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Ford announces new CEO as it eyes bigger electric push

By - Aug 04,2020 - Last updated at Aug 04,2020

NEW YORK — Ford announced on Tuesday that Jim Hackett would resign as chief executive and be replaced by longtime auto executive Jim Farley as the car giant pushes further into digital and electric investment.

Hackett, 65, will hand over the job to Farley, 58, on October 1, but stay on as a special adviser through March 2021. Farley joined Ford in 2007 after a long tenure at Toyota and currently serves as chief operating officer.

Hackett joined Ford in 2017 from furniture company Steelcase and was known for his skills in turning around struggling organisations.

Ford Chairman Bill Ford said during a briefing with reporters that Hackett's mission at the outset of his appointment included preparing the company for a successor.

Hackett has overseen some major shifts at the 117-year-old Detroit auto staple, including phasing out most sedan models in the US market and launching the Mustang Mach-E, an all-electric sport utility vehicle built on one of the auto industry's most iconic brands.

Both moves drew scrutiny, with some analysts pointing out that ending sedan-building in the truck-centred US market alienated some customers, and some design mavens decrying the Mustang's makeover into a suburban-oriented mainstay.

The company's share price has fallen through most of Hackett's tenure amid questions over the company's long-term direction.

But Hackett pressed on, "taking on the tough issues and slaying the sacred cows", said Bill Ford, who also characterised Farley as a true car expert, noting he enjoys racing vintage cars as a hobby.

Fitch downgrades US outlook to negative from stable

By - Aug 04,2020 - Last updated at Aug 04,2020

WASHINGTON — Ratings agency Fitch on Friday downgraded the outlook for the United States to negative from stable, warning of high debt and deficits made worse by the coronavirus downturn.

"The outlook has been revised to negative to reflect the ongoing deterioration in the US public finances and the absence of a credible fiscal consolidation plan," Fitch said in a statement.

The US is home to the world's worst coronavirus outbreak, which has caused tens of millions of layoffs and a historic 32.9 per cent collapse in gross domestic product (GDP) in the second quarter after businesses closed to stop the spread of COVID-19.

Though it expected the US would suffer a less-severe downturn this year than other comparable economies, Fitch said its decision to change its outlook reflected concerns of both mounting debt and policy gridlock.

"High fiscal deficits and debt were already on a rising medium-term path even before the onset of the huge economic shock precipitated by the coronavirus. They have started to erode the traditional credit strengths of the US," Fitch said.

The agency affirmed the US's AAA rating but said it expected government debt to hit 130 per cent of GDP by 2021. 

The bill may stabilise from 2023, but only if interest rates remain low, and "it is uncertain whether very low market rates will persist once growth and inflation pick up", and rising health care and social security costs could also threaten the stability, Fitch said.

Lawmakers in Washington passed the $2.2 trillion CARES Act in March to blunt the pandemic's blow and are working on another massive spending bill. 

Fitch predicted the deficit will hit 20 per cent of GDP this year before scaling back to 11 per cent of GDP in 2021 as the spending measures conclude.

"It is a truism that the US government cannot run out of money to service its debts," Fitch said. "However, there is a potential [albeit remote] risk of fiscal dominance if debt-to-GDP spirals, posing risks to US economic dynamism and reserve currency status."

EasyJet upbeat on recovery, encouraged by recent customer demand

By - Aug 04,2020 - Last updated at Aug 04,2020

An Airbus A320-214 of British airline Easyjet takes off from the Airbus delivery centre, in Colomiers, near Toulouse, southwestern France, on November 15, 2019 (AFP photo)

LONDON — EasyJet flew into an expected loss during its third quarter as the coronavirus pandemic kept the bulk of planes grounded, the British no-frills airline said on Tuesday.

The group reported a pre-tax loss of £324.5 million ($419 million, 355 million euros) in the three months to June, its third-quarter.

This compared with profit of £174 million a year earlier.

But EasyJet, which returned to the skies on June 15 with a very limited schedule, said it had been encouraged by the level of recent customer demand.

"Our bookings for the remainder of the summer are performing better than expected and as a result we have decided to expand our schedule over the fourth quarter to fly about 40 per cent of capacity," said Chief Executive Johan Lundgren. 

The carrier had previously forecast 30 per cent capacity.

EasyJet shares soared 8 per cent in early London trading on Tuesday following the trading update.

However at just short of 550 pence, its stock price remained hugely down on its pre-pandemic level of around 1,500 pence.

EasyJet, whose entire fleet was grounded on March 30 owing to the pandemic, carried just 117,000 passengers in the final two weeks of June. 

That compared with more than 26 million passengers flown between April and June 2019.

"We have now completed more than one month of restart operations and are seeing encouraging performance across the network with a continued focus to undertake only profitable flying," the airline said Tuesday. 

"In July, EasyJet flew just over two million passengers."

In May, the group announced plans to axe up to 4,500 jobs, or almost one third of its staff, owing to the dramatic slump in demand that has caused airlines worldwide to take similar measures.

General Motors reports $758m Q2 loss

By - Jul 29,2020 - Last updated at Jul 29,2020

The logo of General Motors is seen on the world headquarters building on September 17, 2015 in Detroit, Michigan (AFP photo)

NEW YORK — General Motors reported a smaller-than-expected loss on Wednesday as strong pricing for some newer auto models partially mitigated the hit from much lower sales amid the coronavirus pandemic.

The big US automaker lost $758 million in the second quarter, compared with a $2.4 billion profit in the year-ago period. 

The company described the results as "solid" amid the pandemic, and said steps it had taken to cut costs meant the automaker was well-positioned to weather the storm.

GM said some of the austerity measures, which included worker furloughs, would become permanent.

"We have a track record of making swift and strategic decisions to ensure our long-term success for the benefit of all our stakeholders," GM Chairman and CEO Mary Barra said in a statement.

"We will continue to drive the necessary change throughout the company to enable growth as we prepare to deliver a world with zero crashes, zero emissions and zero congestion."

Strong truck and SUV sales continued to support US results, GM said, but US sales were down 34 per cent due to the COVID-19-imposed production shutdowns.

Sales in China were down just 5.3 per cent while global sales fell 24 per cent, the company said.

Revenues were below expectations at $16.8 billion but the results translated into a loss of just 50 cents per share, far better than the expected hit of $1.77 a share. 

Shares of the auto giant rose nearly four per cent in pre-market trading.

Facebook says EU antitrust probe invades employee privacy

By - Jul 28,2020 - Last updated at Jul 28,2020

A smartphone is being operated in front of GAFA logos (acronym for Google, Apple, Facebook and Amazon web giants) as background in Hede-Bazouges, western France, on September 28, 2017 (AFP photo)

SAN FRANCISCO — Facebook on Monday said it is asking European Union (EU) courts to review "exceptionally broad" requests by antitrust regulators there that would scoop up employees' personal information.

The US-based internet colossus maintained it has been cooperating with a European Commission antitrust investigation and will continue to do so, but that the wording of commission requests casts a net so wide it will haul in Facebook employees' private messages and more.

The leading social network expects to give the commission hundreds of thousands of documents, according to Facebook associate general counsel for competition Tim Lamb.

"The exceptionally broad nature of the commission's requests means we would be required to turn over predominantly irrelevant documents that have nothing to do with the commission's investigations," Lamb said in response to an AFP inquiry.

Those documents include "highly sensitive personal information such as employees' medical information; personal financial documents, and private information about family members of employees".

Facebook thinks such requests should be reviewed by EU courts, according to Lamb, and is asking the court to weigh in on broad search terms such as "applause" or "for free" that could easily be found in personal email messages or other exchanges way beyond the scope of antitrust matters.

Regulatory probes can involve requests for messages or documents bearing certain words or phrases, with those seeking information inclined to craft wide nets and those being queried wanting them narrowly targeted.

A highly anticipated US antitrust hearing, including top executives of four Big Tech firms, was originally set for Monday but has been postponed.

A notice filed by the House Judiciary Committee set no new date for the hearing titled "Examining the Dominance of Amazon, Apple, Facebook, and Google". The antitrust hearing was called amid rising concerns over Big Tech dominance, which has become even more pronounced during the coronavirus pandemic and coincides with investigations at the federal and state levels into the online giants. 

Chief executives Tim Cook of Apple, Jeff Bezos of Amazon, Mark Zuckerberg of Facebook and Sundar Pichai of Google and its parent firm Alphabet had agreed to participate in the session.

 

Gazans get first taste of coffee-to-your-door

Hamuda charges only for beverage, delivery is free

By - Jul 27,2020 - Last updated at Jul 27,2020

Shaaban Hamuda, 31, a Palestinian business management graduate, makes coffee to be delivered to customers, inside his small stand near Rafah Market, in the southern Gaza Strip, on July 13 (AFP photo)

RAFAH, Palestinian Territories — With a practiced hand, a courier balances a tray of steaming cups and with the other grips his bicycle handlebars as he weaves between cars in the crowded Gaza Strip.

Shaaban Hamuda's modest coffee on wheels business is giving the coastal Palestinian territory its first taste of a delivery service inspired by the likes of Uber Eats or Deliveroo.

There are no vividly-coloured bulky backpacks as is customary in Europe and north America, just a tray and a few cups of hot Arabic coffee, covered with foil to avoid splashing and cooling.

Hamuda, 31, a business management graduate, launched his two-wheeled hot drink service in May, from his small stand near Rafah market, in the southern Gaza Strip.

A stove, a few saucepans and dozens of cardboard cups: Everything to prepare cafe au lait, Arabic coffee and mint tea.

Customers only need to contact him on WhatsApp for one of his employees to prepare the order.

Then, a delivery man gets on his cycle and rushes the steaming drink to the customer.

"People like what is new. I have received encouragement from many people," said Hamuda, who charges only for the beverage. Delivery is free.

"We use cycles to attract the attention of the public and it has proven to be effective," he told AFP.

It was through watching YouTube that the father-of-two came across the trend of home-delivery meals by bicycle, a service that has grown popular worldwide.

The young entrepreneur reports satisfactory revenues, but said sales have fallen since the outbreak of COVID-19.

The Gaza Strip, with an estimated population of two million, has been relatively spared by the pandemic, with just over 75 cases, one of whom has died.

But as elsewhere, the crisis has depressed economic activity in Gaza, where poverty and unemployment rates are both above 50 per cent.

The coastal enclave has been under an Israeli-enforced blockade since 2007, the year the Islamist movement Hamas took power.

 

The smell of coffee 

 

Ali Abu Jayab, one of the four deliverymen, could not afford university studies because he comes from a poor family.

"There is no hope for young people in the Gaza Strip," said the 25-year-old, who is delighted to have found work with Hamuda.

"Cycling is all about freedom of movement, it's sport, it's fun and free. It's a good idea and people love it," he said.

Sameh Juda, who owns a perfume shop, was seduced by the smell of Hamuda's coffee.

"I started by ordering a small weekly coffee and now it's one a day," he said with a grin.

"Shaaban's idea is good and innovative, and in addition it is very profitable since the bikes do not require fuel," he said, adding that he appreciates the speed of delivery and ordering via the messaging app.

Despite crippling poverty in Gaza, "young people have innovative ideas that can enable them to find sources of income," said Juda.

 

Gold forges record high as investors seek safety

Euro hits its highest dollar value since September 2018

By - Jul 27,2020 - Last updated at Jul 27,2020

A staff member places gold jewellery in a display at a store in Hangzhou, in China's eastern Zhejiang province, on Monday (AFP photo)

LONDON — Gold soared to a record high on Monday as investors rushed into the safe-haven commodity on concerns about heightened China-US tensions, spiking virus infections and a lack of progress on a new stimulus bill in Washington.

"Always a sign of trouble, gold continued its red hot streak on Monday, the safe haven commodity looking mighty attractive after another troubling weekend of COVID-19 and US-China headlines," said Spreadex analyst Connor Campbell.

Dollar weakness helped send gold flying, after vast monetary easing measures put in place by the US Federal Reserve (Fed) undermined confidence in the greenback.

The gold price hit an all-time high of $1,944.71 per ounce, well above its previous record of $1,921.18 in 2011. It later pulled back somewhat.

Relations between the world's two superpowers took another negative turn when a US mission in Chengdu was ordered to shut in retaliation for the forced shutdown of the Chinese consulate in Houston, Texas.

 

 'Worried what comes next' 

 

"Technically, the superpowers are all-square in this specific tete-a-tete — but investors are worried about what comes next," said Campbell.

After months of strong gains across equity markets — fuelled by trillions of dollars in government and central bank support — traders had already begun to step back, weighing the long-term economic impact of the coronavirus.

Eyes are on the Fed's policy meeting this week, with some predicting further measures to boost the economy — possibly negative interest rates — that could put more pressure on the dollar and send gold above $2,000.

There are also concerns that a worse-than-forecast reading on second-quarter US gross domestic product could spark another dollar sell-off.

The euro hit its highest dollar value since September 2018.

As gold rose, stock markets — a riskier investment — wobbled with investors fretting over the impact of the virus on the economy.

.In Europe, only Frankfurt held on in a sliver of positive territory after a key survey showed that German business confidence rose for the third month in a row in July. London and Paris were both lower.

On Wall Street, the Dow was also a touch weaker at the opening bell.

Ukraine's snail farmers fear collapse over EU lockdowns

By - Jul 26,2020 - Last updated at Jul 26,2020

Workers of a production complex of a snail farm sort snails for shipment abroad in Poltava on July 7 (AFP photo)

VOYNIVKA, Ukraine — When the first snail farm in Ukraine opened five years ago, local villagers could not hide their curiosity.

Residents of Voynivka south of the capital Kiev would peek over the fence of the old dairy farm where manager Yulia Koretska kept the snails to ask if people really ate them.

"They called me the snail mother," she laughed, surrounded by wooden boxes of snails in a green field under the blazing summer sun.

Ex-Soviet Ukraine's budding snail industry now boasts some 400 farms which have found eager buyers in European countries like Italy and Spain.

But sweeping coronavirus restrictions that plunged the global food service industry into an unprecedented crisis have threatened to wipe out the fledgling farms in one of Europe's poorest countries.

Most snail farmers in Ukraine — where the delicacy has yet to catch on — rely heavily on sales to restaurants in Europe where economies are still struggling to recover to pre-pandemic levels after months-long lockdowns.

"Last year everything was great. This year is the exact opposite," says Sergiy Danileyko who owns the Ravlik-2016 farm in Voynivka and runs a warehouse in Spain.

Lost orders from European Union countries have already cost Danileyko 55,000 euros ($63,748), he said, while snails meant for delivery are perishing in refrigerators.

 

Pre-virus boom 

 

Yuliya Nastasivna, director of Ravlykova Khata farm in the Zhytomyr region west of Kiev, has also struggled to shift stock.

She concedes that domestic sales will probably not make up for losses from Europe, since snails are too expensive for most Ukrainians and are still a culinary curiosity.

"If there is no export, then I'm afraid all farmers will collapse," she says.

Nastasivna worries the outlook will be especially bleak if France and Spain go into lockdown again later in the year if there is a surge in infections.

"We must survive," Koretska told AFP at the Voynivka farm. "We can't give up all this."

Before the pandemic, Ukraine's snail industry was booming.

Last year, producers delivered nearly 250 tonnes to Europe — up from just 93 in 2018 — according to data from Ukraine's consumer watchdog.

A national association of producers said it expected farmers to yield 1,000 tonnes this year compared with 200-300 tonnes in 2019.

Ukraine's snails are in such high demand because they are cheap and of good quality, says Nastasivna.

The exports include garden sails — which Nastasivna prefers and wild snails that she says "smell of soil".

"Many foreigners don't even believe there are snail farms Ukraine. When they find out, they want to know more and more".

 

'Escargot, puffs, burgers' 

 

The country's main competitor, Poland, has the added advantage of being part of the EU, she said, and Ukrainian farmers are working to woo European clients by undercutting prices by around 10 per cent.

The strategy saw her secure sales in France for the first time this year and before the pandemic she was in talks with buyers in Italy.

Danileyko and his business partner meanwhile was negotiating with Asian markets and developing snail-based products, like spreads and frozen products.

"We have a very large assortment of escargot, pastries, frozen fillets, fillets in jars," said the 43-year-old who also mentors other farmers.

"We even have burgers."

Despite their popularity abroad, Ukrainian snails have yet to find favour at home where they are prohibitively expensive and too peculiar for most restaurant goers.

But Anna Miller, manager the of Tres Francais restaurant in central Kiev, says her clients are venturing from their gastronomic comfort zones and snails are becoming more popular.

"If you compare to eight years ago, then, of course, snails have become more familiar to our guests," she says.

Stocks retreat as US-China tensions rise

Gold prices up, seen as a haven amid uncertainty

By - Jul 25,2020 - Last updated at Jul 25,2020

A woman walks past a screen showing information and the index of the Taipei Stock Exchange on Friday (AFP photo)

NEW YORK — Global equities took a beating on Friday as China-US tensions intensified, while stalled stimulus talks in Washington fuelled fears for the economy as the dollar fell further.

Lingering worries about the impact on businesses of fresh coronavirus outbreaks helped trigger major profit-taking, overshadowing a batch of bright data in Europe.

"It's a sour end to the trading week," said AJ Bell investment director Russ Mould.

European indices were as much as 2 per cent lower at the close, while Wall Street stocks suffered a second straight session in the red.

Earlier in Asia, Shanghai and Hong Kong dived as relations between the world's two superpowers took another bad turn when China ordered the closure of the American consulate in Chengdu in retaliation for the United States shuttering Beijing's diplomatic mission in Houston this week.

The standoff is the latest in a string of issues — including Hong Kong, coronavirus and Huawei — that have dramatically worsened relations between the superpowers.

Stock markets were also still reeling from Thursday's report of a rise in new jobless claims in the US, which prompted doubts about any ongoing economic rebound there, traders reported.

Hopes that the data would spur US lawmakers to push on with fresh stimulus measures were undermined by the inability of Republicans and the White House to agree on a new relief proposal.

Haven asset gold jumped within spitting distance of $1,900 for the first time since late 2011, boosted by economic uncertainty, geopolitical tensions and Federal Reserve monetary easing that has weakened the dollar.

The greenback continued its retreat against the euro and other currencies and could be poised for further weakness, said BK Asset Management's Kathy Lien.

The currency could be in for more volatility next week with the expiration of US supplemental unemployment benefits, the release of second-quarter gross domestic product (GDP) figures and a Federal Reserve monetary policy meeting, Lien said.

A surprisingly bad GDP figure "could send equities and currencies plunging lower," while Fed chair Jerome Powell is expected to continue to adopt a dovish line.

"The big question is negative rates — any mention of that being an option will be bruising for the dollar," Lien said. "Regardless, we expect the greenback to extend its slide before and after the FOMC."

Arab Bank Group reports $152.1m in net profit for H1

By - Jul 25,2020 - Last updated at Jul 25,2020

AMMAN — Arab Bank Group reported net income after tax of $152.1 million for the first half of 2020 compared  $453.2 million for the same period of the previous year, posting a drop of 66 per cent.

In a statement, the Arab Bank Group attributed the drop to the build up of higher provisions, driven by current and projected economic conditions.

 They also resulted from lower revenues of interest and fee income due to the impact of the Covid-19 outbreak and lower market interest rates and weakening oil prices, the statement added.

Customer deposits grew by 5 per cent to reach $35.9 billion compared to $34.1 billion in the previous year, while loans grew by 2 per cent to reach $26.7 billion compared to $26.2 billion.

The group maintained its strong and robust capital base $9.2 billion in equity and with a capital adequacy ratio of 16.8 per cent, calculated in accordance with Basel III regulations. 

The group enjoys high liquidity with loan-to-deposit ratio at 74.4 per cent, while credit provisions held against non-performing loans continue to exceed 100 per cent, according to the statement.

In the statement, Sabih Masri, chairman of the board of directors, said the pandemic has come as a shock for the global economy, which will witness contraction in 2020. He added that the Covid-19 pandemic has had, and continues to have, a material impact on businesses around the world and the economic environments in which they operate.

The group’s CEO Nemeh Sabbagh said global and regional banking sectors will unavoidably face challenges as a result of the economic contraction, higher cost of risk, and lower interest rates. 

He added that growth in the countries of the Gulf Cooperation Council declined sharply due to the plunge in oil prices since the outbreak of the pandemic. 

Sabbagh said the group’s net operating income dropped by 21 per cent, and the bank opted to build significantly more provisions during the first half of 2020 against the financial implications of Covid-19, and that this has resulted in the drop in the reported net income after tax. 

He added that the drop in the group’s profitably is also the result of the fall in the profits of the bank’s affiliate in Saudi Arabia. 

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