Major International Business Headlines Brief::: 15 June 2021

[Bulls n Bears]

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Major International Business Headlines Brief::: 15 June 2021

 


 

 


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

 


 

 


ü  Vodafone picks Samsung for 5G network

ü  Travel insurers criticised over extent of Covid cover

ü  We're in serious trouble, says hospitality industry

ü  UK and Australia agree broad terms of trade deal

ü  Gigafactories: Europe tools up against US and Asia as a car battery force

ü  JD Sports chairman rejects criticism of £4.3m bonus

ü  Disruption to shipping could delay Christmas orders

ü  What investors are watching from the Fed: taper talk and inflation

ü  Asian shares rise in early trade, investors eye Fed meeting

ü  After tapering, BOJ must weigh exit from ETF holdings: former c.banker Sakurai

ü  DAMAC delisting plan piles pressure on shrinking Dubai market

ü  Australia's top exporting state calls for reset in China ties

ü  Thai Airways wins court approval for restructuring plan

ü  Japan to avoid recession, but Q2 growth forecasts cut sharply

ü  Rwanda: More Kigali Suburbs to Get Their Roads Upgraded

ü  Kenya: Inside New Plans to Rescue Coffee Sector, Make Growing It Profitable

ü  Nigeria's Poultry, Egg Prices 'Highest Ever' Amidst Inflation, Insecurity

ü  Tanzania: President Samia Orders Bot to Buy Refined Gold

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Vodafone picks Samsung for 5G network

Vodafone UK has chosen Samsung as a supplier for its 5G infrastructure, as it seeks to extend its coverage.

 

One analyst described the move as a "breakthrough" for Samsung, in a market expected to be dominated by Ericsson and Nokia, after the UK joined other countries in banning Huawei products.

 

Vodafone says it aims to broaden its range of suppliers.

 

Samsung kit will initially be installed in 2,500 rural sites in the south-west of England and most of Wales.

 

The South Korean firm is one of a number of companies contracted by Vodafone to build what it calls, "the "first commercial deployment of Open Radio Access Network (Open RAN) in Europe".

 

The Radio Access Network covers the equipment that provides the final link between your phone and the telephone network, and includes equipment such as mobile phone antennas on towers and buildings.

 

With Open RAN, parts of the network made by different suppliers are designed to work in the same way, meeting a common set of standards.

 

Because equipment from different suppliers is interoperable, the network can be put together using components from a range of companies, rather like Lego, as opposed to being built by a single supplier.

 

Johan Wibergh, Vodafone's chief technology officer, said using Open RAN would allow the company to release new features simultaneously across multiple sites, add capacity more quickly and resolve outages "instantly".

 

This feels like a key moment in the UK's 5G story.

 

Ever since the mobile operators were told they were going to have to phase out Huawei's equipment, they've been faced with a very limited choice - either Nokia or Ericsson - for their 5G kit. That, they warned, could mean higher prices and a slower rollout.

 

But now Samsung, which had long been considered to be out of the game in Europe's telecoms equipment market, has made a stunning comeback and broken up the duopoly. Other deals seem likely to follow.

 

This is also a big step forward for the OpenRan concept, which would allow components from different suppliers to be switched out at base stations that, until now, have been kitted out by a single supplier.

 

The UK government - keen to limit the fallout from its Huawei ban - has been pushing the idea in the hope that it would bring more suppliers into the market.

 

But Nokia and Ericsson have already signed multiple 5G deals in the UK and have a big lead, which they will fight aggressively to defend.

 

New contender

In July 2020, the UK's mobile providers were banned from buying new Huawei 5G equipment and told they must remove all the Chinese firm's 5G kit from their networks by 2027.

 

It followed concerns that using the firm's equipment posed a national security threat - something Huawei strongly denied.

 

Analysts saw this as a significant step for Samsung as it seeks to compete with the leading firms in the market.

 

"This partnership represents a major market breakthrough for Samsung," analyst Richard Webb, of CCS Insight said.

 

Samsung still had a long way to go to catch up with Ericsson and Nokia, he noted, but should be seen as "a genuine contender".

 

Mr Webb added: "This contract win adds to its credibility, and could be a signal for other European operators to consider Samsung as an option."

 

He also noted that Open RAN may be helpful to companies like Samsung seeking to challenge dominant players in the market.

 

"Vendor diversity is one of the principal tenets of the concept," he said.—BBC

 

 

Travel insurers criticised over extent of Covid cover

Travel insurance policies that offer "complete" cover for Covid-related disruption are barely available, according to consumer group Which?.

 

It analysed 263 different policies and found only two gave travellers all-round financial protection.

 

As a result, it called into question various providers' claims that their policies provided Covid cover.

 

An industry body said holidaymakers needed to be clear about what their insurance products provided.

 

Insurance brokers have stressed that they can search the market for specific needs if people still wish to travel despite the current restrictions.

 

Covid cover claims

The analysis by Which? found two policies - from HSBC and Barclays - offered widespread protection, but were only available to those banks' customers and could only be bought alongside other insurance products.

 

They protected policyholders against cancellation due to changes in advice from the Foreign, Commonwealth and Development Office (FCDO) or government lockdowns prohibiting travel. They also covered testing positive for Covid-19 or being told to self-isolate, and medical costs and repatriation.

 

While some travel insurers boasted of offering "Covid cover", many policies excluded plausible and potentially costly scenarios, such as new lockdowns in the UK or destination country, the consumer group said.

 

Can we get our money back if we can't go on holiday?

Scramble to return as Portugal joins amber list

Every policy analysed offered cover for medical and repatriation costs for travellers catching Covid while travelling.

 

However, no more than a third offered cover if travellers cancelled after being notified to isolate by the test and trace app, and only 3% protected against failing to travel owing to a need to quarantine on return - a scenario possible if their destination was re-graded on the traffic light system.

 

'Follow the advice'

Gareth Shaw, head of Which? Money, said: "As the removal of Portugal from the green list shows, last-minute disruption to holiday plans can happen - and our research shows that many travel insurers don't offer much protection if it does.

 

"The government should work with regulators to ensure that travellers, should they choose to go abroad, are given clear information about what they will and won't be covered for."

 

A spokesman for the Association of British Insurers said: "We urge people to read their policy to understand the scope of cover, as policies bought after the pandemic was declared are unlikely to cover cancellation due to Covid as it is a known risk, and travel insurance is designed and priced to cover unforeseen events.

 

"Travellers should always be aware of and follow government advice, and the border requirements of the country they are visiting. And always follow FCDO advice, to avoid invalidating your travel insurance."-BBC

 

 

 

We're in serious trouble, says hospitality industry

Hospitality, wedding and night-time entertainment businesses have reacted with horror to the delay in England's full reopening until 19 July.

 

One nightclub owner told the BBC he had been closed since March last year and had a full diary of events planned over the next few weeks, which he'll now have to cancel, losing thousands of pounds in revenue.

 

David Whittall, who runs the nightclub and live music venue Suki10c in Digbeth, Birmingham, now has no way to pay the bills in June, he said.

 

And wedding planners said the continuation of some restrictions meant couples were likely to defer their weddings again.

 

Lockdown easing in England delayed to 19 July

Easing delay to have 'critical impact' on business

"The sold-out events that we had booked in - that's what was going to get us through because we would have made revenue, we would have had profit, we would have been able to pay our bills. Now we don't have anything," Mr Whittall says.

 

He stresses that the government needs to announce financial support, but it cannot be along the same lines as the Culture Recovery Fund, "because it takes too long to get the money".

 

"If we don't get financial support, I don't want to think about what the alternative is," he says.

 

Chris Jowsey is the chief executive of community pub firm Admiral Taverns, which has more than 1,000 pubs across the UK.

 

"For many licensees, the situation is desperate because Covid restrictions are massively hindering pubs from trading profitably - if the regulations have to continue then we need the government to step in and offer extra support to the hospitality industry," he says.

 

"Licensees are losing money because they are having to hire extra staff members to cope with restrictions like table service and social distancing."

 

The British Beer and Pub Association has warned that four additional weeks of restrictions will cost pubs £400m. It says pubs must be allowed to "open properly" on 19 July.

 

Mr Whittall says he is surprised the prime minister didn't announce any additional financial support: "We've got bills that need paying now... I'm not sure what we're supposed to do now."

 

A spokesman for the Treasury said: "We are committed to helping businesses and individuals through the pandemic and deliberately went long with our support to provide certainty over the coming months.

 

"The furlough scheme and support for the self-employed is in place until September and eligible businesses will continue to benefit from business rates relief of 75% over the year, VAT cuts and the Recovery Loan Scheme."

 

Wedding venues and planners have told the BBC that the government's announcement about unlimited guest numbers being permitted has provided some relief, but they are still deeply worried about the future of their industry.

 

Matthew Shaw, founder and creative director at Sauveur, a creative events and luxury wedding planning studio in London, has already been on the phone to his clients, who are confused about what they are allowed to do at their weddings.

 

Many are upset about the fact they cannot have a dance floor indoors and they want to cancel the bands they have booked, Matthew says, which puts pressure on the suppliers Sauveur works with.

 

"Dance floors and drinks receptions are the things people want," he tells the BBC.

 

"It's great to have a meal, to be with people, but when you take away the key elements of what make a wedding special...people don't want to spend the money on it anymore."

 

Earlier this year, his marquee supplier went under. That means he will have to try to forge relationships with new suppliers, while hoping the existing ones are still coping and are resilient when clients pull the plug or decide to postpone their events.

 

Mr Shaw says that the last year has taken a toll on his mental health and that of his staff, clients and suppliers: "I've spent sleepless nights wondering whether events will still be able to run, and whether we will still be able to get new clients, after watching new and existing clients drop away."

 

Sarah Callander Beckett, owner of wedding venue Combermere Abbey in Cheshire, agrees with Mr Shaw.

 

They say some clients might prefer to defer their weddings again. But this creates an additional headache as the calendar for the rest of this year and into next year is already pretty packed for many businesses in the industry.

 

"These are some difficult decisions we'll have to facilitate as a business in the next few days managing expectations and emotions," Ms Beckett says. "Ideally what we want to see is also the return of dancing and mingling amongst guests."

 

'We're in serious trouble'

Keith Marsden is the landlord of the Prince of Wales pub in Moseley, Birmingham.

 

He says that social distancing has proved a significant challenge and a continuation of restrictions will deeply impact his bottom line.

 

Mr Marsden recently had his worst day of trading since he started the business, with takings of just £96.

 

"With social distancing whether you're inside or outside, you just cannot get the capacity," he says. "We're operating at about one-third of our capacity, so we just cannot do the numbers to make a profit."

 

He says that people have fallen out of the habit of going to the pub: "We're hanging in there but we're in serious trouble.

 

"It really will be the final nail in the coffin for many."

 

He's also worried about the financial challenges ahead, and the debt that he and others in the industry have built up.

 

"If you come in here on a busy weekend you think, oh yeah they're doing quite nicely, but beneath the surface there's lots of problems lurking," says Mr Marsden.

 

"People haven't aggressively chased debt, landlords have let people off with rent, business rates holidays, things like that. They're now coming to the surface."

 

The Nationwide Caterers Association (NCASS), which represents caterers in the festival and events sectors, including mobile and street food businesses, is also calling on the government to provide immediate financial support.

 

"Festival caterers will still not be able to work after already losing the 2020 season - it is devastating for the sector as a whole," the industry body's director Mark Laurie says.

 

"There are ten of thousands of businesses involved in the festival industry who are going to suffer huge losses."

 

Latest research from Live, the trade body for the UK live events sector, suggests the industry faces losses of more than £500m as at least 5,000 shows will be cancelled.

 

"Any delay to the 21 June reopening date will have significant and immediate repercussions, including 248 grassroots music venues that would face an immediate threat of eviction without a comprehensive response from the government that fully addresses their financial losses from delayed reopening," the trade body has warned.

 

Mr Laurie says that caterers have had "little to no help" from the government or local authorities: "The Additional Restrictions Grants (ARG) for those without fixed premises won't work to support theses businesses and so that must be addressed.

 

"NCASS is calling on the government to publish the results of the Events Research Programme, to provide immediate financial support to affected businesses and provide a clear way forward."

 

It is a terrible three-way balancing act - a race not just between the vaccine and the variant, but also viability of thousands of businesses. A cost-benefit analysis without many benefits.

 

The signalling of 21 June as "freedom day" was meant to give businesses long-term confidence to plan staffing, stocking and reversing the mothballing of their hospitality venues. Indoor venues will incur substantial losses over the next month.

 

The message from the government is that the support package they put in place at the Budget already accounted for this eventuality.

 

The furlough scheme has begun a slow phase-out, whereas in many other similar countries, employer contributions are already required, or the schemes have ended.

 

Ministers also point at the strength of the economic bounce-back and record hiring and vacancy statistics. But that will come as little comfort to industries now shut for 15 months, such as nightclubs.

 

Local authorities have yet to allocate £1bn, about half of the discretionary fund.

 

The ideal picture, as the prime minister put it, is that they will not be rolling back any of the currently implemented roadmap.

 

As we know, the impact on the economy comes not just from mandatory lockdowns, but from voluntary social distancing as consumers stay away from crowded places if they feel the virus is out of control.

 

On two crucial occasions last March and last Autumn, the government chose to prioritise economic reopening, with consequences for the scale of the outbreak that followed, which in turn definitively failed to be of any benefit to the economy.

 

This time it appears they are learning a lesson from recent history, and proceeding cautiously.

 

The calculation is that the immediate extra economic pain will be outweighed by fewer deaths and a confident irreversible reopening in a month's time.-BBC

 

 

 

UK and Australia agree broad terms of trade deal

The broad terms of a trade deal between the UK and Australia have been agreed, the BBC understands, with a formal announcement expected on Tuesday.

 

UK Prime Minister Boris Johnson and Australian PM Scott Morrison agreed the deal over dinner at Downing Street.

 

This is the first trade deal to be negotiated from scratch since the UK left the EU.

 

It is seen as an important step towards the UK joining a wider Asia Pacific free-trade agreement.

 

The UK government has signed a long list of trade deals over the past year, but they have been rollovers of those the UK already had as part of the EU.

 

The new trade deal is expected to give UK and Australian food producers and other businesses easier access to each other's markets - an ambition perhaps alluded to by the meal served up to the pair on Monday evening - Welsh lamb and Scottish smoked salmon, washed down with Australian wine.

 

The UK government says membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could provide British farmers with huge opportunities.

 

However, there have been concerns in the farming community about the UK compromising on its food standards, as well as tensions in government between the Environment Secretary, George Eustice, and the Trade Secretary, Liz Truss.

 

media caption'We don't have enough beef to flood the UK market'

UK farmers also have concerns there will be no meaningful safeguards in place to stop farmers being undercut by cheap imports.

 

Farmers in Australia are allowed to use some hormone growth promoters, pesticides, and feed additives that are banned in the UK.

 

According to the National Farmers Union (NFU), Australian farmers are able to produce beef at a lower cost of production, and could undercut farmers in the UK.

 

Scotland had raised worries about the farming industry being overwhelmed if the market was flooded with lower standard goods.

 

With the two leaders in the same room, sitting at the same dinner table, the UK trade agreement with Australia is now tangible. Both prime ministers can draw on the significance of striking the first deal after the UK has left the EU.

 

Australian farmers have essentially been locked out of the UK market for almost 50 years - finding it nearly impossible to navigate Brussels' restrictions, tariffs and quotas. The president of the Australian National Farmers' Federation said it had been very difficult to break into the UK because it was "way too expensive and way too far".

 

But with tariffs and quotas likely to be removed within 15 years - a detail expected in the agreement - it opens up a much-coveted area for the Australian agricultural industry.

 

On any given day this would be huge news, but it's even more significant now as Aussie farmers look to diversify due to the increased tensions between Canberra and Beijing. In the past year, China has slapped tariffs and restrictions on everything from Australian beef, barley and wine, to rock lobster and coal.

 

UK farmers have big concerns. They see the potential importation of cheap Australian produce at lower standards on an industrial scale as a real threat to their livelihoods. They've been assured that safeguards will be in place but we have yet to hear what these are exactly.

 

This deal sets the tone as the world watches closely to see what a post-Brexit British economy looks like in action. How free it really is. How it's changed. More crucially, what compromises it's willing to make to open up new markets.

 

The Department for International Trade has previously said any deal with Australia would include protections for the agriculture industry and not compromise the UK's high standards.

 

Trade Secretary Liz Truss defended plans for a deal with Australia last month, telling MPs: "We will make sure in all the deals we do that British farming thrives."

 

In 2019-20, trade in goods and services between Australia and the UK was valued at £20.1bn.

 

Metals, wine and machines have formed the biggest goods exports from Australia to the UK, while Australia's main UK imports are cars, medicines and alcoholic drinks.

 

Trade in meat between the two countries is small, with 0.15% of all Australian beef exports going to the UK and 14% of sheep meat imports to the UK coming from Australia.-BBC

 

 

 

Gigafactories: Europe tools up against US and Asia as a car battery force

Surrounded by a forest of tall green pine trees, 125 miles south of the Arctic circle, a giant electric battery factory is rapidly taking shape on a site as big as 71 football pitches.

 

The project will be a gigafactory, a term coined by Tesla founder Elon Musk to describe his first high-volume plant for producing lithium-ion electric battery cells, deep in the Nevada desert.

 

Startup Northvolt, co-founded by two former Tesla executives, is in Skellefteå, a much chillier location, in northern Sweden.

 

But from here, as well as a base in Västerås just outside Stockholm, it is hoping to provide a quarter of Europe's electric batteries, as demand for electric vehicles surges amidst the global race to cut carbon emissions.

 

By 2030, 40% of all new cars sold will be electric according to the latest forecast by the investment bank UBS, rising to almost 100% of the new car market by 2040.

 

"If you look at the agenda for all the automotive manufacturers to actually make those electric cars, the amount of cells that you'll need to access, is going to be humongous," says the plant's manager Fredrik Hedlund.

 

Although many of the imposing grey buildings are yet to have any equipment installed, Mr Hedlund is confident everything will be in place in time for production to start by the end of 2021.

 

Northvolt aims to make enough batteries to power almost 300,000 electric vehicles a year. It's already received a $14bn order from Volkswagen to produce its batteries for the next decade, and has plans for a long-term partnership with Swedish truck and bus maker Scania.

 

It recently announced that it had raised another $2.75bn (£1.94bn; €2.26bn) to fund its expansion.

 

"We are building a totally new industry that hasn't really existed, especially in Europe, at this scale," says Mr Hedlund, striding across the high-security site in a neon yellow jacket. "I think, not only myself but a lot of people, think that this is the coolest project in Europe right now."

 

In northern Sweden at least, there hasn't been a more-hyped project since miners literally struck gold 100 years ago. But for Northvolt, water is now the region's most valuable asset as the manufacturer seeks to make "the world's greenest battery", by ensuring its production techniques are as climate-friendly as its product.

 

Renewable hydroelectric energy from the Skellefte river will fuel the battery-making process on the site, which includes using giant mixers to combine lithium, cobalt and other metals, and drying out active material in rows of industrial ovens, which have just been installed. Local access to raw materials and plans for an on-site battery recycling plant will also keep down the plant's own carbon footprint.

 

There are still gaps in the green loop though, with some employees commuting weekly by plane from other Swedish cities and many others driving non-electric cars to the site.

 

But the firm's efforts are far from greenwashing, according to Math Bollen, a professor in electric power engineering, at Luleå University of Technology's campus, on the other side of the Skellefte river. "It's certainly going to be more green than what others are making," he says. "They [have] taken a very good first step - let's hope others follow it."

 

While Northvolt's green credentials (and perhaps its picturesque and far-flung location) have put the Swedish project in the spotlight, the company is one of a growing number of European companies making inroads in the gigafactory industry, which, alongside Tesla, has largely been dominated by Asian players.

 

Norwegian energy company Freyr is planning a gigafactory fuelled by wind and hydro energy in Mo i Rana, a remote coastal town close to one of the country's most popular ski resorts. Daimler and BMZ have already set up energy-efficient gigafactories in Germany. French start-up, Verkor, is planning a facility north of Toulouse.

 

The UK is running slightly behind its northern European neighbours, although a 235-acre (95 hectare) site in Northumberland is set to become the first operational gigafactory by late 2023. Run by a firm called Britishvolt (which has nothing to do with Sweden's Northvolt despite its similar name), it will be fuelled by hydroelectric energy sourced from Norway, as well as offshore wind farms.

 

"We're certainly sprinting very hard now to catch up with the others," says the company's chairman Peter Rolton. He has ambitious plans to not just "give the UK its own local supply of electric vehicle batteries," but produce enough products to plug gaps in other European countries as demand for electric cars grows.

 

London-based Sandy Fitzpatrick, who monitors vehicle trends for global technology analysis firm Canalys, is confident there will be plenty of room in the market for the new rush of European players. As well as fuelling the rising consumer demand for electric vehicles. She says access to local gigafactories is also an important branding strategy for European carmakers.

 

They're facing increasing pressure to offer genuinely sustainable business models after the so-called diesel-gate scandal, which saw Volkswagen caught using illegal software to manipulate the results of diesel emissions tests.

 

"Saying that their whole supply chain has components that are green and sustainably manufactured is a very good message to go out to consumers with," says Ms Fitzpatrick, "as opposed to using components that are flown in and have a high carbon footprint because they are transported from all over the world and are produced with very coal-intensive methods".

 

But she believes European car and battery manufacturers will continue to face tough competition from major Asian brands, many of whom have already set up their own gigafactories in the EU. These include LG Chem, which has a plant in Poland, and Samsung SDI and SK Innovation who've built factories in Hungary.

 

"They've got the experience. They've got the market know-how... and more importantly, they've got the capital," says Ms Fitzpatrick. "Battery manufacturing is hugely capital intensive. So they're going to enter Europe with deep pockets."

 

If European gigafactory firms want to thrive against this competition, she says they'll need continued investment, alongside practical support from national and regional governments to optimise trading conditions, and provide "perks [and] incentives to help them along".

 

Back in Skellefteå, Northvolt does seem to be ticking those boxes. The company has secured $3.5b in funding, including a $350m loan from the European Investment Bank, and financial support from the state-funded Swedish Energy Agency as well as the German government, following the Swedish startup's multimillion dollar deal with Volkswagen.

 

The company is also collaborating closely with universities in the region, and has strong backing from the local municipality, which lobbied Northvolt to choose Skellefteå as a base because of it's hydropower, even before the startup had it on its shortlist.

 

"It's a win-win for both of us," says the town's Deputy Mayor Evelina Fahlesson. "We want to be a role model in the green transition... and we have an ageing population, so we need to have a growing labour market."

 

Northvolt's presence is expected to create around 10,000 new jobs in the region, and the city is already investing in thousands of new energy-efficient homes, electric buses, winter-friendly cycle lanes and even an electric plane project, all designed to create a green and liveable city for the new influx of national and global talent.

 

There is already something of a "boom town" atmosphere, with buzzing waterfront bars, shiny new shopfronts and an almost-finished cultural centre which will be one of the world's tallest wooden buildings.

 

"It will get harder to find an apartment because prices are going up," says 20-year-old student Gabriel Kitebwini, who's enjoying a drink on the riverside. "But I think it is good. Because we get more new people from around the world travelling, coming into our city - we get a bigger city."

 

"It's a new atmosphere in the municipality," agrees Ms Fahlesson. "Before, people moved out of Skellefteå, but today we see them moving back."-BBC

 

 

 

JD Sports chairman rejects criticism of £4.3m bonus

The chairman of JD Sports has rejected criticism of a large bonus he received after the retailer benefited from millions of pounds in Covid support.

 

Peter Cowgill told the BBC that the "lion's share" of the £4.3m bonus related to work done pre-January 2019.

 

He also rejected suggestions the firm should repay furlough money.

 

Shareholder advisory group Glass Lewis has urged investors in the sportswear chain to vote against what it calls an "inappropriate" pay policy.

 

Shareholders will get a chance to vote at JD Sports' annual general meeting on 1 July, although this would not be binding.

 

Mr Cowgill told the BBC's World at One programme that the pay boost in 2020 resulted from a long-term incentive share plan (Ltip), and that he had received only one payout from the scheme in the past eight years.

 

"Over that period the [firm's] profits went from £82m to £420m," he added.

 

Mr Cowgill said the firm had correctly used the furlough scheme to support jobs, and should not volunteer to pay it back as rivals Primark and Asos have done.

 

He said Primark was part of a larger firm, AB Foods, whose profits benefited from strong sales of food last year, while Asos was a pure online player which did not have the same overheads.

 

JD Sports faces backlash over boss's £4.3m bonus

Mr Cowgill said it was possible investors might vote against his pay package, but added: "Why would you when the company has progressed, it's provided increasing levels of employment throughout?

 

"It's expanded internationally, it's created continued growth."

 

As a non-essential retailer, JD Sports' shops were closed for long periods during the pandemic and the firm received £61m through the UK furlough scheme and an estimated £38m in business rates relief.

 

It has also benefitted from an additional £25m in wage support from other countries where it operates. JD Sports was also provisionally granted an emergency £300m loan from the Bank of England, although the company points out that it was, in the end, not needed and never accessed.

 

At the same time, the chain saw its revenues rise in 0.9% last year to £6.1bn as its sales shifted online, although its pre-tax profits fell 7%.

 

Mr Cowgill's bonus was agreed in January 2019 and several instalments were deferred due to the pandemic, then subsequently paid.

 

Taking this into account, he said his bonus last year was actually £1.3m - down 75% on the previous year.-BBC

 

 

 

Disruption to shipping could delay Christmas orders

Disruption in the global container shipping industry shows no sign of being resolved quickly and could lead to shortages in the run-up to Christmas, say industry experts.

 

An outbreak of Covid-19 in Guangdong province in southern China has caused acute congestion at the region's ports.

 

As a result, shipments have been delayed, exacerbating tensions within global supply chains.

 

And the knock-on effects could take many months to resolve.

 

The problems in Guangdong are just the latest in a series of severe setbacks for the industry. Shipping firms have been struggling to cope with dramatic fluctuations in demand triggered by the pandemic, as well as the consequences from the recent blockage of the Suez Canal.

 

The global nature of the sector, and the lack of spare capacity within it, means that problems in one region can have ripple effects around the world for several months.

 

Diversions

Yantian International Container Terminal is one of a number of ports in the Shenzhen region, which collectively form a vital gateway for exports from the Pearl River Delta, a major Chinese centre for manufacturing and technology.

 

Since late May, the terminal has been operating at a fraction of its normal capacity, with operations restricted due to controlling the spread of Covid. This has led to severe congestion, with dozens of ships waiting outside the port for a berth to become available.

 

"One of the biggest ports in China has basically closed down for close to three weeks. They have some berths in operation, but nowhere near enough", says Nils Haupt, communications director at the German shipping line Hapag-Lloyd.

 

Over the past few days, shipping lines have been diverting vessels away from Yantian to other nearby terminals in the Delta area. But, according to Mr Haupt, that has been creating its own problems.

 

"You can use ports like Shekhou, you can use Nansha, you can use Hong Kong; but what we're seeing right now is that delays are piling up there as well," he says.

 

Jams

The growing crisis in southern China is just the latest blow to hit the shipping industry, which has been suffering from acute disruption for more than a year.

 

A dramatic slowdown in the early stages of the pandemic was followed by a frenzy of activity, as customers, unable to travel or socialise in their normal ways, ordered more consumer goods.

 

This sudden shift in demand, from famine to feast, threw delicately balanced supply chains out of kilter. Ports in Europe and North America became clogged, with too many vessels arriving at the same time, while the supply of empty containers for new consignments dried up, because too many of them were sitting at quaysides around the world.

 

Then came the blockage of the Suez Canal in March. The closure of one of the world's busiest shipping lanes delayed hundreds of ships. But when it reopened the sudden arrival of the delayed vessels triggered new congestion at European hubs such as Rotterdam and Antwerp.

 

UK shoppers warned of summer products shortage

The cost of the Suez Canal blockage

"We were just beginning to see light at the end of the tunnel," says Mr Haupt. "But then unfortunately we ran into this situation in Yantian."

 

Constant crisis

According to Peter Sands, chief shipping analyst at the industry organisation Bimco, the sector is used to responding to crises.

 

"On a global network scale, these states of emergency are a permanent situation right now," he explains.

 

"But the issue with Yantian is, we need more transparency and openness from the local authorities. And we aren't getting that, which means there is a lot of uncertainty in developing contingency plans."

 

The hope within the industry is that the situation in Yantian will be resolved as rapidly as possible, although experts warn that when that happens, it will lead to a surge in shipments from the region, which could cause further bottlenecks elsewhere in the supply chain.

 

"Because the system is so overloaded, every time one of these things happens now, the system is already at breaking point, or past breaking point, so anything else just adds grist to the mill," explains James Baker, containers editor at shipping industry publication, Lloyd's List.

 

For this reason he expects the disruption to continue for at least another 12 months, with consumers in Europe and North America continuing to face much longer waits than normal for their goods.

 

Crazy Christmas

For UK retailers, this raises the real prospect of a shortage of goods ahead of the Christmas shopping period. Even under normal circumstances, they begin to acquire seasonal stocks from China months in advance, with the process beginning in the late summer.

 

"One of the issues at the moment, which is aiding the congestion, is the fact that everyone knows that the lead times are really slow, so retailers are booking their Christmas goods already," says Mr Baker.

 

"Traditionally, the peak season for container shipping starts in the third quarter as everyone stocks up for the holiday season in the west, but this year we're just in a permanent peak season already, and heaven knows what's going to happen come August or September. It could get crazy. It's very hard to tell."

 

The situation could improve, he says. But, slightly tongue-in-cheek perhaps, he has some advice for consumers: "If you want to get something for your family for Christmas, start shopping now."--BBC

 

 

 

What investors are watching from the Fed: taper talk and inflation

Investors will be scrutinizing the Federal Reserve’s comments at the close of its policy meeting on Wednesday for insight on whether the central bank has begun discussing tapering bond purchases and if policymakers are concerned about rising inflation. A possible hike to some key short-term rates is also in focus. Here are topics that investors are focused on:

 

TALKING ABOUT TALKING ABOUT A TAPER

 

The Fed is keen to minimize the possibility of a market disruption when it begins to reduce its $120 billion per month government bondand mortgage-backed securities purchase program, and so far has only indicated it may soon start "talking about talking" about reducing it.

 

Market participants will be focused on whether this has advanced in any way, with a reduction in bond purchases expected to be the first step in the Fed’s normalizing its ultra-loose monetary policies.

 

Signs that the Fed may taper sooner than expected could spark a bond market sell-off, which could hurt risk appetite and send stocks lower.

 

Many analysts think the Fed will hold off on any announcement on bond reductions until its Jackson Hole economic symposium in August, with the taper unlikely to occur until late this year or early next year. Some market participants, however, are worried there are dangers in waiting as inflation prints come in strong.

 

IS INFLATION BECOMING ENTRENCHED?

 

Inflation has been coming in well above the Fed’s 2% target as the economy reopens and investors will be watching for signs that policymakers are uncomfortable with the recent increases.

 

Data last week showed that consumer prices in May registered the largest annual increase in 13 years, with a 5% gain.

 

The U.S. Treasury market showed little concern about the data, however, with yields falling to three-month lows. Ten-year yields were at 1.46% on Monday and have fallen from a one-year high of 1.78% in March.

 

Fed Chair Jerome Powell said after the U.S. central bank’s April meeting that transitory increases in inflation expected this year would not meet its standard for raising interest rates.

 

WILL THE DOT PLOT SHOW AN EXPECTED RATE HIKE IN 2023?

 

Market participants will focus on when policymakers see an increase in rates, a section of the Fed's economic projections known as the “dot plot.”

 

Seven of 18 officials expected to raise rates in 2023 at the Fed’s March meeting, compared with five in December. Four officials also felt rates may need to rise as soon as next year, a change from zero as of the last projections in December.

 

Meanwhile, any increase in inflation projections for 2022 and 2023 may indicate that the Fed sees inflation increases being more persistent than previously expected.

 

AS REVERSE REPO VOLUMES HIT RECORDS, WILL THEY RAISE 'IOER'?

 

Another key focus will be whether the Fed will address disruptions in cash markets by raising the interest it pays banks on excess reserves and the rate it pays on overnight reverse repos.Money market investors are struggling with a lack of high quality short-dated assets as the Treasury reduces bill issuance at the same time as banks are struggling with excess deposits, in large part from Fed bond purchases.

 

The Fed’s reverse repo facility, which offers approved money managers the option to lend money to the Fed overnight in return for Treasury collateral, has seen increasing demand and set a record $584 billion on Monday. Demand is expected to continue growing as the Treasury continues paring issuance of Treasury bills and the debt ceiling nears.

 

By raising the IOER, the Fed can ease some downward pressure on short-term rates. Some analysts say the Fed is unlikely to make any adjustments unless the fed funds rate falls below 5 basis points, a level it has so far held above. The fed funds rate was at 6 basis points on Friday.

 

STANDING REPO FACILITY

 

The Fed surprised some market participants when minutes from its April meeting, released in May, showed policymakers participated in a briefing on the pros and cons of making permanent the support they provide to money markets.

 

Investors will be looking for any details the Fed may give on a standing repo facility, which would reduce the chance of the Treasury market experiencing the sort of liquidity shortages that hit markets in September 2019 and March 2020 by giving investors confidence that there is a lender of last resort in the event of another large disruption.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Asian shares rise in early trade, investors eye Fed meeting

Asian shares rose early on Tuesday, tracking Wall Street higher, though investors looked to a much-anticipated Federal Reserve policy meeting to see if the central bank would signal any change to the U.S. monetary policy outlook.

 

Japan's Nikkei (.N225) rose 0.89% in early trading and MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was up 0.23%.

 

An early driver was Australian shares <.AXJO>, which rose 1.03%, though Chinese blue chips (.CSI300) dropped 0.16% and Hong Kong (.HSI) fell 0.21%. All three resumed trading after being shut on Monday for a public holiday.

 

Overnight the S&P 500 (.SPX.) and Nasdaq (.IXIC) closed at record highs, helped by tech names, though the Dow Jones Industrial Average (.DJI) fell 0.25%.

 

U.S. stock futures, the S&P 500 e-minis , were also up 0.11%.

 

"We are still getting markets responding positively to the lower volatility in the bond markets and lower yields, and a sense that inflation will be reasonably temporary and the Fed won't have to slam the breaks on," said Kyle Rodda, market analyst at brokerage IG.

 

"I suspect in the next 24-48 hours we'll see a lot of chop, first on the upside, then a little correction as the market positions itself, and then we're off to the races if we get the green light from the Fed Thursday morning," said Rodda.

 

Traders will look closely at any hints from the meeting's final statement about whether and when the Fed plans to taper its bond buying programme, amid concerns from some quarters about inflation as the U.S. economy bounces back from the pandemic fallout. The two-day meeting starts on Tuesday.

 

Nearly 60% of economists in a Reuters poll expect a taper announcement will come in the next quarter, despite a patchy recovery in the job market. read more

 

"Whilst no immediate changes in monetary policy are anticipated, an increase in the share of FOMC members who think rates will need to increase in 2023 is expected," analysts at ANZ wrote in a note to clients.

 

"If three more members pencil in rate rises for 2023, that would tip the majority in favour of moving rates relatively soon," they said

 

Currency markets were quiet ahead of the meeting, with the dollar index , which measures the greenback against a basket of six currencies, broadly flat at 90.502 in early Asia trading.

 

Benchmark 10-year yields were 1.4872%, little changed from Monday, when they rebounded from Friday's three-month low.

 

As for commodities, U.S. crude ticked up 0.55% to $71.27 a barrel, and Brent crude was at $73.24 per barrel, having touched on Monday $73.64 a barrel, its highest since April 2019.

 

Spot gold was down slightly at $1862.21 per ounce.

 

Even bitcoin was fairly quiet, fluctuating a little above $40 000. It rose on Sunday and Monday after Elon Musk said Tesla could resume accepting payment in the world's largest cryptocurrency at some point in the future. read more

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

After tapering, BOJ must weigh exit from ETF holdings: former c.banker Sakurai

The Bank of Japan must eventually consider ways to unload its huge holdings of exchange-traded funds (ETF), such as by selling them to households, said former central bank policymaker Makoto Sakurai.

 

But the timing will be years away as Japan's economy could take until 2024 to fully recover from the coronavirus pandemic's scars, forcing the BOJ to maintain its massive stimulus beyond Governor Haruhiko Kuroda's term ending in April 2023, he said.

 

"The current stimulus won't last forever. The BOJ needs to consider (how to exit) at some point. But that won't be until 2024 or 2025," Sakurai told Reuters in an interview on Monday.

 

"The BOJ will have to stick to the current framework for the remainder of Kuroda's term, as Japan's economy won't recover that quickly," said Sakurai who, during his five-year stint at the board was seen as among Kuroda's closest associates.

 

Under yield curve control (YCC), the BOJ guides short-term interest rates at -0.1% and 10-year bond yields around 0%. It also buys huge amounts of government bonds and risky assets like ETFs to pump money to the economy.

 

Before stepping down in March, Sakurai took part in the BOJ's decision that month to make YCC sustainable enough to weather a prolonged battle to fire up inflation.

 

NO NEW STEPS NEEDED ON DORMANT YIELDS

 

The March review has allowed the BOJ to sustain YCC for several more years by allowing it to maintain ultra-loose policy without expanding its balance sheet too much, Sakurai said.

 

Among the steps was to ditch a numerical target on the pace of ETF buying, and clarifying that it would allow 10-year yields to move 50 basis points around its 0% target in hope of breathing life back to a dormant bond market.

 

Despite the steps, trading volume in Japan's bond market hit a near-two-decade low in May. Still, Sakurai said it was "too early" to take further steps to revitalise the market, arguing that more time was needed to see whether Japanese yields would move in response to external developments.

 

After tapering bond and ETF purchases, the BOJ must also come up with ways to unload its ETF holdings, Sakurai added.

 

The BOJ's ETF holdings has ballooned to roughly 50 trillion yen ($454 billion), making it the biggest holder of Japanese shares and drawing heat for exposing its balance sheet to excessive market risk.

 

One option would be to sell ETFs to households via a third-party scheme, said Sakurai.

 

"It's something the BOJ must consider at some point," Sakurai said on taking ETFs off its balance sheet.

 

"Ideally, it would be a framework that facilitates households' asset management in an ageing society, and doesn't create losses for stake-holders including the BOJ," Sakurai said.

 

Sakurai, who voted for Kuroda's proposals throughout his stint at the BOJ, said the two have had frequent one-on-one exchanges on issues ranging from economic theory to history.

 

($1 = 110.1000 yen)

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

DAMAC delisting plan piles pressure on shrinking Dubai market

Dubai’s stock market is set for another delisting, raising a question mark over the future of one of the Gulf’s major exchanges, which was launched two decades ago.

 

A $595 million bid to take DAMAC Properties (DAMAC.DU) private by the firm’s founder Hussain Sajwani is the latest blow to the exchange, even as the Gulf city state’s property market showed signs of life in the first quarter.

 

"It is not that Dubai is becoming less attractive. Alternatives are becoming more attractive," Khaled Abdel Majeed, founder at London-based Mena Capital LLP, told Reuters.

 

Majeed said Dubai needs to work harder to attract listings amid growing competition from within the Gulf region such as Abu Dhabi and Saudi Arabia where Tadawul, the region's biggest exchange based on market value, wants to become a regional hub.

 

While the value of traded stocks in Dubai was once higher than rival Abu Dhabi, this changed in 2019 and ADX now has a more than four times higher average daily traded value.

 

ADX has also seen gains after its owner, ADQ, launched a market maker last year that tapped into a fund to boost liquidity on the bourse.

 

"It's disappointing from a market point of view that you have companies de-listing ... at a time when we think the market needs added depth, more companies, which has not been happening since 2014-2015," Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital in Abu Dhabi, said of the Dubai stock market.

 

Since the start of 2020, two prominent Dubai companies have de-listed from the Dubai Financial Market (DFM.DU) (DFM) and Nasdaq Dubai: Dubai parks operator DXB Entertainments (DXBE.DU) and Dubai ports operator DP World.

 

And shares in Arabtec, once a high-flying Dubai construction company, were suspended in September after its shareholders voted to dissolve company.

 

Emaar Malls (EMAA.DU), operator and owner of the world's largest shopping centre, in March said it planned to offer to buy out minority shareholders and merge with Emaar Properties.

 

And Dubai real estate fund Emirates REIT (REIT.DI), which is listed on the Nasdaq Dubai exchange, said in July it was considering de-listing.

 

Where Abu Dhabi is boosting liquidity through planned new listings and consolidation of assets of state holding company ADQ, Dubai appears to have become more tolerant of delistings, a Gulf M&A banker told Reuters.

 

Analysts say the move to de-list spares companies having to face scrutiny from investors, along with the running costs of a listing and disclosure and transparency requirements.

 

"If someone wants to take (their company) private; this is the time," the M&A banker said.

 

Asked what steps, if any, it was taking to ensure that listed companies remained on the exchange and that it attracted new listings, the DFM declined to comment.

 

The problem for listed Dubai real estate companies is that they are trading at a discount to the average price to earnings of the wider market, at around 8 times earnings, while the market is trading at around 20 times that.

 

"For DAMAC, I'm sure that the strategic investor, Hussain Sajwani, understands that the intrinsic value of the company is higher than the share price, Tariq Qaqish, chief executive of Salt Fund Placement in Dubai, said.

 

The two years leading to the COVID-19 pandemic exposed the vulnerabilities of Dubai's homebuilders and property companies, said Samer Haydar, director of corporate ratings at Fitch.

 

And despite signs of recovery, many are "still facing the aftermath of the pandemic in terms of negative working capital, rising leverage, weak liquidity and overall un-absorbed supply in the market," Haydar said.

 

($1 = 3.6728 UAE dirham)

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

Australia's top exporting state calls for reset in China ties

Australia's biggest exporting state on Tuesday urged Canberra to stop antagonising China, the country's top trade partner, in remarks that came amid escalating criticism of Beijing led by the United States, Australia's main ally.

 

"This isn't about kowtowing to other countries and giving in," Western Australian Premier Mark McGowan said at Australia's biggest oil and gas industry conference, being held in Perth. "There needs to be a national reset in that relationship."

 

Ties with China worsened last year when Australia called for an independent investigation into the origins of the novel coronavirus, which sparked trade reprisals from China, hitting Australian goods ranging from barley and coal to lobster and wine.

 

Relations had already soured after Australia banned Chinese tech giant Huawei from the country's 5G network in 2018.

 

Beseeching the federal government to stop talk of conflict and trade retaliation, McGowan asked: "How is it in our interests to be reckless with trading relationships that fund and drive our prosperity and our nation forward?"

 

McGowan's comments came two days after Group of Seven leaders meeting in Britain chided China over a wide range of issues, sparking an angry response from Beijing. Attending the G7 meeting as a guest, Australian Prime Minister Scott Morrison met with U.S. President Joe Biden and UK Prime Minister Boris Johnson to discuss Indo-Pacific security. read more

 

Western Australia's top exports, iron ore and liquefied natural gas (LNG), have so far escaped China's trade reprisals, with China heavily dependent on Australia's iron ore for its steel industry and increasingly reliant on gas for power generation as it looks to cut emissions from coal.

 

Western Australia exported A$104 billion ($80 billion) worth of goods to China in 2020, making up 71% of Australia's goods exports to China.

 

($1 = 1.2990 Australian dollars)

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

Thai Airways wins court approval for restructuring plan

Thai Airways International Pcl (THAI.BK) won court approval on Tuesday for a restructuring plan, a legal adviser to the company's creditors told Reuters, as the airline that is already under bankruptcy protection seeks to turn around its fortunes.

 

The Central Bankruptcy Court in Bangkok gave approval, which allows the plan to move forward, Somboon Sangrungjang said. The airline's creditors last month approved the plan to restructure 245 billion baht ($7.87 billion) of its debt, but a court hearing was postponed after two complaints were filed. read more ($1 = 31.1300 baht)

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Japan to avoid recession, but Q2 growth forecasts cut sharply

Japan's economy likely grew and avoided slipping into recession this quarter but an extension of emergency measures to stem a rise in coronavirus infections has dented the growth outlook, a Reuters poll showed.

 

Just over a month before Tokyo is set to host the Olympic Games, the world's third-largest economy was seen expanding an annualised 0.5% this quarter, less than a third of the 1.7% economists projected last month, according to the June 2-14 poll of 36 economists.

 

Japan's gross domestic product shrank by an annualised 3.9% in January-March, the first contraction in three quarters. read more

 

About 85% of analysts polled expected the next policy move by the Bank of Japan, which is set to meet this week, to be an unwinding of stimulus, but 90% don't expect that to happen until 2023 or later and the remaining 10% not until next year.

 

About two-thirds of economists, 23 of 36, expected the economy to grow this quarter, while the other 13 anticipated it would shrink, which would push it into recession - as marked by two straight quarters of contraction.

 

Japan was last in recession through the second quarter last year.

 

"Sales at stores are likely to fall, which is having the largest impact, even as the share of people ... going out despite the emergency measures is rising," said Masaaki Kanno, chief economist at Sony Financial Holdings.

 

The poll found Japan's economy would grow at a much slower rate over the next two quarters than the United States, which is said to be on track to recover all the output it lost due to the health crisis this quarter.

 

Japan's growth outlook is facing pressure from slowing economic activity and demand at home, both hit by the government's move to extend the coronavirus emergency curbs in Tokyo and other major areas through June 20.

 

The economy is likely to expand around 4.8% on an annualised basis in the third quarter, below the 5.3% growth projected by economists last month and compared to a much higher annualised rate of 7.0% in the world's top economy. read more

 

Core consumer prices, which exclude volatile fresh food prices, are set to rise 0.2% this fiscal year, the poll also showed, down from 0.3% projected last month.

 

SPENDING DRAG

 

Japan's economy has suffered from a decline in private consumption, which accounts for more than half of GDP, as people forego spending on services amid coronavirus curbs and a late vaccine rollout.

 

Twenty-eight of 37 economists said it was unlikely or very unlikely private consumption would recover to pre-coronavirus levels this year, while the other nine said it was likely or very likely to do so, the poll showed.

 

But if the health crisis subsides, the economy may be poised to see a sharp spending rebound, as people's savings have risen while the jobless rate remains below 3%, said Yuichi Kodama, chief economist of the Meiji Yasuda Research Institute.

 

"People's self-restraint is likely to continue, so a rebound may be delayed," Kodama said, adding that the spread of coronavirus variants posed a risk to the economy.

 

The poll also showed the BOJ was expected to hold its short-term interest rate target at -0.1% and the 10-year Japanese government bond yield target around 0% at its policy meeting on June 17-18.

 

Analysts were divided about what the central bank may do if it were to eventually tighten its policy framework.

 

Most widely expected options were for the BOJ to tweak its forward guidance wording, to raise the 10-year JGB yield target from around 0%, or to abandon its negative rate policy and raise short-term interest rates, the poll showed.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Rwanda: More Kigali Suburbs to Get Their Roads Upgraded

Four unplanned settlement zones of the City of Kigali will start being upgraded during the upcoming fiscal year 2021-2022, officials from the Ministry of Infrastructure have announced.

 

The four zones are Mpazi in Gitega, parts of Kimisagara and Rwezamenyo sectors of Nyarugenge District, Gatenga in Gatenga Sector of Kicukiro District and Nyabisindu and Nyagatovu areas of Kimironko Sector in Gasabo District.

 

They are among the City of Kigali's remaining unplanned settlements and the plan is to have them all livable by establishing better road network with pedestrian walkways, street lighting and proper drainage systems as is being done in Rwanda's six secondary cities and parts of Kigali to enhance urbanisation.

Since 2016, several previously unplanned settlements in Kigali, including Agatare Cell of Nyarugenge Sector and Mumena Cell in Nyamirambo Sector have been upgraded, courtesy of the Rwanda Urban Development Project (RUDP) where the WB injected $95 million and the government of Rwanda, $5 million.

 

The overall project development objective is to provide access to basic infrastructure and enhance urban management in selected urban centers of the participating Districts.

 

The project aims to provide an integrated package of support to address key challenges associated with Rwanda's urbanization. These are: access to basic infrastructure to promote livability and Local Economic Development (LED); upgrading of unplanned areas to promote inclusive urbanization; building the capacity of District governments for better urban management; and supporting Districts to engage with the private sector and enable local economic development.

The second Rwanda Urban Development Project (RUDP II) project is set to be implemented between July 2021 and 2025.

 

For the four new sites, the project cost for City of Kigali urban upgrading of unplanned settlements is $40.2 million.

 

In other parts of the city where the project enabled what officials call the comprehensive urban upgrading of informal settlements, residents are happy.

 

In Nyarugenge Sector (Agatare Cell) alone, infrastructure upgrading including new roads and drainage systems cost more than Rwf 7.5 billion.

 

As of Thursday, June 11, work to upgrade the area was estimated at 77 per cent; with asphalt roads and street lights set on up to 6.6 kilometres in addition to some 2.5 kilometres of drainage systems, among other things.

Dorothea Mujawayezu, a resident of the Rugunga neighbourhood, said: "We are happy, this used to be a very bad road. People, especially the elderly, faced it rough walking here. In addition, there used to be thugs who robbed people too but now that the roads are good and lit, that's history."

 

In the Mumena area of Nyamirambo Sector, new road construction works are ongoing with the dirt murram road being upgraded to asphalt.

 

Yvonne Mutangampundu, a tailor who resides in Kiberinka Village, in Mumena Cell, said they have waited for better roads for way too long. Now that it is finally happening, she noted she plans to bring her tailoring business closer to her home so that she can manage it better.

 

She added: "We are looking forward to our new tarmac road being finished. The road from here has been so terrible. Imagine how things would be here during the rains. It is usually awfully bad; the mud can be so bad.

 

"This road will bring development closer to us. I want to set up a tailoring shop next to my home once the road is finished."-New Times.

 

 

 

Kenya: Inside New Plans to Rescue Coffee Sector, Make Growing It Profitable

For decades, coffee farmers have been at the centre of feuds involving the management of cooperative societies and millers, affecting production and leading to massive financial losses.

 

And after the recent uprising in the tea sector where farmers took on the Kenya Tea Development Authority, kicking out long serving directors in factory elections, revival of abortive coffee reforms, partly helped by new legislation, is stirring the sector that imploded in the 90s during agitation for autonomy of individual factories.

 

Poor prices, financial indiscipline among cooperative society officials and climate change have been the main factors behind reduced productivity and profits in the coffee sector. And for a majority of farmers, the thrill of growing coffee is gone.

 

The tribulations in the sector began in the 90s when the industry suffered a decline in performance and coffee prices dipped, prompting farmers to start agitating for changes in their respective factories.

The government intervened by introducing initiatives to liberalise the sector. Key among the changes was the introduction of direct sales, otherwise known as the "second window", where farmers could sell their beans directly to overseas buyers.

 

Earning better returns

 

As a result, a few factories have managed to sell their produce directly to buyers, raising their earnings to the highest level last season. But the same reformists who pushed for changes in the coffee sector back then have told Nation that performance is worse than it used to be.

 

"Coffee farmers are still entrenched in poverty. There is not much that has been done to make coffee a profitable venture. Only a few have succeeded," said former Nyeri Town MP Wanyiri Kihoro.

 

Mr Kihoro was one of the lawmakers who agitated for giant coffee cooperatives in Nyeri to be split, arguing that they prevented farmers from earning better returns from their crop. Farmers, he said, languished in poverty, sometimes going for months without being paid, while the managers of their cooperative societies embezzled their money.

He added that farmers were unable to access international markets in plans orchestrated by cartels.

 

"We wanted a rehabilitation of the coffee sector and increased income for the farmers," he said.

 

"The problem was predominantly administrative. People with no knowledge of matters of coffee were made agents and that's how the farmers started losing."

 

The decline in coffee production was linked to farmers losing interest in the crop because they received only 30 percent of sales proceeds while the bulk of the money went to middlemen disguised as marketers.

 

It is also noted that with the introduction of the "second window"as a selling option, the three categories of licences -- milling, marketing and dealers -- were misused.

Unscrupulous individuals acquired all the three permits, with farmers losing control of their commodity and coffee prices plummeting.

 

Coffee prices in the world market continued to fall, causing confusion in most cooperative societies, as the world market was the main consumer of the crop.

 

As a result, giant coffee cooperatives in Mukurwe-ini, Tetu and Mathira in Nyeri started splitting up due to financial problems and their inability to support the financial needs of their members.

 

Some 28 factories had merged to form Tetu Coffee Growers Cooperative Society, which later split into smaller units, while Mathira Growers Cooperative Society broke up into 13 units.

 

Because of the financial dip that followed, farmers were forced to sell their produce at farm gate prices, with buyers offering a pittance for a kilogramme of coffee.

 

"A lot of factors can be attributed to the fall in prices and volumes produced. But top among them was the control of the sector through regulations that exposed farmers to corrupt officials both at the cooperative level and at the Coffee Board of Kenya," Mr Kihoro said.

 

Marketing agents

 

He added that the long marketing chain ate into farmers' earnings as their coffee proceeds would be subjected to deductions by middlemen, the cooperative society, marketing agents, the coffee auction and the international market.

 

"The amalgamation of cooperative societies created a haven for top officials to fleece the farmers," he said, adding that the officials had political protection and wanted to make sure the breaking up of societies into autonomous units failed.

 

Then came violence from enraged farmers who had grown weary of cooperative society managers who had over-borrowed from financial institutions without involving them, further pushing them to a cycle of debt.

 

A huge chunk of the loans, farmers said, went into the personal pockets of the managers, fanning anger and resentment towards the officials.

 

At one point, the Tetu Coffee Growers Cooperative Society, a pro-split group, took over the 28 factories and raised red flags atop the gates, symbolising danger.

 

Trenches were dug to prevent vehicles from moving in or out of the factories. Because harvesting was neglected, coffee beans were destroyed on farms and the hostile takeover of the factories by groups agitating for autonomy led to violence. One person was killed in Tetu and scores injured as a factory was razed.

 

Mr Karoki Wanjohi, the chairman of Thiriku Coffee Society, which was part of the Tetu giant cooperative, said the break-up was influenced by managers who were out of touch with farmers' concerns.

 

"They were misusing money and amassing wealth. The revenue was increasing but nothing was going to the farmer's pocket," he said.

 

Thiriku factory is among a dozen that are run autonomously, having split from the giant cooperative. Farmers who are members of these factories were among the highest-paid in last season's crop.

 

Mr Wanjohi said that, when the giant cooperatives existed, their bargaining power was high and they would receive farm inputs promptly and cheaply from manufacturers as opposed to purchasing at the higher market price.

 

"But there was a lot of duplication and it was expensive," he said.

 

He noted that the agitation to split giant cooperatives was politically instigated and encouraged violence. People invaded farms belonging to those opposed to their stand and destroyed coffee bushes and damaged property to intimidate them.

 

Cartels

 

"The coffee sector is now on very shaky ground. Production has declined and it will take something almost miraculous to make coffee lucrative again," said Mr Wanjohi, adding that maintaining the quality of coffee is the main challenge.

 

Meanwhile, the Ministry of Agriculture has proposed revival of the Coffee Board of Kenya in a bill that seeks to bring radical changes in the coffee sector by freeing farmers from the grip of cartels, starting at the factories.

 

In the Coffee Bill, 2020, the coffee board will register and regulate the operations of millers, marketing agents, buyers, roasters, packers, management agents and warehousemen.

 

The board will consist of a chairperson appointed by the President, three members representing cooperative societies where coffee is grown, two members representing coffee estates and two members representing coffee traders.

 

It will also participate in formulating policies in the coffee sector, and licensing millers, marketing agents, buyers, roasters, warehousemen and importers of value-added coffee.

 

The board will also undertake capacity building, technology transfer and technical assistance to counties on matters relating to coffee and provide advisory services related to coffee production, promotion, quality enhancement and compliance with standards and regulations.

 

It will impose a levy or levies on growers, importers and buyers as provided in the Act.-Nation.

 

 

 

Nigeria's Poultry, Egg Prices 'Highest Ever' Amidst Inflation, Insecurity

Nigeria's food inflation is highest in 15 years and insecurity, COVID-19, climate change and economic policies have pushed food prices beyond the reach of millions.

 

The prices of poultry products in Nigeria are at their highest levels ever as the country faces its worst food inflation in at least 15 years, traders, consumers and producers in the sector have told PREMIUM TIMES.

 

Food inflation reached 27 per cent in February 2021, according to the National Bureau of Statistics, making it the highest since at least 2005. The rise has seen the prices of all classes of food skyrocket almost on a daily basis, leaving Nigeria's large population of poor citizens struggle to get food and key ingredients.

A bag of rice that sold for about N7,000 around 2016 now sells as much as N40,000 for some brands. A sachet of tomato that sold for N50 now sells for N150, while a loaf of bread has risen from N250 to N400.

 

One food sector that has been particularly hit is poultry, which millions rely on for protein needs. A kilogramme of chicken that previously sold for N800 now sells for N2000, while a crate of egg that sold for N700 now sells for N1500.

 

A PREMIUM TIMES examination shows how several factors have contributed to the rise in poultry prices, and how the government's efforts have yielded little or no impact in solving the problem.

 

In several interviews, poultry farmers, livestock feed processors and marketers said the rise in the prices of key ingredients for poultry feeds is the major reason for the hike in prices of poultry products in the country.-Premium Times.

 

 

 

Tanzania: President Samia Orders Bot to Buy Refined Gold

PRESIDENT Samia Suluhu Hassan has instructed the Bank of Tanzania (BoT) to start buying the refined Gold to boost the country's reserve of the precious metals.

 

President Samia issued the instruction when launching the newly-constructed Mwanza Precious Metal Refinery (MPMR) in Mwanza yesterday.

 

She noted that the launching of the plant, which cost 12.2bn/- and with the daily capacity of processing 480 kilograms of minerals, paved the way for BoT to start buying the refined Gold as required by the law, and directed the central bank to do it with immediate effect.

 

Tanzania is among the world countries with highest gold reserves, with data showing that it boasts 45 million ounces. Mining makes up more than 50% of the country's total exports, of which a large part comes from gold.

"The country will benefit a lot from the gold refinery plants, some of the gains include the increase of gold reserves at the BoT and increase in national revenue through loyalties," she stated.

 

Gold reserves have always been an important part of the diversification of global reserves for countries. It is an important asset of foreign exchange reserves.

 

The new plant will be capable of purifying gold by 99.99 per cent and refining 480kg per day.

 

"This is an excellent and ultra modern refinery, its purity is of high quality, its building will beautify Mwanza city which is in tandem with the government's quest to turn Mwanza a business hub in the Great Lakes region," said President Samia.

The factory was built by the State Mining Corporation (Stamico) in partnership with Dubai's Lozera Company and the ACME Consultant Engineers Pte Limited, Singapore.

 

On its operation, the MPMR facility is expected to create a total of 120 direct employment and some 400 other indirect jobs for Tanzanians, as well as valuation of other minerals, apart from gold.

 

It is among three first ever gold refineries to be built in the country, with the other two found in Geita and Dodoma regions.

 

The Geita-based plant has the capacity of processing 450kg of gold per day while the one in Dodoma has the capacity to refine 30 kilograms of the precious metals per day.

 

To ensure the sustainability of raw materials for the refinery factories, President Samia said the government would come up with strategies that will empower small scale miners to increase their capacity to collect enough raw gold.

"My concern is the availability of raw materials. As the government, we have a lot of work to do to enable miners to dig more so that more raw materials are made available," said the head of state.

 

The president also commended the MPMR investors for setting aside a budget of 346.5bn/- for buying raw gold to be refined, asking the small-scale miners in the lake zone regions to make better use of the opportunity for individual and national gains.

 

"The plant will not only stimulate economic activities in Mwanza region but also create intense competition with other regions, out of the 346.5bn/- that has been set aside by investors to buy all the gold that will be mined," she said.

 

According to the Head of State, effective supervision of the sector would enable the government to realize the target of increasing the contribution of the mineral industry to the Gross Domestic Product (GDP) to 10 per cent, by the year 2025.

 

Currently, the contribution of the mineral sector to the GDP stands at 6.7 per cent up from 5.2 per cent of the financial year 2019/2020.

 

Official data shows the contribution of the mining sector to Tanzania's economic growth was 0.2 per cent between 1995 and 1999, increased to 3.4 per cent between 2007 and 2008, and to 4.8 per cent by 2017.

 

Earlier, the Minister for Minerals Doto Biteko, said for the year 2020/2021, his docket planned to collect 526bn/- from the sector but so far it has managed to raise 544bn/-, an equivalent to 103 per cent of the target.

 

"In the coming fiscal year, 2021/2022, we have set a target to collect 650bn/- from the mineral sector. It is my strong belief that the target will be met accordingly," said the minister.

 

Mr Biteko said apart from creating employment for surrounding communities, the Mwanza gold refinery will also raise revenue collection for Ilemela Municipal as well as significantly boost the country's economy.

 

In his welcoming remarks the MPMR factory Chief Executive Officer Mr Anand Mahajan commended the government for the successful completion of the construction of the gold refinery plant saying it would play a huge role towards the country's economic growth.-Daily News.

 

 

 

 


 


 


 

 

 

 


 

INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


Edgars

AGM

virtual

June 30, 8:45am

 


GetBucks

2019  AGM

Conference Room 1, Monomotapa Hotel, 54 Parklane

July 1, 8:30am

 


GetBucks

2020 AGM

Conference Room 1, Monomotapa Hotel, 54 Parklane

July 1, 10:30am

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

Dairibord

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


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