Major International Business Headlines Brief::: 26 November 2020

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Major International Business Headlines Brief::: 26 November 2020

 


 

 


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ü  Coronavirus: Shanghai rises to become world's most connected city

ü  Australia's biggest telco fined over indigenous contracts

ü  US-China trade war: Trump gives one last twist

ü  Disney to lay off about 32,000 workers in first half of 2021

ü  Asian shares advance as vaccine, recovery hopes triumph soft U.S. data

ü  Jobless aid for nearly 14 million Americans to expire the day after
Christmas

ü  U.S. grants ByteDance new seven-day extension of TikTok sale order:
filing

ü  Wall Street banks slam lending proposal as 'unworkable' and 'political'

ü  Japan's export credit agency to lend $2 billion to Nissan for U.S. sales
financing

ü  Nigeria: How Nigeria Will Exit Recession - Finance Minister

ü  Nigeria: Kaduna Inland Dry Port Is the Only Functional Dry Port in the
Nigeria - Acci

ü  Nigeria: FG Targets 250,000bpd of Petroleum Product From Modular
Refineries

ü  Nigeria: Investment Risks - What Nigerian Investors Must Watch Out for

ü  Tanzania: Crdb Bank Women Loan Reaches 600bn/-

ü  Tanzania: Lack of Locomotives to Push Up Tanga Cement Production Cost

ü  Tanzania: Director - Govt Working On Cassava Demand Rise

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


Coronavirus: Shanghai rises to become world's most connected city

Shanghai has dethroned London to become the world's most connected city as
the coronavirus shakes up international travel.

 

London has seen a 67% fall in connectivity in air travel, according to
airline industry body IATA.

 

Shanghai has risen up the ranks, and the world's four most connected cities
are now all in China.

 

IATA says the pandemic has "undone a century of progress" for connectivity
between cities.

 

"The dramatic shift demonstrates the scale at which the world's connectivity
has been re-ordered over the last months," said Sebastian Mikosz, a
spokesman for the International Air Transport Association (IATA).

 

Large transport hubs including London, New York and Tokyo have been hit hard
by the dramatic reduction in flights in and out of their cities.

 

"There are no winners, just some players that suffered fewer injuries. In a
short period of time we have undone a century of progress in bringing people
together and connecting markets," he added.

 

Air travel within China has broadly recovered and during its Golden Week
holiday season 425 million people travelled around the country, according to
the Chinese tourism ministry.

 

China has also been gradually opening up travel corridors and discussing
quarantine-free travel agreements with a number of countries including Japan
and Singapore.

 

The top four most connected cities in the world are now Shanghai, Beijing,
Guangzhou, and Chengdu.

 

Earlier this week, Chinese President Xi Jinping called for a "global
mechanism" that would use QR codes to open up international travel.

 

Big fallers

But the rest of Asia hasn't fared so well. Thailand's capital Bangkok and
Hong Kong have both seen a steep 81% drop in connectivity.

 

IATA's air connectivity index measures how well connected a country's cities
are to other cities around the world, which is critical for trade, tourism,
investment and their economies.

 

media captionStephen McDonell explores 'the new normal’ in Beijing as it
adapts to life with coronavirus

The organisation estimates that 46 million jobs supported by air transport
are in peril.

 

Over the last two decades the number of cities directly linked by air has
more than doubled while travel costs have fallen significantly.

 

"Prior to the Covid-19 pandemic, the growth in air connectivity was a global
success story," added Mr Mikosz.--BBC

 

 

 

Australia's biggest telco fined over indigenous contracts

Australia's largest telco faces a A$50m (£27.5m ; $37m) fine over its sale
of mobile contracts to vulnerable indigenous customers.

 

The fines relate to 108 indigenous customers who paid for contracts they
could neither understand nor afford.

 

Australia's consumer watchdog accused Telstra of "unconscionable conduct"
for the sales.

 

Telstra apologised and agreed to waive debts, refund money paid and reduce
the risk of similar conduct in the future.

 

"This case exposes extremely serious conduct which exploited social,
language, literacy and cultural vulnerabilities of these Indigenous
consumers," the chairman of the Australian Competition and Consumer
Commission (ACCC) Rod Sims said in a statement.

 

The ACCC said Telstra admitted that staff at five stores used "unfair
selling tactics and took advantage of a substantially stronger bargaining
position when selling post-paid mobile products on behalf of Telstra".

 

The ACCC said sales staff did not provide an adequate explanation of the
customer's financial exposure under the contracts.

 

In many cases, the customers only spoke English as a second or third
language.

 

Staff also manipulated credit assessments, and in some cases falsely
indicated that a customer was employed, so that consumers who otherwise may
have failed its credit assessment could enter into post-paid mobile
contracts, the ACCC added.

 

"For example, one consumer had a debt of over A$19,000; another experienced
extreme anxiety worrying they would go to jail if they didn't pay; and yet
another used money withdrawn from their superannuation towards paying their
Telstra debt," Mr Sims said.

 

The contracts left customers with serious debts that they struggled to
repay.

 

The average debt per consumer was more than A$7,400.

 

The contracts were signed between 2016 and 2018 at licensed Telstra stores
in Alice Springs, Darwin, Adelaide, and Broome, in Australia's far
northwest.

 

Telstra's senior executives were unaware of the sales practices when they
occurred, according to the ACCC, but the company has acknowledged that it
had no effective systems in place to detect or prevent this type of conduct.

 

"It failed to act quickly enough to stop it, and these practices continued
and caused further, serious and avoidable financial hardship to Indigenous
consumers," Mr Sims said.

 

'We did not get this right'

The company also said it would improve its existing compliance program,
review and expand its Indigenous telephone hotline and enhance its digital
literacy program for consumers in certain remote areas.

 

"I apologise to those we have failed. We did not get this right and we need
to fix that. And for this, I take full accountability," Telstra's Chief
executive Andrew Penn said in a Tweet.

 

 

media captionHow Orange's mobile services are bridging the digital divide

Mr Penn said he visited some of the affected communities in person earlier
this year to better understand the impact of what had happened.

 

The ACCC said Telstra had agreed to consent to orders that would support a
A$50 million penalty, but the matter must first go before Australia's
Federal court.

 

The penalties would be the second highest ever imposed under Australian
Consumer Law.--BBC

 

 

 

US-China trade war: Trump gives one last twist

The US will slap tariffs on Chinese twist ties, which are commonly used to
seal bread bags and tie up cables.

 

The US said that China has been unfairly subsidising twist ties to the
disadvantage of American producers.

 

This is the first time the US Commerce Department will impose tariffs to
reduce the impact of China's currency.

 

The department said China's undervalued currency makes Chinese twist ties
cheaper to US consumers, at the expense of its own producers.

 

"The Department of Commerce will continue to use the legal tools at our
disposal to aggressively counter currency undervaluation and other unfair
subsidies, further ensuring a level playing field for American businesses
and workers," Commerce Secretary Wilbur Ross said in a statement.

 

The company that made the original complaint - Bedford Industries from
Worthington, Minnesota - primarily makes twist ties that are used to package
or reseal baked goods, coffee and vegetables.

 

Its products are mainly found in supermarkets across the US.

 

In a blog post from earlier this year, Bedford argued that the growing
market share of Chinese producers would have been "unobtainable through fair
competition".

 

China pledges to open up its 'super-sized' economy

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

The decision comes as the President-elect Joe Biden prepares to take over
from President Donald Trump.

 

Mr Trump's administration has been hostile to China on trade, ratcheting up
tariffs and restricting Chinese technology companies on national security
grounds.

 

The Department of Commerce says it has initiated 306 new investigations
under Mr Trump, a 283% increase from the comparable period in the previous
administration.

 

It's not yet clear what changes Mr Biden will bring to trade policy,
although he has said he would work with other democracies to "set the rules
of the road" on trade.

 

Twisting currency rules

The value of imported twist ties is minimal, amounting to an estimated
$4.15m (£3.1m) last year and $6.8m (£5m) the previous year.

 

In fact, the US government doesn't even keep statistics on the import of
twist ties, so the estimate was provided by Bedford itself.

 

However, the twist ties case could set a precedent, because it takes the
unusual step of taking currency into account, something that has only been
allowed under the department's rules since earlier this year.

 

The US Department of Commerce said it will impose "countervailing" duties on
Chinese twist ties, which are designed to offset subsidies that Chinese
exporters and producers receive from their government.

 

Chinese exporters receive subsidies of 122.5% when the impact of "China's
undervalued currency" is taken into account, according to the department.

 

Separately, the US treasury dropped its designation of China as a currency
manipulator earlier this year.

 

The yuan is currently at its highest value against the US dollar since 2018.

 

The duties will go into effect in April, after the US International Trade
Commission makes a final decision on the issue.--BBC

 

 

 

Disney to lay off about 32,000 workers in first half of 2021

(Reuters) - Walt Disney Co said on Wednesday it would lay off 32,000
workers, primarily at its theme parks, an increase from the 28,000 it
announced in September, as the company struggles with limited customers due
to the coronavirus pandemic.

 

The layoffs will be in the first half of 2021, the company said in a filing
with the Securities and Exchange Commission.

 

Earlier this month, Disney said it was furloughing additional workers from
its theme park in Southern California due to uncertainty over when the state
would allow parks to reopen.

 

Disney’s theme parks in Florida and those outside the United States reopened
earlier this year without seeing new major coronavirus outbreaks but with
strict social distancing, testing and mask use.

 

Disneyland Paris was forced to close again late last month when France
imposed a new lockdown to fight a second wave of the coronavirus cases.

 

The company’s theme parks in Shanghai, Hong Kong and Tokyo remain open.

 

Disney did not respond to a Reuters request for comment on whether the
28,000 layoffs announced earlier were included in the latest figure, but a
spokesperson for the company confirmed to Variety that the figure includes
the previously announced number.

 

 

 

Asian shares advance as vaccine, recovery hopes triumph soft U.S. data

TOKYO (Reuters) - Asian shares advanced on Thursday as market euphoria over
COVID-19 vaccines and expectations a Biden administration would deliver more
economic stimulus and political predictability overrode a slate of weak U.S.
economic data.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.39% while
Japan’s Nikkei gained 0.91%.

 

European stock futures eked out gains of 0.30% before the start of cash
equity trading.

 

MSCI’s broadest gauge of the world’s shares covering 49 markets added 0.15%,
bringing gains so far this month to 12.8%, on course for a record monthly
increase.

 

The rally started after Democrat Joe Biden’s U.S. election victory earlier
this month raised hopes for more government spending to support the
pandemic-hit economy and for more policy predictability after four years of
Donald Trump’s presidency.

 

“Reduced policy uncertainties are helping markets. It will be easier for
companies to make capital expenditures,” said Arihiro Nagata, general
manager of global investment at Sumitomo Mitsui Bank.

 

“It’s true that stock prices are quite expensive but markets are finding
fewer and fewer reasons to sell them. In this environment, you can’t make
profits by selling. The only question to ask is what assets you should buy.”

 

U.S. S&P 500 future rose 0.2% in Thursday’s Asian trade while Nasdaq futures
rallied 0.4%.

 

On Wall Street on Wednesday, the S&P 500 index shed 0.16% and the Dow Jones
Industrial Average 0.58%, though the tech-heavy Nasdaq Composite increased
0.47%.

 

Traders attributed the brief softness in S&P 500 and the Dow Jones to weak
U.S. economic data.

 

Figures from the U.S. Labor Department’s weekly jobless claims suggested
that an explosion in new COVID-19 infections and business restrictions were
boosting layoffs and undermining a recovery.

 

But with more than 20 million people on jobless benefits, investors bet the
Federal Reserve will have no choice but to keep its ultra-easy policy to
support the pandemic-stricken economy.

 

Minutes from the Fed’s last policy meeting showed policymakers consider
giving markets a better steer on how long they will continue to buy bonds to
support an economy under siege from new coronavirus infections.

 

“It’s somewhat out of character that they mention taking this step ‘fairly
soon’ when they haven’t begun a discussion of this with the public,” wrote
Michael Feroli, chief U.S. economist at J.P. Morgan in New York.

 

The Fed could extend the maturity of its Treasury purchases if its board
members judge that deterioration in the pandemic warrants more policy
accommodation, he added.

 

In commodities, oil prices rose for a fifth day as a surprise drop in U.S.
crude inventories added to the positive mood stemming from hopes of demand
recovery. [O/R]

 

U.S. crude rose 0.46% to $46.06 per barrel and Brent gained 0.51% to $48.86.

 

In the currency market, the U.S. dollar stayed under pressure as riskier
currencies benefited from the increased optimism.

 

The dollar’s index against a basket of major currencies dipped 0.07% to
91.919, hitting its lowest levels in almost three months.

 

The euro held firm at $1.1929 while sterling also stood near three-month
high at $1.3389.

 

The yen was little moved at 104.34 yen to the dollar.

 

Trade was slow as U.S. financial markets will be closed on Thursday for the
Thanksgiving holiday. U.S. bonds and stocks will trade on a partial schedule
on Friday.

 

Bitcoin fell 4% to $17,909, pulling off from a near-three-year high touched
the previous day. Still, the crypto-currency sits on gains of about 30% so
far this month.--BBC

 

 

 

Jobless aid for nearly 14 million Americans to expire the day after
Christmas

(Reuters) - The number of Americans receiving unemployment benefits under
pandemic programs set to expire the day after Christmas continued to rise in
early November, according to a Labor Department report released Wednesday.

 

That means millions of families will see income fall sharply in the middle
of the holiday season, making it harder for them to afford rent, groceries
and other necessities.

 

As of Nov. 7, the most recent data available, a total of 13.7 million people
were receiving unemployment benefits through emergency CARES Act-related
programs expiring Dec. 26. That is up from 13.1 million for the week ending
Oct. 31.

 

 

While some people may find jobs before their benefits run out, rising
coronavirus infections threaten to dampen holiday hiring, slow the economic
recovery and increase job losses.

 

The virus has killed more than 257,000 Americans and infections and
hospitalizations are soaring. The number of people claiming jobless benefits
for the first time rose last week for the second week in a row.

 

The majority of people receiving emergency benefits, or 9.1 million, are
enrolled in pandemic unemployment assistance (PUA), which expanded
unemployment benefits to freelancers and self-employed people who wouldn’t
usually qualify for this aid.

 

Some 4.5 million people collect pandemic emergency unemployment compensation
(PEUC), which provides 13 extra weeks of benefits for people who have
exhausted state benefits. Enrollment is growing steadily as more people use
up their regular benefits, which last for up to 26 weeks in most states.

 

Both those programs expire on Dec. 26. Congress has not been able to agree
on another round of fiscal stimulus to replace them. Democrats want more
than $2 trillion in new benefits and Republicans favor a narrower bill that
shields companies whose employees catch COVID-19 on the job from liability.

 

 

 

U.S. grants ByteDance new seven-day extension of TikTok sale order: filing

WASHINGTON (Reuters) - The Trump administration on Wednesday granted
ByteDance a new seven-day extension of an order directing the Chinese
company to sell its TikTok short video-sharing app, according to a court
filing.

 

The administration previously had granted ByteDance a 15-day extension of
the order issued in August, which was set to expire Friday. President Donald
Trump on Aug. 14 had directed ByteDance to divest the app within 90 days.

 

The new deadline is Dec. 4, TikTok said in the filing. 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.

 

TikTok declined to comment beyond the filing.

 

ByteDance has made a new proposal aimed at addressing the U.S. government’s
concerns, said a person briefed on the matter who declined to detail that
proposal.

 

A U.S. Treasury representative said the extension was granted to review a
recently received “revised submission”.

 

ByteDance made the proposal after disclosing on Nov. 10 that it had
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.”

 

Separate restrictions on TikTok from the U.S. Commerce Department have been
blocked by federal courts, including transaction curbs that TikTok said
could effectively ban the app’s use in the United States.

 

A Commerce Department ban on Apple Inc and Alphabet Inc’s Google offering
TikTok for download for new U.S. users that had been set to take effect on
Sept. 27 has also been blocked.

 

 

Wall Street banks slam lending proposal as 'unworkable' and 'political'

WASHINGTON (Reuters) - Major U.S. banks on Wednesday pushed back on a
proposal to bar them from snubbing controversial business sectors, such as
oil and gas giants, in an unlikely turn of events that has pitched Wall
Street against one of the Trump administration’s industry-friendly
regulators.

 

In a letter to Acting Comptroller of the Currency Brian Brooks, the Bank
Policy Institute (BPI) asked for more time to assess the “unprecedented”
proposal and requested to see data the agency used to assess its economic
impact.

 

The letter was signed by three other major Washington bank groups, which
combined represent dozens of major lenders including JPMorgan Chase & Co.,
Bank of America Corp. Goldman Sachs and Morgan Stanley.

 

Last week, the Comptroller proposed a rule ensuring “fair access” to bank
services for all types of legal businesses, based on a specific customer
risk-assessment rather than broad client categories. It applies to the
largest banks that may wield pricing power over sectors of the economy.

 

The proposal aims to address concerns among Republicans and business groups
that oil and gas majors are being deprived of funding as banks come under
increasing investor pressure to curb lending to controversial sectors.

 

“It’s a completely unworkable government mandate designed to address a
particular political problem but would by its terms require every covered
bank to offer every financial product to every business and consumer in the
country,” John Court, general counsel at BPI said. He said the agency
doesn’t appear to have the legal authority to propose such a sweeping rule.

 

Banks have a relatively short 45-day period to review the proposal if
Brooks, who is seen by Democrats and consumer groups as too
industry-friendly, doesn’t permit more time.

 

Two industry executives said they believed Brooks, who is expected to be
nominated of for the permanent Comptroller role shortly, is trying to
fast-track the rule before Democratic President-elect Joe Biden takes office
in January.

 

“Given that this rule formalizes guidance that has been issued and
reinforced by the OCC since at least 2014, we are surprised that the banks
are surprised,” said a spokesman for Brooks, adding the agency looked
forward to reviewing all comments.

 

 

 

Japan's export credit agency to lend $2 billion to Nissan for U.S. sales
financing

TOKYO (Reuters) - Japan’s state-owned export credit agency has agreed to
give Nissan Motor Co up to $2 billion as part of a credit agreement to help
it finance car sales in the United States.

 

The money is part of a $4.1 billion credit agreement for Nissan Motor
Acceptance Corporation, a unit of Nissan North America, Japan Bank of
International Cooperation (JBIC) said in a press release on Wednesday.

 

The money should help the Japanese company sell cars in the world’s
second-biggest automarket after China by allowing it to provide customers
with loans that they can repay in monthly instalments, the export credit
agency added in the statement.

 

The United States “is an important market for Japanese automobile
manufacturers. Sales finance has become an important tool in business
strategy”, JBIC said.

 

“This case provides financial support for Nissan’s overseas business
development,” it added.

 

JBIC has provided loans for overseas sales financing to other automakers,
including a $78 million October agreement with Honda Motor Co in Brazil, and
one in September for Toyota Motor Corp in South Africa. JBIC did not
disclose the amount for that deal.

 

The latest agreement with Nissan is more than three times as much as a $582
million loan extended by JBIC in July to help it finance car sales in
Mexico.

 

A JBIC spokesman said the government export credit agency applied the same
lending standards as private banks.

 

Nissan, Japan’s third-largest automaker, is focusing on key markets as it
pulls back from the rapid expansion led by ousted Chairman Carlos Ghosn.

 

It is looking to raise market share with new models in the United States,
China and Japan as they rebound from a demand slump triggered by the
COVID-19 pandemic.

 

“We have financing from a variety of different ways and JBIC is one of
them,” a Nissan spokeswoman said.

 

This month, Nissan cut its operating loss forecast for the year to March
2021 by 28%, albeit still to a record of about 340 billion yen ($3.2
billion), helped by a rebound in demand, particularly in China.

 

 

 

Nigeria: How Nigeria Will Exit Recession - Finance Minister

The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed,
on Wednesday, said the country hopes to quickly exit recession and save her
economy through rigorous implementation of the Economic Sustainability Plan
(ESP).

 

Hajiya Ahmed said this while fielding questions from State House reporters
after the weekly Federal Executive Council (FEC) meeting chaired by
President Muhammadu Buhari.

 

The minister said the government had designed the ESP to help fast-track
exit from the anticipated economic crisis having anticipated the current
recession.

 

She said the plan is still very much on track and that the economy is
expected to come out of recession in the first quarter of 2021.

 

"The steps that were taken were a vigorous implementation of the Economic
Sustainability Plan. You will recall that the ESP was designed to be a 12
months plan, to act as a bridge between the ERGP and its successor plan, but
also it was designed specifically to help us quickly exit recession, which
we had projected was going to happen.

"So, the ESP implementation is really on course, it's focused and also the
implementation of the 2020 Budget is really on course and is very focused.
We have been able to release a large volume of capital funding into
ministries, departments and agencies, enabling a lot of public works going
on simultaneously all over the country.

 

"So, how we will maintain this is to make sure we continue to implement the
ESP as it is planned. It will help us exit recession, it will help us reset
back on the path of growth and on a road that is sustainable,"she said.

 

"We are not planning to retrieve the budget or to reverse the budget beyond
the work of appropriation that the National Assembly is currently doing in
consultation with us," she said with respect to the recession.

 

She also dismissed concerns over payment of federal workers' salaries.
"There's no issue with federal workers' salary. We have paid salaries for
November and we shall pay salaries for December so there's no issue at all
with federal workers' salary.

 

"If you hear about any issue, it is for agencies whose budgets funding on
the GIFMIS (Government Integrated Financial Management and Information
System) system was exhausted and we are about to make an adjustment to
them."

 

She said there were provisions for emergencies in the 2020 budget. "So, when
we have such a situation, what we simply do is remove funds from the
service-wide vote to the agency so that they pay their budget, so there's no
problem of payment of salaries at all."-Daily Trust.

 

 

 

Nigeria: Kaduna Inland Dry Port Is the Only Functional Dry Port in the
Nigeria - Acci

The Director, Policy and Advocacy Centre, Abuja Chamber of Commerce and
Industry, ACCI, Mr. Olawale Rasheed,has said that the Kaduna Inland Dry Port
is the only functional dry port in the Nigeria.

 

Mr. Rasheed spoke at one - day validation workshop on the report of
assessment study on dry ports operations in Nigeria organized by the Abuja
Chamber of Commerce and Industry ,in collaboration with Kaduna Inland Dry
Port and the German Development Agency (GIZ) on Wednesday in Kaduna.

 

According to him, the Kaduna Dry Port is a trail blazer, hence, her being
used as a case study for the report.

Olawale explained that with the critical challenges at Lagos and Eastern
ports , the strategic option was to develop a chain of inland container dry
ports to ease congestion, fast track hinter land trading and reduce cost of
doing business.

 

"On behalf of the leadership and management of Abuja Chamber of Commerce and
Industry, I welcome you all to this all important workshop designed to
review a landmark report on dry port operations in Nigeria. We are delighted
that despite all challenges, this event is holding with stakeholders firmly
in attendance.'

 

"The subject matter of our gathering here is pivotal to Nigerian short,
medium and long term economic revival. Amidst recession occasioned by the
global pandemic and oil market crash, building internal economic
infrastructure is a precondition for Post-Covid recovery."

 

"When the wider context of African Continental Free Trade regime is taking
into account, we realise the urgent need for Nigeria to expand and
strengthen her trade and commerce infrastructures. This is especially so in
the area of transportation and logistics. "

"With critical challenges at Lagos and Eastern ports , the strategic option
is to develop a chain of inland container dry ports to ease congestion, fast
track hither land trading and reduce cost of doing business.

 

"That is why a study of where we are on dry ports logistics is a timely
agenda which will assist the current administration in the onerous task of
post pandemic recovery. We are in search of best practices and a workable
model that can serve as a reference point for expanded development of dry
ports in Nigeria."

 

"For us at Policy Centre of Abuja Chamber of Commerce and Industry, this
project is a flagship, a step that will not only expand trade opportunities
but will enhance the capacity of Nigeria to diversify her economy by
encouraging non-oil exports."

"We must at this point commend our partners, the German Development Agency
(GIZ) , the European Union and others for their generous support for the
project. GIZ is specially recognised for her innumerable contributions to
Nigerian policy development in several sectors of the economy," he said.

 

Also, the management of the Kaduna Inland Dry Port has said that although
the establishment of inland dry port was to decongest seaports and create
economic activities within the Northern states, they were however faced with
some challenges

 

They therefore, called on the Federal Government to intervene.

 

One of the challenges, according to Kaduna Inland Dry Port manager, Mr.
Rotimi Raimi-Hassan, was that shipping companies were yet to key into the
dry inland port business and the lack of functional rail system.

 

He however, commended President Muhammadu Buhari and the Minister of
Transportation, Rotimi Amaechi for their efforts in trying to see that the
rail system functions.

 

According to him, a functional rail network from Kaduna to Port Harcourt and
to Lagos, would reduce transportation cost and boost the import and export
business.

 

He said a functional rail would reduce transportation cost for exporters and
importers in the Northern part of the country.

 

The one day workshop attracted participants from Abuja, Kaduna and other
places in the North where stakeholders in the inland dry port business,
abound.- Vanguard.

 

 

 

Nigeria: FG Targets 250,000bpd of Petroleum Product From Modular Refineries

The Federal Government is projecting an average of 250,000 barrels per day
petroleum product refining capacity through the establishment of modular
refineries.

 

A modular refinery is a simplified refinery requiring significantly less
capital investment than traditional full-scale refinery facilities. The
Minister of State for Petroleum Resources, Timipre Sylva, who made this
known at the inauguration of the 5,000 barrels-per-day Waltersmith Modular
Refinery and the groundbreaking for a 45,000-bpd plant in Imo State,
expressed its support to modular refiners in a bid to meet government's
target of becoming a net importer of petroleum products. He stated: "The
country is targeting 250,000 barrels per day refining through the Modular
Refinery roadmap.

 

"In ensuring this, the government has taken bold steps in stabilising the
downstream oil sector with removal of petroleum subsidy and transition to
deregulation of the sector. The idea is to free the market for private
sector participation and drive competition with better products and better
customer services."

 

Speaking also, President Muhammadu Buhari, added: "Government was willing to
provide necessary support to modular refiners as well as Waltersmith
refinery in a bid to grow the nations' economy."

 

He stated that the establishment of modular refineries was one of the four
key elements of his administration's refinery roadmap rolled out in 2018.

 

According to him, implementation of the initiative would make Nigeria a net
exporter of petroleum products.

 

Earlier, the Chairman, Waltersmith Group, Mr Abdulrazaq Isa, said the
refinery would deliver over 2.7 million litres of refined petroleum products
yearly, including kerosene, diesel, naphtha and heavy fuel oils, to the
domestic market.

 

He said, "The facility been commissioned has been designed to produce
271million litres of products annually. These products include AGO (Diesel),
DPK (Kerosene), HFO (Heavy Fuel Oil) and Naphtha. The evacuation of these
products in top quality and standards had commenced on November 3rd, 2020,
following statutory approvals granted by the DPR."-Vanguard.

 

 

 

Nigeria: Investment Risks - What Nigerian Investors Must Watch Out for

Nearly every investment instrument in the world has some level of risk
associated with it - some are less risky than others like mutual funds,
while some instruments like derivatives carry very high-risk elements -
which make them only suitable for experienced investors or speculators.

 

One cannot simply make an investment without considering the risk factors
involved in it. The level of risk can be different for each financial market
or instruments and can be mitigated by taking appropriate steps.

 

New as well as some of the experienced investors in Nigeria often make the
mistake of ignoring the risk factors associated with the concerned financial
instrument.

It is essential to identify each risk element and make a sound financial
plan before you start investing to achieve the financial objective
efficiently. Potential investors should also acknowledge the asset
allocation, risk tolerance, time horizon before making a financial plan and
making any investment decision.

 

Following are the common types of risks that can drastically affect your
investments.

 

Market Risk

 

An Investor can make a profit from the financial markets if he/she is able
to properly judge the future market patterns & the resulting market
movements are in favour of the investor.

 

The markets can also react in the opposite direction which may provide
losses to the investor. Market risk is the most common risk that exists in
most of the financial markets.

The severity or magnitude of the market risk depends upon the volatility and
the nature of the financial market or instrument.

 

Volatility Risk arising from market movements, Equity Risk of drop in share
value, Currency Risk arising from currency fluctuations in overseas
investments and Interest Rate Risk involving rise of interest rates causing
fall in bond prices are the common risks that affect capital market
investments like bonds and stocks.

 

While forex trading is affected by risks arising from forex market
volatility and underlying central bank interest rates, leverage,
transaction, counterparty and country. And then there are specific
Instrument related risks where the investors use highly leveraged complex
derivatives or instruments like CFDs.

 

Complex financial instruments like forex & CFDs carry a higher market risk
than other instruments. And bonds and fixed income securities carry lower
risk.

Most market risks can be mitigated through diversification, calculating risk
to reward before making an investment and by using other instrument specific
risk management strategies like stop loss, safe leverage etc.

 

Liquidity Risk

 

In financial markets, liquidity depicts the ease at which the owned asset or
security can be converted into cash.

 

Not every financial market allows the investor to buy or sell the
instruments at any moment. This inability to buy or sell the financial
instruments at a fair price at the desired time is referred to as liquidity
risk.

 

The seller might have to agree to sell at lower prices while the buyer has
to pay higher prices due to liquidity risk in the market.

 

The liquidity risk exists due to a lack of buyers or sellers in any of the
markets or inefficiency of the market or liquidity provider or broker. If
the buying and selling cannot be done at the desired time, then orders
cannot be executed at the desired price.

 

The investors must check the associated liquidity risk before making
investments in any of the financial markets.

 

Concentration Risk

 

If the whole investment amount is focused on one element of a single
instrument then there is a higher probability of facing severe losses.
However, if there is a large variety of financial instruments in the
portfolio then the correlation of the returns is reduced.

 

In other words, the losses of some of the instruments will be cancelled out
by the profits in other tools and there is a less probability of facing
unwanted outcomes.

 

Investors need to ensure that their investment portfolio is well-diversified
and involves different types of financial instruments from various sectors,
industries, counterparties, and countries.

 

But. it must be noted that over-diversification of the portfolio might
suppress the potential gains from a portfolio.

 

Inflation Risk

 

Inflation is the rise in the price or reduction in the buying power of money
over a prolonged time period. Most of the investments are done to counter
growing inflation and maintain the buying power of the money owned by
individuals.

 

However, the consistent rise in the price or inflationary environment might
overlap the returns provided by the chosen financial instrument. This might
lead to a reduction of buying power of the investment amount or lesser gains
than anticipation.

 

Bonds and fixed income securities are the most prone to inflation risk due
to low returns. Investors must ensure and monitor that their existing or
chosen financial instrument are offering higher return rate than the
potential future inflation rate.

 

Business Risks linked to particular entity or investment

 

Every investment done in any of the financial markets are received or
involved with an entity that can either be a business, person, government,
or institution. However, these entities can sometimes fail to deliver the
expected outputs due to multiple reasons related to the business, financial,
credit or default.

 

Like some businesses may have an uncertainty of income due to their business
nature like some business faced uncertainty during the Covid-19 crisis or
financial structure, while some bonds or borrowers have higher chances of
default or failing on their commitments resulting in poor credit ratings.

 

The inability of the entities to perform can result in fatal outcomes for
the investors which are regarded as a business risk in finance.

 

This type of risk exists in almost every financial market but can be
mitigated by choosing a trustworthy entity for investment and properly
analysing all factors that may affect their performance.

 

Political Risk

 

The government and its policies can greatly affect the price movements of
financial markets.

 

International relations, trade barriers, taxation policies, legislation, and
administrative restrictions play an important role in guiding the price
movements of financial markets.

 

If any of the policies or decisions made by the government goes against the
concerned financial market then it will negatively affect the price
movements of the financial instruments across multiple sectors in that
market.

 

Investors should watch out for the impact of government policies on the
chosen instrument to mitigate political risk.

 

Horizon Risk

 

The investment you made for the long term might need to be withdrawn before
the expected time horizon in case of an emergency or urgent need of those
funds due to reasons like loss of income.

 

The premature withdrawal might have a negative impact on the invested amount
if it is withdrawn at low price when markets are down or if penalty fees is
deducted from the amount as it is the case with some of the financial
instruments. Most of the bonds and fixed income securities charge penalty
fees for premature withdrawals.

 

The risk of facing unwanted losses or penalties due to withdrawals made
before the expected time horizon is called horizon risk.

 

One need to plan for emergencies before investing so that this risk can be
minimized.

 

Reinvestment Risk

 

It is the risk of not being able to re-invest the principal or returns or
the withdrawn amount at better rates due to the unavailability of a similar
or better investment option. Financial instruments that have short maturity
tenure or generate regular returns are prone to reinvestment risk.

 

This risk is common in Bonds or Bank deposits where the annual interest rate
falls and investors has to reinvest the returns or principal at low rates
every year.

 

To upkeep the buying power and enhance the value of the money earned after
investment, it is important to reinvest the withdrawn or gained amount in a
similar or better investment instrument.

 

Third-Party Risk

 

Also known as counterparty risk, third party risk is the risk that is
directly related to the broker or the investment manager. If the broker or
the investment manager is unregulated, not qualified or licensed, it can be
fatal for the investors as the counterparty can use the investment amount
for self-interest.

 

Apart from this, if the investment manager follows an investment style that
is not suitable for the investor, this will also incur third party risk as
the investor might not be able to get suitable outcomes.

 

To mitigate the third-party risk, investors need to make adequate efforts to
check the reviews, regulations, and licenses of the broker or the investment
manager.

 

Like If you are investing in securities then you must check that your broker
is authorized by NSE. While if you are investing in mutual funds you must
ensure that fund manager is authorized by SEC.

 

In case you are trading forex, you must look for forex broker that is
licensed with top tier regulators like FCA or ASIC or CySEC.

 

Foreign Investment Risk

 

Investments made outside investor's own country depend upon the market
trends, economy, and currency fluctuations of the country in which the
investment has been made. The local government policies, international
policies and currency risks may affect the price movements of such
investments & markets which often can be difficult to track for investors
investing abroad.

 

For example - This risk impacts Nigerian investors investing in securities,
forex or commodities abroad.

 

The risk of facing volatility in the investments due to foreign investments
is called foreign investment risk. Investors should avoid allocating a large
proportion of the investment amount in a foreign financial market or look
for mitigating such risks through hedging, diversification and proper
analysis.

 

Important: Review your existing investments & Understand Your Risk Tolerance

 

It is very important to understand all the risk elements that can affect
your investment to ensure good & stable returns from your investments.

 

Investors must evaluate their existing investments to check what risks can
affect them and ask themselves if they are comfortable taking these risks?

 

While making a new investment, investors should spend adequate time and
effort in analysing all the potential risk factors in the chosen financial
market & instrument and take the required steps to mitigate the risks with
sound risk management strategies.

 

One must only invest if they can afford to take the concerned
risks.-Vanguard.

 

 

 

Tanzania: Crdb Bank Women Loan Reaches 600bn/-

CRDB Bank has continued to empower women by providing loans issuance in its
bid to raise their social and economic wellbeing.

 

The lender has so far provided 600bn/- loans to over 55,000 women up to mid
this year through its Malkia (Queens) Account.

 

The bank move has thus received acknowledgement from the Mwanza Regional
Commissioner John Mongela during a one-day region women empowerment forum,
which was attended by 300 participants on Tuesday.

 

RC Mongela commended the lender for organising the forum and highlighted the
various opportunities offered by the bank to women.

 

"The government's intention is to continue creating a conducive business
environment for women to enable them participate fully in various
development activities in the community," he said.

Mr Mongela applauded CRDB for the recent move to reduce interest rates on
loans to women entrepreneurs, from 24 per cent to 14 per cent, saying it
will enable more women to borrow.

 

"Lowering interest rates means reducing the burden on women and making them
more likely to invest in their businesses, leading to greater success. "I
also applaud the bank for improving loan security terms. This way you're
opening more opportunities for many women to access loans," he said.

 

CRDB Procurement Director, Pendason Philemon said the account service aimed
at recognising, empowering and enabling women to achieve their goals through
business and entrepreneurship loans savings. The account members also
receive business operating training.

 

"By the end of June this year, the bank had already provided 600bn/- loans
to more than 55,000 women," said Mr Philemon, adding that over 30,000 women
have already joined the Malkia Account.

Pendason said despite the success that they have had in empowering women, a
small number of women have still been reluctant to access the services due
to interest rates, tight collateral conditions and lack of understanding of
financial services.

 

"Lower interest rates mean women can now borrow more and cheaper than
before, thus helping them achieve their goals quickly," Mr Philemon said.

 

Early this month, CRDB launched the 'Tupo Mtaani Kwako' (we are on your
street) campaign to encourage the use of banking services and entice more
clients to use the lender's services.

 

The campaign centred to educate clients about various opportunities offered
by the bank, provide education and financial advice, and expose clients to
the bank services, including account opening.-Daily News.

 

 

 

 

Tanzania: Lack of Locomotives to Push Up Tanga Cement Production Cost

TANGA Cement has said lack of Tanzania Railway Corporation (TRC) locomotives
for transporting cement to the northern regions is likely to increase
production costs.

 

The resumption of the Moshi-Arusha passengers and freight railway services
came after more than 30 years since the operations were halted.

 

"We have opened up the line for Moshi and Arusha; but if there are no
locomotives, we cannot use the facility. So, the railways system should be
available to transport large volume of cement and other goods at all times,"
said Tanga Cement Managing Director, Reinhardt Swart.

 

 

He added, "Although we have agreed on transport charges with the TRC, there
is no signed agreement on this so far. But, if they change their mind and
increase the transport charges, I would have no option but to also increase
our extricate prices, something which we have not done since June this
year."

 

He said the Tanga Cement has not increased the price since June this year
but will presumably do it in January next year based on the cost of
production.

 

Another challenge that may lead to hiking cement prices is the high cost of
transporting coal from the mining area to Tanga, which is more than the
actual core business when it is used to fire the kiln.

 

"Unfortunately for us in Tanga Cement, coal is located in the far south of
the country, and the only way we can get enough of it is by road, from a
distance of approximately 3,300 kilometres," he said.

 

He pointed out the other challenge regarding further investment is the
agreement signed with the Tanzania Investment Centre (TIC) in 2013 has not
been gazetted.

 

He said by the fact that it is not gazetted yet means that the company has
to allocate funds for possible payment of what was promised, but not paid.

 

"Because it has not been gazetted, I cannot claim the benefits and our
shareholders cannot provide money without gazetting the agreements, thus
posing huge challenge to the expansion of our business," he noted.

 

Also despite being the largest user of electricity, Tanga Cement is still
facing intermittent power supply that is causing disruption of
production.-Daily News.

 

 

 

Tanzania: Director - Govt Working On Cassava Demand Rise

THE government is working on several measures aimed at enabling the country
to meet and benefit from increased demand for cassava products from
international markets, especially from China that is currently more than 2
million tonnes per year.

 

In May 2017, Tanzania signed phy-tosanitary protocal with people of the
United Republic of China as a bilateral business development that apart from
permitting local companies to trade with China, it also opened market access
for dry cassava from Tanzania.

 

Currently, there are at least six local registered companies introduced in
China for dry cassava exportation, but the country has yet to reap the
economic fortunes from the promised market due to some setbacks negating the
country's cassava production chain.

Director for Crops in the Ministry of Agriculture, Nyasebwa Chimagu, said
serious interventions were afoot to push for the general performance of the
sub- sector, especially on production and productivity.

 

Among others, he expressed that the target is to scale- up cassava
production from the current eight tonnes to at least 16 tonnes per hectare
through adoption of improved technology.

 

"We'll also continue with efforts to breed more cassava varieties which are
pest and disease tolerant, but with high yielding potentials. Authorised
seed inspectors will effectively also be trained to professionally
facilitate production of quality seed," added the director.

 

To improve agronomic services and technologies to farmers, he said the
government through the Tanzania Agriculture Research Institute (TARI),
International Institute of Tropical Agriculture (IITA) and other technology
developers have so far developed agronomic packages such as correct spacing,
planting technique, fertiliser rates, weed management, pest and disease
management as well as time and harvesting technologies.

"The technologies are being disseminated to farmers through various ways,
including demo plots in major cassava growing areas, SMS, APP packaging with
a specific technology and radio programmes," said Mr Chimagu.

 

He further said the China's cassava market is very promising and open to
everyone, adding that the government is working to provide all necessary
measures to facilitate market accessibility.

 

According to him, as per the set China's market requirements, the exported
products should be free from pest and diseases, free from contaminants such
as sand, metal contamination and free from pesticide residues.

"Also, the products must be packaged in new packaging materials that conform
with Chinese requirements," said Mr Chimagu.

 

Elaborating, the director said the pests and diseases of concern by China
are Prostephanus truncatus (Horn), Trogoderma granarium Events, and
Phenacoccus manihoti (Matije Ferrer).

 

Others are Sinoxylon conigerum Gerstaecker, Achatina Fulica, Meloidogyne
spp, Oxalias latifolia Kunth, African cassava mosaic virus (ACMV),
Xanthomonas axonopodispv.maniho (Bondar), Vauterin et al, and Cassava Brown
Streak Virus (CBSV).

 

Due to prolonged rainfall and existence of Covid 19, no cassava was exported
in 2020.

 

However, the world price of dry cassava is relatively low that do not match
with current costs of production in Tanzania.

 

Tanzania export small quantities of cassava and cassava products, mainly dry
chips to Rwanda, Burundi, DRC, Kenya, China, Oman and United Emirates, the
exportation which saw the country fetch at least 12.93million US Dollars in
a period between 2016 and 2018.-Daily News.

 

 

 


 


 


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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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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