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Quest Means Business
Germany Announces Lockdown For The Unvaccinated; Omicron Case In The U.S. As Biden Unveils Winter Strategy; Wall Street Bounces Back After Two Days In The Red; Omicron Variant Tests Germany's Patience With The Unvaccinated; U.S., U.K. And E.U. To Help Developing Nations Phase Out Coal; OPEC+ To Boost Oil Supply Despite New Variant Threat; Safaricom Boosts Profits As Mobile Service Fees Return. Aired 3-4p ET
Aired December 02, 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 ANCHOR: B-doing, B-doing, B-doing -- the Dow going up and down, and the volatility continues today, as an hour to go to
trading, we have been as much as 700 points there. We're almost at the top of the day, two percent. The reason why and the events of the day become
The United States tightening up the entry rules for all international travelers. We'll give you the details as best we know them.
Germany is announcing national lockdowns for the unvaccinated.
And OPEC is undeterred, saying it will pump more oil next month even though the price has come off its highs.
What a busy day. Glad you're with us. We are live in New York. It's Thursday, December the 2nd. I'm Richard Quest, and today I most certainly
Good evening. Tonight, President Biden is tightening the entry rules for international air travelers as the United States reported second case of
the omicron variant. The President has laid out his strategy for COVID testing and vaccinations within the United States and is promising to send
more vaccines abroad.
He said the U.S. will face the new variant without lockdowns and from a position of readiness.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: We knew there would be cases of this -- of omicron here in the United States, and it is here. But
we have the best tools, the best vaccines in the world, and the best medicine and the best scientists in the world.
We're going to fight this variant with science and speed, not chaos and confusion, just like we beat back COVID-19 in the spring, a more powerful
variant, delta over in the summer and fall.
(END VIDEO CLIP)
QUEST: For now, the U.S. is keeping in place its travel restrictions on Southern Africa where omicron is now taking over. But it has updated its
rules for entry after reopening to international air travel a month ago.
So now, all international travelers will need a negative test result within a day of departing for the U.S., a pre-dep test one day before, that's down
from three days, and it applies vaccinated or not. Americans still don't need to be vaccinated to fly domestically or to arrive from international
locations, everyone else does. So it is Americans and green card holders to be precise and spouses, I think are in there as well.
And the mask mandate for air travel and public transport is extended now until mid-March of next year. Travel stocks, I call these the COVID lot.
The COVID 6 were up sharply because the clarity means at least people can move forward and of course, at least they weren't set backward.
So hotels are up. Interestingly, the cruise lines are up and airlines as well.
Kaitlan is with us. Good to have you as always from the White House. Now much telegraphed and much ballyhoo, but nonetheless, still extremely
significant. Let's look at the international new travel restrictions and the balancing act that there was within the administration.
KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes, of course, this is shortening that timeframe for those U.S. bound travelers. Before it was,
you had 72 hours to get a negative test result before you took off on your flight. Now, that has been shortened to one day. You've got 24 hours before
your flight takes off to get a negative test result.
Now, it doesn't matter what test it is. It doesn't have to be PCR or anything like that. It can be a rapid antigen test because the White House
essentially looked at this with the C.D.C. and realized it would be very difficult to make everyone get a PCR test in that timeframe in order to
board their flight.
So that's what's changing. I do think it's raised some questions about why that wasn't the policy previously. It's a policy that is based on this new
One thing that we should know the President did not mention today in his speech at N.I.H. is whether or not those travelers including fully
vaccinated Americans are going to have to retest when they get back to the United States. That was something they've been talking about saying
essentially that just because they tested before, they still needed to do so again, maybe a few days after they got back to the United States. That
is of course what we've seen with this omicron variant, that first person identified, Richard, in San Francisco.
They had been back for several days then felt symptoms then got tested several days, then felt symptoms then got tested several days later. So
that was not mentioned today. But it is something that the administration has been talking about behind the scenes.
QUEST: Of course, it is how you police it in terms of people -- do the people take the tests and those sorts of things.
Listen, very interesting, this new testing business domestically, and the idea that the Federal government essentially picking up on -- insurance
picking up the tab for testing.
Here in New York, I don't know about in D.C. -- here in New York, there are pop up tests. I won't give them the grand title of buildings, they are
tents, pop up tents everywhere. Who is paying for all this?
COLLINS: Well, so that's actually a really good question, because that is something the President talked about today saying this as a new rule, but
it is not going into effect yet. There are some caveats to this new campaign that he was talking about, because they don't even predict that
rule will be ready until mid-January. Of course, whether or not it faces some challenges from these private insurers, that remains to be seen.
It is not going to be retroactively applied to any test that you've bought, and taken home so far, though, you know, of course, private insurance does
pay if you go to like a doctor's office and get a PCR test right now, but they don't pay for the ones that you pick up from a convenience store.
And so now though, this process will be where you have to file a claim to get your money back for that $10.00 or $15.00 or $25.00 test even. And so
there has been some criticism over this, because I think you look at the fact that it is December of 2021 and testing is still an issue in this
country and you can't really go to a lot of places.
Maybe there are some pop ups in New York to go, but it has been pretty difficult for people to easily obtain a very cheap rapid test, in other
nations, they're free, or they cost $1.00 or they're provided by the government. This is a different way around it, but it is the White House
trying to take this effort to get more rapid antigen tests into the system.
QUEST: Oh, we're going to talk about that in a second. Thank you, Kaitlan, Kaitlan Collins at the White House.
The measures for the United States -- now, I know many of you are planning to visit the United States over the Christmas period, and maybe coming --
all you Americans are coming back. So these are the questions that my boss e-mailed me just a short while ago since family is traveling.
How will the new rules work? First of all, is it feasible? Yes, it's absolutely feasible as long as it's an antigen rapid test required. In all
the places I've visited around the world and I've been to more than most in the last year, you can get a quick test back, and I'm pretty certain that
in those various places, there will be a facility either at the airport that will facilitate exactly at least 24 hours. So yes, totally feasible.
How will results be guaranteed back in time, that, you're on your own there? They'll say they are back in time, what happens if the results
aren't back? The airlines will be pretty understanding. It's a capacity question. Will they let you fly again on the same ticket if the same fare
code isn't available? My understanding of most of the airlines is they are not going to leave you stranded, particularly if you're there with three
kids all of whom are screaming.
And what happens if you test positive? You're going to have to stay where you are. You're going to have to quarantine. If you're staying in a hotel
that's already fully booked for New Year's Eve. That could be a problem.
Who will pick up the cost of that? That's another problem, which is why I would strongly suggest COVID travel insurance. And if you've got travel
insurance, check that it does have the $50,000.00 COVID treatment or emergency medical treatment.
Does that answer your question now? Thank you.
Alongside new travel rules, as we discussed, the President is promising Americans free rapid at home tests through medical insurance and local
clinics. The economist, Paul Romer, has been calling for more testing since the pandemic started.
Listen to what you told Jake Tapper back in April of last year when things were getting going.
(BEGIN VIDEO CLIP)
PAUL ROMER, PROFESSOR OF ECONOMICS, NEW YORK UNIVERSITY: If we were testing everybody every 14 days at $10.00 a test that would come in under
$100 billion a year, and I think that would be a good investment for us to make, to just give everyone confidence that we are on top of this pandemic,
we can stay on top of it, that there's a plan that will work.
It will not require a return to lockdown, and it will prepare us for the next version of a pandemic that comes down the pike.
(END VIDEO CLIP)
QUEST: The Professor is with me now. Good to see you, sir. This is another case of where you told us and we didn't really listen.
Now, some countries did. Denmark, for example. Massive testing in the streets. But remind us again, why it helps? I mean, even if you don't have
a very good tracing mechanism. Why does it help if you test, test, test?
ROMER: Yes. The most important thing to consider is to look at this number they call R, the reproduction number. If you've got 100,000 people who are
infected this week, how many people will be infected next week? If it is less than 100,000, R is less than one. The numbers are going down from one
week to the next. If it is more than 100,000, then we're in this terrible zone of exponential growth. The numbers just escalate very rapidly.
Now, the things that influence our high count is really a measure, if I'm infected, how many people do I infect, who are like following on carrying
my infection? If there are more people who are vaccinated, that reduces the number I'm likely to infect. But if the protection of that vaccination is
wearing off, that tends to increase it again. This is the problem we're facing with the vaccines. It's why the intelligent people who've looked at
this and said, we've got to have the boosters.
So now the other thing is, these new variants -- these new variants spread faster. So that is increasing the number that any one of us is likely to
infect, and this is then where testing comes in.
If I get a test result, I find I'm infected early in the course of my disease, I can isolate myself and reduce the number of people like I
infect. I can also go get treatment, which is available now.
So the testing is not important for keeping people out, they are already in and it's too late for that. What testing does is it reduces on average the
number of people each person infects, and that will put us on the path towards having this go away.
QUEST: Paul, the different countries are doing it different ways. Now, the U.K. basically handed out free kits on the street, seven kits at a time.
People would send a note saying you're coming for dinner tomorrow night, please test before you come up.
Here, look, I'm not saying you can't get the test in the United States, but it is more cumbersome. They do want insurance details or there's another
whole rigmarole. Does the U.S. basically need to go to a free testing mechanism for all and sundry everywhere?
ROMER: I think that we absolutely have to, and I've been confident for you know, more than a year that we will eventually do the right thing and do
this. It's been a slow process, I have to say.
The way I describe it is that if we get a region where we start to see infections growing, that R number is bigger than one, we should carpet bomb
that region with these tests, give them away for free at gas stations, grocery stores, drugstores, you know, drop them from helicopters, I don't
care, but get people to take the test.
Because if people are curious to know if they're infected, and if they find out they're infected, they will tend to isolate themselves because they
don't want to infect the people around them.
QUEST: Do you think -- and this is a sort of a philosophical/capitalist question in a sense? Do you think that because the U.S. health system is a
provider pay or an insurance pay that the commercialization of the testing mechanism has gotten in the way of what should be a healthcare system?
ROMER: Boy, did you hit the bullseye with that question. I think this is at the core of the problems we are facing in the United States. We've got a
system that relies way too much on prices and market signals and that creates the lobbying pressures.
There are two firms, LabCorp and Quest that get $100.00 per test every time you go to a doctor and get tested or go to a hospital, and those companies
share that revenue back with the hospitals. I don't know if they share it with the doctors, but they really want to keep that golden goose going, and
when they hear me say, let's give away tests for free to everybody, they hate that idea.
So it's not just that our system is sort of hard, it's unresponsive, there are very active political pressures and lobbying going on to keep us from
doing the smart thing, which is give these tests away for free.
QUEST: Let's go to the economics. The reality is that we had a tremendous bounce back last year, but that was to be expected. You had a lockdown, you
had a recovery and opening up. But we're now in a much more difficult economic environment in a sense, a sludge, a trudge. High inflation,
arguably tightening of interest rates, growth will slow and this unknown.
What should I keep my eye on?
ROMER: Yes. So look, we are well below where we were in 2019 in terms of employment. If you look at adults, so forget about, you know, young people,
this is over age 24, less than age 55. If you look within adults, the fraction who have a job is about two percent lower than it was just before
the pandemic hits still, so two percent, our whole workforce is about 150 million people.
Two percent means that, you know, we're talking about like three million people without jobs. So, we're a long way away from recovering, and I think
this is because our stimulus measures were focused on giving people money they could spend, which has had a predictable effect on prices. We should
have been focused on keeping people employed and making sure people had a chance to work.
So going forward, I hope we can target any more stimulus we do on things that get people back to work, and if we have to raise interest rates to
keep inflation in check, we should still be doing the fiscal measures that are focused on getting people back to work. If we have to, we should
subsidize the wages for low wage workers, make work more attractive, get them back on the job.
QUEST: Which, of course, is exactly what most of the European countries did, as part of their COVID employment policies.
ROMER: And by the way, if you look at this number, the employment to population ratio for adults, they're doing much better than we have. So we
spent a lot more on stimulus, and we haven't done nearly as well, because we didn't target it at the right issue.
QUEST: Paul -- Professor, I should say, good to see you, sir. And we will talk more about it. Thank you, sir.
Germany is banning unvaccinated people from most public places. It's a strict new measure, as the idea of mandatory vaccines gains traction in
Europe, and you're hearing from the top economic thinkers. Billionaire Ray Dalio tells me about his six stages to the New World Order. We must work
together to heal our economic and political divides.
QUEST MEANS BUSINESS.
QUEST: Welcome back. Wall Street is up solidly as the omicron volatility is taking its toll on the market and the omicron volatility continues. The
Dow has gained more than 600 points. It's still off more than a thousand since last Wednesday. All the major averages are in the green with the
Oil is up, too. Well off its recent highs of more than $80.00 a barrel. OPEC+ is sticking to its plans to raise output next month by 400,000
barrels a day.
Paul La Monica is with me. Paul, is today just a bounce back or that sentiment change? I am highly suspicious.
PAUL LA MONICA, CNN BUSINESS REPORTER: I think that the big problem right now, Richard, facing Wall Street and you've heard this before, none of us
are epidemiologists and I think we are all struggling and grappling with how serious is the variant? And what is that going to mean for economic
activity heading into the Holidays and in 2022? It is definitely refreshing that we have this big rebound today, especially when you look at travel
stocks leading the way. Some of the biggest gainers in the S&P 500 are the airlines, the cruise stocks, the hotels, and casinos.
As of right now, there is a bet that consumers are going to continue to resume their normal daily lives. But I think we're still wondering just how
bad could things potentially get, but obviously, vaccines are here and that is a big mitigating factor to potentially diminish any negative impact on
QUEST: I'm looking at the Dow and as you're looking at the airline and the -- what I call the COVID 6. I don't know why. It's hard to know, in a
sense, I suppose an element of certainty, Paul, because we know that -- well, for example, we know that there's not going to be a quarantine
requirement for coming into the United States. We know that there is no worse restrictions elsewhere.
So that gives us certain -- and there's no -- there is going to be no vaccine mandate requirement for domestic travel in America.
LA MONICA: Yes, I think these are all very good points. And we also have to remember, Richard, that of course, the picture for the markets and
economy right now is not just about the omicron variant and what is happening with COVID-19. We have a big jobs report coming tomorrow. If wage
growth continues to accelerate, you're going to have those inflation alarm bells start sounding again and we all saw just the last -- just a few days
ago how Jerome Powell brought the market down because he said that, you know, they're no longer talking about inflation being transitory, tapering
could happen more quickly than the market thought and if tapering happens more quickly, that means rate hikes might happen more rapidly as well.
So keep in mind that this is not just a COVID-19 story. This is also about what the Fed is planning to do in response to inflation and the economy
that has rebounded pretty sharply from those COVID lows of 2020.
QUEST: Good to see you, Paul La Monica. I thank you, sir.
The legendary investor, Ray Dalio, says the world is in a dire stage marred by financial conditions and conflict. And in this, humanity is now being
tested to see whether we can put our differences aside and avoid catastrophe.
His new book is called "The Changing World Order," and it Danny's identifies six historical stages that repeat themselves. We're in Stage 5,
he says, and we must avoid Stage 6.
RAY DALIO, COFOUNDER, BRIDGEWATER ASSOCIATES: There is an arc, when times are bad, when there's economic stress, and if you throw in a pandemic or
something like that, the main thing I'm trying to convey in the book of these cause-effect relationships, because you could see the same story
playing out all these times.
QUEST: So where are we on that arc now?
DALIO: We're at a stage where financially we are spending a lot more money than we are earning and we are producing that with debt that is monetized.
So, we're in Stage 5. And so Stage 5 also, we're having great internal conflict. Okay? And with that, then there's the external conflict.
That stage in there is a test of whether we can rise above ourselves. This is not a destiny. This is something that can be handled. But the real
questions are, can we get financially strong? It is a test of us.
Can we get financially strong? And can we work together?
Well, for example, the political system, which is going to more and more polarity, and in a no lose winner take all type of thing, can we work
through that and work well together? And if you don't, you go to Stage 6?
QUEST: That doesn't sound good.
DALIO: No, it isn't. It isn't good.
QUEST: Stage 6 is?
DALIO: Stage 6 is some form of Civil War. We could talk about what it looks like.
QUEST: But do you believe that -- when you say worst, in your view, we're at Stage 5. Do you believe that we are able to solve those problems, thus
avoiding Stage 6? Are you optimistic or pessimistic?
DALIO: I have a principle. If you worry, you don't have to worry; and if you don't worry, you need to worry. And I think if there's enough looking
at this book and understanding the patterns and understanding cause-effect relationships, there might be enough worry to prevent the sort of movement
to Stage 6, which is where we don't want to go.
QUEST: Of all the periods that you studied, which do you think is the most similar, or arguably the most dissimilar, but we should really be careful
DALIO: I think the period -- the most recent similar period was the period between the 1930 to 1945 period. But there are many periods like that.
The cycle begins when you -- there are things at odds you have a war. You have an internal war, Civil War, or you have an external war, and then you
begin a new order. So, we began a New World Order in 1945. But you had a war before that.
That war was caused in the '20s. There were large wealth gaps, indebtedness -- over indebtedness, printing of money -- the same sort of thing.
QUEST: What's your conclusion for those who don't want to plow through it?
DALIO: The conclusion is that there really only three things that matter most. First, these are fundamentals. Are you earning more than you are
spending? Individually and a nation. So your finances are good, because those who can withstand the challenges have good finances.
The second, are you behaving well with each other so that you can deal with the problems together? Or are you causing problems because of the conflict?
And so -- and then third, is there an external threat? And throughout history, if you have those three things, then you're good.
QUEST: Can that test be applied on an individual basis?
DALIO: Yes, because a country is nothing more than the aggregate of the individual's, right? So we look at a country, but we think of that as the
country is doing it, but the truth is each individual, each company, each entity does this and applies on an individual basis.
Individually, if you earn more than you spend, so you have a good income statement and balance sheet, you can withstand more than if you don't,
okay? If you behave well with each other, work well with each other, common goals, you'll be better.
And so don't -- and then don't get into fights with the foreigners, get into competitions that are healthy.
QUEST: Absolutely energizing. Ray Dalio listening to him speak about his book. It's a tough read in the sense of, it's a dense read. But as with all
of Dalio's books, it is certainly worth the effort. The profitability that follows in terms of, you know, what you learn is most definitely worth it
for the effort. "Why nations succeed and fail," "The Changing World Order" by Ray Dalio.
The head of the European Commission says it's time to think about mandatory vaccines and that could be coming in Germany as it deals with its worst
COVID outbreak yet.
Be right back.
QUEST: I'm Richard Quest and obviously there's a lot more QUEST MEANS BUSINESS as you and I continue our evening conversation on business and
Germany is announcing a nationwide lockdown for the unvaccinated and mandatory jabs get ever closer.
The chief executive of Africa's second largest company, Safaricom, tells me how Omicron could upend its continent's post pandemic recovery.
QUEST (voice-over): Turkey is replacing its finance minister for the third time this year. Former business man Nureddin Nebati is taking over from
Lutfi Elvan, who resigned. It follows weeks of economic turmoil, rising inflation and the lira's depreciation.
The Duchess of Sussex, Meghan Markle, is calling for a reshaping of the tabloid industry. It follows her winning the latest court battle with the
publisher of the British paper, "The Mail on Sunday." Markle sued over its publication of a letter that she sent to her father.
The head of the Women's Tennis Association is defending the decision to suspend all tourists in China. He's doing so over doubts that China's start
Peng Shuai is free, safe and not subject to censorship, coercion and intimidation.
Steve Simon told CNN he's prepared to deal with the consequences of his decision.
(BEGIN VIDEO CLIP)
STEVE SIMON, WOMEN'S TENNIS ASSOCIATION: It is a complicated pathway that we've embarked upon but we are resolute in our position on this and we're
willing to deal with the challenges that will come forth as a result.
(END VIDEO CLIP)
QUEST: Germany is taking drastic measures, new measures to combat the surge of virus cases, because the CDC in Europe says Omicron could be
responsible for over half of new cases in a few months' time.
Germany's outgoing chancellor, Angela Merkel announcing a nationwide lockdown for unvaccinated people and a vaccine mandate from the new
government is possible in the coming months.
(BEGIN VIDEO CLIP)
ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): Mandatory vaccinations will be discussed and voted on in the German Bundestag. And
the government and states will ask the ethics counsel to work out a recommendation by year's end. Mandatory vaccinations could then be approved
in parliament and become effective around February 2022.
(END VIDEO CLIP)
QUEST: Note that date; her words make it clear, Europe is moving closer to mandating vaccines for all. Greece already requires everyone older than 60
to get the shot and will fine people who refuse.
And the E.U. Commission president says all member states should consider a vaccine mandate.
(BEGIN VIDEO CLIP)
URSULA VAN DER LEYEN, PRESIDENT, EUROPEAN COMMISSION: I think it is understandable and appropriate to lead this discussion now, how we can
encourage and potentially think about mandatory vaccination within the European Union.
This needs discussion. This needs a common approach. But it is a discussion that I think has to be led.
(END VIDEO CLIP)
QUEST: Austria, of course, has one in place, it comes into force in February of next year. CNN's Fred Pleitgen is live in Berlin.
Reading between the lines, the realpolitik of this, they're dancing around it. They're softening up the electorate. They intend mandates.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think that could very well be the case, Richard, and I think you are absolutely right.
I think they are certainly trying to soften things up.
And one of the things we're hearing in Germany today is there are a lot of critics of the government, of Angela Merkel but, of course, of the incoming
government of Olaf Scholz as well, because he is the finance manager of her current cabinet.
This government has said there will be no vaccination mandates. And now, certainly things look like a completely different tune now that another
government will take over. And the way Germany is trying to soften that blow is saying, look, it is still a couple months down the line, if it is
going to happen.
But the government itself saying we are not going to do this, we'll have the German parliament vote on this in a vote of conscience and they also
say the German parliament's ethics committee needs to debate it first.
So I think they do realize it's a hot-button issue and a difficult one and it certainly is one where people say this is a pretty big infringement of
rights, despite the fact that, right now the country is in a pandemic. They do understand it's a big, big step.
And I think you're absolutely right, Richard, I think they're trying to soften that blow and there are some who believe, you know, they are
planning this for February, hoping it won't have to come to that, Richard.
QUEST: Fred Pleitgen, in Berlin, thank you, we'll watch on.
European markets all lower, the worst losses in Paris and Frankfurt, down more than 1 percent. AXA's chief economist said it could take weeks for us
to see how Omicron will change the policy conversation. Thomas Buberl is the chief executive of AXA, with me now in New York.
Your chief economist says it could take weeks for the policy conversation to become clear.
But if you're running an insurance company, how is the current COVID situation affecting you?
THOMAS BUBERL, CEO, AXA: It affects us all, because we thought that we were more or less in control, having a great vaccine distribution. And we
see that we are now back in a situation that even requires lockdown in some areas.
And this is very much linked to the overall confidence and trust that populations have in the management of COVID-19. So this obviously then goes
very much toward how the business climate is. And having a couple of weeks of unclarity (sic) and means that confidence will shrink.
And this is bad for the business climate. In an insurance business, this also offers opportunities, because COVID is a risk for all companies. We
are there to help our customers, to reduce risk and better manage risk, so we see both sides of COVID in our business.
QUEST: And in that sense, the mandate, the potential for mandates in Europe, don't worry -- I understand the difficulties, you know, the ethics,
the whole thing like that but from a business point of view it makes perfect sense and from an insurance point of view in terms of risk, if
mandates are introduced, that would be beneficial.
BUBERL: Yes, look, I mean we've seen in Europe two different types of countries. One type of country, that is more the south of Europe, France,
Italy, Spain, Portugal, that have been extremely disciplined and where cases are not skyrocketing and also where vaccination rates have been much
And then you see the north, where the situation at the moment is not under control. So instilling more discipline and making things more of an
obligation is the next step to go after we have failed to do it on a voluntary basis.
QUEST: The climate change -- all right, COP's over, COP26, they've all gone home, we've got net zero by 2050, everybody says that.
But from an insurance company's point of view, what are you insuring against?
BUBERL: So climate change for us is an extremely important issue, because we see it on the investment side in the question of where do we invest in.
And see it also on the insurance side, be it that we are exposed to national catastrophes, be it that we see the health effects of climate
So for us, we see both sides. And what is important as an insurance company, being an actor in society, is to make sure that we are playing our
role. And we started very early on, with the divestment from coal and, today, we are very much, on underwriting and investment, being extremely
strict, focusing on the transition of climate.
QUEST: And that transition, OK, how much of your investment strategy is --
-- when I say toward green tech, it's a jargon phrase, but you know what I mean in the sense of, are you prepared to invest in the potential of these
green tech companies?
BUBERL: Yes, we have to, if you want to be serious. We have to do three things.
We have to, one, get out of the industrial sectors that are clearly not willing to transition.
We have to, secondly, make sure that we are helping the companies that want to transition and have a clear transition plan.
And we need to invest into new technologies that enable to replace what is not being invested in anymore. So you have to play on all fronts, not only
from the investment perspective but also from the underwriting or risk perspective.
And therefore we sit just recharging and retooling and refocusing. New investment is not enough. We therefore founded the Net Zero Insurance
Alliance, which brings together all the major commercial insurers, to make sure that we are applying the same principles of sustainable underwriting,
also on the risk side.
QUEST: Thank you, sir, safe journey back to Europe when you return. I appreciate your time tonight. Thank you.
The Omicron variant has taken the edge off rising oil prices, understandably so. OPEC still sticking with the plan to increase supply,
despite the uncertainty. More, after the break. QUEST MEANS BUSINESS.
QUEST: OPEC+, which is OPEC and its allies, say they will increase oil production next month while keeping an eye on how Omicron is affecting
demand. Oil is up slightly throughout but bear in mind what we've seen over the recent few weeks. It's down 27 percent from highs back to what it was
You see the high in September in the 80s, then a sharp fall back a couple of weeks ago. The underlying reasons, let's talk about it, with Helima
Croft, the managing director and global head of commodity, strategy at RBC.
So what's going on?
What presaged that fall and where are bouncing now?
HELIMA CROFT, MANAGING DIRECTOR AND GLOBAL HEAD OF COMMODITY AND STRATEGY, RBC: Well, I think the key thing that led to the fall was renewed concerns
about COVID, we had a lockdown in Austria but we also have it combined with this new SBR (ph) release and a coordinated stockpile (ph) release with key
So the day this release was announced last week, we didn't get a lot of movement. But again, it comes in the context of renewed concerns about
COVID and now the market is having to think about potentially having all this new oil coming on the market when we don't know the demand impact of
this new COVID variant.
QUEST: We also have a currency thing going on as well to some extent. If you look at the dollar back at the beginning of the year, it's 83 to the
euro, now back up to 88. There's not a direct correlation per se.
But the pricing, I guess what I'm saying here is --
QUEST: -- Sorry?
CROFT: Absolutely. There's always this discussion about oil, its price to sellers and so currency does impact how oil is traded. But I do think the
bigger story we're seeing with oil right now is the question about, what is the demand outlook going to be?
And again, this COVID story has really been with us for the past month and when we focus on the new variant now, but we have had concerns about this
new wave in Europe, we have the lockdown in Austria, concerned about lockdown restrictions in places like Germany. So it has been hanging over
the market for November.
QUEST: Right, and the price of oil as an inflationary tool, in a sense, it moves very fast through the economic cycle. So at what point, what is the
price that OPEC can live with, that the rest of us can all live with, without being inflationary or, indeed, creating too much demand?
What price per barrel do you look at?
CROFT: I mean, that is always a really tough question because, you know, at a certain point, you know, what market matters the most?
Certainly, for President Biden, there was a real concern, when we had this run-up of prices about what it would mean for U.S. consumers and what it
would mean for his midterm prospects.
I mean people were attributing part of the results we saw in the Virginia election and the New Jersey elections to consumer discontent over rising
gasoline prices. So I certainly think President Biden wants to keep prices below $80. So this selloff is really in the range the White House is
Now of course, lower the better but this is not necessarily the range obviously that OPEC wants.
QUEST: I'm looking at U.S. oil production, because before COVID, the U.S. had rapidly turned into the swing producer, de facto swing producer, by its
ability -- through the nontraditional methods.
Where do you see it now?
CROFT: U.S. production is certainly off the 13.5 million (ph) barrel high. It's basically down 2 million barrels. We would expect to see more U.S.
production coming back because of the rise in prices this year.
But it's always important to understand the U.S. does not sit on spare capacity. It's countries like Saudi Arabia that sit on spare capacity. So
when you do need additional barrels brought to the market quickly, only Saudi Arabia and the small number of Gulf producers can deliver those
barrels. They are the central bank for oil.
QUEST: Of course, the U.S. comes on afterwards and messes up the equations when finally --
CROFT: They spoil the party.
QUEST: -- they spoil the party. When they finally drill in the Midwest, it's too late.
Good to see you. I appreciate it. Thank you.
Brand new users and millions of dollars in profits, Safaricom's CEO about its mobile banking service that is thriving.
QUEST: Rising profits says Safaricom while pointing to a recovery in Kenya's economy. Safaricom Africa's second biggest company by market value
and 12 percent from March to September before Omicron.
Its customer base is also green, means taking charges on its mobile payment platform M-Pesa. Regular viewers, you all know we love M-Pesa on this
program. M-Pesa is used to deposit, withdraw, transfer money, pay for goods. It's extraordinary access and a savings through the mobile device.
Peter Ndegwa is the chief executive of Safaricom and is joining us from Nairobi.
We like M-Pesa and the way it's clearly years ahead of the rest of us.
Look, the Omicron variant, the COVID-19 deteriorating situation in Africa, how is it affecting you?
PETER NDEGWA, CEO, SAFARICOM: Thank you, Richard, for having me and great to be back on the show.
I think, I would say that Kenya has managed the COVID variant fairly well in terms of prevention. And so had the rest of African countries. But as
you know, it has affected more the economic side, not just the health side.
I know the Omicron variant is coming through. The key is, the vaccination process needs to accelerate. We are slightly behind. The economy has been
opened and we are starting to see a recovery. So we don't want to go back to lockdown so the key is to accelerate vaccination.
QUEST: You talk about -- and we hear in Europe of, I mean, essentially it's going to be mandatory vaccinations. There is a lot of vaccine
hesitancy in parts of Africa.
Can you see mandating vaccines as being a way forward?
NDEGWA: So Richard, you are right. There is a bit of hesitation in terms of vaccination. But the alternative is to close the economy. So the
government in Kenya and across the region are starting to become a lot more formal in terms of them asking for the residents of the country to
And so my own view is we should encourage significant vaccination. We will participate in supporting the ministry of health. We have vaccinated the
majority of our employee base and we should do that for most of the rest of the country.
QUEST: What is Safaricom's key goal in 2022?
Obviously, it's going to be the further roll-out if you like, of high speed, fiber, broadband, getting more connectivity across the continent.
And is there the -- is there the investment appetite that you can raise the necessary funds to do it?
NDEGWA: So, Richard, we've done very well, actually. I've seen from the results. We invested $350 million the last year. So there's still a lot of
headroom to actually ensure that everybody has 4G. So our intention is to continue to push 4G acceleration and have a pay-as-you-go proposal with
Google, which is working very well.
But on 5G, it's a long-term play. We will continue to roll it out. We have tested this year, the new cases are new but we see it as a long-term play
but we continue to accelerate after 4G.
There's still about 14 million customers in Kenya who have 3G phones and the step-up from 3G to 4G makes a big difference in the ability to use the
internet, ability to use M-Pesa but also the ability for a better lifestyle.
QUEST: Peter, it is good to see you, thank you for joining us tonight from Nairobi. Thank you, sir. I appreciate it.
Now before we take a break, I'd like to show you the markets. I'd like to show you first the Dow, the three indices and the Dow 30, because, looking
at those, the three, the Dow 30, the triple stack was the phrase I was looking for. The Nasdaq lagging a bit today.
But the Dow is the one going the best and that is because of Boeing. If we show you the Dow 30, the individual stocks, you'll see Boeing up 7 percent.
Boeing is such a huge component of the Dow. They're a large part of that.
Now interestingly here, Apple, off -- remember, Apple has been a safe haven during this COVID-19. And Walmart, retailer, again, good gains but now
down. You get the idea of the thrusts and turns. But today's big gain at the market you can pin firmly on Boeing at 7.3 percent. We will have a
"Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment": so we move into this new phrase of travel restrictions. Bans are useless and won't last very long. We really
need to focus on the measures to be taken to allow us to travel safely.
And I think the U.S. went a long way toward that with its tests within 24 hours. At first, it sounds a bit forbidding until you realize you can use
an antigen, a rapid-flow, all those sorts of things. And they are easily available and will become more available.
Essentially, it's a quick swab, put it on the card and wait 15 minutes to see what the test result is. I foresee this almost being available at
airports ahead of departure. Certainly, it is not a major restriction that would, for most flights, cause problems.
There will be an entire industry built up around it. That's the way forward. The U.K. showing it day two tests, though PCR, could have been
antigen, other countries showing likewise. We don't need to go back to travel bans.
Sophisticated, nuanced policies will mean we can continue traveling and that, of course, is QUEST MEANS BUSINESS. I'm Richard Quest in New York.
Whatever you are up to in the hours ahead, I hope it's profitable. The bell is ringing. The day is done.