Business

AMMAN — Jordan now is seeking loan guarantees from Japan to improve the Kingdom’s credit rating, Saleh Kharabsheh, secretary general of the Ministry of Planning and International Cooperation, said on Sunday.

Kharabsheh said the issue was discussed with Akihiko Tanaka, president of Japan International Cooperation Agency (JICA), who is currently visiting Jordan.

Receiving guarantees from Japan will enable Jordan to access affordable financing from international capital markets, according to Kharabsheh.

So far, the US is the only country that issued loan guarantees for Jordan. 

Last month, Jordan issued $1 billion of Eurobonds which was stood as the second loan guaranteed by the US government.

At a joint press conference with JICA president on Sunday, Kharabsheh said Jordan has requested a $200 million soft loan from the government of Japan.

However, “we have to discuss details of the loan with Japan’s finance ministry”, the official noted.

If granted, this will be the third loan that Jordan obtains from Japan in three years.

In 2012, Jordan received a $155 million loan and, in 2013, another $120 million credit was obtained .

Tanaka said his visit to Jordan is to mark the 60th anniversary of diplomatic ties and 40th anniversary of economic cooperation between the two countries.

The Japanese official added that the international community should work closely with Jordan to ease the burden for hosting Syrian refugees.

“Visiting the Zaatari Refugee Camp, I realised the burden Jordan has to bear,” Tanaka said,  indicating  that his country is assisting in the improvement of water supply networks in Jordan’s northern governorates to help ease the burden on host communities.

Asked about Japan’s future assistance to Jordan, Tanaka replied: “Our cooperation is extended upon our partners’ request, and at this moment we can’t say what we can do in 2015”.

However, he mentioned the Petra Museum Project as another project that JICA will implement in Jordan, noting that the implementation of the approved project will start in 2015 and will be completed in 2016.

Kharabsheh said the ministry is contacting the Japanese government regarding the National Response Plan to deal with the impact of the Syrian refugees.

The official said the three-year plan estimates the cost of providing services for the Syrian refugees at $4.5 billion. 

Also on Sunday, Tanaka met with Finance Minister Umayya Toukan and reiterated the importance of increasing assistance to Jordan after his close review of the sizeable challenges the Kingdom faces and his visit to the Zaatari Refugee Camp, the Jordan News Agency, Petra, reported.

Tanaka also expressed his country’s willingness to share with Jordan the burdens resulted from the Syrian crisis. 

Toukan valued Japan’s continued support in all fields and briefed the delegation on the financial reform programme that Jordan is undergoing to maintain sound financial performance and stability, Petra reported.

Since the year 1999, the government of Japan extended $764 million to Jordan, $430 million of which were grants and the rest were loans.

FARNBOROUGH, United Kingdom — Airbus has enjoyed its best ever Farnborough show in terms of orders, the head of the European planemaker said last week, helping it close the gap on US rival Boeing.

Airbus said it had won commitments and firm orders for 496 planes worth more than $75 billion (55 billion euros) at the key industry sales event that alternates annually with the Paris Airshow.

Boeing said it had clinched deals for 201 aircraft worth more than $40 billion.

"This is the best Farnborough Air Show in Airbus history and this is the third biggest if we include the Paris airshow," Chief Executive Fabrice Bregier told a press conference at the event near London.

The latest deals confirmed Friday saw leasing company Hong Kong Aviation Capital (HKAC) sign a firm order for 70 single-aisle A320neo passenger planes from Airbus.

The fuel-efficient jets are valued at $7.72 billion at list prices but customers tend to receive significant discounts on such purchases.

"The green credentials of the neo is one of the key factors for us to choose the aircraft," said HKAC Chief Executive Donal Boylan.

Transaero, Russia's second-biggest airline, meanwhile, said it is committed to buy 20 A330 aircraft, including a dozen new fuel-efficient neos, worth $5.3 billion.

"The clear winner of the show was Airbus," noted Deutsche bank analyst Myles Walton.

Airbus had dominated the start of the week-long Farnborough event, securing a host of commitments for its new long-haul A330neo passenger plane — from air leasing companies and the airline AirAsia X  — but no firm orders.

Boeing orders top $40b

Boeing's big moment at Farnborough came on Wednesday, when it concluded a deal with Qatar Airways for 50 of its revamped long-haul passenger jets along with a potential order for 50 more.

"Customers demonstrated their strong confidence in the family of Boeing commercial products, announcing orders and commitments for 201 Boeing airplanes valued at more than $40.2 billion at list prices," the group said in a statement.

Ahead of the show, Airbus had lagged Boeing with 290 net plane orders versus 499 for the US group since the start of the year, when deliveries and cancellations were also taken into account.

The gap now stands at 648 versus 783 in favour of Boeing.

Launched at Farnborough on Monday, the Airbus A330neo airliner is a revamped version of the A330, sporting latest generation Rolls-Royce Trent 7000 engines to provide more economical long-haul travel.

Airbus said it had secured 121 commitments for the A330neo at Farnborough.

Bregier said Airbus had no plans in the short term to upgrade the engines on the A380 superjumbo.

Boeing is, meanwhile, changing the engines on its long-haul 777 model, helping it to secure new sales as economic recovery picks up around the globe.

Production of the 777X is set to begin in 2017, with the first delivery targeted for 2020. 

First deliveries of the Airbus 330neo are scheduled for the end of 2017.

Brazilian group Embraer, the world's third-largest commercial planemaker, also won orders worth billions of dollars for its regional jets at Farnborough, including its new single-aisle E195-E2 jet.

Furtive F-35 

Missing from the show however was a much-anticipated appearance of the F-35 fighter jet.

The US military said on Tuesday that it would not send the plane to Farnborough after an engine fire grounded the entire fleet, in another embarrassing setback for the Pentagon's most expensive programme ever.

The prospect of huge time savings, less waste and more design options have drawn aerospace firms to invest in additive layer manufacturing, also known as 3D printing, though it may be years before parts made this way are common in planes and weapons.

In 3D printing, components are made by building up layers of titanium or other raw materials using computer-driven machines, compared with traditional casting which involves taking a piece of material and cutting away to create the desired part.

The new technology has found a use in a wide range of industries, from designing shoes to dental technology, because it means complex prototypes and products can be shaped much more quickly and with much less wastage of expensive materials.

Analysts predict rapid growth over the next decade, which could boost the shares of companies that make the printing machines, such as 3D Systems, Stratasys, ExOne, Voxeljet, Arcam and SLM Solutions. Another big company in the sector is EOS of Germany.

A McKinsey report this year estimated 3D printing could have an economic impact of up to $550 billion a year by 2025, mainly from consumer uses and manufacturing.

The technology is expected to have far-reaching consequences for the aerospace industry too, and especially the maintenance repair and overhaul business, because it reduces the time and effort needed to produce parts or find spare parts. Because 3D parts are often lighter, the process could also have a profound impact on the way aircraft and satellites are designed.

Aerospace and defence companies such as Airbus, Lockheed Martin, GE, Pratt & Whitney, GKN  and BAE Systems are all investing in the technology, with BAE executives calling it "game-changing" at the Farnborough Air show last week.

GE Aviation announced plans to invest $50 million in its own additive facility in Alabama, while GKN said it was leading a consortium in a £13.4 million ($22.9 million) additive manufacturing research project.

In some cases, the technology is already being tried out.

The US navy, for example, is experimenting with 3D printers that could go aboard its aircraft carriers to print out replacement parts on site instead of waiting days or weeks for parts to be found and delivered.

Lockheed's space business, meanwhile, has a 3D part flying on a NASA spacecraft called Juno that was launched in 2011, and is working with the US air force to qualify parts that could be used on military satellites in the future.

Still, industry watchers caution it will be a while before the technology will be in widespread use.

"I think you'll see it start to come through," said Glynn Bellamy, KPMG's UK head of aerospace and defence. "But you don't change the design or specification of an engine until it comes up to its next natural point, the next derivative or upgrade, which will take time."

GKN is looking at projects in its aerospace business and its metallurgy unit for the powders that form the basis of the process, but says it will take a while to generate profits.

"It could be very important to GKN but it's a long way off. It's 10 years at least before it's important," Chief Executive Nigel Stein told Reuters at the air show.

Prototyping

While widely used in prototyping, it's mostly only small, non-critical parts such as brackets for Airbus' new A350 jet, hooks, or camera stands for fighter jets, that have been manufactured so far using the process.

That's mainly due to stringent safety testing in the industry, where new technological innovations or even getting the use of mobile phones approved on flights can take years.

"It's great for prototyping, but when it comes to production, it has to earn its way," said David Joyce, chief executive officer of GE Aviation. GE has said it can use the technology to create a prototype for a traditional turbine blade in two weeks, compared with 36 weeks for traditional manufacturing methods.

Before the technology can be used in structural parts onboard planes, companies first need to create a database to provide information on the properties of the materials used.

"We need to prove to the authorities that, especially for load-carrying parts, they can fulfil the requirements," said Sebastien Remy, head of innovation works at Airbus.

Michael Minall, a director at supply chain consultants Vendigital, said using the technology to create spare parts first was one way of gaining acceptance.

"Being able to replace parts such as seat buckles and door handles without massive lead times is really interesting. If you can win hearts and minds that way, then you can move onto structural applications," he added.

The technology opens new design possibilities too.

"Where we drill a hole in a part for the cooling air to run through, today we're limited by a straight hole," said Allen Paxson, executive vice president at engine maker CFM. "Additive manufacturing allows you to drill a hole to be any shape you want. It could even be a corkscrew."

CFM, a joint venture between GE and Safran, is taking the technology a step further and giving it a tougher test. The fuel nozzles on its new LEAP engine, due to enter into service in 2016, are made using a 3D printing process and GE is investing $50 million into an additive facility in Alabama.

BAE Systems, which has used 3D printed plastic parts as protective covers for items such as radio and shafts on the UK's fleet of ageing Tornado fighter jets, is working with Cranfield university on a much larger metallic part — a 1.2-metre long titanium component known as a spar.

The piece takes 37 hours to produce, compared with around 12-18 months previously, BAE said. It hopes the technology will be ready to move out of the research phase within 2.5-3 years.

"It's a real game changer for us with the time," Michael Murray, head of airframe integration at BAE, said.

Shortening time and reducing costs were especially important now the company can no longer rely on big contracts from the UK government due to a squeeze in defence budgets, but instead has to go out and fight for smaller export contracts.

Analysts at Commerzbank expect the market for metal-based 3D printing systems to grow in the ballpark of 30-40 per cent annually between 2013 and 2016 as more and more applications move from the research to production stage.

"It's a unique moment in time for the additive industry, for the aviation industry as a whole," said Greg Morris, in charge of additive technologies at GE Aviation.

SYDNEY — Business leaders in Australia Friday called on the Group of Twenty (G-20) leading economies to implement recommendations on structural reforms and free trade that could boost global growth by $3.4 trillion and create millions of jobs.

The business chiefs, who were in Sydney for a two-day B20 summit, said their list of 20 recommendations — if adopted by G-20 leaders — would help them exceed the 2 per cent additional gross domestic product (GDP) target over five years that finance ministers agreed to in February.

"What we are recommending is mostly new structural reform measures that would deliver on the G-20 growth target and form a blueprint for sustainable economic growth in the medium-term," B20 Australia chair Richard Goyder said.

"If G-20 countries commit to these reforms, the gains will be large, but a failure by any of the G-20 countries to commit will mean a significant opportunity cost," he added.

The recommendations call for the free flow of goods, services, labour and capital, an effective and transparent regulatory framework, as well as structural reforms that would boost trade and lift infrastructure investment.

Moves towards freer trade could boost global GDP by $3.4 trillion and support more than 50 million jobs across the G-20 nations, which "would be akin to adding another Germany to the global economy", the B20 indicated.

At the same time, increasing investments in infrastructure to fill an estimated gap of between $15-20 trillion by 2030 could unlock $6 trillion in economic activity every year and create up to 100 million jobs, the business leaders pointed out.

Australian Treasurer Joe Hockey welcomed the recommendations, saying they supported the G-20's goal under Australia's presidency this year of driving growth and jobs creation.

"These 20 recommendations fit in nicely with our overarching goal," Hockey said. "The G-20 is very focused on how to drive growth and jobs creation, best utilising all of the resources and skills available in the private sector.”

"In some countries, this is a change of ideology, but necessity has changed attitudes," he added.

The senior leaders of some of the world's most high-profile companies, such as Royal Dutch Shell, General Electric and BHP Billiton, also called on G-20 governments to tackle fraud and bribery through measures such as introducing or strengthening national independent corruption authorities.

"All of our objectives of long-term sustainable and inclusive growth will be undermined if the level of existing global corruption is allowed to continue," said Michael Andrew, chair of the B20's anti-corruption working group.

"It's estimated by the World Bank that corruption constitutes 5 per cent of global GDP. That would make it the third-largest industry in the world," he added.

Infrastructure 

global hub

Hockey said earlier on Friday that he was pushing for a G-20 "infrastructure global hub" to support projects as government coffers dry up.

The treasurer added that the world's economies needed growth that was not stimulated by ultra-easy monetary policies implemented after the global financial crisis.

New ways to drive economic growth included infrastructure projects jointly funded by the public and private sector, he remarked.

"Governments have run out of money to be able to fund the infrastructure needs that the community has," Hockey said. "Therefore we need you, and we need your money, and there is a tremendous amount of liquidity in the world, we recognise that.

Hockey said Australia had "put on the table a proposal... to have an infrastructure global hub not as a funder but as a knowledge bank". 

He noted that the proposal was well-received when it was first raised at the February meeting.

"We were all afraid of learning new lessons — that others have already learnt — at our political cost," he added. "We didn't want to reinvent the wheel, but as we talked in an informal atmosphere, it became clear that everyone had some experience.

"So we want to create a global hub... which will become a repository of all information on infrastructure investment," he said. 

On Thursday, Australian Prime Minister Tony Abbott called for G-20 economies to adopt more ambitious growth targets, urging leaders not to "waste each other's time" with a talk-fest.

Abbott told more than 380 business leaders that the world's economies were still "in the shadow of the [financial] crisis" and "action, not words" was needed to boost growth.

"The G-20 will deliver a three-page communique in plain language because we need to talk not at length about our good intentions, but precisely what we would do to put good intentions into practice," the Australian leader said. "I made a promise at Davos this year. I said that the G-20 had to be so much more than a talk-fest.”

"Otherwise the leaders of the world's largest and most representative economies could be accused of wasting each other's time," he added.

Abbott told media later that Australia was asking G-20 nations to push harder on their growth plans, so they could meet their pledge during a February finance ministers' meeting to add 2 per cent to GDP over the next five years.

"It seems that the measures in each individual country's national plan collectively would add little over 1 per cent to growth over the next five years, and we're going back to each country asking them to be a little bit more ambitious," he said.

Free trade push

The prime minister emphasised the need for freer international trade, saying "no country has ever taxed or subsidised its way to prosperity".

His comments were echoed by Trade Minister Andrew Robb, who said the deal struck by 160 members of the World Trade Organisation (WTO) at a Bali summit in December — which streamlines the global flow of goods — needed to be implemented by all countries.

"The pursuit of ambitious bilateral, regional and plurilateral trade agreements should also be embraced as they are important building blocks in the global trading system," he said in a column for The Australian Financial Review. "As Australia's experience shows, trading, open nations are also prosperous ones."

The WTO said Thursday it was launching a $30 million support programme for developing countries that signed up to the agreement to help them implement the reforms.

WTO Director General Roberto Azevedo said: "The worst case scenario for the multilateral trading system and for global trade is inaction.”

Azevedo added in a speech in Canberra Thursday the deal proved multilateral agreements, while difficult to achieve, were possible and countries should "seize the opportunity that Bali has created".

The push to expand trade was reiterated by the World Food Programme's executive director, Ertharin Cousin, who said businesses should also look to markets in the world's most impoverished nations. 

"Being poor does not mean there is not an opportunity to create markets," said Cousin, who discussed food security issues with business leaders during the summit.

"What we are hopeful of is that [the] private sector will recognise that there is an opportunity for them... to support countries that to date have not had significant private sector investment outside of their local market [and] national companies," she said.

"Where you see companies like Unilever, who have seized the opportunities to go and into places like Rwanda, Kenya and Tanzania and invest in smallholder farms, it is making a difference in their bottom-line," Cousin added.

ROME — Etihad Airways chief James Hogan said this week he aimed to complete negotiations on buying 49 per cent of Alitalia by the end of the month but stressed the company had to be “right-sized” first.

“We’re all focussed on the end of this month. With our agreement, more time is allowed but our focus is the end of the month,” Hogan said during a visit to Italy, where he was launching a new Etihad route between Abu Dhabi and Rome.

“We are in the final stages of the negotiations. We do need to right-size the airline,” he indicated, as Alitalia management continued talks with unions for around 1,600 job cuts.

“We don’t step into these negotiations unless we’re convinced the airline will move to profitability,” Hogan added. “If we complete, we’ll complete with the right foundation. The key issue is getting the cost base right.”

Alitalia “needs to be re-energised and brought back alive,” he continued, noting that “a re-energised Alitalia could be one of the most successful airlines in Europe but to achieve that we have to have the right starting point”.

Alitalia said it had negotiated a deal with current stakeholders to renegotiate Alitalia’s debt of about 565 million euros ($765 million).

Asked about the future role for Air France-KLM, an existing shareholder, Hogan said: “Air France and KLM and Delta are all very important partners. We expect that relationship to continue.”

The Emirates national carrier — based in Abu Dhabi — is planning to buy a 49 per cent stake in the debt-laden Italian flag carrier, which currently employs 12,800 people.

Etihad’s initial investment is expected to be around 560 million euros ($762 million), and 660 million euros more has been mooted in future to develop the airline.

Etihad has expanded hugely since it was founded in 2003 and now has stakes in India’s Jet Airways, Air Serbia, Air Seychelles, Aer Lingus and Air Berlin.

Alitalia’s chief executive on Sunday hailed a preliminary deal with trade unions over layoffs, describing it as a “decisive step” that he hoped would help seal a partnership with Etihad.

Gabriele del Torchio said in a statement that layoffs were “painful but necessary to restore development and a future to the entire sector”.

At talks between Alitalia and unions over the weekend, there was a partial agreement on laying off 1,635 workers — with some being moved to other companies in the aviation sector and others receiving redundancy packages.

Most unions have agreed, with the exception of Italy’s biggest union, the CGIL, and the far-left USB union.

The agreement “has been signed by unions representing more than 70 per cent of Alitalia workers”, Transport Minister Maurizio Lupi, who has been mediating the management-union negotiations, was quoted by the ANSA news agency as saying.

“Etihad’s entry into Alitalia capital will create a new and very competitive sector of the Italian economy, strongly oriented towards foreign markets,” Del Torchio said.

SEATTLE — Microsoft Chief Executive Officer (CEO) Satya Nadella kicked off one of the largest layoffs in tech history on Thursday, signalling he intended to shake up the ageing PC industry titan, but leaving questions about how exactly he would transform it into a nimbler, Web-based rival to Apple Inc. and Google Inc.

Microsoft Corp. said on Thursday it will slash up to 18,000 jobs, or 14 per cent of its workforce, over the next 12 months as it almost halves the size of its newly acquired Nokia phone business and tries to become a cloud computing and mobile friendly software company.

The larger-than-expected cuts are the deepest in the software giant’s 39-year history and come five months into Nadella’s tenure.

“We will simplify the way we work to drive greater accountability, become more agile and move faster,” Nadella wrote to employees in a memo made public early Thursday. “We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.”

Beyond the Nokia reductions, Nadella gave few clues about where the axe will fall or what areas will receive more funding, saying he will answer questions from employees at a town hall meeting at Microsoft headquarters in Redmond, Washington, on Friday and flesh out his plans publicly after Microsoft’s quarterly earnings report on July 22.

The size of the cuts were welcomed by Wall Street, which was critical of the Nokia acquisition and viewed Microsoft as bloated under previous CEO Steve Ballmer, topping 127,000 in staff after absorbing Nokia earlier this year.

“This is about double what the Street was expecting,” said Daniel Ives, an analyst at FBR Capital Markets. “Nadella is clearing the decks for the new fiscal year. He is cleaning up part of the mess that Ballmer left.”

Microsoft shares jumped 1.8 per cent to $44.88 on Nasdaq, reaching their highest since the technology stock boom of 2000.

About 12,500 of the layoffs will come from eliminating overlaps with the Nokia unit, which Microsoft acquired in April for $7.2 billion, with the bulk of the cuts coming from Nokia itself. The acquisition of Nokia’s handset business in April added 25,000 people to Microsoft’s payroll.

The Nokia-related cuts were widely expected. When it struck the deal, Microsoft said it would cut $600 million per year in costs within 18 months of closing the acquisition.

Excluding the Nokia cuts, the remaining 5,500 layoffs were not as shocking as it first appeared, remarked Sid Parakh, an analyst at McAdams Wright Ragen.

The first wave of layoffs include 1,351 jobs in the Seattle area, Microsoft indicated.

About 1,100 jobs will be cut from Nokia’s original home country of Finland, according to government and union representatives there, with about half coming from the closure of its research and development operation in the northern city of Oulu.

Stephen Elop, the former CEO of Nokia who now runs Microsoft’s devices unit, said phone engineering efforts will now be concentrated in Salo and Tampere, Finland, and it will reduce engineering work in Beijing and San Diego.

He added that phone manufacturing will be focused in Hanoi, Vietnam, with some production to continue in Beijing and Dongguan, China. Some Microsoft manufacturing and repair operations will be moved to Manaus, Brazil and Reynosa, Mexico, as it winds down operations in Komaron, Hungary.

The European Union’s employment commissioner said he has asked to meet with Microsoft to discuss the social impact of the layoffs.

As part of the integration of Nokia, Microsoft is  abandoning its experiment in making phones powered by Google’s Android system, moving some of its Nokia X line of phones onto Windows phone software.

The company expects to take pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters to account for the costs of the layoffs.

Nadella’s cuts are the biggest at the Redmond, Washington-based company since Ballmer axed 5,800, or about 6 per cent of headcount, in the depths of the recession in early 2009.

The new CEO’s moves are designed to help Microsoft shift from being a primarily software-focused company to one that sells online services, apps and devices it hopes will make people and businesses more productive. Nadella needs to make Microsoft a stronger competitor to Google and Apple Inc., which have dominated the new era of mobile-centric computing.

Marking this change of emphasis, Nadella last week rebranded Microsoft as “the productivity and platform company for the mobile-first and cloud-first world”.

Microsoft is not alone among the pioneers of the personal computer revolution now slimming down to adapt to the Web-focused world.

PC-maker Hewlett-Packard Co. is in the midst of a radical three-to-five-year plan that will lop up to 50,000 from its staff of 250,000.

International Business Machines Corp. is undergoing a  “workforce rebalancing”, which analysts say could mean 13,000, or about 3 per cent of its staff, being laid off or transferred to new owners as units are sold.

Chipmaker Intel Corp. and network equipment maker Cisco Systems Inc. both said in the past year they were cutting about 5 per cent of their staffs.

AMMAN — The Ministry of Industry, Trade and Supply on Thursday held a meeting to discuss the future vision of the industry, trade and investment sectors.

The meeting was a step for preparing the 10-year economic blueprint the government is working on under Royal directives of His Majesty King Abdullah, according to a statement the ministry sent to The Jordan Times. 

Industry, Trade and Supply Minister Hatem Halawani said the blueprint the government is working on aims at achieving positive growth rates during the next 10 years, narrowing the budget deficit and maintaining the general debt rates under 60 per cent of the gross domestic product, providing job opportunities and increasing investment rates. 

All that can be achieved according to rates which all stakeholders agree on the possibility of attaining within the targeted 10 years, he remarked. 

Halawani asked institutions representing the private sector, such as industry and trade chambers, the Jordan Businessmen Association and the Association of Banks, to provide the ministry within a week with suggestions that may suit the blueprint; mechanisms that may contribute to its success; and their remarks on the suggestions included in the ministry’s future vision.

The minister also said that the ministry will work on inaugurating new markets for Jordanian exports, especially in Africa, to increase the Kingdom’s trade volume. 

The ministry will reconsider agreements that did not benefit the Jordanian economy and did not contribute to lowering the trade balance deficit, Halawani added.

He continued that Jordan’s classification in international economic indicators will be studied to examine the reasons for the decline in some indicators and to work on solutions to improve the Kingdom’s economic ranking on these reports. 

The minister noted that meetings will be held with each economic and service sector in order to agree on the future vision needed for the next 10 years and to set the targeted rate of contribution of  the sector to the aspired growth rate.

AMMAN — Aqaba Special Economic Zone (ASEZ) and Aqaba International Industrial Estate (AIIE) are among the top ten Middle East free zones of the future, according to a report by Foreign Direct Investment (FDI) Intelligence. 

Issued by the global largest FDI centre of excellence and a Financial Times insight,  the report assesses free zones’ abilities to attract FDIs.

According to the findings of the report, made available to The Jordan Times on Wednesday, most of the current investments in ASEZ are concentrated on tourism and real-estate sectors with the aim of “turning ASEZ into a world-class business hub and leisure destination on the Red Sea”.

AIIE has been successful in attracting companies involved in metals engineering, security industries, clean energy, food, consumer products, logistics, storage and services supporting major tourism projects, the report showed.

In the future, AIIE aspires to become a centre for development, assembly and marketing of clean energy systems and products, according to the report.

ASEZ and AIIE ranked 9th and 10th respectively in the listing with the Dead Sea Development Zone among the top 20.

The  assessment was made after inviting the free zones and investment entities charged with attracting FDIs to complete a survey based on the incentives, facilities and services each zone offers to investors. 

The FDI received 19 entries from free zones in the Middle East. The FDI also included eight entries submitted for the 2012/13 Global Free Zones of the Future ranking, including Ras Al Khaimah Investment Authority, Dubai Media City, Dubai Knowledge Village, Dubai International Academic City, Dubai Studio City, Dubai Healthcare City, Dubai Biotechnology and Research Park, and International Media Production Zone.

A panel of internal and external judges independently reviewed and ranked the entries, according to the FDI Intelligence report. 

Each judge gave a score for each of the 27 zones, based on economic potential, FDI incentives, facilities, cost-effectiveness, FDI promotion strategies, and transportation links, which were then combined to compile the results.

The ranking was based on the survey submitted by entrants. The judges assessed the information provided and combined it with their specialised knowledge of free zones.

AMMAN — Arab Bank Group announced Wednesday in a press statement that net profit after tax and provisions during the first half of 2014 grew by 7 per cent to $414.9 million from $387.3 million in the same period of last year.

According to the statement, loans and advances reached to  $23.7 billion, a 4 per cent increase over the $22.9 billion posted on June 30, 2013. Customer deposits were also higher by 5 per cent or $1.7 billion totalling $34.4 billion compared to $32.7 billion for the same period of the last year.

Sabih Masri, the chairman of Arab Bank, described the results as a substantiation of the bank’s ability to continue its positive performance through prudent management and better utilisation of resources.

Nemeh Sabbagh, the chief executive officer of  Arab Bank, said in the statement that the bank’s net interest income and commissions were higher by 3 per cent and 7 per cent respectively compared to the same period of the last year.

“The bank continues to maintain comfortable liquidity ratios as a strategic goal,” he added. “The loan-to-deposit ratio stood at 62.5 per cent and the group’s capital adequacy ratio stood at 14.15 per cent, well above the minimum required by the Central Bank of Jordan.”

Arab Bank received the award of Best Bank in Middle East for the year 2014 by New York-based Global Finance magazine. 

The banks’ results are subject to Central Bank of Jordan final approval.

AMMAN — Tourism revenues went up by 13.6 per cent during the first half of this year to around $2.3 billion from $2 billion generated during the same period of 2013. According to the Central Bank of Jordan, the rise is attributed to higher income derived from religious and medical tourism. 

WASHINGTON — The US economic recovery remains incomplete, with a still-ailing job market and stagnant wages justifying loose monetary policy for the foreseeable future, Federal Reserve (Fed) Chair Janet Yellen told a Senate committee on Tuesday.

In a strong defence of the central bank's current stance, Yellen said early signs of a pickup in inflation aren't enough for the Fed to accelerate its plans for raising interest rates, a move currently expected in the middle of next year.

That could change, with interest rates rising sooner and faster, if data show labour markets improving more quickly than expected, she added.

But as it stands, "although the economy continues to improve, the recovery is not yet complete”, Yellen continued in semi-annual testimony before the Senate Banking Committee, repeating her focus on lagging labour force participation and weak wage growth as key to any conclusions about the economy's health.

"Too many Americans remain unemployed," Yellen indicated.

 Fed relatively upbeat

Yellen presented a broad overview of an economy still in transition from the 2007-2009 economic crisis. 

In an accompanying report, the Fed said its balance sheet would top out at $4.5 trillion when its bond-buying programme ends in October, a sign of how much stimulus the central bank has had to unleash to support the economy.

With another $2.6 trillion held in reserve by banks, the report said it "will not be feasible" for the Fed to rely on the traditional Fed Funds market to manage interest rates — a judgement implicit in its recent work on new interest rate tools.

Yellen said the economy continues to generate jobs and steady growth, but she added that Fed policy makers currently expect their preferred measure of inflation to stand at between 1.5 per cent and 1.75 per cent for 2014, short of the central bank's 2 per cent target.

The housing market remains weak, Yellen noted, and business investment less than hoped.

Fed chiefs are mandated by law to report to Congress twice a year on monetary policy, and the hearing on Tuesday was Yellen's second such appearance. Her first turned into a marathon grilling about her philosophy and views of the economy.

The Fed faces a complex agenda as it weans the US economy from the massive stimulus programmes put in place to fight the financial crisis.

Economic data has kept Fed policy makers relatively upbeat that the economy will make steady progress towards the central bank's goals.

But there is also the potential for serious division.

Some policy makers worry the Fed is falling behind the curve on rate hikes and that Yellen is taking too much of an impromptu approach to the interest rate decision.

In her prepared testimony, she held firm to her view that low labour force participation and other labour market statistics are evidence of slack that needs to be absorbed by stronger job growth, not just a sign of unavoidable demographic change.

For now, a more dovish approach holds sway at the central bank, with several officials saying they'd tolerate inflation higher than the 2 per cent target for a period of time in order to ensure growth is on track, wages are rising, and as many workers as possible have been drawn back into jobs.

Responding to questions from committee members, she said it would be a "mistake" for the Fed to adopt a strict rule for raising interest rates, something advocated by some lawmakers and Fed officials. 

Also on Tuesday, the Fed voiced concern about stretched valuations in certain corners of the US equity markets, including the small cap, biotechnology and social media sectors.

The unusual comments from the Fed's monetary policy report — the first time in 14 years that the Fed has commented specifically on valuation of a particular equity sector — that accompanied Yellen's semi-annual testimony to Congress, hit stocks in riskier sectors of the market.

Yellen said in remarks to the Senate Banking Committee that valuations across equity markets remain generally in line with long-term averages, but the Fed's report said the forward price-to-earnings multiples for smaller companies and those in the biotechnology and social media sectors appear "high relative to historical norms".

Well-known names such as Facebook, LinkedIn and Yelp slipped after the news. Shares of Yelp Inc. were among the hardest hit, falling 4.3 per cent to $68.01 a share, and the Nasdaq Biotech Index also fell, losing 2 per cent.

"It's very unusual for the Fed chairman to take a microview of a specific industry group. Usually the comments are very top level. So I think the Fed is a little more in tune with what has been bothering the market. My thought is it's late, but not too late in terms of recognition," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.

Throughout 2013, social media and biotechnology shares were among the market's most popular names, posting massive gains as investors, particularly hedge funds, piled in. For example, the Global X Social Media ETF, which includes Facebook and LinkedIn among its holdings, rose 64 per cent in 2013.

Hedge funds were caught when those stocks slumped in late February in a sell-off that continued for several weeks. Those stocks rebounded in June, but most have failed to attain earlier heights. The SOCL exchange-traded fund is down 11.4 per cent in 2014.

Last week the equity market weakened, with notable slippage in small-cap names. The Russell 2000 has lost 4.6 per cent in the last seven trading days, while the Nasdaq Biotech index is off by 4.8 per cent.

"These are the sub-industries that have caused a lot of long- time stock watchers to scratch their heads," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh. "I'd say she'd like to deflate these bubbles with a little bit of stock talk."

The last mention of specific equity sectors appears in a Fed monetary policy report in July 2000, when it says that "growing unease about the lofty valuations reached by technology shares and rising default rates in the corporate sector may have given some investors a better appreciation of the risks of holding stocks in general”.

Art Hogan, chief market strategist at Wunderlich Securities in New York, said the comments also recall former Fed chairman Alan Greenspan's statement in 1996 during a speech, when he asked whether "irrational exuberance has unduly escalated asset values", which sparked a brief sell-off in stocks.

"Am I surprised? Absolutely! It's off the script," Hogan said. "It's not what we're used to and it's certainly not something that we ever got from Bernanke.”