Major International Business Headlines Brief::: 09 February 2022

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Major International Business Headlines Brief::: 09 February 2022 

 


 

 


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

 


 

 


ü  Global chip shortage: Toyota profits fall as production hit

ü  Risk of further Brexit disruption to trade, say MPs

ü  Half-term travel: UK families avoid Spain over jab rules

ü  Starbucks fires organisers as union threat grows

ü  Record-high seizure of $5bn in stolen Bitcoin

ü  Peloton boss John Foley to step down as firm axes 2,800 jobs

ü  BP hits back at calls for windfall tax on bumper profits

ü  UK chip firm Arm sale by Softbank collapses amid competition fears

ü  Asian stocks join global rally, U.S. yields cling to highs

ü  Fed's Daly says U.S. inflation could get worse before it gets better

ü  Honda posts 17% fall in Q3 operating profit but raises full-year view

ü  SoftBank says additional Alibaba ADS registration not tied to future deal

ü  Explainer: Europe's banks fear payment system could be casualty of
Russia-Ukraine crisis

ü  Equinor posts record Q4, hikes dividend and share buybacks

ü  Akzo Nobel misses Q4 core profit forecast due to raw material costs

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 

Global chip shortage: Toyota profits fall as production hit

Japanese motor industry giant Toyota saw its profits fall by 21% for the
last three months of 2021 as the global chip shortage hit production.

 

The company said that its third quarter operating profit came in at 784.4bn
yen (£5bn; $6.8bn).

 

The world's best-selling carmaker also cut its annual production target by
500,000 vehicles to 8.5 million.

 

It comes as manufacturers around the world are struggling to find enough
microprocessors for their products.

 

"We sincerely apologise for the inconvenience caused to our customers due to
the series of production volume reductions since last summer. We are working
to restore full production as soon as possible," Toyota said in a statement.

 

In September, Toyota slashed its worldwide vehicle production by 40% because
of the chip shortage.

 

The company has also announced a number production suspensions in recent
months due to a lack of parts as the pandemic hits supply chains.

 

Rival carmakers including Volkswagen, General Motors, Ford, Nissan, Daimler,
BMW and Renault have also cut vehicle production in recent months.

 

"The chip shortage will still weigh on Toyota in 2022 but they'll likely
manage any challenges better than their peers," Tu Le, managing director of
Sino Auto Insights told the BBC.

 

"I think they actually see opportunity in crisis because of their confidence
in managing the shortages better than GM and VW. So relatively, I see Toyota
having a strong year relative to their competitors," he added.

 

Last month, Toyota cemented its position as the world's biggest car seller
as it widened its lead over nearest rival VW.

 

Separately, in January Toyota warned customers in Japan that they would have
to wait for up to four years to take delivery of its new Land Cruiser SUV.

 

The firm said the delay was not related to the global chip shortage or the
supply chain crisis.

 

However, it refused to comment on the reasons behind the long delivery time.

 

Launched in 1951, the Land Cruiser is Toyota's longest-selling vehicle, with
a total of 10.6 million sold as of August last year.

 

The pandemic saw a surge in demand for consumer electronics and medical
devices, which all contain computer chips.

 

That meant there weren't enough semiconductors left for carmakers.

 

When the global chip shortage first hit the motor industry early last year
Toyota was relatively well prepared compared to its rivals.

 

It had faced a similar issue in the wake of an earthquake and tsunami a
decade earlier.

 

Back then, chip-making factories were damaged, which meant major production
disruptions for Toyota and other carmakers.

 

Toyota reviewed its supply chain and started stockpiling. That meant it had
enough semiconductors to last for months.

 

But as the pandemic dragged on, those stocks are running low and the company
now expects to miss its global production target.

 

And analysts predict the chip shortage could last until next year.

 

There is some good news though. In recent months, there have been major
investments in plants specifically to manufacture chips for the motor
industry. Before the pandemic that hadn't been seen as a priority.

 

Chipmakers are now battling to win customers in the auto sector after the
semiconductor shortage highlighted the size of the market, especially as the
growing electric vehicle (EV) industry calls for even more advanced
technology.

 

When it comes to EVs, Toyota is trailing many of its rivals after having
long-focussed on hybrids.

 

While hybrids are still more popular in emerging markets, demand for EVs is
growing in the larger economies of the US, China and Europe.

 

So along with overcoming the chip shortage, Toyota also needs to catch up
with its rivals in the EV market if it wants to retain its title as the
world's best-selling car maker.-BBC

 

 

 

Risk of further Brexit disruption to trade, say MPs

There could be further disruption to trade with the EU this year if more is
not done to improve post-Brexit border arrangements, MPs have warned.

 

The cross-party Public Accounts Committee (PAC) said the main impact of
Brexit on UK firms had been "increased costs, paperwork and border delays".

 

But it said things could worsen this year as new import controls come in.

 

The government said it continued to ensure businesses "got the support they
need to trade effectively with Europe".

 

It comes as Jacob Rees-Mogg has been appointed minister for Brexit
opportunities as part of a cabinet reshuffle. The prominent Leave campaigner
will look at which EU rules may be scrapped now the UK has left the bloc.

 

In its report, the Public Accounts Committee (PAC) said it was concerned
about what will happen when passenger traffic across the UK border returns
to normal levels as the pandemic subsides.

 

And it described government plans to create the most effective border in the
world by 2025 as "optimistic, given where things stand today".

 

The report says trade volumes have been suppressed by the impact of
Covid-19, and wider global pressures in supply chains, since the UK left the
EU customs union and single market.

 

But it is clear, the report adds, that leaving the EU also had an impact by
increasing the bureaucratic burden on businesses.

 

"One of the great promises of Brexit was freeing British businesses to give
them the headroom to maximise their productivity and contribution to the
economy - even more desperately needed now on the long road to recovery from
the pandemic," said PAC chair Meg Hillier.

 

"Yet the only detectable impact so far is increased costs, paperwork and
border delays."

 

The report says there is potential for further disruption during the course
of this year as more people start travelling again, and passenger volumes at
key ports like Dover increase.

 

New border systems have yet to be tested with traffic back at what were
normal levels, before the pandemic struck.

 

There is also a significant risk of more delays later this year when the EU
introduces biometric passport controls under its new Entry and Exit System.

 

The Cabinet Office told the PAC that discussions are underway with French
officials about how this might work in practice at busy ports like Dover,
where - says the report - "it is important that checks that apply to HGV
drivers do not delay the throughput of lorries".

 

Checks on food

Another big test identified by the committee will be the phased introduction
of controls on imports into the UK, which began on 1 January.

 

Physical checks on the import of food products are due to begin in July, and
the British Port Authority told the PAC it needs greater clarity about the
precise arrangements, including the percentage of products which will be
checked.

 

The MPs also raised concern about the potential for smuggling before new
border infrastructure is completed close to Dover.

 

Lorries arriving at the port will have to travel 60 miles to Ebbsfleet, if
their consignments need to be physically checked by customs officers. That
increases the risk, the committee warns, that goods could be offloaded on
the way.

 

HM Revenue and Customs has said it will look at what surveillance might be
necessary to manage that risk.

 

'More transparency'

But there is a lot more the committee wants done. And it is calling for more
transparency from government about the problems businesses are facing.

 

Meg Hillier says the PAC has repeatedly reported on Brexit preparedness, and
there have been delays to promised deadlines at every stage.

 

"It's time the government was honest about the problems rather than
overpromising," she said.

 

In particular, the PAC wants the government to do more to help small firms
prepare for the extra burdens they are having to deal with, and to consider
further support.

 

It says only £6.7m of the £20m offered under the SME Brexit Support Fund was
paid out, because narrowly defined criteria meant many businesses missed out
on funding.

 

It also urges the government to write to the committee, within six months,
setting out the timetable for its planned programme of work on the
"noteworthy ambition" to create the world's most effective border by 2025.

 

A government spokeswoman said: "Traders have adapted well to the
introduction of full customs controls on 1 January, with minimal disruption
at the border and inbound freight flowing effectively through ports.

 

"We are continuing to ensure that businesses get the support they need to
trade effectively with Europe and seize new opportunities as we strike trade
deals with the world's fastest growing markets, including one-to-one advice
through the free-to-use Export Support Service."-BBC

 

 

 

Half-term travel: UK families avoid Spain over jab rules

Many UK families have cancelled half-term trips to mainland Spain and the
Canary Islands because children over 12 must be double vaccinated to enter.

 

Hoteliers in the islands say the restrictions have lost them millions of
pounds' worth of trade.

 

They have called on the Spanish government to relax its restrictions to
allow in more British travellers.

 

Europe's largest tour operator TUI says Mexico and Turkey are proving
popular alternatives.

 

>From Friday, people travelling to the UK will no longer need to take any
Covid tests if they are fully vaccinated. However, Britons going on holiday
overseas still need to follow the rules which apply at their destination.

 

How are travel rules being relaxed?

It is thought more than 80 holiday destinations around the world will still
require travellers from the UK to take a pre-departure PCR test before
entering.

 

Travel agents are having to keep up with a fast-changing international
patchwork of restrictions.

 

Hazel Bryant from Travel with Kitts, an independent agency in Hertfordshire,
said the Omicron variant meant a lot of people re-arranged Christmas trips
for half-term instead.

 

In February, the Canary Islands is popular with families seeking good
weather without too long a flight.

 

However, Hazel says that because the Canaries and mainland Spain require
British children over the age of 12 to be double-jabbed, half the families
she is dealing with have changed their plans.

 

"The reasons are, they're not double vaccinated or because they've had Covid
in the last six weeks - which means they haven't gone for their second jab.
Spain will not allow them in".

 

She said many affected families were switching destinations or postponing
break plans until Easter.

 

"It is paramount to plan early, because so many people have moved holidays a
year or even two years, so it will be busy and full."

 

Ben Fishlock booked a trip to Gran Canaria for February last year for
himself, his wife and three children.

 

Travel restrictions meant that trip had to be postponed to this February
half-term - that is now off too.

 

Mr Fishlock said: "The 12-year-old has only just turned 12 so doesn't have
his second vaccination yet. The fact he couldn't get vaccinated in time just
meant that we had to abort the mission.

 

"We only cancelled a few days ago. We thought we'd hold out until the first
of February in case anything changed but unfortunately we've had to pull the
plug."

 

He says his children were disappointed to learn the holiday would once again
not happen. He's hoping to try again later in the year, though.

 

Tourism businesses in the Canary Islands say they have lost a significant
number of bookings at what is usually a crucial time of year.

 

Jorge Marichal, president of the Tenerife Hoteliers Association, wants the
Spanish government to change its rules so that more British families can
come.

 

He said: "The loss could be nearly 400 million euros in the Canary Islands.
That's only talking about the hotels - if we take into account the
restaurant economy [too] it is a huge impact.

 

"For us the British market is the biggest one. We have more than 2.5 millon
British citizens coming to Tenerife every normal year. For us this part of
the year is one of the most important. All these profits will be lost."

 

Tour operator TUI said recent rule changes were "a huge leap forwards in
getting travel back to normal".

 

"We're already seeing a trend of 'test-free holidays' for customers who are
fully vaccinated, as people look to go abroad with ease and without the
added expense of testing."

 

The firm said bookings for February half-term and Easter holidays are
comparable to 2019, with Mexico, Dominican Republic, Cape Verde and the
Canaries the most popular destinations.

 

Spain is not the only country with strict entry requirements for UK
visitors, although travel agents say that country's policy on children is
proving particularly disruptive.

 

It is not only entry rules people need to pay attention to. In France, for
example, over-16s need to prove they are vaccinated to gain access to
certain activities, including getting a ski pass. Unvaccinated
12-15-year-olds can take a daily Covid test.

 

Portugal and Greece have both announced an easing of their entry rules this
week.

 

Travel association Abta said it was working with its European counterparts
to try and encourage greater consistency, and pressing the UK government to
lead international efforts to align rules.-BBC

 

 

 

Starbucks fires organisers as union threat grows

Starbucks has fired a number of workers leading efforts to organise a union
in Tennessee, one of more than 50 such drives it is facing across the US.

 

The coffee chain said the staff had knowingly violated company rules,
including by using a store after-hours.

 

Labour organisers said the firm was retaliating in a bid to slow the
momentum of their efforts.

 

Buffalo, New York recently became home to the first unionised
Starbucks-owned stores in the US since the 1980s.

 

Since then, dozens more locations of the chain have also filed to hold votes
about joining a union, which would give workers the ability to negotiate as
a group with the firm over pay and conditions.

 

Starbucks spokesman Reggie Borges rejected claims of retaliation, noting
that the firm has not stopped staff involved in the ongoing union efforts
from speaking out.

 

He said the firm did an internal investigation, including interviews with
those involved, which confirmed staff had been aware of the rules against
accessing stores after hours without permission when they used the cafe for
a January television interview about the union efforts.

 

US Starbucks store votes for labour union

Gen Z fights for unions, one Starbucks at a time

He did not provide figures for how many people have lost their jobs for
breaking such policies but said this case was clear cut.

 

Starbucks Workers United, which has been helping to spearhead efforts, said
that it planned to file charges over the seven firings at the store in
Memphis with the National Labor Relations Board, which enforces US labour
laws.

 

It said the coffee chain was selectively enforcing policies as a
"subterfuge" to fire union leaders. Of the seven people who lost their jobs,
most had impeccable work records, the group said.

 

"It definitely feels like anti-union tactics and union-busting tactics
because these are infractions that would have never been written up," said
former barista LaKota McGlawn, who had worked for Starbucks since December
2020, and was promoted to a shift supervisor last year, earning $15.25 an
hour.

 

'Determined to fight'

The 22-year-old, one of the members of the local organising committee, said
she never received training regarding some of the rules in question and the
firing took her by surprise, despite a meeting with supervisors following
the TV interview.

 

"This was honestly one of the last things I was expecting today," she told
the BBC. "We're determined to fight this."

 

Starbucks has consistently opposed staff efforts to join a union, which it
says would make the company less able to respond quickly to worker concerns.

 

Last year, the National Labor Relations Board found the company had
retaliated illegally against two baristas involved in labour organising in
Philadelphia, a decision the firm has appealed.

 

Executives recently told investors that efforts to keep and train staff were
weighing on its bottom line. It has more than 8,000 company-owned cafes
across the US and at one time was known for standing out among retail
employers for the benefits it offered.-BBC

 

 

Record-high seizure of $5bn in stolen Bitcoin

Stolen Bitcoin worth more than $5bn (£3.7bn) has been seized by the US
Department of Justice - the largest ever confiscation of its kind.

 

Officials also arrested and charged two people on Tuesday with attempting to
launder the money, which amounts to nearly 120,000 Bitcoin.

 

The funds, stolen by a hacker who breached a cryptocurrency exchange in
2016, were valued at about $71m.

 

But, with the rise in Bitcoin's value, it is now valued at more than $5bn.

 

Assistant Attorney General Kenneth Polite Jr said the seizure was proof the
government "will not allow cryptocurrency to be a safe haven for money
laundering or a zone of lawlessness within our financial system".

 

The money originates from the 2016 hack of a crypto exchange known as
Bitfinex.

 

According to Justice Department officials, a hacker breached the platform,
made more than 2,000 unauthorised transactions and then funnelled the money
into a digital wallet allegedly run by Ilya Lichtenstein, 34, of New York.

 

A criminal complaint alleges Lichtenstein and his wife, Heather Morgan, 31,
laundered about 25,000 of the stolen Bitcoin through various accounts over
the past five years and used various methods to cover their tracks, from
fake identities to converting their Bitcoin into other digital currencies.

 

Investigators from Washington DC, New York, Chicago and Ansbach, Germany
collaborated on the lengthy probe.

 

In a statement, Bitfinex said it had cooperated with the inquiry and was
"pleased" the stolen funds had been recovered.

 

Lichtenstein and Morgan will appear before a federal judge later on Tuesday,
on counts of conspiracy to defraud the US and conspiracy to commit money
laundering.

 

If found guilty, they could each serve up to 25 years in prison.

 

The asset seizure comes four months after the launch of a National
Cryptocurrency Enforcement Team at the Justice Department.

 

In what is believed to be its previous largest financial seizure, the team
seized some $2.3m in cryptocurrency last year, recovering the ransom paid by
the Colonial Pipeline company to end a crippling cyberattack.-BBC

 

 

 

Peloton boss John Foley to step down as firm axes 2,800 jobs

The co-founder of exercise brand Peloton is to step down from leading the
company as it plans to cut thousands of jobs.

 

John Foley, chief executive of the firm for 10 years, will be replaced by
Barry McCarthy, the former chief financial officer of Spotify.

 

Despite the change, one of Peloton's biggest investors doubled down on its
calls for the company to be sold.

 

Amazon, Nike and Apple are rumoured to be interested in bidding for the
firm.

 

The company, which pairs its equipment with streaming and live exercise
classes, had seen sales of its bikes and treadmills soar during the
pandemic, but the post-lockdown return to gyms has left the firm worth less
than a fifth of its peak $50bn valuation.

 

Mr Foley said Mr McCarthy was the "right leader to take the company into its
next phase of growth". Mr Foley will become Peloton's executive chairman.

 

After announcing the change in leadership, US-based Peloton also said it
will cut about 2,800 jobs globally due to a drop in demand for its products.

 

Shares in the firm jumped by as much as 19% on the New York Stock Exchange
on Tuesday.

 

But one of Peloton's top investors, Blackwells Capital, which owns a near 5%
stake in the company, said the changes did not address the concerns of
investors and renewed its calls from last month for the company to be sold.

 

"Mr Foley has proven he is not suited to lead Peloton, whether as CEO or
executive chair, and he should not be hand-picking directors, as he appears
to have done today," added Jason Aintabi, chief investment officer at
Blackwells.

 

In a presentation sent by Blackwells to Peloton on Monday, the investment
firm said the company had been "horribly mismanaged, with unbridled
enthusiasm taking the place of disciplined leadership".

 

The presentation attacked Mr Foley's abilities as a leader, saying he had
made "a series of poor decisions relating to product, pricing, demand,
safety and capital allocation".

 

Blackwells has previously said Peloton and its customer base were "extremely
attractive" to companies such as Nike, Apple, Disney and Sony, which are
looking to boost their presence in the home, health and wellness sectors.

 

'Apple the likely acquirer'

Mr Foley told The Wall Street Journal, that the company was "open to
exploring any opportunity that could create value for Peloton shareholders"
but declined to comment further.

 

Analysts at Wedbush Securities said that the leadership change made it more
likely that Peloton would ultimately be sold.

 

"If a bidding process begins, we view Apple as the likely acquirer due to
the clear strategic fit with its healthcare/fitness/subscription
initiatives, while Amazon and Nike among others could be potential bidders
in the mix," they added.

 

"The reality is that Foley was the pilot on the Peloton growth plane and him
leaving paints a bleak picture with the main visionary no longer in charge."

 

Analysts have estimated that Peloton could be valued between $12bn and
$15bn, depending on timing and the competition.

 

Setting out its plans to cut costs on Tuesday, Peloton said along with
worker cuts, around 20% of its corporate staff would made redundant.

 

Mr Foley said the decision was "not taken lightly". The company expects its
restructuring programme to cost about $130m, which will be related to
severance packages.

 

The company also said it was "winding down" the development of the Peloton
Output Park - a factory in Ohio where it had hoped to make its exercise
equipment and create 2,000 jobs. Shelving the plant will cost $60m.

 

Peloton reported its "connected fitness" subscriptions in the second quarter
of its financial year grew by 66% from a year earlier, while its paid
digital members rose 38%. Total revenue in the quarter grew 6% to $1.1bn.

 

The company, which previously expected sales of $4.4bn to $4.8bn this
financial year, has revised down its forecast to $3.7bn to $3.8bn.

 

Aside from demand falling for its products, there have also been recent PR
disasters for the company, including when TV characters had heart attacks
when using Peloton machines.

 

A fictional character in the Sex and the City reboot And Just Like That died
of a heart attack using a Peloton machine, and there was also a brush with
death in Billions.

 

After the And Just Like That death, Peloton tried to recover the PR
narrative with a parody advert featuring Chris Noth alive and well, and
benefitting from exercise. But that backfired after allegations of sexual
assault, which he denied.

 

Meanwhile in August the US Department of Justice and the Department of
Homeland Security said they were investigating the company after a child was
pulled under one of its treadmills and killed, while other customers had
reported injuries.

 

Weeks after the reports, Peloton recalled 125,000 of its Tread+ running
machines after initially saying there was "no reason" to stop using the
machine before changing its stance.-BBC

 

 

BP hits back at calls for windfall tax on bumper profits

Oil giant BP has rejected calls for a windfall tax on energy companies'
bumper profits, saying it would reduce investment in UK gas and renewables.

 

BP posted a profit of $12.8bn (£9.5bn) for 2021 after oil and gas prices
surged in the second half of the year.

 

That has prompted calls for a one-off tax to help support families
struggling to pay their energy bills.

 

Labour said it was "only fair and right" that energy firms making higher
profits should pay more tax.

 

But BP said: "Generally, a windfall tax on UK oil and gas producers would
not encourage investment in producing the UK's gas resources.

 

"Very importantly, we also believe the UK should continue its [low carbon]
energy transition as fast as possible. BP is committed to playing our part
here," a company spokesperson said.

 

Last week, rival oil giant Shell also reported profits of $19bn on the same
day that the energy regulator Ofgem announced UK householders would see a
54% rise in their domestic energy bills in April.

 

That has prompted criticism that energy firms are raking in excess profits
on the back of fuel poverty and "creeping climate apocalypse".

 

But the oil giants argue they are facing an unprecedented challenge: while
the global economy remains heavily dependent on fossil fuels, they are being
urged to shift to lower carbon alternatives, and need big profits to fund
that transition.

 

BP said over this decade the firm planned to invest more than twice what it
made in Britain, the "great majority" in offshore wind, solar, hydrogen,
carbon capture and storage and electric vehicle charging.

 

BP has moved further than many of its rivals, outlining a plan to increase
its renewable power capacity 20-fold by 2030 and reduce its oil output by
40%, or more than 1 million barrels per day.

 

The strong results showed BP was doing what it had promised: "performing
while transforming" BP chief executive Bernard Looney said.

 

A windfall tax is a one-off tax imposed by a government on a company or
group of companies.

 

The idea is to target firms that were lucky enough to benefit from something
they were not responsible for - in other words, a windfall.

 

An example of such a windfall would be high energy prices. Companies that
get oil and gas out of the ground are getting much more money for it than
they were last year, largely because there has been so much more demand as
the world emerges from the pandemic.

 

Last year's profit compares to a $5.7bn loss BP reported in 2020, when
economies around the world were shut down due to the Covid pandemic.

 

But rising demand for oil last year, as economies reopened, combined with
supply chain challenges, pushed energy prices sharply higher by the end of
2021. The surge in revenues prompted Mr Looney to describe BP as "a cash
machine", with profits reaching more than $4bn in the final quarter.

 

Those profits come at a particularly sensitive time with UK households
facing a cost of living crisis, which has already prompted the government to
step in with a council tax rebate and loans to smooth the coming rise in
domestic energy prices.

 

The Treasury said it would not comment on speculation over tax changes but
pointed out that oil and gas firms' profits are already taxed at a higher
rate than other businesses.

 

"A windfall tax could deter £14bn worth of opportunities awaiting
investment, which would risk both security of our energy supply, as well as
almost 200,000 jobs that rely on the industry," a Treasury spokesperson
said.

 

The same high energy prices that are delivering crushing bills to households
are seeing profits at companies like BP and Shell balloon. It seems like a
no-brainer to tax one to solve the other.

 

Both Conservative and Labour governments have imposed windfall taxes before.
But government officials and industry experts insist it's not that simple.
BP and Shell's operations in UK waters have dwindled and they already pay
double the tax rate of other businesses on UK-based profits.

 

Taxing them on overseas revenues is problematic as they already pay in the
countries in which they operate. Previous windfall taxes have generally been
on companies with predominantly UK based operations.

 

Even if you could design a mechanism to do it, the government is adamant
that it would deter investment in securing the best yield from domestic
fossil fuel reserves and be a raid on money that could be used to build or
buy wind farms, generate hydrogen or install more electric car charging
points.

 

Sceptics would say big payouts to shareholders dent the credibility of that,
but others say shareholders are primarily pension funds so a windfall tax
would be hitting savers. Whatever the merits of the arguments, with profits
at Shell and BP set to rise significantly again this year as gas and oil
prices stay high, it's unlikely calls for a windfall tax will go away.

 

Presentational grey line

However Labour and the Liberal Democrats have both called for a windfall tax
on the profits of firms such as BP and Shell to fund more support for
households.

 

"The boss of BP described the energy price crisis as a cash machine for his
company - and the people supplying the cash are the British people through
rocketing energy bills," said Ed Miliband, Labour's shadow secretary of
state for climate and net zero.

 

"In these circumstances, it is only fair and right for oil and gas producers
to contribute to helping the millions of families facing soaring inflation
and a cost of living crisis."

 

Under a plan outlined by Labour last month, North Sea energy producers would
pay higher corporation tax for a year to fund £1.2bn of help for households.

 

Liberal Democrat Leader Ed Davey said: "It simply cannot be right these
energy companies are making super profits whilst people are too scared to
turn their radiators on and terrified there will be a cold snap.

 

"A windfall tax is the best way to get money to the people who need it
quickly, but also to make sure there is some sense of trust and
proportionality in the system."

 

Only a fraction of BP's profits are generated in the North Sea, however, so
a windfall tax applied only to those operations would raise limited revenue,
while applying an additional tax to the firm's global profits might be more
difficult to execute.

 

Former BP executive Nick Butler said what mattered most was not how much
money the oil giants were making but how they chose to spend those profits.

 

"What society needs now is both the transition to low carbon and energy
security," he told the BBC's Today programme.

 

"We need to invest in oil and gas because 80% of all the energy we use every
day is oil and gas, and we need companies like BP and Shell investing in
that supply to ensure volatility of the world market is mitigated."-BBC

 

 

UK chip firm Arm sale by Softbank collapses amid competition fears

Japanese conglomerate SoftBank has called off its planned sale of UK
microchip designer Arm to US technology group Nvidia.

 

When the deal was first announced in September 2020 it was valued at around
$40bn (£29.6bn).

 

SoftBank now aims to float Arm's shares on the stock market by the end of
March next year.

 

The planned sale had faced major regulatory hurdles in the UK, United States
and European Union.

 

SoftBank and Nvidia agreed to end their sale agreement "because of
significant regulatory challenges preventing the consummation of the
transaction, despite good faith efforts by the parties," the companies said
in a joint statement to investors.

 

"We will take this opportunity and start preparing to take Arm public, and
to make even further progress," SoftBank's chief executive Masayoshi Son
added.

 

SoftBank did not give any other details about Arm's planned stock market
listing, which has sparked speculation amongst investors over which stock
exchange, or exchanges, will be chosen for the sale.

 

The statement also said that, in line with the agreement signed by both
firms in 2020, SoftBank would keep a $1.25bn non-refundable deposit paid by
Nvidia.

 

Under scrutiny

In December, the US Federal Trade Commission sued to block the buyout. It
argued that competition in the growing market for microprocessors for
self-driving cars and a new category of networking chips could be hurt if
Nvidia owned Arm.

 

The planned takeover was also being scrutinised by UK and EU regulators amid
concerns that it could push up chip prices and reduce choice and innovation.

 

Meanwhile, Arm's chief executive Simon Segars, who has been in the role
since 2013, is stepping down.

 

He will be replaced by Rene Haas, who most recently served as president of
intellectual property at Arm.

 

"With the uncertainty of the past several months behind us, we are
emboldened by a renewed energy to move into a growth strategy and change
lives around the world," Mr Haas said.

 

Mr Segars, who has been at the company for three decades, will stay on in an
advisory role to help with the transition.

 

Arm's chip designs are at the heart of most smartphones and smart devices
around the world.

 

It licenses its technology to major companies including Apple, Samsung and
Qualcomm.

 

The company was incorporated in 1990 and made its London Stock Exchange
debut eight years later.

 

In 2016, it was bought by SoftBank, which is one of the world's biggest
technology companies.

 

In 2020, SoftBank decided to sell Arm to help shore up its finances after
losing money on other investments, including shared office space firm WeWork
and ride-hailing platform Uber.

 

In recent years, Nvidia has become America's most valuable chip company on
the strength of its graphic processors.

 

Graphic processors are crucial for video gaming, as well as becoming more
widely used for other areas of advanced computing including artificial
intelligence applications.

 

Nvidia's attempt to take over Arm came against the backdrop of the global
chips shortage.

 

Millions of products from cars to smartphones rely on computer chips but
there are not enough currently being produced to meet demand.

 

As sales of devices soared during the pandemic, manufacturers have seen
stocks of semiconductors plunge.-BBC

 

 

 

Asian stocks join global rally, U.S. yields cling to highs

(Reuters) - Asian shares and European stock futures advanced on Wednesday
after a strong session on Wall Street, while U.S. treasury yields held near
multi-year highs ahead of closely watched inflation data this week.

 

Investors across asset classes are devoting considerable thought to the pace
and timing of interest rate hikes by central banks across the world.

 

Barring any big surprises, the consumer price index should cement
expectations the U.S. Federal Reserve will raise interest rates next month,
with a strong print offering further support to those tipping a larger 50
basis point rise.

 

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)
added 1.5% to its highest in two weeks, helped by a 3.8% gain in Hong
Kong-listed tech stocks (.HSTECH), especially index heavyweight Alibaba
(9988.HK) which rose 6.6%.

 

Japan's Nikkei (.N225) gained 1.2%.

 

Futures indicated the share rally would continue into European and U.S.
trading, with the pan-region Euro Stoxx 50 futures up 0.81%, FTSE 100
futures rising 0.85% and e-mini futures for the S&P 500 0.5% higher.

 

Overnight, three main Wall Street indexes closed higher with tech stocks
including Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O) jumping, as did
bank stocks supported by the prospect of higher U.S interest rates.

 

Nonetheless, the Nasdaq Composite (.IXIC) is still down 9.2% this year after
a brutal January.

 

Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas, said
market volatility was lingering as investors tried to figure out how often,
how far and how fast central banks would raise interest rates.

 

"The overarching theme for the market is central banks’ monetary policies,"
he said. "I think volatilities will continue and will possibly
increase...but over the longer term corporate balance sheets, particularly
in Asian emerging markets look a lot better than they were earlier," he
said.

 

Elsewhere in Asia Pacific, gains in tech names helped Korea's KOSPI (.KS11)
rise 0.8% and Commonwealth Bank of Australia (CBA.AX), the country's largest
bank gained 5.6% after announcing a A$2 billion share buyback. read more

 

Gains in Hong Kong financials and tech stocks meant the local benchmark
(.HSI) rose 2%, unfazed by tighter restrictions to combat a new wave of
COVID-19.

 

However, focus on U.S. inflation figures due Thursday is likely to cap
further gains.

 

"Even though we sit in Asia, markets are still eagerly waiting for the
Thursday CPI print out of the U.S. so are sitting on their hands right now,"
said Marcella Chow, Hong Kong based global market strategist at JPMorgan
Asset Management.

 

"The market is currently expecting January's CPI to be 7.3% versus 7% in
December, and if it comes in higher than expected we could see 10 year
yields go higher and even reach 2%, and push a value rotation," she added.

 

Higher yields typically cause investors to move out of so called growth
stocks, particularly technology names, into value stocks.

 

U.S. Treasury yields held firm in Asian trading, after touching multi-year
highs the day before as did yields in the euro zone.

 

The yield on 10-year Treasury notes was 1.9397%, having hit 1.97% on
Tuesday, its highest since Nov 2019, and the two-year was 1.3435%, just
below its highest since March 2020.

 

In Asia, the 10-year Japanese government bond yield touched 0.215% in
morning trade, its highest since January 2016

 

Currency markets were pretty quiet, with the dollar index , which measures
the greenback against six peers was at 95.559, little moved, down 0.07%.

 

Oil regained some ground after falling earlier in the week due to optimism
around talks with Iran, leading to a possible rise in supply.

 

Brent crude futures rose 0.3%, to $91.15 a barrel, while U.S. crude was at
$89.7 a barrel, up 0.4%. O/R/

 

Spot gold was steady at $1,827.9 per ounce.

 

The Thomson Reuters Trust Principles.

 

 

 

Fed's Daly says U.S. inflation could get worse before it gets better

(Reuters) - High U.S. inflation may get even higher before subsiding in the
face of Federal Reserve action and as supply chain strains recede, San
Francisco Federal Reserve Bank President Mary Daly said on Tuesday.

 

"We could have it be worse before it gets better but it is definitely going
to get better," Daly told CNN, adding that even so she doesn't expect
inflation to have fallen to 2% by the end of the year. Consumer prices rose
7% last year, eating into American paychecks.

 

The Fed is expected to begin raising interest rates from near-zero levels
next month, a move Daly said she supports. When it does, Daly said, the Fed
should do neither too little nor be "overly aggressive," mindful that the
Fed alone cannot cure inflation that's caused in large part by ongoing
pandemic disruption.

 

The Thomson Reuters Trust Principles.

 

 

Honda posts 17% fall in Q3 operating profit but raises full-year view

(Reuters) - Honda Motor Co (7267.T) raised its full-year operating forecast
on Wednesday, aided by cost cutting and a weak yen despite a persistent
global chip shortage.

 

It upgraded its latest forecast for an operating profit of 800 billion yen
($6.93 billion) for the year to March 31.

 

Honda, like other automakers, has been forced to curb production plans
because of chip shortages.

 

Nevertheless, Honda stuck to its plan to sell 4.2 million vehicles this
business year. In the previous 12 months, it sold 4.5 million vehicles.

 

It said third-quarter operating profit fell 17% to 229 billion yen ($1.98
billion) as the chip shortfalls curbed car production.

 

Profit for the three months to December was higher than an average forecast
of 166.2 billion yen based on estimates from nine analysts, Refinitiv data
shows.

 

($1 = 115.4200 yen)

 

The Thomson Reuters Trust Principles.

 

 

SoftBank says additional Alibaba ADS registration not tied to future deal

(Reuters) - Alibaba's (9988.HK), recent registration of additional American
Depository Shares is not tied to any specific future transaction by SoftBank
Group Corp (9984.T), a spokesperson for the Japanese conglomerate said on
Wednesday.

 

"The registration of the ADR conversion facility (F6 filing, which was filed
by Alibaba), including its size, is not tied to any specific future
transaction by SBG," SoftBank said in a statement to Reuters.

 

E-commerce giant Alibaba last week filed to register an additional 1 billion
American Depository Shares. The move, Citigroup analysts said this week
"might also suggest potential selling intention by SoftBank".

 

"Since Softbank has been a pre-IPO investor, we believe a large proportion
of those shares have not been previously registered as ADS," wrote Citi
analysts, including Alicia Yap.

 

But in a fresh research note on Wednesday, Citi said Alibaba might have
registered in advance a large number of ADS to support future plans of
shareholders to convert the company's Hong Kong stocks to those listed in
New York.

 

SoftBank Chief Executive Masayoshi Son told analysts he was "surprised" and
had not requested the filing, according to a person familiar with the matter
speaking on the condition of anonymity.

 

SoftBank's shares rose almost 6% in Tokyo trading, with Alibaba's Hong Kong
shares up nearly 7%.

 

SoftBank's stake of around 25% in Alibaba is worth about $82 billion and has
its origins in a $20 million investment in 2000. That rivals SoftBank's own
market capitalization of about $80 billion.

 

Alibaba's shares have fallen by 60% since highs in October 2020 amid a
regulatory crackdown against tech firms in China.

 

SoftBank has used its Alibaba shares as collateral for loans and trimmed its
stake using derivatives to capture upside from any rise in Alibaba's share
price.

 

With SoftBank's fund raising plans in disarray after the collapse of the
sale of chip designer Arm to Nvidia (NVDA.O), the spotlight is on other
potential asset sales as the group expands investing through its Vision Fund
and buys back shares.

 

SoftBank's shares are down by about half from highs in March last year. The
group squeezed out a profit in the October-December quarter after an upswing
in valuations in Vision Fund's private assets offset falling shares in its
listed portfolio.

 

The group's loan-to-value ratio rose to 22% from 19% three months earlier as
the net value of SoftBank's assets fell and debt rose. Son has pledged to
keep the ratio below 25% in normal times.

 

The Thomson Reuters Trust Principles.

 

 

Explainer: Europe's banks fear payment system could be casualty of
Russia-Ukraine crisis

(Reuters) - Amid fears of a Russian invasion of Ukraine, Italy's UniCredit
has backed out of a potential acquisition in Russia and Austria's Raiffeisen
Bank International has set aside risk provisions for possible sanctions on
Russia.

 

What the region's banks now fear most is that Russia gets banned from a
widely used payment system, bankers told Reuters, with one describing such a
move as an "atomic bomb" for the industry because it would prevent the
repayment of debts.

 

Here's what is at stake for Europe's banks as the crisis shows no signs of
abating:

 

Banks in Italy, France and Austria are the world's most exposed
international lenders to Russia. Italian and French banks each had
outstanding claims of some $25 billion on Russia in the third quarter of
2021, according to figures from the Bank for International Settlements
(BIS). Austrian banks had $17.5 billion. That compares with $14.7 billion
for the United States.

 

European banks with subsidiaries in Russia are most at risk of sanctions,
according to JPMorgan research. The investment bank's study pointed to a
handful of banks, including UniCredit (CRDI.MI), RBI (RBIV.VI), France's
Societe Generale (SOGN.PA), and ING (INGA.AS) of the Netherlands, as having
notable exposure to Russia.

 

RBI said its exposure was manageable, while ING said it was well prepared.
Societe Generale said it was closely monitoring developments and confident
about its Russia business. UniCredit did not immediately respond to a
request for comment.

 

In reaction to Russia's annexation of Crimea in 2014, and in the following
years, the UnitedStates and EuropeanUnion imposed sanctions that include
blacklisting specific individuals, sought to limit Russia's state-owned
financial institutions' access to Western capital markets, imposed bans on
weapons trade and other limits on the trade of technology, such as that for
the oil sector.

 

Over that period, foreign bank exposure to Russia has more than halved, BIS
data show.

 

European banks are closely watching U.S. legislation to sanction Russia. A
Senate bill would target the most significant Russian banks and Russian
sovereign debt. read more

 

Meanwhile, in Europe, negotiators say they are ready to impose "massive"
economic sanctions on Russia if it invades Ukraine, but officials and
diplomats say the threat depends on complex negotiations involving 27 member
states that are far from complete. Negotiations are being held secretly.
read more

 

In addition to widening the circle of Russian financial institutions that
would be affected, measures are most likely to include efforts to keep
Russia's energy sector from expanding, as well as blacklisting people and
companies allied to President Vladimir Putin, according to Paul Feldberg,
partner in the investigations, compliance and defence group at Jenner &
Block.

 

"We are likely to see many more individuals and entities designated than we
have seen before," Feldberg said.

 

WHAT'S THE BIGGEST CONCERN FOR EUROPEAN LEADERS?

 

A major worry is that Russia gets cut off from the SWIFT global payment
system, which handles international financial transfers and is used by more
than 11,000 financial institutions in over 200 countries. There is a
precedence for such a move: Iran was banned a decade ago.

 

Jan Pieter Krahnen, a finance expert at Frankfurt's Goethe University and
adviser to the German finance ministry, said the short-term consequences of
a ban are opaque, and might backfire. Long-term, it could lead to the
buildup of a parallel system that would be "a loss for the global system,
and also facilitate conflicts further down the road as opportunity costs
vanish".

 

Heinrich Steinhauer, who represents the German lender Helaba in Moscow, said
such a move would be tantamount to a giant debt forgiveness program by
prohibiting payments, describing it as a "sort of atomic bomb". "For many
this would be a catastrophe. For many in the European Union and Russia, and
less so for the U.S. because economic ties are fewer," he said.

 

WHAT ELSE IS POSSIBLE?

 

Financial institutions involved in swaps, futures, forwards and other
derivatives that trade with Russian counterparties could also become subject
to sanctions rules, according to Jonathan Moss, partner at the law firm DWF.

 

A prohibition of trading of Russian bonds in the secondary market would mean
that holders of Russian bonds might be forced to sell, Moss said.

 

European banks oppose including Russian bonds in a sanctions package, said
one person with direct knowledge of their stance.

 

WHAT ACTIONS HAVE EUROPEAN BANKS TAKEN SO FAR?

 

Last week, RBI said it had earmarked 115 million euros in provisions for
possible sanctions on Russia, underscoring risks for European lenders as
tensions flare.

 

In late January, UniCredit dropped a potential bid for Russian state-owned
Otkritie Bank due to the Ukraine crisis.

 

ING of the Netherlands disclosed last week that it has 4.7 billion euros in
exposure in Russia, but only around 25% of that is onshore. ItsCEO said the
bank plans to remain in Russia and would act accordingly if any new
sanctions arose.

 

The Thomson Reuters Trust Principles.

 

 

 

Equinor posts record Q4, hikes dividend and share buybacks

(Reuters) - Norway's Equinor (EQNR.OL) posted record pretax profits for the
fourth quarter on Wednesday, driven by a boom in oil and gas prices and said
it will raise its dividend and increase share buybacks.

 

Adjusted earnings before tax rose to $15.0 billion in the October-December
quarter from $756 million in the same period a year ago, exceeding the $13.2
billion predicted in a poll of 23 analysts compiled by Equinor.

 

CEO Anders Opedal said Equinor enjoyed a free cash flow of $25 billion last
year as a result of "continued improvements and capital discipline".

 

"We are capturing value from high prices for gas and liquids with excellent
performance and increased production," he said a in statement.

 

The oil and gas industry saw a massive turnaround last year as markets
overcame the pandemic-driven slump of 2020, with the price of European
natural gas quadrupling between January and December while North Sea crude
rose more than 50%.

 

Majority state-owned Equinor said it would pay a quarterly dividend of $0.20
per share, up from $0.18 per share paid in the third quarter, and plans to
increase its share buybacks in 2022 to $5 billion from $1.3 billion in 2021.

 

European oil industry peers have also posted soaring profits in recent days,
with BP promising to increase its share buybacks and Shell (SHEL.L) saying
it will raise both dividends and its stock purchases. read more

 

Equinor's quarterly petroleum production stood at 2.16 million barrels of
oil equivalent per day (boepd) in the fourth quarter, up 6% from the same
period of 2020.

 

The company expects its oil and gas production to grow by 2% in 2022.

 

Equinor's shares have risen 63% in the last 12 months, more than double the
rise in the European oil and gas index (.SXEP).

 

The Thomson Reuters Trust Principles.

 

 

 

Akzo Nobel misses Q4 core profit forecast due to raw material costs

(Reuters) - Dutch paints and coatings maker Akzo Nobel (AKZO.AS) reported on
Wednesday weaker-than-expected quarterly core earnings as high costs of raw
materials continued to weigh on the market.

 

Chemical makers such as Akzo Nobel and PPG Industries (PPG.N) have been hit
by rising raw material costs due to strong demand and supply chain issues.

 

Amsterdam-based Akzo Nobel reported fourth-quarter adjusted operating income
of 209 million euros ($238.72 million), missing analysts' 212.5 million euro
forecast.

 

The group, which increased pricing by 12.5%, said raw material and other
variable costs increased by 325 million euros in the fourth quarter.

 

However, Chief Executive Officer Thierry Vanlancker said in a statement that
the group was on track to offset raw material inflation by the first
quarter.

 

Akzo Nobel confirmed its guidance for 2023 earnings before interest, taxes,
depreciation and amortisation (EBITDA) of 2 billion euros.

 

($1 = 0.8755 euros)

 

The Thomson Reuters Trust Principles.

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2022

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


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
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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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