Major International Business Headlines Brief::: 31 July 2021

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Major International Business Headlines Brief::: 31 July 2021

 


 

 


 <https://www.nedbank.co.zw/> 

 


 

 


ü  Monzo bank in money laundering rules investigation

ü  Amazon hit with $886m fine for alleged data law breach

ü  Eurozone out of recession after economy grows 2%

ü  China's factory activity in July grows at slowest pace since Feb 2020

ü  Fed's Brainard: Can't wrap head around not having U.S. central bank digital currency

ü  U.S. House advances bills to address Archegos, GameStop turmoil

ü  Exxon profit tops estimates on boost from chemicals, oil prices

ü  Chevron tops profit estimates, joins share buyback stampede

ü  Robinhood turns higher on day after weak debut; Cathie Wood's Ark buys 1.3 mln shares

ü  Wall Street falls with Amazon; S&P 500 posts sixth straight month of gains

ü  China's factory activity expands at a slower pace in July- official PMI

ü  Walmart to require masks for some U.S. retail workers, vaccinations for corporate staff

ü  Indian billionaire's new airline may give Boeing a chance to regain lost ground

ü  Disney makes vaccination mandatory for on-site U.S. employees

ü  Seychelles: IMF Approves $105 Million for Seychelles to Support Economic Stability

ü  Uganda: Igg Issues Ultimatum On Wealth Declaration

ü  Namibia: Global Airline Passenger Demand Remains Depressed

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Monzo bank in money laundering rules investigation

Digital bank Monzo is being investigated by the Financial Conduct Authority (FCA) over potential breaches of financial crime regulations, the bank has disclosed.

 

The financial watchdog sent letters to several retail banks including Monzo in May, warning of failings in their anti-money laundering controls.

 

Monzo said it is complying fully with the FCA's investigation.

 

This comes on the back of customer complaints Monzo received in 2020.

 

Hundreds of Monzo customers claimed they were left without access to money when their accounts were suddenly frozen during the first coronavirus lockdown in 2020, according to the Guardian.

 

In response to the Guardian investigation, the mobile app-based challenger bank unblocked a customer's account and apologised, saying "we don't always get this right".

 

However, it said that in 95% of cases, it had made the right decision in freezing accounts.

 

An FCA spokesman told the BBC that the financial watchdog was unable to comment on ongoing investigations.

 

"In May 2021, the FCA notified us that it had started an investigation into our compliance with the Money Laundering Regulations 2017, potential breaches of some of the FCA Principles for Businesses and related FCA rules for anti-money laundering and financial crime systems and controls between 1 October 2018 to 30 April 2021," Monzo said in its annual report.

 

The online bank said that the financial watchdog was "reviewing and investigating" its compliance with financial crime regulations, and that the investigation was still "at an early stage", meaning that it would take some time to be resolved.

 

"This could have a material negative impact on our financial position, but we won't know when or what the outcome will be for some time," Monzo added.

 

The challenger bank reported a 23% jump in new customers to 5 million, compared with 2020, while pre-tax losses rose 13% to £130m. It has yet to make a profit.

 

Freezing accounts

In 2019, a BBC Watchdog Live investigation revealed that Monzo had been freezing or closing bank accounts and leaving some people in financial difficulty for weeks.

 

At the time, Monzo said it was freezing accounts is because it believed there was suspicious activity occurring.

 

After being detected by algorithms, the bank said it aimed to have a human review the account within 10 minutes, no matter whether it was day or night.

 

Monzo said it had been able to "return millions of pounds to victims of fraud" using its processes, but the bank admitted that it could be frustrating as it was not legally permitted to inform customers or the press why accounts had been blocked.-BBC

 

 

 

Amazon hit with $886m fine for alleged data law breach

Amazon has been hit with an $886.6m (£636m) fine for allegedly breaking European Union data protection laws.

 

The fine was issued by Luxembourg's National Commission for Data Protection, which claimed the tech giant's processing of personal data did not comply with EU law.

 

Amazon said it believed the fine to be "without merit", adding that it would defend itself "vigorously".

 

A spokeswoman told the BBC there had been "no data breach".

 

The EU's General Data Protection Regulation (GDPR) rules requires companies to seek people's consent before using their personal data or face steep fines.

 

Luxembourg's data protection authority, also known as Commission Nationale pour la Protection des Données (CNPD), issued the fine to Amazon on 16 July, according to a US Securities and Exchange Commission (SEC) filing by the company on Friday.

 

In response, Amazon said: "We believe the CNPD's decision to be without merit and intend to defend ourselves vigorously in this matter."

 

The fine comes following rising regulatory scrutiny of large tech companies due to concerns over privacy and misinformation, as well as complaints from some businesses that the tech giants have abused their market power.

 

The Wall Street Journal reported in June that Amazon could be fined more than $425m under the European Union's privacy law.

 

Amazon is by no means the first large company to fall foul of the EU's General Data Protection Regulation (GDPR), but this fine is the largest there has been since the law came into effect in 2018 - and by a very significant margin.

 

The regulation introduced strict limits on the way in which sensitive data could be used, stored or processed.

 

While companies such as Google, British Airways, H&M and Marriot Hotels have all faced penalties from European governments for breaching the rules, those fines were in the tens, rather than the hundreds of millions.

 

We don't yet know exactly what Amazon did to attract such a severe penalty.

 

However, given that national authorities are meant to take account of the gravity, duration and character of the infringement when deciding on a penalty, it must be particularly serious.

 

What this shows is that legislation has teeth - and that even a country like Luxembourg, which has in other ways been very accommodating towards US multinationals, is willing to apply it forcefully.

 

But so far, Amazon is also being forceful. It says it believes the Luxembourg authority's decision to be without merit, and has promised to defend itself vigorously.

 

An Amazon spokeswoman said maintaining the "security of our customers' information and their trust" were "top priorities".

 

"There has been no data breach, and no customer data has been exposed to any third party," she added. "These facts are undisputed."

 

She stressed that the firm strongly disagrees with the CNPD's ruling and intends to appeal.

 

"The decision relating to how we show customers relevant advertising relies on subjective and untested interpretations of European privacy law, and the proposed fine is entirely out of proportion with even that interpretation," she added.

 

US tech giants, including Amazon, have been accused of "monopoly power" in recent years, which has prompted calls for the powers those companies have to be "reined in".

 

Previously, the EU's concerns were believed to centre around the data that Amazon has access to and how it uses it, such as sensitive commercial information on third-party products like volume and price.

 

In November, the European Commission charged Amazon with abusing its dominant position in online retail to gain an unfair advantage over competitors.

 

Meanwhile, in May, Amazon won a court battle over €250m (£215m) in taxes it had been ordered to pay Luxembourg.

 

The European Commission had ordered the tech giant to repay the funds as back taxes, alleging that Amazon had been given unfair special treatment, but a court overturned the order.-BBC

 

 

 

Eurozone out of recession after economy grows 2%

The eurozone's economy grew by 2% in the second three months of the year, taking the region out of recession.

 

New figures suggest there was growth in all the individual national economies which reported data.

 

The 19-nation bloc had suffered a so-called double-dip recession when the economy contracted in the previous two quarters.

 

However, the eurozone remains 3% down from its pre-pandemic level in late 2019.

 

A recovery is under way in the region after the surge in coronavirus infections in the winter.

 

In Italy and Spain, two countries whose economies were badly damaged by the pandemic, growth approached 3% in both.

 

There was an even stronger rebound in Austria and Portugal, with the latter reporting its economy had expanded by 4.9%.

 

Tourism benefits Portugal

The eurozone's two largest economies saw more moderate growth, 1.5% in Germany and 0.9% in France.

 

The growth statistics are first estimates, so there is little detail showing the breakdown of the pattern of recovery.

 

However, household spending made an important contribution in France, Germany and especially in Spain. In France there was a surge in the hotel and restaurant trade of 29%.

 

Andrew Kenningham, chief Europe economist at Capital Economics, said Portugal's rebound might reflect "a slightly less disastrous tourism season than Spain's".

 

He forecasted "another strong number for eurozone GDP" in the third quarter of the year, which "would bring the economy close to, but below, its pre-pandemic level".

 

In contrast, the US has closed that gap, however, US employment is still down and economic activity is below where it probably would have been had there not been the pandemic.

 

Other new eurozone figures showed the number of people unemployed fell by more than 400,000 in June, though it is still one million higher than the low it hit early last year.-BBC

 

 

 

China's factory activity in July grows at slowest pace since Feb 2020

(Reuters) - China's factory activity expanded in July at the slowest pace in 17 months as higher raw material costs, equipment maintenance and extreme weather weighed on business activity, adding to concerns about a slowdown in the world's second-biggest economy.

 

The official manufacturing Purchasing Manager's Index (PMI) eased to 50.4 in July from 50.9 in June, data from the National Bureau of Statistics (NBS) showed on Saturday, but remained above the 50-point mark that separates growth from contraction.

 

Analysts had expected it to slip to 50.8. It was the lowest figure since the index slumped to 35.7 in February 2020, after China began lockdowns to control the coronavirus pandemic.

 

An NBS official said in a statement the PMI's sub-index for production slipped to 51.0 from 51.9 in June, pointing to equipment maintenance and extreme weather. The new order sub-index fell to 50.9, from 51.5, reflecting a slowdown in demand.

 

"The most alarming signal is the new export order index, which is at lowest level since July last year," said Zhiwei Zhang, chief economist of Pinpoint Asset Management.

 

The sub-index for new export orders has dropped for three straight months starting in May. It stood at 47.7 in July.

 

A sub-index for raw material costs stood at 62.9 in July, compared with June's 61.2, pointing to an increase in costs. High raw material prices have eaten into the profitability of industrial firms and deterred some Chinese exporters from taking on orders.

 

Authorities are eager to prevent high factory-gate prices being passed on to consumers, which would only add to current economic headaches as underlying demand remains weak.

 

Hit by extreme weather, the construction index dropped to 57.5, from June's 60.1, and analysts expect the sector to face headwinds amid Beijing's clampdown on the property market.

 

To bolster a slowing economy, the People's Bank of China (PBOC) in mid-July surprised the market by lowering the reserve requirement ratio (RRR) for banks, releasing around 1 trillion yuan ($154 billion) in long-term liquidity.

 

China's economy has largely recovered from disruptions caused by the pandemic, with the consumption and service sectors gradually catching up to the improvements in exports and manufacturing.

 

However, manufacturers are grappling with new challenges including higher raw material prices, surging logistics costs and global supply chain bottlenecks, and the pace of gross domestic product growth is expected to moderate.

 

The country is also racing to contain a fresh COVID-19 outbreak of the more infectious Delta variant in the eastern city of Nanjing. China's zero-tolerance approach could present significant downside risks to the current economic recovery, analysts say.

 

Record flooding in central China may have also weighed on business activity in July, along with government moves to curb steel production in line with a drive to reduce emissions.

 

The official non-manufacturing Purchasing Managers' Index (PMI) eased to 53.3 in July, from 53.5 in June, a separate survey from the NBS showed.

 

The Thomson Reuters Trust Principles.

 

 

Fed's Brainard: Can't wrap head around not having U.S. central bank digital currency

(Reuters) - Federal Reserve Governor Lael Brainard on Friday laid out a range of reasons for "urgency" around the issue of developing a U.S. central bank digital currency, including the fact that other countries such as China are moving ahead with their own.

 

"The dollar is very dominant in international payments, and if you have the other major jurisdictions in the world with a digital currency, a CBDC (central bank digital currency)offering, and the U.S. doesn't have one, I just, I can't wrap my head around that," Brainard told the Aspen Institute Economic Strategy Group. "That just doesn't sound like a sustainable future to me."

 

Fed officials are taking a deep dive into the digital payments universe, collecting public feedback on the potential costs and benefits as well as design considerations with a view to publishing a discussion paper in early September.

 

Fed Chair Jerome Powell in comments earlier this month described the analysis as a key step in accelerating the Fed's efforts to determine if it should issue its own CDBC.

 

"One of the most compelling use cases is in the international realm, where intermediation chains are opaque and long and costly," Brainard said on Friday.

 

But there are domestic reasons too for a U.S.-backed digital currency, she said: the dramatic rise in stablecoins, a form of cryptocurrency pegged to a conventional currency such as the U.S. dollar but not backed by any government.

 

Stablecoins could proliferate and fragment the payment system, or one or two could emerge as dominant, she said. Either way, "in a world of stablecoins you could imagine that households and businesses, if the migration away from currency is really very intense, they would simply lose access to a safe government backed settlement asset, which is of course what currency has always provided."

 

A CBDC could also help solve other problems, she suggested, including the difficulty during the pandemic of getting government payments to people without bank accounts, who also tend to be the very people who need the payments the most.

 

The Thomson Reuters Trust Principles.

 

 

U.S. House advances bills to address Archegos, GameStop turmoil

(Reuters) - Wealthy families that set up investment funds known as "family offices" to manage their personal wealth would face stricter oversight from U.S. regulators under a bill advanced by a U.S. congressional panel late on Thursday.

 

The bill was among 11 that lawmakers hope will address failings highlighted by March's meltdown of family office Archegos Capital which led to billions of dollars in losses for some banks and January's GameStop saga. read more

 

Whether they pass or not, the bills considered by the House Financial Services Committee would increase the pressure on the U.S. Securities and Exchange Commission (SEC) to take swift action, analysts said.

 

The legislation targets family offices with more than $750 million in assets, retail trading practices and short selling.

 

The bills also target January's GameStop meme stock saga during which retail investors trading on low-cost brokers like Robinhood Markets Inc (HOOD.O) banded together to burn hedge funds that had bet against the retailer.

 

One bill directs the SEC to study restricting "payment for order flow" whereby brokers route orders to wholesale market makers in return for a fee. Critics say the practice creates conflicts of interest that can push up prices for retail investors.

 

Any changes to the model could hurt Robinhood, which had a miserable stock market debut on Thursday, partly due to investor worries over regulatory risks. read more

 

Another bill directs the SEC to require investors to disclose their positions monthly instead of quarterly, and to include certain derivatives and "short" bets that stocks will fall.

 

Several industry insiders said Wall Street will fight the changes.

 

Thomas Handler, a partner at law firm Handler Thayer which has over 300 family offices as clients, said the proposal for family offices to register with the SEC would become an "intrusion of privacy."

 

The Thomson Reuters Trust Principles.

 

 

 

Exxon profit tops estimates on boost from chemicals, oil prices

(Reuters) - Exxon Mobil (XOM.N) on Friday posted its biggest quarterly profit in more than a year that also sailed past analysts' estimates, boosted by higher oil prices and record earnings at its chemicals business.

 

The upbeat results following a contested board fight over the company's direction highlighted how oil producers are taking advantage of a recovery in oil prices to cut debt and boost shareholder payouts rather than spend more to raise production.

 

"Positive momentum continued during the second quarter across all of our businesses as the global economic recovery increased demand for our products," Chief Executive Darren Woods said.

 

Exxon said its 2021 capital spending is expected to be at the lower end of the prior range of $16 billion to $19 billion.

 

Earlier in the day, rival Chevron cut its 2021 budget, although both U.S. producers expect higher spending in the second half of the year as they resume investments on key projects, including the prolific Permian basin.

 

"ExxonMobil continued the parade of major oils companies with rapidly improving results, recovering from the depths of the COVID crisis during the second quarter last year," Third Bridge Group's Peter McNally said.

 

Exxon again used higher cash flow to pare a massive debt built up to preserve its shareholder dividend amid historic losses. The company cut debt by $2.7 billion, bringing total reductions to about $7 billion since the end of 2020.

 

While Exxon backed shareholder returns through dividend, Chevron said it would resume share buybacks at an annual rate of between $2 billion and $3 billion.

 

Exxon also said it was on pace to achieve cost savings of $6 billion through 2023 relative to 2019. In the first half of 2021, it cut over $1 billion in costs, on top of reductions of $3 billion last year.

 

Exxon earned $1.10 per share in the second quarter, beating market expectations of 99 cents, according to Refinitiv IBES data. Late last month, the company had given a broad indication about its results, prompting several analysts to reduce their earning projections.

 

Shareholders had cast out three Exxon directors in May for a hedge fund's nominees, promising to boost returns and better prepare the company for a low-carbon world.

 

CEO Woods said the company started working with the new directors in June with in-depth reviews of its businesses and the first in-person regular meeting of the board took place this week following virtual sessions.

 

Earnings from its chemicals and plastics business rose nearly fivefold from a year ago to a record $2.32 billion as margins expanded on strong demand for plastic packaging, tight industry supply and shipping constraints.

 

Higher oil prices pushed earnings in the company's exploration and production business to $3.19 billion. Output fell 2% to 3.6 million oil-equivalent barrels per day during the quarter.

 

The company said it expects higher oil and gas volumes in the current quarter due to reduced planned maintenance.

 

However, refining and marketing business is yet to recover and posted a loss of $227 million, hurt mainly by maintenance costs and product oversupply.

 

Exxon's U.S. refining business has lost money for six quarters in a row. Outside the United States, refining operations have run in the red in five of the last six quarter.

 

Shares of the company, which have risen 43% this year after plunging during the height of the pandemic, were down 2.3% at $57.59, amid a broader drop in energy stocks.

 

Net income for the second quarter came in at $4.69 billion, compared with a loss of $1.08 billion a year ago, which included a gain related to reversing an inventory writedown.

 

The Thomson Reuters Trust Principles.

 

 

 

Chevron tops profit estimates, joins share buyback stampede

(Reuters) - Chevron Corp (CVX.N) on Friday reported its highest profit in six quarters and joined an oil industry stampede to reward investors with share buybacks, as rebounding crude oil prices carried earnings and cash flow to pre-pandemic levels.

 

Oil and gas are trading near multi-year highs as fuel consumption has thrown off pandemic losses and natural gas has soared on weather demand. OPEC's decision to carry production curbs into next year has kept oil above $70 per barrel.

 

The company cut its annual capital spending forecast to about $13 billion, now below what it had spent last year. It had earlier budgeted $14 billion to $16 billion a year in annual capital spending through 2025.

 

Chevron last year cut expenses to allow profits to flow at above $50 a barrel. Lower costs and higher prices generated the highest cash flow in two years, enabling it to pare debt and resume share repurchases, officials said.

 

Share buybacks will resume this quarter at an annual rate of between $2 billion and $3 billion, said Chief Executive Michael Wirth, about half the annual rate it had planned.

 

The company and its rivals halted purchases early last year as the pandemic cut oil demand. Chevron now joins Royal Dutch Shell (RDSa.L), TotalEnergies (TTEF.PA) and Equinor (EQNR.OL) in resuming buybacks.

 

"We've always said we would begin buybacks when we were confident that we could sustain it, and our breakeven is $50 per barrel and we are now well above it," Chief Financial Officer Pierre Breber told Reuters.

 

"We're trying to win back investors... demand for our products has fully recovered, demand for our stock is recovering."

 

The second-largest U.S. producer's oil and gas production unit earned $3.18 billion in the quarter compared with a loss of $6.09 billion a year ago.

 

Total production rose 5% to 3.13 million barrels of oil equivalent per day (boepd), while Chevron sold its U.S. oil for $54 a barrel last quarter, compared with $19 a year earlier.

 

Chevron expects output from the Permian basin to be almost same as last year's, but said it will add drilling rigs in the second half. Its production rate from the top U.S. shale basin is expected to be 600,000 boepd by 2021 end.

 

"It's still a fundamentally oversupplied world and that's why we're being cautious... We're not going to be driven by an output target or a production target," Jay Johnson, Chevron's upstream executive vice president told analysts.

 

Meanwhile, top U.S. oil producer Exxon Mobil (XOM.N) said it expects more spending on key projects, including Guyana and Permian, in the second half of this year. read more

 

Anish Kapadia, director of energy at London-based Palissy Advisors, said Chevron's Permian additions "still seem measured" and the two U.S. producers seemed to be focusing on cashflow over production.

 

Crude oil prices this year through June were up 57%, while hard-hit refining and chemicals improved with better plant utilization rates and margins.

 

The United States accounted for most of a $839 million profit at Chevron's refining operations in the quarter as Asia units suffered from weak margins.

 

CFO Breber said cost-cuts are largely over and it has achieved targeted savings from its 2020 takeover of Noble Energy. It is aiming to raise up to $2 billion from asset sales this year.

 

Its adjusted profit of $1.71 per share beat Wall Street estimates of $1.59, according to Refinitiv IBES data.

 

The company's shares were down 0.9% at $101.65 in afternoon trade after opening higher amid a broader drop in energy stocks.

 

The Thomson Reuters Trust Principles.

 

 

 

Robinhood turns higher on day after weak debut; Cathie Wood's Ark buys 1.3 mln shares

(Reuters) - Shares of Robinhood Markets Inc (HOOD.O) closed higher Friday, a day after the ARK Innovation ETF, managed by star stock picker Cathie Wood, said it picked up 1.3 million shares of the online brokerage during its grim market debut.

 

Robinhood’s shares closed up just shy of 1% at $35.15, after falling earlier in the session and losing more than 8% in its Thursday debut. Market watchers cited a comparatively cold reception from retail investors who have fueled rallies in shares of so-called “meme stocks,” as well as Robinhood's decision to reserve as much as 35% of its shares for its users.

 

The stock remained below its initial public offering price of $38 a share.

 

That poor showing has not dissuaded Wood, who gained fame on the strong performance of her funds in 2020. According to ARK's daily update for its actively managed ETFs on Thursday, it bought 1,297,615 shares of Robinhood in its ARK Innovation ETF . At Thursday’s closing price, that would have been worth around $45.2 million.

 

The Ark Innovation ETF owned 3,623,092 shares of Robinhood as of Friday, making up 0.55% of the fund's portfolio and worth $126 million, according to data on the fund's website.

 

Ark did not immediately respond to request for comment

 

Other investors stayed on the sidelines, citing concerns about valuation, the risk of regulation and lingering anger with the company's imposition of trading curbs during the meme stock trading frenzy in January. read more

 

“Calls itself Robinhood, steals from the people. Gotta love it,” said one user on Reddit’s popular WallStreetBets, where retail investors have gathered this year to coordinate buying that has helped drive big rallies in Gamestop (GME.N), AMC Entertainment Holdings (AMC.N) and other names. read more

 

Retail investors bought a net $18.85 million of Robinhood stock on Thursday, according to Vanda Research, a relatively low amount compared with other initial public offerings, the firm said. Chinese ride-hailing giant Didi Global Inc saw retail investors buy $69 million on its debut, while Bitcoin exchange Coinbase took up more than $57 million earlier this year.

 

Data from Fidelity Investments showed customers on its brokerage platform placed 31,736 buy orders for Robinhood's stock and 7,451 sell orders on Thursday.

 

In an unusual move, Robinhood had said it would reserve between 20% and 35% of its shares for its users. The company warned in its IPO registration that the participation of retail investors could trigger a rollercoaster ride in its shares that could prove too risky for those seeking long-term sustainable gains. read more

 

The Thomson Reuters Trust Principles.

 

 

 

Wall Street falls with Amazon; S&P 500 posts sixth straight month of gains

(Reuters) - U.S. stocks fell on Friday and registered losses for the week as Amazon.com shares dropped after the company forecast lower sales growth, but the S&P 500 still notched a sixth straight month of gains.

 

Amazon.com Inc (AMZN.O) shares sank 7.6% - their biggest daily percentage drop since May 2020 - after the company reported late on Thursday revenue for the second quarter that was shy of analysts' average estimate and said sales growth would ease in the next few quarters as customers ventured more outside the home. read more

 

Shares of other internet and tech giants that did well during the lockdowns of last year, including Google parent Alphabet Inc (GOOGL.O) and Facebook Inc (FB.O), were mostly lower as well.

 

"Overall earnings have been good. But Amazon ... and some of last year's winners are taking some of the air out of the market today," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "This market has been driven by big tech and when tech does well, the market seems to go right along with it, and when it doesn't," it falls.

 

Data on Friday showed U.S. consumer spending rose more than expected in June, although annual inflation accelerated further above the Federal Reserve's 2% target. read more

 

The Dow Jones Industrial Average (.DJI) fell 149.06 points, or 0.42%, to 34,935.47, the S&P 500 (.SPX) lost 23.89 points, or 0.54%, to 4,395.26 and the Nasdaq Composite (.IXIC) dropped 105.59 points, or 0.71%, to 14,672.68.

 

For the month, the S&P 500 rose 2.3%, the Dow gained 1.3% and the Nasdaq added 1.2%, while for the week all three of the major indexes posted declines.

 

Strong earnings and the continued rebound in the U.S. economy have helped to support stocks this month, but the rapid spread of the Delta variant of the coronavirus and rising inflation have been concerns. read more

 

A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri

"There are still some distant jitters, whispers about the Delta variant, about cases rising, and I think some underlying worries about a slowdown of the reopenings and possible reversal," Dollarhide said.

 

Also on the earnings front, Pampers maker Procter & Gamble Co (PG.N) rose 2% as it forecast higher core earnings for this year, and U.S.-listed shares of Canada's Restaurant Brands International Inc jumped 5.1% after the Burger King owner beat estimates for quarterly profit. read more

 

Pinterest Inc (PINS.N), however, plunged 18.2% after saying U.S. user growth was decelerating as people who used the platform for crafts and DIY projects during the height of the pandemic were stepping out more. read more

 

Caterpillar Inc (CAT.N) shares also fell, ending down 2.7%, even though the company posted a rise in second-quarter adjusted profit on the back of a recovery in global economic activity. read more

 

S&P 500 company results on the quarter overall have been much stronger than expected, with about 89% of the nearly 300 reports so far beating analysts' profit estimates, according to IBES data from Refinitiv. Earnings are now expected to have climbed 89.8% in the second quarter versus forecasts of 65.4% at the start of July.

 

Volume on U.S. exchanges was 8.86 billion shares, compared with the 9.74 billion average for the full session over the last 20 trading days.

 

Declining issues outnumbered advancing ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favored decliners.

 

The S&P 500 posted 65 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 84 new highs and 98 new lows.

 

The Thomson Reuters Trust Principles.

 

 

China's factory activity expands at a slower pace in July- official PMI

(Reuters) - China's factory activity expanded at a slower pace in July due to higher raw material costs, equipment maintenance and extreme weather, adding to concerns of a slowdown in the world's second-biggest economy.

 

The official manufacturing Purchasing Manager's Index (PMI) eased to 50.4 in July from 50.9 in June, data from the National Bureau of Statistics (NBS) showed on Saturday, but remaining above the 50-point mark that separates growth from contraction.

 

Analysts had expected it to slip to 50.8.

 

China's economy has largely recovered from disruptions caused by the pandemic, but manufacturers are grappling with new challenges from higher raw material prices, surging logistics costs and global supply chain bottlenecks.

 

The country is also racing to contain a fresh COVID-19 outbreak of the more infectious delta variant which surfaced in the eastern city of Nanjing. The zero-tolerance approach taken by the Chinese government could present significant downside risks to the economic recovery.

 

The Thomson Reuters Trust Principles.

 

 

Walmart to require masks for some U.S. retail workers, vaccinations for corporate staff

(Reuters) - Walmart Inc (WMT.N) has made it mandatory for its retail workers in U.S. COVID-19 hotspots to wear masks andsaid it required its corporate staff to be vaccinated against the virus.

 

The move comes as U.S. health officials said earlier this week Americans fully vaccinated against COVID-19 should go back to wearing masks in indoor public places in regions where the coronavirus is spreading rapidly. read more

 

All market, regional and divisional employees who work in multiple facilities and all campus office workers have to be vaccinated by Oct 4, the retailer said in a memo.

 

The world's largest retailer had said in May fully vaccinated employees could work without masks.

 

Grocer Kroger Co (KR.N) also said on Friday it would "strongly encourage" all customers and employees, including those who are vaccinated, to wear a mask when in its stores and facilities to stop the spread of the Delta variant.

 

Walmart retail workers will post signage at its stores to encourage customers to wear masks, according to a separate company memo. Retail workers would also receive an incentive of $150, double the amount it had been paying, to get inoculated, with those already paid $75 set to receive the rest next month.

 

Store managers should regularly check the U.S. Centers for Disease Control and Prevention's website for potential changes to mask guidance in different locations, the company said.

 

Bloomberg News reported earlier this week Apple Inc's(AAPL.O) plans to restore its mask requirement policy at most of its U.S. retail stores, even for vaccinated customers and staff. read more

 

The Thomson Reuters Trust Principles.

 

 

Indian billionaire's new airline may give Boeing a chance to regain lost ground

(Reuters) - Indian billionaire Rakesh Jhunjhunwala's plan to launch an ultra-low-cost airline, could give planemaker Boeing (BA.N) a chance to regain lost ground in India after the fall of one of its biggest customers, Jet Airways, two years ago, industry executives say.

 

Jhunjhunwala, known as "India's Warren Buffett" for his successful stock investments, plans to team up with former CEOs of IndiGo (INGL.NS), the country's biggest carrier, and Jet Airways (JET.NS) to tap into demand for domestic air travel.

 

While Jhunjhunwala's Akasa Air comes at a time when India's aviation industry is reeling from the impact of the pandemic, with airlines losing billions of dollars, the sector's long-term prospect makes it a hot market for planemakers Boeing and Airbus (AIR.PA).

 

"There will be a big fight between Airbus and Boeing," said Nitin Sarin, managing partner at law firm Sarin & Co, which advises lessors and airlines.

 

"For Boeing this is a great opportunity to step in and up their game, considering they don't have any other major operator for their 737 aircraft in India apart from SpiceJet," Sarin said, referring to Boeing's narrowbody aircraft.

 

One industry source said the new venture was already moving towards what could be one of the biggest deals of the year outside the United States to acquire purchased or leased 737s.

 

Boeing did not comment on Akasa's plans, but said it always seeks opportunities and talks to current and potential customers about how it can best support their fleet and operational needs.

 

Details of the venture, including any decision on plane orders, have not been formally disclosed, but Jhunjhunwala told Bloomberg he plans to have a 40% stake in Akasa, which will have 70 aircraft of up to 180 seats within four years.

 

Jhunjhunwala, valued at $4.6 billion by Forbes, did not respond to an interview request.

 

Indian skies are dominated by low-cost carriers (LCCs) including IndiGo, SpiceJet (SPJT.NS), GoFirst and AirAsia India, with the majority of them operating a fleet of Airbus' narrowbody planes.

 

Boeing dominates India's widebody market of 51 planes but fare wars and high costs have led to casualties among full-service carriers, including Kingfisher Airlines in 2012 and Jet Airways in 2019, making LCCs and Airbus even more dominant.

 

Boeing's share of India's 570 narrowbody planes fell to 18% after Jet's demise from 35% in 2018, data from consultancy CAPA India shows. Jet was recently rescued from bankruptcy and is expected to fly again.

 

Indian carriers have over 900 planes on order of which 185 are Boeing 737 aircraft and 710 are Airbus, which counts IndiGo as one of its biggest customers globally.

 

"If you have to lease an aircraft there is an abundance and lessors would be happy to provide competitive rates, even better than pre-COVID times," Sarin said.

 

He warned, however, that India is still a difficult place to do business, with regulatory hurdles and expensive and under-developed airports making LCCs less efficient than elsewhere.

 

Even as Akasa faces tough competition in a battered, post-COVID market which has pushed airlines to renegotiate terms with lessors and vendors, raise fresh funds and trim costs, starting with a clean slate and good capital will give it an advantage.

 

Akasa's other co-founders are Aditya Ghosh, who spent a decade with IndiGo and was credited with its early success, and Vinay Dube, former CEO of Jet who has also worked with Delta.

 

"It will be a long haul and the new airline will be very severely tested but the capitalisation and the start team gives confidence that it is possible for them to be successful," CAPA India head Kapil Kaul said.

 

The Thomson Reuters Trust Principles.

 

 

 

Disney makes vaccination mandatory for on-site U.S. employees

(Reuters) - Walt Disney Co (DIS.N) said on Friday it was making vaccination mandatory for all its on-site salaried and non-union hourly employees in the United States, as the highly infectious Delta COVID-19 variant drives a resurgence in cases.

 

"Employees who aren't already vaccinated and are working on-site will have 60 days from today to complete their protocols and any employees still working from home will need to provide verification of vaccination prior to their return, with certain limited exceptions," Disney said.

 

Coalition of Resort Labor Unions representing Disney cast members stage a car caravan outside Disneyland California, calling for higher safety standards for Disneyland to reopen during the global outbreak of the coronavirus disease (COVID-19) in Anaheim, California, U.S., June 27, 2020. REUTERS/Mike Blake

The company also said all the newly hired employees will be required to be fully vaccinated before beginning their employment.

 

Disney's announcement comes after major tech companies including Alphabet Inc's (GOOGL.O) Google, Uber Technologies Inc (UBER.N) and Facebook Inc (FB.O) said earlier this week that all U.S. employees must get vaccinated to step into offices. read more

 

Health authorities on Tuesday said Americans fully vaccinated against COVID-19 should go back to wearing masks in indoor public places in regions where the coronavirus is spreading rapidly. read more

 

The Thomson Reuters Trust Principles.

 

 

 

Seychelles: IMF Approves $105 Million for Seychelles to Support Economic Stability

The executive board of the International Monetary Fund has approved $105 million under the Extended Fund Facility for Seychelles with an immediate disbursement of $34.26 million.

 

In a press statement on Thursday, the IMF stated that "the key objective of the proposed programme is to support the authorities' efforts to restore macroeconomic stability and debt sustainability while strengthening the post COVID-19 recovery."

 

The IMF's deputy managing director and chair, Tao Zhang, said, "The Seychelles' economic outlook is positive, but risks remain high. Tourist arrivals since March 2021 point to a strong recovery. Nonetheless, the outlook is uncertain and contingent on the pandemic path, the effective rollout of vaccines in Seychelles' key tourist markets, and the expected recovery in external demand."

 

"The new arrangement under the Extended Fund Facility will support Seychelles' post-pandemic recovery, anchor reform implementation and catalyse additional external financing," he added.

 

Seychelles, an archipelago in the western Indian Ocean, was hit hard by the COVID-19 crisis which caused a downturn in travel which affected the tourism industry, the nation's top economic contributor.

 

The IMF stated that "the authorities reacted swiftly, by locking down the economy, thereby keeping infection and fatality rates low. However, the travel restrictions and global economic downturn triggered unprecedented economic contraction. The authorities responded with measures to mitigate the economic fallout on businesses and households."

The IMF added that as a result "the public debt ratio increased sharply, reflecting the primary balance deterioration, exchange rate depreciation, and GDP contraction. As soon as vaccines became available, Seychelles led the world in vaccination coverage and reopened its borders. With tourist arrivals bouncing back, a V-shaped recovery is now expected."

 

According to the Ministry of Finance, some of the measures to be taken under the economic reform include improving Seychelles' debt sustainability, the business environment and reform of public administration.

 

The IMF stated that the key strategy focuses on maintaining the recovery momentum while reducing the risks to debt sustainability.

 

"Advancing the reform agenda through an ambitious fiscal adjustment, reinforced debt management, strengthened fiscal governance frameworks, and financial sector development and inclusion are essential priorities to sustain the post-COVID-19 recovery and generate high, sustainable, and inclusive growth," said the IMF.

 

The last time Seychelles embarked on economic reform was in 2008. The macroeconomic reform programme with the assistance of the IMF was to primarily address the serious balance of payments and external debt difficulties.-Seychelles News Agency.

 

 

 

Uganda: Igg Issues Ultimatum On Wealth Declaration

The Inspectorate of Government (IG) has given all newly elected leaders 17 days to declare their wealth as per the Leadership Code Act, 2002.

 

The outgoing deputy Inspector General of Government (IGG), Ms Mariam Wangadya, asked leaders in public offices to declare their wealth using the online platform.

 

Speaking at the sensitisation meeting in Kampala yesterday, Ms Wangadya said all elected leaders are supposed to comply with the Leadership Code Act, 2002, on declaration of their income, assets and liabilities.

"Currently we have 25,000 leaders from 312 institutions who are registered in the IG online data base, and we are expecting 400,000 public officers to declare. So far, about 100,000 public leaders have already registered," she said.

 

"The deadline for public officers is August 7, 2021, while for newly elected leaders, it is August 14, 2021. If you do not submit a declaration within that period, you are late and will be penalised," she added.

 

Ms Wangadya said the fines for late submission range between Shs400,000 and Shs800,000 per month.

 

"The penalty is a fine of Shs400,000 per month for the initial three months of non- submission of the declaration. After the initial three months of non-submission, you pay a fine not exceeding Shs800,000 per month for two months and after that the tribunal has a right to make any decision," she said.

She also explained that after five months of non-compliance, the emolument of the leader can be withheld until declaration is submitted, and they can be demoted or dismissed for refusal to comply with the rules.

 

"False declaration also lead to a penalty of paying a fine not exceeding Shs200,000 for two months and also lead to demotion and dismissal of office or confiscation of undeclared assets," she said.

 

Ms Annet Twine, the director of the leadership code, said once they receive the declarations forms, they verify their accuracy and then communicate to the leaders.

 

The requirements

 

The public leaders are supposed to submit a salary pays lip, appointment letter, bank account details, and sale and purchase agreements details, certificate of title details, motor vehicle logbooks, share certificate details, loan agreements and loan payment schedules, tenancy agreements and certificates of incorporation, among others.-Monitor.

 

 

Namibia: Global Airline Passenger Demand Remains Depressed

Global airline passenger demand performance for June 2021 showed a slight improvement in both international and domestic air travel markets. However, overall demand remains significantly below pre-Covid-19 levels owing to untiring international travel restrictions.

 

The International Air Transport Association (IATA) this week announced that African airlines' traffic fell 68.2% in June versus the same month two years ago, an improvement from the 71.5% decline in May compared to May 2019. June capacity however contracted 60.0% versus June 2019 as the load factor declined 14.5 percentage points to 56.5%.

 

Meanwhile, total demand for air travel in June 2021 (measured in revenue passenger kilometres or RPKs) was down 60.1% compared to June 2019. This was a small improvement over the 62.9% decline recorded in May 2021 versus May 2019. IATA pointed out that comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of the global pandemic.

Moreover, international passenger demand in June was 80.9% below June 2019, an improvement from the 85.4% decline recorded in May 2021 versus two years ago.

 

Total domestic demand was down 22.4% versus pre-crisis levels (June 2019), a slight gain over the 23.7% decline recorded in May 2021 versus the 2019 period.

 

"We are seeing movement in the right direction, particularly in some key domestic markets. But the situation for international travel is nowhere near where we need to be. June should be the start of peak season, but airlines were carrying just 20% of 2019 levels. That's not a recovery, it's a continuing crisis caused by government inaction," said Willie Walsh, IATA's Director General.

 

In terms of cargo, African airlines' international demand for June increased 33.5% compared to the same month in 2019, which was the strongest performance of all global regions. The increase was however notable on small volumes as African carriers carry 2% of global cargo). Overall international cargo capacity in June decreased by 4.9% compared to the same month in 2019.

 

"Air cargo is doing brisk business as the global economy continues its recovery from the Covid-19 crisis. With first-half demand 8% above pre-crisis levels, air cargo is a revenue lifeline for many airlines as they struggle with border closures that continue to devastate the international passenger business. Importantly, the strong first-half performance looks set to continue," said Walsh.-New Era.

 

 

 

 

 

 

 


 


 


 

 

 

 


 

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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