Major International Business Headlines Brief::: 23 August 2021

[Bulls n Bears]

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Major International Business Headlines Brief::: 23 August 2021

 


 

 


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ü  Chip giant's IPO hit by Beijing crackdown on business

ü  Wildfires: Provence wine producers assess impact of destruction

ü  Covid: Government warns Covid test firms over misleading prices

ü  Sky Broadband says online access problems resolved

ü  Morrisons backs US firm's improved £7bn takeover offer

ü  Global dividends to near pre-pandemic levels in 2021 -report

ü  PayPal launches crypto buying and selling in the UK

ü  S.Korea's LG Chem shares dive on GM electric car recall

ü  Asia stocks fragile amid growth worries, dollar in demand

ü  Japan's private-sector activity hit by COVID-19 surge - PMI

ü  China says foreign trade may face more complicated situation next year

ü  EasyJet taps ex-RBS boss Hester to chair airline as travel recovers

ü  Lonza invests in new production line in China

ü  Nigeria: Inside Nigeria's Electricity Companies and Their Perpetual Loss-Making

ü  Nigeria: Continue to Pay VAT to Us, FIRS Tells Tax Payers

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Chip giant's IPO hit by Beijing crackdown on business

Chinese electric car maker BYD's plan to sell shares in its computer chip making unit has been suspended, the latest share offering to be hit by Beijing's crackdown on businesses.

 

The listing has been put on hold due to a regulatory investigation into the law firm advising the company.

 

The plan to list on Shenzen's Nasdaq style market ChiNext was filed in May.

 

The suspension comes amid a broader regulatory tightening on industry by Chinese authorities.

 

Over the weekend, the Shenzen Stock Exchange said Beijing Tian Yuan Law Firm, one of China's biggest legal services companies, was being investigated in relation to the listing.

 

It said the firm, which has been an advisor for BYD Semiconductor's planned initial public offering (IPO), was being investigated by China's Security Regulatory Commission but gave no further details.

 

BYD Semiconductor had aimed to raise at least $421m ($309m) from the sale of shares.

 

It planned to invest the money back into the business as global carmakers struggle with a shortage of computer chips

 

The firm is China's biggest maker of microcontroller chips for vehicles.

 

Microcontrollers are vital components in modern cars, used for everything from seats and windows to steering and anti-lock brakes.

 

BYD Semiconductor competes directly with major chip makers including Germany's Infineon and Rohm Semiconductor in Japan.

 

Parent company BYD is China's biggest car maker by market valuation and is backed by US investment veteran Warren Buffett.

 

BYD is the latest Chinese company to have its plans up-ended as Beijing tightens regulations on everything from technology giants to insurance providers.

 

New privacy law

Beijing is introducing measures to protect data privacy, and on Friday, China's top legislative body, the Standing Committee of the National People's Congress, passed a sweeping new privacy law.

 

The Personal Information Protection Law aims to strictly control data collection by technology firms and will take effect from 1 November.

 

A number of technology companies have faced problems in China with relation to data privacy.

 

Earlier this year, the country's internet regulator ordered online stores not to offer Chinese ride-hailing firm Didi's app, saying it illegally collected users' personal data.

 

It came just two days after the company's New York Stock Exchange debut and its shares fell sharply on the news.

 

In late July, shares in Chinese online tutoring firms slumped after Beijing stripped them of the ability to make a profit from teaching core subjects.

 

Beijing has also cracked down on foreign investment in the industry.

 

Last November, in one of the most high-profile business crackdowns by Beijing, the stock market debut of technology giant Ant Group was abruptly halted.

 

Ant, backed by Jack Ma, the billionaire founder of e-commerce platform Alibaba, was set to sell shares worth about $34.4bn.

 

But that was suspended on account of competition concerns, with China forcing a sweeping restructure on the group.

 

The listings in Shanghai and Hong Kong would have been the biggest stock market debut to date.-BBC

 

 

 

Wildfires: Provence wine producers assess impact of destruction

Rosé winemakers in south-east France are assessing the impact of wildfires which began last week.

 

The blaze broke out in the Var region, close to the French Riviera, and was spread by strong winds.

 

Provence's wine producers' association, the CIVP, said it was unclear how much damage had been caused, and in-depth assessments were underway.

 

One winery owner told the BBC that any hit to supplies was likely to push up prices.

 

On Thursday, the National Federation of Agricultural Workers' Unions (FNSEA) said that although fires had mainly hit forests, several wine-growing areas were also heavily affected. It estimated the figure at 73 wineries and 5 cooperatives.

 

'Heartbreaking'

Jeany and Stephen Cronk are the founders of the Maison Mirabeau winery. The couple also bought their own vineyard, Domaine Mirabeau, in 2019.

 

"There are three vineyards close to us which have been completely destroyed, it's truly devastating," Mr Cronk said. At the Domaine, there is damage to the vines, outbuildings and surrounding forest.

 

Thousands flee wildfires near French Riviera

The impact on their crop isn't yet clear, because they say smoke taint may not be immediately obvious.

 

"For us, it's uncertain whether we will harvest or not," he said. "Personally, it's heartbreaking. We've been hit by two 'once-in-a-generation' frosts, and now comes the worst forest fire in decades."

 

Mr Cronk said: "We need to think more about climate change, and whether we are doing enough to protect these forests.

 

"We hope this will serve as a further wakeup call that these types of events will be more frequent and more devastating. We must do our best to prevent them from happening again."

 

He said he believed that, depending on the damage, the impact on supply could make wines from the region more expensive. He also argues landowners next to protected areas of forest should have permission to clear encroaching bushes off their land and create firebreaks, to reduce the risk.

 

Alexis Cornu, head winemaker at the MDCV group of estates and vineyards in Provence, said the main road between the estates had been briefly closed for safety reasons, but that the hard work of firemen had prevented the fire reaching their buildings.

 

Mr Cornu said no risk to supply was expected in the coming weeks. However, the fires had not yet been completely stopped.

 

When it's possible, the group plans to deploy a drone to judge how the vines have coped. But with power and water back on, they hope to be ready to start their harvest in the next few days.

 

"So far so good, it looks green,, Mr Cornu added. He said there was anger at the rules forbidding bush cutting or clearing, saying risk around the estates had been rising for years.

 

Fire is the latest problem to hit French wine producers. In April, rare deep frosts destroyed buds on grapevines in the vineyards of Bordeaux, Burgundy, the Languedoc and the Rhône valley.-BBC

 

 

 

Covid: Government warns Covid test firms over misleading prices

More than 80 private Covid travel test providers listed on the government's website will be issued two-strike warnings over misleading prices, Health Secretary Sajid Javid has announced.

 

A further 57 firms will be removed from the website on Monday, because they either no longer exist or do not actually provide the relevant tests.

 

The health secretary said the move was to clamp down on "cowboy behaviour".

 

The government will also introduce spot checks on the test providers.

 

The UK government has made it a condition of international travel to England that tests before travel, and on your arrival in the UK are mandatory.

 

The number of tests that are needed is dependent on your arrival from either a green or amber country or your vaccination status. Arrivals from red countries must still use quarantine hotel facilities.

 

The government website has a list of private companies that offer such tests - but a recent review by the Department of Health found the prices displayed were lower on the Gov.UK site than the actual amount they cost.

 

Some of the most common complaints from travellers also mention tests listed on the government's list of providers that do not exist at the price advertised, whilst others allege poor service.

 

Mr Javid said: "It is absolutely unacceptable for any private testing company to be taking advantage of holidaymakers and today's action clamps down on this cowboy behaviour.

 

"57 firms will be removed from the Gov.UK list and a further 82 will be given a two-strike warning - if they advertise misleading prices ever again, they're off."

 

He added that the spot checks being introduced were to ensure that all private providers "follow the rules" and meet the government's "high standards of transparency".

 

'We haven't met anyone who's had a £20 test'

But consumer group Which? said that it had warned the government about the problems with private travel test providers six months ago.

 

"It's welcome news that the government is finally taking responsibility for its list of test providers and carrying out an audit, but it's six months late," Rory Boland, travel editor at consumer association Which?, told the BBC.

 

"There should not have been providers listed on the Gov.UK website that don't exist. We found this in our first investigation in April, when providers were telling us that the system would collapse if larger numbers of people were travelling."

 

He added that Which? had repeatedly reported some Covid test providers to the government: "In our second investigation, we looked at the 10 cheapest providers and we found that none of the tests listed below £80, were actually attainable for less than that.

 

"We submitted the names to the government and they removed three of those 10 names in June."

 

While the government has not named the providers that it intends to remove from the Gov.UK website, or the firms that will be receiving warnings, Which? says it is certain that the test providers offering Covid tests that start from £20 will be targeted.

 

Mr Boland said: "You can't get the £20 tests. We haven't met anyone who's had a £20 test. Generally the price you pay, at the cheaper end, is £40-£50.

 

"A lot of these firms offering £20 tests require you to drive to somewhere in England on a specific day, such as in Middlesbrough. When you try to book the test online, the booking calendar is almost always full."

 

In April, Transport Secretary Grant Shapps told MPs that some travel tests had fallen to below £45, saying he was "very anxious" to reduce the cost of the tests for consumers.

 

Last week, the Competition and Markets Authority's former chairman, Lord Tyrie, accused it of not doing enough to protect consumers, saying that PCR testing for travel had become a "predictable Covid rip-off".

 

In response, the business and competition regulator told the BBC it warned government officials that consumers could face risks from the fast-growing travel testing industry in April and May.-BBC

 

 

 

Sky Broadband says online access problems resolved

Sky Broadband says problems that left some customers unable to access a number of websites and apps have been resolved.

 

Customers complained they could not reach online bank accounts at Halifax, HSBC, TSB and Santander. Some people said they could not access a major hotel booking site.

 

Sky had tweeted there were "issues", but now says problems have been sorted.

 

Halifax said the problem was linked to a technical fault with Sky Broadband.

 

Customers were being advised to turn off their Wi-Fi and access banking apps using mobile data.

 

The BBC is not responsible for the content of external sites.

View original tweet on Twitter

Consumers took to Twitter to complain about other websites being down as well, including hotel booking services such as Booking.com.

 

Lloyds Banking Group, which owns Halifax, and TSB said that there had been nothing wrong with any of their own services.

 

"To confirm, the problems people are facing is because of the issues with Sky Broadband. We can confirm there are no issues with our online banking or apps," a Lloyds Banking Group spokesman said.

 

A TSB spokesman said: "Customers who use one popular internet service provider (ISP) to access internet and mobile banking have been affected by problems at that ISP.

 

"Regular payments are unaffected and customers can continue to make and receive payments from their accounts."

 

A spokeswoman for Santander said: "We're aware that a number of internet providers are experiencing issues this morning, meaning some customers are unable to access our online and mobile banking services.

 

"We are sorry for the inconvenience caused and are working to resolve the issue as quickly as possible."

 

She added that debit cards, credit cards, ATMs, telephone and branch banking services were not affected. Customers can continue to use these services as normal.-BBC

 

 

 

Morrisons backs US firm's improved £7bn takeover offer

Supermarket group Morrisons has accepted an improved £7bn takeover bid from US private equity group Clayton, Dubilier & Rice (CD&R).

 

Morrisons had previously recommended investors accept a £6.7bn offer from a consortium led by another US-based investment group, Fortress.

 

Fortress said it was "considering its options", amid signs shareholders think the battle is not over.

 

Morrisons shares opened up on Friday, a signal investors expect another bid.

 

The retailer, which has almost 500 shops and more than 110,000 staff, has been at the centre of a takeover battle for weeks.

 

Fortress has urged Morrisons' shareholders to "take no action" on CD&R's agreed bid, which will require their approval at a meeting in October.

 

In July Morrisons turned down an offer worth £5.5bn from CD&R, saying it significantly undervalued the business.

 

But the grocer's board unanimously accepted the new offer, which represents a 60% premium to Morrisons' share price before takeover interest emerged in mid June.

 

Morrison shares rose 4.4% following the announcement to 291.4p per share.

 

Nicholas Hyett, Equity Analyst at Hargreaves Lansdown, said that although the new offer has the backing of Morrisions' management, "this might not be the end of the story".

 

He said: Rival bidder Fortress has urged investors to hold fire on accepting the deal and are expected to make a further statement in due course. With the shares currently trading above the new and improved offer price, the market clearly thinks a better offer is a distinct possibility."

 

'Protecting legacy'

Morrisons was founded in Bradford in 1899 - where it still has its headquarters. The founder William Morrison's son, the late Sir Ken Morrison, ran the business for fifty years.

 

CD&R said it recognises the "legacy of Sir Ken Morrison, Morrisons' history and culture, and considers that this strong heritage is core to Morrisons and its approach to grocery retailing".

 

The private equity firm said it would help Morrisons to build on its strengths, including its close relationships with suppliers and property portfolio.

 

Morrisons chairman Andrew Higginson said the offer "represents good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders".

 

Over the last 10 years, CD&R has been advised by Sir Terry Leahy, who was the boss of Tesco at the time when Mr Higginson worked for him as chief financial officer.

 

Morrisons' chief operating officer, Trevor Strain, also previously worked with Sir Terry at Tesco.

 

Sir Terry also advised CD&R on its acquisition of discount retailer B&M, which netted the private equity firm an estimated profit of £1bn when it sold it on.

 

The future of the UK's fourth largest supermarket has taken a new twist.

 

Morrisons is one of a slew of UK companies that have been targeted by overseas investors. Defence contractors Meggit and Ultra are also the subject of bidding wars. The numbers are startling.

 

Even before you count Morrisons, Meggit and Ultra - foreign, private buyers have spent more buying UK listed companies in the last eight months than they have in the last five years combined.

 

UK companies look cheap to foreign buyers. The UK economy was one of the hardest hit by the pandemic - and the value of the pound has never quite recovered its pre-Brexit value which reduces the price of UK businesses for non-UK investors.

 

Some say that these bids highlight the value of - and confidence in - UK plc. But others are concerned that private buyouts increase debt levels, reduce transparency and mean that key decisions about the future of UK companies like Morrisons could be taken in New York rather than Bradford.

 

The UK government has already asked the Competition and Markets Authority to review the bid for submarine technology specialist Ultra on grounds of National Security and it may yet intervene in the takeover bid for aerospace specialist Meggitt.

 

There is also legislation planned to expand its powers to intervene and increase the scrutiny of privately held companies but for now there is a rush to the checkout for important chunks of UK PLC.-BBC

 

 

 

Global dividends to near pre-pandemic levels in 2021 -report

(Reuters) - Global dividends are forecast to rise to $1.39 trillion this year, up slightly from a previous estimate to reflect a stronger than expected recovery in the company payouts, Janus Henderson said in a report published on Monday.

 

Its latest estimate, up 2.2 percentage points from an earlier one, is just 3% below the pre-pandemic peak.

 

Dividends, a company payout to shareholders, slumped last year against the backdrop of the COVID-crisis as regulatory constraints and government pressures to restrict payments weighed.

 

But a strong recovery is currently under way, with headline growth at 26.3% in the second quarter, data from the investment manager's Global Dividend Index showed.

 

Underlying growth - adjusted for special dividends, changes in currency, timing effects, and index changes – was 11.2%. On a year-on-year basis, 2021 growth is expected at 10.7%, equivalent to an underlying rebound of 8.5%.

 

Dividends from companies restarting payments totalled $33.3 billion and accounted for three-quarters of the underlying growth in the second quarter, the report said.

 

"Global dividends in aggregate will likely regain their pre-pandemic levels within the next 12 months," Jane Shoemake, client portfolio manager on the global equity income team at Janus Henderson, said in a statement.

 

The current "recovery will not be hampered by a weak banking system as it was after the global financial crisis a decade ago," as policymakers continue to provide fiscal and monetary support to the economy, she added.

 

Limits on bank dividends had a significant impact in 2020 as lenders accounted for half of the fall in global payouts, but constraints have since been lifting.

 

In early August, European banks announced billions of euros in payments to shareholders. These included ING Groep NV (INGA.AS) and Intesa Sanpaolo (ISP.MI), whose interim dividend will be subject to discussions with regulators.

 

European Union banks meanwhile have benefited from a strong performance in stress tests by the region's banking watchdog.

 

Among U.K. banks, HSBC (HSBA.L) reinstated dividend payments flagging higher payouts in the future, after the Bank of England scrapped its remaining pandemic curbs in mid-July.

 

Europe is staging a solid rebound after a wave of cancellations and suspensions last year.

 

At the same time, companies continued their payouts during the first year of the pandemic in the United Sates and in Canada, the Janus Henderson report said.

 

Reuters Image

Booming commodity prices boosted payouts by mining companies, with industrials and consumer discretionary coming back strongly, the report also showed.

 

Defensive sectors, like telecoms, food, food retail, household products, tobacco and pharmaceuticals, registered characteristic low single-digit growth rates.

 

The Thomson Reuters Trust Principles.

 

 

PayPal launches crypto buying and selling in the UK

(Reuters) - PayPal Holdings Inc (PYPL.O) will allow customers in the UK to buy, sell and hold bitcoin and other cryptocurrencies starting this week, the company said on Monday.

 

The roll-out, which marks the first international expansion of PayPal's cryptocurrencies services outside of the United States, could inspire further mainstream adoption of the new asset class.

 

With over 403 million active accounts globally, the San Jose, California-based company is one of the largest mainstream financial companies to offer consumers access to cryptocurrencies.

 

PayPal launched cryptocurrency buying and selling in the United States early this year, later enabling customers to use their digital coin holdings to shop at the millions of merchants on its network.

 

The company hoped its foray into the new asset class would encourage global use of virtual coins and prepare its network for new digital currencies that may be developed by corporations and central banks.

 

"We are committed to continue working closely with regulators in the UK, and around the world, to offer our support— and meaningfully contribute to shaping the role

 

digital currencies will play in the future of global finance and commerce," Jose Fernandez da Ponte, vice president and general manager for blockchain, crypto and digital currencies at PayPal, said in a statement.

 

In the UK, PayPal's service will rival that of established cryptocurrency exchanges such as Coinbase Global Inc (COIN.O), as well as well fintech startups such as Revolut.

 

Customers will be able to buy bitcoin, ether, litecoin and bitcoin cash through their PayPal wallets online or on the mobile app.

 

The move comes as more established financial companies have started offering their clients, both consumers and institutions, access to digital assets, amid rising cryptocurrency prices. read more

 

The Thomson Reuters Trust Principles.

 

 

 

S.Korea's LG Chem shares dive on GM electric car recall

(Reuters) - LG Chem Ltd (051910.KS) shares slid nearly 10% on Monday after General Motors Co (GM.N) said it would recall an extra 73,000 Chevrolet Bolt cars that use the South Korean firm's batteries, months after a similar recall by Hyundai Motor Co (005380.KS).

 

GM on Friday expanded its recall of Bolt electric vehicles (EVs) due to fire risk from what it called battery manufacturing defects, saying the recall would cost $1 billion and that it would seek reimbursement from LG. read more

 

The U.S. automaker said the recall covers vehicles beginning model year 2019 and that it would indefinitely halt Bolt sales. LG Chem said it was working to ensure a smooth recall.

 

LG Chem, which is preparing an initial public offering (IPO) for battery unit LG Energy Solution (LGES), lost $5 billion in market value with its stock on track for its biggest intraday percentage loss since March 2020.

 

"The market expected that LGES would launch its IPO in September, but with GM's expanded recall, LGES IPO is likely to be delayed for a month or two, because the company needs to reflect the recall cost before finalising the IPO paperwork," said Samsung Securities analyst Cho Hyun-ryul.

 

GM initially recalled 69,000 Bolt cars in July. Its expanded recall comes about a week after a fire involving a Volkswagen AG (VOWG_p.DE) ID.3 EV carrying an LGES battery. read more

 

The logo of LG Chem is seen at its office building in Seoul, South Korea, October 16, 2020. REUTERS/Kim Hong-Ji/File Photo//File Photo

Six months earlier, Hyundai recalled 82,000 EVs over LGES battery fire risk at an estimated cost of about 1 trillion won ($851.90 million). read more

 

Both GM's and Hyundai's recalls involve pouch-type batteries, rather than cylindrical batteries supplied to LGES customers including Tesla Inc (TSLA.O).

 

In February, South Korea's transport ministry said a joint investigation with LGES and Hyundai found defects in battery cells at an LGES factory in China. The investigation is ongoing.

 

Neither LGES nor Hyundai have disclosed how they plan to split recall costs, though analysts expect LGES to assume 60%.

 

Batteries are a massive component of LG Group earnings. LG Chem earned 40% of operating profit from batteries - including EV batteries - in April-June. Earlier this month, LG Electronics Inc (066570.KS) cut its second-quarter operating profit by more than a fifth to reflect GM recall costs. read more

 

Shares of LG Electronics, which assembles LGES cells into battery modules, fell as much as 5.8% on Monday. That compared with the local benchmark (.KS11) which was up 1.5% around noon.

 

($1 = 1,172.5900 won)

 

The Thomson Reuters Trust Principles.

 

 

 

Asia stocks fragile amid growth worries, dollar in demand

(Reuters) - Asian share markets were trying to pick up the pieces on Monday following last week's thrashing as coronavirus concerns showed little sign of abating, while safe-haven flows benefited the dollar ahead of a key update on U.S. monetary policy.

 

A raft of "flash" manufacturing surveys for August out on Monday will offer an early indication of how global growth is faring in the face of the Delta variant, with analysts expecting some slippage and especially in Asia.

 

Concerns over China's economy have only intensified in recent weeks, while Beijing's regulatory crackdown on the tech sector delivered a double blow to markets.

 

More than $560 billion was wiped from Hong Kong and mainland China exchanges last week as funds fretted on which sectors regulators might target next. read more

 

The impact was all too evident in MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) which sank 4.8% last week to a nine-month trough. Early Monday, it had limped 0.2% higher but the gains looked fragile.

 

The rot spread to Japan where the Nikkei (.N225) shed 3.4% last week to its lowest since January. Bargain hunting helped the index bounce 1.2% early Monday.

 

"Following a strong V-shaped recovery, there are many signs of slower growth," says BofA's chief investment strategist Michael Hartnett.

 

"The U.S. yield curve is at a one-year low, emerging markets are negative YTD and both copper and oil are down double digits from recent highs."

 

He expects negative returns for stocks and credit in the second half of this year and suggests investors own defensive quality.

 

The spread of the Delta variant also has the potential to upset the timing of the U.S. Federal Reserve's tapering plans.

 

Dallas Federal Reserve President Robert Kaplan, a well-known hawk, on Friday said he might reconsider the need for an early start to tapering if the virus harms the economy. read more

 

That adds an extra frisson of uncertainty to Fed Chair Jerome Powell's speech at Jackson Hole this week, which has had to be moved online because of pandemic restrictions. read more

 

"Our base case is that the FOMC will announce a taper in September if the August non‑farm payrolls is strong," said Joseph Capurso, head of international economics at CBA.

 

"We anticipate the taper will be implemented in October or November, though the recent increase in Covid infections and deaths in parts of the U.S. may give Powell pause."

 

That is in market contrast to the European Central Bank which is under pressure to add more stimulus, giving the dollar a leg up on the euro.

 

"Unlike the Fed, we do not expect the ECB to shift away from its ultra‑dovish monetary policy stance," said Capurso. "We expect EUR to decline to a low of $1.12 in Q1 2022, before gradually appreciating."

 

The single currency was trading at $1.1697 , after losing 0.8% last week to touch 10-month lows at $1.1662. That in turn helped the dollar index to a 10-month peak at 93.734 , and it was last trading firm at 93.507.

 

The dollar made large gains on commodity and emerging market currencies, and turned higher on the Chinese yuan.

 

It has been more restrained against the Japanese yen at 109.84 , which is also benefiting from safe haven flows.

 

Global growth jitters took a heavy toll on commodities last week, with base metals, bulk resources and oil all falling.

 

Gold was steadier at $1,777 , following a one-day plunge earlier in August.

 

Oil had suffered its sharpest week of losses in more than nine months as investors anticipated weakened fuel demand worldwide due to a surge in COVID-19 cases.

 

Early Monday, Brent had edged up 37 cents to $65.55 a barrel, while U.S. crude added 27 cents to $62.41.

 

The Thomson Reuters Trust Principles.

 

 

 

Japan's private-sector activity hit by COVID-19 surge - PMI

(Reuters) - Japan's factory activity growth slowed in August, while that of the services sector shrank at the fastest pace since May last year, highlighting the increasingly heavy toll a recent wave of COVID-19 infections is taking on the economy.

 

Manufacturers mostly withstood the impact of the coronavirus resurgence, due largely to the highly contagious Delta variant that is forcing governments in Japan and elsewhere in Asia to put in place lockdowns or other curbs.

 

The au Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index (PMI) fell to a seasonally adjusted 52.4 in August from a final 53.0 in the prior month.

 

Overall orders and export orders increased, though the pace of growth was the slowest in seven months. Firms faced severe supply chain disruptions from a global semiconductor shortage, IHS Markit said.

 

Activity in Japan's services sector took a blow from a surge in Delta variant cases that last week forced the government to extend and expand the country's fourth state of emergency, which now covers nearly 60% of the population.

 

The au Jibun Bank Flash Services PMI index dropped to a seasonally adjusted 43.5 from the previous month's final of 47.4, hitting its lowest since May 2020, when Japan's economy went through a deep COVID-19 slump.

 

The weak reading pushed down activity for the overall private sector, which contracted at the quickest pace since August 2020, said Usamah Bhatti, economist at IHS Markit, which compiled the survey.

 

"The decline in overall private sector activity was led by the larger services sector, where business activity fell for the 19th consecutive month," Bhatti said.

 

"Private sector businesses noted that the recent surge in COVID-19 cases related to the Delta variant had dampened prospects."

 

The au Jibun Bank Flash Japan Composite PMI, which is estimated by using both manufacturing and services, fell to 45.9 from July's final of 48.8, hitting its lowest since August last year.

 

The Thomson Reuters Trust Principles.

 

 

China says foreign trade may face more complicated situation next year

(Reuters) - China's foreign trade may face a more complicated situation next year given base effects and receding positive factors associated with the global COVID-19 pandemic, Wang Wentao, the country's Commerce Minister said on Monday.

 

Foreign trade already faces a complex situation in the second half this year, Wang told a news conference in Beijing.

 

China's cross-cyclical macoeconomic policy will help economic fluctuations stay within a reasonable range, Wang added.

 

The Thomson Reuters Trust Principles.

 

 

 

EasyJet taps ex-RBS boss Hester to chair airline as travel recovers

(Reuters) - Britain's easyJet (EZJ.L) on Monday named former RBS Chief Executive Stephen Hester as its chair designate to succeed John Barton, as the budget airline navigates a recovery in a travel industry hammered by the COVID-19 pandemic.

 

The London-listed company said last month it planned to fly 60% of its pre-pandemic capacity in the July to September quarter compared to just 17% of 2019 levels in March-June, after it shed staff, cut its fleet and took on new debt to survive the crisis. read more

 

Hester will take over in December from Barton, who will step down following nine years in the role.

 

Hester has more than three decades of experience in various industries, most recently serving as the CEO of RSA Insurance, and was praised for restructuring RBS in the aftermath of its state bailout during the 2008 financial crisis.

 

"I am very much looking forward to working with Stephen at this important time in our history," easyJet CEO Johan Lundgren said in a statement.

 

The Thomson Reuters Trust Principles.

 

 

 

Lonza invests in new production line in China

(Reuters) - Lonza (LONN.S) is investing in new drug product manufacturing capacity at its site in Guangzhou, China, the Swiss company said on Monday.

 

The sterile, multi-product fill and finish line is expected to be completed in 2022 and will create more than 150 jobs. Lonza, which has been making ingredients for Moderna's (MRNA.O) COVID-19 vaccine, did not say how much it was spending on the Guangzhou plant.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Nigeria: Inside Nigeria's Electricity Companies and Their Perpetual Loss-Making

Ten of 11 privately-run companies reported losses for seven straight years, highlighting the problems of a sector beset by everything, including poor management.

 

Almost all of Nigeria's 11 electricity distribution companies reported huge losses in seven straight years, a distressing scorecard that highlights the struggles of a sector that has failed to meet the power needs of Nigerians nearly a decade after the government handed control of the firms to private investors.

 

Ten of the 11 companies, also known as DisCos, reported about N2 trillion in losses between 2013 and 2019. The firms made no profits in any of the years in between, according to a PREMIUM TIMES analysis of their annual reports.

 

Port Harcourt Electricity Distribution Company, the only company not on the list, did not file its report, prompting sanctions from the regulator, the Nigeria Electricity Regulatory Commission.

Ikeja Electricity Distribution Company recorded the highest total loss of N472.2 billion, while Benin Electricity Distribution Company recorded N81 billion as the least.

 

One energy sector consultant blamed the losses on "low tariffs", and another said there was the "issue of sub-optimal management".

 

Electricity challenge

 

Nigeria, Africa's largest economy, has one of the world's worst power sector, producing an average of 5,000 megawatts of electricity for a population of about 200 million for decades. Some 80 million people do not have access to the national grid and power shortages cost the country $29 billion, according to the World Bank.

 

To compare, South Africa, the continent's second biggest economy, generates about 55,000 megawatts for a population of about 58 million.

 

Successive governments have tried but failed to reform Nigeria's energy sector. The main problems are decaying infrastructure, low investment, debts, and poor management. There are also "operational inefficiencies", PricewaterhouseCoopers (PwC) said in a 2020 report.

In 2013, the government unbundled the then state-run Power Holding Company of Nigeria (PHCN) into11 DisCos run by private investors. There are also generation companies (GenCos) and the Transmission Company of Nigeria, the only arm run by the government.

 

The problems have continued nonetheless with all three arms - generation, transmission, and distribution - reporting difficulties. In June 2020, DisCos blamed the federal government's high import duty on electricity meters for the difficulty in providing the equipment to their customers, and ultimately for low revenue.

 

The DisCos also accuse the federal government of reneging on pre-privatization agreements, making it difficult for them to efficiently deliver their services.

 

Perpetual losses

Data reviewed by PREMIUM TIMES show that Ikeja Electricity Distribution Company, which lost N472.2 billion, recorded its highest loss of N147.6 billion in 2019.

 

Abuja Electricity Distribution Company lost N389.9 billion between 2013 and 2019, with its biggest loss N124 billion also in 2019.

 

In its report, the AEDC wrote: "The company has historically incurred losses due to the existing electricity pricing regime which has not allowed for full recovery of costs through price increase."

 

Kaduna Electricity Distribution Company lost N246.8 billion in successive years and had its biggest loss N82.2 billion in 2019.

 

Ibadan Electricity Distribution Company recorded N218.3 billion as loss with the highest loss of N11.9 billion in 2019.

 

Kano Electricity Distribution Company lost N2020.7 billion, while Yola Electricity Distribution Company lost N81.6 billion. Both companies recorded their biggest losses in 2019.

 

Available record show that between 2013 and 2018, Enugu Electricity Distribution Company lost N157 billion loss with the highest N57.1 billion in 2018.

 

Eko Electricity Distribution Company recorded N151 billion loss with 2018 alone recording a loss of N58.8 billion.

 

Jos Electricity Distribution Company recorded N103.1 billion with 2018 recording the highest N42.4 billion

 

Benin Electricity Distribution Company recorded N81 billion, it recorded N43 billion in 2018 alone.

 

Low tariffs and sub-optimal management

 

An energy sector consultant and analyst, Dan Kunle, said the it will take years for Nigeria to sufficiently deal with the problem of power to make the sector viable.

 

"We have not invested enough money for us to have neared adequate power production, transmission, and distribution, the infrastructure for the three are still at infancy level. They are not yet in any way near maturity at all," he said.

 

"Because of this lack of investment in multiple (hydro, gas, solar and all) generating capacity, we as a nation don't have sufficient money to build a robust high tension transmission infrastructure. If the infrastructure to distribute the power is power, you get poor results, these are the fundamental issues.

 

"This has hindered additional investment from flowing into the sector. Meanwhile, the same government that will not give you the green light to run also has no money to inject into the sector. The little money the government has when injected does not show critical mass impact, it is near sufficient."

 

He said interventions so far by the Central Bank of Nigeria, estimated at N1.3 trillion in seven years, is "like a drop in the Atlantic Ocean".

 

He also said the respect for the rule of law will build the confidence of investors in the sector which will bring about the expansion and incremental investment will start trickling in.

 

The CEO of New Hampshire Capital Ltd, Odion Omonfoman, said huge funding challenge weighs down the power sector that threatens its viability.

 

He said the challenge is partly due to the non-implementation of cost-reflective tariffs by NERC, high technical and commercial losses exacerbated by energy theft, and consumers' apathy to payments because of unfair estimated billing practices by DisCos, and poor metering implementation by DisCos.

 

"There is also the issue of sub-optimal management arising from a lack of proper corporate governance structures in some DisCos," he said.

 

"As long as the existing DisCos have an unwritten monopoly to supply electricity to Nigerians without any competition from other market providers, it is doubtful if the power sector will ever be efficient, no matter how much the CBN injects in the sector."

 

He suggested that the NERC urgently license other players to distribute and sell electricity to Nigerians.

 

"In the alternative, state governments should make laws that will allow for state governments to license and regulate private investors to generate and distribute electricity to their citizens as well," he said.-Premium Times.

 

 

 

Nigeria: Continue to Pay VAT to Us, FIRS Tells Tax Payers

Abuja — The Federal Inland Revenue Service(FIRS) has told taxpayers in the country to continue to pay their Value Added Tax (VAT) to it in order to avoid facing penalties for failing to do so.

 

The FIRS issued the directive following numerous enquiries to the Service in view of a recent judgment obtained by the Rivers State Government at the Federal High Court, Port Harcourt, which ruled that states, and not the Federal Government, are constitutionally empowered to collect VAT.

 

However, in a statement, this evening, the FIRS said that since the it has already appealed the Rivers judgment in which it is seeking a stay of execution order, the status quo ante subsists on the VAT collection authority, hence taxpayers should continue to pay their VAT to the FIRS.

The FIRS statement signed by Mr. Abdullahi Ahmad, Director of Communications and Liaison Department reads in full: "The attention of the Federal Inland Revenue Service(FIRS) has been drawn to the trending report that, on 19/08/2021, the Government of Rivers State took steps to enact a Value Added Tax Law for Rivers State following the Judgment of the Federal High Court Port Harcourt Division on 9th August 2021 in Suit No: CS/149/2020. The suit was about who has the constitutional duty for the collection of VAT and Personal income tax in Rivers State.

 

"We wish to inform the general public that, before the above-mentioned steps taken by the Government of Rivers State, FIRS had lodged an appeal against the above judgment and had also filed an application for stay of execution of the Judgment as well asking the Court for an injunction pending determination of the appeal.

 

"All parties to the suit are aware that both applications were heard on the 19th and 20th August 2021 and are awaiting the decision of the Court.

 

"Given that the Court of Appeal is yet to rule on the Appeal from the Judgement of Federal High Court and that the Federal High Court is yet to deliver a ruling on FIRS's applications for stay of execution and injunction, members of the public are advised to continue to comply with their Value Added Tax obligations until the matter is resolved by the appellate courts."-Vanguard.

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


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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