Major International Business Headlines Brief::: 16 February 2022

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Major International Business Headlines Brief::: 16 February 2022 

 


 

 


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ü  Disney appoints executive to oversee metaverse strategy

ü  Airbnb: City travel almost at pre-pandemic level

ü  Car industry calls for electric charge watchdog

ü  Markets rally on hopes of Ukraine de-escalation

ü  UK wage growth lags rising cost of living

ü  Yuan wobbles revive worries about Asia's vulnerabilities

ü  Louis Vuitton set to raise price tags this week as costs climb

ü  Burger King pulls Whopper off discount menu; parent RBI to hike prices

ü  Starbucks faces backlash in China over police incident at store

ü  Fed to raise rates 25 bps in March but calls for 50 bps grow louder

ü  Shell moves to sell British North Sea southern gas fields -sources

ü  China courts freeze $157 mln of Evergrande assets over missed
construction payments

ü  CRYPTOVERSE-Bitcoin runs into Russian rules and regiments

ü  Canadian dollar touches 10-day low amid Ukraine uncertainty

ü  Australia's Liontown signs 5-year lithium supply deal with Tesla

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 

Disney appoints executive to oversee metaverse strategy

Disney has appointed an executive to specifically lead the entertainment
giant's strategy for the metaverse.

 

Mike White, who has been with the firm for more than 10 years, will oversee
a team that includes senior leaders.

 

In a memo to staff, which has been seen by the BBC, chief executive Bob
Chapek said the metaverse is "the next great storytelling frontier" to be
explored.

 

Technology giants, including Facebook owner Meta and Microsoft, are pouring
billions of dollars into the metaverse.

 

In the memo, Mr Chapek described the metaverse as a "perfect place to pursue
our strategic pillars of storytelling excellence, innovation, and audience
focus".

 

"Teams across the company are exploring this new canvas, and I have been
blown away by what I've seen," he said.

 

Is this the world's largest virtual fashion show?

Apparently, it's the next big thing. What is the metaverse?

Mr White will become Disney's senior vice president for Next Generation
Storytelling and Consumer Experiences.

 

In the newly-created role he will allocate resources, explore partnerships
and encourage knowledge sharing on the metaverse, the company said.

 

He will also lead a team with skills including technology, strategy and
storytelling.

 

Disney said it sees the metaverse as the next evolution of its almost
100-year-old storytelling tradition.

 

"Today, we have an opportunity to connect those universes and create an
entirely new paradigm for how audiences experience and engage with our
stories," Mr Chapek said in the memo.

 

Last week, Disney said sales at its theme parks in the US had climbed above
pre-pandemic levels.

 

It also announced that its Disney+ streaming service had added 11.8 million
subscribers in the last three months of 2021, taking the total to almost 130
million worldwide.

 

A metaverse is an online world where people can game, work and communicate
in a virtual environment, often using VR headsets.

 

It is being touted by some of the world's biggest technology companies as a
key development in the next generation of the internet.

 

The company formerly known as Facebook has made the biggest bet so far on
the metaverse.

 

Last year, Facebook changed its corporate name to Meta Platforms and said it
planned to spend more than $10bn (£7.4bn) to develop virtual reality
software and hardware.

 

Meanwhile, Microsoft has said it was adding 3D virtual avatars and
environments to its Teams chat system, as part of its push towards the
metaverse.-BBC

 

 

 

Airbnb: City travel almost at pre-pandemic level

Online accommodation booking platform Airbnb says travellers are starting to
return to cities, after staying away since the start of the pandemic.

 

Globally, the number of nights booked in cities in the last three months of
last year nearly matched 2019 levels, the lodging website said.

 

In the US, urban bookings have fully rebounded, it said.

 

The booking company reported a record $55m (£40.6m) profit for the fourth
quarter.

 

Cities were important destinations for Airbnb's business, but during the
pandemic non-urban areas have proven more popular, as people focus on
outdoor activities free of crowds.

 

Bookings in urban areas are starting to grow, however, accounting for 49% of
nights reserved in the three months to 1 January, the company said.

 

 

"While travel to top cities has not yet entirely recovered to 2019 levels,
we are seeing signs of travellers returning," it said.

 

The company also said it expected total nights booked in the first three
months of 2022 to exceed pre-pandemic levels for the first time.

 

'Biggest change to travel'

Airbnb said the pandemic-driven expansion of remote work continues to shape
its business, driving an explosion in long-term stays.

 

Nearly a quarter of nights booked in the last three months of 2021 were for
four weeks or longer, it said.

 

"Nearly two years into the pandemic, it's now clear that we are undergoing
the biggest change to travel since the advent of commercial flying," the
company said in a letter to shareholders.

 

"Remote work has untethered many people from the need to be in an office
every day. As a result, people are spreading out."

 

Domestic and shorter distance stays remain more popular than international
travel, but the San Francisco-based company said there are increasing signs
that the virus has become less of a consideration for travellers.

 

For example, the platform had fewer cancellations during the wave of Omicron
infections than during previous surges. And reservations for this summer at
the end of January were up 25% compared to 2019.

 

Revenue in the three months to 1 January rose 75% year-on-year to $1.5bn,
propelled in part by higher rates, which jumped 20% compared to last year.

 

Airbnb said it expected revenue of $1.4bn to $1.48bn in the first three
months of 2022 which is higher than analysts had forecast.

 

For 2021 overall, Airbnb reported $6bn in revenue, while losses narrowed to
$352m.

 

"Overall, 2021 has proven to be an incredible year demonstrating the
resiliency of the business," it said.

 

Shares jumped 4% in after-hours trade, after rising 6% earlier in the
day,-BBC

 

 

 

Car industry calls for electric charge watchdog

The UK car industry has called for a watchdog to oversee electric car
charging prices and the availability of charge points.

 

The growth in electric vehicles sales is outstripping the rollout of
charging points, the Society of Motor Manufacturers and Traders (SMMT) said.

 

It said a regulator is needed to monitor the market.

 

The government said it was providing £1.3bn to expand the charging network.

 

Over the decade between 2011 and 2021 the number of charge points in the UK
jumped from about 1,500 to more than 48,000, according to industry figures.

 

But between 2019 and 2021 the number of electric cars on the road increased
much faster.

 

Moreover, the charge point rollout was uneven, going faster in the south of
England than in the north, the industry body said.

 

The SMMT called on the government to set up a new regulator called
"Ofcharge" - the Office of Charging - to monitor the market.

 

Public charging points "remain critical to consumer confidence and are still
relied upon by many commercial fleets, as well as the third of British
households that do not have designated off-street parking," the SMMT added.

 

Electric car sales soar

Electric vehicles are seen as a way to cut greenhouse gas emissions from
transport, which became the largest emitting sector in the UK in 2016.

 

But while there is soaring interest in electric cars, this hasn't yet
translated into vehicles on the road.

 

In 2020, the number of battery electric cars on the road increased by 114%
to a record high of just under 200,000, while the number of plug-in hybrids
jumped 35% to just under 240,000.

 

There has also been a sharp increase in interest in second-hand electric
cars.

 

However, electric cars remain a tiny fraction of the cars on UK roads,
representing just 1.3% of the total.

 

Businesses have been leading the way with fleet purchases, but the car
industry is pushing for consumers to buy into electric cars too.

 

However, many people have concerns about electric cars, with two of the main
ones being the cost of buying a car, and whether there are enough charge
points, including for longer journeys, the car industry says.

 

Last summer MPs also raised concerns about the cost of public charging,
saying it was far more expensive than charging a car at home. Energy prices
have soared since then.

 

Electric car charging prices 'must be fair' say MPs

Mike Hawes, SMMT chief executive, called for "clear targets" and more
government support for rolling out charge points.

 

A Department for Transport spokesperson said the government was providing
more than £1.3bn "to support the continued roll-out of charge points at
homes, businesses and on residential streets across the UK, levelling up our
charge point provision while supporting the deployment of rapid charge
points on motorways and major A roads in England".

 

The government will publish its electric vehicle infrastructure plan soon,
the spokesperson said, adding: "We continue to work with local authorities
to ensure they are engaged in the transition, and are encouraging them to
make use of the on-street residential charge point scheme which last year
committed £20m for the rollout of public charge points in residential
areas."-BBC

 

 

 

 

Markets rally on hopes of Ukraine de-escalation

Global markets have rallied on hopes that military tensions over Ukraine
could ease after Russia said it was recalling some of its troops from the
country's border.

 

Exchanges in Italy and Germany climbed roughly 2%, France's CAC 40 jumped
1.8% and London's FTSE 100 gained 1%.

 

The three major US indexes also closed more than 1% higher.

 

The gains follow a sell-off on Monday after the US warned that Russia could
invade Ukraine at any time.

 

On Tuesday, US President Joe Biden said the reported troop withdrawals
"would be good" but they had not been independently confirmed. He called a
Russian attack "still very much a possibility".

 

During his remarks, US markets dipped only to spring back. The Dow Jones
Industrial Average gained 1.2%, while the S&P 500 closed up more than 1.5%
and the Nasdaq up nearly 2.6%.

 

 

The market rally comes after concerns about the conflict prompted shares to
tumble.

 

The FTSE 100 plunged 1.7% on Monday, its worst session in three weeks, led
by shares in travel companies, among the firms most exposed should Western
sanctions on Russia or a war lead to higher oil prices.

 

On Tuesday, oil prices retreated, falling more than 4% at one point.

 

In the US, aeroplane maker Boeing was one of the biggest winners on the Dow,
up more than 3%. Travel companies, such as Expedia, United Airlines and
American Airlines, helped power the rally on the S&P 500.

 

The gains came despite new data showing worse-than-expected increases in
producer prices, which could lead the Federal Reserve to move more
aggressively to combat inflation.

 

In London, AstraZeneca led the market gains, rising more than 5% after
saying it had seen positive results in trials for a drug in development,
while mining giant Evraz, which has operations in Russia, was also up more
than 4%.

 

German Chancellor Olaf Scholz and Russian President Vladimir Putin met on
Tuesday and discussed the Nord Stream 2 gas pipeline, which has been
completed but not approved to open amid stiff opposition from the US and
some European states.

 

In comments at a press conference following the meeting, Mr Scholz said
Germany was committed to ensuring that transit of gas works according to
"according to the agreements we have," he said.

 

He added: "We also want to ensure peaceful development in Europe, that there
will be no military confrontation in Ukraine. If that is the case, it will
have far-reaching consequences."-BBC

 

 

 

UK wage growth lags rising cost of living

UK wage growth continued to lag behind the rising cost of living between
October and December, figures show.

 

Wages rose, but when taking inflation into account, pay showed a 0.8% fall
from a year earlier, said the Office for National Statistics (ONS).

 

Latest figures also show that the unemployment rate fell to 4.1% while job
vacancies hit a fresh record high.

 

There are signs that these pressures might feed through to faster wage
growth in the coming months.

 

According to the ONS, employees' regular pay, excluding bonuses, grew by
3.7% between October and December from a year earlier - which is high
compared with rates seen over the last decade.

 

However, the rising cost of food, energy and household goods has pushed
inflation up by 5.4% in the 12 months to December. The ONS said real wages
in the October to December period fell by 0.8% from a year earlier.

 

The Bank of England has warned this squeeze on workers will get worse, with
inflation set to rise above 7% this year.

 

But the ONS said early estimates suggest employers are starting to push up
wages further and faster in response.

 

It said that for workers on payrolls in January, median monthly wages
increased by 6.3% compared with the same month last year, and they were
10.3% higher than before the pandemic in February 2020.

 

It added that wage rises for payrolled workers last month appeared to easily
outpace inflation in some industries, such as science, finance and
insurance, information and communication, and hotels.

 

Wages v inflation graphic

Employers are having to increase salaries as they face a continuing shortage
of workers.

 

Meanwhile the number of job vacancies between November and January hit
another record of 1.3 million, the ONS said, with most industries finding it
harder to recruit.

 

"The good news is that the UK economy is continuing to create jobs," said
Matthew Percival, director for people and skills at the CBI.

 

"The bad news is that businesses are struggling to hire and pay is failing
to keep up with inflation."

 

'Eye-watering'

Lee Powell, chief executive of GMI Construction Group, which employs 200
people in Leeds, told the BBC that the combination of inflation and skills
shortages was a "headache at the moment".

 

"In the construction industry we've seen unbelievably rapid inflation across
materials... and we're in a situation now where the demands for wage
increases are somewhat eye-watering.

 

"You'd automatically assume you could pass those prices straight on to the
developer or to the end user but it's not as easy as that."

 

The governor of the Bank of England recently sparked controversy when he
urged workers not to ask for big pay rises, to help stop inflation from
rising out of control.

 

Andrew Bailey said that while it would be "painful" for workers to accept
that prices would rise faster than their wages, he added that some
"moderation of wage rises" was needed to prevent inflation becoming
entrenched.

 

The GMB union branded the idea a "sick joke" while the government distanced
itself from the comments.

 

Earlier this month, the Bank of England raised interest rates to 0.5% in an
attempt to tame inflation.

 

Paul Dales, chief UK economist for Capital Economics, said the Bank was
likely to take a more aggressive approach to rate increases this year and
next given the economic picture.

 

"Employment has recouped the falls after the furlough scheme, the
unemployment rate has fallen to pre-Covid levels, job vacancies are at a
record high and wage growth is rising," he said.

 

"That's a recipe for more interest rate hikes, perhaps from 0.5% now to
1.25% this year and to 2% next year."

 

The latest estimates of wage increases for payrolled employees appear to
confirm the Bank of England's fear that pay rises are taking off - one of
the biggest reasons they've raised interest rates twice in a row.

 

While they are early estimates and subject to revision, they suggest that
pay in January was up by just over 10% compared with February 2020. That is
the first time we've heard of double-digit pay rises, even over two years,
in a very long time.

 

Part of the reason is the tightest labour market we've had in living memory.
Staff quit their jobs at record rates to take a better offer from another
employer. Firms that want to keep people are having to pay more to retain
them.

 

This is hard to reconcile with the more reliable but less up-to-date
quarterly figures, showing pay rises at 3.7%, lagging price inflation. But
statistical confusion will work itself out over time. Meanwhile, these
figures will do nothing to discourage the Bank of England from raising
interest rates a third time the next time its interest rate setters
meet.-BBC

 

 

 

Yuan wobbles revive worries about Asia's vulnerabilities

(Reuters) - The Chinese yuan's recoil from a near four-year high has raised
market nerves that a recent period of stability is ending, which could leave
regional peers exposed especially as U.S. interest rates start to rise.

 

A steady yuan, along with robust exports and currency reserves, has helped
shield Asia's emerging markets from the sort of exodus typically seen when
developed market interest rates rise.

 

Yet slowing economic momentum and policy easing in China, amid expectations
for as many as seven U.S. rate hikes this year, has cast a pall over the
yuan outlook, historically an ill wind for neighbours.

 

"The yuan played a key role in stabilising Asian currencies in 2021 and even
outperformed the dollar," said Claudio Piron, co-head of Asia fixed income
and FX at Bofa Securities in Singapore.

 

But the policy headwinds can drag it about 5% to 6.70 per dollar this year,
he predicts.

 

"This yuan depreciation will have a negative spillover into Asian
currencies, especially the South Korean won and Taiwan dollar."

 

Already, volatility has returned for the yuan , which suffered its heaviest
selling in seven months when it dropped sharply against the dollar on Jan.
27. The yuan is flat for the year so far, at about 6.36 per dollar.

 

A long rally in the Taiwan dollar has also paused and the South Korean won
is trending downward and under pressure.

 

"The reasons that supported the yuan despite a weak economy are fading,"
said Ken Peng, head of investment strategy in Asia at Citi Private Bank in
Hong Kong.

 

"Bond inflows have already shrunk sharply as the positive carry
disappeared," he said, and the trade surplus will probably retreat from
record levels, leaving the yuan vulnerable, he thinks, to dropping to 6.50
per dollar this year.

 

Foreign holdings of Chinese bonds rose to a record of almost $400 billion
last month, but flows have been slowing as the gap between Chinese and U.S.
10-year yields has almost halved since December. read more

 

FUNDS RETREAT

 

Analysts say a stable yuan provides a pillar of fundamental strength in the
region as it reflects strong a Chinese economy. That is seen as positive for
Asian exporters, reducing the immediate need for competitive currency
devaluation.

 

While China's central bank has vowed to keep the currency stable,
authorities have also been stressing the need to prepare for two-way
volatility and analysts expect downward pressure to intensify as U.S.
interest rates rise.

 

Previous bouts of weakness, such as a devaluation to support the economy in
2015 or its slide due to trade tensions in 2018, have typically led to
pressure on currencies including the Thai baht, Malaysian ringgit,
Indonesian rupiah and Singapore dollar.

 

"If the yuan becomes more volatile, it would likely result in reduced
foreign flows to China and likely hurt overall flows to Asia," said Mitul
Kotecha, TD Securities' emerging markets strategist in Singapore.

 

He does not expect a repeat of the regional contagion seen in 2015, as
China's outbound capital controls have since tightened, but he noted that
the Philippines and Thailand appeared most vulnerable to foreign flows
drying up.

 

So far the yuan has stopped rallying rather than fallen and the riskier
corners of the region, such as Indonesia, have been remarkably resilient - a
far cry from emerging markets' walloping in 2013 when the rupiah fell 17% in
five months.

 

Indeed, Citi's Peng sees domestic factors as more relevant than any drag
from the yuan and BofA's Piron thinks a Chinese economic recovery can
eventually provide support. Inflation is also less pressing on Asian
economies with faster growth.

 

Yet pressure could mount very quickly if the Federal Reserve starts raising
rates as fast or faster than futures markets imply, and data suggests that
the foreign equity investors left in the region already spent last month
voting with their feet.

 

January's outflows from Asia were the biggest in six months, led by $4.4
billion running out of Indian stocks. read more

 

The Thomson Reuters Trust Principles.

 

 

 

Louis Vuitton set to raise price tags this week as costs climb

(Reuters) - Louis Vuitton, LVMH's top fashion brand, will raise prices
globally on Wednesday as a result of increased manufacturing and
transportation costs, a spokesperson for the French luxury goods company in
China told Reuters.

 

Louis Vuitton, the world's biggest luxury brand, will become one of the
first big labels in the industry to hike prices widely this year to protect
its margins as costs soar.

 

The price increases will affect Louis Vuitton stores worldwide and cover
leather goods, fashion accessories and perfumes, the spokesperson said on
Tuesday. She did not give further details on the scale of the rises, beyond
saying that they would vary depending on the product.

 

 

"The price adjustment takes into account changes in production costs, raw
materials, transportation as well as inflation," the label said in a
statement given to Reuters.

 

Some bloggers on Chinese social media said the price of some models of
handbags such as Capucines and Neverfull, now priced at 46,500 yuan ($7,323)
and 12,000 yuan ($1,890) respectively, would rise by 20% or more in China,
without citing sources.

 

PurseBop, a website tracking the luxury market, cited speculation that the
increase would be between around 4% on the lower end and 15-18% on average
on the higher end.

 

Presenting record 2021 sales and profits for the fashion and leather goods
division, which is led by Vuitton and Dior, LVMH's billionaire boss Bernard
Arnault said in January the group had enough wiggle room to increase prices
in an inflationary environment but would have to be "reasonable." read more

 

Throughout the coronavirus pandemic, luxury goods companies have been taking
advantage of surging demand for high-end fashion and accessories to push
their brands even more upmarket.

 

Chanel increased prices on some of its handbags three times last year, with
the popular Classic Flap bag, currently selling at $8,200, now costing
$3,000 or nearly 60% more than before the pandemic in 2019.

 

($1 = 6.3496 Chinese yuan renminbi)

 

The Thomson Reuters Trust Principles.

 

 

 

Burger King pulls Whopper off discount menu; parent RBI to hike prices

(Reuters) - Burger King parent Restaurant Brands International Inc (QSR.TO)
said on Tuesday that it stripped its most famous sandwich, the Whopper, from
discount menus and will raise menu prices again this year as to offset
higher costs.

 

U.S.-listed shares of the company rose more than 3% after it topped results
estimates for the fourth quarter ended Dec. 31, led by soaring online sales
and better-than-expected same-store sales growth at Burger King in the
United States and Tim Hortons in Canada.

 

Restaurant chains are raising prices because they are paying higher costs
for shipping, labor, and commodities including chicken, coffee and cooking
oils amid COVID-19 related disruptions.

 

The record inflation levels and staffing disruptions due to the omicron
variant dulled profits at McDonald's Corp (MCD.N) and coffeehouse chain
Starbucks Corp (SBUX.O). read more

 

Burger King's Whopper - made from a quarter pound of grilled beef - is an
"iconic" product that has "been on this core discount platform for too
long," Restaurant Brands Chief Executive Officer Jose Cil told Reuters in an
interview.

 

The chain, which often caters to lower-income customers, removed the item
from its two for $5 deal but could offer limited discounts on the burger in
the future.

 

Burger King also said it would stop selling some less-popular menu items
altogether, including sundaes, whipped toppings and chocolate milk.

 

Cil declined to provide timelines for overall price hikes in 2022.

 

Toronto, Ontario-based Restaurant Brands reported total revenue of $1.55
billion, above estimates of $1.52 billion.

 

But U.S. comparable sales fell at Popeyes, in part because some locations
have had to reduce operations by an average of one hour due to staffing
shortages.

 

Popeyes' sales had been soaring even through much of the pandemic after the
2019 launch of its fried chicken sandwich, which was so popular that most
rivals - including McDonald's and Yum Brands Inc's (YUM.N) KFC - introduced
their own similar product.

 

Restaurant Brands reported per share earnings of 74 cents in the fourth
quarter, topping Refinitiv estimates of 69 cents.

 

The Thomson Reuters Trust Principles.

 

 

 

Starbucks faces backlash in China over police incident at store

(Reuters) - Starbucks (SBUX.O) is battling its second bout of public fury in
China in less than three months, after an incident described by the U.S.
coffee giant as a "misunderstanding" at one of its stores sparked criticism
from online users and state media.

 

The company came under scrutiny on Monday after a user on Weibo said that a
number of police officers had been eating outside a Starbucks store in the
southwestern city of Chongqing before they were told by staff to move away.

 

 

The user's description of the incident quickly went viral on the
Twitter-like platform, prompting the ruling Communist party's mouthpiece
People's Daily newspaper to issue a commentary, in which it called Starbucks
"arrogant".

 

Chinese consumers and media have become more aggressive about protecting
customer rights and monitoring the behaviour of big brands, especially from
overseas.

 

In December, Starbucks apologised and carried out inspections and staff
training across all its roughly 5,400 stores in China after a state-backed
newspaper said two of its outlets used expired ingredients. read more

 

Starbucks apologized on its Weibo account late on Monday for "inappropriate
communications," saying the whole thing was a misunderstanding.

 

But it said staff had never chased away policemen or tried to file
complaints against them.

 

It continued to face criticism online on Tuesday, with a few small companies
announcing on Douyin, the Chinese equivalent of TikTok, that they would
"boycott" Starbucks by forbidding employees from arranging meetings in or
buying drinks from the shops of the coffee chain.

 

However, Hu Xijin, a prolific commentator in China who is the former
editor-in-chief of the Global Times newspaper, urged his Weibo users to see
the Starbucks Chongqing incident as an accident and not more, adding that
Starbucks's status as a foreign brand should not subject it to more
criticism.

 

"China is a country that is open to the world," he said. "To label a mistake
as arrogance is not conducive to the bigger environment of opening-up."

 

The Thomson Reuters Trust Principles.

 

 

Fed to raise rates 25 bps in March but calls for 50 bps grow louder

(Reuters) - The U.S. Federal Reserve will kick off its tightening cycle in
March with a 25-basis-point interest rate rise, a Reuters poll of economists
found, but a growing minority say it will opt for a more aggressive
half-point move to tamp down inflation.

 

While inflation is rising across the globe, it is particularly hot in the
United States, hitting a 40-year high last month.

 

That is putting pressure on the Fed to not only raise rates from a record
low but also to reduce its nearly $9 trillion balance sheet, drastically
inflated by emergency bond purchases as the Fed resuscitated the economy
from COVID-19 pandemic damage.

 

Now that the economy has recovered its pre-pandemic level, all 84
respondents in a Reuters poll taken Feb. 7-15 expected the Fed to raise the
federal funds rate by at least 25 basis points at its upcoming March 15-16
meeting.

 

Almost a quarter of those respondents, 20, forecast a 50-basis-point move to
0.50-0.75% following debate in markets over the past week after Fed
officials discussed the merits of such a move. Rate futures are pricing in
more than a 50% likelihood of a half-point hike. read more

 

Rates were forecast to rise each quarter this year to reach 1.25-1.50% by
end-December, roughly where they were at the start of the pandemic two years
ago. One-quarter of respondents, 21 of 84, saw rates even higher by
end-2022.

 

"The risk is that at some point ... they'll shift to hiking 50 basis points,
because it's very unusual for a central bank to have a zero interest rate in
the face of the kind of news we're looking at right now," said Ethan Harris,
head of global economics research at Bank of America Securities, referring
to inflation.

 

"I do think the Fed is behind the curve. In my view, the Fed should have
started hiking last fall, and so they've got some catching up to do."

 

The Fed was also expected to start reducing its balance sheet quicker than
in the previous cycle, beginning as soon as June or July, only a few months
after the first rate hike.

 

The poll concluded the Fed would start by cutting $60 billion per month from
its portfolio with predictions in a $20 billion to $100 billion range,
according to the median of 27 responses to an additional question.

 

That follows a $120 billion-per-month purchase pace at the peak of
pandemic-related stimulus. Respondents estimated the Fed's balance sheet
would amount to $5.5 trillion to $6.5 trillion once this so-called
"quantitative tightening" concludes.

 

While that would leave the central bank's balance sheet about 30% lighter,
it would still be larger than before the pandemic, roughly $4 trillion.

 

Poll respondents also said this would not be a typical interest rate cycle.

 

Not only was it expected to be short, but the Fed is only forecast to reach
a neutral rate: one which neither stimulates nor puts the brakes on
activity.

 

Respondents put both the terminal rate and their estimated neutral rate at
the same level, 2.25% to 2.50%, according to median forecasts from
additional questions.

 

That terminal rate was expected to be reached by end-2024, marking a quick
tightening cycle by historical standards, something which comes with its own
risks.

 

"Since nobody knows where the neutral rate exactly is, the Fed could get
into restrictive territory earlier than it realizes, and that could
ultimately lead to a recession," said Philip Marey, senior U.S. strategist
at Rabobank.

 

Still, the Fed was not expected to achieve its 2% inflation target until at
least 2024.

 

The core personal consumption expenditure (PCE) price index, the Fed's
preferred inflation gauge, was forecast to clock 3.9% and 2.4% this year and
next, before falling to 2.1% in 2024.

 

Headline inflation was forecast to average 7.1% this quarter, before falling
to 2.3% by the end of next year, and average 5.0% and 2.5% in 2022 and 2023,
respectively.

 

Disruptions to economic activity following a surge in COVID-19 cases dented
growth in the final months of last year and are expected to do so as well
this quarter.

 

Growth for this quarter was downgraded for the fourth consecutive month --
to an annualized rate of 1.6%. It was expected to rebound to 3.8% next
quarter and then gradually slow.

 

Economic growth was predicted to average 3.7% and 2.5% this year and next,
respectively, largely unchanged from a January poll.

 

The Thomson Reuters Trust Principles.

 

 

 

Shell moves to sell British North Sea southern gas fields -sources

(Reuters) - Shell (SHEL.L) is preparing to launch the sale of its stakes in
two clusters of gas fields in the southern British North Sea, part of an
ongoing retreat of long-time producers from the ageing basin, industry
sources told Reuters.

 

Shell is planning to offer its 50% stake in a cluster of fields in the
Clipper hub, as well as the Leman Alpha complex, the three sources said,
adding that the assets could fetch up to $1 billion in total.

 

 

A Shell spokesperson declined to comment on its plans for the fields, which
both supply natural gas via a pipeline to the onshore Bacton gas processing
plant in eastern England.

 

Shell has in recent years sold a number of stakes in ageing fields in the
North Sea, including a $3.8 billion package of assets to Harbour Energy
(HBR.L) in 2017.

 

North Sea production has been in decline since the late 1990s, leading oil
majors to reduce their role there to focus on more prolific and profitable
business elsewhere.

 

The global transition to low-carbon and renewable energy sources has
increased the focus of top international oil companies on projects that can
produce the most oil and gas with the lowest emissions intensity, such as
large offshore fields.

 

Shell is developing new projects in the North Sea, including the Penguins
project north of the Shetland Islands as well as plans to build offshore
wind farms.

 

Its also plans to develop a new gas field, Jackdaw, in the Shearwater hub
were dealt a blow last year when the British regulator rejected development
plans on environmental grounds.

 

Shell and the regulator have since revived talks on the gas field as Britain
grapples with soaring power prices.

 

HARVEST TIME

 

Chief Executive Ben van Beurden said earlier this month that Shell wants to
sell an average of $4 billion-worth of assets per year.

 

With oil price near a 7-year high above $90 a barrel, van Beurden told
analysts that it made sense to "think harder if this is the moment to
harvest the late-life assets that are probably better off in the hands of
others".

 

Shell owns a 50% stake in the Clipper and Leman Alpha fields which were part
of a large joint venture with Exxon Mobil (XOM.N) dating back to the 1960s.
Exxon sold its British North Sea assets last year to private equity-backed
Neo.

 

The Clipper hub is located approximately 41 miles (66 kilometres) from the
Norfolk coast and can transport up to 400 million standard cubic feet of gas
a day, Shell says.

 

The Leman Alpha complex includes 5 platforms located around 43 miles (69
kilometres) off the coast.

 

The Thomson Reuters Trust Principles.

 

 

 

China courts freeze $157 mln of Evergrande assets over missed construction
payments

(Reuters) - A Chinese court has ordered the freezing of 640.4 million yuan
($101 million) in assets held by a subsidiary of China Evergrande Group
(3333.HK), according to a filing by contractor Shanghai Construction Group .

 

State-owned Shanghai Construction, which sued the Evergrande unit in the
southwestern city of Chengdu in December for overdue construction fees,
cited the Guangzhou Intermediate People's Court ruling that the assets to be
frozen will include bank deposits and real estate.

 

 

Separately, Shanghai Construction Group said last week a local court in
Guangzhou has frozen 361.5 million yuan of assets of a different Evergrande
unit in the central province of Jiangsu for overdue payments.

 

Many suppliers and contractors have launched legal actions against
Evergrande, the world's most indebted property developer with over $300
billion of liabilities, over missed or late payments.

 

 

A growing number of construction and decoration companies are also writing
off assets or issuing profit warnings as debt woes at Evergrande and other
property developers debilitate their suppliers. read more

 

To better oversee and manage the debt restructuring of Evergrande by the
authorities, all lawsuits against the developer across the country have been
centrally handled by the Guangzhou Intermediate People's Court since around
August.

 

Evergrande declined to comment on the lawsuit with Shanghai Construction
Group.

 

Company chairman Hui Ka Yan told an internal meeting earlier this month the
firm aimed to fully restore construction work across China in Feb, compared
with 93.2% at the end of last year, with a goal of delivering 600,000
apartments in 2022. read more

 

He added the firm needs to clear its debt by fully restoring construction
and sales activities and not by selling off assets on the cheap.

 

($1 = 6.3399 Chinese yuan renminbi)

 

 

 

CRYPTOVERSE-Bitcoin runs into Russian rules and regiments

(Reuters) - Bristling tensions and looming laws in Europe could offer clues
to two questions: Can bitcoin be a safe-haven asset? And can Russia emerge
as a crypto superpower?

 

The answer to the first, for now at least, is no; while fortress gold has
risen 2.3% over the past week, as Western warnings about Russian aggression
have intensified, bitcoin has lost 3%. That was worse than the 0.9% decline
of the Nasdaq Composite (.IXIC) index.

 

 

"I don't see any evidence of bitcoin being a safe haven," said Chris Weston,
head of research at Melbourne-based brokerage Pepperstone. "The Ukraine
situation with Russia is a really hard one to price, so in that situation,
you just buy crude futures."

 

Yet it's too early to dismiss the argument made by many bitcoin advocates
who say the cryptocurrency, just into its teens, is destined to be a form of
digital gold that should retain its value when riskier assets such as stocks
tumble.

 

 

While bitcoin has slipped towards levels of around $42,000 in recent days,
it hasn't surrendered all the gains made from lows of $32,950 hit on Jan.
24.

 

Some investors also point to how relatively calm trading has been, at a time
of high geopolitical tension, with Russia having massed more than 100,000
troops near Ukraine, though rejecting Western prophecies of invasion as
"hysteria".

 

Bitcoin's average 30-day volatility has fallen to 3.48%, versus its 2021
average of 4.56%, according to BuyBitcoinWorldwide's volatility index.

 

Data platform Coinglass' bitcoin Fear & Greed index, which measures market
sentiment - 0 indicates extreme fear and 100 is extreme greed - stands at
46, above the nervy 11-33 range where it had been trading since late
November.

 

Matthew Dibb, chief operating officer of Singapore-based crypto platform
Stack Funds, said he was bullish on crypto in the longer term as an
alternative asset and a hedge to world events - "But not quite yet."

 

"We are beginning to see some discorrelation between bitcoin and the
equities market, which is very nice," he added. "But while we're seeing some
traditional safe havens pop off with the Ukraine and Russia situation, we
haven't really seen that in crypto."

 

CRYPTO SUPERPOWERS

 

Meanwhile: A new law for crypto assets expected to be announced in Russia
this week could potentially shape the global scene.

 

Russia's importance for cryptocurrencies has been growing over the past year
after a ban on bitcoin mining in China, previously the world's dominant
centre for the activity, sent miners scrambling for alternatives. read more

 

Russia had become the third-largest centre for bitcoin mining in the world
as of last August, according to data from Britain's Cambridge Centre for
Alternative Finance.

 

The United States accounts for the largest share of mining, about 42.7% of
the global "hashrate" - the computing power being used by computers
connected to the bitcoin network - followed by Kazakhstan and Russia with
18.1% and 11.2% respectively.

 

Some industry watchers believe Russia might have since overtaken Kazakhstan,
where miners have contended with government internet shutdowns during unrest
this year. read more

 

It remains unclear, though, what the Russian regulations will hold.

 

Last week authorities said they were working on rules that would allow
cryptocurrency purchases to take place, but only through locally registered
and licensed companies. Industry players saw this as a positive development
after the central bank had proposed banning the use and mining of
cryptocurrencies in January.

 

Russian Deputy Finance Minister Alexei Moiseev said on Monday that ensuring
that money flows and crypto transactions could be traced was crucial,
including being able to identify users. If included in the draft law, that
may diminish one of cryptocurrencies' major selling points - their
anonymity.

 

Moiseev also told reporters that banks and exchanges, required to comply
with anti-money laundering laws, would be the only legal entry point for
crypto into the Russian market.

 

The Thomson Reuters Trust Principles.

 

 

 

Canadian dollar touches 10-day low amid Ukraine uncertainty

(Reuters) - The Canadian dollar edged lower against the greenback on Monday,
as investors weighed warnings that Russia could invade Ukraine at any time
and a major trade route between Canada and the United States reopened.

 

World shares skidded and the safe-haven U.S. dollar (.DXY) gained ground
against a basket of major currencies as the United States said Russia might
create a surprise pretext for an attack on Ukraine. read more

 

 

Still, hints by Ukraine at possible concessions to Russia helped cap the
price of oil, one of Canada's major exports. read more

 

U.S. crude prices fell 0.6% to $92.55 a barrel, while the Canadian dollar
was trading 0.1% lower at 1.2752 to the greenback, or 78.42 U.S. cents. It
touched its weakest intraday level since Feb. 4 at 1.2783.

 

North America's busiest trade link reopened for traffic late Sunday evening,
ending a six-day blockade, the Canada Border Services Agency said, after
Canadian police cleared the protesters fighting to end COVID-19
restrictions. read more

 

 

Canada's inflation report for January, due on Wednesday, could offer clues
on the outlook for Bank of Canada interest rate hikes. Money markets expect
the central bank to tighten next month for the first time since October 2018
to fight inflation.

 

Canadian government bond yields were higher across the curve, tracking the
move in U.S. Treasuries.

 

The 10-year was up 3.3 basis points at 1.904%, after touching on Friday its
highest intraday level in nearly three years at 1.961%.

 

The Thomson Reuters Trust Principles.

 

 

 

Australia's Liontown signs 5-year lithium supply deal with Tesla

(Reuters) - Australia's Liontown Resources (LTR.AX) said on Wednesday it
signed a five-year agreement with Tesla (TSLA.O) to supply lithium spodumene
concentrate to the electric carmaker, sending the lithium miner's shares up
nearly 20%.

 

Tesla will buy 100,000 dry metric tonnes (DMT) of the concentrate in the
first year starting 2024, increasing to 150,000 DMT per year in subsequent
years.

 

Lithium prices have soared in the past few years, with suppliers scrambling
to meet demand as automakers lean towards electric vehicles. The prices are
about eight times higher than they were at the start of 2021. read more

 

Liontown will supply lithium from its flagship Kathleen Valley Lithium
project in Western Australia that is expected to begin commercial production
by 2025. The supply to Tesla will account for about a third of the project's
annual production capacity.

 

Liontown already has a lithium supply deal with the battery unit of South
Korea's LG Chem (051910.KS) from the project. read more

 

Liontown shares jumped as much as 19.8% to A$1.665, their biggest intraday
jump since Sept. 13, 2021.

 

($1 = 1.3986 Australian dollars)

 

 

 

 

 

 

 

 

 

 


 


 


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.

 


 

 


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