Major International Business Headlines Brief::: 09 August 2019

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Major International Business Headlines Brief::: 09 August 2019

 


 

 


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*  Glencore Zambian unit closes two mine shafts; opposition sees 1,400 job
cuts

*  African telecoms group MTN says divestment plan on track after first-half
sales

*  South Africa's manufacturing down 3.2% y/y in June

*  South Africa's mining output down 4.2% in June

*  Standard Bank to look at West Africa expansion

*  Kenyan regulator says shareholders will decide if bank merger goes ahead

*  AngloGold Ashanti posts 21% profit jump helped by Kibali JV

*  Emerging market currencies to bounce back from trade war jitters

*  Miner Sibanye-Stillwater flags improved operating performance

*  South Africa's rand steadies after hitting 11-month low

*  Brexit: Chancellor announces 'fast tracked' spending review

*  Transfer deadline day signings take Premier League spending to £1.41bn

*  What is the UK's GDP?

*  Uber shares tumble as profit figures disappoint Wall Street

*  Fitness chains SoulCycle and Equinox in Trump storm

*  Should we worry about a currency war?

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Glencore Zambian unit closes two mine shafts; opposition sees 1,400 job cuts

LUSAKA (Reuters) - Glencore’s Mopani Copper Mines in Zambia has closed two
shafts at its Nkana mine, the company said on Thursday, a move that an
opposition leader said had led to 1,400 job losses.

 

A Mopani spokesman would not specify the number of workers affected, saying
they were not employees of the company.

 

“The closure of the two uneconomic shafts was always part of our plans,”
Mopani said in a statement, adding that the move would allow it to channel
funds towards the completion of other expansion projects.

 

Mopani said it had served notices of non-renewal of all contracts for
development support services at the Mindola north and central shafts.

 

The president of the opposition Democratic Party, Harry Kalaba, said 1,400
mine contractors from the two shafts had been sent home on Thursday when
they reported for work.

 

“It is unfair to subject our people to job losses when the economy is tough
and people are suffering,” Kalaba said.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

African telecoms group MTN says divestment plan on track after first-half
sales

JOHANNESBURG (Reuters) - MTN Group Ltd is on track to meet a divestment
target set in March after raising $140 million from asset sales that will
slim down Africa’s largest mobile phone operator and refocus it on
high-growth markets.

 

MTN is reviewing a raft of investments under a three-year, 15 billion rand
($996 million) divestment plan that includes shedding loss-making e-commerce
assets and exiting countries where it has no prospect of reaching first or
second place by market share.

 

In the first half through June it sold its shareholder loan in ATC Ghana to
American Tower Corp for 900 million rand and its interests in investment
fund Amadeus and booking website Travelstart for 1.2 billion rand.

 

It has cut its stake in newly-listed Jumia Technologies to 18.9% from 29.7%
after the listing and is in the process of redeeming MTN Nigeria preference
shares for $315 million.

 

“So we’re well on track for our 15 billion rand (target),” Chief Executive
Rob Shuter told reporters on Thursday.

 

The South African firm’s plan to dispose of its minority stake in Mascom
Wireless Botswana for $300 million should be concluded in the second half.

 

MTN shares, which rose on Wednesday to their highest in a year, were down
2.1% by 1331 GMT against a 1% rise in Johannesburg’s Top 40 index.

 

In the six months through June, group service revenue rose 9.7% to 67.8
billion rand in constant currency terms, led by voice, data and financial
services.

 

Headline earnings per share (HEPS), the main profit measure in South Africa,
fell to 195 cents from 215 cents a year earlier, hurt by factors including
new accounting standards, interest on fines and foreign exchange moves.

 

Using the previous accounting standard, HEPS grew 8.8% to 234 cents, while
adjusted HEPS grew 12.1%.

 

Like peers, MTN has been broadening from a mobile player to offering digital
and financial services in major markets while still growing its 39.7 billion
rand revenue voice business.

 

Shuter said MTN will launch its music streaming service MusicTime in
Nigeria, one of the biggest markets for music streaming, in the second half.

 

It has also launched its messaging app ayoba in three smaller West African
markets and will expand it to other markets such as Nigeria and Ghana.

 

“For many years we built a network for voice consumers. We’re (now)
repurposing it for mobile internet and we’re also repurposing it to service
both enterprise and wholesale customers,” Shuter said.

 

($1 = 15.0631 rand)

 

 

 

South Africa's manufacturing down 3.2% y/y in June

JOHANNESBURG (Reuters) - South Africa’s manufacturing output fell 3.2%
year-on-year in June after increasing by a revised 0.4% in May, the
statistics agency said on Thursday.

 

On a month-on-month basis factory production was down by 1.5% in June,
Statistics South Africa said.

 

 

 

South Africa's mining output down 4.2% in June

JOHANNESBURG (Reuters) - South Africa’s total mining output fell 4.2%
year-on-year in June compared with a contraction of 1.5% in May, Statistics
South Africa said on Thursday.

 

Below is the breakdown of the main minerals.

 

Year-on-year output percentage changes:

 

June May

 

Gold -16.0 -24.3(revised)

 

PGM -6.3 6.0(revised)

 

Total Mining -4.2 -1.5

 

 

 

Standard Bank to look at West Africa expansion

JOHANNESBURG (Reuters) - Africa’s largest bank by assets, Standard Bank, is
considering entering new markets - possibly via acquisitions - as its
strategy to focus its resources on the continent continues to pay off.

 

In recent years, Standard Bank has been working to unwind a failed bid to
become a global emerging markets lender, and has ruled out further
cross-border expansion even in Africa.

 

However, CEO Sim Tshabalala said as that process nears completion it is
well-positioned for expansion and was particularly interested in countries
in the West African Economic and Monetary Union.

 

“We’re also saying that we’re quite comfortable to contemplate appropriately
priced acquisitions to the extent that they might fit with our risk
appetite,” he told reporters after presenting the bank’s half-year results.

 

He declined to give a time frame for the potential move, which he had said
earlier would have an emphasis on digital expansion.

 

Pivoting back towards its home continent has proven lucrative for Standard
Bank, and helped counter a deteriorating economy in its core market - South
Africa.

 

In the six months to June 30, its extensive African operations offset flat
growth in South Africa to lift group profits by 5%. The country’s economy
suffered its worst contraction in a decade during the period, and
unemployment hit an 11-year high.

 

The bank’s headline earnings per share - the main profit measure in South
Africa - stood at 837.4 cents ($0.5591), against 794 cents in the same
period last year. All of South Africa’s major lenders have looked elsewhere
in Africa for growth, but the size of Standard Bank’s continental operations
gives it an additional boost. Its shares rose 1.2% in early trade, though
they had settled back at 171.98 rand per share by 1135 GMT - a 0.5%
increase. ARGENTINA EXIT Standard Bank’s retreat to focus on Africa paid off
in other ways too. It also said on Thursday it would exercise an option to
dispose of its 20% stake in the Industrial and Commercial Bank of China’s
(ICBC) Argentinian operation - a relic from its abandoned foray into global
emerging markets.

 

It expects to deliver a gain of about 600 million rand as a result of the
transaction, adding that it will reinvest any proceeds into its
Africa-focused operations.

 

However, a separate London-based partnership with ICBC, focused on financial
markets and commodities, made a $129.5 million loss in the first half,
largely attributable to a provision covering exposure to a single client
that filed for bankruptcy.

 

Standard Bank has previously said the London-based ICBC joint venture would
need 1.1 billion rand injected to support its business plan.

 

The lender, which owns 40% of the venture, cannot exercise an option to sell
20% of that back to ICBC until the Chinese bank exercises its own option to
buy the other half from Standard Bank.

 

($1 = 14.9705 rand)

 

 

 

Kenyan regulator says shareholders will decide if bank merger goes ahead

NAIROBI (Reuters) - Kenyan lender KCB Group’s takeover of state-backed
National Bank of Kenya will go ahead if its offer is accepted by 75% of
National’s shareholders, the markets regulator said on Thursday.

 

The comments by the Capital Markets Authority (CMA) came in response to a
call by some lawmakers for the government to reject KCB’s offer.

 

KCB, Kenya’s biggest lender by assets, offered to buy struggling National
Bank (NBK) in April through a share swap of one KCB share for every 10
shares of NBK.

 

Parliament’s finance committee said in a report on Wednesday that the
government, National’s main shareholder, should reject the offer as it
undervalues National Bank. That appeared to throw up a barrier to the deal,
which is set to close at the end of this month.

 

The CMA shrugged off the committee’s report, saying the takeover is subject
to regulations on takeovers and mergers of listed firms, and is insulated
from government interference. Under those rules, the takeover needs to be
supported by 75% of NBK shareholders.

 

 

“The Authority approved the Shareholders Circular shared with NBK
shareholders with details about the offer from KCB. It is then up to the NBK
shareholders to accept or reject the offer,” the CMA said in a response to a
Reuters query.

 

“If the threshold for acceptances is not met then the offer fails but if it
is met it is deemed successful.”

 

KCB said it had sought a meeting with lawmakers to discuss the transaction
in the wake of the finance committee’s report.

 

“NBK shareholders have already received the offer documents and we remain
optimistic that we shall receive positive responses,” the group said in a
statement.

 

Both the central bank and the Treasury, which together with the state
pension fund hold more than 70% of NBK, have backed the takeover, saying it
is the only way of rescuing NBK from perennial liquidity challenges.

 

Acting finance minister Ukur Yatani reiterated the government’s support for
the deal on Thursday, saying there was a need for “strong and stable banks”
to support the country’s fiscal position, adding that all interested
parties, including parliament were being consulted.

 

KCB, which also operates in Tanzania, Uganda, Rwanda, Burundi and South
Sudan, has been looking to bolster growth via acquisitions.

 

 

 

AngloGold Ashanti posts 21% profit jump helped by Kibali JV

JOHANNESBURG (Reuters) - AngloGold Ashanti Ltd reported a 21% rise in
interim earnings on Thursday as a solid performance from its Kibali joint
venture, lower costs and a high gold price helped counteract lower output in
South Africa.

 

Its best performing mines included the Kibali mine in Democratic Republic of
Congo, Geita mine in Tanzania and Tropicana mine in Australia, AngloGold
Ashanti said.

 

“Kibali has been a strong performer, Geita has been very positive, Tropicana
as well... I’m pleased with the emphasis on costs, and that’s going to
continue,” Chief Executive Kelvin Dushnisky told reporters on a call.

 

Kibali is co-owned by AngloGold, Barrick Gold and DRC’s state-owned Societe
Miniere de Kilo-Moto.

 

“We’re very pleased with the rising gold price environment, but... we’re not
changing our focus one degree. We’re going to continue to keep a tight rein
on costs and capital (and) we’re going to keep a close eye on the margins,”

 

The South African gold miner’s headline earnings per share (HEPS) for the
six months ended June 30 rose to 29 cents from 24 cents a year earlier, in
line with the company’s guidance.

 

HEPS, which strips out certain one-off items, is the main profit measure in
South Africa. The company posted a 4% improvement in cash costs.

 

Dushnisky, who was appointed September 2018 and previously served as the
president and executive director at Barrick Gold, has spearheaded the
strategy to streamline the portfolio.

 

The miner employs around 6,000 people in South Africa where mining companies
have faced volatile labour relations, rising costs, regulatory disruptions
and technical issues.

 

AngloGold said in May it would review divestment options for its Mponeng
mine, the world’s deepest gold mine, and other South African assets to focus
on higher returns elsewhere.

 

Those assets include Mponeng, a surface rock dump processing business and a
mine waste retreatment operation. In contrast to output gains of 12% at
Kibali and 6% at Geita, production at Mponeng fell 4%.

 

“We’re very pleased with the high level of interest... we’re going to let
the process play out,” Dushnisky said.

 

“If we don’t receive a bid that we think is adequate, we’re also happy to
own these assets.”

 

Overall the firm’s gold output at retained operations fell 1.5% to 1,554,000
ounces.

 

 

Emerging market currencies to bounce back from trade war jitters

JOHANNESBURG/BENGALURU (Reuters) - Battered emerging market currencies will
eventually bounce back from their beating in the past week on worries about
the U.S.-led trade war, but risks remain for currencies of commodity
exporters inextricably linked to China, a Reuters poll found.

 

For the first time in more than a decade, China on Monday let its currency
break through 7 per dollar, a key support level, in a sign Beijing might be
willing to tolerate even more weakness in retaliation for tariff threats
from Washington.

 

This sent shock waves through risky currencies such as South Africa’s rand
and Brazil’s real, which has lost over 3% since Thursday. But foreign
exchange strategists polled this week are optimistic that by this time next
year, most will have recouped those losses.

 

“Our top-down EMFX forecast now suggests currencies will first weaken in
three months’ time, then appreciate modestly in 12 months,” noted Dirk
Willer, head of emerging market strategy at Citi. “The Fed and the global
growth story, along with U.S.-China trade tensions are likely to remain
drivers in the near term.”

 

Still, recent performance just magnifies what has been a lacklustre year so
far for emerging market currencies.

 

The Reuters poll last month suggested these currencies had probably seen the
best of a lukewarm year against the dollar as U.S. President Donald Trump
was then expected to back-pedal on his conciliatory tone from the recent G20
summit.

 

Trump did exactly that last week, and emerging market currencies showed
similar weakness to last year’s crazy August selloff, now seemingly looking
ominously cyclical, but this time last year global growth was in question
due to the trade war.

 

Emerging market currencies have underperformed more broadly in the past
couple of years as rampant Chinese demand for raw materials waned and
stimulus from asset purchases trickled off, first by the Federal Reserve and
then the European Central Bank.

 

Trump’s surprise move on Thursday to impose new tariffs on Chinese imports
may eventually force the Fed to cut rates more than it had hoped was
necessary, keeping rate differentials attractive to emerging markets.

 

“We think countries with high interest rates are likely to find it easier to
attract capital flows due to the hunt for yield,” Renaissance Capital wrote
in a note to clients.

 

Local problems in some countries have become more pronounced too, exposing
deep structural problems irrespective of the global backdrop. In South
Africa, President Cyril Ramaphosa is faced with serious fiscal troubles,
while in Brazil, growth is expected to slow in 2020 despite pension reforms.

 

Though forecasters expect the rand to recover its recent losses, it remains
a currency easily beaten down in times of heightened risk aversion, despite
the fact its gold mining companies often benefit in times like this.

 

Gold is at a six-year peak as investors continue to pile into safe havens to
hedge against heightened U.S.-China trade tensions.

 

However, like most emerging market central banks, Russia is likely to lower
interest rates this year faster than previously thought as economic growth
is on track to undershoot official forecasts.

 

The beaten-down Turkish lira will struggle over the next 12 months, the
Reuters poll suggests.

 

The year ahead outlook for the yuan, which was taken just as the
re-escalation in trade tensions between the U.S. and China took place, still
showed it could rise as much as 11% in the next 12 months.

 

But after the recent political developments, currency strategists said it
was difficult to get an idea about where the currency was headed and so
forecast revisions are likely soon.

 

Rafiq Raji, chief economist at Macroafricaintel in Lagos, said it is
plausible the Chinese authorities may now just want to wait and see if Trump
wins a second term in 2020. “For investors, I wouldn’t advise such
fatalism.” he added.

 

 

 

Miner Sibanye-Stillwater flags improved operating performance

JOHANNESBURG (Reuters) - South Africa’s Sibanye-Stillwater has improved
operating performance in the second quarter and is set to achieve its annual
targets, the precious metals miner said on Thursday.

 

Consistent performance from platinum group metal (PGM) operations helped to
offset disruption at the group’s gold mines, with the company now expecting
annual PGM production to be at the upper end of guidance, excluding the
Marikana mine acquired as part of its takeover of Lonmin.

 

Operating results from the group’s three segments were “significantly
improved” from the previous quarter, with further progress forecast during
the second half of the year, the company said in a statement.

 

Gold production, hit by a five-month strike that ended in April but cost
Sibanye more than $100 million in lost revenue, is expected to normalise
from August, the company said.

 

Half-year results for the six months to June 30 are scheduled for Aug. 29.

 

 

 

South Africa's rand steadies after hitting 11-month low

South Africa’s rand rose in early trade on Thursday, steadying after a
week-long losing run that saw it sink to a 11-month low in the previous
session.

 

At 0726 GMT, the rand traded at 15.0125 versus the dollar, up 0.3%, after
hitting its lowest level since September 2018 on Wednesday and having posted
seven straight sessions of losses.

 

Poor economic data, worries about the impact of state-owned energy firm
Eskom and negative commentary from credit rating agencies have all
contributed to recent rand weakness, exacerbating broader concerns about
emerging markets and trade tensions between the United States and China.

 

On Thursday global sentiment was buoyed by surprisingly strong China trade
data which helped emerging market currencies recover.

 

“The return of some stability in global markets, some good news domestically
and policy direction from SA’s leadership would go a long way to assisting
the ZAR stage a recovery,” ETM Analytics said in a note.

 

President Cyril Ramaphosa, who has staked his reputation on cleaning up
deep-rooted corruption and reviving Africa’s most developed economy, has
struggled to do so.

 

Ramaphosa is set for a court ruling in a dispute with South Africa’s
anti-corruption watchdog over the disciplining of public enterprises
minister and key ally Pravin Gordhan. ETM Analytics said that a victory for
Ramaphosa in that case might further boost the rand.

 

Government bonds rose, and the yield on the benchmark instrument due in 2026
fell 3 basis points to 8.345%.

 

 

 

Brexit: Chancellor announces 'fast tracked' spending review

Chancellor Sajid Javid has announced a one-year spending review to give
government departments "financial certainty" as they prepare for Brexit.

 

Mr Javid said a "fast-tracked" spending round for 2020-21 would "clear the
ground ahead of Brexit while delivering on people's priorities".

 

Spending reviews typically tend to happen every two to three years.

 

But shadow chancellor John McDonnell warned that the Tories were "playing
dangerous games with spending".

 

What should we expect from new Chancellor Sajid Javid?

Sajid Javid tells HMRC: Make no-deal Brexit planning top priority

£2.1bn extra for no-deal Brexit planning

"We will get Brexit done by 31 October and put our country on the road to a
brighter future," said Mr Javid.

 

Mr McDonnell disagrees with this approach, saying it "smacks of pre-election
panic measures by the government".

 

"Boris Johnson is splashing a little bit of cash as a publicity stunt, but
keeping the door open for even more austerity if a no-deal Brexit breaks the
economy," he said.

 

He added that a one-year spending review would enable the government to halt
any additional spending after the first year, and this uncertainty would
make it hard for public services to prepare for anything beyond the next
year.

 

Mr McDonnell stressed: "There are also gaping holes in the spending plans -
nowhere near enough for our NHS or our schools or our local councils,
nothing to lift children out of poverty, nothing to end the pain caused by
the Tories' Universal Credit, or to scrap the bedroom tax or the cuts in
support for disabled people."

 

Government spending reviews

About 50% of government spending is planned on a multi-year basis, when it
comes to things like public services, such as the NHS, schools or the
police, which are unlikely to alter drastically from year to year.

 

Typically, these budgets are set three or four years in advance, in order to
help government departments plan their spending more effectively.

 

"If you're a head teacher or head of a police force, if you're trying to
work out who to hire or whether to invest in a piece of equipment, it helps
to know what your budget is going to be into the future," Ben Zaranko, a
research economist with the Institute for Fiscal Studies told the BBC.

 

"If you have to plan this on a year-to-year basis, it's quite hard."

 

This time, the spending review will be published in advance of the Budget,
which means the chancellor will be making spending plans before he has
updated forecasts for the economy, and before he has set tax policy, Mr
Zaranko added.

 

Government departments are likely to have mixed views about this
announcement.

 

On the one hand, some public services - for example health and the police -
may be offered more money. There may also be extra cash to deal with the
potential fallout from a no-deal Brexit.

 

The government says this decision is about getting Brexit done, and
delivering on people's priorities.

 

But the decision also makes it harder for public services to plan for the
longer term, as they'll now have to wait another year for the real spending
review.

 

There's also the risk that the spending taps might be turned off as quickly
as they're turned on. That's Labour line of attack - they're accusing the
government of playing "dangerous games", and "abandoning any pretence of a
long term economic plan".

 

One-year spending reviews are not unprecedented. In 2013, the government set
the budget for 2015-16, so as to avoid spending decisions going beyond the
next election.

 

Mr Zaranko thinks that there are both benefits and drawbacks to having a
single spending review, over a multi-year one.

 

He said it makes sense to that the chancellor is unwilling to commit to
longer spending plans, because "we don't know what the economy is going to
look like six months down the line, let alone three years".

 

However, it would make it much harder for government departments to plan for
the future.

 

Mr Zaranko said that Mr Javid's spending review could benefit from having an
extra reserve of money that could be drawn upon by departments that might
have new responsibilities in case of a no-deal Brexit.

 

For instance, HM Revenue and Customs (HMRC) might need more money at the
border control in Dover, or the Home Office might need additional resources
to provide more immigration services.

 

Earlier this year, Her Majesty's Chief Inspector of Constabulary released a
report warning that one-year spending reviews would not be good for the
police in England.

 

The HM Inspector of Constabulary concluded that annual funding settlements
were "incompatible with efficient and effective long-term planning".

 

"When it comes to funding, [police] forces need certainty, stability and
predictability. So there is a clear need for multi-year settlements," it
added.--BBC

 

 

 

Transfer deadline day signings take Premier League spending to £1.41bn

A late flurry of deadline-day signings took Premier League spending for the
summer up to £1.41bn, just short of the £1.43bn record set in 2017.

 

Deadline day spending alone by English top-flight clubs was £170m - but on
just 17 deals, the joint fewest number of transfers on the last day of the
summer window since 2009.

 

Everton's £34m signing of forward Alex Iwobi from Arsenal was the biggest
incoming Premier League deal, while the largest transfer saw Romelu Lukaku
leave Manchester United for Inter Milan for £74m - a loss of £1m on the fee
they paid Everton.

 

Arsenal were the biggest spenders in England during the window, splashing
out £155m. On deadline day, they bought £25m Celtic left-back Kieran Tierney
and £8m Chelsea centre-back David Luiz.

 

Tottenham recruited Real Betis midfielder Giovani lo Celso on loan and
signed Fulham winger Ryan Sessegnon for £25m. Their pursuit of Juventus
forward Paulo Dybala was one of the big stories earlier in the day but the
deal fell through.

 

Watford spent a club record, reported to be £25m, on Rennes winger Ismaila
Sarr and Leicester bought Sampdoria's attacking midfielder Dennis Praet for
a reported £18m.

 

How did social media reaction to deadline day?

Full list: Discover all the deadline-day transfers

What's new this season in the Premier League?

Three former England internationals made moves - Burnley signing Chelsea
midfielder Danny Drinkwater and Manchester City bringing in Derby goalkeeper
Scott Carson, both on loan, while Newcastle re-signed free agent striker
Andy Carroll.

 

A busy day in the Championship was headlined by West Brom spending £4m on
Southampton striker Charlie Austin.

 

This was the second year in a row when Premier League clubs could only sign
players until the day before the season started, instead of the end of
August.

 

The deadline has also now passed for Championship clubs, but teams from
Scotland, Leagues One and Two and all of Europe's major leagues can bring in
players until 2 September.

 

The total number of Premier League signings in the summer fell for the sixth
year in a row.

 

Deadline day transfers by year

Click to see content: PLtransfersbyyear2

What deals happened in the summer?

Eleven of the 20 Premier League clubs broke their transfer record this
summer, with Sheffield United smashing theirs four times. Arsenal, Aston
Villa, Leicester (twice), Manchester City, Newcastle, Southampton,
Tottenham, Watford - on deadline day - West Ham and Wolves are the other 10.

 

Harry Maguire's £80m switch from Leicester to Manchester United was the
biggest Premier League signing of the summer, followed by Arsenal's £72m
purchase of Lille winger Nicolas Pepe.

 

Champions Manchester City bought Atletico Madrid midfielder Rodri for £62.8m
and Juventus right-back Joao Cancelo for £60m.

 

Spurs spent £53.8m on Lyon midfielder Tanguy Ndombele - their first
first-team signing since January 2018.

 

The 10 biggest signings by Premier League clubs this summer

 

Most expensive Premier League signings this summer

Villa spent £125m, the second promoted club to hit nine figures after
Fulham, who did so last summer, only to be relegated in April.

 

The other biggest transfers were Manchester United right-back Aaron
Wan-Bissaka (£50m from Crystal Palace), West Ham striker Sebastien Haller
(£45m from Eintracht Frankfurt), Newcastle striker Joelinton (£40m from
Hoffenheim) and Leicester midfielder Youri Tielemans (reported £40m from
Monaco).

 

Chelsea also spent £40m on Real Madrid midfielder Mateo Kovacic despite
having a transfer embargo. The Croat was already there on loan, so Frank
Lampard's side were allowed to sign him permanently as he was already
registered. Their sale of Eden Hazard to Real for a fee of £89m, which could
rise to £150m, was one of the biggest deals in the world.

 

La Liga could overtake Premier League - Deloitte analysis

This was the second highest total spend since the introduction of the
transfer window system in 2003, according to analysis from Deloitte's Sports
Business Group. It is the fourth consecutive summer that Premier League
clubs have spent over £1bn.

 

But Premier League clubs' net expenditure (purchases minus sales) was £625m
- the lowest in a summer since 2015, helped by Hazard and Lukaku's big-money
moves.

 

Dan Jones, partner in the Sports Business Group at Deloitte, said: "With
this level of net spend, combined with a more modest increase in Premier
League broadcast rights values for the coming season than we have seen
previously, we would expect wages to increase at a greater rate than
revenue, returning to a wages to revenue ratio of over 60%.

 

"However, this does not signal major financial concerns as Premier League
clubs collectively generated pre-tax profits of £426m in 2017-18, while net
spend as a proportion of revenue of 12% is at its lowest since 2012."

 

Here are some of Deloitte's other findings...

 

*         La Liga clubs could still overtake the Premier League's total.
Spain's top-flight clubs have spent £1.1bn, with Real Madrid, Atletico
Madrid and Barcelona accounting for two thirds of that alone. That number
will increase with their deadline not until 2 September.

*         Championship clubs spent £160m on transfers, an increase from the
£155m spent last summer.

*         Chelsea (who had a transfer embargo), Crystal Palace and Liverpool
were the three clubs to make a profit on transfers this summer.

*         Benfica (£170m) and Ajax (£165m) were among the sides to make the
most in player sales this summer.

What could still happen?

The deadline for La Liga, Serie A, the Bundesliga, Ligue 1 and other
European leagues is on 2 September so their clubs can sign Premier League
players until then.

 

Real Madrid have been linked with United midfielder Paul Pogba all summer,
but it seems unlikely United would let the France international go now
without being able to bring in a replacement.

 

Spurs playmaker Christian Eriksen is another who could leave the Premier
League. The Denmark international, who has one year left on his contract, is
interested in a move abroad. But could their failure to sign Dybala make a
move less likely?

 

Manchester City winger Leroy Sane is a long-term Bayern Munich target but
the cruciate ligament damage suffered in Sunday's Community Shield could see
him stay at Etihad Stadium.

 

Real Madrid forward Gareth Bale was never really linked to any English clubs
before the deadline. He has got three-and-a-half weeks to find a European
club, or else face a season out of the team, with the Welshman seemingly not
in Zinedine Zidane's plans.

 

Paris St-Germain forward Neymar continues to be linked to Real Madrid and
former club Barcelona, while Real attacking midfielder James Rodriguez -
like Bale - may have to move away for first-team football.

 

The Premier League deadline closing could spark a flurry of signings
elsewhere. Some managers in Leagues One and Two have been waiting for this
stage, with Premier League and Championship clubs now more likely to know
who they will be willing to loan or sell.--BBC

 

 

 

What is the UK's GDP?

On Friday, the Office for National Statistics (ONS) will publish figures on
how well the UK's economy is performing.

 

It's the latest update on gross domestic product (GDP), one of the most
important economic statistics.

 

So what exactly is GDP, and how is it measured in the UK?

 

What is GDP?

GDP is the sum (measured in pounds) of the value of goods and services
produced in the economy.

 

But the measurement most people focus on is the percentage change - the
growth of the country's economy over a period of time, typically a quarter
(three months) or a year. It's been used since the 1940s.

 

The most important percentage change is given in real terms - it strips out
the effect of rising prices or inflation.

 

If the GDP measure is up on the previous three months, the economy is
growing. That generally means more wealth and more new jobs.

 

If it is negative, the economy is shrinking. And two consecutive three-month
periods of shrinking meets the most widely accepted definition of a
recession.

 

How is it measured?

GDP can be measured in three ways:

 

Output measure: This is the total value of the goods and services produced
by all sectors of the economy: agriculture, manufacturing, energy,
construction, the service sector and government

Expenditure measure: The value of the goods and services bought by
households and by government, investment in machinery and buildings. This
also includes the value of exports minus imports

Income measure: The value of the income generated mostly in terms of profits
and wages.

In the UK, the ONS publishes one single measure of GDP, which is calculated
using all three ways of measuring. But early estimates - such as Friday's
figures - mainly use the output measure.

 

It collects data from thousands of UK companies to use in its calculations.

 

What is it used for?

It's the main way of determining the health of the UK economy.

 

The Bank of England uses it as one of the key indicators in setting interest
rates.

 

So, for example, if prices are rising too fast, the bank could increase
interest rates to try to control them. But it might hold off if GDP growth
is slow.

 

 

The Treasury uses GDP when planning economic policy. When an economy is
shrinking, the amount the government gets from taxes tends to fall and the
government adjusts its tax and spending plans accordingly.

 

UK GDP is also used internationally by financial bodies such as the World
Bank and the International Monetary Fund to compare growth between different
countries.

 

Why is it often changed later?

The UK produces one of the earliest estimates of GDP of the major economies,
about 40 days after the quarter in question.

 

This provides the government with an early estimate of the real growth in
economic activity. It is quick but mainly based on the output measure.

 

At that stage, only about 60% of the data is available, so this figure is
revised as more information comes in.

 

Revisions can be made later as more information becomes available or when
definitions change. The ONS publishes more information on how this is done
on its website.

 

What are its limitations?

GDP growth doesn't tell the whole story.

 

There are lots of things the statistics might not take into account:

 

Hidden economy: Unpaid work isn't captured in official figures, such as
caring for an elderly relative

Inequality: GDP growth doesn't tell us how income is split across a
population. A rising GDP could result from the richest segment of society
getting richer, rather than everyone becoming better off

Plus, GDP is only one way to think about a country's development.

 

Just because GDP is increasing, it doesn't mean that a citizen's standard of
living is improving. For example, in times of war, GDP will often increase
because more money is being spent.

 

Different countries have developed alternative measures to determine a
country's health.

 

In 2010, the ONS started measuring wellbeing alongside economic growth. It
looks at health, relationships, education and skills, as well as personal
finances and the environment.

 

New Zealand's Prime Minister, Jacinda Arden, recently released the country's
first "wellbeing budget", prioritising health and life satisfaction rather
than economic growth.--BBC

 

 

 

Uber shares tumble as profit figures disappoint Wall Street

Uber's shares went into reverse on Thursday after the taxi-hailing company
unveiled profit figures that failed to live up to expectations.

 

Revenue growth slowed in face of heavy competition, leading to the company
posting its largest quarterly loss.

 

Uber and its rivals are spending heavily to expand, but boss Dara
Khosrowshahi said that the competitive pressures are easing.

 

But that didn't stop Uber's share price tumbling 13% in after-hours trading.

 

Is Uber really worth billions of dollars?

Uber planning stock market flotation 'in April'

Would you buy shares in Uber?

On Wednesday, rival Lyft reported figures that were generally welcomed on
Wall Street, and there was an expectation that Uber would also post positive
numbers.

 

But Uber's loss widened to $5.2bn (£4.3bn) in the three months to 30 June,
from $878m in the quarter last year. The figures reflected $3.9bn of
share-based compensation expenses related to its stock market listing
earlier this year.

 

Total revenue rose 14.4% to $3.2bn, but fell short of average analysts'
estimates of $3.4bn. Uber's costs rose 147% to $8.7bn in the quarter,
including a sharp rise in spending for research and development.

 

Mr Khosrowshahi said the competitive environment is starting to rationalise
and had been "progressively improving" since the first quarter. While the
company continues to invest aggressively, it is expected to spend less on
promotions and incentives to win market share.

 

Uber and Lyft have historically relied on subsidies to attract riders, and
have been spending heavily to expand into areas such as self-driving
technology and food delivery.

 

Uber, which admitted ahead of its Wall Street listing that it may never make
a profit, is trying to convince investors that growth will come not only
from its ride services, but also from other logistics and food delivery
services.

 

Gross bookings, a measure of total value of rides before driver costs and
other expenses, rose 31% from 2018 to $15.76bn, below analysts' forecasts of
about $15.8bn.

 

The number of monthly active users rose to 99 million globally, from 93
million at the end of the first quarter and 76 million a year earlier.

 

"Uber has turned into the magical money burning machine." That's how
Publicis Sapient analyst Alyssa Altman described Uber's second quarter
results. The damning words go to the heart of the company's challenge: can
Uber find a way to be profitable?

 

Its latest set of results failed to assuage sceptical investors and they
gave the stock the cold shoulder. It doesn't help that its rival, Lyft,
suggested on Wednesday that it could achieve profitability sooner than
expected.

 

Traditionally Uber and Lyft have spent heavily on promotions to attract
riders and win market share. Both companies have said that price pressure is
easing. And yet Uber's costs still rose an astonishing 147%.

 

The chief executive, Dara Khosrowshahi, is betting that future growth will
come not just from ride services, but from other businesses like food
delivery. The signs are that he has clearly not yet convinced investors.

 

For Wall Street, these numbers on Thursday show this is still a company
stuck in traffic.--BBC

 

 

Fitness chains SoulCycle and Equinox in Trump storm

Fitness chains SoulCycle and Equinox have sought to distance themselves from
a fundraising event for US President Donald Trump reportedly being planned
by their billionaire owner.

 

The high-end gym and indoor cycling chain, famous for its celebrity clients,
has faced a customer backlash over the event backed by Stephen Ross.

 

The firms said Mr Ross, head of Related Companies, was a "passive investor".

 

We "have nothing to do with the event and do not support it," they said.

 

According to the Washington Post, tickets for the event will cost $100,000
(£82,320) for lunch, and $250,000 for a package that includes a roundtable
discussion with Trump.

 

The joint statement by Equinox and SoulCycle, whose clients include
Hollywood celebrities and personalities like Michelle Obama and Oprah
Winfrey, said: "As is consistent with our policies, no company profits are
used to fund politicians," adding that the companies believe in "diversity,
inclusion, and equality."

 

Equinox has a 97% stake in SoulCycle, which it bought in 2011.

 

Shannon Coulter, founder of the #GrabYourWallet movement, which urges
Americans to stop shopping at companies connected with Mr Trump, tweeted
that she was adding SoulCycle and Equinox to the boycott list.

 

A Change.org petition questioned Equinox's commitment to being a "safe
space" for gay and lesbian customers and demanded the company end its
support of Mr Trump.

 

"Everyone who cancels their Equinox and SoulCycle memberships, meet me at
the library. bring weights," tweeted model Chrissy Teigen, who is a vocal
critic of the US president.

 

Mr Ross, who also owns the Miami Dolphins, did not endorse Mr Trump during
his 2016 presidential campaign, although he has praised him in an interview
with Bloomberg.

 

No one from Related Companies was immediately available for comment,
although in a statement to US broadcasters, including CNN and CBS, Mr Ross
said: "I always have been an active participant in the democratic process.
While some prefer to sit outside of the process and criticise, I prefer to
engage directly and support the things I deeply care about.

 

"I have known Donald Trump for 40 years, and while we agree on some issues,
we strongly disagree on many others and I have never been bashful about
expressing my opinions."

 

Mr Ross added that he was "an outspoken champion of racial equality,
inclusion, diversity, public education and environmental sustainability",
and would work with both Republicans and Democrats in support of these
social liberties.--BBC

 

 

Should we worry about a currency war?

US President Donald Trump has accused the Federal Reserve of being
responsible for the "very strong" dollar by keeping interest rates high.

 

The president tweeted that he was not "thrilled" at the result.

 

Mr Trump said the strong dollar made it hard for the US's "great
manufacturers" to compete on a level playing field.

 

His comments come as economists fear a currency war could be sparked by
China's move to let the yuan fall to its lowest level in 11 years.

 

Stock markets around the world have been tumbling and the price of gold - a
safe investment - has hit six-year highs since China let its currency move
to below seven yuan on Monday.

 

The shock move is seen as an escalation in the US-China trade war.

 

With the US describing China as a "currency manipulator", markets are trying
to work out the next steps.

 

What is a currency war?

A currency war refers to a deliberate move by one country to engineer the
price of its currency to suit its economic policy.

 

Some nations devalue their currency to make their exported good more
competitive, boosting their overall domestic economies.

 

In the case of China, the authorities in the past have prevented the
currency from weakening by buying large amounts of the yuan.

 

That policy seems to have changed this week, when China appeared to abandon
that approach, which some economists said was keeping the yuan artificially
high.

 

This isn't the first currency spat to break out. The US, for instance, last
formally criticised China of being a "currency manipulator" in 1994.

 

More recently, in 2010, Brazil's finance minister, Guido Mantega, warned an
"international currency war" was taking place when Japan, South Korea and
Taiwan all tried to reduce the value of their currencies.

 

So is a currency war under way?

Some economists argue that a full-blown war is not under way, as neither
China nor the US is formally wading into the market to buy or sell its own
currency - the traditional method of moving a currency.

 

But Chris Turner, global head of strategy at Dutch bank ING, said that
between 2015 and 2016, the Chinese authorities spent $1tn trying to stop the
yuan weakening beyond seven to the dollar.

 

If a country buys large amounts of its own currency, it has the effect of
strengthening its value on international money markets.

 

This week, though, such attempts were not made.

 

It is significant, he said, because it "comes at the height of tensions
between the US and China in terms of trade".

 

Neil Shearing, chief economist at Capital Economist, points out that
"China's currency would be reduced already, were it not for the fact that
the People's Bank [of China] has been leaning against the market [until
now]".

 

What has sparked this?

Economists see the decision to let the currency move as a weapon in the
economic battle between the US and China.

 

It came after Donald Trump vowed to impose 10% tariffs on $300bn (£246.7bn)
of Chinese imports, in the latest stage of the two countries' trade tussle.

 

The People's Bank of China appears to have made a direct link to the
tariffs, blaming "trade protectionism measures and the imposition of tariff
increases on China".

 

The trade war had appeared to be having an impact on Chinese trade, although
data this week showed its exports started to increase again in July.

 

Why does the currency move matter?

It is already having a global impact, with central banks in New Zealand,
India and Thailand cutting rates on Wednesday. Such a move reduces a
currency: the New Zealand dollar, for instance, fell more than 2.6% on
Wednesday.

 

Megan Greene, economist and senior fellow at the Harvard Kennedy School,
told BBC Radio 4's Today programme there was a thought that this "might be
the beginning of a currency war".

 

"And if it is, we'll see lots of different countries trying to weaken their
currencies. Of course, everyone can't weaken their currency relative to
everyone else.

 

"The result will be an undermining of growth, higher inflation and huge
volatility in foreign exchange markets."

 

How did Donald Trump react?

After the actions of those other three central banks, the US president again
called on the US Federal Reserve to cut rates, issuing a series of tweets.

 

A rate cut would not only boost the economy but, in theory at least, reduce
the value of the soaring dollar.

 

Last month, the Fed had cut rates for the first time since 2008, with a 0.25
percentage point cut that took the federal funds target range to 2% to
2.25%.

 

Another way would be for the US to directly sell dollars to buy other
currencies, but Ms Greene said that while the US had about $100bn of
reserves which it could use to try to devalue its currency, it was not
enough to make much of a difference.

 

"If the US is cruising for a currency war, it doesn't actually have that
many tools to win one," she added.

 

So what happens next?

Treasury Secretary Steven Mnuchin will now engage with the International
Monetary Fund (IMF) with the intention to "eliminate" what the US describes
as "the unfair competitive advantage created by China's latest actions".

 

Ms Greene pointed out that the IMF had previously said China was not
manipulating its currency and warned it could be a "dead end".

 

It is making economists question what else the US might do, while the
president's tweets are already leading some to expect that the US could
start intervening directly.

 

John Normand, head of cross-asset fundamental strategy at JP Morgan, said he
did not think a currency war was under way yet, since the moves in the
Chinese currency this week were "private-sector driven" as international
investors withdrew funds from the country.

 

"Before Trump, people would have assumed a currency war wouldn't happen," he
said, adding that the US president "disregards all conventions".

 

What has happened in the past?

Agreements between the main trading nations have pledges not to manipulate
currencies, although there have been agreements between nations to intervene
in markets.

 

The 1985 Plaza Accord, for instance, was an agreement under which Japan,
France, Germany, the UK and the US agreed to boost the value of the dollar.

 

In 2000, central banks intervened to drive the euro higher after the
currency hit an all-time low.

 

And in 2011, countries jointly intervened in the currency markets to weaken
the Japanese yen after it rose to its strongest level since World War Two.

 

Even if direct intervention in the market does not take place, Kate
Phylaktis, professor of international finance at the Cass Business School,
pointed out that countries can use indirect methods such as capital controls
(when governments limit the flow of currencies in their countries) and
monetary policy.

 

Leaders can also try to make public remarks that can have an impact on the
value of their currencies. Such "talk" is something Mr Trump has accused the
European Central Bank of, when he said in June that the fall in the euro
against the dollar was "making it unfairly easier for them to compete
against the USA".

 

Mr Shearing points to examples where sharp devaluations have eventually -
although not immediately - boosted an economy, such as Argentina in 2001 and
the UK after Black Wednesday in 1992 when sterling crashed out of the
Exchange Rate Mechanism.

 

Countries can also cause havoc when they let their currencies float freely
again. In 2015, the Swiss franc soared as much as 30% in chaotic trade after
the central bank abandoned the cap on the currency's value against the euro
that had been in place since 2011.--BBC

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


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