Month: October 2018

The International Monetary Fund announced Friday it had reached an agreement with Ukraine on economic policies that would unlock a new loan deal that will provide nearly $4 billion. The new 14-month standby loan deal replaces an existing four-year financial aid package agreed in March 2015 and due to expire in five months, the IMF said in a statement. The agreement must be approved by the IMF board, which will come later in the year after authorities in Kyiv approve a 2019 budget “consistent with IMF staff recommendations and an increase in household gas and heating tariffs,” a step the government had agreed on but never implemented. But the deal also stresses the need for “continuing to protect low-income households.” Ukraine Prime Minister Volodymyr Groysman had been seeking the additional financing from the Washington-based lender to help his crisis-hit nation. Groysman on Friday announced a gas price increase of 23.5 percent to take effect November 1. He said the “incredible efforts” of Ukrainian negotiators managed to reach a compromise with the IMF and reduce the initial demand to raise prices by 60 percent. “If we are not able to continue cooperation with our international partners … this could lead to the country being put into default,” he said. Ukraine has not received any money from the IMF since April 2017, when the fund released $1 billion for the cash-strapped country to repay loans. It had received less than $9 billion of the original $17.5 billion package. Talks on economic reform …

A global financial body says governments worldwide must establish rules for virtual currencies like bitcoin to stop criminals from using them to launder money or finance terrorism. The Financial Action Task Force said Friday that from next year it will start assessing whether countries are doing enough to fight criminal use of virtual currencies. Countries that don’t could risk being effectively put on a “gray list” by the FATF, which can scare away investors. Marshall Billingslea, an assistant U.S. Treasury secretary who holds the FATF’s rotating leadership, said, “We’ve made clear today that every jurisdiction must establish” virtual currency rules. “It’s no longer optional.” The FATF described how the Islamic State group and al-Qaida have used virtual currencies. Financial regulators worldwide have struggled to deal with the rise of electronic alternatives to traditional money. …

A women-to-women investment fund is coming to Britain next month to boost financing for female-owned businesses, its founder said Thursday, as efforts grow to close the gender investing gap. SheEO has lent more than $2 million to 32 female social entrepreneurs in the United States, Canada and New Zealand to grow their businesses since 2015 in an attempt to address a global gender investment gap. “Most of the people writing checks and investing are men,” founder Vicki Saunders told the Thomson Reuters Foundation. “SheEO wants to fund female innovators with great ideas to create stronger communities and a better world.” Support for female entrepreneurs It is the latest venture to support female entrepreneurs around the world, who often face more obstacles than men, including a lack of access to finance, business networks, international markets and role models. Three out of 10 U.S. businesses are owned by women but they only receive $1 in investment for every $23 that goes to male-led businesses, the Senate Small Business and Entrepreneurship Committee found in 2014. A Goldman Sachs-World Bank Group partnership to provide capital to women entrepreneurs in emerging markets reached $1 billion in investments in May. How it works SheEO brings together 500 women each year who contribute $1,100 each, which they pool and lend, interest-free, to five women-led businesses of their choice. The loans are paid back over five years and then loaned out again, creating a perpetual fund that SheEO hopes will grow to $1 billion, with 1 million investors …

U.S. stocks fell more than 1 percent on Thursday as the European Commission issued a warning regarding Italy’s budget and concerns mounted about the possibility of strained relations between the United States and Saudi Arabia. S&P 500 technology stocks fell more than 2 percent, as did the tech-heavy Nasdaq. Wall Street’s major indexes pared early losses in morning trading but reversed course to fall further as European markets closed. Italian bond yields jumped after the European Commission deemed the country’s 2019 budget draft to be in breach of EU rules. U.S. stocks declined further after U.S. Treasury Secretary Steven Mnuchin pulled out of an investor conference in Saudi Arabia as the White House awaited the outcome of investigations into the disappearance of Saudi journalist Jamal Khashoggi. “It’s a function of a lot of things coalescing into a concern,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Pittsburgh. “The market continues to struggle in the aftermath of the bigger drawdown a week ago.” Mnuchin’s decision sparked worries of potential strain in U.S.-Saudi relations, especially if Saudi leaders were found to have been involved in Khashoggi’s disappearance. Investors raised concern that if Saudi Arabia were sanctioned, it could restrict oil supply, prompting a rise in energy prices. Shares of military contractors such as Lockheed Martin Corp. and Raytheon Co. also fell on concerns that U.S. lawmakers may block arms deals with Saudi Arabia. U.S. stocks had opened lower as weak earnings reports from companies such as Cessna business jet maker Textron Inc. and equipment rental company United Rentals Inc. raised concerns about the impact of tariffs, climbing borrowing costs and rising wages on …

Several major Russian companies are exploring ways to do deals abroad without using dollars, spurred on by a U.S. threat to broaden sanctions that have impeded access of some Russian firms to the international banking system. The Kremlin has been pushing companies to conduct more deals using other currencies to reduce reliance on the dollar. Russian Alrosa, the world’s biggest producer of rough diamonds in carat terms, said it had completed a pilot deal with a Chinese client using yuan in the summer and another non-dollar transaction with an Indian client. Other companies working on similar transactions include energy firm Surgutneftegaz, agricultural company Rusagro and miner Norilsk Nickel. Russia’s central bank said this week the amount of non-dollar dealings was growing, with the share of rouble settlements in the Russia-China and Russia-India goods trade now between 10 and 20 percent. The share was higher in the service industry, it added. But there are limits to how much business can be shifted. Major companies still rely heavily on dollar deals and most of Russia’s foreign earnings come from oil sales priced in dollars. In addition, foreign banks with major U.S. activities may still be wary of business with any entity under U.S. sanctions even if transactions are not in dollars, bankers say. The United States and its allies imposed sanctions on Russia in 2014 over Moscow’s annexation of Crimea. Washington said in August more measures could follow, after accusing Moscow of using a nerve agent against a former Russian agent and …

Hundreds of taxis on Thursday drove at a snail’s pace across the Polish capital Warsaw in protest at the ride-sharing app Uber and other unlicenced competitors. Other cab drivers gathered in front of the justice ministry to call for legislation to regulate the industry. Traditional cab operators argue that the Uber app and others like it represent unfair competition because their drivers can dodge the rules and restrictions that regulate professionals. “There are 12,500 legal taxis in Warsaw and around 8,000 to 9,000 unregistered working for Uber, Taxify and a couple dozen other similar app-based operators,” said Jaroslaw Iglikowski, head of the Warsaw Taxi Drivers union. “The app-based operators are taking around 30-35 percent of our overall business and up to 70 percent of night-time fares, especially on weekends,” he told AFP. The protesting cab drivers claim in a petition they gave the justice minister that the country is losing more than 700 million zloty (160 million euros, $190 million) annually in unpaid taxes because of Uber and others like it. The taxis dispersed in the early afternoon before rush hour, as the drivers had promised they would not cause traffic problems for city residents. Uber has become one of Silicon Valley’s biggest venture-funded startups and has expanded its ride-sharing services to dozens of countries. It does not employ drivers or own vehicles, but instead relies on private contractors using their own cars, allowing them to run their own business. The app claims it is a service provider, connecting passengers …

U.S. Treasury Secretary Steve Mnuchin has pulled out of an investment conference next week in Saudi Arabia, as Riyadh continues to face questions about its involvement in the disappearance and alleged killing of a U.S.-based Saudi journalist in Turkey. Mnuchin made the announcement Thursday on Twitter, following numerous Western corporate chiefs who have dropped out of the three-day gathering that starts Tuesday in Riyadh. As reports from Turkey have mounted alleging Saudi agents tortured, killed and dismembered Jamal Khashoggi two weeks ago inside Riyadh’s consulate in Istanbul, the chief executives announced they will not be attending the Future Investment Initiative conference. Saudi Arabia has denied killing Khashoggi, a critic of the country’s de facto leader, Crown Prince Mohammed bin Salman. Khashoggi wrote about Saudi Arabia in columns for The Washington Post. Saudi Arabia says it says it will disclose the results of its investigation into his disappearance. The investment conference is being organized by Saudi Arabia’s mammoth sovereign wealth fund and was being billed as a showcase for economic reforms advanced by Salman as he attempts to diversify the kingdom’s economy, for decades focused on its role as the world’s leading oil exporter. The gathering had been dubbed “Davos in the Desert,” after the annual meeting of world economic leaders in Switzerland.     International Monetary Fund managing director Christine Lagarde said she is skipping the conference. JP Morgan chief executive Jamie Dimon and the heads of two top U.S. investment firms — BlackRock and Blackstone — have dropped out …

In the late 1960s, while fledgling new retailers Walmart, Kohl’s, Kmart and Target were hard at work establishing a foothold in the hearts, minds and wallets of the American consumer, the nation’s dominant retailer was busy building the world’s tallest building. In pouring its funds and focus into Chicago’s Sears Tower, America’s original super-store may have unwittingly become the architect of its own long, slow and painful demise. “Walmart, the strongest of all those four, wasn’t anywhere near where Sears was for a couple of decades,” says James Schrager, professor of entrepreneurship and strategy at the University of Chicago’s Booth School of Business. “So, if Sears was on top of things, even in the early 80s, they could have been Target or a better version of Kmart, they could have been any of that. But they sat on their hands and built their tower in 1969 instead.” It’s been a precipitous fall for the one-time retail powerhouse, which this week filed for bankruptcy after years of losses. Established 123 years ago, Sears was literally the place where America shopped, as its tagline boasted. Sears had everything from clothing and toys, to tools and appliances. It even sold housing kits. Thousands of Sears homes still stand across America today. For decades, American families eagerly awaited the delivery of the retailer’s several-inches thick mail order catalogues. The secret to Sears’ success was being able to stay ahead of the market, according to Schrager. From small stores in small towns, to big stores …

The Trump administration has again declined to label China a currency manipulator, but says it is keeping China and five other nations on a watch list. “Of particular concern are China’s lack of currency transparency and the recent weakness in its currency,” U.S. Treasury Secretary Steven Mnuchin said in his biannual report to Congress. “Those pose major challenges to achieving fairer and more balanced trade and we will continue to monitor and review China’s currency practices, including thorough ongoing discussions with the People’s Bank of China,” he said. Mnuchin said China — along with Germany, India, Japan, South Korea and Switzerland — would be placed on a list of countries whose currency practices require what the report calls “close attention.” Governments manipulate currency by keeping the exchange rates artificially low to make its goods and services cheaper on the world market.  But that puts trading partners and others at a disadvantage. President Donald Trump promised throughout the campaign to label China a currency manipulator once he got into office, but so far he has declined to do so. Instead, Trump has imposed tariffs on billions of dollars’ worth of Chinese imports to address what he says are unfair trade practices and the trade deficit. …

Jubilant customers stood in long lines for hours then lit up and celebrated on sidewalks Wednesday as Canada became the world’s largest legal marijuana marketplace. In Toronto, people smoked joints as soon as they rolled out of bed in a big “wake and bake” celebration. In Alberta, a government website that sells pot crashed when too many people tried to place orders. And in Montreal, Graeme Campbell welcomed the day he could easily buy all the pot he wanted.  “It’s hard to find people to sell to me because I look like a cop,” the clean-cut, 43-year-old computer programmer said outside a newly opened pot store. He and his friend Alex Lacrosse were smoking a joint when two police officers walked by. “I passed you a joint right in front of them and they didn’t even bat an eye,” Lacrosse told his friend. Festivities erupted throughout the nation as Canada became the largest country on the planet with legal marijuana sales. At least 111 pot shops were expected to open Wednesday across the nation of 37 million people, with many more to come, according to an Associated Press survey of the provinces. Uruguay was the first country to legalize marijuana. Ian Power was first in line at a store in St. John’s, but didn’t plan to smoke the one gram he bought after midnight. “I am going to frame it and hang it on my wall,” the 46-year-old Power said. “I’m going to save it forever.” Tom Clarke, an illegal …

Electric auto brand Tesla Inc. said it signed an agreement Wednesday to secure land in Shanghai for its first factory outside the United States, pushing ahead with development despite mounting U.S.-Chinese trade tensions. Tesla, based on Palo Alto, California, announced plans for the Shanghai factory in July after the Chinese government said it would end restrictions on full foreign ownership of electric vehicle makers to speed up industry development. Those plans have gone ahead despite tariff hikes by Washington and Beijing on billions of dollars of each other’s goods in a dispute over Chinese technology policy. U.S. imports targeted by Beijing’s penalties include electric cars. China is the biggest global electric vehicle market and Tesla’s second-largest after the United States. Tesla joins global automakers including General Motors Co., Volkswagen AG and Nissan Motor Corp. that are pouring billions of dollars into manufacturing electric vehicles in China. Local production would eliminate risks from tariffs and other import controls. It would help Tesla develop parts suppliers to support after service and make its vehicles more appealing to mainstream Chinese buyers. Tesla said it signed a “land transfer agreement” on a 210-acre (84-hectare) site in the Lingang district in southeastern Shanghai. That is “an important milestone for what will be our next advanced, sustainably developed manufacturing site,” Tesla’s vice president of worldwide sales, Robin Ren, said in a statement. Shanghai is a center of China’s auto industry and home to state-owned Shanghai Automotive Industries Corp., the main local manufacturer for GM and VW. …

Western corporate chiefs are continuing to pull out of an investment conference in Saudi Arabia next week, distancing themselves from questions about Riyadh’s involvement in the disappearance and alleged killing of a U.S.-based Saudi journalist in Turkey. At first, many of the business leaders reserved judgment on what happened to the missing journalist, Jamal Khashoggi. But as reports from Turkey have mounted alleging that Saudi agents tortured, killed and dismembered Khashoggi two weeks ago inside the country’s consulate in Istanbul, the chief executives have announced in recent days they will not be attending the three-day Future Investment Initiative conference in Riyadh starting Tuesday. Saudi Arabia has denied killing Khashoggi, a critic of the country’s de facto leader, Crown Prince Mohammed bin Salman, in columns he wrote for The Washington Post. It says it will disclose the results of its investigation into his disappearance. The conference is being organized by Saudi Arabia’s mammoth sovereign wealth fund and was being billed as a showcase for economic reforms advanced by the crown prince as he attempts to diversify the kingdom’s economy, for decades focused on its role as the world’s leading oil exporter. The gathering had been dubbed “Davos in the Desert,” after the annual meeting of world economic leaders in Switzerland. JP Morgan chief executive Jamie Dimon and the heads of two top U.S. investment firms — BlackRock and Blackstone — have dropped out of the conference. Top executives at the Ford auto manufacturing company and the MasterCard credit company have said …