Major International Business Headlines Brief::: 05 October 2021

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Major International Business Headlines Brief::: 05 October 2021

 


 

 


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

 


 

 


ü  Facebook, Whatsapp and Instagram back after outage

ü  Evergrande: Investors kept waiting over 'major' deal

ü  Scandal-hit Ozy Media says it has re-launched

ü  Pandora Papers: The secret owners of UK property worth billions

ü  Hollywood union workers vote to authorise strike

ü  US will 'take all steps necessary' to defend itself on China trade

ü  Windows 11 launches with redesigned start menu

ü  Amazon and Google set to attend White House forum on quantum technology

ü  Asian stocks fall to near 1-year lows as oil rally fuels inflation fears

ü  Investors eye Big Tech as stock market wobbles

ü  China risks slower growth without more market competition - U.S. study

ü  China property sector default woes deepen amid Evergrande uncertainty

ü  Malawi Not Utilizing Natural Resources to Create Wealth - Study

ü  Taleveras Says LNG Demand Growth is Here to Stay

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Facebook, Whatsapp and Instagram back after outage

Social media services Facebook, WhatsApp and Instagram are back up and running after an outage that lasted almost six hours, Facebook says.

 

It blamed an internal technical issue, which not only affected Facebook's services, but reportedly also employees' work passes and email.

 

The services were down from about 16:00 GMT until around 22:00 on Monday.

 

But the company said there was "no evidence that user data was compromised".

 

Sheera Frenkel, the New York Times' technology reporter, told the Today programme part of the reason it took so long to fix was because "the people trying to figure out what this problem was couldn't even physically get into the building" to work out what had gone wrong.

 

In a statement, Facebook said that the faulty configuration change affected the company's internal tools and systems which complicated attempts to resolve the problem.

 

Downdetector, which tracks outages, said some 10.6 million problem reports around the world. However, the real number of people affected is much higher: more than 3.5 billion people use Facebook, Messenger, Instagram and Whatsapp.

 

According to the business website Fortune, it also cost Facebook founder Mark Zuckerberg an estimated $6bn (£4.4bn) at one point as shares plummeted.

 

Mr Zuckerberg has apologised to those affected by the outage.

 

 

Some people also reported problems using Facebook's virtual reality headset platform, Oculus, and apps which require Facebook logins were affected, including Pokémon Go.

 

An outage of this scale for such a long time is rare. A disruption in 2019 left Facebook and its other apps mostly inaccessible across the world for more than 14 hours.

 

Users flood Twitter with jibes

Several other tech companies, including Reddit and Twitter, poked fun at the social media giant's predicament - prompting responses from the affected apps.

 

The disruption comes the day after an interview with a former Facebook employee who leaked documents about the company.

 

Frances Haugen told CBS news on Sunday that the company had prioritised "growth over safety".

 

On Tuesday she will testify before a Senate subcommittee in a hearing titled "Protecting Kids Online", about the company's research into Instagram's effect on the mental health of young users.

 

Many outages get resolved fairly quickly. They are often localised too, with some people unable to open a website that can be viewed in another country.

 

This outage, however, was global, and affected all of Facebook's many spin-offs.

 

The length of time it was off grid is also unusual. There were reports of "mayhem" in Facebook headquarters, as technicians scrambled to fix the problem.

 

Interesting too that the outage hampered Facebook's ability to tackle the crash - bringing down internal tools needed to remedy the problem.

 

It should also be said that Facebook's statement is carefully written. It doesn't rule out foul play.

 

The week had already started off badly - after the whistleblower in the "Facebook Files" revelations revealed herself on Sunday.

 

But a bad week has become a terrible one for the social network.--BBC

 

 

 

Evergrande: Investors kept waiting over 'major' deal

As investors wait for an announcement about the future of struggling Chinese real estate giant Evergrande, two more property companies are causing concerns over their ability to repay debt.

 

On Monday, Evergrande's shares were suspended ahead of "an announcement containing inside information about a major transaction".

 

The firm is reportedly set to sell a large stake in one of its businesses.

 

Evergrande has struggled to meet debt interest payments in recent weeks.

 

What is Evergrande and is it too big to fail?

Meanwhile, two other Chinese property firms have hit financial trouble after missing debt payments. Evergrande's recent problems have meant that the sector is now facing intense scrutiny.

 

On Tuesday, Sinic Holdings became the latest Chinese developer to be downgraded by a global ratings agency.

 

Fitch Ratings said it downgraded Sinic after the company said it had missed interest payments and due to uncertainty over a $246m bond repayment due later this month.

 

The boss of Shanghai-based Sinic hit the headlines last month when he lost more than a billion dollars in a market selloff linked to concerns about Evergrande.

 

Zhang Yuanlin saw his personal wealth drop from $1.3bn (£0.96bn) to $250.7m on 20 September, according to Forbes, when his company was forced to suspend trading of its shares in Hong Kong following an almost 90% slump in their value.

 

On Monday, Shenzhen-based Fantasia Holdings said it had failed to repay a $205.7m bond.

 

That sent the market value of the Chinese homebuilder's dollar-denominated bonds down by almost 50%.

 

So far, Beijing has not commented directly on Evergrande's financial problems although the country's central bank and state media have signalled that the government is ready to help protect individual citizens exposed to the property market.

 

Rival Hong Kong-listed property company Hopson Development is set to buy a 51% stake in Evergrande Real Estate for around $5bn, according to Chinese media reports.

 

The potential deal would give the world's most indebted property developer a much needed cash injection as it tries to raise the funds to make payments to customers, investors and suppliers.

 

Fears have grown in recent weeks about Evergrande's problems spreading through the world's second largest economy and having an impact on the global financial markets.-BBC

 

 

 

Scandal-hit Ozy Media says it has re-launched

In an about-turn, the scandal-hit US media firm Ozy Media has re-launched just days after it shut itself down.

 

Boss Carlos Watson told broadcaster NBC that the firm was "open for business" again and this was its "Lazarus moment" - referring to the biblical character brought back to life by Jesus.

 

Ozy shut on Friday after reports its co-founder had deceived potential investors during a conference call.

 

Major advertisers cut ties and its chairman Marc Lasry stepped down.

 

On Monday, Mr Watson told NBC that the previous week had been "traumatic" and "heartbreaking".

 

However, he said the media firm had a change of heart: "Over the weekend we spoke to advertising partners, we talked to our readers, our viewers our investors.

 

"I think Ozy is part of this moment. I think what we do... has a place."

 

Launched in California in 2013, Ozy Media produces left-leaning podcasts, television series and events. The firm has won an Emmy for its work.

 

In late September, the New York Times reported that co-founder Samir Rao impersonated a senior leader at YouTube during a conference call with Goldman Sachs in February. At that point the investment bank was considering making a $40m investment in the media company.

 

Mr Rao reportedly claimed that Ozy's videos were highly popular on YouTube.

 

According to the Times, the investors realised something was wrong and did not go through with the deal. Mr Watson later apologised and Mr Rao was allowed to stay at the firm.

 

Amid growing scrutiny last week, Ozy began an internal investigation and Mr Rao took a leave of absence.

 

It prompted veteran journalist Katty Kay - who joined Ozy in June after 30 years at the BBC - to quit, followed by Mr Lasry. Ford and Ally Financial cut ties with the media firm, amongst other advertisers.

 

Mr Watson told NBC that what Mr Rao had done was "sad" and "wrong".

 

He accepted that it was a "fair question" as to whether people would be able to trust him again as chief executive. The latest scandal is just one in a long string of allegations that has emerged, including claims the firm inflated its audience figures.

 

Mr Watson said he had been given "incredibly bad advice" last week "to go silent", when he should have engaged with the press.

 

As a result, he said "half truths", inaccuracies and "cheap shots" were reported in the media and that Ozy was not a "house of cards".

 

Mr Watson added Ozy intended to "own" the mistakes that had come to light around its use of data and marketing.

 

Next steps

The firm could struggle to get back on its feet. It has lost most of its staff and only two people are currently on its board - Mr Watson and Michael Moe, founder of the Silicon Valley investment company GSV Holdings, which backs Ozy.

 

In a statement, Ozy told the BBC it was reaching out to its team to encourage them to return. It added that its newsletters will resume this week and TV production at the end of the month.

 

The firm added that several advertising partners had expressed excitement about the firm re-launching and intended to meet with Ozy in the coming days to discuss "next steps".

 

Ozy spokesman Phil Singer told the BBC: "The bottom line is that we hit a bump in the road, but are committed to getting past this moment and renewing our commitment to being the kind of media company that delivers amazing content about topics and people that are too often overlooked."-BBC

 

 

 

Pandora Papers: The secret owners of UK property worth billions

The secret owners of more than 1,500 UK properties bought using offshore firms have been uncovered by a BBC investigation.

 

The details are featured in the Pandora Papers leak of offshore financial documents and list property with an estimated value in excess of £4bn.

 

The owners include high-profile foreign politicians, individuals accused of corruption and UK political donors.

 

Ministers say they will bring in a new law when they have parliamentary time.

 

Successive Conservative governments have pledged to introduce legislation making it compulsory to name those owning property via foreign companies in a bid to stamp out money-laundering.

 

Among the revelations:

 

The wife of retail magnate Sir Philip Green went on a buying spree of London property while the couple's recently sold High Street empire teetered on the verge of collapse

The Qatari ruling family purchased two of London's most expensive homes through offshore companies, saving millions of pounds in tax

Ukrainian billionaire Gennadiy Bogolyubov, who is under investigation by the FBI and had hundreds of millions in assets frozen in a fraud case, owns more than £400m of UK property

A £40m London office block is owned by the son of sanctioned Russian oligarch Mikhail Gutseriev

The BBC worked with the International Consortium of Investigative Journalists (ICIJ), the Guardian, Finance Uncovered and other media outlets to identify in the leaked files the individuals behind overseas companies that owned property in England and Wales.

 

Owning real estate through an offshore firm is legal, and there is no suggestion of wrongdoing in simply using a foreign company to purchase property.

 

However, the UK government recently raised its own assessment of the money laundering risk for the property market from "medium" to "high".

 

The greatest level of risk is where there are "difficulties in determining the ultimate beneficial owners", according to a Home Office report in December 2020.

 

It comes as a number of world leaders - including the King of Jordan and the ruling family of Azerbaijan - have featured in the Pandora Papers leak after buying property in the UK using offshore companies.-BBC

 

 

 

Hollywood union workers vote to authorise strike

The union that represents some of Hollywood's most important workers has voted to approve a strike in a move that could shut down nearly all US film and television production.

 

Members of the International Alliance of Theatrical and Stage Employees (IATSE), which covers camera crews, prop masters, hairdressers and other craft workers say they are being worked to death with gruelling hours and no guaranteed rest or meal breaks.

 

Members are demanding better work conditions, as well as fairer pay from streaming services to cover their share of labour.

 

Over 50,000 workers voted overwhelmingly - 98% in favour to 2% against - to approve a work stoppage. Should they carry out the stoppage, the strike would be the biggest labour walkout in Hollywood since World War Two.

 

Negotiations between the union and the Alliance of Motion Picture and Television Producers broke down last month after the IATSE walked away from a deal.

 

The deal would have improved wages and rest periods, the Alliance said, and included a nearly $400m (£293m) pension and health plan.

 

However, with the vote, the union has "spoken loud and clear" said its president Matthew Loeb.

 

"This vote is about the quality of life as well as the health and safety of those who work in the film and television industry," his statement Monday said. "For those at the bottom of the pay scale, they deserve nothing less than a living wage."

 

After months of pandemic lockdowns in 2020, Hollywood's film and TV sets have been booming in recent months - and crew members say the hours and demands placed on them have become worse than ever.

 

Like many around the world, Hollywood's crew members are re-evaluating how and when they want to work.

 

On the streets of Los Angeles and on social media, Hollywood crew members have been sharing harrowing stories of 15-plus hour days, with claims of working more than 70 and 80 hour weeks.

 

Some spoke of having "work done" - surgeries to rebuild backs and knees - failed marriages and missed weddings and funerals.

 

"Fraturdays" are said to be a common occurrence in the entertainment industry - workers start on Monday mornings at 06:00, and on Fridays, start late in the afternoon or evening and work until Saturday morning. It leaves little time to do anything but sleep all weekend.

 

"My hours are insane," sound mixer Thomas Pieczkolon said during a rally on Sunset Boulevard as he decorated cars with chalk "Vote Yes" signs. He works on a $300m show for a streaming service and has to work nine hours most days before they even break for lunch, he said.

 

Mr Pieczkolon recently worked a nearly 18-hour day on a Monday and his friend Jade Thompson, a costume dresser on the show, fell asleep at the wheel driving home.

 

"I nodded off and then came to and drifted off to the side and had a panic attack," she said. "It wasn't even the end of the week! It was a Monday."

 

Workers have claimed that is a common problem - the adrenaline of a long day leaves them and the tiredness kicks in on the drive home.

 

"Sometimes you don't even realise until you're already in your car on that long ride home by yourself," Ms Thompson said, adding that her colleagues have WhatsApp group chats to make sure everyone gets home safe.

 

The authorisation vote does not necessarily mean that a strike will take place. Most workers who spoke to the BBC said they hoped it would instead be the leverage their union needed to negotiate better deals.

 

The last time Hollywood shut down for a labour dispute was the writers' strike in 2007 and 2008 amid the rise of reality TV and the soaring popularity of reality television stars like Donald Trump.

 

Today, producers are under pressure to make a deal with workers. More than 100 members of Congress have urged them to implement more humane conditions.

 

The authorisation for a strike could also set up a showdown with streaming services such as Netflix and Amazon, which union members said were taking advantage of their work.

 

"Streaming companies are getting a discount on our labour," said set decorator Lisa Clark. "We deserve a fair share of that profit - we deserve to be paid at least what we used to be paid when we used to do network television."

 

Streaming services have transformed the industry with ambitious sets and epic shows and storytelling. Workers love that streaming shows look incredible like feature films, Ms Clark said - but she gets 10 weeks to prepare hundreds of sets which would have taken six months for a feature film.

 

"It's not a reasonable request," she said.-BBC

 

 

 

US will 'take all steps necessary' to defend itself on China trade

The US has promised a new approach to trade relations with China, saying it will take "all steps necessary" to protect US interests "to the hilt".

 

Trade Representative Katherine Tai said she will seek new talks with Beijing over its failure to keep promises made in the first part of a trade deal struck with Donald Trump.

 

She also did not rule out imposing further trade tariffs.

 

Yet the US will drop a plan to make China reform its "non-market economy".

 

Instead, Ms Tai said America had to become more competitive in the face of China's growing economic might.

 

"For too long, China's lack of adherence to global trading norms has undercut the prosperity of Americans and others around the world," she told a briefing in Washington.

 

 

"We must defend - to the hilt - our economic interests... That means taking all steps necessary to protect ourselves against the waves of damage inflicted over the years through unfair competition."

 

Since 2017, the US and China have imposed tariffs on billions of dollars of each other's goods after Washington accused Beijing of blocking access to its markets and stealing American intellectual property.

 

Under a Phase 1 deal struck by Donald Trump, China promised to increase its purchases of US agricultural and other goods to rebalance the relationship.

 

But Ms Tai, who was appointed by President Joe Biden in April, said the Chinese government continued to "pour billions of dollars" into subsidising industries such as agriculture, steel and semi-conductors, making it impossible for the US to compete.

 

She promised to reopen talks with Beijing in the coming days and to "enforce" the commitments it made.

 

She also refused to rule out deploying further trade tariffs, saying "all available tools" remained on the table in protecting the American economy.

 

'Position of strength'

However, Ms Tai also said she would restart a process allowing US industries to apply for exemptions from trade tariffs on Chinese imports, which are paid by American companies. These, she suggested, at times harmed US economic interests.

 

She also said she would drop Donald Trump's Phase 2 deal - yet to come into force - which sought deeper reforms to China's state-backed economy, saying it was unlikely to succeed.

 

Instead, she said the US needed to work with allies through "bilateral and multilateral channels" to bring Beijing in line, while also investing more in its own competitiveness.

 

"As our economic relationship with China evolves, so too must our tactics to defend our interests," she said.

 

"Unlike the past, this administration will engage from a position of strength because we are investing in our workers and our infrastructure.

 

"And we must harness and leverage the talent of our people by investing in education and worker training."

 

She said the Biden administration would achieve this by investing in green energy and infrastructure, which would create new jobs. Yet the $1tn infrastructure bill and $3.5tn social spending plan that would pave the way for such changes remain stalled in the Senate.

 

Craig Allen, president of the US-China Business Council, told the BBC that Ms Tai's speech seemed to be "an invitation to restart negotiations between the two countries".

 

"As you know, they've been stalled since the [US presidential election] election. And I think that we'll see a little bit of engagement in the weeks ahead. But where that goes remains very uncertain. There was no clear roadmap or clear objectives for the next round of negotiations [in her speech]."-BBC

 

 

 

Windows 11 launches with redesigned start menu

Windows 11, the latest version of Microsoft's computer operating system, launches worldwide on Tuesday as a free upgrade for Windows 10 users.

 

Windows chief product officer Panos Panay, told the BBC the latest version was built to be "clean and fresh and simpler" for the user.

 

He promised that the new operating system would not be an "extreme departure" from what people know.

 

And even the least tech-savvy users can upgrade easily, he added.

 

"I use the frame of my father - he's 89," Mr Panay said. "I'm so excited for him to hit that button and upgrade, you have no idea.

 

"Not because he's my dad - because I just want it to be easy for him."

 

He said expert users had already tested it extensively through Window's Insider trial programme and was confident there would be no teething issues, adding the upgrade is "ready now".

 

Press Start

Windows 11 has some significant design changes, along with some alterations on how the system works under the hood.

 

By default, the Start menu is centred on screen, along with icons in the taskbar. When clicked on, the Start button opens a menu of frequently used apps.

 

In some ways, it mimics the appearance of a smartphone app menu or launcher. Microsoft has also dropped the "tiles" which were present on Windows 10's start menu.

 

Mr Panay said the team had learned from Windows 8, which got rid of the start menu entirely, upsetting many users.

 

"You learn from that, of course, and then you adapt," he said.

 

Developing Windows 11's interface involved watching how people use their computers - "what they want to click on, where their eyes are on the machine when they come into our labs," he explained.

 

"You get this confidence of learning from history," he added.

 

For Windows 11, "the Start button is right there. It's right in the middle of the screen. It's not gone."

 

'New era'

When Windows 10 came out, Microsoft declared it would be the "last version" of the system. That has obviously changed.

 

"We're in a time where there is a bit of a new era for the PC happening right now," Mr Panay said.

 

"I think Windows 11 kind of stamps that moment and it is a signal for that moment."

 

Across the operating system, the design favours rounded corners, and has simplified most menus and folder views. And there are new, improved options for arranging windows and "snapping" them into grids.

 

Widgets, a major selling point of 2007's Windows Vista, also make a comeback - but instead of "floating" on the screen where the user puts them, they live in a sidebar on the left, and are also linked to Microsoft services.

 

Some changes go deeper than the interface and design.

 

System integrations for Microsoft Teams - replacing Skype - and the Xbox app both feature heavily in Microsoft's advertising.

 

The Microsoft Store - the Windows version of an app store - has been completely redesigned and will allow third-party apps to sell inside it, without taking a substantial cut.

 

And one new feature which raised eyebrows in the technology world was that Windows 11 would run Android smartphone apps through the Amazon app store.

 

Early adopters have reported that the in-built search function of the new version is significantly faster on most devices - but also that it favours Microsoft's own services, Bing and the Edge browser, when delivering web results.

 

Upgrade time

For gamers, Microsoft promises that its new drive technology - Direct Storage - will lead to much better loading times in games by allowing a graphics card to access storage drives without going through the central processor.

 

But that feature, like some others, needs newer hardware to work.

 

As a result, not every computer will see all the potential advantages to upgrading - and some machines may not be able to upgrade at all.

 

 

The minimum requirements include a type of security chip - called a TPM - only installed on modern computers.

 

"If your device does not meet these requirements, you may not be able to install Windows 11 on your device and might want to consider purchasing a new PC," Microsoft says.

 

The company has just launched a range of its own new hardware devices to coincide with the new Windows version.

 

But users already running Windows 10 do not need to go to this expense if the computer is still working. Windows 10 will continue to be supported and receive security updates until October 2025.-BBC

 

 

 

Amazon and Google set to attend White House forum on quantum technology

(Reuters) - Amazon.com Inc (AMZN.O), Google (GOOGL.O) and Microsoft Corp (MSFT.O) are expected to join a Biden administration conference on Tuesday focused on quantum technologies as the U.S. government works to head off hacking threats and corner a burgeoning growth industry.

 

The White House's Office of Science and Technology Policy (OSTP) is hosting the event that will discuss critical applications of quantum computing, which is expected to operate millions of times faster than today's advanced supercomputers.

 

Boeing Co (BA.N), Honeywell International Inc , International Business Machines Corp (IBM.N), Intel Corp (INTC.O) and Northrop Grumman Corp (NOC.N) are also expected to attend, according to an administration spokesperson.

 

"There's a lot of excitement about quantum computers and quantum sensors, and there's some hype associated with that," said Charlie Tahan, assistant director for quantum information science at OSTP.

 

"But what we really want to get down to: what are the applications that a future quantum computer could run that could really benefit our society."

 

The technology, which is based on core principles of physics, is still in its infancy but has become a darling of investors aspiring to revolutionize healthcare, finance, artificial intelligence, weather forecasting and other areas.

 

President Joe Biden's administration is especially focused on the national security implications of quantum technology, which promises the ability to easily crack encryption standards in use today.

 

China, which Washington regards as its chief rival abroad, has also made significant efforts to develop the technology.

 

The Biden administration is also hoping to encourage more students to enter the field and to increase cybersecurity around private research and development to prevent snooping, Tahan said.

 

Congress has already funneled hundreds of millions of dollars into the industry, including quantum research laboratories, and bills currently under consideration now could add billions more.

 

The White House meeting will also include the organizations ColdQuanta, D-Wave, IonQ, QC Ware, Quantum Economic Development-Consortium, Rigetti Computing, Vector Atomic and Zapata.

 

The Thomson Reuters Trust Principles.

 

 

 

Asian stocks fall to near 1-year lows as oil rally fuels inflation fears

(Reuters) - Asian shares tracked a broad sell-off on Wall Street to weaken for a third straight session on Tuesday, as investors feared oil prices hitting multi-year highs would add to inflationary pressures caused by supply chain disruptions.

 

U.S. and European stock futures edged up, with S&P 500 e-minis rising 0.01%, the pan-region Euro Stoxx 50 futures gaining 0.2 and FTSE futures gaining 0.4%.

 

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dropped as much as 1.3%, declining for a third consecutive session. Japan stocks (.N225) were down 2.5%, South Korea (.KS11) gave up 2% and Australia (.AXJO) shed 0.4%.

 

"Investors are clearly worried about inflation due to supply chain disruptions and the rally in energy prices," said Vasu Menon, executive director of investment strategy at OCBC Bank.

 

The drop in markets took MSCI's main benchmark to 619.77, the lowest since November 2020 but it pared losses to be down 0.6% in late Asia trade. The index has shed more than 5% this year, with Hong Kong and Japanese markets among the big losers.

 

"We have seen tech stocks outperform value stocks, so if inflation remains a worry, then tech stocks tend to get hit," Menon said.

 

Oil prices reached three-year peak on Monday after OPEC+ confirmed it would stick to its current output policy as demand for petroleum products rebounds, despite pressure from some countries for a bigger boost to production.

 

Underscoring the rise in commodity prices, the Refinitiv/CoreCommodity CRB index (.TRCCRB) rose to 233.08 on Monday, the highest in more than six years. U.S. oil was steady at $77.68 a barrel, a day after hitting its highest since 2014. Brent crude stood at $81.5 after rising to a three-year top.

 

"OPEC+ may inadvertently cause oil prices to surge even higher, adding to an energy crisis that primarily reflects very tight gas and coal markets," said Commonwealth Bank of Australia's commodities analyst Vivek Dhar.

 

"That potentially threatens the global economic recovery, just as global oil demand growth is picking up as economies re‑open on the back of rising vaccination rates," Dhar said in a note.

 

Market focus in Asia was on whether embattled property developer China Evergrande(3333.HK) would offer any respite to investors looking for signs of asset disposals.

 

Shares in the the world's largest indebted developer were halted for trading on Monday but more Chinese property developers grappled with ratings downgrades on worries about their ability to repay debt. read more

 

The Dow Jones Industrial Average (.DJI) fell 0.94% to 34,002.92, the S&P 500 (.SPX) lost 1.30% to 4,300.46 and the Nasdaq Composite (.IXIC) dropped 2.14% to 14,255.49 as investors dumped Big Tech stocks in the face of rising Treasury yields.

 

U.S. Treasury yields rose on investor caution about the need to raise the government's debt ceiling as the United States faces the risk of a historic default in two weeks. read more

 

The U.S. dollar traded near a one-year high versus major peers ahead of key U.S. payrolls data due at the end of the week. The jobs data might offer clues on the timing of a tapering of Federal Reserve stimulus and the start of interest rate increases.

 

The dollar index , which tracks the greenback versus a basket of six currencies, edged up 0.20% to 94.02.

 

The euro fell 0.25% to $1.1592, while the yen rose 0.29% to $111.18

 

Gold prices eased to $1,757 per ounce, after rising on Monday to the highest since Sept. 23.

 

 

Investors eye Big Tech as stock market wobbles

(Reuters) - Technology stocks are bearing the brunt of a recent market selloff, putting a spotlight on how an extended downturn in the sector could weigh on broader equity indexes.

 

After Monday's sharp drop, the S&P 500 technology sector (.SPLRCT) is down 6.7% since the overall S&P 500 closed at a record on Sept. 2, compared with a 5.2% decline for the broader index over that time. (.N)

 

The tech-heavy Nasdaq Composite (.IXIC), meanwhile, is down 7.3% from its Sept. 7 closing high, getting closer to marking a 10% correction.

 

The tumble comes amid a cluster of worries that hit markets in recent weeks, including a looming unwind of the Federal Reserve's easy money policies, a jump in Treasury yields and a nasty battle among lawmakers over the U.S. debt ceiling. read more

 

Many investors are hesitant to cut their exposure to technology-focused stocks, which have led markets for most of the last decade and are expected to deliver strong earnings growth even if the economic climate worsens. Previous dips over the years have often been met by furious buying.

 

Still, a heavy weighting in broader indexes, comparatively elevated valuations and wide ownership have led some investors to worry over the repercussions of a prolonged period of underperformance for tech and tech-related names.

 

Here are a few of the metrics investors are studying as they weigh whether to stay the course in tech or pare back their holdings:

 

A CROWDED TRADE

 

Years of solid performance have made tech stocks a mainstay in portfolios across Wall Street, periodically spurring concerns that they may be susceptible to violent market swings if investors try to sell all at once.

 

Facebook (FB.O), Amazon (AMZN.O), Microsoft (MSFT.O) and Google-parent Alphabet (GOOGL.O) have ranked among the top five most popular hedge fund long positions for the past 15 consecutive quarters, a study by Goldman Sachs showed.

 

At the same time, 40% of fund managers surveyed by BofA Global Research in September said buying U.S. technology stocks was the market's most crowded trade, a designation tech stocks have received for three straight months.

 

The tech sector by itself holds a 27.7% weighting in the S&P 500, more than twice that of the number two sector, healthcare (.SPXHC). Adding four tech-related companies that are in other sectors -- Alphabet, Amazon, Facebook and Netflix (NFLX.O) -- boosts that weighting to 38.8%.

 

The technology sector trades at 25.8 times forward 12-month earnings estimates, compared with 20.7 times for the overall S&P 500, according to Refinitiv Datastream.

 

While growth and technology stocks have typically commanded greater valuations in recent years, some market participants worry that the category's reputation for delivering gains year after year has helped stretch their prices beyond levels that may be justified by fundamentals.

 

The tech sector's earnings held up much better than those of the broader market last year as the coronavirus pandemic wreaked widespread economic havoc. As the world emerges from lockdowns this year, tech's profit growth has not been quite as strong as S&P 500 companies overall.

 

The Thomson Reuters Trust Principles.

 

 

 

China risks slower growth without more market competition - U.S. study

(Reuters) - China risks slower growth if it does not do enough to spur market competition by allowing the private sector to play a bigger role in the economy and greater two-way flow in cross-border investments, a report showed on Tuesday.

 

"Without a market-oriented shift, China will struggle to maintain a growth potential that exceeds 3% annually by the middle of this decade," according to a report released by U.S. think tank the Atlantic Council and consultancy Rhodium Group.

 

China's economic growth has gradually eased from 2011 to 2020, expanding in the single-digits compared with the relatively big gains in the years just after it joined the World Trade Organization in late 2001. China has set a target to grow its economy by at least 6% in 2021 after it managed to eke out growth of 2.3% in pandemic-hit 2020.

 

While China has made progress in some areas such as trade, where it has cut tariffs to a level comparable with or below those of OECD economies, recent policy signs are at odds with a market-oriented course, the report said.

 

Beijing's sweeping crackdown on private firms in sectors from technology to education this year has raised the prospect of stronger state control in the years to come, the report said.

 

The pursuit of a so-called "dual-circulation" strategy to make China less reliant on the outside world, backed by President Xi Jinping, also risks backtracking on years of tighter economic integration and interdependence, it said.

 

"President Xi's pledge to make markets decisive at the start of his tenure is at risk of failure," according to the report.

 

The report said a relative lack of access to overseas investments by ordinary Chinese people has led to an abundance of capital domestically, leading to overcapacity investment in many sectors at home.

 

Inadequate market competition and inefficiency will reduce productivity and in turn gross domestic product - "potentially by trillions of dollars within five years", it warned.

 

Chinese reform advocates say Beijing has been avoiding potentially disruptive changes due to worries over economic and social stability and resistance from vested interests such as powerful state-owned companies, which Xi has described as the champions of the economy.

 

The Thomson Reuters Trust Principles.

 

 

 

China property sector default woes deepen amid Evergrande uncertainty

(Reuters) - Worries about rising debt defaults by Chinese property developers sapped investor sentiment on Tuesday amid fresh credit rating downgrades and uncertainty about the fate of China Evergrande Group as it scrambles to raise cash by selling assets.

 

Evergrande (3333.HK) is facing one of the country's largest-ever defaults as it wrestles with more than $300 billion of debt. The company last month missed making coupon payments on two dollar bond tranches.

 

The possible collapse of one of China's biggest borrowers has triggered worries about contagion risks to the property sector in the world's second-largest economy, as its debt-laden peers are hit with rating downgrades on looming defaults.

 

Evergrande on Monday requested a halt in the trading of its shares pending an announcement about a major deal. Evergrande Property Services Group (6666.HK) also requested a halt referring to "a possible general offer" for company shares.

 

China's state-backed Global Times said Hopson Development (0754.HK) was the buyer of a 51% stake in the property business for more than HK$40 billion ($5.1 billion), citing unspecified other media reports.

 

Evergrande declined to comment ahead of an official announcement, as trading in the company's shares remained suspended on Tuesday.

 

While investors awaited confirmation of the Evergrande stake divestment, Chinese developer Sinic Holdings (2103.HK) became the latest to be downgraded by Fitch Ratings on uncertainty over the repayment of its $246 million bonds maturing Oct 18.

 

Sinic's long-term issuer default rating was cut to 'C' from 'CCC', and came after the company announced that certain subsidiaries have missed interest payments on onshore financing arrangements, Fitch said in its report on Tuesday.

 

S&P Global Ratings also lowered its rating on the company, saying it had run into "severe liquidity problem and its debt-servicing ability has almost been depleted". It said the company was likely to default on its notes due on Oct. 18.

 

Sinic declined to comment on the ratings downgrades.

 

"Since the Evergrande crisis, investors have become more worried and focused about Chinese developer's repayment ability," Thomas Kwok, head of equity business at Hong Kong brokerage CHIEF Securities.

 

The liquidity issues have increased as many developers were not able to issue fresh debt to refinance, and as their ability to raise cash from selling properties dropped because of new regulations, he said.

 

"This will be a vicious cycle for the developers that are not strong enough, because there is not enough liquidity in the market for everyone."

 

MARKET IMPACT

 

The $5 billion Evergrande is likely to get from the reported unit stake sale would theoretically cover its near-term offshore bond payments. It has $500 million in bond coupons due by year-end, followed by a $2-billion dollar bond maturity in March.

 

Analysts have said the potential Evergrande deal signals the company was still working to meet its obligations. But any fire-sale of its assets would further amplify concerns about the rest of China's property sector and the broader economy.

 

Chinese homebuilder Fantasia Holdings' (1777.HK) dollar-denominated bonds lost nearly half their market value in a massive Monday selloff, after it said it had failed to make a $206 million international market debt payment on time.

 

In a statement, the property developer said it will assess the potential impact of the non-payment on the group's financial conditions.

 

An index of China high-yield debt (.MERACYC), which is dominated by developer issuers, hit its lowest since the pandemic drawdown in 2020, and has lost almost 20% since May - while comparable U.S. and European indexes have rallied.

 

Asian markets fell for a third straight session on Thursday as Evergrande's troubles added to broader investor worries about rising inflation and slowing world growth, while in Hong Kong the company's developer peers were under renewed pressure.

 

An index tracking Hong Kong-listed mainland property stocks (.HSMPI) fell 2.95% on Tuesday, compared to a 0.3% gain in the local benchmark (.HIS).

 

Shares in Guangzhou R&F Properties (2777.HK) and Sunac China Holdings (1918.HK) each fell 8% while the offshore yuan was also under pressure. Shares in Evergrande's electric vehicle unit eased after jumping on Monday.

 

Evergrande's dollar bonds have firmed marginally over recent days, but remain at distressed levels below 30 cents on the dollar.

 

The Thomson Reuters Trust Principles.

 

 

Malawi Not Utilizing Natural Resources to Create Wealth - Study

Findings from a recent analysis has revealed that despite being endowed with substantial minerals, gemstones, and waterbodies, Malawi has failed to take advantage of her abundant natural resources to create wealth for her citizens.

 

State-funded development think tank, the National Planning Commission (NPC) conducted the analysis through its Malawi Priorities Project, which is a research- based collaborative project implemented with technical assistance from the Copenhagen Consensus Centre (CCC) and the African Institute for Development Policy (AFIDEP).

 

The aim of the project is to provide a systematic process of prioritizing the most effective policy solutions to maximize social, environmental and economic benefits on every kwacha invested.

Under the project, NPC assessed the cost and benefit analysis of national resources management interventions in Malawi's fisheries and mining.

 

The analysis highlights two large-scale projects that could increase the value generated by mining and fisheries, namely artisanal and small-scale mining (ASM) Landing Centre and the Chipoka Port Fisheries Project.

 

NPC Malawi Priorities Project Coordinator Salim Ahmed Mapila presented the findings on Monday afternoon during a panel discussion the Commission has convened at its Head Office in Lilongwe.

 

Mapila said while the country is endowed with substantial mineral and water resources, informality, lack of sophisticated practices and value-addition, and limited linkages to trade markets limit how much these valuable sectors can contribute to this growth aspiration.

He observed that both sectors face similar barriers to generate more wealth for the country.

 

"ASM landing centres have substantial benefits, primarily by boosting gemstone and gold ASM revenues by 35 percent equivalent to MWK 10.17 billion per year by 2028. This benefit arises from a combination of improved production efficiency, expanding into new mineral reserves and increased value addition to extracted resources.

 

"This intervention could also generate benefits worth MWK 625 million in terms of avoided injury, improved sanitation at mine sites and avoided child labour, though the research team was not able to quantify this benefit precisely (due to lack of data)," he said.

 

The discussion featured Chairperson of the Natural Resource and Climate Change Services Committee at the Malawi Parliament, Welana Chilenga, Principal Secretary (PS) in the Ministry of Forestry and Natural Resources, Dr. Yanira Mtupanyama, PS for the Ministry of Mining, Dr. Joseph Mkandawire, and Dr. Tiwonge Mzumara-Gawa, who is a lecturer in Biological Sciences at Malawi University of Science and Technology as panellists.

In his contribution, Chilenga attributed the problem to inadequate capacity and human capital to implement the Mines and the Minerals Act (2019).

 

He cited failure by the Ministry of Mining to recruit and deploy District Ministry Officers in all the districts.

 

"It's not the equipment that is missing in the mining sector. Ownership is the problem that small-scale miners are grappling with," said Chilenga.

 

On the fisheries sector, Chilenga accused the ministry of failing to contain uncontrolled fishing on Lake Malawi.

 

"Because of uncontrolled fishing in Lake Malawi, we have lost everything now. Malawi doesn't have fish as of now. So, we should be talking about how we can bring back these resources. The Ministry of Mining is failing to implement the new Mining and Minerals Act. The Act has some penalties, which the ministry can use. The law is there, but they are failing to implement it. The ministry lacks the capacity to control illegal mining and fishing," he said.

 

Mtupanyama admitted that the ministry does not have the capacity to implement the statutes.

 

She also lamented inadequate funding allocations the two sectors get from the government.

 

NPC Director General Dr. Thomas Chataghalala Munthali said it is vital that mine sites are properly managed during the mine's useful life, and the land rehabilitated once mining activities cease to ensure minimal environmental impact.

 

Munthali cautioned that miners will only formalize if the benefits of formalization outweigh the costs.

 

"The landing centres need to provide true value to miners - in the form of better practices and equipment, higher safety practices and more income - for the intervention to be successful," he said.

 

"Overall, the researchers find that the investment would return 3.6 kwacha for every kwacha invested. The landing centres could be a first step towards generating more wealth from minerals and gemstones in Malawi, laying the foundation for a more modern, vibrant and environmentally sustainable mining sector," added Munthali.-Nyasa Times.




Taleveras Says LNG Demand Growth is Here to Stay

As global markets recover from the Covid-19 pandemic, LNG markets globally are tightening, with demand growth led by anticipated surge in Asian and Latin America demand.

 

According to key Industry participants at the recent Gastech summit held in Dubai, the longer-term outlook is robust, driven particularly by markets in Asia as gas provides about one-quarter of the world’s energy supply and continues to play a critical role in the global energy system.

 

Igho Sanomi, Taleveras Global Head of Gas, who spoke on the sidelines of Gastech 2021, said: “There is hardly any other energy source that provides such broad wins, being that gas is used for heating, cooling and cooking in our everyday lives.  It energizes heavy industries, contributes to key economies and keeps emissions at very impressive minimal levels. At Taleveras over the last 5 years, we have taken a long term view on the future of Gas and pursued our business plan aggressively. This greatly propelled our pursuit and development of a strong LNG portfolio at a time when most market participants had little belief in the future of LNG. In essence, we called the LNG market correctly and still continue to keep a long term view. It has been a challenging Journey so far, primarily due to extreme levels of market volatility, coupled with disruption and supply challenges in Nigeria, but overall we remain firm, resolute and optimistic in our strategy to pioneer the involvement of Nigerian and African owned establishments in global LNG trades”.

 

Taleveras has joined a growing list of global trading firms increasing their presence in the liquefied natural gas market, raising its delivery volumes by almost 30 per cent year on year.

 

Taleveras is still looking to cement its role as Africa’s leading independent trader of Liquefied Natural Gas, the fastest growing fossil fuel. Taleveras said it plans to increase and expand its supply sources of LNG in other to maintain a vibrant portfolio to super such demand growth.

 

Global demand for LNG has witnessed a significant jump in recent times. Taleveras believes LNG trade demand will grow at an average of 3.4% a year between 2019 and 2040.  The company however expects LNG demand from Asia – especially China, to contract from the year 2036.

 

“As the world continues to deal with the severe impacts of market demand and the impact of Covid- 19, the fundamentals are supported by a growing population and energy demand, LNG will continue to remain a high growth industry based on a growing economy worldwide,” a Taleveras Senior Trader on LNG, had said during a presentation.

 

To many industry watchers and analysts, Taleveras, which has enjoyed success since its incorporation in the late nineties, has had to navigate innumerable challenges in the ever-volatile Oil and Gas industry. Today Taleveras is increasingly gaining a respected position as a resilient company that keeps thriving on in the Gas Markets.

 

Taleveras, one of Africa’s leading integrated energy conglomerates, was founded in the late nineties. The company operates and invests in the upstream, midstream, downstream, and power sector of the energy industry.

 

 

 

 

 

 

 

 


 


 


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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