses stood at JD0.8 million last year compared to a JD0.6 million loss in the previous year and a JD0.5 million deficit recorded in 2012.

The company's 2014 annual report, disclosed last week to the Jordan Securities Commission (JSC), described 2014 as "good" despite the challenges facing the sector, especially the volume of paid claims related to vehicle insurance, and the weak performance of local financial markets.

Philadelphia Insurance indicated in the report that gross written premiums realised last year amounted to JD6.9 million, slightly higher than the figure achieved in 2013.

Net paid claims were much higher in 2014 reaching JD5.3 million from JD4.8 million in the previous year.  

According to the disclosure, vehicle insurance was the main source of  earnings and generated most of the profit for the company last year as it netted JD0.7 million in income although the premiums from this category were lower at JD5.5 million.

In 2013, when premiums were higher at JD5.8 million, vehicle insurance was JD1 million in the red.

The company said the halt to third party liability compulsory insurance from August 5, 2014, until December 31, 2014, after reaching the level allowed under directives, was behind the transformation.

It added that the jump from loss to profit was also due to its modification of insurance policy and becoming more selective, such as rejecting some losing categories or raising the premiums on them.

Medical insurance was highly profitable as written premiums in this section reached JD1.2 million, 37 per cent higher than the JD0.9 million posted in 2013, the company indicated, noting that medical insurance generated JD133,386 profit last year.

Profits from marine/transport and fire/general accident insurance were marginal.

Philadelphia Insurance mentioned in the annual report that the Jordan Press Foundation/Al Rai' and the Ports Corporation became among its clients after it was successful last year in winning several insurance tenders with substantial volume.

According to the company, whose workforce comprises 53 employees, its share of the market with the exception of life insurance stands at 1.45 per cent as premiums account for 6.9 million out of a JD474.8 million gross market volume generated by 28 companies that operate in the local market.

To enhance its future investment portfolio and position, Philadelphia Insurance is conducting a feasibility study to confirm the viability of establishing a commercial building on a plot of land it owns in the Quweismeh neighbourhood of Amman.

The land carries a JD84,850 book value but its market value is much higher, just like the building in Jabal Al Hussein where Philadelphia Insurance has its head office.  

The building carries a JD152,239 book value but the market value is much higher.

Besides the real estate, the company's investments include shares in corporations listed on the Amman Stock Exchange and deposits at 10 banks earning interest between 3 per cent and 4.25 per cent.

"Despite market conditions, substantial increase in paid claims, and higher reserves, the company maintained good liquidity," the report said.

It indicated that cash in banks amounted to JD8.3 million, or 206 per cent of capital,  as of December 31, 2014, compared to JD8.8 million at the end of 2013. JD225,000 are restricted to the order of the Insurance Commission (IC).

The value of shares held by the company came at JD0.5 million, representing 12 per cent of the capital as of December 31, 2014, slightly lower than the amount at the end of the previous year. 

It also intends to activate its subsidiary, Philadelphia for Financial Development and Real Estate Development Company, with additional income from non-insurance business, especially housing projects.

The subsidiary, without staff, is capitalised at JD0.5 million  

The annual report, delayed for technical reasons and a difference of opinion with the IC, estimated the company's 2014 capital investment at JD4 million, unchanged from the previous year.

Financially, the balance sheet as of December 31, 2014, showed total assets at JD11.5 million, comprising mainly JD8.8 million of investments and JD2 million of receivables.

Capitalised at JD4 million, shareholders equity totalled JD3.8 million as it included JD0.7 million mandatory reserve and JD0.8 million accumulated losses.

Out of JD7.4 million in total liabilities, JD6.2 million were net provisions for claims and for unearned premiums.

Out of 158 investors, shareholders who own more than 5 per cent of Philadelphia Insurance's capital are Adham Nabih Al Idrissi (9.3 per cent), Hatem Mahmoud Hussein (10.5 per cent), Ahmad Hatem Mahmoud Hussein (8.8 per cent), Mahmoud Hatem Mahmoud Hussein (8.7 per cent), Moheiddin Mohammad Al Jamal (9.4 per cent), and Mahmoud Khalil Abdul Rahman Abul Rub (16.8 per cent). 

NEW YORK — Democratic front-runner Hillary Clinton put the fight for higher wages for everyday Americans at the heart of her economic agenda on Monday and talked tough against Wall Street in the first major policy speech of her White House bid.

Clinton said the US economy will only run at full steam when middle-class wages rise steadily along with executive salaries and company profits.

"I believe we have to build a growth-and-fairness economy. You can't have one without the other," she said at The New School university in Manhattan's Greenwich Village, a bastion of liberal education.

Clinton's choice of location, a liberal arts college with annual fees of around $60,000, embodied the financial hurdle that middle-class parents face in educating their offspring. But she barely mentioned college debt.

With one eye on the growing support for Vermont Senator Bernie Sanders, a self-described socialist who is also seeking the Democratic Party nomination, Clinton laid out a vision of economic equality.

"Corporate profits are at near-record highs and Americans are working as hard as ever but paycheqes have barely budged in real terms. Families today are stretched in so many directions and so are their budgets," Clinton said.

"Families deserve to get ahead and stay ahead. The defining economic challenge of our time is clear, we must raise incomes for hardworking Americans," Clinton told a hand-picked audience. "I want to see our economy working for the struggling, the striving and the successful."

She promised to increase incomes on three tracks: strong growth, fair growth and long-term growth in a sweeping vision of promises that drilled down little into substance on how they could actually be achieved.

The former secretary of state promised to push for a broader reform of the US corporate tax code. 

She criticised Republicans for 35 years of "trickle down" economics, tax cuts for the richest and big corporations writing their own rules, which she said "does practically nothing to help hardworking Americans."

She repeated calls for tax relief for small businesses, investments that would create jobs, improve infrastructure, bolster renewable energy and make it easier for women to join the workforce.

America has dropped from seventh to 19th out of the 24 most advanced nations in terms of women's labour participation rate, Clinton indicated.

Clinton, a former first lady, US senator and secretary of state, is the favourite to win the Democratic nomination for the November 2016 presidential election but Sanders has drawn large crowds at campaign events.

She talked tough against Wall Street, promising to go beyond the 2010 Dodd-Frank law that imposed stronger regulations on the financial industry.

"Too many of our major financial institutions are still too complex and too risky and the problems are not limited to the big banks that get all the headlines," she said.

Clinton warned that "serious risks are emerging from institutions in the so-called shadow banking system including hedge funds, high-frequency traders, non-bank finance companies" and other entities "which receive little oversight at all".

She will unveil more specifics of her economic policy in a series of speeches in coming weeks as Democrats seek more details of her plans on increasing the minimum wage, creating universal preschool and investing in infrastructure.

It has become too difficult for Americans to be good workers and good parents at the same time, she said, calling for paid leave, quality affordable childcare and equal pay for women.

Comprehensive immigration reform, she added, would increase gross domestic product (GDP) by $700 billion over the next decade.

"Inequality is a drag on our entire economy so this is the problem we need to tackle," she continued.

She ridiculed Republican contender Jeb Bush saying the solution to the economy was Americans working longer hours, saying nurses, teachers and truckers "don't need a lecture. They need a raise," to big cheers.

She singled out another Republican contender, Marco Rubio, for "bad economics" and proposed tax cuts for households making $3 million a year as a "budget-busting giveaway to the super wealthy".

She vowed to build on Obama's Affordable Care Act by lowering out-of-pocket healthcare costs and making prescription drugs more affordable.

Acknowledging that many of her proposals "are more than a little battle scarred", she advanced profit sharing as a new idea.

"Hardworking Americans deserve to benefit from the record corporate earnings they helped to produce," she said.

She listed long-term growth as the third key driver of income, criticising what she called "quarterly capitalism" when companies focus on the next earnings report at the expense of long-term growth.

She promised to "rein in excessive risk on Wall Street" and in reference to well-known banking scandals insisted "there can be no justification or tolerance for... criminal behavior".

In another swipe at the Republicans, she called for policies based on evidence, not ideology. 

"We have to break out of the poisonous partisan gridlock and focus on the long-term needs of our country."

At the end of her speech, a member of the audience who heckled Clinton about banking legislation was swiftly escorted out by security and his cries drowned out by a standing ovation.

SYDNEY/LONDON — Realtors in Australia, Britain and Canada are bracing for a surge of new interest in their already hot property markets, with early signs that wealthy Chinese investors are seeking a safe haven from the turmoil in Shanghai’s equity markets.

Sydney realtor Michael Pallier indicated that in the past week alone he has sold two new apartments and shown a A$13.8 million ($10.3 million) house in the harbourside city to Chinese buyers looking for an alternative to stocks.

“A lot of high net worth individuals had already taken money out of the stock market because it was getting just too hot,” Pallier, the principal of Sydney Sotheby’s International Realty, said.

“There’s a huge amount of cash sitting in China and I think you’ll find a lot of that comes to the Australian property market,” he added.

Around 20 per cent has been knocked off the value of Chinese shares since mid-June, although attempts by authorities to stem the bleeding are having some effect.

Many wealthy Chinese investors had already cashed out. Major shareholders sold 360 billion yuan ($58 billion) in the first five months of 2015 alone, compared to 190 billion yuan in all of 2014 and an average of 100 billion yuan in prior years, according to Bank of America Merrill Lynch.

While much of that money may initially be parked in more liquid assets like US Treasury bonds and safe-haven currencies such as the Swiss franc, there is growing evidence that foreign property sales may receive a boost.

“There is anecdotal evidence that Chinese buyers have intensified their interest in ‘safe haven’ global property markets, including London, as a result of the recent stock market volatility,” indicated Tom Bill, the head of London residential research at Knight Frank.

Ed Mead, the executive director of realtor Douglas & Gordon in London, said his firm had seen two buyers from China looking to buy whole blocks of flats.

“It is unusual to see the Chinese block buying, it implies that this is a capital movement rather than just individuals looking to park money,” he added.

Rich exodus

Since 2000, China has had the world’s largest outflow of high net worth individuals.  

Around 91,000 wealthy Chinese sought second citizenship between 2000 and 2014, according to a report by residence investment broker Lio Global, a factor that is fuelling demand to buy foreign property.

Most of these individuals, defined as those with net assets of $1 million or more excluding their primary residences, are moving to the US, Hong Kong, Singapore and Britain.

Brian Ward, the president of capital markets and investment services for the Americas at commercial property company Colliers International, indicated that Chinese investors had already sunk around $5 billion into US real estate in the first six months of 2015, more than the $4 billion they invested in the whole of 2014.

In London, Alex Newall, managing director of super prime residential realtor Hanover Private Office estate agents said he had seen an increase in interest from Chinese investors at the top of the market, although no transactions yet.

“They’re wanting to try and park large sums of money — I’m talking from £25 million ($38.5 million) to £150 million,” Newell added. “They’re looking to park that capital into London homes.”

Australia and Canada are also increasing in popularity, gaining an edge from their weakening currencies.

“Property prices are still cheap in RMB [yuan] terms,” said Timothy Cheung, a principal of Morphic Asset Management in Sydney.

Backing out

The rush by Chinese investors into foreign property has not been without criticism, with some in London, Sydney and Vancouver blaming them for pushing up already spiralling prices.

The Australian government has moved to look tough on the issue, introducing new fees and jail terms for those found flouting foreign investment rules. 

The Chinese owner of a A$39 million Sydney mansion was forced to sell up earlier this year after it was revealed the property had been bought illegally through a string of shell companies.

Others are concerned that Chinese investors who didn’t bail out of stocks quickly enough will be a drag on international property markets, particularly after Beijing on Thursday banned shareholders with large stakes in listed firms from selling for six months.

In London, Naomi Heaton, the chief executive of London Central Portfolio, said she had heard of investors pulling out of new-build purchases because they no longer had the capital.

It was a similar story for Vancouver real estate agent Andrew Hasman, who focuses on the city’s affluent westside area.

“I had a call last week from another agent wanting to know if a seller of a transaction we just did would allow the buyer to back out, because they had just recently lost a huge amount of money in the Chinese stock market correction,” Hasman said.

TORONTO — Canada's housing boom is increasingly driving homebuyers to seek mortgages from private lenders, who demand rates that can be more than five times higher than those charged by the nation's banks.

Canadian house prices have risen 36 per cent since June 2009, according to the Teranet-National Bank house price index. At the same time, Canadian banks have become more conservative and regulators are making it harder to lend, giving rise to an alternative market, including Canadians who refinance their own homes at low rates and then use the money to become mortgage lenders themselves.

Some analysts say a housing investment is increasingly risky because the pace of price increases has vastly outstripped wage growth, all amid a time of historically low interest rates and record debt levels. 

If and when interest rates rise, the concern is that consumers would have little ability to increase their payments, because they have so much debt.

"The risk arises if the unintended consequence of regulation is to push out the risk profile of the less regulated sector and to encourage it to grow quickly at the same time," said Finn Poschmann, vice president of policy analysis at the CD Howe Institute, a think tank. 

"In dollar terms, it is not a huge part of the economy [but] my concern is that we pay attention, because small problems sometimes get unexpectedly large, and quickly so," he added.

Mortgage broker Lou Perrotta indicated that in terms of volume, 20 per cent to 30 per cent of the mortgages he puts together are now privately financed, typically because borrowers are declined for a bank loan for reasons like a low credit rating or unsteady income. 

That represents about C$4 million to C$5 million of the C$20 million ($15.69 million) of mortgage business he does annually, he remarked.

"Business is brisk, without question. [It has] probably tripled in the past three years," said Perrotta, president of Domus Financial Corp. in Toronto, where house prices have increased by 55 per cent in the last six years.

Perrotta acts as a matchmaker between individuals who have money to lend and who are seeking higher rates of return than can be had in stocks or bonds, and borrowers who are willing to pay a higher mortgage rate to get into the market.

He also invests his own money, lending between C$25,000 and C$250,000 each to "five or six" borrowers a year who offer a good balance between risk and return.

"It's not for the faint of heart, and you need to understand the dynamics of real estate," Perrotta said.

One private lender, who asked not to be named because she is close to the real estate market and fears hurting her business, took out a C$400,000 mortgage on her paid-off home at 2.49 per cent and then gave that money to a broker that lent it to a borrower at a higher rate, for a fee.

"Who the hell is going to give me 9 per cent return?" said the lender, who noted that she has recourse to the borrower's assets if he defaults.

According to CIBC senior economist Benjamin Tal, the shadow lending market represents about 4 to 5 per cent of Canada's overall mortgage market.

"This is something that is growing very fast, because many borrowers are not having access to banks because the banks are highly regulated," said Tal.

In Ontario, Canada's most populous province, private lending accounts for about 4 per cent of new mortgage originations, or C$1.1 billion ($878.8 million), or 2 per cent, of total mortgage lending by dollar value, according to Teranet.

While that's a fraction of the sub-prime lending that got the US housing market into trouble seven years ago, analysts are concerned that the market is growing rapidly and may be concentrated in hot housing markets such as Toronto and Vancouver where a sudden downturn could take hold.

Legal practice

The practice is legal, and can be done through a person-to-person loan, in which the lender is named as a lien-holder on the mortgage, or through a Mortgage Investment Corp., in which investors can pool their money to lend to those who either don't qualify for a traditional loan.

While major Canadian lenders offer five-year fixed mortgage rates at about 2.5 per cent to qualified borrowers, rates in the private market range between 7 per cent and 15 per cent, one mortgage broker indicated.

Traditional lenders also send business to alternative lenders, feeding the pipeline.

Royal Bank of Canada (RBC), the country's biggest bank, said when a client does not qualify for a mortgage, the bank will recommend an alternate lender, which may include a trust company, a mortgage broker or a private mortgage corporation, an RBC spokesman said in a statement.

Canada's financial system regulator, the Office of the Superintendent of Financial Institutions (OSFI), said it monitors the alternative mortgage market but would not comment on its size, whether it was growing or whether OSFI had any concerns.

Anthony Croll, the vice president of Individual Investment Corporation, a Montreal-based private lender that has been in business since 1958, said he's seen a rise in the number of small private lenders over the last few years competing with the 10 per cent to 12 per cent interest his company would charge.

He also thinks inexperienced lenders may be underestimating the risks associated with non-payment of a loan.

"Occasionally an accountant or someone else has said, after hearing about our rates, or what the deal is, 'I can do that myself'," Croll said. "But you know everything is easy and fine to do until you have a problem."

In a separate dispatch from Vancouver, Reuters said that after years of watching housing prices climb, driven in part by Chinese investment, Eveline Xia came to a painful realization: Despite having a master's degree and solid career prospects, she might never be able to afford a home in the city where she grew up.

That didn't seem right, and so the 29-year-old grabbed a marking pen, hand lettered a sign listing her credentials, snapped a selfie, and posted it to Twitter under the hashtag #DontHave1million.

The tweet went viral, and hundreds of other young Vancouver residents soon began expressing their own frustrations in tweets about the red hot housing market, and the feverish foreign investment they believe has fuelled it.

"Average, hardworking Canadian residents are being forced to compete for housing with the global wealthy," said Xia, who immigrated to Canada from China as child. "People here are getting angry."

That anger has contributed to a simmering xenophobia in Vancouver, a multicultural coastal city long known for its inclusiveness. 

With virtually no official data on foreign buyers available, many of those squeezed out of the market are left to believe the worst.

That has residents like Xia pressing the government to track international buyers, scrutinise the source of their funds and tax property speculation, before the anti-Chinese sentiment gets out of hand.

Last summer, a small anti-immigration group covered up Chinese symbols on real estate signs in the affluent suburb of West Vancouver with stickers reading "Please Respect Canada's Official Languages."

And police are investigating incidents on neighbouring Vancouver Island, where anti-Chinese pamphlets appeared in affluent neighbourhoods and signs for Chinese real estate agents were defaced with racial epithets and messages like "Go home" and "Not welcome".

A recent poll found that two-thirds of metropolitan Vancouver residents believe "foreigners investing" is a main cause of high housing costs, and 70 per cent said the government should work to improve affordability.

Skyrocketing prices

In the last five years, the median selling price for residential properties in Vancouver has jumped 57 per cent to C$1.1 million, according to data compiled by Reuters from the Real Estate Board of Greater Vancouver. 

The price of detached homes has soared 82 per cent, to C$2.1 million. 

The median household income, meanwhile, has risen by an estimated 13 per cent in the same period, according to Statistic Canada.

But since the government keeps no records on the nationality of home purchasers, evidence that money from China is driving up housing prices is largely anecdotal.

In interviews, five real estate agents who primarily sell homes on Vancouver's exclusive west side estimated that between 50 per cent and 80 per cent of their clients have financial ties to mainland China.

A Reuters survey of 50 land titles for detached Vancouver Westside homes that sold for more than C$2 million in the last year found that nearly half of the purchasers had surnames typical of mainland China, as distinct from those of earlier waves of immigrants from Taiwan and Hong Kong.

There was no way, however, to determine the citizenship or residency of those buyers. And indeed, many wealthy newcomers from mainland China are permanent residents of Canada.

Activists like Xia are pushing the government to at least start tracking foreign buyers and to make the information public.

"By not addressing it, they're letting anger and resentment build through whispers and at dinner parties," said Xia.

Capital flight

Residents also have questions about the source of Chinese money being invested in Vancouver property, a concern that came to the fore last year when a prominent developer in the city, Michael Ching Mo Yeung, was named as one of the top 100 fugitives wanted by China as part of “Operation Skynet”.

The campaign is part of President Xi Jinping's pursuit of suspected corrupt officials who have fled overseas.

In the wake of news about Ching, there have been calls for greater scrutiny of foreign buyers and tougher enforcement of anti-money laundering standards.

"I would love someone to look into the due diligence standards [for real estate brokers] around 'know your customer'," said James McDonald, who runs a blog that maps million-dollar homes that sit empty after being purchased by speculators.

He and others note that many properties are purchased by trusts or companies that aren't transparent.

But not everyone is convinced that Chinese money is primarily responsible for the rise in housing prices, noting that it has also been fueled by interest rates that are near record lows and a tight supply of detached houses.

"The reason why we're seeing this racialised narrative is people are looking for a scapegoat," said Victor Wong, the Toronto-based executive director of the Chinese Canadian National Council.

"It's infected the population," he added. "People have bought into this narrative that there's a flood of foreign money into the market when there's just no evidence beyond a few anecdotes."

Mixed feelings

With frustrations mounting, Vancouver Mayor Gregor Robertson in May called on British Columbia's government to impose a speculation tax.

The province declined, saying there was not enough hard evidence that foreign money was driving the market and that a new tax could hurt existing homeowners.

But even those who benefit from the housing boom have mixed feelings. 

At a recent open house in Vancouver, real estate agent Fatemeh Nouripour watched group after group of prospective buyers, most of whom appeared to be from mainland China, trudge through a fixer-upper listed for C$1.58 million.

"As an agent, I want to sell to whoever will pay the most," Nouripour said. "But I'm also a mother. My daughter has a master's degree, she works hard and pays taxes, and she can't afford to buy because foreigners are parking their money here. How fair is that?"

AMMAN — Arab Bank Group announced Saturday in a press statement that its midyear net profit before tax reached  $559.7 million.

The press statement indicated that net profit after-tax and provisions during the first half of this year amounted to $422.9 million, 2 per cent higher than the $414.9 million registered during the January-June period of last year. 

It remarked that the figures are preliminary and subject to the approval of the Central Bank of Jordan.

"Arab Bank maintained a strong and healthy capital base as shareholders equity stood at $8.1 billion, with a capital adequacy ratio of 14.3 per cent," the statement said.

"Customer deposits also increased reaching $34.8 billion compared to $34.4 billion at June 30, 2014," it added. "Loans and advances grew to $24.1 billion compared to $23.7 billion."

The bank noted that excluding the effect of exchange rate devaluations, loans and customer deposits increased by 5 per cent and 4 per cent  respectively.

In the press statement, Arab Bank Chairman Sabih Masri stated: “The financial performance during the first half reaffirms the bank's progress in implementing  its successful strategy.”

Arab Bank’s Chief Executive Officer Nemeh Sabbagh stressed the bank’s focus on its core banking activities as well as its efficient asset allocation, pointing out that net operating income grew by 4 per cent to $590.8 million during the first six months of 2015.

"The bank continues to maintain comfortable liquidity ratios as a strategic goal with a loan-to-deposit ratio of 62.5 per cent," Sabbagh said.

Masri concluded that Arab Bank is consistently utilising the strength of its branch network to provide the best banking services to its customers which will enable the bank to continue achieving further success and to maintain sustainable growth.

Arab Bank received the award of "Best Bank in Jordan" from Euromoney and The Banker Middle East, in addition to "Best Trade Finance Bank in the Middle East" award for the year 2015 by New York-based Global Finance magazine.

UFA, Russia — The BRICS emerging nations said on Thursday they were worried about the volatility of global financial markets and oil prices and agreed to coordinate efforts to keep their economies stable.

Leaders of Brazil, Russia, India, China and South Africa  finally launched the group’s largest initiatives to date, a development bank and a currency pool, and called at a summit for a swift deal on curbing Iran’s nuclear programme.

For Russian President Vladimir Putin, hosting the summit in the city of Ufa, the launch of the bank and the pool had been a key priority, as was the group’s ability to sound more unified than at some previous meetings.

“We are concerned about the instability of the markets, the high volatility of energy and commodity prices, and the accumulation of sovereign debt by a number of countries,” Putin said.

“These imbalances affect the growth rate and our economies. In these circumstances, the BRICS states intend to actively use their own resources and internal resources for development,” he added, without giving details.

Frantic efforts by Beijing to stem a stock market rout helped Chinese shares bounce back on Thursday after tumbling for more than a week, but the costs of the heavy-handed state intervention are likely to weigh on the market for a long time.

Chinese President Xi Jinping refrained from comments about the slump, saying only that there are “difficulties” in the global economy, but urged the BRICS to increase coordination.

“Let’s go hand in hand to build a great BRICS partnership,” he told the group.

The BRICS account for a fifth of the world’s economic output and 40 per cent of its population.

More unity?

For Russia, hit by Western sanctions over its role in the Ukraine crisis that have cut off access to Western funding, thwarted investment and contributed to an economic downturn, greater cooperation among the BRICS nations is key.

Its economy has also suffered because of the fall in the global price of oil, its main export, and it has been looking for new markets since relations with the West sank to their lowest point since the Cold War over the Ukraine crisis.

But the diverse group, which has been meeting regularly since 2009, has struggled to come up with unified actions, often instead focusing on criticising the West.

The group’s New Development Bank has taken more than three years to be established with tough negotiations on funding, headquarters and personnel issues.

The bank, which is to start lending no earlier than next year, is to have $50 billion in starting capital which will be doubled within the next few years and focus mainly on issuing debt for infrastructure projects.

“The New [Development] Bank will help finance joint, large-scale projects in transport and energy infrastructure, industrial development,” Putin said.

Russia’s increased focus on Asia since the crisis in Ukraine began has brought some successes: on Thursday, its finance minister said China had bought around $1 billion worth of Russian domestic bonds this year.

The group called in a summit declaration for a swift permanent agreement on curbing Iran’s nuclear programme in exchange for relief from economic sanctions. The language of the statement was careful, and devoid of finger-pointing.

Russia and China are part of the talks between Iran and  six major world powers.

The BRICS called for “the normalisation of trade and investment with Iran” and said any deal should “provide for the comprehensive lifting of sanctions imposed on Iran”.

The group also issued a statement on the conflict in Ukraine, calling for full implementation of an agreement reached in February on ending fighting between pro-Russian separatists and pro-Kiev forces in east Ukraine.

AMMAN — Jordan Housing Developers Association (JHDA) President Kamal Awamleh on Thursday discussed with his Palestinian counterpart Nizar Rimawi, bilateral cooperation ties.

The meeting covered information and expertise exchange, especially since Palestinians suffer a lot of complications and obstacles imposed by the Israelis. They also discussed activating the memorandum of understanding both sides signed in late 2013, and exchanging expertise among workers at the sector in the two countries.

Awamleh expressed JHDA’s readiness to support the Palestinian housing sector and provide it with all types of assistance it needs.

Rimawi invited Awamleh and association members to visit Palestine and check on the development the housing sector has achieved. He also expressed the union’s willingness to organise a housing exhibition in Amman to showcase the sector’s accomplishments and offer housing units for those willing to buy real estate in Palestine.

LONDON/ATHENS — The cash economy emerging after the closure of Greece's banks is beginning to paralyse the country's vital olive oil industry as farmers demand cash for supplies that distributors are unable to pay.

With the country's lenders at risk of default, Greece's half a million olive growers, many of them small family businesses, fear the banks will raid their accounts and are refusing to accept large payments via bank transfer.

"They want it in cash or they prefer to keep their olive oil in their tanks," said Chris Dimizas, managing director of extra virgin olive oil producer Greekpol in the northwestern Peloponnese.

Greekpol does not have enough banknotes to keep paying the farmers even after it asked its own customers, supermarket chains, grocery shops and restaurants, to pay their invoices in cash, Dimizas added.

"It worked for one week, but it won't work forever," he indicated. "If we keep being unable to find a raw material supplier that can be paid through the banking system and not only in cash, the deliveries will stop immediately."

He said the company also risks running out of bottles and caps as they are supplied from abroad and capital controls make it hard to wire payments to foreign suppliers.

Gaea, another olive oil supplier, is offering farmers cheques that they can cash once the banks reopen.

"A single olive oil cargo costs about 100,000 euros, so you can imagine we don't have such sums in cash," CEO Aris Kefalogiannis told Reuters. He said he had secured most of the supplies he needs to keep operating until mid-August.

Gaea was paying some suppliers and transport firms using online banking.

"If web banking transactions stop, I don't know whether we will be able to export. In that case, we will have to see if we can use foreign transport firms," added Kefalogiannis.

Olives have been cultivated in Greece for thousands of years and today the country is the world's third-largest producer of olive oil.

Exports have grown about twice as fast as domestic consumption over the past two decades but, compared to Spain and Italy, there is very little large-scale industrialised olive farming.

Of 520,000 olive growers, only half are professional farmers, according to the United States Department of Agriculture. The rest are small-scale family businesses with relatively little commercial expertise.

"Our clients abroad feels sympathy for the situation and are trying to support us," said Dimizas at Greekpol. "We do not even want to think about what would happen if we left the euro."

AMMAN — Interests and commissions on bank loans caused much of Optimiza's accumulated losses, the company told the Jordan Securities Commission (JSC) last week. 

Optimiza, the brand under which Al Faris National Company for Investment and Export operates, ranked financial expenses as the first reason for the losses pile up followed by provisions, investments abroad and depreciation. 

Al Faris offers fully integrated solutions and services in consulting, technology, outsourcing and training. 

In a letter clarifying the indebtedness to the JSC, Al Faris indicated that between January 1, 2011 and March 31, 2015, financial expenses amounted to JD4.4 million, accounting for 46 per cent of the accumulated losses.

Al Faris also repaid JD4.6 million to banks during the aforementioned period.

The accumulated losses since the start of 2011 reached JD9.6 million, or 60 per cent of the capital, at the end of this year's first quarter after all previous losses were written off on December 31, 2010, under a capital restructuring process.

In the letter, the company pointed out that bank debts at the end of last year totalled JD12 million and that it pays around JD1 million annually in interests and bank expenses, and JD1 million in installments to repay the principal amount and credit facilities.

To rectify the fresh financial strains, the company's future work plan includes raising the capital by JD10 million to JD26 million during the fourth quarter of this year by attracting strategic partners.

According to the letter, the new money from the capital increase will be used to pay off about JD8 million of the overall bank debts.

"This arrangement will have a very positive effect in terms of cash flow and higher profitability as the bank interest expenses will be lower," it said.

Optimiza added: "The remaining funds will be used to activate the working capital requirements and market the company's services regionally, particularly in Gulf Arab countries and North Africa."

The company expects all these matters to enhance its operational qualifications and capabilities to generate income.

Besides the injection of funds, the company's future work plan includes restructuring the debts through rescheduling most bank loan agreements.

Another reason behind the deficit that built-up over the past few years, was the JD2.2 million of provisions representing 23 per cent of the accumulated losses.  

"The provisions were taken by the company to safeguard against any obligations that may arise and to cover the impairment in the value of the goodwill and computer programmes," Optimiza Chief Executive Officer Majed Sifri said.

He added that an impairment test by a financial expert set the gap at JD3.9 million which the company's board of directors found it not indicative of present reality. 

Accordingly, the board decided to allocate a JD0.5 million impairment provision each year starting 2014 until the whole amount is covered.

Noting that a JD625,000 provision was made by the end of March 2015, Optimiza indicated that the accumulated losses would reach JD12.9 million with the full impairment charge.

The third reason given by the company for the grave deficit was the losses from investments abroad as well as depreciation expenses.

"Investments abroad from the beginning of 2011 until March 2015 resulted in JD1 million losses, or 11 per cent of the accumulated amount," Sifri indicated. "Losses from depreciation came at JD0.6 million, a rate of 6 per cent."

Losses amounting to JD1.3 million also piled up from the company's operations and non-operational expenses.

After this analysis, Al Faris acknowledged that it was wrong in delaying the capital increase from 2011 until the second quarter of 2014 and also 

in rescheduling the debts more than once to ease pressure on the cash flow.

These two missteps resulted in more bank interest and expenses that exacerbated the losses, Optimiza said.

Besides constraints from regional instability, the company explained how the liquidity squeeze hampered its operations in terms of obtaining supplies and dealing with suppliers, and how the freeze on credit facilities by banks, until the capital restructuring was completed, inhibited its functions to obtain local and regional business orders.   

Under the 2015-2016 operational and financing work plan, Al Faris will target mega and long-term projects in addition to the JD35 million worth  of jobs it is shouldering at present.

Al Faris said it will rely on the strategic partnership with CCC to obtain major regional construction projects and on a recently established mega-sales unit to develop and expand its scope of business.

"When trading Al Faris shares resumes on the Amman Stock Exchange in the coming days, it will be one of the most important factors that will enable Optimiza to attract new investors to finance the working capital  and achieve the company's future plan," the letter concluded.

BRATISLAVA — The eurozone's poorer former communist nations, having themselves endured painful market reforms and austerity programmes, are taking a hard line on Greece after its people voted to reject bailout terms.

Estonia, Latvia, Lithuania and Slovakia have long insisted they are too poor to pay for the mistakes made by wealthier Greece and that it should have stuck to the reforms and austerity measures laid out in its massive 240-billion-euro ($273 billion) bailout. 

"I hear some Greeks have pensions over 1,000 euros ($1,100) a month. That's outrageous. I refuse to pay for their debt while they are making fortunes compared to my salary," Bratislava waitress Martina Lelovicova said on Monday in a country where the average monthly salary is 880 euros.

"It's good news for the eurozone. Greeks should leave it, this will only make it healthier," a Bratislava entrepreneur in his thirties who wished to remain anonymous said of Sunday's Greek referendum result.

Slovak Finance Minister Peter Kazimir, the first Eurogroup minister to warn that the Greek 'No' raises the spectre of a "Grexit" or exit from the euro, told reporters: "With the result of the referendum, a possible crisis scenario, the gradual withdrawal of Greece from the eurozone, is unfolding."

Slovakia, an ex-communist nation of 5.4 million people that joined the eurozone in 2009, has suffered stubbornly high joblessness despite brisk economic growth in recent years.

Its leftist Prime Minister Robert Fico insists "Slovakia will not be harmed as a result of Greece and its decision to stay or leave the single currency union", as Bratislava "did not give any cash, only our guarantees" as part of previous Greek bailouts. 

'Bad and worse choices left' 

But not all poorer eurozone members have nothing to lose: Estonian President Toomas Hendrick Ilves tweeted Monday that "Greece's creditors [are] not just banks".

"Eurozone countries poorer than Greece stand to lose up to 4.2 per cent gross domestic product," he wrote. 

Prime Minister Taavi Roivas for his part said Greece "now only has bad and worse choices left" and reforms "are unavoidable". 

"We expect the Greek government to understand the situation and show decisiveness and action within hours," he added.

Having broken free from the crumbling Soviet Union in 1990-91, tiny Estonia and Latvia joined the eurozone in 2011 and 2014 respectively, followed by neighbour Lithuania in January this year. 

All three Baltic states implemented drastic austerity measures to recover from deep recessions triggered by the 2008-09 global financial crisis, paving the way to eurozone entry and stable economic growth, now around 3 per cent in the region.

Estonia, the eurozone's smallest member since 2011, approved an initial Greek bailout but has since said “No” and insists that all eurozone members adopt its strict fiscal discipline.  

Tallinn boasts the eurozone's lowest debt-to-gross domestic product (GDP) ratio of 10.6 per cent.

"Estonians don't really understand the Greek attitude. We are used to saving and living frugally," Merit Kopli, editor in chief of Estonia's leading Postimees daily, told AFP.

Maie Mets, a 72-year-old pensioner, said: "As I understand it, the Greek standard of living is higher than ours here in Estonia. It is only normal that people pay their debts."

'No sympathy' 

Latvia was hit hard by the global financial crisis, suffering the world's deepest recession when GDP shrank by nearly a quarter over two years. 

Yet the nation of some 2 million bounced back after implementing austerity cuts under the terms of a 7.5-billion-euro international bailout it secured to avert bankruptcy. 

"When we went through the international bailout, did anyone come to rescue us?" asked Zenija Lace, a 61-year-old Riga office worker. 

"I have no sympathy for the Greeks. They should have started paying taxes long ago. If they want money from Europe, they should have started saving!" added 59-year-old Riga businesswoman Brigita Petersone. "How is it that we could endure all of it and they can't?"

Separately, Greece leaving the eurozone has tipped over to become the base case for many international bank economists after Sunday's overwhelming “No” vote against further austerity imposed by creditors.

A Reuters poll of more than 70 economists published a week ago, just before Greece defaulted on a 1.6-billion-euro payment to the International Monetary Fund (IMF), placed the median probability of Greece leaving the eurozone at 45 per cent.

Since then, BNP Paribas, J.P. Morgan, RBS, Barclays and Societe Generale, among others, have revised their forecasts for Greece to remain in the eurozone and are now expecting it to leave. 

Other banks, like Investec, have flagged it as a serious risk that may soon become the most likely outcome.

While few put an exact figure on the probability, that suggests the consensus has now risen above 50 per cent, at least among large international bond dealers.

"We argue that EMU [European Monetary Union] exit now is the most likely scenario," wrote economists at Barclays in a note, even before the final referendum results were in.

"Agreeing on a programme with the current Greek government will be extremely difficult for European Union leaders, given the Greek rejection of the last deal offered and will be a difficult sell at home, especially at the Bundestag or in Spain ahead of the general elections."

There was a more muted response to Sunday's vote from financial markets while some other economists were also more sanguine.

"An easier route towards a resolution has been ruled out and therefore the risk of a Grexit has risen," wrote Investec chief economist Philip Shaw, who a week ago put the probability at 35 per cent.

"This is probably not quite our baseline case yet, but it might well be should the signs of a political agreement not become convincing over the next two days," he said.

Several bank economists were confident enough that Greece will leave the euro to forecast it before any political discussions took place.

"It seems more likely than not that Greece will leave the euro at this point, 60 per cent chance," wrote Nick Kounis, economist at ABN Amro, who gave just a 30 per cent probability in the Reuters poll published last week.

"The prospects a deal with creditors have dimmed, and in the meantime the Greek economy will suffer even more severe economic and financial pain," Kounis wrote.

Erik Nielsen, the chief economist at UniCredit, was even more forceful.

"My bottom line is that the outcome of the Greek referendum has significantly increased the risk of Greece leaving the eurozone, which is now by far the most likely outcome. The process may start within days or weeks, but it won't be a smooth ride into a new currency. It'll be chaos with political ramifications,"  he said.