Major International Business Headlines Brief::: 23 July 2018

[Bulls n Bears]

 <http://www.bulls.co.zw/> Bulls.co.zw        <mailto:bulls at bulls.co.zw>
Views & Comments        <http://www.bulls.co.zw/blog> Bullish Thoughts
<http://www.twitter.com/BullsBears2010> Twitter
<https://www.facebook.com/BullsBearsZimbabwe> Facebook
<http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn
<mailto:info at bulls.co.zw?subject=Unsubscribe> Unsubscribe

 


 

 


Major International Business Headlines Brief::: 23 July 2018

 


 

 


 <http://www.nedbank.co.zw/> 

 


 

 


 

 

*  Zimbabwe tobacco sales at all time high, could ease dollar crunch

*  Ethiopia's birr black-market evaporates as confidence booms

*  Shareholders approve Steinhoff Africa Retail name change

*  Egypt hikes gas prices by up to 75 pct in IMF-backed austerity plan

*  Gabon oil workers' union ends strike at Total facilities

*  Steinhoff's creditors support debt lock-up, key to saving retailer

*  South Africa's Sasol flags up to 11 pct drop in FY earnings

*  Nigeria to devise green bond issuance programme by end 2018

*  Court blow to tax plans aimed at funding cheap Kenyan housing

*  South African rand recovers from hawkish cenbank comments, stocks rise

*  Trade tensions pose a risk to global growth - G20 ministers

*  India scraps tampon tax after campaign

*  How Netflix went from pioneer to powerhouse

*  Dominic Raab: We can get Brexit deal done by October

*  Recycled packaging 'may end up in landfill', warns watchdog

*  Six ways China could retaliate in a trade war

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Zimbabwe tobacco sales at all time high, could ease dollar crunch

HARARE (Reuters) - Zimbabwe’s tobacco sales have reached a record high of
237.1 million kg with a week to go before the selling season ends, official
data showed on Friday, raising hopes its second biggest export could help
ease the country’s severe dollar shortage.

 

Growing demand from China, the world’s biggest smoking nation, and funding
from private tobacco companies have boosted output, which plunged to its
lowest in 2008.

 

Tobacco accounted for a quarter of Zimbabwe’s $3.8 billion in total export
earnings in 2017, behind gold.

 

The sector was previously dominated by white farmers until they were
forcibly evicted in a controversial government land seizure drive in 2000.
Now tens of thousands of black farmers who benefited from the land reforms
are growing tobacco.

 

Tobacco Industry and Marketing Board (TIMB) data showed that sales of the
crop at local auctions had eclipsed the previous record of 236.9 million kg
in 2000. Back then, 4,000 white farmers produced 85 percent of the crop.

 

This year 111,000 farmers grew tobacco, up from 81,000 last year, TIMB
figures showed.

 

TIMB spokesman Isheunesu Moyo said despite a mid-season drought in January,
farmers exceeded expectation and “this ranks as the best year in terms of
production.”

 

Zimbabwe is suffering from shortages of U.S. dollars, a big obstacle to
businesses importing goods they need or repatriating the profits they hope
to make, while portfolio investors can’t get their money out of the stock
market.

 

After raging hyperinflation, Zimbabwe abandoned its currency in 2009 in
favour of the dollar, but a widening trade deficit and lack of foreign
investment have led to dollar shortages.

 

The nation of 13 million people will on July 30 hold its first presidential
and parliamentary vote since Robert Mugabe was forced to resign after a coup
amid expectation that this coul help unlock foreign funding if certified
free and fair by the international community.

 

“The season went well because tobacco fetched good prices, so we go into the
elections feeling happy. But the challenge was getting money from the
banks,” small-scale farmer Terrence Sibindi told Reuters at a local auction.

 

Tobacco has become the biggest success story of the government’s land
reforms, which Mugabe defended as necessary to correct skewed colonial land
ownership.

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


Ethiopia's birr black-market evaporates as confidence booms

ADDIS ABABA (Reuters) - A “hard currency amnesty” and reform-driven
confidence in Ethiopia’s economy, both at home and abroad, have helped close
a once yawning gap between the official and black market exchange rates for
its birr currency.

 

As cash - in some cases briefcases full of dollars - pours into banks, local
businesses say they are finally feeling relief from a foreign exchange
crunch that had seen some segments of the economy grind to a halt.

 

Businesses and analysts in the capital Addis Ababa told Reuters on Friday
the birr was trading on the parallel market around 28 to the dollar, close
to parity with the official rate and 25 percent firmer than three months
ago.

 

“All of a sudden this is happening,” said one real estate agent whose
business had come to a standstill over the past year because the
construction sector could not access dollars to import building materials.

 

“I’m not sure of the source of the foreign exchange, but psychologically the
scarcity mentality has changed overnight,” the woman, who asked not to be
named, told Reuters.

 

In a televised address earlier this week, 41-year-old reformist Prime
Minister Abiy Ahmed called upon those hoarding hard currency to deposit it
in banks.

 

The call, which has come to be known locally as a “hard currency amnesty”,
came with a warning: those who refused would be tracked down.

 

The government this week also opened a diaspora fund bank account and is
asking Ethiopians abroad to contribute. And the United Arab Emirates last
month agreed to deposit $1 billion in Ethiopia’s central bank.

 

“VERY LIQUID”

Though it’s among Africa’s fastest-growing economies, Ethiopia’s export
sector - mainly garment manufacturing and agricultural produce - has
struggled to take off, and the economy is not generating enough dollars to
pay for imports.

 

A decade-long infrastructure push aimed at industrialising the
overwhelmingly agrarian nation to create jobs has as a side-effect
exacerbated the dollar shortage.

 

Since earlier this year, essential items including insulin, blood pressure
medication and infant formula have become scarce. The dollar shortage has
also dissuaded international firms from investing out of fear they will
struggle to repatriate profits.

 

That could now change.

 

Since taking office in April, Abiy has turned politics and the economy on
its head in the nation of 100 million people.

 

His moves to liberalise the economy by opening up lucrative state-owned
assets to foreign investment have been cheered by his people as well as
outside investors keen to enter one of Africa’s last untapped markets.

 

On Thursday, Abiy’s newly appointed central bank governor, Yinager Dessie,
pledged to meet the business community regularly and pledged that their main
concerns - scant access to credit and foreign exchange - were government
priorities.

 

Businesses in the capital said their letters of credit, which banks had
declined to honour for months, were finally being approved.

 

It remains to be seen if the government is now willing to loosen its grip on
foreign exchange access and the exchange rate itself.

 

Some remain sceptical, but at least for now Ethiopians are breathing a sigh
of relief.

 

“This morning I was talking to a manager at Commercial Bank of Ethiopia who
told me ‘We are very liquid right now. Let me show you an example’,” said
Zemedeneh Negatu, chairman of Fairfax, a United States-based, Africa-focused
investment firm.

 

Nearby, three bank employees were counting bills from a briefcase packed
with $1 million in cash that a client had brought in earlier in the day.

 

 

Shareholders approve Steinhoff Africa Retail name change

JOHANNESBURG (Reuters) - Shareholders of South Africa’s Steinhoff Africa
Retail (STAR) have approved changing the company’s name to Pepkor Holdings
in a move to further distance the company from its crisis-hit parent,
Steinhoff International.

 

Parts of STAR’s business were formally called Pepkor.

 

The resolution to change the company’s name received 99.9 percent of votes
from the shareholders present, STAR said in a statement on Friday.

 

Steinhoff International has been fighting for survival after revealing
accounting irregularities which sent its shares tumbling and sparked panic
about the credibility of STAR’s own accounts.

 

 

 

Egypt hikes gas prices by up to 75 pct in IMF-backed austerity plan

CAIRO (Reuters) - Egypt said on Saturday it was raising the price of natural
gas for home and commercial use by up to 75 percent, the latest move in an
IMF-backed austerity programme that has left many Egyptians struggling to
make ends meet.

 

The increases follow hikes to fuel, electricity and public transport prices
that are part of a $12 billion IMF loan programme signed in 2016 that aims
to lure back investors and lift the economy battered by political turmoil
since 2011.

 

The government statement published in the Official Gazette said that,
effective Aug. 1, the price for consuming up to 30 cubic metres of gas had
been set at 0.175 Egyptian pounds ($0.0098) per cubic metre, up from 0.100
pounds.

 

The price for consuming between 30 and 60 cubic metres was set at 0.250
pounds, up from 0.175 pounds, while consumption of more than 60 cubic metres
was set at 0.300 pounds from 0.225 pounds.

 

The statement did not specify the timeframes over which the consumption
levels apply. But officials said they covered the usual billing period,
which is monthly in Egypt.

 

Price hikes under the three-year IMF programme helped drive up Egypt’s
annual urban consumer inflation rate to 14.4 percent in June. Analysts said
the impact of cutting energy subsidies was feeding through to the broader
economy faster than expected.

 

($1 = 17.8500 Egyptian pounds)

 

 

Gabon oil workers' union ends strike at Total facilities

DAKAR (Reuters) - Gabon’s oil workers’ union ONEP on Friday ended a strike
at Total facilities across the country after 11 days, it said in a
statement.

 

The 15-day strike was meant to last until next Tuesday over demands for
higher pay and career advancement opportunities. It was not clear if Total
made any concessions, although ONEP said it might resume the strike if the
company did not meet its demands.

 

 

 

Steinhoff's creditors support debt lock-up, key to saving retailer

JOHANNESBURG (Reuters) - Steinhoff’s creditors have agreed to hold on their
debt claims for three years, the embattled retailer said on Friday, throwing
a lifeline for the South African retailer caught in the throes of an
accounting scandal.

 

The parties will now seek to implement the restructuring within three
months, the retailer, which has more than 40 retail brands including
Conforama, Poundland and Mattress Firm, said.

 

Steinhoff’s shares initially rose 3 percent in response to the news, but
later pared its gains to trade down 1.69 percent at 3.50 rand by 0939 GMT.

 

It is fighting for survival after revealing multi-billion euro holes in its
balance sheet that wiped more than 90 percent off its market value and
forced it to sell assets to fund working capital.

 

The agreement would give the firm’s subsidiaries three years breathing space
without debt repayments, paving the way for the company to restructure 9.4
billion euros ($11 billion) of debt.

 

Under the terms of the restructuring deal, the company’s external debt would
be restated at par and be given a common maturity date of three years from
the completion of the restructuring agreement, it said in a statement.

 

The crisis-hit retailer also said on Friday it had received 91 percent
approval from its Hemisphere lenders.

 

Hemisphere portfolio, which holds about 140 property assets, include stores,
warehouses and offices across Austria, Germany, the Netherlands,
Switzerland, Britain and eastern Europe.

 

Steinhoff said it would now negotiate the terms of the Hemisphere lock-up
agreement with the lenders.

 

In April a real estate specialist cut the valuation of the property
portfolio to 1.1 billion euros from Steinhoff’s value of 2.2 billion euros.

 

 

South Africa's Sasol flags up to 11 pct drop in FY earnings

JOHANNESBURG (Reuters) - South African Petrochemicals group Sasol expects
full-year profit to drop as much as 11 percent on the back of employee
share-based payment expenses and other one-off items, the firm said on
Friday.

 

Sasol said core headline earnings per share (HEPS) for the year ended June.
30, 2018 are expected to decrease by 46 cents to 4.30 rand ($0.3190) from
38.47 rand in the same period the previous year.

 

Earnings before interest, tax, depreciation and amortisation (EBITDA) are
expected to increase by 6 percent to 16 percent.

 

“The difference between core HEPS and EBITDA in the current year is largely
due to depreciation of approximately 16 billion rand and employee
share-based payment expenses of 1.5 billion rand due to the marked
improvement of the Sasol share price at the end of the financial year,” the
firm said in a statement.

 

($1 = 13.4793 rand)

 

 

Nigeria to devise green bond issuance programme by end 2018

LAGOS (Reuters) - Nigeria’s debt office will devise a green bond programme
before the end of 2018 to raise funds for environmental projects, a junior
minister for the environment said on Friday.

 

Ibrahim Jibril said the capital market could see issues of around 208
billion naira ($682 million) this year to fund projects to reduce carbon
emissions. The ministry said the total figure was not fixed and would depend
on an evaluation of the projects that need funding.

 

“Before the year runs out the DMO will come up with a program where we will
come to the market for another issue,” Jibril told reporters at the listing
of its debut green bond on the Nigerian Stock Exchange.

 

Nigeria has been exploring options to fund its successive record budgets
especially after an oil price collapse in late 2014 that triggered a
recession two year later. The economy has since recovered but growth is
still fragile.

 

The environment ministry has said a bond programme for environmental
projects is part of the government’s aim to align with a global objective of
expanding the market for finance for efforts to fight climate change.

 

Last year the West African country issued a maiden 10.69 billion naira green
bond with a five-year tenor to fund projects to develop renewable energy. It
was listed on Friday for secondary trading.

 

($1 = 304.85 naira)

 

 

 

Court blow to tax plans aimed at funding cheap Kenyan housing

NAIROBI (Reuters) - Kenya’s High Court has temporarily blocked tax hikes
designed to fund a range of government development goals, including the
provision of affordable housing.

 

The court suspended a 0.05 percent tax on bank transfers above 500,000
shillings ($4,967.71) and a two percentage point increase in excise duty on
mobile money transfers.

 

It also suspended a range of other new tax measures in a separate ruling
late on Thursday. The suspensions will remain in force until the cases are
heard in September.

 

The moves followed a complaint brought by the Kenya Bankers Association, an
umbrella lobby for lenders, which says the transfers tax is hard for banks
to enforce.

 

A separate suit filed by a member of the public argues Finance Minister
Henry Rotich cannot impose taxes before parliament has passed the budget.

 

Rotich told parliament last month the levies would help generate an extra
27.5 billion shillings for the fiscal year starting this month.

 

He declined to comment on the court rulings during a news conference at the
Treasury on Friday.

 

President Uhuru Kenyatta, sworn in for a second and final term last
November, has made universal healthcare, affordable housing, food security
and the manufacturing sector his “Big 4” priorities.

 

However, the tax measures, which also aim to cut the fiscal deficit, have
angered many people and groups in the economy.

 

The “Robin Hood” tax on large bank transfers has particularly worried the
financial sector.

 

Jibran Qureishi, economist for East Africa at Stanbic Bank, said it would
stifle tax payments, interbank lending and decimate the fund management
industry which has to move around huge volumes of cash between accounts.

 

“It would had been one step forward, 10 steps backwards, even if the rate
cap was repealed and this Robin Hood tax was implemented,” he said. The
budget also repealed a cap on commercial lending rates, a move long called
for by the banking sector.

 

Parliament has yet to pass the budget but Rotich had imposed the tax rises
from July 1, citing a law that allows him to do so before the budget becomes
law.

 

Qureishi said the finance ministry had failed to consult widely enough
before imposing the transfer tax, in what he said was a breach of the
constitution.

 

Analysts said the rulings would make it difficult for the government to
balance its books while reducing the budget deficit, which Rotich set at 5.7
percent of gross domestic product this financial year, down from 7.2 percent
in the year to the end of June.

 

Akinwumi Adesina, the president of the African Development Bank (AfDB), said
Kenya’s debt was manageable.

 

“Your debt-to-GDP ratio is roughly about 54 percent, which is very good. And
when I look at value, Kenya is not in any risk of debt distress at all,” he
told a joint news conference with Rotich.

 

($1 = 100.6500 Kenyan shillings)

 

 

 

South African rand recovers from hawkish cenbank comments, stocks rise

JOHANNESBURG (Reuters) - South Africa’s rand rose more than 1 percent on
Friday as short sellers bought back into the currency at cheaper levels
after hawkish comments from the central bank caused a sharp decline in the
previous session.

 

On the bourse, stocks closed higher for a fourth straight session, led by
rand-hedged stocks which tend to strengthen as the currency weakens.

 

Having risen more than 1 percent earlier in the session, at 1540 GMT the
rand was 0.65 percent firmer at 13.4525 per dollar. On Thursday it tumbled
to a 2-week low of 13.6195 overnight after the Reserve Bank held benchmark
interest rates and cut its outlook for the local economy.

 

“The rand appreciated a bit on short covering at the start of Friday’s
session in the aftermath of U.S. President Donald Trump saying late on
Thursday that he was “not thrilled” by Fed rate hikes,” said analyst at
Continuum Economics Juri Kren.

 

While the decision was expected, the bank’s view that inflation pressures
had tilted to the upside and that economic growth would remain tepid soured
sentiment, stoking a quick selloff as bearish investors used 13.50 as an
exit point.

 

Friday’s trade session however saw the rand open on the frontfoot.

 

And with Trump’s latest comments spurring investors to take profits on the
greenback’s recent rally, and subsequent short-covering by rand bears seeing
value around 13.45, the rand extended its run firmer.

 

The rand is however expected to struggle to hold on to gains in the upcoming
week with U.S.-China trade tensions seen returning to the forefront of
investors radars.

 

Bonds were also firmer, with the benchmark paper due in 2026 down 1 basis
point to 8.735 percent.

 

The blue-chip Top-40 index closed up 1.4 percent at 50,904 points, while the
broader All-Share index rose 1.27 percent to 56,990 points.

 

“Its longest winning streak since mid-May as rand hedges were among the
biggest contributors to the benchmark’s strength after the currency’s 2
percent slump yesterday,” said a traders note from Avior Capital Markets.

 

Bourse heavyweight Naspers, which owns about 30 percent of the Chinese
technology firm Tencent, closed up 1.79 percent at 3448.50 rand, while
British American Tobacco rose 3.72 percent to 695.36 rand.

 

Sasol gained 0.77 percent to 502.84 rand after it flagged higher full-year
EBITDA.

 

By contrast, the biggest decliner was retailer Steinhoff’s, which fell 9.27
percent to 3.23 rand on profit-taking.

 

This was after shares soared 26 percent on Thursday when creditors agreed to
hold off debt claims for three years.

 

 

 

 

Trade tensions pose a risk to global growth - G20 ministers

The G20 group of finance ministers have said trade tensions could undermine
the global economy.

 

They called for greater dialogue to reduce the risk after a tense, two-day
meeting in Argentina.

 

The summit comes as the US ramped up trade tensions on Friday, saying it was
ready to slap tariffs on all $500bn of imports from China.

 

France's finance minister, meanwhile, said the EU should not negotiate trade
with "a gun to its head."

 

In a joint statement, the G20 ministers said risks to growth "over the short
and medium term have increased. These include rising financial
vulnerabilities, heightened trade and geopolitical tensions."

 

"International trade and investment are important engines of growth," they
said, adding that they "recognise the need to step up dialogue and actions
to mitigate risks and enhance confidence."

 

The G20 summit comes as a trade war has escalated in recent weeks after the
US opened fire on 6 July with tariffs on $34bn of Chinese goods.

 

The US has since listed another $200bn worth of Chinese products to be
targeted and has threatened tariffs on an even greater amount.

 

US President Donald Trump also described the EU as a "foe" on trade last
week.

 

French Finance Minister Bruno Le Maire warned that a trade war was now a
reality at the G20 summit. He said the current US trade policy of imposing
unilateral tariffs was based on "the law of the jungle".

 

But US Treasury Secretary Steven Mnuchin defended the tariffs and urged the
EU and China to open their markets to allow free competition.

 

The US has large trade deficits with both the 28-member EU and China.

 

Given the US buys nearly four times as much from China as it sells to them,
analysts fear it could seek alternative ways to get back at the US.

 

The two-day summit in Buenos Aires brought together finance ministers and
central bankers of the world's top 20 economies.

 

How a US-China trade war could hurt us all

Six ways China could retaliate in a trade war

US-China trade row: What has happened so far?

What did the French minister say?

"World trade cannot base itself on the law of the jungle and the unilateral
increase of tariffs is the law of the jungle," Mr Le Maire said on Saturday.

 

"The law of the fittest - this cannot be the future of global trade
relations. The law of the jungle will only turn out losers, it will weaken
growth, threaten the most fragile countries and have disastrous political
consequences."

 

He added that a trade war was now a reality, and that the EU could not
consider negotiating a free trade deal with the US without America first
withdrawing its tariffs on steel and aluminium.

 

What is the US argument?

Mr Mnuchin said it was pretty simple.

 

"My message is pretty clear, it's the same message the president delivered
at the G7 (last month in Canada): if Europe believes in free trade, we're
ready to sign a free trade agreement with no tariffs, no non-tariff barriers
and no subsidies. It has to be all three," he said.

 

Mr Mnuchin said China had to open its markets "so we can compete fairly".

 

Tariff war. How did we get here?

Little has caused Donald Trump more annoyance than the trading deficits
between the US and its major partners.

 

He believes that if you have a trade deficit - if you import more than you
export - you are losing out.

 

Tackling what he has called "unfair trading practices" has become a key
plank of his administration.

 

The European Union, China and the North American Free Trade Agreement
(Nafta) countries, Mexico and Canada, have been his main targets.

 

Mr Trump has pulled out of the Trans-Pacific Partnership (TPP) trade deal
and wants a renegotiated Nafta deal.

 

US tariffs a dangerous game, says EU

The key actions so far

January: The US slaps tariffs on imported washing machines and solar panels

 

June: The Trump administration introduces tariffs of 25% on steel and 10% on
aluminium imported into the US, arguing that global oversupply, driven by
China, threatens American producers. The EU enacts retaliatory tariffs on a
range of US goods, including bourbon whiskey, Harley Davidson motorcycles
and orange juice

 

July: A 25% tariff affecting $34bn (£25.7bn) of Chinese goods begins. China
retaliates in kind, with equivalent tariffs on the same value of US goods.
Mr Trump threatens a 10% additional tariff on $200bn worth of additional
Chinese products, naming more than 6,000 items--BBC

 

 

 

India scraps tampon tax after campaign

India has scrapped its 12% tax on all sanitary products following months of
campaigning by activists.

 

The announcement comes a year after the government introduced the tax, known
as GST, on all goods - including the 12% duty on menstrual hygiene products.

 

Campaigners argued the tax would make them even more unaffordable in a
country where an estimated four out of five women and girls already have no
access to items like sanitary pads.

 

The news was welcomed by campaigners.

 

Surbhi Singh, founder of Sachhi Saheli, a menstrual health awareness
charity, told the Thomson Reuters Foundation: "This was a most-awaited and
necessary step to help girls and women to stay in school, their jobs, to
practise proper menstrual hygiene.

 

"This will help them to grow, to show their true potential."

 

Periods are one of the leading reasons why girls drop out of education in
India, while many others are forced to stay at home because they can't
access sanitary products.

 

Some women use cloth or rags - which, if not clean, can increase the risk of
infections.

 

So when the government branded tampons and sanitary pads a luxury item, with
a 12% tax, it sparked an immediate campaign to get the measure revoked,
including court challenges and petitions - one of which got more than
400,000 signatures.

 

It was known as Lahu ka Lagaan in Hindi, which translates as "blood tax".

 

The announcement their campaign had been successful was made by India's
interim finance minister, Piyush Goyal, who said he was "sure all mothers
and sisters will be very happy to hear that sanitary pads are now 100%
exempt from tax".

 

Campaigner Amar Tulsiyan, founder of Niine Movement, went further, saying it
was "a big win for everyone" in India.

 

Period poverty is not only a problem affecting women in India. According to
charity Plan International UK, one in 10 disadvantaged girls below the age
of 21 cannot afford sanitary products.

 

The UK still has a 5% tax, despite campaigners calling for it to be
scrapped.--BBC

 

 

 

How Netflix went from pioneer to powerhouse

When Netflix started out in 1999, as a mail-order DVD service, few would
have bet that it would become a force that even the biggest media companies
fear.

 

In the early days it hastened the demise of neighbourhood movie rental
stores. But it was in 2007 that it made the crucial move.

 

That year it became a pioneer of online streaming, a development that would
upend the media industry's traditional business models and transform Netflix
into a global powerhouse.

 

The company is now one of the most valuable media firms in the US, rivalling
Disney and exceeding Comcast, which owns NBC Universal.

 

Here's a look back in charts at the company's rise.

 

1. Subscriber growth

Netflix had fewer than 1 million subscribers at the end of 2002, its first
year as a public company. Today it counts over 130 million - almost double
the population of the UK.

 

Since the end of 2011, the firm has added more than 100 million subscribers,
growing by 25% in 2017 and 2016.

 

Can the firm maintain that pace? It's not clear yet.

 

In the most recent quarter, the firm added about 5.2 million subscribers -
unchanged from the same period in 2017, a slowdown that disappointed
investors.

 

But for the first six months of the year, its rate of growth is comparable
to prior years, with membership up about 25% from the first half of 2017.

 

2. International momentum

Netflix is betting that growth overseas will help sustain its momentum,
making investments in markets like India and Brazil.

 

The firm's international subscribers outnumbered US memberships for the
first time last year.

 

The company hit another milestone in the most recent quarter, when revenue
from international subscribers exceeded that from the US for the first time.

 

But analysts warn that competition overseas is likely to be fierce, and as
Netflix targets countries like India, it may not be able to charge the
prices it does in the US.

 

3. Industry upset

As online streaming has gained traction, it has encouraged viewers to stop
paying for pricey pay-TV packages.

 

About 79% of US households paid for cable or satellite service, according to
a September 2017 survey by the Leichtman Research Group. That compared to a
peak of 88% in 2010.

 

Netflix subscribers now outnumber those for pay TV in the US, with similar
trends in evidence in other countries.

 

'Netflix effect' poses challenge to British TV

Disney to start online streaming, bypassing Netflix

The decline in pay-TV subscriptions, which has coincided with a surge of
advertising on platforms like Facebook, has hurt traditional media
companies, which increasingly view Netflix as a threat.

 

That could mean challenges for Netflix in the years ahead, as they stop
licensing content to Netflix and focus on their own online streaming
services.

 

4. Original content

That threat is one reason why Netflix has started to become a producer of
original television and movies, including titles such as Stranger Things.

 

Netflix, which wants at least half of its catalogue to be original, is now
one of the biggest investors in film and television in the US, inking deals
with superstar showrunners like Shonda Rhimes, known for shows such as
Grey's Anatomy and Scandal.

 

The company has already spent more than $5bn on licensed and original
content this year and expects that figure to exceed $8bn by the end of 2018.

 

7 shows that helped make Netflix so popular

5. Rising value

Disappointment over the recent subscriber growth hurt Netflix shares this
week, but it's only a scratch on an otherwise shiny performance.

 

Much of the growth since 2012 has accompanied a rising stock market; even
so, Netflix stands out.

 

Last year, the share price rose more than 55%, while the S&P 500 climbed
about 20%.

 

Before this week's decline, the firm's shares had roughly doubled so far
this year, while the S&P 500 index is up only about 5%.--BBC

 

 

 

Dominic Raab: We can get Brexit deal done by October

A deal with the EU can be reached by October but the UK is preparing for the
possibility of no deal, Brexit Secretary Dominic Raab has said.

 

He said he would return to Brussels for talks on Thursday and strain "every
sinew" to get "the best deal".

 

But the government had plans in place in case talks did not end well, he
told the BBC.

 

Labour leader Jeremy Corbyn said there must be a "serious stepping up of
negotiations" to avoid no deal.

 

The UK is due to leave the European Union on 29 March 2019, but the two
sides have yet to agree how trade will work between the UK and the EU
afterwards.

 

Theresa May hopes the government's plan, detailed recently in the Brexit
White Paper, will allow the two sides to reach a deal on relations by the
autumn.

 

Downing Street said on Sunday that cabinet ministers would be promoting the
plan across Europe over the summer.

 

Theresa May would "take the lead" by meeting the Austrian chancellor, Czech
prime minister and Estonian prime minister next week.

 

Mrs May said: "We must step up the pace of negotiations and get on to
deliver a good deal that will bring greater prosperity and security to both
British and European citizens.

 

"We both know the clock is ticking - let's get on with it."

 

'Positive sign'

Mr Raab told the BBC's Andrew Marr Show if the "energy, ambition and
pragmatism" the UK brought to negotiations was reciprocated, a deal would be
done in October.

 

He noted that 80% of the withdrawal agreement was already settled.

 

And he said it was "useful" that EU chief Brexit negotiator Michel Barnier
had raised questions about the prime minister's blueprint for the UK's
future trading relationship with the EU.

 

"The fact Michel Barnier is not blowing it out of the water but asking
questions is a good, positive sign - that's what we negotiate on."

 

But he said preparations such as hiring extra border staff were being made
because "any responsible government" would make sure plans were in place in
case negotiations failed.

 

Technical notices would be released for businesses and citizens affected
during the summer to be "very clear about what they should do and what we
are doing on their behalf" he added.

 

Asked about European Commission comments that there were no arrangements in
place for UK and EU expats in the event of no deal, Mr Raab said: "Well, I
think that's a rather irresponsible thing to be coming from the other side.

 

"We ought to be trying to reassure citizens on the continent and also here.

 

"There is obviously an attempt to try and ramp up the pressure."

 

The 'no deal' talk continues

Analysis by Jonathan Blake, BBC political correspondent

 

We've heard it often enough: "No deal is better than a bad deal".

 

But for EU negotiators to believe the UK would walk away without agreement,
the government has to be seen to be taking that option seriously.

 

And so we are told about "planning" and "technical notices" to prepare for a
"clean break" Brexit.

 

Reports of food stockpiles and a motorway becoming a lorry park are
dismissed as "unhelpful snippets" but contingency plans will be made
nonetheless.

 

Both sides agree a deal needs to be reached by October, and negotiations are
likely to go down to the wire.

 

So even if a deal appears to be in sight, expect the talk of the UK leaving
the EU without one to continue.

 

He added that the prospect of people being removed from the UK was
"far-fetched and fanciful" and said it would be "frankly irrational" for the
EU to go for the "worst case scenario" of no deal.

 

But the UK had to be prepared with things like allocating money, preparing
treaty relations, and hiring extra border staff "so that Britain can thrive,
whatever happens," he said.

 

Labour leader Mr Corbyn, on a visit to the annual Tolpuddle Martyrs Festival
in Dorset, said it seemed the priority was preparation for no deal.

 

He added that would be "very bad", as "we then go onto World Trade
Organization tariff rates that would hit the manufacturing industry and hit
the food processing industry, and hit an awful lot of things in Britain very
rapidly".

 

"There has to be a serious stepping-up of negotiations to reach an agreement
on customs and on trade."

 

Earlier, Mr Raab suggested to the Sunday Telegraph that he was still
persuading other cabinet ministers that the government's "pragmatic"
strategy for leaving the EU was the "best plan" and that the UK could refuse
to pay its so-called divorce bill, a payment from the UK to the EU estimated
to be about £39bn, if it does not get a trade deal.

 

'Additional burdens'

Theresa May's proposal for a future trade relationship with the EU sparked
two cabinet resignations, including Mr Raab's predecessor David Davis.

 

The White Paper proposes close ties in some areas, such as the trade in
goods, but will end free movement and the jurisdiction of the European
Court, and allow the UK to strike trade deals with other nations.

 

Critics at Westminster say it is an unworkable compromise which would leave
the UK being governed by the EU in many areas, but with no say in its rules.

 

And EU chief negotiator Michel Barnier questioned on Friday whether UK plans
for a common rulebook for goods and agri-foods were practical and said the
EU would not run the risk of weakening its single market.

 

Meanwhile, Mr Davis, whose resignation from Mrs May's top team was followed
by that of former Foreign Secretary Boris Johnson, told the Sunday Express
the government should "start again" on withdrawal plans.--BBC

 

 

 

Recycled packaging 'may end up in landfill', warns watchdog

You try to be virtuous, wiping the curdling yoghurt off a plastic pot, then
putting it in the recycling bin.

 

Perhaps you envisage the pot eventually re-incarnated as a frisbee or maybe
even a plastic bench.

 

But don’t rest easy. Your pot might get burned or buried in landfill, and
you’d never know.

 

The National Audit Office (NAO) says over half of the packaging reported as
recycled is actually being sent abroad to be processed.

 

As a result, it says, the government has little idea of whether the
recyclables are getting turned into new products, buried in landfill or
burned.

 

While an illusion of success has been created by the UK’s system for
recycling packaging, the NAO says, the reality may be quite different.

 

Its report finds that:

 

The government has turned a blind eye to underlying problems with the waste
system

Firms may be over-stating the amount they are recycling

The Environment Agency has only carried out 40% of the recycling checks it
planned to

Exporting our waste

 

The UK is said to have increased recycling from under a third in 1998 to
nearly two thirds last year, easily beating the EU target.

 

It sounds good.

 

But the NAO says most of the recorded increase in recycling has been due to
the UK exporting its waste problem.

 

Michael Gove, the Environment Secretary, is already on record saying the UK
has got to stop exporting its dirt.

 

Reducing waste and using resources better, as well as tackling packaging
waste is key to that.

 

The environment department Defra estimates that UK packaging recycling rates
have increased from 31% in 1998 to 64% in 2017. That beats the EU target of
55%.

 

But since 2002 the quantity of packaging waste exported has increased
six-fold, whilst the quantity recycled in the UK has remained the same.

 

What’s more, the figures don’t take into account the risk of undetected
fraud and error.

 

The NAO says there’s nothing to prove that packaging sent for recycling
actually gets recycled.

 

Nor does Defra have evidence that the system has done what it’s supposed to
have done by encouraging companies to minimise their use of packaging or
make it easy to recycle.

 

Is it time to scrap shrink-wrapped records?

The NAO's report found only 25% of the firms most likely to misbehave over
re-processing or exporting waste are inspected, while just 40% of planned
compliance visits were actually carried out.

 

An Environment Agency spokesperson, said "where we find any evidence of
fraud or error in data reported to us, we remove that information from the
overall packaging recycling data and calculations."

 

'Tighter grip'

 

But Amyas Morse, the head of the NAO, said "a tighter grip on packaging
recycling is needed".

 

“Twenty years ago, the government set up a complex system to subsidise
packaging recycling, which appears to have evolved into a comfortable way of
meeting targets without addressing the fundamental issues.

 

“The government should have a much better understanding of the difference
this system makes and a better handle on the risks associated with so much
packaging waste being recycled overseas."

 

Currently large firms handling over 50 tonnes of packaging a year need to
show they have recycled a certain amount of packaging.

 

They do this by paying for a credit note - a Packaging Recovery Note (PRN) -
from a recycling firm to contribute to improving recycling.

 

Defra says the scheme raised £50m in 2016. The cash was to be used for
"capacity building" in the recycling system through increasing collection
and processing of recyclables.

 

But critics say the scheme is so opaque it is hard to tell exactly how the
money is spent.

 

Local councils, which have to run waste collection and litter services,
complain they don’t see a penny of it.

 

A government spokesman says that scheme has increased recycling rates
"significantly".

 

“However, there is much more to do. We don’t recycle enough waste, and we
export too much of it.

 

“That’s why we have already committed to overhaul the system, and we will
set out our reforms in the Resources and Waste Strategy later this
year.”--BBC

 

 

 

Six ways China could retaliate in a trade war

The US is threatening to escalate its trade war with China.

 

It imposed tariffs on $34bn of Chinese goods on 6 July and only days later
listed another $200bn of additional products it intends to target.

 

US President Donald Trump has said more than $500bn worth could be hit -
almost the entire value of China's goods exports to the US last year.

 

The US buys nearly four times as much from China as it sells to them. Given
that China has limited room to retaliate through trade, it could seek other
ways to get back at the US.

 

1. Action against US companies

US firms generate about $300bn of sales domestically in China so they are a
potential target, says Julian Evans-Pritchard from Capital Economics. He
highlights the likes of Apple, which have significant sales and operations
there.

 

He says China could make life difficult for US companies by slowing down
customs clearance for their imports, delaying or denying visa applications,
or using health and safety checks as a way of temporarily shutting down a
firm's operations.

 

There could also be more subtle measures. US companies may benefit less from
Chinese efforts to open up its services sector (in areas such as finance and
healthcare) than European and Japanese counterparts, says Julia Wang from
HSBC.

 

Gary Hufbauer of the Peterson Institute for International Economics (PIIE)
in Washington reckons China "will pick out US companies that are not well
connected, and burden them with all kinds of regulatory red-tape".

 

But he says, "this will hurt the Chinese economy, a lot", as US companies
contribute to China's economic growth.

 

How a US-China trade war could hurt us all

Charting the US-China trade battle

US-China trade row: What has happened so far?

2. Restrict tourism to the US

Although the US has a big trade deficit with China, the US sells more
services to China than it buys from them. Its services trade surplus with
China hit $38bn in 2016.

 

Part of that is overseas spending by tourists from China. More than 130
million people travelled out of China in 2016. Those tourists, whose
long-haul destinations included the US, spent around $260bn that year.

 

So China could restrict tourism to the US. It wouldn't be the first time
China has taken such an action. Last year it banned travel agencies from
selling package tours to Korea last year in protest at Seoul allowing a US
missile defence system.

 

However, some think this could be too disruptive.

 

"These measures will inflict pain on Chinese people," Mr Hufbauer says.

 

3. Devalue the currency

Lowering the value of the yuan would help exports by making Chinese goods
cheaper for other countries to import, and could offset the rise in prices
caused by the US tariffs.

 

Analysts say the fact China's central bank has not supported the currency
during its recent fall shows they are leaving things to market forces for
now.

 

Given the yuan has fallen to a one-year low against the dollar, analysts
also see little need for the central bank to intervene at this time.

 

"There is obviously some willingness to allow the currency to weaken to
dampen the effect of the tariffs," Mr Evans-Pritchard says. "I don't expect
them to engineer a major devaluation of the currency."

 

4. Sell US bonds

China owns more than $1tn of US government bonds, which some worry gives
Beijing influence over the US economy.

 

But if China sold US bonds in bulk, it would hurt China. Why? Because that
would reduce the value of an asset China holds a lot of, and it would have
to switch to other, less liquid foreign bond markets.

 

Also the impact on the US is likely to be limited, as US debt sold by China
is likely to be bought by other countries.

 

"We think this is very unlikely, as falling prices of US treasury securities
would also be a loss for China," Nomura said in a research note. "In
addition, we believe it is very difficult for China to re-invest its US
dollar holdings in a sensible way after selling US treasuries."

 

5. Interfere with North Korea talks

Mr Trump has suggested China may be interfering in US efforts to
denuclearise North Korea.

 

He recently tweeted he had confidence that North Korean leader Kim Jong Un
would honour their agreement, but added: "China, on the other hand, may be
exerting negative pressure on a deal because of our posture on Chinese
Trade-Hope Not!".

 

PIIE recently wrote that China had "formidable" weapons in a trade war and
could use leverage in areas outside the economic sphere.

 

"This is a card China could easily play - just signal to the North Koreans
to do what comes naturally - stall," PIIE's Mr Hufbauer says. "The big
drawback is that such action escalates the trade dispute into a geopolitical
dispute of unknown magnitude."

 

6. Focus on the domestic economy

China could focus on domestic growth, by making sure it has the tools to
keep the economy growing during tougher times and by expanding its trade and
investment relations with other countries.

 

Mr Evans-Pritchard says China's "best option" in responding to tariffs is to
be ready to prop up the economy. He notes there are signs that earlier moves
to slow credit growth and rein in debt levels are changing already.

 

HSBC's Julia Wang says China will try to expand trade with countries other
than the US. China recently hosted EU officials and discussed free trade.

 

"I think China has already been trying to diversify its trade and investment
relationship away from the US since a few years ago, and now they will
undoubtedly accelerate," she added.--BBC

 

 

 

 


 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


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.

 


 

 


(c) 2018 Web: <http:// www.bulls.co.zw >  www.bulls.co.zw Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

Invest Wisely!

Bulls n Bears 

 

Telephone:      <tel:%2B263%204%202927658> +263 4 2927658

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> info at bulls.co.zw  

Website:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw&sa=D&sntz=1&usg=AF
QjCNH8LYgdY55h-XKseuM8Kpr-JKdfhQ> www.bulls.co.zw 

Blog:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1
&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bulls.co.zw/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:
<http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimba
bwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA>
www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 



 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20180723/5d87dc9b/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 3653 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20180723/5d87dc9b/attachment-0006.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 8312 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20180723/5d87dc9b/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 29391 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20180723/5d87dc9b/attachment-0008.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 29388 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20180723/5d87dc9b/attachment-0009.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image005.jpg
Type: image/jpeg
Size: 29424 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20180723/5d87dc9b/attachment-0010.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image006.jpg
Type: image/jpeg
Size: 4846 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20180723/5d87dc9b/attachment-0011.jpg>