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Quest Means Business
Wall Street Anger at Biden Tax Hike Plans; U.S. Regulators Set to Rule on Johnson & Johnson Vaccine; I.E.A. Says We Need Real Change to Fight Environmental Issues; U.S. Adds Scores of Countries To "Do Not Travel" List; Maldives Offers Vaccinations To Visiting Tourists; Sources: Biden Seeks Tax Hike On Wealthiest Americans. Aired 3-4p ET
Aired April 23, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN BUSINESS HOST: An hour left of trading on the last day of the trading week and the Dow has almost recovered all those losses from
Thursday's big fall.
Look at the markets and you see, it opens down, but a strong rally, which we need to understand over the course of the program. I'll get to the
reasons why in just a moment.
You can see the market is now up three quarters of a percent back over 34,000. The market and the events of the day.
Wall Street is fighting back as fund managers are furious of Joe Biden's tax plan that's now leaking left, right and center.
Johnson & Johnson's COVID vaccine is poised to get a greenlight again from U.S. regulators.
And at this weekend's Oscars, facemasks won't be the hottest red-carpet accessory.
We are live in New York on Friday. It's the 23rd of April. I'm Richard Quest, and I mean business.
Good evening. We begin tonight as Wall Street fund managers have turned their noses up in disgust at Joe Biden's plan to raise taxes. President
Biden is being accused of sabotaging economic growth, and the fallout is only just beginning.
We told you last night about the plan to nearly double the capital gains tax for the wealthiest Americans, those earning more than a million dollars
a year. Now, cryptocurrencies have tumbled, and hedge fund managers are speaking out, as Republicans are already vowing to oppose the plan.
The rich cryptocurrency traders probably stand to lose under these proposals, and so crypto has lost more than $200 billion in value today.
For instance, Bitcoin fell below $50,000.00 for the first time, seeing a small recovery in the last hour or so. Ethereum, the other big crypto is
down 11 percent from yesterday's high.
Jeff Zeleny is in Washington. Nobody should have been surprised. Of course, the President made it clear. But as these -- the market rally that we are
seeing today is because the market is saying, Jeff, they don't believe he can get these proposals through.
JEFF ZELENY, CNN U.S. CHIEF NATIONAL AFFAIRS CORRESPONDENT: Richard, there's no question that this was not a surprise to anyone who is paying
attention to the Biden presidential campaign. And, you know, just his overall posture over the first nearly 100 days of his time in office. But
he is, you know, really putting the meat on those plans. We're going to hear it next week when he addresses a joint session of Congress, and he is
going to call for big tax increases and particularly on capital gains.
But the question here is, how will these negotiations play out? And you're absolutely correct. One of the reasons that Wall Street is perhaps not
quite as worried, they know that the plan is not going to end up, it's not going to be signed into law as proposed.
Yes, Republicans are standing in lockstep against all of these tax increases, of course, the audience that matters is the audience in the
middle, those centrist Democrats, Joe Manchin, senator from West Virginia, who we talk about so much, his view on this will be absolutely critical.
So, just as we've been talking about the proposals to raise corporate taxes to pay for infrastructure, those plans also are yet to be determined. Same
here with the raises proposed on capital gains taxes and others, but there's no question taxes will go up in some respect. The amount, of
course, is to be determined, but almost certainly not to end up like these proposals are beginning.
QUEST: Right. But how much political capital do you estimate the President is prepared to spend? Now bearing in mind he got through the stimulus and
that was a hefty push. There's infrastructure coming along. Is he prepared to spend political capital to get these tax cuts?
ZELENY: Richard, I think he is prepared to spend virtually all of his political capital and this is why. Time is short for the Biden presidency.
He realizes that this is the year to get big things done.
So we will see, you know, how many things get done, we'll see how big the things are that they, you know, will ultimately get done. But the reality
is, he is willing to spend it and what that means is, you know, keeping together those narrow Democratic majorities, both in the House and in the
So I think, he is willing to spend it. The question is, how much are some of these moderate centrist Democrats willing to swallow here and it is on
the backs of Joe Manchin, the Senator Kyrsten Sinema from Arizona, senators like that that will be key to all this.
ZELENY: We know by now watching the first three months of this presidency, the idea of bipartisanship getting Republicans to sign on to this, it's not
going to happen.
So it is those centrist Democrats here and in a very narrow majority here, the White House is not going to get everything at once, but I think he is -
- you know, he is going to go to the mat to get as much as he can.
QUEST: Jeff, have a good weekend, sir. Thank you, Jeff Zeleny in Washington.
Investors are fearing that the latest move on Pennsylvania Avenue could fundamentally change the rules of the game for Wall Street. So anyone
earning over a million dollars a year in investment income pays a maximum of 20 percent in taxes on that income. It has been that way for years that
there is a lower rate of capital gains than there is for income -- earned income.
If Mr. Biden plays his cards right in Congress, those gains could be taxed at the top rate for wages and salaries, that's 37 percent, and the
President wants to raise that to 39 percent.
Players on Wall Street aren't happy with the plan, Anthony Scaramucci says it could have deleterious effects on jobs creation. Tim Draper says it
might kill the golden goose that is America. And the initial reaction was arguably overblown when we saw yesterday, the President promised to raise
taxes for months during his time on the campaign trail.
So why was anybody surprised?
(BEGIN VIDEO CLIP)
JOE BIDEN (D), THEN CANDIDATE FOR PRESIDENT OF THE UNITED STATES: We need to go out and make it clear to the American people that we are going to --
we are going to raise taxes on the wealthy, we're going to reduce tax burdens on those who are not.
We have to start rewarding work, not just wealth.
I can pay for my whole healthcare plan by changing the way in which we deal with capital gains. People should pay their capital gains based with their
income taxes, and not at 20 percent.
(END VIDEO CLIP)
QUEST: Ben Axler is founder of Spruce Point Capital Management, always good to have you with us, sir, to give us the view.
Now, Wall Street knew this was coming that's why we saw the sharp falls. But today's recovery, because what -- you just don't think it's going to
BEN AXLER, CHIEF INVESTMENT OFFICER AND FOUNDER, SPRUCE POINT CAPITAL MANAGEMENT: Well, I think that's right. I mean, the market is discounting
that, you know, this is a starting point, right, but throughout a high number. It is a starting point for negotiation.
But most likely, you know, it'll be walked back. I give you know, the headline rate he threw out as a 50 percent chance of passing, but the
market is forward looking. The market is still looking at the easy ultra- accommodative, you know, Fed injecting liquidity into the market and stock prices are moving higher as a result.
QUEST: Is there a valid reason, in your view, in Wall Street's view for taxing capital gains at a lower rate than income? I mean, it has always
been that way for 70 years, it's a-cannot of the taxation system, the two rates of capital gains are a short and a long term? Would it be a big
change of that goes?
AXLER: I think it would. I mean, our view is that there's just too many taxes. You have taxes on wages, taxes on capital, you know, invest taxes on
sales, taxes upon death, taxes upon buying real estate. You know, lower taxes are generally a good thing.
The more you raise taxes, the less you're left with on an after-tax basis. And that means you have to take greater risks for seeking greater return to
meet hurdle rates. As an investor, I look at, you know, return on my capital. And if you raise my tax rate, I'm getting less a lower return on
There's also other negative side effects of raising tax rates. You're going to see an increase in more tax avoidance strategies, right? I mean, the
wealthy want to do one thing, they want to protect their hard-earned capital. And so they're going to spend more money seeking ways to reduce
So why don't keep taxes low? I think taxes low is the best way forward.
QUEST: Somebody has -- somebody and somehow has to pay for not only the last year, but also the infrastructure and the improvements. Now, I suspect
you would agree that it is in a fair society, the rich do pay more than others, I guess that's sort of a fundamental rule of the game, too.
But who do you think or how do you think the pandemic and the infrastructure should be paid?
AXLER: Well, you know, I think, you know, the Treasury needs to thank the Fed. The Fed has been as I said, ultra-accommodative, and, you know, not
just the wealthy, but even the middle class that owns some stocks have seen enormous capital gains in the past year just from following the Fed and
So, you know, you're already going to get enormous taxes paid on those capital gains. Why in addition to that, do we need to raise the tax rate as
I think that's not clear to me. So I think these things can be funded with existing resources and within the existing tax framework.
QUEST: Right, Ben, we're not going to let you go without getting some thoughts on the market and where we are as we get ready for an earnings
season. Now, we had -- with the one that went by, it was okay. It was okay, but as we look forward, until this latest bit of hiccup in the last in
week, the market was on a tear.
Is it because the view is the U.S. is going to recover so strongly by the - - during the second half of this year?
AXLER: Well, I think it's more than priced in, I think the multiples are rich. I think, look, a lot of companies have structurally changed their
business model through the pandemic. I mean, my business, for example, we've streamlined a lot of costs, taken out redundancies, in our overhead
taken out real estate costs. A lot of businesses continue to allow their workforce to work remotely.
So you know, those are savings down to the bottom line. And some of those will be structural changes for the long term, but we think the market is
more than fairly priced. We think investors should be playing defense.
You know, we focus on short selling, so we think it's important to have a focus hedge book and have some downside protection here. But we're not
extremely bullish on the market. We think investors need to be selective and need to play more defense than offense here in this part of the cycle.
QUEST: As we go through the cycle. We'll talk more about it. I'm grateful that you came to us this evening. Thank you, Ben, as always.
QUEST: The advisory group is soon expected to recommend whether the U.S. should resume use of Johnson & Johnson's COVID vaccine. The council has
been looking at a possible link between the vaccine and rare cases of blood clots, and experts telling us, the group is debating whether the vaccines
should come with a warning or be avoided by certain people, certain age groups, for example.
The expert says disallowing the vaccine is off the table. Our CNN medical correspondent, Elizabeth Cohen is with us.
At the end of the day, they are going to go along a similar line, maybe not exactly as the European Agency, aren't they? They're going to sort of say,
yes, continue. The benefits -- the European Agency said today, the benefits greatly outweigh the risks. The U.S. is going to say the same.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: It certainly does look that way, Richard. I mean, just now Johnson & Johnson, in this C.D.C.
advisory group meeting said, look, we agree to a label that says "Warning. These cases of blood clots suggest an increased risk" and that some of
these people have actually died.
Now it is possible, excuse me, that the U.S. unlike the Europeans could go on and say, hey, women under the age of 50, don't take this vaccine. We
don't know yet, because they are still meeting as we speak.
But let's take a look at these cases of blood clots because they've now been delineated more in this meeting. So eight million people in the United
States have taken the Johnson & Johnson vaccine, and 16 total cases of blood clots have been reported, 15 were in women, the average age was 37.
Most of them were under the age of 50 and there have been three deaths.
And here's sort of the basic options of what the C.D.C. could end up doing. First of all, let's be clear, the vaccine will continue to be used. No one
is going to take it out of distribution. There might be a warning about what I just discussed, but there could also be a restriction on who would
get the vaccine.
And Richard, I think the important point here is that once this does go back into distribution, reasonable people can make different decisions. One
person might say, you know what, I'm hearing about these cases, but I don't care. I've read the warning, I don't care. I want a one and done. I want
one shot. And that's it.
Other people might say, you know what, I don't like the fact that there have been any cases of these very, very rare blood clots. I don't like that
at all. I don't like the fact that Johnson & Johnson's vaccine, while, very effective is not as effective as Pfizer and Moderna. I'm going to take
Pfizer or Moderna.
In the United States, you can make that choice -- Richard.
QUEST: Elizabeth, the story in "The Times" this morning -- "The New York Times" this morning, some reporting from other parts of America, where
there is still a vaccine hesitancy. Now, it can be on a variety of you know, there's the not now group, there's the never group, and there's the
not yet group.
This J&J, once they start with J&J again, is your feeling that there will be a hesitancy in this country in a way that maybe you wouldn't get in
other nations to take it.
COHEN: Well, first of all, you know, most other nations, or at least many other nations have AstraZeneca, which has the same issue. So I don't think
this is something that is just specific to the U.S.
In the U.S., the vast majority of the vaccines have been -- or vaccinations rather have been Pfizer and Moderna. Do I think this whole discussion about
wow, it looks like you know, there might be a link between blood clots and the Johnson & Johnson vaccine, is that going to increase hesitancy? I'm
sure for some people, it will be.
The fact that the F.D.A. and the C.D.C. decided to take a beat, take 10 days and think about this, hopefully will give people some confidence. And
I think or at least I hope that people get it that this blood clot issue is not an issue for Pfizer and Moderna.
My feeling is, is that people who were vaccine hesitant before are going to be vaccine hesitant now. I don't think this creates sort of like a whole
new group of people who are vaccine hesitant.
COHEN: What the Kaiser Family Foundation polling has shown over and over again, as you said, there's a group of people who wouldn't get this
vaccine, no way no how or get any COVID vaccine in under no circumstances. And then there's a group that says, I want -- I want to wait and see what
happens to other people.
Hopefully, they will see that for the vast, vast, vast majority of people who take these vaccines, they are absolutely fine and they are protected
So hopefully science and logic will prevail and vaccine hesitant people will say, wait, if I get a shot, I don't have to worry so much about
getting COVID. Wouldn't that be amazing? Hopefully that's the realization they come to.
QUEST: Elizabeth, thank you. Have a good weekend, too.
As we continue, a top energy monitoring agency is showing some dire figures. Carbon emissions are rising by the highest amount in more than a
decade. It's a warning for the world.
And Hollywood is ready for its first Oscars of the pandemic. Cinemas are still struggling to reach the end of the awards season. In a moment.
QUEST: President Biden's message was clear on the second day of his climate conference. The economic case for addressing climate change is
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Today's final session is not about the threat of climate change poses. It's about the opportunity that
addressing climate change provides. It is an opportunity to create millions of good paying jobs around the world.
(END VIDEO CLIP)
QUEST: Mr. Biden stressed new opportunities for international cooperation and noted Russia's willingness to work with the U.S. on CO2 removal despite
differences on other issues.
Meanwhile, the International Energy Agency's Executive Director spoke at the Summit today and warned leaders that commitments alone are not enough.
It follows days after the group issued a dire warning of a post pandemic surge in carbon emissions.
Fatih Birol is with me now from Paris. Good to see you, sir. You said in your comments today. You said, "Getting to net zero emissions means
drastically cutting emissions from trucks, ships and planes. Also steel cement factories, chemical plants, farming and requires technologies that
are not readily available yet." This is not encouraging
FATIH BIROL, EXECUTIVE DIRECTOR, INTERNATIONAL ENERGY AGENCY: You are right, if we want to reach zero emissions, net zero emissions in 2050, we
have a Herculean task in front of us and we have basically two things to do.
In the short term, within the next 10 years or so, we use a renewable clean energy options at the maximum. What are those? Solar energy, wind, hydro
power, electric cars, nuclear energy. We know them, we use them, but we can increase their use. This is one.
But it is not enough to reach our targets. About 50 percent of this reduction to reach our targets need to come from technologies which are not
in the market yet, they are in the laboratories.
So for example, you just mentioned aviation -- jets. We don't have a simple solution for jets yet, or the iron steel, we are just starting. So we have
two jobs: to make the most out of the existing ones. And second, at the same time, innovate and develop new clean energy technologies that will be
in the market soon.
QUEST: Now the problem is, though, as your recent report, your energy review makes clear is that actually fossil fuel usage is going to be way up
again. I mean, the 2020 lapse is over, and not only that, coal demand is on the way up. I am not -- I mean, we're going two steps forward one step
backwards, or arguably even the other way around.
BIROL: I will say for the time being, the other way around, one step forwards, and two steps back because what we see that indeed, the Summit
you mentioned, there are excellent commitments from governments and it is very, very promising from Asia, from North America, Europe, Africa and
But there is a growing gap between the rhetoric and the data.
This year, when everybody talks about the drastic climate change seriously here, we see that the global emissions are increasing sharply. And second
largest increase in the history and this is mainly driven by coal and coal in Asia.
QUEST: If this is the case, then all the good hot words of the Summit that Biden has held the COP in Scotland that the British Prime Minister is going
to hold, we're all fooling ourselves that we can reach Paris targets and avoid the tipping point. We're just deluding ourselves.
BIROL: I wouldn't say we are fooling ourselves, but what I would say, we have to read the data carefully, what we do at the International Energy
Agency and accelerate our efforts if we are serious to reach our climate targets.
We need not only these targets, pledges, commitments, they are important, but at the same time credible energy policies, which are financed
immediately and in both terms, otherwise, the gap between the rhetoric and what is happening in the real life will be widening and widening.
QUEST: Sobering thoughts. I'm grateful you came on QUEST MEANS BUSINESS tonight, sir, to put it into perspective. Thank you. As always, Fatih,
always lovely to see you. Have a good weekend.
Now, as we look at this issue, one way the UAE is diversifying is through online banking. It's getting its first fully independent digital bank.
John Defterios has more in today's "Think Big."
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: What is the big idea? Is it to be a disruptor? Digital banking is new, it can challenge the
homegrown players that have been in traditional banking. How do you see your big idea?
MOHAMED ALABBAR, CHAIRMAN, ZAND: John, the big idea is that it's the first digital bank in the country. The big idea that it is the first digital bank
that looks after consumers and corporate at the same time.
But I believe the bigger idea that we who are the people behind the bank, we live a digital life, we have digital businesses. Having that state of
mind is the real big idea because you can think digitally.
DEFTERIOS: The United States and Europe, Asia, about 70 percent, 80 percent of the jobs are linked to small and medium sized enterprises. And I know
it's a priority in the UAE to foster this sector. What's going to be the role of Zand in that space, then?
ALABBAR: I guess in the UAE, you know, we really, we are late in helping small businesses. But this technology -- all the authentic partners, I have
to give them credit, they will make it so much easier, so much efficient, cheaper to provide services and funding and product for small businesses.
DEFTERIOS: So when we talk about neo banking, what's the huge advantage for the customer? The interface, of course, is one; but can you actually give
better prices to smaller businesses, personal loans, tech startups as a result of not having the legacy of the brick-and-mortar network?
ALABBAR: I mean, these systems of new digital banking, you know, no headquarters, not a lot of staff, no branches, no cars, it's free, simply,
you don't even know where the office is, it could be in a warehouse. Right?
So there's a great amount of saving that you will give back to the customer. AI is smarter than all of us combined. I can -- I can measure
your cash flow needs in the future and give them to you. I can measure your debt ability better than a human mind and give that to you, and that's
where the small guy will benefit more than anybody else and at the lower cost.
But then I can bring you all of our partners with me to provide you all of your other services so you will have your supermarket partners, you will
have your e-commerce partners, you will have your food delivery partners, because at the end of the day, you will pool resources, you pool data to
make sure that your life is complete and comfortable and you are still sitting in your pajamas.
QUEST: In a moment, the Soneva Resorts in the Maldives have had a simple philosophy, it is called "No News and No Shoes." The Chief Executive now
says business has never been better during the pandemic.
I'll cross that bridge with him after the break.
QUEST: More than 100 countries have been added to the do not travel list by the United States over the course of the week. It's simply 80 percent of
the world. And it includes the Maldives, which is somewhat surprising. Bearing in mind the tourism authorities have been offering vaccines to
overseas travelers, and the country has actually beat its own travel forecasts over the course of the year.
The Maldivian government is hoping to boost this numbers this year even further. And their latest trends are concerned, they should manage to do
it. The chief executive of Soneva who runs luxury resorts there says his business has never been better. They even had guests staying there
throughout the early days of the pandemic for several weeks at a time. I went to meet him at the resort during my trip for World of Wonder.
As you can see us crossing the bridge he told me, he didn't realize how quickly things would come back.
SONU SHIVDASANI, FOUNDER AND CEO, SONEVA: Business is touch a lot of wood is amazing. It's better than it's ever been. And at the moment, we're a
beneficiary of COVID. Last year, it was a different story. It was difficult, our high season, we're very seasonal, our principal season was
written off. We thank God we got Christmas and New Year but just after the New Year as you know, news started coming out about COVID.
It started spreading, we got more and more cancellations. And you ended up with the borders closed at the end of March just before the big -- the
other big holiday break, which is the Easter Holidays. So we completely missed that our borders were closed. We managed to salvage things by having
about 70 guests who stayed in house for about two to three months. So that at least allowed us to wash our face. But it was very difficult.
QUEST: So the borders open.
QUEST: We come through the first wave, we go to the second wave, the summer comes and goes in 2020. We get to September, October, November, which is
about the time when your high season starts again.
SHIVDASANI: Start again. That's right.
QUEST: Were you surprised that the phone started ringing? The metaphorical phone?
SHIVDASANI: It was -- we knew that things would recover. Because when you look at history, when you look at when one considers SARS, the recovery of
travel and tourism, this was mainly in Asia, it came back stronger than before in Asia if you -- if you look at the analysis. So we knew that after
a dampening, you'd have this pent up demand. And there wouldn't be that. What we didn't realize was how strong it would be.
We were taken aback by that. We tried our hardest, we create a strategy. I think with all crises. If you can address the crisis with a positive frame
of mind, I've been -- I'm 55, I started at 25, we opened here 25 years ago. So I've gone through many crises, as you can imagine building and remote
environments. And I've come to realize I love the phrase of Lao Tzu. Good fortune has its roots in disaster.
This idea that if you can look at a crisis and with a positive frame of mind, it can spring a lot of good roots of good fortune in the future. And
we realize that our advantage here was one island, one resort. To paraphrase the foreign minister, the Maldives is 1200 isolation centers.
QUEST: The upper end of the market in the Maldives, the five-star plus the end of the market, of which you are, is having a better year than previous
SHIVDASANI: That's right.
QUEST: They're taking 2019 as the chart.
SHIVDASANI: Yes. 2019. The last good year. There are some months where we're almost double, actually double in some months here at Soneva Fushi
compared with the same time last year because travelers certainly stopped or so reduced, the travelers reduce has been restricted. But in a way it's
being funneled to us because we're one island one resort, as I touched upon earlier, we're testing everyone.
So it's not just no news, no shoes, but it's also no masks. That's for our guests, is a huge luxury. The ability to see a way to smile, to be able to
hug someone or shake someone's hand. We've realized how important that's been when we talk to guests and interact with them.
QUEST: How aware are you though that if you take the industry overall, here in the Maldives, those hospitality -- those hotels, loader, haven't had
QUEST: Not seeing the bid. They may in the fullness of time that's more open up. That middle to lower end is not enjoying that same resurgence.
SHIVDASANI: Unfortunately, not. So when one considers January, the Maldives Inland Revenue, the Maldives government are very open. So they publish all
their revenues. Their revenue from the tourism industry was exactly the same as the previous year.
SHIVDASANI: But as you say, hotel arrivals, so arrivals of tourists was half. So half the number of tourists but the same revenues, which means
that the luxury resorts have been doing very well, but unfortunately, a lot of struggling. And that's because they are supported by tour operators. So
firstly, wealthy people have independent in mind, they have private jets, they're willing to take more risks.
It's their ability to see through things, calculate the risks and even take risks, those got them where they are. So they're willing to travel. The
ones who go to more commercial resorts, sometimes can't take risks. They can't even afford a challenge if their travel insurance doesn't work. I'm a
strong believer in all markets. What I would say is, luxury travel tends to have a better impact on the local community because wealthy people spend a
lot of money, the resorts want to create a sense of community.
They engage more with the community at the very mass market you do have situations like you had on the coast of Spain. They'd undermined the
quality of life for the local community. So all I would say is that luxury travel does engage more than local community and support it.
QUEST: And there you have it. So, it's quite extraordinary. You can see more from my trip to the Maldives on World of Wonder this weekend. It is at
6:30 in the morning London time on Saturday and across the weekend. Check your DVRs, it's on CNN island hopping in the Maldives.
Hollywood's Oscar nominees won't be seen rain mask at this weekend's award ceremony. The organizers say they'll only have to put them on during ad
breaks. It's a lot more relaxed than the rules inside most cinemas, where the films are shown as Clare Sebastian there reports. Cinemas are
struggling just to survive and manage to get through the award season.
CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT (voice-over): At Cinema Village in New York's West Village, they've been turning on the projectors
every few months, just to check they're working. Over the past year, owner Nick Nicolaou says he's exhausted his savings, burned through government
aid and risked a divorce to keep his three independent theaters from going under.
NICK NICOLAOU, OWNER, CINEMA VILLAGE: This past year has been a bad horror movie because one thing right after the other was going wrong. At one
point, we had to pay hundreds of thousands of dollars to the Department of Finance for property tax. So that cleaned us out.
SEBASTIAN (voice over): He can now open at limited capacity, according to New York rules, but first he has to repair the damage from frozen pipes
that burst, the result of the building sitting empty for so long.
(on camera): The posters are still up from the last movie they showed here in March of last year. Business came to a sudden stop and it's now been
more than a year with zero customers. And this is a story that's being repeated in movie theaters around the world.
(voice over): In 2020, the global box office fell by almost three quarters, according to Boxoffice Pro. Some theaters, including the iconic Cinerama
Dome in L.A. have now closed for good, and big chains like AMC Entertainment came close to bankruptcy.
Not the kind of climate up and coming director Sasie Sealy would have chosen to release her debut feature film, Lucky Grandma.
SASIE SEALY, DIRECTOR, LUCKY GRANDMA: We made the decision to do a virtual release in May versus a physical release in August, just because we had no
idea like what was going to be happening in August. Our red carpet was over Zoom, like Q&As with audiences were over Zoom. So it's just very surreal
thing where I'm like, did that really happen?
SEBASTIAN (voice over): Virtual releases, be it through independent theaters or on streaming services like Disney+ and HBO Max became
commonplace in 2020; the pandemic accelerating an ongoing power shift in the industry.
SEALY: Netflix makes more movies per year now than like, you know, Warner Brothers. I mean, the number of movies that they're financing is crazy. So
I mean, if you have a film that you want to get made, it's sort of like where you're going for financing I think is changing.
SEBASTIAN (voice over): For new filmmakers, Hollywood's future talent pipeline, the survival of both movie festivals and independent theaters,
where they traditionally got exposure, will be critical.
NICOLAOU: You will not be allowed to sit anywhere another patron within six feet.
SEBASTIAN (voice over): And despite strict new safety rules, Nick Nicolaou isn't giving up.
NICOLAOU: I've succeeded through many difficult times, and I will succeed again. That energy that's in a movie house, when you're watching and crying
and laughing together, these are the memories that should mean something to people.
SEBASTIAN (voice over): Clare Sebastian, CNN, New York.
QUEST: And that's QUEST MEANS BUSINESS for the moment. I will have a dash for the bell at the top of the hour.
QUEST: Coming up next. It is Connecting Africa. This is CNN.
ELENI GIOKOS, CNN CORRESPONDENT: Welcome back to Connecting Africa. Vodacom owns and operates over 22,000 of these space stations around the continent
but supporting this infrastructure is an intricate network of undersea cables, crisscrossing Europe and Africa. In 2010, MainOne entered the
market building its very first privately owned undersea cable that links West African countries. CEO and Founder Funke Opeke says she wanted to
bridge the digital divide.
FUNKE OPEKE, CEO AND FOUNDER, MAINONE: Good internet is essential for any economy, any society to thrive today. Education, healthcare, business.
GIOKOS: Undersea cables connect Africa to the internet and stretching from Portugal to West Africa. The main one cable has landings along the route
Dakar, Abidjan, Accra and Lagos. You entered the industry at a time where there was very little infrastructure and you had big dreams. I want you to
take me back to those years.
OPEKE: The biggest challenge was as a Greenfield company trying to raise $240 million to build this cable. No infrastructure of this magnitude
subsea by a Greenfield company had been deployed in West Africa. We also moved into building data centers. This is quadrant 80 for a closer look at
what actually is housed in this facility. These are banks of servers and routers and optical transport network equipment that basically are
processing transactions, delivering content and enable businesses, operate online or deliver services, streaming services or other kinds of content to
users all over the region.
GIOKOS (on camera): What kind of impact do you think you've had over the 13 years to connect businesses to consumers and connect businesses with each
OPEKE: When you look at Internet penetration in our region, it was hovering in the 10 percent range when we started today, it's 40 percent and growing.
So clearly, a lot more eyeballs on the internet. The big players are all here, the global tech giant want to be in Nigeria, Nigeria has the eighth
largest population in terms of number of eyeballs on the internet. But in terms of the business ecosystem, the availability of the infrastructure and
the services that we provide have been critical to grow in that ecosystem.
GIOKOS (voice-over): The pan-African Ecobank Group uses main ones high speed link to connect the two data centers in Lagos and Accra.
TOMISIN FASHINA, GROUP CEO, ECOBANK GROUP: I don't think you can underestimate the importance of that and the efficiency of that. Today I
can conveniently say that whatever happens in one country or the other, my databases are in sync across to physically distant data centers. That alone
enables me to offer services with confidence to my thriving 20 million plus customers across 34 countries.
VERA SONGWE, EXECUTIVE SECRETARY, UNITED NATIONS ECONOMIC COMMISSION: Well, we have seen during the COVID crisis that all businesses that had a digital
component to them have done much better than those that didn't. That is why we're also working with the telecommunications companies and our
governments to see what we can improve access, reduce cost and increase speed.
GIOKOS (voice-over): Africa's internet economy has the potential to reach $180 billion by 2025. According to an e-Conomy Africa 2020 report. But
Opeke believes that 4G access needs to grow to facilitate this.
OPEKE: The real challenges are in the terrestrial networks, base stations or the towers that are used for mobile access which is how most of the
population will continue to be served for the foreseeable future. So that - - that's where the investment and the work still lies in building that infrastructure.
GIOKOS (voice-over): Multinational telecommunications provider of Orange have recently announced the Djoliba project. It's the first cross border
broadband network in West Africa. On land more than 10,000 kilometers of terrestrial fiber optic network will span from Dakar in Senegal, to Accra
in Ghana. Then in Mali, Burkina Faso and Cote d'Ivoire. That will be complemented by similar-sized network of undersea cables. The fiber optic
backbone aims to seamlessly connect West Africa to Europe and South Africa.
(on camera): There's so many stories of global companies coming in. Do you think that's going to take away opportunities from rising African
OPEKE: Not really, it's mixed. For example, you mentioned Orange and they are actually sharing infrastructure on our submarine cable which is
integrated into the Djoliba terrestrial network that they're currently building across the West Africa region. So in that instance, it has been
collaborative and supplementary. And I think that's more of where I expect to see the innovation and the creation of value.
GIOKOS (voice-over): Up next, we explore how Africa's informal retail sector is becoming digitized.
GIOKOS: Telecommunications connects businesses around the continent and it also enables tech startups to find solutions to problems on the ground. Now
one tech startup in Nairobi Sokowatch is helping the informal sector connect to large pan-African manufacturers making them more agile and
(voice-over): Here in Nairobi, Kenya, a digital transformation is happening. Meet Mary Njoki Wambui. She's one of the millions of informal
traders who account for 80 percent of Sub-Saharan Africa's labor force and 55 percent of its GDP. And now, an e-commerce app Sokowatch is connecting
her local store with big suppliers.
MARY NJOKI WAMBUI, SMALL SHOP OWNER: With the Sokowatch app I managed to save the money for transferred time, some goods, little cheap, depending on
GIOKOS: (voice-over): In just a few clicks, she can restock shelves on the same day without having to pull down the shatters. The delivery is free of
charge. Hers is just one of 18,000 small businesses that uses soccer watch.
DANIEL YU, FOUNDER AND CEO, SOKOWATCH: I believe that we're doing a huge, huge transformation of this informal economy which if you look at the
African retail sector, actually over $800 billion of goods are sold through mom and pop stores across Africa every year. And so really -- I mean, this,
this is not, you know, some small part of the economy. This is actually the majority -- the significant majority over 80 percent of the retail economy
that flows to these small shops.
The reality right now that you have all of these middlemen, you have all of these critical issues around lack of access to financing, lack of access to
tools to manage and formalize one's business, I believe are really actually holding back the sector. And so, you know, for Sokowatch, I really see our
aim as being able to come in and provide these mom and pop stores, with the tools, with the technology, with the services to unlock their potential.
GIOKOS (voice-over): Those b2b connections aren't just good for the small guys. It's big data for the suppliers.
ANGELA NZIOKI, KENYA CEO, SOKOWATCH: Typically, most retailers in Africa really struggle when it comes to access to goods and services. So where
Sokowatch becomes really integral in that process is because we've taken the power of e-commerce and technology and really put this in the hands of
the retailers. And then we're also using the consumer data that we are gathering from the trade and feeding it up back to the manufacturers.
So if you think about that process, in an entirety, the manufacturers are getting access to consumer data that they lacked before.
GIOKOS (voice-over): It also offers lines of credit to the informal traders who wouldn't otherwise be able to get financing from traditional banks.
Tanzanian brand MeTL Group is one of the suppliers that is teamed up with Sokowatch. Chief executive and President Mohammed Dewji says it's
Mohammed Dewji, CEO AND PRESIDENT, METL GROUP: To be able to empower this informal trade which I think is a big business and for them to be able to
be competitive and for them to make money. I think, you know, you need to have innovative products, you need to come up with this credit structure,
you know, because there is no so called credit rating agency that can rate this people all across like in the Western world.
So you have to create your own system to create algorithms to be able to say that look, we can see the buying patterns and we can give so much
credit et cetera, et cetera to how to empower these people. So I think this is the future.
GIOKOS (voice-over): So much. So MeTL Group is developing its own version, Mo Soko. The firm Briter Bridges monitors the tech space in Africa. And it
says Sokowatch and other startups are creating corridors for b2b commerce to thrive. And Africa's continental free trade agreements will help drive
that even further.
DARIO GIULANI, DIRECTOR, BRITER BRIDGES: The disposable income of most populations across Africa has grown significantly, the GDP per capita is
growing across Africa. Infrastructure is growing, transaction costs are being lowered. More payment options are being put on the table which means
people don't have to carry cash in order to perform any transaction, but they can actually do it online.
GUILANI: And so all of this will, you know, will contribute to raising what we call a -- this tide, right? This economic tide that will empower
obviously consumer and by empowering consumer will ultimately trickle down into businesses.
GIOKOS (voice-over): Sokowatch and apps likers are part of the drive to formalize this massive and untapped sector.
QUEST: Hello, I'm Richard Quest. It's the dash to the closing bell which is just a couple of moments away. And stocks have bounce back from Thursday
sell off. The Dow is currently out more than 230 points. It's just about off the best of the day, but it's a strong three quarters of a percent. A
rough session for cryptocurrencies, the market there lost more than $200 billion in value after Bitcoin fell below 50,000 for the first time.
It's since rallied marginally as you can see from the screen. Ethereum at one point was down as much as 13 percent from its all-time high yesterday.
There is an irony in all of today's rally, investors are actually only buying because they're more confident that President Biden's tax plans to
raise taxes won't pass Congress. I spoke to Spruce Capitals Ben Axler earlier, who told me more taxes bring more harm to investors.
(BEGIN VIDEO CLIP)
BEN AXLER, CHIEF INVESTMENT OFFICER AND FOUNDER, SPRUCE POINT CAPITAL MANAGEMENT: -- there's just too many taxes. You have taxes on wages, taxes
on capital, you know, invest taxes on sales, taxes upon death, taxes upon buying real estate. You know, lower taxes are generally a good thing, the
more you raise taxes the left you're -- the less you're left with on an after-tax basis.
And that means you have to take greater risk for seeking greater return to meet, you know hurdle rates.
(END VIDEO CLIP)
QUEST: From top to bottom. Banks are at the top of the Dow. As you can see, with Goldman and JPMorgan, Intel is down after earnings disappointment last
night. The banks are the best. JPMorgan apologized for its role in funding European Super League, saying it clearly misjudged the fans' reaction. And
the triple stack shows the markets overall as we come to the end and the closing bell, all are up.
That's the dash to the bell. I'm Richard Quest. Whatever you're up to this weekend ahead I do hope it's profitable. I leave here with the closing bell
ringing and "THE LEAD" with Jake Tapper follows next. Around the world around the clock, this is CNN.