Major International Business Headlines Brief::: 25 February 2022
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Major International Business Headlines Brief::: 25 February 2022
<https://www.nedbank.co.zw/>
ü Asian shares rise as investors assess Ukraine war
ü Putin's energy shock: The economic realities of invasion
ü Why Ukraine crisis could cause global price rises
ü Oil hits seven-year high but shares rebound on Russian war
ü Ukraine airspace closed to civilian flights
ü Explainer: Russian banks face exclusion in new round of sanctions
ü Russia should not be cut off from SWIFT at the moment - Germany's Scholz
ü Three Russian banks shrug off impact of U.S. sanctions after Ukraine
invasion
ü Alibaba reports slowest revenue growth since going public as competition
bites
ü Facebook, Twitter highlight security steps for users in Ukraine
ü Rivian 'making progress' on production ramp-up, sets market share goal
ü EXCLUSIVE Major buyers of Russian oil struggle with bank guarantees
-sources
ü Tanzania: Boards of Trustees Registration Now Goes Digital
ü Nigeria's Oil Production Sub-Optimal - Govt
ü Mastercard Foundation and Financial Sector Deepening Launch New Fund to
Revive 50,000 Micro and Small Enterprises in Uganda
<mailto:info at bulls.co.zw>
Asian shares rise as investors assess Ukraine war
Asian shares have edged higher on Friday, driven by a US rebound as more
sanctions were announced against Russia for its actions in Ukraine.
US President Joe Biden hit Russia with a wave of new measures, impeding its
ability to do business in the world's major currencies.
Tokyo's Nikkei 225 index opened 0.9% higher, while other indexes were also
in the green.
Oil prices also lowered after earlier surging past $100 (£74) a barrel.
South Korea's Kospi jumped 1.6% and the S&P/ASX 200 in Sydney was up 0.3% on
Friday.
Global share prices briefly plunged on Thursday after Russian President
Vladimir Putin declared a "special military operation" in Ukraine's Donbas
region.
Wall Street indexes traded in the red, but rebounded in late trading after
Mr Biden's unveiling of new sanctions.
The Dow Jones fell nearly 2% in early trading but a late rally in the tech
sector meant it closed 0.3% higher.
Meanwhile, UK's FTSE 100 index fell 3.9%, its biggest one-day fall since
June 2020. Germany's Dax index lost 4%.
Oil prices surged and hit their highest level for more than seven years on
Thursday, but brent crude later settled at $99.08 a barrel.
Russia is the second largest exporter of crude oil after Saudi Arabia and is
also the world's biggest exporter of natural gas.
Europe gets nearly a third of its oil and around 40% of its gas from Russia,
much of it flowing through pipelines across Ukrainian territory.
There are concerns that sanctions could constrict supplies and drive up
prices worldwide.
However, not everyone relies on Russia equally.
China gets 14% of the oil and gas that it imports from the country,
according to economists at Deutsche Bank.
"Perhaps the greatest source of spill over from the Ukraine conflict would
be the impact that conflict, and higher energy prices, would have the
European economies," they said.
"If oil prices were to rise 50%, the Euro Area would fall into recession -
we think the US might too. All Asian countries would feel the impact of that
disruption."-BBC
Putin's energy shock: The economic realities of invasion
The economics of this invasion are extremely serious.
It might sound absurd given the apocalyptic backdrop of fighting near
Chernobyl. But it really does matter, and could very plausibly herald a
1970s style energy shock. It will be felt in households up and down the
country and across the continent.
And the economic theatre is also crucial to how this war pans out.
The combination of crude oil prices above $100 and wholesale gas prices
around £3 per therm, would mean the peak in inflation heading to 8% or
higher, and, importantly, lasting at very high levels for longer.
Crippling rises in household energy bills are already happening as a result
of the existing rise in the average market gas price. It is now going still
higher. There could be another rise in average bills of the same magnitude
as is being seen now. Some analysts in the industry see the possibility of
average annual bills hitting an incredible £3,000 a year by the Autumn.
Ukraine conflict: UK sanctions target Russian banks and oligarchs
Why is Russia invading Ukraine and what does Putin want?
Euros still flow
The market hit today occurred with no actual disruption to supplies from
Gazprom through Ukraine.
Russia will not be punished for its invasion with an embargo on energy
exports, as Saddam Hussein was after Iraq invaded Kuwait in 1990. Indeed, on
some measures Russian gas exports to Europe are actually higher. The flows
of euros from Western Europe to the Kremlin for its biggest export will
continue, even as those countries decry what President Putin is doing with
that money.
Russia is clearly getting hit in the markets. It's sovereign debt is being
shunned, it's stock market is crashing, its currency has hit record lows.
The Russian Central Bank has deployed some of its $630bn war chest of
currency and gold reserves to prop up the rouble.
So is there any economic intervention here which could change the fate of
this conflict or minds in the Kremlin?
The answer is causing total economic chaos in Russia sufficient to change
its political situation, and a rethink of the wisdom of the invasion in
Moscow.
The Institute for International Finance, a think tank of the worlds biggest
banks, said the latest set of sanctions will cause bank runs in Russia and
"average Russians will feel the cost". With protests occurring in Russian
cities, and being violently suppressed by authorities, the question is
whether such chaos will be blamed on Putin's invasion, or the West. Will
other factions in and out of the Kremlin be emboldened to move on the
President?
Swift rebuttal
As in any war, the economic weapons can escalate.
Western nations could cut the Russian financial system out of the Swift
banking communications network, plunging Russia into further isolation.
But President Putin can also physically limit supplies of energy to the
West, sending energy prices stratospheric, shutting down factories in
Europe. Although this would have long term consequences for his entire
economic strategy.
This could last a long time, and plunge most of Europe into significant
recession. The consequences for diplomacy, politics and lives are concerning
enough. But the economic impact is very serious indeed.-BBC
Ukraine conflict: UK sanctions target Russian banks and oligarchs
Major Russian banks will be excluded from the UK financial system and
oligarchs have been targeted in new sanctions announced by Boris Johnson.
The prime minister told the House of Commons they were "the largest and most
severe package of economic sanctions that Russia has ever seen".
Russia's national airline Aeroflot will also be banned from landing in the
UK.
It follows Moscow's invasion of Ukraine which began with air strikes in the
early hours of Thursday morning.
Mr Johnson told MPs that Russian President Vladimir Putin was a
"bloodstained aggressor" who would "stand condemned in the eyes of the world
and of history" for invading Ukraine.
Announcing the measures, the prime minister said the UK and its allies had
"tried every avenue for diplomacy until the final hour", but he believed Mr
Putin had always been determined to attack Ukraine.
Mr Johnson said the G7 group of world leaders had agreed to work in unity to
"maximise the economic price that Putin will pay for his aggression".
He also confirmed that sanctions would be applied to Belarus for its role in
the assault on Ukraine.
Sanctions announced by the prime minister include:
All major Russian banks will have their assets frozen and be excluded from
the UK financial system. This will stop them from accessing sterling and
clearing payments through the UK. This includes a full and immediate freeze
of VTB bank
Legislation will stop major Russian companies and the state from raising
finance or borrowing money on UK markets
Asset freezes will be placed on 100 new individuals or businesses
Aeroflot will be banned from landing in the UK
There will be a suspension of dual-use export licences to cover components
which can be used for military purposes
Within days the UK will stop exports of high-tech items and oil refinery
equipment
There will be a limit on deposits Russians can make in UK bank accounts
Similar financial sanctions will be extended to Belarus for its role in the
assault on Ukraine
The UK will bring forward parts of the Economic Crime Bill before the Easter
recess
Mr Johnson said there was potential to cut Russia out from the Swift
international payment system and "nothing is off the table"
Those being targeted by sanctions include five people deemed to be part of
Mr Putin's "inner circle", the Foreign Office said in a statement issued
after Mr Johnson's announcement.
These include Mr Putin's ex-son in law Kirill Shamalov who was previously
married to his daughter Katarina and is Russia's youngest billionaire.
Other targets include Petr Fradkov, head of the recently sanctioned
Promsvyazbank and son of the former head of Russian Foreign Intelligence.
Businesses targeted include Rostec, Russia's biggest defence company,
Tactical Missile Corporation, Russia's leading supplier of air and sea
missiles, and Uralvagonzavod, one of the world's largest tank manufacturers,
the Foreign Office said.
It also said it was moving to cut off wealthy Russians' access to UK banks,
including a £50,000 limit on bank deposits.
Mr Johnson said the UK and its allies' mission was to ensure through
diplomatic, economic, and eventually military means that the "hideous and
barbarous venture of Mr Putin" ended in failure.
The prime minister chaired his second emergency Cobra committee of the day
on Thursday evening, followed by a cabinet meeting.
He told cabinet that the Ukrainian military was fighting back in "defiance
of Putin's attempts to subjugate Ukraine" and that advisers had given an
"ominous assessment" of the next few days.
Foreign Secretary Liz Truss said the UK would "not rest until Russia's
economy has been degraded and Ukraine's sovereignty and territorial
integrity restored".
The new measures expand the sanctions that were announced by the UK
government on Tuesday, which included targeting high-net worth individuals
and Russian politicians who voted to declare Donetsk and Luhansk
independent.
A number of MPs and defence experts said those measures had not gone far
enough.
On Thursday, US President Joe Biden also announced sanctions against Russia,
including against its banks and people who "personally gained from the
Kremlin's policies".
There was plenty of criticism that Western sanctions in the days leading up
to this invasion did not go far enough, fast enough.
These new measures will hit the Russian economy much harder. But there are
still potential gaps. The prime minister said sanctions will take place
against major Russian banks. But one, Sberbank, was not mentioned.
And the Ukrainian government wanted more - in particular moves to disconnect
Russia from the international payment system known as Swift. The US and the
UK back such a move, but some European countries fear it could damage their
own banks.
Suspending Russia from Swift is still under consideration, but the
hesitation is a reminder that in a globalised world all sanctions tend to
have an impact on the countries imposing them as well
And the real trouble with sanctions is they don't work quickly. They do
increase pressure, and they can do damage.
But the international community is not trying to damage the Russian economy
just for the sake of it. It wants economic pressure to force a change in
President Putin's political and military calculations.
Meanwhile, the invasion of Ukraine continues.
2px presentational grey line
Labour leader Sir Keir Starmer said he welcomed the sanctions outlined by Mr
Johnson, and pledged opposition support for further measures.
But he said there were changes that must be made in the UK.
"For too long our country has been a safe haven for money Putin and his
fellow bandits stole from the Russian people" he said.
Conservative former Foreign Secretary Jeremy Hunt said that while sanctions
are "extremely welcome" they should not only be economic and called for a
"fundamental review of our military capability".
Conservative MP Tom Tugendhat, who chairs the Foreign Affairs Committee,
urged Mr Johnson to take action against those "enabling Putin's economy" -
including individuals who sit on the boards of the businesses which finance
the Russian president's regime.
Liberal Democrat leader Sir Ed Davey said the West "cannot be complacent any
longer" and called for a reversal of proposed troop cuts to the Army.
SNP Westminster leader Ian Blackford called for the "complete economic
isolation of Russia", including "clearing up the sewer of dirty Russian
money" in London and suspending Russia from the Swift payment system.
On Thursday morning Russian forces launched an assault on Ukraine, crossing
its borders and bombing military targets near big cities.
Ukraine has announced martial law across the country, meaning the military
has taken control temporarily.
Traffic jams have built up as people attempt to flee the capital Kyiv.
Meanwhile, the Home Office has said it will allow some Ukrainian nationals
in the UK to extend their visas.
Those eligible for points-based work visas will be allowed to extend their
stay or to switch from visitor visas and seasonal agricultural workers will
have their visas automatically extended until the end of 2022.-BBC
Why Ukraine crisis could cause global price rises
Russian forces have launched a military assault on Ukraine with explosions
near major cities across the country.
Western countries have imposed sanctions designed to cripple the Russian
economy and military effort.
The conflict, as well as the economic fall-out, could have a major impact on
people around the world.
1. Energy bills, petrol and plane ticket prices could jump
The conflict has driven the oil price to its highest level in more than
seven years and future gas prices jumped by 60% in just one day.
Russia is the second-biggest exporter of crude oil, and the world's largest
natural gas exporter - which is vital to heating homes, powering planes and
filling cars with fuel.
The UK only gets 6% of its crude oil and 5% of its gas from Russia, in
comparison with the EU, which sources nearly half of its gas from the
country.
There are fears President Vladimir Putin may "weaponise" its natural
resources by reducing supplies of gas to Europe in response to sanctions. If
one country reliant on Russian supplies receives less gas, they have to
replace it, impacting the supplies of gas for other countries.
That's why British energy prices and bills are still affected in a similar
way to European ones.
Oil price chart
Consumers in the UK and in Europe were already paying high prices for energy
and fuel, with demand up following the easing of Covid restrictions.
The conflict is expected to drive these even higher.
Martin Young, an analyst at the banking group Investec, has warned that
household fuel bills in the UK could reach £3,000, while motoring groups
said average petrol prices had already hit a record high of nearly 149.5p on
Wednesday, with diesel at 152.83p.
In Germany, politicians are calling for a "national gas reserve" to be
created to shelter consumers from price shocks.
And if airlines decide to pass on the rise in costs of aviation fuel to
customers, then plane ticket prices could rise too.
2. Food prices affected
The ripple effects from the Russian invasion of Ukraine could also hit
shopping baskets around the world.
Russia and Ukraine, once dubbed "the breadbasket of Europe", export about a
quarter of the world's wheat and half of its sunflower products, like seeds
and oil. Ukraine also sells a lot of corn to countries around the world.
A wheat field in the Lugansk Region of Ukraine, once described as the
"breadbasket" of Europe.
Analysts have warned that war could impact the production of grains and even
double global wheat prices.
This could severely impact shoppers in countries like Egypt, Turkey and many
countries in North Africa in particular, which rely on wheat and corn from
the region.
More than 40% of Ukraine's wheat and corn exports went to the Middle East or
Africa last year - and disruptions to supply could affect their availability
in these areas.
The UK, by contrast, typically produces over 90% of the wheat consumed in
the country.
But Russia is also one of the world's biggest exporters of fertilisers.
Their cost has already been driven up as they were in short supply last
year, and farmers could have to pay more to source them and produce their
crops.
3. Investments could take a hit
Russian stocks crashed by as much as 45% after news emerged of the assault
on Ukraine, with banks and oil companies among the worst-affected.
It also led to steep falls on stock markets elsewhere around the world. In
Europe, the UK's FTSE 100 index fell more than 3% and Germany's Dax index
was nearly 5% lower.
European share market graphic
As the conflict develops, markets are likely to see more volatility.
Many people's initial reaction to "the markets" is that they are not
directly affected, because they do not invest money in stocks and shares.
Yet there are millions of people with a pension - either private or through
work - whose savings are invested in the stock market.
The value of their savings pot is influenced by the performance of these
investments.
Pension savers mostly let experts choose where to invest this money to help
it grow. Widespread falls in share prices, such as those triggered on
Thursday, are likely to be bad news for pension savers.
In a bid to protect their investments, some investors or savers might look
to move their money or assets to traditional "safe havens", like gold.
But pension savings, like any investments, are usually a long-term bet and
advisers say it's important not to panic about short-term movements up or
down.
4. Cost of living increase
Households in the US and the UK are already being squeezed by the rising
cost of living, while wages struggle to keep up.
Inflation, which measures how fast the cost of living rises over time, hit
7.5% in January in the US - the highest level seen since February 1982. It
was driven in part by food and energy prices.
If supplies of energy, food, or other commodities like metals are strained
by the Russia-Ukraine conflict, prices could be pushed up even further.
Shoppers in Eastern Market, Washington DC, in Washington DC, USA, 10
December 2021. An inflation report released 10 December by the US Labour
Department shows inflation rose at its highest rate in 40 years.
Households in the US and the UK have been affected by the rising cost of
living.
The Centre for Economics and Business Research think-tank said that
inflation in major Western economies could hit close to 10%.
That could encourage central banks such as the US Federal Reserve or the
Bank of England to increase interest rates, so borrowing money becomes more
expensive.
The idea is that when borrowing is more expensive, people will have less
money to spend. As a result, they will buy fewer things, and prices will
stop rising as fast.
In the UK, about 2.2 million home-owners with mortgages linked to the Bank
of England's base rate would see repayments go up, for example, putting
further pressure on household budgets.
5. Cars could be more expensive
Russia is one of the world's biggest suppliers of metals used in car
manufacturing, such as nickel or palladium.
Nickel, for example, is used in lithium-iron batteries, and palladium in
catalytic converters.
The car industry is already reeling from a chip shortage and supply chain
problems during the pandemic. In the UK, one in five nearly-new cars are now
selling at more than their brand-new equivalents, as their values have been
pushed up, according to the Auto Trader website.
If Russia decided to cut off supplies of these metals in retaliation to
sanctions, those supply problems could worsen with car firms having to find
alternative sources and prices likely to rise as a result.
Countries such as South Africa and Zimbabwe also produce substantial amounts
of palladium, but demand has been increasing.
Russia is also home to manufacturing hubs for brands like Stellantis,
Volkswagen and Toyota. Factories in the region could struggle to operate
under sanctions, potentially hampering production and the availability of
new cars.-BBC
Oil hits seven-year high but shares rebound on Russian war
Oil prices surged past $100 (£74) a barrel to hit their highest level for
more than seven years after Russia launched an invasion of Ukraine.
Global shares fell on worries of the possible impact of the conflict, but US
tech stocks rebounded in late trading.
Russia is the second biggest exporter of crude oil, and is also the world's
largest natural gas exporter.
Brent crude eased from $105 to $98 a barrel,but not before UK petrol prices
had hit another record high.
The UK imports 6% of its crude oil and 5% of its gas from Russia, but there
are concerns sanctions could constrict supplies and drive up prices
worldwide. The price of UK natural gas futures soared nearly 60% on
Thursday.
UK consumers are already paying a high price for energy and fuel, with
demand surging following the easing of Covid restrictions.
Russia launches military operation in Ukraine
What sanctions are being imposed on Russia?
Both the RAC and AA motoring groups said average petrol prices hit a record
high of nearly 149.5p on Wednesday, with diesel at 152.83p.
The RAC said that if the oil price reached $110 a barrel the average price
of petrol could hit £1.55 a litre.
If prices do get this high it will "cause untold financial difficulties for
many people who depend on their cars for getting to work and running their
lives as it would sky rocket the cost of a full tank to £85", said the RAC's
Simon Williams.
Petrol price movements in the UK are mainly determined by the price of crude
oil, and the exchange rate between the dollar and the pound, because crude
oil is traded in dollars.
The price of crude oil is up, and the pound is down against the dollar.
Oil price chart
News of Russia's actions led to steep falls on global stock markets. In
Europe, the UK's FTSE 100 index fell more 3.9%, its biggest one-day fall
since June 2020. Germany's Dax index lost 4%.
In the US, the Dow Jones fell nearly 2% in early trading but a late rally in
the tech sector meant in ended 0.3% higher. The tech-heavy Nasdaq index
climbed 3.3% and the S&P 500 closed trading up 1.5%.
Shares in Netflix and Microsoft were both up more than 5%, respectively.
After talking with allies from the G7, US President Biden announced measures
to impede Russia's ability to do business in the world's major currencies,
along with sanctions against banks and state-owned companies.
Wall Street which traded in the red at the start of the day on news of
Russia's invasion of Ukraine, hit session highs in the wake of Biden's
comments.
The Moscow Stock Exchange saw trading suspended briefly, but when it
reopened the index fell by more than a third. On the currency markets, the
rouble sank to a record low against the US dollar.
The price of gold - which is considered a haven asset in times of
uncertainty - jumped 3% to its highest price in more than a year.
Russ Mould, investment director at AJ Bell, said the oil price surge "was
terrible news for businesses and consumers" because "it will serve to
further stoke inflation".
"Not only will energy bills keep going up, but food prices look set to jump
even higher. Ukraine and Russia are both big food suppliers and any
disruption to supplies will force buyers to seek alternative sources, which
could jack up prices."
The UK's cost of living is rising at its fastest rate in 30 years, as
energy, fuel and food prices continued to soar, squeezing household budgets.
Meanwhile, Mr Mould said the fall in the FTSE 100 "was bad news for the
millions of savers and investors who have money in UK equities".
Europe gets nearly a third of its oil and around 40% of its gas from Russia,
much of it flowing through pipelines across Ukrainian territory. Small
wonder then that prices are shooting up.
Brent crude oil has gone above $100 a barrel, while prices for gas on
wholesale markets - where domestic suppliers buy what they need - are up
sharply as well.
Supplies from Russia do not appear to have been affected - yet. But the fear
that they will be, and that there could be a scramble for other resources,
is pushing up costs.
Stock markets across Europe are tumbling, as investors fret about the
potential economic impact of high energy prices and the potential for much
wider sanctions as well.
And as for Russian shares, a graph showing the performance of the MOEX stock
exchange in Moscow looks like a cliff in the Ural mountains today.
In response to Russia's military action, the UK, US and European Union are
set to put more sanctions on Russia.
There are fears that sanctions, along with the impact of the invasion, could
disrupt the supply of agricultural products and raw materials from Ukraine
and Russia.
The two countries combined are major wheat suppliers, producing 29% of
global exports, most of which travels through ports in the Black Sea.
Russia also produces aluminium, cobalt, copper, diamonds, fertiliser, gold,
nickel, palladium, platinum, titanium and steel.
The European Council said it would "impose massive and severe consequences
on Russia for its actions".
Ursula von der Leyen, President of the European Commission, said the
sanctions "will target strategic sectors of the Russian economy by blocking
their access to technologies and markets that are key for Russia".
Russian assets in the EU will be frozen and Russian banks' access to
European financial markets will be stopped, she said.
"These sanctions are designed to take a heavy toll on the Kremlin's
interests and their ability to finance war," she added.
The biggest economic hit would come from disconnecting Russia's banking
system from the international Swift payment system, but that could also
affect the US and European economies.
The US and EU have already imposed a series of sanctions in response to Mr
Putin's actions against Ukraine. The UK has frozen the assets of five banks
and three Russian billionaires, who have also been hit with travel bans.
Meanwhile Germany has frozen final approval for the Nord Stream 2 gas
pipeline, which connects the country with Russia and was set to boost
Russian gas exports to the EU.-BBC
Ukraine airspace closed to civilian flights
Ukraine has closed its airspace to civilian flights after Russia began
military action in the country.
Ukraine cited a high risk to flight safety due to the use of weapons and
military equipment.
Moldova also said it was closing its airspace and Belarus shut part of its
airspace.
The European Union Aviation Safety Agency warned of safety risks in flying
in airspace near to Ukraine's borders, including in Russia.
"There is a risk of both intentional targeting and misidentification of
civil aircraft," the regulator said.
"The presence and possible use of a wide range of ground and airborne
warfare systems poses a high risk for civil flights operating at all
altitudes and flight levels."
Aircraft flying to or from UK airports have been ordered to avoid Ukraine's
airspace by the Transport Secretary Grant Shapps.
British citizens were advised to leave the country on Tuesday.
Mr Shapps tweeted: "I've instructed UK—CAA (the Civil Aviation Authority) to
ensure airlines avoid Ukraine airspace to keep passengers and crew safe.
"We continue to stand with the people of Ukraine and work with our
international partners to respond to this act of aggression."
Wizz Air and Ryanair, who were still flying to the Ukraine from the UK, said
they had suspended flights.
Wizz Air said it was working to evacuate its crew, their families and four
aircraft currently in Ukraine.
Aviation analytics firm Cirium said that 155 flights had been cancelled to
and from Ukraine on Thursday.
MH17 Flight
In 2014, a missile brought down passenger plane MH17 in Ukraine airspace,
killing all 298 people on board. It was en route from Amsterdam to Kuala
Lumpur.
It came amid heavy fighting between Ukrainian forces and pro-Russian
separatists in the Donbass region, who had just declared independence.
International investigators tracked the missile that was used to Russia,
which has denied any involvement.-BBC
Explainer: Russian banks face exclusion in new round of sanctions
(Reuters) - Britain and the United States targeted Russian banks on Thursday
as part of a new package of sanctions following Moscow's invasion of
Ukraine.
The European Union is expected to follow suit.
Here is a rundown of how sanctions announced impact banks and investors:
WHAT HAS BEEN ANNOUNCED SO FAR?
The U.S. Treasury Department said it was targeting the "core infrastructure"
of the Russian financial system, sanctioning two of the country's largest
banks - state-backed Sberbank (SBER.MM) and VTB (VTBR.MM). Also on the list
of sanctions are Otkritie, Sovcombank and Novikombank and some senior
executives at state-owned banks.
U.S. banks must sever their correspondent banking ties - which allow banks
to make payments between one another and move money around the globe - with
Russia's largest lender, Sberbank, within 30 days.
Officials in Washington also wielded the U.S. government's most powerful
sanctioning tool, adding VTB, Otkritie, Novikombank and Sovcombank to the
Specially Designated Nationals (SDN) list. The move effectively kicks the
banks out of the U.S. financial system, bans their trade with Americans, and
freezes their U.S. assets. read more
The U.S. sanctions also target two Belarusian state-owned banks --
Belinvestbank and Bank Dabrabyt -- over that country's support for Moscow's
attack.
The U.S. sanctions came soon after the British government said it would
impose an asset freeze on all major Russian banks, including VTB, and stop
major Russian companies from raising finance in Britain.
Russian banks would be cut off from sterling markets and clearing payments,
Johnson said.
Britain also announced asset freezes and travel bans on members of Russia's
political and financial elite -- including those who have long enjoyed
high-rolling lifestyles in London.
More than 100 individuals, entities and subsidiaries will ultimately be
sanctioned, the government said.
Britain had earlier imposed sanctions on just three billionaires with close
links to Russian President Vladimir Putin and five relatively small lenders.
read more
European foreign ministers earlier in the week agreed to sanction 27
individuals and entities, including banks financing Russian decision-makers
and operations in the breakaway territories in Ukraine, but not the biggest
lenders.
Washington had imposed sanctions on Promsvyazbank and VEB bank.
The United States had also ramped up prohibitions on Russian sovereign debt,
which U.S. President Joe Biden said would cut the Russian government off
from Western financing. read more
WHAT MIGHT COME NEXT?
Russia's large banks are deeply integrated into the global financial system,
meaning any sanctions on the biggest institutions could be felt far beyond
its borders.
The U.S. Treasury said Thursday's sanctions would disrupt billions of
dollars worth of daily foreign exchange transactions conducted by Russian
financial institutions. Overall, these institutions conduct about $46
billion worth of forex transactions, 80% of which are in dollars. "The vast
majority of those transactions will now be disrupted," it said.
The sanctions target nearly 80% of all banking assets in Russia.
Sberbank said that it was prepared for any developments. read more
VTB said it had prepared for the most severe scenario. "We have worked
through several plans to counter the sanctions in ways which minimize the
negative consequences for our clients," it said in a statement.
Sovcombank, Otkritie and Novikombank did not immediately reply to requests
for comment. The Russian embassy in the United States also did not
immediately reply to a request for comment.
The new sanctions European Union leaders are preparing include freezing
Russia's assets, halting its banks' access to financial markets and
targeting "Kremlin interests". read more
WHAT WOULD HIT HARDEST?
What banks and Western creditors fear most is that Russia is banned from the
global payment system, SWIFT, which is used by more than 11,000 financial
institutions in over 200 countries. read more
Such a move would hit Russian banks hard but the consequences are complex.
Banning SWIFT would make it tough for European creditors to get their money
back. read more
Britain's Johnson said he intended to work with allies to shut off Russia's
access to SWIFT.
But several EU sources earlier on Thursday said that locking Russia out of
SWIFT was unlikely to be agreed at this stage.
Analysts said Russian institutions are better able to cope with sanctions
than eight years earlier, although that does not mean they would not hurt.
The Institute of International Finance, the largest international banking
group, said U.S. sanctions on Russia will have a sizeable impact on Russia's
economy and citizens and could cause a recession.
WHICH FOREIGN BANKS ARE MOST EXPOSED?
Many foreign banks have significantly reduced their exposure to Russia since
2014 but several Western banks have been involved in deals and have other
relationships.
There were big falls in shares of European banks on Thursday, with an index
of European banking stocks (.SX7P) closing down 8.1%.
Banks with significant operations in Russia were particularly hard hit, with
Austria's Raiffeisen Bank International (RBIV.VI) down 23% and France's
Societe Generale (SOGN.PA) losing 12%.
Italian and French banks each had outstanding claims of some $25 billion on
Russia in the third quarter of 2021, based on Bank of International
Settlement figures.
Austrian banks had $17.5 billion. That compares with $14.7 billion for the
United States.
The Thomson Reuters Trust Principles.
Russia should not be cut off from SWIFT at the moment - Germany's Scholz
(Reuters) - Cutting off Russia from the SWIFT global interbank payment
system should not be part of the second EU sanctions package against Russia
that EU leaders will decide upon at a meeting on Thursday in Brussels,
German Chancellor Olaf Scholz said.
"It is very important that we agree those measures that have been prepared -
and keep everything else for a situation where it may be necessary to go
beyond that," Scholz told reporters, responding to a question on SWIFT, as
he arrived to an emergency summit set to discuss Russia's invasion of
Ukraine.
The Thomson Reuters Trust Principles.
Asian shares rebound but markets eye long-term Russia-Ukraine risk
(Reuters) - Asian markets rebounded on Friday following Wall Street's
surprising overnight reversal, as investors weighed the longer-term impact
of tough Western sanctions against Russia after it
unleashed troops, tanks and missiles on Ukraine.
European stock markets looked set to follow Asia higher even as Russia
pressed its attacks and global condemnation grew, with FTSE futures adding
0.78%, European futures up 2.2% and German stock market DAX futures rising
1.56%.
But U.S. share futures slipped in Asian trade, with S&P500 e-mini futures
losing 0.61% and Nasdaq futures down 0.92%.
Some analysts said the sanctions by the United States, Europe and a number
of other countries were not as strong as markets had feared.
While Western nations redoubled their efforts to crimp Russia's ability to
do business -- freezing bank assets and cutting off state-owned enterprises
-- they stopped short of disconnecting Russia from the SWIFT international
banking system or targeting its oil and gas exports, which some analysts
said had helped markets to recover. read more
"The limits to the economic pain that the 'West' was prepared to tolerate to
support Ukraine and punish Russia have been revealed within 24 hours of
Russia's offensive beginning," Jeffrey Halley, senior market analyst at
OANDA, said in a note.
"The Russian offensive has occurred in a time of already high inflation and
commodity shortages globally, and the West has blinked immediately. The
process of throwing Ukraine under the geopolitical bus has begun. Markets
clearly felt the same way, that this is the worst it can get...Thereafter,
the power of buy-the-dip proved irresistible."
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)
was up 0.57% by midday, Shanghai's composite index (.SSEC) was up 0.57% and
Japan's Nikkei (.N225) was up 1.27%. South Korea's benchmark KOSPI index
added 1.01%, recovering from a decline on Thursday.
Hong Kong's Hang Seng index and Australian shares fell slightly, 0.44% and
0.03% respectively, after a strong start.
Investors rediscovered their risk appetite overnight after some initial
sharp losses, with major U.S. indices posting gains, led by tech stocks.
But some analysts worry any rallies might be fleeting.
"Biden's sanctions and reluctance to pour troops in is providing some
relief. But this conflict is going to be a protracted issue and add to
global inflationary pressures that will keep central banks on track for
tightening," said Kyle Rodda, analyst at IG Markets in Melbourne.
"It's okay for now, but in the long-term the market will be tracking to the
downside," he said.
Oil prices surged again on worries about supply disruptions, with Brent
crude rising 2% to $101.80 a barrel, while U.S. West Texas Intermediate
(WTI) crude also rose 2.71% to $95.53, although both benchmarks were off
their highs.
Safe haven gold inched higher 0.57% to $1,913 an ounce after easing back
from a multi-month high of $1,973.96 that it hit on Thursday.
The yield on 10-year U.S. Treasuries was at 1.95% after an initial slide to
1.84% on Thursday, its biggest daily drop since late November.
The U.S. dollar index , which measures the greenback against a basket of
major currencies, eased 0.23% to 96.87, having risen on Thursday to levels
last seen during the first wave of the coronavirus pandemic. The Russian
rouble rose again and was at 85.52 against the dollar, clawing back from a
record low of 89.986.
Ukrainian President Volodymyr Zelenskiy said late on Thursday a new iron
curtain was descending over Europe.
Ukrainian soldiers battled Russian troops as they poured in from three sides
while about 100,000 people fled their homes, according to the United
Nations, many hunkering down in basements and subway stations to escape
shelling. Ukrainian authorities said 137 people had been killed on the first
day of fighting. read more
On Thursday, the Dow Jones Industrial Average (.DJI) closed up 92.07 points,
or 0.28%, at 33,223.83 while the S&P 500 (.SPX) gained 63.2 points, or
1.50%, to 4,288.7 and the Nasdaq Composite (.IXIC) added 436.10 points, or
3.34%, to 13,473.59.
The Thomson Reuters Trust Principles.
Three Russian banks shrug off impact of U.S. sanctions after Ukraine
invasion
(Reuters) - Three Russian banks including the country's biggest, Sberbank
(SBER.MM), on Friday played down the impact of sanctions imposed on them by
the United States after Russia's invasion of Ukraine and said they were
continuing to work normally.
The U.S. Treasury on Thursday said U.S. banks must sever their correspondent
banking ties with Sberbank within 30 days, and Britain said it would impose
asset freezes against all major Russian banks.
Russia's central bank said it would provide any support needed for
sanctions-hit banks and was ready to use additional tools to maintain their
stability and protect clients. read more
Sberbank said it was studying the implications of the sanctions but there
were no restrictions on withdrawing or depositing roubles and foreign
currencies.
Gazprombank issued a similar statement saying it was serving retail and
corporate clients as normal and they would have continuous access to funds
and services.
It said a U.S. move to ban it from raising debt of more than 14 days
maturity on the U.S. capital market was "non-blocking" and did not affect
current operations.
Alfa-Bank, the country's biggest private bank, said it was blocked from
issuing new eurobonds or placing share issues, but the share restriction had
no practical effect because it is not a public company.
The Thomson Reuters Trust Principles.
Alibaba reports slowest revenue growth since going public as competition
bites
(Reuters) - Chinese e-commerce giant Alibaba Group Holding Ltd (9988.HK),
reported on Thursday its slowest quarterly revenue growth since going public
in 2014, hit by a drop in sales at its core business segment and
intensifying competition.
The slowing Chinese economy has also taken a toll on the company as
consumers cut back discretionary spending.
Alibaba said group revenue rose about 10% in October-December 2021 to 242.6
billion yuan ($38.37 billion), marking the first time quarterly sales growth
has fallen below 20%.
Analysts on average had expected revenue of 246.37 billion yuan, according
to Refinitiv data.
Customer management revenue, a key metric which tracks how much money
merchants spend on ads and promotions on Alibaba's sites, fell 1%
year-on-year.
That marks the first time revenue for the segment, which made up 41% of
Alibaba's total revenue, has decreased since the company's IPO.
Speaking on an investor call, deputy CFO Toby Xu said the drop was caused in
part by lowering merchant fees amid the slowing economy.
During China's annual Singles' Day promotional event last November, the
company recorded gross merchandise value growth of 8.5%, a record low.
Alibaba's shares were down about 3% in New York before the opening bell.
They fell about 7% after the results were announced, tracking losses in
global shares after Russia launched an all-out invasion of Ukraine.
Alibaba is also facing intensifying pressure from rivals like
ByteDance-owned Douyin and Kuaishou, which have capitalized on the booming
trend of livestreaming e-commerce.
"Merchants now have to allocate their advertising dollars to different
platforms," said Vinci Zhang, who tracks China's e-commerce sector at
research firm Pacific Epoch.
"In the past, if you were an apparel merchant, maybe you would allocate 100%
to Alibaba, but now a percentage of that goes to the short video players."
Ant Group, Alibaba's fintech affiliate, reported a profit of about 17.6
billion yuan for the quarter ended September, according to Alibaba's filings
on Thursday, compared with 15 billion yuan a year ago.
Alibaba reports its profit from Ant one quarter in arrears.
Ant has been subjected to a sweeping restructuring by China, which derailed
its $37 billion initial public offering in late 2020.
For the nine months ending in December, the company purchased roughly $7.7
billion worth of shares.
Fiscal third quarter revenue for the company's cloud business grew 20%
year-on-year to hit 19.5 billion yuan ($3.08 billion), but adjusted core
earnings (EBITDA) for the unit declined 66% sequentially from the previous
quarter.
"It seems like Alibaba is finding it difficult to maintain the growth
trajectory in most markets including the cloud business," said Oshadhi
Kumarasiri, an analyst at Lightstream Research
Quarterly net income attributable to shareholders slumped to 20.43 billion
yuan from 79.43 billion a year earlier.
Once Asia's biggest listed company, Alibaba has long given up its crown to
Taiwanese chipmaker TSMC , and even fallen behind local rival Tencent
(0700.HK) and beverage maker Kweichow Moutai (600519.SS).
The company's U.S.-listed shares have lost roughly half their value in the
past 12 months amid Beijing's regulatory crackdown on certain industries.
(This story has been refiled to correct first name in eleventh paragraph
from Vincy to Vinci)
($1 = 6.3226 Chinese yuan renminbi)
The Thomson Reuters Trust Principles.
Facebook, Twitter highlight security steps for users in Ukraine
(Reuters) - Facebook owner Meta Platforms Inc (FB.O) has set up a special
operations center to monitor the conflict in Ukraine, and it launched a
feature so users in the country can lock their social media profiles for
security, a company official said in Twitter posts on Thursday.
Twitter Inc (TWTR.N) on Wednesday posted tips on how users can secure their
accounts against hacking, make sure their tweets are private and deactivate
their accounts. The company tweeted the safety tips in English, Russian and
Ukrainian.
Both social media platforms are often used by political activists and
researchers to disseminate information during times of crisis. The Russian
invasion of Ukraine on Thursday also raised concerns about the spread of
disinformation about the conflict on social media.
With one click, users in Ukraine can lock their profile to prevent users who
are not their friends from downloading or sharing their profile picture, or
seeing posts on their timeline, Nathaniel Gleicher, Facebook's head of
security policy, said on Twitter.
On Wednesday, Twitter also shared information on how users can deactivate
their account.
As the conflict in Ukraine escalated on Thursday, social media users took to
platforms like TikTok, Snapchat and Twitter to post videos of evacuation
lines, helicopters in the sky and anti-war protests in Russia.
On short-form video app TikTok, the hashtags "Russia" and "Ukraine" had 37.2
billion and 8.5 billion views, respectively.
The Thomson Reuters Trust Principles.
Rivian 'making progress' on production ramp-up, sets market share goal
(Reuters) - Rivian Automotive (RIVN.O) is "making progress" in the increase
of production for electric vehicles at its Normal, Illinois, assembly plant
and is aiming to take 10% share in the EV market by 2030, Chief Executive
Officer R.J. Scaringe said on Thursday.
"We're absolutely making progress," he said during a Wolfe Research
conference of the push to increase vehicle production. "The plant is
starting to ramp nicely."
Scaringe said Rivian, whose shares closed up 10.7% at $63.71, idled the
plant for the first 10 days of January to make changes on the production
lines in a move to boost output.
Scaringe, responding to a question about how big Rivian could become by
2030, said the company had the brand position "to build out a portfolio ...
to allow us to really work toward building a position of 10% market share
within the EV space."
He called the global semiconductor chip shortage the "most painful"
constraint in the push to build production. The California-based startup
produced 1,015 vehicles last year, coming up short of its target of 1,200
due to supply-chain constraints. read more
Scaringe said Rivian had replaced some chipsets in certain parts with other
chipsets that are easier to get. He said the global shortage would be a
factor through the rest of the year.
Rivian's stock slumped after it outlined during its first quarterly earnings
report as a public company its struggles with the manufacturing of its R1T
pickup and R1S SUV. It also has a contract to build 100,000 electric
delivery vans by 2025 for Amazon.com , which has a 20% stake in Rivian. read
more
Back in December, Scaringe pegged production challenges to global
supply-chain constraints, the COVID-19 pandemic, a tight labor market and
short-term issues around building electric battery modules. read more
Scaringe said Thursday Rivian was building a pilot line for in-house
production of battery cell production and also plans to co-invest with a
supplier on production as well. Rivian's cells are currently supplied by
Samsung SDI (006400.KS). He also said automakers will need to work on
securing critical battery materials like lithium and nickel.
"It's not a choice. It's a requirement," he said.
The Thomson Reuters Trust Principles.
EXCLUSIVE Major buyers of Russian oil struggle with bank guarantees -sources
(Reuters) - The global oil market was thrown into chaos on Thursday after
Russia invaded Ukraine, with top buyers of Russian oil struggling to secure
guarantees at Western banks or find ships to take crude from one of the
world's largest producers.
At least three major buyers of Russian oil have been unable to open letters
of credit from Western banks to cover purchases on Thursday, four trading
sources said, citing market uncertainty after the Russian invasion.
Russia produces every 10th barrel in the world and oil prices jumped to
above $105 per barrel on Thursday, their highest since 2014, due to fears of
disruptions. [O/R]
In the Black Sea, a Turkish-owned ship was hit by a bomb off the coast of
Ukraine's port city Odessa, prompting shipping companies to avoid calling at
Black Sea ports. read more
Greece urgently recommended all Greek ships immediately leave Ukraine and
Russia territorial waters in the Black Sea, ship brokers and a senior Greek
maritime ministry official said.
The oil market is already suffering from tight supplies due to years of low
investment and amid booming demand as coronavirus pandemic-linked
restrictions ease around the world.
"Banks are not willing to open LCs for the moment so it is a bit of a
standoff," one of the sources said. He asked not to be named due to the
sensitivity of the issue.
Letters of credit from the bank of the buyer are standard practice in
commodities trading and guarantee the seller's bank that payment will be
made in full and on time.
Top Russian oil buyers include Western oil majors such as BP and Shell
(SHEL.L), ENI , TotalEnergies (TTEF.PA), Equinor (EQNR.OL), Chevron (CVX.N)
and Exxon Mobil (XOM.N) and trading houses such as Vitol, Glencore (GLEN.L),
Trafigura, Gunvor and Mercuria.
The sources did not name which banks refused to issue LCs.
The West has begun to roll out sanctions against Russia for the invasion,
which could potentially include cutting Russia off the SWIFT financial
transaction system.
But that would also have severe implications for the western economy as it
could disrupt exports of much-needed commodities amid galloping inflation.
And analysts have warned that one unintended effect of sanctions could be
that some parties forgo transactions.
Washington has tried to dampen worries about sanctions on Russian banks
gumming up energy transactions. read more
U.S. President Joe Biden told reporters at the White House, "Our sanctions
package, we specifically designed to allow energy payments to continue."
Russia exports around 4-5 million barrels per day (bpd) of crude and another
2-3 million bpd of refined products. China, the European Union, South Korea,
India and Japan are its main buyers.
Some traders spoke of the Iranian syndrome, when major western institutions
exercised restraint and caution before sanctions have been even imposed for
the fear of transactions potentially breaching future regulations.
"We look at all deals case by case. But no hard stop," a senior executive at
a major European bank said, indicating a slowdown for Russian oil and
commodity deals.
Most top Western banks are active in financing oil and commodities and issue
LCs.
It was unclear to what extent the lack of letters of credit could disrupt
Russian exports, with some traders saying it would take at least several
days for companies and banks to figure out the new legal environment.
Three trading firms, Glencore, Trafigura and Litasco, struggled to place
100,000-tonne Urals crude cargoes loading in mid-March from Russia's Baltic
ports as prices dropped to their lowest level on record in the post-Soviet
period, traders said and Refinitiv Eikon data showed.
Meanwhile, shipping rates to load at Russian ports and discharge in northern
Europe have tripled in one day to World Scale 300, or about $2.3 million per
ship, from World Scale 100, as many ship owners now refuse to call at
Russian ports.
"Some 90% of ship owners are telling us they will sit and assess the
situation," a ship broker said.
"We’ve had one owner saying they will not work with Russian counterparts."
One tanker, the Delta Sailor, was fixed at World Scale 300 to load at
Russian Baltic oil ports on Feb. 28 to March 1 to sail to northwest Europe.
Earlier in the day, the Minerva Helen was similarly booked at short notice
to load from the same area at over World Scale 200.
The Thomson Reuters Trust Principles.
Tanzania: Boards of Trustees Registration Now Goes Digital
THE Registration, Insolvency and Trusteeship Agency (RITA) has designed a
system that enables registration of boards of trustees to be done
electronically.
The move will ease registration of the boards of trustees, whereby they can
now register with RITA from any part of the country without necessarily
visiting the agency's offices.
Designing of the electronic system is part of huge improvements aimed at
increasing efficiency in provision of services to citizens, especially
bringing services closer to those living in rural areas.
According to a statement undersigned by RITA's Marketing and Communications
Manager, Josephat Kimaro, the system has been connected to E-huduma system
which is available on the agency's website.
One of the benefits is that it makes the agency get real-time information of
all institutions it has registered, since the trustees will be able to lodge
their information all the time at their workplaces.
"Before electronic system, all institutions were supposed to go to the
agency's headquarters in Dar es Salaam for registration and get other
services-a situation which caused inconveniences and in turn increased costs
of running them, read the statement.
It further noted that the use of the new system will enable RITA to get
right information of all its institutions, and thus making the government to
have high control and ensuring that they implement their duties as per
objectives.-Daily News.
Nigeria's Oil Production Sub-Optimal - Govt
The federal government yesterday admitted that the country's oil production
level has remained sub-optimal for now, stating that it expects to fully
meet its Organisation of Petroleum Exporting Countries (OPEC) quota by the
end of 2022.
The Minister of State, Petroleum Resources, Mr Timipre Sylva, said this
during a briefing in Abuja yesterday, to announce the country's expectations
during the upcoming Nigeria International Energy Summit (NIES) scheduled to
commence next week.
The ceremony is a federal government official energy industry event, hosted
by the ministry of petroleum resources and all its parastatals, including
the Nigerian National Petroleum Corporation (NNPC) and the Nigerian Content
Development and Monitoring Board (NCDMB).
Other co-hosts include: The Nigerian Upstream Petroleum Regulatory
Commission (NURPC), Nigerian Midstream and Downstream Petroleum Regulatory
Authority (NMDPRA), Petroleum Technology Development Fund (PTDF) and the
Petroleum Training Institute (PTI).
The minister reiterated that Nigeria as a country is not always happy when
oil prices go up, but noted that the key industry players were doing
everything to ramp up production.
Stating that the summit may not boost oil production in the short term,
Sylva assured that once Nigeria's production issues are fixed and the
country begins refining its own products , then it will begin to fully enjoy
high oil prices.
"I don't know how the summit is going to boost our production, but I can
assure you that we're doing everything to ensure we meet our production
quota. Already, our production is not where it was a few months ago.
"We are beginning to climb gradually. And we are hoping that by the end of
this year, we would have completely regained production and meet our OPEC
quota. That is the timeline.
"A lot is going on and then we are not happy at all that we're not able to
take advantage of the high prices today as you can see. So, it is our loss.
We are doing everything to ensure that we're able to bring back our
production," he noted.
According to the minister, another reason not to celebrate when prices go
high is that there are other competing producers, for example, the shale
producers in America, who will take advantage and take the market share of
crude oil producers.
"If the price is at a certain level, it will not be profitable for them to
produce their shale. So once the oil prices go up to a certain point, you're
encouraging a lot of production that will otherwise not be in the market.
"So we are not happy when prices go to a certain level. We will believe that
prices should be at a certain point, which will be optimal for us, but
sub-optimal for the shale producers.
"That's why we like to have that balance, but here in Nigeria as well, you
know that we are right now a net importer of petroleum products. And when
the prices of crude goes up, it also affects the price of petroleum
products.
"So for us, we are net importers. It's also not very good for us. But of
course, in a way , what we are saying is that if we are going to produce
more and you get more dollars from your production, then it gives you more
money for your imports.
"But if you are now producing less and then you still have to make sure the
Nigerian market is supplied fully then you see there is a shortfall. That's
why we would rather like to have production now to be at the point where
we'll at least get enough to be able to do the imports, but our production
at this point is not very optimal," he maintained.
According to him, as it is, Nigeria is not necessarily making a lot of gains
because "we are taking from the high prices and we're also importing higher
priced petroleum products," he said.
On the plans for the energy summit, the minister stated that the objective
of the event from inception was to deliver the biggest and best African
Petroleum Technology and Business Conference that will be the platform, not
just for Nigeria, but also for Africa to engage the global energy community.
The event formally known as the Nigeria International Petroleum Summit
(NIPS), he said, will be themed "Revitalising the Industry: Future Fuels and
Energy Transition" this year.
He listed some of the confirmed international guests to include the Minister
of Energy, Kingdom of Saudi Arabia, Abdulaziz bin Salman Al Saud, who will
be represented by Dr. Nasser AlDossary and Tom Alweendo, Minister of Mines
and Energy, Namibia.
Other dignitaries expected, according to the minister, include: Gabriel
Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, Equatorial Guinea and
Aime Ngoy Mukena, Minister of Hydrocarbons, Democratic Republic of Congo.
The global energy leader and the Secretary General OPEC, Dr. Mohammad Sanusi
Barkindo, Sylva noted, has also confirmed his attendance.
He added that going by past statistics, Nigeria was expecting over 5,000
participants from about 53 countries; 4,182 sq m exhibition space occupied
by about 60 exhibitors and five country pavilions.-This Day.
Mastercard Foundation and Financial Sector Deepening Launch New Fund to
Revive 50,000 Micro and Small Enterprises in Uganda
Kampala — Financial Sector Deepening (FSD) Uganda, in partnership with the
Mastercard Foundation, today launched a five-year Micro and Small Enterprise
(MSE) Recovery Fund under the Young Africa Works initiative, to boost 50,000
enterprises recovering from the effects of the pandemic.
The US$20 million (approximately UShs70 billion) fund will shorten the
recovery process of youth and women-owned businesses that employ and sustain
the livelihood of millions of Ugandans. The fund will directly secure
100,000 at-risk jobs while enabling 150,000 additional opportunities for
dignified and fulfilling work for young people
MSEs in the program will receive credit worth between UShs 100,000 and UShs
10 million, which will be delivered through participating microfinance
institutions and SACCOs (Tier III and Tier IV financial institutions).
In addition to supporting MSEs, the fund will build the resilience of
grassroots Financial Service Providers (FSPs) by digitizing workflow
processes and strengthening their capacity to attract more long-term
institutional capital to address shocks and ensure the sustainability of
systemic growth.
The Executive Director of FSD Uganda, Ms. Rashmi Pillai, said that FSD
Uganda prides itself in working closely with like-minded partners such as
the Government of Uganda and the Mastercard Foundation to find solutions
that benefit all Ugandans.
Joan Ngiabi
Virtual Launch of Mastercard Foundation Young Africa Works strategy in
Uganda in 2020
"The MSE Recovery Fund was a result of the FSD Uganda 5-waves COVID-19
studies. The studies show that while most people returned to jobs by late
2020, the quality of jobs declined, and net pay was still below pre-pandemic
levels for nearly 73% of surveyed adults.. Individuals and households that
worked for and with MSEs were worst hit. That’s why the facility we are
launching today isintentionalin targeting micro and small enterprises whose
credit needs fall between UShs 100,000 to UShs 10 million. We are confident
that this facility will be an excellent complement to the Government of
Uganda’s Small Business Recovery Fund," she added.
Speaking on behalf of the Mastercard Foundation, Adrian Bukenya, the
organizations’ Country Head, Uganda, added: "MSMEs are a significant driver
of employment in Uganda. So, as the Foundation looks towards enabling 3
million young Ugandans to access dignified and fulfilling work by 2030, we
know we can only get there by addressing the residual effects of the
pandemic on MSMEs. This facility is about standing with the individuals and
businesses that are the backbone of our economy as they bounce back.
The Permanent Secretary and Secretary to the Treasury, Mr. Ramathan Ggoobi,
commended FSD Uganda and the Mastercard Foundation for this initiative,
which he said will bolster Uganda's effort to accelerate growth and revive
the economy. "I am pleased that these organizations are targeting MSEs that
employ most Ugandans. The fund will boost our effort as a government and
will help us to cover more ground and support our people to become
self-reliant amidst the challenges of the pandemic," he said.
Joan Ngiabi
Virtual Launch of Mastercard Foundation Young Africa Works strategy in
Uganda in 2020
The Recovery Fund will be implemented in partnership with ASIGMA, the
facility manager, who will ensure effective management of the funds, and
gnuGrid, who will be tasked with the implementation of the credit
referencing services to improve the processes of selected financial service
providers.
About FSD Uganda
Financial Sector Deepening Uganda (FSD Uganda) is a company limited by
guarantee promoting greater access to financial services in Uganda. FSD
Uganda seeks to develop a more inclusive financial sector focusing on
low-income individuals, particularly smallholder farmers, women, youth, and
forcibly displaced people and micro, small, and medium enterprises (MSMEs).
With support from FCDO, FSD Uganda facilitates product innovation, conducts
research, helps to promote and improve policy, laws and regulations that
shape the financial sector in Uganda. For more information on the
Foundation, www.fsduganda.or.ug
About the Mastercard Foundation
The Mastercard Foundation works with visionary organizations to enable young
people in Africa and Indigenous communities in Canada to access dignified
and fulfilling work. It is one of the largest private foundations in the
world with a mission to advance learning and promote financial inclusion to
create an inclusive and equitable world. The Foundation was created by
Mastercard in 2006 as an independent organization with its own Board of
Directors and management. For more information on the Foundation, please
visit www.mastercardfdn.org.
Mastercard Foundation
Mastercard Foundation and Financial Sector Deepening Launch New Fund to
Revive 50,000 Micro and Small Enterprises in Uganda
About Young Africa Works
Young Africa Works is the Mastercard Foundation's strategy to enable 30
million young people, particularly young women, across Africa to access
dignified and fulfilling work. Africa will be home to the world's largest
workforce, with 375 million young people entering the job market by 2030.
With the right skills, these young people will contribute to Africa's global
competitiveness and improve their lives and those of their communities. The
Mastercard Foundation will implement Young Africa Works in 10 African
countries in collaboration with governments, the private sector,
entrepreneurs, educators, and young people. The first phase of countries
identified by the Foundation are Rwanda, Kenya, Ghana, Senegal, Ethiopia,
Uganda, and Nigeria.
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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>
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