Major International Business Headlines Brief::: 16 March 2022

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Major International Business Headlines Brief::: 16 March 2022 

 


 

 


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

 


 

 


ü  Fears Russia will not be able to pay its debts mount

ü  China: Businesses shut as officials widen Covid lockdowns

ü  Oil price falls below $100 but petrol hits new high

ü  Cost of living: 'My pay isn't keeping up with rising prices'

ü  Chip giant Arm set to axe 15% of its staff after deal fails

ü  Cargo ship runs aground in U.S., a year after company's other ship
blocked Suez

ü  Trafigura seeks funding as commodity surge triggers margin calls -
Bloomberg News

ü  Wall Street jumps as S&P snaps 3-day slump; Fed on tap

ü  Global carmakers raided by EU; UK also announces probe

ü  Germany wins big as Intel spreads chip investment across six EU countries

ü  Walmart to hire more than 5,000 workers, add two new hubs

ü  Chevron set to trade Venezuelan oil if U.S. relaxes sanctions, sources
say

ü  Tesla raises prices for second time in days on rising costs

ü  After talks with India's Future fail, Amazon goes on the attack in
newspaper ads

ü  JPMorgan to buy Irish fintech firm Global Shares

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 

Fears Russia will not be able to pay its debts mount

Russia may be about to default on its debts after Western sanctions were
imposed in the wake of its invasion of Ukraine.

 

It is due to make $117m in interest payments to investors on two
dollar-denominated bonds on Wednesday.

 

But Russia's access to $630bn (£470bn) of foreign currency reserves has now
been frozen.

 

Credit ratings agencies have warned that a debt default is "imminent".

 

The International Monetary Fund (IMF) has said while it is concerned about
the impact of any Russian debt default, it does not believe this would
trigger a global financial crisis.

 

Why might Russia not be able to pay the debt?

The Russian government - and firms such as Gazprom, Lukoil and Sberbank -
owe about $150bn to overseas investors.

 

Most of this is in either dollars or euros, and Russian institutions are now
barred from accessing dollar or euro assets that are held abroad because of
sanctions.

 

If Russia does default, it will be the country's first debt default since
1998.

 

It would also be its first default on a foreign-currency debt since the 1917
revolution when the new Bolshevik government refused to recognize the debts
of the last tsar.

 

A sign board displays exchange rates in Moscow, Russia as Russian attacks on
Ukraine continue on its fifth day on February 28, 2022. Due to Russian
attacks on Ukraine, many countries began to impose sanctions on the Russian
economy.

 

 

If Russia pays in roubles is this still a default?

Russia's foreign ministry has said it would make payments to international
investors in roubles if it were stopped from paying them in dollars or
euros.

 

Neither of the two dollar-denominated bonds which need to be paid on
Wednesday allow for any other currency to be used.

 

But some of Russia's other debt agreements do allow for different currencies
to be used - in which case paying in roubles could be acceptable.

 

This would depend on whether the rouble payment was judged to be the same
value as the original dollar or euro payment that investors were expecting.

 

What does this mean for banks or countries who are owed money?

Investors in Russia have seen the value of their investments slump in recent
days.

 

The problem for many will have been the swiftness of Russia's fall from
financial grace, which has left them with little time to react by
selling-off their holdings.

 

Credit ratings agency Moody's says that in its 21-point ratings scale, which
indicates how reliable a country is as a place to invest, Russia's rating is
now at its second-lowest, and could fall still further.

 

Moody's chief credit officer, Colin Ellis, told the BBC: "We are signalling
not only that we expect a default but are also telling investors how much
they can lose - and that's consistent with them losing between 35% and 65%
of their money."

 

One result of any official default is that investors could start making
claims on credit default swaps. These act as insurance, and usually
investors will buy them in advance to cover losses if a country or company
subsequently fails to meet its debt obligations.

 

 

What will this mean for the global economy?

The last time that Russia defaulted - in 1998 - it sent shocks through the
financial markets. A default now would be hugely symbolic, but is "unlikely
to have significant ramifications", according to Capital Economics chief
economist William Jackson.

 

The IMF has said it will downgrade its forecast of 4.4% global economic
growth in 2022 as a result of the war. However, IMF head Kristalina
Georgieva has also discounted the idea of a wider shock to the global
financial system from a Russian default.

 

But she warned that the sanctions imposed on Russia would lead to a "deep
recession" there, and that the war would drive up global food and energy
prices.

 

The unknown factor, as yet, is what debt defaults there may be by Russian
firms - and what impact these may have on overseas investors who have
heavily invested in Russia.

 

What impact will defaulting on its debts have on Russia?

Any debt default is likely to exacerbate the financial and economic problems
Russia is now facing.

 

Before it invaded Ukraine, Russia was considered one of the most
creditworthy countries in the world, with low debt levels. But things have
now dramatically changed.

 

Foreign firms have left in droves, and Moscow has already imposed strict
credit controls to limit the outflow of money in order to protect the
economy and the rouble. Despite this, Russia's economy is set to shrink 7%
this year as a result of sanctions.

 

Inflation in February was already 9.15% before the invasion of Ukraine. It
is now forecast to surge significantly this year - despite Russia's central
bank raising interest rates from 9.5% to 20%.-BBC

 

 

China: Businesses shut as officials widen Covid lockdowns

Jilin province has been one of the worst affected by the latest Covid
outbreak in China

Multinational companies have halted some operations as China widens its
Covid lockdowns - among its biggest since the start of the pandemic.

 

Tens of millions of people across the country face restrictions, including
the entire Jilin province and technology hub Shenzhen, as authorities report
record numbers of cases.

 

Toyota, Volkswagen and Apple supplier Foxconn are among the firms affected.

 

The lockdowns have raised concerns that crucial supply chains may be
disrupted.

 

China on Tuesday reported a record high of more than 5,000 cases, most of it
in Jilin.

 

All 24 million residents of the north-eastern province were placed under
quarantine orders on Monday. It is the first time China has restricted an
entire province since the Wuhan and Hebei lockdown at the beginning of the
pandemic.

 

Jilin residents have been banned from moving around, and anyone wanting to
leave the province must apply for police permission.

 

It came a day after a five-day lockdown was placed on the 12.5 million
residents of the southern city of Shenzhen, with all buses and subway
services suspended.

 

On Tuesday authorities in Langfang city which borders the capital Beijing,
as well as Dongguan in the southern province of Guangdong, also imposed
immediate lockdowns.

 

The messy cost of China's harsh lockdown playbook

Why China is still trying to achieve zero Covid

Businesses in many of the affected regions have been told to close or have
their employees work from home, unless they supplied essential services like
food, utilities or other necessities.

 

Foxconn, which manufactures iPhones for Apple, stopped its operations in
Shenzhen on Monday, saying the date of resumption would "be advised by the
local government".

 

But it has several production sites in China and told the BBC it had
"adjusted the production line to minimise the potential impact". Its plant
in Zhengzhou - the world's largest iPhone factory - remains open, as the
city was not hit by the restrictions.

 

Toyota, which shut its factory in Changchun city in Jilin province, did not
give a timeline for when business would resume. The Japanese carmaker told
the BBC that the move was made to consider the "impact of supplier
operation", and the "safety and security of employees and related parties".

 

German carmaker Volkswagen also shuttered operations in Changchun, saying
production of Volkswagen and Audi cars and their components was "affected",
but that it hoped to reopen its factory on Thursday.

 

On Tuesday the Shanghai Composite lost 5% and the Hang Seng index, where
several Chinese technology giants are listed, fell more than 6%.

 

Analysts believe that firms would be able to manage the disruptions. "Such
lockdowns have happened before, and [cities] have re-opened within a short
period of time once the number of Covid cases were within control," Yeang
Cheng Ling, senior investment strategist at Singapore's DBS Bank, told the
BBC.

 

UBS analyst Grace Chen said Shenzhen was not a "major" production site for
suppliers, but it would be worrying if the lockdowns extended to Shanghai
and surrounding areas as the region is a key manufacturing hub for
notebooks, servers and smart devices.

 

It feels like China has gone backwards. Two years backwards. To the early
days of the outbreak that first emerged here.

 

Drastic measures are being imposed - again - on a large scale, to try to
contain the virus. An entire province has been sealed off.

 

The lockdown of Jilin is similar in so many ways to Hubei in early 2020; the
area of China where it all began.

 

Shenzhen, the globally important tech hub (where your iPad was most likely
made) is also a city in lockdown.

 

Shanghai - where I am writing this - home to 24 million people, is a nervous
place. All schools are closed, children are learning online, increasingly
people are working from home.

 

Some compounds where people live are enforcing strict rules on who can come
in. Deliveries are being sprayed with disinfectant again at the gates.

 

It's all part of the ongoing effort to maintain/retain/regain China's
"dynamic zero-Covid" strategy - a goal that has been boosted by the mass
roll-out of China's homemade vaccines, and that has been helped hugely by
effectively shutting China's borders.

 

But now that goal is being significantly undermined by the Omicron variant.

 

Presentational grey line

China has seen relatively fewer cases of Covid due to its strict zero-Covid
policy, where it resorts to rapid lockdowns, mass testing and travel
restrictions whenever clusters have emerged.

 

However the rapid transmissibility of the Omicron variant has made sticking
to that approach increasingly challenging.

 

Since the start of the year, China has reported more domestically
transmitted cases than in the entire 2021.

 

Top Chinese infectious disease expert Zhang Wenhong has called the recent
outbreaks "the most difficult period in the last two years of battling
Covid" and that they were still in "the early stage of an exponential rise",
in an online post widely circulated on social media.

 

But he added that while it was necessary for China to maintain its zero
Covid strategy to control the outbreaks for now, "this does not necessarily
mean we will continue implementing the strategy of lockdowns and mass
testing forever".-BBC

 

 

 

Oil price falls below $100 but petrol hits new high

Motoring groups have called for fuel prices to fall as the cost of crude oil
fell to its lowest level for two weeks.

 

The price of Brent crude - the global benchmark for prices - dropped below
$100 a barrel for the first time since the start of March.

 

The RAC has said it is "vital" that fuel retailers start passing on falling
wholesale prices to consumers.

 

Petrol prices hit another record high on Monday, meaning it costs more than
£90 to fill a family car, the RAC said.

 

The average price of a litre of petrol rose to 163.71p on Monday, and diesel
also hit a fresh record of 173.68p.

 

Oil prices soared after Russia invaded Ukraine, with the price of Brent
crude oil hitting a near 14-year high at one point.

 

But in the past few days, the price of oil has dropped due to a number of
factors, including hopes of progress in ceasefire talks between Russia and
Ukraine, and also expectations that demand from China will ease as Covid
cases there surge.

 

Brent crude fell to about $98 a barrel on Tuesday before recovering some
ground to trade at $100 a barrel.

 

RAC fuel spokesman Simon Williams said that although petrol prices were at
record highs, drivers "should be encouraged" by the fall in oil and
wholesale prices.

 

"It's now vital that the biggest retailers who buy fuel most often start to
reflect these reductions at the pumps to give drivers a much-needed break
from the pain of constantly rising prices," he added.

 

The AA said that the wholesale price of petrol has plummeted by 12.8p a
litre since Wednesday.

 

Luke Bosdet from the AA said: "We should be seeing these record prices level
off and start to fall away later this week. If not, MPs who are being
deluged by complaints from angry constituents, need to be asking questions
in Parliament.

 

"The government is under intense pressure from the cost of living crisis.
They don't need the fuel trade to 'feather' a potential drop in pump
prices."

 

Andrew Opie from the British Retail Consortium said supermarket retailers
"understand the cost pressures" facing motorists, and will do "everything
they can to offer the best value-for-money across petrol forecourts,
particularly if the price of oil falls".

 

The Petrol Retailers Association, which represents independent forecourts,
said it would expect prices to fall when fresh stock is delivered.

 

Gordon Balmer, the PRA's Executive Director, said forecourts bought from
suppliers based on a price with one or two days' lag, or in some cases a
week's lag. This means it can take a few days for wholesale prices to filter
through to the pumps.

 

Global shifts in price

Oil prices are mainly determined by the price of crude oil and the dollar
exchange rate, as agreements are made in dollars.

 

Russia is the third largest oil exporter and some Western countries, for
example the US and Canada, decided to halt imports from the country in
response to Russia's actions. It means demand for oil from other producers
has increased, leading to increased prices.

 

The UK only imports about 6% of oil from Russia, so is not as dependent on
Russia for the commodity supply as other European countries are and has said
it plans to phase it out.

 

It is, however, affected by the global shifts in price.

 

graphic showing costs making up a litre of petrol

On Monday, some analysts told MPs on the Treasury Committee that they
expected the recent fall in the oil price to be temporary.

 

Nathan Piper, head of oil and gas research at financial services company
Investec, said further restrictions on Russian oil exports would mean
consumers "need to get ready for what could be continued increases in fuel
prices."

 

Dr Amrita Sen, director of research at Energy Aspects, told the committee
that petrol prices could rise to around £2.40 a litre. And that diesel
prices of "£2.50 - even closer to £3" were "definitely in the realms of
possibility".

 

Energy Minister Greg Hands has said the UK's transition to cleaner forms of
energy production is now "an issue of national security" and not just of
decarbonisation.

 

More on this story-BBC

 

 

 

Cost of living: 'My pay isn't keeping up with rising prices'

UK wage growth failed to keep up with the rising cost of living between
November and January, new figures show.

 

Wages rose, but when taking rising prices into account, regular pay showed a
1% fall from a year earlier, the Office for National Statistics said.

 

Gamu Nyasoro, a senior registered nurse, told the BBC that despite a recent
pay rise, she has barely noticed a difference in her income after bills.

 

There is concern the Ukraine war will further push up energy and food bills.

 

The new employment figures also show that the number of jobless people in
the UK has dropped below pre-pandemic levels.

 

The ONS said there were 1.34 million unemployed in the three months to
January, below the 1.36 million recorded in December to February 2020.

 

 

The unemployment rate fell to 3.9% in the most recent quarter, while job
vacancies hit another record high.

 

But according to the ONS, employees' regular pay, excluding bonuses, grew by
3.8% between November and January from a year earlier.

 

However, the rising cost of food, energy and household goods has pushed
inflation, which measures how the cost of living changes over time, to a
30-year high. Prices surged by 5.5% in the 12 months to January, up from
5.4% in December, increasing pressure on household budgets.

 

The Resolution Foundation think tank has warned that the squeeze on workers
will get worse, with those on the lowest incomes most likely to be affected
by surging bills.

 

The ONS said its latest figures showed the number of unemployed people fell
below pre-pandemic levels for the first time, while there was another strong
rise in the number of pay-rolled employees in February.

 

Grant Fitzner, chief economist at the ONS, added: "However, the number of
people out of work and not looking for a job rose again, meaning total
employment remained well below its pre-pandemic level.

 

"We have seen yet another record number of job vacancies, and with the
redundancy rate falling to a new record low, demand for workers remains
strong."

 

The ONS said early estimates for February 2022 indicated that median monthly
pay was £2,041, an increase of 5.1% compared with the same period last year.

 

"The issue is not that pay growth is weak, it's that prices are running even
higher," Mr Fitzner told the BBC's Today programme.

 

Recent research by the Institute for Fiscal Studies suggested that public
sector workers in particular are facing pay cuts once rising prices are
taken into account.-BBC

 

 

 

Chip giant Arm set to axe 15% of its staff after deal fails

UK computer chip designer Arm Holdings has said it plans to cut up to 15% of
its workforce.

 

The redundancies have emerged just a month after the collapse of the firm's
$40bn sale to US chipmaker Nvidia.

 

If the proposals go ahead most job losses would be in the UK and the US, the
Cambridge-based company said.

 

Arm's chip designs are licensed to brands including Apple and Samsung and
are used in most smart phones and other products around the world.

 

Arm employs close to 6,400 people worldwide. The company said in a
statement: "Like any business, Arm is continually reviewing its business
plan to ensure the company has the right balance between opportunities and
cost discipline.

 

"Unfortunately, this process includes proposed redundancies across Arm's
global workforce."

 

UK chip firm sale collapses amid competition fears

Arm boss: We can do it by ourselves

ARM: Can 'crown jewel' of UK technology be protected?

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

 

As sales of devices soared during the pandemic, stocks of chips plunged
which has left manufacturers struggling to keep up with demand.

 

Arm's owner Softbank - the Japanese conglomerate which bought the UK company
in 2016 for $32bn - had planned to sell the firm to Nvidia for $40bn.

 

However, last month SoftBank shelved the sale citing regulatory hurdles and
said it would instead seek to list the company.

 

In the blow to the UK, Softbank said its would list Arm on the Nasdaq stock
exchange in the US.-BBC

 

 

 

Cargo ship runs aground in U.S., a year after company's other ship blocked
Suez

(Reuters) - The Ever Forward container ship is currently grounded in the
Chesapeake Bay near Baltimore, according to the U.S. Coast Guard, nearly a
year after another ship run by the same company blocked the Suez Canal for
six days.

 

The container ship is operated by Evergreen Marine Corp Taiwan Ltd
(2603.TW), the same Taiwanese transportation company that operates the Ever
Given. The Ever Given ran aground last March, blocking traffic in the Suez
Canal, one of the world's busiest waterways and the shortest shipping route
between Europe and Asia. read more

 

The Coast Guard received reports on Sunday that the Ever Forward was
grounded and is now conducting checks every four hours to ensure the safety
of the crew on board and marine life, according to Petty Officer 3rd Class
Breanna Centeno.

 

 

The Coast Guard says the ship is grounded outside of the canal and is not
blocking the traffic of other container ships.

 

A representative for Evergreen Marine could not immediately be reached for
comment.

 

 

 

Trafigura seeks funding as commodity surge triggers margin calls - Bloomberg
News

(Reuters) - Global commodities trader Trafigura Group has been holding talks
with private equity groups to secure additional financing as soaring prices
trigger margin calls across the commodities industry, Bloomberg News
reported on Tuesday.

 

Trafigura faced margin calls in the billions of dollars last week, the
report said, citing people familiar with the matter.

 

The increased margin calls – essentially requests to deposit extra funds
with brokers – come amid supercharged volatility in raw materials prices
after the invasion of Ukraine by commodities-export giant Russia sparked
sanctions from the United States and it allies. read more

 

Trafigura had held talks with Blackstone Inc (BX.N) for an investment of
around $2 billion to $3 billion in preference shares or a similar hybrid
instrument, the report said, adding that the talks, however, failed and no
deal was made.

 

Blackstone declined a Reuters request for comment.

 

The report also said Trafigura approached Apollo Global Management Inc
(APO.N), BlackRock Inc (BLK.N) and KKR & Co (KKR.N) to seek new funding.

 

"As part of a longer-term strategy to diversify our sources of finance, we
have been building relationships with alternative providers of capital,"
Trafigura said in an emailed statement to Reuters. "We regularly engage with
alternative capital providers on debt and equity opportunities across the
business."

 

Apollo, KKR and BlackRock also declined to comment.

 

Earlier this month, Trafigura said it raised a $1.2 billion revolving credit
facility from a consortium of banks to increase its financing pool in order
to handle soaring energy and commodity prices. 

 

 

 

Wall Street jumps as S&P snaps 3-day slump; Fed on tap

(Reuters) - U.S. stocks rallied on Tuesday and the S&P 500 ended a 3-day
skid as another drop in oil prices and a softer-than-expected reading on
producer prices helped ease inflation fears among investors, with the focus
turning to the Federal Reserve's upcoming policy announcement.

 

Brent crude settled below $100 a barrel after rocketing higher to more than
$139 last week, providing some temporary relief for equity investors that
have seen stocks come under pressure this year from surging inflation
concerns, uncertainty over the Fed's policy path to tame rising prices and
more recently, escalating conflict in Ukraine. read more

 

U.S. producer prices increased solidly in February as the cost of goods like
gasoline surged, and further gains are in the pipeline following Russia's
invasion of Ukraine, which has made crude oil and other commodities more
expensive. read more

 

Still, the data for the 12 months through February matched expectations
predicting a 10% increase in producer prices, while the producer price index
for final demand on a monthly basis increased 0.8%, just shy of the 0.9%
estimate and lower than the 1.2% increase registered in January.

 

The market is now fully pricing in a rate hike of at least 25 basis points
when the central bank makes its policy statement on Wednesday. Investors
will also be closely watching the Fed's projections for the path of rate
hikes this year and in coming years to rein in inflation. IRPR

 

Fed Chairman Jerome Powell has recently floated multiple rate hikes this
year as the Fed seeks to curb inflation.

 

"The fact is (PPI) was weaker than the expectation so therefore the idea
that Jay Powell is right going 25 basis points seems to be the way the
market feels today, that could change tomorrow," said Ken Polcari, managing
partner at Kace Capital Advisors in Boca Raton, Florida.

 

"The market is in a very oversold position, there are still going to be
bumpy roads ahead but today could just be one of those snap-back rallies
like we saw last week."

 

The Dow Jones Industrial Average (.DJI) rose 599.1 points, or 1.82%, to
33,544.34, the S&P 500 (.SPX) gained 89.34 points, or 2.14%, to 4,262.45 and
the Nasdaq Composite (.IXIC) added 367.40 points, or 2.92%, to 12,948.62.

 

The S&P 500 slumped about 2.4% in the prior three sessions and recently
joined the Dow, Nasdaq and Russell 2000 (.RUT) in forming a "death cross"
technical pattern, when a short-term moving average crosses below a
longer-term moving average, which some investors believe signals more
near-term weakness is likely.

 

Ten of the 11 major S&P sectors advanced, with technology (.SPLRCT) and
consumer discretionary (.SPLRCD) stocks leading the way while energy
(.SPNY), the sole positive sector on the year, slumped nearly 4% on the day
along with crude prices.

 

Megacap growth stocks gained with Microsoft Corp (MSFT.O) up 3.87% and Apple
(AAPL.O) up 2.97%, providing the biggest boosts to the S&P 500 and the
Nasdaq.

 

Meanwhile, investors also closely tracked a steep jump in daily COVID-19
infections in China for the possibility of denting global economic growth,
and progress in Ukraine-Russia talks to end their weeks-long conflict. read
more

 

In the latest hint at compromise, Ukrainian President Volodymyr Zelenskiy
said Kyiv was prepared to accept security guarantees that stop short of its
long-term objective of the NATO alliance membership, which Moscow opposes.
read more

 

Delta Air Lines Inc (DAL.N) gained 8.70% and United Airlines jumped 9.19%
after the U.S. carriers raised their current-quarter revenue forecasts, even
as they trimmed capacity. The Arca Airline index climbed 5.57%. read more

 

Volume on U.S. exchanges was 13.46 billion shares, compared with the 13.78
billion average for the full session over the last 20 trading days.

 

Advancing issues outnumbered declining ones on the NYSE by a 2.07-to-1
ratio; on Nasdaq, a 1.72-to-1 ratio favored advancers.

 

The S&P 500 posted 12 new 52-week highs and 8 new lows; the Nasdaq Composite
recorded 21 new highs and 386 new lows.

 

 

 

 

Global carmakers raided by EU; UK also announces probe

(Reuters) - EU antitrust regulators on Tuesday raided several automotive
companies and associations in several countries on suspicion of breaching
the bloc's cartel rules, while Britain's competition authority also launched
a probe.

 

The European Commission also sent companies requests for information, it
said without disclosing company names.

 

"The inspections and requests for information concern possible collusion in
relation to the collection, treatment and recovery of end-of-life cars and
vans which are considered waste," the EU competition enforcer said in a
statement.

 

 

Renault (RENA.PA) said it "confirms that it was visited today by European
Commission investigators" and that it was cooperating fully.

 

Opel, a brand of world No. 4 carmaker Stellantis (STLA.MI), said its offices
had been searched by investigators.

 

"The subject of investigation is the area of recycling end-of-life
vehicles," Opel said in a statement. "Of course, we cooperate fully with the
authorities."

 

German carmaker BMW said it had received a request for information and would
respond.

 

Mercedes Benz (MBGn.DE) said it did not expect to be fined because it had
approached the EU regulator and Britain's Competition and Markets Authority
with information as a "leniency applicant."

 

The CMA said it was investigating a number of unnamed automakers and some
industry bodies in its own end-of-life vehicle probe, and that it was
cooperating with the Commission. read more Ford (F.N) said in a statement
that it had been served with a notice by CMA "relating to the recycling of
old or written-off vehicles, specifically cars and vans, also known as
end-of-life vehicles".

 

"Given the situation is ongoing it would be inappropriate for us to say more
at this stage except to state that we will fully cooperate with the CMA's
review," the U.S. carmaker said.

 

Volkswagen (VOWG_p.DE) and its premium brand Audi both declined to comment.
A spokesman for Ferrari (RACE.MI)said the carmaker had not been raided by
investigators.

 

Companies found breaching EU cartel rules face fines up to 10% of their
global turnover.

 

The Commission has in the past decade issued fines totalling about 2.2
billion euros ($2.4 billion) against car parts cartels dealing in products
ranging from brakes to wire harnesses, seat belts and air bags.

 

($1 = 0.9105 euro)

 

The Thomson Reuters Trust Principles.

 

 

Germany wins big as Intel spreads chip investment across six EU countries

(Reuters) - Intel has picked Germany as the site for a huge new chipmaking
complex, giving the first details of a $88 billion investment drive across
Europe, which is striving to cut its reliance on imports and ease a supply
crunch for manufacturers.

 

The plan is the latest big investment announcement by a major semiconductor
maker as the industry tries to catch up with a boom in demand for chips used
in everything from smartphones to cars, though there will be no quick fix as
the new German plants won't come online until 2027.

 

The U.S. chipmaker is spreading its investments in Europe around half a
dozen countries, including boosting its existing factory in Ireland, setting
up a design and research facility in France, and a packaging and assembly
site in Italy.

 

The initial spending will total 33 billion euros ($36 billion), including 17
billion euros in Germany, where the auto industry is likely to be a prime
customer for cutting-edge chips that could use technology as small as
2-nanometers.

 

German automaker Volkswagen (VOWG_p.DE) highlighted the pain caused by chip
shortages on Tuesday, saying it sold 2 million fewer cars than planned last
year due to the issue. read more

 

Intel's announcement comes after the European Commission last month set out
plans to encourage chip manufacturing in the European Union, with proposed
new legislation to ease state aid rules for chip factories and enable $17
billion in additional public and private investment. read more

 

Chipmakers are looking to build more factories to make advanced chips for
use in premium smartphones like Apple's latest iPhones that use chips with
5-nanometer technology. A nanometer is just several atoms wide.

 

Bernstein Research analyst Stacy Rasgon was confident Intel could manage the
roll out of investments to match demand going forward, and was positive on
expanding with government subsidies.

 

"(Intel) is using capacity as a strategic weapon ... Part of the strategy
right now is to go around the world and beg for money," Rasgon said. "If
there's any time to run around the world begging for money to build
semiconductor manufacturing facilities now is the time."

 

BIG INCENTIVES

 

Germany has come out as the big winner by cornering the bulk of Intel's
investment but CEO Pat Gelsinger declined to say the amount of state aid the
company is getting from the country.

 

Intel will build two factories in Magdeburg, Germany, creating 7,000
construction jobs, 3,000 permanent jobs at the company, and tens of
thousands of additional jobs across suppliers and partners, it said.

 

Gelsinger said Intel wants to spend the remaining money from its planned 80
billion euro investment over the next 10 years to build out the complete
Magdeburg site and further develop the sites in Italy and France.

 

The company will invest an additional 12 billion euros in an existing Irish
facility which will take its total investment in Ireland to more than 30
billion euros.

 

It is also in talks with Italy for a chip assembly and packaging plant for a
potential investment of up to 4.5 billion euros, expected to start
operations between 2025 and 2027.

 

In France, Intel plans to build its new European research hub, creating
1,000 new high-tech jobs.

 

The company will also increase its lab space in Poland and plans to
establish joint labs with the Barcelona Supercomputing Center in Spain for
advanced computing.

 

Gelsinger had announced plans in September to spend $88 billion in Europe
over the next decade, and the choice of sites comes after some EU
governments including Italy offered big incentives to try and woo the
chipmaker to invest in their countries. read more

 

Spreading its factories around different locations could help the company
get more subsidies from different countries.

 

But Intel will have to negotiate with each European country where it's
locating facilities for state aid, European Industry Commissioner Thierry
Breton told journalists.

 

He also said the Commission was talking with other chipmakers and hoping to
make similar announcements in the coming months, but did not provide
details.

 

($1 = 0.9098 euro) 

 

The Thomson Reuters Trust Principles.

 

 

 

Walmart to hire more than 5,000 workers, add two new hubs

(Reuters) - U.S. retail chain Walmart Inc (WMT.N) plans to hire more than
5,000 new associates globally to its tech hubs during the current fiscal
year, the company said on Tuesday.

 

The company's technology unit Walmart Global Tech would be hiring for
positions such as cybersecurity professional, product manager and data
scientist, among others.

 

Walmart Global Tech will also add two new global tech hubs in Toronto and
Atlanta, taking the total count to 17, according to a Walmart spokeswoman.

 

The Thomson Reuters Trust Principles.

 

 

 

Chevron set to trade Venezuelan oil if U.S. relaxes sanctions, sources say

(Reuters) - Chevron Corp. is preparing to take operating control of its
joint ventures in Venezuela if Washington relaxes sanctions on Caracas to
boost crude supplies after banning Russia's oil imports, according to three
people familiar with the situation.

 

The U.S. oil major has begun assembling a trading team to market oil from
Venezuela, two of the people said. If U.S. approvals are received, Chevron
aims to expand its role in the four joint ventures it shares with state-run
company PDVSA, they added.

 

Chevron has asked the U.S. government for a license broad enough to have a
greater say at its joint ventures in Venezuela, a first step to recovering
crude output and exports, and to control where oil is sent, the three people
said. Since 2020, Chevron has delegated most decision making to state-run
PDVSA.

 

U.S. officials have made clear, however, that any new authorization will
depend on whether Venezuelan President Nicolas Maduro takes further
political steps, two sources said, such as releasing more jailed Americans
and setting a firm date for resuming negotiations with the Venezuelan
opposition.

 

Chevron's proposed moves could revitalize Venezuela's oil output and exports
after years of underinvestment and sanctions shrank it to about 755,000
barrels per day (bpd) last month from 2.3 million bpd in 2016. Chevron's
joint ventures with PDVSA had produced about 200,000 bpd before U.S.
sanctions and lack of financing cut their output.

 

LOGISTICS TEAM

 

A date has not been set for issuing the authorization. But Chevron has begun
preparations for employees to get Venezuelan visas in Aruba, ready to head
to Caracas if the U.S. Treasury eases restrictions, the people said.

 

Last week, U.S. President Joe Biden banned U.S. imports of Russian oil,
adding to an array of sanctions after Russia invaded Ukraine, an action
Moscow has called a "special military operation."

 

Chevron aims to begin moving Venezuelan oil to refineries as soon as next
month. Last week's U.S. ban on Russian imports allows oil under existing
contracts to arrive in the country through April 22.

 

"Since Venezuelan barrels were banned in the United States in 2019, and
Colombia and Mexico reduced key exports to the United States, Russian
barrels have been feeding the Gulf refiners", said one person involved in
the talks.

 

Chevron had vastly reduced its presence in Venezuela after Washington
tightened sanctions on Venezuela in 2020. For years, Chevron and other PDVSA
venture partners have requested more operating oversight.

 

The United States is drafting a new license that would allow Chevron to
assume a more active role in Venezuela, a person familiar with the matter
said. Washington is considering similar oil-for-debt authorizations for
Spain's Repsol (REP.MC) and Italy's Eni SpA . They collectively are owed
billions of dollars by their Venezuela joint ventures.

 

Chevron declined to comment, but reiterated in a statement its operations in
Venezuela comply with U.S. sanctions and remain "a constructive presence in
Venezuela."

 

PDVSA and Venezuela's oil ministry did not reply to requests for comment.

 

A State Department spokesperson said the U.S. government "does not preview
sanctions actions" but added: "We have made clear that we would review some
sanctions policies if the Venezuelan parties made meaningful progress in the
Venezuelan-led negotiations in Mexico toward a democratic solution."

 

The U.S. Treasury Department did not immediately respond to a request for
comment.

 

POLITICAL TALKS

 

This month, Washington quietly restarted diplomatic engagement with
Venezuela, a close ally of Russia. Last week, Maduro released two jailed
Americans, and Washington has insisted others also be freed. Maduro has
expressed a willingness to resume a dialogue with the opposition after he
suspended talks in Mexico in October. U.S. officials want a firm commitment
to discussing free elections.

 

On Sunday, U.S. national security adviser Jake Sullivan told NBC any
sanctions relief for Venezuela must be tied to "concrete steps" by Maduro.

 

The Biden administration had not previously made Venezuela a foreign policy
priority. That changed when Middle East and U.S. shale producers would not
boost their crude supplies when the White House asked them to do so after
the Ukraine invasion.

 

Congressional Republicans and even some of Biden's fellow Democrats such as
U.S. Senator Bob Menendez have opposed any deal that would benefit the
socialist president. Washington condemned Maduro's 2018 re-election as a
sham.

 

The United States imported 670,000 barrels per day (bpd) of Russian oil and
fuel last year. One of the few countries in a position to replace those
imports is Venezuela. Before sanctions, its oil went mainly to U.S. Gulf
Coast refiners. read more

 

TIMELY APPROVAL

 

Chevron-marketed barrels could help PBF Energy (PBF.N), Valero Energy
(VLO.N), and Phillips 66 (PSX.N) fill their supply gap, the source said. All
have operations geared to run heavy oils.

 

Chevron has held parallel talks with PDVSA to expand its joint ventures'
governance. Any agreements likely would be temporary unless Venezuela enacts
deep reforms of its oil legislation, which require PDVSA to be the majority
stakeholder in any joint venture.

 

While PDVSA President Asdrubal Chavez supports an expanded operating role
for Chevron, some Venezuelan top officials resist the change, three sources
familiar with the matter said.

 

Venezuela holds about 300 billion barrels of oil reserves, the world's
largest, but has not been able to hit its production targets due to
underinvestment, poor maintenance, lack of supplies and U.S. sanctions. read
more

 

The Thomson Reuters Trust Principles.

 

 

 

Tesla raises prices for second time in days on rising costs

(Reuters) - Tesla Inc (TSLA.O) raised its prices in China and the United
States for the second time in less than a week, after CEO Elon Musk said the
U.S. electric carmaker was facing significant inflationary pressure in raw
materials and logistics.

 

The increases come as costs of raw materials are surging, exacerbated by
supply chain disruptions following Russia's invasion of Ukraine.

 

Prices of metals used in cars have soared, including aluminum that is used
in the bodywork, palladium used in catalytic converters, and nickel and
lithium that power electric vehicle (EV) batteries.

 

The costs have raised concerns about EV economics, as legacy automakers and
startups prepare to launch new cars on the back of a long semiconductor
supply crunch that is still knocking production at companies including
Toyota (7203.T) and Volkswagen (VOWG_p.DE). read more

 

Tesla, which has a diversified supply chain, has bought "millions of euros
worth of aluminum" from Russian aluminium giant Rusal, CNBC reported on
Monday, citing internal documents.

 

Rusal's billionaire founder Oleg Deripaska has been sanctioned by Britain.

 

Tesla bought Rusal aluminum for casting parts at its new vehicle assembly
plant outside of Berlin for the Tesla Model Y, among other things, CNBC
said.

 

Tesla received a conditional go-ahead for its 5 billion euro ($5.5 billion)
German gigafactory earlier this month after months of delay. read more

 

Tesla and Rusal did not immediately respond to emails seeking comment.

 

"Tesla & SpaceX are seeing significant recent inflation pressure in raw
materials & logistics," Musk tweeted on Monday, referring to his rocket
company. "And we are not alone," he said. read more

 

Tesla raised prices on Tuesday for all its models in the United States by
5%-10%, its website showed. In China, it raised prices of some China-made
Model 3 and Model Y products by about 5%.

 

Last week, the company increased prices of its U.S. Model Y SUVs and Model 3
Long Range sedans and some China-made Model 3 and Model Y vehicles. read
more

 

($1 = 0.9095 euros)

 

The Thomson Reuters Trust Principles.

 

 

After talks with India's Future fail, Amazon goes on the attack in newspaper
ads

(Reuters) - Amazon.com Inc said talks have failed to resolve a bitter
dispute over Future Retail (FRTL.NS) stores and accused both it and Reliance
Industries (RELI.NS) of fraud in Indian newspaper ads on Tuesday.

 

The U.S. e-commerce giant has been contesting a $3.4 billion sale of Future
Group's retail assets to the Reliance conglomerate that was announced in
2020, and the case is currently before the Indian Supreme Court.

 

"I regret to say that we made efforts but I think nothing is possible by way
of resolution," Amazon's lawyer Gopal Subramanium told the court. "The
conversation is over."

 

Reliance, also India's biggest retailer, stunned Amazon when it began taking
over prized real estate on Feb.25 with its staff suddenly showing up at many
of Future's biggest stores to assume control, sources have told Reuters.
read more

 

In earlier legal wrangling, Amazon had managed to block the sale of the
retail assets.

 

But Reliance's sudden possession of more than 900 Future stores have landed
what some analysts are calling a coup de grace that spoils Amazon's chances
of untangling the transfer of Future's assets.

 

After the first seizures of stores, Amazon proposed talks separate from the
Supreme Court hearing to resolve the issue but on Tuesday, lawyers for both
Amazon and Future agreed those negotiations had collapsed.

 

Amazon had at the Supreme Court been seeking to return the legal dispute to
arbitration in Singapore after Future had successfully obtained an Indian
court order to stay those proceedings. On Tuesday, Future said it was not
opposed to arbitration in Singapore.

 

Earlier in the day, Amazon had run large ads in leading Indian newspapers
headlined "PUBLIC NOTICE" and saying that actions taken by Reliance and
Future "have been done in a clandestine manner by playing a fraud on the
constitutional courts in India."

 

Future lawyer Harish Salve told the Supreme Court on Tuesday that the
company did not transfer the stores to Reliance voluntarily.

 

Future has said in filings this month that it could not pay rent at many
outlets given its distressed financial situation and that Reliance, which
had taken over many of its leases, had issued it with termination notices.

 

Reliance has not responded to a Reuters request for comment.

 

The newspaper ads were aimed at alerting all stakeholders, including
Future's lenders, that the transfer of assets to Reliance is legally
prohibited, according to a source with direct knowledge of the matter. The
source was not authorised to speak to media and declined to be identified.

 

 

 

JPMorgan to buy Irish fintech firm Global Shares

(Reuters) - JPMorgan Chase & Co (JPM.N) said on Tuesday it would buy Global
Shares, an Irish fintech firm whose software helps businesses manage
employee stock plans.

 

The deal, the terms of which were not disclosed, was expected to close in
the second half of this year.

 

Founded in 2005, Global Shares manages nearly $200 billion in assets and its
cloud-based platform is used by more than 600 clients.

 

The U.S. bank plans to integrate the company into its asset and wealth
management business, according to a statement. Global Shares will remain
headquartered in Cork, Ireland.

 

The Thomson Reuters Trust Principles.

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2022

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

 

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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

 


 

 


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<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
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