Major International Business Headlines Brief::: 22 August 2019

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Major International Business Headlines Brief::: 22 August 2019

 


 

 


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*  South African consumer inflation slows to 4% in July, lowest in seven
months

*  Mozambique president says "encouraging progress" in IMF talks

*  South Africa central bank likely to keep main rate at 6.50%

*  Annual earnings at South Africa's Shoprite miss estimates

*  South Africa's Harmony Gold eyes potential in AngloGold Ashanti assets

*  Egypt's Banque du Caire expects to sell minority stake by early 2020

*  Ditch cars to meet climate change targets, say MPs

*  Federal Reserve policymakers divided over US rate cuts

*  Argentina minister defends peso amid default risk

*  Google DeepMind's co-founder goes on leave

*  Three ways Trump could juice US economy

*  Ryanair loses court battle to block UK pilot strikes

*  Tesla sued by Walmart over solar panel fires

*  Government finances weaker than expected in July

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

South African consumer inflation slows to 4% in July, lowest in seven months

JOHANNESBURG (Reuters) - South Africa’s headline consumer inflation slowed
to 4.0% year-on-year in July, its lowest in seven months, from 4.5% in June,
data from Statistics South Africa showed on Wednesday.

 

On a month-on-month basis prices rose 0.4%, the same as the previous month.

 

Core inflation - which excludes the prices of food, non-alcoholic beverages,
petrol and energy - was at 4.2% year-on-year versus a 4.3% increase in June,
and was at 0.4% month-on-month, the same rate as in June.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Mozambique president says "encouraging progress" in IMF talks

MOSCOW (Reuters) - Mozambique’s talks with the International Monetary Fund
(IMF) are making “encouraging progress,” as the country seeks to restore
access to international financing, President Filipe Nyusi said on Wednesday.

 

Mozambique has been battling to recover from a debt crisis after admitting
in 2016 to $1.4 billion of previously undisclosed lending, prompting the IMF
to cut off support and triggering a currency collapse and debt default.

 

Speaking to Reuters on the sidelines of the Russian-Mozambican Business
Forum in Moscow on Wednesday, Nyusi said Mozambique was in touch with the
IMF on restoring suspended support to the southern African state.

 

“We want to establish a good relationship with our partners from financial
institutions so that we can continue to access financial resources, and we
are doing this with our partner the IMF, and they understand us. There is a
hope that better days will come,” Nyusi said.

 

“We are discussing programmes, of course. Every three months they visit us
in Mozambique, we are in contact. There is quite encouraging progress on
this.”

 

Asked about the impact of a ruling by the country’s Constitutional Court
that declared a state-run firm’s 2013 Eurobond issue illegal, Nyusi said:
“We are following very closely the implications of this decision. But we
need to safeguard the sovereign interests of Mozambique and its people”.

 

Nyusi said in July after the ruling that Mozambique was committed to
respecting international law on debt, a view he reiterated on Wednesday,
saying this was key to remaining credible with investors.

 

He declined to say whether the ruling could affect the country’s ability to
make repayments.

 

In June, Mozambique’s finance ministry said the country had reached a
restructuring deal in principle with holders of its defaulted 2023 bond.

 

The IMF welcomed that agreement, but said the heavily indebted country
needed a wider-ranging plan to ensure long-term debt sustainability.

 

Nyusi said talks with creditors were continuing.

 

“As for public debt, we have been discussing with the creditors to find ways
to address this problem. Our aim is to strengthen confidence with our
financial partners,” Nyusi said.

 

 

 

South Africa central bank likely to keep main rate at 6.50%

JOHANNESBURG (Reuters) - The South African Reserve Bank will probably play
it safe in coming months by keeping interest rates unchanged due to a
volatile exchange rate, despite an otherwise favourable inflation outlook, a
Reuters poll found on Wednesday.

 

All but two of the 20 economists surveyed in the past week suggested rates
would stay on hold on Sept. 19 at 6.50% after a quarter-point cut at the
previous meeting in July. The two expect another quarter-point cut to 6.25%.

 

South Africa’s economy is expected to have escaped recession in the second
quarter, partly helped by retail sales which grew by 2.4% in June. The
economy had shrunk by 3.2% in the first three months of the year.

 

“The return to growth increases the risk that policymakers will leave their
key interest rate on hold at 6.50% next month, rather than – as we expect –
cut to 6.25%,” said John Ashbourne, senior emerging markets economist at
Capital Economics.

 

“They may also be spooked by the rand’s recent weakness,” Ashbourne added,
explaining why policymakers may opt to wait.

 

The rand has lost around 7% of its value since the start of this month,
pressured by the increasing likelihood of a credit rating downgrade linked
to a massive additional bailout for state power firm Eskom, along with signs
of slowing global growth.

 

Still, a separate Reuters poll earlier this month suggested the rand could
either firm up to 13.47 per dollar in 12 months or weaken to 15.90/$ in that
period.

 

But the SARB does not target a specific level for the exchange rate. Like
most central banks, it instead monitors the currency’s impact on domestic
inflation.

 

Inflation is expected to average 4.4% this year and 4.9% next year, slightly
lower than a Reuters poll taken last month.

 

The economy is expected to grow 0.6% this year and expand 1.3% next year,
also slightly lower than in the August poll.

 

“A SARB rate cut is not our mainstream scenario, especially as we expect
Moody’s to downgrade South Africa in November, which will already in itself
prompt significant capital outflows,” said Francesca Beausang, senior
economist at Continuum Economics.

 

“If Moody’s fails to downgrade South Africa and growth underperform relative
to the SARB’s forecast of 0.6% in 2019, then there exists a possibility of a
25 basis-points rate cut in early 2020,” Beausang added.

 

 

 

Annual earnings at South Africa's Shoprite miss estimates

JOHANNESBURG (Reuters) - South African supermarket chain Shoprite Holdings
missed full-year forecasts on Tuesday hurt by inventory shortages at home
and currency devaluations in the rest of Africa.

 

Shoprite is recovering from a poor first half when sales and profit were hit
by a strike at its largest distribution centre at home and installation of a
new enterprise IT system which disrupted supply chains.

 

In the rest of Africa, currency devaluations and forex shortages in markets
such as Angola, its biggest operation outside South Africa, have made it
difficult to operate profitably elsewhere on the continent, touted as the
next growth spot for retailers.

 

Trading profit fell by 14.3% to 6.9 billion rand, while basic headline
earnings per share (HEPS) for the year ended June 30 declined by 19.6% to
780.8 cents, compared with a restated figure of 971.4 cents a year earlier.

 

That was worse than the 15.5% fall forecast by analysts, IBES data from
Refinitiv showed.

 

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

 

Chief Executive Officer Pieter Engelbrecht said in a statement in-stock
levels at the Supermarkets South Africa business, which generates 74.9% of
group sales, are now higher than before it implemented the new system.

 

Sales there grew by 4.9%, with like-for-like sales growth of 1.9%.

 

“Notwithstanding the much improved recent performance in our core
Supermarkets South Africa division, it was a testing year,” Engelbrecht
said.

 

“A constrained economy, inventory shortages post industrial action and the
implementation of a new enterprise wide IT system across our store base
resulted in lost sales.”

 

Supermarkets Non-South Africa reported a trading loss of 265 million rand
for the year as ongoing forex shortages, currency devaluations and the
aftermath of rampant inflation in Angola took a toll on the business.

 

 

 

South Africa's Harmony Gold eyes potential in AngloGold Ashanti assets

JOHANNESBURG (Reuters) - South Africa’s Harmony Gold is interested in many
projects including AngloGold Ashanti’s Mponeng operations, CEO Peter
Steenkamp said on Tuesday.

 

Mponeng is “probably one of the many projects we are looking at”, Steenkamp
said in a media call but declined further comment.

 

AngloGold said in May that it would review divestment options for its
Mponeng mine and other South African assets to focus on higher returns
elsewhere.

 

 

 

Egypt's Banque du Caire expects to sell minority stake by early 2020

CAIRO (Reuters) - The head of Egypt’s state-owned Banque du Caire told
reporters on Tuesday that he expects to sell 30-40% of the bank by the end
of 2019 or in early 2020.

 

A deal to sell the bank was cancelled in 2008 and an initial public offering
has been postponed repeatedly over the past three years.

 

“We plan to offer 30-40% of the shares in the bank in principle through a
capital increase and the sale of a stake to a strategic investor,” Chairman
and CEO Tarek Fayed said.

 

 

 

Ditch cars to meet climate change targets, say MPs

People will have to get out of their cars if the UK is to meet its climate
change targets, MPs say.

 

The Science and Technology Select Committee says technology alone cannot
solve the problem of greenhouse gas emissions from transport.

 

It says the government cannot achieve sufficient emissions cuts by swapping
existing vehicles for cleaner versions.

 

The government said it would consider the committee's findings.

 

In its report, the committee said: “In the long-term, widespread personal
vehicle ownership does not appear to be compatible with significant
decarbonisation.”

 

It echoes a report from an Oxford-based group of academics who warned that
even electric cars produce pollution through their tyres and brakes.

 

How polluting are idling cars and buses?

Madrid bans old cars to cut pollution

The AA said the committee had underestimated the power of new technology to
solve pollution in cars.

 

But the MPs are demanding improvements in public transport, walking and
cycling, which benefit health as well as the climate.

 

They also criticise the government’s recent policies on the costs of
transport.

 

They point out that most of the increase in average new car emissions in
2017 was caused by consumers choosing more polluting models because
financial incentives to buy cleaner cars are insufficient.

 

Improving public transport

A government strategy should aim to reduce the overall number of vehicles
required, the report says.

 

This would be achieved by:

 

Promoting and improving public transport

Reducing the cost of public transport relative to driving

Encouraging vehicle usership in place of ownership (car sharing, car hire
and taxis)

And boosting walking and cycling.

Ministers have held down fuel duty increases in recent years following
lobbying from motoring groups.

 

But the MPs say they should ensure that the annual increase in fuel duty is
never lower than the average increase in rail or bus fares.

 

For drivers investing in electric vehicles there should be a better network
of charging points.

 

But there’s a warning that more research is needed on the environmental
impact of the batteries of electric vehicles.

 

The report warns: “Hydrogen technology may prove to be cheaper and less
environmentally damaging than battery-powered electric vehicles. The
government should not rely on a single technology.”

 

The AA’s president Edmund King told BBC News: “Stating that widespread
personal vehicle ownership isn’t compatible with significant decarbonisation
seems to be giving up on emerging science and technology.

 

“Technology is developing at a rapid rate with great potential from more
efficient electric and hydrogen fuel cell vehicles.

 

"More emphasis should be going into renewable energy and greener vehicle
production rather than higher fuel duty or banning hybrids, as the report
recommends.

 

“The fastest growth in traffic is by vans due to internet deliveries so more
technological effort should be put into decarbonising that sector as a
priority.”

 

 

'Not enough being done'

The MPs’ report stretches beyond transport to cover the whole economy.

 

Its general message is that not enough is being done to ensure that the UK
achieves its recently-adopted Net Zero Carbon target by 2050.

 

The report says Stamp Duty should be increased for badly-insulated homes.
Homebuyers should then be able to make improvements, and offset the cost
with a Stamp Duty rebate.

 

Another idea in a wide-ranging document is for the UK to set a target for
reducing the emissions embedded in the manufacturing process of the goods we
buy from abroad.

 

This would prevent Britain from achieving cuts in greenhouse gases by
exporting what’s left of its own polluting industries.

 

The MPs backed many of the recommendations of the government’s official
advisory body, the Committee on Climate Change.

 

But they complained that its chair, Lord Deben, should have declared the
interest of his consultancy firm in Drax power station, the largest
recipient of renewable energy subsidies in the country, and Johnson Matthey,
which is about to make a huge investment in electric vehicles.

 

A government spokesman said: "From transport to heating, electricity to
agriculture, we are working to put in place the right measures to help us
tackle global warming. We welcome the committee's report and will consider
its findings.

 

"We are going further and faster to tackle climate change than any other
major economy having legislated for net zero emissions by 2050."--BBC

 

 

 

Federal Reserve policymakers divided over US rate cuts

The US Federal Reserve debated cutting interest rates more aggressively last
month, according to minutes from the central bank's last meeting.

 

Some officials pressed for a 0.5 percentage point cut, rather than the 0.25
percentage point reduction announced. Others resisted any change.

 

The differences, in minutes released on Wednesday, come as Donald Trump
presses for a one percentage point cut.

 

The minutes show that the Fed did not discuss the president's criticism.

 

After four rate increases last year, the last one in December, the Fed has
been under relentless pressure from Mr Trump to stimulate the economy by
reversing course and slashing rates.

 

The minutes show a broad concern among the 12 Fed policymakers over a global
economic slowdown, a US-China trade war, and sluggish inflation.

 

"A couple of participants indicated that they would have preferred a 50
basis point cut," according to the minutes, which added that policymakers
favouring such a move were concerned by inflation being too low.

 

'Flexible'

The July rate cut was viewed as "part of a recalibration... or mid-cycle
adjustment" and, given the global economic uncertainties, the officials
"highlighted the need for policymakers to remain flexible and focused on the
implications of incoming data for the outlook".

 

Fed chairman Jerome Powell, dubbed "clueless" is one Twitter attack by Mr
Trump, acknowledged at his news conference on 31 July that the rate cut was
meant as insurance "against downside risks from weak global growth and trade
policy uncertainty, to help offset the effects these factors are having on
the economy".

 

"The Fed clearly wants to be flexible," said Willie Delwiche, investment
analyst at Baird. "They are clearly worried about some of the global
tensions that are out there, whether it is trade or Brexit or some of those
international developments."

 

And it comes amid uncertainty over whether Mr Trump feels some sort of
economic stimulus is needed. On Tuesday, he hinted at the need for cuts in
payroll tax and capital gains tax, only to dismiss the idea on Wednesday.

 

Analysts will be hoping that Mr Powell can provide more clarity on Friday
when he is due to give a speech during a meeting of global central bankers
at the annual Jackson Hole meeting in Wyoming.--BBC

 

 

 

Argentina minister defends peso amid default risk

Argentina will use its dollar reserves to shore up declines in its currency,
Treasury Minister Hernan Lacunza has said, as markets brace for a default.

 

Debt ratings agency Fitch said the peso's recent depreciation "suggests a
real risk of default".

 

Fitch said it also "raises the potential for a sharper deterioration in
economic growth".

 

Much of Argentina's debt is priced in dollars and the peso's decline makes
it harder to afford the interest.

 

Default occurs when the original terms of a loan are not met and can lead to
anything from a delayed interest payment to a much more serious failure to
repay the debt.

 

Argentina's central bank has spent $709m to bolster the peso since the 11
August primary election, which triggered a collapse in the value of the
currency.

 

President Mauricio Macri was beaten in the nominating contest by centre-left
candidate Alberto Fernandez, who is now expected to win the presidential
election in October.

 

Since that result, traders have been worried that Mr Fernandez could take
Argentina back to populist economic policies.

 

The peso fell 0.53% at 55.03 to the US dollar. Prior to the poll, a dollar
bought just 45 pesos.

 

Analysis by Daniel Gallas, BBC South America business correspondent

Argentina is getting poorer.

 

That's not only due to recession, which economists say will see the
country's output shrink by 2.5% this year. The devaluation of the Argentine
peso is also making the country poorer.

 

More than 80% of the government's debt is in foreign currency - and the
recent devaluation of more than 20% will make it harder for authorities to
repay it. Interest rates above 60% - used to control inflation - turn the
picture even gloomier.

 

Fitch says that in 14 cases of sovereign debt default since 2001, eight of
them were preceded by a massive devaluation of the currency, just as we are
seeing in Argentina.

 

And it all of this trickles down to ordinary lives, with now one in every
three Argentines living below the poverty line.--BBC

 

 

 

Google DeepMind's co-founder goes on leave

The co-founder of DeepMind, the British artificial intelligence company
owned by Google's parent Alphabet, has gone on leave from the company.

 

DeepMind did not say why Mustafa Suleyman was taking time off, but said it
was a mutual decision.

 

"Mustafa's taking some time out right now after 10 hectic years," the
company said in a statement.

 

The firm expects Mr Suleyman to return to his post as DeepMind's head of
applied AI later this year.

 

The news was first reported by Bloomberg, which linked the move to recent
controversies over some of DeepMind's work in the health sector.

 

The "applied" unit of DeepMind, which is tasked with finding and
implementing practical applications of the company's research, faced heavy
criticism in July 2017 over its mobile app Streams.

 

DeepMind had partnered with the Royal Free Hospital in London to help
doctors predict instances of kidney injury by using the app. The UK's data
regulator said the hospital did not tell patients enough about the way their
data was used - but said the app could continue to be used if the
"shortcomings" were addressed.

 

In November 2018, it was announced management and development of the Streams
app would taken over by a newly-created Google Health division.

 

Google DeepMind NHS app test broke UK privacy law

Google accused of 'trust demolition' over health app

NHS to set up national artificial intelligence lab

Since then, the app has received considerable praise by hospital managers,
credited with significantly speeding up diagnoses.

 

"It's a huge change to be able to receive alerts about patients anywhere in
the hospital," said Mary Emerson, from the Royal Free Hospital, in an
interview with the BBC earlier this month.

 

"Healthcare is mobile and real time, and this is the first device that has
enabled me to see results in a mobile real-time way."

 

The BBC was unable to reach Mr Suleyman for comment directly.--BBC

 

 

 

Three ways Trump could juice US economy

Fears of a possible recession on the horizon has led the White House to
begin considering several emergency measures to kickstart the US economy.

 

Donald Trump likes to claim credit for "the greatest" economy ever which he
hopes will help him win re-election in 2020. America's current expansion is
the longest in US history. More Americans are in work. They're being paid
more. And they're spending more.

 

Yet on Tuesday, the president was talking of the need for stimulus.

 

By Wednesday he had reversed himself, backing away from tax cuts to boost
the economy.

 

His contradictory messages reflect his growing concerns about a possible
slowdown - or even a recession.

 

If many economists agree on one thing it's that financial markets are
flashing red, there is weakness overseas and something may need to be done.

 

So what options are the administration's top economic aides discussing to
avoid an election year recession?

 

What tax cut is Trump mulling?

Speaking to reporters at the White House on Tuesday, President Trump said
his administration is looking at a temporary payroll tax cut to help the
economy. One day later he denied it was on the table.

 

Yet if he changed his mind again, the appeal is simple - if you're worried
about a recession, a payroll tax cut can boost consumer spending, which
accounts for about two-thirds of the US economy.

 

Most American employees pay a "payroll tax", which is separate from their
federal income tax and is used to fund healthcare and benefit programmes for
the elderly - such as Medicare and the Social Security Administration.

 

But not everyone is convinced that is the right medicine for the patient
given that American consumers are still spending happily.

 

"Right now, investment is lagging, not consumer spending," says Kyle
Pomerleau, Chief Economist at the Tax Foundation. "As such, a payroll tax
doesn't seem well timed."

 

He suggests that it was Trump's escalating trade dispute between China and
the United States that was holding up businesses' decision making.

 

"He might have better luck if he were to rescind some of his tariffs, which
are probably causing some uncertainty for businesses and impacting
investment."

 

Has this been done before?

The policy was last used during the Obama administration in the wake of the
2008 financial crisis when it faced huge pushback from Congressional
Republicans.

 

In 2011 and 2012, the former president lowered the payroll tax from 6.2% to
4.2%, immediately giving American workers more disposable income.

 

The White House is nervous that something bad may happen to the economy. As
an insurance policy, it floated the idea of using the policy Republicans
once opposed before walking it back.

 

"If the mere suggestion that a recession might threaten their own election
prospects is enough to send Republicans rushing to embrace an economic
stimulus tool they opposed during the Obama years, that would be blatantly
hypocritical and nakedly political," Steve Wamhoff at the Institute on
Taxation and Economic Policy wrote in a recent blog post.

 

Most tax experts agree that cutting the payroll tax can help in a downturn.
But if it becomes routine, it could raise longer term questions about the
funding for programmes like Social Security - a key component of the US
social safety net.

 

US economy under Trump: Greatest in history?

And like all tax cuts, a payroll tax cut would also be costly. It would add
to the deficit, but just how much? The Committee for a Responsible Federal
Budget, an independent public policy think tank, has done the maths.

 

They estimate that cutting the employee-side Social Security payroll tax by
two percentage points for two years would cost nearly $300bn, before
interest.

 

All that red ink could make the government less effective at responding to a
recession.

 

"There are cheaper and more progressive ways to stimulate consumption,"
according to Eugene Steuerle, an Institute fellow and the Richard B Fischer
chair at the Urban Institute.

 

What other tax is Trump looking at?

While the payroll tax cut is getting a lot of attention, it's not the only
tax proposal publicly supported by Donald Trump.

 

The White House is also considering an executive order to require the US
Treasury to index capital-gains taxes to inflation. A move that would cost
about $100bn over 10 years.

 

Yet 24 hours after talking about it, the President changed his mind and said
the tax move wasn't necessary.

 

The move is controversial because it would bypass Congress and is seen as
disproportionately benefitting the rich who tend to own more assets and
therefore would get more out of this type of tax cut.

 

"Indexing of capital gains is a permanent change, not a temporary
countercyclical or anti-recession policy", said Eugene Steuerle who served
as deputy assistant secretary of the US Department of the Treasury for Tax
Analysis.

 

"It mainly benefits higher-income households, it stimulates consumption much
less than other anti-recession policies."

 

That criticism appeared to have made the president rethink his position by
Wednesday. He told reporters he was no longer looking at the tax cut,
describing it as "elitist".

 

What do Republicans think?

The idea still has plenty of supporters among Republicans.

 

Texas Senator Ted Cruz and a group of Republican senators sent a letter in
late July to Treasury Secretary Steve Mnuchin urging him to take this
action.

 

Doing so, they argued, would benefit "Americans across all income levels"
because of trickle down economics.

 

But there are plenty of reasons to be sceptical.

 

Trump promised his major tax cut in 2017 would usher in an investment boom.
This would allow the US to grow 3% a year (much faster than it did during
the Obama years) and make up for the lost government revenue.

 

The reality, however, has not lived up to the hype.

 

The US budget deficit has already surpassed last year's total figure and
recently jumped by 27% according to government figures released on Monday.
The Treasury Department forecasts a deficit of more than $1tr by the end of
the fiscal year, two months from now.

 

Add to this that business spending, one of the indicators the Trump
administration likes to look at, is constrained.

 

What about interest rates?

And if fiscal stimulus won't guarantee prosperity, the president can return
to his favourite economic bogeyman - America's central bank, the Federal
Reserve.

 

Donald Trump renewed his attacks against Fed chair Jerome Powell, comparing
his handling of the economy in a tweet to a "golfer who can't putt".

 

Mr Trump has persistently called for the Fed to lower interest rates to spur
growth and calm financial markets. Minutes released on Wednesday from the
last Fed meeting show the board was split over its rate cut last month.

 

The stock market is one of the barometers the President watches but recently
the Dow Jones Industrial Average suffered its biggest single day loss of the
year. This may explain his latest push for a 100 basis point rate cut - the
biggest since the 2008 crisis.

 

While he blames the Fed for not moving aggressively enough, many economists
say it is Mr Trump's trade policies that are weakening the global economy.
There is also concern that he is undermining the Federal Reserve just when
he may need it most.

 

Are markets signalling that a recession is due?

Is this all about recession fears?

Trump continues to say he is not worried about a recession. But his fear
that a downturn might turf him out of office has made him and his advisers
very nervous.

 

It is not clear when a downturn may occur or how it would affect Mr Trump's
re-election prospects. But the White House isn't taking any chances.

 

Just last Monday, Vice-President Mike Pence accused the press and Democrats
of rooting for a recession when he spoke at the Detroit Economic Club.

 

"Despite the wishful thinking of some naysayers in the media and in the
Democratic Party, the American economy is strong."

 

He adds this warning, should his boss not win a second term: "For all of the
progress we've made, all of it could be lost."--BBC

 

 

 

Ryanair loses court battle to block UK pilot strikes

The High Court in London will allow a proposed strike over pay and
conditions by UK-based Ryanair pilots on Thursday and Friday.

 

Earlier, the airline won a bid to stop Ireland-based pilots from striking,
but more of its pilots fly from the UK.

 

Ryanair said it would aim to minimise disruption for passengers and would be
able to run its "full schedule of flights".

 

However, it said it could not rule out some delays.

 

Ryanair's lawyers told the Irish court that the Forsa pilots' union, which
represents around 180 Ryanair pilots, had not let talks reach a conclusion
before announcing the strike.

 

Dublin-based Ryanair pilots vote to strike

What's going on with my holiday flights?

Pilots can be drafted in from elsewhere in Europe to fill in during strike
action.

 

Ryanair said it would inform passengers of any changes to their flights by
email and text message. "If you have not received any SMS or email from us,
your flight is scheduled to operate," it said. Customers can also check its
website, it said.

 

In early August, Ryanair pilots in the UK joined pilots in Ireland in voting
to strike over pay and conditions.

 

The British Airline Pilots Association (Balpa) announced two 48-hour
walkouts, one from 22-23 August and another from 2-4 September.

 

But Ryanair turned to the courts in London and Dublin in a bid to block the
industrial action, prompting Balpa to accuse the airline of "bully boy"
tactics.

 

"We are clear that we want to settle the dispute and bring about a change in
Ryanair for the better," said Balpa general secretary, Brian Strutton,
welcoming the judgement. "Pilots in Ryanair are seeking the same kind of
policies and agreements that exist in other airlines - our demands are not
unreasonable."

 

Job loss threat

Balpa's decision to walk out came only days after the budget airline warned
of job losses following a 21% fall in quarterly profits, because of higher
costs for fuel and staff, and reduced ticket prices.

 

The union said 72% of its members at the company had taken part in the
ballot, with 80% of those supporting strike action.

 

However, Ryanair said that fewer than 50% of its UK pilots were members of
Balpa, and of these, just 57% voted in favour of industrial action.

 

In a letter to Balpa, Ryanair's director of HR strategy and operations,
Darrell Hughes, said senior captains were paid up to £180,000 per annum and,
because of this, pilot turnover had fallen to zero "in recent months".

 

He said: "At this difficult time for UK pilots facing base cuts and
closures, Balpa should be working with Ryanair to save UK pilot jobs, not
endanger them through ill-timed and ill-judged disruption of our customers'
travel plans, just 10 weeks before the threat of a no-deal Brexit. We remain
available for talks at your convenience."

 

Pilot shortage

On 31 July, Ryanair boss Michael O'Leary warned staff in a video message to
prepare for job cuts, saying the airline has 900 too many pilots and cabin
crew members.

 

He said the two weakest markets were Germany, where Ryanair faced fierce
competition on price, and the UK, where there were Brexit uncertainties.

 

"It's been a challenging summer, we're facing into a very difficult winter,"
he said in the video, seen by the BBC.

 

But Captain Tilmann Gabriel, a former pilot who teaches aviation management
at City, University of London, told BBC Radio 5 Live that pilots were in
short supply, with 800,000 more needed over the next two decades.

 

"That means we need to produce... 110 pilots every day [for] the next 20
years and we are producing much less," he said. "So of course the price goes
up."

 

'Curt and dismissive'

In a tweet, Ryanair welcomed the judgement from the Irish court.

 

It said all Ryanair flights from Irish airports would now take off as
normal.

 

The airline had previously warned that the 180 pilots who were set to strike
on Thursday 22 and Friday 23 August would put holidaymakers' travel plans at
risk if the action went ahead.

 

Justice McDonald told Dublin High Court that he would restrain the pilots'
union, Forsa, "from directly or indirectly, organising, directing or
endorsing" a strike by its members on Thursday and Friday.

 

Forsa's lawyers had told the court that Ryanair had been "curt and
dismissive" of a 30-page proposal it submitted to the airline on pay and
conditions.

 

Earlier in August, Ryanair pilots in the UK joined pilots in Ireland in
voting to strike over pay and conditions.--BBC

 

 

 

Tesla sued by Walmart over solar panel fires

US supermarket chain Walmart is suing Tesla's energy division, after solar
panels on seven of its stores caught fire.

 

It alleges that the firm was negligent in how it installed the panels on the
roofs of the stores.

 

Court documents describe a string of fires that occurred between 2012 and
2018 at Walmart locations in Ohio, Maryland and California.

 

Tesla has not yet responded to the claims.

 

The lawsuit alleges that the first fire occurred at a Walmart store in Long
Beach, California in 2012.

 

Another in Beavercreek, Ohio, in March 2018 saw customers evacuated and the
store closed for eight days.

 

Walmart is asking Tesla to remove solar panels from all its stores and to
pay damages.

 

It alleged that Tesla deployed individuals to inspect the solar systems who
"lacked basic solar training and knowledge".

 

"To state the obvious, properly designed, installed, inspected and
maintained solar systems do not spontaneously combust," the court documents
claim.

 

Walmart faces backlash over gun sales after shootings

Tesla motors make classic Ferraris go faster

Fiat to pool with Tesla to avoid EU fines

Tesla and Walmart have partnered on several clean energy initiatives, and
more than 240 stores have been fitted with solar panels from the firm.

 

Walmart has also pre-ordered at least 45 Tesla electric trucks to add to its
vehicle fleet.

 

In 2016, Tesla spent $2.6bn (£2.1bn) on clean energy firm SolarCity, which
was founded by Elon Musk's cousins but, since then, installations have
dropped by more than 85% and Tesla has cut its sales force and ended a
distribution deal with US store Home Depot.

 

Mr Musk's firm is also facing investigations from the US National
Transportation Safety Board regarding fires in several Tesla cars.

 

Last month, the firm reported a $408m loss in second quarter earnings.

 

Tesla's share price fell on news of the Walmart lawsuit, which was filed in
the New York State Supreme Court on Tuesday.--BBC

 

 

 

 

Government finances weaker than expected in July

The UK posted a smaller-than-expected budget surplus in July as government
spending increased.

 

The lower July surplus leaves the government finances in a weaker position
overall for the first four months of this financial year.

 

That raises questions over prime minister Boris Johnson's room for
fulfilling promises over tax cuts and more spending.

 

Borrowing so far this year has grown to £16bn, an increase of 60% on last
year.

 

July spending

A growing wage bill and higher spending on goods and services was behind the
lower July surplus, which fell to £1.3bn.

 

Analysts had been expecting a £2.7bn surplus, which would have been less
than the £3.6bn booked last year.

 

The government typically posts surpluses in January and July because
taxpayers submit their self-assessment returns in those months. Those tax
payments reached £9.4bn in July, £300m more than the same time last year,
helping to balance increased government spending for that month.

 

However, overall the government's borrowing position has worsened, said
Howard Archer, chief economic adviser to the EY ITEM Club.

 

"Central government revenues were down 0.5% on a year earlier, reflecting a
combination of weak activity and the generous increases in income tax
allowances which came into force in April.

 

"At the same time, current expenditure has continued to run at a pace well
ahead of that implied by the full-year plans," he said.

 

Since the beginning of the financial year in April, the government has
borrowed £16bn - £6bn more than it had by this time last year. The Office
for National Statistics' forecast for the whole year was £29bn - so we are
more than half way after just 4 months.

 

So at this early juncture, the public finances are looking weaker than
expected. Given some big spending promises on police, schools prisons,
digital infrastructure, extra no-deal preparation PLUS the promise of a tax
cut for those who earn between 50 and 80K PLUS a potential "stimulus
package" to support the economy in a no-deal Brexit scenario, then it seems
clear the government will have to raise taxes sharply elsewhere or abandon
the last chancellor's target of balancing the books by the mid-2020s.

 

Successive Conservative-led governments have been driven by an imperative to
reduce, then eliminate the deficit. It's a target has been kicked into the
future many times but not abandoned. The outlook now suggests a trajectory
of rising government borrowing rather than falling and a new,
uncharacteristic tolerance of it from a Conservative government.

 

The lower July surplus follows a steep climb in borrowing in June. That
month's £7.2bn deficit was driven by higher debt interest payments and
rising spending on services.

 

It was the highest June borrowing figure since 2015.

 

Brexit bill

The lower-than-expected surplus underlines the budget constraints facing
Boris Johnson, who has promised to increase spending ahead of Brexit.

 

The prime minister has made billions of pounds of spending commitments in
his first few weeks in office and the government is also facing a hefty bill
for no-deal preparations.

 

July's surplus figure, released on Wednesday, forms part of a complicated
picture for the UK economy, which shrank by 0.2% between April and June, the
first economic contraction since 2012.

 

UK economy shrinks for the first time since 2012

UK wage growth picks up to 11-year high

The unemployment rate increased slightly to 3.9% in the three months to the
end of June, but this remained close to a 44-year low.

 

Nevertheless, median disposable household income was forecast to grow by
1.4% to £29,400 over the course of the year.

 

And people are feeling the effects of that extra money in their pockets.
Household spending grew by 0.5% between April and June as wage growth hit an
11-year high.

 

It has never been cheaper for the government to borrow, which it does by
issuing bonds.

 

The interest paid on 10-year UK Treasury bills has fallen to historic lows.
They now return just 0.5%.--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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opinions expressed and recommendations made are subject to change without
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