Major International Business Headlines Brief::: 06 February 2018

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Major International Business Headlines Brief::: 06 February 2018

 


 

 


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*  South Africa's rand slips as Zuma deadlock weighs

*  Investec co-founder Koseff to step down as CEO

*  Gold rises as equity sell-off spurs safe-haven buying

*  De Beers returns to South African roots with Kimberley exploration drive

*  International miners join forces to fight Congo mining code

*  Botswana's economy seen expanding at faster pace this year

*  Congo's Gecamines wants to revise contracts with mining partners

*  Potters Bar, Ukraine’s stolen billions and the Eurovision connection

*  Uber v Google: Self-drive tech clash heads to court

*  European shares tumble in new sell off

*  Homebase owners may close up to 40 stores

*  BP profits double on higher oil price

*  UK Diesel car sales fall by 25% in January

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 

South Africa's rand slips as Zuma deadlock weighs

JOHANNESBURG (Reuters) - South Africa’s rand was weaker early on Tuesday,
hurt by a broad recovery in the dollar and locally by the political
stalemate as the ruling African National Congress (ANC) said it would meet
later in the week to discuss the president’s future.

 

At 0640 GMT the rand was 0.16 percent weaker at 12.1450 per dollar compared
to an overnight close of 12.1250 in New York.

 

Senior officials of the ANC met on Monday as pressure grew on President
Jacob Zuma to step down or for the party to push him out, spurring some
short-term gains in the rand.

 

Zuma’s scandal-plagued tenure has been seen as a weight on the economy, and
the rand has soared to its firmest in over two years as the likelihood of
his removal heightened after Cyril Ramaphosa was elected party chief in
December.

 

Analysts said the lack of clarity on Zuma was keeping investors cautious and
would dent short-term demand.

 

“This combined with a broad based dollar recovery has the rand on the back
foot, and until such time as we have clarity on this, the local unit is
likely to remain under pressure, with the 12.00 level likely to provide
support,” said Nedbank’s Reezwana Sumad in a note.

 

Bonds were a touch weaker with the yield on the benchmark paper due in 2026
adding 0.5 basis points to 8.51 percent.

 

Stocks were set to open lower at 0700 GMT, with the JSE securities
exchange’s Top-40 futures index down 3.5 percent.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Investec co-founder Koseff to step down as CEO

JOHANNESBURG (Reuters) - Stephen Koseff, the entrepreneur who co-founded
Anglo-South African investment bank and asset manager Investec, will step
down as chief executive in October, the company said.

 

Koseff has been at helm of the company for four decades. He co-founded the
company with Bernard Kantor, who is also stepping down as managing director.

 

 

 

Gold rises as equity sell-off spurs safe-haven buying

(Reuters) - Gold prices rose on Tuesday as a rout in global equities
prompted investors to seek shelter in safe havens such as gold, although
expectations of more U.S. rate hikes this year weighed on the market.

 

Spot gold was up 0.3 percent to $1,342.95 per ounce at 0722 GMT following
Monday’s 0.5 percent gain.

 

Prices fell 1.2 percent on Friday, the most since Dec. 7, 2017, after
stronger-than-expected U.S. payrolls data shored up expectations that a
pick-up in inflation will spur further rate hikes this year, boosting the
dollar, in which it is priced.

 

U.S. gold futures for April delivery rose 0.7 percent to $1,345.60 per ounce
on Tuesday.

 

ANZ analyst Daniel Hynes said he suspected an even bigger rally in prices
considering the correction in the equity markets.

 

“The rate hikes have already been priced in by the market... but it’s
certainly got the ability to temper the upside in gold prices,” Hynes said.

 

Asian shares fell sharply after Wall Street suffered its biggest decline
since 2011 on Monday as investors’ faith in factors underpinning a bull run
in markets began to crumble. [MKTS/GLOB]

 

Gold is seen as a safe-haven investment due to its ability to retain value
even at times of financial or political uncertainty. It is also used as a
hedge against inflation.

 

Last week, the U.S. Federal Reserve kept interest rates unchanged but said
inflation likely would rise this year and hinted at “further gradual” rate
increases.

 

The yellow metal is highly sensitive to rising U.S. interest rates, as these
increase the opportunity cost of holding non-yielding bullion, while
boosting the greenback.

 

Spot gold may retest a resistance at $1,354 as it seems to have stabilised
around a support at $1,326 per ounce, according to Reuters technical analyst
Wang Tao.

 

Spot silver rose 0.9 percent to $16.89 per ounce. It fell 3.7 percent on
Friday in its biggest one-day decline since December 2016.

 

Platinum gained 0.6 percent to $995.60 per ounce, while Palladium was down
1.4 percent to $1,015.40 per ounce after touching its lowest since Dec. 14,
2017.

 

“The PGMs (platinum group metals) are certainly going to benefit from the
better economic backdrop we’re now seeing in 2018. In fact, I think the rest
of the complex will certainly outperform gold in the medium term,” Hynes
said.

 

Palladium rose to an all-time high of $1,138 on Jan. 15 on higher automotive
demand and supply shortage.

 

 

 

De Beers returns to South African roots with Kimberley exploration drive

CAPE TOWN (Reuters) - Almost 130 years after diamond giant De Beers emerged
from mines around the dusty South African town of Kimberley, the company is
going back to its roots with a clutch of exploration permits to prospect for
gem deposits near the place of its birth.

 

South Africa is hardly virgin territory for mineral exploration: over a
third of the gold ever produced in history has been extracted from beneath
its soil, and industrial-scale diamond mining goes back over a century.

 

But Phillip Barton, the chief executive of De Beers’ South African
operations, said the company believed that South Africa still had potential
for new diamond finds.

 

“We believe that South Africa is a prime exploration destination,” he told
Reuters on the sidelines of the Investing in African Mining conference in
Cape Town.

 

“We have had 52 exploration applications outstanding for a long time and now
we’ve had 16 of those 52 licences granted and we are working hard to get the
others approved.”

 

All 16 are in the Kimberley area over 400 kms (260 miles) southwest of
Johannesburg. De Beers, a unit of Anglo American, completed the sale of its
Kimberley mines and assets two years ago as it focuses on its $2 billion
Venetia project in South Africa’s Limpopo province.

 

“One of the strengths that we’ve got is that we have a database with fairly
reliable information from about the mid-1950s onwards,” Barton said.

 

“Using that database we then apply the latest thinking and the latest
technology. So a lot of our focus is around Kimberley where we used to mine.
All the easy diamond deposits around the world have been found and that’s
why you need to use new technology.”

 

On the Venetia project, Barton said that it was 35 percent complete and
slightly under-budget, with first production still expected in 2021.

 

South Africa accounts for about 9 percent of global diamond production and
is ranked 5th behind Russia, Botswana, Canada and Angola.

 

De Beers was founded in 1888 by buccaneering businessman and British
imperialist Cecil Rhodes. His statue was removed from the University of Cape
Town in 2015 after it became a focal point for protesters who said it was a
relic of the colonial past.

 

 

 

International miners join forces to fight Congo mining code

LONDON (Reuters) - International miners operating in Democratic Republic of
Congo are mounting a coordinated campaign to overturn a new mining code that
they say will stifle investment in the country, Randgold’s chief executive
told Reuters on Monday.

 

Mark Bristow said he expected the Congo government would agree to amend the
code, which was passed by the DRC Senate last month and would raise
royalties on metals including gold, copper and cobalt.

 

Miners working in Congo include Randgold, Glencore, Ivanhoe and China
Molybdenum Co.

 

Bristow said higher royalties would discourage investment but the key
objection was that the new code dispensed with a clause in the previous
charter protecting miners from changes to the code for 10 years.

 

Asked whether he considered the new code illegal, Bristow said: “It’s
attempting to disregard a law approved and passed by the House and the
Senate. If the new code is attempting to ignore the previous laws then it
is.”

 

“We are engaging with everyone from the top to every ministry - prime
minister to ministers of mines, ministries, civil society, senators,
parliamentarians, foreign lenders, the whole nine yards,” Bristow said.

 

“We haven’t at this stage received any rejection. It’s very early days.
That’s a step forward.”

 

International miners operating in Congo were putting together a formal group
to spearhead lobbying efforts, Bristow said.

 

“There’s no one that’s international and has significant investment in the
mining industry (in Congo) that has declined the invitation (to join),” he
said.

 

Randgold is asking for the code to be returned to the Mining Ministry for
further consultation with miners. If this does not happen the company will
mount a challenge through international arbitration, it said in a statement
on Sunday.

 

“I believe the chances of success are very high, ultimately. The question
is, does this have to get into a confrontation to get there?” Bristow said.

 

“What’s being proposed results in a new investor on a new project ending up
not making a single dollar return. That doesn’t work and so ultimately that
will drive a review.”

 

“We’ve seen him (President Joseph Kabila) take stock of decisions in the
past. Our strong recommendation is that this should happen with this
legislation.”

 

Randgold earlier on Monday doubled its annual dividend after profits rose by
14 percent in 2017.

 

 

 

Botswana's economy seen expanding at faster pace this year

GABORONE (Reuters) - Botswana’s economy is projected to expand at a faster
pace this year compared to last year as the mining sector benefits from a
recovery in the global economy, Finance Minister Kenneth Matambo said on
Monday.

 

Presenting the 2018 budget to parliament, Matambo said GDP growth was
projected at 5.3 percent in 2018 from an estimated 4.7 percent expansion in
2017.

 

Matambo said Botswana’s budget deficit was projected to widen to 3.59
billion pula ($372 million) or 1.8 percent of GDP in the 2018/19 fiscal year
from an estimated deficit of 2.42 billion pula or 1.3 percent of GDP in the
prior year.

 

The country’s fiscal year runs from April to March.

 

“Although the economy is expected to improve in performance, our fiscal
position remains tight and government will continue to manage expenditure,”
Matambo said.

 

“Government sees the expected deficit to be temporal and will therefore be
financed by a combination of drawing down on existing loans and cash
reserves.”

 

($1 = 9.6525 pulas)

 

 

 

Congo's Gecamines wants to revise contracts with mining partners

CAPE TOWN (Reuters) - Democratic Republic of Congo’s state mining company
Gecamines said on Monday it wanted to renegotiate contracts with its
international partners this year to give the state a bigger share of the
revenues.

 

Congo is Africa’s biggest copper and cobalt producer and also mines gold and
diamonds, but it is one of the world’s least developed countries with an
annual budget of roughly $5 billion.

 

Parliament passed a new mining code last month to raise royalties and taxes,
prompting international miners to say it would deter foreign investment.
President Joseph Kabila has yet to approve the new law.

 

Gecamines’ partners on mining projects include Glencore, China Molybdenum
and Ivanhoe.

 

Gecamines Chairman Albert Yuma told a mining conference in Cape Town that
talks on contract revisions should to start in the second quarter and be
completed by the end of 2018 or start of 2019.

 

He said existing deals did not give Gecamines or the state “a sufficient
share” of the nation’s mineral wealth.

 

“This imbalance is mainly the result of a history that has placed our state
in a difficult situation and forced it to negotiate in a weak position,” he
said.

 

“We therefore call for a rethink of our past partnerships to enable them to
achieve the only purpose for which they were signed: to provide benefits for
the state and Gecamines,” he said.

 

Gecamines, which is heavily indebted and has consistently failed to meet
production targets, said it had carried out contract audits in the past but
had not revealed the results.

 

Since its heyday in the mid-1980s, Gecamines has sold most of its assets and
entered joint ventures with foreign partners, which include 12 joint
ventures and five mine leasing contracts.

 

The U.S.-based Carter Center said in a report in November that Gecamines
failed to internally register $750 million in income between 2011 and 2014,
and that much of this was now untraceable. Gecamines denied the charge.

 

Elisabeth Caesens, director of Resource Matters, a Brussels-based group that
advocates better resource management, said any renegotiation had to ensure
all Congolese people benefited.

 

She said Gecamines had “little to show for the hundreds of millions it
collected from the previous contract renegotiations in 2006-2009”.

 

Gecamines says international non-governmental organisations have overstated
the firm’s revenues while understating its contributions to the national
treasury.

 

 

 

Potters Bar, Ukraine’s stolen billions and the Eurovision connection

A suite within this Potters Bar office block is listed as the registered
address for more than 100 companies linked to international money
laundering.

A UK company helped the circle of Ukraine's disgraced ex-president profit
from last year's Eurovision Song Contest, a BBC investigation has found.

 

A Kiev exhibition centre paid to host some Eurovision events is owned
through a Hertfordshire-registered company.

 

At least £1.2bn has been funnelled through companies registered at the same
Potters Bar address.

 

The Department for Business said company information in the UK "is under
constant scrutiny".

 

The Parkovy Congress and Exhibition Centre, a stylish, modernist building in
the centre of Ukraine's capital, Kiev, was the location for last year's
official Eurovision after-party.

 

Contestants and their families from across the continent danced and drank
until dawn on the rooftop with spectacular views across the River Dnieper.

 

The Ukrainian firm which owns the Parkovy building is owned by a British
company called Fineroad Business LLP, registered in Potters Bar.

 

That company is a partnership of two opaque firms registered on the
Caribbean island of Nevis.

 

According to documents seen by BBC Radio 4's File on 4 programme, the
Ukrainian state broadcaster paid the building's owners to host the event.

 

The profits apparently ended up in the pockets of people closely linked to
the regime of former President Viktor Yanukovych, who fled the country for
Russia four years ago after anti-corruption protests in Kiev's Maidan
square.

 

In 2017, a Ukrainian court found reasonable grounds to believe that the
Parkovy building itself was funded by money stolen from the state.

 

Ukraine's general prosecutor has estimated that while in office ex-President
Yanukovych and his associates stole a total of $40bn (£29bn) from the state.

 

The Potters Bar connection

Research by the campaigning organisation Transparency International has
identified the Potters Bar office as the registered address for more than
100 other companies implicated in international money laundering schemes -
most involving dirty money from Russia and other ex-Soviet states.

 

Working with illicit finance expert Richard Smith, and using leaked bank
data published by the Organized Crime and Corruption Reporting Project, we
have calculated that $1.7bn has been laundered through companies registered
at that single address.

 

Billions more could have been funnelled through a similar scheme, of which
little detail is currently known.

 

UK companies are "providing the role of facilitators of global corruption",
says Duncan Hames, Transparency International's policy director.

 

New transparency rules

The vast majority of the 100-plus companies the BBC looked at, list their
officers or members as other companies, registered in secrecy jurisdictions
like the Seychelles or Belize.

 

But since June 2016, UK companies have been required to list a "person with
significant control", or PSC. This is supposed to reveal the real people
truly in control of firms.

 

In an exclusive analysis for File on 4, the anti-corruption organisation
Global Witness has revealed that nearly one in 10 UK companies - 350,000 -
still haven't named a PSC with the UK registry, Companies House.

 

While there are some legitimate circumstances for not listing a PSC, Murray
Worthy, senior campaigner at Global Witness, says he's "shocked" by the
"worryingly large number" that haven't, and that others are submitting data
"that's just clearly inaccurate".

 

He cites PSCs aged over 300 or supposedly born in the future.

 

The analysis found another 7,000 companies declaring that they are
controlled by companies registered in secrecy jurisdictions.

 

"This is exactly what the register was supposed to end," says Mr Worthy.
"The vast majority of those companies will not meet the requirements of the
register and are hiding who really owns and controls those companies."

 

Another 25,000 companies appear to have circumvented the rules by stating
that they're ultimately controlled by companies which themselves list no
PSC.

 

One particular type of company, Scottish Limited Partnerships (SLPs), has a
particularly poor record. Four in five SLPs have not named a PSC. Of those
that have, more than 40% have a PSC based in an ex-Soviet country. SLPs were
included in the new rules in June 2017 - alongside a promise that they would
face daily fines of up to £500 if they didn't comply.

 

Companies House told us it systematically checks the information it
receives, but so far no one has been prosecuted for failing to meet the
requirements.

 

The man behind Parkovy?

As for Fineroad Business - the Potters Bar-registered company that owns the
Eurovision after-party venue - it does name a real person as its PSC.

 

He's a Ukrainian called Sergii Moskovskyi, whose listed address is in the
east of the country, just outside the warzone where Ukrainian forces are
fighting Russian-backed rebels.

 

Moskovskyi, who is actually based in Germany, initially told the BBC he's
"never heard" of Fineroad Business.

 

However, he later confirmed he is the company's main shareholder. For
reasons of "commercial confidentiality" he didn't say what the company does,
or whether he paid for his shares.

 

He said he's been assured the company has not been involved in money
laundering, but following our investigation will now investigate further.

 

A spokesperson from the Department for Business, Energy and Industrial
Strategy said: "The UK has one of the most transparent and accessible
company registers in the world - viewed two billion times last year -
meaning company information is under constant scrutiny."--BBC

 

 

Uber v Google: Self-drive tech clash heads to court

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A trial pitting two of the biggest players in self-drive technology against
each other has begun in San Francisco.

 

Ride-sharing firm Uber is being sued by Waymo, the self-driving company spun
out of Google.

 

Uber is accused of stealing and using trade secrets relating to Lidar (light
detection and ranging) - one of the technologies that enables an autonomous
car to understand what is happening around it.

 

Waymo is making its case first, and then it will be up to Uber to defend
itself.

 

Emails already shown in court detailed Uber's ex-chief executive Travis
Kalanick demanding "pounds of flesh" from Waymo, while others are said to
involve him saying he wanted to "find the cheat codes".

 

Waymo's legal team has compared Mr Kalanick to Rosie Ruiz, a runner who
cheated in the 1980 New York Marathon by taking the subway.

 

Uber will likely begin its defence next week. It is expected the company
will not dispute document theft, but instead attempt to convince the jury it
did not use the information in its self-drive experiments.

 

While bitter and expensive legal disputes between tech companies are common,
it's rare for these tussles to be played out in public.

 

The case is expected to last about three weeks.

 

At stake is a potential damages payout of hundreds of millions of dollars.
Or, perhaps worse, an injunction to halt, or at least hinder, Uber's
self-driving research. This would be a big blow to the company, which once
said leading the way in self-driving tech was critical to its survival.

 

What is the accusation?

The row centres around a man named Anthony Levandowski, a former Google
employee considered a leading mind in autonomous research.

 

He worked on Google's self-driving programme before leaving in January 2016.
It is alleged that when he left, he took with him more than 14,000
confidential documents, which were blueprints and other technical
information about Lidar.

 

He then founded Otto, an autonomous trucking company, which after less than
a year was acquired by Uber for $680m (£481m). It formed the basis of Uber's
self-driving division, and Mr Levandowski was at the helm.

 

Waymo alleges this whole process was an elaborate charade, and that Uber,
specifically then-chief executive Travis Kalanick, was in talks with Mr
Levandowski before he left Google.

 

Otto was merely a front for Uber's plan to pinch their technology, Waymo
claims.

 

Uber denies this version of events, though not entirely. It's not disputing
the documents were taken, but insists it didn't gain anything whatsoever
from them.

 

The crucial point Waymo will need to prove is that not only did Uber have
the documents, but that it used them to gain an advantage of some kind.

 

What are the trade secrets?

In the original filing, Waymo cited 121 secrets and patents Uber was said to
have stolen. That number has since been reduced to eight.

 

The significance of this reduction depends on which company's spin you want
to follow. In background briefings, Uber said the fact so many of the claims
were dropped from the case proved they were flimsy.

 

Waymo said it was forced to select a handful of the most significant claims
in order to have a trial that didn't last months, or even years.

 

Judge William Alsup's comments, it has to be said, seem more closely aligned
with Uber's interpretation.

 

He described at least one of the dismissed "secrets" as "Optics 101" -
meaning, the very basics of the technology, not the kind of insight that
would justify calling it a secret.

 

Either way, the jury will be asked to rule individually on the eight
secrets. Discussions about the specifics will be off limits to press, but
the jury will see each secret in detail in order to make its decision.

 

Part of that process will be determining whether the information could be
considered a secret in the first place.

 

Key to Waymo's strategy will be convincing the jury that secrets can cover
failure as much as success.

 

If Waymo spent millions of dollars and hundreds of hours discovering that
something didn't work, is Uber capitalising on that trade secret by saving
itself the effort?

 

Who will appear in court?

While Mr Levandowski is on the witness list, don't expect much if he
appears.

 

Throughout this case, he has "pleaded the Fifth" - the protection afforded
by the American constitution to not say anything that could incriminate
oneself. Because of this, Uber has since fired him.

 

Should Waymo call Mr Levandowski to the stand, we can assume it's theatre -
the man at the centre of the row refusing to speak a peep is not a great
look for Uber.

 

We expect, within the first few days, to hear from Mr Kalanick. The
controversial co-founder of Uber was forced to step down as chief executive
last year following a string of scandals of which this case is but one.

 

We are also likely to see Larry Page and Sergey Brin, Google's co-founders.

 

Less glamorous but perhaps more useful will be the numerous Uber engineers
who will be rigorously questioned about how they were directed by Mr
Levandowski, and whether those stolen documents and secrets ever surfaced in
Uber's work.

 

Overseeing the proceedings is Judge Alsup, a favourite among journalists for
his highly-quotable courtroom quips, but not a person either legal team will
be looking forward to dealing with.

 

Judge Alsup is a force to be reckoned with: he famously learned some coding
skills in order to have a better grasp on a different trial between Google
and database specialist Oracle.

 

What are the strategies and risks?

Jury trials bring about a whole new psychology to how lawyers must approach
a case. Attacks and rebuttals must be thorough but not overwhelming;
simplified but not patronising.

 

Uber knows it could face a jury which, being from San Francisco, may already
hold a negative view of the company.

 

During the selection process, Uber asked potential jurors if they were, had
been, or just knew a taxi driver - such is the animosity over Uber's impact
on traditional business. It also asked if anyone had deleted Uber's app in
protest at various ethical decisions the company has made in recent times.

 

Uber's baggage in front of the five man, five woman jury can't be
understated: Mr Kalanick has a reputation as a hard, cut-throat operator -
and that's just to his friends.

 

Given a past of covering up a security breach, surveilling journalists, and
using secret software to evade government officials, it will hardly be a
huge leap for the jury to believe Mr Kalanick wasn't above tapping up a
rival's star employee.

 

Privately, Uber accuses Waymo of wanting to dumb down the jury's technical
expertise in the hope of getting jurors who know less about sophisticated
technology. Waymo strongly denies this, and if it is to win it will need to
do a lot more than paint Uber as some kind of tech bogeyman.

 

We can expect Judge Alsup to have little patience for anything that strays
far from the intricate facts of the trade secrets in question.

 

Ultimately, it's up to Waymo to draw a clear line, from stolen documents, to
Uber's self-driving work.

 

What are the potential outcomes?

Let's consider the jury decides that Uber stole and used all the trade
secrets of which it's accused. That could mean it would have to pay more
than $1bn in damages.

 

Calculating such an amount could be difficult, though. It's hard to measure
the real cost to Waymo given the technology is yet to be commercialised, at
least in the ways these companies envision.

 

More straightforward would be an injunction that would stop Uber's
self-driving programme altogether.

 

That would be an extreme outcome - it's more likely that any injunction
would just apply to whichever trade secrets the jury decides were infringed.

 

As I see it, there is a scenario would allow both companies to claim a moral
victory, even if, technically, the decision goes Waymo's way.

 

If a jury decides Uber did steal and use trade secrets and an injunction is
handed down, Uber will immediately brush it off by claiming it doesn't use
the secrets anyway.

 

Indeed, the company has already outsourced its Lidar needs to San Jose-based
Velodyne. At most, an injunction might impact Uber's plans to make the
technology in-house.

 

Another outcome, of course, is that Waymo fails to convince the jury that
any trade secrets were stolen, and that's the end of that.

 

What is the bigger picture?

This case is being so keenly watched because it already represents an
enormous argument in Silicon Valley, one about the cross-pollination of
ideas and expertise.

 

When extraordinary brains do incredible work at powerful companies, what
right do they have to take those ideas with them?

 

Uber unquestionably benefitted from Mr Levandowski's expertise. But is that
because of trade secrets, or simply because of who he is?

 

The jury won't be asked that question, but the outcome of this case will be
seen by many as providing an answer.--BBC

 

 

 

European shares tumble in new sell off

European markets have followed Asian markets lower on Tuesday as investors
continued to dump shares.

 

London, Frankfurt and Paris all fell sharply at the open with losses of up
to 3%, before recovering some ground. In the US overnight the Dow lost 4.6%.

 

Japan's Nikkei 225 closed down 4.7%.

 

The sell-off began last week after data in the US showed stronger wage
growth, which raised expectations that US interest rates might start to rise
more quickly to tackle inflation.

 

London's FTSE 100 was down 126 points or almost 2% at 7,207 after the first
few hours of trading, while Frankfurt's Dax and Paris's CAC were down 2% and
1.6% respectively.

 

On Monday the FTSE 100 closed at its lowest level since April of last year.

 

The falls follow some good years for investors.

 

In 2017 the Dow in the US was up 25% and London's FTSE 100 rose 7.6%.

 

Live: Global stock markets slump

Asia markets are following Wall Street's lead - but why?

The 2018 economy: What to watch

Will falls turn into rout? Analysis, Kamal Ahmed, economics editor

The softness of markets over the last few days is down to one thing.

 

As monetary policy begins its long journey away from the trillions of pounds
of stimulus pumped into the system to keep the economic ship from the rocks,
shareholders are beginning to wonder how much of their investments are in
companies with strong fundamentals.

 

And how much is simply holding up an asset bubble - frothy prices led ever
higher in an era of ultra low interest rates and cheap money.

 

Fingers are hovering over the "sell" button.

 

And once investors start looking at their portfolio and selling out of the
froth, automatic algorithmic trading tends to "chase the dip".

 

Read more from Kamal here

 

What happened in other Asian markets?

Hong Kong's Hang Seng ended closed 5% lower and South Korea's Kospi index
gave up 2.6%. Australia's benchmark S&P/ASX 200 lost 3.2%.

 

Japan's share index saw steeper falls overnight, with a loss of some 7% at
one point.

 

Unlike elsewhere in the world, where interest rates are beginning to or are
expected to start rising, Japan's immediate economic outlook remains
stagnant. The authorities there said there was little chance of interest
rates being increased.

 

What happened in the US?

Traders returned to their desk in the aftermath of Friday's rout to another
bout of selling.

 

That left the Dow Jones Industrial Average index down 1,175 points, or 4.6%
at the end of Monday's session to 24,345.75.

 

The decline was the largest in percentage terms for the Dow since August
2011, when markets dropped in the aftermath of "Black Monday" - the day
Standard & Poor's downgraded its credit rating of the US.

 

The drop on the Dow was closely followed by the wider S&P 500 stock index,
down 4.1% and the technology-heavy Nasdaq, which lost 3.7%.

 

The White House moved to reassure investors saying it was focused on
"long-term economic fundamentals, which remain exceptionally strong".

 

What has driven the Dow's surge?

US jobs and wages rise in January

The US economy in six charts

How does it affect me?

Even if you don't own shares directly, the chances are that you will be
paying into a pension which is invested in shares and bonds.

 

More than nine million people have auto enrolment pensions, and 12 million
are active members of defined contribution schemes.

 

That means the value of the pension is dependent on the value of the
investments in it.

 

Similarly, anyone who owns shares or funds in an ISA or a SIPP will have
seen the value of their savings fall.

 

But experts point out that investments rise and fall over time, and over the
longer term, it should make little difference.

 

"It is effectively no change for normal investors, in that you have ridden a
wave on the way up, so now is not the time to cash in," said Rebecca
O'Keefe, head of investment at Interactive Investor.

 

"This is unwelcome news, but it is fundamentally a not unexpected reaction
to the euphoria that saw markets rise so fast."

 

Will this have long term impact?

Analysts say that in the short term, investors should be prepared for
choppier stock markets, but doubt whether there will be a prolonged period
of selling.

 

Jane Sydenham, investment director at the stockbrokers Rathbones, said the
recent moves were a "correction" rather than a crash.

 

"What we have to remember is stock markets have had a very smooth ride
upwards and we've not had a fall of more than 3% for 15 months. There's been
a real lack of volatility, which is very unusual."

 

She added that bear markets tend to happen ahead of a recession and at the
moment growth forecasts were being upgraded.

 

Erin Gibbs, portfolio manager for S&P Global Market Intelligence, said:
"This isn't a collapse of the economy.

 

"This is concern that the economy is actually doing much better than
expected and so we need to re-evaluate."--BBC

 

 

 

Homebase owners may close up to 40 stores

Up to 40 Homebase stores could be closed by its Australian owner, putting up
to 2,000 jobs at risk.

 

Wesfarmers paid £340m for the DIY chain in early 2016 and has been
rebranding the stores under the Bunnings name.

 

But after a "disappointing" performance the Australian firm has put Homebase
under review and expects it to lose £97m in the first half of 2018.

 

UK retailers are struggling in the face of rising inflation and fragile
consumer confidence.

 

Several store chains have announced job cuts recently, including supermarket
giants Tesco, Sainsbury's and Asda.

 

Homebase's rival, B&Q, last week said it was cutting 200 jobs at its head
office in Hampshire as part of a cost-cutting drive.

 

Homebase bought by Australia's Wesfarmers

B&Q to cut 200 head office jobs

Wesfarmers said it had written down the value of the Homebase chain by £454m
as a result of its poor trading.

 

"The Homebase acquisition has been below our expectations which is obviously
disappointing," Wesfarmers managing director Rob Scott said.

 

'Crazy price'

Richard Hyman, retail analyst at RAH Advisory, said: "The DIY sector
benefits from a reasonably buoyant housing market, which we haven't had for
some time."

 

However, this was very well known to Wesfarmers, who paid a "crazy price"
for Homebase, he said.

 

But Mr Hyman said that Wesfarmers' strategy of improving service levels and
cutting down on promotions was introduced too quickly, although it could
still work in the long term.

 

Wesfarmers admitted it has found the UK market "very different and more
fragmented" than Australia, according to Hugh Dive, chief investment officer
at Atlas Funds Management.

 

Wesfarmers' shares fell by up to 5% in Australian trading.

 

However, shares in Kingfisher, which owns rival DIY chain B&Q, rose 3%.
Analysts said B&Q could benefit, if Homebase closes significant numbers of
stores.

 

Another quoted rival, Travis Perkins, which owns Wickes, saw a modest 0.5%
rise.

 

Homebase has 250 stores across the UK and employs 12,000 people.

 

Wesfarmers will announce the result of its review in June, so staff will
have to wait until then to find out which stores are to close.

 

However, the Australian firm said it had been encouraged by the performance
of stores that had begun trading under the Bunnings name.--BBC

 

 

 

BP profits double on higher oil price

BP's annual profits more than doubled in 2017, largely thanks to the global
increase in oil prices.

 

The oil giant made $6.2bn ($4.4bn), up from $2.6bn made during the previous
12 months.

 

Chief executive Bob Dudley hailed it "as one of the strongest years in BP's
recent history".

 

BP opened seven new oil and gas fields during 2017 and its oil production
rose 12% to 247 million barrels of oil per day.

 

Last week, BP announced that it hoped to double North Sea oil production to
200,000 barrels by 2020 through a variety of projects.

 

"We enter the second year of our five-year plan with real momentum," Mr
Dudley said.

 

"We are increasingly confident that we can continue to deliver growth across
our business, improving cash flows and returns for shareholders out to 2021
and beyond."

 

Its fourth quarter profits rose to $2.1bn, compared with $400m over the same
three-month period in 2016.

 

Oil companies have been boosted by the rising price of crude oil.

 

In early January, the price of oil hit $70 a barrel for the first time since
December 2014.

 

Prices have been rising since late 2016 when members of the Opec oil cartel
made a co-ordinated effort to curb their output.

 

Oil price

BP spent years in recovery mode after the 2010 Deepwater Horizon oil spill
in the Gulf of Mexico.

 

Eleven people were killed and 17 injured in an explosion with an estimated
4.9 million barrels of oil leaking into the Gulf as a result.

 

The total cost to the company came to more than $60bn and it had to sell off
assets in order to pay the bill.--BBC

 

 

 

UK Diesel car sales fall by 25% in January

Sales of new diesel cars fell by 25% in January with the industry blaming
"confusion" over government policy.

 

Diesel sales were 25.6% lower than in January 2017, dragging overall sales
down 6.3%, an industry body reported.

 

The Society for Motor Manufacturers and Traders said confusion over
government policy was causing buyers to hesitate.

 

Diesels have been the focus of air quality concerns, prompting speculation
that owners could face higher taxes or limits on where they can be used.

 

The government has stated a long-term goal to ban the sale of new cars
running solely on petrol or diesel by 2040.

 

In November's budget, the government announced customers buying new diesel
cars will face a one-off tax increase in April, unless the vehicles meet a
higher standard on emissions. Company car tax for diesels was also
increased.

 

London has already introduced a higher congestion charge for higher
polluting vehicles, and other UK cities including Oxford have discussed
limiting their access to city centres.

 

The Society for Motor Manufacturers and Traders (SMMT) said replacing older
cars with new diesels would still reduce pollution and emissions as they are
cleaner than older vehicles.

 

The SMMT said demand for cars that run on petrol was 8.5% higher this
January than a year earlier, but that positive move was offset by the steep
decline in demand for diesels, which account for around a third of the
market.

 

Sales of "alternatively fuelled vehicles" including electric cars rose
23.9%, but they still account for only 5.5% of the market.

 

car registration

SUVs were the only type of vehicle to see growth, with demand up 6.6%. SUVs
accounted for a fifth of all new car registrations.

 

"The ongoing and substantial decline in new diesel car registrations is
concerning, particularly since the evidence indicates consumers and
businesses are not switching into alternative technologies, but keeping
their older cars running," SMMT chief executive Mike Hawes said.

 

"Given fleet renewal is the fastest way to improve air quality and reduce
CO2, we need government policy to encourage take up of the latest advanced
low emission diesels as, for many drivers, they remain the right choice
economically and environmentally," he added.

 

UK car sales see first drop for six years

What's gone wrong in the UK car market?

How toxic is your car exhaust?

New car sales overall fell by 5.7% in 2017. But annual sales were still
higher than in every year during 2007-2014.

 

car sales

Howard Archer, chief economic advisor to the EY Item Club said that January,
representing the tenth successive month of declining car sales, pointed to
"a serious loss of momentum in the sector". Sales declined even more sharply
in October, November and December.

 

He said the government's environmental strategy was only part of the
explanation.

 

"Even allowing for uncertainty over government policy on diesel cars
affecting fleet sales, it appears that that businesses have become more
reluctant to replace or add to their fleets amid a highly uncertain economic
and political outlook."--BBC

 

 

 

 


 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 


 <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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