Major International Business Headlines Brief::: 14 November 2018

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Major International Business Headlines Brief::: 14 November 2018

 


 

 


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*  Zimbabwe's inflation at highest in a decade as dollar shortage bites

*  MTN making progress to resolve $10.1 bln dispute with Nigeria - CEO

*  MTN aims to offer mobile banking in Nigeria next year

*  South Africa's Telkom H1 profit up 10 pct, mobile unit robust

*  Shares in Nigeria's Diamond Bank fall further after denying takeover
talks

*  Zambia committed to improving debt transparency, President Lungu says

*  South African rand firms on U.S.-China trade optimism

*  NNPC says Nigeria will raise oil production to 1.8 mln bpd in 2019

*  Sudan expects bidding round to develop oil and gas in Q3 2019

*  IMF says held constructive talks with Zambia on restoring debt
sustainability

*  Amazon names locations for new US HQs

*  Spotify launches streaming service in the Middle East

*  Oil price drops amid fears over demand

*  Japan GDP: Natural disasters hit economic growth

*  Italy budget: Rome rejects European Commission demands

*  Flipkart boss resigns after misconduct investigation

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

                                      

Zimbabwe's inflation at highest in a decade as dollar shortage bites

HARARE (Reuters) - Inflation in Zimbabwe soared last month to its highest
level since 2008, official data showed on Tuesday, after a severe dollar
shortage led to a surge in prices of food, drinks and clothes.

 

The annual inflation rate shot up to 20.85 percent in October, statistics
agency Zimstat said, from 5.39 percent in September after the dollar
shortage led to a collapse in Zimbabwe’s parallel ‘bond note’ currency,
triggering sharp price hikes in many goods and services.

 

That has sent a ripple of fear among citizens still traumatised by the
hyperinflation era, which ended when Zimbabwe was forced to abandon its
currency and adopt the U.S. dollar in 2009.

 

Some businesses in Zimbabwe are now demanding cash in U.S. dollars only and
have raised prices by more than three times for the majority of Zimbabweans
who pay for their goods using the bond note, mobile money or bank cards.

 

On a monthly basis, prices jumped by 16.44 percent in October from 0.92
percent in September, Zimstat said.

 

“This was expected after the jump in prices we saw last month but it’s more
than what I had forecast,” said Tony Hawkins, a professor of business
studies at the University of Zimbabwe.

 

“Authorities will probably say its a one-off spike but how many people are
going to believe that? It now makes a mockery of the official inflation
forecast of 5 percent next year.”

 

Prices of basic goods like meat, cooking oil and flour rose when the value
of the bond note and electronic dollars collapsed on the parallel market
last month, leading to panic buying by consumers.

 

Zimstat stopped publishing official inflation data in September 2008 when it
reached 236 million percent, but the International Monetary Fund put the
figure at 500 billion percent. The statistics agency resumed running
inflation figures in February 2009.

 

Finance Minister Mthuli Ncube said on Oct. 2 the budget deficit, which is
expected to reach double digits this year, was fuelling inflationary
pressures and could hobble the economy.

 

The economic crisis is a major challenge for President Emmerson Mnangagwa,
who won a disputed vote on July 30 in the first election in the southern
African nation since Robert Mugabe was removed by the army a year ago after
nearly four decades in power.

 

Teachers unions last week petitioned the government to pay them in U.S.
dollars or increase their salaries saying the cost of living had increased
beyond their wages.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

MTN making progress to resolve $10.1 bln dispute with Nigeria - CEO

CAPE TOWN (Reuters) - South Africa’s MTN Group is making progress in
resolving a $10.1 billion funds repatriation and tax bill depute with
Nigerian authorities, its CEO said on Tuesday.

 

“I believe we are making steady progress towards finding a resolution,” Rob
Shuter told Reuters on the sidelines of a telecoms conference in Cape Town.

 

 

MTN aims to offer mobile banking in Nigeria next year

CAPE TOWN (Reuters) - MTN Group will apply for a mobile banking licence in
Nigeria and plans to launch the service there next year, its CEO said on
Tuesday, further embedding the South 

 

African telecoms company in its biggest but increasingly problematic market.

 

 

Nigeria announced last month that it would allow telecom companies to
provide banking services, aiming to give millions of Nigerians without bank
accounts access to so-called mobile 

 

money services, a policy that has been very successful in Kenya.

 

MTN runs Nigeria’s biggest mobile phone network serving 56 million people,
but it is also involved in a dispute with the authorities after the central
bank said it illegally transferred $8.1 

 

billion overseas.

 

Separately, it has been slapped with a $2 billion Nigerian tax bill and
whether those issues could influence how quickly MTN secures a licence
remains to be seen.

 

“We will be applying for a payment service banking licence in Nigeria in the
next month or so, and if all goes according to plan, we will also be
launching Mobile Money in Nigeria probably 

 

around Q2 of 2019,” Rob Shuter told a telecoms conference in Cape Town.

 

Rivals Airtel, a unit of India’s Bharti Airtel, as well as privately owned
Globacom and 9mobile, are also expected to apply for licences.

 

The success in east Africa of M-Pesa, the mobile money unit of Kenya’s
Safaricom, has convinced investors and the industry that financial services
is the next growth area for the 

 

telecoms sector which is grappling with falling prices for basic services.

 

‘HUGE OPPORTUNITY’

If granted a licence, MTN would launch the service in a country where 115
million Nigerians, or 60 percent of the population, does not have a bank
account, according to the World Bank.

 

“It’s a huge opportunity for MTN,” said Byron Lotter, fund manager at
Vestact, which owns shares in MTN. “The problem is they are being held
hostage by this $10.1 billion demand 

 

because their business is too big to leave.”

 

Shuter, who has led MTN since last year, also said the company would
relaunch mobile money services in South Africa, two years after canning the
service. The company has also bought 

 

a music streaming business Simfy, which Shuter said was “Africa’s leading
music streaming business.”

 

He did not give details about MTN’s plans to relaunch mobile money in South
Africa, a market that has proved difficult to crack because around 80
percent of the population already has 

 

access to traditional bank accounts.

 

Separately, MTN has joined forces with China’s Unisoc, China Mobile
Communications and Kaios, a mobile operating system, to manufacture
affordable 3G phones with some smartphone 

 

features such as YouTube and a camera, Shuter told a press briefing at the
conference.

 

The new devices would be launched in the first quarter of next year with an
initial 10 million phones available, he said.

 

Shuter, who has experience in banking, is in the middle of a strategic
revamp of Africa’s biggest telecoms group to hunt for returns in everything
from financial services, music and video 

 

games.

 

Shares in the company rose 1.3 percent to 80.89 rand, outpacing a broadly
flat JSE Top-40 index.

 

 

 

South Africa's Telkom H1 profit up 10 pct, mobile unit robust

JOHANNESBURG (Reuters) - South Africa’s Telkom posted a 10.3 percent rise in
its first-half profit on Tuesday, as a strong showing at its wireless phone
business offset declines in the 

 

traditional fixed-line unit.

 

Adjusted headline earnings per share, the main profit measure in South
Africa, came in at 328.6 cents for the six months through end-September,
compared with 297.8 cents a year 

 

earlier.

 

Telkom, which runs South Africa’s biggest fixed-line telecom network, is in
the middle of transforming itself into a modern communications provider with
heavy investments in a its mobile 

 

phone unit and rolling out fibre internet packages.

 

The company, 40 percent owned by the government, said service revenue from
it mobile business grew 54 percent to 3.6 billion rand ($250.19 million) as
it user base grew by almost the 

 

same margin to 6.5 million.

 

Telkom’s fibre network unit, Openserve, grew revenue by 0.9 percent to 8.6
billion rand.

 

($1 = 14.3890 rand)

 

 

 

Shares in Nigeria's Diamond Bank fall further after denying takeover talks

ABUJA (Reuters) - Nigeria’s Diamond Bank dropped 9.48 percent on Tuesday to
a more than one-year low, a day after the mid-tier lender denied media
speculation it was in talks to be 

 

bought by rival Access Bank.

 

Shares of Diamond Bank fell for a second straight day to 1.05 naira in late
trades.

 

Diamond has been managing its capital since 2016 to ensure it stays within
the minimum regulatory ratio and has said it would consider raising fresh
funds after selling some assets to 

 

strengthen its balance sheet.

 

 

 

Zambia committed to improving debt transparency, President Lungu says

LIVINGSTONE, Zambia (Reuters) - Zambia is committed to improving the
transparency of its debt management and reporting, and will ensure that debt
levels remain sustainable, President 

 

Edgar Lungu said on Tuesday.

 

“Zambia will remain steadfast in ensuring that our debt remains sustainable
and does not compromise our sovereignty. This country is implementing bold
measures to ensure that we 

 

achieve debt and fiscal sustainability,” Lungu told a conference organised
by the World Bank.

 

The International Monetary Fund has raised concerns over high borrowing by
Zambia, Africa’s second-largest copper producer.

 

 

 

South African rand firms on U.S.-China trade optimism

JOHANNESBURG (Reuters) - South Africa’s rand firmed against the dollar in
early trade on Tuesday, in line with a rise in stocks, as hopes of a
de-escalation in the Sino-U.S. tariff war rose 

 

on reports that China’s top trade negotiator was preparing to visit the
United States ahead of a meeting between the leaders of two countries.

 

At 0645 GMT, the rand traded at 14.3850 per dollar, 0.57 percent firmer,
having closed in New York at 14.4675.

 

The South China Morning Post reported that Liu He may visit Washington as
part of the preparations for the talks between U.S. President Donald Trump
and his Chinese counterpart Xi 

 

Jinping on the sidelines of the G20 summit in Argentina later this month.

 

Investor sentiment had been dented by the escalating trade spat between the
United States and China, as focus turns to this month’s Trump-Xi meeting.

 

Government bonds were weaker early on Tuesday, with the yield on the
benchmark instrument due in 2026 up 0.5 basis points at 9.230 percent.

 

Stocks were set to open higher at 0700 GMT, with the JSE securities
exchange’s Top-40 futures index up 0.23 percent.

 

 

 

NNPC says Nigeria will raise oil production to 1.8 mln bpd in 2019

ABU DHABI (Reuters) - Nigeria will increase its oil production to 1.8
million barrels per day in 2019 and raise condensate production to 0.5
million bpd, the managing director of Nigerian 

 

state oil firm NNPC said on Tuesday.

 

Nigeria currently produces 1.6 million bpd of oil and 0.4 million bpd of
condensate, Maikanti Baru told Reuters.

 

He added that he expected NNPC to sign deals with consortiums this month to
revamp long-neglected oil refineries.

 

 

 

Sudan expects bidding round to develop oil and gas in Q3 2019

ABU DHABI (Reuters) - Sudan’s oil minister said on Tuesday he expects a
bidding round to attract energy companies to develop oil and gas blocks to
take place in the third quarter of 

 

2019.

 

“I really expect a lot of companies to come, particularly now since we are
working ... on the second phase of discussions with the United States so we
can have this embargo lifted.”

 

 

 

IMF says held constructive talks with Zambia on restoring debt
sustainability

JOHANNESBURG (Reuters) - The International Monetary Fund (IMF) said on
Monday it held constructive talks with Zambian authorities on restoring
fiscal and debt sustainability during a 

 

visit to the country last week.

 

The Fund said in August that aid discussions were on hold because Zambia’s
borrowing plans were unsustainable. [nL8N1VG03N]

 

“Discussions ...covered the main elements of the draft 2019 budget ... and
strategies for restoring fiscal and debt sustainability while maintaining
growth,” the IMF said in a statement 

 

that made no mention of an aid programme for the major copper producer.

 

 

 

Amazon names locations for new US HQs

Amazon plans to build major new campuses in New York City and next to the
Pentagon near Washington DC, and expand its operations in Nashville.

 

The decision comes 14 months after the tech giant kicked off a
continent-wide competition by announcing a search for a "second
headquarters" location.

 

The contest drew 238 bids, as local officials leapt at the chance to land a
potentially transformative investment.

 

The three locations could create some 55,000 jobs in the next two decades.

 

Amazon said it expected to invest about $2.5bn each in New York and
Arlington, where the offices are planned to host more than 25,000
"high-paying jobs".

 

It said Nashville, Tennessee would become Amazon's new East Coast hub of
operations, creating another 5,000 positions.

 

In exchange, the e-commerce giant is due to receive more than $2bn (£1.9bn)
worth in tax benefits and other incentives from the state and local
governments.

 

How did it make its decision?

Amazon had originally said it was looking to build a single "HQ2" in a large
urban area, with proximity to a major airport and access to mass transit.

 

The Bezos backlash: Is 'big philanthropy' a charade?

How Jeff Bezos took Amazon to the top

The company said at the time that the new premises would create as many as
50,000 jobs and cost at least $5bn to build and operate.

 

However, Amazon eventually decided to split the jobs and investment between
two different locations.

 

Image caption

Amazon's offices in New York and Arlington are expected to host about 25,000
workers

On Tuesday, the firm said the division would allow it to "attract more top
talent", especially in software development, when hiring starts in 2019.

 

What was the reaction?

Shares in property companies expected to benefit shot up after rumours of
Amazon's selections circulated this month.

 

On Tuesday, top politicians in New York and Virginia cheered the
announcement, while property firms reported surging interest in the two
neighbourhoods.

 

Report

Others voiced worries that the influx of workers would drive up housing
costs, crowd highways and otherwise strain local resources, as Amazon's
expansion has in its hometown of Seattle, 

 

where it employs more than 45,000 people.

 

Alexandria Ocasio-Cortez, a newly elected member of Congress who represents
Long Island City, the New York neighbourhood Amazon has chosen, said her
office had received numerous 

 

calls from constituents expressing "outrage" about the deal.

 

Report

So what about those tax incentives?

Amazon is due to receive more than $1.7bn in incentives from New York, and
more than $500m from Virginia, benefits tied to Amazon's delivery of its
promises for jobs and investments.

 

Some of the funds will go to improve transport, parks and other
infrastructure in the neighbourhoods.

 

Still, New York State Senator Michael Gianaris said the decision to offer
tax incentives was a "a huge mistake", given the needs of the city's schools
and subway system.

 

"To take precious public resources and give it to a company that's probably
the last one on earth that needs it - Amazon - is a horrible decision and a
great statement of misplaced 

 

priorities," he told the BBC.

 

Amazon, which has already won millions in public subsidies, is known for
driving a hard bargain.

 

However, some of the other locations hoping for the nod had offered even
more than the two winners, thriving regions where many major US companies,
including Amazon, already have a 

 

presence.

 

Analysts said Amazon's selection shows that subsidies sweeten - but do not
necessarily drive - corporate decisions.

 

In this case, the ability to recruit highly educated workers seemed to be
the top concern, said Mark Muro, a senior fellow at the Brookings
Institution, a think tank in Washington.

 

The outcome "suggests that there were only two places they could go," he
told the BBC.

 

"It does remind that the subsidy game is often doomed, or often leads to
disappointment."

 

What does the decision say about the US economy?

 

Since the 1980s, tech companies have clustered in a handful of coastal
cities in the US, helping to fuel a growing economic gap between those areas
and the rest of the country.

 

Google, for example, is also planning a major expansion in New York.

 

San Francisco: Where a six-figure salary is 'low income'

The places America's rich and poor call home

While Amazon initially appeared to be casting its net wide, its final
selection will reinforce those trends, said Mr Muro.

 

Losers on the firm's 20-city short list included Newark in New Jersey,
Columbus in Ohio and Miami in Florida.

 

"It's in a way a missed opportunity for the nation to channel major new
investment into new places, especially ones in the heartland," he said.

 

"The digital economy for now at least is organised around superstars," Mr
Muro said. "This is about the big getting bigger, the strong getting
stronger, the rich getting richer."--BBC

 

 

 

 

Spotify launches streaming service in the Middle East

Music streaming powerhouse Spotify has launched its service across the
Middle East, hoping to tap into millions of digitally-connected consumers.

 

Rumours about the service's launch had been circulating for months.

 

Spotify will face stiff competition from rivals already in operation.

 

Executives from the company hope the service's launch could cut down on
music piracy in the Middle East, but would not comment on how many new users
they expect to enlist.

 

The service is already popular in the region with users who have accounts
connected to other countries where it is already available.

 

Abdallah Atlaee, 26, a project manager in the Abu Dhabi aviation industry
said: "I have already been using it for a long time with gift cards, so
finally now I will be able to renew without 

 

gift cards."

 

Listeners in the United Arab Emirates, Qatar, Morocco, Algeria, Egypt,
Tunisia, Lebanon, Jordan, Oman, Saudi Arabia, Bahrain, Kuwait and the
Palestine territories will now be able to 

 

subscribe to Spotify's free, as well as paid premium services. Spotify
became available in Israel in May.

 

"The Middle East represents what we believe is an untapped opportunity,"
Claudius Boller, managing director for Spotify in the Middle East and North
Africa, told the BBC.

 

"It's also the second youngest population in the world, and now with the
latest stats and figures that we have about the smartphone penetration -
internet penetration - we see that 

 

right now is the right time to launch Spotify and make it available in that
region."

 

While the launch means new customers in the Middle East, it could also mean
more negotiating power for the company around the world.

 

"From a business perspective it is important for Spotify to continue to grow
its subscriber base at a healthy clip as it obviously grows their revenue
and ultimate profits but also gives 

 

them scale and more leverage over the music royalty owners when they
renegotiate new deals," Jeff Wlodarczak, an analyst who covers the music
streaming company for Pivotal Research Group, told the BBC.

 

So why wasn't Spotify available in the region before?

In each region, Spotify has to secure the rights to stream music to
customers, as well as figure out how to monetise their business in new
markets - namely finding advertisers willing to 

 

pay to be on their platform.

 

"The gating factor in new markets (outside of China) tends to be the need to
secure the music licenses from music royalty players and the need for on the
ground advertising 

 

infrastructure for their free ad supported product," Mr Wlodarczak said.

 

Listeners in the region will have access to Spotify's complete library, just
as users in markets such as the UK and US have, Mr Boller said.

 

Additionally, the company will offer unique content for the Arab world, as
it has done in other regions around the world, Michael Krause, Managing
Director for Spotify in Europe, Middle and 

 

Africa, told the BBC in Dubai. That content will be made available to users
around the world.

 

The company will offer playlists currated for the Arab world, and listeners
globally.

 

"So they will be even more accessible, and more easily accessible to also
Arab diaspora or other customers who are interested in their music outside
of the region, and maybe the next 

 

Despacito or other global hit might come from the Arab region - which would
be quite exciting," Mr Krause said.

 

Is this the first music-streaming service to launch in the Middle East?

Hardly, in some ways it's late to the party.

 

Asked about this, Mr Boller said, that the company spends a lot of time
researching both the infrastructure, but also local customs and culture
ahead of any regional launch - allowing 

 

them to offer curated content for localised markets.

 

But, now that Spotify is launching across the Middle East, it will compete
directly with regional and international power players who already have a
foothold in the area.

 

Spotify's chief rival Apple Music already operates in the region and is
available to consumers in a number of countries across the region, according
to their website. But with its launch this 

 

week, it will gain a leg up on YouTube Music Premium, a younger music
streaming service that is not available in the Middle East.

 

Meanwhile, it will face competition from France-based Deezer, which launched
in the region in October. The service counts 14 million monthly active users
globally in more than 180 

 

countries.

 

Reuters reported in August that Deezer had signed an "exclusive, long-term
agreement" with Rotana Records - a major Arab record company.

 

Asked about whether this deal would make Spotify's existence in the Middle
East difficult, Mr Boller said: "We are trying to build out the catalogue.
Right now, to be honest, we don't think 

 

it's a negative [disadvantage] for us because use there are so many young,
fresh blood."

 

Additionally, local players, such as the Lebanon-based Anghami, which has
been operating in the region since 2012, could prove to be stiff
competition.

 

Asked if he would sign up for the service, Sameh Darwish, 24, an architect
from Damascus visiting Dubai, said, "I don't think so... I'm not even sure
what it is, but I have my own music 

 

apps that I'm used to."

 

Other potential customers were more excited.

 

"I think I'll use it. It will probably gain popularity too, but it has
competition," Youssef Rishmawy, 26, a doctor in the Sharja emirate of the
UAE, said. "Most people here use Anghami, which 

 

offers Arabic music too."

 

Is launching in the Middle East a game changer for Spotify?

"The Middle East has nearly 400 million inhabitants, unlimited music
streaming is an increasingly popular way of consuming music and I assume
there is likely a pretty healthy amount of 

 

demand for Spotify in that area of the world," said Mr Wlodarczak.

 

Mr Wlodarczak added: "While the Middle East is nice for Spotify the market
that will really move the needle for them is India."

 

So why then is the Middle East important?

The Middle East represents tremendous growth potential for technology
companies - especially those in the streaming content business.

 

According to a 2017 report from GSMA, a mobile operator industry trade
group, "smartphone adoption continues to rise in the region (just under half
of total connections were 

 

smartphones by mid-2017) and as more users come online, an increasing range
of mobile services are being consumed, including video, social media,
e-commerce and financial services."

 

The group predicts that connections of mobile broadband will increase from
50% to 69% between 2016 and 2020.

 

Those mobile broadband connections, mean new users that streamers like
Spotify can market to.

 

Will it be easy to get a foothold in the Middle East?

The region will present its challenges too - namely significant variation in
who is connected to the mobile internet.

 

As GSMA points out, some 90% of the population of countries like Bahrain,
Kuwait and the UAE are mobile subscribers - making those countries "among
the most penetrated mobile 

 

countries in the world". But poorer Arab states like Somalia, Comoros and
Djibouti have mobile subscription rates below one-third of the population.

 

To combat some of the technical challenges that the region presents, Spotify
is planning to stream it's content at a lower bitrate - allowing users on
slower networks to access their 

 

service.

 

What could it mean for music piracy?

Music and other entertainment piracy is rife across the Middle East.

 

Mr Krause, the Spotify executive, said he hoped that Spotify's free service
could cut down on illegal content sharing.

 

He pointed to Latin America, where he claimed Spotify helped cut down on
piracy and boosted the local music industry.--bbc

 

 

 

Oil price drops amid fears over demand

Oil prices have dropped to their lowest level in over eight months amid
fears about a slowdown in demand.

 

International benchmark Brent crude dropped almost 7% to $65.11 (£50.24) a
barrel, its lowest level since March.

 

US oil - known as West Texas Intermediate - fell over 7% to $55.69, its
lowest level since November last year and the twelfth day it has fallen.

 

The latest falls came after oil cartel Opec reduced its forecast for global
oil demand next year.

 

Opec now expects world demand to grow 1.29m barrels a day next year, about
70,000 barrels a day lower than last month's forecast.

 

Saudi Energy Minister Khalid al-Falih had already said on Monday that Opec
had agreed there was a need to cut oil production next year to prevent
oversupply.

 

Saudi Arabia is the largest member of the Opec cartel of Middle East and
African oil producers.

 

Oil price tumbles

 

Capital Economics said it was clear that "fears over excess supply in the
oil market are starting to build".

 

It said that it expected "subdued global economic growth" to drive demand
even lower than Opec was currently forecasting.

 

Brent Crude has now fallen over 25% since hitting a four-year high in early
October, while US oil has lost 28% since its October peak.

 

"It's like a run on the bank. It's getting to the point where it doesn't
seem to be about fundamentals anymore, but a total collapse in price," said
Phil Flynn, analyst at Price Futures Group.

 

The latest drop in price comes after US President Donald Trump tweeted on
Monday that he hoped there would be no oil output reductions, after Saudi
Arabia said on Sunday that Opec 

 

was considering cutting supply next year.--bbc

 

 

 

Japan GDP: Natural disasters hit economic growth

Japan's economy shrank in the third quarter as natural disasters hit
spending and disrupted exports.

 

The economy contracted by an annualised 1.2% between July and September,
preliminary figures showed.

 

A devastating earthquake and typhoon were among the disasters to hit Japan
this year, and prompted the bigger than expected contraction.

 

The slowdown also comes as the US and China fight a trade war which risks
hurting global trade and growth.

 

Economists polled by Reuters had forecast a 1% contraction for the three
months to September.

 

Exports fell 1.8% from the previous quarter, the fastest decline in more
than three years, Reuters said.

 

Japan was hit by several natural disasters over its summer, including one of
the country's worst flooding disasters in decades, an earthquake and a
deadly typhoon.

 

The disasters disrupted factories and hit domestic spending.

 

Rising trade tensions and protectionism could be a drag on future growth.

 

The US-China trade war could hit Japan particularly hard because of its
important role in the global supply chain.

 

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

A quick guide to the US-China trade war

Exports of car parts, electronics and industrial machinery are at risk of
disruption if the trade battle escalates.

 

"Trade war uncertainties have begun to increase, we see some slowdown in
Asia and that is gradually hitting Japan," Kohei Iwahara, economist at
Natixis Japan Securities, told AFP.--bbc

 

 

 

Italy budget: Rome rejects European Commission demands

The Italian government has defied the European Commission (EC) by sticking
to its big-spending budget plan.

 

Deputy Prime Minister Matteo Salvini said a deficit target of 2.4% and a
growth forecast of 1.5% were unchanged.

 

The EC - worried about the impact of high spending on already high levels of
Italy's debt - had told Rome to revise the budget or face possible fines.

 

It had set Tuesday as a deadline to Italy's governing populist parties to
respond to its objections.

 

The EC's warning to Italy, the eurozone's third-biggest economy, is an
unprecedented move with regard to an European Union member state.

 

What's behind Italy's economic turbulence?

Italy populists take power: What comes next?

Why does Italy want to spend more?

Mr Salvini, who leads the League party, was speaking after a cabinet meeting
on the highly controversial issue.

 

In a statement, he said the government would stick to the budget's main
parameters.

 

Meanwhile, Luigi Di Maio, the deputy PM from the Five Star Movement
coalition partner, said: "We have the conviction that this is the budget
needed for the country to get going again."

 

The government has vowed to "end poverty" with a minimum income for the
unemployed.

 

Other measures include tax cuts and scrapping extensions to the retirement
age - fulfilling several key campaign promises from the election in March.

 

A defiant Prime Minister Giuseppe Conte insisted earlier that the budget
deficit would go no higher than 2.4% of GDP in 2019, although the target is
three times than that of the previous 

 

government.

 

The government argues that servicing its debt of 131% of national output -
second only to bailed-out Greece - would hurt Italians, who have still not
recovered from the decade-old 

 

financial crisis.

 

Italy's economy is still smaller than it was in 2008. The governing
coalition argues an increase in spending would kick-start growth.

 

How bad is Italy's debt?

Italy's neutral Finance Minister Giovanni Tria and international observers
had hoped the country would keep its deficit under 2% of GDP - and perhaps
as low as 1.6%.

 

While 2.4% falls well short of the 3% deficit limit under eurozone rules,
Italy's debt level is alarming.

 

 

"For the first time the Commission is obliged to request a euro area country
to revise its draft budgetary plan but we see no alternative than to request
the Italian authorities to do so," 

 

the EC Vice-President for the euro, Valdis Dombrovskis, said last month.

 

He pointed out that Italian taxpayers were having to spend as much servicing
the national debt as on education.

 

"Breaking rules can appear tempting at the first look - it can provide the
illusion of breaking free," he said.

 

"It is tempting to try and cure debt with more debt. At some point, the debt
weighs too heavy... you end up having no freedom at all," Mr Dombrovskis
said.--bbc

 

 

Flipkart boss resigns after misconduct investigation

Binny Bansal, chief executive of India's biggest online retailer, Flipkart,
has resigned following an investigation into his conduct.

 

Flipkart and its owner, Walmart, launched the investigation after a
complaint of "serious personal misconduct" was made against Mr Bansal.

 

The inquiry did not find evidence to back up the allegation, but did "reveal
other lapses in judgement".

 

Walmart paid $16bn (£12.3bn) earlier this year to take control of Flipkart.

 

The companies did not give any further details about the allegation against
Mr Bansal.

 

However, in a combined statement, they said he had shown "a lack of
transparency" in his response to the situation.

 

In an email to staff, seen by the BBC Mr Bansal said: "The allegations left
me stunned and I strongly deny them.

 

"These have been challenging times for my family and me. I am concerned that
this may become a distraction for the company and the team. In light of
these circumstances, I feel it is 

 

best to step away as chairman and group CEO."

 

Mr Bansal co-founded Flipkart in 2007 with Sachin Bansal who, despite
sharing the same surname, is not related.

 

The firm, which sells everything from books to clothing and food, is now one
of the biggest online retail players in India.

 

This year, Walmart announced it would take a majority stake in the company,
drawn by India's fast-growing e-commerce market, which is expected to grow
from its current size of $35 

 

billion to $100 billion by 2022.

 

Goodbye to a backroom master mind

Analysis by Sameer Hashmi

 

Sachin Bansal and Binny Bansal are the poster boys of India's start-up
dream.

 

In a country dominated by traditional family businesses, they started
Flipkart in a two-room apartment, building it into India's first
billion-dollar online retail company.

 

This year, the firm also became the country's most valuable start-up after
Walmart acquired a controlling stake in Flipkart for $16bn.

 

For years, Binny Bansal - who previously worked at Amazon - was always the
backroom mastermind, running operations while Sachin served as its
designated leader.

 

But after becoming the chief executive of the company, Binny transformed
from a "quiet" co-founder to the company's main face.

 

His resignation will be a blow for Walmart, which is locked in an intense
battle with rival Amazon to garner more market share in India's highly
competitive consumer market.

 

Sachin Bansal left the company shortly after the deal with Walmart.

 

The companies said that Binny Bansal had been considering leaving as well:
"Binny has been contemplating a transition for some time and we have been
working together on a succession 

 

plan, which has now been accelerated."

 

Walmart has praised Flipkart's leadership, saying it believed local
expertise would give it a competitive edge.

 

The firm's statement said it remained "committed to investing for the long
term and are supportive of the leadership team's desire to evolve into a
publicly traded company in the future."

 

Kalyan Krishnamurthy, who now leads the firm's central e-commerce unit, will
take over as chief executive.-bbc

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 


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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
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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
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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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