Major International Business Headlines Brief::: 29 July 2021

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Major International Business Headlines Brief::: 29 July 2021

 


 

 


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ü  Australia house prices soar at 'unsustainable' rate

ü  Uber slides over reports SoftBank selling 45 million shares

ü  International cruises from England to restart

ü  Netflix US cast and crew must be vaccinated to work

ü  Facebook warns growth set to slow 'significantly'

ü  US economic recovery 'making progress', says Fed

ü  Cannabis part of the future says tobacco giant

ü  Oculus recalls Quest 2 headset pads after skin rashes

ü  Fiscal stimulus, vaccines likely fueled U.S. economic growth in the
second quarter

ü  EXCLUSIVE Rights group urges U.S. customs to probe Goodyear Malaysia over
worker abuse accusation

ü  Credit Suisse's Archegos post mortem slams management; profit slumps

ü  Airbus ups forecasts after big H1 but cautious on virus

ü  China buyers re-emerge, patient Fed saps dollar

ü  Tesla-chaser Volkswagen lifts margin outlook again after record profit

ü  Nigeria: UK Launch Scheme to Drive Trade With Nigeria, Boost Jobs

ü  Nigeria: Addressing Unemployment in the Niger Delta

ü  Rwanda: Government Moves to Tame High Motorcycle Insurance Premiums

ü   

ü   

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Australia house prices soar at 'unsustainable' rate

House prices are soaring in Australia's state capitals as all-time low
interest rates and a lack of properties on the market drive up valuations.

 

Six cities have seen record prices for the third quarter in a row, according
to a report by real estate site Domain.

 

It also said Sydney, Canberra, Hobart and Darwin have seen property values
rise by over 20% in the last year.

 

Experts warn the increases are "unsustainable" as property becomes
unaffordable for many.

 

The Domain House Price Report highlighted a "perfect storm" of rock bottom
borrowing costs, a small number of properties on the market, strong demand,
and government stimulus money amid the pandemic.

 

Sydney, Australia's most populous city, saw median house prices reach a
record A$1,410,133 ($1.04m; £747,215) after rising by more than A$1,200 a
day over the last three months.

 

Meanwhile, Australia's capital Canberra saw the cost of a home soar by
almost 30% over the last 12 months, while prices in Hobart in Tasmania
jumped by more than 28% over the same period.

 

The survey also pointed out that it will make property even less affordable
for first-time buyers.

 

The report echoed many economists' views that the rises were unsustainable.

 

"This is a very unusual rate of growth. Unusual circumstances create
extraordinary outcomes," chief of research and economics Nicola Powell said.

 

Last month, official figures showed that Australia's economy had continued
its rapid rebound, to grow larger than it was before the Covid-19 pandemic.

 

Growth was spurred by a soaring demand for commodities around the world and
spending by consumers and businesses.

 

The sharp economic recovery came even as the country faces ongoing state
lockdowns to help slow the spread of the coronavirus.-BBC

 

 

 

Uber slides over reports SoftBank selling 45 million shares

Uber shares have fallen after reports technology investment firm SoftBank is
selling around a third of its stake in the US ride-hailing app.

 

According to one report SoftBank is offloading around $2bn (£1.44bn) worth
of shares to help cover what it has lost by betting on Chinese ride-hailing
firm Didi and other investments.

 

Didi's shares have slumped since their US market debut less than a month
ago.

 

That's after a series of actions by Chinese authorities spooked investors.

 

By selling 45 million shares in Uber the SoftBank Vision Fund will cut its
stake in the company by around a third.

 

The Japanese technology investment group has lost a total of around $4bn on
its stake in Chinese ride-hailing firm Didi, according to CNBC.

 

However, Reuters news agency reported that SoftBank's decision to cut its
Uber stake was unrelated to the slump in Didi's value and it just felt now
was a good time to take some profits.

 

In 2018, SoftBank poured around $7.6bn into Uber and added another $333m to
that investment the following year.

 

SoftBank is Didi's largest shareholder, with a stake of more than 20%.

 

Uber also owns an almost 13% of Didi after the US-based company sold its
operations in China to its local rival five years ago.

 

Chinese technology companies traded in the US, Hong Kong and mainland China
have seen their market value fall sharply in recent months as Beijing
tightens its grip on the industry.

 

Didi shares have fallen by almost 40% since they started trading on the New
York Stock Exchange on 30 June.

 

Just two days after that US market debut China's internet regulator ordered
app stores to stop offering its the Didi platform, saying it illegally
collected users' personal data.

 

Uber shares were down by as much as 5% in extended New York trading.

 

SoftBank did not immediately respond to a BBC request for comment.=-BBC

 

 

 

International cruises from England to restart

International cruises will be able to start again from England from 2 August
after a 16-month break.

 

People arriving at UK ports who have been fully vaccinated in the US and the
EU will also not have to quarantine, the UK government said.

 

It is part of a plan to relax isolation rules for US and EU arrivals in the
UK.

 

An industry body said travel agencies, hotels, tour guides, port operators
and other firms would benefit from cruises restarting.

 

Domestic cruises have been allowed to run from May but international cruises
have been prohibited.

 

The government said international cruise travel advice "will be amended to
encourage travellers to understand the risks associated with cruise travel
and take personal responsibility for their own safety abroad".

 

Under the new rules, from 04:00 BST on Monday of next week, 2 August, fully
vaccinated US and EU travellers arriving from amber countries will not need
to quarantine or take a test on day eight of their arrival.

 

However, they will still need to take a pre-departure test and a PCR test on
the second day after they arrive.

 

Arrivals will also still need to complete a passenger locator form.
Under-18s will be exempt from isolation, and some will not have to test,
depending on their age.

 

Separate rules will continue to apply for those arriving from France.
Travellers who have been in France in the 10 days before arriving in England
must quarantine for 10 days after arrival, and take a Covid test on or
before day two and on or after day eight, even if fully vaccinated.

 

The UK government said the overall rule changes would help to reunite family
and friends whose loved ones live abroad.

 

Transport Secretary Grant Shapps said the reopening of travel was "progress
we can all enjoy".

 

However, international cruises are unlikely to be available from Monday.

 

On its website, P&O Cruises said following their UK summer staycations, its
Britannia ship will begin planned western Mediterranean itineraries on 25
September, while its Iona vessel will launch on the same date.

 

It said due to the current traffic light system, a "number of itineraries
have had to be cancelled".

 

Cruises on Ventura have been paused until 3 October 2021, while cruises on
its Azura ship have been halted up until 10 December 2021. Some others have
been delayed until 2022.

 

Cunard's first UK cruise will sail on 13 August with international cruises
beginning in October.

 

Both firms are part of US giant Carnival cruises, which is one of the
world's biggest cruise companies.

 

The hugely profitable business was brought to its knees by Covid after
regulators around the world stopped ships from sailing to try and limit
outbreaks.

 

There were outbreaks on various cruise liners, including some owned by
Carnival.

 

Richard Ballantyne, chief executive at the British Ports Association (BPA),
said UK domestic cruises had demonstrated how ports and cruise lines could
"ensure the health and safety of passengers, crew and destinations".

 

He said the organisation is "hopeful that the devolved administrations will
follow suit shortly" in allowing international cruises.

 

The British Ports Association, which represents more than 400 ports,
terminal operators and port facilities, said it was "disappointed" that
arrivals from France still need to quarantine on arrival into England for
ten days.

 

The global cruise line industry has been one of the hardest hit by the
coronavirus pandemic.

 

In 2019, it contributed more than $154bn (£110bn) to the global economy,
according to the trade body Cruise Lines International Association, before
the shops were all anchored due to the lockdown.

 

Carnival, which made a profit of $3bn in 2019, reported a loss of $10bn in
2020 after its revenues plunged 73%.

 

There is an increased risk of respiratory and gastrointestinal diseases on
ships due to passengers and crew mixing from different parts of the world,
according to experts.

 

In 2020 there were major outbreaks on cruise ships, including the
Carnival-owned Diamond Princess.

 

According to the most recent statistics on data site Worldometer, 22
countries have still had fewer Covid cases than were found on the Diamond
Princess, and 27 countries have had fewer than its 13 deaths.-BBC

 

 

 

Netflix US cast and crew must be vaccinated to work

Netflix is set to make Covid vaccinations mandatory for key cast and crew on
US TV and film productions.

 

According to reports, the US streaming company will require that "zone A"
personnel - actors and crew in close contact with them - must get the jab.

 

Other firms such as Google have said workers must get vaccinated before
returning to the office.

 

The policy will begin at its US campuses and then be rolled out globally for
its 144,000 employees.

 

Netflix has implemented the move after new standards were recently agreed
between Hollywood unions and studios that would allow companies to implement
mandatory vaccination policies for key cast members and crew.

 

However, the actor Sean Penn wants the policy extended for all members of
production, not just those classed as "zone A".

 

He recently said that he would not return to work on the drama Gaslit, which
is backed by the studio NBC Universal, unless all cast and crew receive the
jab.

 

Netflix is making the move after the US Disease Control and Prevention
announced earlier this week that masks will once again have to be worn
indoors even by people who have been fully vaccinated.

 

It follows a spike in Covid cases due to the spread of the highly contagious
Delta variant.

 

Google chief executive Sundar Pichai said in a blog post that "anyone coming
to work on our campuses will need to be vaccinated".

 

Bloomsbury staff must be vaccinated before office return

Covid: How do you feel about going back to the office?

How the policy is implemented "will vary according to local conditions and
regulations, and will not apply until vaccines are widely available in your
area", he said.

 

In addition, Google will extend the full reopening of its global campuses
from 1 September to 18 October due to a spike in cases caused by the Delta
variant of coronavirus.

 

People in special circumstances can apply to work from home until the end of
2021.

 

However, any Google employee can apply to work from home permanently if they
choose, and transfer offices.

 

Google expects that over time in any given week, 60% of employees will work
in the office for a few days each week, one-fifth will be working in new
office locations and another fifth will be working from home.

 

Many firms are weighing up the pros and cons of letting their workforce
continue to work from home.

 

Others have also specified that workers coming into the office need to be
vaccinated.

 

In June, Harry Potter publisher Bloomsbury said staff must have vaccinations
ahead of their return to the workplace.

 

"The simple fact is that this virus is still extremely dangerous," it said.

 

In the US, JP Morgan said in June that it would instruct staff to log their
vaccination status on an internal web portal, with fully-jabbed employees
being allowed to discard face masks at work.-BBC

 

 

 

Facebook warns growth set to slow 'significantly'

Facebook has warned that it expects revenue growth to slow down
"significantly" in the second half of 2021.

 

The tech giant saw revenue rise to $29bn (£21bn) in the three months to 30
June, up from $18.69bn last year.

 

But it said that sales would slow "as we lap periods of increasingly strong
growth".

 

It had benefitted from firms targeting consumers with online ads during
lockdown.

 

Its shares fell as much as 5% in after-hours trading.

 

Its founder and chief executive Mark Zuckerberg said: "We had a strong
quarter as we continue to help businesses grow and people stay connected."

 

The number of people using the social network monthly rose to 2.9 billion.

 

And although its profits doubled to $10.4bn in the second quarter, the
company cautioned that it expects "year-over-year total revenue growth rates
to decelerate significantly on a sequential basis."

 

The California-based company also pointed towards a number of other
challenges it would face in the coming months, such as new privacy controls
that Apple introduced in April.

 

They are aimed at limiting advertisers from tracking iPhone users without
their knowledge, which Facebook said was likely to have an impact on its
income, particularly between July and October, and it has factored into its
projections for how it will perform.

 

If consumers opt out of being tracked, it makes it harder for firms such as
Facebook to target adverts, which make up a big chunk of their revenue.

 

Paolo Pescatore, an analyst at PP Foresight, said: "It is apparent that the
Facebook user base is skewed to iOS users and will continue to be negatively
impacted from the iOS change.

 

Other technology firms "have seemed to navigate this challenge but all will
see a negative impact longer-term" he said.

 

Facebook also faced several investigations over its handling of users'
personal information, both in the UK and Ireland and overseas.

 

In April, for example, the Irish Data Protection Commission launched an
investigation into a data leak in which the details of hundreds of millions
of Facebook users were published online.

 

Facebook said it was "co-operating fully" with the relevant authorities.

 

Despite concerns over privacy, Mark Zuckerberg recently laid out his plans
to transform Facebook from a social media network into a "metaverse company"
in the next five years.

 

A metaverse is an online world where people can game, work and communicate
in a virtual environment, often using virtual reality (VR) headsets.

 

The Facebook boss described it as "an embodied internet where instead of
just viewing content - you are in it".

 

He told tech publication The Verge that people shouldn't live through
"small, glowing rectangles".

 

"That's not really how people are made to interact," he said, speaking of
reliance on mobile phones.

 

Facebook has invested heavily in virtual reality, spending $2bn (£1.46bn) on
acquiring Oculus, which develops its VR products.

 

In its update to investors on Wednesday, it said it expects spending on
investments such as the development of new products as well as on data
centres and servers to total up to $21bn in 2021.

 

Silicon Valley giants are facing increased scrutiny at the moment as profits
rise and their reach expands.

 

In the UK, a regulator called the Digital Markets Unit (DMU) has just
started work on curbing tech companies' dominance by creating new codes of
conduct for them.

 

Business Secretary Kwasi Kwarteng said that the new unit, which will be
based inside the Competition and Markets Authority, will be "unashamedly
pro-competition".

 

And in the US, President Biden signed an executive order earlier in July in
a bid to promote further competition.

 

It suggested that problems have arisen because of large tech firms
collecting too much personal data, buying up prospective competitors and
competing unfairly with small businesses.

 

It included several recommendations such as greater scrutiny of mergers in
the tech sector and barring unfair methods of competition on internet
marketplaces.

 

Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, said of the
recent Apple update: "This isn't the first time Facebook's stared down the
barrel of a regulatory or privacy problem, and it won't be the last.

 

"No-one can say in good faith that Facebook faces a smooth road from here,
but it's reasonable to believe Facebook's long-term investment case remains
intact."-BBC

 

 

 

US economic recovery 'making progress', says Fed

The US central bank has said that the economy is making progress due to
widespread vaccinations.

 

The Federal Reserve kept interest rates on hold near zero, saying that
inflation largely reflected factors that would pass in time.

 

While jobs growth and the economy had strengthened, "risks to the economic
outlook remain", it said.

 

The central bank will continue to monitor economic progress before easing
pandemic support.

 

The announcement, following the end of its two-day meeting, comes amid
concerns that rising prices could prompt the Fed to push up interest rates,
increasing the cost of borrowing for businesses and consumers.

 

Inflation, which measures the rate at which the prices for goods and
services increase, continued to surge in the US in June as the cost of
energy and used cars in particular increased.

 

 

Consumer prices jumped 5.4% in the 12 months to the end of June, up from 5%
the previous month.

 

It marked the biggest 12-month increase since August 2008, according to the
US Labor Department.

 

The Fed's chairman Jerome Powell has insisted, however, that cost increases
would be "transitory" due to prices ticking up in areas associated with the
economy reopening such as travel or hospitality, as well as supply
bottlenecks.

 

What is inflation?

Inflation is the rate at which the prices for goods and services increase.

 

It's one of the key measures of financial well-being because it affects what
consumers can buy for their money. If there is inflation, money doesn't go
as far.

 

It's expressed as a percentage increase or decrease in prices over time. For
example, if the inflation rate for the cost of a litre of petrol is 2% a
year, motorists need to spend 2% more at the pump than 12 months earlier to
get the same amount.

 

And if wages don't keep up with inflation, purchasing power and the standard
of living falls.

 

Read more about inflation - and why it matters - here.

 

The US central bank reiterated that it would not stop providing support
until it makes "substantial further progress" towards its targets of
returning to full employment and inflation at 2%.

 

But the statement it issued on Wednesday suggested that these goals were on
track.

 

The Federal Open Market Committee (FOMC) said: "The economy has made
progress toward these goals, and the committee will continue to assess
progress in coming meetings."

 

Its support includes continuing to buy bonds - a type of investment where
investors lend money to the government - at a rate of $120bn (£85.6bn) per
month.

 

The central bank said the support means that households and businesses can
access credit more easily during a time of uncertainty.

 

Richard Flynn, UK director at Charles Schwab, said: "Strong data may suggest
tighter policy is forthcoming."

 

But Mr Powell said that the labour market still has "a ways to go" in terms
of a full recovery.

 

"We're not there. And we see ourselves as having some ground to cover to get
there," he said.

 

The Fed's chief had previously said that maintaining stimulus was important
because the "economic downturn has not fallen equally on all Americans, and
those least able to shoulder the burden have been hardest hit".

 

In the US, employment is still about 7 million jobs short of where it was
before the start of the coronavirus crisis last year, while additional
unemployment support is being wound down and a national rent moratorium is
coming to an end on Saturday.

 

The Fed also cautioned that its actions would depend on the path of the
pandemic - just one day after the Centers for Disease Control and Prevention
(CDC) advised that Americans living in areas seeing new surges of Covid-19
should wear masks indoors again to prevent the spread of the Delta variant.

 

There were 89,418 new cases on Monday in the US, Johns Hopkins University
reported.

 

 

 

Cannabis part of the future says tobacco giant

The UK's largest tobacco firm says it sees cannabis as part of its future as
it tries to move away from selling traditional cigarettes.

 

British American Tobacco said it wanted to "accelerate" its transformation
by reducing the health impact of its products.

 

In March, BAT took a stake in Canadian medical cannabis maker Organigram.

 

It also signed a deal to research a new range of adult cannabis products,
initially focused on cannabidiol (CBD).

 

"As we think about our portfolio for the future, certainly beyond nicotine
products are interesting for us as another wave of future growth," BAT
executive Kingsley Wheaton told Radio 4's Today Programme.

 

Mr Wheaton, BAT's chief marketing officer, said it saw cannabis related
products as part of its future growth. The firm is currently trialling a CBD
vape product in Manchester.

 

"I think [CBD vaping] is part of the future, but the present challenge is
reduced harm in tobacco and nicotine alternatives, encouraging people to
switch."

 

Marlboro maker could stop selling cigarettes in UK

Releasing its half year results to the end of June, the tobacco giant
reported an 8.1% rise in revenues to £12.18bn.

 

It said more than a third of its UK revenues now come from vaping brands
such as Vuse, Velo and glo.

 

The tobacco giant also saw its fastest gain in new customers, with users of
non-combustible products - such as vapes - jumping 2.6 million to 16.1
million.

 

'The balance has decisively shifted'

Big tobacco companies have tried to ride two horses in their communications
to investors over the past decade. They have drawn attention to their
efforts to get away from nasty cigarettes, while at the same time pointing
to the big dividend payments the sales of those cigarettes support.

 

That balance has now decisively shifted - in the companies' communications
anyway - to the former. First Philip Morris International and now BAT have
gone all out to stress their move into new types of less harmful products -
vaping, heated rather than combusted tobacco, and, in BAT's case, cannabis.

 

Progress is being made. BAT's results for the six months to the end of June
show that sales of "new category" products grew by half to £942m. That is
still a fraction of its total £12bn in revenue.

 

Cigarette volumes - BAT sold 316 billion cigarettes in the six-month period
- actually grew slightly thanks to a recovery in demand in emerging markets.

 

Even though traditional tobacco remains by far its biggest business, the
company says it is committed to change, pledging that "ESG (environmental,
social and governance issues) is at the core of our strategy."

 

It is hardly surprising that BAT wants to drape itself in the ESG flag. A
recent piece of research by the accountancy firm PWC noted the rapid influx
of shareholder money into ESG funds, ones that will only invest in companies
with the right ethical credentials. It thinks that their combined value will
be greater than all other types of funds within three years.

 

BAT's share price has roughly halved in the past four years, from £55 to
£27. The ability to tempt some of those ESG funds back into owning BAT
shares might to do something to restore that flagging price.

 

Despite its commitment to healthier choices, BAT said sales of its
cigarettes recovered in some developing nations following the end of
coronavirus lockdowns when sales were banned in some countries.

 

Sales of brands like Dunhill, Kent, Lucky Strike and Rothmans rose in the
first half of the year in countries such as Brazil, Turkey and Pakistan.

 

It said overall revenue from its combustibles division - cigarettes and
heated tobacco products - fell 3% to £10.5bn.

 

William Ryder, an equity analyst at Hargreaves Lansdown, said that there is
still some way to go if the tobacco giant is to meet its target of £5bn in
revenues from nicotine alternatives by 2025.

 

"For now... BAT is still dependent on cigarettes... Traditional tobacco
products still pay the dividend, and will do for some time," he said.

 

 

 

Oculus recalls Quest 2 headset pads after skin rashes

Virtual-reality headset-maker Oculus is issuing a recall for the foam
padding in its Quest 2 headset, warning it can cause skin irritation.

 

Facebook-owned Oculus said only a "very small percentage" of users were
experiencing the problem.

 

But it is offering a free cover - made of silicone - to all Quest 2 owners.

 

Facebook also announced it was "pausing" Quest 2 sales and from 24 August
all Quest 2 headsets would come with the new silicone cover.

 

The revamped headset would also have twice the internal storage, for the
same price.

 

The problem with skin irritation was widely known among VR enthusiasts
online and Facebook has previously operated a replacement programme for the
small number of people affected.

 

But this new "voluntary recall", following discussions with US and Canadian
safety regulators, is global in scale, with Facebook emailing many of its
Oculus customers.

 

The US Consumer Product Safety Commission said it had received 5,716 reports
of irritation "including rashes, swelling, burning, itching, hives and
bumps".

 

But only 45 incidents had needed medical attention.

 

And those numbers were out of an estimated four million headsets sold in the
US.

 

Facebook's VR and AR teams head Andrew Bosworth said: "While the rate of
reports is small and the majority of reported cases are minor, we're
committed to ensuring our products are safe and comfortable for everyone who
uses them."

 

Users can order the replacement "facial interface" on the Oculus website.

 

But many have already bought a silicone cover from online retailers.

 

There is also a market for premium after-market replacements, such as
thicker, more comfortable foam coated in water-resistant leather or slightly
redesigned fittings that aim to improve ventilation or light leaking in from
the outside world.

 

 

Oculus is widely thought to have made the Quest 2 headset at a loss, or
close to it, as it is priced far lower than many of its competitors, who
ship devices with more elaborate straps and accessories.

 

That strategy has seen its share of the VR gaming market explode and the
device sold out in many places in the run-up to Christmas.

 

And last week, Facebook boss Mark Zuckerberg doubled down on his vision of a
future "metaverse" where people spend far more time in VR - "an embodied
internet where instead of just viewing content - you are in it".-BBC

 

 

 

Fiscal stimulus, vaccines likely fueled U.S. economic growth in the second
quarter

(Reuters) - The U.S. economy likely gained steam in the second quarter, with
the pace of growth probably the second fastest in 38 years, as massive
government aid and vaccinations against COVID-19 fueled spending on
travel-related services.

 

The anticipated acceleration in gross domestic product last quarter would
lift the level of GDP above its peak in the fourth quarter of 2019. Even
with the second quarter likely marking the peak in growth this cycle, the
economic expansion was expected to remain solid for the remainder of this
year.

 

A resurgence in COVID-19 infections, driven by the Delta variant of the
coronavirus, however, poses a risk to the outlook. Higher inflation, if
sustained, as well as ongoing supply chain disruptions could also slow the
economy. The Commerce Department will publish its snapshot of second-quarter
GDP growth on Thursday at 8:30 a.m EDT (1230 GMT).

 

"Consumers have plenty of income and wealth ammunition to support consumer
spending, while business inventories remain lean and restocking efforts are
poised to support business investment and overall GDP growth substantially
in the second half of the year," said Sam Bullard, a senior economist at
Wells Fargo in Charlotte, North Carolina.

 

The Federal Reserve on Wednesday kept its overnight benchmark interest rate
near zero and left its bond-buying program unchanged. Fed Chair Jerome
Powell told reporters that the pandemic's economic effects continued to
diminish, but risks to the outlook remain. read more

 

The economy likely grew at an 8.5% annualized rate last quarter, according
to a Reuters survey of economists. That would be the second-fastest GDP
growth pace since the second quarter of 1983. The economy grew at a 6.4%
rate in the first quarter, but that is subject to revision.

 

With the second-quarter estimate, the government will publish revisions to
GDP data. Given that this is not a comprehensive benchmark revision,
economists expect only modest changes to previously published estimates.

 

The National Bureau of Economic Research, the arbiter of U.S. recessions,
declared last week that the pandemic downturn, which started in February
2020, ended in April 2020.

 

Economists expect growth of around 7% this year, which would be the
strongest performance since 1984. The International Monetary Fund on Tuesday
boosted its growth forecasts for the United States to 7.0% in 2021 and 4.9%
in 2022, up 0.6 and 1.4 percentage points respectively, from its forecasts
in April.

 

President Joe Biden's administration provided $1.9 trillion in pandemic
relief in March, sending one-time $1,400 checks to qualified households and
extending a $300 unemployment subsidy through early September. That brought
the amount of government aid to nearly $6 trillion since the pandemic
started in the United States in March 2020.

 

STRONG CONSUMER SPENDING

 

Nearly half of the population has been vaccinated against COVID-19, allowing
Americans to travel, frequent restaurants, attend sporting events and engage
in other services-related activities that were curbed early in the pandemic.

 

The pick-up in services likely boosted consumer spending in the second
quarter, with double-digit growth anticipated in the segment that accounts
for more than two-thirds of the U.S. economy. While spending on goods
remained strong, the pace likely slowed from earlier in the pandemic, when
Americans were cooped up at home.

 

Some of the slowdown in goods spending reflects shortages of motor vehicles
and other appliances, whose production has been hampered by tight supplies
of semiconductors across the globe. Higher prices, with inflation above the
Fed's 2% target, could also be causing some to postpone purchases.

 

Though the fiscal boost is fading and COVID-19 cases are rising in states
with lower vaccination rates, consumer spending will likely continue to
grow.

 

"Those states also tend to be the ones most resistant to public health
measures to combat the pandemic, such as mask mandates and limits on indoor
activities," said Gus Faucher, chief economist at PNC Financial in
Pittsburgh, Pennsylvania.

 

"Thus, the types of widespread restrictions on economic activity seen
earlier in the pandemic, and then again in late 2020 and early 2021, are
unlikely to be widely reimposed, which will greatly limit the economic
fallout from the Delta variant and increasing coronavirus cases."

 

Households accumulated at least $2 trillion in excess savings during the
pandemic. Record high stock market prices and accelerating home prices are
boosting household wealth. Wages are also rising as companies compete for
scarce workers.

 

A separate report from the Labor Department on Thursday is likely to show
the labor market recovery gaining traction. According to a Reuters survey,
380,000 people likely filed new claims for unemployment benefits last week.

 

Initial claims rose to a two-month high in the week ended July 17, but
economists blamed the jump on difficulties stripping out seasonal
fluctuations from the data.

 

"The likely temporary rise in initial claims could partly be related to
seasonal adjustment issues or a larger reduction in employment in the auto
sector around the usual break in summer auto production given supply issues
facing the industry," said Veronica Clark, an economist at Citigroup in New
York.

 

The economy likely received a further boost from business investment,
especially on equipment, as companies ramp up production, though spending on
nonresidential structures such as mining exploration, shafts and wells
probably declined for a seventh straight quarter.

 

Trade was likely a drag on GDP growth for a fourth straight quarter as
strong demand sucked in imports. Expensive building materials and soaring
house prices likely weighed on the housing market in the second quarter.

 

Inventories, which were sharply drawn down in the first quarter, are a wild
card. Supply constraints have made it difficult for businesses to replenish
stocks. An improvement is, however, expected in the second half as spending
shifts further to services from goods.

 

The Thomson Reuters Trust Principles.

 

 

 

EXCLUSIVE Rights group urges U.S. customs to probe Goodyear Malaysia over
worker abuse accusation

(Reuters) - Rights group Liberty Shared has asked United States customs
authorities to investigate the Malaysian operations of American tyre maker
Goodyear Tire & Rubber Co (GT.O) over accusations of abusive labour
practices, the group told Reuters.

 

The Hong Kong-based anti-trafficking group said its June petition to U.S.
customs, based on lawsuits and police reports by migrant workers, was
probably the first such effort against a subsidiary of an American-owned
company in southeast Asia.

 

"The conditions and treatment they have endured seem to satisfy the
International Labour Organisation's forced labour indicators," the group's
managing director, Duncan Jepson, said in its first comments to media on the
issue.

 

Goodyear, one of the world's largest tyre makers, said it was not aware of
any petition on the matter, while the U.N. agency did not immediately
respond to a request for comment.

 

Malaysia, which employs millions of foreign workers, has faced growing
accusations of exploitative labour practices, and received the worst ranking
this month in an annual U.S. report on human trafficking. read more

 

Similar petitions to U.S. customs, including one last year by Liberty Shared
regarding Malaysian palm oil producer Sime Darby Plantation (SIPL.KL), have
led the United States to block imports over suspected use of forced labour.

 

Goodyear's Malaysian unit was asked by an industrial court to pay back wages
to migrant workers and comply with a collective pact, after dozens of
foreign workers sued over unpaid wages and unlawful overtime, Reuters
reported in May. read more

 

It has challenged two verdicts in the High Court.

 

In its response to the rights group's comments, Goodyear added that it had
strong policies to protect human rights.

 

"We take seriously any allegations of improper behaviour and are committed
to ensuring that our business practices and those of our associates,
operations and supply chain adhere to all applicable legal requirements and
the requirements in our policies," a spokesperson said in an email.

 

In the past, the company has declined to comment on the workers'
accusations, citing the court process.

 

Malaysia's largest fund manager, Permodalan Nasional Berhad, which owns 49%
of Goodyear Malaysia, did not immediately respond to a request for comment.

 

The U.S. Customs and Border Protection (CBP) said it does not comment on
whether specific entities are being investigated.

 

Jepson said he understood U.S. customs was pursuing the petition he filed.
In an email, the CBP told him it had received the petition on forced labour
conditions and was reviewing the information. Reuters reviewed the email.

 

The July 19 email does not name Goodyear Malaysia, but Jepson said the
petition was only about the company, based on civil cases and police reports
filed by its workers.

 

Last year, after Liberty Shared accused Sime Darby of forced and child
labour, the CBP blocked its products from entering the United States. read
more

 

Sime Darby has appointed auditors to evaluate its practices and said it
would engage with the CBP to address the concerns.

 

The Thomson Reuters Trust Principles.

 

 

 

Credit Suisse's Archegos post mortem slams management; profit slumps

(Reuters) - A "lackadaisical" attitude towards risk and "a lack of
accountability" were to blame for Credit Suisse's (CSGN.S) $5.5 billion loss
on investment fund Archegos, according to a review published on Thursday, as
the bank reported a near-80% fall in second-quarter profit.

 

The collapse of Archegos rocked Wall Street in March as its highly leveraged
stock bets went sour, sending banks scrambling for the exit. In a $10
billion bloodbath, Credit Suisse was the biggest loser, a devastating double
whammy for a bank already reeling from the insolvency of a key associate,
Greensill Capital.

 

Archegos is still hitting Credit Suisse's bottom line. Net profit of 253
million Swiss francs ($278.45 million) missed average forecasts for 334
million Swiss francs as it absorbed an additional $653 million loss from the
fund's collapse and amid a general slump in trading.

 

In a review unveiled along with the results on Thursday, law firm Paul
Weiss, Rifkind, Wharton & Garrisson gave a damning assessment of the bank's
risk management practices, though it did add there was no evidence of
fraudulent or illegal activity.

 

"The Archegos-related losses sustained by Credit Suisse (CS) are the result
of a fundamental failure of management and controls in CS's Investment Bank
and, specifically, in its Prime Services business. The business was focused
on maximizing short-term profits and failed to rein in and, indeed, enabled
Archegos's voracious risk-taking," the 165-page review said.

 

The bank said in response that it would "put risk management at the heart of
our decision-making processes".

 

Shares of the bank were down 3.7% by 0745 GMT, taking their losses to 22% so
far this year. The European bank index (.SX7P) rose 1.0% and is up about 23%
year to date.

 

Analysts had expected a nearly 600 million franc hole caused by more losses
at Archegos and further weakness in the bank's trading and advisory
businesses to bring second-quarter net profit down to a quarter of its value
a year ago.

 

Excluding Archegos and other significant items, Credit Suisse said pre-tax
income would have dropped 11%.

 

Credit Suisse said action has been taken against 23 staff over Archegos,
with nine fired and a total of $70 million in monetary penalties taken from
all of them.

 

Under new Chairman Antonio Horta-Osorio, it is trying to turn the page after
a swathe of investigations, executive changes, and divisional reshuffles.
Management is promising to unveil a strategic overhaul by year-end.

 

An exodus of senior dealmakers and traders from its investment bank, and
plans to reduce risk in its prime brokerage unit, have made the changes
especially felt within that division. read more

 

The bank said on Thursday that a provisional capital buffer for Archegos has
been removed, but a buffer for Greensill remained. It said it was in
advanced talks with some creditors to recover some of the $10 billion of
client investments linked to Greensill.

 

It also said it had been accruing for dividends during the quarter but the
size of the payout had yet to be determined.

 

LEADING WEALTH MANAGER WITH A CULTURE PROBLEM

 

Investors and analysts have been waiting to see whether recent troubles at
Credit Suisse, which have also left clients in its asset management business
directly exposed to potential Greensill losses, have affected prized
relationships with the ultra-wealthy.

 

Credit Suisse on Thursday reported 7.3 billion francs in net asset outflows
from its wealth management businesses, an indicator of a loss in business
from rich clients, for the second quarter.

 

Chief Financial Officer David Mathers told journalists on a call that 4.2
billion francs of the outflows were related to its efforts to limit its risk
in Asia, and the outflows were

 

concentrated early in the quarter.

 

"Operationally, CS has been able to meet expectations on the whole," ZKB
analysts said in a note, adding the headline profit miss was related largely
to legal and restructuring provisions.

 

"However, net new money is showing signs of slowing down with outflows of
4.7 billion francs," the analysts said, referring to the group-wide figure
which includes flows for businesses outside wealth management.

 

Earlier this week, Credit Suisse appointed Goldman Sachs (GS.N) partner
David Wildermuth as its new chief risk officer, as it seeks to turn the
corner on the Archegos and Greensill scandals. read more

 

REVENUES FALL

 

A 41% fall in investment banking revenues showed the broader impact of the
scandals to be slightly more pronounced than analysts anticipated, as its
capital markets business posted a nearly 10% decline on an un-adjusted basis
and its advisory revenues fell 37% "due to timing of deal closings". That
combined with a $653 million Archegos hit pushed investment banking to a
pre-tax loss.

 

On the trading side, adjusted revenues from equity sales and trading posted
a 17% decline excluding Archegos. Fixed income sales and trading fell 33%.

 

Trading revenues also fell at major U.S. and European banks in the second
quarter compared to 2020 when unprecedented market volatility during the
early months of the coronavirus pandemic helped drive record volumes.

 

Credit Suisse has said it wants to pare back its prime brokerage unit, which
conducts business with hedge funds and was responsible for the Archegos
ties.

 

The downcast earnings marked a notable contrast to the sunny outlook
presented on the same day by Lloyds (LLOY.L), which until April had been run
by Credit Suisse's new chairman. read more

 

Nearer rivals, including UBS (UBSG.S) and Julius Baer (BAER.S), have also
put Credit Suisse's misfortune in stark relief, as frothy markets and high
client activity levels have continued to help private bankers generate
higher earnings off the rich. read more

 

($1 = 0.9086 Swiss francs)

 

The Thomson Reuters Trust Principles.

 

 

 

Airbus ups forecasts after big H1 but cautious on virus

(Reuters) - Europe's Airbus (AIR.PA) doubled its full-year profit forecast
and raised the outlook for jet deliveries after posting better-than-expected
half-year results, pushing its shares to the highest level since the start
of the coronavirus crisis.

 

The world's largest planemaker said it was benefiting from the beginnings of
a recovery in air travel demand, but cautioned that uneven global
vaccination rates and the spreading Delta variant of COVID-19 left
uncertainty over the recovery.

 

Airbus said it expected to deliver 600 aircraft in 2021, up from a previous
target of at least 566, and doubled its forecast for operating income to 4
billion euros ($4.7 billion) while predicting 2 billion euros of free
cashflow.

 

Reuters reported on Wednesday that Airbus would deliver more than 600 jets
this year after negotiating workarounds with cash-strapped airlines,
including deals that allow some to delay accounting for new planes on their
balance sheets. read more

 

"COVID-19 is not over," Chief Executive Guillaume Faury told reporters on
Thursday.

 

"Levels of vaccinations are very diverse around the world and we cannot
exclude that after the Delta variant there will be another one, so we
believe we have to remain very prudent," he said, adding: "It is going to a
bumpy road in terms of recovery."

 

Even so, shares in the Paris-listed heavyweight rose as much as 4.9%,
helping to propel European shares to record highs.

 

Stifel analyst Harry Breach said the stronger outlook reflected a growing
share of high-margin A321neo jets in deliveries as well as the depth of cost
cuts at Airbus, which is completing pandemic-related plans to reduce up to
15,000 jobs.

 

Led by its commercial aerospace and helicopter divisions, Airbus swung to an
operating profit of 2.01 billion euros in the second quarter, compared with
a loss of 1.23 billion a year earlier, as revenue rose 70% to 14.18 billion
euros.

 

For the first half, Airbus posted operating earnings of 2.70 billion euros,
eclipsing its previous full-year goal.

 

Analysts were on average expecting 1.59 billion euros of operating profit on
revenue of 14 billion euros in the second quarter, according to a
company-compiled consensus.

 

Its rival Boeing (BA.N) on Wednesday posted its first quarterly profit in
almost two years as revived domestic travel fuelled 737 MAX deliveries. Its
shares rose 5%. read more

 

Both planemakers face concerns about the slow recovery of long-haul travel.
A pickup is badly needed to revive demand for wide-bodied jets that was
sagging even before the crisis.

 

Airbus announced the launch of an A350 freighter in a bid to break Boeing's
longstanding dominance of a lucrative but volatile part of the jet market,
which has benefited from growth in e-commerce during the pandemic. read more

 

It has not yet secured orders for the new plane, which it expects to deliver
to the first customer in 2025.

 

($1 = 0.8435 euros)

 

The Thomson Reuters Trust Principles.

 

 

 

China buyers re-emerge, patient Fed saps dollar

(Reuters) - World share markets were back on the climb on Thursday as the
U.S. Federal Reserve signalled it was in no rush to taper stimulus and
reassurances from Beijing saw beaten-up Chinese stocks leap off the canvas.

 

There was also some promising news on the long-awaited U.S. infrastructure
bill as the Senate voted overnight to move ahead on the $1.2 trillion deal,
as well as it being a packed day of earnings and economic data.

 

The rebound in China's markets included a near 10% bounce in tech giant
Tencent - its second biggest in nearly a decade - after reports that
regulators had called banks overnight to ease concerns about the recent
crackdown on sectors like tech and education, and on overseas listings. read
more

 

"Beijing is working hard to stem the growing concerns surrounding its
regulatory crackdown," said RBC's head of Asia FX strategy, Alvin Tan

 

Gains pushed blue-chip shares (.CSI300) up 1.6%, although they were still
down 5% for the week, while the Shanghai Composite Index (.SSEC) added 1.2%.

 

It meant European stocks hit fresh all-time highs though as strong earnings
from Total and Shell, Airbus and others offset a near 5% drop by Swiss bank
Credit Suisse (CSGN.S), which reported a near 80% profit plunge in the wake
of Archegos and Greensill calamities. read more

 

MSCI's broadest index of emerging market shares (.MSCIEF) bounced 2%, having
slid to its lowest since early December on Wednesday. Japan's Nikkei (.N225)
edged up 0.7%, while South Korea (.KS11) finished 0.2%.

 

S&P 500 futures were up a more subdued 0.1%. Nasdaq futures dipped 0.1%,
perhaps weighed by a retreat in Facebook stock.

 

Facebook (FB.O) had shed 3.5% in the aftermarket moves on Wednesday after it
had warned that its revenue growth would "decelerate significantly", even as
it reported strong ad sales. read more

 

Markets had see-sawed overnight when the Federal Reserve policy statement
said progress had been made toward its economic goals, seeming to bring
nearer the day when it might start tapering its massive asset-buying
campaign.

 

Peak growth was also a nagging theme. Data due later on Thursday is expected
to show the U.S. economy likely grew at the fastest pace in 38 years in the
last quarter as government aid and vaccinations fuelled spending. read more

 

However, Fed Chair Jerome Powell took a dovish turn by emphasising that they
were "some ways away" from substantial progress on jobs that is needed to
start tapering. read more

 

JPMorgan economist Michael Feroli said: "there are three more (U.S.) job
reports before the November meeting, and two more between the November and
December meetings".

 

"We continue to expect a December announcement, though we see a risk it
could occur in November."

 

While the next Fed meeting is not until late September, the annual Jackson
Hole policy symposium is on Aug. 26-28, meaning the tapering talk won't be
taking a break.

 

For bonds, the net result was that U.S. 10-year yields were steady at 1.24%,
not far from recent five-month lows of 1.128%.

 

"My view is that the Fed policy rate will have a 1% handle" longer term,
said PineBridge's Global Head of Credit and Fixed Income, Steven Oh. "I
don't see an outcome where we see runaway inflation by any stretch of the
imagination".

 

The pattern was the same for the dollar, which edged up on the FOMC
statement only to flag on Powell's remarks and then dribble lower in both
Asia and European trading.

 

That left the euro up at $1.1871 , and some way from its recent four-month
trough of $1.1750.

 

The dollar faded to 109.75 yen , from a top of 110.58 early in the week. All
of which saw the dollar index dip to 92.032 , off its recent peak of 93.194.

 

In commodity markets, China-sensitive copper rose 1.25% and gold nudged up
to $1,817 an ounce but remains in the $30 range of the past 17 sessions.

 

Oil prices also firmed after data showed U.S. crude inventories fell to
pre-pandemic levels, bringing the market's focus back to tight supplies
rather than rising COVID-19 infections.

 

Brent was last up 73 cents at $75.47 a barrel, while U.S. crude added 80
cents to $73.21.

 

The Thomson Reuters Trust Principles.

 

 

 

Tesla-chaser Volkswagen lifts margin outlook again after record profit

(Reuters) - Europe's largest carmaker Volkswagen (VOWG_p.DE) raised its
profit margin target on Thursday for the second time in less than three
months, pointing to record earnings in the first half of 2021 that topped
even pre-pandemic levels.

 

Spurred by Chief Executive Herbert Diess' vision to overtake Tesla (TSLA.O)
as the world's top electric vehicle (EV) player, Volkswagen has unveiled a
string of targets and deals this year to meet that goal. read more

 

They include a bid for Europcar (EUCAR.PA) on Wednesday, valuing the car
rental firm at 2.9 billion euros ($3.4 billion), in a bet on mobility
services which Volkswagen sees as a major source of future profits. read
more

 

"Yes, we did buy a car rental company, but it won't be a car rental company
probably in 5 to 10 years' time. It can be a big mobility platform," Diess
told journalists.

 

The 62-year old said he hadn't finished.

 

"Our electric offensive is picking up momentum and we will keep on
increasing its pace in the months to come," he said.

 

Volkswagen said it now expected an operating return on sales of 6.0-7.5%
this year, up from 5.5-7% previously, and nudged up its forecast for net
cash flow at its automotive division, which is now expected to be much
stronger than in 2020.

 

First-half operating profit before special items reached 11.4 billion euros,
above the previous record of 10 billion euros achieved in 2019, before the
coronavirus pandemic wreaked havoc on the global economy.

 

The performance was driven in part by strong demand for high-margin luxury
Porsches and Audis.

 

Porsche SE (PSHG_p.DE), Volkswagen's largest shareholder with a 31.4% stake,
also raised it financial outlook following the carmaker's results,
forecasting profit after tax of 3.4-4.9 billion euros in 2021.

 

Shares in Volkswagen, up a third so far this year, were flat at 0901 GMT.

 

The global car sector has been hit by a shortage of crucial semiconductors,
with several rivals, including Daimler (DAIGn.DE), BMW (BMWG.DE) and GM
(GM.N), adjusting or halting production. Volkswagen accounted for that by
trimming its forecast for deliveries to customers.

 

"The risk of bottlenecks and disruption in the supply of semiconductor
components has intensified throughout the industry," it said.

 

It now expects deliveries to be up "noticeably" in 2021 from the 9.3 million
last year, having previously expected them to rise "significantly".
Volkswagen Chief Financial Officer Arno Antlitz said the new outlook roughly
corresponded to a 10% increase.

 

($1 = 0.8424 euros)

 

 

 

Nigeria: UK Launch Scheme to Drive Trade With Nigeria, Boost Jobs

The UK Government has launched a consultation on new trading rules that will
help countries like Nigeria grow their trade and build back better
businesses and help British businesses and consumers at the same time.

 

The UK Developing Countries Trading Scheme (DCTS) is a major opportunity to
grow free and fair trade with developing nations. The proposed scheme will
apply to 70 qualifying countries, including Nigeria, and include
improvements such as lower tariffs and simpler rules of origin requirements
for countries exporting to the UK, allowing countries to diversify their
exports and grow their economies.

The UK currently operates a similar scheme rolled over from the EU, but as
an independent trading nation we can now take a simpler, more generous,
pro-growth approach to trading with developing countries.

 

The UK Developing Countries Trading Scheme will apply to 47 countries in the
Least Developed Country Framework (LDCF) and 23 additional countries
classified by the World Bank as low-income and lower-middle-income
countries.

 

The proposed new UK scheme will mean more opportunity and less bureaucracy
for developing countries, for example by simplifying rules of origin
requirements or reducing tariffs on imports. For instance, this could mean
lowering tariffs on products including rice from Pakistan and raw materials
from Nigeria.

 

Analysing the scheme, Foreign Secretary Dominic Raab said: "Cutting tariffs
for poorer countries enables them to trade their way to genuine independence
- and I'm proud we lead the world in offering that opportunity."

International Trade Secretary Liz Truss said: "Trade fundamentally empowers
people and has done more than any single policy in history to lift millions
of people around the world out of poverty. Now the UK is an independent
trading nation we have a huge opportunity do things differently, taking a
more liberal, pro-trade approach that leads to growth and opportunity.

 

Countries like Bangladesh and Vietnam have proven it's possible to trade
your way to better living standards, and our new Developing Countries
Trading Scheme will help others do the same."

 

Her Majesty's Trade Commissioner for Africa, Emma Wade-Smith OBE, added:
"The DCTS scheme signals the UK's strong appetite to promote free and fair
trade. It is a demonstration of our commitment to help boost economic growth
and prosperity in Africa, by enabling businesses there to access the UK
market more easily. The UK is committed to strengthening our commercial
relationship with African partners.

 

"The new DCTS scheme will create a smoother path for companies to export to
the UK. I encourage the African business community to contribute to this
important consultation. We want to hear a range of views and perspectives,
to ensure the scheme targets those areas that will have the greatest
positive impact on growing our bilateral trade."

 

The UK Government intends for its new scheme to be best in class, and has
studied programs in Canada, the US, Japan and the EU, before constructing an
approach that takes some of the strongest elements of each and builds on
them.

 

The consultation on the UK's new scheme runs for eight weeks and seeks the
view of all sectors of society, including businesses, the public, civil
society groups, consumers, associations, partner governments and any other
interested stakeholders.-This Day.

 

 

Nigeria: Addressing Unemployment in the Niger Delta

Ugo Aliogo examines the efforts of PIND Foundation in tackling unemployment
in the Niger Delta region

 

If the bulging army of unemployed and underemployed youths in Nigeria were
to be a country, it would be ranked the 16th most populous globally and the
fourth in Africa.

 

A 4th quarter report of 2020 by the National Bureau of Statistics (NBS) put
Nigeria's youth unemployment/underemployment at 42.5 per cent. Taken from
the United Nations Population Fund (UNFPA) data that put Nigeria's
population at 211.4 million, it means the number of unemployed/underemployed
youths in the country stands at 89,845,300.9. (90m).

The country's dependency ratio is 86 per cent of the population, going by a
2020 World Bank report. This implies that those groups of persons who are
producing the goods and services for the country (15 - 64 years of age),
consequently adding to the Gross Domestic Product (GDP), is below 20 per
cent of the population. This calls for concern.

 

Furthermore, industry experts have posited that while thousands of graduates
are churned out yearly from various tertiary institutions, there still
exists a huge disconnect between the educational system and market-required
skills. A lot of graduates have therefore become unemployable due to this
disconnect.

 

Should this depressing trajectory be allowed to fester without appropriate
interventions by the government and private sector, Nigeria can well bid
goodbye to its days of glory and embrace gory tales as the new normal.
Poverty, deteriorating socio-economic infrastructures, poor healthcare
delivery, suicide, and insecurity issues will become the order of the day.

There is a need to stem the tide. All hands must therefore be on deck, to
set the country in the right direction.

 

The age-long question then reappears - what can be done to solve the
unemployment and underemployment quagmire the country is currently grappling
with?

 

According to a definition by the NBS, a person is regarded as employed if he
or she is engaged in the production of goods and services, thereby
contributing to the GDP in a legitimate manner, which is a component of the
national accounts and receives any form or amount of compensation for that
activity.

 

On the other hand, underemployment occurs if a person works less than
full-time hours, which is 40 hours, but work at least 20 hours on average a
week and/or if he or she works full time, but are engaged in an activity
that underutilizes his or her skills, time, and educational qualifications.

Tackling unemployment

 

Nigeria is commonly referred to as the 'Giant of Africa,' but an overweight
giant becomes a burden to itself. However, to help the giant lose some of
its excess weight, there must be a systematic, routine, and segmented
approach to achieve a holistic result.

 

In the same vein, Nigeria is made up of six geopolitical zones - the North
Central (NC), North East (NE), North West (NW), South West (SW), South East
(SE) and South-South (SS). These are further broken down into 36 States,
including the Federal Capital Territory (FCT). Out of these states, nine
form the Niger Delta region - the oil-rich states.

 

Ironically, some of the states in the Niger Delta, especially Abia, Akwa
Ibom, Delta, Imo, and Rivers, have some of the worst employment indices in
Nigeria.

 

To solve this challenge, in a pilot project, the Foundation for Partnership
Initiatives in the Niger Delta (PIND), which was established by Chevron
Corporation, initiated the Niger Delta Youth Empowerment Pathways (NDYEP)
project, with support from Ford Foundation, to actively target youths in
three states in the region (Abia, Akwa Ibom and Rivers).

 

Its sole aim was to address identified systemic challenges in the youth
employment ecosystem through the use of data for decision making, and
matching skills supplied to the market demand and opportunities.

 

Hence, PIND conducted a labour market assessment in Akwa Ibom, Rivers, and
Abia States to understand how the unemployment market functions, and to
determine specific occupations and skillsets in-demand - technical and soft
skills that are being supplied, and how they are being delivered.

 

Informed by labour market research findings, and through a process of
co-creation with partners and market actors, the project in the pilot phase
designed interventions with a focus on four priority sectors - construction,
agriculture (Aquaculture), Information and Communication Technology
(ICT)/Renewable Energy, and finished leather sector.

 

It developed multiple pathways. One pathway combines technical and soft
skills development that will lead to formal waged employment. The second
pathway is entrepreneurship which leads to self-employment through the
development of dynamic entrepreneurship skills.

 

The market survey and economic study for the implementation of the NDYEP
programme began in late 2017, while implementation began in 2018.

 

People were selected based on need, age (between 16 to 39 years), and their
interests in shoemaking, construction, ICT, and agriculture. This was also
if they were unemployed.

 

PIND reached out to people using several online platforms such as Facebook,
and Twitter; community-based organisations to reach people at the grassroots
- villages, and churches; youth association networks and ministries of
employment using a platform known as NDLink; and through influencers, with a
vast number of followers. It also interfaced with different local
governments in different areas.

 

Of the target to train 1,000 youths over 1,468 youths completed training on
skills in ICT, aquaculture, and construction. 906 trainees in ICT, 271
trainees in Aquaculture, and 291 trainees in construction.

 

By providing competency training that matches skills to demand in the labour
market, and by providing post-training business support, 233 trained youths
have been placed on internships and apprenticeships, 251 in waged
employment, and 207 graduates have successfully been supported to transition
into entrepreneurship/self-employment.

 

The pilot will be used to develop evidence-based approaches to tackling the
youth unemployment crisis in the Niger Delta.

 

According to the Executive Director of PIND, Dr. Dara Akala, "The main aim
of the project is to develop model pathways for youth job readiness or
workforce development that provides the marginalised youths, men and women
in the Niger Delta region, the opportunities to secure sustainable jobs
through intensive skills the development programme that equips them with
market-relevant skills.

 

"This is a clarion call to the federal government, state government, local
government, and private companies, to rise to this challenge by creating
multiple partnerships that will help us to equip the youths by providing
them with technical skills, soft skills, and entrepreneurship. This will
boost economic activities and economic production for the development of the
Niger Delta region. We had deliberate targets - gender and people with
disabilities.

 

"As a partnership initiative, we worked with and through partners across all
our program areas. So we applied the same processes for partner selection to
the NDYEP project. First and foremost, we were looking at private providers
mainly, some market actors, because we had the issues of sustainability at
the back of our minds when we were trying to select partners."

 

The Deputy Executive Director of PIND, Tunji Idowu, added: "The rate of
unemployment in the Niger Delta is even higher than the average rate for
Nigeria. You don't want to have an army of unemployed or underemployed
youths that are not kept busy, and their energies are not channeled towards
productive means.

 

"The approach is demand-driven, market-led, and it's based on data. The
training was competency-based. It was broad - not only technical training
but also those soft skills that people often say become the success factors.
Not only were they trained, but they were prepared for the marketplace.

 

"Anything that PIND does starts with research. When we were in the research
phase, we discovered that there was a disconnect between the educational
system and the market-required skills. The selection was based on an initial
assessment which has numeracy, literacy, and psychometric tests."

 

According to Idowu, "The NDYEP had a target of 1,000 youths in the first
year and 3,000 youths in the second year. In the first year, we trained over
1,600 youths, and in the second year, we trained 3,180 youths. So it was
very impressive, and I can say we have met our target in terms of the number
of participants."

 

The Project Consultant ay NDYEP, Patrick Ekpe, said: "We had a target of 40
percent women, and at least 10 percent persons living with a disability. As
at the end of the second year program, we had 37.5 percent women on the
programme, and 5.5 percent persons living with disabilities."

 

According to a government stakeholder, Nwachukwu Agomoh, "What PIND has done
is to create what I call an enabling platform for the exchange of ideas, and
that has principally driven what PIND has been able to achieve presently."

 

Another government stakeholder, Erasmus Chukwumba, hinted: "This one is more
pronounced because it has to do with graduates, and we have seen that with
this program, many people are being developed - their capacities are being
developed, and their skills improved. So, when they finish the training, we
are sure that they will get placement in our member companies."

 

The Training Coordinator, E&I, Rivers State of PIND, Etuk Victor, noted:
"Human capital development is key. This is the only way that youth
restiveness can be curbed, if not eradicated.

 

"The goal is to get the trainees skillful enough to be awarded Nigerian
Institute of Building (NIOB) certification, which is a certificate that can
help them to get jobs, and also this certificate helps them to be
self-reliant so that they can be self-employed."

 

An NDYEP implementing partner, Emeka Unachukwu, stated: "With other
projects, I have done, they stop at the training phase; some stop at giving
palliatives, and then it ends. But this is one project that I have done that
has shown me that you can pick up a youth from the street and make him a
millionaire. It is possible. That is what NDYEP is all about."

 

Project Manager of NDYEP, Emeka Ile, posited: "NDYEP basically looks at
alternative ways to begin to address the challenge of youth unemployment in
the Niger Delta.

 

"Having a young population in itself is not a bad thing because it is
certainly a lot of energy that needs to be put in the right place. But the
challenge right now is that the economy has had some times of significant
growth, but that growth has not been accompanied with the relevant kind of
job creation, or is not inclusive enough as a lot of people will say."

 

Achievements

 

They say it is a man's world, but Uduak, a HND holder in Business
Administration from a Private Polytechnic, would have none of that.

 

Breaking the limiting narratives that the place of a woman should be in the
kitchen or "the other room," the Akwa Ibom-born lady sought to build and
boost her self-confidence by securing her financial future.

 

While battling to pay her rent, pay for her Post Graduate programme and also
be able to afford "three square meals" without breaking a bank or losing her
decency, Uduak got to know about the NDYEP training programme and settled
for construction (woodwork).

 

Not an easy profession, even for men. However, she has somehow been able to
make it a success. She now has clients across the country. Uduak is not only
financially independent, but she is also on the path to actualising her
dream of establishing the biggest woodwork company in Nigeria.

 

"The first job I had was from my Facebook chat with someone who was
constructing his house in Uyo. I did the kitchen cabinets, and the delivery
was satisfactory. My jobs are basically from people I chat with online. I
use Facebook, Google, and YouTube platforms to get my customers.

 

"My vision is to own a very big woodwork company in Nigeria, where we can
interpret wood and send a rhythmic sound to people from wood. PIND has given
me that mentality to think outside the box," she said.

 

For Believe Amasi who hails from Eleme Local Government of Rivers state,
having a form of disability and not being able to adequately meet the needs
of his family, shattered his happy home.

 

"I have kids and a wife. I came to this programme through the 'Daughters of
Charity.' I am the President of the disabled in Eleme Local Government.

 

"Due to my situation, my wife left me and left me with my kids. It was so
difficult to feed and do so many other important things. But God brought
PIND my way. I am so happy to be a beneficiary of this wonderful training
organised by PIND. We learnt how to hatch fish, prepare barbeque, rear fish.
All these have had a great impact on our lives.

 

"Through this training, I have my own barbeque stand as we speak. You have
to start somewhere when you are expecting the bigger one. I am proud of
myself today. Besides doing my barbeque business, I am also impacting what I
have learnt to other people. The youths have seen that this programme is
real, and many of them are ready to be impacted," he said.

 

According to Chinagozi Daniel, an ICT implementing partner from Abia states,
"45 of them (trainees) have become Facebook trainers on the Facebook Boost
Your Business training, as trainers or as support trainers. As they were
doing that, they were being paid by Facebook. They were earning money even
before they finished their classes."

 

Israel Yusuf, an Aquaculture implementing partner in Akwa Ibom states
affirmed: "Over 90 per cent of the people we are training are not going into
paid employment but they are starting their own farms."

 

Sylvia Chinwenda Nwito, an ICT trainee in Rivers state, espoused: "What has
changed? Number one is job offers. Then, I begged them to get into companies
because I didn't have skills. Now I am actually getting job offers."

 

Another beneficiary, Achunwa ThankGod, who is from Rivers state, said: "I
have a Diploma in Law and B.Ed in Political Science. Almost about the end of
my final year examination, I went in search of a job, and I got one anyway,
but the pay was so low. I had to consider other alternatives.

 

"That is what caught my interest in enrolling into this programme sponsored
by PIND. Before we came for this programme, I thought the painting was
something you can do ordinarily. Through the training, I have had a lot of
experience that will help me in the delivery of my job as an interior and
exterior decorator.

 

"It has really made me become one of the professionals in interior and
exterior decorations. In learning and applying what I have learnt, a lot has
really changed; the way I work, the process and manner in which I deliver
the work. Since I started this programme, it has been awesome and I have not
lacked money. I can produce local and quality paints."

 

Charles Offor, a 27 years old Bio-Chemistry graduate, and a beneficiary,
remarked: "I got to know about the NDYEP programme from the internet. I
enrolled for Leather Works courtesy of Clintonel Innovation Centre. Before
then, I did not know anything about shoemaking, though the interest was
there.

 

"It was during the process of learning shoemaking that I got to know about
the different types of leather in the market. We were exposed to a software
design called Shoe-Master. In the Shoe-Master, we were taught how to use
computer-aided design and graphics in designing various types of shoes -
male and female shoes.

 

"With the software, you don't need to use your pencil to design or cut and
draw your patterns. I have also been exposed to different segments, one of
which is the customer segment. This has changed my thinking and strategy. It
has also changed me financially too.

 

"It has given me that independence - to think and get money for myself. 10
years from now, I will have built a brand that will go global."

 

Another beneficiary of the NDYEP programme, Chidi Stanley, who is 27 years
old from Abia State, who studied Banking and Finance at Abia State
Polytechnic, said: "I enrolled for construction through the NDYEP training
program. I have not been a welder before, but I registered at the Welding
and Fabrication department. But through the PIND program, I was able to
actualise that dream.

 

"Before my enrolment into the training, things were very difficult for me;
no work, no white-collar job, even though I have been applying for jobs from
one company to another, from one department to another.

 

"When I started, the work was too tough, but I was determined. With the
learning that I acquired at Kiara De Luke Academy through PIND, I have
established my own company and it is going well. I do not beg for money for
bread anymore. I now stand on my own."-This Day.

 

 

 

Rwanda: Government Moves to Tame High Motorcycle Insurance Premiums

The Government has stepped in to help address the hike in bike insurance
premiums which had made motorcycle taxi operators worried about the future
of this means of transport and their livelihoods.

 

The issue of these premiums was brought to the attention of lawmakers on
Monday, July 26, during a virtual Plenary Sitting of the Chamber of Deputies
which adopted the relevance of the new draft law governing land and
waterways transport in Rwanda.

 

MP Bizimana Minani told fellow legislators that he had heard claims by
insurance companies that about 70 percent of the accident damages they
compensated were caused by motorbikes.

As a result, he said, some companies refused to provide motorcycle insurance
coverage, while others increased premiums.

 

"The consequence was that some motorcycle operators did not buy insurance
for their bikes. And, the police realised that there were many bikes in the
passenger transport business without insurance, which ended up being
impounded," he said, indicating that motorcycle taxi is needed, but it
should be done effectively.

 

"What are the strategies being devised to improve motorcycle taxi as well as
reduce the accidents which claim the lives of Rwandans, and ensure that even
the insurance companies do not incur losses?" he asked Infrastructure
minister Claver Gatete who was in parliament to present the amended
transport law.

 

During this plenary session, Gatete told lawmakers that insurance companies
did indeed incur losses because of many accidents involving motorcycles,
which made them pay more compensations.

"That is why a major issue emerged where insurance premiums soared, doubling
and even tripling in some cases," he said.

 

"It even reached a point when only Radiant was the only company offering
motorcycle insurance," he said.

 

However, he said that the Ministry of Finance and Economic Planning was
working on ways to intervene.

 

"We held discussions with them [insurers] and they agreed to reduce [the
premiums]... it's no longer Radiant alone. There is an agreed annual premium
of Rwf132,000," he said.

 

Information that The New Times obtained from Radiant Insurance Company in
June 2021 indicated that the annual premium increased from Rwf61,666 to
Rwf153,280 for a motorcycle that has been on the road for five years.

 

For those that were manufactured between six and 10-years ago, the insurance
cover is Rwf166,220, up from Rwf61,666 while those over 10 years pay
Rwf180,160 annually.

 

 

Radiant said that motorbikes are much involved in accidents, and that the
compensations paid for the related claims are far more than the premiums
they were paying.

 

"For Radiant, in 2020, we collected Rwf2.5 billion in motorcycle insurance
premiums, but we paid compensation claims amounting to over Rwf4.7 billion
in accidents that motorcycles caused, either to the passengers they were
carrying, or other vehicles," Ovia Kamanzi Tuhairwe, the Deputy Managing
Director of Radiant Insurance, told The New Times in June.

 

Zacharias Harerimana, a motorcycle operator from Gasabo District told The
New Times that the high insurance premium was a major concern, adding that
motorcycle operators also have to meet other expenses such as to provide for
their families.

 

"The reduction of the insurance premiums will be of great support," he said,
suggesting that they should be reduced to at least Rwf100,000 per year.

 

Regarding accident claims by insurers, he said that he has been doing
motorcycle taxi business for years but he has not yet been involved in any
accident that required the insurer to pay any compensation.

 

Speaking to The New Times, Daniel Ngarambe, chairperson of Rwanda Federation
of Taxi-Moto Operators (FERWACOTAMO) said that they were much shocked when
insurance premiums rose drastically during the Covid-19 pandemic, yet the
movement of people was slowed by the pandemic.

 

"During this Covid-19 pandemic, there have been lockdowns and other movement
restrictions which reduced the number of people we transport. Increasing
insurance premiums does not match this reality," he said.

 

If motorcycle insurance goes down, it will not just benefit operators but
also passengers.-New Times.

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

Dairibord

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 


 

 


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