Major International Business Headlines Brief ::: 22 May 2025

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Major International Business Headlines Brief :::  22 May 2025 

 


 


 


 <mailto:info at bulls.co.zw> 

 


 

 


 

ü  Nike to raise prices as firms face tariffs uncertainty

ü  How a joke about rice cost a Japan cabinet minister his job

ü  M&S website back online, allowing users to browse

ü  Trump meets Republican hard-liners in hopes of moving tax bill forward

ü  Four sticking points in Trump's 'big, beautiful' tax bill

ü  Famous Apple designer Sir Jony Ive joins OpenAI

ü  Did Trump really strike Gulf deals worth $2tn?

ü  Apple’s biggest contract manufacturer Foxconn readies 300-acre iPhone
making campus in India with dorms for 30,000 employees

ü  Afreximbank reports strong performance for Q1 2025 in line with
expectations

ü  China stimulus lies behind a Great Wall of assets

ü  Oil prices fall 1% on potential further increase to OPEC+ output

ü  Japan and U.S. finance officials back market control of foreign exchange
rates

ü  Higher-than-expected borrowing figures put pressure on Reeves

 


 <mailto:info at bulls.co.zw> 

 


 

Nike to raise prices as firms face tariffs uncertainty

Nike is set to raise prices on some trainers and clothing from 1 June, weeks
after rival Adidas warned it would have to hike the cost of products due to
US tariffs.

 

The BBC understands Nike's decision was taken due to a number of internal
and external factors and the sportswear giant said it regularly made "price
adjustments".

 

While it did not name US tariffs explicitly as a reason for the increase,
almost all of Nike's goods are made in Asia - a region targeted by President
Donald Trump's tariffs.

 

The US has paused higher so-called "reciprocal" tariffs until July, but a
"base" levy of 10% remains in place against a long list of countries.

 

 

Tariffs are almost always paid by the company that is importing the goods
into a country rather than the business which makes the product.

 

While importers can decide to absorb the extra tax, they may also choose to
pass it on to the consumer.

 

>From Sunday, 1 June, most Nike shoes that cost more than $100 (£74.50) will
see prices rise by as much as $10.

 

Prices of clothing and equipment will also be raised by between $2 to $10.

 

The BBC has contacted Nike to check if the increases will be applied to just
the US or internationally.

 

Nike's popular Air Force 1 trainers, as well as shoes that cost less than
$100, will be exempted from the price hikes. Children's products and Jordan
branded apparel and accessories will also be excluded.

 

Last month, Adidas said that levies imposed by Trump would lead to higher
prices in the US for popular trainers including the Gazelle and Samba.

 

On Wednesday, UK sportswear retailer JD Sports said higher prices in its key
US market due to tariffs could hit customer demand.

 

What tariffs has Trump announced and why?

How might tariffs change the price of Nike's iconic trainers?

 

Companies around the world are contending with the uncertainty of the Trump
administration's trade policies.

 

A slew of steep "reciprocal" tariffs, which were announced on 2 April, were
put on hold as countries from around the world negotiate with the White
House.

 

Goods from Vietnam, Indonesia, Thailand and China - countries that make
shoes for US companies - are set to face some of the heaviest US import
taxes of between 32% to 54%.

 

The 90-day pause is due to expire in early July, but the base 10% tariff
remains in place.

 

Commenting on the price rises, Nike said: "We regularly evaluate our
business and make pricing adjustments as part of our seasonal planning."

 

The company also said it would sell products directly to Amazon in the US
for the first time since 2019.

 

Nike had previously listed its goods on the platform, but stopped six years
ago to focus on its official website and physical stores.-BBC

 

 

 

 

How a joke about rice cost a Japan cabinet minister his job

When Japan's farm minister declared that he never had to buy rice because
his supporters give him "plenty" of it as gifts, he hoped to draw laughs.

 

Instead Taku Eto drew outrage - and enough of it to force him to resign.

 

Japan is facing its first cost-of-living crisis in decades, which is hitting
a beloved staple: rice. The price has more than doubled in the last year,
and imported varieties are few and far between.

 

Eto apologised, saying he had gone "too far" with his comments on Sunday at
a local fundraiser. He resigned after opposition parties threatened a
no-confidence motion against him.

 

His ousting deals a fresh blow to Prime Minister Shigeru Ishiba's minority
government, which was already struggling with falling public support.

 

Rice can be a powerful trigger in Japan, where shortages have caused
political upsets before. Riots over the soaring cost of rice even toppled a
government in 1918.

 

So it's not that surprising that rice prices have a role in Ishiba's
plummeting approval ratings.

 

"Politicians don't go to supermarkets to do their grocery shopping so they
don't understand," 31-year-old Memori Higuchi tells the BBC from her home in
Yokohama.

 

Ms Higuchi is a first-time mother of a seven-month-old. Good food for her
postnatal recovery has been crucial, and her daughter will soon start eating
solid food.

 

"I want her to eat well so if prices keep going up, we may have to reduce
the amount of rice my husband and I eat."

 

 

A costly error?

It's a simple issue of supply and demand, agricultural economist Kunio
Nishikawa of Ibaraki University says.

 

But he believes it was caused by a government miscalculation.

 

Until 1995, the government controlled the amount of rice farmers produced by
working closely with agricultural cooperatives. The law was abolished that
year but the agriculture ministry continues to publish demand estimates so
farmers can avoid producing a glut of rice.

 

But, Prof Nishikawa says, they got it wrong in 2023 and 2024. They estimated
the demand to be 6.8m tonnes, while the actual demand, he adds, was 7.05m
tonnes.

 

Demand for rice went up because of more tourists visiting Japan and a rise
in people eating out after the pandemic.

 

Getty Images A supermarket worker put up a sign informing customers
purchasing rice to buy only one bag per person in Tokyo.Getty Images

Many stores are asking customers to buy only one bag per person or family to
avoid empty shelves

 

But actual production was even lower than the estimate: 6.61m tonnes, Prof
Nishikawa says.

 

"It is true that the demand for rice jumped, due to several factors -
including the fact that rice was relatively affordable compared to other
food items and a rise in the number of overseas visitors," a spokesperson
for the agriculture ministry told the BBC.

 

"The quality of rice wasn't great due to unusually high temperatures which
also resulted in lower rice production."

 

Growing rice is no longer profitable

Rice farmers have been unable to make enough money for many years, says
59-year-old Kosuke Kasahara, whose family have been in farming for
generations.

 

He explains that it costs approximately 18,500 yen ($125.70; £94.60) to
produce 60kg of rice but the cooperative in his area of Niigata on the west
coast of Japan offered to buy it last year at 19,000 yen.

 

"Until three or four years ago, the government would even offer financial
incentives to municipalities that agreed to reduce rice production," he
adds.

 

The ministry spokesperson confirms that the government has offered subsidies
to those choosing to produce wheat or soybeans instead of rice.

 

Meanwhile, younger farmers have been choosing to produce different types of
rice that are used for sake, rice crackers or fed to livestock because
demand for rice in Japan had been falling until last year.

 

"I got tired of fighting retailers or restaurants that wanted me to sell
rice cheaply for many years," says Shinya Tabuchi.

 

But that's been flipped on its head, with the going rate for 60kg of rice
today at 40,000 to 50,000 yen.

 

While higher prices are bad news for shoppers, it means many struggling
farmers will finally be able to make money.

 

But as the public grew angry with the surge, the government auctioned some
of its emergency reserves of rice in March to try to bring prices down.

 

Rice, a Japanese staple, has caused political upsets before

Many countries have strategic reserves - stockpiles of vital goods - of
crude oil or natural gas to prepare for exceptional circumstances. In Asia,
many governments also have stockpiles of rice.

 

In recent years, Japan's rice stockpile had only been tapped in the wake of
natural disasters.

 

"The government has always told us that they would not release its emergency
rice stocks to control the price so we felt betrayed," Mr Tabuchi says.

 

Despite the government's rare decision to release rice, prices have
continued to rise.

 

 

Tackling soaring prices

The cost of rice is also soaring in South East Asia, which accounts for
almost 30% of global rice production - economic, political and climate
pressures have resulted in shortages in recent years.

 

In Japan though the issue has become so serious that the country has begun
importing rice from South Korea for the first time in a quarter of a
century, even though consumers prefer homegrown varieties.

 

PM Ishiba has also hinted at expanding imports of US rice as his government
continues to negotiate a trade deal with Washington.

 

But shoppers like Ms Higuchi say they are unlikely to buy non-Japanese rice.

 

"We've been saying local production for local consumption for a long time,"
she says. "There has to be a way for Japanese farmers to be profitable and
consumers to feel safe by being able to afford home-grown produce."

 

Memori Higuchi Memori Higuchi feeding her 7-month-old baby.Memori Higuchi

First time mother Memori Higuchi says she hesitates to buy non-Japanese rice

This divides opinion among farmers.

 

"You may hear that the industry is ageing and shrinking but that is not
necessarily true," says Mr Tabuchi, who believes the sector has been too
protected by the government.

 

"Many elderly farmers can afford to sell rice cheaply because they have
pensions and assets but the younger generation has to be able to make money.
Instead of guaranteeing the income of all the farmers and distorting the
market, the government should let unprofitable farmers fail."

 

Mr Kasahara disagrees: "Farming in rural areas like ours is about being part
of a community. If we let those farmers fail, our areas will be in ruins."

 

He argues the government should set a guaranteed buying price of 32,000 to
36,000 yen per 60kg of rice which is lower than today's price but still
allows farmers to be profitable.

 

And given what happened to Eto, it is also a sensitive topic for
politicians.

 

The country is due to hold a key national election this summer so pleasing
both consumers and farmers - especially the elderly in both camps who tend
to vote more - is crucial.-BBC

 

 

 

 

M&S website back online, allowing users to browse

The Marks & Spencer website is back online after leaving users unable to
browse for several hours.

 

Customers have been unable to make online orders for weeks as the retailer
deals with the aftermath of a cyber-attack, but on Wednesday evening the
website went down completely.

 

A message read: "Sorry you can't browse the site currently. We're making
some updates and will be back soon."

 

However, just after 07:00 on Thursday morning, the company confirmed that
the website was open for browsing again after making some overnight updates.

 

 

On Wednesday, the retailer said it estimated the cyber-attack would hit this
year's profits by around £300m.

 

Although some of this will be covered by insurance, the figure was more than
analysts had expected.

 

It added that its online services would continue to be disrupted until July,
with a gradual return to normal.

 

A screengrab of what the M&S website looked like overnight. It is split in
two horizontally. Top half is white with black writing and bottom half is
black

A screenshot of what the M&S website looked like overnight like

 

Following the cyber attack, M&S said some personal customer data had been
stolen, which could include telephone numbers, home addresses and dates of
birth.

 

The High Street giant assured customers that the data theft did not include
useable payment or card details, or any account passwords, but added that
online order histories could have been stolen.

 

The attack took place over the Easter weekend, initially affecting
click-and-collect and contactless payments. A few days later M&S suspended
all online orders.

 

"Over the last few weeks, we have been managing a highly sophisticated and
targeted cyber-attack, which has led to a limited period of disruption,"
said M&S chief executive Stuart Machin.

 

Police are focusing on a notorious group of English-speaking hackers, known
as Scattered Spider, the BBC has learned.

 

The same group is believed to have been behind attacks on the Co-op and
Harrods, but it was M&S that suffered the biggest impact.

 

In a statement on Thursday morning regarding its website, M&S said: "Our
website is open for browsing. As we work to get things back to normal for
our customers we are doing some overnight updates."

 

 

-BBC

 

 

 

Trump meets Republican hard-liners in hopes of moving tax bill forward

President Donald Trump and House Republicans continued to negotiate a
far-reaching tax and spending bill on Wednesday, holding discussions at the
White House ahead of a potential vote.

 

Trump and his staff spent several hours with members of the House Freedom
Caucus, who have refused to support a bill they say does not go far enough
in cutting spending.

 

Many of Trump's top priorities are in the legislation: extending tax cuts
passed in 2017, eliminating taxes on tips, spending more on defence and
border security, and cutting government health care programmes.

 

The Congressional Budget Office (CBO) estimates the bill would add about
$2.3tn (£1.7tn) to the US national debt over the next 10 years.

 

 

Trump campaigned on promises to reduce the US budget deficit - meaning the
annual gap between the government's tax revenue and its spending - which
currently stands at around $36.2tn (£27tn).

 

Negotiators worked through the night on Tuesday, including a meeting of a
House committee which began at 01:00 local time (05:00 GMT) Wednesday.

 

Because Republicans hold a narrow majority in the House and Democrats
uniformly oppose the legislation, Trump can only risk losing a handful of
votes from his own party. He and congressional allies are also under the
pressure of a self-imposed deadline to get the bill passed by the end of the
month, which is now 10 days away.

 

After it wins approval in the House, the bill will head to the
Republican-led Senate, which could make its own changes.

 

After leaving the White House negotiations on Wednesday, Speaker Mike
Johnson said the full House could vote on the bill Wednesday night or
Thursday morning, according to Politico.

 

The president has called his proposal a "big, beautiful, bill" – the measure
is now officially known as the "One Big Beautiful Bill Act" – but has faced
opposition from members of the House Freedom Caucus who want additional
spending cuts.

 

At the same time, several Republicans representing districts in
Democratic-leaning states want bigger tax cuts for their voters - to be
achieved by increasing credits those voters receive for paying state taxes
at relatively high rates.

 

Trump and Johnson are trying win over both dissenting factions, which could
prove to be a delicate balance.

 

Kentucky's Thomas Massie, one of the Republican holdouts in the House, took
to X to complain about the closed negotiations. Trump earlier this week
labelled him a "grandstander".

 

"Major provisions of the big beautiful bill are still being negotiated and
written, yet we are being told we will vote on it today," Massie wrote.
"Shouldn't we take more than a few hours to read a bill this big and this
consequential?"

 

Trump also visited Capitol Hill on Tuesday to push for the bill, meeting
with Republicans and urging both the budget hawks and tax-cut proponents to
accept the bill on the table.

 

But it was unclear if he managed to swing many votes.

 

Democrats, saying the bill would benefit the rich and unfairly punish
lower-income Americans, have made it clear in committee hearings and on
social media that they will only vote against it.

 

The White House has dismissed worries about the ballooning US debt, arguing
that tax cuts will stimulate the economy. Trump also has said his separate
programme of tariffs will bring additional revenue to the federal
government. However, most economists and experts agree with the non-partisan
CBO that the bill will add to the debt.

 

The bill's supporters have remained bullish about its eventual prospects.

 

"Failure is not an option in getting this done," said Republican Jason Smith
of Missouri.

 

Reuters A photo of a copy of an agenda of a meeting at 01:00 on Wednesday
with the title "One Big Beautiful Bill Act"Reuters

The spending bill is now officially known as the One Big Beautiful Bill Act

 

A separate CBO analysis reported that the bill would hurt the poorest
Americans while benefiting the top 10% of earners.

 

"We're going to ask Americans to finance tax cuts for billionaires on the
national debt - on the credit card," said Democratic Representative Gwen
Moore of Wisconsin.

 

The tight margin between the parties in the House means Trump and his allies
need near-unanimous support from Republicans to pass the measure.

 

House Speaker Mike Johnson has said he wants the bill passed by Monday 26
May, the Memorial Day holiday in the US.

 

Although it is possible the bill could come up in the full House on
Wednesday or Thursday, it is unlikely that the Speaker will risk a vote
unless he is confident that the measure will pass.

 

Even if the bill passes the House, it is a long way from becoming law. The
legislation would move to the Senate - and then be subjected to a likely
negotiation process to reconcile two versions of the bill - before it can be
sent to the president for his signature.-BBC

 

 

 

 

 

Four sticking points in Trump's 'big, beautiful' tax bill

US President Donald Trump's sweeping tax and spending bill is a key part of
his legislative agenda - but for the moment it has stalled in Congress.

 

Republicans narrowly control both the House of Representatives and Senate,
and it is discord among members of Trump's own party that has put his "big
beautiful bill" in limbo.

 

Trump met with dissenting Republicans on Capitol Hill on Tuesday, and
members of the hard-line House Freedom Caucus were reportedly set to visit
the White House on Wednesday.

 

Reports suggest, though, Trump has been unable to convince all the holdouts.

 

He has said that if a Republican lawmaker opposed the bill, they "wouldn't
be a Republican much longer".

 

The bill was narrowly approved by the House budget committee on Sunday
night, giving House Speaker Mike Johnson a rare win. But it had failed on
the committee's first vote, with Republican hold-outs concerned about
spending and national debt.

 

The Senate must also pass the legislation and Republicans there are working
on their own tweaks.

 

Let's take a look at where disagreements lie.

 

 

How much to cut?

The bill combines an extension of tax cuts passed in 2017 with other tax
measures and spending cuts.

 

Trump and his congressional allies are trying to satisfy both budget hawks
who want deeper spending cuts and Republicans who want tax reductions but
worry about the effects of cutting some programmes.

 

That has led to one of the biggest questions: How much spending to slash?

 

The numbers can be daunting, especially for a party that has traditionally
pushed to reduce the country's debt.

 

The nonpartisan Congressional Budget Office estimates that the bill would,
over the next decade, add about $2.3 trillion (£1.7tn) to the national debt,
which is currently around $36.2tn (£27tn).

 

Cutting government health care programmes and tax incentives for green
energy would save money, but the CBO and most economists believe that still
wouldn't be enough to make up for revenue lost by the bill's tax cuts.

 

The prospect of swelling national debt - which Trump promised to tackle
during his election campaign - has prompted opposition from the House
Freedom Caucus.

 

Moody's downgrades US credit rating citing rising debt

Five House Republicans stall Trump's 'big, beautiful' tax bill

Medicaid

Perhaps the most contentious item in the bill are cuts - partly through work
requirements - to Medicaid, a healthcare programme aimed at lower-income
Americans.

 

Chip Roy of Texas and other Republicans in the House - including South
Carolina's Ralph Norman, Oklahoma's Josh Brecheen and Georgia's Andrew Clyde
- are pressing for the bill to go further.

 

On Sunday night, Speaker Johnson said "minor modifications" had been
promised to the four rebels, including preventing undocumented immigrants
from accessing Medicaid.

 

The concessions also involved Medicaid work requirements.

 

Under the original House bill, states would have to deny Medicaid coverage
to able-bodied Americans who were not working at least 80 hours a month or
undertaking other community options, starting in 2029, after Trump left
office. Coverage would also be ended for those not meeting work
requirements.

 

In the current version, the requirements would start next year.

 

But other Republicans, such as Missouri Senator Josh Hawley, have argued
against any cuts to Medicaid, warning they would hurt millions of
lower-income constituents.

 

Hawley wrote in the New York Times the cuts would be "both morally wrong and
politically suicidal".

 

Dozens of other Republicans are also concerned.

 

 

State and local tax deductions

Then, there are Republicans seeking larger tax cuts. They generally
represent relatively wealthy areas in higher-tax, Democratic-dominated
states such as New York.

 

They want the bill to provide bigger tax credits for what people pay in
state and local taxes - known as Salt.

 

The bipartisan "Salt Caucus" has been pushing raise the current $10,000 cap
on such credits since it was formed in 2021. Some Republican members want it
raised to $62,000 for individuals.

 

House Speaker Mike Johnson and the so-called Salt Republicans reached a
tentative compromise late Tuesday to raise it to $40,000, according to
reports.

 

But in a sign of how tricky negotiations have become, that news prompted
dismay from budget hawks who insist that any such tax cut be balanced with
correspondent spending cuts.

 

Food assistance

Every year more than 42 million Americans use federal food aid called Snap ,
which stands for Supplemental Nutrition Assistance Program, to buy
groceries.

 

Many House Republicans want to shrink the amount the government pays for
"food stamps". The legislation would require individual states to shoulder
5% of the benefit's costs each year, as well as 75% of the administrative
costs.

 

At the moment, states are not responsible for any Snap costs and pay 50% of
administrative costs.

 

Republicans also hope to expand existing work requirements, which currently
apply to people without dependants between the ages of 18 and 54, by raising
the upper age limit to 64.

 

The House Agriculture Committee has already approved $300m (£223m) in
reductions to Snap to balance out tax cuts.

 

Democratic National Committee chair Ken Martin called the proposed changes
"a slap in the face" of millions of people who rely on Snap "to put food on
the table and make sure their kids don't go hungry".

 

Republicans say they would reduce government waste, promote work, and
restore "common sense" to the programme.

 

Government data shows about 12% of Americans received Snap benefits last
year.

 

That figure is greater in numerous Republican-leaning states with relatively
high poverty rates, including Alabama and Oklahoma.-BBC

 

 

 

Famous Apple designer Sir Jony Ive joins OpenAI

Legendary British designer Sir Jony Ive, who helped create the Apple iPhone,
is joining forces with OpenAI, as the artificial intelligence (AI) firm sets
its sights on developing hardware.

 

OpenAI, the maker of ChatGPT, will buy a start-up founded by Sir Jony, who
will "assume deep design and creative responsibilities" across the company,
the two firms said in an announcement.

 

Open AI boss Sam Altman said the goal was to create a "family of devices"
made specifically with AI in mind.

 

The deal comes as the tech industry has been looking for its next hardware
hit after the iPhone and takes particular aim at Apple, which some say has
been moving too slowly to incorporate AI into its devices.

 

 

"I think we have the opportunity here to kind of completely re-imagine what
it means to use a computer," Mr Altman said in video.

 

Shares in Apple fell more than 2% after the announcement.

 

Sir Jony worked for Apple for more than 30 years, helping to revive the
company with pathbreaking products including the iPhone and iPod.

 

He left the firm in 2019 to found his own company, LoveFrom, which has
worked with companies such as Airbnb and Moncler.

 

The idea for io, which Sir Jony founded last year, grew out of several years
of quiet collaboration between the two companies, according to the
announcement.

 

"It became clear that our ambitions to develop, engineer and manufacture a
new family of products demanded an entirely new company," it said.

 

OpenAI had a 23% stake in the startup prior to Wednesday's announcement,
according to US media.

 

US media reported that the merger valued io at roughly $6.4bn (£4.7bn).
LoveFrom will remain independent.

 

In the video announcing the merger, Sir Jony said he believed the world was
on the "brink of a new generation of technology".

 

 

OpenAI set off a wave of investment in AI in 2022 when it unveiled ChatGPT.

 

It has continued to push into new areas, such as shopping and search, in a
challenge to established tech giants.

 

The foray into hardware comes as tech rivals such as Meta, Google and Apple
have also been investing in products such as headsets and glasses, seeing
new opportunity due to advances in AI.-BBC

 

 

 

 

Did Trump really strike Gulf deals worth $2tn?

Flying home from his Gulf trip last week, President Donald Trump told
reporters "that was a great four days, historic four days".

 

Visiting Saudi Arabia, Qatar and the United Arab Emirates (UAE), he added in
this trademark swagger that "the jobs and money coming into our countries,
there has never been anything like it".

 

Trump claimed that he was able to secure deals totalling more than $2tn
(£1.5tn) for the US, but do the numbers add up?

 

The trip itself was an extravaganza, with the three Gulf states pulling out
all the stops.

 

Escorts of fighter jets, extravagant welcoming ceremonies, a thundering
21-gun salute, a fleet of Tesla Cybertrucks, royal camels, Arabian horses,
and sword dancers were all part of the pageantry.

 

The UAE also awarded Mr Trump the country's highest civilian honour, the
Order of Zayed.

 

The visit's optics were striking; the region's richest petrostates flaunted
their opulence, revealing just how much of that fortune they were ready to
deploy to strengthen ties with the US while advancing their own economic
goals.

 

 

Before embarking on the trip, President Trump, who touts himself as a
"dealmaker in chief" was clear that the main objective of the trip was to
land investments worth billions of dollars. On the face of it, he succeeded.

 

In Saudi Arabia, Crown Prince Mohammed bin Salman reiterated a pledge to
invest $600bn in US-Saudi partnerships. There were a plethora of deals
announced as part of this, encompassing arms, artificial intelligence (AI),
healthcare, infrastructure projects and science collaborations, and various
security ties and initiatives.

 

The $142bn defence deal grabbed a lot of the attention as it was described
by the White House as the largest arms deal ever.

 

However, there remains some doubt as to whether those investment figures are
realistic.

 

During his first term in office from 2017 to 2021, Trump had announced that
Saudi Arabia had agreed to $450bn in deals with the US.

 

But actual trade and investment flows amounted to less than $300bn between
2017 to 2020, according to data compiled by the Arab Gulf States Institute.

 

The report was authored by Tim Callen, the former International Monetary
Fund (IMF) mission chief to Saudi Arabia, and now a visiting fellow at the
Arab Gulf States Institute.

 

"The proof with all of these [new] deals will be in the pudding," says Mr
Callen.

 

The BBC contacted the White House for comment.

 

Getty Images Trump walking through a guard of honour with Saudi Crown Prince
Mohammed bin Salman upon landing in RiyadhGetty Images

President Trump was given a welcome fit for royalty

In Qatar, Trump announced an "economic exchange" worth at least $1.2tn.
However, in the fact sheet released by the White House deals worth only
$243.5bn between the two countries were mentioned.

 

One of the Qatari agreements that was confirmed was Qatar Airways purchasing
up to 210 passenger jets for $96bn from the beleaguered American aircraft
manufacturer Boeing.

 

The White House said the deal would support 154,000 jobs in the US each year
of their production, totalling one million jobs over the deal's lifecycle.

 

Meanwhile, the UAE inked an agreement to construct the world's largest AI
campus outside the US, reportedly granting it access to 500,000 cutting edge
microchips from US giant Nvidia, starting next year.

 

This project sits within the UAE's broader pledge to invest $1.4tn in the US
over the next decade.

 

 

As well as the challenge of delivering what is promised, another potential
obstacle to these figures being realised are oil prices.

 

Oil prices tumbled to a four-year low in April amid growing concerns that
Trump's tariffs could dampen global economic growth. The decline was further
fuelled by the group of oil producing nations, Opec+, announcing plans to
increase output.

 

For Saudi Arabia, the fall in global oil prices since the start of the year
has further strained its finances, increasing pressure to either raise debt
or cut spending to sustain its development goals.

 

Last month, the IMF cut the forecast for the world's largest oil exporter's
GDP growth in 2025 to 3% from its previous estimate of 3.3%.

 

"It's going to be very hard for Saudi to come up with that sort of money
[the $600bn announced] in the current oil price environment," Mr Callen
adds.

 

Other analysts note that a lot of the agreements signed during the trip were
non-binding memorandums of understanding, which are less formal than
contracts, and do not always translate into actual transactions. And some of
the deals included in the agreement were announced earlier.

 

Saudi oil firm Aramco, for instance, announced 34 agreements with US
companies valued at up to $90bn. However, most were non-binding memorandums
of understanding without specified monetary commitments.

 

And its agreement to purchase 1.2 million tonnes of liquified natural gas
annually for 20 years from US firm NextDecade was also included in the list
of new deals, despite it first being announced months ago.

 

Getty Images A Qatar Airways Boeing aircraftGetty Images

One of the deals announced on the trip was Qatar Airways buying 210 new
aircraft from Boeing

 

Yet the massive investments mark a continuation of the shift in the US-Gulf
relationship away from oil-for-security to stronger economic partnerships
rooted in bilateral investments.

 

Bader Al Saif, an assistant professor at Kuwait University and an associate
fellow at think tank Chatham House, says that the deals indicate that US and
the Gulf states are "planning the future together and that was a significant
change for the relationship".

 

He adds that the AI deals with the UAE and Saudi Arabia were central to this
as "they clearly demonstrate that they are trying to see how to build the
new global order and the new way of doing things together".

 

This emphasis on AI underscores the growing strategic importance of the
technology to US diplomacy. Trump was accompanied on the trip by Sam Altman,
the boss of OpenAI, Nvidia's Jensen Huang, and Elon Musk, who owns Grok AI.

 

And on the eve of the visit, the White House scrapped tough Biden-era
restrictions on exports of the advanced US semiconductors required to best
run AI systems. The rules had divided the world into tiers, with some
countries enjoying broad access to its high-end chips, and others being
denied them altogether.

 

About 120 countries, including the Gulf nations, were grouped in the middle,
facing strict caps on the number of semiconductors they could import. This
had frustrated countries such as Saudi Arabia, who have ambitions to become
high-tech economies as they transition away from oil.

 

Both Saudi and the UAE are racing to build large-scale AI data centres,
while Abu Dhabi, the UAE's capital, aims to become a global AI hub.

 

The UAE has made visible efforts to reassure Washington – deepening
partnerships with US tech firms, curbing ties with Chinese companies, and
aligning more closely with American national security interests.

 

Mr Al-Saif says that the UAE is "betting on the Americans when it comes to
AI". "We have seen that the technological turn in the 90s came from the US
anyway."

After Saudi Arabia Trump travelled to Qatar where $1.2tn of deals were
announced

 

Both camps are hailing the visit as a triumph. For the Gulf, and especially
Saudi Arabia, it resets a partnership that frayed under Biden, and
underscores their ambition to act as heavyweight players on the world stage.

 

For Trump, touting "trillions" in new investment offers a timely boost - his
tariff hikes have dented global trade and pushed US output into its first
quarterly dip in three years.

 

These Gulf deals will be sold as proof that his economic playbook is
working.

 

At the end of the trip, Mr Trump worried that whoever succeeds him in the
White House would claim credit for the deals once they come to completion.

 

"I'll be sitting home, who the hell knows where I'll be, and I'll say, 'I
did that,'" he said.

 

"Somebody's going to be taking the credit for this. You remember, press," he
said, pointing to himself, "this guy did it."-BBC

 

 

 

Apple’s biggest contract manufacturer Foxconn readies 300-acre iPhone making
campus in India with dorms for 30,000 employees

Foxconn is constructing a 300-acre campus in India, including dormitories
for 30,000 workers. Despite Donald Trump's suggestion to avoid building in
India, Apple plans to manufacture most iPhones for the US market there. The
facility in Devanahalli, Karnataka, represents a $2.56 billion investment,
with production targets set for 100,000 iPhones by December.

Apple’s biggest contract manufacturer Foxconn readies 300-acre iPhone making
campus in India with dorms for 30,000 employees

Apple in India: Foxconn is allocating $2.56 billion to its Devanahalli
operation. (AI image)

As Apple looks to diversify its supply chain away from China, the Taiwanese
firm Foxconn is readying a 300-acre campus for its army of workers who
assemble Apple products. The dormitories for Foxconn Devanahalli plant’s
30,000 workforce are in advanced stages of construction.

Last week, US President Donald Trump's statement to Apple CEO Tim Cook: "I
don't want you building in India," made during his Qatar visit to Doha,
appears to have had little impact on the tech giant's strategic plans.

Despite Trump's comments, Cook maintains that the majority of iPhones
destined for the US market will be manufactured in India instead of China,
with the company steadily progressing towards this objective.

Evidence of this commitment is visible at Foxconn's Devanahalli facility in
Karnataka. Operations continued normally at the expansive 300-acre site of
the Taiwanese contract manufacturer on Monday, including ongoing
construction of dormitories, which are essential to Foxconn's operational
framework, according to an ET report. The company serves as Apple's main
contract manufacturer.

Also Read | New Foxconn unit in India to begin shipping iPhones soon amidst
Donald Trump’s call for Apple to shift production to US

The Taiwanese electronics giant is allocating $2.56 billion to its
Devanahalli operation. The facility, situated between Doddagollahalli and
Chapparadahalli villages in Devanahalli taluk, is positioned 34 km from
Bengaluru's Kempegowda International Airport.

 

 

Foxconn's investment plan includes Rs 3,000 crore for phase 1 (2023-24),
with a similar amount planned for the second phase (2026-27). Production
targets indicate manufacturing approximately 100,000 iPhones by December
this year, according to the financial daily.

The residential complex has capacity for approximately 30,000 staff members,
establishing it as India's largest accommodation facility of its kind,
according to sources familiar with the project.

The construction is scheduled for completion by December.

Following its established practice in China, Foxconn has established
residential quarters in Tamil Nadu, accommodating 18,000 workers at its
Sriperumbudur operations.

The accommodation facilities are specifically designated for factory
workers, excluding management personnel.

Also Read | Why Apple won’t find it easy to move iPhone production from
India to US

Sources at Foxconn told the financial daily that female employees will
receive priority for accommodation, as they constitute between 50-80% of the
30,000-strong workforce at the Devanahalli site.

Project Elephant represents Foxconn's strategic initiative to expand
manufacturing beyond China. In India, Foxconn and Tata Electronics are the
main manufacturers of iPhones and related components. Tata's division has
acquired the Indian operations of both Wistron and Pegatron, fellow Apple
suppliers.

Staff members indicated that assembly of certain iPhone models commenced in
May, with additional variants scheduled for August production. With
preparations intensifying for the iPhone 17 release in September, the
organisation is prioritising the timely completion of its residential
facilities.

On May 1, Apple's Cook announced their expectation that most iPhones sold in
the US during the June quarter would be manufactured in India.

Foxconn maintains facilities across Tamil Nadu, Karnataka and Telangana.
Beyond the Bengaluru unit, they've established a new AirPods manufacturing
facility in Hyderabad, expanding Apple's Indian production portfolio. This
complements their substantial iPhone assembly operations at the
Sriperumbudur facility near Chennai.

 

 

 

Afreximbank reports strong performance for Q1 2025 in line with expectations

The Bank makes written and/or oral forward-looking statements, as shown in
this presentation and in other communications, from time to time. Likewise,
officers of the Bank may make forward-looking statements either in writing
or during verbal conversations with investors, analysts, the media, and
other key members of the investment community. Statements regarding the
Bank’s strategies, objectives, priorities, and anticipated financial
performance for the year, constitute forward-looking statements. They are
often described with words like “should”, “would”, “may”, “could”, “expect”,
“anticipate”, “estimate”, “project”, “intend”, and “believe”.

 

By their very nature, these statements require the Bank to make assumptions
that are subject to risks and uncertainties, especially uncertainties
related to the financial, economic, regulatory, and social environment
within which the Bank operates. Some of these risks are beyond the control
of the Bank and may make actual results that are obtained to vary materially
from the expectations inferred from the forward-looking statements. Risk
factors that could cause such differences include regulatory pronouncements,
credit, market (including equity, commodity, foreign exchange, and interest
rate), liquidity, operational, reputational, insurance, strategic, legal,
environmental, and other known and unknown risks. As a result, when making
decisions with respect to the Bank, we recommend that readers apply further
assessment and should not unduly rely on the Bank’s forward-looking
statements.

 

Any forward-looking statement contained in this presentation represents the
views of management only as of the date hereof and they are presented for
the purpose of assisting the Bank’s investors and analysts to understand the
Bank’s financial position, strategies, objectives, priorities, anticipated
financial performance in relation to the current period, and, as such, may
not be appropriate for other purposes. The Bank does not undertake to update
any forward-looking statement, whether written or verbal, that may be made
from time to time, by it or on its behalf, except as required under
applicable relevant regulatory provisions or requirements.

 

PRESS RELEASE

 

Cairo, Egypt 21 May 2025: –African Export-Import Bank (“Afreximbank” or the
“Group”) has released the consolidated financial statements of the Bank and
its subsidiaries for the three months ended 31 March 2025.

 

Financial Highlights

 

Afreximbank Group delivered satisfactory financial performance for the first
quarter of 2025, meeting expectations with solid profitability, strengthened
liquidity and a resilient capital base.

 

This performance provides a springboard for the Bank to continue playing its
pivotal role of advancing the aspirations of Africa and the Caribbean for
economic transformation and sustainable development in the months and years
ahead.

 

Net interest income grew by 4.53% to US$411.2 million compared to prior
year, driven by growth in interest earning assets, complemented by effective
management of borrowing costs, helping the Bank to cushion the marginal
decline in total interest income due to softening benchmark rates.

 

Fee income from Guarantees and Letters of Credit saw robust growth of 47%
and 36% respectively, partially offsetting lower advisory fees to contribute
to total unfunded income of US$26.9 million for Q1-2025. While this
represented a 7.41% decrease from US$29.0 million in Q1 2024, the strong
performance in Off-balance sheet assets is in line with the Bank’s strategy
to grow unfunded business.

 

The Group posted strong Net Income of US$215 million, a 21% increase
year-on-year from US$178 million in the prior period.

 

The Group’s total assets and contingent liabilities increased by 6.4%,
reaching US$42.7 billion as of 31 March 2025, up from US$40.1 billion at
FY’2024. On-balance sheet assets grew by 4.85% to US$37.0 billion, driven
primarily by a 58% surge in cash balances to US$7.4 billion, while
Off-balance sheet assets i.e. letters of credit and guarantee volumes
increased by a 19% to reach US$5.7 billion at the end of Q1-2025.

 

Net loans and advances closed Q1-2025 at US$27.8 billion, down from the
FY2024 closing position reflecting early repayments from certain customers
on account of improved foreign currency balances position of some sovereign
borrowers. Importantly, the Loan Asset Quality remained strong, with the
Non-Performing Loans (NPL) ratio at 2.44%, a modest increase from 2.33% at
FY’2024 – well below the Bank’s strategic NPL ceiling of 4%.

 

Driven by inflationary pressures and growing personnel costs, operating
expenses rose by 23% to reach US$75.4 million by 31 March 2025. Despite
this, Afreximbank Group maintained a healthy Cost-to-Income Ratio of 16%,
below its strategic range of 17-30%.

 

Afreximbank’s liquidity profile strengthened considerably, with liquid
assets now comprising 20% of total assets, up from 13% at the close of
FY’2024. This higher liquidity position was as a result of successful
fund-raising, coupled with loan repayments received during the quarter.

 

Shareholders’ funds increased by 3.4%, reaching US$7.5 billion, driven by
strong internally generated capital of US$215.4 million in addition to new
equity investments under the second General Capital Increase (GCI II)
programme.

 

Operating Highlights

 

In line with the Afreximbank strategic objective of driving
Industrialisation and export development, the Bank and the Government of
Kenya ratified a number of initiatives designed to support the development
Industrial Parks (IPs) and Special Economic Zones (SEZs) in Kenya under the
US$3 billion Kenya country programme. These projects which include Dongo
Kundu Industrial Park in Mombasa and Naivasha SEZ II in Mai Mahiu, are key
components of Kenya’s Vision 2030 plan to boost export manufacturing and
industrialisation. Afreximbank’s support for these initiatives will
specifically enhance infrastructure development, attract investment, and
strategically position Kenya as a key hub for African and global commerce.

 

The rollout of the Pan-African Payments and Settlement System (PAPSS)
continues to gain momentum with KCB Group in Kenya and Bank of Kigali in
Rwanda launching the platform, becoming the first banks in their respective
countries to offer seamless, instant, and affordable cross-border payments
in local currencies across Africa.

 

Aligned with its mandate to promote Global Africa following the recognition
of the African Diaspora as the 6th region of Africa, the Bank further
cemented its expansion and presence in the Caribbean with the historic
groundbreaking ceremony to kick off the construction of the first ever
Afreximbank African Trade Centre (AATC) outside of Africa in Bridgetown,
Barbados. AATC Barbados will also host its regional office. The Barbados
AATC is an authentic icon of trade embodying the ambition, resilience, and
influence of leading commercial cities in Africa and the Caribbean that
serve as dynamic focal points for commerce, fostering regional and global
trade connections, and is expected to enhance intra-and extra-African trade,
with a focus on countries of the Global South.

 

Mr. Denys Denya, Afreximbank’s Senior Executive Vice President, commented:

 

“Our QI 2025 results, which were in line with expectations, reflected a
strong and resilient financial performance, notwithstanding continued
macroeconomic challenges. With solid profitability growth, a strengthened
liquidity position, and a well-capitalised balance sheet, the Group is
firmly positioned to continue playing a pivotal role in advancing the
aspirations of Africa and the Caribbean for economic transformation and
sustainable development.”-afreximbank

 

 

 

 

China stimulus lies behind a Great Wall of assets

(Reuters Breakingviews) - A great wall of debt may not be an obstacle to Xi
Jinping’s effort to boost spending in the world’s second-largest economy. By
some measures, China’s president has already dug deep to prop up slowing GDP
growth. Now officials are taking a broader view of the country’s balance
sheet. This may open up a new fiscal chapter for the People’s Republic.

 

Despite a de-escalation this month of a global trade war, China still faces
additional 30% tariffs on its exports to the United States. A property
crisis, deflationary pressure and unemployment fears mean savers are
hoarding money instead of spending it.

The Reuters Daily Briefing newsletter provides all the news you need to
start your day. Sign up here.

 

 

Yet there is limited space to unleash further stimulus according to orthodox
rules. In the past, the State Council rarely budgeted a deficit larger than
3% of GDP, a threshold similar to the now-defunct Maastricht criteria for
the euro zone. Yet China has breached that limit three times since the Covid
pandemic.

This year, Premier Li Qiang plans to increase the deficit to 4% of national
GDP. Overall, factoring in other public accounts the central government uses
to fund spending in social security, infrastructure and other areas, China’s
actual deficit could climb to 9.9% of GDP this year from 7.7% in 2024, HSBC
estimates.

 

 

So far, Beijing has had no trouble financing extra spending. Issuances of
special sovereign bonds in 2024 and 2025 have topped 11.2 trillion yuan
($1.55 trillion), or nearly 10% of GDP. Proceeds have funded schemes
including cash subsidies to consumers who replace old appliances, vehicles,
and electronics. That is on par with the ratio of stimulus China spent over
two years to mitigate the impact of the 2008 global financial crisis.

Although China’s overall government debt is as high as 124% of GDP per
International Monetary Fund estimates, opens new tab, Beijing insists it can
still spend more. One source for this confidence may be a new willingness to
focus on what China owns as much as on what it owes.

A chart showing Chinese governments' bond sale programmes in the past two
years

 

NEW CHAPTER

Alongside discussions of debt, officials are suddenly talking up the value
of the government’s assets. These include stakes it holds in giant companies
such as the $214 billion Bank of China (601988.SS), opens new tab and $203
billion PetroChina (601857.SS), opens new tab.

In a report, opens new tab presented to lawmakers in December, the State
Council noted net assets of China’s public sector in 2023 amounted to 184
trillion yuan, roughly $25 trillion, or 136% of Chinese GDP by the end of
last year. The People’s Bank of China is emphasising a similar point. In its
monetary policy report for the first quarter, the central bank compared
China, the United States and Japan by weighing up not only their government
debt but also their state assets.

Citing a report by the Chinese Academy of Social Sciences, the central bank
suggests China’s gross government assets amounted to 166% of GDP by the end
of 2022, and further that its equity interest in state-owned enterprises is
119% of GDP or five times the international average. Based on that measure,
the central bank concludes its government’s debt expansion is “more
sustainable” than those by other large economies.

 

A chart comparing the debt-to-GDP and asset-to-GDP ratios of China, US and
Japan.

China would not be the first country to take a broader measure of its
balance sheet. In October, the UK changed its headline government debt
target as its finance minister, Rachel Reeves, pledged to “invest, invest,
invest”. She said the government will focus on public sector net financial
liabilities. That includes public sector assets like student loans as well
as liabilities.

In New Zealand, which changed its fiscal anchor in 1989, public net worth
has improved every year, aside from four years after the 2008 financial
crisis, the 2011 earthquakes and the pandemic. It’s difficult to directly
link the new accounting method to economic growth, but a strong balance
sheet may have helped New Zealand respond effectively to huge shocks.

Chinese leaders hinted at a similar shift as far back as July: a resolution
after the Third Plenum, a key meeting held once every five years,
stipulated, opens new tab the potential introduction of “national macro
balance sheet management”.

SWEAT IT

A new model to think about China’s public finances would be helpful. Local
governments’ revenue has relied heavily on land sale income since the 1990s.
They’ve been badly squeezed by a property market slump that began in 2020.
If Beijing now wants state assets to anchor fiscal policy, there are
multiple ways it can leverage them.

One option is for local governments to pledge state assets, instead of
property projects, as collateral to obtain loans. In December 2020, Guizhou,
a mountainous province in southwest China, transferred, opens new tab part
of its stake in $275 billion Kweichow Moutai (600519.SS), opens new tab, a
winemaker, to a new government vehicle and has been using that entity’s
healthier balance sheet to pay down debt and secure financing. Jiangsu, a
coastal province north of Shanghai, among others, is taking similar steps.

China can also sweat its assets harder. China Securities Regulatory
Commission is pushing listed firms to boost payouts. Dividend payments of
state-owned enterprises to the central government amounted to 1.2 trillion
yuan, up more than 15% on the year, according to Securities Times, a
state-run financial newspaper. Proactive ‘market value management’ is now a
top criteria for appraising the performance of executives of public sector
firms.

A chart showing the amount of assets under the Chinese government's control

Asset disposals can help too. Selling off 10% of state-owned enterprises’
assets could raise revenue equivalent to 11% to 21% of GDP, according to
Rhodium Group. China went down this path in the 1990s, privatising national
heavyweights such as China Mobile and PetroChina to tap U.S. dollars.

Dag Detter and Ian Ball, authors of the book Public Net Worth, opens new
tab, advocate for the more productive use of government assets but insist
reliable data is a prerequisite to this approach. Beijing did not respond to
a request from Reuters Breakingviews for a detailed breakdown of its state
assets, but China has promised more transparent reporting of its financial
accounts.

To be sure, over the years China has found ways to crank up debt, and it is
not clear if it is ready to kick that habit. Effective management of its
assets also will require Beijing to interfere less with how they are run.
These days American investors also are lukewarm on Chinese equities, and
many companies trade at multiples below their book value, making it
politically fraught to execute sales. Even if it can generate proceeds, the
government cannot fund ongoing spending from one-time asset disposals.

Ultimately, by convincing others to take a broader view of its balance
sheet, Beijing might hope to improve perceptions of China’s creditworthiness
and set the tone for bigger fiscal stimulus. Measuring its state assets is a
good start, the next challenge will be managing them.

 

 

 

Oil prices fall 1% on potential further increase to OPEC+ output

(Reuters) - Oil prices fell 1% on Thursday after a report that OPEC+ is
discussing a production increase for July, stoking concerns that global
supply could exceed demand growth.

Brent futures fell 64 cents, or 1%, to $64.27 a barrel by 0800 GMT. U.S.
West Texas Intermediate crude dropped 59 cents, or 1%, to $60.98.

The Reuters Power Up newsletter provides everything you need to know about
the global energy industry. Sign up here.

The Organization of the Petroleum Exporting Countries and its allies, known
collectively as OPEC+, are discussing whether to make another large output
increase at their meeting on June 1, Bloomberg News reported.

 

An increase of 411,000 barrels per day (bpd) for July is among the options
under discussion, though no final agreement has been reached, the report
said, citing delegates.

"We're seeing the market reacting to evidence that OPEC is letting go of a
strategy to defend price in favour of market share," said Harry
Tchiliguirian at Onyx Capital Group. "It's a bit like taking off a Band-Aid;
you do it in one fell swoop."

OPEC+ has been in the process of unwinding output cuts, with additions to
the market in May and June, and Reuters has previously reported that the
group could bring back as much as 2.2 million bpd by November.

 

In a note on Wednesday, RBC Capital analyst Helima Croft said that a 411,000
bpd increase from July is the "most likely outcome" from the meeting,
primarily from Saudi Arabia.

"A key question will be whether the voluntary cut will be fully drawn down
before the leaves turn brown in many parts of the world, in line with the
original taper schedule," she said.

Prices were already lower in the session after Energy Information
Administration data released on Wednesday showed U.S. crude and fuel
inventories showed surprise stock builds last week as crude imports hit a
six-week high and gasoline and distillate demand slipped.

Crude inventories rose by 1.3 million barrels to 443.2 million barrels in
the week ended May 16, the EIA said. Analysts in a Reuters poll had expected
a drawdown of 1.3 million barrels.

The EIA's surprise stock builds will exert downward pressure on prices,
particularly on WTI, said Emril Jamil at LSEG Oil Research, adding that this
could further encourage more U.S. exports to Europe and Asia.

While OPEC+ deliberates, a rising yield on 10-year U.S. Treasury bonds
suggests that the producer group could be increasing oil supply into a
market with lower demand.

Reporting by Anna Hirtenstein Additional reporting by Yuka Obayashi, Michele
Pek and Florence Tan Editing by David Goodman

 

Our Standards: The Thomson Reuters Trust Principles

 

 

 

 

 

Japan and U.S. finance officials back market control of foreign exchange
rates

The top finance officials of Japan and the United States agreed again on
Wednesday that markets should determine exchange rates and continued to make
a point of not discussing a specific target for the yen-dollar rate.

It was the second meeting between Finance Minister Katsunobu Kato and U.S.
Treasury Secretary Scott Bessent since the U.S. imposed a series of tariffs
on its trading partners in March. The two were attending a meeting of Group
of Seven finance ministers and central bank governors in Banff, Canada, on
Wednesday.

 

There, they reaffirmed their shared belief that the market should determine
exchange rates, and agreed that the current dollar-yen rate reflects
economic fundamentals, according to a statement from the U.S. Treasury
Department.

 

“As in their previous meeting, they did not discuss foreign exchange
levels,” the statement said. That earlier meeting was held in Washington in
April.

 

Japan’s currency remains a focus in the trade war and has strengthened to
multiweek highs, driven in part on the bet by some investors that the yen
might be used as a tool to rebalance trade. It was trading in the low ¥143
range on Thursday, from about ¥146 per dollar a week earlier.

 

Economists discount the possibility of the two countries committing anytime
soon to a specific target for the yen-dollar exchange rate during their
trade negotiations.

 

“At least when it came to the U.S.-China negotiations in Geneva, there was
nothing explicit on the exchange rate,” said Leif Eskesen, managing director
and chief economist at CLSA. “To me, it suggests that the chances of
something explicit on the exchange rate with Japan is also not necessarily
very likely.”

 

Some economists have argued that the U.S. might demand that Japan props up
the yen sooner or later.

 

“Just like tariffs, a weaker dollar could help reduce the trade deficit,”
said Takahide Kiuchi, executive economist at Nomura Research Institute and a
former Bank of Japan Policy Board member, in an interview earlier in May.

 

Kiuchi anticipates that turmoil in the financial markets and growing
political pressure against the tariffs might force U.S. President Donald
Trump to eventually backtrack on his tariff plan.

 

“But if his goal of reducing the trade deficit remains unchanged, the next
step could very well be a policy to weaken the dollar,” he said.

 

The existing tools at hand — currency intervention or raising Japan’s
interest rates — might not be right for the job and might require an
unacceptable level of interference, some economists argue.

 

“If you suddenly demand that Japan should change its interest rate to
appreciate the exchange rate, then you're interfering with domestic monetary
policy,” CLSA’s Eskesen said. “I think it's very hard to go down that
route.”

 

The Bank of Japan kept interest rates at or near zero for years before
raising them for the first time in 17 years in early 2024. At its latest
policy meeting, which ended on May 1, it kept the policy rate at 0.5%.

 

Eskesen said CLSA now predicts a modest increase in rates between now and
the end of 2025, on the condition that domestic consumption picks up and
that external volatility decreases.

 

“At the end of the day, I think the exchange rate should reflect the
underlying fundamentals of the economy,” Eskesen said. “That's ultimately
what should determine the exchange rate, rather than a sort of arbitrary
target that doesn't factor that in.”

 

Many economists argue that the effects of currency interventions don't last
forever, and that intervention should only be used as a tool to address
temporary volatility in the foreign exchange market.

 

“The only time intervention works is when you have a situation where a
currency is way out of line with fundamentals,” said Richard Katz, a
long-time Japan observer and author of “The Contest for Japan's Economic
Future.”

 

“When you have a currency bubble, it's moving way out of line with
fundamentals. Then if you intervene, that breaks the cycle. And this is what
happened in 1985 with the Plaza Accord.”

 

Signed in 1985 by the U.S., Japan, France, the United Kingdom and then-West
Germany, the Plaza Accord helped depreciate the dollar by coordinated
interventions in the foreign exchange market.

 

While noting that an intervention of this scale isn’t likely to happen again
as European countries are not likely to go along, Kiuchi said the U.S. might
coordinate yen-buying and dollar-selling interventions with Japan, which
would depreciate the dollar.

 

Kiuchi warned that a rapidly depreciating dollar might ultimately make it
impossible for Japan to raise its interest rates, as it happened after the
Plaza Accord, which, in turn, contributed to the bubble economy.

 

“The impact could be that raising interest rates becomes impossible if the
dollar falls significantly," Kiuchi said.

 

Japan’s chief tariff negotiator, Ryosei Akazawa, is set to fly to Washington
on Friday for the third round of high-level tariff talks with his American
counterparts. Bessent, who was appointed by Trump to lead negotiations with
Japan in April, is not expected to attend the meeting, according to news
reports.-japantimes

 

 

 

 

Higher-than-expected borrowing figures put pressure on Reeves

Higher-than-expected borrowing figures for the month of April have put
pressure on Chancellor Rachel Reeves as experts claim taxes will now likely
have to rise in the autumn.

 

Borrowing - the difference between spending and tax income - was £20.2bn, up
£1bn from April last year, the Office for National Statistics (ONS) said.

 

It marks the fourth highest figure for April since monthly records began in
1993.

 

This has left experts predicting the government will find it very hard to
meet its self-imposed rules for the economy without future tax rises.

 

 

"We expect a combination of higher taxes and slightly higher borrowing at
the next Budget," said Thomas Pugh, economist at RSM UK.

 

Matt Swannell, chief economic adviser to the EY ITEM Club, said: "Talk of
the reinstatement of some winter fuel payments and the likely need to spend
more on defence will further increase the pressure for tax rises."

 

Tax receipts were more than £5bn higher, in part due to increases in
National Insurance contributions paid by employers.

 

But government expenditure also rose, largely due to pay rises, higher costs
due to inflation, and increases in pensions and other benefits.

 

The ONS also said that borrowing for the financial year that ended in March
is now estimated to be £148.3bn, which is £3.7bn less than initially
thought.

 

However, the figure is still £11bn more than expected by the UK government's
independent forecaster, the Office for Budget Responsibility.

 

A bar chart showing the UK's public sector net borrowing, excluding public
sector banks, from April 2023 to April 2025. In April 2023, borrowing stood
at £20.0 billion. It then fell to £19.1 billion in April 2024, before rising
to £20.2 billion in April 2025.

 

Analysts had predicted borrowing of £17.9bn.

 

Reacting to the figures, Chief Secretary to the Treasury Darren Jones said:
"After years of economic instability crippling the public purse, we have
taken the decisions to stabilise our public finances, which has helped
deliver four interest rate cuts since August, cutting the cost of borrowing
for businesses and working people."

 

However, Ruth Gregory, deputy chief UK economist at Capital Economics, said
the "poor start" to the financial year increased the chances that more tax
rises will be needed in the autumn Budget.

 

She said weaker economic growth forecast over the next few months is likely
to hit tax receipts, adding to pressure on government finances.

 

"With the PM announcing a partial U-turn on the cut to winter fuel payments,
the dilemma faced by the chancellor over how to deal with increased spending
pressures in environment of low economic growth and high interest rates
hasn't gone away," Ms Gregory said.

 

"With the markets seemingly uneasy about more public borrowing, further tax
rises are starting to feel inevitable."

 

Conservative shadow chancellor Mel Stride said: "Instead of reining in
spending, the Labour chancellor has piled billions onto the national debt by
fiddling the fiscal rules and maxing out the national credit card."

 

Liberal Democrat Treasury spokesperson Daisy Cooper accused the chancellor
of "making a series of blunders."

 

"The warning lights must be flashing in the Treasury this morning," she
said.-BBC

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 


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Email:                <mailto:bulls at bullszimbabwe.com>
bulls at bullszimbabwe.com

Website:             <http://www.bullszimbabwe.com> www.bullszimbabwe.com 

Blog:                  <http://www.bullszimbabwe.com/blog>
www.bullszimbabwe.com/blog

Twitter (X):        @bullsbears2010

LinkedIn:           Bulls n Bears Zimbabwe

Facebook:           <http://www.facebook.com/BullsBearsZimbabwe>
www.facebook.com/BullsBearsZimbabwe



 

 

 


 

INVESTORS DIARY 2025

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


CBZH

GetBucks

EcoCash

 


Padenga

Econet

RTG

 


Fidelity

TSL

FMHL

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from s believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and d from third parties.

 


 

 


 (c) 2025 Web:  <http://www.bullszimbabwe.com> www.bullszimbabwe.com Email:
<mailto:bulls at bullszimbabwe.com> bulls at bullszimbabwe.com Tel: +27 79 993
5557 | +263 71 944 1674

 


 

 

 

 

 

 

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