Major International Business Headlines Brief::: 31 August 2018

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Major International Business Headlines Brief::: 31 August 2018

 


 

 


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*  Zambia's external debt rises to $9.4 billion - finance ministry

*  TFG to open retail brand in Australia, test appetite outside Africa

*  Aker Energy to start Ghana drilling in Oct, eyes development plan in 2019

*  Kenya's parliament approves retaining interest rate cap against IMF
wishes

*  IMF supports South African land reform provided it's "rules based"

*  S&P says unlikely to lower South Africa's ratings like Turkey

*  Nigeria's Senate leader says economy broken, plans to challenge president
in vote

*  PM May says Britain committed to free trade with Kenya after Brexit

*  Nigeria stuns MTN with $8.1 billion demand, shares plunge

*  South Africa's Old Mutual H1 profit flat; declares dividend

*  Trump threatens to pull US out of World Trade Organization

*  Ad giant WPP 'to name Mark Read as CEO'

*  Coca-Cola to buy Costa chain for £3.9bn

*  Trump calls for CNN boss Jeff Zucker to be fired

*  Plastic bags: Charge could rise to 10p and be extended to smaller shops

*  Argentina raises rates as peso plummets

 

 

 


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Zambia's external debt rises to $9.4 billion - finance ministry

LUSAKA (Reuters) - Zambia’s external debt rose to $9.37 billion at the end
of June from $8.7 billion in December last year, the ministry of finance
said on Thursday.

 

“This represents 34.2 percent of GDP against a threshold of 40 percent,” the
ministry of finance said in a statement.

 

 

 

 

 

 

 

 

 

 


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TFG to open retail brand in Australia, test appetite outside Africa

JOHANNESBURG (Reuters) - South African clothing and homeware retailer The
Foschini Group (TFG) said on Thursday it was launching one of its African
retail brands in Australia to test appetite outside its traditional market.

 

The move announced by outgoing CEO Doug Murray and his successor, Anthony
Thunström, aims to show whether TFG’s local brands can thrive in more
developed markets than Sub-Saharan Africa where weak economies are seen
limiting potential.

 

“We will have six stores open on a test basis by the end of this year,”
Thunström said without naming the brand.

 

“Our own modelling suggests that if the six stores work we can get up to
well over 100 of those stores in Australia and if it works in Australia it
can work elsewhere,” he added.

 

TFG, which also owns American Swiss, started in Australia in 2017 when it
bought menswear chain Retail Apparel Group for 302.5 million Australian
dollars ($220.4 million).

 

“We think we’ll go into Australia with this brand and be a disrupter.
Australians have been seen for many years to come to South Africa and be
disrupters, well we can (also) go into Australia and be disrupters,” Murray
said.

 

TFG’s rival Woolworths Holdings has also built up its Australian operations,
acquiring David Jones. But it has faced delays in redeveloping that
business.

 

Woolworths booked an impairment charge of 6.9 billion rand ($470.87 million)
this year against the carrying value of David Jones as a result of the
cyclical downturn and structural changes that have hurt the Australian
retail sector.

 

Launched in 1924, TFG has 28 brands in 32 countries, mostly in Africa. TFG
said it was “extremely cautious” on expanding in Africa due to a mix of
lacklustre economic growth, the high cost of rental agreements and
infrastructure bottlenecks.

 

($1 = 1.3727 Australian dollars)

 

($1 = 14.6536 rand)

 

 

 

Aker Energy to start Ghana drilling in Oct, eyes development plan in 2019

STAVANGER, Norway (Reuters) - Norwegian oil firm Aker Energy will delay
submitting a plan for development of its block off Ghana until early next
year in order to first complete appraisal drilling, expected to start in
October, its chief executive said on Thursday.

 

The unlisted firm, controlled by Norwegian billionaire Kjell Inge Roekke,
bought a 50-percent stake in Ghana’s Deepwater Tano Cape Three Points block
from Hess for $100 million in February.

 

Aker had initially intended to summit a development plan in the second half
of 2018, but has since changed its mind.

 

“The forecast now is to start drilling in October... Our goal is to identify
the oil/water contact to update the reservoir model,” Chief Executive Jan
Arve Haugan told Reuters on the sidelines of an energy conference.

 

 

 

Kenya's parliament approves retaining interest rate cap against IMF wishes

NAIROBI (Reuters) - The Kenyan parliament voted on Thursday to retain the
cap on commercial interest rates which the International Monetary Fund has
insisted must be scrapped or modified in return for a new standby
arrangement.

 

Lawmakers also voted to delay a proposed 16 percent tax on petroleum
products for two more years, citing the high cost of living — a move that
will be a blow to government efforts to raise revenues through higher taxes.

 

The rate cap, introduced in September 2016, was aimed at helping small
traders access capital at affordable rates, but has had the opposite effect,
with banks saying they cannot price risk to small and medium enterprises
(SMEs) properly while the cap is in place. As a result lending to the
private sector fell from 9.3 percent in 2016 to 2.4 percent last year.

 

“Many thousands of Kenyans have been unable to access bank lending and have
turned to more expensive borrowing,” said Aly Khan Satchu, a Nairobi-based
independent trader and analyst.

 

President Uhuru Kenyatta said in April that he recognised the limitation of
the law and hoped that the finance bill will remove the cap that he said had
ended up hurting the financial sector

 

Some bank stocks at the Nairobi Securities Exchange edged lower on Thursday,
after the Finance Bill was passed.

 

“It was not widely expected, people were banking on repealing of the
interest cap,” said Sheema Shah, equities dealer at Apex Africa. “It’s still
a buy, the current sell-off is temporary...mostly its the foreign investors
who are heavy on that particular stock who are selling off.”

 

In June, Finance Minister Henry Rotich proposed repealing the interest rate
cap, a move cheered by bankers. But lawmakers have continued to insist they
are not ready to remove the upper limit of commercial lending rates at 4
percentage points above the central bank rate. Lawmakers did, however,
remove the minimum deposit rate of 70 percent of the central bank rate.

 

The IMF has demanded the cap be repealed as a condition for Kenya to access
its balance of payments support.

 

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.

 

Jibran Qureishi, an economist for East Africa at Stanbic Bank, said the
decision threw open the question of how discussion with the IMF would now
proceed.

 

“On the IMF, with the VAT on fuel being postponed, with most of the tax
measures not approved, this means the fiscal deficit is likely to remain
higher than projected,” Qureishi said. “The odds of the (IMF) facility being
retained are quite slim, but we have to see what will happen.”

 

The legislation, known as the Finance Bill 2018, still needs to secure
presidential assent before its proposal can come into effect.

 

It was not clear what line Kenyatta would now take.

 

“The president will have to crack the whip and hard because notwithstanding
some bravado chatter, it would not make sense to lose the support of the IMF
at a time when the markets are so skittish and our debt-to-GDP ratio is
nudging 60 percent,” Satchu said.

 

Kenya’s legislature also rejected a “Robin Hood” tax of 0.05 percent on bank
transfers of over 500,000 shillings ($5,000) during Thursday’s session and
an employee contribution scheme towards the national housing development
fund.

 

The rejected tax hikes were designed to fund a range of government
development goals including universal healthcare and affordable housing.

 

 

 

IMF supports South African land reform provided it's "rules based"

PRETORIA (Reuters) - The International Monetary Fund gave its full backing
to South Africa’s land reform plan on Thursday, as long as the highly
contentious process is transparent and based on the constitution.

 

The Fund’s senior resident representative in South Africa Montfort Mlachila
told Reuters that the reform must not damage farm output to ensure South
Africans continue to have reliable food supplies.

 

President Cyril Ramaphosa has said the ruling African National Congress
(ANC) plans to change the constitution to allow the expropriation of land
without compensation, as most of it is still owned by members of the white
minority.

 

“We are in full support of the need to undertake land reforms in order to
address the issues of inequality,” Mlachila said in an interview.

 

Nearly a quarter century after the end of apartheid, the country remains
racially divided and unequal, and the ANC plan aims to improve the lives of
the many poor black South Africans.

 

The debate erupted again last week when U.S. President Donald Trump said he
had asked Secretary of State Mike Pompeo to study South African “land and
farm seizures” and the “killing of farmers”. South Africa accused Trump of
stoking racial divisions.

 

Speaking at his office in Pretoria, Mlachila said the IMF was not an expert
on land reform. However, he said: “There is need to have a transparent,
rules-based, and constitutional process that leads to desirable outcomes. It
is particularly important not to undermine agricultural production and food
security.”

 

Ramaphosa has said any measures would not hit economic growth or food
security. No land has been “seized” since the ANC resolved to expropriate
land without compensation at a party conference in December.

 

British Prime Minister Theresa May has also supported the programme,
provided it is carried out legally.

 

Commenting on the South African economy, Mlachila said the IMF was unlikely
to revise its growth forecast upwards. Last month the Fund kept its
prediction of 2018 growth at 1.5 percent.

 

“Given the weaknesses in growth indicators in the second quarter of 2018, I
don’t see us revising upwards,” he said, although he added that it was too
early to say for definite.

 

Ramaphosa’s election in February initially buoyed investors’ confidence but
poor economic data, including the worst quarterly GDP contraction in nine
years in the first quarter, have eroded some of the enthusiasm.

 

Mlachila said South Africa was not expected to seek IMF financial support
due to its deep domestic financial markets and access to international
markets for financing its balance of payments and fiscal deficits.

 

“We really don’t see much need for recourse to financing from the IMF,”
Mlachila said.

 

 

S&P says unlikely to lower South Africa's ratings like Turkey

JOHANNESBURG (Reuters) - S&P Global Ratings said in a report published on
Thursday that South Africa’s sovereign credit ratings were unlikely to be
downgraded deeper into “junk” territory, after Turkey’s ratings suffered
that fate earlier this month.

 

S&P, one of two major ratings agencies to rate South Africa’s
foreign-currency debt below investment grade, added in the report that the
country’s external metrics were solid and that its monetary flexibility was
a credit strength.

 

The agency downgraded Turkey’s sovereign rating deeper into “junk” status on
Aug. 17 in the wake of a steep slide in the lira, which also rocked emerging
market currencies like the rand.

 

“The main reason for Turkey’s downgrade was our expectation that the extreme
volatility of the Turkish lira and the resulting projected sharp balance of
payments adjustment will undermine Turkey’s economy,” S&P said in the
report.

 

“By contrast, we have a stable outlook on South Africa, reflecting a
potential modest pick-up in economic growth, steady public debt dynamics,
and our expectation that the government will gradually implement economic
and social reforms.”

 

S&P is next scheduled to review South Africa’s sovereign ratings in
November.

 

In May, S&P affirmed South Africa’s foreign-currency debt at ‘BB’.

 

 

 

Nigeria's Senate leader says economy broken, plans to challenge president in
vote

ABUJA (Reuters) - Nigeria’s Senate leader, Bukola Saraki, said on Thursday
he would stand to become the main opposition candidate in 2019’s
presidential elections, making him the highest profile challenger to
incumbent Muhammadu Buhari to date.

 

Saraki, who trained as a medical doctor, said the economy of Africa’s
largest oil producer was “broken and in need of urgent revival”.

 

He will now vie with other candidates, including former vice president Atiku
Abubakar, to represent the People’s Democratic Party (PDP) and a group of
other opposition movements, who agreed in July to field a joint contender.

 

“GDP growth rate has declined. Diversification remains an illusion.
Unemployment is at an all-time high. Businesses are shutting down. Jobs are
being lost in record numbers, and the capital needed to jumpstart our
economy is going elsewhere,” Saraki said at a political event in the capital
Abuja.

 

Saraki, the Senate President, quit Buhari’s All Progressive Congress in July
to rejoin the PDP amid other signs of splintering in the ruling party.

 

The former state governor is currently Nigeria’s third most senior political
figure, after the president and the vice president.

 

Fighting within the APC coalition, which united to unseat Buhari’s
predecessor rather than because of ideological unity, has mounted for years
in a struggle for power and influence between those loyal to the head of
state and others who say they have been targeted in a witch-hunt by the
presidency.

 

Divisions emerged publicly in the weeks following the APC’s conference in
June where new party leaders were elected. Others saw their hopes of greater
powers within the party dashed just months before the presidential and
legislative elections.

 

 

 

PM May says Britain committed to free trade with Kenya after Brexit

NAIROBI (Reuters) - Britain is committed to free trade with Kenya after it
leaves the European Union, British Prime Minister Theresa May said on
Thursday on a visit to Nairobi as her government plays up increased trade
with non-EU nations as a Brexit selling point.

 

May was speaking on the third stop of a trip to Africa during which she has
said she wants Britain to become the biggest investor on the continent out
of the world’s richest nations. [L8N1VJ180]

 

“As Britain prepares to leave the European Union we are committed to a
smooth transition that ensures continuity in our trading relationship with
Kenya, ensuring Kenya retains its duty free quota free access to the UK
market,” May said.

 

The EU is currently Britain’s biggest trading partner. Sceptics say closer
ties and more trade with Africa will do little to offset the economic impact
of Brexit.

 

Total trade with Nigeria, South Africa, and Kenya, the three nations on her
tour this week, amounted to just over 13 billion pounds in 2016, official
British figures show, compared with 554 billion pounds of trade with the EU
that year.

 

The prime minister has used her first official visit to the region of more
than one billion people to stress that Britain’s relationship with former
colonies, including Kenya and other African nations, is increasingly focused
on private investment, not on aid.

 

In Nigeria, Africa’s biggest economy and most populous nation, May also
promised closer commercial ties and promoted the longstanding presence of
British companies in the country.

 

Analysts have said that as Britain confronts the full impact of Brexit,
African states will enter discussions from a position of strength, given the
many other options they have for trade and military partners, from Russia
and China to the Gulf and Turkey.

 

So far Britain’s record in using aid money on private investment in Africa
is mixed. The government’s private equity arm, the CDC group, invested $140
million in ARM Cement, a Kenyan firm, two years ago that was put in
administration this month. [L8N1VK4FZ]

 

Britain is Kenya’s largest trading partner and a major market for its
exports of cut flowers. The rapidly expanding agriculture sector is Kenya’s
biggest foreign exchange earner and a big source of jobs.

 

Kenyan President Uhuru Kenyatta, speaking alongside May at a news
conference, said he welcomed her assurance that Kenyan duty free exports
would continue after Brexit and said Kenya will be pressing for an increase
in exports.

 

British companies are also promoting trade opportunities outside the EU
after Brexit.

 

“The EU is an important market, it’s established and mature, but our great
markets in the future will be in Asia, Africa, and South America,” said
Karen Betts, chief executive of the Scotch Whisky Association, who is
travelling with May. She said the EU makes up 30 percent of Scotch whisky
exports.

 

FIGHTING CORRUPTION, TERRORISM

Kenyatta said two agreements signed on Thursday — one to enhance military
cooperation, the other for Britain to return assets and proceeds of
corruption to Kenya — indicated the close ties between the two countries.

 

Kenyan troops are part of a 22,000-strong African Union peacekeeping force
fighting in neighbouring Somalia against al-Shabaab Islamist militants. AU
troops landed in Mogadishu more than a decade ago and Somali forces are
supposed to eventually take over their duties.

 

May said she was glad to hear Kenyatta call for a transition from
peacekeepers to stronger Somali security forces.

 

Kenyatta, who was re-elected for a second term after a bloody and prolonged
elections season, said his government’s fight against graft is important for
national unity and his legacy.

 

Corruption drains billions of dollars from the state every year in Kenya,
and foreign businessmen complain it is hard to get things done without
paying bribes.

 

May also announced Britain will set up a cyber centre in Nairobi to help
authorities fight online child sex abuse by tracking the sharing of abusive
images on the internet.

 

“Already, British terrorists and child abusers are in UK jails because of
our cooperation,” she said.

 

Margaret Thatcher was the last British prime minister to visit Kenya, in
1988.

 

 

Nigeria stuns MTN with $8.1 billion demand, shares plunge

JOHANNESBURG (Reuters) - MTN Group shares plunged as much as 25 percent to a
nine year low on Thursday, a day after Nigeria ordered the telecoms group’s
Lagos-based business to hand over $8.1 billion that the authorities say was
illegally sent abroad.

 

The demand by Nigeria’s central bank is the latest setback for MTN in
Nigeria, the South African group’s most lucrative but increasingly also its
most problematic market.

 

It comes two years after MTN, Africa’s biggest telecoms company, agreed to
pay more than $1 billion to end a dispute in Nigeria over unregistered SIM
cards.

 

The latest case underlines the risks of MTN’s strategy to operate in
emerging markets, a move that has made it one of post-apartheid South
Africa’s biggest commercial success stories, with operations in more than 20
countries.

 

Nigeria’s central bank said the funds had been illegally moved abroad
because the company’s bankers had failed to verify MTN had met all the
foreign exchange regulations.

 

MTN denies the allegations.

 

MTN shares closed down 19.41 percent at 86.50 rand, after touching 80.61
rand, a level last seen in 2009.

 

The money is more than half of MTN’s market capitalisation, and analysts
said the demand risked further undermining Nigeria’s efforts to shake off an
image as a risky frontier market for international investors.

 

The crux of the allegation is that MTN used improperly issued certificates
to convert shareholders loans in its Nigerian unit to preference shares in
2007.

 

As a result, dividends paid by MTN Nigeria to the parent company between
2007 and 2015 - amounting to $8.1 billion - are deemed illegal, and should
be returned, Nigeria alleges.

 

“No dividends have been declared or paid by MTN Nigeria other than pursuant
to certificates of capital importation issued by our bankers and with the
approval of the CBN (Central Bank of Nigeria) as required by law,” MTN said
in a statement.

 

FRONTIER MARKET

The demand from the central bank has raised worries about doing business in
Nigeria, whose finances have been hit by a weak economy and volatile oil
prices.

 

“One wonders why this wasn’t brought to MTN’s attention years ago. You just
can’t do business in an environment where these type of things are going to
happen,” said Greg Davies of boutique investment house Cratos Capital in
Johannesburg.

 

The demand also comes ahead of next year’s presidential election in Nigeria
in which President Muhammadu Buhari, who swept to power on promises of
tougher regulations, is seeking re-election.

 

“This smells like a central bank that is not independent from a government
that has big fiscal issues,” said Byron Lotter, an analyst at Vestact in
Johannesburg. “This is another huge step backwards for Nigeria.”

 

Nigeria’s central bank also fined four banks, including Standard Bank’s unit
in Nigeria, Stanbic IBTC, for their role in moving the money out of Africa’s
biggest economy.

 

On Wednesday, the central bank said it had fined Stanbic IBTC 1.8 billion
naira ($6 million) for violations of foreign exchange transactions rules and
ordered that it return $2.6 billion it repatriated on behalf of clients,
including MTN.

 

Standard Bank said in a statement its unit was “not a beneficiary of any of
the remittances made on behalf of clients and denies any imputation of
malfeasance.”

 

Last November, Nigeria’s Senate approved a report largely exonerating MTN
following an investigation, after the business was accused of illegally
repatriating $14 billion to its parent company.

 

The chief executive of Nigeria’s Access Bank said on Thursday Nigerian banks
would meet soon to discuss MTN’s $8.1 billion payment and “look for a way to
engage government and regulators to resolve the issue”.

 

Separately, MTN missed its initial public offering target at its Ghana unit,
managing to only raise 1.14 billion cedis ($238.5 million) instead of 3.47
billion cedis.

 

“The timing is peculiar and bad as the Ghana IPO didn’t raise as much money
as they could have and this Nigerian saga may have spooked investors,”
Cratos Capital’s Davies said.

 

($1 = 14.6167 rand)

 

($1 = 305.7000 naira)

 

 

 

South Africa's Old Mutual H1 profit flat; declares dividend

JOHANNESBURG (Reuters) - Old Mutual reported no growth in half-year profit
on Friday as higher taxes and unemployment hit consumer spending, but the
No.2 insurer in South Africa declared an interim dividend of 45 cents per
share and a special dividend of 100 cents per share.

 

Adjusted headline earnings per share, the widely watched profit gauge in
South Africa that strips out certain one-off items, came in at 122.3 cents,
unchanged from the prior year.

 

Old Mutual, alongside rivals such Sanlam, Liberty Holdings and Discovery
Ltd, have witnessed a profit squeeze in recent years as cash-strapped
consumers put off buying insurance or cancelled their existing policies.

 

The company largely wrapped up a radical break up aimed at disentagling its
costly conglemerate structure with a primary listing in Johannesburg in
June.

 

Old Mutual, which traces its roots back to the mid-19th century as South
Africa’s first mutual aid society with 166 members, said it was on track to
spin off part of its 53 percent interest in South Africa’s fourth largest
lender, Nedbank, later this year.

 

 

 

Trump threatens to pull US out of World Trade Organization

President Donald Trump has threatened to withdraw the US from the World
Trade Organization (WTO), claiming it treats the country unfairly.

 

"If they don't shape up, I would withdraw from the WTO," Mr Trump said in an
interview with Bloomberg News.

 

The WTO was established to provide rules for global trade and resolve
disputes between countries.

 

Mr Trump says the body too often rules against the US, although he concedes
it has won some recent judgments.

 

He claimed on Fox News earlier this year that the WTO was set up "to benefit
everybody but us", adding: "We lose the lawsuits, almost all of the lawsuits
in the WTO."

 

However, some analysis shows the US wins about 90% when it is the
complainant and loses about the same percentage when it is complained
against.

 

Mr Trump's warning about a possible US pull-out from the organisation
highlights the conflict between the president's protectionist trade policies
and the open trade system that the WTO oversees.

 

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

Is Trump the WTO's biggest threat?

Is Trump right about trade?

Washington has also recently been blocking the election of new judges to the
WTO's dispute settlement system, which could potentially paralyse its
ability to issue judgments.

 

US Trade Representative Robert Lighthizer has also accused the WTO of
interfering with US sovereignty.

 

What's Trump's issue with the WTO?

The US president has been sounding off about unfair trade since even before
he became president.

 

Mr Trump said on Thursday that the 1994 agreement to establish the WTO "was
the single worst trade deal ever made".

 

The US has been embroiled in a tit-for-tat trade battle on several fronts in
recent months.

 

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

 

Mr Trump has introduced tariffs on a number of goods imported into the US.

 

Early victims of Trump's trade war

What is a trade war and should I worry?

Six ways China could retaliate in a trade war

A third round of tariffs on $200bn (£154bn) of Chinese goods could come as
soon as a public-comment period concludes next week, according to a
Bloomberg report citing various sources.

 

Asked to confirm this during the Bloomberg interview, President Trump said
that it was "not totally wrong".

 

China has responded to US tariffs by imposing retaliatory taxes on the same
value of US products and has filed complaints against the tariffs at the
WTO.

 

China's commerce ministry has said it "clearly suspects" the US of violating
WTO rules.

 

An initial complaint at the WTO was filed by China in July after Mr Trump
imposed his first round of tariffs.

 

The WTO is at the heart of the system of rules for international trade.

 

It is the forum for sorting disputes between countries about breaches of
global trade rules and for negotiating new trade liberalisation.

 

What about other trade deals?

 

Mr Trump has not been a fan of multilateral trade agreements.

 

In a 2016 presidential debate with Democratic rival Hillary Clinton, Mr
Trump described the North American Free Trade Agreement (Nafta) with Mexico
and Canada as "the worst trade deal maybe ever signed anywhere" and a
"killer" of US jobs.

 

Once in office he said he wanted to renegotiate - not scrap - the accord,
triggering a year of talks.

 

On Monday, Mr Trump announced that the US and Mexico had agreed to revamp
Nafta, calling it a "really good deal" that was "much more fair" for both
countries.

 

Canada is yet to agree to the new terms.

 

Clock is ticking for Canada in US trade negotiations

What is Nafta?

What is the Trans-Pacific Partnership?

On Thursday, Mr Lighthizer held talks in Washington with Canadian Foreign
Minister Chrystia Freeland aimed at reaching a new deal.

 

Following four separate meetings, which continued late into the night, Ms
Freeland told reporters that a deal could not be reached, adding that talks
would resume on Friday.

 

Mr Trump has set Friday as the deadline for Canada to sign an agreement, and
has threatened to tax the country's automotive sector or cut it out
entirely.

 

Also during his election campaign Mr Trump railed against the Trans-Pacific
Partnership (TPP), a 12-nation trade deal that was a linchpin of former
President Barack Obama's Asia policy.

 

Mr Trump said the deal was a "potential disaster for our country".

 

One of his first acts as president was to withdraw the US from the TTP,
although he has since said he might consider rejoining if the terms were
"substantially better".--BBC

 

 

 

Ad giant WPP 'to name Mark Read as CEO'

Advertising giant WPP is to name Mark Read as its next chief executive,
according to reports.

 

Currently co-chief operating officer, he will replace Sir Martin Sorrell who
quit the firm in April following a scandal.

 

Sir Martin, who founded the firm in 1986, had faced a complaint of personal
misconduct which he denied.

 

WPP declined to comment on the appointment but did say an announcement would
be made in September.

 

"We will not be drawn on the timing of the naming of our next chief
executive, nor on who that may be," said a spokesman.

 

Ad chief Sir Martin Sorrell steps down

WPP must 'make Sorrell probe public'

WPP investors revolt over Sorrell scandal

"As soon as there is an agreement with a candidate we will be obliged to
make an announcement to the stock exchange."

 

The appointment could be announced as early as next Tuesday when WPP reports
its interim results, the Financial Times reported quoting multiple sources.

 

Mr Read has been running WPP on an interim basis since Sir Martin resigned
following a probe into alleged misuse of company money.

 

Within weeks of his departure, Mr Read launched an internal review of
company conduct rules.

 

He will take up his role at a difficult time for WPP, which issued a number
of warnings about growth last year and reported its worst financial year
since 2009.

 

The firm faces intense competition from the likes of Google and Facebook as
more advertising moves online.--BBC

 

 

 

Coca-Cola to buy Costa chain for £3.9bn

Coca-Cola is to buy the Costa coffee chain from owner Whitbread in a deal
worth £3.9bn.

 

Whitbread had intended to spin off the chain as a separate firm, but said a
straight sale was more profitable.

 

Chief executive Alison Brittain said Whitbread would now focus on its
Premier Inn business in the UK and Germany.

 

Whitbread bought Costa, which is now the UK's biggest coffee chain, for just
£19m in 1995.

 

At the time, it had just 39 outlets. It now has more than 2,400 UK coffee
shops, as well as some 1,400 outlets in 31 overseas markets. Costa Express
has 8,237 vending machines worldwide.

 

Whitbread shares rose more than 17% in early Friday trading.

 

For years, demerger was a dirty word at Whitbread. When asked, as they often
were, about the logic of having a hotel chain and a coffee chain in the same
company, executives would extol the benefits of having two leisure brands
under one roof.

 

Shareholders were always less convinced, but were happy to go along with the
idea while Whitbread grew its revenue, profits and share price at a steady
clip over the last decade.

 

All that changed with the arrival of Alison Brittain as chief executive -
and the appearance on the shareholder register of Elliott Management, an
aggressive, deep-pocketed US hedge fund with a track record of shaking up
big companies. It pushed hard for a demerger, and Ms Brittain, who judged
that Costa and Premier had reached sufficient scale to stand on their own
feet, opened the door.

 

The plan was that Costa would be spun off at some time in the next two
years, but Coca-Cola pre-empted that with a knockout offer.

 

While this is a landmark deal for Whitbread, it is also a significant move
for Coca-Cola, taking it into hot beverages for the first time and, it
hopes, providing the growth for which its investors have been crying out.

 

Speaking on the BBC's Today programme, Ms Brittain explained that Coca-Cola
wanted to buy Costa because "they want the coffee product, they have no
coffee in their range".

 

She said the money from the sale would be used to expand the Premier Inn
chain, return some cash to shareholders, pay down debt and boost the pension
fund.

 

Describing the sale as a "win-win" for everyone, she said the price paid by
Coca-Cola was far higher than if Costa had been demerged into a stand-alone
company on the stock market.

 

She said she thought the beverage giant would use Costa to create "ready to
drink, cold brew coffees".

 

"You could see Costa absolutely everywhere, in vending machines, hotels,
restaurants, pubs, cafes - in all the places you see Coke today," she added.

 

 

Whitbread announced earlier this year that it was planning to spin off
Costa.

 

Whitbread had been under pressure to consider a break-up of the business
after hedge fund Elliott Advisors became the company's largest shareholder.

 

Elliott reportedly put forward a demerger plan after building up a 6% stake
in the firm.

 

As well as being the largest UK coffee chain, Costa is also the world's
second largest. It is looking to triple its presence in China, where it is
second to Starbucks.

 

>From beer to beds: Whitbread's long history

 

1742 - Samuel Whitbread forms partnership with Godfrey and Thomas Shewell

 

1750 - Whitbread creates UK's first mass-production brewery in London

 

1868 - Begins producing beer in bottles

 

1968 - Starts brewing Heineken under licence

 

1974 - Opens first Beefeater steakhouse

 

1990s - Buys David Lloyd Leisure, Marriott Hotels, TGI Fridays, Pizza Hut,
Premier Lodge

 

1995 - Buys Costa Coffee from Sergio and Bruno Costa for £19m when it had 39
outlets

 

2000 - Sells brewing business to focus on Premier Inn and Costa

 

Nicholas Hyett, equity analyst at Hargreaves Lansdown, described the deal as
"a bitter-sweet moment for Whitbread investors".

 

"On the one hand, £3.9bn is an undeniably rich valuation and likely far
better than Costa could achieve as an independently listed company, valuing
its earnings higher than those of the mighty Starbucks," he said.

 

"On the other, Costa has long been the jewel in Whitbread's crown and some
will be sad to see it go at any price, especially given the growth potential
in China and elsewhere."

 

Whitbread also owns restaurants Beefeater and Brewers Fayre. Over the years,
it has owned well-known brands such as TGI Fridays, Pizza Hut and Marriott
Hotels.

 

The deal is subject to the agreement of Whitbread's shareholders and various
other approvals, including from anti-trust regulators.

 

It is expected to complete in the first half of next year.--BBC

 

 

 

Trump calls for CNN boss Jeff Zucker to be fired

US President Donald Trump has attacked CNN's president Jeff Zucker on
Twitter, saying that he should be fired.

 

President Trump said CNN's "hatred and extreme bias" towards him made the
media organisation "unable to function".

 

"Little Jeff Z has done a terrible job, his ratings suck, & AT&T should fire
him to save credibility!" he tweeted.

 

Mr Zucker is currently on six weeks' leave from CNN to recover from having
heart surgery.

 

AT&T said it had no comment.

 

CNN declined to comment on the latest tweets, but directed the BBC to its
response on Twitter to President Trump's tweets on Wednesday.

 

The broadcaster also pointed out that its ratings this month - 707,000
viewers - were its second highest ever achieved for the month of August.

 

Further, CNN highlighted the fact that comScore's Multi-Platform Media
Metrix ranked CNN as number one in multiplatform visitors, mobile visitors,
video starts, millennial reach and social following.

 

President Trump has long complained about CNN, maintaining that it is
dishonest and focused on its own agenda.

 

CNN reporter Kaitlan Collins was barred from a White House event in July
after asking questions about Russian President Vladimir Putin and Mr Trump's
ex-lawyer, Michael Cohen.

 

Google says Trump's bias claims are 'not true'

Kanye finally answers Trump question

Trump hails 'really good' Mexico trade deal

In a second tweet on Thursday, President Trump also criticised NBC News.

 

"What's going on at CNN is happening, to different degrees, at other
networks - with NBC News being the worst," he said.

 

He added that it was "good news" that NBC News chairman Andy Lack could be
facing dismissal over his handling of a series of sexual harassment
allegations against high-profile news presenters, as well as the hiring of
former Fox News anchor Megyn Kelly.

 

Over the last few months, President Trump has also targeted the Washington
Post, which is owned by Amazon founder Jeff Bezos.

 

In March, he accused the internet giant of ripping off the US Postal
Service.

 

In June, he said that the Washington Post was "fake news", and was bought by
Amazon in a bid to help it avoid paying internet taxes.--BBC

 

 

 

Plastic bags: Charge could rise to 10p and be extended to smaller shops

The plastic bag fee in England could rise to 10p - with all shops having to
charge, regardless of how big they are.

 

Since October 2015, customers have had to pay at least 5p for each
single-use bag - with all retailers employing more than 250 people made to
take part in the scheme.

 

But now it might be extended to all shops with the charge set at 10p, Prime
Minister Theresa May has announced.

 

The change is part of the government's plan to tackle plastic pollution.

 

A consultation will be launched later this year, the government said.

 

Currently, it is estimated that more than three billion bags are supplied by
small and medium companies every year.

 

In Scotland, Wales and Northern Ireland, smaller retailers already charge a
minimum of 5p for plastic bags.

 

Reality Check: Where does the plastic bag charge go?

Could this biodegradable bag cut pollution?

Seven charts that sum up the plastic problem

Mrs May said: "We have taken huge strides to improve the environment, and
the charge on plastic bags in supermarkets and big retailers has
demonstrated the difference we can achieve by making small changes to our
everyday habits.

 

"I want to leave a greener, healthier environment for future generations,
but with plastic in the sea still set to treble we know we need to do more
to better protect our oceans and eliminate this harmful waste."

 

Campaigners say single use plastic bags take 1,000 years to break down and
can be extremely damaging to marine wildlife.

 

What's happened since the charge was introduced?

The number of single-use plastic carrier bags handed out by supermarkets in
England has drastically decreased.

 

In 2014 - before the charge was introduced - the seven main retailers (Asda,
Marks & Spencer, Morrisons, Sainsbury's, the Co-Operative Group, Tesco and
Waitrose) handed out the equivalent of 140 plastic bags per member of the
population.

 

In 2016-17, that fell to 24 bags, falling further to 19 bags in 2017-18.

 

Since the fee was introduced, the number of disposable carrier bags given
out by the seven biggest supermarket chains has decreased by 86% overall,
according to official figures.

 

In total, 13 billion plastic bags have been taken out of circulation in the
past two years.

 

Want to find out more about plastics?

 

What happens to the money raised?

The charge is not a tax, so the money does not go to the government. While
retailers are given the choice on what to do with the money, they are
expected to give it to good causes.

 

Between April 2016 and 2017, 4.3p was donated to good causes for every 5p
bag sold, according to the two-thirds of retailers who voluntarily gave
information about where the money went.

 

These retailers donated more than £58.5m to good causes in total in that
time.

 

What could change now?

Up until now, it's just been the biggest retailers that have had to charge
for single-use plastic bags in England. Smaller businesses have been allowed
to charge if they want to, with the Association of Convenience Stores
encouraging its members to introduce voluntary charging schemes where
practical.

 

What are people saying about it?

Many of the seven major supermarkets have already stopped selling single-use
carrier bags in their stores. Sainsbury's 5p bags are thicker and stronger,
so they are not considered to be single use, while Tesco only sells 10p bags
for life.

 

Asda has said it is phasing out single-use plastic bags by the end of the
year, and Morrisons started doing this in March.

 

James Lowman, chief executive of The Association of Convenience Stores, said
it had "long campaigned for compulsory plastic bag charging to be extended
to all businesses just as it is in Wales and Scotland".

 

About half of convenience stores already charged for bags voluntarily and
most supported a universal charge, he said.

 

The British Retail Consortium said it was right for the levy to be mandatory
and consistent for all shops but it questioned whether the rise to 10p would
help.

 

"We think any further reduction will be marginal as there has been such a
major reduction already," a spokesman said.

 

Environmental campaign group A Plastic Planet said increasing pressure on
consumers was the wrong approach.

 

Founder Sian Sutherland said: "This levy increase unfairly targets consumers
while major brands continue to force plastic upon them. The government needs
to shift its focus on to them if it is to become a world leader in tackling
the plastic problem."

 

Emma Priestland, plastic pollution campaigner at Friends of the Earth, said
increasing charges had proved effective in the Irish Republic (where the
levy is 22 cents per bag), but added that the government also needed to take
action against other sources of plastic, such as coffee cups and straws.

 

So what does this mean?

Analysis by David Shukman, BBC News science editor

 

The past few years have seen a blizzard of government announcements about
plastic pollution - but it's always worth checking the small print.

 

The fanfare may be about new measures that are actually coming into force -
such as the 5p charge on carrier bags in supermarkets which has genuinely
been a major success. Or it could herald the launch of a consultation about
whether to introduce new measures - like the plan for a deposit return
scheme for plastic bottles.

 

Or the announcement may simply be declaring that there will in future be a
consultation - as with the proposal for a doubling of the charge on bags to
10p and extending it to small stores. Thursday's press release says the PM
"confirms" the consultation but adds that it won't be launched until later
this year. And if it all happens, will it be worth it?

 

The 5p charge in the "big seven" supermarkets has led to 13 billion fewer
bags being in circulation, the kind of dramatic change seen in the Irish
Republic which pioneered action in this area. Extending the charge to
smaller shops could cut a further three billion - a welcome step but never
massive.

 

And campaigners point out that other countries are being far more radical
about all forms of plastic waste. Kenya, where the announcement was made, is
leading the world with jail sentences for anyone caught making or importing
plastic bags; the time for Kenyan consultations on plastic has long past.

 

What else is the government doing?

The government has previously announced a ban on microbeads.

 

It has already said it wants to ban the sale of plastic straws, stirrers and
cotton buds. There are plans too for a deposit return scheme for drinks
bottles and cans, to encourage recycling.--BBC

 

 

 

Argentina raises rates as peso plummets

The value of Argentina's peso continued to fall on Thursday, plunging by
more than 13% after a 7% drop a day earlier.

 

The decline came despite the central bank's effort to stabilise the currency
by raising a key interest rate to 60%.

 

The bank said Thursday's rate hike, from 45% to 60%, was a "response to the
foreign exchange rate situation and the risk of greater inflation".

 

It had already increased interest rates four times since April, most
recently on 13 August.

 

The rate rises were prompted by the sudden weakening of the peso in April as
a drought hurt farm exports, energy prices climbed and a stronger dollar led
investors to pull funds from emerging markets.

 

The situation prompted President Mauricio Macri to seek funds from the
International Monetary Fund in May.

 

At the time, he cast the request as a precautionary measure, but the
economic turmoil has continued.

 

Argentina asks IMF to release $50bn loan as crisis worsens

Why confidence in Argentina's economy is dwindling

The peso has now fallen by more than 50% against the dollar this year.

 

The inflation rate is running at more than 30%, in part due to the
government raising prices on gas and electricity as it tries to repair its
finances.

 

The changes have made everyday life more expensive, causing families to
scale back spending and contributing to a 6.7% slowdown in the economy in
June.

 

On Wednesday Mr Macri asked the IMF to speed up its $50bn bailout and the
fund agreed to revise the original plan, citing "more adverse" market
conditions.

 

Market doubts

 

Interest rates of 40% already seemed like a bold idea back in May, when
Argentina tried to stop a first run on its currency.

 

Taking it now to 60% seems almost surreal.

 

Getting 60% returns on loans seems like a fantastic business opportunity in
any part of the world.

 

But not if investors believe the peso won't be worth much a year from now,
which is what is triggering the current devaluation.

 

Ultimately there is a lack of confidence in the government's ability to do
the reforms it promised the IMF.

 

The IMF's director general is still sticking to Mr. Macri's plan. But
markets are not going along with them.

 

The move heightened investor fears about the country's economy.

 

Argentina is in the middle of a pro-market economic reform programme, as Mr
Macri seeks to reverse years of protectionism and high government spending
under his predecessor, Cristina Fernandez de Kirchner.

 

The IMF said last month it expects Argentina's economy to stabilise by the
end of the year and a gradual recovery to begin in 2019.

 

But Mr Macri faces rising political opposition due to concerns about
austerity measures.

 

His turn to the IMF was also unexpected as the organisation remains
unpopular in Argentina due to the economic problems associated with earlier
assistance.--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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