Major International Business Headlines Brief::: 27 September 2018

Wed Sep 26 21:30:27 CAT 2018

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Major International Business Headlines Brief::: 27 September 2018

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

*  Moody's: "Very small" S.Africa stimulus to have little impact

*  World Bank approves first grants to Somalia in 30 years

*  Old Mutual shareholders to get $3.5 bln from Nedbank spin-off

*  Dutch court to take on shareholders' case against Steinhoff

*  South Africa's rand rallies on EM breather ahead of Fed, stocks fall

*  Interest rate cuts would hurt South African economy, central banker says

*  African airline Fastjet reveals urgent need for more cash

*  Hyatt Hotels to more than double its Africa hotels by 2020

*  OPEC will balance oil markets, but spare capacity limited: Nigerian official

*  South Africa's Q2 formal employment down 0.7 percent quarter/quarter

*  Rupert Murdoch ends Sky association with Comcast stake sale

*  Federal Reserve raises interest rates by another 0.25%

*  Mercedes-Benz owner Daimler gets first non-German boss

*  Trump at UN: Who does business with Iran?

*  Ryanair to cancel 190 flights on Friday across Europe

 <mailto:info at bulls.co.zw> 

Moody's: "Very small" S.Africa stimulus to have little impact

LONDON (Reuters) - The tiny size of South Africa’s stimulus programme means it is unlikely to have much of an impact, with fiscal constraints preventing the government from pumping in much new money, Moody’s lead analyst for the country said on Wednesday.

After Africa’s most industrialised economy tipped unexpectedly into recession in the second quarter, President Cyril Ramaphosa on Friday announced a multi-billion-dollar stimulus to make good on a pledge to revive the economy.

He said 50 billion rand ($3.5 billion) of “reprioritised expenditure and new project-level funding” would be used to boost growth and create jobs, and the government would also launch a 400 billion rand medium-term infrastructure fund.

Lucie Villa, also a Moody’s vice president, said she expected the government to flesh out details of the stimulus plan and how it would translate into actual spending in a budget policy statement scheduled for Oct 24.

“In size (50 billion rand) it is very small, it is around 1 percent of GDP. I am not sure how much impact you can expect from a programme of this size but would expect it to likely be limited,” Villa told Reuters in an interview on the sidelines of a conference.

“Given their fiscal constraints they don’t have the room to do outright fiscal stimulus, so this could be repurposed, or not all government spending.”

Moody’s is the last of the “big three” international agencies to rate South Africa’s long-term foreign-currency debt at investment grade.

It said this month there was little chance it would cut the country to ‘junk’ this year, offering Ramaphosa some respite from a run of bad news on the economy.

Villa confirmed Moody’s outlook remained stable, but predicted a shortfall in tax revenues would increase. “We had 0.2 percent of GDP tax revenue shortfall, so it will probably be a bit more,” she said.

The biggest challenge for South Africa remained its low economic growth and the underlying factors driving this, such as a rigid labour market, said Villa. “In terms of the biggest risk, it is still state-owned enterprises.”

 <mailto:info at bulls.co.zw> 

World Bank approves first grants to Somalia in 30 years

NAIROBI (Reuters) - The World Bank has approved $80 million in grants to Somalia to fund public finance reforms, marking the first disbursement to the government of the conflict-ridden country in 30 years, the bank said.

The Washington-based lender, which suspended ties with the country when war broke out in 1991, resumed support for Somalia in 2003, at the time saying it would focus on HIV/AIDS and livestock programmes with other organisations, but it has not approved any direct lending to the government to date.

It reopened direct ties with Somalia’s federal government in early 2013.

Its board had approved financing of $60 million for the Recurrent Cost and Reform Financing Project and $20 million for the Domestic Revenue and Public Financial Management Capacity Strengthening Project, it said in a statement late on Tuesday.

“They represent a milestone in Somalia’s development and reconstruction,” the bank said.

The bank said it would also work with the government in Mogadishu to improve services like education and healthcare, access to clean water, energy and finance for its citizens - under a programme called Country Partnership Framework.

Somalia’s economy was forecast to grow by an average of between 3.5 and 4.5 percent annually in 2019-2022, when the partnership on social services will run, the bank said.

“While agriculture is key to the economy, it remains vulnerable to shocks. As such, services will continue to be a main driver of growth, especially in the financial, transport and communication and trade sectors,” the lender said.

Hit by decades of conflict at the hands of clan militias, Somalia has over the past several years also been pummelled by an insurgency by al Qaeda-linked al Shabaab, famines and maritime piracy.

Parts of the country are still plagued by militant violence, but a degree of stability in the capital in recent years has begun to draw investment from locals and Somalis living abroad.

Last week, the International Monetary Fund said it expected the economy to grow by 3.1 percent this year from 2.3 percent in 2017, as it recovers from drought last year.

(This story corrects to show Somalia is receiving grants, not loans)

Old Mutual shareholders to get $3.5 bln from Nedbank spin-off

JOHANNESBURG (Reuters) - South Africa’s Old Mutual Ltd said on Wednesday its shareholders would get 50 billion rand ($3.5 billion) from the spin-off of a majority stake in Nedbank and dividends.

The 173-year-old group has been dismantling its conglomerate structure, created after a series of acquisitions, since it moved its headquarters and primary listing to London in 1999.

Chief Executive Bruce Hemphill set the break-up in motion in 2016, saying the company’s four main businesses - a U.S. asset manager, a British wealth manager, an African financial services division and a South African bank - would be valued more highly by investors as separate entities.

Old Mutual holds 52 percent of Nedbank and after the spin-off on Oct. 15 will hold around 19.9 percent, it said in a statement.

“The Old Mutual board believes that the Nedbank Unbundling continues to be in the best interests of Old Mutual shareholders as it allows investors to participate in the substantially different investment cases of Old Mutual and Nedbank,” it said.

Shareholders will receive 43.2 billion rand from the spin-off and 7.1 billion rand in interim and special dividends that will be paid on Oct. 16, the company said.

They will get approximately 3.2 Nedbank shares for every 100 Old Mutual shares they own.

Shares in Old Mutual were up 1.56 percent to 30.68 rand at 1331 GMT, while Nedbank edged 0.34 percent lower to 262.31

The Nedbank spin-off is the final step in the group’s break up, which was mostly completed in the six months ended June 30.

The group returned to its South African roots in June when it listed its African financial services business in Johannesburg.

($1 = 14.2981 rand)

Dutch court to take on shareholders' case against Steinhoff

AMSTERDAM (Reuters) - Litigation by shareholders against South African retailer Steinhoff will proceed in the Netherlands, a Dutch court said on Wednesday.

The court said it would hear complaints by shareholders who say that Steinhoff, registered in the Netherlands, misled them by stating false information in its 2015 and 2016 accounts.

Steinhoff late last year uncovered accounting irregularities that sent its shares crashing and nearly tipped the company into bankruptcy.

The class action suit was brought on by the Dutch shareholders association VEB in February, and is aimed at compensating Steinhoff investors worldwide for the more than 14 billion euros ($16.5 billion) in market value that disappeared after the accounting irregularities surfaced in December 2017.

The court dismissed claims by Steinhoff that a German court case started earlier this year should take precedence over the Dutch case. The German case deals with the complaints of one shareholder, while the VEB represents a broad base of investors from the Netherlands and beyond, the court said.

Steinhoff has until Nov. 7 to respond to the court’s decision.

The VEB has also taken legal action against accountants Deloitte & Touche for alleged failures in the vetting of the books of Steinhoff.

($1 = 0.8503 euros)

South Africa's rand rallies on EM breather ahead of Fed, stocks fall

JOHANNESBURG (Reuters) - South Africa’s rand powered to its firmest since late August on Wednesday as risk assets rallied despite expectations the Federal Reserve would raise interest rates and draw a line under a decade of accommodative monetary policy.

The bourse was led lower by bullion stocks as gold prices took a hit from dollar gains against other currencies.

At 1500 GMT the rand was 0.92 percent firmer at 14.2125 per dollar, its strongest level since August 29.

The rand has shaken off the lukewarm reception to President Cyril Ramaphosa’s multi-billion-dollar stimulus plan announced on Friday, rallying with other emerging currencies as global risk aversion subsided.

The small size of the stimulus programme means it is unlikely to have much of an impact, Moody’s told Reuters in an interview a day after Fitch raised similar opinion.

“Investors have begun searching for value in emerging markets, as the degree of risk premium seems to be well embedded in EM assets after the turmoil experienced so far this year in the EM complex,” said Nedbank analysts Mehul Daya and Walter de Wet in a note.

A climb to two-month highs for Chinese shares and talk of an IMF deal for Argentina also helped steady sentiment towards emerging currencies.

In fixed income, the yield on the benchmark government bond due in 2026 fell 5 basis points to 9.065 percent.

In equities, the broad all-share index was down 0.55 percent at 56,570.15 points while the top 40 index was 0.59 percent softer at 50,361.86 points.

The gold index fell 3.25 percent with AngloGold Ashanti falling the most on the blue chip index, down 2.95 percent to 124.35 rand.

Gold prices slipped as the greenback strengthened ahead of the results of the Fed meeting.

Shares in Capitec Bank closed 1.87 percent firmer after the lender reported a 20 percent rise in half-year profit, helped by strong client growth.

“A very decent set of results. The only concern was that they have not really grown in the lending side of things but the transaction side of business is doing exceptionally well,” said Ryan Woods, an equities trader at Independent Securities.

Interest rate cuts would hurt South African economy, central banker says

JOHANNESBURG (Reuters) - South Africa’s central bank should stick to targeting inflation rather than trying to stimulate the economy, because an abrupt change in policy would damage its credibility and push up prices, a policymaker at the bank said late on Tuesday.

The speech by Deputy Governor Francois Groepe came after the ruling African National Congress party released and then retracted a statement last week that said “monetary policy was critical in driving growth, creation of jobs and reduction of the capital costs in the economy”, apparently calling for rates to be lowered.

Last week, the Reserve Bank left rates unchanged at 6.5 percent for a third straight meeting, citing risks to inflation posed by a weakening currency.

The temptation to reduce rates was understandable, Groepe said in his speech, but the effect on growth would be small and temporary and eventually cause consumer prices to rise.

“The unexpected monetary policy shock will dent the credibility of the central bank, as economic agents will be forced to reassess the central bank’s reaction function,” Groepe said in the speech, posted on the bank’s website on Wednesday.

“This, in turn, will result in higher inflation expectations, while the medium-term growth prospects will, at best, be no better than they were before,” Groepe said.

The central bank targets an inflation rate of 3 to 6 percent. The rate unexpectedly fell to 4.9 percent in August from 5.1 percent in July.

It has cut rates only once in the past 12 months, attracting some criticism from political quarters as well as trade union federation Cosatu, an ANC ally.

South Africa’s economy slumped into recession in the second quarter, weakening a rand already battered by an emerging-market selloff. Business confidence, which rose after Cyril Ramaphosa was elected president in February, also took a hit.

Last week, Ramaphosa announced a multi-billion-dollar stimulus programme, earmarking funds for job creation and infrastructure development, in an effort to revive the ailing economy.

African airline Fastjet reveals urgent need for more cash

(Reuters) - Fastjet Plc’s shares shed more than half of their value on Wednesday after the African budget airline said it needed more cash within a month for it to continue operating.

Fastjet, launched in 2012 and modelled on the likes of no-frills airlines easyJet Plc and Ryanair Holdings Plc, has been running short of cash for more than two years and it was unclear if investors will continue to back it.

“The company is currently in active discussions with its major shareholders regarding a potential equity fundraising, in the absence of which the group is not able to continue trading as a going concern,” the airline said in a statement.

Fastjet’s shareholders include activist M&G Investment, Janus Henderson and South African carrier Solenta. It was founded by Haji-Ioannou, the son of a shipping magnate.

Fastjet added that talks with some shareholders had been positive and discussions were ongoing, though it did not guarantee success.

The budget airline has offered shares for cash at least twice in the last three months to meet its cash requirements, including last year to expand in South Africa and Mozambique.

In September last year, it looked to raise $44 million but could only manage to raise $28 million.

Fastjet, which operates in Tanzania, Zambia, Zimbabwe, Mozambique and South Africa, said it required more money by the end of October and said it was considering pulling out of its largest market in Tanzania.

Fastjet’s shares, which have fallen over 16 percent this year, were down nearly 38 percent at 1231 GMT.

The airline also posted a bigger half-year operating loss of $14.6 million on Wednesday, from a loss of $13.2 million last year.

The company said it was evaluating its Tanzanian operations and could cease operations in the country. Fastjet said the impact on the country’s operations from changes in the competitive landscape had been significant.

Tanzania, where Fastjet has struggled in the face of tough conditions, brings in almost 70 percent on Fastjet’s revenue, according to Thomson Reuters Eikon data.

Its operations in the country include domestic routes from its Dar es Salaam base to Kilimanjaro, Mbeya, and Mwanza with international routes to Tanzania from Lusaka in Zambia and Harare in Zimbabwe.

Hyatt Hotels to more than double its Africa hotels by 2020

NAIROBI (Reuters) - Hyatt Hotels Corp plans to more than double its hotels in Africa by 2020 to capitalise on improved travel links and robust economic growth that is boosting demand for rooms, the company’s regional vice president said on Wednesday.

Hyatt currently has nine hotels in Africa but lags far behind rivals such as AccorHotels, which has more than 100 hotels in Africa and has earmarked $1 billion to invest in expansion on the continent.

Another rival Radisson has 86 hotels and almost 18,000 rooms in operation and under development after rapid Africa expansion. A senior Radisson executive for Africa told Reuters last year it planned to have 120 hotels by 2021.

“We are more than doubling our presence on the continent by 2020,” Kurt Straub, Hyatt’s vice president of operations for Middle East and Africa, told Reuters.

“Air travel has improved tremendously, it has become much more open, people are freer to travel. Hyatt is very keen to go where our customers want to go,” said Straub, speaking to Reuters on the sidelines of an event in Nairobi to announce the opening of Hyatt’s first hotel in Kenya in 2020.

Chicago-headquartered Hyatt’s existing hotels in Africa include one in Senegal and South Africa, where it has the luxury Hyatt Regency brand in Johannesburg.

Straub said the new hotels would include a Hyatt Regency in Addis Ababa, Ethiopia, and another in Arusha, a northern Tanzanian city popular with holiday-makers and conference organisers.

The Hyatt hotel in Nairobi will have 233 rooms, including some under the Hyatt Place brand, aimed at shorter stays, and 60 Hyatt House apartment style suites for longer stays.

Straub did not say how much Hyatt was investing in the project, which is a partnership with a local company, only saying it was a “sizeable investment”.

“We are very careful in how we grow. We don’t want to grow for the sake of growing,” said the 25-year Hyatt veteran, who took over his Dubai-based job in February.

“It is not about the quantity, it is about being in the right place at the right time with the right partner.”

Other big international hotel groups, including Radisson, Kempinski and Marriott, are estimated to have about a third of the available room capacity on the continent. The rest are independently-run hotels.

OPEC will balance oil markets, but spare capacity limited: Nigerian official

SINGAPORE (Reuters) - The Organization of the Petroleum Exporting Countries (OPEC) will act to balance the market after oil prices hit their highest in four years, but its options may be limited by available spare capacity, a Nigerian oil industry official said on Wednesday.

“It’s obvious that if you have high prices it’ll affect demand, so you have to do some market balance,” Malam Mele Kyari, head of crude oil marketing at Nigeria’s state oil firm NNPC and also the country’s OPEC representative, told Reuters.

“OPEC will do everything to stabilise, to balance the market but I’m sure you’re also aware that there’s a limit to what they can do. You must have the spare capacity,” Kyari said.

Oil prices surged this week on uncertainty over the global supply outlook following U.S. sanctions on Iran’s oil exports and also as Saudi Arabia and Russia ruled out any immediate boost to output.

Kyari said Nigeria planned to increase its crude oil, condensate output by 100,000 barrels per day by the end of the year, up from about 2 million bpd currently.

The country’s current crude oil production is about 1.7 million bpd, he said.

In 2019, the African producer is aiming for an average output of 2.3 million bpd by boosting output from existing fields as well as starting new production from an ultra deepwater field, Kyari said.

Located some 130 kilometres off Nigeria’s coast at water depths of more than 1,500 metres, the Egina oilfield is expected to start production in December and its output could peak at 200,000 bpd.

Kyari was in Singapore to launch the new Egina crude grade with field operator French oil major Total at APPEC.

The crude has an API gravity of 27.3 degrees and has a sulphur content of 0.165 percent, a provisional crude assay from Total showed.

The grade has a higher yield of gasoil and vacuum distillates compared with other products, according to the assay.

South Africa's Q2 formal employment down 0.7 percent quarter/quarter

JOHANNESBURG (Reuters) - Employment in South Africa’s non-agriculture sector inched 0.7 percent lower in the second quarter of 2018 to 9.7 million people compared with the previous three months, Statistics South Africa said on Wednesday.

Rupert Murdoch ends Sky association with Comcast stake sale

Rupert Murdoch's 21st Century Fox will sell its 39% stake in Sky to Comcast, ending the media mogul's association with the satellite broadcaster after almost three decades.

It had been unclear whether Fox would retain its stake in Sky after Comcast won a £30bn bidding war for the satellite broadcaster on Saturday.

Fox has now decided to accept Comcast's £17.28 a share offer, which values the Sky stake at £11.6bn.

Fox had sought control of Sky itself.

However, it lost out after bidding just £15.67 a share in the auction conducted by the UK Takeover Panel - a rare event in UK deal-making.

Earlier this year, Fox had seemed likely to win control of the 61% of Sky it did not already own until Comcast stepped in with a rival bid.

What next for Murdoch after Sky deal?

Comcast outbids Fox with £30bn Sky bid

Disney in $52bn Fox deal

In July, Fox raised its offer to £24.5bn, but it was then trumped by a £26bn bid from the NBC owner.

Comcast ultimately offered a further £4bn in the auction to ensure it emerged victorious in the battle for Sky, one of the Europe's most profitable media companies.

Fox had said on Saturday it was "considering its options" for its 39% take in Sky, but many analysts had expected it to sell to Comcast.

The battle for Sky was part of a bigger deal struck late last year by 87-year-old Mr Murdoch to sell Fox's entertainment assets, such as its film studio, to Walt Disney.

Disney said on Wednesday it had agreed to Fox's decision to sell the 39% Sky stake.

Disney said the sale, along with offloading regional networks in the US belonging to Fox Sports, would cut debt and help boost investment in its streaming service due to launch late next year.

Sky's Chief Executive Jeremy Darroch said: "Nearly 30 years ago Rupert Murdoch took a risk to launch Sky and in the process changed the way we watch television forever.

"With [21st Century Fox] announcing its intention to sell its shares to Comcast, we close one chapter while simultaneously opening another."--BBC

Federal Reserve raises interest rates by another 0.25%

The US Federal Reserve has raised interest rates again.

Officials increased the target for the bank's benchmark rate by 0.25%, to a range of 2%-2.25%. A majority of members also said they expect another rise before the end of the year.

The move marks the bank's eighth rate rise since 2015, continuing its policy of gradual rate rises.

Now investors are looking for clues about how high the Fed might go or signs its pace could accelerate.

So far, US interest rates remain relatively low, reflecting the Fed's decision to lower them dramatically during the financial crisis in an effort to encourage borrowing and boost economic activity.

But Mr Powell and other economists say the economy is strong enough now that such stimulus is no longer necessary - a shift the Fed marked on Wednesday by ending its description of its policy as "accommodative".

Wednesday's rate rise "yet again demonstrates the Fed's faith that it can continue to raise rates gradually without slowing economic growth," said Kully Samra, UK managing director of Charles Schwab.

US gross domestic product grew at an annual pace of more than 4% in the second quarter of this year, and the unemployment rate continues to hover below 4% - near historic lows.

Price inflation, which had been sluggish, has also started to pick up, hitting the Fed's 2% target - and exceeding it by some measures.

Officials now expect the US economy to grow by 3.1% this year - faster than the 2.8% forecast in March, according to projections released after the meeting.

Their predictions for inflation remained unchanged at around 2%.

The projections show Fed officials expect three rate rises in 2019 and one more in 2020, which would lift the bank's important federal funds rate to about 3.4% that year.

Higher interest rates make borrowing more expensive, slowing economic activity and curbing price inflation.

But analysts worry that raising rates too quickly could tip the economy into recession.

They say the Fed's position is particularly perilous, given other risks to the economy, including shifting trade policy.

Robert Sierra, director at Fitch Ratings said: "The Fed continues to be very much focused on strong domestic conditions and neither trade concerns nor recent emerging market turbulence affected today's decision."--BBC

Mercedes-Benz owner Daimler gets first non-German boss

Daimler, the German car maker that owns Mercedes-Benz, will be run by a non-German for the first time next year.

Dieter Zetsche, 65, will be replaced by Ola Kaellenius, a 49-year-old Swede, as chief executive in a succession plan announced on Wednesday.

The moves come as Daimler and the German car industry grapple with the fallout from the diesel emissions cheating scandal.

It is also striving to adapt to the new era of electric and self-driving cars.

Mr Kaellenius, who often wears jeans and trainers and attends tech conferences, will be the first Daimler boss without a mechanical engineering background.

After studying finance and accounting at a Swiss university and international management at the Stockholm School of Economics, Mr Kaellenius joined Daimler in 1993.

Car makers face diesel emissions probe

Daimler races to keep up on driverless cars

He has introduced Silicon Valley management techniques at the carmaker, breaking down hierarchies and encouraging a more experimental approach to developing new products.

The Swede, who oversees Daimler's research and development division, has also worked in the company's British and American operations as well as the Stuttgart headquarters.

Daimler chairman Manfred Boschoff said Mr Kaellenius was a "recognised, internationally experienced and successful Daimler executive".

Mr Zetsche will step down as chief executive - a role he has held since 2006 - following the annual meeting in December 2019.

He will become chairman from 2021 after a mandatory two-year break, if his appointment is approved by shareholders.

Under Mr Zetsche's leadership Mercedes has launched a series of new models that helped the company overtake rivals BMW and Audi, a VW brand, to become the world's biggest luxury carmaker by sales in 2016.

Ingo Speich, a fund manager at Union Investment, said: "It is good that Daimler is providing clarity on the succession issue early on."

Shares in Daimler were down 1% at €54.19 in Frankfurt on Wednesday following the announcement, valuing the company at €60bn. However, the stock was just above €70 a year ago.

Last week it emerged that Daimler and rival German carmakers BMW and Volkswagen will face an EU inquiry for allegedly conspiring to restrict diesel emissions treatment systems.

The European Commission said it was investigating whether they agreed to limit the development of systems to reduce harmful emissions.

The announcement followed raids of the companies' offices last year.

In June the company warned that profits this year would be slightly lower than expected due to trade tensions between the US and China.

It also blamed the cost of recalling close to 800,000 cars in Europe that were found to be fitted with software that masked emissions.--BBC

Trump at UN: Who does business with Iran?

President Trump, in an address at the UN general assembly, asked all nations to isolate Iran.

The US has recently reinstated tough economic sanctions which, said the president, will remain in place as long as Iranian aggression continues.

Sanctions were imposed after the US pulled out of the six-country nuclear deal earlier this year.

The remaining countries in the agreement have stuck together - vowing to keep the deal alive and to continue economic relations with Tehran.

So the stakes are high for any company wishing to do business in Iran - stay involved and risk severe penalties for violating US sanctions, or withdraw and lose the benefits from investment in an emerging market with huge potential.

So who's still doing business with Iran and who isn't?

The 2015 nuclear accord between Iran and six world powers - US, Russia, China, UK, France and Germany - lifted international sanctions on Iran's economy, including those on oil, trade and banking sectors as well as on items such as pistachios and carpets.

In exchange, Iran agreed to limit its nuclear activities.

Iran is one of the world's biggest exporters of oil, so this sanctions relief gave its economy a significant boost.

Business channels with Tehran were reopened in several industries - foreign healthcare providers, car manufacturers, financial services and aviation companies all began exploring business opportunities.

These included car-makers Volkswagen, from Germany, and France's Renault. French energy giant Total won a billion dollar deal to develop an oil field, and Germany's Siemens secured a contract to upgrade Iran's railway network.

However, new economic ties were thrown into doubt after the US left the nuclear deal in May 2018.

With the announcement of the new sanctions, President Trump said anyone doing business with Iran "will not be doing business with the United States".

The US sanctions targeted the country's oil, shipping and banking institutions, gold and precious metal exports.

The threat of punishment has led some companies to pause business operations in Iran - others have pulled out altogether.

Total announced it would pull out of the billion-dollar deal it made with both Iran and the Chinese company CNPC. The partnership was to develop a vast natural gas field.

The shipping company Maersk announced it would not enter into any new contracts.

Renault had agreed to build a new plant in Iran, but after the new sanctions were imposed, senior figures at the company told analysts: "As we comply fully with US sanctions, it's likely that our development would be put on hold."

General Electric (GE) and its subsidiary, Baker Hughes which made deals to provide oil and gas infrastructure products to Iranian companies said they will cease operations in Iran in accordance with US law.

Boeing BA, which had a contract for planes with two Iranian airlines, announced it will not be delivering the aircraft to Iran in light of the new sanctions.

The Indian company Reliance, which owns a large oil-refining complex, will reportedly no longer accept crude oil imports.

Siemens has said it will no longer take new orders from Iran.

The EU's response

The EU intends to create a mechanism that will enable legal trade with Iran without encountering US sanctions. This will preserve oil and other business deals.

EU foreign policy chief Federica Mogherini announced the plan after talks at the UN with the remaining five members of the accord.

A statement said they were determined to "protect the freedom of their economic operators to pursue legitimate business with Iran".

A "blocking statute" will also enable EU-based firms to recover damages resulting from the US sanctions.

But a challenge for European governments is to persuade companies to carry on doing business.

The way the sanctions are written means any company that trades with Iran that has any link to the US will face financial penalty, says Scott Lucas, a professor of international politics at Birmingham University. With a financial system dominated by the US, most companies will be vulnerable.

However, there are signs that some companies will maintain their business dealings for the time being.

Reuters has reported that China intends to stick with imports of Iranian oil, withstanding pressure from the US to cut ties.

Working with firms outside the Western financial system, like those in China, may make it easier for Iran to continue doing business by using a currency other than the dollar, says Mr Lucas. However, he says, it is very difficult to shift a currency like the Chinese yuan or the Russian rouble compared to the dollar which most countries use to trade.--BBC

Ryanair to cancel 190 flights on Friday across Europe

Ryanair says it has cancelled 190, or about 8% of its 2,400 scheduled flights this Friday.

The airline has adjusted its schedule in the face of strike action being taken by unions in Spain, Belgium, Holland, Portugal, Italy and Germany.

The Irish airline says this will affect 30,000 passengers, who have been notified by text and email.

The long-running industrial action by Ryanair staff centres on working conditions.

Ryanair says it "sincerely regrets these unnecessary customer disruptions", which it blames on agitation from competitor airlines.

Workers based in countries other than Ireland are unhappy that Ryanair has been employing them under Irish legislation.

One in six flights cancelled in Ryanair pilot walkout

Michael O'Leary may leave within five years

Staff claim this creates significant insecurity for them, blocking their access to state benefits in their home country.

Employees say they are compelled to receive their pay in Irish bank accounts, which affects their credit rating in their home country. Any queries they have must be made to an Irish number, which is more expensive than a local call.

Ryanair said it has agreed to move to local contracts, law and taxation as quickly as possible next year, but with certain conditions.

The company said on Tuesday it had signed deals with three cabin crew unions in Italy to provide employment contracts under Italian law.

Ryanair said it had made significant progress in recent weeks with union negotiations, which include pilot and/or cabin crew agreements in Ireland, UK, Italy and Germany.

It added that, in the past two weeks, it had written to the pilot unions in Belgium, Holland, Spain, Portugal and Germany inviting them to negotiate similar agreements to that reached in Ireland for both pilots and cabin crew.--BBC

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Hippo

AGM

Meikles

26/09/2018 12PM

Bindura

AGM

Chapman Golf Club, Eastlea

27/09/2018 9AM

CBZH

interim dividend of 0.5c per share record date

28/09/2018

Hippo

final dividend of 2c per share record date

28/09/2018

Star Africa

AGM

45 Douglas Road, Workington

28/09/2018 11AM

 <mailto:info at bulls.co.zw> 

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

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