Major International Business Headlines Brief::: 01 July 2021

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Major International Business Headlines Brief::: 01 July 2021

 


 

 


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ü  Trump Organization indicted in tax investigation, US media report

ü  Didi: Chinese ride-hailing giant makes $68bn US debut

ü  Covid: UK's furlough scheme starts to wind down

ü  Gap to close all 81 stores in UK and Ireland

ü  Sunak to outline UK roadmap for financial services

ü  The Amazon sellers who sold up and became millionaires

ü  Tim Berners-Lee sells web source code NFT for $5.4m

ü  TikTok removes more than seven million suspected under-age accounts

ü  Right to repair rules will extend lifespan of products, government says

ü  Bank of England's Andy Haldane voices 4% inflation fear

ü  Dealmakers drown in deals in second-quarter M&A frenzy

ü  EXCLUSIVE Shell plans to exit California joint venture with Exxon Mobil
-sources

ü  U.S. natgas companies put hydrogen to the test

ü  China solar association says Xinjiang forced labour claims unfounded

ü  Asia M&A bonanza fuelled by Southeast Asia, private equity deals

ü  Rwanda: Zipline Raises $250 Million for Operations Expansion

ü  Malawi: CRA Calls for Structured Markets for Cannabis Growers

ü  Nigeria: Traders, Experts Worry As Naira Free Fall Continues

ü  Liberia: U.S. Recommends Steps to Improve Liberia's Fiscal Transparency

ü  Nigeria: Govt to Pay Pension Arrears of Retired Civil Servants

 

 

 

 

 

 

 

 


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Trump Organization indicted in tax investigation, US media report

Former US President Donald Trump's company and its finance chief have been
indicted in an investigation into alleged tax crimes, US media report.

 

The specific charges against the company and Allen Weisselberg, 73, are
still unclear. They are expected to be made public on Thursday.

 

Mr Trump is not expected to be implicated personally in the case.

 

New York City has already cut business ties with the twice-impeached former
president.

 

The Trump Organization is a family holding company that owns hotels, golf
clubs and other properties.

 

Any criminal charges brought against it would mark the first in long-running
investigations on alleged fraud by both the Manhattan district attorney and
the state attorney general.

 

Charges by District Attorney Cyrus Vance are expected to focus on whether Mr
Weisselberg and other company executives received benefits such as apartment
rentals or leased cars without reporting them properly on their tax returns.

 

Mr Weisselberg and lawyers for the Trump Organization are expected to make
their first court appearance on Thursday, according to the New York Times,
Wall Street Journal and Associated Press, which quote unnamed sources.

 

Mr Trump and his allies have said the investigations are politically
motivated.

 

In a statement earlier this week, Mr Weisselberg said the case was looking
at "things that are standard practice throughout the US business community,
and in no way a crime".

 

If the company is found guilty, however, certain business partners might
draw a line under their relationship with the Trump Organization and the
company could face fines.

 

New York City, for example, has already announced it will terminate
contracts with the firm to run skating rinks, a carousel and a golf course,
in the aftermath of the US Capitol riots.

 

Daniel Goldman, who was lead lawyer in the US House of Representatives for
the first impeachment of Mr Trump in 2019, tweeted that the indictment could
spur lenders to call in their loans, driving the Trump Organization to
bankruptcy.

 

The investigations will also take into account eight years of Mr Trump's
personal and corporate tax returns, obtained by prosecutors after a long
legal battle, which ended in the Supreme Court in February.

 

Mr Trump, who inherited money from his father and went on to become a
property developer, is the first president since Gerald Ford in the 1970s
not to have made his tax returns public.

 

Despite facing a number of investigations, the former president has denied
any wrongdoing personally or in his business.

 

Representatives for the Trump Organization, Donald Trump and Allen
Weisselberg did not immediately respond to the BBC's request for
comment.—BBC

 

 

Didi: Chinese ride-hailing giant makes $68bn US debut

Chinese ride-hailing giant Didi Global has ended its first day on the New
York Stock Exchange with a valuation of $68.49bn (£49.6bn).

 

That is even as its shares closed just 1% higher than their $14 offering
price after slipping back from earlier strong gains.

 

It was the biggest listing in the US by a Chinese company since Alibaba's
debut in 2014.

 

China's answer to Uber raised $4.4bn in the Initial Public Offering (IPO).

 

It is the latest in a series of Chinese companies to cash in on the booming
US stock market.

 

In the first six months of the year, some 29 Chinese companies raised a
total of $7.6bn in IPOs, according to financial markets data provider
Refinitiv.

 

This is despite years of tensions between Washington and Beijing, and
concerns raised by US regulators over some Chinese firms' financial reports.

 

Didi had originally hoped for a valuation of as much as $100bn, according to
a Reuters report in March.

 

Those expectations were said to have been scaled back after potential
investors voiced concerns about the speed and profitability of the firm's
expansion plans.

 

Didi, like the majority of ride-hailing platforms, had been loss-making
until it reported a $30m profit for the first three months of this year.

 

In 2020, it reported a $1.6bn annual loss as the business was hit by the
pandemic.

 

In June this year, it was reported that Didi was being probed by China's
market watchdog.

 

The State Administration for Market Regulation was investigating whether it
had unfairly squeezing out smaller rivals, according to Reuters.

 

Beijing has been increasingly reining in the country's technology giants,
including Alibaba and Tencent.

 

The company's founder Cheng Wei has said he had the idea to launch a
ride-hailing platform in 2012 after he struggled to book a taxi on a
freezing night in Beijing.

 

Mr Cheng will own a 6.5% stake in the company, while having a 35.5% voting
power due to a dual-class share structure that is popular among technology
firms.

 

Japan's SoftBank is Didi's largest single investor with a stake of more than
20%. It is also backed by Chinese technology giants Alibaba and Tencent.

 

Uber also owns 12% of the firm as a result of Didi taking over Uber China in
2016.-BBC

 

 

Covid: UK's furlough scheme starts to wind down

Employers will have to shoulder more of the costs of furlough from Thursday
as the government starts to wind down its flagship job support scheme.

 

With about 1.5 million workers still on furlough, the change will affect
thousands of firms across the country.

 

Staff will continue to receive 80% of their wages, but employers will pay
part of that for the first time.

 

That could prompt layoffs, with older workers at greater risk of redundancy,
according to one think tank.

 

The Institute for Fiscal Studies said the bill for employers keeping a
member of staff on the scheme would rise from £155 per month currently,
which covers costs such as National Insurance, to £322 in July and £489 in
August and September.

 

As a result, firms might reconsider whether they will retain staff, the IFS
said.

 

 

"The furlough scheme does need to be wound down as the economy recovers,
rather than attempting to keep every job on life support. But this does mean
that some will end up unemployed," said Tom Waters, a senior research
economist at the IFS.

 

What is changing?

>From 1 July, employers must pay 10% of their furloughed workers' usual wage,
while the government will continue to pay the other 70%.

 

>From 1 August, the employers' contribution rises to 20%, with the
government's contribution reducing further.

 

The government has spent £66bn on the Coronavirus Job Retention Scheme, as
furlough is officially known, and it has supported 11.2 million jobs since
March 2020.

 

At the end of March this year, more than a third of employers still had
staff on furlough. But since then, the gradual opening up of non-essential
retail and large parts of the hospitality sector has allowed many of those
workers to return.

 

Now only about one in 20 workers who are employed by businesses are either
fully or partially furloughed.

 

However, some workers in sectors that have been particularly hard hit by
measures to curb the pandemic, such as night clubs and international travel,
have been furloughed for many months.

 

Gemma Walker, 36, from Bradford, loves her job as an account manager for
Newmarket Holidays. But she hasn't seen clients or gone into the office for
15 months.

 

She can see the scheme has been a lifeline for the business, but for her,
the experience has been hard.

 

"I felt an overwhelming sense of guilt about the colleagues at Newmarket who
are still working," she says. "They've really held the fort for the rest of
our team."

 

She used to travel around the country, talking to clients and going to
conferences.

 

"When something like that is completely taken away from you, you almost feel
lost," she says. "My purpose is gone now because this is what I've worked
towards my whole career, starting way back when I was 17 years old.

 

"I went through a stage of making sure I set an alarm every morning getting
up," she says.

 

"You have to get yourself in a mindset of, 'I have to carry on, I have to do
something,' because I don't know when I'm going to be going back."

 

The furlough scheme has been praised for providing workers with some
security. Unemployment has remained below 5%, despite early fears it would
rise much higher as the pandemic pulled the rug from under the economy.

 

Employers welcomed the scheme as a way to retain staff that were trained and
qualified, who they wanted to keep in place for when they were able to
reopen.

 

"We've tried to retain as many people as possible," said Mark Vincent, chief
financial officer at travel company, Newmarket Holidays.

 

"The furlough scheme has been critical. It's part of the difference between
survival and not."

 

But he said that realistically, travel firms, which have had two summers of
interrupted business, might need to reconsider staffing levels.

 

"In those winter months, we're all going to be loss-making and therefore,
we're going to have to relook at what we do with our staffing."

 

Steve Haslam, who owns pub chain TLC Inns, is sceptical of the benefits of
furlough.

 

"I am so grateful for the government to have supported my team because, by
supporting the team on furlough, my employees, they managed to live and pay
their bills."

 

But he says it has not helped him retain staff.

 

"A lot of people didn't come back to work... because they just didn't want
to come back, either into the industry or they'd gone off and found second
jobs. We had one site where 80% of staff left."

 

He believes the end of furlough will make it easier for hospitality
businesses like his to recruit new staff.

 

Parked on furlough

At the start of the pandemic, most of those on furlough were in younger age
brackets. They were staff working in hospitality, travel, arts and leisure.

 

But as the economy has reopened, many younger workers have returned to work.
Now about half of the people left on furlough are over 45, according to the
Resolution Foundation.

 

The think tank says that older workers on furlough are now more likely to be
let go, if businesses decide to restructure in the face of uncertainty.

 

"Reopening the economy has led to a surge in people returning back to work
from furlough, particularly young people in sectors like hospitality and
leisure," said Karl Handscomb, senior economist at the Resolution
Foundation.

 

"But not everyone is back working. Over one in four older workers who were
furloughed during the recent lockdown have remained parked on furlough
during the reopening, and now face a higher risk of unemployment as the
scheme starts to be unwound."-BBC

 

 

 

Gap to close all 81 stores in UK and Ireland

US fashion giant Gap has confirmed it plans to close all its 81 stores in
the UK and Ireland and go online-only.

 

The firm said it would close all its stores "in a phased manner" between the
end of August and the end of September.

 

This includes 19 stores that were already scheduled to close in July as
their leases were expiring.

 

The company has not disclosed how many employees the closures will affect,
but will shortly start a consultation process with the staff.

 

The firm said it was "not exiting the UK market" and would continue to offer
a web-based store when all the shops had closed.

 

A Gap spokesperson said the decision followed a strategic review of its
European business.

 

As a result, Gap is also looking to offload its stores in France and Italy.

 

Gap was a big hit when it first opened in the UK back in 1987, famous for
its hoodies and sweatshirts. But in recent years, it has struggled to stay
relevant, resorting to prolific discounting to pull shoppers in. That left
Gap in a weak position to withstand the turmoil of a global pandemic.

 

It launched a strategic review of its entire European operations last
autumn, warning that it was considering closing all its UK stores. Just a
few weeks ago, 19 store closures were announced - now the rest of them will
close as well.

 

Gap blamed what it described as market dynamics - in other words, the huge
shift to internet shopping. It's going online-only, just like Debenhams and
Sir Philip Green's Arcadia group. It's yet another famous name bidding a
retreat from our High Streets, adding to the challenge of what to do with
empty shops.

 

The company said it was in negotiations with another firm to take over all
of its French stores.

 

In Italy, Gap said it was in discussions with a partner for the potential
acquisition of the stores there.

 

"We believe in Gap's global brand power. We are executing against Gap's
Power Plan and partnering to amplify our global reach," the spokesperson
said.

 

"We are not exiting the UK market. We will continue to run and operate our
Gap e-commerce business in the United Kingdom and Republic of Ireland."

 

A source close to the company said that it had seen rapid uptake of internet
shopping for its clothes in the UK since the pandemic-enforced lockdowns.

 

The move comes as the latest blow to UK High Streets, already reeling from
the collapse of the Debenhams and Arcadia retail empires during the
pandemic.

 

The Debenhams brand continues online after being bought by retailer Boohoo
for £55m in January - and now Gap has added to the ranks of
bricks-and-mortar clothing chains that have moved to cyberspace.-BBC

 

 

Sunak to outline UK roadmap for financial services

Chancellor Rishi Sunak is expected to pledge to make the UK the most
"advanced and exciting" financial services hub in the world.

 

Speaking at Mansion House later on Thursday, he is due to outline a roadmap
for the sector that aims to "sharpen" its competitive advantage.

 

Mr Sunak will also set out a plan to force companies to report their
environmental impact.

 

Firms will have to say how climate change is likely to affect them.

 

The new Integrated Sustainability Disclosures Requirements will apply to
firms "across the economy", the Treasury said.

 

"As the baton passes to a new generation of leaders in finance, I feel
optimistic about the future. Ambitious at home. Confident internationally,"
the chancellor will say.

 

"With a plan to make this country the world's most advanced and exciting
financial services hub for decades to come, creating prosperity at home and
projecting our values abroad."

 

Further details of what is described as an "ambitious vision" for reforming
the financial sector will be contained in the full roadmap document, to be
published later.

 

Mr Sunak's speech comes amid continuing concern about the future shape of
the UK's financial sector after Brexit.

 

In January, Amsterdam ousted London as the largest financial trading centre
in Europe as Brexit-related changes to finance rules came into force.

 

Climate targets

Thursday's appearance by Mr Sunak will mark the first time that he has given
the traditional Mansion House Speech, which is the chancellor's key policy
speech of the year.

 

It is essentially a platform for him to spell out his view of the economy
and the wider world and his aims for the future.

 

The new measures he is set to announce will add to pressure on big companies
to help mitigate the effects of climate change.

 

Earlier this month, oil giant Shell promised to reduce its greenhouse gas
emissions more quickly following a legal ruling in the Netherlands.

 

Like its rival BP, it has set targets aimed at reducing emissions to "net
zero" by the middle of this century.

 

However, experts say mandatory reporting would be more transparent and make
it easier to compare companies' progress.

 

On Wednesday, the government announced details of a new green bond, which
the Treasury hopes will raise at least £15bn.

 

The money will be invested in zero-emissions buses, offshore wind and
efforts to decarbonise homes and buildings, as well as climate change
adaptation programmes, such as flood defences or tree planting.-BBC

 

 

The Amazon sellers who sold up and became millionaires

Becoming a millionaire was never part of the plan. Michele Venton had left
London for Bournemouth, keen to escape corporate life - and decided to try
selling dresses online.

 

"I always had this idea that I would design this range of dresses for a
particular woman," she says.

 

She found a factory to make her wrap dresses, and listed them for sale on
Amazon, where she was amazed at the amount of interest they attracted.

 

"I soon worked out that, 'Hang on!' - There was a huge opportunity here,"
she says.

 

Clothes, however, were not the easiest product to sell online - too many
problems with sizes, too many returns.

 

But as a mother of two, she had experienced more than once the awkward
feeling of realising that her children were going to a birthday party in a
couple of days, and had no present to give.

 

She started selling emergency gifts for parents on Amazon.

 

In less than four years she was doing nearly £10m worth of business every
year, across Europe and the US.

 

But soon the business got too big. Finding millions of pounds to buy all the
stock she needed for the rest of the year was getting difficult. "It was
going to need somebody with a lot more capital," she says.

 

So in 2019, when an offer came along to buy entire her business - for
multiple millions - she accepted.

 

Amazon allows other sellers to list their wares on its website, and will
even do the delivery or "fulfilment" for them through its formidable
logistics network.

 

The sheer scale of Amazon means that if they get the products and the
marketing right, small sellers can find themselves selling huge amounts
quite quickly.

 

With the pandemic forcing many shops to close, many have seen their sales
grow to the point where they find it hard to meet all their orders.

 

Two years ago, when Ms Venton sold up, it was relatively rare to sell
businesses based entirely on selling via Amazon.

 

The buyer, a private individual, insists that we don't name them or their
products, for fear of attracting competitors or saboteurs - such is the
hypercompetitive world of e-commerce.

 

But over the past year, a new generation of firms has sprung up to offer
Amazon entrepreneurs like Ms Venton a way to sell their businesses.

 

The biggest and best-known is a US firm called Thrasio, named after an
Amazon warrior in Greek mythology. They are buying one to three businesses a
week, with around 10 in the UK, and an appetite for more.

 

Founded in 2018, it went from nothing to more than $500m (£360m) in revenue
in its second year, according to its founder Josh Silberstein.

 

"Back then [in 2018], it took seven months to sell a company, there were
more sellers than buyers, and it was just a gigantic mess. The whole thing
was an awful experience for sellers," he says.

 

Just three years later, there are 64 companies around the world set up to
buy Amazon-based businesses, according to the research firm Marketplace
Pulse. Together they have raised nearly $6bn since April 2020, it estimated.

 

In general they look for sellers which have managed to get their heads above
the chaotic hubbub of items for sale on Amazon, building up lots of positive
customer reviews, and appearing in the first page or two of items that
appear in user searches.

 

The best Amazon sellers make attractive investments because they often have
bigger profit margins than their offline competitors, yet still sell for
less than their offline counterparts.

 

The buyout firms hope that by bringing the professional skills and resources
of a larger business, they can help the brands grow faster and become even
more profitable.

 

Amazon buyout firms have sprung up in the UK, too, such as Heroes, founded
by two identical twins, Riccardo and Alessio Bruni.

 

One of their acquisitions was Davaon, a garden tools brand founded by David
Stephen. After many years as a travelling salesman, spending long hours in
traffic jams and lonely hotel rooms, he was looking for a job that would
give him more time with his family.

 

His wife suggested selling things on Amazon. After a $5,000 course, he found
what he felt was an underserved niche - garden tools.

 

After many hours of trawling through the Chinese website Alibaba to find a
supplier, he had a business, a brand, Davaon, and $10,000-worth of secateurs
in his garden shed.

 

Loppers, shears and garden saws soon joined the range, and by 2020 he and
his wife were selling more than £2m a year, bought from suppliers in Taiwan
whom they still haven't met in person.

 

But the goal of an easier life was as far away as ever. "It got to the point
where we looking at 12 to 15 hours a day. I was doing the weekends, it was
non-stop.

 

"If a customer emails on the weekend, you have to answer. I was dealing with
stock coming in, we were packing the boxes ourselves, sending them to
Amazon. There was never really a break."

 

He started to receive offers for his business last year. At first he thought
they were rival sellers, digging for information.

 

Eventually, however, Mr Stephen sold to Heroes, partly, he says, because
they took the trouble to actually visit him in person at his
Northamptonshire home.

 

New Tech Economy

New Tech Economy is a series exploring how technological innovation is set
to shape the new emerging economic landscape.

 

Despite earning enough to retire on, there's something about the thrill of
building brands online that makes it hard for entrepreneurs to step away.

 

Mr Stephen plans to start a new venture soon, and Ms Venton has already
launched another Amazon business. It sells "homewares" - but for fear of
copycats, that's all she'll say.

 

The fact that there's an easy way to cash out after a few years is an extra
incentive. "This is totally, totally my game plan. I am building this to
sell," she says.

 

But though the potential rewards may be rich, it certainly isn't easy money.

 

"If you are prepared to have no income for 18 months and work 12-hour days
to get this thing off the ground, fine," she says. "There are easier ways to
make a buck."-BBC

 

 

 

Tim Berners-Lee sells web source code NFT for $5.4m

The original source code for the world wide web has been sold as a
non-fungible token, making $5.4m (£3.9m).

 

NFTs are certificates of ownership for digital assets, which often do not
have a physical representation.

 

They do not necessarily include copyright control - and critics say they are
get-rich-quick schemes that are bad for the environment.

 

World-wide-web creator Sir Tim Berners-Lee sold the NFT to an unidentified
buyer, through auction house Sotheby’s.

 

The highest bid stood at $3.5m for most of the last day of the auction - but
there were a flurry of bids in the closing 15 minutes.

 

The auction began on 23 June, with an opening bid of $1,000.

 

What are NFTs and why are some worth millions?

Buying a pink NFT cat was a nightmare

The profits would go towards causes chosen by Sir Tim and his wife,
Sotheby’s said.

 

Four different items were sold as part of a single NFT:

 

·         time-stamped files of the source code

·         an animated video of the code being written

·         a letter from Sir Tim

·         a digital poster of the code, created by Sir Tim

The sale surpassed the $2.9m (£2m) spent on Twitter founder Jack Dorsey’s
first tweet but fell short of the record amount an NFT has been sold for -
$69m, for digital artwork by Beeple, at Christie’s auction house, in March.

 

'Royalty free'

Sir Tim created the world wide web, in 1989, by connecting different pieces
of information on the early internet through hyperlinks.

 

He built the first web browser and server, refusing to patent his invention.

 

In 1993, Cern, the research organisation Sir Tim worked for at the time,
relinquished all its rights to the technology and put it in the open domain.

 

And when the NFT auction was announced, Sir Tim told the Guardian: “The core
codes and protocols on the web are royalty free, just as they always have
been.

 

“I’m not selling the web – you won’t have to start paying money to follow
links.

 

“I’m not even selling the source code.

 

"I’m selling a picture that I made, with a Python program that I wrote
myself, of what the source code would look like if it was stuck on the wall
and signed by me.”

 

Sotheby's described the lot as "the only signed copy of the code for the
first web browser in existence", comparing its sale to that of the
handwritten documents of a historic figure.

 

NFTs have been criticised for their impact on the environment, as the
blockchain - where the records of ownership are stored on a digital ledger -
requires huge amounts of energy to run.

 

Sotheby’s said it would pay for a carbon offset for the “minting and
transaction costs of the sale”.-BBC

 

 

 

TikTok removes more than seven million suspected under-age accounts

TikTok removed nearly 7.3 million accounts suspected to belong to under-age
children in the first quarter of this year.

 

The video-sharing platform said the profiles accounted for fewer than 1% of
global users.

 

Children aged 13 and over are allowed to use the platform, which is highly
popular with teenagers.

 

This is the first time TikTok has published such figures in a Community
Guidelines Enforcement Report.

 

It said it hoped the detail about under-age users will "help the industry
push forward when it comes to transparency and accountability around user
safety".

 

The report also said:

 

 

·         61,951,327 videos were removed for violating the app’s rules,
fewer than 1% of all videos uploaded

·         82% of them were removed before being viewed, 91% before any user
reported them, and 93% within 24 hours of being posted

·         1,921,900 ads were rejected for violating advertising policies and
guidelines

·         11,149,514 accounts in total were removed for violating guidelines
and terms of service.

·         TikTok emphasised that it has introduced several measures to
protect teenagers on the platform, including limiting features like private
messaging and live-streaming to users aged 16 and over.

 

Those under the age of 16 will also have their accounts automatically set to
private - a feature introduced in January this year.

 

“To bring more visibility to the actions we take to protect minors, in this
report we added the number of accounts removed for potentially belonging to
an under-age person,” Cormac Keenan, head of trust and safety at TikTok,
said.

 

“In order to continue strengthening our approach to keeping TikTok a place
for people 13 and over, we aim to explore new technologies to help with the
industry-wide challenge of age assurance.”

 

The Chinese app is popular with teenagers but concerns about under-age users
are on the rise.

 

Data that was leaked to the New York Times last year suggested about a third
of US users were aged 14 and under.

 

Under-age users

"One of the challenges TikTok faces that isn't different to [other forms of]
social media is verifying the age of users," said Chris Stokel-Walker,
author of TikTok Boom.

 

"For decades, it's been possible to by-pass age verification checks simply
by saying you're older than you are, and inserting a fake date of birth.

 

"TikTok has some of the tech world's most sophisticated computer vision
technology, and with it, probably has the ability to spot with decent
accuracy under-age users. But using such technology would require a lot of
permissions that people may feel queasy about."

 

It comes as TikTok is being sued over how it collects and uses children's
data.

 

The claim is being made on behalf of millions of children in the UK and EU
who use the platform. The tech firm said the case was without merit and it
would fight it.

 

In January, the Italian data privacy watchdog ordered TikTok to block
under-age accounts, following the death of a 10-year-old girl who tried a
viral challenge on the app.

 

TikTok’s rise and rise has been extraordinary to watch.

 

Not only is it one of the fastest growing apps ever, it’s probably the most
scrutinised too.

 

Like all social networks, the company is forever toeing the line between
attracting teenagers – the future of all platforms – and making sure they’re
not too young.

 

The firm wouldn’t say how exactly it "knows" when a user is under 13, but
the takedown number is impressive and I understand it’s a mixture of
automatic machine processes and - interestingly - time-consuming and costly
human moderation too.

 

Many experts say there’s no "silver bullet" to age moderation on social
networks.

 

Full age verification is often discussed as being the answer, but it’s an
undesirable barrier for tech firms and problematic for customers.

 

Not many parents or children would want to hand over passport details to
tech giants, for example, if enforced age verification was implemented.-BBC

 

 

 

Right to repair rules will extend lifespan of products, government says

Washing machines, TVs and fridges will be cheaper to run under a new legal
right for repairs, the government says.

 

>From Thursday, manufacturers will have to make spares available to
consumers, with the aim of extending the lifespan of products by up to 10
years, it said.

 

Higher energy standards this year will also knock an average of £75 per year
off energy bills, the government said.

 

However, one company said that the new rules could make white goods more
expensive.

 

The right to repair rules are designed to tackle "built-in obsolescence"
where manufacturers deliberately build appliances to break down after a
certain period to encourage consumers to buy new ones.

 

Manufacturers will now be legally obliged to make spare parts available to
consumers so appliances can be fixed.

 

Changes to energy efficiency standards this year will also mean savings for
consumers and cut eight megatonnes of carbon emissions in 2021 by reducing
how power-hungry goods are, the government said.

 

Since March, there have also been changes to appliance energy efficiency
labelling.

 

'Right to repair' law to come in this summer

How can we make washing machines last?

Energy minister Anne Marie Trevelyan said: "The tougher standards will
ensure more of our electrical goods can be fixed rather than have to be
thrown away when they stop working, putting more money back in the pockets
of consumers."

 

Climate change minister Lord Callanan added: "We can all play our part in
ending our contribution to climate change, even when we're choosing a new
electrical appliance."

 

These new rules should bring an end to the frustration of having to throw
away an item because a small part is no longer working and no longer in
stock.

 

Often the seal around a fridge, the detergent drawer on a washing machine,
or the runners on a dishwasher break. Rather than having to buy a whole new
product, replacement parts must now be sold directly by the manufacturer for
10 years, whether or not they are still selling the complete item in their
range.

 

This isn't a law about who is responsible for the repair. If it's still
within warranty, then the manufacturer or the retailer should repair it, but
after that, you are at least now guaranteed access to a replacement part.
You'll probably have to buy it, and you may have to pay someone to fit it if
it's a complicated internal part, but at least you should be able to get
hold of it.

 

Having the right to repair is a step removed from having the confidence to
actually attempt one, though. It's a much bigger cultural shift to convince
people to fix it and not to fling it.

 

Environmental expert Libby Peake, head of resource policy at Green Alliance,
said that the new regulations "represent a small, first step towards giving
people the long-lasting repairable products they want".

 

However, she said it was not accurate to say the new rules create a "legal
right to repair".

 

"The government hasn't given consumers any such right, as the spare parts
and repairability criteria are only directed at professional repairers, not
at the people who own products," she said.

 

"There is also no guarantee that spare parts and repair services will be
affordable, so considerable barriers remain to making this the easiest,
default option," she added.

 

Green Alliance called on the government to "increase its ambition in this
area, so that it really is as easy as possible for people to repair and
upgrade the products they own".

 

'Race to the bottom'

One company said the legislation could make appliances more expensive. John
Elliot, executive chairman of Ebac, said his business had always focused on
the long-term reliability of a product.

 

"We don't look to make the cheapest washing machine. We look for one that's
going to do the job and last a long time," he said.

 

The firm has been manufacturing dehumidifiers, water coolers and washing
machines for five decades, at Newton Aycliffe, County Durham.

 

"Our focus is reliability - not just a low initial cost," Mr Elliot said.
"The secret of a product that's easy to repair and long-lasting is in the
design."

 

Overall, Mr Elliot said, the legislation will not make much difference to
his business. But it will to competitors, who have been in a race to the
bottom on prices for many white goods.

 

"I can't think of one example where we could not repair a product," he
added. "I checked, and the oldest machine we repaired was 25 years old."

 

Engineer fix

Rob Johnson, operations director at repair business Pacifica, said that his
firm was now hoping to recruit engineers because of the new rules.

 

The company already has 400 qualified engineers going into homes to fix
about 6,000 appliances per week.

 

He said the legislation "gives customers real choice" about whether to
repair or replace their product.

 

Google and YouTube had built confidence in tackling some basic repairs at
home. However, he said that business was still brisk for quick fixes to
items such as dishwasher filters, washing machine seals and broken fridge or
freezer doors.

 

There's also an upside for the environment, too, he said, adding: "The
legislation is designed to reduce impact of electrical waste.

 

"So we really want consumers to take that opportunity to think about whether
they should repair it rather than replace it. And that can mean trying to
repair it themselves or call someone out like ourselves."

 

Do-it-yourself repairs

People have different comfort levels when it comes to the thought of
tackling home repairs on appliances, according to YouGov research for BBC
News.

 

In general, people are least comfortable with trying to fix gas ovens,
microwaves, gas hobs and cookers themselves, and most comfortable having a
go at fixing lamps and other small lights.

 

Men said they felt more comfortable than women in trying to fix appliances
across the board.

 

Most of the appliances featured in the new legislation can be found in the
kitchen. However, data suggests few feel comfortable taking advantage of the
increased availability of spare parts.

 

Of the kitchen appliances covered under the new rules, Britons are most
comfortable repairing their washing machines (22%) including some
one-in-three men (32%) and half as many women (14%). But people are less
comfortable with dishwashers (16%).-BBC

 

 

 

Bank of England's Andy Haldane voices 4% inflation fear

The Bank of England's departing chief economist has warned that the risk of
high inflation is "rising fast" and could reach nearly 4% this year.

 

Andy Haldane was speaking less than a week after the Bank's Monetary Policy
Committee (MPC) dismissed the rise in inflation as "transitory".

 

Consumer price inflation hit a two-year high of 2.1% in the year to May,
exceeding the Bank's 2% target.

 

The MPC said it expected inflation to go above 3% "for a temporary period".

 

Mr Haldane, seen by many observers as an outlier on inflation, has often
been in a minority on the committee.

 

In a speech to the Institute of Government, Mr Haldane, who is leaving the
Bank after 32 years, said "everyone would lose" from greater inflation.

 

 

"Overall, inflation expectations and monetary policy credibility feel more
fragile at present than at any time since inflation-targeting was introduced
in 1992," he added.

 

"By the end of this year, I expect UK inflation to be nearer 4% than 3%."

 

Mr Haldane said that if he was right, the Bank might need to react with
bigger interest rate rises than currently foreseen.

 

He added: "Even if this scenario is a risk rather than a central view, it is
a risk that is rising fast and which is best managed ex-ante rather than
responded to ex-post.

 

"If this risk were to be realised, everyone would lose - central banks with
missed mandates needing to execute an economic handbrake turn, businesses
and households facing a higher cost of borrowing and living, and governments
facing rising debt-servicing costs."

 

Last week, the MPC voted 9-0 to keep interest rates steady at the historic
low of 0.1%.

 

Rates have been unchanged since March last year, when they were reduced to
help contain the economic shock of Covid-19.-BBC

 

 

 

Dealmakers drown in deals in second-quarter M&A frenzy

(Reuters) - Global mergers and acquisitions (M&A) activity broke records for
a second consecutive quarter this year as companies continued to borrow
cheaply and spend their cash reserves on transformative deals to reposition
themselves for the post-COVID world.

 

Deals worth $1.5 trillion were announced in the three months to June 30,
more than any second quarter on record and up 13% from the record first
quarter of the year despite activity among blank-check firms slowed down,
Refinitiv data shows.

 

"This is an environment we haven't seen before because we have very
supportive financing markets combined with the pressure to come out of
COVID-19 and reorganize entire businesses," said Alison Harding-Jones, head
of M&A for Europe, the Middle East and Africa at Citigroup (C.N).

 

"These high levels of activity will likely continue through the summer," she
added.

 

Second quarter volumes rose 440% in the United States with $699 billion
worth of M&A deals compared to the same quarter last year when the world's
biggest economy came to a halt because of the pandemic.

 

President Joe Biden's proposed tax hikes drove some companies to rush to
complete deals before proceeds get taxed at a higher rate.

 

"Many transactions are happening because people want to announce and close
before the end of the year. It makes sense on all sides from a tax
perspective," said Anu Aiyengar, co-head of global M&A at JPMorgan Chase &
Co (JPM.N).

 

Dealmaking in Asia Pacific jumped 104% to $327 billion while Europe was up
50% to $293 billion.

 

The biggest deals of the quarter were all done domestically, as companies
hedged their bets and refrained from hunting outside their home turf, wary
of rising protectionism and geopolitical tensions between China and the
United States.

 

"U.S. cross-border activity has decreased by just about every measure you
can think about," said Vito Sperduto, co-head of global M&A at RBC Capital
Markets.

 

The $40 billion merger of Southeast Asia's biggest ride-hailing and
food-delivery firm, Grab Holdings, with U.S. blank-check firm Altimeter
(AGC.O) was one of the few sizeable cross-border deals to top the quarterly
charts.

 

SIZE MATTERS

 

While the global deal count suffered a 10% contraction compared to the first
quarter, the M&A frenzy has translated into a spike in transactions value,
with deals greater than $5 billion up 127% in the second quarter.

 

In the United States, telecoms firm AT&T (T.N) merged its content unit
WarnerMedia with rival Discovery (DISCA.O) to create a media giant with an
enterprise value of about $150 billion, while in Europe two German real
estate giants - Vonovia (VNAn.DE) and Deutsche Wohnen (DWNG.DE) - tied the
knot in a $34.5 billion merger. ,

 

"Corporates have been reset by this crisis and their mantra is now
simplification and digitalisation as they strive to become more focused and
complement their business model with new technologies," said George Holst,
head of the corporate clients group at BNP Paribas (BNPP.PA).

 

The telecoms, media and technology (TMT) industry topped the M&A charts with
a combination of deals, spin-offs and corporate reorganisations involving
the likes of Dell Technologies Inc (DELL.N) and Dutch-listed technology
investor Prosus NV (PRX.AS).

 

Fearful of falling prey to activist investors, companies across all sectors
have taken steps to review their operations and tackle non-performing units.

 

"We expect a lot of sell-side activity in the second half of the year as
many corporates are thinking about carve-outs right now. They feel it is the
right time to refocus their businesses and divest non-core assets," said
Tariq Hussain, head of European M&A at Jefferies (JEF.N).

 

But for all its frenzy the second quarter saw a steep decline in SPAC
listings as investors grew wary of the asset class and regulators tightened
up scrutiny on blank-check companies.

 

"SPACs are a massive accelerator of deals, but the types of SPACs that will
succeed going forward are more institutional in nature. Investors are no
longer buying into these vehicles indiscriminately unless they have a solid
story and management team," said Dominic Lester, European head of investment
banking at Jefferies (JEF.N).

 

FAST AND FURIOUS

 

The decline in SPAC activity was largely offset by a flurry of private
equity-backed buyouts which rose 152% in the first six months of the year to
$512 billion, representing 18% of global M&A volumes.

 

"What we're seeing now is cheapness of capital. The cost of capital is
obviously playing a role in the activity that we are watching for both
strategic and sponsor acquirers," said Lyle Wilpon, head of global M&A at
BMO Capital Markets.

 

In Britain – Europe's biggest M&A market – the bout of private equity
assaults was fast and furious with several publicly traded companies such as
asset management services provider Sanne (SNNS.L) receiving multiple
proposals before agreeing to a takeover deal.

 

Dealmakers said a possible hike in interest rates in the second half of the
year could make financing conditions less favourable for investment funds
but the pressure to deploy capital would remain intact for the next few
quarters.

 

"Dry powder held by sophisticated private equity firms is at record highs
which provides for meaningful buyer interest in target companies," said
Steven Geller, co-head of global M&A at Credit Suisse (CSGN.S).

 

Yet, the current level of activity might not be sustainable for long.

 

"Can you really grow off of such a high number of deals? It's more than
likely that we are going to stabilise down a little bit because companies
have to digest what they've done so far," said Marc-Anthony Hourihan, global
co-head of M&A at UBS (UBSG.S).

 

The Thomson Reuters Trust Principles.

 

 

EXCLUSIVE Shell plans to exit California joint venture with Exxon Mobil
-sources

(Reuters) - Royal Dutch Shell Plc (RDSa.L) plans to leave Aera, its
California-based oil and gas-producing joint venture with Exxon Mobil Corp
(XOM.N), four people familiar with the talks told Reuters.

 

Shell has divested numerous carbon intensive assets this year, selling its
refinery in Washington state to Holly Frontier Corp (HFC.N) and its stake in
a Houston-area refining joint venture to Petroleos Mexicanos as it shifts
new investments to renewables and power. read more

 

The company is also considering a sale of its assets in the Permian Basin of
Texas, Reuters previously reported.

 

Aera produces about 125,000 barrels of oil and 32 million cubic feet of
natural gas each day, accounting for about 25% of the state's oil and gas
production.

 

Shell has notified Exxon of its plans to exit the venture, the people said,
speaking on the condition of anonymity as the talks are private. A Shell
spokesperson declined to comment, citing company policy.

 

The joint venture, headquartered in Bakersfield, California, produces
primarily in the San Joaquin Valley. Shell has previously sold all of its
California oil refining operations, some of which had pipeline connections
to the fields.

 

California still produces roughly 360,000 barrels of oil per day even as it
has introduced the most stringent state-level rules on greenhouse gas
emissions. Last year, an executive order required that by 2035 all new cars
and passenger trucks sold in California be zero-emission vehicles, and that
the state reduce the dirtiest forms of oil extraction.

 

Oil prices have soared this year, gaining more than 50% as demand has
rebounded as COVID-19 pandemic travel restrictions are lifted. The price
increase has prompted many oil producers to put assets up for sale. The rush
to sell is amplified by investor pressure to reduce fossil-fuel investments
to stem global climate change brought by carbon emissions.

 

Shell and other Europe-based oil producers such as BP Plc (BP.L) and
TotalEnergies have pledged to lower emissions through increased investment
in renewables while divesting some oil and gas holdings.

 

Shell, one of the world's largest oil companies, said this year it would aim
to cut the carbon intensity of its products by at least 45% by 2035, and by
100% by 2050 from 2016 levels. A Dutch court has ruled that Shell's efforts
are not enough, ordering it to lower emissions by 45% by 2030 from 2019
levels.

 

More deal-making could take place this year, with Chevron (CVX.N) looking to
shed about $1 billion of assets in the Permian Basin of Texas and New Mexico
read more . Exxon, Occidental Petroleum Corp (OXY.N) and others are looking
to shed unwanted assets and raise cash, according to industry experts.

 

The Thomson Reuters Trust Principles.

 

 

U.S. natgas companies put hydrogen to the test

(Reuters) - At least two dozen U.S. energy firms, including Dominion Energy
Inc (D.N) and Sempra Energy (SRE.N), have started producing hydrogen or
testing its viability in natural gas pipes to take advantage of existing
infrastructure as the world prioritizes lower-carbon fuels.

 

Nations worldwide are trying to reach net-zero carbon emissions by 2050, but
that will rely heavily on technology - like hydrogen - that is in
developmental stages. Utilities have a potential advantage if they find that
clean-burning hydrogen can be successfully transported in existing gas pipes
and power plants.

 

But governments need legislation and regulation to encourage energy
companies to spend billions in order to reduce production costs for green
hydrogen, analysts said, before it can displace fossil fuels. Almost all of
the world's hydrogen production is currently through fossil fuels, and large
utilities are currently mostly testing blends of natural gas and hydrogen in
their pipelines. read more

 

The companies experimenting with hydrogen are in early stages. Canada's
Enbridge Inc (ENB.TO) is blending up to 2% hydrogen into its natural gas
distribution systems in Ontario, and just received approval to blend
hydrogen in Quebec.

 

“We are looking to understand the potential either with the existing system
or, as we're continuing to modernize the gas pipeline system, to ensure that
new construction is hydrogen-ready," said Pete Sheffield, Enbridge’s chief
sustainability officer.

 

Sempra's Southern California Gas (SoCalGas) utility, which supplies gas to
22 million consumers, is working on pilot programs to test the fuel in its
pipelines and see how a blend with natural gas affects the company's pipes,
as well as appliances and other equipment.

 

The first project would blend hydrogen in a mostly residential area that
SoCalGas can isolate from the rest of its distribution system, said Jawaad
Malik, chief environmental officer.

 

Virginia-based Dominion is testing a 5% hydrogen blend in a training
facility in Utah and recently proposed a similar pilot in North Carolina,
said Dominion spokesperson Aaron Ruby.

 

Hydrogen is only considered clean if it is produced using low- or no-carbon
emitting energy sources like biomass, nuclear, renewables or fossil fuels
paired with carbon capture technology.

 

"These types of proposals have not yet shown a path to a deeply decarbonized
gas system," said Julie McNamara, senior energy analyst for the Union of
Concerned Scientists.

 

Almost every gas turbine used to produce power can burn fuels containing
about 5% to 10% hydrogen, said Jeff Goldmeer, General Electric's (GE.N)
emergent technologies director for decarbonization. That would cut carbon
dioxide emissions from natural gas from the power sector, which has been one
of the fastest growing sources of demand for gas.

 

Roughly 36% of energy-related carbon emissions come from fossil fuel-fired
electricity generation, according to the International Energy Agency (IEA).

 

A RISE IN PILOT PROGRAMS

 

To reach net-zero emissions by 2050, global hydrogen use needs to expand to
more than 200 million tonnes in 2030 from less than 90 million tonnes in
2020, according to the IEA.

 

Reaching that goal will be difficult. Hydrogen production and transport
costs more than natural gas, for now. Evercore ISI analysts said in a report
this week that green hydrogen could become cost-competitive with less clean
versions by 2030.

 

GE has more than 75 turbines worldwide that use or have used fuels
containing hydrogen, which have produced more than 450 terawatt-hours (TWh)
of power. U.S. utility-scale facilities generated about 4,009 TWh of
electricity in 2020, according to U.S. federal data.

 

Technology will have to advance further to burn hydrogen as a viable fuel
rather than just as a small percentage of a natural gas blend.

 

"Clean hydrogen will be constrained in supply for the foreseeable future,"
said McNamara of the Union of Concerned Scientists. "Blending it at a low
level into a gas pipeline that should be transitioned to electrification is
just not the right pathway to be taken today.

 

The Thomson Reuters Trust Principles.

 

 

China solar association says Xinjiang forced labour claims unfounded

(Reuters) - Claims that Chinese solar firms are benefiting from forced
labour in Xinjiang are unfounded and unfairly stigmatise firms with
operations there, the country's solar association said.

 

The United States last week banned imports from five Chinese solar companies
accused of using forced labour in Xinjiang including Hoshine Silicon
Industry Co (603260.SS) and a unit of GCL New Energy Holdings (0451.HK).
read more

 

The White House said forced labour was "an integral part of (China's)
systematic abuses against the Uyghur population and other ethnic and
religious minority groups" in Xinjiang.

 

The China Photovoltaic Industry Association said in a statement that it had
recently inspected solar industry production facilities in Xinjiang and the
U.S. assertions had no factual basis.

 

It also said the industry had created a large number of jobs, contributing
to the region's economic and social development and added that the rights of
employees from all ethnic groups were fully respected.

 

Xinjiang, home to China's predominantly Muslim Uyghur population, is
responsible for as much as 45% of the global production of polysilicon, a
key ingredient in the manufacturing of solar panels.

 

China denies all accusations of abuse and has repeatedly denied claims that
it runs a vast network of forced labour camps in Xinjiang, saying it has set
up "vocational training and education centres" to raise employment prospects
among Uyghurs and other ethnic groups.

 

The Thomson Reuters Trust Principles.

 

 

Asia M&A bonanza fuelled by Southeast Asia, private equity deals

(Reuters) - Asian merger and acquisition activity surged to its
second-highest level ever for a first half as Southeast Asian and
private-equity deals hit records, and bankers expect the strong momentum to
be maintained for the rest of the year.

 

Announced deals involving Asian companies came to $707.7 billion in
January-June, up 75% from the same period a year earlier and not far off the
record of $758.6 billion logged in the first half of 2018, Refinitiv data
showed.

 

Southeast Asia deals jumped 83% to a record $124.8 billion driven by
blockbuster transactions including ride-hailing giant Grab's $40 billion
merger with U.S. special-purpose acquisition company (SPAC) Altimeter Growth
Corp (AGC.O). read more

 

Bankers expect Southeast Asia to remain a big focus for dealmaking.

 

"You still haven't seen capex demand come through because the Southeast
Asian region is still kind of nascent in the recovery but you will start to
see this re-emerging alongside refinancing and consolidation and M&A
demand," said Amit Khattar, head of investment bank, Asia Pacific, at
Deutsche Bank.

 

He expects M&A in digital infrastructure such as data centres,
telecommunication towers and the consumer sector, as well as real estate
transactions, particularly in Singapore, as companies reassess office
markets.

 

Other chunky deals in Southeast Asia included the $18 billion merger of
Grab's Indonesian rival Gojek with local e-commerce firm Tokopedia, and a
$15 billion merger of the units of Malaysian telecoms firm Axiata Group
(AXIA.KL) and Norway's Telenor (TEL.OL). read more

 

"We're only half way through the year, but if market conditions remain
constructive and based on our backlog, we look well placed to break all
records," said David Biller, head of Citigroup's Southeast Asia banking,
capital markets and advisory business.

 

"The themes continue to be tech, consumer and healthcare. The spread of
capital market and M&A deals is very much across all countries."

 

Private equity-backed deals more than doubled to a record $102 billion.

 

Asia-focused PE funds raised $80.5 billion as of June 25, up 59% from a year
ago and the most in two years, according to data provider Preqin. Dry powder
in the region hit a new high of $384.9 billion in June.

 

PE deals were also fuelled by banks' improved lending appetite as many
businesses across the region rebounded from last year's pandemic-induced
slump.

 

Acquisition-related financing in the region climbed 16% to $57 billion as of
June 25, Dealogic data showed.

 

PE firms swarmed into auctions of assets such as Hong Kong-based mattress
maker King Koil and the China unit of drugmaker Mundipharma, which is owned
by the billionaire American Sackler family.

 

The sale of Reckitt Benckiser Group's (RKT.L) China baby formula business
was another example, with Primavera Capital Group emerging victorious over a
bevy of rivals that included Sequoia Capital, KKR and Carlyle Group. read
more

 

"A key focus remains on sponsor buysides and exits and in particular on
businesses that have been resilient throughout the COVID-19 pandemic," said
Rohit Satsangi, Deutsche's co-head of Asia M&A and head of Asia financial
sponsors.

 

SPAC-related transactions slowed as regulators tightened oversight, but
bankers are hopeful that many discussions about so-called de-spac deals,
when SPACs merge with target firms, will lead to transactions over the
coming months.

 

"A significant factor driving de-SPAC and M&A activity is investor optimism
over the emergence of disruptive and fast-growing companies in the new
mobility, renewable energy and technology sectors," said Rich Wong, Morgan
Stanley's head of M&A, Asia Pacific.

 

Morgan Stanley took the top spot in the region's M&A league table for
announced deals, followed by JPMorgan and Goldman Sachs.

 

The Thomson Reuters Trust Principles.

 

 

 

Rwanda: Zipline Raises $250 Million for Operations Expansion

Zipline, arguably the world's largest drone delivery service for medical
supplies which was founded in Rwanda has raised $250 million in new equity
financing, bringing the company's valuation to $2.75 billion.

 

The new financing will enable Zipline to continue advancing its integrated
service, including its autonomy platform, aircraft, fulfilment systems, and
operations.

 

The funding will also fuel continued expansion into new industries and
geographies, transforming systems like healthcare and commerce with instant
logistics.

 

New investors in the firm include; Fidelity, Intercorp, Emerging Capital
Partners and Reinvent Capital.

 

A staff packages a blood supply for delivery to Rwinkwavu Hospital from
Zipline's distribution centre in Kayonza District. Photo: Sam Ngendahimana.

 

Existing investors involved in the recent financing round include Baillie
Gifford, Temasek and Katalyst Ventures.

Keller Rinaudo, the Founder and Chief Executive of Zipline said that they
are keen on building on the growth registered in the past year, using the
technology to bring instant logistics to more partners, communities and
people.

 

"Around the world, our partners are reimagining how patients access to care
with fast, reliable, on-demand delivery. Together, we have completed
hundreds of thousands of deliveries of blood, medicines and vaccines, and
today Zipline makes a commercial delivery every four minutes," he said.

 

Among the adjustments made by the firm in the last year include; expanding
service hours in Rwanda to offer 24/7 autonomous delivery service; entering
the Japanese Market through a partnership with Toyota Group, as well as a
partnership with Pfizer to design and test an delivery for COVID-19
vaccines.

 

Zipline commenced operations in 2016, following a partnership with the
Rwandan Government to commence what was then the first national-scale
commercial drone delivery.

 

In recent years, the model has been adopted in multiple countries on the
continent and beyond including Ghana, Nigeria, United States and Japan among
others.

 

This is in line with the country's ambitions of serving of delivering
innovation and technology products and services.-New Times.

 

 

 

Malawi: CRA Calls for Structured Markets for Cannabis Growers

The Cannabis Regulatory Authority (CRA) has called for the creation of
structured markets for cannabis growers in the country.

 

CRA board chairperson Boniface Kadzamira made the call in Lilongwe on Monday
during Cannabis Licence-holder's Engagement meeting for the Central Region
growers.

 

He said growing of medicinal and industrial hemp would be most effective if
there are structured markets in place so that growers are able to sell their
products.

 

Kadzamira pointed out that once growers have access to structured markets
that lead to steady markets of their products, the industry stands a chance
to grow.

 

"We need to find our own markets within or outside the country. We need to
work with the government to develop such markets instead of depending on the
promises by investors willing to buy our products. If we will not have
structured markets, it will be no work done," he added.

The CRA board chairperson said universities and research institutes should
start working on the local variety to see how effective it could be in the
country since it would be in the same family of medicinal hemp.

 

Kadzamira said local varieties have proven to be marketable and fetch more
money in European and overseas markets.

 

He said the country would have cannabis products in the next six months
since the growers are going to plant in the coming rainy season.

 

"We are growing foreign varieties of cannabis but we need to move and
develop our own varieties which should be accessible to all growers. We have
huge potential with our own varieties which are marketable," Kadzamira said.

 

Acting Director General for CRA, Ketulo Salipira, said before awarding a
licence to a cooperative, the latter needs to develop a clear business plan
on how they would conduct their business.

 

He added that the cooperative leadership needs to be cleared by Police to
ensure that they have no criminal record regarding dangerous drugs before.

 

A member of Monkey Bay Cooperative, Beatrice Mwale, said cannabis growing
has provided an opportunity for small holders to work in groups.

 

She said the crop looks promising to the growers and that investors are keen
to buy the products for sale on the local and international markets.

 

"We stand a very good chance of improving our economic status as farmers if
we can handle it well to our advantage by using the available openings and
opportunities at stake," Mwale added.-Nyasa Times.

 

 

 

Nigeria: Traders, Experts Worry As Naira Free Fall Continues

The Naira has failed to appreciate as the United States dollar sells for
N500+ with traders and experts calling on the federal government to take
urgent actions in saving the economy from total collapse.

 

As the prices of crude oil keep rising in the international market, there
were expectations that the naira will appreciate, but Nigeria's foreign
exchange (forex) reserve continued to trend downwards.

 

Prices of basic necessities including drugs, food, automobiles, spare parts
and raw materials for industries have continued to rise with attendant
negative effects on the purchasing power of the citizens.

 

The Brent crude is currently trading at $75.62 per barrel, a feat experts
said should bring succour to Nigeria's economy.

 

They believe that the naira would continue to suffer until Nigeria becomes
self-reliant and net exporter and radically resuscitates the oil sector for
the refineries to work efficiently.

 

According to them, the increase in oil prices had not directly translated to
improve income for the ordinary people even as importers have to cough out a
lot of naira to get the dollar and other foreign currencies in order to
import goods.

Daily Trust reports that the weakening of the naira became worse from May
2021, when the Central Bank of Nigeria (CBN) adopted the Nigerian Autonomous
Foreign Exchange Rate (NAFEX) of N410.25 to a dollar while removing the
N379/$ rate it had on its website for months.

 

As of Wednesday, June 30, the CBN rate only recorded a slight improvement of
the naira to other currencies in exchange power. The buying rate for the
dollar was N409.16; the central rate was N409.66 while the currency sold for
N410.16. This was an improvement from N409.17 to a dollar as of Friday, June
25, 2021, when the dollar also sold for N410.17.

 

The Pound Sterling improved slightly too, as the naira strengthened from
N568.74 buying rate and N570.13 on Friday to N567.46 and N568.15 on
Wednesday, June 30 respectively.

The Euro recorded N488.83 and N490.03 CBN buying and selling rate on Friday
to strengthen at N486.65 and N487.84 buying and selling rates yesterday.

 

On the parallel market, the naira exchanged between N498 and N501 to a
dollar according to several Bureau De Change (BDC) operators in Abuja.

 

According to Aboki.com, a local BDC operating agency, as of Friday, the
dollar traded for N485/N495 (buying/selling), the pound had N700/718 while
the Euro was N588/605.

 

By Wednesday, the dollar had increased to N490 to buy; and sold for N500 at
the black market, representing N10 increase in about four days. The Pound
Sterling was bought for N704 and sold for N718, indicating a N4 increase
while the Euro was bought for N590 and sold for N605, indicating a N2
increase.

The World Bank in its Nigeria Development Update (NDU), titled "Resilience
through Reforms" released on June 15, 2021, had faulted CBN on its
management of the foreign exchange (forex) regime saying it was the reason
for the current crisis.

 

Daily Trust reports that the US dollar exchanged for around N509 at the
parallel market that same day.

 

"The way the exchange rate was managed limited access to FX and thus
adversely affected investor confidence and investment appetite," it stated.

 

'We're distressed'

 

The Group Managing Director of a technology firm, VDT Communications, Engr.
Biodun Omoniyi, said the difficulty in gaining access to foreign exchange
(forex) and multiple taxes, among others, affect the operations of Internet
Service Providers (ISPs).

 

He said it was becoming increasingly difficult for operators to buy or
replace damaged equipment, especially as operators import communication
equipment and need forex.

 

"Before COVID-19, the value of naira was N360 to $1, but today it has jumped
to over N500 to $1, which is now eating deep into our revenue," he said.

 

According to the Director General of the Lagos Chamber of Commerce and
Industry (LCCI), Dr Muda Yusuf, there were two dimensions to the forex
crisis.

 

He said that there was a sharp depreciation in the exchange rate and then
the acute illiquidity in the forex market. These two variants of the crises,
according to him, had taken a huge toll on businesses and the economy
including the foreign exchange induced spike in prices.

 

While he noted that the major driver of core inflation is forex factor, he
said production and operating costs had risen sharply while profit margins,
capacity utilisation, sales, purchasing power and business sustainability
had been correspondingly impacted.

 

Some businessmen who import products said the instability of the naira was
putting pressure on their businesses because of the fluctuating nature of
the naira.

 

Arnee Mary, who buys fragrance from the United Arab Emirates, said she began
to witness huge increments in the prices of the product she purchased in
February.

 

Mary stated that the fall in the exchange rate of naira to the dollar was
affecting both the payment for the goods and the amount to be paid for
shipment.

 

"We buy 250 millilitres, 500 millilitres or one kilogramme (1kg) as a
fragrance at the same price.

 

"Just recently, a 250 millilitre of fragrance cost N11, 500 but we now pay
13,000. This does not include the money to bring it down to Nigeria and we
will still pay custom duty and cost of flight to bring it down to Abuja and
the other charges to pick it up at the airport," she said.

 

She said the payment for shipment of goods weighing a minimum of 26 kg that
cost 33,000 last week changed to 39,000 for 24kg, stating that some oil
products she uses have also witnessed an uptick in price.

 

On how she intends to stay afloat, Mary said all products will undergo price
changes to meet up with the reality but expressed worry that it will affect
the purchasing power of her customers.

 

Also, Sabiu Khalid, who sells foreign fabrics, said the price of a bale of
had increased by N20, 000. "The ones I buy for N330, 000 are now N350, 000
while the one of N350, 000 is now N380, 000."

 

Naira drowns in spite of CBN interventions

 

In spite of the several interventions by the apex bank, the naira has
continued to drown. According to the World Bank, the disparity between the
official I&E Foreign Exchange Window (IEFX) and the parallel market has
widened to as high as N90 in recent weeks due to a combination of
speculation, demand and fear of future devaluation of the currency.

 

"Significant spreads between the official, the IEFX and the parallel
exchange rate persisted throughout 2020 and as of April 2021, the spread
between the official and the IEFX rate was estimated at 8% and between the
IEFX and the parallel rate reached 18% (the spread between the official and
the parallel rate was 27%)."

 

The CBN recently made its biggest move yet in unifying the exchange rate
after it dumped its long-held official rate for the IEFX rate published by
the FMDQOTC.

 

The apex bank also extended the Cash4Dollar scheme introduced back in March
2021 to drive more diaspora inflows into the banking system.

 

In May 2021, the CBN formally took concrete steps towards rate unification
between the official and IEFX rates.

 

But the global lender said there remained a 20 per cent premium between this
unified rate and the parallel market rate.

 

"While this may indeed encourage the use of the formal channels, it is not
clear that incentive payments will increase remittances to the country," the
World Bank remarked on the CBN's Cash4Dollar scheme.

 

'What CBN can do to ease situation'

 

When contacted on what the apex is doing to arrest the situation, the acting
Director, Corporate Communications at CBN, Osita Nwanisobi, promised to
respond to the enquiry as he was away from the office but did not as of the
time of filing this report.

 

However, CBN Governor, Godwin Emefiele, on Monday, told investors in the UK
that he expected the true value of the naira to be between N430-440 to the
dollar and not the black-market rate which closed at about N500/$1.

 

The World Bank recommended that CBN should allow the IEFX market function as
it should by allowing a more market-friendly approach for exchange rate
transactions. Rather than allow an unreliable way of reporting exchange rate
prices.

 

The World Bank believed a return to a flexible exchange rate regime
(post-2015 and pre-2020) will allow for limited interventions by the CBN.

 

"Until oil companies are allowed to sell FX receipts to IEFX bank
participants, CBN would still have an important role to play as a supplier
of FX. In this scenario, participating banks in the FX market will start to
play an expanded role that goes beyond just executing buy/sell orders of its
clients to start acting as market makers, meaning that they start to quote
two-way prices buying and selling on its own behalf and carrying a stock of
FX.

 

"With increased flexibility, the CBN could start intervening only to smooth
large fluctuations and work toward ensuring a single, market-driven rate,"
it recommended.

 

Managing Director, Qeeva Advisory Limited, Matthew Ogagavworia, said: "A
unified exchange rate will help curtail the unbridled demand for the naira
as those who speculate on the currency will no longer find room for the
arbitrage.

 

"A lot of people are moving positions from the naira to the dollar because
they want to preserve the value of the capital especially in the face of the
uncertainty that hovers around the Naira."

 

He said the free fall of the naira was caused by many factors that were
beyond the CBN, adding that the country must find a way to reduce the
dependency on oil to fund its expenditure.-Daily Trust.

 

 

 

Liberia: U.S. Recommends Steps to Improve Liberia's Fiscal Transparency

The U.S. State Department's 2021 fiscal transparency report on Liberia has
recommended several steps to the government here, to improving financial
transparency in the public sector, including a need to make budget documents
publicly available within a reasonable period of
time.https://www.state.gov/reports/2021-fiscal-transparency-report/

 

Liberia flunk the U.S. State Department 2021 Fiscal Transparency report,
released recently in Washington, D.C.

 

The report further recommends, among others, that the Government of Liberia
makes state-owned enterprise debt publicly available, ensures the budget is
substantially complete and off-budget accounts are subject to adequate audit
and oversight.

It suggests producing and publishing a supplemental budget when actual
revenues and expenditures do not correspond to those in the enacted budget
and ensures the supreme audit institution meets international standards of
independence.

 

The U.S. suggests making supreme audit institution audit reports publicly
available within a reasonable period of time, and that ensuring the criteria
and procedures used to award natural resource extraction contracts and
licenses are consistent with the requirements set by law or regulation, and
making basic information on natural resource extraction awards publicly
available.

 

The report notes that during the review period, the Government of Liberia
did not make its budget documents, including the executive budget proposal,
enacted budget, and end-of-year report, publicly available in a reasonable
period of time.

 

It says information on debt obligations, with the exception of state-owned
enterprise debt, was widely and easily accessible to the general public,
including online, but foreign assistance receipts, largely project-based,
were neither adequately captured in the budget nor subject to the same audit
and domestic oversight as other budget items.

 

"Significant deviations between projected and actual revenues during the
review period undercut the reliability of budget information. The supreme
audit institution did not meet international standards of independence and
did not make its audit reports publicly available within a reasonable period
of time."

 

The State Department says the criteria and procedures for awarding natural
resource extraction licenses and contracts were outlined in law, although
there have been reports of corruption and inconsistent application of
regulations in practice, saying, basic information on some, but not all,
natural resource extraction awards were publicly available.

The report found that 74 of the 141 governments reviewed during the period
met minimum requirements of fiscal transparency, while seventeen of the 67
governments that did not meet minimum requirements made significant
progress.

 

"Fiscal transparency is a critical element of effective public financial
management, helps build private market confidence, and underpins economic
sustainability", it says, stressing that It fosters greater government
accountability by providing a window into government budgets for citizens,
helping citizens hold their leadership accountable, and facilitating
better-informed public debate.

 

Congressionally mandated annual fiscal transparency reviews provide
opportunities to engage in dialogue with governments on the importance of
fiscal transparency, particularly important given the need for significant
economic, health, and social spending to offset the shocks of COVID-19.

 

It describes the minimum requirements of fiscal transparency, reviews 141
governments, most of which were identified as recipients of U.S. assistance
in the 2014 Fiscal Transparency Report, and further assesses governments
that did not meet the minimum fiscal transparency requirements during the
review period of January 1 - December 31, 2020.

 

The report also indicates whether governments that did not meet those
requirements made significant progress to publicly disclose national budget
documentation, contracts, and licenses during the review period and that the
Department of State evaluated the public availability, substantial
completeness, and reliability of budget documents, as well as the
transparency of processes for awarding government contracts and licenses.

 

It says beginning with this review period, if a government has a sovereign
wealth fund, it must disclose its source of funding and general approach to
withdrawals from the fund.

 

"Fiscal transparency informs citizens how government revenues and tax
revenues are spent and is a critical element of effective public financial
management. Transparency provides citizens a window into government budgets
and helps hold governments accountable. It helps build market confidence and
sustainability. The Congressionally mandated Fiscal Transparency Report
(FTR) is a tool to identify deficiencies and support needed changes", the
report emphasizes. Report-New Dawn.

 

 

Nigeria: Govt to Pay Pension Arrears of Retired Civil Servants

President Muhammadu Buhari has approved the payment of some critical aspects
of the outstanding pension liabilities of the federal government under the
Contributory Pension Scheme (CPS) since July 2014.

 

A statement by the National Pension Commission (PenCom) yesterday, said
Buhari approved the payment of outstanding accrued pension rights for
verified and enrolled retirees of treasury-funded Ministries, Departments
and Agencies (MDAs) that retired but are yet to be paid their benefits.

 

It also consists of the backlog of death benefits claims due to
beneficiaries of deceased employees of treasury funded MDAs.

On April 14, 2021, the Director General of PenCom, Aisha Dahir-Umar, told
the members of the visiting Senate Committee on Establishment & Public
Services that a large number of federal government employees who retired
from March 2020 to March 2021 under the CPS were yet to receive their
pensions due to non-payment of their Accrued Pension Rights.

 

She traced the issue to 2014 due to "the appropriation of insufficient
amounts for payment of Accrued Pension Rights of Federal Government of
Nigeria (FGN) retirees and further aggravated by late or non-release of full
appropriated amounts."

 

As at 2019, PenCom estimated it would require over N62 billion to clear
backlog of Accrued Pension Rights and in line with the Commission's request,
President Buhari had then directed the Minister of Finance, Budget and
National Planning, Zainab Ahmed, to release N62.83bn to clear the
liabilities in 2020, 2021 and 2022.

 

The president also granted approval to clear the backlog of the Accrued
Pension Rights, the president also authorised the payment of 2.5 percent
differential in the rate of employer pension contribution for federal
government retirees and employees, which resulted from the increase in the
minimum pension contribution for employers from 7.5% to 10% based on the
Pension Reform Act (PRA) 2014.

 

PenCom said remittance into the various Retirement Savings Accounts (RSAs)
of the affected retirees and employees is currently being processed.-Daily
Trust.

 


 


 


Invest Wisely!

Bulls n Bears 

 

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Skype:         Bulls.Bears 



 

 

 


 

INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


Edgars

AGM

virtual

June 30, 8:45am

 


GetBucks

2019  AGM

Conference Room 1, Monomotapa Hotel, 54 Parklane

July 1, 8:30am

 


GetBucks

2020 AGM

Conference Room 1, Monomotapa Hotel, 54 Parklane

July 1, 10:30am

 


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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