Major International Business Headlines Brief::: 06 August 2018

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Major International Business Headlines Brief::: 06 August 2018

 


 

 


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*  IMF makes significant progress in talks with Kenya

*  Mozambique Eurobond creditors' group proposes restructuring plan to
Maputo

*  South Africa's Eskom closes in on wage deal with unions

*  South Africa's rand rallies as dollar stalls, stocks recover

*  South African private sector activity shrinks in July for first time in 6
months: PMI

*  Kenya private sector activity expands at a slower pace in July -PMI

*  Mondi bets on environmentally conscious consumers, e-commerce as profit
jumps

*  S.African platinum producer Implats to slash 13,400 jobs as costs bite

*  The early victims of Trump's trade war

*  Saudi Arabia freezes Canada trade ties, recalls envoy

*  Liam Fox: No deal most likely Brexit outcome for UK

*  Five big things that have made Apple

*  House of Fraser store closures to go ahead

*  US jobs growth slows by more than expected in July

*  China plans tariffs after latest US trade threat

 

 

 


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IMF makes significant progress in talks with Kenya

NAIROBI (Reuters) - The International Monetary Fund’s mission to assess the
Kenyan economy achieved “significant progress” and talks with the government
will continue in the coming weeks, the IMF said on Friday after a two week
visit to Nairobi.

 

Kenya secured a six-month extension for its stand-by credit arrangement of
$989.8 million from the fund in March, and is seeking another extension when
it expires in mid-September.

 

The IMF has preconditioned the extension of the stand-by credit, used for
balance of payments support, on a number of measures, including the repeal
of a cap on commercial lending rates which was imposed in 2016.

 

Henry Rotich, the finance minister, moved to repeal the cap in his June
budget to parliament but some influential lawmakers have vowed not to
support the move. The budget must still be debated and passed by lawmakers
before it becomes law.

 

“The authorities reiterated their commitment to macroeconomic policies that
would maintain public debt on a sustainable path, contain inflation within
the target range, and preserve external stability,” the IMF said in a
statement.

 

It said the East African nation had met its fiscal targets during the
2017/18 (July-June) fiscal year after the government managed to narrow the
budget deficit to 7.0 percent of GDP from 9.0 percent the previous year.

 

Revenue collection had, however, failed to meet the set target during the
financial year, coming in at 2.2 percent of GDP lower than the set target,
the fund said, without giving the target level.

 

 

“To meet the deficit target in this context, the authorities rationalized
expenditures,” the IMF said.

 

 

 

 

 

 


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Mozambique Eurobond creditors' group proposes restructuring plan to Maputo

LONDON (Reuters) - A core group of Mozambique’s Eurobond creditors have made
a restructuring proposal to the government, including extending maturities
and adding instruments linked to future gas revenues, sources close to the
negotiations told Reuters.

 

Mozambique admitted in 2016 to $1.4 billion of previously undisclosed loans,
many of which went on upgrading maritime and military security. The
disclosure prompted the International Monetary Fund and foreign donors to
cut off support, triggering a currency collapse and leading to a debt
default.

 

In March, the government outlined three scenarios to overhaul its debt
burden but Eurobond creditors rejected them, baulking at a second writedown
in as many years.

 

A counter proposal by the Global Group of Mozambique Bondholders (GGMB) was
sent to the government on Wednesday, according to two sources.

 

The proposal envisages pushing out the “bullet” repayment on the 2023 bond,
some reduction in the coupons, and an instrument to allow bondholders access
to a share of future fiscal revenues from Mozambique’s vast gas resources.

 

“There is a substantial cash flow relief to 2023 ... and that cash flow
relief amounts to almost $1 billion to the maturity of the existing bonds,”
one source told Reuters, speaking on condition of anonymity.

 

Another source added the new Eurobond issued under the proposal would be
bigger in size to account for capitalisation of past due interest, which by
now amounts to nearly $200 million or about 25 percent of the principal.

 

Meanwhile the instrument linked to gas-related revenues going to the
government would only kick in once a certain threshold had been reached,
with Maputo retaining at least 97 percent of the gas earnings, the source
added.

 

Neither source would give further details on size, maturity or other
details.

 

The defaulted Eurobond, which is due to mature in January 2023, has just
under $727 million outstanding and last traded at 82.5 cents in the dollar,
according to Reuters data.

 

Substantial offshore gas reserves were discovered off Mozambique more than a
decade ago but progress in getting the infrastructure in place to tap them
has been glacial.

 

The country’s Rovuma Basin boasts gas resources of around 180 trillion cubic
feet, enough to underpin massive LNG export plants under development by
Exxon Mobil and Anadarko Petroleum, with production expected to start in
2024.

 

The steering committee of the GGMB is made up of hedge funds Farallon
Capital, Greylock Capital, Mangart Capital Advisors and Pharo Management as
well as asset manager Franklin Templeton Investment Management Limited,
according to GGMB’s advisors.

 

The steering committee members and other bondholders supporting its position
represent over 80 percent of the Eurobonds.

 

Mozambique is being advised by Lazard.

 

 

South Africa's Eskom closes in on wage deal with unions

JOHANNESBURG (Reuters) - South African state-run power utility Eskom closed
in on a wage deal with trade unions on Friday, as two large unions sought a
mandate from their members to agree to Eskom’s latest salary offer after
weeks of fraught negotiations.

 

Cash-strapped Eskom was forced to cave in to union demands for higher pay
after protesting workers forced some generating units to be switched off,
leading to power outages in Africa’s most industrialised economy last month
and again this week.

 

Securing an Eskom wage deal would help soothe local markets rattled by other
developments including a push by the ruling African National Congress to
change the constitution to allow for the expropriation of land without
compensation.

 

Eskom initially refused to raise salaries as part of a cost-cutting drive
aimed at reversing a steep financial decline, exacerbated by corruption
scandals under previous management.

 

Eskom is critical to South Africa because it generates more than 90 percent
of the country’s power.

 

The Solidarity union said on Thursday it had accepted a salary increase of
7.5 percent this year and 7 percent next year and the year after, plus an
inflation-linked increase in housing allowances and a one-off cash payment
of 5,000 rand ($370).

 

A source told Reuters on Friday that the National Union of Mineworkers (NUM)
was discussing a deal with its members. A draft agreement seen by Reuters
showed an offer of a 10,000-rand one-off payment to satisfy its demands for
annual bonuses.

 

The National Union of Metalworkers of South Africa (NUMSA) said it had sent
Eskom’s latest offer to its members, without giving details about what it
entailed.

 

“We’ve arranged different meetings at different plants all over the country
over the next few days to discuss the proposal in detail with our members,”
NUMSA said in a statement.

 

Eskom said trade unions had committed to assist with normalising its
operations but that there was a high risk of power outages over the next 30
days as the company worked to bring all its generating units back online.

 

Reuters reported on Tuesday that 15 units were down at nine Eskom stations,
with 11 going offline on Monday and Tuesday because of factors related to
protests and a wildcat strike by some workers, according to an internal
document.

 

“Employees are encouraged to report back to work,” Eskom said in a
statement. “The parties will formally sign the agreement on Aug. 8, after
engaging their members, as discussed during the mediation process.”

 

Solidarity, NUM and NUMSA account for more than half of Eskom’s 47,000
employees.

 

($1 = 13.3519 rand)

 

 

South Africa's rand rallies as dollar stalls, stocks recover

JOHANNESBURG (Reuters) - South Africa’s rand gained on Friday as U.S. job
growth slowed more than expected, easing pressure on emerging market
currencies that have retreated this week on likely return of a greenback
rally.

 

At 1530 GMT the rand was 1.25 percent firmer at 13.28, revved up after the
release of the U.S. nonfarm payrolls data.

 

The softer-than-anticipated data pushed the dollar lower, pausing a four-day
rally spurred by a bout of risk aversion following U.S. sanctions on Turkey,
another wave of trade war concerns, and China’s decision to further devalue
its currency.

 

While the soft U.S. jobs figures helped the rand claw back losses following
President Cyril Ramaphosa’s Tuesday speech declaring the ruling party would
press ahead with amending the constitution to speed-up land reform, traders
said the rand was set to weaken next week.

 

“As the final move in the dollar plays out the USDZAR will rally to 13.61
with an extended rally back to the 13.90’s top,” analysts at Nedbank Neels
Heyneke and Mehul Daya said in a note.

 

The rand tested the 200-week moving average at 13.40, indicating an overall
long-term trend weaker.

 

Bonds were firmer, with the yield on the benchmark paper due in 2026 down
0.5 basis points to 8.68 percent.

 

On the bourse, the market ended Friday over one percent higher, led by
advancers such as packaging company Mondi and diversified precious metals
producer Sibanye.

 

The All-share index was up 1.15 percent to 57,118 points while the top 40
index rose by 1.29 percent to 50,988 points.

 

Mondi jumped almost 6 percent after it reported a 25 percent increase in
half-year underlying profit on Friday..

 

Sibanye-Stillwater said on Friday it expected to swing to a half-year profit
from a steep loss last year, boosted by its platinum business and the
inclusion of its U.S. operations.

 

Shares in Sibanye closed higher by 5.30 percent to 8.71 rand.

 

 

South African private sector activity shrinks in July for first time in 6
months: PMI

JOHANNESBURG - (Reuters) - South African private-sector activity contracted
for the first time in six months in July as output and new orders fell and
firms struggled with slack demand and widespread work stoppages over wages,
a survey showed on Friday.

 

The Standard Bank Purchasing Managers’ Index (PMI), compiled by Markit, fell
to 49.3 in July from 50.9 in June, the first time since January that the
indicator slipped below the 50 mark separating expansion from contraction.

 

All five sub-indices in the survey were in contraction territory, with
output and new orders taking the biggest hits.

 

Companies reported a decline in the volume of new orders from both domestic
and foreign customers as well as an uptick in input prices.

 

Since the February election of Cyril Ramaphosa as president on a pledge to
reform the economy, factory activity had crawled into expansionary territory
as business and consumer confidence climbed, spurring a rally in the
currency which kept inflation in check.

 

Sentiment however has since retreated as economic constraints resurfaced.

 

A stalemate over wage increases at state power utility Eskom, which supplies
90 percent of the country’s electricity, has led to the first controlled
power cuts since 2015.

 

There have also been wage strikes across the transport sector, at numerous
mining operations, in the retail industry as well as stoppages by public
sector unions.

 

Standard Bank, which conducts the survey, said it expected the decline in
activity to be temporary.

 

“Though somewhat cooler, consumer sentiment was still upbeat in 2Q18. Also,
inflation is still benign, and interest rates will likely be steady and
credit growth reasonable. This should support domestic demand,” said Thanda
Sithole, an economist at the bank.

 

- Detailed PMI data are only available under licence from IHS Markit and
customers need to apply for a licence.

 

 

Kenya private sector activity expands at a slower pace in July -PMI

NAIROBI, Aug 3 (Reuters) - Kenya’s private sector activity expanded at a
slower pace in July as growth in output and new orders lost steam, a survey
showed on Friday.

 

The Markit Stanbic Bank Kenya Purchasing Managers’ Index(PMI) for
manufacturing and services fell to 53.6 in July from 55.0 in June. A reading
above 50 marks growth.

 

“Kenya’s private sector activity continued to expand although the pace of
acceleration was moderating, but there is no cause for alarm,” said Jibran
Qureishi, economist for East Africa at Stanbic Bank.

 

“The health of the private sector remains sound and the decline in the PMI
in July is still above the historical average since data collection began.”

 

The survey showed firms took on staff at a slower pace during the period
while facing the fastest rise in costs of materials since March this year.

 

Kenyan economic activity has picked up after political unrest and drought
cut growth last year to its lowest level in more than five years, and the
economy is forecast to expand by 5.8 percent this year from 4.9 percent in
2017.

 

- Detailed PMI data are only available under licence from IHS Markit and
customers need to apply for a licence.

 

 

Mondi bets on environmentally conscious consumers, e-commerce as profit
jumps

JOHANNESBURG (Reuters) - Mondi, looked to e-commerce and environmentally
conscious consumers to drive growth, after the packaging firm reported a 25
percent increase in half-year underlying profit on Friday.

 

The expansion of e-commerce is increasing the need for packaging, while
consumers are increasingly demanding that producers use natural resources
responsibly to minimise waste.

 

Chief Executive Peter Oswald said Mondi will benefit hugely from these
trends given its position as the largest global producer of kraft paper,
which is used to make a variety of industrial and consumer packaging.

 

“Since the beginning of this year we have seen an unprecedented surge in
public interest in plastic waste and solutions for that,” he said at the
results presentation.

 

“We are convinced that (sustainable packaging) will be a major growth profit
driver for Mondi as Mondi is uniquely positioned as a leading producer of
both plastics and paper based solutions.”

 

Mondi, which has operations in 30 countries worldwide, is replacing plastic
carrier bags with paper-based alternatives.

 

The U.N. Environment Programme estimates that some 8 million tons of plastic
are dumped into the ocean every year - the equivalent of a garbage truck of
plastic every minute - killing birds and marine life and compromising the
ocean ecosystem.

 

Mondi’s underlying operating profit rose to 630 million euros in the
six-months to the end of June, up from 503 million euros in the same period
last year, with the fibre-based packaging business the main contributor to
the improved performance.

 

This was due to higher average selling prices and good demand across its
packaging businesses.

 

Shares in both Johannesburg and London-listed Mondi surged more than 6
percent in early trade after the results. At 1313 GMT shares in Johannesburg
were up 5.06 percent to 380.30 rand and remained up more than 6 percent in
London.

 

“Over the last month, Mondi’s share price has slightly underperformed its
peers so given this update we would expect a positive reaction from the
market,” said analysts at Investec Securities in a note.

 

The company said it was making progress with plans to boost growth and
ensure the ongoing cost competitiveness of its operations via a major
capital expenditure programme of over 750 million euros ($869.33 million).

 

The investment aims to increase Mondi’s paper mill capacity and secure
organic revenue from 2019 onwards.

 

($1 = 0.8627 euros)

 

 

S.African platinum producer Implats to slash 13,400 jobs as costs bite

JOHANNESBURG (Reuters) - Miner Impala Platinum will slash about a third of
its workforce over two years in one of the biggest rounds of job cuts by one
mining company in living memory in South Africa as the platinum industry
faces a day of reckoning.

 

The number of platinum miners employed in South Africa, the world’s largest
producer of the precious metal, has fallen from a peak of almost 200,000 in
2008 to 175,000 in the face of depressed prices and soaring costs, fuelling
labour and social unrest.

 

Job cuts are politically sensitive in the country and Mines Minister Gwede
Mantashe, a gruff former trade unionist, called Implats’ announcement on
Thursday “a clear example of a company that is careless...Their reckless
actions add injury to insult”.

 

Mantashe urged Implats in a statement “to reconsider its actions” but there
seems little the government can do, with a clear legal framework companies
can follow before they embark on large-scale staff cuts, which includes
consultations with unions.

 

Implats’ planned job cuts are focused on its labour-intensive, conventional
Rustenburg operations, where the number of shafts will be reduced to six
from 11 with production cut to 520,000 ounces per annum from 750,000 ounces.

 

Its shares were around 4 percent higher in afternoon trade after earlier
rising 6 percent, reflecting investor support for the tough moves.

 

The 13,400 jobs on the line over two years, out of a workforce of about
40,000, is steeper than plans by miner Sibanye-Stillwater to cut 12,600 over
three years at acquisition target Lonmin .

 

Most of South Africa’s conventional platinum shafts are losing money,
according to the Minerals Council South Africa, while the handful of
mechanised ones are profitable. But an unforgiving geology makes
mechanisation challenging in South Africa and is not an option at
Rustenburg.

 

“The only option for conventional producers today is to

 

fundamentally restructure loss-making operations to address cash-burn and
create lower-cost, profitable businesses that are able to sustain operations
and employment in a lower metal price

 

environment,” Chief Executive Nico Muller said.

 

IN THE RED

The company said in March it narrowed its first-half loss by 70 percent to
21 cents per share but warned then that steep cost cuts were on the horizon
as it reviewed Rustenburg, which has been a flashpoint of labour violence in
the past. The company has not made a profit in six years.

 

Costs at Implats have been soaring over the last few years, making it the
highest cost producer among the country’s three largest platinum miners.

 

Muller told journalists an alternative would be to sell shafts it plans to
close if buyers could be found, but that would not be easy.

 

Sibanye-Stillwater is in the process of acquiring Lonmin’s nearby operations
but is unlikely to have the appetite for further acquisitions as it grapples
with the fall-out from a spate of deaths at its gold mines.

 

Job cuts are tough to swallow in South Africa, where the economy is barely
growing and data this week showed the unemployment rate rose to 27.2 percent
in the second quarter from 26.7 percent in the first quarter.

 

“This (the jobs cuts) is disconcerting considering the high unemployment
rate in the country,” said Mantashe, a senior figure in the ruling African
National Congress who once headed the National Union of Mineworkers.

 

The typical South African mine worker has around eight dependants,
multiplying the social hardships associated with lay-offs in an economy
still defined by glaring racial income disparities. Black workers will
account for the vast majority of the job cuts.

 

AMCU, the majority union at Implats, was not immediately available for
comment. The union led a five-month strike in 2014 at the operations of the
world’s three largest platinum miners, including Implats.

 

“We are very concerned about the social implications,” Muller said.

 

He said an initial 1,500 jobs will be cut in the first round, confirming a
Reuters report on Wednesday.

 

 

 

The early victims of Trump's trade war

As a US-led trade war rages on, some companies are starting to feel the
pain.

 

The US has been embroiled in a tit-for-tat trade battle on several fronts
over the past few months.

 

The one that's creating the most interest is the one with China, as the
world's two largest economies wrangle for global influence.

 

Some say President Trump is trying to raise pressure on China ahead of key
mid-term elections at home in November.

 

In the latest move, China said on Friday that it would levy new tariffs on
more than 5,200 US products if the US goes ahead with its latest threat to
impose 25% tariffs on $200bn (£152bn) of Chinese goods.

 

Six ways China could retaliate in a trade war

How a US-China trade war could hurt us all

US-China trade row: What has happened so far?

Earlier this year, the US also started charging levies on the imports of
steel and aluminium from the European Union, Mexico, and Canada. These
countries have retaliated.

 

Here are some of the main sectors finding themselves victims of the trade
war so far.

 

Cars and motorbikes

The car industry seems to have been the most affected so far, with three
major automakers recently warning that changes to trade policies are hurting
performance.

 

Ford and General Motors lowered profit forecasts for 2018, citing higher
steel and aluminium prices caused by new US tariffs.

 

Fiat Chrysler also cut its 2018 revenue outlook after sales in China
slumped, as buyers postponed purchases in anticipation of lower car tariffs.

 

In May, China announced that it would cut tariffs on imported cars from 25%
to 15% on 1 July in a move seen as an attempt to reduce trade tensions with
the US. But shortly after, on 6 July, it increased tariffs on US-made cars
to 40% in retaliation to the US's move to tax $34bn of Chinese products.

 

Jaguar Land Rover, the UK's biggest car firm, also recently reported a loss
for the first time in three years after sales slowed down in China. Among
the reasons, it said many consumers had delayed purchases due to a change in
Chinese import duties.

 

JLR has seen sales slow in China

European and US car companies are also responding by increasing prices in
China.

 

BMW recently said it would raise prices on two of its models from 30 July
due to the increased import duty on US-made cars in China. Tesla has also
reportedly increased prices on two of its models.

 

However, there has also been a positive impact for China, as Anna-Marie
Baisden, head of autos research at Fitch Solutions, points out.

 

"We have seen a number of carmakers, including Tesla, accelerating plans to
invest in local production facilities to avoid import tariffs," she says.

 

Other firms in the broader industry are also considering their options.

 

"Ironically some of the hardest-hit companies are American or producing in
the US, even though the tariffs imposed by the US are intended to help
domestic companies," says Ms Baisden.

 

US motorcyle maker Harley-Davidson plans to shift some production away from
the US to avoid the "substantial" burden of European Union tariffs, imposed
in retaliation to US duties on steel and aluminium.

 

Food and drink

Some companies in the food and drinks industry are also lowering their
outlooks and putting up their prices to cope with the new status quo.

 

Tyson Foods recently cut its profit forecast, saying retaliatory duties on
US pork and beef exports had lowered US meat prices.

 

US spirits and wine giant Brown-Forman has said it will increase the price
of Jack Daniel's and other whiskeys in some European countries, according to
media reports.

 

Coca-Cola has also said it will increase prices in North America this year
to compensate for higher freight rates and metal prices, according to the
Wall Street Journal.

 

Other companies are seeking to do less business with China as a way of
avoiding the tariffs.

 

Toymaker Hasbro is moving more production out of China, US conglomerate
Honeywell wants to use more supply chain sources from countries outside
China and home furnishing company RH expects to cut the amount of goods
sourced from China, according to Reuters.

 

Meanwhile, US equipment maker Caterpillar recently said strong demand had
allowed it to hike prices to offset $100m-$200m in higher steel and
aluminium costs.

 

World economy

The International Monetary Fund says an escalation of the tit-for-tat
tariffs could shave 0.5% off global growth by 2020.

 

Separate releases recently showed growth in China's manufacturing sector
slowing in July and one measure of US consumer sentiment falling due to
tariff concerns, according to media reports.

 

Morgan Stanley estimates that a full-blown escalation of the trade dispute
could knock 0.81 percentage points off global gross domestic product. This
scenario would involve the US slapping 25% tariffs on all goods from both
China and the EU, and them responding with similar measures.

 

The bank said most of the effect from tariff hikes on growth would probably
be seen only in 2019.

 

Most of the impact - or almost 80% - would come through a disruption of
domestic and international supply chains, the bank added.--BBC

 

 

 

Saudi Arabia freezes Canada trade ties, recalls envoy

Saudi Arabia has said it is freezing all new trade and investment with
Canada over its "interference" in the Gulf Kingdom's internal affairs.

 

In a series of tweets, the Saudi foreign ministry said it was expelling the
Canadian ambassador and recalling its own envoy in Canada.

 

The move comes after Canada said it was "gravely concerned" about the arrest
of several human rights activists.

 

Among those arrested was Saudi-American women's rights campaigner Samar
Badawi.

 

Ms Badawi had been calling for an end to Saudi Arabia's male guardianship
system.

 

Saudi Arabia widens crackdown on women's rights activists

Have executions doubled in Saudi Arabia?

Who is Saudi Crown Prince Mohammed?

What did Saudi Arabia say?

The foreign ministry said it "will not accept any form of interfering" in
its internal affairs.

 

It referred to last week's statement by the Canadian foreign ministry, which
urged Riyadh to "immediately release" civil society and women's rights
activists.

 

Canada's government has so far made no public comments on Saudi Arabia's
diplomatic measures.

 

The arrests are at odds with the progressive image the government has
projected this year under Crown Prince Mohammed bin Salman.

 

He drew widespread praise last year when they announced that the decades-old
ban on women driving would end on 24 June.

 

Saudi women's rights activists, including those who have been imprisoned for
defying the ban, had celebrated the decision.

 

But they also vowed to continue campaigning for the end of other laws they
consider discriminatory.

 

Women must adhere to a strict dress code, be separated from unrelated men,
and be accompanied by or receive written permission from a male guardian -
usually a father, husband or brother - if they want to travel, work or
access healthcare.

 

The Saudi crown prince has also spearheaded a sweeping anti-corruption drive
which resulted in dozens of princes, government ministers and businessmen
being detained in November and generated an estimated $107bn ($80bn) in
settlements.--BBC

 

 

Liam Fox: No deal most likely Brexit outcome for UK

Liam Fox says the chance of a no-deal Brexit is growing, blaming the
"intransigence" of the European Commission.

 

The international trade secretary and Brexiteer put the chance of failing to
come to an agreement at "60-40".

 

He told the Sunday Times that Brussels' chief negotiator had dismissed the
UK's Chequers proposals simply because "we have never done it before".

 

No 10 insists the government remains confident it can get a good deal.

 

Mr Fox told the paper that he had not thought the likelihood of no-deal was
higher than 50-50, but the risk had increased.

 

He said the EU had to decide whether to act in the economic best interests
of its people, or to go on pursuing an approach determined by an obsession
with the purity of its rules.

 

"I think the intransigence of the commission is pushing us towards no deal,"
he said.

 

At-a-glance: The new UK Brexit plan from Chequers

Reality Check: What would 'no deal' look like?

The UK's four Brexit options

The government has been touting its plans for Brexit agreed at Chequers -
the prime minister's country residence in Buckinghamshire - to the EU and
its leaders, including the French President Emanuel Macron, whom Theresa May
met on Friday.

 

But Mr Fox claimed Michel Barnier, the EU's chief negotiator, had already
dismissed the proposals, which "makes the chance of no deal greater".

 

He said: "We have set out the basis in which a deal can happen but if the EU
decides that the theological obsession of the unelected is to take priority
over the economic wellbeing of the people of Europe then it's a bureaucrats'
Brexit - not a people's Brexit - then there is only going to be one
outcome."

 

Mr Fox said if the EU did not like the proposal, they should "show us one
that they can suggest that would be acceptable to us".

 

He added: "It's up to the EU27 to determine whether they want the EU
Commission's ideological purity to be maintained at the expense of their
real economies."

 

On Friday, the governor of the Bank of England, Mark Carney, warned that the
possibility of a no-deal Brexit was "uncomfortably high".

 

Mr Carney said that if a no-deal Brexit were to happen, it would mean
disruption to trade and economic activity, as well as higher prices for a
period of time.

 

But he said that the UK financial system was robust and could withstand any
post-Brexit shocks.

 

The comments led to a decline in the pound on the currency markets and saw
him labelled as "the high priest of Project Fear" by Leave-backing MP Jacob
Rees-Mogg.

 

'Worst of both worlds'

Meanwhile, another prominent Brexiteer, former minister Priti Patel, has
called on Mrs May to have the "backbone and confidence" to back Britain in
the negotiations with the EU.

 

Writing for the Telegraph's website, she said the UK was in a "strong
position" when it came to a future trade deal because "we are dynamic,
competitive and growing" - while the EU "desperately needs our money".

 

But unlike Mr Fox, Ms Patel does not back the Chequers deal, which has
already led to a number of resignations from the government - including
David Davis as Brexit secretary and Boris Johnson as foreign secretary.

 

She wrote: "It will leave us half in and half out, still bound to EU
regulations and constraints.

 

"[It will be] the worst of both worlds - effectively out of Europe but still
run by Europe."

 

The UK and EU say they want agreement before the exit on 29 March 2019.--BBC

 

 

 

Five big things that have made Apple

It's been called the most successful company in history.

 

And it's just become the world's first public company to be worth $1
trillion (£767bn).

 

So how's it done it?

 

Here's a quick look at five of the biggest things that have helped make
Apple the gigantic success story it is today.

 

1. Steve Jobs - a brand unto himself

As the co-founder of one of the world's most successful companies, his is
one of the most recognised names in the world of tech.

 

He put Apple at the forefront of the personal computing revolution, and was
behind a suite of revolutionary, highly desirable products - from the iPod
to the iPad.

 

But he was also recognised as one of the modern world's first auteur chief
executives - and became a brand unto himself.

 

>From the time he founded the company with Steve Wozniak in 1976 in Silicon
Valley, California, Apple was seen as a firm that was set to achieve great
things.

 

Apple shares were in such high demand that by the time it opted for a
flotation in 1980, it became the biggest stock market launch since Ford in
1956.

 

In 1985, Mr Jobs was famously ousted from the firm he founded after a
falling out with chief executive John Scully.

 

But by 1997, after Apple had been operating at a loss for 12 years, Mr Jobs
was asked to return.

 

He quickly set about scrapping various projects and introduced Think
Different - a campaign designed to promote Apple and its products, and
revive employee morale. The firm quickly returned to profitability.

 

When Mr Jobs died in 2011, US President Barack Obama said the world had
"lost a visionary".

 

Apple just wouldn't be Apple without his name behind it.

 

Profile: Steve Jobs

2. The iPhone - a revolution

Launched in 2007, the impact the iPhone has had on modern mobile
communication is unmatched, and unquestionable.

 

Almost 1.4 million iPhones were sold in the first year they were on the
market. Competitors such as Nokia and Blackberry, which had dominated the
mobile phone market, were quickly knocked out.

 

While Apple recently dropped to third place in the battle of the world's
biggest smartphone makers, behind South Korea's Samsung and China's Huawei,
its iPhones are still clocking strong demand worldwide.

 

Apple sold 41.3 million of them in the three months to June this year - and
about 216 million worldwide last year.

 

Moreover, Apple's bottom line is still largely determined by their sales. In
the most recent quarter, 56% of Apple's revenue came from iPhone sales.

 

But perhaps more importantly for Apple's future - the iPhone is a gateway to
the company's booming services offerings.

 

3. Apple services - and brand loyalty

Think iTunes or Apple Music, the App Store, iCloud and Apple Pay.

 

These are just some of the things that make up Apple's services business -
and they're regarded as the firm's most important and fastest-growing
drivers of revenue.

 

Apple's market value hits $1 trillion

iPhone demand boosts Apple profits

State firm hosts Apple's data in China

In the three months to June this year, Apple's services saw revenue growth
of 31%.

 

And while the iPhone might be a gateway to Apple's offerings, things like
Apple Music and the App Store, in turn, help drive brand loyalty.

 

If a consumer truly loves using their iPhone to buy music and movies,
Apple's hope is that they'll move on to purchase an iPad, a Macbook, an
Apple TV or watch.

 

"That's the financial genius that sits inside that brand - getting consumers
to keep buying the hardware," says Paul Nelson, managing director of
BrandMatters.

 

"Strong brands have clients who are simply disinterested in alternatives -
and that's where Apple's strength lies. The fact that you just become a
loyalist."

 

4. China - and growth

Without China, the world's biggest smartphone market, Apple's success would
look quite different.

 

Mainland China generates about a quarter of Apple's profits.

 

In addition, most of Apple's iPhones are manufactured in Shenzhen in
southern China

 

And while the company suffered a rough patch between March 2016 and July
last year - when its Greater China revenues saw double-digit falls - the
tech giant has now reversed those fortunes.

 

Since September 2017, Apple has seen double-digit year-on-year revenue
growth across the Greater China region.

 

How? Well, the iPhone has remained a symbol of wealth and prestige among
China's growing middle-income, big city dwellers.

 

So despite the stiff competition from cheaper home-made brands, Apple's more
lucrative iPhones, iPads and Macs have helped repair its regional revenue
numbers.

 

5. The Apple brand today

The Forbes list, which measures the value of a company's brand by looking at
its financial numbers, has ranked Apple as the most valuable brand for the
last eight years in a row. This year, it was valued at $182.8bn.

 

Now Forbes may only analyse companies with a presence in the US, but compare
Apple's brand value to that of Coca-Cola's - a one-time world leader in
terms of brand recognition - this year valued at just $57.3bn.

 

For those of us born before the turn of the millennium, it's probably
difficult to imagine a world without Coca-Cola signs somewhere along our
local shopping streets.

 

But for the generations that follow, the instantly recognisable eaten apple
seems set (so far) to be one of the brands of the 21st Century.

 

"The thing that Apple has been able to do, that Coca-Cola hasn't been able
to, is to remain relevant and contemporary," says BrandMatters' Paul Nelson.

 

"They have kept the human at the centre of their ecosystem, and at the
centre of everything they do. Their whole brand is about humanising
technology.

 

"The reason you get to a trillion dollars is that you create in your
business model built-in barriers for customers to move elsewhere. And Apple
is just that - it's a complete ecosystem."--BBC

 

 

House of Fraser store closures to go ahead

House of Fraser has settled a legal row with a group of landlords removing
one hurdle to a potential rescue deal.

 

The deal means the department store chain can go ahead with its plan to
close 31 of its 59 shops in January.

 

The landlords had argued slashing rents on remaining stores was unfair to
them, putting the rescue plan in jeopardy.

 

However, the deal will not be enough to safeguard House of Fraser's future,
with it now urgently seeking fresh investment in order to survive.

 

House of Fraser said it was now "focused on concluding discussions with
interested investors" and the out-of-court settlement with the landlords had
removed "any risk to those discussions".

 

House of Fraser rescue deal falls through

House of Fraser loan offer from Mike Ashley

Landlords challenge House of Fraser rescue

Potential suitors for the chain include Philip Day, owner of Edinburgh
Woollen Mills, and whose retail empire includes Peacocks, Jane Norman,
Austin Reed and Jaeger.

 

Sports Direct boss Mike Ashley, who already owns an 11% stake in House of
Fraser, also approached the chain in July over a potential investment deal.

 

Mr Ashley is understood to have not communicated with House of Fraser's
financial advisers' Rothschilds since then, and The Sunday Times has
suggested he is unlikely to proceed with a rescue deal due to concerns over
the chain's pension funds.

 

However, industry insiders say House of Fraser's two defined-benefit pension
funds are fully funded.

 

Other names in the frame as possible saviours include investment funds
Alteri, an offshoot of US hedge fund Apollo, and Hilco, both of which
specialise in buying up troubled firms and turning their performance around.

 

The chain's future has been thrown into doubt after Hong Kong-listed
C.banner, owner of Hamleys, pulled out of plans to take control and invest
£70m in the retailer.

 

'Matter of weeks'

Richard Lim, boss of independent research consultancy Retail Economics, says
it is still "hard to know with any certainty just what will happen next at
House of Fraser."

 

 

"But it is in desperate need of a rescue package. Without any external
funding it is inevitable it will fall into administration.

 

"Funding will have to be in place within a matter of weeks, rather than any
longer period, if House of Fraser is to have a fighting chance to ensure its
future."

 

The retailer employs 17,500 people - 6,000 direct and 11,500 concession
staff.

 

House of Fraser is using company voluntary arrangements (CVAs), a form of
insolvency proceedings, to overhaul its business.

 

CVAs are being increasingly used by struggling retailers as a way to close
stores, but landlords argue that they are being abused as a quick way to cut
rents.

 

Mark Fry of Begbies Traynor and Charlotte Coates of JLL, who advised the
group of House of Fraser landlords throughout the CVA process and subsequent
legal challenge, said they were pleased with the settlement.

 

"The retail CVA process in the UK has become increasingly misused and
prejudiced against landlords and needs correcting.

 

"CVAs were designed as a means to rescue a business, not simply a tool to
shed undesirable leases for the benefit of equity shareholders," they added
in a statement.

 

House of Fraser is one of a number of retailers struggling amid falling
consumer confidence, rising overheads, the weaker pound and the growth of
online shopping.

 

Electronics chain Maplin and toy chain Toys R Us both collapsed into
administration earlier this year.

 

Other High Street chains such as Mothercare and Carpetright have been forced
to close stores in order to survive.--BBC

 

 

US jobs growth slows by more than expected in July

The US economy added fewer jobs than expected in July after a surge of
hiring in the previous months.

 

Employers added 157,000 jobs in July - 33,000 fewer than expected and well
below the 248,000 created in June.

 

Economists had forecast that the number of jobs created would be close to
190,000 for the month.

 

The US Department of Labor also said the unemployment rate fell from 4.0% to
3.9% in July, near to the 18-year low it reached in May.

 

Manufacturers led the job gains in June - a sign that the intensifying trade
disputes between the US and other countries are not yet hurting hiring,
analysts said.

 

The healthcare and hospitality sectors also added positions, but there were
marked losses at toy and game retailers, as chains such as Toys R US
shuttered their doors.

 

Previous job gain estimates for May and June were revised upwardly, to
268,000 and 248,000 respectively.

 

Those revisions "take some of the sting out" of the unexpectedly low rise in
July, said Mark Hamrick, senior economic analyst at Bankrate.com, which
tracks interest rates.

 

Wage gains

The job figures follow data last week that showed the US economy grew at an
annualised rate of 4.1% in the second quarter of the year.

 

They extend an uninterrupted streak of job growth that started in October
2010 and that has driven down the unemployment rate to levels last seen at
the turn of the century.

 

The tightening labour market has also made it harder for employers to fill
positions. There are close to 6.6 million unfilled jobs across the nation.

 

However wage gains have remained relatively modest.

 

The Department of Labor said average hourly earnings increased by 0.3% in
July to $27.05, meaning they were up 2.7% from the same month last year.

 

The pace of year-on-year growth, however, slowed slightly from the prior
months.

 

"It is clear that wage growth must increase," US Secretary of Labor
Alexander Acosta said in a statement. "Further wage increases will add a
great benefit to the American workforce."

 

It's far too early to tell if this dip is evidence that the "trade wars"
between the US, China and other nations is starting to pinch the US economy.

 

Certainly over the long term, any disruptions to global supply chains could
hurt jobs.

 

But this is just one number. Most economists pay attention to the
three-month average of job growth, which sits now at 224,000, a healthy
number suggesting a solid US labour market.

 

The other key figure in the minds of the markets will be average hourly
earnings growth, now at 2.7%, year-over-year, suggesting that wage inflation
is not accelerating.

 

That is not likely to prevent the Fed from hiking rates in September, but
it's likely to calm any market anxieties that the speed of rate increases
could accelerate.

 

Rate rises

Ian Shepherdson, chief economist at Pantheon Economics, said the data was
"better than it looks" as the core, three-month trend was of an additional
200,000 jobs a month.

 

He also predicted that the figures would not push the US Federal Reserve off
its course of steady interest rate increases.

 

"Overall, these numbers won't change the Fed's plans; unless the data over
the next few weeks take a sudden, serious turn for the worse, the Fed will
hike again next month".

 

The Fed has already increased its base interest rate twice this year,
following meetings in March and June, and it now sits at between
1.75%-2%.--BBC

 

 

 

China plans tariffs after latest US trade threat

China has said it will levy new tariffs on more than 5,200 US products, if
the White House moves forward with its latest tariff threat.

 

The State Council outlined the plan just days after the US said it was
considering higher tariffs on $200bn of Chinese goods than initially
planned.

 

Chinese officials accused the US of "unilaterally" heightening tensions
between the two economic giants.

 

They said the duties would range from 5%-25% on $60bn worth of US products.

 

The White House says its tariffs are a response to China's "unfair" trade
policies, including subsidies and rules that require foreign companies in
some sectors to bring on local partners.

 

President Donald Trump blames the practices for putting US companies at a
disadvantage and helping to create a trade deficit.

 

"Instead of retaliating, China should address the longstanding concerns
about its unfair trading practices," Sarah Sanders, White House press
secretary, said on Friday.

 

 

The tariffs follow talks this spring that failed to produce an agreement.

 

A first round of tariffs came into effect on 6 July, when the US imposed 25%
taxes on $34bn of Chinese imports. China retaliated in kind.

 

Tariffs on another $16bn worth of products are pending, the second part of
tariffs on $50bn worth of imports that the US announced in March.

 

US threats have escalated since, with the president saying he is ready to
impose tariffs on all $500bn of Chinese imports.

 

In July, the US published a list of $200bn-worth of additional products to
be hit with tariffs of 10% - a figure the US is now considering raising to
25%.

 

In Friday's announcement, China said it is readying tariffs on US items that
include agriculture and energy products, leather and machinery.

 

Beijing said the timing of the new tariffs would depend on whether the US
follows through on its threat.

 

Trade flows

Concerns about the trade war have already affected China's currency, which
has fallen almost 9% against the dollar since April.

 

The People's Bank of China has announced new requirements for certain types
of trading in the yuan, measures that are aimed at stabilising the currency.

 

The tensions are also having an impact on trade flows.

 

The US trade deficit - the gap between exports and imports - widened by 7.3%
to $46.3bn in June. The deficit had narrowed in previous months as companies
rushed out exports to beat the imposition of tariffs.

 

The trade deficit with China rose by almost 1% to $33.5bn.

 

China accounted for about 16% of America's trade in goods last year. The
country exported about $500bn in goods to the US and imported about $130bn.

 

It is hard to predict how the confrontation will end, Kenneth Pomeranz, a
professor of Chinese history at the University of Chicago, told the BBC.

 

The US economy is more insulated from trade concerns, but Chinese leaders
have retaliated strategically, targeting products made in Republican
districts and final goods, like soybeans, that can be purchased elsewhere.

 

"I can imagine [Chinese officials] just sort of hoping that if they do stand
tough, either the US will eventually just decide to settle for some symbolic
victory that doesn't really matter or that there will be a shift in American
politics," he said.--BBC

 

 

 


 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


NicozDiamond

shares delist from the ZSE

 

06/07/2018

 


Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

 


Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

 


The Harare Agricultural Show

The Harare Agricultural Show

The Harare Agricultural Show

August 27- September 1

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 


 

 


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