Major International Business Headlines Brief::: 14 February 2022

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Major International Business Headlines Brief::: 14 February 2022 

 


 

 


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

 


 

 


ü  India bourse head was a 'puppet' of unnamed yogi, regulators say

ü  Big banks fund new oil and gas despite net zero pledges

ü  HMRC seizes NFT for first time in £1.4m fraud case

ü  Poundland moves into fresh food

ü  Himalaya yogi ran India's top bourse as puppet master, regulator says

ü  Amazon to allow work without face masks, require vaccination for paid COVID leave

ü  No sign of light at end of tunnel for Credit Suisse investors

ü  Lockheed scraps $4.4 bln deal to buy Aerojet amid regulatory roadblocks

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

ü  Marketplace suspends most NFT sales, citing 'rampant' fakes and plagiarism

ü  BMW pays $4.2 bln to take control of Chinese JV

ü  Oil prices climb more than 1% to 7-year highs on supply disruption fears

ü  Ukraine tension reins in euro, lifts dollar and safe-havens

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 

India bourse head was a 'puppet' of unnamed yogi, regulators say

The former chief executive of India's largest bourse made crucial decisions by consulting and sending confidential information to a yogi, regulators say.

 

Chitra Ramkrishna sought advice from a spiritual guru in the Himalayas while head of the National Stock Exchange (NSE), the Securities and Exchange Board of India (SEBI) says.

 

She allegedly shared business plans, board meeting agendas and financial projections with the unnamed guru.

 

Ms Ramkrishna quit the bourse in 2016.

 

SEBI said documentation it had gathered during a probe "clearly showed" that the yogi was running the NSE, and Ms Ramkrishna was "merely a puppet in his hands" until the end of her time in the role.

 

"The sharing of financial and business plans of NSE... is a glaring, if not unimaginable, act that could shake the very foundations of the stock exchange," the regulator said.

 

SEBI fined Ms Ramkrishna 30m rupees (£293,186; $396,975) and banned her for three years from working with any bourse or any firm registered with the regulator as an intermediary.

 

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An email sent by the BBC to an address regulators had linked to the guru was not immediately answered.

 

No other identifying details were provided by the regulator, except that the yogi is likely to be living in the Himalayan mountain range.

 

In a submission to SEBI, Ms Ramkrishna said she met the yogi on the banks of India's Ganges River nearly two decades ago.

 

Ms Ramkrishna said she had sought his advice on "many personal and professional matters" ever since.

 

"As we know, senior leaders often seek informal counsel from coaches, mentors or other seniors in this industry which are all purely informal in nature. In a similar strain I felt that this guidance would help me perform my role better," she said.

 

SEBI called Ms Ramkrishna's actions a "glaring breach of regulations", and said her views that her actions did not cause any harm to the market were "absurd".

 

The regulator said it had come across email exchanges between the guru and Ms Ramkrishna during an earlier investigation into the NSE.

 

Ms Ramkrishna, who was among the executives who started the NSE in the early 1990s, cited "personal reasons" when she left the exchange in 2016.

 

Mind-boggling and implausible are just two of the adjectives being used by social media users in India, reacting to revelations that a nameless 'spiritual guru' in the Himalayas was influencing key business decisions at the country's largest stock exchange.

 

Some even said the story would lend itself well to being adapted into a high-octane web drama.

 

But while "gobsmacked" is pretty much the immediate reaction on the street, experts say the bizarre findings by India's stock market regulator are a stinging indictment of the poor corporate governance practices at NSE, which in areas like derivatives is the world's largest exchange. This is particularly ironic given how strict governance rules are for companies listed on such stock exchanges.

 

"This is a global scandal," said Sucheta Dalal, India's foremost investigative journalist and co-author of 'Absolute Power', a deep dive into the exchange's amazing rise, and the algorithm scam which led to the regulator launching the investigation that's brought these issues to light.

 

Calling the inquiry "shoddy" Ms Dalal said there needs to be a custodial interrogation of the former boss, who she believes has got away with a mere slap on the wrist.

 

She also questioned the timing of the revelations, suggesting that authorities want to close out any pending regulatory inquiries into NSE, in order to clear the path for its initial public offering.

 

But the issue is unlikely to die down anytime soon, with the jury still out, on the identity of the mysterious yogi at the centre of the drama. The episode has yet again emphasised the need for more robust whistle-blower mechanisms, Amit Tandon, Founder of institutional advisory firm IIAS told the BBC.

 

 

 

Big banks fund new oil and gas despite net zero pledges

Big banks are pumping billions into new oil and gas production despite net zero pledges, campaigners have said.

 

Banks including HSBC, Barclays and Deutsche Bank are still backing new oil and gas despite being part of a green banking group, ShareAction said.

 

Investors should force banks to demand green plans from fossil fuel firms before funding them, it said.

 

HSBC and Barclays said they were focused on achieving environmental goals.

 

"Net zero" means not adding to greenhouse gases already in the atmosphere by cutting and trying to balance out emissions.

 

If the Earth is to avoid damaging environmental effects, including more extreme weather, it needs to limit average global warming to below 1.5 degrees centigrade.

 

 

To achieve this, we need to get to net zero by 2050, experts have said.

 

As part of getting to net zero, the International Energy Agency has said there should be no new oil and natural gas fields.

 

But big banks are continuing to fund oil and gas expansion with billions of dollars, ShareAction said, despite being part of a UN-led group called the Net Zero Banking Alliance.

 

What is net zero and how are the UK and other countries doing?

Is a new oil field climate change hypocrisy?

HSBC put an estimated $8.7bn (£6.4bn) into new oil and gas in 2021, while Barclays put in $4.5bn, and Deutsche Bank loaned $5.7bn, the campaign group estimated.

 

The fossil fuel giants receiving the funding included Exxon Mobil, Shell, BP, and Saudi Aramco.

 

This is a big drop from 2020, when HSBC alone pumped more than $18bn into new oil and gas, and there were big drops in funding across the board between 2020 and 2021, according to figures from consultancy Profundo.

 

ShareAction said this was due to banks focussing on providing pandemic-related loans to keep fossil fuel firms afloat during the pandemic, and that in 2021 funding returned to pre-pandemic levels.

 

'Lose-lose'

Since joining the Net Zero Banking Alliance last year, 24 big banks have provided $33bn for new oil and gas projects, with more than half of that amount ($19bn) coming from four of the founding members - HSBC, Barclays, BNP Paribas and Deutsche Bank, the campaigners said.

 

ShareAction urged big investors to demand that banks restrict finance for oil and gas expansion, saying funding new oil and gas is a lose-lose for banks and investors.

 

Xavier Lerin, ShareAction senior research manager, said: "If oil and gas demand decreases in line with 1.5C scenarios, prices will fall and assets will become stranded.

 

"On the other hand, if demand does not fall enough to limit global warming to 1.5C, the economy will suffer from severe physical climate impacts.

 

"Either way, value will be destroyed for energy companies, banks and their investors."

 

The campaign group added: "Banks say that they want to help their clients to transition away from fossil fuels, but there is little evidence for this claim."

 

"Most banks - HSBC included - are not demanding transition plans from clients, raising doubts about their commitment to this transition," it added.

 

But an HSBC spokesman said the bank was "committed to working with our customers to achieve a transition towards a thriving low carbon economy".

 

The bank published its policy to phase out funding coal for energy production in December, and said its oil and gas net zero financing plans would be published on 22 February in its annual report.

 

Barclays said it "continues to engage with a broad range of stakeholders on climate and sustainability topics".

 

"We continue to focus on our ambition to become a net zero bank by 2050, and our commitment to align our financing with the goals and timelines of the Paris Agreement," a spokeswoman said.

 

Barclays has a target of a 15% reduction in financed emissions from energy, including coal, oil and gas, by 2025.

 

"We also have restrictions around the direct financing of new oil and gas exploration projects in the Arctic or financing for companies primarily engaged in oil and gas exploration and production in this region," the spokeswoman added.

 

A Deutsche Bank spokesman said: "Carbon intensive sectors account for only a small share of our loan book and based on publicly available data our lending and underwriting activity in fossil fuels is significantly smaller than global peers'.

 

"Moreover, our aim is to support all of our customers as we transition to a net zero world."

 

Deutsche Bank said it was "well under way" to hitting green and social targets of €200bn (£170bn) by 2023, including "an intense dialogue with clients to move from high-carbon business models towards low and no-carbon ones".

 

The spokesman added: "We have committed to align the operational and attributable emissions from our portfolio with pathways to net-zero by 2050 or sooner.

 

"This includes measuring and subsequently disclosing the carbon intensity of our loan portfolio and developing and disclosing plans to adjust its footprint in accordance with national and international climate targets by end of this year."

 

BNP Paribas, which was also named in the ShareAction report, said: "As the leading bank in continental Europe, BNP Paribas is a major financier of European energy companies that are largely committed to transitioning their model through strong investments in developing renewable energies."

 

The bank said it is "convinced that these players, due to their technical and financial capacities, have the levers necessary to accelerate transition by developing renewable energy and other transformative solutions".

 

'Investment needed'

Meanwhile, oil giant Exxon Mobil said that the International Energy Agency and the UN's Intergovernmental Panel on Climate Change "agree that significant investment in oil and gas is still needed in Paris-aligned scenarios".

 

It said that even in the IEA net zero scenario, "additional investment of approximately $11tn through 2050 would be required in both oil and natural gas development to meet the world's energy demand".

 

BP said it "has a net zero ambition and we have set out a strategy to deliver it".

 

"Resilient hydrocarbons are a core part of our strategy, but we are not aiming to grow our oil and gas production - we expect to see production fall 40% from 2019 to 2030.

 

"We expect to hold investment in oil and gas flat over this decade as output falls, while at the same time expanding our spending in transition growth businesses - including EV charging, convenience, renewables, hydrogen and bioenergy - to around 50% of the total by 2030," BP added.

 

Shell declined to comment, and Saudi Aramco was approached for comment.-BBC

 

 

 

HMRC seizes NFT for first time in £1.4m fraud case

The UK tax authority has seized three Non-Fungible Tokens (NFT) as part of a probe into a suspected a VAT fraud involving 250 alleged fake companies.

 

HM Revenue and Customs (HMRC) said three people had been arrested on suspicion of attempting to defraud it of £1.4m.

 

The authority said it was the first UK law enforcement to seize an NFT.

 

NFTs are assets in the digital world that can be bought and sold, but which have no tangible form of their own.

 

The digital tokens, which emerged in 2014, can be thought of as certificates of ownership for virtual or physical assets. NFTs have a unique digital signature so they can be bought and sold using traditional currency or crypto currency, such as Bitcoin.

 

Where Bitcoin has been hailed as a digital answer to currency, NFTs have been touted as the digital answer to collectables, but plenty of sceptics fear they're a bubble waiting to burst.

 

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How do NFTs work?

Traditional works of art such as paintings are valuable precisely because they are one of a kind, but digital files can be easily and endlessly duplicated.

 

With NFTs, artwork can be "tokenised" to create a digital certificate of ownership that can be bought and sold. The tokens can represent a range of real-world objects such as artwork, music and videos.

 

As with crypto-currency, a record of who owns what is stored on a shared ledger known as the blockchain.

 

The records cannot be forged because the ledger is maintained by thousands of computers around the world. NFTs can also contain smart contracts that may give the artist, for example, a cut of any future sale of the token.

 

In theory, anybody can tokenise their work to sell as an NFT but interest has been fuelled by recent headlines of multi-million-dollar sales.

 

An image of a popular internet meme, featuring a two-year-old girl, was sold as a NFT for about $74,000 (£54,000) in September last year.

 

The picture, dubbed Side Eyeing Chloe, shows young Chloe Clem giving a disapproving look after her mother reveals a surprise trip to Disneyland.

 

Twitter's founder Jack Dorsey has also promoted an NFT of the first-ever tweet, with bids hitting $2.5m.

 

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HMRC said the suspects in its fraud case were alleged to have used "sophisticated methods" to try to hide their identities including false and stolen identities, false addresses, pre-paid unregistered mobile phones, Virtual Private Networks (VPNs), false invoices and pretending to engage in legitimate business activities.

 

Nick Sharp, deputy director economic crime, said the first seizure of an NFT "serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC".

 

"We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets."

 

HMRC said it had secured a court order to detain the seized crypto assets worth about £5,000 and three digital artwork NFTs, which have not been valued, while its investigation continues.-BBC

 

 

 

Poundland moves into fresh food

Poundland is selling more fresh food in a bid to attract cash-strapped shoppers to do a weekly shop with the budget chain.

 

It's opening its biggest ever store in Nottingham today which will have shelves of fruit, vegetables and bread.

 

Poundland has been trialling fresh food in a handful of convenience stores but it's the first time the retailer has stocked these items in a main store.

 

It plans to add the new ranges to more than 20 other large stores this year.

 

It's already begun rolling out chilled and frozen food and aims to have that stocked in 350 stores by the autumn.

 

"It's a natural extension of what our customers are looking for," says the managing director of Poundland, Barry Williams.

 

His latest shop, on a retail park on the outskirts of Nottingham, is twice the typical size of a regular Poundland.

 

It feels like a supermarket with trolleys and belted checkouts, as well as beer, wine and spirits.

 

Although grocery sales soared during the pandemic, the going hasn't been easy for discount chains as shoppers returned to the big weekly shop - and did it online.

 

But the boss of Poundland says the discounters are starting to grow again.

 

"Our business is growing. The size of the basket that shoppers are spending with us is growing quite dramatically."

 

"I'm seeing shoppers shop around a lot more particularly than what they were doing during the pandemic. There are locations that are coming back to life again, I think shoppers are definitely on the hunt for value now".

 

'I'm not a magician'

But, like every other retailer, Poundland is also grappling with rising costs.

 

"Inflation is hitting us right across the board," says Mr Williams.

 

"The cost of transportation and fuel, the cost of containers - that is double digit percentage inflation that we're seeing right now. And if you think of wage inflation for our colleagues, which we're supportive of, that is high single per cent inflation as well. I've got suppliers approaching us, and they all want cost increases".

 

The grocery aisles are fiercely competitive. But with shoppers perhaps more price-sensitive than they've ever been, retailers have to balance how much of their costs to pass on without losing customers to rivals.

 

The boss of Poundland says he's determined to keep his prices keen: "I'm not a magician, I'm not Paul Daniels. I can't magic all of this stuff away.

 

"What I can do is work as hard as I can on behalf of shoppers, to make sure that we mitigate as much as we can to protect them. Our view is really clear - that people who work the hardest on behalf of shoppers are the ones who are going to win. The ones who just pass that on to the shoppers. Well, shoppers are king, they can go wherever they want."-BBC

 

 

 

Himalaya yogi ran India's top bourse as puppet master, regulator says

(Reuters) - The former head of India's largest stock exchange shared confidential information with a yogi and sought his advice on crucial decisions, a probe by the market regulator has found, ahead of the bourse's much-awaited public listing.

 

In a case of "bizarre misconduct" that was a "glaring breach" of regulations, Chitra Ramkrishna, the former chief executive of National Stock Exchange (NSE), shared information including the bourse's financial projections, business plans and board agenda with a purported spiritual guru in the Himalayas, the Securities and Exchange Board of India (SEBI) said.

 

"The sharing of financial and business plans of NSE ... is a glaring, if not unimaginable, act that could shake the very foundations of the stock exchange," SEBI said in an order, imposing penalties on Ramkrishna, the bourse and other top former executives for the lapses.

 

Ramkrishna, who quit NSE in 2016 citing "personal reasons", was not immediately reachable for comment. NSE and SEBI did not respond to requests for comment.

 

Allegations of corporate governance lapses have dogged NSE for several years. The exchange had planned to go public in 2017 but its listing was derailed by allegations officials had provided some high frequency traders unfair access through co-location servers, which could speed up algorithmic trading.

 

After a three-year investigation, SEBI fined the exchange over $90 million and barred it from raising money on securities markets for six months. NSE challenged the order in court and has sought SEBI's approval to file for a new IPO.

 

However, during that investigation, SEBI found documents showing Ramkrishna's emails to an unknown person, who she said during questioning was a "spiritual force" she had sought guidance from for 20 years.

 

Ramkrishna, in her defence, told SEBI that sharing of information with the person who was "spiritual in nature" did not compromise confidentiality or integrity.

 

The SEBI order however stated that it was "absurd" for Ramkrishna to contend that sharing sensitive information such as dividend pay-out ratios, business plans and the performance appraisals of NSE employees did not cause harm.

 

The SEBI probe also found the purported guru had substantial influence over the appointment of a mid-level executive, without any capital market experience, directly as an adviser to Ramkrishna with inadequate documentation and a salary higher than most senior NSE officials.

 

The guru was running the exchange, and Ramkrishna was "merely a puppet in his hands", SEBI said.

 

Questions emailed to an address given in the SEBI order as belonging to the guru were not immediately responded to.

 

SEBI also said NSE and its board were aware of the exchange of confidential information but had chosen to "keep the matter under wraps".

 

The regulator fined NSE 20 million rupees ($270,000) and has barred the exchange from launching any new products for six months.

 

SEBI imposed a penalty of 30 million rupees on Ramkrishna and barred her from any bourse and SEBI-registered intermediary for three years.

 

Ramkrishna was among a group of executives who in the early 1990s started NSE as a challenger to the more established BSE Ltd, then known as Bombay Stock Exchange. She was appointed joint managing director of NSE in 2009 and promoted to CEO in 2013.

 

The Thomson Reuters Trust Principles.

 

 

 

Amazon to allow work without face masks, require vaccination for paid COVID leave

(Reuters) - Amazon.com Inc on Thursday informed staff at its U.S. warehouses and logistics sites that they must report being fully vaccinated by March 18 if they wish to receive paid leave due to COVID-19.

 

The company also said fully vaccinated operations staff could work without a face covering starting on Friday as local regulations allow, according to a message to workers that Amazon shared with Reuters.

 

The online retailer attributed its policy updates to a recent decline in coronavirus cases across the United States, increasing rates of vaccination, and guidance from its medical experts and public health authorities.

 

"This is a positive sign we can return to the path to normal operations," the company's message said.

 

Amazon's COVID-19 protocols have faced scrutiny throughout the pandemic, as safety measures taken by the company have been met with criticism by some workers that it was not doing enough to protect them.

 

The company's status as America's second-biggest private employer, behind Walmart, has added significance to its policies. Amazon had a full and part-time headcount greater than 1.6 million worldwide as of Dec. 31.

 

The retailer's paid leave change does not regard workers who have received a religious or medical accommodation, its message said. Unvaccinated employees without such accommodation can take unpaid time off for a week of COVID isolation, it said.

 

The Thomson Reuters Trust Principles.

 

 

 

No sign of light at end of tunnel for Credit Suisse investors

(Reuters) - Weary Credit Suisse investors fear a long wait for the bank to get back on piste after a string of scandals which have wiped billions off its market value and piled pressure on management.

 

While Switzerland's second-largest bank says that it can create value by serving its wealthy clients with "care and entrepreneurial spirit", the market is not yet convinced and its share price has dropped by nearly a third in a year, knocking some 10 billion Swiss francs ($11 billion) off its valuation.

 

Meanwhile, other big European banks, buoyed by the prospect of rising interest rates, have gained almost 50% in stock market value over the same period and its cross-town Zurich rival UBS (UBSG.S) has left Credit Suisse (CSGN.S) for dust.

 

"Credit Suisse has a long list of scandals and problems," Stefan Sauerschell, a bond investor with Union Investment, said of the bank, which was founded in 1856 and says it has 48,770 employees and 3,510 relationship managers around the world.

 

"We always thought the management process would be improved and then the next punch landed. If there was another billion-plus loss, it would be a catastrophe," Sauerschell added.

 

Things did not get any better last week, however, when Credit Suisse reported a worse-than-expected $2.2 billion quarterly loss and warned of bleak prospects for 2022, when it said earnings would be hit by restructuring costs and pay.

 

That outlook knocked its already battered shares further, after a year when the bank racked up a 1.6 billion franc loss as a result of the collapse of $10 billion in supply chain finance funds linked to insolvent British finance firm Greensill and a $5.5 billion hit from the implosion of investment fund Archegos.

 

Proxy adviser Ethos was critical of Credit Suisse's decision not to publish its investigation into the Greensill affair.

 

"The bank should restore confidence with its shareholders and stakeholders by providing transparency on the roots and causes of the problems," Ethos's Vincent Kaufman said in an emailed response to Reuters.

 

Thomas Gottstein, who became Credit Suisse chief executive in 2020, said after the results this week that he was confident it was well positioned to grow and that risk management was at "the very core of its DNA".

 

Credit Suisse declined further comment.

 

Yet investors and analysts are not convinced, after hearing of a change in the way the bank pays its top staff, coupled with a tail-off in business and bleak prospects.

 

"They are in a very difficult situation. We've seen the problems with Greensill and other cases filter down to the business, slowing it down," Andreas Venditti, an analyst at Swiss bank Vontobel, said of Credit Suisse's predicament.

 

"At the same time, the bank has to pay up more cash to keep its staff. Although this might keep staff happy, the market does not like higher costs. And the outlook is subdued."

 

Although Credit Suisse pared back its bonus pool, it softened the blow for its own bankers by taking the unusual step of paying hundreds of millions in cash up front, while reducing the amount of shares it grants to them.

 

Senior bankers, who the bank said had taken a higher proportion of the bonus cut, received 799 million Swiss francs in cash payouts, up from just 59 million francs in 2020.

 

SKELETONS

 

Moody's this week flagged concerns over a tailing off in money flowing into Credit Suisse, warning that it could drag down revenue and pointing to pressures on wealth management, restructuring costs and higher payouts to staff.

 

"We expect 2022 results to be weak," the credit ratings agency said, while Citigroup analysts said it was "hard to find any positives" in the most recent results, although they do see long-term value in Credit Suisse's shares.

 

The bank's past continues to haunt it, making it harder to repair an image which is critical to holding on to wealthy customers.

 

Its reputation is once again being put through the mill in the first criminal trial of a major bank in Switzerland, in which Credit Suisse and a former employee face charges of allowing an alleged Bulgarian cocaine trafficking gang to launder millions of euros, some of it stuffed into suitcases.

 

Credit Suisse has rejected all the allegations, while its employee denies wrongdoing.

 

The trial has attracted huge interest in Switzerland and more Credit Suisse representatives are due to give testimony, with investors keenly watching.

 

"They need to ... make sure that they don't have any skeletons in the closet anymore," one analyst, who asked not to be named, said of what Credit Suisse must now do.

 

"They have moved themselves into a position where you don't give them the benefit of the doubt."

 

($1 = 0.9278 Swiss francs)

 

The Thomson Reuters Trust Principles.

 

 

 

Lockheed scraps $4.4 bln deal to buy Aerojet amid regulatory roadblocks

(Reuters) - U.S. arms maker Lockheed Martin Corp (LMT.N) called off plans on Sunday to acquire rocket engine maker Aerojet Rocketdyne Holdings Inc (AJRD.N) for $4.4 billion amid opposition from U.S. antitrust enforcers.

 

The Federal Trade Commission sued to block the deal in late-January on the grounds that it would allow Lockheed to use its control of Aerojet to hurt other defense contractors. Missile maker Raytheon Technologies (RTX.N) was an outspoken opponent of the proposed acquisition.

 

The merger, which was announced in late 2020, drew criticism as it would give Lockheed a dominant position over solid fuel rocket motors -- a vital piece of the U.S. missile industry.

 

Lockheed's Chief Executive James Taiclet said the acquisition would have improved efficiency, speed and cut costs for the U.S. government, but that terminating the agreement was in its stakeholders' best interest.

 

Aerojet, which reports fourth quarter earnings later this week, said in a separate statement that it still expects a strong "future performance," despite the scrapped merger.

 

The companies' merger agreement does not include a termination fee in the event that antitrust regulators opposed the deal, according to a regulatory filing. A Lockheed spokesman previously said the company did not plan to make any such payment to Aerojet.

 

If the deal had ended up in court, it would have been the first litigated defense merger challenge in decades, according to FTC.

 

Other critics of the deal included U.S. Democratic Senator Elizabeth Warren, whohad asked the FTC to examine the internal firewalls Lockheed said it would put in place to prevent it from gaining a competitive advantage over its peers.

 

Lockheed had said it accounted for 33% of Aerojet's sales and argued that the deal would reduce costs for the Pentagon and the U.S. taxpayer.

 

Rocket motors like those made by Aerojet are used in everything from the homeland defensive missile system to Stinger missiles.

 

Aerojet develops and manufactures liquid and solid rocket propulsion, air-breathing hypersonic engines and electric power and propulsion for space, defense, civil and commercial applications. Its customers include the Pentagon, NASA, Boeing (BA.N), Lockheed Martin, Raytheon and the United Launch Alliance.

 

The Thomson Reuters Trust Principles.

 

 

 

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:

 

WHICH COUNTRIES' BANKS ARE MOST EXPOSED TO RUSSIA?

 

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.

 

Reuters Graphics

WHICH BANKS ARE MOST EXPOSED?

 

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.

 

WHAT SANCTIONS CURRENTLY EXIST?

 

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.

 

WHAT NEW SANCTIONS ARE WE TALKING ABOUT?

 

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.

 

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.

 

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.

 

 

 

Marketplace suspends most NFT sales, citing 'rampant' fakes and plagiarism

(Reuters) - The platform which sold an NFT of Jack Dorsey's first tweet for $2.9 million has halted most transactions because people were selling tokens of content that did not belong to them, its founder said, calling this a "fundamental problem" in the fast-growing digital assets market.

 

Sales of NFTs, or non-fungible tokens, soared to around $25 billion in 2021, leaving many baffled as to why so much money is being spent on items that do not physically exist and which anyone can view online for free.

 

NFTs are crypto assets that record the ownership of a digital file such as an image, video or text. Anyone can create, or "mint", an NFT, and ownership of the token does not usually confer ownership of the underlying item. read more

 

Reports of scams, counterfeits and "wash trading" have become commonplace.

 

The U.S.-based Cent executed one of the first known million-dollar NFT sales when it sold the former Twitter CEO's tweet as an NFT last March. But as of Feb. 6, it has stopped allowing buying and selling, CEO and co-founder Cameron Hejazi told Reuters.

 

"There's a spectrum of activity that is happening that basically shouldn't be happening - like, legally" Hejazi said.

 

While the Cent marketplace "beta.cent.co" has paused NFT sales, the part specifically for selling NFTs of tweets, which is called "Valuables", is still active.

 

Hejazi highlighted three main problems: people selling unauthorised copies of other NFTs, people making NFTs of content which does not belong to them, and people selling sets of NFTs which resemble a security.

 

He said these issues were "rampant", with users "minting and minting and minting counterfeit digital assets".

 

"It kept happening. We would ban offending accounts but it was like we're playing a game of whack-a-mole... Every time we would ban one, another one would come up, or three more would come up."

 

"MONEY CHASING MONEY"

 

Such problems may come into greater focus as major brands join the rush towards the so-called "metaverse", or Web3. Coca-Cola (KO.N) and luxury brand Gucci are among companies to have sold NFTs, while YouTube said it will explore NFT features.

 

While Cent, with 150,000 users and revenue "in the millions", is a relatively small NFT platform, Hejazi said the issue of fake and illegal content exists across the industry.

 

"I think this is a pretty fundamental problem with Web3," he said.

 

The biggest NFT marketplace, OpenSea, valued at $13.3 billion after its latest round of venture funding, said last month more than 80% of the NFTs minted for free on its platform were "plagiarized works, fake collections and spam".

 

OpenSea tried limiting the number of NFTs a user could mint for free, but then reversed this decision following a backlash from users, the company said in a Twitter thread, adding that it was "working through a number of solutions" to deter "bad actors" while supporting creators.

 

"It is against our policy to sell NFTs using plagiarized content," an OpenSea spokesperson said.

 

"We are working around the clock to ship products, add features, and refine our processes to meet the moment."

 

To many NFT-enthusiasts, the decentralised nature of blockchain technology is appealing, allowing users to create and trade digital assets without a central authority controlling the activity.

 

But Hejazi said his company was keen on protecting content-creators, and may introduce centralised controls as a short-term measure in order to re-open the marketplace, before exploring decentralised solutions.

 

It was after the Dorsey NFT sale that Cent started to get a sense of what was going on in NFT markets.

 

"We realized that a lot of it is just money chasing money."

 

The Thomson Reuters Trust Principles.

 

 

 

BMW pays $4.2 bln to take control of Chinese JV

(Reuters) - BMW will pay 3.7 billion euros ($4.2 billion) to take majority control of its Chinese joint venture after securing the necessary licence from Beijing, as global automakers seek a tighter grip on business in the world's biggest car market.

 

The German carmaker said on Friday it was increasing its stake in the venture with Brilliance Auto Group to 75% from 50%, as announced in 2018 when China said it would start relaxing ownership rules in the auto industry.

 

China said at the time it would remove foreign ownership caps for companies making fully electric and plug-in hybrid vehicles in 2018, for makers of commercial vehicles in 2020, and for the wider car market by 2022.

 

BMW said the deal would have a one-off positive effect of 7-8 billion euros ($8-9 billion) on the financial results of its automotive business, and boost free cash flow by about 5 billion euros.

 

"Our extended joint venture contract lays the foundation for further mutual growth and progressive development ... It paves the way for balanced development in the three main regions of the world," Chief Financial Officer Nicolas Peter said.

 

BMW was the first automaker to state in October 2018 it would take control of its main joint venture in China, which was founded in 2003 and is currently in place until 2040.

 

Volkswagen (VOWG_p.DE) took majority control of its electric vehicle production joint venture JAC Volkswagen in 2020.

 

Mercedes-Benz (DAIGn.DE) owns 49% of its joint venture in China, Beijing Benz Automotive. Reuters reported in 2019 it was seeking to raise its stake, but faced opposition from its Chinese partner BAIC.

 

BMW expects sales in China to grow into 2022, its CFO has said, after seeing 9% growth in BMW and Mini deliveries last year to 846,237 vehicles. The BMW Brilliance Automotive joint venture produced 700,000 vehicles in 2021.

 

Based in Shenyang, one plant in Dadong district is currently being expanded, while a new one that will build fully-electric models alongside hybrids and internal combustion engine cars is also under construction alongside an existing plant in Tiexi.

 

BMW will add production of its X5 model in China, previously imported from the United States, in the second quarter of the year at the BMW Brilliance joint venture, a U.S. supplier source told Reuters in December.

 

($1 = 0.8768 euros)

 

The Thomson Reuters Trust Principles.

 

 

 

Oil prices climb more than 1% to 7-year highs on supply disruption fears

(Reuters) - Oil prices on Monday hit their highest in more than seven years on fears that a possible invasion of Ukraine by Russia could trigger U.S. and European sanctions that would disrupt exports from the world's top producer in an already tight market.

 

Brent crude futures was at $95.61 a barrel by 0506 GMT, up $1.17, or 1.2%, after earlier hitting a peak of $96.16, the highest since October 2014. U.S. West Texas Intermediate (WTI) crude rose $1.41, or 1.5%, to $94.51 a barrel, hovering near a session-high of $94.94, the loftiest since September 2014.

 

Comments from the United States about an imminent attack by Russia on Ukraine have rattled global financial markets.

 

Russia could invade Ukraine at any time and might create a surprise pretext for an attack, the United States said on Sunday. read more

 

"If ... troop movement happens, Brent crude won't have any trouble rallying above the $100 level," OANDA analyst Edward Moya said in a note.

 

"Oil prices will remain extremely volatile and sensitive to incremental updates regarding the Ukraine situation."

 

The tensions come as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, struggle to ramp up output despite monthly pledges to increase production by 400,000 barrels per day (bpd) until March.

 

The International Energy Agency said the gap between OPEC+ output and its target widened to 900,000 bpd in January, while JP Morgan said the gap for OPEC alone was at 1.2 million bpd. read more

 

"We note signs of strain across the group: seven members of OPEC-10 failed to meet quota increases in the month, with the largest shortfall exhibited by Iraq," JP Morgan analysts said in a Feb. 11 note.

 

The bank added that a super-cycle is in full swing with "oil prices likely to overshoot to $125 a barrel on widening spare capacity risk premium".

 

CMC Markets analyst Tina Teng said spare supply is limited and demand for oil has outpaced production growth, as economies bounce back from the worst of the coronavirus pandemic.

 

"It would not take long for prices to spike higher, though global leaders are rushing to help defuse the growing tension," she added.

 

Investors are also watching talks between the United States and Iran to revive the 2015 nuclear deal.

 

However, a senior Iranian security official said on Monday that progress in talks was becoming "more difficult". read more

 

In the United States, the robust oil prices are encouraging energy firms to ramp up output as they added the most oil rigs in four years last week, energy services firm Baker Hughes Co said on Friday. read more

 

The Thomson Reuters Trust Principles.

 

 

 

Ukraine tension reins in euro, lifts dollar and safe-havens

(Reuters) - The dollar and safe-haven currencies held firm and riskier ones struggled for traction on Monday, with traders on edge about the prospect of war in Europe and unsettled by soaring inflation.

 

The risk of war in Ukraine pushed the euro down on Friday and it was nursing losses at $1.1346 on Monday, well below last week's top of $1.1495.

 

The Australian and New Zealand dollars were also pinned below last week's levels and the Russian rouble was struggling after the spectre of sanctions sparked its sharpest fall in nearly two years on Friday.

 

The safe-haven yen has climbed to 115.53 yen from a five-week low of 116.34 last week.

 

Russia could invade Ukraine at any time and might create a surprise pretext for an attack, the United States said on Sunday. German Chancellor Olaf Scholz, who heads to Kyiv on Monday and Moscow for talks with President Vladimir Putin on Tuesday, warned of sanctions if Moscow did invade. read more

 

The flashpoint adds to stress already evident in markets' volatile response to hotter-than-expected U.S. inflation data last week, which unleashed bets on the Federal Reserve lifting rates more than 160 basis points before the end of the year.

 

"With Fed hike expectations surging again and geopolitical tensions in Ukraine escalating dramatically the dollar index should be back on the front foot again," said analysts at Westpac.

 

The dollar index crept up to 96.059 in the Asia session. Analysts see the euro, which dropped 1.2% on the yen on Friday, and oil importers' currencies as most at risk from conflict in Ukraine. Oil prices have surged.

 

Later on Monday, European Central Bank President Christine Lagarde addresses the European Parliament and St Louis Fed President James Bullard, who roiled markets with hawkish comments in the wake of last week's inflation data, appears on CNBC.

 

Sterling held at $1.3542 on Monday as investors are convinced the Bank of England is hiking rates next month and pricing about a 40% chance of a 50 basis point rise.

 

The New Zealand dollar fell 0.5% to $0.6622 and the Australian dollar eased 0.2% to $0.7119.

 

Australian jobs data is due on Thursday and the risk of surprise has driven Aussie dollar volatility gauges to nearly one-year highs.

 

The U.S. Federal Reserve releases its January meeting minutes on Wednesday.

 

Last week's chatter about an inter-meeting hike was tamped down when the Fed released an unchanged bond buying schedule for the coming month, since the central bank has said it would only hike after its buying had ceased.

 

 

 

 

 

 

 

 

 

 

 

 


 


 


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

 


 

 


(c) 2022 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:  <mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77 344 1674

 


 

 

 

 

 

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