Major International Business Headlines Brief::: 22 November 2021

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Major International Business Headlines Brief::: 22 November 2021

 


 

 


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

 


 

 


ü  Police charge Amazon India executives in drug smuggling case

ü  El Salvador Bitcoin city planned at base of Conchagua volcano

ü  Black Friday: Tech retailers fear supply chain delays will hit stock

ü  Oil and euro slip, markets on edge over COVID-19 curbs in Europe

ü  Japan working on release of oil reserves after U.S. request - sources

ü  Australian tycoon to help small publishers strike deals with Google, Facebook

ü  No stranger to turmoil, Dutch dealmaker Wynaendts set for Deutsche chair

ü  Move to hinterland triggers brain drain at Korea's mega pension fund

ü  Deutsche Bank poaches chief risk officer from Natixis

ü  KKR makes $12 billion approach to take Telecom Italia private

ü  Dollar solid, euro suffers on growing concerns about Europe's COVID situation

ü  Princes to paupers: India's salesmen face ruin as Ambani targets mom-and-pop stores

ü  Ericsson to buy cloud firm Vonage for $6.2 bln

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Police charge Amazon India executives in drug smuggling case

Senior executives at Amazon's business in India have been charged after two men allegedly used the website as part of a marijuana smuggling operation.

 

Last week, police in the central state of Madhya Pradesh arrested two men for allegedly trafficking 20kg of the drug to other Indian states.

 

Police say the men had traded cannabis on the site in the guise of selling stevia leaves, a natural sweetener.

 

Amazon says it does not allow the listing and sale of illegal products.

 

The company also said that it takes strict action against sellers found to be breaking its rules on illicit goods.

 

"The issue was notified to us and we are currently investigating it," Amazon added in a statement in response to the case.

 

State police said executive directors of Amazon India had been charged under the Narcotic Drugs and Psychotropic Substances Act.

 

This was due to "differences in answers in documents provided by the company in response to police questions and facts unearthed by discussion," police said in a statement.

 

Authorities did not say how many executives had been charged.

 

A total of 1,000kg of marijuana, worth about $148,000 (£110,000), was estimated to have allegedly been sold using the website.

 

The case is the latest legal issue being dealt with by Amazon's Indian business, which is also facing a competition investigation in the country.

 

Along with Flipkart, a subsidiary of US retail giant Walmart, Amazon India is being probed by regulators over claims that they gave preferential treatment to some sellers.

 

In September, Amazon also reportedly launched an internal probe after claims that one or more of its Indian employees had bribed officials.

 

In recent years, Indian authorities have significantly increased their efforts to crack down on both the trafficking and use of illegal drugs.

 

Many of the country's high-profile actors and television personalities have come under scrutiny from narcotics officials in the last year.

 

Last month, Aryan Khan, the 23-year-old son of Bollywood superstar Shah Rukh Khan, was arrested for allegedly taking recreational drugs at a party.

 

The case has been focus of intense media coverage in India.

 

He has denied the allegations against him.-BBC

 

 

 

El Salvador Bitcoin city planned at base of Conchagua volcano

El Salvador plans to build a Bitcoin city at the base of a volcano, with the cryptocurrency used to fund the project, its president has announced.

 

The city will be circular to represent the shape of a large coin and will be built in the south-eastern region of La Unión, President Nayib Bukele said.

 

The site would take advantage of the Conchagua volcano's geothermal energy to power Bitcoin mining, he added.

 

El Salvador recently became the first country to use Bitcoin as legal tender.

 

The move led to large-scale protests over fears the cryptocurrency would bring instability and inflation to the impoverished Latin American country.

 

Fear and excitement as Bitcoin becomes legal tender

El Salvador divided over Bitcoin legal tender law

What is Bitcoin?

Addressing a raucous crowd at a promotional Bitcoin event in the coastal town of Mizata late on Saturday, Mr Bukele said the planned new city would "include everything".

 

"Residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, rail - everything devoted to Bitcoin," the 40-year-old said.

 

The president, who appeared on stage wearing a baseball cap backwards, said that no income taxes would be levied in the city, only value added tax (VAT).

 

He said that half of the revenue gained from this would be used to "to build up the city", while the rest would be used to keep the streets "neat and clean".

 

Mining Bitcoin and other cryptocurrencies is done using sophisticated computers to solve complex mathematical problems. It is costly, difficult and takes up large amounts of energy.

 

Mr Bukele did not provide dates for construction or completion of the city, but said he estimated that much of the public infrastructure would cost around 300,000 Bitcoins.

 

One Bitcoin is currently trading at just under $60,000 (£45,000).

 

In September, El Salvador introduced the virtual currency as a legal tender, alongside the US dollar.

 

At the time, the government released a new digital wallet app, giving away $30 (£22) in Bitcoin to every citizen. More than 200 new cash machines were also installed across the country.

 

It presented the measure as a way to boost economic development and jobs, but El Salvador has been divided by the move.

 

It means that businesses, wherever possible, are now obliged to accept the digital coins as payment.

 

Bitcoin is a controversial currency in part because its value can fluctuate significantly - it has risen and fallen dramatically over the past year.-BBC

 

 

 

Black Friday: Tech retailers fear supply chain delays will hit stock

Technology retailers have warned that they may have insufficient stock to meet Black Friday demand due to delays in the supply chain.

 

The IMRG, the UK's Online Retail Association, said the industry had seen delays to stock arriving.

 

"The real pinch points are Asia," Andy Mulcahy, IMRG insights director, said.

 

Shortages of drivers and warehouse staff to send out purchased goods are also a worry for businesses, according to Mr Mulcahy.

 

Black Friday, which is less than a week away, is an annual event where retailers slash prices to entice shoppers ahead of the Christmas period.

 

It is common for retailers to buy a high number of units specifically for Black Friday, sometimes even months in advance.

 

However, if there is a delay of four to six weeks, retailers may find that they will need to change their promotional campaigns to focus on the stock they do have instead.

 

Mr Mulcahy said smaller businesses might find it harder to manage supply chain problems than larger companies.

 

"The real pinch points are Asia. Those with deeper pockets can find ways to work around it to ensure they have the stock in, but some will be in a much more difficult position," Mr Mulcahy said.

 

The UK has been hit by supply chain problems this year, with delays at UK ports as well as HGV driver shortages. But it is not alone.

 

Globally, consumers and businesses are facing shortages of products ranging from coffee to coal, and there have been warnings in the UK and the US that logjams at ports will lead to shortages at Christmas.

 

The retail association added that there would still be tech products to buy, although some items might not be as easily available.

 

Although a US tradition, Black Friday as a shopping phenomenon came to the UK in 2013 and is remembered for fights breaking out in some stores.

 

But since its inception, customers have increasingly turned to online shopping - a trend only bolstered by the pandemic.

 

In a normal year, retailers would expect the week in which Black Friday falls to be the most profitable of the year.

 

But last year, customers started shopping for Black Friday deals even earlier, with the number of parcels being delivered increasing sharply from the end of October.

 

-BBC

 

 

 

Oil and euro slip, markets on edge over COVID-19 curbs in Europe

(Reuters) - Asian stocks made a soft start to the week on Monday while oil and the euro were under pressure, as the return of COVID-19 restrictions in Europe and talk about hastened tapering from the U.S. Federal Reserve put investors on guard.

 

Oil futures skidded about 1% at the open, sending Brent crude and U.S. crude to seven-week lows of $78.05 and $74.76 respectively amid oversupply concerns.

 

 

Australian shares fell 0.4%, led by bank stock losses. Japan's Nikkei (.N225) was down 0.3% and MSCI's broadest index of Asia-Pacific shares (.MIAPJ0000PUS) was flat.

 

"There are question marks over the resilience of Europe and the European economy, exacerbated by protests and infection rates seen over the weekend," said Rodrigo Catril, a strategist at National Australia Bank in Sydney.

 

 

"It's hard to see the U.S. dollar coming to any harm against that backdrop," he said, a view further underlined by recent strong U.S. data and hawkish remarks from Fed officials.

 

The euro slipped 0.2% to $1.1280, close to a 16-month low. The common currency has been the prime mover in markets over recent sessions as investors wager on Europe's economy lagging well behind the U.S. recovery.

 

Safe-haven assets such as bonds, gold and the yen have also benefited from the recent cautious tone in financial markets.

 

On Monday, the yield on benchmark 10-year U.S. Treasuries was steady at 1.5634%. Gold found support at $1,845 an ounce. The yen hovered at 114.09 per dollar.

 

The risk-sensitive Australian dollar also fell to a seven-week low of $0.7227. South Korean stocks (.KS11) were an outlier as chipmakers followed U.S. peers higher with a brightening outlook for memory chip demand.

 

S&P 500 futures rose 0.2% after Wall Street indexes had slipped on Friday.

 

HAVEN PLAYS

 

Trade is likely to be thinned this week by Thanksgiving in the United States, but the cautious tone has traders once again monitoring COVID-19 cases in Europe as well as keeping an eye on central bank speakers, particularly in Britain and Europe.

 

Austria began its fourth lockdown on Monday - with neighbouring Germany warning it may follow suit - as protests against restrictions occurred across the continent. read more

 

Surveys due in Europe and Britain through the week are expected to show a downward trend in output and sentiment.

 

"The combination of COVID, growth and geopolitical concerns in the euro zone is supportive of safe-haven plays," said Rabobank's head of FX strategy Jane Foley.

 

"The recent break below the EUR/USD $1.15 level and the lurch downwards that followed has forced us to lower our forecasts for the currency pair further," she added, expecting it to sit around $1.12 by mid next year.

 

Meanwhile the U.S. economy has been surprising analysts with stronger-than-expected retail sales data and hot inflation in recent weeks. The focus this week is on prices and the labour market and on what the Fed might do about their strength.

 

Fed Vice Chair Richard Clarida said last week that quickening the pace of tapering might be worth discussing at December's meeting. Fed minutes are due on Wednesday.

 

China stood pat on its benchmark lending rates for corporate and household loans for a 19th month on Monday, as expected.

 

Central banks in South Korea and New Zealand are expected to hike rates this week, with swaps markets priced for about a 40% chance of a 50 basis point rate hike in New Zealand.

 

Bitcoin was under pressure after posting its worst week in two months last week, and last sat at $58,180.

 

The Thomson Reuters Trust Principles.

 

 

 

Japan working on release of oil reserves after U.S. request - sources

(Reuters) - Japanese officials are working on ways to get around restrictions on releasing national reserves of crude oil in tandem with other major economies to dampen prices, four government sources with knowledge of the plans told Reuters.

 

While Prime Minister Fumio Kishida signalled his readiness over the weekend following a request from Washington, the world's fourth-biggest oil buyer is restricted on how it can act with its reserves - made up of both private and public stocks - which typically can only be used in times of shortage.

 

One of the sources said the government was looking into releasing from the portion of the state-held stocks outside the minimum amount required as a legal workaround.

 

Officials are also looking at private stocks that are part of the national reserve, which some advisers argue can be released without restrictions, a second source said.

 

 

"We have no choice but to come up with something" after a request from the United States, a third source told Reuters. All of the sources declined to be identified because the plan has not been made public.

 

Chief Cabinet Secretary Hirokazu Matsuno said on Monday nothing had been decided, while Kishida said on Saturday the government was in the process of considering what it could do legally. read more

 

 

"We would have to change our law and that would take time. But some are arguing that private stockpiles can be released," said the second source.

 

"We need to expand the definition so they can be released," the official said, adding that no tender is imminent.

 

Traders said they had received no notifications of a tender.

 

Japanese private companies including refiners hold about 175 million barrels of crude and oil products as part of the Strategic Petroleum Reserve (SPR), enough for around 90 days' consumption, according to state agency Jogmec, which administers the SPR and handles releases after policies are decided.

 

Oil companies' reserves have been tapped during the 1991 Gulf War and following the 2011 earthquake and tsunami disasters. The state's portion in the SPR has never been used.

 

Brent crude was down slightly on Monday after prices plunged on Friday, a decline that was largely attributed to impending lockdowns in Europe rather than plans to release oil.

 

The Biden administration made the unusual request to other major economies to consider releasing oil from their strategic reserves after members of the Organization of Petroleum Exporting Countries and its allies repeatedly rebuffed its requests to speed up their production increases.

 

Citing government sources, the Yomiuri newspaper said Japan and the United States would coordinate an announcement of the release of oil reserves as early as this week.

 

High prices are starting to produced unwanted inflation and undermine recovery from the COVID-19 pandemic.

 

Japan's oil reserve held 145 days' worth of daily petroleum consumption at the end of September, according to official data, well above the minimum 90 days required by law.

 

Private-sector reserves total 90 days' worth, also exceeding the minimum 70 days' requirement.

 

The Thomson Reuters Trust Principles.

 

 

 

Australian tycoon to help small publishers strike deals with Google, Facebook

(Reuters) - Australian small publishers will get a leg up in their fight to secure licensing deals with Google and Facebook (FB.O) after the country's richest person said his philanthropic organisation would seek a collective bargaining arrangement for them.

 

The Minderoo Foundation, owned by Andrew Forrest, chairman of iron ore miner Fortescue Metals Group (FMG.AX), plans to help 18 small publishers by applying to the Australian Competition and Consumer Commission (ACCC) on their behalf so they can negotiate together without breaching competition laws.

 

The move was welcomed by publishers including the Star Observer, Australia's oldest LGBTQ title, which like some other small publishers did not get a deal with Facebook despite having secured a deal with Google (GOOGL.O).

 

Forrest's extra clout as well as the differing approaches to small publishers by Google and Facebook could build momentum for the Australian government to intervene and set fees.

 

 

Australia broke new ground with a law that has since March required the two tech giants to negotiate with Australian outlets for content that drives traffic and advertising to their websites.

 

But while most major news providers have secured deals, many small publishers have been left out in the cold, criticising Facebook in particular for its reluctance to take their calls.

 

Other publications that have secured deals with Google but not Facebook include TV broadcaster SBS, the main source of foreign language news, and the Conversation, which publishes public affairs commentary by academics.

 

The ACCC Chair Rod Sims has also on several occasions expressed concern about whether Facebook is approaching the law in the right spirit.

 

The law allows for Australia's government to set fees if negotiations between tech giants and news providers fail, but at present rejected companies have been left with little recourse as they wait for the government to review the law next March as planned.

 

The 18 small publishers being helped include online publications that attract multicultural audiences and focus on issues at a local or regional level, Emma McDonald, director of Frontier Technology, a Minderoo Foundation initiative, said in a statement.

 

Google reiterated that "talks are continuing with publishers of all sizes." Facebook said it "has long supported smaller independent publishers."

 

The foundation's move comes after ACCC late last month allowed a body representing 261 radio stations to negotiate a content deal.

 

($1 = 1.3826 Australian dollars)

 

The Thomson Reuters Trust Principles.

 

 

No stranger to turmoil, Dutch dealmaker Wynaendts set for Deutsche chair

(Reuters) - As head of Dutch insurer Aegon, Alexander Wynaendts led a complex European financial institution with staff around the world and a large U.S. presence during a turbulent decade, experience that should serve him well as the next chair of Germany's Deutsche Bank (DBKGn.DE).

 

On Friday, a committee of Deutsche Bank's supervisory board nominated Wynaendts to oversee Germany's largest lender from next year. The full board backed him at a meeting on Sunday, and shareholders will vote on his appointment in May. read more

 

If elected, the position will catapult Wynaendts, who is relatively unknown in Germany, into a role as one of the country's top bankers at a time when Deutsche is also steadying itself after a rocky decade with a view to a possible future merger.

 

Deutsche Bank Chief Executive Officer, in a note to staff on Sunday dislosing the full board's support for Wynaendts, called the Dutchman a true European and expert in international finance.

 

 

"Alex has experience in the fields that always made Deutsche Bank stand out: strong expertise in retail, corporate and capital markets business as well as in asset management – and a global network," Sewing said in the memo, which was seen by Reuters.

 

Just months into his tenure at Aegon (AEGN.AS), a company that in the mid-19th century helped the Dutch pay for funerals, Wynaendts, 61, navigated a 3 billion euro ($3.39 billion) state bailout and restructuring as the 2008 financial crisis took its toll.

 

Deutsche has lost billions of euros and faced huge fines, leaving regulators fearing it was on the brink of collapse five years ago. Although it has started reaping small profits under new leadership, there remains plenty of unfinished business.

 

The bank is currently working on a new strategy plan to be presented in March and has yet to make good on a promise to shed 18,000 jobs, while analysts say it is at risk of missing a key profitability target next year.

 

A major question for the wider industry is the consolidation of Europe's fragmented banks. Deutsche executives says they are working to make the lender strong for a potential future tie-up after it called off talks to merge with rival Commerzbank (CBKG.DE) in 2019.

 

Wynaendts - who oversaw a steady stream of acquisitions, disposals and partnerships from Canada to Mexico and Romania to China during a decade as the head of Aegon - is expected to embrace the strategy.

 

Aegon was involved in 87 M&A deals from 2012 through 2020, based on Refinitiv data.

 

He will also be well aware of the challenges of low interest rates and volatile markets, which hit Aegon's capital position near the end of his time at the company. Aegon's shares fell sharply during his tenure due to the financial crisis and the pandemic.

 

Wynaendts would take over from Austrian Paul Achleitner, another former insurance executive who previously worked at Allianz (ALVG.DE), when he steps down in May. Achleitner is credited with installing current CEO Christian Sewing to help turn the bank around after a number of management reshuffles during his decade at the helm.

 

Separately, Deutsche announced on Sunday that it had filled the role of chief risk officer, poaching Olivier Vigneron from France's Natixis. read more

 

($1 = 0.8859 euros)

 

The Thomson Reuters Trust Principles.

 

 

Move to hinterland triggers brain drain at Korea's mega pension fund

(Reuters) - Earlier this year, Lee left her fund management job at South Korea's national pension fund, the world's third-largest, fed up with long commutes between her home in Seoul and her office in Jeonju, 200 kilometers away.

 

For four years, Lee lived in a studio apartment in Jeonju, a city of 658,000, on weekdays, and traveled back to Seoul for the weekend. She feared her family would break up if she didn't make the hard decision to quit.

 

Lee is one of some 140 money managers who has left the 930.5 trillion won ($788 billion) National Pension Service since 2016, shortly before it moved to Jeonju, a sleepy provincial capital, as part of the government's relocation of major agencies away from the capital Seoul.

 

That is almost half the 320 currently working at the fund's investment arm, an alarming brain drain for the main public retirement plan of Asia's fourth-largest economy and a major investor in Korean blue-chips such as Samsung Electronics (005930.KS) and Hyundai Motor Co. (035420.KS).

 

"Staying in Jeonju for the weekdays, I felt I was missing out on so much of my life, I couldn't stand it anymore and decided to head up to Seoul," said Lee, who now works for an asset manager based in Seoul's financial district and agreed to be identified only by her surname.

 

With assets valued at nearly half the nation's gross domestic product, the NPS manages pensions for private sector workers and self-employed South Koreans.

 

A massive wave of retirements due in coming years in the world's fastest aging society has raised the stakes for management at the fund.

 

Over the past five years, however, the NPS has only filled 57% of jobs it opened.

 

An NPS official said that partly reflects the greater number of openings as the fund grows investments but acknowledged the issues around the relocation.

 

"Although it has stabilised a lot compared to before our relocation to Jeonju, the issue regarding manpower seems to have re-emerged because we recently increased job openings in a large scale which seemingly pushed up the relative vacancy rate," the official told Reuters in response to queries.

 

"As our overseas investment expands, so are opportunities to work abroad, and efforts are being made to motivate talent to stay in service by improving working conditions, and we also have talent development programmes."

 

To plug staff shortages, it removed the mandatory one-year work experience requirement for the first time from its job postings in September and began offering opportunities to work abroad, even to domestic equity fund managers.

 

The NPS's annualised investment return for 2020 was 9.7%, below 25.15% for Japan's GPIF in fiscal 2020 and 20.4% at Canada Pension Plan Investment Board.

 

That partly reflects the more conservative nature of its investments, fund managers say, which also means it is less exposed during downturns.

 

However, the NPS now plans to expand its overseas investment allocations to 50% by 2024 from 34% in 2019 .

 

It has 30 staff across branches in New York, London and Singapore as of 2020, far fewer than the 351 staff at Canada's CPPIB and 252 at Norway's NBIM in their various overseas offices, 2020 data from the NPS shows.

 

More ambitious returns would demand a deeper pool of investment talent, which has become harder to attract and retain since the relocation in 2017.

 

"When I was a manager there about eight to 10 applicants used to compete for one fund manager position, after we screened out inexperienced ones, and that's when the fund's pay level was even lower," said Hong Chun-uk, who resigned from a senior fund manager position at the NPS in 2015.

 

He left the fund after it announced its relocation and has since become an economist at Seoul-based brokerage.

 

BIG MONEY, SMALL TOWN

 

The NPS is one of about 150 state agencies and public corporations that have moved out of Seoul since 2005, with another batch of about 100 institutions, including part of the National Assembly, also planned for relocation.

 

The major shift was part of a government plan to decentralise economic and political power away from Seoul, ease congestion in the capital and develop regional cities.

 

The struggle to fill roles at the fund has fueled debate over the merits of relocating crucial public institutions.

 

Two fund managers who left the NPS said the brain drain issue hasn't adversely affected the fund's performance yet but pension experts say it will.

 

"In Korea, there's strong preference to live in the capital Seoul, among families, for schools and lifestyle," Yun Suk-myung, head of the Korean Pension Association said. "Obviously the political push ignored that and having inexperienced, incompetent fundies will eventually hurt its investment returns."

 

For many fund managers used to a certain standard of urban living, Jeonju has its limitations.

 

"There is one popular restaurant I went to often and I used to meet my boss and folks from other teams all there," Lee said. "Everyone at the NPS kind of expects colleagues to be around the town."

 

The Thomson Reuters Trust Principles.

 

 

 

Deutsche Bank poaches chief risk officer from Natixis

(Reuters) - Deutsche Bank (DBKGn.DE) said on Sunday that it has poached Olivier Vigneron as the German lender's new group chief risk officer from France's Natixis.

 

It is the second major personnel announcement the lender made over the weekend. On Friday, it nominated the Dutch businessman Alexander Wynaendts as the next chairman of its supervisory board, marking a new era for Germany's largest bank. read more

 

Vigneron, who was also chief risk officer at Natixis, will succeed Stuart Lewis, who had earlier this year announced he would retire next year.

 

He will join the bank in March.

 

The Thomson Reuters Trust Principles.

 

 

 

KKR makes $12 billion approach to take Telecom Italia private

(Reuters) - Telecom Italia (TIM) (TLIT.MI) has received a 10.8 billion euro ($12 billion) approach from U.S. fund KKR (KKR.N) aimed at taking Italy's biggest phone group private, the company said on Sunday.

 

KKR's move comes as TIM's CEO Luigi Gubitosi battles for survival after coming under fire from top investor Vivendi (VIV.PA) following two profit warnings in three months.

 

 

TIM said KKR had set an indicative price of 0.505 euros for its possible buyout offer -- a 45.7% premium to the ordinary shares' closing price on Friday. KKR would also offer the same price for TIM's savings shares .

 

The TIM board, chaired by former Bank of Italy official Salvatore Rossi, met for several hours on Sunday afternoon but in a short statement it gave no indication of whether it would support the approach. It noted that KKR had termed its action as "friendly" and aimed at winning the backing of the company and of the government.

 

 

Italy's Treasury said foreign interest in Italian companies was "positive news for the country" and the market would assess how valid KKR's plan is were it to materialise.

 

The government will closely follow developments with a focus on plans for TIM's fixed-line assets, which would be key in determining whether it uses its veto powers.

 

Rome has special anti-takeover powers to shield companies deemed of strategic importance from foreign bids.

 

A new owner would also have to assume TIM's 29 billion euro gross debt.

 

CARVE OUT

 

Gubitosi brought KKR onboard last year in a 1.8 billion euro deal that handed the New York-based fund a 37.5% stake in FiberCop, the unit holding TIM's last-mile network connecting street cabinets to people's homes.

 

KKR's plan would see TIM carve out its fixed network to be run as a government-regulated asset along the model used by energy grid company Terna (TRN.MI) or gas grid firm Snam (SRG.MI), two sources close to the matter said earlier on Sunday.

 

The government wants any plans for TIM's grid to be in line with the goal of rapidly completing broadband rollout across Italy, supported by adequate investments, and protecting jobs, the Treasury said in its statement.

 

Gubitosi has started looking at ways to squeeze money out of TIM's assets, revisiting in particular a plan to merge TIM's fixed-line grid - its most prized asset - with that of fibre optic rival Open Fiber.

 

Sponsored by the previous government, that project had run aground under Prime Minister Mario Draghi.

 

Rome, preparing to tap billions of euros of European Union recovery funds to boost broadband connectivity in Italy, is aware of the need to find a way to shore up the former telecoms monopoly and protect its 42,500 domestic workers.

 

PRICE "TOO LOW"

 

Vivendi, which is pushing to replace Gubitosi, believes KKR's offer does not adequately value TIM, a person close the French media group said.

 

Vivendi, which faces a steep capital loss on its 24% TIM stake after paying on average 1.071 euros a share, remains ready to work alongside Italy's authorities and institutions for TIM's long-term success, a spokesperson said.

 

Vivendi sees Gubitosi as a short-term solution for TIM, people close to the matter have said. One person said on Sunday KKR's plan may buy Gubitosi a few more months. read more

 

Private equity firms CVC and Advent have also studied possible plans for TIM, working with former TIM CEO Marco Patuano, now a senior adviser to Nomura (7131.T) in Italy.

 

A spokesperson for the two funds said they were open to working with all stakeholders on a solution to strengthen TIM, denying any contacts with Vivendi.

 

To oversee a strategic asset such as the fixed line, state investor CDP has taken a 9.8% stake becoming TIM's second-largest investor after Vivendi.

 

TIM's fixed network is also a key asset supporting the debt burden which was cut further below the investment grade level by credit rating agency S&P on Friday. read more

 

TIM's revenue have shrunk by a fifth over the past five years hit by aggressive competition at home from rivals such as Iliad, Vodafone (VOD.L), Wind Tre and Fastweb.

 

($1 = 0.8859 euros)

 

The Thomson Reuters Trust Principles.

 

 

 

Dollar solid, euro suffers on growing concerns about Europe's COVID situation

(Reuters) - The safe-haven U.S. dollar traded close to a 16-month high to the euro on Monday on growing anxiety over the impact of surging COVID-19 infections in Europe, with Austria reimposing a full lockdown and Germany considering following suit.

 

The greenback was near its strongest since early October against the riskier Australian and Canadian dollars, with the commodity-linked currencies also pressured by a slump in crude oil. read more

 

The dollar got additional support from bullish comments by Federal Reserve officials Richard Clarida and Christopher Waller on Friday who suggested a faster pace of stimulus tapering may be appropriate amid a quickening recovery and heated inflation. read more

 

A more rapid end to tapering raises the possibility of earlier interest rate increases too. Currently the market is priced for the Federal Open Market Committee (FOMC) to start hiking rates by the middle of next year.

 

The dollar index , which gauges the currency against six major peers, traded little changed at 96.148, staying within sight of last week's 16-month high of 96.266.

 

The euro slumped 0.25% to $1.12705 -- the 16-month low hit on Friday.

 

"EURUSD has been in free-fall and will likely get the lion's share of attention from clients looking for a play on growing restrictions and tensions across Europe," Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a note to clients.

 

"For momentum, trend followers and tactical traders, short EUR remains attractive here."

 

Europe has again become the epicentre of the pandemic, accounting for half of global cases and deaths. read more

 

A fourth wave of infections has plunged Germany, Europe's largest economy, into a national emergency, Health Minister Jens Spahn said, warning that vaccinations alone will not cut case numbers.

 

Austria becomes the first country in western Europe to reimpose a full COVID-19 lockdown from Monday.

 

Worries that a slowdown in Europe could hit energy demand dented crude oil, which was also in retreat over the prospect of a U.S.-led release of emergency stockpiles.

 

The dollar added 0.10% against the oil-linked Canadian loonie to C$1.2640, closing in on Friday's high at C$1.2663, the strongest level since Oct. 1.

 

The Aussie gained 0.22% to $0.72525, supported by a rise in iron ore prices, after earlier dipping to $0.72275 for the first time since Oct. 6.

 

"We expect AUD to remain heavy in the near‑term (and) a dip to $0.70 is possible," with a slowing Chinese economy and the Reserve Bank of Australia's dovish policy stance dragging on the currency, Joseph Capurso, a strategist at Commonwealth Bank of Australia, wrote in a report.

 

Meanwhile, "USD can extend its recent rally this week and set a fresh 2021 high," he said. "Another round of strong U.S. inflation can further propel market pricing of FOMC rate hikes and the USD."

 

The minutes of the FOMC's meeting at the start of this month, when policymakers announced a start to tapering, are due Wednesday and may provide more insight on how many Fed officials are considering faster tapering or earlier rate increases.

 

U.S. President Joe Biden is also likely to announce his nominee for Fed chair this week, after interviewing incumbent Jerome Powell and Fed governor Lael Brainard.

 

"Governor Brainard is more dovish and her nomination could prompt some kneejerk USD selling," Westpac strategists wrote in a note.

 

The dollar gained 0.1% against its fellow safe-haven Japanese currency , changing hands at 114.15 yen per dollar, in the middle of a range seen over the past week and a half.

 

In crypto, bitcoin traded around $57,500, consolidating after its retreat from an all-time high at $69,000, marked earlier this month.

 

The Thomson Reuters Trust Principles.

 

 

 

Princes to paupers: India's salesmen face ruin as Ambani targets mom-and-pop stores

(Reuters) - For eight straight days, household goods salesman Vipresh Shah has failed to sell a single pack of Dettol soap to the storekeepers who have been buying from him ever since he took over his family business as a teenager, 14 years ago.

 

Shah is an official distributor for Britain's Reckitt Benckiser in Vita, near Sangli city, around 200 miles south of Mumbai. But he said once-loyal customers now point to an app - JioMart Partner - on their smartphones showing prices up to 15% lower, instead of placing orders.

 

"As Reckitt's distributor, I used to be like a prince in the market," said Shah. "Now the buyer tells me, 'See how much you've been ripping us off!'"

 

The 31-year-old said he lost $2,000 of his own money as he discounted products to match prices on JioMart, the app rolled out by Reliance Industries billionaire Mukesh Ambani in his drive to revolutionise retail distribution in India.

 

Up and down India in places like small town Vita, the mom-and-pop stores that account for four-fifths of a near-$900 billion retail market - more than $700 billion - are increasingly turning to JioMart to stock up on foreign and domestic brands.

 

Just as Ambani, India's richest man, has disrupted the country's telecoms industry, the tycoon is intent on shaking up retail distribution, taking on U.S. e-commerce giants like Amazon (AMZN.O) and Walmart Inc (WMT.N), expanding fast in India.

 

The country has around 450,000 traditional distributors, who have legions of salespeople to service every corner of the vast nation, including 600,000 villages. They typically earn a margin of 3-5% on product prices and mostly take orders physically once a week, making deliveries to retailers within a couple of days.

 

But Reliance's model throws a wrench in that supply chain: the mom-and-pop stores, known as 'kiranas', can order goods on JioMart Partner with deliveries promised within 24 hours. Reliance also offers training on ordering, credit facilities and free product samples for affiliated kiranas' customers.

 

That means hundreds of thousands of salesmen representing consumer giants like Reckitt, Unilever (ULVR.L) and Colgate-Palmolive (CL.N), face an existential threat to their business, according to interviews with salespeople, 20 distributors and a trader group with members across India.

 

Many of the distributors contacted by Reuters said they have slashed their workforce or vehicle fleet, seeing their sales from door-to-door agents drop 20-25% in the last year as shopkeepers partner with Reliance.

 

In Vita, salesman Shah said he has had to lay off half of his staff of four. He fears the 50-year-old family firm might not last beyond the next six months.

 

'GUERRILLA TACTICS'

 

The scale and speed of the disruption have triggered tensions between traditional distributors and Reliance that have boiled over into physical confrontation in some cases.

 

In Maharashtra state in the west - home to Vita - and Tamil Nadu in south, traditional salesmen have organised blockades of some JioMart delivery vehicles.

 

"We will employ guerrilla tactics," said Dhairyashil Patil, president of the All India Consumer Products Distributors Federation, which represents 400,000 agents of local and foreign consumer firms. "We will continue to agitate," he told Reuters, "we want (consumer goods) companies to realise our value."

 

Reliance remains undeterred in pushing ahead with Ambani's "new commerce" retail venture, first announced in 2018.

 

Last year it raised funds from marquee investors including Silver Lake Partners and KKR & Co Inc (KKR.N) as it seeks to integrate mom-and-pop stores in what it has touted as a more inclusive approach to digital commerce. That push is widely seen countering the likes of Amazon, which have for years faced - and denied - claims in India of favouring select big sellers at the expense of smaller retailers.

 

A source close to Reliance said the company was determined to keep expanding its business for mom-and-pop stores. It believes its model can co-exist alongside the traditional approach in one of the world's biggest retail markets, the person said, declining to be identified because of lack of authority to disclose company plans.

 

Ambani in 2018 said he eventually wanted to connect 30 million small merchants to the Reliance network. So far, it has 300,000 merchant partners in 150 cities who order consumer goods from Reliance, but the transformation will be magnified many times over if it meets a target of adding 10 million partner stores by 2024.

 

Reliance did not respond to requests for comment for this article.

 

Colgate declined to comment, while Reckitt said its customers and distributors were an integral part of its business but it does not comment on its relationship with them. Unilever's India arm, Hindustan Unilever, (HLL.NS) did not respond to a request for comment.

 

WHICH CHANNEL?

 

The traditional distribution methods remain important to the consumer goods makers, even amid the disruption, industry watchers say.

 

Himanshu Bajaj, former Asia consumer and retail head at consulting firm Kearney, said CEOs of consumer firms he met in September raised concerns about Reliance's strategy upsetting the traditional distribution chain.

 

"The companies don't want to kill their own distributors. The worry is real," he said.

 

Asked about Reliance's model and concerns among distributors, Sunil D'Souza, CEO of India's Tata Consumer Products (TACN.NS), told Reuters in an interview last month it "can't afford to sit back and ignore" any major distribution channel, but Tata was trying to minimise conflict and strike a balance.

 

Jefferies in March estimated kiranas will "steadily increase the share of procurement" from Reliance "at the cost of traditional distributors". Such sales for Reliance could mushroom to $10.4 billion by 2025 from just $200 million in 2021-22, Jefferies estimates.

 

One executive who works for a rival to Reliance said Ambani "was spreading his wings very fast" in servicing kiranas and already has an edge on negotiating prices, due to long-standing relationships with consumer good makers which have for years counted Reliance and its 1,100 supermarkets as a big client.

 

With kirana partners, Ambani is adding another, major vertical. "Brands cannot afford to sideline Reliance, it's just their sheer purchasing power," said the executive, who declined to be identified as he wasn't authorised to speak with media.

 

ALL ABOUT PRICING

 

Many kiranas are cramped shops in ageing buildings, where branded products are placed on wooden shelves and small sachets dangle from the ceiling. Such retailers are embracing Reliance as a means to boost profit margins.

 

When Reuters accompanied Anuruddh Mishra, a sales agent for Colgate, during a field trip in Mumbai's Dharavi area, he struggled to convince Shivkumar Singh, the 50-year-old owner of a dilapidated store, to make purchases. Dharavi is home to 1 million people and rated one of the world's biggest slums.

 

Singh opened his JioMart app and showed the far lower prices on offer. "How can I order from traditional distributors?" he said. "The difference in price is huge. Now I order mostly from Reliance."

 

A Reuters review of purchase deals on the JioMart Partner app showed the Dharavi retailer could bulk buy a two-tube combo of Colgate MaxFresh toothpaste for about 115 rupees ($1.55). Salesman Mishra's distribution company gets it for 145 rupees, and his last offer to the Dharavi retailer was 154 rupees - still more than a third higher than the Reliance price.

 

Back in Sangli, traditional distributors said they have at times chased down Reliance vehicles and confronted drivers, alleging unauthorised deliveries.

 

Sunil Pujari, who works in the city for one JioMart delivery agent, said he had been warned by his supervisors to immediately alert them if angry distributors stopped vehicles.

 

But business remains brisk.

 

"Prices offered by JioMart cannot be matched by anyone," he said, making another delivery in a crowded market.

 

The Thomson Reuters Trust Principles.

 

 

Ericsson to buy cloud firm Vonage for $6.2 bln

(Reuters) - Mobile telecoms equipment maker Ericsson (ERICb.ST) said on Monday it had agreed to buy cloud communications firm Vonage for $6.2 billion.

 

"The merger agreement was approved unanimously by the Board of Vonage," Ericsson said in a statement.

 

"The transaction builds upon Ericsson's stated intent to expand globally in wireless enterprise, offering existing customers an increased share of a market valued at $700 billion by 2030."

 

Vonage had sales of $1.4 billion in the 12-month period to Sept. 30 2021 with a margin on adjusted earnings before interest, tax and depreciation (EBITDA) of 14% and free cash flow of $109 million.

 

The cloud-based Vonage Communications Platform serves over 120,000 customers and more than one million registered developers globally.

 

Ericsson said it expected the deal to boost earnings per share - excluding non-cash amortization impacts - and free cash flow from 2024 onwards.

 

 

The deal is expected to close in the first half of 2022, subject to Vonage shareholder approval, regulatory approvals, and other conditions.

 

The Thomson Reuters Trust Principles.

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

National Unity Day

 

December 22

 


 

Christmas Day

 

December 25

 


 

Boxing Day

 

December 26

 


 

Public Holiday in lieu of Boxing Day falling on a Sunday

 

December 27

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

 

 


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.

 


 

 


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