AFP

Automakers reports lower Q2 US sales as supply chain woes persist

3 Jul 2022

General Motors, Toyota and other automakers suffered a hit to US sales in the latest quarter as supply chain woes continued to crimp inventories, according to results released Friday.

GM sold 582,401 autos in the three months ending June 30, a drop of 15 percent from the same period a year ago. 

The Detroit giant said it is holding 95,000 partially-built vehicles in need of components that it expects to deliver by the end of 2022. 

Such maneuvers have become the norm over the last year as manufacturers try to make headway on as many high-margin vehicles as possible amid limited supply of semiconductors and other key items. 

On the positive side, GM said it scored strong sales for its pickup trucks, the Chevrolet Silverado and GMC Sierra, despite low inventories. And “pent-up demand” drove sales growth in other vehicles, including the Chevrolet Camaro and Chevrolet Colorado.

GM reaffirmed its full-year profit outlook, but its second-quarter net income range of between $1.6 billion and $1.9 billion lagged consensus estimates.

Meanwhile, Toyota reported sales of 531,105 over the same period, a drop of 23 percent compared with the 2021 quarter, and the Japanese company also cited “ongoing inventory challenges” hindering its dealerships.

A bright spot has been a jump in sales of Toyota’s electric vehicles, which have comprised more than 25 percent of Toyota’s sales so far this year.

Cox Automotive has forecast a 19.3 percent drop in US auto sales for the second quarter.

“Even though economic conditions have worsened in the past months, the lack of supply is still the greatest headwind facing the auto industry today,” said Charlie Chesbrough, senior economist at Cox.

Hyundai Motor America reported a drop of 23 percent sales drop to 184,191 units.

White rhinos return to Mozambique park after 40 years

3 Jul 2022

A Mozambican park welcomed its first white rhinos in 40 years on Friday after 19 of the threatened animals completed a 1,600-kilometre (thousand-mile) truck ride from South Africa, conservationists said.

The rhinos were reintroduced to Zinave National Park in southern Mozambique under an initiative to restore wildlife and boost the local economy.

Wildlife in the 4,000-square-kilometre (1,500-square-mile) haven was decimated by Mozambique’s decades-long civil war, which ended in 1992, and by poaching.

“The return of the rhino allows for Zinave to be introduced as a new and exciting tourism destination in Mozambique,” said Werner Myburgh, head of Peace Parks Foundation (PPF), the conservation group that led the project.

Zinave is now the only national park in Mozambique to house all “Big Five” African game animals — elephant, rhino, lion, leopard and buffalo — Myburgh said in a statement.

Since 2015, 2,400 animals from 14 species have been released into the reserve.

The rhinoceroses were hauled to Zinave from neighbouring South Africa over several days in June, in what the PPF said was the longest-ever transfer of rhinos by road.

On Friday, some of the animals were released from their enclosures into a sanctuary featuring extra security to protect them from poachers.

The ceremony was attended by President Filipe Nyusi and Environment Minister Ivete Maibaze.

“The protection of biodiversity is a universal imperative and together we will continue to fight for the preservation of our natural heritage,” said Nyusi.

“Only then will future generations be able to enjoy the benefits of nature and join our mission of preserving our natural resources.”

The white rhinoceros is classified as near-threatened by the International Union for Conservation of Nature (IUCN) while its cousin, the African black rhino, is listed as critically endangered.

The PPF said it planned to more than double the park’s rhino population over the next three years, adding more from both species.

French police bust gang selling fake Bordeaux wine

4 Jul 2022

French police have broken up a gang that had allegedly produced hundreds of thousands of bottles of fake Bordeaux wine in an elaborate counterfeiting operation, prosecutors said on Friday.

Officers investigating drug dealing in the southwestern French region discovered printing machinery being used to create the labels for the bottles last September, sparking a wider criminal probe.

It led to the arrest of around 20 people on Monday during an operation in seven different areas of France, with three of them charged with organised fraud, counterfeiting and money laundering.

The main suspect is a winemaker and broker in the Medoc region near Bordeaux who was buying low-grade wine from other areas including Spain, then bottling it up as more expensive local produce, a statement from Bordeaux prosecutors’ office said.

“Major orders” had been placed for the wine “destined for supermarkets and foreign countries”, the statement added.

Bottling operations were being run at night to avoid detection, it said.

“If the allegations are proven, we hope that the culprits will be heavily punished because these practices undermine the image of Bordeaux wines and those who work properly and respect the rules,” the local wine industry body told AFP.

French wine makers, customs and police are constantly on the lookout for cheats who pass off budget plonk as top vintages.

In 2016, police busted a Bordeaux vintner who was blending poor-quality wine with high-end Saint-Emilions, Lalande-de-Pomerols and Listrac-Medocs to sell to major supermarkets under prestigious labels.

The owner of several domains, Francois-Marie Marret, was handed a prison sentence and a fine of eight million euros after being found bringing in cheap wine at night.

In 2010, 12 French winemakers and dealers were convicted of selling millions of bottles of fake Pinot Noir to the US firm E&J Gallo.

Before that, in 2006 legendary Beaujolais winemaker Georges Duboeuf was fined more than 30,000 euros for blending grapes from different vineyards to disguise the poor quality of certain prized vintages.

Stocks choppy, dollar frothy

1 Jul 2022

Stock markets wobbled on Friday while the dollar shot higher against the euro and pound as investors fretted about interest rate hikes and a possible recession.

Both Paris and Frankfurt stocks ended the day with small gains despite news of record-high eurozone inflation that reinforced expectations of a European Central Bank interest rate hike later this month.

The EU’s Eurostat data agency said annual consumer price inflation in the 19 countries that use the euro soared to 8.6 percent in June, up from the prior record of 8.1 percent in May.

“Today’s figures bolster the European Central Bank’s intended decision to start raising interest rates at its next Governing Council meeting in July,” noted economist Pushpin Singh at research group CEBR.

The ECB stated last month that it will deliver its first interest rate hike in more than a decade in July to combat inflation. 

Eurostat added Friday that core inflation — stripping out volatile components like energy and food — slowed to 3.7 percent from 3.8 percent, helping equities to calm heading into the weekend pause.

Wall Street’s main indices were marginally lower in late morning trading, having bounced around since the opening bell.

– ‘Another big leg lower’ – 

Chris Beauchamp, chief market analyst at online trading platform IG, said there was little buying interest at the start of the second half of the year, even though the sharp drops suffered by stocks in the first half open up the possibility for gains.

New York’s S&P 500 index suffered its worst first-half performance since 1970.

“There is a growing unease about the summer, especially with a potentially very gloomy (second-quarter) earnings season nearly upon us,” he said in a note to clients. 

“It really does look like we have another big leg lower before this bear market is done,” added Beauchamp.

With the war in Ukraine showing no sign of ending — keeping energy costs elevated — there is an expectation that borrowing costs will continue to rise and send economies into recession.

Losses across world markets this week come after a rally last week fuelled by hopes that an economic slowdown or signs of recession would lead central banks to ease off their monetary tightening drive.

But comments from top finance chiefs, including Federal Reserve boss Jerome Powell, suggest they are willing to endure the pain of a contraction as long as they can rein in prices — which are rising at their fastest pace in 40 years on both sides of the Atlantic.

“Investors know that inflation is high and is likely to push higher,” City Index analyst Fiona Cincotta told AFP.

“Instead, the market’s obsession is turning from inflation to recession fears. Given the steep declines in stock prices this week, much of the bad news is priced in for now, until it starts again next week,” she added.

The dollar, a safe-haven currency, jumped one percent against the pound and the euro on rising expectations of a recession.

“The US dollar looks set to end the week stronger against most major currencies, nearing its strongest level since 2002 as ‘risky’ assets remained under pressure,” said economist James Reilly at Capital Economics.

The euro slid to a low of $1.0369 before rebounding back above the $1.04 level. The pound touched a low of $1.1979.

Oil rebounded on tight supplies despite persistent recession concerns.

– Key figures at around 1530 GMT –

New York – Dow: DOWN 0.3 percent at 30,693.52 points

EURO STOXX 50: DOWN 0.2 percent at 3,448.31

London – FTSE 100: FLAT at 7,168.65 (close) 

Frankfurt – DAX: UP 0.2 percent at 12,813.03 (close)

Paris – CAC 40: UP 0.1 percent at 5,931.06 (close)

Tokyo – Nikkei 225: DOWN 1.7 percent at 25,935.62 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,387.64 (close)

Hong Kong – Hang Seng Index: Closed for a holiday

Brent North Sea crude: UP 1.9 percent at $111.12 per barrel

West Texas Intermediate: UP 2.2 percent at $108.08 per barrel

Euro/dollar: DOWN at $1.0405 from $1.0484 Thursday

Pound/dollar: DOWN at $1.2037 from $1.2178

Euro/pound: UP at 86.46 pence from 86.09 pence

Dollar/yen: DOWN at 135.19 yen from 135.72 yen

burs-rl/imm

Stocks choppy, dollar frothy

1 Jul 2022

Stock markets wobbled on Friday while the dollar shot higher against the euro and pound as investors fretted about interest rate hikes and a possible recession.

Both Paris and Frankfurt stocks ended the day with small gains despite news of record-high eurozone inflation that reinforced expectations of a European Central Bank interest rate hike later this month.

The EU’s Eurostat data agency said annual consumer price inflation in the 19 countries that use the euro soared to 8.6 percent in June, up from the prior record of 8.1 percent in May.

“Today’s figures bolster the European Central Bank’s intended decision to start raising interest rates at its next Governing Council meeting in July,” noted economist Pushpin Singh at research group CEBR.

The ECB stated last month that it will deliver its first interest rate hike in more than a decade in July to combat inflation. 

Eurostat added Friday that core inflation — stripping out volatile components like energy and food — slowed to 3.7 percent from 3.8 percent, helping equities to calm heading into the weekend pause.

Wall Street’s main indices were marginally lower in late morning trading, having bounced around since the opening bell.

– ‘Another big leg lower’ – 

Chris Beauchamp, chief market analyst at online trading platform IG, said there was little buying interest at the start of the second half of the year, even though the sharp drops suffered by stocks in the first half open up the possibility for gains.

New York’s S&P 500 index suffered its worst first-half performance since 1970.

“There is a growing unease about the summer, especially with a potentially very gloomy (second-quarter) earnings season nearly upon us,” he said in a note to clients. 

“It really does look like we have another big leg lower before this bear market is done,” added Beauchamp.

With the war in Ukraine showing no sign of ending — keeping energy costs elevated — there is an expectation that borrowing costs will continue to rise and send economies into recession.

Losses across world markets this week come after a rally last week fuelled by hopes that an economic slowdown or signs of recession would lead central banks to ease off their monetary tightening drive.

But comments from top finance chiefs, including Federal Reserve boss Jerome Powell, suggest they are willing to endure the pain of a contraction as long as they can rein in prices — which are rising at their fastest pace in 40 years on both sides of the Atlantic.

“Investors know that inflation is high and is likely to push higher,” City Index analyst Fiona Cincotta told AFP.

“Instead, the market’s obsession is turning from inflation to recession fears. Given the steep declines in stock prices this week, much of the bad news is priced in for now, until it starts again next week,” she added.

The dollar, a safe-haven currency, jumped one percent against the pound and the euro on rising expectations of a recession.

“The US dollar looks set to end the week stronger against most major currencies, nearing its strongest level since 2002 as ‘risky’ assets remained under pressure,” said economist James Reilly at Capital Economics.

The euro slid to a low of $1.0369 before rebounding back above the $1.04 level. The pound touched a low of $1.1979.

Oil rebounded on tight supplies despite persistent recession concerns.

– Key figures at around 1530 GMT –

New York – Dow: DOWN 0.3 percent at 30,693.52 points

EURO STOXX 50: DOWN 0.2 percent at 3,448.31

London – FTSE 100: FLAT at 7,168.65 (close) 

Frankfurt – DAX: UP 0.2 percent at 12,813.03 (close)

Paris – CAC 40: UP 0.1 percent at 5,931.06 (close)

Tokyo – Nikkei 225: DOWN 1.7 percent at 25,935.62 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,387.64 (close)

Hong Kong – Hang Seng Index: Closed for a holiday

Brent North Sea crude: UP 1.9 percent at $111.12 per barrel

West Texas Intermediate: UP 2.2 percent at $108.08 per barrel

Euro/dollar: DOWN at $1.0405 from $1.0484 Thursday

Pound/dollar: DOWN at $1.2037 from $1.2178

Euro/pound: UP at 86.46 pence from 86.09 pence

Dollar/yen: DOWN at 135.19 yen from 135.72 yen

burs-rl/imm

Stocks choppy, dollar frothy

1 Jul 2022

Stock markets wobbled on Friday while the dollar shot higher against the euro and pound as investors fretted about interest rate hikes and a possible recession.

Both Paris and Frankfurt stocks ended the day with small gains despite news of record-high eurozone inflation that reinforced expectations of a European Central Bank interest rate hike later this month.

The EU’s Eurostat data agency said annual consumer price inflation in the 19 countries that use the euro soared to 8.6 percent in June, up from the prior record of 8.1 percent in May.

“Today’s figures bolster the European Central Bank’s intended decision to start raising interest rates at its next Governing Council meeting in July,” noted economist Pushpin Singh at research group CEBR.

The ECB stated last month that it will deliver its first interest rate hike in more than a decade in July to combat inflation. 

Eurostat added Friday that core inflation — stripping out volatile components like energy and food — slowed to 3.7 percent from 3.8 percent, helping equities to calm heading into the weekend pause.

Wall Street’s main indices were marginally lower in late morning trading, having bounced around since the opening bell.

– ‘Another big leg lower’ – 

Chris Beauchamp, chief market analyst at online trading platform IG, said there was little buying interest at the start of the second half of the year, even though the sharp drops suffered by stocks in the first half open up the possibility for gains.

New York’s S&P 500 index suffered its worst first-half performance since 1970.

“There is a growing unease about the summer, especially with a potentially very gloomy (second-quarter) earnings season nearly upon us,” he said in a note to clients. 

“It really does look like we have another big leg lower before this bear market is done,” added Beauchamp.

With the war in Ukraine showing no sign of ending — keeping energy costs elevated — there is an expectation that borrowing costs will continue to rise and send economies into recession.

Losses across world markets this week come after a rally last week fuelled by hopes that an economic slowdown or signs of recession would lead central banks to ease off their monetary tightening drive.

But comments from top finance chiefs, including Federal Reserve boss Jerome Powell, suggest they are willing to endure the pain of a contraction as long as they can rein in prices — which are rising at their fastest pace in 40 years on both sides of the Atlantic.

“Investors know that inflation is high and is likely to push higher,” City Index analyst Fiona Cincotta told AFP.

“Instead, the market’s obsession is turning from inflation to recession fears. Given the steep declines in stock prices this week, much of the bad news is priced in for now, until it starts again next week,” she added.

The dollar, a safe-haven currency, jumped one percent against the pound and the euro on rising expectations of a recession.

“The US dollar looks set to end the week stronger against most major currencies, nearing its strongest level since 2002 as ‘risky’ assets remained under pressure,” said economist James Reilly at Capital Economics.

The euro slid to a low of $1.0369 before rebounding back above the $1.04 level. The pound touched a low of $1.1979.

Oil rebounded on tight supplies despite persistent recession concerns.

– Key figures at around 1530 GMT –

New York – Dow: DOWN 0.3 percent at 30,693.52 points

EURO STOXX 50: DOWN 0.2 percent at 3,448.31

London – FTSE 100: FLAT at 7,168.65 (close) 

Frankfurt – DAX: UP 0.2 percent at 12,813.03 (close)

Paris – CAC 40: UP 0.1 percent at 5,931.06 (close)

Tokyo – Nikkei 225: DOWN 1.7 percent at 25,935.62 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,387.64 (close)

Hong Kong – Hang Seng Index: Closed for a holiday

Brent North Sea crude: UP 1.9 percent at $111.12 per barrel

West Texas Intermediate: UP 2.2 percent at $108.08 per barrel

Euro/dollar: DOWN at $1.0405 from $1.0484 Thursday

Pound/dollar: DOWN at $1.2037 from $1.2178

Euro/pound: UP at 86.46 pence from 86.09 pence

Dollar/yen: DOWN at 135.19 yen from 135.72 yen

burs-rl/imm

Biles, Denzel Washington, Rapinoe among winners of top US honor

3 Jul 2022

Gymnastics star Simone Biles, actor Denzel Washington and the late tech visionary Steve Jobs have been named as recipients of America’s highest civilian honor, the White House said Friday.

President Joe Biden designated 17 Americans to receive the Presidential Medal of Freedom, three of them posthumous.

The White House said the medal recognizes “exemplary contributions to the prosperity, values, or security of the United States, world peace, or other significant societal, public or private endeavors.”

Among the recipients is Megan Rapinoe, the Olympic gold medalist soccer star, two-time Women’s World Cup champion and outspoken advocate on equality, race and LGBTQ issues.

Ahead of a ceremony on July 7, the White House said those honored had “overcome significant obstacles… and acted with bravery to drive change in their communities —  and across the world — while blazing trails for generations to come.”

One posthumous recipient this year is John McCain, a one-time Republican presidential nominee, long-time senator from Arizona, and Vietnam War veteran who won a Purple Heart.

Previous winners of the presidential medal include the basketball legend Kareem Abdul-Jabbar, Motown singer Diana Ross and the actor Robert De Niro.

S.Leone slashes 'zeros of shame' from banknotes

4 Jul 2022

Sierra Leone on Friday introduced a new family of banknotes, stripping three zeros off the leone, in a bid to restore confidence in the inflation-hit national currency.

The Bank of Sierra Leone announced the move last August, insisting the public’s purchasing power would not be affected by the change.

“We have removed three zeros from our banknotes but the money yesterday is the same value as today,” President Julius Maada Bio said at ceremonies at the central bank where the new bills were unveiled.

A note of 10 new leones is the equivalent of a note of 10,000 old leones, which changes hands for around 75 US cents.

Year-on-year inflation in the West African state was 24.87 percent in May, according to the national statistics agency.

Rising prices had driven the printing of banknotes, resulting in a mountain of paper money that is costly to sustain and unwieldly for the public.

Shoppers need huge quantities of banknotes for the simplest transactions, and unscrupulous bank tellers sometimes pilfer notes from sealed bundles of bills.

“We are removing the ‘zeros of shame’ to get the currency properly aligned,” Morlai Bangura, a central bank director, told AFP earlier in the week.

He said the bank had begun distributing the new paper notes to commercial banks last week.

On Friday, customers braving the rain queued at commercial banks to swap their old banknotes for new ones.

“The changing of our currency is necessary — we were used to carrying bags to the bank to withdraw our money, but not anymore,” Alice Frazer, 70, said after exchanging her notes at the Sierra Leone Commercial Bank, a state-owned bank in central Freetown.

The new banknotes have a similar design to the old ones but are smaller in size.

“Our current currency is too big to fit into a wallet and we spend too much money printing oversized banknotes,” Kelfala Murana Kallon, the central bank governor, told reporters last August as he announced the move.

The central bank declined to comment on the cost of the operation.

Sierra Leone’s eight million people live in one of the poorest nations in the world, ranking 182 out of 189 countries in the UN’s Human Development Index.

Its economy, heavily dependent on minerals, was devastated by a civil war that ran from 1991-2002 and left about 120,000 dead.

Efforts at rebuilding were set back by an Ebola epidemic in 2014-2016, a fall in world commodity prices and the coronavirus epidemic — all of which have disrupted trade and investment and hit exports.

Sierra Leoneans will be able to use both the old and new notes during a transition period until September 30. 

From October 1, the old currency will cease to be legal tender.

The public will be able to swap the old currency for the new one until November 15, Kallon said in a statement.

Trial of US basketball star Griner opens in Russia

2 Jul 2022

The trial of US basketball star Brittney Griner, detained in Russia since February, opened on Friday as tensions rage over Moscow’s offensive in Ukraine.

Griner, a two-time Olympic gold medallist and WNBA champion, faces up to 10 years in prison on charges of drug smuggling. 

Her case has become one of many sticking points in relations between the United States and Russia, with Washington saying the 31-year-old Griner has been “wrongfully detained” and putting its special envoy in charge of hostages on the case.

“The trial has started,” Polina Vdovtsova, the spokeswoman for the court in the town of Khimki outside Moscow, told reporters.

The proceedings were partially closed, with a limited media presence, which Vdovtsova said was “on the request of the defence, the request of Griner herself”.

The six-foot-nine (2.06 metres) star was brought into court in handcuffs. She wore a white T-shirt with an image of US music icon Jimi Hendrix.

Griner came to Russia in February to play club basketball during the US off-season — a common path for American stars seeking additional income. 

She was detained at a Moscow airport after she was found carrying vape cartridges with cannabis oil in her luggage — just days before Russian President Vladimir Putin defied US warnings and sent troops into Ukraine.

US authorities initially kept a low profile on the case, which was not made known to the general public until March 5, but has since upped the ante.

“The US embassy and the country cares very deeply about this case,” Elisabeth Rood, deputy chief to the US embassy in Moscow, told reporters outside the court. 

“She asked me to convey that she is in good spirits and she is keeping up faith.”

Griner’s lawyer Alexander Boikov said she had “no complaints about the conditions of her detention.”

He added that she is working out “in her cell and on walks”.

The WNBA has also said it is working to bring Griner home.

But Griner’s wife Cherelle told CNN that she feels not enough is being done, despite good intentions.

“I don’t think the maximum amount of effort is being done because again, the rhetoric and the actions don’t match,” she said in an interview, citing the example of a phone call the couple was meant to have that she says was botched by the US Embassy.

“It would have been in her best interest for her phone calls to have been answered. It would be in her best interest for her to be back on US soil. So until I see things like that, no.”

Cherelle Griner said she hoped to meet with President Joe Biden to “humanise” her wife and because he has the “power” to bring her home.

The next hearing will take place on July 7.

– Tough sentences –

Russian law is strict in such cases and other foreigners have recently been handed heavy sentences on drug-related charges.

Last month, a Moscow court sentenced a former US diplomat, Marc Fogel, to 14 years in prison for “large-scale” cannabis smuggling.

Russia and the United States regularly clash over the detention of each other’s citizens and sometimes exchange them in scenes reminiscent of the Cold War.

In April, former US Marine Trevor Reed, serving a nine-year sentence in Russia for violence, was exchanged for Russian pilot Konstantin Yaroshenko, imprisoned in the United States since 2010 for drug trafficking.

Other exchanges of this type could be the subject of possible talks, observers say.

Among the names most mentioned are Paul Whelan, an American sentenced to 16 years in prison for espionage, and the Russian arms trafficker Viktor Bout, nicknamed “The Merchant of Death”, who is serving a 25-year sentence in the United States.

In January 2020, Putin pardoned a young Israeli-American woman, Naama Issachar, imprisoned in Russia for “drug trafficking” after then-Israeli leader Benjamin Netanyahu met with him in Moscow and brought her home.

She was stopped in April 2019 during a transit at Moscow’s Sheremetyevo airport while flying between India and Israel via the Russian capital.

Authorities said they found nine grams of cannabis in her luggage.

After Griner’s hearing, US Secretary of State Antony Blinken tweeted: “We — and I personally — have no higher priority than bringing her and other wrongfully detained Americans, including Paul Whelan, home.

“We won’t stop working until they are reunited with their loved ones.”

GM reports lower Q2 sales as supply chain woes persist

1 Jul 2022

General Motors reported a 15 percent drop in US auto sales in the second quarter as supply chain woes continued to crimp inventories.

The Detroit giant said it is holding 95,000 partially built vehicles in need of components that it expects to deliver by the end of 2022.

For the quarter ending June 30, GM sold 582,401 autos, citing a strong performance for the pickup trucks, the Chevrolet Silverado and GMC Sierra, despite low inventories.

The automaker said “pent-up demand” drove sales growth in other vehicles, including the Chevrolet Camaro and Chevrolet Colorado. 

GM reaffirmed its full-year profit outlook, but its second-quarter net income range of between $1.6 billion and $1.9 billion lagged consensus estimates.

The auto industry has been plagued by supply chain woes over the last year, with a shortage of semiconductor chips especially impactful.

Cox Automotive has forecast a 19.3 percent drop in US auto sales for the second quarter.

“Even though economic conditions have worsened in the past months, the lack of supply is still the greatest headwind facing the auto industry today,” said Charlie Chesbrough, senior economist at Cox.

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