Major International Business Headlines Brief::: 05 September 2021

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Major International Business Headlines Brief::: 05 September 2021

 


 

 


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ü  Tanzania: Nzasa-Kilunde-Buza Road Section Nears Completion

ü  Nigeria: Health Sector Crisis Deepens As Another Union Gives FG Strike
Notice

ü  Nigeria Shuts Down Telecom Services as Fight On Terror Intensifies

ü  Africa Data Centres to Set Up 10 New Facilities at U.S.$500 Million
Across the Continent

ü  Didi denies reports that Beijing city is coordinating companies to invest
in it

ü  New Boeing 787 Dreamliners may not be delivered till late Oct -WSJ

ü  Rats, drought and labour shortages eat into global edible oil recovery

ü  Black unemployment setback shows Fed's challenges targeting 'broad and
inclusive' job growth

ü  Drug companies say enough U.S. states join $26 bln opioid settlement to
proceed

ü  Wall St Week Ahead Investors grow wary as stocks hit new highs

ü  U.S. offshore oil recovery begins with ports, refineries restarting

ü  U.S. job growth takes giant step back as Delta variant hits restaurants

ü  Saudi non-oil sector expansion loses momentum in August - PMI

 

 

 

 

 


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Tanzania: Nzasa-Kilunde-Buza Road Section Nears Completion

REHABILITATION and upgrading of Nzasa-Kilungule- Buza road in Temeke
Municipality under the Dar es Salaam Metropolitan Development Project (DMDP)
will be complete by October this year.

 

Deputy Minister of State in the President's office, Regional Administration
and Local Government, Mr David Silinde, told the National Assembly on
Wednesday that the project undertaken by contractor of Group Six
International Ltd will cost 19.13bn/-

 

He said out of the total section of 7.6 km road under construction, 5.4km
will be tarmacked and the remaining part would be concrete, specifically for
the Dar Rapid Transit buses.

 

Mr Silinde gave the statistics when responding to Ms Dorothy Kilave
(Temeke-CCM), who wanted to know when the project will be completed as it
connects Temeke and Mbagala residents.

 

The deputy minister said the project being implemented through a World Bank
loan, with the client being Temeke municipal council, will also cover
construction of the Buza bus terminal. Implementation of the project started
on April last year and is expected to be completed next month, whereas so
far it has been completed by 69per cent and 8.05bn/- has already been paid
to the contractor.

 

He assured the parliamentarian that the government will be renovating and
upgrading road infrastructures in Temeke as per availability of funds for
improving transport infrastructures.-Daily News.

 

 

Nigeria: Health Sector Crisis Deepens As Another Union Gives FG Strike
Notice

The industrial crisis in Nigeria's healthcare sector appears to be worsening
following the threat by health workers under the auspices of the Joint
Health Sector Union (JOHESU) to embark on a nationwide industrial action in
15 days if their demands were not met by the federal government.

 

In a letter to the Minister of Health, dated September 2, 2021 and titled: "
Notice of 15-day ultimatum and commencement of an indefinite strike", JOHESU
and the Assembly of Healthcare Professional Associations (AHPA) said they
were issuing the threat due to the gross neglect of the welfare of their
members in the health sector by the federal government despite several
letters of complaint.

 

The unions listed several outstanding welfare issues including; adjustment
of the Consolidated Health Salary Structure (CONHESS) as was done with the
Consolidated Medical Salary Structure (CONMESS), payment of withheld 2018
salaries of staff of the Federal Medical Centre, Owerri, Jos Teaching
Hospitals and Lagos Teaching Hospitals, review of the defective
implementation of the COVID19 special inducement and hazard allowance,
Implementation of increase in the retirement age from 60 - 65 years for
health workers and 65 -70 years for consultant health professionals and
payment of reviewed hazard allowance..

 

"Consequently, JOHESU in compliance with the provisions of Section 41 of the
Trade Dispute Act, Cap T8 LFN, 2004, is constrained to give the federal
government 15 days ultimatum with effect from Friday, September 3, 2021 and
to inform you that with effect from midnight Friday September 17, 2021 all
our members in health Institutions nationwide will embark on indefinite
strike, whole states and local government chapters are placed on red alert
to join the strike if the federal government foot drags in attending to our
demands".- This Day.

 

 

 

Nigeria Shuts Down Telecom Services as Fight On Terror Intensifies

The rise in banditry and kidnapping in six North West states has forced
Nigeria to shut down telecommunication services. This is to enable the
military and other security agencies to fight terrorism.

 

The Nigeria Communications Commission (NCC) on Friday directed all
telecommunication companies, including Globacom, MTN, Airtel, and Ntel to
shut down their services with immediate effect for two weeks.

 

The shutdown, which will run from September 3 to September 17, 2021, may be
extended depending on the level of success of the military operation.

 

The increase in attacks and kidnappings has reached a worrying proportion
that the states in the North West have resorted to use extra efforts to stop
the menace. The abductions of innocent citizens, children and students have
become rampant.

 

In addition to the abduction of 73 students on Thursday, over 1,860 students
are still being held by bandits in Zamfara and five other North West states.

Increase in prices

 

Bandits have also resorted to destroying farmlands, cattle rustling and
burning down villages. The situation has led to food shortage and increase
in prices.

 

The directive to the telecommunication firms was signed by the NCC Chief
Executive Officer Prof. Umar Dambatta, on Friday.

 

"Insecurity in Zamfara has necessitated the shutdown of all
telecommunication services to enable relevant security agencies to address
the security challenges in the state."

 

He directed the shutdown of all sites in the neighbouring states that could
provide telecommunication service in Zamfara, the epicentre of banditry and
kidnapping.

 

Apart from the shutdown of telecom sites, the governments of Kaduna,
Zamfara, Katsina, Niger, Sokoto states have suspended weekly markets,
movement of cattle, sale of petrol in jerry-cans as well as motorcycle
transport.

The measures have been seen to cause more hardships, especially in the
movement of foodstuffs.

 

Residents unhappy

 

In Katsina, the home State of President Muhammadu Buhari, where borders with
Niger had been shut, residents are unhappy with the negative effects of
suspending economic activities.

 

Mr Ibrahim Faskari, a resident of Faskari Local Government in Katsina state,
said: "One of the measures that have serious negative effects on our people
is the closure of cattle markets because in most cases, cattle rustlers are
not the ones that bring cattle to the markets."

 

Residents in Zamfara said that the rural economy has been affected because
dwellers depended on their markets for trading.

 

"The ban on the sale of fuel in jerry-cans is also affecting the movement of
people. The majority of the people that are affected by the ban are those
riding motorbikes in the rural communities," Mr Ahmed Musa, a commercial
motorcycle rider said.

 

Embattled Governor Bello Matawalle of Zamfara, on Friday cautioned
journalists against relaying unverified information on the security
situation. He said that this could fuel the already tense situation in the
state.

 

Meanwhile, the Nigerian Security and Civil Defence Corps (NSCDC) has warned
that over 85 per cent of schools are unsafe and vulnerable to bandit
attacks.

 

The NSCDC said the Commandant-General Ahmed Audi had initiated a safe
Schools' project and established the female squad of the corps to ensure
safety in schools.-Nation.

 

 

Africa Data Centres to Set Up 10 New Facilities at U.S.$500 Million Across
the Continent

Johannesburg — Africa Data Centres, has announced plans to build large
hyper-scale data centres in ten African countries which will among other
things, boost employment and the growth of economies.

 

The project which will be undertaken over the next two years at a cost of
more than USD 500m will be funded through new equity and facilities from
leading development finance institutions and multilateral organisations.

 

The firm, which is an affiliate of Liquid Intelligent Technologies (former
Liquid Telecom Kenya) already has nine data centres across six African
countries.

 

Africa Data Centres CEO, Mr Stephane Dupro, noted that the firm has acquired
land in the respective countries ahead of the construction of the facilities
which will remain interconnected.

 

"Examining Africa's growth trajectory has allowed us to make investment
decisions on new locations and confidently commit to expanding selected
existing locations, resulting in the largest investment of its kind in
history, the impact of a data centre is long-lasting, with immediate job
creation stemming from the physical build and enduring economic growth once
operational," he said.

He noted that the data centres will provide high-speed data facilities which
will also attract multinational organisations seeking to penetrate the
African market.

 

"This commitment to Africa, through the continuous deployment of
capital-intensive infrastructure projects, has pivotal knock-on effects for
the communities and economies we serve," he added.

 

Among the sectors which will benefit from the centres include banking and
growing fintech sectors, insurance and medical organisations, the public
sector, hyper-scale cloud providers, content providers as well as Small and
Micro Enterprises (SMEs).

 

"These industries, are highly sensitive to data speed, security, guaranteed
uptime and are exacting when it comes to reliability and trust in their
providers," the firm said in a statement.

 

In order to reduce carbon emissions, the firm noted that it will invest in
innovative grey-water systems, waste disposal and renewable energy
sources.-Capital FM.

 

 

Didi denies reports that Beijing city is coordinating companies to invest in
it

(Reuters) - China's ride hailing giant Didi Global Inc (DIDI.N) said on
Saturday that media reports that the Beijing city government is coordinating
companies to invest in it are not correct.

 

"Didi is currently actively and fully cooperating with cybersecurity probe,
foreign media reports that Beijing city government is coordinating companies
to invest in it are incorrect," it said on Weibo.

 

Bloomberg News reported on Friday, citing unidentified people familiar with
the matter, that China's capital city was considering taking Didi under
state control and had proposed that government-run firms invest in it. read
more

 

Under the preliminary proposal, some Beijing-based companies including
Shouqi Group, part of the state-owned Beijing Tourism Group, would acquire a
stake in Didi, Bloomberg reported.

 

Beijing-based Didi faces a cybersecurity investigation by Chinese
authorities after its New York initial public offering in June. Chinese
authorities have stepped up their regulation of technology firms in the past
year to improve market competition, data handling and their treatment of
employees. read more

 

Didi is controlled by the management team of co-founder Will Cheng and
President Jean Liu. SoftBank Group Corp (9984.T), Uber Technologies Inc
(UBER.N) and Alibaba (9988.HK) are among investors in the company.

 

The Thomson Reuters Trust Principles.

 

 

New Boeing 787 Dreamliners may not be delivered till late Oct -WSJ

(Reuters) - Boeing Co's (BA.N) delivery of 787 Dreamliners will likely
remain halted until at least late October as the U.S. Federal Aviation
Administration has rejected the company's recent proposal to inspect them,
the Wall Street Journal reported on Saturday.

 

The FAA confirmed on July 12 that some undelivered Boeing 787s have a new
manufacturing quality issue the company needs to fix before shipment. read
more

 

Airlines pay most of the purchase price upon delivery.

 

Boeing met with FAA on Aug. 2 to persuade the agency to approve an
inspection method that would speed deliveries with targeted checks rather
than nose-to-tail teardowns, the newspaper said.

 

 

The regulators flagged internal company disagreements over the aircraft
sample size, and repeated that Boeing's employee group that acts as an
in-house regulator needs to concur with the company's proposals, the report
added.

 

An FAA spokesman said the agency continues to engage with Boeing and will
not sign off on the inspections "until our safety experts are satisfied."

 

Boeing's 737 MAX and 787 have been afflicted by electrical defects and other
issues since late last year, and it only resumed deliveries of the 787 in
March after a five-month hiatus.

 

A Boeing spokesperson said the company was committed to providing full
transparency with regulators and working with the FAA through the rigorous
process to resume 787 deliveries.

 

The Thomson Reuters Trust Principles.

 

 

Rats, drought and labour shortages eat into global edible oil recovery

(Reuters) - In a sprawling oil palm plantation in the Malaysian state of
Perak, watermelon seedlings are sprouting from freshly ploughed earth
between palm saplings while rented cows graze in overgrown areas of the
estate.

 

A coronavirus pandemic-induced labour crunch has forced managers of the
2,000-hectare estate in Slim River to find creative ways to upkeep their
fields, even as prices of the world's most consumed edible oil are near
record highs.

 

"It is easier to pull out your own teeth than to get new workers now," said
estate manager Ravi, who gave his first name only. "I can't find the workers
to maintain the fields."

 

Malaysia, the world's second-largest producer of palm oil, is facing a
perfect storm of production headwinds that will likely drag global stocks to
their lowest level in five years.

 

Global edible oil statistics

The Southeast Asian country is a microcosm of the difficulties facing
producers of various edible oils across several continents, from Canadian
canola farmers to Ukranian sunflower growers, as they struggle to meet
strong demand.

 

Global food prices have scaled 10-year highs this year - the Food and
Agriculture Organization's (FAO) price index is up more than a third since
last summer - due in large part to a surge in the price of vegoils that are
vital for both food preparation and as fat in numerous daily staples. read
more

 

An 80% climb in vegetable oils since mid-2020 has lifted global food prices
to multi-year highs

The FAO's global edible oils index is up 91% since last June, and is
expected to climb further as economies reopen following COVID-19 lockdowns,
boosting food and fuel consumption of edible oils.

 

Key global edible oil prices

But producers have been battling a range of impediments, including labour
shortages, heatwaves and vermin infestation, that is driving collective
stocks of the world's most consumed edible oils - palm, soybean, canola
(rapeseed) and sunflowerseed - to their lowest levels in a decade.

 

MALAYSIAN WOES

 

In Malaysia, which accounts for around 33% of global palm oil exports, the
average yield of palm fruit bunches in Jan-June fell to 7.15 tonnes per
hectare from 7.85 a year ago. Malaysian Palm Oil Board data shows a drop in
average crude palm oil yields to 1.41 tonnes per hectare, from 1.56 tonnes
over the same period last year.

 

Many plantations were harvesting with two-thirds or less of the required
workforce, after government coronavirus restrictions cut off the usual
supply of migrant workers from Indonesia and South Asia.

 

More than half a dozen plantation owners interviewed by Reuters said the
lack of workers had forced them to extend their harvesting window from 14
days to as many as 40 days, a change that compromises the quality of the
fruit and risks the loss of some parts of the fruit bunches.

 

"It is especially bad in Sarawak. Some companies are seeing production
falling by 50% because of the shortage of harvesters," said a plantation
manager, who spoke on condition of anonymity because he was not authorised
to speak to the media.

 

The Slim River estate has delayed replanting and shut its nursery for the
first time in 20 years to redeploy workers for harvesting.

 

Another plantation manager, named Chew, said he was forced to increase wages
by 10% to retain workers.

 

Less manpower to maintain the plantations also means more pests, including
rats, moths and bagworms.

 

"It has resulted in an environment that is good for rats to nest, feed and
breed and natural predators cannot catch up," said Andrew Cheng Mui Fah, a
plantation official in Sarawak.

 

At Slim River, Ravi said around a quarter of the estate was facing a bagworm
infestation that "will skeletonise the leaves and cause small (fruit) bunch
formation."

 

He was referring to the larvae of the bagworm moth that grow and feed on
trees.

 

INDONESIAN MILLS

 

Neighbouring Indonesia, the world's largest producer of palm oil, does not
have the same labour shortage issues and output is expected to rise this
year as more area has been planted to palm.

 

However, operations at palm oil mills, where the palm fruit is converted
into crude palm oil, have been impacted by COVID-19 restrictions, said Dorab
Mistry, director of Indian consumer goods company and major consumer Godrej
International.

 

"Shutting down of palm oil mills right across the length and breadth of
Malaysia (and) Indonesia has been a huge dampener on the production side,"
he said at the annual U.S. Soy Export Council conference on Aug 25.

 

Palm oil exports by origin

Total 2021 output from Indonesia and Malaysia, which together account for
roughly 90% of world palm oil, was estimated at 66.2 million tonnes,
according to Refinitiv Commodities Research published on Aug. 4.

 

That is about flat compared with 2020, but analysts said downward revisions
are likely if labour shortages and pest infestations worsen.

 

NORTH AMERICAN DRY SPELL

 

Meanwhile, farmers in western Canada planted canola into some of the driest
soils in a century this spring, sending canola futures to all-time highs in
early May.

 

A July heatwave then scorched crops throughout the Canadian Prairies,
leading the U.S. Department of Agriculture (USDA) to slash its estimate of
canola output by 4.2 million tonnes to 16 million tonnes, the lowest since
the 2012-13 season.

 

"We haven't had much rain to speak of and the crop is withering," said Jack
Froese, who has farmed canola near Winkler, Manitoba, for nearly 50 years.

 

Froese expects a yield per acre of just a quarter of last year's level:
"It's very disheartening."

 

U.S. soybeans have also been sapped by drought, with the USDA lowering its
production forecast by 1.8 million tonnes in August from the month prior.

 

That is expected to cut U.S. soybean oil stocks to eight year lows and U.S.
soyoil exports to decade lows.

 

"We're looking at an average crop because we were lucky enough to have some
subsoil moisture," said Jared Hagert from his North Dakota farm. "But you
don't have to go too far west of here to get into some really rough crops."

 

In some good news for buyers, Brazil's soybean crop is expected to hit a
record 144.06 million tonnes in the 2020/21 season, driven by a 4% rise in
the area planted to the crop, agribusiness consultancy Datagro estimated.

 

Ukraine, the top sunflower seed producer according to the USDA, is expected
to lift output by 18% from a 2020 drought-hit harvest and oil exports are
forecast to rise to 6.35 million tonnes from 5.38 million last season,
according to its agriculture ministry.

 

WORSENING OUTLOOK

 

Still, the outlook for edible oils production overall remains poor and
stocks are likely to tighten further, leaving the markets tight well into
next year and adding to inflationary pressures, according to some analysts.

 

In Malaysia, worsening COVID-19 outbreaks will leave plantations starved of
workers through the rest of the peak palm production window.

 

Canadian farmers continue to face drought conditions, leading official
agency StatsCan to peg canola output down 24.3% and yields down 30.1%.

 

"We have multiple issues with edible oil supplies worldwide, palm oil in
Malaysia, canola in Canada and La Nina curbing soybean output in South
America," Mistry said.

 

"We are expecting lower oil content in Canada's canola crop due to the
drought," he said. "The supply tightness in vegetable oil is expected to
continue well into 2022."

 

The pressure on stocks is already feeding through to consumer prices and the
upward trend is expected to continue, especially as refiners lift prices to
cover the surge in raw material costs.

 

Singapore-based Wilmar International (WLIL.SI) said a time lag between the
surge in raw material costs and consumer price rises it imposed in the first
half of the year had negatively impacted margins.

 

Mewah Group (MEWI.SI), one of the largest refineries in the region, said
average sale prices for its bulk goods and consumer packs rose almost 54%
and 24% respectively in the first half from a year ago.

 

"Everyone along the supply chain is absorbing some of the higher costs,"
said Oscar Tjakra, a senior analyst at food and agribusiness research at
Rabobank. "The cost push should continue next year."

 

With global consumers already facing general economic uncertainty due to the
coronavirus pandemic, further increases in edible oil prices will take a
toll on many livelihoods due the inelastic nature of food demand.

 

Several countries including Nigeria, Egypt, Turkey and The Philippines have
all recorded big jumps in food inflation in recent months. The price
pressure may continue as higher edible oil costs are passed on by suppliers,
leaving consumers with little choice but to pay up for the staple. read more

 

Food inflation picks up around the world

"Even in poorer regions, such as Sub-Saharan Africa, where consumers suffer
greatly from high prices, consumption has only declined very marginally,"
said Julian McGill, head of South East Asia at LMC International.

 

"There is simply not much flexibility in food use of vegetable oils."

 

The Thomson Reuters Trust Principles.

 

 

Black unemployment setback shows Fed's challenges targeting 'broad and
inclusive' job growth

(Reuters) - Attaining its goal of maximum employment has always been a tall
order for the Federal Reserve but broadening the scope of that objective to
one that is also "broad and inclusive" has made the task tougher still, with
Friday's payrolls report standing as a case in point.

 

Job gains in August were far more meager than expected largely due to the
surge in coronavirus cases. And even though the unemployment rate fell to a
pandemic-era low of 5.2%, it did not drop for everyone. The jobless rate
rose for Blacks - to 8.8% from 8.2% - and they were the only major racial
demographic group to see an increase.

 

That figure on its own creates tough optics for the Fed as it approaches a
consequential meeting this month, especially as other data from the Labor
Department suggest the Black employment recovery from last year's recession
continues to progress - by some measures more so than for whites.

 

Reuters Graphics

Black workers continued to notch strong gains in employment and in the labor
force participation rate this year, while it appears improvements may be
moderating for white workers.

 

For example, the share of Black people who are either working or looking for
jobs, or the labor force participation rate, rose in August to 61.6% and is
now equal to the participation rate for white workers - a metric where Black
workers have historically lagged.

 

And the share of Black people who were employed in August, known as the
employment to population ratio, reached 56.2%, up from 54.7% in January.
This was slightly more than the gains seen for white workers. "That's an
unambiguous improvement" for Black workers, Nick Bunker, an economist with
Indeed Hiring Lab said in an email.

 

At 58.8%, the employment to population ratio for white workers is up from
57.9% in January.

 

Still, the trends in the unemployment rate are much less straightforward.
After last month's increase, the jobless rate for Black workers is still at
crisis-era levels and is down just 0.4 percentage points from the start of
the year. The unemployment rate for white workers, at 4.5%, is below the
national unemployment rate and down by 1.2 percentage points from January.

 

"Where that rise in unemployment came from is up for debate," said Bunker,
noting it could have been driven by a rise in Black people trying to find
work but not succeeding, or by an increase in the number of Black people who
became unemployed.

 

Policymakers will need to watch what happens in the coming months as the
U.S. labor market works through the effects of multiple shifts, including
cuts to unemployment benefits, the Delta variant's drag on spending and
travel and persistent challenges with childcare and schooling.

 

If the slowdown in hiring persists, that may not bode well for Black
workers, which often face the deepest losses during downturns and the
slowest recoveries, said Daniel Zhao, a senior economist with Glassdoor.

 

 

"Black workers are often first to be fired and last to be rehired, so if the
recovery slows we might expect to see that the impact is more on Black
workers," Zhao said.

 

The Thomson Reuters Trust Principles.

 

 

Drug companies say enough U.S. states join $26 bln opioid settlement to
proceed

(Reuters) - Three large U.S. drug distributors and drugmaker Johnson &
Johnson (JNJ.N) will proceed with a proposed $26 billion settlement
resolving claims that they fueled the opioid epidemic after "enough" states
joined in, the companies said on Saturday.

 

The companies had until Saturday to decide whether enough states back the
$21 billion proposed settlement with McKesson Corp (MCK.N),
AmerisourceBergen Corp (ABC.N) and Cardinal Health Inc (CAH.N) and a $5
billion agreement with J&J.

 

The distributors said 42 states, five territories and Washington, D.C.,
signed on to their agreement.

 

Alabama, Georgia, Nevada, New Mexico, Oklahoma, Washington, West Virginia
are not participating in the settlement, a person familiar with the matter
said. New Hampshire agreed to settle only with the distributors, while Rhode
Island joined only J&J’s deal, the person said.

 

The companies will make their first annual settlement payment into escrow on
or before Sept. 30, the distributors said. The final amount will depend on
several factors, including the final participation rate of states and
political subdivisions, they added.

 

North Carolina Attorney General Josh Stein, a lead settlement negotiator,
called the support level a "remarkable showing of unity and commitment
across the country to address this problem."

 

The settlement's complex formula envisioned at least 44 states
participating, but ultimately the companies got to decide whether a
"critical mass" had joined and whether to finalize the deal.

 

Cities and counties within participating states have through Jan. 2 to join
as well. Ultimately, $10.7 billion is tied to the extent localities
participate.

 

The deal, unveiled by 14 state attorneys general on July 21, is designed to
resolve more than 3,000 lawsuits accusing the distributors of ignoring red
flags that pain pills were being diverted into communities for illicit uses
and that J&J played down the risks of opioid addiction.

 

The money would fund treatment and other services.

 

The companies deny wrongdoing, saying the drugs were approved by the U.S.
Food and Drug Administration and that responsibility for ballooning
painkiller sales lies with doctors, regulators and others.

 

The deal is separate from a settlement resolving similar claims against
OxyContin maker Purdue Pharma LP and its wealthy Sackler family owners. A
bankruptcy judge on Wednesday approved that deal, which Purdue values at
more than $10 billion. read more

 

The Thomson Reuters Trust Principles.

 

 

Wall St Week Ahead Investors grow wary as stocks hit new highs

(Reuters) - (This story Sept 3 corrects S&P 500 year-to-date gain to 21%
instead of 20.4%, paragraph 8)

 

Investors are girding their portfolios for potential stock market
volatility, even as equities hover near fresh highs after logging seven
straight months of gains.

 

Utilities (.SPLRCU) are the S&P 500's best-performing sector so far this
quarter with a 10.2% gain. They have been followed by other popular
destinations for nervous investors, including real estate and healthcare.

 

In derivatives markets, the gap in price between the front month Cboe
Volatility Index futures contract and the VIX index itself (.VIX) is higher
than it has been about 85% of the time over the last five years. This
suggests some investors expect the calm in stocks to give way to more
pronounced price swings in the coming weeks and months.

 

Meanwhile, the Japanese yen and Swiss franc - viewed as havens during
uncertain times - have outperformed most G10 currencies this quarter.

 

"It's been a year of positive market returns, but it's a bull market which
has pretty defensive undertones," said Saira Malik, head of global equities
at money manager Nuveen Investments.

 

The demand for downside protection illustrates a conundrum that has
bedeviled investors at various times during the market's post-pandemic
surge.

 

Ultra-low yields on fixed income have left few alternatives to equities, and
betting against stocks has been a disastrous strategy in the last
year-and-a-half.

 

Stocks demonstrated their resilience on Friday, when the S&P appeared to
shrug off a big miss on August U.S. employment data, as some market
participants bet a weaker economy could undercut the case for the Federal
Reserve to unwind its market-supportive easy money policies in coming
months. The benchmark index is up nearly 21% this year. read more

 

At the same time, many have grown antsy in a market that has gone 292
calendar days without a decline of 5% or more, nearly three times the
average since World War II, according to data from CFRA's Sam Stovall.
Rising valuations, ebbing economic growth and signs of speculative excess
have only added to their concerns.

 

"It's been a wonderful ride for U.S. equities ... but moving forward we
think it is going to be a little bit of a different picture," said David
Grecsek, managing director in investment strategy and research and partner
at Aspiriant, which manages about $14.5 billion.

 

Concerns over equity valuations have prompted Grecsek to take profits in
some of his equity positions and shift some money into non-U.S. stocks,
including emerging markets.

 

The S&P 500's price-to-earnings ratio on a forward 12-month basis stands at
21.3, a 35% premium to its 20-year average, according to Refinitiv
Datastream.

 

Investors next week will be keeping an eye on quarterly results from video
game retailer GameStop Corp (GME.N), whose wild ride this year put a
spotlight on retail investors' mania for so-called meme stocks that some say
is one sign of irrational exuberance in markets.

 

On the macro front, next week's U.S. August producer price index data could
provide some clues on how inflation is shaping up after July showed the
largest annual increase in over a decade. read more

 

With the Delta variant of the coronavirus continuing hindering growth, "a
lot of investors are seeing maybe some headwinds and positioning more
defensively," said Ross Mayfield, investment strategist at Baird in
Louisville, Kentucky.

 

Analysts at Morgan Stanley in the past week cut their view on third-quarter
U.S. gross domestic product to a gain of 2.9%, from a 6.5% increase.

 

Some of the flows into defensive sectors may have more to do with investors
hunting for yield rather than worries over an impending market crash.

 

The S&P 500 Utilities index (.SPLRCU) sports a yield of about 3%, while the
yield on the benchmark U.S. 10-year Treasury note stood at around 1.33% on
Friday.

 

"The wall of worry does loom on the horizon ... but the main reason
defensive (stocks) are holding up relatively well is because of the income
stream attached to them," said Terry Sandven, chief equity strategist at
U.S. Bank Wealth Management.

 

Sandven, Nuveen's Malik and Baird's Mayfield all remain bullish on stocks,
despite the market's defensive undertone.

 

History may be on their side: the S&P has held on to a double-digit annual
gain in eight of the last 10 years that it rose by 20% or more in the period
from January through August, as it has in 2021, according to a report from
BofA Global Research. The exceptions were 1929 and 1987, which were both
marked by historic market crashes.

 

The Thomson Reuters Trust Principles.

 

 

U.S. offshore oil recovery begins with ports, refineries restarting

(Reuters) - U.S. Gulf Coast energy companies on Saturday got a boost from
the reopening of ports and restart of oil refineries shut by Hurricane Ida,
but damage to key facilities still crimped oil production.

 

The ninth named storm of the 2021 Atlantic hurricane season has cut more
U.S. oil and gas production than any of the eight named storms to strike the
U.S. Gulf Coast last year. After landfall in Louisiana last Sunday, Ida
raced to the U.S. northeast, causing deadly flooding. read more

 

Royal Dutch Shell Plc (RDSa.L), the largest U.S. Gulf Coast producer, was
still evaluating damage to its West Delta-143 offshore platform, which when
operating transfers about 200,000 barrels of oil and gas per day from three
offshore oil fields.

 

Shell's work on a replacement heliport needed to ferry offshore continues,
Shell said. Damage to its original facility prevented a return of offshore
workers to platforms.

 

 

Several Louisiana heliports were damaged or without power and access to
fuel, slowing crew returns at several major oil producers. read more

 

REFINERS BEGIN RESTARTS

 

Shell's 230,611 barrel-per-day (bpd) Norco, Louisiana, oil processing plant
also remained knocked out by the storm. The refinery sustained damage and
assessments continue on its status and at a Geismar, Louisiana, chemical
plant, the company said.

 

The White House this week agreed to provide a combined 1.8 million barrels
of crude oil from the nation's Strategic Petroleum Reserve (SPR) to refiners
Exxon Mobil Corp (XOM.N), and Placid Refining Company(PRC.UL) to produce
gasoline.

 

Nine refineries were knocked offline by Ida's winds and utility power
losses. Five, including those owned by Exxon, Placid and Marathon Petroleum
Corp (MPC.N), could be back online by within two weeks, estimated Robert
Campbell, head of oil products research at consultancy Energy Aspects.

 

About 21%of offshore platforms remained unoccupied, and 93% of oil
production and 86% of natural gas outputwere offline, government data
released on Saturday showed. Some wells in the Gulf of Mexico, which
accounts for about a fifth of U.S. output, could be shut for weeks, analysts
said.

 

MISSISSIPPI RIVER OPENS

 

The lower Mississippi River and New Orleans ports were reopened to traffic
and cargo operations, the Coast Guard said, allowing the resumption of
grain, metal and energy shipments.

 

"It was imperative for the economy of the region and entire United States
that the river be reopened in a timely manner," said Brett Bourgeois,
executive director of maritime trade group New Orleans Board of Trade.

 

Over 5,000 deep drafts vessels bring cargo in and out of the five major
ports, he said.

 

The Louisiana Offshore Oil Port (LOOP), near to where Ida made landfall with
150 mile per hour (240 kph) winds, was continuing repairs and assessments of
its facilities, it said on Saturday.

 

The LOOP is the only U.S. deepwater oil port, with an offloading platform
that can receive more the 1 million barrels a day of crude. Its marine
terminal sits 18 miles south of Grand Isle, Louisiana.

 

POWER SLOWLY RETURNS

 

Utility Entergy Corp (ETR.N)said on Saturday most of Baton Rouge should have
power restored by Tuesday, followed by most of New Orleans by Wednesday.
However, areas between the two could be without electricity through month's
end. More than 700,000 Louisiana homes and businesses remain without power,
according to PowerOutage.com.

 

U.S. weather forecasters were warning about a new tropical disturbance,
expected to move north across the Gulf of Mexico next week that could bring
more rains to Louisiana.

 

The U.S. National Hurricane Center gave the disturbance at least a 30%
chance of becoming a tropical depression. If it becomes a tropical storm,
with winds of at least 39 miles per hour (63 kph), it will be named Mindy.

 

The Thomson Reuters Trust Principles.

 

 

U.S. job growth takes giant step back as Delta variant hits restaurants

(Reuters) - The U.S. economy created the fewest jobs in seven months in
August as hiring in the leisure and hospitality sector stalled amid a
resurgence in COVID-19 infections, which weighed on demand at restaurants
and hotels.

 

But other details of the Labor Department's closely watched employment
report on Friday were fairly strong, with the unemployment rate falling to a
17-month low of 5.2% and July job growth revised sharply higher. Wages
increased a solid 0.6% and fewer people were experiencing long spells of
unemployment.

 

This points to underlying strength in the economy even as growth appears to
be slowing significantly in the third quarter because of the soaring
infections, driven by the Delta variant of the coronavirus, and relentless
shortages of raw materials, which are depressing automobile sales and
restocking.

 

 

"It is important to keep the right perspective," said Brian Bethune,
professor of practice at Boston College. "Given the supply chain constraints
and the ongoing battle to lasso COVID-19 to the ground, the economy is
performing exceptionally well."

 

The survey of establishments showed nonfarm payrolls increased by 235,000
jobs last month, the smallest gain since January. Data for July was revised
up to show a whopping 1.053 million jobs created instead of the previously
reported 943,000.

 

Hiring in June was also stronger than initially estimated, leaving average
monthly job growth over the past three months at a strong 750,000.
Employment is 5.3 million jobs below its peak in February 2020. Economists
polled by Reuters had forecast nonfarm payrolls increasing by 728,000 jobs
in August.

 

Nonfarm payrolls

Though the Delta variant was the biggest drag, fading fiscal stimulus was
probably another factor. The response rate to the survey is lower in August
and the pandemic has made it harder to adjust education employment for
seasonal fluctuations.

 

The initial August payrolls print has undershot expectations over the last
several years, including in 2020. Payrolls have been subsequently revised
higher in 11 of the last 12 years.

 

"The August payroll figures have historically been revised higher in the
years since the Great Recession, sometimes significantly, and there's a good
chance this effect will occur again this time," said David Berson, chief
economist at Nationwide in Ohio.

 

Employment in the leisure and hospitality sector was unchanged after gains
averaging 377,000 per month over the prior three months. Restaurants and
bars payrolls fell 42,000 and hiring at hotels and motels decreased 34,600,
offsetting a 36,000 gain in arts, entertainment and recreation jobs.
Retailers shed 29,000 jobs.

 

Construction lost 3,000 jobs. There were gains in mining, financial
services, information and professional and business services as well as
transportation and warehousing.

 

Manufacturing added 37,000 jobs, led by a 24,100 increase in the automobile
industry. Factory hiring remains constrained by input shortages, especially
semiconductors, which have depressed motor vehicle production and sales.

 

General Motors (GM.N) and Ford Motor Co (F.N) announced production cuts this
week. read more

 

Motor vehicle sales tumbled 10.7% in August.

 

That, together with raw materials shortages, which are making it harder for
businesses to replenish inventories, prompted economists at Goldman Sachs
and JPMorgan to slash third-quarter GDP growth estimates to as low as a 3.5%
annualized rate from as high as a 8.25% pace. The economy grew at a 6.6%
pace in the second quarter.

 

Government payrolls fell by 8,000 in August as state government education
lost 21,000 jobs. August is the start of the back-to-school season, but the
Bureau of Labor Statistics, which compiles the employment report cautioned
that "pandemic-related staffing fluctuations in public and private education
have distorted the normal seasonal hiring and layoff patterns."

 

Stocks on Wall Street were mixed. The dollar slipped against a basket of
currencies. U.S. Treasury prices fell.

 

SILVER LININGS

 

 

Details of the smaller household survey from which the unemployment rate is
derived were fairly upbeat.

 

Household employment increased by 509,000 jobs, enough to push the
unemployment rate to 5.2%, the lowest since March 2020 from 5.4% in July.
The jobless rates, however, continued to be understated by people
misclassifying themselves as being "employed but absent from work." Without
this problem, the jobless rate would have been 5.5%.

 

Even so, a broader measure of unemployment, which includes people who want
to work but have given up searching and those working part-time because they
cannot find full-time employment, dropped to a 17-month low of 8.8% from
9.2% in July.

 

Though the participation rate was steady at 61.7%, about 190,000 people
entered the labor force last month. Even more encouraging, the number of
permanent job losers declined 443,000 to 2.5 million. The number of
long-term unemployed dropped to 3.2 million from 3.4 million in the prior
month.

 

They accounted for 37.4% of the 8.4 million officially unemployed people,
down from 39.3% in July. The duration of unemployment fell to 14.7 weeks
from 15.2 weeks in July.

 

Labor market participation rate

Economists did not believe the pullback in hiring was enough for the Federal
Reserve to back away from its "this year" signal for the announcement of the
scaling back of its massive monthly bond buying program, given strong wage
growth.

 

"For the Fed a taper announcement is still likely coming in either November
or December," said Michael Feroli, chief U.S. economist at JPMorgan in New
York.

 

The 0.6% jump in average hourly earnings after a 0.4% rise in July boosted
annual wage growth to 4.3% in August from 4.0% in the prior month. The
increase, led by lower-paying industries, is the result of worker shortages
caused by the pandemic. There were a record 10.1 million job openings at the
end of June.

 

Wage growth

There is cautious optimism that the labor pool will increase because of
schools reopening and government-funded benefits expiring on Monday. But the
Delta variant could delay the return to the labor force by some of the
unemployed in the near term.

 

About 41,000 women, 20 years and older, dropped out the labor force. The
number of number of people saying they were unable to work because of the
pandemic increased 497,000 in August, the first rise since December. There
was also a slight rise in the number of people working from home.

 

The Thomson Reuters Trust Principles.

 

 

Saudi non-oil sector expansion loses momentum in August - PMI

(Reuters) - Saudi Arabia's non-oil private sector continued to grow in
August but lost momentum due to a sharp drop in output expansion, a business
survey showed, signalling a challenging recovery from the COVID-19 pandemic.

 

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers' Index
(PMI) dropped to 54.1 in August from 55.8 in July, remaining above the 50
mark that separates growth from contraction.

 

The output sub-index stood at 55.4 against 59.7 in July, its weakest reading
since October last year.

 

"The non-oil economy went slightly off the boil in August, as output growth
slipped to the weakest level for ten months amid a slowdown in new business
gains," said David Owen, economist at IHS Markit.

 

 

"Whilst domestic orders remained strong and firms saw an upturn in tourist
numbers, many businesses continued to find market conditions challenging
amid the pandemic," he said.

 

The world's largest crude exporter was hit hard last year by the twin shock
of the coronavirus and record-low oil prices, but the economy has recovered
this year amid improved demand due to the easing of coronavirus-related
restrictions.

 

New business continued to expand in August but at a slower pace, partly
because of a softer increase in export sales as rising COVID-19 cases in
other parts of the world weighed on the recovery in foreign demand, the
survey said.

 

The rate of job creation was unchanged from July and remained marginal as
businesses found levels of staffing sufficient to complete existing work.

 

 

"Job creation disappointed again in August, due to a further fall in backlog
volumes and a subdued outlook for future activity", said Owen.

 

"Whilst firms expect an improvement in domestic business conditions in the
coming months, the unpredictability of the pandemic meant that downside
risks remained high."

 

The Thomson Reuters Trust Principles.

 

 

 


 


 


 

 

 

 


 

INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

Dairibord

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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

 


 

 


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<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
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