Major International Business Headlines Brief::: 28 September 2020

Mon Sep 28 11:01:06 CAT 2020

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Major International Business Headlines Brief::: 28 September 2020

 <mailto:info at bulls.co.zw> 

ü  Donald Trump 'paid $750 in federal income taxes in 2016 and 2017' - NY
Times

ü  TikTok: US judge halts app store ban

ü  Aldi looks at online move as shopping habits change

ü  Indian start-up ShareChat is one of many looking to fill the vacuum left
by TikTok ban

ü  GLOBAL MARKETS-Asian shares buoyed by China optimism, markets eye U.S.
presidential debate

ü  Naira Depreciation in Parallel Market to Continue - Analysts

ü  SoftBank brings food service robot to labour-strapped Japan

ü  Slimmer Siemens to shy away from massive deals after Energy spin off -
source

ü  Africa’s agricultural sector faces up to Covid-19 crisis

ü  SoftBank brings food service robot to labour-strapped Japan

ü  Zambia’s call for debt relief triggers fear of domino effect across
Africa

ü  Oil marketers back out of NLC, TUC nationwide strike, support
deregulation policy

ü  South Africa’s scary unemployment figures are coming

ü  Gauteng’s plans to restrict jobs for foreign workers – what you need to
know

Donald Trump 'paid $750 in federal income taxes in 2016 and 2017' - NY Times

The newspaper - which says it obtained tax records for Mr Trump and his
companies over two decades - also says that he paid no income taxes at all
in 10 of the previous 15 years.

The records reveal "chronic losses and years of tax avoidance", it says.

Mr Trump called the report "fake news".

"Actually I paid tax. And you'll see that as soon as my tax returns - it's
under audit, they've been under audit for a long time," he told reporters
after the story was published on Sunday.

"The IRS [Internal Revenue Service] does not treat me well
 they treat me
very badly," he said.

Mr Trump has faced legal challenges for refusing to share documents
concerning his fortune and business. He is the first president since the
1970s not to make his tax returns public, though this is not required by
law.

The Times said information in its report was "provided by sources with legal
access to it".

The report came just days before Mr Trump's first presidential debate with
Democratic rival Joe Biden and weeks before the 3 November election.

What are the key claims?

The Times said it reviewed tax returns relating to President Trump and the
companies owned by the Trump Organization going back to the 1990s, as well
as his personal returns for 2016 and 2017.

It said the president paid just $750 in income taxes in both 2016 and 2017,
while he paid no income taxes at all in 10 of the previous 15 years,
"largely because he reported losing much more money than he made".

Before becoming president, Mr Trump was known as a celebrity businessman and
property mogul.

But the newspaper says his reports to the IRS "portray a businessman who
takes in hundreds of millions of dollars a year yet racks up chronic losses
that he aggressively employs to avoid paying taxes".

In a public filing, President Trump said he made at least $434.9m in 2018.
The newspaper disputes this, alleging that his tax returns show the
president had instead gone into the red, with $47.4m in losses.

The Trump Organization joined the president in denying the allegations in
the report.

The company's chief legal officer, Alan Garten, told the Times that "most,
if not all, of the facts appear to be inaccurate".

"Over the past decade, President Trump has paid tens of millions of dollars
in personal taxes to the federal government, including paying millions in
personal taxes since announcing his candidacy in 2015," he said.

What else does the report say?

The newspaper also claims that "most" of Mr Trump's biggest businesses -
such as his golf courses and hotels - "report losing millions, if not tens
of millions, of dollars year after year".

"That equation is a key element of the alchemy of Mr Trump's finances: using
the proceeds of his celebrity to purchase and prop up risky businesses, then
wielding their losses to avoid taxes," it says.

It adds that the president is personally responsible for more than $300m in
loans, which will come due in the next four years.

The newspaper also alleges that some of President Trump's businesses have
received money from "lobbyists, foreign officials and others seeking face
time, access or favour" from the president.

The Times says it used tax records to find out how much income the president
makes from his companies overseas, alleging that he made $73m in revenue
from abroad in his first two years at the White House.

Much of that came from his golf courses in Ireland and Scotland, but the
Times says the Trump Organization also received money "from licensing deals
in countries with authoritarian-leaning leaders or thorny geopolitics".

The Times alleges that the licensing deals netted $3m from the Philippines,
$2.3m from India and $1m from Turkey.

The newspaper claims that President Trump made $427.4m in 2018 in revenues
from The Apprentice US series, as well as from branding deals where
organisations paid to use his name. He also made $176.5m by investing in two
office buildings that year, it is alleged.

However, the Times alleges that the president paid almost no taxes on these
revenues, because he reported that his businesses made significant losses.

It also claims that President Trump has been making use of a tax code that
enables business owners to "carry forward leftover losses to reduce taxes in
future years".

For example, the newspaper says that in 2018, President Trump's largest golf
resort, Trump National Doral, near Miami, made $162.3m in losses. Similarly,
his two golf courses in Scotland and one in Ireland, reported a combined
$63.6m in losses, it is alleged.

What has the reaction been?

Mr Trump's political opponents condemned his reported tax arrangements.

House Speaker Nancy Pelosi, the most powerful Democrat in Washington, said
the report showed Mr Trump had taken "extraordinary measures" to "game the
tax code and avoid paying his fair share of taxes".

Taking to Twitter, Senate minority leader Chuck Schumer asked Americans to
raise their hands if they had paid more in federal income tax than Mr Trump.

Democratic presidential candidate Joe Biden has not commented so far, but
his campaign team highlighted on Twitter that teachers, firefighters and
nurses all paid much more than $750 in tax.--BBC

TikTok: US judge halts app store ban

TikTok has avoided a government-ordered block on new downloads in the US
after a judge issued a temporary injunction.

The video-sharing app had faced being removed from Apple's App Store and
Android's Google Play marketplace at midnight local time in Washington DC.

Existing US-based users would have been able to have continued using it.

But they would not have been able to have re-downloaded the app if they had
deleted it from their phones, nor have been offered software updates.

Judge Carl Nichols of the US District Court for the District of Columbia
issued the injunction on Sunday evening having held a 90-minute hearing
earlier in the day.

The opinion was sealed, meaning that no reason for the decision was
released.

TikTok welcomed the intervention, and vowed to keep defending its rights.

"We're pleased that the court agreed with our legal arguments and issued an
injunction preventing the implementation of the TikTok app ban," it said in
a statement.

TikTok had argued that forcing it off the iOS and Android app stores would
have violated the First and Fifth Amendments of the US constitution.

It claimed that preventing some users joining the app unlawfully impinged
upon their freedom of speech and that the firm's own right to due process
would have been breached by not giving it a proper opportunity to defend
itself first.

"How does it make sense to impose this app store ban tonight when there are
negotiations underway that might make it unnecessary?" added a member of the
app's legal team.

The US government's lawyers in turn had described the app's parent as being
"a mouthpiece" for the Chinese Communist Party (CCP).

The ruling comes one week after another Chinese app - WeChat - that also
faced a ban, was given its own last minute reprieve by the US courts.

National security

The long-term fate of TikTok in the US is still unclear. At present it is
owned by a Chinese company, Bytedance, but operated as a separate entity to
Douyin - a parallel version used by Chinese consumers.

The Trump administration has claimed Bytedance's involvement poses a
unacceptable national security threat, because it would have to comply with
an order to support the CCP's "malicious collection of American citizens'
personal data".

Bytedance denies this, saying that TikTok's user data is kept in the US and
Singapore, and so is not subject to Chinese law.

Even so, after being threatened with a ban, a week ago TikTok said that it
had agreed a deal to let database company Oracle and retail giant Walmart
take up to a 20% stake in a new spun-off entity called TikTok Global ahead
of shares in the endeavour being floated.

But President Trump subsequently said he would not accept any arrangement
that did not involve Bytedance ceding control to the two US firms.

TikTok's statement on Monday suggested negotiations over the deal were still
ongoing.

"We will also maintain our ongoing dialogue with the government to turn our
proposal, which the President gave his preliminary approval to last weekend,
into an agreement," it said.

To further complicate matters, Beijing has yet to announce whether it will
grant Bytedance a licence to include TikTok's algorithms in any deal.

Algorithms power the app's recommendation engine, deciding which videos to
show to each user, based on the ways they have previously interacted with
the product.

The algorithms are highly responsive to each person's interests, quickly
picking up on shifts in behaviour, and are credited with helping make the
app so popular.

If China refused to let them be included in a deal, it could scupper any
sell-off.

TikTok really has morphed into a platform that rivals Instagram and Facebook
in America.

For the US to ban the app would be simply unprecedented. And for now, it's
been given a stay of execution.

The court will now take its time, as it looks into whether it's a threat to
national security.

One thing that was striking in the open evidence presented though was that
there was no smoking gun.

There were lots of assertions, for example that TikTok's owner Bytedance was
a "mouthpiece" for the Chinese government, but no killer punch.

What this delay does is buy TikTok much needed time. They need to do three
things.

Wrap up a deal with Oracle and Walmart, get Trump to support it and then get
the Chinese government to approve it.

And all whilst the clock runs down. This TikTok saga isn't even close to
being done.

TikTok has said it has more than 100 million active users in the US and
about 700 million worldwide.

It has claimed even a temporary ban would threaten its business.

"[A] ban will cause our user base to stagnate and then precipitously
decline," wrote interim boss Vanessa Pappas in a court filing.

"For TikTok to remain competitive, continued growth at this stage in our
development is critical."

The US government has issued two executive orders targeting TikTok. While
the first is designed to prevent it being distributed via Apple and Google,
the second is more far-reaching.

Due to come into force on 12 November, it is designed to shut the app down
outright in the US, if the president's national security concerns are not
resolved. --BBC

Aldi looks at online move as shopping habits change

Clive Perkins hasn't been to a supermarket since March, but he's just driven
to an Aldi store in Loughborough to have his groceries delivered straight to
his car.

He's one of the first customers to try its new click and collect trial - a
loyal Aldi customer for the past nine years prior to the pandemic.

"We've done everything online," he tells the BBC. "We've been able to
isolate because of the risk. We've got a regular slot with somebody else,
but we'll drop that if this works."

For more than a decade, discounters have been the disruptors in the
supermarket aisles, stealing customers from its bigger rivals and growing
sales. But this pandemic has been disruptive for them.

They've missed out on the huge boom in online sales and increase in
convenience store sales. Now Aldi's dipping its toe into the online food
market, trialling several new concepts, including a Deliveroo rapid delivery
service and a click and collect service.

"It's been an extraordinary six months, like nothing I've ever known in
grocery," says Aldi's UK chief executive Giles Hurley.

"The business performance has been very, very solid... but we also recognise
customer habits are changing and that we need to evolve our business to meet
the new demands and we're actively doing that."

Aldi's boss now wants to redefine discount retailing. The click and collect
trial will soon expand to 15 stores.

"I'm very, very confident that this is a model that we can scale
successfully," he says.

"We have a unique model, a set of efficiency principles unrivalled in the
market, and that it is my firm belief that we can apply those principles to
picking and packing stock in a very efficient way for customers
 I'm very
excited about it."

All this would have been unthinkable for Aldi a year ago. The business has
just posted its annual results for the year ending December 2019 showing an
8% increase in sales to £12.3bn as well as a 49% rise in pre-tax profits
compared with the previous 12 months.

But the pandemic has made things less easy.

"Aldi has still seen strong growth, they're still selling 10% more than they
did last year, but for the first time they've grown behind the market," says
Fraser McKevitt, Head of Retail and Consumer Insight at consumer analysts
Kantar.

Aldi has missed out on the extra purchasing by consumers during the
pandemic, he says, especially with people shopping locally and online.

"Shoppers were also doing fewer but bigger shopping trips so with the
smaller stores the discounters have, they lost out a bit on that which isn't
a position they've been in before."

Has the rise of the discounters been halted?

Mr McKevitt says he's now seen a return to more normal patterns of shopping
in convenience stores in the last month and that the level of online grocery
sales has reduced slightly from their earlier peak, as people relied less on
online after lockdown ended.

Aldi insists it's more than holding its own and that shoppers are switching
from the big four grocers to its stores.

"85% of customers still shop inside supermarkets and that still means huge
opportunities for us to grow our business," insists Mr Hurley.

And he says despite the dramatic changes in the grocery market, there's no
reining back on store expansion. Aldi is still planning to add another 100
stores over the next two years, creating another 4,000 jobs in 2021.

"We're investing £1.3bn over this year and next, our biggest ever investment
in Britain in over 30 years, expanding our business and that is testament to
the confidence we have in our future here," he says.

As job losses mount and family finances come under increasing pressure,
shoppers may soon be worrying about the cost of their weekly shop, as much
as about home delivery slots. The industry is bracing itself for a price war
this autumn.

During the last recession, savvy shoppers switched to the discounters and
their lower prices. The discounters have enjoyed rapid growth ever since.

Having been caught off their guard back in 2008, the big four grocers are
now far better prepared and are already upping the ante with price cuts.

But Aldi insists it will win this battle: "We won't be beaten on price. We
know the most important thing for our customers is value for money and this
is why we've made it our mission to keep our prices the lowest in Britain."

As for reports about panic buying, Mr Hurley says there has been a bit of an
uptick for certain items like toilet roll and pasta. However he insists it's
nothing like what the industry experienced in March and that availability is
still "really good".

There are no plans to re-introduce restrictions although it remains under
review. He's already written to customers urging them to only buy what they
need.

It's shaping up to be a festive period like no other, says Adam Leyland,
editor of grocery trade magazine The Grocer.

Permanent shift

"In any other recession, it would all be about price, price, price," he
tells the BBC.

"But in the current environment with all the restrictions going on, price
isn't always as important when people are locked down, it's also about
availability and people are prepared to pay a premium when demand
outstripped supply for online."

He thinks the shift to online - currently 12.5% of all grocery sales - is
permanent, and ignoring that market altogether is a dangerous game to play.

"You can't be complacent because as a retailer you have to give the customer
what they want," he says.

He explains that both Lidl and Aldi previously used a business model for
many years that had not been developed for a British market, and thus
"weren't able to make any progress".

"Then they began evolving, from introducing shopping trolleys and credit
cards to vastly expanding and improving their ranges," he says.

"Now Aldi are trying new things again as they realise the world's changed
and if we have a second lockdown, it's even more important that they are
responding."

Aldi already sells online wine and non-food. But going digital with
groceries, even with a less costly click and collect service, would be a
huge step.

The challenge is how to do it without compromising their low-cost business
model which has served them so well.

The click and collect trial will be a fascinating test. The boss of Aldi
says he'll be listening closely to customer feedback and as well as the
demand before assessing the next steps.

"What are they waiting for?" said one shopper. On our brief visit, it was
already luring some customers back.--BBC

Bloomberg poised to become third largest ETF index provider

A surge in demand for fixed income exchange traded funds looks set to turn
Bloomberg into one of the top three index providers in terms of ETF assets
tracking its benchmarks.

The company, which is still best known for its flagship news and information
terminals, enjoyed the strongest asset growth of all index providers last
year, with ETFs benchmarked to its indices attracting net inflows of $126bn,
according to data from ETFGI, a consultancy.

This was enough to place it comfortably ahead of the $87bn of fresh money
run against MSCI indices, and the $80bn inflow of S&P Dow Jones.

Bloomberg extended its lead in terms of flows still further in the first
eight months of this year, with assets rising by another $90bn.

This was way ahead of the combined $32bn of fresh money benchmarked against
the three industry leaders, S&P Dow Jones, MSCI and FTSE Russell, that have
traditionally held sway as the index groups that the vast bulk of the $7tn
exchange traded fund industry benchmarks its products against.

$725bn

Assets in ETFs benchmarked against Bloomberg indices

Bloomberg’s rise in importance comes as rapid growth in passive investing is
increasing the importance of index providers, with an 8 per cent jump taking
global index industry revenues to a record $3.7bn last year, according to
analysts at Burton-Taylor International Consulting, an arm of TP ICAP. S&P,
MSCI and FTSE Russell took $2.6bn of this.

The 530 ETFs managed against Bloomberg indices now hold $725bn, according to
ETFGI, giving the group a 10.4 per cent market share and placing it just a
whisker behind the $731bn of FTSE Russell. S&P DJ remains comfortably in
first place, with assets of $1.8tn, a 25.9 per cent market share, with MSCI
in second at $938m, or 13.4 per cent.

Bloomberg’s rise has primarily been driven by the index benchmarking
business it bought from Barclays for £520m in 2015, although Steve Berkley,
global head of fixed income indices at Bloomberg, said “plenty of ETFs” were
now run against the Australian bond indexing business it acquired from UBS
in 2014.

Fixed income accounted for 79.2 per cent of Bloomberg’s index assets last
year, according to Burton-Taylor.

$731bn

Assets held in ETFs tracking FTSE Russell indices, leaving it only a whisker
ahead of Bloomberg

This has allowed Bloomberg to be a prime beneficiary of rapid growth in bond
ETFs. So far this year, fixed income ETFs have taken in a net $161bn of
inflows, outstripping the $138bn swallowed by equity funds, according to
ETFGI, despite accounting for less than 20 per cent of the ETF industry.

“In some sense we are fighting with one arm tied behind our backs. Our
growth and products have been more focused on fixed income, but with the
launch of our US equity family in September last year, and with both
developed and emerging markets upcoming, we hope to grow our assets there,”
said Mr Berkley.

Any expansion could prove lucrative, with Bloomberg’s index revenue hitting
$133m last year, according to Burton-Taylor, with an estimated 85 per cent
of this derived from asset-based fees, and 15 per cent from subscriptions.
Fund managers typically either pay a flat licence fee to benchmark against
an index or, more commonly, a small fee per $1m of assets.

“The thing that gets us very excited are multi-asset class products,
combining fixed income and equity with commodities gives us the ability to
put forth really innovative solutions,” Mr Berkley said.

Bloomberg aside, this year has seen a wider shake-up of the indexing sector,
with the industry heavyweights outshone by a series of relative minnows that
have cashed in on the dominant trends, the ETFGI data show.

Inside ETFs

The FT has teamed up with ETF specialist TrackInsight to bring you
independent and reliable data alongside our essential news and analysis of
everything from market trends and new issues, to risk management and advice
on constructing your portfolio. Find out more here

The second-highest rise in funds benchmarked to a provider’s indices have
been secured by the London Bullion Market Association, at $49bn, thanks to a
rush into gold ETFs.

Next, at $44bn, comes the Tokyo Stock Exchange, which has been the prime
beneficiary of the Bank of Japan doubling the pace of its equity ETF buying
spree in response to the Covid-19 pandemic.

Markit, with inflows of $37bn, has been another beneficiary of the fixed
income surge, while the demand for US technology stocks has seen ETFs
benchmarked against Nasdaq indices accumulate $33bn.

The Korea Exchange, WisdomTree and JPMorgan have seen small outflows,
however, while among the big three, MSCI took in just a net $8.4bn in the
first eight months of the year and FTSE Russell $1.1bn.

FTSE Russell’s investments have yet to pay off

FTSE Russell’s disappointing $1.1bn of ETF inflows comes despite the London
Stock Exchange Group, FTSE Russell’s parent company, investing significant
sums to expand the business in recent years.

The LSEG bought Russell Investments for $2.7bn in 2014, combining it with
its existing FTSE business, and three years later paid $685m for Citi’s
fixed income indices, including its World Government Bond Index and its
Yield Book platforms, which provide data on bond indices.

In 2018 LSEG bought out TMX, its joint venture partner, to acquire full
control of the fixed income index business it built with the Canadian group,
while last year it acquired Beyond Ratings, which specialises in climate
modelling for fixed income strategies.

FTSE Russell’s weak flows are not believed to be overly related to its roots
in the poorly performing UK stock market, with its UK index series seeing
inflows since the Brexit vote in 2016.

Weaker demand for non-US equities in general, one of its core strengths, at
least compared to the voracious appetite for Wall Street stocks, will have
held back both FTSE Russell and fellow sector heavyweight MSCI, though.

Moreover, despite the Citi acquisition, FTSE Russell does still have holes
in its fixed income index range.

More positively, a FTSE index is the benchmark for the world’s largest China
government bond ETF, which was launched by Hong Kong’s CSOP Asset Management
in Singapore this week with $676m of assets.

Ken O’Keeffe, global head of ETFs at FTSE Russell, also said iShares had
recently switched two global government bond ETFs to FTSE Russell’s WGBI,
while this week Vanguard transferred a German equity ETF from Deutsche
Börse’s Dax index to a broader FTSE Russell benchmark.

“We have had 13 launches this year in fixed income and we have a very good
pipeline,” he added.

Stephane Degroote, head of ETFs for the Emea region, said a climate
risk-weighted version of the WGBI bond index was also seeing “a lot of
interest in launch products,” although he said no money was tracking it
yet.-ft

Indian start-up ShareChat is one of many looking to fill the vacuum left by
TikTok ban

SINGAPORE — India’s ban of the popular short-video sharing app TikTok has
left a vacuum that local start-ups are moving in to fill. 

One of those start-ups is ShareChat, a Twitter-backed Indian social media
platform that caters to users in 15 regional languages.

Citing national security concerns, New Delhi announced the ban on TikTok,
which is owned by Beijing-based ByteDance, in late June. Just days later,
ShareChat launched its own short-video platform, Moj. 

“We’ve been very, very opportunistic because we figured that this is a large
vacuum, it’s a large opportunity of short-video market, and therefore, we
launched on that product,” Ankush Sachdeva, co-founder and CEO of ShareChat,
said on CNBC’s “Street Signs Asia” on Monday. 

“I still believe there is a large appetite for short video content and if we
can provide a really good experience, that essentially translates to a
really good AI (artificial intelligence)-backed feed, there is a large
market to be captured,” he added. 

TikTok had more than 200 million users in India. After it was banned, Indian
start-ups in the short-video sharing space reported a surge in users. Moj
now has more than 80 million monthly active users who spend on average 34
minutes on the platform, the company said. 

ShareChat said last week it raised $40 million in pre-Series E funds from a
variety of investors.

They include Pawan Munjal, CEO and chairman of Hero Motorcorp, an Indian
manufacturer of scooters and motorcycles, who invested in a personal
capacity. Other investors included Twitter, venture capital firms SAIF
Partners and Lightspeed India, as well as investment firm India Quotient.

ShareChat’s total funding to-date is at $264 million. 

Sachdeva said the new funds would be used to improve the technology used by
Moj and ShareChat, which includes building up the company’s artificial
intelligence team, some of whom are based in Silicon Valley. A portion of
the new funds would also be used to grow the network of creators on Moj and
establish partnerships with music labels. The TikTok ban left many Indian
creators without a platform and disrupted many of their livelihoods.  

He explained that advertising would be one of the main sources of generating
revenue. The start-up would also explore other potential areas such as
social commerce and virtual gifting, which are popular among social apps in
the U.S. and China. 

Like many Indian tech start-ups, ShareChat also has Chinese investors who
backed previous rounds of fundraising. They include Shunwei Capital, Xiaomi
and Morningside Venture Capital.

India this year also restricted Chinese foreign direct investments flowing
into the country. 

Sachdeva said the start-up remains connected with its Chinese investors and
that it will take a measured approach in the future. “I think we would
definitely want to have our early backers also move forward along with us
but we will be cautious and we will take a measured approach,” he said.
-cnbc

GLOBAL MARKETS-Asian shares buoyed by China optimism, markets eye U.S.
presidential debate

(Reuters) - Asian markets were powered on Monday by signs China's economic
recovery was gaining momentum with pent-up demand, fiscal stimulus and
surprisingly resilient exports boosting sentiment across the region.

The brighter mood was seen extending to Europe, with eurostoxx 50 futures
and Germany's DAX futures jumping 1.7% each at the open, while London's FTSE
futures climbed 1.3%.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.7% to
551.48, but stayed within striking distance of a two-month low of 543.66 hit
last week.

The index is set to end the month deep in the red after three straight
monthly gains as the coronavirus pandemic continues to wreak economic havoc
around the world and raises investor anxiety about sky-high valuations.

Traders also remain cautious ahead of a U.S. Presidential debate on Tuesday
and on fears a spike in new coronavirus cases in Europe could dent the
global economic recovery.

On the day, Chinese shares opened higher and helped to underpin Asian
markets after a tentative start. The blue-chip CSI 300 index was last up
0.3%, paring some of the early gains.

Sentiment in Asia was supported by weekend data that showed profits at
China's industrial firms grew for the fourth straight month in August buoyed
in part by a rebound in commodities prices and equipment manufacturing.

Economic indicators in August, ranging from exports to producer prices and
factory output, have all pointed to a further pickup in the industrial
sector thanks to a slew of measures to kick-start the world's second-biggest
economy. That has in turn has lent support to the global recovery, though
the spike in worldwide COVID-19 cases has raised fresh risks.

Elsewhere, Japan's Nikkei was 1.3% higher, partly on a lower yen, while
South Korea's KOSPI index gained 1.35%.

Australia's main share index reversed early losses to finish flat.

The broad gains in Asia follow a Wall Street rally on Friday though analysts
expect the gains to be short-lived as expectations for economic growth start
to falter.

Particularly worrying is a resurgence of COVID-19 cases in Europe, dousing
earlier hopes that authorities might have started to exert some control on
the outbreak and raising further strains on businesses already grappling
with losses.

"Clouds have started to gather over the developed world as political
uncertainty increases in the U.S. and Europe grapples with a resurgence in
COVID-19 cases," Kerry Craig, Global Market Strategist, J.P. Morgan Asset
Management.

COVID-19 cases are edging closer to 33 million around the globe with 992,470
reportedly dead with Europe seeing a surge in new infections.

"While governments are loathe to re-introduce nationwide lockdowns,
localised and sector based restrictions may last for some time, restraining
economic activity," Craig added.

Investor focus will next be on the first debate between U.S. President
Donald Trump and rival Joe Biden on Tuesday ahead of the November election.

A strong performance in Tuesday's debate by Biden, who currently has a
modest lead in betting odds and polls, might boost stocks related to global
trade and renewable energy, while a perceived victory by Trump could benefit
fossil fuel and defense companies.

Market focus will also be on progress on a new fiscal support package in the
United States while investors will be closely watching UK-Europe post-Brexit
trade talks as they continue this week.

In currencies, the dollar slipped from a near a two-week high against the
Japanese yen to 105.32.

The euro was last at $1.1629, not far from a two-month trough of $.1611
touched on Friday.

The British pound rose 0.3% to $1.2774.

The risk sensitive Australian dollar was slightly firmer at $0.7052 after
falling for six consecutive sessions as odds narrowed over the prospect of
further monetary policy easing in the country.

In commodities, oil prices came under pressure as renewed mobility curbs in
various countries to contain a resurgence of coronavirus cases cloud the
outlook on fuel demand recovery.

U.S. Brent crude slipped 37 cents to $41.55 a barrel while U.S. light crude
was down 39 cents at $39.86.

Gold was a shade weaker at $1,858.2, drifting away from an all-time peak of
above $2,000 an ounce touched in August.-yahoofinance

Naira Depreciation in Parallel Market to Continue - Analysts

Analysts have predicted that the depreciation of the naira in the parallel
market will continue due to back-log of unsatisfied demand for dollars.

They also cited rising dollar demand owing to increased economic activities
due to reduction in COVID-19 induced restrictions.

The naira depreciated further in the parallel market last week by N2 to N467
per dollar on Friday from N465 per dollar the previous week, though the
national currency was stable at N386 per dollar in the Investors and
Exporters (I&E) forex window.

These factors, according to analysts at Financial Derivatives reduce the
effect of the CBN $20,000 weekly sale to bureau de change on the parallel
market exchange rate.

Speaking in the FDC Bi-monthly Economic Bulletin issued last week, they
said: "The Central Bank of Nigeria, CBN's retail forex auction and weekly
forex allocation to Bureau De Change, BDCs are unlikely to stem forex demand
pressures due to the growing forex backlog and resumption in more economic
activities. This will continue to impact negatively on the exchange rate.

"The impact of increased forex demand could outweigh the effect of the CBN's
$20,000 weekly allocation to BDCs leading to a weaker exchange rate. This
will negatively affect industries that are highly dependent on imported
inputs."

Making similarly forecast, analysts at Cowry Assets stated: "In the new
week, we expect the exchange rate to remain stable at the Investors and
Exporters (I&E) forex window and the interbank forex market segment as most
foreign exchange forward contracts have settled below N400 per dollar they
were trading at couple of weeks ago amid relative stability in the global
crude oil market. "However, we may see increased pressure at the black
market amid unsatisfied demand in that segment".

Meanwhile, the decline in the Nigerian Treasury Bills (NTBs) yields is
expected to continue this week when the CBN resells (roll-over) N113.97
billion worth of maturing bills.

Financial Vanguard analysis shows average decline of 178 basis points (bpts)
in the stop rate of freshly issued NTBs also knowas Primary Market bills,
between January and September this year.

For example, the stop rate on 91-Days NTBs fell by 150 bpts to 2.5 percent
in primary market auction conducted by the CBN on September 16th from 4.0
percent recorded in December last year. Similarly, stop rates on the 182
Days and 364-Days bills fell by 215 bpts and 170 bpts respectively to 2.85
percent and 3.84 percent in September from 5.0 percent and 5.5 percent in
December.

This trend which started last year, when the stop rates on 91-Days and
182-Days bills fell by 690 bpts and 810 bptsrespectively, is driven by
increased demand for TBs, amidst reduction in volume of TBs offered by the
CBN. This development was rooted in the December 2018 decision of the Debt
Management Office (DMO) to reduce domestic borrowing and increase external
borrowing.

The trend was further aggravated by the October 2019 decision of the CBN to
ban local investors from participating in secondary market (Open Market
Operations, OMO) TBs thus restricting local investors to primary market TBs.

Analysts opined that this trend will persist this week, with the apex bank
taking advantage of the huge demand to further cut yields on primary market
TBs, when it resells (rollover) N113.97 billion worth of maturing primary
market TBs. Making this projection, analysts at Cowry Assets Management
Limited stated: "In the new week, T-bills worth N151.97 billion will mature
via the primary and the secondary markets which will outweigh T-bills worth
N133.97 billion to be auctioned by CBN via the primary market; viz: 91-day
bills worth N10 billion, 182-day bills worth N17.60 billion and 364-day
bills worth N106.37 billion. Hence, we expect the stop rates of the
issuances to decline amid demand pressure."-vanguard

SoftBank brings food service robot to labour-strapped Japan

TOKYO (Reuters) - SoftBank’s robotics arm said on Monday it will bring a
food service robot developed by California-based Bear Robotics to Japan as
restaurants grapple with labour shortages and a new socially distanced norm
as a result of the novel coronavirus.

The robot named Servi will act as a sort of waiter, using its layers of
trays to carry food and drinks and its 3D cameras and Lidar sensors to
navigate between kitchen and tables.

Servi will be launched in Japan in January and will cost 99,800 yen ($950)
per month excluding tax on a three-year plan, SoftBank Group Corp said.

The start up first showed a prototype to Softbank chief executive Masayoshi
Son last year and SoftBank led a $32 million round of investment in the
startup in January.

The launch leverages SoftBank’s long experience in bringing overseas
technology to Japan but reflects the shift away from Son’s earlier focus on
humanoid robots.

Servi has been tested by Japanese restaurant operators, including Seven & i
Holdings at its Denny’s chain, as the sector grapples with an aging
workforce and deepening labour shortages.

The launch comes as companies are scrambling to employ technology to offer
contactless service and ensure social distancing.

SoftBank’s humanoid Pepper robot became the face of the company following
its 2014 unveiling but failed to find a global customer base.

The firm in 2018 announced cleaning robot Whiz, which employs technology
from group portfolio company Brain Corp and has sold more than 10,000 units
worldwide.

SoftBank is touting the use of Whiz as a coronavirus countermeasure, and
said on Monday that Pepper can be used in conjunction with thermal sensors
to monitor customers.

Son has shifted from operating businesses to making investments in recent
years. This month, SoftBank announced the sale of cellphone distributor
Brightstar as it cuts links to the telecoms industry.

The group also owns Boston Dynamics, which developed the four-legged robot
Spot.

SoftBank has a history of troubled investments in the robotics sector.

($1 = 105.4800 yen)

Slimmer Siemens to shy away from massive deals after Energy spin off -
source

ZURICH (Reuters) - Siemens does not see an urgent need for massive
acquisitions to build up its size again after floating its turbine business
Siemens Energy on Monday, a source close to the company said.

Although the trains to industrial software maker has the financial muscle to
undertake big deals, transformational acquisitions bigger than 10 billion
euros ($) are not necessary, a source said.

Instead the Munich company will focus on smaller deals and internal
investment on areas such as research and development as it transforms from a
sprawling conglomerate to a company focused on factory automation, smart
buildings and transport.

Siemens still plans the separation of its mechanical drives business
Flender, but after that there are unlikely to be any more big spin-offs, the
source added.

Siemens’s train making mobility division, the subject of a failed merger
with France’s Alstom last year, will remain a key part of the company in
future, the source added.

Siemens declined to comment.

The spin-off of the energy business is the latest chapter in Siemens’s
transformation to a more focused industrial technology company.

The move opens the way for potential share price uplift as Siemens is freed
from the so-called conglomerate discount - which analysts estimate has
weighed down the company’s stock by more than 25% in recent years.

The move away from conglomerates to pure play companies is in vogue, with
Siemens’ rivals General Electric and ABB also selling off businesses.

In 2018 Chief Executive Joe Kaeser spun off healthcare unit Siemens
Healthineers, whose share price performance has significantly outpaced that
of Siemens.

“Conglomerates can do a lot of things well, but they’re really very good at
only a few of the things that will be important for the future,” Kaeser said
in July, saying they often lead to misallocation of resources.

Africa’s agricultural sector faces up to Covid-19 crisis

So far African agriculture has held up better under Covid-19 than many
feared, but what will the long-term consequences be? Charlie Mitchell
analyses the impact of the pandemic on the sector

Along the tarmacked border separating Kenya and Tanzania, hundreds of trucks
filled with perishable food sit in the heat. At the roadside, drivers lounge
on cardboard mats in patches of shade for up to a week as swabs are sent to
Nairobi for coronavirus testing. By the time drivers complete their
journeys, much of their cargo is putrid, and with many planes grounded,
Kenyans are seeing price hikes on supermarket shelves. 

That is just one of Africa’s 110 borders. The blockage offers a glimpse into
the devastation the Covid-19 pandemic is beginning to wreak on the
continent’s agricultural sector, which provides a livelihood to 60% of the
continent’s workers. 

The virus and its lockdowns affect African farmers, agribusinesses and SMEs,
as well as consumers and government departments involved in the sector,
which together comprise 23% of continental GDP. In various countries,
however, the picture was already less than rosy before the pandemic hit,
with 650m people facing food insecurity. 

For the optimist, the question arises: could the coronavirus turmoil present
an opportunity to reimagine food security and build resilience for the
future? 

Ever adaptable, African farmers have begun to experiment with apps and new
technologies. Meanwhile, policymakers and relief organisations are
refocusing on food production and provision. Pioneering policymakers are
prioritising food security and shifting to clean energy sources, such as
hydroelectric and solar. 

Better harvests

When it comes to agriculture, “Covid-19 appears not to have caused, so far,
as terrible a collapse as it might have done,” says Christopher Cramer, a
professor at SOAS, University of London. “Some parts of East Africa, West
Africa and very much of South Africa went into the pandemic on the back of
harvests that were much better than in the past few years.” 

Strong agricultural output in many major growing regions followed years of
drought. In South Africa, for instance, maize production in 2020 is expected
to be more than 30% higher than in previous years. All across the continent,
many planting seasons were drawing to a close when the pandemic escalated in
March, sparing farmers from the coming price fluctuations in agricultural
inputs. 

Experts are quick to point out that African food production and supply have
risen steadily since the 1960s, despite doom and gloom predictions,
particularly in countries such as Malawi, Ethiopia and Ghana. And yet the
industry has struggled in Zimbabwe and grown sluggishly in the likes of
Senegal and Côte d’Ivoire. 

Meanwhile, certain agricultural regions were already in trouble when
pandemic fears locked them down, principally East Africa, which is facing
floods and a locust infestation of proportions not seen in 70 years. In
Zimbabwe and Mozambique, rainfall in late 2019 was uncharacteristically
light, while conflict in Nigeria, South Sudan and the arid Sahel have
compounded food insecurity. And with commodity prices falling earlier this
year, growers of vital crops such as cocoa and coffee are edging towards
disaster. 

Still, in many regions, the pre-existing agricultural tailwinds have been
just enough to sustain agriculture sectors in the face of these challenges
and the coronavirus. 

On 28 February, an Italian man who works in Nigeria became sub-Saharan
Africa’s first official Covid-19 case. Since then, Africa as a whole has
recorded more than 860,000 cases, while many more will go unreported. While
numbers are mounting, this is not yet the devastating outbreak many feared. 

And yet an upsurge would lay bare the continent’s weak healthcare systems –
Nigeria, Africa’s largest economy, has just 450 ventilators for a population
of 200m – and direct attention away from security challenges in
conflict-prone areas. The prospect of a food crisis, however, has garnered
less attention. And yet, Africa is a net food importer to the tune of around
$47bn annually and is now facing border closures worldwide. 

Supply chain issues

“The first impact was on flower farmers in East Africa, who saw demand from
European markets essentially collapse,” says François Conradie, senior
political economist at NKC African Economics. “Supply chain issues have also
been relevant as imported inputs have become harder to come by.” 

For smallholder farmers across the region, seeds, fertiliser, animal feed
and crop protection instruments upon which they rely to maximise yields have
become scarce, or substantially more expensive, hindering production of
widely-consumed crops such as rice and maize, as well as Ethiopian coffee,
Kenyan horticulture and Ghanaian pineapples. 

Many agricultural SMEs have been forced to downsize or fold as food has
rotted on farms or in trucks, causing job losses, food insecurity and
poverty. Meanwhile, lockdowns have sucked the life out of the informal
sector, the primary source of employment in sub-Saharan Africa. 

According to World Bank data, 70% of Nigerian households have seen their
income fall, with volatility highest in rural areas where farming usually
pays the bills. 

Between late April and early June, Precision Agriculture for Development
(PAD), a Boston-based non-profit, surveyed nearly 1,500 Kenyan farmers and
agri-dealers. Eight in 10 agri-dealers reported a decrease in farmer
footfall, and 76% reported lower sales compared to a month earlier. 

Farmers, meanwhile, said the price of inputs had risen, and 55% said they
had been forced to borrow money in the preceding month to cover living
expenses. That stops them making important investments for the next harvest.

Long-term consequences

But the impact on farmers and pastoralists, who cannot move freely under
lockdown rules, is only half the story. Export cuts – due to reduced global
airfreight, collapsed demand from European, Asian and US markets and smaller
agricultural outputs – could cause inflation, which in turn could depreciate
African currencies. And most African nations have considerable external debt
stocks, paid in US dollars. 

“Governments find themselves having to spend more to cope with the pandemic
at the same time as these economic problems result in lower tax revenues, so
they borrow more,” says Conradie. “In the long term this is going to crowd
out productive investment spending and even some crucial spending on social
safety nets.” 

The implication of a farming crisis is a long-term hit to already vulnerable
African economies and less food for a continent whose population is set to
double in the next 30 years. That is why governments and institutions across
the continent must act now.

“States cannot rely easily on foreign investment or aid – they need to build
resilient export sectors and to take a national role in promoting change,”
says Professor Cramer. “Spending on public agricultural R&D needs to rise,
investment in irrigation needs to rise.” 

The African Development Bank has launched the Feed Africa Response to
Covid-19 (Farec), which has earmarked $10bn to support governments,
smallholders and the private sector. Importantly, it emphasises sustainable
growth in food production and distribution, and has already supported around
two dozen countries, creating “green corridors” to move agricultural
products and handing out loans. 

Meanwhile, agribusinesses themselves have pleaded with governments to
encourage cargo flights, through tax incentives, fuel subsidies and landing
charge waivers. In Kenya, international cargo flights have slowly picked up,
albeit at twice the price per kilo compared to the start of the year. 

Digital solutions

Farmers, too, continue to employ novel solutions, many of them digital, to
safeguard their agricultural incomes. PAD produces digital tools to advise
farmers on what to plant and when, as well as what equipment to use to
safeguard their crops. “Overall, 98% of agro-dealers reported communicating
with suppliers via mobile phone, and 70% reported receiving messages from
farmers about inputs at least once a day,” says Sam Strimling, a research
associate at PAD. Meanwhile, a collaboration between the UN’s Food and
Agriculture Organisation and Penn State University is allowing East African
farmers to pinpoint locust swarm locations for pesticide spraying. 

“Financial challenges experienced and anticipated by farmers as a result of
the pandemic were somewhat mitigated by optimism about forthcoming
harvests,” says Emmanuel Bakirdjian, Africa regional manager at PAD, “with
52% of farmers expecting a more bountiful harvest than the previous year.” 

The depreciation of African currencies, while a challenge at a governmental
level, could actually make life easier for farmers once freight picks up
again, by making local currency incomes higher for exporters and putting
more money in their pockets to purchase inputs domestically. 

“To make the most of the opportunity, we would need to see more willingness
from protectionist governments to tolerate currency weakness, and from
governments generally to focus on the improvements in the business and
investment environments,” says Conradie. In the past, countries such as
Nigeria have been reluctant to float their currencies, instead opting for
dollar pegs. 

Still, there is plenty more to be done and the lower-than-expected spread of
Covid-19 in Africa should not breed complacency. 

Hopes for the continent’s vaunted green revolution, built on rising
agricultural production over the past half-century, are not dead. But
governments must invest in irrigation, encourage a shift towards
digitisation, support smallholder farmers with loans and act now to limit
the long-term economic consequences of the coronavirus pandemic, before it
is too late.-africanbusinessmagazine

SoftBank brings food service robot to labour-strapped Japan