Major International Business Headlines Brief::: 03 February 2023

Fri Feb 3 09:14:01 CAT 2023

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Major International Business Headlines Brief::: 03 February 2023 

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

ü  Apple sales in biggest fall since 2019

ü  PG&E to stand trial over deadly California wildfire

ü  Adani: How the billionaire's empire lost $100bn in days

ü  Argentina unveils new 2,000-peso banknote as inflation bites

ü  Bank of England says recession expected to be shorter and less severe

ü  Rates may have peaked, but economy remains fragile

ü  Cost of living: Car insurance pushed up by paint and energy prices

ü  Energy firms asked to suspend prepayment meter installs

ü  Argentina unveils new 2,000-peso banknote as inflation bites

ü  Sunderland driverless bus and HGV projects awarded £14m

ü  Cost of living: Welsh Water bill is the second highest

ü  British Gas admits agents break into struggling customers' homes

ü  Nigeria: Naira Swap - Pains Will Soon Be Over, Federal Govt Assures
Nigerians

ü  Nigeria: Fragile Borders Fueling Terrorism, Economic Sabotage, Illicit
Flow of Arms - Buhari

ü  Congo-Kinshasa: NGOs Demand End to Congo Oil Auction After Leak of Secret
Trade-Off Deal

 <mailto:info at bulls.co.zw> 

Apple sales in biggest fall since 2019

Apple sales dropped at the end of 2022 as shoppers squeezed by the rising
cost of living cut back their purchases.

Sales at the iPhone giant fell 5% in the three months to December compared
with the same period in 2021.

It was the biggest decline since 2019 and worse than expected.

The update came as many firms warn about a sharp economic slowdown,
especially in the tech sector which boomed during the pandemic.

Apple boss Tim Cook said the firm was navigating a "challenging
environment".

He blamed the sales decline on supply shortages due to Covid-19 disruption
in China - where its phones are manufactured - and a strong dollar, as well
as wider economic weakness stemming from rising prices, the war in Ukraine
and lingering effects from the pandemic.

"As the world continues to face unprecedented circumstances ... we know
Apple is not immune to it," he said on a conference call with investors.

Apple said the sales declines occurred throughout the world and hit most of
its products.

Sales of its popular iPhones were down more than 8%, and sales of Mac
computers dropped 29%.

The declines hit the firm's profits, which fell 13% to $30bn (£24bn).

Paolo Pescatore, analyst at PP Foresight, said the firm, like many
electronics makers, is struggling to make the case that users should upgrade
given "what is perceived to be incremental improvements on previous models".

"More so when everyone is tightening their belts," he added.

Globally the number of smartphones shipped sank 12% last year, according to
market analysis firm Canalys.

Apple executives said they expected their services business, which includes
Apple Pay and Apple News, to continue to drive growth, noting that there are
now more than 2 billion active Apple devices around the world.

"When we look at the behaviour of our installed base, we think it's very
promising," said chief financial officer Luca Maestri, while warning
investors that the firm was expecting sales to continue to decline in the
months ahead.

Other big tech companies also said they were feeling pressure in updates to
investors.

Amazon, which has been struggling to re-ignite its e-commerce business, said
sales at its online stores dropped 2% in the final three months of 2022,
compared with a year earlier.

Overall, Amazon's sales in the three month period rose 9% to $149.2bn
(£121bn), lifted by stronger growth in its cloud computing business.

But its profits dropped sharply, falling to near zero from $14.3bn (£11bn) a
year ago, a change that chief financial officer Brian Olsavsky warned
investors was likely to continue in coming months.

At Alphabet, parent company of Google and YouTube, sales were up just 1% in
the three months to December, compared with 2021, as firms cut back on
advertising - the company's main source of revenue - in the face of economic
uncertainty.-BBC

PG&E to stand trial over deadly California wildfire

A California utility giant must face trial for manslaughter for its role in
a 2020 wildfire that killed four people, a state judge has ruled.

It is the latest legal trouble for Pacific Gas & Electric, which has been
blamed for a series of deadly wildfires in the state in recent years.

A judge found prosecutors had presented enough evidence during a preliminary
hearing for the company to stand trial.

PG&E - the state's biggest utility provider - has pleaded not guilty.

The company is scheduled to appear at a hearing on 15 February when the
judge is expected to set a trial date.

The charges include involuntary manslaughter and recklessly starting a fire.
Twenty other charges were dismissed on Thursday.

The Zogg fire started in September 2020 in northern California and burned 88
sq miles (228 sq km) of land and more than 200 homes before it was
eventually contained.

Those killed included an 8-year-old girl and her mother as they tried to
drive away from their home.

An investigation revealed it began when a pine tree fell on power lines
belonging to PG&E. The utility giant told the BBC that it recognised its
equipment had caused the fire but denied criminal wrongdoing.

"We believe PG&E did not commit any crimes," it said. "We continue our work
to make it safe and make it right, both by resolving claims from past fires
and through our work to make our system safer every day."

PG&E filed for bankruptcy in 2019 after its faulty equipment sparked several
fires in California, including the 2018 Camp Fire which killed 84 people.

The company reached a $13.5bn (£11bn) settlement with the victims of that
wildfire and several others in 2015, 2016 and 2017.-BBC

Adani: How the billionaire's empire lost $100bn in days

Indian billionaire Gautam Adani has sought to reassure investors after his
company pulled a surprise by calling off its share sale.

On Wednesday, Adani Enterprises said it would return $2.5bn (£2bn) raised
from the sale to investors.

The decision will not impact "our existing operations and future plans", Mr
Adani has said.

The move caps an eventful week which began with a US investment firm making
fraud claims against Adani Group firms.

Adani denies the allegations.

But the group's companies have seen $108bn wiped off their market value over
the past few days.

Mr Adani himself has lost $48bn of his personal wealth, and is now 16th on
the Forbes real-time billionaires list.

How did this happen?

Less than two weeks ago, Mr Adani was the world's third richest man.

Shares of Adani Enterprises, the flagship company of his ports-to-energy
conglomerate, were due to go on sale on 25 January in India's largest ever
secondary share offering.

But a day before that, US-based investment firm Hindenburg Research
published a report accusing the Adani group of decades of "brazen" stock
manipulation and accounting fraud.

Hindenburg specialises in "short-selling" - betting against a company's
share price in the expectation that it will fall.

The Adani Group responded by calling the report "a malicious combination of
selective misinformation and stale, baseless and discredited allegations",
but that wasn't enough to stem investor fears.

Mr Adani's group has seven publicly traded companies which operate across a
wide range of sectors, including commodities trading, airports, utilities,
ports and renewable energy. Many Indian banks and state-owned insurance
companies have either invested in or loaned billions of dollars to companies
linked to the group.

Was that all?

No. As the market rout continued, the Adani Group issued a detailed rebuttal
- running into more than 400 pages - and called the Hindenburg report a
"calculated attack on India".

It said that it had complied with all local laws and had made the necessary
regulatory disclosures. It also accused the report of being intended to
enable Hindenburg "to book massive financial gain through wrongful means at
the cost of countless investors".

Hindenburg, however, stood by the report and said that the Adani Group had
"failed to specifically answer 62 of our 88 questions".

What was the market's reaction?

When the Adani Enterprises share sale began on 25 January, it received a
muted response. Only 3% of its shares had been subscribed by the second day
as retail investors stayed away.

But foreign institutional investors and corporate funds supported the group
- on 30 January, Abu Dhabi's International Holding Company, backed by a
member of the UAE royal family, invested $400 million in the share sale.

In a last-minute push, Indian tycoons Sajjan Jindal and Sunil Mittal also
subscribed to the share sale in their personal capacities, Bloomberg
reported.

Analyst Ambareesh Baliga told Reuters after the share sale that the group
had been unable to fulfil its aim to "broadbase the shareholding".

Shares of the group's various companies also continued to fall.

So what's next?

Reports by Reuters and Bloomberg say that India's central bank has asked the
country's lenders for details of their exposure to the group.

In his statement to India's exchanges, Mr Adani said, "Our balance sheet is
very healthy with strong cashflows and secure assets, and we have an
impeccable track record of servicing our debt."

But Edward Moya, an analyst at brokerage OANDA, told Reuters that the
withdrawal of the share sale was "troubling" because it was "supposed to
show the company is still believed in by its high net-worth investors".

American investment bank Citigroup's wealth arm has stopped accepting
securities of the Adani group as collateral for margin loans while Credit
Suisse has stopped accepting the group's bonds. Ratings agency Moody's unit
ICRA has said it was monitoring the impact of recent developments on Adani
Group stocks.

But Vinayak Chatterjee, founder and managing trustee of the Infravision
Foundation, was optimistic, calling the current situation "a short-term
blip".

"I have observed this group for a quarter century as an infrastructure
expert. I see varied operating projects from ports, airports, cements to
renewables which are solid, stable and are generating a health cash flow.
They are completely safe from the ups and downs of what happens in the stock
market," he told the BBC's Arunoday Mukharji.

However, Hemindra Hazari, an independent research analyst, said that he was
surprised that "we haven't heard anything from the market regulator SEBI or
the government till now".

"They should have spoken out to soothe the nerves of investors," he told the
BBC.

The issue has also set off a political row.

Mr Adani is perceived as being close to Prime Minister Narendra Modi and has
long faced allegations from opposition politicians that he has benefited
from his political ties, which he denies.

On Thursday, opposition parties demanded a discussion in parliament about
the risk to Indian investors from the fall in Adani company shares. They
have also asked for an investigation into Hindenburg's allegations.-BBC

Argentina unveils new 2,000-peso banknote as inflation bites

A new 2,000-peso banknote will be issued in Argentina in response to soaring
inflation, the country's central bank (BCRA) has confirmed.

The new note - which will be worth $11 (£9) officially - comes after
consumer prices jumped by nearly 95% in the 12 months to the end of
December.

It marks Argentina's fastest pace of inflation since 1991.

The largest current bill, the 1,000-peso note, is worth just $2.70 on the
alternative markets.

Writing on Twitter, the BCRA said the new note would "commemorate the
development of science and medicine in Argentina".

It will feature pioneering doctors Cecilia Grierson and Ramón Carrillo, it
added - although it is not clear when the note will enter circulation.

When Argentina's current currency was introduced in 1992, its value was
pegged at one US dollar.

But that fixed exchange rate system was abandoned after the financial crisis
that engulfed the country in 2001 and 2002.

Since then, the peso has lost so much of its value that one local artist
uses banknotes for painting on, because they are cheaper than a canvas.

Sergio Diaz, of Salta, recently painted a picture depicting Steven
Spielberg's movie Jaws as a parody of Argentina's ever-increasing inflation.

Argentina has seen prices rise sharply as the cost of commodities, including
energy, has gone up.

Soaring prices have largely been attributed to a bout of central bank
money-printing, as well as the war in Ukraine.

In December, the International Monetary Fund (IMF) approved another $6bn
(£4.9bn) of bailout money for South America's second largest economy.

It was the latest payout for Argentina in a 30-month programme that is
expected to reach a total of $44bn.

Last summer, the troubled country had three economy ministers in the space
of just four weeks.

In September, the central bank also raised its main rate of interest to 75%
as it tried to rein in the soaring cost of living.

Earlier this week, Brazil and Argentina announced plans to create a common
currency that would be used to boost trade between the two countries.

The country's leaders said they needed to find ways to finance commerce
without relying on US dollars - although discussions are at an early
stage.-BBC

Bank of England says recession expected to be shorter and less severe

The UK is set to enter recession this year but it will be shorter and less
severe than previously thought, according to the Bank of England.

The slump is now expected to last just over a year rather than almost two as
energy bills fall and price rises slow.

As a result fewer people are likely to lose their jobs, but the economy
remains fragile, warned the Bank.

The forecast comes as interest rates were raised to 4% from 3.5%, their
highest level in over 14 years.

The Bank has been putting up interest rates in a bid to tackle the soaring
cost of living.

Inflation, the rate at which prices rise, remains close to its highest level
for 40 years - more than five times what it should be.

Bank governor Andrew Bailey said inflation now appears to be falling, but
warned there are still "big risks out there" which could continue to have an
impact on the economy.

On Thursday, the Bank suggested interest rates may be nearing a peak,
indicating it will only raise rates further if it sees signs that inflation
will remain high.

However, the country is not forecast to bounce back to pre-Covid levels
until 2026, which Mr Bailey said was "extraordinary".

"Covid has had bigger long-run effects than we thought it would,
particularly in terms of things like the labour supply and people choosing
to come out of participating in the labour force."

Higher interest rates are meant to encourage people to save more and spend
less, helping to stop prices rising as quickly.

Thursday's hike in borrowing costs is the tenth in a row and will add
pressure to many households already struggling with the cost of living.

The impact will be felt by borrowers through higher mortgage and loan costs,
although it should also mean better returns for savers.

Homeowners with a typical tracker mortgage will now pay about £49 more a
month. Those on standard variable rate mortgages face a £31 increase.

Rates may have peaked, but economy remains fragile

What the rise in interest rates means for you

Why does the Bank of England change interest rates?

The Bank's predictions come after a separate forecast from the International
Monetary Fund (IMF) suggested the UK would be the only major economy to
shrink in 2023, performing worse than even Russia.

It is slightly more pessimistic than the IMF and it said that the UK economy
would be weak for some time.

The UK has a record 1.1 million job vacancies while the number of people
classed "economically inactive" - which is people aged between 16 and 64 not
looking for work - has risen.

Mr Bailey said that in most countries, the number of economically inactive
workers had fallen since the height of the pandemic, but this was not the
case in the UK.

"That is what marks the UK out," said Mr Bailey.

Business owner Jo Williams is worried about the extra costs of an interest
rate rise for her bed sales company and gift shop in Nuneaton.

The mortgage costs for the bed shop warehouse has gone up by £150 per month
and her own home mortgage is also creeping higher.

To make up those losses, Jo has cut opening times from 9.30am to 5pm, to
10am to 4pm and for the first time in eight years has made one member of
staff redundant.

What happens if I can't afford to pay my mortgage?

Why are prices rising so much?

"We tried everything to secure that job but it's a case of having to keep a
very, very close eye on cash flow right now," she explained.

Chart showing Bank of England GDP forecasts

Chancellor Jeremy Hunt said the government would act in "lockstep" with the
Bank to tackle inflation. This meant resisting the urge "to fund additional
spending or tax cuts through borrowing, which will only add fuel to the
inflation fire".

But Labour's shadow chancellor Rachel Reeves said: "The reality is that
under the Tories growth is on the floor, families are worse off and we are
stuck in the global slow lane."-BBC

Rates may have peaked, but economy remains fragile

The immediate recession should be milder and shorter than previously
expected, as energy prices fall, and interest rates do not rise as high as
previously expected.

That picture is reinforced by the Bank's decision while raising official
interest rates to 4%, to remove hints that they might go much higher. For
the first time in this series of 10 consecutive rises, the language suggests
that the job might be done, or very nearly done.

Further rate rises are no longer presumed. The peak in interest rates could
be imminent.

While this is still consistent with the energy shock recession lasting
through this year and into next, it is far shallower and does not last as
long as the two-year downturn previously predicted.

But on the other side, the recovery out of this downturn in the next few
years is expected to be very sluggish indeed.

The Bank assesses that Brexit, the pandemic and the energy shock has led to
an enduring hit to the economy. The workforce has not returned to its
pre-pandemic size, unlike other major economies. This is mainly down to
early retirements and therefore is likely to prove permanent. Fewer EU
workers in key sectors suffering shortages also plays a part.

The Bank has also reassessed post-Brexit goods trade data, and concluded
that the hit is notably more than suggested by official data. It believes
that the expected fall in UK productivity after Brexit "might have occurred
more quickly than previously assumed".

Enduring mark

In addition business investment - the key to boosting the economy in the
long term - remains "very subdued" well below pre-referendum levels, hit by
both Brexit and the pandemic.

Throw that all together and an economy that is still smaller now than it was
before the pandemic and Brexit, might not exceed that size until early 2026,
according to this new analysis. The promised "roaring" 2020s is looking more
like a lost half-decade at least.

So the good news is that the immediate shock should be milder, with
inflation, energy prices and interest rates higher than they were, yes, but
now on a lower path than previously expected. But the shocks have left an
enduring mark on the economy.

Is the Bank of England contradicting the message of the IMF on Tuesday, who
also forecast the UK having a shrinking economy this year?

No it isn't. The forecast of a shallow recession in 2023 is roughly the same
for both Bank and IMF. But after that, for the reasons outlined above, the
Bank sees some sluggish years ahead.

"The IMF actually take a slightly stronger view than we do," the Bank's
governor Andrew Bailey told me when I asked. And some of the reasons for the
longer term hit to the economy are specific to the UK.-BBC

Cost of living: Car insurance pushed up by paint and energy prices

Rising paint prices and higher energy costs were among the reasons for a
leap in the cost of motor insurance late last year, a trade body has said.

The average price paid for cover rose by 8% in the final three months of the
year, compared with the previous quarter, the Association of British
Insurers (ABI) said.

The typical premium of £470 was up 7% on the last three months of 2021.

Repair and courtesy car costs were factors in the increase, the ABI said.

The rise in the cost of paint and the jump in energy prices were among the
factors that made vehicle repairs cost more, the trade body said.

Jonathan Fong, senior policy adviser of general insurance at the ABI, said:
"Every motorist wants the best insurance deal, especially when coping with
cost-of-living pressures, and insurers continue to do all they can to keep
motor insurance as competitively priced as possible.

"Yet, like many other sectors, insurers continue to face higher costs, such
as more expensive raw materials, which are becoming increasingly challenging
to absorb.

"Anyone concerned about being able to continue paying their motor insurance
premium should speak to their insurer about any alternative payment options
that may be available."

Why are prices rising so much?

Insurers plan green replacements for write-offs

The price paid for renewing an existing motor insurance policy was typically
£428, the ABI said, whereas the average price paid for a new deal was a
record high of £531.

Rules introduced by the City regulator, the Financial Conduct Authority, in
January are designed to ensure people who are loyal to the same insurer are
not penalised for doing so.

The rules state that the price paid by renewing customers for motor and home
insurance is no greater than the price charged to an equivalent new customer
for the equivalent policy bought through the same distribution channel, such
as via an insurer, broker or price comparison website.-BBC

Energy firms asked to suspend prepayment meter installs

Energy companies have been asked to suspend the forced installation of
prepayment meters by the energy regulator Ofgem.

This comes after The Times found debt agents for British Gas had broken into
vulnerable people's homes to fit meters.

Ofgem has asked all suppliers to review the use of court warrants to enter
the homes of customers in arrears.

It said firms must get their "house in order".

Jonathan Brearley, the regulator's boss, said he had ordered the review into
pre-payment meters to "uncover poor practice" and that he would not hesitate
to take the "strongest action in our powers" where needed.

Prepayment meters require customers to pay for their energy in advance,
either through accounts or by adding credit to a card.

They are more expensive than paying by direct debit but are sometimes the
only option for people who have struggled to pay and are in debt to a
supplier.

The undercover investigation by The Times revealed how agents working for
Arvato Financial Solutions on behalf of British Gas had forced their way
into the home of a single father-of-three to install a prepayment meter.

Chris O'Shea, the boss of Centrica which owns British Gas, earlier told the
BBC he was horrified by this and the firm has said it will suspend
forcefully installing prepayment meters until at least after the winter.

Mr O'Shea acknowledged he was "accountable" for the contractor's actions
while Arvato Financial Solutions has not commented.

EDF, Britain's second largest supplier, has also confirmed it is suspending
the forced installation of prepayment meters and reviewing its practices to
see if it can make improvements.

Ovo Energy suspended its warrant activities in November and Octopus Energy
said it was "not installing any at the moment" and rarely had done.

Ofgem said energy suppliers had been asked to examine their relationships
with third-party contractors and to look at "incentives that could give rise
to poor and unacceptable behaviours".

Mr Brearley warned no energy chief executive could "shirk their legal and
moral responsibilities to protect their own customers, especially the most
vulnerable".

In the case of British Gas, Mr Brearley said it was "astonishing for any
supplier not to know about their own contractors' behaviour, especially
where they are interacting with the most vulnerable in our society".

"We are opening a comprehensive investigation into British Gas on this issue
and we will not hesitate to take the strongest action needed," he added.

Graham Stuart, the minister for energy and climate, said British Gas should
"hold their heads in shame".

Though the company had announced it was supporting customers, "it turns out
they were doing anything but", he said.

Mr Stuart told the BBC he had met all energy suppliers last week to talk
about how to improve looking after vulnerable people "because there are
clear rules and they have obviously not been followed".

He said the discovery of how some British Gas customers had been treated was
"just appalling".

"It's disgraceful and it must stop. I am angry, everyone should be angry.
It's completely in the face of all the promises that I've been made by
suppliers," he added.

'It felt violating'

Jane, who did not want us to use her surname, came home to her recently
bought house in Poole, Dorset, in 2014 to find that someone had been in her
home, installed a prepayment meter and left a letter in the kitchen.

Jane said the "horrid" experience had happened just after she had lost her
unborn child at 17 weeks. She said she was mentally "broken".

The now 46-year-old said she had been sent letters addressed to a previous
occupant and had posted them marked 'return to sender'. Jane added she was
signed up to a direct debit plan with her energy provider, and had not
missed a payment.

She called the firm and said it transpired that it had been the previous
tenant who had been in arrears. She said a neighbour with a spare key was
persuaded to let the installers in.

Jane said her energy provider had apologised on the phone for the mistake,
removed the prepayment meter and credited her account with £45.

"It feels violating to have someone come into your house like that. It was
so scary," she said. "You could sense someone had been in. The house was
freezing cold."

Row over energy prepayment switching rules

British Gas debt agents break into homes of vulnerable

EDF said in 2022 the supplier had applied for 13,766 warrants in relation to
domestic customer debt and in around half of the cases, the firm had taken
the decision not to proceed "once the customer had engaged" and the firm
"understood their circumstances".

A spokesman for British Gas said it had about 1.5 million customers on
prepayment meters and last year had executed around 20,000 prepayment
installs with a warrant. It is the country's largest supplier with 7.26m
customers.

Media caption,

Centrica boss Chris O'Shea: "Every one of our customers deserves to be
treated with respect"

Strict rules apply that prevent energy firms putting an at-risk customer on
a prepayment meter, but in certain circumstances customers in arrears can be
moved either remotely on a smart meter, or physically after the firm has
been given a warrant to do so.

Suppliers are required to have exhausted all other options before installing
a prepayment meter, and should not do so for those in the most vulnerable
situations.

Utilita said it had suspended installing physical prepayment meters under
warrant. The company is a specialist prepayment energy supplier and has the
majority of its 827,000 customers on smart meters.

Octopus Energy said it carried out 31 in its history under a warrant. It
said it had suspended all Bulb warrants shortly after it took over the firm.

So Energy said it had not "force-fitted" any physical prepayment meters
under warrant. It added it had never switched a smart meter remotely from
credit to prepay without the customer's knowledge or consent.

Dame Clare Moriarty, chief executive of Citizen Advice which has been
calling for a ban on forced prepayment installations, welcomed Ofgem's
announcement.

"The rotten core of debt collection practice in the energy sector has now
been exposed for all to see. But this isn't a case of one bad apple," Ms
Moriarty said.-BBC

Argentina unveils new 2,000-peso banknote as inflation bites