Major International Business Headlines Brief::: 02 July 2018

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Major International Business Headlines Brief::: 02 July 2018

 


 

 


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*  South African fuel prices to rise by more than 1.5 pct in July

*  Steinhoff takes $12 billion writedown after accounting scandal

*  Britain and Nigeria exploring ways to list naira bonds in London -Lord
Mayor

*  Benin's GDP growth to rise to 6 pct this year, IMF says

*  Kenya's economic growth gathers pace in first quarter

*  South Africa's rand rises but on track for weekly loss, stocks up

*  Ghana opens cocoa light crop season, price unchanged- regulator

*  Angola plans rough diamond sale revamp to draw investment

*  Angola's Sonangol settles Cobalt Energy dispute with $350 mln payment

*  Nigeria's finance minister questions NNPC remittance to government

*  Canada retaliatory tariffs on US goods come into force

*  Trump urges Saudis to raise oil output 'by two million barrels'

*  High Street woes hit 22,000 jobs in 2018

*  Tata Steel and Thyssenkrupp merger welcomed by unions

*  Evening Standard to record £10m loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South African fuel prices to rise by more than 1.5 pct in July

JOHANNESBURG (Reuters) - The retail price of petrol in South Africa will
rise by more than 1.5 percent from July 4, while the price of wholesale
diesel will rise by 1.8 percent, the energy department said on Sunday.

 

The price of petrol will rise by 26 cents to 16.02 rand per litre in the
commercial hub of Gauteng province, while diesel will also go up by 26 cents
to 14.45 rand per litre.

 

The Central Energy Fund said the lower crude oil prices after the
Organization of the Petroleum Exporting Countries (OPEC) agreed to increase
production had offset a sharp fall in the currency, which last month pushed
fuel prices to record highs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 

 

Steinhoff takes $12 billion writedown after accounting scandal

JOHANNESBURG (Reuters) - South African retailer Steinhoff said it has booked
$12 billion in charges related to accounting irregularities discovered last
year, as it reported a widened half-year loss.

 

The writedown is the latest setback for the multinational retailer, which
has been fighting to stay afloat since it revealed holes in its accounts
last December that wiped $15 billion off its market value.

 

The company, which grew rapidly from a small local furniture outfit to a
multi-national retailer, said 10.2 billion euros ($11.91 billion) of charges
related mostly to overstated profits, asset values and transactions having
to be reversed. The figure is 70 percent more than the 6 billion euros
initially estimated.

 

The writedowns widened the company’s operating loss to 152 million euros in
the six months through March this year compared with a 44 million euros a
year earlier.

 

The owner of Mattress Firm in the United States and Poundland in Britain
delayed publishing its results in December when it appointed auditing firm
PwC to investigate past accounting practices.

 

The probe, which is expected to be completed by the end of this year, has
uncovered that accounting irregularities date back to at least 2015.

 

“While the company is determined to get to the bottom of the alleged
accounting irregularities as quickly as possible, it is essential that PwC
is allowed sufficient time to conduct a thorough investigation to determine
precisely what has taken place,” chairwoman Heather Sonn said.

 

DEBT RESTRUCTURING

Cut off from credit lines, Steinhoff has been surviving on cash injections
from asset sales as it finalises a deal with lenders to restructure its
roughly 9 billion euros of debt.

 

Steinhoff said it had agreed the main terms of a restructuring deal, under
which all its debt would be reinstated at par and be given a common maturity
date of three years from the completion of the restructuring agreement.

 

Steinhoff said the plan would allow it to focus on running the business and
the debt maturity extension would give it time to reduce its borrowings.

 

Sealing a debt deal will allow the company to address the multiple lawsuits
against it, including a 59 billion rand ($4.30 billion) litigation claim by
former chairman and top shareholder Christo Wiese.

 

Wiese, best known best known for transforming grocery retailer Shoprite from
just six shops in the 1970s to hundreds of stores across Africa, said he has
not spoken to Steinhoff management about the lawsuit since launching it in
April.

 

“Management can say nothing else, I fully understand that. They believe they
can successfully defend it, that’s why there are courts of law,” he told
Talk Radio 702.

 

Shares in Steinhoff closed up 6.6 percent higher to 1.29 rand in
Johannesburg, valuing the company just over 5 billion rand($364.21 million),
a dramatic reversal in fortunes for a company worth 240 billion rand six
months ago.

 

($1 = 0.8579 euros)

 

($1 = 13.7284 rand)

 

 

 

Britain and Nigeria exploring ways to list naira bonds in London -Lord Mayor

LAGOS (Reuters) - Britain and Nigeria are exploring ways to list
naira-denominated bonds on the London Stock Exchange to help fund
infrastructure projects in the West African country, the City of London’s
Lord Mayor told Reuters.

 

Charles Bowman, who acts as an ambassador for the British capital’s
financial district, made the comments during a three-day visit to Nigeria
during which he held talks with the vice president, trade minister and
representatives of both Nigeria’s stock exchange and central bank.

 

Nigeria, once a darling for frontier investors, suffered its worst recession
in a generation in 2016 after the price of its main export - oil -
collapsed. It has since recovered but growth is fragile, with dilapidated
infrastructure holding it back.

 

“We are looking at clever methods of essentially being able to list, by way
of example naira-denominated bonds, but having those listed on the London
Stock Exchange. Having local bonds with an access point into the London
Stock Exchange,” said Bowman.

 

Bowman, speaking to Reuters in an interview in Nigeria’s commercial capital
Lagos, did not provide specific details of who had been involved in the
talks, how advanced discussions were or when such a move could take place.

 

“We have a lot of capital in London but we don’t have the projects to
support. Nigeria has lots of projects to support and not the capital - you
are reliant on the banking structure,” said Bowman.

 

“Unleash the capital market, link London and Nigeria and what a great
opportunity,” he said.

 

Britain voted in 2016 to leave the European Union, which has forced London
to rethink its trade ties with the rest of the world. The United Kingdom and
the EU struck an agreement in December that opened the way for talks on
future trade ties.

 

“Nigeria is an example where in due course one would hope to have a
profitable, pragmatic free trade agreement,” said the lord mayor.

 

His comments come after Britain in February said its export finance agency
would add the naira to its list of “pre-approved currencies”, allowing it to
provide financing for transactions with Nigerian businesses denominated in
the local currency.[nL8N1PZ5RF]

 

He said the finance agency has so far provided 20 million pounds to local
businesses from its 750 million pound facility.

 

Britain is due to leave the EU in March next year, a month after
presidential elections are scheduled to take place in Nigeria.

 

Bowman said peaceful elections next year could help boost Nigeria’s image
abroad and attract the sort of capital badly needed in the West African
nation to develop infrastructure and propel growth.

 

 

 

Benin's GDP growth to rise to 6 pct this year, IMF says

DAKAR (Reuters) - Benin’s economy is expected to grow 6 percent this year,
up from 5.6 percent in 2017, as cotton production reaches record highs and
the economy of neighbouring Nigeria strengthens, the International Monetary
Fund said.

 

The Fund also said in a statement late on Friday that it had made available
about $22.4 million to Benin as part of a three-year financial-assistance
programme.

 

Benin’s raw cotton output for the 2017/18 season is projected to increase 28
percent from the previous season, to a record 578,000 tonnes.

 

 

 

Kenya's economic growth gathers pace in first quarter

NAIROBI (Reuters) - Kenya’s economy expanded at a annualised rate of 5.7
percent in the first quarter of this year, compared with 4.8 percent in the
same period of last year, the statistics office said on Friday.

 

The agriculture sector expanded by 5.2 percent, compared to 1 percent in the
same period last year.

 

“The significant acceleration in growth was mainly attributable to improved
weather conditions and a boost in business and consumer confidence after the
conclusion of general elections in 2017,” the statistics office said in a
report.

 

The East African nation has had good rains this year, ion contrast with
drought in the first quarter of last year.

 

Farming, including tea and coffee exports, accounts for close to a third of
economic output.

 

 

The finance ministry expects growth to rebound to 5.8 percent this year
after 4.9 percent in 2017.

 

 

South Africa's rand rises but on track for weekly loss, stocks up

JOHANNESBURG (Reuters) - South Africa’s rand firmed on Friday as the dollar
fell, but was on track for a weekly loss as escalating global trade tensions
and concerns over the health of the local economy weighed on sentiment.

 

On the stock market, shares rose for a second straight session, led higher
by banking stocks.

 

At 1520 GMT, the rand was trading at 13.7175 per dollar, 0.4 percent firmer
than its close on Thursday.

 

The currency, which slipped to a 7-month low on Thursday, was however on
track to end the week 2 percent weaker, according to Thomson Reuters data.

 

The rand, like its emerging market peers, had been hurt by fears of a global
trade war.

 

Trade tensions are set to remain high, with the U.S. administration due to
activate tariffs on Chinese goods worth $34 billion on July 6, which is
expected to prompt a tit-for-tat response from Beijing.

 

Locally, a stalemate in wage talks between power utility Eskom and labour
unions has added to bearish sentiment. Eskom on Thursday raised its wage
increase offer to 6.2 percent from 4.7 percent previously. [nJ8N1T0028]

 

“The rand is taking the biggest bashing among emerging markets currencies
due to poor economic growth, unfavourable financing needs and wage talks at
Eskom,” Rand Merchant Bank analyst Isaah Mhlanga said in a note.

 

In fixed income, the yield for the benchmark paper due in 2026 fell 10 basis
points to 8.835 percent.

 

The blue-chip Top 40 index was up 3.49 percent to 51,516 points, while the
all share index was up to 3.25 percent to 57,610 points.

 

Financials were in demand with the banking index up 4.65 percent. FirstRand
Bank Group rose 5.95 percent to 63.89 rand followed by Rand Merchant Bank
which gained 5.09 percent to 75.84 rand.

 

“Now there is a bargain for stocks and buying opportunity. Also there is a
fear of missing out, people are rushing back into the market,” said Cratos
Capital trader Greg Davies.

 

Resources also advanced with Anglo American Platinum Limited climbing 5
percent, while Lonmin rose 7.64 percent to 7.75 rand.

 

 

 

Ghana opens cocoa light crop season, price unchanged- regulator

ACCRA (Reuters) - Ghana’s Cocobod regulator opened its cocoa light crop
purchases on Friday and will keep the price it pays farmers unchanged at
7,600 cedis ($1,586) per tonne, it said.

 

The world’s second largest cocoa exporter after Ivory Coast runs a two-cycle
cocoa season consisting of the main crop which is mainly exported and the
light crop harvest, discounted for local grinders.

 

“The producer price to be paid at all buying centres is 228 cedis per load
of 30 kilograms for Grade 1 and II cocoa beans naked ex-scale, or 475 cedis
per bag of 64 kilograms gross. A tonne of 16 bags is 7,600 cedis,” Cocobod
spokesman Noah Amenya said.

 

“We expect purchases to start in earnest with buyers delivering cocoa from
Monday,” Amenya said. He declined comment on the target for the light crop,
which usually lasts for 11 weeks.

 

Cumulatively, the West Africa country had projected to buy at least 850,000
tonnes of cocoa by the close of the crop year in September.

 

 

($1 = 4.79 Ghanaian cedis)

 

 

 

Angola plans rough diamond sale revamp to draw investment

LUANDA (Reuters) - Angola plans a new system for selling rough diamonds as
part of President João Lourenço’s efforts to increase investment, production
and government revenue, a draft decree shows.

 

Diamond producers say they have struggled to make money in Angola due to a
marketing system that obliged them to sell at below international prices,
leading them to largely shun one of the world’s most exciting prospects for
the precious stones.

 

The draft presidential decree, which was seen by Reuters but could still be
altered, includes a plan to set the price of rough diamonds against an
international benchmark and give producers greater influence to pick their
own buyers.

 

Sub-Saharan Africa’s third largest economy is trying to diversify away from
oil and the decree said there was a “considerable difference between the
country’s potential and the (diamond) industry’s actual impact on the
national economy”.

 

Angola’s Presidency and the Ministry for Natural Resources and Oil did not
immediately respond to a request for comment.

 

Earlier this month Reuters reported that Angola’s largest diamond mine –
Catoca - estimates it lost $464 million over the past six years by having to
sell through state-owned diamond trading company Sodiam which often chose
politically connected buyers able to negotiate prices below fair value.
[nL8N1TD558]

 

The new legislation looks to fix this by allowing producers like Catoca to
sell up to 60 percent of their production to companies of their choosing,
including to their own trading divisions, breaking Sodiam’s total control to
select buyers.

 

In another significant change, the new system will price stones according to
a benchmark based on a sample of typical nationally-produced stones, along
with an evaluation using a price list “in line with the international
market”.

 

Angola will also introduce sales sessions for pre-approved diamond buyers,
along the lines of “sights” held by diamond group De Beers, while
particularly rare stones will be individually sold via auction.

 

The planned legislation also foresees stricter oversight by the Ministry of
Natural Resources and Oil, previously kept at arm’s length by Sodiam and its
parent Endiama, which had great influence under previous president José
Eduardo dos Santos.

 

The Ministry will, according to the draft decree, have the power to appoint
independent evaluators to intervene in any disputes and set more transparent
criteria by which Sodiam selects buyers, giving priority to polishers and
jewellery makers over middlemen that just resell the stones.

 

 

Angola's Sonangol settles Cobalt Energy dispute with $350 mln payment

JOHANNESBURG (Reuters) - Angola’s state energy firm Sonangol said on Friday
it made a $350 million payment this month to Cobalt International Energy to
settle a dispute over oil block sales.

 

Cobalt had filed arbitration requests last year seeking in excess of $2
billion due to the impact of failed extension talks on its attempts to sell
offshore blocks 20 and 21 in Angola.

 

Sonangol said in December the two companies had agreed on a settlement of
$500 million. The $350 million payment it made on June 11 was the final
installment, Sonangol said.

 

 

Nigeria's finance minister questions NNPC remittance to government

ABUJA (Reuters) - Nigeria’s finance minister said on Thursday proposed
revenue payments by state oil company NNPC to the government account were
unacceptable because they were less than expected in view of raised crude
oil prices.

 

 

Kemi Adeosun, told the National Economic Council advisory body the company’s
accounts had not been approved because some costs could not be justified.

 

In a separate statement, NNPC said its 147 billion-naira ($482 million) June
remittance to the government account was in line with terms agreed with
state governors.

 

($1 = 305.2500 naira)

 

 

 

Canada retaliatory tariffs on US goods come into force

Canada's countermeasures against the Trump administration's steel and
aluminium levies have come into effect.

 

On Sunday, the day the country celebrates its national holiday, Canada
imposed a 25% tariff on assorted US metals products.

 

Tariffs of 10% have also been imposed on over 250 other US goods like beer
kegs, whiskey and orange juice.

 

Canada-US trade tensions are high amidst the metals levies and North
American Free Trade Agreement talks.

 

The tit-for-tat duties are estimated to total C$16.6bn (£9.5bn),
representing the 2017 value of Canadian metals exports affected by the US
measures.

 

Senior Canadian officials say the list is designed to exert political
pressure on the US and make it take notice of how this will affect trade.

 

Where does Trump's 'America First' leave Canada?

How Canada might hit back against Trump

They have called the steel and aluminium levies against Canada, the European
Union and Mexico imposed a month ago by the Trump administration "illegal"
and "unjustified".

 

On Friday, Canada also announced it would make C$2bn available to defend the
steel and aluminium industry, including funds to support affected
businesses.

 

"Our approach is and will be this: we will not escalate and we will not back
down," Foreign Minister Chrystia Freeland said while announcing the funds.

 

The EU and Mexico have already imposed their own counter-tariffs on American
goods.

 

EU's duties on £2.4bn ($3.1bn) of products such as bourbon whiskey,
motorcycles and orange juice took effect on 22 June.

 

Mexico put tariffs on $3bn worth of American products ranging from steel to
blueberries and bourbon.

 

The tariffs, which provoked international outrage, have also triggered
complaints against the US to the World Trade Organization (WTO) and to North
American Free Trade (Nafta) dispute panels.

 

US tariffs: The unusual ways nations have retaliated

What is a trade war and why should I worry?

The relationship between Canada and the US is strained following attacks
this month by US President Donald Trump against Justin Trudeau after the
Canadian prime minister declared that his country would not "be pushed
around" by the Americans on trade.

 

Beyond Nafta and the metals levies, there have been disputes over issues
such as lumber, dairy and wine.

 

More tariffs could be on the horizon.

 

In May, Mr Trump ordered a national security probe into vehicle imports,
which could bring tariffs on autos and auto parts.

 

Earlier this week, US Trade Representative Robert Lighthizer criticised the
retaliatory tariffs imposed by the EU and other countries against the US
measures.

 

"These retaliatory tariffs underscore the complete hypocrisy that governs so
much of the global trading system," he said.--BBC

 

 

Trump urges Saudis to raise oil output 'by two million barrels'

US President Donald Trump has urged Saudi Arabia to sharply increase its oil
production to combat the rising cost of fuel.

 

Mr Trump tweeted that he had asked Saudi ruler King Salman to raise oil
output by up to two million barrels a day.

 

"Prices to [sic] high! He has agreed!" the president added.

 

Mr Trump said the move was needed due to "turmoil and dysfunction in Iran
and Venezuela".

 

Oil prices rose last week, partly due to US plans to reimpose sanctions on
Iran, a major oil producer.

 

The Opec oil producers' group agreed to increase output, as did Russia, but
this failed to reassure markets.

 

US tells allies to halt Iran oil imports

The impact of Iran sanctions - in charts

Oil hits $75 as Iran sanction fears mount

The Saudi Press Agency confirmed that President Trump and King Salman had
spoken by phone, giving few details. It said they had discussed the need to
"preserve the stability of the oil market".

 

The statement did not confirm that Saudi Arabia had agreed to the two
million barrels a day figure.

 

Saudi Arabia is the world's biggest exporter of oil and produced about 10
million barrels a day in May. It is reported to have between 1.5 million and
two million barrels a day of spare capacity - but experts told The Wall
Street Journal it might not be keen to meet the president's request.

 

"Saudi Arabia does not really like going beyond 11 million barrels a day and
has no intention of expanding its current production capacity. It is
expensive," a Saudi official told the paper.

 

Mr Trump has repeatedly criticised Opec even though US ally Saudi Arabia is
a core member.

 

On 20 April he tweeted that oil prices were "artificially very high", saying
this was "no good" and "will not be accepted!"

 

Iran, another Opec member, has accused Mr Trump of trying to politicise the
group and has blamed Riyadh for doing his bidding.

 

On Saturday, Iranian Supreme Leader Ayatollah Ali Khamenei said the US was
trying to drive a wedge between Iranians and their government using
"economic pressure".

 

"Six US presidents before him tried this and had to give up," Mr Khamenei
cautioned on his website.

 

The value of Iran's currency, the rial, has tumbled since Washington backed
out of the Iran nuclear deal in May.

 

Earlier this week, thousands of traders at Tehran's Grand Bazaar marched in
protest against rising prices and the plummeting value of the rial. It was
the biggest protest the city has seen since 2012.--BBC

 

 

High Street woes hit 22,000 jobs in 2018

Nearly 22,000 jobs have been hit on the UK's struggling High Streets this
year.

 

BBC 5 Live's Wake Up To Money has been tracking shop closures and retail
administrations and found that more than 7,000 people have lost their jobs.

 

A further 9,500 roles are due to go through planned shop closures, while
5,100 are in doubt at Poundworld, which is in administration.

 

In the past six months, about 1,200 shops run by major chains have either
shut or are at risk of closure.

 

To put that in context, a report by PwC and the Local Data Company found
4,000 High Street shops opened last year and 5,800 closed, causing a net
loss of 1,700.

 

Six reasons behind the High Street crisis

Sluggish sales, competition from online and rising costs have been blamed
for the changing landscape.

 

High-profile failures such as Maplin and Toys R Us have been followed by a
string of closure plans from High Street stalwarts such as Marks & Spencer,
House of Fraser, Carphone Warehouse, New Look and Carpetright.

 

This trend is set to continue. On Thursday, the new owners of Homebase said
300 head office staff would go and store closures are expected.

 

Meanwhile, The Original Factory Shop is planning to close more than 30
shops, while N Brown, which is behind brands such as Jacamo and Simply Be,
wants to retreat from the High Street altogether.

 

Zain Venturi spent three years at a Maplin shop in London until it closed
earlier this month. He has switched career and is now working as an IT
engineer.

 

He said: "I was on the shop floor and we could see what was happening before
management could. The guys at head office did not understand what the
customers wanted. Shopping has changed and they weren't in tune with what's
happening."

 

He added: "Those most affected were working in the shops. I'm lucky, I can
talk and people buy into that, but if you can't you're going to have issues.

 

"Everything that happens in life opens up an opportunity - hopefully
something more financially rewarding.

 

"I'm not the only one who found something paying more, quite a few others
went into the IT field. It was such a nice place to work so it stopped you
from pushing yourself out there."

 

The national unemployment rate is still at a 40-year low, at just over 4%,
and the most recent official figures show 2.92 million people were working
in retail in March.

 

That's up on 2.87 million a year earlier, but the Recruitment and Employment
Confederation has seen retail vacancies fall in recent months.

 

It publishes a monthly report based on information from 400 recruitment
agencies around the country. Retail vacancies continued to rise until March,
but that growth has since stalled.

 

REC policy director Tom Hadley said: "Every sector is showing more demand
apart from retail. That does show there are jobs in other sectors and that's
a note of encouragement.

 

"Some people are happy to stay in roles where you've got a customer service
element, such as leisure of hospitality. We are seeing people make the
transition into the care sector, where there is a big demand for staff.

 

"The rest of the jobs market is showing strong demand, so it's a good time
to take stock of your options."--BBC

 

 

 

 

Tata Steel and Thyssenkrupp merger welcomed by unions

Unions have welcomed a merger between Tata Steel and Thyssenkrupp which will
create Europe's second-biggest steelmaker.

 

The deal will mean Indian-owned Tata's UK plants are merged into a
pan-European venture, which includes the UK's biggest steelworks at Port
Talbot.

 

Tata said its "ambition" was to not have any compulsory redundancies in the
UK as part of the joint venture.

 

The steelworkers' union said the deal may secure jobs and lead to
investment.

 

Community general secretary Roy Rickhuss said it had "the potential to
safeguard jobs and steel-making for a generation".

 

But he also warned the venture would only succeed if there was strategic
investment to make sure the business thrived.

 

Merger means investment in Port Talbot blast furnace

What's behind the Tata-Thyssenkrupp merger?

Tata Steel UK's pensions deal approved

German-owned Thyssenkrupp's supervisory board gave the go-ahead to the
merger on Friday - the two companies have been in negotiations for more than
a year.

 

Between them, they employ about 48,000 workers.

 

Fears of job losses

The merged group anticipates it will make costs savings of between £350m to
£440m a year.

 

When details of an initial agreement emerged last September, both sides said
they expected about 4,000 jobs would go as a result of the merger, half from
administration and half from production.

 

In Wales, almost 7,000 people are employed by Tata, including at Deeside and
more than 4,000 in Port Talbot.

 

Tata: Turbulent year for UK steel industry

Tata had announced in 2016 that it wanted to sell off its entire UK
operations - before scrapping plans and optioning for a merger deal.

 

This merger is a safeguard measure. It protects jobs rather than creates
them. And it establishes a pan-European company - better able to face the
rigors of world markets.

 

No threat is more immediate than that of a growing tariff war initiated by
President Donald Trump.

 

His 25% tariff on all steel being sold in the US has created fears that
steel from China, or elsewhere, might be diverted to Europe and sold below
what is charged in its home market - a practice known as dumping.

 

And then there's Brexit. When asked what impact that could have on the new
Anglo-German firm, Tata Steel UK chief executive Bimlendra Jha said he
needed to be able to easily move his products and people across borders.
When asked what it would mean if the UK could not secure that outcome, he
said that would be "a sorry state of affairs".

 

Preserving 7,000 steel jobs in Wales was always going to be the goal, but
political events on both sides of the Atlantic may dilute some of the
benefits of this merger.

 

While welcoming the deal, unions also wanted an end to uncertainty for
workers.

 

Unite union national officer Tony Brady said workers had "made great
sacrifices in working to secure a future for Tata Steel".

 

"We will be seeking guarantees over jobs and investment for the UK
operations of the joint venture to secure the future of UK steel," he added.

 

Ross Murdoch, national officer of the GMB, echoed his comments.

 

'Important milestone'

Thyssenkrupp chief executive Heinrich Hiesinger has previously said the two
companies needed to consolidate and become more efficient because of
increasing pressure from imports and an overcapacity within the industry.

 

More recently, European steel makers have faced 25% tariffs on exports to
their biggest market, the US.

 

"The joint venture with Tata Steel is an important milestone for the
transformation of Thyssenkrupp to an industrials and service group and will
lead to a significant improvement of the financial figures of Thyssenkrupp,"
the group said in a statement.

 

It added that the "signing of the definitive agreement is expected shortly"
and that the deal would be subject to clearance in several jurisdictions,
including the European Union.

 

Natarajan Chandrasekaran, chairman of Tata Steel, said: "This is a
significant milestone for Tata Steel and we remain fully committed to the
long-term interest of the joint venture company.

 

"We are confident that this company will create value for all stakeholders."

 

The venture will create the second biggest steel firm in Europe after
Arcelor Mittal.

 

The new company, called Thyssenkrupp Tata Steel, would have annual sales of
about £13bn and be based in the Netherlands.--BBC

 

 

 

Evening Standard to record £10m loss

The Evening Standard will post a loss of £10m for the year ending in
September 2017, a reversal in fortunes for London's paper that poses a big
headache for its owner, Evgeny Lebedev.

 

The Standard's loss - £9.98m - comes after a recorded profit of £2.2m in the
previous year, representing a £12m swing into the red.

 

The causes of the sharp financial deterioration reflect both long-term,
structural changes in the newspaper industry - above all the downward
pressure on print display advertising - and specific issues arising in that
financial year.

 

Those exceptional circumstances include a London food festival which was,
commercially at least, and allowing for sub-optimal weather, an expensive
failure.

 

The weakness of sterling pushed paper costs up for all newspapers. And the
slowdown in London's property market always augurs ill for the Standard,
whose Homes & Property supplement is a key driver of revenue.

 

The Standard also took on costs as a result of the closure in 2016 of its
sister title at ESI Media, The Independent, where I was editor of the print
edition until it closed in March 2016.

 

The Standard recently denied allegations that it had sold favourable news
coverage to big advertisers.

 

Model behaviour

The losses will inevitably alarm George Osborne, the former chancellor who
became editor of the London paper last May.

 

As the architect of austerity in the Coalition years, he has foes. And as a
surprise appointment to the role of editor with virtually no journalistic
experience, critics will point to his tenure as an explanation of the
losses.

 

However, pinning the losses on him would betray a certain naivety about the
business model of the paper, and timings. Osborne took the editor's chair
more than half way through the financial year to which the results pertain.

 

Moreover, as a free paper the Standard is almost wholly reliant on
advertising revenue. It has no cover price. The days when editorial changes
could really drive big circulation and cover price growth are long gone -
even for those papers that charge readers. For a free paper with fixed
distribution, editorial changes don't easily correspond to commercial
benefit.

 

Even if the "nibs" (news in briefs) were full of Pulitzer Prize-winning
pieces, it would have limited effect on how many people take the Standard.

 

The deeper question is whether - in an environment where all ad-funded media
businesses, from websites to TV companies, are under huge strain because of
the flight of cash to a few big digital beasts - the Standard's business
model is viable.

 

The path to profitability will probably take several years. On the cost
side, there's not much room for manoeuvre, as budgets are already tight. One
option might be to cut distribution.

 

On the revenue side, the plan will be the same as at most newspapers: keep
print stable and grow digital. And if you can drive revenues through events,
membership schemes, and your audience data, all of that is a bonus.

 

Faith in the future

For the Standard, two acts of faith are required here. The first is that
despite the huge pressure on print display advertising, overall revenues
from that source do not decline. So far the Standard has managed that,
holding revenues steady by growing its share of the national newspaper ad
market - despite being a free London newspaper.

 

On the digital side, while traffic is sharply up and revenues are growing,
they are doing so from a small base, and sustaining digital growth could
require serious investment that will worsen the P&L in the short term.

 

Staff can take some reassurance from the fact there is profitability
elsewhere in ESI Media.

 

Not at London Live, the TV station, however, which reduced losses to £2.95m.
There is little prospect of it ever flourishing commercially. The local TV
market will probably be consolidated - pending regulatory approval - and the
question is who fancies the task.

 

At The Independent, profits have almost doubled to £3.26m. Throughout my
near decade at the title, it struggled financially; so to be profitable,
growing, and read by nearly five million unique browsers around the world
daily is an unfamiliar experience for the publication.

 

The Independent is looking at launching some kind of premium service, to
complement its current offering, this year.

 

Last year, Lebedev sold a 30% stake in The Independent to Mohamed
Abuljadayel, a Saudi investor.

 

Full disclosure: I worked for Lebedev for six years. I didn't speak to him
for this article.

 

There is no doubt Lebedev is fully committed to ownership of the Standard,
which he made free after acquiring it. The free model initially secured a
turnaround in fortunes. The paper had forecast losses in the tens of
millions, but within a few years was profitable.

 

The task for Lebedev's team is to apply the lessons of The Independent's
digital growth to the Standard. Whether the lessons carry across is
debatable.

 

Much of the Standard's content is London-focused, though it has celebrity
pictures with viral potential, and counts around 40% of its audience as
overseas. Osborne has international ambitions for the paper, which could
give it journalism that can generate a following in key international
markets. But that will cost.

 

Clubbing together

Across all media, consolidation is rampant. It is the trend which unites
Disney, Fox, Sky, Comcast, AT&T, Time Warner, CBS, Viacom and the Daily
Mirror and Daily Express. The UK has plenty of national titles for the size
of its population, adding a further reason for consolidation.

 

Common sense suggests some kind of union between the Standard and Metro,
which is part of Lord Rothermere's Daily Mail group (DMGT), could be
financially beneficial.

 

Both are free-to-consumer, ad-funded titles, housed in the same building;
and though Osborne would consider his paper more upmarket than Metro, the
savings from a joint editorial and commercial operation would be
near-immediate, not least in back-office staff, IT and floor space.

 

For now, however, such a deal is off the table, and it will soon be clear
how Lord Rothermere - who sold most of the Standard to Lebedev in 2009 and
recently diluted what remained of his stake in it, from 24.9% to 10% -
intends to integrate Metro into his company following the departure of Paul
Dacre as editor of the Daily Mail.

 

Few people these days own newspapers because they want to accrue wealth. But
print titles still need to be commercially viable. Profitability is the best
guarantee of independence. The Standard can be profitable again - but
there's no guarantee, and it will be a long slog.--BBC

 

 

 

 

 


 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


Dawn Properties

AGM

Ophir Room, Monomotapa Hotel

28/06/2018 10am

 


NicozDiamond

Scheme meeting

7th Floor, 30 Samora Machel Ave

28/06/2018 10am

 


ZBFH

AGM

Boardroom, Ground Floor, 21 Natal Road, Avondale

28/06/2018 10:30am

 


African Sun

AGM

Kariba Room, Holiday Inn Harare

28/06/2018 12pm

 


FBC

AGM

Royal Harare Golf Club

28/06/2018 3pm

 


Hwange

AGM

Royal Harare Golf Club

29/06/2018 10:30am

 


Fidelity Life

AGM

Great Indaba Room, Monomotapa Hotel

29/06/2018 11am

 


Barclays

EGM to consider the change of registered statutory name to First Capital
Bank Limited

Meikles Hotel

03/07/2018 3pm

 


NicozDiamond

shares delist from the ZSE

 

06/07/2018

 


Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

 


Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

 


The Harare Agricultural Show

The Harare Agricultural Show

The Harare Agricultural Show

August 27- September 1

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 


 

 


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Bulls n Bears 

 

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