Major International Business Headlines Brief::: 30 August 2021

Mon Aug 30 10:49:05 CAT 2021

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Major International Business Headlines Brief::: 30 August 2021

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

ü  Vietnam lockdown adds to global coffee supply concerns

ü  Shein: China fashion giant investigates 'false' anti-Uyghur job ads

ü  Hire UK workers to drive lorries, minister tells firms

ü  Singapore's Shopee changes the game in Brazil's e-commerce sector

ü  Renault's De Meo pushes Dacia brand with new family car

ü  Indian auto parts makers' shares gain on report of talks with Tesla

ü  European stocks hold firm near record highs

ü  China tightens scrutiny on $9.3 trillion fund industry

ü  China August factory activity seen growing at slightly slower pace - Reuters poll

ü  Africa: AfCFTA - FG Targets to Control 10 Percent of Africa's Imports

ü  Nigeria: Confusion As Eko Disco Denies Plan to Hike Electricity Tariff

ü  Nigeria: Airports Concession Must Be Done Right

 <mailto:info at bulls.co.zw> 

Vietnam lockdown adds to global coffee supply concerns

Vietnam has added to concerns over global supplies of coffee as the South East Asian country's biggest city remains in lockdown.

The exporting hub of Ho Chi Minh has been kept under tough travel restrictions after a surge in cases of the Delta variant of the coronavirus.

Vietnam is a major producer of robusta, the bitter tasting bean used in instant coffee and some espresso blends.

Wholesale robusta bean prices have risen by about 50% so far this year.

The lockdown of the South-Eastern city of Ho Chi Minh means Vietnam's exporters are struggling to transport goods, including coffee beans, to ports for shipment around the world.

The travel restrictions present yet another problem to exporters already faced with a serious shortage of shipping containers and soaring freight costs.

The city and its ports are a key part of the global shipping network that runs from China to Europe.

The Vietnam Coffee-Cocoa Association and other trade organisations have called on the country's government to ease the restrictions to help avoid further delays to shipments and related costs.

Last week, Vietnam's transport minister responded to the concerns by ordering regional authorities in the south of the country to take action to ease unnecessary burdens on the transport of goods, including coffee.

The issues faced by Vietnamese producers are just the latest problem to hit the coffee industry.

Brazil, the world's biggest producer of the premium arabica coffee beans, has seen its crops impacted by drought and frosts.

The worst frosts in Brazil since 1994 have sent the cost of unroasted coffee beans to the highest level seen in close to seven years.

According to reports, the frost damage was so severe that some coffee farmers may need to replant trees, which could mean that its takes them up to three years to resume production.-BBC

Shein: China fashion giant investigates 'false' anti-Uyghur job ads

Chinese fast fashion firm Shein has launched an investigation into "false" discriminatory job adverts posted on recruitment sites under its name.

Adverts seen by the BBC for factory and warehouse workers said those from certain ethnic minority backgrounds, including Uyghurs, must not apply.

Shein said it did not fund or approve the ads, and it was committed to "upholding high labour standards".

The plight of the Uyghurs in China has sparked international condemnation.

Fast-growing Shein competes with the likes of Boohoo in the market for young shoppers and has collaborated with celebrities and influencers to build its online following.

Several adverts were posted under Shein's name between April and December of 2020 on Chinese recruitment websites.

They offered jobs working in its Guangzhou factories or warehouses earning about 16 yuan (£1.81) per hour, as well as saying workers did not need to get tested for Covid - or pass a medical exam to work on-site - at the height of the pandemic.

Shein apologises for selling Muslim prayer mats

Could ditching 'fast fashion' make us happier?

Who are the Uyghurs?

A Shein spokesperson said the company was "surprised and concerned" to see the adverts using language that "goes against" its hiring principles.

"Shein is fully committed to upholding high labour standards across our entire supply chain and to improving the lives of workers in the global supply chain by supporting national and international efforts to end forced labour," they said, adding it has strict requirements for its suppliers and does not tolerate discrimination.

Its recruitment company, Guangzhou Zhongzhi Human Resources Management, also said it would "investigate the individuals who fraudulently used our company's name to release false information" and hold them "accountable to the fullest extent of the law".

"We sincerely apologise for the impact this incident had on Shein and related applicants due to our company's negligence," it said in a letter.

£5 tops, £10 midi skirts - and even a £30 wedding dress.

Shein is winning over young shoppers in the US, UK and Europe by producing fast fashion even faster, and often at cheaper prices, than many of its rivals such as Boohoo or Asos.

Founded in 2008, Shein reportedly relies on thousands of third-party suppliers in China to produce batches of clothes, which it orders again if they perform well with customers.

Odds are if you're over the age of 30, you might not have heard of the Chinese company.

But on Instagram and TikTok, it's hard to escape videos of Shein "hauls", where users try on and review different outfits by the brand.

Using an army of influencers, from student "campus ambassadors" to reality stars such as Made in Chelsea's Georgia Toffolo or Amber Turner from The Only Way Is Essex, it has amassed more than 24 million followers.

"For a retailer without physical stores and a company that is virtually unknown to anyone but their target audience, Shein has utilised social media to reach consumers directly and become arguably the biggest digital clothing retailer," said Juozas Kaziukėnas, founder of research firm Marketplace Pulse.

Its meteoric rise has not been without problems, though.

The private company has not disclosed financial figures and has been criticised for selling items such as a Muslim prayer mat described as a "Greek carpet", which it was forced to withdraw.

It has also been accused of copyright infringement and faces lawsuits from the likes of the maker of Dr Martens boots, although the e-retailer denies any wrongdoing and a hearing is scheduled later this year.

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The prices for Shein's on-trend fashion items have sparked concerns online about sustainability and its labour practices.

Its website previously stated that Shein was "proudly in compliance with strict fair labour standards set by international organisations like SA8000".

The SA8000 certification is issued to companies who have their performance measured in areas such as forced and child labour, health and safety and working hours.

But Social Accountability International (SAI), which created the standard, told the BBC in June that Shein was not certified and never had been to its knowledge.

"Companies sometimes reference SA8000 in their advertising if they use SA8000 principles in their internal social compliance programs or if they source from SA8000-certified facilities," an SA8000 spokesperson said.

"As long as a company does not claim to be certified and does not mention the SA8000 disingenuously, we do not consider it a violation to refer to the SA8000 Standard principles in this way."

The reference on Shein's website has since been removed.

The discriminatory job adverts described as false by Shein were shared with the BBC by the Coalition to End Uyghur Forced Labour.

"What is really important is to be able to distinguish between those companies that are actually taking meaningful steps to respect the workers in their supply chains and those that are failing to do so," said Chloe Cranston, business and human rights manager at Anti-Slavery International, which forms part of the coalition.

In recent months, several big brands have come under scrutiny due to their activities in China's Xinjiang region.

French prosecutors announced in July they were looking into accusations that Zara-owner Inditex, Uniqlo, SMCP and Skechers sourced goods made by forced labour from Uyghur Muslims in China.

Skechers declined to comment, while the other three firms denied the claims.

The Xinjiang region produces 85% of China's cotton and accounts for about a fifth of global supplies.-BBC

Hire UK workers to drive lorries, minister tells firms

Businesses have been told to prioritise hiring UK-based workers rather than relying on labour from abroad to fix a shortage of lorry drivers.

Business Secretary Kwasi Kwarteng rejected calls from firms to loosen immigration rules, saying it would be a "short-term temporary solution".

But Logistics UK says it can take nine months for new drivers to qualify and there is a backlog of driving tests.

A growing number of firms have said the issue is causing product shortages.

Last weekend trade bodies the British Retail Consortium and Logistics UK, which represents the freight sector wrote to the government warning the shortfall of drivers was "placing increasingly unsustainable pressure on retailers and their supply chains".

A combination of Covid, post-Brexit immigration rules, tax changes and other factors has meant there are not enough drivers to meet demand, with the shortages affecting well-known brands such as Nando's and McDonald's, as well as supermarkets.

Responding to the groups, Mr Kwarteng said HGV drivers would not be eligible for a skilled worker visa or be added to the shortage occupation list to allow firms to recruit them from abroad.

While this would help in the short term, he said businesses should instead be "utilising the strength of our domestic workforce" and looking to employ those facing an "uncertain future" when the furlough scheme ended next month.

Mr Kwarteng said the government was offering £7,000 per apprenticeship for people training to be lorry drivers, as well as grants to train military service leavers, ex-offenders and the long-term unemployed to move into jobs where there were labour shortages.

Logisitics UK said it was "frustrated" with Mr Kwarteng's response and it estimated the backlog of HGV driver tests could take until early 2022 to clear.

"The industry needs drivers now, and we have been urging the government to replicate its temporary visa scheme, introduced for agricultural workers, for logistics to keep trucks and vans moving in the short term," a statement said.

As well not being included in the visa scheme, reforms to the IR35 tax rules have also made it less attractive for drivers from elsewhere in Europe to work or be employed in the UK.

The government said the UK had a "highly resilient food supply chain and well-established ways of working with the food sector to address supply chain disruptions.

A spokeswoman said it had announced measures to help tackle the HGV driver shortage, including plans to streamline the process for new drivers to gain their licence and to increase the number of tests able to be conducted, but said most solutions were likely to be driven by industry.

What is the skilled worker visa?

The UK's skilled worker visa allows a person to stay in the UK to do an eligible job with an approved employer.

Workers must meet criteria, including having a "certificate of sponsorship" from a UK employer approved by the Home Office.

There is also a shortage occupations list, which includes jobs in healthcare, education, science and engineering. HGV drivers are not on this list, which means they are excluded from the visa.

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The Road Haulage Association has estimated there is a shortage of more than 100,000 drivers in the UK, which had around 600,000 before the pandemic.

On Friday supermarket chain Morrisons became the latest company to join the growing chorus of calls for drivers to be eligible for Skilled Worker visas to allow them to work in the UK.

Aldi has said it has increased its wages for lorry drivers amid the shortage. The supermarket chain pays between £14.15 and £15.34 per hour for day shifts, and £16.98 and £18.41 per hour for night shifts according to its careers website. Tesco has offered a £1,000 bonus for drivers who join before 30 September.

Worker shortages are not just affecting the transport of goods, with pig producers warning a shortage of labour at abattoirs is causing a surplus of pigs to be stuck at farms.

The National Pig Association told the BBC any suggestion that people coming off furlough could solve a shortage of meat processors was not realistic.

A report by a group of 12 trade bodies in the food, drink and hospitality sectors has said "chronic labour shortages" span the whole of the supply chain, from agricultural workers through to waiting staff.

Tim O'Malley, managing director at food firm Nationwide Produce, said the industry needed to make its jobs more attractive to UK workers.

He said: "If we are going to increase pay and working conditions to attract British workers then we are going to have to pay more for our food, we are going to see food price inflation."

Business groups in logistics and the food sector have repeatedly said they do want to grow more of a UK-based workforce - something the government keeps saying must happen.

But firms insist that will take time and they can't wait. They say a shortage of HGV drivers, that's been steadily building in the background due to a cocktail of factors including an ageing pool of labour, has been sharply exacerbated by both the pandemic and post-Brexit immigration rules.

In other areas where there are job vacancies, such as meat processing, it's proving extremely hard to attract domestic workers who are prepared to do the job, or have the right skills.

That's why we're hearing increasingly loud calls for short-term solutions. The government has so far rejected any changes which involve making it easier for EU migrant workers to fill the gaps.

Businesses say they have spent money on bumping up wages to compete for staff. But the continuation of that will mean higher prices. One fruit and veg distributor told me: "The end of cheap labour means the end of cheap food."-BBC

Singapore's Shopee changes the game in Brazil's e-commerce sector

(Reuters) - Sea Ltd's (SE.N) Shopee took just two years to become Brazil's most-downloaded shopping app, winning users to its low-cost marketplace with its game-changing approach to e-commerce: in-app mini-games offering coupons to winning users.

The Singapore-based company has combined online shopping with the gaming nous of its separate mobile game arm Garena - creator of "Free Fire", Brazil's most-downloaded title for eight consecutive quarters - to generate sales analysts estimated at almost a third of local champion Magazine Luiza SA (MGLU3.SA).

Back home, Shopee only needed five years to become Southeast Asia's most-visited e-commerce website, overtaking the likes of Lazada, backed by China's Alibaba Group Holding Ltd (9988.HK), and Tokopedia, backed by Japan's SoftBank Group Corp (9984.T).

"Shopee has a track record in Southeast Asia of coming into the market late, looking at how others have solved existing problems and then building a system to leapfrog those issues," said analyst Jianggan Li at advisory firm Momentum Works.

Shopee's early surge highlights the space left for foreign entrants to grow in a sector once dominated by regional firms like Magazine Luiza and Argentina's MercadoLibre Inc (MELI.O).

To be sure, the startup's timing was fortuitous, launching in Brazil just as the COVID-19 pandemic drove consumers away from physical stores, pushing up 2020 e-commerce sales by 44% to $42 billion, showed data from Brazilian payments company EBANX.

Shopee - akin to Alibaba's AliExpress, carrying Chinese-made knick-knacks - emerged as Brazil's top app by downloads and time spent in use, showed data from analytics platform App Annie.

Yet, in pursuit of growth, Shopee is still losing money, propped up by Sea's profitable gaming division. In the second quarter of this year, Garena posted an adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $740.9 million even as the e-commerce arm lost $579.8 million.

"Money being generated by one side of the business, which is a cash cow, is being reinvested aggressively in Brazilian e-commerce - with success," said Itau BBA analyst Thiago Macruz.

GLOBAL AMBITION

Sea's Brazil foray is just one element of its global ambition. Investment arm Sea Capital is also considering putting money into startups in Latin America and beyond, said a person with knowledge of the matter, who was not authorized to speak with media and so declined to be identified.

The firm has also taken Shopee to Chile, Colombia and Mexico where, unlike Brazil, it has no locally based staff and so has partnered social media influencers to increase brand awareness, said two people familiar with the matter.

Sea, whose shareholders include Chinese gaming leader Tencent Holdings Ltd (0700.HK), declined to comment.

The firm has disclosed little data about Shopee Brazil, but Itau BBA analysts estimated the value of goods and services sold on the platform last year hit 12 billion reais ($2.27 billion).

The average price on its marketplace is 40 reais, other estimates showed, less than a third that of e-commerce leader MercadoLibre, which often carries higher-value branded products.

Sea's biggest challenge for Shopee Brazil is delivery in such a vast country. It reduced its reliance on the local postal system this year in favor of private carriers, but is still competing against rivals with proprietary delivery services.

Shopee aims to have one main logistics partner per country in the region, a company source told Reuters.

The company itself expects e-commerce growth in the region to spawn more delivery partnerships, as happened in Southeast Asia, Sea executives told analysts on a call this month.

On the same call, Group Chief Corporate Officer Yanjun Wang called Brazil "a good market for continued investment."

LOCAL SELLERS

Competition in Latin America's largest economy stepped up this month when Shopee's nearest rival in terms of product offering, AliExpress, opened up its marketplace to domestic sellers charging single-digit commission. AliExpress had been in Brazil for 11 years; Shopee did similarly after its first year.

Small-business owner Luciana Carvalho began selling plastic packaging products on Shopee in February, attracted by the free shipping and 6% commission - compared with MercadoLibre's 17%.

"It's easy to sign up, calculate your commission, get your delivery tags, your receipts. It makes us invest more in the platform," she said.

In a move toward profitability, Shopee has since raised commission to 18% - as much as twice marketplaces can charge in some Southeast Asian countries, indicating Latin America's potential profit margins. Carvalho continues to use Shopee, though she prefers MercadoLibre for its "unbeatable" delivery.

To further improve profitability, Goldman Sachs analysts said Shopee could start selling higher-ticket items, as it has in Southeast Asia. Momentum Works' Li expects Shopee to add financial services to its Brazil app as it has in Indonesia.

"I wouldn't be surprised," if they reached number one, said Li, "Given what they have done in Singapore, Indonesia and Malaysia, Thailand."

($1 = 5.2948 reais)

Renault's De Meo pushes Dacia brand with new family car

(Reuters) - France's Renault (RENA.PA) will unveil a new family car under its lower cost Dacia brand in September, aiming to replace three existing models as part of Chief Executive Luca De Meo's push to trim ranges and focus on profitable vehicles.

De Meo is looking to revive loss-making Renault's finances, including through cost savings and by cutting jobs, and reverse an expansionist strategy under former boss Carlos Ghosn to restore the group's profitability.

Dacia, the Renault group's low cost brand, which includes best-sellers such as the Sandero city car, will unveil its new seven-seater Jogger model in early September ahead of the IAA Motor Show in Munich, Germany, the company said in a statement.

The car is set to replace Dacia's Logan break model, which is already no longer in production, as well as its small Dakker people carrier and the larger Lodgy vehicles, also due to be phased out. Dacia gave no pricing details.

The Renault group is aiming to make a push in medium-sized cars in Europe, known as the compact segment and where it competes with the likes of Volkswagen's Golf, and reduce its dependence on smaller vehicles with lower margins, mirroring a strategy followed by Peugeot maker PSA, now Stellantis.

De Meo has looked to give Renault, Dacia and sports car brand Alpine more distinctive identities within the carmaking group, at a time when competition in electric vehicles is heating up globally.

Dacia, originally a Romanian firm bought by Renault in 1999, presented its small Spring electric car in 2020, and De Meo has said he wanted to give the Europe-centred brand global impetus.

It is due to introduce a new logo on its cars from 2022.

Ghosn - who was arrested in late 2018 in Japan on financial misconduct charges he denies, before fleeing to Lebanon - forged Renault's alliance with Japanese carmaker Nissan and had pursued a volume-based strategy which the company is now shifting away from.

The Thomson Reuters Trust Principles.

Indian auto parts makers' shares gain on report of talks with Tesla

(Reuters) - Shares of Indian auto parts suppliers rose as much as 14% on Monday following a report electric-vehicle maker Tesla Inc (TSLA.O) was in talks with at least three companies to source critical parts for its planned entry into the country.

Tesla, which is looking to set up a factory in India if it is successful with imported vehicles, is holding early talks with some companies for the supply of components such as instrument panels, windshields, differential gears, brakes and power seats, the Economic Times reported on Sunday.

Bharat Forge Ltd (BFRG.NS), Sona BLW Precision Forgings Ltd (SONB.NS) and Sandhar Technologies Ltd (SNTL.NS) are understood to be among the Indian companies already supplying components to Tesla, according to the report. Shares of the three Indian firms rose as much as 6.2% to 13.7% on Monday.

Tesla, Bharat Forge, Sona BLW and Sandhar did not immediately respond to Reuters requests for comment.

India's auto component makers want Tesla's potential entry to benefit the country's suppliers, and one way to achieve that is for the company to manufacture locally, the head of an industry body said earlier in August.

Reuters previously reported India was considering slashing import duties on electric cars to as low as 40%.

The country is the world's fifth-largest car market with annual sales of 3 million vehicles, according to industry estimates, with electric vehicles (EVs) making up a fraction of the total.

However, EV sales have been gradually rising in the country as states improve charging infrastructure.

Elon Musk, the CEO of Tesla, the world's most valuable automaker by market capitalisation, has tweeted several times about the company's impending foray into India.

Tesla registered a local company in January and by April started scouting for locations to open showrooms in New Delhi, Mumbai and Bengaluru.

The Thomson Reuters Trust Principles.

European stocks hold firm near record highs

(Reuters) - European stocks held firm on Monday near record highs scaled earlier this month, as hopes that continued central bank support would sustain an economic recovery offset woes over rising Delta COVID-19 variant cases.

UK markets were closed for a bank holiday, while Germany's DAX (.GDAXI) and France's CAC 40 (.FCHI) were up about 0.1% in morning trading.

The Europe-wide STOXX 600 (.STOXX) traded flat but was on course to end August with a more than 2% rise - its seventh straight month of gains in what would be its longest such winning run in over eight years.

Risky assets including equities remained supported after U.S. Federal Reserve Chairman Jerome Powell on Friday explained why there is no rush to tighten monetary policy, and offered no signal on when the central bank plans to cut its asset purchases beyond saying it could be "this year." read more

"For equity markets, the gradual process is positive, because it is clear the Fed wants to continue to support the economy for as long as needed to achieve a full recovery," said Willem Sels, chief investment officer of private banking and wealth management at HSBC.

"It is therefore no surprise that cyclical sectors reacted most positively to the news."

Oil and gas stocks (.SXEP) inched up 0.2% even as crude prices retreated from three-week highs after a powerful hurricane slammed into the U.S. Gulf coast, forcing shutdowns and evacuations of hundreds of offshore oil platforms.

Automakers (.SXAP), technology (.SX8P) and retail (.SXRP) were among the top sectoral gainers.

After hitting record highs in mid-August, European stocks have struggled to reclaim the highs on worries about tighter regulation on Chinese tech firms and as a resurgence in COVID-19 cases prompt fresh lockdowns in parts of the world. read more

A study showed people who get the Delta variant of the coronavirus are twice as likely to be hospitalised as those who were infected by the Alpha variant. read more

However, the European Central Bank expects the more contagious variant to have a limited impact on the euro zone economy due to an advanced vaccination campaign.

The Thomson Reuters Trust Principles.

China tightens scrutiny on $9.3 trillion fund industry

(Reuters) - China's top securities regulator pledged on Monday to crack down on mismanaged private funds and weed out fake ones, as the government becomes more assertive in dealing with an industry worth 60 trillion yuan ($9.28 trillion).

China has been seeking to channel more household savings into the capital markets to fund innovation and aid its economic recovery, while reducing the economy's reliance on bank lending.

Fund managers should align their interests more closely with investors, and refrain from hyping their products, Yi Huiman, chairman of the China Securities Regulatory Commission said.

"China is actively promoting high-quality growth of its capital markets, and healthy development of the 60 trillion yuan fund industry is a crucial part of it," Yi told a meeting held by the Asset Management Association of China.

Chinese mutual fund managers also face rising competition from global asset managers such as BlackRock (BLK.N) and Fidelity International after regulators scrapped foreign ownership in the sector on April 1, 2020.

By July-end, the country's mutual fund industry stood at 23.5 trillion yuan, 1.6 times the size at 2016-end, Yi said.

The private securities fund sector doubled to 5.5 trillion yuan, and its private equity and venture capital industry tripled to 12.6 trillion yuan during the period.

Despite a recent cleanup of China's private fund industry, there're still many small and weak players hampering the high-quality growth of the sector, Yi said, adding that the regulators will publish new rules in due course.

Some private-fund managers even raise money publicly, and misappropriate clients' funds, he added.

Yi urged fund managers to prioritize clients' needs and interest, as "it happens from time to time that funds make money, but investors don't".

He asked money managers to address the issue of fund churning, in which fund salespeople, seeking higher commissions, encourage investors to redeem existing funds and subscribe to just-launched ones, resulting in massive fund flows.

($1 = 6.4671 Chinese yuan)

The Thomson Reuters Trust Principles.

China August factory activity seen growing at slightly slower pace - Reuters poll

(Reuters) - Growth in China's factory activity likely cooled further in August, a Reuters poll showed on Monday, as COVID-related restrictions and high raw material prices continued to pressure manufacturers and the economy lost momentum.

The official manufacturing Purchasing Manager's Index (PMI) is expected to slip to 50.2 in August from 50.4 in July, a fifth month of slowing growth, according to the median forecast of 33 economists polled by Reuters. A reading above 50 indicates expansion from the previous month.

PMIs for manufacturing and services will likely moderate in August due to COVID-19 outbreaks of the more infectious Delta variant and ensuing lockdown measures, said analysts at Barclays in a note.

"With slowing growth momentum and dovish signals (from China's central bank) we expect more easing, but still at a measured pace as policymakers eye headwinds in 2022."

The world's second-largest economy staged an impressive recovery from a coronavirus-battered slump, but growth has recently shown signs of losing steam due to domestic COVID-19 outbreaks, slowing exports, tighter measures to tame hot property prices and a campaign to reduce carbon emissions.

To bolster the economy, the People's Bank of China (PBOC) in mid-July cut the amount of cash banks must hold as reserves, releasing around 1 trillion yuan ($6.47 trillion) in long-term liquidity.

Many analysts expect another cut later in the year.

China's latest coronavirus outbreaks appear to have been largely brought under control, with zero locally transmitted cases reported on Aug 29., for the second day in a row. read more

But it spurred authorities across the country to impose counter-epidemic measures including mass testing for millions of people as well as travel restrictions of varying degrees and port shutdowns.

Meishan terminal at China's Ningbo port resumed operations in late August after shutting down for two weeks due to a COVID-19 case. The closure caused logjams at ports across the country's coastal regions and further strained global supply chains amid a resurgence of consumer spending and a shortage of container vessels. read more

Higher raw material prices, especially of metals and semiconductors, have also pressured profits. Earnings at China's industrial firms in July slowed for the fifth straight month. read more

The official PMI, which largely focuses on big and state-owned firms, and its sister survey on the services sector, will both be released on Tuesday.

The private Caixin manufacturing PMI will be published on Wednesday. Analysts expect the headline reading will slip to 50.2 from July's 50.3.

($1 = 0.1546 yuan)

The Thomson Reuters Trust Principles.

Africa: AfCFTA - FG Targets to Control 10 Percent of Africa's Imports

The federal government has stated that the strategic objectives of Nigeria's participation in the African Continental Free Trade Area (AfCFTA) is to capture 10 per cent of Africa's imports as well as to double the country's export revenue by 2035.

In addition, the government said it aims to become "the preferred supplier of value-added products and services to Africa."

These were disclosed by the Secretary of the National Action Committee on AfCFTA, Mr. Francis Anatogu, during a seminar organised by the Lagos Chamber of Commerce and Industry (LCCI) with the theme: "AfCFTA: The Roadmap for Exporters Successful Participation."

He said the strategic objective would be achieved by growing export capacity of every state in the country to $1.2 billion as well as by focusing on specific product/service chains.

Nigeria would also, "grow local demand for new Made-in Nigeria automobiles to 200,000 units and local content to 40 per cent over five years," he said.

Anatogu, who is also the Senior Special Assistant to the President on Public Sector Matters, clarified the questions being asked by Nigerian businesses on when and how to participate in the AfCFTA. He stated that first and foremost trading was yet to commence under the free trade area agreement.

Other key goals of the strategic objective, according to him, also include growing, "highly productivity workforce to earn premium wages in Nigeria and Africa" as well as engendering "friendly business environment to attract investments and boost competitiveness."

The objectives also include, to "grow local demand to boost local content, capacity and utilisation, preserve local market share and lay foundation for exports; develop critical trade infrastructure such as power, logistics, transportation, shared facilities; and secure access to African markets through partnerships, security of supply, national brand, process compliance," he added.

According to him, the federal government also intends to establish an efficient AfCFTA trade arrangement with necessary safeguards and coordination framework.

Anatogu stated that some of the actions needed to actualise these objectives include, "investment in API production to catalyse the local pharmaceutical value chain; commercialisation of research findings to improve yield and promote innovation and leveraging technology and cluster development strategy to grow capacity of MSME, reduce informal trade and aggregate them for export."

He explained that businesses would export by following the existing normal export process, but would back it up with AfCFTA's certificate of origin, adding that exporters, "will also meet all the export requirement of the destination country."

Anatogu stated that Nigeria, "has also identified 25 Nigerian companies from different stakeholder organisations to do the trial run of going through the processes of ascertaining the compliance of their products to the AfCFTA's Rule of Origin (RoO). This is what we are doing at the national action committee to make sure that this starts at a very robust level.

"As part of this process, companies will have AfCFTA number, which will identify them in any African country. They will also have product approval of registration, "he said.-This Day.

Nigeria: Confusion As Eko Disco Denies Plan to Hike Electricity Tariff

According to the document, the increase followed the approval by NERC.

There is confusion among stakeholders in the power sector following the furore generated by the conflicting information put out about a resolution by the Nigerian Electricity Regulatory Commission (NERC) on tariff hike.

A document marked 023/EKEDP/GMCLR/0025/2021, dated August 25, 2021 and signed by the General Manager, Loss Reduction, Eko Electricity Distribution Company (EKEDC), Olumide Anthony-Jerome, had announced the Disco's decision to raise tariffs.

In the document, widely circulated in the media at the weekend, the distribution company disclosed that the increase would be reflected on the energy bill for October 2021, which would represent energy consumption for September 2021.

"For metered customers with internal vending arrangements, we urge you to adjust the rates accordingly to reflect the new tariff increase as released by NERC," the memo, purportedly issued by Eko Disco, 

According to the document, the increase followed the approval by NERC.

"This increase is as a result of the nationwide mandate to implement the Service Based Tariff approved by our regulators (NERC)," it said.

But as stakeholders deliberated on the development, the Eko Disco in a statement signed by its Managing Director, Adeoye Fadeyibi, described the release as unsubstantiated and urged the public to disregard it.

"While we continue to review effective and regulatory strategies to manage the impact of changes to macro-economic indices affecting end-user tariffs, the general public will be duly informed, in the event of any changes to the end-user tariff," the EKEDC boss said.

Last September, a tariff hike plan was implemented amidst controversies and rejection by members of the organised labour. The Nigerian government thereafter held talks with the unions, and the negotiations led to the introduction of rebate in the tariff and the freezing of an increase for Band E, representing customers with eight hour daily supply.

Another attempt was made to hike the tariff in January but the controversy that trailed it led to its suspension by the regulator.

It remains unclear whether an increase would be recorded in electricity tariff in September.

Attempts to speak to NERC officials on Sunday proved abortive.-Premium Times.

Nigeria: Airports Concession Must Be Done Right

After about five years, the federal government last week took practical steps towards the concession of four major commercial airports. The airports are; Nnamdi Azikiwe International Airport, Abuja; Murtala Muhammed Internatıonal Aırport, Lagos; Malam Amınu Kano Internatıonal Aırport, Kano and the Port Harcourt Internatıonal Aırport. Whereas the decision to concession the airports was taken in 2016 by the Federal Executive Council, the federal government did not commence the process. Only last week did it openly invite Requests for Qualification (RFQ) from companies interested in taking over the running of the non-aeronautic assets of the airports located in the passenger and cargo terminals, consisting of assets from the entry door of the airport to the point of embarking and disembarking from an aircraft to the exit doors.

The Permanent Secretary of the Ministry of Aviation, Mr Hassan Musa, in a statement issued to newsmen in Lagos by the Director, Public Affairs of the ministry, Mr James Odaudu, said the request is in compliance with the Infrastructure Concession Regulatory Commission (ICRC) and National Policy on Public-Private Partnership (N4P).

He said, "The execution of this project is meant to achieve the federal government's objective in terms of air transport value chain growth.

"The project will develop and profitably manage customer centered airport facilities for safe, secure and efficient carriage of passengers and goods at world-class standards of quality".

We welcome the effort by the federal government to concession the airports as we believe it will indeed ensure efficiency at the facilities. However, it is a delicate operation that must be conducted with utmost transparency and sincerity.

While it is within the right of Nigerians to question the process and be skeptical about it, after all, memories of what happened to the Nigerian Airways that eventually led to the collapse of the national carrier are still fresh, the airports are a slightly different proposition.

Despite their huge potentials, the international airports in Abuja, Lagos, Port Harcourt and Kano, have been run at a sub-optimal level for years, their operations far too often marked by inefficiency.

The example of the government's concession of the Terminal 2 of the Murtala Mohammed Airport, Lagos to Bi-Courtney Aviation Services has proven to be of some merit. The functionality of the terminal has indeed improved, given the circumstances.

If done properly and the airports are handed over to the right companies to manage, it is expected that this move by the government will yield better results and move the airports from the sub-optimal performance level to a state where they can yield optimal services and profit for the concessionaire and the government and comfort and convenience for passengers.

At the moment, the aviation ministry has made the appropriate comments about securing the interest of the current employees of the Federal Airports Authority of Nigeria (FAAN), promising that the concession would ensure not a loss of jobs but more jobs as the airports are currently understaffed.

The importance of holding the government to its words on this cannot be overemphasised. The plight of the employees of the defunct Nigerian Airways who were laid off without due compensation or benefits must not be replicated.

The federal government must be mindful not to commit to a long term agreement with a firm that will fail to deliver or default on its obligation. The interest of Nigerians and their stakes in the airports must be protected adequately. In this light, the decision to peg the pre-qualification asset base of the interested concessionaire at N30 billion, with added financial guarantees provides a measure of security for the airports. But to protect the interest of Nigerians, certain targeted goals with reasonable timelines must be set, failure of which could necessitate the review of the agreement.

If handled appropriately, through transparency and in compliance with the regulations of the Infrastructure Concession Regulatory Commission (ICRC) and the National Policy on Public-Private Partnership (N4P), this concession will bring the much-needed sanity to airport services in the country. The airports are the country's gateway and they must be in a position to deliver efficiently at all times.-Daily Trust.

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.

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