Major International Business Headlines Brief::: 10 September 2018

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Major International Business Headlines Brief::: 10 September 2018

 


 

 


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*  Botswana says China agreed to extend loan, cancel debt

*  Baraka Group expects to offer shares in 2019 to fund expansion plans -CEO

*  Egypt's foreign debt rises to $92.64 bln at end-June, PM tells paper

*  South Africa's Nedbank warns land expropriation could spark banking
crisis

*  Kenya economic growth to be curbed by new tax on fuel -industry

*  Egypt gas output at 6.6 bln cubic feet per day -official

*  Algeria does not need loans, should diversify economy: World Bank

*  ARM full-year profit soars 50 pct on debt restructuring

*  Les Moonves resigns from CBS after sexual misconduct allegations

*  Argentina - the crisis in six charts

*  Alibaba's Jack Ma to step down in September 2019

*  Trump warns further China tariffs 'ready to go'

*  Apple v Amazon: Battle of the titans

*  Nigeria takes on Africa's mobile phone giant MTN

 

 

 


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Botswana says China agreed to extend loan, cancel debt

GABORONE (Reuters) - China has agreed to extend a loan to Botswana for rail
and road infrastructure as well as writing off some debt, Botswana’s
President Mokgweetsi Masisi said on Saturday.

 

Speaking at the airport on his return from this week’s China-Africa forum in
Beijing, Masisi said Botswana had made a pitch to China and “I am happy to
report that, judging from what President Xi Jinping told me, we were
successful”.

 

In addition to the loan and a debt cancellation of 80 million pula, China
has also offered a 340 million pula ($31 million) grant, he said.

 

“We got a little bit more than just the loan,” he told reporters.

 

He did not disclose the size of the loan, but last week the ministry of
finance said Botswana was seeking a 12 billion pula ($1.09 billion) loan for
transport infrastructure.

 

Botswana is the world’s leading producer of diamonds by value. Chinese
companies, mostly state owned, are largely into construction in Botswana
such as dams and roads.

 

The bulk of the loan is expected to fund the Mosetse-Kazungula railway line
project, which will link the central part of Botswana to the tourism hub in
the northwest.

 

The railway line will also promote regional trade as it will connect
Botswana to Zambia via the Kazungula Bridge, currently under construction.

 

China’s Xi offered another $60 billion in financing for Africa on Monday and
wrote off some debt for poorer African nations, while warning against funds
going towards “vanity projects”.

 

Speaking at the opening of the forum, Xi said the financing would include
$15 billion in aid, interest-free loans and concessional loans, a $20
billion credit line, a $10 billion special fund for China-Africa
development, and a $5 billion special fund for imports from Africa.

 

($1 = 10.9769 pulas)

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Baraka Group expects to offer shares in 2019 to fund expansion plans -CEO

DUBAI (Reuters) - Al Baraka Banking Group will likely offer shares in 2019
to fund its international expansion plans, its chief executive told Al
Arabiya TV in an interview on Sunday.

 

The Bahrain-based bank plans to expand in China, Indonesia, East Africa and
Morocco, CEO Adnan Yousuf said.

 

Al Baraka last year issued $400 million of tier one sukuk, or Islamic bonds,
which would cover some of the costs of its expansion, Yousuf said.

 

“The remaining portion will come through a share offering, which we expect
in 2019 or the end of 2019,” he said.

 

The Islamic bank already operates in 16 countries, including Morocco and
Indonesia. It said last year it aims to have 1,000 branches across the world
by 2020.

 

Jeddah-based Saudi businessman Saleh Kamel owns nearly 75 percent of the
company. Much of the remainder of its shares are listed on Bahrain’s bourse
and the Nasdaq Dubai stock exchange.

 

 

 

Egypt's foreign debt rises to $92.64 bln at end-June, PM tells paper

CAIRO (Reuters) - Egypt’s foreign debt rose to $92.64 billion at the close
of the financial year in June, up from $88.2 billion at end-March, Prime
Minister Mostafa Madbouly told the Egyptian daily al-Watan.

 

The debt made up 37.2 percent of the country’s GDP at the end of the
2017-2018 fiscal year, Madbouly told the newspaper in an interview published
on Sunday, marking a slight increase from 36.8 percent at the end of the
third quarter.

 

Egypt’s fiscal year begins in July and ends in June.

 

The country’s foreign reserves stood at $44.2 billion at the end of June,
and climbed to $44.4 billion by end-August.

 

 

 

South Africa's Nedbank warns land expropriation could spark banking crisis

CAPE TOWN (Reuters) - South Africa’s plans to change the constitution to
allow the expropriation of land without compensation could hit property
prices and trigger a banking crisis, the chief executive of Nedbank told
parliament on Friday.

 

President Cyril Ramaphosa announced on Aug. 1 that the ruling African
National Congress (ANC) planned to change the constitution to allow land to
be expropriated without compensation, as whites still own most of South
Africa’s territory.

 

Speaking to the Constitutional Review Committee, which is investigating
proposed changes to the constitution, Mike Brown said there was no need to
alter the law because the existing legislation already allowed the state to
expropriate property for land reform purposes.

 

“As a commercial bank, we are a key role player in funding the economy and
any material impact to property prices would adversely affect confidence in
the banking system and could trigger a classic banking crisis with
significant negative knock-on effects on the economy,” Brown said.

 

Nedbank is the fourth largest bank in South Africa.

 

Since the end of apartheid in 1994, the ANC has followed a “willing-seller,
willing-buyer” model under which the government buys white-owned farms for
redistribution to blacks.

 

Progress has been slow and most South Africans believe something has to be
done to accelerate change, providing it does not hurt the economy or stoke
unrest.

 

 

 

Kenya economic growth to be curbed by new tax on fuel -industry

NAIROBI (Reuters) - Kenya’s economic growth momentum for this year could be
snuffed out if a widely unpopular 16 percent Value Added Tax on fuel is
maintained, the country’s chamber of commerce said on Friday, pointing at
higher prices of goods and transport.

 

The tax, which came into force on Sept. 1, is part of a government bid to
boost revenue collection in order to narrow its fiscal deficit and secure an
extension of a standby credit facility from the International Monetary Fund.

 

The High Court on Thursday ordered a temporary suspension of the tax, but
prices at petrol stations visited by Reuters on Friday had not come back
down.

 

“We are asking the government to re-think its options for financing its
development and recurrent expenditure instead of overtaxing various products
that already bear large tax burdens,” the Kenya National Chamber of Commerce
and Industry (KNCCI) said in a statement.

 

The Treasury could not immediately be reached for comment.

 

The finance ministry expects economic growth to rebound to 5.8 percent this
year after drought, jitters over a presidential election and sluggish
private sector credit growth cut last year’s growth to 4.9 percent.

 

“The recent resurgence of the economy will be negatively impacted by this
move and this will reverse any growth we have seen in the past year,” KNCCI
said.

 

The new VAT on fuel sent the retail price of petrol up by 12 percent per
litre. Transport operators have also raised their charges and some petrol
dealers have gone on strike to protest against the new tax, causing fuel
shortages. The tax was originally included in a law passed in 2013, but was
postponed several times, amid protests about its impact.

 

The revenue authority introduced the tax on Saturday but President Uhuru
Kenyatta could still reverse it by signing a bill postponing it again.

 

Justin Muturi, the speaker of the national assembly, told Reuters on Friday
the legislature was consulting with the finance ministry to find a way
forward on the tax.

 

Kenyan businesses and ordinary people routinely complain of a heavy tax
burden. The chamber of commerce said the government could widen the tax base
and increase the rate of tax compliance to 50 percent from the current 17
percent.

 

It also urged the government to cut expenditure, reduce wastage of public
funds and deal with corruption, which some past studies have found account
for the loss of up to a third of the government’s annual budget.

 

 

 

Egypt gas output at 6.6 bln cubic feet per day -official

CAIRO (Reuters) - Egypt’s natural gas output has risen to 6.6 billion cubic
feet per day after an increase in production at its mammoth Zohr offshore
gas field, an energy official said on Saturday.

 

Output at Zohr rose to 2 billion cubic feet per day, the petroleum ministry
said on Friday.

 

Egypt aims to be a regional hub for the trade of liquefied natural gas (LNG)
after a string of major discoveries in recent years including Zohr, which
holds an estimated 30 trillion cubic feet of gas.

 

 

 

Algeria does not need loans, should diversify economy: World Bank

ALGIERS (Reuters) - Algeria, whose oil- and gas-dependent economy has
suffered from sharp falls in the oil price since 2014, has enough money and
does not need foreign loans, the World Bank vice-president for the Middle
East and North Africa said on Friday.

 

A man is silhouetted against the logo of the World Bank at the main venue
for the International Monetary Fund (IMF) and World Bank annual meeting in
Tokyo, file. REUTERS/Kim Kyung-Hoon

But Ferid Belhaj also urged the North African OPEC member to diversify its
economy and focus harder on youth employment.

 

“Algeria has sufficient funding and does not need to borrow from the World
Bank or anyone else,” he told the state news agency APS.

 

The fall in crude oil prices has significantly hit state finances, but
prices have been improving since last year, reducing Algeria’s trade
deficit.

 

Oil and gas account for 94 percent of Algeria’s total export revenue and 60
percent of the state budget.

 

“Today, Algeria’s economy is centred on hydrocarbon. There will be a need to
change and diversify in this country, which has huge potential,” Belhaj said
after meetings with several officials.

 

“This can happen only by relieving the private sector of certain
constraints.”

 

Belhaj also urged the government to use education spending more efficiently
by focusing more on the needs of the labour market. Unemployment currently
stands at over 11 percent.

 

 

 

ARM full-year profit soars 50 pct on debt restructuring

JOHANNESBURG (Reuters) - African Rainbow Minerals (ARM) said on Friday
full-year profit surged 50 percent, lifted by gains from debt restructuring
in its coal division and higher commodity prices.

 

The South African diversified metals company said headline earnings per
share (HEPS) for the year ended June 30, 2018 climbed to 2,526 cents per
share from 1,684 cents a year ago.

 

Headline EPS is the most widely watched profit measure in South Africa which
strips out certain one-off items.

 

Gains from coal debt restructuring stood at 977 million rand ($63.87
million), 23 percent of the group’s headline earnings, the company said.

 

ARM and Glencore South Africa completed restructuring of 3.98 billion rand
worth of debt owed by ARM coal along with 1.83 billion rand owed by the
Participative Business Council to ARM coal in June.

 

“ARM coal’s attributable headline earnings increased to 1.5 billion rand
mainly due to the debt restructuring. Earnings have improved due to the
average realised U.S. dollar export prices being 22 percent higher compared
with a year-ago period,” the company added.

 

ARM declared a final dividend of 750 cents and full-year dividend of 1,000
cents per share.

 

($1 = 15.2962 rand)

 

 

 

Les Moonves resigns from CBS after sexual misconduct allegations

The head of US media giant CBS, Les Moonves, has resigned with immediate
effect after allegations of sexual misconduct.

 

CBS had been investigating Mr Moonves since allegations appeared in the New
Yorker in July - and fresh accusations from six more women appeared on
Sunday.

 

Mr Moonves, 68, denies the allegations, calling the latest "appalling".

 

However, CBS said the company and Mr Moonves would donate $20m (£15.4m) to
groups supporting the #MeToo movement.

 

Mr Moonves' tenure at the top of CBS, which he joined in 1995, has been
marked by a power struggle with Shari Redstone who, through her family's
business National Amusements, is the controlling shareholder in both CBS and
the media conglomerate, Viacom.

 

Ms Redstone and Mr Moonves had been engaged in a court battle as he tried to
thwart her plan to merge CBS and Viacom.

 

But the announcement of Mr Moonves' departure came at the same time as CBS
said it was ending legal action against National Amusements. For its part,
National Amusements said it would not seek a merger between the two
companies for the next two years.

 

What has CBS said?

In a statement it announced that Mr Moonves would step down as chairman,
president and CEO with immediate effect.

 

Joseph Ianniello will serve as president and acting CEO.

 

The Financial Times said Mr Moonves was resigning because this would entitle
him to a hefty severance package, including stock options.

 

US media said the resignation package for Mr Moonves could amount to $100m.

 

However, CBS said he would not receive any severance benefits until the
result of an independent investigation into his conduct.

 

The donation to organisations fighting for "equality for women in the
workplace" would be deducted from the severance benefits, it said.

 

In a separate move, six directors have stepped down and six new ones have
been elected.

 

Mr Moonves has been one of the most powerful executives in US media, joining
CBS in 1995 as head of entertainment and becoming CEO of CBS Corp in 2006.

 

He issued a statement on Sunday saying: "Untrue allegations from decades ago
are now being made against me that are not consistent with who I am."

 

What were the latest allegations?

They appear in a new article in the New Yorker by Ronan Farrow, who also
authored the July piece and this year won a Pulitzer Prize for detailing
assault accusations against Hollywood producer Harvey Weinstein.

 

The six women in the latest piece allege sexual harassment or assault by Mr
Moonves between the 1980s and the first decade of this century.

 

Some allege he forced them to perform oral sex or exposed himself without
their consent.

 

Some say he damaged their careers when they rebuffed him.

 

TV executive Phyllis Golden-Gottlieb and writer Jessica Pallingston are two
of the women who give graphic descriptions of the misconduct they accuse Mr
Moonves of carrying out.

 

What did Mr Moonves say about them?

The New Yorker quoted a statement in which he says: "The appalling
accusations in this article are untrue. What is true is that I had
consensual relations with three of the women some 25 years ago before I came
to CBS.

 

"And I have never used my position to hinder the advancement or careers of
women. In my 40 years of work, I have never before heard of such disturbing
accusations."

 

What were the earlier allegations?

Another six women had accused Mr Moonves. All of them said they believed
their careers had suffered because they rejected his advances.

 

At the time Mr Moonves said he "may have made some women uncomfortable" in
the past, adding: "Those were mistakes, and I regret them immensely. But I
always understood and respected... that 'no' means 'no'."

 

Les Moonves started out as a TV actor before developing Friends and ER with
Warner Bros and then reviving an ailing CBS with hits including CSI,
Everybody Loves Raymond and, most recently, The Big Bang Theory.

 

For a decade under his leadership, CBS has been the most-watched network in
the US, narrowly retaining its crown ahead of NBC in the 2017-18 season.

 

Mr Moonves earned $69.3m (£53m) in 2017 making him one of the highest paid
chief executives in the world.--bbc

 

 

Argentina - the crisis in six charts

Argentina is once again looking into the barrel of an economic crisis.

 

The currency is sliding, inflation rising and there could well be a
recession in the making.

 

The International Monetary Fund (IMF) is providing an emergency loan.

 

It's all happening under a government that was seen by the international
financial markets as offering Argentina new hope, one which, under the
leadership of President Mauricio Macri, held out the prospect of stability
and sustainable market-oriented economic policy that could begin to reverse
a century of poor performance.

 

We look at six factors which have helped drive the crisis.

 

Peso plummets

It has been a grim year for the Argentine economy and the national currency,
the Peso. Almost all emerging market currencies are down, due to rising
interest rates in the United States encouraging investors to move money
there.

 

But the Peso has declined further than any other.

 

Argentina has IMF history

Once again, Argentina has turned to the IMF for financial help in a crisis.

 

It has agreed to lend Argentina a total of $50bn. Going to the IMF is a
controversial move, especially so in Argentina.

 

IMF support generally comes with conditions that include unpopular
austerity. Many Argentines blamed the IMF for the previous crisis in 2001.
And there's a history. Argentina had its first IMF programme sixty years
ago.

 

Messy finances

The loss of confidence among international investors reflects concerns about
whether the government can meet all its debt repayments and borrow the new
money it needs to finance its spending.

 

When President Macri took office at the end of 2015 the deficit in the
government's finances - how much more it spends than it takes in taxes - was
large. He wanted to bring it down but adopted a gradual approach to economic
reform.

 

There is also a growing deficit in the country's international trade (or
strictly speaking its current account). That has to be financed by foreign
borrowing or investment, which is increasingly challenging at a time when US
interest rates are rising.

 

In fact the deficit got slightly larger leaving Argentina at risk from
anything that might make investors more inclined to pull their money out.

 

Rocketing inflation

Argentina's long standing inflation problem is another element in the
crisis. The most recent figure is around 30%. That is one of the highest in
the world, although not exceptional in Argentina's history.

 

There was a period of relatively moderate inflation in the 2000s, but it
didn't last. (There is a gap in the graph, where the IMF thought the
official inflation figures unreliable).

 

The economy (GDP in the graph) grew strongly in the years after the previous
crisis in 2001-2. But its recent performance has been more uneven. Over the
long term, Argentina's performance has been dismal.

 

A hundred years ago, it was richer than many countries in Western Europe, in
terms of economic activity (GDP) per person. Now it's less than half the
levels of France Germany and the UK. The intervening century has been
described as "one of the most puzzling stories in the annals of modern
economic history."

 

Interest rates soar

Interest rates have been increased sharply by the central bank in an effort
to stabilise the Peso and bring inflation under control.

 

That is painfully high for consumers and businesses that want or need to
borrow.

 

Even if the IMF bailout and the government's reforms do work, it looks like
Argentina is, again, in for a torrid time as it seeks to chart its way
through yet another economic crisis.--bbc

 

 

 

Alibaba's Jack Ma to step down in September 2019

Jack Ma, the executive chairman of Chinese e-commerce giant Alibaba, has
said he plans to step down in a year.

 

The news, in a letter sent by Mr Ma to Alibaba customers and shareholders,
follows conflicting reports over the weekend on the timing of his exit.

 

Mr Ma, one of China's richest men, will hand over the reins to Daniel Zhang,
currently chief executive.

 

Alibaba is one of the world's most valuable companies - its shares nearly
doubled in value last year.

 

Mr Zhang will become executive chairman on 10 September 2019, the company
said in a statement.

 

The one year handover period is aimed at achieving a "smooth and successful
transition."

 

Mr Ma, previously an English teacher, co-founded Alibaba in 1999 and has
seen it become one of the world's biggest internet companies.

 

"Teachers always want their students to exceed them, so the responsible
thing to do for me and the company to do is to let younger, more talented
people take over in leadership roles," Mr Ma said in the letter, released on
his 54th birthday.

 

Mr Ma, who has a current net worth of $36.6bn (£28.34bn), will remain a
director on Alibaba's board until its annual shareholder meeting in 2020. He
is a permanent member of the Alibaba Partnership.

 

The charismatic Mr Ma, who is known for dressing like a rock star, said he
wanted to return to education.

 

"The world is big, and I am still young, so I want to try new things," Mr Ma
said, adding he plans to continue in his role as founding partner.

 

"The one thing I can promise everyone is this: Alibaba was never about Jack
Ma, but Jack Ma will forever belong to Alibaba."

 

He said Mr Zhang, who has been with Alibaba for eleven years, had
demonstrated "superb talent" since taking over as chief executive.

 

Alibaba listed in New York in 2014 in what was then the world's biggest
initial public offering of shares.

 

It reported revenues of $39.9bn for the fiscal year ended March 2018.--bbc

 

 

 

Trump warns further China tariffs 'ready to go'

US president Donald Trump has threatened to intensify his trade war with
China, warning he could impose tariffs on almost all its imports.

 

He said he could move "very soon" to impose tariffs on $200bn (£155bn) worth
of products with taxes on another $267bn "ready to go on short notice".

 

If both sets of tariffs go ahead it would mean virtually all of China's US
exports would be subject to new duties.

 

The move risks raising tensions between the world's two largest economies.

 

"The $200bn we are talking about could take place very soon depending on
what happens with them," Mr Trump said, in comments made on Air Force One,
as he travelled from Montana to South Dakota.

 

"To a certain extent it's going to be up to China. And I hate to say this,
but behind that is another $267bn ready to go on short notice if I want.
That changes the equation,"

 

Tech firms ask for Trump tariff protection

8 goods to be hit by Trump's tariffs

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

The early victims of Trump's trade war

If the administration does go ahead with another round of tariffs on Chinese
products, it would mark the third set put into motion so far this year.

 

In July, the White House increased charges on $34bn worth of Chinese
products. Then last month, the escalating trade war moved up a gear when the
US brought in a 25% tax on a second wave of goods worth $16bn.

 

China has retaliated on both occasions with tariffs on the equivalent value
of US goods.

 

The Chinese imports targeted so far include a vast range of goods, including
semiconductors, plastics, chemicals and railway equipment, and fridges. The
US products targeted by China include coal, copper scrap, fuel, buses and
medical equipment.

 

If a third set of tariffs on $200bn worth of Chinese goods are imposed then
a host of tech firms have warned they will be impacted.

 

Apple is reported to have told the US government it will affect the cost of
its Apple Watch, AirPods, HomePod, AirPort routers, Apple Pencil, Mac mini,
and some adapters/cables, according to Bloomberg.

 

Earlier, Dell, Cisco, Juniper Networks and Hewlett Packard Enterprise warned
the new taxes could result in US job losses.

 

The firms are worried the tariffs will increase their costs since many of
their components come from China.

 

Mr Trump says he wants to stop the "unfair transfers of American technology
and intellectual property to China" and protect jobs.

 

Tariffs, in theory, will make US-made products cheaper than imported ones,
so encourage consumers to buy American. The idea is they would boost local
businesses and support the national economy.

 

But many US companies and industry groups have testified to the US Trade
Representative's Office that their businesses are being harmed.

 

The dispute dates back to January, when the US slapped controversial tariffs
on imported washing machines and solar panels. That was considered Mr
Trump's most significant trade move since his decision to pull the US out of
the TPP and renegotiate the North American Free Trade Agreement (Nafta).

 

The US imported $505bn in goods from China last year, and this year until
the end of July, Chinese imports are nearly 9% higher, according to official
US data.

 

Earlier, White House economic adviser Larry Kudlow told CNBC that the
administration was still talking with China about trade issues but that so
far China had not met US requests.--bbc

 

 

Apple v Amazon: Battle of the titans

In early September, Amazon's market value briefly went over $1tn (£779bn),
just over a month after Apple became the first public company in the world
to achieve such a feat. Both tech companies have grown over the last few
years, but will this continue?

 

Apple and Amazon are as different from each other as apples and oranges.

 

Apple is a tech company that is also a trendy consumer brand. Its computers
and devices have often been must-have gadgets, and customers are willing to
pay far more for their products than cheaper alternatives.

 

On the other hand, Amazon is where people go when they want to get a product
more cheaply, more easily, or more quickly.

 

Since the iPhone first went on sale in 2007, Apple shares have soared by
1,100% and have jumped almost a third in the past year.

 

As for Amazon, the internet retail giant has seen a steady, yet speedy rise
in its share price, with its market value jumping from $600bn to $700bn in
just 16 days.

 

In contrast, the same feat took Apple 622 days.

 

Amazon's market value tops $1tn

Is Amazon's first serve strong enough?

Apple's market value hits $1 trillion

Although Apple and Amazon offer different products and services, they are
both technology firms and make up two of the five best performing technology
stocks on the market - typically known as FAANG, which stands for Facebook,
Apple, Amazon, Netflix and Google.

 

Which company has a better outlook on long term growth? Here's a look at
some of the key areas for each firm, and how they are are performing.

 

Device sales

Traditionally, most of Apple's revenues have come from its device sales -
particularly the iPhone, iPad, iMac and iPod.

 

Apple only has a 14% share of the global smartphone market, yet its revenues
consistently dwarf its nearest competitor.

 

According to Strategy Analytics, in the first quarter of 2018, Apple
captured $61bn in revenues, whereas Samsung only achieved $19bn, followed by
Huawei in third position with $8bn in revenues.

 

"Apple's dependence on iOS devices has been its strength, but moving forward
presents its greatest challenge, in that opportunities to grow its user base
will be limited," Juniper Research's head of forecasting and consultancy
Windsor Holden tells the BBC.

 

"We don't believe revenues will decline, but the opportunity to generate
significant new revenues will diminish over time, as increasingly Apple
relies on creating additional value from existing customers."

 

Amazon has performed below expectations over the last five years with its
devices, which include Kindle e-readers, Kindle Fire tablets and Echo
voice-controlled speakers, but analysts say it can afford to do so.

 

"Amazon can sustain a model where they can sacrifice margins on devices,
because they generate revenue from services and content," explains Gartner
principal analyst Roberta Cozza.

 

In 2017, there were 1.5 billion smartphone shipments worldwide, according to
Juniper Research.

 

However shipment growth will continue to slow down over the next five years,
since most consumers in western markets now already own smartphones.

 

Apple also faces huge competition in all regions from Chinese Android
smartphone makers, who are releasing feature-rich premium devices which are
cheaper than Apple and Samsung's devices.

 

"In a competitive landscape where you have this level of commoditisation and
low cost, it becomes risky for Apple to heavily rely on hardware sales,"
adds Ms Cozza.

 

Connected home

One key area of business growth potential is the connected home.

 

Both Apple and Amazon have developed artificially intelligent virtual
personal assistants and wireless smart speakers, but in this space Amazon
has a clear advantage.

 

Apple's virtual assistant is Siri, and it recently released the Home Pod
wireless speaker. Amazon's virtual assistant is Alexa, and it has a line of
Echo smart speakers.

 

The Home Pod is focused on providing a music experience, while Amazon wants
you to use the Echo to control the lights in your home and to manage your
daily life.

 

And Amazon's Echo already has a much higher household penetration than
Apple's Home Pod.

 

"If you speak to people in the industry, they say it's a lot easier to work
with Amazon, because you're dealing with a much more open ecosystem," says
Mr Holden.

 

"It's become very easy for third parties to create apps for Alexa, [whereas]
Apple has always tended to be almost defensive of its control of the iOS
ecosystem."

 

Ms Cozza agrees. She says that Amazon has been very active in pushing Echo's
usefulness in the home, in enterprise and in cars, whereas Apple has not,
and has far fewer partners.

 

Services

When it comes to services, Apple and Amazon's offerings differ considerably.

 

Amazon is primarily focused on ecommerce, but apart from devices, it also
sells apps, has a cloud computing business Amazon Web Services (AWS), offers
video content streaming with exclusive TV content, and is also in the online
payments space.

 

AWS has proved to be particularly lucrative - it has seen sales jump by 49%
to $6.1bn in the second quarter of 2018, and its operating profit has risen
to $1.64bn, from $916m in the same period in the previous year.

 

Juniper estimates that the cloud computing market for software, platform and
infrastructure-as-a-service will be worth over $145bn in 2020.

 

Amazon is the largest player in this market, with a third of the market
share.

 

"Amazon's strength in the cloud historically has been the ability to attract
an enormous variety of customers; from large corporates such as Netflix, to
individuals," says Mr Holden.

 

"Moving forward, it will be a key player in the Internet of Things (IoT)
movement, particularly given its wide-ranging AWS tools and ability to
provide edge computing services."

 

Apart from devices, Apple is mostly focused on its Apple Music streaming
service; Apple Pay contactless payments; and selling music tracks and mobile
apps on the iTunes Store.

 

But it could potentially develop other services.

 

"Apple has other avenues - immersive technology in education; and think
about wearables and healthcare," says Ms Cozza.

 

"I think still there are a lot of services and opportunities where Apple can
grow."

 

Long-term growth

Both Amazon and Apple are hugely successful businesses, and in fact their
joint total worth could encapsulate 25 of the biggest companies in the US.

 

But which one has the greatest potential for long term growth?

 

Neil Saunders, managing director of GlobalData Retail, feels that both
companies will continue to grow, but at a different pace.

 

"They're still really admired, but there are concerns that Apple won't be
able to keep pushing their iPhone as heavily as it has done in an era where
there's much more competition," he tells the BBC.

 

Apple's share price growth has seen a lot of stops and starts, he says. It
needs another "breakthrough" product and a new mass market to sell to, or
its growth will stagnate.

 

As for Amazon, because it is a younger company than Apple, it still doesn't
have an established presence in many countries, so it has more room to grow
than Apple, which already has a global customer base.

 

"Amazon is much more of a mass market player than Apple - with some
instances you could use Amazon every day," he said.

 

"With Apple you would only buy one product a year. Amazon has a much bigger
potential to scale up than Apple."

 

On the downside, both companies have grown so large that they now face the
threat of regulation from a number of governments, to say nothing of
additional taxation.

 

Still, the consensus is that Apple and Amazon's fortunes are unlikely to be
dented anytime soon.

 

"Both companies are facing issues around regulations. There are issues about
taxation, but if it comes down to a straight fight between Amazon and Apple,
then given that Amazon has these various strong strings to its bow, then
ultimately my belief is that Amazon will win out," says Mr Saunders.--bbc

 

 

 

Nigeria takes on Africa's mobile phone giant MTN

MTN, Africa's largest mobile phone company, might be forgiven for feeling
picked on in Nigeria.

 

In 2015, it was fined more than $5bn (£3.85bn) by the Nigerian authorities
for failing to cut off unregistered Sim cards - a figure that was reduced to
$1.7bn after a long legal dispute and the intervention of South Africa's
then President Jacob Zuma.

 

More recently, Nigeria's Central Bank ordered the South African company to
repatriate $8bn it said had been taken out of the country illegally.

 

And now MTN has been slapped with a $2bn bill to cover a decade's worth of
allegedly unpaid taxes.

 

The company says it has settled the bill with a $700m payment and that
Nigeria made errors with its calculations.

 

Shares have plunged to a near 10-year low, but MTN insists it is committed
to being in the country, which is, after all, its largest market on the
continent.

 

If the company fails in its challenge to the tax bill it will have to come
up with billions of dollars, a tall order given that its profits last year
amounted to $370m.

 

Who is in the wrong?

The timing of the fines could not be worse for Nigeria's image, hit by
political uncertainty six months ahead of elections and amid doubts over the
independence of its central bank.

 

Experts now fear the move could reflect badly on the country's
attractiveness as an investment destination and wonder why these decade-long
regulatory breaches were not brought up sooner with MTN.

 

Femi Oladehin, a partner at Nigerian Investment firm, Argentil Capital
Partners, suggested that Nigeria could be using the phone company as an easy
way to make money.

 

"The challenge is that MTN is a sitting duck and there's the perception that
it can afford the fines," he told the BBC.

 

Others think there is a mix of both political and corporate negligence. "I'm
not sure that it's as political as MTN seems to be portraying," said Kayode
Akindele, a partner at Nigerian investment firm, TIA Capital.

 

MTN has also been accused of corporate malpractice elsewhere in Africa.

 

In 2017, it was fined $8.5m by Rwandan authorities for non-compliance with
license regulations and in 2015, a Ugandan court ordered MTN to pay $600,000
for anti-competitive behaviour.

 

MTN agreed to pay the Rwandan fine, but challenged the Ugandan court order.

 

If Nigeria's allegations hold up, it could count as a victory for the
country's President Muhammadu Buhari, who came to power on promises of
tougher regulations and the end of endemic corruption.

 

Will MTN leave Nigeria?

MTN boss Rob Shuter said that the company was still committed to Nigeria
despite the controversy.

 

This is not surprising, given that it has about 66 million subscribers in
the country - compared to 30 million in its home market, South Africa.

 

The phone giant isn't the only telecommunications firm in Nigeria to have
been hit with fines: MTN, Airtel, and locally owned Globacom were fined a
combined $4m for providing poor service in 2014.

 

But no other company in the sector has been asked to pay as much as MTN.

 

Before the allegations were made, MTN said it would list on Nigeria's Stock
Exchange before the end of this year. It now looks like the listing will be
delayed.

 

Do South African companies have a problem in Nigeria?

It is starting to looks as though regulators are making it difficult for
South African companies to thrive in Nigeria.

 

Africa's two largest economies have a long-standing rivalry for continental
supremacy.

 

South African-owned satellite company, Multichoice, was embroiled in a
tussle with Nigerian regulators in August when it was prevented from raising
prices for its television service.

 

While earlier this week, hotelier Sun International cited weak economic
growth and clashes with regulators when it announced it was pulling out of
Nigeria.

 

Fellow South African companies Woolworths and Tiger Brands also quit
Nigeria, in 2014 and 2015 respectively.

 

How are investors reacting?

Reactions to Nigeria's actions have been mixed.

 

Some see it as a sign of Nigeria's increased scrutiny of the private sector
and a resolve to to make all investors, big and small, comply with its laws.

 

"Nigeria's crackdown on MTN could signal that the country isn't interested
in just foreign direct investment - it must be the right kind of
investment," Mr Akindele said.

 

But in spite of being a place of enormous opportunity for investors, experts
say Nigeria remains a difficult country to operate in.

 

"While it's always great to see the regulators at work, it is creating a
perception that Nigeria may be unfavourable for foreign investment," said
Nigerian economist Tunji Andrews.

 

He pointed out that MTN was "Nigeria's biggest non-oil investor and
contributor to Nigeria's GDP".

 

"It should be the poster boy for what investment could be. It could have
been handled with a little more tact."--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
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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
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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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