Major International Business Headlines Brief::: 28 August 2021

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Major International Business Headlines Brief::: 28 August 2021

 


 

 


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ü  Peloton investigated over the safety of its treadmills

ü  Federal Reserve hints it will start easing US stimulus

ü  Powell's wait-and-see speech reassures some investors

ü  Canada joins Mexico in seeking consultation with U.S. over USMCA content
rules

ü  Automobiles restrain U.S. consumer spending, monthly inflation slowing

ü  Salesforce rival Freshworks reveals revenue surge in IPO filing

ü  Wall St Week Ahead A blazing U.S. stock rally faces market's toughest
month

ü  Western Digital $20 billion all-stock offer for Kioxia poses valuation,
cash challenge - analysts

ü  Schlumberger pushes COVID-19 vaccine disclosures as customer mandates
grow

ü  Biden admin defends approving licenses for auto chips for Huawei

ü  ESPN explores sports-betting deal worth at least $3 billion - WSJ

ü  Kraft Heinz to mandate COVID-19 vaccines for office employees

ü  S&P 500, Nasdaq nab all-time closing highs as Powell soothes taper fears

ü  Amazon-backed Rivian files for IPO, gears up for blockbuster year-end
flotation

ü  Liberia: The Country's Debt Stands At U.S.$1.47 Billion

ü  Nigeria's Ravenous Ports

ü  Botswana: De Beers, National Geographic Form Partnership to Protect
Okavango Delta

ü  Namibia: Resilient Medium-Scale Farmer Dreams of Feeding the Nation

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Peloton investigated over the safety of its treadmills

The exercise bike producer Peloton is facing an investigation by the US
Department of Justice and the Department of Homeland Security.

 

It comes after a child was pulled under one of its treadmills and killed and
other customers reported injuries.

 

In May, weeks after the reports, Peloton recalled 125,000 of its Tread+
running machines.

 

Initially it said there was "no reason" to stop using the machine before
changing its stance.

 

Chief executive John Foley later apologised and said the firm had "made a
mistake" by not recalling the machines sooner.

 

By May, along with news of the child's death, Peloton had received 72
reports of injuries such as broken bones, cuts and grazes.

 

The US Department of Justice and the Department of Homeland Security have
now subpoenaed the company to gain more information and investigate how the
firm handled reports of the injuries.

 

Peloton said it will cooperate "fully" with the investigations.

 

"We are unable to predict the eventual scope, duration or outcome of the
investigations," the firm said on Friday.

 

It added that it has been named in several lawsuits associated with the
widespread recalls. It told the BBC it could not comment further due to the
ongoing litigation.

 

The company's public disclosures about the injuries will also face scrutiny
from the US Consumer Product Safety Commission (CPSC), which is also
investigating the firm.

 

In April, the CPSC urged owners of a Peloton treadmill to stop using the
product "immediately" if they have children or pets in the home.

 

It said the exercise machine posed "serious risks to children for abrasions,
fractures, and death".

 

At the time, Peloton called the CPSC's warning "inaccurate and misleading".

 

"Like all motorised exercise equipment, the Tread+ can pose hazards if the
warnings and safety instructions are not followed," the firm said in April.

 

The investigations come as the company reports slowing sale growth slowing
after an initial boom in business as people sought alternative ways to
exercise during lockdowns and gym closures.

 

On Thursday the firm cut the price of its less expensive Bike machine for
the second time in 12 months. The machine will now cost about 20% less at
$1,495.

 

The company's shares fell by 9.2% on Friday, the lowest they have been in
almost three months.

 

In the year to date, shares in the firm have fallen by approximately
25%.--BBC

 

 

 

Federal Reserve hints it will start easing US stimulus

The US central bank could begin withdrawing stimulus this year as the
economy rebounds, the Federal Reserve's chairman, Jerome Powell, has said.

 

However, he said the bank was in no rush to raise interest rates despite a
recent spike in inflation.

 

The US economy contracted sharply during the pandemic but has bounced back
strongly in 2021.

 

But Mr Powell said he was monitoring the impact of the Delta variant which
is currently sweeping the US.

 

During the crisis, the Federal Reserve slashed US interest rates to almost
zero and stepped up its purchases of government and corporate bonds - known
as quantitative easing - to support the economy.

 

It has made it cheaper for consumers and businesses to borrow money, but
also raised concerns it is contributing to inflation.

 

Used cars and food push US prices higher

In his annual speech at the Jackson Hole Economic Policy Symposium, Mr
Powell said: "We have said that we would continue our asset purchases at the
current pace until we see substantial further progress toward our maximum
employment and price stability goals.

 

"My view is that the 'substantial further progress' test has been met for
inflation. There has also been clear progress toward maximum employment."

 

He said the bank would start easing the pace of asset purchases this year
while monitoring the "evolving risks" of coronavirus.

 

However, he said interest rate increases would be based upon the economy
returning to maximum employment and inflation returning to the bank's 2%
target.

 

"We have much ground to cover to reach maximum employment, and time will
tell whether we have reached 2% inflation on a sustainable basis," Mr Powell
said.

 

US consumer prices jumped 5.4% in the 12 months to the end of June, the
biggest increase since August 2008.

 

It has worried some analysts, but the Federal Reserve says it is confident
the trend is driven by the economy reopening after shutdown and is
transitory.

 

The US unemployment rate is 5.4% - down sharply from last year but still a
way off pre-pandemic levels.

 

However, Mr Powell said: "Despite today's challenges, the economy is on a
path to... high levels of employment and participation, broadly shared wage
gains, and inflation running close to our price stability goal."

 

'He doth protest too much'

Neil Wilson, an analyst at Markets.com, said: "Powell is a dove and wants
more time to assess the data on employment [before he begins tapering asset
purchases].

 

But he added: "In a speech that mentioned inflation 82 times, Powell sought
to explain over and over why inflation remains transitory. Methinks he doth
protest too much."

 

The Fed chairman may be under pressure from other members of the bank's
Federal Open Market Committee, which votes on fiscal policy, to change tack
sooner, said Michael Hewson of CMC Markets.

 

"Given today's comments [at Jackson Hole] by regional Fed presidents that
they want to get on with the process, a good [jobs] payrolls numbers next
week could make for an interesting meeting on 22 September."-BBC

 

 

 

Powell's wait-and-see speech reassures some investors

(Reuters) - U.S. Fed Chair Jerome Powell's wait-and-see approach in a
much-anticipated address on Friday gave investors and market participants
some reassurance that the central bank's extraordinary efforts to prop up
the economy were likely to support riskier assets a while longer.

 

In remarks to the annual, but this year virtual Jackson Hole economic
conference, Powell said the economy continues to make progress toward
benchmarks for reducing the Fed's pandemic-era emergency programs, while
signaling caution over any eventual decision to raise interest rates. read
more

 

Powell offered no indication on when the central bank plans to cut its asset
purchases beyond saying it could be "this year."

 

"We're still going to have very easy policy for a year probably and that's
good for risk assets," said Kathy Jones, chief fixed-income strategist at
the Schwab Center for Financial Research.

 

Stocks gained ground after the release of the text of Powell's speech, with
the benchmark S&P 500 index (.SPX) hitting a record high, while the lack of
any new hints on when the U.S. central bank is likely to begin paring bond
purchases led Treasury bond yields and the U.S. dollar lower. read more

 

Still, some cautioned of the potential for more volatility in Treasuries
around market close, with more than 2 million options in the September
10-year futures contact expiring on Friday, said Charlie McElligott,
managing director, cross-asset strategy, global equity derivatives, at
Nomura Securities International Inc.

 

Investors had been focused on a potentially imminent decision by the central
bank to begin reducing its $120 billion in monthly purchases of U.S.
Treasuries and mortgage-backed securities. Powell said he agreed with the
majority of his colleagues that a bond "taper" could be appropriate "this
year."

 

Schwab's Jones said the Fed could announce tapering as early as its
September meeting if the August employment report due out on Sept. 3 is
strong, although weaker-than-expected jobs data could push the announcement
to December.

 

Jones added that she does not see any reason for investors to adjust their
market positions in light of Powell's remarks and given the slow pace of
policy change.

 

"So barring some big surprises, I think you'll still continue to see stocks
perform, high-yield bonds, investment grade credits - they may all be highly
priced and priced for perfection, but I don't think we're getting a signal
from the Fed that they're about to pull back enough to change the trend,"
she said.

 

Rick Rieder, BlackRock’s chief investment officer of Global Fixed Income,
said in a research note that while "each nuance of the chair’s speech will
be parsed for further clues regarding the central bank’s plans on asset
purchase tapering ... overall, we think concerns are overstated here."

 

STATUS QUO AND WATCH THE DATA

 

For U.S. Treasuries, Powell's message was "status quo and watch the data,"
according to Gennadiy Goldberg, interest rate strategist at TD Securities.

 

"Really, the data over the next month or two will determine the actions the
Fed takes," he said.

 

Roberto Perli, head of global policy at Cornerstone Macro, said the hurdle
for raising interest rates next year is high, given Powell's remarks, which
included "a litany of reasons why inflation should be temporary."

 

"If the market eventually comes to accept Powell's outlook on rate hikes,
the yield curve should resteepen a little bit," Perli said.

 

U.S. Treasury prices, particularly in the 5-7 year part of the curve,
rallied, which Bank of America analysts said was the market reading Powell's
comments "as suggesting there will be ongoing challenges for the Fed to meet
their rate hike thresholds."

 

The Fed has a three-part test for meeting the threshold to raise rates: the
labor market needs to be consistent with assessments of maximum employment;
that inflation has risen to 2%; and inflation is on track to moderately
exceed 2% for some time. While the second condition has been satisfied - the
Fed's gauge for inflation has been above 2% for several months - Powell
indicated that meeting the other two conditions was anything but near at
hand.

 

"We have much ground to cover to reach maximum employment, and time will
tell whether we have reached 2% inflation on a sustainable basis," Powell
said.

 

For Jay Hatfield, chief executive officer of Infrastructure Capital
Management, Powell's words did little to upset the cart for risk assets.
Even if investors believe the Fed is making a mistake in treating inflation
as transitory and could hurt riskier assets eventually when it corrects
itself, it is not yet time to abandon riskier assets for safe havens.

 

"You stay at the party until the punch bowl actually gets taken away, but
you have your Uber waiting outside," Hatfield said.

 

The Thomson Reuters Trust Principles.

 

 

 

Canada joins Mexico in seeking consultation with U.S. over USMCA content
rules

(Reuters) - Canada has joined Mexico in seeking formal consultation with the
United States over the interpretation of content rules for automobiles set
out in the North American trade pact, Mexico and Canada said on Friday.

 

Mexico on Aug. 20 requested the formal consultation over the interpretation
and application of tougher content rules for cars under the United
States-Mexico-Canada Agreement (USMCA), after voicing disagreement in May
over the issue in a virtual meeting when it cited differences with the
United States' methods. read more

 

Canada and Mexico use more flexible interpretations.

 

"We know how important the auto industry is to Canada's workers and the
Canadian economy. Canada has advised the U.S. and Mexico that it intends to
join the consultations as a third party," said Patricia Skinner, spokeswoman
for Global Affairs Canada.

 

Skinner said Canada continues to work with the auto industry on this and
other important issues.

 

"We are pleased Canada has decided to join the request for consultations,
which we requested on August 20, in relation to the interpretation the
United States makes of the rules of origin in USMCA for the automotive
sector," Mexico's economy minister, Tatiana Clouthier, said on Twitter.

 

The USMCA, the successor to the North American Free Trade Agreement,
requires 75% North American content for a vehicle to be considered as being
from North America.

 

The same percentage will apply for essential parts from July 1, 2023, up
from 69% now, and compared with 62.5% under the previous trade pact. Mexico
argues that once the level of essential parts hits 75%, it is considered
100% and should be counted as such toward the overall value of the
automobile.

 

The request for consultation is the first non-contentious stage of a dispute
resolution mechanism provided for in the trade pact.

 

The Thomson Reuters Trust Principles.

 

 

Automobiles restrain U.S. consumer spending, monthly inflation slowing

(Reuters) - U.S. consumer spending slowed in July as a decline in motor
vehicle purchases due to shortages offset a rise in outlays on services,
supporting views that economic growth will moderate in the third quarter
amid a resurgence in COVID-19 infections.

 

But the foundation for the recovery remains solid, with the report from the
Commerce Department on Friday showing wages rising and Americans further
boosting savings. Inflation appears to have peaked, which could preserve
households' purchasing power. Businesses are also restocking and exporting
more goods, suggesting a slowdown in growth this quarter could be temporary.

 

"There are clear downside risks to spending if more events and trips are
canceled and more products are delayed getting to shelves," said Sal
Guatieri, a senior economist at BMO Capital Markets in Toronto. "But it's a
bit early to throw in the towel on the economic outlook given supportive
wage and saving trends and a likely boost from business investment,
inventories, and trade in the third quarter."

 

Consumer spending, which accounts for more than two-thirds of U.S. economic
activity, increased 0.3% last month after advancing 1.1% in June. Last
month's rise was in line with economists' expectations.

 

Demand is rotating back to services like travel and leisure, but spending
has been insufficient to compensate for the drop in goods purchases, which
are also being impacted by shortages.

 

Goods spending fell 1.1% last month, led by motor vehicles. A global
shortage of semiconductors is hampering auto production. There were also
decreases in spending on recreational goods as well as clothing and
footwear. Still, goods spending is 20% above its pre-pandemic level.

 

Spending on services rose 1.0%, a broad increase led by food services and
accommodations. Outlays on services last month were 1% above their February
2020 level. Healthcare, transportation and recreation are yet to recoup
their pandemic losses.

 

Credit card data suggests spending on services like airfares and cruises as
well as hotels and motels slowed in August amid soaring COVID-19 cases
driven by the Delta variant.

 

Fears about the virus knocked consumer sentiment to a more than 9-1/2-year
low in August.

 

Personal consumption

Inflation continued to rise last month, fanned by the unrelenting supply
constraints and the economy's move toward normalcy after the upheaval caused
by the pandemic. But the pace of increase is slowing.

 

The personal consumption expenditures (PCE) price index, excluding the
volatile food and energy components, climbed 0.3% in July. That was the
smallest gain in five months and followed a 0.5% advance in June. In the 12
months through July, the so-called core PCE price index rose 3.6% after a
similar increase in June. The core PCE price index is the Federal Reserve's
preferred inflation measure for its flexible 2% target.

 

Fed Chair Jerome Powell in a speech to the Jackson Hole economic conference
on Friday defended his long-held view that high inflation would be
transitory. Powell said the economy continued to make progress towards the
U.S. central bank's benchmarks for reducing its massive support, but stopped
short of signaling the timing for any policy shift. read more

 

Powell's comments buoyed U.S. stocks, with the S&P 500 (.SPX) and the Nasdaq
(.IXIC) scaling record highs.

 

The dollar fell against a basket of currencies. U.S. Treasury prices rose.

 

 

Inflation

INCOME, SAVINGS RISE

 

High inflation chipped away at consumer spending last month. Consumer
spending adjusted for inflation dipped 0.1%. The so-called real consumer
spending rose 0.5% in June. Real consumer spending is slightly above the
second-quarter average.

 

"Spending growth in the current quarter is still guaranteed to be far below
the 11.6% annualized rate of the first half of the year, but at least it is
starting in positive territory," said Lou Crandall, chief economist at
Wrightson ICAP in Jersey City.

 

The Atlanta Fed cut its third-quarter GDP growth estimate to a 5.1% rate
from a 5.7% pace. The resurgence in COVID-19 cases, which is global, could
cause more supply disruptions.

 

The economy grew at a 6.6% pace in the second quarter, which raised the
level of gross domestic product above its peak in the fourth quarter of
2019.

 

But the drag from slowing consumer spending this quarter is likely to be
limited by a narrowing trade deficit and the replenishing of depleted
inventories by businesses.

 

In another report on Friday, the Commerce Department said the goods trade
deficit decreased 6.2% to $86.4 billion last month as imports fell and
exports rose.

 

Retail inventories gained 0.4%, while stocks of goods at wholesalers
increased 0.6%.

 

Trade balance

Overall, the economy remains supported by record corporate profits.
Households accumulated at least $2.5 trillion in excess savings during the
pandemic. Growth is expected to pick up in the fourth quarter, in part
driven by inventory accumulation.

 

The saving rate increased to 9.6% last month from 8.8% in June as some of
the money disbursed by the government under the Child Tax Credit program to
qualifying households was socked away. Personal income shot up 1.1% after
gaining 0.2% in June.

 

Wages also rose as companies compete for scarce workers, increasing 1.0% in
July. Income at the disposal of households after accounting for inflation
rebounded 0.7% after three straight monthly declines.

 

Household wealth is also being boosted by high stock market prices and
accelerating home prices.

 

"The overall position of the household sector is strong and consumers have
plenty of buying power," said Conrad DeQuadros, senior economic advisor at
Brean Capital in New York.

 

The Thomson Reuters Trust Principles.

 

 

 

Salesforce rival Freshworks reveals revenue surge in IPO filing

(Reuters) - Business and customer engagement software company Freshworks Inc
on Friday made public its filing for an initial public offering in the
United States, reporting a nearly 53% surge in revenue as more customers
signed up for its services.

 

The Salesforce.com Inc (CRM.N) rival revealed it had earned $168.9 million
in revenue for the six months ended June 30 this year in a regulatory
filing, up from $110.5 million in the same period last year.

 

Net loss came in at $9.8 million for the same period, down nearly 83% from a
year earlier.

 

Freshworks has not yet set the terms for its offering, but Reuters reported
in April it could aim for a valuation of up to $10 billion. read more

 

San Mateo, California-based Freshworks joins a wave of listings from the
software and technology sector, most of which have been welcomed by
investors who see room for growth even after the pandemic, as more companies
embracing hybrid work drive up demand for such products.

 

Launched in 2010 as Freshdesk from the Indian city of Chennai by Girish
Mathrubootham and Shan Krishnasamy, Freshworks raised its first round of
funds in 2011, the same year it bagged its first customer - the Atwell
College in Australia.

 

Backed by investors including Sequoia Capital and Tiger Global Management,
Freshworks has a suite of products that help business with customer
management, like a messaging platform, an artificial-intelligence powered
chatbot for customer support and call center solutions that promise shorter
wait times.

 

It also allows for automation of routine, repetitive tasks and managing of
various HR functions like hiring, onboarding and tracking employee data.

 

Freshworks said its technology is used by more than 50,000 companies,
including Delivery Hero SE (DHER.DE), Swedish payments firm Klarna, Cisco
Systems (CSCO.O) and General Electric Co (GE.N).

 

Freshworks plans to list on the Nasdaq under the symbol "FRSH". Morgan
Stanley, J.P. Morgan and BofA Securities are the lead underwriters for the
offering.

 

The Thomson Reuters Trust Principles.

 

 

 

Wall St Week Ahead A blazing U.S. stock rally faces market's toughest month

(Reuters) - A rally in which U.S. stocks have doubled from post-pandemic
lows is about to enter the year’s worst month for equities, as investors
focus on a nationwide COVID-19 resurgence and how quickly the Federal
Reserve plans to pull back on its easy money policies.

 

September has been the worst month of the year for the S&P 500 (.SPX), with
the benchmark index falling an average of 0.56% since 1945, according to Sam
Stovall, chief investment strategist at CFRA. The S&P has advanced only 45%
of the time in September, the lowest rate of any month, CFRA’s data showed.

 

This time around, stocks have momentum on their side. The S&P 500 notched
its 52nd record closing high of the year on Friday and has gained 20% so far
in 2021, having gone 287 calendar days without a pullback of 5% or more.

 

That type of performance has signaled comparatively strong returns in the
past. The index has gone on to deliver a median gain of 5.2% for the rest of
the year during years when it made 30 or more new highs through August,
according to data from LPL Financial. That compares with a median gain of
3.6% for all years, the firm's data showed.

 

A speech by Fed Chair Jerome Powell on Friday helped allay concerns that the
central bank will pull back too soon on the $120 billion in monthly
government bond buying that has helped buoy markets, pushing the S&P to
fresh records. read more

 

Still, signs of caution have been growing in some corners of the market,
fueled in part by rising coronavirus cases across the country and
uncertainty over how quickly the Fed will tighten monetary policy once it
begins its taper.

 

With worries over the Delta variant looming, "to continue to question the
rally because of seasonality makes sense," said JJ Kinahan, chief market
strategist at TD Ameritrade.

 

 

While major indexes stand near fresh highs, many stocks have been left
behind. Tuesday marked the first time in nearly seven years that the S&P 500
hit a closing high while a 10-day total showed more stocks on the New York
Stock Exchange and Nasdaq making 52-week lows than making 52-week highs,
according to Willie Delwiche, an investment strategist with market research
firm All Star Charts.

 

Investors have also been cutting back on leverage, with margin debt dropping
4.3% to $844 billion in July even as the S&P advanced more than 2%,
according to data from BofA Global Research. The S&P 500 has been lower 71%
of the time one year after a peak in margin debt has been reached, the
bank’s analysis showed.

 

Net leverage among hedge funds, meanwhile, stood at 50% at the start of the
third quarter compared with 58% late last year, according to a Goldman Sachs
report.

 

Though the market’s year-to-date gains have been spectacular, investors have
questioned how much juice remains in the rally. A Reuters poll this week
showed strategists believe the S&P 500 is likely to end 2021 not far from
its current level. read more

 

 

A window into how the Delta variant has rippled through the economy will
come next Friday, with the release of the U.S. jobs report for August,
following recent weak readings on consumer sentiment and retail sales. The
seven-day average of new reported cases reached about 155,000, the highest
in about seven months, Reuters data through Thursday showed.

 

"When I sift through the noise ... that’s what the market is focusing on
right now, plain and simple,” said Jack Janasiewicz, portfolio manager at
Natixis Investment Managers Solutions.

 

Still, there is plenty of support for the view that equities are likely to
continue grinding higher into the end of the year.

 

BofA Securities said buybacks from corporate clients last week hit their
highest level since mid-March, a potential source of support for stocks.
Those were led by financials, which notched their highest weekly buybacks
since 2010, BofA wrote.

 

“Despite the tangible Covid variant spike, we think the economy will
continue to chug along," boosted by corporate and consumer spending, said
Rick Rieder, BlackRock’s chief investment officer of global fixed income, in
a note to investors on Friday.

 

Some investors remain ready to jump on any downswings brought on by higher
volatility in the coming weeks.

 

"If we do see a pullback in September, I would definitely be telling our
clients, 'take this as a buying opportunity,'" said Janasiewicz.

 

The Thomson Reuters Trust Principles.

 

 

 

Western Digital $20 billion all-stock offer for Kioxia poses valuation, cash
challenge - analysts

(Reuters) - A possible merger between storage hardware maker Western Digital
Corp (WDC.O) with its Japanese partner and chipmaker Kioxia Holdings could
create a NAND memory chipmaking giant that rivals Samsung Electronics
(005930.KS).

 

But analysts are questioning whether Kioxia's investors will accept the
price and terms of the reported $20 billion all-stock offer from Western
Digital, which would provide no cash to the Japanese firm and put a lower
value on it than other comparable deals in the industry. Western Digital on
Friday filed documents to issue more shares but did not disclose the size of
the offering. read more

 

Kioxia is one the largest players in NAND memory chips that provide the
storage space in phones and hard drives, competing with South Korea's
Samsung and SK Hynix. Hynix last year agreed to buy U.S. chipmaker Intel
Corp's (INTC.O) NAND business for $9 billion.

 

Analysts said the Intel deal provides a sense of what buyers are willing to
pay for memory companies. Summit Insights Group analyst Kinngai Chan said
that Kioxia has about three times the sales of Intel's memory unit, so
Kioxia's owners may want about three times the price - $25 billion to $28
billion.

 

But Western Digital's entire market valuation is lower than Chan's estimated
price tag for Kioxia at about $20 billion as of its close Aug. 25 when the
media reports on the deal came out. In a note to investors, UBS analyst
Timothy Arcuri said even at a $20 billion price tag for Kioxia, the Japanese
firm's huge price relative to Western Digital's overall value makes it "hard
to see WDC wanting to issue that much stock at this valuation."

 

Analysts instead said that investors in Kioxia, which was sold by Toshiba
Corp (6502.T) in 2018 to a consortium led by private equity firm Bain
Capital for $18 billion as Toshiba Memory Corp, would prefer an all-cash
deal or at least a deal with a heavy cash component. But some analysts
believe Kioxia's owners could come around to an all-stock deal if they
believe the combined company's shares will rise in the coming years.

 

"It could be a long-term play on the combined company's success," said
William Kerwin, analyst at Morningstar Research. "Or it may have been the
only way to offload Kioxia at a valuation they wanted."

 

The Thomson Reuters Trust Principles.

 

 

Schlumberger pushes COVID-19 vaccine disclosures as customer mandates grow

(Reuters) - Top oilfield services firm Schlumberger NV (SLB.N) is asking
U.S. employees to disclose their COVID-19 vaccine status and said more
customers are mandating vaccinations as a condition for working on their job
sites, the company said on Friday.

 

Oil and gas companies have begun ordering certain employees and new hires
get vaccinated as Delta variant infections and hospitalizations rise. The
Food and Drug Administration this week gave full approval to the Pfizer
BioNTech COVID-19 vaccine, making it easier for companies to require the
shot.

 

"Customers have begun to mandate vaccinated personnel as an eligibility
requirement to service their operations," James R. McDonald, president of
Schlumberger's Americas Land business, said in an Aug. 27 email sent to
employees and seen by Reuters. Several offshore operators have already
enforced the mandate, he said.

 

As an oilfield service provider, Schlumberger's employees are often working
on job sites operated and run by other oil and gas companies.

 

"All employees and contractors will need to disclose their vaccination
status through a protocol that protects this information under U.S.
regulatory guidelines," the email also said.

 

Schlumberger in a statement said employees have an option to decline to
disclose if they wish.

 

Oil producers Hess (HES.N) and Chevron (CVX.N) have said workers in their
Gulf of Mexico operations would be required to be fully vaccinated by Nov.
1. Shale major Pioneer Natural Resources (PXD.N) also is requiring new
employees to be fully vaccinated before their first day of work. read more

 

Schlumberger's call for employees to disclose their vaccination status,
McDonald said the email, will allow the company to "enhance our mitigation
measures to keep people safe and enable business continuity."

 

The Thomson Reuters Trust Principles.

 

 

Biden admin defends approving licenses for auto chips for Huawei

(Reuters) - The Biden administration, which was criticized this week for
approving licenses for auto chips for Huawei, said it has not changed the
policy on restricting sales of goods and technology to the Chinese company
that was put in place during the Trump presidency.

 

"The policy has not been eased or amended," a Commerce Department
spokesperson said.

 

The comments came in response to demands from Sen. Marco Rubio that U.S.
officials explain why they approved hundreds of millions of dollars worth of
auto chip sales to the company, as reported by Reuters this week. read more

 

Rubio called the move "yet another example of President Biden's failure to
protect America's economic and national security."

 

Huawei was placed on a U.S. trade blacklist in 2019, after the Trump
administration said it was operating contrary to national security and
foreign policy interests.

 

The so-called "entity list" restricts suppliers from selling U.S. goods and
technology to the world's largest telecommunications equipment maker. The
Commerce Department is prohibited from disclosing license approvals or
denials, the spokesperson has said.

 

But some sales were allowed and others denied as the United States
intensified its crackdown on the company and expanded U.S. authority to
require licenses for sales of semiconductors made abroad with American
technology.

 

An August 2020 rule said that licenses for products with 5G capabilities
were likely to be rejected, but sales of less sophisticated technology would
be decided on a case-by-case basis.

 

During the Trump administration, $87 billion worth of licenses for Huawei
were approved after its blacklisting, but $119 billion were denied as the
presidency wound down in January, according to a Commerce Department
document seen by Reuters.

 

"The Biden Administration has not changed the regulatory restrictions on
Huawei and its affiliates on the Entity List imposed in 2019 or 2020 or the
policy for implementing those restrictions developed during the Trump
administration," the Commerce Department spokesperson said.

 

Other congressional China hawks also have criticized the auto chip
approvals, with Mike Rogers, lead Republican on the Armed Services
committee, urging that the licenses be revoked.

 

The Thomson Reuters Trust Principles.

 

 

 

ESPN explores sports-betting deal worth at least $3 billion - WSJ

(Reuters) - Walt Disney Co's (DIS.N) ESPN is looking to license its brand to
major sports-betting companies for at least $3 billion over several years to
take advantage of the booming online betting industry, the Wall Street
Journal reported on Friday.

 

It held talks to license its brand to sportsbooks including Caesars
Entertainment (CZR.O) and DraftKings (DKNG.O), the report said, adding there
is no guarantee that it will reach a deal.

 

The companies did not immediately respond to requests from Reuters for
comment.

 

It remains unclear whether gaming companies would want to pay for the ESPN
name when they are already investing to establish their existing brands, the
report said.

 

As more states legalize sports betting, media companies have turned to the
sector to diversify their revenue. Fox Corp (FOXA.O)launched the FOX Bet
sports betting platform in 2019 through a partnership with The Stars Group.

 

Disney shares jumped 2.1% after the news.

 

The Thomson Reuters Trust Principles.

 

 

 

Kraft Heinz to mandate COVID-19 vaccines for office employees

(Reuters) - Kraft Heinz Co (KHC.O) said on Friday all U.S. employees will
need to be fully vaccinated against COVID-19 before returning to offices in
January, as the fast-spreading Delta variant batters the United States.

 

The packaged-food maker's announcement comes days after the U.S. Food and
Drug Administration granted full approval to the Pfizer Inc (PFE.N)/BioNTech
SE (22UAy.DE) vaccine, a certification that public health officials hope
will convince unvaccinated Americans that the shot is safe and effective.
(https://reut.rs/3jmYE26)

 

The resurgence of COVID-19 cases in the United States and new regulatory
guidance have led companies to change their plans on vaccinations and
masking. read more

 

For now, Kraft's decision to mandate vaccination applies only to its office
population, unless they have obtained a health-related or religious
accommodation, the company said.

 

Kraft also said its offices, including the Aon headquarters in Chicago,
would open in September on a voluntary basis to vaccinated employees.

 

The Thomson Reuters Trust Principles.

 

 

 

S&P 500, Nasdaq nab all-time closing highs as Powell soothes taper fears

(Reuters) - Wall Street rallied on Friday, pushing the S&P and the Nasdaq to
record closing highs for the fourth time this week, as U.S. Federal Reserve
Chairman Jerome Powell's remarks at the Jackson Hole Symposium calmed fears
over the tapering timetable and sent investors into the weekend in a buying
mood.

 

All three indexes posted weekly gains.

 

"I see two things happening," said Mike Zigmont, head of research and
trading at Harvest Volatility Management in New York. "I see a reflexive
dip-buying validation and I see the market embracing a dovish Fed."

 

Regarding the indexes' recent string of all-time highs, including the S&P
500's 52nd record high close so far this year, Zigmont said "The march north
has been very consistent. The drawdowns are super shallow, and the
recoveries are very fast."

 

 

In his prepared remarks, Powell stopped short of providing a clearer picture
regarding the timing of the central bank's tapering of asset purchases or
hiking interest rates, the key elements of its dovish monetary policy aimed
at helping the economy recover from the pandemic recession.

 

Indeed, Powell appeared to strike a more dovish tone than other Federal Open
Market Committee (FOMC) officials, including St. Louis Fed President James
Bullard and Cleveland Fed President Loretta Mester, who said earlier in the
day that they expect the tapering process to begin soon and wind down next
year.

 

"The market is very happy that the Fed is pumping more liquidity into the
economy every month," Zigmont added. "The Fed is enabling asset prices to
climb and the market is pleased with that."

 

Economic data released on Friday delivered, in large part, precisely what
economists expected - a pullback in consumer spending and sentiment due to
the COVID-19 Delta variant, and signs that the current wave of price spikes
will not morph into long term inflation, inline with Fed assurances.

 

The Dow Jones Industrial Average (.DJI) rose 242.68 points, or 0.69%, to
35,455.8, the S&P 500 (.SPX) gained 39.37 points, or 0.88%, to 4,509.37 and
the Nasdaq Composite (.IXIC) added 183.69 points, or 1.23%, to 15,129.50.

 

People are seen on Wall Street outside the New York Stock Exchange (NYSE) in
New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

Ten of the 11 major sectors of the S&P 500 advanced, with energy shares
(.SPNY) enjoying the largest percentage gain.

 

Chipmaker Nvidia's (NVDA.O) shares rose 2.6% after sources said it would
likely seek antitrust approval from the European Union to take over British
chip designer Arm. read more

 

Workday Inc (WDAY.O) jumped 9.1% as brokerages upped their price targets
after the company beat second-quarter revenue estimates.

 

Stay-at-home darling Peloton Interactive Inc (PTON.O) slid 8.5% following
its profit warning and its announcement it was being probed by U.S.
regulators over an accident involving the safety of its treadmills.

 

Beijing continued its crackdown on its tech companies, threatening to curb
their ability to list on U.S. exchanges.

 

U.S.-listed shares of Alibaba Group and Tencent Music Entertainment (TME.N)
fell 3.5% and 1.4%, respectively, while the Invesco Golden Dragon ETF
(PGJ.O) dropped 1.1%.

 

Advancing issues outnumbered declining ones on the NYSE by a 5.21-to-1
ratio; on Nasdaq, a 3.40-to-1 ratio favored advancers.

 

The S&P 500 posted 60 new 52-week highs and one new low; the Nasdaq
Composite recorded 132 new highs and 37 new lows.

 

Volume on U.S. exchanges was 8.67 billion shares, compared with the 8.95
billion average over the last 20 trading days.

 

The Thomson Reuters Trust Principles.

 

 

 

Amazon-backed Rivian files for IPO, gears up for blockbuster year-end
flotation

(Reuters) - Electric vehicle maker Rivian said it has confidentially filed
paperwork with regulators for an initial public offering, setting the stage
for a blockbuster year-end market debut as it looks to tap into a red-hot
IPO market in the U.S.

 

Rivian, which counts Amazon.com Inc (AMZN.O), Soros Fund Management and
BlackRock (BLK.N) among its major investors, will seek a valuation of around
$70-80 billion at the time of its initial public offering, two sources
familiar with the matter told Reuters on Friday.

 

At that valuation, Rivian would have a bigger market capitalization than
General Motors Co (GM.N), the largest U.S. automaker. But it would still be
dwarfed by Tesla Inc (TSLA.O), which boasts of a market cap of nearly $700
billion and is currently planning to build a pickup truck that would compete
with Rivian's own version.

 

Rivian's stock market flotation is expected to lead the year-end line-up for
U.S. IPOs, which have so far raised a record haul of over $225 billion this
year, according to data from Dealogic.

 

A number of high-profile names, including Chinese ride-hailing giant Didi
Global (DIDI.N), South Korean e-commerce giant Coupang (788.F) and
cryptocurrency exchange Coinbase Global (COIN.O), have already taken
advantage of record-breaking capital markets activity this year and floated
their shares on U.S. stock exchanges.

 

Several other big names are expected to go public in the last quarter of the
year, including the likes of chipmaker GlobalFoundries, restaurant software
provider Toast and private equity giant TPG, among others.

 

Rivian did not provide any other details on its IPO plans on Friday. It is
expected to lift the veil off its finances for the first time in a public
filing in the coming weeks.

 

The company is one of the most well-funded startups in the United States. It
raised $10.5 billion since the start of 2019, including $2.5 billion in July
in a round led by Amazon and Ford Motor Co (F.N). read more

 

RACE FOR SUPREMACY

 

Founded in 2009 as Mainstream Motors in 2009 by RJ Scaringe, the company
changed its name to Rivian in 2011. “Rivian” is derived from "Indian River"
in Florida, a place Scaringe frequented in a rowboat as a youth.

 

Rivian is looking to start production of an electric pick-up and an SUV this
year.

 

Rivian's filing comes as automakers are racing to develop electric
vehicles(EVs) as China, Europe and other countries and regions mandate lower
carbon emissions.

 

In the United States, traditional carmakers such as GM and Ford are
retrofitting plants for EV production, while Tesla, Taiwanese contract
manufacturer Foxconn (2317.TW) and several startups are expanding existing
plants or are building them.

 

Earlier this month, Reuters reported that Rivian was in discussions to
invest at least $5 billion in a new vehicle plant near Fort Worth, Texas.
read more

 

Rivian is currently pursuing a two-track strategy: building electric
delivery vans for Amazon, while developing an electric pickup and SUV brand
aimed at affluent individuals.

 

Amazon has ordered 100,000 of Rivian's electric delivery vans as part of the
e-commerce giant's broader effort to cut its carbon footprint.

 

This year, however, has not been without challenges for Rivian, as CEO
Scaringe in July told customers the pandemic had delayed the launch of its
vehicles. read more

 

Apart from Rivian, a slew of fast-growing EV startups have taken advantage
of the capital markets boom in the past 12 months, especially with the rise
of special purpose acquisition companies (SPACs).

 

The likes of Lucid Motors, Nikola Corp (NKLA.O), Fisker Inc (FSR.N) and
Lordstown Motors Corp (RIDE.O), have all chosen to merge with blank check
firms to go public.

 

 

 

Liberia: The Country's Debt Stands At U.S.$1.47 Billion

Liberia's current debt stands at US$1.47bilion dollars, according to the
Deputy Minister for Fiscal Affairs, Dr. Atty Samora P.Z. Wolokollie.

 

He told journalists on Thursday, August 26, 2021 at the Ministry of
Information, Culture and Tourism regular press briefing.

 

He said, "the country's total debt stock as at end February 2020 stands at
US$1.47 billion of which domestic debts account for US$604.4 million (41
percent) while the external debt stock account for US$861.8 million (59
percent)."

 

With this, the domestic debt owed the Central bank of Liberia amounts to
US$487.5 million(80.7 percent),commercial banks, US$65.2 million (10.8
percent); other institutions, US$51.5 million (8.5 percent); and claims,
US$0.2 million. On the other hand, of the total external debt, multilateral
institutions account for US$748.3 million (86.8 percent) while bilateral
sources account US$113.5 million (13.2 percent).

Deputy Minister Wolokolie said at June 30, 2021, domestic revenue peaked to
a record $560 Million United States Dollars - the highest ever recorded!.
According to him, that revenue generation was credited to various tax policy
(Excise Tax Reform, Investment Incentives Reforms, Surcharge Reforms, etc.)
and tax administration efforts (Online tax payment, robust tax enforcement
mechanisms, etc.) by the Ministry of Finance and Development Planning and
the Liberia Revenue Authority.

 

(Read the full text of his speech): Officials of Government present, invited
guests, the members of the Fourth Estate, distinguished ladies and
gentlemen:

 

I am profoundly pleased to be here today, and exceedingly grateful to the
Leadership of the Ministry of Information Culture and Tourism (MICAT) for
inviting me to speak at this historic forum. I could not be humbler to stand
here today as one of the speakers here at this auspicious occasion
especially having the distinguished honor of sharing this platform where
many other great erudite statesmen in have once appeared. Thank you Mr.
Minister of Information and team for the invite.

Within the context of the Pro Poor Agenda for Prosperity and Development,
PAPD, the Government of Liberia under the leadership of H.E. Dr. George
Manneh Weah is fully committed to domestic resource mobilization. The fiscal
direction of this Government is more focused on ensuring that domestic
resources are maximized. This Government believes that to increase our
resource envelope (our budget), we must look within - that is we must review
our fiscal policies, especially revenue policies with the objective of
ensuring that those policies are geared toward the expansion of economic
activities.

 

These expansionary policies will ultimately lead to increased economic
activities and subsequently to more domestic tax generation. Our focus on
domestic resource mobilization would also ensure that our tax regimes are
not overly restrictive and prohibitive. Our objective is to foster those
policies that would facilitate trade and other economic activities.

For the period under review, that is, fiscal year 2020/2021, ending June 30,
2021, I am pleased to report that this Government, under the leadership of
Dr. George Manneh Weah, with fiscal guidance by Minister Samuel D. Tweah,
Jr., recorded a significant milestone in domestic revenue generation. At
June 30, 2021, domestic revenue peaked to a record $560 Million United
States Dollars - the highest ever recorded! This magnificent performance in
domestic revenue generation can be credited to various tax policy (Excise
Tax Reform, Investment Incentives Reforms, Surcharge Reforms, etc.) and tax
administration efforts (Online tax payment, robust tax enforcement
mechanisms, etc.) by the Ministry of Finance and Development Planning and
the Liberia Revenue Authority.

 

A year-on-year comparison of domestic revenue performance shows the
following:

 

For now, and into the foreseeable future, this Government will continue to
take deliberate steps aimed at increasing domestic revenue so that the lives
of our people are improved and infrastructure development is achieved.

 

#6. The total draft budget for FY 2020/2021 covering the period July 1, 2020
- June 30, 2021, as enacted by the National Legislature and signed into law
by the President was $570.1 Million United States Dollars. The breakdown of
which is as follows:

 

Domestic Revenue - $ 428.1 Million Dollars

 

External Resources - $132.0 Million Dollars

 

Brought Forward - $10 Million Dollars

 

Total - $570.1 Million Dollars

 

During the course of the execution of the budget, actual revenue over
performed the projected revenue envelope. This over performance resulted in
the recast of the previously submitted budget. This recast, unlike many
other recast in the past, was to account for the over performance of
revenue, not its underperformance. As stated earlier, the budget for the
last fiscal year, FY 2020/2021 recorded a significant over performance due
to prudent fiscal leadership. The recast resulted into the revised budget as
indicated below:

 

Domestic Revenue - $466.8 Million Dollars

 

External Resources - $133.5 Million

 

Cash brought forward - $23.8 Million

 

Total Resource Envelope - $624.1 Million Dollars

 

Ladies and Gentlemen of the Press, it is my pleasure and honor to inform you
that in spite of the recast to increase the resource envelope for the budget
year under review, the year-end revenue again exceeded projection. At year
end (June 30, 2021), and pending final reconciliation, total revenue
collected for FY 2020/2021 amounted to $695.7 Million Dollars - resulting in
a whopping $71.6 Million Dollars over performance of revenue. In simple and
direct terms: Revenue exceeded approved expenditures by $71.6 Million
Dollars - Revenue over performed and this over performance was mainly on
account of Domestic Revenue.

 

Public Debts

 

The country's total debt stock as at end February 2020 stands at US$1.47
billion of which domestic debts account for US$604.4 million (41 percent)
while the external debt stock account for US$861.8 million (59 percent). Of
the domestic debts, debt owed to the CBL amounts to US$487.5 million (80.7
percent); commercial banks, US$65.2 million (10.8 percent); other
institutions, US$51.5 million (8.5 percent); and claims, US$0.2 million. On
the other hand, of the total external debt, multilateral institutions
account for US$748.3 million (86.8 percent) while bilateral sources account
US$113.5 million (13.2 percent).

 

Rising debt levels coupled with falling growth rates have resulted into the
country being classified into the category of moderate rate of debt distress
and as such, it inhibits our ability to borrow to finance infrastructure
projects needed to narrow our infrastructure gap and to also fund a
meaningful stimulus package for the country.

 

Hence, to curb the increase in the public debt, the government is committed
to attracting donor grants and low cost financing to support the fight
against the virus and to stimulate the economy.

 

Total debt service as at end February 2020 amounted to US$21.4 million of
which principal repayment amounted to US$7.6 million (35.5 percent),
interest payment amounted to US$12.8 million (59.8 percent), while
subscription amounted to US$1.0 million (4.7 percent). Of the principal
repayment, domestic debt accounted for US$2.2 million (28.9 percent) with
payments made entirely to debts owed to other institutions while external
debt accounted for US$5.4 million (71.1 percent) of which multilateral
sources account for US$4.1 million (75.9 percent) while bilateral sources
account for US$1.3 million (24.1 percent). With regards to interest payment,
interest paid on domestic debt amounted to about US$8.0 million of which
US$5.9 million was paid to commercial banks while US$0.2 million was paid to
other institutions. This made interest paid on external debt amounted to
US$4.8 million with interest paid on multilateral debt amounting to US$3.8
million while bilateral debt amounted to US$1.0 million.

 

A major challenge to the country at this crucial time is that those debts
previously contracted on concessional terms are coming due now. Thus, with
falling growth rate and revenue, rising expenditures and widening current
account and fiscal deficits, the country risks defaulting on its debt
service obligations.

 

To prevent this from occurring, the Government is seeking debt waiver on its
external debts and a restructuring of its domestic debts. The IMF under the
Catastrophe Containment and Relief Trust (CCRT) has approved debt service
relief for the country. This provides grant to cover IMF debt obligation for
an initial phase over the next six months. This frees up scares financial
resources to be channeled towards the health sector to combat the viral
outbreak and also towards domestic debt services to stimulate the domestic
economy.

 

For the purposes of today's event, I have also come to inform the Liberian
people and the world at large about recent transformative developments that
have been achieved at the Ministry of Finance and Development Planning.
These developments include, but are not limited to regularization of the
payroll process, prudent cash management, tax policy reform and financial
reporting.

 

Payroll:

 

Under the direction of our Minister, the erudite, Samuel D. Tweah, Jr., we
have successfully cleared the backlog of unpaid salaries, regularized salary
payment, and taken proactive steps to clean the payroll of any defects. In
this role, the collaborative efforts of the Civil Service Agency cannot be
overemphasized, and we must commend its Director General for his leadership
in collaborating with the MFDP and the IAA.

 

Prudent Cash Management System:

 

In addition to the launch of the new Fiscal Data Transparency Measure, the
Ministry has begun implementing a newly designed Cash Management System that
has effectively addressed the issue of the unavailability of cash when
allotment is being made. Under the new system, allotments are now being
approved based on the availability of cash.

 

In order to buttress fiscal transparency, a weekly fiscal report is
published on the Ministry of Finance and Development Planning website which
detail inflow and outflow of GoL budget execution. This report entails
Appropriation, Allotments, Financial budget and cash Expenditures by
economic classification for Ministries and Agencies.

 

In addition to strengthening fiscal transparency, the Ministry of Finance
and Development Planning (MFDP) has embarked on a First in First Out (FIFO)
approval process at the cash management and Financial Approval unit. By
this, M&As will received an alert or a call whenever payments are approved
in financial budget. Moreover, the ministry has also embarked on a working
relationship with the Internal Audit Agency (IAA) to improve on the Public
Financial Management (PFM) reinforcement and also fast track the payment
process flow. With this relation, a clearing house comprising staff from the
IAA and MFDP will clear every payment vouchers in order to enhance the
process flow.

 

#4 Comparative Analysis on the drop in inflation:

 

2015 7.75%

 

2016 8.83%

 

2017 12.42%

 

2018 23.55%

 

2019 26.97% - up to 31% at end December

 

2020 16.95%

 

Jan. 2021 10.86 %

 

Current 0.7%

 

As a result of a prudent cash management and fiscal discipline by spending
within our means and not borrowing from the Central Bank of Liberia (CBL)
through which arrears were accumulated and the payment of our debts
especially international debts, which has given rise to constant inflows of
budget supports, there has been a tremendous decline in inflation from 31%
in December 2019 to 0.7% in April 2021.

 

In addition to the deliberate fiscal measures aimed at ensuring the decline
of inflation rate, the Ministry of Finance and Development Planning embarked
on the following strategic undertakings of Macroeconomic reforms consistent
with both domestic and international best practices leveraging support from
both bilateral and multilateral like IMF, World Bank, AFDB, EU, etc.:

 

These reforms are in four broad areas:

 

A. Restoring Macroeconomic Stability

 

B. Ensuring a fiscally sustainable growth path

 

C. Addressing weaknesses in public sector governance and the rule of law

 

D. Providing basic social services

 

Reducing inflation from a Fiscal indicator perspective is supported by the
full implementation of the above reforms with specific actions like:

 

a. Reducing and adjusting wage and timely payment of salaries for Government
employees

 

b Paying the Country's debt on time (especially external debt while working
to improve the domestic vendors' payments)

 

c. Ensuring that there is absolutely NO borrowing from the Central Bank of
Liberia (CBL)

 

d. Investing in projects that are beneficial (i.e. Agriculture,
infrastructure- roads, energy (electricity)

 

e. Ensuring serious efforts to reduce the cost of doing business

 

With these fiscal measures put in place under the leadership of H.E. Dr.
George Manneh Weah, with the support and directional supervision of the
erudite Hon. Minister Samuel D. Tweah, Jr., the economy has experienced high
level of stability and we are convinced that economy will show better
performance in future years provided we continue of this unapologetic public
sector economic and financial management prudence.

 

I THANK YOU!- New Republic.

 

 

 

Nigeria's Ravenous Ports

On average, container traffic at the Nigeria's seaports stands at 822,868
annually. With N7.5 million required to clear and transport a 20-foot
container, shippers pay a whopping N5.1 trillion to have their cargoes
yearly. The revelation that Chinese shipping lines and their agents in
Nigeria have introduced double charges on the handling of groupage
containers means that the country's ports have become prohibitively
expensive. Eromosele Abiodun writes

 

While it is a well-established fact that international shipping is quite
complex and intricate, managers of the Nigerian maritime industry have made
the task even more complicated, leaving stakeholders wondering whose
interest is being served.

The issue of shipping charges readily comes to mind. For several years now,
operators and shipping companies have engaged in a battle of wits on what
operators see as the arbitrary and exorbitant cost of clearing goods from
the nation's seaports.

 

Last year, customs brokers operating at the Lagos ports declared war on
terminal operators and shipping companies over the N4 billion demurrage that
accrued as a result of a shelved industrial action by truck drivers. Also,
early last year, truckers shunned the lifting of cargoes at the ports in
protest over alleged extortion by security agencies, the result being the
accumulation of over N4 billion as demurrages and storage charges that
importers had to offset.

 

THISDAY investigations revealed that N668 million in demurrage was incurred
daily through the duration of the industrial action, which translated to N4
billion. The humongous amount resulted in a running battle between clearing
agents and importers, on one hand, and the service providers, on the other.
While the clearing agents were calling for waivers over the strike period,
the terminal operators remained indifferent. According to a manager in one
of the container terminals in Lagos, the terminal operators eventually
collected the demurrage that accrued during the period.

The cost of doing business in Nigerian ports ranks amongst the highest in
the world. Indeed, the country's ports are notorious for high demurrage
charges resulting from delays in the cargo clearing process; high insurance
premium of vessels coming to Nigeria and trucks conveying containers to and
from the ports, and higher shipping and terminal charges.

 

This is aside the total freight cost estimated at between $5 billion and $6
billion annually, according to the Ministry of Transportation.

 

According to the World Bank in its 2017 Annual Ease of Doing Business
Report, Nigeria was ranked 145 among 185 countries, while Mauritius, at 32,
was ranked the best in Africa. From the report, Trading Across borders, an
indicator for measuring a country's ports' effectiveness ranked Nigeria very
low at 183 out of 185 countries.

Also, figures released by the Nigerian Ports Authority (NPA) showed that
averagely, container traffic at the nation's seaports, comprising of Lagos
Port Complex, Tincan Island Port, Delta Port, Onne Port, Rivers Port and
Calabar Port, stands at 822,868 annually.

 

THISDAY findings from customs agents revealed that it takes about N7.5
million to clear and transport a 20-foot container laden with cargo worth
N41.11 million ($100,000) imported into Nigeria from China.

 

Of this amount, about N6.3 million, representing 82.1 per cent, is paid to
the Nigeria Customs Service (NCS) as Import Duty, Comprehensive Import
Supervision Scheme (CISS), ECOWAS Trade Liberalisation Scheme (ETLS), Port
Development Surcharge and Value Added Tax (VAT). Shipping companies are
responsible for 13.8 per cent of the port cost (N997,000); terminal
operators 1.8 per cent (N217,000); transporters 1.1 per cent (N91,500) and
clearing agents (N88,000).

 

This means that about N6.11 trillion is required to clear the 822,868
containers annually, while the shipping companies' charges stands at
N838.112 billion annually.

 

Chinese Invasion

 

An evolving development, which clearly shows that things are not about to
get better, is the emergence of Chinese Shipping Lines and their agents
operating in Nigerian ports. Inquiries revealed that they are taking
advantage of the chaos in the sector to rip off Nigerian shippers through
collection of double charges on handling of groupage containers, while also
causing unnecessary delays in cargo delivery.

 

A groupage container is a situation whereby two or three consignees come
together and put their cargoes into a single container as a full container
load.

 

Two days ago, Nigerian shippers raised the alarm that local shipping agents
have added a lot of charges against the consignees, which was far and above
the cost of the cargo itself.

 

Recently, the Nigerian Shippers Council (NSC), through the Port Standing
Task Team (PSTT), the operational arm of the Nigeria Port Process Manual
(NPPM) domiciled under the Council, secured the released of three
consignments detained by a Chinese Shipping Company, COSCO Shipping Limited,
after one year of delay. The company to the consignee reportedly waived
storage charges worth N1.9 million.

 

The President of Shippers Association Lagos State, Rev Jonathan Nicole
lamented that it takes three months to move groupage containers from the
ports for unstuffing at the warehouse, and yet, nobody pays the importers
for delays not caused by them.

 

In a statement, Nicole also raised alarm about the threat of capital flight,
saying that most of the Chinese shipping agencies carry out clearance of
groupage containers with additional cost to be paid in foreign currency.

 

Nicole said, "It is confirmed that one aspect of ripping off Shippers and
Importers in Nigeria is through groupage shipments. Freight charges are paid
fully from Port of Loading to Port of Destination in foreign currency. No
hidden charges are transferred to the Consignee whether or not there is
trans-shipment from another port during transit.

 

"On arrival, the Shipping Lines Agents notifies the consignees who have the
Original House Bill Ladings indicating their own cargo to come and pick up
their cargo after unstuffing. In some cases, the local receiving Agency
delays in receiving the Containers for up to 1 or 2 months.

 

"After receiving the containers and unstuffing at their warehouse, the
consignees are informed to come and pick their cargo. Within this period,
the local agent puts in a lot of charges against the consignees far and
above the cost of the cargo. It is even cheaper to clear the container
direct if all the consignees agree."

 

He added, "The Master Bill Lading is normally consigned to the ship's local
agent while the House Bill Ladings shows owners of each cargo in the
Container. We have more Groupage issues mainly from the Chinese shipping
agencies handling groupage Containers in Nigeria."

 

The SALS boss noted that most successful big importers in Nigeria today
started with groupage shipments.

 

According to him, back in the days, the Nigerian Ports Authority had
warehouses inside the ports and containers are moved directly from the ship
or stacking areas to the warehouses for unstuffing.

 

"We really do not understand why it takes 3-months to move groupage
Containers from the Ports for unstuffing and nobody pays the Importers for
delays. There is no aspect of clearance of groupage containers to attract
additional cost to be paid in foreign currency. It should stop.

 

"On storage charges, the bills must be commensurate with the number of days
the cargo was stuffed in the warehouse and not the arrival date of the
vessel. The consignee should not be subjected to excessive transfer charges
from the designated Port to the receiving warehouses," he said.

 

"All charges relating to the shipment of the cargo were paid upfront before
shipment. It is like someone travelling to England via Lufthansa Airlines.
All freight paid and passengers luggage marked London. The transshipment
therefore is Frankfurt. Luggages meant for final destination are loaded into
the aircraft for final the destination.

 

"The owners of cargo are not expected to pay additional cost for handling.
It is the same thing with Groupage cargo. In considering the difficulties in
the Nigerian clearing systems, simplified methods must be put in place to
curtail excessive charges on shippers.

 

"Alternatively, Importers should be paying Freight charges in Nigeria
Currency to Ship owners. We have a right to protect our sovereignty.
Afterall, we are one big family," Nicole said.

 

Also speaking, the NSC Coordinator of NPPM, Mr. Moses Fadipe, said COSCO
Shipping Limited held three containers belonging to a Nigerian shipper from
March 2020 and was only released in June 2021 after the Council intervened.

 

He described the dispute between COSCO Shipping and the consignee as an
impediment to cargo clearance processes, which NPPM frowns at.

 

Fadipe said "We found out that they acted arbitrarily being the stronger
party in the transaction and this made them liable for all storage and
demurrage charges during the period in question. The intervention by the
officials of PSTT yielded positive results for the consignee to take
delivery of his consignments after a long period."

 

According to him, the shipping company should have deviced a means to
recover the debts owed initially by the consignee rather to place lien on
the consignments for a longer period.

 

Shippers Council's Crusade

 

In a bid to put an end to the persistent wrangling between customs agents,
importers and the negative impact excessive charges is having on the
economy, the NSC embarked on a mission to get the shipping companies to cut
down charges.

 

Initially, the move yielded results as the NSC and shipping companies in
late 2020 agreed to sign a landmark agreement to reduce charges. However,
the agreement was never signed.

 

Analysts and stakeholders had applauded the effort, positing that the
Nigerian economy will be the ultimate beneficiary.

 

The former Executive Secretary/Chief Executive Officer of the NSC, Hassan
Bello, early last year told THISDAY that he was hopeful the agreement will
be signed.

 

According to him, "You know in negotiation you can only be hopeful. We have
been negotiating for one and half years. We have a small knotty problem,
which we hope to resolve by next week. So, I am hopeful we will conclude
with the shipping companies.

 

"However, we will run the agreed MOU by the Ministry of Transportation,
major stakeholders such as shippers, freight forwarders, Manufacturers
Association of Nigeria (MAN) and Nigerian Association of Chambers of
Commerce, Industry, Mines and Agriculture (NACCIMA). This will take four
days, then we will sign the MOU.

 

"Further, the total reduction would be 35 per cent reduction but the most
important thing is we have come up with sustainable mechanism of settling
dispute, which means no arbitrary or unilateral fixing of cost at the
ports."

 

Besides the reduction of port charges, he said the Council has also
abolished the container-cleaning fee hitherto being collected by shipping
companies, just as fifteen other port charges were removed from the list of
charges.

 

Bello also said that the moment the MoU comes into effect, the
implementation also becomes inevitable.

 

In his reaction, National President, of the National Council of Managing
Directors of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero, praised
the federal government for the effort, adding however that 35 per cent
reduction is not enough.

 

According to him, "The most important charge by the shipping companies is
the demurrage and their charges are higher than the terminal operators,
which is not supposed to be so. The shipping companies don't have the right
to be collecting the charges. In other countries of the world most of those
charges are not applicable because they don't provide services for the
charges.

 

"What they have is just the container and that has been charged to the
freight cost already. There charges are contestable and it is a very serious
issue. The shipping companies are doing what they are doing because
Nigerians don't go to court, if Nigerians can go to court they will find out
that the charges by the shipping companies are illegal."

 

Customs Agents Petition FG

 

Customs agents had in a bid to get government's attention over the mater
written a petition to Vice President Yemi Osinbajo and alleged that the
shipping companies and terminal operators' charges on storage contravene
Sections 20, 31 and 97 of the Customs and Excise Management Act which limits
the days for rent charges and conferred authority to the Nigeria Custom to
charge rent after specific days by the board.

 

The agents, in the petition signed by National President of the National
Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky
Amiwero, stated that duplication of charges, such as terminal delivery
charges/terminal handling charges, deposit repayment delays and process
procedure that lack regulation of the economic interest in the port.

 

They stressed that there is the need for the federal government to intervene
to address these issues through a total review of the procedure, process and
cost in the ease of doing business.

 

The Presidential Enabling Business Environment Council (PEBEC), they added,
should urgently address the following short falls, which is militating
against our import and export trade that resulted to massive diversion of
goods to neighbouring ports.

 

Also, the agents called on the federal government to use part of the seven
per cent port development levy for the development of port access roads,
trailer parks.

 

According to Amiwero, "The condition of the Tincan Island Port Axis of
ApapaOshodi express road leading to the ports is a death trap, big potholes
and gridlocks resulting in loss of lives and continued destruction of loaded
goods that always fall on cars, trailers and sometime persons.

 

"It is a complete setback to trading across borders (TAB) for ease of doing
business on trucks that spend weeks to access and exit the ports which
result to delay and rejection on most of the fragile export products in
international market and high cost in import clearance.

 

"The Nigeria Ports Authority (NPA) is no more in port operation, the
percentage collected from the seven per cent Port Development Levy should be
used for the development of the trailer parks and port access roads."

 

On the increase of revenue collection on the recovery of short levied duties
on discrepant cargo as provided under Section 142 of Customs and Excise
Management Act, he said: "The discrepant cargo, as covered under Section 142
of the Customs and Excise Management Act and the Import guideline paragraph
J are non contraband goods with discrepancy, which is allowable for
treatment and issued with demand notice (DN) Section 142-(2).

 

"Recovery of Duties states: Where any duty has been short levied or
erroneously repaid, then the person who should have paid the amount short
levied or to whom the repayment, has erroneously been made, shall on demand
by the proper officer, pay the amount short levied or repay the amount
erroneously repaid as the case may be. Any such amount may be recovered as
if it were duty to which the goods in relation to which the amount was so
short levied or erroneously repaid were liable."

 

Amiwero also called on the government to address multiple checks and delays
of clearance by NCS.

 

He said: "The process of clearance is associated with multiple interventions
of various alerts headquarters Abuja, CIU, Valuation Gate etc that takes
days and increase the cost and time in contravention of WCO Kyoto convention
on simplification and harmonisation of Customs procedures. "The Customs
procedure should comply with WCO Kyoto convention and (FAL) Convention of
(IMO) for Minimisation, harmonisation and simplification of Customs
procedure with regards to various checks after release from the Port, (FOU),
CG Squad in line with international best practice of One-Stop-Shop process."

 

Vice President Yemi Osinbajo had in a bid to boost business activities in
the country earlier last year signed the ease of doing business executive
order. The effort was in the attempt to lift the country out of recession,
stimulate economic activities and generally improve the business environment
in Nigeria through promotion of transparency and efficiency.

 

Federal ministries, departments and agencies have since gone into frenzied
activities in the bid to carry out the Executive Orders and exhibit
compliance with a view to achieving the objectives of the orders. One of the
fall outs of the Executive Orders is on port operations and this brings to
mind the challenge of ensuring ease of doing business at the entry points,
vis a vis the subsisting issue of the influx of sub-standard and harmful
products of very low quality into Nigeria.-This Day.

 

 

 

Botswana: De Beers, National Geographic Form Partnership to Protect Okavango
Delta

Gaborone — Mining giant De Beers and the National Geographic Society have
announced a partnership to protect the waters and endangered animals of
Botswana's iconic Okavango Delta. The vast UNESCO World Heritage wetland is
threatened by climate change and agricultural activities.

 

The five-year project, "Okavango Eternal," will see De Beers and National
Geographic work with local communities to deliver ecological solutions aimed
at preserving the 16,000 square kilometers of the delta.

 

Bruce Cleaver, De Beers Group CEO, says in a statement the company is
committed to preserving the delta for future generations.

 

He says the project will help protect the delta's source waters and ensure
the protection of wildlife corridors to ensure the free movement of animals.

 

Cleaver says it is important to support livelihoods, particularly in the
eco-tourism sector hard hit by COVID-19 travel restrictions.

 

Koketso Mookodi, National Geographic country director for the project, says
the protection of the delta is an "urgent" priority.

"It is exciting to see this level of support and partnership at a time when
coming together to protect this one-of-a-kind place is so urgently needed.
The people of the Okavango basin rely on its life-giving waters, and we must
unite our efforts to do everything in our power to ensure that they continue
to flow for the future of the people and the wildlife that call this place
home," she said.

 

The Okavango Delta forms part of a large conservation area known as the
Kavango-Zambezi Transfrontier Conservation Area (KAZA), which covers five
southern African countries.

 

Nyambe Nyambe, KAZA executive director, says the project presents an
exciting opportunity for local communities and protecting the environment.

 

"It is a welcome development," he said. "The threats that the Okavango Delta
faces are real [and] range from climate change, potential for agriculture
development, large-scale water abstraction and infrastructure development,
and related threats. All these threats cannot be addressed by one entity, so
partnerships are very welcome."

 

The delta is one of Botswana's prime tourist attractions, drawing an average
of 50,000 visitors per year.-VOA.

 

 

 

Namibia: Resilient Medium-Scale Farmer Dreams of Feeding the Nation

AGRIBANK'S production loan beneficiary and medium-scale horticulture farmer,
Nelson Ashipala, is a medium-scale crop producer in the Kavango West region
who aspires to feed as many Namibians in the north-eastern regions of the
country as possible.

 

Ashipala, whose farming journey started five years ago, after he acquired a
production loan from Agribank, grows crops such as maize, cabbage,
butternuts, onions, and tomatoes on a 30-hectare piece of land he leases
from Agribusdev's Sikondo farm in the Kavango West region.

 

Though he farms on a part-time basis, Ashipala has recruited an experienced
full-time farm manager.

He also employs four permanent workers, and about seven to eight seasonal
workers during harvesting seasons.

 

"According to statistics from the Namibia Statistics Agency, Kavango West is
the second-poorest region in the country.

 

"So, being able to recruit, feed and support households is what drives me to
persist with farming. In the end it brings me joy, given that I feed at
least a few mouths in the country," Ashipala says.

 

One of his approaches to farming is to constantly ensure the transfer of
knowledge among his employees, as it enhances performance at the farm, he
says.

 

In the near future, he plans to resign from his eight-to-five job to
concentrate on his farming business, and to be able to supply the market in
the north-eastern regions with food, while creating more employment
opportunities for rural young people.

 

Speaking about challenges he encountered in his farming journey, Ashipala
highlights the lack of access to the market and the high cost of production
inputs.

 

"The farmers have the will to produce, but the market is just not there. One
must push for the market. There are times when we end up throwing away our
produce just because there is no market," he says.

 

He therefore appeals to the relevant authorities to secure the market for
local producers and ensure more consultation between industry regulators and
producers.

 

Ashipala, however, advises fellow young people who want to start farming to
do research and equip themselves with skills and farming techniques before
they embark on their farming journey.

 

He warned that though farming can be rewarding, it requires patience and
perseverance for one to reap its rewards, as there are no shortcuts.

 

"Many people think when one goes into farming, you automatically become a
millionaire. You can never become a millionaire overnight in farming.

 

"Yes, farming can be rewarding, particularly when it is done correctly from
the first step until the end, however, it requires time and patience.

 

"So, if you have a passion for farming, do your groundwork, and chase your
dreams."

 

- Agribank-Namibian.

 

 

 

 

 

 

 

 

 

 

 


 


 


 

 

 

 


 

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.

 


 

 


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