Major International Business Headlines Brief::: 04 April 2019

Thu Apr 4 10:30:27 CAT 2019

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Major International Business Headlines Brief::: 04 April 2019

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

*  South Africa considering more financial support for troubled Eskom

*  Tanzania charges Vodacom Tanzania MD with economic crimes -court documents

*  Nigeria appoints local banks for 3.4 trln naira note issue programme

*  M-Pesa helps drive up Kenyans' access to financial services - study

*  Nigeria's Oando aims to raise fresh capital, cut debt: CEO

*  Nigeria's Access Bank shares fall 10 pct after completion of Diamond Bank takeover

*  Kenya private sector expansion slowest in 16 months in March -PMI

*  Ghosn: Former Nissan chief arrested in Japan on new claims

*  Brexit: Carney says risk of no deal is 'alarmingly high'

*  Flybe cancels flights amid redundancy talks

 <mailto:info at bulls.co.zw> 

South Africa considering more financial support for troubled Eskom

SASOLBURG, South Africa (Reuters) - The highest levels of South Africa’s government are giving “serious consideration” to a variety of additional financial support measures for Eskom, Public Enterprises Minister Pravin Gordhan said on Wednesday.

“A variety of options are before us, and serious consideration is being given to all of them at the highest levels of government,” Gordhan told reporters at Eskom’s Lethabo power station.

“Once we have finessed the package, we will let you know either before the election (in May) or soon thereafter,” Gordhan added.

 <mailto:info at bulls.co.zw> 

Tanzania charges Vodacom Tanzania MD with economic crimes -court documents

DAR ES SALAAM (Reuters) - Tanzanian authorities on Wednesday charged the managing director of Vodacom Tanzania and other telecom executives with economic crimes, court documents seen by Reuters showed.

Egyptian Hisham Hendi and other telecom executives “intentionally and wilfully organised a criminal racket, which caused the government ... to suffer a pecuniary loss” of more than 5.9 billion Tanzanian shillings ($2.55 million), the documents said.

They were not allowed to enter a plea nor apply for bail, and were held in police custody until the case comes up on April 17, a court official told Reuters.

They did not respond to calls for comment following the issuing of charges.

Vodacom, a subsidiary of South Africa’s Vodacom Group, is Tanzania’s leading telecom company by the number of mobile subscribers, with about 32 percent of the country’s 40 million mobile subscribers, ahead of Tigo Tanzania, a subsidiary of Sweden’s Millicom, and a local unit of India’s Bharti Airtel.

Earlier on Wednesday, the company said Hendi and several other employees were questioned by the police over the alleged fraudulent use of network facilities.

“Vodacom Tanzania PLC can confirm that it is fully cooperating with an investigation led by the Tanzania Police Force,” Vodacom Tanzania said in a statement.

Hendi was appointed as managing director last month after serving as acting chief executive since September 2018. The government denied a work permit to the company’s first choice for chief executive, a Kenyan, it said at the time.

The company said earlier Hendi was not immediately available to comment.

After taking office in 2015, President John Magufuli launched an anti-corruption drive and vowed to stamp out tax evasion by multinational companies in Tanzania’s mining and telecoms sectors.

In 2016, Magufuli’s government demanded that telecom companies list at least 25 percent of their shares on the local stock exchange.

Vodacom is the only telecom firm to have listed. It raised $213 million in the initial public offering, Tanzania’s largest ever, which attracted more than 40,000 local investors, most of whom were first-time participants in the country’s stock market.

In June, prosecutors charged chief executives of telecoms operators Halotel Tanzania, owned by Vietnam-based Viettel, and Zantel with fraudulent use of network facility. The executives were later released after paying a fine.

Authorities last year charged five current and former employees of Acacia Mining, the country’s largest gold miner, with money laundering and tax evasion.

Nigeria appoints local banks for 3.4 trln naira note issue programme

ABUJA (Reuters) - Nigeria has appointed local banks for a 3.4 trillion naira promissory note issue programme to settle the backlog of state obligations, the finance minister said on Wednesday.

Zainab Ahmed presented a memo to cabinet on Wednesday seeking approval for the notes, which she said would help revive an economy which has faced low growth since emerging from its first recession in 25 years in 2017.

The obligations to be settled by the government include pension liabilities, unpaid salaries and accrued fuel supply interest, according to her memo seen by Reuters.

M-Pesa helps drive up Kenyans' access to financial services - study

NAIROBI (Reuters) - The proportion of Kenya’s population with access to formal financial services rose to 83 percent from 75 percent in 2016, driven largely by mobile technology, a survey part-conducted by the central bank showed on Wednesday.

The East African nation is one of the world’s leaders in mobile money services, after telecoms operator Safaricom pioneered its M-Pesa service 12 years ago to cater for Kenyans without access to the formal banking network.

M-Pesa has since evolved from a basic SIM card-based money transfer application into a fully-fledged financial service, offering loans and savings in conjunction with local banks, plus merchant payments services.

Airtel Kenya, a unit of India’s Bharti Airtel, and Telkom Kenya Ltd also operate mobile money services in Kenya, as does Equity Group, a lender which runs virtual mobile network operator and financial services platform Equitel.

The survey by the central bank and FSD Kenya, a campaigner for financial inclusion, found that 41 percent of the population had bank accounts, meaning the broader rise in access to financial services had been driven by mobile phone services.

Kenya was ranked third on the continent after South Africa and Seychelles in terms of access to financial services. South Africa’s access stands at 90 percent while Seychelles stands at 95 percent.

Only 14 percent of the Kenyan population had bank accounts in 2006 when the survey was first carried out. The figure rose to 34.4 percent in 2016.

The latest data from the Communications Authority of Kenya shows that as of December 2018, Kenya had 31.6 million active users of mobile money transfer services.

Safaricom’s M-Pesa was the market leader with 25.57 million users, followed by Airtel with 3.77 million users.

Nigeria's Oando aims to raise fresh capital, cut debt: CEO

LAGOS (Reuters) - Nigerian oil company Oando aims to raise fresh capital over the next two years and repay debt used to acquire Conoco Phillips’ Nigerian assets, its chief executive Adewale Tinubu told Reuters.

Oando has transformed itself in the past few years from a fuel retailer to oil producer and now competes with multinationals such as Shell and ExxonMobil, but its growth has been largely built on debt.

It bought Conoco Phillips’ Nigerian assets for $1.5 billion in 2013, but high financing costs coupled with lower oil prices hit profit, leaving it unable to repay its debt. It has posted losses including a record $1.10 billion loss in 2014.

Tinubu said Oando has paid over 77 percent of the acquisition debt and plans to pay-off the rest in 12 months, which would allow it to resume dividend payments. He said Oando would be left with total debt of $300 million.

Oando’s growth plan is to continue to pursue acquisitions as multinational oil companies sell assets, Tinubu said but added that he would take on new deals after paying down debt.

Exxon Mobil is weighing the sale of its Nigerian oil and gas fields for up to $3 billion to focus on new developments in U.S. shale and Guyana, industry and banking sources said.

“Our expectation is that over a four-year horizon we will no longer have long term debt,” Tinubu told Reuters by email.

“GOING CONCERN”

In 2016, Nigeria’s central bank gave lenders a deadline to reach a deal to resolve Oando’s debt issue, leading to a 94.6 billion naira loan restructuring including asset sales.

Last week Oando’s losses narrowed to 18.3 billion naira ($59.8 million) for 2018 while its auditor Ernst & Young questioned its “going concern” status, saying that its current liabilities were in excess of its current assets.

Oando said it would reclassify some current liabilities as long-term liabilities to remedy its working capital by June and swap 27.5 billion naira of debt into equity, it said in a note to its 2018 accounts.

It also plans to sell up to $200 million via a rights issue by October and cut its stake in its upstream unit to raise $275 million in 2020, Oando said in its accounts.

Tinubu said he was confident with the capital raising initiatives and that over the next 24 months Oando would raise funds as plans were far advanced.

Shares in Lagos-listed Oando, which are down 86 percent from their peak of 33.47 naira in 2014, rose 3.2 percent on Wednesday to value the company at 58.43 billion naira.

($1 = 305.90 naira)

Nigeria's Access Bank shares fall 10 pct after completion of Diamond Bank takeover

LAGOS (Reuters) - Shares in Nigeria’s Access Bank fell 10 percent on Wednesday to a two-week low, as they resumed trade following completion of the takeover of rival mid-tier lender Diamond Bank.

Access issued new shares as part of the takeover deal.

The fall in shares of Access, one of Nigeria’s top-tier lenders, helped lead Nigeria’s main share index down 1.29 percent to its lowest in 11 weeks.

Kenya private sector expansion slowest in 16 months in March -PMI

NAIROBI, April 3 (Reuters) - The pace of activity in Kenya’s private sector edged lower in March to its softest in 16 months, a survey showed on Wednesday.

The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services fell to 51.0 from 51.2 in February. Any reading above 50 indicates growth.

“The drop in the PMI doesn’t really come as a surprise as agricultural productivity is usually weaker in the first quarter,” said Jibran Qureishi, regional economist for East Africa at Stanbic Bank.

“As the long rains commence probably from April, higher output from the agriculture sub-sector is likely to underpin private sector activity.”

Output by firms, their new orders and employment recorded weaker expansions during the period, while input costs rose at a softer pace, the survey found.

The central bank expects the economy to expand by 6.3 percent this year.

Detailed PMI data are only available under licence from IHS Markit and customers need to apply for a licence.

Ghosn: Former Nissan chief arrested in Japan on new claims

Former Nissan chief Carlos Ghosn has been re-arrested in Tokyo while out on bail pending trial over claims of financial misconduct.

Prosecutors said the 65-year-old had been detained over suspicions he caused Nissan $5m (£3.8m) in losses, according to reports.

In a statement, Mr Ghosn said his re-arrest was "outrageous and arbitrary".

Mr Ghosn's lawyer told a news conference they would strongly appeal against the latest arrest.

Junichiro Hironaka also said that Tokyo prosecutors had confiscated the passport and mobile phone of Carlos Ghosn's wife, Reuters reported.

Mr Ghosn, who denies any wrongdoing, was recently released on bail after 108 days in custody.

Tokyo prosecutors entered Mr Ghosn's residence before 06:00 local time on Thursday (21:00 GMT Wednesday) and took him to their office on suspicion he had misappropriated Nissan funds for personal use, Japanese broadcaster NHK reported.

Mr Ghosn's lawyer said it was almost unheard of to arrest someone after being released on bail.

"I am innocent of the groundless charges and accusations against me," Mr Ghosn said in a statement released by his representatives.

He said the arrest was "part of another attempt by some individuals at Nissan to silence me by misleading the prosecutors".

What happens next?

The move is the latest twist in a case that has attracted global attention.

Mr Ghosn was the architect of the alliance between Nissan and French carmaker Renault, and brought Mitsubishi on board in 2016. He is credited with turning around the fortunes of Nissan and Renault over several years.

Prosecutors said Mr Ghosn's latest arrest related to transfers of Nissan funds totalling $15m between 2015 and 2018.

They suspect $5m of that amount was used by Mr Ghosn for personal expenditure.

Local media had previously said that authorities had been building a new case against him involving payments to a dealership in Oman.

In Japan, prosecutors are permitted to re-arrest a suspect on a slightly different accusation, with approval from the courts. The clock is then reset and another 20 days of interrogation can begin.

Misconduct allegations

Mr Ghosn was first arrested in November for understating his pay. He was re-arrested twice in December and faces three charges.

He was first charged with underreporting his pay package for the five years to 2015.

In January, a fresh charge claimed he understated his compensation for another three years and he was also indicted on a new, more serious charge of breach of trust.

Mr Ghosn denies any wrongdoing. He was released on $9m (£6.8m) bail in March.

The auto executive also said on Wednesday on a newly created Twitter account that he was planning a press conference on 11 April "to tell the truth about what's happening".

Pressure from Renault

The latest arrest comes after Renault publicly criticised its former star executive for the first time, accusing him of "questionable and concealed practices".

Mr Ghosn only resigned from the French carmaker in January, while Nissan and Mitsubishi removed him as chairman shortly after his arrest.

Renault had initially questioned Nissan's allegations, but carried out its own internal inquiry.

But on Wednesday, it piled pressure on Mr Ghosn when it accused him of "violations of the group's ethical principles".

The carmaker said it would stop Mr Ghosn's pension, thought to be worth €765,000 a year, adding that it reserved the right to bring action against him in the courts.

Renault said it had also "informed the French judicial authorities of potential issues concerning payments made to one of Renault's distributors in the Middle East".--BBC

Brexit: Carney says risk of no deal is 'alarmingly high'

The risk of Britain stumbling into a "disorderly" no-deal Brexit is now "alarmingly high", Bank of England governor Mark Carney has warned.

He told Sky News that although "real progress" had been made preparing for leaving without a deal, it would still mean "lots of things to worry about".

And it was "absolute nonsense" a no deal could be easily managed, he said.

BBC economics correspondent Dharshini David said critics will see the remarks as another political intervention.

Last August the governor said the risk of the UK leaving without a deal "felt uncomfortably high", and his latest comments appear to ratchet up the language.

He said that since his remarks last year the situation had not got any better. "Unfortunately I think it proved accurate. It's alarmingly high now."

Britain's default option is that it leaves the EU on 12 April. On Wednesday, Prime Minister Theresa May held talks with Labour leader Jeremy Corbyn to try to find a way out of the current deadlock. But that drew criticism from some Conservative Tory MPs.

'Nonsense'

Mr Carney told Sky News: "We're in a situation where the expressed will of Parliament is for some form of deal, so to put it in the double negative - Parliament is against no deal, the government, as expressed by the prime minister, is against no deal, the European Union is against no deal, and yet it is a possibility, it is the default option.

"So no deal would happen by accident, it would happen suddenly, there would be no transition - it is an accidental disorderly Brexit."

He took aim at the idea promoted by several Brexiteers - and included in the Malthouse Compromise plan - which assumes that Article 24 of the General Agreement on Tariffs and Trade would allow free trade to continue with the EU while negotiations are in progress.

"Forget the fiction, it's absolute nonsense. It needs to be called out," he said.

"I might point out that they want to become better acquainted with the Secretary of State for Trade [Liam Fox] who in Parliament has made the point that it cannot apply unless both parties agree, and unless you're moving towards a - guess what - a customs union."

Mr Carney insisted that London's financial centre was ready to cope with the impact of a no-deal Brexit.

"There are a lot of things to worry about in the event of a no-deal Brexit, but the financial sector is not one of them," he said.--BBC

Flybe cancels flights amid redundancy talks

Regional airline Flybe has cancelled dozens of Wednesday morning flights as it enters discussions over potential job losses.

The company blamed an industry-wide shortage of pilots for the delays, as well as its own pilots taking holidays.

Flights from Belfast City Airport and Birmingham are among those affected. Most of the flights are within the UK.

The airline said it would like to "sincerely apologise for any inconvenience caused".

What has the company said about job losses?

The discussions over jobs are at an early stage and the company will try and avoid job losses by filling internal vacancies with existing staff, including roles at other bases, Flybe's chief executive Christine Ourmieres-Widener told BBC Radio 5 live.

The company is "engaging with all impacted crew", she said.

Of the delays, she said the company would "follow all the rules of compensation" and that "we are expecting to go back to normal operation as soon as possible".

While the disruption was widespread, it only affected 5% of flights, she insisted.

Cardiff Airport boss Deb Barber said: "We understand Flybe is in the process of consulting with a number of its employees, including its crew at multiple bases across its network, which includes Cardiff.

"Flybe's plan to restructure and reduce its jet operations across many bases is part of the company's long-standing objective to stabilise the business," she said.

Which airports will be affected?

The cuts will affect Doncaster, Norwich and Exeter, as well as Cardiff, as the company seeks to drop expensive jets in favour of cheaper turboprop airliners.

The company says it will make the following changes:

Exeter - Flybe will fly its last jets from the airport on 26 October. This will not affect turboprop flights or its "base structure" it said.

Norwich - Jets will also stop flying from this airport at around the same time. This will not affect services at Norwich operated by Flybe's franchise partner, Eastern Airways, it said.

Cardiff and Doncaster - Flybe will also stop flying jets from these two airports. It will close its servicing operations at the airports, but will offer turboprop flights.

Unite the union regional officer Peter Coulson said: "Unite is seeking to minimise the potential job losses and secure assurances about Flybe's long-term future."

He urged the company to be forthcoming about its plan.

"It is essential that Flybe is fully transparent with its workforce about the exact situation facing the company. The current uncertainty is incredibly unsettling and is in danger of severely damaging morale at the company."

Sue Piercey, who lives in Bradford, told the BBC her flight from Leeds to Belfast today was cancelled.

"We received a curt email at 19:00 last night followed by an even shorter text message," she said. "No other flight options were offered."

Flybe are scheduled to fly three later services from Leeds to Belfast today, and none were offered to Ms Piercey, she said.

"Our holiday is totally off now, and I hope my insurance company can help me," she said, describing herself as "very annoyed today".

Customers also vented their frustration on social media.

I’ll be late for my meeting today! Cancellations on way back too!

Anyone whose flight is cancelled is entitled to choose between a refund paid within seven days, or an alternative flight (or bus) - even with a rival carrier.

Unless they have chosen a refund, it is the responsibility of the airline to get anyone with a ticket to their final destination as promptly as possible. In many cases, they should receive refreshments during any wait of two or more hours.

Passengers whose flight is cancelled, or who suffer long delays, can apply for extra compensation under EU rules.

As these are mostly short-haul flights, and the cancellations were last-minute, most will be entitled to compensation of €250 (£213).

Anyone who misses a connecting flight should talk to the airline operating that second flight but, according to consumer group Which?, they may have to make a claim for the cost of a new flight from their travel insurance.

On Monday, Flybe passengers on a new route were left with a six-hour coach journey when their aircraft was grounded.

The 18:40 service from Newquay to Heathrow could not take off on Sunday because of a "technical issue".

Cornwall Airport Newquay said passengers were offered "rebooking for another flight or ground transport to London Heathrow".

Flybe was bought early this year in a rescue deal following poor financial results.

Connect Airways, a consortium led by Richard Branson's Virgin Atlantic, paid a total of £2.8m for Flybe's assets and operations.

How has the company ended up in this situation?

The Exeter-based regional airline put itself up for sale last November, following a profit warning the previous month.

Virgin, Stobart Air and Cyrus Capital set up Connect Airways in December.

Flybe fell into difficulty in 2017, after what was considered a too-aggressive expansion strategy. The company ran up a near-£20m loss in the financial year ending 31 March 2017.

Passengers were booked onto a brand new route from Newquay to Heathrow but ended up on a coach

This January, one employee was moved to send an email accusing the firm's directors of ruining a profitable company.

The employee, a senior pilot, addressed the email to Flybe's chief executive, Ms Ourmieres-Widener.

"Congratulations, in two years at Flybe you and your fellow incompetent cohorts have managed to totally destroy a viable airline which was making profits when you took over," he wrote.

The BBC understands that the airline has suspended the pilot.

Flybe told the BBC that "an individual was suspended on 17 January 2019 in accordance with company policy".--BBC

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Zimbabwe 

Independence Day

Zimbabwe

18 Apr 2019 

Good Friday

19 Apr 2019

Easter Saturday

20 Apr 2019

Easter Sunday

21 Apr 2019

Easter Monday

22 Apr 2019

Workers Day

01 May  2019

Africa Day

25 May 2019

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

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