Major International Business Headlines Brief::: 20 May 2021

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Major International Business Headlines Brief::: 20 May 2021

 


 

 


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ü  ByteDance: TikTok's co-founder to step down as chief executive

ü  Qantas accelerates cost cuts as $1.5bn loss looms

ü  Colonial Pipeline boss confirms $4.4m ransom payment

ü  Bitcoin falls further as China cracks down on crypto-currencies

ü  Rail services to come under unified state control

ü  Wells Fargo: US bank set to offer crypto fund to rich clients

ü  Slide in cryptocurrencies, other high-fliers, comes amid looming U.S.
inflation worries

ü  Stocks struggle as taper talk, crypto crash put markets on edge

ü  Every second counts as startups race to deliver fresh food

ü  Big pharma and private equity seek healthy returns in Europe's east

ü  Ford Motor, SK Innovation to announce EV battery joint venture -sources

ü  EasyJet to fly 15% of Q3 pre-pandemic schedule, post 701 mln stg H1 loss

ü  Nigeria to Benefit From UK's £22m Cyber Capacity Building Fund

ü  Nigeria's National Air Carrier to Begin Operation in 2022 - Sirika

ü  Lesotho: Poultry Import Ban Continues

ü  Kenya: IMF Wires Another Sh44 Billion Loan to Nairobi

 

 

 

 

 

 

 

 


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ByteDance: TikTok's co-founder to step down as chief executive

The CEO and co-founder of TikTok's owner ByteDance has announced he will
step down and transition to a new role by the end of the year.

 

In a letter to employees, Zhang Yiming said he will be succeeded by fellow
co-founder Rubo Liang.

 

The move marks the biggest shake-up at the Chinese technology giant since
its launch almost a decade ago.

 

TikTok's popularity has helped it become a global sensation but has also
drawn scrutiny.

 

"The truth is, I lack some of the skills that make an ideal manager. I'm
more interested in analysing organizational and market principles, and
leveraging these theories to further reduce management work, rather than
actually managing people," Mr Zhang wrote in a message on the company's
website.

 

"Similarly, I'm not very social, preferring solitary activities like being
online, reading, listening to music, and contemplating what may be
possible," he added.

 

Mr Zhang said his successor Rubo Liang has been "an invaluable partner",
developing the firm's technology as well as hiring and managing employees.

 

Mr Liang's most recent role at ByteDance was head of its human resources
department.

 

The letter also said that the change in leadership will take place over the
next six months to ensure a smooth transition.

 

Formed in 2012, Beijing-based ByteDance created the global smash-hit app
TikTok, which has an estimated 700 million active monthly users.

 

Its massive popularity has meant it has been scrutinised by governments
around the world, including in America and China.

 

During his presidency, Donald Trump regularly attacked ByteDance, accusing
TikTok of being a threat to US national security.

 

Politicians and officials raised concerns about users' personal data being
passed to the Chinese government.

 

TikTok denied accusations it shared user data.

 

Last month ByteDance was one of 13 online platforms called on by Chinese
regulators to adhere to tighter regulations in their financial divisions, as
part of a wider push to rein in technology companies.

 

For many years, Beijing took a hands off approach to encourage the
technology firms to grow but official scrutiny of their platforms has
stepped up as they have branched out into financial services.

 

"Internet platforms have played an important role in improving the
efficiency of financial services and broadening the access of financial
services to more people," the People's Bank of China said in a statement.

 

"At the same time, some financial services were running without licences,
and there are serious rule violations in areas such as regulatory arbitrage,
unfair competition and damaging consumers' interests," it added.-BBC

 

 

 

Qantas accelerates cost cuts as $1.5bn loss looms

Qantas has announced new cost-cutting measures to help it deal with the
impact of the coronavirus pandemic.

 

The Australian carrier also said it would report an annual loss before tax
of more than $1.5bn (A$2bn, £1.1bn).

 

But it added that its debt pile had peaked and was likely to fall as
domestic travel was on track to hit pre-pandemic levels.

 

Qantas said its international division was losing about $2.3m a week, down
from $3.9m last month.

 

Its latest cost-cutting plans include a two-year wage freeze, slashing
travel agents' commissions for international flights and offering voluntary
redundancies to cabin crew in its international business.

 

Separately on Wednesday, the parent company of rival Singapore Airlines
revealed a record annual loss of S$4.27bn ($3.2bn) - worse than the average
S$3.27bn forecast predicted by eight analysts, said a Reuters report.

 

In a statement on Tuesday, Qantas said it sees more positive times ahead as
a rebound in domestic travel to near-normal levels would help it to continue
to cut its debts.

 

"The fact we're making inroads to the debt we needed to get through this
crisis shows the business is now on a more sustainable footing," Qantas
Chief Executive Alan Joyce said in a statement.

 

"The main driver is the rebound of domestic travel, which now looks like it
will be bigger than it was pre-COVID, at least until international borders
re-open."

 

Qantas added that its international division was losing about $2.3m a week,
down from $3.9m last month, due to the opening of a travel bubble with New
Zealand and robust demand for its cargo services.

 

The airline has pushed back the sale of international tickets, with the
exception of New Zealand, to December after the Australian government said
it was unlikely to open its borders to widespread travel until the middle of
next year.

 

Qantas shares on the Sydney Stock Exchange rose after today's announcement.

 

Separately on Wednesday, the owner of Singapore's national airline revealed
the biggest loss in its 74-year history.

 

The $3.2bn loss was far bigger than last year's $159m loss, the first time
the company had ever fallen into the red.

 

The firm also announced a $4.65bn bond sale to help to bolster its finances
in the face of the Covid-19 crisis.

 

Singapore Airlines, which has no domestic market, has been one of the
world's hardest hit carriers during the pandemic, alongside its Hong
Kong-based rival Cathay Pacific.

 

On Monday, a planned travel bubble between Hong Kong and Singapore was
postponed for a second time after a spike in cases in Singapore.-BBC

 

 

 

Colonial Pipeline boss confirms $4.4m ransom payment

Colonial Pipeline has confirmed it paid a $4.4m (£3.1m) ransom to the
cyber-criminal gang responsible for taking the US fuel pipeline offline.

 

Its boss told the Wall Street Journal he authorised the payment on 7 May
because of uncertainty over how long the shutdown would continue.

 

"I know that's a highly controversial decision," Joseph Blount said in his
first interview since the hack.

 

The 5,500-mile (8,900-km) pipeline carries 2.5 million barrels a day.

 

According to the firm, it carries 45% of the East Coast's supply of diesel,
petrol and jet fuel.

 

Chief executive Mr Blount told the newspaper that the firm decided to pay
the ransom after discussions with experts who had previously dealt with
DarkSide, the criminal organisation behind the attack.

 

"I didn't make [that decision] lightly. I will admit that I wasn't
comfortable seeing money go out the door to people like this.

 

"But it was the right thing to do for the country," he added.

 

US fuel firm resumes service after cyber-attack

The US government has recommended in the past that companies do not pay
criminals over ransomware attacks, in case they invite further hacks in the
future.

 

Colonial Pipeline took itself offline on Friday 7 May after the
cyber-attack.

 

In return for the Bitcoin payment, the company received a decryption tool so
it could unlock the systems compromised by the hackers - although that was
not enough to restart systems immediately, according to the newspaper.

 

Operations resumed on the pipeline last week, although petrol shortages seen
across states such as North Carolina and Georgia have persisted, according
to data tracking firm Gas Buddy.

 

Mr Blount added that it would take months before some other business systems
are recovered, and estimated that the attack would ultimately cost the
company tens of millions of dollars.

 

He also regrets that the company has lost some degree of anonymity, having
led the firm since 2017.

 

"We were perfectly happy having no one know who Colonial Pipeline was, and
unfortunately that's not the case any more," he said. "Everybody in the
world knows."

 

At the time of the hack, the DarkSide criminal gang acknowledged the
incident in a public statement.

 

"Our goal is to make money and not creating problems for society," DarkSide
wrote on its website.

 

"We do not participate in geopolitics, do not need to tie us with a defined
government and look for... our motives," the group added.-BBC

 

 

 

Bitcoin falls further as China cracks down on crypto-currencies

The price of Bitcoin fell below $34,000 (£24,030) for the first time in
three months on Wednesday, after China imposed fresh curbs on
crypto-currencies.

 

Beijing banned banks and payment firms from providing services related to
crypto-currency transactions.

 

It also warned investors against speculative crypto trading on Tuesday.

 

It follows falls in Bitcoin of more than 10% last week after Tesla said it
would no longer accept the currency.

 

On Wednesday afternoon, Bitcoin recovered some ground, although it was still
down -10.4% at $38,131.

 

Meanwhile, other digital currencies such as Ether, which acts as the fuel
for the Ethereum blockchain network, and Dogecoin lost as much as 22% and
24% respectively.

 

At the same time, Tesla shares fell more than 3% on Wall Street, possibly
because of the electric carmaker's exposure to Bitcoin.

 

The firm, owned by Elon Musk, still holds around $1.5bn worth of the
crypto-currency.

 

Beijing cracks down

Crypto-currency trading has been illegal in China since 2019 in order to
curb money-laundering. But people are still able to trade in currencies such
as Bitcoin online, which has concerned Beijing.

 

On Tuesday, three state-backed organisations, including the National
Internet Finance Association of China, the China Banking Association and the
Payment and Clearing Association of China issued a warning on social media.

 

They said consumers would have no protection if they were to incur any
losses from crypto-currency investment transactions.

 

They added that recent wild swings in crypto-currency prices "seriously
violate people's asset safety" and are disrupting the "normal economic and
financial order".

 

Neil Wilson of Markets.com said: "China has for some time been putting
pressure on the crypto space, but this marks an intensification - other
countries might follow now as central banks make strides towards their own
digital currencies.

 

"Until now, Western regulators have been pretty relaxed about Bitcoin, but
this might change soon."

 

Bitcoin price chart

Tesla snub

In March, Tesla boss Elon Musk announced unexpectedly that the electric
carmaker would allow customers to buy cars using Bitcoin.

 

But last week, he did a U-turn and suspended vehicle purchases using Bitcoin
because of environmental concerns.

 

His fears centre on Bitcoin mining - the energy-intensive process through
which the digital currency is generated, using high-powered computers. It
often relies on electricity generated with fossil fuels, particularly coal.

 

"We are concerned about rapidly increasing use of fossil fuels for Bitcoin
mining and transactions, especially coal, which has the worst emissions of
any fuel," Mr Musk wrote.

 

"Cryptocurrency is a good idea... but this cannot come at great cost to the
environment."

 

He said the electric carmaker did not intend to sell any of its Bitcoin and
intended to reinstate crypto-currency transactions once mining shifted to
using more sustainable energy sources.

 

Although the digital currency cannot be traded in China, more than 75% of
Bitcoin mining around the world is done in China.

 

For anyone who has followed the crypto-currency scene for a while, the
events of recent weeks are a familiar story.

 

Some random event - say, a tweet from Elon Musk announcing Tesla will accept
crypto-currency payments - sends Bitcoin to new highs, and people begin to
say it's winning mainstream acceptance.

 

Then another random event happens, perhaps a change of course from the Tesla
tycoon. It comes tumbling down again, and talk of it going mainstream fades
into the background.

 

Last month, in a chatroom on Clubhouse (another phenomenon that seems to be
swinging from boom to bust) I expressed some scepticism about
crypto-currencies.

 

Up popped a senior figure from London's thriving fintech scene: "Rory,
Rory," he chided me, "crypto is becoming an accepted asset class."

 

With big City institutions taking an interest, that had a ring of truth -
back in April, at least.

 

But this week, the weather had changed, with the Financial Times reporting
"new doubts among institutional fund managers over the future of
crypto-currencies as an asset class".

 

My mind went back to 2013, when I had first taken an interest in Bitcoin. In
a report for Radio 4's PM programme, I had bought a pizza for 0.5 BTC, a
tortuous process which had not seemed worth the £30 it cost back then - of
course, at today's exchange rate, that was a £14,000 pizza.

 

I had also written a blog post headlined "The Bitcoin Bubble", in which I
tried to mine some lessons from a period when the price of the
cryptocurrency shot up from $15 to $276 and then hurtled lower again.

 

I ended a piece in which I compared the cryptocurrency with 17th-Century
Dutch tulips or London houses in the 1980s with this thought: "Unless and
until Bitcoin can be used to buy a sandwich, or be accepted by your friends
when you pay them back for a restaurant meal, then it is likely to remain
just a playground for geeks and gamblers."

 

Eight years on, it is still virtually impossible to buy a sandwich with
Bitcoin.

 

And why would you want to, when there's a good chance you'll be mocked a few
years later - as I've been for my transaction - for giving away an asset
that goes on to soar in value?-BBC

 

 

 

Rail services to come under unified state control

The government has announced the biggest shake-up in the UK's railways since
privatisation in the mid-1990s.

 

It will see the creation of a new state-owned body, Great British Railways
(GBR), which will set timetables and prices, sell tickets in England and
manage rail infrastructure.

 

After years of complaints, it aims to offer improved services, better value
tickets and more accountability.

 

But private operators will still be contracted to run most trains.

 

Next month, flexible season tickets will be available for some people who
commute two or three times a week.

 

Ticket reform

The reforms follow the chaotic introduction of new timetables in May 2018
and years of complaints about the "fragmented" franchising system, which
will now be scrapped.

 

Under the changes, GBR will replace the current operator of infrastructure,
Network Rail, but is not expected to be established until 2023.

 

The government says the new system should look more like Transport for
London, with multiple operators under one brand, offering greater
accountability when things go wrong.

 

Keith Williams, the former boss of British Airways who led the review into
the reforms, told the BBC's Today programme: "What we've done here is listen
to what customers want out of rail and react to that.

 

"And that really is a more reliable punctual service and better
opportunities [when] buying tickets.

 

"There is an enormous opportunity here not only to simplify the way that
people buy tickets, but also to benefit from a retail environment which
gives greater flexibility in the way that fares are operated in the future."

 

A string of reforms will be brought in before the new body comes into
existence, including a "significant rollout" of more pay as you go,
contactless and digital ticketing on smartphones.

 

New flexible season tickets will offer savings on certain routes for people
who do not travel to work every day, reflecting the expected changes to
commuting patterns after the pandemic.

 

They are due to go on sale on 21 June for use seven days later, and will
allow passengers to travel on any eight days in a 28-day period.

 

'Confusion and over-complication'

The reforms are contained in a White Paper, based on the recommendations of
the review led by Mr Williams.

 

The plan was initially due to be published in autumn 2019, but was delayed
by the general election and the coronavirus pandemic.

 

Transport Secretary Grant Shapps, who also worked on the review, said the
railways had suffered from "years of fragmentation, confusion and
over-complication".

 

He added: "It's now time to kickstart reforms that give the railways solid
and stable foundations for the future, unleashing the competitive,
innovative and expert abilities of the private sector, and ensuring
passengers come first."

 

Prime Minister Boris Johnson said the plan would "deliver a rail system the
country can be proud of".

 

Since the privatisation of British Rail 25 years ago, rail reviews, reforms
and reorganisations have come and gone with a steady regularity, operating
to a frequency something akin to an elongated Olympic Games.

 

Successive administrations have felt the need to tinker with the original
architecture of the system, which gave train operators a substantial degree
of freedom to set fares, lease new trains and change service patterns.

 

Since Railtrack collapsed in 2001, however, the general direction of travel
has been towards more control at the centre.

 

In 2004, the then transport secretary Alistair Darling considered a plan to
unite the two big forces in the industry, Network Rail and the Strategic
Rail Authority, into a single unit, to be called National Rail. This plan
finally makes that idea concrete and reverses one of the pillars of the
original privatisation, the separation of management of the track and the
trains.

 

Great British Railways will have its say over Network Rail (the owner of the
track and major stations) and will award concessions to private companies to
operate services. If the plan is followed through and properly implemented,
it should see an end to the squabbling over who is to blame when the trains
are late, dirty or overcrowded. Everything will be the problem of a single
body.

 

That concentration of power will also be a potential Achilles' heel. One of
the successes of the privatisation was the freedom for train companies to do
new things - a freedom that was a partial factor in the remarkable revival
in passenger numbers in the past two decades.

 

If that spirit of innovation is lost - and if civil servants and politicians
endlessly interfere in the working of the new authority - the railways risk
sliding into stagnation. The fear among railway executives is that the
Treasury, having had to pay dearly to support services during the pandemic,
will seek to claw back spending, leading to cuts in services.

 

The publication of the plan comes eight months after the government scrapped
the system of rail franchising, which had been in force since privatisation,
and unveiled plans to extend support for train firms.

 

After a drop in passenger numbers during the pandemic as more people worked
from home, taxpayer money was used to plug the shortfall in ticket revenues.

 

The government's reform plan was welcomed by the rail regulator, the Office
of Rail and Road (ORR).

 

Its chief executive, John Larkinson, said the ORR would "continue to work
closely with government and industry to facilitate reform and reshape rail
for the future".

 

Andy Bagnall, director general of the Rail Delivery Group, which represents
train operators, said the proposals could deliver "the biggest changes in a
generation".

 

"Train operators called for a guiding mind and Great British Railways will
help to bring the whole industry together," he said.

 

"To deliver for passengers and freight customers, it must have the
independence to hold the operators of both tracks and trains to account
equally. Crucially, it needs to allow operators to put their customers at
the absolute forefront of decision-making," he added.-BBC

 

 

Wells Fargo: US bank set to offer crypto fund to rich clients

Another big US bank is set to introduce a crypto-currency fund, despite the
recent fall in value of Bitcoin.

 

Wells Fargo said on Wednesday it would introduce professionally managed
funds for its more wealthy clients.

 

In a report, its investment institute said the risks associated with digital
currencies meant it would favour "qualified investors".

 

It came as the price of Bitcoin fell after China said it was imposing fresh
curbs on cryptocurrency.

 

It took the value of the digital coin below $34,000 (£24,030) for the first
time in three months on Wednesday, spurring a sell-off of other digital
currencies including Ethereum and Dogecoin.

 

Bitcoin price chart

In a report titled "The investment rationale for cryptocurrencies", the
Wells Fargo Investment Institute (WFII) said it viewed digital coins as an
alternative investment.

 

"WFII believes that crypto-currencies have gained stability and viability as
assets, but the risks lead us to favour investment exposure only for
qualified investors, and even then through professionally managed funds," it
said.

 

It is the latest in a series of big US banks to start trading in Bitcoin as
the crypto-currency becomes more mainstream.

 

In March, investment bank Morgan Stanley became the first big US financial
institution to offer wealth management clients with a "high-risk tolerance"
access to Bitcoin funds.

 

JPMorgan Chase is also preparing to let some select clients invest in
actively managed funds for the first time, the trade publication Coindesk
reported in April.

 

Bitcoin fell on Wednesday after China decided to ban financial institutions
and payment companies from providing services related to crypto-currency
transactions.

 

It also warned investors against speculative crypto trading.

 

Bitcoin had already suffered sharp falls last week after Elon Musk said he
would no longer accept payments for Tesla cars in the currency.-BBC

 

 

 

Slide in cryptocurrencies, other high-fliers, comes amid looming U.S.
inflation worries

A selloff in cryptocurrencies, high-growth stocks and other high-flying
assets may be signalling a more cautious outlook among market participants
after a stretch of rampant exuberance, investors and analysts said.

 

Few believe the bull run that broader U.S. stock markets have experienced
over the past year is set for a reversal. Still, concerns are growing that a
looming rise in inflation combined with a potential peak in U.S. economic
growth could force investors to cut down on risk in their portfolios,
hurting many of the assets that shot higher earlier this year.

 

"Higher-risk assets, whether in the form ... of cryptocurrencies or the more
speculative growth stocks, are seeing their multiples taken down markedly as
investors begin to reassess what impact the potential for inflation will
have," said David Mazza, managing director at Direxion.

 

Wednesday's selloff zeroed in on many of the assets that rallied the most
over the last year. Bitcoin dropped to its lowest levels since January read
more , while Cathie Wood's ARK Innovation ETF - the top-performing U.S.
equity fund in 2020 - slid another 2.5% to leave it down 15.3% since the
start of the month. Bitcoin is up 34% for the year to date while ARK is down
17.2%.

 

 

Energy stocks in the S&P 500 (.SPX) fell 2.5%, dampening their rally of more
than 30% since January, while the FANG Index - a measure of large technology
names that led the market higher last year - rose 0.7%. It remains up just
3.5% since the start of the year. The S&P 500 is up 84% from its March 2020
lows and has risen 9.9% this year.

 

Minutes from the Federal Reserve's latest meeting, released on Wednesday
afternoon, showed that a "number" of Fed officials appeared ready to
consider changes to monetary policy based on a continued strong economic
recovery - a potential negative for risk assets that have thrived from
unprecedented stimulus. That meeting, however, took place before the release
of April's anemic job data. read more

 

"They were thinking about thinking about tapering (quantitative easing)
asset purchases if the economy continues on this rapid recovery and they get
closer to meeting the dual mandates," said Kathy Bostjancic, chief U.S.
financial economist at Oxford Economics. "Our view is they probably
pre-announce tapering at Jackson Hole in August and they actually start to
taper back the asset purchases at the beginning of next year."

 

Fed officials have pledged to keep their ultra-loose, crisis-fighting
policies in place, betting that the unexpected surge in consumer prices last
month stems from temporary forces that will ease on their own.

 

 

"We think there's still more room to run but that doesn't mean that there
wasn't froth in certain parts of the market," said Brian Jacobsen, a senior
investment strategist for the Multi-Asset Solutions team at Wells Fargo
Asset Management. "This bull market came out of the gate really quickly and
you are bound to get some muscle cramps along the way."

 

Concerns over inflation - or at least how investors will react to signs of
rising consumer prices - have proliferated in recent weeks.

 

Fund managers in a survey from BoFA Global Research released on Tuesday
named inflation as the top risk to markets, while BlackRock Inc (BLK.N), the
world’s largest asset manager, said a market overreaction to an inflation
overshoot is a risk accompanying its recommendation of an overweight equity
position.

 

“The recent sell-off in tech shares, despite strong first-quarter earnings,
illustrates the potential for hitting air pockets as the economic restart
unfolds,” the firm said earlier this week. “This may create opportunities in
a sector benefiting from structural trends.”

 

Mazza, of Direxion, expects that inflation worries will be short-lived,
leaving some of the growth names that have sold off in May more attractive
over the next 12 months.

 

The Russell 1000 Value index (.RLV), for instance, is up 15% for the year to
date, while the Russell 1000 Growth index (.RLG) is up 2.6%.

 

"It's very difficult to see a situation where value continues to outperform
growth by the same extent through 2022," he said.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

Stocks struggle as taper talk, crypto crash put markets on edge

Stock markets struggled for traction on Thursday after a jittery session on
Wall Street where cryptocurrencies crashed and a hint of tapering talk from
the U.S. Federal Reserve drove selling in the bond market and lifted the
safe-haven dollar.

 

Benchmarks in South Korea (.KS11) and Japan (.N225) were either side of flat
in morning trade and Hong Kong's Hang Seng (.HSI) fell about 0.8% to pull
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)
down by 0.2%.

 

Bitcoin , which plunged as much as 30% to $30,000 overnight, was struggling
for support around $36,000. U.S. stock futures , wobbled just below flat.

 

Commodities also fell, Treasuries nursed losses while the dollar held
overnight gains.

 

Fed minutes published on Wednesday said "a number" of officials thought that
if the recovery holds up, it might be appropriate to "begin discussing a
plan for adjusting the pace of asset purchases". read more

 

"This is very much the market view, really," ING economist Rob Carnell said
on the phone from Singapore, with traders expecting strong hints over summer
that the taper is coming and that policy support could start to ease in
December.

 

"This is taking us to where we think we're going to go, and perhaps this
removes a little bit of uncertainty around that - so you get a slight
increase in bond yields and the dollar rallying a little bit."

 

The yield on benchmark 10-year U.S. Treasuries rose 4.1 basis points
overnight to 1.6830% and dipped to 1.6676% early in Tokyo trade. The dollar
scraped itself off a four-month low to hover around $1.2183 per euro .

 

The dollar also rose through its 20-day moving average against the yen,
Aussie and kiwi. It last bought 109.17 yen and the dollar index was last at
90.149.

 

On Wall Street overnight the S&P 500 (.SPX) closed 0.3% lower and the Nasdaq
(.IXIC) was flat, something of a recovery after each dropped more than 1.6%
during the session.

 

CRYPTO CRUSHED

 

The trigger for sharp falls in bitcoin, ether and other cryptocurrencies
appeared to be China's move on Tuesday to reinforce strict curbs on crypto
trading by barring financial institutions from providing transaction
services. read more

 

Traders said the huge run-up in prices for the asset class in recent months
meant that gravity also probably played a role, as well as Tesla boss Elon
Musk's apparent cooling on bitcoin over the amount of energy consumed in
processing transactions. read more

 

Outages at several major trading platforms during the maelstrom, which also
set ether tumbling nearly 50%, also did little to inspire confidence.
Although well above overnight lows, ether and bitcoin remained under
pressure on Thursday.

 

"It's not just crypto – although that is the poster child of this movement –
but SPACs, recent IPOs, ARK Innovation and Tesla, to name a few, have all
lost their bid," said Chris Weston, head of research at brokerage
Pepperstone in Melbourne.

 

"For me, the overriding factor is liquidity and the timing of lower
liquidity and that is having huge ramifications - we are debating, not just
a slower pace of central bank asset purchases (QE), but when QE comes to an
end."

 

Elsewhere industrial commodities fell sharply on Thursday after China said
it would strengthen its management of supply and demand to curb unreasonable
rises. read more

 

Dalian iron ore futures fell 7% in early trade and coal futures fell 8% ,
triggering a downside limit.

 

Crude oil came off overnight lows but remained under pressure on worries
about fresh COVID-19 curbs in Asia crimping demand and about the U.S. rates
outlook.

 

Brent crude was last steady at $66.70 a barrel and U.S. crude at $63.29.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

Every second counts as startups race to deliver fresh food

In a railway arch in south London, pickers and packers are in a race against
time: to get fresh food to the door of Alastair Dean within 15 minutes of
his order hitting an app.

 

Their company Weezy is part of a new army of European rapid delivery firms
that, backed by billions of dollars of venture capital from Europe, the
United States, China and Japan, are using electric bikes and scooters to
deliver groceries.

 

They have placed a bet that demand for convenience will drive the next
transformation in food retail and help crack the vice-like grip of the big
supermarket stores which, in Britain, supply 95% of the country's groceries.

 

The boss of one of Europe's biggest supermarkets, speaking on condition of
anonymity, told Reuters that far from dismissing the new services as hype,
they could pose "death by a thousand nibbles" to the dominant chains such as
Tesco and Sainsbury's, Aldi and Lidl.

 

Weezy enables shopper Dean, a 32-year-old finance worker, to select locally
produced goods for delivery to his door for a fee of 2.95 pounds ($4.18).
When ordering shaving foam he will throw in salad leaves for dinner.

 

"Time is precious in the 21st century," he said on his doorstep in the
affluent London district of Pimlico. "The world of going and doing your
weekly shop, like I remember growing up – it's all completely changed. We're
always last minute."

 

The combination of cash, tech and the surge in online delivery in a pandemic
has shaken the kaleidoscope for the grocery industry, creating new players,
challenging others and providing a new frontier for traditional
supermarkets.

 

The trend has taken root across European cities, where e-commerce giant
Amazon has yet to properly gatecrash the grocery market.

 

In central London, residents have been bombarded with offers from at least
four new rapid services.

 

The likes of Weezy, Getir, Dija and Gorillas store goods from major
suppliers and local producers in urban mini-fulfilment centres to supply
customers at prices similar to supermarket convenience shops.

 

Holding up to 2,000 items instead of the more than 20,000 in supermarkets,
mini centres built for delivery rather than customers can be picked quickly
and located in cheaper areas.

 

Weezy co-founder Alec Dent said orders had jumped since Britain started to
unlock from COVID restrictions and people's lives became more complicated.
Once they know they can rely on 15-minute delivery, he said, anything longer
seems too slow.

 

Many start by ordering snacks and alcohol before adding sourdough bread,
vegetables, meats, herbs, fresh pasta, condoms, games and COVID tests, to be
delivered in brown paper bags.

 

"The industry is huge. It's a 200 billion pound market, and it's rapidly
moving online and rapidly moving in the direction of convenience," Dent said
of the British grocery sector.

 

AGGRESSIVE MOVES

 

Turkey's Getir has launched aggressively in London, with its purple and
yellow scooters seen on roads and billboards, after it raised $300 million
in March, valuing it at $2.6 billion.

 

Berlin-based Gorillas has a valuation of more than $1 billion after it
raised $290 million, including from China's Tencent (0700.HK). "I strongly
believe our business model is going to be the new normal," Chief Executive
Kagan Sumer told Reuters.

 

U.S. operator Gopuff, valued at nearly $9 billion, has bought Fancy to
expand in Britain and Europe, while Dija has been backed by Creandum, which
invested in payments firm Klarna and Spotify.

 

Food-delivery riders from Deliveroo (ROO.L) and Uber Eats (UBER.N) will also
bring groceries from established supermarkets.

 

The different services are testing minimum order fees and delivery charges,
or no restrictions at all, to see what works.

 

While the model has high costs and low margins, its riders are classed as
workers, giving them basic rights and making the groups less vulnerable to
future regulation. In full control of the supply chain, they can also
deliver at speed.

 

The challenge remains stark however, as seen in the finances of
German-based, 26-billion-euro Delivery Hero (DHER.DE).

 

Present in over 50 countries, the group has a long-term core-earnings margin
target of 5 to 8%. However its rapid commerce division traded at a margin of
minus 33% in 2020, its first year of operation.

 

Chief Executive Niklas Ostberg said all the emerging services were trying to
find new ways to make the already razor-thin margin business of food retail
work.

 

"It's no secret that this is very tough economically, but we have found a
way to make it work," Ostberg told Reuters ahead of the launch of its fast
commerce service in Germany.

 

Quick delivery operators say that low rents, ordering direct from suppliers
and the option for brands to pay to promote goods on an app all help.

 

FACING THE FUTURE

 

With so much activity, the supermarkets are watching and know they must
respond in time.

 

Online delivery has always posed a challenge, as supermarkets make more
profit when customers browse instore. But the pandemic turbocharged the
trend, and improved the economics of delivery. A record 16% of UK grocery
sales were made online in January.

 

Now they risk losing out to ultra fast delivery, or confronting the cost of
reconfiguring operations - most online orders are still picked by staff
instore alongside traditional shoppers, an option that does not work when
time is key.

 

"Shareholders would say 'if I want to invest in immediate delivery, I'll
just invest direct'," said one senior executive at a major British
supermarket of the challenge ahead.

 

Tesco, Britain's biggest supermarket, is hedging its bets. While it is
trialling its own one-hour delivery with a 5 pound delivery fee, it is also
building a handful of automated urban fulfilment centres at the back of
stores just for online orders.

 

Ocado, an online pioneer which runs out-of-town warehouses and trucks to
stock the shelves of middle-class Britain, has partnered with a courier firm
to test faster orders in London.

 

Co-founder Tim Steiner questioned however just how many people would need
instant delivery. "I'm not saying it's a fad, but I think that some people's
expectations of the size of the market are massively out of whack," he said.

 

Still, the rapid delivery groups say the initial reaction has been strong,
and there is a road to profitability after consolidation. Shopper Dean is
sold.

 

"We have a small kitchen with a small fridge," he said. "The convenience
thing is huge. Now we can finish work and fifteen minutes later we're
cooking our evening meal."

 

($1 = 0.7052 pounds)

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Big pharma and private equity seek healthy returns in Europe's east

In the race to supply vaccines to end the COVID-19 pandemic, U.S. drug
developer Novavax turned to emerging Europe to speed up production with a
pair of deals that endorsed a growing trend for consolidation in the region.

 

As part of a doubling in merger activity, buoyed by a combination of private
equity and big pharma, Novavax (NVAX.O) bought the Praha Vaccines factory
near Prague in a $167 million transaction last May. It followed up by
partnering with Polish biotech company Mabion (MABP.WA) in March. read more

 

Novavax decided the Praha Vaccines factory in Bohumil, Czech Republic, was
the best solution to expanding vaccine production in Europe, spokeswoman
Laura Keenan said, adding: "Talent in the region was a key consideration."

 

The pharmaceutical industry focused around Czech Republic, Hungary and
Poland is dwarfed by that of nearby Germany, but industry insiders and
analysts see scope for growth based on moderate costs and an expectation of
higher healthcare spending, as well as a scientifically educated workforce.

 

For private equity, there is the lure of high returns, while big pharma can
reduce costs by buying growing firms that have carried out large amounts of
research and the location in the European Union means widely recognised
standards are met.

 

The total value of inbound deals with disclosed value in the healthcare and
pharmaceuticals industry in central and eastern Europe doubled to 1.9
billion euros ($2.31 billion) in 2020 from 932 million euros a year earlier,
a report from consultancy Mergermarket and Mazars found.

 

"Even without COVID-19, the region's demographic and economic trends point
towards activity in the sector," the report said.

 

"As the population ages and incomes rise, investors will continue to see a
clear upside in consolidating the industry to cut cost and gain scale."

 

MEDIEVAL PHARMACY MEETS THE MODERN AGE

 

A focal point of the activity has been Zentiva (ROSCD.BX), a Czech company
that traces its roots back to a medieval Prague pharmacy and last year
acquired Alvogen's central European business for undisclosed terms from
private equity firm CVC Capital Partners.

 

"For sure, consolidation in our region is inevitable," said Krzysztof
Krawczyk, a partner at CVC.

 

For the drug companies, small innovators are of particular appeal.

 

"It is easier for companies with strong shares in mainstream market segments
to buy an innovative biotechnology company and thus skip the research and
development phase and quickly expand their product range," Krawczyk said.

 

Adam Pietruszkiewicz, a board member at Mabion, and also a partner at
private investment company Twiti Investments, took a similar view.

 

"Most likely, the more of these companies and start-ups that appear, the
more transactions there will be," Pietruszkiewicz said.

 

POLISH BIOTECH

 

Upstart biotech companies in Poland – eastern Europe's biggest economy – are
attractive targets, investors and companies say, and also ambitious to grow
themselves.

 

Selvita based in Krakow, southern Poland, completed its first international
acquisition in January with a $38 million deal for Croatian Fidelta - owned
by Belgium's Galapagos (GLPG.AS) in January.

 

Although Selvita has drawn investor interest, it plans to remain a buyer
rather than seller, executive vice president Milosz Gruca said.

 

He too predicted a combination of bigger drug companies and private funds
would step up the pace of acquisitions of emerging companies.

 

"We have many new, young and successful innovative companies, which are
shaping the new perspective for the CEE region and the way it is seen by
investors," Gruca told Reuters.

 

"Big pharma companies are interested in the programmes these smaller firms
are bringing to the market. These companies will also be subject to
potential acquisitions or partnering deals."

 

POTENTIAL TO GROW

 

So far, Sanofi's (SASY.PA) 1.9 billion euro sale of Zentiva to U.S. private
equity group Advent in 2018 is one of the biggest deals in the region.

 

Since then Zentiva has made two more acquisitions in emerging Europe and is
scouring the region for others as it builds up its branded generics
business, the director for the company's CEE business Hacho Hatchikian told
Reuters.

 

He said Zentiva was targeting late-stage assets and openly exploring all
options in biosimilars, or cheaper versions of biologic drugs made from
living organisims.

 

The value of drugs sold in the 38.5 billion-euro German market is still more
than three times that in the Czech, Hungarian and Polish markets combined,
figures from the European Federation of Pharmaceutical Industries and
Associations show.

 

But the gap is expected to narrow as healthcare standards in eastern Europe
converge with those of the West.

 

"The CEE markets provide a significant growth prospect as they follow a
clear convergence trajectory to the Western European (and U.S.) standards
both in treatment options and healthcare spending," Zentiva's Hatchikian
said.

 

($1 = 0.8228 euros)

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

Ford Motor, SK Innovation to announce EV battery joint venture -sources

Ford Motor Co (F.N) and South Korean battery maker SK Innovation (096770.KS)
are set to launch a battery joint venture in the United States to support
the ramp-up of the No. 2 U.S. automaker's electric vehicle rollout, two
people familiar with the matter said.

 

A memorandum of understanding about the joint venture will be announced on
Thursday, the sources, who asked not to be identified, told Reuters. The
deal may eventually include a jointly owned plant to make battery cells for
use in rechargeable EV batteries, the sources said.

 

Ford declined to comment other than to say SK is a valued supplier, but
scheduled a conference call for 9 a.m. ETon Thursday to provide "an update
on Ford batteries." SK Innovation said in a statement it does not comment on
specific projects for reasons of client confidentiality.

 

Talks around the joint venture picked up speed last month after SK
Innovation agreed to pay $1.8 billion to LG Energy Solution, a wholly owned
subsidiary of LG Chem Ltd (051910.KS), to settle LG's accusations of trade
theft by its rival, one of the sources said. read more

 

The dispute, which the administration of U.S. President Joe Biden had been
on the verge of settling with a ruling, had put SK Innovation's battery cell
plant in Georgia at risk. That plant, which is under construction, will
serve Ford and Germany's Volkswagen AG (VOWG_p.DE).

 

Biden on Tuesday called for government grants for new battery production
facilities as part of a $174 billion EV proposal during a visit to a Ford EV
plant in Michigan. He also referenced his administration's role in brokering
the settlement between SK and LG Chem. read more

 

South Korean President Moon Jae-in is scheduled to arrive in Washington on
Thursday for a four-day stay that will include a visit to SK's Georgia
plant. The Ford-SK joint venture will highlight close U.S. and South Korean
ties on EVs, a key priority for Biden.

 

SK Innovation is expected to complete the Georgia plant's construction later
this year, and is building a second facility next door that is expected to
start battery production in 2023. The company has invested $2.6 billion in
Georgia.

 

SK Innovation, with battery production sites in the United States, Hungary,
China and South Korea, has an annual capacity of about 40 gigawatt-hours
(GWh) of batteries. It aims to ramp up to an annual capacity of about 125
GWh of batteries in 2025, which can power about 1.8 million electric
vehicles.

 

A deal with SK may have Ford taking a similar path as rival General Motors
Co (GM.N), which has a battery joint venture with LG Energy that is building
plants in Ohio and Tennessee. read more

 

The status of these battery plants is key to the United Auto Workers union,
which represents GM and Ford's U.S. hourly plant workers. The union has
pressed the automakers to allow workers at these plants to unionize, an
approach Biden has backed.

 

Ford is pushing to electrify key models in its lineup, including the Transit
van late this year and F-150 pickup mid-2022, and already sells the
all-electric Mustang Mach-E SUV. It has said it will invest $22 billion in
electrification through 2025. read more

 

The Dearborn, Michigan-based company has repeatedly stepped up efforts
around batteries, with Chief Executive Jim Farley stating several times the
automaker was looking at making its own batteries. Last month, after Ford
reported quarterly results, he said things have changed as the automaker has
boosted its EV volumes.

 

"We've totally entered a different zone ... so we've already made the
decision to vertically integrate the company," he said on a conference call
with analysts.

 

"We're now building motors, e-axles now, we've been writing our own battery
management software for quite some time, and now it's time for us to lock in
on the latest technology and to have a secure cell production relationship."

 

While saying Ford had no news to announce, Farley added, "To be competitive
in this industry, a major brand like Ford will have to vertically integrate
all the way through the system."

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

EasyJet to fly 15% of Q3 pre-pandemic schedule, post 701 mln stg H1 loss

British airline easyJet (EZJ.L) said it would fly about 15% of its
pre-pandemic schedule in its third-quarter, with an expectation it would
increase capacity from June onwards, after posting a first-half loss of 701
million pounds ($990 million).

 

"We have the ability to flex up quickly to operate 90% of our current fleet
over the peak summer period to match demand," it said on Thursday.

 

The headline pretax loss for the six months to the end of March, was towards
the upper end of its range of 690 million to 730 million pounds.

 

($1 = 0.7087 pounds)

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

Nigeria to Benefit From UK's £22m Cyber Capacity Building Fund

The British Foreign Secretary, Dominic Raab, has announced £22 million of
new investment to build cyber security resilience in developing countries
and globally, particularly in Africa and the Indo-Pacific.

 

In a speech delivered at the National Cyber Security Centre's CyberUk
conference recently, Raab announced that the UK would spend about £3 million
of the £22 million funding to help Interpol set up a new team that will
fight cybercrime in Africa. Nigeria was listed as part of the African
countries to benefit from the fund.

 

The new Interpol desk would work across Nigeria, Ethiopia, Ghana, Kenya and
Rwanda, creating a regional strategy to support joint operations against
cybercrime, and strengthen African states' capability to combat the crime
and those behind it.

 

Since 2018 the UK has been actively partnering Nigeria to support the
development of cyber security policies and strategies. Both countries share
an ambition to create a safe and secure digital community that provides
opportunities for Nigerian citizens and promotes peaceful engagement in
cyberspace that enhances national prosperity.

The launch in February this year by President Muhammadu Buhari of the new
Nigerian National Cyber Security Policy and Strategy (NCPS) 2021, followed
well-targeted UK-funded technical assistance through the UK's Digital Access
Programme.

 

That programme has also funded a project to up-skill Small Medium and
Enterprises (SMEs) across Nigeria on cyber basics, which was delivered
through the NGO CyberSafe Foundation.

 

The UK Department of International Trade (UK DIT) recently also hosted a
virtual event for Nigerian stakeholders interested in cyber security for the
financial services sector.

 

According to a statement released by UK's Embassy in Nigeria, "The current
development is a part of the UKs ambition to build global cyber resilience.
We see Nigeria and Africa as a whole as an important partner in this.

"With some of the fastest growing economies in the world, Africa has become
a target for opportune cybercriminals. By creating a central coordination
desk within Interpol that law enforcement across Africa can use, the UK
hopes to improve collaboration across borders to advance intelligence
sharing, and ultimately stop the perpetrators of cybercrime in Nigeria and
across Africa."

 

Speaking at the conference of security experts, the Foreign Secretary
outlined that the UK wanted to act as a responsible cyber power, as well as
working with other countries to shape cyberspace in line with UK's values.
Raab said the UK was also making around £22 million of new investment
available to support capacity building in cyber security for developing
countries and globally.

 

Delivering the speech, Raab said: "We are working with like-minded partners
to make sure that the international order that governs cyber activity is fit
for purpose.

"Our aim should be to create a cyberspace that is free, open, peaceful and
secure, which benefits all countries and all people.

 

"We want to see international law respected in cyberspace, just like
anywhere else. And we need to show how the rules apply to these changes in
technology, the changes in threats, and the systemic attempts to render the
internet a lawless space."

 

Also, Interpol's Secretary General, Jürgen Stock said: "With more than 4.5
billion people online, more than half of humanity is at risk of falling
victim to cybercrime at any time, requiring a unified and strong response.

 

"The UK support for Interpol's cyber initiative in Africa underlines its
commitment to this fight and will be an important piece of the global
security architecture to combat cybercrime."

 

Cybercrime is one of the most prolific forms of international crime, with
damages set to cost the global economy $10.5 trillion annually by 2025,
according to recent report.-This Day.

 

 

 

Nigeria's National Air Carrier to Begin Operation in 2022 - Sirika

The aviation minister says the plan was stalled by COVID-19.

 

Nigeria will begin the operation of a new national air carrier in the first
quarter of 2022, the Minister of Aviation, Hadi Sirika, announced Wednesday.

 

Mr Sirika said this while speaking to journalists after the Federal
Executive Council presided by Vice President Yemi Osinbajo in Abuja.

 

"In this 2021, we will try to do all the needful and probably we intend to
start operations somewhere around first quarter 2022," he said.

 

He said the emergence of COVID-19 delayed the conclusion of plans as well as
the takeoff of the project which he said the federal government is still
committed to.

 

He said the aviation ministry will submit a proposal to the council in two
weeks.

 

Mr Sirika said the national carrier was expected to take off initially this
year, as an economic necessity for the country with the size of the
population, the vantage geographical location, and other natural factors.

"It is still in top gear, we are coming back to Council, hopefully within
the next two weeks, to present the memo on the national carrier," he said.

 

"We went to Council to approve the outline business case for the carrier and
then the Council raised some questions and asked us to go and file the memo
again and bring it back.

 

"So, once it comes back and the outline business case is approved by
Council, then, of course, we will now go to the full business case, which is
now going to the market and then establishing the national carrier.

 

"It was our intention to have a national carrier running in 2021, which is
this year. Unfortunately due to COVID, which took the greater part of last
year, since March last year, activities are almost impossible.

 

"Of course, for obvious reasons, we now have access to equipment, that they
will come faster to us, deliveries of the aircraft will be faster, perhaps
even the rates might be cheaper and so on, and so forth."-Premium Times.

 

 

Lesotho: Poultry Import Ban Continues

Lesotho's ban on the importation of poultry products from parts of South
Africa which have recorded cases of the deadly avian influenza is
continuing, the government has said.

 

The government this week said it does not have the capacity to deal with the
deadly avian influenza in the event of local transmissions.

 

The highly pathogenic avian influenza (HPAI) broke out in a Gauteng
commercial chicken farm last month and has since spread out to other parts
of the country including the North West province.

 

The South African Department of Agriculture, Land Reform and Rural
Development (DALRRD) has said that affected farms have since been
quarantined, with control measures being implemented. DALRRD this week also
said no human transmissions have so far been recorded, therefore, the
transmission risk to people is low.

 

And in response to the outbreak, Lesotho on 16 April 2021 joined other
countries in banning poultry and poultry products from Gauteng.

Imposed last month, the ban is continuing although other countries that
import from the same source have started lifting it.

 

The director of the department of livestock services Keneuoe Lehloenya this
week said the move was meant to avoid transmission into Lesotho.

 

"To minimise the risk of introduction to Lesotho, the department of
livestock services has instituted the following measures with immediate
effect:

 

Banning importation of poultry and poultry products from Gauteng with
immediate effect,

 

Importation of poultry and poultry products from the rest of South African
provinces should strictly be from HPAI free compartments,

 

Import permits from poultry and poultry products will only be issued at the
department of livestock services in Maseru.

 

All permits issued before or on 14 April, which were authorising importation
of poultry and poultry products from Gauteng Province are revoked," Dr
Lehloenya said.

Relebohile Mahloane, the director general of veterinary services, in the
Agriculture Food Security and Marketing ministry this week told the Lesotho
Times that Lesotho was closely monitoring developments around the outbreak.
He said they have so far not received any information warranting the lifting
of the ban.

 

"The ban on poultry and poultry products from Gauteng will continue until
further notice. We are also assessing other areas as the outbreak has spread
out.

 

"We are working hand in hand with our South African counterparts and they
are regularly updating us on what is going on that side."

 

Dr Mahloane said Lesotho would have no economic muscle to combat the avian
influenza if it were to enter the country.

 

"With the outbreak spreading out to more parts of South Africa such as
Potchefstroom in the North West, we had to impose the ban as we would not
have the economic muscle necessary to fight the disease in the event of an
outbreak locally. Prevention is our biggest weapon against this disease," Dr
Mahloane said.

He encouraged importers to purchase their inventory from approved producers
that have biosecurity measures in their facilities.

 

Lesotho Chamber of Commerce and Industry (LCCI) secretary general Fako
Hakane this week said the ban has not had a major negative impact on
business, with more emphasis on protecting the public from importation of
the influenza.

 

"We have not seen much disruption on the business side of things to date,
although we appreciate that authorities had to impose the ban to prevent
importing the disease and its associated problems."

 

Meanwhile, DALRRD has called on all farmers in South Africa to report
increases in mortality rates of their birds to state veterinarians.

 

"Everyone across the country is once again urged to treat any increase in
mortalities (deaths) of poultry and other bird species as potential avian
influenza, until proven otherwise.

 

"Following the outbreak of avian influenza on 13 April 2021, all the
neighbouring countries have lifted the ban on exports of live chicken and
unprocessed products, except Lesotho, which has banned exports from Gauteng.

 

"Hong Kong has notified DALRRD of a temporary suspension of the importation
of all poultry (carcass, parts and offal) products (including eggs) from the
affected municipalities within the Gauteng and North West," DALRRD
said.-Lesotho Times.

 

 

Kenya: IMF Wires Another Sh44 Billion Loan to Nairobi

A month after the IMF approved a Sh257 billion loan amid a public outcry
over Kenya's ability to repay the piling debt load, the lender has cleared a
second disbursement to Nairobi.

 

The International Monetary Fund (IMF) yesterday announced that its
executives had completed their pre-disbursement engagements with Kenyan
officials and approved another Sh44.2 billion tranche to be wired to the
Central Bank of Kenya (CBK), as part of the 38-month program.

 

This now brings the total amount advanced to Kenya in the first three months
of the facility to Sh77.9 billion.

 

The approval of the second batch, expected to hit Kenya's accounts by next
month, means that IMF is satisfied with the reforms being implemented by
Kenyan government since the loan is tied to some specific performance
conditions.

 

The lender said its staff team, led by Ms Mary Goodman, conducted a virtual
mission to Kenya from April 29 to May 14, 2021.

The team discussed progress on reforms and the authorities' policy
priorities within the context of the first review of Kenya's economic
program supported by the IMF's Extended Fund Facility (EFF) and Extended
Credit Facility (ECF) arrangements.

 

"The IMF staff team and the Kenyan authorities have reached a staff-level
agreement on the first review of Kenya's economic program under the Extended
Fund Facility (EFF) and Extended Credit Facility (ECF)," Ms Goodman said at
the conclusion of the mission.

 

Misuse of previous funds

 

"The agreement is subject to the approval of IMF management and the
Executive Board in the coming weeks. Upon completion of the Executive Board
review, Kenya would have access to SDR 285 million (equivalent to about
US$410 million)," she said.

 

The remaining loan is expected to be disbursed every six months after IMF
reviews.

Though IMF loans come relatively cheaper and are seen in international
capital markets as an endorsement of the credit worthiness of a country,
this latest loan from the IMF elicited opposition from Kenyans online, who
signed a petition asking the Bretton Woods institution to stop loaning the
country due to misuse of previous funds. Over 235,000 Kenyans had signed the
petition by yesterday.

 

Kenya received the first tranche of Sh33.7 billion in April as it signed on
a raft of painful structural reforms including reversal of tax reliefs,
removing tax exemptions on some consumer goods, restructuring of loss making
parastatals as well as dealing with the debt nightmare.

 

"The structural reform agenda during the first phase of the program will
address urgent policy needs. In the near term, key priorities will be
addressing challenges in SOEs (State Owned Enterprises) and governance," an
IMF document explaining the loan reads in part.

The parastatals lined up for structural reforms include Kenya Airways, Kenya
Airports Authority (KAA), Kenya Railways Corporation (KRC) and Kenya Power.

 

Others are Kenya Electricity Generating Company, Kenya Ports Authority and
the three largest public universities - Nairobi, Kenyatta and Moi.

 

Cushion blow to economy

 

IMF has commended Kenya's decisive policy actions to contain the Covid-19
outbreak saying authorities' actions helped cushion the blow to the economy
and maintained the momentum necessary to advance Kenya's economic reform
agenda.

 

"With the easing of the third wave of Covid-19 infections compared to high
levels seen into April, containment measures have been lifted. The
authorities have also launched a Covid-19 vaccination program, and the IMF
program is designed to support Kenya's efforts to accelerate and expand
vaccinations," IMF said in a statement on Tuesday.

 

The lender said the economic recovery should be sustained, although the
persistence of the pandemic suggests the pickup envisioned in 2021 will be
slightly less strong than anticipated.

 

IMF staff now project Kenya's economy to expand by 6.3 percent in 2021.

 

"The coronavirus shock has unfortunately also reversed some of the poverty
reduction gains Kenya achieved in recent years and debt remains elevated."

 

The lender says Kenyan authorities have taken strong efforts to achieve the
planned deficit path in a highly uncertain policymaking environment. Kenya
met the fiscal balance target at the end of March by a wide margin and had
fully implemented planned tax policy measures, although with continuing
pressures from the pandemic, tax revenue yields were slightly below
expectations.

 

IMF notes that the EFF and ECF program recognises the central importance of
having delivered on policy actions, even as tax yields remain uncertain in
the near term.

 

Fight corruption

 

"The Financial Year 2021/2022 budget proposal is being aligned with the
authorities' ambitious multi-year plan to reduce debt-related
vulnerabilities and it secures resources to support social spending."

 

Kenya is also required to develop a strategy to assess and manage risks to
the budget from state-owned enterprises (SOEs).

 

Kenya has also made commitments to increase transparency and fight
corruption. IMF says the country has promised to shortly publish an audit of
all Covid-related expenditures in Financial Year 2019/2020.

 

"They are also strengthening public accountability, and the public
procurement portal should soon publicise comprehensive information on all
firms that win procurement contracts, including the names of their
beneficial owners," the IMF said adding that the country also plans to adopt
a common payroll system at the national and county level to help contain
spending growth and limit the scope for corruption.

 

"The Central Bank of Kenya (CBK) plans to capitalise on the improving
outlook by setting out its strategy to strengthen Kenya's monetary policy
framework, supporting its flexible inflation targeting regime. The CBK's
continued close attention to financial sector soundness will reinforce
banks' ability to support the recovery."

 

The IMF team met with the National Treasury Cabinet Secretary Ukur Yatani,
the Central Bank of Kenya (CBK) Governor Patrick Njoroge, the Deputy Chief
of Staff, Executive Office of the President, Mrs. Ruth Kagia, the Principal
Secretary for the National Treasury Julius Muia, Deputy CBK Governor Sheila
M'Mbijjewe and other senior government and CBK officials.

 

The IMF team also met with representatives of the Parliamentary Budget
Office, the private sector, civil society organizations, and development
partners.-Nation.

 

 

 

 

 


 


 


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Skype:         Bulls.Bears 



 

 

 


 

INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

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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