Major International Business Headlines Brief::: 12 October 2018

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Major International Business Headlines Brief::: 12 October 2018

 


 

 


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

 


 

 


 

 

*  South African insurer Sanlam seals $1 billion deal for Morocco's SAHAM

*  Steinhoff's shares plunge after global rout, report on retailer's ex-CEO

*  Ivory Coast inflation slows to 0.5 pct year-on-year in September

*  South Africa gets $35 bln in investment pledges towards $100 bln goal

*  Sudan's annual inflation climbs to 68.64 pct in Sept. - statistics agency

*  World Bank criticises Kenya's approach to cutting fiscal deficit

*  Uganda's SafeBoda ride-hailing service hopes to expand across Africa

*  Foreign holdings of Egyptian treasuries stood at $14 bln at end-Sept - news website

*  Acacia Mining says employee in Tanzania charged with corruption

*  US share markets sink as sell-off continues

*  Trump says Fed is 'out of control'

*  Estée Lauder seeks to oust skincare brand Deciem's founder

*  Brexit: No deal brings risk of stockpiling says watchdog

*  Apple hires engineers from UK company Dialog

*  eBay tax bill rises after HMRC review

*  Why you have (probably) already bought your last car

 

 


 <mailto:info at bulls.co.zw> 

 


 

                                      

South African insurer Sanlam seals $1 billion deal for Morocco's SAHAM

JOHANNESBURG (Reuters) - South Africa’s biggest insurer Sanlam has sealed a $1.1 billion deal to acquire the remaining 53.37 percent stake in Moroccan insurance firm SAHAM Finances after receiving regulatory approvals, it said on Thursday.

 

SAHAM Finances is Sanlam’s biggest acquisition yet, and expands its presence to 33 countries across Africa. The conclusion of the deal cements its presence in north Africa.

 

Sanlam Emerging Markets Ireland Ltd (SEMIL), a unit of Sanlam in a joint-venture with South African insurer Santam Ltd, had acquired a 30 percent stake in SAHAM Finances in 2016. The joint-venture unit increased its stake to 46.6 percent the following year.

 

Since its establishment in Morocco in 1995 as a subsidiary of SAHAM Group, which also owns health, food and distribution interests, SAHAM Finances has expanded rapidly.

 

It had consolidated net assets worth $850 million and earnings of $77.4 million for the year by the end of last year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Steinhoff's shares plunge after global rout, report on retailer's ex-CEO

JOHANNESBURG (Reuters) - Steinhoff’s shares fell more than 9 percent on Thursday to a near two-month low after a global market rout and a report by Bloomberg saying the retailer’s former CEO advised friends to sell the firm’s stock days before the shares collapsed.

 

Traders said the retailer’s losses were exacerbated by a Wall Street rout that sparked a global sell-off. [GLOB/MKTS]

 

Steinhoff’s shares fell as much as 9.9 percent in early trade and later traded 5.38 percent lower at 2.11 rand, their lowest since August 20.

 

Citing a mobile phone text message, Bloomberg said the message sent around Nov. 30 to at least two people, told recipients there was impending, unspecified bad news coming.

 

Steinhoff former chief executive Markus Jooste could not be reached on Thursday.

 

Jooste told a South African parliamentary inquiry in September that he never lied about activities of the company and neither sold his shares in Steinhoff nor held a short position on its stock.

 

Steinhoff has been working on a deal to restructure the debt of some subsidiaries with its creditors after revealing multi-billion euro holes in its balance sheet in December that wiped more than 90 percent off its market value and forced it to sell assets to fund working capital.

 

“Those revelations shouldn’t affect the current price of Steinhoff but would probably just add, if true, to Mr Jooste’s legal woes to come because insider trading is illegal,” said Sanlam Private Wealth Director Greg Katzenellenbogen.

 

Katzenellenbogen added that the retailer’s share price was following global stocks lower after Wall Street’s worst losses in eight months led to broader risk aversion.

 

 

Ivory Coast inflation slows to 0.5 pct year-on-year in September

ABIDJAN (Reuters) - Consumer price inflation in Ivory Coast slowed to 0.5 percent year-on-year in September, down from 0.9 percent in August, data from the National Statistics Institute showed on Thursday.

 

Food and soft drink prices in the world’s top cocoa producer slowed 0.6 percent year-on-year, while housing and utilities prices rose 2.2 percent. Transport costs gained 1.1 percent.

 

Ivory Coast’s economy accounts for around 40 percent of the eight-nation West African CFA franc currency zone.

 

 

 

South Africa gets $35 bln in investment pledges towards $100 bln goal

PRETORIA (Reuters) - South Africa has investment commitments of $35 billion as part of plans by President Cyril Ramaphosa to attract $100 billion over the next five years to revive the country’s flagging economy, his economic adviser told Reuters on Wednesday.

 

Ramaphosa has appointed a team of investment envoys - bankers, former ministers, business people as well as economist Trudi Makhaya, his economic adviser - to scour the world’s financial capitals for new investors.

 

“There is about $35 billion that has been pledged,” Makhaya said. “We’ve had $10 billion committed from Saudi Arabia. About $10 billion from the UAE, and around $15 billion committed from China when you’re looking at government to government deals.”

 

The South African government hopes to raise more money from companies and governments at an investment summit in Johannesburg on October 26, part of efforts to fulfil Ramaphosa’s promise to create jobs.

 

“You’re also going to have a stream of announcements at the investment conference,” Makhaya said.

 

She said the summit would connect investors with projects, and also be an opportunity to convince investors the country was on a stable policy path.

 

“We need to keep doing the work of raising investments leading up to next year’s election to show investors policy isn’t going to change (even if the ruling ANC party lost the vote),” she told Reuters in an interview.

 

The polls are due to be held in the middle of the next year and the African National Congress is battling to increase its majority. Ramaphosa faces an uphill battle to secure public and investor support after a decade of scandals under Jacob Zuma.

 

Makhaya said over the past decade, the government had borrowed heavily to fund spending on poorly executed infrastructure projects and pay public sector wages, but tighter controls were needed to ensure returns on investments.

 

“Significant fiscal spending in the last ten years did keep us away from the brink, but it didn’t alter the economy fundamentally,” she said, adding that spending to try and boost the economy would not work in the long run.

 

“We’ve seen that it doesn’t work,” Makhaya said.

 

Pretoria’s debt burden has doubled to nearly 60 percent of gross domestic product in the past decade, while growth in the same period averaged around 2 percent, well short of government’s target of 5 percent annual expansion.

 

“The president has articulated his economic vision very clearly. It’s investments, job creation and fixing up governance,” Makhaya said from a meeting room, near Ramaphosa’s office in Pretoria.

 

(1 South African rand = $0.0685)

 

 

 

Sudan's annual inflation climbs to 68.64 pct in Sept. - statistics agency

KHARTOUM (Reuters) - Sudan’s inflation edged up to 68.64 percent in September year-on-year, from 66.82 percent in August, the state statistics agency said on Thursday.

 

Inflation jumped to more than 50 percent in January, when subsidy cuts triggered food price increases that kindled unrest. Since then inflation has continued to accelerates steadily despite attempts to slow price rises with strict limits on cash withdrawals.

 

 

World Bank criticises Kenya's approach to cutting fiscal deficit

NAIROBI (Reuters) - The World Bank urged Kenya to cut spending on public sector wages and other recurring items to reduce its debt load, instead of slashing development spending as that is restraining economic

 

In a bi-annual economic update on the country, released on Thursday, the bank raised its estimate for Kenya’s 2018 economic growth to 5.7 percent, from a previous forecast of 5.5 percent.

 

While that would be faster than a 4.9 percent expansion in 2017, the Washington-based lender said Kenya was growing below its potential, likening it to a car driving at only 60 kilometres (37 miles) an hour.

 

“Kenya can be a Ferrari doing 150 kilometres per hour but it has to do certain things,” said Allen Dennis, the World Bank’s senior economist for Kenya.

 

Kenya’s total debt stands at 57 percent of GDP, the bank said, barely down from 57.5 percent a year ago.

 

Under pressure from the International Monetary Fund, the Kenyan government reduced its fiscal deficit by two percentage points in the financial year that ended in June, to 7 percent of gross domestic product, and has set a target of 5.8 percent of GDP this fiscal year.

 

But the World Bank said the spending cuts approved for the period to June this year were heavily skewed towards the development budget, which was slashed by a quarter, at the expense of boosting growth.

 

“There is a need to recalibrate the balance between development and recurrent expenditures, with the latter bearing a higher share of the expenditure containment,” the report said.

 

The Kenyan government could cut recurrent spending by reducing state-owned firms’ budgets and by regularly auditing the government’s payroll, the bank said.

 

It attributed the upgrade to its 2018 economic growth forecast to an improved performance by the farming sector, a steady recovery in manufacturing and resilience in tourism after last year’s long election campaign had raised political risk.

 

A narrowing current account deficit and a stable exchange rate could also boost growth, the bank said.

 

Growth would had been faster if the government had removed a cap on commercial lending rates, the bank said, citing the cap’s constraining impact on monetary policy.

 

The cap has also made commercial banks shy away from lending to higher-risk customers, analysts say.

 

In June, Finance Minister Henry Rotich sought to repeal the cap, at four percentage points above the central bank rate, but lawmakers blocked that attempt in August.

 

Private sector credit is growing by just over 4 percent, down from nearly 18 percent in 2015, the year before the cap was introduced, according to central bank data.

 

 

 

Uganda's SafeBoda ride-hailing service hopes to expand across Africa

KAMPALA (Reuters) - A ride-hailing app for motorcycle taxis that is transforming public transport in Uganda aims to expand to at least 20 other African cities, its co-founder says.

 

SafeBoda, founded in 2015 by a former motorcycle taxi-driver from Uganda and two European economists, counts 6,000 riders in its network in the capital Kampala and is backed by social enterprise investors, including British-based Global Innovation Fund.

 

“We plan to grow and cover at least 20 African cities and be able to make sure that people can commute safely,” co-founder Ricky Thompson Rapa told Reuters in an interview.

 

Most capitals across the continent are growing rapidly and have huge youth populations, but are plagued by poor road infrastructure. Most lack modern urban mass transportation systems like subways and organised bus services.

 

SafeBoda launched in the Kenyan capital Nairobi in June and drivers in bright orange vests with the company logo now buzz about the city of more than four million people.

 

In Uganda’s capital, “boda bodas” — the term in East Africa for motorcycle taxis — are the main form of public transport. Clusters of them are found at intersections all around the traffic-clogged city.

 

But passnegers must weigh the speedy way of dodging gridlock against safety concerns. Hospitals frequently treat patients injured in accidents involving the motorcycles.

 

Safeboda has drawn competition — three other ride-hailing apps for motorcycle taxis launched this year. Rapa says the concept of well-trained drivers, equipped with helmets for themselves and their passengers, has gained traction.

 

SafeBoda has helped standardise fares for trips, cut charges, and brought improved safety and security for passengers in what has long been an informal, lightly regulated industry, he said.

 

The biggest challenge is that drivers are inexperienced users of smartphones, so the firm has trained them to be better able to receive and respond to passenger requests.

 

Drivers pay about $120 to sign up on the service. The company takes 15 percent of revenues from each ride. Rapa said their research shows their drivers are making 30 percent more than their colleagues who are not on the app.

 

 

 

Foreign holdings of Egyptian treasuries stood at $14 bln at end-Sept - news website

CAIRO (Reuters) - Foreign holdings of Egyptian treasuries stood at $14 billion at the end of September, Deputy Finance Minister Ahmed Kouchouk was cited as saying on Thursday, a decline of nearly 20 percent from the end of June, according to Reuters calculations.

 

Holdings stood at $17.5 billion at the end of June. Appetite for emerging market debt had already weakened when it declined further following currency crises in Turkey and Argentina in August. These triggered an exodus of foreign investors from Egypt who must also be repaid.

 

Kouchouk’s remarks were published in the online newsletter Enterprise.

 

The government cancelled four consecutive local currency T-bond auctions last month after bankers and investors demanded high yields on the debt.

 

Egypt on Sunday launched a pan-Asian roadshow to promote its international bonds in South Korea, part of a bid to bring down rising yields on its debt.

 

 

 

Acacia Mining says employee in Tanzania charged with corruption

LONDON (Reuters) - London-listed Acacia Mining said on Thursday an employee at its North Mara mine in Tanzania was charged with corruption but plead not guilty and has been granted bail.

 

The employee was “responsible for signing cheques for approved payments made by NMGML at the time, including a cheque regarding the agreed LTF process,” the miner said, referring to Land Task Force (LTF) set up by the government and North Mara Gold Mine Limited (NMGML).

 

 

US share markets sink as sell-off continues

A sell-off in US stock markets has continued with a second day of steep declines.

 

Despite early gains, losses on the indexes accelerated later in the day, extending earlier drops in Europe and Asia.

 

The Dow Jones and S&P 500 both closed down more than 2%, while the Nasdaq slid about 1.25%

 

The falls came amid concerns about rising interest rates and slowing global growth.

 

The White House dismissed the falls as a much-needed correction, but then US President Donald Trump stoked fears about the impact of recent interest rate rises with an attack on the Federal Reserve.

 

He called the Fed "out of control", adding that he was "disappointed" by its policies.

 

Energy firms led the slump, as oil prices posted steep declines.

 

Companies in the financial and property sectors - industries sensitive to higher rates and exposed to risk from Hurricane Michael - also took a beating.

 

Trump says Fed is 'out of control'

Earlier in London, the FTSE 100 share index tumbled 1.9% to close at 7,006 points.

 

France's CAC 40 slid 1.9% to 5,106 points, while Germany's DAX fell 1.5% to 11,539 points.

 

 

In Asian trading, the Hang Seng index in Hong Kong had plunged to a 19-month low, following Wednesday's declines in the US.

 

Japan's Nikkei 225 dropped 3.9% - its steepest daily drop since March. In China, the Shanghai Composite collapsed 5.2% to its lowest level since 2014.

 

What's driving the fall?

 

The declines this week follow months of better-than-expected performance in US markets, which bounced back after turmoil earlier in the year to set new records over the summer.

 

But the Federal Reserve is raising interest rates, with the latest hike coming last month, and more increases likely to come.

 

The concerns about higher rates have been compounded by a trade war between China and the US - which the IMF has warned could harm growth.

 

With hundreds of companies due to report earnings forecasts in coming weeks, analysts attributed the sell-off in part to investors worried that those two factors will increase business costs and hurt corporate profits.

 

For traders who had got used to the seemingly inevitable march of US stock markets ever higher, Wednesday was a bit of a shock.

 

Here's just one reason why: the S&P 500 didn't record a single move up or down of more than 1% during the third quarter of 2018. That hasn't happened since 1963, according to LPL Financial.

 

So what led investors to head for the exit?

 

As ever, it's almost impossible to pinpoint one reason for the sell-off.

 

The consensus seems to be a combination of rising interest rates, tariffs and inflation led investors to worry that fourth-quarter earnings season, which begins on Friday, won't be as record-breaking as prior quarters.

 

But when it comes to one of those concerns - inflation - investors got to breathe a sigh of relief on Thursday.

 

Just before US markets opened, the September reading of the consumer price index showed that prices rose by just 0.1% during the month, below expectations.

 

After the release, the mood on the floor of the New York Stock Exchange almost instantly lightened, as the lower-than-expected reading tempered concerns that the US Federal Reserve will be forced to increase interest rates at a faster pace than expected.

 

The question is if calm will once more prevail on Wall Street - or if Wednesday's dip was a harbinger of a turbulent earnings season to come.

 

The Dow and S&P 500 have now fallen more than 5% below earlier peaks, while the Nasdaq is off about 10%.

 

The White House brushed off the declines, arguing that the steep rise in the markets earlier this summer made it ripe for correction.

 

But US President Donald Trump - who often boasts about US stock market performance-also renewed his attacks on the Federal Reserve for its decision to raise interest rates.

 

He said higher rates - which make borrowing more expensive - were "far too stringent", adding: "I think what the Fed is doing is wrong."

 

 

Interest rates in the US remain relatively low by historic standards.

 

Michael Hewson of CMC Markets said it was "too simplistic to blame the Federal Reserve" for market turmoil.

 

"There are a number of factors," he told the BBC. "Obviously, concerns about slowing growth - the IMF downgraded its global growth forecast for the global economy, citing emerging market concerns."--BBC

 

 

 

Trump says Fed is 'out of control'

US President Donald Trump has renewed his attacks on the central bank, the Federal Reserve, calling it "out of control" and "far too stringent".

 

Mr Trump said he was not going to fire Fed chairman Jay Powell, but was just "disappointed" in the bank's policies.

 

His criticisms came during remarks at the White House. Earlier, he told Fox News the Fed was being "too aggressive" by raising interest rates this year and getting "a little bit too cute".

 

He said it was "making a big mistake".

 

"I'm paying interest at a high rate because of our Fed," he added, referring to the cost of servicing the US deficit.

 

Mr Trump's comments follow several days of declines in US stock markets.

 

On Thursday, the Dow and S&P 500 share indexes closed more than 2% lower, while the Nasdaq slipped 1.25%.

 

White House officials, including Mr Trump, have dismissed the declines as standard corrections after a long run of rising share prices.

 

But a fall would be a concern to the president, who frequently cites stock market performance as a sign of his administration's success.

 

Though interest rates remain low by historic standards, higher rates make borrowing more expensive.

 

Some analysts attribute the recent market declines to investors worried those costs will hurt company profits.

 

Trade tensions have also raised concerns after the US and China slapped tit-for-tat tariffs on hundreds of billions of dollars of each other's goods over the past few months.

 

Economists say the moves will also raise costs and hurt growth.

 

On Thursday, US media reported that Mr Trump and Chinese President Xi Jinping were planning to meet next month.

 

But in a morning telephone interview with the Fox & Friends programme, Mr Trump took a hard line.

 

"They want to negotiate, they want to negotiate badly, but I told them, 'You're not ready yet. You're not ready yet.'"

 

He also said his trade policies had hurt China's economy.

 

"Their economy has gone down very substantially. And I have a lot more to do if I want to do it and I don't want to do, but they have to come to the table. ...

 

"They lived too well for too long and frankly I guess they think that the Americans are stupid people. Americans are not stupid people."--BBC

 

 

 

 

Estée Lauder seeks to oust skincare brand Deciem's founder

After months of erratic online behaviour and messy firings, the founder of skincare brand Deciem could be ousted from his role at the company.

 

Beauty giant Estée Lauder, a minority investor in the Toronto-based company, is seeking to have Brandon Truaxe removed as co-chief executive.

 

The legal manoeuvre comes after Mr Truaxe's shock announcement that Deciem stores would be temporarily shut.

 

The company is best known for its cult skincare line The Ordinary.

 

Estée Lauder is seeking to have Mr Truaxe replaced by Nicola Kilner, Deciem's co-CEO, on an interim basis.

 

It is also requesting Mr Truaxe's dismissal from Deciem's board of directors, barring him from hiring or firing employees and issuing statements on the company's social media accounts.

 

What is Deciem?

 

Deciem is a beauty and skincare company founded in Toronto in 2013.

 

The company, whose tagline is "the abnormal beauty company", owns multiple brands focused mainly on skin and hair care.

 

The most popular and well-known is The Ordinary, a skincare line which offers products most often associated with expensive creams and serums.

 

Most products by The Ordinary, for instance, cost only a few dollars and there are legions of fans happy with Deciem's offer.

 

It was considered one of the breakout skincare brands of the last couple of years.

 

It garnered a cult following, numerous beauty awards, and the attention of major companies in the industry like Estée Lauder, which bought a stake in 2017.

 

What's wrong with doing make-up on a train?

'This is what plus-sized women have needed'

Deciem storefronts have cropped up in Canada, the US, the UK, Australia, and South Korea. It is reported to have a projected $300m (£228m) in sales this year.

 

Kim Kardashian West proclaimed to be a fan of the one of The Ordinary retinoid serums.

 

What is happening at Deciem?

 

Deciem's expansion was driven in part by social media buzz around its enormously popular The Ordinary line.

 

But trouble began when Mr Truaxe decided to take over the company's social media accounts in January. He began posting personal and sometimes concerning and bizarre messages, often accompanied by rambling captions, confusing fans of the brand.

 

How a reality TV teen became a beauty giant

Skincare brand Deciem closes stores

He also used the social platform to publicly sever ties with collaborators and lash out at online commentators.

 

Then came the firing of Ms Kilner - whom he re-hired in July - and the resignation of the company's chief financial officer.

 

After months of public chaos, the situation came to a head on Monday.

 

Mr Truaxe posted a rambling Instagram video saying the stores would shut for the foreseeable future, claiming "almost everyone at Deciem has been involved in major criminal activity, which includes financial crimes".

 

He did not elaborate.

 

Many storefronts have been closed since and the Deciem website was also shut down.

 

What has been the reaction?

 

Mr Truaxe's behaviour has prompted concerns among fans about his mental health, speculation about whether his behaviour is in fact a publicity stunt, and worry about the future of the company.

 

Some clients chose to abandon the brand, though Deciem continued to prove more popular, opening new stores and expanding its product lines.

 

And after stores closed, some scrambled to stock up on products online or try to find so-called "dupes" of their favourite The Ordinary serums.

 

Estée Lauder had until recently refused to comment on any of the controversies, even when Mr Truaxe published emails to and from some of the conglomerate's executives on social media.

 

But earlier this week, it said in a statement it was "deeply concerned" about the material posted online and would defend its rights as a minority investor.

 

On Thursday, the beauty conglomerate confirmed it had taken legal action but said it would not comment further on any pending litigation "at this time".

 

The case is expected to be heard in an Ontario court on Friday.--BBC

 

 

Brexit: No deal brings risk of stockpiling says watchdog

An "abrupt and disorderly" Brexit could have a severe short-term impact on the UK economy and public finances, the country's fiscal watchdog has warned.

 

If the UK leaves the EU without a deal, it could lead to shortages and hoarding of some imported products, said the Office for Budget Responsibility.

 

The OBR said the lack of precedents for Brexit made the effect hard to predict.

 

But it noted that 1974's Three-Day Week prompted by miners' industrial action caused a 3% fall in quarterly output.

 

The OBR said weaker economic activity and higher prices could result from a no-deal Brexit.

 

Theresa May to brief ministers amid Brexit tensions

Brexit recession warning from RBS boss

The OBR said if there was no agreement on standards everything would have to be resubmitted for approval: "In a scenario where the UK and EU are unable to agree to the continued mutual recognition ('grandfathering') of existing product standards and professional qualifications, all existing goods may need to be re-approved before sale and services trade would be severely restricted by the loss of market access."

 

It said this would lead to bottlenecks of goods while they wait for new approvals. It also warned about the risk of grounding of British aircraft not being able to fly, should no agreement be made.

 

'Three-day week'

It said any stockpiling this prompted would only worsen the situation: "Should these bottlenecks turn out to be significant, it might prompt households and businesses to attempt to stockpile goods in advance, further aggravating the shortages."

 

The OBR said it was "next to impossible to calibrate with any confidence the potential impact of this sort of scenario in advance.

 

"However, while not a direct parallel, it is worth noting that the 'Three-Day Week', introduced in early 1974 in response to energy shortages and increased militancy on the part of the miners, was associated with a fall in output of a little under 3% that quarter."--BBC

 

 

 

Apple hires engineers from UK company Dialog

Apple is adding 300 computer chip engineers to its team after striking a deal to hire them from one of its British suppliers.

 

It is paying Dialog Semiconductor $300m (£227m) for the acquisition, which also includes some of the Reading-based company's patents and facilities.

 

Apple has long used Dialog's products to monitor and control power consumption in its iPhones and iPads.

 

The deal represents one of Apple's biggest takeovers in headcount terms.

 

"Dialog has deep expertise in chip development and we are thrilled to have this talented group of engineers who have long supported our products now working directly for Apple," said the handset-maker's hardware technologies chief Johny Srouji.

 

Staff involved are based in:

 

Swindon

Livorno, Italy

Nabern, Germany

Neuaubing, Germany

The Californian company already designs its own computer processing units (CPUs) and last year announced it was ending a partnership with another UK company, Imagination Technologies, to create its own in-house graphics processing units (GPUs) too.

 

Last November, rumours emerged that Apple also planned to phase out use of Dialog's components, causing the supplier's shares to tumble 20%.

 

However, those fears appear to have been overstated since Apple has also announced it has pre-paid Dialog a further $300m to secure products from it over the next three years.

 

One expert noted that Apple had a reputation for liking to be in control.

 

"In the industry this kind of move is known as being more vertically integrated," said Ian Cutress, senior editor at the engineering-focused news site AnandTech.

 

"It's something that's already true of Samsung and its smartphones - for example it also makes its own displays.

 

"The benefits for Apple having full control at the component level should be lower overheads and therefore reduced costs.

 

"But a downside could be there's less fallback if something goes wrong."

 

Dialog said it expected the deal would be completed within the first six months of 2019.

 

The firm's chief executive told the BBC that he hoped his company's relationship with Apple would continue beyond 2021, but that the arrangement gave Dialog time to become less dependant on the US tech giant.

 

"For us to change in any other way would be more painful," said Dr Jalal Bagherli.

 

"They wanted to create their own solutions in-house. And we could accelerate that, but in the process monetise some of our intellectual property assets and also find a home for many of our employees in a good company - I think it's a win-win situation."

 

Over recent years, the UK's best known computer chip designer ARM was sold to Japan's Softbank fund, and Imagination Technologies was purchased by the China-backed investment firm Canyon Bridge.

 

Despite all this, Dr Bagherli said the industry was still "very healthy".

 

"The level of education and expertise in silicon and semiconductor design is high," he explained.

 

"This is why you have a high demand from overseas for this talent.

 

"I think it's something we can invest in more in this country because there's clearly demand from abroad to access this.

 

"For every purchase, that money can be released back into the economy to invest more in the sector."

 

Dialog's shares were trading about 24% above their opening price by mid-afternoon.--BBC

 

 

 

eBay tax bill rises after HMRC review

Auction site eBay's UK subsidiary has agreed to pay an extra £7m in tax following a review by HMRC.

 

According to the latest accounts from the firm, its sales in 2017 rose to more than £500m, but its profits were still relatively small at £20m.

 

The £7m payment covers tax liabilities for previous financial years. Its tax bill for 2017 came to another £6m.

 

In 2016, eBay paid only £1.6m in corporation tax on declared profits of £7.7m.

 

An eBay spokesperson said it complied with all the relevant laws and rules of every country it worked in, including the UK.

 

A spokesperson for HMRC said it did not comment on identifiable taxpayers, but added: "HMRC has a very strong track record on challenging contrived tax arrangements. We make sure that large businesses, just like everyone else, pay all the taxes due under UK law and we don't settle for less."

 

eBay accuses Amazon of in merchant poaching row

Could Amazon wage move mean higher UK tax bill?

Facebook's UK tax bill jumps as profits rise

EU pushes for new tax on tech giants soon

The settlement makes eBay the latest online giant to pay more tax in the UK after public concern that such companies have not been paying their fair share.

 

Big technology companies have frequently been criticised for booking profits in other countries and paying modest amounts of tax in the UK.

 

Earlier this week, it emerged that Facebook's UK tax bill tripled to £15.8m in 2017. However, the final amount was cut to £7.4m after the social media firm received tax relief for awarding shares to employees.

 

Meanwhile, PayPal's UK subsidiary saw its tax payments rise from €181,000 in 2016 to €4.7m in 2017 after another HMRC review.

 

However, retailer Amazon's UK tax bill for 2017 fell to £4.6m, down from £7.4m the previous year, in part because of a rise in share-based payments for staff.--BBC

 

 

 

Why you have (probably) already bought your last car

I'm guessing you are scoffing in disbelief at the very suggestion of this article, but bear with me.

 

A growing number of tech analysts are predicting that in less than 20 years we'll all have stopped owning cars, and, what's more, the internal combustion engine will have been consigned to the dustbin of history.

 

Yes, it's a big claim and you are right to be sceptical, but the argument that a unique convergence of new technology is poised to revolutionise personal transportation is more persuasive than you might think.

 

The central idea is pretty simple: Self-driving electric vehicles organised into an Uber-style network will be able to offer such cheap transport that you'll very quickly - we're talking perhaps a decade - decide you don't need a car any more.

 

And if you're thinking this timescale is wildly optimistic, just recall how rapidly cars replaced horses.

 

Take a look at this picture of 5th Avenue in New York in 1900. Can you spot the car?

 

In 1908 the first Model T Ford rolled off the production line; by 1930 the equestrian age was, to all intents and purposes, over - and all thanks to the disruptive power of an earlier tech innovation - the internal combustion engine.

 

So how will this latest transportation revolution unfold?

 

The driverless Uber model

First off, consider how Uber and other networked taxi companies have already changed the way we move around. In most major cities an Uber driver - or one of its rivals - is usually just a couple of minutes away, and charges less than established taxis, let's say £10.

 

The company's exponential growth is evidence of how powerful the Uber business model is.

 

Now take out the driver. You've probably cut costs by at least 50%.

 

So if we're trying to work out when this revolution will begin in earnest the key date will be when self-driving vehicle technology is available and - crucially - has regulatory backing.

 

That could well be sooner than you think. The UK has said it hopes to authorise the first fully autonomous cars as early as 2021.

 

And, say enthusiasts for autonomy, it will only take one city to prove the technology is safe and useful and the rest of the world will very quickly rush to catch up.

 

So self-driving cars have cut our £10 journey to £5.

 

The switch to electric

Now imagine the current mostly fossil fuel-powered taxi fleet is replaced with electric cars.

 

At the moment electric vehicles are more expensive than similar models with internal combustion engines, but offer significantly lower lifetime costs.

 

Electric vehicle sales surge in UK

The UK firm hoping to take on Google’s driverless cars

Driverless cars on UK roads by 2021 - really?

They are more reliable, for a start. The typical electric car has around 20 moving parts compared to the 2,000 or so in an internal combustion engine.

 

As a result electric vehicles also tend to last much longer. Most electric car manufacturers expect their vehicles to keep on going for at least 500,000 miles.

 

These factors aren't that important for most consumers - after all, the average driver in England does less than 10,000 miles a year and our cars are parked 95% of the time. However, they are huge issues if you're using a vehicle pretty much continuously, as would be the case with a self-driving taxi.

 

Add in the low cost of recharging batteries compared to refuelling and you've got another dramatic reduction in costs.

 

And it's worth noting that the cost of electric vehicles is likely to continue to fall, and rapidly. As they become mainstream, returns to scale will drive down costs. That's the logic behind Tesla's $5bn (£3.8bn) battery plant, the so-called "Gigafactory".

 

How does this affect our £10 journey?

 

It brings another dramatic reduction. Fully autonomous electric taxi networks could offer rides at as little as 10% of current rates.

 

At least that's what tech prophet Tony Seba reckons. He and his team at the think-tank RethinkX have done more than anyone else to think through how this revolution might rip through the personal transportation market.

 

'Transport as a service'

We've now cut our £10 fare to just £1.

 

Mr Seba calls the idea of a robo-taxi network "transport as a service", and estimates it could save the average American as much as $6,000 (£4,560) a year. That's the equivalent of a 10% pay rise.

 

And don't forget, when the revolution comes you won't be behind the wheel so now you'll be working or relaxing as you travel - another big benefit.

 

You still think that car parked outside your flat is worth having?

 

What's more, once this new model of getting around takes hold the benefits are likely to be reinforcing. The more vehicles in the network, the better the service offered to consumers; the more miles self-driving cars do, the more efficient and safer they'll get; the more electric vehicles manufactured, the cheaper each one will be.

 

Don't worry that rural areas will be left out. A vehicle could be parked in every village waiting for your order to come.

 

And range anxiety - the fear that you might run out of electricity - won't be a problem either. Should the battery run low the network will send a fully charged car to meet you so you can continue your journey.

 

You've probably seen headlines about accidents involving self-driving cars but the truth is they will be far safer than ones driven by you and me - they won't get regulatory approval if they are not. That means tens of thousands of lives - perhaps hundreds of thousands - will be saved as accident rates plummet.

 

That will generate yet another cost saving for our fleets of robo-taxis. The price of insurance will tumble, while at the same time those of us who insist on continuing to drive our own vehicles will face higher charges.

 

Human drivers banned

According to the tech visionaries it won't be long before the whole market tilts irreversibly away from car ownership and the trusty old internal combustion engine.

 

RethinkX, for example, reckons that within 10 years of self-driving cars getting regulatory approval 95% of passenger miles will be in these electric robo-taxis.

 

The logical next step will be for human beings to be banned from driving cars at all because they pose such a risk to other road users.

 

Take a moment to think about the wide-reaching effects this revolution will have, aside from just changing how we get around. There will be downsides: millions of car industry workers and taxi drivers will be looking for new jobs, for a start.

 

But think of the hundreds of billions of dollars consumers will save, and which can now be spent elsewhere in the economy.

 

Meanwhile, the numbers of cars will plummet. RethinkX estimates that the number of vehicles on US roads will fall from nearly 250 million to just 45 million over a 10-year period. That will free up huge amounts of space in our towns and cities.

 

And, please take note: I haven't mentioned the enormous environmental benefits of converting the world's cars to electricity.

 

That's because the logic of this upheaval isn't driven by new rules on pollution or worries about global warming but by the most powerful incentive in any economy - cold hard cash.

 

That said, there's no question that a wholesale switch away from fossil fuels will slow climate change and massively reduce air pollution.

 

In short, let the revolution begin!

 

But seriously, I've deliberately put these arguments forcefully to prompt debate and we want to hear what you think.--BBC

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2018

 


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

 


 

 


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