Major International Business Headlines Brief::: 28 February 2021

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Major International Business Headlines Brief::: 28 February 2021

 


 

 


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ü  Six million accidental savers 'created by Covid crisis'

ü  Coronavirus: Biden's $1.9tn Covid relief bill passes House vote

ü  Cryptocurrencies: Why Nigeria is a global leader in Bitcoin trade

ü  Buffett upbeat on U.S. and Berkshire, buys back stock even as pandemic
hits results

ü  Robinhood plans confidential IPO filing as soon as March: Bloomberg News

ü  Aramco seeks one-year extension on $10 billion loan: sources

ü  GameStop rally fizzles; shares still register 151% weekly gain

ü  Wall Street Week Ahead: Investors weigh new stock leadership as broader
market wobbles

ü  Bitcoin extends retreat from record high to hit lowest in 20 days

ü  Warren Buffett's $10 billion mistake: Precision Castparts

ü  Porsche to participate in fundraising of electric supercar maker Rimac:
Automobilwoche

ü  Kenya's Year On Year Inflation Rises to 5.78pc in February - Data

ü  Ethiopia: 'Fight Against Locust Invasion Shows Progress'

ü  Ethiopia's Quality Coffee Attracting Better Prices

ü  Tanzania: AfDB Forecasts Strong Dar Economic Recovery

 

 

 


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

 


 

Six million accidental savers 'created by Covid crisis'

More than six million people have become "accidental savers" during the
pandemic by keeping jobs while facing fewer outgoings, a report has said.

 

While many people have faced greater debts, redundancy, or reduced income
during furlough, others have seen their financial position improve.

 

Lower travel costs and fewer holidays or meals out have contributed,
financial consultancy LCP found.

 

Longer-term home working could extend the benefits, it suggested.

 

Financial impact

Millions of people have seen their finances hit hard by Covid, particularly
those already on lower incomes.

 

Pressures of bigger energy and food bills, as well as other costs owing to
children remaining at home, and a 20% cut in income while on furlough, have
contributed to the squeeze.

 

More than nine million people had to borrow more than they usually would by
December, owing to the coronavirus crisis, figures from the Office for
National Statistics (ONS) showed.

 

However, the LCP report suggests that another six million people have seen
their bank balances benefit from fewer outgoings during the restrictions on
movement. Many of them could have saved thousands of pounds.

 

Employees who have been able to work from home - often not those in the
youngest age groups - have seen commuting and travel costs fall.

 

Those aged over 55 had been most likely to save as a result of holidays
being cancelled or not booked, and older people were also most likely to
have cut back on eating out, the report said.

 

While some of these issues might only be temporary, the likelihood of a
long-term change in the mix of office and home working could see people
continue to save on travel costs.

 

The report suggested the money saved could be put to good use by cutting
existing debts, putting money aside in a rainy day fund for unforeseen
emergency bills, or put into longer-term savings pots such as pensions.

 

However, interest rates for savers are low in the current economic climate.

 

Heidi Allan, co-author of the LCP report, said: "Employers will have a key
part to play in ensuring that workers take advantage of this opportunity and
do not simply allow these increased balances to sit in current accounts and
gradually drift away."

 

Former pensions minister Steve Webb, a partner at LCP and another author of
the report, said: "There are few silver linings from the current crisis, but
the emergence of a large group of accidental savers could be one of them. 

 

"A concerted effort is needed to use this unexpected opportunity to create
more of a savings culture, especially among those who may permanently
benefit from reduced outgoings as a result of a switch to greater home
working."--BBC

 

 

 

Coronavirus: Biden's $1.9tn Covid relief bill passes House vote

President Joe Biden's $1.9tn (£1.4tn) relief plan to help Americans during
the Covid pandemic has been approved in the House of Representatives.

 

The vote was along partisan lines. Two Democrats joined Republicans - who
see it as too expensive - in opposing it.

 

The bill must now go to the evenly-divided Senate, which has already blocked
a key element - doubling the US minimum wage to $15 an hour.

 

The package seeks to boost vaccinations and testing, and stabilise the
economy.

 

The cash would be extended as emergency financial aid to households, small
businesses and state governments. Unemployment is close to 10%, with some 10
million jobs lost in the pandemic.

 

The vote comes in the same week the US passed 500,000 coronavirus-related
deaths - the largest figure of any nation in the world.

 

In brief remarks at the White House on Saturday, President Biden hailed the
House's approval of the plan, saying he hoped it would receive "quick
action" at the Senate.

 

"We have no time to waste," he said. "If we act now, decisively, quickly and
boldly we can finally get ahead of this virus, we can finally get our
economy moving again. And the people in this country have suffered far too
much for too long. We need to relieve that suffering."

 

How did the vote play out?

Joe Biden had appealed for bipartisan unity when he took office last month,
but there was little on show in the early hours of Saturday when the
Democrats scraped the bill through on a 219 to 212 vote.

 

President Biden has championed what he calls the American Rescue Plan as a
way to help struggling Americans through Covid-19.

 

But Republicans say the plan is unnecessarily large and stuffed with
Democratic priorities unrelated to the pandemic.

 

The divisions were reflected by the representatives.

 

Democrat Brendan Boyle said: "After 12 months of death and despair, the
American recovery begins tonight."

 

The leader of the Republicans in the House, Kevin McCarthy, said: "Democrats
are so embarrassed by all the non-Covid waste in this bill that they are
jamming it through in the dead of night."

 

What's in the bill?

It is the third major US spending package of the pandemic, and actually not
quite as big as Donald Trump's $2tn last March.

 

The key elements include:

 

·         A $1,400 cheque per person, although payments phase out for higher
incomes

·         Extending jobless benefits until the end of August to help the
more than 11 million long-term unemployed

·         Parents of children under the age of 18 to get a year of monthly
benefits

·         $70bn to boost Covid testing and vaccinations

·         Financial support for schools and universities to help them reopen

·         Grants for small businesses and other targeted industries

·         Funds for local government

One of the other major elements is the increase of the minimum wage from
$7.25 an hour - where it has been since 2009 - to $15.

 

But on Thursday, Elizabeth MacDonough, the non-partisan Senate
parliamentarian - who interprets its rules - said that raising the minimum
wage would violate the budgetary limits allowed in this kind of measure.

 

Unemployed in the US: 'I don't know what to do

The bill that passed in the House does still include the increase and it
remains unclear how the issue can be resolved.

 

The minimum wage rise remains a key Democrat goal, particularly for the
party's progressive wing, and some top Democrats are considering a measure
to penalise employers who pay less than $15 an hour.

 

Republicans argue the minimum wage increase would be too heavy a toll on
firms struggling to rebuild following the Covid-19 outbreak.

 

Mr McCarthy has said the only way out of Covid is to "fully reopen our
economy".

 

What happens next?

The package goes to the Senate - spilt evenly between Democrats and
Republicans 50-50 - probably next week. The rules of the Senate do allow a
reconciliation bill like this to be passed on a simple majority, rather than
60-40.

 

In the event of a tie, Democrat Vice-President Kamala Harris gets the
deciding vote.

 

Traditionally, the text the Senate agrees then has to be reconciled with the
House bill. The single bill is voted on again and passed to the president
for signing.

 

Democrats are confident a bill will go through, but the minimum wage issue
is problematic.

 

Senator Bernie Sanders was among those angry that "archaic" procedural rules
were blocking the increase.

 

House Speaker Nancy Pelosi has said a bill will still pass, even if this
section is taken out by the Senate.

 

Work will still need to be done with lawmakers to get a version of the bill
over the line. The Democrats want it done by 14 March at the latest.--BBC

 

 

 

Cryptocurrencies: Why Nigeria is a global leader in Bitcoin trade

More cryptocurrency trading goes on in Nigeria than almost anywhere else in
the world, reflecting a loss of faith in more traditional forms of
investment, as Ijeoma Ndukwe reports.

 

Tola Fadugbagbe recalls moving to Lagos from his small south-western town 10
years ago with dreams of brighter prospects.

 

Instead, the 34-year-old ended up in a series of odd jobs earning the
minimum wage to survive - a typical story for many young Nigerians who are
just trying to get by.

 

It was not until 2016 that online adverts for Bitcoin piqued his interest
and he began his cryptocurrency journey.

 

"I started intensive research," Mr Fadugbagbe told the BBC.

 

"I was spending hours every day watching videos on YouTube and reading
articles about Bitcoin. I didn't have much money so I started with $100 to
$200."

 

It was a decision that transformed his life.

 

Tola FadugbagbeTola Fadugbagbe

No Nigerian comes to cryptocurrency and wants to look back. It's a big
opportunity."

Tola Fadugbagbe

 

 

At the time that we spoke, Mr Fadugbagbe, who now trades full time and
teaches budding investors, said he had cryptocurrency worth more than
$200,000 (£140,000) in his possession.

 

"I'll soon be moving into my own house, which I'm building. I have a farm -
a very big one - courtesy of cryptocurrency," he laughs gleefully,
unencumbered by concerns that he could be inflating an investment bubble
that will one day burst.

 

"No Nigerian comes to cryptocurrency and wants to look back. It's a big
opportunity."

 

Success stories like Mr Fadugbagbe's have attracted millions of Nigerians to
digital currencies such as Bitcoin.

 

A 2020 survey by data platform Statista revealed that 32% of Nigerians are
users of cryptocurrencies - the highest proportion of any country in the
world.

 

Nigeria's cryptocurrency business

2020

 

1.1m

cryptocurrency trades per month in Nigeria on the Paxful platform

 

$65mtraded every month

 

$100was spent on each trade on average

 

$215was the average spent on each trade in the US

 

Estimates show that of the top 10 countries for trading volumes, Nigeria
ranked third place after the US and Russia in 2020, generating more than
$400m worth of transactions.

 

Although Nigeria has eased out of its second recession in less than five
years, the challenging economic climate remains, making alternative sources
of income and alternative currencies attractive.

 

The Central Bank of Nigeria devalued the currency, the naira, by 24% last
year. There are fears of a further fall in value by as much as 10% this
year.

 

Meanwhile prices continue to rise, with food inflation climbing to its
highest point since July 2008.

 

Michael UgwuMichael Ugwu

I'd made naira but lost US dollars. That's when I realised we're hustling
backwards"

 

When Michael Ugwu, the founder of a media company in Lagos, sold land he
owned in 2018, he realised he needed to explore new investment
opportunities.

 

Although his naira earnings had gone up, he was worse of in US dollar terms
because of the devaluation.

 

"I'd made naira but lost US dollars. That's when I realised we're hustling
backwards. It was then that I started to look into Bitcoin."

 

The move to invest in digital currencies has paid off.

 

"On some of my currencies I've made 50 times what I invested. On Bitcoin
it's easily grown 10 times in the last year," he says.

 

The former banker sees cryptocurrency as an evolution of finance, describing
it as "finance 2.0".

 

Despite the currency's volatility, Mr Ugwu sees it as a valuable tool to
"hedge" or reduce the risk of living in what he describes as a high-risk
environment.

 

'Better banking experience'

His wife Onyeka started to invest when faced with high commission charges to
transfer cash between her Nigerian and British accounts.

 

"For me it's a banking system," she says.

 

"It wasn't about making money. It was about how [to] have a better banking
experience. Look at it as saving your money in a currency that can keep the
value of the money."

 

Despite its appeal, economists around the world warn that Bitcoin, and other
cryptocurrencies, are high-risk investments.

 

There are legitimate concerns that Bitcoin's soaring value is a speculative
bet that will one day leave many in ruins.

 

An international banker based in Nigeria, who asked to remain anonymous,
says it is a financial product that carries significant potential regulatory
risk.

 

He says that "governments and central banks have not decided whether they
can, or should, regulate it".

 

"On a technical level I'm not 100% sure that the security that it uses is
entirely foolproof. I think there are still some technical uncertainties,"
he adds.

 

In an effort to regulate the market, Nigeria's central bank banned banks
from facilitating cryptocurrency-related transactions in 2017, but the ban
remained largely unenforced.

 

Cryptocurrency ban

However, this year the institution doubled down on its stance.

 

In a statement released on 7 February it cited the need to protect the
general public and safeguard the country from potential threats posed by
"unknown and unregulated entities" that are "well-suited for conducting many
illegal activities".

 

Since then, many Nigerians have reported that their bank accounts have been
frozen due to cryptocurrency-related activity.

 

Mr Fadugbagbe's bank manager called to advise him that his account would be
closed, giving him a day to transfer his funds.

 

However, not everyone has been so fortunate.

 

One source says his bank account was frozen two weeks ago with tens of
thousands of naira in it.

 

The software engineer says the bank would not disclose the reason for its
actions.

 

He suspects he was targeted for running a cryptocurrency remittance
business.

 

Furthermore, the BBC was shown a customer's bank correspondence, which
contains the warning: "We strongly advise that you do not use your account
for cryptocurrency-related activities so you don't get into trouble with the
law".

 

However many investors with the possibility say they will continue to trade
using their overseas bank accounts.

 

They say they can easily revert to peer-to-peer transactions. This means
that rather than transferring funds between a financial institution and a
cryptocurrency online trading platform, investors transfer funds directly to
each other or through a middle person as they buy and sell.

 

'Don't shut it off completely'

This is the method the cryptocurrency community used before the development
of the virtual currency marketplace ecosystem in Nigeria.

 

Mr Ugwu has also heard many in the business of cryptocurrency talk of
relocating to potentially more hospitable environments such as Ghana, Rwanda
and Sierra Leone.

 

The concerns of the authorities when it comes to cryptocurrencies being used
for illegal purposes are legitimate but some argue that they are being too
heavy handed.

 

A former Deputy Governor of the Central Bank, Kingsley Moghalu, believes
that the country should engage and manage the risks "rather than just
shutting it off completely - especially to the extent that it provides
livelihoods for many people in a depressed economy".

 

There are also fears that cryptocurrency could become a missed opportunity,
according to Gbite Oduneye who heads EGM Group, a Lagos-based brokerage
firm.

 

"Nigeria is the third largest place for cryptocurrency trade in terms of
volume," he explains. "If you don't take advantage, someone else will. Build
an ecosystem round it. Put in rules and regulations."

 

'I trust cryptocurrency more than shares'

Nigerians also see cryptocurrencies as a way to get around foreign currency
restrictions.

 

"There are a lot of restrictions on what we can and cannot do with our
foreign exchange," Nena Nwachukwu from popular trading platform Paxful
explains.

 

"Nigerians find it easier to use [cryptocurrency] as an investment tool."

 

She saw awareness of their service grow in October 2020 during the #EndSars
protests against police brutality.

 

Attempts to crack down on the organisers by freezing their bank accounts led
to the increased use of digital currencies, which saw Bitcoin trend on
Twitter.

 

'My bank account was frozen because I took on the police'

Ms Nwachukwu says this resulted in a wave of new sign ups and an increase in
transactions.

 

At the heart of the rise of Bitcoin is a distrust of centralised financial
systems and top-down economic control, investors say.

 

Many express their frustrations with government policy and the decline of
the Nigerian economy.

 

None more so than Mr Fadugbagbe, who spent years struggling to scrape by as
what he describes as a "minimum-wage slave".

 

"I don't do shares and government bonds", he says. "Those are scams. I trust
cryptocurrency more."--BBC

 

 

Buffett upbeat on U.S. and Berkshire, buys back stock even as pandemic hits
results

(Reuters) - Warren Buffett’s enthusiasm for the future of America and his
company Berkshire Hathaway Inc has not been dimmed by the coronavirus
pandemic.

 

Buffett used his annual letter to investors to assure he and his successors
would be careful stewards of their money at Berkshire, where “the passage of
time” and “an inner calm” would help serve them well.

 

Despite the disappearance last year of more than 31,000 jobs from
Berkshire’s workforce, Buffett retained his trademark optimism, buying back
a record $24.7 billion of its stock in 2020 in a sign he considers it
undervalued.

 

He also hailed the economy’s capacity to endure “severe interruptions” and
enjoy “breathtaking” progress.

 

“Our unwavering conclusion: Never bet against America,” he said.

 

Tom Russo, a partner at Gardner, Russo & Gardner in Lancaster, Pennsylvania
and longtime Berkshire investor, said: “He’s a deep believer in his company
and the country.”

 

The letter breaks an uncharacteristic silence for the 90-year-old Buffett,
who has been almost completely invisible to the public since Berkshire’s
annual meeting last May.

 

But while touching on familiar themes, including Wall Street bankers’
avarice for dealmaking fees that benefit them more than companies they
represent, Buffett did not dwell on the pandemic, a prime factor behind
Berkshire’s job losses.

 

He also did not address recent social upheavals or the divisive political
environment that some companies now address more directly.

 

“The letter highlighted the innovation and values that have become the
backbone of America, and that’s perfectly acceptable,” said Cathy Seifert,
an analyst at CFRA Research with a “hold” rating on Berkshire.

 

“Given the reverence that investors have for him, the letter was striking
for what it omitted,” she added. “A new generation of investors demands a
degree of social awareness, and that companies like Berkshire set out their
beliefs, standards and goals.”

 

Buffett also signaled a long-term commitment to Apple Inc, where Berkshire
ended 2020 with $120.4 billion of stock despite recently selling several
billion dollars more.

 

He called Apple and the BNSF railroad Berkshire’s most valuable assets -
“it’s pretty much a toss-up” - other than its insurance operations, and
ahead of Berkshire Hathaway Energy. “The family jewels,” he called those
four investments.

 

PROFIT RISES EVEN AS JOBS ARE LOST

Berkshire on Saturday also reported net income of $35.84 billion in the
fourth quarter, and $42.52 billion for the year, both reflecting large gains
from its stocks.

 

Operating income, which Buffett considers a more accurate measure of
performance, fell 9% for the year to $21.92 billion.

 

The stock buybacks have continued in 2021, with Berkshire repurchasing more
than $4 billion of its own stock. It ended 2020 with $138.3 billion of cash.

 

However, Buffett bemoaned fixed income as an investment, saying that “bonds
are not the place to be these days.” The income from a 10-year U.S. Treasury
bond fell 94% from a 15.8% yield in September 1981 to 0.93% at the end of
2020. Benchmark Treasury yields have jumped since but are still low by
historic measures.

 

“Fixed-income investors worldwide – whether pension funds, insurance
companies or retirees – face a bleak future,” the letter said.

 

Berkshire, based in Omaha, Nebraska, has more than 90 operating units
including the BNSF railroad, Geico car insurer, Dairy Queen ice cream and
See’s candies.

 

Its workforce declined 8% from a year earlier to about 360,000 employees.
Bigger drops were reported at BNSF, which shed 5,600 jobs, and See’s, where
employment fell 16%.

 

The pandemic hit no Berkshire business harder than Precision Castparts Corp,
which shed 13,473, or 40%, of its jobs.

 

Berkshire bought the aircraft and industrial parts maker in 2016 for $32.1
billion, Buffett’s largest acquisition, and took a $9.8 billion writedown as
the pandemic decimated travel and punished Precision’s aerospace customers.

 

“I paid too much for the company,” Buffett wrote. “I was simply too
optimistic about PCC’s normalized profit potential.

 

“PCC is far from my first error of that sort,” he said. “But it’s a big
one.”

 

Berkshire said some businesses are beginning to recover form the pandemic.

 

“Certainly 2021 is going to be a much stronger year, dependent upon the
speed of vaccinations and the opening of the U.S. economy,” said Jim
Shanahan, an analyst at Edward Jones & Co with a “buy” rating on Berkshire.

 

Buffett also said Berkshire’s annual meeting will be held in Los Angeles
rather than Omaha, allowing 97-year-old Vice Chairman Charlie Munger, a
Californian, to rejoin him and answering about 3-1/2 hours of shareholder
questions.

 

Vice Chairmen Greg Abel, 58, and Ajit Jain, 69, who are widely considered
frontrunners to succeed Buffett as chief executive, will also be available
to answer questions.

 

Buffett said he hopes Berkshire will in 2022 resume its annual shareholder
weekend in Omaha, which normally draws around 40,000 people - an
“honest-to-God annual meeting, Berkshire-style,” he wrote.

 

 

 

Robinhood plans confidential IPO filing as soon as March: Bloomberg News

(Reuters) - Online brokerage Robinhood, at the centre of this year’s retail
trading frenzy, is planning to file confidentially for an initial public
offering as soon as March, Bloomberg News reported late on Friday, citing
sources.

 

The California-based brokerage has held talks in the past week with
underwriters about moving forward with a filing within weeks, Bloomberg
said.

 

Robinhood did not immediately respond to a request for comment.

 

Reuters reported last year that Robinhood has picked Goldman Sachs Group Inc
to lead preparations for an initial public offering which could value it at
more than $20 billion.

 

Robinhood was at the heart of a mania that gripped retail investors in late
January following calls on Reddit thread WallStreetBets to trade certain
stocks that were being heavily shorted by hedge funds.

 

The online brokerage tapped around $3.4 billion in funding after its
finances were strained due to the massive trading in shares of companies
such as GameStop Corp

 

 

 

Aramco seeks one-year extension on $10 billion loan: sources

DUBAI (Reuters) - Saudi Aramco has asked banks to extend by a year a $10
billion loan it raised last May, two sources familiar with the matter said,
suggesting that rebounding crude prices are not pushing the oil giant to
reduce debt for the time being.

 

The sources confirmed a report by Loan Pricing Corporation, a fixed-income
news provider owned by Refinitiv.

 

It is at the banks’ discretion whether to extend the loan, but lenders will
likely agree in order to maintain a good relationship with Aramco in the
hope of receiving future business, LPC said citing a banker.

 

One of the sources, who confirmed the report, echoed that, saying: “It’s
Aramco. Why not?”

 

Aramco declined to comment.

 

LPC cited a banker as saying it was possible Aramco would try to push down
pricing by arguing that market conditions have improved since May, when oil
prices were much lower and there was much uncertainty about the pandemic.

 

The loan started at 50 basis points over LIBOR, a rate that steps up as more
money is drawn from the facility, one of the sources told Reuters, adding
Aramco could try to reduce pricing by 10 to 15 bps.

 

Brent crude futures settled at $66.13 a barrel last week. In May last year
they were trading at around $30 a barrel, as global demand plunged due to
the coronavirus crisis.

 

Sources told Reuters last year that Aramco would use the loan to back its
acquisition of a 70% stake in Saudi Basic Industries Corp (SABIC) from Saudi
Arabia’s Public Investment Fund, a deal worth almost $70 billion.

 

LPC had previously reported, citing a banker, that the loan would be repaid
with the proceeds from a bond sale by the fourth quarter of 2020. That did
not happen, even though Aramco raised $8 billion in a multi-tranche bond
deal in November.

 

Saudi Aramco’s profits plummeted last year, but it stuck to a promised $75
billion annual dividend, most of which goes to the Saudi government.

 

HSBC said this month that Aramco’s prospects look more positive and
promising for 2021, hinting at declining net debt and a possible dividend
hike.

 

 

GameStop rally fizzles; shares still register 151% weekly gain

(Reuters) - GameStop Corp closed 6% lower on Friday as an early rally
fizzled but the stock finished the week 151% higher in a renewed surge that
left analysts puzzled.

 

The video game retailer's shares closed at $101.74 after retreating from a
session high of $142.90. The weekly rocket ride higher came despite a
broader market selloff that sent the benchmark S&P 500 .SPX down 2.5% over
the same time.

 

Analysts have struggled to find a clear explanation, and some were skeptical
the rally would have legs.

 

“You might be able to make some quick trading money and it could be a lot of
money, but in the end, it’s the greater fool theory,” said Eric Diton,
president and managing director at The Wealth Alliance in New York. The
theory refers to buying stocks that are over-valued, anticipating a “greater
fool” will buy them later at a higher price.

 

Analysts mostly ruled out a short squeeze like the one that fueled
GameStop’s rally in January, when individual investors using Robinhood and
other apps punished hedge funds that had bet against the stock, forcing them
to unwind short positions. Many GameStop buyers took their cues from online
investment forums on Reddit and elsewhere.

 

Short interest accounted for 28.4% of the float on Thursday, compared with a
peak of 142% in early January, according to S3 Partners.

 

Options market activity in GameStop, which has returned to the top of the
list in a social media-driven retail trading frenzy, suggested investors
were betting on higher prices, higher volatility, or both.

 

Refinitiv data showed retail investors have been buying deep
out-of-the-money call options, which have contract prices to buy far higher
than the current stock price.

 

Many of those option contracts were set to expire on Friday, meaning
handsome gains for those who bet on a further rise in GameStop’s stock
price.

 

Call options, profitable for holders if GameStop shares hit $200 and $800
this week, have been particularly heavily traded, the data showed.
GameStop’s stock traded this week as high as $184.54 on Thursday, far below
the $483 intraday high it hit in January.

 

“The actors are looking to take advantage of everything they can to maximize
their impact and the timing is important,” said David Trainer, chief
executive officer of investment research firm New Constructs. “The options
expiration will contribute to their strategy on how to push the stock as
much as they can and maximize their profits.”

 

Bots on major social media websites have been hyping GameStop and other
“meme stocks,” although the extent to which they influenced prices was
unclear, according to analysis by Massachusetts-based cyber security company
PiiQ Media. [nL1N2KW2TW]

 

The U.S. Securities and Exchange Commission (SEC) on Friday suspended
trading in 15 companies because of “questionable trading and social media
activity.” GameStop was not among them.

 

The 15 companies were in addition to six stocks it recently suspended due to
suspicious social media activity.

 

Robinhood said it has received inquiries from regulators about temporary
trading curbs it imposed during a wild rally in shorted stocks earlier this
year.

 

Other Reddit favorites were also lower on Friday, with cinema operator AMC
Entertainment down 3.4%, headphone maker Koss off 22.4% and marijuana
company Sundial Growers down 2.9%.

 

 

 

Wall Street Week Ahead: Investors weigh new stock leadership as broader
market wobbles

NEW YORK (Reuters) - A shakeup in stocks accelerated by the past week’s
surge in Treasury yields has investors weighing how far a recent leadership
rotation in the U.S. equity market can run, and its implications for the
broader S&P 500 index.

 

Moves this week further spurred a shift that has seen months-long
outperformance for energy, financial and other shares expected to benefit
from an economic recovery, while a climb in Treasury yields weighed on the
technology stocks that have led markets higher for years.

 

The two-track market left the benchmark S&P 500 down for the week, and
sparked questions about whether it could sustain gains going forward if the
tech and growth stocks that account for the biggest weights in the index
struggle.

 

So far this year, the S&P 500, which gives more influence to stocks with
larger market values, is up 1.5%, while a version of the index that weights
stocks equally is up 5%.

 

“That just tells us the gains are less narrow, more companies are
participating, and I think that’s healthy,” said James Ragan, director of
wealth management research at D.A. Davidson.

 

The focus on market leadership comes as investors are weighing whether the
S&P 500 is due for a significant pullback after a 70% run since March, with
the rise in long-dormant yields the latest sign of trouble for equities as
it means bonds are more serious investment competition. The yield on the
10-year U.S. Treasury note this week jumped to a one-year peak of 1.6%
before pulling back.

 

Economic improvement will be in focus in the coming weeks, including the
monthly U.S. jobs report due next Friday, as will the country’s ability to
ensure widespread coronavirus vaccinations, especially as new variants
emerge.

 

Tech and momentum stocks helped drive returns in 2020 “when everyone was
locked down and all they had was their computer,” said Jack Ablin, chief
investment officer at Cresset Capital Management. “Now it seems with the
vaccines, the stimulus and the prospect of reopening that we are looking out
toward a recovery phase.”

 

The shift in the market this week is building on one that was fueled in
early November, when Pfizer’s breakthrough COVID-19 vaccine news generated
broad bets on an economic rebound in 2021.

 

Among the moves since that point: the S&P 500 financial and energy sectors
are up 29% and 65%, respectively, against a nearly 9% rise for the benchmark
index and 7% rise for the tech sector. The Russell 1000 value index has
gained 16.5% against a 4.3% climb for its growth counterpart, while the
smallcap Russell 2000 is up 34%.

 

“You definitely are seeing the reopening trade that has pretty much come
alive here,” said Gary Bradshaw, portfolio manager of Hodges Capital
Management.

 

Despite the gains, there remains “plenty of room for the reflation trade to
run from a valuation perspective,” Lori Calvasina, head of U.S. equity
strategy at RBC Capital Markets, said in a report this week. RBC is
“overweight” the financials, materials and energy sectors.

 

Rising rates tend to be favorable for more cyclical sectors, David
Lefkowitz, head of Americas equities at UBS Global Wealth Management, said
in a note, with financials, energy, industrials and materials showing the
strongest positive correlations among sectors with 10-year Treasury yields.

 

Still, how long the market’s reopening trade lasts remains to be seen.
Investors may be reluctant to stray from tech and growth stocks, especially
with many of the companies expected to put up strong profits for years.

 

Any setbacks with the economy or with efforts to quell the coronavirus could
revive the stay-at-home stocks that thrived for most of 2020.

 

And with a GameStop-fueled retail-trading frenzy taking hold this year,
banks and other stocks in the reopening trade may fail to draw the same
attention from amateur investors as stocks such as Tesla, said Rick Meckler,
partner at Cherry Lane Investments.

 

“There isn’t the pizzazz to those stocks,” Meckler said. “There rarely is a
potential for stocks to make the kind of moves that big tech growth stocks
have made.”

 

 

 

Bitcoin extends retreat from record high to hit lowest in 20 days

(Reuters) - Bitcoin fell to its lowest since Feb. 8 in thin trade on Sunday,
down 3.7% from Friday’s close as the pullback from a record high near
$60,000 continued.

 

The world’s biggest and best-known cryptocurrency has risen as much as 70%
since the start of the year, hitting a record high of $58,354.14 one week
ago amid increasing confidence that it will become a mainstream investment
and payments vehicle.

 

 

Warren Buffett's $10 billion mistake: Precision Castparts

(Reuters) - Warren Buffett makes mistakes too.

 

The 90-year-old billionaire on Saturday admitted he “paid too much” when his
Berkshire Hathaway Inc spent $32.1 billion in 2016 to buy aircraft and
industrial parts maker Precision Castparts Corp, its largest acquisition.

 

Berkshire wrote off $9.8 billion of Precision’s value last August, as the
coronavirus pandemic sapped demand for air travel and the Portland,
Oregon-based unit’s products.

 

In his annual letter to investors, Buffett said he bought “a fine company -
the best in its business,” and Berkshire was “lucky” to have Precision Chief
Executive Mark Donegan still in charge.

 

But Buffett said he was “simply too optimistic about PCC’s normalized profit
potential.”

 

Precision shed more than 13,400 jobs, or 40% of its workforce, in 2020, and
only recently has begun to improve margins, Berkshire said.

 

“I was wrong ... in judging the average amount of future earnings and,
consequently, wrong in my calculation of the proper price to pay for the
business,” Buffett wrote. “PCC is far from my first error of that sort. But
it’s a big one.”

 

 

Two years ago, Buffett admitted he “overpaid” for Kraft Foods when Berkshire
and private equity firm 3G Capital merged it in 2015 with their H.J. Heinz
Co to form Kraft Heinz Co.

 

And in his 2008 annual letter, Buffett called his 1993 purchase of Dexter
Shoe his “worst deal” ever, saying he had bought a “worthless business” and
compounded his error by using Berkshire stock rather than cash to fund the
acquisition.

 

“I’ll make more mistakes in the future - you can bet on that,” he wrote.

 

Tom Russo, a longtime Berkshire investor, welcomed Buffett’s candor.

 

“I admire Warren for taking personal responsibility for Precision
Castparts,” he said. “Few managers are willing to admit their responsibility
rather than pass on blame.”

 

 

Porsche to participate in fundraising of electric supercar maker Rimac:
Automobilwoche

FRANKFURT (Reuters) - Volkswagen unit Porsche is participating in a
financing round of Rimac Automobili that will see the electric supercar
maker raise 130 million-150 million euros ($157 million-$181 million), its
owner Mate Rimac told weekly Automobilwoche.

 

The fundraising should be completed in two to three months and another round
is planned at the end of the year, Rimac told the trade journal.

 

Porsche owns a 15.5% stake in Rimac Automobili and could raise its stake to
just below 50% in a deal that would also include the transfer of
Volkswagen’s supercar brand Bugatti to Rimac, Automobilwoche said.

 

Volkswagen and Rimac were not immediately available for comment on Sunday.

 

Porsche Chief Executive Oliver Blume said earlier this month that intense
discussions on Bugatti’s future were ongoing and that Rimac could play a
role as the brands were a good technological fit, adding that a decision was
expected in the first half of 2021.

 

Rimac has developed an electric supercar platform, which it supplies to
other carmakers, including Automobili Pininfarina.

 

“Supercars have a limited market, the market for components is much bigger.
That is why we are planning to expand our company,” Rimac told
Automobilwoche.

 

That includes plans to more than double Rimac Automobili’s workforce by
early 2023 to 2,500 from 1,000 currently, he said.

 

($1 = 0.8282 euros)

 

 

Kenya's Year On Year Inflation Rises to 5.78pc in February - Data

Nairobi — Kenya's year-on-year inflation in February increased to 5.78
percent compared to 5.69 percent last month.

 

Data from the Kenya National Bureau of Statistics reveals that the Consumer
Price Index was up by 0.70 percent from 112.576 in January to 113.365 in
February 2021.

 

During the period under review, the food and non-alcoholic beverages index
increased by 1.01 percent while the year-on-year food inflation stood at
6.93 percent in February.

 

"The food inflation was mainly attributed to increasing in prices of some
food items which outweighed the decrease in prices of other foodstuffs,"
reads the KNBS statement.

Prices of beef with bones, wheat flour white, and tomatoes increased by
0.78, 2.07, and 2.1 percent respectively.

 

However, a decrease was noted in other food items such as lemons, mangoes
and maize grain decreased by 5.64, 0.33, and 0.18 percent respectively.

 

During the same period, the housing, water, electricity, gas, and other
fuels' index increased by 0.43 percent between January and February 2021.

 

"The change was mainly due to an increase in the price of kerosene by 6.02
percent between January and February 2021," said KNBS Director General
Macdonald Obudho.

 

At the same time, the transport index decreased by 2.33 percent mainly due
to a rise in the pump prices of diesel and petrol by 5.66 and 7.57
respectively.-Capital FM.

 

 

Ethiopia: 'Fight Against Locust Invasion Shows Progress'

The scale of spring breeding of Locusts is expected to be limited because of
the ongoing control operations that continue to reduce the number of swarms
and the likelihood of poor spring rains starting in March, FAO announced.

 

As the report indicates, in Ethiopia, immature swarms persist in Oromia
(East Harerghe, Arsi, Borena) and in the Southern regions (South Omo, Konso)
including Southern areas of the Rift Valley where more swarms were reported.

 

However, the present situation in Ethiopia and the rest of the Horn of
Africa differs significantly from one year ago. According to FAO, the
current swarms are smaller in size and have not matured or laid eggs.

 

According to the Commission for Controlling the Desert Locust in the Central
Region, intensive ground and aerial control operations continue to make good
progress in reducing the number of swarms in Kenya and Ethiopia, especially
in the absence of significant rains required to mature and breed.

In this way, spring breeding, expected to occur from March to June, is
likely to be on a much-reduced level, considering that the latest
precipitation predictions continue to call for unusually dry conditions.

 

The few swarms that moved to Northern Ethiopia (Afar and Amhara) region
continued to Eritrea and reached the Red Sea coast, where they were
controlled.

 

A report from the commission indicated that numerous small immature swarms
persist in Northern and central Kenya, while swarms arriving from Ethiopia
and Somalia have declined.

 

Last year, FAO reported that an estimated 20.2 million people are facing
severe food insecurity in Ethiopia, Kenya, Somalia, South Sudan, Uganda, and
Tanzania.

 

USD 312 million is needed for FAO's rapid response and anticipatory action.

 

In Ethiopia, around 8.5 million people are highly food insecure due to the
impacts of COVID--19, desert locusts, displacement, and high food prices,
according to the Integrated Food Security phase classification (IPC).

 

According to FAO, One square km of swarm can eat the same food as 35,000
people in one day and increase 400 times in locust numbers in six
months.-Reporter.

 

 

 

Ethiopia's Quality Coffee Attracting Better Prices

Ethiopia is the motherland of Coffee Arabica. It is endowed with a rich
variety of coffee and its diverse origins.

 

Ethiopian coffee is rich with original flavor and aroma because of the
geographical (altitude, soil, temperature, rainfall, topography, ecology),
genotypic and cultural variety within the country.

 

Gizat Worku, General Manager of the Ethiopian Coffee Exporters Association
(ECEA) and coordinator of this year's Cup of Excellence, told The Ethiopian
Herald that in the first six months of this budget year, Ethiopia exported
92,000 tons of coffee and earned 304 million USD. Compared to last year's
performance, it covers one-third of the total export. But the first six
months of the year saw a slight decline in coffee exports.

 

The main reason for this is that Ethiopian coffee production will start in
January and sales will start this month. As a result, higher coffee prices
are expected in the coming months. Of course, coffee exports have been low
over the past six months, but it was sold at a better price than last year.

Germany used to be the largest buyer of Ethiopian coffee, and this year
Saudi Arabia has become the largest buyer. From the exported Ethiopian
coffee products for the international market in the past six months, 21,000
and 12,000 went to Saudi Arabia and Germany respectively.

 

As the Covid -19 pandemic has affected every sector during the past months,
its impact has also affected the coffee sector. Saudi Arabia, Germany,
Belgium and Japan are the common destinations of Ethiopian coffee.

 

According to Gizat, ECEA is working hard to ensure the benefit of coffee
growers. Efforts will be made to ensure that coffee growers sell their
products at a reasonable international and local price by taking the quality
of the exported coffee into account. The Association is also involved in
other issues like coffee pruning in order to ensure coffee quality and
benefit coffee growers.

Cap of Excellence improves the quality of Ethiopian coffee. This will also
help the country to sell its coffee at a better price in the international
market. Ethiopian Specialty Coffee or High-Quality Coffee is highly
marketable.

 

To this end, the Association pays special attention to the sale of specialty
coffee because the quality of Ethiopian coffee is popular among buyers and
consumers. The quality is also believed to be good. Therefore, efforts are
being made to make most of Ethiopia's coffee sales at specialty coffee.

 

The Cap of Excellence will be held this year as usual, and the sampling
process was completed last week. A sample of the Cap of Excellence
contestants was collected from February 01, 2021 to February 08, 2021. In
the process, more than 1,800 samples were collected.

 

Last year, the collected coffee samples were 1402. The number of coffee
samples for this year's competition has increased significantly. As to him,
this is a result of the activities undertaken to mobilize coffee farmers.
This will increase the quality of coffee in the country. It also contributes
to better sales.

The winners of the Cup of Excellence will have a chance to sell their coffee
at an international auction. Last year's winner of the Cap of Excellence
sold for USD 407 per kilogram, he asserted. One of the benefits of the
competition is that it encourages and motivates many farmers and coffee
growers to produce with better quality.

 

Coffee growers should realize that they can sell their product at a good
price for the international market if they produce quality coffee products.
This is what improves the quality of Ethiopian coffee as a whole. As to him,
the result of the Cup of Excellence competition is expected to be announced
on April 13, 2021.

 

According to Gizat, the quality of the coffee observed in the Cap of
Excellence is one of the factors that will increase the price of coffee.
Last year, coffee was sold for USD 407 per kilogram as it earned 91 points
in terms of quality measurement.

 

Henceforth, 168 international coffee buyers took part in a bid to buy the
coffee. Ethiopia's specialty coffee prices are expected to improve this year
as well, he noted.

 

In fact, in some countries, the Covid 19 outbreak has prevented people from
going to cafes and drinking coffee. These selected specialty coffees are
sold in cafes, not bought in kilos, stored in private homes and used for
services. Thus, this year's Cup of Excellence Coffee winner will have an
impact on the price.

 

He further stated that quality is not something that changes at once as it
needs time. That is why the Cap of Excellence is being held with the promise
that everyone will be better off making good quality coffee.

 

It is good that the Ethiopian coffee and Tea Authority is giving quality
improvement education at the university level.

 

While this has greatly contributed to increased productivity and quality,
"we still have a long way to go. The relationship with the regions should be
clear in terms of improving coffee production and quality," said Gizat.

 

Gizat said: If the country finds peace, we can go further. Ethiopia competes
in coffee quality with well-known coffee producing countries such as Brazil,
Colombia and Indonesia.

 

Therefore, we need to work in a coordinated manner to strengthen our
capacity to provide quality coffee. It would also be good if regions realize
that they are competing with other countries.-Ethiopian Herald.

 

 

 

Tanzania: AfDB Forecasts Strong Dar Economic Recovery

THE African Development Bank Group (AfDB) has said despite the Covid 19
pandemic ravaging the world, Tanzania remains one of the fastest growing
economies in the African continent.

 

AfDB President Dr Akinwumi Adesina spoke of Tanzania's economic resilience
over the weekend in his brief salutations to Africa during which he extended
his congratulations to President John Magufuli following his re-election in
the last October 2020 General Election.

 

"Firstly, I wish to congratulate President John Magufuli in his re-election;
your re- election as President is an excellent opportunity to continue to
build a prosperous Tanzania," he said.

President Adesina cautioned other leaders in Africa to take note that
President Magufuli is a man of action, especially when it comes to projects
implementation.

 

"Now let me warn you, President Magufuli is a doer. Now talking about
projects does not cut with him, he is a man in a hurry, he is about
finishing projects and moving on to the next one. So, you get ready.
President Magufuli and his office of investments led by State Minister, Mr
Kitila Mkumbo will vigorously engage you," he sounded the alert ahead of the
forum for project developers and investors.

 

He added: "Second, I want to commend the organisers for organising this
forum for project developers, investors, of Tanzania's boundless investment
opportunities. Now you have come to the right place... Tanzania."

 

Speaking on Tanzania's economic growth, President Adesina said the country
achieved real DGP growth of 6.9 per cent in 2019.

"Now while growth slowed down in Africa to -2.1 per cent in 2020 due to the
Covid-19 pandemic we are all dealing with, Tanzania still managed to record
a growth of 2.1 per cent, that is great," he said.

 

"Now, there is a light at the end of the tunnel, the African Development
Bank forecasted strong economic recovery for Tanzania in 2021," he added.

 

He said real GDP growth is projected to rise up to 4.1 per cent in 2021 and
it will rise up to 5.8 per cent in 2022. He said Tanzania is a country that
is resilient, with strong micro economic fundamentals.

 

"Now also think of the following, last year Tanzania became a middle income
country five years ahead of their own bold and ambitious target date. That
is leadership," he intoned.

 

He said Tanzania's economic numbers clearly tell the story of a thriving and
dynamic economy.

 

"With a 17.4 per cent growth in the construction sector; 8.8 per cent growth
in the transportation sector; and 6.7 per cent growth in the agriculture
sector, Tanzania has been making impressive business and regulatory reforms
and gains in the past several years which are highly commendable," he said.

 

He added: "As investors, you want insurance of a care business preposition,
supportive business and regulatory environment, backed by stability and
predictability of government, the rule of law and commitment and
transparency, and accountability,".

 

He said Tanzania has demonstrated its strong commitment to transparency,
accountability, and has a highly commendable anti-corruption stance. "This
is therefore the place to be."-Daily News.

 

 


 


 


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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