Business

AMMAN — Non-Jordanian ownership in companies listed on the Amman Stock Exchange (ASE) reached 47.5 per cent, 36.8 per cent of which was composed of institutional investors.

ASE revealed JD6 million in shares on the exchange were purchased by non-Jordanian in June, representing 5.7 per cent of the overall trading value. Non-Jordanians sold JD8.6 million in shares in the same month, according to data from the ASE’s website.

As a result, the net of non-Jordanian investments in June 2023 showed a negative net value of JD2.6 million. The net value of non-Jordanian investments showed a negative value of JD39.5 million during the same month of 2022. 

During the January-June period of 2023, non-Jordanian investors purchased JD84.9 million in shares, representing 9.7 per cent of the overall trading value. Non-Jordanians sold JD109.1 million in shares during the same period. As a result, the non-Jordanian investments showed a negative net value of JD24.2 million. The net of non-Jordanian investments showed a negative value of JD70.9 million for the same period of 2022.

Arab investors purchased JD5.5 million in shares in June, or 91.1 per cent of the overall non-Jordanian purchases. Investors of non-Arab nationalities purchased JD0.5 million, constituting 8.9 per cent of the overall non-Jordanian purchases in June. Arab investors sold JD7.1 million in shares, equal to 81.8 per cent of non-Jordanians total sales. Sales by investors of non-Arab nationalities amounted to JD1.6 million in June, representing 18.2 per cent of the total sales by non-Jordanians. As a result, net Arab investments showed a negative value of JD1.6 million, whereas the net non-Arab investments showed a negative value of JD1.1 million in June.

Hence, non-Jordanian investors' ownership in companies listed on ASE as of the end of June 2023 represented 47.5 per cent of the total market value, 36.8 per cent of which is represented by institutional investors, including companies, institutions and funds. By sector, non-Jordanian ownership in the financial sector reached 51.5 per cent, in addition to 20.5 per cent in the services sector and 53.5 per cent in the industrial sector.

RIYADH — Saudi Arabia said on Monday it was extending a voluntary oil production cut and Russia said it was slashing exports, as major producers tried to prop up slumping prices.

The cut by Riyadh of 1 million barrels per day was first announced after a June meeting of oil producers and took effect at the weekend.

Saudi Energy Minister Prince Abdulaziz bin Salman noted at the time that it was "extendable".

In a report on Monday announcing that the cut would continue through August, the official Saudi Press Agency said it "can be extended" further, citing an energy ministry source.

"The source confirmed that this additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets," SPA said. 

Also on Monday, Russia unveiled its export cut of 500,000bpd for August "as part of efforts to ensure that the oil market remains balanced". 

The announcement by Alexander Novak, Russian deputy prime minister responsible for energy policy, came on the back of cuts to Russian oil production this year by the same volume as part of Moscow's response to Western sanctions levied over the conflict in Ukraine.

Recent efforts by OPEC+ to bolster prices by reducing output have not succeeded, and analysts expressed doubt this one would be any different despite initial increases recorded Monday.

"It's the usual knee-jerk reaction to reports of production cuts," said IG analyst Chris Beauchamp.

"But given... it's not a coordinated move from all [OPEC+] members it seems hard to imagine there's much more upside in this".

Muted response 

The initial market reaction was muted.

Brent was up 0.98 per cent to $76.15 per barrel, and West Texas Intermediate was up 1.02 per cent to $71.36 per barrel.

Since the beginning of the year, Brent is down 11 per cent and WTI is down 7 per cent, as a sluggish recovery in China and worries about the US economy weigh on demand forecasts.

"Saudi Arabia is hoping to bring down global inventories over the summer in order to lend support to prices," said Jamie Ingram, senior editor at MEES.

"There will be little expectation that Russia will fully comply with this latest commitment, but the key thing here is that it's a public statement of commitment to Saudi Arabia's market management strategy."

The average price of Russian Urals was $52.17 per barrel during the first half of 2023, down from $84.09 during the same period last year, the Russian finance ministry said Monday.

That drop reflects the effects of a price cap imposed in December by a coalition involving the Group of Seven leading economies, the European Union and Australia.

Saudi Arabia is counting on high oil prices to fund an ambitious reform agenda that could shift its economy away from fossil fuels. 

Oil giant Saudi Aramco, the jewel of the kingdom's economy, said it recorded profits totalling $161.1 billion last year, allowing Riyadh to notch up its first annual budget surplus in nearly a decade. 

Analysts say the kingdom needs oil to be priced at $80 per barrel to balance its budget, which is well above recent averages.

NEW YORK — US automaker Tesla beat analyst expectations in the second quarter, delivering 466,140 vehicles despite a difficult market, according to its earnings report released Sunday.

The nearly half million deliveries represent an 83 per cent increase over the same period last year, and a 10 per cent rise from the previous quarter.

Analysts had expected deliveries to come in under 450,000.

From April to June, the Texas-based electric vehicle giant produced 479,700 cars — an 85 per cent increase compared to the second quarter in 2022.

That brings Tesla's total production by the middle of this year to 920,508, well on its way to its goal of manufacturing 1.8 million cars in 2023 and exceeding expectations from industry watchers.

"Price cuts implemented early in 2023 have paid major dividends for Musk & Co. as demand appears to remain very strong and production efficiencies have allowed for the massive deliveries," analysts from Wedbush Securities wrote in a note to clients.

As competition in the EV sector heats up, Tesla has made several price cuts in the United States, Europe and Asia. 

This has also allowed it to weather declining demand in China.

"We've taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin," CEO Elon Musk said on an April call discussing first-quarter results.

In the United States, Tesla has also benefited from its expanded eligibility in the government's $7,500 tax credit program for electric car buyers, part of President Joe Biden's environmental policy.

Until recently, buyers of Tesla's cheapest offering, the Model 3, were only eligible for half the tax credit because certain parts of the car weren't produced in North America.

WASHINGTON — The US inflation measure most closely watched by the Federal Reserve declined sharply in May, official figures showed Friday, returning to a downward trend after a jump a month earlier.

The Federal Reserve recently announced it was pausing its aggressive campaign of 10 consecutive interest rate hikes to tackle inflation in order to give policymakers more time to assess the strength of the US economy.

The personal consumption expenditures (PCE) index measure of inflation declined to 3.8 per cent year-on-year in May, a significant drop from 4.3 per cent a month earlier, the Commerce Department said in a statement.

Much of the slowdown was due to a sharp drop in energy prices, and food prices to a lesser extent. 

But core PCE, excluding volatile food and energy prices, fell only slightly to an annual rate of 4.6 per cent from 4.7 per cent a month earlier, indicating that inflation remains stubborn in many areas. 

Services inflation remained high, while goods inflation rose by a much smaller amount. 

On a monthly basis, PCE rose by 0.1 percentage points, slightly above the median forecast of economists surveyed by Briefing.com. 

BEIRUT — The International Monetary Fund (IMF) warned in a report Thursday that Lebanon's failure to implement reforms could have "irreversible" consequences for the crisis-hit country and risks jeopardising economic and social stability.

Lebanon has been mired since 2019 in an economic collapse that has seen the local currency lose around 98 per cent of its value against the dollar and impoverished most of the population.

In April 2022, Lebanon and the IMF reached a conditional agreement on a $3 billion-dollar loan needed to save the economy, but officials have still yet to enact the substantial changes required to kickstart the 46-month financing programme.

"The continuation of the alargest risk to Lebanon's economic and social stability, taking the country down an unpredictable road," the IMF said in a report Thursday.

"Without reforms, the economy will remain depressed with irreversible consequences for the country," it said.

The IMF projected that if the situation remains unchanged the public gross debt in Lebanon, which defaulted on its foreign debt for the first time in 2020, could reach 547.5 per cent of gross domestic product by 2027.

Inflation "has accelerated recently reaching 190 per cent year-on-year in February 2023, with food prices increasing by 261 per cent", while unemployment "increased sharply", it said.

"The fiscal deficit widened to an estimated five per cent of GDP in 2022," it added, while the central bank's foreign currency reserves "declined to about $10 billion, compared to $36 billion at its peak in 2017".

The IMF deal is conditional on a series of measures, including unifying Lebanon's plethora of exchange rates, restructuring the banking sector and implementing formal capital controls.

Lebanon has enacted some reforms, including passing a revised bank secrecy law, but the IMF report said the legislation "should be changed to address outstanding weaknesses".

"Nobody wants to lend to a country where the government cannot make good on its external obligations," the IMF's Ernesto Ramirez Rigo told a press briefing on Thursday.

Lebanon's political elite, locked in a power struggle, has been widely blamed for the country's financial meltdown.

Since last year, Lebanon has been governed by a caretaker Cabinet with limited powers and without a president.

No group has a clear majority in parliament, and lawmakers have failed 12 times to elect a new president, amid bitter divisions between the Iran-backed Hizbollah and its opponents.

WASHINGTON — A senior Federal Reserve (Fed) official has criticised proposals to increase bank capital requirements and called for an "independent and impartial" investigation into the rapid failure of US banks earlier this year.

Fed Governor Michelle Bowman said on Sunday that a recent report into banking failures put together by the US central bank's vice chair for supervision, Michael Barr, was "not reviewed by the other members of the Board prior to its publication".

"Troublingly, other Board members were afforded no ability to contribute to the report's content," she told a conference in the Austrian city of Salzburg in prepared remarks. 

"There is a genuine question whether these efforts provide a sufficient accounting of what occurred," she added. 

Barr's report called for greater banking oversight while admitting to the Fed's own failures in its oversight of the failed California lender Silicon Valley Bank (SVB).

Bowman's comments highlight the division at the top of the Fed over the best path forward on bank regulation following the swift collapse of regional lenders including SVB, which failed following a bank run by concerned depositors in March. 

'Unintended consequences' 

Speaking in a Congressional hearing on Thursday, Fed Chair Jerome Powell addressed reports that regulators are considering raising capital requirements for some US banks by as much as 20 per cent.

"The capital requirements will be very, very skewed to the eight largest banks," he said, adding that there may also be some capital increases for other banks. 

But he said that "none of this should affect banks under $100 billion [in assets]."

On Sunday, Bowman said there was "room to improve bank supervision for large banks", adding that such reform efforts should be "informed by an impartial and independent review of what led to the failures".

"We must be circumspect about what went wrong, deliberate about what to fix, and cognizant of unintended consequences," she said.

"Misperceptions and misunderstandings about the root causes," of the bank's failures could cause "real harm to banks and their customers, to the financial system, and to the broader economy", she added. 

Bowman said she expected that an independent review into the matter would "find improvements to supervision, revisions to liquidity requirements, or improvements to bank preparedness to access liquidity are more effective than increases in capital for a broad set of banks".

"It is abundantly clear that regulatory and supervisory reform is on the way," she said. "But we should ensure that changes ultimately promote a safe and sound banking system."

JAKARTA — Indonesian livestreamer Christine Febriyanti stood in a room crammed with clothes in Jakarta, hawking colourful garments to hundreds of viewers on a TikTok livestream for a local fashion brand.

"For the Vitamin C kind of girls, you'll fulfil all of your nutrient needs with these orange pants," the 25-year-old told the sales session.

Her pitch is part of a clamour for TikTok shopping in Indonesia, where users spent more money on the app than anywhere else in Southeast Asia over the past year.

The region is a bright spot for TikTok, owned by Chinese tech firm ByteDance, following months of intense scrutiny in the United States and other nations over users' data security and the company's alleged ties to Beijing.

TikTok CEO Shou Zi Chew announced plans last week to invest billions of dollars in Southeast Asia, where it counts 325 million users, of whom 125 million are in Indonesia.

As TikTok Shop grows in popularity, with Indonesians buying more than a third of goods sold in Southeast Asia over the past year, entrepreneurs are flocking to the platform to promote a range of tech, fashion and homemade products.

They are drawn to TikTok's e-commerce features that allow them to sell through livestreams or open online stores.

Febriyanti's 20-strong online retail employer Monomolly reported a 30 per cent increase in revenue since kicking off a TikTok livestream drive last year, according to spokesperson Nadya Paramitha.

The platform's algorithm has jumpstarted the company's business, according to employees.

It has allowed sellers to "reach new markets randomly" instead of relying on interest-based search results on rival apps, said TikTok sales manager Chelvyana Onggo Winata.

It isn't just companies that are using the platform.

DIY home streamers Panji Made Agung and his wife Astari Gita used to rely on their families to survive.

But they now sell as many as 1,000 cookie jars a month through TikTok livestreams, making 25 million rupiah ($1,700).

Their viewers and sales ramped up because of their personalities, said Gita, who often flirts with her husband and makes him feel uncomfortable on camera.

"We discovered selling products alone would not work. It has to touch people's emotions. It has to be entertaining," Gita said. 

"They like our real-life humour as a couple and Agung being awkward."

TikTok Shop has capitalised on the Indonesian market, amassing more than 2 million sellers since it launched in 2021.

It takes one per cent commission and a charge of 20,000 rupiah ($0.13) for every item sold, building a growing market share against more established and bigger rivals.

Indonesia represented 42 per cent of TikTok's $4.4 billion regional gross merchandise value (GMV) last year, according to Singapore-based consultancy Momentum Works.

'Virtual conversation'

Online shopper Aldi Alfarabi said he wasn't looking to spend money while scrolling through TikTok livestreams, but he often stumbled on items that took his fancy, such as a dinosaur backpack he recently bought.

"There is an engaging interaction through the virtual conversation," said the 29-year-old from Jakarta.

"You can see exactly what you are buying."

Experts say TikTok's Indonesia strategy is catching on with shifting shopping habits as younger customers demand more engaging experiences to open their wallets.

"Indonesia's digital market is dominated by Generation Z," said Bhima Yudhistira, an analyst from Jakarta's Center of Economic and Law Studies.

"As they are more adaptive to new things, the market patterns change swiftly."

So Southeast Asian online shopping — pulled along by Indonesia — is only going one way, he said, growing into what is predicted to become a $35 billion market next year.

That's only good news for sellers like Agung and Gita. 

"We asked our family to stop helping us. Now we can buy food and diapers for our child with our own money," said Gita.

"We can also have fun a little bit."

DHAHRAN — Saudi Aramco and France's TotalEnergies on Saturday signed contracts to start building an $11 billion petrochemicals facility in the Gulf kingdom, the two companies said.

A signing ceremony for the engineering, procurement and construction contracts for the Amiral complex took place at Aramco's headquarters in Dhahran, in Saudi Arabia's Eastern Province.

The move "marks the start of construction work on the joint petrochemical expansion", Aramco and TotalEnergies said in a joint statement.

Seven companies were awarded contracts for the construction of the project in Jubail, on Saudi Arabia's east coast. The facility is slated to begin operations in 2027.

The project, first announced in 2018, represents an investment of around $11 billion, of which $4 billion will be funded through equity by Aramco and TotalEnergies.

The complex will enable Saudi Arabia's SATORP refinery to convert internally produced off-gases and naphtha, as well as ethane and natural gasoline supplied by Aramco, into higher value chemicals.

It will have the capacity to produce 1.65 million tonnes per annum (mtpa) of ethylene and other industrial gases, Aramco said.

"As part of Aramco's growth strategy, the project is anticipated to contribute to value-addition opportunities in the kingdom's downstream ecosystem," Aramco President Amin Nasser said at the signing ceremony.