Major International Business Headlines Brief::: 19 August 2019

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Major International Business Headlines Brief::: 19 August 2019

 


 

 


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*  Africa development bank says risks to growth 'increasing by the day'

*  Truworths to close up to 15 loss-making UK Office shoe stores

*  South Africa's Sasol delays results due to U.S. project glitch

*  Vodacom to invest more than $589 mln on South Africa network this year

*  South African retailer TFG to review Kenya, Ghana stores

*  Nigerian annual inflation at 11.08% in July - stats office

*  OPEC sees bearish oil outlook for rest of 2019, points to 2020 surplus

*  Argentina's economy minister resigns as peso sheds value

*  Lidl lines up suppliers to cover no-deal costs

*  Chancellor: I won't shift stamp duty to sellers

*  Hong Kong protests: 'We don't want to leave but may have no choice'

*  Huawei gets caught up in China territory controversy

*  Share trading in London delayed by technical issue

*  What has gone wrong with rail franchising?

 

 

 

 


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Africa development bank says risks to growth 'increasing by the day'

DAR ES SALAAM (Reuters) - The U.S.-China trade war and uncertainty over
Brexit pose risks to Africa’s economic prospects that are “increasing by the
day,” the head of the African Development Bank (AfDB) told Reuters.

 

The trade dispute between the world’s two largest economies has roiled
global markets and unnerved investors as it stretches into its second year
with no end in sight.

 

Britain, meanwhile, appears to be on course to leave the European Union on
Oct. 31 without a transition deal, which economists fear could severely
disrupt trade flows.

 

    Akinwumi Adesina, president of the AfDB, said the bank could review its
economic growth projection for Africa - of 4% in 2019 and 4.1% in 2020 - if
global external shocks accelerate.

 

“We normally revise this depending on global external shocks that could
slowdown global growth and these issues are increasing by the day,” Adesina
told Reuters late on Saturday on the sidelines of the Southern African
Development Community meeting in Tanzania’s commercial capital Dar es
Salaam.

 

 

 

    “You have Brexit, you also have the recent challenges between Pakistan
and India that have flared off there, plus you have the trade war between
the United States and China. All these things can combine to slow global
growth, with implications for African countries.”

 

    The bank chief said African nations need to boost trade with each other
and add value to agricultural produce to cushion the impact of external
shocks.

 

    “I think the trade war has significantly impacted economic growth
prospects in China and therefore import demand from China has fallen
significantly and so demand for products and raw materials from Africa will
only fall even further,” he said.

 

    “It will also have another effect with regard to China’s own
outward-bound investments on the continent,” he added, saying these could
also affect official development assistance.

 

    Adesina said a continental free-trade zone launched last month, the
African Continental Free Trade Area, could help speed up economic growth and
development, but African nations needed to remove non-tariff barriers to
boost trade.

 

    “The countries that have always been facing lower volatilities have
always been the ones that do a lot more in terms of regional trade and do
not rely on exports of raw materials,” Adesina said.

 

    “The challenges cannot be solved unless all the barriers come down. Free
mobility of labour, free mobility of capital and free mobility of people.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Truworths to close up to 15 loss-making UK Office shoe stores

JOHANNESBURG (Reuters) - South Africa’s Truworths International Ltd will
close up to 15 of its loss-making Office stores in the UK, its CEO said on
Friday, with an overhaul of the remainder of the shoe retailer expected to
boost sales and profits.

 

Office is battling tough conditions in Britain due to uncertainty over
Brexit and muted consumer sentiment, combined with pressures on store-based
retailers as shoppers move online.

 

The South African-listed clothing, shoes, jewellery and homeware retailer,
said on Thursday it was critically evaluating the real estate portfolio of
Office with a view to closing loss-making stores as leases come to an end.

 

A day after the retailer released its full-year results, Chief Executive
Michael Mark told analysts the group expects to close up to 15 of its
roughly 139 stores in the next two years, with possibly more to follow, and
also close three concessions that were “problematic”.

 

He added that the company would continue to focus on inventory management,
to arrest a decline in gross profit margins, and expanding and growing
e-commerce.

 

The Office acquisition in December 2015 was Truworths’ first foray into
Europe as the retailer looked to diversify from its home market, which has
been flooded by the entry of foreign retailers such as Australia’s Cotton On
and Inditex’s Zara.

 

But “just about everything happening in Britain today seemed implausible
just a few years ago,” Mark said, quoting John Rapley, a political economist
at the University of Cambridge in a recent Sunday Times article.

 

“We got our timing unfortunately very wrong,” he said, adding that the
acquisition had proved a poor investment so far.

 

In the year ended June 30, Office swung to an operating loss of 94.7 million
pounds ($115.11 million), hurt by an impairment charge of 97 million pounds,
results released after the market close on Thursday showed. Online sales
rose 10% but retail sales inched up just 1% to 279 million pounds.

 

Truworth’s annual group profit before tax tumbled 57.5%.

 

Its shares hit a nine-year low on Friday and closed 7.48% lower at 53.57
rand.

 

($1 = 0.8227 pounds)

 

 

 

South Africa's Sasol delays results due to U.S. project glitch

JOHANNESBURG (Reuters) - South Africa’s Sasol Ltd delayed the release of its
annual financial results on Friday due to possible “control weaknesses” at
its U.S. ethane cracker project, sending shares in the chemicals and energy
company down by more than 15%.

 

Sasol said its auditors would need to consider an independent report the
board had commissioned into its Lake Charles Chemicals Project (LCCP) and
therefore expected to announce fiscal 2019 results on Sept. 19 instead of
Aug. 19.

 

“Management and the board will assess such control weaknesses and identify
whether any further remedial actions are required,” the firm said in a
statement, without providing further detail.

 

The firm raised expected costs in May by around $1 billion following a
review by the project’s new management that revealed oversights such as
duplicate credits and overlooked contracts, adjustments for potential
insurance claims, procurement back-charges and remaining work and repairs.

 

The company said it still expected cost guidance for LCCP to between $12.6
billion and $12.9 billion but that it now expected full production at the
project to be delayed to around Aug. 26 from the previous guidance of end of
July after a technical challenge relating to a large heat exchanger.

 

The project in Louisiana, which will convert natural gas into plastics
ingredient ethylene, was initially expected to cost $8.9 billion and has
seen delays and hikes in costs.

 

Sasol, which is delaying its results for the first time, said it expected
guidance given in July - for a rise in annual core headline earnings per
share (HEPS) of between 1% and 11% - to remain the same.

 

HEPS is the main profit measure used in South Africa that strips out certain
one-off items.

 

Shares in Sasol, the world’s biggest maker of motor fuel from coal, were
down 12.3% to 244 rand at 0740 GMT, after trading as low as 233.93 rand

 

 

 

Vodacom to invest more than $589 mln on South Africa network this year

JOHANNESBURG (Reuters) - South African mobile phone operator Vodacom Group
will spend more than 9 billion rand ($589 million) this year on network
enhancements particularly in rural areas in its home market, its Chief
Technology Officer said on Thursday.

 

A branch of South African mobile communications provider Vodacom in Cape
Town is shown in this picture taken Nov. 10, 2015. REUTERS/Mike
Hutchings/File Photo

Vodacom, majority-owned by Britain’s Vodafone, invested 9.6 billion rand in
2018, Andries Delport said during a media briefing.

 

The investment will be spent on the firm’s rural coverage acceleration
programme, replacing and modernising base stations and digital services.

 

Vodacom has grown its South African rural network coverage significantly
over the past six years, covering over 16 million people with 4G/LTE
services.

 

Its 3G network is now available to more than 97% of the South African
population living in rural areas and 4G is available to 75%, Delport said.

 

“Despite the lack of available spectrum, Vodacom has made substantial
progress in improving network coverage in both rural and deep rural areas of
South Africa,” he said.

 

“With rural land making up 98.6% of the total land area in South Africa,
Vodacom has prioritised connectivity in these regions, facilitating access
to the digital resources which many of us take for granted in cities.”

 

Vodacom has been battling with vandalism and theft at its base stations,
where as many as 500 towers out of the 14,000 have either been vandalised or
had batteries stolen every month.

 

“This year alone the investment is about 250 million rand to 300 million
that we’ll invest just in batteries,” said Delport.

 

($1 = 15.2734 rand)

 

 

 

South African retailer TFG to review Kenya, Ghana stores

JOHANNESBURG (Reuters) - South African fashion retailer TFG will decide next
year whether to continue trading in Kenya and Ghana where it has at least
six stores in each market, Chief Executive Officer Anthony Thunstrom said on
Thursday.

 

South African retailers have been performing poorly in the rest of Africa as
low economic growth and currency devaluations hit sales. In July, department
store chain Woolworths retreated from West Africa for a second time.

 

“We’ve been very cautious in terms of where we have expanded. Closer to home
has been better for us. Much less risky and at the moment we’re doing okay,”
Thunstrom said.

 

TFG will review economic growth, legislature and lease negotiation in Kenya
and Ghana before making its decision, Thunstrom said.

 

“The other difficulty is, because of where the commodity cycle is,
government revenues are massively down in those countries. So you get all
sorts of funny tax things coming up where suddenly the VAT rate has
increased overnight or you can’t claim the input VAT and your cost of
business goes up 20%,” he told reporters.

 

LURING MILLENNIALS

In its South African home market, Thunstrom said TFG will be launching a
smaller format Sportscene store that will have entertainment such as a
basketball court and a DJ booth, in an effort to lure millennials into its
stores and away from online players such as Naspers majority-owned
Superbalist.

 

The new format store will also have a tattoo parlour, a play station and a
sneaker cleaning service, he said. TFG’s Sportscene brand sells designer
sneakers and athleisure wear.

 

The store will be launched in September in Johannesburg’s upscale Sandton
shopping and financial district, Thunstrom said.

 

“Consumers do not enjoy shopping, for a variety of different reasons, in big
department store formats anymore,” Thunstrom said.

 

“They (department stores) almost have no customer service, anything you can
buy in a department store today you can pretty much buy online or at a
specialist retailer and (they) do little if anything to create customer
experience.”

 

In the full-year ended March, TFG reported a 19.6% rise in retail annual
sales to 34.1 billion rand ($2.23 billion), while earnings before interest,
tax, depreciation and amortization (EBITDA) rose 6.2% to 5.2 billion rand.

 

($1 = 15.2652 rand)

 

 

 

Nigerian annual inflation at 11.08% in July - stats office

LAGOS (Reuters) - Annual inflation in Nigeria stood at 11.08% in July,
compared with 11.22% in June, the National Bureau of Statistics said on
Friday in a report.

 

A separate food price index showed inflation at 13.39% in July, compared
with 13.56% in June.

 

 

 

OPEC sees bearish oil outlook for rest of 2019, points to 2020 surplus

LONDON (Reuters) - OPEC delivered a downbeat oil market outlook for the rest
of 2019 on Friday as economic growth slows and highlighted challenges in
2020 as rivals pump more, building a case to keep up an OPEC-led pact to
curb supply.

 

In a monthly report, the Organization of the Petroleum Exporting Countries
cut its forecast for global oil demand growth in 2019 by 40,000 barrels per
day (bpd) to 1.10 million bpd and indicated the market will be in slight
surplus in 2020.

 

The bearish outlook due to slowing economies amid the U.S.-China trade
dispute and Brexit could press the case for OPEC and allies including Russia
to maintain a policy of cutting output to support prices. Already, a Saudi
official has hinted at further steps to support the market.

 

“While the outlook for market fundamentals seems somewhat bearish for the
rest of the year, given softening economic growth, ongoing global trade
issues and slowing oil demand growth, it remains critical to closely monitor
the supply/demand balance and assist market stability in the months ahead,”
OPEC said in the report.

 

It is rare for OPEC to give a bearish forward view on the market outlook and
oil pared an earlier gain after it was released to trade below $59 a barrel.

 

Despite the OPEC-led cut, oil has tumbled from April’s 2019 peak above $75
pressured by trade concerns and an economic slowdown.

 

OPEC, Russia and other producers have since Jan. 1 implemented a deal to cut
output by 1.2 million bpd. The alliance, known as OPEC+, in July renewed the
pact until March 2020 to avoid a build-up of inventories that could hit
prices.

 

OPEC left its forecast for 2020 oil demand growth at 1.14 million bpd, up
slightly from this year. But OPEC added that its forecast for 2020 economic
growth faced downside risk.

 

“The risk to global economic growth remains skewed to the downside,” the
report said. “Especially trade-related developments will need to be
thoroughly reviewed in the coming weeks with some likelihood of a further
downward revision in September.”

 

OPEC trimmed its global economic growth forecast to 3.1% from 3.2% and, for
now, kept its 2020 forecast at 3.2%.

 

RISING INVENTORIES

The report also said oil inventories in developed economies rose in June,
suggesting a trend that could raise OPEC concern over a possible oil glut.

 

Stocks in June exceeded the five-year average - a yardstick OPEC watches
closely - by 67 million barrels.

 

This is despite the supply cuts of OPEC+ and additional involuntary losses
in Iran and Venezuela, two OPEC members which are under U.S. sanctions.

 

OPEC deepened its cuts in July, the report showed. According to figures OPEC
collects from secondary sources, output from all 14 members fell by 246,000
bpd from June to 29.61 million bpd as Saudi Arabia cut supply further.

 

OPEC and its partners have been limiting supply since 2017, helping to clear
a supply glut that built up in 2014-2016 when producers pumped at will, and
revive prices.

 

The policy has been giving a sustained boost to U.S. shale and other rival
supply, and the report suggests the world will need significantly less OPEC
crude next year.

 

The demand for OPEC crude will average 29.41 million bpd next year, OPEC
said, down 1.3 million bpd from this year. Still, the 2020 forecast was
raised 140,000 bpd from last month’s forecast.

 

The report suggests there will be a 2020 supply surplus of 200,000 bpd if
OPEC keeps pumping at July’s rate and other things remain equal. Last
month’s report had implied a larger surplus of over 500,000 bpd.

 

 

 

Argentina's economy minister resigns as peso sheds value

Argentina's economy minister Nicolas Dujovne has resigned amid a financial
crisis exacerbated by the president's defeat in a primary poll.

 

The country's peso shed 20% of its value against the US dollar after
President Mauricio Macri suffered the resounding loss last Sunday.

 

In a letter to the president, Mr Dujovne said he had given his all.

 

Mr Macri was beaten in the primary elections by his left-wing rival Alberto
Fernández.

 

Mr Fernández's running mate is former president Cristina Fernández de
Kirchner who presided over an administration remembered for a high degree of
protectionism and heavy-handed state intervention in the economy.

 

He won the primary with 47.7% of the votes with Mr Macri receiving 32.1%.

 

Is this the end of Macri's vision for Argentina?

Macri trounced in primary vote

Following the primary result, credit-rating agencies Fitch and Standard &
Poor's downgraded the country's debt rating amid concerns about a possible
future default.

 

Days after the defeat, Mr Macri announced a series of measures including
income tax cuts and increases in welfare subsidies. Petrol prices will also
be frozen for 90 days.

 

Mr Dujovne said that the government's economic team needed "significant
renewal".

 

"I believe my resignation is in keeping with my place in a government that
listens to the people and acts accordingly," he wrote.

 

He will be replaced by Hernan Lacunza, the current economy minister for
Buenos Aires province.

 

A cabinet shuffle has been rumoured for several days.

 

Mr Macri was elected in 2015 on promises to boost Argentina's economy with a
sweep of liberal economic reforms.

 

After taking power, he sought to restore international trust in the economy
with budget cuts and the elimination of subsidies.

 

In May 2018, he announced the country would be asking for a "preventative
credit line" of $50bn (£41bn) from the International Monetary Fund. The deal
was negotiated by Mr Dujovne.

 

Argentina is currently in recession and posted 22% inflation for the first
half of the year, one of the highest rates globally.

 

More than a third of the country's population is currently living in
poverty, according to official figures.--BBC

 

 

 

Lidl lines up suppliers to cover no-deal costs

Lidl's Irish business has reminded British suppliers they are expected to
pay any EU import tariffs imposed on goods crossing borders after Brexit.

 

Currently, as both countries are member states, no tariffs are paid.

 

But Lidl's current contracts with suppliers contain a clause saying goods
must be delivered with tariffs paid.

 

The supermarket said it had held workshops with British suppliers to make
sure they had the necessary information to "avoid any disruption".

 

"We have been working closely for over two years with external consultants,
not only to get our business Brexit ready, but also to ensure our valued
suppliers are as prepared as possible.

 

"All existing Lidl contracts contain a DDP (Delivered Duty Paid) clause. In
an effort to understand the level of preparedness of key UK suppliers we are
communicating proactively with them and working together to resolve any
potential barriers to supply," the supermarket said in a statement.

 

The "delivered duty paid" clause means that the cost of transporting goods,
including tariffs on EU exports, are the responsibility of the supplier.

 

In the event of a no-deal Brexit, tariffs on EU exports would come into
force automatically, according to World Trade Organization rules.

 

EU tariffs on food can be both high and complex.

 

On some types of beef it is 12.8% plus 265 euros per 100kg for meat from
outside the EU. The average for dairy products is more than 35%.

 

 

Suppliers told the Times newspaper that other supermarkets are also likely
to enforce deals similar to Lidl's agreement.

 

A supermarket source told the newspaper that the potential costs were too
high for all suppliers to be able to cover them.

 

Prime Minister Boris Johnson has said that the UK will leave the UK with or
without a deal on 31 October.

 

While he has committed to cutting tariffs on foreign goods being imported
into the UK, tariffs for goods exported from the UK to the EU are outside of
his control.--BBC

 

 

 

Chancellor: I won't shift stamp duty to sellers

Chancellor Sajid Javid has said he has no plans to make house sellers rather
than buyers pay stamp duty tax.

 

"I wouldn't support that," the chancellor said in a tweet on Sunday.

 

His comments came after the Times reported on Saturday that Mr Javid was
considering the idea, to save first-time buyers from paying the tax.

 

"I know from the Ministry of Housing, Communities and Local Government that
we need bold measures on housing - but this isn't one of them," Mr Javid
said.

 

Stamp duty - a purchase tax paid in England and Northern Ireland on
properties worth more than £125,000 - was abolished in 2017 for first-time
buyers spending up to £300,000 on a house.

 

Forcing home sellers rather than buyers to pay the stamp duty tax would have
made house purchases cheaper for those buying their first home or people
trying to upgrade to larger homes, but could have made owners of larger
homes reluctant to downsize.

 

The latest housing figures suggest that both house prices and sales are
losing momentum amid Brexit uncertainty.

 

Key aspects of the housing market were "pretty much flatlining", the Royal
Institution of Chartered Surveyors (Rics) said earlier this month.

 

In the interview with the Times, Mr Javid refused to give details of his
plans to reform the tax system, instead saying "wait and see for the Budget"
which is due to take place in the autumn.

 

Mr Javid said he had not yet decided whether to hold the Budget before 31
October, the date the UK is expected to leave the EU.--BBC

 

 

 

Hong Kong protests: 'We don't want to leave but may have no choice'

Hong Kong seemed an obvious place for co-founders Jamie Wilde and Taylor
Host to set up their artificial intelligence start-up.

 

They had lived there for several years and knew the financial hub well.

 

"It's a business-friendly jurisdiction, easy to build a professional team
and it's easy to raise financing here," British-born Mr Wilde says.

 

The co-founders set up Miro in Hong Kong in 2017. The firm uses artificial
intelligence and computer vision to gather data for sportswear companies to
enable them to target consumers more effectively.

 

Business was looking up, sales were growing and investors from the US were
keen to invest in the start-up.

 

But then Hong Kong got hit by a double whammy: it became caught in the
cross-fire of the US-China trade war, and months of street protests
tarnished the territory's reputation as an investment destination.

 

"We found we were often challenged by potential investors about why we are
based in Hong Kong," says Mr Wilde.

 

"The perception driving a lot of these investment decisions in the US was
that Hong Kong is getting closer to China. The risk of staying here has gone
up."

 

Why are there protests in Hong Kong?

Hong Kong protests in 300 words

In pictures: Hong Kong protesters occupy terminal

The firm lost out on two potential investments, with its Hong Kong base
given as one of the reasons behind the decision.

 

Mr Wilde and Mr Host have decided to move their company's headquarters from
Hong Kong to the US, but are keeping some operations in the city.

 

They're not alone in re-evaluating their strategy about whether to keep
their business in Hong Kong.

 

'Is Hong Kong safe?'

Months of political unrest in Hong Kong is threatening the city's global
status as a major financial hub. Protests against an extradition bill have
broadened into a pro-democracy movement concerned about China's growing
influence in the city.

 

Those protests led to sweeping flight cancellations earlier this week. Hong
Kong-based airline Cathay Pacific said the disruption had affected more than
55,000 passengers, with a total of 272 departures and arrivals cancelled.

 

Cathay Pacific boss resigns

Businesses are seeking advice on Hong Kong's safety and are being advised to
come up with contingency plans in the face of further protests.

 

Increasingly, many companies are considering bypassing Hong Kong altogether.

 

Protesters have more recently demonstrated in Hong Kong's airport,
disrupting thousands of travellers.

Dan Harris, managing partner of law firm Harris Bracken, said that over the
past three months businesses have been asking: "Is Hong Kong safe? Should I
send our people there?"

 

He is based in the US and advises clients on their strategy in China and
Hong Kong.

 

"What we are mostly getting is clients saying they will not be setting up in
Hong Kong, or just asking our opinion on what they should do to lower their
footprint in Hong Kong."

 

Is Hong Kong's star status at risk?

Hong Kong has long been the premier destination for doing business in Asia -
a gateway to China, and the rest of the region.

 

Its stock market ranked as the third largest in Asia in 2018 and fifth
largest in the world in terms of market capitalisation, according to the
Hong Kong Trade Development Council.

 

The recent protests have grown to reflect wider demands for democratic
reform ahead of a 2047 deadline.

 

That's the year when Hong Kong's Basic Law agreed between Britain and China,
guaranteeing a special level of autonomy for the territory, ends.

 

Hong Kong is one of Asia's most important financial hub.

But while protesters are fighting for the kind of rights that first gave
Hong Kong its business appeal, some worry it is that fight that is now
threatening the city's livelihood.

 

The latest growth figures show that Hong Kong's economy grew by 0.5% in the
second quarter of 2019 from a year earlier, its weakest pace since the
global financial crisis of a decade ago.

 

Julian Evans-Pritchard, senior China economist at Capital Economics, says
there is "a growing risk of an even worse outcome if a further escalation
triggers capital flight".

 

Reflecting this gloomy outlook, the Hong Kong government has lowered its
growth forecast for this year to 0%-1% from 2%-3% previously. It has also
announced a $2.4bn (£2bn) economic stimulus package to shore up growth in
the territory.

 

What's the business impact so far?

More than two months of protests have already taken a toll on Hong Kong.

 

Bank branches near protests were temporarily shut in June, while one analyst
estimates that the recent airport disruption has cost the Hong Kong economy
some 300 million Hong Kong dollars ($38m; £32m).

 

"If the disturbance [lasts] a longer period of time, definitely the
confidence of international investors and international passengers in the
normal operation of the Hong Kong airport and aviation industry would be
very much tarnished," said Dr Law Cheung-Kwok, director of policy and
research at the Chinese University of Hong Kong.

 

He said the aviation sector as a whole contributed about 8% to Hong Kong's
gross domestic product.

 

Tourism too has also been hit by the turmoil, with preliminary figures
showing a "double-digit decline" in the number of visitor arrivals in the
second half of July.

 

Anecdotal evidence shows people are increasingly considering jumping ship.
Inquiries about residency and citizenship elsewhere have increased, while
private banking clients are making inquiries about moving accounts to
Singapore.

 

And that's the conundrum that Miro's co-founders are now facing - whether or
not to leave a place they have long called home.

 

Initially peaceful protests have become increasingly violent, with some
saying unwarranted force by the police has escalated tensions.

 

"We have been having more difficult conversations considering physical
relocation, for the safety of the team," says Mr Wilde. His office is based
in the heart of the busy Wan Chai district, near where many of the protests
have taken place.

 

"We don't want to leave this city, but if things continue to escalate, we
may have no choice."--BBC

 

 

 

Huawei gets caught up in China territory controversy

China's Huawei, the tech giant under scrutiny for its alleged links to the
Chinese government, has become caught up in a controversy surrounding the
representation of Taiwan.

 

Huawei has come under fire for allegedly implying in its smartphone settings
that Taiwan is independent.

 

Despite a backlash on social media, Huawei has declined to comment.

 

It is the latest firm - and an unexpected one - to get caught up in this
kind of controversy.

 

Global brands such as Versace, Coach, Givenchy, and Swarovski all faced
similar criticism this week for listing Hong Kong, Macau, and Taiwan as a
separate countries or regions - not part of China - on their official
websites or branded T-shirts.

 

It comes at a time of heightened sensitivities, as Hong Kong has faced weeks
of unrest, with pro-democracy protestors clashing with police.

 

'Outrageous'

Until now, Huawei has been in the spotlight for allegedly posing a national
security risk, which the firm denies.

 

But now users on Chinese social media Weibo have expressed anger that Taiwan
was listed as its own country when the default language in Huawei's
smartphone setting was set to traditional Chinese - the script used in
Taiwan and Hong Kong. Mainland China mostly uses simplified Chinese.

 

"This is outrageous. This is how Huawei repays China?" one user said on
Weibo.

 

Brand 'witch hunt' takes over Chinese internet

How damaging is the Huawei row for the US and China?

While some users said the issue had been fixed, many remained angry that the
company had failed to address the issue publicly.

 

"Are you just ignoring [this] and [you're] not going to explain why this
happened? As a user of Huawei products
 I am disgusted," one user said.

 

Huawei saga

It is a new kind of controversy for Huawei, which for months has been under
scrutiny for its alleged close links with China's government.

 

The US blacklisted the firm in May saying it posed a national security risk.
The company vehemently denies this and has repeatedly said it is independent
from the Chinese government.

 

Huawei has also come to symbolise the tensions between the US and China that
have been playing out in trade and, more recently, the technology sector.

 

The US has targeted Huawei with trade restrictions, while also pushing to
persuade allies to ban the Chinese company over the potential risks of using
its products in next-generation 5G mobile networks.--BBC

 

 

 

Share trading in London delayed by technical issue

Trading in the biggest shares listed on the London Stock Exchange was
delayed for more than an hour, in the longest outage in more than eight
years.

 

Shares in the FTSE 100 and FTSE 250 indexes were affected, although smaller
stocks traded as normal at 08:00.

 

Trading resumed at 09:40 - the longest closure since February 2011, when it
was shut for more than four hours.

 

The last time the market opened late was in June 2018, when it was delayed
by an hour.

 

The LSE said trading was delayed while it investigated a "potential trading
services issue".

 

When trading eventually began, the FTSE 100 - which had fallen to a
six-month low on Thursday - rose, and finished up 0.7% to 7,117.15.

 

The London Stock Exchange said it had "experienced a technical software
issue this morning that affected trading in certain securities, including
FTSE 100 and FTSE 250 stocks".

 

"Following resolution of the issue regular trading in all securities
commenced at 09:40," a spokesperson for the exchange said.--BBC

 

 

 

What has gone wrong with rail franchising?

The debate over the future of running Britain's rail network flared up once
more this week.

 

While the government tepidly defended its system, unions and passengers
united to attack it as prices were hiked again above the government's own
preferred measure of inflation.

 

Even the Department for Transport called the current model "flawed" as it
announced that FirstGroup was to take over the running of the London Euston
to Glasgow Central route.

 

The Transport Secretary, Grant Shapps, hailed the deal as a shift to a new
model for rail.

 

But the RMT union's general secretary, Mick Cash, described it as a "another
political fix by a government whose privatised franchise model is collapsing
around their ears".

 

Government 'should not manage railways'

Are UK train fares the highest in Europe?

FirstGroup replaces Virgin to run West Coast route

It all comes as rail punctuality across the country languishes at a 13-year
low.

 

And despite growing passenger anger, fares will rise next year in line with
the abandoned Retail Prices Index at 2.8%, rather than the lower Consumer
Prices Index.

 

"The system is clearly not working, everybody agrees that it's not working,"
rail writer Christian Wolmar tells the BBC.

 

What's going wrong?

The Department for Transport maintains that privatisation has worked. It
points out that passenger numbers have doubled, while the rail system has
attracted £6.7bn of private investment and added 4,600 new daily services.

 

But the mounting criticism of the system was clearly not what the government
had hoped for when it privatised the network in the 1990s.

 

Network Rail, then known as Railtrack, was set up to look after the tracks,
tunnels and signalling. Meanwhile, private companies could compete to run
the trains.

 

At the time, the government hoped that those private firms would compete on
most routes through a system known as "open access". Rather than bidding for
entire lines, services themselves were on offer.

 

It also asked firms to bid to run subsided franchises on loss-making routes.

 

But that left the taxpayer to pick up the tab for all loss-making services.
When the network was publicly-owned, these would have been subsidised by the
profitable ones.

 

As a result, franchises for entire lines became the norm to stop the
cornering of profitable services, and now less than 1% of passengers travel
on open-access services.

 

'Little control'

The effect of that has been a lack of competition among train operators
which is bad for consumers, says Professor Mark Barry from Cardiff
University.

 

"We've got a system that was meant to bring competition to railways
post-privatisation and provide some means for companies to innovate, take a
risk in return to procure some value.

 

"The reality is though, there isn't a lot of competition on the railway -
apart from the franchising system itself."

 

This might suggest that train operators are having an easy ride and raking
in profit, but the opposite is often the case.

 

As Mr Wolmar points out, in reality rail companies have very little control
over their revenues. They can introduce wi-fi on their trains and launch
advertising campaigns but much of their fortune depends on factors beyond
their control, such as employment levels and economic growth.

 

In a competitive tendering environment, that can mean that the rail firms
make a loss over the course of rail franchise, which typically lasts seven
years.

 

And that explains, in part, the failure of Stagecoach and Virgin Trains'
East Coast Main Line franchise, which was handed back to the government last
year.

 

Prof Barry thinks the franchising model should change so that the franchisee
is not left with the revenue risk.

 

Instead, he argues, the government should award contracts by telling the
bidders how much money is available and asking them to compete on quality.

 

He said Transport for Wales had experimented with that model successfully.

 

The man charged with reviewing the franchise system, former British Airways
boss Keith Williams, may have an even more radical suggestion.

 

He has said a "Fat Controller" type figure, independent from government,
should be in charge of day-to-day operations.

 

Mr Williams has also said he believes that, in the future, rail franchises
should be underpinned by punctuality and other performance-related targets.

 

The government launched the review after passengers in northern and southern
England experienced chaos over several weeks last summer following the
introduction of a new timetable.

 

His review of the rail system will be published this autumn.

 

A Department for Transport spokesperson said: "The recently awarded West
Coast Partnership represents a decisive shift towards a new model for rail.
It is a partnership supported by Keith Williams, built with the flexibility
to respond to his recommendations and deliver fundamental reform to a flawed
system.

 

"The transport secretary has asked Keith to produce his recommendations for
a White Paper, with fearless proposals that will deliver a consumer focussed
railway system fit for the 21st Century."--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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