Major International Business Headlines Brief::: 22 June 2021

Tue Jun 22 08:44:15 CAT 2021

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Major International Business Headlines Brief::: 22 June 2021

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

ü  UK starts talks to join Asia-Pacific free trade pact

ü  China tells banks to stop supporting cryptocurrency

ü  Bumble closes to give 'burnt-out' staff a week's break

ü  Michelin-star restaurant stops serving lunch due to lack of staff

ü  Gupta-owner Jaguar Land Rover supplier in talks with lenders

ü  German watchdog probes Apple's market dominance

ü  Morrisons' share price soars 28% on takeover offer

ü  Online shopping boom drives rush for warehouse space

ü  Investors focus on central bank speakers after extreme market moves

ü  Dollar catches breath ahead of Powell testimony; bitcoin attempts recovery

ü  Nigeria's Solar Wealth Can Fix Costly Electricity Problem

ü  Africa Renewable Energy Fund II Secures €125 Million First Close With Sefa and Ctf Investments

ü  Nigeria: Mobil, NNPC to Pay N82bn Damages to Akwa Ibom Communities Hit By Oil Spill

 <mailto:info at bulls.co.zw> 

UK starts talks to join Asia-Pacific free trade pact

Britain is to start negotiations to join a free trade area which could grant businesses access to "some of the biggest economies of the present and future", the government has said.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is made up of 11 nations, including Australia, Canada and Japan.

Membership would reduce tariffs on exports such as cars and whisky.

The trade area covers a market of around 500 million people.

New Zealand, Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam are also founder members of the trade agreement, which was established in 2018. The UK applied to join the bloc in January following Brexit.

International Trade Secretary Liz Truss said the trade area was the "part of the world where Britain's greatest opportunities lie".

Being granted membership would be a "glittering post-Brexit prize that I want us to seize", she said.

Ms Truss said membership would help "farmers, makers and innovators sell to some of the biggest economies of the present and future, but without ceding control over our laws, borders or money".

However, there has already been a political backlash against the UK's recently agreed free trade deal with Australia. UK farmers say imports from Australia could undercut them on price and undermine welfare standards.

The UK is the first non-founding country to apply to join the CPTPP and would be its second biggest economy after Japan, if negotiations succeed.

The free trade agreement aims to reduce trade tariffs - a form of border tax - between member countries and includes a promise to eliminate or reduce 95% of charges on traded goods.

In return, countries must cooperate on regulations, such as food standards. However, these standards and regulations do not have to be identical, and member countries can strike their own trade deals.

Liz Truss will start the (virtual) talks on Tuesday to join the 11-strong trans-Pacific trading club, and she'll do so from the very room where Winston Churchill oversaw the War effort. The aim is to showcase post-Brexit ambitions.

But it is more about strategy than scale. With deals already in place with eight of the CPTPP members, joining may add as little as 0.1% to the size of the UK economy, and it's not clear yet what the UK will have to concede to get the deal, nor how quickly it will happen.

The real boost will come if others sign up to this pact. So far, America under President Joe Biden hasn't expressed an interest to do so - nor, as the trade secretary admitted to me, has it set a date to resume talks on a UK-US bilateral deal, paused earlier this year.

As trading partners go, the US is twice as important to the UK as all the CPTPP nations put together.

Meanwhile, some economists have flagged up that trade with the EU may have been dampened to the tune of several billions of pounds by the new trading arrangements with that bloc, with fresh food particularly hard hit.

2px presentational grey line

The Department for International Trade (DFIT) said exports to countries in the Asia-Pacific bloc were set to increase by 65%, around £37bn, between now and 2030.

"Joining would boost this growth and support British jobs. These benefits would increase over time, with the Philippines, Thailand, Taiwan and the Republic of Korea all having expressed interest in joining," a DFIT statement said.--BBC

China tells banks to stop supporting cryptocurrency

China has expanded its clampdown on cryptocurrencies, telling banks and payments platforms to stop supporting digital currency transactions.

That follows an order on Friday to shut down Bitcoin mining operations in Sichuan province.

The price of Bitcoin slumped by more 10% on Monday but stabilised in Asian trading on Tuesday.

The value of the cryptocurrency has fallen by around 50% since hitting a record high above $63,000 in April.

On Monday, China's central bank, the People's Bank of China (PBOC), said it had recently summoned several major banks and payments companies to call on them to take tougher action over the trading of cryptocurrencies.

Banks were told to not provide products or services such as trading, clearing and settlement for cryptocurrency transactions, the PBOC said in a statement.

China's third-largest lender by assets, the Agricultural Bank of China, said it was following the PBOC's guidance and would conduct due diligence on clients to root out illegal activities involving cryptocurrency mining and transactions.

China's Postal Savings Bank also said it would not facilitate any cryptocurrency transactions.

Chinese mobile and online payments platform Alipay, which is owned by financial technology giant Ant Group, said it would set up a monitoring system to detect illegal cryptocurrency transactions.

The latest measure came after authorities in the southwest province of Sichuan on Friday ordered Bitcoin mining operations to close down.

China accounted for around 65% of global Bitcoin production last year, with Sichuan rating as its second largest producer, according to research by the University of Cambridge.

Last month China's cabinet, the State Council, said it would crack down on cryptocurrency mining and trading as part of a campaign to control financial risks.

Some analysts have warned of potential further falls in the price of Bitcoin due to a price chart phenomenon known as a "death cross", which occurs when a short-term average trendline crosses below a long-term average trendline.

Other cryptocurrencies also fell as investors worried about tougher regulation of digital currencies around the world.

Separately, the auction house Sotheby's said that a rare pear-shaped diamond that is expected to sell for as much as $15m can be bought at an auction next month using cryptocurrencies.

It is the first time that such a large diamond has been offered in a public sale with cryptocurrency.--BBC

Bumble closes to give 'burnt-out' staff a week's break

Bumble, the dating app where women are in charge of making the first move, has temporarily closed all of its offices this week to combat workplace stress.

Its 700 staff worldwide have been told to switch off and focus on themselves.

One senior executive revealed on Twitter that founder Whitney Wolfe Herd had made the move "having correctly intuited our collective burnout".

Bumble has had a busier year than most firms, with a stock market debut, and rapid growth in user numbers.

The move was praised by its head of editorial content, Clare O'Connor, as the company taking "a much-needed break".

The pandemic has been extremely busy for the firm as lockdown boredom set in and the swiping to find a match picked up in popularity.

The number of paid users across Bumble and Badoo, which Bumble also owns, spiked by 30% in the three months to 31 March, compared with the same period last year, according to its most recent set of results.

And Ms Wolfe Herd, also became the youngest woman, at 31, to take a company public in the US when she oversaw Bumble's stock market debut in February.

She rang the Nasdaq bell with her 18-month-old baby son on her hip and in her speech she said she wanted to make the internet "a kinder, more accountable place".

Is Big Tech going off remote working?

The tech billionaire who is putting women first

The holiday announcement comes after several tech companies have unveiled their plans for remote working as the economy reopens.

Twitter, for example, has said that it expects a majority of its staff to spend some time working remotely and some time in the office. That's despite its boss Jack Dorsey initially saying that employees could work from home "forever".

And Google rejigged its timetable for bringing people back to the workplace. As of 1 September, employees wishing to work from home for more than 14 days a year would have to apply to do so.

But Apple employees have launched a campaign pushing back against boss Tim Cook's plans for a widespread return to the office, according to media reports earlier in June.

It followed an all-staff memo in which the Apple chief executive said workers should be in the office at least three days a week by September.

Apple's policy has "already forced some of our colleagues to quit", an internal letter seen by tech publication The Verge said.

"Without the inclusivity that flexibility brings, many of us feel we have to choose between either a combination of our families, our wellbeing, and being empowered to do our best work, or being a part of Apple," the letter said.

It also accuses executives of a "disconnect" with employees on the topic of remote or flexible working.

Other companies, such as accountancy firm KPMG, have introduced new measures to combat the fatigue some workers might feel after more than a year of working in a less-than-ideal home set-up.

Voice-only meetings, for example, are now required on Fridays to reduce the need for video calls. And it's discouraging early morning meetings to give staff more time to prepare for their working day.-BBC

Michelin-star restaurant stops serving lunch due to lack of staff

A Michelin-star restaurant has said it will no longer open at lunchtimes due to a shortage of staff.

David Moore, the founder of Pied à Terre in London, said he decided to halt the restaurant's lunchtime menu to "preserve" his depleted workforce.

"If I slog them to death, in two weeks' time, I won't have a restaurant," he told the BBC.

Mr Moore is the latest of several hospitality business owners to raise concerns over staff shortages.

"You struggle through everything that we have had to struggle through with Covid, and then you come back and you get another kick in the teeth," said Mr Moore.

As the UK economy emerges from the effects of the pandemic, several industries have reported shortages of staff, with UK job vacancies hitting their highest level since March 2020.

The hospitality sector has been hit harder than most, having to cease trading during lockdowns and operating under tight restrictions.

It has led to many staff being placed on furlough, which has prompted some to leave the profession. Industry body UK Hospitality has said waiting staff and chefs are in particular demand.

Restaurateur Mr Moore said he 800 people applied for a receptionist role in November 2020, but he received just seven responses when he re-advertised for the role three weeks ago, and no-one showed up to an interview.

He said higher wages were "still not getting the eyeballs" on advertisements.

"I don't know anybody who is not looking for a kitchen porter," he added.

Mr Moore said Brexit was "definitely the biggest" factor behind staff shortages, and he said the "heartbeat" of the hospitality industry was "young kids" coming from abroad to work in restaurants and bars to gain life experience and new skills.

"[The government] don't realise the huge commodity we have that they have excluded us from, that keeps this industry moving more than anything else," he said.

He said before the pandemic, just three out of his 30-strong workforce were British. His restaurant currently has 12 staff.

He said some workers who were furloughed during lockdown had moved back to their home nations and decided not to come back to the UK.

"Anecdotally, I have a lot of pals saying they are opening up restaurants and they are expecting their 18 employees to come back and only 12 turn up," The Pied à Terre founder said.

"They don't say anything because they don't want to lose their furlough, so they don't mention anything until the last minute.

Mark Agnew, manager of Gylly Beach Cafe in Falmouth, Cornwall, said he will close every Monday and Tuesday due to staffing shortages.

"The main reason is a severe lack of trained professional chefs, [and] trained front of house," he said.

"There seems to be a national crisis that we are now feeling the effects of. Brexit I'm sure is a factor within this. Undoubtedly Covid and the continual lockdown, too."

Before Brexit a lot of the UK's hospitality workforce was made up of workers from overseas, including from the EU, but hundreds of thousands of foreign workers have left the UK in 2020 and it is unclear whether they will return.

According to UK Hospitality, 1.3m foreign workers left the UK during the pandemic.

Kate Nicholls, chief executive of UK Hospitality, said labour shortages appeared to be a "perennial problem" which had been "aggravated further by many foreign workers not returning to the UK, either because of travel restrictions or their ability to resume work in the UK".

Itsu boss Julian Metcalfe said the food chain's "young European chefs" had "now sadly all disappeared" because "they are not allowed in".

Mr Metcalfe said there were many reasons for staff shortages, but that Brexit posed a "long term" issue.

Mr Moore echoed calls by Mr Metcalfe for the government to grant 18-month or two-year work visas to people wanting to work in hospitality in the UK.

A government spokesman said it had "implemented an unprecedented package of measures to support businesses" during the pandemic and added it was working with UK Hospitality to "better promote jobs in the sector".

"We want employers to focus on training and investing in our domestic work force, rather than relying on labour from abroad. Employers should focus on getting people in the sector who are benefitting from the furlough scheme back to their roles when restrictions end," a statement added.-BBC

Gupta-owner Jaguar Land Rover supplier in talks with lenders

Part of Sanjeev Gupta's metals empire is holding talks with its lenders to avoid collapsing into administration.

Liberty Aluminium Technologies employs 250 people across sites in Coventry, Witham and Kidderminster and is a supplier to Jaguar Land Rover.

The firm was put up for sale recently as part of attempts by Mr Gupta to refinance his beleaguered GFG Group.

Mr Gupta also recently put much larger plants in Stocksbridge, West Bromwich and France up for sale.

GFG Alliance said it had been exploring "strategic options" regarding the future of Liberty Aluminium Technologies and was in talks with "four interested parties".

It said talks had "focused on identifying new owners which would provide a sustainable future for the business."

The firm said it was "also in discussions with LAT's main creditor to give it the time to conclude that process effectively."

News of talks specific to LAT were first reported by Sky News.

The BBC has learned that government officials have not yet been involved in these talks despite assuring MPs and unions that it was monitoring the situation at GFG very closely.

The UK government rejected a request for £170m in public money to prevent collapse.

Mr Gupta's empire has been in dire financial straits since the group's main financial backer Greensill Capital went bust in early March.

Since then, the Serious Fraud Office has launched an investigation into suspected fraud, fraudulent trading and money laundering. GFG says it is co-operating.

GFG Alliance employs 35,000 people at companies stretching from Wales to Australia. Its Liberty Steel arm in the UK has about 3,000 staff.

The company's reliance on Greensill caused many to worry that it might itself be at risk following the finance firm's demise. GFG is in talks with finance firms about providing emergency loans.

Mr Gupta was once hailed as the saviour of British steel when his company bought a struggling steel mill in South Wales, saving it from likely closure. Liberty Steel then went on to snap up several ailing UK plants and turn them around.

GFG now operates in 30 countries, and has revenues of about £20bn.-BBC

German watchdog probes Apple's market dominance

Apple is under investigation by the German competition watchdog.

The Federal Cartel Office (FCO) said the initial investigation will look at whether the company is of "paramount significance across markets".

Apple said it looked forward to "having an open dialogue" with the FCO about any of its concerns.

Facebook, Amazon and Google have faced similar probes this year, after a new German competition law enabled early action against large digital firms.

In a statement, Andreas Mundt, President of the FCO, said it would examine whether with iOS Apple had created "a digital ecosystem around its iPhone that extends across several markets".

He added that a focus of the investigation would be the App Store, "as it enables Apple in many ways to influence the business activities of third parties".

In June the UK's Competition and Markets Authority (CMA) confirmed it was investigating Apple and Google over their "effective duopoly" in mobile app stores, operating systems and web browsers.

Further scrutiny

Depending on the outcome of its investigation, the FCO said it would look in more detail at specific practices of Apple, in a possible further proceeding.

The FCO said it had received various complaints alleging anti-competitive practices, which a further probe could consider.

The watchdog noted that App developers had criticised "the mandatory use of Apple's own in-app purchase system and the 30% commission rate associated with this".

It had also received a complaint from the advertising and media industry about restrictions on user tracking in iOS 14.5, the watchdog said.

The FCO said it would establish contact, where necessary, with the European Commission, which is currently investigating how App Store policies affect music streaming.

In response to the news, Apple said the "iOS app economy" supported more than 250,000 jobs in Germany.

It added that the App Store had given "German developers of all sizes the same opportunity to share their passion and creativity with users around the world, while creating a secure and trusted place for customers to download the apps they love with the privacy protections they expect."-BBC

Morrisons' share price soars 28% on takeover offer

Morrisons' share price has surged by 28% after a US private equity firm made an offer to buy the supermarket group for £5.5bn.

The shares closed at 228p on Monday, just below the 230p-a-share proposed by Clayton Dubilier & Rice.

Morrisons' board has rejected the offer, saying it "significantly undervalued" the business "and its future prospects".

However, there is speculation the move may prompt others to bid for the group.

Morrisons - the UK's fourth-largest supermarket chain - has nearly 500 shops and employs about 118,000 people.

George McDonald, executive editor of the publication Retail Week, said CD&R's proposal "could flush out more bidders".

He pointed to private equity firms Apollo Global Management and Lone Star Funds, which had been interested in buying Asda.

"But one of the interesting things about Morrisons is the closeness of its relationship with Amazon," he told the BBC's Today programme.

Morrisons share price graphic

Morrisons has had a relationship with Amazon since 2016, under which the supermarket sells fresh produce and food through Amazon's website.

Mr McDonald said: "Amazon hasn't, so far, really become a force to be reckoned with in food but it would like to be. You wonder whether this situation might flush out interest from them."

Amazon owns the US supermarket chain Whole Foods, which also has seven outlets in the London.

Under UK takeover rules, CD&R has until 17 July to announce a firm intention to bid or walk away. Its initial proposal offers 230p per share for Morrisons.

In addition to the cash offer, CD&R would take on Morrisons' £3.2bn of debt, taking the total value of any deal to almost £9bn.

However, Legal and General Investment Management, which is a top 10 shareholder in Morrisons, criticised the private equity firm's approach.

Andrew Koch, L&G senior fund manager, told the Financial Times that the retail sector in general "looks undervalued", adding: "Private equity look to be interested in Morrisons partly because it has a lot of freehold property which they would 'sale and leaseback' to generate cash to pay back to themselves."

Morrisons owns the freehold on around 85% of its properties including its supermarkets.Mr Koch said: "That's not adding any genuine value, and the company could do that themselves. So I would personally not expect a bid to succeed at that level."

A successful bid by CD&R for Morrisons would mark the second time this year that a private equity firm has been involved in the takeover of a UK supermarket.

Earlier this year, TDR Capital and the Blackburn-based Issa brothers bought a majority stake in Asda from US parent Walmart, valuing the supermarket at £6.8bn.

However, Seema Malhotra, Labour's shadow minister for business, expressed caution about what a potential takeover of Morrisons could mean for the workforce.

"Our supermarkets... need owners that put the long-term interests of the business and its employees first," she said.

"When Debenhams went bust we saw private equity firms walk away while employees lost their jobs and staff who have paid into the pension scheme were left out of pocket. Too often dodgy private equity firms load the companies with debt and leave while pocketing the dividends. This has to end."

The shop workers' union, Usdaw, declined to comment on CD&R's proposal and what it could mean for jobs.

CR&R has made investments in UK retail in the past - it banked £1bn from selling its stake in discount chain B&M - and it counts Sir Terry Leahy, the former chief executive of Tesco, as a senior adviser.

Morrisons' entire executive board is made up of former Tesco executives, including chief executive David Potts, chief operating officer Trevor Strain and chief financial officer Michael Gleeson. Morrisons' chairman Andrew Higginson was also a long-time executive at Tesco.

Through CD&R, Sir Terry is also chairman of Motor Fuel Group which operates hundreds of petrol forecourts and convenience stores.

In 2018, CD&R acquired convenience and petrol forecourt firm MRH for £1.2bn. Together Motor Fuel Group and MRH operate some 900 sites selling brands such as BP Esso and Shell as well as Budgens, Costa Coffee and Spar.

Unlike Tesco and Sainsbury's, Morrisons has few convenience stores. A deal with CD&R could see the supermarket's brand rolled out across Motor Fuel Group's sites.

Asda's new owners, Zuber Issa and Mohsin Issa, are also the co-chief executives of EG Group, which operates more than 6,000 convenience and petrol forecourts sites across 10 countries. Through the Asda deal they acquired 323 convenience and petrol forecourts.

'Surprising'

Shares across retail-related companies rose following the emergence of the bid approach.

Ocado, the grocery delivery and distribution platform, saw its shares rise 5%, Sainsbury's added 3.7% and Tesco climbed 1.1%.

Despite being one of the retail sectors allowed to stay open throughout the entirety of Covid, some supermarkets have seen their share prices underperform.

Michael Hewson, chief market analyst at CMC Markets, said this was "surprising" given the resilience shown by the supermarkets amid the pandemic.

"While in the case of Morrisons profits halved last year, like-for-like sales growth remained resilient in its first quarter, rising 2.7%, despite the tough comparatives of last year, when sales surged for all three as people stockpiled all manner of staples."

For the year to the end of January, Morrisons reported a 50.7% drop in annual pre-tax profit before exceptional items to £201.1m.

The supermarket paid back £230m of business rates relief that the government had granted to businesses to help them through Covid.

Earlier this month, Morrisons faced a significant backlash over bonuses from investors at its annual general meeting

The company's board had stripped out the cost of the pandemic when calculating bonuses for senior staff.-BBC

Online shopping boom drives rush for warehouse space

"I've been working in logistics for 30 years and I've never seen demand like this," says Robin Woodbridge.

The company he works for, Prologis, owns and manages warehouse logistics parks across the UK.

They're building as fast as they can, but it's been a struggle to keep pace with the boom in online shopping in recent years.

And the pandemic has only served to accelerate the trend, making warehousing hot property.

Prologis's biggest park, known as Dirft, is just off the M1 near Northampton. You can see the big sheds towering over the fields from the motorway. It's a vast site with three rail freight terminals.

When you click to buy online, there's a good chance the product will start its journey here, whether that's baked beans, laptops, furniture or fashion.

Despite its size, it's not big enough.

Hundreds of construction workers are beavering away on expanding the site.

"We're building buildings speculatively, which means we haven't got a customer lined up, and we're letting them before we finish, something which doesn't happen very often," says Mr Woodbridge, who is head of capital deployment for the firm.

It wasn't that long ago that warehouses were unloved by investors, who continued to pour money into retail and office space.

But things look very different now. Our High Streets and town centres are grappling with too much retail space and the logistics sector can't build warehouses quickly enough.

New research from Savills, commissioned by the UK Warehousing Association, shows the dramatic increase in warehouse space in the last six years.

In 2015, there was 428 million square feet of large warehouse space in the UK. That's now risen by 32% - adding the equivalent of an extra 2,396 football pitches.

The occupancy mix has also changed. In 2015, High Street retailers were the dominant occupiers, but now they've been overtaken by third party logistics providers, like DHL and Yodel, who fulfil and deliver most of our online shopping.

The biggest take-up in space, as the chart below shows, has come from the so-called pureplay online retailers, firms which don't have physical stores and only sell online, such as Boohoo. These online retailers have increased their warehouse footprint by 614% in just six years.

The sheds themselves are also getting bigger. At Dirft, a super-sized building is taking shape which is the size of ten football pitches. The warehouse will be Royal Mail's biggest parcel hub, processing more than a million packages a day.

"Without these sheds, society can't function. These facilities make everyday life possible", says Mr Woodbridge.

He reckons that for every additional billion pounds in spending online, a further 775,000 sq ft of warehouse space is needed to support it.

When this vast logistics park is eventually filled, some 15,000 people are expected to be employed here. A new training academy will open shortly to help attract and train people for a career in logistics.

"Gone are the days when you had a man in a brown coat," says Kevin Mofid, head of industrials and logistics research at Savills.

"As online retail has grown, the type of people required in warehousing has changed as well, now it's robotics engineers and data scientists. Warehouses have become huge centres of technical excellence to gain efficiencies."

And he believes there's a long way to go before the UK reaches "peak shed".

Savills tracks how much warehouse space companies require and says that demand is continuing to soar, by 232% in the first quarter of this year compared with the same period in 2020.

Kevin Mofid says this race for space reflects more than just our changing shopping habits.

"There's also increased demand in manufacturing and automotive. For instance, there will be new battery plants for electric vehicles, and as a result of Brexit, companies will want to store more goods in the UK," he believes.

It may prove a challenge to continue expanding at this pace.

Peter Ward, chief executive of the UK Warehousing Association says the government needs to recognise the importance to the economy of this fast-growing sector.

"While we hear a great deal about building 250,000 new homes each year over the next five years, the fact that this will create a million new delivery points seems to have been largely overlooked.

"It is high time for warehousing to be baked into planning policy, in the same way that GP surgeries and schools are an accepted part of infrastructure planning," he says.-BBC

Investors focus on central bank speakers after extreme market moves

(Reuters) - With all eyes on the U.S. central bank this week, some investors are looking to a parade of Federal Reserve speakers to calm market volatility, saying the reaction to the Fed's June meeting was too extreme.

The Fed last week signaled a potentially tougher stance on inflation and shifted projections for its first two rate hikes into 2023, sparking a selloff in U.S. stocks, boosting the dollar and flattening the Treasury yield curve in its fastest re-shaping since March 2020, according to Citi analysts.

However, those moves partially reversed on Monday as stocks rebounded and the dollar retreated.

Investors are now anticipating what message will come from Fed Chairman Jerome Powell, due to speak before Congress on Tuesday at 2 pm ET (1800 GMT), as well as several other key Fed officials making appearances throughout the week. Data is also due on housing and the Fed's preferred inflation gauge.

"I expect Powell will try to reverse some of the damage last week's Fed meeting did," said Tom Graff, head of fixed income at Brown Advisory. "I don't think they intended to communicate such a hawkish message."

Graff pointed to the yield curve on Monday "steepening a little which might show the market is expecting a little reversal."

In prepared remarks from Powell released by the Fed late Monday afternoon ahead of the his congressional hearing, the Fed chairman said he regards the current jump in inflation, in fact, as likely to fade. read more

"I think that this is just a continuation of what they said last week that things are improving, things are getting better but we're not there yet, and I think that's what this speaks to," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

REFLATION TRADE IN DANGER?

At stake is the market's view on whether the Fed has grown hawkish enough to endanger the so-called reflation trade, a bet on a powerful U.S. growth revival that has over the last several months helped boost prices for shares of economically sensitive companies, while weighing on the dollar and lifting yields. Some of those trades unwound last week.

"We saw big drama playing out in some of the reflation trades," said Thanos Bardas, co-head of global investment-grade fixed income at Neuberger Berman.

"The market over-reaction was pretty evident," he said, adding that he expects cooler heads to prevail this week.

Others also saw a reversal of some of those positions likely. Analysts at TD Securities said the yield curve flattening had been "extreme."

The yield curve flattens when shorter-dated rates, which are more sensitive to interest-rate policy, move faster than longer-dated rates, indicating investors believe monetary policy could tighten before the economy has fully recovered from the coronavirus recession.

"This past week showed crowded investor positioning for a steepening curve can cause the boat to flip over as flattening can occur quickly on any disinflationary developments," said Matt Miskin, co-chief investment strategist, John Hancock Investment Management.

The Cboe Volatility Index (.VIX), an options based measure of expectations for stock market gyrations, fell on Monday after touching a 4-week high earlier in the session. Meanwhile, the Deutsche Bank Currency Volatility Index (.DBCVIX) was at a two-week high, while the MOVE index (.MOVE), a bond market volatility gauge was at a two-month high.

The parade of Fed speakers began on Monday morning, with two regional officials saying that a faster withdrawal from the central bank's bond purchase program could give it more leeway in deciding when to raise interest rates. read more

Other speakers this week include Federal Reserve Bank of Cleveland President Loretta Mester, who leans hawkish.

Some investors were looking at the week as an opportunity.

"We are telling folks if you have a 12-month outlook that we would be looking at this pullback as an opportunity to enter the value trade," said Keith Lerner, chief market strategist at Truist Advisory Services in Atlanta, adding: "It is a big week."

The Thomson Reuters Trust Principles.

Dollar catches breath ahead of Powell testimony; bitcoin attempts recovery

(Reuters) - The dollar paused for breath on Tuesday as traders looked to testimony from Federal Reserve Chair Jerome Powell for further guidance on the central bank's recent surprise shift in its policy outlook, while support crept back for cyptocurrencies.

The greenback has gained sharply since the Fed last week flagged sooner-than-expected interest rate hikes, although it dipped on Monday to hand back a little bit of that rise.

Against the euro , the dollar nursed an overnight loss of about 0.4% to steady around $1.1909. It crept higher to 110.40 yen , and the dollar index was flat at 91.935 after a loss of about 0.5% on Monday.

The Australian and New Zealand dollars eased - after Monday's bounce from multi-month lows - with the Aussie down 0.3% to $0.7520 and the kiwi down 0.15% to $0.6978.

"We've had a meaningful shift (at the Fed) from a longtime dovish stance to now a slightly hawkish one," said Westpac currency analyst Imre Speizer.

"We've had a bit of a positioning cleanout," he added.

"The whole world was mega short the U.S. dollar, and that's in good part probably been cleaned out already, and now we take a wee breath before the next move up," he said.

In the medium term, investors will be keenly focused on the U.S. labour market as its performance is likely to have an influence on the Fed's attitude. In the nearer future, all eyes are on Powell who appears before Congress from 1800 GMT.

In prepared remarks he noted sustained labour market improvement and the recent increase in inflation. read more

On Monday hawkish Fed officials such as St. Louis Fed President James Bullard and Dallas Fed President Robert Kaplan had remarked on the risks of acting too slowly. read more

However, New York Fed President John Williams said it was too soon to shift policy, and that he expects inflation to ease from about 3% this year to close to 2% in 2022 and 2023 - leaving markets none the wiser.

"The Fed is nearly always late on such things," said RBC Capital Markets' chief economist Tom Porcelli, who thinks core inflation could be higher - just under 3% - by the end of 2022.

"That is not 2% inflation," he said in a note, adding it is going to eventually apply pressure to the Fed to move on rates.

"In the meantime, we have no doubt with that 2% forecast as cover, Powell will attempt to play down the likelihood of a rate hike next year. But just as he eventually relented on taper talk, he will relent on dismissing talk about hiking rates too. Just give it more time."

Also on Tuesday Fed members Loretta Mester are due to make speeches.

Elsewhere sterling steadied at $1.3910, holding on to its overnight bounce as investors look forward to the British economy reopening further on July 19.

Bitcoin and other cryptocurrencies found something of a footing after slumping on Monday when a tightening crackdown on trading and mining in China, as well as technical factors, whacked the asset class. read more

On Tuesday they held above May lows, with bitcoin at $32,929, but the mood remained fragile.

"The tides of FONGO (Fear of Not Getting Out) are creeping in," said Chris Weston, head of research at broker Pepperstone.

"Bitcoin is also at a make or break point," he said, as it tests May's trough near $30,000.

"Ethereum looks plain ugly and if crypto is an emotive asset, then one would have to be the staunchest of HODLers to be holding this and not look for some sort of hedge," he added, using cryto-market slang for bullish investors.

The Thomson Reuters Trust Principles.

Nigeria's Solar Wealth Can Fix Costly Electricity Problem

Experts say solar-based generating units can be built up far quicker than traditional power plants and has proven capability to plug the gaps in Nigeria's energy requirements

Exorbitant electricity bills never stop coming, yet lengthy power cuts dog 58-year-old Olanrewaju Jaji's shop where she sells soft drinks in Ikorodu, a border town north of Nigeria's economic nerve centre, Lagos.

She had bought different sizes of generators, but they hardly lasted. She had almost given up until a flicker of hope came to her doorstep: a low budget solar-powered appliance advertised to her by a local merchant.

A one-off payment for the appliance would cost her N52,000, she was told, but payment in instalment would be higher. Even at that, the appliances are only available for distribution in Lagos.

Although the installation cannot power any of her three freezers, the fact that she can light up her shop at night, power her fan and radio - her major source of news - gave her some respite.

Take irregular power supply away from business owners like Mrs Jaji, then 80 per cent of Nigerian businesses would have solved their second biggest challenge after lack of access to finance.

If the same is done to individuals, then around 55 per cent of Nigerians, per a government report, who have no access to grid-connected electricity, would also have a major burden taken off.

Nigeria's power generation capacity, which consists of gas-fired and hydro-powered stations, is about 13,000 Megawatts, but the electricity transmitted remains less than 4,000MW/hour.

This is unlike South Africa, a country with less than a third of Nigeria's population, which has an installed electricity capacity that is four times more than Nigeria's, according to the U.S. Power Africa programme.

Again, South Africa's per capita energy consumption is 31 times higher than Nigeria's, even though the southern African nation is Africa's second-largest economy.

Nigeria, Africa's largest economy, loses an estimated $29 billion a year due to this, which is about six per cent of the GDP, according to the International Monetary Fund.

The government report stated that to keep pace with its fellow economic giants like South Africa, Nigeria would need to see a five times increase in electricity consumption.

In search of an alternative, households and businesses have resorted to fossil-fueled generators that gulp about $14 billion annually and pose environmental and health risks.

Solar as an alternative

Nigeria's location in the tropics offers the country an abundance of sunshine all year round.

Therefore, as Africa's largest economy and with over 2,600 hours of sunlight per year (about 7 hours of sunlight daily, on average), experts believe Nigeria has the economic war chest and environmental conditions to tap into renewable energy power sources like solar.

According to a research published by Ikponmwosa Oghogho, a lecturer at Delta State University, with this potential, about 1500PJ (the equivalent of 258 barrels of oil) could be available to Nigeria annually from solar energy.

This can be achieved just by using solar appliances with five per cent conversion efficiency over only one per cent of the total land area of the country for about six months of a year.

This shows that more power generation abounds if the solar value chain was explored on a larger scale.

"Due to the numerous disadvantages of conventional fuel sources when compared with solar energy and the recent giant strides in improving solar cell efficiency using a photovoltaic (PV) device that converts 40.8 per cent of light that hits it into electricity," Mr Oghogho wrote, "Nigeria needs to reposition herself by investing in this invaluable resource to secure the energy future of our economy."

Estimates by the World Bank suggest that investing in solar-powered plants could increase the availability of electricity to almost 80 million people who currently have none.

This means a transition to solar-based energy could help diversify Nigeria's energy portfolio and reduce high electricity bills, as was the case for Mrs Jaji. Such transition could also stop the reliance on fossil fuels which come with attendant challenges like pollution through flaring and spillage.

Like Mrs Jaji's experience, solar-powered appliances could also be a good alternative to generating sets without cost and health risks that come with the latter.

Although solar appliances are relatively more expensive than generating sets, the cost pales when compared with the cost of powering, servicing, fueling and maintaining generating sets.

Meanwhile, solar power generation is becoming cheaper than fossil fuel alternatives, according to the International Renewable Energy Agency, an intergovernmental organisation that supports countries' transition towards sustainable energy.

Solar-based generating units can be built up far quicker than traditional power plants and it has proven capability to plug the gaps in Nigeria's energy requirements, the CEO of Diadem Global, a power-solution technology startup, Oyeniyi Uthman, said.

The fact that the solar units can be built in chunks, used with inverter and battery and upgraded to higher capacity as time goes on make them a desirable alternative to generating sets that emit harmful greenhouse gases and other air pollutants into the environment, he added.

Some use the inverter alone, he said, with the option of incorporating solar panels later.

An Abuja-based businesswoman, Haulat Yusuf, uses the inverter alone and said it has been effective for her family and "when there is power cut for days, you don't know."

The downside, however, is that, because the high capacity batteries have to be charged for a long time, it consumes more electricity.

"This increases the amount of electricity units we now buy. But it has been very helpful," Mrs Yusuf said.

"Consumers are getting to know more about solar energy and because it offers them financial savings and power efficiency," Mr Oyeniyi noted.

"Even when they (consumers) say the cost of installation is much, they come back for more and make more referrals to us.

"Prices of installation are falling as a result of manufacturing costs and market competition," he said.

On the average, powering a three-bedroom household in Nigeria with solar energy costs about N1.8 million and it would come with a battery bank for energy storage and solar panels.

The panels are installed on the roof to independently trap energy, while the solar battery storage systems help to store extra solar energy for later use, and they can be useful at nighttime and rainy days.

A list of invoices issued to this reporter by Diadem Global showed that prices vary with capacity and range from about N300,000 to N900,000.

When Mrs Jaji has more money, she is hoping to upgrade her solar appliances and go for the options that can power her freezers.

Many like her should too as she has been telling her circle of friends about solar energy.

But with a population frustrated by years of unmet power demands, there is bound to be palpable fear among Nigerians as they may understandably nurse doubts about the unpopular solar alternative.

Mr Oyeniyi said the price of solar power will continue to crash with its popularity and patronage. Being a technology rather than a fuel, it will dominate the energy space, he said.

Shots at solar power

Some of Nigeria's shots at major solar-based power projects have stalled, while others have failed or are yet to be completed.

In 2014, former President Goodluck Jonathan launched the Operation Light Up Rural Nigeria (OLRN) project designed to use renewable energy to power 109 rural communities in 16 states, but the project was abandoned after its pilot phase.

Upon his coming in 2015, President Muhammadu Buhari's government renamed OLRN to Renewable Energy (Solar) Micro Utility (REMU), which was to install three solar mini-grid projects in six geopolitical zones of the country.

The first phase of the project was to provide a solar-powered off-grid plant in three rural communities in Abuja, one of which was flagged off in Durumi, targeted at 1,000 households.

However, an ICIR investigation found that the installation had packed up and was under lock, while the solar-powered street lights were broken.

By 2016, a collaborative project of the Rural Electrification Agency (REA) tagged Energising Education Programme (EEP) was launched to get 37 federal universities off the national grid by introducing clean energy (solar power) in the institutions.

For a start, in its first phase, the programme is targeting nine universities and one teaching hospital.

A fact check by TheCable Newspaper found that of the nine, only two solar power plants have been inaugurated, one of which - Federal University Ndufu-Alike Ikwo, Ebonyi -- is functioning.

Again, last March, the federal government launched the $200 million Nigeria Electrification Project (NEP) to provide off-grid solar energy to over 500,000 people across 105,000 households in rural communities nationwide.-Premium Times.

Africa Renewable Energy Fund II Secures €125 Million First Close With Sefa and Ctf Investments

The Africa Renewable Energy Fund II has achieved its first close at €125 million, following a joint investment of €17.5 million from The Sustainable Energy Fund for Africa and the Climate Technology Fund through the African Development Bank.

AREF II, a successor to the original Fund, is a 10-year closed-ended renewable energy Private Equity Fund with a $300 million target capitalization. The Africa Renewable Energy Fund II, managed by Berkeley Energy, invests in early-stage renewable energy projects, thereby not only de-risking the most uncertain phase of power projects, but also promoting increased green baseload in Africa's generation mix.

The Sustainable Energy Fund for Africa and the Climate Technology Fund will each contribute roughly €8.7 million to mobilize private-sector investment into Africa's renewable energy sector. The Sustainable Energy Fund for Africa will also contribute financing to the AREF II Project Support Facility, which funds technical assistance and early-stage project support to improve bankability.

Other investors include the U.K's CDC Group, Italy's CDP, the Netherlands Development Finance Company (FMO) and SwedFund.

"We are proud to be associated with Berkeley Energy and other like-minded investors, and look forward to AREF's continued success and leadership in promoting sustainable power development on the continent," said Dr. Kevin Kariuki, the African Development Bank's Vice President for Power, Energy, Climate and Green Growth.

In 2012, the African Development Bank selected Berkeley Energy, a seasoned fund manager of clean energy projects in global emerging markets to set up AREF. AREF II has a sharper strategic focus than its predecessor on "green baseload" projects that will deliver firm and dispatchable power to African power systems through hydro, solar, wind and battery storage technologies.

Luka Buljan, Berkeley Energy's Managing Director, said: "We are very excited to have reached this milestone with strong support from our backers. The catalytic tranche from the Sustainable Energy Fund for Africa and the Climate Technology Fund will assist in mobilising private institutional investors up to full fund size of €300 million. We now look forward to concluding the fundraising and delivering projects that will provide clean, reliable and affordable energy across African markets."

"AREF is intertwined with the Sustainable Energy Fund for Africa's history and success, and we have worked closely over the last decade to create precedents in difficult markets and challenging technologies. We look forward to continued collaboration to accelerate the energy transition in Africa," said Joao Duarte Cunha, Manager for Renewable Energy Initiatives at the African Development Bank and Coordinator of the Sustainable Energy Fund for Africa.

About SEFA: SEFA is an African Development Bank-managed special fund providing catalytic finance for renewable energy. SEFA's overarching goal is to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the Bank's New Deal on Energy for Africa and Sustainable Development Goal 7. SEFA was established in 2011 in partnership with the Government of Denmark and has since received contributions from the Governments of United States, United Kingdom, Italy, Norway, Spain, and Sweden, Nordic Development Fund and Germany. SEFA is housed in the Renewable Energy and Energy Efficiency Department (PERN) under the Power, Energy, Climate, and Green Growth (PEVP) complex.

About CTF: The $5.4 billion CTF is one of the two multi-donor trust funds within the wider Climate Investment Funds (CIF). It promotes scaled-up financing for demonstration, deployment and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings. The Bank became an Implementing Entity of the CIF in 2010 and since then has approved over $588 million in CTF resources for a total of 10 projects across Africa.-African Development Bank.

Nigeria: Mobil, NNPC to Pay N82bn Damages to Akwa Ibom Communities Hit By Oil Spill

The Federal High Court, Abuja, has ordered the Mobil Producing Nigeria Unlimited and the Nigerian National Petroleum Corporation (NNPC) to pay the oil communities in Ibeno Local Government Area of Akwa Ibom N81.9 billion in cumulative damages over oil spillage.

Justice Taiwo Taiwo ordered that the payment must be paid within 14 days. Failing that, an 8% interest would accrue on the N81.9 billion every year.

Delivering judgment on Monday in a joint suit instituted against the two defendants by the aggrieved oil producing communities, Justice Taiwo held that the American oil company and NNPC were negligent in the way and manner they handled oil spills that caused environmental degradation in the communities.

Taiwo particularly took a swipe at the NNPC for being interested in the revenue generations from the oil exploration at the expense of the lives of the people in the communities.

He said that he believed the oral and documentary evidence adduced by the plaintiffs to support their claims that lives were made miserable for them when their water and land were polluted through crude oil leakages from old oil pipelines.

He noted the claims of Mobil that it did clean up exercise and held that the oil giant failed to address the compensation that would have mitigated the economic losses of the people said to be mainly fishermen and farmers.

Besides, the judge described as unreliable witnesses called by Mobil adding that for no reason they became evasive during cross-examination by counsel to the plaintiffs.

He held that the oral and documentary evidence produced by Mobil Company were not in any way helpful to the court as they were targeted at serving predetermined interests.

The judge further said that some of the witnesses ought not to have come to the court at all going by the discrepancies in the documents brought to the court, adding that they only embarked on guess research that was not reliable.

He further held that both Mobil and NNPC were negligent by their failure to visit places of the leakages of the crude oil that led to the contermination of Rivers and creeks.

Justice Taiwo rejected the claims of the Mobile joint venture partner, NNPC, that the suit was statute barred in 2012 when it was filed by the aggrieved plaintiffs.

The NNPC had claimed that the suit was not filed within 12 months by the plaintiffs as required by the provision of Section 12, Sub Section 1 of the NNPC Act, 2004.

However, the judge held that the instant suit had to do with fundamental rights that cannot be rendered impotent by the statute of limitations.

He stated further that Section 11, Subsection 5 of the Oil Pipeline Act made it mandatory for oil companies to monitor and repair their pipelines to avoid spillages and environmental degradation.

Justice Taiwo consequently awarded the sum of N42.8 billion as damages for intangible losses, N21.9 billion for special damages as annotated and N10 billion as general damages.

The News Agency of Nigeria (NAN) recalls that Ibeno communities led by Obong Effiong Archianga and 9 others had through their lawyers, Chief Lucius Nwosu, SAN, brought the action against NNPC, Mobil Producing Nigeria Unlimited and ExxonMobil Corporation.

They had sought about N100 billion compensation for economic losses suffered from oil spillages caused by the defendants during exploration.

The 3rd defendant was however deleted from the court action when the court established that there was no cause of action against it.(NAN)-Daily Trust.

Invest Wisely!

Bulls n Bears 

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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

 <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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