Major International Business Headlines Brief::: 02 November 2022

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Major International Business Headlines Brief::: 02 November 2022 

 


 

 


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ü  China Covid: Area around world's biggest iPhone plant locked down

ü  Elon Musk says $8 monthly fee for Twitter blue tick

ü  Manchester Arena's weapon scanning tech questioned

ü  Cyber-attacks on small firms: The US economy's 'Achilles heel'?

ü  Royal Mail postal workers to strike on Black Friday

ü  BP profit jump sparks calls for bigger windfall tax

ü  Pandemic furniture star Made.com nears collapse

ü  Bank makes history as it reverses quantitative easing

ü  Four areas added to banking hubs waiting list

ü  Morrisons to close 132 McColl's stores putting jobs at risk

ü  Banker Oleg Tinkov renounces Russian citizenship over Ukraine

ü  House prices fall after mini-budget, says Nationwide

ü  Tanzania Penetrates U.S. Cashew Nut Market

ü  Kenya: Digital Solutions Are Boosting Agriculture in Kenya, but It's Time
to Scale Up. Here's How

ü  Nigeria: Redesigning Naira Won't Check Rising Inflation - Analysts

ü  Nigeria, Others Move to End Tax Incentives, Waivers to High Net Worth
Individuals, Businesses

ü  Africa: Oil and Gas - Can Africa Capitalise On the OPEC+ Resolution

 


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China Covid: Area around world's biggest iPhone plant locked down

Chinese authorities have locked down a district in Zhengzhou city - which is
home to the world's largest iPhone factory - under the country's strict
coronavirus measures.

 

The lockdown started on Wednesday and is set to last for seven days.

 

The move may have an impact on production of the new iPhone 14, which is
made at Foxconn's plant in the city.

 

Chinese people and businesses are continuing to grapple with President Xi
Jinping's rigid zero-Covid policy.

 

On Wednesday, local authorities said the lockdown of the Zhengzhou Airport
Economy Zone would start immediately and end at midday local time on 9
November.

 

Public transport services have been suspended and people advised to work
from home, according to an official notice on the WeChat social media
platform.

 

Officials said they would "resolutely crack down on all kinds of violations
of regulations".

 

Zhengzhou is the capital of Henan province in central China, which is home
to about 10 million people.

 

It reported 167 locally transmitted infections in the seven days to last
Saturday - up from 97 in the previous week.

 

The lockdown comes at a key time for Apple, shortly after the launch of the
iPhone 14 and ahead of the crucial Christmas and Lunar New Year shopping
seasons.

 

Foxconn's Zhengzhou plant, which employs around 200,000 workers, produces
the majority of Apple's new phones.

 

On Tuesday, Foxconn said it had quadrupled its daily bonuses at the
manufacturing hub after a breakout by workers during a Covid lockdown.

 

The firm said bonuses for assembly line workers will be raised to 400 yuan
($55.02; £47.76) a day.

 

Foxconn also said that people who worked for more than 25 days a month at
the factory would be awarded a maximum bonus of 5,000 yuan, up from 1,500
yuan.

 

It added that those who put in their "full effort" in November - without
taking any leave - could be paid a total bonus of more than 15,000 yuan for
the month.

 

The company said the bonuses were part of an effort to "gradually resume
orderly production" and "thank our fellow employees' persistence".

 

It has not yet provided an official count of how many people had been
infected by the coronavirus at the plant.

 

Foxconn employees take shuttle buses to head home in Zhengzhou in the Henan
province of China.

 

 

Last Wednesday, Foxconn said a "small number of employees" in Zhengzhou had
been "affected by the pandemic" and were being provided with "material
supplies, psychological comfort and responsive feedback".

 

"At present, the epidemic prevention work in Zhengzhou is progressing
steadily, and the impact on the group is controllable. The operating outlook
for this quarter remains unchanged," it added.

 

However, footage shared on Chinese social media, and by the BBC's China
correspondent Stephen McDonell, showed that workers were allegedly filmed
escaping from the grounds to begin lengthy walks back to their hometowns, in
a bid to avoid being caught on public transport.

 

One 22-year-old worker, surnamed Xia, told the Financial Times it was "total
chaos in the dormitories" he and colleagues were being kept in.

 

Workers also claimed that the area surrounding the plant had been locked
down for days, with Covid-positive workers being quarantined and tested
daily to try to contain the outbreak.

 

On Sunday Foxconn said it would no longer require workers at the plant to
eat meals in their rooms "to improve the convenience and satisfaction of
employees' lives".

 

The firm added that it was working with the local government to provide a
"point-to-point orderly return service" for workers who wanted to go home.

 

It is unclear how workers will now be able to return home after the district
was locked down. Foxconn and Apple did not immediately respond to a BBC
request for comment.

 

Other businesses in China have been hit by coronavirus outbreaks in recent
days.

 

Earlier on Wednesday Chinese electric vehicle maker Nio confirmed that it
had suspended production at two of its factories in the eastern city of
Hefei.

 

This week the firm reported that it had delivered more than 10,000 vehicles
in October.

 

It said the figures were "constrained by operation challenges in our plants
as well as supply chain volatilities due to the Covid-19 situations in
certain regions in China".-BBC

 

 

 

Elon Musk says $8 monthly fee for Twitter blue tick

Elon Musk has said Twitter will charge $8 (£7) monthly to Twitter users who
want a blue tick by their name indicating a verified account.

 

As part of changes after a $44bn (£38bn) takeover of the social media site,
Mr Musk said it was "essential to defeat spam/scam".

 

A blue tick mark next to a username - normally for high-profile figures - is
currently free.

 

The move could make it harder to identify reliable sources, say critics.

 

Mr Musk, the world's richest person, added that paid users would have
priority in replies and searches, and half as many advertisements.

 

"Power to the people! Blue for $8/month," the billionaire said on Twitter,
criticising the old method of blue tick verification as a "lords and
peasants system".

 

Twitter's former method of verifying users for a blue tick included a short
online application form, and was reserved for those whose identities were
targets for impersonation, such as celebrities, politicians and journalists.

 

The company introduced the system in 2009, after it faced a lawsuit accusing
it of not doing enough to prevent imposter accounts.

 

But Mr Musk is facing a hefty challenge as he works to overhaul Twitter's
business, which has not posted a profit in years.

 

He has said he wants to reduce Twitter's reliance on advertising, even as
some companies have grown concerned about advertising on the site under his
leadership.

 

Elon Musk buys Twitter in billion dollar deal

What next for Twitter?

General Motors - a rival of Mr Musk's electric car company Tesla - said last
week it was suspending advertising on the site.

 

Meanwhile, some other major brands have more quietly put a temporary halt to
advertising on the platform as they wait to see how Mr Musk's changes play
out, a media buyer for a leading advertising firm told the BBC.

 

On Monday, one of the world's biggest advertising companies, IPG, advised
its clients to suspend Twitter adverts for a week, citing a need for more
clarity on the Twitter's plans to ensure "trust and safety" on the platform.
IPG is given billions of pounds per year, by some of the world's biggest
brands, to handle their marketing budgets.

 

The charge for blue tick privileges drew scepticism after original reports
that said the charge could be $20 (£18) monthly.

 

Many on the platform echoed the statement of author Stephen King, who wrote
in response to reports of changes that instead Twitter "should pay me".

 

Mr Musk wrote to Mr King saying, "We need to pay the bills somehow!"-BBC

 

 

 

 

Manchester Arena's weapon scanning tech questioned

Some of the world's biggest venues, including Manchester Arena, are using
weapons scanners "incapable" of detecting some large knives.

 

Evolv, a company that sells artificial-intelligence (AI) scanners, claims
they can detect all weapons.

 

But documents shared with BBC News by research firm IPVM suggest they may
fail to detect certain types of knives, as well as some bombs and
components.

 

Evolv told BBC News it had told venues of all "capabilities and
limitations".

 

Marion Oswald, of the government's Centre for Data Ethics and Innovation,
told BBC News: "There needs to be more public information and more
independent evaluation of these systems before they are rolled out in the
UK.

 

"At the end of the day, they are potentially replacing methods of metal
detection and physical searches that have been tried and tested."

 

Expressed doubts

AI and machine learning enable the scanners to create unique "signatures" of
weapons that differentiate them from items such as computers or keys, Evolv
says, reducing manual checks and preventing long queues.

 

"Metallic composition, shape, fragmentation - we have tens of thousands of
these signatures, for all the weapons that are out there," chief executive
Peter George said last year, "all the guns, all the bombs and all the large
tactical knives."

 

For several years, independent security experts have expressed doubts about
some of Evolv's claims.

 

The company has previously refused to let IPVM test its technology, Evolv
Express.

 

But last year, it gave permission to the National Center for Spectator
Sports Safety and Security (NCS4).

 

NCS4's public report, published earlier this year, gave Evolv a score of
2.84 out of three - many types of guns were detected 100% of the time.

 

But it also produced a private report, obtained via a Freedom of Information
request by IPVM and shared with BBC News along with emails between Evolv and
NCS4.

 

And it gave Evolv's ability to detect large knives a score of just 1.3 out
of 3.

 

In 24 walkthroughs, Evolv Express failed to detect large knives 42% of the
time.

 

"The system was incapable of detecting every knife on the sensitivity level
observed during the exercise," the report says.

 

"Recommend full transparency to potential customers, based on data
collected."

 

IPVM's Conor Healy said: "For certain categories of knives, the system
didn't detect them at all when they were brought through. And that
completely conflicts with what Evolv has told the public."

 

NCS4's report does not say, and BBC News is not reporting, what types of
large knives the technology failed to detect

 

And for security reasons, BBC News is reporting no further details about the
documents' suggestion it may also fail to detect certain types of bombs and
their components.

 

ASM Global, which owns Manchester Arena, has said its use of Evolv Express
is the "first such deployment at an arena in Europe" and it plans to roll
the technology out to other venues.

 

In 2017, a man detonated a bomb at an Ariana Grande concert in the arena,
killing 22 people and injuring hundreds more, many of them children.

 

Asked whether the private report's conclusions had been passed on, an ASM
Global official told BBC News it did not wish to comment on security
matters.

 

Emails obtained by IPVM show Evolv employees had been allowed to make
"tracked changes" to the report - deleting certain sections.

 

In one version, dated 19 January, the conclusion "knives were not
consistently detected" was deleted.

 

An Evolv employee using "track changes" also deleted a reference to the
system being "incapable of detecting every knife" and one to the 1.3 score.

 

Asked why Evolv had been able to edit what was labelled an independent
report, NCS4 told BBC News it "did not allow Evolv to directly edit the
report".

 

"The 'track changes' feature was used as a means to collect feedback," an
official said.

 

And NCS4 "stands by its process, which has proven effective in informing and
educating solution providers and practitioners".

 

'Informed decisions'

Evolv did not dispute the private report's conclusions.

 

"We work closely to communicate sensitive security information, including
the capabilities and limitations of our system, so that security
professionals can make the most informed decisions for their specific
venue," an official told BBC News.

 

"We feel providing a blueprint of how to get around the security-screening
process and technology to the public will make the venues our customers
secure less safe."

 

The NCS4's report is important because very little is known, publicly, about
how well Evolv technology works.

 

Evolv told BBC News it had also been tested by the Centre for the Protection
of National Infrastructure - a body attached to the Home Office.

 

But when asked by BBC News, the Home Office refused to confirm or deny
this.-BBC

 

 

 

Cyber-attacks on small firms: The US economy's 'Achilles heel'?

When Elana Graham started selling cyber-security software to small companies
five years ago, business was relatively slow.

 

Now demand is booming, driven by a rapid expansion in remote work that has
left small firms vulnerable to attack.

 

Business at her firm has tripled since the start of the year, she says,
reaching an all-time high.

 

"It was a total head-in-the-sand situation. 'It's not going to happen to me.
I'm too small.' That was the overwhelming message that I was hearing five
years ago," says Ms Graham, co-founder of CYDEF, which is based in Canada.
"But yes, it is happening."

 

Cyber-crimes are expected to cost the world $10.5tn (£9.3tn) by 2025,
according to cyber-security research firm Cyber Ventures.

 

On the current trajectory, small businesses will absorb most of the hit.

 

They are three times more likely to be attacked by cyber-criminals compared
to large businesses, cloud security firm Barracuda Networks has found.

 

And the risks shot up during the pandemic.

 

Between 2020-21, cyber-attacks on small companies surged by more than 150%,
according to RiskRecon, a Mastercard company that evaluates companies'
cyber-security risk.

 

"The pandemic created a whole new set of challenges and small businesses
weren't prepared," says Mary Ellen Seale, chief executive of the National
Cybersecurity Society, a non-profit that helps small businesses create
cyber-security plans.

 

In March 2020, at the cusp of the pandemic, a survey of small businesses by
broadcaster CNBC found that only 20% planned to invest in cyber-protection.

 

Then the Covid-19 lockdowns came into force and firms scrambled to move
operations online.

 

Cyber-attacks on major port double since pandemic

Working remotely meant more personal devices like smartphones, tablets and
laptops had access to sensitive corporate information. However, lockdowns
strained budgets, limiting how much companies could spend to protect
themselves. Costly in-house experts and cyber-security software were often
out of reach.

 

The result was weak cyber-security infrastructure that was ripe for hacking.

 

"A lot of the attacks now are coming through them because bad guys know
larger organisations have done a pretty good job of protecting their
infrastructure. The weakest link is small businesses. And it's really easy
to get in there," Ms Seale says.

 

Presentational grey line

Small Business USA

If it's true to say the US is the engine of the world economy, then small
and medium-sized businesses are the fuel that drives that engine.

 

Small businesses create nearly two-thirds of new jobs in the workforce and
account for 44% of US economic activity. So what's the secret to their
success? What challenges do they face and which are the best cities and
regions for them to thrive?

 

Read more from our Small Business USA series

 

Presentational grey line

For would-be criminals, such attacks are low risk and high reward, since
they are less likely to catch the attention of authorities and often the
companies themselves.

 

It typically takes 200 days from the moment of the hacking until discovery,
says Yoohwan Kim, a computer science professor at the University of Nevada,
Las Vegas. In many cases, customer complaints are what alert companies to a
problem.

 

And with one compromised supplier, criminals can access networks of
organisations further up the supply chain.

 

"Large businesses depend on small businesses," says Ms Seale. "They are the
lifeblood of the United States, and we need a wake-up call."

 

Small businesses account for more than 99% of companies in the US and employ
nearly half of all Americans, playing a critical role in the global economy.

 

Dr Kim says they are like the economy's "Achilles heel".

 

Yoohwan Kim also leads a group of cyber-security experts at the University
of Nevada, Las Vegas that helps small businesses build up their online
defences

"They may be a small company but what they sell to large businesses could be
very important. If they're hacked, [their product] won't be fed into supply
chains and everything will be affected," says Dr Kim.

 

Cyber-attacks can be devastating to small businesses, prompting their
products to be removed from supply chains and triggering legal fees,
investigations and regulatory filings.

 

About 60% of small businesses shut down within six months of facing an
attack, the National Cybersecurity Alliance estimates.

 

"The cost could reach thousands of dollars. Some companies simply can't pay
that kind of money," Dr Kim says. "They just can't handle it."

 

But although small businesses are the most vulnerable, Ms Graham says that
most cyber-security tools have been made for big companies, and are often
difficult to understand and install without an in-house expert.

 

"That's a huge challenge for small companies that don't understand what
these people are trying to sell them," she says.

 

Experts say there are simple steps small firms can take to improve their
protections, such as creating basic response plans and identifying what and
where critical data is.

 

Educating employees on how to avoid and detect attacks is also important,
since the vast majority of data breaches involve human error.

 

Attacks in which cyber-criminals hacked into business emails were the
costliest cyber-threat during the pandemic, amounting to $1.8bn in reported
losses, according to the Federal Bureau of Investigation.

 

Also known as spear phishing, such hacks use a targeted attack, unlike more
traditional strategies like spam, which reaches large numbers of people. Ms
Graham describes the tool as "the new frontier in criminal activity" and
says it has become the most common type of cyber-attack her clients face.

 

But firms should not despair, says Ms Seale.

 

"The biggest thing is to convey to small business that it's not hopeless.
It's not an unsurmountable task," she says.-BBC

 

 

 

Royal Mail postal workers to strike on Black Friday

Royal Mail workers will stage two 48-hour strikes around Black Friday and
Cyber Monday in a row over pay, jobs and conditions.

 

The Communication Workers' Union (CWU) will recommend around 115,000 of its
members reject a pay offer of around 9% spread over two years.

 

But the union cancelled two strikes on 12 and 14 November, saying it wants
to take more "proportionate" action.

 

Royal Mail urged workers not to strike at the "busiest time of the year".

 

The union called Royal Mail's pay offer "derisory", and said the strike days
include two of the the most lucrative weekends of the year for online
shopping and promotional discounts at retailers.

 

Workers will be walk out on 24 and 25 November - known as Black Friday - and
then again on 30 November and 1 December - just two days after Cyber Monday,
one of the busiest online shopping days.

 

A Royal Mail spokesperson said: "Royal Mail proposed a new pay-for-change
offer to the CWU worth 9% over two years, despite making a loss of £219m in
the first half of the year.

 

"The CWU is playing a dangerous game with its members' jobs and the future
of Royal Mail. We apologise to our customers for the inconvenience the CWU's
continued strike action will cause. We are doing all we can to minimise
delays and keep people, businesses and the country connected", they added.

 

The CWU's general secretary Dave Ward said the 48-hour strikes were partly
in protest at the "Uberisation" of the postal service, including "widespread
changes... introducing Uber-style owner-drivers, mail centre closures and
changes to Sunday working".

 

Union members will also be asked on Thursday to deliver a vote of no
confidence in Royal Mail chief executive Simon Thompson.

 

Why is everyone striking?

The union added that the pay offer was "a dramatic real-terms pay cut",
since it was out of line with the rising cost of living.

 

Inflation - the rate at which prices rise - is currently at a 40-year high.

 

The median pay at Royal Mail is £32,465 a year, with the average pay for a
postal delivery worker lower than that at £25,777.

 

The CWU said on 3 November it will be discussing further strikes for the
Christmas period.-BBC

 

 

 

BP profit jump sparks calls for bigger windfall tax

The government is facing growing calls to raise more money from the windfall
tax on energy firms after oil giant BP reported a huge rise in global
profits.

 

BP made $8.2bn (£7.1bn) between July and September, more than double its
profit for the same period last year.

 

Surging oil and gas prices have led to big gains for energy firms but are
also fuelling a rise in the cost of living.

 

BP expects to pay $800m in UK windfall taxes this year while rival Shell
recently said it will pay none.

 

The windfall tax was introduced by Rishi Sunak in May when he was
chancellor. A Treasury spokesperson said the tax was expected to raise £17bn
this year and next "to help fund cost of living support for eight million
people".

 

But Ed Miliband, shadow climate change secretary, said that BPs' profits
were "damning evidence of the failure of the government to levy a proper
windfall tax".

 

"Rishi Sunak should be hanging his head in shame that he has left billions
of windfall profits in the pockets of oil and gas companies, while the
British people face a cost-of-living crisis," he said.

 

Alok Sharma, UK's COP president and the former Business Secretary, tweeted:
"We need to raise more money from a windfall tax on oil and gas companies
and actively encourage them to invest in renewables."

 

Treasury sources have indicated an extension to the windfall tax is being
discussed ahead of the Autumn Statement on 17 November, which will detail
plans for tax rises and spending cuts as the government attempts to fill a
"black hole" in public finances.

 

That could include increasing the rate oil and energy companies have to pay
on extraordinary profits, extending the timeframe it applies for or
expanding it to include other firms benefitting from higher oil prices such
as electricity generators.

 

The Treasury has warned that everyone will need to pay more tax "in the
years ahead".

 

What is the windfall tax on oil and gas companies?

Treasury warns of tax rises to fill financial hole

Last week, Shell revealed that it had paid no windfall tax in the UK because
it had invested millions of pounds here. But it said it expected to start
paying the levy next year.

 

BP expects to pay $2.5bn in tax on its North Sea business this year, which
includes the windfall levy.

 

The company also plans to buy back an additional £2.5bn of its shares.
So-called share buybacks help boost a company's share price and are popular
with investors.

 

"Companies like BP are making huge profits and channelling these straight
back to already-wealthy shareholders through share buyback schemes," said
George Dibb, head of the Centre for Economic Justice at the IPPR, the
left-leaning think tank.

 

"Instead of reducing costs for consumers or investing in renewable energy,
these fossil fuel giants are prioritising transfers to shareholders."

 

'Windfall of war'

Oil and gas prices, which began increasing once Covid restrictions eased,
accelerated after Russia invaded Ukraine in late February, resulting in huge
profits for energy companies. But they have also exacerbated price rises -
or inflation - for consumers which hit 10.1% in September.

 

All the big oil firms, including Total and Exxon Mobil, have announced
bumper profits in the past week. Overnight, oil giant Saudi Aramco said it
had made a profit of $42.4bn over just three months due to higher commodity
prices.

 

On Monday, US President Joe Biden urged major US oil firms who are bringing
in big profits to stop "war profiteering", threatening to hit them with
higher taxes if they do not increase production which would help lower
prices.

 

"Their profits are a windfall of war," he said.

 

BP profit

Commenting on whether oil firms should pay more tax, Nick Butler, a former
BP executive who is now a visiting professor at King's College London, told
the BBC's Today programme: "They have to balance what they pay in tax, what
they invest in the future and what they pay back to shareholders.

 

"I think the next tax squeeze will come on the electricity retailers who
haven't been subjected to it yet," he said.

 

"But if BP has to pay more in tax I think their shareholders will have to
pick up part of the pain."

 

Higher energy bills

Higher energy prices have fuelled the rise in gas and electricity bills for
both households and businesses.

 

The government is limiting the impact by temporarily capping the cost of gas
and electricity, but instead of lasting for two years as originally planned,
this scheme will now end in April.

 

There have been warnings that typical household gas and electric costs could
reach more than £4,300 when support is scaled back.

 

Oil and gas firms operating in the North Sea are taxed differently to other
companies and pay a total tax rate of 65%.

 

Companies have been able to reduce the amount of tax they pay by factoring
in losses or increasing investment.

 

The UK windfall tax includes a measure that allows energy companies to apply
for tax savings worth 91p of every £1 invested in fossil fuel extraction in
the UK.

 

Liberal Democrat Treasury spokesperson Sarah Olney said the tax was
"incredibly weak".

 

But a Treasury spokesperson said: "We also want to see the sector reinvest
its profits to support the economy, jobs, and our energy security, which is
why the more investment a firm makes into the UK, the less tax they will
pay."

 

BP's worldwide profit for the quarter was much higher than analysts had
expected but dipped from the previous three months due to a fall in the
wholesale price of oil.

 

Oil prices hit $128 per barrel in early March as the assault on Ukraine
intensified and a number of countries imposed sanctions on Russia and have
since fallen back.

 

But BP said on Tuesday that even if oil prices dropped as far as to $60 per
barrel, it could still afford to return billions of dollars to its
shareholders.-BBC

 

 

 

Pandemic furniture star Made.com nears collapse

Online furniture retailer Made.com has moved a step closer towards
administration after the company's shares were suspended on Tuesday.

 

The firm has stopped taking new orders and is running out of cash. Talks to
find a buyer have so far failed.

 

It is dramatic change in fortunes for the brand, which boomed in the
pandemic and was valued last year at £775m.

 

The retailer aims to fulfil orders it has already received but is not
offering refunds at this stage.

 

However, a source told the BBC the situation around refunds could change in
the coming days, depending on whether the business appoints administrators
or is sold.

 

Made.com was set up in 2011 to offer affordable yet "high-end" furniture
online and once said it wanted to be the "new Ikea".

 

The retailer, which sources directly from designers and manufacturers,
gained a loyal base of mostly younger customers and employed 700 staff at
the end last year.

 

It was one of many companies that saw sales surge during the pandemic as
people bought more furniture and other products online during lockdown.

 

Sales at Made.com hit £315m in 2020, then grew by 63% in the first three
months of 2021 to £110m. The firm was then listed on the London Stock
Exchange.

 

'Wrong time'

But more recently the company has hit problems, as households cut back on
big-ticket purchases due to the rising cost of living. Global supply chain
issues have also left customers waiting months for deliveries.

 

Made had "got caught with massive inventory at just the wrong time",
co-founder Brent Hoberman said this weekend.

 

Mr Hoberman, who no longer runs the retailer but owns shares, said its
business model had previously been about "minimal stock and wastage" but had
since "morphed into being more similar to other retailers".

 

Ning Li, another of Made's co-founders, said he believed the brand had "lost
sight" of its focus in recent years, saying the "mantra was simplicity".

 

"My co-founders and I started a fledgling business on a shoestring in
Notting Hill, with a simple idea of making high-end design accessible to
everyone," he added.

 

"I feel both powerless, having stepped down as chief executive in 2017, but
also immensely frustrated."

 

On Tuesday, Made.com announced that trading in its shares had been
suspended. It also said it intended to appoint administrators, which means
the firm is not in administration, but heading towards it.

 

The move gives the company 10 days of breathing space to find new backers or
sell all or part of the business.

 

Its bosses have warned its cash reserves could run out if fresh funding
cannot be raised.

 

In a statement, the firm said it had "received proposals" from interested
parties. However, it also said it was likely the company would have to be
"wound up" and delisted from the stock exchange before any sale could be
agreed.

 

'Our £4,000 furniture hasn't been delivered'

Sophie Drevillon, from South Wales, ordered a range of furniture from
Made.com about two weeks ago, ahead of her and her family's move to
Switzerland this week.

 

Although some items have arrived ahead of the move, the 34-year-old told the
BBC she was still without a sofa, media unit and dining table worth nearly
£4,000.

 

When she contacted Made.com about her order, she was told the delivery had
been cancelled but she also couldn't be refunded for the furniture that is
yet to arrive.

 

"I just felt I want my money back, because there's not point deciding to
deliver it in January. It's no good to me," she said.

 

She says she is struggling with the "lack of communication" but has been
told by her bank she has no automatic right to a refund.

 

"I just feel Made need to make a decision... not keep us in limbo," she
said.

 

"The items are quite key [for our flat]. We are in the process of having to
source other items from other companies."

 

Lauren

Made has a shop in Central London which is currently closed. Lauren, who was
out shopping with her mother nearby on Tuesday, told the BBC she couldn't
believe the brand might collapse.

 

"I always browse when I walk past it," the 24-year-old said. "It's nice to
look at."

 

She said she often saw Made's items being promoted on social media,
including by influencers, and that's how she found out it was on the brink
of collapse.

 

Lauren was shocked the brand hadn't thrived after lockdown.

 

"I would have thought it was the opposite because everyone does shop online
[these days]. After Covid, I did see people coming here. Everyone would walk
in."

 

Mr Hoberman said there were "many questions" about how the money raised by
Made's stock exchange listing had been spent and whether enough attention
had been paid to "potential risks".

 

"Cash is always king," he added, alluding to the firm's cashflow issues.

 

Made is not alone in struggling following the end of lockdown restrictions
and the emergence of the cost-of-living crisis.

 

Online retail sales peaked during the height of the pandemic, and have been
on a downward trend since, according to the Office for National Statistics
(ONS).

 

Peloton, which sells exercise bikes and subscriptions to online keep-fit
classes, cashed in on the pandemic fitness boom but has seen its shares
slump as people return to gyms.

 

The online retailers Asos, Boohoo and AO World have also seen their shares
fall sharply from their pandemic era highs.

 

Research has suggested more households in Britain are cancelling video
streaming subscriptions due to the rising cost of living.-BBC

 

 

 

Bank makes history as it reverses quantitative easing

In an historic milestone, the Bank of England has begun to unwind the key
emergency support it brought in after the 2008 financial crisis.

 

The bank sold off a tranche of government bonds on Tuesday, as it started to
reverse the process known as "quantitative easing" or QE.

 

QE has been credited with helping the UK through shocks such as Covid.

 

But it has also been blamed for bringing in an era of "cheap money" which
benefited some but not others.

 

The Bank began QE in March 2009, to prop up the UK economy after banks
stopped lending to each other and the country fell into a deep recession.

 

To do this it electronically created new money, which it used to buy
government bonds - effectively IOUs issued by the Treasury to fund
government spending.

 

Along with other measures, QE helped to keep market interest rates at
historic lows. The idea was this would encourage consumers and businesses to
keep borrowing and spending - supporting the economy in the process.

 

However, it was always meant to be a temporary measure and the Bank of
England has long discussed when it would begin to unwind QE.

 

On Tuesday, it became the first central bank among the G7 developed
economies to start selling off its bond holdings.

 

It successfully sold the relatively small sum of £750m worth of bonds, out
of a total holding of over £838bn.

 

When QE was tried for the first time, it was a new policy, and no-one knew
quite how the Bank would go about unwinding it, which helps to explain why
the bank is proceeding gradually.

 

"We don't quite know what the impact is going to be on bond markets, so it
makes sense to proceed cautiously, " says Andrew Sentance, a member of the
Bank's Monetary Policy Committee who voted in favour of the first round of
QE in 2009.

 

But unwinding QE is an important part of the Bank's fight against inflation,
which is currently running at over 10 per cent, rather than the 2% target.

 

"If we want to get on top of inflation we need to get on top of this. It's
not the whole part of the equation, there is interest rates, there is fiscal
policy [government tax and spending decisions], as well as reversing QE -
they are all pushing in the same direction."

 

The bonds are being sold for less than the Bank paid for them, so it is
making a loss on the sales, which will be paid by the Treasury.

 

The Bank has already been reducing its QE holdings by not replacing bonds
which come to the end of their term and are repaid. But it has said it wants
to reduce its holdings by £80bn by next September.

 

The first sales were postponed from September following the market turmoil
following the mini-Budget.-BBC

 

 

 

Four areas added to banking hubs waiting list

Four more communities have been earmarked for shared banking hubs - becoming
the latest on a list of 27 areas waiting for services to begin.

 

At these hubs, customers of any bank will be able to access their accounts,
deposit cash and cheques, and withdraw money at any time.

 

Only two have opened so far, while hundreds of bank branches have closed.

 

Fears have been raised that local businesses and vulnerable residents would
struggle without cash services.

 

The four new locations which will receive hubs are: Bury Park in
Bedfordshire, Haslemere in Surrey, Prestatyn in Denbighshire, and Welling in
south east London.

 

Residents and local politicians requested the hubs come to their areas owing
to previous closures of bank premises.

 

Teresa O'Neill, leader of Bexley Council, said she was thrilled a hub was
coming to Welling.

 

"Since losing our last banks almost a year ago, the community has not had
convenient access to cash, meaning that residents have had to travel for
basic banking needs.

 

"This is also damaging to businesses who rely on banks to cash their takings
too. We look forward to the change it will make within the town."

 

The BBC visited a prototype shared banking hub in Rochford, Essex, and was
told it had been "a lifeline" for many people living in the area after the
last branch in town closed.

 

Running costs are the same as a small branch, but are shared between
different banking groups that use it.

 

However, there is concern that regular bank branches are closing at a rapid
rate. Consumer group Which? said that 587 branches have closed this year,
with another 75 scheduled to shut by the end of 2022, on top of hundreds in
previous years.

 

Bank closures graphic

There is little chance of these new hubs replacing many of these closed
banks at the moment.

 

Difficulties in opening the new hubs have included finding suitable
premises, and making it fully accessible and secure enough for banking
services.

 

Natalie Ceeney, who chairs the Cash Action Group and Banking Hub Company,
said: "We are expecting a couple more to be live before Christmas. We are
making good progress with all hubs and expect a significant number to open
in early 2023.

 

"When we are visiting locations that will get a hub, we are looking for
buildings that are the right size, located in an appropriate location and
have the facilities to support all customers. We then often need to make
changes to the building to make them suitable for a banking hub, some of
which need us to get planning permission. This process has not always been
easy, but we are making good progress.

 

"What is important is this time last year, if a community lost their last
branch, there was no solution. Over the next couple of years, we expect to
be supporting hundreds of communities across the UK."

 

Jenny Ross, money editor at Which?, said: "Banking hubs could play an
important role in ensuring the cash needs of local communities are met.
However, the rollout is taking far too long and the hubs must open as soon
as possible so consumers can benefit."

 

In addition to the hubs, more withdrawal and deposit machines - which are
unstaffed but can allow businesses to cash in their takings - will be placed
in premises such as libraries and community centres and available during
their opening hours.

 

They will be located in Bingley in West Yorkshire, Finchley in north London,
Leigh-on-Sea in Essex, Melksham in Wiltshire, Plympton in Devon, and
Sandbach in Cheshire.-BBC

 

 

 

 

Morrisons to close 132 McColl's stores putting jobs at risk

Morrisons says it plans to close 132 of its loss-making McColl's convenience
stores, putting 1,300 jobs at risk.

 

It comes after the supermarket chain agreed to buy McColl's out of
administration in May.

 

Workers who could be made redundant will be offered jobs elsewhere in the
business, the grocer said.

 

Morrisons now plans to convert most of its remaining McColl's stores into
Morrisons Daily shops as it tries to revive the chain's fortunes.

 

There are currently 1,164 McColl's stores trading, 286 of which operate
under the Morrisons Daily brand.

 

Morrisons said all of the stores set to close were "loss-making" and had "no
realistic prospect" of recovering soon.

 

The shops are distributed around England, Scotland and Wales.

 

Mother wins £60,000 over Morrisons discrimination

Co-op launches trial to cut back use of lighting

The majority will be closed "in an orderly fashion" over the rest of this
year, it added.

 

The grocer said workers at risk of redundancy "will be offered alternative
employment at a nearby McColl's store, Morrisons store, logistics operation
or food-making centre".

 

Out of the stores that will close, 55 have a Post Office counter.

 

Morrisons said it would will delay the closure of these stores until next
year to let them serve local communities during Christmas "and to allow the
Post Office additional time to make alternative arrangements".

 

Last week competition regulators cleared Morrisons to buy McColl's.

 

The supermarket chain had already said it would sell 28 McColl's stores to
overcome competition concerns.

 

McColl's is a business "of significant scale", Morrisons added, with an
annual turnover of £1.2bn. It accounts for about 0.8% of the UK grocery
market, it added.

 

It said no further store closures were currently being considered but it
remains in talks with "a number of landlords of challenged stores".

 

Morrisons' chief executive David Potts said after the green light from the
competition watchdog, the retailer was "now able to begin the urgent journey
to transform McColl's into a viable, well-invested and growing operation".

 

Mr Potts added that following the store conversions, there would be more
than 1,000 Morrisons Daily stores trading within two years.

 

Joseph Sutton, the director of Morrisons wholesale, said: "We very much
regret the proposed closure of 132 loss-making stores but it is, very sadly,
an important step towards the regeneration of the business."-BBC

 

 

 

Banker Oleg Tinkov renounces Russian citizenship over Ukraine

A billionaire Russian banker, Oleg Tinkov, has given up his Russian
citizenship because of the war in Ukraine and condemned "Putin fascism".

 

Mr Tinkov founded the online Tinkoff Bank, one of Russia's largest lenders,
with about 20 million customers.

 

In an Instagram post, he said: "I can't and won't be associated with a
fascist country that started a war with their peaceful neighbour."

 

Few Russian tycoons have criticised Russia's invasion of Ukraine in public.

 

An independent Russian news source, Sota Vision, tweeted a photo of Mr
Tinkov's certificate showing his Russian citizenship terminated, as well as
his tirade on Instagram against President Vladimir Putin's Russia.

 

The original post vanished after it was published, but Mr Tinkov has since
posted again on the social media site and blamed "Kremlin trolls" for the
disappearance.

 

In the latest post, he also said he was taking legal action to remove his
name from the bank, explaining that he does not want to be linked to "the
bank that collaborates with killers and blood".

 

He is reported to be living in London, but is subject to UK sanctions, like
many other members of Russia's business elite.

 

"I hope more prominent Russian businessmen will follow me, so it weakens
Putin's regime and his economy, and put him eventually to defeat," Mr
Tinkov's original post said.

 

He continued: "I hate Putin's Russia, but love all Russians who are clearly
against this crazy war!"

 

In April, Mr Tinkov castigated the Kremlin in even stronger terms,
condemning what he called a regime based on nepotism and servility.

 

"The Kremlin bureaucrats are shocked that not just they, but also their
children now won't travel to the Mediterranean in summer. Businessmen are
trying to save the remains of their property," he said.

 

The Western sanctions on him and other top Russian business figures - known
as "oligarchs" - include travel bans, asset freezes and impounding of planes
and yachts. President Putin's political and military power relies heavily on
the support of billionaires, who got rich through Kremlin connections.

 

Also in April, Mr Tinkov sold his family's 35% stake in the company he
founded - TCS Group Holding, based in Cyprus. The buyer was one of Russia's
richest men, Vladimir Potanin, head of the mining giant Norilsk Nickel.

 

TCS's businesses under the Tinkoff brand include banking, insurance and
mobile phones.

 

Media reports say another Russian banker, Nikolay Storonsky, has also given
up his Russian citizenship. He has British citizenship and founded the
British fintech start-up Revolut. He condemned the war in Ukraine in a blog
post earlier this year, highlighting his Ukrainian family connections.

 

Earlier this month, billionaire Israeli-Russian investor Yuri Milner
announced he had renounced his Russian citizenship. He left Russia in 2014
and lives in the US.-BBC

 

 

 

 

House prices fall after mini-budget, says Nationwide

UK house prices fell for the first time in over a year last month, according
to Nationwide, which said the turmoil sparked by Truss' government's
mini-budget had hit housing sales.

 

Prices fell by 0.9% month-on-month in October, the first monthly decline in
15 months, the mortgage lender said.

 

The monthly fall was the largest since June 2020, at the height of the Covid
pandemic.

 

Annual UK house price growth also slowed sharply last month.

 

"The market has undoubtedly been impacted by the turmoil following the
mini-budget, which led to a sharp rise in market interest rates," said
Robert Gardner, Nationwide's chief economist.

 

"Higher borrowing costs have added to stretched housing affordability at a
time when household finances are already under pressure from high
inflation," he added.

 

Investors reacted badly to the plan unveiled by the previous prime minister
Liz Truss and her chancellor Kwasi Kwarteng in September, which promised
billions of pounds of tax cuts without explaining how they would be paid
for.

 

Mortgage rates rose and lenders also suspended hundreds of mortgage
products, amid uncertainty over how to price these long term loans.

 

Across the UK, the average house price in October was £268,282.

 

Meanwhile, there was a sharp slowdown in annual house price growth last
month, to 7.2% from 9.5% in September, and the housing market looks set to
slow in the coming months, Nationwide said.

 

House price chart

The figures paint a picture of "sharply weakening demand", said Susannah
Streeter, senior investment and markets analyst at Hargreaves Lansdown.

 

"The disaster of the Trussenomics mini-budget, which saw bond markets take
fright and lenders dramatically pull cheaper deals almost overnight, has
clearly taken its toll on confidence among buyers," she said.

 

Ms Streeter warned that the property market will remain in sharp focus, with
the Bank of England expected to raise interest rates again this week in an
attempt to bring down the current rate of inflation.

 

"Housing affordability has been stretched so thinly any elastic in the
market looks like it's about to snap, particularly with the Bank of England
intent on more rate rises," she said.

 

This is another sign of a change to what we have become used to with the UK
housing market.

 

A period of low mortgage rates and significantly rising house prices looks
to be over.

 

Whether price rises slow, stall, or reverse - and to what extent - is still
a matter of debate.

 

The race for space seen among buyers during Covid seems like a long time ago
too.

 

While first-time buyers might finally get the lower house prices many have
craved, they are now hit with the reality of mortgage payments taking a
bigger chunk of their income than they might have expected - and another
financial headache.-BBC

 

 

 

Tanzania Penetrates U.S. Cashew Nut Market

TANZANIA has burst into United States (US) cashew nut market by yesterday
exporting at a go and directly an eight-tonne air cargo of processed cashew
nuts to New Orleans, Louisiana, opening the door for future shipments.

 

The exporter is Ward Holdings Tanzania Limited (WTH), a subsidiary of Ward
Holdings International, a Michigan-based global market development and
investment company.

 

The groundbreaking flight of the cargo was witnessed by the Agriculture
Deputy Minister, Mr Anthony Mavunde at the Julius Nyerere International
Airport (JNIA) Export Cargo Terminal.

 

 

Mr Mavunde hailed the efforts of the company, saying the efforts were
supportive of the government plan that seeks to have 60 percent of
Tanzania's cashew nuts locally processed by 2025.

 

"If our plan succeeds, it means increasing new industries and creating more
jobs for our youths," he said.

 

US Embassy Representative, Mr Robert Raines, said the shipment represents
the growing business relationship between Tanzania and US.

 

"This step will boost the wellbeing of cashew nut farmers and promote their
crop," he said.

 

WHT President, Mr Godfrey Simbeye, described the occasion as a "historic
moment of cashew nuts grown, harvested and consumer-packaged in Tanzania
being exported directly for the first time from farmers in Tanzania to the
US marketplace. It is a win-win formula for Tanzanian farmers and American
consumers."

 

Africa produces 60 per cent of the world's cashew nuts and the US is the
largest importer of crop, he explained.

 

Mr Simbeye assured the gathering, which included business leaders, that Ward
Holdings International is a reputed American market-maker which is
"committed to the advancement of Tanzanian interests through
industrialisation of its agriculture industry and high-value crops."

 

He also said that future Tanzanian cashew nut shipments will enter US
through New Orleans, adding that Dar es Salaam and New Orleans signed
recently sister city partner and bilateral trade agreements, "signaling the
beginning of a robust business relationship."

 

-Daily News.

 

 

 

Kenya: Digital Solutions Are Boosting Agriculture in Kenya, but It's Time to
Scale Up. Here's How

Digital agricultural services have proliferated across Africa over the last
decade. Most are services that work on mobile phones, although more advanced
technologies are in use too - like satellite images, sensors, blockchains
and big data analytics.

 

The services offer access to information, markets and financial products.

 

Kenya is at the forefront of this development in Africa. The country is home
to numerous service providers that seek to solve problems in food and
agriculture using digital technologies. In 2020, the GSM Association counted
95 such services in Kenya. This is around twice the number found for
instance in Nigeria, the country with the second highest digital
agricultural services prevalence in Africa. Providers range from small
start-ups to large companies that mainly offer advice, finance and market
linkage.

 

 

But scaling up these solutions remains a challenge. A study on digital
agriculture in sub-Saharan Africa showed that only a few service providers
managed to register more than one million users. In Kenya, it's estimated
that only 20% to 30% of farmers use a digital agricultural solution. This is
better than other countries in the region - but still low.

 

In our research, we examined how to support the scaling of digital
agricultural services in Kenya. We found that uptake could be increased by
building digital bridges in the form of digital platforms that bundle such
services for easy access and use. But human bridges are also needed that
link service users and providers.

 

 

The insights from the research can help service and platform providers
design and scale solutions that suit different users. They can also inform
policies and investments needed to create the conditions for scaling these
services.

 

What we did

 

We conducted a survey of 758 likely users of hypothetical digital platforms
that would aggregate digital agricultural services in Kenya. All the
potential users had access to the internet or basic data connectivity.
Respondents were contacted via relevant Facebook groups and invited to
complete the survey online.

 

A second in-person survey shed light on how agricultural intermediaries in
Kenyan value chains use digital technologies in their work. These included
296 input dealers, output dealers and extension agents. Our research offers
the first comprehensive study of the digital capabilities of agricultural
intermediaries. More commonly, studies focus on agricultural producers.

 

 

What we found

 

Our research showed that likely users would see value in aggregator
platforms if they made digital agricultural services easier to find and
assured their quality. They would also like platforms to be open to a wide
range of value chain actors with diverse levels of digital skills. Our
findings also highlighted that human interaction still matters. It should
complement digitally enabled contacts and transactions.

 

Aggregator platforms can help scale up digital agricultural solutions in a
number of ways:

 

Accessibility and usability: The platforms could make digital agricultural
services easier to locate and use. This would help users navigate the often
confusing array of services on offer. For instance, platforms could provide
a one-stop shop for a diverse range of services that are easily searchable
and only require a single registration and payment system. They would need
to be usable with different types of digital technologies and skills.

 

Value enhancement and trust building: Aggregator platforms would be valuable
if they could guarantee the quality and reliability of digital agricultural
services. This would build trust in the services. They could do so, for
instance, by setting, monitoring and enforcing quality standards for
participating service providers or introducing user rating systems.

 

Human intermediaries could also play an important role in building trust.

 

Inclusivity: Users would like aggregator platforms to include a wide range
of value chains and actors. Through their networks, intermediaries could get
more actors to use aggregator platforms.

 

Of course, aggregator platforms don't offer all the answers to scaling
digital agricultural solutions. They would need a supportive policy
environment. But there are gaps. These include:

 

Insufficient digital skills. This needs to be addressed by integrating
related training at all levels of education.

Poor technology infrastructure. This would require expanding access to
high-speed mobile networks, affordable smartphones and reliable electricity,
particularly in rural areas.

The way forward

 

Various factors have contributed to Kenya's leadership role in digital
agriculture in Africa. Mobile network infrastructure expanded early on,
supported by government policies which attracted the necessary investments
and fostered competition.

 

Digital business development was largely driven by dedicated individuals,
innovation hubs and so-called angel investors. Together they created a
conducive innovation environment for local start-ups developing digital
solutions for a technology-savvy customer base of relatively well-educated
users.

 

The widespread adoption of M-Pesa also played an important role. It
facilitated the provision of digital agricultural services that require
financial transactions.

 

The country needs to build on these successes. The digital transformation of
Kenya's agriculture will become a reality if it can link viable digital
solutions providers with potential beneficiaries. That requires digital
bridges connecting diverse services and users. But it will also require
human bridges to narrow the technological and skill gaps, to build trust in
service provision and to reach those who are not yet connected.

 

Aggregator platforms that integrate agricultural intermediaries into their
design are one avenue for building such bridges. This will happen if they
understand the different demands and capacities of their users. The design
and marketing of digital agricultural services will have to match users'
needs and abilities. Similarly, public and private investments in skills,
infrastructure and the business environment are crucial for such platforms
to fulfil their potential.

 

Heike Baumüller, Senior Researcher, Center for Development Research (ZEF),
University of Bonn

 

 

 

 

Nigeria: Redesigning Naira Won't Check Rising Inflation - Analysts

Economic and finance experts have said the move by the Central Bank of
Nigeria (CBN) to redesign and print new N200, N500 and N1000 denominations
would have no major effect in lowering the rising inflation in the country.

 

This is against the belief in some quarters that the plan of the apex bank
can actually address high inflation in the country.

 

The experts, who spoke exclusively in separate interviews with LEADERSHIP,
noted that the physical cash in circulation is just about 6.8 per cent of
the total monies in the economy, and hence cannot impact positively on
inflation figures.

 

 

Inflation accelerated for the eighth straight month to 20.77 per cent in
September 2022 from 20.52 per cent in August, reaching the highest point
since September 2005.

 

Speaking to LEADERSHIP, Professor Bongo Adi of the Lagos Business School,
Lagos, dismissed the notion that Naira redesign will control inflation.

 

He said what drives inflation is more of demand and supply, stating that
inflation sets in when much money is chasing fewer goods, an indication that
there is too much money supply but, in this case, not the physical cash
alone in the system.

 

To him, "In the last 20 years, the money outside the banking system has
always hovered between 80 to 85 per cent. So, the claims that there is too
much money outside the banking system did not start today, hence,
redesigning or printing of currency cannot address that.

 

"Moreover, the volume of money instruments, such as deposits, bonds, and so
on, in the economy far outweighs the physical money supply. Hence, there is
no serious correlation between inflation and Naira redesign or printing."

 

 

However, he said, what drives inflation in the country is more of economic
factors, such as forex volatility and insecurity.

 

CBN Has My Backing To Replace Naira Notes - Buhari

 

"The major causes of inflation in the country is importation that is driving
foreign exchange upward. Anybody planning to control inflation must start by
addressing the instability in foreign exchange market. But instead, the news
of Naira redesign has even further hiked dollar against the Naira. As of
yesterday, a dollar was exchanged for over N800 and this will continue as
people continue to convert their old Naira notes to dollar," he pointed out.

 

Kidnappers too, he said, may now be demanding for dollar at the expense of
the Naira and this will further mount pressure on the nation's legal tender.

 

 

"Moreover, insecurity is equally another driver of inflation, especially,
food inflation. People cannot access their farmland to farm or harvest.
Insecurity and bad state of Nigerian roads are also affecting transportation
of goods and food items. All these factors will snowball into pricing, such
that we are buying goods that ordinarily should not cost much for a higher
value.

 

"Therefore, any policy that does not address these two critical challenges
(forex market volatility and insecurity) cannot fight inflation. Naira
redesign, from my knowledge of economics, has no impact on inflation, " he
insisted.

 

Speaking in similar vein, the Dean and Professor of Finance at American
University of Nigeria (AUN), Prof Leo Ukpong, said naira redesign will not
check inflation, but it gives CBN some level of control on the volume of
physical cash in circulation.

 

"If there is illicit money in the system, it's the banks that can check that
by ensuring that illicit funds do not find their way into their system.

 

"What can actually address inflation is to revalue the denomination of the
country, such that you make N200 or N500 the highest denomination, while
printing more of the lower notes. This will ensure that sellers don't put
prices at a round figure that could fuel inflation.

 

"For instance, if you want to buy something that should sell for N285, the
seller may decide to round the figure to N300 so that it makes it easier to
get you change on the N500 or N1000 denomination you brought. This singular
step has heightened inflation and this is applicable to virtually every
purchased good. So, the apex bank need to withdraw N1,000 from circulation
and make N500 the highest currency denomination," he pointed out.

 

On his part, the chief executive officer (CEO), Centre for the Promotion of
Private Enterprise [CPPE], Dr. Muda Yusuf, said it is not right to think
that Naira redesign or recalling of old notes will have impact on inflation.

 

To him, "Physical cash constitutes just about 6.8 per cent of the entire
monies in the economy. So, how will a measure targeted at physical cash have
an overriding impact on the remaining 93.2 per cent of other monies tied to
deposits, bonds and so on?"

 

He said the planned move of the apex to redesign and print new notes at a
time the country needs to cut down excesses was ill timed.

 

"You are going to spend a lot to print money when the economy is struggling
to survive. This money can be deployed elsewhere to give better value to the
economy, businesses and people.

 

"It is difficult to see any compelling value proposition of this currency
redesign idea. The cost of such an action would be outrageous and
disproportionate compared to the expected benefits advanced by the CBN.

 

"At a time when the government is grappling with high fiscal deficit, debt
crisis, severe revenue crisis and underfunding of many government projects
and programmes, it is most inappropriate to embark on such a profligate
exercise," he stressed.

 

Stating that, currency as a percentage of money supply is less than seven
percent and that the exercise therefore has no monetary policy significance,
he added that it will come with huge logistics costs, and avoidable
dislocations to small businesses, most of whom are in the informal sector.

 

"There are more urgent issues demanding the attention of the CBN. We have
issues with liquidity in the foreign exchange market, the depreciating
currency, the recent Moody's downgrade of Nigeria, soaring inflation and
many more.

 

The CBN should save the citizens and the economy the trauma of this currency
redesign. It is a distraction we can do without," he said.

 

Commenting on the redesigning of the Naira head of Financial Institutions
Ratings at Agusto&Co, Ayokunle Olubunmi, noted that in the last couple of
months, the CBN has been trying to control money supply and ultimately
inflation

 

"One of the things they have realised is that there is a significant
proportion of the currency that is outside the banking system that is
predominantly with individuals. The belief is that a portion of those monies
is actually illegal funds or even lost. So, the idea of redesigning the
naira is to control the volume of the naira in circulation.

 

"Ultimately the CBN will have a better picture of the amount in circulation.
So, the idea will be to reduce the currency in circulation. However, some of
us believe that it might not be too successful because Nigeria is a
cash-based economy and most people transact mainly with cash.

 

"Thus, the amount of cash that it will reduce may not be that significant.
Asides that, printing and designing the naira is something that will be
costly," he stated.

 

-Leadership.

 

 

 

Nigeria, Others Move to End Tax Incentives, Waivers to High Net Worth
Individuals, Businesses

The federal government of Nigeria and the African Tax Administration Forum
(ATAF) have announced their resolve to stop tax waivers and incentives to
high-net-worth individuals (HNWIs) and multinationals in Nigeria and other
African countries.

 

The Executive Secretary of the African Tax Administration Forum (ATAF), Mr.
Logan Wort, and the Executive Chairman, Federal Inland Revenue Services
(FIRS) Muhammad Nami disclosed this yesterday at the 7th ATAF General
Assembly where tax professionals and stakeholders converged to discuss
'Rethinking Revenue Strategies: The Human Face of Taxation.'

 

They both agreed that the continent was in need of funding to cater to its
various budget deficits and funding for critical infrastructure across the
continent.

 

 

They also noted that resources from tax are better alternatives than
borrowing to fund deficits, adding that ATAF has created an automated
information-sharing mechanism to expose high-net-worth individuals and their
companies' direct and indirect assets in a bid to tax them appropriately.

 

Speaking on the sidelines of the event, Wort said: "On tax incentives, it is
true that tax incentives are responsible for a lot of leakages and a major
cause of illicit financial flows out of Africa. It puts it at 3.5 per cent
of GDP that Africa loses in tax incentives.

 

"There are things on the horizon. Firstly, the discussions on the inclusive
framework dealing with a digital economy have proposed a global minimum tax
of 15 per cent and should that come into play, all companies will have to
pay a minimum of 15 per cent.

 

 

"So, when an African country gives a tax incentive of zero to a company,
that company will have to pay 15 per cent of tax to someone in the world.
So, if we give zero per cent tax incentive, that 15 per cent will simply go
to another country. So, we are now being discouraged from doing these tax
incentives.

 

"Secondly, we are developing a proposal for an African minimum domestic tax.
We are proposing to the African Union (AU) that we introduce on the
continent a minimum domestic tax so that nobody pays zero tax. Those are the
two ways in which we think the issue of tax incentives will be dealt with."

 

Speaking further multinationals and high-net worth individuals, Wort said:
"If you focus on taxation such as value-added tax (VAT) and others, you are
regressively taxing poorer people more, but if you tax wealthy people more
and better, you bring them into the net, your ability to collect and to make
tax pay is better.

 

"High net-worth individuals and multinational companies largely have their
businesses and their money outside of the country. Now that is legal, and
that is fine, but the tax burden and the tax obligations are in the national
jurisdiction.

 

"And how do you find out how high net worth individuals and multinationals
type of transactions, what type of dividends, and what types of shares and
assets they have on which they should pay tax in your national sovereign is
done by a treaty, a double taxation treaty between countries and you also do
that through signing an automatic exchange of information agreement."

 

On his part, Nami pointed out that the country could benefit more from
stopping tax waivers, saying it would be a better option to continuous
borrowing.

 

He said: "On incentives that we give to businesses, it is not as if
incentives are bad, but tax waivers are what is exactly the issue. The
global best practice today is not for us in Africa to continue to give tax
waivers to companies because when you give these waivers to them here, they
go back somewhere else to pay the taxes and we follow those same people to
go and collect loans for purposes of funding our budgetary requirements.

 

"So, the best practice today is for us to mobilise these resources from
these taxpayers and apply it to build infrastructure where necessary, to
grant loans to SMEs where necessary so that we're able to grow the economy
instead of taking loans."

 

-This Day.

 

 

 

 

Africa: Oil and Gas - Can Africa Capitalise On the OPEC+ Resolution

The United States questioned the OPEC+ resolution on oil and gas output,
calling it a "short-sighted decision."

 

Brent crude, the international benchmark, has fallen from $123 in mid-June
to $93.50 in September, a 24% change.

OPEC+ resolved to cut daily oil production output by two million barrels on
October 5, 2022.

The OPEC+ resolution aggravates Africa's economic troubles, notably its goal
to boost the price of oil per barrel.

Oil prices have come down following a summer of highs. Brent crude, the
international benchmark, has fallen from $123 in mid-June to $93.50 in
September, a 24% change. A major reason for the price fall is fears that
considerable portions of the global economy are sliding into recession as
high energy prices (electricity, oil and natural gas) heighten inflation,
robbing consumers of their spending power.

 

 

Furthermore, the summer highs emanated from concerns that Russia would lose
most of its oil supply to the market due to the Ukrainian conflict.
Consumers in China and India purchased those barrels at a significant
discount since Western dealers avoided Russian oil without restrictions, so
the supply damage was not as severe as predicted.

 

Amid the prevailing challenges, oil producers are wary of a sudden price
collapse if the global economy goes downhill faster than expected. That
happened during the COVID-19 pandemic in 2020 and the global financial
crisis in 2008-2009. The recent energy diplomacy spike indicates oil market
shifts following Russia's invasion of Ukraine early this year.

 

OPEC+ resolution on oil and gas supply

 

The Organization of the Petroleum Exporting Countries and allied
oil-producing nations (OPEC+) resolved to cut daily oil production output by
two million barrels on October 5, 2022. These oil-producing countries, led
by Saudi Arabia, have decided to slash the amount of oil they deliver to the
global economy.

 

The group said that slashing supplies would help stabilise oil prices, which
have fallen in recent months as the world economy slowed down. Saudi
Arabia's Energy Minister Abdulaziz bin Salman noted that the alliance is
practical in adjusting supplies in anticipation of a likely drop in demand
due to a weakening global economy necessitating less fuel for industry and
travel. The decision has sent global shocks to the oil markets amid a
lingering energy crisis from the Russia-Ukraine conflict.

 

 

This move comes as the E.U. seeks an alternative opportunity while pressing
to encourage member nations to cut their energy use, not because winter is
coming, but to lessen the bloc's members' long-term reliance on Russia.
Furthermore, Western governments are attempting to limit the amount of oil
money going to Moscow's war chest after it invaded Ukraine.

 

United States criticises OPEC+

 

The United States questioned the OPEC+ resolution on oil and gas output,
calling it a "short-sighted decision." However, OPEC+ members defended their
resolution in light of uncertainties about future oil consumption and global
economic slump concerns.

 

Consequently, Biden's administration requested Saudi Arabia, OPEC's de facto
head, to postpone its oil supply resolution by one month. Notably, the White
House's proposal would have delayed the decision until after the mid-term
elections in the United States. OPEC denied the proposal, pointing towards
tighter global supply and higher prices amid inflationary pressures.

 

The Saudi government justified their decision on October 13, 2022. Saudi's
Energy Minister noted that all OPEC+ resolution is based on economic
projections and demands. According to the statement, the Saudi Kingdom
underscored through its ongoing conversation with the U.S. Administration
that all economic evaluations show that delaying the OPEC+ decision for a
month would have had severe economic implications.

 

African prospects after OPEC+resolution

 

>From an African standpoint, one should ask, "What does this reduction in oil
output mean for Africa?" Will the predicted increase in global oil prices
favour the small number of African oil producers?

 

There is a huge expectation for the continent's major petroleum-exporting
nations to gain from the recent decisions. Thus, these questions place
Africa in a dilemma. Many African nations might not cope with the
compounding struggles of reduced oil production and the unavoidable soaring
prices.

 

Africa's cumulative oil production is less than a tenth of the total world
output. Consequently, the advantages will almost definitely be equivalent to
its share, resulting in a negligible gain. However, it is inevitable in
terms of the influence it will have on the continent. The move will cause an
immediate scarcity of oil in several African nations.

 

Most African nations lack a petroleum sector and rely solely on imports for
end consumption. The persistent price increase will raise the cost of
Africa's oil imports. Consequently, the predicted rise in oil prices will
significantly affect their economy.

 

The OPEC+ resolution aggravates Africa's economic troubles, notably its goal
to boost the price of oil per barrel. Thus, African nations should strive to
enhance energy efficiency to limit the risk of oil price increases.

 

African governments must consider strategies to optimise the effective use
of imported oil. The optimisation will reduce net oil import proportions to
minimise expenses. More generally, African nations must explore these
strategies to minimise their reliance on oil as their only energy source.

 

Reducing oil consumption by shifting to renewable resources represents a
long-term or short-term solution. In contrast, if Africa is to benefit or
gain from the imminent possibility of an increase in oil prices, these few
oil-producing nations must expand their crude oil production and refinery
capacity.

 

-The Exchange.

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2022

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

National Unity Day

 

December 22

 


 

Christmas Day

 

December 25

 


 

Boxing Day

 

December 26

 


Companies under Cautionary

 

 

 


CBZH

Meikles

Fidelity

 


TSL

FMHL

Turnall

 


GBH

ZBFH

GetBucks

 


Zeco

Lafarge

Zimre

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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

 


 

 


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