Major International Business Headlines Brief::: 19 February 2021

[Bulls n Bears]

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Major International Business Headlines Brief::: 19 February 2021

 


 

 


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ü  Robinhood boss says GameStop episode 'unacceptable'

ü  Huawei turns to pig farming as smartphone sales fall

ü  UK government borrowing hits highest January level since records began

ü  McDonald's looks for 'gender parity' by 2030

ü  The search widens for hot rocks that provide power

ü  Slash business rates to save High Street, says Next boss

ü  Coronavirus: 'No jab, no job' policies may be legal for new staff

ü  Coronavirus: Barclays says loans worth £4.8bn may never be repaid

ü  Undeterred by Facebook news blackout, Australia commits to content law

ü  Airlines, renewables companies push Biden to make air travel greener

ü  Google names exec to oversee responsible AI research after staff unrest

ü  Bitcoin is 'economic side show' and poor hedge against stocks: JP Morgan

ü  Asian shares slip from record highs on rising bond yields, weak U.S. data

ü  Elon Musk says bitcoin is slightly better than holding cash

ü  Renault clings to turnaround after record $9.7 billion loss

 

 

 


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Robinhood boss says GameStop episode 'unacceptable'

The head of the Robinhood trading platform has apologised to customers at a US congressional hearing prompted by last month's GameStop trading frenzy.

 

Vlad Tenev said the situation the firm faced in January - when financial strains led it to limit certain stock purchases - was "unacceptable to us".

 

"We are doing everything we can to make sure this won't happen again," he said.

 

Lawmakers said the move, which sparked outrage, had raised questions about fairness in financial markets.

 

"Many Americans feel that the system is stacked against them and no matter what, Wall Street always wins," said congresswoman Maxine Waters, who heads the House Financial Services Committee holding the hearing.

 

Mr Tenev said the firm, which is popular among everyday investors, was forced to temporarily limit trades in GameStop and some other firms due to new financial requirements it faced because of the surge in trading.

 

He said the firm moved quickly to raise new funds, which would help it avoid making similar moves in the future.

 

He also denied that Robinhood had been acting at the behest of anyone else.

 

"I'm sorry for what happened. I apologise," he said. "I'm not going to say that Robinhood did everything perfectly, and that we haven't made mistakes in the past, but what I commit to is that we improve from this."

 

Other key players called to testify at the hearing also denied wrongdoing in the affair, which saw the price of GameStop shares rise from less than $20 at the beginning of January to more than $350 in a matter of weeks.

 

The astonishing rise, apparently fuelled by a swarm of independent traders swapping tips on social media forums such as Reddit, has sparked probes examining the possibility of market manipulation and other potential conflicts of interest.

 

Robinhood's ties to Wall Street firm Citadel Securities have faced particular scrutiny.

 

Robinhood receives fees from Citadel, which pays to execute Robinhood customer orders. Citadel last month also invested in Melvin Capital, one of the hedge funds hit by losses after betting that GameStop's shares would fall.

 

Kenneth Griffin, CEO of Citadel, is seen in a framegrab from live video as he testifies about stock trading and GameStop, during an entirely virtual hearing of the 

 

Kenneth Griffin, the head of Citadel Securities, said no one in his company had any discussions with Robinhood about restricting trades in GameStop or other so-called "meme stocks".

 

"I first learned of Robinhood's trading restrictions after they were announced," he said.

 

Mr Griffin and Mr Tenev attracted most of the attention at the sometimes combative hearing, which saw lawmakers raise potential regulatory changes, such as requirements that firms disclose when they have made large bets against a stock.

 

Melvin Capital hedge fund manager Gabriel Plotkin told lawmakers that he was wary of holding short positions again after retail investors pushed GameStop shares higher, causing the firm shed 53% of its value.

 

Industry needs to adapt

"They exploited an opportunity around short selling and we will have to adapt and the whole industry will have to adapt," he said.

 

Republicans sought to head off new rules, noting that it was government requirements that precipitated Robinhood to limit trades.

 

"Piling on more and more regulations only increases complexity and does not help investors," said Barry Loudermilk, a Republican representative from Georgia.

 

Ms Waters hit back at characterisations of the hearing as "political theatre" - but also suggested that she was not rushing to additional action.

 

"I didn't hear anyone here say they were ready to pile on regulations," she said.

 

Others testifying at the hearing included Melvin Capital chief executive Gabriel  Plotkin, Reddit chief executive Steve Huffman, and Keith Gill, a Reddit user and YouTube streamer known as Roaring Kitty who promoted his investment in GameStop.

 

Shares in the loss-making video games retailer have fallen back since January, closing at about $40 on Thursday.-BBC

 

 

 

Huawei turns to pig farming as smartphone sales fall

Huawei is turning to technology for pig farmers as it deals with tough sanctions on its smartphones.

 

The Chinese telecoms giant was stopped from accessing vital components after the Trump administration labelled it a threat to US national security.

 

In response to struggling smartphone sales, Huawei is looking at other sources of revenue for its technology.

 

Along with Artificial Intelligence (AI) tech for pig farmers, Huawei is also working with the coal mining industry.

 

Former US President Donald Trump claimed Huawei can share customer data with the Chinese government, allegations it has repeatedly denied.

 

As a result, the world's largest telecoms equipment maker has been limited to making 4G models as it lacks US government permission to import components for 5G models.

 

Huawei's smartphone sales plunged 42% in the last quarter of 2020 as it struggled with a limited supply of microchips due to the sanctions.

 

Huawei has also been locked out of the development of 5G in a number of countries, including the UK, amid fears over national security.

 

Reports have suggested that it will reduce its manufacturing of smartphones by up to 60% this year, although it said it can't confirm this figure.

 

"The issue here is not like there's any problems with our quality or experiences of the Huawei products. It's not a level playing field for Huawei as Huawei is caught in between the geopolitical tensions," a company spokesman told the BBC.

 

And so, Huawei appears to be looking for other sources of revenue - moving into cloud computing services, smart vehicles and wearable devices. It even has plans for a smart car.

 

But it also has its eye on a few more traditional industries.

 

Pig farming

China has the world's biggest pig farming industry and is home to half the world's live hogs.

 

Technology is helping to modernise pig farms with AI being introduced to detect diseases and track pigs.

 

Facial recognition technology can identify individual pigs, while other technology monitors their weight, diet and exercise.

 

Huawei has already been developing facial recognition tech and faced criticism last month for a system that identifies people who appear to be of Uighur origin among images of pedestrians.

 

Other Chinese tech giants, including JD.com and Alibaba, are already working with pig farmers in China to bring new technologies.

 

"The pig farming is yet another example of how we try to revitalise some traditional industries with ICT (Information and Communications Technology) technologies to create more value for the industries in the 5G era," the Huawei spokesman added.

 

A vehicle equipped with Huawei's intelligent system at its new Global Flagship Store.

 

 

Earlier this month, Huawei founder and chief executive Ren Zhengfei announced a mining innovation lab in northern China's Shanxi Province.

 

He wants to develop technology for coal mines that will lead to "fewer workers, greater safety, and higher efficiency" and enable coal miners to "wear suits and ties" at work.

 

During a round-table meeting at the event, Mr Ren said the company was also expanding into consumer products such as televisions, computers and tablets.

 

"We can still survive even without relying on phone sales," Mr Ren said, adding that it is very unlikely the US will remove Huawei from a blacklist that bars companies from working with the Chinese tech firm.--BBC

 

 

 

UK government borrowing hits highest January level since records began

UK government borrowing hit £8.8bn last month, the highest January figure since records began in 1993, reflecting the cost of pandemic support measures.

 

It was the first time in 10 years that more has been borrowed in January than collected through tax and other income.

 

January is usually a key revenue-raising month as it is when taxpayers submit their self-assessment returns.

 

Tax income fell by less than £1bn, but the government spent £19.7bn more than last year on measures such as furlough.

 

The growth in borrowing puts debt as a proportion of economic activity at 100.6%.--BBC

 

 

 

McDonald's looks for 'gender parity' by 2030

McDonald's has set a goal of having an equal number of men and women in leadership roles by 2030 as it looks to improve diversity at the company.

 

The fast-food chain also said it would work to boost minority representation in the firm's senior US ranks from 29% to 35% over the next four years.

 

Executive pay will be tied to meeting the targets.

 

The effort follows claims of racial discrimination from black franchisees and executives in the US.

 

Workers have also accused the firm of fostering "systemic sexual harassment" at its restaurants.

 

McDonald's has disputed the allegations. But in July, amid widespread Black Lives Matter protests in the US, the firm announced a new diversity, equity and inclusion initiative.

 

In November, the firm brought on a new person to lead implementation of the effort.

 

"We recognise these issues weigh heavily on our people and have heard - loud and clear - that diversity, equity and inclusion are priorities for our entire team, from our crews to our senior leaders," McDonald's chief executive Chris Kempczinski wrote in a letter to staff.

 

"We're serious about holding ourselves and our leaders accountable to these foundational commitments."

 

As part of its efforts, McDonald's released demographic data of its US workforce for the first time.

 

The 2018 figures show the firm had more black, Hispanic and Asian senior managers than the industry overall. Women and minorities also accounted for a larger share of service workers than the industry average.

 

However, the share of black and Hispanic first- and mid-level managers lagged.

 

The firm said it would determine executive bonuses based on a combination of sales and profit growth, with meeting diversity goals weighted at 15%.

 

Jamelia Fairley, a McDonald's worker at a corporate-owned store in the Orlando, Florida area, said the firm had long been "complacent" on these issues.

 

"While workers have rung the alarm, from filing complaints and lawsuits to going on strike, McDonald's has largely ignored its racial discrimination problem from the C-suite to the frontlines," said Ms Fairley, a leader in the Fight for $15 and a Union, an activist campaign that has pressured McDonald's over racial discrimination and sexual harassment, among other issues.

 

"This isn't a problem that can be solved by paying wealthy executives even more to hire a handful of new senior staff," she added.

 

"If McDonald's really wants to address racial and gender inequality, it needs to start by listening to the black and brown cooks and cashiers who have been speaking out about workplace discrimination and pay for years."--BBC

 

 

 

The search widens for hot rocks that provide power

Drilling holes into an extinct volcano might sound like an unusual start to an energy project.

 

But that's what J Michael Palin, a senior lecturer at the University of Otago in New Zealand, is planning to do.

 

His project involves drilling two boreholes to a depth of 500m (1,600ft) and monitoring the rock to see if it is suitable to provide geothermal energy.

 

"It has been known for some time that the Dunedin region has surface heat flow about 30% higher than expected based on previous measurements," says Dr Palin.

 

It is that free heat that Dr Palin is hoping to tap into.

 

Temperatures in Earth's core, which starts at 2,890km (1,800 miles) below the surface, can reach 5,400°C, about the same temperature as the surface of the Sun. This heat moves upward over time and molten rock known as magma creeps toward the surface, carrying enormous heat.

 

Geothermal energy companies drill wells and as hot water rises through the well, the heat is extracted and used to make electricity or to heat homes nearby.

 

Many researchers have long been excited about geothermal's potential to bring about a greener heating system. It is not a new market - Italy's Prince Piero Ginori Conti tested the first geothermal power generator in 1904.

 

And it is not just New Zealand. There is renewed interest in this energy source as countries set themselves renewable energy targets, including net zero projects - commitment by dozens of nations to decarbonize their economies by 2050.

 

There are around 600 geothermal plants around the world in operation or being built, with another 600 being planned, says Alex Richter, former president of the International Geothermal Association: "All major utilities in Europe are looking at geothermal in one way or another."

 

The number of projects that use heat to generate electricity accelerated from around 2008, but there has been "incredible" growth in plants that heat homes and businesses, he says.

 

"Paris has wells across the city offering heating to various districts - or look at Munich, another city betting big on geothermal. And the countries that have long been the trailblazers in this field are Italy and Turkey."

 

"The beauty of geothermal is its access to heat and the number of applications it can be used for," says Rosalind Archer, director of The Geothermal Institute at the University of Auckland.

 

She points out a key advantage of geothermal over other renewable options such as wind and solar power, which vary in intensity, is its constant availability. On a human timescale, the heat locked in the Earth's rocks will always be there.

 

Iceland has long been at the forefront of using geothermal energy thanks to its many volcanic regions, which form solid rock after magma passes through it, offering heat to drilling teams as those hot rocks cool slowly.

 

In the United States, nine purchase-power agreements involving geothermal projects have been signed since 2019, compared to the annual average of just two.

 

In the UK, Cornish firm Geothermal Engineering has just signed an agreement with Ecotricity - the first time that geothermal electricity will be sold in the UK. The firm has been one of the leaders in the renewables field, having built the UK's first megawatt scale windmill in 1999.

 

Ecotricity chief executive Dale Vincent says he is excited to bring the region's first geothermal project into the grid: "I can see this happen more widely across the UK with more government support and a decrease in drilling costs."

 

Mr Vincent touches on a key issue. It can be much more costly to develop a geothermal plant, compared to the inexpensive price of bringing solar or wind projects to fruition.

 

But the snag in that argument relates to how costs of a geothermal plant are often heavily weighted toward early expenses, rather than the low cost to keep them running, especially when compared to oil and gas plants, says Kirsten Marcia, chief executive of Canadian geothermal energy firm DEEP Corp.

 

"There can be costly capital to get a project going, but these are 30-year projects," Ms Marcia says. "You don't have to buy natural gas and you're selling power all the time, so on a levelized basis, geothermal can outcompete all the other options. Once up and running, these projects can go for decades."

 

On geothermal's acceptance, Ms Marcia adds: "I think we're at an inflection point where this industry has the ability to have a much bigger seat at the table."

 

John Redfern, CEO of Canadian geothermal firm Eavor, envisions a future where geothermal is part of the green energy mix that includes wind and solar: "Whether geothermal contributes to 5% or 20% to the grid, those are all huge numbers because we're truly starting from zero."

 

As enticing as geothermal has been, it needs a stronger branding campaign to help the public and funders better understand how it works, Mr Richter points out.

 

"There aren't any geysers in London or New York City, so people there might wonder how geothermal can apply to their energy grid," he says.--BBC

 

 

 

 

Slash business rates to save High Street, says Next boss

Business rates for High Street retail stores should be slashed by 35%, according to the boss of one of the UK's biggest retail chains Next.

 

Lord Simon Wolfson says that unless the government sets rates at a level that is fair, a huge number of shops will have to close unnecessarily.

 

He said the current system was "unfair" to bricks and mortar retailers, many of whom are struggling in the pandemic.

 

The Treasury said it is conducting a "fundamental review" of the system.

 

Mr Wolfson told the BBC the value of High Street retail properties had fallen dramatically in the crisis "but the business rates bill hasn't reflected that".

 

He used his own experience at Next as an example. "In-store sales at Next have gone down 25% since 2015 but our rates on those properties have gone up 9%. They have become unfair because they no longer reflect the value property against which they're charged"

 

Thousands of retail jobs unviable, Next boss warns

Some of the cost to the government of a retail business rates cut could be offset by raising rates on warehouses and online fulfilment centres, he said. Their value has risen significantly as more retail has moved from the High Street to online.

 

"Rents on shops have been coming down, rents on warehouses have been going up and the rates don't fairly reflect the value of warehouse property either. So I think the government can fund some of this by increasing rates on warehousing by around 50%".

 

'Stifling'

Wolfson is widely considered to be one of the canniest operators in UK retail and NEXT's significant on-line business has helped the company weather the assault of e-commerce on traditional retail.

 

Next is one of the UK's 100 biggest companies - the problem for small retailers is much more acute.

 

Peter Budek runs the Eagle bookshop in Bedford. He took a big risk last year by moving into a new bigger building so will start paying business rates for the first time when the current rates holiday comes to an end - currently scheduled for April.

 

He said the prospect of paying rates almost stopped him expanding and says that the current system is stifling the growth of small firms.

 

"The business rate factor was a big, big thing. You go from paying very little or zero business rates in our tiny little place before, to suddenly having a substantial liability and that nearly put me off.

 

"And if we can remove that obstacle then you are far more likely to have small independent businesses becoming bigger independent businesses and therefore putting their stamp on the town centre so that each town regains some kind of identity and encourages a network of smaller independent businesses to run along with them.

 

"So what we've done here, may provide some sort of incentive to other businesses in Bedford to step it up a notch, but they will be put off by the rates system."

 

There are 30 billion reasons not to reform the system. That's the total amount the government collects (in pounds) from business rates. But you can't tax a dead business and the High Street in the UK was the scene a jobs bloodbath in 2020.

 

The Centre for Retail Research calculates that more than 175,000 jobs were lost as some of the most famous High Street names went bust.

 

Emergency pandemic measures threw businesses a lifeline as the government offered a business rates holiday. That holiday is due to end in six weeks. But even if the chancellor extends that holiday at the Budget on 3 March, urgent reform is required to prevent long term damage to our high streets according to Lord Wolfson.

 

"I think we're at quite a pivotal place on the High Street history… we've had a dramatic drop in the value of retail properties because sales have dropped so far and many retailers are on the edge of administration.

 

"For those companies particularly if they go into liquidation, whether or not their new owners decide to take them on and keep those shops on, or close them, will depend on both the rents and the rates that are being charged.

 

"So over the next year or two, having the rates set at a level that is economic and fair is going to make an enormous difference to how many shops stay open in the short term. And it would be a shame for a huge number of shops to shut unnecessarily because rates are too high."

 

Lord Wolfson admits that cutting business rates on high streets while raising them on warehouses will come at a cost to the stretched public finances. That's one reason some have suggested an online sales tax to level the playing field between physical and online retailers while filling a hole in tax receipts.

 

But that would be a mistake according to Lord Wolfson.

 

"I'm against an online sales tax because ultimately the consumer will pay the price of that and actually I don't think anyone is going to go back to the High Street because there's a 2% online tax or whatever number they come up with. You cannot tax people back on to the High Street.

 

"An online tax isn't going to get people back... it is going to put a hole in consumers' pockets."

 

The real challenge may not be the tax and rates system but the nature of the opposition High Street retailers are up against. It is almost impossible to compete against giant online retailers who don't seem to care if they make a profit from e-commerce - and as a result pay very little corporation tax.

 

Lord Wolfson has a solution: "There are some internet companies who frankly don't want to make a profit they just want to turn over as much as they can until all of their competition go out of business and then raise their margins later.

 

"So there is an argument for an online sales tax to stop people avoiding corporation tax. But a better way of doing that is to say if you're an online business, pay either 2% of your turnover or 19% of your profits, whichever is the higher.

 

"That would forensically attack those people off-shoring profits whilst not damaging the nascent internet business which, frankly for us traditional retailers, is one of the few things actually keeping us afloat."

 

Golden goose?

The government is aware of the challenge. At next month's Budget, it may yet extend a business rates holiday currently scheduled to end in April and says the business rates system is under review.

 

"We want to see thriving high streets, which is why we've spent tens of billions of pounds supporting shops, restaurants and cafes throughout the pandemic, including over £10bn worth of business rates relief," a Treasury spokesperson said.

 

"We're currently conducting a fundamental review of business rates and are considering responses to our call for evidence now."

 

It's not easy to reform a system that has been in place for decades, contributes billions to the public coffers and is a valuable source of funding for local authorities who get a large part of their own income from the rates imposed on local businesses.

 

But failure to reform could see this once-golden goose unable to lay the eggs of future prosperity for UK high streets.--BBC

 

 

 

Coronavirus: 'No jab, no job' policies may be legal for new staff

It may be legal for companies to insist on new staff being vaccinated as a condition of their employment, the justice secretary has said.

 

However, Robert Buckland said it was unlikely bosses could make existing workers have vaccines under their current contracts.

 

Downing Street has said it would be "discriminatory" to order people to be vaccinated to keep their job.

 

But some firms say they will not hire new staff who refuse to have the jab.

 

In an interview with ITV on Wednesday, Mr Buckland said compelling new staff to be inoculated could, in theory, be possible if it was written into their contracts.

 

However, employers would probably need to take legal action if existing staff refused such an order, he said.

 

"I think that has to be the case because we're dealing with existing terms of contracts of employment, thousands of existing contracts,” he said.

 

He added that the legality of “no jab, no job” would depend “very much on the terms of employment and the particular contract”.

 

"Generally speaking I'd be surprised if there were contracts of employment existing now that did make that approach lawful. I think frankly the issue would have to be tested.”

 

London-based Pimlico Plumbers is one company that has said it will not hire new staff who have refused the vaccination on non-medical grounds.

 

Employment lawyers initially questioned the move, but on Wednesday founder Charlie Mullins said he had been advised it was legal.

 

"We've obviously been talking to lawyers and they're very happy that we can add this proposal to any new workers that start with us once the vaccine is rolled out," he told BBC Radio 4's Today programme.

 

"We'll be using the new contracts two to three months from now. When people come along for a job with us, if they're not happy to sign that, then again that's their choice, but they certainly won't be given a job with Pimlico Plumbers."

 

Care home operator Barchester Healthcare has also said all new hires will be obliged to get the jab.

 

"With regards to our staff, we are doing all we can to reassure and encourage those who are a little more reticent to have the vaccination, and we are also ensuring that all new staff must have the vaccination (if they medically can) before starting work looking after our vulnerable residents and patients who are in our care," Barchester Healthcare wrote on its website.

 

'Open to challenge'

David Samuels, legal director at law firm Lewis Silkin, said that there is nothing legally to stop a business from placing a "no jab, no job" clause in contracts for new hires.

 

However, he cautioned that employers would need to analyse each job role and evaluate health and safety risks before introducing such a clause.

 

Failure to do so would make it possible to challenge a contract as being unfair or discriminatory, if a claimant can prove they are exempt from having the vaccine for some reason, or unable to access it.

 

There are concerns, for example, that "no jab, no job" policies would disproportionately affect young people who are last in line to get the jab.

 

"It's going to be harder to justify - especially if they don't go through that process and document it, and it will be more likely that they will be challenged successfully through a legal claim," Mr Samuels told the BBC.

 

He added that his firm had received enquiries about whether such a clause could be put in place if the business necessitated some staff to work in the office or in a factory.

 

The prime minister's official spokesman has said: "Taking a vaccine is not mandatory and it would be discriminatory to force somebody to take one."—BBC

 

 

Coronavirus: Barclays says loans worth £4.8bn may never be repaid

Barclays has reported a big drop in annual profits, having set aside billions of pounds for loans expected to turn sour due to the pandemic.

 

The bank reported a 30% fall in pre-tax profits to £3.1bn for 2020, down from £4.3bn in 2019.

 

It was forced to set aside £4.8bn to cover loans unlikely to be paid back amid the economic fallout of Covid.

 

Despite that the bank announced it would resume dividends, with a payment of 1p per share to shareholders.

 

'Resilient and diversified'

The bank has been one of the biggest providers of emergency loans during the coronavirus crisis, having given some £27bn worth to businesses.

 

It has also provided more than 680,000 payment holidays globally for customers with mortgages, credit cards and loans.

 

Barclays warned that pandemic-related costs would remain high throughout the coming year, but that it expected loan loss charges to be "materially below" last year's hit.

 

Some £492m was set aside to cover expected defaults by borrowers in the final three months of 2020, but that was down nearly a fifth on the previous quarter.

 

Barclays added that investment banking trading had helped to offset the impact of the Covid crisis on its retail arm, with its "best ever year" for markets and banking income helping to keep the group in profit.

 

"We expect that our resilient and diversified business model will deliver a meaningful improvement in returns in 2021," group chief executive Jes Staley said.

 

Banking analyst Philip Augar told the BBC's Today programme that "it's clearly not great news" for the bank.

 

"I suppose the consolation for the economy and for Barclays shareholders is that it could have been worse.

 

"The amount that they've been providing against bad loans has been less, quarter by quarter, and that might be a sign that we're past the worst, but they're pretty cautious in what they say."

 

He added that he felt it was "prudent" for the bank to resume dividends payments to shareholders, after regulators permitted this in December.

 

Banks had been told to stop making the payments in March last year in order to build up capital to absorb potential loan losses caused by the pandemic.

 

In addition to the dividend, Barclays is also set to return cash to investors via a share buyback (where companies listed on the stock market purchase some of their own shares) of up to £700m.

 

Bonuses rise

In its annual report published alongside the results on Thursday, Barclays revealed its staff bonus pool was 6% higher than the £1.5bn shared out in 2019.

 

It said this represented a "relatively modest increase across the investment banking businesses, reductions for all other businesses and appropriate recognition for the contributions of our more junior colleagues".

 

Mr Staley took home £4.01m last year, although that was down on the £5.9m paid out in 2019.

 

Dividends and bonuses against the backdrop of the coronavirus crisis will remain in sharp focus this week. State-backed banking giant NatWest is also set to report its annual results on Friday.

 

Richard Hunter, head of markets at Interactive Investor, said that coronavirus vaccine developments had boosted the outlook for the economy and banks.

 

"Should the rollout of the vaccine lead to a quicker than expected economic recovery, it could even result in provisions for bad debts being significantly lower than the ones the banks announced last year."

 

But he warned: "Headwinds remain for the sector in light of historically low interest rates, which put severe downward pressure on margins."-BBC

 

 

 

Undeterred by Facebook news blackout, Australia commits to content law

SYDNEY (Reuters) - Australian Prime Minister Scott Morrison vowed on Friday to press ahead with laws to force Facebook Inc to pay news outlets for content, saying he had received support from world leaders after the social media giant blacked out all media.

 

Facebook stripped the pages of domestic and foreign news outlets for Australians and blocked users of its platform from sharing any news content on Thursday, saying it had been left with no choice ahead of the new content laws.

 

The move, which also erased several state government and emergency department accounts, as well as nonprofit charity sites, caused widespread outrage.

 

Morrison, who blasted Facebook on its own platform for “unfriending” Australia, said on Friday the leaders of Britain, Canada, France and India had shown support.

 

“There is a lot of world interest in what Australia is doing,” Morrison told reporters in Sydney.

 

“That is why I invite ... Facebook to constructively engage because they know that what Australia will do here is likely to be followed by many other Western jurisdictions.”

 

Canadian Heritage Minister Steven Guilbeault said late on Thursday his country would adopt the Australian approach as it crafts its own legislation in coming months.

 

The Australian law, which will force Facebook and Google to reach commercial deals with Australian publishers or face compulsory arbitration, has already been cleared by the federal lower house and is expected to be passed by the Senate within the next week.

 

Australian Treasurer Josh Frydenberg said he had spoken to Facebook CEO Mark Zuckerberg for a second time following the news blackout.

 

“We talked through their remaining issues and agreed our respective teams would work through them immediately. We’ll talk again over the weekend,” Frydenberg said in a tweet.

 

In its statement announcing the move in Australia, Facebook said the Australian law “misunderstood” its value to publishers. Frydenberg earlier told the Australian Broadcasting Corp that “there is something much bigger here at stake than just one or two commercial deals. This is about Australia’s sovereignty”.

 

Facebook and Alphabet Inc owned Google had campaigned together against the laws with both threatening to withdraw key services from Australia if the laws took effect.

 

Google, however, announced a host of preemptive licencing deals over the past week, including a global agreement with News Corp.

 

 

A 3D printed Facebook logo is seen in front of displayed Australia's flag in this illustration photo taken February 18, 2021. REUTERS/Dado Ruvic/Illustration

Facebook restored some government pages later on Thursday, but several charity, nonprofit and even neighbourhood groups remained dark.

 

WEB TRAFFIC SLUMPS

Facebook’s move had an immediate impact on traffic to Australian newsites, according to early data from New York-based analytics firm Chartbeat.

 

 

Total traffic to the Australian news sites from various platforms fell from the day before the ban by around 13% within the country and by about 30% outside the country, the Chartbeat data showed.

 

Similarly, traffic to the Australian news sites from Facebook alone plummeted from around 21% to about 2% within Australia, and from around 30% to about 4% outside the country.

 

News Corp Australasia Executive Chairman Michael Miller, testifying at an unrelated parliamentary hearing, confirmed the impact but said the number of Australians visiting the company’s websites directly had risen.

 

“Definitely referral traffic was nonexistent ... while at the same time direct traffic to our websites was up in double digits,” he told the inquiry.

 

Miller also suggested antitrust regulator the Australian Competition and Consumer Commission (ACCC) should scrutinise Facebook’s move.

 

 

 

Airlines, renewables companies push Biden to make air travel greener

NEW YORK (Reuters) - U.S airlines and renewables companies are lobbying the Biden administration to back a big increase in subsidies for lower-carbon aviation fuel, arguing new incentives are needed to help fight climate change and will also make their recovery from the pandemic much greener, industry trade groups told Reuters.

 

The push reflects the hefty price that U.S. taxpayers may be asked to pay as President Joe Biden seeks to follow through on his plan to both decarbonize the U.S. economy by 2050 and to help battered industries recover from the economic meltdown.

 

Air travel contributes around 2% of global greenhouse gas emissions, the Air Transport Action Group said. It is projected to grow rapidly in coming decades if airlines do not quickly switch to “sustainable aviation fuel.”

 

This is made from biologically-sourced wastes like old cooking oil, animal fat and plant oils and is a much more expensive product than traditional jet fuel.

 

The sustainable aviation fuel industry senses a political opening with the Biden administration after four years during which former President Donald Trump downplayed the threats from global warming and backed regulations that maximized fossil fuels development.

 

“The difference is we’ve got an ear now that’s much more sympathetic to figuring out near-term solutions to policy, research and development,” said Bryan Sherbacow, chief commercial officer for low-carbon fuels provider World Energy.

 

The National Air Transportation Association, which represents more than 3,000 companies across the aviation industry, said it was due to meet with the Federal Aviation Administration this month to sell an incentive for sustainable aviation fuel of up to $2 a gallon, which industry analysts estimate would be one of the priciest fuel incentives in the country.

 

With a Democratic majority in the House of Representative and an evenly split Senate, White House support for legislation on incentives is pivotal.

 

The FAA said in a statement to Reuters that it could not verify information about specific meetings, though it said it was a “strong proponent” of sustainable aviation fuels.

 

NATA said it is also trying to meet with the Department of Transportation.

 

Airlines for America (A4A), which represents U.S. airline companies, including United, American Airlines and Southwest, said it has also been in contact with the Biden administration’s climate change officials to discuss expanding the sustainable aviation fuel market.

 

 

Currently, A4A members use only about 1.5 million gallons of green plane fuel in the United States a year, out of a total commercial jet fuel market that exceeds 620 million barrels annually, based on data from A4A and the Energy Information Administration.

 

The price of sustainable aviation fuel can be three or four times higher than traditional jet fuel, making it uneconomical without government support, said Nancy Young, A4A’s vice president of environmental affairs.

 

Currently, sustainable aviation fuel producers are eligible for a $1 per gallon subsidy under an existing federal biodiesel tax credit. The fuel is also eligible for incentives under the U.S. Renewable Fuel Standard and California’s Low Carbon Fuel Standard, which both encourage clean fuel production by generating tradable credits.

 

U.S. Representative Julia Brownley, a Democrat from California, introduced new legislation in early February that would boost those incentives by authorizing $1 billion in federal funding and by creating a blender’s tax credit specific to sustainable aviation fuel.

 

Analysts said a well-thought out incentive structure - even if expensive - could help to decarbonize an industry that will have to rely on some form of liquid fuels for decades.

 

“Aviation is likely to be a source of carbon emissions for a very long time,” said Robert Campbell, head of oil products research at Energy Aspects. “The decarbonization options for aviation are challenging, to say the least.”

 

COMPANIES PLACE BETS

Several other countries have already proposed sustainable aviation fuel mandates or are exploring them as a means of addressing increasing carbon output from air travel. A mandate in Norway came into force in January 2020, while the Netherlands is set to have one in place by 2023.

 

Globally, more than 250,000 flights have run on sustainable aviation fuel since 2016, while an estimated 10.6 million gallons were produced in 2020, the International Air Transport Association said.

 

Several companies are betting on future growth.

 

Chicago-based Boeing, a leading manufacturer of commercial jetliners, for example, has committed to fly with 100% sustainable aviation fuels by 2030, it said in January.

 

Meanwhile, Neste, a Finnish oil refiner and renewable fuels producer, said it plans to expand its sustainable aviation fuel global production capability by early 2023 to 510 million gallons per year from 34 million gallons currently.

 

While several U.S. petroleum refiners have made capital investments in retrofitting their plants to produce renewable diesel, they are agnostic about legislation regarding tax credits for sustainable aviation fuel, several U.S. refining industry sources told Reuters.

 

So far, only Phillips 66 has announced its intent to produce the fuel at its planned renewable fuels facility in Rodeo, California. Valero, meanwhile, has said it could produce sustainable aviation fuel in the future “when we need to pivot there.”

 

 

 

Google names exec to oversee responsible AI research after staff unrest

OAKLAND, Calif. (Reuters) - Alphabet Inc’s Google on Thursday named Marian Croak, one of its few Black executives, to oversee research on responsible artificial intelligence (AI) after weeks of internal anger over its firing of a prominent Black scientist.

 

Google confirmed Croak will manage 10 teams, including a dozen scientists studying the ethical considerations of automated technologies known as AI. Ethical AI co-lead Timnit Gebru said in December that Google abruptly fired her for contesting company orders.

 

Employees for weeks have expressed concern that Gebru’s critiques of Google led to unfair punishment, and Croak has been among executives trying to broker a way forward between staff and management.

 

Croak, a vice president of engineering who will report to Google AI chief Jeff Dean, told employees in a Thursday meeting that she respected Gebru and that what happened to her was unfortunate.

 

In a video on Google’s blog, she also acknowledged dissent in the research areas now in her purview. “There’s quite a lot of conflict right now within the field, and it can be polarizing at times, and what I’d like to do is just have people have the conversation in a more diplomatic way,” she said.

 

Google employee Alex Hanna on Twitter called the news about Croak “a betrayal,” saying it occurred behind the Ethical AI team’s back and did not address demands the team made after Gebru’s firing.

 

Gebru said in a statement, “Marian is a highly accomplished trailblazing scientist that I had admired and even confided in. It’s incredibly hurtful to see her legitimizing what Jeff Dean and his subordinates have done to me and my team.”

 

Croak, who previously was working on site reliability for Google, will also oversee teams doing research related to accessibility, social good and fairness in health algorithms.

 

 

 

Bitcoin is 'economic side show' and poor hedge against stocks: JP Morgan

TOKYO (Reuters) - Bitcoin is an “economic side show” and a poor hedge against a decline in equity prices, analysts at JP Morgan said in a sobering assessment that could undercut the cryptocurrency’s rise to record highs.

 

Current prices are well above JP Morgan’s estimates of fair value and the mainstream adoption of bitcoin increases its correlation with cyclical assets, which reduces the benefits of diversifying into bitcoin, the investment bank said in a memo.

 

Bitcoin, the most popular cryptocurrency, last traded at $51,116 on Friday, down from a record high of $52,640 reached on Wednesday. Rival cryptocurrency ether traded near a record of $1,951 reached earlier on Friday.

 

Bitcoin has surged by 45% so far this month, fuelled by signs it is winning acceptance among mainstream investors and companies, such as Tesla, Mastercard and BNY Mellon, but many observers remain sceptical of the unregulated and highly volatile digital asset.

 

“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,” analysts at JP Morgan said.

 

Some of bitcoin’s supporters argue that the cryptocurrency is “digital” gold that can hedge against inflation and declines in the dollar.

 

Based on that logic, bitcoin would need to rise to $146,000 in the long-term for its market capitalisation to equal total private-sector investment in gold via exchange-traded funds or bars and coins, according to JP Morgan.

 

Tesla’s chief executive Elon Musk said on Thursday that owning bitcoin was only a little better than holding cash. He also defended Tesla’s recent purchase of $1.5 billion of bitcoin, which re-ignited mainstream interest in the digital currency.

 

 

 

Asian shares slip from record highs on rising bond yields, weak U.S. data

SYDNEY (Reuters) - Asian stocks pulled back from all-time peaks on Friday as higher longer-dated bond yields and underwhelming U.S. data dented investor confidence in a faster economic recovery from the COVID-19 pandemic, while gold hit a seven-month trough.

 

Europe’s eurostoxx 50 futures and Germany’s DAX futures were both up 0.2%, while futures for London’s FTSE were barely changed. E-mini futures for the S&P 500 were slightly lower.

 

MSCI’s broadest index of Asia Pacific shares outside of Japan was last down 0.1% at 733.9 from a record high of 745.89 touched on Thursday.

 

The index is on track for a small weekly loss after two consecutive weeks of gains.

 

Since the start of the year, the index has surged nearly 10.5%, largely led by easy monetary and fiscal policies around the world and initial rollouts of COVID-19 vaccines.

 

On Friday, Australia’s benchmark S&P/ASX 200 index finished 1.3% down while Japan’s Nikkei fell 0.7%.

 

Chinese shares, which started the day in the red, recouped losses with the blue-chip CSI300 up 0.2%.

 

“It’s kind of odd to think that only a year ago investors were worried about depression and deflation and now they are worried about overheating and inflation,” said Shane Oliver, Sydney-based economist for AMP.

 

“The big picture backdrop of still low underlying inflation and spare capacity in jobs markets, combined with economic and profit recovery and low interest rates is a positive one for growth assets, particularly shares,” he added.

 

Core bond yields have pushed higher globally led by the so-called “reflation trade” where investors wager on a pick-up in growth and inflation. Growing momentum for coronavirus vaccine programmes and hopes of massive fiscal spending under U.S. President Joe Biden have spurred reflation trades.

 

Germany’s 10-year yield on Thursday posted its highest close since June, British 10-year yields traded at a 10-month top of 0.65% and U.S. Treasury yields are hovering near one-year highs around 1.3%, a large factor supporting the U.S. dollar.

 

Rising bond yields hurt the appeal of gold, with spot prices hitting a seven-month low of $1,759.3 an ounce on Friday. [GOL/]

 

While rising yields weighed on investor sentiment, “disappointing U.S. jobless figures didn’t help the cause, either,” said Rodrigo Catril, forex strategist at National Australia Bank.

 

An unexpected increase in the number of Americans seeking jobless benefits weighed heavily on the outlook. The Labor Department reported initial unemployment claims rose by 13,000 to 861,000, injecting scepticism about how quickly the U.S. economy could rebound from the global pandemic.

 

Further, U.S. housing starts fell 6.0% in January, the first decline in five months.

 

On Wall Street, the Dow fell 0.38%, the S&P 500 lost 0.44%, and the Nasdaq Composite 0.72%.

 

In currencies, the dollar was steady with its index at 90.511.

 

The British pound held near its highest in over three years at $1.3983 led by the country’s successful vaccine programme which has seen 16.5 million people already inoculated. It is on track for a sixth straight weekly rise. [FRX]

 

The euro is poised for a small weekly loss. The single currency was last at $1.2098.

 

The risk sensitive Australian dollar was on track for a third straight weekly rise, last trading at $0.7787.

 

In commodities, oil markets saw some profit-taking following days of gains that were driven by a deep freeze across Texas that weighed on production. [O/R]

 

Brent crude fell 88 cents to at $63.37 a barrel. U.S. crude futures slipped 63 cents to $59.89 a barrel.

 

 

 

Elon Musk says bitcoin is slightly better than holding cash

(Reuters) - Tesla Inc CEO Elon Musk on Thursday said that owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold.

 

“However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere,” Musk said in a tweet. “Bitcoin is almost as bs as fiat money. The key word is ‘almost’.”

 

He also defended Tesla’s action to invest in bitcoin, saying that the difference with cash made it “adventurous enough” for the S&P 500 company to hold the cryptocurrency.

 

Tesla’s $1.5 billion bitcoin purchase set the cryptocurrency soaring toward this week’s record peak above $50,000 while Musk’s recent promotion of dogecoin on Twitter also lifted the price of that cryptocurrency.

 

Bitcoin was steady just below a record peak of $51,284 on Friday.

 

 

 

Renault clings to turnaround after record $9.7 billion loss

PARIS (Reuters) - Renault said on Friday that margins and sales had begun to recover in the second half of 2020 as it embarks on a turnaround plan, though the COVID-19 pandemic dragged the French carmaker to an 8 billion euro ($9.68 billion) loss last year.

 

Chief Executive Luca de Meo, who took over in July, is looking at ways to boost profitability and sales at Renault while pushing ahead with cost cuts.

 

He warned on Friday that 2021 might still be rocky, including due to a shortage of electronic chips which is wreaking havoc across the car industry, but said Renault was focused on its recovery as profitability inches up.

 

“2021 is set to be difficult given the unknowns regarding the health crisis as well as electronic components supply shortages,” De Meo said in a statement.

 

The chips shortage should reach a peak in the second quarter, Renault added, estimating it could affect its production by about 100,000 vehicles this year.

 

The group was already loss-making in 2019, to the tune of 141 million euros, and it took a sharp hit in 2020 as output faltered and dealerships closed during lockdowns to fight the pandemic, which also hurt its Japanese partner Nissan.

 

Analysts polled by Refinitiv had expected a 7.4 billion euro loss for 2020.

 

Renault has begun to raise prices on some car models, and group operating profit, which was negative for 2020 as a whole, improved in the last six months of the year, reaching 866 million euros, or 3.5% of revenue.

 

Sales were still falling in the second half, but less sharply.

 

Renault is slashing jobs and trimming its range of cars, allowing it to slice spending in areas like research and development too, as it focuses on redressing its finances.

 

It was already struggling more than some rivals with sliding sales before the pandemic, after years of a vast expansion drive it is now trying to rein in, focusing on profitable markets.

 

($1 = 0.8269 euros)

 

 

 


 


 


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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