Major International Business Headlines Brief::: 26 June 2021

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Major International Business Headlines Brief::: 26 June 2021

 


 

 


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

 


 

 


ü  Green list change prompts holiday pricing chaos

ü  Africrypt brothers deny involvement in Bitcoin 'heist'

ü  Amazon and Google probed over efforts to stop fake reviews

ü  Is Windows 11 the beginning of the end for Skype?

ü  Toshiba: Scandal-hit chairman ousted by investors

ü  Sir Richard Branson gains licence for commercial spaceflights

ü  Microsoft says new breach discovered in probe of suspected SolarWinds
hackers

ü  Wall St Week Ahead As rally in U.S. stocks rolls on, signs of caution
grow

ü  U.S. consumer spending takes breather amid shortages; inflation rises

ü  Tesla 'recalls' vehicles in China for online software update

ü  Bitcoin falls 8.5% to $31,700

ü  Some options data reflect views of impending volatility - Goldman

ü  Amazon's AWS buys message encrypting service Wickr

ü  Speculators decrease short dollar bets in latest week -CFTC, Reuters data

ü  Zambia: 'Increase in Compensation Benefits Spurs Entrepreneurship'

ü  Ethiopia: Berbera Port First Phase Container Terminal Expansion Starts
Operation

ü  Namibia: Agricultural Sector Declines By 2.8 Percent in Q1

 

 

 

 

 

 

 

 


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Green list change prompts holiday pricing chaos

The prices of flights and hotels for new green list travel destinations have
swung sharply in both directions since the guidance was changed on Thursday.

 

The government added 16 destinations to the list. Travellers returning from
these do not have to isolate on return.

 

Destinations include Malta and Spain's Balearic Islands, and some holidays
have doubled in price, the Independent's travel editor Simon Calder said.

 

Airlines have added extra capacity.

 

Initially when these new flights have become available, prices have fallen
as extra supply takes up the demand.

 

But this has proved to be short-lived in many cases: "Availability is
changing by the minute," said Mr Calder, who has been checking prices
regularly since the announcement.

 

"Immediately after it was made there was still quite a lot of keenly priced
flights and holidays, but we're back down to 'last seat' showing."

 

Which holiday destinations are now on the green list?

"Madeira and Malta, for example, were looking pretty reasonable, but then
things really took off. Unless you're sitting in front of a screen there's
no way of gauging which trend line you're on," he added.

 

EasyJet said: "When new flights are put on sale the starting fares may be
lower compared to existing flights with many seats already booked.

 

"Like all airlines, our pricing is dynamic which means that our fares start
low and increase the closer it is to the date of departure and as more seats
on the aircraft are booked."

 

The destinations added to the green list from 04:00 BST on 30 June are:

 

Europe: The Balearic Islands (which include Ibiza, Menorca, Majorca and
Formentera), Malta and Madeira

 

Caribbean: Anguilla, Antigua and Barbuda, Barbados, British Virgin Islands,
Cayman Islands, Dominica, Grenada, Montserrat and Turks and Caicos Islands

 

Other British Overseas Territories: Bermuda, British Antarctic Territory,
British Indian Ocean Territory and Pitcairn

 

Six destinations will also be added to the government's red list on 30 June.
They are the Dominican Republic, Eritrea, Haiti, Mongolia, Tunisia and
Uganda.

 

Operators contacted by the BBC were concentrating mainly on satisfying
demand for the Balearic Islands, Majorca, Menorca and Ibiza, and Malta.

 

BA said it was reviewing its schedule and had added some additional flights
and upgraded some routes to larger aircraft, for example to Malta and the
Balearic Islands.

 

EasyJet said it was also adding seats and holiday packages and new routes,
also focussing on Malta and the Balearics.

 

What are the rules for travelling to green, amber and red list countries?

New routes to Malta from Bristol and Luton will launch next month and offer
some seats at £27.99.

 

Ryanair said it was selling 200,000 extra seats on flights from the UK to
Malta, Ibiza and Palma for July, August and September.

 

Ryanair's Dara Brady called the latest announcement a "small step in the
right direction" but called on the government to add Cyprus, the Canary
Islands and Greek islands to the green list.

 

Jet2holidays said there had been a "huge surge" in bookings.

 

It reported the highest volume of bookings to the Balearic Islands in almost
a year, with bookings for July alone up more than 3,000%.

 

Bookings for Malta and Madeira also jumped by almost 1,500%.

 

Several factors influence the price of airline tickets. These include how
many seats are available, how many people are looking for tickets, the
popularity of the route, and the time of the day the journey takes place.

 

Due to computer algorithms, airlines can alter the price of tickets by the
minute. For example, an algorithm can pick up when lots of customers are
looking to purchase a particular ticket and then trigger an automatic
response.

 

However, it's not all computers that set the price, humans play a role too.
Revenue managers will sometimes manage automatic systems from time-to-time.

 

Peter Morris, chief economist at Ascend consultancy and a veteran with 25
years in aviation, says approaches do differ between airlines and they
typically sell tranches of tickets with prices increasing as long as sales
are going well.

 

Read more about how prices rise for flights.

 

Jet2.com and Jet2holidays have put more than 70 additional flights on sale
to Malta and Madeira with immediate effect and a new route to Malta from
London Stansted is being added.

 

Steve Heapy, chief executive of Jet2.com and Jet2holidays, said the response
from customers had been "truly incredible".

 

"Bookings to Majorca, Menorca, Ibiza, Malta and Madeira have gone through
the roof, which shows just how much UK holidaymakers want to get away."

 

The Independent's Mr Calder said: "It's now a matter of 'can you time it
right' so you go in just when the new flight goes on.

 

"If you do you can still get a bargain. Otherwise you are competing with
people prepared to spend many of hundreds of pounds to get away to what are,
after all, still a very small number of destinations compared with normal
years."

 

The new rules on travel will, of course, change as situations develop.

 

And the countries on the UK's Green List have their own set of rules.

 

What are the rules when I get to my Green List country?

For example, Malta will only allow people in to the country without
quarantine if they present an approved valid vaccine certificate.

 

An email from its High Commission in London said on Friday afternoon: "This
means that only people who have a vaccination certificate recognized by the
Superintendent for Public Health can enter Malta from the United Kingdom
without the need of quarantine."

 

It said anyone who did not meet the entry requirements should make a formal
request to the Public Health Superintendence to authorise entry to Malta at
covid19.vetting at gov.mt. Further conditions may then apply.

 

Transport Secretary Grant Shapps has said the UK government plans to drop
quarantine for fully vaccinated people returning from amber list countries
"later in the summer".

 

However, EasyJet has said the timetable "simply isn't ambitious enough".

 

The transport secretary said issues such as whether children should be given
the vaccine and how people from outside the UK could prove their vaccination
status needed to be resolved before the system could be introduced.

 

He added there was also a "fairness issue" with young people yet to receive
their second jabs.-BBC

 

 

Africrypt brothers deny involvement in Bitcoin 'heist'

A lawyer for two brothers who founded a South African Bitcoin investment
firm has told the BBC they categorically deny any involvement in a "heist".

 

Africrypt, founded by Raees and Ameer Cajee, "absconded" with Bitcoin then
valued at about £2.6bn ($3.6bn), according to a complaint to police.

 

A law firm - Hanekom Attorneys - made the complaint in April on behalf of a
group of investors.

 

But there is uncertainty over exactly how much crypto-currency is missing.

 

On its now inactive website, Africrypt described itself as "an investment
firm exclusively focused on crypto-currency and blockchain technology".

 

The company, founded in 2019, told investors in only a few years it had
grown from a one-man operation running out of a bedroom to "one of Africa's
largest and most successful AI trading companies".

 

Hack claimed

On 13 April, chief operating officer Ameer Cajee wrote to Africrypt clients
announcing the firm had halted operations because of a hack.

 

"Our system, client accounts, client wallets and nodes were all
compromised," he wrote.

 

The letter advised investors not to pursue the "legal route" as that would
"only delay the recovery process".

 

Some of the investors who lost access to their money are represented by law
firm Hanekom Attorneys.

 

The law firm said Bitcoin valued at $3.6bn had been "dissipated in its
entirety", in a complaint sent to an elite South African police unit, known
as the Hawks.

 

The investigation into where the bitcoins went had been hampered by the use
of "various dark web tumblers and mixers", the law firm wrote.

 

That refers to technologies that can make it harder to trace bitcoins.

 

The law firm said its analysis led it to believe that describing this as a
hack was "misplaced".

 

Brothers' response

Lawyer John Oosthuizen, who represents Raees and Ameer Cajee, told the BBC
the brothers "categorically denied" they had been involved in a "heist" or
had absconded with funds.

 

"There is no foundation to the accusation and there's no merit to those
accusations," he said.

 

"They maintain that it was a hack, and they were fleeced of these assets,"
he added.

 

He declined to confirm the $3.6bn value for the Bitcoin lost, and noted
media reports suggesting the value was an overestimate.

 

Bitcoin balloon bursts

Asked by the BBC if the brothers had contacted the police after the alleged
hack, Mr Oosthuizen said: "No."

 

But he added that they were young men aged 18 and 20 with "very little life
experience".

 

He said the brothers had received death threats and their first reaction was
to keep themselves and their families safe.

 

He said his firm was working to prepare a dossier to demonstrate to the
authorities that Africrypt had been hacked and the brothers had been the
victim of theft.

 

He said Raees and Ameer Cajee would co-operate with any future inquiries by
the authorities.

 

But at present they had not been notified of any investigation.

 

Amount held

Questions have been raised about amount of Bitcoin Africrypt is said to have
held.

 

An investor who spoke to the BBC on condition of anonymity argued that while
the losses were considerable they were very much less than the billions that
had been reported.

 

An archive of Africrypt's website from Jan 2021 also suggests it was holding
less than $3.6bn in assets: "We manage over $100m across our venture fund
and AI-driven trading platform," it read.

 

Financial inquiries

The Financial Sector Conduct Authority (FSCA) said, in a press release, that
crypto-assets are not regulated in South Africa "and consequently the FSCA
is not in a position to take any regulatory action".

 

The press release said Africrypt, "was offering exceptionally high and
unrealistic returns".

 

The BBC has asked South African police if an investigation is under way but
they have not yet responded.-BBC

 

 

Amazon and Google probed over efforts to stop fake reviews

Amazon and Google are under investigation over concerns fake five star
reviews on their websites could be misleading shoppers.

 

The Competition and Markets Authority is also worried that "law-abiding
businesses" who sell over Amazon and Google may be losing out to firms using
false recommendations.

 

Amazon and Google could face court action for breaking consumer law.

 

Both firms say they have resources and policies in place to stop fake
reviews.

 

The CMA has launched the formal probe after an initial investigation last
year examined whether online companies were doing enough to protect
consumers.

 

Online shopping has soared during the Covid pandemic as retailers deemed as
"non-essential" have been forced to close physical shops during periods of
lockdown.

 

"Our worry is that millions of online shoppers could be misled by reading
fake reviews and then spending their money based on those recommendations,"
said CMA chief executive Andrea Coscelli.

 

"Equally, it's simply not fair if some businesses can fake five-star reviews
to give their products or services the most prominence, while law-abiding
businesses lose out.

 

"It's important that these tech platforms take responsibility and we stand
ready to take action if we find that they are not doing enough."

 

'Suspicious patterns of behaviour'

In particular, the CMA is concerned about whether Amazon and Google have
been "doing enough" to "detect fake and misleading reviews or suspicious
patterns of behaviour".

 

This includes where the same users "have reviewed the same range of products
or businesses at similar times to each other...or where the review suggests
that the reviewer has received a payment or other incentive to write a
positive review".

 

The CMA is also examining whether Google and Amazon investigate and remove
fake and misleading reviews promptly, as well as looking into what sanctions
the companies place on users.

 

The watchdog said that if it discovered the companies had broken consumer
protection law, it could take enforcement action.

 

This could include securing formal commitments from Amazon and Google to
change the way they deal with fake reviews, but it could escalate "to court
action if needed".

 

But it said: "The CMA has not reached a view on whether Amazon and Google
have broken the law at this stage."

 

The CMA said it was also concerned that Amazon's systems "have been failing
adequately to prevent and deter some sellers from manipulating product
listings, for example, by co-opting positive reviews from other products".

 

A spokesman for Amazon said the company devoted "significant resources to
preventing fake or incentivised reviews from appearing in our store".

 

"We will continue to assist the CMA with its enquiries and we note its
confirmation that no findings have been made against our business."

 

Google said that its policies state "reviews must be based on real
experiences" and where it finds violations "we take action" including
disabling user accounts.

 

It said: "We look forward to continuing our work with the CMA to share more
on how our industry-leading technology and review teams work to help users
find relevant and useful information on Google.''

 

A report published earlier year this by consumer group Which? discovered an
industry that specialises in providing companies with fake reviews in
exchange for money or products.

 

It found that one of these companies had 62,000 reviewers globally and
charged sellers on Amazon Marketplace around £13 for a review. It also did
bulk deals where a seller could spend £620 for 50 reviews or £8,000 for
1,000 reviews.

 

Which? said the CMA's investigation was "a positive step".

 

"The CMA must now move swiftly towards establishing whether these companies
have broken the law, said Which? director of policy and advocacy Rocio
Concha.

 

"This should prompt Amazon and Google to finally take the necessary steps to
protect users from the growing tide of fake reviews on their platforms and,
if they fail to do so, the regulator must be prepared to take strong
enforcement action."-BBC

 

 

Is Windows 11 the beginning of the end for Skype?

Microsoft has officially announced Windows 11, its new operating system
which will replace the current version over the next few years.

 

Among all the new features are two seemingly small but related things that
jumped out.

 

First - Microsoft Teams, the video-calling app which saw a boom during
2020's pandemic, will be integrated into Windows 11 by default.

 

And second - Skype will not be, for the first time in years.

 

That seems to suggest that Teams is the new favourite child, and many
pundits think this is the beginning of the end for what was once the king of
calling apps.

 

"Looks like Microsoft is killing off Skype," wrote the Irish & Sunday
Independent tech editor Adrian Weckler. "Bye bye Skype," added Future
Publishing's content director Jeremy Kaplan. "RIP Skype," was the immediate
reaction from The Verge's Tom Warren.

 

 

Yet the reality is that Skype has been losing relevance for a long time.

 

'The future'

Microsoft bought Skype 10 years ago for $8.5bn (£6.1bn). At the time, it was
the tech giant's biggest-ever acquisition, and there were questions over
whether it was over-paying.

 

But Microsoft was buying into an app that had been downloaded one billion
times and had hundreds of millions of users.

 

"Together we will create the future of real-time communications," Microsoft
chief Steve Balmer projected.

 

It seemed to work - the app came bundled with every new computer, and user
numbers were strong.

 

But by the middle of the decade, internet forums were full of posts asking
"why is Skype so bad?" and complaining about updates. Many pointed to poor
performance and questionable design choices.

 

At the same time, mobile messaging apps - such as WhatsApp or Facebook
Messenger - were exploding in popularity and started to introduce video
calls, one of Skype's main attractions.

 

The first version of Skype was launched in 2003, and despite frequent
updates, it was starting to show its age.

 

Meanwhile, Microsoft was cooking up its business chat app, Teams, based on
more modern tech, which launched in 2017.

 

"Microsoft has been moving beyond Skype for several years now, with Teams
being its strategic voice and video technology for the new era," explained
Angela Ashenden, an analyst at CCS Insight.

 

Teams for all

Under the hood, she said, Teams actually used Skype's technology for a
while. It was designed to compete with business app Slack, as a work tool.

 

But then the pandemic happened.

 

Zoom, previously a little-known business solution, became a household name
overnight. And Microsoft Teams was one of only a handful of competitors
ready to take it on.

 

"As Teams' adoption skyrocketed in the last year, this really sealed Skype's
status as a legacy technology for Microsoft," Ms Ashenden said. That has
only been reinforced by the launch of a personal version, which could
directly compete with Skype.

 

With that kind of sudden success, it was "inevitable" that Teams would be
the Windows default, she added.

 

"The removal of Skype as a pre-installed app helps reinforce Teams as the
preferred solution from Microsoft's perspective, emphasising that this is
where its investment will be moving forward."

 

The writing has been on the wall for a while.

 

Last September, Microsoft-owned LinkedIn announced it was bringing video
meetings to its chat feature using Teams and not Skype, with Zoom and
another popular system, BlueJeans, as other options.

 

In October, senior Microsoft executive Jim Gaynor told CNBC: "If Skype was
going to become bigger, this year was the time for it."

 

"What happened right now was the perfect storm, the perfect set of
circumstances for any online communications product. If you cannot
significantly grow and make your product flourish and thrive now, forget
about it, you're too late now."

 

'The right solution'

Skype did see growth during the pandemic - reportedly a 70% jump to about 40
million people a day.

 

But that is still not as big a growth as its competitors. At a time when the
entire world needed a calling app, people chose other options.

 

"There is definitely an argument that the Teams experience is far too
complicated for the less-technical non-business user," Ms Ashenden said.

 

"But if Skype was the right solution for that, we certainly would have seen
its usage soaring more over the last year, and we didn't."

 

Instead, Teams is likely to evolve to make things simpler for personal users
-particularly on mobile devices, she added.

 

But Skype is not being killed off entirely - it will continue to be offered
as a download in the Microsoft Store for those who want it in Windows 11.

 

It won't be alone.

 

Alongside the announcement of Skype's relegation to the store, Microsoft
also announced that some other much-maligned apps were being downplayed or
removed.

 

Its ill-fated Cortana virtual assistant will no longer be pinned to the
taskbar; Internet Explorer is disabled by default in favour of the more
modern Edge browser; and tools such as OneNote, Paint 3D, and Windows' 3D
viewer app are getting the Skype treatment and becoming optional store
downloads-BBC

 

 

 

Toshiba: Scandal-hit chairman ousted by investors

The chairman of scandal-hit Japanese conglomerate Toshiba has been voted out
after a shareholder revolt.

 

Osamu Nagayama's ousting comes after the company was found to have colluded
with the government to suppress the interests of foreign investors.

 

Some investors see the result as marking a new milestone for corporate
governance in Japan.

 

Supporters of Mr Nagayama say it will set the firm further back, depriving
it of leadership at a time of crisis.

 

One of Toshiba's largest shareholders, 3D Investment Partners, which had
previously called for Mr Nagayama's resignation, welcomed the result.

 

"We hope that today's AGM (annual general meeting) marks the beginning of a
new era at Toshiba - one that will be marked by a focus on value creation,
transparency to all stakeholders and a renewed commitment to building trust
with shareholders," it said in a statement.

 

Today's vote came after activist Toshiba shareholders won a battle earlier
this year to secure an investigation into allegations that overseas
investors were pressured to vote in line with management board's nominees.

 

Mr Nagayama only joined Toshiba's board in the middle of last year after the
pressuring of foreign shareholders allegedly took place.

 

He is a well-respected executive, who had led the Japanese pharmaceutical
firm Chugai and been on the board of Sony. Both the electronics giant and
former US ambassador to Japan John Roos had expressed their support for him.

 

But critics argued he should step down to take responsibility for the
board's resistance to the call for an independent probe.

 

"[Mr Nagayama] bears the greatest responsibility in nominating candidates
and has ultimate responsibility for the conduct of the board," Toshiba
investor Effissimo said in an earlier report.

 

Toshiba nominated 11 directors at the annual general meeting, including Mr
Nagayama. A member of the company's audit committee, Nobuyuki Kobayashi, was
also voted out.

 

A breakdown of the vote was not immediately disclosed. The newly-elected
board will meet later on Friday to discuss a potential new chairman.

 

In April, Toshiba's chief executive Nobuaki Kurumatani's resigned amid
controversy over a $20bn (£14.4bn) buyout bid from private equity firm, CVC
Capital Partners.

 

A statement from the Japanese conglomerate gave no reason for his
resignation but he had faced criticism from activist shareholders over the
bid from CVC, his former employer.

 

Toshiba is one of Japan's oldest and largest firms, with divisions that
range from home electronics to nuclear power stations.-BBC

 

 

Sir Richard Branson gains licence for commercial spaceflights

Sir Richard Branson has received the licence he needs to fly paying
customers to the edge of space in his Virgin Galactic rocket plane.

 

The approval was granted on Friday by the US Federal Aviation
Administration.

 

It updates an existing licence that had permitted Sir Richard's company to
conduct test flights only.

 

The UK entrepreneur has some 600 people waiting to take a ride to a height
of 90km, to experience weightlessness and to see the curvature of the Earth.

 

These are individuals who have all paid deposits. The would-be "astronauts"
are largely made up of the super-wealthy, and include a smattering of movie
and music stars.

 

Virgin Galactic will send them up from a dedicated spaceport in America's
New Mexico desert.

 

The FAA's licence upgrade follows a successful test outing for the plane,
known as Unity, conducted on 22 May.

 

Data collected on that flight satisfied the federal agency that all
outstanding technical development milestones had been met.

 

Michael Colglazier, the CEO of Virgin Galactic, said: "We're incredibly
pleased with the results of our most recent test flight, which achieved our
stated flight test objectives.

 

"The flight performed flawlessly, and the results demonstrate the safety and
elegance of our flight system. Today’s approval by the FAA of our full
commercial launch licence, in conjunction with the success of our 22 May
test flight, give us confidence as we proceed toward our first fully crewed
test flight this summer."

 

Virgin Galactic has previously set out a schedule for this year, as it
continues to mould the kind of service it plans to offer its commercial
customers.

 

This would see four of the company's employees climb aboard Unity (along
with the two pilots) for the next flight, to get a sense of the experience
that future ticketed passengers will enjoy.

 

The flight after that is likely to see Sir Richard himself go to the edge of
space, as a statement of readiness for commercial service.

 

And it's then on the subsequent outing that the company is expected to start
earning revenue from carrying people - although this is a mission that has
been block booked by the Italian Air Force, which is going to put several
payload specialists aboard Unity to supervise a number of microgravity
experiments.

 

It had been speculated that Sir Richard might try to make his flight to 4
July, earning him his astronaut credentials before Jeff Bezos. The
Amazon.com founder has a rocket system of his own in which he plans to ride
to the edge of space on 20 July.

 

A spokesperson for Virgin Galactic told the BBC on Friday that the 4 July
speculation was just that - speculation. The timings of flights this summer
have not been determined.

 

It's been a tough road for Sir Richard to realise his spaceflight ambitions.

 

He first announced the concept of passenger access to space in a rocket
plane in 2004, with a target for services to begin in 2007. But developing
the chosen technology has proved far harder than the businessman envisaged.

 

He is now, though, on the cusp of delivering. Friday's licence approval is a
green light.-BBC

 

 

 

Microsoft says new breach discovered in probe of suspected SolarWinds
hackers

(Reuters) - Microsoft (MSFT.O) said on Friday an attacker had won access to
one of its customer-service agents and then used information from that to
launch hacking attempts against customers.

 

The company said it had found the compromise during its response to hacks by
a team it identifies as responsible for earlier major breaches at SolarWinds
(SWI.N) and Microsoft.

 

Microsoft said it had warned the affected customers. A copy of one warning
seen by Reuters said that the attacker belonged to the group Microsoft calls
Nobelium and that it had access during the second half of May.

 

"A sophisticated Nation-State associated actor that Microsoft identifies as
NOBELLIUM accessed Microsoft customer support tools to review information
regarding your Microsoft Services subscriptions," the warning reads in part.
The U.S. government has publicly attributed the earlier attacks to the
Russian government, which denies involvement.

 

When Reuters asked about that warning, Microsoft announced the breach
publicly.

 

After commenting on a broader phishing campaign that it said had compromised
a small number of entities, Microsoft said it had also found the breach of
its own agent, who it said had limited powers.

 

The agent could see billing contact information and what services the
customers pay for, among other things.

 

"The actor used this information in some cases to launch highly-targeted
attacks as part of their broader campaign," Microsoft said.

 

Microsoft warned affected customers to be careful about communications to
their billing contacts and consider changing those usernames and email
addresses, as well as barring old usernames from logging in.

 

Microsoft said it was aware of three entities that had been compromised in
the phishing campaign.

 

It did not immediately clarify whether any had been among those whose data
was viewed through the support agent, or if the agent had been tricked by
the broader campaign.

 

Microsoft did not say whether the agent was at a contractor or a direct
employee.

 

A spokesman said the latest breach by the threat actor was not part of
Nobelium's previous successful attack on Microsoft, in which it obtained
some source code.

 

In the SolarWinds attack, the group altered code at that company to access
SolarWinds customers, including nine U.S. federal agencies.

 

At the SolarWinds customers and others, the attackers also took advantage of
weaknesses in the way Microsoft programs were configured, according to the
Department of Homeland Security.

 

Microsoft later said that the group had compromised its own employee
accounts and taken software instructions governing how Microsoft verifies
user identities.

 

DHS' Cybersecurity and Infrastructure Security Agency did not respond to a
request for comment.

 

The Thomson Reuters Trust Principles.

 

 

Wall St Week Ahead As rally in U.S. stocks rolls on, signs of caution grow

Reuters) - The S&P 500 shook off concerns about a more hawkish Federal
Reserve to post a record high this week, but activity in some areas of the
market indicates concern over potential volatility ahead of key economic
data and corporate profit reports.

 

U.S. President Joe Biden’s embrace of a $1.2 trillion infrastructure
spending deal has helped buoy indexes to fresh records, after worries that
the Fed may unwind its easy money policies sooner than expected led to a
brief swoon earlier this month. The benchmark S&P 500 is up about 14% this
year after hitting a fresh record in the past week, as did the tech-heavy
Nasdaq (.IXIC).

 

Underneath the hood, however, there are signs of caution. Short interest in
the SPDR S&P 500 ETF Trust (SPY.P) increased to its highest level this year
since last week's Fed meeting, suggesting investors have been adding more
downside protection, JP Morgan analysts said in a recent note.

 

At the same time, gains this month have been more concentrated, as investors
piled back into the big technology stocks that led markets higher last year
and for most of the past decade.

 

The benchmark S&P index, heavily weighted toward technology stocks, is up
1.8% this month, but the average S&P stock has lagged. The equal-weighted
S&P 500 (.SPXEW) is up just 0.3% in June, which some investors view as a
sign of waning confidence in the broader market.

 

“The market has maybe dodged a few scares and as we look ahead to the second
half... there are probably some more risks ahead than there were a few
months ago,” said James Ragan, director of wealth management research at
D.A. Davidson.

 

Investor concerns include the debate about whether rising inflation will be
sustained enough to force the Fed to begin a sooner-than-expected rollback
of its easy-money policies. The Fed's main inflation measure posted its
biggest annual increase since 1992, data showed Friday. read more

 

As business rebounds from the coronavirus pandemic, the second quarter is
also expected to mark the peak for U.S. economic and corporate profit
growth, which could bring market unease as growth slows.

 

Citigroup’s U.S. Economic Surprise Index (.CESIUSD), which measures the
degree to which data is beating or missing forecasts, stands at 26.5, well
off last year’s peak of 270.8, suggesting that the strength of the economic
recovery is increasingly baked into estimates.

 

Some investors also believe the S&P may be overdue for a significant
pullback. Since World War II, the index has had a decline of at least 5% an
average of every 178 calendar days, according to Sam Stovall, chief
investment strategist at CFRA. The latest market advance has lasted 276 days
without such a fall, the longest period since January 2018, when a 715-day
advance was followed by a 10.8% drop for the S&P 500.

 

"There is not a lot of support beneath the surface so that leaves the market
maybe a little more vulnerable to a news headline or a news scare,” said
Willie Delwiche, an investment strategist with market research firm All Star
Charts.

 

Next week’s focus will be on economic data, including reports on home
prices, manufacturing and Friday’s closely-watched U.S. payrolls report for
June. With inflation and the pace of the recovery on the minds of investors,
a stronger-than-expected wage report could stoke worries over how the Fed
will react. New York Fed president John Williams will speak on Monday, after
several appearances in the past week.

 

To be sure, there are plenty of factors that suggest the backdrop for
equities remains positive. S&P 500 earnings are expected to rise by about
37% this year and almost 12% next year, according to Refinitiv IBES. In the
second quarter, for which reports will flood in starting in mid-July,
earnings are expected to jump 65%.

 

Yields remain historically low, with the benchmark 10-year Treasury yield
down to about 1.52% from 1.7% in mid-May, helping boost the allure of
equities in comparison to other investments.

 

Still, only 47% of S&P 500 stocks stood above their 50-day moving averages
as of Thursday's close, compared to 91% of stocks above that level when the
index was making record highs in mid-April, according to Keith Lerner, chief
market strategist at Truist Advisory Services. The average stock in the
benchmark was 8.9% off its 52-week high.

 

“If you are not in the few stocks that are doing well, you may be doing much
worse than the benchmark index,” Lerner said.

 

The Thomson Reuters Trust Principles.

 

 

 

U.S. consumer spending takes breather amid shortages; inflation rises

(Reuters) - U.S. consumer spending paused in May as shortages hurt motor
vehicle purchases, but the supply constraints and increased demand for
services helped to lift prices, with the Federal Reserve's main inflation
measure rising by the most in 29 years.

 

There was, however, some good news on inflation. Consumers this month
perceived higher inflation to be temporary, a survey showed on Friday,
aligning with the views of Fed Chair Jerome Powell and Treasury Secretary
Janet Yellen. Consumers' inflation expectations are key as they can
influence households' behavior.

 

With at least 150 million Americans fully vaccinated against COVID-19, which
is allowing the economy to reopen and people to travel, dine out and engage
in other activities that were restricted during the pandemic, consumer
spending is expected to pick up in the coming months. Trillions of dollars
in excess savings and rising household wealth due to gains in stock prices
and home values are expected to provide a powerful tailwind.

 

"Spending growth will shift to services from goods, and drive a strong
economic recovery throughout the rest of 2021 and all of 2022," said Gus
Faucher, chief economist at PNC Financial in Pittsburgh. "The biggest drags
are higher prices for some goods and services and shortages due to
production bottlenecks."

 

The unchanged reading in consumer spending, which accounts for more than
two-thirds of U.S. economic activity, followed an upwardly revised 0.9% jump
in April, the Commerce Department said. Consumer spending was previously
reported to have increased 0.5% in April. Economists polled by Reuters had
forecast consumer spending would rise 0.4% in May.

 

Motor vehicles and some household appliances are scarce because of supply
bottlenecks stemming from the pandemic. A global shortage of semiconductors
is hampering motor vehicle production. Spending is also starting to shift
back to the services part of the economy, which accounts for two-thirds of
consumer spending, though the pace last month was insufficient to offset the
drag from goods.

 

Spending on services rose 0.7%, led by recreation, restaurants and hotels as
well as housing and utilities. Spending on goods fell 1.3%, with outlays of
long-lasting goods like motor vehicles tumbling 2.8%. Goods spending surged
as the pandemic confined people to their homes.

 

The personal consumption expenditures (PCE) price index, excluding the
volatile food and energy components, increased 0.5% after advancing 0.7% in
April. In the 12 months through May, the so-called core PCE price index shot
up 3.4%, the largest gain since April 1992. The core PCE price index rose
3.1% on a year-on-year basis in April.

 

The core PCE price index is the Fed's preferred inflation measure for its
flexible 2% target. Year-on-year inflation is accelerating in part as last
spring's weak readings drop from the calculation.

 

Stocks on Wall Street were trading largely higher, with the S&P 500 index
(.SPX) hitting a record high as investors focused on the moderation in the
monthly inflation reading. The dollar slipped against a basket of
currencies. U.S. Treasury prices were mostly lower.

 

NO RUNAWAY INFLATION

 

Though the so-called base effects likely peaked in May, inflation will
probably remain high in the near term because of the supply constraints and
worker shortages, which are boosting wage growth.

 

"While we foresee increased inflation stickiness, with core PCE inflation
hovering around 3.0% in the second half (of the year), we don't foresee
runaway inflation," said Lydia Boussour, lead U.S. economist at Oxford
Economics in New York.

 

Consumers seem to agree. The University of Michigan consumer survey's
one-year inflation expectation dropped to 4.2% in June from a decade-high
4.6% in May. The survey noted that "consumers also believed that the price
surges will mostly be temporary."

 

The five-to-10-year inflation expectation fell to 2.8% this month from 3.0%
in May. Fed officials put more emphasis on the five-to-10-year series. read
more

 

Powell acknowledged this week that "inflation has increased notably in
recent months," but told lawmakers that the U.S. central bank "will not
raise interest rates preemptively because we fear the possible onset of
inflation."

 

When adjusted for inflation, consumer spending fell 0.4% last month after
rising 0.3% in April. Despite May's drop in the so-called real consumer
spending, consumption is running higher than its pace in the first quarter.

 

Gross domestic product growth estimates for this quarter are around a 9%
annualized rate, which would be an acceleration from the 6.4% pace logged in
the first quarter. Economists believe the economy could achieve growth of at
least 7% this year. That would be the fastest growth since 1984. The economy
contracted 3.5% in 2020, its worst performance in 74 years.

 

In addition to the supply squeeze, the ebbing boost from government stimulus
checks likely restrained consumer spending last month. Transfer payments
from the government dropped 11.7%. That resulted in personal income falling
2.0% after declining 13.1% in April.

 

But there is ample fuel to drive spending. Wages gained 0.8% after rising
1.0% in April. The saving rate fell to a still-lofty 12.4% from 14.5% in
April. Households accumulated at least $2.5 trillion in excess savings
during the pandemic.

 

>From July through December some households will receive income under the
expanded Child Tax Credit program, which will soften the blow of an early
termination of government-funded unemployment benefits in 26 states.

 

The Thomson Reuters Trust Principles.

 

 

Tesla 'recalls' vehicles in China for online software update

(Reuters) - Chinese regulators said on Saturday Tesla Inc (TSLA.O) would
'recall' nearly 300,000 China-made and imported Model 3 and Model Y cars for
an online software update related to assisted driving, with owners not
required to return their vehicles.

 

The State Administration for Market Regulation said on its website that the
move is linked to an assisted driving function in the electric cars, which
can currently be activated by drivers accidentally, causing sudden
acceleration.

 

The remote online software 'recall' - a first for Tesla cars built in China
- covers 249,855 China-made Model 3 and Model Y cars, and 35,665 imported
Model 3 sedans.

 

Tesla, now making Model 3 sedans and Model Y sport-utility vehicles in
Shanghai, sold 33,463 China-made electric cars in May, according to industry
data. read more

 

The Thomson Reuters Trust Principles.

 

 

Bitcoin falls 8.5% to $31,700

(Reuters) - Bitcoin dipped 8.51% to $31,699.83 at 22:04 GMT on Friday,
losing $2,937.27 from its previous close.

 

Bitcoin, the world's biggest and best-known cryptocurrency, is up 14.3% from
the year's low of $27,734 on Jan. 4.

 

Ether , the coin linked to the ethereum blockchain network, dropped 7.37 %
to $1,843.07 on Friday, losing $146.56 from its previous close.

 

The Thomson Reuters Trust Principles.

 

 

Some options data reflect views of impending volatility - Goldman

(Reuters) - While major U.S. stock indexes reach new highs, options data
suggests traders see the market as vulnerable to a big drop should bears
gain the upper hand, according to strategists at Goldman Sachs.

 

Apparent calm in the stock market masks heightened expectations for big
stock market gyrations over the next three months, Goldman strategists said
in a note on Friday.

 

One indication of how anxious investors are is the fact that the 3-month
downside implied volatility skew, which compares put option prices with
at-the-money option prices, has reached new all-time highs, the note said.

 

"High skew reflects investors’ perception that high volatility would return
should markets sell off," the strategists said.

 

The elevated level of skew reflects views that stocks would become
increasingly correlated in such a scenario, the strategists said.

 

The strategists expect markets' sensitivity to economic data to increase
with time, and recommended longer-dated hedges rather than ones with a
shorter tenor.

 

The S&P 500 Index (.SPX) ended the week at record high on Friday, lifted by
Nike and several banks, while weaker-than-expected inflation data eased
worries about a sudden tapering in stimulus by the Federal Reserve.

 

The Cboe Volatility Index (.VIX) - often called Wall Street's fear gauge -
finished down 2.2 points at 15.62, not far from the more than 16-month low
of 14.19 touched on Thursday.

 

The Thomson Reuters Trust Principles.

 

 

Amazon's AWS buys message encrypting service Wickr

(Reuters) - Amazon.com Inc's (AMZN.O) cloud computing unit has bought
encrypted messaging platform Wickr to enable secure communication as
employees largely work from home, the company said on Friday.

 

Wickr, a startup founded by privacy advocates, offers to help develop
self-destructing messaging technology for financial services firms and
gaming companies.

 

The value of the deal was not disclosed.

 

Companies moving to hybrid work environments due to the COVID-19 pandemic
are increasingly focusing on protecting their communication with business
partners across remote locations.

 

"The need for this type of secure communications is accelerating," said
Stephen Schmidt, chief information security officer at Amazon Web Services.

 

Amazon has also been striving to bag cloud contracts from government
agencies and has been in a prolonged battle with Microsoft Corp (MSFT.O)
after it lost a multi-billion-dollar Pentagon deal.

 

Schmidt said Wickr would give security-conscious enterprises and government
agencies the ability to implement security controls, helping them meet their
compliance requirements.

 

AWS is offering Wickr services effective immediately and Wickr customers,
channel, and business partners can continue to use its services, he said.

 

The Thomson Reuters Trust Principles.

 

 

Speculators decrease short dollar bets in latest week -CFTC, Reuters data

(Reuters) - Speculators decreased their net short dollar positions in the
latest week, according to calculations by Reuters and U.S. Commodity Futures
Trading Commission data released on Friday.

 

The value of the net short dollar position fell to $12.80 billion in the
week ended June 22, compared with a net short of $18.99 billion the previous
week.

 

In a wider measure of dollar positioning that includes net contracts on the
New Zealand dollar, Mexican peso, Brazilian real and Russian rouble, the
U.S. dollar posted a net short position of $13.04 billion, compared with a
net short of $19.06 billion a week earlier.

 

Japanese Yen (Contracts of 12,500,000 yen)

 

Net dollar long by $6.085 billion



The Thomson Reuters Trust Principles.



Zambia: 'Increase in Compensation Benefits Spurs Entrepreneurship'

The increase in the minimum threshold of compensation benefits for all
pensioners to K1, 200 from K800 as contained in the revised compensation Act
of 2016 is encouraging entrepreneurship.

 

A Mpika pensioner Clement Mboni says the revised compensation benefits have
enabled the beneficiaries to venture into various income generating
activities.

 

Times of Zambia.

 

 

Ethiopia: Berbera Port First Phase Container Terminal Expansion Starts
Operation

ADDIS ABABA - The first phase expansion of Berbera port container terminal
has officially inaugurated and started operation to accommodate huge ships,
Ethiopian Transport Minister announced from Berbera.

 

A high-level government delegation led by Ahmed Shide, Minister of Finance
has visited the first phase of expansion and modernization of Berbera port,
Ethiopia's Transport Minister disclosed adding Minister Dagmawit was member
of the delegation.

 

Minister Dagmawit announced that the first phase expansion of the Berbera
container terminal has started its operation and ready to accommodate heavy
ships with modern infrastructure after it officially inaugurated from
yesterday.

 

Dagmawit stated that Ethiopia has launched a 10 year economic plan and the
operation of Berbera Port would help support in facilitating Ethiopia's
import-export freight.

 

Finance Minister Ahmed Shide on his part noted that completion and starting
operation of the first phase expansion of Berbera Port will boost regional
economic integration and will play crucial role for Ethiopia's ever-growing
import-export transaction.

 

Somali Land President Musa Bihi on his part said that Somali Land will
provide standard port service to Ethiopia and will work cooperatively for
the safe transportation and delivery of freights from the port to Ethiopia,
Somali Mass Media Agency reported.

 

It was leant that the first expansion phase of Berbera Port is believed to
accommodate over one million containers annually with modern
infrastructures, in ship-to-land and mobile cranes. Expansion of Berbera
Port is being underway by the joint agreement of Ethiopia, Somali Land and
DP World with 19, 30 and 51 percent shares respectively.

 

Ethiopian Herald.

 

 

Namibia: Agricultural Sector Declines By 2.8 Percent in Q1

The agriculture sector recorded a decline of 2.8% in the first quarter of
2021 according to the country's statistic agency on Thursday.

 

The decline was mainly due to the livestock sub-sector that contracted by
7.5% in real value-added, the first publication of the quarterly agriculture
statistical bulletin for the year 2021 stated.

 

Namibia exports of agriculture, forestry, and fishery products for the first
quarter of 2021 amounted to N$531.2 million (2.6% of total exports) while
the import bill stood at N$762.7 million (2.8% of total imports),
Statistician-General Alex Shimuafeni said in the bulletin.

 

"The agriculture commodities contributed the highest export share of 2.2%
and imports share of 2.6% when compared to forestry and fishery products. In
terms of exports, the highest growth rate of 11.9% was recorded in the
fishery products while a notable decline of 68.7% was witnessed in the
forestry commodities," he added.

 

Meanwhile, Shimuafeni said, in terms of imports, the highest growth of 617.9
% was registered in fishing products while forestry products recorded a
negative growth rate of 41.5% in value.

 

Namibia Economist.

 

 


 


 


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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