Major International Business Headlines Brief::: 27 October 2021

Wed Oct 27 08:25:27 CAT 2021

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Major International Business Headlines Brief::: 27 October 2021

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

ü  Twitter profits slump after settling long-running lawsuit

ü  US revokes licence of top Chinese telecoms company

ü  Heathrow air traffic may not recover until 2026, says boss

ü  New funding plan paves way for Sizewell C nuclear plant

ü  Analysis: The 1970s all over again? Stagflation debate splits Wall St

ü  U.S. demand for oil surges, depleting tanks in Oklahoma

ü  UN urges G20 to ensure finance sector's climate pledges are solid

ü  Stocks slip, short-term yields leap with inflation

ü  China Evergrande shares fall on persistent pressure from debt travails

ü  Billionaire Alibaba founder Jack Ma touring Dutch research
institutes-SCMP

ü  China industrial profit growth accelerates in Sept despite cost pressures

ü  Sodexo serves annual core profit on restaurant openings, vaccine rollout

ü  Uncertainty dogs 787 deliveries, MAX approval ahead of Boeing Q3

ü  Visa beats profit estimates on travel, online spending boom

ü  Alphabet earns record profit on Google ad surge

ü  Twitter avoids revenue hit from Apple privacy changes

 <mailto:info at bulls.co.zw> 

Twitter profits slump after settling long-running lawsuit

Twitter lost more than half a billion dollars in the three months to
September after it paid $809.5m (£588m) to settle a long-running lawsuit.

The social media giant was accused of misleading investors over user
engagement in 2015.

However despite this one-off charge, its quarterly revenue grew 37% as it
managed to shrug off the impact from Apple's privacy changes which hit
rivals such as Snap and Facebook.

This sent Twitters shares up 3%.

An expensive class action

In September Twitter agreed to settle a class action with their shareholders
dating back to 2016.

The suit claimed Twitter misled investors about how many users were active
on the platform each month as well as how frequently they viewed Twitter's
timeline.

The company denied any wrongdoing but agreed to use cash on hand to settle
the claim, flagging that it would hurt its bottom-line this quarter.

And that it did, with the social media giant reporting a net loss of $537m
(£390m) in the third quarter.

Impact from Apple

There were some bright sparks, though, for the San Francisco-based company.

Unlike its rival Snap, whose shares plunged 25% last week, Twitter was
relatively insulated from Apple's privacy changes.

It made $1.14bn (£830m) in advertising revenue during the quarter, labelling
the impact "modest" as most of its advertisers do not rely on highly
targeted ads.

Chief Financial Officer Ned Segal told a conference call with analysts that
the platform is expanding its targeted advertising business, such as by
introducing topics that users can follow on Twitter.

"A lot of this is opportunity that's in front of us," he said.

The Apple privacy updates were rolled out broadly in June and prevent
digital advertisers from tracking iPhone users without their consent.

Facebook signalled that they're causing the company "headwinds" when it
released its earnings earlier this week.-BBC

US revokes licence of top Chinese telecoms company

Washington has revoked the US licence of one of China's biggest telecoms
companies citing "national security" concerns.

China Telecom must stop providing services in America within 60 days.

Officials said the Chinese government's control of the company gave it the
opportunity "to access, store, disrupt, and/or misroute US communications".

This in turn could allow it "to engage in espionage and other harmful
activities against the US", they said.

China Telecom, which has provided telecoms services in the US for nearly 20
years, called the decision "disappointing".

"We plan to pursue all available options while continuing to serve our
customers," a statement said.

China Telecom is one of three companies that dominate China's telecoms
market. The firm has hundreds of millions of customers in 110 countries,
with services ranging from broadband internet to mobile and landline
telephone networks.

The decision comes hours after US Treasury Secretary Janet Yellen spoke to
China's Vice Premier Liu He about the state of the global economy.

China frees Canadians after Huawei boss released

Wall Street to kick out Chinese telecom giants

The meeting had been seen as a sign of improving relations between the two
superpowers, which have recently exchanged barbs over trade and Taiwan.

The Federal Communication Commission (FCC) warned it might shut down China
Telecom Americas in April 2020, claiming the firm "is subject to
exploitation, influence, and control by the Chinese government".

It said the company was "highly likely to be forced to comply with Chinese
government requests without... independent judicial oversight".

It is the latest Chinese telecoms firm to be targeted by US officials over
national security concerns.

Last year, the FCC designated Huawei and ZTE as threats to communications
networks - making it harder for US firms to buy equipment from them.

The FCC revoked China Mobile's US licence in 2019, and is in process of
doing so for two other state-backed firms - China Unicom Americas and
Pacific Networks.

In all cases, US officials cited risks that the Chinese government could use
the companies to spy on America or harm national interests.-BBC

Heathrow air traffic may not recover until 2026, says boss

The boss of Heathrow Airport has warned air traffic may not recover
completely until at least 2026 despite signs of huge pent up demand for
travel.

John Holland-Kaye told the BBC that Britain's busiest airport was still
making losses even though international travel rules were easing.

He also hit back at the aviation regulator for limiting a rise in what it
charges airlines for using Heathrow.

Airlines at Heathrow make a good return and investors want the same, he
said.

Mr Holland-Kaye said the airport was still only seeing passenger traffic at
around 45% of 2019 levels. "It's definitely been a tough 18 months but we
are starting to see the recovery coming through," he told the BBC's Today
programme.

"Now all we need to see is stability in the travel rules, so people are
confident of what we need to do and the airlines can build it into their
systems."

The airport has faced criticism about long queues and its ability to cope
with a growth in passengers. But he said: "We are hiring people right now to
make sure that across the airport we can meet the demand that is starting to
come through.

"We're still at around 40% to 45% of the levels even on the busiest days of
where we were back in 2019."

Among the job vacancies Heathrow is trying to fill are security staff and
engineers to help maintain the airport.

Any shortage of passport control staff, which has lead to headlines about
long queues, is the responsibility of Border Force, which is part of the
Home Office.

'Fair return'

Mr Holland-Kaye said it was important the airport and its investors could
raise money to help finance that return to growth.

At present, the airport can charge up to £22 per passenger for the cost of
operating terminals, runways, baggage systems and security.

It wanted that to rise to as much as £43 in January, but the Civil Aviation
Authority (CAA) now says it will be capped at £24.50 to £34.40 for five
years.

Heathrow passenger charge to be curbed

Airport arrivals hit by passport gate failure

Mr Holland-Kaye said: "The CAA's initial proposals do not go far enough to
ensure that investors can achieve a fair return, which is key to securing
future private investment in passenger service and resilience for Britain's
hub airport."

The London airport said passenger numbers in the third quarter recovered to
28% and cargo to 90% of pre-pandemic levels, although it has lost £3.4bn
cumulatively since the start of the pandemic.

Heathrow, which last year lost its crown as Europe's busiest hub to Paris,
has suffered heavy losses during the pandemic and had been hoping it could
claw back some money by raising its charges to airlines.-BBC

New funding plan paves way for Sizewell C nuclear plant

Funding rules paving the way for a new major nuclear power station have been
announced by the Business and Energy Secretary, Kwasi Kwarteng.

The move is the latest stage in efforts to build the £20bn Sizewell C
project in Suffolk.

The proposed plant is still subject to planning approval, but until now, the
Treasury has been uncertain of how to pay for it.

Even if the project is approved, it still faces strong local objections.

The government said the new financing model could help cut the cost of new
nuclear power projects in Britain, saving consumers more than £30bn on each
new large-scale station.

The proposals include electricity customers paying for part of nuclear
schemes' costs upfront through bills.

The new model, known as RAB (Regulated Asset Base), has already been used to
finance some large infrastructure projects, including the £4.2bn Thames
Tideway "super-sewer".

It allows investors to receive returns before the projects have been
completed.

The Treasury was initially reluctant to use the RAB model.

Not only does it add money to consumer bills over the lifetime of the
project, but it also leaves consumers vulnerable to cost overruns, which
have plagued previous nuclear developments.

However, contractor EDF Energy has been adamant that lessons learned on
previous projects - and the fact that it is building an identical plant at
Hinkley Point - have largely mitigated those risks, says BBC business editor
Simon Jack.

Mr Kwarteng said the new funding model was a better way to finance such
projects.

"The existing financing scheme led to too many overseas nuclear developers
walking away from projects, setting Britain back years," he said.

"We urgently need a new approach to attract British funds and other private
investors to back new large-scale nuclear power stations in the UK."

Employers' organisation the CBI said the new financing model was "a crucial
step in building a secure, affordable and greener energy system in the years
ahead".

"Getting new projects off the ground will be a huge boost to supply chains
and can deliver jobs right across the UK," said Tom Thackray, director of
the CBI's decarbonisation programme.

'Always on'

The Nuclear Industry Association said it would add a small levy to bills of
no more than a few pounds during the early phase of construction and less
than £1 a month over the course of a project.

It "warmly welcomed" the plan, adding it would also bring substantial
savings in terms of CO2 emissions worth £526m a year at today's carbon
prices, or £18 per year for every UK household.

But the high cost of big nuclear plants and the plummeting cost of
renewables such as offshore wind make the project controversial.

However, the enormous amount of low-carbon non-intermittent electricity that
it produces is considered by the government to be an essential part of the
UK's future energy mix as existing nuclear plants are phased out.

The recent intermittency of wind power has also made the case in ministers'
minds for an "always on" part of the energy supply, our business editor
adds.

Together, Hinkley and Sizewell C are expected to produce 14% of the UK's
current electricity needs, but they are unlikely to be operational until the
late 2030s.

The new funding plan has been greeted with dismay by campaigners against the
proposed plant.

Sites for new nuclear power stations

Alison Downes of Stop Sizewell C described it as "a desperate measure to
attract investment" for "a project so toxic that no one wants to pay for
it".

She added: "Compared to other energy solutions, Sizewell C is an expensive
distraction - too damaging, too slow for our climate emergency and with
serious question marks over its reactor technology."-BBC

Analysis: The 1970s all over again? Stagflation debate splits Wall St

(Reuters) - Phil Orlando has not heard this many people mentioning
stagflation since he was a financial journalist in the late 1970s, when oil
prices were soaring and inflation stood at more than double its current
level.

Now the chief equity market strategist at Federated Hermes, Orlando says
stagflation is poised to make a comeback and is piling into shares of
companies that can thrive during periods of high inflation and slower
economic growth.

"The surge in inflation is not proving to be transitory like the Fed and
Biden administration have been telling us,” he said. “It's sticky and
sustained when we're past peak growth. That's stagflation."

Consumer prices rose at an annual pace of 5.4% last month, on track for
their highest annual gain since 1990, a surge that analysts have pinned on
everything from soaring commodity prices to some $5.3 trillion in U.S.
fiscal stimulus passed since the start of the pandemic. Meanwhile, third
quarter U.S. economic growth is expected to fall to 2.7%, from the prior
quarter's 6.7% rate. .USGDPA=ECI read more

Most economists believe stagflation is far from inevitable, and the Federal
Reserve has said rising prices will prove temporary. The S&P 500 is up 22.1%
this year and stands near record highs. read more

Yet many investors are on alert, wary of the corrosive effect that past
periods of stagflation have had on asset prices.

Google searches for “stagflation” this month are on track to hit their
highest level since 2008, while Goldman Sachs (GS.N) wrote the term is now
“the most common word in client conversations.” The number of fund managers
expecting stagflation rose by 14 percentage points in October to the highest
level since 2012, a survey from BoFA Global Research (BAC.N) showed.

"Clearly the deceleration in our economy is shocking and that points to
stagflation,” said Louis Navellier, chief investment officer for Navellier &
Associates. "We are going to tighten up all our portfolios because we see us
going into a tunnel where [the equity market] gets more nervous and narrow."

Past episodes of stagflation have weighed on stocks. The S&P 500 fell a
median of 2.1% during quarters marked by stagflation over the last 60 years,
while rising a median 2.5% during all other quarters, according to Goldman
Sachs.

Bonds also struggled during the last major stagflationary period, which
began in the late 1960s. Spiking oil prices, rising unemployment and loose
monetary policy pushed the core consumer price index up to a high of 13.5%
in 1980, prompting the Fed to raise interest rates to nearly 20% that year.

The benchmark 10-year U.S. Treasury fell in nine of the 11 years leading up
to 1982, according to data compiled by Aswath Damodaran, a professor at New
York University. Inflation erodes the purchasing power of bonds’ future cash
flows.

Orlando, of Federated Hermes, is holding shares of companies that can pass
on rising costs to consumers, including energy and industrial firms.
Navellier has focused on big-box retailers that own their supply chains,
like Target Inc (TGT.N).

DIVIDED OUTLOOK

Many on Wall Street reject comparisons to the 1970s, arguing that the causes
of the current bout of inflation are either overblown or likely to fade.

"We think we're at the peak of stagflation concerns," said Scott Kimball,
co-head of U.S. fixed income at BMO Asset Management, who believes most of
the spending in a potential infrastructure bill - a key worry for inflation
hawks - is long term and would not have an immediate economic effect.

Jean Boivin, head of the BlackRock Investment Institute, expects growth will
accelerate as supplies become more readily available and is positioned for
Treasury yields to move higher.

“The inflation pressures we expected are here,” he wrote in a recent report.
However, “this is not stagflation, and we remain pro-risk.”

Analysts at UBS said that in addition to higher oil prices, stagflation in
the 1970s was driven by factors that are less meaningful today, including
government price controls that constricted supply.

One wild card is whether the threat of rising inflation will force the
Federal Reserve into a more hawkish stance, as the central bank readies to
begin unwinding its $120 billion a month government bond buying program.
Signs of a faster taper and more aggressive interest rate increases could
weigh on stocks.[nL1N2QV0O8]

"If next year you are still sitting with inflation levels like we are and
growth hasn't picked up, then you have to think the Fed will act," said
Jason England, global bonds portfolio manager at Janus.

The Thomson Reuters Trust Principles.

U.S. demand for oil surges, depleting tanks in Oklahoma

(Reuters) - Crude oil tanks at the Cushing, Oklahoma storage hub are more
depleted than they have been in the last three years, and prices of further
dated oil contracts suggest they will stay lower for months.

U.S. demand for crude among refiners making gasoline and diesel has surged
as the economy has recovered from the worst of the pandemic. Demand across
the globe means other countries have looked to the United States for crude
barrels, also boosting draws out of Cushing.

Analysts expect the draw on inventories to continue in the short-term, which
could further boost U.S. crude prices that have already climbed by about 25%
in the last two months. The discount on U.S. crude futures to the
international Brent benchmark should stay narrow.

"Storage at Cushing alone has the potential to really rally the market to
the moon," said Bob Yawger, director of energy futures at Mizuho.

Cushing stockpiles have dropped to 31.2 million barrels, the lowest since
October 2018, the Energy Information Administration said last week, or about
half of where inventories were at this time a year ago.

Inventories have fallen because of a ramp-up in U.S. demand, which has
encouraged domestic refiners to keep crude at home to provide fuel such as
gasoline and distillates to U.S. consumers, said Reid I'Anson, senior
commodity analyst at Kpler.

In addition, U.S. production has been slow to recover from declines seen in
2020. At the end of 2019, the nation was producing roughly 13 million
barrels of oil per day (bpd), but in recent weeks has been less than 11.5
million bpd. At the same time, product supplied by refineries - a proxy for
demand - is about just 1% below pre-pandemic peaks.

Crude inventories at the Cushing, Oklahoma, storage hub fell 31.2 million
barrels in the most recent week, the lowest since October 2018.

As a result, the spread between U.S. crude and international benchmark
Brent, has collapsed. The spread between U.S. crude delivered to Cushing and
Brent narrowed to roughly $1.09 a barrel this week from $4.47 earlier this
month, which had been about the widest spread since May 2020.

In an additional sign of high short-term demand for U.S. crude, the premium
for U.S. crude delivered this December versus December 2022 reached a high
this week of $12.48 per barrel, most since at least 2014, according to
Refinitiv Eikon data.

In the next three months, Rystad Energy expects refinery runs in the United
States to increase by 500,000 to 600,000 barrels per day. This would outpace
production gains of 300,000-400,000 barrels per day, and keep the WTI/Brent
spread narrow.

"Only if OPEC (the Organization of the Petroleum Exporting Countries)
intervenes with more supply of crude or if COVID rears its ugly head again,
curbing demand, this high volatility will come off," said Mukesh Sahdev,
senior vice president and head of downstream at Rystad Energy.

The U.S. crude discount to Brent has reached its narrowest recently since
September 2020. Meanwhile, the premium for U.S. crude delivered this
December versus December 2022 reached the most since at least 2014.

The Thomson Reuters Trust Principles.

UN urges G20 to ensure finance sector's climate pledges are solid

(Reuters) - The United Nations called on Wednesday for the world's biggest
economies to ensure net zero commitments made by financial institutions were
robust, backed by science and ended financing for new fossil fuel projects.

The call is the first time the UN Environment Programme Finance Initiative
(UNEP FI) has directly given guidance to the G20 on the issue and comes days
before the start of crunch climate talks in Glasgow, Scotland.

In a report for the G20 as it meets ahead of the talks, UNEP FI laid out 11
recommendations for policymakers as they consider how best to oversee the
industry efforts to help cut greenhouse gas emissions by mid-century.

There are concerns some of the current pledges are too weak after a landmark
report from a U.N. climate panel in August that issued a "code red for
humanity", urging faster action from countries to curtail emissions. read
more

"In the last two years we've just seen an incredible explosion of net-zero
commitments," Jesica Andrews, investment lead at the UN EPFI, told Reuters.

"This is really the first time we've done a state of the art assessment and
put forward really concrete recommendations on how a financial institution,
specifically, sets a net-zero target that is credible."

Against that backdrop, the UNEP FI said financial institutions needed to
align with a science-based scenario or scenarios and be transparent about
which ones were used.

"What is challenging is how you define that science, and that's what this
paper does; it lays out how the science should be applied to make sure that
commitment is credible," Andrews said.

"If policymakers want to get behind this and they want to see more
comparability, this is what we need to be asking financial institutions to
do," she added.

Once the scenario was set, firms needed to begin aligning lending as soon as
possible to have any hope of hitting the global target of capping global
warming at no more than 1.5 degrees Celsius.

"This would include, for example, the immediate cessation of any new fossil
fuel investments, and rapid decommissioning of remaining fossil fuel
production as indicated by the scenarios," the report said.

Institutions should also set, ideally, five-year targets and report annually
on progress, applying appropriate pathways to net zero that incentivise
their underlying companies to act.

"We have a lot of portfolio level targets, a lot of commitments to net zero
at the high level, but (they are) not drawing that down to the sector level,
which is what's going to make a difference in the real economy," Andrews
said.

The Thomson Reuters Trust Principles.

Stocks slip, short-term yields leap with inflation

(Reuters) - Tech shares slipped and short-term Treasury yields jumped on
Wednesday as investors expect inflation to prompt interest rate hikes, with
a hotter-than-forecast reading in Australia the latest sign of prices
pressuring central bankers to act.

The Australian dollar also rose about 0.4% and short-dated Aussie government
bonds sold heavily after the data release, which showed Australian core
inflation hitting a six-year high. read more

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)
fell 0.5% - although it remains on course for its best month of the year -
led by tech shares falling in Hong Kong. Japan's Nikkei (.N225) fell 0.6%.

Strong earnings had earlier propelled Wall Street indexes to fresh records
and U.S. stock futures , , were flat in early trade.

"There are a couple of things that are of concern to investors, and
inflation news is everywhere," said Khoon Goh, head of Asia research at ANZ
Bank in Singapore.

"This is where expectations of when the Fed might start to lift interest
rates is starting to come in to focus. The announcement of tapering next
week is pretty much a done deal - markets have moved past tapering and are
focused on tightening."

Two-year U.S. Treasury yields leapt nearly 5 basis points to 0.4970%, a
19-month high. The Federal Reserve meets next Tuesday and Wednesday with
crude oil and soft commodity prices hovering near multi-year peaks.

The Fed has all but confirmed it will soon start to whittle back its asset
purchases, though has said that shouldn't signal rate hikes are imminent.
Nevertheless, Fed funds futures are priced for a liftoff in the second half
of next year.

"We updated our Fed call to show a hike in Q4 2022 and four hikes in 2023,"
analysts at NatWest said in a note.

"The inflation overshoot has been persistent," they said. "There is (only)
so much the Fed can tolerate before reacting ... it feels inevitable that
that conversation will be brought up more and more as we go into next year."

Before the Fed meeting the European Central Bank, Bank of Japan and Bank of
Canada set policy this week. No changes are expected from Tokyo, but traders
are expecting the ECB to push back on market inflation forecasts and are
looking for hawkish clues from the Bank of Canada as prices put pressure on
rates.

PRICES UP DOWN UNDER

Australia's unexpected surge in consumer prices, which showed broad gains
from rents to petrol prices, has further emboldened bond traders
aggressively betting that the Reserve Bank of Australia will back away from
its dovish guidance.

The print follows a decade-high inflation reading in New Zealand last week
and has hammered bond markets and pulled forward rate hike expectations to
mid-2022.

The yield on Australia's April 2023 government bond , which the RBA has
targeted at 0.1% as a signal that the cash rate will be at record lows for
years, rose as far as 0.237% in a direct challenge to the bank's intentions.

Three year Australian government bond futures , which are traded more
heavily than cash bonds, plunged about 19 basis points to their lowest since
mid-2019.

The Australian dollar rose to $0.7536, though broader currency markets were
quiet as traders look to central bank meetings over the next week or so for
guidance. The Canadian dollar hovered just below last week's four month
high.

Oil prices eased from overnight peaks, with Brent crude futures down 0.75%
at $85.75 a barrel and U.S. crude down by the same margin to $84.02 a
barrel.

Gold was steady at $1,788 an ounce and bitcoin held at $60,000 after a
late-session drop on Tuesday.

The Thomson Reuters Trust Principles.

China Evergrande shares fall on persistent pressure from debt travails

(Reuters) - Shares of cash-strapped China Evergrande Group (3333.HK) and its
electric vehicle unit (0708.HK) fell early on Wednesday, as the country's
state planner called on companies in "key sectors" to "optimise" offshore
debt structures.

Evergrande and China Evergrande New Energy Vehicle Group Ltd both fell less
than 1% by 0155 GMT. The Hang Seng Index (.HSI) slumped 1.7%.

China Evergrande Group is reeling under more than $300 billion in
liabilities, fuelling worries about the impact of its fate on global
markets.

Late on Tuesday, China's National Development and Reform Commission said
that it and the State Administration for Foreign Exchange had met with
foreign debt issuers, advising them to use funds for approved purposes and
"jointly maintain their own reputations and the overall order of the
market".

Evergrande said on Tuesday it has resumed work on some projects in the Pearl
River Delta region and it would deliver 31 real estate projects by the end
of 2021. That number will rise to 40 by the end of June 2022.

Billionaire Alibaba founder Jack Ma touring Dutch research institutes-SCMP

(Reuters) - Alibaba Group (9988.HK) founder Jack Ma has been touring Dutch
research institutions to pursue his interests in agriculture technology,
Hong Kong newspaper South China Morning Post (SCMP)reported, quoting people
familiar with his trip.

The Chinese billionaire has largely been out of public view since he
publicly criticised China's regulatory system in a speech last year. His
empire promptly came under heavy scrutiny from regulators and the $37
billion blockbuster IPO of his fintech affiliate Ant Group was suspended.

Ma, once China's most famous and outspoken entrepreneur, reappeared in Hong
Kong in October, where he met at least "a few" business associates over
meals, two sources told Reuters. read more

He then flew to the Spanish island of Mallorca, where his luxury yacht is
anchored, his first trip abroad since he fell out with Chinese regulators,
two Spanish newspapers reported last week. read more

SCMP, owned by Alibaba, published three photos of Ma, sourced as handouts
and dated Oct. 25.

In two of them he was seen wearing a white protective gown and holding
flowerpots, while in the third he was wearing jeans and a hoodie and the
caption said he was analysing technology by aluminium extrusion specialist
BOAL Systems.

The billionaire, who retired as Alibaba's chairman in 2019, will continue
touring European companies and research institutions involved in
agricultural infrastructure and plant breeding, according to people familiar
with his plans, SCMP reported.

Ma believed combining the technology he researched with Alibaba’s cloud
computing, big data analysis and artificial intelligence could help
modernise Chinese agriculture, the people told SCMP.

On Sept. 1, photographs of Ma visiting greenhouses in eastern Zhejiang
province, home to both Alibaba and Ant, went viral on Chinese social media.

The next day, Alibaba said it would invest 100 billion yuan ($15.5 billion)
by 2025 in support of "common prosperity", becoming the latest corporate
giant to pledge support for the wealth sharing initiative driven by
President Xi Jinping. read more

The Thomson Reuters Trust Principles.

China industrial profit growth accelerates in Sept despite cost pressures

(Reuters) - Profits at China's industrial firms rose at a faster pace in
September despite surging prices and supply bottlenecks, thanks mainly to
stellar growth in mining and raw materials industries although some
businesses struggled to shake off the high costs.

Profits jumped 16.3% on-year to 738.74 billion yuan ($115.72 billion) the
statistics bureau said on Wednesday, quickening from the 10.1% gain reported
in August.

The industrial sector has been hit by the surging price of coal, supply
shortages and power rationing triggered by coal shortages due to emission
reduction targets.

But Beijing has taken a raft of measures to curb elevated metals prices and
ease the country's power crunch, including urging coal miners to boost
output and manage electricity demand at industrial plants. read more

Strong profit rises in mining and raw materials industries drove the
headline figures. Profits in the coal mining and washing industry grew
172.2% over the first nine months. The fuel processing industry saw earnings
skyrocket 930% over the same period.

Power firms were squeezed however, with profits falling 24.6% between
January and September, with tight coal supplies and higher prices of the
fuel eroding bottom-lines.

Zhu Hong, an NBS official, said that high commodity prices and supply chain
issues continue to weigh on the recovery in firms' profits.

"The problem of profit imbalances between upstream and downstream industries
is fairly prominent, and the foundation for the recovery of industrial
profits is not yet consolidated," said Zhu.

In October, the government said that it will allow coal-fired power prices
to fluctuate by up to 20% from base levels, enabling power plants to pass on
more of the high costs of generation to commercial and industrial end-users.
read more

For the January-September period, industrial firms' profits grew 44.7%%
year-on-year to 6.34 trillion yuan, slowing from a 49.5% increase in the
first eight months of 2021, the statistics bureau said.

China's economic growth in the third quarter was the slowest this year, due
partly to power shortages and wobbles in the property sector. read more

Record high factory inflation in September is putting a strain on middle and
downstream businesses to pass through costs to consumers. read more

Analysts polled by Reuters expect the People's Bank of China to refrain from
attempts to stimulate the economy by reducing the amount of cash banks must
hold in reserve until the first quarter of 2022.

Liabilities at industrial firms rose 8.2% from a year earlier at
end-September, easing from 8.4% growth as of end-August.

The industrial profit data covers large firms with annual revenues of over
20 million yuan from their main operations.

The Thomson Reuters Trust Principles.

Sodexo serves annual core profit on restaurant openings, vaccine rollout

(Reuters) - French catering and food services group Sodexo (EXHO.PA) posted
on Wednesday a better-than-expected annual core profit and revenue, citing
acceleration in vaccination programmes across its markets as the driving
force of restaurant reopenings.

The Paris-based firm reported a 12.4% jump in core profit at constant rates
to 578 million euros ($672.68 million) for the year ended Aug. 31, on
revenue of 17.43 billion euros - both slightly beating the company's poll
forecast.

By the fourth quarter, the group reached 87% of its annual activity in 2019,
it said.

A massive global rollout of vaccines has led to reopening of sites in
Sodexo's major markets, some segments and activities sooner than others. The
company's Benefits & Rewards Services has also seen its merchant revenue
picking up with the reopening of restaurants.

Sodexo said it remains confident in its capacity to continue the recovery
momentum to pre-COVID levels, and expects organic growth between 15% and
18%, as well as an operating margin of close to 5% at constant rates for its
2022 fiscal year.

The French company said the boost in growth in the United States, the
accelerated deployment of the new food model based on digital solutions and
the active portfolio management will help Sodexo return to regular and
sustained growth.

The group said it would resume dividend and pay 1.20 euros as part of its
dividend policy, with an exceptional 0.80 euros linked to the disposal
programme.

($1 = 0.8593 euros)

Uncertainty dogs 787 deliveries, MAX approval ahead of Boeing Q3

(Reuters) - Hopes of an imminent breakthrough in deliveries of Boeing Co's
(BA.N) 787 jetliner were fading on Tuesday after a top supplier reported a
lull in activity and two industry sources said the jetmaker continued to
wade through lingering factory problems.

Boeing shares fell 1.4% on the eve of quarterly earnings due on Wednesday,
reaching their lowest level since Sept. 21 as uncertainty continues to
plague its main commercial programs.

More than 100 long-haul 787s are parked, locking up an estimated $9 billion
in cash, after a series of manufacturing issues over the past two years
compounded weak demand.

"There is a substantial risk that Boeing will recognize a charge related to
the program at Q3 results," Bernstein analyst Doug Harned wrote last week.

The 787 problems have stifled a crucial source of cash as Boeing's main cash
cow, the 737 MAX, recovers gradually from a two-year safety crisis triggered
by fatal crashes.

"We are progressing through our comprehensive inspections and reviews, and
will continue to take the time necessary to meet the highest standards,
while coordinating closely with our suppliers and customers," a Boeing
spokesperson said on Tuesday when asked about the 787 issues.

While the MAX received Western approvals late last year, Boeing faces
renewed uncertainty over the timing of its re-entry to service in China,
which drives a quarter of its sales.

China had been expected to approve the MAX in November but chances are
growing this will slip to next year, sources said.

China's regulator did not respond to a request for comment.

A Boeing spokesperson declined to comment on China or the MAX.

Although Boeing and Chinese regulators recently carried out a successful
test flight, the clearance has become tangled in diplomatic tensions with
the United States.

Boeing said earlier this year it would deliver fewer than half of the 100 or
so 787s in its inventory this year, instead of the "vast majority"
previously expected. So far this year it has delivered 14.

Hopes are fading that a meaningful number could be delivered before
year-end, one of the industry sources said, although a handful of deliveries
could not be ruled out.

One supplier said Boeing had not given parts makers an indication of its
timing one way or the other, leaving uncertainty over the timetable for
deliveries.

Raytheon Technologies , which supplies a raft of systems, said on Tuesday it
was not shipping anything for the 787.

Boeing has been grappling with manufacturing flaws that produced structural
defects in the 787 and have twice halted deliveries, with the latest
stoppage ongoing since May.

Visa beats profit estimates on travel, online spending boom

(Reuters) - Visa Inc's (V.N) quarterly profit topped Wall Street
expectations on Tuesday, as a recovery in travel and an improving global
economic picture drove volume growth at the world's largest payment
processor.

But cross-border travel was still well below pre-pandemic levels, Visa said,
with regions such as the Asia Pacific remaining closed.

"Our business has been on a recovery track for the past three to four
quarters. However, we are not back to normal yet globally," Chief Financial
Officer Vasant Prabhu told analysts on a call.

"The timing of reopening in key countries across Asia, both domestically and
for cross-border travel is a key variable."

In a sign of resilience, however, debit and e-commerce activity outperformed
in the quarter even as in-store shopping picked up and credit card volumes
recovered.

Visa's net income rose to $1.65 per Class A share for the fourth quarter
ended Sept. 30, beating analysts' estimate of $1.54 per share, according to
Refinitiv data.

In the United States, reopening economies have fueled widespread demand for
travel and shopping from consumers stuck indoors for more than 18 months.
U.S. to Mexico travel remained robust, Visa said. read more

The company forecast fiscal 2022 first-quarter net revenue growth in the
high teens, while total cross-border volume in the reported quarter rose 38%
on a constant dollar basis from a year earlier.

Talking about its assumptions for internal planning purposes, Visa said it
assumes the recovery in cross-border travel to continue through fiscal 2022
and reach 2019 levels in the summer of 2023.

Total payment volumes rose 17% on a constant dollar basis from a year
earlier, while the number of transactions processed by Visa rose 21% to 45.3
billion.

American Express's (AXP.N) profit also topped estimates last week, as higher
usage of its cards fueled a strong recovery in overall spending.

The Thomson Reuters Trust Principles.

Alphabet earns record profit on Google ad surge

(Reuters) - Google owner Alphabet Inc (GOOGL.O) on Tuesday reported higher
than expected third-quarter ad sales, a sign that the business is overcoming
new limits on tracking mobile users and that online shopping is as popular
as ever heading into the holiday season.

Through its search engine, YouTube video service and partnerships across the
Web, Google sells more internet ads than any other company. Demand for its
services surged in the past year as the pandemic forced people to spend more
time online, and their new habits have persisted.

Google advertising revenue rose 41% to $53.1 billion during the third
quarter. Alphabet's overall sales jumped to $65.1 billion, above the average
estimate of $63.3 billion among analysts tracked by Refinitiv.

"The consumer shift to digital is real and will continue even as we start
seeing people return to stores," said Philipp Schindler, Google's chief
business officer. "The underlying takeaway is that people want more choice,
they want more information, more flexibility, and we don't see this
reversing."

Shares fell 0.93% to $2,760.19 following the after-hours release of the
financial results.

Quarterly profit was $18.936 billion or $27.99 per share, beating
expectations of $24.08 per share and marking a third-straight quarter of
record profit. Alphabet's profit is subject to wide fluctuations because
accounting rules require the company to measure unrealized gains from its
investments in startups as income.

Investors had braced for some sales challenges for Google.

Anxiety by consumers over how Google and other companies use their browsing
behavior to profile them and then pick which ads to show has become
widespread. In the latest challenge, Apple Inc (AAPL.O), whose iPhones
account for half of the smartphones in the United States, gave its users
more control to stop tracking over the past few months. The change led
advertisers to recalibrate their spending in ways that Google rivals Snap
Inc (SNAP.N) and Facebook Inc (FB.O) said hurt their third-quarter sales.
read more

REGULATORY SCRUTINY

Alphabet's chief financial officer, Ruth Porat, reported "modest impact" on
YouTube ad sales from Apple's efforts. But analysts said Google overall was
less affected than peers because its search engine collects data on user
interests that is valuable to advertisers and is unmatched in the industry.

"They are almost completely immune to Apple's changes," said Collin Colburn,
an analyst at tech consultancy Forrester.

Other companies also faced slowdowns because advertisers cut spending as
they struggled to staff up and keep shelves stocked amid hiring and
supply-chain issues brought on by the pandemic. Schindler said supply-chain
challenges affected only Google's sales of automotive ads.

Google Cloud, which trails Amazon.com Inc (AMZN.O) and Microsoft Corp
(MSFT.O) in cloud services market share, increased revenue by 45% to $4.99
billion, slightly below estimates of $5.2 billion.

Alphabet's total costs increased 26% to $44.1 billion in the third quarter
and the company's workforce size passed 150,000 employees.

Alphabet shares have outperformed those of many big peers since the end of
last year, rising about 57%. Microsoft is up 39%, Facebook 20% and Amazon 2%
over the same period.

But shares of Alphabet trade at a slight discount to Facebook, the
internet's No. 2 seller of online ads. Facebook trades at 6.8 times expected
revenue over the next 12 months compared with 6.4 times for Alphabet.

Facebook has been swamped with accusations in recent weeks from a former
employee who leaked thousands of confidential company files to media and
filed complaints with the U.S. securities regulator over alleged
misrepresentations by the company about its risks from hosting inappropriate
content. read more

Google has been caught up in some of the fallout. A YouTube policy official
testified to U.S. Congress earlier on Tuesday alongside other companies
about the harms of social media to young users. read more

Investors also await further changes to Google's businesses as a result of
regulatory scrutiny. U.S. and other authorities have alleged some of the
company's practices in advertising and search are anticompetitive, though
the company argues they are to benefit users. In one concession to critics
last week, Google said it would cut some of the fees it collects from apps
on its Play app store starting next year.

But the move could end up generating new revenue for Google if it leads
companies such as music streamer Spotify Technology SA (SPOT.N) to start
selling subscriptions through their apps and giving Google 10% to 15% of the
sum.

Alphabet's Porat said on Tuesday that earlier trims to Play fees would cut
in to sales.

The Thomson Reuters Trust Principles.

Twitter avoids revenue hit from Apple privacy changes

(Reuters) - Twitter Inc (TWTR.N) on Tuesday reported its quarterly revenue
grew 37% and avoided the brunt of Apple Inc (AAPL.O) privacy changes on
advertising that hobbled its rivals, sending its shares up 3%.

The social networking site has been working to add new features such as
audio chat rooms to attract users, and also rolled out improvements to its
advertising capabilities to reach its goal of doubling annual revenue by
2023.

Advertising revenue was $1.14 billion during the quarter ended Sept. 30, in
line with consensus estimates.

The company said it saw a "modest" impact to ad revenue due to privacy
changes Apple rolled out, which prevent advertisers from tracking users on
their devices without their consent.

Investors had expected Twitter would be relatively shielded from being hurt
by the changes, because most of its advertisers do not rely on highly
targeted ads. read more

As the San Francisco-based company works to expand its targeted advertising
business, it is introducing more features like topics that users can follow
on Twitter. Those features provide data on people's interests that can
eventually be used to help deliver relevant ads, said Twitter Chief
Financial Officer Ned Segal, during a conference call with analysts.

"A lot of this is opportunity that's in front of us," he said.

Twitter's tech peers Snap (SNAP.N) and Facebook (FB.O) said the Apple
changes hurt their ability to target and measure digital ads, citing the
updates as the reason why the companies fell short of revenue expectations.
read more

Twitter said monetizable daily active users, its term for users who are
served ads, was 211 million during the third quarter, missing analyst
estimates of 212.6 million, according to IBES data from Refinitiv.

While Twitter increased its number of users outside the United States by 5
million from the previous quarter, its U.S. base remained flat.

Total revenue, which also includes money that Twitter earns from data
licensing, was $1.28 billion, also in line with Wall Street targets.

Twitter said its costs this year from hiring and investing in a new data
center will flow into next year, resulting in a mid-20% increase in total
costs for 2022.

The company forecast fourth quarter revenue between $1.5 billion to $1.6
billion.

Twitter previously announced it would sell its advertising technology unit
MoPub, and the deal is expected to close in the first quarter of 2022.

The company said it does not expect to be able to recoup the revenue loss
next year from selling MoPub, estimated between $200 million to $250
million, though it added the sale does not affect Twitter's goal of doubling
annual revenue by 2023.

The Thomson Reuters Trust Principles.

Invest Wisely!

Bulls n Bears 

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INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

National Unity Day

December 22

Christmas Day

December 25

Boxing Day

December 26

Public Holiday in lieu of Boxing Day falling on a Sunday

December 27

Companies under Cautionary

ART

PPC

Starafrica

Fidelity

Turnall

Medtech

Zimre

Nampak Zimbabwe

 <mailto:info at bulls.co.zw> 

DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

(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
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