Major International Business Headlines Brief::: 26 April 2021

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Major International Business Headlines Brief::: 26 April 2021

 


 

 


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ü  Amazon must let workers join unions 'without fear'

ü  Cisco says computer chip shortage to last six months

ü  Social media boycott: Premier League clubs join four-day move to tackle
abuse

ü  Sainsbury's ex-boss buys into grocery app market

ü  Analysis: New U.S. credit benchmarks gain traction as Libor deadline
approaches

ü  Frustrated Canada presses White House to keep Great Lakes oil pipeline
open

ü  Asian shares pulled higher by China, eyes on Fed, U.S. GDP

ü  EXCLUSIVE-Worker group alleges unsafe practices at Marathon Minnesota
refinery

ü  Analysis: China digital currency trials show threat to Alipay, WeChat
duopoly

ü  Toshiba’s No.2 shareholder asks company to openly seek suitors

ü  Oil inches lower on concerns over COVID-19 surge in India, Japan

ü  French billionaires eye truce in battle for Lagardere media group -
sources

ü  Online bookmaker Betway parent to go public in merger with acquisition
firm

ü  Nigeria: Govt Rejects World Bank's Report On Nigeria's Power Sector

ü  Nigeria: Govt Bans Importation of Refined Sugar, Derivatives From Free
Trade Zones

ü  Nigeria-China N720bn Currency Swap Deal On Slow Pace 3 Years After

 

 

 

 

 

 

 

 


 <https://www.facebook.com/Hyundaizimbabwe/> 

 


 

Amazon must let workers join unions 'without fear'

Amazon workers in the UK and Ireland should be allowed to talk with and form
unions "without fear", the Unite union says.

 

It said the shopping giant, which has faced allegations of poor working
conditions, often tries to suppress union organising at its warehouses.

 

No UK Amazon warehouses are unionised, but by law workers could set one up.

 

Amazon said it respected its employees' right to "join, form or not to join
a labour union" of their choice.

 

Unite's call comes after workers in Alabama in the US, voted against forming
that country's first unionised Amazon warehouse.

 

Amazon - which would have had to negotiate on work rules and pay had it lost
- said the union did not represent the views of most staff.

 

However, the RWDSU union, which organised the Alabama effort, accused Amazon
of illegally interfering in the vote and lying about the implications of
unionisation in mandatory staff meetings.

 

Amazon denies the claims but did hire anti-trade union consultants before
the ballot.

 

'Without fear and obstruction'

Unite urged the shopping giant to sign a "neutrality declaration",
guaranteeing UK and Irish workers it would not try to stop union organising.

 

It noted that in September 2020, Amazon had posted two job adverts for
intelligence analysts to track labour "organizing threats" in the US. The
ads were later withdrawn.

 

It also flagged Spanish media reports which claimed Amazon had used private
detectives to spy on a strike at a warehouse near Barcelona on Black Friday
in 2019. At the time, the shopping firm called the claims "irresponsible and
incorrect".

 

In a letter to Amazon boss Jeff Bezos, Unite executive officer Sharon Graham
wrote: "Although we do have members in Amazon, workers in your company are
not currently free to join a union without fear and without obstruction and
propaganda being deployed against them.

 

"So I am asking you to sign up to and abide by the declaration attached,
which guarantees British and Irish workers the freedom to talk with and join
unions without fear of retribution."

 

'Daily conversations'

Amazon had its most lucrative year ever in 2020, helped by a surge in online
shopping during the pandemic. But it also faced allegations over poor
working conditions, as well strikes at warehouses in the US, Italy and
Germany.

 

The shopping giant say it offers workers competitive salaries and benefits,
and created 10,000 permanent jobs in the UK last year, taking its workforce
to 40,000.

 

Amazon told the BBC its respected the right of its staff to be in a union.

 

A spokesman added: "Across Amazon, including in our fulfilment centres, we
place enormous value on having daily conversations with each associate and
work to make sure direct engagement with our employees is a strong part of
our work culture.

 

"The fact is, we already offer excellent pay, excellent benefits and
excellent opportunities for career growth, all while working in a safe,
modern work environment. The unions know this."--BBC

 

 

 

Cisco says computer chip shortage to last six months

The boss of networking giant Cisco has said the shortage of computer chips
is set to last for most of this year.

 

Many firms have seen production delayed because of a lack of semiconductors,
triggered by the Covid pandemic and exacerbated by other factors.

 

Cisco chief Chuck Robbins told the BBC: "We think we've got another six
months to get through the short term.

 

"The providers are building out more capacity. And that'll get better and
better over the next 12 to 18 months."

 

That expansion of capacity will be crucial as advances in technology -
including 5G, cloud computing, the internet of things and artificial
intelligence - drive a big increase in demand.

 

Mr Robbins is the latest tech boss to weigh in on the debate - and with 85%
of internet traffic using Cisco's systems, his opinion matters.

 

"Right now, it is a big problem," he says, "because semiconductors go in
virtually everything."

 

The seemingly insatiable demand is why major US manufacturer Intel announced
a $20bn (£14.5bn) plan to significantly expand production, including two new
plants in Arizona.

 

According to Dan Ives, a tech analyst at investment firm Wedbush Securities,
current "demand is probably 25% higher than anyone would have expected".

 

Even though the shortage "is going to be an issue for the next three to six
months", technology share prices are doing well because investors are
focused on the growing long-term demand for their products.

 

US President Joe Biden also sees this as a long-term issue and used a White
House summit with business leaders this month to urge them to make the
country a world leader in computer chips. Amid the trade and technology war
with China, the White House says it is "a top and immediate priority".

 

The US-based Semiconductor Industry Association says 75% of global
manufacturing capacity is in East Asia. Taiwan's TSMC and South Korea's
Samsung are the dominant players.

 

European politicians also want more chips made locally, a view partly driven
by concerns over China's desire to achieve reunification with Taiwan.
Meanwhile, China has seen a huge growth in domestic demand for chips to
power new technology, but has only a small share of global manufacturing
capacity.

 

Mr Robbins says: "I think that it doesn't necessarily matter where they're
made, as long as you have multiple sources."

 

However, Intel chief executive Pat Gelsinger told the BBC it was not
"palatable" to have so many chips made in Asia.

 

TSMC appears intent on holding on to its position as the world's biggest
contract manufacturer and is spending $100bn to expand capacity over the
next three years.

 

This week its founder, Morris Chang, called on the Taiwanese government to
"keep hold of it tightly", arguing it is better positioned to make chips
than the US or China, despite their big government subsidies.

 

The chip shortage was heightened by the coronavirus pandemic. At first, many
companies cut their orders for chips, thinking demand would fall, which led
suppliers to reduce capacity. However, demand for consumer electronics rose
during the pandemic.

 

The problems have been worsened by a string of other factors, including a
fire at a semiconductor factory and weather issues.

 

This, combined with a "generational technological change has created an
unprecedented situation for the industry", according to Paul Triolo, who
leads the geo-technology practice at consultancy Eurasia Group.

 

He thinks it doesn't matter where chips are made as long as there is a
diversity of supply. However, the shortages are likely "to persist for some
time" and longer-term solutions are needed to address the concentration of
manufacturing of semiconductors, which is a "problem that predates the
shortage".

 

That is why Mr Robbins says: "What we don't want is to have consolidation
where any of the risks that we may face could, frankly, result in the
situation we're seeing today, whether it's weather-related disaster risks,
whether it's single point of failure risk, whether its geopolitical risks,
whatever those are. We just need more options, I think, for where
semiconductors are built."

 

Cisco recently completed the $4.5bn acquisition of Acacia Communications,
which, among other things, designs computer chips. Mr Robbins ruled out
Cisco using it as an opportunity to start making its own chips.

 

"We're not a semiconductor fab company, so it's not a core competency for us
to do that. So we think that companies that play in this space are much
better equipped, we're working very closely with them."

 

The huge cost of chip manufacturing facilities means they operate at near
full capacity and so it will take time to meet the increased demand.

 

The size of that demand "is not clear", according to Mr Triolo. He says
that, like other major technology vendors, "Cisco's equipment relies heavily
on reliable supply chains for a range of semiconductors."

 

The shortages, he says, have been "exacerbated by companies over ordering
components to build up inventory, afraid of being caught short again".-BBC

 

 

 

Social media boycott: Premier League clubs join four-day move to tackle
abuse

Premier League, English Football League and Women's Super League clubs will
join in a four-day boycott of social media platforms in an effort to combat
abuse and discrimination.

 

The boycott will start on 30 April.

 

The Football Association, as well as league bodies and other organisations,
including anti-discrimination charity Kick it Out, will also be involved.

 

"This boycott signifies our collective anger," said Kick it Out's chairman
Sanjay Bhandari.

 

"Social media is now sadly a regular vessel for toxic abuse.

 

"By removing ourselves from the platforms, we are making a symbolic gesture
to those with power. We need you to act. We need you to create change.

 

"We need social media companies to make their platforms a hostile
environment for trolls rather than for the football family."

 

Sheffield United's David McGoldrick, who was racially abused last year,
welcomed the move, saying: "It is about time. What has gone off on social
media, it has happened to me.

 

"It has happened to many players. Something needs to happen, it is too
easily to get racially abused on there."

 

Speaking to Sky Sports on Saturday night after scoring in his side's 1-0 win
over Brighton, the striker added: "The Super League got cut off in 48 hours,
why is racism on the back foot? It is bigger in my eyes."

 

Brighton forward Neal Maupay has also been the subject of online abuse and
he told Sky Sports the boycott was a "very good" move.

 

"The players get a lot of abuse online and we need to fight it. It's a good
way to do it. It's good that we are in this together," the Frenchman said.

 

The Football Supporters' Association, League Managers' Association, Women in
Football, Women's Championship and its clubs as well as refereeing body
Professional Game Match Officials Limited (PGMOL) have also committed to the
boycott of Twitter, Facebook and Instagram.

 

The move will come three weeks after Swansea City turned off their social
media accounts for a week to make a stand against abuse following a number
of their players being targeted.

 

Championship rivals Birmingham City and Scottish champions Rangers followed
Swansea's lead in announcing a boycott of social media.

 

Former Arsenal and France striker Thierry Henry removed himself from all
social media in March because of racism and bullying across platforms.

 

In an interview with BBC's Newsnight programme, the 43-year-old said "enough
was enough" and that he had to make a stand against racism on social media.

 

Earlier in April, Liverpool said racist abuse on social media "cannot be
allowed to continue" after Trent Alexander-Arnold, Naby Keita and Sadio Mane
were targeted in April.

 

A joint statement from English football's governing bodies said the boycott
is a way "to emphasise that social media companies must do more to eradicate
online hate", while also "highlighting the importance of educating people".

 

"Boycott action from football in isolation will, of course, not eradicate
the scourge of online discriminatory abuse, but it will demonstrate that the
game is willing to take voluntary and proactive steps in this continued
fight," the statement continued.

 

The FA's director of equality and diversity Edleen John said "English
football will not tolerate discrimination in any form".

 

"We are calling on organisations and individuals across the game to join us
in a temporary boycott of these social media platforms, to show solidarity
and unite in the message," she said.

 

"Social media companies need to be held accountable if they continue to fall
short of their moral and social responsibilities to address this endemic
problem."

 

Report

The UK government has previously threatened social media companies with
"large fines" which could amount to "billions of pounds" if they fail to
tackle abuse on their platforms.

 

Facebook said in February that tougher measures would be taken to tackle the
issue.

 

Last week, Instagram - which is owned by Facebook - announced a tool to
enable users to automatically filter out abusive messages from those they do
not follow on the platform.-BBC

 

 

 

Sainsbury's ex-boss buys into grocery app market

Former Sainsbury's boss Justin King has taken a stake in the fast-growing
grocery delivery app market.

 

The Snappy Group said Mr King was now a senior adviser to it and had made "a
significant personal investment".

 

The Dundee-based group's Snappy Shopper app service offers goods from local
convenience stores in 30 minutes.

 

Deliveroo does the same for big supermarkets, while a host of new app-based
services deliver from their own warehouses in as little as 10 minutes.

 

Snappy Shopper does not claim to be as fast as fellow start-ups such as
Weezy, Dija, Zapp and Getir.

 

However, it does cover much more of the UK, with most of its rivals
currently confined to parts of London and selected other cities.

 

It partners with convenience stores including Spar, Nisa and Costcutter,
directing users of its app and website to the nearest local participant and
charging £1.95 for delivery.

 

"Fundamentally these shops are located in brilliant locations to serve their
local communities," Mr King told the Sunday Times.

 

"They are fantastic distribution assets, but they don't have the wherewithal
to go online."

 

Pandemic boost

The Snappy Group said its aim was to "democratise e-commerce technology by
providing an affordable solution to local businesses, enabling them to
compete in the fast-growing home delivery market".

 

It said Mr King, who was chief executive of Sainsbury's between 2004 and
2014, would become a non-executive director once its current fundraising
round was complete.

 

Since the coronavirus pandemic struck, the market for home delivery of
groceries has become more intense, with many people preferring to avoid
physical shops for fear of catching the virus.

 

While most of the big supermarkets run online shopping services of their
own, they have also increasingly turned to apps such as Deliveroo to provide
customers with a convenient way of getting a small number of items in a
hurry.

 

Sainsbury's, for instance, has recently expanded its partnership with
Deliveroo, meaning that about 30% of the population can now choose from some
1,000 Sainsbury's products within 20 minutes.

 

As a tech platform, Snappy Shopper is attempting to level the playing field,
by giving smaller players the same opportunity to reach shoppers at home.

 

It pre-dates the pandemic, since it was founded in 2017.

 

However, Snappy Shopper does not employ any drivers. All deliveries are
organised and carried out by its partner stores themselves.-BBC

 

 

Analysis: New U.S. credit benchmarks gain traction as Libor deadline
approaches

New U.S. bank credit benchmarks are expected to gain traction in the coming
months as the deadline to phase out exposure to the discredited Libor
approaches, even as regulators continue to push an alternative called the
Secured Overnight Financing Rate (SOFR).

 

Investors are facing a year-end deadline to stop basing new loans and trades
on Libor, an acronym for the London Interbank Offered Rate. Some Libor rates
will stop being published at the after Dec. 31, while others are scheduled
to end in mid-2023.

 

Libor is being phased out as a reference rate due to concerns about the
amount of derivatives using the rate, which in many cases is based on
assumptions about their borrowing costs and not actual trades, and after it
was manipulated before and during the financial crisis.

 

The shift will require more than $200 trillion in trades and loans to move
to new benchmarks. The move will also likely result in several new indexes
gaining prominence, reducing the historical reliance on just one key rate.

 

Most derivatives contracts based on Libor are expected to migrate to SOFR,
the benchmark endorsed by regulators to replace Libor. This index is based
on around $1 trillion in daily loans in the U.S. overnight repurchase
agreement market.

 

But many banks and investors want a rate that includes a bank credit
component for loans and will instead turn to alternatives.

 

Richard Sandor, chairman and CEO of the American Financial Exchange, which
offers the Ameribor index, said that the shift away from Libor is an
opportunity that “occurs once in 100 years,” adding that he has “never been
more bullish.”

 

Ameribor and Bloomberg’s Short-Term Bank Yield Index (BSBY) are gaining
interest as benchmarks for loans, though the move is in its early stages.
ICE Benchmark Administration, part of the Intercontinental Exchange (ICE.N),
also plans to offer the U.S. Dollar ICE Bank Yield Index as a Libor
replacement.

 

Zions Bancorporation (ZION.O) said this month that it will use Ameribor as a
replacement for Libor in most of its non-syndicated commercial loans.

 

Banks want loans to include a measure of their borrowing rates in case these
costs increase.

 

Bank of America (BAC.N) also said last week that it has issued a $1 billion,
six-month floating rate note referencing Bloomberg’s index. Standard &
Poor’s and Fitch Ratings have both indicated that BSBY meets their
requirements as a money market reference rate, opening the door to money
fund investments in notes based on the index.

 

“BSBY could become an increasingly common benchmark rate. It has several
desirable features relative to SOFR,” said Daniel Krieter and Daniel Belton,
analysts at BMO Capital Markets.

 

Market participants were frustrated after the Alternative Reference Rate
Committee (ARRC), a group of market participants that selected SOFR to
replace Libor, said in March that it will not be able to recommend a forward
looking SOFR rate by mid-year, its former target date.

 

The CME Group (CME.O) has since said that it will offer SOFR term rates
based on its SOFR futures trading.

 

The New York Federal Reserve began publishing SOFR in April 2018, but the
shift away from Libor has been slow.

 

Around $223 trillion worth of contracts now reference U.S. dollar Libor,
compared with $199 trillion at the end of 2016, the ARRC said last month.

 

Most derivatives are expected to shift to SOFR, though a portion of the
market used to hedge loans is expected to reference the credit alternatives.

 

Trading in the CME Group’s SOFR futures rose to a record 112,000 average
daily contract volume in the first quarter, though this remains well below
the 2.72 million in average daily contract volumes for Eurodollar futures
based on Libor.

 

The CME has said that it will shift any remaining eurodollar contracts based
on Libor to SOFR futures when the Libor rate stops being published in
mid-2023.

 

For many, the solution going forward may also be a hybrid that includes SOFR
as a base and adds a credit component when desired.

 

“I’m pretty much convinced SOFR will be the dominant rate going forward and
you will have participants who will choose to add a systemic spread onto
that to take you to something like a synthetic Libor,” said Padhraic Garvey,
regional head of research, Americas, at ING.-The Thomson Reuters Trust
Principles.

 

 

 

Frustrated Canada presses White House to keep Great Lakes oil pipeline open

Canada is pushing on several diplomatic fronts against the U.S. state of
Michigan's efforts to close a cross-border oil pipeline, the second such
dispute since Joe Biden became U.S. president in January, complicating the
governments' efforts to work together to lower carbon emissions.

 

The conflict over the aging but key pipeline highlights the disruptions
caused by a global shift away from fossil fuels. Both governments are
working to accelerate the energy transition, but their oil industries are
interdependent, so a policy shift in one country can affect energy supply,
and the political balance, in the other.

 

The United States imports more crude from Canada than any other nation, at
about 3.7 million barrels per day, or about 80%of Canada's crude output.

 

Ottawa's strategy, according to four sources familiar with the government's
thinking, is to repeatedly raise the issue of Enbridge Inc's (ENB.TO) Line 5
with numerous U.S. counterparts - including Biden - to get them to pressure
Michigan's Democratic Governor Gretchen Whitmer to keep the pipeline open.

 

Last November, Michigan ordered Line 5 to shut by May 13, citing the
environmental risk of a possible leak in the four-mile (6-km) stretch of the
540,000-bpd line passing under the Straits of Mackinac in the Great Lakes.

 

The White House has shown no sign of responding to Canadian entreaties, so
Ottawa is considering more drastic options, including a threat to invoke an
obscure bilateral treaty to keep Line 5 operating or intervene in the legal
dispute currently playing out in U.S. courts.

 

Line 5, which flows crude oil and refined products from Wisconsin to Sarnia,
Ontario, via Michigan, has been in operation for nearly 70 years, but
officials in Michigan are increasingly alarmed by its advanced age.

 

The line has never leaked into the straits but there have been at least
eight other spills since 1980, according to U.S. Pipeline and Hazardous
Materials Safety Administration data.

 

The imbroglio over Line 5 comes just three months after Biden angered the
Canadian oil and gas industry by cancelling a permit for the long-delayed
Keystone XL pipeline project on his first day in office.

 

Canadian Prime Minister Justin Trudeau's government reluctantly accepted
that decision, even though it killed thousands of construction jobs and
further soured Ottawa's relationship with the main energy-producing province
of Alberta.

 

Ottawa has resolved to fight publicly to keep Line 5 open, which - unlike
Keystone - is already operating and a vital link in Enbridge's export
network that ships the vast majority of crude from Canada's western oil
patch to the United States.

 

DOZENS OF MEETINGS

 

Canadian government officials are frustrated by how much time they are
spending on the matter, the sources said.

 

Canada has discussed the pipeline's fate in dozens of bilateral meetings,
including 23 virtual meetings between lawmakers and U.S. members of
Congress, according to a spokesman for Canada's Natural Resources Minister
Seamus O'Regan.

 

"Clearly Line 5 is an important issue for the government of Canada ... at
the same time we need to be advancing on a cooperative basis the work we're
doing on climate action," Canada Environment Minister Jonathan Wilkinson
told Reuters earlier this month.

 

Wilkinson raised the pipeline on Feb. 24 during a meeting with U.S. climate
envoy John Kerry. Trudeau also raised Line 5 with Biden when the two met in
February to discuss making global warming a joint priority. The Canadian
prime minister attended a U.S. international climate summit hosted by Biden
last week.

 

Neither Kerry nor the White House responded to a request for comment.

 

Calgary-based Enbridge has refused to shut the pipeline, arguing the
governor's order needs to be backed by a judge. The case is being heard in
U.S. federal court and the two parties started mediation on April 16. read
more

 

Enbridge spokesman Ryan Duffy said a negotiated solution would be in the
best interests of all parties.

 

Trudeau's administration is mulling whether to take part in the legal
challenge by filing an amicus, or "friend of the court" brief, which would
explicitly lay out their reasons for backing Enbridge, said a source
directly familiar with the matter.

 

Ottawa is also considering invoking the never-before-used 1977 Transit
Pipelines Treaty, designed to stop U.S. or Canadian public officials from
impeding the flow of oil in transit.

 

"The federal government continues to have a role to play, and we appreciate
what they've done to date," Enbridge's Duffy said.

 

SPINAL CORD

 

Line 5 is key to fuel supply for the Great Lakes region on both sides of the
border, helping supply an area with a population of more than 40 million
people.

 

Environmental campaigners have long been concerned Line 5 could leak into
the straits. Whitmer, a Biden ally, made shutting it a key promise in her
2018 gubernatorial campaign.

 

Wilkinson, after meeting with Kerry, told reporters that "the issue in
Michigan is the governor."

 

Canada's Ambassador Kirsten Hillman and Infrastructure Minister Catherine
McKenna have both met separately with Whitmer, but she has not changed her
stance.

 

A spokeswoman for Whitmer told Reuters that the governor stands behind her
decision to close the pipeline.

 

Enbridge said shutting Line 5 would cause fuel shortages and gas price
spikes, and require 15,000 trucks and 800 rail cars a day to replace
deliveries to Ontario. Michigan would also need truck transport to account
for lost propane delivery, while refineries in Ohio and Michigan would need
to secure supply from other suppliers.

 

Scott Archer, business agent with Local 663 Pipefitters Union in Sarnia,
home to three of Ontario's refineries, described Line 5 as the "spinal cord
of Ontario's infrastructure" in testimony to Canadian lawmakers.

 

"Shutting down Line 5 will in effect kill my hometown... and many more
places like it in Canada and the U.S.," he said.-The Thomson Reuters Trust
Principles.

 

 

 

Asian shares pulled higher by China, eyes on Fed, U.S. GDP

Asian stocks rose on Monday with Chinese shares near three-week highs as
signs the world economic recovery was well on track bolstered risk appetite,
while the U.S. dollar slipped to a two-month low.

 

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)
jumped 0.3% to surpass critical chart resistance of 700 points and reach its
highest since March 18.

 

The index has had a strong run lately as it clocked its second consecutive
weekly rise on Friday and was on track for another month of gains. Since
April 2020, the index has offered positive returns in all but three months.

 

Chinese shares were firm with the blue-chip CSI 300 index (.CSI300) up 0.4%
to its highest since Apr. 6.

 

South Korea's KOSPI index (.KS11) rose 0.4% while New Zealand shares added
0.6%.

 

Japan's Nikkei (.N225) reversed early losses to be up 0.1% while Australia's
benchmark share index (.AXJO) was off a touch with a public holiday in five
of the country's eight states and territories.

 

Risk appetite was whetted by early April manufacturing activity indicators
out last week, which pointed to a robust start to the second-quarter with
data hitting record highs in the United States and signalling an end to
Europe's double dip recession.

 

Investors embraced the strong data, shrugging off earlier concerns about
potential higher U.S. taxes on capital gains under the Biden administration.

 

On Friday, U.S. shares ended firmer with the S&P 500 (.SPX) hitting a record
intraday peak to end 1.1% higher. The Dow (.DJI) rose 0.7% while the Nasdaq
Composite (.IXIC) added 1.4%.

 

E-mini futures for the S&P 500 gave up early losses to be flat on Monday.

 

First-quarter U.S. gross domestic product data is due later in the week with
expectations activity will have likely returned to pre-pandemic levels.

 

"We estimate that the economy will close the output gap and rise above
potential in the second half of this year," ANZ economists wrote in a
morning note, suggesting more upside for shares.

 

Europe "cannot match this, but as 2021 progresses into 2022, the growth
differential to the U.S. will narrow."

 

That said, some economists say the market could hit a soft patch in coming
months reflecting concerns ranging from rising COVID-19 cases and worries
that most of the benefits from massive fiscal stimulus have already been
priced in. read more

 

"Stated differently, this may be the last quarter where companies can avoid
being penalized for not seeing revenue recover quickly and/or not giving
guidance," JPMorgan analysts wrote in a note.

 

They said the "bull case" for equities would be supported by reopening from
coronavirus lockdowns, consumer spending and corporate earnings combined
with reduced market volatility.

 

The "bear case", on the other hand, would be triggered by inflation, delays
to re-opening, weaker economic growth and corporate profits and a commodity
recession.

 

Strong recent data meant bonds were sold off, though 10-year U.S. Treasury
yields were not far from a recent six-week low on expectations the U.S.
Federal Reserve will stay accommodative at its meeting this week.

 

In currencies, Turkey's lira edged lower adding to a recent slide and
nearing an all-time low as a chill settled on relations with the United
States and after the new central bank chief signalled that rate hikes would
harm the economy. read more

 

The U.S. dollar's index slipped to 90.739 against a basket of major
currencies, a level not seen since March 3.

 

The greenback was a shade weaker on the safe-haven Japanese yen at 107.76.
The euro rose 0.1% at $1.2105. The risk sensitive Australian dollar stayed
trapped in a narrow band to be last at $0.7762.

 

In commodities, U.S. crude rose 4 cents to $62.18 per barrel and Brent was
flat at $66.11.

 

Gold climbed 0.1% to $1,778.92 an ounce.-The Thomson Reuters Trust
Principles.

 

 

 

EXCLUSIVE-Worker group alleges unsafe practices at Marathon Minnesota
refinery

(Reuters) - Inadequate safety standards at Marathon Petroleum's St. Paul
Park refinery in Minnesota have caused avoidable hydrocarbon and chemical
releases that pose a threat to the community, a local worker advocacy group
said in a report on Sunday, as a lockout of unionized plant workers extends
into its third month.

 

The report by Local Jobs North, a union-backed organization, said that lax
safety standards at the plant led to mistakes that could have ignited
volatile hydrocarbons. It also cited inadequate installation of safety
controls for pipe repair operations and use of poorly constructed
scaffolding.

 

In a statement to Reuters responding to the report, Marathon MPC.N defended
its procedures and commitment to safety.

 

"The safety of our employees, contractors, business partners, customers and
the community is, and always will be, our number-one priority," Marathon
said, adding that "any suggestion that individuals who perform work at our
refinery are not trained and qualified to do so is baseless."

 

The report, which was reviewed by Reuters, said that Marathon eliminated
dedicated safety positions and removed experienced maintenance contractors
to save on costs after taking over the plant in 2018. The report was based
largely on information from employees who asked to remain anonymous due to
fear of retaliation, according to its co-author Kevin Pranis, marketing
manager for the Laborers' International Union of North America branch in
Minnesota and North Dakota.

 

Despite a general improvement in safety metrics at U.S. refineries, there
have been some incidents at these facilities in recent years that have
killed and injured workers as a result of aging equipment and human error,
often by untrained employees.

 

Marathon said it selects contractors through a comprehensive evaluation
process, that they receive training for specific roles and meet federal and
state regulations, and that independent auditors vet contractor health and
safety programs.

 

"Our rigorous selection process has resulted in both qualified
union-represented and non-represented contractors safely and successfully
performing work at the refinery," Marathon added.

 

Workers from a local Teamsters union have said they have been locked out of
the 102,000-barrel-per-day plant since Jan. 21. They have said they opposed
Marathon's use of more non-union and out-of-state labor, citing safety
concerns.

 

Minnesota Governor Tim Walz and other state officials have urged the refiner
to end the lockout due to safety concerns.

 

The refinery has changed owners four times in the past decade, creating a
"hodgepodge" of safety standards, the report said. It called on Marathon to
end the lockout, investigate safety concerns, resume using local
contractors, restore full funding to the refinery's fire department and
adopt a new contractor policy.

 

"I've seen untrained subcontractors use life-critical safety equipment such
as self-contained breathing apparatus incorrectly," Matt Foss, a 22-year
veteran of the plant who is currently locked out, said in the report.

 

In a separate interview with Reuters, Foss said, "As a firefighter, I feel
this is unsafe for myself and the community, especially because we deal with
hazardous chemicals regularly."

 

Marathon said in its statement that employees must adhere to safety rules,
and that any employee can stop a project if they deem it unsafe.

 

The report said the conditions at St. Paul Park are significantly less safe
than at the nearby Flint Hills Pine Bend refinery owned by Koch Industries.

 

"The scaffolding standards at St. Paul Park ... are at the bare minimum that
would keep workers from getting hurt," Mike Sundsmo, a pipefitter who worked
at St. Paul Park and Flint Hills Pine Bend refinery, said in an interview.

 

Sundsmo added that after being furloughed in March 2020, Marathon stopped
using his union for contract work.

 

The report's authors arranged the Reuters interviews with Foss and
Sundsmo.-The Thomson Reuters Trust Principles.

 

 

 

Analysis: China digital currency trials show threat to Alipay, WeChat
duopoly

Shanghai - In China’s commercial hub Shanghai, six big state banks are
quietly promoting digital yuan ahead of a May 5 shopping festival, carrying
out a political mandate to provide consumers with a payment alternative to
Alipay and WeChat Pay.

 

The banks are persuading merchant and retail clients to download digital
wallets so that transactions during the pilot programme can be made directly
in digital yuan, bypassing the ubiquitous payment plumbing laid by tech
giants Ant Group, an affiliate of Alibaba 9988.HK, and Tencent 0700.HK.

 

"People will realise that digital yuan payment is so convenient that I don't
have to rely on Alipay or WeChat Pay anymore," said a bank official involved
in the rollout of e-CNY for the Shanghai trial, under the guidance of
China's central bank. The official is not authorised to speak with media and
declined to be identified.

 

China's development of a sovereign digital currency, which is far ahead of
similar initiatives in other major economies, looks increasingly poised to
erode the dominance of Ant Group's Alipay and Tencent's WeChat Pay in online
payments.

 

That turf encroachment coincides with Beijing's expanding effort to clamp
down on anticompetitive behaviour in the internet sector, part of a wider
reining in of the clout of sector heavyweights.

 

Regulators scuppered Ant's record $37 billion IPO in November and earlier
this month imposed a sweeping restructuring on the fintech conglomerate
controlled by Jack Ma. Ma's Alibaba Group Holdings was recently hit with a
record $2.8 billion antitrust penalty.

 

In public, the People's Bank of China (PBOC) says e-CNY won't compete with
AliPay or WeChat Pay, and serves only as a "backup" or "redundancy". (Full
Story)

 

But in private, state banks marketing the digital fiat currency for the
central bank bluntly describe Beijing's intention to undercut the duo's
dominance.

 

"Big data is wealth. Whoever owns data thrives," said another banking
official tasked with promoting the e-CNY.

 

"WeChat Pay and Alipay own an ocean of data," so the e-CNY rollout
facilitates China's anti-trust campaign and helps the government control big
data, he added.

 

The PBOC and Tencent declined to respond to requests for comment.

 

Ant declined to comment on the relationship between Alipay and e-CNY.
Ant-backed MYbank said it is "one of the parties participating in the
research and development" of the e-CNY, and "will steadily advance the trial
pursuant to the overall arrangement of the People's Bank of China."

 

DIGITAL CASH

 

The e-CNY digitalises a portion of China's physical notes and coins, or
currency in circulation (M0), and was launched last year in small pilot
schemes in four cities.

 

Under a two-tier distribution system, the PBOC issues the digital currency
to banks, which pass the money to individuals and companies.

 

The six banks in the e-CNY pilot schemes include China's biggest lenders
such Industrial and Commercial Bank of China, Agricultural Bank of China,
Bank of China, and China Construction Bank.

 

"The e-CNY's ease of use will likely be comparable to Alipay and WeChat Pay,
while its security function will likely be higher, and as sophisticated as
Bitcoin," HSBC wrote in a recent report, adding that it expects the digital
currency to "proliferate" within China.

 

Among a slew of likely motivations cited by HSBC behind the push is the
central bank's desire to gain control of payment channels and consumption
data from Alipay and WeChat Pay.

 

CONSPICUOUSLY ABSENT

 

Digital wallets, which are still being beta tested, can be bundled with a
dozen popular apps including Meituan, JD.com, Didi and Bilibili, but
conspicuously can not be linked to WeChat or Alipay. That means none of the
participating banks can transfer e-CNY between their digital wallets and the
two established payment platforms.

 

"PBOC doesn't want to see the money being routed through third-party payment
systems," a banker said, citing the need for "information segregation".

 

The e-CNY will digitize "the last mile" of consumption, enabling banks and
merchants to capture data and gain insights into spending patterns, said
Wilson Chow, Global TMT Leader, PwC China.

 

That data is now dominated by Alipay and WeChat Pay, which control a
combined 94% of China's online payment market.

 

Mass adoption of the e-CNY won't happen overnight.

 

Chow predicts that e-CNY will account for roughly 10% of China's electronic
payments market in a few years, co-existing with Alipay and WeChat Pay.

 

To entice users, bankers said the PBOC will likely give "red envelopes" of
free digital cash or discounts to Shanghai citizens around the upcoming
shopping festival, an event aimed at promoting spending to fuel economic
recovery from COVID-19.

 

PBOC deputy governor Li Bo told a forum last week that domestic adoption
will precede cross-border payments with e-CNY, which many analysts believe
will bolster the yuan's global status as China seeks ultimately to break the
dominance of the dollar settlement system.

 

"The priority of the yuan's digitalization is currently to promote its
domestic use," Li said.-The Thomson Reuters Trust Principles.

 

 

 

Toshiba’s No.2 shareholder asks company to openly seek suitors

Toshiba Corp’s (6502.T) second-biggest shareholder called on the Japanese
conglomerate to conduct a strategic review and explicitly solicit suitors,
criticising the company’s comments on wanting to remain listed as deterring
potential acquirers.

 

"We call upon the board to openly welcome interest from suitors who could
enhance corporate value and ask the board to conduct a formal review of
strategic alternatives," 3D Investment Partners said in a letter sent to
Toshiba's board on Monday and made public.

 

"To conduct a fair and proper process, Toshiba should explicitly indicate
that it is open to alternative ownership structures and correct media
speculation that Toshiba's management team and board have a strong
preference for remaining a listed company," 3D, which has a 7.2% stake in
Toshiba, said.

 

Toshiba dismissed last week a $20 billion buyout offer from CVC Capital
Partners as lacking detail.

 

The industrial conglomerate has said it believed that being publicly traded
provided a "capital structure suitable for enhancing long term value
creation" but added that its board would not disregard various proposals,
including those to take the company private.

 

Bain Capital, KKR & Co Inc (KKR.N) and Canada’s Brookfield Asset Management
(BAMa.TO) are also looking at potential bids for Toshiba, Reuters has
reported.

 

Toshiba had no immediate comment on the letter.

 

Its shares were up 0.3% at 4,425 yen by midday on Monday.

 

In the letter, Singapore-based 3D said it estimated Toshiba's fair stock
value in excess of 6,500 yen.-The Thomson Reuters Trust Principles.

 

 

 

Oil inches lower on concerns over COVID-19 surge in India, Japan

Oil prices eased slightly on Monday on concerns that a resurgence of
coronavirus infections in India and Japan, the world's third and fourth
largest oil importers, would cut fuel demand in Asia.

 

Brent crude futures fell 8 cents, or 0.1%, to $66.03 a barrel by 0058 GMT,
following a 1.1% rise on Friday. U.S. West Texas Intermediate (WTI) crude
futures were down 4 cents, or 0.1%, at $62.10 a barrel, after rising 1.2% on
Friday.

 

Both benchmark crudes fell about 1% last week.

 

"Market sentiment was dented on worries that surging number of COVID-19
cases in some countries, especially in India, will slash fuel demand,"
Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.

 

Prime Minister Narendra Modi urged all citizens to be vaccinated and
exercise caution, saying on Sunday the "storm" of infections had shaken
India, as the country set a new global record for the most COVID-19
infections in a day. read more

 

In Japan, a third state of emergency in Tokyo, Osaka and two other
prefectures began on Sunday, affecting nearly a quarter of the population as
the country attempts to combat a surge in cases three months before the
Tokyo Olympics is set to open. read more

 

"Investors, including speculators, have been shifting funds from oil markets
to grain markets recently as volatility has been much higher in prices of
corn and other grains," Fujitomi's Saito said.

 

Chicago corn, wheat and soybeans hit multi-year highs last week as concerns
over cold weather damage to crops across the U.S. grain belt underpinned
prices, along with expectations for more use of agricultural products for
biofuels.

 

The Organization of the Petroleum Exporting Countries and allies led by
Russia, known as OPEC+, will hold a largely technical meeting this week,
with major changes to policy unlikely, Russian Deputy Prime Minister and
OPEC+ sources said last week.

 

A technical committee meeting is set for Monday, where market fundamentals
and compliance with production cuts will be discussed. read more

 

The producer group surprised the market at its April 1 meeting by agreeing
to gradually ease record cuts in oil output. read more

 

U.S. energy firms, meanwhile, cut the number of oil rigs operating for the
first time since March, as rigs fell by one to 438 last week, according to
energy services firm Baker Hughes Co (BKR.N).-The Thomson Reuters Trust
Principles.

 

 

 

French billionaires eye truce in battle for Lagardere media group - sources

Two of France’s richest businessmen are close to a deal over media and
publishing company Lagardere (LAGA.PA) that would hit pause on their
attempts to cherry-pick its assets for several years, three sources close to
the discussions said on Sunday.

 

Vincent Bollore, the top shareholder in Lagardere via his Vivendi group, and
luxury goods tycoon Bernard Arnault, also a Lagardere investor, have been at
the centre of a tussle over the firm and its influential media outlets for
months.

 

The saga has transfixed top political circles in France a year ahead of a
presidential election, with some in President Emmanuel Macron's camp fearing
that Bollore could seize assets like Lagardere's Europe 1 radio and build up
a powerful ring-wing outlet that would go against his campaign. read more

 

The three sources familiar with the talks said that Bollore, LVMH (LVMH.PA)
boss Arnault and Lagardere's CEO Arnaud Lagardere are finalizing a deal that
would include a five-year pact not to dismantle the company.

 

The details of the agreement and shareholder alliances as well as what would
happen to some Lagardere assets, such as Europe 1 and the Journal du
Dimanche (JDD) newspaper, have not yet been finalised, the people added.

 

They cautioned that the deal had not yet been signed and that the talks
could come off the boil at the last minute.

 

Lagardere is due to hold a board meeting on Monday, the sources said.

 

Arnaud Lagardere, who runs the indebted company founded by his late father,
would be ready to let go of an arcane "commandite" structure as part of the
deal, the three sources added.

 

That set-up gave him the power of veto over many key decisions despite
holding only 7% of the shares, and had been a major obstacle to any takeover
attempts of the company.

 

ARNAUD AT THE HELM

 

The "commandite" has been the target of criticism from hedge fund Amber
Capital, which has waged an activist campaign against Lagardere's management
over its governance.

 

Vivendi holds 27% of Lagardere, ahead of Amber with 20% and Qatar's
sovereign wealth fund with 13%, while Bernard Arnault has just under 8% and
has also invested in Arnaud Lagardere's personal holding company.

 

"This deal would help clarify the governance problem. There were two layers
before, now there would only be one," one of the people close to the talks
said.

 

It is not yet clear, however, how the pact can be cemented to avoid takeover
bids on Lagardere, including by Vivendi, and whether there will be get-out
clauses. Sources have previously said that Amber and the Qataris are keen to
eventually sell out.

 

Under the deal being discussed, Bollore could be a big winner. Vivendi could
get three Lagardere board seats, one of the sources said.

 

Arnaud Lagardere would get to run the company for five years, the three
source said. Les Echos newspaper reported on Saturday that his stake could
also be increased to 14%.

 

Bernard Arnault had been keen to snap up the JDD newspaper or Paris Match
magazine, sources previously told Reuters.

 

The truce would at least meet one of the billionaire's goals, which had been
to help Arnaud Lagardere keep his job at the top and avoid a full break-up
of the group, another of the sources familiar with the talks said.

 

Arnault's investment has so far been profitable, this second source said.

 

Bernard Arnault had been a close friend of the company's founder, Jean-Luc
Lagardere.-The Thomson Reuters Trust Principles.

 

 

 

Online bookmaker Betway parent to go public in merger with acquisition firm

Super Group, the parent company of online bookmaker Betway, said on Sunday
it has agreed to go public through a merger with blank-check acquisition
firm Sports Entertainment Acquisition Corp (SEAH.N) at a valuation of around
$5 billion.

 

The deal comes as Betway, which has its roots in Europe, expands in the
United States. Betway also said it has agreed to acquire Digital Gaming
Corp, tapping the online sports betting and gaming market in 10 U.S. states.

 

"The company (Super Group) is projecting EBITDA in excess of $350 million in
2021, with continuous growth that is very healthy thereafter," Sports
Entertainment Chairman Eric Grubman said in an interview. "Those numbers are
without the U.S., which is not likely to produce high profits in the next
couple of years. The U.S. currently is more about the investment than
profit, and is one of many opportunities the company has."

 

Reuters had reported on Saturday that Super Group and Sports Entertainment
were nearing an a deal to merge. read more

 

The merger values Super Group at $4.75 billion, not accounting for funds it
will receive from Sports Entertainment in the deal. Sports Entertainment
currently has around $450 million in trust. Its shareholders can either roll
over their shares into the combined company or redeem the stock and get
their money back.

 

Upon closing of the deal, which is dependant on a vote by Sports
Entertainment shareholders, the combined company's stock would trade under
the symbol "SGHC" on the New York Stock Exchange.

 

Special purpose acquisition companies (SPACs) such as Sports Entertainment
are shell companies that raise funds in an initial public offering with the
aim of merging with a private company, which becomes public as result,
providing an alternative to traditional IPOs.

 

SPAC dealmaking tailed off in recent weeks following a record start to 2021
as U.S. regulators changed the accounting requirements for them and
investors have been less willing to bankroll mergers.

 

Betway's platform enables betting on popular sporting events around the
world, including Britain's Premier League football tournament and the
cricket tournament Indian Premier League.

 

"We have our own software and software from third parties, on which we
overlay our data analytics engine. Data has been at the core of our DNA,"
Super Group Chief Executive Neal Menashe said. "It's all about return on
investment, return on marketing spend, and engaging customers in an
entertainment environment in a safe, secure and responsible way."

 

Super Group has partnerships with National Basketball Association teams such
as the Chicago Bulls, Golden State Warriors, Brooklyn Nets and Los Angeles
Clippers, and English football teams such as West Ham United.

 

Sports Entertainment Acquisition completed its IPO in New York in October.
It is backed by Timothy Goodell, general counsel of U.S. oil producer Hess
Corp and brother of NFL commissioner Roger Goodell, and an affiliate of
investment bank PJT Partners Inc.-The Thomson Reuters Trust Principles.

 

 

 

Nigeria: Govt Rejects World Bank's Report On Nigeria's Power Sector

Abuja — The federal government yesterday rejected a World Bank's report,
which indicated that over 78 per cent of electricity consumers in Nigeria
received less than 12 hours of electricity supply daily.

 

A statement released through the Special Adviser to the President on
Infrastructure, Mr. Ahmad Zakari, while disputing the survey, said it was
unclear what empirical evidence the bank deployed to arrive at the figures.

 

The bank had in an online meeting with energy correspondents in Abuja last
week, stated that a total of 74 per cent of power users in Nigeria were
dissatisfied with the supply of electricity across the country.

It further disclosed that while 93 per cent of metered power users paid
their bills regularly, while 78 per cent of electricity consumers in Nigeria
received less than 12 hours of supply daily, stressing that the findings
were done after a thorough survey conducted by the global financial
institution.

 

But the federal government insisted that power distribution to consumers had
been steadily improving, even though it had stasted last week that 17 of the
25 generation power plants were down, leading to a deterioration in
nationwide supply.

 

While responding to the Power Sector Recovery Programme (PSRP), a fact sheet
released by the bank, the government noted that it was inaccurate to make a
blanket statement on the country's power sector.

 

It argued that empirical evidence from the Nigerian Electricity Regulatory
Commission (NERC) showed that only 55 per cent of citizens connected to the
grid is in tariff bands D and E which is less than 12 hours supply.

The statement said: "It is inaccurate to make a blanket statement that 78
per cent of Nigerians have less than 12 hours daily access. The data from
NERC is that 55 per cent of citizens connected to the grid are in tariff
bands D and E which are less than 12 hours supply.

 

"Those citizens are being fully subsidised to pre-September 2020 tariffs
until Discos are able to improve supply. There is a N120 billion CAPEX fund
from CBN for Discos to improve infrastructure for these tariff classes
similar to the metering programme that is ongoing."

 

The federal government also kicked against aspects of the bank's report
which claimed that 58 per cent of electricity consumers in the country did
not have meters to measure electricity use, dismissing the data as
unverifiable.

 

"It is unclear who did this survey and what the timeframe is. All citizens
that have got free meters report they are happy about the reform
trajectory," he added.

According to the statement, to date, more than 600,000 meters have been
delivered to Distribution Companies (Discos) out of the 1 million in phase 0
with installation ongoing and meters being sourced locally, while creating
jobs in installation and manufacturing/assembly.

 

The federal government clarified that the Service-Based Tariff (SBT) ensures
that citizens pay more only when and if they are receiving a high quality of
service.

 

He stated that all consumers have been communicated their bands which he
said are published during billing.

 

The statement maintained that it was inconceivable that anyone would imply
that four out of five Nigerians are not intelligent enough to understand
tariff classes and what they are paying for.

 

The presidential adviser on infrastructure, in the statement, said his
office enjoyed a robust working relationship with the World Bank and was,
therefore, surprised that such a report would be released without the input
of other critical stakeholders.

 

The statement noted: "We have a good working relationship with the bank but
metrics around the Nigerian power sector will come from the ministry of
power, Nigerian Electricity Regulatory Commission (NERC) while the Central
Bank of Nigeria (CBN) also regularly publishes intervention data."

 

The secretary to the presidential power reform coordination working group
noted that the government has also been supporting data access from the
relevant agencies, insisting that it was uncommon to publish such data
without the right consultation, fact-checking and context.-This Day.

 

 

 

Nigeria: Govt Bans Importation of Refined Sugar, Derivatives From Free Trade
Zones

As part of the efforts to protect the sugar industry, which is governed by
the Nigerian Sugar Master Plan (NSMP), the federal government has banned the
importation of refined sugar and its derivatives from the nation's Free
Trade Zones (FTZs).

 

The prohibition move, which came through a directive from the Minister of
Industry, Trade and Investment, was conveyed in a letter by the Nigerian
Ports Authority (NPA), Lagos Port Complex, Apapa, Lagos, to one of the
terminal operators of the Lagos Port Complex (LPC), Apapa, Lagos.

 

The NPA letter dated April 8, 2021 and titled 'RE: Prohibition of
Importation of Sugar from the Free Trade Zones into the Nigerian Customs
Territory,' was signed by Mr. Buba Jubril for the Port Manager, Lagos Port
Complex.

According to the letter: "We have for reference a letter from Honourable
Minister of Industry, Trade and Investment ref: HMIT1/GEN/ CORR/008/ VOL. I,
dated February 15, 2021 on the above subject.

 

"It has recently come to our notice that due to the recent location of a
Sugar Refinery in a Free Trade Zone, Refined Sugar is being imported into
the Nigerian Customs Territory under the concession granted to enterprises
in the Free Trade Zones to export 100 per cent of their output to the
Nigerian Customs Territory, and this is real potential threat to the goals
of the Nigerian Sugar Master Plan (NSMP).

 

"The Nigeria Sugar Industry is governed by the Nigerian Sugar Master Plan
(NSMP). The NSMP provides a framework for motivating investment in the local
production of Refined Sugar by securing the Nigerian Sugar market for
investors in the Backward Integration Program (BIP). It does this by
providing import sugar allocations for Raw Sugar to recognised investors
based on the performance on the BIP and guided recognition of their
installed refining capacity.

"Your Terminal is hereby informed by this letter that, in order to protect
our national interest and ensure the returns in the Federal Government's
investment in the NSMP are realised, and in line with extant laws and
regulations of the Federal Government of Nigeria, importation of Refined
Sugar and all other sugar derivatives from the Free Trade Zones into the
Nigerian Customs Territory are here prohibited by the Honourable Minister,
Ministry of Industry, Trade and Investment," the NPA letter stated.

 

It added that, "In view of the above, your terminals are by this letter
directed to ensure strict compliance with this directive. Please accept as
always the assurances of our esteemed regards."-This Day.

 

 

 

Nigeria-China N720bn Currency Swap Deal On Slow Pace 3 Years After

SUB: A N720 billion swap deal for at least 15 billion Renminbi (Yuan)
currency between Nigeria and China has recorded a slow pace three years...

 

A N720 billion swap deal for at least 15 billion Renminbi (Yuan) currency
between Nigeria and China has recorded a slow pace three years after the
initiative was launched.

 

This has left more Nigerian importers on the China route facing the hurdles
of sourcing the dollar as foreign exchange (forex) for their businesses.

 

Nigeria and China established formal diplomatic relations on February 10,
1971. Relations between the two nations grew closer as a result of the
international isolation and Western condemnation of Nigeria's military
regimes (1970-1998).

Nigeria has since become an important source of oil and petroleum for
China's rapidly growing economy; and Nigeria is looking to China for help in
achieving high economic growth.

 

How the swap deal works

 

Records obtained by Daily Trust on Sunday, revealed that the Central Bank of
Nigeria (CBN) in May 2018, signed an agreement with the Peoples Bank of
China (PBoC) to facilitate trade between the two countries and enhance
foreign reserve management.

 

The fall in the international price of crude oil which accounts for over 70
percent of Forex had taken its toll on the central bank's ability to meet
the ever-growing demand for dollar.

 

The currency swap agreement allows importers of goods from China to conclude
their transactions in the Chinese currency, the Renminbi (Yuan), instead of
the dollar.

The agreement makes Nigeria the third country in Africa (after South Africa
and Egypt) to sign such a deal with China.

 

The CBN said then that the PBoC-CBN Bilateral Currency Swap Agreement would
allow the two countries to swap a total of 15 billion renminbi for N720bn,
or vice versa, in the next three years, adding that the deal could be
extended by mutual consent.

 

In line with the Bilateral Currency Swap Agreement with the People's Bank of
China, the fortnightly auction of Chinese Yuan via the Retail SMIS window
was sustained by the CBN.

 

It is the third year since the implementation began in July 2018.

 

According to the records, between July and December 2018, 13 auctions were
conducted and Renminbi worth CNY669.66m was sold from the drawdown of
CNY1bn.

Similarly, in its 2019 Activity Report, the apex bank said 26 auctions were
conducted and renminbi worth CNY782.66m was sold in 2019 from the drawdown
of CNY1bn.

 

The CBN disclosed that it sold 1.45bn yuan since the inception of the
currency swap deal with China and the end of 2019.

 

In a similar report for half year 2020, CBN said it sold CNY1.746.40bn from
inception to end of June 2020.

 

The apex bank noted that the sale of the Chinese yuan further reduced demand
pressure for the United States dollar and conserved foreign reserves.

 

While sufficient data may not yet be available for the total amount sold
between July 2020 and April 2021, estimates from previous disbursement
suggest that not more than CNY1bn may have been exhausted.

 

Opportunities for Yuan in Nigeria/China trade

 

According to the Chinese Embassy in Nigeria, China-Nigeria trade relations
is the largest in the continent with an increase of 0.7 percent at $13.66bn
in 2020 over the previous year.

 

>From a lowly $2bn in 2002, the volume of bilateral trade between Nigeria and
China grew to a yearly $14bn, with prospects of further growth going
forward.

 

Chargé D'Affaires of the Embassy of China in Nigeria, Zhao Yong, said "The
bilateral trade volume between China and Nigeria was $13.66bn in 2020, an
increase of 0.7 per cent.

 

"Among them, China's exports to Nigeria were $11.58bn, decreased by 2.4 per
cent; imports from Nigeria were $2.09bn, a year-on-year increase of 22.7 per
cent."

 

"To China, Nigeria has remained the biggest importer and second largest
trading partner in Africa. Our bilateral trade volume is more than tenth of
China's trade with the whole continent."

 

More information from China shows that in 2019, the bilateral trade volume
between China and Nigeria reached $19.27bn, an increase of 26.3 per cent
over the previous year, ranking first among China's top 40 trading partners
in terms of growth rate, among which Nigeria's exports to China increased by
43.1 per cent.

 

"The trade volume between China and the 15 countries of the ECOWAS was
$34.55bn, a year-on-year decrease of 0.3 per cent. China's exports to ECOWAS
were $27.61bn, an increase of 1.2 per cent; imports from ECOWAS were
$6.94bn, at a decrease of 5.8 per cent," the embassy said.

 

Traders, importers recount forex hurdles

 

While much of the operationalization of the swap deal is not in the public
domain, traders and importers have recounted their experiences in accessing
forex for their businesses.

 

According to Alhaji Umar Bello Bajo, a Kano-based international businessman,
though the agreement between Nigeria and China on the bilateral currency
swap agreement was concluded in 2018, not many Nigerian businessmen have
been fully able to explore it as many were oblivious of the existence of the
agreement.

 

"We middle class businessmen stand a better chance of benefitting from the
agreement as we lack the capability to deal in dollars like our bigger
colleagues doing business in China," he said.

 

However, a major Kano businessman, told our reporter that though he is aware
of the swap agreement, he had never used it in doing business in China. He
said he is comfortable doing business by dollar transactions and has no
reason to switch.

 

In Lagos, an international businesswoman identified as Mrs. Sam, who is
aware of the swap, said she buys interiors and gift items from China using
her dollar account because the bureaucracy securing them Yuan was too
cumbersome for her.

 

According to her, over 80 percent of people she knows who do business with
China boycott the currency swap deal of the government because the processes
involved are not straightforward, which leads to unnecessary delays.

 

On how she gets her goods from China, she explained that she and many of her
colleagues buy goods through Bureau De Change (BDC) who help send money to
China while they make payment in naira.

 

"It is still currency swap because the Bureau De Change pays in Yuan but it
is not the government's own kind of swap which delays business. Though,
using BDC is more expensive but it is cheap in the long run when you factor
in the cost of delay in the case of government currency swap deals," she
said.

 

She, however, urged the government to make the process more open and
accessible so that business owners can embrace it.

 

Chief Ugochukwu Onuora, a large-scale tyre dealer in Abuja, has similar
issues. He would prefer to do his dollar transaction in China than going
through the CBN Naira/Yuan process.

 

"I have been in the business of tyre importation for long, and we stock
ahead. Our customers in China would not need this bottleneck of swap deal,
so the familiar forex - US Dollar is still what our financial agents use."

 

On the high cost of sourcing forex, he said: "The cost of forex sourcing is
passed unto the consumer. We have an association of motor spare part dealers
and we fix uniform prices, we are only ensuring we get marginal return on
our investment," said Chief Onuora.

 

Also commenting, Balikis Suleiman, a household items and electronics dealer,
who also imports from China to Abuja, said the use of international
financial payment systems and payment settlers was paying off for her much
more than the bottleneck of the swap.

 

She said some of her goods come through.-Daily Trust.

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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

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

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Blog:
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www.bullszimbabwe.com/blog

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Skype:         Bulls.Bears 



 

 

 


 

INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


BAT

AGM

Cresta Lodge, Msasa

30/04/21 10am

 


 

Workers Day

 

01/05/21

 


FCB

AGM 

virtual

06/05/21 : 3pm

 


NMB

AGM

virtual

1205/21 :  3:30pm

 


 

Africa Day

 

25/05/21

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

Dairibord

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 


 

 


(c) 2021 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

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