Major International Business Headlines Brief::: 01 February 2021

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Major International Business Headlines Brief::: 01 February 2021

 


 

 

	
 


 

 


ü  Silver surges as Reddit army turns to commodities

ü  Accountants warned over fraud expectations

ü  Post-Brexit taxes for steel 'very damaging', says Kinnock

ü  Wall Street gears up for second bout against Reddit traders

ü  Asian shares rally as retail crowd catch silver bug

ü  Asian factories show mixed performance as pandemic's pain lingers

ü  Robinhood narrows trade limitations to 8 companies from 50- Blog

ü  As Google eyes Australia exit, Microsoft talks Bing with PM

ü  Shell targets power trading and hydrogen in climate drive

ü  Exxon, Chevron CEOs discussed merger in early 2020-sources

ü  Melvin Capital ends month with over $8 billion in assets after investors
added cash: source

ü  Tanzania: Let's Abolish Agricultural Product Imports - PS

ü  Nigeria: 2021 Budget - We Have Nothing to Hide - PMB

 

 


 <mailto:info at bulls.co.zw> 

 


Silver surges as Reddit army turns to commodities

Silver prices leapt to a five-month high on Monday on social media calls to
buy the metal and emulate the frenzy that drove up GameStop shares.

 

Shares in a handful of smaller Australian mining firms surged as small-time
traders bought en masse.

 

Argent Minerals, Boab Metals and Investigator Resources leapt more than 15%.

 

Coin-selling websites also reported unprecedented demand and flagged delays
in delivering silver.

 

Silver rose as much as 7% to $28.99 an ounce, its highest value since
mid-August.

 

The moves are the latest example of small-time traders buying stocks and
other assets that large Wall Street funds bet against, resulting in large
losses for major investors.

 

Some users in the Reddit forum Wallstreetbets argued that silver is a
heavily manipulated market, and a surge in the silver price could hurt large
Wall Street players.

 

"Think about the Gainz. If you don't care about the gains, think about the
banks like JP MORGAN you'd be destroying along the way," said Reddit user
RocketBoomGo, in a widely circulated post.

 

The recent GameStop surge, which was also fuelled by retail investors, was
also seen as a revolt against large institutional investors.

 

Unlike GameStop, which was a loss-making gaming retailer that many
investment funds had bet against, Silver has seen strong growth over the
past year.

 

"There is this curious situation now where the Reddit crowd has turned its
sights on a bigger whale in terms of trying to catalyse something of a short
squeeze in the silver market," said Kyle Rodda, an analyst at brokerage IG
Markets in Melbourne.

 

"There's a lot of commentary on these platforms to pile in to the miners."

 

Silver prices are up 15% since Wednesday's close, around the time when
messages began circulating on forums such as Reddit encouraging users to buy
the metal and drive up prices.

 

Massive losses for Melvin

The latest surge comes as the damage to one Wall Street firm becomes
clearer.

 

Hedge fund Melvin Capital lost 53% in January, according to media reports.

 

However, the firm received commitments for fresh cash from investors in the
last days of January, and ended the month with $8bn (£5.8bn) in assets after
having started the year with roughly $12.5bn, according to Reuters.

 

The firm had bet that ailing video game retailer GameStop's stock, which
traded at less than $5 five months ago, would fall further.

 

But retail investors, comparing notes on social media platform Reddit,
bought the stock and sent it higher to close at $325 on Friday.--BBC

 

 

 

Accountants warned over fraud expectations

A fresh argument has broken out over the role of auditors in spotting fraud.

 

An international standards body wants to consult members on the so-called
expectation gap - the idea that the public expects too much from an audit.

 

But pensions advisor Pirc will write to the UK's big audit firms warning
them to reject the consultation on how far they should go to spot fraud.

 

Auditors have been fined and criticised for bad work after the collapse of
big companies like BHS and Wirecard.

 

Auditors test a company's accounts on a sample basis to make sure they offer
a sound view of a business's health.

 

In the UK, Parliament and the courts have decided auditors should be able to
spot fraud, Pirc says.

 

The International Auditing and Assurance Standards Board (IAASB) said it
wants feedback from its members on this expectation gap on the areas of
fraud and whether a company can survive for the foreseeable future.

 

It asks whether auditors should have "enhanced or more requirements with
regard to fraud in an audit of financial statements".

 

But Pirc says that in the UK at least, they already should be spotting
fraud, and that Parliament and the courts have said so. Auditors such as the
so-called Big Four - EY, Deloitte, KPMG and PwC - should acknowledge this,
it says.

 

"The central premise of this consultation is incorrect because there is no
'expectation gap' under the law of many countries including the UK and other
jurisdictions. In the UK, both the Judiciary and Parliament are clear on
this," says a letter to the IAASB, seen by the BBC.

 

The IAASB told the BBC that it is "not making a judgment on whether the
expectation gap should be used as a rationale for failures."

 

"The reality is that there are differences between the levels of expected
performance envisioned by auditors and users of financial statements - that
is the expectation gap," it said. "The purpose of our consultation is to
move beyond the buzzwords and to inform targeted action in terms of fraud
and going concern based upon a common understanding of what people want and
expect of auditors."

 

Arguments over who should spot fraud have happened several times before. In
2019, David Dunckley, chief executive of Grant Thornton, which audited
failed bakery chain Patisserie Valerie, told MPs that "we're not looking for
fraud".

 

But Scott Knight of audit firm BDO, told MPs that auditors should be on the
lookout for "sizeable" frauds.

 

Critics point out that auditors are meant to spot accounting holes like
missing funds. And since funds can only be missing through error or fraud,
they are meant to be spotting fraud, even if they don't immediately realise
that is the cause of the problem.

 

Pirc fears that the regulator is trying to re-open an argument that the
industry has already lost.

 

BHS's auditors, PwC, were fined a record £6.5m after signing off accounts
the industry watchdog, the Financial Reporting Council, called "incomplete,
inaccurate and misleading".

In its 2019 report on auditing, Parliament's Business, Energy and Industrial
Strategy Committee dismissed the idea of gap between what the public
expected of auditors and their job.

 

"We do not accept the attempts of auditors - particularly the Big Four and
Grant Thornton - to underplay the role or scope of audit, nor to implicitly
blame the public for failing to understand the purpose of audit," the report
said.

 

"Rather, the firms should focus on the poor quality of their audits, and on
how they are falling short of what audits are for within the current
framework."

 

Their job already includes detecting "material fraud and making a judgement
on a company's future prospects", it said.

 

In its judgement of a case between auditor Grant Thornton and a company
called Assetco, the Court of Appeal said that the auditor "failed in its
duty to identify management fraud, particularly dishonest representations
and evidence provided to it by senior management in the course of the
audits."

 

Companies above a certain size must be audited, and must provide auditors
with everything they ask for. This can include an entire backup of a
company's accounting system, plus evidence of deposits from banks and
interviews with managers.

 

If information given to an auditor is knowingly or recklessly false or
deceptive in something important, that can land you in prison for up to two
years and with a fine.

 

With such broad powers of investigation, some campaigners ask why more
frauds are not being uncovered.--BBC

 

 

 

 

Post-Brexit taxes for steel 'very damaging', says Kinnock

Some steel products could face post-Brexit taxes within months, the sector
has warned.

 

UK Steel said it was "likely" that export quotas for some products would run
out in the first quarter of this year - meaning exports would face a 25%
tariff.

 

Aberavon MP Stephen Kinnock said the UK government should renegotiate the
"very damaging" new quotas with the EU.

 

The UK government said it would "engage intensively" with the sector.

 

Tata Steel UK employs about 8,000 people in the UK, the majority of which
are in Wales with about half based at Port Talbot.

 

In the year to March 2020 - before the coronavirus pandemic hit demand for
steel - Tata Steel UK made a pre-tax loss of £654m and there have been
ongoing calls for financial support from the UK Government.

 

But Welsh Labour MPs told BBC Politics Wales the latest challenge for the
sector could be the changes agreed in the post-Brexit trade deal at the end
of last year.

 

'Very troubling'

"Boris Johnson has said that the Brexit deal is no quotas and no tariffs -
that is just not true," said Mr Kinnock, whose constituency includes the
Port Talbot steelworks.

 

"The steel industry is going to be subjected to 25% tariffs on every tonne
of steel that we export to the European Union above a certain quota.

 

"What's even worse is steel going from Great Britain to Northern Ireland
will be included in the calculation of that quota, so we really have got a
very troubling situation that could have a very damaging impact on our steel
industry.

 

"We need the government to get back to the negotiating table with the
European Union.

 

"The big question is, does the European Union have any incentive to get back
to the negotiating table now the deal is done. Have we lost all of our
leverage?"

 

There are now separate quotas for UK steel trading with the EU for 29
different steel products.

 

UK Steel, which represents manufacturers, said some of those quotas were
likely to run out in the first quarter of this year.

 

'Huge problems'

"The official expiry date of the EU safeguard measure [quotas] is June 2021,
but it is looking increasingly likely that they will be extended beyond this
period - perhaps for another three years," a spokeswoman said.

 

"If the UK can't get an exemption, or its quotas expanded, it will cause
huge problems for the UK steel sector."

 

She said Brexit was also impacting how much steel the UK can expect to
export due to customs delays, a shortage of hauliers and concern from EU
customers.

 

Is state aid the answer?

Mr Kinnock has urged the UK government to provide support to the industry.

 

Steel analyst Kathryn Ringwald Wildman said more state aid could have been
given, even while a member of the EU, while the steel industry is among many
sectors asking for help following the coronavirus pandemic.

 

"One is inclined to think that because [the UK government] expressed such
concern over the ability to use state aid that they intend to use state
aid," she said.

 

"However, in the past they haven't used it to the maximum, even within
European regulations.

 

Tata Steel 'needs permanent support' to stay in UK

'Resist speculation' over steel plant's future

"Within European regulations, some countries were able to give their steel
industries much more support with relation to energy costs than the UK
government chose to do."

 

She said the UK government would be weighing up whether steel remains a
"strategic industry".

 

"Many would say yes - we have a strong manufacturing sector [so] you need a
thriving steel industry [however] now we have competing voices for support.

 

"Industries like hospitality, leisure and tourism, retail, have all been
devastated by the pandemic and seeking help to recover. The government has
to decide what are their priorities, where is the economy going to be best
served in the long-term."

 

Prof Kent Matthews, economist at Cardiff University, said any steel subsidy
would need a time limit.

 

"The main challenges are in terms of value for money," he said.

 

"The Treasury's argument will be they don't want to keep throwing money at
something that's not going to produce a return at all.

 

"The long-term effect for steel coming out of Brexit, if nothing changes, is
that it will be absolutely destroyed by world markets. So the arguments for
subsidising are ones of giving it breathing space to be able to up their
game, invest in the right technologies and move up the value chain.

 

"There are arguments for permanent subsidies for certain industries but
steel is not one of them because it's a tradable good, it's something that
can be got from outside."

 

The UK government said it was in continuing discussions about increasing
quotas for exports into the EU single market.

 

A UK government spokesman said: "We have worked successfully with the
European Commission to secure tariff rate quotas for some steel products to
enable UK companies to trade tariff-free into the EU.

 

"These tariff-free allocations came into operation on 1 January 2021.

 

"The government will continue to engage intensively with the sector to
understand their concerns and requirements."--BBC

 

 

 

Wall Street gears up for second bout against Reddit traders

BOSTON/LONDON (Reuters) - Wall Street is gearing up for another week of
market mayhem, with signs that the retail frenzy that pumped up the stock
prices of the likes of GameStop Corp and AMC Entertainment Holdings Inc is
spreading to other assets.

 

Some of Wall Street’s largest hedge funds are still licking their wounds
after retail traders sought to drive up the prices of stocks that were
heavily bet against, resulting in large losses for major investors.

 

Melvin Capital, a hedge fund at the center of the GameStop drama, lost 53%
in January but received commitments for fresh cash from investors in the
last days of the month, Reuters reported on Sunday.

 

Melvin ended January with more than $8 billion in assets after having
started the year with roughly $12.5 billion in assets, according to a person
familiar with the matter.

 

On Friday, Citron Research’s Andrew Left, who spent two decades building his
brand as one of the world’s best-known short-sellers, turned his back on
publicly detailing companies’ shortcomings, following an intense backlash
against him and others who said video retailer GameStop’s stock was not
worth its price.

 

“We saw the might of a new investor base, in terms of their ability to shape
not just the fortunes of an individual stock but the fortunes of a large
market segment like the Russell 2000,” said Sunil Krishnan, head of
multi-asset funds at Aviva Investors.

 

Amid the wild price fluctuations, the amount of position covering last week
by U.S. hedge funds, buying and selling, was the highest since the financial
crisis more than a decade ago, according to an analysis by Goldman Sachs
Group Inc. Nevertheless, their market exposure to stocks is still near
record levels, the investment bank warned.

 

“According to Goldman Sachs Prime Services, this week represented the
largest active hedge fund de-grossing since February 2009. Funds in their
coverage sold long positions and covered shorts in every sector,” the
investment bank wrote in a note late on Friday.

 

“Despite this active deleveraging, hedge fund net and gross exposures on a
mark-to-market basis both remain close to the highest levels on record,
indicating ongoing risk of positioning-driven sell-offs.”

 

Signs are mounting that retail traders who moved the market last week are
setting their sights further afield than just U.S. stocks.

 

On Thursday and Friday, the price of silver rallied, taking gains to around
10% since messages began to circulate on social media platform Reddit urging
retail investors to pile into the market and drive up prices. The price of
gold has also rallied.

 

Such market moves have brought into focus the growing heft that retail
traders have on financial markets, which had been dominated in the past by
larger institutions.

 

“What’s been surprising in the last few months has been the scale of retail
participation has started to move the dials,” said Paul O’Connor, head of
the multi-asset team at Janus Henderson in London.

 

“If you looked at that data a couple of months ago, you can see it’s been
happening. It’s not like these guys woke up last week,” O’Connor added.

 

 

 

Asian shares rally as retail crowd catch silver bug

SYDNEY (Reuters) - Asian shares rallied on Monday and U.S. stock futures
recouped early losses as newly empowered retail investors turned their
attention to precious metals, promising a respite to some hard-hit hedge
funds.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.4%
after four straight sessions of losses.

 

Japan’s Nikkei added 1.2%, after shedding almost 2% on Friday, while Chinese
blue chips gained 0.5% as the country’s central bank injected more cash into
money markets.

 

Futures for the S&P 500 edged up 0.3%, having been down as much as 1% in
early action, while NASDAQ futures firmed 0.1%. EUROSTOXX 50 futures added
0.6% and FTSE futures 0.2%.

 

Dealers noted a shift in the headline-grabbing battle between retail
investors and Wall Street that led hedge funds last week to trade the most
stock in a decade amid wild swings in GameStop Corp.

 

Talk now was that silver was the new target for the retail crowd, as the
metal jumped 6% to a six-month high, possibly limiting the need for
distressed selling by stock funds.

 

Analysts cautioned this entertaining episode was really a sideshow compared
with signs of a loss of economic momentum in the United States and Europe as
coronavirus lockdowns bite.

 

Indeed, two surveys from China showed factory activity slowed in January as
restrictions took a toll in some regions.

 

Neither was the news on vaccine rollouts positive, especially given doubts
about whether they will work on new COVID strains.

 

“It is these considerations, not what is happening to a video game retailer
day to day, that has weighed on risk assets,” said John Briggs, global head
of strategy at NatWest Markets. “So much of the market’s valuations, risk in
particular, is premised on the fact we can see a light at the end of the
COVID tunnel.”

 

Doubts have also emerged about the future of President Joe Biden’s $1.9
trillion relief package, with 10 Republican senators urging a $600 billion
plan.

 

The jitters in stocks caused only a brief ripple in bonds, with Treasury
yields actually rising late last week, perhaps a refection of the tidal wave
of borrowing underway.

 

A record $1.11 trillion of gross Treasury issuance is slated for this
quarter, up from $685 billion the same time last year.

 

On Monday, U.S. 10-year yields had nudged up to 1.08% and nearer the recent
10-month top of 1.187%.

 

Higher yields combined with the more cautious market mood have seen the
safe-haven dollar steady above its recent lows. The dollar index stood at
90.535, having bounced from a trough of 89.206 hit early in January.

 

The euro idled at $1.2129, well off its recent peak at $1.2349, while the
dollar held firm at 104.70 yen.

 

Gold followed silver higher to $1,862 an ounce, but has repeatedly stalled
at resistance around $1,875. [GOL/]

 

Oil also tracked the gains in other commodities, with U.S. crude rising 21
cents to $52.42 a barrel. Brent crude futures gained 33 cents to $55.37.
[O/R]

 

 

 

Asian factories show mixed performance as pandemic's pain lingers

TOKYO (Reuters) - Manufacturing in China and Japan suffered in January,
while South Korea and Taiwan saw improvement amid a resurgence in
coronavirus infections, underscoring the fragile nature of the region’s
economic recovery.

 

Factory activity rose in major chip exporters South Korea and Taiwan, as
they benefited from continued brisk demand for semiconductors crucial to
work-from-home IT goods.

 

But China’s manufacturing activity expanded at the slowest pace in seven
months in January, weighed down by falling export orders.

 

Japan also saw factory activity slip back into contraction as a new state of
emergency, rolled out in January, hit operating conditions, PMI data showed
on Monday.

 

“Manufacturers may slash output as the state of emergency will unavoidably
hurt the economy,” said Takeshi Okuwaki, an economist at Dai-ichi Life
Research Institute in Tokyo.

 

“A shortage of chip supply will take time to fix, which will also weigh on
Japan’s automobile production,” he said.

 

China’s Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) dropped
to 51.5 last month, its lowest level since June last year and easing from
December’s reading of 53.0.

 

Although it remains above the 50 mark that separates growth from
contraction, the index was below a median market forecast for a reading of
52.7.

 

The survey broadly aligned with Beijing’s official PMI on Sunday, which
showed the recovery in factory activity slowing as local COVID-19 cases
rose.

 

Japan’s final au Jibun Bank PMI fell to 49.8 in January from the previous
month’s 50.0 reading, as fresh state of emergency measures in areas
accounting for 55% of the country’s population hurt employment and output.

 

That was in stark contrast to South Korea, where factory activity rose at
its fastest pace in a decade thanks to soaring exports.

 

South Korea experienced its third and strongest wave of infections this
winter but is seeing a gradual decline in new cases.

 

Manufacturing activity in Indonesia increased at a faster pace in January
than in December, and such activity stopped contracting in the Philippines.

 

But activity shrank in Malaysia and rose at a slower pace in Vietnam, the
PMI data showed.

 

China’s economy expanded at a faster-than-expected rate of 6.5% in the
fourth quarter last year, as factories raced to fill overseas orders amid a
surging pandemic.

 

But recovery hopes are being dampened by a sharp increase in COVID-19 cases
as authorities race to impose lockdown measures to curb the spread of the
virus in the country’s north.

 

 

Robinhood narrows trade limitations to 8 companies from 50- Blog

(Reuters) - Online brokerage Robinhood narrowed trading limitations to eight
companies from 50 on Sunday, according to an update on its blog.

 

Companies that are still face limitations include GameStop Corp, AMC
Entertainment Holdings Inc and Blackberry Ltd, it said.

 

 

As Google eyes Australia exit, Microsoft talks Bing with PM

SYDNEY (Reuters) - Software giant Microsoft Corp is confident its search
product Bing can fill the gap in Australia if Google pulls its search over
required payments to media outlets, Prime Minister Scott Morrison said on
Monday.

 

Australia has introduced laws that would force internet giant Google and
social media heavyweight Facebook Inc to negotiate payments to domestic
media outlets whose content links drive traffic to their platforms.

 

However, the Big Tech firms have called the laws unworkable and said last
month they would withdraw key services from Australia if the regulations
went ahead. Those services include Google’s search engine, which has 94% of
the country’s search market, according to industry data.

 

Microsoft CEO Satya Nadella has since spoken with Morrison about the new
rules, the tech company told Reuters, and on Monday, Morrison said the
software company was ready to grow the presence of its search tool Bing, the
distant No. 2 player.

 

“I can tell you, Microsoft’s pretty confident, when I spoke to Satya,”
Morrison told reporters in Canberra, without giving further detail of the
conversation.

 

“We just want the rules in the digital world to be the same that exist in
the real world, in the physical world,” Morrison added.

 

A Microsoft spokeswoman confirmed the discussion took place but declined to
comment, because the company was not directly involved in the laws.

 

“We recognise the importance of a vibrant media sector and public interest
journalism in a democracy and we recognise the challenges the media sector
has faced over many years through changing business models and consumer
preferences,” the spokeswoman said.

 

A Google representative was not immediately available for comment.

 

A day earlier, Australian treasurer Josh Frydenberg said Facebook CEO Mark
Zuckerberg had requested a meeting over the law, and that they had talked,
but that he would not back down on the change.

 

 

 

 

Shell targets power trading and hydrogen in climate drive

LONDON (Reuters) - Royal Dutch Shell is betting on its expertise in power
trading and rapid growth in hydrogen and biofuels markets as it shifts away
from oil, rather than joining rivals in a scramble for renewable power
assets, company sources said.

 

Shell and its European rivals are seeking new business models to reduce
their dependency on fossil fuels and appeal to investors concerned about the
long-term outlook for an industry under intense pressure to slash greenhouse
gas emissions.

 

Shell will present its strategy on Feb. 11 and unlike Total and BP the
company will focus more on becoming an intermediary between clean power
producers and customers than investing billions in renewable projects, the
sources said, giving previously unreported details of the plan.

 

Shell announced in October it would increase its spending on low-carbon
energy to 25% of overall capital expenditure by 2025 and the sources said
that would translate into more than $5 billion a year, up from $1.5 billion
to $2 billion now.

 

The Anglo-Dutch company will, however, keep its overall oil and gas output
largely stable for the next decade to help fund its energy transition,
though gas is set to become a bigger part of the mix, the sources told
Reuters.

 

A Shell spokeswoman declined to comment on the details of the company’s new
strategy ahead of its February announcements. BP, meanwhile, plans to slash
its oil output by 40% by 2030 and has swept aside its core oil and gas
exploration team to focus on renewables, with spending on low-carbon energy
set to rise 10-fold to $5 billion over the coming decade.

 

While Europe’s big oil firms are all rolling out strategies to survive in a
low-carbon world, investors and analysts remain sceptical about their
ability to transform centuries-old business models and triumph in already
crowded power markets.

 

POWER TRADING

Central to Shell’s plans are its experience in trading all types of energy
from oil to natural gas to electricity and its vast retail network, which
has more outlets than either of the world’s two biggest food chains, Subway
and McDonald’s.

 

Shell is already the world’s leading energy trader, an activity it calls
“marketing”. It trades about 13 million barrels of oil a day, or 13% of
global demand before the pandemic, using one of the biggest fleets of
tankers.

 

It is the top trader of liquefied natural gas (LNG), buys and sells power,
biofuels, chemicals and carbon credits, and now aims to use its pole
position to snare a large chunk of the fast-growing low-carbon power market.

 

“The future of energy is particularly bright for our marketing and our
customer-facing businesses where we already have scale. So we will
accelerate a growth plan which is already underway,” Chief Executive Ben van
Beurden said in October.

 

Trading has been key for oil majors for decades, allowing them to use their
global operations to quickly take advantage of changes in supply and demand.
Shell’s trading helped it avoid its first-ever quarterly loss in the second
quarter of 2020 even as consumption plummeted due to the coronavirus
epidemic.

 

 

Nevertheless, analysts say Shell’s trading division will face a challenge
because it is heavily reliant at the moment on sales of refined fossil fuel
products, which also account for a large proportion of its carbon emissions.

 

“Shell faces difficult choices on how to balance its trading cash flow that
leverages oil products while still having carbon-intensive operations,” JP
Morgan analyst Christyan Malek said. “But because of their scale, customer
base and distribution, they can be much more flexible.”

 

HYDROGEN HUBS

At the same time, Shell plans to boost its consumer base by expanding its
electricity supply business for homes and its network of electric vehicle
charging points, as well as signing long-term corporate power purchase
agreements (PPA).

 

Shell already has 45,000 retail outlets worldwide, far more than its
European rivals, and it is planning to add another 10,000 by 2025.

 

As a major biofuel producer, Shell wants to ramp up its production of fuel
made from plants and waste as an alternative source of energy for
transportation, the sources said.

 

Shell’s is also betting on future growth in hydrogen, the sources said.
While still a niche market, hydrogen has attracted huge interest in recent
months as a clean alternative to natural gas for heavy industry and
transportation.

 

 

Hydrogen, and so-called green hydrogen which is made solely with renewable
power, comes with high costs and infrastructure challenges though Shell is
already investing.

 

Its push will centre initially on Europe, where it is developing a hydrogen
hub in Hamburg, Germany, and it is one of several firms developing a hub in
Rotterdam in the Netherlands. It is also looking to expand into the United
States and Asia.

 

The U.S. state of California, for example, is backing the rollout of
hydrogen fuel cell vehicles to help achieve its climate goals while
countries such South Korea and Japan are betting heavily on hydrogen as an
alternative fuel.

 

The sources did not give any targets for increases in Shell’s production of
either hydrogen or biofuels.

 

Like Shell, rivals including BP, Total, Italy’s Eni and Spain’s Repsol also
plan to expand in hydrogen and biofuels markets, as well as add electric
vehicle charging points to generate new revenue away from oil.

 

COMPETITIVE EDGE?

However, Shell won’t chase the same ambitious targets some of its European
rivals have for adding wind and solar generation capacity and will
prioritise trading and selling electricity instead, the sources said.

 

 

Shell is wary about investing heavily in renewable projects where it won’t
have any particular competitive edge over other oil companies or utilities,
such as Spain’s Iberdrola and Denmark’s Orsted that are already becoming
significant green energy producers.

 

Shell will still expand its renewable capacity, especially in offshore wind
farms where it believes it has an advantage after years of operating
offshore oilfields, but the business will centre on profitability rather
than size, the sources said.

 

“Shell will have some volumetric targets but that is not the focus,” a
senior company official told Reuters. “A single focus on the volume of
renewable energy generating capacity could be dangerous and lead us to some
bad deals.”

 

BP wants to boost its renewable generation capacity 20 fold by 2030 while
Total is aiming to have 100 gigawatts (GW) of gross renewable energy
generation capacity by 2030.

 

Investors are concerned, however, that they may struggle to hit their profit
projections by investing in costly renewable projects which typically have
lower rates of return than oil.

 

Shell provided some details on its new strategy on Oct. 29, including a plan
to narrow its oil and gas production to nine hubs, cut the number of
refineries to six from 14 and boost its marketing business.

 

The company also announced plans to cut its workforce by up to 9,000
employees, or about 10%, by August this year as part of a broad cost-cutting
review known as Project Reshape.

 

 

 

Exxon, Chevron CEOs discussed merger in early 2020-sources

(Reuters) - The chief executives of ExxonMobil Corp and Chevron Corp held
preliminary talks in early 2020 to explore combining the two largest U.S.
oil producers in what would have been the biggest merger of all time,
according to people familiar with the matter.

 

 

The discussions, which are no longer active, are indicative of the pressure
the energy sector’s most dominant companies faced as the COVID-19 pandemic
took hold and crude prices plunged.

 

The talks between Exxon Chief Executive Darren Woods and Chevron CEO Mike
Wirth were serious enough for legal documents involving certain aspects of
the merger discussions to be drafted, one of the sources said. The reason
the talks ended could not be learned.

 

The sources requested anonymity because the matter is confidential. Exxon
and Chevron, which have market capitalizations of $190 billion and $164
billion, respectively, declined to comment.

 

Exxon and Chevron’s shares nosedived last year after a Saudi-Russian price
war and fallout from the novel coronavirus outbreak caused the value of oil
to crater. Exxon’s stock was hit hardest, as investors raised concerns about
the company’s long-term profitability and spending decisions.

 

In their talks, the CEOs of Exxon and Chevron envisioned achieving synergies
through massive cost cuts to help weather the downturn in energy markets,
one of the sources said. At the end of 2019, Exxon employed about 75,000
people and Chevron roughly 48,000.

 

Following the aborted talks with Exxon, Chevron went on to acquire oil
producer Noble Energy in a $5 billion cash-and-stock deal that was completed
in October.

 

A proposed combination last year would almost certainly have triggered an
intense antitrust review by the U.S. Justice Department, a process that
typically takes months to complete. And such a review would also potentially
have run up against last November’s U.S. presidential election, raising
additional uncertainty about how soon such a deal might be cleared, if at
all.

 

Now, under the Biden administration, the window might be all but closed as
Democrats historically have been less sympathetic to such deals, one of the
sources said. President Joe Biden has put climate change at the forefront of
his agenda, promoting jobs in renewable energy as opposed to traditional
ones in the oil sector.

 

Biden recently formally revoked the permit to build the Keystone XL oil
pipeline. General Motors last week said it would aim to stop selling
vehicles powered by gasoline and diesel, which rely on oil, by 2035.

 

The White House and Justice Department did not immediately respond to
requests for comment.

 

News of the unsuccessful talks emerged as Exxon has come under pressure from
some of its shareholders over its strategic direction.

 

Engine No. 1, a investment firm based in San Francisco, last week nominated
four directors to Exxon’s board and is pushing the company to spend its cash
better, preserve its dividend, and invest more in clean energy. Exxon is
also in the crosshairs of hedge fund D.E. Shaw, which is pressuring the
company to cut costs and improve performance.

 

Exxon reports fourth-quarter results on Feb. 2. Chevron last week reported a
surprise $11 million fourth-quarter loss as low margins on fuel, acquisition
costs and foreign currency effects overwhelmed improved drilling results.

 

COMBINED GIANT

A combined Exxon-Chevron would be eclipsed in size only by Saudi Aramco,
which boasts a roughly $1.8 trillion market value and has previously pushed
many U.S. drillers to the financial brink by flooding the market with oil.

 

Despite inevitable antitrust concerns, the companies could argue a merger
would represent the United States’ best shot at taking on the Saudi
state-owned conglomerate and the world’s other largest state-backed oil
producers, one of the sources said.

 

Last year’s Saudi-Russian oil price war, for instance, highlighted the
vulnerability of U.S. producers to foreign governments that can effectively
dictate the price of crude by forcing energy companies they back to boost or
cut output.

 

U.S. oil companies each compete among one another and set their own varying
production targets, with limited ability of Washington to intervene.

 

Exxon and Chevron, with their powerful balance sheets, withstood turmoil in
energy markets following the pandemic that forced some smaller independent
oil and gas producers to file for bankruptcy protection.

 

Yet they also felt the pain. Demand for oil evaporated in early 2020 as
governments imposed travel restrictions and stay-at-home orders to slow the
COVID-19 pandemic’s spread.

 

At one point in April, the price of U.S. West Texas Intermediate (WTI) crude
futures turned negative for the first time ever, signifying sellers needed
to pay buyers to take the commodity off their hands. Prices have since
rebounded to roughly $52 a barrel.

 

Exxon and Chevron have both cut jobs over the past year. Exxon late last
year left its dividend flat after boosting the shareholder payout each year
since 1982.

 

 

 

Melvin Capital ends month with over $8 billion in assets after investors
added cash: source

BOSTON (Reuters) - Melvin Capital, the hedge fund at the center of the
GameStop drama, lost 53% in January but received commitments for fresh cash
from investors in the last days of the month, a source familiar with the
fund said on Sunday.

 

Melvin ended January with more than $8 billion in assets after having
started the year with roughly $12.5 billion, the source said.

 

The firm, founded in 2014 by Gabe Plotkin, had bet that ailing video game
retailer GameStop’s stock, which traded at less than $5 five months ago,
would fall.

 

But a wave of retail investors, comparing notes on social media platform
Reddit and using online trading app Robinhood, took the other side of
Plotkin’s trade to send the stock up 1,625% this month to close at $325 on
Friday.

 

The Wall Street Journal first reported the loss.

 

“The fund’s portfolio liquidity is strong. Use of leverage is at the lowest
level since Melvin Capital’s inception in 2014,” the source said.

 

Hedge funds Point72 Asset Management and Citadel gave a $2.75 billion
capital infusion to Melvin Capital earlier in the week, enabling it to close
out that position with a large loss.

 

Citadel’s hedge funds, along with founder Ken Griffin and firm partners, put
$2 billion into Melvin. The funds lost less than 1% in January on their
Melvin position and are down 3% overall for the month, a person familiar
with the matter said on Sunday.

 

As news of losses at many hedge funds spread in recent days, speculation
mounted about which firms might be forced to shut their doors. Several
investors and fund managers said clients have been more patient with certain
firms that have a long and strong track record, likely allowing them to
survive this month’s deep losses.

 

 

Tanzania: Let's Abolish Agricultural Product Imports - PS

THE government has directed agricultural and extension officers to come up
with strategies that will help the nation stop importing agricultural
products.

 

Speaking in Dodoma on Saturday, Permanent Secretary (PS) in the Ministry of
Agriculture Gerald Kusaya said the government had been spending a huge chunk
of its hard currency from its foreign reserve every year to import
agricultural products, which he said was not healthy for the national
economy.

 

He said given the fact that the government was implementing the industrial
agenda agricultural officers must come up with strategies that would reduce
dependency on agricultural product imports.

Giving an example, the ministry's accounting officer said Tanzania had been
depending much on imports from agricultural products such as cooking oil,
wheat and sugar while such products could be locally produced from crops
grown in the country.

 

He said the country spending 470bn/- annually on the importation of cooking
oil while in the actual sense such spending could be cut down or abolished
by charting out strategies that could increase the production of crops such
as sunflower and palms for the production of edible oil.

 

Giving another example, the PS said Tanzania was spending 1.03bn/- on the
importation of wheat flour every year, which could have been solved by
increasing the production of the crop in the country.

 

He said extension and other agricultural officers had the duty to educate
farmers on how to engage in agribusiness that would help them address
poverty and contribute to the country's economic growth.

"For the country's economy to make significant strides, the agricultural
sector must undergo radical reforms with its actors, including its
stakeholders, especially extension officers, required to discard their
business -as- usual behaviour," Mr Kusaya said.

 

He gave an example of Israel, a nation in the Middle East with a small size
of land, but with high crop production, attributing the success to massive
investment in the agricultural sector which was supported by the application
of modern technology.

 

Chairman of the Parliamentary Standing Committee on Agriculture, Livestock
and Water Charles Mwijage warned that if the government did not invest
massively in the agricultural sector the dream of having an industrial
economy would not be realised in the near future.

 

He said if the government wanted to fast track the industrial agenda,
investment in the agricultural sector must be like that of the sectors of
power and transport infrastructure.-Daily News.

 

 

 

Nigeria: 2021 Budget - We Have Nothing to Hide - PMB

President Muhammadu Buhari yesterday said the nation's balance sheet is open
for all Nigerians and the National Assembly, stressing that his
administration has nothing to hide.

 

The president assured Nigerians of full implementation of the 2021 budget,
with all transparency and openness in meeting the targets, while
appreciating the National Assembly for the effective and detailed attention
before the passage.

 

Speaking to newsmen in Daura, after the registration and revalidation
exercise of the All Progressives Congress (APC), the President in a
statement by presidential spokesman, Garba Shehu said the budget aptly
captured some of the visions of the administration, and all efforts will be
poured in to ensure effective implementation.

"We have directed all the Ministries, Departments and Agencies to follow
what is in the budget so that we can get the National Assembly to easily
support the next budget. We can tell them what we have received, and how it
was spent.

 

"We are always ready to make the balance sheet available for all Nigerians
and the National Assembly. We have nothing to hide."

 

President Buhari said the administration had given more attention to
agriculture in order to diversify and strengthen the economy.

 

"We are still grateful to Morocco for the support they gave us in producing
fertilizer in the country.

 

We have 42 companies producing fertiliser in six geopolitical zones."

 

The President's registration exercise in Daura was attended by the Senate
President, Ahmad Lawan, former Senate President, Ken Nnamani, ten governors,
including the Governor of Yobe State, Mai Mala Buni, who is the Chairman of
the APC Caretaker Committee, and other party stalwarts.-Leadership.

 

 

 

 

 

 

 

 

 


 


 


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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