Major International Business Headlines Brief::: 26 October 2018

Fri Oct 26 08:54:39 CAT 2018

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Major International Business Headlines Brief::: 26 October 2018

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

*  S.African finance minister calls for swift action on debt to avoid IMF

*  Kenyan central bank sets next rate-setting meeting for Nov. 27

*  S.Africa finance minister doubts SAA will find equity partner in current
state

*  Bidvest tank terminals and Petredec unveil construction of $70 mln LPG
site

*  Steinhoff says subsidiary Stripes U.S. Holding to hold restructuring meet

*  AB InBev halves dividend, shares tumble as major markets hit

*  Namibia says economy to shrink 0.2 percent this year

*  Google sacks dozens over sexual harassment

*  RBS profits up but PPI costs rise

*  Lord Hain defends naming Sir Philip Green over harassment claims

*  Amazon slides on Christmas sales slowdown

*  Wall Street ends higher in rebound

 <mailto:info at bulls.co.zw> 

S.African finance minister calls for swift action on debt to avoid IMF

CAPE TOWN (Reuters) - Finance Minister Tito Mboweni said on Thursday South
Africa had to act swiftly on its debt levels to avoid having to turn to the
International Monetary Fund for help, a day after his bleak medium-term
budget speech rattled markets.

Mboweni predicted wider budget deficits and cut growth forecasts in his
medium-term budget policy statement on Wednesday, as Africa’s most
industrialised economy faces a recession, revenue shortfalls and ballooning
debt.

“Whether or not you like the IMF, ideologically or practically, it doesn’t
matter. When you get into a debt trap that’s where you end up,” Mboweni told
lawmakers.

“That low economic scenario has reduced tax revenues. We clearly have a
problem.”

The Treasury expects government’s gross debt to stabilise at 59.6 percent of
GDP by 2023/24 from an estimated 55.8 percent in the current year. Tax
revenue is expected to underperform significantly in the three years to
2020/21.

The rand slumped 2 percent after Mboweni’s budget speech on Wednesday and
yields on government bonds jumped, though the market reaction on Thursday
was more muted.

Analysts say ratings agencies are likely to take a dim view of the
Treasury’s latest budget projections.

Moody’s, the last of the “big three” agencies to rate South Africa at
investment grade, is expected to review South Africa’s rating in the coming
weeks.

S&P Global Ratings and Fitch already rate South Africa’s foreign-currency
debt as “junk” status.

 <mailto:info at bulls.co.zw> 

S.Africa finance minister doubts SAA will find equity partner in current
state

CAPE TOWN (Reuters) - South African Finance Minister Tito Mboweni said on
Thursday that he doubted that the government would find an investor to take
an equity stake in struggling state-run South African Airways (SAA) in its
current financial state.

“I doubt you are going to find an equity partner who will come into SAA in
this current state. As an equity partner you’d have to immediately assume
debt of some 21 billion rand ($1.5 billion),” Mboweni told lawmakers, a day
after giving a bleak medium-term budget speech which rattled South African
markets.

($1 = 14.4873 rand)

Kenyan central bank sets next rate-setting meeting for Nov. 27

NAIROBI (Reuters) - The Central Bank of Kenya’s Monetary Policy Committee
will hold its next rate-setting meeting on Nov. 27, the bank said on its
website.

At its last meeting in September the bank held its benchmark lending rate at
9 percent.

Bidvest tank terminals and Petredec unveil construction of $70 mln LPG site

RICHARDS BAY, South Africa (Reuters) - South Africa’s Bidvest Tank Terminals
(BTT), a unit of Bidvest Group, and liquefied petroleum gas (LPG) firm
Petredec on Thursday launched the construction of a 1 billion rand ($70
million) LPG import and storage facility in Richards Bay, north of Durban.

The 22,600 tonne facility will significantly increase the supply of LPG to
Africa’s most industrialised economy and allow for exports of the fuel to
neighbouring countries, the companies said in a joint statement.

Although LPG is preferable to paraffin or wood as fuel for heating and
cooking, the South African per capita usage of LPG is lower than in many
equivalent economies as a result of constrained domestic supply and a lack
of sufficient import and storage capacity.

The lack of sufficient storage facilities in the country has meant that
Petredec’s ships, which trade, transport, store and distribute LPG to
industrial, commercial and domestic users, have had to park outside the
harbour for months, while incurring costs, the firm’s Director Lee Furby
told Reuters.

“There will be huge efficiencies when this terminal opens, not only for us
but also for the end users,” Furby said.

Petredec supplies most of South Africa’s imported LPG.

The country uses about 400,000 tonnes of LPG annually. The facility is
expected to increase this by 200,000 tonnes a year.

“An increased LPG supply will result in the fuel becoming a significant
alternative to South Africa’s current energy supply, with little additional
infrastructure required,” BTT’s Managing Director David Leisegang said.

The four 5,650 tonne tanks that have a concrete case surrounding the
cylinder will be made in China, and are expected to be completed in April.
The facility will be operational in 2020.

South Africa is diversifying its energy mix and reducing reliance on coal,
which accounts for over 85 percent of its power.

According to the Competition Commission, industrial or commercial users of
LPG in South Africa account for approximately 85 percent of consumption,
while domestic or household users consume the remaining 15 percent.

($1 = 14.5051 rand)

Steinhoff says subsidiary Stripes U.S. Holding to hold restructuring meet

JOHANNESBURG (Reuters) - South African retailer Steinhoff said on Thursday
that the High Court of Justice in England and Wales had granted permission
to its subsidiary, Stripes U.S. Holding, to convene a meeting with creditors
about a proposed restructuring.

The meeting will consider whether to approve a scheme for creditors to
exchange their rights under a revolving credit facility to Stripes U.S.
Holding for similar ones involving Steinhoff Europe AG as the borrower.

Steinhoff 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.

AB InBev halves dividend, shares tumble as major markets hit

BRUSSELS (Reuters) - Anheuser-Busch InBev cut its proposed dividend by half
on Thursday as beer sales dropped in the world’s largest brewer’s largest
markets, the United States and Brazil, and overall earnings fell short of
forecasts, knocking its shares.

AB InBev’s shares fell by 7.6 percent to 66.89 euros and were among the
weakest in the FTSEurofirst index after the brewer of Budweiser, Stella
Artois and Corona said it will pay a total dividend of 1.80 euros per share
for 2018.

This would save AB InBev, which paid around $100 billion for SABMiller in
2016, about $4 billion which the Belgium-based brewer said would be used to
cut its net debt of $108.8 billion.

“In the last six months, we’ve seen a lot of (currency) volatility. This
scenario triggers some sort of uncertainty and at a certain point... we
thought it was the right time to adjust the dividend,” Chief Financial
Officer Felipe Dutra said.

The company said dividends would increase over time, but growth would be
modest in the short term given the importance of deleveraging. Dutra said
this meant the next one to two years.

Third-quarter core profit (EBITDA) rose 7.5 percent on a like-for-like basis
to $5.36 billion, well below the average forecast in a Reuters poll of $5.71
billion. Earnings per share, at $0.82 was also below the average expectation
of $1.03.

Trevor Stirling, analyst at Bernstein Research, said that the dividend cut
made sense, probably allowing AB InBev to return to a “comfort zone” of
about 4 times net debt to EBITDA at the end of 2019. This stood at 4.87 at
the half-year mark.

“The underlying trends were soft as well,” he said.

In the United States, AB InBev’s biggest market, beer sales declined, as did
the its market share. Revenues rose, helped by price hikes and a shift to
higher-priced beers, but core earnings fell due to higher commodity costs,
mainly aluminium.

In Brazil, the company’s second-largest market, beer sales declined as
disposable income barely rose and consumer sentiment fell. However, revenue
and profit climbed due to a price hike and as marketing costs dipped after
the soccer World Cup.

In South Africa, a new market for the company, earnings fell as consumers
had less money to spend on beer and also due to supply constraints.

AB InBev also said it had taken an accounting hit due to hyperinflation in
Argentina.

Namibia says economy to shrink 0.2 percent this year

WINDHOEK (Reuters) - Namibia’s economy will contract 0.2 percent this year,
down from a forecast of 1 percent growth in July, due to a weak performance
in the manufacturing and construction sectors, Finance Minister Calle
Schlettwein said on Tuesday.

Namibia’s economy should grow 0.9 percent next year, Schlettwein said in a
medium-term budget review.

The southern African country’s budget deficit will be maintained at no more
than 4.4 percent of GDP in the 2019/20 financial year, he said.

Google sacks dozens over sexual harassment

Google has sacked 48 people including 13 senior managers over sexual
harassment claims since 2016.

In a letter to employees, chief executive Sundar Pichai said the tech giant
was taking a "hard line" on inappropriate conduct.

The letter was in response to a New York Times report that Android creator
Andy Rubin received a $90m exit package despite facing misconduct
allegations.

A spokesman for Mr Rubin denied the allegations, the newspaper said.

Sam Singer said Mr Rubin decided to leave Google in 2014 to launch a venture
capital firm and technology incubator called Playground.

He was given what the paper described as a "hero's farewell" when he
departed.

Mr Pichai's letter said the New York Times story was "difficult to read" and
that Google was "dead serious" about providing a "safe and inclusive
workplace".

"We want to assure you that we review every single complaint about sexual
harassment or inappropriate conduct, we investigate and we take action," he
continued.

None of the employees dismissed in the past two years had received an exit
package, Mr Pichai added.

According to the New York Times report, two unnamed Google executives said
then-chief executive Larry Page asked Mr Rubin to resign after the company
confirmed a complaint by a female employee about a sexual encounter in a
hotel room in 2013.

A Google investigation found the woman's complaint to be credible, the paper
reported, but the company has not confirmed this.

Mr Rubin has said he did not engage in misconduct and left Google of his own
accord.

The claims will add to the growing chorus denouncing sexist culture in
male-dominated Silicon Valley.

Carolina Milanesi, an analyst at Creative Strategies in San Francisco,
tweeted: "In a normal world this would mean Rubin is done, but tech has not
just been forgiving, some tech sees little wrong with this.

"I'd like to think Google will clean up its act if anything to avoid having
a retention problem with their female employees."

Shares in Alphabet, which owns Google, fell more than 3% in New York after
it reported revenues of $33.7bn (£26.3bn) for the three months to September
- slightly less than analysts had expected.

However, net profit soared $2.5bn to $9.2bn - far higher than expected.--BBC

RBS profits up but PPI costs rise

Royal Bank of Scotland has reported a 14% rise in third-quarter profits to
£448m, from £392m a year earlier.

The bank also set aside a further £200m to cover costs for the mis-selling
of payment protection insurance in the July-to-September period,

RBS is still 62% publicly owned after being bailed out by the government at
the height of the financial crisis.

It paid its first post-crisis dividend to shareholders earlier this month.

RBS also disclosed that it had received approval from Dutch regulators to
serve EU clients out of Amsterdam after the UK leaves the EU.

The fresh PPI provision reflected "greater than predicted complaints
volumes", RBS said.

The bank has now set aside a total of £5.3bn to deal with the mis-selling.

Chief executive Ross McEwan described the results as "a good performance,
set against a highly competitive market and an uncertain economic outlook".

He added: "We are growing lending in our target markets and are in a strong
position to support the economy. We're aware there is much more work to do
and are fully focused on improving for our customers."--BBC

Lord Hain defends naming Sir Philip Green over harassment claims

Lord Hain has defended naming Sir Philip Green as the businessman a
newspaper accused of sexual and racial harassment, saying it was the "right
thing to do".

A court injunction prevented the Daily Telegraph from identifying the retail
tycoon but the peer used parliamentary privilege to name him in the Lords.

One barrister said Lord Hain's conduct had been "completely improper".

Sir Philip says he "categorically and wholly" denied the allegations.

Meanwhile, Liberal Democrat leader Sir Vince Cable called for Sir Philip to
lose his knighthood if the allegations were proved to be correct.

How has Lord Hain explained his actions?

The Court of Appeal temporary order banning the naming of Sir Philip remains
in force, but making his statement in the House of Lords on Thursday, Lord
Hain said he "felt it was his duty" to identify the Topshop boss and it was
in the public interest.

He said he had been contacted by someone "intimately involved in the case"
and given the use of non-disclosure agreements (NDAs) "to conceal the truth
about serious and repeated sexual harassment, racist abuse and bullying", he
felt he should speak out.

Parliamentary privilege protects MPs or peers from being prosecuted over
statements made in the Commons or Lords, and is one of the oldest rights
enshrined in British law.

Sir Philip Green named over harassment claims

Speaking later on BBC Newsnight, Lord Hain denied he was undermining a
decision of the courts, saying: "I considered it extremely seriously before
I said it".

"I'm not disputing judges' responsibilities or timing or anything like that.
That's a matter for the judiciary," he said.

"I'm just charging my function as a parliamentarian - and what concerned me
about this case was wealth, and power that comes with it, and abuse.

"And that was what led me to act in the way that I did."

Lord Hain said while there had been some criticism of his decision on social
media, he had received "overwhelming support - particularly from women".

What has the reaction been?

Labour MP Jess Phillips said Lord Hain "did the right thing. It was brave
and I doubt he took the decision lightly".

But Barrister Hugh Tomlinson QC told the BBC Radio 4's World Tonight
programme the courts were the "proper institutions" for deciding the issues
raised in this case.

Mr Tomlinson, a founder of the Hacked Off press regulation campaign, said:
"Parliament can't trespass into areas of the courts and say we think the
courts have got it wrong - and that's what Lord Hain is effectively doing."

Former Labour Home Secretary Alan Johnson also questioned Lord Hain's
actions, telling the BBC there had to be a very good reason for a
parliamentarian to breach the decision of three senior judges who had seen
the evidence.

What were the allegations made in the Telegraph?

The newspaper reported that interviews with five members of staff revealed
that victims had been paid "substantial sums" in return for legal
commitments not to discuss their alleged experiences.

The BBC has not been able to verify the allegations contained in the
Telegraph's report.

What does Sir Philip say?

Sir Philip said in a statement on Thursday night that he would not comment
on anything that happened in court or was said in Parliament.

"To the extent that it is suggested that I have been guilty of unlawful
sexual or racist behaviour, I categorically and wholly deny these
allegations," he said.

Sir Philip said he and his company, Arcadia, "take accusations and
grievances from employees very seriously and in the event that one is
raised, it is thoroughly investigated.

"Arcadia employs more than 20,000 people and in common with many large
businesses sometimes receives formal complaints from employees.

"In some cases these are settled with the agreement of all parties and their
legal advisers. These settlements are confidential so I cannot comment
further on them."

Sir Philip Green built a fortune from a retail empire that includes Topshop,
BHS, Burton and Miss Selfridge.

His fall from grace came after BHS, the retail chain he sold in March 2015
for £1, went into administration leaving a £571m hole in its pension fund.

In 2016, a damning report by MPs found that Sir Philip had extracted large
sums from BHS and left the business on "life support".

There were calls for Sir Philip to lose his knighthood at the time.

He later agreed a £363m cash settlement with the Pensions Regulator to plug
the gap.

Sir Philip Green profiled

Why was Lord Hain's intervention unexpected?

By Clive Coleman, BBC legal correspondent

People will remember back to the super-injunction stories of recent years,
including the case of footballer Ryan Giggs. When he was named using
parliamentary privilege, it was frowned upon.

Parliamentarians and the judiciary alike were very concerned that this
privilege should not be used to undermine the rule of law.

And a great effort was made from that time to ensure that this didn't happen
again.

So the judiciary is unlikely to be pleased.

We have not got a constitutional crisis on our hands here, but we do have a
really significant development in terms of the way in which parliamentary
privilege is seen to be used in relation to court orders.--BBC

Amazon slides on Christmas sales slowdown

A disappointing sales forecast for the Christmas season sent Amazon shares
sliding on Thursday night.

The online giant said it expected year-on-year sales growth of 10% to 20%
for the three months to 31 December.

That would be a marked slowdown from the 29% jump in sales for the most
recent quarter to $56.6bn.

Amazon also made record profits of $2.9bn in the period, compared with $256m
last year.

That marked a fourth consecutive quarter of more than $1bn in profit for the
Seattle-based company and came despite a 21% rise in operating expenses.

Added costs came from investment in its Prime membership scheme, offering
home delivery from Whole Foods stores and creating more original content for
Amazon Prime Video.

The profit surge has been partly driven by divisions outside its extensive
retail operation.

Revenue from AWS, its cloud services business, increased 46% year-on-year to
nearly $6.7bn for the quarter to 30 September.

"Other" revenue - a category that primarily includes the firm's advertising
business - jumped 122% to almost $2.5bn.

Retail remains the firm's biggest source of revenue, with the strongest
growth in North America.

But it is facing increasing competition, as other retailers - including low
cost giants such as Walmart - focus on online sales.

Online sales in the third quarter totalled more than $29bn, 10% higher than
from last year.

Amazon's physical retail locations - most of them associated with the Whole
Foods grocery chain the firm acquired last year - brought in about $4.2bn.

Amazon expects sales in the fourth quarter between of $66.5bn and $72.5bn.

On a call with analysts, executives blamed the somewhat modest Christmas
season forecast on factors such as currency fluctuations.

They also said comparisons were complicated by changes to the business, such
as the acquisition of Whole Foods.

Chief financial officer Brian Olsavsky said consumer demand remained
healthy: "We're very bullish on the fourth quarter - we'll just have to see
where revenue comes in."

After ending 7% higher, shares fell almost 8% in after-hours trading in New
York. Amazon stock has jumped nearly 40% this year.

The underlying strengths of Amazon's business remain, despite the
disappointing forecast, said equity analyst George Salmon of Hargreaves
Lansdown.

He added that the high expectations for the company had raised the share
price to levels where swings were to be expected.

Neil Saunders at GlobalData Retail said the retail landscape had been
shifting: "There is more online competition in online retail than there has
ever been, and that competition is more effective than it has ever
been."--BBC

Wall Street ends higher in rebound

Shares on Wall Street have closed higher, rebounding after a bruising
trading session on Wednesday.

Strong corporate results, including from tech firms Microsoft and Twitter,
helped bolster the US exchanges.

The Dow Jones ended up 1.6%, the S&P 500 added almost 1.9% and the Nasdaq
climbed almost 3%.

The gains followed steadier trading earlier on European markets, which
calmed investors after declines in Asia.

London's benchmark FTSE 100 closed 0.6% higher, while the broader FTSE 250
added 0.7%.

Frankfurt's Dax and the Paris Cac both fared even better, adding 1% and 1.6%
respectively.

Earlier, Tokyo stocks had slumped more than 3%.

Investors have been rattled by the outlook for corporate profits amid signs
that global growth, particularly in China, is slowing.

Companies in the US are also reporting increased costs due to labour
shortages and trade tariffs.

Wednesday's losses had pushed the US Dow Jones Industrial Average and the
S&P 500 below their starting point at the beginning of the year.

However, Thursday saw the exchanges regain some ground.

Microsoft enjoyed some of the strongest gains on the Dow, adding more than
5.8% after its quarterly results pleased investors.

Twitter shares jumped more than 15% after it reported better than expected
sales and profits.

October tends to be the most volatile month for the US stock market, but the
sharp swings mark a change from the steady upward march the exchanges
enjoyed last year.--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
whatsoever for any loss howsoever arising from any use of this report or its
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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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