Major International Business Headlines Brief::: 24 December 2018

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Major International Business Headlines Brief::: 24 December 2018

 


 

 


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*  First Quantum Minerals plans 2,500 layoffs in Zambia over tax hikes

*  South Africa's Transnet partially reopens coal export line after
derailment

*  BP green-lights Africa's deepest offshore LNG project

*  Boeing, Green Africa Airways commit for up to 100 737 MAX 8 aircraft

*  Nigerian energy sector's crippling debts delay next power plant

*  South African state asset manager buys up struggling arms firm's bonds

*  Mnuchin calls big US banks after huge stock market falls

*  US shutdown could stretch into January, Trump aide warns

*  'Super Saturday' fails to boost retailers

*  Spotify settles $1.6bn lawsuit over songwriters' rights

*  Firms told to prepare for no-deal Brexit

*  Business investment in worst run since 2009

*  US stocks suffer worst week in a decade

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

                                      

First Quantum Minerals plans 2,500 layoffs in Zambia over tax hikes

LUSAKA (Reuters) - Canada’s First Quantum Minerals (FQM) said on Friday that
it would lay off 2,500 workers in Zambia over plans by Africa’s No.2 copper
producer to hike mining taxes.

 

The southern African country plans to introduce new mining duties, replace
value-added tax (VAT) with a sales tax and increase royalties, from January,
to help bring down mounting public debt.

 

The layoffs point to a further escalation of tension between the government
and the mining industry in a country where the sector accounts for more than
70 percent of Zambia’s foreign exchange earnings.

 

FQM said in a statement that it planned 1,250 layoffs at its Sentinel Mine
at Kalumbila and 1,250 at the Kansanshi mine in Solwezi in the first quarter
of 2019, as well as an unspecified number of contractors.

 

Zambia’s local mining body said on Thursday that Zambia was pricing itself
out of the global mining market with the proposed tax hikes, which are aimed
at bringing down mounting public debt.

 

Concerns about Zambia’s rising debt, alongside accusations of additional
hidden borrowing and government corruption, have spooked investors and
Western donors in recent months.

 

The International Monetary Fund has put on hold talk about an aid package
due to Zambia’s debts, which it describes as unsustainable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's Transnet partially reopens coal export line after derailment

JOHANNESBURG (Reuters) - South African state freight rail company Transnet
on Sunday reopened one of two coal export lines after the derailment of a
200-wagon train last week.

 

“The team remains hard at work repairing the number one line. It is still
too early to give an estimate of when this line will re-open,” the company
said.

 

 

 

BP green-lights Africa's deepest offshore LNG project

LONDON (Reuters) - BP and its partners have given the green light for the
development of a large gas project off the coast of Mauritania and Senegal,
a first for the two West African nations.

 

The Greater Tortue Ahmeyim development, Africa’s deepest at 2 kilometres
below the sea’s surface, will consist of a complex floating vessel with a
plant to super-chill natural gas into liquid, BP said in a statement.

 

This is the second major LNG project to get the go-ahead this year as energy
companies bet on a sharp rise in gas demand, with rival Shell also deciding
to press on with the development of a plant in western Canada.

 

The Tortue floating liquefied natural gas (FLNG) facility will produce 2.5
million tonnes of LNG per year. The field holds total gas resources
estimated at around 15 trillion cubic feet.

 

Work on the project will begin in the first quarter of 2019, and first gas
is expected to be produced in 2022.

 

The Tortue go-ahead was given after the governments of Mauritania and
Senegal reached an agreement over the sharing of production from the
development.

 

BP is the project’s operator, with a 60 percent stake in the development in
Senegal and 62 percent in Mauritania. Other partners include Kosmos Energy,
with a 30 percent stake in Senegal and 28 percent in Mauritania.

 

Societe des Petroles du Senegal (PETROSEN) and Societe Mauritanienne Des
Hydrocarbures et de Patrimoine Minier (SMHPM) each hold a 10 percent stake
on their side.

 

BP’s trading arm has been selected as the sole buyer of the project’s LNG.

 

 

 

Boeing, Green Africa Airways commit for up to 100 737 MAX 8 aircraft

(Reuters) - Boeing Co and Nigeria’s Green Africa Airways have committed for
up to 100 737 MAX 8 aircraft, in a deal that carries a list price of $11.7
billion.

 

The deal is the largest aircraft agreement from Africa, and will be
reflected on Boeing’s Orders and Deliveries website once finalized, Boeing
said.

 

The commitment is evenly split into 50 firm aircraft and 50 options, it
added.

 

The 737 MAX 8 is the fastest-selling airplane in the Boeing fleet,
accumulating more than 4,800 orders from over 100 customers worldwide.

 

Airlines in Africa will require 1,190 new airplanes as the continent boosts
both intra-continental and intercontinental connectivity over the next
couple of decades, Boeing said, citing its 20-year Commercial Market
Outlook.

 

 

 

Nigerian energy sector's crippling debts delay next power plant

LAGOS (Reuters) - Plans to build another privately-financed power station in
Nigeria to help end decades of chronic blackouts have been delayed because
of concerns about persistent shortfalls in payments for electricity across
the sector.

 

The $1.1 billion Qua Iboe Power Plant being developed by energy
infrastructure company Black Rhino and the state-owned Nigerian National
Petroleum Corporation won’t get a green light by the end of 2018 as planned
and it was unclear when the deal might close, NNPC told Reuters.

 

The delay is a setback for Africa’s biggest oil producer where 80 million
people don’t have access to grid power supplies and it exposes the
difficulties in attracting private investment to a sector that successive
governments have tried to reform.

 

The uncertainty surrounding the 540-megawatt Qua Iboe plant stems from the
difficulties Nigeria’s first privately-financed independent power project -
the 460-megawatt Azura-Edo plant - has encountered since it came online this
year.

 

Azura was meant to be a model for a string of independent power plants
financed by international investors. To give them confidence to invest in
the first major plant since the power sector was privatised in 2013, the
World Bank provided a safeguard known as a partial risk guarantee - meaning
the lender would step in if Nigeria defaulted on payments.

 

Under the current system, the government-owned Nigerian Bulk Electricity
Trading company (NBET) buys power from generators and passes it on to
distributors who then collect money from customers and reimburse NBET.

 

But because NBET is not paid in full for the power it buys, generators such
as Azura have been partly reimbursed from an emergency central bank loan
fund created to keep the sector afloat.

 

NNPC told Reuters one of the reasons the Qua Iboe plant (QIPP), which is due
to be built in the southern state of Akwa Ibom, had been delayed was because
NBET appeared reluctant to commit to new projects to avoid increasing its
liabilities.

 

“The continued delay relates to the current cashflow challenges at NBET, as
highlighted by the Azura project,” a spokesman for NNPC said in an emailed
statement. “This concern is justified by the fact that NBET is yet to see an
improvement in collections from DISCOs (distribution companies).”

 

NBET did not immediately respond to a request for comment on NNPC’s
statement about QIPP.

 

NBET chief executive Marilyn Amobi told Reuters in November that it was hard
for the company to work because of poor infrastructure and shortfalls in
cash from distributors needed to reimburse generators.

 

“You don’t have the infrastructure, you don’t have the financial position to
do it, you don’t actually have the products, and you don’t have the grid,”
she said.

 

WORLD BANK CONDITIONS

NNPC said another problem for QIPP was that the World Bank had made a
partial risk guarantee, similar to the one that helped Azura attract
investors, contingent on the government’s implementation of an agreed power
sector recovery plan.

 

“In theory it is okay, but the risk is there are delays in the approvals
which may impact QIPP,” NNPC said.

 

Power ministry officials and the World Bank have been in talks about
long-term structural changes needed to trigger the release of a $1 billion
loan to help pay for reforms.

 

A World Bank spokeswoman said the loan had yet to be submitted to its board
for approval and that the Washington-based lender considered the recovery
plan to be “critical for de-risking the sector for private investments”.

 

Problems that need to be tackled include decaying infrastructure, mounting
debts, low tariffs for electricity and a dilapidated government-owned grid
that would collapse if all the country’s power generators operated at full
tilt.

 

Even though NBET has an agreement to buy 13 gigawatts (GW) from power
generators, the system can only cope with distributors sending out an
average of 4 GW, according to the ministry of power.

 

The World Bank spokeswoman confirmed any future guarantees for independent
power plants (IPPs) would be linked to the plan’s implementation - because
the economic and financial viability of generation capacity expansion was at
risk.

 

A spokeswoman for Black Rhino, which is one of private equity firm
Blackstone’s portfolio companies, declined to comment on NNPC’s announcement
of a delay to QIPP.

 

When the project was unveiled, Nigerian cement giant Dangote Group was named
as a joint venture partner - along with Black Rhino and the Nigerian
National Petroleum Corporation.

 

But a Dangote executive told Reuters on condition of anonymity that the
company, owned by Africa’s richest man, Aliko Dangote, had pulled out.

 

“The huge debt level, and, the fact the IPPs are not making profits, is
another reason for prospective investors to be deterred,” he said. “Further,
collecting revenue from the distribution companies is also becoming a
mirage.”

 

A Dangote Group spokesman declined to comment on the delay to QIPP, or
whether the company had pulled out.

 

‘ILLIQUID AND INSOLVENT’

The payment problems in the Nigerian power sector were thrust into the
spotlight in March when four generating companies filed a lawsuit against
the government and Azura.

 

To ensure the generating companies were paid in full throughout 2017 and
2018, the government created a 701 billion naira ($2.3 billion) loan fund at
the central bank to guarantee payments. When the fund was established in
2017, Azura wasn’t part of the calculations.

 

But when Azura started producing electricity, the fund was also used to pay
the new plant to ensure the terms of loan deals guaranteed by the World Bank
were not breached. As a result, the other companies were told they would
only receive 80 percent of the sums owed, according to the lawsuit filed in
March.

 

The four energy companies want the fund to reimburse them in full, rather
than allocating part of the money to the new plant.

 

Azura declined to comment on payments for power generated.

 

“If the central bank wasn’t paying, the system would collapse,” an official
at a multilateral lender said on condition of anonymity. “Qua Iboe IPP would
enter a system that is illiquid and insolvent. The liquidity is being
provided by the central bank.”

 

The official said QIPP would need the same partial risk guarantee Azura
received to get off the ground, but the handling of payments to Azura by the
Nigerian authorities so far meant there was little appetite to offer the
same support.

 

Fola Fagbule, senior vice president and head of advisory at Africa Finance
Corporation (AFC) - one of the multilateral lenders that invested in Azura -
agreed that the Qua Iboe project would struggle without payment guarantees.

 

“What you have is an insolvent system,” he said. “It is really difficult to
make a case for a project on that scale.”

 

A person with direct knowledge of QIPP who declined to be named said Azura’s
experience was damaging international investors’ view of Nigeria, Africa’s
most populous nation.

 

“There has to be some understanding of how the sector is going to be able to
afford new electrons coming into the grid,” the person said. “(Those
involved) do not want QIPP to build a project that could just end up in a
default situation.”

 

‘KNOTTY ISSUES’

Nigeria’s privatised power sector typically does not use meters to provide
invoices, bill collections are low and energy tariffs have remained fixed
for three years, meaning customers receive unsustainably cheap electricity.

 

The effect, say industry experts, is that electricity distribution companies
recover so little revenue from customers that they pay less than a third of
what they owe to generating companies - and that’s why debts have ballooned.

 

Sunday Oduntan, spokesman for the Association of Nigerian Electricity
Distributors, said debt levels in the sector were caused by the artificial
suppression of tariffs. He said there was a 1.3 trillion naira ($4.2
billion) market shortfall that meant distributors were unable to invest in
improvements.

 

“You cannot be selling a product below cost price and expect high
remittance. The shortfall in the sector is because of the lack of a
cost-reflective tariff,” said Oduntan, who speaks on behalf of Nigeria’s 11
electricity distribution companies.

 

Debts across the sector partly stem from a currency crisis that took hold in
2016, just months after Azura secured its financing. The bulk of power
company costs are in U.S. dollars but customers pay for power in naira.

 

The naira lost about 30 percent of its value against the U.S. dollar in June
2016 but the devaluation was not factored into a government tariff structure
that has remained unchanged.

 

Louis Edozien, permanent secretary in the ministry of power, told Reuters
there was evidence tariffs must rise, but it was also the responsibility of
distributors to improve their collections, partly through better metering
and infrastructure.

 

As for the future of QIPP, the state oil company said it would take six to
eight months from whenever NBET executes an agreement to purchase power from
the plant before a final investment decision could be taken.

 

The NNPC spokesman said there were a number of other “knotty issues”,
including the completion of a transmission line from the project site. He
said QIPP had now agreed in a major concession to pay $20 million for it to
be finished.

 

He also said there was a disagreement between QIPP and the central bank
about the exchange rate at which power producers could buy U.S. dollars with
naira. He said this had been escalated to the minister of finance.

 

With the $1 billion World Bank power sector loan on hold for now, the
government is considering putting another 600 billion naira into the central
bank fund to pay generators when the initial amount runs out early next
year, sources said.

 

It was not clear how the central bank loans to the sector would be repaid.

 

Central Bank Governor Godwin Emefiele told Reuters that payments from the
fund could be made up to February and that the bank was holding talks with
World Bank officials.

 

“The loan negotiations are still in progress with no terminal date yet
fixed,” the power ministry’s Edozien said.

 

($1 = 306.6000 naira)

 

 

South African state asset manager buys up struggling arms firm's bonds

JOHANNESBURG (Reuters) - South Africa’s state asset manager has quietly
bought up almost 90 percent of cash-strapped arms manufacturer Denel’s bonds
in the past 12 months, data from the country’s main securities depositary
showed.

 

The previously undisclosed funding by the Public Investment Corporation
(PIC), which manages 2 trillion rand ($140 billion) of investments for the
government, sheds new light on the precariousness of Denel’s financial
position.

 

It also shows the extent of state support for Denel at a time when private
investors say they are reluctant to lend to the weapons company because of
its previous management’s involvement in a corruption scandal.

 

Faced with a critical election next year, President Cyril Ramaphosa is
fighting to keep struggling state-owned companies like Denel and power
utility Eskom afloat.

 

But he also wants to preserve South Africa’s last investment-grade credit
rating, the loss of which could trigger large capital outflows. Ramaphosa
recently ruled out for that reason a request by Eskom for the state to take
on 100 billion rand of its debt.

 

A senior lawmaker in the biggest opposition party, the Democratic Alliance
(DA), said the purchase of Denel debt by the PIC amounted to a bailout by
stealth.

 

“This is a state bailout, irrespective whether it is a grant from National
Treasury or a PIC investment via bonds,” said Kobus Marais, the DA’s shadow
minister for defence. “Denel must be sustainable on its own.”

 

The PIC only held around 350 million rand of Denel bonds in March 2017, but
from December last year it started to dramatically increase those holdings,
data from South Africa’s Central Securities Depositary analysed by Reuters
showed.

 

As of Dec. 14 this year, the PIC owned 2.8 billion rand of Denel bonds, out
of the company’s total issuance of 3.15 billion rand. The PIC purchased the
bulk of that debt via private placements in December 2017, September 2018
and this month.

 

It bought almost 2.5 billion rand of debt — issued to refinance older
borrowing — in September alone. That same month, Denel was unable to pay
senior staff in full because of what it called “liquidity challenges”.

 

Two former Denel executives told Reuters that many banks and large private
investors had refused to lend to Denel since December 2017, citing
governance concerns. They said that by September 2018 the company did not
have enough cash to meet maturing debt repayments, putting it at risk of
default.

 

Asked about the PIC’s purchases of Denel’s bonds, the arms company’s
spokeswoman said: “Denel has been successful in raising sufficient funds
from the bond markets to ensure that it is in a position to honour its
obligations. ... It will soon become profitable and operationally
sustainable.”

 

She declined to comment on whether Denel would have defaulted without PIC
support.

 

The PIC’s current holdings of Denel’s debt are held on behalf of the
Unemployment Insurance Fund and Compensation Commissioner, two funds the
state uses to pay benefits to unemployed, sick or injured people.

 

“State-owned entities, in which the PIC is invested on behalf of its
clients, service their interest payments as required and to date there have
been no defaults,” the PIC said in a statement to Reuters, confirming that
it owned 2.8 billion rand of Denel bonds.

 

A spokesman for the National Treasury, which is the ministry responsible for
the PIC, said the state asset manager took its own investment decisions.

 

DEBT WOES

Denel, a cornerstone of South Africa’s once-mighty defence industry, has
been plagued by years of mismanagement.

 

It recorded a 1.7 billion rand loss — its first in eight years — in the
financial year that ended in March, and has struggled to pay suppliers and
employee salaries for much of the past year.

 

Defence industry officials have said Denel requires new equity partners to
survive in the long term.

 

Saudi Arabia, the world’s third-largest defence spender, has approached
South Africa about partnering with Denel as part of efforts to establish its
own defence industry, but the South African government has yet to respond to
the offer.

 

Contributing to Denel’s woes was its involvement in an influence-peddling
scandal involving associates of former President Jacob Zuma that made
investors wary of its debt.

 

Denel’s most recently maturing debt — 290 million rand owed to sole investor
the City of Johannesburg — was due to be repaid on Dec. 11. Johannesburg’s
mayor told Reuters on Dec. 10 he was still unsure if the city would be
repaid.

 

“I made it clear to them I wasn’t going to roll the debt over,” Mayor Herman
Mashaba said.

 

A source in the public enterprises ministry, which oversees Denel, told
Reuters earlier this month that ministry officials were working closely with
Denel to help it refinance its debts.

 

Denel, which relies almost entirely on short- and medium-term bond issues
for its funding needs, issued a new 290 million rand bond on Dec. 11, the
proceeds of which were used to repay the City of Johannesburg.

 

The PIC bought the whole issue, securities depositary data showed.

 

($1 = 14.2396 rand)

 

 

 

Mnuchin calls big US banks after huge stock market falls

US Secretary of Treasury Steven Mnuchin tweeted out details of his
conversations, saying that the banks had "ample liquidity".

US Treasury Secretary Steven Mnuchin has made calls to the heads of the
country's six largest banks, a move to reassure investors after huge falls
in US stocks.

 

Last week, US stocks suffered one of the worst weekly falls in a decade as
an interest rate rise and US-China trade tensions rattled markets.

 

Mr Mnuchin said banks confirmed they had "ample liquidity" for operations.

 

It also comes amid a partial government shutdown over spending plans.

 

"The [bank's chief executives] confirmed that they have ample liquidity
available for lending to consumer, business markets, and all other market
operations," the Treasury said in a statement attached to a tweet from Mr
Mnuchin.

 

"[Mr Mnuchin] also confirmed that they have not experienced any clearance or
margin issues, and that the markets continue to function properly," the
Treasury's statement said.

 

All three US indexes closed lower last week, with the technology-focused
Nasdaq down 20% since its peak, placing it in so-called "bear market"
territory.

 

US investors are worried about a range of factors including slowing economic
growth at home and internationally.

 

In addition, a partial US government shutdown began at midnight on Friday
after opposition Democrats resisted President Donald Trump's demand for $5bn
(£4bn) for his Mexico border wall.

 

US shutdown could stretch into new year

US stocks suffer worst week in a decade

The shutdown over budget spending could continue right up to the opening of
the next Congress on 3 January.

 

Mr Mnuchin is now set to meet with the President's Working Group on Monday,
the Treasury statement said.

 

The group includes market regulators and Federal Reserve governors, among
others. They will discuss "coordination efforts to assure normal market
operations", the statement said.--BBC

 

 

 

US shutdown could stretch into January, Trump aide warns

A partial US government shutdown over budget spending could continue right
up to the opening of the next Congress on 3 January, a Trump aide has said.

 

The shutdown began at midnight Friday after opposition Democrats resisted
President Donald Trump's demand for $5bn (£4bn) for his Mexico border wall.

 

Mr Trump's acting chief of staff, Mick Mulvaney, suggested Democrats were
"beholden" to their left wing.

 

A Democratic senator said his party opposed any funding for the wall.

 

Five big things from Trump’s head-spinning week

"That's correct," Sen Jeff Merkley told an ABC news interviewer when asked
if his party was not going to approve any money for the Trump
administration's project. "None."

 

Earlier, the party offered a sum of $1.3bn for border security.

 

Mr Trump himself took to Twitter on Sunday to defend his plans for the
border with Mexico.

 

What did Mulvaney say exactly?

"It's very possible that this shutdown will go beyond the 28th and into the
new Congress," Mr Trump's acting chief of staff told ABC.

 

"This is what Washington looks like when you have a president who refuses to
sort of go along to get along."

 

In a separate interview for Fox News, he said he was waiting to hear from
Senate Democratic leader Chuck Schumer about a new Republican offer, without
specifying the sum.

 

Speaking to ABC's This Week programme, Sen Merkley said a "30-foot concrete
wall" and "30-foot steel spikes" were "not the smart way".

 

Why can Trump not get his budget passed?

His Republican Party controls both chambers of the outgoing Congress and the
budget was indeed passed by the House on Thursday by 217 votes to 185.

 

However, he needs to find 60 votes in the 100-seat Senate, where the
Republicans currently have 51, so he needs to enlist the support of
Democrats there.

 

How is the shutdown playing out?

Nine of 15 federal departments, including State, Homeland Security,
Transportation, Agriculture and Justice began partially shutting down after
funding for them lapsed at midnight (05:00 GMT Saturday).

 

Hundreds of thousands of federal employees will have to work unpaid or are
furloughed, a kind of temporary leave.

 

In practice, this means that:

 

*         Customs and border staff will keep working, although their pay
will be delayed. Airports will continue operating.

*         About 80% of National Parks employees will be sent home, and parks
could close - although some may stay open with limited staff and facilities.

*         About 90% of housing department workers will take unpaid leave,
which could delay loan processing and approvals.

*         Most of the Internal Revenue Service (IRS) will be sent on unpaid
leave, including those who assist taxpayers with queries.

*         The Food and Drug Administration will pause routine inspections
but "continue vital activities".

*         The remaining 75% of the federal government is fully funded until
September 2019 - so the defence, veterans affairs, labour and education
departments are not affected.

 

What happens next?

The current Congress reassembles on Thursday after the Christmas holiday.

 

On 3 January, new members of Congress will be sworn in, having been elected
in November's mid-term elections. From that point, Democrats will enjoy a
majority in the House of Representatives.

 

Mr Trump has said the shutdown could last a "very long time".--BBC

 

 

'Super Saturday' fails to boost retailers

The so-called "Super Saturday" before Christmas saw an incremental boost in
shoppers, according to latest data from retail experts Springboard.

 

High Street footfall rose by 1% on last year, and was up 6.9% on the
previous Saturday, figures show.

 

However, overall footfall still declined by 0.7% on last year.

 

"It was a bit of a last-minute burst, but it's not good," Springboard's
insight director Diane Wehrle told the BBC.

 

The reason for the incremental rise is that Christmas shoppers have been
holding out until the last minute for bargains, but aggressive discounting
has not drawn the crowds of consumers it might once have done.

 

"The discounting is a real issue. People are buying less and what they're
buying is at a lower price, so this is bad for retailers as they're left
with more stock and they're selling it at a lower profit," said Ms Wehrle.

 

Why are people spending less this Christmas?

Can 'Super Saturday' save Christmas?

When is a sale actually a sale?

Why are there so many pre-Christmas sales?

Springboard noted that footfall has fallen on the last Saturday before
Christmas every year consecutively for the last decade.

 

This phenomenon has also been observed with Boxing Day sales.

 

Ms Wehrle thinks one reason for the drop in footfall is that people avoid
shops when they do not have the money to spend, and this year consumers are
definitely spending less on Christmas.

 

"In the past year, wages didn't increase with price rises," she said.

 

"Now that has changed a bit, wage inflation is above price inflation, but
the problem is consumers have had to spend a year funding that through
savings, wages, loans or credit cards, so now they're conscious they don't
want to spend too much as they have to pay back some of those loans."--BBC

 

 

 

Spotify settles $1.6bn lawsuit over songwriters' rights

Music streaming service Spotify has settled a lawsuit accusing it of
infringing the rights of songwriters and publishers.

 

Wixen Music Publishing had sought $1.6bn (£1.3bn) in damages for what it
argued was the infringement of more than 10,000 songs.

 

The California-based firm represents artists such as Neil Young and the
Black Keys.

 

The lawsuit was settled for an undisclosed amount.

 

Although Spotify has struck deals with major record labels, Wixen had
accused Spotify of failing to address the claims of songwriters and
publishers, who have separate rights to the compositions.

 

"Wixen Music Publishing and Spotify USA have agreed to a final dismissal of
the lawsuit filed by Wixen Music Publishing late last year," the two
companies said in a statement.

 

"The conclusion of that litigation is a part of a broader business
partnership between the parties, which fairly and reasonably resolves the
legal claims asserted by Wixen Music Publishing relating to past licensing
of Wixen's catalog and establishes a mutually-advantageous relationship for
the future."--BBC

 

 

Firms told to prepare for no-deal Brexit

Businesses that trade with the EU need to take steps now to prepare for the
possibility of a no-deal Brexit, a government minister has warned.

 

Financial Secretary to the Treasury Mel Stride told the BBC's Today
programme "there is a call to action now".

 

HMRC has published an update to its advice on how firms should prepare for a
no-deal scenario.

 

However, Mr Stride called the prospect of the UK leaving the EU without a
deal an "unlikely event".

 

Speaking to the BBC, Mr Stride said: "The time is now, there is a call to
action now.

 

"Those who are importing or exporting into and out of the EU 27, in the
unlikely event that there is a no-deal at the end of March, will need to
take certain steps. They need to do that now."

 

Deal or no deal? EU bewildered by Brexit confusion

Brexit: A simple guide

What can New Zealand teach us about Brexit?

Mr Stride said businesses needed to "get a customs agent on board" or "look
at software they can use to make sure (of) their import and export
declarations".

 

He added that firms should register for an Economic Operators Registration
and Identification Number (EORI number) - a system of unique identification
numbers used by customs authorities throughout the European Union.

 

Businesses should also be prepared to pay custom duties in the event of a
no-deal Brexit, he warned.

 

The latest HMRC update marks a shift in tone, with businesses being urged to
take action now.

 

The new version of the partnership pack also includes details about
government funding for new IT systems and staff training, which is available
to customs brokers, customs intermediaries and traders.

 

On Wednesday, British business groups criticised politicians for focusing on
infighting rather than preparing for Brexit, warning that there was not
enough time to prepare for a no-deal scenario.

 

The groups said companies had been "watching in horror" at the continuing
rows within Westminster.

 

Nimisha Raja, chief executive and founder of Nim's Fruit Crisps, says
businesses need to be prepared for a lot more paperwork, if there is a
no-deal Brexit.

 

Nim's Fruit Crisps sometimes has to import fruit from the EU to make its
products, when fruits such as apples and pears are out of season in the UK.

 

"I hadn't realised quite how much we would need to do," she told the BBC.

 

Preparing for the changes in the import procedure was "quite an onerous
task, and possibly [involving] extra cost in admin staff".

 

She would definitely be interested in applying for grants to ease the load.

 

At the moment, in order to import any item from outside the EU, importers
need to locate the specific commodity code relating to each specific
product.

 

In a no-deal scenario, this would mean British businesses would need to be
able to locate commodity codes from HMRC's database, which would be
time-consuming.

 

"Having access to funding and not having to devise it from scratch, that's
brilliant. At least it would be something to start off with," said Ms Raja.

 

"There are possibly lots of costs involved that we haven't planned for.

 

"What will have a huge impact on cost will be whether you do all this
yourself or whether you get an agent - but an agent will cost a lot."--BBC

 

 

 

Business investment in worst run since 2009

Business investment has now declined for three quarters in a row, figures
show, its worst run since the economic downturn of 2008 to 2009.

 

The Office for National Statistics (ONS) said investment fell by 1.1% in the
July to September period compared with the previous quarter.

 

However, separate ONS figures showed government borrowing fell in November.

 

Borrowing was £7.2bn last month, down £0.9bn from a year earlier and the
lowest November figure for 14 years.

 

Business investment comes from both private and public corporations and
includes investments in transport, technology and buildings.

 

Many major businesses, including Jaguar Land Rover, Nissan, Airbus and BMW,
have all warned that Brexit threatens investment levels in UK business
operations.

 

Earlier this week, a host of British business groups criticised politicians
for focusing on infighting rather than preparing for Brexit, warning that
there is not enough time to prepare for a no-deal scenario.

 

Also on Wednesday, the Bank of England cut its UK growth forecast and warned
a lack of Brexit clarity is hitting the economy.

 

The Bank said uncertainty over the UK's departure from the EU had
"intensified considerably" over the past month.

 

'Strangers'

In a raft of official releases on Friday, the ONS also issued the latest
balance of payments figures.

 

The ONS said the current account deficit - the difference between money
flowing in and out of the UK - widened to £26.5bn in the third quarter. The
figure was worse than expected and compares with a £20bn deficit in the
previous three months.

 

Investment by firms in the likes of plants and machinery can fluctuate
wildly from one quarter to the next. But the decline in this type of
spending is the most prolonged since the financial crisis. There can be
little doubt that the prolonged uncertainty over Brexit has caused paralysis
in corporate spending: the level of investment is pretty much unchanged when
compared with immediately before the referendum.

 

Add in government investment and only Japan, amongst the other major
economies, has seen a bigger slide in the latest quarter. But our woeful
investment record can't be just blamed on Brexit.

 

This trend of underperforming can be traced back to the financial crisis.
And that has implications for our longer term economic wellbeing. If there
isn't the investment in the infrastructure, tools and technology we need to
become more efficient, then productivity suffers. That limits not only how
fast output and profits can grow - but the size of pay rises businesses can
afford to pay out.

 

The governor of the Bank of England, Mark Carney, has previously warned that
this large current account deficit leaves the country dependent on "the
kindness of strangers".

 

The ONS also confirmed the UK economy grew by 0.6% in the third quarter from
the previous three months, the same as a previous estimate.

 

Consumer concerns

"The longer-term picture remains subdued and business investment has now
fallen for three consecutive quarters," said ONS statistician Rob
Kent-Smith.

 

Mr Kent-Smith also noted that households had spent more than they received
for an unprecedented eighth quarter in a row, raising questions about their
ability to keep on spending and driving the country's economy.

 

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said consumers
rather than business were keeping economic growth alive, but that could not
last.

 

"The recent deterioration in consumers' confidence and the pick-up in saving
intentions suggests that growth in spending will slow in the near-term, even
though real wages should start to rise at a faster rate," he said.

 

"Accordingly, the latest national accounts do not inspire confidence that
the economy will pull through the current political crisis unscathed."--BBC

 

 

 

US stocks suffer worst week in a decade

US stocks suffered one of the worst weekly falls in a decade as trade
tensions with China, interest rate rises and a possible government shutdown
rattled markets.

 

All three indexes closed lower, with the technology-focused Nasdaq down 20%
since its peak, placing it in so-called "bear market" territory.

 

The Dow Jones Industrial Average recorded its biggest weekly drop in
percentage terms since 2008.

 

The S&P 500 fell 7% for the week.

 

It is the biggest weekly percentage drop since August 2011 while the
Nasdaq's 8.36% decline is the sharpest since November 2008.

 

The Dow Jones fell 6.8% during the week.

 

What's knocked markets off course?

US economy under Trump: Is it the best in history?

After years of gains, US investors are fleeing stocks, worried about a range
of factors likely to hit corporate profits, including slowing economic
growth domestically and abroad.

 

Earlier this week, the US Federal Reserve lifted the interest rate and
signalled that it would continue to rise next year, albeit at a slower pace.

 

The Fed also cut its forecasts for economic growth in 2019 to 2.3%, down
from the 2.5% predicted in September.

 

Michael Hewson, chief markets analyst at CMC Markets, said: "China is
cooling and the eurozone is slowing down, and some of the economic
indicators from the US have been a bit soft recently, but yet the Fed hiked
rates and suggested that two more interest rate hikes were lined up for
2019."

 

Elliot Clarke, economist at Westpac, the banking group, added: "Political
brinkmanship in Washington is further heightening market uncertainty."

 

Markets were also unnerved by comments from President Donald Trump's trade
adviser Peter Navarro who told the Nikkei newspaper that it would be
"difficult" for the US and China to reach a long lasting trade agreement
that would end the tensions between the two.

 

Upswing

Share trading started Friday on an upswing, boosted by
stronger-than-expected quarterly sales at sportswear giant Nike.

 

Investors also appeared soothed after John Williams, president and chief
executive of the Federal Reserve Bank of New York said the central bank
would consider market turmoil as it weighs future interest rate decisions.

 

However, selling set in by afternoon with some of the major technology firms
- that led the market's rally earlier this year - experiencing some of the
most bruising falls.

 

Facebook and Twitter both tumbled more than 6%, Amazon dropped more than 5%,
and Apple and Microsoft slipped more than 3%.

 

For the day, the Nasdaq index fell almost 3%, the S&P 500 tumbled more than
2%, and the Dow slid 1.8%.

 

Some economists argue that the steep Wall Street sell-off does not reflect
conditions in the wider economy, which grew at an annual pace of 3.4% in the
most recent quarter.

 

Consumer sentiment also remains strong, according to the most recent data.

 

However, the fears on Wall Street could spread in the event of a prolonged
downturn, analysts warned.

 

"If these expectations begin to shift, then we would expect to see more
downward pressure on sentiment and spending patterns in early 2019," Oxford
Economics said.--BBC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

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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