Major International Business Headlines Brief::: 05 May 2021

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Major International Business Headlines Brief::: 05 May 2021

 


 

 


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ü  East Africa: Kenyan, Tanzanian Presidents Sign Pipeline Deal

ü  Africa Scrambles As India Vaccine Export Ban Bites

ü  South Africa: Johannesburg Is Threatening to Sideline Informal Waste Pickers. Why It's a Bad Idea

ü  Africa: How Responsible Business Boosts the Agriculture Sector

ü  Three Ghanaian Startups Named Top Performers and Secure Support from the Mastercard Foundation and MEST Express Accelerator Program

ü  Mozambique: AMPME to Benefit From Business Oriented Capacity Building

ü  Mozambique: Private Transport Operators Go On Strike

ü  Pfizer expects Covid vaccine demand for years

ü  Ikea starts buy-back scheme with promise to tackle waste

ü  Facebook Oversight Board to rule on Trump account ban

ü  HelloFresh sees meal kit demand surge as shift to online continues

ü  Pandora says laboratory-made diamonds are forever

ü  Judge presses Epic CEO during second day of Apple antitrust trial

ü  Boeing faces new hurdle in 737 MAX electrical grounding issue -sources

ü  Deutsche Post DHL hikes outlook again on ecommerce boom

ü  Australian regulator accuses Westpac of insider trading in $12 bln grid sale

ü  Yellen sees no inflation problem after rate hike comments roil Wall Street

ü  ARK Innovation's performance under pressure as tech stocks swoon

ü  Lyft sees sustained profit starting in third quarter on cost cuts, demand rebound

 

 

 

 

 

 

 

 


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East Africa: Kenyan, Tanzanian Presidents Sign Pipeline Deal

Nairobi — Kenya and Tanzania have signed a deal for a gas pipeline that will run between the coastal cities of Mombasa and Dar es Salaam. The signing took place Tuesday, as Tanzanian President Samia Suluhu Hassan made her first visit to Kenya following the death of her predecessor, John Magufuli.

 

Speaking to reporters in Nairobi after a closed-door meeting that lasted more than three hours, Kenyan President Uhuru Kenyatta said the two countries are ready to improve their relations.

 

Relations between the two East African nations grew strained during the five years Magufuli was president of Tanzania. Magufuli died of heart disease in March and was replaced by Hassan, his vice president.

 

Kenyatta said Tuesday he and Hassan signed a gas pipeline deal that will improve the lives of his people and businesses. The pipeline will help reduce the cost of electric power, Kenyatta said, and will help transition Kenya to environment-friendly energy.

Hassan said she and Kenyatta also agreed to reduce barriers to bilateral trade, in order to grow businesses and investment between the two countries.

 

Kigen Morumbasi, who teaches international relations and security at Strathmore University in Kenya, said good relations between the two countries have the potential to spur economic growth.

 

"When we look at the two countries, we are looking at prospects in terms of bilateral trade. So, we are supposed to see bilateral trade going up and free movement of people, which of course have an issue, especially in the region. And if we look at the trade between Tanzania and Kenya, we know both of them are port countries. The closer ties between the two countries will elevate the economic development for both countries, as well, and remove the competition that has been dogging the two countries in the past," Morumbasi said.

 

The two countries also agreed that health officials should work together on COVID-19 issues.

 

That was not the case under Tanzania's late president. Under Magufuli, Tanzanian officials denied COVID-19 was present in the country and cast doubt on the effectiveness of vaccines.

 

Hassan said Tuesday she and Kenyatta want to see health officials cooperating to ease the movement of people and goods.-VOA.

 

 

 

Africa Scrambles As India Vaccine Export Ban Bites

As India's export ban results in COVAX supplies to drying up, African countries have been scrambling in a desparate attempt to find alternatives. The second shot is proving difficult.

 

Most African countries rely on COVAX, the World Health Organization (WHO) program built to ensure poor countries have equitable access to vaccines to combat the pandemic, for its vaccine supply.

 

The main supplier, the Serum Institute of India (SII) producers the two-shot AstraZeneca vaccine. But increased domestic demand for doses in India, where the pandemic is currently surging out of control, has interrupted supplies being flown out for COVAX.

 

Ahmed Ogwell, deputy director of the Africa Centres for Disease Control and Prevention (CDC) called the AstraZeneca vaccine manufactured by the Serum Institute in India the "backbone."

 

"The early part of the vaccine campaigns on the continent were really anchored on the delivery of doses from the Serum Institute in India," he told DW.

COVAX has also been elbowed out of the market by rich countries striking their own deals with manufacturers and surging ahead in immunizing their citizens.

 

"Any country, over 20 countries, on the continent that has received the AstraZeneca vaccine is affected because they have no other way of getting the second doses," Ogwell adds.

 

The facility urgently needs 20 million doses by the end of June to cover the supply shortage and has pleaded with wealthy countries to donate excess doses. The institute paused exports in March.

 

"The urgent demand for vaccines in India is bad for the rest of the world," said Ravi Gupta, a professor of clinical microbiology at Cambridge University.

 

COVAX said on Monday it has struck a deal to buy 500 million doses of Moderna's COVID-19 jabs.

Second shots affected Kenya

 

Ugandan epidemiologist Catherine Kyobutungi, executive director at the African Population and Health Research Center (APHRC), says the crunch comes with administering the second of the two-shot vaccines.

 

"Health officials have had to very quickly keep on adjusting their vaccination plans. It's not clear when the second batch of vaccine is going to come," she told DW.

 

The delay has also stalled programs aimed at preparing wider populations to get vaccinated.

 

"Until April, COVAX expected about 114 million doses and so far, they've only received 24 million doses. By now they should have delivered 90 million more doses. It's very, very, very frustrating right now," Kyobutungi said.

 

Ogwell pointed out that while vaccines may be available from other sources, access to them is still difficult.

 

 

"I would not call it a disaster because there are other vaccines on the market. We look at it more as a delay because vaccines are only one part of controlling this pandemic."

 

Partial vaccinations not enough

 

Ghanaian infectious disease specialist Dr Bertha Ayi says affected countries risk "partial vaccinations". While a first shot may provide up to 50% immunity, it is not effective in helping government vaccination programs aiming for herd immunity.

 

"Achieving partial immunity is only a drop in the bucket," she told DW.

 

Faced with the uncertainty, doctors can stretch out the intervals between administering the vaccine from "3 weeks to 12 weeks," Ayi said. She added countries could also consider acquiring single shot vaccines, such as the Johnson & Johnson inoculation.

 

Asked whether countries would consider mixing vaccines, Dr. Ayi said research is still being conducted on the efficacy of mixing vaccine doses.

 

Health experts generally agree that the mixing and matching of the vaccines granted emergency use should be safe, but no governments have officially recommended the practice.

 

Africa CDC's Ahmed Ogwell says discussion between the organization and the Indian government are ongoing to "at least get some of" the vaccines that were promised. The African Union has also approached other vaccine manufacturers like Johnson & Johnson, which announced last month it would make up to 400 million doses of single-shot vaccine available to Africa. However, the first shipments are not expected to arrive until the third quarter of 2021.

 

Political fallout for India?

 

Kenyan political analyst Herman Manyora says that while there is exasperation in some quarters at a delay of the vaccine rollout, few in Kenya have directed anger at India, least of all from government.

 

"It's not surprising when you see the kind of images coming out of India," he told DW.

 

"You'd have to be very inhuman, very unreasonable to say anything against India, even if they stop supplying you."

 

Manyora says Kenya's difficulty in rolling out vaccines so far means the wider population has not yet been affected.

 

"Many need to be pushed to take the vaccine, even those in the risk groups, health workers teachers, security forces."

 

Meanwhile, India's "vaccine maitri" (Hindi for vaccine friendship) initiative was announced by Prime Minister Narendra Modi days after India began its nationwide vaccination campaign in January. Initially India was lauded for sharing its vaccines with poorer countries, though some criticized the move as showmanship by Modi at the expense of Indian citizens.

 

A scientist in India familiar with vaccine development, speaking on condition of anonymity, said the feeling in India is not overwhelmingly negative towards the government for exporting vaccines first before rolling out immunization programs domestically.

 

"Yes, millions of vaccines went out of the country, but with that amount we would have hardly managed to vaccinate many more Indians, proportionately speaking," he told DW.

 

He did expect to see a resumption of exports in the short term, but only in "few months."

 

At least 1.165 billion COVID-19 vaccine doses have so far been injected worldwide, according to an AFP count. Just 0.2% have been administered in the 29 lowest-income countries, home to 9% of the global population.

 

 

South Africa: Johannesburg Is Threatening to Sideline Informal Waste Pickers. Why It's a Bad Idea

Like all cities in the world, Johannesburg, South Africa's commercial capital, has a waste management problem. In 2018/19, more than 290 000 tonnes of waste was illegally dumped in neighbourhoods across the city. Illegal dumping will likely increase, as the four legal landfills will be full in less than three years.

 

Various efforts have been made over the years to try and manage the problems better.

 

A contentious, and politically sensitive issue in all of these efforts has been the role of waste reclaimers, the informal actors who earn a living by salvaging and selling recyclables.

 

Like their counterparts across the country, reclaimers in Johannesburg play a crucial role in waste management and recycling. According to the Council for Scientific and Industrial Research, reclaimers collect 80%-90% of all used packaging and paper that is recycled. They also save municipalities up to R748 million a year in landfill space. Without them, South Africa's recycling economy would not exist, and Johannesburg's landfills would have closed long ago.

Pikitup, the private company created by the City to provide municipal waste management services, only started promoting recycling just over a decade ago. Instead of partnering with the real recycling experts, reclaimers, Pikitup designs charity-style projects for them and gives the official recycling work to unemployed people with no experience in the sector and private companies.

 

In mid-2018, Pikitup started a separation at source pilot project that pays two private companies to collect recyclables separated from trash by residents in some suburbs.

 

Now the city wants "affluent" households to pay a new R50 monthly recycling levy to extend the pilot.

 

But evidence from my three-year research project shows that Pikitup's pilot has failed to collect significant amounts of recyclables. It has also been far from cost-effective. And it has profoundly negative consequences for reclaimers.

Unintended consequences

 

There are approximately 8000 reclaimers in Johannesburg. Some have been collecting recyclables for more than 30 years and there are families with several generations of reclaimers.

 

Working with 13 post-graduate students, my research project interviewed and surveyed reclaimers, residents and officials to see how they were affected by Pikitup's recycling programmes between 2016 and 2019.

 

We found that Pikitup's pilot had a number of negative consequences.

 

As the contracted companies started collecting the same materials that reclaimers depended on, reclaimers struggled to access recyclables, which decreased their incomes. It also led to increased harassment as reclaimers were accused by residents and security of "stealing" Pikitup's bags.

The pilot also made life harder for reclaimers in other ways. They had to start sleeping in suburban parks to get to the materials before the private recycling trucks arrived, as otherwise there would be nothing to collect and their children would go hungry.

 

Poor track record

 

Pikitup's approach to recycling has a poor track record.

 

In 2018/2019, the most recent year for which Pikitup has released complete data, Pikitup planned to collect 50 000 tonnesof recyclables. It then lowered the goal to 32 550 tonnes, but still missed this new target by about 6500 tonnes.

 

In the first 12 months of Pikitup's separation at source pilot - which the levy is set to expand - an internal Pikitup presentation reported that Pikitup diverted only 27 277 tonnes of recyclables.

 

This is only a fraction of what reclaimers divert in a year. Data from a "resident-reclaimer" recycling pilot project led by the African Reclaimers Organisation in two Johannesburg suburbs shows that participating reclaimers collect an average of 128.18 kgs per day. If the City's approximately 8000 reclaimers salvage similar amounts, they need a mere 27 days to divert as many tonnes of recyclables as Pikitup did in the first year of the City's pilot.

 

While the companies in Pikitup's pilot only collect bags of separated materials, reclaimers in the African Reclaimers Organisation pilot do the same, but also continue to salvage recyclables from rubbish bins. They do this because many residents still throw away recyclables. As a result, reclaimers provide a more effective service, because they ensure that recyclables that residents put in the trash don't end up at landfills. And they do it for free.

 

Pikitup's pilot has a number of inbuilt inefficiencies. For example, Pikitup pays the private contractors between approximately R20 - R25 per household per month to collect separated recyclables. The companies are paid even if a household does not put out a bag of recyclables or a reclaimer collects the bag. The reclaimer is not paid anything.

 

As Pikitup expands its pilot, the private companies will get the cleanest materials. More reclaimers will lose access to bins, and the recyclables in those bins will end up at landfills.

 

This is not just bad for reclaimers. It is bad for the environment as landfills will fill up faster and more virgin materials will be used to produce new products. While the companies use trucks to collect recyclables, reclaimers' trolleys are a low carbon alternative.

 

A more sensible approach

 

It makes more sense to pay reclaimers to collect recyclables as is done in cities in Colombia, India, and Brazil. The African Reclaimers Organisation pilot has shown that reclaimers can provide an efficient, effective, low-carbon service that positively transforms relationships between residents and reclaimers.

 

Prior to the pandemic, reclaimers in this pilot were paid a service fee based on the kilograms of recyclables collected.

 

More than 2,400 residents have signed the African Reclaimers Organisation's petition that calls on the municipality to stop the R50 levy and create a reclaimer-based recycling system through consultation with reclaimers.

 

It is time the city recognised reclaimers' central role in Johannesburg's recycling economy and work with reclaimers to build on what exists to create a recycling system appropriate for the South African context. Expanding African Reclaimers Organisation's pilot would be a great way to start.

 

Melanie Samson, Sr Lecturer in Human Geography, University of the Witwatersrand

 

 

Africa: How Responsible Business Boosts the Agriculture Sector

Imagine an agricultural sector without child labour. A fair wage for farm workers and a fair income for farmers and food producers. Food grown with respect for the environment, and water pollution a distant memory. Reaching these goals is possible with the right business approach.

 

Responsible business conduct is a hot topic of global conversation, and FAO has been at the centre of this discourse in agriculture for several years. In 2016, FAO and the Organisation for Economic Co-operation and Development (OECD) launched the OECD-FAO Guidance for Responsible Agricultural Supply Chains, a global standard for addressing risk and development in the agricultural sector. A growing number of governments around the world have since been incorporating the OECD-FAO Guidance into their corporate sustainability policies, linking together investment, enterprise, agriculture and development.

Due diligence: a gateway to development?

 

The OECD-FAO Guidance recommends that businesses implement due diligence to address the most significant environmental and social risks associated with their agricultural supply chains. Due diligence is the process through which enterprises can identify, assess, mitigate, prevent and account for how they address the actual and potential adverse impacts of their activities as an integral part of business decision-making and risk management systems. In a rising number of countries, governments have introduced legislation that makes due diligence mandatory for companies. The due diligence process helps businesses identify issues and come up with solutions to the adverse impacts of their actions.

 

This is not just good for the planet but for businesses' bottom lines too. Doing business responsibly can improve workers' rights or livelihoods in sourcing communities, but it can also strengthen business processes. In recent years, there has been growing media scrutiny on and consumer interest in supply chains and working conditions. Obtaining more in-depth information on suppliers builds trust and reduces reputational risks from potential problems. By preventing negative impacts, a company will avoid bearing the costs of litigation and remedial actions. Likewise, actions that protect the environment can also bring financial benefits: for example, using renewable energy sources can actually be more economical in the long term and help hedge against the volatile markets of fossil fuels.

 

The OECD-FAO Guidance illustrates how conducting due diligence and addressing issues in supply chains has the power to boost businesses themselves and many key areas of development, including labour rights, animal welfare, land tenure rights, environmental protection and food security.

But how does it really work?

 

Let's start with a simple fact: over 70 percent of child labour takes place in the agricultural sector. By incorporating due diligence into their business models, large companies can contribute to eliminating child labour by conducting reviews to understand the probability of how and at what point in their supply chain this can occur.

 

Just carrying out audits is not enough to detect risks in supply chains, as audits can be faked or falsified on their own. However, by combining auditing with due diligence and working together with suppliers and outsourced partners along the supply chain, as well as with civil society organizations and other actors, structural problems like child labour can be addressed.

 

The OECD-FAO Guidance helps explain how companies can tackle issues like this by making them relevant to their operational environments. By doing this, companies not only improve their own supply chains but help contribute to the Sustainable Development Goals, creating change on a larger scale.

 

Better for the environment

 

Agriculture, forestry and other agricultural land use accounts for up to 25 percent of all greenhouse gas emissions. In most regions of the world, over 70 percent of freshwater is used for agriculture. Significant efforts are required to improve sustainability and reduce agriculture's impact on the planet.

 

Upon introducing due diligence, one company that participated in a pilot project testing the practical application of the OECD-FAO Guidance increased its awareness of its impact on the local environment by using satellite technology and Geographic Information System analysis to track land cover changes. By monitoring deforestation, the company could assess vulnerable areas and understand the effects it was having on them. The company realised that it needed to do more to tackle deforestation and engaged with suppliers to address this issue.

 

Boosting food security

 

In 2019, nearly 750 million people suffered from severe food insecurity. Agriculture can itself have a negative impact on food access for local communities. For example, when large amounts of land and time are devoted to farming 'cash crops', there is less space and fewer people available to grow nutritious food for the local community. One company taking part in the pilot carried out environmental and social impact assessments before starting new projects on previously unused land. With this issue in mind, the company reserved some land for food farming, giving space to the local community to grow crops that could then be sold or used for their own consumption.

 

FAO's World Banana Forum also promotes the key messages of the OECD-FAO Guidance to improve collaboration and boost sustainable production and trade in the banana sector. Another FAO project is working with stakeholders in the pineapple and avocado supply chains to introduce risk-based due diligence systems and encourage responsible sourcing of these fruits.

 

So how can the agriculture sector boost responsible business conduct going forward?

 

The short answer? By integrating the OECD-FAO recommendations on due diligence into regulatory frameworks, industry standards and policies. To create a more inclusive and sustainable agriculture sector for our future, governments, businesses and individuals need to take a look at the way they work. Due diligence processes can turn risks into development results, including greater food security, stronger labour rights and better environmental protection. To help companies perform due diligence systematically, the FAO-OECD Guidance proposes a model and five-step framework for companies to follow. By promoting it across the agricultural sector, we can support development and ensure that agriculture contributes to a sustainable future.-FAO.

 

 

 

Three Ghanaian Startups Named Top Performers and Secure Support from the Mastercard Foundation and MEST Express Accelerator Program

ACCRA, Ghana — MEST, in partnership with the Mastercard Foundation, today  announced the top three performing Ghanaian tech startups that recently graduated from its Beta 2020 cohort of the MEST Accelerator program. The program aims to equip early-stage ventures with the skills and resources they require to accelerate their growth.

 

These top performing startups will receive equity-free grant funding and support that will enable them  to address urgent needs and expand their operations.

 

The finals, held at the MEST incubator space in Accra, Ghana, and broadcast virtually, saw six startups   – Bosea, PayBox, Oniocha, Motito, WeGoo, and Tukwan – take to the stage to deliver their pitches. Final selection was based on performance throughout the year and the final pitch.

 

First place was awarded to the FinTech platform Bosea – a mobile technology and data science company that provides mobile loans in Ghana. To date, Bosea has recorded more than 35,000 loan applications through its smartphone app, which provides instant credit scoring, lending, and other personalized financial services.

 

“When we launched the MEST Express program last year, we knew there was a need for an accelerator that was specifically designed to address the critical needs of startups in Ghana due to the effects of the pandemic. Seeing these companies' growth over the past several months reinforces the fact that we are on the right track. I am very proud of the cohort and the grant winners. Bosea is a shining example that hard work, perseverance, and a clear vision can see you through the toughest times and even leave you stronger for it,” said Felix Darko, MEST Express Program Manager.

 

Bosea will receive $10,000 in grant funding towards the development of their Credify product, a lending-as-service platform that enables micro-credit and microfinance firms to fully digitize their operations. It offers a suite of Application Programming Interfaces (APIs) that enable end-to-end customer journeys capable of being a single platform for all decisions that involve credit.

 

“Our involvement in MEST Express exposed us to best practices in the tech industry. We had access to world-class experts in all areas of company building. At the end of the program, we had a clearer vision and a solid plan to get there,” said Paul Eshun, CEO of Bosea.

 

Second and third place Wegoo and Motito will receive $6,000 and $4,000 respectively to support their operations.

 

The funding will also provide essential resources needed to improve the resilience of these startups. All six startups will continue to receive post-program support from MEST Express.

 

“An environment where high-potential tech startups can be supported, through capacity building and funding, will contribute to building an ecosystem of thriving businesses that are led by and employ young people in Ghana,” said Kofi Dadzie, Ghana Program Lead for Digital Economy at the Mastercard Foundation.

 

About the Startups

 

Bosea

Bosea Micro Credit is a financial technology company on a mission to democratize credit and accelerate financial independence in Ghana. Most of its customers have little or no access to banks or other traditional financial institutions. Bosea uses mobile technology and data science to make financial services simple, inclusive, and accessible.

 

Wegoo

Wegoo is a platform that supports small businesses with affordable and reliable on-demand delivery services.

 

Motito

PayLater by Motito provides customers the opportunity to purchase essential items for personal and business needs without breaking the bank.

 

About MEST Express

 

Launched in September 2020, in response to the impact of COVID-19 on early-stage ventures, MEST Express is a program aimed at technology startups operating in Ghana. The goal of the accelerator is to equip early-stage ventures with the necessary skills and resources to weather the COVID-19 pandemic.

 

In partnership with the Mastercard Foundation and through its Young Africa Works strategy, MEST launched three new programs in 2020 — Pre-MEST, MEST Express, and MEST Scale. The US$3.5M project will enable MEST to scale its impact and reach exponentially more young people at more touch points along their entrepreneurial journey in Ghana, and in time, across the continent.

 

 

Mastercard Foundation

In partnership with the Mastercard Foundation and through its Young Africa Works strategy, MEST launched three new programs in 2020 — Pre-MEST, MEST Express, and MEST Scale. The US$3.5M project will enable MEST to scale its impact and reach exponentially more young people at more touch points along their entrepreneurial journey in Ghana, and in time, across the continent.

MEST Express covers a range of business content for the startups but explicitly focuses on exploring business models and product pivots, improving risk and crises resilience, and becoming increasingly investment ready. Graduating MEST Express startups will be poised for exponential business growth, and ready to onboard new talent. The program, which is tuition-free, will improve the resilience of MSMEs operating in Ghana that have been impacted by COVID-19 by enhancing business practices and technical know-how to ramp up traction, gain market share, boost sales, and create meaningful jobs. The program is designed to deliver tailored hands-on interventions that are focused on rapid practical application and tangible business outcomes.

 

About MEST  

 

MEST is an Africa-wide technology entrepreneur training program, internal seed fund, and network of hubs offering incubation for technology startups in Africa that was built on the idea that talent is everywhere, but the opportunity is not. Founded in Ghana in 2008, MEST provides critical skills training, funding, and support in software development, business, and communications to Africa’s tech entrepreneurs. Hubs are located in Accra, Ghana; Lagos, Nigeria; Cape Town, South Africa; and Nairobi, Kenya. To date, MEST has invested in over 60 startups across industries from SaaS and consumer internet, to eCommerce, Digital Media, Agritech, Fintech, and Healthcare IT. MEST is primarily funded by the Meltwater Foundation, the non-profit arm of Meltwater, a global leader in media intelligence and Outside Insight.

 

Leveraging MEST’s core competencies, decade plus of learning, extensive network, and existing intellectual property, in 2020 and beyond, MEST is partnering with the Mastercard Foundation to design and test three pilot programs with local partners in Ghana. The projects—Pre-MEST, MEST Express, and MEST Scale— will enable MEST to scale its impact and reach exponentially more young people at more touch points along their entrepreneurial and employment journey in Ghana, and in time, across the continent.

 

About the Mastercard Foundation

 

The Mastercard Foundation works with visionary organizations to enable young people in Africa and in Indigenous communities in Canada to access dignified and fulfilling work. It is one of the largest, private foundations in the world with a mission to advance learning and promote financial inclusion to create an inclusive and equitable world. The Foundation was created by Mastercard in 2006 as an independent organization with its own Board of Directors and management.  For more information on the Foundation, please visit: www.mastercardfdn.org

 

About the Young Africa Works Program

 

Young Africa Works is the Mastercard Foundation’s strategy to enable 30 million young people, particularly young women, to access dignified and fulfilling work by 2030. It is estimated that by 2030, Africa will be home to the world’s largest workforce, with 375 million young people entering the labour market. With the right skills, these young people will improve their lives and the lives of their communities, contributing to Africa’s overall competitiveness.

 

The Young Africa Works program is currently being implemented in seven African countries in collaboration with governments, the private sector, business leaders, educators, and young people. Countries involved in the first phase of the strategy include Rwanda, Kenya, Senegal, Ethiopia, Ghana, Nigeria, and Uganda.

 

 

 

Mozambique: AMPME to Benefit From Business Oriented Capacity Building

Maputo — The Mozambican Association of Micro, Small and Medium Companies (AMPME) will engage its nearly 600 affiliated companies across the country in capacity building programmes, intended to improve local content and other tools for better quality control of their products.

 

In order to achieve these goals, APME, and the African Management Service Company (AMSCO), a Pan-African advisory services body, and the technical assistance agency Nunisa, signed on Tuesday in Maputo a Memorandum of Understanding (MoU) with a two year life span.

 

The memorandum was signed by the APME chairperson, Feito Tudo Male, and the representatives of AMSCO and Nunisa, Helia Nsthandoca and Joao Sixpence respectively.

Under the MoU, AMSCO and Nunisa will assist the micro, small and medium companies in areas such as business governance, leadership, management and operations. The partnership will focus on organisational development, and joint project elaboration for business promotion, but will also produce evidence which will assist AMPME with scientific based decision making.

 

Feito Tudo Male, said the association, founded in 2015, consists of 600 micro, small and medium companies. He said they "have a pivotal role for the country's economy. Recent studies indicate that they represent about 98 per cent of the Mozambican companies employing a great majority of citizens who contribute about 75 per cent of the Gross Domestic Product".

 

Despite efforts to improve the business environment, Male pointed out that these companies have been facing a wide range of challenges in order to become robust, representative and inclusive.

 

With the memorandum, he believes conditions have been created for the strengthening of APME's intellectual and institutional capacity, for the promotion of capacity building and other initiatives which will boost development.

 

AMSCO representative, Helia Nsthandoca, said the institutional capacity building will, among other issues, assist the companies in building standard market practices, which are currently diverse, thus hampering access to business opportunities and finance.

 

 

Mozambique: Private Transport Operators Go On Strike

Maputo — Without any warning, private transport operators went on strike in the Greater Maputo Metropolitan Area on Monday morning, demanding the right to raise their fares.

 

Thousands of passengers found themselves unable to go to work because on many key routes there were no buses. Many gave up trying and went home.

 

The operators say the standard fare charged in Matola city of 13 meticais (about 23 US cents) is no longer sustainable. The fare has been unchanged for the past five years, they say, despite attempts to negotiate with the government.

 

They say that, with the recent introduction of electronic ticketing, 1.5 meticais of each ticket is subtracted and goes, not to the operators, but to the State's Maputo Metropolitan Transport Agency. So out of a fare of 13 meticais, the bus company only pockets 11.5 meticais.

 

"We're completely bankrupt. There's no way we can go on operating in the current situation", one operator, Constantino Mauai, told the independent television station, STV. "What's happening is that the State is stealing from the transport operators".

There are now calls from the operators to end the flat rate fares, and switch to charging passengers per kilometre travelled.

 

Other grievances presented by the operators are the allegedly arbitrary fines charged by the municipal police, and the poor state of the roads in the outlying Maputo and Matola neighbourhoods.

 

The strike also took by surprise the Mozambican Association of Road Transport Operators (Fematro). The Fematro chairperson, Castigo Nhamane, told reporters that the associates in Maputo and Matola did not bother to tell Fematro what they were planning.

 

In his discussions with operators on Monday morning, Nhamane found the main protest was the low fares they were allowed to charge. On top of this came the 1.5 meticais they were losing on each electronic ticket.

The Deputy Minister of Transport, Manuela Rebelo, promised that the government will work with the operators to find solutions to the problems they raised. But she wanted them to put their vehicles back on the roads, because they were depriving the users of an important service.

 

"Imagine the people who had couldn't reach a hospital because of this interruption", she said. "Let's solve the problems that affect us without prejudicing the users".

 

With the buses off the roads, passengers looked for alternatives. Some were able to crowd onto trains, and some packed onto open trucks (known ironically, as "my loves"). In neither case was there any attempt to impose the social distancing needed to restrict the spread of the Covid-19 respiratory disease.

 

The operators promised to return to work on Tuesday, while they negotiate with the government and the municipal authorities to find a solution to the dispute, particularly how to handle the electronic ticketing.

 

 

 

Pfizer expects Covid vaccine demand for years

Demand for Pfizer's Covid vaccine could bolster its revenues for years, the US drugs giant has said.

 

Pfizer said it was expecting "durable demand" for the vaccine, in a similar way to flu vaccines.

 

In the first three months of 2021, the vaccine generated revenues of $3.5bn (£2.5bn) as governments scrambled to try to contain the pandemic.

 

Revenue from the treatment is expected to hit $26bn this year - accounting for more than one third of Pfizer's sales.

 

The forecast is based on already-signed contracts for 1.6 billion vaccine doses to be delivered this year.

 

Pfizer said it expected to sign more deals this year, and was in supply talks with several countries for 2022 and beyond.

 

Covid vaccines: Will drug companies make bumper profits?

"Based on what we've seen, we believe that a durable demand for our Covid-19 vaccine - similar to that of the flu vaccines - is a likely outcome," said chief executive Albert Bourla.

 

The two-shot vaccine was Pfizer's top-selling product in the first quarter.

 

Expenses and profit from the vaccine are split 50-50 between Pfizer and its German partner BioNTech.

 

Pfizer and fellow US firm Moderna profit from their vaccines, while AstraZeneca and US giant Johnson & Johnson are supplying theirs at cost price while the pandemic continues.

 

Pfizer recently signed a contract with the UK to supply 60 million additional doses in 2021.

 

It is testing the use of a third dose of its vaccine as a booster, and expects the US to give the go-ahead for it to be used in children between 12 and 15 years old during the pandemic.

 

It is also testing the safety and efficacy of the vaccine in children from six months to 11 years old, it said in a prepared statement.-BBC

 

 

 

Ikea starts buy-back scheme with promise to tackle waste

Ikea has launched its long-awaited furniture buy-back and re-sale scheme, in an attempt to reduce the amount of products going to landfill.

 

The move is part of the retail giant's sustainability drive to become "climate positive" by 2030.

 

Customers will get vouchers to spend in-store if items they no longer need are returned in good condition.

 

Ikea admitted the scheme was a learning curve, but decided to launch it after successful trials in several cities.

 

"I'm not saying we have all the answers, but we learned enough from the pilots to tell us that this could be something of real value to us and our customers," Hege Saebjornsen, an environmental and sustainability expert at Ikea, told the BBC.

 

The initiative, originally scheduled to launch in November but postponed because of the pandemic, is now available in Ikea stores across the UK. It is also being launched in the other 26 countries in which Ikea operates.

 

Eliminate waste

Used products returned in as-new condition with no scratches will be bought for 50% of the original price, while items with minor scratches will be bought for 40%. Furniture that is well used with several scratches will be bought for 30%.

 

The items will be sold in separate areas of the stores, although Ikea has also announced a new partnership with Gumtree to sell second-hand products via the online marketplace.

 

Products eligible for buy-back include dressers, cabinets, bookcases and shelf units, small tables, dining tables and desks.

 

The Swedish company has already announced it wants to become fully "circular" - eliminate waste through the continual use of materials - by 2030. Ingka Group, Ikea's parent company, recently announced it was investing €4bn in renewable energy.

 

Customers wanting to sell back furniture go to Ikea.co.uk to fill out an online form, which generates a preliminary offer, and then take items to a store.

 

Ms Saebjornsen, a former sustainability manager at the retailer and now an Ikea adviser on the forthcoming COP26 climate summit, said that exactly what the consumer uptake will be is unknown.

 

But she said the trials, including in Sydney, Lisbon, Edinburgh and Glasgow, "were really successful. It taught us a lot about the appetite for this and how people behave".

 

The second-hand market generally - from clothing to homeware - is growing rapidly as shopping habits change, and Ikea hopes to tap into this, she said.

 

Quality control

One potential drawback was that furniture must be delivered fully-assembled, a possible impediment for people who have heavy and bulky items.

 

"We still found people are taking us up on it [the scheme]," she said.

 

Ikea is working on how to improve the disassembly of products.

 

"Some are better than others. Products can get damaged when taken apart, so we can only really accept assembled products. It maintains the security and quality of the item," she said.

 

Although Ikea is offering vouchers, not cash, the scheme is not being introduced as a profit driver for the retailer, she said. Still, doesn't it reinforce a buy-new, disposable culture?

 

"We've taken all of that into account," Ms Saebjornsen said.

 

"It's really important to highlight that the voucher has no use-by date. They can be used to buy another second hand item, or food.

 

"The real consideration here is that it's about how we make sustainable and healthy living easy, accessible and affordable, and really mainstream.

 

"Ikea is such a large company with massive potential to reach millions of customers.

 

"We are not saying that we have all the answers. But small actions can make a difference."

 

The buy-back service is available in full-sized Ikea stores nationwide, excluding order and collection points in Tottenham Court Road, Norwich and Aberdeen. The service will launch in Reading and Belfast on 17 May.-BBC

 

 

 

Facebook Oversight Board to rule on Trump account ban

Facebook's Oversight Board is set to rule on whether former US President Donald Trump can return to Facebook and Instagram.

 

Mr Trump was banned from both social media sites in January following the Capitol Hill riots.

 

The board is expected to announce its findings on Wednesday morning, according to US media.

 

Mr Trump, who is also banned from Twitter, launched a new website on Tuesday to update supporters.

 

Facebook's Oversight Board was due to announce its decision last month but delayed the ruling in order to review more than 9,000 public responses to cases, it said.

 

Wednesday's ruling on Mr Trump is set to be the biggest decision the board has taken since it was formed last year. The ruling cannot be appealed against and cannot be overruled by any Facebook employee.

 

What is the Oversight Board?

Often referred to as "Facebook's Supreme Court", it was set up to rule on difficult or controversial moderation decisions made by Facebook.

 

It was established by Facebook boss Mark Zuckerberg but operates as an independent entity, although its wages and other costs are covered by Facebook. It is made up of journalists, human rights activists, lawyers and academics.

 

The committee has already ruled on nine cases including a comment that seemed derogatory to Muslims. The post from a user in Myanmar, removed for breaking hate-speech rules, was found by the board not to be Islamophobic when taken in context.

 

Aside from Wednesday's ruling, the board will also give recommendations to Facebook.

 

Facebook will have seven days to implement decisions and 30 days to publicly respond to recommendations.

 

What happened to Trump's account?

Following the Capitol Hill riots on 6 January, Facebook announced it was banning Mr Trump for breaking its "glorification of violence" rules.

 

Hundreds of his supporters entered the complex as the US Congress attempted to certify Joe Biden's victory in last year's presidential election.

 

Mr Trump was acquitted of a charge of inciting insurrection at the US Capitol in his second impeachment trial in February, after being accused of encouraging the violence in which five people lost their lives.

 

The social network had originally imposed a 24-hour ban after the attack which was then extended "indefinitely".

 

Mr Zuckerberg announced that the risks of allowing Mr Trump to post were "simply too great".

 

The former president has also been banned from Twitter and YouTube.-BBC

 

 

 

HelloFresh sees meal kit demand surge as shift to online continues

Meal kit delivery firm HelloFresh has seen a big jump in customer numbers as it continues to benefit from the trend of ordering food online seen during the pandemic.

 

It said it had 7.3 million active users globally in the first three months of 2021, up 74.2% from a year earlier.

 

Its kits come with pre-packaged fresh ingredients and cooking instructions.

 

But it has faced criticism over order delays and cancellations as it has struggled to meet demand.

 

HelloFresh said was "confident" it would continue to benefit from the shift to online grocery shopping.

 

The German firm, which operates across Europe, the US and New Zealand, said it was is seeing a similar rise in demand that food delivery services and supermarkets had seen during the coronavirus pandemic.

 

Revenues for the January-to-March period more than doubled from a year earlier to €1.44bn (£1.25bn).

 

The firm said that, just as consumers have been "adapting to new habits" such as online shopping, they have become more interested in using meal kits, rather than buying separate ingredients from supermarkets.

 

One of its rivals in the UK market, Pasta Evangelists, has estimated its sales increased by more than 300% in 2020.

 

"2021 has set off to a strong start," said HelloFresh's co-founder and chief executive, Dominik Richter.

 

"I am confident that we will benefit disproportionately from the shift to increased online grocery penetration."

 

Mr Richter said the firm had continued to grow despite experiencing bottlenecks in its capacity to produce the meal kits "over the majority of 2020", particularly in its US market, which currently contributes more than half of its total revenues.

 

Last year UK customers reported problems including orders being cancelled at the last minute, missing boxes, and missing ingredients in their boxes as the firm struggled to keep up with demand.

 

Since January, the firm has set up two new distribution centres in Texas and Georgia, as well as acquiring US ready-to-eat meal company Factor75.-BBC

 

 

 

Pandora says laboratory-made diamonds are forever

The world's biggest jeweller, Pandora, says it will no longer sell mined diamonds and will switch to exclusively laboratory-made diamonds.

 

Concerns about the environment and working practices in the mining industry have led to growing demand for alternatives to mined diamonds.

 

Pandora's chief executive, Alexander Lacik, told the BBC the change was part of a broader sustainability drive.

 

He said the firm was pursuing it because "it's the right thing to do".

 

They are also cheaper: "We can essentially create the same outcome as nature has created, but at a very, very different price."

 

Mr Lacik explains they can be made for as little as "a third of what it is for something that we've dug up from the ground."

 

In 2020, worldwide lab-grown diamond production grew to between 6 and 7 million carats.

 

Meanwhile the production of mined diamonds fell to 111 million carats last year, having peaked at 152 million in 2017, according to a report from the Antwerp World Diamond Centre (AWDC) and the consultancy Bain & Company.

 

Production fell most in Russia, Canada, Botswana and Australia.

 

The coronavirus pandemic has had a major impact on the diamond industry. De Beers, which produces about one-fifth of the world's mined diamonds, says production fell 18% last year.

 

Economic uncertainty and lockdowns led to a slump in demand and falling prices, although there has been something of a recovery since.

 

Sales boost?

Pandora's lab-made diamonds are being made in Britain, and the UK is the first country where they will be sold.

 

The new diamond jewellery will start at £250 ($350). Although diamonds have traditionally only been a very small share of the 100 million pieces Pandora sells worldwide each year, Mr Lacik believes that will be boosted by lower prices.

 

"Pandora jewellery today is much more of an everyday type of jewellery, even though a large proportion of it is gifted. The way the diamond industry has kind of been created to a large degree has been very much about gifting, and in particular around when people get engaged or married".

 

"We're trying to open up this playing field and say, you know, with the type of value equation that we offer, you can use this everyday if you want."

 

He expects people to buy gifts more often for themselves instead.

 

"What might very well happen is actually that the total demand for diamonds is going to increase. So it may actually not be a question of, we steal somebody else's lunch".

 

Olya Linde, the lead author of the Bain report, agrees that there is room for both.

 

"I believe that natural diamonds and lab grown diamonds can wonderfully coexist and grow the overall diamond market. There's clear demand for each type of product."

 

Better design and lower prices are, says Ms Linde, the top reasons why customers pick lab-made diamonds over their naturally occurring counterparts.

 

Concerns about the environmental, sustainability and ethical impact of mined diamonds didn't make the top five.

 

Changing tastes

However, Bain's survey found that concerns about sustainability were more important to "Millennials" and "Gen-Z" than older age groups when buying diamond jewellery.

 

One problem with lab-made diamonds, though, is that they can take a lot of energy to produce.

 

Between 50% and 60% of them come from China, where they are made in a process known as "high-pressure, high-temperature technology". The use of coal powered electricity is widespread.

 

However in the United States, the biggest retail market for lab-grown diamonds, there is a greater focus on using renewable energy.

 

The largest US producer, Diamond Foundry, says its process is "100% hydro-powered, meaning zero emissions".

 

Both types are chemically and physically identical to mined diamonds.

 

But conflict-free production is still a big concern for customers across different age groups, according to Bain.

 

It's now more than 20 years since the Kimberley Process came into force. The UN-backed process aims to stop diamonds being used to fuel conflicts after years of that happening in countries such as Angola, Ivory Coast, Sierra Leone and the Democratic Republic of the Congo.

 

Last year, a report by Human Rights Watch found that some major jewellery companies were doing better at sourcing mined diamonds, "but most cannot assure consumers that their jewellery is untainted by human rights abuses".

 

It found that Pandora was one of the best performers, having taken significant steps towards responsible sourcing.

 

But for the World Diamond Council (WDC), which represents the mined diamond industry, lab-made diamonds are not the answer.

 

It says any suggestion they "would have a role in preventing trade in conflict diamonds is spurious and not based on fact".

 

The WDC adds that for people living in artisanal and small-scale diamond mining communities stopping the mining of diamonds "would remove a primary source of income" and "would have devastating impacts on their livelihoods, causing poverty and further unrest".

 

Pandora chief Mr Lacik says the long term is what matters when it comes to the company's approach to sustainability.

 

"Whether consumers are buying more or less today, right now is actually not the key driver," he says.

 

"We want to become a low-carbon business. I have four children, I'm leaving this earth one day, I hope I can leave it in a better shape than maybe what we've kind of created in the last 50 years or so."-BBC

 

 

 

Judge presses Epic CEO during second day of Apple antitrust trial

A U.S. judge on Tuesday pressed the chief executive of "Fortnite" creator Epic Games on how the fundamental changes the game maker is asking her to force on Apple Inc's (AAPL.O) App Store would affect the livelihoods of millions of developers who make software for Apple devices.

 

Judge Yvonne Gonzalez Rogers is presiding over a three-week trial that kicked off Monday in the United States District Court for the Northern District of California. read more

 

Epic has alleged that Apple has abused the power it holds over the software developers who want to reach its 1 billion iPhone users by charging commissions of up to 30% on in-app purchases and conducting App Store reviews that Epic alleges hold back companies Apple views as competitors.

 

Epic Games Chief Executive Tim Sweeney on Monday testified that "Apple exercises total control over all software on iOS" and can deny access to apps at will. read more

 

Epic wants Gonzalez Rogers to order Apple to allow users to put third-party software onto their iPhones and ease its in-app payment rules. Those changes would apply to all kinds of apps, not just games like Epic's "Fortnite."

 

After Epic's Sweeney had been further questioned by attorneys for both Epic and Apple on Tuesday, the judge asked Sweeney whether he was familiar with the economics of running other apps, such as food apps, dating apps or instant messaging apps. Sweeney said he was not.

 

“So you don’t have any idea how what you are asking for would impact any of the developers who engage in those other categories of apps, is that right?” Gonzalez Rogers asked.

 

"I personally do not," Sweeney said.

 

At another point, Sweeney said users faced "friction" in making purchases in the "Fortnite" game outside of native applications.

 

Gonzalez Rogers asked Sweeney whether the company's desire to be free of Apple's in-app purchase requirements meant that it wanted the "Fortnite" user base, which includes many younger users, to have access to "what I would call, as a parent, an impulse purchase."

 

"What you are really asking for is the ability to have impulse purchases," she said to Sweeney through layers of plexiglass separating the witness booth from the bench.

 

"Yes," Sweeny replied, "customer convenience is a huge factor in this."-The Thomson Reuters Trust Principles.

 

 

 

Boeing faces new hurdle in 737 MAX electrical grounding issue -sources

U.S. air safety officials have asked Boeing Co (BA.N) to supply fresh analysis and documentation showing numerous 737 MAX subsystems would not be affected by electrical grounding issues first flagged in three areas of the jet in April, two people familiar with the matter told Reuters.

 

The extra analysis injects new uncertainty over the timing of when Boeing's best-selling jetliner would be cleared to fly by the U.S. Federal Aviation Administration (FAA).

 

The electrical problems have suspended nearly a quarter of its 737 MAX fleet.

 

U.S. airlines have said they expected Boeing to release the service bulletins as soon as this week that would allow them to make fixes and soon return the planes to service, but this latest issue will likely push that timelime back.

 

 

“We continue to work closely with the FAA and our customers to address the ground path issue in affected 737s,” a Boeing spokeswoman said.

 

Asked about the status of the planes, a FAA spokesman said "we are continuing to work with Boeing."

 

Airlines pulled dozens of 737 MAX jets from service early last month after Boeing warned of a production-related electrical grounding problem in a backup power control unit situated in the cockpit on some recently built airplanes.

 

The problem, which also halted delivery of new planes, was then found in two other places on the flight deck, including the storage rack where the affected control unit is kept and the instrument panel facing the pilots.

 

 

The glitch is the latest issue to beset the 737 MAX, which was grounded for nearly two years starting in 2019 after two fatal crashes.

 

The slog of questions over a relatively straightforward electrical issue illustrates the tougher regulatory posture facing America's largest exporter as it tries to emerge from the 737 MAX crisis and the overlapping coronavirus pandemic.

 

Late last week, Boeing submitted service bulletins advising airlines on how to fix the problems with grounding, or the electrical paths designed to maintain safety in the event of a surge of voltage, the two people said.

 

The FAA has approved the service bulletins but then, in ongoing discussions with Boeing, asked for additional analysis over whether other jet subsystems would be affected by the grounding issue, one of the sources said. The FAA will review Boeing's analysis and any necessary revisions to the service bulletins before they can be sent to airlines.

 

 

Boeing has proposed adding a bonding strap or cable that workers screw onto two different surfaces creating a grounding path, two people said.

 

Boeing had initially told airlines a fix could take hours or a few days per jet.

 

The electrical grounding issue emerged after Boeing changed a manufacturing method as it worked to speed up production of the jetliner, a third person said. A fourth person said the change improved a hole-drilling process.

 

The FAA issued a new airworthiness directive last week requiring a fix before the jets resume flight, saying the issue impacts 109 in-service planes worldwide. Sources said it impacts more than 300 planes in Boeing’s inventory.-The Thomson Reuters Trust Principles.

 

 

 

Deutsche Post DHL hikes outlook again on ecommerce boom

German logistics company Deutsche Post (DPWGn.DE) raised its financial outlook again on Wednesday after more than tripling its operating earnings in the first quarter, predicting that ecommerce will keep booming and global trade will rebound.

 

Deutsche Post DHL, one of the world's biggest logistics companies, lifted its operating profit forecast to more than 6.7 billion euros ($8.05 billion) in 2021, and more than 7 billion in 2023. It previously forecast more than 5.6 billion for 2021.

 

First quarter operating profit jumped to 1.9 billion euros on revenues up an organic 26% at 18.9 billion.

 

($1=0.8319 euros)- The Thomson Reuters Trust Principles.

 

 

 

Australian regulator accuses Westpac of insider trading in $12 bln grid sale

Australia's corporate watchdog accused Westpac Banking Corp (WBC.AX) of insider trading while financing a A$16 billion ($12 billion) energy grid privatisation in 2016, the latest in a series of regulatory problems for the country's No. 2 lender.

 

The Australian Securities and Investments Commission (ASIC) said Westpac knew it had won the contract to help two pension funds buy Ausgrid, a state-owned power supplier to millions of people around Sydney, for two hours while it bought A$12 billion of derivative products to support the deal.

 

"The Ausgrid information was not generally available and it was information which, if generally available, a reasonable person would expect to have a material effect on the price or value of the traded products," ASIC said in a civil lawsuit filed on Wednesday.

 

The lawsuit casts a fresh cloud over Westpac one day after it posted a tripling of first-half profit largely due to penalties it paid in the prior period to settle an unrelated regulator lawsuit accusing it of enabling millions of offshore payments, including to purveyors of child exploitation material.

 

It also underscores the increased determination of Australia's financial regulators to take on big cases after they were accused in a 2018 public inquiry of being too cosy with the sector.

 

"With everything Westpac's been through in the last few years, and they've increased regulatory compliance spend enormously, there's a lower probability that they're going to occur in the future," said Morningstar banking analyst Nathan Zaia.

 

"If ASIC wins the case they'll face a penalty. How large that will be will be anyone's guess."

 

Seven Westpac employees and former employees were named in the ASIC lawsuit but do not face prison time since it is a civil case only.

 

A Westpac spokesman declined to comment beyond a company statement which said the bank was considering its position and took the allegations "very seriously".

 

Westpac shares initially traded higher on Wednesday as analysts upgraded their forecasts following its result the previous day, but the stock gave up most of its gains to be flat by mid-afternoon, just behind the broader market (.AXJO).

 

The two pension funds which Westpac helped buy Ausgrid for a total A$16 billion, AustralianSuper and IFM, declined to comment.

 

A representative of New South Wales state premier Gladys Berejiklian, who was state treasurer at the time of the privatisation deal in 2016, also declined to comment.

 

In a previous ASIC action, a court ordered Westpac to pay A$3.3 million in 2018 for its involvement in fraudulent setting of interbank lending rates in 2010.

 

($1 = 1.2928 Australian dollars)-The Thomson Reuters Trust Principles.

 

 

 

Yellen sees no inflation problem after rate hike comments roil Wall Street

U.S. Treasury Secretary Janet Yellen said on Tuesday she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth.

 

The initial comments made by Yellen, a former Federal Reserve chair, deepened a sell-off in tech stocks and pushed longer-dated Treasury yields higher.

 

"It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat, even though the additional spending is relatively small relative to the size of the economy," Yellen said in taped remarks to a virtual event put on by The Atlantic.

 

"It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive (and) I think that our economy will grow faster because of them."

 

Later on Tuesday, Yellen told a Wall Street Journal CEO Council event that she does not anticipate that inflation would be a problem for the U.S. economy and that any price increases would be transitory because of supply chain shortages and the rebound in oil prices to pre-pandemic levels.

 

Asked directly about her remarks on rates, Yellen said she was neither predicting nor recommending a rate rise.

 

"If anybody appreciates the independence of the Fed, I think that person is me," Yellen said.

 

"I don't think there's going to be an inflationary problem. But if there is the Fed will be counted on to address them," she added.

 

Treasury bond yields have risen sharply this year, especially in the first quarter, on growing expectations for an economic recovery from the coronavirus recession.

 

"I don't think it was meant to be an impactful statement that yields will have to rise now," TD Securities interest rate strategist Gennadiy Goldberg, said of Yellen's initial remarks.

 

The yield on the benchmark 10-year Treasury note was 1.58% on Tuesday.

 

Fed officials, including Chair Jerome Powell, have said the move reflects confidence in the economy rather than expectations the central bank would start dialing back ultra-accommodative policy. Powell has said repeatedly the Fed is nowhere close to beginning that process.

 

Yellen said during The Atlantic event the main goal of Biden's programs is to help reverse decades of widening economic inequality.

 

The programs, which include stepped-up spending on infrastructure, childcare and education, will make a "big difference" to inequality, Yellen said.

 

Republicans have criticized the proposed tax increases Biden expects to use to pay for his proposals, but Yellen said the effect of a change in tax rates is “much less powerful in influencing growth in either direction,” adding that her aim is to make sure government deficits “stay small and manageable.”-The Thomson Reuters Trust Principles.

 

 

 

ARK Innovation's performance under pressure as tech stocks swoon

A rotation out of growth and technology stocks and a recent slide in shares of Tesla Inc (TSLA.O) are weighing on the performance of ARK Innovation (ARKK.P), the flagship exchange-traded fund managed by star stock picker Cathie Wood that bested all other U.S. equity funds in 2020.

 

The $23.1 billion fund posted a gain of less than 1% last month, a showing nearly 3 percentage points behind the average fund in its category, according to Morningstar data. For the year to date, the fund is down 9%, a performance that puts it in the bottom 100th percentile in Morningstar's category of 543 mid-cap growth funds. The S&P 500 (.SPX) is up 10.9% over the same time.

 

Investors pulled $645.5 million out of the fund during the week that ended April 21, a 2.6% decline that was its largest weekly outflow in percentage terms since 2018 and only the fifth weekly loss overall since 2019, according to Refinitiv Lipper. The fund brought in $37 million the following week, the smallest weekly inflow in percentage terms since January 2020.

 

Among the factors denting the fund is a rally in shares of financials, energy firms and other companies that stand to benefit from a powerful U.S. economic rebound that has made the growth and tech stocks that dominated last year less alluring to some investors. The Russell 1000 Value index (.RLV), for example, is up nearly 15.8% for the year to date, while the Russell 1000 Growth index (.RLG) is up 5.5% over the same time.

 

Shares of Tesla, which make up 10.5% of the fund and are its biggest holding, are down 4.5% since the start of the year, contributing to the fund's slide. Virtual healthcare company Teladoc Health Inc (TDOC.N), the fund's second-largest holding, has seen its shares fall nearly 21% over the same time.

 

"The market has rotated away from the fund's favored growth stocks toward more economically sensitive segments of the market," said Todd Rosenbluth, head of ETF and mutual fund research at CFRA. "We think if underperformance continues longer, some investors will become frustrated and seek an alternative."

 

More recently, growth and technology stocks have sold off over the last few days, a move investors have pinned on everything from profit-taking to worries that the U.S. economic rebound will peak in coming months. read more

 

Managing investor expectations after last year's eye-popping performance will be a test for fund manager Wood, who is widely seen as one of the most bullish investors on Wall Street in companies such as Tesla and the cryptocurrency bitcoin. She became a favorite of retail investors as technology and growth stocks surged during the pandemic last year.

 

ARK did not respond to a request to comment for this story.

 

The fund gained 152.8% in 2020, the best performance among any actively managed U.S. equity fund tracked by Morningstar.

 

Of the fund's 10-largest holdings, only one - payment company Square Inc (SQ.N) - is up for the year to date.

 

"We are in a scenario now that is quite different than it was the year before, and as we see the reopening increase and the pandemic eases, the performance of growth names is going to be more dictated by the Fed" and its interest rate policies than by the economic recovery, said Quincy Krosby, chief market strategist at Prudential Financial.

 

The slowing performance of the fund could also focus more investor attention on its strategy of taking large bets on a handful of companies, a style that may make it "ill-prepared to grapple with a major plot twist," noted Robby Greengold, a strategist on Morningstar's U.S. equities team.

 

Overall, funds such as ARK Innovation that outperformed in one year do not tend to outperform in the following year, according to a 2020 study led by James Choi, a professor at the Yale School of Management.

 

"The disappearance of significant performance persistence is due to lower returns to favorable styles, as well as less favorable style tilts and increased style-adjusted underperformance by past winning funds," the study noted.-The Thomson Reuters Trust Principles.

 

 

 

Lyft sees sustained profit starting in third quarter on cost cuts, demand rebound

Lyft Inc (LYFT.O) on Tuesday surprised Wall Street with significantly lower losses than expected and said it would deliver dependable profit on an adjusted basis beginning in the third quarter thanks to cost cuts that allow the company to earn more per ride.

 

The results come as Lyft emerges from more than a year of pandemic-related restrictions during which ridership and revenue plummeted. The company said it expected a strong rebound in U.S. travel in the third quarter, when many homebound Americans who hunger for travel are likely to be fully vaccinated against COVID-19.

 

Shares were up 5.2% at $59 in after-hours trading on Tuesday. Over the previous five days they had lost 11%.

 

Lyft reported an adjusted $73 million first-quarter loss before interest, taxes, depreciation and amortization - a metric that excludes more than $300 million in one-time costs, including stock-based compensation.

 

 

That is significantly narrower than the $144 million loss analysts had projected on average, according to Refinitiv data.

 

Lyft reaffirmed its goal to be profitable on the adjusted EBITDA metric in the third quarter of this year and said it would remain profitable beyond that time, even as the company invested in future growth opportunities.

 

Lyft President John Zimmer said Lyft would take advantage of its leaner cost structure to make more money per rider as passengers return to the platform in greater numbers in the coming months.

 

Zimmer also played down the threat of federal regulation that would turn most ride-hail and food-delivery workers, who currently are independent contractors, into employees.

 

 

Lyft had recently pulled forward its profitability goal by three months when it announced the sale of its self-driving technology business for $550 million. read more

 

Lyft's larger rival, Uber Technologies Inc (UBER.N), has projected profitability on an adjusted basis by the end of 2021. Uber is scheduled to report results on Wednesday afternoon.

 

On a net basis, Lyft's loss widened to around $427 million, driven by high stock-based compensation costs as the result of the company's public listing more than two years ago.

 

At $609 million, first-quarter revenue also outstripped average Wall Street expectations for $559 million.

 

 

Lyft has drastically slashed costs during the pandemic when ridership plummeted and it continued to cut expenses in the first three months of 2021, even as riders gradually returned.

 

Total costs in the first quarter decreased by more than $344 million and overall, Lyft has slashed nearly $2.5 billion in costs since the beginning of last year.

 

Zimmer said the company also expected incentive spending for drivers to increase in the coming months, but executives during a conference call said those incentives were covered by the higher prices riders currently pay in many cities as demand temporarily outstrips supply. read more

 

Lyft Chief Executive Logan Green said he expected supply to balance out in the third quarter, once vaccinations increase, COVID-19 infections decrease and federal unemployment benefits for gig workers expire.

 

The number of active riders in the first quarter rose more than 7% from the last three months of 2020, but ridership still remains around 36% below last year.

 

Executives said they expect trip demand, particularly leisure and airport travel, to ramp up significantly in the third quarter.

 

REGULATORY PRESSURE

 

But as business gradually returns, Lyft and its gig-economy peers in the ride-hail and food-delivery industry face regulatory pressure under the new administration of U.S. President Joe Biden, who campaigned on the promise of delivering benefits to gig workers by turning them into employees.

 

The shares of the companies took a tumble last week when U.S. Labor Secretary Marty Walsh told Reuters in an interview that "a lot of gig workers should be classified as employees." read more

 

The companies rely on low-cost flexible workers and say their services would become unavailable if workers were reclassified as employees. They say surveys show the majority of their workers do not want to be employees. read more

 

Zimmer on Tuesday played down the risks of federal regulation, saying a labor bill supported by U.S. Democrats faced tough odds of passing in Congress.

 

He said the company instead was focused on adopting compromise regulation on the state and local levels, modeled after a November gig industry-sponsored California ballot measure that cemented ride-hail and food delivery workers' status as contractors, but provided them with some benefits. read more

 

“I honestly believe that we will continue to see common-ground, practical solutions that balance independence for drivers ... with additional benefits,” Zimmer said, adding that he thinks the federal government will eventually pass guidance that makes it easier for states to adopt compromise regulation.-The Thomson Reuters Trust Principles.

 

 

 

 

 

 


 


 


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Alt. Email:       <mailto:info at bulls.co.zw> info at bulls.co.zw  

Website:         <http://www.bullszimbabwe.com> www.bullszimbabwe.com 

Blog:            <https://bullszimbabwe.com/category/blogs/bullish-thoughts/> www.bullszimbabwe.com/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:      <http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimbabwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA> www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 



 

 

 


 

INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


FCB

AGM 

virtual

06/05/21 : 3pm

 


NMB

AGM

virtual

1205/21 :  3:30pm

 


 

Africa Day

 

25/05/21

 


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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