Major International Business Headlines Brief::: 20 August 2019

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Major International Business Headlines Brief::: 20 August 2019

 


 

 


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*  Nigeria cbank head meets London fund managers -sources

*  South Africa's rand falls as investors weigh local, global risks

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

*  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

*  Corporate leaders scrap shareholder-first ideology

*  Juul: Vaping attracts fresh funding despite new lawsuits

*  US delays Huawei trade ban for another 90 days

*  Trump calls for big rate cut and economic stimulus

*  Greene King pub giant snapped up by Hong Kong firm CKA

*  No-deal papers reveal council fears over food supply

*  Brexit: The plan to force companies to be no-deal ready

 

 

 

 


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Nigeria cbank head meets London fund managers -sources

ABUJA (Reuters) - Nigeria’s Central Bank Governor Godwin Emefiele met fund
managers in London last week to lure investors back into the local naira
currency, two banking sources told Reuters on Monday.

 

Authorities are hoping to boost liquidity on the forex market after the
naira weakened.

 

Emefiele told investors that currency stability would continue, a fund
manager and a banking source said. The naira weakened to 364 last week as
oil prices fell.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South Africa's rand falls as investors weigh local, global risks

(Reuters) - South Africa’s rand weakened on Monday as traders and investors
continued to weigh heightened global growth risks against local uncertainty,
while equities rose in line with global stock markets.

 

At 1555 GMT the rand was 0.82% weaker at 15.4150 per dollar, tracking
weakness in most emerging markets currencies as trade worries linger.

 

The rand has fallen more than 7% since the beginning of August, pressured by
the rising likelihood of a credit ratings downgrade by Moody’s linked to a
massive, additional bailout for state power firm Eskom and signs of slower
global growth.

 

The inversion of the U.S. Treasury bond yield curve - widely viewed as a
sign of looming global recession - for the first time since 2007, also put
pressure on the rand last week.

 

“Lingering concerns over a global recession will continue influencing market
sentiment in the week ahead, with world equities, emerging markets and
riskier currencies in the direct firing line,” Lukman Otunuga, a senior
research analyst at FXTM said in a note.

 

“Although treasury yields are recovering from record lows, the movements in
bond markets will be monitored closely by investors.”

 

Locally, traders will also look to Wednesday’s release of local consumer
price inflation for July, with the rand’s attraction as a carry yield target
the key focus.

 

“While the rand is positioned to react on the inflation data, where the
currency concludes the week will be influenced by external forces,” said
Otunuga.

 

On the bourse, however, stocks rose to a three-month high. The Johannesburg
Stock Exchange’s broader all-share index closed 0.95% up to 54,386 points,
while the benchmark Top-40 index gained 1.01% to 48,647 points.

 

Leading the blue-chip index upwards was chemicals and energy company Sasol,
which rose 3.29% to 273.71 rand, while miner Anglo American gained 3.07% to
322.85 rand. Pharmacist Clicks also increased 2.57% to 198.07 rand.

 

Ryan Woods, trader at Independent Securities, said the stock market was
lifted by factors including the prospect of government stimulus to stave off
recession Germany.

 

China’s central bank also unveiled interest rate reforms expected to lower
corporate borrowing costs, boosting hopes that major economies would seek to
prop up stalling growth with fresh stimulus measures and lifting stock
markets around the world.

 

Bonds weakened, with the yield on the benchmark paper due in 2026 adding 4.5
basis points to 8.43%.

 

 

 

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.”

 

 

 

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.

 

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.

 

 

 

Corporate leaders scrap shareholder-first ideology

One of the US's most powerful business groups has abandoned the
shareholder-first idea that has driven capitalism for decades.

 

The Business Roundtable said the pursuit of shareholder interests is no
longer the central purpose of corporate America.

 

Companies should focus on social responsibilities as well as profits, the
organisation said.

 

Business Roundtable members include some of the biggest firms in the US.

 

A statement released on Monday, titled Business Roundtable Redefines the
Purpose of a Corporation to Promote "An Economy That Serves All Americans",
was signed by the heads of more than 180 US companies. These included the
chief executives of Amazon, American Airlines, and America's biggest bank,
JPMorgan Chase.

 

The statement marks the first time the nearly 50-year-old group has said
shareholder value is not the first priority. Shareholder primacy was an
ethos championed by Nobel Prize-winning economist Milton Friedman and has
been the foundation of corporate purpose.

 

The new mission statement comes at a time when companies are increasingly
taking stances on issues outside of the corporate sphere due to pressure
from activists amplified by social media and demands from their own
employees.

 

'Those of us who are blessed must pay more tax'

The statement outlines five priorities, including commitments to invest in
employees by providing fair wages and "important benefits," support
communities where they operate and dealing ethically with suppliers.

 

'American dream fraying'

"The American dream is alive, but fraying," said Jamie Dimon, chairman and
chief executive of JPMorgan Chase, and chairman of Business Roundtable.

 

"Major employers are investing in their workers and communities because they
know it is the only way to be successful over the long term. These
modernized principles reflect the business community's unwavering commitment
to continue to push for an economy that serves all Americans."

 

Johnson & Johnson chief executive Alex Gorsky added: "This new statement
better reflects the way corporations can and should operate today. It
affirms the essential role corporations can play in improving our society
when CEOs are truly committed to meeting the needs of all stakeholders."

 

Other signatories include General Motors' boss Mary Barra, Ford's Jim
Hackett, and Apple's Tim Cook.

 

But some critics were sceptical, with Larry Summers, who served as US
Treasury secretary under President Bill Clinton, saying there was no legal
requirement on firms to change their approach.

 

He told the Financial Times: "I worry the Roundtable's rhetorical embrace of
stakeholders is in part a strategy for holding off necessary tax and
regulatory reform."--BBC

 

 

 

Juul: Vaping attracts fresh funding despite new lawsuits

Investors have pumped another $325m into e-cigarette market leader maker
Juul Labs despite growing health concerns and fresh legal action.

 

The money will be used to finance the US company's global expansion at a
time of increased regulatory scrutiny on its home turf.

 

Juul, 35%-owned by Marlboro maker Altria, has been accused of targeting its
vaping devices at children.

 

On Monday, Bloomberg reported the company faced another lawsuit.

 

A 19-year-old claimed in court filings in Chicago that he became addicted to
nicotine and suffered worsening asthma symptoms after he began using Juul's
device at the age of 16.

 

He alleges that Juul and Philip Morris (owned by Altria) violated the
Racketeer Influenced and Corrupt Organizations Act, adopting the tobacco
industry's past use of catchy advertising campaigns aimed at children.
Several other individuals have already started legal action against Juul.

 

E-cig boss apologises to parents over child vaping

Juul recently launched its products in South Korea, the Philippines and
Indonesia, and has stepped up marketing in the UK.

 

But in the US, the company faces increased scrutiny, including from the Food
and Drug Administration.

 

'Sorry'

The US Surgeon General has called vaping an "epidemic", and the Centers for
Disease Control and Prevention said on Saturday it is looking into a cluster
of 94 possible cases of severe lung illness associated with vaping in 14
states.

 

In June, San Francisco banned the sale of e-cigarettes and online deliveries
to addresses in the city.

 

The company has tried to tackle use by children, including withdrawing from
sale its popular sweet and fruit flavours.

 

Juul has also shut its Facebook and Instagram account after being accused by
critics of marketing to young people. The company's early adverts featured
bright colours and young models.

 

In July, the boss of Juul apologised to parents whose children were vaping.
"I'd tell [parents] I'm sorry their child's using the product. It's not
intended for them," Kevin Burns said in a television documentary aired by
CNBC.

 

The BBC contacted Juul for comment but had yet to receive a response.--BBC

 

 

 

US delays Huawei trade ban for another 90 days

The US Commerce Secretary, Wilbur Ross, has confirmed a ban on Chinese
technology giant Huawei will not come into force for another 90 days.

 

The US blacklisted the company in May because of national security concerns.

 

Huawei was then granted a temporary permit in order to ease the transition,
which was due to expire on Monday.

 

However, Mr Ross added a further 46 Huawei affiliates would now be added to
the US Entity List, a blacklist of firms with which the US will not trade.

 

The reprieve was designed to allow companies such as Google to trade with
Huawei while adjusting to the restrictions.

 

And Mr Ross said the extension would help US customers.

 

"We're giving them a little more time to wean themselves off," he said.

 

Huawei said in response that it was opposed to the decision to add the extra
affiliates to the Entity List and felt it was politically motivated.

 

"Today's decision won't have a substantial impact on Huawei's business
either way," the firm said in a statement.

 

On Sunday, US President Donald Trump said Huawei was a company "we may not
do business with at all", which some had interpreted as signalling the
reprieve would not be extended.

 

Huawei has been under severe international scrutiny in recent months for its
alleged close links to the Chinese government.

 

The US, which has long claimed Huawei poses a national security risk,
blacklisted the company in May.

 

The US Commerce Department added Huawei to its Entity List, banning it from
acquiring technology from US companies without government approval.

 

Huawei says it is independent from the Chinese government and vehemently
denies it poses a national security risk.

 

The dispute has come to symbolise the growing rivalry between the US and
China, which have been fighting a trade war for more than a year.--BBC

 

 

 

Trump calls for big rate cut and economic stimulus

The US central bank should consider cutting interest rates by one percentage
point and introduce "some quantitative easing" stimulus measures, president
Donald Trump has said.

 

In a Twitter post he again complained about a strong dollar, which "is sadly
hurting other parts of the world".

 

The remarks came hours after the president said the US economy is not
falling into a recession.

 

The economy is doing "tremendously well", he said.

 

Mr Trump has posted a series of critical tweets in recent months aimed at
the Federal Reserve and its chief Jerome Powell. Last week the president
called him "clueless" for not cutting rates sooner.

 

A US-China trade war, gloomy economic data from Germany, and uncertainties
over the UK's exit from the European Union have unsettled share markets.

 

There are also worries that the bond markets are flashing recession signals.
It is now cheaper for the US government to borrow for 10 years rather than
two - an indication that lenders fear short-term economic risks have
increased.

 

Mr Trump's suggestion on Monday that the Fed should consider a return to its
crisis-era money-printing programme comes despite him insisting a day
earlier that the US economy was in good health.

 

"I don't think we're having a recession," the president said. "We're doing
tremendously well, our consumers are rich, I gave a tremendous tax cut, and
they're loaded up with money".

 

He pointed to last week's healthy profits from Walmart, the US retailer
often described as the world's biggest, and pointed to a strong performance
from US consumers.

 

'QE not the answer'

"Most economists actually say we are not going to have a recession. Most of
them are saying we will not have a recession, but the rest of the world is
not doing well like we are doing."

 

White House economic adviser Larry Kudlow also said on Sunday there was "no
recession in sight", telling Fox News Sunday: "Consumers are working. Their
wages are rising. They are spending and they are saving."

 

Are markets signalling that a recession is due?

Fed member Eric Rosengren, president of the Boston Federal Reserve Bank,
warned that any lowering of interest rates could encourage a build up of
debt as consumers borrow more.

 

"And is this the right stage in the cycle for us to encourage people to be
taking on more debt?" he said in an interview broadcast on Bloomberg
Television. Mr Rosengren was one of two dissenting votes at the US central
bank on its decision last month to cut borrowing costs for the first time
since 2008.

 

He also warned against more stimulus, saying that just because other
countries are weak does not means the US should be easing.

 

Markets around the world were rattled last week by the movement in the bond
markets, which also knocked stock markets.

 

On Wednesday last week, US stock markets fell by about 3% when the yield
curve inverted, although they had recovered lost ground by the end of the
week.

 

Last month, the US Federal Reserve cut interest rates for the first time
since 2008, and more cuts are expected. Janus Henderson's Laura Foll told
the BBC's Today Programme that the US central bank was "responding to global
events" such as the contraction in both the UK and German economies during
the second quarter.

 

The German economy contracted by 0.1% in the second quarter of the year,
according to figures released last week, and its central bank said on Monday
that it could shrink again in the third quarter - indicating a recession.

 

"Overall economic performance could again decline slightly," the Bundesbank
said in a monthly report. "The main reason for this is the continuing
downturn in industry."

 

The US economy also slowed in the last quarter, growing at an annualised
pace of 2.1%.

 

The US president has published about 40 tweets either criticising Fed
chairman Jerome Powell or pushing for a rate cut.

 

"Of course, it is really hard to know how much of an effect Trump is
having," Ms Foll said.

 

"I don't think you can rule out the extreme pressure the Fed is under from
Trump, but it is really hard to know how much of a direct knock-on effect
that is having on policy."--BBC

 

 

 

Greene King pub giant snapped up by Hong Kong firm CKA

Pub giant and brewer Greene King has agreed to be bought by Hong Kong
operator CKA, the latest deal in a wave of consolidation in the sector.

 

Suffolk-based Greene King owns roughly 2,700 pubs, restaurants and hotels in
total across the UK.

 

The deal values Greene King at £2.7bn.

 

The move comes just months after Fuller's, the brewer whose beers include
London Pride, sold its entire drinks business to Japan's biggest brewer
Asahi.

 

And last month, pub group Stonegate Pub, which owns the Slug and Lettuce
chain, announced it was buying rival Ei Group - once known as Enterprise
Inns - for £1.3bn.

 

Greene King chief executive Nick Mackenzie said CKA shared "many of Greene
King's business philosophies".

 

"They understand the strengths of our business and we welcome their
commitment to working with the existing management team, evolving the
strategy and investing in the business to ensure its continued long-term
growth," he added.

 

Greene King's directors said the terms of the deal were "fair and
reasonable" and that they would unanimously recommend it to shareholders who
will get the final vote on the tie-up.

 

Shares in Greene King surged more than 50% after the deal was announced.

 

Bad for customers?

Neil Wilson, analyst at Markets.com, said while the deal was good news for
shareholders, it was likely to be bad news for Greene King's customers.

 

"I think we can comfortably expect more pub closures. It's a whopping
[price] that implies CKA sees significant value in the property portfolio,"
he said.

 

In its statement, Greene King said CKA had no plans to make "material
changes" to group and management staff numbers and did not intend to
"initiate any material headcount reductions within the Greene King
organisation as a result of the acquisition."

 

A combination of rising cost pressures and people spending less on going out
has led to a wave of pub closures. Last year nearly 1,000 UK pubs shut,
according to property firm Altus Group.

 

Industry group the Campaign for Real Ale (Camra) has said more people are
drinking at home to save money, while younger people are consuming less
alcohol in general.

 

Meanwhile, pubs have faced a "triple whammy" of taxes in the form of high
Beer Duty, VAT and business rates.

 

Mr Wilson said the properties that pubs owned was making the sector
attractive to investors.

 

"Greene King owns the freehold or long leasehold on 81% of its properties.
The company recently carried out a revaluation of its property estate that
indicated a market value of £4.5bn against the £3.5bn book value," he said.

 

CKA was founded by Hong Kong's richest man Li Ka-Shing, whose business
empire spans retail, telecoms and power firms.

 

Mr Li retired from leading the firm last year. He was ranked 28th in this
year's Forbe's rich list.

 

He started work sweeping factory floors as a young boy, but subsequently
became one of the first Hong Kong tycoons to invest in mainland China, with
property playing a big part in his wealth.--BBC

 

 

 

No-deal papers reveal council fears over food supply

Legal school meal nutrition standards may need to be amended, or discarded,
in the event of a no-deal Brexit, according to internal local council
planning documents seen by the BBC.

 

The standards are designed to make sure school children are fed healthy
food.

 

Many councils say school meal costs will rise and funding for free school
meals increase if there is no-deal.

 

The government said the food industry was "well versed at dealing with
scenarios that can affect food supply."

 

"We have a highly-resilient food supply chain and consumers in the UK have
access to a range of sources of food. This will continue to be the case when
we leave the EU."

 

Prime Minister Boris Johnson insisted earlier on Monday that no-deal Brexit
preparations are on track.

 

Some councils are anticipating they will not meet nutrition standards
because of a rise in food prices and restriction of choice anticipated after
a no-deal Brexit, particularly on fresh imports from Europe.

 

For example, North Ayrshire Council says it "might need to amend school
nutrition standards", in its internal Brexit planning document.

 

Local councils are legally obliged to provide high standard food to
vulnerable users of public services and to manage the food supply challenges
of leaving the EU without a deal.

 

Brexit: How have UK councils prepared?

Brexit: Local councils to receive £56.5m fund

Other councils, such as North Tyneside, report that "special dietary
requirements may be difficult to meet" and that "if fresh produce is
difficult to come by" schools should "increase use of tins and frozen
goods".

 

Many councils say that prices for school meals will rise, and central
government funding for free school meals will have to increase.

 

Some also mention the possible use of food banks. Slough has contacted food
banks in its area to check contingency plans for food shortages, and some
Scottish councils have already increased funding for extra provision from
food banks.

 

The government says that school food standards must continue to be adhered
to post Brexit, but that schools have "significant flexibilities, which they
can refer to if certain items are in short supply."

 

Bedford Council's planning document from its internal Brexit planning team
says care homes are "advised to hold four to six weeks supply of
non-perishable foodstuffs".

 

Hastings Council's internal Brexit risk document even goes as far as saying:
"There might be the need for rationing. The severity would depend on what
was available and particularly the duration of any shortages."

 

Insiders suggest this is a reference to the prevention of stockpiling, more
than a return to wartime ration books.

 

The documents seen by the BBC date from the end of last year - up until last
month - but predate the appointment of Boris Johnson as prime minister.

 

Most take at face value the government's national assessment for March that
there will be no impact of a no-deal Brexit on overall food supply, but
there could be an impact on price and choice.

 

An October no-deal Brexit would come, however, at a time when the UK is
particularly dependent on European imports for its fresh food, and when
there is little to no excess warehousing space, unlike in March.

 

One catering industry veteran, Andy Jones, the chair of the Public Sector
100 Group of caterers, backed the councils: "Given a no-deal Brexit, they're
being very sensible. They're being very cautious, and rightly so, we're
going into something that we don't know about, we're going to the unknown.

 

"If a no-deal Brexit happens, I feel that the supply chain long term will
absolutely be under pressure. And that will affect the most vulnerable in
society."

 

Brexit: Food industry seeks no-deal competition waiver

Boris Johnson wins race to be Tory leader and PM

Mr Jones said concern about rationing was excessive, unless supply
disruptions lasted beyond the current four-to-six week worst case
assumption.

 

But he confirmed that menus would change and that "certain nutritional
standards will have to be altered or adapted for a short period of time" for
schools and hospitals.

 

He said public services such as new hospitals, had been built without food
storage, and that caterers were now effectively "fighting each other for
space" in warehouses.

 

Bidfood, one of the key suppliers to schools, hospitals, care homes and
prisons, said it was now preparing for no-deal again having bought up
warehouse space and assessed and identified alternatives for 400 key food
imports to store.

 

"The key areas that we're looking at in terms of making sure we have surety
of supply is around those key things that we import, like pasta, tuna,
tinned tomatoes, olive oil, chips, french fries, rice. These are not exotic
commodities, these are staples of everyday life, and we want to make sure
that all of our customers can get those," said Andrew Selley, chief
executive of Bidfood.

 

He said there was only limited scope to replace imports with domestic
production. "Because of our changing tastes, unless we're going to go back
to a menu based on the 1700s, we are going to look at imported products and
imported tastes and imported flavours."

 

However, he said his company would be "ready" to take care of key customers
and he does not anticipate "calamitous" problems.

 

"There will be challenges around availability, delays at ports and around
currency fluctuations," he said.

 

He added that the government would have to increase funding for free school
meals, and that it would be "more complicated" but manageable for suppliers
to meet more stringent standards in Scotland based on nutritional values.

 

The Department for Environment, Food and Rural Affairs said it was meeting
regularly with industry and retailers "to make sure we are prepared for all
scenarios as we leave the EU."

 

"The food industry is well versed at dealing with scenarios that can affect
food supply, from adverse weather damaging crops in other countries to
transport issues abroad. The UK has robust supply chains across a range of
countries to provide our food, in addition to the countless domestic food
producers across the UK," it added.

 

Bedford, Hastings, Slough, North Ayrshire and North Tyneside councils
confirmed that the documents seen by the BBC formed part of their no-deal
Brexit planning processes.--bbc

 

 

 

Brexit: The plan to force companies to be no-deal ready

There are many mysteries about the government's response to the leak of a
confidential internal no-deal document.

 

As we have reported before, the most important assumption of freight trade
flow through Dover and the Channel Tunnel after a no-deal Brexit is now that
it could fall by 40-60%. That figure features heavily in the report.

 

The change, an improvement on even worse assumptions, only occurred last
month, suggesting it is difficult to describe the document as old.

 

And it's not certain, as "Number 10 sources" have suggested, that it was
leaked by a former Cabinet minister trying to sabotage the prime minister's
visits to EU leaders.

 

Where Michael Gove is demonstrably correct is that this assumption is termed
to be a "reasonable worst-case scenario". He may very well consider that it
does not include various new policies that have been considered under what
the government refers to as its "turbo-charging" of the preparation of no
deal.

 

We are about to get new detail on these plans, as early as this week, I
understand.

 

No-deal dossier shows worst-case scenario - Gove

Brexit: A really simple guide

A decision in principle has been made to simply hand out a customs number to
every VAT-registered business that trades solely with the EU. This
"auto-enrolment" has been called for by various trade groups.

 

Additionally millions of pounds of taxpayers money will be offered via a
'Business Resilience Fund' to trade bodies to carry out training on customs
for these business.

 

On the first measure, 10,000 businesses can be auto-enrolled a day, meaning
that it will take a fortnight or so for the exercise to be completed, and
all these companies to receive a letter from HMRC.

 

HMRC has identified about 250,000 companies who need these "EORI" numbers,
and of these 150,000 are VAT-registered (annual turnover above £85,000) and
will be auto-enrolled, though some will have already enrolled.

 

Companies need an EORI number (Economic Operator Registration and
Identification) to move goods into or out of the EU.

 

The information provided by the number is used by customs authorities,
government departments and other agencies to keep track of goods.

 

The government has warned that companies that do not have one "may have
increased costs and delays" in the event of a no-deal Brexit.

 

The reason for auto-enrolment is that voluntarily encouraging people to
enrol has yielded just 71,000 registrations out of the 250,000 needed.

 

Enrolment is only the absolute basic foundation level step in order to be
able to complete the customs declarations that will be compulsory after no
deal. It is this foundational lack of preparation that will cause the bulk
of the problems and queues across Kent, under the government's reasonable
worst-case scenarios.

 

So auto-enrolment might help. But it is best seen as a type of registration
for the service. On top of that, traders will have to train to make
declarations, make extra time for shipments, access and appoint a customs
agent (and some assessments estimate there is a shortfall of 10-20,000) and
weigh their goods. None of this is required as part of the EU.

 

Controversial move

That is why the government will also announce funding for training to go
through business lobby groups too.

 

Some argue this is highly controversial. Most of the lobby groups, while
playing a constructive role in no-deal contingencies, are very much against
leaving without a deal. There is slight suspicion that the groups are being
lined up as the fall guys if trader readiness proves to be the Achilles heel
of Brexit preparation. Also if they do not get an EORI number until
September, it only leaves a matter of weeks before 31 October to train
250,000 businesses.

 

Then there is also the issue of the 100,000 smallest businesses, that are
not VAT-registered, and are the hardest to reach. Some representatives
communicated a concern that HMRC would use this as a means to hit small
companies with VAT registration too. The government appears sensitive to
this. But getting to these businesses in time seems rather challenging.

 

The bigger point here is that the EORI number really is just the first step.
There are Common Transit Convention barcodes, actual customs declarations,
animal origin and plant health checks, and export health certificates too.

 

The last point is that HMRC was well aware of the option of auto-enrolment,
as it occurs in other countries. They chose against it because they wanted
the enrolment process to allow companies to think and become engaged. Simply
having to do it automatically, rather underlines tens of thousands of
businesses aren't taking it seriously. Given that the PM has argued that the
chances of no deal is a "million to one" why would they spend a healthy
chunk of their working capital?

 

It is a vivid example of how readiness for no deal can not just be declared
by government or ministers. It is in the hands of individual businesses, who
have been marched up various hills before. The ones that spent nothing on
preparation in March are the ones who saved money. Now the government will
do the first step for them and throw money at the problem.--bbc

 

 

 

 

 

 

 


 

 


 

INVESTORS DIARY 2019

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
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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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