Major International Business Headlines Brief::: 25 January 2018

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Major International Business Headlines Brief::: 25 January 2018

 


 

 


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*  South Africa finance minister warns country will feel pain of tough
budget

*  Ivory Coast mining sector turnover rose 11.5 pct in 2017

*  South African rand pauses rally, weakens 0.25 percent

*  Kenyan shilling weakens as banks cover short dollar positions

*  Gold hits 1-1/2-year high as dollar slumps to 3-yr low

*  JPMorgan plans expansion into Ghana and Kenya

*  Ronaldo-brand hotel chain goes to Morocco in global expansion

*  Unilever and consumer rivals raise bets on Nigeria

*  Steinhoff's Conforama unit secures 115 mln euros financing

*  South Africa's new political certainty boosting rand: cenbank governor

*  Fall in tourists to US 'blamed on Trump'

*  JP Morgan boss in new warning on Brexit job losses

*  Polish PM says UK must pay for EU access

*  UK PM seeks 'safe and ethical' artificial intelligence

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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South Africa finance minister warns country will feel pain of tough budget

DAVOS, Switzerland (Reuters) - South Africa’s budget has involved making
tough decisions to stabilise the country’s debt and the country will feel
some pain as a result, its finance minister said on Wednesday.

 

The South African economy, Africa’s second largest and most industrialised,
has slowed to a near standstill.

 

Finance Minister Malusi Gigaba said the upcoming budget, to be unveiled in
the spring, would involve interventions in order to boost confidence and
grow the economy, as part of what he described as “a difficult fiscal
framework”.

 

“What I will be doing at the budget will be going to announce the tough
decisions to stabilise the debt but reduce the budget deficit,” he said,
speaking on the sidelines of the World Economic Forum in Davos.

 

“We have to announce tough decisions and South Africans will have to bear
some pain (as a result) of some of the decisions we are going to have to
announce in order to stabilise our debt,” he said. He did not give details
of the proposals.

 

President Jacob Zuma’s reign has been beset by allegations of
influence-peddling in government and mismanagement of state-owned
enterprises which have dented consumer and business confidence. Zuma has
denied allegations that he has allowed his friends to influence the
appointment of ministers.

 

South Africa’s economy grew 2.5 percent in the three months to the end of
June, after contracting by 0.6 percent in the first quarter and by 0.3
percent in the final quarter of 2016.

 

But since South Africa emerged from its 2009 recession, growth has fallen
short of the government’s target of five percent, the level economists say
is needed to curb unemployment.

 

RATING

A Moody’s rating review could see South Africa’s rating cut to junk and the
country’s bonds ejected from a key index. That could in turn cause capital
to flee the country, raising bond yields and pressuring the currency.

 

“We are certainly going to avoid it. I‘m very confident,” Gigaba said when
asked about the possibility of a downgrade.

 

He said ratings agencies had previously expressed concern over political and
policy certainty, as well as the government’s commitment to fighting
corruption.

 

Gigaba said these issues had largely been resolved after Cyril Ramaphosa won
the race in December to be the new leader of the ruling African National
Congress (ANC).

 

Earlier this month the new ANC leader said South Africa wanted to attract
foreign investors to help it kick-start economic growth and will crack down
on corruption.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Ivory Coast mining sector turnover rose 11.5 pct in 2017

ABIDJAN (Reuters) - Ivory Coast’s mining sector turnover rose by 11.5
percent in 2017, an increase achieved mainly via exports of gold, manganese
and nickel, the government spokesman said on Wednesday.

 

“The mining sector announced a sales revenue of 539 billion CFA francs
($1.02 billion) in 2017, compared to 483 billion in 2016,” Government
Spokesman Bruno Nabagne Kone said after a cabinet meeting.

 

Manganese output increased by a whopping 146 percent, reaching 510,000
tonnes in 2017. Gold output rose to 25.395 tonnes in 2017, 2.15 percent
higher than in 2016. Nickel production, which started in 2017, was at
379,766 tonnes.

 

Kone added that in 2017, Ivory Coast exported five shipments of diamonds
worth 11,156 carats in total, earning $2.1 million.

 

Ivory Coast, the world’s top cocoa producer, is seeking to develop its
long-neglected mining sector to diversify its sources of revenue.

 

Diamond activity resumed in April 2014, after the lifting of an
international ban that had been in place because of wars and crises that
divided the country between 2002-2011.

 

“Our country’s mining sector has a lot of potential. In a few years Ivory
Coast will figure amongst the most important mineral producers on the
continent,” said Kone.

 

Australia’s Perseus Mining Limited is set to open its Sissingue gold mine in
the north of the country in the first quarter of 2018, Kone said.

 

He reaffirmed that around 200 billion CFA francs would be invested in the
country’s Ity gold mine to boost its performance and hit a potential of 50
tonnes. Other projects are underway in bauxite mining, nickel and iron, Kone
added.

 

($1 = 528.8800 CFA francs)

 

 

 

South African rand pauses rally, weakens 0.25 percent

JOHANNESBURG (Reuters) - South Africa’s rand was slightly weaker in early
deals on Thursday, pausing a rally that lifted the local unit to its
strongest level since mid-2015.

 

At 0626 GMT, the rand traded at 11.8800 versus the dollar, 0.25 percent
weaker from its overnight close in New York.

 

The currency has surged since Cyril Ramaphosa won the race to succeed Jacob
Zuma as African National Congress leader last month, putting him in pole
position to become the country’s next president.

 

“This morning so far a relatively quiet session, range 11.85-11.8950. The
market could be getting ahead of itself and would look for some local
importer interest this morning,” Nedbank said in a note.

 

Government bonds were flat, and the yield for the benchmark instrument due
in 2026 at 8.340 percent.

 

 

 

Kenyan shilling weakens as banks cover short dollar positions

NAIROBI (Reuters) - Kenya’s shilling weakened on Thursday due to commercial
banks covering their short dollar positions a day after the shilling
strengthened to a one-year high.

 

At 0623 GMT, commercial banks quoted the shilling at 102.55/75 to the
dollar, compared with Wednesday’s close of 102.20/40, which was also a
one-year high.

 

 

Gold hits 1-1/2-year high as dollar slumps to 3-yr low

(Reuters) - Gold prices on Thursday edged to their highest since August,
2016, buoyed as the U.S. dollar hit three-year lows after comments by U.S.
Treasury secretary Steven Mnuchin that he welcomed a weaker currency.

 

Spot gold had risen 0.2 percent to $1,361.10 per ounce by 0258 GMT, after
hitting its highest since Aug. 5, 2016 at $1,361.87.

 

U.S. gold futures were up 0.3 percent at $1,360.60 per ounce.

 

The dollar slumped after Mnuchin told the World Economic Forum in Davos on
Wednesday that “obviously a weaker dollar is good for us as it relates to
trade and opportunities”. His comments were seen by markets as a departure
from traditional U.S. currency policy.

 

“Investors were more than willing to pay hefty insurance premia as a hedge
against the inflationary impacts from a hapless dollar,” said Stephen Innes,
APAC head of trading at OANDA.

 

 

“With traders’ base case scenario to sell the dollar at all costs, gold
prices should remain well supported on dips and could be poised to move even
higher on the next U.S. dollar wobble.”

 

The dollar index, which measures the greenback against a basket of
currencies, was down 0.2 percent, hitting its weakest since December, 2014
at 89.053 on Thursday.

 

“We suspect the greenback could move lower still ... Conversely, gold’s
charts look increasingly constructive and could likely push higher on
technicals alone,” said INTL FCStone analyst Edward Meir.

 

The immediate focus was on the European Central Bank’s policy setting
meeting later in the day as markets look for any signs it is worried about
the appreciating euro.

 

The euro zone economy may be roaring ahead but a rapidly strengthening euro
may see ECB President Mario Draghi pour cold water on the view the bank is
speeding towards an interest rate hike.

 

“The ECB meeting on Thursday will be pivotal (for gold), as it could spark
the euro (and gold) higher, especially if the central bank signals a policy
shift in its wording,” Meir said.

 

A stronger euro potentially boosts demand for gold by making dollar-priced
bullion cheaper for European investors.

 

Spot gold is expected to gain more to $1,381 per ounce, as it has broken a
resistance at $1,354, said Reuters technical analyst Wang Tao.

 

Among other precious metals, spot silver was down 0.2 percent at $17.50,
after touching more than four-month highs at $17.61 in the previous session.

 

Platinum rose 0.3 percent to $1,015.24, after hitting its highest since
Sept. 8 at $1,021.20 the session before.

 

Palladium advanced 0.1 percent to $1,111.50.

 

 

JPMorgan plans expansion into Ghana and Kenya

LONDON (Reuters) - JPMorgan Chase & Co plans to expand its African presence
into countries including Ghana and Kenya, Chief Executive Jamie Dimon said
in an interview on Wednesday.

 

“You’ll see us open in some countries we are not in, in Africa you’ll be
hearing about some of that stuff,” Dimon told Bloomberg Television on the
sidelines of the World Economic Forum meeting in Davos, Switzerland.

 

Dimon said the bank would target Ghana and Kenya, two countries in which
local regulators have previously blocked the U.S. banking giant’s expansion
plans, according to media reports at the time.

 

The announcement follows JPMorgan’s unveiling of a $20 billion investment
plan on Tuesday which will see it hike wages, hire more, and open new
branches as it takes advantage of sweeping changes to U.S. tax law and a
more favorable regulatory environment.

 

The five-year plan will see the U.S. bank ramp up overseas investment in
addition to its domestic growth plans, after it finished cleaning up
troubled mortgages following the 2007-09 financial crisis.

 

 

 

Ronaldo-brand hotel chain goes to Morocco in global expansion

LISBON (Reuters) - Portuguese soccer star Cristiano Ronaldo and the
country’s top hotel chain, Pestana, will open a new hotel under the Pestana
CR7 venture in Marrakesh next year and hope to double the brand in three to
five years.

 

 

Ronaldo is following other sports stars who have invested in hotels,
including tennis player Andy Murray and soccer’s Gary Neville and Ryan Giggs
-- but Ronaldo’s venture has global ambitions.

 

 

The new project, the fifth hotel under the Pestana CR7 brand - a trademark
combination of Ronaldo’s initials and jersey number -- will rent the
160-room hotel for 20 years and manage it, said Pestana Hotel Group Chief
Development Officer Jose Roquette. Moroccan investor M Avenue will finance
and own it.

 

“It is a brand that will grow ... In the next three to five years we will
quickly double the number of the hotels,” Roquette told reporters,
mentioning Ibiza and Milan among possible locations.

 

Pestana, which has a hotel in Casablanca, is also opening a separate 4-star
hotel in Marrakesh and hopes to expand further in the north African country.

 

Pestana CEO told Reuters in December the joint venture should help open new
markets in Asia and the Middle East, where Ronaldo is extremely popular, as
well as reinforce its expansion into Spain and the United States.

 

Ronaldo and Pestana will open two hotels this year in Madrid and New York,
having already tested the market at home in Portugal, which is enjoying a
tourism boom, with an initial two hotels - in Madeira and Lisbon.

 

Pestana is a family-owned chain of more than 90 upmarket hotels. It aims to
open 20 more, including under the CR7 brand, on an investment of 200 million
euros by the end of the decade, mostly in Portugal, Roquette said.

 

 

Unilever and consumer rivals raise bets on Nigeria

LAGOS (Reuters) - With Africa’s most populous country out of recession, and
the wider region on the path to growth, the world’s consumer goods companies
are looking to cash in.

 

Last month, Unilever opened a $12 million Blue Band margarine factory in
Nigeria’s southwestern state of Ogun so that it does not have to import
margarine from Ghana, as it has in recent years. It is also in talks with
suppliers to switch to a locally-sourced flavouring agent for its
toothpaste.

 

These are examples of how the Anglo-Dutch group, like its global rivals, has
been forced to adapt its business to cope with a central bank decision to
restrict access to foreign currency for the import of certain products since
2015 to boost the economy.

 

Another way Unilever is tailoring its operations to the local market is by
offering smaller pack sizes of a range of products, from tea to stock cubes,
to appeal to more customers in a country and region plagued by poverty and
inequality.

 

Shops in Nigeria’s commercial capital Lagos sell packets containing just two
Unilever-produced tea bags or two stock cubes, for example. “These are all
packs that we use to gain penetration and to develop the market,” said Yaw
Nsarkoh, managing director of Unilever Nigeria.

 

But again, the firm is not alone in such tactics; the same shops stock
Nestle cereals ranging in size from 50 grams to 250 grams and 1 kilogram.

 

Britain’s PZ Cussons meanwhile has rolled out a range of small pack sizes
over the last three years for products from soap and detergent to milk and
vegetable oil. “They have been popular and the biggest contributor in sales
to each brand,” said Christos Giannopoulos, CEO of the company’s Nigerian
business.

 

How best to navigate the African consumer market is on the agenda to be
discussed by corporate leaders at the World Economic Forum in the Swiss
resort of Davos this week.

 

The potential prize is alluring. It helps explains why these companies, plus
the likes of Procter & Gamble, Diageo and Danone, have long operated in
Nigeria and are willing to go to some lengths to build brands and market
share.

 

The market is huge: Nigeria has about 190 million people, and that is
expected to rise to 300 million by 2030 and 400 million by 2050, according
to U.N. data, which would make it the world’s third most populous country
after China and India.

 

Companies are positioning themselves in the expectation that low household
spending will rise as the economy grows and people come out of poverty and
become consumers of packaged goods.

 

“If you look at the per capita consumption levels and the penetration levels
of consumer categories in Nigeria generally, they are below many comparable
markets,” said Nsarkoh, pointing to India as an example.

 

EMERGING FROM DOWNTURN

    But Nigeria and Sub-Saharan Africa has not been the mecca some
envisioned. A continent-wide downturn since 2014, tied to low commodity
prices, has dampened hopes for companies.

 

    Net earnings of 28 consumer companies in nine African countries have
grown just 2 percent per year in local currency in the five years to 2016,
and even less in dollar terms, according to Exotix, an emerging
markets-focused financial services firm.

 

But Nigeria, Africa’s top oil producer, last year emerged from its first
recession in 25 years which was largely caused by low crude prices. The
World Bank sees the country’s economy growing from 1 percent in 2017 to 2.5
percent this year.   

 

    Sub-Saharan Africa’s economy is meanwhile projected to pick up this
year, with the World Bank predicting growth of 3.2 percent in 2018 and 3.5
percent in 2019, up from 2.4 percent in 2017, due to firmer commodity
prices.

 

In Nigeria, doing business has been particularly tough since 2015, when the
foreign exchange curbs and the devaluation of the naira currency meant the
cost of importing certain goods, which the government wanted to be grown
locally, increased markedly.

 

However Unilever Nigeria’s financial results suggest that some of the
tactics adopted to counter this may be paying off.

 

Its operating profit almost tripled to 9.2 billion naira ($30.1 million) in
the first nine months of 2017, the latest figures available, after growing
25 percent in 2016. Before that, profits were flat in 2015 and fell 40
percent in 2014.

 

   Fola Abimbola, an analyst at Nigerian bank FCMB, credited the latest
profit rise to price increases, taken to offset the impact of currency
devaluation, as well as the use of smaller pack sizes.

 

“All of these companies have been selling smaller packs because, during the
recession, people have less money to spend. People opt for smaller packs,”
said Abimbola.

 

The use of smaller packaging is not new in emerging markets, but industry
experts say that in Sub-Saharan Africa, it has not yet been widely adopted
beyond the beer industry, and expect it to catch on further in coming years.

 

MAIZE, MILLET, PALM OIL

Unilever’s Nsarkoh said 90 percent of its Nigerian goods were now
manufactured locally, up from 80 percent about three years ago, to make its
business more resilient. As well as margarine, locally-made products include
soap, tea and toothpaste.

 

    In a sprawling manufacturing plant in the bustling Ikeja district of
Lagos, for example, Unilever workers clad in white lab coats oversee
production lines capable of producing hundreds of tubes of Close-Up
toothpaste a minute.

 

    Among rivals, Swiss group Nestle said that 41,600 local farmers suppled
maize, soybean, sorghum and millet to its Nigerian factories. It said 82
percent of its inputs were sourced locally and that it aimed to extend to
100 percent where possible. It cited Golden Morn cereal, made from maize
farmed in the northwestern state of Kaduna, as a product in which the goal
had been achieved.

 

    PZ Cussons meanwhile has a stake in a 26,000-hectare palm oil plantation
in the state of Cross River. Half of its vegetable oil is made using local
palm oil, said Giannopoulos.

 

 

 

Steinhoff's Conforama unit secures 115 mln euros financing

PARIS (Reuters) - French furniture chain Conforama, which is a unit of
troubled South African group Steinhoff, said it had reached agreement with
Tikehau Capital for a financing line of 115 million euros ($141.9 million)
over three years.

 

The deal comes two weeks after Conforama had agreed to sell a 17 percent
stake in online fashion retailer Showroomprive.com to French supermarket
retailer Carrefour for 79 million euros.

 

“The Conforama group now has almost 200 million euros of additional
liquidity, ensuring its long-term financial independence and stability,”
Conforama chief executive Alexandre Nodale said in a statement.

 

“This will allow the group to continue to carry out its multi-channel
development projects in France and in each of the countries where it
operates,” he added.

 

Steinhoff, owner of more than 40 retail brands including Poundland in
Britain, is trying to plug a liquidity gap after admitting “accounting
irregularities” last month, which triggered an 85 percent share price slide
for the group.

 

Earlier this month, Steinhoff secured a 60 million euros lifeline for its
European operations.

 

Conforama has 14,000 employees and 315 stores. The bulk of its stores are in
France while it is also present in Spain, Switzerland, Portugal, Luxembourg,
Italy, Croatia and Serbia.

 

($1 = 0.8106 euros)

 

 

 

South Africa's new political certainty boosting rand: cenbank governor

DAVOS, Switzerland (Reuters) - The appointment of a new leader of South
Africa’s ruling party has removed political uncertainty that contributed to
the depreciation of the rand currency and has been welcomed by investors,
the country’s central bank governor said on Wednesday.

 

The new leader of the ruling African National Congress (ANC), Cyril
Ramaphosa, narrowly won the race to succeed President Jacob Zuma as party
leader in December.

 

South Africa’s rand currency has surged since Ramaphosa - the deputy
president - won the contest. It steadied against the dollar early on
Wednesday, holding at a two-and-a-half-year high. At 0645 GMT it traded at
12.0300 per dollar.

 

“The depreciation of the rand last year was overdone and it was overdone
because there was so much political uncertainty,” said South Africa Reserve
Bank Governor Lesetja Kganyago.

 

“High frequency indicators in South Africa do show that the South African
economy is demonstrating a resurgence,” he told Reuters speaking on the
sidelines of the World Economic Forum meeting of business and political
leaders in Davos.

 

“For a long time we had spelled out that the exchange rate is sensitive to
the political uncertainty. The uncertainty is gone,” he added.

 

 

Fall in tourists to US 'blamed on Trump'

Between 2015 and 2017, just two of the top 12 global destinations - the US
and Turkey - experienced declines in long-haul travel, according to the
Visit US coalition.

Travel to the US is falling, a decline some in the tourism industry blame on
US President Donald Trump.

 

The number of international visitors fell by 4% in the first seven months of
2017, according to the US National Travel & Tourism Office.

 

The trend occurred across all regions, with Africa and the Middle East
reporting some of the most dramatic declines.

 

The decrease in the US contrasts with rising tourism globally.

 

Some have dubbed the fall in the US a "Trump slump", pointing to the
president's America First rhetoric and anti-immigrant comments, as well as
tighter visa rules for some countries and other restrictions.

 

"When people travel, they're looking for a pleasant emotional experience,"
said Vincent Wolfington, former chair of the World Travel and Tourism
Council.

 

"The perception is it's probably too much trouble at this point in time to
visit the US."

 

What are the trends?

After years of steady increases, international travel to the US peaked in
2015 at 77.5 million visitors.

 

The number of travellers fell about 2% in 2016, a decline that accelerated
in the first seven months of 2017, according to the National Travel and
Tourism figures.

 

The fall is not uniform.

 

Visitors from Canada - typically the source of the greatest number of
foreign travellers - increased by 4.6% year-on-year through July, according
to the US.

 

But visits from the next two major tourist markets - Mexico and the UK -
slipped in the period.

 

Travel from China, which accounted for the fifth highest number of visitors,
also fell, while it held steady in Japan, the number four market.

 

Why is this happening?

In the important UK market, a weaker pound is likely dissuading visitors,
said David Tarsh, a spokesman for ForwardKeys, a Spain-based company that
analyses travel patterns.

 

But broadly speaking, the dollar's value has fallen sharply this year,
making it cheaper for most foreigners to travel in the US than it was in
2016.

 

Though the dollar remains relatively strong compared to five years ago, Mr
Wolfington said he thinks sentiment is the driving factor, as global surveys
show approval of US leadership has fallen.

 

Trump slump? US tourism industry fears downturn

Why is the US dollar falling?

He said US tourism suffered similarly after the attacks on the World Trade
Center in 2001, when the US emphasised border security and launched the
unpopular invasion of Iraq.

 

"Non-US citizens got the impression they were not welcome in the US," said
Mr Wolfington, who identifies as a political independent. "Today we're
facing the same situation."

 

Mr Tarsh said ForwardKeys has not been able to isolate the impact of the
president's policies and rhetoric. But the firm expects long-haul bookings
to the US to continue to lag the rest of the world in 2018.

 

"We can't say that it is causative, but at the same time we can't see how it
could be helpful," he said.

 

How does this compare globally?

The decline in foreign travellers makes the US an outlier.

 

International tourist arrivals increased by 7% last year, led by gains in
Europe, the United Nations reported recently.

 

The report, based on preliminary figures, said Spain is on track to replace
the US as the number two travel destination, after France.

 

Between 2015 and 2017, just two of the top 12 global destinations - the US
and Turkey - experienced declines in long-haul travel, according to the
Visit US coalition, a collection of travel industry groups that are drawing
attention to the fall.

 

Turkey tourism: an industry in crisis

UK tourism sector booms as sterling falls

The coalition is casting its proposals as an economic imperative for the US.

 

"Our guiding principle is that we can have strong national security and
still welcome legitimate international visitors," Roger Dow, president of
the US Travel Association, said in a statement, which called the decline
"troubling".

 

Spending by international visitors has fallen 3.2% - or by more than $250m-
in the first 10 months of 2017, according to the Commerce Department.

 

The World Travel and Tourism Council says tourism contributed about 8% to
gross domestic product in 2016.--BBC

 

 

 

JP Morgan boss in new warning on Brexit job losses

The chief executive of JP Morgan has told the BBC it could cut its 16,000 UK
workforce by more than a quarter if financial rules diverge after Brexit.

 

Jamie Dimon said the US bank had not needed to make drastic cuts on day one
after the EU referendum.

 

But he revised his long-term estimate of job losses upwards if Brexit talks
failed to produce an outcome close to the current arrangements.

 

Mr Dimon added that such a scenario would harm London as a financial hub.

 

The boss of the US's most valuable bank had warned in the run-up to the
referendum that 4,000 jobs could go if the UK voted to leave the EU.

 

Since then, JP Morgan has revised that estimate down to between 500 and
1,000 jobs, leading many to dismiss his warnings as part of "Project Fear".

 

In an interview with the BBC at the World Economic Forum in Davos, Mr Dimon
acknowledged that on closer analysis, it turned out the bank did not need to
make such drastic moves on day one of Brexit.

 

But he added that could go up again. "If we can't find reciprocal
recognition of rules - and there are a lot of people who are mad with the
Brits for leaving and want their pound of flesh - then it could be bad. It
could be more than 4000," he said.

 

Macron charm

When asked if that outcome would represent a real threat to the future
success of London as a financial centre, he gave a single word answer:
"Yep."

 

A government spokesperson said it was determined to maintain London's
"competitiveness now and in the future".

 

That includes a partnership with the EU "based on our rules and regulations
being the same at the start and on our shared belief in free trade and a
commitment to high regulatory standards".

 

But if Jamie Dimon's warning comes to pass, where would these jobs go?

 

JP Morgan, along with fellow US bank Goldman Sachs, has already indicated
that Frankfurt will be the major beneficiary.

 

But in common with many chief executives at the Swiss ski resort, Jamie
Dimon is increasingly impressed with the offer from the new darling of
Davos, French President Emmanuel Macron.

 

Macron invited Mr Dimon, along with over a hundred international chief
executives, to the Palace of Versailles this week and the charm offensive
appears to be working.

 

According to Mr Dimon, it's not just style but substance.

 

"Here's a guy who is 39 years old who formed his own party and within a year
won a parliamentary majority," Mr Dimon said.

 

"He spoke and answered questions for two hours and was pro-business,
pro-capital, pro-reform.

 

"It's a shocking change from what came before and if Macron had been around
before maybe you would have had the British staying in," he added.

 

That sounds fanciful to UK ears, but the positive impact the new resident at
the Elysee Palace has made on business leaders in Davos is hard to over
emphasise.

 

'Kick-ass'

Of course, the main event for many is yet to come - the arrival of Donald
Trump who will give the closing address on Friday.

 

Trump is the first sitting US president to attend Davos since Bill Clinton
and his appearance is all the more surprising given his previous public
scorn for the gathering of the pro-globalisation elite it attracts.

 

His speech has been described as "kick ass" by his advisers.

 

Global leaders including Narendra Modi of India and Justin Trudeau of Canada
have used their time on the platform to warn against Trump's protectionist
America First approach.

 

In Jamie Dimon, the President has a supporter amidst a fairly hostile crowd.

 

He described Trump's complaints about global trade and the recent imposition
of new tariffs on solar panels and washing machines as "shots across the
bows" signalling legitimate concerns.

 

"When America talks about free trade, it means reciprocal trade and we don't
have that. Foreign companies can buy 100% of US ones but not the other way,
tariffs are unequal and I think he's right to raise that."

 

It's worth remembering that Trump's recent corporation tax cuts from 35% to
21% will create a windfall of $20bn for JP Morgan over the next five years.

 

Dimon has pledged that money will be used in part to increase wages for
lower paid workers in the retail part of JP Morgan Chase and to increase
lending to lower income borrowers.

 

He told the BBC that the bonus pool for the high rollers at the investment
bank would not increase as a result of Trumps tax largesse. That will all be
worth monitoring but if correct is the kind of "trickle down" that will get
two thumbs up from the Whitehouse.

 

Jamie Dimon is not a supporter of Trump on all trade issues, and would hate
to be called a protectionist, but if we are going to get a punch up on
Friday with Trump in one corner and the rest of the world in the other -
it's clear which corner Jamie Dimon will be in.--bbc

 

 

 

Polish PM says UK must pay for EU access

The Polish Prime Minister has said Britain will have to continue making
financial contributions to the European Union if it wants to enjoy
privileged access to the single market.

 

Mateusz Morawiecki said the EU would take a tough stance on Britain's desire
for a comprehensive free trade deal.

 

He said he wanted a positive relationship, but that costs would be attached.

 

But a UK minister told me Britain would not agree to that "at the outset".

 

When I spoke to Mr Morawiecki in Davos I asked him whether Britain would
have to pay to get "a good deal".

 

"I hope so," he told me.

 

"There has to be some price for full access and to what extent this access
is going to be available has to be made dependent on some other
contributions, potentially including this financial contribution."

 

Such a move could be controversial among many Brexit supporters in Britain -
a point Mr Morawiecki agreed with.

 

"Yes, but you cannot have your cake and eat the same cake," he said.

 

 

The Polish PM's comments come a few hours after David Davis, the Secretary
of State for Exiting the EU, rejected any plans to continue making
contributions.

 

Mr Davis said Britain was a "proud country" and would not pay "some sort of
Danegeld".

 

A Danegeld was a tax levied on the English to pay off Viking raiders.

 

Mr Morawiecki, who was formerly an adviser to Donald Tusk, the president of
the European Council, said he believed there was a small chance that Britain
could remain in the EU.

 

"I still have a little bit of hope that there will be a way of keeping the
UK as part of the EU," he said.

 

"I fully respect the decision from the referendum, but maybe there will be
other ways for the UK [to remain] as part of the EU.

 

"Because I think it's in the interests of the trans-Atlantic community - the
pax-Americana, pax-European peace type of model - and for the rest of the
world.

 

"It is extremely important for security, and global trade, and positive
trends in the world."

 

He said if there was no reversal of the referendum - which the UK government
has categorically ruled out - then he hoped "the deal between the UK and EU
will be as positive for both parties as possible, because I don't want to
punish anybody".

 

I asked the Polish PM whether Britain could have its own bespoke deal, which
Theresa May has signalled she wants.

 

"I would like to indicate two other nations and countries which are [in a
different position] - one of them is part of the EEA [the European Economic
Area] like Norway, and they do have some financial contribution for the
whole of the EU.

 

"The other one is where we are today, Switzerland, which has a series of
bilateral agreements.

 

"So I think there are examples of how the new agreement can be shaped so
that there is a real convergence, a real integration between the UK and the
EU, despite Brexit."

 

Britain is a net contributor to the EU budget and government sources have
told me that it is likely the UK will have to pay for special access -
possibly via contributions to specific bodies such as for medicines -
despite the public position that no payments will be made.

 

The issue is very important for Poland as it is a net recipient of EU funds
and there are concerns that funding could be cut when Britain leaves the EU.

 

Dr Liam Fox, the International Trade Secretary, said that during the Brexit
negotiations both sides would set out - often opposing - positions, and that
compromises would have to be reached.

 

"It sounds to me like the opening shots of a negotiation and there is a long
way to go in that," he told me in response to Mr Morawiecki's comments.

 

"There is no way the UK would agree at the outset to do that.

 

"What we are looking at is a balance.

 

"The UK will want access [to the EU] in services, particularly financial
services.

 

"The European Union will want access to Britain's goods market, given that
they have got a £82bn surplus with the United Kingdom.

 

"These things will be netted out over trade agreements.

 

"In a trade agreement both sides have to give something otherwise you don't
get an agreement.

 

"As we have seen with the TPP [the Trans-Pacific Partnership] agreement, it
can sometimes take a few little bumps before people get to the final place.

 

"So I think we don't assume that any opening positions will be the final
positions."--BBC

 

 

 

UK PM seeks 'safe and ethical' artificial intelligence

The prime minister is to say she wants the UK to lead the world in deciding
how artificial intelligence can be deployed in a safe and ethical manner.

 

Theresa May will say at the World Economic Forum in Davos that a new
advisory body, previously announced in the Autumn Budget, will co-ordinate
efforts with other countries.

 

In addition, she will confirm that the UK will join the Davos forum's own
council on artificial intelligence.

 

But others may have stronger claims.

 

Earlier this week, Google picked France as the base for a new research
centre dedicated to exploring how AI can be applied to health and the
environment.

 

Facebook also announced it was doubling the size of its existing AI lab in
Paris, while software firm SAP committed itself to a 2bn euro ($2.5bn;
£1.7bn) investment into the country that will include work on machine
learning.

 

Meanwhile, a report released last month by the Eurasia Group consultancy
suggested that the US and China are engaged in a "two-way race for AI
dominance".

 

It predicted Beijing would take the lead thanks to the "insurmountable"
advantage of offering its companies more flexibility in how they use data
about its citizens.

 

Theresa May is expected to meet US President Donald Trump at the Davos event
on Thursday.

 

'Unthinkable advances'

The prime minister will base the UK's claim to leadership in part on the
health of its start-up economy, quoting a figure that a new AI-related
company has been created in the country every week for the last three years.

 

In addition, she is expected to say that the UK is recognised as first in
the world for its preparedness to "bring artificial intelligence into
government".

 

However, she will recognise that many people have concerns about potential
job losses and other impacts of the tech, and declare that AI poses one of
the "greatest tests of leadership for our time".

 

"But it is a test that I am confident we can meet," she will add.

 

"For right across the long sweep of history from the invention of
electricity to advent of factory production, time and again initially
disquieting innovations have delivered previously unthinkable advances and
we have found the way to make those changes work for all our people," Mrs
May will say.

 

This includes through a new UK advisory body, the Centre for Data Ethics and
Innovation.

 

Academics and tech industry leaders differ in opinion about the risks
involved.

 

At one end of the scale, Prof Stephen Hawking has warned that AI could
"spell the end of the human race", while Tesla's Elon Musk has said that a
universal basic income - in which people get paid whether or not they work -
has a "good chance" of becoming necessary as jobs become increasingly
automated.

 

But Facebook's AI chief Yann LeCun has said society will develop the "checks
and balances" to prevent a Terminator movie-like apocalypse ever coming to
pass.

 

And earlier this week, Google's former chief Eric Schmidt told the BBC he
did not believe predictions of mass job losses would occur.

 

"There will be some jobs eliminated but the vast majority will be
augmented," he explained.

 

"You're going to have more doctors not fewer. More lawyers not fewer. More
teachers not fewer.

 

"But they are going to be more efficient."

 

While many tech industry leaders acknowledge there will be a need for new
rules and regulations, they also suggest it may be premature to introduce
them in the short term.

 

Microsoft, for example, has launched a book called The Future Computed to
coincide with the Davos event.

 

It proposes that it be given time to develop rules to govern its own AI work
internally before legislation is passed.

 

Is the UK really on track to lead the world in Artificial Intelligence?

 

Well the United States and China might have a thing or two to say about
that.

 

Both are engaged in an AI arms race and are investing the kind of sums that
would make Chancellor Philip Hammond's - or even Foreign Secretary Boris
Johnson's - eyes water.

 

Still, it is true that in London and Cambridge some of the world's leading
AI scientists are at work. It was here that the Alexa digital voice
assistant was developed and where a computer was trained to defeat champion
players of the Chinese game of Go.

 

The trouble is that those scientists were employed by Amazon and by Google,
which brought up the DeepMind AI business when it was still in its infancy.

 

That's a pattern frequently repeated in the UK technology sector. A Chinese
AI investor on a trip to the UK this week expressed surprise that the
government had not done more to protect these AI assets.

 

Now there is to be another AI body, the Centre for Data Ethics and
Innovation, joining in a global conversation about the moral challenges
posed by AI.

 

We already have the Alan Turing Institute which has a similar mission.

 

The concern is that while the UK agonises over the implications of this
technology, the Chinese will just be getting on with it.

 

Theresa May also intends to address the need for tech firms to tackle
terrorism and extremist content during her speech.

 

She intends to state that Telegram - a privacy-focused chat app - became
popular with criminals and terrorists over a short period of time.

 

"We need to see more co-operation from smaller platforms like this," she
will add.

 

Telegram has previously said it is "no friend of terrorists" and blocked
channels used by extremists.

 

In addition, the prime minister will call on tech company investors to play
their part by demanding that trust and safety issues be considered.--BBC

 

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2018

 


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Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 


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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
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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
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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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