Africa – Page 2 – Wall Street Observer

Exclusive: Angola moves to seize Dos Santos-linked asset in Dutch court

Posted on Mon, Feb 8, 2021, 5:26amMon, Feb 8, 2021, 5:39am by Reuters

By Noah Browning

LONDON (Reuters) – Angola has asked a Dutch court to hand over a half-billion-dollar stake in the Portuguese oil company Galp linked to ex-first daughter Isabel Dos Santos, its lawyers told Reuters.

Angola’s government says top officials under former president Jose Eduardo dos Santos took advantage of high oil prices in the last decade to spin a global web of business deals that led to their personal enrichment at the country’s expense.

Battered by COVID-19 economic fallout and mired in foreign debt, Angola is seeking to recover assets it says were siphoned off.

Its prime focus is Isabel dos Santos, the ex-president’s daughter, a business tycoon who became Africa’s richest woman.

The legal bid for the Galp stake has not previously been reported.

Dos Santos briefly ran state oil company Sonangol from 2016 until 2017, when her father’s four-decade rule ended.

Representatives for Isabel dos Santos, who lives outside Angola, did not reply to a Reuters request for comment.

She has denied any connection to the holding company at the centre of the case – Exem – which she says was owned by her late husband, rejects charges of wrongdoing and says she faces a political witch hunt by Angola’s new leadership.

Representatives of Exem did not reply to a request for comment. Dutch law firm Van Doorne, which represents Exem in the lawsuit, also did not respond to a request for comment.

The legal claim by Sonangol is due to be heard in the last week of May in the Amsterdam court of appeal, the 100%-state owned company’s lawyer Emmanuel Gaillard of law firm Shearman & Sterling said.

It will argue that Exem’s stake was acquired through embezzlement and money laundering.

“It’s all corruption … you (Exem) owe us the shares, the indirect participation in Galp, because it’s theft. It’s illegal, therefore you have to pay it back,” Gaillard said.

HOLDING COMPANIES

Sonangol’s lawyers say the sale by Sonangol of part of its stake in Esperaza to Exem made no business sense for Angola and was made to enrich the former first family. Under President Dos Santos, Sonangol sold a 40% stake in anoffshore holding company, Esperaza, to another holding company -Exem – owned by Isabel’s husband Sindika Dokolo, a Congolese businessman who died in a diving accident last year.

Esperaza, in which Sonangol retained a 60% stake, in turn partnered with the business empire of Portugal’s Amorim family to form yet another holding company, Amorim Energia, which is the largest shareholder in Portuguese oil company Galp Energia with a 33.3% stake.

Graphic: Exem and Sonangol https://fingfx.thomsonreuters.com/gfx/mkt/xklvyqgozvg/Amorim.JPG

The value of holding company Exem’s indirect stake in Galp fluctuates with oil prices and is currently worth about $500 million. A source with knowledge of the Amorim family’s position, who declined to be named, said its main interlocutor in the joint stake was not Exem but Sonangol, calling their partnership with the state firm “good and close”. “(The case) does not affect these relations, it does notchange anything,” the source added.

Galp has said it has no dealings with Dos Santos. It declined further comment for this story.

The dispute, which is being heard in Amsterdam after bothsides agreed on arbitration, already resulted in a ruling last September that removed Exem’s representative from Esperaza’s board and put its stake under the control of a court-appointed trustee.

Camilo Schutte, the Amsterdam lawyer selected by the court to represent Esperaza, said he was not currently party to the litigation and referred questions to representatives of Sonangol and Exem.

(Additional reporting by Sergio Goncalves; Editing by Barbara Lewis and Jan Harvey)

Big Wall St. investors chased tech during GameStop retail frenzy – BofA

Posted on Fri, Feb 5, 2021, 4:31amFri, Feb 5, 2021, 4:41am by Reuters

LONDON (Reuters) – Deep-pocketed investors pumped a record $4.2 billion into big technology stocks last week, BofA’s flow data showed on Friday, taking advantage of the slight pullback on Wall Street while retail traders were busy buying stocks such as GameStop.

An army of retail investors went toe-to-toe with Wall Street professionals last month by buying into stocks that were heavily shorted by hedge funds. In the tussle, some funds had to sell out of their long positions to cover the losses, causing wider falls in stock prices.

“Big client zeitgeist in past two weeks has unambiguously been to buy the FAANMG (Facebook, Amazon, Apple, Netflix, Microsoft and Google-owner Alphabet) underperformance,” said Michael Hartnett, BofA’s chief investment strategist.

Big Tech has been one of the biggest winners of the pandemic, with revenues turbocharged by stay-at-home rules and increased interest from investors who are taking advantage of the cheap money available.

Meanwhile, a sudden jump in equity volatility last week also sent investors running for safety with bonds attracting $21.2 billion, the largest in four months. Those fears, however, receded this week with Wall Street’s main indexes hitting record highs.

Away from the Wall Street noise, emerging markets stocks have been the top pick among investors as they poured in $5.7 billion in the week to Wednesday, marking inflows in 19 of the past 20 weeks.

The retail trading fever also sent silver surging past $30 an ounce for the first time since 2013 before prices fell back. The precious metal attracted a record $2.8 billion in the week to Wednesday, BofA said.

(Reporting by Thyagaraju Adinarayan; Editing by Tommy Wilkes and Susan Fenton)

Europe lifts safety ban on Boeing 737 MAX jet

Posted on Wed, Jan 27, 2021, 3:59pmWed, Jan 27, 2021, 4:07pm by Reuters

By Tim Hepher and Rachit Vats

(Reuters) – European regulators on Wednesday lifted a 22-month ban on flights of the Boeing 737 MAX after a design and pilot training overhaul in the wake of crashes that killed 346 people.

The European Union Aviation Safety Agency (EASA) confirmed a provisional approval given in November, but dropped calls for an extra flight-angle sensor to back up a system implicated in crashes.

“Let me be quite clear that this journey does not end here,” Executive Director Patrick Ky said in a statement.

“We have every confidence that the aircraft is safe, which is the precondition for giving our approval. But we will continue to monitor 737 MAX operations closely as the aircraft resumes service.”

Regulators worldwide grounded the MAX in March 2019 after crashes in Indonesia and Ethiopia.

The United States lifted its ban last November, followed by Brazil and Canada. Britain, which is no longer in EASA after leaving the EU, followed the agency’s lead on Wednesday.

Relatives of some victims have criticised the move to clear the 737 MAX, the latest version of the world’s most-flown jet.

Crash investigations show bad data from a single faulty sensor triggered a barely documented software system that ordered repeated dives and overwhelmed both accident crews.

Boeing has said data from both “Angle of Attack” sensors on the MAX will be tracked in the modified aircraft, instead of just one as in the past. But EASA has suggested a third sensor system to act as a jury in case one of the main sensors fails.

The proposal, opposed by the U.S. Federal Aviation Administration, triggered a regulatory tussle over whether existing modifications would allow pilots to cope with any sensor outage, or whether a further safety net was needed.

Ky said in September that Boeing had agreed to install the digital equivalent of a third sensor on the next version, the 737 MAX 10, followed by retrofits on other models.

SENSOR DEMAND DROPPED

However, in a document alongside the ungrounding order, EASA dropped the proposal for a third “synthetic” sensor on the grounds that Boeing had promised other ways of securing data.

It said Boeing had agreed to develop further changes “within two years” to improve fault-monitoring and allow pilots easily to select the right data.

An EASA spokeswoman said the solution now being considered by Boeing was different from a third sensor but “broadly aligned”. She declined further comment on proprietary details.

A Boeing spokesman said: “We will address all regulatory requirements, technical needs and testing requirements.”

In comments to EASA released on Wednesday, Virginie Fricaudet, who lost her sister on Ethiopian flight 302 and who heads a France-based relatives association, said the MAX was “aerodynamically unstable” and should have a third sensor.

Naoise Ryan, who lost her husband, the global deputy chief engineer of the U.N. World Food Programme, in the same crash, called the MAX a ‘bastard-type’ aircraft with modern modifications bolted onto a 1960s aircraft design.

EASA acknowledged the aircraft’s technical roots would hinder the addition of complex new systems.

“Due to the legacy … architecture of the Boeing 737, the installation of an additional AOA sensor would require a significant engineering effort,” it said, adding that Boeing had nonetheless demonstrated that its approach was viable and safe.

The challenges of developing upgrades, rather than the much bigger expense of a clean-sheet design, were further highlighted on Wednesday when Boeing took a $6.5 billion charge to redesign part of its upcoming 777X, including control electronics.

Boeing said the changes to the plane, a derivative of its 1990s mini-jumbo, would anticipate regulatory changes resulting from the MAX crisis.

(Reporting by Tim Hepher, Sudip Kar-Gupta, Rachit Vats; Editing by Jason Neely, Kirsten Donovan and Jan Harvey)

IMF lifts global growth forecast for 2021, still sees ‘exceptional uncertainty’

Posted on Tue, Jan 26, 2021, 3:04pmTue, Jan 26, 2021, 3:10pm by Reuters

By Andrea Shalal

WASHINGTON (Reuters) – The International Monetary Fund on Tuesday raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn last year – the biggest peacetime contraction since the Great Depression – would be nearly a full percentage point less severe than expected.

The global lender said multiple vaccine approvals and the start of vaccinations in some countries had boosted hopes of an eventual end to the pandemic that has now infected nearly 100 million people and claimed the lives of more than 2.1 million globally.

But it warned that the world economy continued to face “exceptional uncertainty” and new waves of COVID-19 infections and variants posed risks, and global activity would remain well below pre-COVID-19 projections made one year ago.

IMF chief economist Gita Gopinath said U.S. President Joe Biden’s pledge to fund the World Health Organization’s COVAX vaccine initiative marked “a very big step” to containing the pandemic and ensuring more equitable distribution of vaccines.

“Much more will be needed, because as we can see, given the mutating virus, that this is not a problem that’s going away anytime soon,” Gopinath told a news conference.

“There is still a tremendous amount of uncertainty,” she told Reuters in a separate interview. “We know that the health crisis is not over until it’s over everywhere.”

Gopinath said the global economy could gain $9 trillion between 2020 and 2025 if faster progress could be made in ending the health crisis, and it was clearly in the interest of advanced economies to help poorer countries recover.

“There’s a complete economic sense to do this, and do it right now,” she told Reuters.

The IMF estimates that close to 90 million people are likely to fall below the extreme poverty threshold during 2020-2021, with the pandemic wiping some out $22 trillion in projected output through 2025 and reversing progress made in reducing poverty over the past two decades.

Gopinath said advanced economies were recovering more quickly, and urged countries with means to continue to offer poorer nations aid, low-interest loans and debt relief.

“There is still much, much to be done, but we’re certainly at least in positive growth territory this year, as opposed to last year,” she told the news conference.

VACCINE-POWERED UPTICK

In its latest World Economic Outlook, the IMF forecast a 2020 global contraction of 3.5%, an improvement of 0.9 percentage points from the 4.4% slump predicted in October, given stronger-than-expected momentum in the second half of last year.

It predicted global growth of 5.5% in 2021, 0.3 percentage points better than in October, citing expectations of a vaccine-powered uptick later in the year and added policy support in the United States, Japan and a few other large economies.

It said the U.S. economy, the largest in the world, was expected to grow by 5.1% in 2021, an upward revision of 2 percentage points attributed to carryover from strong momentum in the second half of 2020 and the benefit accruing from about $900 billion in additional fiscal support approved in December.

The outlook would likely improve further if the U.S. Congress passes a $1.9 trillion relief package proposed by Biden, Gopinath said, forecasting a 5% boost over three years if the package is approved by the U.S. Congress.

China’s economy is expected to expand by 8.1% in 2021 and 5.6% in 2022, compared with the October forecasts of 8.2% and 5.8%, respectively, while India’s economy is seen growing 11.5% in 2021, up 2.7 percentage points from the October forecast, after a stronger-than-expected recovery in 2020.

The Fund said countries should continue to support their economies until activity normalized to limit persistent damage from the deep recession of the past year.

Low-income countries would need continued support through grants, low-interest loans and debt relief, and some countries may require debt restructuring, the IMF said.

(Reporting by Andrea Shalal; Editing by Shri Navaratnam, Paul Simao and Nick Zieminski)

Boeing 737 MAX to fly again in Europe, angering some crash relatives

Posted on Mon, Jan 25, 2021, 12:33pmMon, Jan 25, 2021, 12:40pm by Reuters

By Tim Hepher

PARIS (Reuters) – Europe is set to lift a 22-month flight ban on the Boeing 737 MAX this week after reviewing submissions by industry experts and whistleblowers, angering relatives of some of the 346 crash victims, who say the move is premature.

A green light from the European Union Aviation Safety Agency (EASA) is a key step towards resolving an almost two-year safety crisis after crashes of the best-selling jet in Indonesia and Ethiopia which were linked to flawed cockpit software.

The United States lifted its own ban in November, followed by Brazil and Canada. China, which was first to ban the plane after the second crash in March 2019 and which represents a quarter of MAX sales, has not said when it will act.

After giving provisional approval in November, EASA sifted through input from 38 commenters and “received directly a number of whistleblower reports that we thoroughly analysed and took into account,” Executive Director Patrick Ky said on Monday.

That, he said, did not expose any fresh technical problems.

But a France-based victims’ group, Solidarity and Justice, called the move “premature, inappropriate and even dangerous”.

Analysts and airline chiefs say EASA, which represents 31 mainly EU nations, has emerged stronger from the crisis, which eroded U.S. leadership of aviation safety.

Its U.S. counterpart, the Federal Aviation Administration, has been faulted for lax oversight of Boeing in approving the MAX, which featured little-documented software capable of ordering repeated dives based on just one vulnerable sensor.

Among its conditions for clearing the jet, EASA insisted on doing its own independent review of all critical systems well beyond the MCAS software, irking Boeing and some U.S. officials.

It also said the causes of the accidents must be understood, design changes must be implemented and pilots properly trained.

“We believe those four conditions are now met,” Ky said.

But one lasting impact will be on a decade-old trend towards interdependence which had seen regulators rely on each other’s safety judgments, amid pressure to be more efficient.

Under a 2011 agreement, EASA and the FAA agreed to base their evaluation of airplanes designed in each other’s territory on the tests and compliance decisions carried out by the other agency “to the maximum extent practicable”.

“Of course given those tragedies we have stopped this trend and we will increase our level of involvement,” Ky said, referring to EASA approval of future U.S. designs.

Analysts have said increased checks could slow certification of Boeing’s upcoming 777X, while the FAA could retaliate by stepping up oversight of France-based Airbus.

(This story refiles to add dropped word “on” in para 12)

(Reporting by Tim Hepher; Editing by Alexander Smith)

Alphabet shutting Loon, which used balloon alternative to cell towers

Posted on Fri, Jan 22, 2021, 12:24pmFri, Jan 22, 2021, 12:25pm by Reuters

By Paresh Dave

OAKLAND, Calif. (Reuters) – Alphabet Inc is shutting down Loon after concluding the business, which offers balloons as an alternative to cell towers, is not commercially viable, Google’s parent company said on Thursday.

Founded in 2011, Loon aimed to bring connectivity to areas of the world where building cell towers is too expensive or treacherous using balloons the length of tennis courts and solar-powered networking gear.

But the wireless carriers which Loon saw as buyers questioned the technical and political viability of the idea.

“While we’ve found a number of willing partners along the way, we haven’t found a way to get the costs low enough to build a long-term, sustainable business,” Loon CEO Alastair Westgarth said in a blog post.

Rich DeVaul, a founder of the project who is no longer with Alphabet, said surging demand for mobile connectivity made towers cost-effective in more of the world than he had estimated a decade ago, diminishing the need for Loon.

“The problem got solved faster than we thought,” he said in an interview.

Westgarth said Loon’s legacy would include developing helium balloons which last hundreds of days in the sky and communications equipment that can deliver cell coverage across an area 200 times larger than that reached by an average cell tower.

However, a carrier would need several balloons at once, each would cost tens of thousands of dollars and last only about five months.

Loon launched a pilot project in Kenya in 2020, years behind schedule after regulatory delays.

Its partner, Telkom Kenya, said their joint service with Loon will run until March 1.

“Over the coming months, the Loon team will work closely with Telkom to ensure the operations of the technology’s pilot service are wrapped up safely and smoothly,” Telkom said in a statement.

The technology previously proved successful in short projects to provide cell coverage in Peru and Puerto Rico when cell towers were downed by natural disasters.

Loon sought contracts with countries and international organizations for future emergencies, but with little success.

Loon said it may share its technology with carriers, governments or nonprofit groups aiming to bring high-speed internet to the last few places in the world.

The company employed 200 people as of 2019. It drew a $125 million investment that year from SoftBank’s HAPSMobile, which is working on floating cell equipment using drones.

HAPSMobile declined to comment on the financial effect of Loon’s shutdown but said it would “continue to work toward our goal of developing a commercial business”.

Separately, companies backed by billionaire entrepreneurs, such as Elon Musk, Richard Branson and Jeff Bezos, continue to look at offering internet connections using satellites in near-Earth orbit.

Alphabet has already closed some of what it calls its “other bets”, or entities separate to Google, including one working on power-generating kites.

Its Wing business aims to commercialize goods delivery by drone.

(Additional reporting by Duncan Miriri in Nairobi; editing by Peter Cooney, Gerry Doyle and Jason Neely)

Boeing 737 MAX to get EU flight clearance next week

Posted on Tue, Jan 19, 2021, 7:15amTue, Jan 19, 2021, 7:27am by Reuters

PARIS (Reuters) – Boeing’s 737 MAX airliner will receive final clearance to resume flying in Europe next week, the head of the EU’s air safety watchdog said on Tuesday.

The EU Aviation Safety Agency (EASA) is one of the last major regulators to approve changes to the MAX and its anti-stall software, blamed for two deadly crashes that grounded the jet in March 2019.

The European agency, which published a draft airworthiness directive in November, has made largely presentational adjustments after public consultations, Executive Director Patrick Ky said in an online media briefing.

“We expect to publish it next week, which means the MAX will be cleared to fly again,” Ky said. A separate certification of the MAX-200 variant will likely follow in “coming weeks”, he added, allowing flights to resume before summer.

The U.S. Federal Aviation Administration (FAA) and Brazilian authorities both cleared the MAX for flight in November. Canada is expected to follow suit on Wednesday.

Following the crashes, EASA insisted on carrying out a broader and deeper review than it typically conducts on Boeing jets under the FAA’s primary authority.

Emirates President Tim Clark last week credited the European regulator’s “very hard line” for helping to restore public trust in the MAX.

(Reporting by Laurence Frost; editing by Jason Neely and Louise Heavens)

Carmaker Stellantis shares star in European debut

Posted on Mon, Jan 18, 2021, 11:20amMon, Jan 18, 2021, 11:25am by Reuters

By Giulio Piovaccari

MILAN (Reuters) – Stellantis, the carmaker created by combining Fiat Chrysler and Peugeot-owner PSA, enjoyed a positive start on Monday, its shares rising 8% on their European market debut and valuing the business at around 42 billion euros ($51 billion).

With annual production of around 8 million vehicles and revenues of more than 165 billion euros, the world’s fourth largest auto company is expected to play a key role in the industry’s jump into the new era of electrification.

Stellantis will have 14 brands, from FCA’s Fiat, Maserati and U.S.-focused Jeep, Dodge and Ram to PSA’s traditionally Europe-focused Peugeot, Citroen, Opel and DS.

“We have the scale, the resources, the diversity and the knowhow to successfully capture the opportunities of this new era in transportation,” Chairman John Elkann said in a video on the Borsa Italiana website to mark the occasion.

Chief Executive Carlos Tavares said the merger would add 25 billion euros in value for shareholders over the years, thanks to projected cost cuts.

“I can tell you that the focus from day one will be on the value creation that is the result of the implementation of those synergies,” Tavares said in the same video.

Fiat Chrysler (FCA) and PSA have said Stellantis can cut costs by more than 5 billion euros a year without plant closures.

Milan-listed shares of Stellantis started trading at 12.758 euros and at 1330 GMT were up 8.1% at of 13.59 euros. The Paris-listed shares traded around the same level.

That compares with Fiat Chrysler’s (FCA) close on Friday at 12.57 euros.

Over the weekend, PSA shares were exchanged into new FCA shares. All FCA shares were then renamed as Stellantis.

A Milan-based trader said part of the rise can be explained by technical reasons, with funds buying shares to adjust their portfolio exposures to the new company.

Also, former FCA investors are reinvesting part of the proceeds of a 2.9 billion euro special divided FCA paid them last week, a second trader said.

The stock will debut in New York on Tuesday, when Tavares will also hold his first news conference as the head of Stellantis.

Intesa Sanpaolo analyst Monica Bosio said she expected markets would start pricing in synergies at Stellantis only once their impact becomes visible from the second half of this year.

“However, even excluding synergies, … we continue to view Stellantis as underappreciated on all metrics in comparison with its most direct peers,” Bosio said in a note.

($1 = 0.8293 euros)

(Reporting by Giulio Piovaccari; additional rpeorting by Giancarlo Navach. Editing by Mark Potter and Keith Weir)