Major International Business Headlines Brief::: 12 July 2021

[Bulls n Bears]

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Major International Business Headlines Brief::: 12 July 2021

 


 

 


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ü  Taiwan tech giants Foxconn and TSMC to buy 10m Covid jabs

ü  Virgin Galactic: Sir Richard Branson rockets to the edge of space

ü  Google boss Sundar Pichai warns of threats to internet freedom

ü  Asia shares bounce as mood shifts, sentiment fickle

ü  Credit Suisse's Swiss compliance boss Scarlato quits after 4 1/2 months

ü  Singapore's Temasek set to post record portfolio in global equities rally

ü  EXCLUSIVE China to order Tencent Music to give up music label exclusivity
-sources

ü  China condemns 'unreasonable suppression' as U.S. expands economic
blacklist

ü  BlackRock CEO calls for stronger climate finance plan at G20 meet

ü  Big insurance companies launch net-zero climate alliance

ü  Vietnam's VinFast starts operations in North America and Europe

ü  Multinationals tax shift unlikely until 2022, says Yellen

ü  Nigeria Spent 97% of Revenue On Debt Servicing in 2020 - Report

ü  Nigeria: Hike in Price of Diesel Worsens Nigeria's Economic Woes

ü  South Africa: Big Step Towards Vaccine Security for South Africa While
Country Remains On Level 4 Lockdown

ü  Kenya: Winners and Losers in Yatani's New Tax Measures

ü  Kenya: Rising Cooking Gas Prices a Threat to Forest Cover,
Environmentalists Warn

 

 

 

 

 

 

 

 


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Taiwan tech giants Foxconn and TSMC to buy 10m Covid jabs

Two of the world's biggest technology manufacturers are buying 10 million
doses of a Covid vaccine for Taiwan.

 

Taiwanese firms Foxconn, which makes devices for Apple, and chip giant TSMC
brokered the agreements for the BioNTech vaccine, worth $350m (£252m).

 

Taiwan has been trying for months to buy the vaccine from Germany's BioNTech
and blames China for blocking a deal.

 

China, which claims the self-ruled island as its own territory, denies the
accusations.

 

The agreements will see Foxconn and Taiwan Semiconductor Manufacturing Co
(TSMC) buy five million doses of the vaccine each and donate them to the
government for distribution.

 

The deal was announced in a statement by BioNTech's Chinese sales agent
Shanghai Fosun Pharmaceutical Group.

 

Fosun Pharma's chairman and chief executive Wu Yifang said they would "work
closely with our partners to provide safe and effective vaccines to Taiwan
at an early date".

 

Foxconn's billionaire founder and chairman Terry Gou wrote on his Facebook
page that Beijing did not interfere with the talks.

 

BioNTech developed the mRNA vaccine, which is marketed as Comirnaty, in
collaboration with the US pharmaceuticals giant Pfizer.

 

Taiwan's government has faced intense pressure from the public to speed up
its coronavirus vaccination programme.

 

Last month the government agreed to allow Mr Gou and TSMC to negotiate deals
for the vaccines on its behalf.

 

A major Taiwanese Buddhist group, the Tzu Chi Foundation, is also trying to
buy vaccines for Taiwan.

 

Separately, the US and Japan have donated a total of almost five million
Covid vaccine doses to Taiwan to help the island accelerate its vaccination
programme.

 

Meanwhile, Taiwan has millions of vaccines on order, mainly from AstraZeneca
and Moderna.

 

Just 0.3% of Taiwan's population is fully vaccinated.

 

Last week, Taiwan's President Tsai Ing-wen said the government aims to have
25% of its population vaccinated with at least one dose of a two-shot jab by
the end of July.-BBC

 

 

 

Virgin Galactic: Sir Richard Branson rockets to the edge of space

Billionaire Sir Richard Branson has successfully reached the edge of space
on board his Virgin Galactic rocket plane.

 

The UK entrepreneur flew high above New Mexico in the US in the vehicle that
his company has been developing for 17 years.

 

The trip was, he said, the "experience of a lifetime".

 

He returned safely to Earth just over an hour after leaving the ground.

 

"I have dreamt of this moment since I was a kid, but honestly nothing can
prepare you for the view of Earth from space," he said in a press conference
following the flight. "The whole thing was just magical."

 

The trip also makes him the first of the new space tourism pioneers to try
out their own vehicles, beating Amazon's Jeff Bezos and SpaceX's Elon Musk.

 

The height reached by Sir Richard in the rocket plane, known as Unity, was
85km (282,000ft; 53 miles).

 

The businessman was accompanied on the mission by the vehicle's two pilots,
Dave Mackay and Michael Masucci, and three Galactic employees - Beth Moses,
Colin Bennett and Sirisha Bandla.

 

The latter trio and Sir Richard were presented with commercial astronaut
wings after the flight by former space station commander and Canadian
astronaut, Chris Hadfield.

 

I was once a child with a dream looking up to the stars. Now I'm an adult in
a spaceship looking down to our beautiful Earth. To the next generation of
dreamers: if we can do this, just imagine what you can do
https://t.co/Wyzj0nOBgX #Unity22 @virgingalactic pic.twitter.com/03EJmKiH8V

 

Sir Richard billed the flight as a test of the space tourism experience he
expects to begin selling to customers from next year.

 

"I've had my notebook with me and I've written down 30 or 40 little things
that will make the experience for the next person who goes to space with us
that much better," he said. "The only way sometimes you can find these
little things is to get in a spaceship and go to space and experience it for
yourself."

 

"Today space is Virgin territory": The moment Sir Richard Branson's rocket
plane reached its highest altitude

Some 600 individuals have already paid deposits for tickets that will cost
them up to $250,000 (£180,000).

 

These are all people who want to reach a height where they can see the sky
turn black and marvel at the Earth's horizon as it curves away into the
distance. Such a flight should also afford them about five minutes of
weightlessness during which they will be allowed to float around inside
Unity's cabin.

 

It's been a long road for Sir Richard to get to this point. He first
announced his intention to make a space plane in 2004, with the belief he
could start a commercial service by 2007.

 

But technical difficulties, including a fatal crash during a development
flight in 2014, have made the space project one of the most challenging
ventures of his career.

 

Space tourism is a sector being rekindled after a decade's hiatus, and it's
about to get very competitive.

 

Throughout the 2000s, seven wealthy individuals paid to visit the
International Space Station (ISS). But this adventurism, organised under the
patronage of the Russian space agency, ceased in 2009.

 

Now, new initiatives abound. As well as Sir Richard's approach, there are
projects coming from Amazon.com founder Jeff Bezos and the California tech
entrepreneur Elon Musk.

 

The Russians, too, are reprising their commercial flights to the ISS, and
there are even those who want to launch private space stations for people to
visit. Among these is Axiom, a company started by a former Nasa ISS
programme manager.

 

Elon Musk travelled to New Mexico to support his friend, and following the
flight Mr Bezos sent his congratulations.

 

There's clearly something of an edge in the Branson-Bezos relationship,
however.

 

On Friday, the retail billionaire's Blue Origin space company had issued a
tweet that took a pop at Virgin Galactic's Unity vehicle. The posting
repeated a claim that anyone who flew on the rocket plane would forever have
an asterisk by their name because they wouldn't reach the "internationally
recognised" altitude for where space begins - the so-called Kármán line of
100km.

 

The US government has always recognised the boundary of space to be at about
80km (50 miles) and it awards astronaut wings to anyone who exceeds this
altitude. Before Sunday, only 580 people had ever been above this height.

 

Flight profile

Unity is a sub-orbital vehicle. This means it can't achieve the velocity and
altitude necessary to keep it up in space to circle the globe.

 

The vehicle is designed to give its passengers stunning views at the top of
its climb and allow them a few minutes to experience weightlessness.

 

Unity is first carried by a much bigger aeroplane to an altitude of about
15km (50,000ft), where it is released.

 

A rocket motor in the back of Unity then ignites to blast the ship skyward.

 

The maximum height achievable by Unity is roughly 90km (55 miles, or
295,000ft). Passengers are allowed to unbuckle to float to a window.

 

Unity folds its tailbooms on descent to stabilise its fall before then
gliding home.-BBC

 

 

Google boss Sundar Pichai warns of threats to internet freedom

The free and open internet is under attack in countries around the world,
Google boss Sundar Pichai has warned.

 

He says many countries are restricting the flow of information, and the
model is often taken for granted.

 

In an in-depth interview with the BBC, Pichai also addresses controversies
around tax, privacy and data.

 

And he argues artificial intelligence is more profound than fire,
electricity or the internet.

 

Pichai is chief executive of one of the most complex, consequential and rich
institutions in history.

 

The next revolutions

I spoke to him at Google's HQ in Silicon Valley, for the first of a series
of interviews I am doing for the BBC with global figures.

 

As boss of both Google and its parent company Alphabet, he is the ultimate
leader of companies or products as varied as Waze, FitBit and DeepMind, the
artificial intelligence pioneers. At Google alone he oversees Gmail, Google
Chrome, Google Maps, Google Earth, Google Docs, Google Photos, the Android
operating system and many other products.

 

But by far the most familiar is Google Search. It's even become its own
verb: to Google.

 

Over the past 23 years, Google has probably shaped the mostly free and open
internet we have today more than any other company.

 

According to Pichai, over the next quarter of a century, two other
developments will further revolutionise our world: artificial intelligence
and quantum computing. Amid the rustling leaves and sunshine of the vast,
empty campus that is Google's HQ in Silicon Valley, Pichai stressed how
consequential AI was going to be.

 

"I view it as the most profound technology that humanity will ever develop
and work on," he said. "You know, if you think about fire or electricity or
the internet, it's like that. But I think even more profound."

 

Artificial intelligence is, at base, the attempt to replicate human
intelligence in machines. Various AI systems are already better at solving
particular kinds of problems than humans. For an eloquent exposition of the
potential harms from AI, try this essay by Henry Kissinger.

 

Quantum Computing is a totally different phenomenon. Ordinary computing is
based on states of matter that are binary: 0 or 1. Nothing in-between. These
positions are called bits.

 

But at the quantum, or sub-atomic level, matter behaves differently: it can
be 0 or 1 at the same time - or on a spectrum between the two. Quantum
computers are built on qubits, which factor in the probability of matter
being in one of various different states. This is mind-boggling stuff, but
it could change the world. Wired has an excellent explainer.

 

Pichai and other leading technologists find the possibilities here
exhilarating. "[Quantum] is not going to work for everything. There are
things for which the way we do computing today would always be better. But
there are some things for which quantum computing will open up an entire new
range of solutions."

 

Pichai rose through the ranks of Google by being the most effective, popular
and respected product manager in the company's history.

 

Neither Chrome, the browser, nor Android, the mobile operating system, were
his idea (Android was for a while led by Andy Rubin). But Pichai was the
product manager who led them, under the watchful eyes of Google's founders,
to global domination.

 

In a sense, Pichai is now product managing the infinitely greater challenges
of AI and quantum computing. He is doing so as Google faces a daily barrage
of scrutiny and criticism on several fronts - to name but three: tax,
privacy, and alleged monopoly status.

 

Taxing tech

Google gets defensive on matters relating to tax.

 

For several years, the company has paid huge sums to accountants and lawyers
in order to legally reduce their tax obligations.

 

For instance, in 2017, Google moved more than $20bn to Bermuda through a
Dutch shell company, as part of a strategy called "Double Irish, Dutch
Sandwich".

 

I put this to Pichai, who said that Google no longer uses this scheme, is
one of the world's biggest taxpayers, and complies with tax laws in every
country in which it operates.

 

I responded that his answer revealed exactly the problem: this isn't just a
legal issue, it's a moral one. Poor people generally don't employ
accountants in order to minimise their tax bills; large-scale tax avoidance
is something that the richest people in the world do, and - I suggested to
him - may weaken the collective sacrifice.

 

When I invited Pichai to commit there and then to Google pulling out of all
tax havens immediately, he didn't take up the offer.

 

He did, however, make clear that he is "encouraged by the conversations
around a corporate global minimum tax".

 

It is clear that Google is engaging with policy-makers on finding ways to
make tax simpler and more effective. It is true that the company generates
most of its research and revenues in the US, which is where it pays most of
its tax.

 

Moreover, it has paid effective tax of 20% over the past decade, which is
more than many companies. Nevertheless, any use of any tax haven is a
reputational exposure for companies when, across the world, trillions are
being borrowed, spent, and raised through taxes on ordinary folk in order to
mitigate the pandemic.

 

The other big issues where Google is facing constant and growing scrutiny
surround data, privacy, and whether or not the company has an effective
monopoly in Search, where it is totally dominant.

 

On the last of these, Pichai makes the case that Google is a free product,
and users can easily go elsewhere.

 

This is the same argument that Facebook has used, and Mark Zuckerberg's
company received a strong endorsement from Judge James Boasberg of
Washington DC last month, when he rejected a raft of anti-trust cases
against the social media giant on the grounds that it didn't meet the
current definition of a monopoly (that is, "the power to profitably raise
prices or exclude competition").

 

The exchanges on privacy, data, tax and dominance in Search were perhaps the
most testy of the time I had with Pichai, and can be heard in the podcast
version.

 

Industry respect

In preparation for the interview, I spoke to more than a dozen current or
former Google executives, other senior executives at big tech firms,
regulators and tech-sector strategists. There was reliably strong opinion
and consensus within each camp.

 

Those who work in the tech sector said you just cannot argue with the growth
in Google's share price under Pichai. It has nearly tripled. That's a
phenomenal performance. Arguing that it is explained by favourable
prevailing winds in consumer behaviour - of the kind that have helped other
tech giants to grow - similarly misses the point.

 

Google created that consumer behaviour with astonishing engineering and
world-class products.

 

Mostly off the record, the regulators said new laws, and language, needed to
be designed to exert better scrutiny on this new kind of corporate giant.
Judge Boasberg's verdict on Facebook rather confirmed this. Interestingly,
Lina Khan, the new 32-year-old boss of the Federal Trade Commission, has
previously argued that the definition of monopoly should be expanded to
reflect this new world.

 

The senior executives at other big tech firms were struck by what an
effective public performer Pichai is. His testimonies in Congress have
rarely led to drops in Google's share price. His emollient manner and grasp
of detail allows him to draw poison from potentially difficult situations.

 

A low-profile, avuncular figure, he keeps himself largely to himself - which
is partly why Google staff who watch the interview will learn a lot about
him (those present said they did).

 

In a very revealing quick-fire round of questions, we discover he doesn't
eat meat, drives a Tesla, reveres Alan Turing, wishes he'd met Stephen
Hawking, and is jealous of Jeff Bezos's space mission.

 

It was fascinating to find all this out from such an influential figure,
precisely because he doesn't make too many public pronouncements. You
wouldn't, for instance, find him on Instagram riding an electric hydrofoil
surfboard while holding an American flag, on US Independence Day, to the
sound of John Denver's Country Roads (the version by Toots Hibbert is, of
course, infinitely better).

 

Chief ethics officer

It was what I heard from those who worked with or for him, however, that
most informed my approach.

 

Pichai is universally regarded as an exceptionally kind, thoughtful, and
caring leader. Considerate toward staff, he is, according to everyone I
spoke to who knew him, genuinely committed to being an ethical example. He
is an idealist when it comes to the impact of technology on improving living
standards, something that has its roots in his upbringing, which we
discussed at length.

 

He was born into a middle-class family in Tamil Nadu, in south India.
Various technologies had a transformative impact on him, from the old rotary
phone that they were on a waiting list for, to the scooter they all piled on
to for a monthly dinner.

 

At Google, he won over the engineers and software developers. It helped that
he was a metallurgical engineer himself, but it's still not easy; the brains
trust at Silicon Valley companies includes many of the biggest egos on the
planet. Yet they respect him hugely.

 

Pichai obeys the counter-cyclical approach to leadership appointments
favoured by many head-hunters. After the necessarily pioneering, zealous,
risk-taking leadership of founders Larry Page and Sergey Brin, it made sense
to have a lower-profile, solid, more cautious leader who would soothe public
anxieties and charm public officials.

 

Pichai has been outstanding at these latter tasks, and the company's share
price performance is remarkable. Not many people in history could say
they've created a trillion dollars of value as CEO.

 

But the very qualities that made him a smart counter-cyclical appointment
also point to potential pitfalls, according to ex-Googlers and many other
close watchers. It's important to say that these people are generally tech
evangelists, who have very different priorities from your average punter.

 

The tech evangelists are united on a few points.

 

First, Google is now a more cautious company than it has ever been (Google
would of course dispute this, and others would say it would be a good thing
if true).

 

Second, Google has a bunch of "Me-Too" products rather than original ideas;
in the sense that it sees other people make great inventions, and then it
unleashes its engineers to improve them.

 

Third, a lot of Pichai's big bets have failed: Google Glass, Google Plus,
Google Wave, Project Loon. Google could reasonably retort that there is
value in experimentation and failure. And that this rather conflicts with
the first point above.

 

Fourth, that Google's ambition to solve humanity's biggest problems is
waning. With the biggest concentration of computer science PhDs in the world
in one tiny strip of land south of San Francisco, goes this argument,
shouldn't Google be reversing climate change, or solving cancer? I find this
criticism hard to reconcile with Pichai's record, but it is common.

 

Finally, that he deserves tremendous sympathy, because managing a staff as
big, recalcitrant, demanding and idealistic as Google's in an era of culture
wars is essentially impossible. These days Google is quite frequently in the
news because of staff walkouts over diversity or pay; or because key people
have left over controversial issues around identity.

 

With more than 100,000 staff, many of them hugely opinionated on internal
message boards, and activist in nature, this is just impossible to control.
There is a tension between Google genuinely embracing cognitive diversity by
having people of all persuasions among its global staff, and at the same
time really standing up for particular issues as a company.

 

Acceleration

All the above are concerns of people within the tech world who want Google
to go faster. A lot of voters in polarised democracies would like big tech
to slow down.

 

The most obvious lesson I draw from my time in Silicon Valley is that there
is no chance of that happening. Acceleration is the norm: the speeding up of
history is itself speeding up.

 

And, when I asked about whether the Chinese model of the internet - much
more authoritarian, big on surveillance - is in the ascendant, Pichai said
the free and open internet "is being attacked". Importantly, he didn't refer
to China directly but he went on to say: "None of our major products and
services are available in China."

 

With legislators and regulators proving slow, ineffective, and easy to lobby
- and a pandemic taking up plenty of bandwidth - right now the democratic
West is largely leaving it to people like Sundar Pichai to decide where we
should all be heading.

 

He doesn't think he should have all that responsibility. Do you?-BBC

 

 

 

Asia shares bounce as mood shifts, sentiment fickle

(Reuters) - Asian shares were enjoying a relief rally on Monday as record
highs on Wall Street and policy easing in China helped calm some of the
recent jitters on global growth, though plenty of potential pitfalls lay
ahead this week.

 

In the United States, inflation data could provide a scare ahead of
testimony by Federal Reserve Chair Jerome Powell on Wednesday and Thursday,
where markets will be hyper-sensitive to any talk of early tapering.

 

The earnings season also kicks off with JP Morgan, Goldman, Citigroup and
Wells Fargo among those reporting.

 

China releases figures on economic growth, trade, retail sales and
industrial output amid concerns they could underwhelm given the sudden
easing in policy last week.

 

"Expectations around China's outlook have soured over the past month as a
result of some disappointing partial data made a lot worse by the optics of
coming off peak growth from the pandemic recovery," said Westpac analysts in
a note.

 

"However, annual growth is still expected to be above 8.0% and, through the
second half of 2022, the quarterly growth pulse should firm back to trend."

 

For now, investors were happy that last week's burst of bearishness had
swung around in New York, sending Wall Street higher and tempering the bull
run in bonds.

 

On Monday, MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS gained 0.9%, after shedding 2.3% last week.

 

Japan's Nikkei .N225 bounced 2.3%, and away from a two-month trough touched
on Friday, while South Korea .KS11 added 0.9%. Chinese blue chips .CSI300
rose 1.7%.

 

Nasdaq futures NQc1 and S&P 500 futures ESc1 were little changed following
their recovery on Friday.

 

Yields on U.S. 10-year notes US10YT=TWEB were steady at 1.362%, having been
as low as 1.25% on Friday following eight straight sessions of price gains.
US/

 

"The rally in U.S. rates in July has been remarkable," noted analysts at
NatWest Markets. "No one driver perfectly explains the move...but fears
about global growth and the Covid Delta variant had raised new doubts on
inflation."

 

That bout of risk aversion had also supported the safe haven U.S. dollar,
until it ran into some profit taking on Friday. It was last at 92.147 =USD
on a basket of currencies, after touching a three-month top of 92.844 last
week.

 

The safe haven yen also lost some ground to 110.18 per dollar JPY=, while
the euro firmed to $1.1871 EUR= from last week's low at $1.1780.

 

European Central Bank President Christine Lagarde caught markets by surprise
on Monday saying the bank will change its guidance on policy at its next
meeting and show it is serious about reviving inflation. (Full Story)

 

The ECB's new strategy allows it to tolerate inflation higher than its 2%
goal when rates are near rock bottom.

 

The general risk-off mood helped gold higher last week and it was trading at
$1,805 an ounce XAU= compared with its June trough of $1,749.

 

Oil prices steadied on Monday after ending a volatile week with a bounce as
U.S. inventories tightened. Dealers are still uncertain about the outlook
for supplies after OPEC talks on restrictions broke down. O/R

 

Brent LCOc1 was last down 4 cents at $75.51 a barrel, while U.S. crude CLc1
stood unchanged at $74.56.

 

The Thomson Reuters Trust Principles.

 

 

 

Credit Suisse's Swiss compliance boss Scarlato quits after 4 1/2 months

(Reuters) - The chief compliance officer at Credit Suisse's (CSGN.S) Swiss
Universal Bank (SUB) is quitting "with immediate effect" after just 4 1/2
months in the role to pursue opportunities elsewhere, the second-biggest
Swiss bank said on Monday.

 

Floriana Scarlato, who took on the job on March 1, is also stepping down
from her posts as SUB management committee member and from the executive
board of Credit Suisse (Switzerland) Ltd.

 

The departure of Scarlato, a Credit Suisse employee since 2005, comes as new
Chairman Antonio Horta-Osorio reconfigures the Swiss bank's strategy
following repeated crises, including corporate spying, losses stemming from
lending to family office Archegos, and the wind-down of $10 billion funds
linked to now-collapsed supply chain finance firm Greensill. read more

 

"Floriana Scarlato's successor will be announced in due course," Credit
Suisse said in a statement.

 

Horta-Osorio has vowed to scrutinise risk management and culture following
Credit Suisse's serial mishaps, as well as review strategic options for the
bank.

 

The Thomson Reuters Trust Principles.

 

 

Singapore's Temasek set to post record portfolio in global equities rally

(Reuters) - Singapore state investor Temasek Holdings' portfolio value
likely rebounded to scale a record in the year ending March, boosted by a
rally in global markets and the public listing of some of its holdings.

 

Analysts expect the value of Temasek's assets to have jumped over 20% in the
year ending March, pushing up the portfolio value to roughly S$375 billion
($277.7 billion) - after dipping 2.2% to S$306 billion a year ago - which
marked the first drop after three consecutive years of gains.

 

The long-term outlook for Temasek, one of the world's biggest state
investors, has been clouded by its support to pandemic-hit businesses.
Temasek bulked up funding to Singapore Airlines (SIAL.SI) and offshore
marine services firm Sembcorp Marine (SCMN.SI), among others. read more

 

"We have seen broad economic growth and a rebound in financial markets, but
there are industries which are facing headwinds, so the challenge for big
long-term investors like Temasek and GIC really is about managing portfolios
in which occasionally, some sectors will take a hit," said Song Seng Wun, an
economist at CIMB Private Banking.

 

Temasek is anchored in Asia, with a 66% exposure to the region as measured
by underlying assets, most of which are in China and Singapore. But the
investor has been stepping up investments in the United States, especially
in the tech sector.

 

Temasek said it will give details of its annual performance this week, while
larger investor GIC will publish its annual report later this month.

 

Analysts expect no major change to Temasek's strategy, though senior
executive Dilhan Pillay is set to take over as the CEO of the investment
firm from Ho Ching, who is retiring after heading Temasek for 17 years.

 

Unlike many state investors, the majority of Temasek's investments are in
equities, with unlisted assets making up a record 48% of its portfolio in
the year to March 2020.

 

Global equities have surged over the past financial year, with MSCI's Asia
shares ex-Japan index (.MIAPJ0000PUS) rallying 55% and Singapore's Straits
Times (.STI) index rising 28%.

 

"There remains a flood of liquidity, so competition for funding is still
fierce," said Song.

 

Among the shares held by Temasek that posted strong gains over the past
financial year, DBS Group (DBSM.SI) surged 55%, Standard Chartered (STAN.L)
rose 12% and China Construction Bank (601939.SS) gained 16%.

 

Some other firms in Temasek's portfolio, notably Airbnb (ABNB.O) and food
delivery firm Doordash (DASH.N), had public listings.

 

"I don't expect Temasek's medium to long term strategy to change due to any
result this year - it is obviously ruled by a long term horizon and aims at
anticipating the market by being one of the world's largest and most active
investors in VC (venture capital) and technology," said Diego Lopez,
managing director of sovereign wealth fund tracker Global SWF.

 

($1 = 1.3505 Singapore dollars)

 

The Thomson Reuters Trust Principles.

 

 

 

EXCLUSIVE China to order Tencent Music to give up music label exclusivity
-sources

(Reuters) - China's antitrust regulator is poised to order the music
streaming arm of Tencent Holdings Ltd (0700.HK) to give up exclusive rights
to music labels, two people with direct knowledge of the matter said on
Monday.

 

The penalty, plus a 500,000 yuan ($77,150) fine for misreporting the
acquisition of two apps, is the culmination of an investigation by the State
Administration of Market Regulation (SAMR) into Tencent Music Entertainment
Group (TME.N), China's dominant music streaming company, the people told
Reuters.

 

In April, Reuters reported that the regulator was preparing to fine Tencent
Holdings as part of a sweeping antitrust clamp-down on the country's
internet giants, with two people saying the company should expect a penalty
of at least 10 billion yuan.

 

The people said at the time that the gaming and social media leader was
lobbying for a more lenient penalty.

 

Reuters could not immediately determine whether Tencent Holdings faces
further antitrust penalties beyond the expected ruling on Tencent Music.

 

SAMR, Tencent Holdings and Tencent Music did not respond to Reuters'
requests for comment on Monday.

 

Under the terms of the penalty, SAMR will fine Tencent Music for not
properly reporting the 2016 acquisitions of competing apps Kugou and Kuwo
for antitrust review, an offence capped at 500,000 yuan, the people said.

 

In April, Reuters reported that SAMR had told Tencent Music it may have to
sell Kuwo and Kugou, but the people on Monday said it no longer faces that
outcome.

 

Still, SAMR on Saturday said it would block Tencent Holding's plan to merge
China's two biggest videogame streaming site operators - Huya Inc (HUYA.N)
and DouYu International Holdings Ltd - on antitrust grounds, confirming an
earlier Reuters report. read more

 

EXCLUSIVITY

 

SAMR began investigating Tencent Music in 2018 but stopped in 2019 after the
company agreed to stop renewing some of its exclusive rights, which normally
expire after three years, two people with knowledge of the matter previously
told Reuters.

 

Tencent Music, China's equivalent to Spotify Technology SA (SPOT.N), had
been pursuing exclusive streaming rights with record labels including
Universal Music Group, Sony Music Group and Warner Music Group Corp (WMG.O).

 

However, it kept exclusive rights to music from Jay Chou - one of the
Chinese-speaking world's most influential artists - which it used, along
with some others, as a competitive edge against smaller rivals.

 

China has since late last year sought to curb the economic and social power
of its once loosely regulated internet giants, in a clamp-down backed by
President Xi Jinping.

 

In April, SAMR imposed a record 18 billion yuan fine on Alibaba Group
Holding Ltd , ruling the e-commerce leader had abused its dominant market
position for several years.

 

($1 = 0.1543 Chinese yuan renminbi)

 

The Thomson Reuters Trust Principles.

 

 

China condemns 'unreasonable suppression' as U.S. expands economic blacklist

(Reuters) - China said on Sunday it "resolutely opposes" the addition of 23
Chinese entities to a U.S. economic blacklist over issues including alleged
human rights abuses and military ties.

 

The Ministry of Commerce said in a statement the inclusion of the Chinese
entities was a "serious breach of international economic and trade rules"
and an "unreasonable suppression" of Chinese companies.

 

Beijing "will take necessary measures to safeguard China's legitimate rights
and interests," it said, citing a spokesperson.

 

The U.S. Department of Commerce said on Friday it had added 14 companies and
other entities to its economic blacklist, saying they had been "implicated
in human rights violations and abuses in the implementation of China's
campaign of repression, mass detention, and high technology surveillance
against Uyghurs, Kazakhs, and other members of Muslim minority groups in the
Xinjiang Uyghur Autonomous Region." read more

 

Beijing denies the alleged abuses.

 

Entities included on the economic blacklist are generally required to apply
for licenses from the Commerce Department and face tough scrutiny when they
seek permission to receive items from U.S. suppliers.

 

Washington also added five entities it said directly support China's
military modernisation programmes related to lasers and battle management
systems. It identified a further four entities for "exporting and attempting
to export items" to entities already sanctioned by the U.S.

 

Wuhan Raycus Fiber Laser Technologies Co (300747.SZ), one of the added
entities, said in an exchange filing on Sunday that its inclusion on the
economic blacklist would not have a substantial impact on its research and
production. read more

 

In 2019, the Commerce Department under then-president Donald Trump targeted
20 Chinese public security bureaus and eight companies including video
surveillance firm Hikvision (002415.SZ), as well as leaders in facial
recognition technology SenseTime Group Ltd and Megvii Technology Ltd, over
China's treatment of Muslim minorities.

 

The Thomson Reuters Trust Principles.

 

 

 

BlackRock CEO calls for stronger climate finance plan at G20 meet

(Reuters) - BlackRock (BLK.N) Chief Executive Larry Fink on Sunday called
for governments to develop a stronger long-term climate finance plan to
unlock the private capital needed to fund the transition to a low-carbon
economy.

 

Speaking to The Venice International Conference on Climate at a meeting of
G20 Finance Ministers, he said without such a plan, current efforts,
including on corporate sustainability disclosures, risked being "nothing
more than window dressing".

 

Fink, who heads the world's biggest asset manager, with around $9 trillion
in assets, also called for reform of the International Monetary Fund and the
World Bank to make them more suited to tackle the challenge of climate
change.

 

Fink, highlighted three "critical" issues needed to power the ecological
transition, which he said represented a $50 trillion opportunity for
investors. BlackRock itself is a major investor in fossil fuels.

 

Firstly, he said private companies needed to be under the same pressure to
share information on their sustainability efforts as public companies.

 

Currently, listed oil and gas companies had a "massive incentive" to sell
out of more polluting assets, often to private and state-owned companies on
which there is less scrutiny and which disclose far less about their
operations.

 

Secondly, Fink said governments risked fuelling inequality unless they
created more demand for greener products and services, lowering the cost, or
'green premium', that penalises the worse off and could fuel social
instability.

 

Lastly, global institutions such as the World Bank and the IMF needed to be
changed so they could do more to encourage private sector capital to help
fund the transition in emerging markets.

 

He noted that the two bodies were created nearly 80 years ago based on a
bank balance sheet model and said it was now necessary to "rethink their
roles."

 

Citing BlackRock's role in the creation of a $250 million public-private
climate finance strategy to help fund sustainable infrastructure, in which
government and philanthropic investors provide subordinated capital to
protect the returns of private investors, he said more of the same was
needed.

 

"If we don't have international institutions providing that kind of
first-loss position at a greater scale than they do today, properly
overseeing these investments, and bringing down the cost of financing and
the cost of equity, we're just not going to be able to attract the private
capital necessary for the energy transition in the emerging markets," he
said.

 

The Thomson Reuters Trust Principles.

 

 

 

Big insurance companies launch net-zero climate alliance

(Reuters) - Eight of the world's leading insurance and reinsurance companies
on Sunday launched an alliance to help speed up a transition to a net zero
emissions economy.

 

The companies, which include Europe's top three insurers by premiums -
Allianz (ALVG.DE), AXA (AXAF.PA) and Generali (GASI.MI) - said the Net-Zero
Insurance Alliance (NZIA) would work to shift underwriting portfolios
towards net-zero greenhouse gas emissions by 2050.

 

The move comes as insurers come under increasing pressure to spell out how
they plan to decarbonise their businesses amid growing calls for them to
stop underwriting and investing in fossil fuel projects. read more

 

Each of the companies will individually set intermediate targets every five
years and report on progress annually in cooperation with competition
authorities, the NZIA members said in a statement.

 

"With this new Net-Zero Insurance Alliance, we are raising our climate
ambition further," said Thomas Buberl, Chief Executive of the AXA Group,
which chairs the NZIA.

 

NZIA members, which also include Aviva (AV.L), Munich Re (MUVGn.DE), SCOR
(SCOR.PA), Swiss Re (SRENH.S) and Zurich Insurance Group (ZURN.S), will set
underwriting criteria for the most carbon-intensive activities in their
underwriting portfolios and offer solutions for low-emission and
zero-emission technologies.

 

They will also include net-zero and decarbonisation risk criteria in their
risk management frameworks.

 

"By committing to join the gold standard alliance for net zero, the (NZIA)
will ultimately make underwriting contingent on underlying companies having
credible net-zero transition strategies," said U.N. climate envoy Mark
Carney.

 

The Alliance, first outlined in April, was presented by Generali CEO
Philippe Donnet at Sunday's G20 Climate Summit in Venice.

 

Many of the leading Europe-based insurers have already adopted
climate-friendly policies. Last month, Generali pledged to reach carbon
neutrality in its direct investment portfolio by 2050. read more

 

The Thomson Reuters Trust Principles.

 

 

 

Vietnam's VinFast starts operations in North America and Europe

(Reuters) - Vietnam's first domestic car manufacturer, Vinfast, said on
Monday it has started operations in North America and Europe, joining a
crowded field of players seeking to woo customers with smart electric cars.

 

VinFast, a unit of Vietnam's largest conglomerate Vingroup JSC (VIC.HM),
became the country's first fully fledged domestic car manufacturer when its
gasoline-powered models built under its own badge hit the streets in 2019.

 

The company said in a statement it considered the United States, Canada,
France, Germany and the Netherlands its key markets in its international
business expansion plan.

 

Two electric car models VF e35 and VF e36 will be officially launched in
March next year, the statement added.

 

VinFast sold about 30,000 vehicles last year and has forecast sales of more
than 45,000 for 2021.

 

It flagged in April that it would consider an initial public offering in the
United States or merger with a Special Purpose Acquisition Company. read
more

 

The Thomson Reuters Trust Principles.

 

 

Multinationals tax shift unlikely until 2022, says Yellen

(Reuters) - U.S. Treasury Secretary Janet Yellen on Sunday said that a newly
endorsed mechanism to allow more countries to tax large, highly profitable
multinational companies may not be ready for consideration by lawmakers
until spring 2022.

 

Yellen told a news conference after a G20 finance leaders meeting in Venice,
Italy, that the OECD re-allocation of taxing rights was on a "slightly
slower track" than a global corporate tax of at least 15% as part of a tax
deal among 132 countries.

 

G20 finance ministers and central bank governors endorsed the deal over the
weekend, but questions remain over the ability of U.S. President Joe Biden's
administration to persuade a deeply divided Congress to ratify the changes.
read more

 

Yellen's comments suggest a two-step process for implementing the OECD tax
deal, with the global minimum tax moving first.

 

She said she hoped to include provisions to implement the so-called "Pillar
2" minimum tax into a budget "reconciliation" bill this year that Congress
could approve with a simple majority, potentially without Republican
support.

 

The "Pillar 1" portion of the agreement would end unilateral taxes on
digital services in exchange for a new mechanism that would allow large
profitable companies - including technology giants such as Google (GOOGL.O)
and Facebook (FB.O) - to be taxed in part by countries where they sell
products and services, rather than just those hosting their headquarters or
intellectual property.

 

This will require a multilateral tax agreement that will take time to
negotiate, a Treasury official said.

 

"Pillar 1 will be on a slightly slower track. We'll work with Congress,"
Yellen said, when asked whether a two-thirds majority would be needed in the
U.S. Senate, which is normally the requirement for international treaties.

 

"It may be in ready in the spring of 2022 and we'll try to determine at that
point what's necessary for its implementation," Yellen said.

 

DIGITAL TAX WARNING

 

It was unclear how the 2022 timing would affect the withdrawal of unilateral
digital services taxes. Yellen made clear that European Union countries had
agreed to withdraw such taxes when asked how she viewed an expected European
Commission proposal for a new digital levy to fund pandemic relief.

 

"It's really up to the European Commission and the members of the European
Union to decide how to proceed, but those countries have agreed to avoid
putting in place in the future and to dismantle taxes that are
discriminatory against U.S. firms."

 

Yellen travels to Brussels later on Sunday to discuss the digital levy and a
range of other issues with European Commission president Ursula von der
Leyen and the Eurogroup headed by Irish Finance Minister Paschal Donohoe.

 

Ireland is among the countries yet to sign up to the international tax deal,
along with Hungary, Estonia, Kenya and Nigeria.

 

The visit provides the opportunity to explain the benefits of inclusion in
the agreement, Yellan said.

 

"In some cases there are specific technical issues that can be addressed and
where possible we will discuss and try to bring them aboard," she added.

 

IMF RESERVES

 

Yellen also hopes to have facilities in place by October to allow $100
billion of the International Monetary Fund's $650 billion currency reserves,
know as Special Drawing Rights (SDRs), to be transferred or loaned to poorer
countries.

 

G20 officials discussed how to proceed, but lending SDRs could present
problems for countries that must hold them as reserve assets without credit
or liquidity risk. Yellen said these countries may need to make outright
cash contributions to a new SDR fund to provide a capital buffer.

 

"How to design this fund, so that countries can continue to have their
lending continue to count as reserve assets is something we're very focused
on, and I believe that's a solvable problem," Yellen said.

 

The Thomson Reuters Trust Principles.

 

 

 

Nigeria Spent 97% of Revenue On Debt Servicing in 2020 - Report

The report says all government's salaries, overhead were financed with
loans, Central Bank support.

 

Debt servicing obligations gulped 97 percent of the Nigerian government's
total revenue in 2020, a report has shown.

 

According to BudgIT, a civic-tech non-profit organisation, of the N3.42
trillion generated as revenue, Nigeria expended N3.34 trillion on debt
servicing.

 

The report said total expenditure stood at N10.01 trillion.

 

"This means nearly all FG's salaries, overhead & CAPEX (Capital Expenditure)
were financed with loans & CBN support," the civic group said.

 

According to BudgIT's "2020 Budget Implementation Analysis" report released
on Friday, N4.65 trillion was spent on non-debt recurrent expenditure.

 

"In 2020, FG projected a total revenue of N5.37tn; however, the actual total
revenue eventually stood at N3.42tn. This represents a 63.71% revenue
performance," BudgIT said.

"The cost of servicing FG's debt is drowning Nigeria as the cost continues
to grow, gulping a total of N3.34tn (97%) from the total revenue."

 

The Nigerian government's revenue from oil however recorded a significant
boost of N1.41 trillion, surpassing the oil revenue projections of N1.01
trillion.

 

Revenue in the non-oil sector stood at N1.26 trillion as against the
projections of 1.62 trillion.

 

The report said the government's total expenditure of N10.01 trillion
represents 93 percent performance, when compared with the budgeted amount of
N10.81 trillion.

 

The report added that capital expenditure keeps getting the short end of the
stick, as only N1.60tn was devoted to capital projects in 2020.

 

"This is not acceptable!" the organisation said on Friday.

 

"Recall that FG had a CAPEX plan (exclusive of transfers) of N2.69tn, this
means only 59.5% (slightly over half) of the 2020 projection was actualised.

 

"The budget of N428.03 for Statutory Transfers in 2020 was disbursed.
However, there is no breakdown or implementation report of how this money
was spent/disbursed."-Premium Times.

 

 

Nigeria: Hike in Price of Diesel Worsens Nigeria's Economic Woes

Even as the organised labour and the federal government continue their
engagement on what the appropriate price of petroleum motor spirit (PMS),
otherwise known as petrol should be, oil marketers in the country Thursday
raised the price of diesel to between N275 and N290 per litre, up from
between N220 and N245 it was in February.

 

The recent increase, the fifth in the last 12 months, was caused by the
increase in global crude oil prices and naira devaluation, according to
marketers.

 

And with crude oil price moving northward (hit $76/barrel Friday morning),
diesel price in the country may continue to go up, experts have said.

 

In July 2020, the price of diesel across Nigeria was between N238.43 (mostly
in the North-East) and N212.39 (mostly in South-East), while in January
2021, the price increased to N241.24 at many filling stations in the North.
However, the price came down in the southern part of the country as diesel
was sold at N210.17.

In February, some filling stations in Lagos increased the diesel price to
N250 per litre, while many others sold it between N220 and N245 per litre,
according to media reports.

 

It was further increased to N280 two weeks ago. Thursday's increase was the
fifth in just one year.

 

Though the price of diesel, otherwise known as automotive gas oil, had long
been deregulated, meaning that marketers have the right to fix price
according market forces, the recent increase to N290 per litre on Thursday
caught many manufacturing companies unawares. This is because they are
already grappling with high production cost and low sales. The manufacturers
rely mostly on the automotive gas oil to power their generating machines
amid lack of reliable power supply from the national grid.

 

The Manufacturers Association of Nigeria (MAN) said self-generated
electricity gulped 30 per cent of the production cost by its members.

The MAN's director-general, Mr Segun Ajayi-Kadiri, who disclosed this while
addressing participants at the Global Environmental Facility-United Nations
Industrial Development Organisation (GEF-UNIDO) project inception workshop
in Lagos on Thursday, said the cost of sourcing energy from the national
grid had not been business-friendly either.

 

Kadiri, however, said energy management systems and optimisation could
sustainably reduce manufacturers' energy consumption and cost.

 

An Abuja economic expert, Simon Samson Galadima, said any hike in the price
of diesel would reverberate across the entire economy.

 

According to Galadima, the high inflation experienced at the moment will get
worse, particularly the non-core inflationary pressure, with the increase in
diesel price.

 

"Harvest season is upon us, so we expect food price to ease. Be that as it
may, any good food price fall may likely be offset by energy inflation," the
expert said.

But he said subsidising the price of diesel was not the way to go as scarce
resources are not being used optimally by the government.

 

He said, "The best approach should be opening up the energy sector. Reducing
the stranglehold by the government and a few players does bode well.
Furthermore, providing alternative means of transportation, boosting
production will be a way to compensate for any increase due to subsidy
removal.

 

"The increase will undeniably be tough. Nonetheless, subsidy is not an
option. I believe the dependence of firms on generators run by diesel is the
problem. Consequently, I will suggest going for alternative energy sources."

 

He also said the power sector should be fully liberalised. Government should
hand it off totally and competence players the world over should be
incentivised to come in.

 

Also speaking on the diesel price hike, a petroleum industry expert and
analyst, Suraj Oyewale, said diesel remained an important source of fuel in
Nigeria, especially in the industrial sector; hence any increase in its
price will touch every Nigerian.

 

"It is a major component of cost of production in Nigeria. So it is natural
that when cost of diesel increases, cost of production increases and
manufacturers are usually left with no other option than to increase the
prices of goods.

 

"It is not only the manufacturing sector that gets the hit, even the service
sector is impacted as many offices run on diesel-powered generators. So, the
effect of rise in price of diesel is very far reaching," Oyewale told Daily
Trust on Sunday.

 

However, he said diesel market was already deregulated and introduction of
subsidy would mean returning to the era of regulation.

 

He added, "At a time when the country is trying to disentangle itself from
the grip of regulated pricing for PMS, bringing another product into the
price control bucket will aggravate the problem."

 

He said natural gas was a cheaper alternative to diesel as a source of
energy for manufacturers, but only the larger manufacturers had been able to
adopt this energy source due to limited gas distribution network in Nigeria.

 

This is one area the government and manufacturers could look at to mitigate
the issues and stay in business, he said.

 

A former director-general of the Lagos Chamber of Commerce and Industry, Dr
Muda Yusuf, said the high diesel cost was taking a huge toll on operating
and production costs across sectors.

 

According to Yusuf, the recent increase is a case of multiple jeopardy for
businesses as the purchasing power had been weak and the exchange rate of
the naira to the dollar had depreciated sharply.

 

The Central Bank of Nigeria (CBN) recently devalued the naira as it adopted
the NAFEX exchange rate of N410.25 per dollar as its official exchange rate,
days after removing the N379/$ rate from its website.

 

"There is foreign exchange market liquidity. The cargo clearing at our
seaports is a nightmare. The security situation has inflicted an elevated
risk to investment," Yusuf said.

 

He added that diesel cost also had profound implications for transportation
and logistics costs.

 

He said, "Most of the trucks that move freight across the country are
powered by diesel. The consequences are that sales are dropping,
inflationary pressures will intensify, profit margins are being eroded and
industrial capacity utilisation will drop.

 

"Elevated pressure on general price level exacerbates the poverty situation
in the economy."

 

Similarly, a big grocery distributor in Abuja, Umar Abdullai Mukhtar, said
the diesel price hike would result in low sales for people like him.

 

"The prices of goods will be increased by the companies producing them. And
this is simply because about 90-95 per cent of industries rely on diesel to
power their machines," Mukhtar said.

 

He believes the government should subsidise the diesel price because not
doing that may spell doom for the manufacturing sector.

 

"The continued price hike can kill industries, particularly small and medium
enterprises," he said.

 

A civil servant who pleaded anonymity said salaries of many Nigerian civil
servants could no longer " do any meaningful things" as inflation rises
almost every quarter.

 

She added that the diesel price hike would cause further increases in the
prices of commodities.

 

But a member of the Major Oil Marketers Association of Nigeria (MOMAN),
Ajala Marufdeen, said market forces determined the price of diesel, and the
price would come down according to such forces.-Daily Trust.

 

 

South Africa: Big Step Towards Vaccine Security for South Africa While
Country Remains On Level 4 Lockdown

South Africa will remain on Level 4 lockdown, but restaurants and gyms will
be able to open, President Cyril Ramaphosa announced on Sunday, adding that
the country had taken a big leap towards vaccine security. Ramaphosa also
broke his silence over violent protests in KZN and Gauteng.

 

In a significant step forward for vaccine security in South Africa and
Africa, President Cyril Ramaphosa announced that Aspen, now filling and
finishing vaccines at its Gqeberha plant in the Eastern Cape, will start
producing vaccines under licence.

 

Ramaphosa made the announcement as part of his address to the nation on
Sunday, where he explained why the country was remaining at Level 4 lockdown
with slight amendments to restrictions.

 

The president also broke his silence over the ongoing violent protests and
looting in KwaZulu-Natal and Gauteng after the incarceration of former
president Jacob Zuma.

 

"It is a matter of concern to all South Africans that some of these acts of
violence are based on ethnic mobilisation. This must be condemned by all
South Africans," Ramaphosa said.

 

In announcing the major step towards vaccine security for South Africa and
the African continent, the president said:

 

"In the last few days, the African Union, through...-Daily Maverick.

 

 

 

Kenya: Winners and Losers in Yatani's New Tax Measures

The Kenya Revenue Authority (KRA) has entered the second week of
implementing new tax measures following the enactment of the Finance Act,
2021, which has raised fresh concerns over the rising cost of living at a
time the increase in the price of goods has hit a 16-month high.

 

The National Treasury has targeted several sectors that will play a key role
in raising the new tax revenue to finance the Sh3.6 trillion budget for the
current financial year, and has at the same time introduced tax incentives
in other sectors to boost investment and stimulate consumption in a tough
balancing act, which has birthed winners and losers.

Winners

 

Employers who offer internships to at least 10 students from technical or
vocational training colleges will from January next year qualify for tax
rebates amounting to 50 per cent of their salaries in the year following the
interning of the students.

 

The tax incentive is part of the government's plan to encourage employers to
take in more graduates from technical institutions, which have emerged as
key pillars in creating new jobs especially in the informal sector, as
opposed to giving rebates for interning university graduates only.

 

Kenya Power, oil companies

 

Businesses like Kenya Power and oil marketing companies (OMCs), whose retail
prices are set by the government, will be exempted if the enforcement of the
minimum tax is given the nod.

 

The implementation of the tax by the KRA was temporarily suspended by the
High Court in April pending the determination of a myriad of cases filed by
various parties protesting against the tax.

Insurers, investors in Special Economic Zones (SEZs), distributors whose
income is wholly based on commission, and manufacturers who will have spent
at least Sh10 billion in the four years preceding the date when the tax is
enforced will also be spared from paying the tax.

 

Maize millers, goods exporters

 

Exporters of goods will incur less costs to transport their goods from Kenya
to other countries after transportation of exports was zero-rated, which
means they will no longer be paying the 16 per cent Value Added Tax (VAT).

 

Millers are also an elated lot after the supply of maize, wheat and cassava
flour was zero-rated as opposed to being exempt, which will now allow them
to claim input VAT to keep prices low and stimulate consumption.

Contributors to NHIF

 

Beginning January next year, workers who contribute monthly to the National
Hospital Insurance Fund (NHIF) will get a 15 per cent relief on their
contributions to the fund.

 

Individuals pay a maximum of Sh1,700 per month to the fund, meaning that
they will get a relief of up to Sh255 in a bid to woo more Kenyans to join
the scheme from where they will pay a mandatory contribution of at least
Sh500 per month.

 

"The new provision will also lead to higher net pay for employees due to the
insurance relief being applied on NHIF contributions deducted through the
payroll," tax experts at KPMG said.

 

Fitting your home with solar

 

It will also be cheaper to fit your home or company with a solar panel after
the Act removed the requirement that this type of investment can only
qualify for capital allowances. That is, if you supply electricity to the
national grid.

 

This means that investors in the electricity sector who only want power for
their own use, or supply it to a group of people, will qualify for these
allowances on their equipment, machinery and buildings used in power
production.

 

Currently, investors enjoy investment deduction equal to 100 per cent of
this cost, and if 150 per cent of their value exceeds Sh200 million, or if
the investment is based outside Nairobi.

 

"This is an additional incentive for private companies seeking to generate
electricity for private use, or for direct sale to their customers without
going through the national grid. It will encourage the growth of small
renewable energy power plants, which is an important step towards increasing
competition and reducing the cost of electricity," they said.

 

Investors in SGR

 

Investors who will build 100,000 tonne-capacity bulk storage and handling
facilities for goods before the end of next year to support the Standard
Gauge Railway (SGR) operations will qualify for investment deduction of 150
per cent in a move to boost investment in warehousing.

 

Online businesses

 

Local businesses that provide their services online are breathing with a
sigh of relief after they were exempted from paying the Digital Services Tax
(DST), which was introduced last year to widen the tax base amid fierce
resistance from businesses over its impact on their earnings.

 

The tax is now only being charged on foreign businesses conducting their
online operations in Kenya.

 

Investors in mining and extractives

 

Beginning next year, investors in the mining and extractives sector will
qualify for allowances on their capital expenditure on acquiring machinery
even if they have not yet been given a mining right, which is set to
stimulate investment in the sector.

 

These investors will also enjoy a cap on the interest rates charged by
lenders on loans, which will see more investment in the sector on lower debt
financing obligations.

 

Banks

 

Lenders, who are currently grappling with record-setting levels of bad debt,
have been hit further by the introduction of excise duty on fees and
commissions earned on loans, which will further thin their bottom lines.

 

This will increase the cost of accessing loans as lenders will pass the
additional cost to borrowers.

 

Internet and telephone service providers

 

The Act has increased the excise duty on the Internet and telephone services
from 15 per cent to 20 per cent, which has raised the cost of airtime and
loans. It's set to cut the earnings of internet, mobile loan providers and
telcos on reduced consumption.

 

Jewelers, smokers, furniture, pasta, eggs, potatoes and onion consumers

 

Jewelers have been slapped with a 10 per cent excise duty, while products
containing nicotine meant for inhalation and nicotine substitutes have been
subjected to a charge of Sh1200 per kilogram.

 

Meanwhile, imported pasta, whether prepared or unprepared, has been slapped
with a 20 per cent excise duty, while imported furniture, eggs, potatoes and
onions have also been subjected to a 25 per cent excise duty.

 

Gamblers

 

The Act has reintroduced excise duty on betting and gaming at a rate of 7.5
per cent of the amount staked, which will deter gamblers from placing
stakes. The tax was initially introduced in 2019 and saw several betting
firms pull out of the local market but was removed in July last year through
the Finance Act, 2020.

 

Investors offering services abroad

 

Businesses based in Kenya that also provide services in other countries will
not be eligible to claim input VAT on the services they export after the
supply of exported services was changed from zero-rated to exempt.

 

This will increase their operational costs at a time firms are already faced
with low earnings due to business loss.

 

Investors in mining and extractives

 

While investors in mining and extractives will enjoy capital allowances and
caps on interests on their loan obligations, they will be hit by the
increase in withholding tax on fees they pay for foreign individuals and
entities for their services from 5.6 per cent to 10 per cent.

 

This will hit the businesses hard by raising their operational costs,
especially as most import their services.-Nation.

 

 

 

Kenya: Rising Cooking Gas Prices a Threat to Forest Cover, Environmentalists
Warn

Environmentalists in Taita Taveta County have warned that the increase in
cooking gas prices will hamper efforts in protecting forests in the country.

 

This comes after the Kenya Revenue Authority (KRA) introduced Value Added
Tax (VAT) on cooking gas on July 1, to boost revenue collection.

 

Since 2016, Liquefied Petroleum Gas, popularly known as cooking gas, has
been retailing at costs that exclude VAT, after the government removed the
16 per cent tax that was imposed on the product.

 

However, the Finance Act 2020 re-introduced the VAT, but its implementation
was postponed to the second half of 2021, due to the outbreak of the
Covid-19 pandemic.

Speaking to Nation.Africa, the environmentalists said the high prices will
increase the demand for biomass fuel sources, mainly charcoal and firewood
thereby posing a threat to the sustainability of forests in the country.

 

They said the cost of alternative fuel for cooking such as gas is one of the
challenges facing the collaborative efforts that are crucial in protecting
trees in the area.

 

"The high prices are posing a threat to environmental conservation as the
majority of residents will now go back to firewood as a source of fuel,"
said Mr Zaccheaus Maghanga, a Water Resources Users Association (Wrua)
chairperson in Voi.

 

Mr Maghanga termed the situation as a major setback to forest conservation
efforts.

 

He said among the mandate of the Wrua is to identify an alternative source
of fuel for people living in catchment.

"That is captured in our sub-catchment plan but it is difficult to convince
people to switch to the alternative energy because they cannot afford it,"
he said.

 

Mr Maghanga said several people have relocated to the villages after losing
their jobs in towns following the outbreak of the Covid-19 pandemic.

 

"Raising the cost of cooking gas will make many families from poor
households run to charcoal and firewood. This will cut down trees, thereby
reducing the country's forest cover," he said.

 

According to the latest data from the Kenya National Bureau of Statistics
(KNBS), out of 94,468 households in the county, only 14 per cent of the
families are using LPG for cooking.

 

The data shows that over 55 per cent of the households are using firewood
while over 22 percent of families use charcoal for cooking.

Currently, Taita Taveta County has a tree cover of 3.6 per cent and
stakeholders are working towards extending it to four per cent by next year.

 

Mwangea Tsavo Group chairperson, Mr Herbert Warombo said rural communities
in the county had begun to slowly shift to the forest-friendly LPG, reducing
their reliance on firewood, a major boost for habitat and wildlife
conservation.

 

"Our ultimate goal is to save the country's fast disappearing forest cover.
We are still behind in terms of forest cover and that is why we have been
fighting to have more people shifting to clean energy," he said.

 

He said the conservation group plans to plant over one million trees by the
end of the next year 2022 and 10 million trees by 2028.

 

The trees will be planted along highways and around the Tsavo National Park.

 

Following the introduction of the VAT, cooking gas refills have increased at
all distributors in the country.

 

A spot check at various petrol stations in Voi revealed that the cost of a
13 kg cooking gas cylinder ranges from Sh2,350-Sh2,500 up from Sh2,100 while
a six-kilogramme cylinder is retailing at Sh1,200 up from Sh900.

 

Meanwhile, a bag of charcoal weighing 100-kilograms is being sold at Sh1,200
in Voi, attractive pricing compared to the cooking gas.

 

The situation has heavily impacted the budget of many households.

 

"In my household, a bag of 100 kg charcoal can last for over a month while
the three-kilogramme gas cannot even go for one month," said Ms Angeline
Wakio, a Voi resident.

 

Others have gone back to use kerosene which is currently retailing at Sh96 a
litre.

 

"I have started using paraffin for both cooking and lighting. The advantage
with paraffin is that one can buy in small quantities of Sh50 at local
kiosks," Ms Wakio added.

 

Firewood extraction by communities has led to habitat degradation as well as
health issues caused by toxic gases.

 

"We have been encouraging communities to switch to LPG but the prices are
now a setback. Apart from saving trees, the usage of firewood is harmful due
to toxic gases," said Ms Wabosha Kamata, an official at Taita Taveta
Wildlife Conservancies Association (TTWCA).

 

She said the carbon credit business which is relied on by ranches will also
be affected.

 

A plan by the government to migrate more than four million poor households
to the cleaner LPG was suspended in 2018.

 

The project aimed at distributing over 4.3 million cylinders over three
years to reduce the pressure of firewood extraction in forest habitats.

 

Ms Kamata urged the government to remove the tax rate to allow more
households to switch from charcoal and kerosene to LPG.

 

She said apart from providing subsidised LPG, the government should create
awareness in households for them to understand the harmful impacts of
burning firewood, to ensure that the switch to LPG is sustained.

 

"Our leaders especially parliamentarians must ensure that such taxes are not
imposed on important products," she said.-Nation.

 

 

 


 


 


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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