Major International Business Headlines Brief::: 05 December 2018

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Major International Business Headlines Brief::: 05 December 2018

 


 

 


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*  South Africa emerges from recession as farming, manufacturing jump

*  South Africa's gross spending up 2.3 percent in third quarter

*  Kenya Treasury sees 2019/20 budget deficit at 4.7 pct of GDP

*  Kenya starts construction of 83 MW geothermal plant

*  Kenya to roll over $760 mln syndicated loan this fiscal year

*  Digital newcomers out to disrupt South African banking

*  Nigerian court adjourns case between MTN and central bank to Dec. 12:
judge

*  Congo state miner in production-sharing deal with Chinese firm

*  Equinor set to start talks with Tanzania over LNG project

*  China-US trade: China vows speedy action on trade commitments

*  Chanel ends use of exotic skins in its fashion range

*  Takeda gets shareholder approval for £46bn Shire takeover

*  Wall Street shares dive amid growth fears

*  Mervyn King: Brexit deal like Nazi appeasement

*  Trump's China car tariffs claim sows confusion

*  Brexit: Food prices could rise 10%, says Mark Carney

 

 

 

 

 


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South Africa emerges from recession as farming, manufacturing jump

PRETORIA (Reuters) - Farms and factories dragged South Africa out of its
first recession in almost a decade, data showed on Tuesday, as the economy
grew by more than expected in the third quarter.

 

The positive data is a boost for President Cyril Ramaphosa, who has pledged
to re-start growth after a decade of stagnation under his predecessor, Jacob
Zuma.

 

South Africa’s economy expanded 2.2 percent in the third quarter from the
second, snapping out of recession after a revised 0.4 percent contraction in
the previous quarter, data from Statistics South Africa showed.

 

The rand added to early gains, advancing to a session-best 13.5600 per
dollar at 0935 GMT from an open at 13.6150.

 

The economic expansion will also ease fears of credit downgrades deeper into
non-investment territory following warnings by agencies about the economy.
All of the top three ratings firms have cited weak growth as a major threat.

 

Economists polled by Reuters had predicted a 1.6 percent expansion.

 

Manufacturing expanded 7.5 percent, agriculture grew 6.5 percent. Mining
contracted 8.8 percent, however.

 

Last month, the central bank cut its 2018 growth forecast to 0.6 percent, a
touch lower than Treasury’s 0.7 percent forecast in the October budget.

 

Analysts said they expected the recovery to continue into 2019, but that
recent electricity outages by ailing power utility Eskom posed a threat.

 

Eskom implemented a sixth day of controlled power cuts on Tuesday, putting
more strain on the economy and raising fears of the blackouts a decade ago
that reduced GDP by about 1 percent.

 

“In all, the data confirms our view that the South African economy is
recovering,” said chief Africa economist at Standard Charted Razia Khan.
“Renewed load shedding is a source of downside risk.”

 

An analyst at NKC African Economics Elize Kruger said: “The result was in
line with our forecast of 2 percent quarter-on- quarter, which is good news
and also means the 0.7 percent growth forecast for full-year is still on
track.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's gross spending up 2.3 percent in third quarter

PRETORIA (Reuters) - South Africa’s real gross domestic expenditure expanded
by 2.3 percent in the third quarter of 2018 after contracting by 0.7 percent
in the second quarter, the statistics agency said on Tuesday.

 

Household expenditure increased by 1.6 percent in the third three months of
the year after contracting by 1.1 percent in the previous three months.

 

Government expenditure was up 2.2 percent after growing by 0.8 percent in
the previous quarter.

 

Gross fixed capital formation contracted by 5.1 percent from a 0.7 percent
contraction previously.

 

 

 

Kenya Treasury sees 2019/20 budget deficit at 4.7 pct of GDP

NAIROBI (Reuters) - Kenya’s 2019/20 (July-June) budget deficit is expected
to fall to 4.7 percent of the gross domestic product from a revised 5.8
percent this fiscal year, a senior Treasury official said on Tuesday.

 

The East African nation’s government has been for ramping up borrowing and
spending in recent years, leaving it with a fiscal deficit that peaked at 7
percent in the fiscal year that ended last June.

 

Kamau Thugge, the principal secretary at the Treasury, said at a public
hearing on the country’s budget that the deficit was likely to drop to 2.8
percent of GDP by the 2022/23 fiscal year.

 

He said the government was likely to spend 2.81 trillion shillings ($27.40
billion) in the next fiscal year, up from a revised 2.47 trillion shillings
in this financial year.

 

($1 = 102.5500 Kenyan shillings)

 

 

 

Kenya starts construction of 83 MW geothermal plant

NAIROBI (Reuters) - Kenya has started building a geothermal power plant to
add 83 megawatts (MW) of capacity to the national grid, the state-owned
power generation utility said on Tuesday. 

 

Geothermal power is Kenya’s second largest source of electricity after
hydroelectric power. The country has total installed power capacity of about
2,336 MW.

 

President Uhuru Kenyatta attended the groundbreaking for the plant at
Olkaria, about 112 km (62 miles) northwest of the capital Nairobi.

 

The plant, owned by state-run Kenya Electricity Generating Company (KenGen),
is being built by Japan’s Marubeni Corporation and is expected to be
completed in 2021. 

 

The government estimates demand for electricity will grow at 9 percent a
year until 2021 and then ease back to 7 percent.

 

KenGen plans to add 1,745 megawatts worth of geothermal power by 2025, part
of a government push to end generation from fossil fuels and also to power
an industrialisation drive aimed at providing jobs for its youthful
population.

 

 

 

Kenya to roll over $760 mln syndicated loan this fiscal year

NAIROBI (Reuters) - Kenya is in talks with lenders to roll over a $760 mln
syndicated loan this fiscal year and lengthen its maturity in order to make
debt repayments more manageable, a senior Treasury official said on Tuesday.

 

The loan, which was initially for two years, was arranged by TDB bank, said
Kamau Thugge, the principal secretary at the ministry of finance.

 

 

 

Digital newcomers out to disrupt South African banking

JOHANNESBURG (Reuters) - Armed with low-cost operating models, three South
African digital banks are betting on aggressive pricing and data analytics
to attract tech-savvy, price-conscious consumers when they launch next year
in a rare challenge to the old guard.

 

It will be first time the $30 billion industry has faced competition since
the early 2000s, when Capitec Bank muscled into a sector dominated by Absa,
FirstRand, Nedbank and Standard Bank.

 

The mobile banking newcomers, Discovery Bank, TymeBank and Bank Zero, all
expect to have substantially lower cost-to-income ratios than the big five
lenders, giving them scope to disrupt the pricing of retail banking products
in South Africa.

 

“We are here to shake up the status quo. Much the same as Uber did in the
taxi industry,” Sandile Shabalala, chief executive of TymeBank, a financial
technology company controlled by tycoon Patrice Motsepe, told Reuters.

 

While the newcomers’ focus is South Africa, Bank Zero, for one, said it may
look at other emerging markets in due course, and investors say because all
three have strong IT platforms and use digitalisation, it should be easier
to expand.

 

The challenge in South Africa is to make inroads in a market where over 80
percent of the population already have bank accounts. Elsewhere in Africa,
350 million people have no form of bank account and lenders such as Standard
Chartered and Ecobank are testing the waters with digital banks.

 

With fewer employees, lower administrative expenses and less need for costly
back-office technology, the South African challengers hope they can woo
customers with fees as low as zero, higher rates on savings and cheaper
credit.

 

While all three declined to put a figure on their expected cost-to-income
ratios, four industry executives who spoke on condition of anonymity said
they had worked out efficiency ratios of 25 percent to 30 percent.

 

That compares with nearly 60 percent for the incumbents.

 

“I have been dumbfounded at how low the cost can be,” said Bank Zero’s
co-founder Michael Jordaan, best known for turning FirstRand’s retail
banking operation into the most profitable in South Africa. “Our technology
cost is 1 percent of 1 percent of the annual tech budget at one of the big
banks.”

 

ENTRENCHED RIVALS

Jordaan’s comments were largely echoed by senior executives at TymeBank and
Discovery Bank, which is part of insurance company Discovery Ltd.

 

The major banks have taken note.

 

“There’s anxiety in executive committee meetings about what’s about to
happen,” an executive at one of the big banks said. “Your regular bank will
be happy with a cost-to-income ratio of 50 percent.”

 

Nevertheless, customers have proved reluctant to switch banks in South
Africa in the past. Standard Chartered, for example, tried and failed to
take on the big banks in the early 2000s with online lender 20Twenty.

 

Improvements in technology since and a wider acceptance of online services,
however, mean the challengers may have a better chance this time. Similar
ventures in markets such as the United Kingdom are slowly making inroads.

 

More than a million people now use Monzo’s current account and money
management mobile app while money transfer firm Revolut has 3.2 million
customers across Europe - and both have broken through the billion dollar
valuation mark.

 

Still, luring customers away from a deeply entrenched South African banking
sector will be a major challenge, and the big banks are unlikely to cede
customers without a fight.

 

South African banks escaped the global financial crisis partly thanks to
regulations that stopped them buying the U.S. mortgage-backed assets that
triggered the meltdown, as well as a more cautious approach to borrowing.

 

Headline earnings, the main gauge of profitability, have increased more than
two-fold at the big five banks since 2011 to a combined $5 billion.

 

Their average return on equity, a measure of income generated with
shareholders’ money, stands at 18.6 percent, nearly double global peers -
many of which are already cutting costs as they grapple with digital
newcomers.

 

South African banks have also been cutting jobs, closing branches and
encouraging customers to use digital channels as part of their efforts to
lower cost-to-income ratios.

 

"These banks have got established customers on their books right now, so
they are going to do the best to retain these customers," said Costa Natsas,
partner at auditing firm PwC www.pwc.co.za/en.html in South Africa.

 

FIERCE COMPETITION

Worrying for the incumbents, though, is the fact Capitec’s success was based
on aggressive pricing. After a slow start, it has more than doubled its
client base in the past five years and has an industry-leading return on
equity of 27 percent.

 

According to a survey by consultants McKinsey & Company www.mckinsey.com
published in February, pricing was the primary reason nearly 60 percent of
Capitec's 10 million customers switched.

 

“While we haven’t disclosed yet what our pricing structure will be, the name
Bank Zero should give you a very strong hint of what the banking fees should
be,” Jordaan told Reuters.

 

“Once we launch, there will be many more things that we think we can do to
revolutionise banking, not just in South Africa, but also other emerging
markets,” he said.

 

Fees at the main banks for deposits, withdrawals and transfers have for
years largely ranged from 100 rand to 250 rand a month, but can rise as high
as 450 rand - a sizeable sum in a country where the minimum wage is 20 rand
per hour.

 

“Is the competition going to be fierce? Of course, it’s all about the value
customers perceive they will get when considering whether to switch banking
providers or not, and this will largely determine whether inroads are
gradual or accelerated,” said PwC’s Natsas.

 

The other battlefield will be in the pricing of credit and interest on
savings accounts. With rates now on basic savings accounts ranging from 2.6
percent to 5 percent, traditional banks might have to offer at least double
to compete.

 

“We’re paying roughly up to 10 percent interest in our savings account,
that’s something we’ve never heard of in this country,” said TymeBank CEO
Shabalala, who previously worked for Nedbank.

 

DATA ANALYTICS

TymeBank has said it will launch officially next year, Bank Zero is aiming
for early 2019 and Discovery Bank is due to launch in March.

 

Discovery is pinning its hopes on a data programme called Vitality that
helped Discovery Ltd’s health insurance business overtake rivals such
Liberty Health. Vitality is a behaviour tracking programme that rewards
health insurance clients for healthy lifestyles, such as by paying for gym
memberships.

 

“We followed our purpose in making people healthier but in a financial
sense,” said Adrian Gore, founder and chief executive Discovery Ltd,
referring to the new bank’s business model.

 

Discovery Bank will target the group’s 2 million health insurance clients,
rewarding them with lower rates on loans and higher rates on saving accounts
- provided they achieve targets such as saving for retirement, paying down a
mortgage or having short-term insurance.

 

Discovery, which is considering giving 10 percent of the bank to black
investors, is not the only one relying on data analytics.

 

TymeBank, which is majority black-owned, has teamed up with South Africa’s
second largest supermarket chain Pick n Pay to roll out a money transfer
service for the retailer’s 10 million loyalty programme clients.

 

The partnership also gives TymeBank a pool of potential customers to target
and would give clients a point of contact at Pick n Pay’s more than 700
branches, Shabalala said.

 

TymeBank is also in advanced talks about joining forces with companies that
could provide insurance for customers who take out loans, he said, declining
to give further details.

 

Two sources said TymeBank was seeking partnerships with retirement funds
firm Alexander Forbes and insurance giant Sanlam - companies that could
provide a pool of potential customers and data.

 

Sanlam told Reuters it would team up with a bank if the alliance supported
its strategy and was mutually beneficial. “Any potential opportunities to
collaborate with Tyme would be evaluated accordingly,” Sanlam said.

 

Alexander Forbes did not respond to requests for comment.

 

($1 = 14.2352 rand)

 

 

 

Nigerian court adjourns case between MTN and central bank to Dec. 12: judge

LAGOS (Reuters) - A Lagos judge on Tuesday adjourned a hearing in an $8.1
billion dispute between South African telecoms firm MTN Group and Nigeria’s
central bank until Dec. 12 after lawyers said they wanted to report back on
settlement talks.

 

The central bank has accused the firm of illegally sending $8.1 billion
abroad, which MTN has denied. Lawyers for both parties told the court they
were in talks to agree a settlement.

 

 

Congo state miner in production-sharing deal with Chinese firm

KINSHASA (Reuters) - Congo’s Gecamines said on Monday it had signed a
production-sharing deal for copper and cobalt deposits with China’s Hongkong
Excellen Mining Investment, which will pay a $40 million signing bonus.
Congo’s state mining company said its first production-sharing deal would
guarantee it a “significant” share of annual production from the Kingamyambo
and Kilamusembo deposits “regardless of the financial results of the
project”.

 

China is the world’s largest consumer of industrial metals and has
strengthened its grip over supplies from across Africa in recent years to
feed its economic growth.

 

Democratic Republic of Congo is Africa’s top copper producer and the leading
miner of cobalt, which is used for electric car batteries.

 

Gecamines has said that its joint ventures with international miners such as
Glencore and China Molybdenum do not bring enough money into state coffers
and is turning instead to production-sharing agreements, which are common in
the oil sector. “Production sharing agreements align the interests of the
two partners because the risk now weighs more on the investor than on
Gecamines,” Gecamines economic adviser Stephane Cormier said in a
presentation .

 

He spoke alongside representatives of Hongkong Excellen, an affiliate of
Shanghai Putailai New Technology Energy Co Ltd’s main shareholder. Gecamines
chairman Albert Yuma added that a $40 million instalment of Hongkong
Excellen’s signing bonus would be paid by the end of the year.

 

Gecamines said in a statement that reserves at Kingamyambo and Kilamusembo
could exceed 1 million tonnes of copper and 100,000 tonnes of cobalt. Since
its heyday in the 1980s, when it produced close to 500,000 tonnes of copper
a year, Gecamines has fallen heavily into debt and last year produced less
than 16,000 tonnes.

 

International watchdogs, including the Carter Center and Global Witness, say
that hundreds of millions of dollars of Gecamines’ revenues in recent years
have gone missing.

 

Gecamines angrily rejected those charges last week, accusing the groups
behind them of serving the interests of foreign mining companies.

 

 

 

Equinor set to start talks with Tanzania over LNG project

OSLO (Reuters) - Norway’s Equinor is ready to start talks with the Tanzanian
government over developing a liquefied natural gas (LNG) project to produce
a huge offshore discovery in the deepwater block 2, the company said on
Tuesday.

 

Tanzanian President John Magufuli asked his government to proceed with
negotiations to set out the commercial and fiscal framework for the LNG
project in Tanzania, it added.

 

“Equinor will now proceed with our partner ExxonMobil with negotiations for
a host government agreement,” an Equinor spokesman said in an email to
Reuters.

 

 

 

China-US trade: China vows speedy action on trade commitments

Chinese officials have said they are "confident in implementing" trade
commitments made to the US "as soon as possible", without giving details.

 

An ongoing trade war has seen both countries impose duties on billions of
dollars of one another's goods.

 

Over the weekend, a temporary truce was agreed between US President Donald
Trump and Chinese President Xi Jinping at the G20 meeting in Argentina.

 

But concerns linger over discrepancies in information coming from either
side.

 

The US and China paused hostilities after several months of tit-for-tat
tariffs, agreeing to halt any new duties for 90 days.

 

This prevented a widely expected escalation in the trade war. Tariffs
already imposed on Chinese goods had been due to rise at the start of the
year and additional tariffs had also been threatened.

 

Since the talks, Mr Trump had taken to Twitter with details - but some of
the information did not tally with what White House officials were saying,
and Beijing had not commented at all.

 

The confusion has left many wondering whether the talks will succeed in
ending a trade war, which was already hurting industry and many feared would
derail the world economy.

 

The US says China's "unfair" trade practices have helped create a lofty
trade deficit and accuses China of intellectual property theft.

 

It has imposed $250bn of tariffs on Chinese goods since July.

 

China accuses the US of launching the "largest trade war in economic
history".

 

It has retaliated with duties on some $110bn worth of goods.

 

But as the dispute between the two largest economies has broadened, many
believe the trade war is part of a broader power struggle between the two
superpowers.

 

What was agreed as part of the truce?

Among the issues covered, the US says China has agreed to purchase a "not
yet agreed upon, but very substantial" amount of agricultural, energy,
industrial and other products from the US to reduce the trade imbalance
between them, the White House has said.

 

They have also agreed to immediately begin talks "on structural changes with
respect to forced technology transfer, intellectual property protection,
non-tariff barriers, cyber intrusions and cyber theft", it said.

 

Since the US-China talks in Argentina, Mr Trump has been busy on Twitter
providing further details of the negotiations.

 

Mr Trump said talks with China and the 90-day truce period had already
started. He said China was supposed to begin buying US agricultural products
and others "immediately".

 

He sounded optimistic, but reiterated his tough stance.

 

"President Xi and I want this deal to happen, and it probably will. But if
not remember, I am a Tariff Man," Mr Trump said.

 

"When people or countries come in to raid the great wealth of our Nation, I
want them to pay for the privilege of doing so."

 

Mr Trump earlier this week also said China had agreed to "reduce and remove"
the 40% tariffs it places on US cars imported into China.

 

China has made no comment on these potential car tariff cuts, nor has it
specified when the 90-day period begins.

 

So what has China said?

After US-China talks at the G20, Chinese Foreign Minister Wang Yi told
reporters that "the principal agreement has effectively prevented further
expansion of economic friction between the two countries".

 

In a commerce ministry statement on Wednesday, Chinese officials called the
talks between the two leaders a "great success".

 

China and the US would push ahead with negotiations over 90 days and China
would implement the specific issues it agreed with the US "as soon as
possible", the statement said.

 

But the BBC's Robin Brant in Shanghai said China's comments put it at odds
with the White House.

 

China has pledge to implement the changes agreed at trade talks between
Presidents Trump and Xi "as soon as possible", but it has not repeated
claims from senior figures in the US that it will happen "immediately", he
said.--BBC

 

 

 

Chanel ends use of exotic skins in its fashion range

Chanel has become the first luxury fashion house in the world to stop using
exotic animal skins, like snake, crocodile, lizard and stingray.

 

The company's head of fashion, Bruno Pavlovksy, said it had become harder to
source such pelts ethically.

 

He also included fur in the list, of which Chanel uses little.

 

Although Chanel's designer Karl Lagerfeld insisted the move was made
independently, animals rights groups hailed the decision.

 

Peta said in an Instagram post "2018 is THE YEAR for designers coming out of
the stone age".

 

Mr Lagerfeld and Mr Pavlovsky spoke to industry publication Women's Wear
Daily about the decision.

 

"We did it because it's in the air, but it's not an air people imposed to
us," Mr Lagerfeld said, although he noted "there was not much fur" in
Chanel's work to begin with.

 

The secret supplier to the world's top brands

Why I’ll keep selling fur despite the hate

Python skin bags were reportedly taken down from the Chanel site on Tuesday,
but Mr Pavlovsky said it would take a while for existing products to leave
their shops.

 

The company would now focus developing leather and other material from
"agri-food" industries, he said.

 

Other luxury brands have also stopped using fur but campaigners hope they
will follow Chanel in abandoning exotic skins.--BBC

 

 

 

Takeda gets shareholder approval for £46bn Shire takeover

Takeda Pharmaceutical has secured shareholder approval for a £46bn ($59bn)
takeover of UK-listed drugmaker Shire, clearing the way for Japan's largest
ever corporate acquisition.

 

The takeover would make Takeda one of the world's top 10 drugmakers.

 

The deal, which needs to be approved by Shire's shareholders, will also
saddle the Japanese firm with debt.

 

It follows a long-running battle that saw Takeda make multiple offers for
Shire.

 

The proposal received majority support at an extraordinary shareholder
meeting in Osaka on Wednesday.

 

A day earlier Kazuhisa Takeda, a member of the firm's founding family, spoke
out against the deal over concerns with the level of debt it would add to
Takeda.

 

The takeover is part of Takeda's strategy to become a global pharmaceutical
company.

 

The firm wanted to buy Shire to strengthen its cancer, stomach and brain
drug portfolios.

 

But one of its potentially lucrative treatments will have to be sold off at
the direction of European regulators over competition concerns.

 

Shire shareholders are due to meet later on Wednesday.

 

The company was founded in the UK and still has a large base in Basingstoke,
but moved its corporate headquarters to Dublin a decade ago. It has 24,000
employees in 65 countries.--BBC

 

 

 

Wall Street shares dive amid growth fears

Wall Street shares tumbled on Tuesday, sending all three major indexes down
more than 3% in some of the steepest declines in weeks.

 

The Dow Jones index shed almost 800 points, or 3.1%, to close at 25,027.07.

 

The S&P 500 ended at 2,700.07, down more than 90 points or 3.24%, while the
Nasdaq dropped more than 283 points or 3.8% to 7,158.43.

 

The falls came as a closely-watched financial measure caused alarm about US
economic prospects.

 

Increasing doubts that talks between the US and China would defuse trade
tensions also fuelled the losses, reversing Monday's rise, which followed
optimism about those prospects.

 

 

The declines extended a period of market turbulence that started in October,
after the indexes hit record highs earlier in the summer.

 

The losses touched nearly every sector, with the financial industry
suffering the biggest declines.

 

Analysts said the trigger for Tuesday's falls appeared to be concerns about
the "yield curve", which measures the difference between the interest rates
paid on short-term and long-term US bonds.

 

The gap has narrowed in recent months, as investors demand higher rates of
return on short-term debt in anticipation of inflation and rate rises.

 

At the same time, they are accepting relatively lower rates on long-term
debt, in anticipation of limited inflation and slower economic growth over
the next decade.

 

The difference between the rates on three-year and five-year debt
disappeared on Monday.

 

The move fuelled concerns on Tuesday that the same might happen to the gap
between two-year and 10-year bonds - a more significant indicator.

 

Will the US stock market boom continue?

US economy grows faster than expected

Historically, when short-term rates rise above longer rates, it signals a
recession may be on the horizon.

 

Analysts at S&P Global Ratings said they expected US economic growth to
slow, not necessarily contract, in coming months, as a boost from recent tax
cuts and increased government spending fades.

 

However, the firm added that the risk of recession had grown, reflecting
"increased volatility" in financial markets.

 

On Tuesday, shares in financial companies, which are especially exposed to
interest rates, were hardest hit.

 

Firms such as JP Morgan Chase, Goldman Sachs, American Express were among
the biggest losers on the Dow, all down by more than 3%.

 

Companies at risk in the trade battle, including Apple and aerospace giant
Boeing, also suffered steep declines, amid scepticism that the US and China
would retreat from their tariff war.

 

"It was good while it lasted," said Fiona Cincotta, senior market analyst at
City Index, referring to Monday's rally.

 

Tweets by US President Donald Trump fed the doubts, as he sent conflicting
signals in a series of Twitter posts.

 

"President Xi and I want this deal to happen, and it probably will. But if
not remember... I am a Tariff Man," he wrote.--BBC

 

 

 

Mervyn King: Brexit deal like Nazi appeasement

Former Bank of England governor Mervyn King has likened Theresa May's Brexit
deal to the appeasement of the Nazis in the 1930s.

 

The Brexit supporter wrote a Bloomberg article calling for the deal to be
abandoned.

 

Earlier, Bank of England governor Mark Carney warned food prices could rise
between 5% and 10% if there was a disorderly Brexit.

 

Theresa May faces deep opposition in Parliament to the proposed deal.

 

Lord King wrote there had been three episodes in modern history when the
British political class let down the rest of the country.

 

'Madness'

"In the 1930s, with appeasement; in the 1970s, when the British economy was
the 'sick man' of Europe and the government saw its role as managing
decline; and now, in the turmoil that has followed the Brexit referendum.

 

"In all three cases, the conventional wisdom of the day was wrong."

 

He said it would be "madness" to "align the country indefinitely with laws
over which it has no influence" and that a second referendum "is vital to
escape from this continuing nightmare".

 

He also said it was "intolerable for the fifth largest economy in the world
to continue indefinitely as a fiefdom", which was what, he said the Brexit
deal offered.

 

Lord King has previously criticised the government over stockpiling vital
supplies in the event of a no-deal Brexit, saying it weakened the UK's
negotiating position.

 

UK food warehouses almost full

Many foodstuffs cannot be stockpiled, says Sainsbury boss

Can firms stop stocks running low?

But earlier, Mr Carney told MPs that in the most "extreme" case of a
disorderly Brexit, food prices would rise by 10%, but in a less severe
scenario the increase would be about 6%.

 

The price rises would come partly from a fall in the value of the pound,
partly from any tariffs imposed and partly from increased costs at the
border as imports are checked.

 

Mr Carney told MPs on the Treasury Committee: "In the most extreme scenario,
your shopping bill goes up 10%."

 

'Not ready' for WTO

In his Bloomberg article, Lord King said government preparations for Brexit
based on trade under WTO terms should have started in 2016 immediately after
the referendum, "as I said at the time".

 

Mr Carney told MPs the UK's ports were not ready for a no-deal Brexit that
would see the country trade under WTO rules.

 

He said: "At this point in time, the ports are not ready for a move to an
administered WTO relationship.

 

"To be absolutely clear, our agents, my colleagues, we have gone to these
ports and had conversations directly with the ports in question. We have
talked to the private logistics companies, so we have gathered direct
information on this."

 

Under WTO rules, tariffs - a tax on traded goods - would be applied to UK
goods. The average WTO tariff varies from product to product, from 0% on
mineral fuels and pharmaceuticals, to about 20-35% on processed food and
45-50% on meat.--BBC

 

 

 

Trump's China car tariffs claim sows confusion

A proposed cut by China to tariffs on US car imports created confusion in
Washington, a day after it was announced by US President Donald Trump.

 

Beijing has not yet confirmed the move and President Trump's advisers
appeared less certain about the agreement.

 

Uncertainty also surrounded the details of the broader trade war truce
struck by the US and China at the G20 summit.

 

Amid scant details, carmaker Ford told the BBC it is "looking forward to
learning more" about the truce.

 

The US accuses China of unfair trading practices and tariffs are intended to
counter Chinese practices that make it difficult for American companies to
compete.

 

Tariffs, in theory, make US-made products cheaper than imported ones, and
encourage consumers to buy American.

 

Trump tweet

After months of escalating threats, Washington and Beijing said they had
reached a temporary agreement in their bruising trade dispute at the G20
meeting in Argentina over the weekend.

 

Central to the deal was an agreement between President Trump and China's
President Xi Jinping to not increase tariffs for 90 days to allow for talks.

 

US-China agree to suspend new tariffs

China vs the US: Not just a trade war

A quick guide to the US-China trade war

The US president later said in a tweet that Beijing had "agreed to reduce
and remove tariffs on cars coming into China from the US".

 

His comments relate to the 40% tariff China imposes on US vehicle imports,
which were brought in as part of the trade battle in July. The rate is much
higher than the 15% it places on other trading partners and forced many
carmakers in China - the world's largest car market - to raise prices.

 

Confusion

The day after the announcement, there was confusion over the details in
Washington, with senior figures in the White House contradicting each other.

 

Asked whether China would remove the 40% auto tariffs Larry Kudlow, the US
president's top economic adviser, said he "believed that commitment was
made".

 

In a briefing to reporters, he also said the US did not yet have a "specific
agreement" on auto tariffs.

 

Another senior White House figure, trade adviser Peter Navarro, said only
that the issue "certainly came up" in discussions at the G20.

 

Confusion has also arisen over when the agreed 90-day period for
negotiations will kick in, with some saying it begins now, others claiming
it starts in January.

 

Ford is just one major company looking for clarity. The US carmaker said it
was "encouraged by the trade discussions" as it awaited more detail.

 

"We look forward to learning more," Ford said in a statement.--BBC

 

 

Brexit: Food prices could rise 10%, says Mark Carney

Food prices could rise between 5% and 10% if there is a disorderly Brexit,
the Bank of England governor, Mark Carney, has warned.

 

Mr Carney told MPs that in the most "extreme" case, prices would rise by
10%, but in a less severe scenario the increase would be about 6%.

 

The Bank of England and its governor have attempted to assess the impact of
Brexit on several occasions.

 

All its assessments have seen it as a potential negative for the economy.

 

Mr Carney's colleague, Sir Jon Cunliffe, said the UK imported about half of
its food from overseas.

 

UK food warehouses almost full

Many foodstuffs cannot be stockpiled, says Sainsbury boss

Can firms stop stocks running low?

The price rises would come partly from a fall in the value of the pound,
partly from any tariffs imposed and partly from increased costs at the
border as imports are checked.

 

Mr Carney told MPs on the Treasury Committee: "In the most extreme scenario,
your shopping bill goes up 10%."

 

Ports 'not ready'

Mr Carney also said the UK's ports were not ready for a no-deal Brexit that
would see the country trade under World Trade Organization (WTO) rules.

 

He said: "At this point in time, the ports are not ready for a move to an
administered WTO relationship.

 

"To be absolutely clear, our agents, my colleagues, we have gone to these
ports and had conversations directly with the ports in question. We have
talked to the private logistics companies, so we have gathered direct
information on this."

 

Under WTO rules, tariffs - a tax on traded goods - would be applied to UK
goods. The average WTO tariff varies from product to product, from 0% on
mineral fuels and pharmaceuticals, to about 20-35% on processed food and
45-50% on meat.

 

In a timely personal revelation, Mr Carney said he had spent the weekend
with the head of the WTO, Roberto Azevedo.

 

Mr Carney said if the UK waived tariffs on European goods and continued the
tariff-free benefits of membership of the European Union, it would have to
do the same for everybody else.

 

Media captionBrexit: How will it affect chocolate supplies?

MPs challenged Mr Carney over what some critics have called Brexit
scaremongering. Last week, the Bank published scenarios that indicated a
no-deal Brexit could send the pound plunging and trigger a worse recession
than the financial crisis.

 

Mr Carney told MPs that a lot of work had gone into the Bank's assessments:
"There's no exam crisis. We didn't stay up all night."

 

He said a core team of 20 senior economists had worked on the assessments
for a couple of years, 150 different professionals across the Bank were also
drawn in and then the report was reviewed by both the Monetary Policy
Committee and the Bank's Financial Policy Committee.

 

'Sleeping soundly'

The Bank has direct responsibility for the financial sector, which is losing
jobs amid the Brexit uncertainty.

 

But Mr Carney said the Bank was comfortable with preparations for the
sector, because it had prepared for the worst-case scenario: "We're already
sleeping soundly at night, because we have the financial sector, the core of
the financial sector, in a position that it needs to be for a tough
scenario."

 

His colleague, deputy governor Sam Woods, who was also appearing before MPs,
said fewer than 5,000 financial jobs had moved out of the country since the
referendum out of some half a million employed in the sector, a "pretty
small" number.--BBC

 

 

 

 


 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Innscor

AGM

Royal Harare Golf Club

05/12/2018 (8:15am)

 


Bindura

Analysts Briefing

Chapman Golf Club

05/12/2018 (14:30)

 


Truworths

AGM

Boardroom, Prospect Park, 808 Seke Road

06/12/2018 (9am)

 


TSL

EGM

Head Office, 28 Simon Mazorodze Road, Southerton

07/11/2018 (10am )

 


Cassava 

shares list on the ZSE

 

11/12/2018

 


 

Unity Day

 

22/12/2018

 


 

Christmas Day

 

25/12/2018

 


 

Boxing Day

 

26/12/2018

 


 

New Years’ Day

 

01/01/2019

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 


 <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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