Major International Business Headlines Brief::: 05 June 2021

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Major International Business Headlines Brief::: 05 June 2021

 


 

 


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ü  Rich nations 'millimetre away' from tech tax deal

ü  Facebook suspends Trump accounts for two years

ü  US economy adds fewer jobs than forecast despite reopening

ü  Brexit: UK announces trade deal with Norway, Iceland and Liechtenstein

ü  Facebook probed by UK and EU competition watchdogs

ü  Some Portugal passengers still plan to travel despite rule change

ü  UN: Cost of food rises at fastest pace in over a decade

ü  Google diversity head removed over anti-Semitic blog post

ü  Hong Kong sets $1.3m parking space price record

ü  Musk breakup tweets bruise bitcoin

ü  U.S. leisure and hospitality pay surges to a record. Now will workers come?

ü  Ackman reinvents SPAC in Universal Music deal talks

ü  Fewer Americans blame COVID for preventing them from seeking work

ü  JPMorgan freezes donations to Republicans who contested 2020 election

ü  AMC's wild week ends with nearly 85% gain in renewed meme stock craze

ü  Wall St Week Ahead Investors eye Washington talks after big rally in infrastructure shares

ü  South Africa: Is Africa's Biggest Polluter Capable of Transformation?

ü  Namibia: Jooste Warns SOEs Honeymoon Is Over

ü  Nigeria: How CBN, Under Emefiele, Drives Financial Reforms

ü  South Africa: Eskom Suspends Load Shedding Until 5pm

ü  Namibia: Ewallet Can Now Pay Utility Bills Across the Country

ü  Namibia: Trade Ministry Takes Roadshow to Border Towns

 

 

 

 

 

 

 

 


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Rich nations 'millimetre away' from tech tax deal

A global agreement to end the "race to the bottom" on corporate taxation is within sight, according to the French and German finance ministers.

 

France's Bruno le Maire told the BBC the G7 club of rich nations were "just one millimetre away from a historic agreement" on a global minimum rate.

 

He urged low tax states like Ireland to back a deal which would target tech giants such as Amazon and Microsoft.

 

The German finance minister said a 15% rate would help pay back Covid debt

 

Tax on big tech and multi-nationals has been a source of friction between the US and fellow G7 countries such as the UK.

 

German finance minister Olaf Scholz said it was important to stop the world's biggest companies from dodging tax.

 

He said it was "absolutely necessary" to reach a deal in order to "get out of this race to the bottom we see with taxes today…especially after the Covid crisis and all the money we spent to defend the health of the people, and to defend the economy."

 

Mr Le Maire also urged Ireland, which has one of the lowest corporate tax rates in the European Union, at 12.5%, to get "on board".

 

He added: "European countries, that in the past, opposed this new international tax system, must understand that they have to give the agreement to this major breakthrough".

 

'Starting points and sticking points'

Both ministers said agreement on a minimum rate remained a sticking point.

 

Mr Le Maire said he saw the 15% rate as a "starting point".

 

He said: "If it can be higher, it is better to have a higher rate than 15%."

 

However, Mr Scholz suggested that 15% would be an effective starting point that would mark a "turning point" after years of going in the other direction.

 

It came after UK Chancellor Rishi Sunak says he was "confident" of reaching a global agreement on digital taxation ahead of a meeting of world finance leaders.

 

Finance minsters will also discuss climate change at the two day meeting which starts in London on Friday.

 

Ahead of the G7 talks, starting in London on Friday, Mr Le Maire and Mr Scholz along with their counterparts in Italy and Spain co-signed a letter urging an agreement on an international tax system "fit for the 21st Century".

 

In a letter to The Guardian, they wrote: "Introducing this fairer and more efficient international tax system was already a priority before the current economic crisis, and it will be all the more necessary coming out of it."

 

Those attending the G7 finance ministers summit are certain that a deal will be done on global taxation by Saturday morning - and they are not shy about its "historic nature". Mr Scholz told me they'll "have an agreement which will really change the world... this will be a turning point in global co-operation".

 

Another finance minister said privately the deal will start to set the rules for the 21st Century, because if the Western G7 democracies were incapable of doing it, then China would.

 

The UK's turnaround on minimum tax rates is quite something. Successive elections have been fought on the danger of corporation tax hikes to jobs and investment. Now, not only is that policy, but the UK looks set up to have overseen an agreement to limit the extent to which a future chancellor could cut it.

 

There are two sticking points, sources tell me. Firstly, there is the mention (or not) of a global minimum corporation tax rate of 15%. There is also a move to use the wording "at least 15%" to show some ambition - but also to provide some negotiation space at the wider G20 meeting chaired by Italy and including the likes of China and Russia.

 

The US also asked countries that have levied digital taxes - France, Italy and the UK, to withdraw them quickly as part of the deal. At least one finance minister said that was a "non-starter", as it could immediately result in the big tech giants paying less, not more tax.

 

The end result will depend on fine detail, but looks likely to involve a new ability to charge 100 or so of the world's largest companies based on where their sales are, not where they house the factories or patents and trademarks.

 

This could be transformative, and not just for Big Tech, but some more conventional multinationals.

 

Tax tech

On Wednesday, the US announced it would impose tariffs on about $2bn (£1.4bn) of imports, including certain goods from the UK, in retaliation for taxes on big US tech firms.

 

However, it suspended them for 180 days to allow further talks to take place in London and at a meeting of G20 nations in July.

 

US delays tariffs in 'tech tax' row

Amazon has €250m 'back taxes' overturned in court

Mr Sunak is expected to push for an agreement on taxes and call for all global businesses to commit to climate reporting.

 

Speaking ahead of the G7 meeting, Mr Sunak said: "Securing a global agreement on digital taxation has also been a key priority this year - we want companies to pay the right amount of tax in the right place, and I hope we can reach a fair deal with our partners.

 

"I'm determined we work together and unite to tackle the world's most pressing economic challenges - and I'm hugely optimistic that we will deliver some concrete outcomes this weekend."

 

The ministers will be looking at how to stop the likes of Google, Amazon, Starbucks and Apple paying low or no taxes in countries where they generate revenues.

 

The meeting is being held as it emerged that an Irish subsidiary of US technology giant Microsoft paid no corporation tax on $315bn in profit it made last year, according to The Guardian.

 

Microsoft Round Island One is resident in Bermuda and the profit it generated last year is equal to nearly three-quarters of Ireland's GDP.

 

All G7 countries, bar the UK, have supported a proposal from the US for a global minimum corporate tax rate of 15% that could raise $50-$80bn for governments around the world.

 

'Deal within reach'

Germany, France, Italy and Spain said the commitment to a minimum 15% tax rate is "a promising start" but said G7 nations must reach "a common position on a new international tax system" in London before more nations meet next month.

 

They wrote: "We are confident it will create the momentum needed to reach a global agreement at the G20 in Venice in July. It is within our reach. Let's make sure it happens. We owe it to our citizens."

 

The UK is holding out for reassurances about the Digital Services Tax, which levies 2% on revenues derived in the UK from online marketplaces, search engines and social media platforms.

 

It is open to the idea of a global corporate minimum tax rate and is said to be prepared to let the Digital Services Tax go if it obtains assurances that big tech will not simply be let off the hook.

 

The Biden administration initially pushed for a global minimum corporate tax rate of 21% but has now retreated to 15%. However, officials have said that's regarded very much as a "floor".

 

Finance ministers from the US, Japan, France, Canada, Germany and Italy will be attending the meeting at Lancaster House, along with representatives from the European Commission, the Eurogroup, the World Bank, the International Monetary Fund and the Organisation for Economic Co-operation and Development.--bbc

 

 

 

Facebook suspends Trump accounts for two years

Facebook Inc has suspended former US President Donald Trump's Facebook and Instagram accounts for two years.

 

He was barred indefinitely from both sites in January in the wake of posts he made on the US Capitol riots, but last month Facebook's Oversight Board criticised the open-ended penalty.

 

Facebook said Mr Trump's actions were "a severe violation of our rules".

 

Mr Trump said the move was "an insult" to the millions who voted for him in last year's presidential election.

 

Facebook's move comes as the social media giant is also ending a policy shielding politicians from some content moderation rules.

 

It said that it would no longer give politicians immunity for deceptive or abusive content based on their comments being newsworthy.

 

Mr Trump's ban was effective from the date of the initial suspension on 7 January, Facebook's vice-president of global affairs Nick Clegg said in a post.

 

"Given the gravity of the circumstances that led to Mr Trump's suspension, we believe his actions constituted a severe violation of our rules which merit the highest penalty available," it added.

 

media captionFacebook's Nick Clegg explains former US President Donald Trump's two year suspension

"If we determine that there is still a serious risk to public safety, we will extend the restriction for a set period of time and continue to re-evaluate until that risk has receded."

 

On his return, Mr Trump will be held to "a strict set of rapidly escalating sanctions," for any violations, Mr Clegg's statement noted.

 

How has Mr Trump responded?

In a statement issued from his Save America political action committee, Mr Trump said: "Facebook's ruling is an insult to the record-setting 75m people, plus many others, who voted for us..."

 

"They shouldn't be allowed to get away with this censoring and silencing, and ultimately, we will win. Our country can't take this abuse anymore!"

 

In a second statement on the two-year ban, Mr Trump attacked Facebook's founder.

 

"Next time I'm in the White House there will be no more dinners, at his request, with Mark Zuckerberg and his wife," the former president said. "It will be all business!"

 

The move by Facebook allows Mr Trump to return to the platform before the 2024 presidential election.

 

It also comes as he prepares to again hold the large scale in-person rallies that were a signature of his campaigns and presidency. One of his first is planned for Dallas, Texas, in early July, according to local media.

 

Earlier this week, it emerged that the communications platform set up by Mr Trump in the wake of his social media bans - From the Desk of Donald J Trump - has been permanently shut down.

 

In addition to Facebook, which has over two billion monthly users, Mr Trump has also been banned from Twitter, YouTube, Snapchat, Twitch and other social media platforms over the January riot.

 

Last month, Florida Governor Ron DeSantis, a Republican Trump ally, h signed the first law in the US that punishes tech companies for de-platforming politicians.

 

Facebook's dilemma on Trump was complex, involved trade-offs, and was guaranteed to upset millions of people. The fact is - whatever their decision - it was bound to be polarising.

 

But just to be clear: today Facebook, the world's biggest social network, has denied access to its megaphone to a man who 74 million people voted for. They didn't just know him, or approve of him; they voted for him to be US president. That is a big call.

 

Facebook says public figures who violate its rules by inciting unrest or violence will be suspended for a month or, in more serious cases, up to two years.

 

It comes as part of an effort to undo a previous policy of allowing newsworthy political speech despite a potential that it may cause harm.

 

Posts that are deemed worthy of an exception, despite possible violations, may still be allowed but will be given a warning label by Facebook. The company says it will no longer treat "content posted by politicians any differently".

 

"Instead, we will simply apply our newsworthiness balancing test in the same way to all content, measuring whether the public interest value of the content outweighs the potential risk of harm by leaving it up."

 

The company's Oversight Board found that Mr Trump's initial ban was appropriate, but that there was no rationale for the ban to remain indefinitely.

 

The independent board, which is funded by Facebook, has 20 members who are able to make binding decisions on content. Among the members are legal scholars, journalists, freedom of speech experts and a former prime minister of Denmark.

 

The announcement comes on the same day that regulators in Europe and the UK begin formal anti-trust inquiries into whether Facebook misused customer data.-bbc

 

 

 

US economy adds fewer jobs than forecast despite reopening

The US economy saw an increase in hiring in May as restrictions eased, although fewer jobs were added than expected.

 

Employers created 559,000 jobs, driven by reopenings at restaurants, bars and hotels in particular.

 

That failed to meet economists' expectations of 675,000 jobs being added.

 

However, the hiring did help lower the unemployment rate to 5.8% from the 6.1% seen in April.

 

Despite the modest increase, President Biden described the report as "great news", adding: "This is progress, historic progress [after] our worst crisis in 100 years."

 

In all, 9.3 million people remain unemployed - down considerably from the highs seen in April last year, although still well above the pre-pandemic measure of 5.7 million in February 2020.

 

Some of the worst-hit sectors during the pandemic - such as hospitality and education - saw significant numbers of jobs being added as a vaccination drive continued and restrictions eased.

 

The number of jobs in restaurants, cafes and bars jumped by 292,000, for example.

 

And the monthly report from the US Bureau of Labor Statistics showed that the number of long-term unemployed fell by 431,000, although it still remains at 3.8 million.

 

Robert Alster, chief information officer at wealth manager Close Brothers Asset Management, said: "April's figures were a shock, coming in at a quarter of the expected increase despite stellar economic growth and otherwise positive employment data.

 

But he suggested: "Now we are seemingly back on track and signals are pointing towards a bright future for the US."

 

In April, just 266,000 jobs were added. That was such a surprise, and so out of step with what economists were expecting, that many had wondered if it would be revised by much on Friday when May's data was released.

 

Revisions are common as the government's number crunchers get more data to work with.

 

But not this time. April's job number has only been increased by 12,000 jobs. And on top of that, May's new job figures were also mediocre - and less than forecast.

 

All of which suggests that the US economic recovery may not be quite the post-Covid boom many were expecting. Not yet anyway.

 

Some analysts said there was still an "ongoing mismatch" between supply and demand for workers.

 

Average hourly earnings rose 0.5% in May from a month earlier, to $30.33, the new figures showed.

 

"The data for the last two months suggest that the rising demand for labour associated with the recovery from the pandemic may have put upward pressure on wages," the report said.

 

Big food firms such as McDonald's and Chipotle have increased wages, while smaller businesses have started to offer sign-on bonuses in a bid to lure workers back.

 

John Leiper, chief investment officer at Tavistock Wealth, said: "Today's miss speaks to the ongoing mismatch between strong demand for labour and the reality of lacklustre supply."

 

He suggested this could be due to several factors - including unemployment benefits, childcare issues or concerns over working conditions.

 

Under the $1.9tn coronavirus rescue package that President Joe Biden signed into law in March, some workers can get a $300 weekly supplemental benefit if they are out of a job.

 

But Mr Leiper pointed out that at least 25 states had opted to cut unemployment benefits prematurely, so people are not persuaded to stay at home.

 

"I expect non-farm payrolls to accelerate from here, as supply rises to meet demand, alongside a continuation of the economic reopening narrative."-bbc

 

 

 

Brexit: UK announces trade deal with Norway, Iceland and Liechtenstein

The UK has signed a post-Brexit trade deal with Norway, Iceland and Liechtenstein, the government has announced.

 

The agreement will be a major boost for trade between the four non-EU nations, which is already worth £21.6bn, UK minister Liz Truss said.

 

She claimed it would boost sectors such as digital and cut tariffs on UK farm products such as cheese and meat.

 

Britain is Norway's top trading partner outside the European Union (EU).

 

The UK government said reduced import tariffs on shrimps, prawns and haddock would cut costs for UK fish processing, helping to support jobs in Scotland, East Yorkshire and northern Lincolnshire.

 

British beef

As Britain is no longer part of the European Common Fisheries Policy, it must deal directly with Norway and UK fleets are keen to have access to the country's sub-Arctic seas.

 

However, many Norwegian farmers have expressed concerns at opening up the domestic market to British beef and cheese.

 

State broadcaster NRK says the country's market of 5.4 million people is small but potentially lucrative, with strong purchasing power.

 

The countries involved are the three non-EU members of the European Economic Area, which allows them to be part of the EU's single market.

 

Norwegian Prime Minister Erna Solberg said "the deal allows for growth in trade for both our countries".

 

However, the Norwegian government said the deal with the UK would not restore all the advantages it had when both countries were in the EEA.

 

In terms of their overall trade volumes, this deal is more significant for Norway and Iceland than it is for the UK.

 

But politically, it's really important for the post-Brexit British government to show that new trade deals are being done quickly. Even if - as the Norwegian side points out - it is less open than the previous relationship inside the same single market.

 

The new deal builds on the rollover agreement the UK signed before it left the EU's economic zone, and the government is keen to stress it includes important elements on digital trade which go beyond what the EU has.

 

But digital and data provisions are relatively new elements in free trade agreements, and it's still unclear how effective they are in the long term.

 

"At first sight, the deal looks cautiously ambitious," says trade expert David Henig from the European Centre for International Political Economy.

 

"In many fields, from climate change to SMEs [small businesses] to digital, it sets out some goals, without it being obvious that the underlying provisions will deliver them."

 

So, it's a decent start. But it's the implementation that counts.

 

"Prior to the UK's exit from the EU, Norway enjoyed free movement of goods, services, capital and persons to the UK through the EEA agreement," Norway said.

 

"A free trade agreement will not provide similar access to the British market."

 

The UK's international trade secretary, Liz Truss, said the deal would be "a major boost for our trade with Norway, Iceland and Liechtenstein, growing an economic relationship already worth £21.6bn, while supporting jobs and prosperity in all four nations at home".

 

Iceland's Foreign Minister, Gudlaugur Thor Thordarson, said an agreement with the UK had been a priority for his country and would be "crucial for both Icelandic companies and consumers".-bbc

 

 

 

Facebook probed by UK and EU competition watchdogs

Facebook is being investigated by UK and European competition watchdogs over concerns it uses advertising data to gain an unfair advantage over rivals.

 

The Competition and Markets Authority is looking into whether it uses information to benefit its own services, such as Facebook Marketplace.

 

The European Commission is examining if Facebook violated EU rules by gathering data from advertisers to compete with them in providing classified ads.

 

Facebook said it would cooperate fully.

 

It said it will demonstrate that both the UK and EU investigations are "without merit".

 

The CMA said Facebook collects data through its digital advertising service as well as its single sign-on option. This allows people to sign-in to other websites, services and apps using their Facebook log-in details.

 

The watchdog said it is examining whether the company has unfairly used the data to compete with other businesses through Facebook Marketplace, where firms and users put up classified adverts to sell items, as well as Facebook Dating which was launched in Europe last year.

 

The European Commission said it had opened a formal antitrust investigation "to assess whether Facebook violated EU competition rules by using advertising data gathered in particular from advertisers in order to compete with them in markets where Facebook is active such as classified ads".

 

It said: "The formal investigation will also assess whether Facebook ties its online classified ads service "Facebook Marketplace" to its social network, in breach of EU competition rules."

 

Facebook said its "Marketplace and dating offer people more choices, both products operate in highly competitive environment with many large incumbents".

 

The CMA and the European Commission said they will work closely with each other as their "independent investigations develop".

 

Andrea Coscelli, chief executive of the CMA, added: "We intend to thoroughly investigate Facebook's use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors.

 

"Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice."

 

The opening of European Competition Commissioner Margrethe Vestager's first competition probe into the world's largest social network is latest fight with the US tech giants.

 

She has already his Google with more than €8bn (£6.8bn) in fines, and is also investigating Amazon and Apple.

 

"In today's digital economy, data should not be used in ways that distort competition," Ms Vestager said.-bbc

 

 

 

Some Portugal passengers still plan to travel despite rule change

Half of passengers booked to travel to Portugal this month with Tui are going ahead with their trips, despite the country being moved to the amber list.

 

Tui said it was not scheduling extra flights to bring holidaymakers home ahead of the change on Tuesday.

 

The travel firm currently has about 8,000 UK visitors in Portugal, although it will fall to 2,000 after Sunday as many return at the end of half term.

 

British Airways and Easyjet are both putting on extra flights.

 

But holidaymakers scrambling for flights home from Portugal before the new rules come in are facing expensive tickets.

 

A seat on a Ryanair flight from the capital Lisbon to Manchester on Monday costs £339, while travel on the same route is available for just £75 on Wednesday.

 

British Airways is charging £471 for flights from Faro to London Heathrow on Sunday and Monday, but the price drops to £137 on Tuesday.

 

BA said: "We are increasing the number of flights from Portugal to help customers who wish to return to the UK before it moves to the amber list at 04:00 on Tuesday 8 June."

 

It has arranged three additional flights from tourist hotspot Faro on Saturday, Sunday and Monday.

 

Portugal queries amber status as UK tightens rules

Travel sector 'frustrated' over rule changes

Meanwhile, Easyjet has added additional seats from Portugal to the UK on Saturday, Sunday and Monday.

 

More than 1,000 additional seats have been added on routes from Faro to London Gatwick, London Luton, Bristol and Manchester by flying larger aircraft and adding extra flights.

 

"With many British tourists currently in Portugal, our priority is to help the customers who need to return ahead of the Tuesday deadline," said Johan Lundgren, easyJet chief executive.

 

Jet2 CEO Stephen Heapy said his airline first heard about the change to Portugal's status through the media and that the move was "soul-destroying".

 

"The Government set out its roadmap a few weeks ago saying we wouldn't be doing the eternal hokey cokey — in and out like we were last year — and lo and behold, three weeks after commencement of flying to Portugal, we're out again," Mr Heapy said.

 

Ryanair boss Michael O'Leary said the decision to move Portugal to the amber list "isn't based on any science or public health" and accused the government of making up policy "as they go along".

 

"What we don't understand is why the UK, which has been so successful with vaccines, is expecting its vaccinated citizens travelling to Portugal coming back to quarantine," he told BBC Breakfast.

 

Mr O'Leary said the decision was "more mismanagement of the Covid recovery" and had created "unnecessary disruption and stress for hundreds of thousands of British families".

 

Aviation lobby group Airlines UK has written to the transport secretary Grant Shapps asking for the full criteria which determines when a destination is removed or added to the green list to be published.

 

Holidays delayed

Low-cost airline Jet2 has delayed the planned restart of its flights and holidays from 24 June to 1 July, following the government changes to travel lists announced on Thursday.

 

Because Turkey was left on the red list, it said it would wait until 22 July before restarting flights and holidays there.

 

"We know that there is enormous pent-up demand for our flights and package holidays," said Steve Heapy, chief executive of Jet2. "Our customers want nothing more than to get away on their much-needed holidays."

 

He called for "openness and transparency" on coronavirus data, so that travellers and the travel industry could better understand the decisions being made.

 

"We agree that public health must be the number one priority. However, despite all the evidence and data showing that travel can restart safely and at scale, the UK continues to remain largely grounded whilst the rest of Europe opens up," he said.

 

Heathrow boss John Holland-Kaye accused the government of "all but guaranteeing another lost summer for the travel sector".--bbc

 

 

UN: Cost of food rises at fastest pace in over a decade

Global food prices have jumped at their fastest monthly rate in over a decade, according to the United Nations.

 

The UN uses a broad index of global food costs, which have also climbed for 12 months in a row.

 

Suppliers have been affected by disruptions to production, labour and transport during the pandemic.

 

Concerns are growing about broader inflation and how higher grocery bills will impact the world's economic recovery.

 

The UN Food and Agriculture Organization's (FAO) food price index tracks prices around the world of a range of food including cereals, oilseeds, dairy products, meat and sugar.

 

According to the index, food prices in May were 4.8% higher than April - the biggest monthly rise since October 2010 - and 39.7% higher than this time last year (May 2020).

 

All five components of the index rose, led by the surging cost of vegetable oils, grain and sugar.

 

That pushed the index up to its highest overall level since September 2011.

 

The increased costs are a result of renewed demand in some countries and a backlog of low production.

 

Market and supply disruptions due to restrictions on movement have created local shortages and higher prices.

 

Experts had warned that high demand and low production would lead to rising inflation as economies exit lockdown.

 

However, some industries could see a strong recovery. The FAO forecasts record global cereal production this year, which may help to ease upward price pressures.

 

Earlier this week, the British Retail Consortium (BRC) warned UK consumers that they could face more expensive shopping bills in the autumn as costs climb.

 

What is inflation?

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

 

As well as giving a snapshot of the price of our shopping and services, it influences interest rates and therefore our mortgages and is used to set regulated items, such as train tickets.

 

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.

 

A little inflation, however, typically encourages people to buy products sooner and makes it easier for companies to increase wages. And both of those things boost economic growth.

 

Most countries' central banks have an inflation target of between 2% and 2.5%.-bbc

 

 

Google diversity head removed over anti-Semitic blog post

Google has removed its head of diversity over a 2007 blog post that said Jewish people had "an insatiable appetite for war and killing".

 

In a post about the Israeli-Palestinian conflict that resurfaced this week, Kamau Bobb also claimed Jewish people had an "insensitivity" to suffering.

 

The post has now been deleted.

 

On Thursday, a spokesperson for Google told the BBC that Mr Bobb would "no longer be part of our diversity team going forward".

 

"We unequivocally condemn the past writings by a member of our diversity team that are causing deep offence and pain to members of our Jewish community," they said.

 

"These writings are unquestionably hurtful. The author acknowledges this and has apologised. He will no longer be part of our diversity team... and will focus on his Stem [science, technology, engineering and maths] work.

 

"This has come at at a time where we've seen an alarming increase in anti-Semitic attacks," the spokesperson added. "Anti-Semitism... has no place in society and we stand with our Jewish community in condemning it."

 

Mr Bobb - who joined Google in 2018 - has apologised to staff for the blog post.

 

What did the blog post say?

In the 2007 post titled If I were a Jew, Mr Bobb described how he believed Jewish people should feel about the conflict between Israel and the Palestinians, the Times of Israel reports.

 

"If I were a Jew I would be concerned about my insatiable appetite for war and killing in defence of myself," he wrote.

 

"Self-defence is undoubtedly an instinct, but I would be afraid of my increasing insensitivity to the suffering [of] others."

 

When the post resurfaced, campaigners were quick to call for Mr Bobb's resignation.

 

I searched for "antisemitism" and "hypocrisy".

Here's what I found.

 

Michael Dickson, head of the pro-Israel organisation Stand With Us, tweeted that the blog made "revolting, and anti-Semitic, comparisons between Nazi actions and that of the world's only Jewish country".

 

The US-based Simon Wiesenthal Center, meanwhile, also called for Mr Bobb to be removed from his post.

 

Mr Bobb has not publicly responded to the criticism.

 

However, according to the New York Post, he emailed the Jewish staff group at Google to apologise.

 

"What I wrote crudely characterised the entire Jewish community. What was intended as a critique of particular military action fed into anti-Semitic tropes and prejudice," he reportedly wrote in the email.

 

"I think we can all agree, there is no easy solution to this situation. But that's beside the point," he added. "The way I expressed my views on that conflict were hurtful."-bbc

 

 

Hong Kong sets $1.3m parking space price record

A parking space has reportedly sold for a record-breaking $1.3m (HK$10.2m; £930,000) in Hong Kong.

 

It was one of several spots sold at an ultra-luxury development in the city's affluent The Peak residential area, local media reported.

 

The Mount Nicholson development overlooking the city's Victoria Harbour has some of Asia's most valuable homes.

 

Hong Kong is so crowded that space, whether it is for living in or parking a car, can attract a huge premium.

 

The global financial hub often tops lists of the world's most expensive places to live.

 

The previous record price for a parking space was also set in Hong Kong, when a spot fetched $980,000 in 2019, according to Bloomberg.

 

Wheelock Properties, which is the sales agent for Mount Nicholson, has not yet responded to a request for comment from the BBC.

 

Top bankers exempt from quarantine in Hong Kong

Like many major cities, Hong Kong has also developed a huge speculative market for property.

 

In recent months, its luxury home market has seen record-breaking transactions as buyers' confidence has returned with an easing of the pandemic.

 

In May, a house on the Peak secured a record rental price of $210,000 a month.--bbc

 

 

Musk breakup tweets bruise bitcoin

Bitcoin fell more than 7% on Friday, with tweets by Tesla boss Elon Musk that appeared to lament a breakup with the cryptocurrency again moving markets.

 

Tesla’s big position in bitcoin and Musk’s large personal following set crypto markets on edge whenever he tweets, and the price fell after he posted “#Bitcoin”, a broken-heart emoji and a picture of a couple discussing a breakup.

 

loading

Musk followed up by posting a breakup comic strip and replying "nice" to an illustration of rival crypto dogecoin posted by crypto exchange Coinbase (COIN.O). It was unclear what, if anything, any of the tweets meant.

 

Musk has previously said Tesla would not sell its bitcoin, but his tweets were enough to unsettle markets still fragile following May's crash.

 

"When Elon Musk tweets any crypto-related content, the market ... expects a reaction," said Nick Spanos, co-founder of ZAP Protocol, a crypto project in Switzerland.

 

Bitcoin's fall pushed it below its 20-day moving average to as low as $36,263, and took some of the edge off its week-to-date gains. It is up 2% so far this week.

 

 

'TROLLING THE COMMUNITY'?

 

Musk has been a major promoter of cryptocurrencies but has turned critical of bitcoin since suspending Tesla plans to take it in payment for cars, owing to concerns about its energy use.

 

Many crypto specialists have struggled to understand the motives behind his tweets.

 

"He's trolling the community," said Bobby Ong, co-founder of crypto data aggregator and analytics website CoinGecko.

 

Bitcoin and several other cryptocurrencies are still recovering from a crash last month in the wake of that decision and on news of renewed regulatory scrutiny in China.

 

Telsa (TSLA.O) stock has now fallen by a third since it announced a $1.5 billion bitcoin purchase in February, and bitcoin is more than 40% below April's record peak of $64,895.22.

 

The second biggest cryptocurrency, ether , which tends to move in tandem with bitcoin, also extended losses through the day. It was last down 8% at $2,626 though on course for a second consecutive weekly gain.

 

Dogecoin, the cryptocurrency perhaps most sensitive to Musk’s opinions as he helped to turn the coin started as a joke into a multi-billion dollar market valuation, also fell by more than 10% to around $0.36 on Friday.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

U.S. leisure and hospitality pay surges to a record. Now will workers come?

Hotels, restaurants and other businesses are boosting pay as they try to rebuild their staffs and meet increasing demand from Americans ready to venture out as pandemic-related restrictions are lifted and more people are vaccinated.

 

But it is unclear if the increases will be sufficient to entice enough workers back to close the employment gap remaining in the sector hit hardest by COVID-19 job losses.

 

Average hourly earnings for workers in leisure and hospitality rose to $18.09 in May, the highest ever and up 5% from January alone, according to Labor Department data released on Friday. Pay rose even faster for workers in non-manager roles, who saw earnings rise by 7.2% from January, far outpacing any other sector.

 

That higher pay could be a sign that companies are lifting wages as they seek to draw people back to work after more than a year at home. Some businesses are struggling to keep up with higher demand as more consumers, now fully vaccinated, get back to flying, staying in hotels and dining indoors. Job gains in leisure and hospitality this year have so far outpaced gains in other sectors.

 

But it is too soon to know whether the boost will be enough to help speed up hiring at a time when many workers are still facing other obstacles, including health concerns and having to care for children and other relatives.

 

"The fact of the matter is, the pandemic is still going on," said Daniel Zhao, a senior economist for Glassdoor. "The economy is running ahead of where we are from a public health situation."

 

Some 2.5 million people said they were prevented from looking for work in May because of the pandemic, according to the Labor Department. And just about 40% of Americans are now fully vaccinated, meaning that many workers may still be concerned about the health risks they might face on the job, Zhao said.

 

STILL IN A HOLE

 

Employment in leisure and hospitality is still in a deep hole when compared with pre-pandemic levels.

 

The industry added 292,000 jobs in May, with about two-thirds of that hiring happening in restaurants and bars. But overall employment is still down 2.5 million jobs, or 15% from pre-pandemic levels, more than any other industry.

 

If job gains continued at the pace seen in May, it would take more than eight months to replace the jobs lost. And it's not yet clear that all of the jobs will be recovered, especially if business travel remains depressed or if other habits change after the pandemic.

 

Some people who previously worked at hotels or restaurants moved on to other types of jobs during the pandemic, such as packaging goods at a warehouse, and it's too soon to know whether they will switch back as more of the economy reopens, said Zhao.

 

Some Republicans and businesses struggling to find workers say generous unemployment benefits are slowing down the labor market recovery by making it easier for workers to stay home. Others say the benefits may be helping workers cover the bills while they wait for schools to reopen, receive vaccinations and resolve other obstacles that made it difficult for them to work during the pandemic.

 

"People were making decisions based on those other factors, but they had the wherewithal to make those choices because of the extended unemployment benefits," Cleveland Federal Reserve Bank President Loretta Mester said during an interview with CNBC.

 

Either way, any frictions caused by unemployment benefits may be resolved over the next several months as those benefits are reduced. About half of states are putting an early end to a $300 federal supplement to weekly unemployment benefits, winding them down as soon as June 12. The supplement expires nationwide on Sept. 6.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

Ackman reinvents SPAC in Universal Music deal talks

William Ackman’s Pershing Square Tontine Holdings (PSTH.N) said on Friday it was in talks to buy 10% of Universal Music Group at a 35 billion euro ($42 billion) valuation, in a departure from the playbook of special purpose acquisition companies (SPACs).

 

Tontine became the biggest ever SPAC when it raised $4 billion in an initial public offering (IPO) last summer, with Ackman's hedge fund Pershing Square committing a minimum of an additional $1 billion.

 

It did so to take a company public. Yet Universal is already in the process of being listed in Amsterdam by its French parent Vivendi SA (VIV.PA), and it will not rely on Tontine to go public, as most companies do in their SPAC deals.

 

Instead, Tontine shareholders will receive Universal shares once the music label's stock market flotation is completed. Tontine will carry on in search of another deal, with $1.5 billion in capital left to deploy. Tontine investors will also receive warrants in a new blank-check company launched by Ackman that will pursue another, yet-to-be-determined deal.

 

The unusual deal would cap a worldwide hunt for a suitable target by Ackman, who previously flirted with home rental giant Airbnb (ABNB.O) and Southeast Asian ride-hailing and food delivery firm Grab Holdings as targets.

 

Tontine's shares were trading down more than 14% at $21.51 in afternoon trading on Friday, as investors fretted over whether the SPAC was offering Universal too high a valuation.

 

The closer Tontine's shares trade to its $20 IPO price, the higher the chance that SPAC investors will choose to redeem their shares, taking away money that Pershing Square would use to fund the deal. Pershing Square said on Friday it would backstop any potential financing gap with its other funds.

 

Pershing Square said it would invest $4 billion to buy the Universal stake. Investors in the SPAC will get Universal shares when they are listed, but will not be able to exercise their current warrants. Investors will also get rights to buy shares in a Special Purpose Acquisition Rights Company (SPARC) launched by Pershing Square, to do yet another deal down the line.

 

The SPARC will have $10.6 billion in capital available to spend on a new target. It will have no deadline to spend the money and will become publicly listed down the line, Ackman said.

 

Ackman added that he plans to make a full presentation on the deal once it has been finalized in a few weeks.

 

A frenzy of SPAC listings in the United States has seen over $300 billion raised through the listing of blank-check acquisition vehicles in 2020 and 2021, according to Refinitiv data.

 

The SPAC listing frenzy has cooled in recent months, with new issuance dropping dramatically and existing blank check vehicles trading down as a higher interest rate environment hurt appetite for riskier investments. The IPOX SPAC index is down 23% from its February peak. (.SPAC)

 

AMSTERDAM LISTING

 

Vivendi, controlled by French billionaire Vincent Bollore, has benefited from growing streaming revenues at the world's biggest music label, which is behind artists such as Taylor Swift and Lady Gaga.

 

It has already sold chunks of Universal Music to a consortium led by Chinese giant Tencent (0700.HK), and plans to list Universal in Amsterdam by September as part of a two-step transaction to distribute 60% of the label to existing investors.

 

Goldman Sachs in April raised its estimate of Universal's valuation to 44 billion euros, amid a faster shift to music streaming.

 

With about 2 billion euros of debt for Universal, the implied equity value for the music label is roughly 33 billion euros, along the lines of the valuation given by Vivendi last month, Bernstein said in a note. read more

 

"Universal Music Group is one of the greatest businesses in the world," Ackman said in a statement.

 

A Vivendi spokesman confirmed on Friday there were no changes to the plans for a Universal IPO by Sept. 27 after the deal with Ackman. The company, which owns 80% of Universal, had already flagged it could sell an additional 10% of the group to an American investor prior to the IPO.

 

Bringing in Ackman will diminish the stakes held by Vivendi, at the end of the distribution-in-kind, giving Vivendi 10%, Pershing Square 10%, Bollore 16% and the Tencent-led consortium 20%.

 

Vivendi shareholders are due to vote on the transaction at a June 22 investor meeting.

 

The Universal IPO plan has raised hackles of activist fund Bluebell, however, which said it penalized minority shareholders as the distribution-in-kind structure was not tax efficient.

 

Bluebell, which has declined to reveal the size of its stake in Vivendi, has called on France's markets watchdog to examine disclosures around the deal. read more

 

($1 = 0.8258 euros)

 

 

 

Fewer Americans blame COVID for preventing them from seeking work

Fewer Americans are citing the coronavirus pandemic as the reason why they're not looking for work as more people are getting vaccinated and unemployment steadily declines.

 

The Labor Department on Friday reported that 2.5 million people did not look for work in May because of COVID-19, down from 2.85 million the month before and 9.7 million a year ago. That represents about 2.5% of the roughly 100 million working-age Americans who were not in the labor force in May versus 9.5% of those not working or looking for a job a year ago.

 

"With more ... of the U.S. adult population now fully vaccinated and daily case counts steadily declining, we believe hurdles related to COVID have continued to subside and led some workers to return to the labor force in May," said Shannon Seery, Economist at Wells Fargo.

 

Nearly 52% of the U.S. population has received at least one dose of a COVID-19 vaccination, according to a Reuters tally, while almost 42% have been fully vaccinated.

 

The figures on those not looking for work due to COVID came alongside the government's monthly employment report, which showed nonfarm payrolls increased by 559,000 jobs in May after rising 278,000 in April. read more

 

The Labor Department in May 2020 began asking households an additional set of questions about how COVID was affecting their ability to work, and last month's data showed a fourth straight monthly decline in those blaming the pandemic for keeping them on the sidelines of the job market.

 

"An improving health situation would make COVID less of a factor in individuals’ decision not to look for work," said Nancy Vanden Houten, Lead Economist at Oxford Economics.

 

Additionally, the report showed just 25.2 million Americans either teleworked or worked from home in May as a result of COVID, representing 16.6% of the nearly 152 million people working last month. That's down by roughly half from last May's 48.7 million people who were working remotely, then more than a third of all those employed.

 

More employers have begun calling workers back to offices, and waves of businesses that need staff on site, like restaurants, have reopened in recent weeks as pandemic restrictions have eased.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

JPMorgan freezes donations to Republicans who contested 2020 election

JPMorgan Chase & Co (JPM.N) will resume making political donations to U.S. lawmakers but will not give to Republican members of Congress who voted to overturn President Joe Biden’s election victory, according to an internal memo on Friday seen by Reuters.

 

The country's largest lender was among many corporations that paused political giving following the deadly Jan. 6 Capitol riots when supporters of former president Donald Trump tried to stop Congress from certifying the election.

 

Just hours later, 147 Republicans, the vast majority of them in the House of Representatives, voted to overturn the Electoral College results which Trump falsely claimed were tainted by fraud.

 

Following a review, JPMorgan will this month resume giving through its Political Action Committee (PAC) but will continue its freeze on donations to a "handful" of the 147 lawmakers whom it had previously supported, the bank said.

 

The pause will last through the 2021-2022 election cycle, which includes November's midterm elections, after which JPMorgan will review whether to resume contributions to the lawmakers concerned on an individual basis, it said.

 

"This was a unique and historic moment when we believe the country needed our elected officials to put aside strongly held differences and demonstrate unity," the bank wrote of the Jan. 6 vote to certify Biden's win.

 

Also on Friday, Citigroup said it was resuming PAC contributions but did not specify how it would treat the lawmakers who tried to block Biden taking office.

 

Citigroup said it would evaluate whether to give to all lawmakers case-by-case based on a new set of criteria which includes "character and integrity" and "a commitment to bipartisanship and democratic institutions."

 

JPMorgan noted that its PAC is an important tool for engaging in the political process in the United States. PACs are political committees organized for the purpose of raising cash to support or in some cases oppose election candidates.

 

"Democracy, by its nature, requires active participation, compromise, and engaging with people with opposing views. That is why government and business must work together," JPMorgan wrote.

 

As part of its revamped spending strategy, the bank will also expand donations beyond lawmakers who oversee financial matters to those active on issues the bank considers "moral and economic imperatives for our country," such as addressing the racial wealth gap, education and criminal justice reform.

 

Since the initial January backlash, corporations have been grappling with how to resume PAC spending, seen by lobbyists as important for gaining access to policymakers, without alienating other stakeholders, including their employees who fund the PACs.

 

Other big financial companies that paused donations have slowly resumed spending. Morgan Stanley's PAC resumed donations to some lawmakers in February, while the American Bankers Association PAC, one of the biggest in the country, started giving again in March, federal records show.

 

While JPMorgan did not name lawmakers in its memo, the bank's new policy risks alienating Republicans with sway over banking policy, some of whom are already angered by its active stance on issues like climate change and racial equity.

 

Of the 147 lawmakers, JPMorgan gave $10,000 each to House finance committee members Blaine Luetkemeyer and Lee Zeldin, and House Republican leader Kevin McCarthy, among others, during the 2019-2020 election cycle, according to the Center for Responsive Politics (CRP). Representatives for the lawmakers did not respond to requests for comment.

 

All told, JPMorgan's PAC gave nearly $1 million to federal candidates and committees backing candidates during the 2019-2020 election cycle, according to CRP.

 

Of the $600,300 it gave to federal candidates, nearly 60% went to Republicans and the rest to Democrats, according to the CRP data, a mix that is likely to swing further to the left as the bank supports a broader range of social and economic issues.

 

Commercial banks overall have ramped up political spending in recent years, dishing out $14.6 million to federal candidates in the 2020 cycle, the second highest amount since 1990, the data shows.

 

Following the 2008 financial crisis, that mix favored Republicans but in recent years banks have increased spending on Democrats as they look to rebuild bipartisan support in Congress.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

AMC's wild week ends with nearly 85% gain in renewed meme stock craze

Shares of AMC Entertainment (AMC.N) edged lower on Friday, closing out a wild week with a gain of just over 83% as the action reinvigorated the meme stock craze and the investors behind it

 

"AMC has a very strong following of believers," said Dennis Dick, proprietary trader at Bright Trading LLC. "They're trying to hold strong, and they believe they're going to drive this to the moon."

 

The movie theater chain’s shares ended the day down 6.7% to $47.91 after trading in both positive and negative territory during the session.

 

AMC has been at the center of a fresh wave of buying by retail investors who hyped the stock in forums such as Reddit’s WallStreetBets, breathing new life into a phenomenon that began with January’s more than 1,600% gain in GameStop (GME.N). Meme stocks got the name because their explosion in trading volume stems from interest and promotion on social media.

 

The past week’s blistering rally saw the market capitalization of AMC, which was at the brink of bankruptcy not long ago, swell to nearly $24 billion and put its year-to-date gain at 2,160%. The rise in part reflects optimism about the re-opening of public venues like cinemas after pandemic shutdowns, but most analysts say that the scale of the rally is out of line with AMC's fundamentals.

 

Despite the big gains, short interest in AMC held relatively steady during the week, with 88.20 million shares shorted by the end of Thursday's session equating to 17.65% of AMC's float, according to the latest available data from S3 Partners.

 

"We have seen AMC short-covering this week, but by no means are we seeing a wholesale short squeeze in this stock at the moment," said Ihor Dusaniwsky, managing director of predictive analytics at S3.

 

A short squeeze, which occurs when a rising share price forces bearish investors to unwind their bets, helped fuel the big rally in GameStop earlier this year.

 

Short interest in AMC stood at around 20% earlier in the week, the firm's data showed. Shorts are now down $3.98 billion in year-to-date mark-to-market losses.

 

Some Wall Street banks, including Bank of America Corp, Citigroup Inc and Jefferies Financial Group LLC, have tightened their rules for who can bet against some meme stocks, Bloomberg reported Friday, citing people familiar with the moves.

 

TD Ameritrade put in place trading limitations on AMC Entertainment Holdings' shares, the retail brokerage's website showed on Friday. read more

 

SECOND SHARE OFFERING

 

Meanwhile, several AMC executives on Friday reported personal stock sales totaling more than 88,0000 shares after the close of trading.

 

AMC on Thursday completed its second share offering in three days, taking advantage of a nearly 400% surge in its share price since mid-May. read more

 

"AMC has made the best of its current 'meme stock' status by selling shares at a premium, and has raised significant capital doing so," said Wedbush analyst Alicia Reese, who raised her firm’s price target on AMC to $7.50 from $6.50.

 

"We expect significant volatility in shares of AMC to continue, driven by trading momentum unrelated to AMC's fundamentals," Reese said.

 

BlackBerry Ltd (BB.TO), a cybersecurity software company whose shares have been caught up in a social media-driven rally, slid 12.5%, leaving it with a 37.9% gain for the week . The company’s shares are up 98.3% year-to-date.

 

Shares of meme stocks GameStop and Koss Corp (KOSS.O) were down 3.8% and 12.6%, respectively.

 

This week’s rally in AMC and other social media darlings sparked celebration among some WallStreetBets users, while others exhorted one another to hold onto their shares and looked forward to next week.

 

“The shorts are playing a dangerous game and soon they will be burnt. They are shaking off panic sellers,” wrote Reddit user KocaKolaKlassic in a thread focused on Blackberry shares. "Eventually there will be very few and to the moon we go.”

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Wall St Week Ahead Investors eye Washington talks after big rally in infrastructure shares

Investors will watch Washington in the coming week for clues on whether an outsized rally in shares of companies that would benefit from President Joe Biden's proposed $1.7 trillion infrastructure plan has more room to run.

 

Expectations of spending from Washington on bridges, roads, and tunnels bolstered so-called value stocks, especially the industrials and materials sectors, both up around 20% this year, ahead of the 12.5% gain for the S&P 500.

 

Among the biggest winners have been shares of United States Steel Corp (X.N), up nearly 200% since the start of the year, while steel producer Nucor Corp's stock has gained around 104%.

 

Those large gains may leave many industrials and materials stocks vulnerable to a selloff if a large spending bill in Washington fails to materialize, said John Mowrey, chief investment officer of NFJ Investment Group, which manages $8.2 billion in assets.

 

"It's scary how much of (the spending bill) is already priced into the market," he said.

 

U.S. Transportation Secretary Pete Buttigieg circled June 7 as the date by which negotiations with Senate Republicans must have a "clear direction." If not, he suggested, Senate Democrats could propose a more targeted infrastructure bill. L2N2NL2PG

 

Republican leaders have endorsed roughly $257 billion in new spending, while calling major tax hikes to finance the construction of roads, bridges, water pipes and other projects a non-starter.

 

Progressive Democrats, meanwhile, are warning they would block any bill they view as inadequate. L2N2NL1UT

 

Talks continued between Biden and Senator Shelley Capito, the main Republican negotiator. L2N2NL2PG

 

Mowrey is focusing on companies he believes are undervalued that would benefit from an upgrade of technology-focused infrastructure like cell phone towers and data centers.

 

A Wall Street sign is pictured outside the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri

Shares of American Tower Corp (AMT.N), one of Mowrey's holdings, are up 17% for the year.

 

Investors have embraced infrastructure stocks at a time when concerns about rising inflation, lingering disruptions in global supply chains from the coronavirus pandemic and accommodative central bank policies have helped push prices for raw materials to multi-year highs.

 

Investors trying to gauge the inflation threat will keep a close eye on U.S. consumer price data, to be released on June 10.

 

A much stronger than expected CPI number sparked a selloff in the market last month, bringing infrastructure stocks down with it, as many worried rising inflation could force the Federal Reserve to begin unwinding stimulus soon.L2N2N628K

 

Still, exchange-traded funds that bet on infrastructure stocks were the only type of thematic ETFs to attract positive net inflows in May, according to data from State Street Corp. Infrastructure ETFs were up 76.1% for the year through May, more than double the return of other thematic bets such as robotics or digital security.

 

The utilities sector may have the most to gain over the long term from roughly $384 billion in federal spending from Biden's proposed bill, Wells Fargo noted in an analyst report. However, rising Treasury yields will likely leave the sector unattractive over the next six to 18 months, the firm said.

 

"The full ramifications of the American Jobs Plan will take multiple years to convert to growth for utilities firms," the firm said.

 

Investors who are skeptical that Congress will pass an infrastructure bill should focus on areas such as clean energy, automotive parts and manufacturing, and agricultural machinery, which have not had the same run-up as commodity-tied businesses, said Brian Sponheimer, a portfolio manager of the $2.4 billion Gabelli Dividend & Income Trust fund.

 

Automotive companies will likely continue benefiting from above-trend demand through at least 2023 as the global semiconductor shortage and a lack of inventory keeps supplies low, said Sponheimer, whose position in parts supplier Genuine Parts Co (GPC.N) is among his fund's ten-largest holdings.

 

If lawmakers cannot reach a bipartisan agreement on infrastructure, "there are reasons to think that there are supply chain challenges that push out growth for pockets of the market through 2022 and 2023," he said.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

South Africa: Is Africa's Biggest Polluter Capable of Transformation?

Cape Town — The public utility which supplies the vast majority of South Africa's electricity, Eskom, is the biggest polluter on the continent, according to a local non-governmental organisation.

 

The Climate Justice Coalition (CJC), which includes trade unions, civil society and community organisations, is running a #GreenNewEskom campaign aimed at achieving a transition to clean, safe and affordable renewable energy.

 

In the past decade, Eskom has been besieged with financial and infrastructural difficulties that have cost the South African economy billions. Research from the Efficient Group estimates that the utility's woes have resulted in a reduction in GDP by 0.30% during 2019, roughly the equivalent of U.S. $617 million.

 

Coal reliance vs net-zero emissions

 

The parastatal is in dire need of transformation, not only in terms of economic turnaround but also to move from its reliance on its most fundamental resource: coal. South Africa's greenhouse emissions in 2015 totaled 512 million tonnes of carbon dioxide, an increase of 20% over the figure of 426 million in 2000, the government said in a 2019 report to UN Climate Change.

The power utility has an "aspirational vision" of producing net-zero emissions by 2050, in accordance with a government announcement in February 2020 that set the goal. The government aims to boost the shift to renewable energy through partnerships with private companies via the Renewable Energy Independent Power Producer (REIPP) scheme, which has secured investment of more than $15 billion.

 

A long-term strategy

 

According to Earth.org, this vision is in line with the Paris Agreement's recommendation that nations develop long-term strategies to tackle climate change. However, the ability of Eskom itself to contribute has been hampered by the embattled utility's own critical levels of debt, amounting to $29 billion.

In March 2021, Eskom Group Chief Executive André de Ruyter told the South African parliament's Portfolio Committee on Mineral Resources and Energy that the utility is very much aware of the negative environmental impact of some of its operations, particularly their emissions and the water use of coal-fired power stations. In light of this and its debt, Eskom announced plans in November 2020 which include to repurposing its coal plants to renewable energy facilities, the utility told Canada's BNN Bloomberg.

 

The intention is to enable the mass roll-out of renewables, although the utility qualified this by saying that due to the unpredictable nature of technological advancement, "the 'net' in the net-zero target means that we will still have residual emissions over the coming years as we work towards de-carbonizing the grid."

 

How Eskom needs to transform

On May 25, the CJC launched a booklet as part of the Green New Eskom  campaign. The document lists a number of changes the power utility needs to incorporate. Among them:

 

·         A rapid and just transition to a more socially owned renewable energy powered economy, providing clean, safe and affordable energy for all, with no worker or community left behind in the transition.

·         A robust, just transition plan that invests in and protects workers and communities vulnerable in the transition to a zero-carbon future.

·         Remove constraints on renewable energy put in place by the government's 2019 Integrated Resources Plan and instead transition as fast as possible to renewable energy. The coalition says South Africa must do it share of keeping warming to 1.5C.

·         Policies and incentives to enable socially owned renewable energy so workers, communities, small-to medium businesses, and families can own and benefit from clean energy. The CDC says gender, racial, and economic justice must guide these policies.

·         The development and implementation of green industrialisation policies with priority given to vulnerable, coal-dependent, carbon-intensive regions.

·         End harmful and regressive subsidies for coal, oil and fossil gas.

·         No new coal power should be commissioned. and no fracking to search for fossil gas; and

·         A mass rollout of solar panels and a move to electric vehicles.

·         Activists speak on how Eskom needs to change

 

Francina Nkosi from the Waterberg Women's Advocacy Organisation spoke during the webinar launch of the booklet. "With Eskom," she said, "there is less community participation and with this campaign, we're demanding our rights and we're claiming our rights because it's a bottom-up approach of saying we need to have a just transition". Using farming as an example of how communities are adversely affected by pollution, she emphasised that it is people who suffer most from climate change and said it is not sustainable for the government to continue using coal.

 

Activists from the coalition highlighted why Eskom cannot be allowed to die and instead needs to transform from a national burden to a national asset and a force for climate and energy justice. Activists drew on the Green New Eskom booklet and multiple studies to show how transforming Eskom and pursuing renewable energy can ensure greater economic growth and job creation, while reducing pollution and climate change. One of the biggest obstacles to change, however, is the Department of Mineral Resources and Energy (DMRE).

 

Alex Lenferna, 350Africa.org campaigner and secretary of the Climate Justice Coalition said: "In South Africa, and across pretty much the whole world, renewables are now our cheapest most affordable energy source and so it's quite clear that this should be our energy future. Instead, we have the likes of the Department of Mineral Resources and Energy (DMRE) rigging our energy plan, the integrated resource plan, to force in new coal, to force in a lot of new fossil gas."  Not only has the DMRE corruptly pursued expensive and polluting energy projects but it has also repeatedly refused to listen to community voices demanding change.

 

Nkanyiso Mthombeni from the Newcastle Environmental Justice Alliance, said: "The issues around DMRE have been problematic and we have experienced a lot of pressure when we are trying to engage with that department. They seem to be pro-mining and carrying the pre-approved agenda of the mining industry to some extent that whenever we engage with the mines we know that DMRE will be on their side."

 

Activists called on all South Africans to get involved in the Green New Eskom campaign, to help spread the word, protest, and take action.

 

 

 

Namibia: Jooste Warns SOEs Honeymoon Is Over

With the liquidation of Air Namibia still reverberating, public enterprises minister Leon Jooste yesterday warned state-owned enterprises (SOEs) that the honeymoon is over when it comes to government bailouts.

 

Speaking at the annual Public Enterprises' CEO Forum that took place just outside Windhoek, Jooste warned SOEs, both commercial and non-commercial, that government does not have money and they should thus drastically revise their high-cost structures. In a wide-ranging address, Jooste told the captains of SOEs that "the attitude and mindset of 'don't worry, they'll never let us go, they'll give us money' must be over". He added that the mindset that money will solve all problems "is wrong".

 

Air Namibia's liabilities as at August 2020 totalled N$3 billion, compared to assets of only N$981 million. Its liquidation left 634 people on the street when government decided to cut the umbilical cord after years of bailouts blamed on a flawed business model and some political interference in managerial appointments.

Similarly, Namibian Broadcasting Corporation (NBC) workers just ended a month-long strike without government coming to their rescue, as it has done in the past.

 

The NBC board, management and striking workers all decried the 62% reduction in subsidy to the broadcaster in this year's budget allocation.

 

As a first step to becoming self-sustainable and self-sufficient, Jooste advised both commercial and non-commercial SOEs to adhere to compliance measures as stipulated by law.

 

He noted that out of 24 commercial SOEs, only nine have governance and performance agreements; only 10 have up-to-date annual reports; and only 11 have approved Integrated Strategic Business Plans (ISBPs), which equates to a compliance level of 42%.

 

Out of the 42 non-commercial SOEs, only 17 have performance and governance agreements in place; only 10 have up-to-date annual reports; and a mere six have approved ISBPs.

Jooste furthermore broke down the value of SOEs, noting that commercial government entities had total assets of N$82 billion, but liabilities of N$43 billion, which equals to a net asset value of N$39 billion. For non-commercial entities, the asset value is N$20 billion and liabilities stand at N$8 billion, which leaves a net asset value of N$12 billion. "We need to have some uncomfortable discussions, and we need to be more comfortable with uncomfortable discussions," stated Jooste.

 

In this regard, he reiterated that government does not have money, and that any money needed for bailouts will have to be taken from other sources which also need funding.

 

Speaking before Jooste took the stage, Windhoek mayor Job Amupanda urged attendees to ask themselves what they can do to bring about development in the country, and to enable public enterprises to run efficiently.

"If public enterprises do not set the example, then we are doomed," he cautioned.

 

Said Amupanda: "Things are changing, and people are hopeful. It looks bad, but things are changing, and will continue to change. But we need resolute leadership that is championing a developmental state so that we can save our country".

 

Commenting on Jooste's remarks, local economist Mally Likukela welcomed the rhetoric as a step in the right direction, but said it was a little too late.

 

"The millions lost through bailouts remain a deadweight loss to Namibia. The announcement is also suspicious, given the timing that coincides with the International Monetary Fund (IMF) loan. It would appear as if it is made to appease the IMF. The sustainability issues of SOEs go beyond bailouts, or lack of a bailout. It is a structural issue that should have been sorted out a long time ago," Likukela reasoned.-New Era.

 

 

 

Nigeria: How CBN, Under Emefiele, Drives Financial Reforms

The Governor of the Central Bank of Nigeria (CBN), Governor Godwin Emefiele, might have made history as the only governor to be reappointed for a second term since the return to democratic rule.

 

Emefiele would also be remembered as the governor who experienced two recessions.

 

Under him, the CBN metamorphosed from merely minding interest rates and inflation to a multi-sectored stakeholder.

 

Emefiele has made a staunch effort to promote monetary policy and exchange rate stability, says Murega Mungai, Trading Desk Manager at AZA, Nairobi, Kenya. AZA is Africa's biggest non-bank currency broker, transacting more than $1bn annually.

Mungai said, "We saw this very early on with the introduction of the investors and exporters window which allowed investors to access foreign exchange at prevailing market rates. His policies have also focused on improving access to credit for MSMEs, intervention in the agricultural sector and other ways to diversify the economy and cushion it against a crash in oil prices.

 

"As the banks' regulator, he drove an increase in capital adequacy ratios from 11 to 16 per cent in 2019 and a 20 per cent increase in liquidity."

 

Emefiele's biggest scorecard in intervention was orchestrated by the COVID-19 pandemic. In line with its response plan, the CBN created credit facilities for the healthcare (N100bn); Targeted Credit Facility (N100bn); and Manufacturing Sector (N1tn).

 

>From January, 2021 to date, N157bn has been disbursed by 29 real sector projects under the RSSF-DCRR; while N857bn has been disbursed for 234 real sector projects under the RSSF-DCRR (inclusive of CMIS) from inception (November, 2018) to May 28, 2021.

>From January, 2021, to date, N26bn has been disbursed for 10 projects under the COVID-19 Manufacturing Intervention Scheme (CMIS); while N255bn has been disbursed for 78 projects under the CMIS from January, 2020, to May 28, 2021.

 

91 healthcare projects have been funded to a tune of N97bn under the Healthcare Sector Intervention Facility (HSIF) as at May 28, 2021.

 

The sum of N111bn has been disbursed under AGSMEIS to 29,023 beneficiaries as at May 28, 2021, while the sum of N3.2bn has been disbursed under CIFI to 341 beneficiaries as at May 28, 2021.

 

Daily Trust further learnt that the sum of N253bn has been disbursed under TCF to 548,345 beneficiaries.

 

Similarly, the sum of N3bn has been disbursed under the national Youth Investment Fund (NYIF) to 7,057 beneficiaries.

However, Emefiele has come in for criticism for not communicating with the market, most notably after devaluing the naira's official rate recently, says Mugai.

 

The bank's unorthodox, as well as interventionist model that moves away from just ensuring price stability, drew the ire of analysts at different times.

 

Professor of Economics at Pan Atlantic University in Lagos, Bongo Adi, said: "Over the years, our experience here in Nigeria is that CBN governors have sometimes taken positions that rankled the government. But we haven't experienced such under him. This has led to some labeling the CBN under him as the government's piggy bank.

 

"The pro-socialist bent of Aso Rock appears to be backed by his monetary policy which they refer to as unconventional and find reasons in their enabling act to justify at each call," adding that, "The Nigerian situation is a challenging one."

 

It is easy to criticise Emefiele, though, says Adi. "The fact, however, is that the Nigerian situation is a challenging one. The market isn't always to be trusted to work; the government needs to 'improve the market outcome.' But the experience is that the government can complicate the situation. Perhaps, sandwiching between the devil and the deep blue sea may not be a choice to be made, after all. It might be the only way.

 

Kalu Ajah, Chief Executive Officer at AfriSwiss Capital Assets Management Limited in Abuja, in his assessment, said: "The CBN has pursued a 'strong naira' policy and had sought to dampen imports.

 

"Well, imports have not declined and the naira is far from 'strong'. One wonders if the import restrictions on items and capital controls were necessary or if the CBN should have devalued the naira earlier. "

 

He argues that the bank under Emefiele has shirked its primary responsibility of ensuring price stability and has embraced a more developmental role in the hope of naira stability.

 

Nigeria's first Professor of Capital Market and Abuja Chairman of the Chartered Institute of Bankers of Nigeria (CBN), Uche Uwaleke, said: "Emefiele's seven years have been quite impactful I must admit. In the area of monetary policy, the exchange rate has been relatively stable while the rise in inflation has been due in large part to non-monetary factors.

 

"Also, the demand management measures introduced by the CBN under Emefiele, including the forex restrictions on certain commodities, have promoted import substitution and helped the value of the naira."

 

He further posits that under Emefiele the apex bank's development finance initiatives gained traction with interventions in several sectors of the economy, especially agriculture and SMEs.

 

"Worthy of mention is the CBN's Anchor Borrower Programme which has boosted domestic agric production, facilitated job creation and forex conservation," he adds.

 

He said, under Emefiele, played and was still playing a major role in the fight against the COVID-19 pandemic with massive interventions in the health sector.

 

"Equally, under Emefiele, the financial system has been largely stable with improvements recorded in prudential ratios such as NPLs, Capital Adequacy, as well as liquidity ratios."

 

Emefiele unveiled a five-year plan shortly after his reappointment for a second term in May, 2019. The plan targets double-digit growth in one of Africa's largest economies.

 

The plan includes domestic macroeconomic and financial stability, fostering the development of a robust financial payment system infrastructure seen as increasing access to finance to all Nigerians, thus and raising the financial inclusion rate in the country.

 

He also pledged to continue working with Deposit Money Banks (DMBs) towards improving access to credit for smallholder farmers, MSMEs, as well as consumer credit and mortgage facilities.

 

The Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf said: "Mr Emefiele has been very passionate about promoting self-reliance to reduce our import dependence and conserve foreign exchange. Some companies have taken advantage of this CBN funding window to fund real sector investments.

 

Dr Yusuf said the CBN boss has demonstrated exceptional commitment to development finance, providing long term funds to the real sector at single digit interest rate.

 

"But there has been a disproportionate emphasis on demand management strategy to protect reserves. It is desirable to see much greater focus on supply side strategies to boost forex inflows and stabilise the exchange rate. This could also improve the liquidity in the foreign exchange market," he said-Daily Trust.

 

 

 

South Africa: Eskom Suspends Load Shedding Until 5pm

Eskom will suspend load shedding at midday and resume at 5 pm on Friday evening.

 

In a statement on Friday morning, Eskom said the suspension was to allow parliament to pass the Appropriation Bill.

 

"In response to a request to Eskom from the Deputy Speaker of Parliament, Stage 2 load shedding will be suspended from 12:00 to 17:00 this afternoon in order for a virtual sitting of Parliament to pass a series of Appropriation Bills," Eskom said.

 

Passing the bills is essential to keeping government operating, as without the relevant appropriations there will be no funding for key state functions, such as hospitals, law enforcement and other essential services.

"The suspension of load shedding has been made possible by large industrial power consumers in South Africa who have agreed to reduce their consumption for this period to support the country.

 

"Eskom will also be required to utilise some emergency reserves during this period, thereby depleting some of the gains made over the past few days."

 

In order to replenish these reserves and prepare for the week ahead, the power utility said Stage 2 load shedding would resume at 5pm and continue until 10pm on Sunday.

 

Eskom apologised for the inconvenience and uncertainty caused by the interruptions in electricity supply.

 

The power system remained constrained and vulnerable, the utility said, adding that it would communicate promptly should there be any changes.

 

"All South Africans are urged to reduce their use of electricity in the national interest, particularly between midday and 5pm, as well as over the weekend," it said.--SAnews.gov.za.

 

 

 

Namibia: Ewallet Can Now Pay Utility Bills Across the Country

FNB Head of Merchant Services and Fleet, Herman Kruger, this week announced a new offering that allows customers to pay their water and electricity bills with their FNB eWallet.

 

"FNB Namibia customers can now pay their bills at municipalities and town councils all around the county using an eWallet. All customers have to do is dial *140*392# to access their eWallet, then select 'Withdraw Cash'. They will then receive a One-Time PIN (OTP) and then give their cellphone number and OTP to the cashier - and the bill is paid" advised Kruger.

 

Additionally, FNB customers can also make use of the many other ways to pay these bills, namely via cellphone banking, online banking, the FNB App and the FNB ATM's.

 

"We truly live in exciting times and are pleased to introduce yet another innovation that enable our customers to bank safely, conveniently and affordably," concluded Kruger.-Namibia Economist.

 

 

 

Namibia: Trade Ministry Takes Roadshow to Border Towns

The Ministry of Industrialisation and Trade through the department of international trade will conduct roadshows to create awareness on the recently launched Import/ Export (IMEX) Online Systems at border towns. Trade minister Lucia Iipumbu officially launched the digital platform two months ago, to reduce time and cost associated with domestic trade procedures and trade facilitation in improving Namibia's competitiveness.

 

The virtual platform has been described as a strategic tool for trade facilitation that enables traders to submit documentation and data requirements for the import/export of transit goods electronically.

Trade ministry spokesperson Elijah Mukubonda explained that roadshows are a way of marketing, to engage audiences and generate elation in taking MIT's branded message on IMEX closer to the people. The principal objectives of the publicity campaign are to increase awareness and knowledge of services offered by the ministry to end

 

users.

 

"The operationalisation of the Integrated Client Service Facility or one-stop-shop is to improve the ease of doing business in Namibia through simplified procedures of starting a business in the country; faster work visa and work permit processing; e-service delivery globally, efficient business, tax, employer and employee registration; and scalable to include other permit or license registrations," Mukubonda explained.

 

This online enterprise, he noted, has housed several core stakeholders under a single roof, namely Business and Intellectual Property Authority, Ministry of Finance, Ministry of Home Affairs and Immigration, Office of the Prime Minister as well as Social Security Commission (SSC).

The objective is to serve as a one-stop shop for foreign and local investors establishing business operations in Namibia through the provision of quality and integrated service delivery using an electronic platform linking different service providers and government agencies.

 

Namibia shares its borders with Angola in the north, Zambia in the northeast, and Botswana in the east, South Africa in the southeast and south and the Atlantic Coast in the west. The trade ministry will undertake roadshows at approximately six border towns namely: Katima Mulilo, Oshikango, Divundu, Walvis Bay, Noordoewer and Ariamsvlei.

 

"The online enterprise brings immense benefits to the sector through improved trade and facilitation of cross border services," Mukubonda concluded.-New Era.

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

Dairibord

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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

 


 

 


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

 


 

 

 

 

 

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