Major International Business Headlines Brief::: 31 January 2021

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Major International Business Headlines Brief::: 31 January 2021

 


 

 




 


 

 


ü  GameStop: Who is winning the market battle?

ü  GameStop: Global watchdogs sound alarm as shares frenzy grows

ü  Covid: EU-AstraZeneca disputed vaccine contract made public

ü  Stampede from fossil fuels 'would cost UK jobs'

ü  Ford to start building electric Mustangs in China

ü  Boohoo in talks to buy Dorothy Perkins, Wallis and Burton brands

ü  Pub chain Marston's shares jump on takeover news

ü  Asian investors inspired by GameStop surge

ü  Satellite boom attracts technology giants

ü  U.S. consumer spending decreases further; inflation creeping up

ü  Nigeria: FG to Commence Procurement Process for Highway Concessions

ü  Tanzania: Govt to Issue New IDs for Petty Traders

ü  Nigeria: IMF Foresees Improved Capital Spending in Nigeria

ü  Namibia: Govt Throws Air Namibia to the Lions

ü  Namibia: FMD Cripples Meat Sales

ü  Namibia Expects N$1 Billion From Grapes

 

 


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GameStop: Who is winning the market battle?

Financial markets have been riveted by the tale of novice investors taking
on Wall Street pros by buying up shares of US video games retailer GameStop,
which many hedge funds had seen as a losing bet.

 

It's an apparently crowd-sourced attempt to beat billionaire traders at
their own game.

 

But who's really winning and losing this battle?

 

Reddit traders

GameStop, a loss-making chain of bricks-and-mortar shops, saw shares jump
from being worth less than $20 each at the end of December to nearly $350 on
Wednesday.

 

The surge has been attributed to a swarm of independent traders, swapping
tips on social media, who saw an opportunity to pressure Wall Street hedge
funds that had made deals assuming GameStop's share price would fall - and
would have to purchase shares to cover losses if the stock rose more than
expected.

 

That, in turn, could generate a kind of buying frenzy - and chance for gains
for the little guys.

 

In recent weeks, they've deployed the strategy on behalf of other firms,
such as struggling theatre chain AMC Entertainment, owner of Odeon Cinemas.

 

And the idea has caught on globally, fuelling activity in stocks traded in
other parts of the world, including the UK, Brazil and Malaysia.

 

The social media forums where the amateur day-traders stoked enthusiasm for
GameStop are full of snapshots showing how their bets have performed - in
some cases growing from tiny sums to positions worth millions of dollars.

 

But for many, these are just gains on paper - and could still end in big
losses if the prices fall back.

 

 

On Thursday, after the wacky market conditions prompted some trading
platforms, such as Robinhood, to restrict purchases, shares dipped. Some
traders posted comments confessing to nerves at the prospect of losses,
while rallying their fellows to hold the line and avoid selling, staving off
a sudden price collapse.

 

And on Friday, GameStop shares rose again, climbing 68% to $325 apiece, even
as the market overall dropped.

 

If prices drop back, however, some who bought in too late will be hurt.

 

The buying frenzy has reportedly led to losses for some big name hedge
funds, including Point72, a firm run by infamous investor Steve Cohen, a
billionaire art collector and owner of the New York Mets baseball team whose
first hedge fund, SAC Capital, pleaded guilty to insider trading charges and
shut down.

 

Some of the losses this week stemmed from Point72 money being managed by
Melvin Capital, a company founded by a former SAC star trader, which had
made big bets against Gamestop and was forced to pull out of the trade.

 

Other firms reportedly hit include Maplelane Capital and DI Capital, while
other prominent short sellers have said they - and their families - have
been subject to harassment.

 

Analysts also say the pressure on hedge funds is one force behind broader
declines in US markets in recent days, as firms sell other investments to
cover their losses.

 

Mr Cohen, whose firm helped provide rescue funding to Melvin Capital amid
the upheaval, has appeared to allude to the strains caused by the Reddit
army, writing on Twitter: "Hey stock jockeys keep bringing it".

 

I’m not feeling the love on this site today . Trading is a tough game .
Don’t you think?

 

That's not to say there aren't investing pros benefiting from the battle
against the short-sellers - many of which are still betting stocks will
fall.

 

Firms like investment giant Fidelity and BlackRock, which own more than 10%
of GameStop shares, have seen the value of their holdings rise.

 

The surge also benefited Ryan Cohen, an entrepreneur who sold his online pet
retail company Chewy to Petsmart in 2017 and revealed a major investment in
GameStop last year.

 

Executives at some companies favoured by the day traders, such as
BlackBerry, have gotten windfalls from selling their shares.

 

It's creating opportunities for other kinds of companies too. For example,
private equity firm Silver Lake Group, which had loaned money to AMC
Entertainment, converted its bonds to shares after the surge in the firm's
prices, a swap worth hundreds of millions of dollars.

 

In other ways, however, the episode could bode ill for Wall Street in
Washington, where Democrats now claim slim majorities and Congress was
already eying tax hikes for hedge funds.

 

Senator Elizabeth Warren, a prominent voice in favour of tougher rules, has
said the episode warrants wider investigation, pointing to fault on both
sides of the battle, which she said was a sign of market distortions that
could put the rest of the economy at risk.

 

Regulators already had their eyes on Robinhood, an app used to buy and sell
shares that has seen its popularity explode amid the pandemic.

 

The Silicon Valley company, which makes money in part from fees charged to
Wall Street funds that execute customer orders, is accused of courting
inexperienced investors and encouraging them to trade frequently and deploy
risky strategies - even if it goes against customer interests.

 

This episode has only intensified regulator scrutiny.

 

Global watchdogs on alert as GameStop frenzy grows

Anger as trading in GameStop shares is restricted

Meanwhile, the firm said late Thursday it had raised more than $1bn amid
questions about financial strains on the firm created by the buying frenzy.

 

It's also facing outrage from customers - and lawmakers - angry after
Robinhood was among the trading platforms to limit purchases of Gamestop and
others' stocks, citing market volatility and risk.

 

Many of the companies whose shares have been championed by day traders in
the battle against the short-sellers are what have been dubbed "90s
nostalgia stocks" - firms buffeted by changes wrought technology, like the
decline of traffic to bricks and mortar shops and cinemas.

 

The pandemic has only hammered them harder.

 

GameStop, which was founded in 1996 and now has more than 5,000 stores in
the US, Canada, Australia and elsewhere, saw sales fall 30% in the first
nine months of 2020.

 

AMC Entertainment, the owner of Odeon Cinemas, meanwhile, warned last month
it risked running out of cash, after traffic to its theatres plunged last
year.

 

Some of those firms have seized opportunities created by the recent trading
to ease financial strains.

 

AMC, for example, raised more than $300m by selling shares this week and has
said it is exploring additional offerings.

 

American Airlines has said it is also planning to sell shares.

 

But regardless of what happens next in the financial markets, the challenges
facing them in the real world aren't going away.--BBC

 

 

 

GameStop: Global watchdogs sound alarm as shares frenzy grows

Regulators have fired warning shots over frenzied share dealing in GameShop
and other firms fuelled by social media chat on sites like Reddit and
Facebook.

 

Watchdogs in the US and UK said they were monitoring activity and potential
lawbreaking, and warned traders they risked facing huge losses.

 

Traders should ensure they are familiar with all rules, "including market
abuse", the UK's regulator said.

 

GameStop is the focus of a trading war between amateurs and Wall Street
pros.

 

Shares in the US bricks-and-mortar video games retailer surged again on
Friday, ending 68% higher. Another stock in the traders' sights, AMC
Entertainment, jumped 54%.

 

That bucked broader market trends, which saw all three main US indexes fall
roughly 2%. For the week they were down more than 3% - the biggest weekly
decline since October.

 

Some share trading firms temporarily halted dealings on Thursday amid
extreme volatility in GameStop, which has soared as much as 700% in the past
week. AMC Entertainment and Blackberry, which have also seen huge trading
activity, were among the other companies also hit by the restrictions.

 

UK traders have also been sharing their thoughts and tips on trading chat
forums amid mounting concerns about misinformation and share ramping.

 

London-listed companies have also been the focus of social media attention,
including publisher Pearson and cinema operator Cineworld, although the
share price movements were minimal compared with the GameStop surge.

 

In a statement on Friday, the UK's Financial Conduct Authority said: "The
FCA is aware of the situation and continues to closely monitor trading in UK
markets. UK investors should take care when trading shares in highly
volatile market conditions that they fully understand the risks they are
taking. This applies to UK investors trading both US and UK stocks.

 

"Firms and individuals should also ensure they are familiar with, and
abiding by, all regulations including the market abuse and short selling
regimes in the jurisdiction they are trading in."

 

In the US, the US Securities and Exchange Commission (SEC) warned against
illegal "manipulative trading activity".

 

The regulator added: "Our core market infrastructure has proven resilient
under the weight of this week's extraordinary trading volumes.

 

"Nevertheless, extreme stock price volatility has the potential to expose
investors to rapid and severe losses and undermine market confidence."

 

The SEC also said it would review actions that could "unduly inhibit" and
"disadvantage investors".

 

'This is unacceptable'

The war between amateur private investors and heavyweight firms like hedge
funds centres on so-called short selling. Over recent months, hedge funds
had made big bets that shares in loss-making GameStop would fall.

 

But an army of private investors, swapping tips on social media, spotted a
chance for a buying frenzy that would push up the price and "squeeze" the
hedge fund short sellers.

 

Many private traders made profits - and losses - along the way, but their
actions also dealt a big financial blow to hedge funds that spent billions
of dollars gambling GameStop's shares would tumble.

 

The decision on Thursday by several brokerages to halt purchases of shares
in Gamestop and some other firms sparked outrage among investors, who
accused the companies of working on behalf of traditional Wall Street
investors who were losing out to the army of amateurs. Some disgruntled
investors said they were preparing legal action.

 

Investor anger over their temporary ban from trading spread beyond the
investment community, with rappers and US politicians on both sides of the
Washington divide joining the backlash against Wall Street.

 

'Years of distortion'

"This is unacceptable," tweeted Representative Alexandria Ocasio-Cortez, a
Democrat. "We now need to know more about @RobinhoodApp's decision to block
retail investors from purchasing stock while hedge funds are freely able to
trade the stock as they see fit."

 

Her tweet was shared by Republican Senator Ted Cruz who commented "fully
agree." Tesla founder Elon Musk, whose shares have also been a retail
favourite, also commented on Ms Ocasio-Cortez's tweet, saying "Absolutely".

 

Much of the anger was directed atRobinhood, a new breed of broker popular
among a new generation of younger, tech-savvy investor, but which has been
accused of "gamifying" share trading.

 

On Friday, a Robinhood chat forum on Facebook was also removed for breaking
its Community Standards rules, although the social media giant did not
expand on the reasons.

 

After the backlash, Robinhood late Thursday said it would ease the
restrictions. The firm also said it had raised more than $1bn from existing
investors to bolster its finances amid questions about strains caused by the
buying frenzy.

 

But Senator Elizabeth Warren, a Democrat known as a supporter of tougher
financial rules, said the chaos was another sign of "years of distortion in
securities markets that have allowed the wealthy few to artificially inflate
and deflate share prices and reap short-term profits while exacerbating
wealth inequality".

 

She said regulators must review the trades and make changes to ensure that
markets "reflect real value, rather than the highly leveraged bets of
wealthy traders or those who seek to inflict financial damage on those
traders".

 

 

Why have GameStop shares surged?

Key to what's going on is "short selling" or "shorting", where a big
investment firm such as a hedge fund tries to make money by betting that a
company's share price will fall.

 

The hedge fund borrows shares in a company from other investors (for a fee)
and sells the shares on the markets at, for example, $10 each, waits until
they fall to $5, and buys them back. The borrowed shares are returned to the
original owner, and the hedge fund pockets a profit.

 

GameStop - which saw heavy losses last year and was described as "failing"
by one big investor - is the most shorted stock on Wall Street.

 

But in the last week, amateur investors who follow the Wall Street Bets
forum on Reddit have poured money into buying the company's stock with the
aim of pushing up the price.

 

If the price rises dramatically, short sellers face big losses and they need
to buy back the shares they have borrowed quickly to prevent bigger losses -
a process known as covering.

 

However, buying back the shares only adds to demand for the stock and pushes
its price higher still.--BBC

 

 

 

Covid: EU-AstraZeneca disputed vaccine contract made public

The European Commission has published its contract with drug-maker
AstraZeneca to buy the company's Covid vaccine, amid a row over supplies.

 

The move, agreed with AstraZeneca, came hours after Commission chief Ursula
von der Leyen increased pressure on the firm over its decision to cut
supplies.

 

The contract signed in August contained "binding orders", she told German
radio, and called for an explanation.

 

The vaccine was approved by the EU medicines regulator on Friday.

 

The EU wanted to publish the contract to bolster its argument that the
company had reneged on its commitments.

 

The company's chief executive, Pascal Soriot, said in an interview earlier
this week that the contract obliged AstraZeneca to make its "best effort" to
meet EU demand, without compelling the company to stick to a specific
timetable.

 

Large sections of the contract have been blanked out - redacted - to protect
sensitive information.

 

These include some paragraphs dealing with costs, guaranteed delivery dates
and intellectual property.

 

What is the issue?

The August deal was for 300 million doses for the EU, to be delivered after
regulatory approval, with an option for 100 million more.

 

But EU sources say they now expect to get only about a quarter of the 100
million vaccines they were expecting to receive by March, a shortfall of
about 75 million jabs.

 

The EU is under pressure after criticism that the pace of vaccinations in
several member states has been too slow.

 

AstraZeneca says the production problems are at its plants in the
Netherlands and Belgium.

 

Supplies of another vaccine, produced by Pfizer-BioNTech, have also dropped
due to production issues.

 

What is the EU saying?

EU officials say AstraZeneca has been asked to send some doses manufactured
in the UK to the continent to make up the shortfall, but the company said on
Wednesday that its contract for UK supplies prevented this.

 

An EU source familiar with the talks told the BBC that AstraZeneca's UK
facilities were obliged to supply vaccine to the EU.

 

"This is not an option, it is a contractual obligation
 a declaration by
AstraZeneca as to where the drug substance manufacturing will take place."
The UK plants are not back-up facilities; they are part of the main network,
the source added.

 

"There are binding orders and the contract is crystal clear," Mrs von der
Leyen said in Friday morning's radio interview.

 

"'Best effort' was valid while it was still unclear whether they could
develop a vaccine. That time is behind us. The vaccine is there.

 

"AstraZeneca has also explicitly assured us in this contract that no other
obligations would prevent the contract from being fulfilled," she said.

 

The BBC's Europe correspondent, Gavin Lee, says it may come down to
specialist legal interpretation, and some fine tooth-combing, to understand
who's right.

 

AstraZeneca has found itself in a deeply uncomfortable position in this
fight over vaccine supply.

 

The heavily redacted publication - agreed by both sides - of its contract
with the EU does not settle the issue of who is at fault.

 

As one source told me - "Neither side would have published this if either
side thought it was legally conclusive. AstraZeneca are working hard to find
a solution to a row that serves no-one".

 

The problem with vaccine production is that it is a biological process that
can't be hurried.

 

A source close to the company said they knew vaccine nationalism was a
danger. That's why, they claim, different contracts were tied to separate
manufacturing bases. That is disputed by the EU.

 

So what happens next? The thought of going to court horrifies everyone
involved; a needless and unseemly sideshow in the face of the real battle
against the virus.

 

But suggestions that UK manufactured vaccines would be redirected to EU
countries were downplayed by company insiders.

 

One final thought expressed was that while it was convenient for the
European Commission to cast AstraZeneca as the villain - that would only
work for so long, before member states started directing their displeasure
at the Commission itself.

 

A spokesman for UK Prime Minister Boris Johnson would not comment on Friday
on any contractual arrangements between the UK and AstraZeneca, or whether
they may conflict with the company's agreement with the EU.

 

The spokesman said only that the UK remained "confident in our supply of
vaccines" and that it was committed to its vaccine rollout plan.

 

But EU Justice Commissioner Didier Reynders has warned of a "vaccine war".

 

Speaking on Belgian radio, he said: "The EU Commission has pushed to
co-ordinate the vaccines contracts on behalf of the 27 precisely to avoid a
vaccines war between EU countries, but maybe the UK wants to start a vaccine
war?

 

"Solidarity is an important principle of the EU. With Brexit, it's clear
that the UK doesn't want to show solidarity with anyone."

 

On Friday, the EU confirmed it was introducing export controls on
coronavirus vaccines made in the bloc, to try to ease the shortfalls.

 

 

Vaccinations in parts of Europe are already being held up and in some cases
halted because of a cut in deliveries of the Pfizer-BioNTech vaccine:

 

In Spain, Madrid and the northern Cantabria region have halted first
vaccinations to focus on second doses for at least two weeks

Regional health authorities in France are delaying vaccination appointments.
More than 1.1 million people have received a jab so far

Vienna's city councillor for health says delivery problems are leading to
delays in vaccinations by up to two weeks. "We are really operating in a
dramatic form of shortage economy," said Peter Hacker

The Dutch government was the last in the EU to start a vaccination programme
and by the end of January the Netherlands will have had no more than 757,000
doses, mainly from Pfizer. It initially based its strategy on the assumption
the AstraZeneca vaccine would be available first.

Chart showing the number of vaccines administered per 100 people in EU
countries--BBC

 

 

 

Stampede from fossil fuels 'would cost UK jobs'

Being green is not black and white.

 

That's according to the man who runs the world's biggest money management
firm. BlackRock manages nearly $9tn (£6.6tn) of pension and investments.

 

This week the chief executive, Larry Fink, sent his annual letter to the
bosses of the companies around the world in which that colossal sum is
invested.

 

He said the Covid-19 pandemic had focused minds on the fragility of the
global economic system and made people think about a potentially bigger
crisis.

 

"I believe that the pandemic has presented such an existential crisis - such
a stark reminder of our fragility - that it has driven us to confront the
global threat of climate change more forcefully and to consider how, like
the pandemic, it will alter our lives," he said.

 

Job loss warning

When the boss of the world's biggest investor speaks, those company bosses
listen. He wants them to explain how they are going to get to net zero over
the coming decades.

 

But he also admitted that starving polluting companies of cash too quickly
would mean dramatic job losses.

 

"If we all ran away from the hydrocarbons and everything, and if you ran
away with most of those companies in the FTSE [100], the job loss in the
United Kingdom would be extraordinary. Is that the outcome that they want?"
he told the BBC.

 

The vast majority of his company's multi-trillion-dollar holdings are in
so-called "passive" funds. They provide a way for investors to ride the ups
and downs of stock markets without taking a view on individual companies by
just taking a slice of all of those listed.

 

As a result, BlackRock has trillions invested in stock-market trackers that
include some of the worst polluting companies in the world.

 

So will BlackRock dump shares in these companies?

 

"No, we're not saying that," Mr Fink says. "First of all none of it's our
money. The entire pool of money that we manage, which at the present time is
approximately $8.7tn, every dollar is somebody else's money."

 

Two-thirds of the investments are retirement money, he says.

 

"What we are doing is asking companies to move forward
 We can sell those
shares," he says.

 

"We're not going to sell assets in index funds
 but we have the power of the
vote on behalf of our investors
 We can help companies move forward and
that's what we try and do".

 

He conceded that his firm - and industry - probably has more power than
environmental protesters.

 

"We are moving finance faster than any environmental group."

 

'Different route'

Many investors expected that the onset of the pandemic would push any other
investor priorities - beyond survival - to the sidelines

 

When the pandemic hit, investors ran to the hills. They dumped their share
holdings and turned them into cash. The Dow Jones index of the biggest
companies in the US lost 10,000 points, or nearly a third, in a matter of
days.

 

The stock market has rebounded as investors look hopefully to a
post-pandemic world - their moods enhanced by enormous amounts of emergency
financial drugs such as money printing, and massive government borrowing and
spending.

 

But when the investors came out of the hills they came down a different
route - investing in different companies from the ones they used to own.
Larry Fink notes that investors pumped $288bn globally in sustainable
assets, a 96% increase over the whole of 2019.

 

It has proved irresistible for governments around the world to promise they
will "build back better" - it may also prove hard to resist the yearning to
return to what we had before - and if cheap oil, for example, helps us do
that, then so be it.

 

But when the man with the $9tn purse strings speaks directly to company
chief executives, they tend to listen, and Larry Fink says the pandemic has
kicked in a window that was already ajar.--BBC

 

 

 

Ford to start building electric Mustangs in China

Ford is to start building its iconic Mustang cars in China for the first
time.

 

The US carmaker said its Mustang Mach-E will start being produced there
later this year as it looks to tap into China's electric vehicle (EV)
market.

 

Earlier this month, Tesla started delivering its Model Y to Chinese
customers from its Shanghai factory.

 

Western brands are aggressively targeting China, where EV sales are expected
to grow strongly.

 

Volkswagen said it would soon begin delivering vehicles produced at two
newly-built Chinese factories dedicated to electric cars.

 

China is the world's biggest car market with more than 20m vehicles sold
each year.

 

On Thursday, Germany's Daimler posted strong company results for 2020, off
the back of a strong recovery in the global car market led by China.

 

Daimler boss Ola Källenius hailed the company's rebound in China as almost
"too good to be true".

 

 

The story behind how the Ford engine plant in Bridgend was built between
1977 and 1980.

Ford is also hoping to capitalise on China's economic recovery and the
Chinese government's push for more electric cars on its roads.

 

The new electric-powered Mustang is a sports utility vehicle (SUV), seen as
a chance to reverse years of sluggish sales in China and connect with
customers by producing them locally.

 

Mustang sports cars have so far only been available in China as costly
imports.

 

Ford launched its first made-in-China Lincoln vehicles in March last year,
but the brand remains a minor player in the Chinese market compared with its
premium rivals.

 

In 2019, it launched "Ford China 2.0," a strategy that promised more
products tailored to local tastes.

 

On Thursday, California-based electric carmaker Faraday Future was given a
major cash injection from a Chinese carmaker Geely and a group of
state-owned companies.

 

Faraday Future (FF) was founded by failed Chinese tycoon Jia Yueting and
touted as the next Tesla.

 

Around 30 institutional investors from China, US and Europe are investing
$1bn (£730m) in the carmaker, with plans to publicly list its shares.

 

The venture will fund the production of the FF91, a luxury electric car that
was originally unveiled in 2017.

 

Founder Jia Yueting filed for personal bankruptcy in 2019 and stepped down
as chief executive of Faraday, named after British scientist Michael
Faraday, who discovered electromagnetism.-BBC

 

 

 

Boohoo in talks to buy Dorothy Perkins, Wallis and Burton brands

Online fashion retailer Boohoo is in "exclusive" talks to buy the Dorothy
Perkins, Wallis and Burton brands from failed retail group Arcadia.

 

Sir Philip Green's Arcadia group fell into administration in November last
year casting doubt over the future of its brands and 13,000 jobs.

 

Any deal would be for the brands, and not the High Street shops.

 

Rival online fashion chain Asos is the frontrunner to buy Topshop, Topman,
Miss Selfridge and HIIT brands.

 

In a short statement to shareholders, Boohoo said the talks with Arcadia's
administrators "may or may not result in agreement of a transaction".

 

"A further announcement will be made when appropriate," it added.

 

Earlier this week, Boohoo sealed a deal to buy the Debenhams brand and
website for £55m. However, the price tag did not include any of the
retailer's remaining 118 High Street stores or its workforce, resulting in
up to 12,000 job losses.

 

'Shopping spree'

Last year, Boohoo bought the online businesses of Oasis and Warehouse for
£5.25m. That added to its portfolio, which included the Karen Millen and
Coast brands, which it bought from administrators in 2019.

 

''Fresh from its shopping spree, snapping up the Debenhams brand and
website, Boohoo is rifling through the bargain bins once more, this time at
Arcadia," said Susannah Streeter, senior investment and markets analyst at
Hargreaves Lansdown.

 

She said Asos had "turned its nose up" at Dorothy Perkins, Wallis and
Burton, leaving them for Boohoo to bid for.

 

"As an online-only fashion giant, Boohoo would be only interested in the
brands, seeing little value in the store estate as the shift to digital
sales intensifies," she said.

 

"So the rescue of the famous names, wouldn't throw a lifeline to the
thousands of shop workers who are very likely to still face redundancy.''

 

Arcadia's administrators had requested that final bids for the group's
assets be submitted last Monday, with the auction expected to conclude at
the end of January.

 

Arcadia's Evans brand was sold by the administrators to Australia's City
Chic for £23m last month.

 

Sir Philip Green is under pressure to use his own money to plug an estimated
£350m hole in Arcadia's pension fund, which has about 10,000 members.

 

Last year the retail tycoon had an estimated fortune of £930m, according to
the Sunday Times Rich List.

 

Arcadia employed about 13,000 people and had 444 shops at the time of its
collapse.--BBC

 

 

 

Pub chain Marston's shares jump on takeover news

British pub giant Marston's says it has received an "unsolicited" takeover
offer from US private equity firm Platinum Equity Advisors.

 

Marston's said it was evaluating the proposal with its advisers and a
further announcement would be made in due course.

 

Shares in the pub chain jumped almost 20% on the news.

 

Marston's added there could be "no certainty that any firm offer will be
made for the company".

 

Platinum Equity Advisors has made the offer for Marston's as the pub chain's
share price languished close to a low not seen for more than 20 years.

 

When the London Stock Exchange closed on Thursday, shares in Marston's were
changing hands for 74.80p each. That makes the pub chain look relatively
cheap compared to this time last year when shares were 104p each.

 

All of Marston's 1,368 pubs across the country remain closed because of the
coronavirus lockdown. In October, Marston's said it would axe up to 2,150
furloughed jobs because of the rolling lockdowns.

 

The hospitality sector has been particularly heavily affected by government
restrictions, which have forced pubs, restaurants and hotels to close their
doors.

 

Earlier this month, Marston's reported revenues of just £54m for the final
three months of last year, which includes the all important Christmas period
when hospitality firms traditionally earn the money they need to get through
January, which is typically quiet.

 

That was a dramatic fall from the £1.2bn it earned in the same period a year
earlier.

 

Last year, Marston's combined its brewing operations with Carlsberg UK in a
£780m merger. And in December, Marston's agreed to take over the running of
all 156 pubs owned by Brains, the largest brewer in Wales.

 

Brains said restrictions during the pandemic had put the business under
"significant financial pressure", adding that the move would safeguard 1,300
jobs.--BBC

 

 

 

Asian investors inspired by GameStop surge

Shares of Malaysia’s Top Glove surged almost 8% on Friday as retail
investors in Asia drew inspiration from the GameStop trading frenzy.

 

A new Reddit forum called BursaBets has been set up, describing itself as
the “Malaysian version” of Wallstreetbets

 

The Wallstreetbets forum fuelled the GameStop share price surge this week.

 

Top Glove is the world’s largest producer of latex gloves, but has been hit
by a Covid-19 outbreak at its factories and labour abuse allegations.

 

It’s unclear what effect the BursaBets forum will have because share-trading
is more regulated in Malaysia than in the US.

 

The national stock exchange is called Bursa Malaysia.

 

The GameStop share-buying frenzy has been billed as a battle between Wall
Street professionals and young, often novice, investors using social media
platforms such as Reddit.

 

"Whoever is still holding gloves (has) already been through hell, join me by
saying 'eff you' to investment banks, fund managers, market manipulators,
and everyone else," said an user called '_Revenant_' who started the
BursaBets forum.

 

Unlike GameStop, which is a loss-making bricks and mortar retailer, TopGlove
is a profitable business.

 

The Covid-19 pandemic fuelled demand for gloves, which pushed the company’s
share price 290% higher last year.

 

Although the company reported a record profit in December, its share price
has fallen 40% since August as Covid-19 vaccines became available.

 

 

It is not entirely clear if it will be possible for traders to emulate the
GameStop “short squeeze” on the Malaysian exchange.

 

A short squeeze puts pressure on investors - often large funds - who are
betting that the price of a particular share will fall.

 

Shorting involves borrowing stock, selling it off and then buying it back at
a lower price and pocketing the difference.

 

When the share price increases dramatically, investors with short positions
are forced to buy back their stocks at a loss in order to prevent further
losses.

 

In the case of GameStop, investors organising on Reddit pushed shares prices
up from less than $20 to more than $480, before a number of share trading
platforms restricted activity on GameStop shares and a dozen other
securities which had seen similar activity.

 

Because short-selling is more tightly regulated in Malaysia than in the US,
it's less likely Bursabets investors will have a similar impact.

 

Other stock markets across Asia also saw the spread of the GameStop
phenomenon.

 

In South Korea, small investors known as "ants" have borrowed so much money
to dabble in stocks that a handful of brokerages have now stopped offering
them financing.

 

On Thursday Japan's most shorted stock, telecom equipment maker Anritsu
Corp, touched a two-decade high.--BBC

 

 

 

Satellite boom attracts technology giants

Sir Richard Branson's rocket company Virgin Orbit has joined a growing list
of private companies that can launch satellites into orbit.

 

Earlier this month, 10 payloads were lofted on the Virgin Orbit rocket,
which was launched from under the wing of one of the entrepreneur's old 747
jumbos.

 

Sir Richard is hoping to tap into what is a growing market for small,
lower-cost satellites.

 

Space has traditionally had a high barrier to entry. Today, just seven firms
make up 75% of the industry, according to Scott Campbell, director at
Deloitte Ventures.

 

The space industry is worth $380bn (£285bn), and 60% of that is commercial.
But previously, virtually all investment into space was by governments, he
says.

 

The first real shift came in 2011 when US President Barack Obama opened up
space to businesses, and now more disruption is coming.

 

"The new space race and start-up scene is almost entirely based around space
applications: what can I do with data from space?" says Mr Campbell.

 

Traditionally, building and launching a satellite to collect data or enable
communications costs hundreds of millions of dollars.

 

Satellites comparisons

The satellites weighed up to six tonnes, were the size of a bus, and would
be sent up into geostationary orbit - 35,786km (22,236 miles) above the
Earth.

 

But today, you could send up a so-called nanosat weighing just 25-50kg into
low-Earth orbit (160-1,000km above Earth) for between $100,000 and $1m.

 

Launch prices are also falling because technology giants are driving demand,
says Mark Boggett, chief executive of British venture capital firm Seraphim
Capital.

 

"Because tech firms need to launch their own satellites in the thousands
[for space internet networks], this further drives down the cost of launch
and storage for everyone else," he says.

 

"Whole new industries of businesses can benefit from using this data,
essentially democratising space."

 

And of course, if more data is being transmitted back to Earth, someone will
need to process it.

 

As a result, Deloitte's Scott Campbell has seen "an explosion of businesses
around space". In 2011, there were 234 space-related firms in the UK, rising
to 948 companies in 2018.

 

As for satellites, today there are fewer than 9,000 in orbit, according to
Seraphim.

 

OneWeb, SpaceX, Planet, Spire and Amazon have put up 10% of these satellites
since 2016, but there are 200 smaller firms behind them who are projected to
launch 25,000 satellites over the next four years.

 

One smaller firm is nanosat manufacturer NanoAvionics, which announced plans
in October to create 400 new jobs in the UK. The firm saw revenues soar 300%
in the last year.

 

"In the old days, we launched one satellite that had lots of sensors on it.
But today, we've launched hundreds of satellites that have the same one
sensor, and that's a much cheaper, repeatable way to do it with more
consistent data," says Robin Sampson, head of operations at NanoAvionics UK.

 

PWC UK's space lead Dinesh Patel says the nanosat market is worth only
£1.8bn today, but annual growth rates of 20% are projected.

 

Satellites have traditionally been used for communications, TV services and
tracking the weather, but new cheaper options are attracting tech giants
with big plans.

 

Late last year Microsoft announced it was teaming up with Elon Musk's
SpaceX.

 

Their partnership, Azure Space, plans to combine Microsoft's cloud computing
services with a global network of satellites.

 

Tom Keane, corporate vice president at Microsoft Azure, tells the BBC that
space makes it possible to "move computing to the edge", which means
processing data much closer to users' devices than ever before.

 

"The edge could be anywhere - on a device... you're wearing, it could be
something you're carrying, it could be in your car," he says.

 

"Space allows you to connect all of that infrastructure together, and then
you can use artificial intelligence [like] predictive analytics to gain
insights over things that were previously not connected together."

 

Ground stations, which receive data from satellites, are also potential
money makers for IT giants.

 

How space cloud would work

Microsoft Azure's Tom Keane plans to revolutionise ground stations, which
are currently "expensive and often monolithic devices" and hook them up to
Microsoft's data centres.

 

"Today, in many cases, data [from ground stations] may not be used, or it's
certainly not used as broadly as it could be. By connecting that ground
station, you take the data from space... to solve problems that you can't
solve today."

 

Another opportunity is to connect the 3.8 billion people in rural areas who
still do not have an internet connection.

 

SpaceX in particular has been launching batches of small satellites into
orbit since 2018 to form a huge constellation, with the aim of providing
instant broadband anywhere on Earth.

 

The rise of small satellites

Other businesses will hope to make money by collecting data from nanosats,
processing it with artificial intelligence, and using it in innovative ways
to solve problems.

 

Firms are looking to collect Earth observation data like weather, heat
signatures and atmospheric gas composition to help farmers, for example, and
to monitor things like flood defences, traffic and construction sites.

 

But not everyone thinks constellations of satellites orbiting close to Earth
is a good idea.

 

Alex Gellman, chief executive of Vertical Bridge, the largest privately
owned communications infrastructure company in the US, says there are
limitations to space broadband due to latency.

 

Latency measures the time it takes to get a response after you send out a
data request.

 

To send data over a 4G mobile network, the latency through air would be 3.3
microseconds/km, while data sent over fibre broadband, where the signal
moves through glass, has a latency of 5 microseconds/km. In comparison,
nanosats are much further away.

 

"If the satellite has to communicate with a ground base station to compute,
[the data] has to go back to the satellite, and then to your device, so it
could be four round trips before it gets to the device," he explains.

 

"Satellites do bring internet to places that don't have it, but it's not a
service comparable to 4G or 5G ultimately."

 

And then there's the space trash problem, warns Paul Kostek, a senior member
at IEEE, the world's largest technical professional organisation.

 

"We're talking thousands of small satellite launches and there's a traffic
management problem that people have not really encountered before," he says.

 

"What happens if one satellite gets hit by space debris, breaks apart and
goes into the orbit of another constellation? You've added more debris in
orbit around the Earth."

 

He doesn't think geostationary satellites will become obsolete, but legacy
space firms are wary.

 

"Everyone's trying to work out where they fit in. There's going to be a
shake-up going forward," says Mr Kostek.--BBC

 

 

 

U.S. consumer spending decreases further; inflation creeping up

WASHINGTON (Reuters) - U.S. consumer spending fell for a second straight
month in December amid renewed business restrictions to slow the spread of
COVID-19 and a temporary expiration of government-funded benefits for
millions of unemployed Americans.

 

The report from the Commerce Department on Friday also showed inflation
steadily rising last month. Expectations that inflation would perk up this
year were supported by other data showing a solid increase in labor costs in
the fourth quarter.

 

But a rise above the Federal Reserve’s 2% target, a flexible average, is
unlikely to worry policymakers. The U.S. central bank is expected to
maintain its ultra-easy monetary policy stance for a while as the economy
battles the pandemic. Excess capacity remains throughout the economy, which
could limit companies’ ability to raise prices.

 

“The Fed would like inflation to average 2%, so it would like inflation to
temporarily move above 2%,” said Gus Faucher, chief economist at PNC
Financial in Pittsburgh, Pennsylvania. “Inflation pressures will remain
limited to a few sectors as high unemployment will restrain wage growth.”

 

Consumer spending, which accounts for more than two-thirds of U.S. economic
activity, slipped 0.2% last month as outlays at restaurants declined.
Spending at hospitals also fell, likely as patients stayed away in fear of
contracting the coronavirus.

 

Households also cut back spending on recreation. Consumer spending tumbled
0.7% in November. Economists polled by Reuters had forecast spending would
fall 0.4% in December.

 

When adjusted for inflation, consumer spending decreased 0.6% last month
after dropping 0.7% in November. That likely sets a lower base for consumer
spending in the first quarter.

 

Another drop in January is not expected as states, including New York and
California, have started easing pandemic-related restrictions. But outlays
on long-lasting manufactured goods, the main driver of spending during the
pandemic, fell for a second consecutive month in December. Spending on
nondurable goods dropped for a third straight month. Services gained 0.1%.

 

“Goods spending has clearly rolled over, and we anticipate the pull-forward
in demand in the second half of last year will also weigh on consumption of
goods at the start of this year,” said Tim Quinlan, a senior economist at
Wells Fargo Securities in Charlotte, North Carolina. “We do not anticipate
spending to pick up significantly until a vaccine is widely administered.”

 

U.S. stocks fell sharply. The dollar was steady against a basket of
currencies. U.S. Treasury prices were mostly lower.

 

The data was included in Thursday’s advance gross domestic product report
for the fourth quarter, which showed the economy growing at a 4% annualized
rate after a record 33.4% pace in the July-September period. Consumer
spending rose at a 2.5% rate last quarter following a spectacular 41.0%
growth pace in the third quarter.

 

Separately on Friday, the University of Michigan said its measure of
consumer sentiment eased in January. A third report from the National
Association of Realtors showed contracts to purchase homes decreased for a
fourth straight month in December, suggesting some moderation in the housing
market, one of the economy’s star performers.

 

Growth is expected to decelerate to around a 2% rate in the first quarter as
the economy works through the disruptions from a COVID-19 surge in the
winter. Faster growth is expected by summer. The government provided nearly
$900 billion in additional relief in late December and distribution of
vaccines is expected to broaden and accelerate.

 

President Joe Biden also has unveiled a recovery plan worth $1.9 trillion,
though the package is likely to be pared down amid worries about the
nation’s swelling debt.

 

The late December stimulus package, which included direct cash payments to
some households and renewal of a $300 unemployment supplement until March
14, helped to boost personal income, which rebounded 0.6% after tumbling
1.3% in November.

 

Some of the money was stashed away, boosting the saving rate to 13.7% from
12.9% in November.

 

Inflation crept higher. The personal consumption expenditures (PCE) price
index excluding the volatile food and energy component gained 0.3% after
being unchanged in November. In the 12 months through December, the
so-called core PCE price index increased 1.5% after advancing 1.4% in
November. The core PCE price index is the Fed’s preferred inflation measure.

 

Gradually firming inflation was reinforced by a fourth report from the Labor
Department showing its Employment Cost Index, the broadest measure of labor
costs, rose 0.7% last quarter after advancing 0.5% in the third quarter.

 

The ECI is widely viewed by policymakers and economists as one of the better
measures of labor market slack and a predictor of core inflation, as it
adjusts for composition and job quality changes. Wages jumped 0.9% last
quarter.

 

But with employment still 10 million jobs below the pre-pandemic peak, the
rise is probably unsustainable. Still, inflation is seen accelerating in the
months ahead as weak readings last March and April drop from the
calculation.

 

Strengthening economic growth is also expected to boost price pressures.
Bottlenecks in the supply chain are raising costs for manufacturers, and the
increases are being passed on to consumers. Recent manufacturing surveys
have shown a surge in price measures for both raw materials and finished
products.

 

“Though inflation will accelerate this year, some of that will be
transitory,” said Ryan Sweet, a senior economist at Moody’s Analytics in
West Chester, Pennsylvania.

 

 

Nigeria: FG to Commence Procurement Process for Highway Concessions

The Minister of Works and Housing, Mr. Babatunde Fashola, SAN, has said that
with the receipt of the Certificate of Compliance, the Federal Government is
to officially commence the procurement process for the highway concessions
under the Highway Development and Management Initiative (HDMI).

 

According to the Minister, the HDMI would facilitate further development of
Nigeria's federal highway network by bringing in investment to improve
efficiency, accountability, and profitable entrepreneurship to the
operation, management, and maintenance of all assets within the Right of Way
on the highways.

Mr. Fashola said that the initiative has further affirmed the President
Muhammadu Buhari administration's commitment to infrastructure development
funding which has been driven by the Road Infrastructure Development and
Refurbishment Investment Tax Credit Scheme Order of 2018 , the Presidential
Infrastructure Development Fund (PIDF) being managed by the Nigeria
Sovereign Investment Authority (NSIA) and the SUKUK Fund.

 

He noted that through such initiatives the Federal Government has been
leveraging on private sector funding and participation in the development of
critical infrastructure across the country and the HDMI is another
innovation developed to attract the private sector.

 

The Minister who spoke at the official handover of the Certificate of
Compliance by ICRC, explained that the HDMI was a fully home-grown idea that
would deliver a safer and enjoyable travel experience for Nigerian road
users as travel time would be shortened, cost reduced, and commercial
activities stimulated.

Explaining further, he said the HDMI is an indigenous Land Value Capture
scheme conceived by the Ministry to develop Nigeria's network of federal
highway corridors and boost economic development along the Right of Way. He
added that it would be executed in two parts comprising Value Added
Concession (VAC) and Unbundled Assets Approval (UAA).

 

On the economic benefits, Mr. Fashola said: "Apart from infrastructure and
assets development, thousands of jobs will be created for Nigerians as the
initiative will open up the highway economy with opportunities in various
economic activities including fabrication of gantries and directional
signages with advertising opportunities, towing van operations and auto
repair stations, operation of rest areas and emergency services, among
others."

 

Continuing, he said: " When fully operational road users will now enjoy
first-class facilities on federal highways with directional signages,
well-equipped rest areas, round-the-clock security patrol, and ambulance
services for emergencies".

Mr. Fashola appreciated and commended the Infrastructure Concession
Regulatory Commission's (ICRC) diligent appraisal of the initiative and for
issuing Certificate of Compliance to the Federal Ministry of Works and
Housing to proceed with the Highway Development and Management Initiative
(HDMI).

 

In his welcome address the Permanent Secrtary, Federal Minsitry of Works and
Housing Babangida Hussaini said that the development, expansion and
maintenance of federal highways have increasingly become a herculean task to
government due to dwindling revenues and other compelling public service
obliigaitons.

 

He said: "It is to mitigate this challenge that the Ministry has adopted the
option of exploring the Public Private Partnership (PPP) arrangement , which
seeks to employ the private sector's technical competencies , managerial
capabilities and financial resources to salvage the federal roads networks."

 

According to him, the PPP arrangement in the management of our highways will
bring order, efficiency, accountability and profitable entrepreneurship to
the operation, management , maintenance of all assets within the nation's
right of way.

 

Earlier, the Director-General of the Infrastructure Concession Regulatory
Commission (ICRC), Engineer Chidi Izuwah represented by Barr. Joel Micheal
Ohiani , who presented the certificate to the Minister in Abuja on Friday
29th January, 2021 said that the initiative would enable private sector
participation in the management and maintenance of road assets through
Public-Private Partnership (PPP) arrangements.

 

The Infrastructure Concession Regulatory Commission (ICRC) is charged with
the responsibility of developing guidelines for monitoring contract
compliance during construction, operation, and contract termination and
supporting MDAs like the Ministry of Works and Housing in achieving such
compliance.

 

Over time, ICRC had collaborated with the Ministry of Works and Housing, to
implement a cohesive national legal, policy, and regulatory environment that
was conducive to private sector investment in Nigeria's roads and housing
projects.

 

He commended the novel initiative and said that it would create jobs, boost
the government's revenue, and speed up Nigeria's economic recovery, citing
the popular Chinese proverb that says, "If you want to grow rich, build a
good road first."-This Day.

 

 

 

Tanzania: Govt to Issue New IDs for Petty Traders

PLANS are underway by the government to introduce new Identity Cards (IDs)
for petty traders that will contain extra information to enable them access
services from various institutions including banks.

 

Prime Minister Kassim Majaliwa said the IDs which have been improved will
contain a card holder's photograph and some personal details for one's easy
identification when seeking services from various institutions.

 

He said the cards will be out as from April 1 this year, and called upon
Regional and District Commissioners to ensure petty traders conduct their
businesses peacefully especially at this time where their previous IDs have
expired.

The Premier made the revelation in a meeting with petty traders from all
regions in the Mainland, financial institutions' leaders, some ministers and
government executives in Dar es Salaam on Thursday.

 

He said that the IDs will contain photograph of a respective petty trader,
thus it will not be possible for the same card to be used by another person,
adding: "The IDs will last for between two and three years contrary to the
previous cards which were valid only for a year. "The government through
President John Magufuli has decided to issue the official IDs to enable
petty traders to be easily recognised and access important services
including financial services," he added.

 

However, Mr Majaliwa directed petty traders' leaders to ensure they have
correct number(s) of petty traders within their jurisdiction so that they
become easily accessed and served.

 

"You should have a database of petty traders to facilitate communication
between your federation and government," further said the Premier.

 

Elaborating, he said petty traders should unite from the grassroots to the
national level, noting: "If you form an association, you can be identified
and it will be easy for financial institutions to reach you with loans and
help you grow."

 

During the occasion, Mr Majaliwa pledged to continue creating a favorable
environment for petty traders countrywide so that they operate without any
interference.

 

In the pledge, he ordered authorities responsible in the construction of
market places to see into it that they construct relevant infrastructures,
which can accommodate the traders.

 

"The sector accounts for 27 per cent of the gross domestic product and
accumulates a total of 3.1 million entrepreneurs, which is equivalent to
23.4 per cent of the country's workforce. In December 2018, President John
Magufuli handed out a total of 670,000 IDs to petty traders, whose business
capital does not exceed 4m/-.

 

Equally, he presented 25,000 IDs to every Regional Commissioner to also
issue them to the targeted population in their areas of operations.

 

Before the exercise, President Magufuli said Tanzania with a population of
55 million people had only 2.2 million people paying taxes in comparison to
neighbouring countries, including Kenya.

 

In his directive, he ordered Tanzania Revenue Authority (TRA) to ensure
taxes are not too high for petty traders to afford, adding that his issued
IDs should be formally recognised by officials collecting taxes.- Daily
News.

 

 

 

Nigeria: IMF Foresees Improved Capital Spending in Nigeria

The International Monetary Fund (IMF) has projected that Nigeria's capital
spending will improve this year while anticipating that financing the
country's deficit will remain a challenge with its huge debt servicing
burden.

 

The IMF, in its updated 'Fiscal Monitor' report titled: 'Government Support
is Vital as Countries Race to Vaccinate,' released yesterday, projected
overall fiscal balance to be 5.9 per cent and 4.7 per cent for 2020 and 2021
respectively.

 

The report noted that this was an improvement compared with the 0.8 per cent
and 0.2 per cent it had projected for the country in its October 2020
report.

 

Having classified Nigeria as a low-income developing country, the IMF said
capital spending in 2021 was expected to recover partially in most countries
such as Guinea, Haiti, Malawi, Nigeria and Tajikistan, after the temporary
cut in 2020.

The average overall fiscal balance was estimated to be lower in 2020 by 1.7
percentage points of GDP, and the average public debt increased by 5.2
percentage points to 48.5 per cent of GDP at end-2020.

 

It said: "The average overall fiscal balance is estimated to be lower in
2020 by 1.7 percentage points of GDP and the average public debt increased
by 5.2 percentage points to 48.5 per cent of GDP at end-2020.

 

"Even after accounting for higher external grants and exceptional emergency
and concessional financing in many countries (including from the IMF),
average revenues fell sharply.

 

"Expenditures continued to rise in real terms, notably in health spending
and social assistance to vulnerable households. Many governments
reprioritised spending for example, by cutting capital expenditures."

 

The IMF stated that in 2021, the average fiscal deficit was projected to
decline to five per cent of GDP from 5.7 per cent in 2020.

 

As economies recover, the multilateral institution expects revenue
collection to improve, whereas pandemic-related spending is projected to
decline.

"Capital spending in 2021 is expected to recover partially in most countries
after the temporary cuts in 2020 (Guinea, Haiti, Malawi, Nigeria,
Tajikistan). However, deficits are expected to widen in a few countries as
revenue-to-GDP ratios only partially recover while spending and debt service
costs are rising (Chad, Kenya, Myanmar).

 

"Although prospects for market financing are improving in some frontier
market economies, near-term debt vulnerabilities remain high in many
countries. Financing large deficits remains challenging, given limited
market access and restricted ability to increase revenues in the near term.

 

"Average debt levels are projected to peak in 2021, with debt service
relative to tax revenues exceeding 20 per cent in Ghana, Kenya, Myanmar,
Nigeria, and Zambia and an upward debt trajectory in some, especially
oil-exporting countries, such as Nigeria," it added.

 

It said actions were taken to provide grants, concessional loans and debt
relief to address the steep rise in public debt of low-income developing
countries in 2020, including the 38 countries (out of 70) assessed to be "at
high risk" of or in debt distress, according to the IMF-World Bank Debt
Sustainability Assessments.

 

Fiscal adjustments in several countries (Ethiopia, Vietnam) and debt
restructuring (Chad, Republic of Congo) were expected to contribute to debt
reduction, it added.-This Day.

 

 

Namibia: Govt Throws Air Namibia to the Lions

Air Namibia's board has pleaded with the government for a N$95 million
bailout, but the state appears to have allowed a private company to shut
down the airline through the courts.

 

Air Namibia's closure could cost the state more than N$2 billion and would
affect 644 workers.

 

The national airline has been on the verge of collapse for years, but the
situation has taken a turn for the worse since last year.

 

Some politicians and their cronies are allegedly ganging up on the national
airline to shut it down, a scenario which would give a private airline an
advantage in Namibia's aviation market.

 

Air Namibia said it wants the N$95 million to pay off a debt from a company
called Challenge Air.

 

The dispute is linked to a March 1998 agreement for Air Namibia to lease a
351-passenger plane - a Boeing 767-300 - from Challenge Air.

 

Air Namibia terminated the agreement after discovering the aircraft was
defective.

Challenge Air was liquidated soon afterwards, but the transaction has
continued to haunt Namibia's national airline.

 

The government has in the past refused to pay Challenge Air.

 

In fact, minister of works and transport John Mutorwa said in 2018 that the
government will defend a case brought by a Belgian company that is
threatening to take over Air Namibia and TransNamib properties because of a
disputed N$400 million payment.

 

But the government started giving in after 2019. Some Air Namibia officials
did not want Challenge Air to be paid taxpayers' money.

 

Lawyer Sisa Namandje, who represents Challenge Air, wrote to Mutorwa on 11
October 2018, giving the government 10 days to negotiate or face the
consequences.

 

Namandje stated in his letter to Mutorwa that Air Namibia and TransNamib
failed to pay the N$400 million to Challenge Air as required by court
judgements in France in 2011 and Germany in 2015.

Namandje represents business people Wilhelm Shali and Anicet Baum, who
represent the Belgian company. Shali is the main shareholder in Shali Group
Namibia, while Baum is a Belgian lawyer.

 

A settlement agreement with Air Namibia was reached in December 2019, in
which the airline acknowledged it owed Challenge Air around N$333 million
and undertook to pay that sum in monthly instalments until September 2020.

 

By April 2020 Air Namibia repaid about N$150 million at the time, and then
stopped paying.

 

Baum is asking the High Court to order the shutdown of Air Namibia as a
result of money the national airline owes Challenge Air, which has been
declared bankrupt.

 

Baum is charging that Air Namibia has admitted it is unable to pay its debt
to Challenge Air and is therefore commercially insolvent.

JUDGEMENT DAY

 

The High Court is expected to announce today whether Air Namibia would shut
down.

 

The legal onslaught against the national airline comes six months after the
Cabinet decided to close down Air Namibia.

 

Sources familiar with Cabinet decisions said this was decided on 12 August
2020.

 

"The Cabinet approved that Air Namibia be liquidated," a recommendation from
that meeting said.

 

Another recommendation was that Air Namibia's 644 workers be paid for 12
months in consultation with the unions.

 

"Cabinet approves that the minority of public enterprises be mandated
through the Cabinet committee on treasury to appoint a technical expert in
the aviation industry to advise the government on renegotiating terms of the
A330," the resolution said.

 

President Hage Geingob has in the past said the national airline would be
shut down.

 

"Air Namibia must be liquidated . . . It is not making any profits and it is
just being bailed out," Geingob said in parliament last year.

 

Yet, the government has allowed a group of Namibians and their Belgian
lawyer to demand a payment that dates back 20 years.

 

State House spokesperson Alfredo Hengari declined to comment on the matter
ahead of today's court case.

 

BEGGING BOWL

 

Air Namibia's board chairperson, Escher Luanda, refused to comment on the
matter yesterday.

 

He wrote to minister of public enterprises Leon Jooste on Wednesday pleading
for the government to rescue the company.

 

He said the company owes Challenge Air around N$173 million, but around N$95
million is outstanding.

 

Challenge Air appears to be hell-bent on getting every cent from Air
Namibia's payment agreement.

 

The national airline said it consulted Jooste on 21 January.

 

They discussed the possibility of a government bailout to settle the
Challenge Air payment.

 

"The shareholder (government) indicated that the contingency budget was
exhausted and hence could not source any funds prior to the end of the
financial year," Luanda said.

 

He warned that the airline would be placed in the hands of liquidators if
the government fails to chip in.

 

This, he said, would imply that neither the board nor the shareholder shall
have any powers over the affairs of the organisation.

 

"The liquidation can be very complex and protracted and only serve to
frustrate all the stakeholders. This could take up to five years," he said.

 

According to him, the liquidation would trigger cross-defaults on debts owed
by Air Namibia.

 

"Air Namibia has a workforce of 644 employees, all of whom will lose their
jobs," he said.

 

Luanda said Air Namibia would lose several key licences with international
agencies.

 

"The liquidation would erode any possible value in the airline's assets,
with the six aircraft and the head building having to be auctioned at
negligible amounts of as little as 20%," he said.

 

Luanda said all the bilateral air services agreements entered into between
Air Namibia and countries into which Air Namibia flies, would be terminated.

 

DENIAL

 

Jooste yesterday denied the allegations that the government was preparing
for another airline.

 

"I can confirm that neither I nor the Cabinet committee on treasury have had
any discussions, or are aware that Westair has offered to buy Air Namibia's
aircraft.

 

"There is a pending court case and I am therefore not at liberty to divulge
any additional information," he said.

 

Jooste is one of the high-ranking government officials accused of pushing
for the parastatal's closure.-Namibian.

 

 

 

Namibia: FMD Cripples Meat Sales

THE outbreak of foot-and-mouth disease in northern Namibia has severely
affected the red meat producers and kapana sellers who were already reeling
from the effects of the Covid-19 pandemic.

 

The sale of red meat has resulted in job losses as many kapana and red meat
vendors abandoned their stalls and those that remained are appealing to the
government to lift the ban on the movement of livestock.

 

The first case of FMD was reported at Olukonda constituency in Oshikoto
region on 28 December 2020 by the Ministry of Agriculture, Water and Land
Reform.

 

Another case was reported at Uuvudhiya constituency in Oshana region on 6
January and the ministry put measures to control the spread of the disease.

Animals can therefore only be moved under strict regulations and with
permission from the Department of Veterinary Services.

 

This has resulted in livestock producers in the north not being able to sell
to kapana and red meat vendors. Enterprising vendors have to buy meat south
of the veterinary cordon fence.

 

Taimi Iitula, a meat seller at Oshakati open market told The Namibian that
her business and those of other meat sellers had been badly hit because they
are struggling to get cattle for slaughter.

 

Meat sellers are now buying meat from auctions at commercial farms around
Grootfontein, Otjiwarongo and Brakwater near Windhoek which is costly.

 

"We are no longer making any profit from the meat because one ends up
spending the little profit on transport.

"We have to attend auctions and hire transport for the meat because we
cannot move live animals. The animals are slaughtered there and the meat is
delivered to us. Sometimes drivers take long on the way and the meat goes
bad and we lose customers.

 

We do not know how long the ban will last but in all honesty, we have
suffered great losses," said Iitula.

 

The shortage of meat has forced those still in business to increase their
prices.

 

"All those stalls are vacant because people cannot afford to buy expensive
cattle beyond the veterinary fence. Sometimes it takes two weeks to sell a
carcass because people can no longer afford meat.

 

Last year, we suffered huge losses due to the Covid-19 and this year it is
another disease outbreak. The government should at least consider our
plight," she said.

 

Kapana seller Amon Nangolo at Omuthiya open market in Oshikoto region said
the ban had placed a huge burden on business owners due to poor sales.

 

"The government must assist us by lifting some of the restrictions and allow
the movement of live animals. At the moment we buy cattle at Grootfontein
and slaughter them there, and we still pay the people who slaughter the
cattle and then transport the carcass," he said.

 

The northern regions of Oshana, Oshikoto, Omusati, Ohangwena and Kunene were
declared disease management areas where strict measures are
instituted.-Namibian.

 

 

 

Namibia Expects N$1 Billion From Grapes

Thanks to a "terrific" grape season that has far exceeded expectations,
Namibia's grapes are expected to fetch about N$1 billion in export revenue,
grape growers informed The Namibian this week.

 

The 2020/21 Namibian table grape season started about 10 days later than
normal and it ended on a high note - 12% above initial estimates, according
to vice chairman of the Namibian Grape Growers Association, Kobus Bothma.

 

The season estimate for Namibia was 7,6 million x 4,5kg boxes (34 200
tonnes), but instead it delivered 8,6 million x 4,5kg boxes (38 700 tonnes).

For the 2019/20 season, Namibia shipped out 33 000 tonnes of table grapes,
earning N$840 million.

 

Namibia's grape season is from November to January but cooler conditions in
August and September delayed the season. According to Bothma, this was a
blessing in disguise.

 

"The delay in starting, coupled with ideal weather conditions during the
packing period, have in fact produced grapes of excellent quality," he said.

 

Cold winters, not too cold conditions in spring, and temperatures in the
mid-30s for November and December, with no rain in the harvesting period,
are ideal conditions for the grape industry.

 

There are several varieties of grapes grown in Namibia, namely white, red
and black - mainly seedless for table grape production and exports. Brandy
can be produced as a secondary product from the waste berries, but to
produce good white and red wines, different varieties are needed.

Besides Capespan Namibia, which produces a quarter of Namibian grapes, there
are about 10 companies at Aussenkehr, Noordoewer, Naute Dam and Komsberg
producing table grapes for or export purposes. The Namibian Grape Growers
Association represents all table grape growers, who employ up to 12 000
permanent and seasonal workers.

 

Namibia's main export destinations are Europe, the United Kingdom, the
Middle East, Africa and North America. The local market is relatively small
and 1% of table grapes are consumed in Namibia.

 

Bothma said the industry's greatest challenge currently is market access

 

"More markets like China will ensure sustainability. Infrastructure also
needs be addressed, like the upgrade of the Lüderitz harbour and tarring of
the road from Aussenkehr to Rosh Pinah so that Namibian ports can be used
for exports," he said.

 

He said the association is optimistic though, and hopes to grow through the
development of new markets and varieties, which in turn will translate to
more jobs for Namibian citizens, which will then have a positive effect on
the Namibian economy.-Namibian.

 

 

 

 

 


 


 


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.

 


 

 


(c) 2021 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

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