Major International Business Headlines Brief::: 17 November 2020

Tue Nov 17 08:26:34 CAT 2020

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Major International Business Headlines Brief::: 17 November 2020

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ü  Biden vows to set 'rules of the road' on trade

ü  Huawei sells youth brand over tech restrictions

ü  Elon Musk's personal fortune rockets after eventful week

ü  Airbnb plans public share sale despite pandemic

ü  FTSE 100 and Dow Jones jump on second Covid vaccine hopes

ü  EU budget blocked by Hungary and Poland over rule of law issue

ü  Elliott exits AT&T after waging a fight in 2019; Starboard exits eBay

ü  Tesla to join S&P 500, spark epic index fund trade

ü   BP files notices of possible worker layoffs in Chicago area

ü  Buffett's Berkshire bets on Big Pharma, invests in four drugmakers

ü  Nigeria: Oil Marketers Advises Against 'Group Fixing' of Petrol Price

ü  Nigeria: 2021 Budget - NJC Seeks More Funding for Judiciary

ü  Rwanda: Govt to Recruit 580 Nursery Teachers

ü  Rwanda: Workers' Trade Unions Propose Scheme to Address Job Losses

ü  Nigeria: Prices of Bread, Cereals, Others Push Inflation Rate to 14.23% in October

ü  Nigeria's Inflation Hits 14.23% - a 30-Month High

ü  Africa: Zambia's Debt Default - A Lose-Lose Situation

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Biden vows to set 'rules of the road' on trade

Joe Biden has vowed to work with other democracies to rewrite the rules of international trade.

The US president-elect signalled a shift from Donald Trump's policies, who pulled out of multilateral pacts and raised up tensions with China.

His comments come just days after 15 Asia Pacific countries including China signed an historic trade pact.

The Regional Comprehensive Economic Partnership covers nearly a third of the world's economy and population.

"We make up 25% of the world's trading capacity, of the economy of the world. We need to be aligned with the other democracies - another 25% or more - so that we can set the rules of the road," Mr Biden said.

The alternative, he said, was to have "China and others dictate outcomes because they are the only game in town".

New direction

Mr Biden wouldn't be drawn on whether he would consider signing the Regional Comprehensive Economic Partnership (RCEP) or the rival Trans Pacific Partnership (TPP).

In an apparent jab at Mr Trump, he indicated that his administration's foreign and trade policies would strike a different tone than those of his predecessor.

"I'm not looking for punitive trade. The idea that we are poking our finger in the eyes of our friends and embracing autocrats makes no sense to me," Mr Biden added.

Mr Trump withdrew from the TPP, a trade pact that was originally backed by the Obama administration.

He also introduced tariffs on China and imposed restrictions on a number of Chinese technology companies on national security grounds.

Mr Biden has outlined some of the conditions for US involvement in international trade agreements.

Although he would not say what deals the US might consider joining, Mr Biden outlined some of the conditions for US involvement in international trade agreements.

"One, we're going to invest in American workers and make them more competitive. Number two, we're going to make sure labour is at the table, and environmentalists are at the table in trade deals we make," he said.

The RCEP is made up of 10 Southeast Asian countries, as well as South Korea, China, Japan, Australia and New Zealand.

Although both deals include many of the same countries, China was never a part of the TPP and the US was never a part of RCEP.

After the US withdrew in 2017, the remaining members of the TPP signed onto a successor agreement which made specific provisions to allow the US to re-join.-BBC

Huawei sells youth brand over tech restrictions

Huawei said Honor had been under "tremendous pressure" due to "a persistent unavailability of technical elements".

US government sanctions have restricted supplies to Huawei on the grounds that the firm is a national security threat.

Huawei said it would not hold any shares or be involved in managing the new Honor company.

"This sale will help Honor's channel sellers and suppliers make it through this difficult time," the Chinese telecommunications giant said in a statement.

Huawei said it will sell Honor to Shenzhen Zhixin New Information Technology, a new company set up for the acquisition.

The company is a consortium of more than 30 agents and dealers of the Honor brand, and according to Chinese media, also includes the State-backed Shenzhen Smart City Technology Development Group.

Huawei gave no indication of the sale price.

Equipment restrictions

The Trump administration has increased pressure on Huawei over the past few years, claiming the company is a threat to national security - a claim which Huawei consistently denies.

The US department of commerce now requires foreign semiconductor companies to first get a permit before selling chips to Huawei if they are developed or produced using US technology.

Although Huawei has stockpiled microchips in an effort to survive the restrictions, it said this latest move was an attempt to salvage a brand that has struggled as a result of US policies.

"This move has been made by Honor's industry chain to ensure its own survival," Huawei said.

Huawei established the youth-focused brand in 2013, offering phones in the lower and middle price ranges.

Honor ships 70 million units annually, according to Huawei.-BBC

Elon Musk's personal fortune rockets after eventful week

After an eventful week for tech entrepreneur Elon Musk, his personal fortune has shot up by more than $15bn (£11.3bn).

On Monday, it was announced that his electric car company Tesla has been accepted into the S&P 500, a major US stock market index.

This comes after his rocket company SpaceX sent four astronauts into space.

On top of testing positive for Covid-19, Mr Musk is poised to become the world's third richest person.

Tesla's share price surged about 14% in New York following the news it was being added to the index. Given Mr Musk's 20% stake in Tesla his net worth rose to $117.5bn, according to the Bloomberg Billionaires Index.

His wealth has jumped $90bn this year as Tesla's share price has continued to rise.

Over the weekend, Mr Musk tweeted that he "most likely" had a moderate case of Covid-19 and has had symptoms of "a minor cold."

This came the day before four astronauts were launched to the International Space Station in a rocket built by Mr Musk's SpaceX.

Tesla will enter the S&P 500 on 21 December following months of speculation and one setback in September when it failed to make the index.

The California-based car firm would be the biggest new entrant onto the US index, with a stock market value of over $400bn.

Its entry comes after the company posted four consecutive quarters of profits, essential for acceptance on the index. Tesla has recorded losses for much of its history.

By being included on the S&P 500, investment funds that track the index will automatically invest in Tesla.

"(Tesla) will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history," a spokesman for S&P Dow Jones Indices said.

The California carmaker has become the most valuable auto company in the world despite producing a fraction of the cars made by its bigger rivals Toyota, VW and General Motors.-BBC

Airbnb plans public share sale despite pandemic

Lodging website Airbnb has filed papers in the US to become a publicly listed company in what is one of the most-anticipated launches of the year.

Since its founding as home-sharing site in 2008, the San Francisco tech firm has grown into a global juggernaut.

Its rise has challenged traditional hotel rivals and cities coping with an influx of tourists to new areas.

And while the pandemic hurt the firm's already loss-making business, Airbnb said its model remains resilient.

The company reportedly hopes to raise about $3bn (£2.27bn) by selling shares in the listing, which could value the firm at more than $30bn.

IPO listing

"We believe that the lines between travel and living are blurring, and the global pandemic has accelerated the ability to live anywhere," the company said in its Securities and Exchange Commission filing for its initial public offering (IPO). "Our platform has proven adaptable to serve these new ways of traveling."

More than 4 million hosts list properties on the platform, 86% of which are located outside of the US. Last year, roughly 54 million people reserved stays through the company, which takes a cut of each booking.

But travel was hit hard by the pandemic, prompting the company to slash staff numbers by 25% and raise $2bn in emergency loans from investors to make it through the crisis.

The firm said bookings have since recovered somewhat, as people looked to escape locked down cities with long-term rentals. But they remain down about 20% in recent months compared to last year.

In 2019, the firm booked losses of more than $674m - a figure it has already surpassed in the first nine months of this year.

The firm, which brought in revenue of $4.8bn last year, also warned potential investors that revenue growth had slowed, a trend likely to continue.

Between 2018 and 2019, the firm's revenue grew more than 30%. But it fell more than 30% year-on-year in the first nine months of 2020, to $2.5bn from $3.7bn a year earlier.

Separately, shares of electric car maker Tesla jumped 9% in extended trade on Monday after S&P Dow Jones Indices said that the company would join the S&P 500 index. It will join on 21 December.--BBC

FTSE 100 and Dow Jones jump on second Covid vaccine hopes

Global share prices have surged following news of a second breakthrough coronavirus vaccine, following last week's positive results from Pfizer.

Interim data from the US firm Moderna suggests its vaccine is highly effective in preventing people getting ill and works across all age groups.

The news pushed Moderna shares more than 9% higher and the Dow to a record.

It also lifted firms hit by the virus, with British Airways owner IAG rising 10% and Cineworld up 13.5%.

In the US, the Dow Jones Industrial Average hit a new high, after jumping about 1.6%. The wider S&P 500 increased almost 1.2% from Friday's record and the Nasdaq gained 0.8%.

Earlier, the UK's FTSE 100 share index closed about 1.6% higher, while the main market in Paris rose 1.7% and in Germany shares gained 0.5%.

Winners

Last week, stock markets enjoyed one of their best ever days when a vaccine by Pfizer/BioNTech raised hopes that the business world might return to normal next year. A number of other vaccines are also being developed.

The gains spurred by Moderna's news on Monday were more muted but still helped the MSCI World Index of global shares to rise further, climbing to a new record high.

Firms that have been hit most badly in the pandemic have seen the biggest rises. In the travel sector, cruise line Carnival jumped more than 10%, while Intercontinental Hotels closed almost 5% higher.

The prospect of an end to lockdowns also helped oil prices strengthen. Brent and West Texas Intermediate crude prices were up about 3%, and shares in energy companies also gained.

The price of gold - which is often seen as a safer asset in times of uncertainty - slipped 0.7% before recovering.

Terry Sandven, chief equity strategist at US Bank Wealth Management, said markets are being driven by a "tug-of-war between optimism over COVID-19 vaccine progress versus fear of economic slowing as COVID-19 cases continue to rise".

But he said low interest rates, stimulus and medical progress give him a "glass half-full" outlook.

"We expect equity prices to inch higher into year-end and 2021, with increased volatility being more the norm than exception," he said,

Until vaccines can be rolled out, rising cases of the coronavirus were a risk, said Morgan Stanley strategists in a research note to investors.

But the investment bank urged shareholders to "keep the faith... We think this global recovery is sustainable, synchronous and supported by policy".--BBC

EU budget blocked by Hungary and Poland over rule of law issue

Hungary and Poland have blocked approval of the EU's budget over a clause that ties funding with adherence to the rule of law in the bloc.

The package includes €750bn (£673bn; $888bn) for a Covid recovery fund.

Ambassadors of the 27 member states meeting in Brussels were unable to endorse the budget because the two countries vetoed it.

Hungary and Poland have been criticised for violating democratic standards enshrined in the EU's founding treaty.

The EU is currently investigating both countries for undermining the independence of courts, media and non-governmental organisations. The clause threatens to cost them billions of euros in EU funding.

EU states had already agreed on the €1.1tn budget for 2021-2027, and the coronavirus stimulus package after a marathon four-day summit in July.

The ambassadors had voted through the clause that made access to EU funds conditional on adherence to the rule of law, because it only required a qualified majority, the German EU presidency said.

But the budget and the rescue package needed unanimous support and were then blocked by Poland and Hungary.

This is a row that's come to a head after simmering for the past four months. It was back in July, when EU leaders first agreed to club together and raise almost €2tn to spend over the next seven years, as they try to recover from the financial crisis caused by Covid.

At the time, the agreement was hailed as a "magic moment" by the EU Council President Charles Michel, who said it was "unprecedented", because access to cash would be conditional on countries following the rule of law.

But Hungary and Poland haven't viewed the arrangement that way, and both countries have long been at loggerheads with the EU over perceived backsliding of core values.

On Monday, they refused to support the plan. Hungarian Prime Minister Viktor Orbán had sent a note in advance of the meeting, to German Chancellor Angela Merkel and French President Emmanuel Macron, making clear his intention, claiming the rule of law clause "jeopardises trust" between member states.

Final approval needs unanimity, and now the entire process hangs in the balance, with other member states making it clear they desperately need access to the money come January.

"We cannot support the plan in its present form to tie rule of law criteria to budget decisions," said Zoltan Kovacs, a spokesman for Hungarian Prime Minister Viktor Orbán.

Polish Prime Minister Mateusz Morawiecki threatened a veto last week.

On Monday, Polish Justice Minister Zbigniew Ziobro said the rule of law issue was "just a pretext".

"It is really an institutional, political enslavement, a radical limitation of sovereignty," he said.

But Austrian Chancellor Sebastian Kurz, addressing a conference shortly after the budget was blocked, said that "upholding the principles of the rule of law is an absolute necessity" because the sums being handed out by the EU to member states were so vast.

Romanian Prime Minister Ludovic Orban said the rule-of-law clause was an important protection to ensure taxpayer's money is "spent in a just and effective manner".

He called on EU states "to work together" adding: "We need to refocus and get this agreement done."

German ambassador Michael Clauss, who chaired the meeting, warned that the EU would face "a serious crisis" if the financial package was not quickly adopted.

"We have already lost a lot of time in view of the second pandemic wave and the severe economic damage," he said.

In a tweet, Johannes Hahn, EU-Commissioner for Budget and Administration, said he was "disappointed" by the veto.

He urged member states to "assume political responsibility and take the necessary steps to finalise the entire package".

"This is not about ideologies but about help for our citizens in the worst crisis since World War Two," he added.

The impasse will be debated by EU European affairs ministers on Tuesday and by EU leaders in a video-conference on Thursday. However, officials say a solution might take longer to find.--BBC

Elliott exits AT&T after waging a fight in 2019; Starboard exits eBay

BOSTON (Reuters) - Elliott Management, which last year took a $3.2 billion stake in AT&T T.N and pushed the company to sell some assets, has itself exited the telecommunications and media company, according to a regulatory filing on Monday.

The New York-based hedge fund liquidated its investment when it sold 5 million shares during the quarter that ended Sept. 30. It had first bought into the stock during the third quarter 2019, according to another filing.

Investment companies are required to say what U.S. stocks they own at the end of each quarter. While these filings are made with a delay, they often shed light on investment trends that are closely watched by other investors.

Elliott, which invests $41 billion and is known as one of the world’s busiest corporate activists, originally criticized AT&T for operational missteps and its takeover strategy as well as its choice of leaders. But by the time company veteran John Stankey succeeded AT&T’s long-time CEO, Randall Stephenson, as its chief in July, Elliott had come around to the choice.

Among its many investments, Elliott did not make any changes to its stake in eBay EBAY.O, another company where it pushed for changes in 2019. The filing shows that Elliott owned 9.9 million shares in eBay even after Jesse Cohn, the partner who runs Elliott's U.S. activism practice, stepped off its board in September.

Elliott won the eBay seat in March 2019.

Starboard Value, another influential activist investor, which also reached a settlement with eBay in early 2019 and was able to fill one seat on eBay’s board, sold off the rest of its stake during the third quarter, a filing shows.

The hedge fund sold 2,090,000 eBay shares after having already sold three quarters of its stake during the second quarter, filings showed.

Tesla to join S&P 500, spark epic index fund trade

(Reuters) - Tesla Inc is set to join the S&P 500 in December, a major win for Chief Executive Elon Musk that boosted the electric car maker’s shares 14% on Monday in anticipation of a $51 billion trade by index funds adjusting their holdings.

S&P Dow Jones Indices announced that the company would join the S&P 500 index prior to the opening of trading on Dec. 21, potentially in two tranches making it easier for investment funds to digest.

“(Tesla) will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history,” S&P Dow Jones Indices said.

With a stock market value over $400 billion, Tesla will be among the most valuable companies ever added to the widely followed stock market index, larger than 95% of the S&P 500’s existing components.

Its inclusion means investment funds indexed to the S&P 500 will have to sell about $51 billion worth of shares of companies already in the S&P 500 and use that money to buy shares of Tesla, so that their portfolios correctly reflect the index, according to S&P Dow Jones Indices. Tesla will account for about 1% of the index.

Additionally, actively managed investment funds that try to beat the S&P 500 will be forced to decide whether to buy Tesla shares. Such funds manage trillions of dollars in additional assets.

Up about 450% in 2020, the California car maker has become the most valuable auto company in the world, by far, despite production that is a fraction of rivals such as Toyota Motor, Volkswagen VOWG_p.DE and General Motors.

Many investors believe Tesla’s stock is in a bubble, and some have warned against adding it to the S&P 500 at current levels.

“(Monday’s) price jump means the retirees and other individual investors who put their money into index funds will see some of their money go into Tesla stock at a price even higher than its controversially high pre-S&P price. It’s a downside of index investing for conservative investors,” Erik Gordon, a professor at the University of Michigan’s Ross School of Business, warned in an email.

A blockbuster quarterly report in July cleared a major hurdle for Tesla’s potential inclusion in the S&P 500, leading to speculation that it might be added to the index and spark a surge in demand for its shares.

In 1999, Yahoo surged 64% in five trading days between the announcement that it would be added to the index on Nov. 30 and its inclusion after the close of trading on Dec. 7. Yahoo’s market capitalization at the time was about $56 billion, around a fraction of Tesla’s current value.

In a separate press release, S&P Dow Jones Indices asked investors for feedback about whether to include Tesla all at once on Dec. 21, or in two tranches, with the first added a week earlier, due to Tesla’s unusually large market capitalization.

Tesla short sellers point to looming competition from longer-established rivals. They are also skeptical of Tesla’s corporate governance under Musk, who in 2018 agreed to pay $20 million and step down as chairman to settle fraud charges.

BP files notices of possible worker layoffs in Chicago area

HOUSTON (Reuters) - BP Plc BP.L notified officials in Chicago and the state of Illinois of possible layoffs affecting more than 250 salaried employees at the company’s offices, BP said in a statement.

BP is also reviewing the organizational structure at its Whiting, Indiana, oil refinery 28 miles (45 km) southeast of Chicago.

BP’s U.S. Pipelines and Logistics office is located in Chicago and the company has a technology campus in the nearby suburb of Naperville, Illinois.

In June, BP Chief Executive Bernard Looney said the company would cut up to 10,000 jobs, or 15% of its 70,000-person workforce, worldwide.

In October, Reuters reported only 2,500 people had taken voluntary severance packages offered by BP and 7,500 people worldwide would have to be laid off.

Buffett's Berkshire bets on Big Pharma, invests in four drugmakers

(Reuters) - Warren Buffett’s Berkshire Hathaway Inc said on Monday it has begun investing in the stocks of four large drugmakers, betting on an industry that could benefit when the world begins emerging from the coronavirus pandemic.

In a regulatory filing detailing its U.S.-listed stock holdings as of Sept. 30, Berkshire disclosed $5.7 billion of new healthcare stakes, including more than $1.8 billion each in Abbvie Inc, Bristol-Myers Squibb Co, Merck & Co and $136 million in Pfizer Inc.

Shares of the drugmakers rose in after-hours trading.

The filing signals where Buffett and his portfolio managers Todd Combs and Ted Weschler see value. Buffett normally handles large investments for Berkshire’s $245.3 billion stock portfolio himself.

“COVID-19 has made us think differently about healthcare,” said James Armstrong, president of Henry H. Armstrong & Associates in Pittsburgh, which owns Berkshire stock.

“The sector has become more efficient as big drug companies partner with smaller, inventive rivals,” Armstrong added. “But you will always need companies with scale for manufacturing and distribution, including vaccines with global application.”

Berkshire did not immediately respond to a request for comment.

During the third quarter, Berkshire also took a $276 million stake in wireless phone company T-Mobile US Inc.

It sold a $1.3 billion stake in Costco Wholesale Corp, which benefited as people stocked up on groceries and home supplies during the pandemic, and pared holdings in four banks: JPMorgan Chase, Wells Fargo, PNC and M&T.

The stake in JPMorgan, where Combs is a director, fell by 96%.

Berkshire also bought more stock in the grocer Kroger, sold some stock in mining company Barrick Gold, and confirmed it bought more Bank of America stock while trimming its Apple stake.

The healthcare bet is structured similarly to the more than $6 billion wager that Buffett made on the four largest U.S. airlines.

Buffett sold Berkshire’s airline holdings in April, saying the pandemic had changed the industry and made its outlook uncertain.

Other new investments in the quarter included a $6 billion stake in five Japanese trading houses and a $1.5 billion wager on newly public data storage company Snowflake Inc.

Berkshire also has more than 90 operating units including Geico car insurance, BNSF railroad and Dairy Queen ice cream.

Nigeria: Oil Marketers Advises Against 'Group Fixing' of Petrol Price

The Major Oil Marketers Association of Nigeria (MOMAN), an umbrella body of petroleum products marketers in the country, has advised against 'group fixing' of petrol price by marketers associations.

The Chairman of MOMAN and Managing Director of 11Plc (formerly Mobil), Mr. Tunji Oyebanji, gave the advice in a chat with THISDAY, following the announcement of the new ex-depot petrol price by the Petroleum Products Marketing Company (PPMC).

PPMC, a subsidiary of the Nigerian National Petroleum Corporation (NNPC), had last Friday, announced in a circular to marketers that the ex-depot price had changed from N147. 67 to now N155.17, a move that triggered the hike in petrol pump price to around N170 per litre.

Following the rise in the ex-depot petrol price, the Independent Petroleum Marketers Association of Nigeria (IPMAN), announced, after its emergency national executive committee's meeting, that all marketers under its cartel should sell petrol between N168 and N170 per litre.

However, condemning any group fixing of petrol pump price, Oyebanji said in a deregulated environment, there should be no joint price fixing.

He said rather than group fixing of petrol price, each marketer should be allowed to fix its price after factoring in the ex-depot price and its margin in line with the template provided by the Petroleum Products Pricing Regulatory Authority (PPPRA).

According to him, MOMAN would not force its members to sell petrol at any joint fixed price as such was not in consonant with the spirit of free markets.

He said: "As you know, we have advocated that in a deregulated environment, there should be no joint price fixing. We should actually be condemning what those other groups are doing.

"However, the answer to your question is that for MOMAN, my expectation is that members using the ex-depot price as base and adding the various margins in the PPPRA template, will come up with their individual prices.

"This is in the spirit of free markets and competition. We cannot discuss any pricing issues among ourselves. This is part of the self-regulation we have been advocating in recent fora."-This Day.

Nigeria: 2021 Budget - NJC Seeks More Funding for Judiciary

The NJC says more judges have been appointed to the Supreme Court and others and that requires money.

The National Judicial Council (NJC) has appealed to the legislature and executive to increase the funding for the judiciary in line with the realities of the times.

The executive secretary of the council, Ahmed Saleh, stated this on Monday during a budget defence session with the House of Representatives Committee on Justice.

The NJC appeared before the house alongside the Supreme Court of Nigeria; the Court of Appeal; the Federal High Court; the National Industrial Court of Nigeria; the Federal Judicial Service Commission; and the National Body of Benchers.

Mr Saleh advocated for an increase in budgetary allocations. He stated some of the challenges facing the judiciary include the non-disbursement of the financial relief promised in the wake of the pandemic.

He said over 75 per cent of budgeted funds in 2020 were accessed.

He also stated that the Supreme Court has increased its judges from 12 to 20 which according to him requires more expenses.

"The Supreme Court was expanded to 20, the Court of Appeal and FHC is in the process of appointing 20 additional judges," he said.

He said the COVID-19 pandemic caused the judiciary to continue to leverage on ICT "which requires more money".

Response

Responding to the demand, chairman of the House committee on justice, Anefiok Luke, assured that the house would look into their appeal "and ensure the right thing is done".

He said the committee is committed to seeing the country's justice system excel.

He noted that the pandemic slowed down services in addition to the threats posed to the lives of judges and the vandalism of court infrastructure by hoodlums during the #EndSARs protests.

Describing the attacks on facilities by the hoodlums, who hijacked the protests, as condemnable, Mr Luke called for the establishment of a 'central server' for courts nationwide.

"The 9th House of Representatives, under the leadership of the Speaker Femi Gbajabiamila, and the House Committee on Judiciary, is highly committed to efficient justice delivery system of Nigeria, and will do all within its powers to ensure this is not compromised for the sustainability of human rights values," he said.

The judiciary is the third independent arm of government whose funds are budgeted under statutory transfers.

The judiciary controls its own budget but is under the supervision of the NJC.-Premium Times.

Rwanda: Govt to Recruit 580 Nursery Teachers

The number of teachers in pre-primary schools is set to be increased from the current 33 to 613 in this fiscal year, according to the ministry of education.

The Minister of Education, Valentine Uwamariya, made the disclosure on Monday, November 16, during a press conference on teachers' placement.

The minister also used the press conference to provide an update on the school reopening amidst the Covid-19 pandemic.

In 2019, there were 3,401 nursery schools in Rwanda of which 508 were public, 1,555 Government aided schools, and 1,338 private ones, according to figures from the 2019 Education Statistical Year Book by the Ministry of Education.

There were over 282,400 pupils in nursery schools in 2019, including over 41,600 in public, 125,600 in Government aided, and 115,120 in private schools.

The minister said that 107 teachers have already been placed, while the remaining ones are expected to be placed by the end of the financial year.

However, the ministry officials did not immediately provide the budget implications of this move.

"The government has been paying salary for 33 teachers only. Moving from 33 teachers to over 500, we have not yet reached the level we want... but, that is good progress because it means an increase of 10-fold," Minister Uwamariya said.

The move comes after Members of Parliament have, on multiple occasions, expressed concern over teachers in nursery schools who are not yet on government payroll.

MPs said that lack of permanent teachers was likely to impair the quality of pre-primary education in situations where parents cannot afford costly private schools.

Yet, they argued, pre-primary is the basis for other education levels.

For nursery teachers to get paid, parents had to make contributions and The New Times understands that in some cases, there are those who have been getting as little as Rwf10,000 per month.

"It is parents who have been making contributions to provide financial support to the teacher. But, we are happy that the nursery teachers are included in the public structure," the Minister said.

But, it voiced concern that it could not achieve that as a result of lack of means.

Meanwhile, about pre-primary education in Rwanda was about 20 per cent in 2018, and the Government targets to increase the rate to 45 per cent by 2024.-New Times.

Rwanda: Workers' Trade Unions Propose Scheme to Address Job Losses

Rwanda Workers' Trade Unions Confederation is assessing the possibility of establishing a 'Job Loss and Unemployment Benefit Scheme' that will be providing direct support to employees who lose their jobs.

The proposal is founded on the lessons learnt from the effects of Covid-19 impact that left many people unemployed.

The assessment that was carried out on 4, 150 establishments by the Ministry of Public Service and Labour between March and April revealed that only 2, 450 establishments continued to operate during lockdown while 1, 700 establishments temporarily suspended operations.

The study showed that these establishments had 94,509 employees and 54, 609 of them remained fully salaried as 1, 143 employees were put into partially salaried positions.

It indicated that there were 38, 757 employees who lost their full salaries.

Africain Biraboneye, the General Secretary of Trade unions Confederation said that this situation shows that despite the efforts made by the government, employers and trade unions, the labour market has been severely affected by lack of productivity and incomes.

Due to covid-19 pandemic, the unemployment rate picked the highest point in the history of Rwanda since 2016, he said.

He noted that due to the impact, many people who lost jobs had many unmet needs and despite food relief to the victims from government and other partners, other needs were not satisfied.

"Therefore by promoting saving culture, we are working with trade unions to assess the possibility of establishing a job loss and or unemployment benefit scheme," he said.

Biraboneye said that the fund could be contributed voluntarily by those in employment 'to save for the future loss of job'.

"This is expected to create security for future unemployment and increase socio-economic relevance of unions to their workers," he said.

He said the new scheme is relevant considering that Rwanda Social Security Board (RSSB) has not included a scheme to support employees who lose their jobs before the age of 60 years old.

"Employees who were laid off were not supported by any saving scheme such as RSSB and therefore a job loss benefit scheme is needed," he said.

Issue of employment contracts

He added that Trade Unions, the Ministry of Labour and Private Sector Federation should enhance compliance with written employment contracts.

"This is one of tools to enhance access to finance and save for the future," he added.

The government's Economic Recovery Fund, he said, should protect employment and provide new employment opportunities.

Leon Pierre Musanganwa, the programme coordinator at the Private Sector Federation (PSF) said that they are working with trade unions and Labour Ministry to ensure employers provide written employment contracts and that they set up saving schemes in their companies.

There are currently 185,700 members in trade unions.

Employers, employees speak out

Susan Mukanyandwi, a worker at UTEXRWA said that some workers were laid off while others remained at work but partially salaried.

"There is need to set up a platform for saving among employees," she said.

She urged employers to improve welfare of workers by also providing written employment contracts.

Arthur Murara, the General Manager at Pure Pro Rwanda said that he lost more than a half of workers due to Covid-19 impact.

"I had 27 workers but only 11 workers remained. 18 of these had written contracts but others had no contracts and these are the most that were laid off. Some companies do not provide written employment contracts because there is promising future and future assurance of their companies. But written contracts should be provided," he said.

He welcomed the proposed scheme to benefit job losers and unemployed persons.-New Times.

Nigeria: Prices of Bread, Cereals, Others Push Inflation Rate to 14.23% in October

The prices of bread, cereals and other foodstuffs pushed the inflation rate to 14.23 percent in October from the 13.71 percent recorded in September.

The consumer price index (CPI) report published Monday by the National Bureau of Statistics (NBS) showed that price increases were recorded in all divisions that yielded the headline index.

The composite food index rose by 17.38 percent in October 2020 compared to 16.66 percent in September 2020.

"This rise in the food index was caused by increases in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits, Vegetable, alcoholic and food beverages and Oils and Fats," the report stated.

Analysis of the report showed that on a month-on-month basis, the headline index increased by 1.54 percent in October 2020, this is 0.06 percent rate higher than the rate recorded in September 2020 (1.48 percent).

The percentage change in the average composite CPI for the twelve months period ending October 2020 over the average of the CPI for the previous twelve months period was 12.66 percent, showing a 0.22 percent point rise from 12.44 percent recorded in September 2020.

The report revealed that urban inflation rate increased by 14.81 percent (year-on-year) in October 2020 from 14.31 percent recorded in September 2020, while the rural inflation rate increased by 13.68 percent in October 2020 from 13.14 percent in September 2020.

On a month-on-month basis, the urban index rose by 1.60 percent in October 2020, up by 0.04 from 1.56 percent recorded in September 2020, while the rural index also rose by 1.48 percent in October 2020, up by 0.08 from the rate recorded in September 2020 (1.40 percent).

The corresponding twelve-month year-on-year average percentage change for the urban index is 13.29 percent in October 2020.

This is higher than 13.07 percent reported in September 2020, while the corresponding rural inflation rate in October 2020 is 12.09 percent compared to 11.86 percent recorded in September 2020.

On food inflation, analysis showed that on a month-on-month basis, the food sub-index increased by 1.96 percent in October 2020, up by 0.08 percent points from 1.88 percent recorded in September 2020.

The average annual rate of change of the Food sub-index for the twelve-month period ending October 2020overtheprevioustwelve-monthaveragewas15.42percent,representinga0.29 percent points from the average annual rate of change recorded in September 2020 (15.13) percent.

Meanwhile, the core inflation, which excludes the prices of volatile agricultural produce stood at 11.14 percent in October 2020, up by 0.56 percent when compared with 10.58 percent recorded in September 2020.

On a month-on-month basis, the core sub-index increased by 1.25 percent in October 2020. This was up by 0.31 percent when compared with 0.94 percent recorded in September 2020.

"The highest increases were recorded in prices of Passenger transport by air, Hospital and Medical services, Passenger Transport By Road,Pharmaceuticalproducts,Motorcars, Vehicle Spare Parts,Maintenanceand repair of personal transport equipment, Hairdressing salons and personal grooming establishments, Miscellaneous services relating to the dwelling, Paramedical services and shoes and other footwear," the report stated.-Daily Trust.

Nigeria's Inflation Hits 14.23% - a 30-Month High

All-item inflation was the highest in Sokoto, Edo, and Akwa Ibom while Oyo, Taraba, and Jigawa river recorded the slowest rise.

Nigeria's inflation rate has climbed to a 30-month high, as it rose further to 14.23 percent in October, the latest figures by the National Bureau of Statistics (NBS) has shown.

The report published on the website of the bureau shows that the new inflation rate is 0.52 percent points higher than the rate recorded in September 2020 (13.71 per cent).

The figure rose by 1.54 percent between September and October, indicating a 0.06 percent rate higher than the rate of rise between September and August (1.48 percent).

Nigeria's inflation has been on the rise since the country shut its land borders. The situation became worse with the emergence of the coronavirus which affected the global economy.

The economy is yet to recover from the coronavirus effects and the plunge in crude prices.

In the report, the composite food index rose by 17.38 per cent in October 2020 compared to 16.66 per cent in September 2020.

This rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam, and other tubers, meat, fish, fruits, vegetables, alcoholic and food beverages, and oils and Fats.

"The "All items less farm produce" or Core inflation, which excludes the prices of volatile agricultural produce stood at 11.14 percent in October 2020, up by 0.56 percent when compared with 10.58 percent recorded in September 2020," it said.

"The highest increases were recorded in prices of Passenger transport by air, Hospital and Medical Services, Passenger transport by road, Pharmaceutical products, Motor cars, Vehicle spare parts, Maintenance and repair of personal transport equipment, Hairdressing salons and personal grooming establishments, Miscellaneous services relating to the dwelling, Paramedical services, and shoes and other footwear."

Inflation in states

In October, all-item inflation was the highest in Sokoto, Edo, and Akwa Ibom while Oyo, Taraba, and Jigawa river recorded the slowest rise in headline Year on Year inflation.

For food inflation, Kwara, Edo, and Sokoto recorded the highest while Oyo, Jigawa, and Taraba recorded the slowest rise on a month on month inflation.-Premium Times.

Africa: Zambia's Debt Default - A Lose-Lose Situation

It’s almost a year since the start of the COVID-19 pandemic, and no country has been spared the brutal economic and social impact.

While we’ve seen G20 countries mobilising more than $11 trillion  in stimulus packages and printing additional money to combat COVID-19 in their own countries, others have struggled. Some of the world’s poorest countries don’t have the liquidity available to keep their economies afloat, tackle the emergency COVID-19 response, and provide social safety nets for the most vulnerable.

This is the case with Zambia.

Even before the pandemic, Zambia — Africa’s second-biggest copper producer — has struggled with its finances and debt. The country owes $11.1billion in private, bilateral and multilateral debt. For months, it has faced the difficult choice between making debt repayments, or keeping its economy afloat and investing in healthcare. While Zambia was eligible for debt service suspension from some of its bilateral creditors under the G20 Debt Service Suspension Initiative, this has had limited impact because of the composition of the country’s debt.

Zambia requested other international creditors to follow suit, especially the private bondholders, who own 27% of the country’s debt and to whom Zambia owes $120 million in interest payments but to no avail. As no agreement has been reached on its request for a six-month delay on interest payments, Zambia today becomes the first African country to default on its loans since the start of the pandemic.

The cost is high.

Defaulting gives Zambia a reputation for financial unreliability and could also trigger an economic crisis.

As a high-risk borrowing country, Zambia’s credit rating will be downgraded, making it more costly to raise funds, unless a new agreement is reached with bondholders. Other international creditors may also want to re-negotiate their debt deal and even make separate arrangements with Zambia. For some, this will be to help them get back on track; but for others, it is a priority to ensure they maximise their debt repayment. The biggest concern is that some of it will likely be under unfavourable terms for the country.

Here, transparency is critical. Questions about exactly how much the country owes to China has strengthened the case for bondholders’ reluctance to come to the negotiating table. But transparency is also critical for the responsible management of loans. In 2016, Mozambique defaulted on its infamous ‘tuna bond’ payment, which had started out as a secret loan. The default triggered an economic crisis, currency collapse and withdrawal of IMF and donor support.

While Zambia’s debt buildup predates the COVID-19 pandemic, the bottom line remains: at a time when Zambia is trying to manage the shock of COVID-19, the relentless pressure from international creditors, especially private creditors, is wrong and economically shortsighted.

This is a lose-lose situation - not only will the inability to borrow cheaply have a significant impact on Zambia’s path to recovery, but it may also take years before international creditors agree to a new debt payment plan. A prosperous country with economic growth is more likely to pay back and borrow more than a country declaring bankruptcy.

It may be too late for Zambia now, but we must ensure that other countries with a high probability of defaulting on their loans next year, such as Iraq, Sri Lanka, Angola and Gabon, won’t be faced with the same fate as Zambia.

Next weekend, the world’s biggest economies will come together and formally endorse the common framework on debt restructuring to help avoid this lose-lose situation. In order for it to work, however, all creditors — bilateral, multilateral and private — must join forces.

The COVID-19 pandemic must be seen and treated as a ‘force majeure’ to give poorer debtor countries the opportunity to adjust their fiscal positions to meet debt obligations. The current situation is definitely worse than the 2008 financial crisis but has been treated with less urgency and attention it deserves.

Zambia may be the first country to default since the start of the pandemic, but if international creditors can’t work together, it certainly won’t be the last.

Invest Wisely!

Bulls n Bears 

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

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INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Simbisa Brands

AGM

SAZ, Northend Close, Borrowdale, Harare as well as virtually on: https:/escrowagm.com/eagmZim/Login.aspx

20/11/2020 | 8:15am

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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