Major International Business Headlines Brief::: 01 December 2021

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Major International Business Headlines Brief::: 01 December 2021

 


 

 


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ü  Omicron raises uncertainty around inflation, says Powell

ü  UK inflation: Rising costs could push family spend up £1,700 a year

ü  Inditex: Zara founder’s daughter becomes fashion giant's chair

ü  Global markets fall after Moderna Omicron warning

ü  EasyJet says Omicron has weakened bookings

ü  Shops step in to supply cash as ATMs close

ü  Asian shares bounce sharply from year low but Omicron, Fed in focus

ü  Asian factories shake off supply headaches but Omicron presents new risks

ü  European stocks seen reaching new records in 2022

ü  Japan keen to speed up digital yen launch as China adds geopolitical twist

ü  Cathie Wood's ARK buys a million Twitter shares after Dorsey steps down

ü  OPEC+ begins two days of talks amid oil rout

ü  Salesforce shares fall on disappointing profit forecast

ü  Tanzania: Tpsf Advises Private Sector Capitalise On Eacop Project

ü  Nigeria: Zulum Presents N267.921bn 2022 Appropriation Budget to Borno Assembly

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Omicron raises uncertainty around inflation, says Powell

The emergence of Omicron raises the uncertainty around inflation, the chair of the Federal Reserve has warned.

 

Rising rates of Covid, plus the new variant, pose new risks to the US economy, Jerome Powell told a Congressional committee.

 

In the past Mr Powell has called recent high rates of inflation transitory, a term he said should now be "retired".

 

He also said the Fed should consider tapering its bond-buying stimulus more quickly.

 

During the course of the pandemic the Federal Reserve has been praised for warding off recession with its asset purchasing programme. This month it began the process of reducing that support, the first step towards increasing the cost of borrowing, the usual policy strategy to tame inflation.

 

However a debate has arisen over whether the support should be withdrawn more rapidly.

 

US prices rising at fastest rate for three decades

Some economists argue that faster tapering, and an earlier move to higher interest rates, are needed to tackle prices which are rising at their fastest pace for 30 years.

 

Mr Powell has argued that higher prices are the result of pandemic disruption, including to supply chains, and swings in consumer demand. He predicted inflation would fade as the pandemic eased.

 

However, the emergence of Omicron has shaken global markets, raising the prospect that restrictions on travel, social and economic activity could be extended further.

 

'Greater concerns'

"The recent rise in Covid-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation," Mr Powell told the Senate banking committee.

 

"Greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labour market and intensify supply-chain disruptions," he added.

 

When asked about his view of whether inflation could still be described as transitory, Mr Powell said: "It is probably a good time to retire that word, and explain more clearly what we mean."

 

He said he believed that high inflation would persist until the middle of next year, and so the central bank is "likely" to discuss speeding up the tapering of its asset-buying programme.

 

The markets have interpreted the statements as a change of tone from the Federal Reserve chair, indicating a shift towards a tighter monetary policy.

 

"We've long maintained that the Fed is the ultimate owner of the 'transitory' characterisation and the chair's decision to move beyond that is a decidedly hawkish step," said Ian Lyngen at BMO Capital Markets.-BBC

 

 

UK inflation: Rising costs could push family spend up £1,700 a year

A typical UK family will spend £1,700 more per year on household costs in 2022, according to a forecast for BBC Panorama.

 

The analysis, conducted by the Centre for Economics and Business Research (CEBR), projected the inflation rate would rise to 4.6% by Christmas.

 

This rise is mainly due to higher fuel and energy prices.

 

Analysts say the full extent of rising costs is not yet being passed on to customers by supermarkets.

 

They say supermarkets are trying to keep prices constant over the festive period, even if this means absorbing some of the costs, because they don't want to risk losing customers at their busiest time of the year.

 

Compared with December 2020, the typical UK family of two adults and two children is predicted to spend £33.60 more per week, due to inflation, adding up to £1,700 per year.

 

Why is the cost of living going up?

The forecast is based on the prices of commonly bought items, including food and drink, clothing and household goods. It also includes spending on utility bills, such as fuel and power; transport costs; and money spent on recreation and days out.

 

It assumes that spending patterns will remain the same as in previous years and that inflation will remain at the projected 4.6% (up from the current 4.2%). However, experts expect it could rise higher in spring 2022, putting further pressure on household spending.

 

Panorama and CEBR, an independent economic consultancy, also compiled data for common food products to look at the price difference between this year and last.

 

Graphic showing how items have gone up in price between this Christmas and last

Presentational white space

It showed the average cost of margarine leaping by more than 15%. Costs for dairy farms have been rising particularly strongly in recent months, according to the CEBR.

 

However, many common Christmas items have so far stayed at a similar price.

 

There are a number of reasons:

 

• Demand for oil and gas is pushing up energy prices worldwide

 

• Shortages of many goods are causing supply problems and pushing up prices

 

• Government support to businesses during the pandemic has largely ended

 

• Businesses are struggling to recruit workers. This is partly due to the pandemic, but is also compounded by Brexit, according to international policy forum the OECD

 

"I've never known things to be as challenging as they are currently," said Andrew Selley, chief executive of Bidfoods, one of the UK's biggest food distributors. "Whether you're looking at people resources, product availability, everything seems to be coming together at the moment and presents us with a very challenging set of circumstances."

 

The knock-on effect of the price rises is already being felt by shoppers. Nikki Rushin, a nurse from Nottinghamshire, told BBC Panorama that inflation was making her feel anxious.

 

"We're certainly having to be a lot more careful," she said. "We try and budget very carefully around food, whereas going back a couple of years, we could buy whatever we wanted to."

 

She also said she and her husband, who works at a builders' merchants, had not been able to save for Christmas for their two daughters.

 

"Christmas presents, Christmas dinner, everything for Christmas has to come out of the next wage packet," said Mrs Rushin.

 

Like many UK shoppers, the Rushins have also noted more empty shelves in supermarkets, especially vegetables.

 

Richard Mowbray, the commercial director of TH Clements, one of the biggest vegetable growers, said his business had been hit by a shortage of seasonal workers from Europe.

 

To try to encourage more British workers to apply, TH Clements has increased wages and it expects these costs will eventually trickle down to consumers.

 

However, Mr Mowbray insisted it was not just labour that was pushing up costs. "It's fertiliser, energy, oil packaging. Everything that we look at at the moment has got inflation," he said.

 

The government has offered 30,000 visas for seasonal workers, but growers say that is not enough.

 

The government has also offered temporary visas to European lorry drivers.

 

A global HGV driver shortage is also forcing wages up, with some UK supermarkets now offering more than £50,000 a year.

 

"That's higher wages for those people driving those trucks. That's obviously good news for them," said economist Torsten Bell from the independent Resolution Foundation think-tank. "But it will, in time, feed through to higher prices for everybody else."

 

In October, the government said 300 EU drivers had applied for the 5,000 temporary visas. The government has declined to provide updated figures, as requested by Panorama.

 

The pandemic caused long delays in processing licences at the DVLA.

 

Panorama reporter Jane Corbin applied for a provisional HGV licence seven weeks ago. She still has not received it.

 

The government says provisional licences are now being issued within five working days.

 

You can watch Panorama's Delivering Christmas: What's In Store? on BBC One on Wednesday at 7:30pm and on iPlayer afterwards-BBC

 

 

 

Inditex: Zara founder’s daughter becomes fashion giant's chair

High Street fashion giant Inditex, which owns brands including Zara and Massimo Dutti, has appointed the founder's daughter as its new chairwoman.

 

Marta Ortega will replace Pablo Isla, chairman of Inditex since 2011.

 

Ms Ortega has been with the firm for 15 years, starting out as an assistant at its High Street brand Bershka.

 

"I have always said I would dedicate my life to building upon my parents' legacy," the 37-year-old said.

 

"I have lived and breathed this company since my childhood, and I have learned from all the great professionals I have worked with over the last 15 years," said Ms Ortega, adding that she was deeply honoured by the trust the firm was placing in her.

 

Ms Ortega has been credited with strengthening the retailer's brand image, having led several campaigns, including the launch of Zara's premium collections such as Zara SRPLS and Charlotte Gainsbourg by Zara.

 

Inditex was founded by Amancio Ortega with his ex-wife Rosalia in 1975 in Galicia, Spain.

 

Mr Ortega is one of the world's richest men, with an estimated net worth of $77.8bn (£58.3bn), according to Forbes. He was chairman of Inditex until 2011.

 

Inditex, whose brands also include Pull&Bear and Stradivariusm, has come to dominate High Streets around the world, with more than 6,600 shops globally.

 

Most of its clothing is made close to its Spanish headquarters or in nearby countries such as Portugal, Morocco and Turkey, helping the firm to achieve its famously fast reaction times to new fashion trends.

 

Marta Ortega Pérez began working for Inditex on a shop floor in London 15 years ago.

 

Her new job will be as the company's chairwoman, helping steer a retail behemoth with nearly 7,000 stores, more than 8,000 factories and a market value of $100bn.

 

Is she the right person for the job?

 

She says she's grown up around the company and learned a lot in her time formally working there.

 

But others will see this more as a Spanish version of the hit HBO series "Succession", where family members are given preference for top jobs over better qualified members of the team.

 

Indeed shares in Inditex have fallen on news of the appointment.

 

Alongside new chief executive Óscar García Maceiras, Marta Ortega Pérez will face a number of challenges. At a time when consumers are becoming more aware of the environmental costs of fast fashion, Zara particularly is in an awkward spot - its reputation is built on bringing style trends to High Street stores quickly and cheaply.

 

There are also supply chain concerns. Just this week, authorities in the French city of Bordeaux rejected plans by a Zara store to double its floor space, over allegations the fashion label may have profited from the forced labour of Uighurs in China.

 

But the new chief executive and chairwoman are unlikely to be steering the Inditex ship without the help of founder Amancio.

 

When he resigned as chairman in 2011, he didn't put his feet up. Instead the man known as "The Boss" has remained very much involved in the company. Though now aged in his 80s, it's a fair bet he'll remain so, even with the appointment of the new executive team.

 

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The group also announced the appointment of new chief executive Óscar García Maceiras on Tuesday.

 

He joined Inditex in March as general counsel and secretary of the board, following a career as a Spanish state attorney and in the private sector working for several Spanish banks.

 

Inditex shares fell almost 5% after the announcement.

 

Analysts at Kepler said outgoing chairman Mr Isla had driven Inditex's big international expansion over the past 17 years.

 

"We believe that the timing is not the best ... as we believe that both Marta Ortega and the CEO Oscar Maceiras have a lot to prove when it comes to their ability to run this big monster in the middle of the Covid crisis," it said.

 

Maureen Hinton, retail research director at GlobalData, says investors and analysts are "nervous" about Marta Ortega because she is not well known outside the fashion group, but she doesn't think it is fair to make assumptions about the future of Zara and its owner Inditex.

 

"They've got two people there who have relevant and long experience of the company - Carlos Crespo and Oscar Maceiras," she told the BBC.

 

"The current chief executive Carlos Crespo has moved over to become chief operating officer, so it's not like he's leaving the company. And they say Oscar Maceiras is good at team building."

 

She said talks about a succession plan had been underway at Inditex since Amancio Ortega stepped down in 2011: "It was something that was going to happen eventually."

 

Commenting on Ms Ortega's past performance at Zara, Ms Hinton said: "It seems to me she has more marketing experience than managing experience, but as chairperson she will be steering the direction of the company, rather than hands-on day-to-day management."-BBC

 

 

 

Global markets fall after Moderna Omicron warning

Stock markets around the world have fallen after the boss of Moderna cast doubts on the effectiveness of vaccines against the new Omicron Covid variant.

 

Stephane Bancel told the Financial Times he thought there would be a "material drop" in vaccine efficacy.

 

The Covid variant was first detected in South Africa, and the symptoms have been mild so far.

 

But travel restrictions have been imposed as a precaution by places including the UK, the EU and the US.

 

Mr Bancel predicted that existing vaccines would be less effective in staving off Omicron, and that it would take months for drugs companies to update vaccines.

 

"There is no world, I think, where [the effectiveness] is the same level," he said.

 

In the US, both the Dow Jones Industrial Average and the broader S&P 500 share indexes closed 1.9% lower. The tech-focused Nasdaq lost 1.6%.

 

The falls also follow remarks by the chairman of the Federal Reserve suggesting that the emergence of the new variant would worsen uncertainty around the economic recovery and inflation.

 

In response to a question, Mr Powell also said it was time to retire the term "transitory" which he has used to describe recent high rates of inflation. The Federal Reserve should consider tapering bond purchases more quickly, the first step towards raising interest rates, he added.

 

'It's not good news'

The US market falls followed similar declines in Europe and Asia.

 

The UK's FTSE 100 share index, Germany's Dax, and France's Cac 40 slipped more than 1.5% each before regaining ground, while the pan-European Stoxx 600 lost 1.5%, hitting its lowest level in nearly seven weeks.

 

Tokyo's Nikkei index closed down 1.6%, crude oil prices fell nearly 3%, and the Australian dollar hit a one-year low.

 

Omicron pauses the return to economic normality

How can I tell I have Omicron?

There was also a scramble for assets that are considered to be safer in times of uncertainty, such as gold, German government bonds, and the yen.

 

"It's not good news, and it's coming from someone who should know," said Commonwealth Bank of Australia currency strategist Joe Capurso. "Markets have reacted in exactly the way you'd expect them to."

 

Markets plunged on Friday after investors were rattled by the discovery of the new variant, with the FTSE 100 index suffering its biggest drop in more than a year.

 

Stock markets rebounded slightly on Monday, but are still far below last week's levels.

 

However, both the FTSE 100 and the FTSE 250, which is more focused on UK firms, are still substantially higher than this time last year - up about 8.3% and 9.6% respectively.

 

Big shifts in the stock market are often in the news, whether they are booms or falls owing to coronavirus or the financial crisis.

 

There are good reasons why this performance affects your life and finances.

 

There are millions of people with a pension - either private or through work - invested by pension schemes.

 

The value of their savings pot is influenced by the performance of these investments.

 

Timing is more critical for those at retirement age, as this may be when a retiree uses their pension pot to buy a retirement income, or annuity.

 

The bigger the pot, the more income they will get in retirement.

 

Uncertainty about the new variant has triggered global alarm, with border measures casting a shadow over the economic recovery from the Covid pandemic that has been taking place.

 

It comes as infections rise again in some European countries.

 

However, European Medicines Agency (EMA) executive director Emer Cooke told the European Parliament that even if the new variant becomes more widespread, existing vaccines should continue to provide protection.

 

Andrea Ammon, who chairs the European Centre for Disease prevention and Control (ECDC), said 42 cases of the variant had been confirmed in 10 EU countries. There were another six "probable" cases.

 

She said the cases were mild or without symptoms, although in younger age groups.

 

The science may still be uncertain but the Omicron variant has definitively intruded upon recent stock market euphoria.

 

The designation as a variant of concern last week, and then further comments this morning from vaccine makers that existing vaccines will not be as effective, has caused widespread and significant falls in share prices.

 

So what will the economic effect be? It should be limited and that is mainly because it's clear that the UK Government and the US Government will do everything to avoid any further lockdowns.

 

The world awaits the health data from hospitals, first from South Africa's outbreak, and then elsewhere, about its transmissibility and severity.

 

The new restrictions announced here in the UK and around the world reflect real time science, and in particular an expectation that the variant takes some bricks out of the wall of vaccine immunity.

 

That in and of itself will have some economic impact. In the UK, real time data from restaurant reservations and online job adverts were well above the equivalent day last year. Retail footfall was just 8% below the equivalent day in 2019. Things were beginning to get back to normal, even with a considerable number of Delta cases, and a steady stream of weekly deaths.

 

Omicron has paused some of this process, merely by injecting a doubt that the pandemic is behind us.

 

The World Health Organization has said it could take weeks to determine how severe Omicron infections could be, and how much protection current vaccines give.

 

The University of Oxford said there was no evidence that current vaccines would not prevent severe disease from Omicron, but that it was ready to rapidly develop an updated version of its shot with AstraZeneca, if that is necessary.

 

Moderna and fellow drugs firms BioNTech and Johnson & Johnson are working on vaccines that specifically target Omicron in case existing shots are not effective against it.

 

Moderna has also been testing a higher dose of its existing booster.-BC

 

 

 

EasyJet says Omicron has weakened bookings

EasyJet has seen "some weakening" in bookings amid concern about the new Covid variant, the airline's boss says.

 

But Johan Lundgren told the BBC it was too early to assess what the full impact might be, saying: "We need to see how things settle down."

 

He also said bookings for next summer were largely unaffected, with strong pent-up demand likely to see a return close to pre-pandemic 2019 levels.

 

The Omicron variant has led to the imposition of new travel rules.

 

The new strain, which emerged in South Africa, had an immediate impact on the services of long-haul airlines such as British Airways and Virgin Atlantic.

 

But as the virus spreads there are fears short-haul European airlines such as EasyJet could also be hit.

 

 

Mr Lundgren told the BBC's Today programme his airline had not so far seen the same impact on bookings as when previous restrictions were introduced.

 

He said the customer booking changes had mostly been people moving imminent trips to early next year.

 

Mr Lundgren said he was supportive of the swift re-introduction of the "red list" crackdown on travel, but "there's a question mark around the blanket PCR testing" for infection.

 

"It's not obvious to me that if you're travelling in from a country… that doesn't have any reported cases of the Omicron, that you should assume that you should have to take an expensive PCR test," he said.

 

On Monday, EasyJet said it would extend its fee-free rebooking policy until March 2022.

 

Mr Lundgren said the airline's restructuring during the collapse in air travel at the height of the pandemic meant it was well placed to handle any further disruption.

 

The airline, which has cut costs and prioritised the strongest routes, said it had seen an encouraging start to the winter season.

 

In a financial update on Tuesday, EasyJet reported that revenue booked for the second half of its financial year was ahead of 2019 levels. The airline is increasing its fleet plan by 25 aircraft, with slots added at Gatwick, Porto, Lisbon and Milan's Linate.

 

However, the carrier still reported a loss before tax of £1.14bn for the year to end-September, up from a £835m loss the year before.

 

'Patchy months'

Despite the hefty loss, which covered some of the worst periods of the pandemic, the figure was still better than expected, according to Sophie Lund-Yates of share broker Hargreaves Lansdown.

 

She said EasyJet's restructuring, low-cost business model, and strong route network with bases at popular destinations, was cause for optimism about a bounce-back.

 

However, she added: "Airlines can't seem to catch a break. News of new Covid variants, and the potential for further travel restrictions, makes it incredibly difficult to predict trading patterns from here.

 

"There is no getting away from the fact [EasyJet has] further to climb and the coming months will be patchy at best."

 

Meanwhile, other airlines voiced caution about the possible impact of Omicron on trading.

 

The president of Dubai-based long haul carrier Emirates, Tim Clark, said a major hit to peak winter travel would cause serious problems for global aviation.

 

He told Reuters news agency: "December is a very important month for the air travel business. If that is lost, or the winter is lost to a lot of carriers, there will be significant traumas in the business, certainly the aviation business and the periphery."

 

And the Scandinavian operator SAS said in a financial statement on Tuesday "we remain cautious due to prevailing uncertainties".-BBC

 

 

 

Shops step in to supply cash as ATMs close

A scheme which allows shoppers at convenience stores to get cashback without having to make a purchase is being expanded rapidly over the next few weeks.

 

Having started as a small trial, it is now available in 900 stores, and will soon be used in 2,000 shops.

 

Shops are increasingly stepping in to provide cash to customers as ATMs close across the UK.

 

But one retail group says shopkeepers should not be a substitute for ATMs.

 

The system operates through a PayPoint network in local stores, and is backed by Link, which oversees the UK's cash machine network.

 

People using the service can choose to withdraw any amount between 1p and £50, rather than just the notes dispensed by an ATM. They do not have to buy anything in the shop to receive the money, and are not charged a fee.

 

During the year-long trial, more than 24,800 transactions have been made, with an average withdrawal of £27.81.

 

ATM closures

The requirement for the service is the result of disappearing free-to-use ATMs, particularly in less populated areas. There was a 25% drop in the number of free-to-use cash machines between January 2018 and October this year.

 

Chart showing the falling number of cash machines in the UK

Link's own figures suggested that while some wealthier parts of Edinburgh and London saw a sharp fall in demand for cash machines, there remained a greater reliance on cash in areas such as Liverpool, Bradford and Birmingham.

 

Retailers receive a fee from the cardholder's bank each time the cashback service is used, and groups representing shopkeepers have given a guarded welcome to its expansion.

 

"Alternative ways of providing cash are essential, which is why we welcome the extension," said Tom Ironside, director of business and regulation at the British Retail Consortium.

 

"Nonetheless, the provision of cashback is not suitable for all retailers as it often requires them to hold significantly more cash than normal - putting them at an increased crime risk. For this reason, the availability of free-to-use ATMs in all parts of the country remains essential."

 

Martin McTague, from the Federation of Small Businesses, said: "There's been good anecdotal evidence from this cashback without purchase trial, especially with regards to footfall - shoppers come in to take out cash, and then make unplanned purchases when on site, leading them to build a new relationship with a small business.

 

"Making the wider roll-out a success depends on getting incentives right."

 

He said the payments to shopkeepers needed to cover bank fees, which have been ramped up as bank branches have closed, higher insurance premiums owing to having cash on site, and compensation for the time needed to take notes and coins to and from access points.

 

The government has also given its backing to cashback projects, having changed legislation following the UK's departure from the EU to allow it to happen.

 

The trials, and subsequent extension of the scheme, is part of a wider project trying to ensure notes and coins are accessible to everyone who needs them across the UK.

 

The latest Financial Lives survey from the Financial Conduct Authority (FCA) showed that more than five million people rely on cash every day.

 

In July, the FCA, which regulates financial firms, warned that people living in rural areas were having to travel further to find somewhere to withdraw and deposit cash free of charge.

 

The Age UK charity has said that people require the same guarantee of access to cash as they do for running water, electricity and the post.-BBC

 

 

 

Asian shares bounce sharply from year low but Omicron, Fed in focus

(Reuters) - U.S. and European share futures jumped on Wednesday, oil rose and Asian stocks were heading for their best day in nearly two months as traders reversed course after a sharp selloff the day before took the regional benchmark to a 12-month low.

 

Competing for the limelight, U.S. Treasury yields climbed steadily after U.S. Fed chair Jerome Powell signalled the Fed may speed up the pace of its bond-buying taper at its meeting later this month.

 

 

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 1.3%, which would be its best daily gain since early October, as traders decided Tuesday's declines, which sent the benchmark to its lowest since November 2020, had gone too far.

 

While that helped the regional benchmark walk back this week's selloff, it is still sitting about 2% below Thursday's close before news of the latest variant of the new coronavirus derailed markets.

 

 

The share rally in Asia looked set to continue into European and U.S. trading. Nasdaq 100 futures rose 1.35%, S&P500 futures gained 0.78%, Euro Stoxx 50 futures advanced 0.63% and FTSE futures rose 0.67%.

 

"As the market really oversold and over-digested Omicron, it makes sense for asset prices to rebound," said Edison Pun, senior market analyst at Saxo Markets.

 

On Tuesday, MSCI's gauge of stocks across the globe (.MIWD00000PUS) had shed 1.5%, jolted by a warning from drugmaker Moderna that existing vaccines are unlikely to be as effective against the Omicron variant as they are against other strains.

 

Hong Kong (.HSI) rose 1.2% and Korea (.KS11) 2.2% to lead Wednesday's gains, although both were recovering from 12-month lows hit the day before.

 

Oil also rebounded after steep falls in the previous session, ahead of a meeting by the Organization of the Petroleum Exporting Countries (OPEC). read more

 

U.S. West Texas Intermediate (WTI) crude futures rose 2.5%, to $67.86 a barrel. Brent crude futures gained 2.7%, to $71.12 a barrel.

 

FED IN FOCUS

 

The other main issue top of investors' minds was the speed at which the U.S. Federal Reserve will taper its massive stimulus programme, and when it will hike interest rates.

 

"At present the market focus has been on Omicron and the potential that can disrupt the world, but the real focus should be on the Fed and the rate policy. That's the biggest shock to come out of the last day or so," said Kerry Craig global market strategist at JPMorgan Asset Management.

 

On Tuesday, Powell said U.S. central bankers in December will discuss whether to end their bond purchases a few months earlier than had been anticipated, pointing to a strong economy, stalled workforce growth, and high inflation that is expected to last into mid-2022. read more

 

That pushed U.S. Treasury yields higher, especially at the short end of the curve.

 

The yield on two-year notes , which reflects short-term interest rate expectations, rose to as high as 0.6060% on Wednesday, up from as low as 0.4410% on Tuesday, when traders were speculating the new variant could lead to a more dovish Fed.

 

Benchmark 10-year notes also sold off , last yielding 1.4800%, up from Tuesday's two-and a half month low of 1.4443%.

 

Rising yields caused the dollar to steady against most peers and gain ground on the Japanese currency, rising to 113.4 yen , with the safe haven yen hurt by the risk friendlier mood. FRX

 

That sentiment also helped the Aussie dollar which rose 0.6% from Tuesday's 32 month low.

 

Gold, despite all the excitement, saw little safe haven demand with the spot price at $1,779 an ounce, up 0.3%.

 

The Thomson Reuters Trust Principles.

 

 

 

Asian factories shake off supply headaches but Omicron presents new risks

(Reuters) - Asian factory activity grew in November as crippling supply bottlenecks eased, but rising input costs and renewed weakness in China dampened the region's prospects for an early, sustained recovery from pandemic paralysis.

 

The newly detected Omicron coronavirus variant has also emerged as a fresh worry for the region's policymakers, who are already grappling with the challenge of steering their economies out of the doldrums while trying to tame inflation amid rising commodity costs and parts shortages.

 

 

China's factory activity fell back into contraction in November, the private Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) showed on Wednesday, as soft demand and elevated prices hurt manufacturers. read more

 

The findings from the private-sector survey, which focuses more on small firms in coastal regions, stood in contrast with those in China's official PMI on Tuesday that showed manufacturing activity unexpectedly rose in November, albeit at a very modest pace. read more

 

 

"Relaxing constraints on the supply side, especially the easing of the power crunch, quickened the pace of production recovery," said Wang Zhe, senior economist at Caixin Insight Group, in a statement accompanying the data release.

 

"But demand was relatively weak, suppressed by the COVID-19 epidemic and rising product prices."

 

 

Beyond China, however, factory activity seemed to be on the mend with PMIs showing expansion in countries ranging from Japan, South Korea, India, Vietnam and the Philippines.

 

Japan's PMI rose to 54.5 in November, up from 53.2 in October, the fastest pace of expansion in nearly four years. read more

 

South Korea's PMI edged up to 50.9 from 50.2 in October, holding above the 50-mark threshold that indicates expansion in activity for a 14th straight month. read more

 

But output shrank in South Korea for a second straight month as Asia's fourth-largest economy struggles to fully regain momentum in the face of persistent supply chain disruptions.

 

"Overall, with new export orders flooding back to countries previously hamstrung by Delta outbreaks and the disruption further down the supply chain still working through, there is plenty of scope for a continued rebound in regional industry," said Alex Holmes, emerging Asia economist at Capital Economics.

 

India's manufacturing activity grew at the fastest pace in 10 months in November, buoyed by a strong pick-up in demand. read more

 

Vietnam's PMI rose to 52.2 in November from 52.1 in October, while that of the Philippines increased to 51.7 from 51.0.

 

Taiwan's manufacturing activity continued to expand in November but at a slower pace, with the index hitting 54.9 compared with 55.2 in October. The picture was similar for Indonesia, which saw PMI ease to 53.9 from 57.2 in October.

 

The November surveys likely did not reflect the spread of the Omicron variant that could add further pressure on pandemic-disrupted supply chains, with many countries imposing fresh border controls to seal themselves off.

 

The Thomson Reuters Trust Principles.

 

 

 

European stocks seen reaching new records in 2022

(Reuters) - Uncertainty about the COVID-19 pandemic has not dented prospects for European stocks to hit record highs in 2022, boosted by a recovery in corporate profits, according to a Reuters poll of 23 fund managers, strategists and brokers.

 

The poll, conducted over the past two weeks, predicted Germany's DAX (.GDAXI) and France's CAC 40 (.FCHI) blue chip indexes would hit uncharted highs by mid-2022, rising about 8% and 6% from Monday's close respectively.

 

 

The pan-European STOXX 600 (.STOXX) would gain 7% and reach 500 points by July, 10 points above the lifetime peak hit on Nov. 17, according to the Nov. 15-30 poll.

 

Although European stocks tumbled 3.7% on Friday when fears about the impact of the new coronavirus variant triggered a broad sell-off, they are still up about 17% since the start of the year.

 

 

A robust bounce back in profits from the lockdown-triggered recession of 2020 lies behind this year's strong performance.

 

According to the latest Refinitiv I/B/E/S data, the third-quarter earnings season saw profits jump 58.8% after surges of 96.4% and 152.6% in the first two quarters.

 

"We expect earnings to be the key driver for global equities, and this is also true for the euro zone," said Credit Suisse chief global strategist Philipp Lisibach.

 

He expected high single-​digit equity returns in 2022 compared to double-​digit returns in 2021.

 

However, the resurgent pandemic in Europe and announcements of new social restrictions in Austria and elsewhere have knocked morale.

 

HEADWINDS

 

Euro zone economic sentiment eased in November amid consumer concerns about a fourth wave of the coronavirus, while German business morale deteriorated for the fifth consecutive month in November as supply bottlenecks hit manufacturing.

 

"Headwinds in Europe are suddenly increasing with rising energy prices, rising infections and delays in deliveries. This creates short-term uncertainty, but the situation should abate going into next year," said Tomas Hildebrandt, senior portfolio manager at Evli Bank in Helsinki.

 

Most analysts still have a positive outlook going forward, but some predict a grim year ahead for stocks.

 

Stephane Ekolo, a strategist at the brokerage Tradition, sees the STOXX 600 losing about 30 points to 430 points at the end of 2022, as economic growth slows.

 

"I believe corporate earnings are likely to deteriorate over the coming six months ... on the back of continued supply-chain disruptions, reopening boost fading, potential risk of restrictions and rising real rates," Ekolo said.

 

Among risks cited by the poll respondents was a spike in inflation that would force the European Central Bank to speed up the reduction in monetary stimulus.

 

Consumer prices in Germany rose 6% year on year after a rise of 4.6% in October, increasing pressure on the ECB to react.

 

But a rise in interest rates would likely boost European banks, already up 28% this year, as they typically thrive when interest rates expectations go up.

 

The French presidential election in April offers further uncertainty in 2022, with incumbent Emmanuel Macron likely to face far-right challenger.

 

"A victory for a euroskeptic president would be a risk for European integration," Credit Suisse's Lisibach noted.

 

The Thomson Reuters Trust Principles.

 

 

 

Japan keen to speed up digital yen launch as China adds geopolitical twist

(Reuters) - Japan's new political leadership is calling on the country's financial bureaucrats to ramp up efforts toward issuing a digital currency, pointing to China's far quicker progress as a potential challenge to the global economic order.

 

The government has increased staff looking into legal and technical aspects of issuing a central bank digital currency (CBDC), which are digital forms of existing currencies.

 

While the political attention has yet to translate into any other direct investment, it is also likely to keep the Bank of Japan (BOJ) under pressure to shift away from its cautious, baby-step approach toward issuing a digital yen, analysts say.

 

"We must think about what could happen to Japan's national security if other countries move ahead on CBDC," said Takayuki Kobayashi, a minister overseeing economic security - a new role created under Prime Minister Fumio Kishida's administration.

 

"Japan must speed things up so it's ready to issue a digital yen any time," he said.

 

A global front-runner, China has already run tests in major cities for a possible launch of a digital yuan next year. Japan, along with other G7 advanced nations, have moved much slower.

 

The BOJ only started the first phase of its experiment in April, and says it has no immediate plans to issue a digital yen. Pilot programmes, if any, won't take place until 2023 at the earliest.

 

That lukewarm stance may be put to test as Kishida has made economic security a policy priority, and framed questions around CBDC beyond finance into one of national security.

 

While G7 central banks generally agree on the need to counter China on issues around privacy, the case is particularly strong for Japan as lawmakers worry about the growing economic might of its assertive neighbour.

 

Some influential ruling party lawmakers see China's advances on CBDC as a potential threat to the dollar's status as a global reserve currency, and the financial dominance of Washington - Japan's biggest ally.

 

A close aide to Kishida told Reuters Japan must "work closely with the United States to counter any attempt that threatens the dollar's reserve-currency status," adding the BOJ was coordinating with the finance ministry to ensure speedy progress for issuing a digital yen.

 

Opposition parties have also called in their election campaign platforms for speeding up CBDC plans.

 

BOJ officials say China's plan won't directly affect the timeframe for their CBDC experiments as the key purpose of issuing a digital yen is to provide convenient, efficient payment and settlement means to the public.

 

What could affect the BOJ more than China's plan would be how quickly its European and U.S. counterparts announce plans for issuing CBDCs, say sources familiar with its thinking.

 

Debate over issuing a digital yen may intensify next year as Kishida's administration lays out details of its economic security plans, and as China is seen promoting its digital yuan at the Beijing Winter Olympic Games in February.

 

"It's clear Kishida's administration and his ruling party are keen on issuing a digital yen," said former BOJ board member Takahide Kiuchi, who is currently an economist at Japan's Nomura Research Institute.

 

"If China launches a digital yuan next year and Europe's central bank announces plans to issue a digital euro, that will have a huge impact on Japan and pile pressure on the BOJ."

 

The Thomson Reuters Trust Principles.

 

 

 

Cathie Wood's ARK buys a million Twitter shares after Dorsey steps down

(Reuters) - Cathie Wood's ARK Investment Management bought more than a million shares of Twitter Inc (TWTR.N), a day after Jack Dorsey stepped down as the chief executive of the social networking site.

 

ARK acquired 1.1 million Twitter shares worth $48.9 million at Tuesday's closing price of $43.94, according to the firm's daily trade report. They had lost 3.4% after opening lower.

 

 

On Monday, after the company named its technology chief Parag Agrawal as the CEO, the shares had closed down 2.7%. read more

 

Ark on Tuesday also bought 837,248 shares of online brokerage firm Robinhood Markets Inc (HOOD.O) worth $21.7 million. It had on the previous day bought 915,063 shares, taking an advantage of a pullback in shares.

 

The Thomson Reuters Trust Principles.

 

 

 

OPEC+ begins two days of talks amid oil rout

(Reuters) - OPEC and its allies begin two days of meetings on Wednesday to decide whether to release more oil into the market or restrain supply amid an oil price rout and fears the Omicron coronavirus variant could weaken global energy demand.

 

Oil prices fell to near $70 a barrel on Tuesday from as high as $86 in October, posting their biggest monthly decline since the outset of the pandemic, as the new variant raised fears of a supply glut.

 

 

For November, Brent fell by 16.4%, while WTI fell 20.8%, the biggest monthly fall since March 2020.

 

"The threat to oil demand is genuine," said Louise Dickson, senior oil markets analyst at Rystad Energy. "Another wave of lockdowns could result in up to 3 million bpd (barrels per day) of oil demand lost in the first quarter of 2022."

 

 

Also pressuring prices, Federal Reserve Chair Jerome Powell said the U.S. central bank likely will discuss speeding its reduction of bond purchases amid a strong economy and expectations that a surge in inflation will persist.

 

The Organization of the Petroleum Exporting Countries (OPEC) will meet on Wednesday after 1300 GMT, followed by a meeting on Thursday of OPEC+, which groups OPEC with allies including Russia.

 

Several OPEC+ ministers, including from Russia and Saudi Arabia, have said there was no need for a knee-jerk reaction from the group.

 

But some analysts have suggested OPEC+ might put plans to add 400,000 barrels per day (bpd) to supply in January on hold.

 

The group was already weighing the effects of last week's announcement by the United States and other countries to release emergency crude reserves to temper energy prices.

 

OPEC+ has been gradually winding down record supply cuts of 10 million bpd implemented last year and currently has some 3.8 million bpd of reductions still in place.

 

The increase in OPEC's oil output in November has again undershot the rise planned under a deal with allies, a Reuters survey found. read more

 

The Thomson Reuters Trust Principles.

 

 

 

Salesforce shares fall on disappointing profit forecast

(Reuters) - Salesforce.com Inc (CRM.N) forecast current-quarter profit below Wall Street estimates on Tuesday as it faces stiff competition from rivals including Microsoft Corp (MSFT.O), sending its shares down 6% in extended trading.

 

The San Francisco, California-based company also picked insider Bret Taylor to co-lead the company alongside top boss Marc Benioff.

 

Taylor was named the chairman of Twitter Inc's (TWTR.N) board on Monday. He will also be the vice chair of Salesforce's board, effective immediately, the company said.

 

Salesforce, a bellwether in the Customer Relationship Management (CRM) sector, has seen a boost in demand due to the pandemic accelerating businesses' transition to cloud-based platforms.

 

However, the company continues to face stiff competition from competitors including Microsoft Corp's (MSFT.O) Azure, Amazon.com Inc's (AMZN.O) Amazon Web Services and Alphabet Inc's (GOOGL.O) Google Cloud.

 

Salesforce said it expected adjusted earnings in the fourth quarter to be between 72 cents and 73 cents per share, below estimates of 81 cents per share, according to IBES data from Refinitiv.

 

The company also forecast first-quarter revenues to be between $7.22 billion and $7.25 billion, compared with estimates of $7.36 billion.

 

Last month, Microsoft reported strong growth in its Azure segment, its flagship cloud-computing business. While Google Cloud's third-quarter revenue rose 45% to $4.99 billion. read more

 

On a post-earnings call, Taylor touted the performance of Slack, a workplace messaging app Salesforce bought in a $27.7 billion deal, but signaled the company was not keen on any M&A in the near term.

 

However, Salesforce reported better-than-expected revenue for the third quarter, boosted by strong demand for its cloud-based software.

 

Revenue rose 27% to $6.86 billion in the quarter ended Oct. 31, beating analysts' estimate of $6.8 billion, according to IBES data from Refinitiv.

 

Stripping one-time costs, the company reported earnings of $1.27 per share, also above estimates of 92 cents per share.

 

The Thomson Reuters Trust Principles.

 

 

Tanzania: Tpsf Advises Private Sector Capitalise On Eacop Project

Tanzania Private Sector Foundation (TPSF) has advised Tanzanian and Ugandan companies to form a joint venture to grab opportunities in a major East African Crude Oil Pipeline (EACOP) project from Hoima Uganda to Tanga in Tanzania.

 

TPSF Executive Director, Francis Nanai made the remarks recently at the oil and gas symposium that brought together stakeholders from Uganda and Tanzania. He said the implementation of the project requires a concerted effort to reap the benefits.

 

He said as key players in the private sector they need each other to address the challenges that exist in working on the EACOP major project so that can grab opportunities.

He said the project requires significant capital to supply equipment needed by a major contractors, knowledge, and skilled workforce.

 

"These opportunities offer new challenges that we as members of the private sector should get answers. The issues include raising our capacity to effectively and efficiently supply the materials, equipment and services as may be required by the main contractor. We must also supply the products and services that meet the international standard requirements.

 

"As private sectors of both countries we need to up the skills of our workforce so they can deliver the services as required by the main contractors as well as financial muscles to enable us to deliver on our assignments," said Nanai adding all these challenges bring us to one conclusion that we need each other.

 

Further he said in the private sector they continue to engage with the government through public-private dialogue to address various legal and regulatory impediments that inhibit full exploitation of the opportunities presented by the EACOP project.

"We invite and encourage our brothers and sisters in Uganda to come and invest in our country, since there is political tranquility to enjoy in Tanzania which makes the country investable by all known standards as our president Samia open doors for investment from all over the world as long as they meets government requirements," said Nanai.

 

However, Mr Nanai appreciated the role that the two governments have played in ensuring that the local businesses grab the opportunities that come with the project.

 

He said for instance, "Tanzania we have the Petroleum Local Content Regulations 2017 in the petroleum Act (CAP.392) which compel investors to procure and support the growth of the petroleum industry through effective expansion of local participation in the petroleum operations by creating local jobs and use of locally manufactured goods, works and services to enhance the building of local industries.

 

He said the regulation intervention is mainly aimed at securing socio-economic benefits that come with mega investment projects and thus ensured that such projects benefit the local economy.

 

He said that development was especially important considering that Tanzania is endowed with a lot of riches including oil and natural Gas.

 

Opening the forum, the Minister for Energy, January Makamba called on the people of Tanzania and Uganda to work together and join forces to secure opportunities for the project which has already been implemented in the early stages.

 

Mr Makamba said many opportunities are arising from the EACOP project so citizens of both countries will have the opportunity to be involved where it will increase their income for individuals and for society as a whole.

 

Makamba said the EACOP is a very big project in which with the involvement of the private sector the citizens will get direct employment, their business will grow.-Daily News.

 

 

 

Nigeria: Zulum Presents N267.921bn 2022 Appropriation Budget to Borno Assembly

Governor Babagana Zulum of Borno State, yesterday, proposed about N267.921billion for the 2022 fiscal year made up of N172,535,634,000 for capital expenditure and N95,385,850,000 for recurrent expenditure.

 

The education sector got the lion share of N38,069,877,000, while Ministry for Local Government and Emirate Affairs got the least share of N408,276,000.

 

The amount represents 20.22 percent of the budget, which comprises N11,602,110,000 for Education Ministry, N13,933,224,000, for Higher Education, N18,533,600,000, for State Universal Basic Education and N4,666,800 for Borno Teaching Service Board.

The budget tagged, "Hope for Post-Conflict Stability" is made up of 65 percent for capital projects, while recurrent expenditures got 35 percent, which is to be financed from Recurrent Revenue of N113,535,634,000 for capital expenditure.

 

"This will comprise FAAC Revenue of N48,215,985,000, Internally Generated Revenue (IGR) of N34,534,704,000, Value Added Tax (VAT) of N20,716,973,000, and other Federation Account sources of N10,372,239,000 billion respectively, in addition to N154,081,583,000 comprising loans and grants to be financed by Capital Receipts," he said.

 

Presenting the appropriation Bill to the Speaker, Mr. Abdulkarim Lawan and other lawmakers on the floor of the Assembly, Zulum said, the budget would be financed from the statutory allocation and improved internally generated revenue.

 

He said, the 2022 budget which is higher than that of the 2021 (248 billion) with slight difference of about N19.921 billion is "aimed at accelerating the ongoing reconstruction of destroyed communities for safe and dignified resettlement, provision of livelihoods and social support to citizens, ensuring the completion of ongoing projects and achieve 20 key deliverables."

 

Responding, the Speaker, Lawan applauded the governor for executing numerous people oriented projects, and for maintaining a cordial relationship with the legislature which has led to transparency, accountability and good governance.

 

He pledged that the House would look into the budget, deliberate on it with a view to ensure its speedy passage into law for the betterment of the people of the state.-Vanguard.

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

National Unity Day

 

December 22

 


 

Christmas Day

 

December 25

 


 

Boxing Day

 

December 26

 


 

Public Holiday in lieu of Boxing Day falling on a Sunday

 

December 27

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

 

 


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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