Major International Business Headlines Brief::: 21 January 2022

Fri Jan 21 09:27:45 CAT 2022

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Major International Business Headlines Brief::: 21 January 2022 

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ü  Toyota Land Cruiser customers in Japan face four-year wait

ü  Netflix faces rocky road after pandemic wins

ü  Peloton pushes back at production pause report after shares plunge

ü  Trains told to get rid of torrent of 'Tannoy spam'

ü  Bankers told to return to desks as restrictions end

ü  Primark to cut 400 store management jobs

ü  Women's state pension shortfalls a shameful shambles, MPs say

ü  Covid test firm urges end to tests for travellers

ü  Intel plans $20 bln chip manufacturing site in Ohio - sources

ü  Asian markets fall after weak showing on Wall St, oil tumbles

ü  Rio Tinto shares slump as Serbia pulls plug on its $2.4 bln lithium project

ü  U.S. crude exports ramp up as global demand recovers

ü  Twitter debuts hexagon-shaped NFT profile pictures

ü  China Evergrande says hiring more advisers to help deal with debt

ü  Gloomy Netflix forecast erases much of stock's pandemic gains

ü  China forex regulator aims to defuse risk of external shocks

 <mailto:info at bulls.co.zw> 

Toyota Land Cruiser customers in Japan face four-year wait

Motor industry giant Toyota has warned customers in Japan that they will have to wait for up to four years to take delivery of its new Land Cruiser SUV.

The world's biggest carmaker says the delay is not related to the global chip shortage or the supply chain crisis.

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

Meanwhile, Toyota says it is slowing production at up to 11 plants in Japan due to rising Covid-19 infections among its workers and at parts suppliers.

"As Land Cruiser is very popular, not just in Japan but around the world, we apologise it is expected to take a long time before we can deliver the product," Toyota said on its website.

"There is a possibility it could take up to four years if you order now. We will continue to shorten the delivery time and we appreciate your understanding."

The company also said "This delay is not related to current semiconductor shortage or supply chain issue."

The BBC understands that there has been strong demand for the new model of the Land Cruiser and that Toyota is considering ramping up production in the medium and long-term.

Launched in 1951, the Land Cruiser is Toyota's longest-selling vehicle.

In recent months - like many of its rival car makers including General Motors, Ford, Nissan, Daimler, BMW and Renault - the firm has been forced to cut vehicle production.

Last month, Toyota announced that it would extend stoppages at some of its factories in Japan as it continued to feel the impact of supply chain issues.

The firm said its components factories in South East Asia had faced disruptions due to the pandemic, with Land Cruiser and Lexus production being hit by the delays.

Earlier last year, the company said it would slash its worldwide vehicle production by 40% in September because of the chip shortage.

Toyota's shares were around 2.7% lower in Tokyo trade on Friday.

The latest announcement came after a surge in cases of the Omicron coronavirus variant in Japan since the start of this year.-BBC

Netflix faces rocky road after pandemic wins

The number of Netflix subscribers grew to 222 million last year, but the streaming firm is facing a rocky road ahead as the surge of interest it saw during the pandemic fades.

Overall, Netflix added 18.2 million members last year - roughly half the number who subscribed in 2020.

Investors had hoped that pace would start to pick up again.

But the firm's 2022 forecast brought bad news, sending shares down almost 20% in after-hours trade.

The firm said it expected to add just 2.5 million members in the three months to March - far lower than analysts had expected.

"While retention and engagement remain healthy, acquisition growth has not yet re-accelerated to pre-Covid levels," Netflix said, pointing to "Covid overhang and macro-economic hardship" in parts of the world like Latin America.

Netflix, which added 8.3 million subscribers in the last three months of 2021, maintained that there is room to grow, as more and more people switch away from traditional television.

The Disney effect

But it admitted that new competition from the likes of Disney, Apple, Amazon and HBO was starting to have an impact.

"Consumers have always had many choices when it comes to their entertainment time - competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering," the firm said.

"While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched."

Netflix is spending billions of dollars on content to keep viewers interested. Hits during the last three months of the year included a new season of The Witcher fantasy television series and the satire Don't Look Up - which has already become the second most popular film ever for the company.

But the firm, which recently raised prices in the US and Canada, is facing rising costs and other challenges - the strengthening of the dollar will cost the firm $1bn alone, it said.

"Squid Games creator Netflix has gone from a fairytale to some difficult viewing when it comes to subscriber forecasts - the most important metric for streaming services," said Laura Hoy, an equity analyst at Hargreaves Lansdown.

"The group's forecast for new subscriptions in the current period came in at just over half of last year's figure," she said. "Management blamed a back-loaded content schedule that will see several big releases come out at the end of the quarter, but investors were undeniably spooked by the slower growth forecast."

Revenue increased by 16% for October, November and December, compared to the same period a year earlier, hitting $7.7bn. Quarterly profits increased 12% to $607m.

For the year, profits jumped from $2.7bn to $5.1bn, while revenue grew by 19% to $26.7bn.-BBC

Peloton pushes back at production pause report after shares plunge

Peloton has pushed back at a report that it plans to temporarily stop production of its exercise machines.

The company's shares plunged by more than 20% after the CNBC report, which cited internal documents.

In a blog, the firm's chief executive said the information was "incomplete, out of context, and not reflective of Peloton's strategy".

Peloton saw sales soar during the pandemic as people were forced to stay at home due to lockdowns.

The firm, which pairs its equipment with streaming and live exercise classes, had struggled to keep up with orders at the start of the pandemic, as gyms shut their doors.

More recently, however, appetite has dwindled for its bikes and treadmills, which start at nearly $1,500 (£1,100).

"We worked quickly and diligently to meet the demand head-on at a time when the world really needed us," Peloton's co-founder John Foley said on the company's website.

"We feel good about right-sizing our production, and, as we evolve to more seasonal demand curves, we are resetting our production levels for sustainable growth."

In a separate statement issued with the company's quarterly earnings Mr Foley said: "As we discussed last quarter, we are taking significant corrective actions to improve our profitability outlook and optimize our costs across the company.

"This includes gross margin improvements, moving to a more variable cost structure, and identifying reductions in our operating expenses as we build a more focused Peloton moving forward."

Accident investigation

The firm was hit last year after the death of a child in a treadmill accident led to a recall and government safety investigation. It also cut prices as people started to return to pre-pandemic exercise habits.

In November, it told investors it had experienced "softer than anticipated" sales and was lowering its expectations for the year.

CNBC reported that Peloton was halting production of its most expensive expensive bike from December until June and its most expensive treadmill for all of its 2022 financial year, which runs through June. It is also pausing production of its standard bike in February and March and its treadmill for six weeks.

CNBC, which also reported that the firm is considering job cuts, said the presentation blamed increased competition and price sensitivity for a "significant reduction" in demand.

The news sent the price of Peloton shares below $29, which is below what they fetched when the loss-making firm floated on the stock market in 2019. The value of the shares are down roughly 80% over the last 12 months.

At the time, analysts said it was not clear how big the market for Peloton machines was given their cost. The firm also makes money from people who subscribe for classes via its app.-BBC

Trains told to get rid of torrent of 'Tannoy spam'

If you're a commuter returning to the office after a long period of working from home, you may soon notice a subtle difference on your morning train.

In the next few months, rail chiefs will be getting rid of unnecessary announcements to make journeys quieter.

Examples of so-called "Tannoy spam" include telling passengers to have their tickets ready and, ironically, to keep the noise down.

But the Department for Transport (DfT) said key safety messages would remain.

That probably means a reprieve for the British Transport Police's "See it. Say it. Sorted" announcement, branded "the most annoying slogan of the century".

The DfT said it would be working closely with the Rail Delivery Group and passenger groups such as Transport Focus, as well as train operators, to identify how the "vast number" of announcements could be cut or reduced.

"The review will take place over the course of this year, with redundant messages identified and starting to be removed in the coming months," it added.

'Bonfire of banalities'

The announcement comes as many office workers are preparing to resume regular journeys to their workplace, after the government scrapped its work-from-home guidance for England with immediate effect.

"As passengers come back to the railways, the DfT will continue to ensure journeys are more comfortable to all users, and that passengers continue to receive the important information that they need about their journey," the department said.

"Officials will work with accessibility groups to ensure that access for all is maintained."

Transport Secretary Grant Shapps said train passengers were all too often "plagued by an endless torrent of repeated and unnecessary announcements".

"In line with the passenger improvements we are rolling out with our Plan for Rail, we want to see improvements to the railways for those who use them day-in day-out," he added.

"That's why I'm calling for a bonfire of the banalities to bring down the number of announcements passengers are forced to sit through and make their journey that little bit more peaceful."

The move was welcomed by Transport Focus and the Rail Delivery Group.-BBC

Bankers told to return to desks as restrictions end

Big banks, advertising firms and insurers have announced plans to return to the office after the government scrapped its work-from-home guidance for England with immediate effect.

However, most said flexible working arrangements would remain in place.

Some have questioned whether the move is premature and could worsen already-high staff absences.

But others said city centres hit hard by Omicron would get a much needed boost as commuters returned.

Banking group HSBC said its staff started returning to the office on Thursday, while Standard Chartered has asked employees to come in from Monday - although both lenders have flexible working arrangements in place.

Citigroup and Goldman Sachs also plan to resume office working.

Meanwhile Havas, a French advertising agency with 11,500 staff worldwide, told the BBC it would "fully reopen" its London office from Monday after more than a month of employees working from home.

Latest figures suggest that 37% of working UK adults did at least some work from home in 2020, up from 27% the previous year.

The government introduced its Plan B restrictions in December to battle the Omicron variant, but on Wednesday eased them saying infections had peaked nationally.

Along with the end of working-from guidance, the requirement in England for mandatory face coverings in public places and Covid passports will both be ditched from next Thursday.

Chris Hirst, global head of creative at Havas, told the BBC's Today programme: "Many of our employees really do want to come back into the office, but there are some people who are nervous and we don't have a one-size-fits-all approach to that.

"We'll be talking to those people individually and finding solutions that work for them."

Insurance firm Zurich, which employs 4,500 in the UK, said it was "excited" to welcome staff back to its offices but most would continue on a hybrid basis.

"We had a flexible working policy prior to the pandemic, but [Covid] meant suddenly everybody was experiencing the benefits and some of the downfalls and we've learnt a lot," chief operating officer John Keppel told the BBC's Wake up to Money programme.

Alex, 28, says he can't wait for people at his law firm to go back to the office in the next month.

He joined the company in November, when it was working on a hybrid basis, but virtually all staff have been working from home since mid December.

"I'm a new joiner and just getting started," he told the BBC. "But it's been really difficult to learn about the company culture, make new connections and make an impression."

However, he does appreciate the flexibility of being able to work from home, and supports his firm's goal of moving to a 60:40 split between office and home working.

"Working from home can be more productive. Although now people have got used to doing it full time, I think some will be loath to give it up."

line

Network Rail said the number of people using its stations between 6:00 and 10.30 GMT on Thursday was up 10% compared with the same period last week.

But the statistics show daily passenger numbers had been increasing even before the guidance to work from home in England was lifted yesterday afternoon.

Thursday's figure was just 1% higher compared with Wednesday.

Business groups have broadly welcomed the easing of Plan B restrictions in England, with the CBI calling for "greater consistency in how we live with the virus in the longer term".

Lord Stuart Rose, chairman of Asda and former boss of Marks and Spencer and Argos, hailed the decision to scrap the guidance.

"I cannot believe we have a nation sitting at home now cowered by this government, because they are fearful of this virus," he said.

"It is something we have to now live with."

According to the Times newspaper, the government has asked civil servants to go back to their desks as an example to other employers.

But some have questioned the safety of the move at time when the NHS remains under pressure.

The British Chambers of Commerce also urged the government to improve access to rapid testing so firms could bring staff back to workplaces with confidence.

"With infection rates still high, many firms are experiencing significant staff absences and will be cautious about teams rushing back to the office when that could result in further absences," BCC director general Shevaun Haviland said.

"Maintenance of testing capacity must also be a priority for government, with reports still reaching us of firms unable to access rapid testing at times when they need it."

Boost for city centres

Unions also said employers had to ensure a safe return to work, and provide flexible working when staff wanted it.

The TUC called for a better sick pay offer from government amid concerns that many workers will be infected and have to take time off on statutory sick pay.

Others, however, said the change in guidance was overdue for city centre retailers, which rely on commuter trade that has dried up over the last few months.

Most workers do not expect full office return

On Thursday, the City Pub Group, which has 46 sites, said it expected "consumer confidence and consequently demand" to grow once office workers return to work.

And the Gym Group said demand was returning after a slow December, and would "show further improvement" due to the end of work from home guidance.

Matthew Fell, the CBI's chief policy director said: "Blanket work-from-home guidance has had significant downsides for city centre trade in sectors such as hospitality and retail."

According to BBC research in September, most people do not believe workers will return to the office full-time after the coronavirus pandemic.

A total of 70% of 1,684 people polled predicted that workers would "never return to offices at the same rate".-BBC

Primark to cut 400 store management jobs

The company behind retailer Primark and drinks Ovaltine and Twinings is cutting jobs and raising some prices as inflation pushes up its costs.

AB Foods (ABF) said it would cut 400 jobs at Primark as part of a drive to simplify the management structure.

The group, which has ingredients and agriculture arms, said higher energy and transport cost may push up prices.

Despite inflation pressures and Omicron hitting Primark sales, ABF said the group had seen stronger trading.

The company said the Primark job changes aimed to "provide clearer accountability, greater flexibility and more management support on the shop floor".

Primark, which employs 29,000 staff in total across 191 stores in the UK, said it would be consulting with staff over the next couple of months.

Kari Rodgers, Primark retail director for the UK, said: "The changes we're proposing will deliver a simplified and more consistent management structure across all of our stores, provide more opportunities for career progression and offer greater flexibility.

"We are now focused on supporting our colleagues who are affected by these proposed changes and will be going through the consultation process."

Supply delays

Details of the job cut plans came as Primark revealed it had seen a hit to recent trading as the Omicron variant of coronavirus kept shoppers away from stores.

The group said Primark's UK like-for-like sales were 10% lower in the 16 weeks to 8 January when compared with pre-pandemic levels two years ago, with shopper footfall hit by the rapid rise in Omicron cases.

But ABF said shopper numbers and trading had since improved as Omicron fears ease and added that like-for-like sales were higher when compared with a year earlier, when stores were shut due to lockdown measures.

Total group-wide sales at Primark, which does not have an online operation, were 36% ahead year-on-year, it added.

ABF's said supply chain problems had begun to ease since last autumn, although it is still seeing some delays at ports and with shipments.

The company said: "In our grocery, sugar, ingredients and agriculture businesses we have seen an escalation in the cost of energy, logistics and commodities.

"We have been implementing plans to offset these through operational cost savings and, where necessary, the implementation of price increases."

However, despite inflationary pressures, Primark will not raise prices for its spring/summer range, ABF's finance chief told reporters.

"Primark prices for the consumer will remain where they are," John Bason said. "It's locked and loaded."

Other retailers have signalled prices increases, including Superdry. Boss Julian Dunkerton said that prices will increase by about 2% due to rising costs.

But he said Superdry will also be able to offset some cost hikes by slashing the number of items the retailer has on sale, something that has been part of the Superdry plan since before Covid-19.

"No stores will ever have a sale again," he told the PA news agency, and "discounting is limited to a shorter period online and very limited".

Rival Next has flagged price rises of 3.7% in the first half of 2022 and 6% in the second half due to higher freight rates and increased manufacturing costs. Marks & Spencer has also indicated price rises are possible.

Laura Hoy, equity analyst at Hargreaves Lansdown, said ABF's diversified business was a safety net throughout the pandemic.

"But as things normalise all eyes are on retail for signs of a comeback," she said. "Compared to last year, when store closures kept sales painfully low, revenue rose considerably. But sales at Primark have yet to make their way to pre-pandemic levels."-BBC

Women's state pension shortfalls a shameful shambles, MPs say

A £1bn shortfall in state pension payments to tens of thousands of women has been branded "a shameful shambles" by a committee of MPs.

A total of 134,000 pensioners missed out on their full entitlement owing to errors at the Department for Work and Pensions (DWP) dating back to 1985.

Some of those failures risked being repeated during a correction programme, the Public Accounts Committee said.

The DWP said it was resolving cases as quickly as possible.

Why did women miss out?

The problem relates to the "old" state pension system where married women who had a small pension in their own right could claim a 60% basic state pension based on their husband's record of contributions.

Widows and divorcees have also been affected. Some will receive all their entitlement, although years later than they should have done. Others will only be able to claim for 12 months of missed payments.

Among them is Jan Tiernan, from Fife, who was initially told she was not owed any money. After nearly 100 pages of correspondence with the department, she received £1,280, but believes she is owed more.

"You need a lot of energy, and when you are 80-years-old you don't have that kind of energy. It tires you," she told the BBC.

"I feel let down by the system."

She said that the extra money would have made a lot of difference to pensioners, from helping to pay heating bills to going towards a holiday.

The committee's report said the errors were the result of outdated systems and heavily manual processing of pensions at the DWP. 

Small errors that were not recognised added up to significant sums of money over the years.

In a damning report, it concluded:

·         The failures have led to significant losses to taxpayers. Staff costs in correcting mistakes by the end of 2023 are expected to reach more than £24m

·         There is no plan for contacting families of pensioners who have already died, and who should receive some of their entitlement

·         The DWP has been "inconsistent" in paying pensioners interest on the money that was owed

·         It has ignored knock-on consequences of paying lump sums, including on benefits and social care provision, to those it underpaid

Other pensioners could be missing out and should receive clearer information about how to claim

The committee said that there was a risk that the errors that led to underpayments in the first place could be repeated in the correction programme, the ninth such exercise since 2018.

There was also concern that, by allocating staff to deal with this problem, backlogs occurred in dealing with claims from new pensioners who suffered delays in receiving their state pension at 66.

Meg Hillier, who chairs the committee, said: "For decades DWP has relied on a state pension payment system that is clunky and required staff to check many databases - and now some pensioners and the taxpayer are paying in spades.  

"In reality, the DWP can never make up what people have actually lost, over decades, and in many cases it's not even trying.  

"This is a shameful shambles."

Call for urgency

Among a string of recommendations made in the report is that the DWP should find cost-effective ways to update its computer systems.

The committee also said the DWP needed to make clear how it was treating underpayments related to divorced women.

Former pensions minister Sir Steve Webb, who is now a partner at consultancy LCP, first raised concerns about underpayments, and has called for divorcees to be included having their entitlement checked.

"The DWP's defensive reaction to questions and scrutiny over this issue suggest that lessons have still not been learned," he said. 

"There are still far too many people missing out on the state pension to which they are entitled and DWP needs to track them all down as a matter of urgency."

A DWP spokesman said: "Resolving the historical state pension underpayments that have been made by successive governments is a priority for the department and we are committed to doing so as quickly as possible.

"We have set up a dedicated team and devoted significant resources to processing outstanding cases, and have introduced new quality control processes and improved training to help ensure this does not happen again. Those affected will be contacted by us to ensure they receive all that they are owed."-BBC

Covid test firm urges end to tests for travellers

Covid tests for travellers arriving in the UK should be scrapped, one of the big testing firms has said.

Simon Worrell, global medical director of Collinson - which also runs airport lounges - said: "As soon as we can drop it, we will be delighted."

At present, all those aged five and over arriving in England must take a test within 48 hours of arriving.

Prime Minister Boris Johnson said on Wednesday the government was reviewing testing arrangements for travel.

He said the Health Secretary Sajid Javid would announce the outcome of the review in the coming days.

Mr Worrell said Collinson, which has a large travel business that includes running customer services in airports, launched its testing sites early in the pandemic in a bid to prop up the travel industry, which a large part of his business depends on.

But now, with more people able to return to the skies, the requirement for people to test on arrival has become more of a hindrance to the business, because it may put them off travelling.

The travel industry has continually voiced its objection to testing. Manchester Airports Group and Airlines UK on Friday renewed their calls for testing rules to become a thing of the past for fully vaccinated travellers.

But virologists have expressed caution. Dr Stephen Griffin from the University of Leeds said: "You have a moral responsibility to monitor and to know if you're infectious. It is a good idea to test."

Collinson was one of the first operators to run Covid testing stations at airports and also distributes tests through the post. It partners with a number of UK airlines and travel operators.

Mr Worrell said: "Airport testing was only ever supposed to be a band-aid, a temporary solution to get trade and tourism staggering whilst we build up immunity and we are able to fight the virus by ourselves. We are at that point now.

"The link between getting infected and hospitalisation has been broken. We are in a fantastic place - the envy of the world, I think."

'Rip-off'

Covid testing for travellers has been controversial and the government has faced criticism over its regulation of the sector.

Consumer rights groups said the Department for Health and Social Care had not done enough to protect consumers from what was called a "predictable Covid rip-off".

The government did launch an investigation to remove operators who were selling tests that, in some instances, were too cheap or not available at the price advertised.

But those in the medical community are alarmed that testing for those arriving back in the UK could be removed.

Dr Eleanor Gaunt, who investigates the genetic coding of viruses at the University of Edinburgh, said: "I fully agree that this needs to happen, but the timing is premature.

"It is entirely possible that Omicron will be succeeded by a new variant and possibly one that can circumvent immunity provided by vaccination and previous infection.

"Therefore we need eyes on what viruses are moving where, until the virus becomes more predictable and endemic."

Yet not everyone in the scientific community believes testing for travellers arriving into the UK should remain.

Dr Bharat Pankhania, from the University of Exeter Medical School, believes that it is time for travel tests to end, as long as community testing remains in place to identify variants of concern.-BBC

Intel plans $20 bln chip manufacturing site in Ohio - sources

(Reuters) - Intel Corp on Friday is set to announce it will invest $20 billion in a massive new manufacturing site near Columbus, Ohio to develop and manufacture advanced semiconductor chips, sources briefed on the matter told Reuters.

The planned investment includes 3,000 permanent jobs on the 1,000-acre site in New Albany, Ohio. Time magazine, which first reported the news, said Intel will build at least two semiconductor fabrication plants.

President Joe Biden is making remarks Friday on the U.S. government's efforts "to increase the supply of semiconductors, make more in America, and rebuild our supply chains here at home," the White House said earlier.

Intel Chief Executive Pat Gelsinger is set to appear with Biden on Friday at the White House, sources told Reuters. The White House did not respond to a request for comment.

The initial $20 billion is the first step of what could be an eight-factory complex costing tens of billions of dollars.

Intel declined to comment on its plans but said in a statement that Gelsinger would disclose details Friday of "Intel’s latest plans for investment in manufacturing leadership" as it works "to meet the surging demand for advanced semiconductors."

Chipmakers are scrambling to boost output after manufacturers around the world, from autos to consumer electronics, faced shortages of chips. Intel also is trying to win back its position as maker of the smallest and fastest chips from current leader TSMC , which is based in Taiwan.

Gelsinger last fall also said he planned to announce another U.S. campus site before the end of the year that would eventually hold eight chip factories.

He told the Washington Post the complex could cost $100 billion over a decade and eventually employ 10,000.

Gelsinger is driving Intel plans to expand, especially in Europe and the United States, as it seeks to heat up competition with global rivals and respond to a worldwide microchip shortage.

Intel and Italy are intensifying talks over investments expected to be worth around 8 billion euros ($9 billion) to build an advanced semiconductor packaging plant, Reuters reported late last year. read more

The Biden administration is making a big push to convince Congress to approve $52 billion in funding to dramatically increase chip production in the United States. The Senate in June voted 68-32 for the chips funding as part of a broader competitiveness bill, but it has been stalled in the House.

House Speaker Nancy Pelosi said Thursday she hopes to "go to conference" on the chips funding measure soon.

Still, Intel's plans for new factories will not alleviate the current demand crunch, because such complexes take years to build. Gelsinger previously said he expected the chip shortages to last into 2023.

In September, Intel broke ground on two factories in Arizona as part of its turnaround plan to become a major manufacturer of chips for outside customers. The $20 billion plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six. read more

Intel told Time it considered 38 sites before picking New Albany, Ohio in December. Ohio has agreed to invest $1 billion in infrastructure improvements to facilitate the factory, Time said.

($1 = 0.8829 euros)

The Thomson Reuters Trust Principles

Asian markets fall after weak showing on Wall St, oil tumbles

(Reuters) - Asian share markets tumbled on Friday, tracking losses on Wall Street, as lingering concerns over the Federal Reserve's tightening and weaker-than-expected economic and earnings data weighed on sentiment ahead of a Fed policy meeting next week.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 1.3%, dragged by Australian shares (.AXJO) which fell 2.34%, while Japan's Nikkei stock index (.N225) slid 1.47%.

Nasdaq futures slid 1.2% in Asian trading, hurt by Netflix Inc forecasting weak first-quarter subscriber growth after the close. The S&P 500 e-minis , were down 0.68%.

The drop was set to continue in Europe. In early European trades, the pan-region Euro Stoxx 50 futures were down 1.84%, and FTSE futures were down 1.34%.

"The selloff of U.S. stocks yesterday was brutal and will dominate Asia," said Rob Carnell, chief economist at ING in Singapore.

"But there are pockets of optimism like China's more accommodating moves on monetary policy," he added.

The Nasdaq (.IXIC) dropped late in the U.S. session, to close 1.3% lower, as investors anxiously await the Fed's FOMC meeting next week for details on how it intends to tackle high inflation. read more

The moves extended to Chinese shares with the Hong Kong benchmark (.HSI) losing 0.75% after posting its best day in six months the day before and Chinese blue chips (.CSI300) losing 0.8%, also after gains the day before.

China cut its benchmark mortgage rates on Thursday, the latest move in a burst of monetary easing aimed at propping up an economy soured by a troubled property sector and worries over the Omicron variant of coronavirus. read more

That failed to cheer up the markets on Friday, even as sources told Reuters that China's central bank will cut interest rates on its standing lending facility loans, following similar reductions in other liquidity tools. read more

Analysts at Nomura believe the impact from cuts to benchmark lending rates would be quite limited, as these cuts are too small to have a material impact.

Market sentiment was also weakened by comments made by U.S. Treasury Secretary Janet Yellen on inflation, said Kyle Rodda, market analyst at IG Markets.

"Less than a week out from the FOMC meeting, investors are worried that the central bank is going to flag aggressive rate hikes and an imminent and rapid unwind of its balance. In effect, it may throw the stock market under the bus to stamp out inflation."

Yellen said on Thursday she was confident the Federal Reserve and the Biden administration would take steps needed to bring down inflation over the course of 2022, provided the COVID-19 pandemic is brought under control. read more

In commodities, oil prices plunged on Friday, after rising to seven-year highs this week, as an increase in U.S. crude and fuel stockpiles prompted investors to take profits from the rally. read more

U.S. crude dipped 1.99% to $83.85 a barrel. Brent crude fell to $86.82 per barrel. Both benchmarks have gained more than 10% so far this year amid concerns over tight supply

U.S. Treasury yields were slightly lower along the curve, having risen sharply earlier in the week as investors positioned themselves for the likelihood that the Federal Reserve will tighten monetary policy more aggressively to stave off inflation.

Yields on benchmark 10-year notes were last at 1.7737%, their lowest in a week, having hit a two-year high of 1.902% on Wednesday.

Rising yields had helped the dollar to gain earlier in the week, although on Friday the dollar index eased 0.08% against a basket of six major currencies.

The greenback did, however, lose ground on the safe haven yen , falling to a one-week low of 113.8 per dollar, while the risk friendly Australian dollar shed 0.5%.

Spot gold added 0.2% to $1,841.48 an ounce.

The Thomson Reuters Trust Principles.

Rio Tinto shares slump as Serbia pulls plug on its $2.4 bln lithium project

(Reuters) - Shares in Rio Tinto tumbled on Friday after Serbia revoked its lithium exploration licences over environmental concerns, hurting the Anglo-Australian miner's ambition to become Europe's largest supplier of the metal used in electric vehicles.

The decision by Serbia comes as it approaches a general election in April, and as relations between Belgrade and Canberra have soured after Sunday's deportation of tennis star Novak Djokovic from Australia over its COVID-19 entry rules.

It is also a major setback for Rio (RIO.L), (RIO.AX), which was hoping the project would help make it one of the world's 10 biggest producers of lithium, a key ingredient in batteries.

The mine is Rio's only lithium project and the company announced just a month ago a deal to buy a second lithium asset for $825 million, as it looks to build its battery materials business.

Rio's shares closed down 4.1% after falling as much as 5.1% in the Australian stock market, its worst intra-day drop since August 2021. The benchmark index ended down 2.3%.

Serbian Prime Minister Ana Brnabic told a news conference in Belgrade that the decision came after requests by various green groups to halt the $2.4 billion Jadar lithium project that had planned to start production in 2027.

Thousands of people blocked roads last year in a protest against the government's backing of the project, demanding Rio Tinto leave the country and forcing the local municipality to scrap a plan to allocate land for the facility.

The decision came days after ties between Australia and Serbia hit rock bottom as tennis star Djokovic was deported before he could play in the Australian Open.

Djokovic spoke out in support of "clean air" in a December Instagram story post captioning a picture of the anti-mining protests, which was published by digital sports platform The Bridge.

Twitter users were quick to joke about Rio being deported from Serbia.

Rio said it was "extremely concerned" by Serbia's decision and was reviewing the legal basis for it.

The Australian government said it regrets Serbia's decision to revoke Rio's licences.

"We note the strong economic benefits of the significant investment by Rio Tinto in Serbia. Australian resources companies have an outstanding reputation around the world, particularly when it comes to their expertise," the government said in a statement to Reuters.

Rio has already spent US$450 million in pre-feasibility, feasibility and other studies on Jadar to understand the nature of the deposit, the company said in a project fact sheet in July.

"The level of opposition to it has really ratcheted up over the last six months," Credit Suisse analyst Saul Kavonic said of the Jadar mine.

"We've been highlighting for a while now there would be about $2 a share at risk if the government cancels it," Kavonic said.

This week, Rio pushed back the timeline for first production from Jadar by one year to 2027, citing delays in approvals. read more

'EVEN GREATER SHORTAGE'

At full capacity, the Jadar mine was expected to produce 58,000 tonnes of refined battery-grade lithium carbonate a year, making it Europe's biggest lithium mine by output.

"There aren't that many projects like Jadar, and the Western world is not going to have its own supply chain if these are not developed," Sam Brodovcky, Standard Chartered's head of global metals and mining M&A.

"There will be an even greater shortage of lithium and other critical and battery materials."

Experts said the world's shortage of lithium had been forecast to last for another three years at least, but with the cancellation of the Jadar project, the shortfall would now last for several years. read more

"We're at the point now where lithium supply is going to set the pace of electric vehicle rollout," Kavonic said.

Robust global demand for the metal far outstripping supply growth has pushed lithium prices to a record in recent years.

Lithium futures , which started trading on the CME in May last year, have jumped 171% to a record $38/kg on Thursday, according to Refinitiv data.

In China, cash prices of lithium hydroxide monohydrate are trading around a record 262,500 yuan ($41,387.47) per tonne, up by more than 400% from a year ago.

Its state planner said on Friday that restrictions on purchases of new energy vehicles including EVs will be gradually removed in a "vigorous" push to promote "green consumption", a plan likely to further increase demand for lithium. read more

($1 = 6.3425 Chinese yuan)

The Thomson Reuters Trust Principles.

U.S. crude exports ramp up as global demand recovers

(Reuters) - U.S. crude exports are ramping up due to increasing demand from Asia and Europe and recovering U.S. production from the lows of the coronavirus pandemic.

Surging worldwide demand, supply outages and international political tension have stoked worries around crude supplies, boosting oil prices to the highest levels in seven years, with some predicting crude could even reach $100 per barrel. That has brought in more buyers of U.S. oil, increasing exports and decreasing domestic crude stockpiles. read more

U.S. seaborne crude exports have increased in recent weeks and are close to 3 million barrels per day so far this month, according to Matt Smith, lead oil analyst for the Americas at Kpler. That's just under the 3.2 million bpd average in crude exports in December, which was the strongest month since February 2020, he said.

Cargoes booked for February are headed to numerous countries including China, South Korea and India, Refinitiv Eikon shipping data showed. Those three are among the largest regular buyers of U.S. crude. Global demand in Asia in 2022 is expected to rise 4% to 37.2 million bpd, the International Energy Agency said Thursday, making it the only major region ahead of 2019's pace.

"The exports are underpinning the market now," said John Kilduff, a partner at Again Capital Management in New York. "I expect the 3 million-per-day number to sort of become the norm."

Exports have helped reduce crude stockpiles in the U.S. Gulf Coast to as low as 220.3 million barrels earlier this month, which was a two-year low.

Increased vehicle traffic means lighter barrels from the United States, which produce a higher volume of gasoline, are attractive to buyers. The IEA said Thursday it expects worldwide gasoline demand to rebound to 26.3 million bpd - just 1% lower than 2019's consumption. read more

Supply hiccups from countries like Libya, which had temporary production outages starting in December, shifted U.S. exports to countries in Europe. read more

In December, the United States shipped around 2.3 million barrels of crude to Italy, Refinitiv Eikon data showed, up from 1.6 million in November.

"Everyone is seeing really strong demand growth numbers for this year, and when you look at where supply growth is coming through from, the U.S. is a leader there," Smith said.

Crude output from major U.S. shale formations is due to rise to 8.54 million bpd in February, the highest since March 2020, according to the Energy Information Administration. Of that, the Permian Basin's output is set to reach 5.1 million bpd, also a record. read more

The Thomson Reuters Trust Principles.

Twitter debuts hexagon-shaped NFT profile pictures

(Reuters) - Twitter Inc (TWTR.N) on Thursday announced the launch of a tool through which users can showcase non-fungible tokens (NFTs)as their profile pictures, tapping into a digital collectibles craze that has exploded over the past year.

The feature, available on iOS to users of the company's Twitter Blue subscription service, connects their Twitter accounts to crypto wallets where the users store NFT holdings.

Twitter displays the NFT profile pictures as hexagons, differentiating them from the standard circles available to other users. Tapping on the pictures prompts details about the art and its ownership to appear.

Like other tech companies, Twitter is rushing to cash in on crypto trends like NFTs, a type of speculative asset authenticating digital items such as images, videos and land in virtual worlds. read more

The social media platform last year added functionality for users to send and receive Bitcoin. read more

Sales of NFTs reached some $25 billion in 2021, according to data from market tracker DappRadar, although there were signs of growth slowing toward the end of the year. read more

Proponents of "Web3" technologies like NFTs say they decentralize ownership online, creating a path for users to earn money from popular creations, rather than having those benefits accrue primarily to a handful of tech platforms.

Critics dismiss the decentralization claims, noting that many of the services powering adoption of those technologies - like the six crypto wallets supported by Twitter's NFT product - are backed by a small group of venture capitalists. read more

In a widely circulated tweet after the launch, security researcher Jane Manchun Wong highlighted one of those links, showing how an outage at venture-backed NFT marketplace OpenSea temporarily blocked NFTs from loading on Twitter.

The Thomson Reuters Trust Principles.

China Evergrande says hiring more advisers to help deal with debt

(Reuters) - China Evergrande Group (3333.HK) said on Friday that it was hiring more financial and legal advisers to help it with demands from creditors, after a key group of its international creditors threatened to take legal action if it did not show more urgency to resolve a default.

Evergrande is the world's most-indebted property company, with more than $300 billion in total liabilities, which include nearly $20 billion of international bonds all deemed to be in default after a run of missed payments late last year.

Its rocky financial situation has roiled other Chinese property developers over the past year and exacerbated a funding squeeze in the sector. But in one positive sign, larger rival Country Garden (2007.HK) surprised the market on Friday with a new issue of $500.2 million convertible bonds, after a similar attempt failed last week.

In a filing to the stock exchange, Evergrande said it was proposing to engage China International Capital Corp Ltd and BOCI Asia Ltd as financial advisers, and Zhong Lun Law Firm LLP as legal adviser.

The move came one day after an offshore creditor group, represented by law firm Kirkland & Ellis and investment bank Moelis, said it was ready to take "all necessary actions" to defend members' rights after a lack of engagement by the firm at the heart of China's property crisis. read more

The creditor group said in a statement on Thursday Evergrande has disregarded its offshore creditors and the legal rights of its creditors, and it had to "seriously consider" enforcement action.

Shares of Evergrande fell over 3% in Asia on Friday. Its April 2023 dollar bond traded at 12.551 cents on the dollar, data by Duration Finance showed, bouncing after the news though still softer than overnight.

IS PROPERTY SENTIMENT TURNING?

Stocks and bonds of Chinese property developers have gained this week on hopes a slew of recent government measures would help ease the sector's funding squeeze and reverse a slump in construction, a key economic growth driver. read more

Country Garden, China's top property developer by sales, said it would issue HK$3.9 billion of convertible bonds for refinancing debt that will become due within one year.

The bonds due July 2026 carry 4.95% interest and have the initial conversion price of HK$8.10 per share. At full conversion, the shares would represent 2% of the enlarged capital.

Shares of Country Garden dropped nearly 6% to HK$6.55 in the morning session after the news, while its Jan 2023 international bond rose to 97.021, up from 92.787 overnight.

The new issue follows a report that the developer failed to find appetite for a potential $300 million convertible bond last Wednesday. IFR reported Country Garden tested the waters for a three-year put-two deal which would carry a yield-to-maturity of 4.75% and a conversion premium of 25%.

Beijing unexpectedly cut borrowing costs on its medium-term loans on Monday for the first time since April 2020 to ease pressure on the cooling economy. On Thursday it cut its benchmark lending rates for corporate and household loans for a second straight month, and also lowered its mortgage lending benchmark rate. read more

Reuters reported on Wednesday that policymakers were also drafting nationwide rules to make it easier for developers to access funds from sales still held in escrow accounts, which would improve their short-term liquidity and buy time to repay debts. read more

($1 = 7.7878 Hong Kong dollars)

The Thomson Reuters Trust Principles.

Gloomy Netflix forecast erases much of stock's pandemic gains

(Reuters) - Netflix Inc dashed hopes for a quick rebound after forecasting weak first-quarter subscriber growth on Thursday, sending shares sinking nearly 20% and wiping away most of its remaining pandemic-fueled gains from 2020.

The world's largest streaming service projected it would add 2.5 million customers from January through March, less than half of the 5.9 million analysts had forecast, according to Refinitiv IBES data.

Netflix tempered its growth expectations, citing the late arrival of anticipated content, such as the second season of "Bridgerton" and the Ryan Reynolds time-travel movie "The Adam Project."

Shares of Netflix plummeted nearly 20% to $408.13 in after-hours trading. Competitor Walt Disney Co (DIS.N), which has staked its future on building a strong streaming business, saw its shares sink 4%. Streaming device Roku Inc (ROKU.O) fell 5%.

Nasdaq futures dropped almost 1%, showing traders expect the tech-heavy index to open lower on Friday.

Netflix added 8.3 million customers from October to December, when it released a heavy lineup of new programming including the star-studded movies "Red Notice" and "Don't Look Up" and a new season of "The Witcher." Industry analysts had projected 8.4 million.

The company's global subscriber total at the end of 2021 reached 221.8 million.

In a letter to shareholders, Netflix said it believed the ongoing COVID-19 pandemic and economic hardships in several parts of the world like Latin America may have kept subscriber growth from rebounding to levels seen before the pandemic.

COVID "created a lot of bumpiness" that made it hard to project subscriber numbers, "but all the fundamentals of the business are pretty solid," Co-Chief Executive Ted Sarandos said in a post-earnings video interview.

The company posted adjusted earnings per share of $1.33, crushing analyst consensus estimates of 82 cents. Revenue hit $7.71 billion, in line with estimates.

Netflix last week raised prices in its biggest market, the United States and Canada, where analysts say growth is stagnating, and is now looking for growth overseas.

The company rode a roller coaster during the pandemic, with steep growth early in 2020 when people were staying home and movie theaters were closed, followed by a slowdown in 2021. Netflix picked up more than 36 million customers in 2020, and 18.2 million in 2021.

Netflix's subscriber growth in 2022 had been expected to stabilize and return to the pace logged before the pandemic, when it added 27.9 million subscribers in 2019, analysts say. The company's upcoming slate includes new installments of "Ozark" and "Stranger Things" and a three-part Kanye West documentary.

"The pandemic lockdowns pulled forward tons of demand and it is taking longer than expected to normalize," said Pivotal Research analyst Jeff Wlodarczak.

Competitors including Disney and AT&T Inc's (T.N) HBO Max, are pouring billions into creating new programming to grab a share of the streaming market.

Netflix said competition "may be affecting our marginal growth some," but added that it was still growing in every country where new streaming options have launched.

"Even in a world of uncertainty and increasing competition, we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world," Netflix said in its shareholder letter.

In their video interview, executives sought to reassure investors that Netflix's long-term prospects were bright. Sarandos said the service had not seen a decline in customer engagement or retention and he projected the switch to streaming from traditional television would continue to open opportunities worldwide. The stock remained down nearly 20%.

"The pace of the migration may be a little hard to call from time to time when there are kind of very global events or even local conditions," Sarandos said, "But it's absolutely happening. There's no question of that."

The company is looking for new ways to attract customers including with mobile video games. Netflix said it released 10 games in 2021, was pleased with the early reception and would expand its gaming portfolio in 2022.

The Thomson Reuters Trust Principles.

China forex regulator aims to defuse risk of external shocks

(Reuters) - China must prevent and defuse the risk of external shocks this year while strengthening macro-prudential management and guiding market expectations, the country's foreign exchange regulator said on Friday.

The comments come as the U.S. Federal Reserve is widely expected to start hiking interest rates as early as March, while its Chinese counterpart has stepped up monetary easing to prop up a slowing economy, raising concerns about possible capital outflows due to the policy divergence.

During the previous round of Fed tightening in 2018, China's currency depreciated sharply.

China is better able to cope with external changes, and "this round of tightening by the Federal Reserve may have less spillover effect than the previous round," Wang Chunying, spokesperson of the State Administration of Foreign Exchange (SAFE), told a news conference on Friday.

On Wednesday, Chinese government bond yields fell across the curve after an official's comments heightened expectations that the country's benchmark lending rate will be cut as early as this week to shore up the cooling economy. read more

"In the face of this round of Fed tightening expectations, both cross-border loans or capital flows related to trade financing are relatively stable," Wang said.

Robust export growth, ample FX liquidity and the attractiveness of Chinese assets should all help China better tackle changes in the external environment, the regulator added.

The yuan was the best performing emerging market currency in 2021, appreciating 2.7% against a rising dollar. Its gains have extended into 2022, with a 0.2% advance year-to-date.

China's current account surplus to GDP ratio for 2021 was tentatively estimated to be within 2%, Wang added.

The Thomson Reuters Trust Principles.

Invest Wisely!

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INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

Companies under Cautionary

ART

PPC

Starafrica

Fidelity

Turnall

Medtech

Zimre

Nampak Zimbabwe

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