Major International Business Headlines Brief::: 28 September 2018

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Major International Business Headlines Brief::: 28 September 2018

 


 

 


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*  South Africa's mining employees, communities to get free stake under new charter

*  Polish miner JSW to work with Sasol on new plant

*  South Africa's Eskom gets $205 mln loan from African Development Bank

*  Morocco’s BCP Bank's first half net profit rises 1.8 percent

*  South African rand falls in early trade, focus on mining charter

*  Half of South Africa's stimulus plan to come from spending shift - finmin

*  South Africa's Netcare sees lower hospital margins, shares fall

*  IMF sees Ethiopian economic growth rising to 8.5 pct in 2018/19

*  Ghana, Ivory Coast cocoa plan to have limited effect on world prices - report

*  South Africa's August producer inflation rises to 6.3 percent year-on-year

*  Regulators accuse Tesla's Elon Musk of securities fraud

*  Petrobras hit with $853m corruption fine

*  Ryanair cancels 250 flights across Europe on Friday

*  Italy's populists agree budget to 'abolish poverty'

*  BrewDog scraps deal with US beer firm over Trump offer

*  Amazon to open 'four-star' store in New York

*  Bonmarché shares sink on profit warning

 


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South Africa's mining employees, communities to get free stake under new charter

PRETORIA (Reuters) - South Africa unveiled a new regulatory charter for its mining industry on Thursday, a crucial step to attracting further investment to a sector laid low by depressed prices, soaring costs and murky policy.

 

It is part of an affirmative action drive to reverse black people’s exclusion from the mainstream economy under apartheid and pointedly targets the mining industry, which accounts for about 8 percent of the country’s gross domestic product now, but laid the foundations for Africa’s most industrialised economy.

 

Presented by Resources Minister Gwede Mantashe, the third version of the charter requires miners to provide their local communities and employees with a free 10 percent stake, a policy some companies may be pressed to bear but which unions say is needed to secure social peace.

 

“Regulatory and policy uncertainty is removed. We have a duty now to mobilise investment into mining,” Mantsahe, a gruff former trade unionist and senior member of the ruling African National Congress (ANC), told a media briefing.

 

The charter raises the level of black ownership as expected to 30 percent from 26 percent while providing breakdowns on how the stakes should be divided, with 20 percent for black business interests and 5 percent each for communities and employees.

 

“The community/employee stake is a 10 percent investment in peace and stability. Current levels of mine community unrest and high number of industrial action creates a high level of instability,” Gideon du Plessis, the head of the Solidarity trade union which represents skilled workers, told Reuters.

 

Mining operations in the world’s top platinum producer which also exports gold, coal, diamonds and iron ore are flashpoints of social and labour unrest amid perceptions that the wealth flowing from the shafts does not benefit local communities.

 

For example, between the start of 2016 and April 2018, the eastern limb of the platinum belt was hit by over 400 incidents of social unrest impacting mining operations, according to data compiled by Anglo American Platinum.

 

The Minerals Council South Africa, which represents most of the country’s mining companies, said it would comment later after it has studied the document.

 

Among the controversial provisions in previous drafts that were dropped was one that would have required companies to pay 1 percent of earnings before interest, depreciation and amortisation to employees and communities if no dividends were paid for six years.

 

At the board level and among top management, the charter requires 50 percent black representation and 20 percent female representation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Polish miner JSW to work with Sasol on new plant

WARSAW (Reuters) - Poland’s JSW, the European Union’s biggest coking coal producer, said on Thursday it will cooperate with South African petrochemicals group Sasol on a project to launch a synthetic fuel plant in Poland.

 

“Poland is an ideal place for launching a coal to fuel plant. We have valuable coal deposits and a climate policy that affects coal usability,” JSW Chief Executive Daniel Ozon said in a statement.

 

Poland generates most of its electricity from coal and has to face rising costs of carbon emissions. It is also trying to reduce its reliance on gas supplies from Russia.

 

“We could say that Polish coal will make us less dependent on Russia,” Ozon said, adding that the establishment of a plant processing coal for gas and fuels was in line with the Polish government’s policies and interests.

 

JSW said that its representatives have just returned from Secunda in South Africa, where they visited Sasol’s plants and watched their technologies used in gas production from coal.

 

The next step would be signing an agreement between the companies on cooperation over the Polish planned plant, JSW said.

 

 

 

South Africa's Eskom gets $205 mln loan from African Development Bank

JOHANNESBURG (Reuters) - South African state-owned power firm Eskom will get a 2.9 billion rand ($205 million) loan from the African Development Bank to upgrade and expand its transmission network, the bank said on Thursday.

 

The loan will fund the construction of 555 kilometres of transmission lines in the KwaZulu-Natal and Mpumalanga provinces, as well as the upgrading of substation equipment.

 

Cash-strapped Eskom is struggling to emerge from a financial crisis characterised by declining electricity sales, shrinking cash flow and ballooning debt.

 

($1 = 14.0661 rand)

 

 

 

Morocco’s BCP Bank's first half net profit rises 1.8 percent

RABAT (Reuters) - Morocco’s Banque Centrale Populaire (BCP), one of the country’s biggest lenders, said on Thursday that its first half net profit rose by 1.8 percent due to improved operating risk management.

 

The bank, rated BBB+/B with a stable outlook by S&P Global Ratings, said in a statement that first half net profit attributable to shareholders was 1.6 billion dirhams ($170.5 million).

 

Net banking income grew 2 percent to 8.2 billion dirhams in the same period, versus a year earlier. Net operating income dropped 2.7 percent to 4.05 billion dirhams, while total assets posted a small rise of 0.16 percent to 381.2 billion dirhams.

 

The bank has 5.9 million clients in Morocco and branches in Europe and the Gulf collecting hard currency from the Moroccan diaspora. It said it has collected additional deposits worth 5 billion dirhams, giving it a 26.8 percent share of the Moroccan market.

 

On Tuesday, the bank said it had entered into exclusive talks with France’s cooperative lender BPCE to acquire majority stakes in banks in Cameroon, Madagascar, Tunisia and the Republic of the Congo.

 

Once completed, this acquisition would help BCP expand its branches in Africa to 17 countries.

 

 

 

South African rand falls in early trade, focus on mining charter

JOHANNESBURG (Reuters) - South Africa’s rand retreated early on Thursday as the dollar firmed after the latest U.S. Federal Reserve interest rate increase, while domestic investors awaited details of amendments to the mining charter.

 

The rand was 0.35 percent weaker at 14.1835 per dollar by 0702 GMT, having closed in New York at 14.1325.

 

The dollar index against a basket of six major currencies edged up by 0.4 percent to 94.574.

 

Minister of Mineral Resources Gwede Mantashe will brief journalists on amendments to the long-awaited mining charter on Thursday.

 

The mining charter - introduced to provide redress for the exclusion of black people in the mining sector under apartheid - could yet be subject to legal challenges if mining companies are unhappy with its contents after publication.

 

The rand is expected to trade at 14.0500 to 14.3500 to the dollar on Thursday, NKC African Economics wrote in a note.

 

Investors were also awaiting the release of August’s producer prices inflation data at 0930 GMT.

 

In fixed income, the yield on the benchmark government bond due in 2026 fell 2 basis points to 9.05 percent.

 

On the stock market, the Top-40 index was down 0.74 percent while the broader all-share fell 0.62 percent in early trade.

 

 

 

Half of South Africa's stimulus plan to come from spending shift - finmin

NEW YORK (Reuters) - South Africa’s shifting budget priorities will provide roughly half of the 50 billion rand ($3.5 billion) in stimulus spending it plans to make by the end of its fiscal year in March, Finance Minister Nhlanhla Nene told Reuters.

 

The rest of the fund would come from internal development finance institutions (DFI), he said on Wednesday, outlining for the first time the basic structure of the fund.

 

Nene said half of the funds would come from reprioritizing money away from underperforming government programs and the rest from internal DFIs.

 

“We don’t want whatever is on the chopping block to be announced before the process has concluded,” he said after an investor forum on the sidelines of the United Nations General Assembly meeting in New York.

 

The government has said it would also launch a 400 billion rand “medium-term” infrastructure fund, that would be spent over three years, Nene noted.

 

South Africa, under President Cyril Ramaphosa, who spoke at the forum, has launched a campaign to revitalize its economy which has fallen into a recession and has a 27 percent unemployment rate.

 

His stimulus plan has been met with skepticism as it does not include increased spending or borrowing to meet the goal of creating jobs and funding infrastructure programs.

 

Nene said that while opposition lawmakers are skeptical, the reception from the business sector at home and in New York has been positive.

 

LAND AND MINING REFORMS

In February, Ramaphosa succeeded Jacob Zuma, whose tenure was plagued by scandal. But having stagnated for a decade, Africa’s most industrialized economy slipped further in the second quarter, entering recession for the first time since 2009. The rand has weakened along with other emerging market currencies.

 

Land and mining ownership reforms were among the main concerns voiced by investors in New York.

 

Ramaphosa sought to reassure the audience that land reform “is not going to be a land grab”. He said there have been over 600,000 submissions on how to proceed with reducing the concentration of land ownership.

 

“This will lead to a process of evaluation of proposals,” he said, emphasizing land ownership was critical to the life of South Africa and its people.

 

On mining, Nene acknowledged there was “an acrimonious relationship” between the government and the mining houses”.

 

But he said a new mining charter is forthcoming, perhaps by the end of November, and a law is being rewritten to remove oil and gas extraction from mineral mining, a major sticking point.

 

“We are now going to separate it,” Nene said.

 

($1 = 14.1300 rand)

 

 

 

South Africa's Netcare sees lower hospital margins, shares fall

JOHANNESBURG (Reuters) - South Africa’s Netcare expects the core profit margin at its biggest division, hospital and emergency services, to fall 30-50 basis points this fiscal year due to a weak economy, it said on Thursday, sending its shares to a seven-month low.

 

In its last financial year, South Africa’s second-largest private hospital operator made a margin on earnings before interest, tax, depreciation and amortisation (EBITDA) of 21.1 percent.

 

The company reported “lower demand from private self-pay patients and a decline in foreign patients resulting from more stringent credit control measures applied to these patients.”

 

In its primary care division, EBITDA margins are expected to remain broadly in line with last year’s 15.2 percent, it said.

 

Netcare’s shares fell as much as 13 percent to a level last seen in mid-February.

 

Netcare has been in Britain for a decade via a controlling stake in BMI Healthcare but said in March it would exit the country because of difficult trading conditions and belt-tightening by Britain’s National Health Service.

 

BMI Healthcare is nearing a 2 billion pounds ($2.6 billion) restructuring deal that could cut millions of pounds from its annual rent bill, a person familiar with the matter said on Tuesday.

 

“Netcare’s disposal plan continues, although no disposal transaction has yet been concluded,” Netcare said.

 

In South Africa, Netcare expects to register a 6 percent rise in patient days, which represent customer stays in its hospitals.

 

However, the primary care division has experienced a decline in the number of patient visits at Medicross GP and dental clinics.

 

($1 = 0.7623 pounds)

 

 

 

IMF sees Ethiopian economic growth rising to 8.5 pct in 2018/19

NAIROBI (Reuters) - Ethiopia’s economy is forecast to expand 8.5 percent in the July 2018-June 2019 period, from 7.5 percent in the previous fiscal year, the International Monetary Fund said on Wednesday.

 

In its first assessment since Prime Minister Abiy Ahmed took office in April, the IMF said Ethiopia was benefiting from easing uncertainty and improved domestic and foreign investment.

 

Abiy has signed a peace deal with neighbour Eritrea, lifted a state of emergency and promised to partially open up the government-dominated economy by attracting foreign capital to the state telecoms company and airline.

 

Eritrea and Ethiopia have also restored diplomatic ties, reopened borders and started flights.

 

“Growth is expected to step up in 2018/9 ... supported by stronger confidence as the uncertainty of the previous year recedes, and the availability of domestic and foreign direct investment improves,” Julio Escolano, head of an IMF team that visited Ethiopia to make the assessment, said in a statement.

 

“The authorities’ strategy to shift the engine of economic activity to private sector development while the public sector consolidates is appropriate to maintain strong growth.”

 

Ethiopia has said it will open its logistics sector to foreign investors but cap their participation.

 

The EPRDF coalition, in power since ousting a military junta in 1991, aims for Ethiopia to reach middle-income status by 2025 and is pursuing manufacturing-led industrialisation that has involved building roads, a railway, and industrial parks - as well as mounting debt.

 

“At the same time, measures to reduce public sector borrowing and bring inflation back to target need to be intensified, as external imbalances and indebtedness remain a source of macroeconomic risk,” Escolano said.

 

 

Ghana, Ivory Coast cocoa plan to have limited effect on world prices - report

ACCRA (Reuters) - Plans by the world’s top cocoa growers Ivory Coast and Ghana to harmonise bean prices are unlikely to have much effect on world markets because of differences between their marketing systems and minimal domestic processing, Fitch Solutions analysts said.

 

The two countries account for about 60 percent of global output but exert limited influence over international prices, which have stayed low in recent years due to overproduction.

 

In response, they struck a deal this month to coordinate their farmgate prices for the upcoming October-to-September growing season. The collaboration is meant to emulate the OPEC oil cartel.

 

But a report by Fitch Solutions, a unit of ratings agency Fitch, said that would be difficult to achieve, citing wide differences in how Ivory Coast and Ghana export their crop, most of which leaves West Africa in a raw or semi-finished state.

 

“Though the countries’ influence on global supply and international trade is substantial ... various structural barriers will inhibit their ability to manipulate the cocoa market,” the report said.

 

Talks between Ivory Coast and Ghana followed intense market volatility over the last two years. Ivory Coast was forced to cut farmgate prices sharply last season while Ghana incurred losses of at least 2 billion cedis ($410 million).

 

In order to effectively harmonize prices, Fitch Solutions said, one of the countries would need to overhaul its market structure, but neither side has indicated it is prepared to make wholesale changes.

 

Ivorian farmers sell cocoa to international producers such as Barry Callebaut through state-organised auctions, meaning local prices are relatively responsive to global prices changes.

 

In contrast, Ghana’s Cocobod buys the beans at a price set at the start of the season, which prevents farmers from selling to other buyers.

 

The African Development Bank last year agreed to provide $1.2 billion to finance the harmonisation plan, which includes construction of modern storage facilities, farm rehabilitation and disease control.

 

 

South Africa's August producer inflation rises to 6.3 percent year-on-year

JOHANNESBURG (Reuters) - South Africa’s producer price inflation (PPI) rose to 6.3 percent year-on-year in August, its highest level since December 2016, compared with 6.1 percent in July, the statistics agency said on Thursday.

 

On a month-on-month basis, PPI was unchanged at 0.6 percent from the previous month, Statistics South Africa said.

 

Percentage changes:

 

August August July July

 

y/y m/m y/y m/m

 

Final manufactured goods 6.3 0.6 6.1 0.6

 

Intermediate manufactured goods 5.9 0.7 5.5 1.4

 

Electricity and water 6.5 -0.7 7.8 8.4

 

Mining and quarrying 6.3 0.8 9.6 1.9

 

Agriculture, forestry and fishing 2.0 -0.1 0.8 0.3

 

 

Regulators accuse Tesla's Elon Musk of securities fraud

The Securities and Exchange Commission has filed a lawsuit accusing Tesla boss Elon Musk of securities fraud.

 

The US financial regulator says Mr Musk's claims that he had secured funding to take the electric carmaker private were "false and misleading".

 

It is seeking to bar Mr Musk from acting as an officer or director of a publicly traded company.

 

Mr Musk called the action "unjustified" saying he acted in the "best interests of truth, transparency and investors".

 

"Integrity is the most important value in my life and the facts will show I never compromised this in any way," he said in a statement.

 

Mr Musk startled the business world last month when he took to Twitter to announce that he was considering a plan that would de-list the company from the stock exchange.

 

He wrote he had "funding secured" for the proposal, which would value Tesla at $420 per share.

 

The statements "created the misleading impression that taking Tesla private was subject only to Mr Musk choosing to do so and a shareholder vote", according to the SEC complaint, which was filed on Thursday in federal court in New York.

 

"In truth and in fact Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source," it said.

 

The 7 August tweets took even people within the company by surprise.

 

"Was this text legit?" the firm's head of investor relations wrote to Mr Musk's chief of staff, the complaint says.

 

'Significant confusion'

Tesla shares soared after Mr Musk's announcement, before retreating amid questions and doubts.

 

Weeks later, Mr Musk backed away from the plan, citing investor feedback.

 

The SEC, which is also seeking financial penalties, said his claims created "significant confusion" in the stock market and harmed investors.

 

"Taking care to provide truthful and accurate information is among a CEO's most critical obligations," said Stephanie Avakian, co-director of the SEC's enforcement division.

 

"That standard applies with equal force when the communications are made via social media or another non-traditional form."

 

The SEC complaint sent shares of the firm down by more than 10% in after-hours trade.

 

Analysis - Dave Lee, BBC North America technology reporter, San Francisco:

 

Whatever the state of mind Elon Musk was in when he announced he had "funding secured", it could end up costing almost everything he holds dear. It would be nobody's fault but his own.

 

Wall Street veterans - and indeed, anyone with a modicum of knowledge of how the financial markets work - predicted this very scenario the moment those tweets were posted.

 

Mr Musk is famously an unconventional chief executive, but when it comes to the financial markets, you can't flout the rules without serious consequences.

 

It's clear, from emails contained in the SEC's filing, that staff at Tesla were caught completely off guard. His head of investor relations asked if the tweets were "legit". The Nasdaq, confused, halted trading. It all makes Mr Musk unfit to run a public company, the SEC says.

 

All this because of a tweet sent because Mr Musk thought his girlfriend "would find it funny".

 

 

Mr Musk, who co-founded Tesla and has served as chief executive since 2008, is a divisive figure in the business world, who has inspired passionate fans and critics.

 

Supporters credit Mr Musk, also the head of the rocket company SpaceX, with pushing the car industry to produce electric cars.

 

But his critics - including many who have made investments predicting the firm's stock will fall - argue that Tesla has consistently lost money and struggled to increase its output, repeatedly missing its own targets.

 

The financial pressure facing Tesla has mounted this year, as it boosts spending to increase production of its newest car.

 

'Erratic behaviour'

In recent months, Mr Musk's own behaviour has also been in the spotlight.

 

In July, he drew widespread criticism after accusing a British cave diver involved in the rescue of Thai teenagers from a flooded cage of being a child abuser.

 

The diver later filed a defamation suit.

 

He also drew attention after an emotional interview with the New York Times, in which he said he worked "120-hour weeks" and took sedatives.

 

And earlier this month, he smoked marijuana live on the web during a podcast with comedian Joe Rogan.--BBC

 

 

 

Petrobras hit with $853m corruption fine

Petrobras, Brazil's state oil company, has agreed to pay more than $853m (£650m) to the US and Brazil, ending a long-running corruption investigation.

 

The probe stemmed from a bribery scheme at the firm, which involved millions in payments that were concealed from investors and regulators.

 

The payments were facilitated by executives at the "highest levels", including the firm's board, the US Department of Justice said.

 

Brazil is to receive 80% of the money.

 

Authorities in the US - where Petrobras is listed on the stock exchange - agreed not to prosecute in exchange for the remainder of the funds.

 

"Those who choose to access our capital markets while failing to disclose the corrupt activities of company executives will be held accountable," said US Attorney Zachary Terwilliger.

 

The payments were uncovered as part of Brazilian money laundering investigation at a petrol station, before widening to uncover corruption involving some of the country's top politicians and biggest companies, including Petrobras and Odebrecht.

 

Can Brazil's 'oil capital' bounce back after Petrobras scandal?

According to the Petrobras settlement's official account of the scandal, former executives funnelled payments from companies seeking business with the state to politicians, in some cases accepting part of the bribe themselves.

 

The payments were often concealed through fictitious costs or consultancy agreements, it says.

 

The full scale of the scheme, which took place between at least 2004 and 2012, is estimated at $2bn, of which more than $1bn went to politicians and political parties, the account says.

 

In a statement, Petrobras stressed that the agreement found that the company was also a victim of the scheme, which involved former executives, some of whom are now serving prison sentences in Brazil.

 

It said: "The agreements serve the best interests of Petrobras and its shareholders and put an end to the uncertainties, burdens and costs associated with potential litigation in the United States."

 

Under an order from the Securities and Exchange Commission, Petrobras has agreed to return $933m in gains stemming from the false financial statements.

 

That will be credited toward a $2.95bn settlement reached in a class-action suit brought by investors in New York.--BBC

 

 

 

Ryanair cancels 250 flights across Europe on Friday

Tens of thousands of Ryanair passengers across Europe face travel disruption on Friday after strikes forced the airline to cancel 250 flights.

 

The total had stood at 150 until German pilots decided on Thursday to walk out, resulting in another 100 cancellations.

 

They will join striking pilots in the Netherlands and Belgium.

 

Cabin crews in Belgium, Germany, Italy, the Netherlands, Portugal and Spain will also go on strike in a row over contracts and conditions.

 

Unions want staff to be given contracts in the countries where they live, rather than under Irish law.

 

Chief executive Michael O'Leary said the company had written to unions offering to move all staff to local contracts, which made the strike action "unnecessary".

 

However, the Dutch pilots union said it had only verbally offered its members local contracts and had refused to put the offer in writing.

 

Joost Van Doesburg, of the VNV union, said his members also wanted pensions in line with Dutch standards, and firmer guarantees on sick pay.

 

Analysis: BBC transport correspondent Tom Burridge

 

Meet with Michael O'Leary and beyond the bullish facade, this multi-faceted dispute is more complex and potentially damaging than he is willing to let on.

 

The roots of today's row stretch back to autumn last year when Ryanair 400,000 Ryanair passengers had their flights cancelled.

 

The airline did not have enough pilots to honour its schedule. It was in Mr O'Leary's words "a mess of our own making".

 

The subsequent decision to start recognising pilot and cabin crew unions around Europe was a multinational can-of-worms.

 

Some deals with some unions in some countries have been done.

 

But overall there is plenty to resolve and incendiary language, on both sides, is the flavour of the day.

 

Ryanair this week signed deals with cabin crew unions in Italy to provide employment contracts under Italian law and agreed to arbitration with the union representing its German pilots.

 

The European Commission said Ryanair employees should have contracts in the countries where they live rather than in Ireland, where its planes are registered.

 

EU social affairs commissioner Marianne Thyssen told Mr O'Leary at a meeting in Brussels on Wednesday that EU rules on employment of air crews were based on where workers left in the morning and returned in the evening - and not where aircraft were registered.

 

"Respecting EU law is not something over which workers should have to negotiate, nor is it something which can be done differently from country to country," Ms Thyssen said.

 

"The internal market is not a jungle - it has clear rules on fair labour mobility and worker protection. This is not an academic debate, but about concrete social rights of workers."

 

Ryanair has traditionally employed a large proportion of its staff under Irish law, which unions say inconveniences workers and affects their ability to access social security benefits.

 

Ryanair said the vast majority of its 2,400 flights on Friday would be unaffected, with only 35,000 of 450,000 passengers experiencing disruption.

 

Passengers whose flight have been cancelled were contacted by email and text message on Tuesday to advise them of their options.

 

"We sincerely apologise to those customers affected by these unnecessary strikes on Friday which we have done our utmost to avoid," Ryanair said.

 

It has rejected calls by the UK's Civil Aviation Authority to compensate passengers whose flights have been cancelled, claiming they were caused by "competitor airline crew, unions and lobby groups" and were therefore "extraordinary circumstances".

 

However, Coby Benson, a lawyer specialising in flight delay compensation at Bott and Co, said Ryanair's arguments did not comply with the precedent set in April by a case in Germany.

 

Last month, Ryanair pilots across Europe staged a coordinated 24-hour strike to push their demands for better pay and conditions, plunging tens of thousands of passengers into transport chaos at the height of the summer holiday season.

 

In July, strikes by cockpit and cabin crew disrupted 600 flights in Belgium, Ireland, Italy, Portugal and Spain, affecting 100,000 travellers.

 

Another indication of the company's rethink on contracts came on Thursday when it announced two new bases in France. They will be the first in the country since it closed Marseille in early 2011 after being sued for employing French workers on Irish contracts.

 

It will also open another base at Bordeaux for summer 2019 and had another four under consideration.

 

Two aircraft will be based at both Marseille and Bordeaux and will offer a total of 64 routes and handle 3.5 million passengers a year.--BBC

 

 

 

Italy's populists agree budget to 'abolish poverty'

Italy's populist government has come to an agreement over spending as it tries to "end poverty" with its first budget.

 

A joint statement from Five Star and the League late on Thursday said they had agreed to set the budget deficit at 2.4% of GDP - defying Brussels.

 

It comes after the administration was said to have clashed with its economy minister, technocrat Giovanni Tria.

 

Mr Tria was understood to have wanted to stick to lower spending to avoid adding to Italy's €2.3tn (£2tn) debt.

 

But his political colleagues wanted to free up more money in order to fulfil their election promises, which included a guaranteed minimum income for the poor.

 

"We, in a decisive manner, with this budget law, will have abolished poverty," Luigi Di Maio, deputy prime minister and leader of the Five Star party, said ahead of Thursday's crunch meeting.

 

But the coalition government's ambitious spending plans had put the government in conflict with European powers, who, like Mr Tria, want Italy to stick to lower spending.

 

Mr Tria, a university professor not affiliated with either party, was previously understood to have wanted to set spending at about 1.6% of debt above GDP - even lower than the 3% limit imposed by the European Union.

 

But Italy had promised to cut its deficit decisively, and so Thursday evening's announcement may put them further at odds with the EU.

 

Now the plans have been decided, they must be approved by the parliament in October.

 

What have the populists promised?

Italy's populist government needs to fulfil campaign promises and appease its voters while balancing its books.

 

Five Star and the League swept to power promising a series of tax cuts, new social welfare policies and better pensions - all expensive programmes.

 

Among the ambitious plans at election time were:

 

A guaranteed basic income for poor families of about €780 (£695) a month - at a projected cost of €17bn (£15bn)

Tax reform for rates of just 15% and 20%, down from 23%-43%, which could cost up to €50bn (£45bn)

Abolishing plans to raise retirement age over several years, and setting minimum pensions

What's the problem?

Italy is bound by European fiscal responsibility rules, preventing its government from clocking up too much debt compared to its economic output in any one year. This is measured by the budget deficit to GDP ratio - and is set at 3%.

 

The rule, handed down from the European Commission, is supposed to ensure the collective stability of EU countries. Historically, it has often been broken - but has been watched more closely since the 2008 global financial crisis.

 

That leaves the joint populist leaders Matteo Salvini, of the League party, and Mr Di Maio with unwelcome limits on what they can spend to reach their lofty goals.

 

Italy populists take power: What comes next?

What exactly is populism?

Mr Salvini has questioned why Italy should be shackled by European limits, hampering what he sees as vital reform projects.

 

And on the European side, the 3% spending limit is seen as just that - a limit, not a target. Many EU finance experts believe Italy should be targeting much lower figures, and Italy has been under intense pressure from Europe to do so.

 

A voice of dissent

To make matters worse, there were strong voices within their own government calling for even less spending.

 

Mr Tria, who is writing the budget, is an independent economist. He was appointed as part of the complicated negotiations to form the government (in which the prime minister, Giuseppe Conte, is also an independent).

 

And Mr Tria believes the debt ratio should be far below the EU 3% limit - initially proposing just 1.6%, somewhat crippling the government's big spending plans.

 

That's because Italy's economy, the third largest in the Eurozone, already comes saddled with huge debts.

 

 

In raw numbers, it tops the table with €2.3tn, and when adjusted for the size of the economy, it comes second only to Greece.--BBC

 

 

 

BrewDog scraps deal with US beer firm over Trump offer

Scottish craft brewer BrewDog has pulled out of a tie-up with a US beer maker after a row over free drinks to Donald Trump supporters.

 

Ellon-based BrewDog had planned a series of events with Scofflaw at bars across the UK this weekend.

 

It appeared the American firm had said anyone backing the US president could get "beered up redneck-style free of charge".

 

But Scofflaw later distanced itself from the promotion.

 

BrewDog founder James Watt said the offer had nothing to do with his company and scrapped all the events.

 

Mr Watt posted on Twitter: "The Scofflaw release was announced without our knowledge or consent.

 

"We are in no way aligned with their position and we will of course be cancelling all the events and sending all of the beer back.

 

"We care about beer and people. Not hate."

 

But Scofflaw later tweeted: "We did not approve or release said message and we are working with our PR firm @WelcomeToFrank to fix this error.

 

"This post was done on our behalf without our consent or knowledge."

 

Scofflaw said in a statement that it was "appalled by the inaccurate posts concocted this morning" on its behalf by Frank PR.

 

Scofflaw owner Matt Shirah said: "This post is absolute nonsense. While we definitely have country roots, no one at Scofflaw Brewing or those associated with our brand, is now, or has ever been, rooted in hate. We do not tolerate hate, that's just idiotic."

 

"We could care less about your political viewpoint, only if you like our beer."

 

Frank PR was unavailable for comment.

 

Last year, BrewDog launched a protest beer against President Trump's decision to withdraw the US from the Paris Agreement on climate change.

 

The Make Earth Great Again beer featured on its label a polar bear fighting with a robot version of Mr Trump.--BBC

 

 

 

Amazon to open 'four-star' store in New York

Online retailing giant Amazon is opening a store in New York that will only sell products that receive a high rating on its website.

 

The store will sell toys, household goods and other items that have a rating of four stars or more online.

 

Customers who visit the store will pay less if they have bought into Amazon's Prime service.

 

Physical shops are becoming a key expansion area for Amazon as it seeks to take on more traditional retailers.

 

The company currently operates 17 bookshops and is experimenting with its Go outlets that do away with cashiers.

 

Last year it paid $13.7bn (£10.4bn) for the Whole Foods chain to fuel its push into fresh food and to help bolster its grocery delivery service.

 

The four-star store will also sell books, games and kitchen utensils as well as Amazon's own Echo speakers and its Kindle e-readers. It will also have sections dedicated to items that are "trending" and proving popular with online customers.

 

Amazon has made attempts recently to improve the accuracy of its reviews by attempting to weed out fakes and those left by people who have been given, rather than bought, items on which they comment.

 

Analyst Michael Pachter, from Wedbush Securities, was sceptical about the store's prospects, given that it would only be able to hold a certain number of physical items.

 

"If I'm looking for a television and the store is full of kitchen appliances, it doesn't help me very much," he told Reuters.

 

 

 

Bonmarché shares sink on profit warning

Shares in womenswear chain Bonmarché fell 18% on Thursday after warning that profits would fall short due to weak consumer demand and warm weather.

 

The retailer said online sales had grown strongly in the second quarter of the year, but sales in stores had not kept up the pace of the first quarter.

 

Full-year profits are now expected to be £5.5m, down from £8m last year.

 

The Wakefield-based chain has more than 300 stores and a membership of 1.7 million for its loyalty scheme.

 

Many retailers are struggling in the current trading environment, with several well-known chains closing stores and seeking a financial restructuring to survive.

 

Department store group House of Fraser was bought by Sports Direct after running into difficulties, and earlier this month Debenhams rushed out a statement to try to reassure investors over its finances.

 

Last week. menswear chain Moss Bros issued a profit warning, also citing the summer's hot weather as a factor for poor trading.

 

However, not all retailers are in trouble. Earlier this week, fashion chain Next reported better-than-expected sales.

 

'Challenging times'

In its latest trading statement, Bonmarché said: "The continuation of warm weather for an extended period may have delayed demand for early autumn stock, but we believe that the more dominant factor is that underlying consumer demand for the UK High Street is weaker which is impacting footfall."

 

It had given an upbeat trading statement in July, in which it said trading had been "significantly better" than in the previous quarter, but trading since then has deteriorated.

 

Helen Connolly, the company's chief executive, said: "These are undoubtedly challenging times in the retail industry and, in common with many other businesses, Bonmarché's store trading has been impacted by weaker consumer sentiment and footfall."

 

However, she added that despite the "challenging market, the health of the business remains strong".

 

Bonmarché, established in 1982, describes itself as "one of the UK's largest women's value retailers".

 

Shares ended 19p lower at 84p, valuing the company at £43m.--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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