Algeria’s economy to grow as much as 3.5%

Algeria’s economy is projected to grow as much as 3.5 percent over the coming two years, however the North African country needs to curb rising inflation and unemployment, the managing director of the International Monetary Fund said.  

“Algeria has a significant growth potential, but faces a number of challenges – namely high inflation and unemployment, particularly among the young and women,” Christine Lagarde said in a statement in Algiers after meeting with President Abdelaziz Bouteflika, Prime Minister Abdelmalek Sellal, Finance Minister Karim Djoudi, the governor of the central bank Mohammed Laksaci, and other senior officials.

“To spur inclusive growth and reduce unemployment, a new awakening of the private sector is also needed,” she added. “Structural reforms to enhance the business climate, attract foreign direct investment, deepen the financial sector and equip the workforce with needed skills will be key.”

Algeria’s economy is estimated to have grown about 2.5 percent last year on the back of high domestic demand a gradual recovery in the hydrocarbon sector that is expected to last over the medium term on the back of the national oil company’s large investment programme, according to the Washington-based organisation.


Qatar FA denies it will launch rival Champions League

Qatar has denied claims that it is planning to launch a summer football league featuring some of the world’s top football clubs.

A report by London’s The Times on Wednesday claimed that the gas-rich Gulf state would launch the ‘Dream Football League’ (DFL), which would see some of Europe’s leading clubs paid as much as US$261m on a two-year basis. 

The report suggested that 16 clubs could become ‘permanent members’ of the DFL, with a further eight clubs competing on an invitational basis.

The tournament, which The Times said could be held in Qatar and six cities across the Gulf – including those in the UAE – would be held in the summer, offering a way to test Qatar’s plans to provide air conditioned stadiums and facilities for fans.


Qatar’s Football Association on Thursday refuted the claims. “The Qatar Football Association and other Qatari football entities can categorically confirm that we have no involvement in any such initiative and has heard nothing to suggest such a concept is genuine,” it said in a statement.


Qatar is set to host the FIFA World Cup in the summer of 2022, and has faced criticism about the tournament being played in the hot summer months.

The Gulf state is spending billions of dollars in upgrading its infrastructure ahead of the 2022 World Cup. Apart from new stadiums, the country is also building a railway network, a metro line for the capital, Doha and upgrades for its roads and bridges. A new US$15.5bn airport, Hamad International Airport, will open next month.

Aside from the World Cup, Qatar has also invested heavily in Paris St Germain, the French Ligue 1 side. Currently top of the French League, the Gulf state has brought the likes of David Beckham, Ezequiel Lavezzi and Zlatan Ibrahimovic to Paris. 

Dubai Chamber boss given global role

The head of Dubai Chamber of Commerce and Industry has
been elected deputy chairman of the World Chambers Federation (WCF) in recognition of
Dubai’s growing relevance as an international trading hub.

Hamad Buamim was previously vice chair of the WCF,
responsible for the Middle East, and will now be eligible for the presidency at
the end of his three-year term, which started in January.

The role will give Buamim the opportunity to lead
international discussions relating to world trade, with more than 12,000
chambers of commerce represented by the WCF, an arm of the International
Chamber of Commerce.

Buamim credited his appointment to the emerging
importance of Dubai.


The emirate’s location in the Gulf – connecting Asia,
Europe and Africa – makes it one of the most strategic cities for global trade,
with a significant proportion passing through to be re-exported.


The Dubai Chamber of Commerce and Industry now has more
than 140,000 members who trade in 210 destinations around the world.

“There were other candidates, but I was able to win
because [the WCF members] saw the potential of having someone from this part of
the world to be able to link them – to link the multinational companies and the
SMEs across the globe – with this whole region, in terms of opportunities,”
Buamim told Arabian Business.

The appointment also reinforced the international
business community’s confidence in Dubai’s investment environment.

Buamim said it would be a valuable opportunity for Dubai
and the entire GCC to increase its international business presence.

“From our side, we definitely see it as supporting Dubai
as a whole, and it will also allow Dubai businesses in particular to connect
more with these 12,000 chambers of commerce,” he said.

“I see it as a tool that will support us as a city, and
all the ambitions that we have to be more global and international.

“It’s important for the whole region, the GCC, where the
role of chambers of commerce is ahead of others because these are emerging
economies, the business is growing at a much faster pace compared to
others, and hopefully we’ll be able to contribute back by opening more
businesses, opening our economies even more and connecting them with the rest
of the world going forward.”

The deputy chair role will require Buamim to strengthen
the global network of chambers and to reinforce their role in their respective
communities, while voicing their concerns with the top management of the
international body.

He will also play an important role in developing policy for WCF to help
empower global the chambers with modern trading tools and to improve their
performance in line with best international practices.
WCF chairman Said Peter Mihok welcomed Buamim’s appointment.

“Mr. Buamin consistently demonstrated a commitment
to advancing WCF objectives in his former role as a WCF Vice-Chair,” he said.

“This experience and background make him a perfect fit for
the Deputy Chair leadership position and I very much look forward to working
with him in this role.”

Iberia workers end strikes after compromise deal


MADRID |
Wed Mar 13, 2013 11:40am EDT

MADRID (Reuters) – Workers at Iberia called off further strikes over job and salary cuts at the loss-making Spanish airline after accepting a deal from a government-appointed mediator, the company and unions said on Wednesday.

Workers staged two five-day walkouts in February and March which Iberia’s owner International Airlines Group (IAG) (ICAG.L) said meant losses of 3 million euros ($3.91 million) per day. Thousands of flights were canceled.

“It’s time to pull together and look to the future and to apologize to all our customers for the inconvenience caused over the last few weeks,” said Iberia chief executive Rafael Sanchez-Lozano.

Iberia says it needs to restructure to meet tough competition in a depressed Spanish economy from low-cost rivals like EasyJet EZY.L and Ryanair (RYA.I).

IAG on Sunday accepted proposals from Gregorio Tudela, a university professor brought in to broker a deal, to shed 3,141 jobs instead of the 3,807 it planned and to soften pay cuts.

Spain’s unemployment level has soared to 26 percent in a deep economic crisis and the country’s biggest companies are continuing to announce massive layoffs.

Iberia is one of many companies that proposed big workforce reductions early in 2013. Spain’s 35 top firms are planning 35,000 job cuts in the first part of the year.

Sabadell Bolsa analysts estimated the terms in the Iberia settlement proposal would increase the cost of pay-offs to 410 million euros from 250 million.

Pilots’ union Sepla did not agree to the new terms, though the restructuring plan will still go ahead because it was backed by ground and flight crew unions.

“Iberia hopes that Sepla, which has not backed the agreement reached by 93 percent of staff, reconsiders and does so soon,” Iberia said in a statement.

The company also said that it would meet with unions immediately to discuss how to raise workforce productivity, adding that job cuts and salary reductions must be accompanied by greater efficiency. ($1 = 0.7680 euros)

(Reporting By Clare Kane and Robert Hetz; Editing by David Cowell and Fiona Ortiz)

Business inventories record largest gain in over one-and-a-half years


WASHINGTON |
Wed Mar 13, 2013 10:25am EDT

WASHINGTON (Reuters) – Business inventories rose by the most in more than 1-1/2 years in January as sales fell, suggesting restocking of warehouses will boost economic growth this quarter.

The Commerce Department said on Wednesday inventories increased 1.0 percent, the largest increase since May 2011, after rising 0.3 percent in December.

Economists polled by Reuters had expected inventories to rise 0.4 percent. Automobile inventories rose 1.9 percent, the biggest gain since July, after increasing 1.1 percent in December.

Inventories are a key component of gross domestic product changes. Retail inventories, excluding autos – which go into the calculation of gross domestic product – rose 1.3 percent. That was the largest increase since August 1995 and followed a 0.6 percent rise in December.

Inventories subtracted 1.6 percentage points from fourth-quarter GDP, helping to hold down economic growth to a 0.1 percent rate in the final three months of 2012.

Economists expect businesses to step-up their accumulation of stocks, which were depleted by relatively strong demand in the fourth quarter.

Business sales fell 0.3 percent in January, mostly on the back of declines in autos and furniture, after edging up 0.1 percent the prior month.

At January’s sales pace, it would take 1.29 months for businesses to clear shelves, the most since August. That was up from 1.28 months in December.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Solid retail sales bolster economic outlook


WASHINGTON |
Wed Mar 13, 2013 11:20am EDT

WASHINGTON (Reuters) – Retail sales expanded at their fastest clip in five months in February, the latest sign of momentum for an economy facing headwinds from higher taxes and pricier gasoline.

The solid sales last month comes on the heels of strong gains in employment and manufacturing. But the improvement in the economic picture is likely insufficient to shift the Federal Reserve from its very accommodative monetary policy stance.

“The economy in February is looking solid. None of this, however, is likely to cause the Fed to change tack in the near term,” said John Ryding, chief economist at RDQ Economics in New York.

Retail sales increased 1.1 percent, the largest rise since September, after a revised 0.2 percent gain in January. That was well above economists’ forecasts for a 0.5 percent advance.

So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, rose 0.4 percent after increasing 0.3 percent in January.

The upbeat report helped to lift to the dollar to a seven-month high against a basket of currencies. Prices for U.S. government debt fell and stocks on Wall Street slipped after a recent rally.

The healthy gains in retail sales came despite the end of a 2 percent payroll tax cut and an increase in tax rates for wealthy Americans on January 1.

Spending is being supported by the stock market rally, rising home prices and sustained job gains which are starting to push wages higher.

GROWTH FORECASTS RAISED

The gains in core sales in the first two months of the year offered hope that consumer spending, which accounts for about 70 percent of the U.S. economy, would probably not slow much this quarter after growing at a 2.1 percent annual rate in the fourth quarter.

A second report from the Commerce Department showed business inventories rose by the most in more than 1-1/2 years in January.

Retail inventories, excluding autos – which go into the calculation of gross domestic product – recorded their largest increase since August 1995.

That and the rise in core retail sales should help boost economic growth after output barely expanded in the last three months of 2012.

Economists raised their first-quarter growth estimates by as much as eight tenths of a percentage point after the reports.

Despite paying 35 cents more for gasoline at the pump, consumers also bought automobiles last month.

Receipts at auto dealerships rose 1.1 percent after falling 0.3 percent in January. Excluding autos, retail sales increased 1.0 percent, also the largest increase in five months. That followed a 0.4 percent advance in January.

Last month, the high gas prices helped to lift sales at gasoline stations by 5.0 percent, the largest increase since August. They had risen 0.7 percent in January. Excluding gasoline, sales rose 0.6 percent.

Sales at building materials and garden equipment suppliers increased 1.1 percent, reflecting gains in homebuilding as the housing market recovery gains momentum. Receipts at clothing stores rose 0.2 percent.

Delays in tax refunds probably hurt sales at restaurants and bars, which fell 0.7 percent, while receipts at sporting goods, hobby, book and music stores declined 0.9 percent.

Sales of electronics and appliances slipped 0.2 percent, while receipts at furniture stores dropped 1.6 percent, the largest decline since April 2011.

(Editing by Andrea Ricci)

Exclusive: TNK-BP tycoons turn to ex-BP bosses for help in investing billions


MOSCOW/LONDON |
Wed Mar 13, 2013 11:38am EDT

MOSCOW/LONDON (Reuters) – Representatives of the Alfa Group, set to earn billion of dollars from the sale of Anglo-Russian oil venture TNK-BP, have sounded out former BP CEOs John Browne and Tony Hayward about investing jointly in international oil projects.

German Khan, one of four Soviet-born businessmen who shared control of TNK-BP with BP for a decade, met Browne and Hayward and other potential deal partners in London last month, sources familiar with the discussions said.

Khan, who effectively heads TNK-BP and is Mikhail Fridman’s partner in the Alfa Group consortium, sought advice and broached potential partnerships, according to the sources.

State oil company Rosneft is on the verge of completing a $55 billion takeover of TNK-BP, creating the world’s largest publicly listed oil firm by output, pumping the equivalent of 4.6 million barrels of oil per day.

The Alfa-Access-Renova consortium will receive a cash consideration of $28 billion for their one-half stake in TNK-BP. Alfa will get half of that and wants to reinvest much of the money in oil and gas, as well as in telecoms, the sources said.

“Life after TNK-BP is getting closer – the three groups will go their different ways. Alfa made their name in oil and gas and telecoms, and intend to continue to do so,” said one source.

The other two partners in AAR, mining tycoon Viktor Vekselberg of the Renova Group and Len Blavatnik of Access Industries, are likely to bow out and focus on other ventures and charity work, sources close to TNK-BP and AAR said.

After he left BP, Hayward moved to Vallares, a cash shell founded by financier Nat Rothschild which later bought Turkey’s Genel Energy, a producer focused on the autonomous Iraqi region of Kurdistan.

Hayward now heads Genel Energy, while Brown, Hayward’s predecessor at BP, is a partner in Riverstone, a private equity fund focused on energy, where he is co-head of renewables funds.

Browne joined forces with the tycoons to create TNK-BP in 2003 by pooling their oil assets in an unprecedented Russian joint venture, which later descended into a struggle for control and left Hayward, as BP CEO, to wage boardroom warfare with the four men after Browne’s departure.

Despite the row, the Russian tycoons were always respectful of Browne and his successor Hayward, who later made peace with them.

Hayward did not respond to a phone call and a text message, and Browne’s office at Riverstone did not return a call. Alfa representatives declined to comment.

LIFE AFTER TNK-BP

Alfa’s investment in mobile network Vimpelcom helped transform it into one of the world’s largest telecoms operators and launched Alfa on a series of sector investments.

The Russian tycoons’ ambition to take their oil business global was a big bone of contention with BP, which saw the TNK-BP venture primarily as a way to tap the vast oil riches of Russia, the world’s top crude oil producer.

In the wake of a 2008 conflict in which current BP CEO Bob Dudley, then CEO of TNK-BP, was forced to flee Russia, the tycoons won BP’s consent to invest in an Amazon exploration venture and buy two BP units in Venezuela and Vietnam.

The 2008 conflict marked the decline of the partnership into what BP officials came to term a “strategic misalignment” between the partners, which ended with the sale of TNK-BP to Rosneft, a deal due to conclude in the coming weeks.

BP will become a 20 percent shareholder of Rosneft, holder of the world’s largest liquid hydrocarbon reserves, and the tycoons will for the most part be free to pursue their global ambitions.

“There will be a lot of money left over. German (Khan) will work on oil,” said a source close to AAR.

Fridman is an experienced strategist with a flair for corporate warfare, while Khan is known as a tough enforcer. Both are veterans of the rough-and-tumble post-Soviet business world with a high tolerance of risk.

Khan once told an interviewer that the Hollywood mafia epic the “Godfather” was an “instructive film” and, according to media reports citing Wikileaks, he carried a pistol to dinner.

More recently he has striven to restyle himself as an international oil man, polishing his English and adopting a natty dress style.

Some of the proceeds of the TNK-BP sale are likely to stay in Russia, where the government is due to approve tax incentives to deploy new oil industry technologies used in the U.S. shale revolution, which could encourage smaller players to try their luck alongside giants like TNK-BP.

Latin America could be an initial target for the oil investments, while the fund’s geographic scope will span North and South America, Europe and Southeast Asia, the sources said.

(Additional reporting by Douglas Busvine in Moscow and Andrew Callus in London; Writing by Melissa Akin; Editing by Tom Pfeiffer)

Wall Street slips as investors pause after rally


NEW YORK |
Wed Mar 13, 2013 12:14pm EDT

NEW YORK (Reuters) – Stocks edged lower on Wednesday, faltering after a rally that has taken the Dow to all-time highs, though surprisingly strong retail sales supported the market.

Moves have been muted in recent days as investors consolidate positions after a strong run-up in the first three months of the year. Still, weakness in stocks has been met with buying, which helped propel the Dow on Tuesday to a new record and its eighth day of gains in a row.

It was the Dow’s longest string of gains since an eight-day run in late January and early February 2011. The broader SP 500 is within striking distance of its all-time closing high of 1,565.15.

Signs of strength in the economy and the Federal Reserve’s easy monetary policy have helped U.S. equities accelerate their advance. The blue-chip Dow is up 10 percent for the year and the benchmark SP 500 index has gained nearly 9 percent.

“The market psychology has changed from selling the rallies to buying the dips,” said Dan Veru, chief investment officer of Palisade Capital Management in Fort Lee, New Jersey.

“My sense is that this rally is unpredictable to the upside, not unpredictable to the downside.”

Wednesday’s retail sales report reinforced the view that the U.S. economy has momentum, even with the obstacles the recovery is facing. Sales increased 1.1 percent in February, the largest increase since September.

Investors had been looking for signs of any impact on spending from stubbornly high unemployment and a higher payroll tax that went into effect at the start of the year.

The Morgan Stanley retail index .MVR gained 0.4 percent.

Coach (COH.N) shares rose 0.4 percent to $49.01 after Citigroup raised its rating on the luxury leather goods company’s stock to “buy” from “neutral.” [ID:nWNAB00ZZU] Earlier, the stock had risen as high as $50.09 – up 2.6 percent from Tuesday’s close.

The Dow Jones industrial average .DJI slipped 7.26 points, or 0.05 percent, to 14,442.80. The Standard Poor’s 500 Index .SPX edged down just 0.41 of a point, or 0.03 percent, at 1,552.07. The Nasdaq Composite Index .IXIC was off 2.72 points, or 0.08 percent, to 3,239.60.

Walgreen (WAG.N) jumped 4.1 percent to $42.73 after UBS raised its rating to a “buy” from “neutral”, and lifted its price target to $48 from $41 on the stock of the largest U.S. drugstore chain.

But Express Inc (EXPR.N) shares slid 7.9 percent to $17.37 after the apparel retailer posted fourth-quarter earnings and said it was off to a slow start in the first quarter. The chain caters to 20- to 30-year-olds.

Spectrum Pharmaceuticals (SPPI.O) shares lost 35.4 percent to $8.03 after the biotechnology company forecast full-year sales well below analysts’ estimates.

(Editing by Jan Paschal)