Major International Business Headlines Brief::: 17 February 2021

[Bulls n Bears]

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Major International Business Headlines Brief::: 17 February 2021

 


 

 


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ü  China overtakes US as EU's biggest trading partner

ü  Black McDonald's owner sues for racial discrimination

ü  Bitcoin hits new record of $50,000

ü  Brexit: NI Protocol is 'only solution' despite challenges

ü  Asda: How to buy a £6.8bn supermarket for £780m

ü  Citi loses fight to recoup mistaken payments

ü  ByteDance not in preliminary talks to list TikTok on NYSE: source

ü  Handful of hedge funds bet big on GameStop before its wild ride

ü  New York attorney general sues Amazon over COVID-19 shortfalls

ü  Oil steady amid Texas supply disruptions, potential OPEC+ moves

ü  Exclusive: BP offers employees shares in rallying cry for low-carbon shift

ü  Nestle to sell N.American water brands for $4.3 billion, focus on premium lines

ü  Tanzania: Gold Industry Set for Giant Leap

ü  Tanzania: Zanzibar Attracts 700 Investment Projects

ü  Uganda: Bank of Uganda Extends Credit Relief Measures to Banks for More 6 Months

ü  Mozambique: Are Ruby Mine Resettled Families Getting Luxury $95,000 Houses?

 

 

 


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China overtakes US as EU's biggest trading partner

China is now the EU's biggest trading partner, overtaking the US in 2020.

 

China bucked a wider trend, as trade with most of Europe's major partners dipped due to the Covid-19 pandemic.

 

Trade between China and the EU was worth $709bn (€586bn, £511bn) last year, compared with $671bn worth of imports and exports from the US.

 

Although China's economy cratered in the first quarter due to the pandemic, its economic recovery later in the year fuelled demand for EU goods.

 

China was the only major global economy to see growth in 2020, stoking demand for European cars and luxury goods.

 

Meanwhile, China's exports to Europe benefited from strong demand for medical equipment and electronics.

 

"In the year 2020, China was the main partner for the EU. This result was due to an increase of imports (+5.6%) and exports (+2.2%)," according to Eurostat, the EU's statistical office.

 

The figures were similar to China's official data published in January, which showed trade with the EU grew by 5.3% to $696.4bn in 2020.

 

The EU's trade deficit with China also grew from $199bn to $219bn according to Eurostat figures, which were released on Monday.

 

Trade with US and UK slumps

Although the US and the UK remain the EU's largest export markets, trade with both countries dropped significantly, the statistics showed.

 

"Trade with the United States recorded a significant drop in both imports (-13.2%) and exports (-8.2%)," the data agency said.

 

Transatlantic trade has been hit by a series of tit-for-tat disputes that have resulted in tariffs on steel and products such as French Cognac or American Harley-Davidson motorcycles.

 

In 2020, the US had a trade volume of $671bn with the EU, down from $746bn the previous year.

 

It's not year clear if new US President Joe Biden will re-evaluate the US approach to trade with Europe.

 

The EU and China, however, are trying to deepen their economic ties, with both sides seeking to ratify an investment deal that would give European companies better access to the Chinese market.

 

Analysts are tipping global trade to turn around in 2021 after a lacklustre 2020.

 

The real value of global trade is set to rise by 7.6% after an an estimated contraction of 13.5% in 2020 to $16.4tn, according to research firm IHS Markit.--bbc

 

 

 

Black McDonald's owner sues for racial discrimination

A former professional baseball player who was once the largest black McDonald's operator in the US has sued the company for racial discrimination.

 

Herb Washington said the firm had denied black owners the opportunities it gave to whites, including by steering them to stores to "distressed, predominantly black" areas.

 

He accused the company of retaliating against him after he raised concerns.

 

McDonald's blamed his troubles on "mismanagement".

 

In a statement, the firm said it was reviewing the complaint, adding that Mr Washington was facing "business challenges that we don't want for anyone in our system."

 

"This situation is the result of years of mismanagement by Mr Washington, whose organisation has failed to meet many of our standards on people, operations, guest satisfaction and reinvestment," the company said.

 

"His restaurants have a public record of these issues, including past health and sanitation concerns, and some of the highest volumes of customer complaints in the country."

 

'Two-tiered system'

McDonald's has faced similar claims from black franchise owners before. In a lawsuit last year, more than 50 former franchise owners accused the company of steering them to stores in less desirable neighbourhoods.

 

Mr Washington, who opened his first McDonald's franchise in 1980 at the age of 29 after a brief stint playing for the Oakland Athletics, said the firm had repeatedly hindered his business.

 

That included by blocking him from buying stores from a white franchise owner and denying him financial assistance comparable to that offered to white operators.

 

Despite the challenges, Mr Washington said he at one point ranked as the company's largest black operator in the US, with 27 restaurants. He continues to own 14 stores.

 

"I always held out hope that they would live up to their promises and put an end to a two-tiered system," he said at a press conference announcing the lawsuit, which was filed in federal court in Ohio. "I believed that McDonald's was going to do the right thing."

 

Since 2017, he said the company had targeted him for "extinction" in retaliation for his speaking up about racial disparities, pushing him to sell certain stores in exchange for contract extensions on others.

 

At the press conference, he rejected the firm's characterisation of his business, saying that McDonald's wouldn't have allowed him to be a franchisee for 40 years if he were consistently "bringing down the brand".

 

"When I stood up for myself and other black franchisees, McDonald's began to dismantle my life's work," he said. "I didn't quit on McDonald's. McDonald's quit on me."

 

'Racist policies and practices'

In his lawsuit, Mr Washington said the company's discriminatory policies worsened after British-born Steve Easterbrook took over in 2015.

 

Mr Easterbrook was fired from the company in 2019 for having a consensual relationship with a subordinate in violation of the firm's policies.

 

During his tenure, the company implemented remodelling initiatives that were "designed to force black franchisees out of the McDonald's system," the lawsuit says.

 

The number of black McDonald's franchisees in the US has dropped from 377 to 186 since 1998, the lawsuit says. It also says black-owned restaurants average $700,000 less in sales annually than white-owned ones.

 

"These numbers are not a coincidence; they are the result of McDonald's intentionally racist policies and practices toward black franchisees," the lawsuit says.

 

McDonald's, which announced a diversity initiative in July amid the Black Lives Matter protests, said performance at black-owned restaurants had improved and it did not place franchisees in specific locations, but made recommendations.

 

It added that the company had taken steps to reduce the number of overall number of operators across all demographic groups as part of a restructuring initiative. Nearly 30% of its franchises are "ethnically diverse", it said.--bbc

 

 

 

Bitcoin hits new record of $50,000

Digital currency Bitcoin has risen to a new record high of more than $50,000 (£36,000).

 

The so-called cryptocurrency, which was created by an unknown inventor, has risen about 72% this year.

 

Bitcoin and other cryptocurrencies are generated by computers. Part of its supposed value comes from the finite number that can be computed.

 

But regulators have warned that they are risky, since their value can change fast, both downwards and upwards.

 

Much of this year's gain for Bitcoin came after Elon Musk's Tesla bought $1.5bn of them and said it would accept them as payment for its cars.

 

Supporters say Bitcoin can act as a store of value, like a digital version of gold.

 

"If that narrative comes to fruition, then the growth potential is off the charts as $50,000 per bitcoin equates to a market cap of roughly $931bn, which is almost 9% of gold," said John Wu, president at blockchain company Ava Labs.

 

"If BTC meets gold's market cap, then that would be at least $500,000 per bitcoin."

 

'Explosive growth'

Unlike other commodities, however, Bitcoin cannot be used for anything else, merely bought and sold. This has made attempts to value it difficult.

 

Pricing is also susceptible to large swings because of the limited number which are traded. Many supporters are holding on to them in anticipation of higher valuations. Should they all sell at once, the price could tumble.

 

With no intrinsic value, unlike a physical asset such as land, and no ability to generate an income, unlike a company or bond, cryptocurrencies are extremely volatile and can crash as fast as they rise.

 

Critics point out that while Bitcoin may have a finite supply of units - 21 million - the number of cryptocurrencies is ever-growing and potentially limitless.

 

People have lost large amounts of money in steep drops in the value of cryptocurrencies and in hacks and scams associated with them.

 

Britain's financial watchdog, the Financial Conduct Authority (FCA), opened 52 investigations into suspected cryptocurrency frauds in the year to 30 June 2020, according to a Freedom of Information request from law firm RPC.

 

That was fewer than the 59 opened in the previous 12 months, sparking speculation that the regulator was short of resources to tackle cryptocurrency frauds.

 

"Given explosive growth in high-risk cryptocurrency and related frauds, we would expect the number of FCA investigations to jump up and not fall away," said Sam Tate, partner at RPC.

 

"The sheen of respectability now being given to cryptocurrencies is being taken advantage of by cyber-criminals and online fraudsters."

 

The FCA declined to comment on the figures.

 

Bitcoin's value dropped by $5,000 on 4 January to about $29,000 before recovering the lost ground. On 11 Jan, it dropped $9,000 to $32,000.

 

Because cryptocurrencies can pass international borders quickly and are not regulated in the same way as cash or regular investments, investigating thefts is hard.

 

Last month, the FCA issued a stark warning to investors in so-called cryptoassets.

 

The financial watchdog said investors should be "prepared to lose all their money" should their investment's value collapse.--bbc

 

 

 

Brexit: NI Protocol is 'only solution' despite challenges

The introduction of the Northern Ireland Protocol has been "administratively extremely challenging", the European Commission's vice president has acknowledged.

 

Maros Sefcovic was speaking to the Irish Parliament's EU Affairs Committee.

 

He said despite the difficulties, the protocol remains the "only solution" to the issues Brexit presents for Ireland.

 

He added he will meet Northern Ireland business and civic leaders on Thursday.

 

In a tweet on Tuesday night, DUP leader Arlene Foster said Mr Sefcovic must talk to "those hardest hit" by the Northern Ireland Protocol and those who opposed it when he conducts his meetings later this week.

 

 

The Northern Ireland Protocol is the part of the Brexit deal which prevents a hardening of the land border between Northern Ireland and the Republic of Ireland.

 

It does that by keeping Northern Ireland in the EU single market for goods.

 

That has created a new trade border with Northern Ireland and the rest of the UK.

 

Mr Sefcovic was facing questions about the events, which led to the commission invoking Article 16.

 

It is an emergency measure which allows parts of the protocol to be set aside.

 

The commission proposed using it as part of its export control measures for Covid vaccines.

 

'We made the mistake'

The move provoked outrage across the political spectrum in Ireland and Northern Ireland.

 

Mr Sefcovic said a mistake was made and Article 16 was never actually activated.

 

"We made the mistake, we acknowledged it, we corrected it."

 

He said measures had been put in place to make sure it did not happen again.

 

This includes a "clearing house" through which all issues relating to Northern Ireland must be assessed and evaluated.

 

The UK government has asked the EU for a long extension of "grace periods" where not all aspects of the protocol, relating to checks on goods, have been implemented.

 

'Belfast masochists defending Brussels sadists'

Mr Sefcovic said the implementation of the protocol was a "two-way street" and the UK government has more to do.

 

He said that included giving the EU access to the UK's customs and trade IT systems.

 

The DUP MLA Christopher Stalford said the situation around the Northern Ireland Protocol is akin to a position where "we have Belfast masochists defending Brussels sadists".

 

His party opposes the protocol and is currently involved in a five-point plan of opposition.

 

Speaking at Stormont, his party colleague Diane Dodds, the Economy Minister, said the boycott of north-south meetings would continue and described the Irish government as "cheerleaders" of the protocol.

 

The party is staying away from meetings as part of their opposition to it.

 

She told MLAs it cannot be "business as usual" and that "delicate balances" created by the Belfast Agreement had been "thrown out the window".

 

Sinn Féin MLA Caoimhe Archibald said the minister should engage with businesses rather than being involved with "silly political stunts".

 

The SDLP MLA Sinead Bradley urged the DUP to end their boycott of north-south ministerial meetings.

 

Speaking in the Assembly, Sinead Bradley told Mrs Dodds that under the pledge of office it was "her duty to participate, not her choice".

 

Diane Dodds said she was carrying out her duties as minister and abiding by the pledge.

 

Earlier she criticised the introduction of the protocol and said it had caused a fissure in the UK internal market.--bbc

 

 

 

Asda: How to buy a £6.8bn supermarket for £780m

Asda has new owners.

 

The Issa brothers, two entrepreneurs from Blackburn who made billion-pound fortunes running petrol stations, have completed the deal to buy Britain's third-largest supermarket chain.

 

Asda was valued at £6.8bn, but the brothers and the investment firm TDR Capital paid just £780m.

 

The rest of the money was borrowed. So how does this kind of deal work? And will it leave Asda with too much debt?

 

How does the deal work?

This kind of deal is called a leveraged buyout - which means that it involves large amounts of debt.

 

TDR Capital specialises in this kind of deal. It is also co-owner of EG Group, the worldwide petrol station business which built the brothers' fortune, and which also has large borrowings.

 

The Issas and TDR each contribute half of the £780m in cash to Asda's former owners, Wal-Mart, which has owned Asda since 1999.

 

Most of the purchase price - just under £4bn - will be borrowed.

 

Walmart, the American supermarket which owned Asda for the past 21 years, will retain a small stake in Asda, for £500m, along with a seat on Asda's board.

 

Then the new owners will sell off parts of Asda to raise the rest of the purchase price.

 

Asda will sell its warehouses and distribution system for £950m. It will still use them, but in future, it will have to pay rent to their new owners.

 

And Asda's 323 petrol stations will be sold for £750m to EG Group, adding to the portfolio of more than 6,000 around the world.

 

The deal is still awaiting approval from the Competition and Markets Authority, which is expected by the summer.

 

Buying a £6.8bn business for less than £800m has certainly raised eyebrows, but it is not unusual for buyers to put up only a small fraction of the purchase price in such big deals.

 

"10% looks low, compared to the average for leveraged buyouts as a whole of around 50%," says Roberto Pozzi, senior vice-president at Moody's, an agency which analyses the riskiness of company's borrowings.

 

"Keep in mind that it depends also on the stability of the business, and there is no more stable business than supermarkets," he adds.

 

Firms such as TDR Capital, known as private equity firms, have backed nearly 5,000 buyout deals over the past decade, worth a total of £350bn, according to research firm Preqin - although the Asda buyout is the largest in more than a decade.

 

How much does Asda owe?

With big debts come fears that paying interest on the debt will suck money away from investing in the business or paying staff.

 

But interest rates are currently extremely low, which will made Asda's debt burden affordable.

 

On the £3.7bn of Asda's debt which is being raised on public markets, the interest bill will be just £125m a year, according to Azhar Hussain, head of global credit at the Royal London Asset Management. Leasing back the warehouses will cost about £57m a year.

 

So the £500m or so of cash which Asda makes each year will easily cover the interest costs incurred in the buyout, leaving plenty spare to pay down the debts and reduce Asda's borrowings even further.

 

The debt burden will be higher than supermarket rivals Tesco and Morrisons, but it's expected to fall over time as new owners pay the debts off.

 

Paying back borrowers will be less of an issue than competition from other supermarkets.

 

Asda may still find itself needing to cut costs, but not necessarily to pay back debts. "Every grocer is cutting costs anyway, because of competition," says Mr Pozzi.

 

"Now their plan is to become more efficient and put in place a lower cost structure, because that's what everybody is doing."

 

The Issa brothers are new to the hyper-competitive world of UK supermarkets and they will have to learn fast, at the same time as running a vast forecourt empire.

 

"It won't be easy and they will probably have to work harder to stand still," says Mr Pozzi.

 

As the third-largest supermarket in the UK, Asda has seen its market share fall as discounters Aldi and Lidl have grown.

 

Asda is behind in the fast-growing and profitable convenience store business, where Sainsbury's Local and Tesco Express have grown rapidly.

 

The new relationship with EG Group gives it a chance to open convenience stores in petrol stations.

 

Buyout deals can be extremely profitable for the new owners. Just suppose they pay 10% of the purchase price in cash. If they increase the value by 10%, all that increase in value goes to them, so they've doubled their money.

 

Big buyouts are often controversial. The GMB union, which represents Asda workers, said Asda was "a profitable company that does not need to be loaded with debt" and labelled the sale of the warehouses "asset-stripping".

 

There are stories of businesses where private equity buyouts have led to underinvestment and subsequent collapse. Debenhams is often cited as an example. But most of the thousands of private equity buyouts do not end that way.

 

Businesses with big debts pay much less tax on their profits. They can deduct the interest payments from their profits before calculating how much tax to pay, which reduces their corporation tax bill.

 

So that's a lower contribution to the costs of schools, hospitals and everything else taxes pay for.

 

Companies owned by private investors are not listed on the stock exchange, meaning private investors can't participate in its future success by buying shares.

 

However, many pension funds will still invest in the new Asda, either by lending their share of that £4bn of debt or investing in TDR Capital.—bbc

 

 

Citi loses fight to recoup mistaken payments

The recipients of roughly $500m (£360m) that US banking giant Citigroup wired erroneously will get to keep the money, a US judge has ruled.

 

Judge Jesse Furman said Citi was not entitled to recoup its funds, even though they were "indisputably transferred by mistake".

 

The bank was supposed to have sent interest payments on behalf of its client, Revlon, but instead fully repaid the cosmetic company's loans.

 

Citi said it would appeal the decision.

 

"We believe we are entitled to the funds and will continue to pursue a complete recovery of them," a spokeswoman said.

 

Citi, which was acting as an administrator for Revlon's 2016 loans, was supposed to send $7.8m in interest payments on behalf of the firm. Instead, last August, it wired nearly $900m to the firm's lenders - paying off its debts.

 

Citibank sues for $176m payment made in error

After recognising the mistake, Citi managed to recoup some of the money, but 10 firms, including Brigade Capital Management and Allstate Investment, refused to return it, prompting Citi to sue.

 

Judge Furman in Manhattan said he was bound by New York law, which has previously found that funds received to recoup a debt do not need to be returned, if "they discharge a valid debt, the recipient made no misrepresentations to induce the payment, and the recipient did not have notice of the mistake".

 

"The non-returning lenders believed, and were justified in believing, that the payments were intentional," Judge Furman wrote.

 

"To believe otherwise - to believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1bn - would have been borderline irrational."

 

Citi was fined $400m by US authorities last year for lapses in internal controls and risk management.--bbc

 

 

 

ByteDance not in preliminary talks to list TikTok on NYSE: source

(Reuters) - ByteDance is not in preliminary discussions about listing video app TikTok on the New York Stock Exchange (NYSE), a person familiar with the matter said, following a Chinese media report that talks were underway.

 

The Global Times, published by China’s ruling Communist Party’s official People’s Daily newspaper, said earlier on its Twitter account that ByteDance was in preliminary talks about a NYSE listing. Shortly after, it tweeted that ByteDance had denied the report.

 

No such talks were being held, said the source, who declined to be named as they were not authorised to speak publicly on the matter.

 

ByteDance, which owns the video app, did not immediately respond to a Reuters request for comment about the matter.

 

Under pressure from the Trump administration, ByteDance has been in talks for months to finalize a deal to shift TikTok’s American assets into a new entity to address U.S. security concerns. Those talks have continued since Biden took office in January, sources have said.

 

The White House has said it has an ongoing review of potential risks posed by TikTok on U.S. data. The U.S. Justice Department asked two federal appeals courts earlier this month to put on hold government appeals on lower courts’ rulings blocking restrictions the Trump administration sought against the app.

 

Two people briefed on the matter told Reuters earlier this month a plan for investors over the TikTok deal could drag on for months amid the administration’s review.

 

 

Handful of hedge funds bet big on GameStop before its wild ride

NEW YORK (Reuters) - A handful of small hedge funds were in a position to profit from the Reddit rally that sent shares of GameStop Corp and other out-of-favor stocks rocketing higher last month at the expense of prominent investors who had bet against the stocks, according to securities filings released Tuesday.

 

Hedge funds including Maverick Capital, Shellback Capital, Landscape Capital Management, and Engineers Gate Manager LP were among those that added a new position or increased their stakes in GameStop during the quarter that ended Dec. 30, according to a regulatory filings known as 13-Fs. Had each fund sold its shares of GameStop near the record closing price of $347.15, they would have banked gains of 1,600% or more.

 

Shellback, for instance, could have seen its 200,000 shares reach a value as high as $69.5 million had it held through Jan. 27, a gain of nearly 1,750% from its market value of $3,768,000 at the end of December.

 

Hedge fund Senvest, which told the Wall Street Journal that it scored a $700 million profit on the GameStop position, increased its position in the company by 56% when it bought 1.8 mln shares.

 

Maverick, increased its stake by 164%, or 2.9 million shares, leaving it with 4.7 million shares, regulatory filings show.

 

The filings do not include short positions and funds may also have been short, which would have diminished profits from long positions.

 

GameStop shares surged as investors following the Reddit forum WallStreetBets bought the stock hoping to punish hedge funds such as Melvin Capital Management that had taken short positions in the stock. Melvin lost more than 50% in January, requiring a $2.75 billion capital infusions from hedge funds Point72 Asset Management and Citadel.

 

Other hedge funds that entered January with bearish bets against GameStop included Maplelane Capital and Sculptor Capital, according to securities filings.

 

Maverick, Shellback Capital, Landscape Capital Management, and Engineers Gate Manager LP and Senvest did not respond for requests to comment for this story.

 

OTHER BETS

Along with positions in GameStop, hedge fund managers navigated a quarter that included the addition of electric car maker Tesla Inc to the benchmark S&P 500 and President Donald Trump’s unsuccessful attempts to overturn the result of the Nov. 3 presidential election.

 

Tesla’s inclusion in the S&P 500 forced index-tracking funds to buy shares, boosting its shares during the fourth quarter. Some hedge fund such as Coatue Management significantly cut back their stakes during the same time period, leaving them less likely to gain from the company’s 13.4% gain for the year to date.

 

George Soros’ Soros Fund Management exited its position in Twitter Inc while Kerrisdale Capital, whose founder told Reuters this year the company is enjoying a turnaround, cut its stake by 29%.

 

Shares of the company are up nearly 37% for the year to date.

 

Tiger Global, meanwhile, appeared to be betting big on several newly-public companies, raising its stakes in GoodRx Holdings Inc, DoorDash, Snowflake Inc, Airbnb, and Tencent Music Entertainment Group.

 

 

New York attorney general sues Amazon over COVID-19 shortfalls

NEW YORK (Reuters) - New York Attorney General Letitia James sued Amazon.com Inc on Tuesday over its handling of worker safety issues around the COVID-19 pandemic at two warehouses, just days after the retailer filed its own lawsuit seeking to block her case.

 

In a complaint filed in a New York state court in Manhattan, James said Amazon’s drive for faster growth and higher profits led to its “flagrant disregard” of steps needed to protect workers from the coronavirus at a Staten Island fulfillment center and a Queens distribution center, both in New York City.

 

James also accused Amazon of illegally retaliating when employees began to complain, including last March when it fired activist Christian Smalls purportedly for violating a paid quarantine when he led a protest over conditions at the Staten Island warehouse.

 

“Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers,” the lawsuit said.

 

“Amazon has cut corners in complying with the particular requirements that would most jeopardize its sales volume and productivity rates,” it added.

 

James sued four days after Amazon filed its own lawsuit in Brooklyn federal court to stop her from suing.

 

Amazon said in its lawsuit that federal labor and safety laws took precedence over New York’s in addressing workplace safety, and that James was overstepping her authority.”We care deeply about the health and safety of our employees, as demonstrated in our filing,” Amazon spokeswoman Kelly Nantel said in response to James’ lawsuit.

 

“We don’t believe the Attorney General’s filing presents an accurate picture of Amazon’s industry-leading response to the pandemic,” Nantel added.Amazon also faced scrutiny last March when workers protested conditions at the Staten Island warehouse. New York City announced its own probe at the time.

 

The attorney general’s lawsuit seeks to require Amazon to upgrade its protections for workers, reinstate Smalls, and pay damages to him and another worker who allegedly faced retaliation.

 

 

 

Oil steady amid Texas supply disruptions, potential OPEC+ moves

SINGAPORE (Reuters) - Bullish oil prices marked time on Wednesday, as support from supply disruptions in the U.S. south caused by an Arctic blast was offset by expectations that OPEC+ producers may ease their output curbs after April.

 

 

U.S. West Texas Intermediate (WTI) crude futures dipped 3 cents to $60.02 a barrel at 0510 GMT, retreating from a 13-month high of $60.95 hit on Tuesday.

 

Brent crude futures gained 11 cents, or 0.2%, to $63.46 a barrel, adding to three days of gains.

 

Oil prices have run up strongly in recent months and supply disruptions caused by a historic winter storm in Texas, the country’s largest oil producing state, continued to keep prices supported, analysts said.

 

ANZ and Citigroup analysts estimated at least 2 million barrels per day (bpd) of U.S. shale oil production has been curtailed. Citi estimated a cumulative production loss of around 16 million barrels through early March.

 

But the extreme cold has also hit crude demand due to disruptions to refinery operations. Chevron Corp’s 112,229 barrel-per-day (bpd) Houston-area refinery in Pasadena, Texas, was shut on Tuesday, the company said.

 

Both oil futures dipped in early morning trade due to pressure from a stronger U.S. dollar and a potential output increase from the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.

 

OPEC+ oil producers are likely to ease curbs on supply after April given a recovery in prices, OPEC+ sources told Reuters, although any increase in output will be modest as producers are wary of fresh setbacks in the battle against the pandemic.

 

Saudi Arabia’s voluntary cut of 1 million barrels per day (bpd) ends next month. While Riyadh hasn’t shared its plans beyond March with its OPEC+ partners, expectations in the group are growing that Saudi Arabia will bring back the supply from April, perhaps gradually.

 

The OPEC+ group will meet to set policy on March 4.

 

“We’re in a technical holding pattern supported by fundamental on the downside and top side capped ahead of March OPEC (meeting),” said Stephen Innes, Axi chief market strategist.

 

U.S. oil inventory data from the American Petroleum Institute industry group and the Energy Information Administration (EIA) will be released on Wednesday and Thursday respectively, delayed by a U.S. holiday on Monday.

 

Analysts polled by Reuters estimated, on average, that crude stocks fell 2.2 million barrels in the week to Feb. 12.

 

 

 

Exclusive: BP offers employees shares in rallying cry for low-carbon shift

LONDON (Reuters) - Oil major BP is launching its first share award scheme to rally its more than 60,000 employees around CEO Bernard Looney’s plan to shift to renewable energy following a bruising year of mass layoffs, bonus suspensions and spending cuts.

 

The distribution of the shares, which will be locked for four years, will take place throughout 2021.

 

The cost of the programme was not yet clear but BP said it would not impact its $2.5 billion cost savings target or plans to reduce debt to $35 billion this year.

 

Looney, who took office a year ago, held a company-wide town hall meeting last Tuesday where he announced that all employees would receive shares, the first such programme in BP’s history, according to a company spokesman.

 

“Whether you are a barista in New Zealand, a drilling engineer in Azerbaijan, a pump clerk in South Africa or an analyst in India – over 60,000 people in 66 different countries will receive a share in BP’s future,” Looney said in an internal message seen by Reuters that followed the town hall meeting.

 

The London-based company’s shares have risen nearly 10% so far this year, lifted by stronger crude oil prices. [O/R]

 

But over the past year since Looney took office, the shares have lost nearly 40%, hitting a 26-year low in October, due to a collapse in energy prices and a tepid reception from investors to Looney’s plan to “reinvent” the 111-year old company, shifting it away from oil to wind and solar power.

 

Looney has said that the share collapse highlighted the need for change, and that the focus should shift to BP’s execution of its strategy.

 

Last year marked one of the toughest in the industry’s history, and for BP in particular. The company plunged into a $5.7 billion loss, its first in a decade, after it slashed the value of its oil and gas assets by nearly $20 billion.

 

BP also laid off around 10,000 employees, or roughly 15% of its global workforce, as part of Looney’s plan to increase renewable power capacity 20-fold by 2030 while reducing its oil output by 40% in a drive to cut greenhouse gas emissions by 2050.

 

BP intends to offset any shareholder dilution that may result from the plan, a company spokesman said. Employees will not be able to sell the shares before 2025.

 

While the majority of employees will get outright shares, around 5,000 mid-management and senior employees will receive share options, which means that at the end of the vested four-year period they will only be entitled to receive gains made by the shares.

 

BP is also expected to return to paying bonuses to around 30,000 employees for 2021 after suspending all bonuses last year in response to the collapse in energy prices due to coronavirus, Looney said in the company-wide town hall meeting last week.

 

BP last year changed its bonus policy to be measured solely based on company performance, rather than division or personal performance.

 

 

 

Nestle to sell N.American water brands for $4.3 billion, focus on premium lines

(Reuters) - Nestle said on Wednesday it would sell Pure Life and some other struggling North American water brands to two private equity firms for $4.3 billion, as the food giant doubles down on its premium offerings including Perrier.

 

The sale, to One Rock Capital Partners and Metropoulos & Co, includes brands such as Poland Spring, Deer Park, Ozarka, Ice Mountain, Zephyrhills, Arrowhead and Splash, as well as U.S. office beverage delivery service ReadyRefresh.

 

Perrier, S.Pellegrino and Acqua Panna, which contributed to the growth recovery of Nestle’s North American water business in the third quarter, are not part of the sale agreement, the company said.

 

“This sale enables us to create a more focused business around our international premium brands, local natural mineral waters and high-quality healthy hydration products,” Chief Executive Officer Mark Schneider said in a statement.

 

Nestle, headquartered in Vevey, Switzerland, said in June last year it was exploring a potential sale of part of its North American water business. Reuters exclusively reported its talks with One Rock Capital earlier this month.

 

New York-based One Rock said Dean Metropoulos, founder of Metropoulos & Co, would become Nestle Waters North America’s chairman and interim chief executive officer after the deal closes.

 

“As a private company, the business is expected to have greater resources and flexibility to drive continued growth, strengthen its existing operations,” One Rock partner Kimberly Reed said.

 

The Nestle Waters North America division has about 7,000 employees in the United States and more than 230 in Canada, according to One Rock.

 

One Rock manages about $3.2 billion of committed capital across three flagship funds, its website said.

 

 

 

Tanzania: Gold Industry Set for Giant Leap

COSNTRUCTION of gold refining machinery worth 8.9bn/- in Mwanza with a capacity to process over 480 kilogrammes per day is complete.

 

Mwanza Precious Metals Refinery Ltd, a joint venture of State Mining Corporation (STAMICO), Dubai-based Rozella Genera Trading LLC and ACME Consultant Engineers PTE Ltd of Singapore, will be one of the best state-of-the-art gold refineries.

 

STAMICO Acting Managing Director Dr Venance Mwasse told Minister for Minerals Mr Dotto Biteko on Monday that the refinery plant, the first among three gold refineries currently under construction in the country, was set to be in operation the following month.

 

 

The plant ranks number three in Africa, in terms of processing capacity, as it can even extend its capacity to 960 kg per day, he said.

 

"This is the first refining machinery in our country, with numerous anticipated benefits, including value addition to gold.

 

The mineral will be processed here, meaning that no exportation of raw minerals. It will increase the country's revenue and create over 120 direct employments to Tanzanians," said Dr Mwasse.

 

Again, he added, the plant will also reduce mineral smuggling since it serves as a market, hence let the government smoothly collect its levies, taxes and royalties.

 

Dr Mwasse further explained that Aqua Regia and Electrolysis Gold Refining Processes are among the technologies to be applied in the newly-built machinery so as to let Tanzanian gold meet international standards.

 

"Unlike the refineries in South Africa and Sudan, the Precious Metal refinery will be recognised for refining gold with international standards by 99.9 per cent," said Dr Mwasse.

He said the project cost of 58-million US dollars, which covered investment, running cost and purchase of gold for the initial ten-days when the refinery starts. Construction started in March 2020.

 

For his side, Minister Biteko, praised the work done, saying that the plant will mostly help in boosting the mining sector, whose contribution to the national economy is huge.

 

He recommended the plant operation to take-off as planned so as to build the trust to potential customers.

 

Minister Biteko said the refinery will bring the much awaited transformation in the mining sector and make the gold industry vibrant and its contribution to the national economy becoming more visible.

 

Mwanza Regional Commissioner Mr John Mongella commented that the presence of the processing plant was an opportunity for gold dealers, following availability of a permanent and reliable market.

 

"It is a big revolution in the mining sector. The nation is in a good position to export the pure gold, thus, withstand competition in the world market," he said.-Daily News.

 

 

Tanzania: Zanzibar Attracts 700 Investment Projects

Zanzibar — ZANZIBAR has attracted 700 investment projects, which have injected into the economy 7 billion US dollars (over 16tri/-) capital, creating 70,000 jobs, the House of Representatives heard here on Tuesday.

 

Minister of State in the President's Office, Labour, Economy and Investment Mudrik Ramadhan Soraga said over 60 per cent of the projects are in the tourism sector.

 

Answering a question by Nominated Representative Dr Saada Mkuya Salum, who wanted to know the government strategies to ensure investments benefit the country, the minister described the investments as highly beneficial to the country.

He said the government is determined to improve investment supportive infrastructure to attract more tax paying domestic and foreign investors.

 

Minister Soraga cited the introduction of one-stop-centre for investors, review of investment policies and laws, as well as public awareness campaigns as among the tactics, which the government is using to improve investment climate.

 

"We are equally building the institutional capacity to offer quality and sustainable services to investors...we are as well building the capacity of youth to grab various job opportunities," the minister told the house.

 

He said the government remains determined to create 300,000 jobs for Zanzibaris by 2025 through various sources, including domestic and foreign investments.

 

He reminded existing and potential investors to give priority to Zanzibaris in recruitment as per the country's laws on investment.

 

Under the legislation, investors have a ceiling in the recruitment of foreigners especially in key positions, subject to the size of the project.-Daily News.

 

 

 

Uganda: Bank of Uganda Extends Credit Relief Measures to Banks for More 6 Months

Bank of Uganda (BoU) yesterday announced an extension Credit Relief Measures for another six months.

 

The move aims at helping commercial banks and other supervised financial institutions to continue restructuring loans and also provide loans to the commercial banks and financial institutions to lend out to the business community.

 

Bank of Uganda will also maintain Central Bank Rate at seven per cent as well as the Covid-19 Liquidity Assistance programmes (CLAP) to the commercial banks, credit institutions and microfinance deposit taking institutions.

 

In a statement issued yesterday, the deputy Governor of Bank of Uganda, Dr Michael Ating-Ego, said: "In addition, BoU will extend for six months effective April 1 the Credit Relief Measures (CRM) and also maintain the CLAP to the supervised financial institution."

 

He added: "Bank of Uganda will review CLAP from time to time as the pandemic evolves to ensure viability of solvent supervised financial institutions that may come under liquidity stress during the pandemic and to support credit extension."

Hinting on the economy, Dr Atingi-Ego said: "As the vaccine becomes readily available in Uganda and the spread of Covid-19 is contained, tourism is expected to rebound. In addition, exports should benefit from strengthening foreign demand, reduced pandemic-related uncertainty and improving global investment."

 

Dr Ating-Ego explained that the medium term economic outlook continues to be highly conditional on the timeline of the world-wide vaccines rollout and the course of the virus and its new variants.

 

Ms Razia Khan, chief economist for Africa and Middle East in Standard Chartered Bank about BoU's maintaining the central bank rate at seven per cent for two months, said: "The Bank of Uganda held its policy rate unchanged at seven per cent as expected, however, there are some risks to our expectation of an early tightening.

 

While the BoU is mindful of fiscal risks, it nonetheless sees inflation as 'benign', and expects to see a further deceleration in core inflation."

 

Ms Razia also said BoU notes that the economic recovery has lost some of its earlier momentum, amid rising Covid-19 cases.

 

"Somewhat predictably, it has taken the decision to extend Covid-19 credit relief measures for six months from April 1, when the extraordinary measures were otherwise due to come to an end."

 

Measures

 

The Bank of Uganda held its policy rate unchanged at seven per cent as expected, however, there are some risks to our expectation of an early tightening," Ms Razia Khan, chief economist for Africa and Middle East in Standard Chartered Bank.-Monitor.

 

 

Mozambique: Are Ruby Mine Resettled Families Getting Luxury $95,000 Houses?

Montepuez Ruby Mining (MRM) has now delivered 105 houses for families in the resettlement village of Namanhumbir, built by the mining company, to re-house Nthoro communities previously lining on land given to the mine a decade ago. MRM says it has spent $10 mn for 105 of these houses - $95,000 per house - including electricity, water and community projects including a primary school, market, mosque, church and police station. Each family also receives 2 ha of farmland. The MRM 28 December press statement is on  http://bit.ly/MozMRMhouses

 

In its 22 June 2020 resettlement update, MRM notes a problem because it is trying to resettle families on already occupied farmland, and it admits there is no support from local leaders to move the exiting farmers.

 

The mine has very high level political links. Montepuez Ruby Mining is 75% owned by Gemfields and 25% by Mwiriti, which is controlled by Raimundo Pachinuapa, a liberation war commander now on the Frelimo Political Commission. MRM is chaired by Samora Machel Jr. Pachinuapa’s son Raime is MRM’s director of corporate affairs. Gemfields agreed to pay $8.3 mn to settle 273 claims of killings, severe beatings and house burnings related to the Montepuez ruby mines, the company announced on 29 January 2019.  http://bit.ly/Ruby-Moz436  Gemfields earned $120 mn from its Mozambique ruby auctions in 2019.

 

 

Houses being built by the Ministry of Public Works , Housing and Water are less expensive. The first 22 two-bedroom houses in Nampula have been provided to young married people, recent graduates and civil servants with a 15-year mortgage of 13,000 Meticais per month (currently $173, but with devaluation much less per month in 15 years). The Ministry's Housing Promotion Fund is upgrading 2000 wattle and daub houses at a cost of $1265 each. Wattle and daub ( pau-a-pique ) is a building method which has been used for thousands of years in Europe and elsewhere, and is common in northern Mozambique. A woven lattice of wooden strips (called wattle) is filled with a mud-and-straw based sticky material (called daub). ( O Pais Economico  12 Feb)

 

 

 

 


 


 


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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