Major International Business Headlines Brief::: 03 December 2020

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Major International Business Headlines Brief::: 03 December 2020

 


 

 


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ü  HSBC share price rockets 50% since its 25-year low

ü  EasyJet to charge for overhead luggage lockers

ü  Singapore approves lab-grown 'chicken' meat

ü  Will vaccine save the UK economy?

ü  Calls for better deal for Arcadia pension holders

ü  Bonmarché collapses into administration

ü  Debenhams website overwhelmed as shoppers swoop on sales

ü  Supermarkets repay rates relief after backlash

ü  Asian shares mixed, U.S. dollar near two-and-half-year lows

ü  Chinese firms on U.S. exchanges threatened by bill headed to Trump's desk

ü  The new black gold? Big Oil bets on retail networks in an electric era

ü  Appeals court schedules Dec. 14 hearing on blocked U.S. TikTok new user
ban

ü  Nigeria: Expert Advises Govt to Cede 50% of Oil Royalties to Host
Communities

ü  Seychelles Losing Out On U.S.$28 Milllion in Unpaid Taxes, Auditor
General Report Finds

ü  Tanzania: Tz Remains Second in Livestock Count

ü  Nigeria: Collapsed Nigerian Electricity Grid Restored in 40mins -
Official

ü  Kenya: Prices of Used Cars Jump as Shilling Hits Historic Low

ü  Nigeria: Naira Bounces Back, Appreciates to N470/$ in Parallel Market

ü  Mozambique: Draft 2021 Budget With Deficit of Over 1.4 Billion Dollars

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


HSBC share price rockets 50% since its 25-year low

HSBC has seen its share price rocket more than 50% since it hit a 25-year
low in September.

 

The UK's biggest bank has been under increasing regulatory and economic
pressure in its key markets, including Europe and Asia.

 

But since September its fortunes have changed with its shares rising by more
than 50% in Hong Kong and 48% in London, where it is listed.

 

Headquartered in London, more than half of HSBC's profits come from Asia.

 

Although this quarter has been a strong one for the bank's dual-listed share
price, it is still down about one-third since the start of the year.

 

 

In October, HSBC recorded better-than-expected third quarter results on cost
savings.

 

Despite profits being down 46%, its operations in Asia "continued to perform
resiliently" with pre-tax profits of $3.2bn (£2.4bn).

 

HSBC has seen its share price rocket more than 50% since it hit a 25-year
low in September.

Last month, HSBC surged as much as 8% on optimism that it may soon resume
paying dividends.

 

"Now is the time for financials to shine and it seems HSBC is at the top of
many lists since they have done enough to restart their dividend," says
Edward Moya at trading firm Oanda.

 

Investors have also been more positive on financial stocks in general with
hopes that a Covid-19 vaccine will boost the global economy.

 

"The top banks will all benefit from a strong global economic recovery that
will boost jobs, credit card spending, and drive business lending," Mr Moya
added.

 

HSBC's fortunes have further improved on expectations that President-elect
Joe Biden will take a softer stance on China following rising tensions and a
US trade war that began in 2018.

 

Incumbent Donald Trump has been keeping the pressure on China, and on
Wednesday the Senate passed a bill that places restrictions on Chinese firms
listing in the US.

 

Cost-cutting

HSBC is currently pushing ahead with major restructuring of its global
banking operations.

 

Chief executive Noel Quinn said the bank would "accelerate" an earlier
restructuring plan, which includes the axing of 35,000 jobs.

 

It is also weighing up a complete exit from retail banking in the US to
focus on its more profitable businesses in Asia, according to sources quoted
by the Financial Times.

 

Mr Quinn has pledged to go "further and faster on our cost and risk-weighted
asset reduction programmes", after setting aside $7.7bn for potential loan
losses during the pandemic.25-year low

 

In September, HSBC's share price fell to its lowest level since 1995 amid
allegations of money laundering.

 

In 2013 and 2014 the bank allowed fraudsters to transfer millions of dollars
around the world even after it had learned of their scam, leaked secret
files show.

 

HSBC says it has always met its legal duties on reporting such activity.

 

The bank also became embroiled in a political battle over its support of
China's national security law in Hong Kong. leading it be lambasted by both
the US and UK.-BBC

 

 

 

EasyJet to charge for overhead luggage lockers

EasyJet customers who want to use overhead luggage lockers will have to buy
more expensive tickets.

 

In a move which provoked criticism on social media, Easyjet said the changes
to its luggage policy will start on 10 February.

 

Customers who don't buy the more expensive tickets will be restricted to
putting a small carry-on bag under their seat.

 

Easyjet said the changes would improve punctuality.

 

But some customers reacted with dismay on Twitter, with one calling it an
"absolutely terrible move".

 

"Like Ryanair, [they are] monetising every opportunity in a race to the
bottom," they said.

 

'It is not right'

Another accused the airline of changing the conditions of their ticket after
they had bought it.

 

"I imagine there is some small letter in the terms to allow you to do it,
but it is not right is it?"

 

But some customers welcomed the move, saying it would free up storage space.

 

Currently, all customers are allowed to fly with a cabin bag measuring up to
56 x 45 x 25cm, enabling them to put small wheelie suitcases into overhead
lockers.

 

But under the new rules, passengers who want to travel with an additional
bag of this size as hand luggage must buy a more expensive ticket such as an
Up Front or Extra Legroom seat. Prices range from £7.99 more expensive than
a standard fare, up to £29.99 on longer flights.

 

EasyJet slumps to first annual loss amid pandemic

People who also buy a more expensive Flexi fare or are members of the
carrier's frequent flyer scheme will also continue to be allowed to take one
small and one large item of hand luggage with them, subject to space on
board.

 

EasyJet customers with an existing booking for travel from February 10 who
do not want to pay more will be able to check in a larger cabin bag in the
aircraft hold free of charge.

 

Robert Carey, chief commercial and customer officer for EasyJet said:
"Punctuality is important to our customers and we know that if they have
their bags placed into the hold at the gate due to the limited space onboard
this can cause flight delays, and it can be frustrating for them too.

 

"Our new policy will improve boarding and punctuality for everyone, as well
as give our customers certainty of what they will have with them onboard."

 

Pandemic effects

Easyjet previously used its luggage allowance to differentiate it from
competitors.

 

Ryanair limits passengers to one small item of hand luggage without an extra
fee, while British Airways' cheapest fares include one large and one small
item of hand luggage.

 

Airlines have been hit hard by coronavirus crisis travel restrictions, and
have been looking for ways to cut costs.

 

In November Easyjet reported its first annual loss in the airline's 25-year
history.

 

The airline made a loss of £1.27bn for the year to 30 September as revenues
more than halved.

 

EasyJet expects to fly at just 20% of normal capacity into next year.

 

A spokesperson said the change in baggage allowance had been under
consideration since before the pandemic.--BBC

 

 

 

Singapore approves lab-grown 'chicken' meat

Singapore has given regulatory approval for the world’s first “clean meat”
that does not come from slaughtered animals.

 

The decision paves the way for San Francisco-based startup Eat Just to sell
lab-grown chicken meat.

 

The meat will initially be used in nuggets, but the company hasn’t said when
they will become available.

 

Demand for alternatives to regular meat has surged due to consumer concerns
about health, animal welfare and the environment.

 

According to Barclays, the market for meat alternatives could be worth
$140bn (£104bn) within the next decade, or about 10% of the $1.4tn global
meat industry.

 

Plant-based meat options such as Beyond Meat and Impossible Foods are
increasingly found on supermarket shelves and restaurant menus.

 

But Eat Just’s product is different because it is not plant based, but
instead grown from animal muscle cells in a lab.

 

Breakthrough

The company called it a "breakthrough for the global food industry" and
hopes other countries will now follow suit.

 

Over the last decade, dozens of start-ups have attempted to bring cultured
meat to market, hoping to win over conventional meat eaters with the promise
of a more ethical product.

 

Two of the largest are Israel-based Future Meat Technologies and the Bill
Gates-backed Memphis Meats, which are both trying to enter the market with
affordable and tasty lab grown meats.

 

Singapore’s Shiok Meats is working on lab grown crustacean meats.

 

While many have touted the environmental benefits, some scientists have
suggested it might be worse for climate change under some circumstances.

 

The boss of Eat Just called it "one of the most significant milestones in
the food industries" but challenges remain.

 

Firstly, it is much more expensive to produce lab-grown meat than
plant-based products.

 

Case in point: Eat Just previously said it would sell lab-grown chicken
nuggets at $50 each.

 

The cost has since come down but it will still be as expensive as premium
chicken.

 

Another challenge for the company is the reaction of consumers.

 

But Singapore's approval of Eat Just's product will likely attract
competitors to set up operations in the city state, and it could also prompt
other countries to approve it, too.

 

Safe ‘novel food’

The Singapore Food Agency (SFA) said an expert working group reviewed data
on Eat Just’s manufacturing control and safety testing of the cultured
chicken.

 

“It was found to be safe for consumption at the intended levels of use, and
was allowed to be sold in Singapore as an ingredient in Eat Just’s nuggets
product,” the SFA said.

 

The agency said it has put in place a regulatory framework for “novel food”
to ensure that cultured meat and other alternative protein products meet
safety standards before they are sold in Singapore.

 

“I'm sure that our regulatory approval for cultured meat will be the first
of many in Singapore and in countries around the globe,” said Josh Tetrick,
the Eat Just co-founder in a media release.

 

No antibiotics were used in the process, and the chicken had lower
microbiological content than conventional chicken, the company said.

 

“The first-in-the-world regulatory allowance of real, high-quality meat
created directly from animal cells for safe human consumption paves the way
for a forthcoming small-scale commercial launch in Singapore,” Eat Just
said.--BBC

 

 

 

Will vaccine save the UK economy?

Vaccines in general have saved more lives than almost anything apart from
clean water. They have been shown to pay for themselves and much more.

 

The easiest way to imagine the impact of an approved vaccine in economic
terms is to imagine the board meetings happening in companies up and down
the country right now.

 

Weary executives, finance directors in particular, will be signing off on
investment plans for the fiscal year starting in April 2021.

 

The very basis of those calculations will now alter, with the reasonable
chance that most of that year could resemble a situation more normal than
abnormal, thanks to at least one approved vaccine.

 

How much vaccine has UK ordered?

It is the shot in the arm required for medium-term confidence, and could
prevent a self-fulfilling spiral of negativity, closure and joblessness.

 

Nothing is certain, but those planning on the basis of some sort of normal,
will feel confidence to take risks, that keep more people employed, and the
economy growing. Clearly an approved, rolled out, effective and well-used
vaccine will eventually reduce the need for lockdowns and severe social
restrictions.

 

In a March study from the Resolution Foundation, which accurately predicted
the double digit hit to the economy and the public finances from the
pandemic, Covid-19 was best thought of as following the economic path of the
Ebola epidemic in West Africa or Spanish flu in 1918-19, with multiple peaks
and troughs.

 

We have never had a vaccine arrive in the middle of a pandemic before, so
the benefits could be extremely large. It could be the equivalent of the
East Asian countries' which, through effective public health measures
(rather than a vaccine), dodged the long-term fiscal and economic impact of
SARS in 2003, and Covid-19 over the past year.

 

In other words it could, in economic terms, make up for the relatively
sluggish response at the beginning of the pandemic.

 

The author of that paper, Richard Hughes, is now the chief executive of the
Office for Budget Responsibility.

 

This approval pushes the fate of the economy a little closer to the "upside
scenario" set out in the OBR's forecasts for the UK economy last week. This
assumers there would be "widespread" vaccine availability by Spring,
bringing back a more normal economy at the time the furlough scheme is due
to end, and therefore causing only a small increase in unemployment.

 

Why take risks?

Two notes of caution. The very short-term impact might work both ways. The
restrictions could stay in place, and perhaps be stricter than they
otherwise would have been.

 

Also the key voluntary social distancing - where the public simply decides
not to go to restaurants, pubs and shops - may be maintained at a higher
level through to the spring.

 

Why? Because, as the government itself is advising, with the scientific
cavalry on the way, and light at the end of the tunnel, why take risks right
now? Also the early direct beneficiaries of vaccination will be concentrated
among the most elderly and at risk, as well as health workers. It will not
be the public at large.

 

Three months of patience might weigh on the social side of the economy at
the same time as fundamental changes to trade affect the manufacturing and
service sectors.

 

And then there is the fact that the success of the scheme is now baked in to
asset prices. Any plausible deviation or setback, either to rollout or in
the science, risks precipitating a quick downside for stock markets and
house prices.

 

Risks aside, the development, approval and acquisition of an effective
vaccine stands to offer an incalculable boost to people's lives, but
livelihoods too, over the next year.

 

This is the first approved vaccine for human use for any coronavirus ever.
It's also the first ever vaccine to be available in the middle of a
pandemic. And that could offer an economic stimulus far greater than
anything the Bank of England and HM Treasury could provide.--BBC

 

 

 

Calls for better deal for Arcadia pension holders

Workers at Arcadia - the embattled owner of Topshop - should not lose out
because of Sir Philip Green's "greed", according to Labour's Ed Miliband.

 

Sir Philip had a "moral duty" to make up the shortfall in the company's
pension schemes, the shadow business secretary told the Commons.

 

Arcadia owner Lady Green has since brought forward a payment to the fund.

 

Some members face losing at least 10% of future pension payouts following
Arcadia's fall into administration.

 

Talks regarding an alternative avenue to protect some pensions have emerged.

 

Retail empire's demise

Arcadia collapsed into administration on Monday, putting 13,000 jobs at
risk.

 

The administration will give Arcadia breathing space from creditors, such as
landlords for its shops or clothing suppliers, while a buyer is sought for
all or parts of the company.

 

The plight of those who have pension promises from Arcadia pension schemes
is also uncertain.

 

It is likely the company's pension schemes could go into the official rescue
scheme, the Pension Protection Fund.

 

That would see long-serving staff, or previous employees, who hold defined
benefit pensions losing at least 10% of what they were promised in pension
payouts when they reach retirement.

 

Arcadia's pension schemes have an estimated deficit of £350m - that is the
difference between pension liabilities and the funds' assets.

 

Mr Miliband told the Commons: "Philip Green owes the workers at Arcadia a
moral duty. His family took a dividend worth £1.2bn from the company, the
largest in UK history, more than three times the size of the pensions
deficit.

 

"The workers at Arcadia should not pay the price of Philip Green's greed. So
will the minister now publicly call for him to make good any shortfall in
the pensions scheme and will he ensure that the pensions regulator takes all
possible steps to make sure this happens?"

 

Similar calls were made by the SNP. Its business spokesman Drew Hendry said:
"[Workers] must be given all the help they can get to have all of their
pension rights retained."

 

There is no legal requirement for Sir Philip, who ran the company, or his
wife Lady Green, who owns it, to fill the entire pension deficit.

 

An Arcadia spokesperson said that a commitment from Lady Green, agreed with
regulators, to add £100m to the company's pension scheme would be
accelerated.

 

"Two instalments of the amount of £25m each have already been paid. The
third and final instalment of £50m was not due to be paid until September
2021," the spokesperson said.

 

"Lady Green is going to bring this payment forward to be paid in the next
seven to 10 days to complete the £100m commitment of payment."

 

Is my pension ruined if a retail empire crumbles?

Responding for the government, business minister Paul Scully said it was
inappropriate to comment on individual cases.

 

"The independent pensions regulator has a range of powers to protect
pensions schemes and it does work closely with those involved," he added.

 

"The schemes where the employer goes insolvent, the Pension Protection Fund
is there to protect the members. Anybody already in receipt of their
pensions will continue to be paid and other members will receive at least
Pension Protection Fund compensation levels."

 

The Pension Protection Fund (PPF) will go through the books and consider
whether the Arcadia pension schemes could survive or be bought by a third
party, if it thought that would provide better outcomes for pension scheme
members.

 

It has emerged that one potentially interested party is the Pension
SuperFund - a new business that pools pension funds in a bid to make them
more efficient and bring better investment returns.

 

As first reported by Sky News, early-stage talks have been held on absorbing
Arcadia pensions into the Pension SuperFund.

 

"Pension SuperFund can confirm that it is is contact with the trustees of
the Arcadia pension funds. Any transaction would subject to their agreement,
the Pension Regulator and/or PPF clearance, as the case may be," said
co-founder Edi Truell, a former adviser to Prime Minister Boris Johnson.

 

"Pension SuperFund is currently of the view that it can offer a safe and
secure home to the 9,500 pension members in the Arcadia pension funds."

 

Trustees for the funds said they were in contact with the PPF and the
regulator to ensure members' interests were protected.

 

Pension superfunds - of which the Pension SuperFund is one of the biggest in
the UK - are a source of debate in pension industry circles.

 

Supporters say they offer a more secure long-term option for savers, because
they can consolidate schemes and reap the benefits of investing on a larger
scale. They may also be cheaper than a scheme being bought out by an
insurance company.

 

However, critics point to the fact they are governed by a different set of
regulations, while trade unions have expressed concern that workers will see
their pension shift from their employer to a profit-seeking superfund.--BBC

 

 

Bonmarché collapses into administration

Women's fashion chain Bonmarché has fallen into administration, putting more
than 1,500 jobs at risk.

 

Bonmarché, which has 225 stores around the country, was owned by retail
tycoon Philip Day.

 

His other chains - Edinburgh Woollen Mill, Peacocks and Ponden Home stores -
collapsed into administration last month.

 

Administrators said the stores would continue to trade while options for the
business were explored.

 

Damian Webb and Gordon Thomson of RSM Restructuring Advisory have been
appointed as joint administrators of the firm, known as BM Retail Limited.

 

Mr Webb said: "Bonmarché remains an attractive brand with a loyal customer
base. It is our intention to continue to trade whilst working closely with
management to explore the options for the business.

 

"We will shortly be marketing the business for sale and based on the
interest to date, we anticipate there will be a number of interested
parties."

 

Yorkshire-based Bonmarché specialises in clothing for the over-50s.

 

It has been in and out of administration before, most recently in October
last year, but it was rescued a month later.

 

This is the third time Bonmarché's been in administration. It had a
3,800-strong workforce back in 2012 before it collapsed and was then bought
by a private equity firm. 160 stores closed and 1,400 job losses followed.

 

The chain was floated on the stock exchange in 2013. But in recent years
it's continued to struggle. Philip Day built up a stake last year and then
went on to buy the rest of it in a £5.7m deal, only for it to fall into
administration a few months later.

 

He then went on to buy it back in what's known as a pre-pack deal. That
allowed him to cut costs and reduce the number of stores. It also left
suppliers out of pocket.

 

Don't expect Philip to ride to the rescue again this time, said one source.
Today's news means his retail empire has now completely collapsed.

 

The collapse of the chain adds to a grim week for the High Street, after
Debenhams announced all its stores were set to close for good and Topshop
owner Arcadia fell into administration.

 

Those two firms employ 25,000 people between them.

 

In both cases, tough trading conditions and long-standing difficulties have
been exacerbated by the coronavirus pandemic, which forced stores to close
for lengthy periods during 2020.

 

And there is no end in sight for the uncertainty faced by retailers.
Consumer confidence is expected to remain fragile into next year, amid fears
that unemployment is set to rise as Covid continues to take its toll on the
economy.

 

'Disrespect'

Retail analyst Kate Hardcastle told the BBC it was a mistake to think that
Bonmarché and other troubled retailers were suffering purely because they
had lagged behind on their online offer.

 

She said Bonmarché had shown "disrespect" towards its target market of older
women by failing to engage with them and taking a traditional view of retail
that no longer applied.

 

"It was led by a team that did not understand and reflect that their
customers had changed and it did not move with them," she said.

 

"These are smart, sophisticated women. They're not your pearls-and-twinset
customer.

 

"You can't just sell stuff to people any more. You have to embrace the way
that 50-plus women live their life."-BBC

 

 

 

Debenhams website overwhelmed as shoppers swoop on sales

The Debenhams website has been overwhelmed by shoppers searching for
bargains after the department store chain collapsed.

 

The firm launched a stock clearance sale on Wednesday at 07:00 as
non-essential retailers in England reopen after a four-week lockdown.

 

But high demand led to long, virtual queues of thousands and by mid morning
the site had crashed altogether.

 

"We have been seeing unprecedented levels of visits," a spokesperson said.

 

In a bid to keep up with the additional demand, the retailer was forced to
implement a queuing system for its website, which promised customers: "We
will get you onto the site as soon as possible."

 

On Tuesday, the company spelled out how many shoppers were on its site, at
one point queues stretched into many hundreds of thousands, but on Wednesday
Debenhams was no longer displaying that information.

 

Some social media users reported as many as 900,000 other customers in the
queue for the website.

 

It seems everyone is looking for bargains on #Debenhams website this
evening! pic.twitter.com/ftDY8cDXGt

 

The company had already been running a 14-day "Black Friday" sales event,
with discounts of up to 70% from Wednesday onwards in-store and online
across clothes and homeware.

 

For other customers, the website crashed completely on Tuesday evening,
either before reaching the virtual queue or having reached the checkout
stage for their purchases.

 

One social media user wrote that they had been given only 30 minutes to
complete their shopping online.

 

"Only problem is once you get in there the homepage keeps crashing. No
wonder they've gone bust," they wrote.

 

Twitter user Danielle Harmer said: "Finally get onto the website, start
adding to my basket and then an error message pops up saying my queue number
has been rejected and I have to join the back of the queue again! Actually
livid."

 

All of Debenhams' 124 UK stores are set to close after the failure of
last-ditch efforts to rescue the ailing store chain.

 

It means all 12,000 employees are likely to lose their jobs when the shops
cease trading, unless the administrators do a deal for all of parts of the
business.

 

Arcadia Stores

Some social media users expressed sympathies for those staff members now
facing uncertainty. Heather Angus wrote: "If you're planning to go raid
Debenhams with the announcement of them selling off stock, please be kind to
their staff. This is awful."

 

Debenhams had been in administration since April. It is now set to enter
liquidation, also known as winding-up, which means it will cease to exist as
a company.

 

The 242-year-old retailer had already trimmed its store portfolio and cut
about 6,500 jobs since May as it struggled to stay afloat.

 

Hopes of a rescue were crushed after the last remaining bidder for the
company, JD Sports, withdrew.

 

There have been suggestions that JD Sports pulled out of bidding for
Debenhams because of the collapse of Arcadia, which is the biggest
concession operator in Debenhams, accounting for about £75m of sales.

 

Tough trading during the coronavirus pandemic proved to be the final blow
for both Debenhams and Arcadia, which employ more than 25,000 people between
them.

 

Restructuring firm Hilco will start going into Debenhams stores on Wednesday
to begin clearing stock.

 

Shoppers will still be able to buy items in-store and on the Debenhams
website, until all of it is sold.

 

Anyone who has ordered something on the website, including during the Black
Friday sales, should receive it. They should also be able to return these
items, under the normal rules, within 14 days, if they do not want them.

 

The business is also accepting payment cards, such as gift cards. If the
business is sold, these cards might continue to be valid.

 

However, if cards are unspent or items not delivered if Debenhams closes
entirely, then shoppers may need to contact their bank, via the chargeback
scheme, or their credit card provider (if they spent more than £100 on a
single order) to get a refund.--BBC

 

 

Supermarkets repay rates relief after backlash

Tesco and Morrisons will together hand back more than £850m worth of
business rates relief they received as support during the coronavirus
crisis.

 

Tesco said it would repay £585m after it was criticised for paying dividends
to shareholders.

 

Morrisons subsequently announced it had "brought forward" a decision on
rates relief and would pay back £274m.

 

Tesco said the help to retailers had been a "game-changer" and hugely
important at the time.

 

But it added that its business had proven "resilient" and it had now decided
to return the money in full.

 

"We will work with the UK government and devolved administrations on the
best means of doing that," it said.

 

In October, Tesco defended paying a £315m dividend to shareholders after
reporting a 29% increase in profits for the first half of the year. Finance
chief Alan Stewart told reporters it was the right policy.

 

Meanwhile, Morrisons said it would announce its dividend when it knows how
much it has made this year.

 

Commenting on the decision to pay back the rates relief, Morrisons' chief
executive, David Potts, said the supermarket chain had "done its best work"
to meet the "enormous challenges" the pandemic had brought.

 

"We are grateful for the government's swift action at the start of the
pandemic which enabled the whole sector to face squarely into the challenges
and disruption caused by Covid-19," he said.

 

Business rates relief was extended to all retailers as part of a package of
measures announced in March.

 

Tesco profits surge as online orders double

In March, Tesco was accused of "whipping up a huge lobbying operation"
against a decision not to give its biggest stores in Wales financial help.

 

The Welsh government changed its mind and decided to grant business rate
relief to all retail, hospitality and leisure firms.

 

Tesco is understood to have asked the Welsh government for an explanation of
its thinking rather than a change in policy.

 

"The decision to repay business rates relief is one for individual companies
to consider for themselves," said Tom Ironside, director of business and
regulation at the British Retail Consortium.

 

"Many have used this money to cover increased costs as a result of Covid -
hiring extra staff and making significant investment in the safety and
protection of their premises. As such, there are many firms who simply
cannot afford to repay this government relief."

 

While most of the public focus has - for obvious reasons - been on the
furlough scheme, the business rates holiday for retailers and hospitality
companies has been one of the main ways the government has tried to keep
alive the companies most affected by pandemic closures. Like all coronavirus
schemes, however, the rates relief was a blunt instrument - it went also to
retailers who have stayed open throughout.

 

When those retailers decided to pay dividends to shareholders, there was an
understandable outcry. Tesco was the object of most opprobrium; it said it
would pay £315m to investors after reporting that pandemic trading had been
buoyant.

 

Directors at the supermarket chain have obviously read the headlines. The
company said it would repay the £585m it has had so far this year in
business rates relief, while pointing out in passing that it estimated the
pandemic had brought it £725m in additional costs.

 

The question now is whether other essential retailers - especially the big
grocery chains such as Sainsbury's and Asda - will follow Tesco's lead. It
would be surprising if they did not.

 

And while the repayments might appear like a public-spirited move, bear in
mind the board may have had other motivations: in particular, a desire not
to have the public support they have received hanging over them and
preventing them from exercising their normal commercial judgement in paying
dividends, approving bonuses and making deals.

 

Tesco said the money meant that it had had the immediate confidence, in the
face of significant uncertainty, to invest in colleagues and support its
customers and suppliers.

 

"Every penny of the rates relief we have received has been spent on our
response to the pandemic. Our latest estimate at our interim results in
October was that Covid would cost Tesco [about] £725m this year - well in
excess of the £585m rates relief received.

 

"Ten months into the pandemic, our business has proven resilient in the most
challenging of circumstances. While all businesses have been impacted - many
severely so - we have been able to continue trading throughout, serving many
millions of customers every day and although uncertainties still exist, some
of the potential risks faced earlier in the year are now behind us."

 

Chief executive Ken Murphy said: "Giving this money back to the public is
absolutely the right thing to do by our customers, colleagues and all of our
stakeholders."--BBC

 

 

 

Asian shares mixed, U.S. dollar near two-and-half-year lows

SYDNEY (Reuters) - Asian shares were mixed on Thursday after a choppy day of
Wall Street trade, thanks in part to a disappointing U.S. jobs report, while
the greenback languished near 2-1/2 year lows on growing optimism of a
coronavirus vaccine.

 

Britain became the first Western country to approve a COVID-19 vaccine, with
800,000 doses of the Pfizer and BioNTech vaccine available for those at high
risk starting next week.

 

The U.S. Food and Drug Administration is holding its advisory committee
meeting next week, while New York Governor Andrew Cuomo has said the state’s
first delivery, enough for 170,000 residents, is expected on Dec. 15.

 

Hopes that the pandemic, which has so far killed nearly 1.5 million people
globally, will finally be brought under control sparked a risk-on rally in
currency markets with the Australian and New Zealand dollars advancing
against their U.S. counterpart.

 

The dollar index slipped to a fresh 2-1/2 year low of 90.948 on Thursday and
was last at 90.976. [FRX/]

 

“Currency investors are taking on more risk following the latest vaccine
breakthroughs, options show,” Morgan Stanley said in a note.

 

Hopes of a fiscal support package in the United States also boosted investor
optimism.

 

But share traders were less enthused.

 

E-Mini futures for S&P500 were a shade weaker as were Dow futures. Futures
for Eurostoxx 50 were down 0.1%, those for Germany’s Dax eased 0.2% and
London’s FTSE futures fell 0.4%.

 

In Asia, Japan’s Nikkei was unchanged while South Korea’s KOSPI and
Australia’s benchmark index were about 0.4% higher each. Chinese shares
opened a tad lower, with the blue-chip CSI300 index off 0.2%. New Zealand
shares were weaker too.

 

That left MSCI’s broadest index of Asia-Pacific shares outside of Japan up
0.4% following two straight days of gains.

 

“Markets are quite likely to muddle through from here,” said Michael Frazis,
portfolio manager at Frazis Capital Partners in Sydney.

 

“The vaccine is increasingly priced in. A couple of months ago, no one knew
how deep coronavirus would be, or what the outcome of the election was. Now
both sources of uncertainty have been removed.”

 

Worries that the U.S. economy may be decelerating weighed on shares after
U.S. private payrolls showed fewer jobs than expected were added in November
as growing new COVID-19 infections led to additional business restrictions.

 

Overnight, Wall Street swung between red and green territories but
eventually ended a tad firmer. The Dow Jones and the S&P 500 gained 0.2%
each while the tech-heavy Nasdaq was barely moved.

 

In currencies, the risk-sensitive Aussie hit a more than two-year high of
$0.7420 overnight and was last at $0.7410. Its kiwi cousin was last at
$0.7063, hovering near the highest since May 2018.

 

The euro fetched $1.2118, having reached its loftiest level since late April
2018 in the previous day’s trade.

 

In commodities, oil prices slipped on Thursday as producers including Saudi
Arabia and Russia locked horns over the need to extend record production
cuts set in place in the first wave of the COVID-19 pandemic. [O/R]

 

Brent crude was down 9 cents at $48.16 a barrel while U.S. light crude eased
14 cents to $45.14.

 

Gold was slightly firmer at $1,832.6 an ounce.

 

 

 

Chinese firms on U.S. exchanges threatened by bill headed to Trump's desk

WASHINGTON (Reuters) - The U.S. House of Representatives passed a law to
kick Chinese companies off U.S. stock exchanges if they do not fully comply
with the country’s auditing rules, giving President Donald Trump one more
tool to threaten Beijing with before leaving office.

 

The measure passed the House by unanimous voice vote, after passing the
Senate unanimously in May, sending it to Trump, who the White House said is
expected to sign it into law.

 

“The Holding Foreign Companies Accountable Act” bars securities of foreign
companies from being listed on any U.S. exchange if they have failed to
comply with the U.S. Public Accounting Oversight Board’s audits for three
years in a row.

 

While is applies to companies from any country, the legislation’s sponsors
intended it to target Chinese companies listed in the United States, such as
Alibaba, tech firm Pinduoduo Inc and oil giant PetroChina Co Ltd..

 

Measures taking a harder line on Chinese business and trade practices
generally pass Congress with large margins. Both Democrats and Trump’s
fellow Republicans echo the president’s hard line against Beijing, which
became fiercer this year as Trump blamed China for the coronavirus ravaging
the United States.

 

Democratic Senator Chris Van Hollen, who co-authored the bill with
Republican Senator John Kennedy, said in a statement that American investors
“have been cheated out of their money after investing in
seemingly-legitimate Chinese companies that are not held to the same
standards as other publicly listed companies.”

 

Kennedy said China was using U.S. exchanges to “exploit” Americans. “The
House joined the Senate in rejecting a toxic status quo,” he said in a
statement.

 

The act would also require public companies to disclose whether they are
owned or controlled by a foreign government.

 

The American Securities Association praised passage of the bill saying it
was necessary to protect Americans from “fradulent companies controlled by
the Chinese Communist Party.”

 

Trump expected to sign bill that could delist Chinese companies, White House
says

‘NON-DISCRIMINATORY ENVIRONMENT’

 

The Chinese embassy in Washington did not immediately respond to a request
for comment. Chinese foreign ministry spokeswoman Hua Chunying said before
the vote that it was a discriminatory policy that politically oppresses
Chinese firms.

 

“Instead of setting up layers of barriers, we hope the U.S. can provide a
fair and non-discriminatory environment for foreign firms to invest and
operate in the U.S.,” Hua told a news conference.

 

A spokesman for Alibaba pointed to a comment on the bill from May, when it
was passed by the Senate. Chief Financial Officer Maggie Wu told investors
the firm would “endeavor to comply with any legislation whose aim is to
protect and bring transparency to investors who buy securities on U.S. stock
exchanges.”

 

Chinese authorities have long been reluctant to let overseas regulators
inspect local accounting firms, citing national security concerns.

 

Officials at China’s securities regulator indicated earlier this year they
were willing to allow inspections of audit documents in some circumstances,
but past agreements aimed at solving the dispute have failed to work in
practice.

 

Shaun Wu, a Hong Kong-based partner at law firm Paul Hastings, said
increased enforcement against Chinese companies was likely even though
Democrat Joe Biden will become president in January.

 

He said if the bill becomes law, “all Chinese companies listed in the U.S.
will face enhanced scrutiny by the U.S. authorities and inevitably consider
all available options.”

 

This could include listing in Hong Kong or elsewhere, he said. Several
U.S.-listed Chinese firms, including Alibaba and KFC China operator Yum
China, have recently carried out secondary listings in Hong Kong.

 

 

 

The new black gold? Big Oil bets on retail networks in an electric era

LONDON (Reuters) - For Big Oil, coffee and chocolate could be the new black
gold.

 

Under pressure from investors and governments alike to cut emissions, major
European oil companies are ploughing billions into renewable energy but are
struggling to craft business plans that promise the returns shareholders
have come to expect.

 

Europe’s big oil firms, however, have another card to play: their vast
global networks of filling stations.

 

BP, Royal Dutch Shell and Total all say they are betting on higher profits
from sales of groceries and snacks at their retail networks, which will
still be an essential port of call for motorists in an electric era.

 

Paying at the pump to fill up with petrol may only take a few minutes, but
even with the fastest electric vehicle (EV) chargers, customers would have
at least 10 to 15 minutes to kill - plenty of time to grab a coffee and do
some shopping.

 

While the so-called marketing operations of big oil firms - retail sales of
fuel, lubricants, groceries and TV dinners - usually contribute a smaller
slice of profits than oil and gas production, they typically have higher
margins.

 

The renewable energy and power businesses oil companies are moving into,
however, tend to have lower returns on investment, making it important for
firms such as BP and Shell to find ways to boost their overall returns in
low-carbon economies.

 

That’s why Shell plans to expand its retail network by more than 20% to
55,000 sites worldwide by 2025. BP aims to increase its network of filling
stations by nearly 50% to 29,000 by 2030 and boost its EV charging network
to 70,000 points.

 

Total, meanwhile, is planning to increase its EV charging network in Europe
to 150,000 points by 2025 from 18,000 now.

 

Subway and McDonald’s, the world’s two biggest food chains, both have fewer
outlets than Shell. U.S. giant Walmart, the world’s biggest retailer by
sales, has 11,510 stores globally.

 

BP and Shell are also betting that daily contact with tens of millions of
customers will give it masses of data that it can use to tailor sales for
shoppers in small towns, cities or even specific petrol stations throughout
the world.

 

 

 

Appeals court schedules Dec. 14 hearing on blocked U.S. TikTok new user ban

WASHINGTON (Reuters) - A federal appeals court said on Wednesday it will
hear oral arguments on Dec. 14 on the government’s appeal of an order that
blocked a ban on Apple Inc and Alphabet’s Google offering TikTok for
download in U.S. app stores.

 

U.S. District Judge Carl Nichols in Washington on Sept. 27 blocked the
Commerce Department order hours before it was to prohibit new downloads of
the Chinese-owned short video-sharing app.

 

The appeals panel consists of Judge Judith Rogers, Patricia Millett and
Robert Wilkins. All three were nominated by previous Democratic presidents.

 

The Trump administration last week extended to Friday a deadline for Chinese
TikTok parent ByteDance to sell TikTok’s U.S. assets. The Trump
administration contends TikTok poses national security concerns as the
personal data of U.S. users could be obtained by China’s government. TikTok,
which has over 100 million U.S. users, denies the allegation.

 

The administration previously granted ByteDance a 15-day extension of the
order issued in August. President Donald Trump on Aug. 14 directed ByteDance
to divest the app’s U.S. assets within 90 days.

 

Under pressure from the U.S. government, ByteDance has been in talks for
months to finalize a deal with Walmart Inc and Oracle Corp to shift TikTok’s
U.S. assets into a new entity.

 

ByteDance made a new proposal aimed at addressing the U.S. government’s
concerns, Reuters reported last week.

 

The U.S. Treasury said last week the extension was granted to review a
recently received “revised submission.”

 

ByteDance made the proposal after disclosing on Nov. 10 that it submitted
four prior proposals, including one in November, that sought to address U.S.
concerns by “creating a new entity, wholly owned by Oracle, Walmart and
existing U.S. investors in ByteDance, that would be responsible for handling
TikTok’s U.S. user data and content moderation.”

 

U.S. District Judge Wendy Beetlestone on Oct. 30 blocked another aspect of a
Commerce Department order scheduled to take effect Nov. 12 that would have
effectively barred TikTok from operating in the United States.

 

Beetlestone enjoined the agency from barring data hosting within the United
States for TikTok, content delivery services and other technical
transactions.

 

 

 

Nigeria: Expert Advises Govt to Cede 50% of Oil Royalties to Host
Communities

An Emeritus Professor of Petroleum Economist and Policy Research, Prof. Wumi
Iledare, has advised the federal government to surrender 50 per cent of the
oil royalties to the host communities.

 

Iledare said this would help accelerate development in the oil producing
communities that are currently suffering development challenges despite some
special funds that were created and being released for the development of
the communities.

 

Iledare made the suggestion in a paper entitled: "The New PIB: Addressing
the Host Communities Question," which he presented at a recent policy
dialogue on reporting the Nigeria oil and gas sector, in Lagos.

The programme was organised by the Facility for Oil Sector Transparency and
Reform in Nigeria (FOSTER), an advocacy group pushing for reforms and
judicious utilisation of Nigeria's hydrocarbon resources.

 

The professor said the money should be domiciled in the Host Community Trust
Fund which is being proposed in the Petroleum Industry Bill (PIB) for the
genuine development of the communities for the sake of posterity.

 

He argued that none of the 13 per cent derivation fund being allocated to
the Niger Delta Development Commission (NDDC), the monthly allocations to
oil producing states and the Corporate Social Responsibility (CSR) projects
carried out by oil companies had been able to stop the agitations by the
host communities.

 

He attributed the situation to both the insufficiency of the funds and the
hijacking of the funds and projects by the elites in the affected states and
communities.

"The federal government should surrender 50 per cent of the royalty money to
this host community fund for posterity sake. It must be used to develop the
education sector and facilities that will lead to job creation in those
states and communities," Iledare said.

 

He also said that the N10 billion fund proposed in the PIB for the host
communities annually was grossly inadequate hence his suggestion for the 50
per cent royalty to be dedicated to the host communities.

 

The petroleum economist equally urged the federal government and the host
communities to guard against the potential capture of the fund by the
elites, warning also that oil companies should be made to avoid duplicating
such host community trust fund by setting up theirs.

 

On the issue of deregulation of petrol pricing, Iledare said there was no
deregulation yet because the Petroleum Act had not been repealed or amended
to support deregulation.

 

He said: "Deregulation has two components to it: liberalisation and
restructuring. You cannot be claiming you have deregulated if Petroleum Act
is still in existence. Because the Petroleum Act gives the power to the
Minister to determine or set the price.

"So it is illegal for NNPC to set petrol prices because NNPC is not
minister, and indirectly NNPC is the one setting the price now when they
tell what the depot price is and marketers will add their own.

 

"That's an indirect way of setting the price and it is illegal, the monopoly
is supposed to be removed.

 

He further said: "there must be a law, a regulation backing it up, that
anybody who then sets the price must be punished.

 

"Unfortunately, let me commend NNPC as a monopoly importer charging what I
call socially-optimum price of petrol. I can guarantee you that beyond the
socially-optimum price, they are not getting any return on that price
because it's about replacement.

 

"Knowing what the exchange rate is today -almost N500 to a dollar. A lot of
foreign exchange reserve is to guarantee the import of petroleum
products."-This Day.

 

 

 

Seychelles Losing Out On U.S.$28 Milllion in Unpaid Taxes, Auditor General
Report Finds

Seychelles hasn't been paid some $28 million in taxes it was owed as of
2018, a new report from the Auditor General shows.

 

The money which was not collected by the Seychelles Revenue Commission will
very likely not be collected due to the passage of time, Gamini told
journalists Wednesday at the launch of the 2019 report.

 

"Some of which may now be rendered irrecoverable due to passage of time and
lack of action taken. In my view, the entities concerned should take
immediate recovery action to collect as many debts as possible and reduce
the amounts in arrears," explained the auditor.

 

Herath pointed out the report does not include the results of numerous other
audits such as performance audits and those carried out at the request of
the Finance Public and Account Committee (FPAC) of Seychelles' National
Assembly.

 

"The results of these audits have been included in separate reports which
were submitted to the National Assembly and, subsequently, to the government
through the cabinet for information and remedial action," said Herath.

The auditor noted with satisfaction that statutory bodies, including
agencies, boards, councils and institutes, in Seychelles - 115 islands in
the western Indian Ocean - are on track with legal provisions and are up to
date with their annual accounts. The report also highlights ongoing
noncompliance with prescribed financial rules, procurement procedures and
lack of proper records.

 

The Chairperson of the board of Seychelles Revenue Commission, Chrystold
Chetty, told SNA that despite tax being owned over several years, the
commission is doing a lot to recuperate the tax money as well as identifying
areas where tax collection is outstanding.

 

Chetty explained that the commission is adopting different mechanisms for
reinforcement. "We are calling and negotiating with tax agents, some we have
filed court cases against them. As different amounts are owed for different
tax, some of them are filing objections and renegotiating."

 

Chetty added that in some cases, a write-off may be the only solution but
for now the law does not make any provision for a write-off. In other
instances, the chair explained that assets are being seized, to be sold off
so that the money owed can be recuperated.

 

Currently, the revenue commission is collecting different taxes such as
personal income tax, value-added tax as well as corporate tax.

 

According to Chetty as much effort is put in the matter, there are
challenges that the commission has no control on, such as their court cases,
where there is a bottleneck at the Attorney General's office - the
prosecutors of the cases. But despite this Chetty said all endeavours are
being taken so that by 2022, the commission will recuperate some tax money
in arrears.-Seychelles News Agency.

 

 

 

Tanzania: Tz Remains Second in Livestock Count

TANZANIA has clung on to the second slot country in terms of largest
livestock population in the African continent, show newly released
statistics.

 

The new livestock data released by the National Bureau of Statistics (NBS)
in Mwanza yesterday showed that Tanzania boasts an estimated total of 33.9
million cattle with Ethiopia leading with 60.39 million cattle.

 

Cognisant of its livestock richness, the government of Tanzania has turned
its focus on improving the sector by expanding the market for meat, skin and
hides in and outside its borders.

 

Contained in the National Bureau of Statistics (NBS) Preliminary Report on
Agriculture, Livestock and Fisheries Census for 2019/2020, the new data also
highlight the number of other livestock such as sheep and goats as well as
crop production.

 

NBS Director General, Dr Albina Chuwa said that researchers/ statisticians
also found small farmers having 24.5 million goats while large-scale farmers
had 33,347 million.

"In the survey conducted, peasants were found with 8.5 million sheeps while
large-scale farmers had 24.236 million. Again, peasants were found with 3.2
million pigs while large-scale farmers had 5.153 million," she said.

 

In the survey, it was also established that the country had a total of 87.7
million chickens out of which 75.1 million were possessed by small holder
farmers while 12.6 million were being kept by large scale farmers.

 

Equally, it was found in the survey that 3.1 billion and 53.1million liters
of cow and goat milk, respectively, were produced by the small holder
farmers while spray-type of drugs and dipping were mentioned as the methods
that were used to control ticks on livestock.

 

The Census Report further showed that about 30,261 households were found
engaging in fish farming activities with 21,704 families, equivalent to 71.7
per cent farming Tilapia, producing 10, 690 tonnes.

On the side of cereal-related crops, she said, about 9.1 million tonnes of
maize, rice and sorghum were produced, of which 5.7 million tonnes,
equivalent to 62.5 per cent were maize while 2.9 million tonnes, equivalent
to 32.1 per cent were rice.

 

Sorghum recorded 488,724 tonnes, equivalent to 5.4 per cent. About 1.6
million tonnes of cassava, sweet and Irish potatoes as well as 599,461
million tonnes of oil seeds were also produced, according to the NBS boss.

 

"For commercial crops, coffee recorded 92,396 tonnes while tea recorded
40,611 tonnes. While cotton recorded 445,972 tonnes, Cloves recorded 3,378
tonnes.

 

The Census also shows that about 13.5 million hectares were tilled for
various crops, with 76.7 per cent using traditional seeds and 20.8 per cent
applying modern seeds.

 

About 2.5 per cent of the land was farmed with the application of both
traditional and modern seeds.

 

The Census Coordinator in Zanzibar, Mr Mwalimu Juma Mohammed said that there
were positive changes in all the researched areas (in the Isles) compared to
the situation seen ten years back (2007/2018), when the Census was
conducted.

 

He cited an example of the increase in the number of small farmers, from
32,000 households to over nearly 200,000, equal to 57 per cent, as well as
an increase in cattle, from 155,624 to 270,457 as of now.

 

"We found improvements in all areas, with farmers citing availability of
farm inputs among the factors. Some relevant authorities have been also
providing regular public education, directing farmers what to do in a
certain area," said the Coordinator.-Daily News.

 

 

 

Nigeria: Collapsed Nigerian Electricity Grid Restored in 40mins - Official

The TCN boss says the collapsed grid was restored within 40 minutes of the
incident.

 

The Transmission Company of Nigeria (TCN) said it has restored the collapsed
electricity grid system across the country.

 

The Acting Managing Director of TCN, Sule Abdulaziz, made this known while
addressing journalists in Abuja on Wednesday.

 

Mr Abdulaziz said the system, which collapsed on Sunday evening, was
restored within 40 minutes of the incident.

 

He said the company immediately went into action and stabilised the system
in Abuja, before other parts of the country.

 

According to him, there is nothing strange but it is normal for a system to
collapse and that can happen in any country of the world.

 

"Since I came on board, we never had any system collapse and this one that
happened on Sunday was restored immediately which is the fastest system
collapse recovery.

 

"We are guarding the grid, we don't want the system collapse to happen. But
when it happens, the most important thing is what was done and how it was
done to restore the system.

 

"In the last six months, there was no system collapse in the grid," he
stated.

 

He said that in his last few months in office, he had reorganised the
company to ensure power stability.-Premium Times.

 

 

 

Kenya: Prices of Used Cars Jump as Shilling Hits Historic Low

The cost of second-hand cars has jumped by up to 12 per cent or Sh500,000
per unit over the past three months, propped up by the weakening of the
shilling to historic lows against the dollar in the wake of
coronavirus-related economic shocks.

 

The shilling on Tuesday traded at Sh110.15 units to the US dollar from
Sh106.4 in June and Sh102.3 in March - prompting the importers of items like
cars, fuel, second-hand clothes and industrial machinery to pass the
additional costs to consumers.

 

Charles Munyori, the secretary-general of the used car dealers lobby Kenya
Auto Bazaar Association, said the pinch of the weakening shilling was
already being felt among buyers of car units shipped in last month.

The rise in car prices comes amid plunging purchase orders due to reduced
cash flow from to the Covid-19 pandemic, which triggered layoffs and pay
cuts as banks reduced credit lines in fear of defaults.

 

Kenyans faced with Covid-19-linked hardships have gone slow on luxury
spending.

 

New vehicle registrations dipped 33 per cent to 52,999 in the nine months to
September from 79,078 in similar period last year, data by the Kenya
National Bureau of Statistics (KNBS) shows.

 

"When we were buying the dollar between 101 and 105, this did not have much
of an impact but now it is 110 and the effects are huge. Some models like an
eight-year-old Land Cruiser V8 will cost at least Sh480,000 more without
taxes, so you add taxes to this and it goes above half a million shillings,"
Mr Munyori said.

"For any model that goes for anything above $10,000, the rise will be steep
and a car that goes for Sh1 million will now go up by at least Sh130,000."

 

Mr Munyori said that new shipments of the 2013 Toyota Fielder cost Sh1.5
million per unit from Sh1.3 million while the price of Toyota Axio 2013
model is set at Sh1.25 million from Sh1.1 million.

 

A used Nissan X-Trail of an engine capacity of 2,000 cc whose average market
price was Sh1.7 million is now retailing at Sh1.82 million in what is
expected to further hit sales for dealers who have since April been
grappling with depressed demand for the used cars.

 

Prices of used luxury brands like Mercedes Benz and the Land Cruiser V8
series have registered the biggest rise of between Sh300,000 and Sh400,000.

 

A used Mercedes Benz 2013 E350 model, for example, is selling at Sh3.7
million, up from Sh3.4 million while a C200 2014 model is retailing at Sh2.6
million from the previous Sh2.3 million.

The weakening of the shilling further dims prospects for the dealers who
were from April forced to lower prices to match the reduced demand due to
the Covid-19-induced layoffs, job cuts and business closures.

 

The shilling has been on a free fall since March 13 when Kenya reported its
first Covid-19 case and has hit historic lows because of a lack of tourists
and reduction of exports that have squeezed the supply of the dollar.

 

Analysts have linked the record weakening of the shilling to the increased
dollar demand and a dimmed outlook for exports in the wake of renewed
lockdowns in Europe following a second wave of Coronavirus infections.

 

Countries such as France, Austria, Germany, Portugal and Sweden have
implemented a second round of lockdowns to battle fresh infections, which is
set to hit the export of items such as flowers, fruits and vegetables.

 

Kenya is also grappling with sharp rises in Covid-19 infections and related
deaths since easing travel restrictions and re-opening of bars and learning
institutions in September.

 

The shilling has also been dragged down by demand for hard currencies from
importers resuming business after the State started to ease Coronavirus
containment measures in July, which has seen businesses increase activities.

 

Mr Munyori said that reduced production of cars in Japan due to closure of
factories to curb spread of the coronavirus in March have added to the
shilling's woes.

 

He also pointed out that most car owners in Japan have become reluctant to
offload their cars for markets like Kenya-- a major importer of the used
models.

 

Vehicles from Japan dominate the Kenyan second-hand car market, controlling
more than 80 per cent of market share.

 

"Production in Japan has gone down due to Covid-19 and now people are
holding onto their cars, and the second-hand cars mainly of eight years are
becoming increasingly difficult to get," Mr Munyori said.

 

"October to November is our high season but the vehicles have become
expensive in Japan and the production has also fallen. Last year we did
about 7,000 units but now this has fallen to 4,000 based on the last
shipment done at start of November."-Nairobi News.

 

 

 

Nigeria: Naira Bounces Back, Appreciates to N470/$ in Parallel Market

The naira this morning reversed its two weeks loss to the dollar in the
parallel market, appreciating by N20 to N470 per dollar.

 

The naira had earlier depreciated by N30 against the dollar, as the parallel
market exchange rate rose sharply to N500 per dollar on Monday, November
30th from N470 per dollar on Friday, November 20th 2020.

 

But the new rules introduced by the Central Bank of Nigeria on Monday,
November 30th, which allowed beneficiaries of diaspora remittances and
foreign exchange transfers into domiciliary account, to collect the proceed
in foreign currency cash, halted the dwindling fortunes of the naira.

As result, the naira gained N10 against the dollar yesterday (Tuesday,
December 1st) as the parallel market exchange rate dropped to N490 per
dollar from N500 per dollar on Monday.

 

This trend continued this morning, howbeit on a larger scale, as the
parallel market exchange rate further dropped to N470 per dollar from N490
per dollar yesterday, translating to N20 appreciation for the dollar. Thus,
the naira had reversed the N30 loss against the dollar since November 20th,
2020.

 

The sharp appreciation of the naira according to Aminu Gwadabe, President
Association of Bureaux De Change Operators of Nigeria (ABCON) shows the
effectiveness of the new CBN rule receipt of diaspora remittances.

 

He said: "Certainly, those hoarding foreign exchange better sell now
otherwise they will lick their wounds."

 

Commenting further on how the new rule will impact dollar supply and the
activities in the BDC subsector, Gwadabe said: "The monopoly of (banks) is
broken and the policy will induce liquidity in the BDC subsector.

 

"It is true that the volume of diaspora remittances amidst COVID-19 19 is
still huge. In fact, other countries like Kenya and Zimbabwe are recording
higher diaspora remittances inflow as a result of skilful medical doctors
abroad.

 

"Nigeria is expected to close the year with over $20 billion diaspora
remittances despite the pandemic in 2020.

 

"The beneficiary is free to collect his proceeds in foreign cash currency
and trade it in the BDC subsector which will lead to true price equilibrium
in the market."-Vanguard.

 

 

 

Mozambique: Draft 2021 Budget With Deficit of Over 1.4 Billion Dollars

Maputo — Mozambique's Minister of Economy and Finance, Adriano Maleiane, on
Wednesday presented the country's parliament, the Assembly of the Republic,
with a draft State Budget for 2021 that envisages a primary deficit of
almost 103 billion meticais (about 1.41 billion US dollars, at current
exchange rates).

 

The budget forecasts state revenue for the year of 265.6 billion meticais,
and public expenditure of 369 billion meticais.

 

The deficit is rather smaller than the 109.8 billion meticais envisaged in
the budget for 2020. It will be financed, the government states, by foreign
grants of 34 billion meticais, foreign loans of 25.6 billion meticais, and
2.5 billion meticais remaining from past payments of capital gains tax.

The remaining deficit, of almost 41 billion meticais, should be covered by
the issuing of domestic debt, in the form of high interest bearing treasury
bonds.

 

The priority areas of public expenditure remain education, health and
agriculture. The budget contains money to recruit 9,769 new teachers
(compared with 6,413 in 2019). There will be an extra 5.520 health
professionals recruited, which is more than twice the 2019 figure of 2,126.
1,891 additional agricultural staff will also be recruited.

 

According to the government's budget document, "the increase in the number
of education and health staff seeks to step up activities to prevent and
fight against Covid-19, in order to ensure interpersonal distancing in
educational institutions at all levels".

 

In order to reduce the spread of Covid-19, class sizes are being cut
drastically Classes of 60 or more pupils can no longer be accepted, and this
inevitably means that many more teachers will be required.

Education is the sector with the largest share of the budget at 23.9 per
cent (but this is a reduction of 3.2 per cent in comparison with the 2020
budget). It is followed by health with 14 per cent and agriculture and rural
development with 10 per cent. (These percentages are calculated after
excluding general state charges, such as debt servicing).

 

The public debt weighs heavily on the budget, even after excluding the debts
run up the fraudulent, security-related companies Proindicus and MAM
(Mozambique Asset Management), The total debt service in the draft budget is
77.7 billion meticais - somewhat less than this year's figure (78.6
billion), but much more than the debt service paid in 2019 (61.5 billion).

 

The budget document admits there are serious fiscal risks ahead, arising
from uncertainties which could add to the needs for state financing. The
largest of these is how the Covid-19 pandemic will unfold. "The fiscal
position of the country may change rapidly", the government warns, "due to
the pressures created by increased public expenditure to mitigate the
pandemic, and reduced revenue due to the slowdown in economic activity".

 

The budget could also be compromised if the macroeconomic assumptions on
which it is based (such as the GDP growth rate, the inflation rate, and the
exchange rate) turn out to be wrong. Furthermore, volatility in
international commodity prices, could affect Mozambican exports and hence
state revenue.

 


 


 


Invest Wisely!

Bulls n Bears 

 

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Alt. Email:       <mailto:info at bulls.co.zw> info at bulls.co.zw  

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www.bullszimbabwe.com/blog

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Skype:         Bulls.Bears 



 

 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


Axia Corporation

AGM

virtual https://escrowagm.com/eagmZim/login.aspx

24/11/2020 | 8:14am

 


Zimbabwe

National Unity Day

Zimbabwe

22/12/2020

 


 

Christmas Day

 

25/12/2020

 


 

Boxing Day

 

26/12/2020

 


 

New Year’s Day

 

01/01/2021

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <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 sources 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 sourced from third parties.

 


 

 


(c) 2020 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

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