On a summer evening, Iraqis smoke shisha and go bowling at a sprawling riverside complex in Baghdad, one of the many new investments reviving the capital after decades of turmoil.
“Iraq is fertile ground for investments,” said Falah Hassan, the executive director of the complex of restaurants and shops built on the grounds of one of Saddam Hussein’s former palaces and named after the famed “One Thousand and One Nights” folktales.
In oil-rich Iraq, the fragile stability since the defeat of the Islamic State group in 2017 has paved the way for a building boom in a city that in recent years has mainly made headlines for wars and bloody violence.
Since taking office in October, Iraq’s Prime Minister Mohamed Shia al-Sudani has sought to rehabilitate Baghdad’s infrastructure, much of which has been left dilapidated by conflict and neglect.
But a World Bank report in July said investors were still hesitant to put their money in Iraq, citing a “lack of business-friendly legislation, a volatile security environment, administrative inefficiencies, and systemic corruption”.
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Hassan acknowledged investors still faced numerous obstacles, including “the security situation” and “bureaucracy”.
“You have to go through 1,000 counters to get a single permit,” he said, noting the new “1,001 Nights Park” complex perched on Baghdad’s Tigris river was opened in late 2022 by “young investors”.
This is a reality authorities say they are committed to changing to attract investors, especially from the Gulf.
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In late August, Sudani attended the groundbreaking ceremony for a luxury hotel and residential complex, the first major Qatari investment in Baghdad.
“From the prime minister to the lowest-ranking official, we will stand alongside investors and the private sector to carry out projects in Baghdad and the provinces,” the Iraqi leader said.
At the United Nations General Assembly last week, Sudani said “our top priority is the fight against the epidemic of corruption”.
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But experts say dirty money is behind many of the new developments seen in Baghdad.
“In recent years, Iraq’s political elite and their business associates have preferred to invest their wealth in local projects as a safe haven for ill-gotten gains,” wrote Hayder al-Shakeri in a piece for the Institute of Regional and International Studies at American University of Iraq, Sulaimani.
“In part to disguise the origins of their illegally obtained funds, the political elite have allegedly taken to investing in upscale residential compounds, malls, private universities, and other real estate ventures, resulting in a ‘visible boom’ in Baghdad’s development,” he added.
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In less than a year, Sudani has undertaken work to provide improved water and electricity services to Baghdad’s informal neighbourhoods, construct bridges and redesign the streets of one of the Arab world’s most populous cities.
In the 2023-2025 budget passed this year, annual investment expenses are set to hit $37 billion — three times the amount in 2022, the World Bank reported.
These generous allocations are made possible by Iraq’s tremendous oil wealth and foreign reserves, which amount to more than $100 billion.
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In the neighbourhood of Kufa on Baghdad’s outskirts, a bulldozer digs up the road to install pipes, while a dump truck removes the rubble.
A special unit is working to rehabilitate the many informal neighbourhoods of Baghdad “deprived of services for more than 20 years”, said Abdel Razzak Abd Mhessein, the project’s head engineer.
The unit is made up of people from various ministries, state-owned enterprises as well as engineers from the army and paramilitary network, the Popular Mobilisation Forces.
“We have a budget of about 200 billion dinars ($150 million) for infrastructure work for water, sewer systems and more,” the engineer told AFP.
“There are more than 1,093 informal neighbourhoods in Baghdad — a plan has been prepared to gradually carry out work there,” he added.
The public’s reaction to the work so far has been mixed.
“This is what we dreamed of. Paved roads, and services,” said Abu Ali al-Bahadli, a 55-year-old day labourer.
“Before, we couldn’t go out when it rained. The road was muddy and the sewers overflowed.”
His neighbour, Ahmed Radi, is more sceptical, noting work on his street had not brought him adequate electricity or running water.
“Tell me, which official would accept staying even an hour without water,” said the 45-year-old civil servant.
“When will they install pavements? Storm water drains?” he asked.
“We come home tired from work. There’s no water, no electricity. For how much longer?”
New home sales in the United States eased in August but remained high, the government reported Tuesday, as tight supply in the broader housing market kept the number of transactions high.
The lack of inventory for existing homes has kept demand for new properties elevated despite the high mortgage rates that have come about as a result of the Fed’s aggressive campaign of interest rate hikes to tame inflation.
Sales…
New home sales in the United States eased in August but remained high, the government reported Tuesday, as tight supply in the broader housing market kept the number of transactions high.
The lack of inventory for existing homes has kept demand for new properties elevated despite the high mortgage rates that have come about as a result of the Fed’s aggressive campaign of interest rate hikes to tame inflation.
Sales of new single-family houses fell 8.7 percent to 675,000 in August from a month earlier, the Commerce Department said, citing revised data for July.
This was below the median expectation of economists surveyed by MarketWatch.
But new home sales were 5.8 percent higher than a year earlier, underscoring the supply constraints that exist in the housing market.
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The US Federal Reserve has increased interest rates 11 times over the last 18 months as it looks to tackle inflation, which remains stuck stubbornly above the US central bank’s long-term target of two percent.
Higher Fed lending rates have pushed up borrowing costs on popular 30-year mortgages in the United States, making it harder for Americans to buy a home.
This pattern also discourages existing home owners who bought during the recent period of historically low interest rates from selling their properties, further constricting the supply of new dwellings.
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The median sales price for new homes sold in August was $430,300, down slightly from a month earlier.
da/dw
Published: Sept. 26, 2023 at 3:03 a.m. ET
Airbus named Christian Scherer to lead its core commercial aircraft business as chief executive, adding a leadership role that has so far fallen under the remit of group Chief Executive Guillaume Faury.
The European plane maker said Tuesday that Scherer’s appointment would bring renewed focus to the commercial aircraft business at a time when airlines are putting in more orders for planes as they seek to meet increasing demand for air travel from passengers.
“Empowering…
By Mauro Orru
Airbus named Christian Scherer to lead its core commercial aircraft business as chief executive, adding a leadership role that has so far fallen under the remit of group Chief Executive Guillaume Faury.
The European plane maker said Tuesday that Scherer’s appointment would bring renewed focus to the commercial aircraft business at a time when airlines are putting in more orders for planes as they seek to meet increasing demand for air travel from passengers.
“Empowering Christian in the Commercial Aircraft CEO role will enable us to reinforce focus on the success of our Commercial Aircraft business while allowing me to dedicate my time to steering Airbus in a complex and fast-evolving global environment,” said Faury.
Airbus and the wider aviation industry are grappling with supply-chain snags that are making it harder to procure some spare parts and materials for aircraft production.
The new organizational setup will be established in the next few months, Airbus said.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
Existing-home sales in August buckled under pressure from higher mortgage rates. New home sales, a bright spot in an overall dreary housing market, might not be immune.
With data expected this week on August’s new home sales, investors will get a read on whether rising mortgage rates will continue to slam home builder stocks as they did recently.
Existing-home sales in August dropped for the third straight month to a seasonally-adjusted annual rate only 1% higher than its recent 12-year low, set in January. Mortgage rates are the likely culprit: the average 30-year fixed mortgage rate rose above 7% in mid-August before ascending to its highest level in more than 20 years.
Sales activity looks unlikely to have rallied in September: Mortgage rates measured by
have remained above 7% so far this month, at a recent 7.19%. One leading indicator of future sales, the volume of applications for home purchase loans, has remained well below year-ago levels this month, according to Mortgage Bankers Association data. “As homebuyers continue to face higher rates and limited for-sale inventory, which have made purchase conditions more challenging,” Joel Kan, the trade group’s deputy chief economist, said in a statement last week.
Should the bond market reaction to expectations of fewer rate cuts in 2024 hold, this week’s Freddie Mac survey will likely move higher: the 10-year Treasury yield, with which mortgage rates often move, reached its highest level since 2007 on Thursday. Rocket Mortgage, a large mortgage originator, was quoting rates at 7.63% on Friday morning.
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Mortgage rates could reach 8% in the short-term, National Association of Realtors chief economist Lawrence Yun said last week. That could put further pressure on existing-home sales, driving them to a new cyclical low, he said.
Shares of home builders, who had been the beneficiaries of the unusual housing market dynamic created by higher rates, have fallen recently as mortgage rates have risen. Earlier this year, builders stepped in to fill the void created by homeowners who have stayed put thanks to their ultralow mortgage rates. New home sales, as a result, soared: the metric rose as much as 32% above year-ago levels in July to its highest seasonally-adjusted annual rate since February 2022.
But mortgage rates’ recent rise has shaken confidence that the trend can continue: builder sentiment measured by the National Association of Home Builders turned negative earlier this month, while single-family housing starts in August slumped about 4% from the month prior.
Economists expect sales of new homes to have fallen in August, too: consensus estimates compiled by
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expect the government’s measure of contract signings to buy a new home to drop 2% from July, to a seasonally-adjusted annual rate of 700,000. The data is expected Tuesday at 10 a.m.
Economists at
the government-sponsored enterprise that buys mortgages from loan originators in the secondary market, expect sales of new homes to slow in the fourth quarter, and in the first half of 2024. The winter months are typically cooler seasonally, but the higher cost of buying a home—a combination of higher mortgage rates and prices—will add further pressure.
Fannie Mae expects a mild recession next year, says Doug Duncan, Fannie Mae’s chief economist, which would also weigh on sales. The economists expect the average mortgage rate to end 2023 at 7.1%, and fall to 6.3% by the end of 2024 as job losses rise and the economy softens.
But all hope is not lost for home builder stocks. “As the easy money has been made, a close inspection of homebuilding points to a fairly decent backdrop for the industry, supported by favorable credit spreads, elevated demand, and low inventory,” Cirrus Research strategist Georgiana Fung and Director of Research Satya Pradhuman wrote in a Sept. 21 note titled “Homebuilders—Buy the Dip!”
”Although mortgage rates have risen rapidly in response to the aggressive Fed rate hikes, the current pause and even the expectation of a reversal in policy should shine a ray of light on the housing market,” they wrote, highlighting
(ticker: PHM) and
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(MTH) as small- and mid-cap ideas. The companies’ shares were down 3.1% and 4.8% last week, respectively, but up about 62% and 33% so far this year.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
AutoZone easily beat earnings and sales estimates for its fiscal fourth quarter but the stock was falling after sales in the company’s domestic commercial division came up short.
AutoZone (ticker: AZO) posted fourth-quarter earnings of $46.46 a share, rising from a year ago and beating Wall Street’s estimate of $45.17.
Net sales for the…
easily beat earnings and sales estimates for its fiscal fourth quarter but the stock was falling after sales in the company’s domestic commercial division came up short.
(ticker: AZO) posted fourth-quarter earnings of $46.46 a share, rising from a year ago and beating Wall Street’s estimate of $45.17.
Net sales for the automotive replacement parts maker were $5.69 billion, also climbing from the year-ago quarter and beating expectations of $5.61 billion. But total domestic commercial sales were $1.499 billion, below the $1.55 billion analysts had forecast.
Same-store sales for the quarter rose 4.5%, falling from 7.1% a year ago but higher than the 2.4% jump analysts had expected.
“While we started this quarter slowly, we saw improvements in the back half of our quarter,” said CEO Bill Rhodes in the earnings release. “Despite lower-than-expected growth in domestic Commercial, we believe that the initiatives we have in place and are implementing will drive stronger growth in fiscal 2024.”
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AutoZone stock fell 2.2% to $2,467 in premarket trading. Coming into Tuesday’s session, shares have gained 2.3% this year.
Write to Emily Dattilo at emily.dattilo@dowjones.com
Published: Sept. 19, 2023 at 1:31 a.m. ET
By Adria Calatayud
Banco Santander said it is consolidating its retail-and-commercial and consumer activities in all its markets under two new global businesses, a move aimed at aligning these operations with the model of the rest of the group.
The Spanish bank said late Monday that its retail-and-commercial and consumer operations will be…
By Adria Calatayud
Banco Santander said it is consolidating its retail-and-commercial and consumer activities in all its markets under two new global businesses, a move aimed at aligning these operations with the model of the rest of the group.
The Spanish bank said late Monday that its retail-and-commercial and consumer operations will be housed under two new global businesses–retail and commercial and digital consumer bank. These new business segments add to the group’s payments, corporate-and-investment banking, and wealth management-and-insurance businesses.
Santander said these five areas will become its primary reporting segments from January 2024. Country and region-specific data will become secondary segments in the bank’s reporting going forward, it said.
Daniel Barriuso will head Santander’s retail-and-commercial business, which combines all its retail and business banking globally, while Jose Luis de Mora will lead the digital consumer bank that houses all the group’s consumer-finance activities worldwide, Santander said.
The bank said its financial targets outlined in February remain unchanged.
Write to Adria Calatayud at adria.calatayud@dowjones.com
Former KPMG UK chair Bill Michael has joined ESG consultancy Novatus Global as head of strategy and a member of its board.
Michael led KPMG UK from 2017 until February 2021, when he resigned after a backlash to comments he made in a staff town hall meeting.
Michael told staff off for complaining about working conditions during the Covid-19 pandemic, and blasted unconscious bias, which he called “complete and utter crap”.
READVideo of rant by ex-KPMG UK chair Bill Michael: ‘Unconscious bias is complete crap’
“You can’t play the role of victim unless you’re sick. I hope you’re not sick and you’re not ill and if you’re not, take control of your life. Don’t sit there and moan about it, quite frankly,” he told staff in the 8 February 2021 meeting, according to a leaked recording.
Michael resigned from KPMG following criticism after his comments became public.
Michael last year took up a role as a strategic adviser to Aim-listed consultancy Elixirr.
Novatus Global is a London-based risk, regulation and ESG consultancy and technology company. It received £4m in funding last year from venture capital firm Maven Capital.
READ Ex-KPMG boss Bill Michael resurfaces in new consultancy job
“I’m very much looking forward to bringing my consulting experience to the team and being part of such an innovative and dynamic organisation as the business continues to extend its global reach,” Michael said in a statement.
“[Michael’s] unparalleled consulting experience in the global financial services sector combined with his entrepreneurial mindset will be invaluable as we enter our next phase of growth,” said co-founder of Novatus Global Andrew Hedley.
Michael qualified as a chartered accountant in Australia before moving to the UK.
His roles at KPMG included UK head of financial services, global head of banking and capital markets, and finally chair and senior partner of the 16,000-strong UK firm.
To contact the author of this story with feedback or news, email James Booth
Published: Sept. 13, 2023 at 2:48 a.m. ET
By Ian Walker
Redrow has reported a 60.6% rise in fiscal 2023 pretax profit as the average home selling price rose over the period, and re-introduced year-ahead guidance that is much lower.
The London-listed home builder made a pretax profit for the year ended July 2 of 395 million pounds ($493.5 million) compared with GBP246 million for the…
By Ian Walker
Redrow has reported a 60.6% rise in fiscal 2023 pretax profit as the average home selling price rose over the period, and re-introduced year-ahead guidance that is much lower.
The London-listed home builder made a pretax profit for the year ended July 2 of 395 million pounds ($493.5 million) compared with GBP246 million for the comparable period a year earlier.
Revenue for the period was GBP2.13 billion compared with GBP2.14 billion.
The company said that it expects to report pretax profit for fiscal 2024 of between GBP180 million and GBP200 million, and for revenue to be between GBP1.65 billion and GBP1.7 billion.
It sold 5,436 homes in the year compared with 5,715 for the comparable period. The average selling price of private home completions increased by 8% and that of affordable homes by 5% on those in 2022 due to house price inflation and product mix.
The average private reservation rate per week for the year was 0.46 compared to 0.68 in 2022 and 0.34. Sales per outlet per week for the first 10 weeks of the new financial year were 0.34 compared with 0.61 for the same period a year ago.
The total order book at the year end stood at GBP850 million.
“Following the macroeconomic volatility of the last financial year, as we go into 2024 the market remains challenging and uncertain. However, we believe we are well positioned to respond to the market as it develops,” Nonexecutive Chairman Richard Akers said.
The board has declared a final dividend of 20.0 pence a share taking the total payout for the year to 30.0 pence compared with 32.0 pence, in line with the board’s policy of three times dividend cover.
Write to Ian Walker at ian.walker@wsj.com