Major International Business Headlines Brief::: 18 September 2021
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Major International Business Headlines Brief::: 18 September 2021
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ü Travel rule changes 'positive', say airlines
ü Broadcasting cash offsets Man Utd's Covid losses
ü Next deal keeps Gap brand alive in the UK
ü Shop sales fall for fourth month as more dine out
ü Carbon dioxide 'threatens food security' says meat industry
ü Evergrande says six execs redeemed investment products in advance
ü Amid COVID surge, states that cut benefits still see no hiring boost
ü U.S. senator concerned American, JetBlue partnership will raise prices
ü U.S. probes possible insider trading at Binance - Bloomberg News
ü U.S. banking lobby groups oppose proposed tax reporting law
ü Barra: GM will make 'substantial shifts' in supply chain over chips
ü Airbus reaches deal to restructure AirAsia jet order -sources
ü China applies to join Pacific trade pact to boost economic clout
ü Bad for business: World Bank China rigging scandal rattles investors
ü Walgreens Boots heaps bonuses, rewards for pharmacists amid labor shortage
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Travel rule changes 'positive', say airlines
The relaxation of travel restrictions in England will give airlines a "shot in the arm", an industry group has said.
Airlines UK welcomed the government simplifying the traffic light system and reducing testing requirements.
It said it "moves us much closer to the reopening of UK aviation".
Transport Secretary Grant Shapps said the changes would enable more people to travel around the world.
>From 4 October the amber and green lists will be scrapped in England, leaving a single red list that has been downsized.
People who have had both jabs will not need to take a pre-departure test before leaving any country not on the red list. They will also be able to replace the day two PCR test with a cheaper, rapid lateral flow test.
UK travel update: Amber list scrapped in overhaul of travel rules in England
Tim Alderslade, chief executive of Airlines UK, said: "This is a positive step which moves us much closer to the reopening of UK aviation and provides greater reassurance to passengers desperate to travel.
"By reducing the number of red list destinations and scrapping PCR testing, ministers have paved the way for people to get away this October half-term and into the winter following 18 months of uncertainty.
"It will provide a real shot in the arm for a sector that until now has not been allowed to trade properly."
Thomas Cook said it expected the coming weekend to be its best for sales in 2021, adding that customers "are booking in droves".
"Based on our bookings already today, I would expect this weekend to be the biggest of the year so far as people take advantage of the great deals on offer, the new easier rules on testing and the simplified system for international travel," said David Child, head of PR and brand at the travel firm.
'Illogical system'
The travel and tourism sectors have been among the hardest hit by the Covid pandemic.
Globally they have lost 62 million jobs, the World Travel and Tourism Council says.
"We are pleased to see the back of an illogical traffic light system that caused confusion and distress for travellers," said Julia Simpson, its president and chief executive.
"While this is certainly a step in the right direction, for the UK to be real leaders, the government should adopt a system based on the risk of individuals, not countries."
The changes "remove some of the layers of complexity and expense UK holidaymakers have faced this summer", said Andrew Flintham, managing director of Tui UK.
'Simpler system'
He said Tui had already seen an increase in bookings for Turkey and destinations "for those looking to enjoy some winter sun" in October.
However, the red list should be reduced further, he said.
Virgin Atlantic said: "We urge the UK Government to use the Prime Minister's upcoming visit to the USA to work with the Biden administration to remove transatlantic restrictions for UK citizens, just as the UK has done for US travellers."
Grant Shapps said: "Today's changes mean a simpler, more straightforward system.
"Public health has always been at the heart of our international travel policy and with more than eight in ten adults fully vaccinated in the UK, we are now able to introduce a proportionate updated structure that reflects the new landscape."-BBC
Broadcasting cash offsets Man Utd's Covid losses
Manchester United has revealed that broadcasting revenues helped to soften the financial hit from the pandemic.
In the 12 months to 30 June, the club made £254.8m from broadcasters, 81.7% up on the previous year's £140.2m.
However, with games being played without fans due to Covid, matchday revenues fell from £89.8m to £7.1m.
Ed Woodward said he was "more confident than ever" that the club was "on the right track" having signed the likes of Cristiano Ronaldo over the summer.
Club legend Ronaldo returned to United after first departing in 2009. Man Utd will pay the striker's previous club Juventus an initial €15m (£12.8m) for his services, as part of a deal which could rise to €23m over five years.
Mr Woodward, executive vice chairman, said the Ronaldo deal, along with the signings of Raphael Varane, Jadon Sancho and Tom Heaton, were "made possible by the strength of our operating model, with sustained investment in the team underpinned by robust commercial revenues".
"While the financial impact from the pandemic is visible, our continued underlying strength is also clear to see and everyone associated with the club can be proud of the resilience we have shown through these most testing of times," he said.
"These signings have demonstrated our continued ability to attract some of the world's best footballers to Old Trafford, and our firm commitment to helping Ole deliver success on the pitch."
In April, thousands of United supporters gathered outside Old Trafford to protest against the club's owners for their involvement in the short-lived European Super League (ESL).
Protestors called for the Glazer family to leave the club, after United became one of the 12 founding members of the competition.
Co-chairman Joel Glazer apologised and admitted the distant nature of the club's American ownership "was not right" when he spoke with 11 representatives on a virtual fans forum - the first time any representative of the family had engaged with supporters since the bought the club in 2005.
Are Glazers making amends with Red Devils fans?
Manchester United fans protest against Glazer family
The club's total revenues for the year to June dropped from £509m to £494.1m.
United reported a net loss of £92.2m for the period - up from £23.2m in 2020 - which was largely down to the accounting impact of a £66.6m tax charge.
Last year, United said it suffered a £70m drop in expected revenue, from £627.1m to £509m, as a direct result of the pandemic.
Mr Woodward, will step down from his role at the end of 2021, said while Man Utd was "confident", it remained clear that "football as a whole faces major financial challenges caused by years of material inflation in wages and transfer fees, exacerbated by the impact of the pandemic".
"We are committed to working within the Premier League, the ECA and UEFA to promote greater financial sustainability at all levels of the game," he said.
"Global demand for live football is as strong as ever, as evidenced by the robust level of recent domestic and international broadcasting rights deals and record engagement with our own club content.
"But no club can succeed on its own. We want to be part of healthy, vibrant domestic and European football pyramids, working together with our governing bodies and, most importantly, the fans, to preserve and enhance the magic of our game."-BBC
Next deal keeps Gap brand alive in the UK
UK retailer Next and struggling US fashion giant Gap have formed a joint venture that will see Next manage Gap's UK website and place concessions in some stores.
The move will preserve some of Gap's physical presence on the High Street after Gap announced in July it would close all of its UK stores.
It is a similar deal to one signed with clothing brand Reiss earlier this year.
Next is also expanding the brands available on its online platform.
Its "Total" platform allows it to run other fashion brands' e-commerce operations, including customer service, payment systems and logistics, and currently also hosts the Victoria's Secret and Childsplay Clothing brands.
The platform allows fashion brands retain creative control of their websites and they keep their existing URLs, such as Gap.co.uk. But all back-end operations are run by Next's distribution centres and call centres.
Next will own 51% of the new venture, while Gap will own 49%. The deal will enable customers to use Next's click-and-collect service at its 500 stores.
Gap Global's chief executive Mark Breitbard said: "Gap is partnering with Next, one of the UK's leading online clothing retailers, to amplify our omnichannel business and meet our customers in UK & Ireland where they are shopping now."
According to Natalie Berg, a retail analyst and founder of NBK Retail, the deal is Gap's "best shot" at reviving its brand.
"The Gap brand might have lost its way but it's still a brand with a lot of heritage," she told the BBC. "The uncomfortable truth is that they had way too many stores.
"What Next is doing featuring it, as a shop within a shop, does generate excitement and make consumers want to go into the store."
She says it is ironic to see Next and Gap teaming up, when they are both middle-tier High Street brands who have competed for years over the same demographics of shoppers.
"The pandemic has created strange bed fellows - who would have thought Next and Gap would have come together a few years ago?"
Gap's woes
Gap has been credited with shifting cultural norms around clothes, making it socially acceptable for people of all ages to wear more laidback clothes such as hoodies, sweatshirts, T-shirts, khaki trousers, jeans and polo shirts.
Founded in the US in 1969, its expanded rapidly during its heyday period up until the late 1990s.
It opened its first store in London in 1987, and by 2013 had amassed 123 stores in the UK.
However, in recent years it struggled as shoppers moved online, and consumers were put off by the never-ending sales. Its stores and clothes were also criticised for failing to keep up with changing trends.-BBC
Shop sales fall for fourth month as more dine out
Retail sales in the UK fell for the fourth month in a row in August, but people spent more time eating and drinking in bars and restaurants.
Sales fell by 0.9% in August, the Office for National Statistics (ONS) said, following a 2.8% fall in July.
Food store sales fell by 1.2%, but the ONS said this was linked to the removal of restrictions on hospitality leading to more people eating out.
Analysts said labour shortages and supply chain disruption had hurt sales.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said shoppers and shops were "stymied by shortages in August", but added people "rediscovered our passion for a big night out".
"Keeping the shelves full was a real battle, especially for department stores, which is one reason why we spent less in these stores in August," she said.
"Supermarkets had a fight on their hands to keep supply chains flowing, but the might of these retailers meant they were able to track down alternative suppliers so we could keep filling our trolleys."
Chart showing retail sales
The share of online sales increased to 27.7% in August from 27.1% in July, the ONS said, substantially higher than the 19.7% share seen in February 2020 before the pandemic.
Jonathan Athow, ONS deputy national statistician for economic statistics, said the fall in August's sales was "not nearly as much as in July" and, overall, remained above pre-pandemic levels.
"Other data suggest that the drop in food stores' sales is linked to an increase in eating out following the lifting of coronavirus restrictions," he said.
The ONS said a survey analysing retail supply chains found 6.5% of all retail businesses said they were not able to get the materials, goods or services needed from within the UK in the last two weeks.
Department stores reporting being the most affected by disruption (18.2%), followed by clothing stores (11.1%).
Supply chains have been squeezed by the shortage of lorry drivers, leading to many businesses facing delays in product deliveries.
The lack of lorry drivers has been a long-term problem, however, the coronavirus pandemic, Brexit and tax changes have exacerbated the issue further in recent months.
Earlier this week, Ocado became the latest supermarket to announce it was offering perks to lorry drivers, after it said higher wages and sign-on bonuses would cost the online supermarket up to £5m.
Lynda Petherick, head of retail at Accenture UKI, said labour shortages and supply chain disruption had weighed heavily on the sector, which was "characterised by images of bare shop shelves and delayed deliveries".
"Retailers will already be concerned as we head into the Golden Quarter as the horse may have bolted for businesses who haven't already acted to sure-up their supply chains," she added.
"Order fulfilment and securing stock will be challenging, while many brands could find themselves short-staffed over this busy time. Without meticulous planning, consumers may be forced to get creative this Christmas if retailers can't meet their needs."
Martin Beck, senior economic adviser at EY said the fall in sales was a surprise, "given that both footfall and debit and credit card spending had improved" in August.
"That sales have continued to fall is likely to reflect the continued normalisation of spending patterns, with retail demand negatively affected in the face of greater opportunities for social consumption," he said.-BBC
Carbon dioxide 'threatens food security' says meat industry
Meat processors are in talks with the government over a shortage of carbon dioxide that could hit meat production.
Poultry producers said the shortage "threatens national food security".
The gas is used to stun pigs and chickens prior to slaughtering, and also in the packaging process.
The carbon dioxide used by the meat industry is a by-product of fertiliser production, but fertiliser factories have been halting production due to soaring natural gas prices.
The government said it was monitoring the situation "closely".
It has been holding emergency talks with industry groups and meat processors, as first reported by the Financial Times.
Fertiliser producers have been struggling with natural gas prices that are at record highs as economies around the world begin to recover from the Covid crisis.
In the UK, lower winds have meant less renewable energy is generated, there have been outages at some nuclear stations, and there have been lower flows into the UK of natural gas from Norway, pushing up the price of natural gas.
This week, two large UK fertiliser factories owned by US firm CF Industries Holdings suspended operations due to soaring gas prices, and on Friday Norwegian firm Yara said it would also cut production at a number of its European plants.
Nick Allen, the chief executive of the British Meat Processors Association (BMPA), attended emergency talks with the Department of the Environment, Food and Rural Affairs (Defra) on Friday to discuss the issue.
"This crisis highlights the fact that the British food supply chain is at the mercy of a small number of major fertiliser producers - four or five companies - spread across northern Europe. We rely on a by-product from their production process to keep Britain's food chain moving," Mr Allen said.
About 20 million birds per week are slaughtered, but abattoirs only hold a limited stock of carbon dioxide, British Poultry Council chief executive Richard Griffiths said.
"With fewer than 100 days to go until Christmas, and already facing mounting labour shortages, the last thing British poultry production needs is more pressure.
"If CO2 supplies become tighter and more unpredictable then supply chains will have to slow down. Ultimately, no CO2 means no throughput."
He said the industry group's members "are on a knife-edge situation at the moment".
Meat processors are working with government to "mitigate any major impact on a sustainable supply of food", he added.
"This is incredibly serious," one supermarket executive told the BBC. "Some suppliers are telling us they could run out of CO2 in less than two weeks."
Industry groups and processors also had a meeting with the government on Thursday.
Meat processors have already been struggling with a shortage of lorry drivers and recruitment problems at abattoirs exacerbated by EU nationals leaving the UK after Brexit.
Gas uses
Carbon dioxide is used when slaughtering pigs and chickens to stun them, and it is used during the packaging process for all meat to prolong shelf life.
It is widely used throughout the food industry, including in brewing.
However, the closure of the two CF Industries plants has cut 60% of the UK's food-grade carbon dioxide supply, the BMPA spokesperson said.
It unclear how much carbon dioxide abattoirs and other food factories have stored.
The remaining UK carbon dioxide production is being prioritised for the NHS for medical uses, and for the nuclear industry, which uses it as a coolant.
Without carbon dioxide, the slaughtering process of pigs and chickens cannot go ahead, the spokesperson said.
The Cucumber Growers Association also warned of the effect of high natural gas prices on crops.
Gas is used to heat greenhouses and provide carbon dioxide "which are both critical factors in growing and achieving the yields required to survive in the modern industry", it said in an open letter.
The "extreme rise" in wholesale gas prices has piled costs on growers, it added.
A government spokesperson said: "We are monitoring this situation closely and are in regular contact with the food and farming organisations and industry, to help them manage the current situation."-BBC
Evergrande says six execs redeemed investment products in advance
(Reuters) - Six executives of China's heavily indebted Evergrande (3333.HK) had redeemed some of the company's investment products in advance earlier this year, the property group said on Saturday.
Between May 1 and Sept. 7, the six executives made early redemptions of 12 investment products, Evergrande said in a statement on its website, without identifying the executives or giving details on the nature of the products.
"Regarding the early redemption of Evergrande wealth investment products by some managers, the group company views the matter seriously," the company said.
Evergrande said it had requested that all the funds redeemed by the six managers in advance be returned within a certain time frame.
Severe penalties would also be imposed, it said.
Evergrande, with over $300 billion in liabilities, is in the throes of a liquidity crisis that has left it racing to raise funds to pay its many lenders and suppliers.
The company has epitomised China's freewheeling era of borrowing and building. Uncertainty about its ability to meet funding obligations - equal to 2% of China's gross domestic product - has sent jitters through markets. read more
The group has been hit by recent ratings downgrades, with both S&P Global Ratings and Fitch Ratings warning of the risk of default. read more
The Thomson Reuters Trust Principles.
Amid COVID surge, states that cut benefits still see no hiring boost
(Reuters) - The August slowdown in U.S. job creation hit harder in states that pulled the plug early on enhanced federal unemployment benefits, places where an intense summertime surge of coronavirus cases may have held back the hoped-for job growth.
New state-level data released Friday by the Bureau of Labor Statistics showed the group of mostly Republican led states that dropped a $300 weekly unemployment benefit over the summer added jobs in August at less than half the pace of states that retained the benefits.
Elected leaders in those states argued the payments, in place since spring of 2020 to help families through the pandemic, were discouraging people from work and holding back an economic recovery that seemed to be gathering steam earlier this year when the impact of vaccines was taking hold and coronavirus cases were falling.
But some of those same states, notably Florida and Texas, are also hotbeds of opposition to government health mandates like mask wearing, and the surge of infections there in July and August appeared to dent hiring across the sorts of "close contact" businesses that have suffered most during the health crisis and had begun to recover quickly.
Overall employment in the leisure and hospitality fell about 0.5% in the 26 states that ended benefits, and rose 1% elsewhere.
In Florida, where the weekly average of new cases per 100,000 residents jumped from less than 50 in June to more than 700 in August, employment in the sector declined by 4,000 after rising steadily this year.
In Texas, where new infections per 100,000 hit a low of fewer than 30 in June only to surge above 400 through August, the sector dropped 25,000 jobs after six months of steady growth. Georgia, which also saw a dramatic rise in infections, lost nearly 7,000 jobs in the sector.
By contrast California and New York, where the outbreaks driven by the coronavirus Delta variant have been more muted and health controls have tended to be more strict, added around 33,000 and 7,000 jobs in the sector respectively.
The data feed into a debate about how the end of pandemic unemployment benefits will impact the economy - whether it will motivate people to take jobs or leave them strapped for cash amid a new viral wave and difficulties with issues like finding child care.
The benefits ended nationally in early September, and some economists have noted that the hand off from those public payments to private income may not come fast enough to avoid a hit to the overall economy.
While the Delta variant wave of infections may be peaking, the economy's weak August job growth of just 235,000 was viewed by many analysts as evidence of the risks the pandemic still poses to the recovery.
Economists analyzing the unemployment issue have seen little evidence yet that cutting off the benefits has provided a clear boost to local labor markets, in part because of difficulties separating the influence of the payments from larger shifts in the labor force, or of the potentially offsetting damage done by the pandemic.
Goldman Sachs analysts, looking at individual level data, have found that the end of the payments did increase the probability of someone moving from unemployment to a job, and expect the national expiration of the extra unemployment insurance to lead to the addition of an extra 1.3 million jobs by the end of the year.
"The behavioral response to UI-benefit expiration remains highly uncertain due to the unprecedented size of the benefit swings and the highly unusual economic and health situation," Goldman economist Joseph Briggs wrote on Friday.
The Thomson Reuters Trust Principles.
U.S. senator concerned American, JetBlue partnership will raise prices
(Reuters) - U.S. Senator Richard Blumenthal, a Democrat who has been outspoken on antitrust issues, expressed concern to the Transportation Department on Friday that a partnership between American Airlines (AAL.O) and JetBlue Airways (JBLU.O) would lead to higher airfares.
The airlines' "Northeast Alliance" partnership was announced in July 2020 and approved by the Transportation Department six months later, shortly before the end of the Trump administration.
The codeshare agreement allows American and JetBlue to sell each other's flights in their New York-area and Boston networks and link frequent flyer programs, in a move aimed at giving them more muscle to compete with United Airlines (UAL.O) and Delta Air Lines (DAL.N) in the U.S. Northeast.
"I write with grave concerns that the recent joint partnership between American Airlines and JetBlue Airways will lead to anticompetitive coordination at key air traffic hubs and result in the long-term inflation of airfares and related costs for airline passengers," Blumenthal said in a letter to U.S. Transportation Secretary Pete Buttigieg.
Blumenthal urged a "full public interest review and investigation of the Northeast Alliance cooperative agreement," noting that President Joe Biden had signed an executive order on competition in July. Blumenthal cited the White House as saying that the top four airlines had nearly two-thirds of the U.S. domestic market.
"I am concerned that the Northeast Alliance is exactly the kind of arrangement that has led us to this point and that will lead to even further consolidation in an already overly concentrated industry. Under the circumstances, this arrangement deserves more scrutiny," he wrote.
In a statement, JetBlue said the partnership allowed the two airlines to give Delta and United real competition.
JetBlue said its access to American's slots would mean that it could "bring the JetBlue effect of lowering fares and stimulating demand to more routes in and out of the Northeast."
The Transportation Department on Thursday said it planned to award 16 take-off and landing slots at Newark Liberty International Airport to a yet-to-be-determined low-cost carrier, and said it could take action to boost competition at other major airports.
The Thomson Reuters Trust Principles.
U.S. probes possible insider trading at Binance - Bloomberg News
(Reuters) - U.S. officials are examining possible insider trading and market manipulation at Binance, Bloomberg News reported on Friday, potentially adding more heat to the cryptocurrency exchange that has become a target of regulatory scrutiny in many countries.
Authorities are looking into whether Binance or its staff profited by taking advantage of its customers, Bloomberg reported, citing people with knowledge of the matter.
"At Binance, we have a zero-tolerance policy for insider trading and a strict ethical code related to any type of behavior that could have a negative impact on our customers or industry," the world's biggest crypto platform said in a statement.
The company has faced warnings and business curbs from financial watchdogs from Britain and Germany to Japan, who are concerned over the use of crypto in money laundering and risks to consumers. read more
The exchange, whose holding company is registered in the Cayman Islands, has scaled back its product offerings and said it wants to improve relations with regulators.
The review involves Commodity Futures Trading Commission (CFTC) investigators, who in recent weeks have been reaching out to potential witnesses, the Bloomberg report said, adding that Binance has not been accused of wrongdoing and the investigations may not lead to any official action.
The CFTC did not immediately respond to a request for comment.
The Thomson Reuters Trust Principles.
U.S. banking lobby groups oppose proposed tax reporting law
(Reuters) - The largest U.S. banking lobby groups banded together on Friday to make another push to kill a proposed bank account reporting law being drawn up as part of the congressional reconciliation package.
In a letter to U.S. House of Representatives Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy, the lobby groups said the proposal would create "reputational challenges" for large financial services firms, increase the cost of tax preparations for Americans and small businesses, and create serious "financial privacy concerns".
"We urge members to oppose any efforts to advance this ill-advised new reporting regime," the groups said in the letter.
"While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population."
The proposed domestic account reporting requirement in the $3.5 trillion House package is becoming an important issue for the banking industry, which is opposed to the tax reporting changes that are being pushed forward by the Democrats.
The new proposal will require financial services companies to track and submit inflows and outflows from every bank account above a minimum threshold of $600 during a year to the Internal Revenue Service (IRS), including breakdowns for cash.
The proposal also opens up significant privacy concerns, which the lobbyists said would discourage taxpayers from participating in the financial services system and undermine efforts to include vulnerable populations and unbanked households.
The Thomson Reuters Trust Principles.
Barra: GM will make 'substantial shifts' in supply chain over chips
(Reuters) - General Motors Co (GM.N) Chief Executive Mary Barra said Friday the largest U.S. automaker plans to make changes in its supply chain as it works to address the continuing semiconductor chip crisis that has forced significant production cuts.
"We're going to make some pretty substantial shifts in our supply chain," Barra said in an online interview. "We're already working much deeper into the tiered supply base because generally General Motors doesn't buy chips (directly) but (our suppliers do). But now we're building direct relationships with the manufacturers."
A GM spokesman declined to comment further on how the company might shift its supply chain.
Next week, the White House and the U.S. Commerce Department plan a meeting on the chip crisis, which has caused production cuts by automakers around the world.
On Thursday, GM said it was cutting production at six North American assembly plants due to the shortage. read more
Earlier this month, the company was forced to temporarily halt production at most North American assembly plants because of the shortage.
Chrysler parent Stellantis NV (STLA.MI) said this week it was cutting additional production at three plants in the United States and Canada because of the shortage.
Barra said Friday the issue is a "solvable problem, but it's going to be here a little longer."
The GM CEO, interviewed by Delta Air Lines chief Ed Bastian as part of a series of discussions with fellow CEOs, said some newer GM vehicles have up to 30% more chips than other vehicles.
"As customer needs are shifting, we need more and more semiconductors," Barra said, saying GM was looking for short-, medium- and long-term solutions to the shortage.
Last week, GM Chief Financial Officer Paul Jacobson reaffirmed the automaker's 2021 profit outlook and said the company expects a "more stable year" in 2022 for semiconductor supplies. read more
Jacobson cautioned GM's third-quarter wholesale deliveries could be down by 200,000 vehicles because of chip shortages and because GM shifted production into the second quarter as it managed semiconductor supplies.
The Thomson Reuters Trust Principles.
Airbus reaches deal to restructure AirAsia jet order -sources
(Reuters) - Airbus (AIR.PA) has agreed to cut prices or reschedule delivery for hundreds of jets ordered by Malaysia's AirAsia (AIRA.KL) to salvage a contract worth tens of billions of dollars with its largest Asian customer, industry sources said on Friday.
The restructuring deal resets relations between two of the industry's closest partners, torn apart by the financial impact of the coronavirus crisis, and lifts uncertainty over the fate of up to 400 A320-family single-aisle jets yet to be delivered.
Airbus declined comment, while AirAsia did not immediately reply to a request for comment.
The AirAsia deal does not involve cancelling jets on order but includes a new delivery schedule and price cuts or other improvements in terms, the sources said.
AirAsia said last year it would stop taking deliveries of all Airbus jets and review remaining orders.
Industry sources said it had also stopped sending progress payments to Airbus, prompting the planemaker to suspend plans to produce jets on order pending the new restructuring deal.
The deal comes as other airlines in Asia that have ordered hundreds of jets to secure their growth are in the midst of restructuring or are expected to press for relief.
Other suppliers are also expected to come under pressure to negotiate new conditions, one of the sources said.
The Thomson Reuters Trust Principles.
China applies to join Pacific trade pact to boost economic clout
(Reuters) - Japan said it would have to determine if China meets the "extremely high standards" of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after the world's second-biggest economy formally applied to join.
Commerce Minister Wang Wentao submitted China's application to join the free trade agreement in a letter to New Zealand's trade minister, Damien O'Connor, the Chinese ministry said in a statement late on Thursday.
The CPTPP was signed by 11 countries including Australia, Canada, Chile, Japan and New Zealand in 2018.
Before that, it was known as the Trans-Pacific Partnership and seen as an important economic counterweight to China's regional influence.
Japan, the CPTPP's chair this year, said it would consult with member countries to respond to China's request, but stopped short of signalling a timeline for doing so.
"Japan believes that it's necessary to determine whether China, which submitted a request to join the TPP-11, is ready to meet its extremely high standards," Japanese Economy Minister Yasutoshi Nishimura told reporters on Friday.
The TPP was central to former U.S. President Barack Obama's strategic pivot to Asia but his successor, Donald Trump, withdrew the United States from the pact in 2017.
Asked to comment on China's bid, a spokesperson for the U.S. State Department said it deferred to CPTPP, given that the United States was not a member, but added: "That said, we would expect that China’s non-market trade practices and China’s use of economic coercion against other countries would factor into CPTPP parties’ evaluation of China as a potential candidate for accession."
CPTPP accession would be a major boost for China following the signing of the 15-nation Regional Comprehensive Economic Partnership free trade agreement last year.
Beijing has lobbied for its inclusion in the pact, including by highlighting that the Chinese and Australian economies have enormous potential for cooperation. However, relations between the two countries have soured.
In a new alliance dubbed AUKUS announced this week, the United States and Britain said they would provide Australia with the technology to deploy nuclear-powered submarines, a move seen as aimed at countering China's influence in the Pacific. read more
Zhao Lijian, China's foreign ministry spokesman, said on Friday that the application to join CPTPP was "completely unrelated" to AUKUS.
China was pushing for regional integration while AUKUS countries were "promoting war and destruction," he said at a briefing in Beijing.
Taiwan, which has also been angling to join the trade pact, expressed concern about China's decision to apply.
China claims Taiwan as its own territory and would not be pleased if Taipei was allowed to join the grouping before Beijing.
Japan's deputy finance minister suggested in a tweet on Friday that China's subsidies of state-owned firms and arbitrary application of the law were likely to make it hard for the country to join the trade pact.
"China ... is far removed from the free, fair and highly transparent world of TPP, chances that it can join are close to zero," State Minister of Finance Kenji Nakanishi said in a tweet. "This can be thought of as a move to prevent Taiwan from joining."
Britain in June began negotiations to enter the trade pact, while Thailand has also signalled interest in joining it. read more
Wang and O'Connor held a telephone conference to discuss the next steps following China's application, the Chinese Ministry of Commerce said.
The Thomson Reuters Trust Principles.
Bad for business: World Bank China rigging scandal rattles investors
(Reuters) - Some investors and campaigners expressed dismay on Friday at revelations that World Bank leaders pressured staff to boost China's score in an influential report that ranks countries on how easy it is to do business there.
They also said the World Bank's subsequent discontinuation of the "Doing Business" series of annual reports could make it harder for investors to assess where to put their money.
"The more I think about this, the worse it looks," said Tim Ash at BlueBay Asset Management, adding that the reports published since 2003 had become important for banks and businesses around the world.
"Any quantitative model of country risk has built this into ratings. Money and investments are allocated on the back of this series."
An investigation by law firm WilmerHale, at the request of the World Bank's ethics committee, found that World Bank chiefs including Kristalina Georgieva - now head of the International Monetary Fund - had applied "undue pressure" to boost China's scores in the "Doing Business 2018" report. read more
At the time, the Washington-based multilateral lender was seeking China's support for a big capital increase.
Georgieva said she disagreed "fundamentally with the findings and interpretations" of the report, which was released on Thursday, and had briefed the IMF's executive board.
Advocacy group Tax Justice Network welcomed the investigation by the ethics committee.
"The bigger question is how, if it is even possible, the Bank can eliminate the apparent corruption of the institution," the British-based group's CEO Alex Cobham said on Twitter.
KREMLIN: RATINGS JUST A YARDSTICK
Economists said such reports - by the World Bank and others - were useful but had long been vulnerable to manipulation.
They said some governments, especially in emerging market countries who want to demonstrate progress and attract investment, could become obsessed with their position in the reports, which assess everything from ease of paying taxes to legal rights.
The United Arab Emirates, 16th in the latest 2020 report, had targeted topping the ranking in 2021, while Russia surged up the rankings to 28th in 2020 from a dismal 120th in 2011. President Vladimir Putin set a challenge for the country to break into the top 20 by the end of the last decade.
When asked to comment on the World Bank ditching the ratings, Kremlin spokesperson Dmitry Peskov said on Friday: "The task of improving the business climate is not linked to the existence of any ratings. Ratings are just a yardstick."
Past research by the World Bank nonetheless suggested that foreign direct investment flows were higher for economies performing better in its reports.
'DIVERGENCE WITH CORRUPTION SCORES'
But Charles Robertson, chief economist at Renaissance Capital, said ease of doing business scores had been losing credibility for years. Some countries employ investment firms, including his own, and even former government leaders to advise them on how to improve their rankings.
"There have been wide divergences between some countries corruption ranking(s) and the ease of doing business scores, which implies that these were only face-value improvements rather than reflecting underlying economic change," he said.
"As an economist, though, it would a real shame if we lose access to the underlying data. It is really interesting, for example, to know that it takes a company in Brazil 900 hours to process taxes, whereas for somewhere else it take only 70," Robertson added.
Emerging markets-focused investment manager Ashmore Group engaged a third-party data provider that used the Doing Business findings as one of their sources, but ultimately relied upon its own research for investment decisions, said Gustavo Medeiros, Ashmore's deputy head of research at the investment firm.
"When companies are looking to do foreign direct investment, the report is a useful roadmap to understand where the potential problems may be and then they can go and do the due diligence," he added.
The Thomson Reuters Trust Principles.
Walgreens Boots heaps bonuses, rewards for pharmacists amid labor shortage
(Reuters) - Walgreens Boots Alliance Inc (WBA.O) will give a one-time bonus of $1,250 to its full-time pharmacists and a $1,000 payment to part-time pharmacists, the drugstore chain said on Friday, as major retailers try to retain people amid intense labor shortage.
The company said certified or to-be certified pharmacy technicians who are responsible for administering flu and COVID-19 vaccines will be given $1,000 reward throughout a six-month retention period.
The COVID-19 pandemic has led to a nationwide labor shortage, resulting in companies raising wages and providing incentives to employees ahead of the upcoming holiday season.
Walgreens, CVS and other drug retailers that plan to offer booster COVID-19 vaccines are also likely to see more traffic between November and January, increasing the need to retain workers to meet this demand. read more
Last month, the company said it would raise the minimum wage of its staff to $15 an hour from October. U.S. retailers and restaurant companies, including Walmart (WMT.N) and Chipotle Mexican Grill (CMG.N), have also raised hourly wages for employees. read more
The company said it was also providing an incentive of $200 myWalgreens cash to any employee who gets fully vaccinated against COVID-19 by Nov. 30.
Walgreens said a majority of the staff have received their COVID-19 vaccinations and it was mandatory for support office team staff to be vaccinated or be enrolled in a regular testing program to comply with government regulation.
The Thomson Reuters Trust Principles.
INVESTORS DIARY 2021
Company
Event
Venue
Date & Time
Hippo
AGM
virtual
September 17 - (9am)
Star Africa
AGM
virtual
September 23 -11am
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
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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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