Major International Business Headlines Brief::: 08 February 2021

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Major International Business Headlines Brief::: 08 February 2021

 


 

 


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ü  Chinese users flock to Clubhouse amid soaring popularity

ü  Tesco tells Chancellor to hit online rivals with sales tax

ü  Boohoo tells suppliers not to subcontract, raising job fears

ü  Rolls Royce plans summer shutdown to help cut losses

ü  Amazon criticised in paying lower rates than shops

ü  South Africa: Eskom Blackouts - Blame It On the Rain...

ü  Nigeria Lists Conditions MSMEs Must Meet to Enjoy New Support

ü  Kenya: Coffee Farmers Fail to Apply for the Sh3bn Cherry Fund

ü  Ethiopia: State Minister Tsion Teklu Discusses With Russian Investment
Mission

ü  Ethiopia: Ministry Needs 3-Trillion Birr for Infrastructural
Dev'tministry Needs 3-Trillion Birr for Infrastructural Dev't

ü  U.S. Treasury Secretary Yellen: Too soon to say if changes needed to
address market volatility

ü  Americans take to 'buy now, pay later' shopping during pandemic, but can
they afford it?

ü  Asian shares, oil buoyant on economic revival hopes

ü  Renesas Electronics says in talks about $6 billion acquisition of Dialog
Semiconductor

ü  Blackstone invests in new hedge fund ApaH Capital, sources say

ü  Hyundai, Kia shares dive as automakers puncture investor dream of Apple
car tieup

 

 

 


 <https://www.facebook/Hyundaizimbabwe/> 

 


 

Chinese users flock to Clubhouse amid soaring popularity

Audio-only social network iPhone app Clubhouse has seen an explosion of new
users in the last week, including Chinese people discussing politics.

 

According to mobile analytics firm Sensor Tower, the app was downloaded 2.3
million times by 31 January.

 

The chat app is free, but currently invite-only.

 

However, Chinese users are paying up to $77 (£56) for invitations from
e-commerce sites, according to the FT.

 

Clubhouse was launched in May and valued at almost $100m. The app allows
users to join and participate in pop-up public or private audio chatrooms.

 

Conversations are not recorded, which theoretically ensures privacy,
although some interviews of celebrities and influencers have been secretly
recorded and uploaded to YouTube.

 

Early adopters were mostly Silicon Valley technophiles and investors, but
the app's invite-only nature has created an exclusivity appeal that has seen
a raft of US celebrities join, including Oprah Winfrey, Ashton Kutcher,
Drake, Azealia Banks, Jared Leto and Tiffany Haddish.

 

But the app's downloads more than doubled in the last two weeks due to
popular tech moguls like Elon Musk and Mark Zuckerberg joining Clubhouse to
participate in interviews and talk shows.

 

After Mr Musk tweeted that he would be speaking live on the app, Clubhouse's
shares soared 117% on 1 February.

 

Freedom to discuss controversial topics

At the moment, Clubhouse is only available on the iPhone and can be accessed
in mainland China without the use of a virtual private network (VPN) to
bypass China's Great Firewall.

 

While many of the chatrooms are either private or have been deleted, over
the weekend thousands of Chinese users joined chatrooms on Clubhouse in
order to freely discuss topics that are considered to be taboo in China,
from the Hong Kong protests and the treatment of Uighurs in Xinjiang, to
heightening tensions between China and Taiwan.

 

Multiple Chinese users who witnessed the audio conversations in the app's
chatrooms took to Twitter to discuss what they were seeing.

 

 

User Arendt HuTong said on Twitter that he listened to a conversation
between Uighurs, journalists and Chinese "that were so sincere and peaceful
that it made me want to cry", while in another conversation, young people in
mainland China listened to the latest updates from people in Hong Kong and
expressed their sympathies.

 

"For Chinese users, the biggest significance of clubhouse is probably the
uncensored communication between ordinary people," he wrote on Twitter
(translated from Mandarin).

 

US-based podcaster Kaiser Kuo said that the chatrooms contained
"fantastically candid" comments.

 

 

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

 

He reported hearing mainland Chinese people discuss evidence of the human
rights violations against the Uighurs and whether what their government was
doing was right.

 

And while some of the comments were defensive of China and dismissive of the
problem, there were efforts made to listen to anecdotes by others, who spoke
of being detained in Xinjiang and having their passports confiscated.

 

It is unlikely that the Chinese government will continue to permit access to
Clubhouse for long, however.

 

Monetising Clubhouse

Although Clubhouse is currently invite-only, it is already offering a wide
range of audio-based activities, including live DJ sets, celebrity talk
shows and even speed dating.

 

While none of this is yet monetised, Clubhouse has plans to turn popular
users into influencers, according to the New York Times.

 

More than 40 Clubhouse influencers have been invited to a "Creator Pilot
Program" where they will attend regular meetings with the app's founders and
be given special access to new tools.

 

But the app has also been criticised for a lack of moderation.

 

A December article by Vulture declared that Clubhouse was "dangerously
close" to becoming a "new Internet wasteland", because conversations can
easily veer off-topic from their intended subject matter and debates can
turn into attacks - even against celebrities - if the moderators of the
chatrooms are not careful.

 

"It remains to be seen whether opening to the public will upend the
precarious balance between chaos and chill that the young app currently
enjoys; whether the many celebrity regulars will stick when the exclusivity
wears off and anyone can log in and call them out for takes that aren't
necessarily very deeply considered; and, most important, whether or not
we're only interested in an audio app that is, on a certain level,
replicating the experience of meeting strangers on '90s chat lines primarily
because we're all stranded at home and lonely," wrote Craig Jenkins.--BBC

 

 

 

Tesco tells Chancellor to hit online rivals with sales tax

Tesco has called for a 1% sales tax to be levied on online competitors like
Amazon.

 

Boss Ken Murphy has also joined bosses at Morrisons, Asda and Waterstones to
ask Chancellor Rishi Sunak for a "level playing field" when it comes to tax.

 

They say the current system puts retailers with large estates at a
disadvantage to online firms.

 

Retailers have not had to pay property-based business rates since the start
of the pandemic.

 

But the tax is due to restart in April.

 

The chief executives of 18 companies and groups have written to the
Chancellor warning that a return to the old system "will hamper the recovery
of the retail sector post-pandemic, potentially putting thousands of jobs at
risk".

 

Business rates are calculated by looking at a property's rateable value and
multiplying it by a tax rate set by the government. A new tax rate comes
into effect at the start of each financial year on 1 April.

 

According to figures from the Office for National Statistics (ONS),
full-year retail sales at physical shops for the 12 months ending 31
December 2020 fell 10.3% from £318.5bn in 2019 to £285.8bn.

 

Tax call

The group of 18 bosses stop short of asking for an online sales tax.

 

But Tesco has called for a 1% levy.

 

Last week Amazon was criticised for paying less in business rates than
British bricks and mortar retailers.

 

The online retail giant's financial results revealed that UK sales for 2020
totalled $26.5bn (£19.3bn) - a 51% jump from $17.5bn in 2019.

 

Amazon's overall business rates bill for 2020-2021 is estimated by
researchers to be £71.5m - just 0.37% of its retail sales.

 

Amazon insists that it pays its tax and has created thousands of jobs in the
UK.

 

Retail advisor Altus Group says that bricks and mortar retailers would have
paid £8.25bn in business rates in 2020, had they not been given a tax
holiday due to the pandemic.

 

It says the figure was calculated using rateable values, multiplied by the
2020 tax rate. The £8.25bn figure amounts to 2.9% of total retail sales,
which is much higher than what Amazon pays.

 

For instance, Arcadia - which owns Topshop, Burton and Dorothy Perkins -
would have had to pay £91m in business rates on its 444 stores in 2020, had
there not been a tax holiday, Altus Group says.

 

Amazon would not comment on the calculations made by Altus Group and CRR.

 

A spokesman for Amazon said: "We've invested more than £23bn in jobs and
infrastructure in the UK since 2010.

 

"Last year we created 10,000 new jobs and last week we announced 1,000 new
apprenticeships. This continued investment helped contribute to a total tax
contribution of £1.1bn during 2019 - £293m in direct taxes and £854m in
indirect taxes."

 

A Treasury spokesperson said: "We want to see thriving high streets, which
is why we've spent tens of billions of pounds supporting shops throughout
the pandemic and are supporting town centres through the changes online
shopping brings.

 

"Our business rates review call for evidence included questions on whether
we should shift the balance between online and physical shops by introducing
an Online Sales Tax. We're considering responses now and will update in due
course.

 

"The 2020 Spending Review also confirmed that the business rates multiplier
would be frozen in 2021-22, saving businesses in England £575 million over
the next five years."—BBC

 

 

Boohoo tells suppliers not to subcontract, raising job fears

Online fashion firm Boohoo has told its Leicester-based suppliers that they
must bring all clothes-making work in-house, either buying out or cutting
ties with sub-contractors.

 

The demand has caused concern among some suppliers about how they will pay
to hire new workers and rent space.

 

Boohoo has given them a deadline of 5 March to stop using outside labour.

 

The company says it is acting on recommendations of a highly critical report
published last year.

 

Boohoo hired barrister Alison Levitt QC to investigate following concerns
about worker welfare during the pandemic.

 

The report, published in September, said Boohoo had "capitalised on the
commercial opportunities offered by lockdown" but took no responsibility for
the consequences for those making the clothes they sold.

 

It recommended that "within six months Boohoo should reduce its approved
suppliers to a list which contains a manageable number of companies, ideally
without reducing capacity" with "the goal of reducing and ultimately
eliminating sub-contracting."

 

In an email to suppliers seen by the BBC, the company said all of its
suppliers in the city must "bring all finished goods manufacturing
in-house".

 

It said companies without "the expertise and knowledge to run a factory" or
the space must buy a manufacturing unit, or Cut, Make and Trim (CMT), as
they are known.

 

While it said those with questions about the process should contact the
company, it added that the move is "a mandatory requirement and not open to
negotiation."

 

A supplier who spoke to the BBC on condition of anonymity said he was
worried about jobs being lost, since the deadline is a month away and many
sub-contractors are based miles away.

 

Garment-makers in the city often farm out large orders of clothing to
smaller businesses.

 

The business is known to work on very thin margins, with each piece being
made for only a few pounds.

 

In the past factories in Leicester have been accused of paying less than the
minimum wage to workers.

 

"As we state in our letter to suppliers, the boohoo group is committed to
growing our business in a more sustainable and transparent manner. Working
with suppliers in a more strategic and sustainable way, is a key part of our
partnership approach to improve transparency, efficiency and
accountability," the company said in a statement to the BBC.

 

"One of the key recommendations from the Alison Levitt QC review was to
consolidate our supply chain. Supporting suppliers to bring their CMT units
in-house shortens our supply chain and is just one of the ways that we are
helping them to build stronger more sustainable businesses that can thrive."

 

The company declined to comment on what help would be offered by Boohoo for
suppliers to manage this change if they are struggling financially.--BBC

 

 

 

 

Rolls Royce plans summer shutdown to help cut losses

Rolls Royce is considering a plan to close its jet engine plants for civil
aircraft for two weeks in a bid to stem losses.

 

The engineering giant has suffered a drop in sales with fewer jets in the
air requiring servicing.

 

The plans are tentative as the company aims to thrash out an agreement with
unions.

 

The plan, first disclosed by the Sunday Telegraph, will not affect its
defence or energy divisions.

 

"As part of the agreement reached with the union last summer we agreed in
principle to enter into negotiations about delivering a 10% productivity and
efficiency improvement across our Civil Aerospace operations in the UK,"
Rolls Royce said in a statement.

 

"We have now begun complex and constructive discussions with the union on
how this can be achieved."

 

No date has yet been set. The company aims to spread the wage hit through
the year.

 

It would be the first temporary shutdown for the firm since at least the
1980s, when the firm was re-privatised.

 

The company is shying away from a blanket use of the furlough scheme, it
said.

 

"We are continuing to use the UK Government Coronavirus Job Retention Scheme
- and similar schemes elsewhere in the world - across areas of Civil
Aerospace where workload has significantly reduced as a result of Covid," it
said.

 

"However, unilaterally claiming furlough for all employees across the UK
Civil Aerospace business in a pre-planned way is not consistent with the
intent - nor is it, we believe, within the spirit - of the scheme, as
workload is not impacted across all areas."

 

Last month the company said it expects to get through more cash than
expected this year because planes powered by its engines fly less amid the
pandemic.

 

The company, already slashing billions of pounds in costs, expects £2bn of
cash to leave the business in 2021, more than double forecasts.

 

It is paid on the number of hours its engines are in use, so the Covid
restrictions hit its revenues.

 

New strains of the coronavirus are also making predictions harder, it said
at the time.--BBC

 

 

 

Amazon criticised in paying lower rates than shops

Amazon has been criticised for paying less in business rates than British
bricks and mortar retailers.

 

The online retail giant's financial results revealed that UK sales for 2020
totalled $26.5bn (£19.3bn) - a 51% jump from $17.5bn in 2019.

 

Amazon's overall business rates bill for 2020-2021 is estimated by
researchers to be £71.5m - just 0.37% of its retail sales.

 

They say this is far lower than what the retail sector typically pays.

 

Amazon insists that it pays its tax and has created thousands of jobs in the
UK.

 

Business rates are calculated by looking at a property's rateable value and
multiplying it by a tax rate set by the government. A new tax rate comes
into effect at the start of each financial year on 1 April.

 

According to figures from the Office for National Statistics (ONS),
full-year retail sales at physical shops for the 12 months ending 31
December 2020 fell 10.3% from £318.5bn in 2019 to £285.8bn.

 

Retail advisor Altus Group says that bricks and mortar retailers would have
paid £8.25bn in business rates in 2020, had they not been given a tax
holiday due to the pandemic.

 

It says the figure was calculated using rateable values, multiplied by the
2020 tax rate. The £8.25bn figure amounts to 2.9% of total retail sales,
which is much higher than what Amazon pays.

 

For instance, Arcadia - which owns Topshop, Burton and Dorothy Perkins -
would have had to pay £91m in business rates on its 444 stores in 2020, had
there not been a tax holiday, Altus Group says.

 

A Treasury spokesman said: "We want to see thriving high streets, which is
why we've spent tens of billions of pounds supporting shops throughout the
pandemic and are supporting town centres through the changes online shopping
brings.

 

"Our business rates review call for evidence included questions on whether
we should shift the balance between online and physical shops by introducing
an online sales tax. We're considering responses now."

 

Separately, the Centre for Retail Research (CRR) calculated the business
rates paid by physical shops in 2019 and found that they paid £7.17bn in
business rates, or 2.3% of their total retail sales in 2019.

 

The two organisations said that Amazon, which has close to 100 sites in the
UK, including distribution warehouses and lockers on High Streets, is not
paying enough tax.

 

However, their calculations do not include corporation tax, which is
currently at 19% of profits.

 

Debate over digital services tax

Amazon would not comment on the calculations made by Altus Group and CRR.

 

A spokesman for Amazon said: "We've invested more than £23bn in jobs and
infrastructure in the UK since 2010.

 

"Last year we created 10,000 new jobs and last week we announced 1,000 new
apprenticeships. This continued investment helped contribute to a total tax
contribution of £1.1bn during 2019 - £293m in direct taxes and £854m in
indirect taxes."

 

The government is currently reviewing the way in which the business rates
system works, and is also separately considering a 2% tax on online sales
and services.

 

But business lobby group the Confederation of British Industry (CBI) has
warned that any tax rises would place additional pressure on businesses that
are already struggling due to the pandemic.--BBC

 

 

 

South Africa: Eskom Blackouts - Blame It On the Rain...

Despite Eskom's suspension of load shedding on Sunday, the power utility
could not rule out another blackout as continued maintenance, increased
demand and more rain pose a risk for more load shedding.

 

South Africans were given a reprieve from load shedding on Sunday but the
lights could go out again as Eskom continues to implement maintenance and
the rain that affected its coal supply is expected to continue.

 

The power utility announced that it would suspend load shedding from 8am on
Sunday after sufficiently improving generation capacity.

 

On Friday, Eskom said it would be implementing Stage 2 load shedding through
the weekend, after heavy rains in Mpumalanga and Limpopo affected the
transfer of coal to units.

 

"Since Friday evening, Eskom teams returned four generation units to service
at the Medupi Power Station as the coal constraints improved. Another two
units also returned to service during the same period while the emergency
generation reserves have sufficiently recovered," the power utility said in
a statement on 7 February.

 

#POWERALERT1

 

Eskom will be suspending loadshedding from 08:00 this morning as generation
capacity

 

recovers pic.twitter.com/BjdUhrlL0X

 

-- Eskom Hld SOC Ltd (@Eskom_SA) February 7, 2021

 

On Friday, the Lephalale area where Medupi and Matimba Power...Daily
Maverick.

 

 

 

Nigeria Lists Conditions MSMEs Must Meet to Enjoy New Support

This programme is designed to help boost the growth of 100,000 MSMEs spread
across the states.

 

A new programme by the Nigerian government to support 100,000 small and
medium businesses will commence on February 9.

 

The federal government announced that the registration for the Guaranteed
Off-take Stimulus scheme (GOS) and the general micro, small and medium
enterprise (MSME) grant will commence on February 9.

 

This was disclosed in a statement issued by the project delivery office of
the scheme on its Twitter page, Thursday.

 

UPDATE: Public Announcement on the Commencement of the Guaranteed Off-take
Stimulus Scheme and the MSME Grant.

The steering committee of the scheme chaired by Mariam Katagum, minister of
state for industry, trade and investment, said in the statement that the
portal would be opened on February 9, 2021.

 

The Guaranteed Off-take Stimulus scheme is aimed at protecting and
sustaining the incomes of vulnerable micro and small businesses by
guaranteeing the offtake of their products.

 

According to the statement, a total of 100,000 MSMEs will benefit from the
scheme.

 

Lagos will get 3,880; Kano, 3,280; Abia, 3,080; while the other states will
each have 2,640 beneficiaries.

 

Similarly, it said, a one-off grant of N50,000 will be given to each
qualified MSME as direct cash injection into their enterprise. This is
designed to help boost the growth of 100,000 MSMEs spread across the states.

 

Companies making the following products are expected to benefit from the
scheme: face mask, liquid soap, disinfectant, hand sanitiser and processed
foods.

 

Qualification criteria

 

According to the statement, to qualify for the scheme, an applicant must be
a Nigerian national, the business must be registered under Corporate Affairs
Commission (CAC) with at least a business name certificate, must have a bank
verification number (BVN) and bank account number, must have at least two
staff and must be ready to produce under National Agency for Food and Drug
Administration and Control (NAFDAC) and Standards Organisation of Nigeria
(SON) specifications.

 

In the statement, the committee warned Nigerians to beware of fraudsters as
the registration is absolutely free.

 

For further details visit: www.survivalfund.gov.ng, the statement
said.-Premium Times.

 

 

 

Kenya: Coffee Farmers Fail to Apply for the Sh3bn Cherry Fund

Billions of shillings meant to revive coffee farming in the country are
lying idle in banks.

 

According to the Agriculture Cabinet Secretary Peter Munya, majority of
farmers have failed to borrow money from the Cherry Advance Revolving Fund,
frustrating the government's effort to revive the ailing sub-sector.

 

Speaking at Kathakwa Coffee Factory in Embu County, Mr Munya accused
officials of growers' societies of refusing to enlighten farmers on the need
to borrow the money which has a low interest rate of three per cent.

"We have Sh3 billion cherry advance revolving fund in the banks but farmers
are not applying for it. The (societies') officials are to blame," he
lamented.

 

The CS pleaded with farmers to fill application forms and submit them to the
New Kenya Planters Cooperative Union so that they can get cash for inputs
and harvesting their coffee.

 

Filling forms

 

But some cooperatives in Nyeri are being forced to pay youths to fill the
application forms on behalf of the farmers, citing complexity and bulkiness.

 

"The filling of forms is taking too long to complete and nine pages are too
much for an average farmer. We are paying Sh400 for each form to be filled
in a process taking over two weeks, to cover all the farmers," said Mr
Charles Karinga, the chairman of Kiawamururu factory CBO.

 

On the other hand, Othaya Cooperative chairman James Gathua said the
government should set up an easy and efficient system that will speed up the
application of the money for each farmer.

"They better revise it and find an easy way to remit the funds to the
farmers," he said.

 

CS Munya threatened to have cooperative society managements, whose officials
are frustrating farmers, dissolved.

 

"The officials should furnish farmers with loan application forms or else
they will face my wrath," he said.

 

Revive coffee farming

 

Mr Munya said the government is determined to revive coffee farming at
whatever cost.

 

"We are investing heavily in the coffee sector so that farmers can have
better returns to be able to eke out a living," he added.

 

Mr Munya accused the society officials of misleading the farmers to borrow
loans in banks and private millers where they have personal interests.

 

He noted that the banks and millers advance farmers loans at very high
interest rates and this makes it impossible for them to pay up or make
profits.

 

"What is happening in cooperatives is unacceptable. Farmers should go for
the cherry fund whose interest is friendly," said Mr Munya.

 

On the other hand, farmers in Nyeri claim the Sh20 advance payment per
kilogramme of coffee is too little and that the government should increase
it to Sh30 per kilogramme to ensure that farmers manage to cultivate their
farms after picking season is over.

 

"They should increase the money to Sh30 while maintaining the same interest
so that farmers can do more," noted Mr Gathua.

 

New KPCU Chairman Henry Kinyua said that farmers are reluctant to borrow the
money due to lack of sufficient sensitisation caused by the Covid-19
pandemic and initial court cases, lack of cooperation by leaders of coffee
cooperatives, misunderstanding that farmers must belong to the New KPCU and
low production.

 

"This season's production was significantly low and farmers are opting to
have the coffee they harvested sold before they can start borrowing," he
said.-Nation.

 

 

Ethiopia: State Minister Tsion Teklu Discusses With Russian Investment
Mission

After receiving a delegation of Russian investors from St. Petersburg city
at her office today this week State Minister Tsion Teklu has made meaningful
discussion with them.

 

According to MoFA, State Minister Tsion thanked the investors for making
Ethiopia an investment destination and said this was a good gesture to
cement the already strong relationship that exists between Ethiopia and
Russia.

 

While their speaking at length about the favorable conditions for investment
in Ethiopia the State Minister underscored that the government would provide
all necessary support to ensure that the Russian investors are successful in
the sectors they decided to involve in.

The head of the delegation, Mark Ruslan, on his part, said he was delighted
with the warm welcome accorded to the Russian delegation by several
government institutions in Ethiopia.

 

He further said his delegation had fruitful discussions with the Minister of
Mines and Petroleum, the Minister of Trade and Industry, the Minister of
Urban Development and Construction, Ethiopia's Investment Commission, and
the Ethiopian Chamber of Commerce and Sectorial Associations.

 

The delegation has decided to invest in three different projects, he said
and has already agreed to work with sectors that work on Energy, Innovation,
and Trade. According to Mr. Ruslan, the investment group will start
operations in Ethiopia in the next three months.

 

The group has business engagements in various countries, and it is actively
involved in the tourism sector in Djibouti, it was learnt.-Ethiopian Herald.

 

 

Ethiopia: Ministry Needs 3-Trillion Birr for Infrastructural Dev'tministry
Needs 3-Trillion Birr for Infrastructural Dev't

Minister of Transport disclosed that some three trillion Birr investment is
required for the realization of transport sector 10-year development plan.

 

Speaking during 'Policy Matters' interview series', Transport Minister
Dagmawit Moges stated that huge finance is required for a joint venture and
active participation of foreign investors and private sector as the sole
effort of the government doesn't suffice to achieve the plan in the
transport sector.

 

Infrastructure development is the major shift that has to be realized in 10
year-development plan apart from creating access to address quality issues,
which is an element of SDGs, it was learnt.

 

In due course of running towards attaining the ten-year development plan,
international standards that have been set for infrastructure development
like constructions of roads, railway lines, inland and aviation sectors into
consideration, she said.

The Minister said, "We have identified 20 projects within a semi-annual
performance, but many more projects will be singled out in the future. We
will also have different platforms where we will be able to introduce
projects, which could be buttressed in the form of Public-private
partnership incorporating foreign investors, too, according to the Minister.

 

The transport sector is enabler in its nature. Hence, the ministry has
planned in association with various ministries and institutions because 30
to 40 percent is all about mobility in urban centers.

 

Such moves are instrumental in supporting the entire national economy in due
process of supplying logistics in the years to come as the plan is designed
in such away.

 

"We are preparing a 30-year transport master plan, which is expected to be
wrapped up in the coming few months. Besides, the master plan is believed to
enhance integration of actions in all modes of transportation."

 

"The volume of import and export is significantly increasing from time to
time; even this year, we have a plan to make an import and export of nearly
17 million metric ton of produces, which is huge in number to create
coordination among different stakeholders," she said.

 

She further said, if the logistics system is made more efficient, the
country can be a hub for the neighboring African countries and get advantage
of creating employment opportunities via enhancing services and other
related accompanies," she underlined.-Ethiopian Herald.

 

 

U.S. Treasury Secretary Yellen: Too soon to say if changes needed to address
market volatility

WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen said on Sunday
that it is too soon to say whether new policies or regulations are needed to
deal with recent market volatility.

 

“We really need to understand exactly what happened and the Securities and
Exchange Commission (SEC) is working hard to assemble a report that gives us
the facts, and when we have them we can look at whether or not there were
issues that need to be addressed through new policy or regulations,” Yellen
told CNN’s “State of the Union” program.

 

A swarm of buying by amateur traders over the past two weeks sparked big
moves in shares of companies such as video game retailer GameStop Corp that
hedge funds had bet against. Some framed it as a battle between Wall Street
and Main Street.

 

Yellen convened a meeting on Thursday of the SEC, the Commodities Futures
Trading Commission, the Federal Reserve Board and the Federal Reserve Bank
of New York to discuss retail trading and whether the U.S. government needed
to take any action on the matter.

 

 

Americans take to 'buy now, pay later' shopping during pandemic, but can
they afford it?

(Reuters) - When Leondra Garrett wanted to stock up on three new pairs of
shoes early last year, the North Carolina resident split a $161 online
purchase into four installments through a “buy now, pay later” service, in
what seemed like a convenient deal.

 

Now, she admits she should have read the small print about missed payments.

 

When the buy now, pay later (BNPL) provider tried to withdraw a payment from
Garrett’s bank account a few months later, she didn’t have enough funds to
cover it. Soon after, the 42-year-old was charged $40 in penalties and her
credit score dropped 10 points to 650, a reading generally classified as
‘fair’.

 

“It’s important for consumers to always read the fine print and we don’t
always do it,” said Garrett, a community organizer from Charlotte.

 

So-called buy now, pay later services - offered by providers such as Affirm
Holdings Inc, Klarna, Afterpay Ltd and PayPal Holding Inc’s “Pay In 4” -
have blossomed across retail websites during the coronavirus pandemic as
people have turned more to shopping online.

 

Yet the ease with which many shoppers can make purchases is worrying some
regulators around the world, who fear consumers may be spending more than
they can afford.

 

Nearly 40% of U.S. consumers who used “buy now, pay later” have missed more
than one payment, and 72% of those saw their credit score decline, according
to a study by Credit Karma, which offers customers credit score checking for
free.

 

The study, conducted for Reuters, surveyed 1,038 adult consumers in the
United States to gauge interest in “buy now, pay later” and found 42% of
respondents had used the service before.

 

“The percentage of consumers missing payments is remarkable and not as low
as you would expect,” said Gannesh Bharadhwaj, general manager for credit
cards at Credit Karma.

 

“When you make something so convenient, people may not be really thinking,
‘Do I have the budget? Can I afford this payment?’ You get more of that
impulse-shopping behavior that leads to realizing they may not be able to
make the payment.”

 

A lower credit score signals to lenders that a consumer may be higher risk
and makes it harder for the consumer to borrow, whether to secure a mortgage
or a new credit card. It can even make it more difficult for a consumer to
set up utility accounts or find housing, as landlords will generally conduct
credit score checks before renting out apartments.

 

Management consultants Oliver Wyman estimate BNPL firms facilitated between
$20 billion-25 billion in transactions in the United States last year,
although analyst estimates on the size of the BNPL industry vary because it
is relatively new and some of the companies are private. Individually, they
described explosive growth last year as their services became more
prevalent.

 

Australia-based Afterpay said it saw active U.S. customers more than double
to 6.5 million in the fiscal year ended June 30, 2020, and its sales more
than tripled in the July-September quarter from a year earlier.

 

Over half of Afterpay’s customers in the United States are millennials, aged
25 to 40 years-old, it said.

 

BNPL models vary, with some companies earning most profits by collecting
fees from merchants at the point of sale, and others charging interest and
late fees to consumers. They say their services help merchants to boost
sales and consumers to buy things they need, and cause less financial damage
than credit cards because of restrictions they impose.

 

Nonetheless, regulators in Britain and Australia are reviewing or tightening
rules around the industry. BNPL service providers, classified as fintech
companies, should be subject to stricter rules more like banks, some
regulators say.

 

It is unclear how buy now, pay later fits into U.S. regulations because the
companies that offer these services do not have bank charters, some do not
charge interest and laws vary by state. However, some experts expect the
sector to come under more scrutiny during the Biden administration.

 

“One of the questions with the new administration is, what stance will the
Consumer Financial Protection Bureau take going forward? – which we expect
to be more aggressive,” said Mark Palmer, financials analyst at BTIG
Research.

 

San Francisco-based Affirm saw its revenue rise 93%, to $509.5 million, in
the fiscal year that ended in June. It allows shoppers to split up purchases
in terms ranging from six weeks to four years, with interest rates of 0 to
30%.

 

Affirm shows customers how much a loan will cost in dollar terms and does
not charge late fees or compound interest. Although missed payments can
affect credit scores, Affirm says it has been working with borrowers who
fell on hard times during the pandemic.

 

“We approve borrowers only for what they can comfortably afford to repay,”
said Silvija Martincevic, Affirm’s chief commercial officer. “The reason our
technology is significant is that we use machine learning to make
underwriting decisions.”

 

At Australia’s Afterpay, customers are barred from using its services after
they miss a payment.

 

The company says 95% of its transactions globally are paid back on time and
late fees contribute less than 14% of the company’s total income.

 

PayPal ‘Pay in 4’ service, launched widely across the United States in
November, allows customers to split purchases ranging from $30 to $600 in
four interest-free payments. Late fees may apply for missed payments,
depending on the user’s state of residency, according to its website.

 

The PayPal ‘Pay in 4’ product in the United States does not report trades or
late fees to the credit bureaus, said Greg Lisiewski, PayPal’s global vice
president of Global Pay Later.

 

“We are working with the industry and the consumer credit bureaus to develop
the appropriate framework,” he said.

 

Sweden-based Klarna saw fast growth over the past year, especially purchases
in the $100-$200 range, said its U.S. head, David Sykes.

 

Most of Klarna’s loans are small, of short duration and interest-free, which
is safer for customers than credit cards, he said. Customers can delay one
payment without a penalty. Late fees vary by state in line with regulation,
up to a maximum of $21 and the company is rolling out a 25% cap.

 

“No one is getting buried in debt with Klarna,” Sykes said. “We aren’t
making multi-year loans on a car or a house.”

 

Smaller loans with shorter durations do have benefits, but they are not
risk-free, experts said. Customers may be taking on more debt than they can
handle, even if it comes in bite-sized portions.

 

Tamika Rivera, a 35-year old insurance agent from Springfield,
Massachusetts, uses multiple buy now, pay later services, and has missed
payments. In one case, she did not have enough money to cover a $43 sweater
purchase, which resulted in a $35 overdraft fee from her bank.

 

“These services are convenient but there are some negative things that can
happen,” Rivera said.

 

Alan McIntyre, head of Accenture’s global banking practice, says the credit
impact of the buy now, pay later trend remains to be seen.

 

“The optimistic take is that millennials don’t want to get into debt and
they want to build a budget better – this is deferred debit and you are not
tempted to roll it over,” he said.

 

“The pessimistic view is that around 40% of people using it are doing so
because they couldn’t get access to traditional credit - either because
they’ve maxed out their credit limit or because of a poor or non-existent
credit history - and some of these loans might not season well.”

 

 

 

Asian shares, oil buoyant on economic revival hopes

SYDNEY (Reuters) - Asian shares hovered near record highs on Monday while
oil edged closer to $60 a barrel on hopes a $1.9 trillion COVID-19 aid
package will be passed by U.S. lawmakers as soon as this month just as
coronavirus vaccines are being rolled out globally.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan was last up 0.3%
at 717.2 after climbing as high as 730.16 late last month.

 

Japan’s Nikkei jumped 2% while Australian shares advanced 0.8% led by
technology and mining shares. Chinese shares were mildly positive with the
blue-chip CSI300 index up 0.1%.

 

E-mini futures for the S&P 500 added 0.4% in early Asian trading.

 

Hopes of a quicker economic revival and supply curbs by producer group OPEC
and its allies pushed oil to its highest level in a year as it edged near
$60 a barrel.

 

Global equity markets have scaled record highs in recent days on hopes of
faster economic revival led by successful vaccine rollouts and expectations
of a large U.S. pandemic relief package.

 

On Friday, the Nasdaq and S&P 500 hit all-time highs on
stronger-than-expected corporate results in the fourth quarter and as
companies were on track to post earnings growth for the first quarter
instead of a decline.

 

The rallies came even as U.S. data painted a dour picture of the country’s
labour market with payrolls rising by 49,000, half of what economists were
expecting.

 

The weak report spurred the push for more stimulus, underscoring the need
for lawmakers to act on President Joe Biden’s $1.9 trillion COVID-19 relief
package.

 

Biden and his Democratic allies in Congress forged ahead with their stimulus
plan on Friday as lawmakers approved a budget outline that will allow them
to muscle through in the coming weeks without Republican support.

 

U.S. Treasury Secretary Janet Yallen predicted the United States would hit
full employment next year if Congress can pass its support package.

 

“That’s a big call given full employment is 4.1%, but one that will sit well
with the market at a time when the vaccination program is being rolled out
efficiently in a number of countries,” said Chris Weston, Melbourne-based
chief strategist at Pepperstone.

 

Expectations of a U.S. economic recovery have not boosted the greenback
though, “because this shift in prospects is seen by the market as part of a
global recovery,” Westpac economists wrote in a note.

 

“Investors therefore favour risk taking, and so value the safety of the U.S.
dollar less.”

 

Indeed, the greenback came off a four-month high against the Japanese yen to
be last at 105.49.

 

The euro was a tad weaker after rising 0.7% on Friday to a one-week high of
$1.2054. It was last at $1.2034.

 

The risk-sensitive Australian dollar eased from a one-week high to $0.7675.

 

In commodities, Brent crude and U.S. crude climbed 59 cents each to $59.93
and $0.57.44 respectively.

 

U.S. gold futures were up 0.1% at $1,815.4 an ounce.

 

 

Renesas Electronics says in talks about $6 billion acquisition of Dialog
Semiconductor

TOKYO (Reuters) - Japan’s Renesas Electronics Corp said it is in talks with
Dialog Semiconductor GmbH about a potential acquisition that would value the
Frankfurt-listed Apple Inc supplier at around $6 billion.

 

Renesas in a statement through the Tokyo Stock Exchange said it was in talks
to buy Dialog for 67.50 euros a share, and that regulations meant it would
have to disclose any intention to purchase by March 7.

 

 

Blackstone invests in new hedge fund ApaH Capital, sources say

BOSTON (Reuters) - Blackstone Group, the world’s largest hedge fund
investor, is committing $150 million in start-up capital to a hedge fund run
by a former senior executive at Lone Star Funds, two sources familiar with
the matter said.

 

Hong Kong-based ApaH will concentrate on public and private market
investments across Asia, including in Australia, China, India and Japan.

 

Madduri did not respond to requests for comment.

 

Blackstone declined to comment.

 

Madduri was a senior managing director at Lone Star Funds for five years and
spent seven years at Och-Ziff Capital Management, where he rose to managing
director.

 

Blackstone, which invests $79 billion in hedge funds, is making the
investment with cash from its $1.5 billion Strategic Alliance Fund III which
backs new entrants into the hedge fund industry.

 

Blackstone has seeded Palm Lane Capital, Tresidor Investment Management and
Jones Road Capital Management among others from Fund III.

 

Blackstone’s seeders take a 15% to 25% cut of the hedge fund’s business,
people familiar with the terms said.

 

Securing seed investments from Blackstone often helps new managers establish
credentials and get up and running, while it allows Blackstone to get in on
the ground floor with promising newcomers.

 

 

 

Hyundai, Kia shares dive as automakers puncture investor dream of Apple car
tieup

SEOUL (Reuters) - South Korea’s Hyundai Motor Co said on Monday it is not
now in talks with Apple Inc on autonomous electric cars, just a month after
it confirmed early-stage talks with the tech giant, sending the automaker’s
shares skidding.

 

Wiping $2.1 billion off its market value, Hyundai’s stock slumped 4.2% by
0330 GMT. Shares in its affiliate Kia Corp, which had been tipped in local
media reports as the likely operational partner for Apple, tumbled 12% - a
$4.3 billion hit.

 

The announcement brings the curtain down on weeks of internal divisions
within Hyundai Motor Co Group - parent to both automakers - about the
potential tieup, with some executives raising concerns about becoming a
contract manufacturer for the U.S. tech giant.

 

“We are receiving requests for cooperation in joint development of
autonomous electric vehicles from various companies, but they are at early
stage and nothing has been decided,” the automakers said on Monday, in
compliance with stock market rules requiring regular updates to investors
regarding market rumours.

 

“We are not having talks with Apple on developing autonomous vehicles.”

 

Kia shares had jumped 61% after Hyundai appeared to confirm a local media
report early in January that Apple and Hyundai were in discussions to
develop self-driving electric vehicles by 2027 and develop batteries at U.S.
factories operated by either Hyundai or Kia.

 

“Apple and Hyundai are in discussion, but as it is at early stage, nothing
has been decided,” Hyundai said, before releasing subsequent statements that
removed all mentions of Apple but said Hyundai was receiving electric car
cooperation requests from parties it didn’t identify.

 

Reuters reported in December that Apple was moving forward with autonomous
car technology and aimed to produce a passenger vehicle that could include
its own breakthrough battery technology as early as 2024.

 

Apple, known to keep product plans under tight wraps, has never acknowledged
talks with the automaker about building vehicles, and wasn’t immediately
available for comment outside business hours in the United States.

 

Analysts said talks might have collapsed over leaks of the partnership plan
to media, or over possible insistence by Apple that Hyundai’s role in any
tieup would be that of an equipment manufacturer, rather than a strategic
partner.

 

“With numerous news reports over discussions between the two companies,
which should have been held to non-disclosure agreements, it would have been
uncomfortable” said Kwon Soon-woo, an analyst at SK Securities.

 

Kevin Yoo, an analyst at eBEST Investment & Securities, said, “It seems
clear that Hyundai Motor Group has not been too happy with dealing with
Apple ... They made it clear that they do not want to be treated just as
Apple’s supplier or manufacturer.”

 

 

 

 

 

 

 


 


 


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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<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

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