Major International Business Headlines Brief::: 13 July 2018

Fri Jul 13 12:01:32 CAT 2018

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Major International Business Headlines Brief::: 13 July 2018

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*  Old Mutual appoints Deloitte as joint auditor in a blow to scandal-hit
KPMG

*  South Africa's rand eases as dollar regains footing

*  South Africa's Ramaphosa embarks on Eskom overhaul

*  Dubai's DP World threatens legal action over Djibouti port row

*  Kenyan shilling stable as horticulture inflows lend support

*  Tunisia tourism revenues jump as Europeans return

*  Easing risk in Ivory Coast banking sector a slow process - Moody's

*  Zambia's tax collection jumps in H1, easing debt pressure

*  US appeals against $80bn AT&T-Time Warner deal

*  Trump: Brexit plan 'will probably kill' US trade deal

*  Johnson & Johnson to pay $4.7bn damages in talc cancer case

*  China trade surplus with US hits record high in June

*  Brexit services plan will speed up relocation, says Lloyd's boss

 <mailto:info at bulls.co.zw> 

Old Mutual appoints Deloitte as joint auditor in a blow to scandal-hit KPMG

JOHANNESBURG (Reuters) - South African insurer Old Mutual has appointed
Deloitte as joint auditor alongside scandal-hit KPMG, it said on Thursday,
an unusual move reflecting what it said were unresolved challenges related
to its sole auditor for nearly two decades.

KPMG’s South African unit is battling to restore its reputation after
becoming entangled in a corruption scandal involving the Gupta family, who
have been accused of using their links with former president Jacob Zuma to
amass wealth.

The Guptas and Zuma have denied any wrongdoing.

“Old Mutual has been continuously engaging with KPMG International and KPMG
South Africa on concerns regarding the ongoing challenges raised in their
South Africa business,” Old Mutual said. “Until these challenges are
resolved, Old Mutual believes it is prudent to appoint a joint auditor.”

KPMG has been losing clients over the last year after its own inquiry found
flaws in work it did for the Guptas and the national tax agency.

Its woes deepened in April after failing to spot a crippling hole in smaller
lender VBS Mutual Bank, a collapsed bank in which it was also revealed two
of KPMG auditors had undisclosed loans.

Last month, KPMG unveiled plans to cut 400 staff and close small regional
offices in response to a reduced number clients.

 <mailto:info at bulls.co.zw> 

South Africa's rand eases as dollar regains footing

JOHANNESBURG (Reuters) - South Africa’s rand eased early on Friday as the
dollar, which has been a safe haven amid global uncertainty over trade,
touched 112.775 against the yen, its highest level in six months, boosted by
expectations of higher U.S. inflation.

At 0750 GMT the rand was 0.32 percent softer at 13.3400 per dollar, after
rallying more than 2 percent in the previous session, a chunk of those gains
seen late in local trading after manufacturing figures for May came in
better-than-expected.

May manufacturing output expanded 2.3 percent year-on-year in May and was up
1.5 percent on a monthly basis. On a quarterly basis however output shrunk,
raising fears about second quarter economic growth after a first quarter
contraction.

Technical plays could provide support after the rand hurdled resistance at
13.50 and 13.30 to lure back investors with long dollar positions.

News late on Thursday that Saudi Crown Prince Mohammed bin Salman pledged to
invest $10 billion in building refineries, petrochemicals and renewable
energy, during an official visit by President Cyril Ramaphosa, also boosted
sentiment.

Bonds were slightly firmer with the yield on the benchmark bond due in 2026
down two basis points at 8.705 percent.

The Johannesburg Stock Exchange’s Top-40 index was 0.1 percent lower at
50,620.

South Africa's Ramaphosa embarks on Eskom overhaul

JOHANNESBURG (Reuters) - A month after Cyril Ramaphosa took the helm of
South Africa’s ruling African National Congress (ANC) in December, he called
an urgent meeting with then-President Jacob Zuma and senior ministers to
save state power firm Eskom.

Ramaphosa understood sweeping changes were needed at the struggling utility
company. He persuaded Zuma to replace Eskom’s board and name a new chief
executive to appease investors such as the World Bank, according to an
official at the meeting.

It was Ramaphosa’s first major policy intervention since becoming ANC leader
and signalled a determination to reform Eskom, a company nearing breaking
point after a string of corruption scandals during Zuma’s nine years in
office.

Eskom is critical to South Africa. It supplies more than 90 percent of the
country’s power, has 220 billion rand ($17 billion) of state-guaranteed debt
and is often cited as a threat to South Africa’s credit ratings, which are
near junk status.

“If Eskom were to collapse, it would be a catastrophe for generations to
come,” said the official, who declined to be named. “Ramaphosa explained to
Zuma that it was time to act.”

Ramaphosa still faces a battle keeping Eskom afloat: new instances of fraud
under the firm’s previous management are still being uncovered, a sluggish
economy means demand for power is tepid and powerful labour unions are
likely to resist change.

But what may help Ramaphosa is a realisation in the upper echelons of the
ANC that Eskom is no longer untouchable, sources in the ruling party said.

Since replacing Zuma as president in February, Ramaphosa has pressed on with
reform, surprising many with the speed at which he is addressing problems at
Eskom that have festered for years.

Ramaphosa appointed respected former finance minister Pravin Gordhan to
guide turnaround efforts, directed new executives to produce a plan to
stabilise the company’s finances and halted a nuclear deal supported by Zuma
that could have saddled Eskom with billions of dollars of additional debt.

Asked for comment about Ramaphosa’s role in efforts to reform Eskom, his
spokeswoman Khusela Diko said the president met regularly with Gordhan to
discuss Eskom and that revamping the company was a priority.

A spokesman for Zuma was not available for comment.

‘NO OTHER OPTION’

Eskom also employs 47,000 people and has powerful labour unions, some allied
with the ANC and others more militant, that have said they will resist
attempts to cut the workforce and fight moves to privatise the company.

However, ANC sources say Ramaphosa has secured the backing of senior figures
in the ruling party for a radical overhaul of Eskom, one which will involve
attracting greater private investment into the electricity supply industry.

“From an ideological standpoint, Eskom presents a real challenge for the
ANC,” said a source in the ANC executive close to Ramaphosa. “Greater
private sector involvement does not sit well with some in the party, but
there is no other option.”

The official involved in the meeting with Zuma, who holds a senior position
in the ANC, said there had been a discussion about which assets should be
considered “non-core” and sold.

The idea that outside investors may be needed to save the company is a
dramatic shift for a political party that has rejected any form of
privatisation of Eskom for years.

The desire for change is partly driven by a realisation that Eskom is more
fragile than many believed. The situation came to a head in November when
the World Bank held a flurry of meetings with senior government officials.

Eskom had less than 10 billion rand of cash, commercial banks had suspended
lending and government officials feared the World Bank might do the same at
a time when South Africa’s last investment-grade credit ratings were hanging
by a thread.

Eskom spokesman Khulu Phasiwe said the World Bank expressed “concerns on
progress made on a specific project” at a meeting with Eskom executives and
also raised governance concerns but had not told the company it planned to
withdraw funding.

A senior World Bank official said Eskom, which has borrowed $3 billion from
the bank for projects including the Medupi coal-fired plant and renewables
ventures, had not defaulted on World Bank loans and the lender did not
threaten to suspend lending.

(For a graphic of Eskom's financial woes: tmsnrt.rs/2NFfW94)

‘NEW DUSK’

While commercial banks resumed lending when Zuma stepped down and the
company finally published long-delayed financial results, Ramaphosa has
since faced more Eskom challenges.

Workers went on strike in June over pay, forcing the utility to cut power
supplies over three days for the first time since 2015, when rolling
blackouts cost the economy billions of dollars a month.

As South Africans huddled around candles again, commentators joked that
Ramaphosa’s pledge to usher in a “New Dawn” after a decade of stagnation had
turned into a “New Dusk”.

Eskom had proposed a wage freeze due to financial constraints, even though
inflation is running at about 5 percent. The unions were holding out for an
increase of at least 15 percent in an increasingly acrimonious dispute.

Ramaphosa used his close ties to South Africa’s largest union federation
COSATU (Congress of South African Trade Unions) to make headway and in what
was seen by unions as an unusual move, Gordhan intervened personally.

Gordhan called COSATU to a meeting last month and promised that Eskom would
rethink its refusal to raise wages, setting the stage for a deal of about 7
percent that is being ironed out.

    “It was unprecedented that Minister Gordhan met us to unlock the
dispute,” said Sdumo Dlamini, president of COSATU, which has more than
10,000 members at Eskom via its National Union of Mineworkers (NUM)
affiliate. “The talks were constructive, and we agreed to meet again to
discuss Eskom.”

    Ramaphosa formerly held a senior position in NUM and COSATU supported
his bid to become ANC leader.

‘WAR ROOM’

While Ramaphosa’s resolve to fix Eskom doesn’t seem in doubt, most analysts
believe it will still take time.

“After the maladministration and corruption under the previous management,
the new board is a step in the right direction,” said Ronald Chauke, energy
portfolio manager at South Africa’s Organisation Undoing Tax Abuse.

“But it will take five to 10 years to restructure Eskom properly. Ramaphosa
will need a war room to fix the rot.”

Attempts to sell off parts of Eskom will be vehemently opposed by some
labour unions and conservative sections of the ANC wary of relinquishing
control over parts of the power grid.

The National Union of Metalworkers of South Africa (NUMSA), a militant group
with several thousand Eskom workers, has called for a meeting with Gordhan,
Finance Minister Nhlanhla Nene and other unions to discuss Eskom.

    “We are vigilant about plans to restructure state firms because that
usually leads to job losses,” NUMSA general secretary Irvin Jim said. “We
reject privatising Eskom with the contempt it deserves.”

Analysts say any cuts to Eskom’s bloated workforce are likely to be delayed
until after next year’s national election, where high unemployment will be a
hot-button issue.

But Ramaphosa, who played a key role in talks to end white minority rule
more than two decades ago, has a reputation for making headway in difficult
negotiations.

Ramaphosa could also reduce Eskom’s debt without incurring the wrath of
opponents of privatisation by converting debt held by the Public Investment
Corporation (PIC), which invests government employees’ pension money, into
equity, said analysts.

The state-run PIC held more than 80 billion rand of Eskom debt last year.

“Ramaphosa won’t make quick progress with the radical restructuring needed
to shore up Eskom’s balance sheet as he balances divergent interests in the
ANC before the election,” said Darias Jonker, director for Africa at Eurasia
Group.

“But he will get there eventually.”

($1 = 13.3372 rand)

Dubai's DP World threatens legal action over Djibouti port row

DUBAI (Reuters) - DP World threatened legal action against Djibouti after
the government of the Horn of Africa nation ended a contract this year with
the Dubai-owned firm for running a port facility, the company’s spokesman
said on Thursday.

Djibouti ended the contract in February with DP World to run its Doraleh
Container Terminal.

The Dubai-based company said it issued its statement after “reports of the
opening of the first phase of the Chinese built International Free Trade
Zone, in violation of DP World’s exclusive management rights.”

“DP World reserves the right to take all available legal actions, including
claims for damages against any third parties that interfere or otherwise
violate its contractual rights,” it said.

Kenyan shilling stable as horticulture inflows lend support

NAIROBI (Reuters) - The Kenyan shilling was stable against the dollar on
Friday due to hard currency inflows from horticulture exports balancing out
demand from merchandise importers, traders said.

At 0824 GMT, commercial banks quoted the shilling at 100.80/101.00 per
dollar, unchanged from Thursday’s close.

Tunisia tourism revenues jump as Europeans return

TUNIS (Reuters) - Tunisia’s tourism revenues grew by 40 percent in the first
half of 2018 compared to the same period last year, the government said
Thursday, driven by a strong return of European tourists three years after
they were targetted in militant attacks.

After shunning Tunisia in the wake of 2015 gun attacks on a beach in Sousse
that killed 39 tourists and one at the Bardo National Museum in Tunis that
killed 21, major European tour operators have started to return this year.

The recovery from the attacks claimed by Islamic State has prompted
officials to predict a record season with eight million tourists expected
for the first time.

Some 3.229 million tourists visited Tunisia from Jan. 1 through to June 30,
up 26 percent from the same period last year, official figures seen by
Reuters showed. Tourist revenues climbed 40 percent to reach $522 million.

European visitors grew by 60 percent to reach 900,000 while Algerian
tourists grew by 18 percent to about 900,000 to remain the top national
market for Tunisia.

The number of French tourists increased by 50 percent to 300,000, Germans
rose by 60 percent to 100,000, while Russians were up by 48 percent to about
220,000, figures showed.

A return of European visitors would give a strong boost to the struggling
economy and support the country’s weak currency.

The 8 million forecast would bring tourist numbers above the pre-attack
level of 7.1 million seen in 2014. Arrivals fell to 5.3 million in 2015 and
reached 7 million in 2017.

Easing risk in Ivory Coast banking sector a slow process - Moody's

JOHANNESBURG (Reuters) - Heavy exposure to a handful of borrowers has
endangered the banking sector in regional financial hub Ivory Coast and
reducing that risk will be a slow process despite reforms, a senior analyst
with rating agency Moody’s said on Thursday.

Ivory Coast, one of Africa’s fastest growing economies, accounts for around
30 percent of total banking assets in the West African Economic and Monetary
Union, whose members share a common CFA-franc currency pegged to the euro.

Low banking penetration - only 15 percent of the population possess an
account - and a lack of credit information, however, have pushed Ivorian
banks to focus on what they consider reliable borrowers. These are often
large private conglomerates or entities in which the state holds a stake.

“Asset concentration is very high,” Olivier Panis, Moody’s senior credit
officer for Europe, Middle East and Africa financial institutions, told
Reuters.

International Monetary Fund analysis took the outstanding loans to each
Ivorian bank’s five biggest borrowers, aggregated the figure and compared it
to the total capital of the banking system.

It found lending to the five largest borrowers equated to 98.9 percent of
the banks’ capital.

“It means that, from Moody’s perspective, there’s a cliff risk if one of
these large borrowers defaults, because it’s very likely you’ll find the
same borrower in various banks and it would represent a very large amount of
capital,” Panis said.

Though 25 banks operate in Ivory Coast, the sector is dominated by the five
largest, which represent around 60 percent of banking system assets. Four of
those are owned by foreign banks with activities across the region.

They include the local units of France’s Societe Generale,
Togo-headquartered Ecobank as well as Banque Atlantique and SIB, controlled
by Moroccan lenders BCP and Attijariwafa respectively.

“Because the large banks are part of pan-African banks, that creates
cross-border risk,” Panis said.

“That being said we also consider that you have solid Moroccan banks, solid
French banks who can support the banks in (Ivory Coast) in case of financial
stress.”

As part of efforts to meet Basel III international regulatory standards,
West Africa’s central bank, the BCEAO, is implementing reforms including
stricter credit concentration limits.

Though the changes should improve the credit environment, pushing the banks
to diversify their lending clientele will not be immediate, Panis said.

“It will take time for banks to get comfortable with lending to SMEs and
expanding their lending beyond a few blue chips, until sufficient credit
information will be available from a recently created credit bureau,” he
said.

Zambia's tax collection jumps in H1, easing debt pressure

LUSAKA (Reuters) - Zambia collected 26 percent more tax in the first half of
this year compared with the same period a year ago, easing some pressure on
the financially-strained copper producer, the revenue collection agency said
on Thursday.

Zambia Revenue Authority (ZRA) collected 23.2 billion kwacha ($2.4 billion)
in the first half of the year, 6.4 percent above its target, boosted by
value added tax revenue, the ZRA commissioner-general Kingsley Chanda said.

Zambia delayed all planned borrowing indefinitely after its debt pile rose
to $9.3 billion at the end of March, up from $8.7 billion at the end of
2017.

ZRA paid out 4.2 billion kwacha in VAT refunds, including 2.5 billion kwacha
to the mining companies in Africa’s No.2 copper producer, ZRA said in a
statement.

The refunds did not include a disputed 4.1 billion kwacha related to a rule
requiring mining companies to provide proof that metal exports had reached
the declared destination, it said.

Zambia has been withholding some money owed to mining companies in tax
refunds because the correct documentation has not been provided.

Assessments totaling 16.7 billion Zambian kwacha had been issued against
some of the major claimants and taxpayers in the mining sector, ZRA said.

Mining companies hoped an amicable solution would soon be reached with the
revenue authority, Zambia Chamber of Mines chief executive officer Sokwani
Chilembo said.

($1 = 9.8500 Zambian kwachas)

US appeals against $80bn AT&T-Time Warner deal

The US government has decided to appeal against a landmark court ruling that
cleared the way for telecoms giant AT&T to buy Time Warner.

The ruling was a significant defeat for the US Justice Department, which had
argued the deal would lead to less competition and higher consumer prices.

A federal judge rejected those claims last month, allowing the takeover to
go through without conditions.

AT&T completed the $81bn (£60bn) deal shortly after.

David McAtee, AT&T general counsel, said the company was surprised by the
Justice Department move and would defend the court's approval.

"The court's decision could hardly have been more thorough, fact-based, and
well-reasoned," he said.

The DoJ has not said on what grounds it would challenge the approval.

The appeal will extend a battle with competition regulators that started in
2016, when AT&T first announced its plan to buy Time Warner.

AT&T, which has a sizable mobile, broadband and satellite television
business, said it wanted Time Warner's media assets - which include TV
networks HBO and CNN - to better compete with rivals such as Netflix and
Amazon.

As a candidate for president, Donald Trump said he opposed the tie-up,
saying it would lead to "too much concentration of power in the hands of too
few".

Consumer advocacy groups also raised alarms.

The Department of Justice sued to block the deal in 2017, launching the
biggest anti-trust suit in decades.

The case was closely followed in the US, where there is growing concern that
a small number of companies dominate many sectors.

The IMF highlighted the issue of "mega-firms" in its recent review of the US
economy.

Last month's approval encouraged other companies that were considering their
own acquisitions.

Comcast started a bidding war with Disney for the entertainment assets of
Rupert Murdoch's 21st Century Fox in the days following the court ruling.

AT&T shares slipped 1% in after-hours trade in New York. It recently
announced price rises for its streaming television service.--BBC

Trump: Brexit plan 'will probably kill' US trade deal

Donald Trump has said the UK will "probably not" get a trade deal with the
US, if the prime minister's Brexit plan goes ahead.

He told The Sun the PM's plan would "probably kill the deal" as it would
mean the US "would be dealing with the European Union" instead of with the
UK.

Downing Street has not yet reacted to Mr Trump's remarks.

Theresa May has been making the case for a US free trade deal with Mr Trump,
on his first UK visit as president.

She said Brexit was an "unprecedented opportunity" to create growth in the
UK and US.

Mr Trump also said that former Foreign Secretary Boris Johnson - who
disagrees with the PM on Brexit and resigned this week - would make a "great
prime minister", adding "I think he's got what it takes".

In his interview, he also renewed his criticism of London Mayor Sadiq Khan
over last year's terror attacks in London, saying he had done "a terrible
job".

It comes ahead of a day of planned, and widespread, anti-Trump protests
across the UK, including one in Parliament Square which involves a giant
inflatable of Mr Trump as a baby. Some pro-Trump events are also taking
place.

The US president and his wife, Melania, were given a red carpet reception at
Blenheim Palace, Oxfordshire on Thursday evening.

They were at a black-tie dinner with Mrs May as news broke of his interview
with the newspaper, which said it was conducted while he was in Brussels.

After it was published, White House spokeswoman Sarah Sanders said the
president "likes and respects Prime Minister May very much", adding that he
had "never said anything bad about her".

Mr Trump - who has been a long-time supporter of Brexit - told The Sun that
the UK's blueprint for its post-Brexit relations with the EU was "a much
different deal than the people voted on".

He said the Brexit proposals Mrs May and her cabinet thrashed out at the
PM's country house Chequers last week "would probably end a major trade
relationship with the United States."

"We have enough difficulty with the European Union," he said, saying the EU
has "not treated the United States fairly on trading".

'I told May how to do it'

He also said Mrs May had not listened to his advice on how to do a Brexit
deal, saying: "I would have done it much differently.

"I actually told Theresa May how to do it but she didn't agree, she didn't
listen to me. She wanted to go a different route," he said.

Tom Newton Dunn, the Sun journalist who interviewed Mr Trump, said the US
president seemed "sensitive" and knew about the "Trump baby" inflatable.

"He's really quite stung by the criticism he's been getting," said Mr Newton
Dunn. "He knew all about the baby blimp. I think it hurt him."

The BBC's political editor, Laura Kuenssberg, said Mr Trump's interview had
"driven a bulldozer" through Mrs May's claim that the UK would be able to
get decent trade deals with the wider world, while sticking to the EU rules.

But Foreign Office minister Sir Alan Duncan said things had "moved on" since
Mr Trump's interview - which was carried out before he arrived in the UK -
and the mood at Thursday night's dinner was "fantastically positive and did
focus a lot on trade".

The government does not see Mr Trump's behaviour as "rude", said Sir Alan,
adding: "Donald Trump is a controversialist. That's his style."

Trump raises questions over Brexit plans

How we're welcoming Donald Trump to the UK

Queen and US presidents through history

And Chancellor Phillip Hammond said he is sure there will be "very positive"
talks between Mr Trump and the PM later today.

Mayor of London Sadiq Khan defended his decision to allow the giant Trump
baby inflatable to fly over London, saying: "The idea that we limit the
right to protest because it might cause offence to a foreign leader is a
slippery slope".

And, responding to Mr Trump's criticism of his response to terrorism, Mr
Khan said it was "interesting" that he "is not criticising the mayors of
other cities" which have also experienced terror attacks.

Meanwhile, Shadow Foreign Secretary Emily Thornberry said the PM "should be
standing up to [Mr Trump]" after he "slagged her off", instead of holding
his hand.

Mr Trump's comments came on the same day the UK government published its
proposal for its long-term relationship with the EU.

The plan is aimed at ensuring trade co-operation, with no hard border for
Northern Ireland, and global trade deals for the UK. Mrs May said the plan
"absolutely delivers on the Brexit we voted for".

But after ministers reached an agreement on the plan at Chequers a week ago,
leading Brexiteers Boris Johnson and David Davis resigned from the cabinet.

Reality Check: The rules on protest balloons

'Trump Baby' balloon banned from Turnberry

Why US presidents love the home of golf

Mrs May and Mr Trump are watching a joint counter-terrorism exercise by
British and US special forces at a military base.

The pair will then travel to Chequers - the PM's country residence in
Buckinghamshire - for talks also being attended by Foreign Secretary Jeremy
Hunt.

Extra security is in place to police protests planned for the second day of
Mr Trump's visit.

The president and first lady will travel to Windsor on Friday afternoon to
meet the Queen, before flying to Scotland to spend the weekend at Mr Trump's
Turnberry golf resort. This part of the visit is being considered
private.--BBC

Johnson & Johnson to pay $4.7bn damages in talc cancer case

Johnson & Johnson has been ordered to pay $4.7bn (£3.6bn) in damages to 22
women who alleged that its talc products caused them to develop ovarian
cancer.

A jury in the US state of Missouri initially awarded $550m in compensation
and added $4.1bn in punitive damages.

The verdict comes as the pharmaceutical giant battles some 9,000 legal cases
involving its signature baby powder.

J&J said it was "deeply disappointed" and plans to appeal.

In the six-week trial, the women and their families said they developed
ovarian cancer after using baby powder and other talc products for decades.

Of the 22 women represented in this case, six have died from ovarian cancer.

Their lawyers alleged the company knew its talc was contaminated with
asbestos since the 1970s but failed to warn consumers about the risks.

'Unfair process'

Talc is a mineral and can sometimes be found in the ground in close
proximity to asbestos.

J&J denied that its products ever contained asbestos and insisted that they
do not cause cancer.

The pharmaceutical giant added that several studies have shown its talc to
be safe and said the verdict was a product of a "fundamentally unfair
process".

The US Food and Drug Administration (FDA) commissioned a study of a variety
of talc samples, including J&J, from 2009 to 2010. It found no asbestos in
any of them.

The prosecution lawyer told the Missouri court that the FDA and Johnson &
Johnson had used flawed testing methods.

The UK-based ovarian cancer charity, Ovacome, has produced information on
the issue. It says that there have been worries for some years that using
talcum powder on the genital area may increase the risk of ovarian cancer,
but says this has not been proved by research and more studies are needed.

Record verdict

The verdict is the largest payout J&J has faced over the allegations.

Punitive damages are often reduced by the trial judge or on appeal, and J&J
has succeeded in having several jury verdicts overturned, some of them on
technical grounds.

A previous ruling in 2017 by a California jury awarded $417m (£323.4m) to a
woman who said she developed ovarian cancer after using the firm's products,
including baby powder.

However, a judge later overturned that verdict and several other legal
challenges by J&J are yet to be decided.

The majority of the 22 women were from outside the state of Missouri. The
presentation of their combined cases at such a court is known as forum
shopping. This will be one of the elements challenged by Johnson & Johnson
at appeal.

Johnson & Johnson said: "Every verdict against Johnson & Johnson in this
court that has gone through the appeals process has been reversed and the
multiple errors present in this trial were worse than those in the prior
trials which have been reversed."--BBC

China trade surplus with US hits record high in June

China's monthly trade surplus with the US hit a record high of nearly $29bn
(£22bn) in June as exports to America remained strong.

The figures come a week after the trade war between the two began, with the
US imposing tariffs on $34bn of Chinese goods, and China retaliating.

This week, Washington threatened to impose 10% tariffs on another $200bn of
Chinese imports.

Analysts expect to see the impact of the tariffs in July's figures.

"We expect the trade numbers for July to disappoint since that's when the
first round of US tariffs took effect," said Amy Zhuang, China analyst at
Nordea Bank in Singapore.

"Still, we do not expect a plunge because those tariffs only targeted $34bn
worth of goods which is fairly small compared to China's total trade", she
said.

In the first six months of the year, China's exports to the US rose 13.6%
from a year earlier, while imports from the US increased by 11.8%. Its trade
surplus with the US over the same period was $133.76bn, up from $117.51bn
last year.

How the US is waging its trade war with China

China 'shocked' by US actions in trade dispute

Knock-on effects

As the world's largest exporter, China has threatened retaliatory action
against the tariffs and pledged that it would lodge a complaint with the
World Trade Organization.

US President Donald Trump had already threatened to impose additional
tariffs if China - the world's largest exporter - retaliates.

While China continues to benefit from strong global demand for its goods for
now, the rising trade tensions with the US has the potential to hurt both
sides.

Amy Zhuang has warned that there could be knock-on effects if the US
proceeds with its proposal for a new round of tariffs on $200bn of Chinese
goods.

"Not only will Chinese exporters suffer but American consumers as well," she
told the BBC.

"Targeting such a large amount of basic consumers will inevitably have an
effect on US inflation."

No easy win

Others say the latest data shows how difficult it will be for the US to win
the trade war, arguing that Americans want to buy Chinese-made products.

David Kuo, chief executive of the Motley Fool Singapore, said "US tariffs
will increase the cost of Chinese imports but they are unlikely to deter US
consumers entirely".

But, he said, China has another option - Beijing could reduce the impact of
US tariffs on exporters by devaluing the yuan to make its goods cheaper for
American consumers.

However, a lower yuan would make it more expensive for China to import US
goods.

"So we would be back to square one," Mr Kuo said, with China exporting more
to the US than it buys from the country. "Trade wars are not easy to win",
he said.--BBC

Brexit services plan will speed up relocation, says Lloyd's boss

The Lloyd's of London chief says the government's plan for relations with
the EU after Brexit will speed up the departure of firms from the UK.

Inga Beale told the BBC the White Paper would see the 300-year old insurance
market go "full speed ahead" to set up its subsidiary in Brussels - and spur
others on as well.

Service sector groups say the plan will affect employment and is a "real
blow".

However, non-services groups were more positive.

Services, including banks, insurance companies and investment firms, make up
80% of the UK economy and are one of its most successful exports to the EU.

The government wants UK financial services in future to adopt a beefed-up
version of a system already used by certain non-EU countries, including the
US, Japan and China, whereby they agree to meet certain EU rules to keep
access to the bloc.

These rules are equivalent to each other in some areas.

Kamal Ahmed: the services sacrifice

May says White Paper delivers Brexit

At-a-glance: The new UK Brexit plan

Ms Beale, the chief executive of Lloyd's, said: "Professional and financial
services are really not catered for at all and it's very disappointing. We
make up basically 80% of the economy of the UK.

"Lloyd's is to open a subsidiary in Brussels so we will be full steam ahead,
and many other banks, insurers and other financial services firms will be
moving at pace now."

She said the plans would have a real impact: "We will no longer be licensed
to write business or offer insurance within the EU 27 and this can get right
down to personal protection.

"If you've got insurance for your pet and you like to travel to the
continent for a holiday, there's a question as to whether your policy will
cover you - so this is really serious stuff."

Huw Evans, director-general of the Association of British Insurers, said:
"Whatever the final outcome, the insurance industry is too important to be a
rule taker.

"Having to comply with financial regulations we have no say over would be
the worst possible scenario for our world leading insurance sector, so we
will look to the government to negotiate a better outcome than this."

The City of London Corporation, which governs London's financial district,
said dropping the push for mutual recognition for so-called "equivalence"
would curb business opportunities with European counterparts and was a "real
blow".

It seems the government has made a calculation. If there is no agreement on
regulatory alignment on goods, chaos at the ports - and economic damage -
could ensue.

Essential supply chains - such as those used to produce millions of cars -
will be disrupted.

And there will be no solution to the "no hard border" on the island of
Ireland. That has to be headed off.

On services, the risks are less clear. In sectors such as finance, law and
legal - Britain is a global leader, the government says.

As such, its services enjoy high levels of global demand and the government
believes Britain can make progress on services trade deals outside the EU,