Major International Business Headlines Brief::: 08 September 2020

Tue Sep 8 07:22:54 CAT 2020

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Major International Business Headlines Brief::: 08 September 2020

 <http://www.nedbank.co.zw/> 

ü  Government pledges to increase number of affordable homes

ü  Chinese chip giant SMIC 'in shock' after US trade ban threat

ü  Netflix boss: Remote working has negative effects

ü  China takes aim at US 'bullying' of its tech firms

ü  Coronavirus: Up to £3.5bn furlough claims fraudulent or paid in error - HMRC

ü  Shares of Chinese bottled water giant Nongfu Spring spike 85% in Hong Kong debut

ü  SoftBank shares fall again on concerns over huge options bet

ü  Dollar hangs on as traders turn to ECB; Brexit wobbles hit sterling

ü  UK's Revolut launches digital banking app in Japan

ü  Gold subdued on strong dollar; European Central Bank meeting in focus

ü  Citigroup Still At Odds With Hedge Fund Over Bank Payment Mistake

ü  Visa Strikes a Deal With a Fintech for Digital Wallet Rollout in Europe

ü  Ransomware hackers shut down Argentina’s borders, demand $4M BTC

ü  Standard Chartered Is Fined $13.6 Million in India for 2007 Deal

ü  Asian shares mostly higher as US set to reopen from holiday

ü  Holding cash for projects may be risky business for ARM as it seeks growth story

ü  SA’s Competition Commission approves Seriti purchase of South32 coal assets

ü  Dutch payments startup Mollie raises $106M at $1B+ valuation

 <mailto:info at bulls.co.zw> 

Government pledges to increase number of affordable homes

The government has announced new measures to help more people get onto the property ladder, as part of a £12.2bn investment in increasing affordable housing.

A new shared ownership model would see the minimum initial share to buy in a property reduced from 25% to 10%.

People would also be able to buy additional shares in their home in 1% instalments with heavily-reduced fees.

The £12.2bn investment, listed in the Budget, includes £700m for new homes.

About half of the new homes will be available for affordable home ownership, while the rest will be made available for for discounted rent, including 10% for supported housing - to support those with physical or mental health challenges.

The shared ownership model will also include a 10-year period for new shared owners where the landlord agrees to cover the cost of any repairs and maintenance to the property.

And a vast majority of the rented homes delivered through the new programme will give tenants the right to purchase a stake in their home.

Shared ownership: Problems halved or doubled?

Can't afford to buy a home? Try shared ownership instead

The £700m was already set out in a government programme from 2016-2022. Another £11.5bn investment will be delivered in the form of an Affordable Homes Programme between 2021 to 2026, providing up to 180,000 new homes across the UK, but this is dependent on economic conditions.

Homes England, the government's housing accelerator, will deliver £7.5bn of new homes outside London. The public body will publish its Affordable Homes Programme prospectus this week, with an invitation to councils, housing associations and private providers to start preparing their bids.

Homes England plans to deliver new homes from next year.

"Today's announcement represents the highest single funding commitment to affordable housing in a decade and is part of our comprehensive plans to build back better," said Housing Secretary Robert Jenrick.

"This government is helping hard-working families and prospective first-time buyers get their feet on the housing ladder in an affordable way.

"Thanks to the range of flexible ownership options being made available, more families across the country will be able to realise their dreams of owning their own home, with half of these homes being made available for ownership."--BBC

Chinese chip giant SMIC 'in shock' after US trade ban threat

China's largest chip manufacturer's stock sank after the US revealed it could be its next trade ban target.

Semiconductor Manufacturing International Corporation (SMIC) said it was "in complete shock and perplexity" after the Pentagon revealed it had proposed the firm be added to a government blacklist.

This would restrict suppliers from providing it with American-based tech without special permission.

Beijing said it was "firmly opposed".

A foreign ministry spokesman accused Washington of "blatant bullying" and using supposed national security concerns to break international trade rules .

The move could make SMIC the next focus of a trade clash that has already threatened Chinese tech firm Huawei's survival and forced Bytedance to negotiate the sell-off of video-sharing app TikTok's American operations.

SMIC has a less advanced production line than some of its rivals - it cannot make transistors as small as they can, limiting its ability to produce some of the cutting-edge chips featured in the latest smartphones.

Even so, the firm is an important semiconductors provider to Chinese companies, including Huawei, while also serving international clients including Qualcomm.

Analysts have said a trade ban could threaten SMIC's existence, and in turn set back Beijing's efforts to spur on the country's semiconductor industry as part of its Made in China 2025 strategy.

"SMIC would be unable to update the software of any of its US machines or have personnel from suppliers helping it to get them working," Richard Windsor, founder of research firm Radio Free Mobile, told the BBC.

"It would also be unable to buy any more equipment or any upgrades for new technologies. If this were to persist for the long term, it would represent an existential threat that could see the company close its doors."

This in turn could compromise China's wider technology and artificial intelligence ambitions.

Military links

Pentagon spokeswoman Sue Gogh said on Saturday that adding the Shanghai-based firm to the Department of Commerce's Entity List would "ensure that all exports to SMIC would undergo a more comprehensive review".

She did not say what had motivated its intervention, but Reuters reported that defence chiefs are concerned the company has links to the Chinese military.

SMIC denies such ties. "The company manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses," it told the Bloomberg news agency over the weekend.

"We have no relationship with the Chinese military. Any assumptions of the company's ties with the Chinese military are untrue statements and false accusations."

Even so, this was not enough to avoid a sell-off on Monday.

SMIC's Hong Kong-based shares dropped 23% while those traded via a secondary listing in Shanghai fell 11%. In total, more than $6bn was wiped off its market value, according to the Financial Times.

Company-watchers have also cast doubt over its claims to independence.

Mr Windsor has noted that Datang Telecom Group is one of SMIC's biggest shareholders, as well as being a board member and customer. It supplies equipment to the People's Liberation Army.

"[This] provides a fairly strong link to the military, which seems to contradict SMIC's own statements," he wrote in a research note.

Elsewhere, the Financial Times said an unnamed US defence contractor has compiled a report claiming that SMIC had manufactured devices for researchers at universities affiliated with the People's Liberation Army.

The BBC has asked SMIC to respond to both points.

Tech independence

The trade blacklist would be damaging to SMIC's prospects.

But it could also give fresh impetus to Beijing's goal of being less dependent on Western tech.

As of 2019, only 16% of computer chips used in China were produced domestically, according to the Center for Strategic and International Studies (CSIS) think tank.

Beijing wants that figure to be 70% by 2025. The Chinese Communist Party's leaders reportedly plan to reveal further support for the sector in October.

CSIS has said that while export controls may slow China down, Washington should also consider providing financial support to its domestic semiconductor industry too.

"The United States is coasting on spending over science, research, and technology that dates to the 1980s," blogged researcher James Andrew Lewis.

"To defend ourselves, federal investment in technology is needed again."--BBC

Netflix boss: Remote working has negative effects

Netflix's chairman has said working from home has no positive effects and makes debating ideas harder.

But Reed Hastings, who founded the platform, also said its 8,600 employees would not have to return to the office until most of them had received an approved coronavirus vaccine.

And he predicted most people would continue to work from home on one day a week even after the pandemic was over.

A new UK government ad campaign is now asking workers to return to workplaces.

'People's sacrifices'

The Wall Street Journal newspaper asked Mr Hastings if he had seen any benefits from staff working from home.

"No. I don't see any positives," he replied

“Not being able to get together in person, particularly internationally, is a pure negative,” Mr Hastings told the Wall Street Journal.

“I’ve been super-impressed at people’s sacrifices.”

Netflix is used by almost 200 million households worldwide.

And it has already resumed producing its own series, documentaries and films.

'Proper testing'

“We’re up and running in much of Europe and much of Asia," Mr Hastings said.

"And we’ve got a few things going on already in [Los Angeles],” he added.

“The hope is that, through September and October, we can really get - with proper testing - a lot more running.”

Other leading technology companies, however, have suggested employees may never return to the office.

In May, Twitter said staff could work from home "for ever".

Fujitsu has also made plans to allow staff to work from home permanently.

And Facebook and Google have said employees can work remotely until at least the end of the year.--BBC

China takes aim at US 'bullying' of its tech firms

China has taken aim at the US saying its tech firms are victims of "naked bullying".

The accusations come as the Chinese government launches a new set of global guidelines for technology companies.

Its new initiative outlaws illegally obtaining people's data and large-scale surveillance.

Last month a similar data privacy effort was announced by the US called The Clean Network.

It's the latest clash between Washington and Beijing over data security issues which has already embroiled TikTok, Huawei and WeChat.

In recent months, the Trump administration has taken steps to block Chinese tech firms like Huawei and Chinese apps including TikTok and WeChat saying they pose threats to national security.

"Some individual countries are aggressively pursuing unilateralism, throwing dirty water on other countries under the pretext of 'cleanliness', and conducting global hunts on leading companies of other countries under the pretext of security," China's State Councillor Wang Yi said.

"This is naked bullying and should be opposed and rejected."

On Tuesday, Mr Wang said the new initiative also calls for tech firms to not create backdoors - secret access to a company's data and network - into their services.

The US has frequently accused Chinese telecoms provider Huawei of having backdoors in its equipment.

"Global data security rules that reflect the wishes of all countries and respect the interests of all parties should be reached on the basis of universal participation by all parties," Mr Wang added.

Cleaning up

China's global data security plan states that tech firms should not engage in large-scale surveillance of other countries or illegally acquire information of foreign citizens by using technology.

In August US Secretary of State Mike Pompeo launched the Clean Network, a global blueprint to exclude Chinese telecoms firms, apps, cloud providers from internet infrastructure used by the US and other countries.

"We call on all freedom-loving nations and companies to join the Clean Network," Mr Pompeo said. More than 30 countries and territories have signed up according to the State Department.

China's own initiative to set global standards on data security has been praised by one legal expert.

"China has a really robust data security network and the US is nowhere near at this level as it doesn't have any national level laws. This announcement by China looks like a pragmatic approach to protect consumers and stop data abuse," Carolyn Bigg, a technology and communications lawyer at law firm DLA Piper told the BBC.

Growing tension

This week, China's largest chip manufacturer's Semiconductor Manufacturing International Corporation (SMIC) was targeted for a US government blacklist.

This would restrict suppliers from providing it with American-based tech without special permission.

On Tuesday, US president Donald Trump stressed his desire to "decouple" from China.

"Whether it's decoupling, or putting in massive tariffs like I've been doing already, we will end our reliance on China, because we can't rely on China," Mr Trump said.

India's government has also banned TikTok and dozens more Chinese-made apps it says are a danger to the country.--BBC

Coronavirus: Up to £3.5bn furlough claims fraudulent or paid in error - HMRC

Up to £3.5bn in Coronavirus Job Retention Scheme payments may have been claimed fraudulently or paid out in error, the government has said.

HM Revenue and Custom told MPs on the Public Accounts Committee it estimates that 5-10% of furlough cash has been wrongly awarded.

Latest data shows the programme has cost the government £35.4bn so far.

The scheme has paid 80% of the wages of workers placed on leave since March, up to a maximum of £2,500 a month.

Speaking to MPs on Monday, HMRC's permanent secretary Jim Harra said: "We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5% and 10%.

"That will range from deliberate fraud through to error."

The Public Accounts Committee estimates that a total of £30bn in tax was lost in 2019 due to taxpayer error and fraud.

Both HM Treasury and HMRC were ordered to appear in front of MPs to explain how they were intending to reduce the problem.

"What we have said in our risk assessment is we are not going to set out to try to find employers who have made legitimate mistakes in compiling their claims, because this is obviously something new that everybody had to get to grips with in a very difficult time," said Mr Harra.

"Although we will expect employers to check their claims and repay any excess amount, what we will be focusing on is tackling abuse and fraud."

So far, 8,000 calls have been received to the HMRC's fraud telephone hotline. The HMRC is now looking into 27,000 "high risk" cases where they believe a serious error has been made in the amount an employer has claimed, he added.

Mr Harra advised that any employee who feels that their employer may have been fraudulently claiming furlough money can report it to the HMRC by filling in a form on its website.

"While we can't get involved in any relationship between the employee and employer, we can certainly reclaim any grant that the employer is not entitled to, which includes grants they have not passed on in wages to their employees."

Furlough fraud warning

This is the first time that the HMRC has spoken publicly about potential fraud impacting the Coronavirus Job Retention Scheme.

HMRC's permanent secretary Jim Harra answers questions over video conference with the Public Accounts Committee

In July, centre-right think tank Policy Exchange warned that fraud and error could cost the government between £1.3bn and £7.9bn.

The think tank said the government's financial rescue scheme were vulnerable to scams because of the size of the packages and the speed at which measures were rushed through to save people and businesses from economic ruin.

The calculation is based on expected fraud rates for government expenditure from the Cabinet Office and the Department for Work and Pensions.

The report said the true value lost to fraud may be closer to the higher end of the estimate "due to the higher than usual levels of fraud that accompany disaster management".

It said: "This is a serious squandering of public finances and properly resourced post event assurance will be required to reassure the public that every possible step has been taken to reduce this level of fraud."

At the time, a government spokesman said it was committed to "extensive post payment reviews of stimulus and support payments, to find fraud and recover money for the taxpayer".--BBC

Shares of Chinese bottled water giant Nongfu Spring spike 85% in Hong Kong debut

SINGAPORE — Shares of Chinese bottled water giant Nongfu Spring surged more than 85% in their debut on the Hong Kong stock market on Tuesday. 

The stock opened at 39.80 Hong Kong dollars per share ($5.14) before inching down to around 35.00 Hong Kong dollars ($4.52). Its initial public offering price was 21.50 Hong Kong dollars ($2.77), allowing the company to raise around $1.1 billion. 

Dickie Wong, executive director of Kingston Securities, told CNBC's "Squawk Box Asia" that Nongfu Spring was "one of the hottest IPO ever" in the history of Hong Kong's stock market. He pointed out that the IPO was oversubscribed by 1,148 times.

Wong explained that investors are interested in the stock not only for its "fundamentals or its very high profit margin." He added that there has been a general lack of investment opportunity given that valuations of many stocks — especially technology or internet companies — are high.

"So investors think (participating) in a new IPO is always the best strategy," he said. 

Investors have also been turning to stocks as interest rates globally remain low, said Fraser Howie, an independent analyst. 

"Ultimately, half the world is operating on negative rates and half of the rest of them is operating on zero rates, and governments keep printing money," he told CNBC's "Street Signs Asia." 

"The world is awash with money, Chinese stocks are hot," he added.

Nongfu Spring sold 388.2 million shares in its IPO deal. Its cornerstone investors include fund manager Fidelity, hedge fund Coatue and Singapore sovereign wealth fund GIC. Its IPO is one of the largest in Hong Kong this year.

In addition to bottled water, the company produces other packaged drinks such as tea, coffee and fruit juices. The company, citing a Frost and Sullivan report, said it had the largest share in China's packaged drinking water market from 2012 to 2019.

Nongfu Spring said its 2019 revenue jumped 17.3% to 24.02 billion yuan ($3.51 billion). But in January to May this year, its revenue fell 12.6% year-over-year to 8.66 billion yuan ($1.27 billion) with sales affected by the coronavirus outbreak, the company said.--cnbc

SoftBank shares fall again on concerns over huge options bet

Shares in SoftBank dropped again as investor unease mounted over the Japanese conglomerate’s high-risk, multibillion-dollar bet on options tied to US technology stocks.

The group’s stock fell as much as 4.4 per cent in morning trading in Tokyo on Tuesday, taking the shares’ total decline for the week past 10 per cent. Shares later trimmed some of those losses to trade down 1.7 per cent.

More than $11bn has been wiped from the company’s market value since the Financial Times revealed that SoftBank was the mystery “whale” that drove US tech stocks to record highs through aggressive bets on equity derivatives.

“Given SoftBank is back on the radar since its epic decline [during the coronavirus pandemic] in February and March, it is worth asking the question whether SoftBank Group is a black box and poses a systemic risk to the overall system,” said Peter Garnry, head of equity strategy at Saxo Bank.

The drop in SoftBank’s shares contrasted with the broader performance of markets across Asia Pacific on Tuesday morning. Japan’s Topix index rose 0.2 per cent while Australia’s S&P/ASX 200 climbed 1.3 per cent.

China’s CSI 300 of Shanghai- and Shenzhen-listed shares added 0.3 per cent while Hong Kong’s Hang Seng added 0.6 per cent.

Traders largely shrugged off comments from US President Donald Trump, who late on Monday floated “decoupling” the US economy from China, saying the move would save America “billions of dollars”.

Futures linked to the S&P 500 index point to a gain of 0.4 per cent when US markets reopen on Tuesday after being shut Monday for the Labor Day holiday. Futures for London’s FTSE 100 were up 0.2 per cent following the index’s 2.3 per cent rise on Monday.

Oil benchmarks continued to struggle after dropping to their lowest levels in more than a month on Monday following Saudi Aramco’s decision to cut prices on crude shipments to Asia.

West Texas Intermediate, the US marker, fell 1.7 per cent to $39.09 per barrel, while international benchmark Brent crude was flat at $42.01 per barrel.-ft

Dollar hangs on as traders turn to ECB; Brexit wobbles hit sterling

SINGAPORE (Reuters) - The dollar held on to small overnight gains on Tuesday as investors weighed whether an accommodative turn from the European Central Bank later this week could hit the euro, while the pound nursed losses due to Brexit uncertainty.

In thin holiday trade the greenback had edged 0.2% higher against a basket of currencies =USD and rose by roughly the same margin against the euro EUR=EBS to $1.1816.

Moves early in the Asian day were modest, but had the dollar back under gentle pressure as risk appetite appeared to return to equity markets.

The Australian dollar AUD=D3 rose 0.1% to $0.7280 and the New Zealand dollar NZD=D3 also lifted very slightly from overnight lows hit following a Sunday statement from the central bank which again raised the prospect of negative rates.

The main focus this week is on the European Central Bank’s policy decision on Thursday.

Most analysts don’t expect a change in the bank’s policy stance but are looking to the message on its inflation forecasts and whether it seems concerned by the euro’s strength.

The meeting comes after the euro marked a two-year high just above $1.20 at the beginning of the month, until comments about its level from ECB chief economist Philip Lane knocked it lower.

“The ECB could raise more concerns over a further appreciation in the euro and make some downward revisions to its inflation projections,” said Commonwealth Bank of Australia currency analyst Kim Mundy, which would flag easier policy.

“In our view, the dollar can lift further over the remainder of the week because of the possibility the ECB takes a sharper dovish turn.”

Elsewhere, the dollar traded firmly against the Japanese yen amid talk of a snap election - something that Yoshihide Suga, frontrunner to succeed Shinzo Abe in next week’s leadership ballot - signalled in a newspaper interview.

The yen JPY=EBS last changed hands at 106.30 per dollar.

The British pound GBP=, meanwhile, was the overnight laggard - shedding 0.8% on the dollar - amid a fresh crisis in EU-UK trade negotiations.

A Financial Times report suggesting Britain might legislate to override its Brexit withdrawal agreement prompted the EU to warn there would be no deal if that happened, raising the prospect - again - of a hard Brexit.

New talks are due to begin in London later on Tuesday.

The pound dipped marginally to $1.3162 in Asia and sat a fraction above a two-week low against the euro at 89.77 pence EURGBP=.

“The key question for markets is whether the remarks are still mostly brinkmanship as negotiations near the finish line,” said NAB economics director Tapas Strickland. “The mild market reaction suggests markets think so and still sniff a deal.”

Much of the data releases due in the Asian trading day are domestically focused, with Australian payrolls and business confidence figures due at 0130 GMT.

Final European GDP figures are due later in the day.

Japan’s economy shrank an annualised 28.1% in April-June, worse than the initial estimate of a 27.8% contraction, revised data from the Cabinet Office showed on Tuesday.

UK's Revolut launches digital banking app in Japan

TOKYO -- U.K.-based Revolut, one of Europe's most valuable startups, on Tuesday launched its digital banking app in Japan, intensifying a battle for business among fintech rivals.

The entrance is Revolut's first in a non-English speaking market. The company, which offers banking services on a mobile app, will initially roll out a limited number of functions in Japan, including international transfers and managing money in 23 currencies. Registered users will also receive a Revolut-branded Visa debit card.

While demand in Japan for tourism and business travel has evaporated due to COVID-19, Revolut said thousands of expatriates living in the country have already signed up. Over time, it wants to attract Japanese users and generate revenue through monthly subscription plans. It plans to add reward programs and other functions to boost its appeal.

"Foreign finance apps are specialized, but Revolut will offer them all in one app," said Haegwan Kim, head of growth at the Japanese unit.

Revolut said it has 13 million users globally. It operates in the U.S. as well as Australia and Singapore in Asia.

While the pandemic has hit consumer spending hard, growing demand for online services has drawn investor interest in the financial technology sector. Revolut raised $80 million in July, giving the company a valuation of $5.5 billion.

The expansion into Japan comes as the government steps up efforts to upgrade its financial sector with digital technology, including a planned overhaul of its legacy interbank transfer system. Japanese still rely heavily on cash and ATMs, even though mobile apps have become mainstream in China.

But Revolut is also entering a crowded market where local digital payment companies, such as SoftBank Group-backed PayPay, are spending aggressively on promotions. A string of startups have already exited the market, either by shutting down services or being sold to larger players.-nikkei

Gold subdued on strong dollar; European Central Bank meeting in focus

Gold prices eased on Tuesday as the dollar strengthened, although rising doubts over the economic recovery from the Covid-19 slump limited losses, with investors awaiting the outcome of the European Central Bank meeting this week.

Fundamentals

Spot gold was down 0.2% at $1,925.68 per ounce by 0048 GMT.

U.S. gold futures were steady at $1,934.60.

The dollar index rose 0.2% against its rivals, making gold more expensive for holders of other currencies.

More than 27.19 million people have been reported to be infected by the novel coronavirus globally and 888,326 have died, according to a Reuters tally.

Japan's economy shrank more than initially estimated in the second quarter, while German industrial output rose far less than expected in July, suggesting Europe's largest economy faces a slow return to pre-pandemic production levels.

The U.S. Federal Reserve's landmark shift to a more tolerant stance on inflation will be a drag on the dollar for years and will raise hard questions about the role of central banking, challenging policymakers from Frankfurt to Tokyo.

Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.

U.S. stock futures and Asian shares regained some footing on Tuesday.

President Donald Trump on Monday again raised the idea of separating the U.S. and Chinese economies, suggesting the United States would not lose money if the world's two biggest economies no longer did business.

Silver fell 0.9% to $26.75 per ounce, platinum eased 0.2% to $906.17 and palladium gained 0.3% to $2,302.74.-cnbc

Citigroup Still At Odds With Hedge Fund Over Bank Payment Mistake

In an unusually public feud, Citigroup is engaged in a squabble with a creditor over the mistaken $900 million Revlon payments from earlier this year and the possible motivations for what happened, The Wall Street Journal (WSJ) reports.

The disagreement began when Brigade Capital Management, which is a $28 billion money manager for Citigroup, disagreed with the bank over Citigroup's aid to billionaire investor Ron Perelman in his restructuring of corporate loans for his company Revlon.

The payments in question were the subject of a Citi lawsuit from August in which the bank tried to recollect $900 million in loans it had mistakenly distributed to creditors of Revlon. On Aug. 17, the bank temporarily froze $175 million it claimed to have mistakenly sent to Brigade. But the investor still refuses to return the funds.

Brigade Capital Management was chief among those raising problems with the incident, which it said would ultimately damage their investments, WSJ writes, citing court documents and unnamed sources. Brigade believes Citi was aiding Perelman in trying to restructure Revlon's debt so that investments would be worth less overall and they'd have less chances of being repaid.

The break is unusual for the two companies. Brigade and its founder, Donald Morgan, have both long since worked with Citigroup on fundraising, including hiring the bank to help it raise $1.5 billion of new loans over the past few years, according to stats from S&P Global Market Intelligence quoted by WSJ.

But now the two former friends are taking the case to court, with Brigade seeking to keep the $175 million the fund received when Citigroup accidentally paid out several Revlon lenders around $900 million total. The fallout of the two entities also included Citi backing out of a deal to help Brigade arrange a $400 million collaterized loan obligation, along with a second deal also in the works, sources told WSJ.

A spokeswoman for Brigade denied that it was on the outs with Citigroup.

“Though our fiduciary duty to our clients has put us into conflict with Citibank relating to their role as agent on the Revlon Term Loan, Brigade has not sought to limit any other business or trading activity with Citibank as a consequence of this specific disagreement,” the spokeswoman said, according to WSJ.

Citi has sued Brigade and other lenders that did not return the money, with a trial set for November, WSJ writes.-pymnts.com

Visa Strikes a Deal With a Fintech for Digital Wallet Rollout in Europe

Visa (NYSE:V) continues to push more deeply into the jungle that is fintech. The world's dominant payment card processor has signed a deal with a Scandinavian company in the digital wallet sphere. 

Through the arrangement, Visa said in a press release last week, "Visa's clients and partners will now be able to take advantage of the Vipps platform to create their own digital wallets and offer customers new ways to pay, be paid and manage their money."

This will apply to its cardholders in Europe; the company did not mention when and if the arrangement would be expanded to other parts of the world.

Neither the terms nor the price of the deal were made public.

Its timing seems appropriate. Contactless commerce -- either via online purchasing or with specialty cards that don't need to be swiped or read -- has surged during the coronavirus pandemic. This has added momentum to an existing global migration to digital means of payment. In its press release, Visa said that more than 75% of payments made through its branded cards are contactless these days.

Vipps' core product is an app that facilitates consumer payments; users can send and receive money to and from various sources. It launched in 2015, and according to Visa, currently has 85% market penetration. In its native Norway, it has 3.7 million users out of a total population of roughly 5.4 million.

"Today, the ability to pay digitally and make cashless payments in-stores, online, in-app, is no longer just a convenience but a necessity," Visa quoted Antony Cahill, its managing director for European regions, as saying. "As the leading payment brand, we are keen to make sure consumers and businesses have access to secure, digital commerce, regardless of where they live or what mobile device they have."

Ransomware hackers shut down Argentina’s borders, demand $4M BTC

Government officials in Argentina are refusing to negotiate with a ransomware group that forced them to briefly close all immigration checkpoints on Aug. 27.

According to a Sept. 6 report on Bleeping Computer, a group of Netwalker ransomware hackers breached Argentina's immigration agency, Dirección Nacional de Migraciones, on Aug. 27 and initially demanded a $2 million payment to restore its servers. 

"Your files are encrypted,” stated a ransom note on a Tor payment page sent to the immigration agency. “Only way to decrypt your files is [sic] buy the decrypter program.”

The group posted a select batch of sensitive data from the agency as proof it was the one responsible for the hack. After a week, the actors increased the ransom to a 355.8718 Bitcoin (BTC) payment — roughly $4 million at the time. 

Argentinian news outlet Infobae reported that the attack effectively halted all border crossings into and out of the country for four hours. During the shutdown, authorities took all computer networks used by immigration officials at regional offices and checkpoints offline. Government officials reportedly said "they will not negotiate with hackers” and are not concerned with retrieving the stolen data.  

Although ransomware hackers are not restricted by borders, the situation in Argentina is a rare example of a cyberattack affecting a national government agency. 

Speaking with Cointelegraph, Brett Callow, a threat analyst and ransomware expert at Emsisoft malware lab, said such attacks had the potential to be both disruptive and involve the leaking of extremely sensitive data to the general public.

“In the case of government departments, this is particularly problematic as the data can often be extremely sensitive, and in some cases even represent a risk to national security,” said Callow.  “More than 1 in 10 ransomware attacks now involve data theft, and the list of groups which routinely steal is steadily growing. Consequently, it’s very likely that incidents like this will become more and more common.”cointelegraph

Standard Chartered Is Fined $13.6 Million in India for 2007 Deal

(Bloomberg) -- India’s anti-money laundering agency fined Standard Chartered Plc 1 billion rupees ($13.6 million) for breaking foreign exchange rules when it worked on the takeover of a local bank, marking one of the country’s biggest penalties imposed on an overseas lender.

An eight-year probe found that Standard Chartered violated the so-called foreign exchange management act -- which monitors offshore financial transactions -- when it worked with a group of investors to buy a stake in Tamilnad Mercantile Bank Ltd. in 2007, according to an August order from India’s enforcement agency that was seen by Bloomberg.

“Senior officials at Standard Chartered saw an investment in TMB shares as an opportunity that might ripen into an eventually larger ownership for the bank,” Sushil Kumar, the enforcement agency’s special director, said in the order.

A representative for the British lender confirmed receipt of the order, adding that the bank was evaluating it and so unable to comment further.

Escrow Accounts

Standard Chartered -- India’s largest foreign bank by branches -- also acted as a custodian for shares on the deal, according to the order. Tamilnad Mercantile was fined almost 170 million rupees for similar charges, the order said.

A spokesman at Tamilnad Mercantile declined to comment, while the Enforcement Directorate didn’t immediately respond to an email seeking comment.

The case dates back to about 13 years ago when Tamilnad Mercantile transferred 46,862 shares to overseas investors, including GHI Ltd., Swiss Re Investors, FI Investments and Cuna Group, without seeking permission from India’s central bank, according to the order. Some of those shares were then transferred to Sub-Continental Equities Ltd., an affiliate of Standard Chartered in April 2008, without the Reserve Bank of India’s permission, it said.

The transfers were done through escrow accounts with Standard Chartered, which acted as a transaction agent and a lender to one of the investors on the deal, the order said.

“Standard Chartered through its affiliate Subcontinental was a proposed and eventually an actual investor in TMB shares to be purchased through the escrow agreement arrangements,” Kumar said.-yahoofinance

Asian shares mostly higher as US set to reopen from holiday

TOKYO — Asian shares were mostly higher Tuesday, after European stocks rallied and U.S. markets were closed for the Labor Day national holiday.

Investors are focusing on uncertainties over the coronavirus pandemic and hopes for a vaccine. Attention is now on how Wall Street might pick up after the holiday break, given the decline that came last week after months of surging prices.

Japan’s benchmark Nikkei 225 gained 0.6% in morning trading to 23,222.31. Australia’s S&P/ASX 200 added 0.7% to 5,986.90. South Korea’s Kospi gained 0.8% to 2,403.53. Hong Kong’s Hang Seng was little changed, inching up less than 0.1% to 24,599.49, while the Shanghai Composite slipped 0.2% to 3,286.01.

“Traders and investors alike may slowly but surely come around to the idea that last week’s market rout was tech sector-specific, rather than any real change in underlying sentiment,” said Stephen Innes, chief global markets strategist at AxiCorp.

AD

“There was nothing ‘fundamental’ behind last week’s equity sell-off, but it will most certainly take a while to clear all the option-market after-shocks,” he said.

Wall Street’s slide on Friday followed a Labor Department report that showed U.S. hiring slowed to 1.4 million last month. That was the fewest jobs added since the economy started bouncing back from the initial shock of the pandemic. The United States has recovered about half the 22 million jobs lost during the crisis.

In Europe, another round of Brexit trade talks is scheduled in London for later in the day. On Monday, the European Union warned the British government that any attempt to renege on commitments made ahead of its departure from the bloc earlier this year could put at risk the hard-won peace in Northern Ireland. Britain left the bloc on Jan. 31, but the two sides are in a transition period that ends at the end of this year and are negotiating their future trade ties.

AD

Riki Ogawa at the Asia & Oceania Treasury Department at Mizuho Bank in Singapore warned that plenty of other uncertainties remained, such as President Donald Trump’s comments about “decoupling” the U.S. economy from China, as the presidential campaign heats up.

The Asian region depends heavily on a healthy Chinese economy, and trade with the U.S., as well as with China.

“We appear to be short on clarity,” said Ogawa.

Benchmark U.S. crude fell 64 cents to $39.13 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, added 6 cents to $42.07 per barrel.

The dollar inched down to 106.23 Japanese yen from 106.27 yen. The euro fell to $1.1805 from $1.1817. ___washingtonpos

Holding cash for projects may be risky business for ARM as it seeks growth story

THERE was a ripple of disquiet among analysts last week when Patrice Motsepe, executive chairman of African Rainbow Minerals (ARM), defended his company’s dividend final payout of R7/share (total dividend of R12/share for the 2020 financial year) in favour of keeping capital aside for growth; projects mainly.

RMB Morgan Stanley deemed the payout “modest”, especially as ARM has R3bn in cash. But Motsepe said ARM was looking afresh at new copper investments, and other project investment talks were buzzing along.

Motsepe also alluded to the potential in Harmony Gold, the firm’s 13.8% investment, saying that the company had an important copper/gold prospect in the politically fraught and far-flung Pacific nation of Papua New Guinea (PNG).

The fact is, though, ARM doesn’t have the best track record when it comes to projects. It recently closed its Lubembe copper investment in Zambia and for all its huff and puff, there’s very little in the way of demonstrable growth outside of its platinum.

Mike Schmidt, CEO of ARM, said there was significant Merensky and UG2 expansion – types of platinum group metal (PGM) mineralisation, the latter rich in high-flying rhodium – that the group was considering undertaking.

But elsewhere in the portfolio, the company is exposed to thermal coal and manganese alloys and ore, the latter an up-and-down kind of commodity.

Better to pay out the cash more amply, analysts said. Better to unbundle the Harmony stake whilst gold is high-flying, one analyst suggested. No sirree, said Motsepe: ARM forerunner ARMGold and Harmony Gold tied the knot in 2003 and the ties run deep: they share a common branding, for instance, of the ARM letters represented symbolically in the Harmony Gold logo, he said.

So what is ARM keeping money aside for? The copper investment might be as an equity partner in Orion Minerals’ R4.5bn Prieska Copper-Zinc project in South Africa’s Northern Cape province. And then there’s the PGMs: “We do have the orebodies,” said Schmidt of the firm’s Two Rivers and Modikwa mines that could be further developed “… at low capital and that would be cost efficient”.

True, but the big fear is the unknown in respect of Harmony Gold. It’s Wafi-Golpu project, held in joint venture with Australian firm, Newcrest Mining, is a giant of a venture. Potentially producing 320,000 ounces a year of gold and some 150,000 tons of copper annually at peak, the project requires an estimated attributable $1.41bn (R23.5bn) in capital to develop – based on a 2018 feasibility study and so in need of an update.

Were ARM to follow its rights in that project it would absorb all of its present cash so it’s a risky venture for a diversified group.-mininmx

SA’s Competition Commission approves Seriti purchase of South32 coal assets

By David McKay -September 7, 2020

Mike Teke, CEO, Seriti Resources

THE acquisition of South32’s South African Energy Coal (SAEC) to Seriti Resources has been recommended by South Africa’s Competition Commission, said BusinessLive.

“In spite of the structural change from the merger, Seriti’s newfound position is unlikely to directly dovetail into greater leverage power for the merged entity during contract renegotiations and is therefore unlikely to have a significant effect on the price of coal to Eskom,” the commission said, recommending transaction approval to the Competition Tribunal.

The deal will make Seriti the largest supplier to Eskom, South Africa’s state-owned power utility which buys about 120 million tons a year of coal to fuel is power stations. Seriti will control about 30% of the Eskom market annually. It had previously bought the domestic coal mines of Anglo American.

Seriti supplies coal to Eskom’s Tutuka, Lethabo and Kriel power stations and has an upcoming mining project, the New Largo Coal Mine, intended to supply coal to Kusile power station. SAEC supplies the Duvha and Kendal power stations from its Khuthala and Ifalethu mines, said BusinessLive.

The purchase agreement, as announced late last year, is for an upfront payment of R100m with Seriti also assuming the liabilities present in the business.

Mike Teke, CEO of Seriti Resources, told Bloomberg News in June that he was considering adding production of chrome, manganese or iron ore to the firm’s coal portfolio, saying there were “immense opportunities”.

“We are going to take over several businesses that are not in coal. I want us to build a strong, formidable mining company,” Teke said.-miningmx

Dutch payments startup Mollie raises $106M at $1B+ valuation

E-commerce has seen a huge jump in the last eight months, driven by consumers shopping more for goods online while spending more time at home during the COVID-19 pandemic. Today, a payments startup out of Amsterdam that has itself seen a surge of growth this year as a result of that is announcing a big round of funding to help it continue expanding its products and international footprint to meet that demand.

Mollie, a startup that offers a simple, API-based way to integrate payments into a site or an app, has raised €90 million ($106 million) in a round of funding led by TCV. The Series B brings the total raised by Mollie to €115 million and notably catapults the startup’s valuation to over $1 billion, founder and CEO Adriaan Mol confirmed in an interview with TechCrunch.

Mollie has been around since 2004 and this is only the second time it’s raised funding — the first was a €25 million round a year ago — which is possibly one reason why it has not been much on the startup radar.

“It built the backend and front end by myself when I still lived with my parents,” Mol said. “It’s the Dutch way. Bootstrap your idea for a pretty long time. I think that’s the foundation of the company.”

Yet Mollie has hit a number of milestones over the last several years that provide some explanation for why it has now arrived on the scene, seemingly out of nowhere, with such a high valuation.

Currently the company focuses mainly on small and medium businesses — a vastly underserved but giant market — and counts some 100,000 merchants as customers, predominantly in the Netherlands, Belgium and Germany. Those customers include some very high-profile names like Wickey, Deliveroo, TOMS (the shoe company) and UNICEF.

It’s currently on track to process more than €10 billion in transactions this year, representing growth of 100% on a year ago, with some markets like Germany growing 1,000%. And it has been profitable for a number of years at this point.

“We are on the right side of efficiency,” Mol said — Mollie is his nickname among friends. “But we need to invest in new products to stay competitive.”

Indeed, the market for payment service providers is a pretty crowded one, with companies like Stripe and Mollie’s compatriot Adyen also building strong businesses on the concept of providing APIs, and a few simple lines of code, to integrate payment flows into other services. These companies are not only popular, but very well capitalised and poised to continue to develop more tools, as well as simply continuing to grow their international footprint.

Mol says Mollie stands apart from them and the rest of the competition in two key ways. The first is that it provides very localised payment offerings in what remains a very fragmented market, where each consumers’ and merchants’ preferences for what payment methods to use vary a lot country by country (and still are not fully being served by the likes of Stripe).

The second is that it provides a very quick and simple integration that hides a lot of the difficulty of integrating so many different kinds of payment methods. That ease of use both for merchants and customers mean that there is less shopping cart abandonment, and thus higher conversion rates for site visitors. Mol said that the conversion bump can be typically as high as 7%.

“If the journey is super slick and smooth, they don’t drop out, and that is direct revenues for our customers,” he said. (Pricing is transparent but not uniform: it depends on volume, and which payment methods are integrated and used.)

That — alongside the growth rate of a very profitable and efficient company — was part of what attracted TCV.

“The ease of use point is really critical,” said John Doran, a partner at TCV. “It’s so easy that a kid could use it. The idea is to build the Apple of the payments world.”

Mol first came upon the idea of building Mollie when he was integrating a payments service into MessageBird, his previous startup, which provides API-based messaging services (think of it as Europe’s answer to Twilio). At the time, he said he found all of the payments offerings available to be sub-par and too hard to use in the way that he wanted, and so they — specifically Mol himself, who is an engineer — built the solution in-house (literally, his parents’ house: see above).

I asked why the company didn’t simply expand and/or pivot to provide both services under one umbrella, but Mol said the two businesses and ideas were simply too big and not similar enough to develop as one business. So he left MessageBird’s executive leadership — he’s still on the board, though — to focus full-time on Mollie.

That switch to focusing on the payments business has paid off, so to speak.

The next steps for the company, Mol said, will be to continue building out services adjacent to payments — areas like potentially providing working capital for its customers, along with other financial services that SMBs do not generally get from single providers. “We see a whole bunch of products that traditional banks are not offering to SMEs,” Mol said. “They are not incentivised to invest in them because they do not make much money off them.” Those, he added, could include point of sale payments, card issuing, bank issuing, and other banking products.-techcrunch

Invest Wisely!

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INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

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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.

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