Major International Business Headlines Brief::: 12 October 2021

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Major International Business Headlines Brief::: 12 October 2021

 


 

 


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ü  China floods: Coal price hits fresh high as mines shut

ü  PM expected to back loans for gas price-hit firms

ü  UK job vacancies reach 20-year high

ü  Budget: Little room for more spending, says IFS

ü  Carbon dioxide supply deal agreed between government and firms

ü  Nobel economics prize rewards work on minimum wage

ü  Gas price rises: Kwarteng asks Treasury to help firms over cost

ü  China bans British beef again over mad cow disease

ü  Asos boss exits as firm warns profits to plunge

ü  Gas prices: Energy price cap not fit for purpose, say suppliers

ü  Evergrande misses 3rd round of bond coupon payments, intensifying
contagion fears

ü  IMF board backs Georgieva after review of data-rigging claims

ü  Asia shares dip on inflation worries, Evergrande jitters

ü  Japan confronts rising inequality after Abenomics

ü  Travel is back, UK's easyJet says after $1.5 billion pandemic loss

ü  LG units say results accounted for $918 mln costs from GM's Bolt recall

ü  Malawi: President Chakwera 'Very Sad' With Fuel Prices Increase

ü  Nigeria: 2022 Budget - Manufacturers List Bottlenecks, Seek Fiscal,
Monetary Policy Synergy

ü  Nigeria: Moody's - Oil Industry Must Spend U.S.$542 Billion to Avoid
Supply Shock

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

China floods: Coal price hits fresh high as mines shut

The price of coal used in China's power plants has surged to a new record
high as another of the country's key mining regions is hit by flooding.

 

Heavy rains hit Shanxi in recent days, the country's biggest coal producing
province, after record floods struck the mining region of Henan in July.

 

Thermal coal on the Zhengzhou Commodity Exchange rose as much as 8% on
Tuesday.

 

The floods further complicate China's efforts to increase fuel supplies to
ease its deepening energy crisis.

 

Shanxi Province, which produced around a third of China's coal supplies this
year, was forced to temporarily shut dozens of mines due to flooding.
Although some sites are now slowly resuming operations.

 

At least 15 people have died during the severe flooding that has affected
more than 1.76 million people in the province, local officials said on
Tuesday.

 

Torrential rain last week led to houses collapsing and triggered landslides
across more than 70 districts and cities in the northern province.

 

Even before the flooding, China was already facing an energy shortage which
has caused power cuts in large parts of the country.

 

In recent weeks, energy firms have been forced to limit electricity supplies
to millions of homes and business.

 

On Friday, Beijing reportedly ordered China's coal mines to boost output.

 

The move was the latest attempt by authorities to increase coal supplies
after prices hit record highs and electricity shortages forced energy firms
to ration power.

 

Since last month, a series of power cuts has forced factories to cut back
production or stop operations completely

 

Manufacturing hubs in the northeast of China have been hit particularly
hard.

 

The latest rise in the price of thermal coal prices comes on top of a 12%
jump on Monday.

 

Energy prices have been rising across the world as the global economy starts
to emerge from the pandemic.

 

On Monday, the cost of Brent crude hit its highest since level October 2018,
while US-traded oil touched a fresh seven-year-high.-BBC

 

 

 

PM expected to back loans for gas price-hit firms

The Department for Business expects to get Prime Minister Boris Johnson's
backing for a package to help energy-intensive industries as gas prices
soar, the BBC understands.

 

On Monday, Business Secretary Kwasi Kwarteng asked the Treasury to support
firms hit by rising energy costs.

 

The proposals could involve loans worth hundreds of millions of pounds.

 

The Treasury is said to be still analysing the proposal, while Number 10 has
declined to comment.

 

Businesses have said they hope for a "swift response" from the Treasury.

 

High energy costs have been forcing manufacturers to warn of higher prices
for their goods as they pass on increases to consumers.

 

Other firms have said they may be forced to shut down their factories if the
rising cost of gas and electricity makes it uneconomic for them to produce
their goods.

 

There are fears in government that without intervention, factories could
close and tens of thousands of jobs could be under threat as high energy
costs bite, says BBC political correspondent Nick Eardley.

 

The formal proposal by Mr Kwarteng follows days of conversations with
leaders from affected industries, as well as a very public row with the
Treasury about the status of talks between the departments.

 

There is reluctance to prop up companies which would normally be
competitive, so a support package is likely to involve loans rather than
grants, our correspondent says.

 

Why are gas prices so high?

Is the UK headed for a gas shortage this winter?

Demands for support from energy-intensive industries have been growing
louder, but not all companies are affected in the same way.

 

Some have long-term contracts to buy energy at fixed prices, protecting them
from short-term increases, but others do not.

 

Businesses themselves have called for their energy costs to be capped, in
the same way that households currently benefit from a price cap imposed by
regulator Ofcom.

 

But that would risk simply passing on the extra costs to energy suppliers,
says our correspondent.

 

Direct subsidies would add to the burden on taxpayers, at a time when
Chancellor Rishi Sunak is expected to seek to curb public spending in his
next Budget on 27 October.

 

Why are gas prices so high?

There are many reasons, both in the UK and around the world.

 

There's been a shortage of gas and energy in many countries as they emerged
from lockdown and industry reopened.

 

A cold winter in Europe last year also put pressure on supplies and, as a
result, less gas is being stored than normal.

 

On top of that, the UK has fewer gas storage facilities than some countries
- meaning it buys more on the wholesale market and is exposed to sharp price
rises.

 

There's also increased demand from Asia (which also suffered a cold winter)
for liquefied natural gas. And there is a suspicion that Russia, a major gas
supplier, is restricting output - an accusation it denies - which, following
the law of supply and demand, has fuelled price rises.

 

This has helped push up gas prices in the UK, Europe and Asia. Since
January, they've risen 250%. And prices have soared 70% since August
alone.-BBC

 

 

 

UK job vacancies reach 20-year high

The number of job vacancies in the UK has hit a record high, according to
the latest official figures.

 

Vacancies hit 1.1 million between July and September, the Office for
National Statistics said, the highest level since records began in 2001.

 

The largest increase in vacancies was in the retail sector and in motor
vehicle repair, it said.

 

The UK unemployment rate was estimated at 4.5%, compared with a rate of 5%
before the pandemic.

 

"The jobs market has continued to recover from the effects of the
coronavirus, with the number of employees on payroll in September now well
exceeding pre-pandemic levels," said Darren Morgan, director of economic
statistics at the ONS.

 

"Vacancies also reached a new one-month record in September, at nearly 1.2
million, with our latest estimates suggesting that all industries have at
least as many jobs on offer now as before the onset of Covid-19."

 

Recovery concerns

Chancellor Rishi Sunak said it was "encouraging" to see the government's
jobs strategy working.

 

"The number of expected redundancies remained very low in September, there
are more employees on payrolls than ever before and the unemployment rate
has fallen for eight months in a row."

 

However, Yael Selfin, chief economist at KPMG UK, said labour market
shortages "could stunt" the UK's economic recovery from the pandemic.

 

"The recovery is testing the capacity of the economy to adjust to a new
post-pandemic environment, a task made more difficult by the reduced
availability of overseas workers," she said.

 

"Acute skill shortages have pushed vacancies to record levels for a second
month in a row in September, as employers struggled to find skilled staff."

 

Sectors that had large increases in vacancies included accommodation and
food services, professional activities and manufacturing.-BBC

 

 

 

Budget: Little room for more spending, says IFS

There is no room for big spending announcements for hard-pressed public
services in this month's Budget, the Institute for Fiscal Studies says.

 

The influential think tank has published new analysis, suggesting borrowing
will be lower than forecast.

 

But the IFS says if the chancellor hopes to balance the government's
finances, he will still have to keep a tight rein on spending.

 

That's despite his planning the biggest tax rises for more than 25 years.

 

Mr Sunak is due to deliver the next Budget on 27 October.

 

"Rishi Sunak, a Conservative chancellor, is presiding over an increase in
the tax burden to record levels in the UK and an increase in the size of the
state (public spending as a fraction of national income) to levels not seen
since the days of [Margaret] Thatcher," said IFS director Paul Johnson.

 

"Yet the combined effects of ever-growing spending on the NHS, and an
economy smaller than projected pre-pandemic, mean that he is still likely to
be short of money to spend on many other public services," he said.

 

Mr Johnson said that meant "little or no scope" to increase spending on
things such as local government, the justice system and further education,
which have seen sharp cuts over the last decade.

 

Spending on services other than health, such as defence, schools and aid,
might also have to increase by less than Mr Sunak was planning pre-pandemic,
the IFS said.

 

Mr Johnson said the chancellor would be "hoping against hope" that the
economy performed better than expected over the next few years, pushing up
tax revenues that would "help to dig him out of what still looks like a
fair-sized hole".

 

Lower borrowing

The IFS produces analysis of the country's finances in its Green Budget
every year. Like a government green paper, the aim is to inform and provoke
discussion around budgetary decisions.

 

The report highlights the UK's strong economic recovery this year, in the
wake of the vaccine roll-out, meaning that borrowing this year could be more
than £50bn lower than was forecast in March. But it says less rapid growth
after this year's bounce back would mean the public finances improve more
slowly in the years to come.

 

Anyone making forecasts like these a year ago would have been laughed at and
called a crazy optimist.

 

The amount the government is expected to borrow this financial year is £50bn
less than was predicted even just back in March.

 

That suggests those arguing against cutting public spending too soon, for
the sake of reducing that borrowing, were right.

 

In a pandemic, they argued, to prioritise sorting out the public finances
before securing the economic recovery was putting the cart before the horse.

 

In the meantime, the vaccine-led recovery has brought tax money rolling into
the Treasury much faster than was expected.

 

With 7% economic growth predicted this year and borrowing dropping rapidly,
we can now see how quickly, when the economic horse is accelerating, the
public finance cart comes trundling behind.

 

Christian Schulz, director of European Economics at investment bank Citi,
which collaborated on the Green Budget, said the global economic outlook had
improved.

 

However, the UK economy was still likely to be 4% short of its pre-pandemic
trajectory at the end of 2021, he said.

 

"The medium-term recovery also remains far from secure," said Mr Schulz.
"Instead, an uneven rebound to date points to a more profound Brexit- and
Covid-related reconfiguration in the years ahead.

 

The Green Budget analysis also found:

 

·         Borrowing for 2022-23 onwards should continue to be at least £20bn
lower than forecast in the March 2020 Budget

·         The government's budget should return to surplus from 2023-4

·         However, uncertainty is "incredibly high" - the economy could grow
either more quickly or more slowly than currently forecast - meaning tax
plans might have to change

·         The costs of financing government debt will be £15bn higher this
year, and in future years, than was forecast in the March 2020 Budget

·         There may be more "wiggle room" by 2024-25 if economic growth is
strong, but there will still be big demands on government spending,
including the NHS, the fallout from Covid, the levelling-up agenda, social
care and the transition to a lower carbon economy

·         The IFS suggested that in order to cope with long-term pressures
on spending, the chancellor might find he needs to raise taxes further, on
top of the 1.25% health and social care levy announced last month.

 

For the levy to meet future spending demand in those areas, the IFS
estimates it could need to more than double to 3.15% by the end of this
decade.-BBC

 

 

 

Carbon dioxide supply deal agreed between government and firms

A deal to avert another carbon dioxide crisis in the food and drink industry
has been extended until early 2022.

 

US firm CF Industries, a key CO2 producer in the UK, has agreed to continue
supplies of the gas.

 

It said that should give the government and firms time to find other sources
of CO2, used in fizzy drinks and for keeping food fresh, as well as to stun
pigs and chickens before slaughter.

 

Firms will now have to pay more for their CO2, but it is unclear how much.

 

Last month, the government stepped in to subsidise one of the firm's plants
after its shutdown due to high gas prices threatened food supplies.

 

CF Industries suspended production at two sites - Cheshire and Billingham -
which make 60% of the UK's commercial carbon dioxide.

 

It reopened its Billingham plant in north-east England after the government
agreed to meet the costs of running it for three weeks.

 

Billingham produces up to 750 tonnes of CO2 per day as a by-product of
producing ammonia for fertilizer. CF Industries' plant at Ince in Cheshire
remains closed with no date given for a reopening.

 

The government said: "CO2 suppliers have agreed to pay CF Fertilisers a
price for the CO2 it produces that will enable it to continue operating
while global gas prices remain high, drawing on support from industry and
delivering value for money for the taxpayer."

 

The agreement meant industry could have confidence it would receive future
CO2 supplies, without further taxpayer support, said the government.

 

The British Meat Processors Association said the agreement provided "some
reassurance that supplies will be maintained".

 

"However, industry has been given no detail on what the price will be or how
it will be calculated going forward," a spokesperson added.

 

"We understand that Business Secretary Kwasi Kwarteng took the decision to
temporarily exempt parts of the CO2 industry from competition law to
facilitate this agreement. What we need now is some detail and transparency
around how the new pricing structure will work."

 

Ian Wright, chief executive of the Food and Drink Federation, said the
agreement was "welcome news".

 

But he added: "The increased cost of buying CO2 is yet another burden on the
food and drink industry, which is already facing enormous stresses.

 

"This will, of course, add more pressure on prices for shoppers and diners."

 

It looks like there will be enough CO2 to keep Christmas beers bubbly - but
after that, there are no guarantees.

 

There's an ominous line in the CF Industries press release. They expect CO2
users to develop "robust alternative sources" between now and January.

 

That won't be easily done. Lots of industrial processes produce CO2, but few
produce a stream so pure and reliable that you'd want to dissolve it in your
lemonade.

 

Distributor Nippon Gases has warned that supply is tight across Europe, so
imports will be hard to come by.

 

The government says that the firms which need the CO2 from Billingham will
be paying more for it - and whatever long-term solution does emerge, it's
likely to be more expensive too.

 

But the UK only needs about 600,000 tonnes of CO2 a year. At about £200 a
tonne before the current crisis, that's about £120m, relatively small beer
for industries that count their turnover in the billions.

 

Compared to the other pressures those industries face - staff shortages, and
higher costs for energy and shipping - more expensive CO2 is an extra cost
they don't need, but it won't be their biggest headache.

 

When CF shut its facilities after making fertiliser became uneconomic
because of the rising price of wholesale gas, it cut off a vital source of
CO2 for other sectors.

 

Supermarkets began reporting limited stocks of some food items, while the
pig industry warned that if slaughterhouses could not process animals, then
farmers would have to cull their stocks.

 

The US firm said it now expected the UK government and industrial gas
customers to "develop robust alternative sources of CO2 as part of a
long-term solution for meeting demand in the country".

 

Last month, it emerged the British food industry would be forced to pay five
times more for carbon dioxide as part of a government deal with CF
Industries to restart production in the UK.

 

Environment Secretary George Eustice said carbon dioxide prices would rise
from £200 per tonne to £1,000.

 

Households, too, are being hit by higher energy bills, with those on
standard tariffs, with typical household levels of energy use, seeing bills
go up by £139 to £1,277 a year on average.

 

Several energy suppliers, unable to pass on wholesale prices to consumers on
fixed deal, have gone out of business. Their customers have been switched to
other suppliers, but will be put on variable contracts that will be higher
than previous deals.

 

Support

Meanwhile, the business department has sent the Treasury a formal request
for support for energy-intensive industries hit by high gas prices, the BBC
understands.

 

It came after talks between ministers and industry leaders earlier on
Monday.

 

A source said: "Everyone in government understands the importance of this
situation.

 

"We need to solve this quickly."

 

Details of the proposal from Mr Kwarteng have not been disclosed but are
thought to focus on a temporary solution to high energy prices.

 

On Sunday, Mr Kwarteng told the BBC's Andrew Marr programme the situation
was "critical" and said he was "looking to find a solution".

 

Mr Kwarteng said there were Treasury talks about support measures to ease
the impact on firms. However, a Treasury source later said the business
secretary had been "mistaken".

 

Sectors such as ceramics, paper and steel manufacturing have called for a
price cap, though talks with government on Friday failed to reach a
solution.-BBC

 

 

 

Nobel economics prize rewards work on minimum wage

David Card, Joshua Angrist and Guido Imbens have been awarded this year's
Nobel prize for economics for work that "challenged conventional wisdom".

 

The trio shared the prize for pioneering work in the use of "natural
experiments".

 

Natural experiments use real-life situations to work out the impact of
government decisions.

 

Prof Card is best known for his study of the impact of minimum wage
increases on employment in US states.

 

His findings prompted researchers to review their opinion that such
increases always lead to falls in employment.

 

Economists cannot run lab experiments to test their theories, so have to
rely on theoretical models and the examination of complex, real life
situations.

 

The winners' work had "substantially improved our ability to answer key
causal questions, which has been of great benefit to society," said Peter
Fredriksson, chair of the Economic Sciences Prize Committee.

 

Canadian-born Prof Card, who works at University of California, Berkeley,
receives half of the 10 million Swedish crowns (£839,000) prize, while
Israeli-American Joshua Angrist from MIT and Guido Imbens, a Dutch academic
at Stanford University, share the other half.

 

Their work solved methodological problems to show that precise conclusions
about cause and effect can be drawn from natural experiments.

 

Speaking to reporters, Prof Imbens said he was "absolutely thrilled to hear
the news, in particular... hearing that I got to share this with Joshua
Angrist and David Card who are both very good friends of mine".

 

He added that Prof Angrist had been the best man at his wedding. "I'm just
thrilled to share the prize with both him and David."

 

No joke

Prof Card initially thought the news of the award was "a joke" played on him
by an old high school friend, he told the BBC.

 

His work on the minimum wage was conducted at Princeton in the 1980s in
collaboration with Alan Krueger, who went on to become assistant secretary
of the Treasury under President Obama.

 

They surveyed restaurants in New Jersey before and after the introduction of
a minimum wage in the state, an approach that was quite unusual at the time,
Prof Card said.

 

But he said their findings, that the minimum wage had not led to significant
job losses, was not immediately accepted.

 

"People thought we were either cooking the books or had lost our minds or
did something untoward or foolish," he said.

 

However the methodology, of collecting and analysing real world data, opened
people's eyes to a new way of analysing the economy, he said.

 

His subsequent work has included the impact of immigration on domestic
employment in the US and how company wage policies determine gender and
ethnic pay gaps.

 

UC Berkeley said Prof Card had "challenged orthodoxy and dramatically
shifted understanding of inequality and the social and economic forces that
impact low-wage workers".

 

Taken together, the work by the three economists "revolutionised empirical
work" in economics, the Nobel award committee said.

 

Although not one of the original Nobel Prizes, the economics award is
administered by the Nobel Foundation and is the last to be announced each
year.

 

The other Nobel prizes were established by Alfred Nobel's will in 1895.

 

The economics prize, officially known as the Sveriges Riksbank (Sweden's
central bank) Prize in Economic Sciences in Memory of Alfred Nobel, was
created in 1968.

 

Last year, the prize was won by Paul Milgrom and Robert Wilson of Stanford
University for their work on making auctions run more efficiently.

 

They used game theory, which uses mathematics to study decision-making
conflict, and strategy in social situation, to explore the behaviour of
bidders, which in turn helped in developing formats for the sale of aircraft
landing slots, radio spectrums, and emissions trading.

 

In 2019, it was awarded to Abhijit Banerjee, Esther Duflo and Michael
Kremer, for their work on the causes and remedies of poverty.-BBC

 

 

 

Gas price rises: Kwarteng asks Treasury to help firms over cost

The business secretary has asked the Treasury to support industries hit by
soaring energy costs, a source has told the BBC.

 

Kwasi Kwarteng's formal request follows talks between ministers and industry
leaders.

 

The details have not been disclosed, but they are thought to focus on a
temporary solution to high prices.

 

Sectors such as steel manufacturing have called for a price cap amid fears
for the survival of some factories.

 

There are a number of reasons for a steep rise in gas prices over the past
year - including the reopening of industry after Covid lockdowns.

 

A source told the BBC that "everyone in government understands the
importance of this situation".

 

"We need to solve this quickly," they added.

 

Mr Kwarteng's proposal follows confusion over the weekend, when his claim to
be in talks with the chancellor about potential support was disputed by a
Treasury source.

 

On Monday, the prime minister's spokesman said Treasury officials were
involved in talks with the Department for Business, Energy and Industrial
Strategy (BEIS).

 

"As you would expect, ministers from BEIS are working across government,
including with the Treasury, on this important issue, the challenges
currently facing industry in light of global gas prices, and that will
continue," he said.

 

Gas prices

Darren Jones, Labour MP and chairman of the Commons BEIS committee, welcomed
Mr Kwarteng's request for help and stressed the importance of finding
short-term solutions.

 

He said a one-off windfall tax on gas producers was worth considering,
because they had "made significant profits" during recent price
fluctuations.

 

But he also said the UK should be focusing more and renewable energy sources
and nuclear.

 

"Any subsidy from government should be on proviso that we bring forward,
both from private and public sector, investment to move away from gas
powered sources of energy to avoid these problems in the future," he added.

 

Dr Richard Leese, chairman of the Energy Intensive Users' Group which
represents manufacturers, welcomed Mr Kwarteng's "urgency" and said he hoped
for an "equally swift response" from the Treasury.

 

There have been bleak warnings about the potential impact of the spiralling
energy price.

 

One government source warned of factories closing forever, and thousands of
job losses as a result.

 

But despite that, ministers have struggled to maintain a united front over
the past day.

 

When the business secretary told the BBC he was in talks with the
chancellor, a Treasury source said he was wrong.

 

With the prime minister on holiday, it was left to his team to insist today
that ministers were working across government to find solutions.

 

Tonight we have some clarity - the business secretary has made formal
proposals. A source said an urgent solution was needed.

 

It's now up to the Treasury to decide whether to accept them.

 

BBC political correspondent Adam Fleming said earlier that business minister
Lee Rowley, rather than Mr Kwarteng, was due to lead Monday's meeting - and
would lead another with steel bosses on Tuesday.

 

Ministers also met industry leaders on Friday.

 

Dave Dalton, chief executive of the British Glass trade body called for
"immediate action" following that meeting.

 

He said some members of his group might have to shut production permanently,
although no firm had been forced to do so yet.

 

Adrian Curry, managing director of UK-based Encirc, one of the largest
container glass plants in Europe, said industry was not asking for a
bailout, but the situation for some companies was critical.

 

"We pay more for our energy than competitors in other countries," he told
the BBC. He said his company would normally spend £40m a year on energy, but
was now looking at bills up to £100m.

 

There are many reasons, both in the UK and around the world.

 

There's been a shortage of gas and energy in many countries as they emerged
from lockdown and industry reopened.

 

A cold winter in Europe last year also put pressure on supplies and, as a
result, less gas is being stored than normal.

 

On top of that, the UK has fewer gas storage facilities than some countries
- meaning it buys more on the wholesale market and is exposed to sharp price
rises.

 

There's also increased demand from Asia (which also suffered a cold winter)
for liquefied natural gas. And there is a suspicion that Russia, a major gas
supplier, is restricting output - an accusation it denies - which, following
the law of supply and demand, has fuelled price rises.

 

This has helped push up gas prices in the UK, Europe and Asia. Since
January, they've risen 250%. And prices have soared 70% since August alone.

 

Trade group UK Steel told the BBC that Boris Johnson needed to take control
before it was too late - although it described as "really good news" an
announcement that the country's third largest steel maker, Liberty Steel,
would restart operations at its plant in Rotherham this month.

 

The Unite union also called on the prime minister to "get a grip" to avert
job losses if companies had to shut production because they could not cope
with the increased cost of energy.

 

Downing Street has said Boris Johnson is continuing "to address the current
issues around fuel and supply chains" while on holiday, after Labour accused
the government of having "put its out of office on" over the weekend.

 

However, Conservative MP Mark Harper said the government should resist
demands for financial support.

 

Domestic energy consumers have a certain amount of protection from rising
prices due to a price cap, which sets the maximum price suppliers in
England, Wales and Scotland can charge customers on a standard - or default
- tariff.

 

However, the cap was increased on 1 October, meaning about 15 million
households face a 12% rise in energy bills.

 

Industry has no such cap, meaning they are open to the risk of an unlimited
rise in prices.

 

Already manufacturers and services are warning they will have to pass on
their rising costs to consumers. And as energy costs are a big driver of
inflation, few consumers and households will escape the consequences of the
current crisis.-BBC

 

 

 

China bans British beef again over mad cow disease

China has banned British beef imports of cattle under 30 months of age after
a case of bovine spongiform encephalopathy (BSE), or mad cow disease, in the
UK last month.

 

The ban took effect from 29 September, according to a statement from the
General Administration of Customs.

 

China has yet to restart buying beef from the UK after agreeing in 2018 to
lift previous restrictions.

 

Beijing imposed a ban in the 1990s during earlier outbreaks of BSE.

 

In September, the UK's Animal and Plant Health Agency (APHA) said a case of
BSE had been confirmed on a farm in Somerset.

 

How BSE crisis shook our faith in food

In 2018, China ended a two-decades-long ban on imports of beef from the UK,
which was first introduced after the outbreak of BSE in the 1990s.

 

At the time, the UK government said the lifting of the ban would be worth
£250m to British producers over the next five years.

 

It came after years of site inspections and negotiations between officials
in London and Beijing.

 

In response to the latest move, the UK's Department for Environment, Food
and Rural Affairs said it was working to reassure Chinese authorities that
the case of BSE had been successfully managed and to ensure that import
conditions can be met.

 

The UK's chief veterinary officer, Christine Middlemiss, said: "We have some
of the highest levels of biosecurity in the world, which are supported by
robust control systems. Our products are safe and should continue to be
traded."

 

In September this year, the US announced it was lifting its decades-old ban
on imports of British lamb.

 

The US had stopped British lamb imports since 1989, following the first
outbreaks of BSE.

 

The previous year British beef exports to the US resumed for the first time
in more than 20 years.

 

British beef was banned by Washington after the BSE outbreak in 1996.-BBC

 

 

 

Asos boss exits as firm warns profits to plunge

Asos has announced its chief executive is leaving with immediate effect as
the online fashion giant warned that rising costs are set to hit its
profits.

 

Nick Beighton is stepping down after six years in the role and the
day-to-day running of the firm will be taken over by Asos' finance chief.

 

Asos also cautioned that next year's profits could fall by as much as 40%.

 

The company had benefited from lower rates of people returning clothing
during Covid-19 lockdowns.

 

Asos said this had resulted in £67.3m of cost savings, but it said that the
levels of returns were now normalising.

 

Profits are also likely to be affected by increased freight costs, Brexit
duty, outbound delivery costs and higher wages.

 

While adjusted pre-tax profit rose 36% to £193.6m for the 12 months to 31
August, Asos now expects this figure to fall to between £110m and £140m next
year.

 

Asos share price

Asos's share price tumbled by 15% in early trading before regaining a little
ground. Its share price is down 42% since the beginning of 2021.

 

The warning of lower future profits overshadowed its results for the year to
31 August, which showed sales rose 22% to £3.9bn.

 

Returns

Asos said it had attracted another 1.4 million customers over the past year
as people turned to online shopping amid lockdowns.

 

Throughout the period leisurewear became more popular, and this added to
profits as it is less likely to be returned than more formal clothes.

 

Asos said returns were already normalising, adding that the new customers it
attracted in the last year were more likely to send clothes back.

 

"Asos has enjoyed a huge boost to trading over lockdowns, albeit for
less-lucrative casual wear as its core demographic was stuck at home," said
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

 

"A reluctance to leave the house meant return rates were lower, resulting in
XL margins. However, the tailwinds are easing and the Asos bubble has
burst."

 

Asos also set out changes at the top of the business to "deliver next phase
of global growth".

 

It said Mr Beighton "and the board have agreed that now is the right time
for him to step down" as chief executive. A search for his replacement is
under way but in the meantime chief financial officer Mat Dunn will oversee
the day-to-day running of the business.

 

The company's chairman, Adam Crozier - who will also be leaving Asos shortly
to become chairman of BT - said the firm had a new five-year strategy and Mr
Beighton had not wanted to stay for at least half of that so it was better
to make the change now.

 

"Asos's management and board have spent considerable time over recent months
developing and validating a clear strategic plan to accelerate international
growth, building on Asos's undoubted strength in the UK," he said.

 

"Key to that is ensuring that we have the right leadership in place for the
next phase, and the changes we are announcing today are designed to ensure
we deliver against our clear strategic intent."

 

Asos has been one of the big winners in this pandemic as people turned to
online shopping during lockdowns. But it's facing the same supply chain
problems as everyone else in retail including a host of increasing costs -
from pay for warehouse workers to the shipping of containers of clothes from
the far east, which is likely to put a huge dent in its profits for next
year.

 

Getting the right products at the right time is also challenging. And
shoppers are now settling back into to old habits when it comes to returns.

 

Younger online shoppers often order multiple products and send back those
they don't want. But last year it saw fewer returns as its customers
switched to less fitted items like leggings and hoodies.

 

But those charges are now starting to normalise along with overall sales.
Asos has outlined ambitious plans for expansion over the next three years
but that will be without its chief executive Nick Beighton who's leaving
with immediate effect - a surprise announcement after 12 years with the
business.

 

Richard Lim, chief executive of Retail Economics said Mr Beighton's
departure had come as "huge surprise" and Asos was "losing someone that has
been instrumental to its success over the last decade".

 

"The share price has been under recent pressure reflecting the challenges of
delivering stellar levels of growth in a more hostile environment and tough
comparisons from last year.

 

"Supply chain disruptions, fierce competitor dynamics and an intense focus
on sustainability have created a more challenging outlook for the business
over the coming years and seemingly resulted in a big boardroom shakeup."

 

Mr Beighton, who has been with Asos for 12 years in total, said in a
statement he had enjoyed "every moment" of his time at the firm.

 

He said when he joined Asos had fewer than 200 people and sales of £220m,
turnover was now almost £4bn selling to 26 million customers in 200
countries.-BBC

 

 

 

Gas prices: Energy price cap not fit for purpose, say suppliers

The energy price cap protecting households from sharp rises in gas prices is
"not fit for purpose", suppliers have said.

 

Natural gas prices are at record highs, which has led to some domestic
energy firms failing as they are paying more for gas than they are able to
charge.

 

Suppliers have warned that consumers could face a "huge cost" from these
firms going out of business.

 

There are also calls for an energy price cap to help small businesses.

 

Gas prices are at record highs as economies around the world begin to
recover from the Covid pandemic.

 

Domestic customers are partly protected from sharp rises by a price cap -
which sets the maximum price suppliers in England, Wales and Scotland can
charge customers on a standard tariff - although energy regulator Ofgem has
warned that households will see further "significant rises" in the spring,
when the cap is reviewed.

 

Last month, nine energy companies went out of business, forcing 1.7 million
customers to move to new suppliers and on to higher rates.

 

Paul Richards, chief executive of Together Energy, which he said is
currently making losses, told the BBC that while he supported a price cap to
protect customers, the current mechanism "is not fit for industry, nor is it
fit for customers".

 

"Crazy, just crazy" is how the nursery and soft play owner Gordon Foster
describes the sharp rise in energy prices, shaking his head in dismay.

 

Businesses typically fix their energy bills a few years in advance, known as
"hedging".

 

Mr Foster is one of the unlucky ones whose energy contract is up for
renewal, and at the moment he's looking at paying eight times his current
rate, taking up a contract that would tie him in for years.

 

The alternative is paying sky high prices now without a contract, and
keeping his fingers crossed that prices will stabilise.

 

For him, as for others, this sudden jump in costs makes parts of the
business unviable, and certainly means he has to put his prices up for his
customers.

 

While households might have an energy cap in place to protect them from such
eye-watering spikes in global markets, we are all exposed to the impact of
such costs for businesses. Ultimately they feed through to everyone.

 

He said while the cap protected customers in the short term, he thought
there was somewhere between £1bn and £3bn in costs which would be spread
back across business and households as a result of failed suppliers.

 

Derek Lickorish, chairman of Utilita Energy, which has more than 800,000
customers, said there was no doubt there would be a cost paid by consumers
for failed firms.

 

graphic: gas prices over last year updated

"The government has to look at the means by which they can support not only
energy suppliers, but also big industry," he said.

 

Mr Lickorish said he would like to see the price cap reviewed four times a
year, rather than the current two, and for a longer period of gas prices to
be considered in setting it.

 

Stephen Murray, head of energy, commercial and partners at
Moneysupermarket.com, said that while the usual advice for consumers was to
shop around, for now it was to stay put, with those on a fixed deal likely
to be better off.

 

The price cap provided "some level of protection", he said, but "that comes
at a cost and we've seen that through failed suppliers".

 

Business group the British Chambers of Commerce has called for a similar cap
to be introduced for the energy bills of small and medium sized businesses -
those with 250 employers or fewer.

 

These firms mostly buy their energy several years in advance, so those whose
contracts are due for renewal now are facing a "difficult time", it said.

 

The group's co-executive director Claire Walker said the increasing pressure
on these sized businesses was "becoming dire" and said that a price cap
would give them the confidence to maintain normal business activities.

 

Dave Dalton, chief executive of British Glass, said he thought a cap would
help but was probably "too little, too late" and that an "immediate
intervention" was needed.

 

The government said it was in regular contact with business groups to
explore ways to manage the impact of global prices.

 

Business Secretary Kwasi Kwarteng met leaders from heavy industry on Friday
amid warnings that some sectors could have to shut down, but they failed to
find any solutions.

 

Labour has accused the government of being in denial about gas prices, with
wholesale prices rising 250% since January.

 

A number of Conservative MPs have called for the government to take action,
and the Energy Intensive Users Group - which represents firms that use a lot
of energy - said measures were needed "right now".

 

The group's chair Dr Richard Leese said that energy-heavy industries were
"intrinsically linked" and if some sectors were forced to shut down, it
would have a knock-on impact.

 

"We've seen the curtailment in production in the steel and fertiliser sector
- that's had a knock-on impact into the supply chains in the industrial
supply chains and domestic supply chains," he said.

 

UK Steel boss Gareth Stace said he was "baffled" that the UK government had
failed to find solutions because governments in the rest of Europe had
stepped in to support industry - although they faced lower energy costs than
in the UK.-BBC

 

 

 

Evergrande misses 3rd round of bond coupon payments, intensifying contagion
fears

(Reuters) - China Evergrande Group (3333.HK) on Tuesday missed its third
round of bond payments in three weeks, intensifying market fears over
contagion involving other property developers as a wall of debt payment
obligations come due in the near-term.

 

Some bondholders said they did not receive coupon payments totalling $148
million on Evergrande's April 2022, April 2023 and April 2024 notes due by
0400 GMT on Tuesday, following two other payments it missed in September.

 

That puts investors at risk of large losses at the end of 30-day grace
periods as the developer wrestles with more than $300 billion in
liabilities. read more

 

Evergrande did not immediately respond to a request for comment.

 

A total of $101.2 billion bonds issued by Chinese developers will be due in
the next year, Refinitiv data show.

 

"We see more defaults ahead if the liquidity problem does not improve
markedly," said brokerage CGS-CIMB in a note, adding developers with weaker
credit rating are having difficulty in refinancing at the moment.

 

Trading of high-yield bonds remained soft on Tuesday following a rout in the
previous session on fears about fast-spreading contagion in the $5 trillion
sector, which accounts for a quarter of the Chinese economy and often is a
major factor in policymaking.

 

Shanghai Stock Exchange data showed the top five losers among
exchange-traded bonds in morning deals were all issued by property firms.

 

Small developers Modern Land (1107.HK) and Sinic Holdings (2103.HK) were the
latest scrambling to delay deadlines, after Evergrande and Fantasia
(1777.HK) missed their payments since September.

 

Modern Land's dollar bond due 2023 plunged 25% to 32.250 cents on the
dollar, while Sinic's bond due 2022 rose 12% to 19.35 cents, yielding over
1380%.

 

Modern Land, whose shares dropped over 3% to new low on Tuesday, had
requested bondholders on Monday to delay a repayment due later this month
for three months, while Sinic said it would likely default next week.

 

Aoyuan's bond due 2025 declined 3.5% while Sunac's bond due 2024 lost 2.6%.

 

 

On Monday, Fantasia Holdings' (1777.HK) unit limited trading in its Shanghai
bonds, which is often done ahead of defaults.

 

BROADER FALLOUT?

 

While global attention has been focused on missed dollar debt payments by
Chinese property issuers, market indicators suggested that worries about
contagion and a slowing economy are spreading further.

 

Market players say the sell-off, however, appears limited to more riskier
bond names.

 

"The market is trading more rationally now, according to different quality
and rating of the companies, rather than selling off on the whole sector,"
said Michael Wong, director at CP Securities based in Hong Kong.

 

The cost of insuring against a China sovereign default continued to rise on
Tuesday, with 5-year credit default swaps - which investors typically use as
a hedge against rising risk - hitting its highest point since April 2020.

 

The option-adjusted spread on the ICE BofA Asian Dollar High Yield Corporate
China Issuers Index (.MERACYC) pulled back to 2,061 basis points on Monday
evening U.S. time, just off its previous all-time high of 2,069 basis points
on Friday.

 

Shares of several other property firms, however, fared better as markets bet
on more loosening of policies following northeastern city of Harbin's
measures to support property developers and their projects. read more

 

Top developers Country Garden (2007.HK) and Sunac China (1918.HK) both rose
2%.

 

Evergrande's electric vehicles unit (07

08.HK) jumped over 10% after it vowed to start producing cars next year.
read more

 

The Thomson Reuters Trust Principles.

 

 

 

IMF board backs Georgieva after review of data-rigging claims

(Reuters) - The International Monetary Fund's executive board on Monday
expressed its full confidence in Managing Director Kristalina Georgieva
after reviewing allegations that she pressured World Bank staff to alter
data to favor China.

 

But Treasury Secretary Janet Yellen put Georgieva on notice that she would
closely monitor the IMF's follow-up and evaluate any new facts or findings,
and called for proactive steps to reinforce data integrity and credibility
at the IMF. read more

 

The Fund's 24-member board and Treasury issued separate lengthy statements
after a week of marathon meetings over Georgieva's actions as World Bank CEO
that threw into question her continued leadership of the IMF.

 

Georgieva, a Bulgarian economist and the first person from a developing
country to head the fund, had vehemently denied the claims. She welcomed the
board's endorsement in a separate statement of her own and she said was
pleased its members had agreed the allegations against her were unfounded.

 

 

"This has obviously been a difficult episode for me personally," she said.
"However, I want to express my unyielding support for the independence and
integrity of institutions such as the World Bank and IMF; and my respect for
all those committed to protecting the values on which these organizations
are founded."

 

Georgieva had won the support of France and other European governments last
week, but U.S. and Japanese officials pushed for a more thorough review of
the allegations, according to sources briefed on the matter.

 

At issue was a damning report prepared by the law firm WilmerHale for the
World Bank's board about data irregularities in the bank's now-canceled
"Doing Business" report.

 

The firm's report alleged that Georgieva and other senior officials applied
"undue pressure" on bank staff to make changes to boost China's ranking in
the report, just as the bank was seeking Beijing's support for a major
capital increase.

 

Georgieva strongly denied the allegations, which date back to 2017, when she
was the World Bank's chief executive. She became the IMF's managing director
in October 2019.

 

The board said the information presented during its review - which included
meetings with WilmerHale attorneys and Georgieva - did not conclusively
demonstrate that she played an improper role in the Doing Business report.

 

European governments had sought a speedy resolution of the matter ahead of
this week's annual meetings of the IMF and World Bank, where Georgieva and
World Bank President David Malpass are leading discussions on the global
recovery from the COVID-19 pandemic, debt relief and efforts to speed
vaccinations.

 

The United States and Japan, the fund's two largest shareholders, cautioned
against prematurely reconfirming confidence in the IMF leader, said one of
the sources.

 

'LEGITIMATE ISSUES'

 

Yellen spoke with Georgieva on Monday about the "serious issues" raised by
the probe and underscored her commitment to "preserve the integrity and
credibility of the World Bank and the IMF," Treasury said in a statement.

 

While the report "raised legitimate issues and concerns," Treasury said it
agreed with other board members that "absent further direct evidence with
regard to the role of the Managing Director there is not a basis for a
change in IMF leadership."

 

Yellen told Georgieva the WilmerHale report showed the need for shareholders
to be vigilant in defending the integrity of both institutions, and said the
IMF should renew their commitment to upholding transparency and
whistleblower protections.

 

No matter who is to blame for the altered data, current and former staff
from both institutions say the scandal has dented their research
reputations, raising critical questions over whether that work is subject to
member-country influence.

 

Malpass declined on Monday to comment on the IMF process, but said the World
Bank was working to improve the integrity of its research, including by
elevating its chief economist, Carmen Reinhart, to be part of the bank's
10-person senior management team.

 

The Thomson Reuters Trust Principles.

 

 

Asia shares dip on inflation worries, Evergrande jitters

(Reuters) - Asian shares dropped and Treasury yields held firm on Tuesday,
as a global energy crunch fuelled inflation fears and concerns about
Evergrande's debt problems intensified, clouding investor sentiment before
the U.S. corporate earnings season.

 

China Evergrande Group (3333.HK) on Tuesday missed its third round of bond
coupon payments in three weeks, intensifying market fears over contagion
involving other property developers as a wall of debt payment obligations
come due in the near-term.

 

Evergrande's debt troubles have sent shockwaves across global markets in
recent months. read more

 

European markets appeared set for a lower open with pan-regional Euro Stoxx
50 futures down 0.73% and London's FTSE futures falling 0.55%. U.S. stock
futures, the S&P 500 e-minis , shed 0.33%.

 

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)
was down 0.9%, while Chinese stocks also fell.

 

"Many in the market are currently in the wait-and-see mode," said Zhang
Zihua, chief investment officer at Beijing Yunyi Asset Management.
"Investors are eagerly watching if there will be any measures from Beijing
to help solve Evergrande's debt problem, which would need comprehensive
plans."

 

Reuters reported earlier that some bondholders said they did not receive
coupon payments totalling $148 million on Evergrande's April 2022, April
2023 and April 2024 notes due by 0400 GMT on Tuesday. Rivals Modern Land and
Sinic Holdings also became the latest developers scrambling to delay bond
payment deadlines. read more

 

China's blue-chip CSI300 index (.CSI300) fell 1.52%, while the coal
sub-index (.CSI000820) dropped 3.8% amid government efforts to urge firms to
increase output.

 

In Hong Kong, the Hang Seng index (.HSI) fell 1.3%, dragged by tech giants.

 

Elswhere in Asia, Australian shares (.AXJO) slipped 0.26% while Japan's
Nikkei stock index (.N225) slid 0.79%.

 

On Monday, Wall Street's main indexes ended a choppy session lower as
investors grew nervous ahead of the third-quarter earnings reporting season,
set to kick off with JPMorgan Chase & Co (JPM.N) results on Wednesday.

 

Some analysts expect companies to report slowing growth due to supply-chain
snags and rising prices. They warned that this could lead to a drop in U.S.
stocks. read more

 

JPMorgan shares were down 2.1% and among the biggest drags on the S&P 500
(.SPX), which lost 0.69% to 4,361.19. The Dow Jones Industrial Average
(.DJI) fell 0.72% while the Nasdaq Composite (.IXIC) dropped 0.64%.

 

After U.S. data last week showed weaker jobs growth than expected in
September, the focus now shifts to inflation and retail sales numbers this
week.

 

"Economies appear to be entering a more challenging phase of the cycle and
we think investors and corporates will be monitoring how the economic data
and earnings results fall before making assessments of near term direction,"
ANZ analysts said in a note.

 

Investors also expect the Federal Reserve to begin tightening policy by
announcing a tapering of its massive bond-buying next month.

 

The prospect of accelerating inflation and tighter monetary policy lifted
bond yields. The yield on benchmark 10-year Treasury notes climbed to
1.6137% while the two-year yield also rose to0.3499%.

 

The dollar index , which tracks the greenback against a basket of currencies
of other major trading partners, was down at 94.308.

 

Gold, usually seen as a hedge against inflation, was slightly higher. Spot
gold was traded at $1761.37 per ounce.

 

Oil prices extended weeks of gains fuelled by a rebound in global demand
that is contributing to energy shortages in economies from Europe to Asia.

 

U.S. crude ticked up 0.32% to $80.78 a barrel. Brent crude rose to $83.98
per barrel.

 

The Thomson Reuters Trust Principles.

 

 

 

Japan confronts rising inequality after Abenomics

(Reuters) - Japan's stock market has surged and luxury cars are selling fast
in Tokyo after eight years of economic stimulus under Abenomics, but that
new wealth is concentrated in a small slice of society rather than broadly
distributed, data show.

 

Addressing that divide has become a high priority for new prime minister
Fumio Kishida, who promised to tackle income disparity made worse by the
pandemic. But he has offered few clues as to how he will do so.

 

"It's like everyone has become poor," said Masanori Aoki, 62, who owns a
small coffee shop in a working class district of northeast Tokyo.

 

"With Abenomics, the finance minister talked about wealth trickling down.
But there was no such thing, was there? Almost nothing," said Aoki, who took
a job as a part-time kindergarten bus driver when the COVID-19 pandemic
forced him to temporarily shut down his shop.

 

Kimie Kobayashi, 55, who works at a childcare facility in Tokyo, says her
wages haven't risen for four years. She said many who work in the industry
are resigned to the fact that salaries rarely increase.

 

"I can't say that my livelihood is getting any better," said Kobayashi. "The
government collects tax but that money isn't used to help people who are
really in need."

 

Abenomics - a dose of huge monetary, fiscal support and a growth strategy
that boosted stocks and corporate profits - failed to create wealth to
households via higher wages, data show.

 

Japan's poverty rate is the second-highest among G7 nations and the
ninth-highest among OECD countries, according to the organisation's survey,
based on data available up to 2020.

 

Nominal wages rose just 1.2% from 2012 through 2020, government data showed.
Japanese households' average wealth fell by 3.5% from 2014 to 2019 -
although the top 10% wealthiest saw an increase, according to another
government survey. read more

 

To be sure, inequality is far more pronounced in countries such as the
United States and Britain. Japan stood around the middle of 39 countries
surveyed by OECD in 2020 based on the Gini coefficient, which gauges
inequality.

 

The situation did improve for some in Japan. Manabu Fujisaki recently
splurged on a 7 million yen ($61,800) Mercedes-Benz after reaping a huge sum
from investing in cryptocurrencies.

 

"Abenomics brought us investors huge profits as (central bank) money-pumping
pushed up prices of financial securities," said Fujisaki, 34, a father of
two who plans to build a 200 million yen house in Tokyo next year.

 

Department store Takashimaya says there is brisk demand for Patek Philippe
watches that cost more than 10 million yen, and Baccarat chandeliers worth a
few million yen.

 

Alfa Romeo sold 84 of its speciality models, with a price tag exceeding 20
million yen, during the Golden Week holidays in late April through early May
- making Japan its top-selling market globally.

 

Alfa Romeo sales in April-September more than doubled from year-before
levels. Sales of other import brands like Ferrari, Jaguar and Maserati also
increased, industry data showed.

 

"We're seeing a clear rise in demand for luxury goods among the new rich,"
said Takahiro Koike, a manager at the department store Isetan, referring to
a newly wealthy young entrepreneurs and other high earners.

 

Kishida hopes to narrow the wealth disparity by forming a "new type of
capitalism" that includes higher wages for public health and medical
workers, and tax incentives to firms that raise pay.

 

But achieving what a wall of money under Abenomics failed to do would be
challenging. Already, Kishida shelved a plan to charge higher taxes on
capital gains and dividends. read more

 

Shigeto Nagai, an economist at Oxford Economics, said offering shot-term tax
breaks likely will not convince firms to raise wages, calling instead for
reforms in areas such as Japan's rigid labour system.

 

"First and foremost, politicians must abandon the unrealistic and optimistic
premise of Abenomics that Japan can cure all ills just by reflating nominal
growth," Nagai said.

 

($1 = 113.2700 yen)

 

 

 

Travel is back, UK's easyJet says after $1.5 billion pandemic loss

(Reuters) - EasyJet (EZJ.L) said travel was back as it increased capacity
for October-December to 70% of its pre-pandemic level, a turnaround from a
year in which COVID-19 restrictions drove losses above 1 billion pounds.

 

Demand for holidays to winter sun destinations such as Egypt and Turkey was
growing, said easyJet, which will fly more to the Canary Islands in October
than it did in 2019. It was also seeing more bookings from business
travellers.

 

"It is clear recovery is underway," Chief Executive Johan Lundgren said on
Tuesday.

 

Pandemic uncertainty and travel bans pushed easyJet to an expected headline
loss of between 1.135 billion pounds ($1.54 billion)and 1.175 billion pounds
for the 12 months ended Sept, it said.

 

In the best case scenario, that means the airline will beat a consensus
forecast for a loss of 1.175 billion pounds. The results will be on Nov.30.

 

Seeking to boost its recovery from the pandemic, easyJet in September
launched a surprise 1.2 billion pound rights issue and also revealed it had
rejected an "opportunistic" bid from a suitor, believed to be Wizz Air
(WIZZ.L). read more

 

But easyJet cautioned that visibility remained limited as customers were
booking closer to their travel date, meaning it could not provide guidance
for 2022. It is not recommending a dividend for 2021.

 

A big exposure to the UK market where the government kept stricter travel
rules for longer compared to the rest of Europe, had over the summer slowed
down easyJet's recovery relative to some peers such as Ryanair (RYA.I).

 

But Britain has recently relaxed those rules, scrapping some tests and its
frequently changing traffic light system which deterred bookings. EasyJet
said that the recent changes were helping booking momentum.

 

Shares in easyJet have rise 10% over the last month.

 

($1 = 0.7349 pounds)

 

The Thomson Reuters Trust Principles.

 

 

LG units say results accounted for $918 mln costs from GM's Bolt recall

(Reuters) - South Korea's LG Chem Ltd (051910.KS) and LG Electronics Inc
(066570.KS) said on Tuesday their latest quarterly results accounted for
costs of about 1.1 trillion won ($917.66 million) in connection with General
Motors Co's (GM.N) Bolt EV recall.

 

LG Chem, whose wholly owned battery unit LG Energy Solution (LGES) supplies
batteries to GM, said it had accounted for recall-related costs of about 620
billion won ($517.23 million) in its earnings results for the July-September
period.

 

LG Electronics, which assembles LGES cells into battery modules and packs,
said it had accounted for about 480 billion won in similar costs.

 

In August, GM expanded a recall of its Bolt electric vehicle to more than
140,000 cars to replace LG battery modules due to fire risk, at a cost it
estimated at $1.8 billion. The automaker said it would seek reimbursement
from LG. read more

 

($1 = 1,198.7000 won)

 

The Thomson Reuters Trust Principles.

 

 

 

Malawi: President Chakwera 'Very Sad' With Fuel Prices Increase

Malawi President Dr Lazarus Chakwera is vexed and feeling the pinch
following the recent fuel price hike and therefore 'sincerely sympathizing'
with all Malawians, State House has said.

 

Speaking Monday during a bi - weekly presidential briefing in Lilongwe,
Director of Communications at State House Sean Kampondeni said President
Lazarus Chakwera is saddened with fuel hike and really sympathizes with
Malawians.

 

Kampondeni said much as the president wished the fuel pump price remained
the same; the recent price hike was inevitable.

 

"The president is very sad and really understands the pain that this
increase has on Malawians. An increase of this margin is not a small matter.
This is something that affects Malawians, nobody should lie to you, an
increase in fuel price affects all of us," said Kampondeni

However, Kampondeni stressed that government does not interfere in the
operations of Malawi Energy Regulatory Authority (MERA).

 

"The president supports the independence of MERA. He doesn't influence the
increase. He was fully briefed about the change and he supports MERA to
continue working in a professional manner without political interference,"
he added

 

He said the president was briefed about the issue and that he does not to
interfere in the operations of Government agencies such as Malawi Energy
Regulatory Authority (MERA) as long as they do their job.

 

Kampondeni said the President was fully briefed before the rising of the
fuel prices.

 

Justifying the increase, MERA CEO Henry Kachaje said the average Free On
Board (FOB) price for Liquified Petroleum Gas (LPG) which is used in
determining the ruling retail price, increased in the month of September
2021 when compared to the price noted in the month of March 2021.

 

Kachaje said the FOB price increased by 11.84% from R12.77/ kg as noted in
the month of March 2021 to R14.28/kg.

 

He further said since the last price revision in April 2021, the Malawi
Kwacha has depreciated against the South African Rand by 4.63% trading at
K59.74/ZAR from K57.10/ZAR.

 

Kachaje said MERA reviewed the combined effect of the movement of the LPG
FOB prices and exchange rate of the Malawi Kwacha to the South African Rand
and noted that the landed cost of LPG increased by 10.37%.

 

"Under the Automatic Pricing Mechanism (APM), LPG qualified for an upward
price adjustment since the change in landed cost was noted to be beyond the
+5% band. Therefore, the MERA Board resolved to revise upwards the retail
price of LPG effective 10th October, 2021."-Nyasa Times.

 

 

 

Nigeria: 2022 Budget - Manufacturers List Bottlenecks, Seek Fiscal, Monetary
Policy Synergy

Manufacturers, under the aegis of Manufacturers Association of Nigeria
(MAN), has appraised the 2022 proposed budget of the Federal Government,
harping on the need for synergy between monetary and fiscal policies to
guarantee better performance.

 

Director General, MAN, Segun Ajayi-Kadir, in a statement made available to
Vanguard, said the positive points center around the proposed aggregate
capital expenditure of N5.35 trillion which is 32.64 percent of the total
expenditure as against the N4.37 trillion and 32.2 percent in the 2021
budget.

 

This, according to him, means that "the sum allotted to capital expenditure
will increase appreciably in 2022, particularly for the building materials
and construction segment that has higher multiplier effects on the
manufacturing sector."

However, the group has spotted more low points in the budget, top on the
list, according to Ajayi-Kadir are: the proposed excise duty on carbonated
drinks meaning further strangulation of the manufacturing sector that is
already burdened with multiplicity of taxes/levies and fees; increased drive
for collection of taxes and levies, bordering on multiplicity of taxes and
untoward means of collection; and preference for deficit financing to be
funded by new borrowing, proceeds from privatizations and drawdowns on loans
secured for specific projects.

 

He also mentioned the "highly ambitious assumption of 13% inflation rate,
when the prevailing rate as at August 2021 stood at 17.01% and government is
yet to address the incessant crises between the herdsmen and farmers and
other insecurity conditions that contributes significantly to food scarcity
that evidently fuel inflation in the country".

 

The manufacturers said there is the need for the federal government to
support the implementation of the proposed budget with a more production
centric monetary policy that will crash interest rate to guarantee positive
results.

 

The MAN DG said that the expectations of the manufacturers are: "Full and
timeous implementation of the budget, when passed, to stimulate the
much-needed growth; Deliberately stimulates production through improved
government patronage of made in Nigeria products, being the largest spender
in the economy; "Prioritizing the allocation of foreign exchange to the
manufacturing sector for the importation of vital raw materials, machine and
spares that are not available locally; and Prioritizing the utilization of
locally produced construction materials in the current/ongoing upgrade of
infrastructure across the country."

 

Others are: "Initiating additional tax reforms and tax administration
measures that will widen the tax net to compel the non-tax-paying
individuals/firms operating to pay tax and thereby increase tax revenue;

 

"Reducing Government recurrent expenditures to cut fiscal deficit,
borrowings and associated service charges; and Redouble efforts at
addressing the insecurity situation in the country to improve food
production and supply and ensure unfettered business activities. This will
facilitate the attainment of the envisaged economic growth."-Vanguard.

 

 

 

Nigeria: Moody's - Oil Industry Must Spend U.S.$542 Billion to Avoid Supply
Shock

Moody's, a renowned rating agency has said that global annual upstream
spending needs to increase by as much as 54 per cent to $542 billion if the
oil market is to avert the next supply shortage shock.

 

In its latest report on the oil and gas industry, Moody's noted that most
producers continue to stick to conservative capital budgets for 2022, but
slight growth can be expected as commodity prices jump.

 

Currently, oil Exploration and Production (E&P) companies around the world
are underinvesting in supply as they continue to keep capital expenditure
(capex) low after the 2020 price crash and crisis, Moody's notes.

Annual upstream investment crashed by around 30 per cent in 2020 and has
only slightly recovered since, according to the credit rating agency.

 

"Our analysis demonstrates that upstream companies will need to increase
their spending considerably for the medium term to fully replace reserves
and avoid declines in future production," Moody's Vice President Sajjad Alam
said in a statement.

 

This year, spending is expected at $352 billion, while medium-term annual
investment has to grow to $542 billion to keep with the demand returning
from the pandemic slump, according to the report.

 

"The industry will need to spend significantly more, especially if oil and
gas demand keeps climbing beyond pre-pandemic levels through 2025," Moody's
analysts wrote in the report.

 

Underinvestment in upstream projects is a major wild card for oil markets
going forward, analysts and industry officials say.

 

The oil industry is "massively underinvesting" in supply to meet growing
demand, which is set to return to pre-COVID levels as soon as the end of
2021 or early 2022, Greg Hill, president of U.S. oil producer Hess Corp,
said.

 

Last year, global upstream investment sank to a 15-year low of $350 billion,
down from around $600 billion before the pandemic, according to estimates by
Wood Mackenzie from earlier this year.-This Day.

 

 


 


 


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.

 


 

 


(c) 2021 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

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